Realist, not conformist analysis of the latest financial, business and political news

Cats And Dogs………Living Together!

“I’m not interested in your OPINION. Just print more money.”

So the government borrowed until they couldn’t afford the repayments, then they collapsed the debt stack and printed until our currencies were on the brink of collapse, and then they stood back and watched as corporations concealed the inflation in their own interests.

Mars bars you eat with tweezers, bags of air where there used to be crisps, and so on.

So far, so good.

But as our pay kept going up in line only with the price inflation they reported in the CPI (flights are a steal!) – 1% or 2% a year, and real price inflation in the things we really buy grew to 5% a year and then 6% a year and more, we started to feel the Bern socialist impoverishment.

So we borrowed like mad to keep our standard of living going – they knew we would. Keeping up with the Joneses is thirsty work.

Their friends in the banking industry made good money being handed new money at 1% (LOVE that Cantillon Effect) and lending it to anyone stupid or desperate enough to borrow it at 17.9%. And even when the suckers had maxed out their cards and couldn’t borrow any more or even service their debts, the bankers got bailed out when it all went sour and lots of their desperate hostages customers defaulted.

As my kids used to say – Sweeeeeet.

What now?

Well, the printed money was supposed to displace enough to pour out into the economy and restore the demand to keep it all going – the bankers had money to lend to us, but it turns out quite a few of us had had our fill of being enslaved by bankers and many of us declined to borrow even if we could.

So they concreted over the problem by abandoning the recalcitrant consumer and giving money to idiot businessmen who kept paying their pointless hysterising staff with the free money, but eventually even that came to an end and now they have finally begun Milton’s Helicopter Money at last. Watch as people don’t spend it, to the enormous frustration of the IYI (turns out that when you pay them no interest, people save MORE for their old age, not less – a real-world lesson for the slapheads in the Eccles-Marriner Building)

So here we stand in the ruins of Western capitalism, mostly stupefied by the scope and scale of the crime, but also aghast at our governments for their malevolence and stupidity.

Up next – the failure of demand that stems from a panicked and impoverished herd desperately saving every penny they can, and the hyperinflationary, I beg your pardon, hyperSTAGflationary collapse phase that so many recent forays into Keynesian demand management have endured as our governments oblige their beholden central bankers to make the “money printer go Brrr”.

It’s a scary time to be alive, especially when you realise that like the hapless EPA goon Walter Peck in Ghostbusters, the statists will insist as we all stand in the rubble that the catastrophe was caused by Western capitalism, not their interference with it.

I hope you don’t mind cats and dogs living together.

Because we are about to see some real Old Testament type-stuff.

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Michael van der Riet
Michael van der Riet
10 months ago

I kinda like packets that are 80% air and 20% intact, crisp crisps in preference to packets that are 5% air and 95% crushed crumbs. Econ 101 informs me that if Mars reduced Bar size to engineer a super-profits situation for themselves, they would have gone out of business by now, so it’s very likely a response to rising input costs.

John B
John B
10 months ago

Reduced content. Self-regulation to avoid Government mandated reduction in amount of ‘bad’ food we are now permitted to eat.

The pacifier and incentive to get cooperation from the corporations is reduced cost of product but being able to maintain selling price = more profit.

Econ 101 only applies where competition exists. When Government strongarms (or legislates) all producers, a de facto cartel exists and there is no competition on either product size or prices.

10 months ago

Input costs have risen by the real inflation figure, but in order to retain a price-point around the official inflation figure, the unit size has shrunk. No excess profits required, just an inflation figure that includes “a Mars bar” regardless of size.

Bernie G.
Bernie G.
10 months ago

I don’t disagree with your general premise. The government seems intent on hosing everyone down with borrowed money as if there’s no tomorrow, devil take the hindmost. I look at it in a similar manner to climate change. At a certain age you’re not particularly interested in how those coming behind you crash and burn, so much as papering over the cracks – keeping the show on the road – for just one more decade or so.

10 months ago

The issue appears to be that there is not uniform inflation figure for everything, which really should be filed under no-shit-sherlock. But we have government insisting that there must be one, and — with all those inflation-linked gilts outstanding — an incentive to massage the figures down. I remember HIGNFY (when it was still funny) suggesting the Alasdair Darling Index which comprised only things which had gone down in price in the last year. The poorest have been hit the the hardest, probably unsurprising as the UK’s poor are in the same income bracket as the emerging Chinese middle class,… Read more »

10 months ago
Reply to  Matt

I remember when you could get an M3 for £30k and an M5 for £50k – now the M3 > £50k and the M5 more like £90k.

My annual wage at the time was about the same as an M5 – it’s now significantly less than one now.

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