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The Asia Thread

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Canada's debt is similar to Australia with a small public debt and a big private debt.

The key difference is external liabilities (or debt) where in Canada is far less then Australia, that would mean that investment made in Canada are mainly financed by internal savings, that make the CAD$ far less vulnerable then the AU$, also CAD banks would be far less vulnerable and in need of bail out infact during the GFC no canadian banks needed government backing for fundings.

But like Australia is probably suffering a house/commodity bubble and the strong CAD$ is cramping manufacturing.

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I've haven't checked how much money China is printing for a while.

For most of the past decade China has printed 11% more currency per annum regular as clock work.. This is above the maxium print rate of the Western world at 7% for two decades. In short China devalues its domestic prices to keep itself competitive in a beggar they neighbor strategy.

Last years I did notice they had the printing press up a little but it passed from mind.

Last 12 moths China has printed 17% more currency , a truly scary figure. This equals the very Western nation output of the 1970's.

I'll Say that again. Last 12 moths China has printed 17% more currency , a truly scary figure.

Let's compare some western nations.

USA........4.6%

Aus..........2%

UK .........3.8%

Euro......5.5%

The difference with China is that it is not on a true floating currency regime.

A gold standard rate is about 1.5%.

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Last 12 moths China has printed 17% more currency , a truly scary figure.

Let's compare some western nations.

USA........4.6%

Aus..........2%

UK .........3.8%

Euro......5.5%

The difference with China is that it is not on a true floating currency regime.

A gold standard rate is about 1.5%.

R u sure that are scary numbers?

after all china had 10% increase GDP and 5% inflation, that would leave only 2% unchecked

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R u sure that are scary numbers?

after all china had 10% increase GDP and 5% inflation, that would leave only 2% unchecked

That's a modern text book argument which I conclude is invalid.

To me the essential element is quantity of currency per capita.

I base the monetary system upon the individual. If you base the monetary system on the number of pocket calculators produced then that is inaccurate.

We could that there is an improvement if there are enough pocket calculators to supply all individuals . However the improvement becomes rather marginal with a 100 pocket calculators to each person.

Equally building inhabited cities and bridges to nowhere is not an improvement either. What is the utility of a bridge nobody uses?

Modern economics is retarded.

In Australia there is about $2270 per capita, to me that is the essential calculation.

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Boz there is some concern that with the return of the Wulfie Waffle you may hit the bricks. Please post, its interesting times.

Let's see? How does this work. If you make 1000 pocket calculators instead of say 100. Then the state must print more money or something.

It seems you guys simply accept these retarded axioms of economics and carry them around for years as the verbatim truth without giving it any analysis.

For me it is easy to intuitively grasp, but then I'm a genius.:rolleyes:

If you make and then market 1000 pocket calculators instead of say 100, there is no requirement to print any more money. The pocket calculators simply fall to a 1/10 of the previous price. This is a function of distribution via bidding. I hope these concepts are not too big for you?

For example if there is general market interest in a product and you market 100 of them, the market will bid it up to quite a high price. If 1000 appear on the market, the bid will be lower.

That's the human per capita unit and his basic bid power is more or less a constant. But what is traded in relation to that bid power can vary.

What isn't constant is the actual materials required by the market. If pocket calculators require gold and their is no gold on the market, then there will be no pocket calculators.

Now you print all the money you like, but without gold there will be no pocket calculators.

Money is simply a unit of account between the per capita units of Humanity. It doesn't matter if how many units of money are circulating. If 90% of the dollars circulating in the market are removed, then the remaining 10% will rise in purchase power to the former total quantity of dollars. This of course would be a classic type of deflationary scenario.

Printing money simply devalues the unit, it does nothing else.

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What about buying $1000 in Gold in AUD last May and having $860 worth now?

Now THATS deflation! :thumbsup::lol:

A variety of deflation yes.

The AUD was rapidly devalued (printed) in the closing months of 2008. The market then heavily shorted the AUD driving it down in exchange much more than warranted. However since the end of 2008 the AUD has hardly been devalued (printed) at all.

A few people would have been holding some pretty painful shorts after that. Gold peaked in AUD fairly close to 1600 early in 2009.

The only thing that could cause the AUD to fall in exchange at the moment, is either the RBA begins devaluing it again (printing) or foreign funds are withdrawn from the country.

But that's not deflation in the classic sense, that is the variety (that concerns me) of debt deflation.

When I'm referring to deflation, I'm referring to debt deflation that arises because of the synthetic shorting of currency.

Currency shorters work on the principle that the dollars they owe, will become more available at the later date.

Presently rates are being raised because Aus finance is sh*tting their pants that their enormous borrowings will walk out on them. This is the same thing Iceland tried and Aus is just as doomed.

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Let's see? How does this work. If you make 1000 pocket calculators instead of say 100. Then the state must print more money or something.

It seems you guys simply accept these retarded axioms of economics and carry them around for years as the verbatim truth without giving it any analysis.

For me it is easy to intuitively grasp, but then I'm a genius.:rolleyes:

If you make and then market 1000 pocket calculators instead of say 100, there is no requirement to print any more money. The pocket calculators simply fall to a 1/10 of the previous price. This is a function of distribution via bidding. I hope these concepts are not too big for you?

For example if there is general market interest in a product and you market 100 of them, the market will bid it up to quite a high price. If 1000 appear on the market, the bid will be lower.

That's the human per capita unit and his basic bid power is more or less a constant. But what is traded in relation to that bid power can vary.

What isn't constant is the actual materials required by the market. If pocket calculators require gold and their is no gold on the market, then there will be no pocket calculators.

Now you print all the money you like, but without gold there will be no pocket calculators.

Money is simply a unit of account between the per capita units of Humanity. It doesn't matter if how many units of money are circulating. If 90% of the dollars circulating in the market are removed, then the remaining 10% will rise in purchase power to the former total quantity of dollars. This of course would be a classic type of deflationary scenario.

Printing money simply devalues the unit, it does nothing else.

China economic rise was coming to a kind of 3rd world status, it is not a developed economy where your point is more valid.

You make the example of calculators but in china example we are talking more something like working the land using a cow shifting to working the land with a tractor, the amount of wheat produced is higher and the best way to deal with that is to rise the amount of money in circulation, also because the wheat price is a commodity and not isolated to china. The way you see a healthy price reduction is a far more complex and negative aspect. something like why on earth I'm going to borrow money to buy the tractor when wheat will drop in price, the tractor value will drop in price and my debt with bank stay the same (more likely to grow) and the more wheat I make is not going to be enough to pay off the tractor loan. If you have prices dropping by 10% that mean you have a REAL interest rate of 10% (as rates don't go under zero), how good is that for investment and productivity gains?

But this doesn't mean that present China economy is sustainable

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The way you see a healthy price reduction is a far more complex and negative aspect. something like why on earth I'm going to borrow money to buy the tractor when wheat will drop in price, the tractor value will drop in price and my debt with bank stay the same (more likely to grow) and the more wheat I make is not going to be enough to pay off the tractor loan. If you have prices dropping by 10% that mean you have a REAL interest rate of 10% (as rates don't go under zero), how good is that for investment and productivity gains?

That's classic modern argument, but unfortunately it is complete BS.

That's because the tractor purchase was never economic in the first place. I could equally argue the problem of opening a Starbucks on the Moon and claim that money must be inflated because of the enormous cost of setting up on the Moon and the fact I'll get no customers.

The only real beneficiaries are the banks because they're taking a cut from twice the debt pile there would be otherwise.

10% that mean you have a REAL interest rate of 10%

No that's not a real interest rate, because there is no monetary deflation.

You could borrow 10 ounces of gold from me and return 11 ounces after a year. But there's no use telling me that getting back same 10 ounces in years time is somehow a benefit for me.

You need to come to grips with market utility. Having one personal house has a certain amount of utility, but having 10 personal houses isn't 10x the utility for you.

Eventually creditors, ultimately the real producers with their product withdraw their credit. Hence eventually real capital vanishes. No matter how much the government prints money, the market raises its prices faster. So eventually you end up with declining production.

US government gradually withdrew the surplus of civil war greenbacks 1865 to 1879. The US still had high growth rates in the midst of classic deflation. Matter of fact the 19th century had higher growth rates on the gold standard than anything seen in the 20th century.

The Chinese were printing at 11% per annum for many a year, now the real creditors a raising the price of their product. So the government is trying to race them.......the government will lose.

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That's classic modern argument, but unfortunately it is complete BS.

That's because the tractor purchase was never economic in the first place. I could equally argue the problem of opening a Starbucks on the Moon and claim that money must be inflated because of the enormous cost of setting up on the Moon and the fact I'll get no customers.

The only real beneficiaries are the banks because they're taking a cut from twice the debt pile there would be otherwise.

No that's not a real interest rate, because there is no monetary deflation.

You could borrow 10 ounces of gold from me and return 11 ounces after a year. But there's no use telling me that getting back same 10 ounces in years time is somehow a benefit for me.

You need to come to grips with market utility. Having one personal house has a certain amount of utility, but having 10 personal houses isn't 10x the utility for you.

Eventually creditors, ultimately the real producers with their product withdraw their credit. Hence eventually real capital vanishes. No matter how much the government prints money, the market raises its prices faster. So eventually you end up with declining production.

US government gradually withdrew the surplus of civil war greenbacks 1865 to 1879. The US still had high growth rates in the midst of classic deflation. Matter of fact the 19th century had higher growth rates on the gold standard than anything seen in the 20th century.

The Chinese were printing at 11% per annum for many a year, now the real creditors a raising the price of their product. So the government is trying to race them.......the government will lose.

Still I don't agree with you,

may be you are right in a developed economy where you get amount of gold mined that keep up with increase in productivity in the long term and that works ok.

But in China now wouldn't with productivity improvement far above the increase of availability of gold, so that mean the cost of payoing things using gold would be far too high and will put a huge brake on the economy. Can you go to China and tell farmers that they don't need a tractor that can do in 10 minutes the work they use to do in a day? they'll have a revolution against governemnt. With gold standard in China banks wouldn't lend anything that is needed as there would not be enough gold to pay the banks back and banks will not get their money back in most cases.

Edited by boz

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Still I don't agree with you,

may be you are right in a developed economy where you get amount of gold mined that keep up with increase in productivity in the long term and that works ok.

But in China now wouldn't with productivity improvement far above the increase of availability of gold, so that mean the cost of payoing things using gold would be far too high and will put a huge brake on the economy. Can you go to China and tell farmers that they don't need a tractor that can do in 10 minutes the work they use to do in a day? they'll have a revolution against governemnt. With gold standard in China banks wouldn't lend anything that is needed as there would not be enough gold to pay the banks back and banks will not get their money back in most cases.

Good grief! It doesn't matter how much gold there is. David Hume one of histories greatest minds told us that.

If the amount of gold remains constant with population then individual purchase power remains the same in terms of gold overall.

A hundred years ago the male basic wage was 42 shillings a week, that bought a tad less than half an ounce. Today half an ounce is worth $670. How can you beat that sort of accuracy. A 100 years ago there was 3/4 ounce per world capita and today it is the same.

If the supply of goods increases with productivity improvements, then those goods fall in price against individual purchase power.

so that mean the cost of payoing things using gold would be far too high and will put a huge brake on the economy.

Doesn't, matter the only winner is the one who prints the money, the market still has to buy that paper money as if it were gold.

Perhaps you can point to the affordable modest home that can be purchased with fiat money. The only ones it benefits are speculators who are a dead weight on the market.

The 19th century went from a transportation system little better than that of the Greco Romans to the modern motor vehicle in two generations, how did they manage that on gold money? They went from starving serfs to workmen who could afford a few luxuries at the corner store. Gold money supported innovation in a way we haven't seen since.

1900 is when Western culture reached its height, it's been downhill ever since.

Fiat money is simply a way of robbing Peter to pay Paul. Peter will simply become pissed and punch Paul's lights out.

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Good grief! It doesn't matter how much gold there is. David Hume one of histories greatest minds told us that.

If the amount of gold remains constant with population then individual purchase power remains the same in terms of gold overall.

A hundred years ago the male basic wage was 42 shillings a week, that bought a tad less than half an ounce. Today half an ounce is worth $670. How can you beat that sort of accuracy. A 100 years ago there was 3/4 ounce per world capita and today it is the same.

If the supply of goods increases with productivity improvements, then those goods fall in price against individual purchase power.

Doesn't, matter the only winner is the one who prints the money, the market still has to buy that paper money as if it were gold.

Perhaps you can point to the affordable modest home that can be purchased with fiat money. The only ones it benefits are speculators who are a dead weight on the market.

The 19th century went from a transportation system little better than that of the Greco Romans to the modern motor vehicle in two generations, how did they manage that on gold money? They went from starving serfs to workmen who could afford a few luxuries at the corner store. Gold money supported innovation in a way we haven't seen since.

1900 is when Western culture reached its height, it's been downhill ever since.

Fiat money is simply a way of robbing Peter to pay Paul. Peter will simply become pissed and punch Paul's lights out.

You are a very stubborn on this.

It is not on population number that gold need to be related to but to productivity numbers and GDP numbers.

When you look at 19th century, hom much was the increase of gold production back then? and this golden era, on how many country effected and how many people? Also what was the expectancy of life increase in 19th century compare for example to 20th century?

With a economy based on credit and that need borrowing and lending to survive like it is now in most of the world you can't afford to have massive good price deflation related to currency or gold weather that is the currency, this is valid to China and emerging economy. The western world in 19th century wasn't like China playing the catch up. gold standard wouldn't just work out for China, also do you think the rest of the world will sit and watch all this gold shifting and moving to China? Sure US wouldn't mind to flog more and more US$ FIAT money to China, but not US gold.

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You are a very stubborn on this.

It is not on population number that gold need to be related to but to productivity numbers and GDP numbers.

Boz, money is an abstraction whether you use paper, gold or sea shells. Money is a synthetic commodity that simply represents the value of trade but is not the goods and services themselves.

The way you see a healthy price reduction is a far more complex andnegative aspect. something like why on earth I'm going to borrow moneyto buy the tractor when wheat will drop in price, the tractor valuewill drop in price and my debt with bank stay the same (more likely togrow) and the more wheat I make is not going to be enough to pay offthe tractor loan.

That's because there is no reason to, the activity was uneconomic in the first place. Making uneconomic activities appear economic via monetary manipulation doesn't improve the market, it destroys it.

The market expansion of the past two generations had little to do printing money and a hell of a lot to do with oil production. Not much use in a tractor when there isn't the oil to drive it.

A market can change the goods and services it offers, but it can't change what fuels it.

gold standard wouldn't just work out for China, also do you think therest of the world will sit and watch all this gold shifting and movingto China? Sure US wouldn't mind to flog more and more US$ FIAT money toChina, but not US gold.

WTF? Who is forbidding the Chinese to have gold?

Boz, you have not got the slightest idea how money and economics works.

While the USD is ticket to oil, it is valuable to the world. When that connection ceases the USD will only be good for a trip to Disneyland

One Day, Single Park
  • Admission to one park only
  • Children $68.00, Adults $76.00

.

Admission 2 adults and 2 kids = 3 barrels of oil.

Now which is the more valuable or are they equal value?

Edited by wulfgar

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Who is forbidding the Chinese to have gold?

The biggest western gold owner central banks are not selling their gold these days, the amount of gold around is limited. To sustain a 10% gdp growth in China you need a consequent increased amount of money in the economy or gold weather this is a gold standard scenario, because there is not enough gold to move from the rest of the world to into china, as a consequence, with a gold standard monetary system China GDP growth will be far less then 10%, no doubt about that. I don't know ahow can you think china is better off with a growth of 5% or less instead of 10%, how can you say China is better off without tractors, Fridges, houses, railways or mobile phones? May be the rest of the world is better off but not the Chinese, may be you can just ask them.

While the USD is ticket to oil, it is valuable to the world. When that connection ceases the USD will only be good for a trip to Disneyland

. Admission 2 adults and 2 kids = 3 barrels of oil.

Now which is the more valuable or are they equal value?

that is not a good example, what you write can be done using any other currency, obviously the cost of providing disneyland entartainment is equivalent of the cost of 3 barrel of oil (that would be wages+ energy costs+ repayment on investment, etc), then your example is about US where gold standard might work.

But let's go back to the tractor example in China, you say buying the tractor is uneconomical, I say that I am better off to lend the money to the farmer to buy the oil to run the tractor in exchange of a healthy percentage of extra grain he get out of his land. There is no shortage of oil as you can go and buy it for around 90$ a barrell or the equivalent in grain if you don't want to use the $, more grain = more oil, no doubt about that.

Let's make the example simple: If and when there is a shortage of oil its cost in $ or grain will go up, then you get farmers that goes to the tractor shop saying this is no good, the tractor is uneconomical, then you'll get a clever tractor factory that sell tractor more efficient that use far less oil and you can have far more tractors around the world, but then, may be one day farmers strat going back to the factory stating is getting uneconomicalagain, but then some other maker come up with the idea of using other fuel sources like methane, this will go on and on untill one day in the future there will be not much oil around and world is using something else. In any case if a tractor would be uneconomical in China will be very likely it is uneconomical in most of the part of the world.

A market can change the goods and services it offers, but it can't change what fuels it.

yes it can. like you said in 19the century oils wasn't available and we had great growth, in the future if oil will not there we'll have something else. In all these millenia nothing has stopped civilisation to grow, don't think a single element like oil will stop it, it might just slow it down for a while...

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http://www.zerohedge...gainst-them-all

A snippet:

Chinese Hard Landing

While Grice is obviouslyfar less worried about a systemic deflation scenario arising out ofevents in the US, what may happen in China is obviously a far riskierproposition, and one that could generate deflation out of theproverbial "Hard Landing." Luckily there is an instrument with somewonderfully convex properties to hedge this...

Albertcalls China a ‘freak economy.’ Certainly, running with an investment toGDP ratio of over 50% doesn?'t seem normal. Neither does keepinginterest rates at 5% when the economy is growing by 15% in nominalterms each year. Such lax monetary conditions have helped land pricesrise by 800% in the last seven years, according to NBER economists. Andwhen you come to think of it, more recent examples of real estateinflation fuelled by negative real interest rates ? Ireland, Spain, theUS ? didn?t end too well. Jim Chanos says China is a shortseller ?sdream and that there?s not one company he?s looked at that passes theaccounting sniff test. And if Jim Chanos, who built a very successfulbusiness around spotting accounting gimmickry says something like that,my guess is he?s right.

Taking a step back though, as far as I?maware all industrialized countries have experienced financial crashes.It seems a part of the maturing process. Why should China be anydifferent? A credit crisis wouldn?t necessarily mean the end of theChina story any more than the panic of 1873 meant the end of America?s,(though US demographic prospects were considerably more favourable atthe end of the 18th century than China?s are today ?). For the record,I think the Chinese have a bright future. My son is learning Mandarin.But when I look at the numbers I can?t help but think there?s going tobe a crash and that it?s going to be quite unpleasant. It?s just thatmy guess as to when it?s going to happen is as good as Kevin Keegan?s.

China%20Hard%20Landing%20Grice_0.jpg

What happens if and when the inevitable crash happens? One word - Australia. Another word(s): 10x-20x payout.

Whenit does happen though, the Australian economy will be toast and itsgovernment bond yields will collapse. During the panic of 2008, AUD 10yswap rates fell around 3% to 4.40%.

The panic of 2008 was a ?good crisis? for Australia though. A Chinese crash would be more serious.

Andyou can get pretty attractive odds on AUD rates collapsing. Thefollowing chart shows the payout available using AUD receiver swaptionsprices with a three-year maturity, based on the 10y swap rate.Effectively, these are put options that pay out when rates fall belowthe strike price. The prices I?ve used here are from Bloomberg based onthe swaptions striking at about 5.5% (i.e. 100bp below the current rateof 6.50%). What'?s interesting is that at current prices, if Australianswaps were to break their 2008 lows, you'?d be making about 10x yourpremium (for the record, these swaptions are priced at about 120bps, or40bps per year over three years, which is about the same as theannualized revenue you?'d get if you sold the CPI floors discussedabove). If swap rates fell by 300bps ? as they did during the panic of2008 ? the rate would fall to 3.5% and you'?d make nearly 15x yourpremium. To repeat the point I made earlier, this isn?'t arecommendation. It?'s just a starting point (my guess is that you'?dfind more attractive payouts as you went further out of the money withthe strike price, and that capital structures of Australian banks,property companies and levered resource stocks would be worth lookinginto too).

Australia%2010x%20Payout_0.jpg

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The biggest western gold owner central banks are not selling their gold these days, the amount of gold around is limited.

I can tell you for a fact the central banks have bugger all gold. So the Chinese don't have to get past the central banks, all that gold is on the street for sale to the highest bidder. All the central banksl have got are ious for gold from investment banks.

that is not a good example, what you write can be done using any othercurrency, obviously the cost of providing disneyland entartainment isequivalent of the cost of 3 barrel of oil (that would be wages+ energycosts+ repayment on investment, etc), then your example is about USwhere gold standard might work.

It takes a little brains to understand what is involved here. But answer the question, which is more valuable, the oil or the ticket? Or are they both the same?

There is no shortage of oil as you can go and buy it for around 90$ abarrell or the equivalent in grain if you don't want to use the $, moregrain = more oil, no doubt about that.

There might not be a shortage of oil at $90, but there definitely a shortage of oil at the 2003 price of $20. There's an interesting concept for you, digest it.

Let's make the example simple: If and when there is a shortage of oilits cost in $ or grain will go up, then you get farmers that goes tothe tractor shop saying this is no good, the tractor is uneconomical,then you'll get a clever tractor factory that sell tractor moreefficient that use far less oil and you can have far more tractorsaround the world, but then, may be one day farmers strat going back tothe factory stating is getting uneconomicalagain, but then some othermaker come up with the idea of using other fuel sources like methane,this will go on and on untill one day in the future there will be notmuch oil around and world is using something else. In any case if atractor would be uneconomical in China will be very likely it isuneconomical in most of the part of the world.

If it's so economical, then why does the principle of loan have to be devalued? Answer that Gunga Din?

If i lend something real like oil to somebody, I expect the full amount back......not less.

Yours is the religion of the deadbeat. Lend me a tener and i'll pay your back five.

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There might not be a shortage of oil at $90, but there definitely a shortage of oil at the 2003 price of $20. There's an interesting concept for you, digest it.

this shortage/oversupply doesn't have much sense, I agree there was a shortage at 20$ but there was a oversupply at 150$, I agree with you on US$ and that it is not good to price things with and eventually dead as globabl currency,

If it's so economical, then why does the principle of loan have to be devalued? Answer that Gunga Din?

If i lend something real like oil to somebody, I expect the full amount back......not less.

who said it has been devalued to lend money to buy a tractor or to buy oil to run tractor? it would be like that if you pick particular time and would be the other way around near the peak of commodity bubble 2.5 years ago. But overall In China and in most of the world people are making heaps of money to lend and invest them, that is explained by money growth of 15+%.

Anyway, on the bottom line it all depends what the lending deal is and how much is the interest and the term of repayment. Gold standard in China would not give them enough money to lend.

Eventually in the future china will have its currency stabilised against something else then the US$, like a basket of commodity and the money groth can be under control in line with productivity increase and GDP, that would be less risky to develop a bubble then it is now. The key thing is that you need a system that find enough money to finance development and productivity improvement. Untill now inflation in China has been under control so, any devaluation hasn't been a issue at all. Also another key thing in china is directing money in the right place, it is far different to finance home price increase then to buy tractors.

Whateve will happen to China and even if they'll have a hard lending that bankrupt half of the country and the banks, the tractor, rrailways, houses, mobile phones etc will remain, so can't be that bad what China did in the last 20 years.That wouldn't be around with Gold standard that makes most of things "uneconomical"

Edited by boz

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The key thing is that you need a system that find enough money to finance development and productivity improvement.

Money is illusion, what borrowers actually borrow are the surplus goods and services of others..

Untill now inflationin China has been under control so, any devaluation hasn't been a issueat all. Also another key thing in china is directing money in the rightplace, it is far different to finance home price increase then to buytractors.

Whateve will happen to China and even if they'll have a hard lendingthat bankrupt half of the country and the banks, the tractor,rrailways, houses, mobile phones etc will remain, so can't be that badwhat China did in the last 20 years."

The teason printed a lot of money, was to keep the domestic price of labor low in a begar they neighbor strategy.

That wouldn't be around with Goldstandard that makes most of things "uneconomical

Yes, it might even make the construction of empty cities and bridges to nowhere appear uneconomical.

Neither monetary inflation or deflation are good things, money is at it's efficient at a neutral level. Anything else diminish trade. Money must not be a disadvantage to either party in transaction.

Eventually inflation destroys trade because the producers of surplus goods close up shop. You dismiss the producer, all you think is important is the one who borrows. They could get away with inflation while the thing critical to producers, oil could be increased.

When peak oil hit, the jig was up for the inflationist.

There may not be a practical limit yet on stuff like labor, copper, iron ore. But there is definitely a limit on oil and that is what you need to move the rest.

If build a million motor cars buy only have enough tires for 100,000.......then all you got is 100,000 functional cars. Yet you believe that building the other 900,000 car bodies is going somewhere.

That's the problem, there may not be a practical limit on many other goods and services, but the oil needed in the equation is in shot supply.

Funny thing is Aus is one of the nations where oil consumption has risen since the GFC. Aussies lead foot while other nations that desperately need the oil starve.

http://webcache.goog...w.google.com.au

It takes thirty-five calories of fossil fuel to make a calorie of beef this way; sixty-eight to make one calorie of pork.

Something I understand well. The reason the Roman Empire was so successful is the mediterranen basin enabled cost effective transport of calories in the form of olive oil and grain to regions that would have starved without those extra calories. Back in those days olive oil was used to fuel lamps for lighting as well.

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Money is illusion, what borrowers actually borrow are the surplus goods and services of others..

The teason printed a lot of money, was to keep the domestic price of labor low in a begar they neighbor strategy.

Yes, it might even make the construction of empty cities and bridges to nowhere appear uneconomical.

Neither monetary inflation or deflation are good things, money is at it's efficient at a neutral level. Anything else diminish trade. Money must not be a disadvantage to either party in transaction.

Eventually inflation destroys trade because the producers of surplus goods close up shop.

I agree with this

When peak oil hit, the jig was up for the inflationist.

There may not be a practical limit yet on stuff like labor, copper, iron ore. But there is definitely a limit on oil and that is what you need to move the rest.

If build a million motor cars buy only have enough tires for 100,000.......then all you got is 100,000 functional cars. Yet you believe that building the other 900,000 car bodies is going somewhere.

That's the problem, there may not be a practical limit on many other goods and services, but the oil needed in the equation is in shot supply.

I am not too worried about peak oil, we are not going to have a "peak energy" what we use as energy mostly is oil, and at present is cheaper the other sources of energy, so to peak oil would mean a increased cost of pruduction or reduced productivity, so a bit like the 70's when oil prices spiked on a eceonomy very much based on oil, peak oil will result in something similar to a recession but the world will move on a different path of growth.

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I agree with this

I am not too worried about peak oil, we are not going to have a "peak energy" what we use as energy mostly is oil, and at present is cheaper the other sources of energy, so to peak oil would mean a increased cost of pruduction or reduced productivity, so a bit like the 70's when oil prices spiked on a eceonomy very much based on oil, peak oil will result in something similar to a recession but the world will move on a different path of growth.

:rolleyes:

800px-1988-1994_Ford_Maverick_wagon_02.jpg

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looks exactly like we are not at peak oil jet. near peak oil you'll see more people start doing something about it

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looks exactly like we are not at peak oil jet. near peak oil you'll see more people start doing something about it

Boz that isn't what peak oil means. Right now the world is using on a daily basis, more oil than it has ever used. What peak oil means is the expansion of daily production is coming to a halt, basically oil production could simply plateau for a few decades. One difference is that average quality of the crude being extracted is rapidly diminishing

Right now Australia alone uses on a daily basis 20% of what the entire planet used while fighting WW2. .

These were becoming the latest fad when peak oil hit. 3 tons with 6 liter V8.

balsa-humvee.jpg

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looks exactly like we are not at peak oil jet. near peak oil you'll see more people start doing something about it

Boz that isn't what peak oil means. Right now the world is using on a daily basis, more oil than it has ever used. What peak oil means is the expansion of daily production is coming to a halt, basically oil production could simply plateau for a few decades. One difference is that average quality of the crude being extracted is rapidly diminishing

Right now Australia alone uses on a daily basis 20% of what the entire planet used while fighting WW2. .

These were becoming the latest fad when peak oil hit. 3 tons with 6 liter V8.

balsa-humvee.jpg

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