Most everyday products cheaper in UK than in EU

As European Union countries face recession with the price of everyday use products being more expensive than in the United Kingdom, the anti-Brexit argument collapses. After Covid and following the hardships generated by a conflict in Eastern Europe, the British economy is on the way up. No recession in the horizon for British consumers and British workers. 

If prices in Continental Europe are higher, Britain faces no limits in terms of acquiring basic products outside the European Union at lower prices. The benefits of this is twofold. Firstly, it allows Britain to ease the pressure on British consumers and, secondly, it allows Britain to interact more with Developing Economies thus improving trade relations with less fortunate countries.

Outside the parentage of the European Union, Britain can now go for expansion across the rest of the world, something that will improve Britain's standing as a trading nation. Massive areas of the world, highly populated areas of the world, are now open for business. 

Potash, critically important resource for both agriculture and weapons industries, does not come from Germany, France or any other EU country. Argentina, to name just one country, has potash and companies like Rio Tinto have dealt with such an important resource. Most of the world outside the European Union is mainly agricultural. So this is a wonderful opportunity for Britain to revitalize its industrial base and expand its trade with agricultural countries.

As several EU countries know fairly well, EU is a political project. Nertherlands, Sweden, Hungary, Poland - to name a few - have been at odds with the EU for one reason or another for very fundamental reasons. Why should Netherlands have less energy and less farming? Why should Poland and Hungary be pressured to force them to accept to change their demographic make up with unbridled migration and forces to pay for their reluctance to accept demographic changes?

Present recession realities across the EU tell you that politics seems to matter more than economics and recession comes with huge social costs.

Strikes: winners and losers

 

Strikes: winners and losers

The coming months will see more strikes in Britain and this will include not only transport but also state administration, National Health Service, Education and other segments of the British economy. The idea is that workers want better deals to lose less of the value of their incomes being eroded by the inflationary process created by sanctions against the Russian Federation.

One of the outcomes has been the downgrading of the education system with most education centres having gone done in terms of education standards and there is more to come when teachers go on strike. To the damage caused by the Covid Pandemic will be added the damage caused by absenteism from classrooms caused by strikes. This is going to be also a difficult time for working families and many will face the dilemma of going to work, leaving their children alone outside schools or staying home to look after their families. This will also pose serious social risks. Having children without education and without adult supervision roaming around with little to do is certainly a recipe for disaster. 

We cannot entirely blame workers concerned about their incomes, but the very shortsighted approach of administrations that completely underestimated the impact of geopolitical decisions. Everybody with a grain of common sense could foresee that economic warfare would have repercussions not only for the British economy, but for the world's economy as a whole.  Even France with its nuclear power advantage is in dire straits as the vast majority of French nuclear reactors are not operational and this led to a direct confrontation between the French authorities and energy providers when French authorities tried to force energy providers to provide electricity at below operational margins. Similar situations occur across continental Europe and Winter has not even arrived. As temperatures fall, the true extent of the energy crisis will be felt and words like rationing and blackouts. Those who remember the early 1970's in Britain will know fairly well what it means. At one point, Britain was working three days a week. In Britain, temporary aid has been provided to help both ordinary consumers and companies deal with the brunt of energy prices but, unless such schemes are intended to be a permanent feature, sooner than later the real costs of energy will be felt across the board.

So what do strikes achieve? To begin with, those who are going to bear the brunt of strikes are going to be the most vulnerable and especially those who are part of the Zero Hour Contract economy and the black economy. With reduced economic activity, they are going to struggle to survive. Recession could soon be followed by Depression and we also what Depression means. In a recession, economic activity is severely affected but continues. In a Depression, the ultimate consequence is massive levels of unemployment. The hospitality industries - for example, were critically affected by lockdown measures during the pandemic. After that, they have had to deal with higher energy prices and many businesses came to an abrupt end. If now they to have to deal with higher energy prices and margins that do not cover their operational costs, for a vast number of businesses this will be the end game.

Any temporary gains will be followed by gigantic losses. In an economy with skyrocketting levels of borrowing, any salary increases will be swallowed by inflation.

Permacrisis: new word officially added to the English language

From now on, we live in a state of permacrisis or permanent crisis. The word has been officially added to the English language. Events of the last two years and whatever is there to come more than justify the new addition. 

Despite the fact that the BBC, Sky and other media constantly fail to report what is happening not just in Britain but also abroad and especially in Continental Europe (for whatever reason they choose to 'blackout' the news and fail in their duty of care), Europe as a whole is in crisis. In Spain, hundreds of thousands went to the streets to demand better healthcare in Spain. The situation is critical due to mismanagement and lack of medical staff. Strike is the word across Europe. 

Unfortunately, those in power seem to be more interested in geopolitics than in real politics and ordinary people will suffer as a consequence of mismanagement and short-sighted approaches. Politicians appear to be acting first and thinking later, completely oblivious to the consequences of the decisions that they are taking. Some say that we need to cut down taxes to restore financial health. Others say that we need to increase taxes to restore financial health. The summary of it all is, nobody knows with any degree of certainty what is going to happen.

Flipping a coin in the air is all we have left to do. As a consequence of it, we are paying enormous amounts of money to people who are just guessing and don't have a clue about what is going to happen. This is Democracy for you. They sit inside a debating chamber, make a few speeches about things they know nothing about and we have to accept political gambling because this is what Democracy has become.

The ones making the decisions have little or nothing to lose and it is up to ordinary members of the public to deal with the consequences of their decisions.

Utility bills go up and grocery bills go up and this is very much what leads to inflation. Now, in order to reduce inflation we raise taxes that will make utility bills and grocery bills to go up faster and lead to more inflation, but 'those who know say that increasing utility bills and grocery bills will reduce inflation'. You know that it does not make any sense. You are going to be more often than not completely out of pocket and you will have to cut down vital expenditure or get into additional and higher levels of debt. The most vulnerable stand to suffer most from what is happening but because the most vulnerable stand at the bottom of the pyramic there is a domino effect. Suddenly, the hospitality sector detects that less and less people are using their services because they cannot really afford to use their services. Balance sheets go into the red and unemployment raises its head. Not only that, is the hospitality sector suffers others sectors that provide services to the hospitality sector suffer and follow a similar paths. More unemployment is added to the pile and tax receipts start falling. So the Chacellor of the Exchequer Jeremy Hunt MP has formally declared that Britain is in recession and recession means that from now on unemployment is guaranteed.

Paralizing the economy with more and more taxes, fuelling inflation while not promoting added economic activity, will lead us to a permacrisis with higher levels of debt, unemployment and social ills. Before we had health lockdown. Now we will have economic lockdown leading to social breakdown and political instability.

  

 

Countdown: Rishi Sunak becomes British Prime Minister

 

Rishi Sunak becomes British Prime Minister and this in itself is a bit like a Christian entering the Roman Colloseum to be eaten by lions.

Given the fate of his precedecessors in recent times, the newly elected Prime Minister is well advised to keep his friends close and his enemies closer.

Perhaps this is the idea of integrating his Cabinet with people from various sides of the political map of the Conservative Party.

Hopefully, his political honeymoon will last longer but, as always, in British politics 24 hours seem like an eternity and he is very much aware that he is cruising along very treacherous waters.

It has been well established that when the electorate votes, the electorate votes for a particular political party and not for an individual. Boris Johson managed to get a majority of more than 80 seats in the House of Commons and this, at least theoretically, would give him enough room to maneuver. Having said that, with such a majority neither Boris Johnson nor Liz Truss managed to survive. The issue is then not British voters as a whole, but loyalties within the Conservative Party. For many, having avoided a General Election until now is a blessing as many risked having their seats go up in smoke if a General Election took place in the present circumstances.

The next hurdle is January 2023, month when travelling fares are usually adjusted according to rate of inflation. The British government managed to alley fears about utility rates rises until April 2023, but it cannot go on providing lifeboats if inflation keeps going up. Although TFL is said to have been thinking about a 4% fares rise, TFL has no control of other areas of public transport. The present inflation rates is above 10%. Rises can only be avoided with bigger subsidies and in the end no one wins because bigger subsidies are paid with borrowed monies. If we try to avoid borrowing then we have to think about higher taxes or budget cuts.

Lizz Truss bet on lower taxes as a way of boosting economic activity. Rishi Sunak campaigned to avoid tax cuts and therefore will have to get better results to avoid entering a cycle of higher taxes and falling tax receipts that could ultimately push the country towards austerity budgets.

Inflation is eating away public budgets. If this goes on, very soon public administration bodies, local and regional authorities will ran out of money and will be unable to maintain service levels.

British Politics: 2022 a crucially important moment

BBC? Channel 4? Radio? With audience levels falling and falling, how relevant they are compared to what they used to be 10, 20 or 30 years ago? How the digital era, including social media, have changed in terms of public opinion, in terms of their influence in decision making? This is an open conversation to talk frankly and politely.

This is about communication and about being able to listen to a wide range of points of view while keeping an open mind. Given what is going on in Europe, is there a mass media war?

Are anti-Russian measures and mass media policies leading to financial, social and political chaos in Britain and in Europe? Inflation is out of control, interest rates are rising, industrial unrest in increasing, both public debt and private debt are growing faster and faster, and countries could become unstable.

In Britain, more than a quarter of about 2.1 million mortgages could be in danger putting the banking system, once again, in danger, causing a lot more than a mere recession. What are your thoughts?

In the meantime, in Britain, as a defining moment gets closer, it is understandable that tensions will rise, but tensions will soon be followed by an anti-climax when the decision is made and minds are focused on what will be the next  Cabinet.

 As soon as the new Cabinet is known, there will be hyperactivity in both political parties.

Somehow, the initial thought was that the rise of industrial unrest would be benefit the Labour Party. What now transpires is that industrial unrest has opened a gap within the Labour Party because there are marked differences between the Leadership of the Labour Party and the Parliamentary Labour Party. As the Conservative Party gives whoever is chosen as Leader the benefit of the doubt - a sort of political honeymoon - the day after the honeymoon has already started within the Labour Party. It is going to be rough.

If rules regarding leadership contests are changed in the Labour Party, then Andy Burham and Sadiq Khan could become contenders. Should Liz Truss become Prime Minister, the pressure to chose a woman leader in the Labour Party will be unbearable and the present Deputy Leader would have more than one reason to challenge Keir Starmer as a female and as somebody who could be closer to the Trade Union Movement. 

Let us remember that all the aforementioned events have as background a crisis of major proportions at an international level and that whoever is in power in Britain and in other countries in Europe will have to deal with.

Time: Aug 7, 2022 06:00 PM London

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Gemany's Day X is here to stay

Germany's Day X is here to stay

Everybody was making contingency plans for Day X, the day when gas supplies coming from the Russian Federation were going to cut off and such day arrived when the Russian Federation responding to those who were threatening the Russian Federation with the suspension of gas imports decided to do the deed itself and leave Germany and other countries without gas and this was bound to happen.

Western Germany - we continue talking about Western Germany because the hopes brought by the Fall of the Berlin Wall in terms of economic leveling of East Germany with West Germany were quickly wiped out - is suffering the consequences. More than ever before, Germany will have to rely on coal thus defeating plans presumably designed to protect the environment and CO2 levels. But there is more than that because one German company in particular was using Russian gas to produce battery cases for electric cars and even making train clutch systems. Of course the company representative chose to remain anonymous because he did not want to be seen as supporting the Russian Federation. Having said that, the prospect for the said Germany company is closure leading to unemployment. Let us remember than 55% per cent of the gas used in Germany was coming from the Russian Federation. The damage done to the Germany economy and the erosion of German political stability might not be a price worth paying.

What is coming is a chain reaction in a country in which companies big and small are interlinked. This is the domino effect. Bayer, Basf and Thyssenkrupp are vulnerable and practically every area of industrial activity will be damaged including construction material, pesticides, synthetics, packaging, disinfectants, the producion of drugs for medical use such as antibiotics, vaccines and cancer drugs. Nickel and aluminium come to a great extent from the Russian Federation.

And what happens to hospitals, emergency services and medical manufacturers despite the fact that they will be treated as priorities. Companies are being forced to demonstrate that they deserve to be treated as priorities and those involved in glass manufacturing are an example of what could happen. If production comes to a halt, the nature of the production process will mean that machines could be terminally damaged when liquids settle inside the machines.

If supply chains collapse, already affected by the paralysis generated by lockdown measures during the Covid pandemic, the outcome will be bankruptcies and mass unemployment. Some talk about a recession that will be worse than any of the recessions Germany has faced until now. Do you know what this means?

Corona Virus: What comes after it?

Corona Virus: What comes after it?

We cannot listen to the news without the customary report about the economic consequences of the present Corona Virus crisis. 

Day in, day out, those who know about economics and those who play by ear, they all have something to say about impending doom.

What about if the present crisis changes the way we do things for the better? What if numbers and percentages are seen no more as rulers? What if we start looking at life and human beings as what they are: life and human beings.

There is no point in talking about the number of dead people including those who are dying in care homes if we are not willing to implement necessary changes to ensure that should a similar situation arise in the future we are better prepared to keep people alive.

What if we can work better and more efficiently without being crowded in cars and public transport? What if we save the time we spend travelling around having a more balanced lifestyle? We could produce more, have better lives, and have much a much better economy.

Comments made about how Beijing looked before the Corona Virus crisis and how Beijing looks now during the Corona Virus crisis, about how animals were returning to places taken over by humans beings, made me think. What about making the improvements generated by a tragedy a permanent feature of a new way of life?

Where there is danger, there is opportunity. The opportunity to do things much better.