The UK: hell-bent on economic and social Hari Kari!
By Colin, our very own farmer from downunder
So barely a month into office and new PM, Miss Trust [aka Chucky’s Bride], already has her country mired in a hellish debt spiral and economic crisis. And not the least because of her dogged support for the murderous neo-Nazi regime that Warshington/Natostan installed in Ukraine.
The UK/Ukraine flags on her lapel kind of says it all does it not?
So how does all of this work in terms of carry trades, the bond market, interest rates, currency markets, and the skyrocketing energy costs… in a word… somewhat BADLY.
Think of this entire debacle as a vicious circle that feeds upon itself like a snake devouring its tail. Hopefully, this will mean that this mega-maniac might not be ensconced in Number 10 Downing Street for very long. Mind you even a cursory glance at the financial markets means barely one month is far too long a stint.
The shortest stay on record for a UK PM currently sits with George Canning who in 1827 lasted a mere 119 days. He too had form as a Foreign Secretary, but mainly for outsmarting Napoleon and in preventing the French from annexing South America.
This latest creature, however, came to power with around 0.6% of support from UK citizens! So too her performance as FM was a complete debacle as she spewed rabid Russiaphobia seemingly whenever she opened her gob on the public stage. Even worse, her mainstay as FM, in jockeying for the PM position, appeared to be publically announcing how much she relished the idea of being in command of her country’s nuclear red button.
Surely the crisis she and Kwasi have added to will result in a vote of no confidence in this creature. After all, even one of her own party colleagues describes her as a “human hand-grenade”.
I can just hear it now… most of the Tory Party must be muttering under their breath as to how much they miss even the feckless blathering BoJo… who would have thunk?
Of course, BoJo is almost as dangerous anyway… remember he was the blathering imbecile who talked President Z out of peace talks with Russia. Apparently, he somehow managed to make a very compelling case out of them fighting down to the very last available Ukrainian soldier.
“The first is that Putin is a war criminal; he should be pressured, not negotiated with. And the second is that even if Ukraine is ready to sign some agreements on guarantees with Putin, they are not. We can sign [an agreement] with you [Ukraine], but not with him. Anyway, he will screw everyone over,” is how one of Zelenskyy’s close associates summed up the essence of Johnson’s visit…
Johnson’s position was that the collective West, which back in February had suggested Zelenskyy should surrender and flee, now felt that Putin was not really as powerful as they had previously imagined. Moreover, there is a chance to “press” him. And the West wants to use it.”
MEANWHILE BACK IN THE REALMS OF PERFIDIOUS ALBION
This is as much about the UK bond market and the global carry trade as anything else. The self-induced energy crisis has quickly led to this shocking spiral into more and more debt for a country that was already up to its eyeballs in it long before the UK decided to seek glory as the second biggest cheerleader for widespread regional destruction with the escalating Ukraine debacle.
Hand in hand of course was the incessant poking of the Russian bear’s eyes with a very pointy stick. No prizes for predicting how this is all turning out then.
STEPS IN THE CYCLE… or a flow chart, if you like, and it’s all decidedly downhill >>>
#1 Energy bills skyrocket because Uncle $am instructed the UK and Europe that it is imperative that they reduce their dependence on Russian Energy, even though the RF was the most reliable and far and away the cheapest long-term energy source for their entire region >>>
#2 The UK Govt has to start borrowing so that they could pay to subsidise energy bills in order to avoid economic and social bedlam. How do they do this… offering more bonds on the market of course [often called Gilts in the UK financial jargon]… bonds are just IOUs that pay an interest fee to the holder >>>
#3 More bonds on the market = Demand drops >>>
#4 Interest on these bonds rises >>>
#5 Investor pessimism leads to currency depreciation… somewhere around 21% to date >>>
#6 This means now that, not only the supply and demand factors have massively spiked the UK’s energy bill, but now the weak currency means more price rises >>>
#7 The nominally high yields on the UK bonds don’t attract any overseas buyers of these bonds because the devaluation of the British £ robs any profit from the international carry trade. The BOE has to put these bonds onto its rapidly expanding balance sheet.
#7 Out-of-control energy costs and subsidising the cost to consumers = more Govt debt = more Govt bonds issued = DISASTROUS OUT OF CONTROL DEBT SPIRAL = Miss Trust and Kwasi, the latest Councillor of the Exchequer, such a grand label for a Finance Minister, barely one month into their roles finding themselves in the very deepest of runny doo-doos >>>
#8 The reality that the UK is technically insolvent and eventually the realisation [hopefully although I am not holding my breath] that declaring solidarity with neo-Nazi regimes and exponentially increasing energy costs at the same time is not a particularly grand plan.
PS… yes indeed, re the screenshot below and the headline “The economic times! And also, to think I went to considerable trouble to find a particularly flattering shot!
Nice work Col. I feel for those working class Brits whose pain is slowly growing, but then I think of those elsewhere who have suffered for centuries under the Anglo-Norman yoke. My friends think that their comfortable existence is entirely due to their own efforts. The world needs an education… Read more »
Thank you Steve. Yeah re the “education revolution”. Here in NZ it is a monumental task. Starting off badly with our youngsters, and then ending up at University level with students regularly often being taught mistruths and memes that are completely at odds with science by some of the most… Read more »