By Michael Every of Rabobank
The Dove From Above
Back in the mid-1990s when irony was still a thing, British TV had a popular celebrity gameshow called Shooting Stars hosted by comedians Vic Reeves and Bob Mortimer. It was filled with slapstick, surreal, anarchic humor, and while it appeared to stick to standard gameshow conventions, everything was actually arbitrary: rules could be made up or ignored as and when Vic and Bob felt like it. For example, there would sometimes be a random "Maverick Round", where a celebrity guest would have to stand centre stage and represent something "via the medium of dance", or "The gift of the air guitar". A regular center-piece, however, was "The Dove from Above" - a large, poorly-constructed prop bearing six key words for further questions that had to be “coo”-ed down by the guests as part of a silly ritual. If a contestant answered a Dove question incorrectly, Vic shouted "UVAVU" and pulled a silly face in close up; and if they chose correctly, Vic pulled a different silly face and yelled "ERANU". Like I said, it was a big hit at the time.
This may all seem irrelevant in the irony-free 2020s, but I can’t help but think that anarchic surrealism does a far better job of capturing current reality than the po-faced, analysis-lite commentary I see around me. Indeed, this morning all I see are glowing reports of how Fed Chair Powell appeared before a celebrity panel in the US Congress, acted as “The Dove From Above”.
After shifting its dot-plot forward by a year, and several FOMC members talking about bubbles, tapering, and loss of dollar reserve currency status, Powell was as dovish as they come. Yes, inflation had been much stronger than he had expected – but it is still transitory. Yes, it may prove more persistent than he had expected – but it is still transitory. As Bloomberg (berg berg berg!) summarises it, “The Fed is nowhere near to raising rates”; and to quote Powell himself, the Fed “will wait for actual evidence of actual inflation or other imbalances before tightening”. Because what we have now isn’t actual inflation?
We agree the balance of risks is that actual present inflation *is* transitory, albeit very painful and disruptive - unless/until fiscal policy or supply chains shift. But both of these ideas are still floating around the stage like a celebrity guest waiting to finally express themselves via the medium of air guitar – and emanating from the White House, not left field. Neither this, nor how the Fed’s ultra-low interest rates can address deep-rooted economic injustice rather than exacerbating it via asset inflation, were addressed yesterday. Frankly, Powell might as well have answered “UVAVU” and “ERANU” at times: markets and market media would still have given it rave reviews provided rates aren’t going up. Indeed, stocks were up; bonds were up slightly; commodities too - as China announced the scale of the sale of reserves of aluminium, copper, and zinc from its state reserves; the dollar mostly down; and that surreal, anarchic Shooting Star Bitcoin, up.
Of course, a more ironic lens is needed for the world in general nowadays. The EU probably wouldn’t allow a follow-up to Shooting Stars to be shown on TV because it’s too British. One can imagine there will soon be a black market in such things: “Have you got any ‘Fools and Horses’?”; “No, but I do have some ‘Top Gear’.“
That is presuming the UK is capable of any irony itself, which is questionable when you see that this Friday, the government wants every schoolchild to sing a song called “Strong Britain” as part of a new One Britain One Nation day. The lyrics, sung by a children’s choir similar to that which brought us “There’s no-one quite like Grandma” go like this:
“We are Britain, and we have one dream. To unite all people in one great team. Strong Britain, Great Nation; Strong Britain, Great Nation; Strong Britain, Na-a-ation.”
Really. I am not joking - sadly.
The UK can do these kind of unifying musical events extremely well. I recall *everyone* singing “Football’s Coming Home” in 1996, and “Hey Jude” along with Paul McCartney for the Queen’s Golden Jubilee in 2002, and actually meaning it. Yet with the Chancellor and PM at apparent loggerheads over the need for austerity, one wonders if a child chorus of cloying, jingoist elevator muzak is really going to be the soundtrack to a successful ‘Levelling Up’ and ‘Building Back Better’ that brings together as one team in a Great Nation. As the UK press is still just about capable of pointing out, this 2021 musical iteration is both rubbish and worryingly North Korean.
Wherein, on the back of international criticism over human rights, even from Canada’s Prime Minister Trudeau, China’s Global Times has printed a withering rebuttal including that: “Chinese people do not buy into the forces that are "fighting" for our human rights. The only thing we want to say is: please stay away from China and the Chinese people.” Which will be a lot easier in practical terms now China plans to keep pandemic border restrictions in place for at least another year amid fears over the emergence of new variants and a calendar of sensitive events, according to the Wall Street Journal. A related survey of 121 China-focused professionals (scholars, journalists, former diplomats, and civil society workers) by ChinaFile showed only 27% stating they would definitely return once border controls are lifted – with qualifications such as being on official passports, as part of delegations affiliated with prominent institutions, or at the invitation of a Chinese government-affiliated institution; 17% said probably; 22% said definitely not; 18% said probably not; and 16% were unsure. We await the equivalent survey for the UK.
On Covid, Israel, which used Pfizer vaccines, and had only last week removed indoor mask mandates, has now reinstituted them, and is asking its citizens not to go abroad over concerns the Delta variant is surging. By contrast, the musical UK, with a far larger Delta variant spike, is apparently preparing to allow everyone to travel internationally from August; and Thailand, where Covid variants are also spreading, is opening up to tourism from 1 July (in Phuket) and nationally from October. Academic Bret Weinstein has meanwhile found a new platform for his podcast, currently touching on many things Covid-related, outside of the embrace of all-knowing YouTube.
At some point, someone is going to make an epic black comedy about the real-life Shooting Stars that is the 2020s.