Who would have guessed it? In the UK, after printing billions of pounds to fund ridiculous Covid policies, inflation is beginning to bite. Nobody could have predicted that, could they?
Between March 2020 and July 2021, the government borrowed £413 billion whilst the Bank of England conveniently purchased £412 billion of government debt. Unlike in the financial crisis, where much of the money stayed within financial institutions, this time the money was distributed amongst the population. And what happens when too much money chases the same goods…you guessed it.
Despite failing its main objective, the government spent anything up to £37 billion on a test and trace system. It also spent approximately £70 billion on a furlough scheme to stop healthy individuals, who were at little risk of dying from Covid, working and thereby crashing the economy further.
Low and behold, already in 2022, the Bank of England base rate has risen from 0.1% to 0.5%, GDP forecasts have been slashed and the inflation forecast has been raised again to 7.25% (versus 2% forecast last February).
However, we mustn’t call it inflation anymore, as that will panic people and point to the real culprits. Therefore, from now on inflation is to be called the ‘cost of living crisis’.
The Bank of England’s forecast for real post tax labour income suggests that this will be worse than the financial crisis and the biggest fall in disposable income.
This week, electricity and gas suppliers have been allowed to charge 50% more on bills, costing the average household around £620 ($840) extra in this year alone. Food prices are expected to increase by £180 ($244), as well as taxes, mortgages, rent and almost every other bill increasing. Wages on the other hand…not so much.
Don’t worry though, the Chancellor has a plan. He’s printing more money and loaning it to people to pay their bills, repayable in instalments over five years. What could go wrong?
All predictable, all avoidable.
Is a similar thing happening in your country? Describe what is happening in your country in the comments below.
I'm sure this is quite deliberate. The aim is for individual governments to collapse under a load of debt and inflation, and for populations unable to afford fuel to rise up. That will be the cue for a totalitarian world government run by banks and globalist corporations. That's the way it already works anyway.
Sadly, the GOP has actually had the "starve the beast" strategy to overspend and undertax to cause it to collapse. The democrats haven't said this, but of course their delight in socialism will have the same effect, though not by intent, just mal-informed economics and their rejection of citizens as free-dumb.
I don't agree that Democrats have socialist tendencies: As a party they are just as right wing as Republicans. The only difference between them is what they want to mandate--they each want big government to be top-down about something. As a libertarian, I feel they are both equally horrifying. Dems are authoritarian, but that is not the same as socialist--that is all theatre. As evidence, I present Joe Biden signing even more gas and oil leases, caging even more migrants, deporting even more people, pushing even more fracking. The "woke" talk is just for show--witness California having a supermajority of Dems and tabling all talk of universal health care.
Public schools over school choice vouchers is a democratic item, as are most welfare type redistribution, high business regulations, mandated ACA plans, and forced "benefits" (that only benefit a few instead of wages for all). Now they want universal pre-K, universal housing, universal jobs...
But you are right that both parties are authoritarians, wanting to force all to live their preferences. Both seem fine with deficit spending (true greed where you spend the future's wealth, our children's wealth, on government desires today), undeclared wars, drug wars, mass incarceration (though democrats prefer socialist government-run gulags). Government didn't get this big and reckless without the cooperation of the left and right.
Feb 5, 2022·edited Feb 5, 2022Liked by NE - Naked Emperor Newsletter
The hyperinflation is global. Here in the US, heating oil has jumped from $1.65/gal to $3.40 (last time I looked). Fun times in Maine. This is directly due to Xiden cutting keystone pipeline & other oil projects. Fortunately so fsr no offers of "helpful loans" that I'm aware of. They'd sooner freeze us today than starve us tomorrow.
Note that these policies directly impact the cost of everything else: fertilizer, transport, raw goods extraction, etc.
It’s global this time, a synchronized ratchet effect that is hitting energy, raw materials and transportation everywhere at once. These are inflation’s global contagion. And it’s very, very deliberate. All 3 major components of economic activity - supply, demand and labor - were ignited in 2020 with hyper-inflationary force all over the world and in a very short time frame, creating an ‘end-of-whip’ accelerating force that is likely to generate global hyper-inflation much more quickly than any “natural” economic forces could ever do. But hyper-inflation is never natural - it is always a political event, historically generated by wars or tyrrany(or both) eg, Germany in the early 1920s, Venezuela today.
The global elites who are orchestrating our world-wide inflation surge are doing so for 3 related reasons: 1) they need lots of (printed) money in a short period of time to finance their political aims (ie, tyranny is extremely expensive as so many cohorts must be ‘bought off’ to fully implement it, especially during a time when real economic activity is being suppressed)
2) Global debt of over $300 Trillion must be re-monetized and hyper-inflation is necessary to accomplish a massive inflation adjusted reduction in ‘real’ government debt levels, and 3) The move to digital currencies worldwide will be accompanied by massive asset seizures worldwide, induced by inflationary pressures and debt default. This is a pillar of The Great Reset: “You will own nothing and you will be happy”(Klaus Schwab)
It’s happening everywhere, and the poor are paying the highest price by far. The middle class is next. The goal of the global elites is to eliminate the middle class, a central tenet of the Great Reset.
in Ireland the government are subsidizing electricity bills for each household €100. the once off payment will be added to the general covid debt that future generations will need to pay off.
You can't help thinking that when this all collapses the bank of England will end up owning all the houses that get defaulted on and then you end up in the American situation where the FED owns all the mortgages. It's almost perfect setup for them to own everything while you own nothing. Who'd have thought.
Feb 5, 2022·edited Feb 5, 2022Liked by NE - Naked Emperor Newsletter
This is the 'bio-weapon' of Covid 19. It was ready for a long time but what forced its release was Trump sailing towards a second term. The weapon itself is to collapse the western global economy, rendering people poor and desperate enough to accept Communism by the back door. We will all be lining up with our begging bowls, begging the Nanny State's teet to squeeze us another drop of survival. They know EXACTLY what printing so much money means, it's not like Germany, Argentina etc haven't shown us many times before. And these people studied fiscal policy and inflation etc while I was busy washing dishes in a restaurant kitchen. So if I know it, they know it. Which means it's deliberate, and planned. Welcome to Communism.
I wrote about this in December (https://freespeech.substack.com/p/the-winter-of-discontent-reloaded) after giving up on trying to convince my family and friends to take cover for the shitstorm I knew was coming once they turned on those printing presses, and paid people I know more than they normally earn, to sit in their garden drinking beer. I will remind those swines what THEY caused by being greedy enough to take the handouts.
Feb 5, 2022·edited Feb 5, 2022Liked by NE - Naked Emperor Newsletter
CBDC and UBI will follow as a ‘natural’ strategy to reduce the burden on commoners. Back to communism in no time!!! Already observing in some people I know - they are almost always pro-government policies because they are living on handouts and grant funding
Two more years of this (which is likely, unless real hyperinflation starts, then no more construction, but lots of new bad things) and the cost of a project will be almost 50% higher than 2020.
The institutionalized are running the worlds institutions. At what point does it become ones duty to stop this madness? Must we wait until mankind is eating the soles of their boots? It feels, at least to me, that it only becomes legal after the damage is done. It's as if every check and balance is no longer functioning
Gas has doubled, grocery stores have empty shelves and what you can get is way more expensive than it was 18 months ago, housing prices are skyrocketing, interest rates are going up, new cars are scarce. Police have been defunded and crime is going up, from petty theft to violent crime. All done on purpose.
The thing is, "they" don't need to tank the SA economy to destroy the world economy... To collapse the world economy you only need to target the "big" currencies/economies (and probably not even all of them) - the Dollar, Euro and the Pound. SA Rand will go wherever they go.
"Don’t worry though, the Chancellor has a plan. He’s printing more money and loaning it to people to pay their bills, repayable in instalments over five years. What could go wrong?"
If you're going to comment on how money works, then at least first take time to understand the accounting. Otherwise it suggests there may be a similar shallow level of analysis with the other work you do - assuming people aren't suffering from the Gell-Mann amnesia effect. If you want to look into in depth then you can read "An Accounting Model of the UK Exchequer" which contains the gory details about precisely how government expenditure and income works.
*All* government spending in the UK is done via "printing money" and has been since at least 1866. The government orders the Bank of England to make the payment, and it is done. Since my spending is your income less tax, and your spending is my income less tax, that then bounces around causing transactions until all of it disappears in taxation. It's a simple geometric progression. The visual analogy is a stone skipping across a pond. Each bounce is a transaction and each ripple is taxation. The smaller the ripple, the more bounces. But the stone always sinks in the end.
What causes a visible 'deficit' or 'borrowing' is people saving rather than spending. Private saving is the other side of the national balance sheet to public borrowing. You can't do one without the other. But it is the saving causing the borrowing. Much as you cause your bank to borrow when you deposit money in it.
If you have a theory about how increased private saving causes inflation, then I'm all ears.
Similarly the Bank of England just handed £2.25bn to the banks over the next year when it raised interest rates. Where do you think that £2.25bn comes from, and how is handing banks more free money going to reduce overall spending? Why isn't that just pouring more fuel on the fire?
Just like with the magic of masks, what is generally believed isn't the case.
The UK economy has had a supply side shock. There is a shift from demand for services to demand for goods due to the pandemic restrictions, and the ongoing hygiene theatre is putting sand in the production works. Efficiency has collapsed.
This is worldwide so we are now in a situation where insufficient gas has been pumped to supply world demand.
In the most part price rises are just the market allocating scarce resources to those with the money to afford it. If there are fewer things, then somebody must lose out. The problem is that the politicians don't want to allocate the losses, nor do they want to sort out the supply side by dropping all restrictions and getting people back to work full-time (on pain of losing their job).
It's not about money. It's about the production side being crippled by restrictions so that market competition can no longer do its job of restraining prices. Firms are usually scared to put up prices because a competitor with excess capacity to supply will nick their customers. People are usually scared to ask for higher wages because there are plenty of people job hunting who will nick their job.
We don't have an excess money issue, we have a lack of supply and competition issue. After two years of "you don't have to work and people will still bring you stuff", that's hardly surprising.
Thanks, that's an interesting way to visualise it. I understand fractional reserve banking and that all money is printed but I don't claim to be an expert.
I agree that lack of supply and competition is a major issue but can't an increase in the money supply exacerbate this issue? When the money is handing to banks, it is a major problem, but less of an immediate problem than when it goes straight to the consumer?
If you call it 'fractional reserve banking', then you may not understand it - because there is no such thing. Nothing is kept in reserve in the UK. There are no fractions. Reserves weren't even a thing in the UK prior to 2005. It may be worth looking at the Bank of England document "Money Creation in the Modern Economy".
"Money creation in practice differs from some popular misconceptions—banks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits."
In aggregate for loans to even be visible on a balance sheet, or for a government deficit to even show up, an equivalent amount of money has to have been saved by somebody in bank accounts. Saving is very definitely not spending. What you call the 'money supply' is just people keeping money in bank accounts - largely for a rainy day. It's a stock, not a flow.
The flow is transactions - money changing hands in exchange for stuff. That process is taxed, which then reduces the amount the next person can use for exchange. Therefore if you add more transactions, then you generate more tax. The faster it moves, the faster tax is generated, and the harder the brake is applied.
From April 2022, National Insurance is going up, while tax thresholds are frozen. Council Tax is going up, as are the precepts. From April 2023 Corporation Tax is going up.
All these automatic stabilisation devices will drain demand from the system, and that will offset the small power subsidy that the Chancellor has provided. Hopefully it will also drain the money given to banks by the Bank of England, which drops straight through to the bottom line for distribution to shareholders.
But really we need to get the supply side freed up, or taxes will have to go up even more.
I was attempting to start by own business at the beginning of the 80's. Inflation - sorry, cost of living crisis - was around 20% and interest rates similar. We're probably heading there again.
In the midst of such looming economic hardship, it must be is comforting to know that you can still get FREE injections that do not protect you from a disease you never needed protection from, but which will undermine your general health for the rest of your [resultingly shorter] life.
I'm sure this is quite deliberate. The aim is for individual governments to collapse under a load of debt and inflation, and for populations unable to afford fuel to rise up. That will be the cue for a totalitarian world government run by banks and globalist corporations. That's the way it already works anyway.
Sadly, the GOP has actually had the "starve the beast" strategy to overspend and undertax to cause it to collapse. The democrats haven't said this, but of course their delight in socialism will have the same effect, though not by intent, just mal-informed economics and their rejection of citizens as free-dumb.
I don't agree that Democrats have socialist tendencies: As a party they are just as right wing as Republicans. The only difference between them is what they want to mandate--they each want big government to be top-down about something. As a libertarian, I feel they are both equally horrifying. Dems are authoritarian, but that is not the same as socialist--that is all theatre. As evidence, I present Joe Biden signing even more gas and oil leases, caging even more migrants, deporting even more people, pushing even more fracking. The "woke" talk is just for show--witness California having a supermajority of Dems and tabling all talk of universal health care.
Public schools over school choice vouchers is a democratic item, as are most welfare type redistribution, high business regulations, mandated ACA plans, and forced "benefits" (that only benefit a few instead of wages for all). Now they want universal pre-K, universal housing, universal jobs...
But you are right that both parties are authoritarians, wanting to force all to live their preferences. Both seem fine with deficit spending (true greed where you spend the future's wealth, our children's wealth, on government desires today), undeclared wars, drug wars, mass incarceration (though democrats prefer socialist government-run gulags). Government didn't get this big and reckless without the cooperation of the left and right.
Starving the -government- beast leaves more money for feeding life essential beasts.
The hyperinflation is global. Here in the US, heating oil has jumped from $1.65/gal to $3.40 (last time I looked). Fun times in Maine. This is directly due to Xiden cutting keystone pipeline & other oil projects. Fortunately so fsr no offers of "helpful loans" that I'm aware of. They'd sooner freeze us today than starve us tomorrow.
Note that these policies directly impact the cost of everything else: fertilizer, transport, raw goods extraction, etc.
It’s global this time, a synchronized ratchet effect that is hitting energy, raw materials and transportation everywhere at once. These are inflation’s global contagion. And it’s very, very deliberate. All 3 major components of economic activity - supply, demand and labor - were ignited in 2020 with hyper-inflationary force all over the world and in a very short time frame, creating an ‘end-of-whip’ accelerating force that is likely to generate global hyper-inflation much more quickly than any “natural” economic forces could ever do. But hyper-inflation is never natural - it is always a political event, historically generated by wars or tyrrany(or both) eg, Germany in the early 1920s, Venezuela today.
The global elites who are orchestrating our world-wide inflation surge are doing so for 3 related reasons: 1) they need lots of (printed) money in a short period of time to finance their political aims (ie, tyranny is extremely expensive as so many cohorts must be ‘bought off’ to fully implement it, especially during a time when real economic activity is being suppressed)
2) Global debt of over $300 Trillion must be re-monetized and hyper-inflation is necessary to accomplish a massive inflation adjusted reduction in ‘real’ government debt levels, and 3) The move to digital currencies worldwide will be accompanied by massive asset seizures worldwide, induced by inflationary pressures and debt default. This is a pillar of The Great Reset: “You will own nothing and you will be happy”(Klaus Schwab)
It’s happening everywhere, and the poor are paying the highest price by far. The middle class is next. The goal of the global elites is to eliminate the middle class, a central tenet of the Great Reset.
in Ireland the government are subsidizing electricity bills for each household €100. the once off payment will be added to the general covid debt that future generations will need to pay off.
Few good outcomes when government fraud is the name of the game.
We forget that the biggest inflation has happened for 20 years with the housing boom, that most people think is a positive investment.
But really, who will be able to afford a house on a normal income when it climbs much faster than incomes?
We didn't care back then, but now it's noticed in food and electricity etc?
You can't help thinking that when this all collapses the bank of England will end up owning all the houses that get defaulted on and then you end up in the American situation where the FED owns all the mortgages. It's almost perfect setup for them to own everything while you own nothing. Who'd have thought.
This is the 'bio-weapon' of Covid 19. It was ready for a long time but what forced its release was Trump sailing towards a second term. The weapon itself is to collapse the western global economy, rendering people poor and desperate enough to accept Communism by the back door. We will all be lining up with our begging bowls, begging the Nanny State's teet to squeeze us another drop of survival. They know EXACTLY what printing so much money means, it's not like Germany, Argentina etc haven't shown us many times before. And these people studied fiscal policy and inflation etc while I was busy washing dishes in a restaurant kitchen. So if I know it, they know it. Which means it's deliberate, and planned. Welcome to Communism.
I wrote about this in December (https://freespeech.substack.com/p/the-winter-of-discontent-reloaded) after giving up on trying to convince my family and friends to take cover for the shitstorm I knew was coming once they turned on those printing presses, and paid people I know more than they normally earn, to sit in their garden drinking beer. I will remind those swines what THEY caused by being greedy enough to take the handouts.
CBDC and UBI will follow as a ‘natural’ strategy to reduce the burden on commoners. Back to communism in no time!!! Already observing in some people I know - they are almost always pro-government policies because they are living on handouts and grant funding
I work in construction on a project in Los Angeles California.
Construction inflation was up 13.4% last year. And these aren't made up, conspiracy numbers, this is posted by the state of California government.
https://www.dgs.ca.gov/RESD/Resources/Page-Content/Real-Estate-Services-Division-Resources-List-Folder/DGS-California-Construction-Cost-Index-CCCI
Two more years of this (which is likely, unless real hyperinflation starts, then no more construction, but lots of new bad things) and the cost of a project will be almost 50% higher than 2020.
I use to think that money was real until I learned about fraction reserve lending now I know it’s all bullshit
Very soon we will be moving to digital bullshit instead of physical bullshit to “reduce carbon”
Here in America, money printer go brrrr
The institutionalized are running the worlds institutions. At what point does it become ones duty to stop this madness? Must we wait until mankind is eating the soles of their boots? It feels, at least to me, that it only becomes legal after the damage is done. It's as if every check and balance is no longer functioning
Gas has doubled, grocery stores have empty shelves and what you can get is way more expensive than it was 18 months ago, housing prices are skyrocketing, interest rates are going up, new cars are scarce. Police have been defunded and crime is going up, from petty theft to violent crime. All done on purpose.
The thing is, "they" don't need to tank the SA economy to destroy the world economy... To collapse the world economy you only need to target the "big" currencies/economies (and probably not even all of them) - the Dollar, Euro and the Pound. SA Rand will go wherever they go.
Oh yes, and all of these (block of) nations are experiencing inflationary pressure courtesy of stimulus.
"Don’t worry though, the Chancellor has a plan. He’s printing more money and loaning it to people to pay their bills, repayable in instalments over five years. What could go wrong?"
If you're going to comment on how money works, then at least first take time to understand the accounting. Otherwise it suggests there may be a similar shallow level of analysis with the other work you do - assuming people aren't suffering from the Gell-Mann amnesia effect. If you want to look into in depth then you can read "An Accounting Model of the UK Exchequer" which contains the gory details about precisely how government expenditure and income works.
*All* government spending in the UK is done via "printing money" and has been since at least 1866. The government orders the Bank of England to make the payment, and it is done. Since my spending is your income less tax, and your spending is my income less tax, that then bounces around causing transactions until all of it disappears in taxation. It's a simple geometric progression. The visual analogy is a stone skipping across a pond. Each bounce is a transaction and each ripple is taxation. The smaller the ripple, the more bounces. But the stone always sinks in the end.
What causes a visible 'deficit' or 'borrowing' is people saving rather than spending. Private saving is the other side of the national balance sheet to public borrowing. You can't do one without the other. But it is the saving causing the borrowing. Much as you cause your bank to borrow when you deposit money in it.
If you have a theory about how increased private saving causes inflation, then I'm all ears.
Similarly the Bank of England just handed £2.25bn to the banks over the next year when it raised interest rates. Where do you think that £2.25bn comes from, and how is handing banks more free money going to reduce overall spending? Why isn't that just pouring more fuel on the fire?
Just like with the magic of masks, what is generally believed isn't the case.
The UK economy has had a supply side shock. There is a shift from demand for services to demand for goods due to the pandemic restrictions, and the ongoing hygiene theatre is putting sand in the production works. Efficiency has collapsed.
This is worldwide so we are now in a situation where insufficient gas has been pumped to supply world demand.
In the most part price rises are just the market allocating scarce resources to those with the money to afford it. If there are fewer things, then somebody must lose out. The problem is that the politicians don't want to allocate the losses, nor do they want to sort out the supply side by dropping all restrictions and getting people back to work full-time (on pain of losing their job).
It's not about money. It's about the production side being crippled by restrictions so that market competition can no longer do its job of restraining prices. Firms are usually scared to put up prices because a competitor with excess capacity to supply will nick their customers. People are usually scared to ask for higher wages because there are plenty of people job hunting who will nick their job.
We don't have an excess money issue, we have a lack of supply and competition issue. After two years of "you don't have to work and people will still bring you stuff", that's hardly surprising.
Thanks, that's an interesting way to visualise it. I understand fractional reserve banking and that all money is printed but I don't claim to be an expert.
I agree that lack of supply and competition is a major issue but can't an increase in the money supply exacerbate this issue? When the money is handing to banks, it is a major problem, but less of an immediate problem than when it goes straight to the consumer?
If you call it 'fractional reserve banking', then you may not understand it - because there is no such thing. Nothing is kept in reserve in the UK. There are no fractions. Reserves weren't even a thing in the UK prior to 2005. It may be worth looking at the Bank of England document "Money Creation in the Modern Economy".
"Money creation in practice differs from some popular misconceptions—banks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits."
In aggregate for loans to even be visible on a balance sheet, or for a government deficit to even show up, an equivalent amount of money has to have been saved by somebody in bank accounts. Saving is very definitely not spending. What you call the 'money supply' is just people keeping money in bank accounts - largely for a rainy day. It's a stock, not a flow.
The flow is transactions - money changing hands in exchange for stuff. That process is taxed, which then reduces the amount the next person can use for exchange. Therefore if you add more transactions, then you generate more tax. The faster it moves, the faster tax is generated, and the harder the brake is applied.
From April 2022, National Insurance is going up, while tax thresholds are frozen. Council Tax is going up, as are the precepts. From April 2023 Corporation Tax is going up.
All these automatic stabilisation devices will drain demand from the system, and that will offset the small power subsidy that the Chancellor has provided. Hopefully it will also drain the money given to banks by the Bank of England, which drops straight through to the bottom line for distribution to shareholders.
But really we need to get the supply side freed up, or taxes will have to go up even more.
Interesting thanks, I need to read more about it!
I was attempting to start by own business at the beginning of the 80's. Inflation - sorry, cost of living crisis - was around 20% and interest rates similar. We're probably heading there again.
In the midst of such looming economic hardship, it must be is comforting to know that you can still get FREE injections that do not protect you from a disease you never needed protection from, but which will undermine your general health for the rest of your [resultingly shorter] life.
Igor? Wrong substack!
Not Ivor either!
Substacks look very similar!
That one’s ‘fat’ this one’s ‘naked’. 😁