by Brian Shilhavy
Editor, Health Impact News

In two major headline stories today on Monday, July 18th, there was some bad news for Germany and Europe, but some potentially good news for the U.S.

This is not a good time to be dependent on public utilities if you live in Europe, especially Germany, as Russian natural gas supplier Gazprom reportedly declared a force majeure today on the Nord Stream 1 pipeline into Europe, stating that “extraordinary” circumstances outside its control would not allow them to reopen it.

Already days before the July 22 European “Doomsday” when the scheduled Russian 10-day maintenance of the crucial Nord Stream pipeline to Germany is slated to end – but which was thrown into deep doubt given Gazprom recently said it can no longer guarantee its “good functioning” due to crucial turbines being previously held up in Canada related to sanctions – the Russian energy giant has declared Force Majeure to one major European customer.

Simply put, Gazprom declared extraordinary and extreme circumstances to void itself from all contractual obligations to this customer, thus the gas will stop flowing indefinitely, as Reuters reports in a breaking development Monday, “Russian gas export monopoly Gazprom has declared force majeure on gas supplies to Europe to at least one major customer starting June 14, according to the letter seen by Reuters.” The letter is dated July 14. “It said the force majeure measure, a clause invoked when a business is hit by something beyond its control, was effective from deliveries starting from June 14,” writes Reuters.

As we’ve been detailing, German authorities have of late taken unprecedented steps in anticipation of an enduring Russian gas halt, essentially dimming the lights across the country – which has included everything from limiting hot water, to shutting down swimming pools, to quite literally dimming city street lights as it entered “alarm” stage over dwindling supply. (Full article.)

Meanwhile in the U.S., disaster was averted today, at least for now, as it was announced that the Biden Admin has set up an emergency “National Mediation Board” and signed an executive order that prevents any work stoppage for 60 days.

THE WHITE HOUSE HAS ARRIVED: An emergency board to resolve an ongoing labor dispute between rail carriers and the unions that represent their workers will get to work today, averting strikes that seemed imminent.

“I have been notified by the National Mediation Board that in its judgment these disputes threaten substantially to interrupt interstate commerce to a degree that would deprive a section of the country of essential transportation service,” President Joe Biden wrote Friday in an executive order that prevents any work stoppage for 60 days.

The fine print: The panel will consist of “a chair and two other members, all of whom shall be appointed by the President to investigate and report on these disputes. No member shall be pecuniarily or otherwise interested in any organization of railroad employees or any carrier.” It will “report to the President with respect to the disputes within 30 days of its creation.” (Full article.)

Any “good” news for the short-term is temporary, of course, as the planned collapse of the world’s financial system is now inevitable.

Charles Hugh Smith reminded us all of the Economics 101 lesson in a recent blog post at of two that when your society is built on debt that cannot be paid back, there is only one solution: DEFAULT.

Gazprom won’t be the first force majeure or bankruptcy that we will be reading about in the news in the days ahead….

UPDATE: Since publishing this article earlier today, Zero Hedge News is reporting that Canadian energy firm TC Energy has declared force majeure on some crude shipments on the Keystone pipeline after a power failure at a pump station in South Dakota. This could affect refineries in the U.S. converting crude oil into gasoline. See:

Canadian Energy Firm Declares Force Majeure On Keystone Pipeline After Power Outage

The Only Real Solution Is Default

by Charles Hugh Smith

The destruction of ‘phantom wealth’ via default has always been the only way to clear the financial system of unpayable debt burdens and extremes of rentier / wealth dominance.

The notion that the world could always borrow more money as long as interest rates were near-zero was never sustainable. It was always an unsustainable artifice that we could keep borrowing ever larger sums from the future as long as the interest payments kept dropping.

The only real solution to over-indebtedness since the beginning of finance is default. There are pretty names for variations on default that sound much less gut-wrenching–debt jubilees, refinancing, etc.– but the bottom line is the debts that can’t be paid won’t be paid and whomever owns the debt as an asset absorbs the loss.

Every default is a debt jubilee for the borrower. Whether the default is informal or formalized in bankruptcy, the debt payments are no longer being paid to the lender / owner of the debt.

Every debt jubilee is a default that forces the owner of the debt to write the value down to zero and absorb the loss. The jubilation of the owner of the debt is rather muted unless the state swoops in and passes the losses onto the taxpayers via bailouts / transferring the losses to the public’s balance sheet.

Every default is a refinancing–to zero. We’ve refinanced the debt so the borrower pays zero and the value of the loan / debt is now zero.

Very few ordinary households own other people’s debts as assets. It’s the wealthy few who own most of the student loans, vehicle loans, mortgages, government and corporation bonds, etc.

Yes, ordinary households may own other people’s debts through pension plans or ownership of mutual funds, but by and large debt is a favored asset of the rentier class, i.e. the wealthiest few.

We’re constantly told that mass defaults would destroy the economy, but this is flim-flam: mass defaults would destroy much of the wealth of the rentier class which has been greatly enriched by the global expansion of debt, while freeing the debtors of their obligations.

Recall that debt is the transfer of income from the borrower to the owner of the debt. Borrowing money is like every other form of consumption: when it’s cheap and abundant, we over-indulge. The costs are only apparent after the banquet has been cleared.

The illusion that the global economy could effortlessly add trillions in debt to fund living large forever was based on a brief historical anomaly of zero interest rates enabled by low inflation. There’s a long lag between the vast expansion of debt / consumption and the eventual consequences on supply, demand, risk and price discovery.

The lag time is up and now the consequences are finally visible: the tide of rapid growth in consumption and income required to fund ever-greater burdens of debt has ebbed, and so the global burden of debt–$300 trillion or so– is no longer sustainable / payable.

The favored solutions of the state–printing money or transferring the losses to the public–are no longer viable. Now that inflation has emerged from its slumber, printing trillions to bail out the wealthy is no longer an option. The public, so easily conned into accepting the bailout of the wealthy in 2008, has wised up and so that particular con won’t work again. (“Bail out the super-wealthy now or your ATM machine will stop working!” Uh, right.)

The state is the protector of the wealthy, and so defaults that actually impact the wealthy are anathema. The wealthy will demand the state absorb their losses (recall that profits are private, losses are socialized) The only equitable solution is to force the losses on those who bought the debt as a rentier income stream.

I’ve been exploring the Core-Periphery dynamic for a decade. ( The E.U., Neofeudalism and the Neocolonial-Financialization Model May 24, 2012). This dynamic plays out in a number of ways on a number of levels.

Defaults will play out along the lines of Core-Periphery asymmetries. Some states will be able to “print their way out of default” but most will not, as unrestrained printing of money on such a vast scale would devalue the currency, triggering an even more destructive systemic default.

Debt is a double-edged form of power. Being able to borrow and spend huge sums is an absolutely fabulous way to expand corruption, bribes, exploitation of the powerless, bridges to nowhere and mindless over-consumption, but the habits formed by mindless expansion of debt to fund soaring wealth inequality don’t serve the indebted entities very well when default removes borrowing as a way to pay and play.

Living within one’s means–i.e. net income–is the only solution there has ever been to the end-game of over-indebtedness, i.e. default. Those with relatively secure, diversified net incomes (i.e. the Core) will do much better than those with unstable, limited income.

The destruction of phantom wealth via default has always been the only way to clear the financial system of unpayable debt burdens and extremes of rentier / wealth dominance. Let’s guess that a bare minimum of $100 trillion of the $300 trillion mountain of global debt will default far sooner than most expect. The only question is who will absorb the $100 trillion in losses. Choose wisely, as defaults of debt that are transferred to the public end up bringing down the entire system via political overthrow or currency collapse.

Full article.

See Also:

Understand the Times We are Currently Living Through

The United States and The Beast: A look at Revelation in Light of Current Events Since 2020

Exposing the Christian Zionism Cult

Insider Exposes Freemasonry as the World’s Oldest Secret Religion and the Luciferian Plans for The New World Order

Identifying the Luciferian Globalists Implementing the New World Order – Who are the “Jews”?

Who are the Children of Abraham?

The Brain Myth: Your Intellect and Thoughts Originate in Your Heart, Not Your Brain

Fact Check: “Christianity” and the Christian Religion is NOT Found in the Bible – The Person Jesus Christ Is

Young Man Living on the Streets Finds Jesus of the Bible – Overcomes Drug and “Terminally Online” Addictions

COVID “Vaccine” Injured Muslim Man Learns COVID was a Scam and Meets Jesus of the Bible as he Begins to Heal

How to Determine if you are a Disciple of Jesus Christ or Not