Rising petrol prices and the death of Nigel increase my sense of foreboding
I returned from a New Year expedition to the Dordogne laden with wine, walnuts and a deep sense of foreboding — not provoked by the mood of rural France, which felt unchangingly placid, but by what I’ve been reading and hearing about Britain and the rest of the world.
The fund manager Jonathan Ruffer convinced me some time ago that inflation would be the next big peril. With retail prices now rising three times faster than pay, petrol dearer by the day, and food and clothing following the upward spike of commodity markets, the monster is upon us.
David Cameron gave a first nod last week towards an issue his government has otherwise so far ducked for fear of angry wage demands on top of strife over cuts. The Bank of England also seems reluctant to admit the extent of the threat, for fear that the necessary monetary response would choke recovery. So inflation is still in the anecdotal phase in which consumers are startled — the Americans call it ‘sticker shock’ — by what seem to be abnormal hikes for particular items, rather than perceiving a general trend of prices rising out of control, and of the real value of their savings (and perhaps of their houses) being rapidly eroded. When we reach that point, as Ruffer says, it will suddenly be like the 2008 banking crisis all over again: ‘Wow, where did that come from? And who can we blame?’
Meanwhile, the historian Niall Ferguson has convinced me that economic turmoil always leads to resurgent populism with ugly edges. Hence the rhetoric of Sarah Palin which may have infected the mind of the Tucson gunman; hence Sinn Fein’s attempts to gain new ground in the Irish republic; hence the class warfare of the British left against free schools and academies. And Nicholas Shaxson’s new book Treasure Islands, subtitled ‘Tax havens and the men who stole the world’, has convinced me that there is now a poisonous gulf between, on one side, the financial sector, its bonus-hungry executives and their tax-dodging clients, and, on the other side, everyone else.
Put all this together with other elements of the current scene and it makes a disturbing picture. A populace that suddenly feels poorer again; a student body with a taste for rioting combined with a mass of under-employed, disaffected youth; a ‘Coalition of Resistance’ against the cuts backed by Red Len McCluskey of Unite calling for ‘battle’; and a generalised hatred of the better-off. The only thing that can quell the unrest is economic recovery — which is coming, but slowly. In the meantime, it could get nasty. My advice to the bankers is: collect your bonuses but listen for the sound of breaking glass, and keep your suitcase packed.
Ghost story
Still, at least sales of Rolls-Royce cars have been soaring — up by 171 per cent last year compared with 2009. America remains the company’s biggest market, but there are now more Rolls buyers in China than in the UK, while orders have also been strong in the Middle East, Korea and Japan. As for India, sales were up seven-fold (from ten cars to 70), with particular success for the £165,000 Ghost which ‘our customers appreciate as an everyday car which they can use to drive themselves as well as be chauffeured in’, according to a local sales manager.
Could there be a happier parable of globalisation than this marriage of German capital and quality control (the marque has been owned by BMW since 2003), British brand magic and new-rich consumer status-seeking? Just don’t get caught in your Roller, like the Prince of Wales and his wife, when the rioters turn in your direction.
Bloodbath
Matthew Lynn, the Bloomberg columnist and occasional contributor to The Spectator on financial matters, is an unusually versatile writer. Much of his time is spent concocting thrillers about ex-SAS mercenaries. Fire Force is the goriest book I’ve ever read: at one point I found myself muttering ‘Do they really have to behead this chap and drink his blood when they’ve already crucified him with bayonets?’ He has a new one out this month, Shadow Force — alongside another uncompromising read, Bust: Greece, the euro and the Sovereign Debt Crisis (Wiley, £18.99), which combines a blow-by-blow account of the Greek bailout with an analysis of why the euro is unsustainable in its present form but might survive and eventually prosper as a parallel financial currency alongside re-established deutschmarks, francs and lire. Recommended (both genres, that is) for readers with strong stomachs.
As others see us
A French friend told me, with passion, that he sees France being destroyed by the absence of respect for French cultural norms displayed by Sarkozy and his clique, the rapid growth of an urban Muslim population, and ‘la démocratie des imbeciles’. But to a regular visitor like me, I responded, France is the same courteous, well-ordered society I’ve known for 40 years, far more civilised than modern Britain — which made me think that, to foreign eyes, Britain is probably still the gently eccentric, stiff-upper-lip place the world used to admire. Despite the elements of unease I sketched at the beginning of this column, visitors this month find us snuggled under a cosy eiderdown of tradition: toasting the Ashes victory of our gentlemen cricketers, obsessing about the royal wedding, moaning about the weather.
Perhaps we should all just stop trying to be profound on the basis of superficial observation. If I want to understand modern France, I should keep a holiday home not in a timeless Dordogne village but in a Paris banlieue where they celebrate New Year’s Eve by torching the vans of the riot police. And if the French want to understand modern Britain, they should tune into The Archers, where the whingeing rebel single-mum Helen has been kept alive and the harmless, kind, middle-class Nigel has been hurled off the roof to a horrible death.
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