Jeez, Tooze, you twat

As far as the Bank of England is concerned, it comes as a rude awakening. In the 25 years since it was given its independence the bank has been largely successful in controlling inflation, but it faces a surge in prices and a government pushing determinedly in the wrong direction.

That’s the point of central bank independence. That some fool in office doesn’t get to both be fiscally and monetarily incontinent. That there’s an independent offset to bad policy that is.

As opposed to, say, if Spud gained control of both Bank and Treasury and used current events to print another £250 billion…..

36 thoughts on “Jeez, Tooze, you twat”

  1. BOE maybe better than the treasury but still shite.

    “Value of £100 from 2000 to 2022
    £100 in 2000 is equivalent in purchasing power to about £187.09 today, an increase of £87.09 over 22 years. The pound had an average inflation rate of 2.89% per year between 2000 and today, producing a cumulative price increase of 87.09%.

    This means that today’s prices are 1.87 times higher than average prices since 2000, according to the Office for National Statistics composite price index. A pound today only buys 53.450% of what it could buy back then.”

    https://www.in2013dollars.com/uk/inflation/2000?amount=100

    This also completely ignores the impact of easy money on house prices.

  2. Is this the start of a new tag? “Taunting Tooze”, perchance?

    Anyhow, it’s not clear to me how the interest rate mechanism can affect the sources of current inflation – it seems to be very vague. The BoE model is the Bundesbank one, and the ECB has the same problem.

    Worked fine (~ish) for 25 years, but the world changed and the underlying assumptions turned out to have previously undiscovered flaws.

  3. That seemed uncalled for Tim. He never suggested ending BoE independence or that fiscal and monetary policy should have unified control. Indeed, to the extent that the BoE is mentioned, the article largely argues that the bank has to fix ‘wrong’ fiscal policy.

  4. Bloke in the Fourth Reich

    BoE, ECB, FED, all keeping a tight lid on inflation by printing oodles of money for governments to spend like sailors on shore leave. For 14 years.

    What could possibly go wrong?

  5. Markets have delivered a devastating judgment on Kwasi Kwarteng’s tax-cutting mini-budget. The pound has collapsed to historic lows. And investors have sold UK government debt, driving the price of bonds down and the effective interest upwards at a rate not seen since the currency crises of the 1950s

    Anybody else loving how The Guardian has suddenly become the voice of fiscal responsibility since, eh… Friday?

    Sterling’s mauling on the FX markets isn’t *that* bad, btw: trading at 1.08 now. The Euro is trading at 96 cents. This is “oh, bugger” territory, not “Holy Fucking Shit We’re All Gonna Die” territory (but don’t worry, the bad news is coming).

    Markets don’t like Howard’s budget, but they weren’t going to like anything he had to say. Not only is the dollar a safer haven with more aggressively rising interest rates, but the fundamentals of Western Europe’s economy are a lot weaker than the US’s thanks to US-led energy sanctions.

    European and British manufacturers are already starting to fail due to high costs. This will have knock on effects on everything else including agriculture, government finances and banking. Germany is particularly badly hit, which will empooren the entire European economy. Contrary to what we’re being told in the MSM every day, Europe is a worse position than Britain, because while we both face price shocks they’re also facing a massive physical shortfall in energy supply which can’t be fixed by turning off the Christmas lights and turning down the thermostat. They don’t seem to have a plan to address this, it’s ostrich time instead. By comparison, the UK has a smaller supply gap to fill and a more dynamic pro-growth government.

    The coming winter is shaping up to be unbelievably brutal, probably the worst one the continent of Europe has seen since the late 1940’s. But for some reason Europe’s biggest brains are still obsessed with Net Zero, stopping fracking and atomic power, and continuing to pursue the elusive goal of “victory” in Ukraine (while pinky-swearing they’re not at war with Russia). None of the above is particularly conducive to people wanting to hold UK/European currencies or buy their government debt.

    Obviously we’re in a tight spot, but the danger comes from thinking of this as a temporary crisis. It’s a permanent crisis until, and unless, we can get energy supplies way up and prices way down. Nothing we can do on the demand side is going to address the problem, we’ve got to get fracking, drilling and building as if our lives depended on it (they actually do). Unfortunately most of the establishment would rather fight us instead, which is why the Tory wets are already trying to undermine this government and the Krauts are still dicking around their last operational atomic power plants.

  6. Bloke in North Dorset

    Before I set off 2.5 weeks ago I bought Euros on my Post Office card at 1.1. Today I just topped up at 1.07, a pain but hardly a crash.

  7. I wonder how the Euro will fare on the news of apparent sabotage to NordStream 2.

    NordStream 2 was a possible escape route from the winter(s) of discontent. Putin has been dangling it in front of the EU like a shiny cat toy since the start of hostilities. “Stop fighting us in Ukraine and buy this lovely gas”

    Bloomberg:

    European authorities are probing “unprecedented” damage to the Nord Stream pipeline system that transports Russian gas to the region, as security around energy assets is tightened.

    Damage assessment will be going on now, early reports suggest the damage isn’t minor tho.

    It probably wasn’t Russia that sabotaged its own, brand new, never used, pipeline they were hoping to earn money from. So, who has an interest in ensuring Europe can’t physically reverse the energy sanctions? And have the markets already priced in the coming winter of energy furloughs?

  8. The coming winter is shaping up to be unbelievably brutal, probably the worst one the continent of Europe has seen since the late 1940’s.

    Straight question – is this a weather forecast or an economic forecast?

  9. Won’t a devalued Pound boost UK exports of goods and services, make imports more expensive thus increase in purchases of domestic produced goods, both of which will maintain or boost UK production and prevent job losses or increase labour demand? Won’t it increase inward investment? Won’t it all increase economic activity?

    This is bad because…. ?

  10. BiFR – I spoke too soon.

    The Torygraph:

    Europe suspects Russian sabotage after ‘unprecedented’ damage to Nord Stream gas pipelines to Europe
    Investigations begun in Denmark, Sweden and Germany after three gas leaks in Nord Stream pipelines from Russia in just one day

    So the story now is, Russia – which could simply turn off the gas anytime they want to, and which has been publicly urging Germany to turn on NordStream 2 – bombed its own strategic industrial infrastructure for… reasons. Possibly because Putin is Hitler, or Double Hitler, or wherever he falls on the Hitler Scale this week. There’s no actual evidence for any of this, but it’s what the Torygraph is going with.

    But accident seems to be being ruled out:
    A German security official told Bloomberg the evidence suggested a violent act. German newspapers reported sources saying the leaks were as a result of a “targeted attack”

    And it probably wasn’t Ukraine:
    The Tagesspiegel newspaper quoted an insider involved in German federal investigations into the leak, who said such an act of sabotage could only be carried out by special forces and with the help of a submarine.

    A rather important point that gets buried in the text:
    Europe now faces a winter without Russian gas.

    That’s the money shot, btw. If the saboteurs did their work properly, they’ve just done more damage to European industrial capacity in a single day than the RAF managed throughout much of WW2. This is a far more sophisticated and effective terrorist attack than 9/11. Should really be the top news item, but I expect it’ll be quickly memory holed in favour of screeching autistically at Liz and Kemi.

  11. Bloke in North Dorset

    Slightly OT.

    How about this for dynamic pricing.

    I made my exchange rate post above from the coffee shop of a Rewe supermarket in a small town called Nordheim, SW of Heilbronn. Just before we turned in to the supermarket Mrs BiND noticed diesel in petrol station on the other side of the road was €1,98.9/l.

    Not bad and as I needed to refill we went to the garage after coffee. When we got there the price had fallen to €1,97.9/l. Not a great saving but on 80l enough to pay for one of the beers I had bought.

    As I was filling up I looked at the forecourt sign and the price had gone up to €2,03.9. A quick check of the pump confirmed I had the lower price.

  12. So the story now is, Russia – which could simply turn off the gas anytime they want to, and which has been publicly urging Germany to turn on NordStream 2 – bombed its own strategic industrial infrastructure for… reasons.

    I can think of a good reason. Europe (let’s call it the “West”) has been doing a pretty good job of shuffling supplies around to maximise storage and minimise the impact of Russia’s inevitable winter cut-off. If Russia can make a convincing case that the “West” just attacked its pipelines, then attacks on “Western” pipelines will be justified. So destruction of some or all of the various European undersea interconnectors seems imminent – either as real or invented retaliation. Winter just got colder, it seems.

    But obviously it was the Jews. Zelensky is a Jew and the Isra-ayelees have the means. The motivation is that they want us all dead. Because Jews, etc.

  13. If the saboteurs did their work properly, they’ve just done more damage to European industrial capacity in a single day than the RAF managed throughout much of WW2.

    Well, you’ve offered another, more straightforward, reason for it being the Russians.

    But it must be us, because reasons . . .

  14. Bloke in the Fourth Reich

    PJF et Al,

    Our coalition government wants to buy no Russian gas, close all nukes, and keep 1 coal power plant operational for the winter.

    Putting nordstream out of service for months relieves immense political pressure.

    The Russians are not likely suspects for aforementioned reasons. Why blow up your own leverage? At billions in costs assuming all is peace and light in a couple of years and the gas can flow again. The on/off tap turning to Germany is a carbon copy of what they did to Ukraine a few years ago.

    A further reason is that NATO will know every time a dolphin farts in the baltic, at least south and west of Kaliningrad. Its not likely an operation would go unnoticed. If the Russians even have a baltic sub fleet.

    I think the xhances of this being a Russian attack are less than 10%.

  15. Won’t a devalued Pound boost UK exports of goods and services, make imports more expensive thus increase in purchases of domestic produced goods, both of which will maintain or boost UK production and prevent job losses or increase labour demand? Won’t it increase inward investment? Won’t it all increase economic activity?

    This is bad because…. ?
    It depends on who you’re running the economy for the benefit of.* If it’s some manufacturing companies, some of who export, sure it’s good news. If you’re a consumer, it’s yet more inflation as the cost of imports rises.

    *One thing I think we can safely assume. It ain’t Joe Public.

    No, I can’t see the West US or Europe blowing the pipelines. For one thing, I’ve never much liked conspiracy theories. By the sound of this one, it’d mean a sub lurking around in the Baltic & a special forces demolition team. So how many people’s that would have to be privy to the operation? Not just the team & the crew but in the chain of command & the planning? Can you imagine the international ructions if any one of that lot bubbled on it? That’d still be red hot news ten years time when the Ukraine war might be over & forgotten about. Yeah there have been some successful ones in the past. But all of those had tiny numbers of individuals in-the-loop.

  16. What has just occurred. You don’t need to put a team on the bottom of the Baltic to blow a pipeline. These pipelines are designed to have inspection equipment run up & down them. You put the device in the pipe at the access point. Where’s that?

  17. Let’s not rule out the CIA, China or possibly it one of those groups that are so fond of gluing themselves to petrol pumps, Insulate Briton, or some such.

  18. . . . never much liked conspiracy theories.

    Well, it’s a conspiracy by some grouping. If not a national actor, maybe some Russian hardliners?
    Putin going wobbly – whammo.

  19. BiS – Can you imagine the international ructions if any one of that lot bubbled on it? That’d still be red hot news ten years time when the Ukraine war might be over & forgotten about.

    Rilly? Would it be like the time the MSM and Big Tech simply censored all discussion of Hunter Biden’s laptop, or more like that time we spent 20 years invading Afghanistan, lost to the Taliban, and it was all forgotten about a year later with nobody held responsible?

    Who do we imagine will be investigating this mysterious occurrence, and who do we think will be reporting on that? Julian Assange is otherwise occupied. It wasn’t very long ago the media was acting in lockstep to stop any sensible discussion of Covid, have we Gell-Manned that episode from memory already?

    Besides, pretty sure nobody’s going to be dumb enough to confess. That’s how people end up suddenly dying of heart attacks, or falling out of windows. If it was a sub as the Germans surmise, the captain and a few special forces guys would know, most of the crew would only have a vague idea of where they even were.

    All we know for reasonably sure is that Russia has no reason to bomb its own pipes, which it could just turn off at any time. Blaming Putin is therefore Saturday morning cartoon logic, almost comically unworthy of grown up discussion. There are other actors who can expect to benefit from making it physically impossible for Russia to offer Europe gas in exchange for peace tho.

    I’m not gonna say for sure it was the same guys whose grampas gave us Operation Gladio and Operation Northwoods and whose current regime openly stole an election and then shot an unarmed woman in the face for protesting it, and then buried its own former president in an avalanche of false claims and charges, and then got the FBI to raid the homes and steal the electronic devices of dozens of prominent American citizens for the crime of supporting Trump.

    I’m not going to say that, but it was probably the Americans. They’ve just fucked Germany for a third time in just over a century, and now they’re trying not to laugh at their dumb, square heads while the Kraut economy bleeds to death from its collective anus and everything they’ve worked for since 1945 goes bye-bye.

    We should probably keep an eye out for more mysterious explosions to come, because there’s plenty of evil both sides would be happy to visit on each other, and the global war looks to be heating up as temperatures cool down.

  20. Bloke in the Fourth Reich says the German government blew up their own gas supply to relieve “immense political pressure”. I don’t know what that means, precisely, but presumably the politicians think that being murdered by their freezing and starving citizens will ease tensions a bit.

    Steve tells us that the yanks are still playing eighth army airforces and want to flatten Germany, despite having shelled out a fortune to build them up and finally seeing them take their responsibilities seriously and spend some decent euromarks with Lockheed Martin.

    And these, apparently, are the grown up insights.

  21. By the sound of this one, it’d mean a sub lurking around in the Baltic & a special forces demolition team.

    It doesn’t, at all…

    Both pipelines were pressurised, some 120 bar as I got from one article. They are also very much stationary objects.
    The explosions themselves took place some 17 hours apart, and registered at 2.1 and 2.3 Richter scale ( roughly equivalent with the heavier WWII aerial bombs).
    Clearly unnatural, because the frequency of natural phenomena is much lower than the disturbances that were registered by the danish.
    ( seismograph picture of both events here )

    Them’s the currently actual verifyable facts about the event for us humble serfs.

    Now what can we infer from this?..
    Someone has obviously been playing with high explosives near a stationary target, obviously with foul play in mind.
    But you do not need a sub to do this. In the Baltic, as pointed out above, this would be silly, as the area is .. under some very active surveillance regarding submarines.
    In fact, it’s a public secret at least the smaller NATO subs regularly practice their stealth protocols in that area, simply because it’s next to impossible to go unnoticed there.

    So if subs are out.. What do you need?
    Special ops diving team? Possible, but the pipes are at a depth you’d need some serious equipment for, including pre/decompression chambers. And the ship to fit them on.. Not exactly stealthy.
    Underwater drones then? Again… possible… The problem there is that any ship using them has to stay in one place for quite a bit of time. The things are useful, versatile…. and not very fast.. And bloody expensive and relatively rare.

    Both options require a ship to hang over “ground zero” for a pretty long time. In an area that is equivalent to LA rush hour/M25 morning traffic/pick your landlubber poison. Above a pipeline that is of strategic and economic importance, and part of Shenenigans of a rather nasty little war with global entities muscling in.
    Peeps, multiple, would have taken an acute interest if anything hung over those pipes, or even close to them, for even a couple of hours without prior arrangement.

    So, not impossible, but not really something naval (military) authorities on both sides wouldn’t notice, or can piece together in very short order, which make the options… implausible.

    So you end up with needing something that is inconspicuous, needn’t be stationary, and is able to pack an underwater punch enough to crack a pipeline..
    Which is basically a fishing vessel or small cargo ship with depth charges.
    Between active sonar and GPS you can pretty accurately do a quick run along the pipes and quickly drop stuff so that it lands pretty close, and then be on your merry way.
    The depth charges don’t even need to be modern or surplus military affairs, but can be self-assembled.
    The seismic disturbance seems to be consistent with the larger bombs used ( in volume.. since we’re still digging them out over here in Clogland..) in WWII.
    With modern explosives… not exactly briefcase-level, but can be easily fitted in an oil drum.. or a sonar drag, or…
    If you’re really fancy and properly Paranoïd ( given what you’re attempting to do…), adding a timer to set things in motion plenty hours, if not days after you’ve done your run seems , at least to me, a sensible precaution.

    Leaving aside the who… Given the data available, that’s how I’d have roughly done it.
    Peeps are free to poke holes in my reasoning. This is, after all, speculation based on sparse information.

  22. In fact, it’s a public secret at least the smaller NATO subs regularly practice their stealth protocols in that area, simply because it’s next to impossible to go unnoticed there.

    So if subs are out..

    Logic failure there, Grikath. You’re describing subs that can go unnoticed and then ruling them out.

    Your piece leaves out the internal route that bloke in spain mentioned. If you want to blow up a pipeline without drawing outside attention, an inside job will work nicely:

    https://nigen.com/how-to-pig-a-pipeline-gas-pipeline-pigging-procedure/

  23. Umm… No PJF.. That area is used for stealth practice by subs because it’s next to impossible to go undetected there. By any/all sides having their ears out.
    You will be detected and flagged. The question is how far you actually manage to get without that happening..
    Very good exercise. Laughs and bets are had all around. And there’s the challenge…. But feasible? Nope..

    So… where’s the logical fallacy that subs are essentially out?

    And abusing pigging is certainly possible..
    However… My objection to that scenario is that the logistics of a clandestine operation done that way requires much more expertise and subterfuge than simply dropping timed depth charges.
    K.I.S.S. is a thing… And given the amount of people “out of the loop” that are necessarily involved to allow both lines to be blown up and might notice something on both ends…
    I am using the assumption that whoever was responsible for this wants any clarity as to the exact cause to be as far away in the future as possible.

    I am, in my idle musings, not excluding “Activists” (affiliation undetermined), so I’m keeping the possible method(s) used as simple and straightforward as possible.
    After all… No-one believed it was feasible to hijack multiple commercial airliners at a timeframe that allowed them to fly into tall buildings near simultaneously… until it actually happened..

  24. Well, I’m thinking of the drongos who blew up the coal burning power station in Port Augusta.

    This was certainly the Greens in the South Australian government, who were terrified that when the shit hit the fan, the vile plebs’d demand that SA go back to bestial coal.

    It thus seems implausible to me that the Russkies’d blow up a pipeline that they might want to use again someday, when they can just turn off the gas.

    But others’ve come to a similar conclusion.

    Your suggestion that someone used depth charges on the pipeline is certainly interesting Grikath. But where I have my doubts is that they could actually hit the thing. However you argue that GPS and sonar’d let them do it. I do wonder whether it’d be all that easy to round up someone with necessary skill levels. But perhaps I’m just thinking of the way I’d bugger it up if I tried it.

  25. You will be detected and flagged.

    OK, if that’s what you meant then there’s no logic failure. But a simple “impossible” would have indicated that better than “next to impossible”, which actually means “possible”.

    As to the actual capabilities of these small stealth subs, one did manage to “sink” a US aircraft carrier a few years ago, and I’d bet the detection level around one of those in a specific wargame scenario is a lot more intense than a random spot along hundreds of miles of pipeline.

    Your proposed scenario is quite possible, but if the place is being watched as closely as you say then they should be able to quickly narrow down which vessel did the deed.

  26. An argument against this being envirotwats is that the hit near Bornholm was just outside the 12 mile limit. They wouldn’t worry about such things but a state actor would be careful about the territorial boundaries of a NATO member.

    I don’t think this is anywhere near the Germany levelling level that Steve portrays. There was already no gas being supplied, and there was no prospect of gas being supplied until the dust settles from the Ukraine conflict. The EU seems to have pretty much accepted Russian supply would end for the winter and has planned accordingly (such as it is).

    If I had to bet I would say this is Russia pointing out how vulnerable all these undersea interlinks are. I doubt it’s coincidence that the explosions happened on the day of grand opening of the Norway to Poland gas link.

  27. This eastern European MEP is not being particularly subtle:

    https://twitter.com/radeksikorski/status/1574800653724966915

    His subsequent comments indicate his thinking:

    “BTW, there’s no shortage of pipeline capacity for taking gas from Russia to Western Europe, including Germany. Nordstream’s only logic was for Putin to be able to blackmail or wage war on Eastern Europe with impunity.”

    “All Ukrainian and Baltic sea states have opposed Nordstream’s construction for 20 years.
    Now $20 billion of scrap metal lies at the bottom of the sea, another cost to Russia of its criminal decision to invade Ukraine.
    Someone, @MFA_Russia, did a special maintenance operation.”

  28. Bloke in the Fourth Reich

    “…presumably the politicians think that being murdered by their freezing and starving citizens will ease tensions a bit.”

    Well it would if it comes to that.

    What’s happening in Germany, PJF? Since you know better than I. The anti-lockdown and vax mandate protests have morphed seamlessly into something that looks bizarrely pro-Russian. Pro-peace at least. Which has me totally confused, but then I’m old fashioned and think I can agree with people on some things but not others.

    The AfD having finally gone full Nazi is up to 15%. If you had an election now, the CDU would be within a whisker of forming post-war Germany’s first ever single party government. The FDP and Left party would likely be out of parliament altogether. We have another winter of fucking masks and other crap to get through, I won’t bore you with the legal situation but we cannot rely on courts to overturn overreach by the government, or even little local authorities.

    There was also basically no gas coming through Nordstream anyway. We already know the winter is going to be fucking awful on many levels. After that winter, the political pressure to start buying Russian gas again, no matter what the price in Ukraine, would have been intolerable. Taking the option off the table is sufficiently important to some people that they would do this.

    Things are really very exceptionally weird here. I literally feel like I stepped through some portal in November 2019, when I went for my annual R&R in a Hong Kong existing under a surreal curfew to watch petrol bombs and tear gas, rather than the more usual fayre of Cantonese opera and touring orchestras. That journey was actually a journey into the wrong parallel universe from one of Murakami’s nightmares.

    I digress. Not even having the option to open Nordstream kills the entire protest movement, makes the decision the politicians want to make anyway (freeze and starve the country and never buy Russian gas again – not just because Ukraine but because we need to save the climate). For bonus, they get given four aces, two trumps, and a joker to pull yet another “there is no alternative”.

    What happened in the Baltic yesterday is very much in the interests of the shoddy coalition of incompetence and malevolence currently running this country.

    Grikath, the biggest hole I can blow in your hypothesis (which I don’t discount entirely) is that dropping a couple of barrel bombs off a fishing vessel is subject to some accuracy issues. I am also assuming that the precise location of the pipes is a rather closely guarded secret (even the public maps are probably deliberately wrong, and not detailed enough to put a smallish bomb close enough to do any damage).

    To knock out 3 of 4 pipes with 2 bombs requires intelligence, expertise, and some means of guiding your bombs to somewhere extremely close to the target. Achieving this without line of sight to the bomb while in transit seems implausible, even for an advanced military.

    I think one of the bombs also went off within Danish waters, which hardly suggests a Russian military operation.

    No doubt some channers are poring over the last 6 months’ transponder logs for the area and will start to generate some hypotheses, one of which may even be right.

  29. With all sorts of speculation around, I do like the joke that Putin ordered Russian naval special forces to blow up the Norway-Poland gas pipeline that’s just opening… and the Russian commandos, after plentiful libations of vodka, returned boasting that “found thoshe big pipelinesh , blew them to buggery, nobody’s getting gas through those now… there any more vodka, boss?”

    “Which pipelines?” asked a dismayed Putin.

    “The Top Shecret onesh on the chart in the Baltic. Big buggersh. Nord Shtream. Nordic, right? Thoshe were the onesh you wanted gone? If there’sh no vodka, maybe shome Toilet Duck?”

    Makes as much sense as many of the other options being bandied about at the moment.

  30. Couple of points to ponder.
    There’s no reason to believe the devices were put in place recently. Could have been done some months back. If they were internal to the pipes, could have gone in during the maintenance work that’s supposed to have been going on. If they were internal, it’s Russia was controlling the gas flow at the upstream end.
    There’s no reason to believe Russia is a monolith any more than the West is. There are factions within Russia, same as there are in the West. Putin only controls policy, not implementation.
    One interesting factor. Blowing the pipes takes a card out of Putin’s negotiating hand. He’s been playing that by his control of the gas supply. Now he does not have it. He has less power over events than he had. Who might that suit?

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