The Great Leap Forward

From 1958 to 1964, Chinese leader Mao Zedong aimed to rapidly transform China through high-speed societal change, establishing large publicly run enterprises, and  remodeling energy policy in a new structure of production and consumption centred around the utilisation of back yard furnaces.

The policy outcomes were, sadly, disastrous – poor planning and unrealistic targets, along with the dismantling of the established means of energy and food production in a short period of time, led to significant inefficiencies, a subsequent widespread drop in output and – ultimately and tragically – a massive famine that led to the deaths of 50 million people.

On a completely unrelated note, Ed Miliband has just been appointed Secretary of State for Energy Security and Net Zero.

I’ve said this before, long before the right wing nutjobs got hold of the idea and decided that opposing it was a core part of their theology – but Net Zero is going to be wild. Unfortunately, left wing nutjobs have decided that whatever the opposite of the right-wing position is, is now a core part of their ideology. So the odds of us navigating our way successfully through the next few decades have decreased significantly.

We are now however, essentially, aiming to be the first country in the world, since the Upper Palaeolithic revolution 40,000 years ago, to try and successfully increase living standards by decreasing energy production. Ed Miliband is at the forefront of this now, our new Assistant Glorious Leader: a man who lost an election because he couldn’t eat a bacon sandwich normally now wants us all, for example, to reduce meat consumption. I assume this is not a co-incidence.

Now, the economy is, to a certain extent, a derivative of the energy market. A very good book by Vaclav Smil (ok, it is a bit dense: “Energy and Civilization - A History”) shows beyond any reasonable doubt that there is, essentially, a correlation between energy consumption and civilisation: it’s about 0.99 in fact. Reduce energy consumption, reduce civilisational standards of living (by quite a lot, as we’re going to find out).

You can either be a net energy exporter – and produce that energy yourself as a country, which is good, or you can be a net energy importer, and buy it in from abroad – which is fine, but you need to earn money to buy it: ie have a trade surplus. [As an aside: you can be the issuer of a reserve currency and just print money to buy it from abroad, but we Brits can’t do that since we all went on holiday to Suez by mistake in 1956.]

What you can’t do is buy energy in from abroad, whilst simultaneously having a trade deficit. Which is what, since 2005, we have been trying to do: for that’s the year the oil and gas from the North Sea started to dwindle, and we became a net energy importer again for the first time since the 1980s (when we started our last period of growth) – and consequently, since 2005, living standards have stagnated. This is simple physics.

This process will now accelerate: under Net Zero, it is explicit government policy to get rid of our existing hydrocarbon energy sources, and most of our reliable base load power, as fast as possible (ie 73% of current energy production) and therefore reduce energy production in toto (great band) - and try and replace it, somehow, we're not sure how yet, with intermittent renewables. The massive, whopping lie is that this will reduce our dependence on imported hydrocarbons, which would obviously be a Good Thing during a time of global geopolitical instability: this is, demonstrably, a clear lie as these renewables will themselves require vast amounts of carbon emissions to produce in the first place – except now we won’t be able to do it ourselves, as we will have shut down the domestic hydrocarbon sources that would otherwise have been used.

Eh? Whaddya mean?

Well, a wind turbine, for example, is mostly steel. How do you make steel? Well, really, you need coking coal, as that’s the only cost-effective way of getting the energy intensity required – even “green steel” not using coal has massive carbon emissions – as even without the coal bit you need to pump oxygen in to transform the pig iron into steel, which creates…carbon dioxide. Big, fuck off amounts of it. Except we won’t be using our own coal, because Coal Bad, and we won’t be producing our own steel, because Carbon Emissions Bad, but despite the fact it’s 2024 we still want to power ourselves using fucking windmills for some reason - so we’ll instead just import the steel we need from China, where they’ll happily burn anything they can dig out of the ground (including far worse lignite coal).

So as we dwindle down our own reliable energy sources before their time, we’re going to have to instigate large-scale rationing, all whilst killing growth. We’ll print money for a while to try and hide it – as I’ve said on previous posts, we might even get a bit excited in the process and have a sugar-boom - but ultimately physics will win.

What’s even scarier is reading government papers on this stuff (it’s well worth reading the Sixth Carbon Budget, which is now in law, btw: https://www.theccc.org.uk/publication/sixth-carbon-budget/) - as they basically say the above, but in coded language. They talk about demand management: but they mean, shortages and rationing. They talk about managing mobility demand: but they mean, you can’t travel where you want to travel. Go and eat ze bugs.

I should add that I am not a “climate change denier”. My Doctoral research is on Sustainability and Building Climate Resilience and Lots of Other Buzzwords I Thought Sound Good in a Dissertation Title, and I spend my spare time researching engineering strategies to mitigate hurricane activity in the Caribbean - activity which is, beyond doubt, increasing as a direct result of Climate Change (although I did mainly choose this area of research because I get to go to the Caribbean).

However, wind down our existing reliable base-load hydrocarbon energy sources too fast and we will, definitely, without doubt, have a Great Leap: just not fucking Forward.

Wake Me Up When It's Quitting Time

 I was listening to a Cabinet minister talk on Radio 4 recently, idly deciding who I was going to vote for, and quite a stark thought hit me: only a few years ago, saying that the financial system is at risk of collapse, society is on the brink of total anarchy and the world will shortly descend into World War III, used to mark you out as quite “outré”. This outlook tended to be the preserve of a very few, marginal tinfoil hat-wearing loons like me – niche issues of interest to the sort of people such as, for example, the three Very Special People who read this increasingly sporadic blog (I am to be fair only counting the Northern European readership).

Now, it’s quite common for senior Cabinet Ministers to say exactly this sort of thing on the Today programme, and no one really blinks. This is quite a shift.

But why?

I continue to think this is, as I have long argued, primarily down to our financial system. It is inherently destabilizing. In understanding it, the most important thing to get your mind around is simply that what we think of as money – the £10 note in your pocket (or digital equivalent) – is not money: it is credit.

And so, going back to the dawning of time itself (well, ok, 1694) when men were proper men and wore giant powdered wigs - the very first pound note minted by the Bank of England was issued – as a credit note, and issued to a member of the public at a set rate of interest through a commercial bank. So how was that pound paid back? Well, it was paid back at a slightly higher rate of interest – by another pound. But where did that pound come from? Well, it also had to be loaned into existence by the Bank of England. And had interest on it. So you know you have two pounds. And a third was needed to pay off that interest…

Once you have your head round that, you understand that our system requires an ever-increasing expansion of the money supply, or the whole thing collapses. And here we are today, with trillions floating around (until relatively recently, you never really heard the word trillion used in financial discourse, did you? QED). At some point the expansionary graph goes parabolic, and we arrive at our boiling-stones-for-soup stage.

Gordon Brown’s (do you remember his “I’m not Flash – I’m Gordon” line? That was great. What times) total government spend in his last year in 2010, was £550 billion. Since then we’ve had 14 years of Tory austerity, right? So how much will Hunt spend this year? Less right? As we’ve had austerity, innit? Actually, no: it’s £1.4 trillion. Oh.

Except the government isn’t taking in £1.4 trillion – it takes in 10% less than that, which will have to be borrowed. This is because of the nature of the system. Debt increases over time, faster than earnings. Consequently, today we spend more on interest on the debt we have accrued as a country than we will on Defence, and this amount is growing. Amazing.

This is inherently destabilising – because we are getting poorer in real terms as the ever increasing money supply degrades the value of the currency, and thanks to the Tory’s more or less open border policy there is no pressure for associated wage growth, not to mention the fact that we have had a long-term genius policy to remove reliable base-load home-grown power and make energy progressively more expensive – consequently living standards have been declining for twenty years. It also explains why inflation will come roaring back to even higher levels in due course, after its recent dip: it only dipped this year because the money supply has been artificially strangled, and it can’t keep decreasing for long otherwise the system will collapse, QE(D).  

Taxes will go up and up to try and keep on top of this debt, which it can’t, and at some point people will realize that the cost of their morning coffee isn’t going up – it’s the same cup of coffee, it’s just that the value of the pound is simply melting away. And, I mean, what’s the point of working when costs are sky-rocketing, and taxes are at insane levels? So maybe just check out. Quit your job to raise chickens. Live on a yacht (maybe not with the chickens). Even Tory MPs on their Ministerial salaries are barely covering the cost of their rent(-boys).

A 25% deficit is banana republic levels, realistically, so still a way off – but a financial crisis will easily add 14% to our current 10%, then we’re within cloth-touching distance. And once we have crossed through this phase transition, then it’s time to panic. Buy whatever hard assets you can. Empty the supermarkets of noodles. Quick tip: if you’re going to panic, panic first.

And this will, as I have said, likely be in 2026/2027. Among other things, Kondratiev was a very clever Russian chap indeed, and his commodity cycle analysis predicting major global-macro disasters hasn’t been wrong yet.

So who are you going to vote for? Well, none of the pre-selected candidates we are allowed to grant power offer any alternative to the financial Apocalypse which faces us, as they offer nothing different to our current trajectory. The OBR won’t let them, anyway. So maybe don’t vote. Who cares. I’ve never been fully on board with the view that we must vote, as people died for it: I mean, people died for the Crusades too, but I’m not sure even the famously war-like Liberal Democrats want us to re-take Jerusalem (but then I haven’t read their manifesto yet. Actually: NO ONE MENTION THIS TO RISHI FOR GODSSAKE).

So best of luck everyone. Vote if you want. Here’s to a new Glorious Leader. And wake me up when it’s quitting time.

“Gold is money. Everything else is credit.” - J.P Morgan (1912)

What’s going to happen to house prices over the next two years? Most people think they'll collapse. They might - but I don't think they will.

Why? Well, let’s start with looking at where money itself comes from, and the money that goes into housing in particular. Despite what some think, it’s not mostly printed by the Bank of England: in fact, banks notes are a tiny percentage of our money supply. The vast majority of money in our economy - well over 90% - is loaned into existence: in other words, it starts off as credit, being extended by a bank to a borrower, created out of thin air by the bank on a computer screen.

Now, imagine you’re a banker. Think of it! The money! The power! The sheer sexiness of staring at excel spreadsheets all day in a very well-cut suit….. mmmmmm…… crumbs I miss being a banker. Anyway: now imagine you have to lend £250,000 pounds to meet your bonus criteria, and you have a choice - you can lend to: 

(a) a person to buy a house

or

(b) a new start-up business.

Option (a) takes all of ten minutes to do due diligence on - just look at a few pay slips, and the house valuation, then pop out for a long cocaine-themed lunch - and best of all, if it goes wrong, you can confiscate the property, or force them to sell it and get the money back that way. 

Winning!

Option (b) however, is quite tricky: how on earth are you to judge whether their business plan is going to work or not? I mean you’re a banker for Chrissakes, not someone who knows anything about commerce or money. And what if it goes wrong? You’ll just lose the £250,000 and have nothing to confiscate. Crumbs. I think I need a long lunch to recover from just thinking about it.

Accordingly, most bankers would far rather lend into the housing market than to productive businesses - and the statistics bear that out: 60% of new bank lending goes into residential housing, less than a third into new businesses.

Keep that in the back of your mind. 

Now imagine you’re a politician, with an election coming up - or maybe you've just won one and need to get things motoring. A politician! Think of it! The power! The erm, lack of legitimate sources of money. The sheer sexiness of….erm….legislating, erm….. Anyway: you need to get GDP expanding, as otherwise you’ll lose and have to go back to being a banker.

Now, expansion in GDP can be driven by three things: (i) productivity growth, (ii)  population increase, or (iii) debt.

Take the first driver of growth, productivity: this has been flat in the UK since 2005. Since that year, we have been a net energy importer, and combined with a current account deficit, this element of growth has effectively stalled. Unsurprisingly, as you can’t escape physics: the correlation between energy and economic productivity is approximately 0.99 - and if you need to import energy, you need to buy it with money you’ve earned in exports. Which we’re not. Hence we’re stagnating. Simple (FYI this, not the fact she liked being nasty to northerners, is why we started growing when Thatcher came to power: we happily at the time found large amounts of oil and gas in the North sea. Which is now running out…)

Ok, so option (i) is not going to help.

What about option (ii)? Well, importing more and more of the world every year to boost GDP is increasingly off the cards: people are starting to work out that per capita GDP is partly negatively correlated with this, and if continued, it might lead to a British Trump. Or a second one, depending on your viewpoint.

So this leaves you option (iii): debt. Lots more of it. Let’s pump more into the stagnant corpse of the British economy so it makes a “wheeeee” sound as it leaks out, which in the short term voters will mistake for actual, real, growth, not just debt-fulled GDP expansion. This is basically all you have left at this stage.

Combine this with a recent collapse in money supply after the unprecedented interest rate hikes: the one thing that a government fears, other than scary monsters, is deflation - as given the unprecedented debt levels we have as a country, this could easily spiral into outright default, which is unthinkable. Hey presto, you have the perfect rationale for the government to initiate a final, gratuitous debt-binge, before the whole thing inevitably collapses, like a banker on cocai….(ok, might stop that metaphor before you get the wrong impression of my former life in banking).

So, as a politician, how are you going to do this, and get the debt pumps flowing so all those lovely votes will flow after them? Well, by leaning on banks to lend. And where will this debt go? Well ultimately obviously into lunch-expense accounts for bankers, but first…into housing.

There could be a major geo-political event that means this doesn’t happen - this process is not inevitable. Xi Jinping might fancy an extended summer holiday in Taiwan (and take the People’s Liberation Army with him as a special treat - good beaches apparently). The Houthis might decide to invade Wales. New Zealand might invade Australia. Or the bubble may pop through subconscious political hari-kari. This argument does suppose that politicians have some capacity for rational thought left, which is not a given. Who knows.

House prices will go down eventually. Our fiat current currency system is going to collapse - it’s simple mathematics. But, what’s my short-term base case - ie what is probably going to happen to house prices in the next two years? Well, they'll probably go up.

And why? See above.

Boom Boom Boom Boom

Boom, Boom, Boom, Boom,

Boom, Boom, Boom,

Boom, Boom, Boom, Boom,

Boom, Boom, Boom.

The German Guns, by Private Baldrick

The above poem was, of course, recited by Baldrick in the seminal television series Blackadder Goes Forth - you might remember that Baldrick was notably surprised when Captain Blackadder guessed the final line. 

Captain Blackadder's comment on it could also probably be applied to the current government's run in office: "it started badly, tailed off a little in the middle and the less said about the end the better — but apart from that it was excellent." 

Anyway, why have I started this increasingly sporadic blogpost with it, apart from the opportunity for an early cheap dig? Well, back to that in a second.

Readers of this increasingly sporadic blog (and there could be as many as three in Northern Europe alone) will know that I am somewhat of a - let's face it - tinfoil hat wearing doom-monger. And with some justification, I feel - we are clearly not being governed by people who are entirely sane, and our fiat monetary system is, by its nature, not sustainable. 

Take the talk around inflation recently, as a random example of their tenuous grip on reality: our elites are firmly of the opinion now - and this has become a 'sophisticated' and grown-up thing to say - that wage growth is a bad thing for the country, and we need a recession to reign in inflation.

Apart from the fact that, in no sane system, should people on average earning more be a bad thing - it's also complete nonsense, if you think about it for more than about two minutes. The UK's Brahmin caste that run everything think that lower wages and a recession are good for reducing inflation, as they think that people earning less on average means prices dropping: take a factory with ten employees - one worker gets fired, now nine people chase the same amount of goods instead of ten, prices go down, job done.

Except - think about it - now only nine people are producing goods, so the supply of goods also drops in line with the drop in workers. Same amount of goods, same amount of wages to be spent = no drop in inflation. But one less employed worker.

Obvious. Inflation is a monetary phenomenon (ie related to money printing).

The news now is pretty bleak, I think we'd all agree. So, given the above...

...we're going to have a panic and everything - including house prices - is going to collapse now, right?

I actually think, erm, no - and not only because when you're a doom-mongering loon it's a bit unnerving when more and more people start agreeing with you, as it makes us feel uncomfortable and we change our minds. It's not this - don't panic - I still think our monetary system will collapse in the end - all fiat currency systems tried so far have, and we'll have to boil stones for soup in due course.

It's just that, with a now falling money supply as banks crush credit in a panic, and with massive, unprecedented debt levels and huge fiscal problems all over the place - I think we are now primed for some further money creation by government. The one thing indebted governments fear is deflation (as this increases the real size of their debt, and they potentially might not be able to print their way out of the death spiral) - and if this looks like it might even potentially happen, they'll open the money spigot. 

This will, I'd wager, lead to a short sugar boom as this money starts to hit the economy - maybe for two or three years - what is called by Austrian economists a "crack-up boom". Labour could well contribute to this.

Hence the poem.

Based on things like, say, the end of the current Kondratiev wave and the law of econonic rents (won't discuss this here, but they're spot on) indicating that there are probably two to three more years to go in the current real estate cycle, I'd say 2026 is a good bet for a crash. A bigee. A whooper. Schwerer Gustav-sized.

At that stage I might write another post - except it will actually be about the German guns.

Boom Boom Boom Boom.

Il y a une Couille dans le Potage

 

The title of the blog post comes from a French phrase I am fond of - it means: “there is a testicle in the soup”. This is I think a fairly accurate description of our economy - or there are at least testicles in charge of it. Ok, that’s the last time I’ll mention testicles. I think.

Anyway, where are we? Well, not that anyone remembers more than about 24hrs back these days, but everyone – and I mean, pretty much everyone – told you a year ago that inflation would now be at about 3% - 4% in the UK (everyone that is apart from me). But it’s still not far off 10%. In fairness, M2 money supply is, it appears, beginning to contract, so according to the Equation of Exchange*, inflation could now drop a bit.

But food inflation is 20% - and, perhaps most importantly, wage inflation is now 7%. Fascinatingly, junior doctors are asking for 35%, which could start a bit of a precedent. This is why I think the most important question at the moment is still – what will happen to inflation in the UK by the end of year?

I still can’t get round the fact that in April 2020 the UK became the first Western economy in history to directly finance the deficit using QE-like measures – ie print money for government spending. This is, quite exactly, what economic-guru Mugabe did (which, predictably, ended in hyperinflation). We then spent huge amounts of money subsidising wages. 

Consequently, we are now so much in debt that, were we to stop all government spending tomorrow – literally cease all new activity – we would still, according to my ciggie packet calculations, face a bill of approximately £6,000 per person, per year, just to pay the interest on the public debt we already owe.

So we now have inflation, but can’t make real rates positive to control it, as most of our debt is indexed, and this would quickly bankrupt the country. Combined with that, two thirds of mortgage holders have yet to feel the impact of the recent period of the fastest rate rises in UK economic history, and the Bank of England – definitely run by testicles (sorry) – are still putting base rates up and up, as they can’t distinguish between us at the US.

And now, predictably, there is a threat of credit contracting, as banking models are caput – ie they are lending long at low rates, and short term rates are spiking: so their entire business model no longer works. There’s just one small teeny problem: our system cannot sustain itself in a credit deflating environment.

Just a brief segue to Turkey: I remember when I was still working as a happily rich and moral-free (glorious days) banker, the moment 1 Turkish lira came very close to equalling 1 USD: since then the Turkish money supply has exploded, and the lira has accordingly sunk and sunk – and it’s now not far off 20 to 1 USD (although I haven’t checked for a while). So the obvious questions is: well, why don’t they just stop printing money?

Well, they can’t. Their system will implode.

Back to the UK: we have printed all this money, and inflation is now very high – so why don’t we just stop printing money?

Well, we, erm….well, we can’t.

And now we have a threat of credit contraction and a liquidity crisis: and that’s the thing about ending up with very high inflation – you need a very strong deflationary risk first, before the government and fiscal authorities panic and step in, to stop the system falling over: and once again provide massive monetary stimulus. Which will create the very high inflation - which is, inevitably, coming down the road at us.

This is only slightly complicated by the fact that CPI, the petard by which Sunak is in the process of being self-hoisted by, is produced by the government – ie the government has set itself a target to lose weight – but it also controls the scales. A bit like me going to Weightwatchers, and be able to say I have lost 2kg, each week, as I’m the only one who has access to the scales.

By the way, I lost 2kg this week. And also the week before. Hurrah! The only problem is, at some point people will notice I am just getting fat.

Oh testicles.

___________________________________________________________________________________

* "The equation of exchange shows that the money supply M times its velocity V equals nominal GDP. Velocity is the number of times the money supply is spent to obtain the goods and services that make up GDP during a particular time period."

Escape the Chains of Humanity And Let Madness Be Your Guide

One of the big questions this year, I think, will be what happens to inflation. I think it might dip in the face of credit destruction by banks, but watching it in the medium term will be fascinating.

Just a quick recap: the rate of inflation was rising, and we were told it was ‘transitory’ and would stop rising soon. Then it kept rising. Then Russia invaded Ukraine, and, a long time after it started rising, we were told that is started rising because of the invasion.

Everyone nodded, and now that’s the accepted original cause, even if the cause of what happened, happened after what happened. It all makes perfect sense. Shhh now, shhh.....there there...

The magnitude of its importance however is reflected in the fact it was one of the main points covered by Sunak today in his big speech. All in all, I thought it was quite an interesting speech by Sunak; in case you missed it – he basically set out the Government’s priorities.

It was quite interesting in the sense that he gave a speech, and it has been thoughtfully considered, and everyone is discussing the pros and cons etc, but no one is going “WHAT THE HELL! WHAT IS THIS? THIS IS MAD! WHAT HAS HAPPENED? ARGH!”.

Why should this have been the normal rational response, in a normal, rational world? Why is the reaction that has occurred proof that all of our elite are completely insane?

Well, its quite straightforward. The position of the government now is:

1.      The Bank of England is in charge of controlling inflation, and has an inflation target of 2%.

2.      The Government now also has an inflation target, but this is 5%.

3.      Inflation is also, according to the government (and the Bank of England) largely down to factors out of Bank of England or Government control.

All makes perfect sense, doesn’t it? It does if you learn to hide from the cold, harsh wind of reality…

This is like me on New Year’s day, possibly still quite drunk from the night before, saying:

“Right! I’m too fat. I have a plan. Weight loss is outsourced to a third party, and it’s their responsibility for making my weight loss plan. So, I will also set my own, different weight loss plan. Oh, and also, whether I lose weight doesn’t matter, as whether or not I lose weight is down to factors that are beyond my control.”

And everyone goes: oohh clever.

I suppose, if you were trying to insert some rationality into analysis, you could also say that it’s quite interesting that he listed various priorities - “the People’s Priorities” (or the Priorities of People's Hearts maybe, I wasn't really listening at that point) but mentioned nothing – NOTHING – in his priority list about housing.

From a certain section of the commentarial (any journalist under 40 who can't afford a house, basically), there comes the constant cry: build more houses! But now, interestingly, the average cost of building a new house is slightly above the average cost of a house, nationally, depending on your data source. So it becomes even more paradoxical if you think this is the only answer: the policy would be to set another target the Government won't control, and to ask house building companies to solve the problem by being in charge of building houses, at a loss on each house they build, and also to reduce the price of their monopoly product overall, but with no incentive to. Hence possibly why he ignored the topic completely. He probably thought: "yah know what? There's enough madness already for one day. Just right."

I would write more about the rising cost of construction now, but I mean, what’s the point? It’s 2023. It’s time to let go. Nothing is real now, the last glimmers of sanity have been extinguished in the rain of the first week of January.

I've said it before, and I'll say it again: it's time to sit back, have another biscuit, wave good bye to your loved ones, and set sail on the sea of madness.

Happy sailing.

Lost in the Arctic

 

I haven’t written a blog post for a while. This is mainly as I am slightly alarmed that my not-entirely-optimistic take on the path we’re taking as a country (everything is going to fall apart) has gone mainstream, and the one thing a tinfoil-hat wearing loon finds more disturbing than anything else is when people start agreeing with him. I have written frequently that currency debasement leads to high inflation, instability and ultimately social unrest…and, well, I suppose I could just say that, now, we are living in interesting times, are we not…

There was a story I was fascinated by as a kid: about a Victorian voyage of exploration through the Arctic where a ship got stick in the ice over winter: as the months of darkness went by, it transpired that the officers’ food supply was contaminated, and they went slowly mad as a result. The crew’s food was not affected: but although sane, the crew had to obey the increasingly bizarre commandments of their officers, or risk death for disobedience.

I’m beginning to see how the crew must have felt. I’d previously thought we were run by idiots: I am beginning to wonder if the elites across the west – not just the politicians, but the media, commentariat, top journalists  etc – are  in fact, actually, slightly mad too. Stuck staring at their twitter feeds, the real world adjacent increasingly alien to them, I wonder if their brains are going a bit, well…off.

Take energy: in the previous nine years, we have closed down most of our remaining thermal power stations (twelve in total) and shut down nuclear capacity, and only built as a replacement some intermittent renewables, and as a stop gap are relying on gas. We then, effectively, decided to turn off access to that gas continent-wide, by sanctioning Russia. And yet, the fact that energy prices are going wild, and we face blackouts, is - according to our elites, and I am told by Radio 4 time and again - somehow…erm, well unexpected?

In what world is there no sane person who didn’t think this would happen?

We’re constantly told “no one could have predicted this…” What? How is this not obvious? If you shut down reliable power you have…no reliable power. Platitudes, meet physics. Physics, meet platitudes.

Or, take inflation: inflation took hold prior to the Ukraine invasion (although this is now ignored, obviously). It took hold as it is directly as a result of unrestricted, massive, money printing, which we undertook when we idiotically shut the country down for COVID: and inflation is now being forced ever higher by the Wiemerisation of the energy markets. And yet, we are told constantly – no one could have predicted this…

What? It’s eminently f****g obvious.

The total amount of money that changes hands in an economy, equals the total money value of goods that change hands, ie nominal spending equals nominal income. In economics, this is called the Equation of Exchange. Basically, if you increase money printing, the price of stuff goes up. It’s not the only thing that’s important – you also need velocity to increase – as if money is printed and is kept in someone’s pocket, then clearly prices are unchanged. But at some point, people realise money is losing value, the currency is being debased, and bring forward purchases, which in turn stimulates inflation further. And people are starting to realise that 40% of all money printed in the west – ever – has been printed in the last two years. And inflation is rising, and rising, and rising...

And only today Germany has said that, to fight inflation, they are going to print another £65 billion euros. No doubt Truss is shortly going to announce that we’ll print another £100 billion or so, again to, ultimately, “fight inflation”.

These people are mad.

Oh, and what happened to the crew, you might ask? Well, they all died. Cold, starving and driven to death by insane sadists with no grip on reality.

I’m sure we’ll be fine though.