The New Era
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A Bitter Pill
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A Bitter Pill

Inflation: it's all our fault apparently
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A Bitter Pill

It’s risky these days getting a big job in government or the establishment. By definition, anyone who is able to jump through the various hoops required by the selection panels have to be time-served sycophants.  The origins of the word - sycophant - are debated by etymologists. According to one etymology site, the first use of the word sycophant in the English language implied that people displaying the characteristics of one are mean, servile flatterers.  

Huw Pill

But they’ve always been around. Think of Tom’s character in Succession - he hangs around Logan Roy, flattering his way to the upper echelons of the pecking order. But the lot of the sycophant is a precarious one. Over time the flattery level needs to be ramped-up. The longevity of the sycophant in any senior role is limited.   Over time the obsequiousness becomes unbearable for everybody and the sycophant is toppled. (Or not…it worked for Tom).

Which brings me to the Chief Economist at the Bank of England. The current incumbent assumed the role of Chief Economist in late 2021 - as the money printing presses funding the government’s economic shock and awe strategy - were at full tilt. The government required a vast increase in money supply and public debt to fund the most outrageous squandering of public money we’ve seen in peace-time. From furlough payments, to Sunak’s subsidised dinner scheme to the devolved regions just, literally, giving away money, the Bank of England was expected to fund this economic vandalism. Not to mention that track and trace fiasco and the vaccines that don’t actually work. So they created money out of nothing, sustained by the international central bank Ponsi scheme of near-zero interest rates.  

The consequence, of course, was rampant inflation. And as central-bank induced inflation can only really be corrected by interest rates, the cost of servicing debt has resulted in a horrific double-whammy on the population. 

The role of the establishment sycophants in this type of situation is to ensure that no blame is levelled at the powers that be: the people who gave the nod for the vast expansion in money supply and the devaluation of the money in our bank accounts. That would be the government, the Bank of England - and especially the Chancellor who oversaw the economic destruction, Rishi Sunak, now the Prime Minister.  

Huw Pill, Chief Economist of the Bank of England, has apparently come up with a cunning plan to please his masters. He’s blaming us. And the Russians. In a podcast released on Tuesday he delivered the bitter pill that the inflationary shocks were the fault of “the pandemic” (not, note, the government’s crazy policies introduced because of the flu).  Oh and the Russians invading Ukraine (even though energy prices were on the rise before the invasion, and energy companies have made monster profits on the back of the price rises).  

His advice is that we need to suck it all up, shut up about wage increases and face the fact that we’re all going to be poorer - but not, at all, because of the Bank of England’s creation of the inflationary spiral in the first place, or the government’s unashamed incompetence.

Here’s how he put it:  

“So somehow in the U.K., someone needs to accept that they’re worse off and stop trying to maintain their real spending power by bidding up prices, whether higher wages or passing energy costs through on to customers, etcetera.”

So the bitter pill we need to swallow - according to the Bank of England’s Chief Sycophant - is to stop being inflationary. It’s all our fault. Huw knows you know. 

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The New Era
TNE Podcast
Jeffrey Peel and others from The New Era team meet with leading lights from business, politics, economics and academia.