As the Wagner convoy rumbled northwards towards Moscow on Saturday, markets braced for turmoil. What would armed uprising in Russia do to the supply and price of oil, gas, wheat or fertiliser? Would it provoke investor flights to gold or bitcoin? But when the episode fizzled out, Monday’s prices saw little more than upticks, with natural gas traders more preoccupied by outages in Norway and FTSE action refocused on dim domestic economic prospects. Sighs of relief all round, then, and a simple conclusion: world markets will hail the demise of Vladimir Putin – so long as he goes slowly, of natural causes, and not before the end of the great inflation.
Money matters
‘What should I read to understand inflation?’ asks a friend. Top of my own bedside book pile is We Need To Talk About Inflation by HSBC economist Stephen D. King, who draws lessons from history to capture (according to the former Bank of England governor Mervyn King) ‘everything you wanted to know about inflation but were afraid to ask’. But I’ll also commend Inflation: Why Has It Come Back? And What Can Be Done?, a Politeia pamphlet by Tim Congdon (formerly of this parish) reasserting the importance, apparently forgotten by the Bank, of ‘the quantity of money’. Current price spikes undoubtedly have something to do with Brexit, Covid and Putin; but let’s also recall the wisdom of Milton Friedman: ‘Inflation is always and everywhere a monetary phenomenon, in the sense that it … can be produced only by a more rapid increase in the quantity of money than in output.’
House arrest
What news of Dr Mike Lynch? In April the founder of the Cambridge-based software firm Autonomy, once a great hope of UK tech, lost his fight against extradition to the US to face fraud charges over the $11 billion takeover of his company by Hewlett-Packard.
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