LATEST: Owl of Minerva Seen Flying In Broad Daylight

Hegel once wrote “...the owl of Minerva spreads its wings only with the coming of the dusk”. Minerva was the Roman version of Athena, the Greek goddess of wisdom, and the owl was the goddess’s symbol. So what did Hegel mean by this remark? I am no expert, but one interpretation is simply that we learn only by reflecting on the day when it is passing.

HOWEVER, regular readers of this blog will be aware that I have spent the last FIFTEEN YEARS wearing a tinfoil hat and shouting at debt bubbles. With apologies to Hegel: all of what is happening to our society now, as a consequence, is blindingly obvious and has been so well, well before actual dusk. 

Like, in the middle of the day.

Incidentally, I wanted to title this column after a quote by Martin Amis - but changed my mind as I’m not a fan of making a swear. The quote in question was made in passing to Robert Conquest, when he wrote his famous 1968 book on Stalin, titled “The Great Terror”. This work essentially vindicated all of Conquest’s previous research – chiefly, centering on claims that Stalin had killed millions - that no one on the left had ever wanted to admit, but was now blindingly obvious to everyone and could no longer be ignored.

Martin Amis suggested the book be reissued under the title I Told You So, You Fucking Fools.

And now, well…we are where we are.

The Roman Empire collapsed shortly after their silver mines ran out of silver, and they started debasing their currency en masse.

Now to the UK: we have debased our currency to the point that even left wing people are starting to notice.

Combine the above with the fact that our energy system is insane, and increasingly centred around windmills - a 9^th century technology – and we have had no economic growth for two decades.

The tax base is diminishing rapidly as the minority who keep the system afloat pay more and more tax, and are predictably checking out. Income distribution is now - and this is unbelievable, but completely true - flatter than it was in the USSR.

53% of the country take out more from the system than they put in. It doesn’t take Minerva to work out that this is not sustainable.

On top of this, 13 million people - net - have emigrated to the UK in the last decade and a half, and we now have a society made up of people with very little in common.

And now global trade is dying, and because we have spent the last two generations planning defence entirely around defending the Fulda Gap, we don’t know how to defend our actual homeland, or our trade.

So what happens next?

Very obviously, property taxes will rise and rise. The Mansion Tax threshold will be lowered next. Debasement will continue.

The non-state professional classes will continue to flee the UK – particularly as AI is going to do to the vestigial middle what has already happened to blue collar workers. Maybe AI is writing this? Who knows. (This is only a problem as I have a Chinese laptop, so this will limit what I can write. Just kidding! That’s not true at all - I can write whatever I Xi Jinping Is A Glorious Leader.)

So – given we have debased our currency, increased taxes and dramatically increased dependents on the state - what do we think is going to happen next, gang?

The timing is, perhaps, hard to pin down, but the direction is not. Autumn budget, Spring ’27 election (on the rationale that the Right has never been more divided), Andrew (stop calling him “Andy”!) Burnham nevertheless fails to win a majority, coalition with the Greens, Economic Armageddon?

Then what – hyperinflation? Social disintegration? The subsequent rise of a right-wing government version of a Potemkin village?

Either way, it’s not good.

Which leads me to my last point, directed to our Glorious Elites:

I told you so, you fucking fools.

Money for Nothing

I'd like you to consider two facts.

Fact 1: According to Our World in Data, the population of the globe in 2015 was 7.3 billion people. 

Context: of this total, roughly 3.5 billion people – or just under half - were sustained by food produced using synthetic nitrogen fertilizers, according to estimates based on the Haber-Bosch process.

Fact 2: The Strait of Hormuz is now shut.

Context: Trump, not the most straight laced of guys it appears, is trying to negotiate it’s opening with a bunch of total lunatics, having just wiped out half of their mates. The markets remain convinced this will all be fine, which, by the way, reminds me of the financial crisis – GFC in the parlance – in late 2007, when markets were at an all time high, just as everything was clearly falling apart and the traders on the desk at the bank I was working at went and bought shotguns to protect against the coming anarchy - which was only postponed by the biggest money print since John Law’s time (see: https://mises.org/mises-wire/what-john-law-taught-us-about-perils-printing-money).

What links Facts 1 & 2? Well, just under half of the world’s urea – used to make fertilizer – goes through the Strait: or at least it did, until it was closed. Now, no more fertilizer. This is Very Bad.

Something else to consider: Very Large Crude Carriers – VLCCs – travel slowly and take weeks to get to their destination. The last tanker to leave the Strait as per normal passage – on 28^th February – will arrive next week. Therefore, the majority of the world has yet to experience any physical shortages, because a large chunk of stuff is still floating at sea. They are only experiencing artificial shortgages wrought by the anticipation of actual shortages.

What is coming down the global supply pipe now, is…well, air. And this reminds me of early February 2020, before people quite realised how nuts the world would go over mild flu.

Fact 3 to consider: if the strait of Hormuz remains shut, then the global economy collapses. This is a mathematical certainty. But even if it opens fully in the next few weeks, we still face the largest energy shock the world has ever faced.

So…we are facing a combination of the GFC and COVID, both at once, at the end of the biggest debt bubble the world has ever seen.

Are we fucked? Well yes of course we are, stupid question. But how fucked? And when will this fucking-of-us occur?

To answer how fucked we are, we must understand that energy is life.

Our standard of living is, in fact, measured by how much energy we get to waste.

Now, we as a country are no longer self sufficient in energy. Ed Miliband has banned oil and gas exploration, Alok Sharma actually blew up several power stations using actual explosives (see: https://www.itv.com/news/calendar/2021-08-22/power-station-landmark-wiped-off-yorkshire-skyline), and our slithering elites are intent on powering the country using windmills.

Why is this bad? Well, energy has to be produced at the moment it is consumed. There is no wide scale energy storage technology in the UK. Intermittent renewables, based on infrastrure made by steel produced in turn by burning coal in China, cannot produce reliable baseload. Therefore, in future, energy will not be there when we want it to be, if it is there at all. Closing down our hydrocarbon baseload energy system faster than we can build out a replacement (or even before we know if we can build out a replacement) has already increased electricity prices to higher than anyone else in the sane, and even insane, world. People have started to notice that the platitudes they’ve been fed by our elites around green energy are garbage, and also that there’s large scale preference falsificiation among those that advice our clueless – or likely insane – elites.

Our elites think we can offset this coming energy shortage by importing from Europe. This obviously worsens our critical balance of payments problem, but even ignoring that - according to the Statistical Review of World Energy (see: https://www.energyinst.org/statistical-review), Europe consumes 38 exajoules of hydrocarbons every year, but produces only 5.5 exajoules (an exajoule is a unit of energy equal to one quintillion joules), and imports the rest from a global market critically reliant on the Straight of Homuz.

And now there is a looming global shortage of hydrocarbons, given the Strait of Hormuz is shut. So our country's plan is to continue to shut down our domestic energy production, and instead rely on importing energy from Europe, who themselves import most of their energy – and who are about to not even be able to do much of that.

So what will our government do when the shit hits the windfarm?

Well, the government still spends 5% more every year than it takes in, in tax. The interest on all this debt is now £140 billion – again: that’s just to pay off the interest. Not long ago it was £100 billion. Soon it will be £200 billion.

The government will not default. They will have to print, faster and faster, which will devalue the GBP.

Because of this devaluation, interest rates will have to go up, by a lot, to keep the Ponzi going. The key point is that they can print money, but they cannot print energy, so, QED, our standard of living will go down even further.

Future A: if we're lucky, house prices will tread water in nominal terms and the banks just about stay upright, whilst high inflation causes significant drops to house prices in real terms, and no one will notice. Food prices go up, which we will notice, but it is still at least there, albeit sometimes patchily. Strait opens, we somehow stagger on, something turns up, we continue a gradual decline into the sunset. Rationing and veggies allround. 

Future B: if we're not lucky, the gibbering gaboons in government terrifyingly, try to actually help, by, for example, subsidizing energy consumption, whilst continuing to reduce production, which will hasten a crash. Kier goes sharpish, Angela Rayner comes in. Bond yields spike even faster, way above 5%. The Rayner government won’t be abe to respond as they will have no idea what is happening, or why.

Printing continues, energy starts to run out. And then, in late 2027, we all run out of credit. Nothing works. 

We are fucked. 

So - A or B? Whadday reckon?