Or how about this one:

“When the government actually did something about getting our nuclear strategy on track, it got it so utterly wrong that Greenpeace took it to court on a technicality!”

Angry Garry’s been warning about Britain’s dreadful energy strategy for a long time now. As he explains today, he’s worried our energy needs will ultimately be dictated by Moscow.

And something happened last night that has Garry even more worried.

Find out why Garry believes we’re now on the road to an energy nightmare!
Will the lorries force Brown into U-turn?

Why does the Government tax fuel? Is it to raise revenue? Or is it an environmental measure? Either way, it seems the latest little hike in fuel duty — the 2p increase — won’t be going ahead. And quite right too.

British hauliers are feeling the squeeze. Yesterday, many of them converged on London, parked on the A40, and delivered a petition to Downing Street. They want the Government to scrap the 2p increase.

Gordon Brown first proposed this latest 2p hike — due to come into effect this autumn — over a year ago, while still Chancellor. Since then, the price of crude oil has gone through the roof.

This, in turn, has sent prices at the pump soaring. According to petrolprices.com, the average cost of a litre of unleaded petrol is 115p. For diesel it’s 128p.

If the Government’s plan was to price cars off the road to help the environment, it can stop worrying. By going up so much, the oil price has already done more than this extra tax would have done had oil prices stayed the same.

Even in the car-crazy US, the high oil price has finally fed through to a reduction in car usage, as Bill Bonner notes below in today’s Daily Reckoning.

If the purpose of the 2p hike was to raise revenue (as I suspect it was), then things are a bit trickier. Only a bit, mind.

Yes, the Treasury will have budgeted for the extra revenue. But then again, higher fuel prices will have affected consumer behaviour. If Britons drive less, that in itself will impact the Treasury’s fuel duty income.

Not only that, but the higher oil price has boosted the state’s North Sea revenues. And besides, it wouldn’t be the first time this year the Treasury has had to do the sums again.

I’ve had a pop at the Government here before (If I’m honest with myself, that last sentence felt like a bit of a ‘mini-pop’). I’m sure I will again.

But if the Government changes its mind on this one, let’s not just blithely label it a U-turn, in the manner of some newspapers this morning.

Pressing ahead with the 2p increase would be the wrong policy, at the wrong time and hitting the wrong people. As one protester pointed out yesterday, we still need lorries to take goods from place to place.

If domestic hauliers go bust, foreign firms will do the job instead — and the Treasury will receive even less revenue. Not to mention the fact that allowing the industry to wither would be another step on the road to the so-called “backrub economy” — a society in which everyone derives their employment from the service sector.

Much has changed since the 2p hike was first proposed. At the time, crude oil was around $60 a barrel. Now it’s more than double that. In all likelihood, then, the Government will change its policy. And they’ll be right.

It’s just common sense, really.

Brasil! Brasil!

Ever since my days playing capoeira, I’ve liked to spell ‘Brasil’ with an ‘s’. It makes me feel cultural.

“It’s Brazil with a ‘z’,” says my down-to-earth colleague Manraaj Singh. “Now stop it.”

Brazil, you’ll be aware, is one of the hottest economies in the world right now. Manraaj tells me growth this year is expected to be close to 5%. Strong in oil, sugar, and with a buoyant service sector, Brazil is the place to be for many investors.

Leading the Fleet Street charge is our man Manraaj, who today shows us why the stock market there is rapidly outgrowing São Paulo…
Fleet Street Research presents: 3 firms hoping to escape the UK consumer gloom

I don’t know what it’s like where you are, but outside my office window the weather’s pretty grim. I don’t think it’s raining… but it may do soon.

A bit like the economy then (I know! Seamless!)

Tenuous links aside, the UK economy is in wobbly health. The canniest UK firms have protected themselves, and now make a significant amount of their money well away from these shores.

I’ve asked our research department to take a look at some such companies. There’s still work to be done (our boys are thorough, and wouldn’t dream of issuing a recommendation without doing the necessary prodding and poking).

But my colleague Theo has agreed to give you a sneak preview of some of the companies he’s been looking at.

Remember, these are NOT recommendations (happy Theo?). This is just to give you an idea of the kind of opportunities we’re looking at right now.

Until tomorrow

Ben Traynor

Source: How Blair’s Blunders Sold Us to the Russians

At least, since it started monitoring customer mood with its own survey four short years ago. Says their chief economist Fionnuala Earley:

“Food and fuel prices remain high and with house prices no longer rising it is unlikely that consumer confidence will pick up very quickly.”

The Daily Mail agrees under a headline “Broke Britain”. Families have less to spend as household income is eaten up by “unavoidable outgoings”. Discretionary spending – what’s left over after the “unavoidables” – is at its lowest level since 1991.

Economic forecasters Capital Economics expect food prices to continue to rise for some time yet at an annualised 6% and electricity prices will rise up to 10% in the second half. The average Council Tax bill is up 4% and the average water bill up 5.8%.
—————————————————————-

—FLEET STREET LETTER ALERT—

3 “Gloom-Loving Stocks” for the Coming Recession

Dark clouds are gathering over the UK economy.

But for contrarian-minded investors, this spells opportunity.

The Fleet Street Letter has just been given permission to share three such money moves with you today.

You can read the full briefing here

Forecasts are not a reliable indicator of future results. Your capital is at risk when you invest in shares, never risk more than you can afford to
lose. Please seek independent financial advice if necessary. Fleet Street Publications Ltd. Customer Services: 0207 633 3600.

—————————————————————-

And then there’s the inexorable rise of the oil price. It notched up another record hitting $122 yesterday. For the car driver presently, that translates into 110p for an average litre of unleaded petrol. A level that means it has now crossed the £5/gallon threshold and filling the tank sets you back a wallet-denting £75. An average litre of diesel costs even more at 120p, or £82 a tankful.

But hey, don’t worry CPI inflation is only 2.5% when you factor in all those DVDs, flat screen TVs etc. etc. it all pans out…doesn’t it? Add in too the darkening cloud hanging over the housing market… But the frontline casualties to date look like house builders and, as we suspected, estate agents.

Estate agents are going to the wall in numbers. As we know the credit crunch begat the mortgage famine which in turn begat a recession in housing transactions. That last part is a potential stake to the heart of those whose business is to broker the deals for a fee. No deals, no fees. No fees, no business. A slump in home sales has seen 1,000 estate agents close to date and 4,000 lose their jobs.

It’s a strange situation Peter Bolton King, chief executive of the National Association of Estate Agents, tells the Mail:

‘The irony is that there is no shortage of people who want to move house, but without mortgages they just can’t do so. Estate agents are having to close because there just isn’t enough movement in the housing market.’

I know, our hearts bleed for the poor unfortunates. Given their infestation in many high streets, some trimming may be no bad thing but the death of the market helps no one in the end. In Argentina they have a saying: La plata que no se meuva, se meura. Money that doesn’t move, dies. Putting aside the phrase probably arose during their ruinous experience of hyperinflation the central thought is one of the nature of markets – a market that doesn’t move, dies. And in the case of the UK housing market presently, it’s showing a weak pulse.

(Hispanic speakers are welcome to correct my rusty linguistics!)

*** There’s still plenty of money around judging by an art market that continues to make the headlines. Monet’s ‘A Railway Bridge at Argenteuil’, “considered a prime example of high Impressionism” says the International Herald Tribune fetched a record $37m yesterday.

The previous owners paid $12.6m in 1988. A prize possession no doubt but aesthetic pleasure aside in investment terms that’s a modest return – a little over 5.5%pa. For that you can keep your Monet your editor will stick with his more humble investment trust savings scheme.

Or perhaps a permanent interest bearing share (PIBs) is worth a look these days. One of these unfashionable and little known fixed interest investments – the Britannia 5.555% – is yielding over 8% Collins Stewart advises in a note this morning. No doubt a good deal more than you’d get in even Britannia’s most generous savings account.

More adventurous investors might like to consider what is perhaps the last of the emerging markets: Africa. The pros have been turning their sights on it. The FT reports today ICAP plc, the interdealer broker, is setting up a hedge fund investing in Africa and the Middle East. The region has not escaped the attention of our own emerging markets expert Manraaj Dheensay. He’s found a great opportunity to invest in the region and interested readers should look out to hear more about it from Manraaj, coming through this Saturday.

Regards,

Rob Mackrill
The Daily Reckoning

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