The world is headed for a new (financial) crisis and the government fiddles

By Michael Smith (Veshengro)

Hello!!! Anyone home? Apparently not.

While the world is headed for another financial crisis and a few others to boot the entire British government, and especially its leaders, have taken leave of their senses and leave of absence. They fiddle in Tuscany and other places while London burns; the financial sector at least, though only literally while not actually being in flames (as yet).

Are we in trouble? Hell, are we ever.

On Friday, August 5, 2011 S&P downgraded the USA's triple-A credit rating but sort of half a point to a AA+ but the markets have been in a nigh free fall ever since the US government could not – properly – agree on how to handle the debt crisis and the Euro Zone going from bad to worse.

They next person who tells me that the recession is over and there is no chance of anything bad happening, such as a double-dip or a full-blown depression, I am, I think, going to give a lesson in reality, and this might be by means of a pickaxe handle.

Now we have had a full blown riot – though nothing to do with the money woes – in Tottenham, North London, with looting and burning and Tottenham, the scene of the now infamous Broadwater Farm slaying of PC Blakelock, resembling a war zone on Sunday, August 7, 2011.

And where are our country's glorious and fearless leaders (and yes, I am being sarcastic as to their titles)? They are and remain on holiday with the Prime Minister being in Italy, the Chancellor of the Exchequer in the USA and the rest of the cabinet in this or that country, including, it would appear, our Minister of the Interior, the Home Secretary.

The riots in Tottenham – and we will be looking at those in another article – could have been dealt with much better and differently if the police and government had the willpower to let looters know that it is a no, no.

The financial situation, however, with the Euro also headed, as it would seem, for a bit of a meltdown, is something that will affect us long-term and for many, many years to come.

As the Governor of the Bank of England not so long ago stated the living standard of the people of Britain may never, ever, return to the pre-crunch level. And especially for people in the public sector, and here very much the lowest paid though the most important ones when it comes to service delivery, are looking at a rather bleak future with all the costs rising and their pay having being frozen for two or more years. In some instances they have had to accept new contracts that even reduced their pay. The unions are rather quiet on that level, though.

But everyone will be feeling the squeeze bar those, obviously, who are the ones who caused the problems in the very first place, the bankers, whose bonuses still are in the multi-million pound range, and that even at banks which are now, basically, owned by the taxpayer. We are in trouble indeed.

Anyone in government who is still saying that we are not is not living in the real world. Then again, they don't.

Prices for everything are on the rise and as an example I just want to list the fact that the price of butter, of Sainsury's Basics butter, went up in two weeks by 40pence. The price of 6 Basics mini-jumbo toilet rolls by 40pence and and Basics full flavor cheddar cheese went up by over 50pence.

On top of that energy prices, that is to say cooking and heating gas and electricity, are on the up and that by several times the rate of inflation, with the companies quoting rising wholesale prices. It is just amazing that when those very same prices go down they very rarely pass the savings on to their customers.

We are in trouble and our leaders remain on holiday. Great one guys. I hope the electorate won't forget that. I certainly won't.

© 2011

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Is Ethical Shopping Becoming the Victim of the “Credit Crunch”?

by Michael Smith (Veshengro)

There appear to be signs on the horizon that indicate that shoppers may abandon ethical shopping in the fact of rising prices, especially cost of food and fuel.

Organic foods and fair trade goods are being bought less, already, it would appear, than it was only a few weeks back.

Concern for others less well off and especially for growers and producers of coffee, tea, cotton and such, and concern for the environment are the first to suffer and go out of the window when it comes to prices, in general and especially for food, going up. Then even BOGOF offers not longer cut it and it is straight forward price reductions that shoppers look for.

Where does this leave Fair Trade and organics and green produce and products, as well as services and suppliers?

Considering that, more often than not, fair trade and other ethical products, goods and services are somewhat more expensive – in some case a lot more expensive – than “ordinary” ones people vote, in times of economic “hardship” and recession, even if it is only perceived “hardship” and recession, with the pocketbooks and their feet. That is to say they buy other goods that are not fair trade or organic or green or ethically produced. They will then go, mostly, for non-fair trade products which are significantly cheaper that any ethical goods and products. This is with the exception of some produce such as tea and bananas at Sainsbury's in the UK, for instance, where all of their own brand tea and all of their bananas are fair trade and the price remained the same as before.

While I am well aware, as I am sure other people are too, that a fixed price and premium is paid to the producers under the fair trade agreements, ate times, I am more than certain, retailers do put a nice little profit margin onto fair trade and other ethical goods, knowing that the ethical shopper is prepared to pay extra to have the money go to the producers. Most are not aware of how high that profit margin is, at times.

Not surprising at a time when such products are demanded by the buying public and the same is true for anything recycled and “green” and for any environmentally friendly goods. Here too, in the recycled and environmental friendly product sector, because of demand, many makers, manufacturers and sellers have added a rather big margin to rake it in. Is that ethical? No!

It is therefore not surprising that at times like these when fuel and food costs are going up and up shoppers are not prepared to pay through the nose often and therefore go for the non-fair trade and other products.

While the fair trade premium paid to the producers is one thing, in many of the other cases the costs are that high because the sellers know full well that people want to be and be seen to be green and to have a conscience. People who want to be seen to be thus are therefore also quite willing to pay such premium while the economy is more or less booming but, as it seems to ease their consciences to do so and to do “their bit” for the poor or for the environment. However, when there is a downturn and the economy throws a wobbly such ethical principles soon are abandoned and no such goods and produce are being bought, or at least they are bought less.

I must say that, with some of the prices charged for “green goods” I am not surprised that under conditions of perceived hardship people will not buy them. Some are a rip off as far as costs are concerned. There was a saying that one cannot get money for old robe. Today this, however, no longer holds true. I am not sure about getting money for old rope but some green “designers” and crafts people sure ask money for old rope (see my article elsewhere).

Sainsbury's has recently fought, it would seem, a price war with the likes of Tesco and ASDA as regards to “Delight” chocolate and, as far as can be seen from the restocked shelves, has now deselected the Divine fair trade brand and has gone for a much more expensive brand that is not all fair trade and I am sure we can see here, yet again, that money begins to speak against the principles that that company was claiming it had.

The truth is, and that applies to supermarkets and retailers as much as to the shopper, that the bottom line is all that the majority are concerned with and only when it suits them will they, the majority that is, be interested to be seen to be green or ethical. There will remain some that will stay true to their principles but I doubt that many retailers will. The same will also be true for many shoppers. To the seller any fair trade that does not sell is a loss-leader and something to be replaced, period. To the shopper who has to watch his pocketbook it is the price that counts for the food or what-have-you in times of economic wobble and not whether or not he is green or does good. That is the bottom line. Now where does that leave fair trade and the green sector?

© M Smith (Veshengro), May 2008

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The “Stay-at-Home” Holidays

Reduce your environmental footprint by vacationing at home and save money

by Michael Smith (Veshengro)

Holidaying at home is good for the environment and also good for you. You save money, there is less stress and all being well you will not need a holiday to get over the holiday.

In the current economic climate and with the impact the so-called “Credit Crunch” on the finances on the individual, and not the individual alone, and also the rising costs of food and gasoline, taking once vacation at home rather than abroad and may be even very close to home, namely AT home, may be something that will needs to be considered. It is the frugal thing to do the way things stand at present and also the environmental, green and ethical thing to do.

With the rising fuel costs and the increase of the general cost of living, from food to taxes, I am sure that the time has about arrived, if it not indeed is here, where we all are going to be turning the penny around a few times more again before we are going to spend it. Therefore, vacationing at home than abroad may just be the result.

Those that have a nice home and a nice garden I have never been able to understand as to why they would, not only spend the money, but the time and effort, to travel abroad for a for a few weeks holiday and then return more exhausted than when they left.

I must say that I rather have “stay-at-home” holidays where I can do what I want when I want and I can take the occasional outing to here and there. Most places wherever this may be have some kind of areas of local interest and even historical interest, just aside from museums and if that does not suffice then a day trip to a larger city to take in the sights and especially things like history and such, is also a very nice thing to do, and, very often a frugal thing to do, as long as you bring your own packed lunch and drinks. Buying them on location, normally, works our rather costly.

I remember before the times of the package holidays and the cheap flights to all over the world that people vacationed at home, in their own gardens, or those in the urban areas on their allotments, or went for a day or so to the seaside, or into the countryside for hikes. Others, especially the working classes that had the funds had a caravan by the seaside or some hitched up a caravan and went on holiday travelling about. Yet again others went on cycling tours with tent, including with their children. But even caravanning probably is out, nowadays, with the rise of the costs of fuel.

People who could not afford to go away or did not want to, stayed, as said, at home in their own gardens, if they had such, or on their allotments, or went to the local parks and open spaces as much as possible.

Seeing the current economic climate, in the United Kingdom, as much as in the United States and elsewhere, with the rising cost of living, of fuel, of food, of everything else it would seem, it is more and more likely now that with maybe already the very summer of 2008 we may just see a beginning of the “stay at home” holidays again. Not a bad thing either, of that I am sure.

Aside from saving money the local parks and open spaces will, once again, see a real resurgence of and in use and the powers that be might then be more reluctant to even think of getting rid off parks and open spaces. The other good thing of the “stay at home” vacations is the fact that such holidays put less of an impact on the environment (do take your litter home with you from your visit to the park and the woods please) in that there is less fuel used, and that aside from the money that is being saved. This saved money, or at least part of it, can then be spent in the local economy, at home.

Flying to destinations, and even motoring to destinations in France, Spain and elsewhere, put an enormous strain on the environment, as does leaving your litter in the countryside, and the environmental footprint of your package holiday, if you had to actually off-set that (something that may still head our way), could be a rather costly affair. Anyway, I am sure that taking holidays abroad is going to be a thing of the past soon, and it would not surprise me if those people that have already booked their holiday flight to abroad for the summer might suddenly find that they are going to be surcharged because of the increase in the cost of aviation fuel and everything else that goes with it.

If you have one, get your garden organized and take your holiday at home. You will reap many benefits from that, not the least the fact that your vacation will start the very moment you arrive home from work on the last day of work before the holidays and it will end the morning you start your shift again. That is aside from the saving made in other departments.

While we are still being told by the our governments that this is not a recession or a depression but just an little blip and a slight economic downturn, all the signs do point to something much more severe.

I may not be an economist but the way things stand presently with everything on the rise as it is – let us face it, in the UK bread has gone up by a considerable about in just a few weeks and that is just one staple that I would like to quote here – I cannot see that we will not be headed further down for a while before we may, but just may, recover again.

The “Stay-At-Home” Holiday is definitely, in my opinion, a small little answer here to keep our own finances balanced a little more. Any frugal advocate will tell you that you save a great deal by staying home to have your vacation rather going away and that is just for starters. While there are savings in the money department, far greater ones are made in the sanity department.

© M Smith (Veshengro), May 2008

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