Market Thinking

making sense of the narrative

A very British Coup

The marvellous British word ‘defenestration’ is seemingly only ever used when a politician is metaphorically thrown out of the proverbial window and as such will doubtless be all over the UK press in the next few days as Chancellor Kwasi Kwarteng loses his job and the administration of Liz Truss hangs by the proverbial thread. Already arch Remainer Jeremy Hunt has been appointed in his place and will doubtless be working assiduously to unpick any policy that might offer the UK any competitive advantage over the EU.

To pick up on the title of Chris Mullin’s political thriller, this has been a very British Coup, engineered by the Remain establishment that has, until now, been frustrated by a brief flurry of democracy (the Brexit referendum) and the rules of the Conservative Party that elected first Boris Johnson and now Liz Truss. One down, one to go. Then presumably on to rejoin Europe.

As we have stated on numerous occasions recently, this was not the will of the markets, they were simply used as a wedge to opportunistically lever out a key member of the Truss government and stop their policies in their tracks. This is a political coup, not an economic one. Singapore on Thames was long touted by Brexiteers as a way of capitalising on the UK’s freedom of movement outside the EU and, understandably terrified the EU and their supporters. Reversing the Rishi Sunak plans to raise corporate taxes and hikes on labour costs in the direction of the high and economically damaging ‘social costs’ in Europe would obviously have given the UK ‘unfair’ advantage. As such, what was a sensible decision not to implement damaging increases in taxes at the same time as the Bank of England was imposing damaging increases in interest rates and the energy companies crippling increases in fuel bills, (see dealing with the triple threats) was instead presented by the Remainers as ‘unfunded tax cuts‘. Naturally the government’s official opposition (as opposed to the opposition in their own party) ignored the cut in the basic rate and instead drowned it out in the howls of protest over the cut in the top rate of tax from 45 to 40p, a political landmine left spitefully by Gordon Brown in his last days as PM, that no Conservative government had dared to touch until now. Trying to deal with he land mine was probably political hubris, even if it ‘cost’ around the same as a week’s worth of (totally unfunded) spending on test and trace, it was a gift to the Labour Party. Sadly, in the wake of the U turn on the top rate and the defenestration (that word again) of the Chancellor, we wouldn’t hold out much hope for the rest of the tax package either.

Most likely then it will be back to the status quo ante, with the UK effectively shadowing everything the EU does, as if it had never left and certainly not being allowed to ‘compete’ with the sclerotic EU. Policy initiatives will likely be presented as ‘internationally co-operative’ and if possible brought in under the auspices of unelected Globalist bodies like the UN, or the WHO. Indeed, that is exactly what has been happening for a decade or more, the key decisions and the key policies are made ‘at a higher level’ than mere elected governments.

As previously discussed, the initial media froth about how ‘bad’ this government was focussed a little too much on a previously obscure character called Tom Scholar, whom Kwazi Kwarteng evicted on day one. A close political confidant and former employee of Gordon Brown, he was brought in to head the UK Treasury in the wake of (Bilderberger Globalist) Chancellor George Osborne resigning over Brexit, thus ensuring that the following two Conservative Chancellors did not stray from the preferred script of big tax and even bigger spending. It will be interesting if he is ‘brought back’ to drive continuity Brown policies once more. Certainly new Chancellor Jeremy Hunt is likely to return immediately to centre left Social Democrat tax and spend – like every Chancellor since 1997 – except Kwasi.

Recognise that the three most important policies in the UK in the last decade, on Interest rates, Covid and Energy were set by the Fed, the WHO and the UN IPCC.

Zero Interest Rates, Zero Covid, Zero Carbon. Zero Democracy, Zero Influence, Zero Accountability

Equally, investors should note that the three disastrous Zero policies – of Zero Interest Rates, Zero Covid and Zero Carbon – that got us into this mess in the first place – are in fact all imposed in this manner. Interest rates are set by the Fed, Covid policy by the WHO and energy policy by the IPCC at the UN. The ‘coup’ has ensured that it will all stay that way. As with Brexit, they thought they had a New Dawn, but The Empire Struck Back.

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One Reply to “A very British Coup”

  • I fear your assessment is spot on.

    The media misrepresentation of the current pensions liquidity issue is just one further aspect of all this.

    I guess too that Zero Dialogue with Russia (another externally created policy, albeit one that has been enthusiastically adopted) is not exactly helping either.

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