The Broke Chimp’s Guide To The Global Economic Meltdown

Going ape over the spiralling cost of living? Money tighter than a gorilla’s fist? FHM cuts through all the monkey business to uncover what the worldwide mega-recession really means for you.

Pricey petrol madness

Broke Chimp asks: “I can barely afford to fill up the Chimpmobile. Are petrol prices going to keep getting higher and higher?”

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“Prices will get higher,” says Paul Barrett, a financial expert who works for an international brokerage firm, “but they won’t go massively higher. Although if there’s any instability in Iran [one of the world’s largest oil producers] then they’ll go a little bit higher still.” If you’re finding filling your car brutally pricey right now, it’s not solely the fault of fighty Middle Eastern dictators and globalrecession-causing bankers. “When oil prices come down, garages are really slow to pass on the reductions,” says Paul, “but they’re very quick to put them up. That’s the problem.” Curse you, Bharat Petrol/HP/BP/etc.

However, us Indians are unlikely to start abandoning our cars by the side of the road. Financial experts don’t think there’s such a thing as it becoming too expensive to run a car. It’s like cigarettes: they’re a lot more expensive than earlier, but people keep smoking. So people will keep paying for petrol. They might reduce the use of their car a bit, but there are more vehicles on the road every single year. Train fares are also going up, so it’s not like there’s a cheaper alternative. People will always find a way to pay for it.

In other words: Petrol ain’t gonna be getting cheaper anytime soon. But until they invent a car that runs on discarded banana skins, our chimp friend here will have to just grin ’n’ bear it.

Expensive food meltdown

Broke Chimp asks: “Food seems insanely pricey – I can barely keep myself in bananas. will there come a point when my big shop becomes unaffordable?”

“I don’t think so,” says financial expert Paul Barrett. “One of the main reasons that food has got more expensive is because of the spiralling costs of transporting items around the world – and again, that’s down to fuel prices.”

Plus, all the crazy weather we’ve had over the last couple of years hasn’t helped. There have been a few floods and famines around that have lead to bad crops, so that’s pushed prices even higher.

However, unless you’ve got a taste for olives, brocolli and ice lettuce, food prices should stay just about bearable for the average Indian chimp. “A chocolate bar costing ` 100 is outrageous, but everyone will still buy one every now and then. Nothing will become really outrageously expensive. You won’t need a wheelbarrow full of money to go to the supermarket.”

In other words: Bananas are expensive because petrol is expensive. Basically, almost everything is the fault of pesky, pricey petrol…

University: yay or nay?

Broke Chimp asks: “I’ve been thinking about going to university to earn myself a degree in Advanced Monkey Business Studies. Is it still worth all that time and expense?”

With the cost of university (tuition fees, rent, vodka etc) now going up and the education loans becoming hard to repay because of the poor recruitment scenario, many a young man/chimp is choosing to side-step higher education all together in favour of working his way up the career ladder from the bottom. And with over 60 lakh graduates jobless in India, university courses are looking far less enticing than they have in a long while. “University is not a guarantee of a good career anymore, but you should go if you can afford it. After all, you only have to start paying it back when you’re earning enough.”

Says Paul, “There have been complaints about fewer and fewer people going to university, but when I went, there were so many people who were just pissing around, getting drunk, quitting one course, starting another one… They shouldn’t have been there, so maybe the increased expense will stop those sorts of people signing up. If people are determined to go, then people will go, and should go.”

“Look at how expensive it is in America,” says Paul – and with US degrees regularly costing in excess of £90,000, he’s not wrong. “We’re still very lucky here.”

In other words: If you really wanna go, then go. But don’t wind up skiving all your lectures – you’ll probably still be paying your debts off 10 years down the line, so you may as well get your money’s worth.

Wages ain’t working

Broke Chimp asks: “If everything’s getting more expensive, why haven’t my wages gone up? How come I’m not more expensive than I was three years ago?”

Brace yourself, Mr Chimp – the answer ain’t very comforting. We’re in a recession. Companies tighten belts, and what they can’t do is pay more money. We – the workers – are a commodity that isn’t needed. Fuel is needed, and that’s why its price goes higher. But individuals aren’t needed. If you’re after a pay rise, they can just find someone else to do your job for five grand cheaper. That’s the ugly truth of it.

In other words: While the cost of jungle vines may keep rising, the wages you receive for swinging on them have pretty much flatlined – for now, at least.

Escaping the rent trap

Broke Chimp asks: “I’ve been renting the same tiny hut with my flatmates Jane and Tarzan for ages. Will I ever be able to clamber onto the property ladder?”

For many, the idea of owning a property seems like a madman’s dream – mainly because property prices have never become affordable. It’s virtually impossible! You could try moving back in with your parents. I know it sucks, but that’s the most logical thing you can do at the moment.

Yes, attempts are being made to support new buyers, but their chances of getting onto the housing ladder depend on the strength of economic recovery. A strong recovery will increase wages – making it easier to save a deposit – and encourage the banks to lend to first-time buyers. But if the crisis drags on we may see a whole generation shifting away from ownership towards lifelong renting.

In other words: Be prepared to keep on renting.

Go get that cash

Broke Chimp asks: “Sod the recession – I want to make money. How can I do that when the economy’s rougher than my girlfriend’s attitude?”

There’s not really any easy money around, but a recession is a very good time to start your own business – if you’ve been made redundant, maybe now is the time. Out of the 30 of the biggest companies in the world, 16 were created in different periods of recession. Microsoft, for example, was formed in the 1975 recession.

Look at it this way: there may be less money flying around, but that also means that you’ll be able to splash less cash to get your business up and running. It’s cheap to set something up right now. People are cheaper to hire, offices are cheaper to rent. Not everything is more expensive. You can get good deals on office space and equipment.

Alternatively, get yourself trained up in one of the ‘essential industries’. Medicine, for example, is always essential. Similarly education because no matter what people will continue to provide quality education to their kids. It doesn’t cost a bomb to start a pre-school for the kids in your colony. Also, no matter how dumb a student you were, you will be able to teach the nursery kids.

In other words: If you’ve long been daydreaming about setting up your own banana-delivery/ tea-party-catering business, then – believe it or not – now is the time to do it.

Shrinking chocolate travesty

Broke Chimp asks: “After a hard day picking flies off my mate’s back, I like to relax with a cup of tea and a Dairy Milk. But has my fave choc bar been steadily shrinking?”

Nope, you’re not imagining it – they’ve shrunk from 140g to 120g. The smaller Dairy Milks were introduced by Cadbury in 2011, as a direct result of rising global food prices. By the beginning of 2010, cocoa prices were more than double what they were in 2007; Cadbury announced that the only way of avoiding a dramatic increase in the price of the bar was to decrease its weight. So although Dairy Milks are 15% smaller than they used to be, with one of the main ingredients now costing 100% more than it did five years ago, you’re sort of getting a good bargain.

In other words: Yes, they’ve shrunk – but if they’d remained the same, the price of Dairy Milks would have increased so much that a pint would have come cheaper.

Bargain Eurozone holidays

Broke Chimp asks: “I need a holiday or I’m gonna go apeshit. Trouble is, I’m broke. Greece’s economy is on the blink – does that make it a supercheap getaway option right now?”

Well, there’s good news, and there’s bad news. Let’s do the bad news first. It’s not a cheap time to go anywhere because flights are so expensive, and that’s down to the oil prices again, and the taxes. The good news: When you get to Greece, it will be pretty cheap. But if Greece leaves the Euro and takes back the Drachma, their currency will be massively undervalued, and then things will be really cheap there.

Aside from flights now costing a chimparm and a chimp-leg, Europe in general now makes for a relatively low-cost holiday destination. Effectively, it’s about 20% cheaper for us now to go to somewhere with the Eurozone than it was three years ago. But, the savings will vary depending on how economically knackered your host country is: A beer will be about 20% cheaper in Germany than it was three years ago, but if you go to Greece it might be more like 25% cheaper.

However, if the Euro totally collapses as a currency, that doesn’t mean that Europe becomes one big cut-price holiday theme park for us Indians.

In other words: Yes, Greece is a bargain holiday option right now – provided you travel there on a homemade raft.

Blame the bankers

Broke Chimp asks: “Is this entire shitstorm the fault of the bankers? Should I throw a custard pie at every pinstripe-suited moneyman I spot in the street?”

“It’s easy to blame the bankers for this mess,” admits the London School of Economics’ Niall Kishtainy. “Their excessive risk-taking is what kicked off the crisis. Like all businesses, banks are motivated by the pursuit of profit – what some people would describe as greed. At its best, profit-making – or ‘greediness’ – propels innovation and generates new jobs. But at its worst, profitmaking can be extremely harmful.

“Much of the economic meltdown happened because the regulation of financial markets had become very slack after decades of loosening by successive governments. So although the bankers may have pulled the trigger, others gave them the gun: creditrating agencies, regulators, and governments.”

And if we’re honest, the free-and-easy economic environment suited us all very nicely for a while, as we clamoured for bigger loans, easier mortgages, and more and more credit cards.

In other words: Yes, it’s mostly the fault of the dirty bankers. However, it’s also sort of the government’s fault, and also sort of our fault. But mostly, it’s the bankers.

Photography: Danny North.

From the November 2012 issue of FHM India.