Category Archives: Environment

Eurozone “plan” – an Oxymoron.

Let’s hope that the Eurozone’s “plan” for a Greek exit from the Euro is better than their plan for the survival of the Eurozone.

Talk of “firewalls” and “rebuilding” balance sheets and other construction-related metaphors are wearing a bit thin.

So far, they’ve clearly demonstrated that they would have difficulty in planning their way out of a wet paper bag.

50 Predictions for 2012

An economy used to depend on the interactions between consumers, commerce, politics and investors. Nowadays, we have to add banks (which used to be no more than a service industry) as an additional entity.

Keynesian economics are all well and good in a Steady State situation but we have well and truly entered times when Chaos Theory rules economics. Consequently, the motley collection of politicians-who-meet do not have the intellectual capacity to deal with what has become a multi-causal international problem with more parameters (known and unknown) than wines served at a G20 banquet.

My 2012 predictions are in no particular order, either in content or importance. They are random.

1. For several years, I have been writing about the Bank of England’s appalling forecasts. Finally, they have admitted that their forecasting model is wrong so they are spending £2.5 million on a new one. Their V-shaped recovery will become a straight-line depression and their 2% inflation forecasts will double.

2.  The prominence and dominance of Central Banks will continue to grow as politicians continue to struggle with sovereign debt.

3. Europe will continue  its recession with an estimated average contraction (negative growth) of -0.5%.

4. Sovereign monetary policy as well as the actions of Central banks will continue  to be driven by the same factor which has been dominant for the last few years: Political Ineptitude.

5. The European Central Bank has begun the process of Quantitative Easing and this will accelerate during 2012.

6. European Banks have 6 months within which to raise their Tier 1 Capital Ratios to 9%. This has already resulted in a Tsunami of deleveraging. This will continue to impact badly on economic growth.

7. Euro fiscal integration will continue to be discussed as will the ECB’s support for the (broken) bond markets.

8. Eurobond yields will continue to rise to record levels until even the Germans wake up to the fact that the whole thing has become unsustainable.

9. I continue to envisage the failure of the Euro which should have happened during 2011. There will be bank and government collapses.  French banks and the Spanish government will lead the way.

10. Contrary to what Mario Draghi has suggested, the ECB will leap into the Bond Market and begin to buy-up Government Bonds.

11. Italy will suffer massive Civil Unrest as the Monti government introduces unsustainable austerity policies and the economy is plunged into serious recession.

12. Spain is already in recession but more austerity will be announced .

13. The ECB will take centre-stage in Europe and will slash interest rates to zero (and below!).

14. The nonsense of the Bank of England’s “independence” will be put to the test with at least £150 billion in Gilt purchases during 2012.

15. The United Kingdom’s official unemployment figures will cross 3.5 million, producing an acceleration in forced sales and a subsequent collapse in the housing market with 25-30% wiped from house values.

16. UK consumption will remain weak, primarily as a result of increasing unemployment and a rising RPI.

17. Last year I predicted a UK General Election for October 2011. I now predict a General Election during 2012, following a vote of no confidence. The smart money is on Q2  – whilst the Conservatives continue to ride high in the polls and Ed Miliband remains Labour leader.

18. I predicted 2011 as the Year of the Riot. During 2012, every European capital will be affected by rioting.

19. America will make a surprising accelerated economic  recovery.

20. The next President of the United States will be…..Barack Obama.

21. Civil unrest will continue to accelerate in the Middle East as the people realise that they have been manipulated by the external forces of self-interest and that Western-style “democracy” is really not for them.

22. We will gradually realise that our intention to halt natural Global Warming was no more than a manifestation of our arrogance.

23. There will be  new Pope.

24. There will be an unusually high number of United Kingdom  by-elections.

25. Last year I predicted a Beckham divorce because I felt a momentous happening. They let me down by producing a baby (Harper Seven) instead. This year (for some reason), I see them setting up separate homes.

26. China will bail-out Italy from its economic woes. In return for gold. (Italy is the world’s 4th highest gold owner).

27. Gold will cross the $2000 per ounce barrier, then the $3000 barrier and possibly $4000.

28. FTSE  100 will cross 4000 on its way down and the Dow Jones will  hit 8500.

29. Nicolas Sarkozy will cease to be French President in May 2012 but his fate is very much intertwined with the Euro and much will depend on how long Mario Draghi of the ECB (the new man in charge) can help the politicians to string things out.

30. Turkey will be the beneficiary from  IPA (Instrument for Pre-accession Assistance), which is yet another Euro fund. 233 million euros have been earmarked for Turkey and will be spent on judicial reforms, climate change and environmental projects.

31. Turkey’s integration with Europe will produce an unexpected benefit to Greece. A non-economic excuse to leave the Euro.

32. When Greece leaves the Euro, possibly followed by Germany, a full-blown European recession will begin.

33. Last year I predicted a pre-emptive strike strike by Israel on Iran. It was very close but will happen during 2012. Uncle Sam demands it.

34. The United States will avoid a recession because consumers have begun to consume. However, much will depend on the volume of support America continues to provide to a broken Europe.

35. Crumbling economies will have a good effect on inflation and commodity prices will slide downwards.

36. The Euro will achieve parity with the American $.

37. If there is a “burst” of the Chinese property bubble, there will be a very sharp slowdown in China’s economic growth with a massive effect on commodity exporters everywhere.

38.  Greece will continue its death rattle until it wakes up and has the courage to exit the Eurozone shambles and default on ALL of its debt. Then it will receive proper support from unexpected sources and once-and-for-all break its links with Goldman Sachs.

39. The CIA-inspired Arab Spring will continue to become unglued as bloodshed in Egypt increases and the Libyans begin to wake up from the dreams of “democracy”. I foresee a Libyan Civil war.

40. There is only ONE logical end-game in Syria. An assassination and permanent removal of the Assad dynasty.

41. Britain and the United States have left Iraq and in keeping with modern tradition, it now looks more like a giant litter tray than the ancient  Cradle of Civilisation. Once again, Civil War, more bloodshed and extremists going “boom” beckon. No number of tin ballot boxes can prevent factional interests jockeying for position.

42. My favourite politician of 2011 will make a very welcome return to the European political scene and continue to annoy the Jedward of the Eurozone , Merkel and Sarkozy, now of course, known as Merkozy. Let’s hope that he doesn’t refer to Merkel as an “unfuckable lardarse” again. That  (quote of 2011) would be totally unacceptable!

43. ONLY because I am a great Harry Redknapp fan , I predict that Tottenham Hotspur will win the Premiership.

44. This is not a prediction but a hope that during 2012, somewhere a politician wakes up and realises that in any consumer-driven society, Quantitative Easing is best aimed directly at the consumer and not at the Prima Donna banks, who are not quite sure what to do with it anyway. Never feed a gambling habit.

45. In December 2012, the Chancellor and the Business Secretary (whoever they are) will ask the bankers to show “restraint” in respect of their bonus payments.

46. The United Kingdom’s Political Parties will BOTH realise that they have the wrong man in charge.

47. The Liberals will miss even more opportunities than they did in 2011 but will continue to make macho noises to impress the electorate and each other.

48.  The Labour Party will continue to support Ed Miliband and tell us that “Ed is a great leader and the man for the job” – until the moment that he begins to feel stabbing pains between the shoulder-blades.

49. The X-factor will be won by an entity with no discernible talent. (OK – that was an easy one!)

50. The skids will be bolted under the Office for Budget Responsibility.

Someone shut Obama up.

“Oil – an American addiction”

President Obama is  on a 2-day visit to Mississippi, Florida and Alabama and thanks to his speech-writers, he has brought a new “angle” with him. In between talking tough and hoping to disperse oil with generous sprayings of testosterone, he struts  between  oil-covered Louisiana beaches   in no-nonsense-macho display mode.

He limbered up with “In the same way that our view of our vulnerabilities and our foreign policy was shaped profoundly by 9/11, I think this disaster is going to shape how we think about the environment and energy for many years to come.” 

He wants to  to  “Move forward in a bold way in a direction that finally gives us the kind of future-oriented … visionary energy policy that we so vitally need and has been absent for so long.”

“One of the biggest leadership challenges for me going forward is going to be to make sure that we draw the right lessons from this disaster,” he said.

It’s all  “Me, me, me, I, I , I.”

All that his audience needs is someone to clean up the f*****g oil and hand them some cash.

Never mind the musings and politico-philosophical ramblings of a president regretting that he ever said that the “buck stops here”.  When he uttered that phrase, he obviously had no idea that the oil would still be gushing  weeks after the original accident.

So,  has he  only just realised that the United States is a hopeless oil junkie?

Obama said he could not predict whether the nation would transition completely from an oil-based economy within his lifetime but that “now is the time for us to start making that transition and investing in a new way of doing business when it comes to energy.”

We cannot blame him for taking this opportunity to pre-empt what will not doubt be a tranche of  populist  pseudo-environmental legislation designed to take everyone’s mind off  the moribund state of the US economy, the unemployment, the poverty, the sliding dollar and the continuing debate about his proposed (and unsustainable) healthcare system.

“Mainlining” crude has been an American problem for years. Perhaps regular visits to Petrolheads Anonymous might do the trick but there is absolutely no chance of the USA weaning itself off oil and its products . When the Earth has been sucked dry, they’ll grow it.

9/11  – or as I prefer to call it, 0.818181  is becoming a great symbol for American politicians – especially when they need a shortcut to their electorate’s emotions and outrage. Personally, I don’t understand the reference because I’ve found them all to be very friendly. Oops! Sorry! I was thinking of 7-11! But for those who are interested, July 11th is America’s 7-11 day!

Obama is showing himself to be a “talker” and not a “doer”. The fact is that he is 100% dependant on BP tackling the problem.  He can stand on the shore bull*******g while BP sorts the problem out but all that his misinformed words  achieve is to bite the BP hand that feeds crude oil to a very confused nation.

If he imagines that the risk of bankrupting BP will somehow speed the process up, then he knows even less about economics than we all suspected.

As a matter of interest,  an American economist pointed out this evening that the colossal value of the reserves that were being accessed by BP’s Deepwater Horizon rig, relegates the cost of any Gulf of Mexico clean-up to  minor collateral damage. The value of the oil reserves is measured in TRILLIONS.

So please Mr President, cut the crap and show some support for  your BP Americans who are trying to solve your problem.