Nobody cares - enough
We are fooked. Here’s what’s coming. The question comes. Do you care enough?
The headline U.K. inflation rate in March may be ‘only’ 7% but it won’t stop there. Some are predicting 8-9% by year end.
Come June, one of our best known local eateries will have put prices up by 20.7% in the period 31/3>1/6/2022. I don’t blame them. They cite staff, fuel and raw material cost increases. No hospitality business can survive the current round of cost increases without inflating prices. And then there is the health and social care tax hike of 1.5% which just kicked in.
And if you thought to save money on heating bills by hanging out in the local cosy bar then watch out. The cost of raw materials in beer making is going up and guess what? Your pint will cost more. Soon.
But all of this makes me wonder how governments calculate inflation figures.
Cooking oil has more than doubled in price in recent months and quality fresh fish now costs an average of £5-6 a portion, regardless of species. Assuming you want the best then organic chicken will set you back £13-16 for a whole bird. These are not outliers. Staples of all kinds are increasing in cost and at pace. I suspect the long era of cheap food will soon be a distant memory. If we want British farming to survive then significant price increases are inevitable. It would not surprise me to see the average shopping basket increase by some 15-20% this year. If you think that’s alarmist then I’d remind readers that is exactly what happened almost overnight in France when the euro was introduced.
I also wonder what happens when (or if?) fuel costs fall back? Energy is now a major cost component for any business.
In the U.K., the energy price cap increased 54% for domestic customers from 1st April while France mandated an increase of 4%. And there’s more to come in the autumn. There is no price cap for businesses so again, watch out.
In the meantime we have a Chancellor of the Exchequer who has not only been fined for breaking COVID laws, but also whose family tax arrangements ensure that a significant portion of family income and wealth is sheltered from U.K. taxes all while real incomes for 99% of people are declining. It’s no wonder he’s gone from hero to zero in the space of a few weeks.
My problem in all this is the rising sense of helplessness of living in a country where inequality in favour of an elected dictatorship and their enablers looks like the norm. It feels like living in a world where nobody cares enough to come up with radical alternatives that benefit everyone.
To steal from professor Scott Galloway - life is so rich! #covid #energy #taxes #hypocrisy
Former Citibank trader Gary of "Gary's Economics" (https://www.youtube.com/c/GarysEconomics) has a similar view, with some good economic analysis to back it up. He believes that a wealth tax is the only way to rebalance things. His reasoning: as well as the supply-side issues causing inflation, a lot of money got created and added to the economy in the last few years. The problem is, most of it ended up with rich people who don't spend it other than to acquire assets which they either sit on or rent out. This is not good for the economy or for society as a whole. Even with rising interest rates, the effective rate (bank rate minus inflation rate) is going to be negative for the foreseeable future, and so even those with a bit of money trying to save it via a savings account are losing out in real terms. It seems like we are basically heading back to feudalism at this rate.
The political parties no longer represent anything and are full of career politicians.
The US fed has created more money since 2008 than existed before
https://www.cityam.com/almost-a-fifth-of-all-us-dollars-were-created-this-year/
The UN has failed as a credible international arbitrator and is toothless.
Even if people do 'care' it is incredibly hard to know, in a world of heavy big tech censorship and media cancelling what an individual can do to try to lessen the steep trajectory down the western world is on.
Voters in the US midterms will destroy the DNC/Democrat administration, but there is no one to replace them. Johnson will resign and be replaced by another hood ornament.
'Under the relentless thrust of accelerating over-population and increasing over-organization, and by means of ever more effective methods of mind-manipulation, the democracies will change their nature; the quaint old forms—elections, parliaments, Supreme Courts and all the rest—will remain. The underlying substance will be a new kind of non-violent totalitarianism. All the traditional names, all the hallowed slogans will remain exactly what they were in the good old days. Democracy and freedom will be the theme of every broadcast and editorial—but democracy and freedom in a strictly Pickwickian sense. Meanwhile the ruling oligarchy and its highly trained elite of soldiers, policemen, thought-manufacturers and mind-manipulators will quietly run the show as they see fit.'
'Brave New World revisited' by Huxley
Vexxing.