A selection of FT headlines from the barrage of email newsletters that I receive from them each morning provide very clear indication of the scale of the actual, underlying, realisation that is hitting the world economy right now as a consequence of the closure of the Strait of Hormuz, even if few people are willing to address the obvious consequences that are going to arise, as I do in this morning's video.
First, there is the false hope:
It appears these vessels did pass through the Strait. But it would appear they paid Iran to do so, and that will, given current tensions, provoke a US reaction. Note too, that the oil was headed for China. Two tankers will not solve its oil crisis, or anyone else's, come to that.
And, have no doubt that this oil crisis is spreading. India is bracing itself for the economic shock of what is happening. Modi is, I am sure, preparing himself for the civil unrest that might arise as a consequence.
That civil unrest is already developing in Africa, and both cases lend support to my thesis that, almost inevitably, this Crisis is going to hit the world's poorest people, whether in the poorest countries or the poorest people in our country, the hardest, which is precisely why we must have intervention to prevent hardship.
At the same time, it is clear that the case for making that intervention is not being heard amongst the financial elite. This headline refers to a reaction in the US, where some US Fed officials are very worried about signals being given that interest rates might be cut when they would wish to increase them in the face of inflationary pressure, when increasing rates can have no benefit at all when that inflationary pressure arises from absolute physical shortages of supply. The battle to stop neoliberals making everything about the coming crisis very much worse has clearly started.
And let us not pretend that the UK will be exempt from the consequences of this crisis. This is just one headline indicating the fact that it will be:
Meanwhile, Rachael Reeves tried to suppress her inner panic by, as ever, outsourcing the solution to her problems to the market, only to find that they told her that they were not playing ball:
Rachael Reeves has a lesson to learn, and it is one that will contradict everything she has ever learned and done. It is that on this occasion it is down to her, as a politician, to act. She cannot rely on the market to do so.
If she does, she will fail, and people will suffer. Markets are not interested in relieving suffering. The companies she usually talks to are only interested in exploiting. Nothing that will relieve the current crisis will, in that case, happen by the voluntary action of markets.
It will be down to her (if she is still in office) to take the necessary steps to prevent extreme suffering in the UK. I outline what these are in this morning's video. The question is, has she got the courage to act? The same question will be asked of almost every politician in the world very soon. As yet, no one knows the answer, but there is one thing that I think we can predict: they will all react too late. That will cost lives and have massive lasting consequences.
We are on the edge of a precipice, and so far, the world's politicians have chosen to ignore that fact. Maybe that will be enough to consign their neoliberal thinking to history. That is the only glimmer of hope I can find in all this, but it will come at far too high a price
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
I was still at school at the time and of course those running the Country and many of its citizens had lived through WW2 so were familiar with concepts like rationing but its hard to avoid the conclusion that compared with the action taken in the 70’s – reduced speed limits, rationing plans being dusted off though not implemented etc that at least the Captain and the officers were ‘on the bridge, commanding’ not hobnobbing with the wealthy passengers as we sail towards disaster.
Oh, if anything it is worse than standing in the edge of the precipice. We are already falling but just haven’t noticed that or the approach of the inevitable. Just wait until we land.
Which raises an interesting question – what should each of as an individual and a household do in such circumstances to cushion the landing? Build up stocks of non perishable food and other essentials? Carry on regardless because tomorrow we die?
Should I do another video on this?
A video on what do to prepare would be useful for many. In my view, its not just food and water, its being able to cope, for example, when the lights go out, when there’s no heating etc. I doubt this will be over quickly.
I will work on this
I think we should be looking at friends and relatives who might be vulnerable in this crisis, and work out how we can help. If all your friends and relatives are well-enough-off not to need help, look at organisations in the local neighbourhood — churches, local charities. At the beginning of the first Covid lockdown, there were appeals for volunteers. Now needs will be clearer.
Much to agree with
I’ve build up a store of canned and dried foods (pulses etc), plus emergency meals (like camping stuff) and two big canisters of water. I’m intending to further enlarge my store as well as double my water supplies. Water is, of course, essential but most people forget it’s needed often for cooking and soaking pulses. Prices of such goods are slowly increasing, but the emergency meals people have cottoned on already, and prices are going up, especially bulk.
Here in Tasmania my wife and I are doing the same, stocking up on tinned and other non-perishables. We’re also adding potatoes to the range of fruit and vegetables we already grow and buying an extra freezer to make sure that none of our produce goes to waste as it often has before due to the unhelpful habit of all the apples/raspberries/blueberries/tomatoes/peaches/spring onions/leeks/cherries/celery/lettuce/courgettes/beans/carrots/broccoli/cauliflowers and some other things I’ve forgotten about all wanting to ripen at once.
I might even stop being so annoyed at the rabbits that love to do what rabbits do and produce holes all over the place for my tractor/mower to drop into and try tempting some into the cooking pot…. If I can bring myself to actually dispatch one of the cute little fluffy darlings.
I have no idea how our little island state will cope over the coming months but we will find out soon enough.
Fill your bath with water to use for washing, flushing etc, Disregard Best Before dates on can goods and learn how long they remain edible. etc etc There’s a lot of information on surviving short/medium/lengthy disruptions on the internet.
Yes I would like to know more ways in which we can prepare and help the most vulnerable in society and our community. I live on a scottish island where most people have oil for heating and the price has more than doubled already. We need to act now before its winter and people are freezing to death in 2026. People have stopped delivering onto the island ( ferries dont help this) but its becoming way too expensive for food and necessities and this is going to get worse…………………..
Noted
And I synpathise with your situation
It feels like we are in the belly of a ship where for a long time we have been led to believe that we had elected the crew and captain only to realise the ship’s wealthy owners are directing them for their own needs, which as far as I can see, is to race at break neck speed against the ships of some other wealthy owners to some unknown destination. Through the stupidity of one of their own unfortunately there is now not going to be sufficient fuel or food to continue the journey to whereever we are going. Will they slow down and adjust course. I doubt it, as they probably have a helipad on board with helicopter ready to continue their race and leave the rest of us stranded only to return and reclaim their property once ordinary people have suffered and fixed the problems they have created. It is not supprising that the young no longer want to fight and defend a ship (or land), as has happened in the past, only for the owners to forget the sacrafices made for their benefit.
I hope that someone on the crew is taking note of your blog Richard and is in a position to use your sound advice to influence a change of direction before it is too late, otherwise there may be a mutiny.
Rant over.
Those who rely on monthly just in time medical equipment from different parts of the world are going to be very vulnerable to shocks. Really not something to look forward to.
I note from the news this evening that Rachel has created a package of largesse which will give the average family an additional £6 per year. She pointed to the profligacy of the Tory government spending £50bn in the last crisis and how careful she was being this time spending less than £2bn. She also noted that she would need to recover this in future.
I am so glad that we have a chancellor at the helm who understands how fiat money operates!!!!
This will probably sound very harsh or like a conspiracy theory but is there any evidence that our ruling class (globally) cares about the poor and vulnerable or ordinary people come to that? In many ways what I see happening now is WW3 – it’s a global trade conflict in which the poor, the elderly, the disabled, the disadvantaged, most of the developing nations and a considerable proportion of ordinary people will suffer and potential die, and that’s the plan as they can’t do outright warfare anymore. Nuclear warfare and even wide spread use of more conventional weapons (which are toxic in their own ways) or bio/chemical warfare would kill the elites too. Mainly they want to reduce the numbers. We’re less useful now there’s AI. We might also rebel! I live in hope…
Sadly I think you are right. The Epstein/Tech Bro class have decided that we are non-player-characters, surplus to requirements, and therefore expendable. They are creating chaos (and preventing governments from addressing chaos) in order to ‘weed out’ as many people as possible. They do get that the climate crisis is human made, they’re just making sure they won’t be the humans that suffer for it.