I noted this comment in this morning's Guardian newsletter:
There has been no new meaningful data released this week that might prompt a change in perceptions of the British economy: no inflation update, no unemployment figures, no OBR forecast. Nevertheless, chancellor Rachel Reeves is facing what many observers see as a crisis.
As they correctly note, there is no rational economic or political explanation that they can find for this week's so-called financial crisis. There must, therefore, be a missing X that can, instead, offer an explanation for what has happened.
I have, of course, explained what I think that X might be. It is Musk and his call for the overthrow of the Labour government.
The City has reacted in response.
It will say that they are simply reacting to a new and risky situation created by Musk.
I would suggest that their behaviour is sufficient to bring about the action for which Musk is calling, whichever way this is viewed.
My suggestion that the City is enabling what Musk has demanded seems to me unchallengeable. It is the only plausible explanation of what is happening. An attempted coup is taking place in the UK in real-time, whether or not the City are knowing participants in it.
Shall we deal with that reality?
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Unfortunately we have a Government that subscribes to the neoliberal worldview that they should not, indeed cannot, take any action to prevent this.
They cannot tell the BoE to lower interest rates. They cannot tell the banks and the city to stop misbehaving or they will remove some of their tax perks. They cannot use regulators to insist the media stop printing/broadcasting lies.
Instead the Government, through the hapless Reeves, will further cut public services making a far right Tory/Reform or Reform government a near inevitability.
Bizarre that we have a Govt with a huge majority utterly paralysed and unable to act because of ‘fiscal rules’ that have no reality outside Reeves mind.
Our govt seems to lack the courage to stand up for the British Values they claim to promote.
Thanks to Richard for making the issue clear.
We have a government that completely unsure how it should govern. And they outsource decision making to others. And it seems Musk has a wide circle of influence and is having more effect on the the UK economy than our own government. This is a completely bizarre scenario, but I am unsure what else it can.
Indeed what’s wrong with the Guardian’s economic editor Heather Stewart’s brain that she doesn’t understand the UK government determines base rate?
https://www.theguardian.com/business/2025/jan/10/rachel-reeves-faces-another-anxious-week-of-second-guessing-the-city
Gilts have been underperforming since the budget. Well before Musk ever said anything. This is because of terrible Labour policy which has managed to destroy growth. Even by their own (OBR) numbers they are going to spend/borrow/tax a lot more to achieve less growth than the last government.
You just get your information from the newspapers. They have only just woken up to the growing crisis in the Gilt market and it’s hit the headlines. Financial markets have been increasingly negative on the UK for months based on the budget and resulting data.
You also needed someone to blame other than Labour and something to blame other than fiscal policies that are very much aligned to your own. You seem to always claim that more spending and more tax will mean more growth and budget deficits don’t matter. Turns out none of the above is true in the real world.
You are jsut using Musk and his interventions as a smokescreen.
As commentary goes, this is pathetic.
So far you have proved:
1) It is you relying on newspapers for comment, and then trying to say that to justifies a market developmnent which has no obvious explanation, bar Musk, which fact they are noticing.
2) You do not undertsand money and how it works, opr banking, or central banking
3) You do not understand the macroeconomics of government funding
4) You are on the politcal right wing, and ilkly to support at least a Musk adjacent agenda
And you ask me to believe you are an expert? Pull the other one.
I would stop digging your hole if I was you: you are the person who has most embarressed themselves here. I am not embarressed at all.
GB,
Musk said that Starmer should be removed. A billionaire, who owns a large influential social media business, and may well be part of the next US Govt. is suggesting the removal of a prime minister, in the UK. Had that suggestion been made by Putin, I have no doubt we would be hearing about Russian interference, outrage etc,. but in this case largely, nothing.
You ought to consider why that is the case – complicity might be one explanation.
@ GB
Do you ever pay attention to the real world?
“On August 5, 2011, S&P downgraded the US public debt rating from AAA to AA+ with a negative outlook. This was after the the US Congress agreed to increase the debt ceiling on August 2, 2011.
It was farcical.
The downgrade pushed up demand for US government debt (and the US dollar appreciated) as yields either fell or remained largely unchanged (depending on the maturity range).
The following graph shows the movement of 1-year, 5-year and 10-year US Treasury yields in the 100 days after the downgrade.
5- and 10-year bond yields are even lower now!
US_Bond_Yields_100_days_after_2011_Downgrade
https://billmitchell.org/blog/?p=33960
As I have said previously, the best thing the governments could do would be to regulate the ratings agencies out of existence.”
Now read up on MMT why governments can determine the yield rates on treasury bonds.
Required reading for a bond vigilante!
https://gimms.org.uk/wp-content/uploads/2019/02/Central-Bank-Interest-Rate-Policy-Mosler-Armstrong.pdf
It certainly looks like a coup, Richard.
I commented yesterday and I questioned whether you could ever get the City to act in unison to achieve an objective other than making money. I made this comment because I thought the mindset of traders would make this impossible; most would be more interested in making money for themselves and see an opportunity to break rank and act on the forward knowledge of others’ transactions than they would be to dabble in politics. Politicians to them are just another player in the game that they intend to beat.
However, there’s a key sentence in your blog this morning that makes your theory much more plausible to me. “Whether or not the City are knowing participants in it…. ”
A small number of traders leading the market astray is a much more plausible theory. Most traders are nowhere near as smart as they like to think they are and can be reliably expected to follow a certain path depending on market conditions so the idea that they might be manipulated by a smaller cabal of Musk worshipping sociopaths would make sense to me.
The question is how to stop it?
I have been in discussion on that theme this morning…
@ AW1983 says:-
“The question is how to stop it?”
“In the US case, for example, when the Fed observes the fed funds rate trading higher than its policy rate target, it then takes action to make reserves available at a lower price to bring the fed funds rate down to its policy rate.”
https://gimms.org.uk/wp-content/uploads/2019/02/Central-Bank-Interest-Rate-Policy-Mosler-Armstrong.pdf
Additionally, of course, because a sovereign government through its central bank can simply mark up money on a computer (see GFC and Covid pandemic behaviour) it doesn’t need to worry about selling treasury bonds or market response to such sales.
Of course if the governor of the central bank is playing politics or engaged in insider trading because he/she has been given quasi-independence then this is another kettle of fish!
They call it “Team work”, the players know what is required, no instructions to achieve the result. Many of us have sat in rooms when the dirty is done, to speak out requires courage.
I just wondered what Starmer & Co might have done if Mr Corbyn had become PM and the Musks of the World had called for his downfall.
One way to react.
Instruct HMRC to initiate significant investigations of individuals working in what passes for the UK’s finance sector.
Give the parasites something to think about.
Replace the BoE govenor and its main board – with more than 50% from outside the finance sector.
TAKE BACK CONTROL. (hmm wonder where I have seen that phrase before).
Musk now enemy of the British state, warrant out for his arrest.
In terms of Tesla – do to it what the UK state did to Octav Botnar. When Mr Botnar declined to sell the Datsun UK operations to Nissan (who had just opened the Sunderland factory) – the UK state went after him via tax. Do the same ref Tesla, there is zero doubt they had done all sorts of “tax optimisation”. (oh & close all US bases in the UK).
Agreed
I have discussed the evemts of the last 24 hours with my old campaign partner, John Christensen.
We have agreed it is time we talked again about The Finance Curse. That is what we are seeing this week.
I looked up Nicholas Shaxton’s The Finance Curse (not having a copy) and found the 2019 paperback edition on Amazon (just for the info, not to buy there, btw!).
It has a safety warning! “Not to be used by children over 36 months.”
Someone somewhere in Bezos’ empire has a sense of humour…
https://www.amazon.co.uk/gp/aw/d/1784705047
Whats that good old fashioned term often used in Board of Trade inquiries into marine accidents
Failure to Command
The French and Germans are making their feelings known while our Government isnt and the opposition are colluding with Musk & Co
But isn’t this all a bit over-blown as there’s no other meaningful news? There’s quite a lot of talk about GBP tanking. But it isn’t really – it’s stable when compared to EUR, lost to USD approximately the same or a bit less than EUR. In Eurozone media no-one’s panicking that EUR’s lost 10 per cent to USD in three, four months or so. If anything they see this as a good thing in relation to increased competitiveness. I was just reading yesterday German export/import stats for October – and German exports to GB increased nearly 9 per cent in relation to October to 7,2 billion Euros. GB exports to Germany decreased nearly 5 per cent to 2.8 billion Euros. This is a huge deficit. Why is it happening? Are German exporters better prepared for Brexit-related problems? Is it that GB small and middle size companies gave up on exports? How can they be helped (I know reversing Brexit would help, but that won’t happen short and mid-term unfortunately)?.
Bond yields have been rising world-wide for months. Again media in UK seem to overexaggerate this and made it into UK-only problem. While media in other countries will talk about ‘real economy’, UK media are obsessed with finance and City and that’s practically all they’ll keep going on about. And yes – they do have a thing for Labour no matter what form Labour take.
Much to agree with – but in that case why did it happen? And why are prices moving? Only Musk explains that.
For some years as the Labour party and now the government Labour has been following a policy of appeasement (as well as following their own neoliberal beliefs).
Unfortuntely appeasing is never enough, those who you seek to placate or satisfy always want more.
Come up with the right policies and defend them.
Yep. Starver and Freeze bent over backwards to reassure the plutocrats that they weren’t a threat. Now they’re getting what people who bend over for bullies deserve.
The Labour Party is full of economic and monetary illiterate individuals who are too arrogant to realise they are simply supporting Neoliberal Paganism!
We now understand markets don’t behave rationally and don’t always follow fundamentals. Its classic “group” think. Reminds of the BBC program “The Traitors”!
The huge Labour majority won at the last election was accomplished with false promises of ending austerity by investment in the Green New Deal and our NHS. Now that the true agenda of Starmer and Reeves has been fully exposed, Labour is tanking in the polls. This has been greatly exacerbated by the reckless budget imposed by Reeves with her obsession in ‘balancing the budget’ without any consideration of taxing the rich. This has now opened up the possibility for a leadership bid to remove Starmer and Co. Surely Labour MPs must realize that Starmer and Reeves are sabotaging any prospect of success in a future election? Musk’s rants might offer us a crucial opportunity to oust this toxic right lurching team that has recklessly abandoned every principal Labour has ever stood for.
A left challenger might well succeed if they were able to articulate the urgent need to reign in our rogue Bank of England stranglehold on the economy. This challenger would need to clearly explain why this was necessary, to halt quantitative tightening and reduce interest rates, in simple language that the general public could understand. Abandoning the fiscal straightjacket to free up funds for the promised investment would restore UK confidence in the Labour Party again. The potential to implement the popular measures in your ‘Taxing Wealth Report’, well supported by the public, would ultimately stimulate ‘Green’ growth. Although this might not suit the outcome desired by Elon Musk, he was not elected gy the British people to run the UK Government!
The Neoliberal Pagan Guardian fans the flames!
https://www.theguardian.com/politics/2025/jan/09/rachel-reeves-bond-market-sell-off-liz-truss
What implications does Richard Partington not understand from the following statement:-
https://www.youtube.com/watch?v=hiCs_YHlKSI
The Guardian needs to get its house in order but it daren’t revenue would fall. So much for facts being sacred!
And it’s far from being only in the UK. Via X, he’s attempting to interfere in the coming elections in Germany by giving a huge platform to the leader of the extreme right there as summarised in an mail from We Move Europe (in French, sorry) whose petition addressed to the Commission I have just signed:
“Hier, Elon Musk a organisé une émission en direct sur X avec Alice Weidel, cheffe de file du parti d’extrême droite allemand AfD, un parti tristement célèbre pour sa rhétorique extrémiste reposant sur la division [1]. Il ne s’agissait pas là d’une simple discussion. Il s’agissait d’une manœuvre calculée pour amplifier la propagande anti-UE, déstabiliser les règles démocratiques et compromettre l’équité des prochaines élections en Europe.”
Can’t find this in English, but see here: https://www.politico.eu/article/elon-musk-interference-alice-weidel-x-livestream-afd-germany-eu-digital-services-act/
One of the best books I’ve read about Trump is Sarah Kendzior’s ‘In Plain Sight: The Invention of Donald Trump & the Erosion of America’ (2020) which tracks the rise of Trump (whom Musk seems affiliated with) and America’s increasing fraternisation with autocracy.
I think really, the word ‘coup’ is correct but within the context of the definition of autocracy it becomes even more believable and scary and also less hard to ignore and not take seriously.
This is a time for autocracy to ‘try it on’ I think and see how far they can get.
Musk has certainly got carried away and his behaviour is such that you cannot really take him seriously – yet I bet, just like Boris Johnson, that is just how he likes it.
The other book I have read is Aeron Davis’ ‘Reckless Opportunists’ (2018) where he goes into detail showing us how those outside the state with common interests can signal to each other in markets in plain sight and across countries that something should happen without actually making it clear, usually agreed on the golf course, gentleman’s club, office, stately home or whatever.
It should be remembered, I think, that Trump attended a military academy in NY, and became something of a martinet. He had to be restrained from throwing a fellow cadet out of a high window. No doubt he would have known of the historical request by Washington`s army that he should assume the title of king, a suggestion treated with abhorrence by Washington. Not so with Trump, who would play the sport of kings without a qualm. Greenland would be a plum for him and his pals, as long as the ice melts. As for Canada, their head of state is Charles III, which might be an inconvenience. What remains to be seen is whether US armed forces would tolerate such blatant commercial adventurism versus EU and Russia. But if they need help, it`s only a very few years since British troops were training for winter fighting in Belarus.
I both listened to the X “interview” (wasted time I will never get back) and the German TV analysis on the ARD news channel. The session was laughable – Weidel has a cackle which is a bit disturbing and kept on saying “right”, a sure sign of a German speaker who uses the saleman’s “Noddy” technique to give her arguments addition weight. The analysis indicated there was little value in the talk and pointed out it has been taken up by MSM because it’s “News” but that the general population thinks the whole thing is not relevant to their lives.
One troubling issue in Germany is the young have been targetted very successfully by the AfD over TicToc (10:1 ratio over all the other parties) and as a consequence show massive support for the AfD.