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709: UK Economic Collapse Begins

UK Economic Collapse Begins

It’s so predictable – we all knew what would happen when Labour got in. Only 20% of the population voted for them, only 33% of voters – so 67% didn’t want these people managing the economy. It’s full pivot now. These reasons are obvious why the economic collapse has began:

Electricity prices are six times higher than they are in the USA – a key competitor – and 40% higher than the rest of mainland Europe

Ed Milliband’s net zero mantra will lead to at least a doubling of electricity prices in the next four years – as expensive and unreliable wind and solar power put a huge strain on the national grid

A massive brain drain is occurring – highly educated wealthy people are leaving the UK in droves and meanwhile

650,000 largely poorly educated immigrants are flooding into the UK each year

150,000 illegal immigrant young men are entering each year under the banner of “asylum seekers” mainly from North Africa, Albania and the Middle East – mainly poorly educated and non English speaking that suck from the economy rather than contribute to it

Vast areas of the UK now have a majority of Muslim – example are Bradford, Newham in East London, Hansworth in Birmingham, Hanwell in West London, north Leicester, Holbrock in Leeds, Bury to name but a few.

An aging population with many salaries staff and high tax paying employees retiring – not being replaced. These elderly people will put a huge strain on the national health service in the next 10-20 years – which will be close to collapse as financial pressures build. The National Health service need reform to improve efficiency, increase the use of AI/analytics, reduce the bureaucrats and increase front line nurses and doctors.

The UK will 100% be left out of the AI revolution because datacentres cant afford to be located in the UK because of prohibitively high energy prices

The UK will 100% be left out of the robotics revolution within manufacturing because it makes no sense to set up robots and manufacturing in the UK because of prohibitively high electricity prices

The UK is being left behind from the Cryptocurrency and Bitcoin revolution – Web 3 – or in other words - the financialization of the internet – because electricity prices are prohibitively high, Labour are clueless when it comes to Bitcoin and they are implemented ant-Bitcoin regulations to stifle innovation in this sector

Just as the socialist Democrats were dumped out of power by Trump and the business friendly Republicans – we int eh UK got an anti-business Labour party to mis-manage our economy. Because the USA is a key competitor and also trading partner – the destruction of the Anglo-American alliance from the Elon Musk rhetoric and mistrust of the two parties – means there will be a massive pivot to investing in the US economy and away from the UK economy in the next four years. The US electricity prices will fall as they expanding their oil and gas production – and we will be importing more US LNG gas to make up the shortfall after a full scale tax onslaught has killed off oil and gas investment in the UK sector of the North Sea.

Rachel Reeves vindictive scrapping of the Non-Dom status means the UK is not longer a tax haven for the super rich – meaning they will leave in drove – putting further pressure on Sterling and dramatically reducing the GDP of London and the financial and services sectors.
Labour are taxing the private sector through punitive national insurance increases for employees – who will have no option but to make people redundant and freeze hiring. Meanwhile Labour will of course expanding the public sector that spend money – so the books will no longer balance, so she will be forced to increase taxes further – then the vicious spiral will gain momentum.

The Labour treatment of farmers is appalling – the severe mental stress of having to plan land sales and not being about to hand farms to son/daughters is something almost unimaginable. Farmers have until April 2026 to do something about it – a ticking timebomb. Already farmers have the highest incidence of suicide out of any profession – and Labour have just dump another massive burden on these hard working families that toil outside in all weathers to put food on our tables. It’s disgraceful their treatment.

Yield will rise, mortgage costs will rise, the currency will crash and inflation will skyrocket. Eventually there will be a bank run – people will panic and try and get their money out the banks – a “bank holiday” will have to be announced to prevent everyone getting their savings out. The Bank of England will be forced to intervene to inject gigantic quantities of printed Sterling – which will then lead to hyper-inflation. It’s just a question of how closely things get to what happened in the once prosperous Argentina and Venezuela. It always happens – when socialists get into power – they spend too much on the public sector and tax the hell out of the private sector – this always leads to higher unemployment, higher inflation, and a crashing of the currency value and GDP – a depression. This will be the end outcome of the Labour government in 3-4 years time.

The property prices have already started dropping – people know that mortgage rates will have to rise – and panic will start in the property market soon. Rent will rise sharply as people who cant afford high food, electricity and mortgage prices – panic sell and try and rent a property instead.

The increasing regulations and threat of imprisonment for Landlord that are at fault – will mean buy-to-let landlord try and get out of the business – putting further upwards pressure on rents.

The only businesses we can think of that will prosper in these times are:

• Insolvency legal and business advice services
• Pawn shops
• Container storage – for people having to rapidly downsize
• Rubbish and low cost furniture removals from repossessions and their resale
Our prediction is that all car manufacturing plants in the UK will close by the end of Labour’s tenure. They simply wont be able to afford the skyrocketing electricity prices – and will move overseas.

Its worth pointing out though – that Tesla (luxury electric cars) and BYD (lower end electric cars) will take over the world’s car manufacturing in the next 4 years – so the likes of Ford, VW, Citroen, Renault, Nissan, Volvo and Audi – and possibly also BMW and Mercedes will go broke. These reason is simply – they cant compete against Tesla and the Chinese EV car manufactures. Their cost base is simply too high, and their technology is 7 years behind Tesla’s and they lose money on each car. Its simply unsustainable. When Tesla launch their robots into manufacturing next year – their cost base will drop even further. No-one will want ICE cars in 4 years time. It’s very predictable. This will out a massive strain on the German, UK and French economies – with the UK the weakest because of it’s lack of productivity growth and sky high electricity prices. We repeat – ALL car manufacturing plants will close in the UK under this Labour government.

As you can see – we are not confident about the UK economy with Labour in power. They have a huge majority, they cannot be shifted. We are all in this for the long haul – a four year period – and by the end – it will be mayhem.

For all those young investors – looks to move overseas to start a family – try and get to countries like USA, Canada, Australia and New Zealand. Norway is also a good option. These will be western the countries that will prosper in the next four years – with their low energy prices, oil/gas resources, mining and fairly efficient manufacturing. The UK will be the stick man of the western world – with 100% certainty.

Overall – for investors – get out of the Pound Sterling and into the US dollar. But Tesla shares using a US trading account. Try and keep as many asset in the US dollar rather than Pound Sterling. If you own UK property, try and reduce your borrowing as much as possible because mortgage rates could sky-rocket in 2025 – to unimaginable levels in a vein attempt to defend the currency. But one thing is for certain – inflation will jump far higher as Labour lose control.

We hope this Special Report has been enlightening – and helpful in framing your investment strategies. It’s not easy being so down-beat – you can look back and see how positive we once were. It’s just the writing is on the wall – and our predictions are normally – regrettably in this case - accurate.

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