Wages/assets deflation

 
  Graham4405 Minister for Railways

Location: Dalby Qld
Hearing stories about melamine powder in Chinese milk does not inspire confidence.
don_dunstan
No, but neither do the things I have experienced in Australia, foreign objects (including cigarette butts and pins) deliberately being inserted into food products during processing...

But we are way off topic!

Sponsored advertisement

  Aaron The Ghost of George Stephenson

Location: University of Adelaide SA
Hearing stories about melamine powder in Chinese milk does not inspire confidence.
don_dunstan
I agree, but there's more to know. The Chinese certainly added melamine to milk powder in an effort to boost the protein content of the product, but melamine can be occurring NATURALLY in milk, well sort of naturally. Animals, specifically mammals, can metabolize certain ingredients (specifically cryomazine) found in pesticides to melamine, which may then be found in either the milk or meat. Should this process occur in poultry, I presume the melamine could then be found in their eggs. From memory, and it's been a long time since I studied this in high school, melamine is about as toxic as regulation table salt, but salt is not generally thought of as a carcinogen.
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
No, but neither do the things I have experienced in Australia, foreign objects (including cigarette butts and pins) deliberately being inserted into food products during processing...

But we are way off topic!
Graham4405

That's crazy, thank God nothing like that has ever happened to me (touch wood!).  

On the original topic, which was just a commentary about the economy in general, I notice our dollar lost a whole three cents overnight.  Shades of things to come?

I read somewhere that it's highly likely to be inflationary if the dollar keeps heading south but on the other hand our long-suffering domestic tourism industry will (hopefully) start to pick up.  I saw Gerry Harvey on the TV looking unhappy but c'mon, someone has to lose.  Personally I think it's good news at last for long-suffering tourism, agriculture and (what's left of) our manufacturing.
  cootanee Chief Commissioner

Location: North of the border!
That's crazy, thank God nothing like that has ever happened to me (touch wood!).  

On the original topic, which was just a commentary about the economy in general, I notice our dollar lost a whole three cents overnight.  Shades of things to come?

I read somewhere that it's highly likely to be inflationary if the dollar keeps heading south but on the other hand our long-suffering domestic tourism industry will (hopefully) start to pick up.  I saw Gerry Harvey on the TV looking unhappy but c'mon, someone has to lose.  Personally I think it's good news at last for long-suffering tourism, agriculture and (what's left of) our manufacturing.
don_dunstan
When I was a kid (the good old days) I had a finger nail (ladies false one - I hope) in an popular biscuit !
Latest commentary suggests the dollar getting down to US 0.90c. Of course it would have to sit there for a bit before industry will respond. However agri sector will respond quicker - already some markets are picking up.

The high dollar helped keep down petrol prices - if oil prices do rise (the double whammy) expect that to be the next hot ACA/TDTN story. Rolling Eyes
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
When I was a kid (the good old days) I had a finger nail (ladies false one - I hope) in an popular biscuit !
Latest commentary suggests the dollar getting down to US 0.90c. Of course it would have to sit there for a bit before industry will respond. However agri sector will respond quicker - already some markets are picking up.

The high dollar helped keep down petrol prices - if oil prices do rise (the double whammy) expect that to be the next hot ACA/TDTN story. Rolling Eyes
cootanee

Really, a false fingernail?  That's disgusting.  As I said, touch wood, that's never happened to me.

People are always whinging about petrol prices - I haven't owned a car for six years, I have trams at either end of my street and a railway station 5 mins away so I don't really need a car.  I understand not everyone is as fortunate as I am but at the same time I think people can use their cars a bit less.

I always get amazed when people drive three blocks to the shops instead of walking.  Or they drive to gym instead of having a 1-2km run for a warm up.

Petrol will inevitably hit $2 a litre one day, people just need to learn to be more conservative.
  Graham4405 Minister for Railways

Location: Dalby Qld
I always get amazed when people drive three blocks to the shops instead of walking.  Or they drive to gym instead of having a 1-2km run for a warm up.

Petrol will inevitably hit $2 a litre one day, people just need to learn to be more conservative.
don_dunstan
The one that amuses me is those that drive from one shop to another in the main street!

With regard to public transport, it doesn't matter if the public transport is right outside your front door. If it doesn't take you to where you want to go it is useless to you.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Some peoples greed is astonishing.  I worked with a young woman last year who (in conjunction with her husband) had gone really deep into residential property speculation; between them they owned three houses.  She was telling me her aim was to be a retired multi-millionaire by the time she was 40.

The problem was that the houses they owned were in undesirable parts of Melbourne (Tarneit, Hoppers Crossing) and they were struggling to keep tenants.  She once confided that every month they didn't have a tenant in one of their houses was costing them an extra $1500 or something but the bulk of their business plan was to sell up once the properties went past the capital gains threshold.  That was how they were going to be millionaires... residential property speculation.

Granted, if you had gone deep in almost any capital city ten years ago you probably couldn't lose but I'm not sure that those unprecedented price gains can ever be repeated.  There's also heaps of people in their twenties who have never seen a recession and therefore have no idea that we do actually have cycles in our free-market capitalist economy.

I said to her once "What if there's no capital gain?" and she said "Don't be ridiculous, houses always go up!".  Silly me!
don_dunstan

We tried the same thing, but it only works if you can positive gear your property and in the capitals and major centres this has been extremely hard to find since the late 90's and then you typically have to target the middle to lower income because many of these people will never save enough to buy a house so they are keen to rent but not focused on buying.
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
The one that amuses me is those that drive from one shop to another in the main street!

With regard to public transport, it doesn't matter if the public transport is right outside your front door. If it doesn't take you to where you want to go it is useless to you.
Graham4405

IN Melbourne we are lucky enough that it usually does go where you need it to.  I'm the first to admit that I'm very privileged, I have buses, trams and trains all within walking distance; they are very frequent (even in the evenings and on weekends) and the only time they are a problem is in the peak times when you have to battle huge crowds.  Most of the time I don't even bother to look up the tram times, you just rock up and one arrives.  I had a friend from rural SA visit last year and she was amazed how easy it all is.

Most people in Melbourne aren't that fortunate - like if you live on the fringes.  If you live in a regional town or in the country, you don't have those options at all and driving everywhere is really your only choice; I'm glad that's not me.  I still have to drive occasionally in a pool car at work and I must say I don't miss it one little bit.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
IN Melbourne we are lucky enough that it usually does go where you need it to.  I'm the first to admit that I'm very privileged, I have buses, trams and trains all within walking distance; they are very frequent (even in the evenings and on weekends) and the only time they are a problem is in the peak times when you have to battle huge crowds.  Most of the time I don't even bother to look up the tram times, you just rock up and one arrives.  I had a friend from rural SA visit last year and she was amazed how easy it all is.

Most people in Melbourne aren't that fortunate - like if you live on the fringes.  If you live in a regional town or in the country, you don't have those options at all and driving everywhere is really your only choice; I'm glad that's not me.  I still have to drive occasionally in a pool car at work and I must say I don't miss it one little bit.
don_dunstan

Not privileged, just smart enough to choose this location
  Graham4405 Minister for Railways

Location: Dalby Qld
IN Melbourne we are lucky enough that it usually does go where you need it to.
don_dunstan


So if you wanted to go to say Steiglitz Vic, a mere 100km from the Melbourne CBD you could get there easily and economically by public transport alone?

If you live in a regional town or in the country, you don't have those options at all and driving everywhere is really your only choice; I'm glad that's not me.
don_dunstan


I'll take the regional town any day thanks!
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
So if you wanted to go to say Steiglitz Vic, a mere 100km from the Melbourne CBD you could get there easily and economically by public transport alone?



I'll take the regional town any day thanks!
Graham4405
V-Line is really effective, probably the best regional public transport network in the country.  I have friends in a really small town (500 people) just outside Ballarat and surprisingly they have a number of return buses to Ballarat every day.  Public transport doesn't work as well the further you get from big cities (obviously).  It's not assessable/easy for everyone - but as RTT_rules said, its certainly a reason why I chose to live where I live.

Having grown up and lived in a small town I could never go back, there's a lot that I don't like about big cities but on the whole it offers more.    Small towns where it's always the same people down the pub are not my cup of tea and I grew up with it so I do know what it's like.  A lot of people derive comfort from knowing everyone in their community - not me.   I like to have a degree of anonymity.   And I like not having to own a car.

Horses for courses.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
V-Line is really effective, probably the best regional public transport network in the country.  I have friends in a really small town (500 people) just outside Ballarat and surprisingly they have a number of return buses to Ballarat every day.  Public transport doesn't work as well the further you get from big cities (obviously).  It's not assessable/easy for everyone - but as RTT_rules said, its certainly a reason why I chose to live where I live.

Having grown up and lived in a small town I could never go back, there's a lot that I don't like about big cities but on the whole it offers more.    Small towns where it's always the same people down the pub are not my cup of tea and I grew up with it so I do know what it's like.  A lot of people derive comfort from knowing everyone in their community - not me.   I like to have a degree of anonymity.   And I like not having to own a car.

Horses for courses.
don_dunstan

I personally don't mind towns of 5000-50,000. Mainly because I like to live on a bit land myself.

Vic is the most densely populated state with Melbourne the closest geographically centres capital of its state. Melbourne is also surrounded by favourable terrain for rail. Head Nth, Brisbane is in a corner ring fenced by mountains and Sydney is on the side also ring fenced by mountains. So its not surprising it has relatively good regional PT for much of the state.
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
I personally don't mind towns of 5000-50,000. Mainly because I like to live on a bit land myself.

Vic is the most densely populated state with Melbourne the closest geographically centres capital of its state. Melbourne is also surrounded by favourable terrain for rail. Head Nth, Brisbane is in a corner ring fenced by mountains and Sydney is on the side also ring fenced by mountains. So its not surprising it has relatively good regional PT for much of the state.
RTT_Rules

I actually love the little old mining towns around Ballarat... bloody freezing this time of year though.  Relatively close to Melbourne though, very easy for a day trip either by train or car.

My friends who live in the little town (500 people) moved from another regional city of 10,000+ and they say they really like it there.  It's taken them a few years to make some good friends but now whenever you walk their dogs around the town you nearly always bump into, and have a 5-10 minute chat with, one of the locals.  They have also met a few people they don't like at all but it's relatively easy to say 'hello' and keep walking - it's no coincidence that those same people are very unpopular locally because they gossip and try and get people into trouble with the local cop.  The local cop is actually a good bloke though (I've met him) and he keeps everyone in their place.

I agree with you about the small acreage.  I'd love to have a go at growing something like herbs for the gourmet restaurant market or veggies and fruit but no more than 2-3 acres otherwise you're forever doing fences, weeds, etc.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
I actually love the little old mining towns around Ballarat... bloody freezing this time of year though.  Relatively close to Melbourne though, very easy for a day trip either by train or car.

My friends who live in the little town (500 people) moved from another regional city of 10,000+ and they say they really like it there.  It's taken them a few years to make some good friends but now whenever you walk their dogs around the town you nearly always bump into, and have a 5-10 minute chat with, one of the locals.  They have also met a few people they don't like at all but it's relatively easy to say 'hello' and keep walking - it's no coincidence that those same people are very unpopular locally because they gossip and try and get people into trouble with the local cop.  The local cop is actually a good bloke though (I've met him) and he keeps everyone in their place.

I agree with you about the small acreage.  I'd love to have a go at growing something like herbs for the gourmet restaurant market or veggies and fruit but no more than 2-3 acres otherwise you're forever doing fences, weeds, etc.
don_dunstan
My acreage is 4ac, its natural bush, no fneces, the ground is crap and you cannot grow much due to long dry winters and soil doesn't hold water. Only tall trees and black boys and some native grasses. My "grassed" area and garden around the house is same size as normal block. I brought in soil for the grass to grow on and gardens to grow. I spend less time in garden than other people I know with normal hosue blocks. Weeds are only issue in the natural part near where the trees are open or cleared around the house. 20min every 2 weeks with zero sorts them out. and only during summer rains.

I have another 4 ac block at Agness Waters, no house, boundry with national park. No boundry fences, natural vegetation, no maintanence. We have a small home made shed made to look like log cabin on it.

Small towns, a freind used to live at Trangie in NW NSW. Going for walk with her in AM was like a meet and greet for the town. Distance wise we didn't walk far, but it took 2hr after all the 5-15min chats.
  Rodo Chief Commissioner

Location: Southern Riverina
My own small town is on the wrong side of the Vic. border. Consequently it is not served by V/line and the regional transport connection centre of Cobram can only be reached by a once a week bus service. This has now died I think, despite me using it about once a month. (often the only passenger)
  MILW Junior Train Controller

Location: Earth
This is the first time I've ever started a thread but I'm interested in everyone's reflections on the current state of our economy.

Opinions/observations?
don_dunstan
We're going down, possibly big time. Wage and asset deflation is part of that. The possible ending of stimulus in the US will remove the artificial support for asset prices and economic activity in general as the inflationary printing press grinds to a halt.
  Graham4405 Minister for Railways

Location: Dalby Qld
My acreage is 4ac, its natural bush, no fneces, the ground is crap and you cannot grow much due to long dry winters and soil doesn't hold water. Only tall trees and black boys and some native grasses. My "grassed" area and garden around the house is same size as normal block. I brought in soil for the grass to grow on and gardens to grow. I spend less time in garden than other people I know with normal hosue blocks. Weeds are only issue in the natural part near where the trees are open or cleared around the house. 20min every 2 weeks with zero sorts them out. and only during summer rains.

I have another 4 ac block at Agness Waters, no house, boundry with national park. No boundry fences, natural vegetation, no maintanence. We have a small home made shed made to look like log cabin on it.

Small towns, a freind used to live at Trangie in NW NSW. Going for walk with her in AM was like a meet and greet for the town. Distance wise we didn't walk far, but it took 2hr after all the 5-15min chats.
RTT_Rules
Shane,

You keep referring to the size of a "normal house block". In parts of Brisbane this could be as small as 400 sq m, here it Dalby it could be 1000-2000 sq m. In sheep country (not strictly a "house block" I know) it could be several thousand hectares! So how big is a "normal house block"?
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Shane,

You keep referring to the size of a "normal house block". In parts of Brisbane this could be as small as 400 sq m, here it Dalby it could be 1000-2000 sq m. In sheep country (not strictly a "house block" I know) it could be several thousand hectares! So how big is a "normal house block"?
Graham4405

I would say 400m2 to 1/4acre.
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
My acreage is 4ac, its natural bush, no fneces, the ground is crap and you cannot grow much due to long dry winters and soil doesn't hold water. Only tall trees and black boys and some native grasses. My "grassed" area and garden around the house is same size as normal block. I brought in soil for the grass to grow on and gardens to grow. I spend less time in garden than other people I know with normal hosue blocks. Weeds are only issue in the natural part near where the trees are open or cleared around the house. 20min every 2 weeks with zero sorts them out. and only during summer rains.

I have another 4 ac block at Agness Waters, no house, boundry with national park. No boundry fences, natural vegetation, no maintanence. We have a small home made shed made to look like log cabin on it.

Small towns, a freind used to live at Trangie in NW NSW. Going for walk with her in AM was like a meet and greet for the town. Distance wise we didn't walk far, but it took 2hr after all the 5-15min chats.
RTT_Rules

There's a big problem with gorse around Ballarat.  It only takes a few people to ignore it and it totally runs away - it's really horrible stuff to try and get rid of and if left unchecked it will grow into huge impenetrable thickets.  I noticed gorse around Scotland when I went there so I'm guessing that's where it comes from.  Blackberry is also a prominent pest, so is fennel and wild tobacco.

Feral pine trees spread out from the plantations, I guess cockatoos spread the seeds from those but they aren't hard to control.  Gazanias also escape from people's gardens and grow along the roadsides but they are also very easy to control and at least they're a nice-looking weed!

The soils and (usually) year-round rainfall are really good around that part of the country so it's pretty easy to grow nearly anything.  I've seen people growing strange things like crocus (saffron), native thrip, and commercial lavender although these things are all difficult to grow; there's a lot of small-time farmers doing okay from niche things like this but you really have to know your market.  The frost is really bad though and that's one of your main problems.  Apparently you have to plant special frost-hardy citrus in Ballarat or it will die easily, especially this time of year.  I love the idea of moving to a small acreage and trying my hand at something like that but I'm not nearly brave enough to try it!

My friends in the small town I mentioned earlier were getting harassed at one stage by this near-neighbour a few doors down who had a reputation for threatening to sue people over trivial matters.  She also apparently used to phone the council or the local cop over really trite things like where people's cars were parked or their cats being seen outside in the evening.  She had already successfully chased some tree-changing people from Melbourne out of the town and my friends were worried they would be next.  The local cop was actually a great help, he gave them advice on how to deal with this woman because half the town were coming to him to complain about her behaviour, now things seem to have settled down and the crazy lady has moved on to targeting other people.

It's good that that happened because nearly everyone else you meet is really friendly and helpful, they're always doing stuff for each other.  They have made some great friends there now and while they have had this run in with that stupid woman on the whole they really love living there and you can see how living in a small town can give you a great sense of belonging.  The bird life is fantastic too, I just love seeing king parrots and rosellas come up to their kitchen window to beg for parrot-food !
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
We're going down, possibly big time. Wage and asset deflation is part of that. The possible ending of stimulus in the US will remove the artificial support for asset prices and economic activity in general as the inflationary printing press grinds to a halt.
MILW

We saw what happened last week with the possible end of stimulus from Bernanke, AU$ promptly falls three cents.  It's a good thing in my opinion - as Johnny Howard was telling us when our dollar was rock-bottom years ago, it enhances our international competitiveness no end. Someone in the media mentioned inflationary pressures in our own economy - so what.  Did anyone really think we were going to have all this imported crap dirt cheap forever?
  MILW Junior Train Controller

Location: Earth
We saw what happened last week with the possible end of stimulus from Bernanke, AU$ promptly falls three cents.  It's a good thing in my opinion - as Johnny Howard was telling us when our dollar was rock-bottom years ago, it enhances our international competitiveness no end. Someone in the media mentioned inflationary pressures in our own economy - so what.  Did anyone really think we were going to have all this imported crap dirt cheap forever?
don_dunstan
A weaker dollar could help manufacturing and tourism recover and that's a good thing, but I hardly think it is going to usher in a new era of overall prosperity, especially while the rest of the interdependent global economy is in the toilet. Will it see a resumption of sustainable real exponential growth the system is designed for? I have my doubts. Inflation is a bad thing because it is effectively a form of tax imposed on the population when the currency is devalued through the various means of money supply expansion faster than the growth in the supply of goods and services; wages often fail to keep up with inflation, leaving workers with declining purchasing power as their money is worth less. Inflation can also eat away at savings where the rate of inflation is higher than the nett interest accrued, a bigger problem in times like this when we have very low interest rates and real inflation in some cases far higher than the official figures indicate.
  wn514 Chief Commissioner

Location: at a skyhooks concert living in the 70's
whilst the chinese economy is not growing as fast as it was it is still growing at 6 or 7 percent a year and the US economy is slowly looking better than it was a couple of years ago, which will be good for the aussie economy. also the growing middle class in china are starting to demand better working conditions and higher wages which will ultimately have an effect on the price of manufacturing and producing things there. whether this means manufacturing etc will come back to countries like Australia or will only go elsewhere in asia, well I guess we will have to wait and see.
  waxyzebu Locomotive Driver

To a degree this will come down to what happens with the energy supply, meaning fossil fuels and oil in particular. This is an oil economy and we need a growing daily supply to fuel economic growth. Economic growth = growth in energy consumption. When economic growth meets energy supply limits bad things tend to happen.
  cootanee Chief Commissioner

Location: North of the border!
To a degree this will come down to what happens with the energy supply, meaning fossil fuels and oil in particular. This is an oil economy and we need a growing daily supply to fuel economic growth. Economic growth = growth in energy consumption. When economic growth meets energy supply limits bad things tend to happen.
waxyzebu

Not just oil - food is going to be a source of international tension in next decades. China is not buying into agri enterprises around the world without good reason.
  DirtyBallast Chief Commissioner

Location: I was here first. You're only visiting.
whilst the chinese economy is not growing as fast as it was it is still growing at 6 or 7 percent a year and the US economy is slowly looking better than it was a couple of years ago, which will be good for the aussie economy. also the growing middle class in china are starting to demand better working conditions and higher wages which will ultimately have an effect on the price of manufacturing and producing things there. whether this means manufacturing etc will come back to countries like Australia or will only go elsewhere in asia, well I guess we will have to wait and see.
wn514
Hooray, someone else recognises that a sustainable 6 -7% growth in the Chinese economy as well as a recovery in the US economy, is a massive fillip for Australia. Also, it is important to recognise the emergence of affluence in the Asian region. Speaking of, how many of you realise that most Chinese people don't know what cheese is? Quick, buy BGA shares!!!! Wink

Sponsored advertisement

Subscribers: RTT_Rules

Display from:   

Quick Reply

We've disabled Quick Reply for this thread as it was last updated more than six months ago.