Transitory?

High energy prices?

Perhaps many consider these high energy prices to be transitory. I have given this some critical thought. How about high inflation? This is no longer considered to be transitory.

Currency Strength

If our currency had a certain robustness to it, then prices would remain largely constant. I have given some critical thought to what increases the strength of our currency and what weakens it.

Cost of living crisis

This is being portrayed as transitory too but is it? I would say that the main components of this are the currency and energy topics mentioned above.

My Conclusion?

Oh dear. What a mess. None of this is remotely transitory. We are living with the consequences of ignoring reality for decades. Most of us are continuing to ignore reality. This winter will, most probably, be difficult but the following winters will require major cultural shifts.

Cultural Shifts

A weakening currency leads to high basic living costs such as food and heating our homes. So, when rent / mortgages cost around the same as our home energy bill then the people at the edges of our cultural bell curve will make some similar looking decisions. Some will move to smaller homes. Those in small homes may move to a larger home and share it with others who have chosen the same path. This will influence the decisions of others and slightly shift the bell curve.

What will the solution look like?

Well it won’t involve solar panels, wind turbines, feminism and electric cars. If you think it does, then you are not a critically thinking engineer. You are a wishful thinker and have been let down by those who have influenced you for their own benefit and not yours.

UK Solution (part one)

We will need to open up our gas and oil reserves and use that energy for transport and for implementing the actual solution to our cheap energy scarcity problem.

UK Solution (part two)

We need lots of too cheap to meter electricity to heat and light our homes. Those with electric cars, ebikes and escooters will benefit from this very inexpensive solution. The solution is going to take twenty years and it is Nuclear Energy. We may well need to re-open our coal mines whilst transitioning to our energy rich future.

Anyway

Prepare for the worst and hope for the best. Expect your home heating to cost the same as your rent and mortgage starting Winter 2023 / 2024.

Future Implications

House prices are something lots of people are concerned about. Well, they are going to weaken. Banks take into account your outgoings before advising you of the amount that they will lend. Financial asset prices are already softening and these will continue to weaken. The logic behind this is astonishingly simple but not linear. Most people cannot handle non-linear logic.

Interest rates, house prices and financial asset prices

These are all ‘managed’ as are our responses to any changes in their valuations. Energy has been added to the list and so will food before much longer. Critical Thought takes you out of the ‘managed’ category and into a different category.

Conclusion

Believe what you will and do what you wish to do, freely allowing others the same.