Not one more penny

COPENHAGEN

--Compromise falls short of EUR 1 trillion target set by G-20

--Crisis lending expanded to EUR700 billion

--Europe facing criticism not doing enough on its own

U.K. Chancellor of the Exchequer George Osborne told his European Union colleagues Friday that his government will reserve judgment on whether an increase in the region's firewall is enough to win extra U.K. funding for the IMF

An increase in the bailout fund's resources was seen as key to winning further funding for the IMF from other leading non-euro zone economies, including the likes of China and Brazil, as well as the U.K. Fresh IMF funds could be used to further boost the euro zone's firewall if the debt crisis intensifies

TO GEORGE OSBORNE,
CHANCELLOR OF THE EXCHEQUER
SECOND LORD OF THE TREASURY
HEADQUARTERS
HM TREASURY
2/W1,
1 HORSE GUARDS ROAD,

LONDON,

SW1A2HQ.

SECRET

March 30,2012

Sir, regarding the meeting of euro finance ministers,

I have the honour to refer to the very serious calls which have recently been made upon the Home Nations taxpayers in an attempt to stem the collapse of the Euro on the Continent.

2. I hope and believe that our European Allies may yet be
victorious in staving off necessary bailouts for France and Belgium, but we have to face the possibility that they may be defeated.

3. In this case I presume that there is no-one who will
deny that England should carry on, even though the remainder of the Continent of Europe is dominated by the Germans.

4. For this purpose it is necessary to retain some
minimum financial strength in this country and I must request that the Monetary Policy Council will inform me what they consider this minimum strength to be, in order that I may make my dispositions accordingly.

5. I would remind the Monetary Policy Council that the last estimate which they made as to United Kingdom cash necessary to send to defend the Euro was 7 billion pounds, yet the latest estimates are now possibly the equivalent of one trillion euros.

6. Once a decision has been reached as to the limit on
which the Monetary Policy Council and the Cabinet are prepared to stake the existence of the euro, it should be made clear to the Euro Zone leaders on the Continent that not a single penny from British taxpayers beyond the limit will be sent across the Channel, no matter how desperate the situation may become.

7. It will, of course, be remembered that the earlier estimate of 100 billion euros was based on the assumption that the collapse would come from just Irish, Greek and Portuguese banks. We have now to face the possibility that default may come from Spain, Italy or even from the North coast of France and Belgium. The result is that the necessary bailouts become very much extended at the same time as our own coffers are much reduced.

8. I must point out that within the last few months the
equivalent of £7 billion pounds have been sent to France, and that the more pounds which are sent to France the higher will be the wastage and the more insistent the demands for further monetary reinforcements.

9. I must therefore request that as a matter of
paramount urgency the Monetary Policy Council will consider and decide what level of sterling reserves are to be left to the Treasury for the running of this country, and will
assure me that when this level has been reached, not one
more penny will be sent across the Channel however urgent
and insistent the appeals for help may be.

10. I believe that, if an adequate economy remains in this country, if the coalition remains in being, and
if sterling is not diverted into the International Monetary Fund we should be able to carry on single handed for some time, if not indefinitely.

But, if the financial reserves are drained away in desperate attempts to remedy the situation in Europe, defeat in France will involve the final, complete and irremediable defeat of this country.

I have the honour to be,

Sir,

Your obedient Servant,

William C. Quango

Select Committee,
Her Majesty's Revenue and Customs.

{Apologies to Sir Hugh Dowding - CIC Fighter Command - 1940}

Gorgeous George Has Done Us All A Favour

Returning from an excellent trip to Turkey - apologies for being away when the juicy energy stories broke - the question of Islam in Europe is fairly well to the fore in my mind.

Pleasure it is, then, to see Galloway triumph against Labour in Bradford using a blatant anti-western pitch. We know exactly what will happen next. In constituency after constituency where there are large Muslim communities, Labour MPs will be trimming like fury to secure their vote: nothing will stop them. Their efforts will seep into written election material and we can have the issues out in the open.

I don't count on the hustings to deliver a nuanced debate, but it will at least be rather more en clair than to date. The nuances can emerge when there is more widespread focus; and we can think through properly, inter alia, the rather significant Turkish question.

More on this when I have had the chance to marshal my own thoughts.

ND

PURE GUTLESS

What can we say about a week where the government's incompetence has created a drama out of a crisis? Come dine with me, for £250k, but it won't influence policy.
The Home of the Whopper?

Go to work on an egg - because the car's got no petrol.
And when it Absolutely, Positively has to be there - put the price up.
Watch out , watch out. George Osborne's about - Better wait for that pasty to cool down a bit before purchase. Nothing for it but to turn to minimum alcohol priced drink. Get Mashed get Smashed.

Ages since we had a dress down Friday.

ADVERTISEMENT COMPETITION.

Best adaptation of a popular commercial slogan for political purposes.

Efforts in the comments.

Question Time - Panic edition

David Dimbleby presents Question Time from Portsmouth. On the panel: the comedian Alexei Sayle,{I love the old Marxist Alexi and won't hear a word against him.}
shadow foreign secretary Douglas Alexander MP, {clever but shadowy figure who manages to be a Blairite in the Brownite camp}
children's minister Sarah Teather MP, { hopeless , hopeless minister. I'm amazed Cameron hasn't insisted she be embargoed. Mind you, its not likely even she could cause much more embarrassment to the coalition this week. Conservative Anna Soubry MP, 'A' list Tory but incredibly gaffe prone. Is there really no-one in command at Con-HQ?
and the columnist and chair of the National Trust Sir Simon Jenkins.{who was good on Newsnight.}

Malcolm tucker guests this week:
- Petrol and panic - is it wise to store a flammable liquid next to firelighters?
- Pie panic - Cameron once ate a pasty you know.
- Stamp panic - "when did you last send a letter not on expenses, PM?" - Oohh, erm..I think it was in Leeds..sometime last year..erm..Reader's digest prize drawer I think it was."
- TV cameras allowed in court - panic in the streets
- Underlying cause of the riots - it was someone else's fault,

Current Leaders

Dick the Prick - 76
Measured -76 {+1 after replay analysed}

Philipa - 68
Bill Quango MP - 68
Nick Drew - 66

Cityunslicker - 63
Miss S-J - 61
Miss CD - 61


Malcolm Tucker - 59
Botogol - 59
Timbo614 -59
Budgie - 54
Sebastian Weetabix - 51
appointmetotheboard - 50


Hopper - 46
Jan - 42
Hovis - 41
Andrew - 38
GSD - 38


lilith - 16
Mark Wadsworth -12
Amy 10


Anonymous - 7
Kynon - 4
James Higham - 4
Blue Eyes - 2
John in Cheshire - 2
EK -1
Dearieme - 1

LIES ALL LIES

There's no need to be surprised really, is there ? But somehow it's always annoying to be lied to by officialdom.

A mile from Schloss Drew, set in substantial grounds is a psychiatric hospital with a large secure unit housing various unfortunate criminals. Some periodically escape: we can always tell because a helicopter comes to search the grounds methodically: hard to miss really. There is of course a liaison committee for local councillors, residents' associations etc, and questions are naturally asked. No, we are always told, everything's been fine. But what about the helicopter ? Oh, we don't know about that - perhaps there was a road traffic accident ? or maybe a burglar spotted in a back garden. So why was it hovering over the secure unit ? etc etc; a complete stonewall every time.

The latest incident is as follows: we have always been assured the secure unit is strictly for adults only (explicitly stated to be 18+); and while there is an adolescent unit in the hospital, it is non-secure, for day patients and, once in a while, the occasional (non-secure) short-stay in-patient.

So what happens next ? A group of four adolescents have escaped from, errrr ... the secure unit.

Will we ever find out what they were doing there ? My expectations are low.

ND

More from Gazprom

Here’s a current source of quiet amusement from the treasure-trove that is the Gazprom website. You can view this gem until they cotton on to the problems they might be causing themselves and axe it.

Background: in its ill-fated campaign to preserve oil-indexed gas pricing for long-term gas sales contracts, Gazprom has fiercely maintained that gas prices emanating from spot-market trading (the obvious source of price indices) are unrepresentative or even meaningless, because in some European markets only a modest proportion of the total amount of gas being delivered gets traded in the spot markets or on exchange. Thin trading in Europe is bad.

For their internal Russian markets, however, they’d like to set prices based on exchange-trading over which they probably have quite a significant *ahem* influence. So in Moscow, thin trading is good, and we read the following:

“The application of exchange quotations as market price indicators is one of the main features of a civilized gas market. Past experience shows that 5 to 10 % of the industry output should be traded at an electronic platform for the exchange price to become a benchmark for contract prices ... using modern gas exchange technologies at the Electronic Trading Platform of Gazprom Mezhregiongaz – a trading company of Gazprom.”

Civilised market … 5-10% … trading company of Gazprom … Actually, ‘quiet amusement’ is entirely the wrong description for how this grabs an energy-market bore such as myself. It’s bloody hilarious.

ND

March Trading Update

Another month goes by and yet again I have missed some great trading opportunities. It's not that surprising on AIM some of my share seem to move 15-20% in a few minutes and being employed full time I miss it alot.

The key mover of the last month has been GKP, which has really taken a beating as takeover speculation comes off. However, I am still confident this thing will sell at some point this year and it will be for more than the £4 it reached.

EMED, well the election is now and a new Government should approve the mine - all set to fly at last?

XTR -  I have dropped after a bad well drill in the North Sea. Having stayed with it for 3 years I have given up - no success at all and nothing to come for months. I sold at 1.5 which means on balance I came out slightly at a loss after some sells in profit and sells at a loss in previous years. I will keep tracking it, but it was only a small amount anyway (£1k).

IAE - Still awaiting takeover news, due tomorrow!

XEL - Again, now drilling again in the North Sea. Finely balanced here on a tipping point with the charts, with no news this could sink back to £1 or it could bounce. The Key is the support at 117-119p. With reserves of 116 million barrels this is valued about 1/3rd of what it should be. So a confident long-term hold.

Really looking at Circle Oil, San Leon Energy and EMG this month for future investment.

Retail numbers

Retail numbers

* 35% - growth in the umber of supermarkets in the UK since 2001
*£6bn - Online spending in the UK in 2004
*£23bn - Online spending in the UK 2010
*£1.3 bn - Level of m-commerce in the UK 2011
*£19bn - predicted level of m-commerce in 2019

*15,000 - reduction in town centre stores between 2000-2009
* 6.5% fall in number of town centre shops by 2014

Already those department for innovation, business and skills numbers are getting worse.

The number of empty shops on the UK high street hit an all-time high last month amid a wave of retail failures in the post-Christmas period, according to a survey published today. Town centre vacancy rates rose to an average of 14.6% in February, from 14.5% in January, the Local Data Company (LDC) said, the highest figures since the index started four years ago. This equates to one in nearly seven shops being shut in the UK.

The m-commerce is an odd stat to use. It just means a purchase via a mobile platform, like a phone. I doubt m- and e-commerce are mutually exclusive. Online is online.

However internet sales had a very slow growth in the UK. It took about 15 years to really take off. Partly this was because the number of online users had to grow. And the business had to develop smart, easy to use websites to shop from. And people had to trust that they were going to actually get something sent to them. Even today internet sales only account for about 10-11% of total retail sales. And if you strip out the supermarket's food sales it would fall a few % points I'm sure.

m-commerce won't need to wait as long to ramp up volume. The E-infrastructure is already there. If anything £19bn looks a bit low.

Alcohol unit pricing sillyness

OK, so my commitment to this Government ended sometime ago, but really, alcohol unit pricing...some quick thoughts as a very busy day for me:

1 - Drinking is falling, has fallen straight through the recession for a number of years now.

2 - The Dutch tried this idea, it gets banned by the EU Courts eventually anyway

3 - 'It's a free Country' - are things not bad enough in the Country that we can;t think of even more stupid nanny state ways to interfere with people's lives?

4 - Together with excessive alcohol duties, this measure further pushes up inflation

So really, it's an illiberal, ill-thought out, economically damaging and unworkable idea.

How did this get through the civil service? I really hope ti is just a kite flying expedition to get the budget of the Newspapers' front covers.

Question Time - Rich vs Poor, Old vs Young edition

David Dimbleby is joined in Grimsby by Vince Cable,{our old friend. - Vince for Health Secretary!} Chuka Umunna,brightest of the bright of the New-Old labour front bench. Bright like an eco bulb. Takes a while to warm up to his 11w glow.} David Davis, {the last principled politician in Parliament. Principles tend to shift about a bit } Melissa Kite {Spectator journo and horse lover,} and Marina Lewycka.{A successful comic novelist who I don't recognise. Writes about the elderly too. Which may well come in handy for her tonight.}

Mr Drew opens the batting.
1) Budget, is '45%' etc the death of "we're all in it together" ?
+ lots more budget-driven drivel
2) Reaction to Muamba - is this the Best of British ?
3) Should ransoms ever be paid ?
4) Are the French shootings the beginning of some spill-over of ME into EU and wider ?

Only 4 topix as budget-drivel sprawls

Current Leaders

Measured -69
Dick the Prick - 63
Philipa - 61

Nick Drew 57
Bill Quango MP - 56
Cityunslicker - 56
Miss S-J - 54
Malcolm Tucker - 53
Miss CD - 52
Timbo614 -51
Sebastian Weetabix - 51
appointmetotheboard - 50
Botogol - 50

Budgie - 45
Hovis - 41
Hopper - 40

Andrew - 38
GSD - 38
Jan - 35

lilith - 16
Mark Wadsworth -10
Amy 10


Anonymous - 7
Kynon - 4
James Higham - 4
Blue Eyes - 2
John in Cheshire - 2
EK -1
Dearieme - 1

Using Contracts to Bind Future Governments

And there was you thinking that no government could bind its successors. Now, in a widely-trailed move, Osborne has announced reliefs on oil- and gas-field decommissioning costs that will be delivered contractually.

"We will end the uncertainty over decommissioning tax relief that has hung over the industry for years by entering into a contractual approach"

This is because while future governments may change their minds, contracts are pretty inviolable. It was an approach that I first noticed when it was being advocated in respect of the various bungs the renewables industry wants from Huhne's "electricity market reforms": they don't want subsidies any more, they want contracts. (Anyone know of any other precedents ?) Ironic, of course, that it's Big Oil that now wants in on the same largesse.

Perhaps I'm wrong, but I find this highly suspect on philosophical grounds. It's not obscure why a company that has temporarily conned its way into a government's affections (but fears the government or its successors might one day wise up), should be keen to lock in the scam. But why would a government wish to pander to them thus ? I know how the argument runs: 'because if you don't, no-one will invest in what you want us to'. Well perhaps no-one should invest in something that depends on an obviously daft, faddish subsidy.

There will be no end to this. It's a trap for governments in common law jurisdictions, where the sanctity of contracts really means something - and that 'something' is precious, not to be abused by governments and their subsidy-lackeys. Of course, in civil code regimes they all chant pacta sunt servanda with the best of them; but they also know that in the fullness of time a court may re-interpret (or indeed re-write) a contract based on changes in circumstances. That just doesn't happen under common law, which ordinarily I would say is incredibly important.

I really don't like this turn of events. Anyone think I'm barking up the wrong tree ? (Or just barking, yeah yeah ...)

ND

UK Budget - Open Thread

I doubt we will have much to add, this is the most pre-leaked budget in history and makes Ed Balls look like he keeps his own counsel.

However, debate it will generate and we should engage in that for our own amusement...

Quick poll - 50p tax

Before George gets up to tell us how great everything is, a quick readers poll.

Should the chancellor scrap or lower the 50p tax rate?
Yes/No

Just in the comments please.

*Note as usual on budget day the C@W bloggers are somewhat busy.
Updates as possible.

Enron Accounting: Like Gordon, Like George

Alternatively; despise Gordon, ...

Alphaville is right: it's surprising that the boy Osborne's sleight of hand over the Post Office pension liability hasn't been more widely slated. This is the merest Enron accounting trick.

When I started blogging here 5 years ago, à propos of the commonplace accusation that Gordon Brown indulged freely in Enron's accounting methods I asked the following questions:

1. why would a sovereign nation with a developed economy and enormous borrowing capacity bother with such fun and games? (Is anyone fooled?)

2. how and when, exactly, is it all going to come unstuck?

Today we may be a little nearer to seeing the answers. But it's just so tempting, isn't it George ? Really, really tempting. Welcome to the Gordon'n'Ed Enron tribute band. Now - how about some PFI ?

ND

So, Farewell, Hector Sants

So. Farewell (again)
Hector Sants

"It was nothing to do
With me
Guv'nor"

Yes
That was your catchphrase

"Sants is Pants"
That is what
Others said

Now you will never
Be
Guv'nor


E.J.Throgmorton
(0.5%)

Outstanding Cartoon

I'm guessing that not so many C@W readers see this strip - Stephen Collins in the Grauniad on Saturdays - but it is frequently funny and this week quite outstanding, a treat for all those who despise the rise of governments full of people who have never done a hand's turn of real work in their entire lives.

Sadly, copyright doesn't let us reproduce it so I must recommend you truck over to the Graun itself.

Pretty good, eh ?

ND

Whither a new Airport in London?

How can a Government ignore needs for so long on such an important subject? Firstly we had the last Labour Government faff over UK Energy needs - which has resulted in the prospect of power cuts in the next few years.

Now the current Government has also decided not to fight some battles, firstly a replacement Trident has been postponed until the next Parliament. More worryingly is the dither over a new runway for the South East.

Air travel has become controversial, but one thing it is good for is jobs and business. Airports employments tens of thousands of people and the trade generated is enormous. Sadly, these also come with pollution in the form of noise and air pollution.

What is clear though is that there is a need for more capacity in the South East of England. Either Heathrow needs a new runway or somewhere else in the South needs to be developed. However, due to power of local campaigning no Government wants to face this challenge. Indeed, it is left of Boris Johnson as Mayor of London to try and promote a new airport?

However, despite the constant pressure, and Richard Branson is joining in today in asking more more capacity, there seems no prospect of success.

This is a bad failure for the UK that its politicians no longer have the strength to lead the Country to make long-term decisions on infrastructure. You can't worry about a market here, when planning is needed then it is under the Government control no matter what the private sector might want.

In the future though the UK is going to struggle unless as way of politicians to gain some leadership ability is found. No new airports, power stations or other key infrastructure will get built - anything controversial that takes longer than a Parliament is likely to be sidelined.

Does this type of development need to be removed from political process in the same way as we now have an OBR to stop politicians recklessly spending money like the last Labour Government?

Mansion tax - Kiling the goose.

Mr Cable is determined that someday, somehow, he will soak the rich. His preferred method is a 'mansion tax.' A tax on property that has a value of £2 million pounds or more.
{It was going to be one million pounds, and Vince even said as much, before someone reminded him that in his own constituency of Richmond on Thames, which has one of the highest property prices in England, a 4 bed, end of terrace is £950,000. Vince backpedaled and blustered enough to look foolish and to blow his 2009 conference. He has never really recovered.}

Cityunslicker made the point recently that Taxing 'wealth'{as opposed to income} only makes it disappear. He is correct. And history proves this.

The wealthy landowners and aristocracy of England had been rich for centuries. Super rich from the time of the industrial revolution which did as much for agricultural mechanisation as it did for industrial. The wealth was vast. Income tax had only been introduced in 1842 at 3p in the £, and virtually all thee working classes were exempt. The enourmous wealth created through land ownership, agriculture, textiles, finance, trade, shipbuilding and on to railways, mining and industrialisation once the industrial revolution kicked in had often been used to create magnificent, palatial, stately homes and mini palaces. Beautiful gardens and acres and acres of lands were available for the elite.

The almost forgotten agricultural slump of the 1870's and 1880's devastated the aristocracy of Britain. 7 out of 10 harvests were poor or very poor. They were unable to increase farm prices as would usually be the case due to the incredible production of the new American prairies that were now importing into Europe. Farm prices actually fell by more than half at a time when UK crop yields were very low. The landowners and tenant farmers faced ruin. This was the beginning of the huge population shift from country to towns. Agriculture wasn't making the money. There was no work. Villages shrank to population levels not seen since the plague.

At this difficult time for the gentry, William Vernon Harcourt, Gladstone's chancellor, introduced death duties.
The tax he introduced was a fairly modest 8% tax on estates over £1 million on the death of the owner. He refused, despite the concerns of all Tories and many Liberals, to consider any concessions to this tax. If two owners died in quick succession the £80k tax applied on a million to each.
This was £80,000 at a a time when a good head cook, in a stately home, might earn £40 a year.
Only about 5% of the country earned more than £1,00o a year.

It was a death blow to the landed classes. Their wealth drained from their estates and into the government. Land was sold. Estates divided up. The art, jewels, statues and heirlooms were sold off to pay the horrific costs of owning such an enourmous house and its upkeep in the first place, and to pay the taxman. On the wiki page of inheritance tax says - introduced in 1894 - effective in breaking up large estates. It certainly was.

The American wife, as in Downton Abbey became so commonplace amongst British Lords as almost to be a cliche. America had the wealth. Britain had the titles. British aristocracy rushed to America

Because the tax was so easy to collect, and everyone loves a tax that doesn't apply to them {57% of Londoners, where the mansion tax will hit hardest, are in favour of a mansion tax} the tax was raised continually. It reached 60% in 1939 from a government desperate to pay for the next war, before it had paid for the last one. In 1948 the tax was 75% on estates over £1 million.

Stately Homes were suddenly all but extinct. No one wanted them. They could no longer be afforded. They became so worthless that many were left to fall down or knocked down, or even burnt down. About 2,000 country real mansions disappeared between 1890 and 1950. The National Trust and English Heritage preserved about 200 homes and estates that now benefit us all, not just the super rich.

I'm not asking anyone to shed tears for the old aristocracy, anymore than I'm asking anyone to have a heart for the poor oligarch's finances. In 1870, 80% of the land was owned by just 7,000 families. Incredibly unfair.

I'm illustrating that 'wealth' isn't income.

There is a group in the UK who, as an average, receive 80% of their income from subsidy. They receive very generous tax exceptions not available to the general public. Fuel tax is paid at a greatly reduced rate. Other fuel duty exemptions also apply.
They receive payments for doing their job and other payments for not doing it. Their home is included as indistinguishable from their business, so all appliances, utilities, expenses, insurances, can be claimed as 100% expenses.

Farmers.

A farm can also obtain grants for woodland, wind farms, solar panels, make money from storage, leisure and other commercial activities besides farming.
A 500 acre farm will cost around £3 million in the UK. And, in most cases, it attracts a reduction of the usual 40% inheritance tax through the Agricultural Property Relief (“APR”). APR reduces the value of agricultural property charged to inheritance tax by 100%, making them exempt from the tax.

This is because most farms don't make much money. Some £25,000 declared PA. The value is in the farm itself. If inheritance tax was applied there wouldn't be any farms left within two generations.

To those who suggest that Mr Cable is only putting a 1% tax on the wealthiest of the wealthy, and only at £2 million quid, I refer to Mr Harcourt's 8% on a million. He taxed just 8% death duty on a property worth over 20,000 times the average wage.

Today, that tax is inheritance tax. Payable at 40% on property worth £325,000. {Just 12.5 times the average UK salary .}

The fabian society say only 8% of homes pay inheritance tax. - That's still 1 and 3/4 million homes. And they never , ever consider location. On Rightmove, in Rhyl, there are just 5 properties OVER £350,000. In Addlestone, Surrey, not somewhere you'd choose to live if you could afford somewhere better, there are 60. And Rhyl is 5 times larger than Addlestone.

Its a bad tax Vince. It is like inheritance in that it takes no account of income, so destroys accumulated wealth.. It will be destructive.
So forget it. Unless termination of the property class is your long term aim. Which, I suppose it may well be.

For the historians
The tale of William Vernon Harcourt.
Harcourt was from a centuries old, huge landowning, stately home living, Tory family. Aristocracy of the bluest blood. it was considered treason when he decided to join the liberals. When he introduced his tax many in parliament believed it was because he stood almost no chance of inheriting his family estates himself.
However In March 1904, the death of his heir-less nephew, meant he succeeded to become sole heir to the family fortune. He found that the estate was in deep financial crisis, especially after having to pay the death duties he himself had introduced, and he died six months later. His own heirs were one of the first families to pay the 'double whammy' tax that their father had introduced.
His son Lewis married an American, Mary Ethel Burns, niece of J.P.Morgan the financier-banker.
He gave her £52,000 to renovate Nuneham Park, to save it becoming a ruin.

A story of almost perfect irony.

'Forcing Down the Price of Oil': Good Luck With That

So Obama and Cameron, this pair of Cnuts, intend to bring down the price of oil ? I recall Gordon Brown of evil memory scuttling to Saudi Arabia in 2008 with the same objective last time around. If he claimed the credit for lowering it from $147 to $30 well, no-one gave him any. Markets, dear boy, markets.

Of course the Big Boys have Big Levers to hand, and the Americans are not averse to using them. And hey, it's Election year ! Let them recall how futile was their last essay in flooding the market with strategic oil stocks, however. The effect lasted about a month: and the (Brent*) oil price has still never been below the $100 it reached 14 months ago.

Gasoline at the pumps may be slightly different, particularly in the UK, because there is so much tax in the final price, which can of course be reduced if so determined. But there is far less tax in the US price, and hence far less scope. The American 'driving season' will soon be in sight and as we know from 2008, if retail gasoline is in excess of $4/gallon, the driving season is spontaneously cancelled and everyone feels heartily pissed off. In Election year !

So we wait with interest to see what intervention they have in mind. Don't be surprised if we see another May Massacre - the concerted attempt to flatten the prices of commodities and precious metals at the beginning of May last year. It was dramatic, it had an impact. But not for long. There are many months before that Election and only GlobalRecession2 will bring down the price of oil fundamentally. The market is bigger than the politician - even the POTUS.

For which we may be grateful.

ND

PS: suggestion to POTUS - if you don't like today's price of oil, you'll just hate what happens if you mallet Iran ... jus' saying ...

* WTI has been below $100 but that is a quirk of the delivery system at Cushing and has nothing to do with world oil prices