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“Labor Can’t Manage Money!” Says Leader of The Party Who Left A Trillion Dollar Debt!

Now before the fact checkers get stuck into the headline, I’d like to withdraw it and admit that the Coalition did not leave a trillion-dollar debt, it was, in fact, a mere $889,000,000,000. However, headlines aren’t about accuracy; they’re either clickbait or some sub-editor’s way of making some pun that is neither funny nor actually connected to the topic.

Anyway, the point of this piece isn’t to point out the absurdity of Peter Dutton because we’re getting to the stage where doing that is like making one of those remarks which are totally unnecessary like, “It’s hot today, isn’t it?” or “Barnaby seems to be pissed.”

No, after talking to a couple of people yesterday, I realised that the average person finds much of the economic news confusing because they often think something is good news and it turns out to be bad news. At first I tried to explain that – when it comes to the economy – there’s actually no such thing as good news, there’s only news that isn’t as bad as it could have been or “I’m all right, Jack, so who cares about the millions that this news is screwing over…”

For example, take the Reserve Bank. They have decided that their one aim is to fight inflation. Therefore, they raise interest rates in the hope that this will bring inflation down without strangling the economy. And, of course, when I say without strangling the economy I mean without strangling it in a life-threatening way… It’s sort of like the Reserve Bank feels that this strangling is like some sort of consensual sex act. rather than the act of a psychopathic killer. Of course, the fact that it’s not consensual for a large number of people doesn’t alter the fact that the Reserve Bank is only doing this for our own good because what could be worse than inflation?

Ok, some might argue losing your job or your house or your business, but if you think long term then you’d have to agree that it’s a small price to pay to ensure that the Reserve Bank meet their inflation target of 2-3%.

For the average person with a limited knowledge of the way that markets work, the news that unemployment had drifted slightly higher would have been a cause for concern. However, the stock market reacted positively because the unexpected loss of jobs increases the likelihood that there’s a recession around the corner which will lessen the chances of an interest rate rise because conditions will be tougher and this will mean a reduction in profits of the stocks that went up in anticipation that there are fewer interest rate rises in the near future, which will, in turn lead to the price falling… but that’s next month’s concern.

Similarly, data that the economy is performing strongly may lead to a sudden crash in the price of a number of shares because there’s a fear that this will increase the likelihood of the government easing any stimulus measures such as quantitive easing. Now, for those who don’t understand it: Quantitive easing is when the central bank buys bonds, which it pays for them with newly created money, thus increasing the amount of money that banks have available to lend, which in turn can lead to increased lending and investment. So if we had a period of lower interest rates and QE there might be a situation where there’d be more money and people might use it to invest in things like… well, building new houses which would increase supply, which would lead to less inflation in the housing sector. But it would also lead to inflation in other areas such as champagne and caviar.

Anyway, as you can see through these simple explanations, there’s no such thing as good economic news, just things that the market can react to positively or negatively, and as every cloud has a silver lining, bad news is often good for the stock market, particular the stocks with holdings in silver deposits. On the other hand, sunny times may lead to sunburn and the market may react cautiously to good news because there’s no such thing as a free lunch, and the billion dollar profit may lead to the government increasing taxes on windfall profits.

And speaking of windfall profits, it was good to hear Peter Dutton stand up for the struggling gas producers who seemed happy with Labor’s proposal because they didn’t know any better. Dutton complained that Labor saw business and industry as instruments of the state and that the government wanted to “use the chains and whips of regulation and tax to control”, which, thanks to his softer side, he would never do, unless it was someone who desired chains and whips such as people who are unemployed or asylum seekers. He then quoted that intellectual giant Ronald Reagan who “let freedom solve the problem through the magic of the marketplace.” So, we are going to choose magic over whips and chains. I wonder if that will be the slogan for the next election. “If You Believe In Magic, You’ll Want Dutton.”

Finally, I can’t let this week slip by without bidding farewell to Stuart Robert whose service to Australia has included such things as single-handedly ensuring that at least one Internet company was making massive profits. He’s also responsible for clearing up that misunderstanding that politicians should ever tell the truth when the Cabinet policy is to ignore the law and lie through your teeth. A man whose lack of presence will be missed by all.

 

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8 comments

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  1. New England Cocky

    Agreed. Beetrooter is totally unnecessary for the economic development of the New England electorate. Indeed, his personal pecuniary interests appear to be around the Pilliga Scrub CSG gas lands where his promotion of the Northern Inland Railway that was totally rubbished by the Kerry Schott Review.
    .
    But ….. a fellas got to do what a fellas got to do to get a railway line past his ”grazing properties” under which there is reportedly large CSG reserves, and naturally as all NOtional$ think, that railway should be paid for by Australian voters rather than CSG exporters.
    .

  2. Brad Black

    Well, I for one would like to thank stuart robert for his wonderful efforts ….. to help reveal and trash the real LNP brand!
    Thank you stu! I’ll never forget your low brow style, your lack of genuine contribution to your country and its people, the lives you helped ruin through robo disaster and your misuse of taxpayer funds.
    I hope Karma provides you with an appropriate future!

  3. Geoff Andrews

    A masterly explanation of a mystery that even had the back room boys (and girls) at the RBA baffled until they realised that interest rate hikes would do the job on inflation which had been caused by the poorer 30% of the population having
    too much money to spend.
    What are your thoughts on the national debt?
    Do we need it?
    Who gave us the money?
    If it went into the economy, maybe THAT would explain inflation?
    After all, it’s only about $2500 per person per year for 15 years.

  4. Fred

    I often wonder what the situation would have turned out like,if the RBA never increased interest rates.I think we would have been fine,i mean whats happening now is people have to spend more money for products that were much cheaper a year ago,so the RBAs theory is to stop people spending so much money by raising interest rates,if everything is gone up of course your going to spend more money,to me inflation is a total misunderstood economic occurrence, and im quite sure any smart mathematician could solve this problem without putting the population though so much hardship

  5. andyfiftysix

    firstly i would like to say that the magic of the market hasnt turned up in rural australia yet. Got a message to go to work today, i quickly replied, yes i will turn up. Unfortunately it takes 6hrs to go from griffith to avondale heights on vodafone. So today i sit on my laptop and waste a working day.

    Here we have another perfect reason why “economics” is fucked. Inflation control is the target, fuck humans, they can easily find another job or start again. Assumed human behaviour will always make for interesting reasons that the logic doesnt add up.

    It just seems to me that the “economic” debates are just too all encompassing generalizations. What about the debt, what about inflation, what about unemployment, what about…………( the latest buzz word). Its all indicative of laissaires faire capitalism. In fact its usually a case of socialising the losses. Who pays for cleanups , recycling and other fuckups?

    We need to move to a Purpose Driven Economic Model. ( yes i just made that up). Start from the premise, What do we want from the economy and What resources do we have to achieve our goals? No micro management allowed because i wouldnt want socialism to creep in and we do love a bit of get up and go. My aims would be 1/ nobody without a roof. 2/ nobody hungry 3/ intellectual freedom for all 4/ medicine for all 7/ education for all 6/ government run CSIRO 7/ allow a healthy capitalism based market. If people want to invest their time and energy, we shouldnt put stupid roadblocks in front of them. for eample, in Thailand if you want to run a food stall, it costs about $300 for a trolley and utensils. you walk out to the footpath and start. Here your looking at $100,000 before you buy anyfood. Not saying we shouldnt follow good health practices but golly gosh, have we missed the wood from the trees? Recycling is another problem. We look at it as an expense. We should be looking at it as a social benefit. When a trailer of rubbish costs $200 at the tip, i would be inclined to just dump it somewhere. We have lost purpose in rules and behaviours. Instead of encouraging certain behaviours, we are turning people off acting in everyone’s interest. Freeways are built to take cars off suburban roads but then we make sure you have to pay your $10-20 a trip, thus making me want to avoid them like the plague. We do a lot of self defeating shit (super anyone, lol).

    Current thoughts are driven by ” whats the economy doing and how can we quantify it”. Its all reactionary and it seems we are always playing catchup. Just as we enter a new phase and learn the new “language” something else pops up and we start the cycle again. I for one just dont want to play this game. The RBA now for example says its ” inflation or jobs”. Its waiting for the new data to make a decision.

    Fred, thats an easy question to answer. If the feds never raised interest rates, the government would come under the spot light. I mean they would have to grow a brain and actually do real government work, lol. The sole reason for the RBA is so that governments wont have to cop the stick if they fuck up. Implying they know they will fuck up.

  6. Benjamin

    It looks like Stuart Roberts, just got an anal probe, from an alien proctologist. 😉

  7. Ian Parfrey

    @Benjamin Well it’s a change from him dicking those who could not defend themselves and caused needless deaths to many innocent victims. Fuck him and his big ears..

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