After decades of removing the Berlin Wall, Germany is now facing another wall being erected but this time it divides itself from the most critical source which is gas and oil. The coincidence of all this is that Russia played a crucial part in the breaking of the Berlin Wall and today again it plays a crucial part.
Removing the Russian fuel supply will not only bring inflation problems but also bring doubts to the world’s fifth largest economy and third largest exporter of goods. There are already signs that are bringing a large scale of uncertainty as the winter approaches.
Though the manufacturing PMI contraction is still limited due to the old orders and some additional stockpiling by foreign buyers. The details of it reveal the large drop in new orders with higher pre-production inventories.
This trend is going to intensify as the winter approaches when a regular supply of gas becomes more uncertain. Corporations are already facing supply difficulties even after dropping the output by 15% or more.
To make the situation worse, from December 5th Germany and other European countries will stop buying oil from Russia making a switch from gas to oil even more difficult. This winter might bring Germany's glory as an industrial power into question with a return of the Dark Ages in Europe.
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