Credit deflation and the reflation cycle to come (part 6)

[Chewing Grass]

19 minutes ago, ashestoashes said:

thought Natwest was getting into rented properties, surely they need a supply of properties with distressed sellers

There are no consequences to arse raping private landlords as their tenants wouldn't know the difference and would probably be able to get stuff fixed quicker.

[Pip321]

2 hours ago, Cattle Prod said:

Yes, I think it is a form of that all right, and that the realisation was quite a while ago. As I said about the Hubbert curve, it's quite predictable to see coming. You could say that 'bringing democracy to Iraq' was the last throw of the dice, and since that didn't work (in the West's favour)  the invasion option is off the table and they are going for Net Zero next to condition us to getting pooer and not growing. I'm not sure they've thought through what that means for debt based fiat currency mind you.

Which comes to how they've been paying for it, which is the nuts of it. Even if a country doesn't have it, it can buy it. It;s a golbal commodity sold to the highest bidder, but the catch is you need money the seller wants, which is again becoming gold. Last time the reserve currency was linked to gold, it drained the US Treasury till Nixon broke the link, so they know that isn't going to work either. If net zero is their latest bright idea it really is pretty desperate end of empire stuff. You can just see how emboldended that resource owning countries have become. Can't be invaded (Iraq showed that), can refuse paper money, and the West (particularly the UK and EU) doesn't have enough gold to buy what it needs.

The US might stave it off for decades yet with the dollar (which will still be widely used, and needs to be exported), their own energy needs mostly met, and reshoring manufacturing to produce goods the rest of the world wants which it can sell for hard currency.

I hate to say it, but the UK could well be the canary in the coal mine for what is going to happen (though as usual Germany is trying hard to compete). It's not the debt itself that's the problem, at around 100% of GDP and a lot of that at long maturities, it's serviceble. But the deficit is horrendous. It means that every month the UK government has to convince (or compel) the bond market to give them a shit ton of money, with no growth plan to show in return other than low value immigrants.

Think about it, how long more is this going to last? And it needs this borrowed money to import food and fuel. I think one reason the polos are panicking so much is that they have been told in no uncertain terms about the gun to their head.

The US can be ignored as they are required to run a deficit as the reserve currency. UK is up next, and it does not have the luxury to have foreign countries scrabbling to find sterling to pay for oil. It's insane that it is anywhere near the US, and it's getting worse. At least Italy got Meloni in there who might sort things out (you can see why she is being nice to the bond market too). 

If that OBR dashed line doesn't start trending down soon, I think the UK faces a recknoning. There is no more to be taxed, and I'll be watching tax take with interest, Laffer curve may mean it comes in low, which I think would cause a panic. Spending is as we know going up with inflation. We'll know soon enough.

As an aside, I got a letter from HRMC looking for £270 off me. No explanation why, just log on an pay it, or they'll contact my employer to deduct from my salary. So I logged on to try and find what it was for, which I did eventually: overpayment of  tax credits in 2014. How very bizzarre, and to me the very definition of looking for pennies down the back of the sofa. Who is telling them to send out those ridiculous letters, and why?

So to your original point, I think it's quite likely that this carbon netral agenda in the UKs case is classic misdirection. Some nudge unit arsehole told them that people will accept less if they feel virtuous about it. And probably much the same for the OECD. Thing is though, as @DurhamBorn points out, there is plenty of coal here. Maybe 13 years of Tories couldn't bear to reverse Thatcher's pit closures. Imagine if Labour did...I suspect the Germans are leading the way here. I'll be watching them for a PR campaign on how their particulate and CO2 scrubbers are rendering it as clean an Alpine meadow.

The thing about net zero is that the politicans simply aren't dealing with the reality of it yet. It's not just about getting by with less, and wearing a jumper. It's collapsing currencies, and rioting people. The behavioural 'scientists' at the nudge unit are going to be wrong again. 

Thx CP. I think 2022 generally (plus this thread) was an eye opener for me and my thought process is now developing further. 

Also thx for clarifying….sounds like I am on the right lines and basically you concur but have just explained it’s much much worse than I thought 😆😆

Edited June 18, 2023 by Pip321

[Yadda yadda yadda]

2 hours ago, Kendo said:

Bit wary about the word “direct” here. Could be interpreted as direct handouts not being an option but being able to pay your mortgage before your tax, as per a current petition argues, is being considered (indirect help?)

I think that is still direct help. Indirect help would be somehow subsidising the lenders.

To my mind the open mouth operations by Hunt are simply aimed at manipulating the markets. If the pound strengthens on the basis of rate hike expectations imports will be slightly cheaper and inflation slightly lower. Therefore talking up interest rates could lead to lower rates.

They will be desperately hoping that US rates have peaked and will be cut by the end of the year. If this is the case a weaker dollar will help import prices. Although that would be mitigated by stronger commodity prices.

It is all a bit of a mess.

[spygirl]

49 minutes ago, Long time lurking said:

 

In the early 90s hpc about 60% of households had mortgages on them.

Today only 35% do. And even then a lot are fixed for 5y - fuckwits a few comments  back excluded....

[5y+ fix removed you from the BoE affordability check]

There isn't   the same quick hit to the economy they had in the 90s.

Raise rates 2% be like spongy brakes.

Unless Ukgov wants the bank to raise to 10% theyll have to start cutting welfare npublic sector spend.

None of this UC n pension indexlinking triple lock.

 

 

[Yadda yadda yadda]

1 hour ago, Cattle Prod said:

Yes, I think it is a form of that all right, and that the realisation was quite a while ago. As I said about the Hubbert curve, it's quite predictable to see coming. You could say that 'bringing democracy to Iraq' was the last throw of the dice, and since that didn't work (in the West's favour)  the invasion option is off the table and they are going for Net Zero next to condition us to getting pooer and not growing. I'm not sure they've thought through what that means for debt based fiat currency mind you.

Which comes to how they've been paying for it, which is the nuts of it. Even if a country doesn't have it, it can buy it. It;s a golbal commodity sold to the highest bidder, but the catch is you need money the seller wants, which is again becoming gold. Last time the reserve currency was linked to gold, it drained the US Treasury till Nixon broke the link, so they know that isn't going to work either. If net zero is their latest bright idea it really is pretty desperate end of empire stuff. You can just see how emboldended that resource owning countries have become. Can't be invaded (Iraq showed that), can refuse paper money, and the West (particularly the UK and EU) doesn't have enough gold to buy what it needs.

The US might stave it off for decades yet with the dollar (which will still be widely used, and needs to be exported), their own energy needs mostly met, and reshoring manufacturing to produce goods the rest of the world wants which it can sell for hard currency.

I hate to say it, but the UK could well be the canary in the coal mine for what is going to happen (though as usual Germany is trying hard to compete). It's not the debt itself that's the problem, at around 100% of GDP and a lot of that at long maturities, it's serviceble. But the deficit is horrendous. It means that every month the UK government has to convince (or compel) the bond market to give them a shit ton of money, with no growth plan to show in return other than low value immigrants.

Think about it, how long more is this going to last? And it needs this borrowed money to import food and fuel. I think one reason the polos are panicking so much is that they have been told in no uncertain terms about the gun to their head.

The US can be ignored as they are required to run a deficit as the reserve currency. UK is up next, and it does not have the luxury to have foreign countries scrabbling to find sterling to pay for oil. It's insane that it is anywhere near the US, and it's getting worse. At least Italy got Meloni in there who might sort things out (you can see why she is being nice to the bond market too). 

If that OBR dashed line doesn't start trending down soon, I think the UK faces a recknoning. There is no more to be taxed, and I'll be watching tax take with interest, Laffer curve may mean it comes in low, which I think would cause a panic. Spending is as we know going up with inflation. We'll know soon enough.

As an aside, I got a letter from HRMC looking for £270 off me. No explanation why, just log on an pay it, or they'll contact my employer to deduct from my salary. So I logged on to try and find what it was for, which I did eventually: overpayment of  tax credits in 2014. How very bizzarre, and to me the very definition of looking for pennies down the back of the sofa. Who is telling them to send out those ridiculous letters, and why?

So to your original point, I think it's quite likely that this carbon netral agenda in the UKs case is classic misdirection. Some nudge unit arsehole told them that people will accept less if they feel virtuous about it. And probably much the same for the OECD. Thing is though, as @DurhamBorn points out, there is plenty of coal here. Maybe 13 years of Tories couldn't bear to reverse Thatcher's pit closures. Imagine if Labour did...I suspect the Germans are leading the way here. I'll be watching them for a PR campaign on how their particulate and CO2 scrubbers are rendering it as clean an Alpine meadow.

The thing about net zero is that the politicans simply aren't dealing with the reality of it yet. It's not just about getting by with less, and wearing a jumper. It's collapsing currencies, and rioting people. The behavioural 'scientists' at the nudge unit are going to be wrong again. 

On the one hand they're struggling to afford imports. On the other their desperation to grow GDP to keep the debt Ponzi going means that they're importing more consumers purely for their consumption.

Increasing benefits by inflation suggests that they're more worried about GDP and debt repayment.

[DurhamBorn]

1 hour ago, Cattle Prod said:

Yes, I think it is a form of that all right, and that the realisation was quite a while ago. As I said about the Hubbert curve, it's quite predictable to see coming. You could say that 'bringing democracy to Iraq' was the last throw of the dice, and since that didn't work (in the West's favour)  the invasion option is off the table and they are going for Net Zero next to condition us to getting pooer and not growing. I'm not sure they've thought through what that means for debt based fiat currency mind you.

Which comes to how they've been paying for it, which is the nuts of it. Even if a country doesn't have it, it can buy it. It;s a golbal commodity sold to the highest bidder, but the catch is you need money the seller wants, which is again becoming gold. Last time the reserve currency was linked to gold, it drained the US Treasury till Nixon broke the link, so they know that isn't going to work either. If net zero is their latest bright idea it really is pretty desperate end of empire stuff. You can just see how emboldended that resource owning countries have become. Can't be invaded (Iraq showed that), can refuse paper money, and the West (particularly the UK and EU) doesn't have enough gold to buy what it needs.

The US might stave it off for decades yet with the dollar (which will still be widely used, and needs to be exported), their own energy needs mostly met, and reshoring manufacturing to produce goods the rest of the world wants which it can sell for hard currency.

I hate to say it, but the UK could well be the canary in the coal mine for what is going to happen (though as usual Germany is trying hard to compete). It's not the debt itself that's the problem, at around 100% of GDP and a lot of that at long maturities, it's serviceble. But the deficit is horrendous. It means that every month the UK government has to convince (or compel) the bond market to give them a shit ton of money, with no growth plan to show in return other than low value immigrants.

Think about it, how long more is this going to last? And it needs this borrowed money to import food and fuel. I think one reason the polos are panicking so much is that they have been told in no uncertain terms about the gun to their head.

The US can be ignored as they are required to run a deficit as the reserve currency. UK is up next, and it does not have the luxury to have foreign countries scrabbling to find sterling to pay for oil. It's insane that it is anywhere near the US, and it's getting worse. At least Italy got Meloni in there who might sort things out (you can see why she is being nice to the bond market too). 

If that OBR dashed line doesn't start trending down soon, I think the UK faces a recknoning. There is no more to be taxed, and I'll be watching tax take with interest, Laffer curve may mean it comes in low, which I think would cause a panic. Spending is as we know going up with inflation. We'll know soon enough.

As an aside, I got a letter from HRMC looking for £270 off me. No explanation why, just log on an pay it, or they'll contact my employer to deduct from my salary. So I logged on to try and find what it was for, which I did eventually: overpayment of  tax credits in 2014. How very bizzarre, and to me the very definition of looking for pennies down the back of the sofa. Who is telling them to send out those ridiculous letters, and why?

So to your original point, I think it's quite likely that this carbon netral agenda in the UKs case is classic misdirection. Some nudge unit arsehole told them that people will accept less if they feel virtuous about it. And probably much the same for the OECD. Thing is though, as @DurhamBorn points out, there is plenty of coal here. Maybe 13 years of Tories couldn't bear to reverse Thatcher's pit closures. Imagine if Labour did...I suspect the Germans are leading the way here. I'll be watching them for a PR campaign on how their particulate and CO2 scrubbers are rendering it as clean an Alpine meadow.

The thing about net zero is that the politicans simply aren't dealing with the reality of it yet. It's not just about getting by with less, and wearing a jumper. It's collapsing currencies, and rioting people. The behavioural 'scientists' at the nudge unit are going to be wrong again. 

Its incredible to think,but i worked with guys who were face workers at Easington Pit ,its not that long ago.I remember when the last ones shut,an old fella in the club said something very interesting when everyone was going mad about it all.He said dinit worry man,we may as well burn every fucker elses coal,ours will still be there later you na when we need it.

I think our coal measures hold around 200 years worth of coal,could be more with better methods.

My roadmap shows me its certain we collapse because they are simply spreading the pie more and more,and its going to be a shrinking pie,unless they increase energy production and cut back on bennies etc.Labour have a massive chance here.They could go for carbon capture and open the pits.Imagine a Labour leader at the Durham miners gala giving that speech ,"we are sinking the first shafts this year".It would be huge.I would rub the elites noses in it even more,Id put a levy on the coal that was used to re wild and re forest the grouse moors etc with oaks and birch forests.Our uplands should be half forested,not left for 6 fellas with 8 chins to shoot little birds.

Iv off-shored most of my own assets now because the risk is incredible in the UK.

Should i put my numbers on my roadmap shows if we carry on as we are?.

Interest rates at 36%,inflation at 33% and INCREASING,unless bennies and state pensions lose inflation linking.

The only other way is to produce lots more energy,and the only thing we have is coal.

This talk of mortgage help is ludicrous,because as iv said countless times,housing wealth will be consumed next,even if they change track now,that capital will be spent down.

Its fantastic watching them all though,the only way out is to kill all their sacred ideas,net zero,diversity,welfare etc etc.

SEDY has 12% in thermal coal ,lovely.

[Loki]

7 minutes ago, DurhamBorn said:

Should i put my numbers on my roadmap shows if we carry on as we are?.

Definitely 

[Axeman123]

2 hours ago, Eventually Right said:

Surely the question that would be asked endlessly of the government from renters would be:

”why can’t I pay my rent out of pre-tax income?”

Hell, maybe they’ll do both, 12 month temporary MIRAS and RIRAS scheme…

Most peoples biggest monthly outgoing, the hit to the tax take would be fatal IMO.

The incentive to maximise your lifestyle by havin the nicest housing and get your taxable income down to near the personal allowance would be very strong.

2 hours ago, Chewing Grass said:

and your travel to work costs.

The only way the government fixes anything is if its costing them tax receipts.

Why not BUPA, private schooling, childcare, piano lessons, gym memberships too? Most people could justify 90% of their outgoings as essential, at least to their own satisfaction. Where would it end?

I take your point about aligning incentives though.

2 hours ago, M S E Refugee said:

Could the Government not exchange the mortgage debt for equity and charge a percentage as rent or am I being obtuse?

Privatise the profit and then socialise the loss.

 

[Axeman123]

16 minutes ago, DurhamBorn said:

Labour have a massive chance here.They could go for carbon capture and open the pits.Imagine a Labour leader at the Durham miners gala giving that speech ,"we are sinking the first shafts this year".It would be huge.I would rub the elites noses in it even more,Id put a levy on the coal that was used to re wild and re forest the grouse moors etc with oaks and birch forests.Our uplands should be half forested,not left for 6 fellas with 8 chins to shoot little birds.

Normally I dislike lefty class warfare stuff, as often it falls on the lower middle class while the real toffs can buy their way around it, but I could get behind all that in a big way!

I like the reforesting part especially, just like Thatcher making people homeowners that is toothpaste that could never be put back in the tube politically.

18 minutes ago, DurhamBorn said:

Interest rates at 36%,inflation at 33% and INCREASING,unless bennies and state pensions lose inflation linking.

The only other way is to produce lots more energy,and the only thing we have is coal.

This talk of mortgage help is ludicrous,because as iv said countless times,housing wealth will be consumed next,even if they change track now,that capital will be spent down.

Thats Argentina scale systemic failure! Shocking to think of how wrong things have gone since the last GE (only 2019, how long ago does that feel like now though...), and how none of it was on any manifesto! We are as badly off by now as if Corbyn had won, who could have imagined it?

24 minutes ago, DurhamBorn said:

Its fantastic watching them all though,the only way out is to kill all their sacred ideas,net zero,diversity,welfare etc etc.

Crazy to think that they literally were preparing for a post scarcity utopia, and were 100% wrong. It is thousand-year-Reich level fantasy.

[Yadda yadda yadda]

29 minutes ago, DurhamBorn said:

Interest rates at 36%,inflation at 33% and INCREASING,unless bennies and state pensions lose inflation linking.

Massive civil unrest, including large scale riots.

If they removed index linking next year what happens? Is it possible to change course without destroying pensioners and benefit recipients? Perhaps a moot point as I can't see them doing anything before the election.

[Cattle Prod]

38 minutes ago, Yadda yadda yadda said:

On the one hand they're struggling to afford imports. On the other their desperation to grow GDP to keep the debt Ponzi going means that they're importing more consumers purely for their consumption.

Increasing benefits by inflation suggests that they're more worried about GDP and debt repayment.

I fully agree, and the penny only dropped for me on this about 6 months ago. Immigration is simply to massage GDP in the hope of keeping the bond market quiet. Why else would the Tories blow off their own electoral feet, unless the alternative was worse?

[Plan-b]

33 minutes ago, DurhamBorn said:

Interest rates at 36%,inflation at 33% and INCREASING,unless bennies and state pensions lose inflation linking.

I'm pretty sure the UK Gov will do nothing at least before the general election, they may even go with a scorched earth policy to hand over to the next Government .

The big question - How long do we have before we go Weimar rates of inflation?

[Cattle Prod]

48 minutes ago, DurhamBorn said:

hould i put my numbers on my roadmap shows if we carry on as we are?.

Interest rates at 36%,inflation at 33% and INCREASING,unless bennies and state pensions lose inflation linking.

Sheeeeeiiiitttt

What timescale do you see that happening over, DB?!

[DurhamBorn]

17 minutes ago, Yadda yadda yadda said:

Massive civil unrest, including large scale riots.

If they removed index linking next year what happens? Is it possible to change course without destroying pensioners and benefit recipients? Perhaps a moot point as I can't see them doing anything before the election.

No,because wages cant increase faster than inflation at the moment on my model,so IF bennies and public sector pensions keep inflation linking collapse is certain,not if,when.I would expect other things will give first and the roadmap will change direction,i dont expect anything near those rates,but thats what my model shows as where we are going on present policies.My roadmaps are really direction tools,not destination,in other words the direction is horrible for anyone not inflation linked,or highly leveraged,for now.

[StrugglingMillennial]

You say that your assets are off-shored DB, are these companies outside of the UK or does it include UK companies that trade outside the UK. Bats, shell e.t.c

[Axeman123]

26 minutes ago, Cattle Prod said:

Immigration is simply to massage GDP in the hope of keeping the bond market quiet. Why else would the Tories blow off their own electoral feet, unless the alternative was worse?

IMO this chart gives a fair clue what they were most scared of initially, defecit and bond markets as you say. Farages claim that the govt wanted to close beaches etc to stop people seeing the migrant swarm during the various COVID restrictions starts to make more sense, in that they likely were deliberately flooding them in to pump nominal GDP.

This chart is from a HoC report dated this month, but I don't know how recent the figures used are. I would be surprised if the defecit hadn't already turned back up by now (what I was originally searching for when I found this).

The US OTOH already has that second defecit wave underway (Chart is upside down relative to above one, and only data to May this year)

A 2 Trillion dollar defecit, can you imagine! The same trend will play out here sooner or later, and only spending cuts can change it. Taxes are already too damn high and ironically hurting GDP growth.

https://commonslibrary.parliament.uk/research-briefings/sn06167/

Edited June 18, 2023 by Axeman123
image wierd

[DurhamBorn]

6 minutes ago, Cattle Prod said:

Sheeeeeiiiitttt

What timescale do you see that happening over, DB?!

I dont see it happening,i think things will change first,thats just what my roadmap points to if nothing changes,its dating 28 for those levels.As above my roadmap is a direction tool more than anything,its to show direction,not destination,and we use it to cross market across to decide where to allocate our saved labour,and also where to avoid.In simple terms,massive long EM markets where inflation is falling (and so rates),massive short leveraged BTL in the UK.

The funny thing is the UK is an outlier in that half the population are inflation protected,so the question is how much is left to take from the rest,and how long will others fund it through gilts.My roadmap is still flashing collapse certain across every metric,yet i think we will still likely avoid it,but not without huge changes.I think for us on here its best to consider my close to mid range roadmap for investing,not so much the longer term,that is pushed to such extremes i think things must give long before its reached.The policy errors are off the scale though.Most of the country know these elites are the worst we have had,but they are the worst by magnitudes.

[DurhamBorn]

5 minutes ago, StrugglingMillennial said:

You say that your assets are off-shored DB, are these companies outside of the UK or does it include UK companies that trade outside the UK. Bats, shell e.t.c

Includes UK that earn over seas etc as well.I even bought WalgreensBoots last week with of course big UK exposure,that a play on prescription sales shooting up as health goes down badly and the fact the NHS might start to outsource Pharmacies to do GP work,its a cross market one.

I only really own BT now that makes almost all here,but at least the telcos should index link,Turkcell for instance protected Turks very well from high inflation (and some of us).

[Cattle Prod]

😂 Another very nicely paced normal distribution for mentions of ESG on earnings calls, identical to the Hubert curve for oil resources. Ramp up, peak, decline The natural way of things, like a bud on a tree to a brown leaf.

Amazing how this pattern repeats.

 

Ok coppers it’s safe to arrest the Just Stop Oil people now, get your truncheons out 

[PatronizingGit]

2 hours ago, DurhamBorn said:

Its incredible to think,but i worked with guys who were face workers at Easington Pit ,its not that long ago.I remember when the last ones shut,an old fella in the club said something very interesting when everyone was going mad about it all.He said dinit worry man,we may as well burn every fucker elses coal,ours will still be there later you na when we need it.

I think our coal measures hold around 200 years worth of coal,could be more with better methods.

My roadmap shows me its certain we collapse because they are simply spreading the pie more and more,and its going to be a shrinking pie,unless they increase energy production and cut back on bennies etc.Labour have a massive chance here.They could go for carbon capture and open the pits.Imagine a Labour leader at the Durham miners gala giving that speech ,"we are sinking the first shafts this year".It would be huge.I would rub the elites noses in it even more,Id put a levy on the coal that was used to re wild and re forest the grouse moors etc with oaks and birch forests.Our uplands should be half forested,not left for 6 fellas with 8 chins to shoot little birds.

Iv off-shored most of my own assets now because the risk is incredible in the UK.

Should i put my numbers on my roadmap shows if we carry on as we are?.

Interest rates at 36%,inflation at 33% and INCREASING,unless bennies and state pensions lose inflation linking.

The only other way is to produce lots more energy,and the only thing we have is coal.

This talk of mortgage help is ludicrous,because as iv said countless times,housing wealth will be consumed next,even if they change track now,that capital will be spent down.

Its fantastic watching them all though,the only way out is to kill all their sacred ideas,net zero,diversity,welfare etc etc.

SEDY has 12% in thermal coal ,lovely.

after all this, you really think they want the UK to succeed? any of them?

they are global communists. They want the average brit to be no better off than the average indian than the average Columbian. Harmonization, homogenization. Pit villages mean no more to them than some obscure village in Kerala.

 

One thing they are is malthusian. All the stuff about Gates wanting to 'kill' half the worlds population is probably nonsense, but they certainly want to reduce birthrates father, faster. They believe one way to do that is to import as many as possible into western societies where women are socially pressured to spend their child bearing years in education & then economically forced to spend the rest of them working for the man. That millennials or gen Z's will never be able to start families isnt a flaw for them, but a function. 

[DurhamBorn]

27 minutes ago, PatronizingGit said:

after all this, you really think they want the UK to succeed? any of them?

they are global communists. They want the average brit to be no better off than the average indian than the average Columbian. Harmonization, homogenization. Pit villages mean no more to them than some obscure village in Kerala.

 

One thing they are is malthusian. All the stuff about Gates wanting to 'kill' half the worlds population is probably nonsense, but they certainly want to reduce birthrates father, faster. They believe one way to do that is to import as many as possible into western societies where women are socially pressured to spend their child bearing years in education & then economically forced to spend the rest of them working for the man. That millennials or gen Z's will never be able to start families isnt a flaw for them, but a function. 

My youngest daughter is 21 and onto baby number 3,i think she will have 5,she is with a gypsy though.These lot are global commies,but its likely they will be removed at some point.It would stop monday if nobody went to work.

[JMD]

5 hours ago, Cattle Prod said:

Yes, I think it is a form of that all right, and that the realisation was quite a while ago. As I said about the Hubbert curve, it's quite predictable to see coming. You could say that 'bringing democracy to Iraq' was the last throw of the dice, and since that didn't work (in the West's favour)  the invasion option is off the table and they are going for Net Zero next to condition us to getting pooer and not growing. I'm not sure they've thought through what that means for debt based fiat currency mind you.

Which comes to how they've been paying for it, which is the nuts of it. Even if a country doesn't have it, it can buy it. It;s a golbal commodity sold to the highest bidder, but the catch is you need money the seller wants, which is again becoming gold. Last time the reserve currency was linked to gold, it drained the US Treasury till Nixon broke the link, so they know that isn't going to work either. If net zero is their latest bright idea it really is pretty desperate end of empire stuff. You can just see how emboldended that resource owning countries have become. Can't be invaded (Iraq showed that), can refuse paper money, and the West (particularly the UK and EU) doesn't have enough gold to buy what it needs.

The US might stave it off for decades yet with the dollar (which will still be widely used, and needs to be exported), their own energy needs mostly met, and reshoring manufacturing to produce goods the rest of the world wants which it can sell for hard currency.

I hate to say it, but the UK could well be the canary in the coal mine for what is going to happen (though as usual Germany is trying hard to compete). It's not the debt itself that's the problem, at around 100% of GDP and a lot of that at long maturities, it's serviceble. But the deficit is horrendous. It means that every month the UK government has to convince (or compel) the bond market to give them a shit ton of money, with no growth plan to show in return other than low value immigrants.

Think about it, how long more is this going to last? And it needs this borrowed money to import food and fuel. I think one reason the polos are panicking so much is that they have been told in no uncertain terms about the gun to their head.

The US can be ignored as they are required to run a deficit as the reserve currency. UK is up next, and it does not have the luxury to have foreign countries scrabbling to find sterling to pay for oil. It's insane that it is anywhere near the US, and it's getting worse. At least Italy got Meloni in there who might sort things out (you can see why she is being nice to the bond market too). 

If that OBR dashed line doesn't start trending down soon, I think the UK faces a recknoning. There is no more to be taxed, and I'll be watching tax take with interest, Laffer curve may mean it comes in low, which I think would cause a panic. Spending is as we know going up with inflation. We'll know soon enough.

As an aside, I got a letter from HRMC looking for £270 off me. No explanation why, just log on an pay it, or they'll contact my employer to deduct from my salary. So I logged on to try and find what it was for, which I did eventually: overpayment of  tax credits in 2014. How very bizzarre, and to me the very definition of looking for pennies down the back of the sofa. Who is telling them to send out those ridiculous letters, and why?

So to your original point, I think it's quite likely that this carbon netral agenda in the UKs case is classic misdirection. Some nudge unit arsehole told them that people will accept less if they feel virtuous about it. And probably much the same for the OECD. Thing is though, as @DurhamBorn points out, there is plenty of coal here. Maybe 13 years of Tories couldn't bear to reverse Thatcher's pit closures. Imagine if Labour did...I suspect the Germans are leading the way here. I'll be watching them for a PR campaign on how their particulate and CO2 scrubbers are rendering it as clean an Alpine meadow.

The thing about net zero is that the politicans simply aren't dealing with the reality of it yet. It's not just about getting by with less, and wearing a jumper. It's collapsing currencies, and rioting people. The behavioural 'scientists' at the nudge unit are going to be wrong again. 

I agree with what you've written there.

But I'm assuming the West's (arrogantly naïve) Plan A was for the entire world to ration it's oil consumption. However by the early naughties it became clear China and India were not going to play ball, and I think it telling that it was Obama who begun frustrated trade embargoes on China during his first presidency. However Trump unexpectedly won the 2016 presidency and so confrontation-politics with Russia was temporarily postponed. There was what looked like a clumsy attempt by Trump to peel Russia away from China, however I'm also prepared to think that this whole policy might just have been a psyops (so interestingly, if Trump should win again in 2024 and re-engages with Russia BUT Europe doesn't benefit, in terms of energy from any new US detente arrangement, then yes I would think it was all a huge psyop!). Anyhow the US objective to isolate and to impoverish Europe looks like it's working. 

Btw I think your right to scrutinise the Germans. Especially in terms of where that country goes next in regard their ethical energy policy. I'm particularly interested in where their former Volkswagen 'quality assurance' engineers end up, after all those guys have form at hoodwinking the best, and what's the betting they have been reskilling in energy carbon capture!!

Edited June 18, 2023 by JMD

[King Penda]

5 hours ago, spygirl said:

He could deliveroo Friday teatime.

She could deliveroo Saturday teatime.

 

Exactly a can do attitude. Cough

[Kendo]

2 hours ago, DurhamBorn said:

I only really own BT now that makes almost all here,but at least the telcos should index link…

Not in charge of the BT pension fund too by any chance?

Telegraph reporting BT pension fund de-risking out of UK equities.

https://archive.is/5ykRW

[reformed nice guy]

3 minutes ago, Kendo said:

Not in charge of the BT pension fund too by any chance?

Telegraph reporting BT pension fund de-risking out of UK equities.

https://archive.is/5ykRW

"BT’s pension fund suffered an estimated £11bn drop in the value of its assets as a result of the crisis and is down almost £15bn since 2022."

From £54B to £39B, a 28% drop. I assume that some of that will be people taking their pension, but its still a huge drop. I guess they must have sold their oil holdings in 2020 when oil was "dead"