The Unique Property
Politicians -v- Common Sense
None of the current mess in the Ukraine should have occurred. We
have war in Europe because of two things. First, a corrupt
government in Kiev, largely in the pay of the Obama
administration, started attacking the Russified east of Ukraine,
mainly the Donbas region. The bombing started eight years ago.
France, Germany and the UK set up the Minsk Agreement to try and
get Kiev to stop the bombing and start dialog. The US
administration kept goading Kiev to ignore that agreement, which
they did. In short, they went on bombing the Donbas. I assume
the idea was to provoke a reaction from Russia, which is what
eventually happened. We now have the Western powers encouraging
the war by sending arms to Kiev.
If you think it's okay for Kiev to bomb Donbas, but don't like
the Russian response in trying to protect Donbas then so be it.
My view is that US led Nato is a menace. This war should never
have started in the first place. It is like all wars, they are
fomented by cliques that will profit by such a war. And they get
away with it because the sheep of this world get excited by war,
and egg on the protagonists, but then complain when they find
themselves disadvantaged. They then behave like the tribal
masses in darkest Africa, and disenfranchise the opposite tribe.
Tribalism is not far below the thin veneer of sophistication.
The second problem is that politicians can count on the inner
tribalism of the electorate to rally support for their own
creaky positions. The Biden administration desperately needs
something to take the focus away from their own appalling
behaviour and disastrous ratings in the polls. Macron is up
against it with Marine Le Pen, and Boris was losing popularity
by the minute. Poncing about aiding and abetting a war is good
for their egos and good for their ratings. Things are a little
different in Germany. They are in deep trouble over this, and
no-one there has a clue how to deal with it.
If we had proper statesmen in politics, they would sit down and
work something out, which would probably mean letting the Donbas
vote on where they want to go, instead of being forced by bombs.
In other words, adopt the internationally agreed Minsk
Agreement. That could mean the end of the war within minutes.
Unfortunately we have egotistical morons in charge of this, so
it is likely to get worse.
The short term view is that the shortages will worsen. The
biggest hit could well be in the agricultural markets, with
international corn supplies being seriously hit. It could also
lead to massive fertiliser shortages, which will in turn hit the
It is ironic that the sanctions are going to be handed out to
the West instead of to Russia. How daft is that? But the usual
response in times of war is to head towards hysteria. That could
well be the next step which will lead to a worsening of the
situation, and the impoverishment of the whole of Europe.
There are two scenarios. The first is that some sense prevails
and a consensus of entities get together and enforce the Minsk
Since politicians are not noted for their sense, that seems a
remote possibility, in which case, hunker down for the long
term, or get the hell out of Europe. It's a doomed continent in
any case. It is an old concept and is heading towards second
childhood. Every year it takes a smaller position in world GDP
and in world trade. Once upon a time 40% of world trade came
through the port of Liverpool. Nowadays only 14% of world trade
involves the whole of Europe. Work it out for yourself. Europe
has ceased to matter in the grand scheme of things, and is
painfully sinking further and further into irrelevance.
There is also the little matter of money. The West is steadily
getting poorer. You should be able to value your currency by how
much it is worth. Sounds so obvious that it is a tautology. But
do the sums.
How much is money worth in he UK? Inflation is raging at about
7%, if you save your money you will get less than 1% on that
money if placed in government bonds. That means your money is
officially decreasing at the rate of just over 6% p.a. So that
is what your money is worth, -6%. What happened to the concept
of sound money?
I'll tell you, it went to Russia, where the rouble is currently
the only currency on the planet whose value is tied to gold. It
is the only hard currency, all the others are fiat currencies.
Sanctions have spectacularly backfired. But then what do expect
when matters are left to politicians.
So where are we going?
European countries either have to do a deal with Russia or
sacrifice a huge chunk of their industry simply because they
won't have the energy to power it. The longer this lasts, the
worse any terms will become. It doesn't take a genius to work
Let's lay out the cards.
The cost of energy is going to rise significantly. The value of
money is going to fall significantly. The cost of living is
going to go thru the roof. There will be food shortages.
Interest rates will continue to rise thus making mortgages and
company borrowings more expensive. This will cause a reduction
in investment, and a reduction in consumer spending, reflecting
back on stock prices and company profits. The increase in
general costs will mean people have less money to spend, which
will reflect on house prices, because they will have trouble
coping with mortgage payments. Expect forced sales from people
who have become over-committed, leading to a more general
selloff as prices fall further due to the increased sales.
Unless this mess is solved by mid summer, expect serious
consequences for the worse, and you guys out there are not going
to like it.
How does it get solved?
Easy-peasy, force Kiev to adhere to the matters set down in the
Minsk Agreement. As I keep saying, if people use some
common sense (which I know is in short supply these days) there
really isn't a problem. This is a phony war.
Whatever your own wishes or beliefs, Eastern Ukraine is going to
end up facing Russia, and Western Ukraine facing West. It's an
unhappy country at the moment, and war isn't going to solve that
In the meantime the current leaders of the UK and Ukraine should
get on well. The Ukrainian government is headed by an actor who
loves the sound of his own voice, and dances in front of the
cameras, but is, at bottom, a buffoon. Remind you someone
To sum up: If you put your faith in politicians you can
guarantee this war will get worse and worse, and you will suffer
more and more. If you put your faith in common sense, it will be
all over by tomorrow. Any takers for common sense?