Credit deflation and the reflation cycle to come (part 3)

[Boon]

It would be extremely embarrassing for the Tories to vote a leader in and then do a vote of confidence 12 months later. Not that I can see it happening, even Boris had a period when he was solid. 

Sure the public are going to be pissed off with her, and odds-on there will be social unrest. But IMO she is enacting the policies that many in the party want. I think no MPs are gonna say it but what is the point of handing out loads of cash to people, if they aren't gonna vote for you anyway? 

I think the most likely outcome is Labour winning at the next GE but with a hung parliament it might be real difficult to bring much genuine change in.

 

[feed]

13 minutes ago, Boon said:

It would be extremely embarrassing for the Tories to vote a leader in and then do a vote of confidence 12 months later. Not that I can see it happening, even Boris had a period when he was solid. 

Sure the public are going to be pissed off with her, and odds-on there will be social unrest. But IMO she is enacting the policies that many in the party want. I think no MPs are gonna say it but what is the point of handing out loads of cash to people, if they aren't gonna vote for you anyway? 

I think the most likely outcome is Labour winning at the next GE but with a hung parliament it might be real difficult to bring much genuine change in.

 

and i don't see how anyone would want to be the third PM in one term a year ahead of an election when the government is so unpopular it needs a third PM. Unless Rishi really is that dumb.  If they do that, then they really want to lose. 

but frankly i can't see how anyone can predictions on the next GE now.  

We've the midterms and whatever shenanigans that brings along with a potential FED pivot, Xi's third term and Russia / Ukraine all playing out, over the next 3 to 6 months.  Those will impact the direction of British politics more than anything Truss does.  

[Sugarlips]

1 hour ago, Castlevania said:

I thought Perth house prices went crazy during the mining boom in the early parts of the last decade?

Indeed, it’s been volatile, the ensuing mining bust (circa 2014-2017) resulted in prices giving it all back and more.

[M S E Refugee]

46 minutes ago, baffledbyzirp said:

Along with domestic house prices, the resale market for luxury watches and handbags has also started to exhibits signs of atrophy with China at the heart of the current correction.

https://www.zerohedge.com/markets/boom-time-over-rolex-prices-crash-china

The premiums on some models offered by AP, Patek and Rolex were ridiculous creating enormous FOMO and huge demand at Authorised Dealerships. In some cases the price differential between AD and Grey Market Dealers was tenfold. 

In World War II and the October Revolution people were prepared to exchange wrist watches, Faberge trinkets and gold jewellery for safe passage or food. In China it seems that the confidence of the population, expressed via tasteless displays of conspicuous consumption, are ending abruptly. Money shouts while wealth whispers. Are we descending Lazlo's pyramid of needs? If so the gaudy crap that motivates virtually all the contributors to Instagram will represent insanity in coming years.

 

 

I sold all my Rolex and Tudor Watches a few months ago, thanks to this thread I could see what was coming.

The proceeds have been converted to Silver although the Watch habit is difficult to break so I bought a 9 carat gold Nivada Watch from the 1960's for £146 at auction.

The Gold case will probably be worth more than what I paid.

[Sugarlips]

2 minutes ago, M S E Refugee said:

I sold all my Rolex and Tudor Watches a few months ago, thanks to this thread I could see what was coming.

The proceeds have been converted to Silver although the Watch habit is difficult of  break so I bought a 9 carat gold Nivada Watch from the 1960's for £146 at auction.

The Gold case will probably be worth more than what I paid.

I can see panic sales of camper vans and convertible cars this autumn/winter, looking forward to finding a bargain or 2

[RJT1979]

 

 

 

[M S E Refugee]

I have decided to become a shipping magnate this week and I am buying NVG, Dorian LPG, ZIM,DHT and Frontline, the Tanker Stocks are as bonkers as Junior Miners and pay insane dividends when things are going well.

https://www.nasdaq.com/market-activity/stocks/lpg/dividend-history

https://www.nasdaq.com/market-activity/stocks/zim/dividend-history

[onlyme]

33 minutes ago, Sugarlips said:

I can see panic sales of camper vans and convertible cars this autumn/winter, looking forward to finding a bargain or 2

We sold a convertible and bought a van instead, flexibility for work in hard times is more important at the moment. Only a cheapy though.

[honkydonkey]

38 minutes ago, Sugarlips said:

I can see panic sales of camper vans and convertible cars this autumn/winter, looking forward to finding a bargain or 2

Houses will be empty and people living in the warm vans on the drive. 

[JMD]

1 hour ago, M S E Refugee said:

I have decided to become a shipping magnate this week and I am buying NVG, Dorian LPG, ZIM,DHT and Frontline, the Tanker Stocks are as bonkers as Junior Miners and pay insane dividends when things are going well.

https://www.nasdaq.com/market-activity/stocks/lpg/dividend-history

https://www.nasdaq.com/market-activity/stocks/zim/dividend-history

Don't forget the oil refiners?

I'm specifically looking at the US refiners, 45 years since last one built there apparently. Plus if European energy costs remain high compared to the far lower US energy input costs for their own industrial sector, surely must result in massive competitive advantage. 

 

Ref the above energy costs. I'm actually wondering, and concerned investment wise, how companies like BASF and Evonik will successfully sell their products internationally and competitively. Domestically, Germany will I guess support. But longer term - will it result in a panic 'Fortress Europe' economic model?

 @DurhamBornsaid recently that he was buying Evonik, I wonder if he has thoughts about the increased energy costs for Europe/EU industry in general?

[Pip321]

1 hour ago, Sugarlips said:

I can see panic sales of camper vans and convertible cars this autumn/winter, looking forward to finding a bargain or 2

I agree. I actually think there could be a really good period in the future to get something worth having and keeping. 

There are still some people for whom the cost last year was only relatively modest v’s their wealth (fair enough…it’s their whim and money) but for some it’s been a moment of madness they couldn’t afford.

I have seen a new VW bought for £45k by a neighbour who then paid to have it kitted out for £25k by a local specialist firm. They know I like old VW campers so told me….and I honestly thought they were joking.You could get a 1960’s samba for that and a samba is like rocking horse shite and appreciate. When did £70k become acceptable for a depreciating camper that gets used 3 times a year. 

I like old VW’s but haven’t been swayed enough of having the hassle of owning one because we like a variety of holidays.

Last year we rented a rough 1972 Bay for a few hundred pound and used it in Devon and Cornwall whilst staying with my sister and then a Travelodge. Massive fun, great holiday adventure but awful to drive (no third gear) and completely happy to hand it back after a week and drive home in a proper car.

Rather than buy a crap cheap one I will probably try get a renovated VW bay which someone has spent £30k on…and my ‘ladder price’ will be £12k.😆

[Axeman123]

11 minutes ago, JMD said:

Ref the above energy costs. I'm actually wondering/worried how companies like BASF and Evonik can successfully sell their products internationally/competitively. Domestically, Germany will support them I guess. But longer term - will it result in a panic 'Fortress Europe' economic model?

I just don't see the current energy prices as sustainable, and only Russia can provide releif. Sooner or later the EU is going to have to make some kind of dirty deal and pivot to a more ambiguous alignment IMO, akin to Turkey. There are no other alternatives for the decade ahead. LNG? nowhere near the capacity, long lead-times to add more. SMRs? lead-time. A return to medieval living standards? Le Penn et al will rise.

Don't get me wrong, the EU will never openly align with BRICS or renounce its NATO alignment. I would however expect to see strategic relaxation and non-enforcement of sanctions in tandem with the same old rhatoric. Watch what they do and ignore what they say. We are already seeing this with the pipeline turbine etc.

[M S E Refugee]

2 minutes ago, Axeman123 said:

I just don't see the current energy prices as sustainable, and only Russia can provide releif. Sooner or later the EU is going to have to make some kind of dirty deal and pivot to a more ambiguous alignment IMO, akin to Turkey. There are no other alternatives for the decade ahead. LNG? nowhere near the capacity, long lead-times to add more. SMRs? lead-time. A return to medieval living standards? Le Penn et al will rise.

Don't get me wrong, the EU will never openly align with BRICS or renounce its NATO alignment. I would however expect to see strategic relaxation and non-enforcement of sanctions in tandem with the same old rhatoric. Watch what they do and ignore what they say. We are already seeing this with the pipeline turbine etc.

Have you not been outside today?

We don't need Putin's energy look how much Solar Power we are producing.

♫ Who do think you think you are kidding Mr Putler♫

[Barnsey]

14 minutes ago, Axeman123 said:

I just don't see the current energy prices as sustainable, and only Russia can provide releif. Sooner or later the EU is going to have to make some kind of dirty deal and pivot to a more ambiguous alignment IMO, akin to Turkey. There are no other alternatives for the decade ahead. LNG? nowhere near the capacity, long lead-times to add more. SMRs? lead-time. A return to medieval living standards? Le Penn et al will rise.

Don't get me wrong, the EU will never openly align with BRICS or renounce its NATO alignment. I would however expect to see strategic relaxation and non-enforcement of sanctions in tandem with the same old rhatoric. Watch what they do and ignore what they say. We are already seeing this with the pipeline turbine etc.

Good article from  Ambrose Evans Pritchard

https://www.telegraph.co.uk/business/2022/08/12/next-pm-should-not-bounced-stupid-energy-policies-mood-near/

AMBROSE EVANS-PRITCHARD
12 August 2022 • 6:00am
Ambrose Evans-Pritchard
Liz Truss Rishi Sunak Energy Crisis Prime Minister

Before we whip the whole nation into demented agitation over energy costs, let us remember that the shock forecasts for this winter may never happen.

Whether or not the UK’s energy price cap rises to vertiginous peaks next April depends on global gas prices, and that in turn depends on the evolution of the war in Ukraine, the calculations of Russia’s ruling oligarchy, the state of the world economy, China’s next construction bubble and the intensity of Asian gas purchases.

It depends on drought in Norway, which usually acts as Europe’s hydro-battery. It depends on whether there is a third La Nina this year and how much that forces South America to import liquefied natural gas (LNG) to replace lost hydro.

If you can juggle these variables and come up with a prediction of £4,426 in April, or £5,038 according to Auxilione, you ought to be running a hedge fund.

What energy analysts such as Cornwall Insight have done is a legitimate exercise. But they are essentially calculating costs based on futures contracts months ahead, which currently reflect extreme fear and a global scramble to secure supply. Time-lags in LNG shipments guarantee that October will be bad. Our fate in January and April is anything but foreordained.

The market has already priced in a total cut-off of Russian gas, and added a big uncertainty premium. With a little imagination you can discern a scenario where prices fall. Russia may lose the war in Ukraine before we reach winter. Gen Ben Hodges, ex-commander of US forces in Europe, says there are already signs of “an impending collapse of Russian forces”.

The Pentagon thinks Vladimir Putin has lost 80,000 troops. He is having to reactivate armoured troop carriers from the 1950s. Aeroflot jets are being cannibalised for parts. Russian troops are scavenging fridges and washing machines for semiconductor chips to keep the war machine going.

Gen Hodges said the Russians are no longer able to secure ammo dumps, airfields and communications. “Russia’s logistics system is exhausted. This could be over by the end of the year,” he said.

Let us assume that this proves too optimistic, that the war freezes along today’s battlefield lines, and that Putin cuts off the remaining gas in October to try to force a settlement on his terms. Will the price of gas spiral into the stratosphere? No, it will not.

The world will lose a further 1pc of total global supply (4,100bcm). This loss can be absorbed in the same way that it has already absorbed larger losses hitherto, by spreading the hit far and wide through the fungible market for liquefied natural gas.

Spot LNG prices in Asia have risen in near lockstep with European prices of $53 per MMBtu – eight times normal levels – as China, Japan and Korea rush to lock up cargoes and fill winter storage.

This price signal has led to coal-switching in power plants across Asia, wherever viable; and to demand destruction, where not. Pakistan has been facing 10-hour blackouts. Chinese provinces have been restricting power since early August as part of an “orderly” energy strategy, otherwise known as rationing.

Once countries have reached “safe” storage levels, this frantic competition will abate. Berenberg Bank says EU gas storage is currently above seasonal levels and on track to exceed its 80pc target by late October. Germany may come close to 95pc, as the lights go out at night on the Reichstag and heating drops two degrees in swimming pools.

Japan’s Fumio Kishida is firing up nine nuclear reactors in time for winter. That will cover 10pc of Japan’s electricity, freeing up 4bcm of gas supply.

Little by little, collective global action is plugging the Russia gap. Once we get over the hump of panic buying there is no longer a fundamental mismatch of global supply and demand. Furthermore, the International Monetary Fund expects a severe global downturn, a killer for commodities.

At the risk of sticking my neck out, gas prices might well be significantly lower in January than today, whatever Putin does. Obviously, we still need to reopen the Rough storage site and secure future deliveries of LNG before others beat us to it, but this is being done belatedly to varying degrees.

The problem with the worst-case forecasts now dominating Britain’s political debate is that they encourage a bidding war of extreme proposals. Agitators with an agenda are trying to bounce the next prime minister into rushed action and statist remedies. Fears are fuelling labour conflict. They are feeding the Kulturkampf.

The Liberal Democrats’ Sir Ed Davey has launched a scapegoat campaign against “energy bosses”, more or less inviting people to join the Don’t Pay UK campaign.

He wants an even “tougher windfall tax” on energy companies – another one – to help fund the total cancellation of October’s energy price rise. This implies that rich families in large houses will enjoy a subsidy so they can continue wasting energy, paid for by a raid on productive companies and a regressive cross-transfer from poorer families with a lower energy footprint.

The plan is destructive on multiple levels. We need Shell and BP to ensure a domestic supply of gas from North Sea fields, which have a better CO2 and methane profile than imported LNG. It is not easy to attract investment to these high-cost fields. 

There was already a corporation tax surcharge for drillers before the Russia crisis. They have since been hit by a further 25pc levy under Rishi Sunak, but with relief if they rotate profits into new projects. The Liberal Democrat policy would amount to confiscatory taxation. It would tell the world that the UK is uninvestable.

The plan targets two of the companies spearheading the UK’s ambitions for hydrogen, energy storage, carbon capture, and renewables, and which have the engineering skills to pull it off.

Gordon Brown is wiser, but goes a step further in one respect, proposing temporary nationalisation of energy companies along the lines of the bank bailout during the global financial crisis.

Now, Brown did a sterling job at the G20 in March 2009, corralling the world into a giant rescue for the disintegrating financial system. He (and Barack Obama) did in fact “save the world”. But the energy system is not disintegrating.

He is certainly right that time and tide waits for no one, and that crises do not hang fire politely to suit the convenience of Tory balloting. The Government has been slow to wake up to the energy threat. It should have grasped the nettle months ago, arguably purchasing gas futures contracts as an option on winter deliveries.

Liz Truss needs to be more alert to the pre-insurrectional mood. She must be careful not to let her idée fixe on tax cuts obscure the blindingly obvious need for direct action to alleviate energy poverty. There must be subsidies and they should be borne by the state as a war-time emergency measure, not by facile stunts. They should be targeted only on the nation’s less-affluent half.

But nor should Truss be rushed into ill-advised policies by media noise, self-appointed prophets, or political foes with itchy statist reflexes. There is at least a 50:50 chance that the nightmare will not happen after all.

[Ash4781b]

13 hours ago, Bus Stop Boxer said:

$740 Billion "Inflation Reduction Bill" has just passed in the house.

Ho fucking ho.

Is this a follow on from the build back better thing? 

[M S E Refugee]

7 minutes ago, Barnsey said:

Good article from  Ambrose Evans Pritchard

https://www.telegraph.co.uk/business/2022/08/12/next-pm-should-not-bounced-stupid-energy-policies-mood-near/

AMBROSE EVANS-PRITCHARD
12 August 2022 • 6:00am
Ambrose Evans-Pritchard
Liz Truss Rishi Sunak Energy Crisis Prime Minister

Before we whip the whole nation into demented agitation over energy costs, let us remember that the shock forecasts for this winter may never happen.

Whether or not the UK’s energy price cap rises to vertiginous peaks next April depends on global gas prices, and that in turn depends on the evolution of the war in Ukraine, the calculations of Russia’s ruling oligarchy, the state of the world economy, China’s next construction bubble and the intensity of Asian gas purchases.

It depends on drought in Norway, which usually acts as Europe’s hydro-battery. It depends on whether there is a third La Nina this year and how much that forces South America to import liquefied natural gas (LNG) to replace lost hydro.

If you can juggle these variables and come up with a prediction of £4,426 in April, or £5,038 according to Auxilione, you ought to be running a hedge fund.

What energy analysts such as Cornwall Insight have done is a legitimate exercise. But they are essentially calculating costs based on futures contracts months ahead, which currently reflect extreme fear and a global scramble to secure supply. Time-lags in LNG shipments guarantee that October will be bad. Our fate in January and April is anything but foreordained.

The market has already priced in a total cut-off of Russian gas, and added a big uncertainty premium. With a little imagination you can discern a scenario where prices fall. Russia may lose the war in Ukraine before we reach winter. Gen Ben Hodges, ex-commander of US forces in Europe, says there are already signs of “an impending collapse of Russian forces”.

The Pentagon thinks Vladimir Putin has lost 80,000 troops. He is having to reactivate armoured troop carriers from the 1950s. Aeroflot jets are being cannibalised for parts. Russian troops are scavenging fridges and washing machines for semiconductor chips to keep the war machine going.

Gen Hodges said the Russians are no longer able to secure ammo dumps, airfields and communications. “Russia’s logistics system is exhausted. This could be over by the end of the year,” he said.

Let us assume that this proves too optimistic, that the war freezes along today’s battlefield lines, and that Putin cuts off the remaining gas in October to try to force a settlement on his terms. Will the price of gas spiral into the stratosphere? No, it will not.

The world will lose a further 1pc of total global supply (4,100bcm). This loss can be absorbed in the same way that it has already absorbed larger losses hitherto, by spreading the hit far and wide through the fungible market for liquefied natural gas.

Spot LNG prices in Asia have risen in near lockstep with European prices of $53 per MMBtu – eight times normal levels – as China, Japan and Korea rush to lock up cargoes and fill winter storage.

This price signal has led to coal-switching in power plants across Asia, wherever viable; and to demand destruction, where not. Pakistan has been facing 10-hour blackouts. Chinese provinces have been restricting power since early August as part of an “orderly” energy strategy, otherwise known as rationing.

Once countries have reached “safe” storage levels, this frantic competition will abate. Berenberg Bank says EU gas storage is currently above seasonal levels and on track to exceed its 80pc target by late October. Germany may come close to 95pc, as the lights go out at night on the Reichstag and heating drops two degrees in swimming pools.

Japan’s Fumio Kishida is firing up nine nuclear reactors in time for winter. That will cover 10pc of Japan’s electricity, freeing up 4bcm of gas supply.

Little by little, collective global action is plugging the Russia gap. Once we get over the hump of panic buying there is no longer a fundamental mismatch of global supply and demand. Furthermore, the International Monetary Fund expects a severe global downturn, a killer for commodities.

At the risk of sticking my neck out, gas prices might well be significantly lower in January than today, whatever Putin does. Obviously, we still need to reopen the Rough storage site and secure future deliveries of LNG before others beat us to it, but this is being done belatedly to varying degrees.

The problem with the worst-case forecasts now dominating Britain’s political debate is that they encourage a bidding war of extreme proposals. Agitators with an agenda are trying to bounce the next prime minister into rushed action and statist remedies. Fears are fuelling labour conflict. They are feeding the Kulturkampf.

The Liberal Democrats’ Sir Ed Davey has launched a scapegoat campaign against “energy bosses”, more or less inviting people to join the Don’t Pay UK campaign.

He wants an even “tougher windfall tax” on energy companies – another one – to help fund the total cancellation of October’s energy price rise. This implies that rich families in large houses will enjoy a subsidy so they can continue wasting energy, paid for by a raid on productive companies and a regressive cross-transfer from poorer families with a lower energy footprint.

The plan is destructive on multiple levels. We need Shell and BP to ensure a domestic supply of gas from North Sea fields, which have a better CO2 and methane profile than imported LNG. It is not easy to attract investment to these high-cost fields. 

There was already a corporation tax surcharge for drillers before the Russia crisis. They have since been hit by a further 25pc levy under Rishi Sunak, but with relief if they rotate profits into new projects. The Liberal Democrat policy would amount to confiscatory taxation. It would tell the world that the UK is uninvestable.

The plan targets two of the companies spearheading the UK’s ambitions for hydrogen, energy storage, carbon capture, and renewables, and which have the engineering skills to pull it off.

Gordon Brown is wiser, but goes a step further in one respect, proposing temporary nationalisation of energy companies along the lines of the bank bailout during the global financial crisis.

Now, Brown did a sterling job at the G20 in March 2009, corralling the world into a giant rescue for the disintegrating financial system. He (and Barack Obama) did in fact “save the world”. But the energy system is not disintegrating.

He is certainly right that time and tide waits for no one, and that crises do not hang fire politely to suit the convenience of Tory balloting. The Government has been slow to wake up to the energy threat. It should have grasped the nettle months ago, arguably purchasing gas futures contracts as an option on winter deliveries.

Liz Truss needs to be more alert to the pre-insurrectional mood. She must be careful not to let her idée fixe on tax cuts obscure the blindingly obvious need for direct action to alleviate energy poverty. There must be subsidies and they should be borne by the state as a war-time emergency measure, not by facile stunts. They should be targeted only on the nation’s less-affluent half.

But nor should Truss be rushed into ill-advised policies by media noise, self-appointed prophets, or political foes with itchy statist reflexes. There is at least a 50:50 chance that the nightmare will not happen after all.

I think there is much Hopium in that article, I really can't see Russian Forces collapsing.

Not sure if this bit is true but the West has a peculiar habit of mirroring as the Russians call it.

The Pentagon thinks Vladimir Putin has lost 80,000 troops. He is having to reactivate armoured troop carriers from the 1950s. Aeroflot jets are being cannibalised for parts. Russian troops are scavenging fridges and washing machines for semiconductor chips to keep the war machine going.

[CannonFodder]

11 minutes ago, Barnsey said:

Good article from  Ambrose Evans Pritchard

https://www.telegraph.co.uk/business/2022/08/12/next-pm-should-not-bounced-stupid-energy-policies-mood-near/

AMBROSE EVANS-PRITCHARD
12 August 2022 • 6:00am
Ambrose Evans-Pritchard
Liz Truss Rishi Sunak Energy Crisis Prime Minister

Before we whip the whole nation into demented agitation over energy costs, let us remember that the shock forecasts for this winter may never happen.

Whether or not the UK’s energy price cap rises to vertiginous peaks next April depends on global gas prices, and that in turn depends on the evolution of the war in Ukraine, the calculations of Russia’s ruling oligarchy, the state of the world economy, China’s next construction bubble and the intensity of Asian gas purchases.

It depends on drought in Norway, which usually acts as Europe’s hydro-battery. It depends on whether there is a third La Nina this year and how much that forces South America to import liquefied natural gas (LNG) to replace lost hydro.

If you can juggle these variables and come up with a prediction of £4,426 in April, or £5,038 according to Auxilione, you ought to be running a hedge fund.

What energy analysts such as Cornwall Insight have done is a legitimate exercise. But they are essentially calculating costs based on futures contracts months ahead, which currently reflect extreme fear and a global scramble to secure supply. Time-lags in LNG shipments guarantee that October will be bad. Our fate in January and April is anything but foreordained.

The market has already priced in a total cut-off of Russian gas, and added a big uncertainty premium. With a little imagination you can discern a scenario where prices fall. Russia may lose the war in Ukraine before we reach winter. Gen Ben Hodges, ex-commander of US forces in Europe, says there are already signs of “an impending collapse of Russian forces”.

The Pentagon thinks Vladimir Putin has lost 80,000 troops. He is having to reactivate armoured troop carriers from the 1950s. Aeroflot jets are being cannibalised for parts. Russian troops are scavenging fridges and washing machines for semiconductor chips to keep the war machine going.

Gen Hodges said the Russians are no longer able to secure ammo dumps, airfields and communications. “Russia’s logistics system is exhausted. This could be over by the end of the year,” he said.

Let us assume that this proves too optimistic, that the war freezes along today’s battlefield lines, and that Putin cuts off the remaining gas in October to try to force a settlement on his terms. Will the price of gas spiral into the stratosphere? No, it will not.

The world will lose a further 1pc of total global supply (4,100bcm). This loss can be absorbed in the same way that it has already absorbed larger losses hitherto, by spreading the hit far and wide through the fungible market for liquefied natural gas.

Spot LNG prices in Asia have risen in near lockstep with European prices of $53 per MMBtu – eight times normal levels – as China, Japan and Korea rush to lock up cargoes and fill winter storage.

This price signal has led to coal-switching in power plants across Asia, wherever viable; and to demand destruction, where not. Pakistan has been facing 10-hour blackouts. Chinese provinces have been restricting power since early August as part of an “orderly” energy strategy, otherwise known as rationing.

Once countries have reached “safe” storage levels, this frantic competition will abate. Berenberg Bank says EU gas storage is currently above seasonal levels and on track to exceed its 80pc target by late October. Germany may come close to 95pc, as the lights go out at night on the Reichstag and heating drops two degrees in swimming pools.

Japan’s Fumio Kishida is firing up nine nuclear reactors in time for winter. That will cover 10pc of Japan’s electricity, freeing up 4bcm of gas supply.

Little by little, collective global action is plugging the Russia gap. Once we get over the hump of panic buying there is no longer a fundamental mismatch of global supply and demand. Furthermore, the International Monetary Fund expects a severe global downturn, a killer for commodities.

At the risk of sticking my neck out, gas prices might well be significantly lower in January than today, whatever Putin does. Obviously, we still need to reopen the Rough storage site and secure future deliveries of LNG before others beat us to it, but this is being done belatedly to varying degrees.

The problem with the worst-case forecasts now dominating Britain’s political debate is that they encourage a bidding war of extreme proposals. Agitators with an agenda are trying to bounce the next prime minister into rushed action and statist remedies. Fears are fuelling labour conflict. They are feeding the Kulturkampf.

The Liberal Democrats’ Sir Ed Davey has launched a scapegoat campaign against “energy bosses”, more or less inviting people to join the Don’t Pay UK campaign.

He wants an even “tougher windfall tax” on energy companies – another one – to help fund the total cancellation of October’s energy price rise. This implies that rich families in large houses will enjoy a subsidy so they can continue wasting energy, paid for by a raid on productive companies and a regressive cross-transfer from poorer families with a lower energy footprint.

The plan is destructive on multiple levels. We need Shell and BP to ensure a domestic supply of gas from North Sea fields, which have a better CO2 and methane profile than imported LNG. It is not easy to attract investment to these high-cost fields. 

There was already a corporation tax surcharge for drillers before the Russia crisis. They have since been hit by a further 25pc levy under Rishi Sunak, but with relief if they rotate profits into new projects. The Liberal Democrat policy would amount to confiscatory taxation. It would tell the world that the UK is uninvestable.

The plan targets two of the companies spearheading the UK’s ambitions for hydrogen, energy storage, carbon capture, and renewables, and which have the engineering skills to pull it off.

Gordon Brown is wiser, but goes a step further in one respect, proposing temporary nationalisation of energy companies along the lines of the bank bailout during the global financial crisis.

Now, Brown did a sterling job at the G20 in March 2009, corralling the world into a giant rescue for the disintegrating financial system. He (and Barack Obama) did in fact “save the world”. But the energy system is not disintegrating.

He is certainly right that time and tide waits for no one, and that crises do not hang fire politely to suit the convenience of Tory balloting. The Government has been slow to wake up to the energy threat. It should have grasped the nettle months ago, arguably purchasing gas futures contracts as an option on winter deliveries.

Liz Truss needs to be more alert to the pre-insurrectional mood. She must be careful not to let her idée fixe on tax cuts obscure the blindingly obvious need for direct action to alleviate energy poverty. There must be subsidies and they should be borne by the state as a war-time emergency measure, not by facile stunts. They should be targeted only on the nation’s less-affluent half.

But nor should Truss be rushed into ill-advised policies by media noise, self-appointed prophets, or political foes with itchy statist reflexes. There is at least a 50:50 chance that the nightmare will not happen after all.

There is so much wrong with that - in terms of assumptions and bad information

Lets start with the assimption that enough there are enough tanker ships to transport LPG half way across the world

Then the assumption that india wont use more gas per head

Then the assumption gas fields dont decline

Then the assumptions that Russia is losing cos the west says it is.

[CannonFodder]

20 minutes ago, M S E Refugee said:

I think there is much Hopium in that article, I really can't see Russian Forces collapsing.

Not sure if this bit is true but the West has a peculiar habit of mirroring as the Russians call it.

The Pentagon thinks Vladimir Putin has lost 80,000 troops. He is having to reactivate armoured troop carriers from the 1950s. Aeroflot jets are being cannibalised for parts. Russian troops are scavenging fridges and washing machines for semiconductor chips to keep the war machine going.

Indeed any army that can make hypersonic missiles from washing machines and fridges would be unstoppable

[Axeman123]

21 minutes ago, Barnsey said:

Good article from  Ambrose Evans Pritchard

1) like @M S E Refugee I can't see RF forces collapsing. I think it is more likely that the west pulls the plug on Ukrainian ones, and the narrative shift around using civilians as human shields is already underway to facilitate that. In fairness to AEP his point was about hostilities ending and the impact on gas prices, and bringing the controversial issue of how into it would just muddy the waters.

2) His point about forecasts from futures was really well put. These estimates have been widely bandied about as gospel in the media without any context of how they are derived or how credible they are.

[Errol]

26 minutes ago, M S E Refugee said:

I think there is much Hopium in that article, I really can't see Russian Forces collapsing.

Not sure if this bit is true but the West has a peculiar habit of mirroring as the Russians call it.

The Pentagon thinks Vladimir Putin has lost 80,000 troops. He is having to reactivate armoured troop carriers from the 1950s. Aeroflot jets are being cannibalised for parts. Russian troops are scavenging fridges and washing machines for semiconductor chips to keep the war machine going.

Just Western nonsense. As Putin said, Russia hasn't really started yet. They are estimated to be only using 10% or lower of their army and equipment. They are barely using their airforce, or much of their cutting edge tech (like the electronic jamming which they don't want to deploy as they are saving it for War against Nato etc).

Most of the fighting is being done by the 120,000 ukrainian forces of DNR/LPR, with Russian support in minority. It's more of a civil war than anything else.

Ukrainian dead/MIA are near to 200,000 now. By refusing to surrender, Zelensky is simply sending his men to the slaughter. The Russians/DPR/LPR will carry on at their own pace and kill them all if necessary. 

Zelensky is clearly hopelessly out of his depth.

[Axeman123]

27 minutes ago, M S E Refugee said:

armoured troop carriers from the 1950s.

It just shows how captured by the MIC our governments are, that the above is seen as a diss. Putin is getting it done with the lowest tier kit needed, and probably glad to clear out some crap from inventory in the process. The fact he is winning while doing so is neatly glossed over, showing that the real goal of western war is to destroy the highest priced inventory possible.

[Lightly Toasted]

7 minutes ago, Axeman123 said:

It just shows how captured by the MIC our governments are, that the above is seen as a diss. Putin is getting it done with the lowest tier kit needed, and probably glad to clear out some crap from inventory in the process. The fact he is winning while doing so is neatly glossed over, showing that the real goal of western war is to destroy the highest priced inventory possible.

It's a reflection of Western values: shiny and expensive = the best choice.

"An engineer is a man who can do for sixpence, what any fool can do for a shilling."

[harp]

3 hours ago, Sugarlips said:

I can see panic sales of camper vans and convertible cars this autumn/winter, looking forward to finding a bargain or 2

I bought a VW transporter t6 camper in  early last year. Paid £43k for it. I sold 1 bitcoin which cost me £3k. Sold my car for £5k. So it basically cost me nothing! I been on loads of  camping trips and will never sell it. I consider it my escape pod if the shit hits the fan. 

[Bobthebuilder]

33 minutes ago, harp said:

I bought a VW transporter t6 camper in  early last year. Paid £43k for it. I sold 1 bitcoin which cost me £3k. Sold my car for £5k. So it basically cost me nothing! I been on loads of  camping trips and will never sell it. I consider it my escape pod if the shit hits the fan. 

Personally, I would have invested the £43k and used the divis to go on holiday.

I have had a couple of transporters and a caddy over the last decade or , for business use. No end of trouble with them IME, Diesel gate compensation was the only bonus really. I do hope they have got more reliable now.

(I am becoming obsessed with divis).

[Funn3r]

50 minutes ago, CannonFodder said:

Indeed any army that can make hypersonic missiles from washing machines and fridges would be unstoppable

Warning apocryphal story, veracity unknown:

During the Yugoslav war microwave ovens were found to be perfect for air defence. Get an old microwave, remove the door and short-circuit the safety cut-off. Then put doorless microwave on ground pointing at sky and switch on. Exactly simulated primitive ex-Soviet air defence radar. Voila, fighter pilot gets alarm that he is being lit up by enemy and buggers off.