2 April 2022: Maskless soon?; Nothing else but bad news, except that from Idaho.

Night’s candles are burnt out, and jocund day stands tiptoe on the misty mountain tops

Spanish life is not always likeable but it is compellingly loveable
Christopher Howse: ‘A Pilgrim in Spain’

Covid

Spain is one of the very few European countries where the wretched masks are still compulsory. But the government has hinted that, if cases don’t rise in March, it could soon lift this requirement in at least some indoor settings. Fingers crossed.

Cosas de España/Galiza  

Politics: The PP needs to find “a way out of an existential crisis” said Jose Maria Aznar the former prime minister. When [the Galician] Alberto Feijóo is anointed the new leader of the party today, members hope it will mark the end of the identity crisis of the last 4 years. But some question whether the reset will be enough to win back traditional supporters who have been drawn to the radical right Vox party.

The economy: Allegedly because of poor productivity, Spain’s inflation rate of 9.8% is second to only Lithuania’s 13.9% in Europe.  

An overview of what has changed in Spain as of April 1. One of them . . . As of yesterday, your petrol/gas here will be subsidised by the government, ie taxpayers

To say the least, I’m not a fan of smoking/smokers. And Spain has long had a lot of these – the percentage among young women being surprisingly high. So, it’s good news that Spain is posed to ban smoking on terraces.

I’m not a fan of octopus either – a sacrilege here in Galicia – but I understand why Spain’s decision to licence an octopus farm hasn’t been met with universal approval. Some considerations here.

María’s Beginning Over 12: Another Year – a birthday reflection.

Russia  

Self-destruction? An informed view here. The really worrying paragraph: Putin’s usual way out of trouble is to escalate. People in Moldova and in the Baltics should be extremely, extremely nervous right now. It’s absolutely possible that he might start something there, just like he did with the Donbass as a way out of Crimea.

The Way of the World/Quote of the Day 

In the end, there is no getting away from it; the imported nature of today’s inflation, given wings by the easy money policies of the last 20 years, is going to make us all poorer. See the article below for the rationale behind this claim.

Social Media

The Chinese TikTok app is helping young users find videos that encourage eating disorders and radical weight-loss programmes before bombarding them with dangerous material. Algorithms prey on teenagers with mental health problems, targeting them with videos about self-harm and even suicide. Experts said that the scale of dangerous material on the app was “out of control” and accused its executives of exacerbating the problem by failing to reveal data about its users.

TikTok is the UK’s fastest-growing significant social media app and is the 3rd most used, behind Facebook and Instagram.

Finally . . .

From the Idaho Perfume company: Formulated from essential oils and distilled Idaho potatoes, our new fragrance embodies the irresistible essence of potatoes. ‘Frite’ makes a great gift fo anyone who can’t refuse a French fry. The smell is too good to resist, giving off the aroma of fries in all their greasy, salty splendour.

For new reader(s): If you’ve landed here looking for info on Galicia or Pontevedra, try here. If you’re passing through Pontevedra on the Camino, you’ll find a guide to the city there.  

THE ARTICLE

This is a new age of chaos, famine and disorder: The inflationary tsunami will have consequences even more pernicious than the cost-of-living squeeze: Jeremy Warner, The Telegraph

Almost inevitably, economic turning points tend to be more obvious with the benefit of hindsight than they are at the time, but even the blindest of observers couldn’t fail to notice that we are in the midst of just such an earthquake right now.

More than 30 years of disinflationary forces have given way to a veritable tsunami of inflationary ones, with potentially far-reaching implications for cross-border migration, labour market bargaining power, the size of the state, the public finances, corporate profits, and much else besides.

Grown complacent on the idea of permanently low inflation, Western governments came to believe that almost any economic problem could be fixed by simply turning on the central bank printing press. For a while it seemed to work, spectacularly so during the pandemic when burgeoning, war-time-like government deficits were monetised with apparent abandon. Pound for pound, the Bank of England matched the great outpouring of debt issuance with purchases in the market, such that today the Old Lady of Threadneedle Street owns around a third of the national debt. We were not alone. Virtually the world over, each economic shock has been met with another lorry load of new money – around £25 trillion of the stuff since the financial crisis alone.

But that age is now over, and with its passing comes the grim realisation that it was not a cost-free exercise after all. With each further uptick in inflation, and with each increase in short-term interest rates as the Bank of England belatedly attempts to turn the fire hoses on resurgent inflation, debt servicing costs mount further into the stratosphere – a staggering £83 billion next financial year, according to the Office for Budget Responsibility, or more than four times higher than the pre-pandemic level. This would make it the fourth largest item of Government expenditure after the NHS, the state pension and education.

But all of this is just detail. The bigger picture looks more worrying still. Spanish inflation in March was almost 10%, and even in Germany, pathologically averse to rising prices after the last century’s two hyperinflations, inflation was 7.6%. Lest you think the UK is getting off lightly, with an inflation rate of “just” 6.2% in February, best not to gloat; we’ll soon be up there with the rest of them.

One thing we can be pretty sure of, given how hopelessly wrong-footed policymakers have been, is that inflation will peak higher and prove a deal more persistent than currently anticipated. Already, forecasts are being urgently revisited in light of China’s decision to reimpose strict lockdowns amid a renewed outbreak of Covid.

Beijing arrogantly believed it led the world with its zero tolerance approach to Covid, but its vaccines have proved largely ineffective, and unable to admit its self-proclaimed “gold standard” might have been wrong, it is now stuck with it, exacerbating shortages in global supply chains and further adding to the inflationary pressures.

The price of virtually everything is going up, but particularly concerning is food. This is tough enough for the poorer elements in society even in advanced economies, but in the developing and third world it is particularly acutely felt and is nearly always politically destabilising.

Back in 2007, the soaring price of corn caused a full-blown riot in Mexico City; the so-called Tortilla Crisis. Exacerbated by war-induced crop failure in Ukraine, we can expect much worse this time around, including famine in some parts of the world. This in turn is likely to lead to a fresh migration crisis on Europe’s borders over the next several years.

In Germany, the cost of weaning consumers and industry off Russian oil and gas is forecast to be anywhere between 0.5 and 6% of GDP. The range is so large because there is no prior experience of such a rupture, so it’s basically just guesswork. The case for an immediate boycott, even if Putin doesn’t impose his own ban, is powerfully made in some quarters on the basis that the short, sharp shock approach at least has the merit of getting the adjustment over and done with quickly. Ultimately, Germany will survive the end of the co-dependency much better than Russia.

Industrial rationing next winter, with many factories forced onto short working weeks or extended holidays, is widely regarded as inevitable if the present standoff over Russian demands for payment in roubles persists.

In the end, there is no getting away from it; the imported nature of today’s inflation, given wings by the easy money policies of the last 20 years, is going to make us all poorer. Who takes the brunt of this pain – capital or labour – has yet to be properly confronted, but with the labour market so tight, my guess is that the hit to corporate profits will be bigger than to wages. In the public sector and the utilities, we can also expect a resurgence in union activism.

No two decades are the same, but the parallels with the 1970s grow stronger by the day. As then, we’ve largely ourselves to blame; too many years of papering over the cracks has left us cruelly exposed.

2 comments

  1. A few comments.

    The Kremlin & Russians in general, are developing a siege mentality. Russia against the world.

    https://faridaily.substack.com/p/now-were-going-to-fck-them-all-whats?s=r

    I certainly agree with Alastair Heath about Biden from yesterday.
    Under Donald Trump, none of Biden’s policies would have seen light of day.

    https://www.youtube.com/shorts/Hqkf8h0l9gg

    https://www.youtube.com/shorts/UpoG0TBjvPY

    Two paragraphs from Andrew Neil’s article in DM:

    “Rows are breaking out between political leaders, the generals and intelligence agencies over who’s to blame and what to do.

    None of this is getting through to Putin, whose only regular contact is with his massive personal security detail. He has reportedly grown ever more paranoid, shouting at underlings, ranting about betrayals and pointing the finger at anyone he can find to blame for the mess. ‘It’s like Downfall, that German film about Hitler in his bunker,’ one source tells me.”

    This prescient Putin parody was posted 4 days AFTER the Russian invasion.

    Liked by 1 person

  2. Something else.

    https://nitter.net/kamilkazani/status/1509968359483445256#m

    https://www.wilsoncenter.org/person/kamil-galeev

    Liked by 1 person

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