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

[Harley]

3 hours ago, marceau said:

More likely we won't recover from it at all. People aren't robots. They're not interchangable, reprogrammable or unemotional. For some reason the govt seems to think they are and just a few changes to a policy or process can get things back on track. They're very, very wrong.

Imo this is the real killer we face further down the line. A govt in trouble, falling back to pull on old forgotten levers, and finding they no longer work. You can't make a large UK city do the things it could do during the 1970s, let alone WW2, the people there are different now. It'll be the same with reshoring, infrastructure renewal etc. For all our millions in population growth there just isn't enough human clay.

This a beautiful study of systems theory.  How relationships are not linear all the way.  The J curve is a simplistic one dimensional example.  Things may or may not work a certain way within certain bounds.  Go outside of those and it's a new world.  Ask a chemist, engineer, or physicist!

[Harley]

We rightly moan about polos but just to stress, our ever present civil service has been working to the mantra of "managed decline" for decades.

[Starsend]

7 minutes ago, sancho panza said:

This week, an internal memo from the Royal Albert Edward Infirmary in Wigan, leaked to the Health Service Journal, warned it was becoming “increasingly common” for patients to die in A&E as they waited for treatment.

 

We are fast becoming a third world shithole. Shocking.

[feed]

Increased productivity would have increased deflation.  

The actions taken post GFC make sense if the fear of a deflationary collapse (real or imaginary) shaped everything.  

I suspect very few in the political class understood what is was they were doing or why they were doing it and now mostly fail to grasp the transition to inflation.  But I keep coming back to the decline in velocity.

GDP maybe a fantasy, but money supply and velocity aren’t.  And i don't think they really had all that much choice.  

But how do we get out of that trap, when the people that implemented it, no longer understand why they did it.    
 

 

 

 

[BWW]

17 hours ago, M S E Refugee said:

I got my Polish Passport the other Monday but the only sensible Country in Europe is Hungary.

I've not lost hope on the UK, hopefully we will see some Bulldog spirit once people have empty stomachs and are freezing.

I bet many more people know about the WEF than they did 18 months ago.

houses are very cheap in rural hungary. do you get a passport there witha sensible sized investment in sharez or a business without getting reamed on taxes?

purebloods allwed?

[Sasquatch]

1 hour ago, marceau said:

More likely we won't recover from it at all. People aren't robots. They're not interchangable, reprogrammable or unemotional. For some reason the govt seems to think they are and just a few changes to a policy or process can get things back on track. They're very, very wrong.

Imo this is the real killer we face further down the line. A govt in trouble, falling back to pull on old forgotten levers, and finding they no longer work. You can't make a large UK city do the things it could do during the 1970s, let alone WW2, the people there are different now. It'll be the same with reshoring, infrastructure renewal etc. For all our millions in population growth there just isn't enough human clay.

Agree totally.

Was speaking to my mum yesterday evening. She's nearly 80 now and remembers the post WW2 war rationing. She reckons that people will get used to losing all of the niceties in life and will have to put on extra jumper to keep warm etc. 

She might be right but people will be forced to do this against their will and won't be happy about it. They will look for someone to blame. That can only be the government and any future government promising the fix the problem will also fail. Rinse and repeat until we are in V for Vendetta territory.

I'm genuinely concerned with the direction of travel.

[Chewing Grass]

1 minute ago, Sasquatch said:

Agree totally.

Was speaking to my mum yesterday evening. She's nearly 80 now and remembers the post WW2 war rationing. She reckons that people will get used to losing all of the niceties in life and will have to put on extra jumper to keep warm etc. 

She might be right but people will be forced to do this against their will and won't be happy about it. They will look for someone to blame. That can only be the government and any future government promising the fix the problem will also fail. Rinse and repeat until we are in V for Vendetta territory.

I'm genuinely concerned with the direction of travel.

Working people had never in the main experienced car ownership or the delights of going somewhere abroad prior to WW2 and even the 1950s so the simple folk won't be happy.

[sancho panza]

1 hour ago, feed said:

Clock is ticking. 

Berlin should negotiate gas with Russia to secure supply - official

https://breakingthenews.net/Article/Berlin-should-negotiate-gas-with-Russia-to-secure-supply-official/58469233

Bundestag Chairman of the Committee on Climate Protection and Energy Klaus Ernst (pictured) underscored on Friday that it is "wise" for Germany to negotiate with Russia to secure the country's gas supply which would effectively lower the prices.

"Leading politicians in the ruling parties also join my position," stressed Ernst on his Twitter account, adding that such a shift toward Berlin-Moscow dialogue would also enable the nation to avoid the effects of its own sanctions against Russia.

German Chancellor Olaf Scholz earlier said that the federal government plans to temporarily lower the sales tax on gas to 7% for its consumers, while the country prepares to connect liquefied natural gas (LNG) floating terminals in Wilhelmshaven and Brunsbuettel to the gas network.

Looks like the EU's prinicpled support for the Ukraine is wavering in the face of Germans having to take cold showers this winter.

Dirty deal inbound.Liz Truss to call back the Brits she encouraged to go to the Ukraine because it's not an act of terror if she agress with you etc etc.

Zelensky better check his stash of lube.

https://www.telegraph.co.uk/news/2022/08/17/ukraine-has-three-months-prevent-winter-betrayal/

But it is in Europe that winter will have the greatest strategic effect on the war, and Ukraine is more likely to be the loser. As European media increasingly grow bored of a freezing landscape without much fighting to report, the spotlight will be more and more on hardship at home, with the economic crisis intensified by Putin’s conflict biting ever deeper.

Russia reduced gas supplies to Europe by 60% in June. Countries are weighing how to minimise economic damage to their already crippled economies as winter approaches, including by significantly reducing gas consumption among domestic consumers for which one of the few realistic options is an even steeper price hike. The widespread discontent among voters that follows will focus politicians’ minds and force them to reconsider their already wavering commitment to Ukraine and especially the strict sanctions against Russia which have proven not to have the hoped-for effect on restraining Putin’s aggression.

Putin knows how to ratchet up the pressure until European countries succumb, including by ordering a total energy shut-off. With this threat hanging over their heads, he will dangle a ceasefire at the G20 summit in November, saying that peace can come if he holds onto the Donbas, Crimea and the territory he has captured along the south coast of Ukraine. He will speak of self-determination of peoples, citing plebiscites that he will ensure show the majority of the populations in these areas want to be a part of Russia. His appeal will not be aimed at Ukraine but at Europeans whose economic woes would be eased.

This message will be every bit as enticing to President Biden as it will be to his European counterparts. America too is suffering severe economic damage which Biden invariably blames on Putin’s war. His mood is demonstrated in an article last week in the New York Times. While reassuring Russia about the limitations of US military support for Kiev, he wrote: “I will not pressure the Ukrainian government to make any territorial concessions”, the first time a major national leader has raised the prospect of concessions in many months.

Leaders will be tempted to grab at Putin’s offer of peace, withholding support for Zelensky. Until now, an attritional war has been said to favour Ukraine. That's about to be seriously tested. It may have been built on a false premise in the first place: Russia has usually started wars badly in its history, but has been able to call upon its vast resources and manpower over time. And the Ukrainians are entirely reliant on foreign weapons, equipment and intelligence.

 

 

[Harley]

2 hours ago, Sasquatch said:

Agree totally.

Was speaking to my mum yesterday evening. She's nearly 80 now and remembers the post WW2 war rationing. She reckons that people will get used to losing all of the niceties in life and will have to put on extra jumper to keep warm etc. 

She might be right but people will be forced to do this against their will and won't be happy about it. They will look for someone to blame. That can only be the government and any future government promising the fix the problem will also fail. Rinse and repeat until we are in V for Vendetta territory.

I'm genuinely concerned with the direction of travel.

Tbf, I think we were like this in the run up to WW2.  It's human nature to be optimistic.  "Remember" Chamberlain, the black shirts, Edward and co, and all the rest.  Maybe or maybe not we will survive the shock, if indeed there is one, but it's never easy.  We could go so many ways at such a time.  

[BurntBread]

6 minutes ago, feed said:

Increased productivity would have increased deflation.  

That sounds awfully close to the idea of burning crops during the great depression, as otherwise prices would be too low and farmers would go bankrupt. If I'm right, it's strange to see a rhyming of the history.

On the subject of whether we would ever get the "blitz" spirit back, it is worth reading Priestley's "English Journey" from 1933. Many parts of the country were full of the broken, unemployable young men who had never worked after leaving education. They were among the men who fought and won the war (although they were the cannon-fodder rather than the elite soldiers; and "won" is perhaps a bit strong when you consider later history -- but the kinetic war was definitely won).

[Harley]

2 hours ago, feed said:

Clock is ticking. 

Berlin should negotiate gas with Russia to secure supply - official

https://breakingthenews.net/Article/Berlin-should-negotiate-gas-with-Russia-to-secure-supply-official/58469233

Bundestag Chairman of the Committee on Climate Protection and Energy Klaus Ernst (pictured) underscored on Friday that it is "wise" for Germany to negotiate with Russia to secure the country's gas supply which would effectively lower the prices.

"Leading politicians in the ruling parties also join my position," stressed Ernst on his Twitter account, adding that such a shift toward Berlin-Moscow dialogue would also enable the nation to avoid the effects of its own sanctions against Russia.

German Chancellor Olaf Scholz earlier said that the federal government plans to temporarily lower the sales tax on gas to 7% for its consumers, while the country prepares to connect liquefied natural gas (LNG) floating terminals in Wilhelmshaven and Brunsbuettel to the gas network.

Typical.  Germany always says no....until it doesn't!  It mistakes stubborness for toughness and to the tough it's a crap negotiating stance.  You just switch off and wait.  Not that many are tough though so it often works. 

Caveat:  I respect Germany a lot, especially when there and seeing things in context.

[ThoughtCriminal]

Don't know if this has been posted but seems quite clear which way the BRICS nations are heading

 

 

[sancho panza]

More Ukraine surrender prepping.Certainly seems the narrative is altering.

With winter approaching and Truss facing some serious voter anger ref cost of living crisis,sending moeny to the Ukraine doesn't play well when some people are struggling to pay fuel/food bills.

Call me callous,but a peace deal in the Ukraine could provide decent back drop for DH style melt up.

 

https://www.telegraph.co.uk/world-news/2022/08/18/no-new-military-pledges-ukraine-july-begs-question-has-west/

Military support for Ukraine appears to be drying up after research revealed that major European governments failed to make a single new pledge to send weapons to Kyiv last month.

Since Russia’s invasion in February, the UK, France and Germany have promised to stand by Ukraine with whatever assistance it takes to win the battle.

But July became the first month since the beginning of the conflict during which there were no significant new pledges of international support by Europe’s largest economies.

 

 

The German think tank’s data showed that Europe’s top donors – the UK, Germany, Poland, France, Italy and Spain – had failed to make a contribution.

The UK remains Europe’s largest contributor to Ukraine’s military efforts, but still falls some €21 billion behind the United States.

“This assistance is a matter of life and death for us,” Andriy Yermak, President Zelensky’s chief of staff, said on Thursday.

Despite a lack of new offers of support, the Kiel Institute for the World Economy said Western governments had narrowed the gap between committed and delivered aid.

Germany in particular has been criticised for its slow weapons deliveries, with some promises taking months to fulfil.

[M S E Refugee]

10 minutes ago, BWW said:

houses are very cheap in rural hungary. do you get a passport there witha sensible sized investment in sharez or a business without getting reamed on taxes?

purebloods allwed?

I got my Polish Passport through my Polish Grandfather and would prefer Poland as I have spent a lot of time there however Hungary looks to have sensible and pragmatic leadership.

 

[Harley]

3 minutes ago, sancho panza said:

The UK remains Europe’s largest contributor to Ukraine’s military efforts, but still falls some €21 billion behind the United States.

Pathetic, when one considers our relative sizes.  

[Calcutta]

With the break up of the UK I can see England swinging violently and shockingly to the right wing.  

No Labour Party to worry about and politics here becomes a game of who can pacify millions of angry,  cold,  previously forgotten voters. 

[feed]

The lend lease agreements that have been made with Ukraine.  I do wonder when it gets to the point, where they’re no longer practically  profitable, as they'll be in debt for more than 100 years anyway.  And the infrastructure rebuild contracts become the next profit point.   

 

[HousePriceMania]

32 minutes ago, BWW said:

houses are very cheap in rural hungary. do you get a passport there witha sensible sized investment in sharez or a business without getting reamed on taxes?

purebloods allwed?

Reminds me of these people...

 

https://www.standard.co.uk/hp/front/ps950-000-cloud-over-channel-4-chateau-s-mr-fawlty-6582050.html

That was Slovakia though.

Dodgy as fuck IIRC

Then they put up 11 years later...

 

https://www.dailypost.co.uk/news/north-wales-news/man-laundered-78000-two-victims-15086341

Man laundered £78,000 from two victims of wine investment scam

David Darrell, 52, admitted transferring criminal property and was ordered to pay back the cash and handed a suspended jail term

 

[ThoughtCriminal]

34 minutes ago, BurntBread said:

That sounds awfully close to the idea of burning crops during the great depression, as otherwise prices would be too low and farmers would go bankrupt. If I'm right, it's strange to see a rhyming of the history.

On the subject of whether we would ever get the "blitz" spirit back, it is worth reading Priestley's "English Journey" from 1933. Many parts of the country were full of the broken, unemployable young men who had never worked after leaving education. They were among the men who fought and won the war (although they were the cannon-fodder rather than the elite soldiers; and "won" is perhaps a bit strong when you consider later history -- but the kinetic war was definitely won).

Yes but they were protestant working class boys who thought the same and had the same culture.

 

We now live in woke tower of Babel.

 

Kipling, as ever, knew what we have forgotten

 

"The Stranger within my gate,
He may be true or kind,
But he does not talk my talk--
I cannot feel his mind.
I see the face and the eyes and the mouth,
But not the soul behind."

[marceau]

56 minutes ago, Harley said:

We rightly moan about polos but just to stress, our ever present civil service has been working to the mantra of "managed decline" for decades.

No, not at the top anyway. I know these people.  They genuinely think of themselves as world saviours, genius machiavellians, the shepherds of human progress - they fully bought their own bullshit. Decline isn't part of their mindset at all; it's ambition, narcissism, virtue and  sanctimony.

[Loki]

7 minutes ago, marceau said:

No, not at the top anyway. I know these people.  They genuinely think of themselves as world saviours, genius machiavellians, the shepherds of human progress - they fully bought their own bullshit. Decline isn't part of their mindset at all; it's ambition, narcissism, virtue and  sanctimony.

The old "The road to hell is paved with good intentions" expression

Although it does depend who gets to brute-force/simplify the definition of good

[Sue Lowe]

3 hours ago, DurhamBorn said:

My home town was one of the most important in the industrial revolution,we invented the railways,first passenger train ever left the town.Now its 80% bennies.Shocking.

Love the museum there.

Got family in Spennymoor. The new art gallery in the town hall there is worth a visit as well.

 

[Yadda yadda yadda]

1 hour ago, Lightscribe said:

Did you read the article? Oxford street isn’t owned by the crown estate, it’s owned by the Middle East and Asian ‘investors’.

The sweet shops don’t have to make a profit as they are used as a front through a myriad of shell companies for criminality and money laundering.

Look at the end, Westminster council said that without them, they would just have empty shops instead.

The family silver of this country has long been sold and melted down a long time ago.

I didn't read between the lines that the sweet shops were a front for money laundering. Which seems rather obvious when pointed out. I suppose it doesn't matter if they never file accounts so long as money gets to the landlord.

[Harley]

1 hour ago, sancho panza said:

More Ukraine surrender prepping.Certainly seems the narrative is altering.

With winter approaching and Truss facing some serious voter anger ref cost of living crisis,sending moeny to the Ukraine doesn't play well when some people are struggling to pay fuel/food bills.

Call me callous,but a peace deal in the Ukraine could provide decent back drop for DH style melt up.

 

https://www.telegraph.co.uk/world-news/2022/08/18/no-new-military-pledges-ukraine-july-begs-question-has-west/

Military support for Ukraine appears to be drying up after research revealed that major European governments failed to make a single new pledge to send weapons to Kyiv last month.

Since Russia’s invasion in February, the UK, France and Germany have promised to stand by Ukraine with whatever assistance it takes to win the battle.

But July became the first month since the beginning of the conflict during which there were no significant new pledges of international support by Europe’s largest economies.

 

 

The German think tank’s data showed that Europe’s top donors – the UK, Germany, Poland, France, Italy and Spain – had failed to make a contribution.

The UK remains Europe’s largest contributor to Ukraine’s military efforts, but still falls some €21 billion behind the United States.

“This assistance is a matter of life and death for us,” Andriy Yermak, President Zelensky’s chief of staff, said on Thursday.

Despite a lack of new offers of support, the Kiel Institute for the World Economy said Western governments had narrowed the gap between committed and delivered aid.

Germany in particular has been criticised for its slow weapons deliveries, with some promises taking months to fulfil.

I note JRS (JPM Russia Trust) is up 26% the last two weeks.

[Pip321]

1 hour ago, sancho panza said:

More Ukraine surrender prepping.Certainly seems the narrative is altering.

With winter approaching and Truss facing some serious voter anger ref cost of living crisis,sending moeny to the Ukraine doesn't play well when some people are struggling to pay fuel/food bills.

Call me callous,but a peace deal in the Ukraine could provide decent back drop for DH style melt up.

 

https://www.telegraph.co.uk/world-news/2022/08/18/no-new-military-pledges-ukraine-july-begs-question-has-west/

Military support for Ukraine appears to be drying up after research revealed that major European governments failed to make a single new pledge to send weapons to Kyiv last month.

Since Russia’s invasion in February, the UK, France and Germany have promised to stand by Ukraine with whatever assistance it takes to win the battle.

But July became the first month since the beginning of the conflict during which there were no significant new pledges of international support by Europe’s largest economies.

 

 

The German think tank’s data showed that Europe’s top donors – the UK, Germany, Poland, France, Italy and Spain – had failed to make a contribution.

The UK remains Europe’s largest contributor to Ukraine’s military efforts, but still falls some €21 billion behind the United States.

“This assistance is a matter of life and death for us,” Andriy Yermak, President Zelensky’s chief of staff, said on Thursday.

Despite a lack of new offers of support, the Kiel Institute for the World Economy said Western governments had narrowed the gap between committed and delivered aid.

Germany in particular has been criticised for its slow weapons deliveries, with some promises taking months to fulfil.

Seriously the way the narrative is altering and the way people and the media react and virtue signal is like watching a fading Netflix series  

Eg….I watched the first series, you know, the NATO build up, the invasion bit, exodus, sanctions and it was quite exciting. The special effects with the bombs weren’t great though. 

The second series has already got boring, the energy price narrative, inflation stuff is all a bit depressing. The Biden/Pelosi characters don’t even look realistic. 

X Factor starts soon so unless China start in Taiwan or the Monkeypox idea isn’t expanded I won’t bother watching the third series.

The media and politician are shite. They should be honest and spell out what is happening, why and where this whole economic disaster could end up. That could actually make a really good story….I guess TPTB just won’t let them.