Blain’s Morning Porridge, Feb 24 2021: Rising Policy Risk

Changing the narrative, one lie at a time

Blain’s Morning Porridge, September 22nd 2022: Changing the narrative, one lie at a time

“Tell a lie often enough and it becomes the truth.”

 This morningThe biggest crisis the West faces may not be the challenges of energy, confidence, inflation and growth, but restoring trust in the narrative by cutting out the disinformation planted by our enemies. Time for some leadership.

Cheer up, it’s not all bad news. Cornered Mad-dog Putin is threating Nuclear Armageddon, the Fed is telling us it will continue to aggressively hike rates, the Bank of England is about to follow, stock markets and bonds are in trouble, the yield curve is inverted…. but…. a Judge explained to Donald Trump the difference between the Art of the Deal, and the Art of the Steal. I loved it. Donald, not so much. Naturally, he is livid: it’s not a fair trial, she is politically motivated, etc, etc… and millions of Americans believe him.

I really don’t understand why so many otherwise charming ‘Mericans love Trump… but that is the world we live in. Folk are prepared to believe in all sorts of flabulations – like Cathie Wood, like Tesla, like Brexit and whatever, like Putin is winning his war. And folk also tend to believe things are so bad they can only get worse…. Leading me back to my favourite market mantra: “Things are never as bad as your fear, but never as good as you think…”

If only it was so simple…. Yet, there is a simple route out the current multi-crisis environment. It boils down to solving three critical aspects:

  • Address and Restore Energy Security
  • Build Confidence and Trust in Government
  • Stimulate economic growth and jobs

All these can be done. But it gets complex. Rationally, these goals would be achievable – but rational is not a concept in the economic lexicon.  In a rational world – which many economists still believe in – a host of current political themes would simply not exist.

The more complex we make the problem, the less likely we are to solve it. Let’s take energy security as the first problem. To solve it we need to reverse our misplaced trust in Russian energy, bring new energy on-line, and ensure our future energy is not compromised again. That will be a long-term problem for Russia – its’ goal is to maximise the price it sells energy, which it won’t get from China. Ultimately it needs the West to become a buyer again.. but would we ever be so foolish again?

Part of the difficult in solving the overall crisis is our political process is vulnerable. Democracy is the worst form of government, except for any of the alternatives. By giving everyone a voice, we open it to assault. We underestimate the subtly with which Western economies are being undermined.

Yesterday I flicked on a lunchtime TV chat show whilst grabbing a sandwich. The audience were debating Liz Truss’ economic package. One lady jumped in to raise the £2.4 bln Truss has allocated to support Ukraine. She said she absolutely supported Ukraine, but added:“we have our own consumer cost of living crisis to solve, we can’t give money to Ukraine when we have problems of our own.”

Planting lines is the oldest political trick in the book.

The audience nodded in approval. There was no talk about the critical importance of the West being seen to stop Putin, there was no grasp of politics of energy markets. I am not accusing the lady of being a Russian Shill – but that idea we can’t afford to support Ukraine came from somewhere.

Where?

It was an interesting moment. Quite rightly there is not a single UK politician (of any stature) saying the UK should pull or diminish its support for Ukraine. There is not a single national newspaper advocating such a course of action. The mainstream TV channels are united in the condemnation of Putin’s war. The amount of money Truss is allocating for Military Support in Ukraine is a rounding error on the govt’s spending plan. In real terms its superb military value for money in terms of effect!

Yet, a single Woman in a TV studio suddenly spotted what every politician, newscaster and editor has missed about the mood of the country? Suddenly Military support for Ukraine became a continuous issue on a national TV chat show? How?

Someone sowed a seed of doubt, it was planted in the fertile soil of that lady’s perspective, and it germinated on the TV show. The result was the narrative around Ukraine momentarily swung and wavered. Her comments were absolutely nothing to with the state of the UK economy – the subject of the debate.

Throw enough doubt in the Ukraine narrative, then it doesn’t matter about President Zelenskyy talking direct to the UN assembly in NY y’day about the need to stop Putin. So much for President Biden’s comments about the crimes committed against Ukraine Putin’s war aim of “extinguishing Ukraine’s right to exist as state… that should make your blood run cold.”

The truth used to be the truth. Today it whatever one finds it convenient to sell as the truth. The truth is no longer fact, but what one wants to believe. Say something often enough and it becomes a truth.

Over the past few years, trust in factual news has evaporated. News manipulation exploded as a result of the innovation of internet tools and social media. There are whole new ways to “scope the narrative” – new ways to plant seeds of doubt, including the destabilisation of the West by weakening trust in its political system. The fractured political foundations of the West is one of primary reasons our politics are now so broken – and populists find such ready platforms.

To counter destabilisation we need strong and coherent leadership… I rest my case..

I am staggered by the ever-increasing amount of hate-mail I receive. I am repeatedly called an idiot, a liar, a shill of the West, whatever. I find 99% of it ridiculous. I have started removing any obvious fake-news derived comments from the Porridge Website. As a result I am accused of being close-minded, a Western Shill and a Davos minion for doing so. Occasionally I get more worrying threats – like a guy who knows what train I get to London and suggested it might have an accident. (Seriously.. what more could you do to a SW Train to make it worse??)

What really concerns me is just how blind some of these people can be. To anyone with a couple of braincells, the fact the War In Ukraine is not necessarily going the way Putin expected is downright obvious. You can read all about it in the Western Media, but that doesn’t count, because Western Media is controlled by the left and the Davos elites, apparently. Or you can read about it in AlJazeera – which is pretty neutral until they say something suggesting a Russian reverse, at which point its also part of the Left/Davos elite conspiracy.

Let me drop in some lines from recent mails refuting my comments on Ukraine.

  • “You are reading propaganda. Russia is winning on the battlefield.”
  • “You are an idiot fed MSM NATO Globalism Yenta Milk.”
  • “The West is responsible for the proxy war in Ukraine – we in the west ae to blame.”
  • “Putin just wants to sell oil. Brussel’s, which is full of unelected bureaucrats, wants to micro-manage every aspect of our lives.”
  • “This is the only chance to destroy the central planning Overlords of Brussels. Russia is the only hope of freedom in the world is the biggest conundrum I have ever seen.”

I e-mailed them back. Surprisingly, these all turned out to be real people rather than Russian Troll bots. They genuinely believe what they believe. They’ve put all the parts of the picture together – and reached utterly different conclusions. Its like dealing with some kind of alternative reality: at some point in the recent past their reality diverged from our reality and is now going in a completely different direction.

How did it happen? Who knows.

But should we let them distract us? Time for forthright leadership.

On the back of Putin’s threat’s yesterday Ukraine has turned darker and more threatening to the World. Nato and the West will be forced to respond. Putin says he is not bluffing – but he is. He is desperately looking for a win he can sell to the Russian people. That may be an offer to allow him to annex the current frontlines. This is no time for appeasement. Putin must not get peace till every Russian is back on their side of the original border..

Next few weeks are going to get… interesting.

Five Things To Read This Morning

FT                   From Fed pivot to Fed pause

BBerg              Danny Blanchford Criticises Truss and Says Short the Pound

BBerg              A Decision Tree for Biden if Putin Goes Nuclear

WSJ                Donald Trump Sued by NY Attorney General on Fraud

Thunderer       Liz Truss tax-cut plans will leave £100 mm hole for years

Out of time, and back to the day job. No porridge tomorrow. Have a great weekend.

0Bill Blain

Strategist – Shard Capital