🚨 EUROPE IS DOOMED FOR THIS DECADE. And this is not based on one problem. It is a stack of problems hitting at the same time. Europe lost cheap Russian energy after 2022, which permanently raised its cost base. Industries that relied on low cost gas are now operating with structurally higher input costs, and some production has already started moving out. Now a second shock is hitting. The Middle East conflict and disruption around the Strait of Hormuz are pushing oil and gas prices higher again. Europe is a large energy importer, so it does not control pricing. Even without a full supply cutoff, it absorbs the price shock. Estimates suggest a sustained rise in oil prices could add 1.5%-2.5% to Europe's inflation. So energy costs are rising again on top of already elevated levels. At the same time, the economy is weak. Growth is expected to stay around 1%-1.2%, which is close to stagnation for a region of this size. High energy costs are directly reducing competitiveness, especially in manufacturing, chemicals, and heavy industry. Now look at the policy situation. The ECB is stuck. Inflation is not fully under control, and energy is pushing it higher again. At the same time, growth is weak. That creates a hard constraint: • Inflation is rising again • Growth is already weak • Policy cannot ease easily If rates stay high, growth slows further. If rates are cut too early, inflation risks increase again. There is no clean solution. But still, ECB is expected to move towards rate hikes which will make growth situation worse. At the same time, the euro is not gaining global importance. Its share of global reserves is still around 20% and has not increased meaningfully for years. That means external demand for the currency is not improving. So the system looks like this: • Higher energy costs locked in • New energy shock building • Weak growth • Tight monetary policy • Limited external demand for the currency And all this is hitting the economy at once. We all know how this ends.(Crypto Rover)