Is the UK heading towards a race/civil war? Part 2 (Post with Contrarian Capitalist and Uranium Investor)
This part looks at jails, natural resources (especially Natural Gas) and 4 ways to protect yourself and your family moving forwards.
We don’t aim for this post to focus on who is right and who is wrong, we aim for this post to be purely about predicting whether a civil war would occur for the purposes of investing/finance/economics and ideally as apolitical as possible.
As per Part 1, we would like to especially thank
, (thank you for pointing out and correcting a couple of numbers from Part 1) and for inspiring us to produce this 2-part series.We hope that you enjoy reading this and please do share this with your social networks.
For part 1 looked at:
Immigration, Religion and Race
Thucydides trap and its effects
In Part 2 (this part) we will focus on:
Jail Shortages
Natural Gas shortages (and a snapshot of other energy challenges)
4 potential ways to protect yourself from the coming chaos
Summary
If you are seeing this post through Uranium investor’s Substack, then you may have noticed there are already two posts talking about the gas shortages that were previously predicted by him.
In this post we will talk about how more recent events change what is going on with the gas shortages. Please do go and read the Uranium investor’s previous posts about gas shortages.
Jail Shortages
The UK has a shortage of jails relative to amount of people that need to be in jail at the moment. This is a problem which is guaranteed to get worse over time.
Jails take a long time to get built and so we can’t “just build more jails.” That’s like trying to bring a new mine into production quickly! It’s just not going to happen.
What the UK is currently doing is releasing people who committed minor offences early and moving people who commit more major offences into jails for people who committed minor offences.
We know that the amount of people expected to be in jails will likely increase over time. The National Audit Office expects that there will be a shortfall of 12,400 places by the end of 2027 and the government expects a shortfall of 9,500 places by early 2028.
What is important to note is that these estimates don’t take into account reoffending rates of 37.2%.
With schemes such as the early release of prisoners who committed less serious crimes, this eases some pressure. But we will still see a shortage of spaces for maybe 1000 - 2000 prisoners by March 2026.
This will likely lead to an automatic early release being extended from 40% to maybe 50% or 60%. With more prisoners being released early it is likely that crime soars.
Especially shoplifting and pickpocketing which has already jumped up massively last year. Shoplifting up 20% in 2024 and pickpocketing up 50% in 2024.
We think that the people will not stand for it and that we will see a rise is vigilantism, which is also not taken into account in the jail shortage estimates.
There is also a risk of conflict between immigrant communities that are more likely to go to jail, in comparison to others and this conflict being between those communities and native British population.
We think we can easily expect to see shoplifting and pickpocketing go up over 100% by the end of winter and a complete breakdown of law and order no matter how the government decides to respond.
They basically have three options for how to respond.
1 - Death penalty
2 - Focusing on completely ending some victimless crimes.
3 - Reducing jail times eventually for even slightly more big crimes.
Death Penalty
We think this is unlikely to happen. Most politicians in the UK do not support it and are not even entertaining the idea.
The only major political figure with really big influence supporting it is Rupert Lowe, but he only influences the more right-wing faction out of the most right-wing party (out of the three vying for power in the next elections.)
Decriminalising some victimless crimes v reducing sentence times for lots of crimes
The main one example we are thinking of here is to decriminalise drugs. Easier said than done but hear us out.
We don’t want to get into is this a good or bad idea but what we do know is that roughly half of the public likely supports the decriminalisation during normal circumstances.
This means that during a jail shortage the amount of support likely increases and the odds of it becoming a law at least, temporarily, are high.
Decriminalising some victimless crimes like drug use will lead to some spike in crime since many people under the influence of drugs do also commit other crimes, the question is will this be less harmful than releasing other prisoners early?
We have also seen a few people get put in jail for ‘tweeting’. There are countless of petty examples out there and this is what happens when the police state gets involved because they are under the thumbs of big government.
Why jail shortages might or might not lead to a civil war?
The jail shortages will likely lead to a huge surge in crime and people will want to protect their own group risking a civil war between rival groups, on the other hand, there are ways to make sure crime doesn’t increase as much particularly if the death penalty is issued.
Again, we think that the reintroduction of such a thing will not happen!
Natural gas shortages
We have both spoken ad nauseum about the challenges facing the UK and its energy policies. That the UK is focused much more or net zero while simultaneously being somewhat anti-nuclear energy (although the last part is changing), this comes at the expense of energy stability and could risk gas shortages in the winter.
As the above image shows, we do know that the UK has access to huge amounts of natural gas. Used properly, then the UK could actually become a net exporter of natural gas if it decided to ditch net zero.
The main 2 reasons why the current government won’t go drilling into this natural resource are net zero and also a ‘dislike’ of fracking.
As a result of this, Britain continues to pay a lot of cash for its importing of Natural Gas.
Gas storage levels continue to be much lower than they should be and that the recent conflict between Iran and Israel is likely to cause the gas shortages to get much worse moving forwards.
The “rough” gas storage facility which has half of the UK’s gas storage capacity is 8% full, which is the worst it’s been in several years and maybe even ever at this time of the year.
This represents less than one day of gas consumption meaning if there is any cold weather causing demand to rise, the UK is completely screwed.
This is likely to happen if La Niña (42% chance of occurring next winter in the UK) occurs in the UK. In short, the UK is headed towards a situation where we start off with low gas storage levels and we also have a higher-than-average demand for gas in the winter.
However, it gets worse!
The “Rough” gas storage facility is owned by a company called Centrica. Their entire business model is to buy gas in the summer when it is cheap, store it, and then sell it in the winter when it is expensive.
They arbitrage the summer-winter spread for Natural Gas in the UK. What is important to note is that they will only arbitrage gas if they get a good enough spread, this is likely 20p/thm-25p/thm.
The current spreads are at about 11p/thm. In other words, they are not buying despite them generally buying around now.
The spreads between current and futures prices are likely to be reduced over time. We could even see backwardation.
The reason for this is the escalation in the Iran-Israel war, which is the biggest escalation in decades and means the market expects there to be a 39% chance Iran closes the Strait of Hormuz (where 20% of LNG flows through) and a 62% chance of US military action against Iran before July.
If this happens SPOT oil prices will soar, possibly all the way to $130, just like in 2022 when things kicked off between Russia and Ukraine.
Futures might not rise as much, especially if they expect it to only last a little while.
Please do bear in mind that approximately 83% of Iran’s oil exports goes through the Strait of Hormuz and goes to China. Iran closing the Strait would be a catastrophic error but is a political card that is potentially on the table!
I would highly recommend you listen to the recent podcast with Dr Anas Alhajji, an expert on oil, gas and middle east relations.
Dr Anas Alhajji - Iran will NOT close the Strait of Hormuz
Today’s guest is Dr Anas Alhajji of Energy Outlook Advisors' Newsletter and the Daily Energy Report . Dr Anas Alhajji writes about energy markets outlooks, energy policy, and the impact of disruptive technologies on energy markets. He is the Managing Partner at Energy Outlook Advisors.
Back to Centrica and the low spreads give them less time to refill their Nat Gas supplies in the summer.
Timing is a really big problem as Centrica likely has a 0.3% injection rate/day taking into account the current maintenance and inspection going on and around 0.45% if these were not going on.
This means if the Iran-Israel war (or any other major conflict for that matter) causes decreased spreads for just 20 days, then we could see that 6% of gas storage does not get filled. Refilling season only lasts until the end of September to mid-October.
Meaning not much gas can be refilled anyway even if spreads suddenly became favourable. Of course the Iran-Israel conflict can also just lead to higher gas prices in winter caused by the conflict continuing in winter and the potential closure of the Strait of Hormuz. Unlikely but never say never.
If people have to continue to pay higher prices for their gas, especially when there is a very good alternative sat under the feet of the wonderful people of Lincolnshire, then this could lead to more fuel poverty and civil unrest.
It is not just gas that has an issue. Electric prices are sky high (again, poor energy policy from both previous and the current government), oil could go much higher as we have just discussed and basic economics says that when supply for something is cut (and demand remains the same or increases) then prices have to go up.
The ensuing poverty could literally be the difference between life and death for some people.
When people have their backs against the wall then they will enter fight or flight mode! This could turn the people against each other (poverty and hunger) or indeed against the government.
Why it may not lead to civil war
Centrica wants a “cap and floor” model in order to promote them purchasing gas earlier. The government is considering it and open to the idea.
Of course, in true government speak, they are just trying to make sure that it is the average person’s interest (a bit like digital ID’s).
This “cap and floor” model means they (and their customers) will always be able to have certainty. It seems like a reasonable idea but that depends on the specifics of the floor and ceiling.
It is also possible governments may seek to remove the inspections and maintenance or reduce them aggressively to allow Centrica to purchase at 0.45%/day injection rate instead of 0.3% for the “rough” facility.
We don’t believe this is likely. Overall, we think the gas shortages (and energy shortages in general) are definitely a huge factor if the civil war occurs.
4 ways to protect yourself (and profit)
It is imperative to note that we are not financial advisors. This section is not to be constituted as financial advice. You must always do your own homework and research before making your own financial decisions.
By now you probably know that we believe that a civil war is likely. Such an event will then lead to higher deficit spending (due to increased spending on policing etc) and also spending on placating both sides within the civil war i.e. more spending on both guns and butter so to speak.
In short, a civil war occurring will likely be very good for energy investments and excellent for inflation hedges and things that help you to get out of the financial system!
In terms of investments that will do well if the country is headed towards collapse, we have a few different investment ideas.
1 - Energy
The first investment is energy, particularly natural gas and uranium. Natural gas is likely to benefit as it is the thing which has a huge reason for the civil war occurring in the first place, and uranium because an energy shortage is likely to lead to the people wanting to focus on fixing the energy crisis.
We think they will look to do this preferably in a way that is a green energy source, nuclear energy is the only reliable, baseload energy source that is green and so we expect there to be huge new builds, life extensions and restarts of nuclear reactors (all leading to an increase in uranium demand.)
There are a lot of Uranium stocks out there. Yellow Cake PLC is the only UK based pure Uranium play in existence in existence at the moment other than SPUT which acts a little different.
Subscribe to Uranium investor to know more about uranium as things linked to that are his specialty.
2 - Physical bullion
Gold and Silver (and to an extent Platinum) will help to protect you from a financial collapse. Gold and Silver are true money. Silver does act like an industrial metal nowadays but has been used in more financial systems over the centuries than Gold has.
Gold and Silver will both help to protect your purchasing power.
Gold is the ultimate safe haven.
Platinum is on the list because it is severely undervalued in comparison to gold at the moment. You can read a deep dive into Platinum here.
We recommend that you read the GSR (Gold Silver Ratio and Platinum to Gold ratio) article by The Contrarian Capitalist.
We also wrote and spoke about the Silver Bull Thesis here.
3 - Bitcoin
If you want to get out of the system and be borderless, then Bitcoin has many similar qualities to gold. Bitcoin could have the most potential in the next 5-6 years as per this chart from the In Gold We Trust Report (the graph below comes from page 380 of the full report).
Assuming Gold reaches $5,000 by the end of 2030, then market caps would indicate that Bitcoin has the potential to reach circa $925,000, an 8.5 x increase from where it stands at the moment.
We discussed the overall gold/silver/bitcoin thesis in a recent audio & written piece. You can read/listen to that here.
4 - Plan B (Get a 2nd residency/citizenship)
There are so many residency options worldwide and some are probably a lot easier to obtain than you think. Paraguay is very easy at the time of writing. Mexico is also quite straightforward, but they continue to increase the amount that you must show that you earn.
You can look at temporary or even permanent residency options. Some countries will even allow you to do a citizenship by investment i.e. Invest a certain amount into a business/property and you will get a residency/citizenship as a result.
One of the most straight forward ways is if you have some form of ancestry from another country? I.e. think parents, grandparents etc.
If this is in your family tree then it is worth exploring.
Maybe you have a boyfriend/girlfriend from another country? Get married and that could be your way in. I make that sound simpler than it is but you get the idea.
Maybe you don’t want to move? Maybe you want to stay and fight? If so, then we admire you for that. You have to do what you think is best for you.
Ultimately, we are here to guide and help where we can.
Plan B should be considered and is a way to protect yourself and your family from what is coming down the road!
If you have any Plan B questions, then please send
a direct message.
Summary
Britain is undergoing a transformation at the moment. The demographics are changing. They are pretty much at the point of no return.
The Thucydides trap has a decent chance of causing a race/civil war, in some ways it is getting better in other ways it is getting worse however, this is mostly something more long term.
Jail shortages are manageable for now, especially considering only those committing smaller offences are likely released (and then are likely to recommit similar offences), thus exacerbating the situation.
The Natural Gas shortages (and high energy prices in general) are likely the main problem as this level of fuel poverty will be the difference between life and death for some people and this could create a tipping point.
If we put all 3 together then the odds of some sort of race/civil war are likely. The winter months bring out the worst in people and it would not surprise us to see something happen this year.
We don’t want anything to happen in seriousness, but we have to be realistic, and tensions are well and truly bubbling under the surface.
The 2029 General Election could be the make and/or break of Britain.
We hope that you have gained something from reading this post.
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