Friday 15 July 2022

German economy harmed by ... pensioners?

So the story is:  the Greek tourism industry is suggesting German pensioners winter in Greece, to save on fuel bills (and indeed bills for food and almost everything else).  Fair enough - it has more logic than the blarney the Irish tourist board feeds to Americans ("we know you all like to think you have Irish roots, so you all need to come 'home' at least twice a year wearing a clip-on ginger beard and a silly green hat" etc etc, cue twiddledy-dee music).  And of course the association of German travel agents agrees, and suggests a government subsidy for the travel. 

But ... 

Opposition politicians have said the idea has to be treated with caution, not least because it could have a negative effect on Germany’s economy.

Wow.  If that's what they think is going to harm the German economy, they have a very big surprise coming.  

Is any politician, anywhere in the West, levelling with voters on how bad it's going to be?  Don't they need to, in order to get the public best-positioned for whatever can be done by individuals, or inevitably will have to be done by government?  Or is everyone relying on the local equivalent of Martin Lewis, in the hope he's best placed to break the bad news?

ND

33 comments:

Benefits Advisor said...

How bad is it going to be? It's already here but it is different from all the other downturns I've seen.

Winners are going to be the young, especially the DINKY's as their wages are going to go up. Incredible competition for staff of all sorts and trades who can command a premium.

Work really will pay.

Losers: As well as the usual disabled, and those with more than 2 kids*, pensioners on fixed income as squealing at the moment. They are being hit by poor returns on their savings; high food and energy costs; and if they are in their own homes leasehold charges (Grenfell) and Council Tax.

Now the poor won't vote Conservative but those pensioners. Boris will be laughing at the s**t that someone else will have to clear up.


* If you have more than 2 kids which is a sort of social duty given the demographics, you get hammered almost as much as the pensioners. Other short-term and ill judged policy but JRM clearly can afford it.

** If you are a pensioner go with your instincts and move south for the winter.


Don Cox said...

Global warming means that the South is moving here.

Don

Anonymous said...

@ Global warming means that the South is moving here.

Well Greece sounds like a happy medium. Meet you halfway!

Anonymous said...

There's a well known Twitter troll that is based in Bulgaria.
10% flat tax rate across the board, and a government so incompetent/corrupt that they stay out the way and don't interfere with whatever the proles get up to.
If only we had a government that didn't do anything. We would be far better off.

Matt said...

@ Anonymous

It's not so much the government (as most would understand it) but the apparatus of state that we need to get under control. Even if parliament did nothing the civil service, NHS, police, local councils etc would all conspire to fuck us more.

Caeser Hēméra said...

I doubt the politicians have a clue how bad it could be, the last few decades have been a sweet spot for many of us, especially the politicians, and the blinkers are on.

Just look at the proliferation of coffee shops, hipster bars and places to eat. When I first went out, pre piss up food was either pie and chips from the chippy or a deep-fried turkey stick from the ropey Chinese, followed by sinking several pints of Stella. Now, it's bao buns, tacos or Indian street food with a turmeric latte, followed by many microbrewery stouts, sours and IPAs.

How that will pan out over the next few years will be interesting as a lot of those are what are keeping centres alive - Manchester has been busy selling its soul to developers for a long time now, if the food and drink spots go pop en masse it'll be grim as people exit to cheaper places.

Liverpool, Leeds and Sheffield have been doing similar.

dearieme said...

"pie and chips": you poor dear. In my undergraduate days it was curried spaghetti on rice with chips. And then proper grown-up beer.

DJK said...

"Is any politician, anywhere in the West, levelling with voters on how bad it's going to be?" Well no, and the silence from all the candidates is one of the thinks that makes the current leadership contest so unreal. They all seem stuck in a past when there was a magic money tree that could be used to fund tax cuts, the only decision to be made being which ones and just how big.

Don Cox said...

There was a magic money tree, but the crop was all used for getting through the Covid pandemic, and there won't be any more until the resulting inflation dies down.

Things are going to be difficult, but I think probably not so difficult as in 1945-51.

Don

Anonymous said...

So how bad will it be? Are we looking at food shortages? (Not as in “gosh I can’t find everything I need for this fruit salad”, but as in “I’m only able to eat once a day because you can’t get pasta or rice for love or money”)

Anonymous said...

"Magic Money Tree" is debt and loads of it. Corporate debt where PE load up companies with loans to be paid out of future earnings. Personal debt to be paid out of future income. Government debt to be paid out of future taxation. No need for hard work just load it onto the next generation of directors, consumers and taxpayers.

It will all keep spinning until --- it doesn't. Hope you're hedged.

Don Cox said...

I would say that debt is paid off by inflation. For instance, it eventually became trivial for the state to pay off Consols. There was still the same debt, numerically, but its value had become very low.

Don

E-K said...

So is Putin going to hand us back our arses ?

Elby the Beserk said...

Don Cox said...
I would say that debt is paid off by inflation. For instance, it eventually became trivial for the state to pay off Consols. There was still the same debt, numerically, but its value had become very low.

Don

6:55 pm
============================================

So how long, do you reckon, will it take for inflation to "pay off" the UK National Debt by inflation?

April 22

https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicspending/bulletins/ukgovernmentdebtanddeficitforeurostatmaast/december2021

"UK general government gross debt was £2,382.8 billion at the end of 2021, equivalent to 102.8% of gross domestic product (GDP); this was 34.5 percentage points lower than the average debt of the G7 member states."

Remembering that this does NOT include PFI, or the ever rising debt incurred by spiralling public sector pensions (shall we call conservatively, around £3 trillion?).

Over to you.



Elby the Beserk said...

Anonymous said...
There's a well known Twitter troll that is based in Bulgaria.
10% flat tax rate across the board, and a government so incompetent/corrupt that they stay out the way and don't interfere with whatever the proles get up to.
If only we had a government that didn't do anything. We would be far better off.

10:23 am
============================================================

That's our old mate Old Holborn, notorious prankster and Gold Medal Scouse baiter :-) (a time honoured profession, all the better as it is SO easy to do) - but yes, I'd go for that. I'm in Budapest for a couple of weeks, and rather liking it here, and their govt's old school adoption of old school Christian attitudes, such as financially supporting families. And flipping the finger at the EU. Perfectly good Cab for under £2.50, and a belter for £8 the other day. Most in the UK under £10 only fit for cleaning engines.

BTW, his lovely wife is a very fine artist, and runs Summer Schools.

https://www.rhodopeart.com/en/

dearieme said...

I thought the traditional place to send German pensioners was South America.

Don Cox said...

"So how long, do you reckon, will it take for inflation to "pay off" the UK National Debt by inflation?"

A couple of hundred years ? It's impossible to predict the economy more than five minutes ahead, really. And the problem is not paying off the debt but servicing it.

Will we get through the next century without a major nuclear war ?

Don

E-K said...

Peter Hitchens says more or less wot I said six months ago (appeasement the key word here):

The visit by President Biden to Saudi Arabia utterly destroys months of Western propaganda against Russia. We have been invited to think that our hostility towards President Putin was based on our lofty moral disapproval of his regime, its murders of the Kremlin’s enemies, its repressive character and its aggression abroad.

But the Saudi ruler, Crown Prince Mohammed bin Salman Al Saud (MBS), was found to have approved the grisly murder and dismemberment, using bone saws, of dissident Jamal Khashoggi.

His country is a blood-splattered despotism that recently (just before a visit by our Mr Johnson) executed 81 people. Saudi Arabia – I put this mildly – does not have independent juries, free media or an opposition. It is a political slum. And it has launched a horrible aggression in Yemen, in which Western nations have helped to arm, train and equip its forces.

Mr Biden used to say he wanted to turn Saudi Arabia into a pariah. But now, in an embarrassing paradox, his pseudo-moral posturing over Russia has forced him to toady to the Saudis. He needs them to sell more oil because we won’t buy it from Russia.

This is how it goes. There are no real principles in such things. During the Second World War, the US was far friendlier to the Kremlin than it needed to be, blatantly sucking up to Stalin, while snubbing Churchill. It even put up for years with Stalin’s refusal to join the war against Imperial Japan. So you may be sure that Washington’s policy in Ukraine is nothing to do with democracy, freedom or anything like that. And worries must be growing in the White House and the Pentagon about the war. It is not going very well.

Moscow’s control over gas and oil is hurting many European countries. So is its blockade of Ukraine’s wheat exports. Serious rationing of heat and power are on the cards. The West’s military machine turns out not to be as good as it thought. Russia, with its enormous Cold War reserves of shells, may even be able to outgun us, as we have closed many of our arms factories. Nato nations daren’t get directly involved as this could widen the war and even lead to a nuclear exchange.

If Mr Biden can meet the grisly MBS now (even if he tries hard not to seem too friendly), then don’t rule out the possibility of him meeting Putin too, in time. And then all the bombast about evil regimes, appeasement and the rest will be set on one side.

BlokeInBrum said...

"Will we get through the next century without a major nuclear war ?"

One of the many problems we face. But a relatively known problem, with few actors willing to cross the Rubicon, and risk the (figurative & literal) fallout therefrom.

What worries me is a Government run by a senile puppet, controlled by shadowy groups with vast resources at their disposal. Especially one with a large network of Bio-Warfare laboratories ,none of which have any oversight.

Some of these organisations may even be run by people so arrogant they believe they can stealthily target countries that refuse to kow-tow to them, without leaving behind any fingerprints.

https://www.pnas.org/doi/10.1073/pnas.2202769119

That's what scares me.

Anonymous said...

Haven't many of the major FTSE companies been preparing for the downturn by effectively shrinking by taking part in share buy-backs instead of investing the cash building up?

Anonymous said...

Downturns can have different complexions. Compare the "winter of discontent" with the 2008 crash. Much different but this one seems similar to the "winter" one. Perhaps E-K can educate us on how the state deals with malcontents that are the wrong side of the Daily Mail / Express.

As well as the energy shock there is the simple statistic that this year 900k will reach state retirement age while 700k will leave school, half of which will go to tertiary education. How do you grow an economy with a shrinking workforce? How do you pay for social care if the tax base is shrinking.

You'd be as well flying off to Greece as the present bunch of potential replacements are sadly lacking in answers. Or sit at home, see who becomes PM and worry about Armageddon.

If we are all going up in a flash (HatTip: E-K), or being poisoned in our beds (HatTip: BiB) I'd rather be on a sunny beach.



Anonymous said...

Ukrainian arms plane crashes in Greece. Wonder if we'll ever find the story.

https://www.theguardian.com/world/2022/jul/16/aircraft-carrying-dangerous-cargo-crashes-in-northern-greece

“We were hearing explosions until a few minutes ago,” Filippos Anastassiadis, mayor of the municipality of Paggaio, said a little over an hour after the accident. “I am about 300 metres from the site of the crash.” ERT reported that it was a Ukrainian aircraft, which according to villagers was already in flames before it crashed. The aircraft was still burning, according to live footage broadcast on state television. One firefighter told reporters at the scene: “You need to go away for your safety. There is an information that the aircraft was carrying ammunition.”

Flying Serbia to Jordan? I assume this is some kind of quid-pro-quo and the arms were destined for "moderate rebels" in Syria.

Nick Drew said...

When nations are desperate, all manner of strange things happen

Anonymous said...

I told you he was a wrong-'un. Phisiognomy is real, and the CCO policy of only selecting candidates with skeletons is real

https://www.theguardian.com/uk-news/2022/jul/17/zahawi-urged-to-explain-source-of-26m-mystery-loans

While the co-founder of YouGov Stephan Shakespeare was awarded 351,590 shares in the year the firm was founded, Zahawi was given none. Instead, shares were allocated to the offshore firm Balshore Investments, based in Gibraltar, controlled by his parents. It has been reported that Zahawi relied heavily on the support and guidance of his father who was an experienced businessman. The small firm in Gibraltar turned out be a corporate goldmine, as YouGov shares rose dramatically in value. In 2002, the firm had assets of just £36,280, but this rose to £7m by 2010 and £26.5m by 2017, according to its company accounts. It also received more than £700,000 in dividends between 2012 and 2017. The key assets were the shares in YouGov, but these were sold in 2017-18 and about £26m was transferred out of the company to an unknown recipient or recipients. YouGov has described Balshore Investment as “a family trust of Nadhim Zahawi”. The chancellor has insisted “he does not have, and never has had, an interest in Balshore Investments and he is not a beneficiary.”

Anonymous said...

It has to be said that Britain (and the Tory Party) really have hit rock bottom when the leadership candidates are tax dodgers, mad (Truss), people who can't do their most important job (Mordaunt), or very inexperienced.

Andrea Leadsom, where are you?

Don Cox said...

This article on Rumania is worth reading.

https://english.aawsat.com/home/article/3762396/robert-d-kaplan/romania-fears-putin-putin-should-fear-romania-too

Don Cox

Anonymous said...

DC - we are going to have to learn all over again about places like Sub-Carpathian Ruthenia, which were once well known to educated Brits. The Iron Curtain rendered problems in the "Bloodlands" moot for 50-odd years, then we had to learn all over again when Yugoslavia broke up.

However I think I can safely predict Robert D Kaplan's views on Russia's threat to Romania - "imminent and real if Odessa goes - action this day!". I can predict this because

a) Wiki "From 2008 to 2012, Kaplan was a Senior Fellow at the Center for a New American Security in Washington, DC; he rejoined the organization in 2015.[2] Between 2012 and 2014, he was chief geopolitical analyst at Stratfor, a private global forecasting firm. In 2009, Secretary of Defense Robert Gates appointed Kaplan to the Defense Policy Board, a federal advisory committee to the United States Department of Defense. "

b) Mr Kaplan's great-great-great grandfather's shop in Odessa was smashed up by drunken Cossacks in 1881, and "if you wrong us, shall we not revenge?". See Victoria Nuland, Robert and Kimberley Kagan, Tony Blinken, Wendy Sherman etc etc etc

Don Cox said...

And now that you've read the article, does it say what you predict it will say ?

Don Cox

Anonymous said...

"does it say what you predict it will say?"

No, because the article I very briefly outlined at least had some kind of narrative cohesion. He disappointed me with "hopefully Putin will be marched down a corridor and then shot just like Caecescu".

But I did learn that Moldova is what was once called Bessarabia, so it wasn't a total loss of time.

Anonymous said...

PS - this is more useful and less biased, a quick guide to the area and its history

https://www.britannica.com/topic/Rusyn-people

Rusyn, Rusyn ruskyi, also called Ruthenian, Carpatho-Rusyn, Lemko, or Rusnak, any of several East Slavic peoples (modern-day Belarusians, Ukrainians, and Carpatho-Rusyns) and their languages. The name Rusyn is derived from Rus (Ruthenia), the name of the territory that they inhabited. The name Ruthenian derives from the Latin Ruthenus (singular), a term found in medieval sources to describe the Slavic inhabitants of Eastern Christian religion (Orthodox and Greek Catholics) living in the grand duchy of Lithuania and, after 1569, in the Polish-Lithuanian Commonwealth. Rusyn-inhabited territories in those states had from the 10th to the 14th century belonged to several principalities referred to collectively as Kievan Rus. The Latin term Ruthenus (plural Rutheni) is the equivalent of the Slavic Rusyn (plural Rusyny), meaning “an inhabitant of the land of Rus.”

Anonymous said...

ND - energy man - comments? I've assumed carbon credits were a scam ever since finding out how many Welsh upland farms were being bought by private equity groups.

https://www.theguardian.com/environment/2022/jul/18/academics-discrediting-australias-carbon-credit-system-serious-people-says-former-chief-scientist

"Macintosh and his colleagues said graphs released by the regulator and committee to make this case showed forest cover in carbon credit project areas started to increase in about 2010 – about the time the “millennium drought” broke – and before work on the carbon projects began. The academics said it showed rainfall was the primary driver of forest growth and therefore the carbon storage would have happened anyway – it was not “additional”, as required – and should not have been rewarded with public money from the Coalition’s $4.5bn emissions reduction fund."

Anonymous said...

On a related topic, electricity prices are terrible news for cooker manufacturers (domestic) and great news for air fryer manufacturers (Chinese). Why do a quiche in a 7kw oven if you can do it in a 1.5kw Ninja?

Don Cox said...

I've been using halogen cookers for several years. Only 1.4 Kw and they work well once you have some experience (the suggested cooking times are way out).

A gas hob is still useful.

Don