How to undo 40 years of improving inflation in two years. Today, UK inflation hit 9.1% but we all know it is much higher than that.
Energy prices (gas and electricity) rose by 54% in April and a further two increases are planned for October and January. This will push prices up by at least another 50% in the space of a few months.
Petrol/Fuel prices have risen by at least 40% with a lot of this being sifted off by government.
Food prices have increased by at least 20% with many staples, such as pasta, rising by 50%.
This is happening around the world but each individual country comes up with their own excuses. In the UK, it is fashionable to blame Brexit. Whilst this will be having some impact, shutting down the economy for two years, forcing healthy people not to work, printing £500 billion via the Bank of England and then suddenly reopening the economy might not have helped.
This is only going to get worse. How do I know this? Because the incompetent politicians who put us in this mess in the first place are still in power and there are no signs of this changing.
A large section of the population who called for lockdowns won’t admit lockdowns caused the pain we are in now. Instead, Russia invading Ukraine will be blamed by the metropolitan elite who will be able to ride this storm out. In fact many of them won’t know what the fuss is about. They will have received large inflation busting pay rises, further contributing to the price/wage inflation spiral.
I dread to think how many will cope during the winter. The graph above started in the early 1980s when Ronald Reagan said “Government’s first duty is to protect the people, not ruin their lives”. It seems our current politicians never received this memo.
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There wasn’t really 40 years of improving inflation.
It just got shifted for the last few decades into inflated asset prices, mainly property, the prices of which have been propped up by artificially low interest rates.
These inflated properties prices have generated huge tax revenues for governments (allowing them to expand their sphere of influence) and also allowed people to remortgage whenever they feel like it. At near zero interest rates why wouldn’t they? I mean borrow for free, with rates never likely to rise and prices never likely to fall - who wouldn’t?
Borrowing and realized gains from these inflated assets have led all to believe everything is ok.
I think the inflation has been deliberately engineered. They've been trying to create inflation (I mean in the sense of higher retail prices indices) for years and have been unable to do so due to the disinflationary effect of globalisation (cheap goods from China and cheap commodities from FSU). They need to inflate away the real value of the debts which they've accumulated since the 1990s when Greenspan was at the Fed and they decided to stop having recessions. COVID lockdowns caused a supply shock (and justified more massive money printing), the war in Ukraine exacerbated it and so has "net zero". Now the world is awash with money and we can't find anything to buy with it. I expect a decade of financial repression as they let inflation rip in low double digits with the central banks constantly "behind the curve" with governments implementing price/rent controls, UBI, forms of rationing and other "sticking plasters" to placate the masses. It'll be a grim time to be alive for many in the West. By the end of it, most of us will literally "own nothing" but I doubt we'll be very "happy" about it.
I wonder how many UK people were aware of how much of the cost of fuel goes to the Government? I remember the last sizeable fuel crisis about 20 years ago when it become common knowledge but I don't think it was ever addressed. I think they promised to "freeze" the fuel excise escalator or something.
The commenters here would appear to be better economists than the world’s central bankers. But very few criminals are actually competent unless you define competence as destruction, which is what is being engineered in front of our eyes. A controlled demolition is what is being attempted, what we may get is an uncontrolled one. Debt is the Big Problem. It was caused by way too much money created out of thin air - money that was neither earned nor saved. It was simply printed - so many Trillions just in the past dozen years or so as to dwarf all other money printing combined. This was never going to end well. There are only 2 possible outcomes - both catastrophic - 1)Raise interest rates high enough to kill off inflation now, the result being the near term implosion of all asset prices and instant recessions for all economies other than purely agrarian ones or 2) let inflation rip and forestall the implosion perhaps a couple of years or so. Here’s a question for the readers: which option do you think they are going to pick? Here’s a hint: Option 1 would cause the most near term pain(by far) to the Elites because it would deflate asset prices the quickest. Option 2 creates the illusion of rising asset prices(due to currency devaluation and soaring inflation), but it is purely an illusion. Both options end up at the same destination.
I don't think this is incompetence. I think this is the intentional destruction of the world economy to usher in a single digital world currency - Covid policies; the Ukraine-Russia conflict and their impact in fuel, energy and food; climate policies are all moving towards that goal. Time will tell if I am being an alarmist conspiracy theorist!
In my most simple view there is not enough economic activity to pay these massive debts (in the form of bills and bonds) so its currency expansion (no bills or bonds are issued) until the economy collapses from the inflation (the massive markets in the middle can't afford the higher prices), which is happening, then deflation with notable exception to those few critical scarcer resources needed to fuel the hierarchy (those who aren't productive). Then there will be nothing left for money holders to invest in. Since no one has a shire to defend, with the people who have been fashioned into the market having nothing, will happily eat bugs to start up the next investment cycle for those who knew enough to squirrel away some of that money.
The 45% 'cost of petrol to supplier' also has a large chunk which is actually tax. I can't recall the exact numbers but well over 60% of total price to consumer is tax I think.
Of the two pictures, I say the second is worth much more. The first is common knowledge by now, whether by staying informed over the years, or by a current "mugging." But not enough peeps know (or keep in mind?) the massive cost of our overlording public sector.
Speaking of Capitalist revivals, the world (and especially its *one-time* shining-city-on-a-hill) sorely needs a new Mr. Reagan. Would that Mr. Desantis fulfill his seeming promise.
There wasn’t really 40 years of improving inflation.
It just got shifted for the last few decades into inflated asset prices, mainly property, the prices of which have been propped up by artificially low interest rates.
These inflated properties prices have generated huge tax revenues for governments (allowing them to expand their sphere of influence) and also allowed people to remortgage whenever they feel like it. At near zero interest rates why wouldn’t they? I mean borrow for free, with rates never likely to rise and prices never likely to fall - who wouldn’t?
Borrowing and realized gains from these inflated assets have led all to believe everything is ok.
This is essentially a Ponzi scheme.
I think the inflation has been deliberately engineered. They've been trying to create inflation (I mean in the sense of higher retail prices indices) for years and have been unable to do so due to the disinflationary effect of globalisation (cheap goods from China and cheap commodities from FSU). They need to inflate away the real value of the debts which they've accumulated since the 1990s when Greenspan was at the Fed and they decided to stop having recessions. COVID lockdowns caused a supply shock (and justified more massive money printing), the war in Ukraine exacerbated it and so has "net zero". Now the world is awash with money and we can't find anything to buy with it. I expect a decade of financial repression as they let inflation rip in low double digits with the central banks constantly "behind the curve" with governments implementing price/rent controls, UBI, forms of rationing and other "sticking plasters" to placate the masses. It'll be a grim time to be alive for many in the West. By the end of it, most of us will literally "own nothing" but I doubt we'll be very "happy" about it.
I wonder how many UK people were aware of how much of the cost of fuel goes to the Government? I remember the last sizeable fuel crisis about 20 years ago when it become common knowledge but I don't think it was ever addressed. I think they promised to "freeze" the fuel excise escalator or something.
In South West Sydney, Australia:
Last week a whole cabbage - about 80% of a basketball - cost $7; today it is $10!!!
The commenters here would appear to be better economists than the world’s central bankers. But very few criminals are actually competent unless you define competence as destruction, which is what is being engineered in front of our eyes. A controlled demolition is what is being attempted, what we may get is an uncontrolled one. Debt is the Big Problem. It was caused by way too much money created out of thin air - money that was neither earned nor saved. It was simply printed - so many Trillions just in the past dozen years or so as to dwarf all other money printing combined. This was never going to end well. There are only 2 possible outcomes - both catastrophic - 1)Raise interest rates high enough to kill off inflation now, the result being the near term implosion of all asset prices and instant recessions for all economies other than purely agrarian ones or 2) let inflation rip and forestall the implosion perhaps a couple of years or so. Here’s a question for the readers: which option do you think they are going to pick? Here’s a hint: Option 1 would cause the most near term pain(by far) to the Elites because it would deflate asset prices the quickest. Option 2 creates the illusion of rising asset prices(due to currency devaluation and soaring inflation), but it is purely an illusion. Both options end up at the same destination.
People do not understand well enough that all this economic destruction is being perpetrated on purpose, to force us onto a green agenda.
I don't think this is incompetence. I think this is the intentional destruction of the world economy to usher in a single digital world currency - Covid policies; the Ukraine-Russia conflict and their impact in fuel, energy and food; climate policies are all moving towards that goal. Time will tell if I am being an alarmist conspiracy theorist!
I wonder are the elites trying to find the sweet spot of how much they can stress the great unwashed before civil unrest?
And here we have the cause of this:
Our fossil fuel energy predicament, including why the correct story is rarely told https://ourfiniteworld.com/2021/11/10/our-fossil-fuel-energy-predicament-including-why-the-correct-story-is-rarely-told/
In my most simple view there is not enough economic activity to pay these massive debts (in the form of bills and bonds) so its currency expansion (no bills or bonds are issued) until the economy collapses from the inflation (the massive markets in the middle can't afford the higher prices), which is happening, then deflation with notable exception to those few critical scarcer resources needed to fuel the hierarchy (those who aren't productive). Then there will be nothing left for money holders to invest in. Since no one has a shire to defend, with the people who have been fashioned into the market having nothing, will happily eat bugs to start up the next investment cycle for those who knew enough to squirrel away some of that money.
The 45% 'cost of petrol to supplier' also has a large chunk which is actually tax. I can't recall the exact numbers but well over 60% of total price to consumer is tax I think.
Of the two pictures, I say the second is worth much more. The first is common knowledge by now, whether by staying informed over the years, or by a current "mugging." But not enough peeps know (or keep in mind?) the massive cost of our overlording public sector.
Speaking of Capitalist revivals, the world (and especially its *one-time* shining-city-on-a-hill) sorely needs a new Mr. Reagan. Would that Mr. Desantis fulfill his seeming promise.
https://spectatorworld.com/topic/sunshine-state-of-mind-florida/
I know a bloke down in Peckham named Del who can get you a deal on some petrol.
Let's go Brandon!
"The nine most terrifying words in the English language are: I'm from the government and I'm here to help." - President Reagan