You’d have to have been asleep in a deep coma for the past week not to have noticed that there’s been some odd goings on in the world of banking. Usually banking is something of a very boring world, but not this week. Reading the news, the quotes of those in the know, and the folks with their hands on the policy levers, you’d have thought that everything was OK. On the other hand, for me it was frankly hard to shake the words of the eminent economist Irving Fisher who in 1929 (just prior to the market crash which lead to the Great Depression), proclaimed that: “stock prices have reached ‘what looks like a permanently high plateau.’” Yes, indeed, they didn’t.
Except my sleep was disturbed last evening. In the dark hours of the morning, Sandra reached for her water bottle, but instead knocked it onto the floor. A loud crash woke me with a hit of adrenalin. The light was then switched on as there was some concern that water was now all over the floor and possibly also the electrical board. It was hard to get to back to sleep again.
After the incident, I lay awake in the dark under the blankets. On the other side of the window, drizzle fell, water could be heard trickling into the tanks whilst marsupials crashed through the orchard and gardens. The thought ran through and around my head, how can you make the subject of banking sound absurd? Sleep was far away.
Sometimes dark nights, inspire bright ideas: Write about economics, but substitute lollies for mad cash. Oh what fun, plus the naughty acronym CBF could even be worked in as: Candy Bank of Forever. With the problem resolved, my mind was at rest and sleep took me wherever it goes. When the sun had risen, the wake up alarm went off. The nuisance machine was promptly shut down. Sleep took me again. An hour and half later, I staggered into the kitchen in search of coffee. Mornings are better with coffee.
Some stuff happened during that day. We continued work on excavations in front of the large shed. The job is nearing completion, but by 2.30pm we’d had enough. Tools were downed, backs were pat, things were cleaned and put away. Enjoyed lunch. More stuff happened. A very tasty toasted hot cross bun with melting butter was devoured in late afternoon. The dogs looked on and drooled with envy, but such foodstuffs are not for them.
By 8pm, sitting in front of the keyboard the idea of writing about candy no longer appealed. Probably something to do with never eating lollies these days, except when at the cinema of course. A bag of mixed lollies and a film takes me way back to fond memories of misspent childhood at the Saturday afternoon matinee double feature. My mother probably used the cinema as a cheap childcare facility, but hey, it worked! Except nowadays I rarely consume lollies which messes up the whole economics substitute story. Pah!
Whilst all this drama was going on in my head, the dogs looked exhausted. We’d been digging for many hours earlier in the day on the excavations. During that time, the dogs had been running around like crazy things doing who knows what. They were wiped out. And their dog rawhide chews sat in front of them. The words came forth: ‘You lazy dogs, those chews are expensive’. And there was the economics idea: Chewflation.
What is chewflation you may ask? That’s when there’s too much mad cash chasing a limited supply of dogs rawhide chews (i.e. the supply of mad cash increases, whilst the quantity of stuff to purchase doesn’t increase at the same rate, or even worse, declines). It’s real, and oh yeah, it’s happening. Prices for chews are on the up. Purely for research purposes for the blog, we went back and looked at how much we’d paid for chews over the past two years. And here are the results for packs of 20 rawhide chews:
- May 2021 $85
- December 2021 $100
- April 2022 $140
- October 2022 $145
- February 2023 $160
A bit of quick maths (and someone please correct me if I’m wrong) suggests that over two years, the price of chews has risen over 37% compounding annually. And as a fun fact, the dogs have consumed over 200 chews (as we buy 2 packs of 20 chews each time), so no wonder the canines are happy. Whatever, you heard it here first: Chewflation is real.
But how does the supply of mad cash increase all the time? Turns out the Federal Government down here spends between $30bn and $40bn more than it receives most years in recent times. It doesn’t sound like much, especially when it’s described as around 1.5% of the value of Gross Domestic Product (economically speaking that’s everything in the country). They don’t have to worry about messy loan applications either, the Reserve Bank just gives them more chews, sorry, mad cash, and notes it in their records. How cool is that? And that much extra mad cash sure can buy a lot of chews, around maybe 43 million of them. No wonder chews are in such short supply and going up in price.
The politicians and bankers don’t like the idea of chewflation. Dog chews are meant to be affordable, otherwise dogs might go look for something else to chew, like say: politicians and bankers. With that worry in their minds, they’ve recently tried to slow down expenditure on chews by making debt more expensive. That’s called raising interest rates. After all, if dog owners suddenly have to pay more money to the banksters, they’ll have less money to spend at pet food retailers. With less people buying chews, the prices won’t go up as fast. It’s all about quick maths, and chews.
Dog owners however, don’t like the idea of rising interest rates, after all the dogs will end up with less chews, then they might decide to bite the owners. Never a good thing. Sooner or later, bitten dog owners might ask the politicians and bankersters to take the bite instead. That’s happened in the past with balanced or surplus government budgets and much higher taxation on the wealthier folks, who can probably afford the chews and not notice the cost. This hasn’t happened, yet.
We’re in a funny hang time right now, and all of us are just muddling on through. Prices for chews are still going up. There’s simply more mad cash in the system each year chasing a finite number of chews. And politicians fearful of chewflation are putting the squeeze on their constituents through increased costs for debt. For them, it’s an easy option but pressure is oozing out all over the place, such as the tanking bond markets, or increased house prices. Unless something changes soon, the chews are going to go through the guts of the dog and come out the back end in a dirty big stinking pile of poop.
It was something of an Indian summer this week. The week began hot, then got hotter. The fire risk was bonkers on Saturday, and fortunately we survived unscathed. There were a number of planned burns in the area and the smoke contributes to beautiful sunsets.
At 11pm one evening the inside and outside temperatures were 23’C / 73’F. Bonkers given it is less than a week out from the autumn equinox.
We’d taken most of the week off paid work and got seriously stuck into excavating the flat area in front of the large shed. We dream of flat land, but the reality of our cheap land is that we have to make flat land the hard way. The first step was filling the steel rock gabion cages placed on that site last week. About a third of the rocks were scrounged from a now disused drainage project, and the remainder came from a steel rock gabion cage we’ve decided to relocate.
We then spent three days digging and relocating soil so as to create the new large flat site. The electric jackhammer broke up the clay, and the rototiller was used to turn the lumps of clay into a fine loam.
The machines make the job easier, but it’s still hard work hanging onto them.
The loosened soil was moved using hand tools, crates and wheelbarrows. After the first day, we’d created a fairly large flat site.
By the end of the second day, the flat site was much larger.
The digging continued for a third day.
By the end of the third day, the job was nearly complete. All that needs doing now for this stage of the project is properly shaping the ramp leading down onto the flat site.
Astute readers closely analysing the above photo, may understand how the machinery inspection pit works.
It wasn’t all work, and we had plenty of time off and did a whole bunch of enjoyable things during the week off. I cleaned up a large branch which had fallen, and as part of that job I cut out length of timber with which I hope to carve out an axe handle.
The axe head in the above image has a slightly non-standard wider opening. Basically, I haven’t been able to find a handle which will fit it, so why not just make one? The length of timber was roughly shaped using various saws and is now slowly curing.
The growing season fruit trees are just about done now and despite the hot weather this week, some of them are beginning to turn.
There’s still quite a lot of produce ripening, and the kiwi fruit for example, won’t be ripe for many months.
The pumpkins are coming to the end of the growing season, and we’ve harvested about a third so far. They’ve had a great season and we’ll be eating pumpkins for many months to come.
The Blackberry harvest is now over and we’ll probably clean up the bed for the winter soon and feed the soil over the next few weeks. On the other hand, Raspberries are continuing to produce some berries most days.
At night the place jumps with life. The other night we spotted a Barking Owl in one of the nearby trees.
Winter is coming though.
Onto the flowers:
The temperature outside now at about 9am is 9’C (48’F). So far this year there has been 110.6mm (4.4 inches) which is up from last weeks total of 107.6mm (4.2 inches)