The EU’s New BFF?

Europe is facing a potentially fatal self-inflicted energy wound… The US is teetering on the brink of a deep recession… And the only one who seems oblivious to it all is the guy who started all the trouble, Vladimir Putin. 

It’s a cliff-hanger to rival any soap opera. But now how does it finally play out? 

Here’s one potential outcome that I can see — and frankly one of the few hopes of keeping our economy out of a sustained recession (or possibly worse). 

A (Possible) Happy Ending for Everyone

In the November midterm elections, the GOP sweeps everything. They claim 30 or 40 seats in the House of Representatives giving them a solid majority. Then, in an even bigger surprise, they shake up the Senate and claim a firm majority there as well. 

So far, not a stretch. Here’s where things would potentially get interesting.

This shift in political power basically makes President Biden a lame duck for the next two years — and possibly the rest of his political career. This shift in fortunes gives the President (and his party) one of two choices. 

He can do nothing but bicker and fight with the GOP-held Congress making the vast majority of America completely sick and tired of party politics — specifically the Democrats.

Or it forces President Biden back toward the center. (Assuming his handlers will let him move that way.) 

At this point he does a complete “Bill Clinton.” Facing the fact that, if he persists in driving energy prices higher by clinging to his green dream, the Dems will become the “party of inflation” and will suffer well past the 2024 elections, he shifts gears. 

He acknowledges the energy crisis the world is experiencing. And that the crisis is the result of Vlaidimir Putin. He calls for an immediate bipartisan change in course to both help our global neighbors and punish Putin. 

He starts working with Republicans in Congress to launch a new “emergency energy” message. One that says we’re going to support “clean” natural gas during the transition to our green utopia.  He begins working with Republicans in Congress (a la Bill Clinton after his midterm defeat) to build up our natural gas infrastructure — expanding our export terminals. 

Now if you’re thinking, the gas industry would never do this without regulatory assurances from the government as well as long-term purchase commitments… you’re right.

So in order to accomplish this build out on our end, Biden and the EU strike a “long-term” deal for them to buy gas from the US while we both pursue our “green new dreams” together. 

If this scenario were to play out, it would be extremely beneficial for the US economy. Increased production would add new jobs and grow our GDP. We could quickly become the world’s leading exporter of natural gas. It would definitely alienate Putin. 

But maybe more important than all that, it would also bolster our currency which has been so threatened since Biden’s fallout with the Saudi family. 

A Word of Warning

One final caveat should this scenario play out…

If the government does cozy up to the fossil fuel industry in the face of this crisis, you’ve got 6 months tops to get out of all your energy stocks. 

Right now, the more Biden demonizes the fossil fuel industry and its CEOs, the richer he makes them. They’re less incentivized to drill, which means less production/supply which means higher prices. And they’ve got reserves they can cash in on for 40 years…

But as soon as getting back into production looks profitable and they start drilling (and that reality itself could take a couple years) energy prices will start to come down…

Make the trend your friend,

Bob Byrne
Editor, Streetlight Daily