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The Big Lie About the "Cost of Living Crisis"
Here’s what we know:
Britain is in the midst of a “Cost of Living Crisis”
The huge spike in the wholesale cost of natural gas is the cause
Vladimir Putin’s murderous invasion of Ukraine is the source
For reasons I cannot understand, everyone accepts and regurgitates these blatant and obvious lies.
The truth is that the current crisis is not caused by the war in Ukraine and is neither unexpected nor unforeseen. In April 2020, as governments around the world shut down their economies to deal with COVID-19, we interviewed 2 economic commentators who are regulars on TRIGGERnometry: Dr Pippa Malmgren and Jim Rickards. When asked what the effects of the lockdowns and associated policies would be, both were unequivocal: inflation.
According to the Government’s own estimates, COVID-related policies cost this country between £310 billion and £410 billion, the equivalent of between £4,600 and £6,100 per person and more than a third of the UK’s annual budget (£1.1 trillion).
As a result, our national debt rose to over 100% of our income for the first time in 2020.
As you can see, post-2008, the Government simply abandoned any pretence of fiscal responsibility.
Similarly, the budget deficit (the difference between spending and revenue), has continued to grow. We have spent more than we earn in every single year of the last two decades. You can safely ignore the OBR forecast in the graph below - our response to the current “crisis” will be to print more money to facilitate more spending we can’t afford.
The difficulties we are all experiencing now and are about to face over the winter months are neither unpredictable nor unpredicted. In February, in an interview on our show recorded weeks before Putin’s invasion of Ukraine, Nigel Farage sounded a warning about the inflationary pressures the country was about to face and the expected rise in the cost of energy.
The first step to solving a problem is admitting you have one. No politician I am aware of is willing to do so.
The mainstream answer to our current predicament is to grin and bear a difficult winter in order to help Ukraine defeat Putin’s forces. Once this happens, goes the narrative, a weakened Russia will resume gas supplies to the West at reasonable prices.
The counter view is that we must stop sending billions we can’t afford to Ukraine, encourage them to surrender and resume our prosperous and comfortable lives in peace.
Neither of these is even remotely true. Regular readers will know how loathe I am to agree with Vladimir Putin but he explains the roots of our predicament extremely well:
The solution to the “Cost of Living Crisis” is to realise what it actually is: a Cost of Spending-Money-We-Don’t-Have Crisis. No country, business or individual can do this in perpetuity.
Naturally, Liz Truss, the incoming Prime Minister, is already promising a £100 billion package to help struggling households. Even more naturally, the explanation of where the money will come from is hidden right at the bottom of the article:
“Any plans were likely to be paid for with extra borrowing”.
Sadly, I fear it’s Liz Trusses all the way down from here. We don’t have the balls to elect politicians who are willing to tell us the unpleasant truth: we are not as rich as we think, we can’t afford all the things we want and we have to learn to live within our means.
And until we do, these “crises” are only going to get worse. Britain is an addict who hasn’t reached his bottom yet - unwilling to admit he has a problem and get clean. But make no mistake, as with all addicts, the bottom is coming. And when it hits, it’s going to hurt a lot more than the “Cost of Living Crisis”.