Covid 2.0

“We live in a time of great uncertainty and confusion. Events keep happening that seem inexplicable and out of control.. those who are supposed to be in power are paralysed – they have no idea what to do. This film is the epic story of how we got to this strange place. It explains not only why these chaotic events are happening – but also why we, and our politicians, cannot understand them.”

– Introduction to the documentary ‘Hypernormalisation’ by Adam Curtis (2016).

“The UK,” writes Ramesh Thakur for Brownstone, and also for Spectator Australia,

“has been consumed by a scandal involving the use of faulty accounting software, Horizon from Fujitsu, used by the Post Office to accuse postmasters and postmistresses of stealing funds. Under UK law, the Post Office is empowered to prosecute alleged offenders directly. Between 1999 and 2015, an astonishing 700-750 hardworking and conscientious managers of local community post offices, often the pillars of society and the very backbone of small businesses in the country, were convicted.

“Their protestations of innocence and suggestions of glitches in the software were dismissed: the computer does not lie, the courts were told, and they accepted the infallibility of technology. Many were coerced into pleading guilty because they could not afford to fight a state behemoth. They lost the respect of their peers, many were ruined financially, several went to jail, and some committed or tried to commit suicide.

“It was only in 2019 that High Court Judge Peter Fraser cleared the postmasters and pinned responsibility for the financial discrepancies on the software. The Criminal Cases Review Commission has described the scandal as the ‘biggest single series of wrongful convictions in British legal history.’ But the scandal wasn’t over yet. Their efforts to overturn the wrongful convictions and receive reparations have been painfully slow and around 70 claimants died in the interim with their names still not cleared. As of January 2024, just 93 convictions have been reversed and only 30 people have received any compensation.

“Although the scandal has been bubbling away under the radar for more than 20 years, a four-part ITV dramatisation that screened recently finally caught the public’s attention, and then some. Mr. Bates vs the Post Office tells the sorry tale through the eyes of one brave man, Alan Bates, unflinchingly supported by his wife Suzanne Sercombe, who kept fighting the entire system and establishment to clear his name, exonerate their colleagues, and indict the senior executives. Prime Minister Rishi Sunak has pledged to introduce a Bill this year to exonerate all the postmasters convicted through the dodgy Horizon-based evidence.

“The Metropolitan Police have launched an investigation into potential fraud, perjury, and perverting the course of justice.

“There are many parallels of this scandal with the Covid saga over the last four years. In what follows, I draw in particular on comments on the Horizon scandal in two recent articles in the UK Telegraph by columnists Allison Pearson (which attracted nearly 5,000 online comments) and Allister Heath (2,600 comments), and a third article in the Conservative Woman by Professor Angus Dalgleish.

“The first obvious parallel is the blind faith in computers and technology that was untested in the real world. The two equivalents in the case of Covid are the elevation of mathematical models to science and the use of unreliable PCR tests, especially with elevated cycle threshold counts. The PCR machine can be made to run multiple ‘cycles’ (like a washing machine) to keep amplifying the target viral material in the sample to make it detectable. The CT value, the number of cycles it takes to detect the virus, becomes increasingly less accurate beyond 25-28 CT yet in some cases it was raised up to 40 and those who tested positive were treated as Covid cases.

“Another parallel is in the awarding of state honours and medals to the perpetrators of mass cruelty. The then-CEO of the Post Office Paula Vennells got a CBE for her services to the PO, (she has since bowed to public pressure to hand back the honour) while the number of health officials and scientists receiving honours have been sickeningly high.

“A third is in the refusal of ministers and parliamentarians to listen to the ordinary people desperate to get their honour and lives back.

“The Post Office minister at the time, Sir (another one) Ed Davy, refuses to accept responsibility and instead blames it all on civil servants: they lied to him on an industrial scale! In fact it is the complicity of all the top institutions and their smug and self-righteous senior personnel – from cabinet ministers to judges, lawyers, executives, investigators, the Post Office board and the Fujitsu board, the engineers, and technicians – that has been so sickeningly repeated in the Covid years.

“It seemingly did not occur to anyone to ask why over 750 managers with hitherto unblemished records were suddenly all committing financial fraud at the same time, which coincided with the mass rollout of a new accounting software to post office branches across the country. No one seems prepared to stand up for the victims of the wrongs and the harms.

“And no one still today is prepared to inquire into the dramatic explosion of reported adverse events and excess deaths that coincide with lockdowns and mass vaccinations. They too have encountered unconscionable delays in having their cases investigated and compensation awarded. In a related vein, very few countries seem prepared to take back healthcare workers and civil servants dismissed for refusing to comply with vaccine mandates.

“A fourth commonality is the role of Andrew Bridgen MP crying in the wilderness in both tragedies that something wrong was happening to the Horizon- and vaccine-injured that needed to be looked at. While his name has become familiar in the time of Covid, he had the conviction and the courage to act on it in trying, in vain, to highlight the plight of the postmasters for many years.

“A fifth common theme is the class divide, where the rapacious political, bureaucratic, and business elites got the financial and social rewards but the harms, pain, and suffering were borne by the workers. The rewards – promotions, bonuses, honours – for ruining so many innocent, decent, honourable lives really stick in the craw.

“A final common theme is that justice will not be seen to be done and the sense of justice will not be appeased unless many of the top people responsible are put behind bars. There will be no emotional closure for the victims and their families and no effective deterrent to future wrongdoing by jumped-up and condescending members of the ruling class without full and transparent criminal justice accountability. As Heath writes, the postmasters, ‘the best of Britain, were persecuted by the worst of Britain: the overpromoted corporate-bureaucratic class, the useless apparatchiks of Britain’s Kafkaesque bureaucracies, the unaccountable arms-length bodies, the out of control lawyers, the civil servants and the subsidy-hungry corporations.’

“What we need to close this particular circle is both a proper inquiry and a human-interest personalised TV dramatisation of the Covid-related injustices inflicted by the unholy collusion between the different components of Big State, Big Pharma, Big Tech, and the mainstream media.”

‘Unholy collusion’ sounds about right. To best understand the Horizon scandal, follow the money. To best understand the Covid scandal, follow the money. Follow the money, too, in the form of what is happening with broad money (that is to say, bank credit and bank lending) – which will give us all a steer about the likely path of inflation, and therefore the ongoing necessity of retaining meaningful portfolio exposure to the likes of gold and silver and associated equity interests. The analyst and historian Russell Napier in his Solid Ground research note ‘The Train Now Arriving at the Finland Station – Discounting Regime Change’ points out that the situation facing commercial banks is completely different from the one they faced during the Global Financial Crisis. Back then, central banks conjured up money in the form of QE, which was given to the commercial banks in exchange for holdings of government bonds, and that money (or bank credit) was then provided to big savings institutions or large non-financial companies. In many cases those companies elected to hold large precautionary cash balances, and as a result most of the “new money” never actually circulated in the broader economy. The velocity of money did not raise, ergo we did not experience inflation in anything except asset prices.

This time round, as Russell points out, almost all the bank credit being created under European credit guarantee schemes, with the exception of Germany, is going to small and medium sized companies (SMEs). We are seeing a similar trend in the US, where the only driver of bank credit growth is the Paycheck Protection Program (PPP) which is restricted to smaller companies. Because SMEs are being disproportionately mauled by lockdown measures, they have a far greater propensity to spend it, if only to make payroll. As Russell puts it, “Money so disbursed by the government on such terms is like hot gravy, delicious when consumed quickly, and not to be left to congeal.”

So in the US we have had – until very recently – highly expansionary fiscal policy, a highly expansionary Fed, and broad money growth at the highest level ever recorded in peace time. In Europe, broad money in the Euro zone was – until very recently –  growing at double digit rates, a level briefly exceeded in 2007, but otherwise not sustainably exceeded since 1982, when the Euro itself was not even a pipe dream. (As for the UK under the Johnson administration’s lockdowns, the phrase “basket case” springs to mind, with GDP likely to continue to wither on the vine while government spending goes through the roof. In terms of business survival, we like the Darwinian phrase “get big, get niche or get out”.)

The “necessary” costs of lockdown such as job support programmes were high enough. The ‘black economy’ aspects of lockdown and the massive potential for related abuse have so far been largely overlooked. During lockdown, a client of ours who runs his own business sent us the following text:

“Spoke to my accountant. He told me to apply for the bounce back loan scheme even though I don’t need it.

“It took me five minutes to apply for £50,000. And it will be in my account tomorrow. It’s ridiculous.

“I’ve heard stories of people having old dormant companies applying three times on each one with plans to wind them up just before the end. The fraud must be tremendous.”

Which is always the problem when governments write cheques with other people’s money. The tragedy of the Johnson administration was that a Conservative government managed to impose upon Britain a system of Big State socialism so breath-taking in its scope, and cost, that not even Karl Marx could have imagined it in his wildest fantasies.

So, conspiracy or cock-up ? We used to think conspiracy on the part of the Chinese Communist Party which fuelled a global PsyOp back in 2020, and cock-up by those western governments that misguidedly chose to follow them. Now we suspect ‘government’ conspiracy at a global level. The enablers in the middle were the mainstream media, ghoulishly amplifying the core message of Project Fear 2.0, assisted by scientists who, as Professor Michael Levitt reminded us, have in many respects been an abject disgrace to their profession. This is not a mainstream view, because most mainstream participants in financial markets and the economy are too blinded by wanting to make money out of China to be able to see clearly the all too visible attendant risks of doing so. (For more on this theme, see for example the banks, Hollywood, and all large fund management groups.)

Modern history is replete with changes to the prevailing monetary system. In the last 100 years, investors have experienced a global gold standard, a gold exchange standard, the Bretton Woods Fixed Exchange system, a Floating Rate system and a Eurozone Fixed Rate system (the EURO). Whatever the precise nature of the successive monetary system heading our way, the mass governmental hysteria that has accompanied Coronavirus has certainly accelerated it. Already precarious state finances have been horribly impaired in the process – the UK government, for example, has decided to scrap the national rail franchise system, at a likely cost to the taxpayer of up to £12 billion. It’s symptomatic of the economic destruction wrought by the Johnson administration’s grotesque over-reaction to Coronavirus that £12 billion has now become a rounding error.

We have all been had. Perhaps you find the Chinese PsyOps theory of Coronavirus and lockdown implausible. We did, at first – probably out of a stubbornly patriotic sense that our politicians, our public sector and our mainstream media simply couldn’t be that malleable to foreign propaganda. But the facts in Michael Senger’s timeline – all of which are sourced and accredited – are indisputable. So Sir Arthur Conan Doyle, in the guise of his creation, Sherlock Holmes, gets the last word for this week:

“When you have eliminated all which is impossible, then whatever remains, however improbable, must be the truth.”

And as the money printer continues to go brrrrr, we must also ask, do you own enough gold ?

………….

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Tim Price is co-manager of the VT Price Value Portfolio and author of ‘Investing through the Looking Glass: a rational guide to irrational financial markets’. You can access a full archive of these weekly investment commentaries here. You can listen to our regular ‘State of the Markets’ podcasts, with Paul Rodriguez of ThinkTrading.com, here. Email us: info@pricevaluepartners.com.

Price Value Partners manage investment portfolios for private clients. We also manage the VT Price Value Portfolio, an unconstrained global fund investing in Benjamin Graham-style value stocks.