Angela Eagle, slim and elegant, as beautifully dressed as she is spoken, with an acute and finely trained brain was discussing current Treasury policy and the alleged bad blood now resulting from No 10 trying to micro-manage the Treasury in the way the Treasury wanted to micromanage everything else before cuddly loveable Gordy became temporary tenant at No 10 on the BBC4 World at One programme earlier.
"Nobody predicted the current oil price spike"
Oh really ?
We we might direct he alert mind to the statements from Goldman Sachs, into whose pockets the Government shovelled many sacks of gold to prolong and delay at great cost to the tax paper and profit to Goldman Sachs the affairs of Northern Wreck.
There must therefore be the occasional contact, odd chat, over a nice dry, crisp Sancerre in a trendy London eaterie at tax payers expense of the state of the economy oil prices etc., Especially considering that each price rise does actually swell the coffers of HM Treasury more than might have been anticipated when planning national income (which one assumes someone does).
Marketwatch March 7, 2008 ..." With $100-a-barrel here for now, Goldman Sachs says $200 a barrel could be a reality in the not-too-distant future in the case of a "major disruption"
"Goldman analysts Arjun Murti, Kevin Koh and Michele della Vigna said prices have advanced more quickly than Goldman had forecast back in 2005, when it predicted a range of $50 to $105 a barrel as part of its "super-spike" oil theory. "
Are oil prices headed for a 'super spike'? from that little known and rarely watched TV channel CNN. Online article May 2nd 2005 and at the time many, many others
This report featured the Goldman analyst Arjan Murti who had produced a ," thoughtful, 30-page piece of logical analysis ....Murti had previously raised the notion of a super spike in two reports last year--in June and September--forecasting a then sensational peak price of $80 a barrel. "
Reporter Andy Serwer explained "The crux of Murti's theory is simple: We're in the middle of a classic boom-and-bust cycle. The economy has been heating up here and in China, which pushes up the cost of crude. When the price of oil--and especially, here in the U.S., of gasoline--climbs too high, it curbs economic activity, which then depresses the demand for oil, causing prices to drop. Nothing revolutionary there. For now, though, demand for crude is continuing to rise--if a little more slowly than last year. That means prices could go higher. Remember: In terms of 2005 dollars, oil peaked in 1980 at $85 a barrel. "
"All I did (Murti explained ) was to raise the high end of my price band from $80 a barrel to $105 a barrel," says Murti. "Spending on gasoline in the U.S. relative to the overall economy is still well below where it was in 1980--81. So demand could still climb from here."
A week later, at the firm's annual shareholders' meeting, Goldman Sachs CEO Hank Paulson ( now US Treasury secretary ) felt compelled to defend the report and the integrity of the analyst and his firm.
We would direct the elegant Angela's gaze to the essential reading for literally everyone intersted in UK finacial / energy forcasting by Euean Mearns on The Oil Drum
A State of Emergency
This crisis (in energy supplies and costs) has been turned into a state of emergency by the indifference of political leaders in the UK (and throughout the world), fluttering in the wind of poorly informed public opinion while they have prevaricated about expanding renewable energy resources and building new nuclear power stations. All warnings of this pending energy crisis have been ignored in favor of pursuing popular policies that created the illusion of prosperity whilst the fundamentals of our nations security and well being have been draining away.
Here are a few pointers to what I think we can expect in the next 18 months:
1. Forever rising energy import bills will pressure Sterling which will continue to fall, pushing up the cost of energy, food and consumer goods even more.
2. Public sector workers, no longer able to borrow to supplement income will begin to strike once they discover that 3% wage increases do not come close to covering the rise in the cost of living (the great inflation lie will be found out).
3. Unemployment will begin a steady rise as financial services, banks, building sector, airlines, airports, leisure and retail come under severe pressure. They will be joined by public service workers as the government struggles to fund public services with falling tax receipts, spiraling debt and a falling pound. (already happening in Aberdeen with deep cuts in education spending across the city and teacher numbers being slashed). (QV Californian City of Vallejo filing for Bankruptcy)
4. The elderly and poor will really struggle this winter to pay their energy and food bills. If the weather is cold, the grid might fail and the vulnerable will begin to die from cold and starvation.
To illustrate this Euan Mearns has produced an amended chart from a presenation of 58 slides given internally by someone in BERR - Department for Business, Enterprise & Regulatory Reform (what in the old days we used to call the Board of Trade) this shows Net UK oil and gas national supplies and demand and in GREEN the growing horrible national deficit
This demonstrates how from an energy rich and independant country we have now tipped into an energy importer and the deficit is now growing at an alarming rate. For example one single component , national gas consumption and it's sourc in this graph produced by BERR shows the way how imports (especially from Norway) have grown and are growing monthly.
Click to enlarge .. which as Gemma Garrett was saying, if only it was always that easy.
PS Hot tip of the week . Radicalise yourself become a screaming hab dab mullah , get extradited and seek asylum in Norway where their leaders have had the good fortune and even greater sense to accrete the benefits of their North Sea "windfall" into a national fund for investment.
PS Second Hot tip of the week : Someone at HM Treasury get Euan Mearns in for a chat and pay him before you run out of money.