He can’t even keep his own analysis straight

Second, the cost of producing gas has not risen. All that has risen is the price, driven by fears of Russia, in the main. But by no means all the gas we use is Russian. There will be UK companies making a great deal of money from this increase in gas prices: the money does not all disappear into a bottomless pit. The government could take action to recover at least some of the excess profits that will be made to then subsidise the fuels bills of those needing help – as many will. But I very much doubt that will happen.

We’re in a shortage, so let’s tax supply to subsidise demand. Yeah, right……

But this:

Fourth, the good news from that is that inflation, excepting fuel prices, may well fall – although the chance that the Bank of England will allow for that is low, meaning that they will probably add to the woes in 2022 by increasing interest rates.

But if decreased demand will lower inflation – so it’s not just supply chain woes of reopening, isn’t merely transitory – then the correct reaction to the inflation we thought we were about to have would have been to raise interest rates.

But the P³ kept insisting that we shouldn’t to that because it was all just transitory.

Interest rate rises reduce inflation *by* reducing demand. So, if reduced demand reduces inflation then higher interest would have reduced inflation.

8 thoughts on “He can’t even keep his own analysis straight”

  1. If high gas prices are not expected to be transitory then more fields become economic, so investment will increase. The money to invest has to come from somewhere. Government perhaps? Don’t be daft. It must come from the O&G Cos. Windfail (h/t) taxes will discourage investment thereby ensuring continued high prices.

  2. “There will be UK companies making a great deal of money …” means ‘I can’t be bothered to find out which so I’ll just make a vague accusation’.

  3. The purpose of all of his writing is to persuade the powers that be to try to gather more tax.

    To that end, he throws everything at the wall, hoping some of it will stick.

    I suspect he’s paid by the word – or at least by the column, considering how often he writes.

  4. Dennis, Twatty Something or Other

    I suspect he’s paid by the word…

    I suspect he can’t shut the fuck up. I also suspect it’s one of the reasons he’s living alone in Ely, and one of the reasons he’s in his 60’s and doesn’t have a career or a real job.

  5. I was reading of price surges in agriculture – near 100% on fuel and 80% on feed. One relatively unheralded reason behind the supply chain issues – running out of suppliers! The man is actively dangerous and ideally needs to be offered the option of a one way trip I Zimbabwe, North Korea or Cuba or life imprisonment. His influence is too malign to simply dismiss him – he need to be eliminated…

  6. “I was reading of price surges in agriculture – near 100% on fuel and 80% on feed. ”

    You can add a circa 300% rise in fertiliser prices as well. At the moment grain prices ‘might’ be high enough to compensate for the high inputs prices, but even at those high output prices chances are a lot of farmers will refuse to gamble on sticking that amount of money in the ground, and either grow crops with no fertiliser (ie take lower yields) or leave the ground fallow. Which of course will result in even less production and higher market prices.

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