Post Industrial Australia

[willedoo]

As far as fees on digital transactions, they seem to be fairly small in the scheme of things. But some people will always complain. When they banned light weight free shopping bags, some people complained about having to pay 15 cents for a bag. They would have $300 worth of crappy junk food in their trolley and be complaining about having to fork out 45 cents for bags.

[onetrack]

I haven't given up cash, and I'm not likely to, in the near future. I reckon I'm in the same position as a few million other Australians too, who still like to deal in cash.

Of course, the Govt and ATO want us cashless, so they can track every single transaction to the last dollar, and get their share. There there's the drug dealers ........

[red750]

I stopped using cash quite a while ago. Until this week I didn't have a tap & go card - correction - only   the credit card which I rarely use. My old debit card expired and my new card has a chip so I only need a pin number for transactions over $100 or where the merchant has an old card machine. Many stores who had a minimum purchase requirement for card purchases have abandoned that because currency can carry the virus. I remember when I was a bank teller, I used to hate taking the fish shop's deposit because the notes and coins were greasy and stunk. For the first time in a couple of years, I have two $5 notes in my wallet, because the bank systems have had a series of outages recently. $10 won't get me much, but in an emergency.....

[Old Koreelah]

1 hour ago, red750 said:

...I have two $5 notes in my wallet, because the bank systems have had a series of outages recently. $10 won't get me much, but in an emergency.....

Cashless is great, especially during the pandemic, but systems can crash, which means we need enough cash to get home.

I used to carry a $5 note in my helmet. The car's ash tray now has a $50.

 

 

[Old Koreelah]

15 hours ago, onetrack said:

As has been said, by wiser men than I - "About 700 economists, bankers, and world leaders, refer to gold as a 'barbarous relic', and say it has no place in storing value in a modern world. The simple problem is, they have yet to convince 7 billion people, they are right".

The world's payment system is way overdue for a reset, like the one in 1944 at Breton Woods.

Next time, as then, those who have the gold will set the rules. Australia won't get a seat at the table because the Howard government sold most of our reserves -at the bottom of the market.

The US, China, Russia, Europe, Turkey... etc. will be setting the new rules because they have large reserves of the yellow metal.

 

 

[red750]

30 minutes ago, Old Koreelah said:

we need enough cash to get home.

With travel restrictions, we are generally within walking distance of home.

[Marty_d]

7 hours ago, Old Koreelah said:

The world's payment system is way overdue for a reset, like the one in 1944 at Breton Woods.

Next time, as then, those who have the gold will set the rules. Australia won't get a seat at the table because the Howard government sold most of our reserves -at the bottom of the market.

The US, China, Russia, Europe, Turkey... etc. will be setting the new rules because they have large reserves of the yellow metal.

 

 

Gold was disconnected from currency in 1973, so it's just another commodity now.  Yes it has value at the moment, but so did tulips in 1636.  If something with no real purpose goes up 44% from a relatively stable value in a short time, I'd hazard a guess that it's going to go down as spectacularly at some point in the near future.

 

I was talking with a neighbour the other day, who's a professor of economics, about Modern Monetary Theory (which Bruce mentioned).   His opinion is that in many ways it has merit - particularly that sovereign governments are in no way like households, so the old conservative mantra of "living within your means" and the economy being like a household budget where you can't spend more than is coming in, is so much horseshit (unsurprisingly).  

Yes if you have a tinpot dictatorship where the government pretty much prints money without restriction but has no stable economic activity to back it up, you'll get runaway inflation.  But Australia's inflation has been below the targeted 2-3% for over a decade. 

The best thing the government could do right now is to have a mix of immediate stimulus (think the "school halls" of the Rudd response to 2008), longer term big nation-building infrastructure  (hey, what about decent internet?  High speed rail?  Transforming cities by better public transport, bicycle and walking infrastructure?  Setting up facilities for electric or hydrogen vehicles?  What about transforming to sustainable power and help solve climate change at the same time?  Give a kick start to manufacturing in our own country? - things like that).

Add to that the "helicopters of cash" idea by dumping money on the populace, particularly to the lower earners who will actually spend it.  If your aim is to get the economy working then there's no point adding 1's and 0's to the bank accounts of the well-off, because they won't spend it in the local economy anyway.  And buying submarines and grossly overpriced F-35's is great for the French and US economies, but not ours.

[willedoo]

There has hardly been a cheaper time for governments to borrow money. Some economists are now saying that interest rates will stay at record lows for many years to come. It makes the Lib's religion of austerity look outdated. You might be right Marty, in that maybe it's time for a bit of nation building. This pandemic might be the reality shock that the penny pinchers had to have. They might finally realise that ripping off pensioners and carers is not going to balance their budget. Hopefully it's goodbye to their holy grail mentality and the country can move forward with better management and less mindless slogans..

[old man emu]

I have to laugh when I hear Our Glad talking about infrastructure development in Sydney. The words, "It will create X jobs" is the punchline I laugh at. These jobs are in the various facets of the construction industry. Not everyone has the physical or mental abilities to work in construction. Those projects might require employees, but they are the same ones who worked on last decade's projects. Ever since the English started digging transport canals across England then building railroads to replace the canals, it has been the same groups of people who have moved from project to project, taking their skills and sweat with them. 

 

Maybe the infrastructure helps other businesses to expand, or new businesses to open, but the actual construction does not reduce the unemployment rate overall.

[willedoo]

I can remember when they built the Millmerran power station in Queensland. They built a small town of worker's dongas within the town of Millmerran itself, and it housed around nine hundred workers. The locals thought it was wonderful until it was built and they all left. The power station only had about twenty or thirty permanent workers. Sort of a flash in the pan economy in that case.

[onetrack]

Gold was disconnected from currency in 1973

 

America actually went off the Gold Standard on Aug 15, 1971. It was called the "Nixon shock", because Nixon took the sole decision to go off the Gold Standard, without reference to any other politician or economic advisor.

 

https://en.wikipedia.org/wiki/Nixon_shock

Edited July 20, 2020 by onetrack

[old man emu]

Luckily, Trump doesn't learn from History or he'd take do something unilateral like that.

[Old Koreelah]

11 hours ago, Marty_d said:

... I was talking with a neighbour the other day, who's a professor of economics, about Modern Monetary Theory...

That was your first mistake!

Mainstream Economists have an appallingly poor record of predicting future trends in the economy and they are very unlikely to get this one right. National currencies need something to back up their value for fear of rampant inflation; this is one reason so many nations with pressing budgetary needs are investing heavily in building up their gold reserves. 

The other reason is to prepare for the launching of alternatives to the US dollar for international payments. 

 

The rest of your post I totally agree with.

[Bruce Tuncks]

Unless you are going to return to the gold standard OME, I don't understand how having tonnes of gold in a fort somewhere will make any difference to anything.

[Old Koreelah]

4 minutes ago, Bruce Tuncks said:

Unless you are going to return to the gold standard OME, I don't understand how having tonnes of gold in a fort somewhere will make any difference to anything.

Pretty much the same reason nations spend billions of dollars on warships and planes that may never be used.

[Marty_d]

11 hours ago, old man emu said:

I have to laugh when I hear Our Glad talking about infrastructure development in Sydney. The words, "It will create X jobs" is the punchline I laugh at. These jobs are in the various facets of the construction industry. Not everyone has the physical or mental abilities to work in construction. Those projects might require employees, but they are the same ones who worked on last decade's projects. Ever since the English started digging transport canals across England then building railroads to replace the canals, it has been the same groups of people who have moved from project to project, taking their skills and sweat with them. 

 

Maybe the infrastructure helps other businesses to expand, or new businesses to open, but the actual construction does not reduce the unemployment rate overall.

Have you seen how many sausage rolls and cappuccinos that tradies go through? 

[old man emu]

13 hours ago, Marty_d said:

I was talking with a neighbour the other day, who's a professor of economics, about Modern Monetary Theory

 

2 hours ago, Old Koreelah said:

That was your first mistake!

 

Those who can do, those who can't, teach.

 

The History Channel documentary  The Men who Built America  https://en.wikipedia.org/wiki/The_Men_Who_Built_America  "documents" the rise of the mid-19th Century industrial and financial moguls of the USA, and as corny as it is, if you can imagine making a documentary and using Donald Trump as one of your experts, then it's probably something you might enjoy. Anyhow, back to the point. None of the men portrayed in this series had much of a formal education past what we would call the end of Primary School.  In fact, during one libel case brought by Henry Ford, he was on the witness stand for eight days while the Defence lawyer bombarded him with General Knowledge questions to show that Ford was uneducated. When I watch that scene I wondered how many of the people in the court house drove there in a Tin Lizzie.

 

The men were "street tough" and once they had established a financial base, turned to playing Monopoly for real.  Anyone for whom this period wasn't so prosperous or miraculous is mentioned only as collateral damage from the oil and rail wars.

[old man emu]

35 minutes ago, Marty_d said:

Have you seen how many sausage rolls and cappuccinos that tradies go through? 

I live out near Camden Airport and the old Oran Park Raceway. Housing development has exploded there in the past five years and continues to boom. There's a 7-Eleven servo nearby. That's where you get the freshest pies, sausage rolls, donuts and coffee. It's a tradies' Mecca.

[willedoo]

5 hours ago, Bruce Tuncks said:

Unless you are going to return to the gold standard OME, I don't understand how having tonnes of gold in a fort somewhere will make any difference to anything.

Bruce, I suspect that countries are stockpiling gold as insurance against the petrodollar losing it's value and power some time in the future. Fiat currencies can come and go, but basically it's paper that someone has assigned a value to. And when the sh*t hits the fan, that's all it is - paper. Gold seems to have that physical status of value in bad times. Some countries buying gold are insisting on physical gold instead of paper gold. Paper gold runs the same risk as fiat currency; there's always the risk you will be left one day holding a piece of paper. The reason being that of all the world's gold on paper, only about 80% of it has ever been mined.

 

I think it will be a long time before the petrodollar falls from grace, but it's bound to happen one day. America's use of sanctions via the CAATSA act is also pushing the drive toward gold for nations who choose to be independent from the USA and compete with them commercially. The BRICS nations for instance are talking of gold backed cryptocurrencies for trade between nations. It will take a long time as doing it too quickly would be shooting themselves in the foot due to the high percentage of their forex reserves held in American debt. In the last couple of years, Russia has sold off the majority of their U.S. debt assets and have greatly increased their gold reserves and Euro holdings. China on the other hand owns a massive amount of U.S. debt and it will take them a long time to be insulated from the dollar. The Russian government has got to the point where they have slowed right down on buying gold for a while. Currently, around 90% of Russian gold production is being bought by the U.K..

 

For the U.S. the dollar is power, and now they have the CAATSA legislation they have the ability to bankrupt competitors through financial sanctions. The biggest threat to the U.S. is other nations breaking free of the dollar and reducing their power and ability to bully whoever they want. Post petrodollar, gold and gold backed cryptocurrencies might play a big role.

Edited July 21, 2020 by willedoo

[Marty_d]

10 hours ago, old man emu said:

 

 

Those who can do, those who can't, teach.

 

 

I never said he taught economics.

 

His educational qualification is professor.  He actually works for the Tasmanian state government.

[old man emu]

The inference is that the title "Professor" refers to someone associated with teaching in a university. One of the pre-requisites is that the person holds a PhD.  Persons holding a PhD not involved in the academic sphere, have the title "Doctor". In Australia, the title "Professor" is an academic rank. This rank is only given to those who have demonstrated outstanding competence and academic leadership in research, teaching, and service as well as achieving international recognition of their scholarship.

 

So if he is not engaged  in teaching by a university, he should not use the title "Professor", but use "Doctor".

[Bruce Tuncks]

Progress in the world used to come from brief periods in history when the ruling classes lost their power to stop progress but there was enough order to stop bandits causing chaos.

England after the plague, parts of Europe after the reformation, the USA for most of its time.

To see this, just imagine that you invented a bicycle in the dark ages in Europe. The likely outcome would to be killed by the church. How could you convince them that this was not contrary to the bible? ( The first guy who rode a bike in France was killed for sorcery.)

But in modern times, I am in 2 minds. We seem to have lots of research going on, and also lots of policing. China seems to have a good innovation culture, possibly better than ours.  Remember how Jabiru was twice nearly destroyed by the government?

[spacesailor]

IF we do go cashless, when filling your petrol vehicle, the Internet takes a holiday.

Who,s at fault for Not being able to pay for goods delivered ?.

It happened to me But as it was Not advertised " cash only  ", the cops   " that servo ordered " said pay what you can, and I saved five dollars.

spacesailor

 

[Bruce Tuncks]

I too don't like how the cashless society will allow the government to keep tabs on everybody all the time. It this a greater threat than the criminals? Sadly, I think history shows that it is. Not that I don't appreciate how awful organized criminals are.

There is a great saying " those who would trade essential freedoms for a bit of safety will finish up with neither freedom nor safety" and I reckon this is right. We live in a time when freedoms are being extinguished in the name of safety and I hate it.

There was a movie where the heroines nearly got killed every time they used a credit card because the evil and corrupt policeman/criminal could track them.  

[old man emu]

How many times do people either in the Public Service or the medical profession throw back at you, "I can't give you that information due to Privacy", but the government gets information about you every time you carry out a transaction with the Public Service, or you go to the doctor for something as simple as a script renewal?

 

There are plenty of barriers to individuals accessing your information, and just about all people at the lower levels respect those barriers. But we know full well that at higher levels, those moral restraints are weak if the means justifies the ends.