A BRIEF HISTORY OF THE ROMAN CHURCH

20 September 2022

Go back to Diocletian's decision to divide the empire into the Western and Eastern wings in around 286,  two domains—the Western Roman Latin-speaking empire and the Eastern Greek-speaking empire. Constantine founded Constantinople on the existing city of Byzantium in 330. This Wrst-East split was made permanent on the death of Emperor Theodosius in 379. This split separates what we call the Rome of Antiquity from Medieval Rome and the sacking of Byzantium by the Ottoman Turks marks the end of the so-called Middle Ages.

Or back more recently to The Great Schism of 1054 when the Christian church itself split into the Orthodox church in the East and the Roman Catholic Church in the West because the West claimed jurisdiction over the East, which the East refused. After this, the East split again into Greek and Orthodox churches. Things would have been OK, but in 1204 crusaders of the Fourth Crusade mutinied and captured Constantinople. Byzantium (Constantinople) migrated to Moscow starting a war of Christian v. Orthodox. 1854 found protestant Great Britain in alliance with Catholic France and Muslim Turkey, against Orthodox Russia - the same setup when Russia annexed the Chanet of Crimea 260 years later.

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PROBLEMS OF THE UK ECONOMY

14 September 2022

KNOWLEDGE

To understand what's going on in the economy at the moment you need a basic understanding of economics ...which I don't have!

INDICATORS

What's needed is to understand the relation between GDP growth, productivity, employment and wages, inflation, interest rates and the supply of money and credit.

With this knowledge you can build wonderful models of the economy and pretty little gearings linking the chains of cause and effect.

Without this knowledge, we are left swimming in a pool at night.

GOALS

We can say that what we want is strong growth and low employment on the one hand and a suitable inflation rate on the other.

PROBLEMS

What's stopping the UK is:

Low productivity - stagnated since the financial crisis and one of the poorest in the G20.

Low investment - Brexit, covid-19 and the war are all huge disincentives for businesses to invest in, for example and especially, new technology.

Low growth - As a result of poor productivity and low investment, calculates the OECD, the UK will have the lowest growth rate in the G20.

Burdensome taxes - The share of government tax take in the GDP has been increasing since the nineties and increasing strongly with those three brexit covid and this war.

POOR RESULTS

But how has this increased burden helped us? Because the NHS is still in an awful state and declining health care and welfare, and education is failing the country, and the cost of living crisis puts further pressure on Social Security spending.

Low wages - It hasn't helped real income which is pretty much unchanged since the financial crisis. If you thought cutting off labour from Europe would raise wages locally, you'd be wrong - stagnant productivity and bargaining power have meant wages have grown patchily at best.

Real wages means wages net of inflation and so the supply problems caused by covid and this war raise inflation and reduce real wages.

Industrial action - And now we have industrial action with for example transport staff going on strike and doctors quitting their posts.

Devaluing currency - the currency has devalued by 16% since Brexit and that has resulted in more costly imports just adding to home inflation. This devaluation has not helped with the spiralling cost of energy, imported food and resources. 

Devaluation is supposed to help exports, but there's little evidence of that I don't know why.

Record public debt - how much longer will lenders support public debt? Who wants to invest in this economy previously that would be buying up of assets developed in the UK and saving in UK Banks It was over 8% of GDP in the last quarter and yet according to Maastricht commonsense, it's supposed to be 3%. 

But this is an obvious contribution to perhaps hyperinflation.

And reduced capital flows in put further pressure on the currency.

STRATEGY

What should be done about all this?

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WHAT COULD BE PUTIN'S OBJECTIVES?

14 September 2022

Putin's primary concern is the security of his country and that means not letting NATO into Ukraine, which is the weakest link in that long and costly-to-defend Western frontier of Russia's with Central Europe.

Security should include Transnistria for sure, and also to be safe Moldova and Romania - the latter being impossible without starting a third world war.

Sentimentally, Russia should be looking to recover Novorosia, which takes it further West from Kherson to Odessa. I wouldn't wager much money on it, but I think that possibly the people of this Eastern part of Ukraine - Orthodox Slaves of Russian descent and hated as such by Eastern Catholic Nazi-leaning Slavs - are sympathetic more to Russia than to the EU....maybe.

Putin wants to concentrate on purely military targets but that will be difficult considering that the Ukrainian military has installed itself in civilian areas. All he could do is to implore them to temporarily leave while he shells the area flat and they can rebuild upon their return at Russia's expense. A pretty mighty operation all told!

Back to the map and North of Ukraine is Belarus, which is already Russia's.

And North again are the Baltic States which he has via the Sawalki gap. Kaliningrad is absolutely bristling with the latest Russian hardware, all pointed at Europe, so unlikely that NATO will interfere there. 

Beyond that is Finland and Sweden - Sweden a historic enemy that has invaded twice but has probably learnt its lesson from its 1708 defeat that ended its ambitions as an Empire  - so I cannot see these two inviting NATO to set itself up militarily in their country, so they are not much of a threat.

So really Crimea has gone and it is now down to taking back New Russia, with its ethnic Russian population dating back to the time of Catherine II, and closing off Ukraine's access to the Black Sea via Odessa and closing the security gap in Transnistria - the Carpathian Mountains.

That should satisfy Russia militarily, sentimentally and economically. How to achieve all this is the subject of another Post...

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FRENCH NUCLEAR POWER

13 September 2022

Golfech Nuclear Power Plant on the Garonne river, providing the water for its cooling plant, 90 kms upstream from Toulouse and 30 kms downstream from Agen*.

"France is heavily dependent on nuclear power for its electricity needs, while Germany is planning to shut down its last three reactors this year and until recently relied strongly on imports of Russian gas."

The history of nuclear power in France is full of myths and misunderstandings.

There was a plan in France to replace all coal oil and gas with nuclear and build 170 nuclear power stations. In the end, 56 got built - as a result largely of another war, the 1973 Yom Kippur War - almost all not to French design but to Westinghouse designs and all relying on imported uranium.

Maybe only a third of planned got built, but the French nuclear program was a huge success and resulted in large overcapacity, which was sold to Germany and thus Germany and France from an energy point of view became intertwined.

Then the Greens, Fukushima and Chernobyl caused a turnaround in nuclear policy, with France joining Germany, Germany to decommission all its plants by 2022 and France to drop from 75 to 50% nuclear by 2025.

This is the reason why half of France's nuclear power plants today are out of action and many fear restoring operations is impossible because of a loss of staff with the knowledge to maintain and run France's nuclear infrastructure. 

But the French now have this plan to bring back online one nuclear power station a week ...

*The station was designed by the French (P'4 design). It has two pressurized water reactors. The plant has two 178.5-metre-tall cooling towers that draw water from the Garonne to compensate for evaporation - it is a closed cooling loop, meaning water is never released back into the river.

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CHANANG

11 September 2022

These banana leaf boxes of offerings are scattered everywhere and fresh every day.

There are temples big and family size, thousands, and the people light ajoss stick or two every morning and say a prayer.

It's estimated these rituals take up 40% of their income and their time, which is extraordinary.

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FAMILYNESS

This is what I just sent to my kiddies:

"Incidently, very pleased that you are setting goals, making a budget for things - like renovating the apartment, like the move to the new job - and making and monitoring a work plan to achieve what you want, within your resources.

I do think that over time you will start generating quiet considerable amounts of money and the thing there is to know how to invest so as to a) preserve what you make and to b) create further wealth.

So you are independent, standing on your own feet, and successful. You are happy in what you do and in your family. You've got friends and contacts for social and professional reasons who can always advise if needed and do you a favour.

"Familyness", that's what we want. It means you two share missions and support, and learn from your successes and your mistakes too.

Then the last bit of this is to know how to pass that on to your own kids, which sometimes might mean that you put them into situations where they have to sink or swim ie they have to learn for themselves, which generates in them great self-esteem and you as a parent can be confident your kids will succeed and pass on the baton to their kids. Even though you're always there in support, you don't takeover ... that's your legacy work.

(Remember we always had four things : successful, happy, network, legacy.)

On a different subject ...

I look forward (still) to hearing the three-part story of how you fit into the team; how the team fits into the company; and how the company fits into the industry. That's bottom up, or you can tell it top down, whatever, but I look forward to seeing the whole jigsaw puzzle please."

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UK ENERGY BILLS, PER ELECTRICAL APPLIANCE

8 September 2022

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THE PRICE CAP

7 September 2022

Officials from the U.S. Treasury and the British cabinet look at oil and gas futures and see them lower and stable, and conclude that markets are already anticipating that the price cap will work.

The idea of the cap is to keep Russian oil gas and refined products flowing but at a lower price so as to reduce the Kremlin's profits.

Countries will have an incentive to co-operate not just because the cap will lower prices, but because the sanctions will cover shipping, insuring and financing.

The multinational companies will want to co-operate because otherwise they will suffer American sanctions. And it will be better for all companies, big and small, to co-operate rather than trying to find workarounds, than to risk an outright ban on all purchasesfrom Russia. If any companies do find ways around, they will suffer financially from higher prices for insurance etc so they'll have an incentive to co-operate.

Neither is it expected that Russia will make any profit greater than break-even (which is twice the break-even point of Saudi) by increasing output as its creaking supply infrastructure will reach its limits pretty quickly. 

And Moscow cannot cut off the oil to those who participate in the cap because it would deprive itself of the income that it needs to pay the rising costs of this war.

Well, if you believe any of that...! We know without even having to examine the arguments or the data that this will be yet another American disaster of - for it, and for us - global proportions.

The takeaways from this particular American adventure and debacle are that it is best to keep governments small and avoid undue interference in market mechanisms and any grand schemes for sudden change. It demonstrates why globalisation and making economies dependant the ones on the others as reducing the risk of war, is a wise course: we are seeing what happens if America does not follow its own post WW2 policy aim and instead provokes war with Russia.

So when we look at oil and gas futures and see them lower, we can conclude not that markets are anticipating the success of the price cap in reducing the costs of oil and gas to the economy, but that demand is falling off a cliff because a major recession for the global North is on the way.

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WILL THE OIL PRICE CAP BRING RUSSIA TO ITS KNEES?

4 September 2022

As to the Western plan to cap the price of oil, we remember that the original idea was to weaken Russia and have a colour Revolution that would put out Putin and put in a government sympathetic to the West.

The three strategic axes have been military, economic and network. 

MILITARY DEFEAT STARING AMERICA IN THE FACE

The military looks like a big failure for Ukraine, with Russia gradually encrcling,  kettling, cauldroning or drag-netting and howver it is described, destroying the ukrainians - though I fear direct NATO / American involvement.

TABLED TURNED ON SANCTIONS

Russia has turned the table on sanctions by hooking new customers and old suppliers.

a) Russia is cutting off all supplies to Europe apart from the Turkman line - this will de-industrialise Europe, especially Germany ... it already is.

Plus America cannot replace with LNG as it has shortages of its own to deal with even if Europe have the infrastructure built and in place to re-gasify; Saudi can't or won't increase output and sees the price cap as a method to wrest control of pricing from OPEC; India is most unlikely to cooperate as it currently resells Russian oil to the West through numerous back-channels; Iran and Venezuela?....try.

b) New pipelines are being built out to China, meanwhile Lloyds of London will go down the pan because tanker owners will find other ways to insure the tankers, notably through Indian insurance and through Russia itself - although here I worry very much that the insurance will be a sham and in the event of an environmental disaster (clear-ups cost billions), there will be no money to clean up the mess.

c) Alternatives to Swift and bank cards have been developed and customers freely pay in roubles. This is weakening the need for US dollars as a reserve currency and safe haven in times of trouble.

ONE-WORLD NETWORK BROKEN

Networking is the fundamental point as the whole of the post World War II arrangement was designed to provide countries with safe navigation for imports and exports and if you start trying to politicise that, reducing its practical transactional value, then all those countries - the Global South - will turn against you and this is what's happening with the surprising addition of Argentina and  Saudi Arabia to the BRICS. 

So here's a rival system to the dollar and American world hegemony and there's no reason at all why any of Russia's new customers should agree to a ridiculous idea of a price cap when they're perfectly satisfied with the arrangements they have with Russia and do not need so much any more to kowtow to American pressure.

THE FUTURE

So where does this leave the West? It's in a position where the only positive progress possible out of this hole it's dug itself into is to concede some form of victory to Russia.  

It has lost Russia as a partner and it's China that has taken Russian resources in our place. I cannot see how Europe can find back the energy it needs to run its economies.

So it is Europe that is permanently weakened with the loss of Russian cheap energy; and its politicians lying prone before America, will be / are being kicked out of office.

Ukraine is run by thoroughly corrupt oligarchs and will never get into NATO or the EU - despite Zelinsky's maudlin and aggressive pleadings - and will find itself landlocked, cut off from the Black Sea as Russia takes back Novorossiya and the Khanet of Crimea. 

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WHAT IS GADOO GADOO?

4 September 2022

I'm here in Bali for a month. Do I escape a routine and stressful home life? Not really - I bring my routine with me : excel, blogg, correspondance, chat with family and friends, politics, airbnb, Youtube .... And I can hardly describe my life as stressful.

But the routine activity volumes are down because a new destination means local activities to explore. Beach burn, walking round town monuments galleries temples museums, shopping centre (Krishna is good for Indonesian visitors, a bit inland; Beach Broadwalk is trendy for foreigners).

Talking to the taxi driver yesterday on our way to Krishna, he said most of his work was taking foreigners to restaurants, the insides of which he'd never see. He wondered what the restaurants were like, but could never know as they were not his class, not his paygrade. He wondered what his customers do back in their home country, and what they think about.

So one day he asked a customer what he would eat in that restaurant and the man said "gadoo gadoo". Well, gadoo gadoo is local food - some vegetables, boiled egg, peanut sauce, chinese wafers (like I ate yesterday at Krishna)  here's a picture of a quality example....of course no meat, meat is very expensive to buy here for local people.

The driver was surprised and asked the man  "what is gadoo gadoo?" And the man replied describing a dish with vegetables yes, meat (he thought probably a steak), french fries. Which is true, this was the tourist's typical restaurant gadoo gadoo!

So the native population in this tourist economy are a simple people, homogenous, conformist, living a poor life, often in a minority to a colonising army of tourists, whose faces change every few days.

This is a true story, but it's also a variation on the old "prince and pauper" fairytale.

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WHY IS STERLING COLLAPSING?

2 September 2022

It's about inflation, the current account balance, the govt budget, the national debt and prospects for growth in the UK economy. They are all moving in the wrong direction and everytime a forecast is published, it's worse than the previous....could there be still worse to come? 

Result: stirling is hardly a safe haven for people wondering where to invest and as exports fall so does the demand for the pound.

Last time I looked at inflation it was supposed to hit 18% by January '23, but today when I looked, Goldman Sachs are saying 22% if Energy prices hold at current levels.

The standard response to deal with inflation is to put up interest rates, even though for much of the inflation, there's nothing much the bank of England can do about it. Two-year government bonds have just gone up 100 basis points -  1% really is a lot - to almost 3% and the forecast is for 4% by May '23. Yet the theory is that interest rates should rise higher than the inflation rate if the Bank of England is to get on top of inflation.

I don't have the figures to hand for UK debt, but I remember that a quarter is index-linked, so if interest rates go up and inflation goes up, the UK is really skewered - particularly as at the moment Liz Truss is thinking that the only way of dealing with the cost of living crisis is by reducing taxes. This would mean yet more borrowing and at the new higher rates of interest .

So while all the UK indexes were plummeting badly yesterday, the footsie 100 slightly less than the others and because this is where the big int.l companyies with foreign earnings are found.

You'd think gold would do well with this threat that hyper inflation will devalue the currency, but in fact 'No', it has not been  doing so well this year - I guess that is dollar strength.

So once again looks like American indexes will outperform as this is the only safe place to put your money, ie into the dollar. But into short term US bonds is the particular advice.

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