Your money-making expert. Financial journalist, TV and radio personality.
Today we were told that inflation is at a thirty-year high of 7%.
No surprises to any Uk citizen who has to spend money to live…i.e. all of us…although most of us would probably take issue with the number as it is clearly too low. Anyone who has been shopping for food recently, or filled up their car with petrol or seen their new, predicted energy bill will say that inflation is, in real terms, already in double figures.
Every day there are more statistics about how hard it is for millions to cope:
For example, some that have come into my inbox in the last week are:
· the fact that we borrowed another £1.5 billion on credit cards in February, the biggest monthly hike in at least 30 years. It took the annual rise in card borrowing to 9.4%.
· that consumer credit overall was up 4.4% in a year, the biggest increase in the last two years
· that council tax bills have risen by an average of 3.5% to an average of £1,966 for band D properties (up £67)
· that the DWP has found that one in seven families has no savings, and two in seven have savings of £1,500 or less – both were down from a year earlier, but now it’s crunch time for these savings
…and there is much more misery that I could tell you about, but I won’t because you probably already know it, or intuit it.·
Our government, and other governments in the West, are trying to pin the blame on the Ukraine crisis. It’s not because of Ukraine though, it’s because of the lockdowns around the world that were falsely imposed in 2020 and 2021.
Certainly the Ukraine crisis has had negative financial effects in many areas of our lives, especially food (wheat, other grains and various foods come from both Ukraine and Russia and fertilizer costs have shot up partly because of a shortage of potash coming from that region), and oil (although other oil producing countries could fill that gap if they were willing to).
But it was clear to many of us early last year, before the Ukraine invasion was even thought of, that inflation was going to be the big story for 2022 and beyond.
The current (and future) pain is what I was warning about in 2020 – but i was shouted down for saying so.
People (friends, family, social media followers) called me a conspiracy theorist (they still do).
But I, and others like me who sounded the warning, are being proved right and, I’m sorry to say, we will continue to be.
But the bad news, as far as I’m concerned, is that this is not a short-term thing, however much the central banks would like us to think it is.
Why? Because of the even more poisonous outcome of lockdowns which is Quantitative Easing (QE), or money-printing, that was been practiced to the max by Britain, the EU and, in particular, the USA.
Central bankers got the money-printing bug during the financial crisis at the end of the Naughties when they used it to get the banks out of a hole.
It was supposed to be a short-term fix, but never really went away.
Come the 2020 lockdown fury, and we were printing money on steroids.
Did you know that 80% of all dollars in existence were printed in the last two years?
Real inflation happens when the amount of money increases and each unit of money is worth less than it was last year (or even last month if you’ve lived in Argentina or Zimbabwe).
The inflation we’ve had so far has been supply shock price rises..but not true inflation.
True inflation is still to come and that will be because of the devaluation of our currencies through Quantitative Easing.
Seriously. Buckle-up. It’s going to be a bumpy ride
There’s a similarity with the economic situation of the 1970s here, and as Nick Hubble explains in one of his excellent discourses on inflation here the spectre of stagflation (a stagnant economy with rising prices) is raising its head, and has been for nearly a year now.
In the 1970s it took extraordinarily high interest rates and a few years of pain – power cuts, strikes, general disgruntlement – to get us out of the stagflationary mess.
Nick Hubble says “We’ve got all the same mistakes now, like price controls being demanded by politicians which then create shortages.”
All of this because of a policy, borrowed from China and not included in our country’s original plans for dealing with what might be a pandemic, which is increasingly now being dubbed a failure by researchers. Yup – lockdown.
According to Professor Mark Woolhouse, an epidemiologist at the University of Edinburgh, the lockdown policy didn’t work. As he says in his book ‘The Year the World went Mad’, “I think that lockdown will be viewed by history as a monumental mistake on a global scale, for a number of reasons.
“The obvious one is the immense harm the lockdown, more than any other measure, did in terms of the economy, mental health and on the wellbeing of society” [https://www.dailymail.co.uk/health/article-10655171/Englands-lockdown-did-NOT-prevent-people-dying-Covid-say-growing-number-experts.html]
Will we finally admit that the lockdowns were not only unnecessary but actively harmful for the longterm health, wealth and wellbeing of the nation?
I’m not holding my breath but I do think that it is a positive sign that those who oppose lockdown are finally being allowed some sort of voice in parts of the mainstream media. There are certainly signs of people questioning the source of the current financial pain and wondering what is going to happen to the global economy in the next year.
For a start, see what experts had to say in a recent webinar we ran called ‘Are we about to face a global financial apocalypse?’.
If you thought that lockdown was a good idea, think again. Today’s price rises are just the start. Economic instability is more harmful to the health of citizens long-term than a disease that has a 99.97% survival rate.
We must never allow a lockdown again.