Germany’s Volkswagen Suffers a $1Billion Loss! Geopolitical Trends

Hello everybody and welcome to Geopolitical Trends, where truth matters. Excited to be with you as always. Uh, today I'm going to be talking to you about Germany, and again, this is not about just economics but also about geopolitics, also because what's going on in Germany tends usually to impact the geopolitical trajectory in the Eurozone. So, and there are some, a lot of details you need to know, the big losses of some major corporations, especially in the automotive industry. And I'm going to be providing you some comparisons also to some other, uh, uh, uh, companies from outside Europe and why, uh, why it matters for us to understand this development. So first, let me say hi to our wonderful community. Let me get my reading glasses here. See who is here. And, uh, so Soccer 088, good to see you. Uh, uh, Leanne, good to see you. William, Catherine from Germany, good to see you here. So I'll be talking about your country today. No, uh, Zan, good to see you. John Dutchman, good to see you as always. Uh, who else is here? Casey Wong. And I saw I saw Francis Tango here. No, he's not. Matt Becky. No, Francis Tango is here. Good to see you, uh, Matt Becky. Good to see you, Momo. Good to see— oh my gosh, Momo, this is a buddy of mine, guys. It's, uh, some of you are not gonna know. So good to see you here. So, uh, and, and Chang Chang Tong, good to see you as always. So, all right, let's get into our, uh— before I'll do this, I have some housekeeping, uh, matters I need to address. You. Uh, for my upcoming interviews, uh, be on a lookout on, on the 7th for my conversation with Jayant Bhandari. Just reached out to him, and, uh, so hey, we confirmed the time, uh, the date and the time. So it will be at about 1900 hours on Friday. So I look forward to that conversation with Jayant. There's a lot to cover regarding India, and this has nothing to do just with the naval drill, the drills they are conducting right now in the Arabian Sea, but some other matters also. Also be on a lookout in the next week, I believe, with— for my upcoming, uh, conversation. Has not been confirmed yet, but I've already initiated the conversation regarding this with Dr. Yan Lian. I look forward to having her back on the channel to be talking about the— especially on the, uh, economic and the global, uh, aspects of it. So I look forward to that conversation. So All right, let's do some, uh, by the way, I didn't forget to be, uh, doing a video for you regarding the leaked, uh, documents pertaining to the American operations vis-à-vis Maduro. I got some sort of a confirmation on this. I'm gonna be sharing it with you in the next few days. I am also going to do my analysis for you about West Asia or the Middle East. And the changes that's taking place, given that Zulani of Syria is in White House as we speak. So I'm going to do one headlines here for you, and I'm jump into the conversation. Now, the picture you're looking at, it's from India. There's been a reported here in Washington that India, Indian government of Modi's government, deprives millions of voters of their right to vote. And the report was published right here in Washington by the Foreign Policy, uh, uh, uh, uh, Institute, which stated, and I quote here, that India is witnessing widespread controversy after reports revealed that the government of Modi had removed the names of about 6.8 million voters from the electoral roll in the state of Bihar, which is in the eastern part of India, as part of what was called the Special Intensive Review, which is launched by the Indian Election Commission, which is in cahoots with the Modi government. So one thing that came up to the, uh, in the report during the investigation, which I will be discussing with the Jayant Bahndari is that the report— for example, one individual by the name of Clarence Topo, he was about 38 years old, was shocked to find out that his mother, who is about 74 years old, was listed as deceased in an official record despite being alive. It shows you how much Modi's government want to sort of suppress the right of other minorities for them to vote. So the question becomes, where is this democracy in India that everybody cries about? So, but we'll be talking with Jayant about this as I move forward regarding this particular topic. So, so let's get into our conversation about now what's going on in Germany. The Chancellor Merz is as shocked as he can be because he's realizing that the policies he is following, uh, uh, because in the footsteps of his predecessor Olaf Scholz, and now yield in some really bad, bad economic results for the German economy and the German citizens at large. So, so what I'm going to be focusing on, just to give you an idea of the layout how I'm going to do this live stream, I'll provide the, the first part of the analysis I'll do geography and history because I promised you in my last video about the, uh, cancellation of the German foreign minister to China. I did the history of China, but I promised you that I will do, uh, the, uh, the history of Germany when an opportunity presents itself, and here we are. Then I'll conclude, uh, with the second part of the conversation in which I address the really key reasons for why the German economy is going down and how that's going to have now geopolitical implications for the eurozone moving forward. So, and, and, and I'll provide some solutions as to what the Germans can do, but again, it's their country, they can decide whatever, uh, decide to do. But I will share with you this sort of the sort of 2 or 3 possible scenarios that I see for the future of Germany moving forward. Suffice it to say that we're going to focus now on the idea of the automotive industry, especially with— I have a picture here. This is, this is a, a car lot for Volkswagen. As you know, Volkswagen is the, uh, uh, mother company for Porsche, and we're going to be talking about Porsche as well, uh, to put it in perspective for you. So the German automotive giant Volkswagen now, some sort of, uh, declared and has suffered significant loss in the third quarter of this year, 2025. And this one, uh, uh, some have contributed the significant loss to the problems with its other entity that, uh, that produces Porsche. So, and the question— the, the focus on this live stream is not about talking about Porsche or Volkswagen, it's talking about the bigger picture. And the bigger picture is understanding the types of policies Germany has embarked on that led it to where it is today. So, so Germany, or the Volkswagen headquarters, has announced that its net losses for the period from July to September of this year amount to about 1.1— almost €1 billion, the equivalency of $1.24 billion US dollars. That's a loss. And this comes after, after sort of achieving a surplus in last year for about €1.6 billion. It tells you just within a, a time span of, of 8, 9, 10 months, you go from surplus to a deficit. So, so during the first 9 months of the year, the surplus fell more than 60%, and I have the number here for you, and I'm gonna share the link with you so you can read it later on if you decide to. So the 60% fall from €8.8 to €3.4 billion. So And this was disclosed by the chief financial officer of Volkswagen. His name is Arnold Atlanz. So, and this basically, they, uh, attributed to the charges of the €7.5 billion, mainly resulting from higher customs duties and adjustments to Porsches. Suffice it to say, and again, I am not going to focus too much on this because there are much bigger issues we need to focus on, on this, that I need you to understand. And the idea that the company is saying, oh, despite the losses, we still can manage the financial and sales revenue, which is true to a degree. So, uh, given that the problems now lies with its the, the Porsche losses. This is again where the problems is coming to, uh, uh, the Volkswagen, uh, uh, company. So, so Porsche announces heavy losses to this third quarter due to the billions of euro in cost resulting from the recent strategic shift. And what is the shift? Is to extend production of combustion engines. This is what they're trying to do. And this, of course, when they embark on this one, has resulted in a loss of nearly €1 billion in the third quarter. So, and you will understand why this happens as they're trying to sort of extend the production of combustion engines. So, and here is what happened for the 9 months of this year, the first 9 months. So the after-the-tax in the first 9 months, which fell by about 96%, and this results in turn were reflected in the percent, uh, in the parent company Volkswagen. So it's like when you have a problem in one part of a company, it's gonna impact the mothership moving forward, and that's usually how it works in the economy. So, so I'm gonna do, uh, geography and I'm gonna do history then I'll continue my, uh, let me share the screen with you here. Okay, let's do this one right there. We'll do geography, then I'll do history and move on into the second part of the analysis. Where is Germany? Of course, majority we know, but again, you don't assume that everybody knows. It is located in Central Europe. It's the heart of Europe. It is positioned in both in the northern and the eastern hemisphere of the Earth. Germany is bordered by about 9 countries. I don't know if you can see this one here, but, uh, yeah, I have to— I actually, I have another map, but it doesn't show the countries close by. But in any event, let's stay with this one here for now. Uh, 9 countries are Denmark,, in the north, Poland and the Czech Republic in the east, Austria in the southeast, Switzerland in the southwest, France, Luxembourg, and Belgium in the west, and of course Netherlands in the northwest. And Germany is bound by the North Sea in the northwest and by the Baltic Sea in the northeast. Very, very interesting, uh, geography of, uh, of Germany. And that's why they always refer to it as the engine of Europe, economic. There is, uh, regarding— those are the major cities, uh, in, in, in Germany. Uh, there is another— yeah, Cologne is right here, Düsseldorf, Hamburg in the north. This I remember because when I used to travel to Scandinavians, you go cross Hamburg and Kiel. There is a city by the name Kiel, it's K-I-E-L. It's known for windsurfing, for those who like windsurfing, so you'll understand, uh, that's what it's known for. So now when we think about Germany's history, and again I'm gonna be brief into this, I'm gonna just divide it into 3 phases: the early history, the unification after World Wars, and of course the post- World War II. So when you think about Germany, of course, history spans from the settlements of the Germanic tribes— that's how far back it goes— which was later formed, uh, sort of the basis of the Roman Empire. This is where you need to understand where the roots of the Roman Empire came from, and this goes all the way back to 962. And specifically from that time all the way to modern nation-state establishment in 1871. So you need to understand this Germanic, uh, tribes that formed the Roman Empire in 1962 and all the way to the modern nation-state establishments in 1871. So So Germany's history is marked by major events. You think, for example, the first one that has to come to you is of a religious dimension to it, and this has to do with the Protestant Reformation. To those who are religious enough, you'll understand what I'm talking about. And this goes back to the 16th century. Then after that was the dissolution of the— dissolution, rather, of the Roman Empire, which happened in 1806. And that led after that one to the unification of the German Empire. Yes, it was at the time, which, which was under Prussia in 1871. This is why you have to understand the intertwined history between the Soviet Union back then, or the Russian Empire and the German Empire, to those who know the history of this. So, and of course, after the aftermath of two world wars leading to the division and eventual, or, you know, Eastern and Western Germany as it used to be known, then it led to a reunification of Germany in the early '90s, especially after the fall of the Soviet Union. But it was in 1990, that's where it happened. So, so when we think about the early history, uh, uh, and the Roman Empire. And this is where this ancient and of course early medieval period known in the German history. So this, like I mentioned earlier, the Germanic tribes inhabited the region, and those the ones that interacted, uh, uh, uh, with the locals and eventually dominated areas once occupied by the Roman Empire. So this is what you need. Uh, uh, Charlemagne, it was called at that time, the Charlemagne Empire, uh, united the area, which later split into— with eastern part becoming the basis for, uh, a distinct German realm. So to those who watch the, uh, the— if you watch the movie Gladiator, at the beginning it was the Emperor Marcus Aurelius where they were fighting the Germanic tribes. That was part during this time. So, and that's what marks usually here, uh, the start of a country's long empire that was a loose confederation of states. It wasn't like, like, like a cohesive entity. No, it was some sort of a loose confederation of states centered in Germany. So, and that After this came the Reformation in the 16th century, which saw the Protestant Reformation initiated by none other than Martin Luther. This is where the Lutheran Church comes in. It traces back its root to this one here, leading to religious conflict and to the eventual establishment of religious freedom within the empire by the Peace of Westphalia. That's what's important to understand. Uh, after this came the unification of, uh, the unification of Germany, and of course the World Wars, both of them. So you have the rise of Prussia, and this after the Roman Empire was dismantled. Who dismantled the Roman Empire, by the way? Does anybody know? See if you can type it in the chat box. To those who know a little bit of history, you know Who defeated or dismantled the Roman Empire? Let me just see if you happen to know. Uh, I don't know, it's not showing up here on the chat box. Oh, oh, Taiwan Steel, you got it, you got it! It was by Napoleon. It was by Napoleon indeed. That's what happened back then. So, and it happened in 1806. To be exact. And this is where you have the German Confederation was formed in 1815. So when you think about the history of Germany, of course, the, the, the, uh, the, uh, the, uh, the first phase of its existence, which was the early history, but from the 1815 forward, that's when you know you start talking about Germany that we know today. So however, significant power uh, sort of was consolidated under Prussia at that time. So, and this is where the German Empire, under the leadership of the chancellor, none other than Otto Bismarck— full name is Otto von Bismarck— to those again who read history or studied history, you should know this name, should be familiar to you. And Prussia defeated Austria and France at that time. And that led to the unification of the German states and the establishment of the German Empire in 1871. That is the key date that you need to keep in mind. So of course, World War I come in, and this is where you have the Weimar Republic. Weimar spelled W-E-I-M-A-R. That's very, very played a role into the history of Germany. So the empire collapsed, of course, after its defeat in World War I, and that led to the establishment of the Weimar Republic in 1919. So, and of course, you all know what happened in World War II with the arrival of Nazi Germany, and the republic gave way to the, uh, rule of Adolf Hitler at that time and the Nazi Party in 1933. Resulting in World War II and of course the Holocaust. You know, here's what surprised me the most, is that given what Israel is doing in Gaza, has been doing in Gaza, you will think they learned from history and what they suffered before. Makes you wonder. So then we move into the post-war, uh, uh, World War II era, which is modern day. That's the division existed. So after Germany's defeat in 1945, The country was, of course, uh, uh, uh, uh, occupied and, uh, uh, by the Allied Forces, or powers if you want to use the term. And what they end up doing, they split them into two separate states. You have the Democratic Federal Republic of Germany, or also West Germany, and you have the Communist, uh, German Democratic Republic, or East Germany at that time. And of course, the reunification happened, uh, of course, when the Berlin Wall fell. But the Berlin Wall itself was constructed in— does anybody know what year the Berlin Wall was constructed? Just, just once again, it's just we are learning here from history. Uh, do you know the year exactly, uh, when, uh, uh, the Berlin Wall was constructed? Uh, oh, you got it, Igor, you got it. 1961. You know, Igor got it right there. 1961, indeed, that's when it was built. So, and what's the reason for that? Was to prevent migration from east to the west. And of course, it fell in 1989. Paving the way for the reunification of Germany on October 3rd, 1990. So, and of course, the rest is history, as we say. You have the— I remember, uh, uh, when Helmut Kohl came to, uh, uh, as a chancellor. It was Helmut Schmidt, Helmut Kohl, uh, then of course Angela Merkel, then you have Olaf Scholz, and now you have Merz. So This is exactly what the— and that's where I end the history of Germany, because as I said, I'm going to keep it brief and short because I need to cover a lot into the analysis. Liking this video so far? Don't just be a watcher, go ahead and hit the like, share, and subscribe button, and don't forget to tap the bell so you will not miss any of my videos or live streams. This way you will be supporting a channel that stands for the truth and objective reporting. The choice is yours. Thanks for your support. Indeed, thank you for your support, and please, please make sure to subscribe if this is your first time here. So, so let me— over the bat right there to start— the, the problems in Germany are severe. They are genuinely severe economically speaking, which now spilling over into the political realm. And when I say political realm, I'm not referring just to the domestic, uh, politics of Germany. I'm talking about the geopolitical landscape in the Eurozone. So Germany itself right now is experiencing— and I did, I did about 3 or 4 videos, I talked about this way back— Germany is experiencing its longest period of economic stagnation in the last 7 decades. And this is why this, this stagnation, it is expected to continue this year because we still have a few more months till the end of the year. So, and this is exactly what was reported by financial institutions that monitored or track the, the financial developments of countries the likes of Germany. So, so Germany has contracted for two— its economy, that is— contracted for two consecutive, uh, years. So you're looking at 0.9% in 2023, and you're looking at a 0.5% in 2024, which means what? To those who understand the economics on the basics, you know that when a country contracts— its economy contracted 2 years in a row— that means it is in recession. And this is what you do not read. And I'm sure I have viewers from Germany here, and please share, Catherine, especially Catherine, please share with the community if you read in the German media where they disclose the truth about Germany being in recession. So, and that's again, when you think about now what the German businesses are bracing for, you know what they're bracing for? They're bracing for the third consecutive year, uh, of crisis in this year, 2025, with about 60% of companies in Germany citing economic policy framework conditions as their greatest business risk. In a simple language, they have no ways of investing, of growing business. Energy is so costly, the financial constraints, the US tariffs, all this. Of course, the Chinese EVs, which I will talk about in, in a second here, all this contributing now to a risk. And when you think about this, you think about the key structural issues that driving the crisis inside Germany. So of course the German, uh, Chancellor's office wouldn't want to disclose this. It's like what we have here in the United States. Is Donald Trump coming forward and saying, you know what, Americans, some of them are going hungry? Why? It's because the policies I embarked on and they're backfiring big time.. And now we have this deadlock in Congress. Now for the third month is the longest shutdown in history. It's end up impacting Average Joe, Average Jane right here in the United States that some of them are going to bed hungry. But the media is not going to disclose this. It's the same argument is made in Germany. So when you think about these key structural issues, you know, you think about, for example, Germany's, uh, German manufacturing sector. And that one has been hit so hard. Why? By trade uncertainty with the United States. Don't be surprised, because we wanted this. I don't know if you recall, and I did talk about this about 2 years ago, when the United States, under Biden at that time, threatened to sanction the Germany if they go ahead with Nord Stream 2 pipeline that brings in gas from Russia, which was so cheap and it was fueling the German economy and impacting in a good way the entire Europe. We threatened Germany, and at that time I was like, wait a minute, are we threatening an ally just because they want to improve their economy? Now you know why. And this is exactly where the challenges of the structural issues within the German South. Then you think about— and by the way, when you think about this trade uncertainty with the US still high, you also have to think about the energy prices. Germany now is paying 5, 6, 7 times the price of what it used to pay getting gas from, uh, from Germany— from, uh, from Russia, I'm sorry. So, and we wanted now to sell them gas from Americans, from the US, at 10 times the price. This is why 2 days ago the head of Qatar Energy, he issued a statement to the Europeans. He said, forget about us giving you gas if we don't have an agreement and a time frame. Basically, what Qatar is saying to the European Union and Germany, for that matter, is that if you don't sign a long-term agreement with us, I ain't giving you any gas. This is why China, if you recall, a year and a half ago went ahead and signed a 25-year delivery of gas from Qatar to China. So, so when you consider the high energy prices, you consider the growing competition from China's, uh, automotive industry— why? Is because China's dominance in electric vehicle, uh, sort of, and manufacturing is eroding the global market share of the German automotive giants, the likes of Mercedes, the likes of BMWs, Volkswagen, and so forth. And I mentioned to you last time when I was in China, I hardly ever seen any German vehicle on the street. All I saw were, uh, America— uh, China, I'm sorry, Chinese electric vehicle cars, the BYDs and the like. So, and this is again where you're seeing, uh, uh, uh, and there is another element to all this, is the high cost. The high production cost inside Germany. I looked at some stats. It cost about between €62 to €75 an hour in Germany for production versus— I mean, it's not going to cost that much even here in the US. We don't have that. We have it at about, I think, between €29 to €36 an an hour. Germany, €65 to €70, between €65, €70 an hour. So, and this is where you think about the manufacturing has now been hampered by a weak global demand. And of course, when you have weak demand, you have the rising in cost dampening investments. And of course, the political uncertainty inside Germany, because Germany is still sending money to Ukraine, still sending weapons to Israel, and all this at the expense of their own economy. So, and this is why when you think about the, the, even the Federation of German Industries, they just released its forecast, and here is what they're saying. You're looking at, for, it's forecasting now for 2025, the end of the year, about 0.1% contraction in addition to what already is. And this in itself will mark the longest downturn for— since German reunification nearly 35 years ago. And I do have the link that I'm going to share with you, uh, in the chat box so you can read it for yourself and, and reach your own conclusion. I share the facts with you, but you reach your own conclusion for that. So of course the forecast, financial one that is, or economic one that is, varies, but there is also some predictability and probability that exists within all this. So of course we're not going to go as far as using the term total collapse because there is not. So let's just, let's just be straightforward about this. However, The core problem is that Germany faces long-term structural challenges. And all this, in addition to energy cost, in addition to bureaucracy, in addition to following the US blindly, politically speaking, in addition to allocating some of its resources to Ukraine for already a lost cause and a lost war and a corrupted government inside Ukraine. And all this is contributing to the burden on the German citizens who is now paying high cost in energy, the food, and so forth. It's almost the same of what we have here in the United States. And this is where you think about the declining of the industrial competitiveness of Germany. There is also another issue, and it has to do with its own demographics. German society is aging, so and some other European countries as well. And this is where you have this big, big problem. But the big problem couldn't be more evident in the automotive industry because the scale— and again, the scale of losses in the German automotive sector is staggering. You know, I had to spend a few hours digging for this information, and I provide you the links for all of them. Uh, when we're done with all this, I'll put it in the, uh, description for you. It's just because they are not disclosing the truth. When I say they, I'm referring to the mainstream media. So, so I'm gonna share some stats with you. Job losses, unemployment crisis inside Germany. And once again, to those who are in Germany and watching this video, please share with the community if what I'm stating with you is accurate or not. The German automotive and supplier industry lost about 19,000 jobs in 2024, and that in itself reduced, uh, employment to about 761,000 people, the lowest figure since 2013. And I'm going to share the link with you where you can go and read this for yourself. So I'm putting them in the chat box as I go along here. So Volkswagen in itself has agreed to reduce the workforce, uh, but about 35,000 jobs by 2030. I mean, we are already in almost 2026. You're looking at 4 years. They're cutting jobs by 35,000 jobs by 2030. So, so which means what? More than 1 in 4 possessions. And beyond the major manufacturer, numerous smaller suppliers are reporting insolvency on a weekly basis. In a simple language, they go bankrupt. And you look at— and I have, I found one company, uh, that is filed for this insolvency, of bankruptcy, that is, you know, it's called the long-established seat manufacturer Recaro. Recaro collapsing. So, and I have the link for it that you can go and check it out. You'll see when you open the article, it's the picture of the former Chancellor Olaf Scholz who was promising an increase in its profitability, and it's not the case. So when you think about all this, you think the long-term trajectory. The long-term trajectory is not— doesn't look good. You know, I'm usually an optimistic person, but I can't sugarcoat it. It looks bad for Germany moving forward. It's even more concerning according to some analysts, you know, because if the current trends continue, employment in Germany's automotive industry is projected to be about 180— 186,000 people lower in '25 than it was, let's say, in 2020. And with this, you have to add another 46,000 jobs already lost between '20 and '23, and around 140,000 more expected through 2035. And I'll provide you the link for this one from a financial institution that tracks these sorts of, uh, uh, financial, uh, uh, records. So all this leads us to talk about the profit being collapsing, and I feel comfortable using the term collapsing here. I want to use it for the entire German economy, but, but I will use it for the profit, especially for the automotive industry. So major manufacturing now experiencing significant profit drops, and that started, by the way, in 2024. You have Mercedes, you have— I do know for a fact that Mercedes lost about— I'm sorry, not lost, its profit in the Chinese market dropped by about 25%. I know this for a fact. Because when I read it, it was prior to my trip to China, and I asked— 25%. So this is why you have Volkswagen and Mercedes reported decline of up to 40%. Even Audi, it fell by about 14.4%. BMW dropped by about 26%, and Porsche slumped by about 40%. And this was reported by the financial analyst within Goldman Sachs. So, and I'm going to put the link for you in the chat box. And you may ask yourself, why is this important? It is important to understand where the trend is headed. So like I mentioned before, uh, when you think about the structural challenges that now facing Germany, because the cost— German automotive labor cost, as I mentioned, uh, uh, it's between 60 and about 62, somewhere around, give or take, per hour, which is the highest in the world. So even exceeding France. France is about, uh, I think 45 or 46 euros an hour. Uh, in Italy it's about 30 or 32, uh, uh, an hour, to my knowledge, euros.. And Spain is about, I think, €27 or €28 an hour. So this is why you're looking at a major problem. And then comes the major competition that's coming from the Chinese EV manufacturers. Well, why is this? It's because the Chinese EV manufacturers are rapidly closing the gap and gaining ground. Think about BYD. Is it— and, and you know, my last trip when I was in Morocco, I was walking in Rabat and I saw BYD. I remember I took a picture of it. I don't know, right there in my head I was like, what the heck, a BYD doing right here in Rabat? People are already thinking affordability. So BYD experienced about— get this, guys— 252% sales growth in Europe, 252% increase, sales increase. So while at the same time Tesla registration in Germany fell by about 55% as of July 2025. You all remember when Elon Musk was laughing at BYD the first time? I remember that because I shared it with you in one of the videos that I did 2 years ago, and I said, we shall see. And he was laughing, I was like, well, BYD is not gonna be nowhere. And here we are. It was arrogance of even Elon Musk to think in this term. It doesn't matter whether your product is at the top, you don't belittle others because others gonna be determined to succeed as well. And look where they are right now, BYD, that is. So what's contributing to this problem also in Germany, besides the Chinese EV manufacturing, uh, competition, is the electricity prices for German companies are up to 3 or 4 times higher than the United States or China. So, and 82% of German automotive companies are now postponing or relocating or even canceling planned investments in Germany. So, and all this, you don't blame the Chinese, you don't blame the Americans, you don't blame— you blame yourself for allowing yourself to first of all follow the US policies blindly. And second, you cut off your own economy by cutting off gas from Russia, which was cheaper, allowing you to manufacture more. So don't blame others. And this is fundamentally a crisis of competition, competitiveness now for Germany, because Germans high— have high cost, they have intense now Chinese competition, you have a weak global demand, and you have a massive investments required for the EV transition inside Germany if they want to compete. And all this are crashing the industry traditional business model. So, and all this leads us to talk about the Eurozone, because why? The stakes are high. German was known always as the heart of the Europe economy back then. Not anymore, because the hard truth Once again, the media is not disclosing the truth. Germany is no longer Europe's economic engine. Why? Because its economy is stuttering. Let's think of it like a machine that is stuttering. So what happens in Berlin, what happens in Berlin now tends to reverberate across the eurozone, the entire eurozone. And that in itself will shape the European geopolitics for decades to come. This is what I'm saying. You look at about the trajectory of the geopolitical, uh, uh, path, but you also have to look at the financial and economic energy infrastructure and so forth, financial structure and so forth. All this will contribute to that geopolitical trajectory where things is going to be. You know, what's happening in Germany now, it's not just Germany, you're talking about the Eurozone. So Germany, that built the European Union through economic strength, now faces some sort of a fundamental question. Any geopolitical analyst will have to ask this fundamental question. So, can it reform itself? Will it be able to reform itself? Or will it just fade into structural decline, which means the beginning of the end? I have the alarm system outside. I think they testing this for something. So, because here is the hard truth, because if Germany falters, what does that mean for the entire European project or Eurozone, whatever term you want to use. So of course they are just saying, oh, this is nothing. So, uh, the, the current recession is a normal business cycle. No, no, no, no, no, you are softening the blow. It's not a normal business. The normal business will be cycle is when you have less profit, for example. Why? Because you either didn't do marketing, you didn't improve the quality of the products, you didn't do this or that. But to say this is like, oh, it's a normal business cycle— no, it's not. It's not. The reality says otherwise. Because German automotive industry now, especially since we are talking about, uh, uh, uh, we're talking about the, uh, Volkswagen here. The Germany's automotive industry now is losing a war that it did not expect to fight. Well, you didn't expect to fight because you didn't plan for that. You assumed that the Chinese electric vehicles ain't gonna be up to standards. Big mistake. You assumed that the US is going to stand by your side and support you. Big mistake. So, because you think about it, I mean, the facts still speak for themselves. For centuries, you know, German engineering and manufacturing prowess really defined the German automotive industry. Now you have the Chinese competitors, you have the ones led by BYD, which are outpacing German companies in electric vehicle production are fraction of the cost. This is once again why the US is putting this 100% tariffs on the BYD cars in US. You know, you know, I did the math when I was in China. Hypothetically, if I would have purchased a vehicle in China and bring it over here, the guy, the manager over there told me You know, Mr. David, you don't need to do that, you know, because here are the numbers. We cross the numbers and it turns out to be twice or three times the price. Why? Because the US doesn't want to see cheap vehicles here in the US market. That is part of the problem. Labor costs in Germany, like I mentioned, that's the highest. So, and this matters especially for Germany. Why it matters? Because automotive sector represents roughly about 5% of the German GDP. So, and employs over 750,000 people directly, with other hundreds of thousands of people more in the supply chain. So, so this cascade of job losses, uh, suppliers' insolvency or bankruptcies You know, oh, and declining tax revenues creates deflationary feedback loop that will suppress demand across the entire economy for years to come. And yet the German government still advocating for sending more money to Ukraine. It's just mind-boggling, you know, mind-boggling. So I'm gonna share a link with you, uh, for— I'm not gonna play it because it's a video from another entity, and, and you know, YouTube is very, very, uh, I don't know, they tend to take down whatever. If so, what I'm gonna do, I'll share the link of the video, but I'm gonna share something with you. What the video is all about— the video shows A Chinese EV vehicle reaching 345 kilometers an hour, or 213, 214 miles per hour, on the long straight, just shy of its claimed top speed of 350 kilometers, or 218 miles per hour. And this vehicle is powering that performance. And you know what's powering this performance in this Chinese vehicle? By the way, I have the picture for it because you need to see it right there. This is a BYD. It defies Porsche. Even I found out it defies, uh, Bugatti. Here's another one. This is the one you're gonna see the video of, okay? And the reason why it's powering that performance is a tri-motor setup delivering a combined of 1,527 horsepower. And about 1306 lb-ft of torque. That's enough to send the vehicle you are looking at— it's called the Xiaomi SU7 Ultra— from 0 to 100 km/h in just 1.89 seconds. So let me put the link for you and you can look it up later on yourself. And all you need to do, put this within the context of what is going on. Then you have the issue of energy, like I mentioned. So as I said, those vehicles now, this one here and this one here, this is BYD one, this one challenges, uh, Porsche. In, in the nota. This one, he now challenges Porsha and challenges one type, Shivram, uh, Bugari Shivram, to my— based on the article that I read. And I have the article that I'm going to share with you. You can read it later on if you decide to do so. All this is, is, is, is worth knowing But again, you have to think about energy as a competitive disadvantage in the case of Germany, as Germany's decision to rapidly phase out, uh, first of all, its nuclear power plant, and while transitioning to so-called renewable, was made when energy was cheap. So when you think about the assumption for that has evaporated completely. So you think about electricity prices, and again, for my German viewers, you know what I'm referring to for the high prices of, of electricity. Electricity prices for German companies are up to 3 times higher than what it was or what it is in the US and China. So those are certain serious problems. You have also the problem of the, the financial sector. Germany cannot use fiscal stimulus to invest in infrastructure, in education or research at the same scale necessary to compete with the Chinese or the Americans for that matter. So of course, as you know, our presence on the German territory with a massive military presence, we are contributing part to their defense. Spending. So, and I'm having a hard time accepting that reality, why my tax dollars are going to support a country's military defense while they are using their own money for whatever else, assuming they're using it for the right reasons. So, and this is again, when you think about the, the grand coalition now in power with MERS, cannot change this without two-thirds in a parliament majority. So something it does not have, unlikely cannot achieve. And this where you see the political fragmentation that is really— it's not just the Germany, but it's, it's, it's sort of expelling into a European market. So the way I see this There's only 3 outcomes, at least 2 or 3, me thinking outside the box, or possible scenarios if I'm gonna use the term. The first scenario that I see, which is, uh, if you think about it, muddling through, meaning just have to go through it, most likely scenario. In this scenario, Germany will most likely continue on its current trajectory of modest stagnation, around 1% on an annual growth. That in itself, the automotive industry, which shrinks but does not collapse entirely. Employment gradually decline, and the Grand Coalition passes minor reforms but fails to address the structural problems inside. The problem with this is that you have a public frustration grows but somehow remains below the level of demonstrations. The, this scenario is also politically sustainable for now. We shall see. Scenario 2 is you're looking at a reform and renewals. Germany will ever embark on. But this scenario is difficult. Is it possible? Yes, it is. But it's very difficult for a simple reason. Germany has two main problems. One is the high cost of energy, and second is being shackled by the US pressure. If it frees itself, frees itself of this, possibly. Because the current government of Merz recognizes the urgency of what's going on. But recognizing without having policies, without having strategy to deal with it, is going to leave you nowhere, because this path will require political courage, which none of the, the current or the president chancellor have. Angela Merkel was— at least had the political courage to say to the Americans no to their faces. Those two knuckleheads can't. So, and this is where you have the Germans' recent chancellor bowing to American pressures. And that's why I'm saying this scenario of reform is difficult. Just don't see that. So, because hypothetically, should this work, in this case Germany will be able to manage this transition, which could stabilize in about probably 3, 4, even 5 years. So basically by 2030 it could be stabilized. It will be stabilized with more efficient, innovative economy. Will it be profitable? I don't think so. That's just my opinion. Then you have third scenario. This is where you see the rupture of the economy, which leads to the rupture into the political, uh, uh, uh, landscape. Economic stagnations, if it persists while the political fragmentation deepens, that's very problematic. Because what you have, you have the AfD, which is the far-right group, uh, party in Germany, is rising. The same thing that is going on right now in Netherlands. Netherlands, you have the centrist, they are moving the power. Look at just what happened for us here in New York City with Mamdani being elected the mayor, with Virginia voting for the first female governor. All this should send you— with France, look what's going on in France. So, so with this happened, support for the EU and the euro will weaken because part of the problem in Germany started when they decided to do the euro. And who pushed for the euro? It was us. We, we didn't want to see, we didn't want to see We didn't want to see a strong Dutch mark. We didn't want to see strong French franc. We didn't want to see whatever. So what we decided, we pushed for the euro. I remember, I remember when way back in the day when I traveled to Germany, I went from France to Germany, I had to convert a French franc from, from, from France to, to the German mark, Dutch mark. Not anymore. And we did it for a reason. This is why you have countries like Poland— even Poland is part of the EU, it is not tied to it financially for this reason. This is why they have the UK kept its own pound. But the rest of them, it's, it's— this is why they are weakened. And when you see this regional disparities between prosperous Southern and stagnant Northern German grow. When you look at the map— that's the reason why I did the map, now I know why— the difference between these two in Munich, or München, as you mentioned, this is where you have the headquarters for Mercedes, is prosperous, but the northern part of Germany is not. If you are moving with this scenario That's why I said, I'm saying you're looking at a disparity, regional disparity between prosperous southern and stagnant northern Germany will grow even further. Then you have the far-right parties eventually enter the government and that in itself will impact the EU and impact NATO because we don't want those changes to happen. We want to maintain the status quo. So, and that's going to have to push Germans to ask one question: is it time to leave the EU altogether? Can they? So, because one reality we need to know, a withdrawal from the European integration or the Eurozone will fracture under the strain of the persistent German weakness economically and politically speaking. And that's, in my opinion, it's a dark scenario, but I'm not ruling that out. I'm not ruling that out. So because you have to think about the consequences for what lies ahead. So because German's economic and political fate is Eurozone's economic and a political fate. So when you have your engine, economic engine, failing— in this case Germany, because Germany represents about 25% of Eurozone GDP— which is, you know, stagnating economy will mean a stagnating Eurozone. So, and that is where you have now the Central European Bank or the ECB faces now persistent, uh, uh, deflation pressures. So that's why they're not doing anything right now. So then you think about, uh, the, the Franco-German axis, which will be weakened anyway. So because for 75 years, yeah, the Franco-German partnership had been the foundation of the European integration. It's a fact. So, and Germany, of course, dominated that economic because of its weight, economically speaking. On the other hand, France provided the political so-called vision, if we call it the vision. So, so both of them supported this deep integration within Europe. But a weakened Germany might turn inward. And that in itself will sort of cut off any ambitious European project. That's why I've always said, can the Europeans, can the Europeans free themselves from the shackles of the United States? You know, for the last 25 years I've been hearing about, oh, European needs to stand on their feet. They need to have their own military force. It was just talks. And talks coming out of Paris, not from Berlin. And I knew there was just talks, no more, no less. Yeah, because France cannot lead Europe. France has its own economic nightmares because it lacks German economic weight. So, and that is again where one of the problem And this leads us to the big elephant in the room, and this is geopolitical vulnerabilities. A weak Germany also means weak Europe geopolitical position. This is exactly when you add the Trump administration's unpredictability, especially on NATO and the transatlantic relations. You all know where this is lead to. Germany cannot have access to energy, cheap energy. So China is extending its economic and political influence. So all this play a major role. Stagnating, politically fragmented Germany cannot rally Europe. It won't be able, it won't be able. It's because It does not have its house in order. So what you're gonna be looking at, individual European countries now may pursue separate strategies, which is frankly about time. That's just the way I see it. So the path forward for all this is that for Germany to recognize the structural crisis that exists. So, and is to reform its own fiscal framework So, and if, if it is to move into this transitional, uh, uh, from renewables, they have to do it the right way. Otherwise, it's not gonna work. It's not gonna work. Suffice it to say, the broader meaning of all this is that Germany's crisis ultimately about the exhaustion of particular model of an industrial capitalism. That has dominated the 20th century. Even here for the US, this is— once again, I'm, I'm, I'm hearing conversations behind closed doors of the viability of capitalism as we know it. So, because remember, how did the, uh, you know, uh, uh, MGM— or GMC, I'm sorry, GMC, uh, the automobile industry here in the US, you know, where did they make their profit from? Here in the United States? No, they made them because they shipped everything to China at that time, and the government stepped out of the way— meaning our government stepped out of the way and let them be under the banner of capitalism because it was driven by profits. Yeah, GMC sells— GM sells more vehicles, uh, made more vehicles outside the United States than it did that it did in, in inside here. So, and this is again, and this, and I'm concluding with one, one, one, one, one, uh, one thoughts here pertaining to the collectiveness of all this. When we talk about Europe's future depends on whether Germany finds the political will to change, you know, so far the odds appear for me and certain. And I can unequivocally say I don't see this happening for the next 4 years unless there is a radical change. But I don't want to conclude with this. What I want to conclude with is when you think about the G7, because that's right there at the heart of Europe, so which was Europe and its, uh, the US and its allies. So you think about the 7 countries Canada, France, Germany, Italy, Japan, United Kingdom, and the US formed what's known as the G7. Of course, G7 was a powerhouse after World War II, later on when it was established, for, for the last 50 years of the last century. So why? And its total output at that time, it was about between, uh, and don't quote me on this, guys, I just remembered top of my head, between 27 to 28% of the global GDP. And if anybody knows the numbers, please share it with the community. I'm just thinking on top of my head. Yeah, it was a major, uh, major players. Not anymore. Why is this? Because you have to think about China and BRICS. China— I'm sorry, China— BRICS led by China. You know, there are those who say, well, BRICS is led also by India. I have to disagree with that assessment. I don't think so. But suffice it to say that BRICS output of goods and services is about, uh, once again, about between 34 to 36%. Makes you just wonder. So, I mean, I'm not denying G7 has historically, uh, uh, been the larger economy back then. Yeah, but the recent data suggests otherwise. And this is again when you think about BRICS has surpassed the G7 in both nominal and PPP terms due to the far faster growth, particularly of China. I would not include India. Some records mention India. I would not. And the reason I would not include India, it's because it does not carry weight on the global market. Regarding the economy. Just because you have a large population doesn't mean you are productive. So I'm, I'm, I'm limited to saying this faster growth of BRICS is led by China. So while G7 still lead in nominal GDP, which is about $51 billion— uh, $51 trillion, I'm sorry, versus $31 trillion, meaning BRICS $51 trillion and G7 $31 trillion. You see the difference. This is why BRICS accounts for a larger share of the global GDP by PPP, purchasing power parity, and has a significant higher consumer base. Population. That's exactly what I wanted to conclude with. So hope you guys find it informative here. Uh, please, if you like what you are, uh, learning here in this channel, I would greatly appreciate if you can support the channel. This is the link if you want to. I'm gonna put the link for you in the chat box. Uh, you know the type of information you are receiving here. This is not something comes— so I spend hours doing the research for you because I want you to be well armed with knowledge. So when you talk, you talk with facts, with knowledge. And as we say, power— information is power. So greatly appreciate your support on this. And once again, uh, be on the lookout for an al— I'll send you the info regarding my upcoming, uh, uh, uh, information, uh, uh, discussion and interview with Jayant Bhandari. I'll post it for the community, and I look forward to seeing you next time. As— oh, thank you all for, uh, for joining in here, the conversation, and I look forward to seeing you next time. As always, remember, geopolitics impacts your daily life in more ways than one. Till next time, bye-bye.