For years, extraordinary money supply growth and negative real rates have pushed asset prices to unwarranted levels. The resulting “everything bubble” spread across real estate, private equity, bonds, and stocks. Now, it is bursting.

The process begins when cheap and elevated liquidity, which is the assumption underpinning inflated valuations, suddenly evaporates. Fiscal deterioration pushes up sovereign borrowing costs, the energy shock squeezes purchasing power, and monetary tightening exacerbates both. Tech stocks are the high-profile victims. However, the deeper danger lies in the repricing of the entire financial system’s foundation.

Decades of bloated government, entitlements, subsidies, and mass migration have destroyed Europe’s competitiveness and growth, all paid for with ever-rising taxes and more debt. They have also created enormous social discontent. Taxpayers are exhausted, and the recipients of subsidies are looting and vandalizing the streets. The flames in French cities are the bill that is arriving.

On Saturday 17 October, France burned again. What began as marches against the cost of living and the state of public schools turned into the worst violence the country has seen in decades. According to the French government, 550,000 people took to the streets, 1,200 were arrested, and 150 police officers were injured. In Limoges, rioters set the city hall ablaze; in Marseille, they broke into the city hall; and in Lyon, they torched the tourist office. AFP reporters on the ground described scenes more intense than the 2023 riots and the Yellow Vest protests of 2018 and 2019, six months before a presidential election. Major cities, including Paris, Marseille, and Lille, suffered enormous commercial damage with smashed shopfronts, shattered glass, and ransacked retail spaces. In Bordeaux, Mayor Thomas Cazenave reported that up to 100 stores were looted in his city alone.

The diesel agreement between Donald Trump and Vladimir Putin will not solve the diesel shortage, considering the magnitude of the problem created by years of misguided, wrongly called “environmental policies.” Complaining about diesel prices and the US-Russia deal while eliminating domestic refining capacity and bombing refineries is just another example of bureaucratic hypocrisy.

Renewables are important, but they cannot substitute diesel, just as they have been unable to offset the importance of natural gas. Diesel is essential for every segment of the economy, from transport, manufacturing, and farming to distribution. Now, European politicians complain. However, governments cannot negotiate away years of lost refining capacity. Europe’s vulnerability is structural. Yes, war has intensified it, but policy choices helped create an energy system increasingly dependent on imported fuels, expensive infrastructure, and high taxation. Furthermore, the risk is that—as happened in the past—oil and gasoline prices may fall, and the European businesses and families will still pay much higher energy and fuel prices.

Socialist Americans are promising affordable housing through rent controls and government intervention. The evidence shows that these policies deliver the opposite.

Spain’s housing crisis is presented by socialists as proof that they must impose tougher rent controls, higher taxes on owners, tighter restrictions on investors, and broader intervention in the rental market. The evidence shows the opposite. Spain’s excessive intervention, regulation, and taxation have created a destructive combination of exploding demand, chronically insufficient construction, hostility toward private rental supply, and growing legal uncertainty for owners.