French Price Controls on Energy Sector Won’t Work

Energy prices are going up 300 – 500% with seemingly no end in sight, but there is an end in sight – we just don’t know when.

In response, the French government is putting up price controls and they’re going to fail and here’s why: When a company is unable to make profits or they’re being told what to do by a governmental agency, it 1) leads to lower profits, 2) hampers the company’s ability to innovate and grow, and then 3) becomes no fun.

The big decisions of whether a company lives or dies are made by just a few people and what people don’t understand is those people could just pack up and walk away and not lose a dime.

We’ve seen this with Boeing leaving Seattle. We’ve also seen this with Tesla leaving to Texas.

So pricing controls always fail because eventually companies end up deciding to leave.

Economies flourish when there is choice but when entities are hammered down by regulation and taxation, that’s when things go bad, but it’s not overnight.

As Ninja has said before, the collapse is going to start in Europe and come to the U.S. extremely fast.

The last country to try price controls was Venenzuela… or maybe Argentina and that turned out poorly.

This was just a brief overview of government controls and when countries lose control of their inflation rate so what is the next step: be prepared and get out of debt and then build real wealth and have purchasing power off to the side during a deflationary collapse.

economic ninja

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