Since inflation is a monetary question and nothing but a monetary question, it cannot be understood without first knowing what money is. To most people money is the notes and coins they use to buy things, a convenient technical device for ensuring the smooth exchange and distribution of goods. While it is indeed such a medium of exchange, the currency we use today is not, strictly speaking, money at all, but only tokens for it. But to explain money it is convenient to start with this role of medium of exchange…

https://socialiststandardmyspace.blogspot.com/2019/04/the-evolution-of-money-from-barter-to.html

https://socialiststandardmyspace.blogspot.com/2019/04/the-evolution-of-money-from-barter-to_22.html

 Food prices in France and Spain are continuing their relentless rise, as the worst cost-of-living crisis in a generation rages across the EU, according to data published by Bloomberg on Monday.

The cost of the main groceries needed to cook the French dish coq-au-vin soared 15.4% in March to more than €19 ($21) compared to the same period a year ago, according to data from the national statistics office and the Ministry of Agriculture and Nutrition.

France is the top consumer of poultry in the EU. The cost of chicken, the main ingredient in the traditional dish, surged by about 18%, carrots by 33.5%, butter gained 23.9% and even wine, which saw the slowest price increase, soared by 8.4% on an annual basis.

The cost-of-living crisis has deepened in France. According to a recent report by statistics agency INSEE, inflation in the Eurozone’s second-largest economy has continued at a record pace, and faster than expected in February, largely due to surging food prices. Food, services, and manufactured goods have been the main contributors to inflation.

French authorities previously introduced a so-called “anti-inflation food basket” comprising about 50 basic items, and have obliged large retailers not to hike prices on these essentials.

Meanwhile, the prices of the key ingredients used in the Spanish dish paella have also surged, Bloomberg’s monthly Paella Index, based on data provided by Spain’s National Statistics Institute showed. Cooking the Spanish signature dish is now 18.5% more expensive than a year ago. The price of olive oil has jumped 32.1%, while vegetables and legume prices are up 27.8% on the year, and 5.7% on a monthly basis. Rice prices have risen 22.1% from a year ago.

The Spanish Agrarian Association of Young Farmers is warning of further price hikes due to likely olive oil shortages following last year’s drought, as yields are already significantly down in Spain, the world’s largest olive oil producer.

Rice prices may also increase due to a 40% year-on-year decline in production in 2022, the worst on record according to the Rice Federation of the Isla Mayor municipality, Spain’s leading producer of the crop.

RT 20/4/23

DC

 Howard Moss’ talk,  ‘Work: Paid and Unpaid,’ will look at the nature of the work that the speaker and others close to him have engaged in over the years and draw conclusions about the experience in the context of the system we live under. He will then reflect on some of the implications for the possible nature of work in a future socialist society.

 Nearly seven in 10 Americans hold negative views about the US economy and two-thirds say inflation is outpacing their wages, according to a stunning survey published Tuesday.

A total of 69% say they are downbeat about the country’s financial shape now and in the future, the highest percentage in the 17-year history of the CNBC All-America Economic Survey.

For context, pessimism about the current and future economy stood at 37% in April 2021 and rose to 68% in July 2022, roughly tracking with a spike in annual inflation from 4.2% in April 2021 to a four-decade high of 9.1% in June 2022.

US public debt will continue to rise in the coming years amid increased government borrowing, the International Monetary Fund said in its Fiscal Monitor report released on Wednesday.

IMF economists believe the rise will come partly because Washington is spending more on healthcare and social security, as well as clean energy projects and other domestic economic policies.

The US debt-to-GDP ratio is projected to be 122.2% this year, just slightly above 121.7% in 2022. It is expected to rise further to 136.2% of GDP in 2028, up from 107.4% in 2018, and higher than the Covid pandemic-era peak of 133.5% in 2020, according to the IMF.

The agency noted that the US and China are the two main drivers of the global increase in public debt. It cautioned that expanding government borrowing and spending could exacerbate inflationary pressures, undermining the efforts of the central banks.

“By the end of our projection horizon – 2028 – public debt in the world is expected to reach almost 100% of GDP,” the head of the IMF’s Fiscal Affairs Department, Vitor Gaspar, told the Financial Times, adding that this is “back to the record levels set in the year of the pandemic.”

The IMF also said that recent banking problems in the US and Switzerland have added to the risks of a global financial crisis, which could put even more pressure on public sector balance sheets.

RT 14/4/23

DC

https://www.usdebtclock.org/

 Real estate experts expect a further decline in new residential construction in Germany as building permits for dwellings slumped 20.6% year-on-year in February, the Federal Statistical Office (Destatis) reported on Tuesday.

According to the latest numbers, a total of 22,300 building permits for dwellings were issued in February, representing a decrease of 5,800 permits compared to the same period last year. The number of construction permits has been steadily declining since last May and has fallen by 10% each month from October 2022, Destatis said.

In its spring report, the German Property Federation (ZIA) said that housing shortages are likely to have reached their highest level in 20 years and that the gap between supply and demand may widen to 700,000 buildings by 2025.

Industry experts blame the aftermath of the pandemic, coupled with material shortages and surging energy and building materials prices for the unfolding crisis. According to ZIA’s president, Andreas Mattner, the country is already experiencing a dire lack of housing and that a “very bad awakening” is on the horizon for Europe’s largest economy.

Another survey by the German Economic Institute (IW) said that more than half of German construction companies expected a decline in output this year while only 15% believe business will expand.

The building industry had warned last year of a dramatic decline in residential construction. In 2022, about 280,000 apartments were completed, while it is expected that about 245,000 will be finished this year.

The president of the Federation of the German Construction Industry (HDB), Peter Huebner, confirmed that high materials prices and soaring mortgage rates are making residential construction increasingly difficult.

In January, German Housing Minister Klara Geywitz admitted that the government’s building target of 400,000 apartments per year would be missed in 2023.

According to ZIA estimates, 1.4 million people will be looking for a place to live in 2024 and will not be able to find one “if we don’t turn things around immediately.”

RT 19/4/23

DC

 Inflation in the UK came in at over 10% year-on-year in March, the highest rate among countries in Western Europe, official data showed on Wednesday.

According to the Office for National Statistics (ONS), the consumer price index (CPI) in the UK fell by less than expected to 10.1% in March, whereas economists had predicted a drop to 9.8%. The February reading stood at 10.4% year-on-year.

“The largest upward contributions to the annual CPIH inflation rate in March 2023 came from housing and household services (principally from electricity, gas and other fuels), and food and non-alcoholic beverages,” the ONS said.

Food prices rose at their fastest rate in 45 years, with the sharpest increases in March reported in goods such as olive oil (up 49%) and milk (up 38%).

Britain is now the only country in Western Europe to report double-digit inflation. Austria is next at 9.2%, followed by Italy at 8.2%, according to data compiled by Reuters. The lowest CPI among the 14 countries in Western Europe was recorded in Spain (3.1%).

 in the UK came in at over 10% year-on-year in March, the highest rate among countries in Western Europe, official data showed on Wednesday.

According to the Office for National Statistics (ONS), the consumer price index (CPI) in the UK fell by less than expected to 10.1% in March, whereas economists had predicted a drop to 9.8%. The February reading stood at 10.4% year-on-year.

“The largest upward contributions to the annual CPIH inflation rate in March 2023 came from housing and household services (principally from electricity, gas and other fuels), and food and non-alcoholic beverages,” the ONS said.

Food prices rose at their fastest rate in 45 years, with the sharpest increases in March reported in goods such as olive oil (up 49%) and milk (up 38%).

Britain is now the only country in Western Europe to report double-digit inflation. Austria is next at 9.2%, followed by Italy at 8.2%, according to data compiled by Reuters. The lowest CPI among the 14 countries in Western Europe was recorded in Spain (3.1%).

Rt 19/4/23

THE cost of some everyday groceries has more than doubled in the past year.

As prices continue to soar at their fastest rate in 45 years, the Office for National Statistics has revealed that food and drink price inflation surged in March, rising by 19.2 per cent.

The price of bread and cereals increased by the fastest on record.

https://www.thesun.co.uk/money/22095460/basket-essentials-every-supermarket-cheapest-expensive/

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  One of the talks at this year’s  Summer School will be given by Paddy Shannon.  He will entertain and enlighten us on ‘AI and the Future of Work’.    Much as we hate capitalist employment, our lives depend on finding it. So what are we to make of the impending Artificial Intelligence revolution which, combined with robotics, threatens to destroy up to 30% of all jobs by the mid-2030s? 90% of the world’s most successful companies are already investing in AI, so is the future for workers going to be rosy, with high pay and abundant leisure time, a hellish Dickensian nightmare, or the much-vaunted Singularity beyond which capitalism as we know it may not even exist?

 A major financial crash will likely hit by mid-June, Harry Dent, economist and author of several best-selling books, told the David Lin report, last week. Dent, who has a history of making controversial predictions, believes that the current market bubble will burst and result in a financial meltdown. 

The bubble is a result of the US Federal Reserve’s loose monetary policy, which has artificially inflated the stock market, according to Dent. He expects the S&P 500 to collapse by 86% “in this crash” and the Nasdaq to plummet by 92%.



The crypto market will go into a tailspin alongside stocks, the economist warned, predicting that Bitcoin will tumble 95-96% from its November 2021 high.



“Bitcoin will fall from $69,000 to about three to four thousand,” he said, adding that “It’s exactly what Amazon and the dot-coms did.”



Dent points to what he sees as overlapping crises as the reason for his pessimism. The pandemic shattered the global economy in many ways, leading to job losses and reducing consumer spending. Additionally, unprecedented inflation in most wealthy countries and supply-chain disruptions have sparked serious concerns among investors and economists, forcing them to realise that “this is not a big correction — it is a major crash, one that you have not seen … in your lifetime, and the one that even the millennials will not see a bigger crash than this,” Dent added.

According to the economist, despite efforts by central banks and their “declared war on recession” “we keep falling back into the recession” because the economy underneath is “really weak and really needs to get rid of a lot of really bad debt and zombie companies and the central banks won’t let the economy do its thing.” 



Dent cautioned about a third wave of the crisis coming, emphasising that in his view “it’s going to creep up” on the Federal Reserve “before they can reverse the tightening.” 



“We have not cleaned up the massive debts and overvaluations of the biggest financial assets bubble in everything. We have never had a financial asset bubble in everything like this. This bubble has not been allowed to burst and clear out its excesses which we need to do. And I think we are into that process now,” Dent concluded.



The economist expects “a crash more like 1929 to 1932” referring to the Great Depression, stressing that this is his “best forecast at this time.”

RT 12/4/23

DC

Reading Capital as Crisis Theory

http://socialiststandardmyspace.blogspot.com/2022/01/reading-capital-as-crisis-theory-part-1.html

http://socialiststandardmyspace.blogspot.com/2022/02/reading-capital-as-crisis-theory-part-2.html

 “Taxpayers fund radical anti-election lobby group” read the shock horror headline in the Times (12 April). It was an article by two journalists about the Sortition Foundation that campaigns (as you might have guessed if you were familiar with the meaning of the word “sortition”) for political decisions to be made by people chosen by lot rather than by elections. This is something that is accepted by governments for at least advising them on some matters. Such “citizens’ assemblies” are chosen by lot in the same sort of way that juries are in court cases. It was also practised in Ancient Athens. As such, it has as much democratic legitimacy as elections, despite what the article suggests. 

The Sortition Foundation wants MPs to be chosen in this way. Which would of course eliminate the professional politician. A book by one of the Foundation’s founders, Brett Hennig, is called The End of Politicians. Naturally this wouldn’t be welcomed by the politicians. The journalists pointed out to one of the stupidest MPs, failed Tory leader Sir Ian Duncan Smith, that the foundation had been paid by the government to organise some citizens’ assemblies and got him to protest:

“How could they award contracts and award contracts and pay money over to such an organisation that wants to get rid of politicians.”

Getting rid of politicians might be considered a good idea by many. Being a career politician is a particular unsavoury profession — trading on problems people face and making a career out of making pie-crust promises to solve them. However, getting rid of them won’t solve those problems.

The Sortition Foundation argues that getting rid of politicians would make for better decision-making. “By removing elections,” one of its researchers is quoted as writing, “we remove the need for our representatives to court those with wealth and resources”. It wouldn’t, however, remove those with wealth and resources or their need to court political decision-makers.

The Foundation is assuming that in present-day society there is a common interest that a national citizens’ assembly — a “House of Citizens” — would be better able to identify. But, under capitalism, there is no common social interest. Capitalism is a society divided into two basic classes — those who own the places where the wealth of society is produced and the rest who can only get a living by selling their ability to work for a wage or salary— with antagonistic and irreconcilable interests. In addition, different sections of the owning class have different and conflicting interests. MPs chosen by lot would still be subject to lobbying and influence by these sections and would not be able to overcome the antagonism of interests between the owners and the wage-working majority. Capitalist economic reality would give them no choice but to take decisions that gave priority to profit making and taking.

Choosing MPs by election is a better system for capitalism. It enables the support for differing sections of the owning class to be measured and for the section with the most support to have its way. As long as capitalism is in existence, it is also better from the socialist point of view since it enables the socialist movement to send its delegates to the law-making assembly that is the key to controlling political power. Sortition would get in the way of this as there is no guarantee that a Parliament chosen by lot would reflect the degree of support for socialism amongst the population or a majority for socialism.

This said, in socialism, where would be a common social interest, there would be a wide opportunity to fill some posts by lot, maybe entire local councils, as one aspect of the participatory democracy that will be an essential part of socialism. But under capitalism it wouldn’t, and couldn’t, work as intended.