For as long as it takes to ruin ourselves.

Posted by Pointman on November 18, 2022 · 7 Comments 

When it comes to economics, there are more schools of thought, that’s to say radically irreconcilable viewpoints, than there are in similar pseudo-scientific fields such as sociology or psychology. However, there are some guidelines that most practitioners accept. Any economy that has two successive quarters of zero or negative growth is either in a recession or will enter one in the next quarter. This isn’t some wonderful mathematically provable law of economics but the result of simply inspecting the years of accumulated statistics. That pattern observed was that as far back as WWII any economy going through that set of conditions has always fallen into recession.

Western Europe and the US are in a recession, though the denial compulsion of bidenomics insists that the old rules no longer apply in the brave new world of the great reset currently in progress. It’s all nonsense of course and unless there’s some serious remedial action taken, we’re in all probability looking at a long worldwide recession the Bank of England estimates to be of two years duration. I think not only is that an optimistic estimate but if we’re not careful about how the global situation is managed, we could be looking at something a lot like a long depression. Add in the trade barriers, known as sanctions these days, being hurriedly thrown up between major trading blocks and all the exacerbating ingredients for that disaster are shaping up nicely, just like in the 1930s.

We are now beset by the return of those evil twins – a rising cost of living and a decline in the purchasing power of your money. Governments are desperately indulging in a lot of what’s called gaslighting these days by the smart set about the true state of their economies. Nearly all statistics issued by government and quasi-governmental bodies have been cosmetically fiddled with so much over the years for political reasons that they need to be taken with a heavy pinch of salt.

There are still one or two exceptions like the Bank of England which calculated inflation in the UK to be running at 11.1% in October, a number that didn’t go down well with the government. I tend to think their happy days of relative independence will soon be drawing to a close if they persist in producing reports contradicting the happy clappy, all’s well with the world narrative a government in disarray is pushing.

Published economic statistics have become like opinion polls. They’re only there to persuade you of the truth of some lie using the specious gravitas of having been issued by an official authority and are therefore inherently truthful and objective. The only numbers you can actually trust are the ones on the notes coming out of your wallet, anything else is most likely highly official but deceptive rubbish. Every time you fill up your car, do your weekly grocery shop or buy practically anything, you can’t help but have noticed everything is going up in price. What cash savings you have are barely earning half of one percent while inflation is eating alive the purchasing power of your money by over eleven percent.

What’s happening here is not the gentle periodic up and down sine curve of good times and bad times but sudden brutal trauma with no time for the usual economic mechanism to make timely adjustments. It’s simply too much to handle at once and the measures that need to be taken are being pointedly ignored because the current official narrative is emergency, what emergency so as not to scare the sheep. A truism of all levels of finance is that if you don’t manage your money, it will start to manage you. The very same truism holds in managing a country’s economy, but it’s worse than that.

The only way off this path to economic annihilation is to properly address the policies that in less than half a year hurled the world into recession. The failed policy everyone knows was to voluntarily cut ourselves off from the biggest source of commodities we’d allowed ourselves to become totally dependent on in the vain hope that source would implode. They didn’t, we’re the ones who’re imploding. While our central banks are surreptitiously raising interest rates by not enough, their central bank is lowering theirs.

We’ve emptied our arsenals onto the black market via donations to Ukrainian spivs to the point where we couldn’t even defend ourselves if for some mad reason Russia decided to conquer the economic basket case Europe is fast becoming. On both the economic and military front, all Putin has to do is wait. Wait for West block economies to collapse resulting in regime changes to more amenable faces. Wait for General Winter to do his terrible work before launching the massive Spring offensive every man and his dog knows they’re preparing east of the Dneiper. Wait for West block populations to get fed up of living in cold and poverty over a country most of them couldn’t even find on a world map. Wait for Ukraine fatigue to set in after a brutally cold winter.

Nobody but a fool tries to catch a falling knife. He’ll let it clatter to the tile floor and then negotiate from a position of strength having won the hybrid war. By that time, we’ll be the old beggar in the snow people walk by.

The brainless battle cry of we’ll continue to pour money and munitions into the Ukraine “for as long as it takes” plays exactly into Russia’s patient game. In effect, we’re the ones getting sucked dry and they’re the ones not expending a kopek nor an unnecessary Russian life. West block is like someone hopelessly trapped in some obsessive-compulsive loop who somehow thinks that by repeating the same failed moves over and over again, there’ll somehow be a different result after enough blood and treasure has been spent.

In the mean time, all we’ve got to look forward to is what politicians call austerity regimes. As the name suggests, they’ll be harsh but you’ll be led to believe that sort of thing is supposed to be good for you. The best medicine always tastes nasty. Character building, don’t you know. Higher taxes, higher interest rates, cutbacks in most government spending, wage strikes everywhere, a standard of living in free fall, getting used to eating fish fingers rather than steak and of course a few wars we can feed our kids into but nothing too big to upset anyone’s corporate share options.

If you’ve got a penknife, now is the time to use it to make a few new holes in your belt.

©Pointman

Related articles by Pointman:

Remind me again, which country’s economy was sanctions going to devastate?

The Ukraine war – the military realities.

All articles about the Ukraine situation

Click for a list of other articles.

Filed under Article · Tagged with Economics, Recession, Russia, Ukraine