Is this what a European Collapse Will Look Like?

Different Euro notes
An assortment of dfferent Euro notes

This winter is going to be a tough one here in the U.S. as a recession kicks in, but it’s going to be a dreadful winter in Europe. I see a shortage of oil and natural gas leading to a shortage of heat, causing rising energy bills, which will create a recession, compounded by a loss of jobs as companies shut down, making it hard for people to survive in a high-inflation environment. Pubs, bars and restaurants will close because they cannot pay their electric bills, manufacturing will shut down because of the high cost of energy, and supply chains will collapse, making life even more difficult.

That’s a big mess indeed, but let’s throw in civil unrest, including strikes and work stoppages, large-scale protests in public areas, and the possibility of riots. While the government may subsidize electricity and home heating, they won’t be subsidizing food, and high costs of food and gas or diesel will just add fuel to the protest fire (pun intended).

You might think, so what? There are protest in Europe all the time. There’s some truth to that, but it is usually a small segment of the population protesting a single issue. This could see a broad cross section of the populace get involved because the problems are large enough to affect almost every resident.

Worse, protests might spread from country to country. If a protest in one country changes a policy, other countries might jump on the bandwagon, seeking similar relief where they live.

The ultimate question may be, what do the people fear more: being invaded by Russia and some future date or being cold and hungry now? Sadly, most people think only about immediate problems and ignore the future problems. You could say Europe ended up in this position by doing just that.

EU Problems

Many EU countries will have to deal with internal problems, but the potential for inter-EU problems also exists. Consider if Spain or Italy refuses to freeze their energy use. That will anger other countries where the populace is taking five-minute showers once per week. How will that be resolved? Will the EU stop shipping energy to the offending company, or will the EU fine or penalize them? Will countries that receive oil and gas keep it for themselves rather than send it down pipelines to other countries?

Internal EU problems don’t sound good, but there is also the possibility of war between Greece and Turkey. Greece is a member of the EU, but Turkey has not yet made the grade. Still, it is a major trading partner. Both countries are, however, members of NATO. A shooting war between these two countries could just add to the angst already caused by the Russian invasion of Ukraine.

Where will the Money Come From?

If governments subsidize electricity or natural gas, if they bail out more companies, that money has to come from somewhere. Normally, it would come bonds sold to the market, but chances are the EU’s central bank will end up buying them. That’s quantitative easing, which pumps more money into the market, which is inflationary. Thus, we see the spiral where inflation causes a problem, and countries act to mitigate the problem, thereby creating more inflation, restarting the cycle. When, or how, does it stop? When someone says “no” and refuses to do more QE. Such a move will cause an implosion, but that may be better than the system spinning out of control, reaching hyperinflation, and seeing the entire monetary system collapses.

Americans shouldn’t gloat. We’re not far behind. Our only saving grace is that more people are willing to buy U.S. debt than EU debt, at least for now. Don’t expect that to remain the case.

What to Watch For

I’ve often heard that when the United States sneezes, the world catches a cold. We may get to see if the reverse is true: When Europe catches a cold, will the U.S. sneeze? As a prepper, here are a few things to keep an eye out for:

Will the U.S. Send so much Aid to Europe that it Causes Problems here at Home?

I’d say the answer to this will be a clear yes. We are already sending so much military equipment to Ukraine that we may not have enough to fight a war ourselves. I expect we will send so much oil and liquid natural gas to Europe that we will see prices rise here. Our government might also provide food or other aid, causing shortages at home. There’s a long history of the U.S. providing food air. Ironically, many Russians ate American-made Spam during World War II.

I’m not here to tell you whether this is the right or wrong thing to do. Just make sure you are properly prepped if we end up with a self-inflected wound.

Will Governments Stop Supporting Sanctions Against Russia?

I think a few will. It may be small countries without many resources, or it could be a weak government that thinks doing so is the only way to stay in power. I expect the much-discussed price cap on Russian oil will fall through, and I expect every European country will continue to buy as much fossil fuel as they can from dubious sources. This will allow Russia to export oil and Europeans to pretend they aren’t buying it.

Will Governments Collapse?

We’ve seen multiple governments collapse, or at least leaders resign due to public pressure, up to and including riots. Of course, there are also cases where leaders weather these storms, at least until the next election. Nonetheless, it would not surprise me to see protests this winter result in a couple of leaders or governments losing the support of the people and resigning or losing a vote of confidence, resulting in a new election. Historically, there have been revolts and revolutions in Europe for centuries.

Look for Lessons

Just because things are worse in Europe doesn’t mean we won’t be joining them in the future. Pay attention to news from the EU, read the British and other international newspapers online, watch European TV, find a few YouTube channels and Twitter people who seem to have good info and follow them. Look for what happens before the fall. Look for signals you can use to determine when to bug out or when to batten down. There’s no guarantee things will happen exactly the same here, but imagine what you could do if you had a week’s warning before disaster struck.

There will be Differences

Of course, the EU is a collection of countries, not states. While we may all identify ourselves as Americans, they still identify by their individual countries; that going to cause some differences. Also, there are a range of cultural and legal differences, so keep that in mind. Don’t expect everything that happens there to be duplicated here.

A huge difference is that Europe has almost no guns in private hands while the U.S. has more guns than people. Violence in Europe will differ from here. Crime will be different as well. If people get shot at a riot in Europe, they will be shot by the police or military. Over here, it’s like to be rioter shooting at the police.

Pray for a Warm Winter

Europe had an extremely hot and dry summer. If the higher than normal temperatures last into the winter, it will reduce electricity demand and they could get through it easier. There could be other mitigating circumstances. For example, Russia and Ukraine could reach a peace agreement, and gas could flow again.

One year ago, no one would have predicted Europe would face this predicament. There’s nothing to say that we couldn’t see another sudden shift. That’s why we hope for the best, but prepare for the worst.