NEWS FLASH: From raging inferno to drowning in flash floods – will the MSM never weary of their hysterical nonsense? My South African friends have some advice: “Our dear friends in Europe, you must toughen up. You are part of the 40°C Club now so you sleep in your sweat without complaint. We do things differently in SA:” https://www.dailymaverick.co.za/opinionista/2022-08-11-toughen-up-you-gasping-europeans “Screaming the numbers from the rooftops only places you closer to the blazing-hot sun, does it not? So simmer down and sweat it out; in a few weeks, this will all be over and you can all go back to talking about the weather again.”
TAIWAN – INTERESTING FACT: “Only 14 countries recognize the Taipei government and dare to challenge mainland China’s position by establishing diplomatic relations with the island, according to Taiwan’s Ministry of Foreign Affairs. The majority (eight states) are located in Latin America and the Caribbean, including Paraguay, Guatemala, Honduras and Haiti. Taiwan’s other four allies are island nations in Southeast Asia, namely Nauru, Palau, Tuvalu and the Marshall Islands. This list is rounded off with the Kingdom of Eswatini, (formerly Swaziland) located next to South Africa, and the Vatican City State, in Europe:” https://www.statista.com/chart/27912/countries-with-diplomatic-relations-with-taiwan/
MARK THIS ANNIVERSARY: Fifty-one years ago this week, President Richard Nixon slammed shut the “gold window” and eliminated the last vestige of the gold standard – and so goes the dollar ever since: https://schiffgold.com/commentaries/an-inauspicious-anniversary-nixon-slams-shut-the-gold-window/
THOUGHT FOR THE WEEK: CJ Hopkins speaks for me when he says: “Speaking personally, I don’t regard myself as particularly virtuous or courageous. It’s just that giving up my autonomy, integrity, and abandoning my principles is out of the question. It is not an option. I don’t know who I would be if I did that. I certainly wouldn’t be able to respect myself. There’s a bit in the New Testament where Jesus asks, “What shall it profit a man if he shall gain the whole world and lose his own soul?” You can find out all about this remarkable man in this profile: https://margaretannaalice.substack.com/p/dissident-dialogues-cj-hopkins?utm_source=substack&utm_medium=email
BREAKING NEWS: RUMOURS OF WARS AGAIN: I am grateful to Caitlin Johnson for highlighting Henry Kissinger’s concerns about the dangers of US foreign policy madness. https://caitlinjohnstone.com/2022/08/14/modern-us-warmongering-is-scaring-henry-kissinger/
HOWEVER here’s some good news – oil prices are retreating! Brent is sliding to a low of $94 while WTI dropped below $90 to near the low in January wiping out the post-Ukraine SMO gains (which means any price inflation now is more down to zombie government. ZeroHedge on Tuesday: https://www.zerohedge.com/markets/oil-plunges-sending-energy-stocks-sharply-lower-heres-what-driving-selloff
BUT that’s not all. Small Modular Reactors (SMR) are making waves in the energy business, something I have been on about for decades. SMRs, like the one that powered the original submarine ‘Nautilus’ in 1954, could go decades between refuelling. Today, nuclear reactors are deployed in hundreds of submarines, cruisers, destroyers, and aircraft carriers, and the military claims a perfect safety record.
So what have the politicians been doing these last 70 years? Answer – bugger all but just enough to screw everything up; perhaps now at last they might just get their tiny brains to function and allow us into an energy nirvana: https://www.powermag.com/nrc-moves-to-issue-final-design-certification-for-nuscale-nuclear-module Reference: A Megawatt electric (MWe) is one million watts of electric capacity. Mega-watt-hour (MWh) is one thousand kilowatt-hours or 1million watt-hours.
THE BAD NEWS in the meantime is that Natural Gas prices have not peaked by a long chalk because global supplies will remain well short of demand for as long as Russia continues its withdrawal of gas from the markets in response to the fatuous, self-inflicted European sanctions – [Heads-up: I plan a ‘special’ posting analysing this market next Thursday]
BTW – Norway is making out like a bandit supplying its natural gas to Europe for high global market prices at the rate of £15,000 pa/head for the 4.5 million population last year; or about the same as HMG spends on us each year! Thus the sensible Scandinavians have saved their money in their ‘Sovereign Wealth’ fund that’s bursting at the seams.
It’s a pity their Anglo Saxon brethren lacked the foresight to do the same with North Sea Oil in the 1980s, but then this cohort are not known to be prudent managers of money, except of course the ruling elite. [Disclosure – my heritage is Viking, so I can say that without being unpatriotic; my loyalties are to my tribe]
HOW ARE THE BRITS GOING TO COPE THIS WINTER? So far the race for PM has been a great disappointment (putting it nicely) to many of the impecunious Brits salivating like Pavlov’ dogs as a far off ‘cha-ching’ signals freebies for winter. No such saviour has materialised thus far to assuage the simpering cries of “more cake”, merely empty promises of jam tomorrow. Britain needs action now!
After a lifetime of failed politicos I am only too aware of their tactic: ‘give it enough time and it will go away’ and which was amply demonstrated this week. Transfusion recipients had been given contaminated blood by the NHS and suffered irreparable harm – some even dying as a result. The class action case had, ahem, festered for several decades; but finally an unknown mandarin deep in the bowels of Whitehall shuffled appropriate papers into the out-tray and voilà, compensation has been duly offered.
Sadly this is but one of so many governmental obfuscations of which I have lost count. I fear that the Great Energy Crisis (GEC) of 2022 will take a similar route leaving Joe Public once more scratching for pennies in the embers of the last firestorm of bureaucratic cockups when the BoE chief honcho proclaimed that wages should not be increased for the duration.
(Edited from Michael Every of Rabobank) “Liz Truss backs more tax cuts and flag-waving. That said, she also supports the Bank of England (BoE) targeting nominal GDP, not CPI, and pushing Covid debt way down the maturity curve to free up fiscal space. Of course, it is the latter the market objects to. True, the idea won’t work without industrial policy or high tariffs: but even that combo would arguably be rejected by a ‘rational’ Establishment that makes money from the failing status quo: which is very ’emerging market’ when you think about it. She also claims that, because she had wasted a little time at the Treasury and had had a sudden Damascus moment, the obsolescent religion there prevailing needs to radically change, but failed to realise this would frighten the FX market’s pantomime horse.
Meanwhile, Kier Starmer finally announced his energy plan this week which in essence freezes energy prices at around the current £2,000pa per household rather than allowing a rise past £5,000 in 2023, which would be some two and half months average take-home pay. One study suggests two thirds of the affected 18m households will enter fuel poverty, an unenviable condition by which a household is unable to afford to heat their home to an adequate temperature and eat at the same time; being wholly unacceptable and life-threatening for some people especially the elderly. This means the government is in effect subsidising fuel, keeping demand up in the face of dodgy supply, and hoping energy will magically get cheaper.
The government badly needs a comprehensive, overall industrial policy, funded by the BoE, building more diverse sources of energy. Instead they focus on flag-waving, pie-in-the-sky tax cuts, attacking political opponents and obfuscation not unlike third-world countries; at least Europe is doing something positive, albeit being in crisis itself.
The monthly average cost of electricity in France is currently £120, where Britain was earlier this year, because Macron has taken rapid action. Germany’s falling water levels are not just impacting vital Rhine traffic, disrupting supply chains, but are exposing what Germans poetically call ‘hungersteine’ (‘hunger stones’). These messages, carved into the rock hundreds of years ago, warn: “wenn du mich seehst, dann weine” – “If you see me…weep.” I know how they feel.
HOW COME BRITAIN’S SO ‘RICH’? Well – for the 10% I guess. The answers will surprise you because, as the 5th largest economy in the world, we are encouraged to believe that Britain is a rich country but it depends on what measure is real, a very confusing magic trick.
UK’s annual Gross Domestic Product (GDP) is £2.77tn (with a ‘T’). There are different ways to estimate GDP depending on how inflation is applied, however 2021 data will suffice. It is an economist’s measure of the monetary value created by a country in goods and services, and the £2.77tn ($3.34tn) is hard to gauge, other than to say it’s a lot.
This equates to a massive £28,000 million, or perhaps 150 times the wealth of Elon Musk. The more understandable ‘per capita’ measure is £35,000 as against China’s current £7.500 and USA at £52,000. This is only one measure of the relative overall size of an economy – it is better to compare it as the 19th highest GDP per capita among the 42 industrialised countries in the ‘Organisation for Economic Co-operation and Development (OECD)’ – a more realistic measure of productivity and thus prosperity.
The planned government spending for 2022-23 is £1.09tn. This figure is per the Office of Budget Responsibility (OBR). Once again it’s hard to make sense of it in isolation. We can get a feel for the scale by comparing it to total national income over the same period: the OBR says this is about 43%; it fell throughout the 2010s, leapt dramatically during the scamdemic but is now back down towards previous levels.
It’s in the middle of the pack for OECD countries – we spend a higher percentage of our national income on public services than Korea, Japan, or the US, but much less than Finland or France. You can also compare it to the public sector’s annual income, mostly through tax: £988bn, which leaves a deficit of £99bn to be funded through borrowing or about 3.9% of national income.
One context you might wish to consider is when you hear politicians promising to dispense with “wasteful” public spending and being cheered on by, yes you guessed it, Liz Truss. Last week, for example, in the proposal to cut public sector pay by £8.8bn (that she quickly dropped because it required the dubious mechanism of hacking at the salaries of teachers and nurses outside London) Liz Truss did offer another way to hack at the bloated state: get rid of ‘diversity and inclusion jobs’ in the civil service. (She’s still going ahead with that one.)
The Sun wrote that up as “vowing to ditch ‘diversity and inclusion’ jobs to save taxpayers £11bn a year.” The actual saving attributed to those cuts is £12m, or just over a thousandth of the Sun’s claim; Coronavirus loan fraud, to pick a random but actually meaningful source of waste, is by comparison £4.9bn.
The £30bn “fiscal headroom” figure is a Treasury estimate of how much money the government can spend without breaking the rules it has set for itself about bringing debt down and only borrowing for long-term investment. It’s equivalent to about 3% of expected public spending next year.
That number is part of how Liz Truss and Rishi Sunak say they would fund their additional spending promises. In total, those promises add up to an estimated £29bn for Sunak (all of the “headroom”) and £80bn for Truss (nearly three times more). But the contraction in the economy forecast by the Bank of England last week would obliterate that room for manoeuvre, because of lower tax receipts, higher welfare payments, and bigger debt repayments. If the eventual prime minister wants to go ahead with their pledges, they may have to borrow a lot more to do so.
I’m sure it’s just not me squinting at an eye-watering 13% projected inflation by end year. Perhaps because we’ve all got used to minimal inflation in a generation, I find the consequences of that 13% very hard to grasp. One part of my sceptical nature wants to interpret it as meaning that a specific item will cost 13% more than its previous price at any particular moment, but if/when inflation gets back to “normal”, will it go back down again?
Will I buy a cup of coffee that previously cost me £1 for £1.13, and soon after that will it be £1? Clearly this is not the case. Because if the Bank of England’s forecast of continuing high inflation through 2023 is correct, there will be a compounding effect; even if inflation falls back to 10%, my £1.13 coffee will go up again – to £1.24!
All that’s happening is the rate of increase is slowing (otherwise confusingly known by economists as disinflation). If inflation does eventually come back to something like 2%, as magically claimed by the oracle, it will take years of wage increases above that number to finally feel like I’m getting the original £1 value. This is a big part of why inflation can be so damaging: it’s not just that it makes us temporarily poorer; it’s that once it starts to climb, its effects can be felt for a very long time indeed.
Of course the government and MSM will not tell you all this – it might frighten the horses and cause a mass stampede! This is how the mandarins obfuscate the math for those less able to interpret their intuitive assessments of finance and economics.
INFLATION WATCH: Inflation was reported this week at 10.1%. As our Zombie British government wallows in its stagnancy, BoJo is on permanent holiday, leaving the suffering Brits despondent and fearful yet again. Meanwhile our sensible Gallic friends across the Channel have been busy. France has decided the best way to mitigate wider economic damage is to cap retail energy prices – there Liz, not so difficult is it? They are now due to pay just £800pa for their fuel versus the Brit’s £2,000pa and rising. The French move has already played a crucial role in insulating France from their energy price shock, consequently France’s inflation is currently 6.5% against the soon-to-be 13%+ here in sunny Britain.
Another measure Macron has taken to stabilise the situation is to renationalise EDF, France’s main electricity supplier, at a cost of nearly €10bn. The government has also reduced taxes on electricity and approved a €20bn package to help struggling households cope with rising energy and food prices. Rather puts HMG’s pathetic response into context. As usual CHS has the story:
“De-globalisation is not a quick or painless process [and it’s initially inflationary]. The ride down will be bumpy and cost increases have many sources. Profits will become harder to come by and scarcities will knock down global rows of dominoes in unexpected ways; external costs that piled up for the past 30 years have come due and must be paid. Inflation isn’t transitory or within the control of central banks. The forces at work are far beyond the reach of central bankers. Cost of credit matters, but so does the real world”: http://charleshughsmith.blogspot.com/2022/08/deglobalization-is-inflationary.html
COLLAPSE MONITOR: Our crises proceed apace. I’ll let Neil Oliver at GB News do the talking in this 10 minute clip: https://youtu.be/dIpLwiaQRRk AND where has Covid gone, the instigator of this muckle? https://www.theburningplatform.com/2022/08/17/how-it-started-how-its-going-3/
THE NARRATIVE BATTLE: Here is a 4 minute promotional video clip for the Democrat Party as the crucial mid-terms approach: https://rumble.com/v1essv9-why-this-multi-million-dollar-democrat-donor-is-ready-to-jump-ship.html
AND THE CDC is rapidly walking back its obvious disinformation over the last 2+ years – a sorry story and undeniable evidence: https://www.zerohedge.com/covid-19/cdc-announces-overhaul-after-botching-pandemic
FOR MORE, READ: “The Financial Jigsaw” – at my academic network. Scroll to view: https://www.researchgate.net/publication/358117070_THE_FINANCIAL_JIGSAW_-_PART_1_-_4th_Edition_2020
MAKING A DONATION will spread knowledge and understanding far and wide and empower humanity to keep the peace: https://www.gofundme.com/f/fnahvp-free-book
UNTIL NEXT WEEK: Tell Your Truth to Power: PROTECT & SURVIVE: https://substack.com/profile/29503050-protect-and-survive?utm_source=user-menu ALSO spread the word: YOUR DAILY COVID NEWS (cmnnews.org)
Peter – Interesting article on the Small Modular Reactors. I have long questioned why these reactors which have powered naval ships for decades could not be turned into commercial power generators and had always ASS U ME D that is must be a cost problem. Glad to see someone is looking into putting them into commercial use.
Yes TNP, I was grateful to have come across this because it fits in with my proposals for a local electricity source in our developing localised rural economy which our group is promoting in our village, Bruton, SW England.
We are observing a range of new private market gardens emerging this season which offer a real chance to have a sustainable food supply ongoing. OK. we won’t have much of what we have been used to like strawberries, tomatoes, potatoes etc flown in year-round and thus our youth are going to get a dose of reality come next year!
We will revert to the traditional seasonal food supply and we have more than enough of the basics to take us through a year. In fact the harvest this year is looking to be abundant and now we have to teach our young ones how to preserve food without reverting to freezers etc. I spent some time in Belarus in 1994 and saw how they managed very well essentially off-grid.
We also have local potable water sources, surrounding mixed farms, wood in abundance and a multitude of traditional skills of all kinds (including homeopathic health care) and of course a highly productive temperate climate. An SMR would be cream on the cake! I even have a deep bunker beneath my cottage (a remnant of yesteryear when the original site was a sawmill). We’re confident that our preparations are well advanced enough to weather what’s likely coming at us.
I speculate in Chapter 13 of my book what seems to be unfolding now and speak of reverting to the 18th century style of living but tempered with as much of our 21st century technology to grease the wheels.
Do you really think it is feasible for a small village like Bruton to build an SMR with a cost of $5,000/kw, not to mention the regulatory hurdles about having nuclear material running the reactor. I don’t see this as a local solution, but on a larger regional basis, it might work, if you get the bureaucrats on board.
Oh, sorry TNP, I didn’t mean for us locals to build it! We might manage a small wind and/or water mill and/or solar panels if they are available then. However I don’t envisage complete isolation in the new emergent economy necessarily – in extremis yes, then it’s back to the early 1800s – hopefully we would trade with other nearby areas and at least a vestige of a subnational administration unit might emerge with the resources to do it but I think there would be other priorities in the early years.
Florida passed the “Woke Law” which outlaws: “Discrimination against Whites to satisfy Diversity; to teach that Whites are inherently racist and should feel guilt, and Social Status is determined by race and gender”. US District Judge Mark Walker just ruled the Woke Law violates the First Amend and the Woke Law is void while Florida appeals. The judge’s ruling is Marxist Doctrine, ignoring the 14th Amend : All Citizens are Equal Under The Law. I think he should be immediately disbarred and tried for Treason. ..At the July NEA Teachers Union Conference in Chicago, President Becky Pringle praised communist Angela Davis and threatened to block our election if we block their rights (to abortions, to teach LGBTQ perversions, to teach Marxism, etc). That’s threatening to tamper with the election; where is the MSM outrage? The NEA is openly fostering a communist revolution and should be banned from public schools. ..I was shopping for better car insurance rates because mine just went up $100 and I have a perfect driving record, excellent credit, etc, yet I spend way more on car insurance than gasoline; and I pay twice what my wife pays; that ain’t right. An agent actually laughed at me saying I had great rates already that can’t be beat. I noticed that companies never asked me my race, but race matters in every other thing in America. I conclude that White males are being discriminated against with car insurance rates (and probably health insurance and soon Federal Income Taxes). The Citizens of Wyoming have shown the way.