Jerry_Atrick

That's OK.. In short, the policies he is implementing could work for a while, but they way he is implementing them is likely to come back and bite the US a loq quicker...

Back to topic... Money, represented by currency, is defined as a store of value which can be readily exchanged - more or less. In the official currency makets, differernt currencies are generally those that are the official sovereign currencies, plus in their own right, gold (XAU), silver (XAG), platinum (XPT), and now bitcoin (BTC). The gold standard (or any other standard) was a way to manage supply of the currency. For all practical purposes, you couldn't and wouldn't on a daily basis walk to the RBA, BoE, or Fed and say can you please provide me with $100 (£100) of bullion and they would cough it up or allocate your name to the sliver you would be entitled to. Whilst the economic doomsdayers predict the Fiat currencies will be the harbinger of economic malaise. This is not true. First, whether or not a currency is backed by anything, for it to be recorded in a ledger somewhere, there has to be one of two things - the actual stock (physical, or in the case of Bitcoin, electronic) stock, or a promissory note (i.e. debt for it). A gold backed dollar doesn't suddenly increase the gold backing it because it has been lent out. If a dollar is lent out once, there will be an entry for that $ of the liabilities side of one person's balance sheet and the asset side of the others.. but that dollar will now have been used twice. If it is gold backed, they don't add another 1/3000th of an ounce to now back both of those economic instances of the one dollar. But the dollar must exist once, and it must be held as debt once. There are two values of a currency - the value compared to other currencies, and its pure domestic value. Of course, these days where international trade is by far most prevalent, the first value weighs heavily on the second value. But if you think about it, except for setting prices of goods imported or imported factors of production(e.g. machines, software, etc) that contribute to the cost of locally made stuff, most Australians only worry about the value of what the Aussie dollar buys them.. they don't think about it in terms of, weill, this covnerted to USD or GBP or XAU is how to value what they are buying. Currency markets are now so well established, and the currencies traded are measurable, supply is controlled, and can be usually readily exchanged. A few years ago, when we were doing conduct risk for high frequency, low latency FX trading, the markets were functioning so well, that trying to profit from say the difference between the value of GBPUSD, to USDAUD, by targeting the GBPAUD pair (so trying to profit from any difference in comparative rates) was nigh on impossible. The rates triangulated almost perfectly all the time and the window in which they weren't was so tiny, unless you were willing to bet the house on it, it would cost you more in electricity than you would make. The FX market is the largest volume traded daily in the world - it is about $2 trillion a day more than derivatives, and probably half of the derivatives markets are in FX underlying products. So, the true market in FX is a lot bigger than say interest rate derivatives. An exchange rate is both the measure of the demand v supply of that currency pair, referenced to the $USD. That demand is based on the curent economic situation and outlook using well established statiscal measures weighted by things such as transparency, perceived accuracy, and level of compliance with the rule of law. Ultimately, this includes the capital structure of the soveriegn part of the economuy and the ability of the economy to service its debts and grow wealth/GDP. Some currencies are valued so lowly as to effectively be excluded from the markets. The monetary value that is ascribed to something is entirely arbitrary - well, maybe except for the staples. That V12 e Type convertible Jag would be worth something like £15,000 to me, bit to others, it is worth more than 10 times that. But, I would happily pay $150K for an XC Ford Cobra as it had that much more value to me (nostalgia is the worlds most expensive commodity). I see an unrestored one went on australianmusclecars.com.au for $339K.. slightly north of my £150K at current rates@ https://australianmusclecarsales.com.au/cars/1978-ford-falcon-xc-cobra-build-no-322-unrestored-16-462km-6770 I know most of you would scoff at the thought of an XC Cobra being worth more than an e Type V12 convertible, but there happens to be one of the latter for sale now: https://www.pistonheads.com/buy/listing/15183690?store=616141&utm_medium=VLA_paid_search&utm_campaign=&utm_content=&gad_source=1&gad_campaignid=20960347110&gclid=Cj0KCQiAhaHMBhD2ARIsAPAU_D6tWhHvfKziGA5MzKIYDUE1cL5AYW0wKxQA7ef57RZjIo23M6vkS1gaAomDEALw_wcB (slightly cheaper than I thought it would be). I digressed.. sorry... Getting back to currencies, these days, as a store or representation of value, a currency is backed by its government, with 4 exceptions.. The currency value compared to others is based on the nations' econcomic performance and outlook and its ability to pay its debt (og, and relative interest rates, as long as it can pay its debt). Gold backing is no longer required and is a currency in its own right. However, ultimately, as with anything inclduing gold, the value ascribed is entirely arbitrary.

I can't read the article, so my response is in generic terms. In terms forward looking at the economy, to be honest, I am probably one of the last you would want an asnwer from. I am not going to get into virtue politics and try and keep this to economics. Chump is using two main levers - tariffs and stimulus, the latter being code word for increasing debt and government spending to stimulate the economy. It is sort of applying the foot brake and the throttle of a motorcycle simultaneously to get a balanced and steady result. He has fiscal policy levers; he is attempting to gain access to monetary policy levers, but let's leave that out of it for now. Economically, he seems to be using the latter to ease the pain of the former. With his political agenda of making America great again, and trying to reclaim the lost economic activity of domestic manufacturing or production, these levers can be weilded as an effective tool in achieving those aims, but only for so long. And there are existing structural issues with the US (and most major western) economies, that length of time before it comes back to bite is shortened. At the heart of it is the theory of price equilibrium (a google sesarch will give a concise but good AI explanation) It explains how prices are correlated to supply and demand. Assume the market for, I dunno, T shirts is in equilibrium - that is the price is set such that the amount of T shirts willing to be consumed by consumers is the same at which suppliers are willing to sell them. You have price equilibrium of supply and demand. If suppliers decide to increase the supply (say to become a dominant player in the market) and the demand does not change, in order to sell the higher volume of T shirts, the sellers will have to start discounting T shirts to a price where consumers are willing to buy the increased volume of T shirts. And of course, vice versa; if demand goes up and supply stays the same, consumers are willing to pay more per T Shirt for that same supply. There are other factors, such as price elastcity, lag, etc.. but let's keep it simple. According to this theory, though, one of two things will happen. If it is a permanent move one way, the price equilibrium will shift. This will usually happen where there is a constraint to one side of the equation. For example, if supply increases, but demand cannot (I dunno - the nuber od train rides one can take in a day??), and suppliers are willing to the increased supply at that price, then the price will stay there. More often what happens is there is a constraint on supply and the price forever changes for the worse (assuming no substitute goods or services are available). The other impact is that where the demand and supply if perfectly correlated (fully elastic), the increase or decrease in price will eventually lead to the supplier or consumer increasing or decreasing supply/demand accordingly which impacts the other's willingness to supply or consume at that price, and prices will eventually revert to their original equilibrium where both sides are willing to supply or consume the same volumes at that price. This is really important, because although we talk about the price of goods and services in this context, money or currency also has a price. And that price is not the exchange rate; it is the inflation rate. Inflation = a lessenign ov the value of money - it is not worth as much as it was. Deflation = increasing value of money - it is more valuable that the goods or services it is being exchanged for than it was, say yesterday. However, inflation is far more prevalent than deflation - so money is forever devaluing, right? Well, yes, and there are two reasons for it. The first is government interventions - monetary policy usually. Governments don't like inflation, because it usually results in a recession or worse. Although in theory, as prices drop, people will buy more of whatever it is, there comes a point where it is not economic for the suppliers to sell at that price. But, a quirk to the price equilibrium theory, when there is deflation, people will put off buying stuff because they know they can get it cheaper in the future. That collapse in demand leads to recessions and depressions. The second reason is simple - there is usually an increasing money supply in an economy. And where you have more of something that you want to exchange for something else that has value to you, you will offer more of that something you have. That is you will increase your supply of money in relation for the other thing you want that has had no increase in supply. The good example is the housing market. Remember when you or your parents could buy an average house in an average suburb for about 3.5 times annual salaries. Today it is something like 7 or more times salary. Why? This may sound mysoginistic, but women entring the workforce enmasse. What that did is put more moeny into to system and into purchasers hands. Supply of housing is relatively stable, especially in established areas, so what happens - you as a family with two working parents instead of one give more money to the seller as you are in competition with other buyers (demand). The net effect in real terms is both parents are now working but still no better off. So, if Chump increases tariffs, the price of the goods/services imported into America are higher and in theory, the consumer will want to buy less of them. But why do that? Because, the price at which they can be sold fom domestic manufacturers economically is higher and to try and even out demand between importers and domestic manufacturers is price (assuming quality/specification is on par). In other words, you are artifically cheapning money against imported goods. As I mentioned, assuming the quality, specification, amenity etc is simiar, responsible citizens would look to buy locally made, but at least through simple distributions, there would be a higher percentage of the domestically made product sold. Of course, there is a lag here, because where there was no manufacturing, it takes time to get it up and running. And that's where the stimulus comes in. It can be freebies to the people - as was the inflation reduction act. And some of Chump's is.. But it can also be setting the barriers to entry into the sector lower to get investment moving quicker and manufacturing churning stuff out quicker, too. That hass a knock on effect of creating employment and when there is a ready supply of labour, that will be a very good thing, because it won't increase costs (salaries) too much. Once construction is over, depending on the automation levels, there will be some permanent, sustained increase in employment over time. But now you have a lot of money now artifically entering the economy. More people are employed, which is a good thing and they can buy more stuff. Demand increases, but because there is more money in the system. Inflation is initially kept in check because there is usually some capacity in an economy to absorb short term changes in demand and supply without material impact on prices. Suppliers can supply more to meet the demand (or maybe there was already an oversupply). Everything is nice. However, once that capacity is used up, things start to change. Suppliers are now in a position where there is excess demand over normal supply volumes - the previous equilibrium price. What happens? People with more money still want the stuff and if suppliers can';t or don't want to increase the supply, they charge more. Consumers enter into comeptition with each other and pay the higher prices. You have inflation - or devaluing money.. because the money supply was increased. The money supply increase can be "natural"; i.e. a product of normal economic activity or it can be through government injection of new money - stimulus. This is usually done through a) printing money (bad - look at Germany in the 30s) or debt (less bad, and used properly as well as contained, can be very good). Either way, if done to excess, it is not sustainable, because, after all, the piper has to be paid (pied piper, not the aircraft company). Just look at quantitative easing, which was increasing the money supply.. it was really good to start with as it stabilised everything by gradually increasing the money supply. But they left the taps on for too long and inflation went ballistic. If they had of started turning off the taps earlier and took longer to do it, there would have been little impact on inflation. Hindsight is a wonderful thing. What Chump is doing is short term lever pulling.. He is creating that cosy bubble to protect everyone now. He will be in lag territory as the economy has capacity to absorb it and things will be humming along nicely. It's nice and artificial, but reality will kick in. With his attempt to get the levers of monetary policy, which can artifically increase inflation through interest to keep the lid from blowing off, influencing lower interest rates in the face of an artifically booming economic engine is a recipe for disaster as there will be more money floating in the system because it will be easy to get hold of. Enter the credit multiplier, which even further increases the money supply. What happens is I earn say $100. I put $50 in the bank. Multiply that by say a million people. Three is $50m in the bank. Now I want to start a business. So I borrow $1m. Others want to biy a house, a car, a holiday of a lifetime, etc. In the end, $45m of that money is lent out. The economy is now $95m. Now, the people/businesses we have spent the money on bank some of that money, after expenses, etc. Say, $20m is banked back as deposits, the other is spend on their expenses, and those that were paid bank say $10m of that.. The system now has the original $50m + the $45m lent but still has $30m in the bank and ready to lend out. And so the cycle goes until it essentially runs to a crtical reduction at which the economy can't sustain itself, and people start defaulting and the whole thing unravels (of course that is an overdramatisation). Say the borrowing rate is on average 10%. It makes it reasonably difficult to service large loans. Now Chump comes along and adds $50M to my economy. Whoa.. As a bank I don't want it sitting in my accounts as a liability - it is costing me money. So I want it lent out. But initially, demand hasn't changed, so what do I do? I reduce my interest rates to shift it. And this increases demand for lending, further pumping money into the economy and keeping the cycle going. But, with even more money in the economy, the same population can pay more for the same stuff, and eventually inflation will skyrocket. Then things get more expensive, and eventually people can no longer afford it as the money creation cycle slows. Then demand drops, employment drops, taxes drop, etc, The government has debt and the piper is coming along for its next payment. The proiblem with Chump is he looks to be weilding these levers for very short term political gain and the debt to the piper ever increasing. One day the piper will come calling and the house of cards that has now been built, rather than the solid foundation will fall.

He keeps his injector serviced

The problem with futures is that it is a zero sum game. You either win or lose

I absolutely agree. But the frame of the questioning is important. There is a case that these old buildings cost too much [compared to what they bring] For many, it is true. But for some, it is not necessarily true depending on how you ask the question. If we frame it in econcomic return - i.e. does it earn an income and pay for itself? Well, then the answer looking at it like a bean counter is of course no. But that can be said about something we all cherish - probably the vast majority of what was government (now council) GA airfields. If you look at the opportunit cost of these, on their own merits, then the opportunity costs would normally - especially for those around more major conurbations - be much higher than the return provided as a pure aviation facility. The federal government recognsed it and offloaded it to the councils. Many councils either lease them or augment them wit other purposes, where they can. Those, such as Jerilderie (last time I was there) measure movements in a week; a day is too depressing Yet, while some are vital for the community such as remote regions, aeromeds, etc, they could be rationalised. We need an airline/commercial training facility - pick one of the bigger airfields such as Mooraabin- that is probably all the country needs to chrun out the pilots for commercial ops. The rest can be sold of no money spent on maintenance rather than be the preserve of a hobby for rich folk and those so imbibed by it, they will forgoe a significant strandard of living to participate (RAA stuff doesn't really need airports - people can do what they like with their own money - plenty of private strips - we are talking taxpayer money). In fact, the opportunity cost of Moorabbin + Essendon - 2 large GA airports in one city - must be astronomical. Why do we need two? Why don't we just shut one down and release the assets for far more profitable purposes? Have I riled you? Yes, because to you, the return is far more than a simple revenue minus expenses equation. The amenity that you (and I) get is far higher. But except for communities that rely on airfields, you would be hard to find too many people that mourn their loss beyond a, "oh, that's a shame". The only time here it impacts those outside aviation is when the council decides a housing estate is better - NIMBYism more than agreement that a GA airfiled is useful. Even councils want to shut them down, stop maintaining them, augment with other uses - commercial and residential. Looking at it, the cost/benefit analysis for government costs extends beyond pure break-even and into money making points. The returns sought by a govenment are not entirely financial. And, it is the same for these buildings. As I have said, you keep some stuff, you get rid of the other stuff. The heritage listed stuff gets listed for a purpose - to preserve cultural, historial, environmental (in a human sense) so as to provide an amenity. Why heritage list somethign if you are going to allow it and its curtilage to be materially altered, but just preserving a facade? It may have little resonance to you, but it may have to others. And let's not forget the stories, especially in Victoria of corruption in the construction industry - from planning, to building inspections, to construction - it is all there to see. Which means sell it off to the private industry, almost all bets, regadless of undertakings, are off.

There are many other areas of government waste that can be directed to facilities. And many who are allowed to pay no tax who should Priorities.

If the government (and therefore the country_ were a business, it would have gone broke or been sold at a knock down price years ago. The reality any business ultimately exists for one purpose and one purpose only. That is to make as much profit as it can. That is it. How it does it is it's choice. Some people may start a business with a noble intention or to indudge their hobby or whatever.. But the business only survives if it makes a profit that the owner/s want it to. A government has to balance the books - but that does not mean it has to receive a return in the same way a business does. And, in theory, a government like Australia cannot go broke. Although life can become economically untenable for its citizens (ref Zimbabwe, for example) - but it does not itself go broke. Yes, they default on international loans and the like, but they still economically function. A business defaulting on its loans with little or no chance of paying them stops in its current form. It may stay on in name, but the business is different; the shareholders are gone, etc etc. So, the returns the government (should) look at are not entirely econcomic. I am more familiar with Victoria Barracks n Melboune than Sydney. It forms part of the St Kilda Boulevard (ex St Kilda Road). This is uite an asthetic boulevard in the context of its relative greenery, division of the roads through green median strips, and a meld of modern high rise office blocks/apartments, a boundary to Fawkner Park, and as you get closer the the city, the Vitctoria Barracks (I am guessing the old hosptial is long gone that was on St. Kilda Road). The Victoria Barracks break the monotony of the more modern and somewhat bland highrise. They oen the skyscape to more sky over penthouse suites and office rooves (roofs). Also, they are pleasing to look at - and older architecture that has beauty designed into it. And it is a historical reminder. It can bring amenity in the same way people admire art - but to more people than visit galleries; Once they are gone, there is no bringing them back. In this way, from a government perspective, to take the "good business" arguement, the return to the communty can be well worth the cost ofd preservation. Of course, we can't preserve everything, but both the Melbourne and Sydney Victoria Barracks are significant enough that the return to society is worth the cost. That is good government business. If the Dept of Defence want to realise the economic gain they can give it up to a cultural ministry for some exchange of budget. I think a museum is already in one of them.. That can be expanded; it can be covnerted to a living museum to help it contrinute to its upkeep and also provide an opportunity for further educating our people. Of course, that is only my opinion. Others may think it is an old eyesore and want it gone. That is the difficulty of governing a country over running a business. How to calculate the return

I think you miss the point.. also government is not a business.

That is true. But they would be French, and nuclear powered.. 🙂

I didn't say we shouldn't write off the "investment" and stop throwing good money after bad. I was merely stating we are already in loss territory. I owuld like us to buy nuclear subs form the French. The size is more appropriate to our waters.

When he realises it will cost him votes. Too late.. we have already spent $1.6bn under the bits that allow the US or Aus or the UK to kill the deal and we will not get refunded. He should have pulled out day 1 and negotiated a better deal.. For some reason that review when Albo took office was very uick and decided to continue. It would be a lot harder for them to mount that sort of raid in Aus.. And it would cost them a lot more than Cuba already has.

I have a question.. Once it is done, which of your helmets are you going to wear when riding it? 🙂 OK.. I'll get my hat and coat as well.. I'll shut the door quietly.

I only heard it for the first time in 2018. I led a sheltered life.

It's an image, so by definition, it is a real image... Just not everything in the image is real.