It was a sunny day way back in 1997 when an inkling that not all was right with the world, sneakily crept into my awareness. Sandra and I were at an auction for a house just around the corner. In Melbourne, house auctions are often a very public display of the actual monetary value of a property. It takes nerves of steel to ride through one of those things, but in some ways it’s a great equaliser because anyone in the audience can see who’s placing a bid. This auction sure drew the crowds. Two street frontages, and near to the local train station and shops. Big backyard too, not something you’d usually see in a house in the grungy, but up and coming inner city suburb of Yarraville.
The auctioneer called for final bids. Going Once, Going Twice, Going Three Times, Sold! A solid thwack could be heard as the auctioneer swished a heavy rolled pamphlet in a graceful downwards arc. His free hand stopped the momentum. A Samurai grand master could not have trained as hard and executed the swing as precisely. The crowd clapped politely at the free street theatre. The highest bidders were quickly whisked away to sign the paperwork lest they escape. Excited chatting people happily dispersed, possibly on the hunt for the perfect latte.
The thing is, the auction left me with an awful question to ponder. How was the house suddenly worth more than expectations, when nothing of any note had been done to it? It was a brand new experience. Twenty six years later and that big old balloon has just been going up, up, and away into the clouds. It’s a bit bonkers really, if only because wages have never kept up with that increase in house prices. But also on a more practical note, the things are there to keep the rain off your head, and warm on an otherwise cold spring evening.
Plenty of people have made a lot of mad cash on this housing bubble. That’s called speculation: The idea that something will be worth more, just because. A few elections ago one of the major parties campaigned on changing some tax laws so as to make speculation on houses less attractive. They didn’t win the election, and the policy got dumped. I’m left wondering at what point the system no longer makes any sense.
Every year at about this time, the bill for the house insurance arrives in the mail. What horror have they got in store for us this year? Two years ago, we shopped around, saved some mad cash, but again the amount is back on the right track – upwards. And the quotes are worse elsewhere. Anyway, this year the premium increased 32%. Serious people advise us, and they might even believe it, that inflation is only hovering around 7%. Sure, whatever. But a 32% annual rise is pretty impressive in anyone’s books.
Maths isn’t my thing, but I can use a spreadsheet and the back of an envelope. A rough rule of thumb suggests that a 7% annual increase means prices will double in 10 years. But what the heck will an annual 32% increase do over the same time period? Probably blow my mad cash reserves and income right out of the water, that’s what! Anyway, here’s what I worked out:
The green line projects just how much of my annual income would be required to pay for this single insurance bill. On that basis, by 2031 half an hour of every paid hour I’d work, anywhere, would go towards that one bill. An impressive achievement. It’s worth noting, that instead of applying the trend-line of the increasing % each year, I just used this years increase to keep things simple. The results would have been a whole lot worse had I used the trend-line.
It’s truly and utterly bonkers. One of economic issues during The Great Depression was that there was too little mad cash, chasing too much stuff. I’m guessing that sooner or later, Western civilisation might just get to find out what the other end of that story looks like. And people voted for this outcome.
I was feeling a little bit unwell when I received the bill in the mail. Afterwards, I went down hill health-wise for a few days and just rested up. I’d like to say the bill was responsible for my ill health, but that would be telling tall tales. It was a good time to be sick because the weather was awful.
By the time the sun shone, I was feeling better, and was able to potter around the place, just doing maintenance activities. All of the farm machines had their air filters cleaned, oil levels checked and fuel taps tested. A fuel tap which had failed, was replaced on a walk behind slasher / mower. All of the machines were run for a few minutes each, and I’m aiming to do this maintenance work every two months. It’s cheaper and quicker than sending them off for expensive repairs because they’ve sat unused for too long.
We’re getting pretty good at repairing these small farm machines, and last week Sandra and I determined which exact component of a small mower had failed. Respect to the good people (Chickanic / Steve’s Small Engine Saloon / TheRepairSpecialist / Clever Fix) who produce astounding quality YouTube videos providing solid advice and guidance. An order for the replacement $15 part was placed with a supplier. The part arrived in the mail during the week. And on a sunny day over the weekend, Sandra installed the part whilst Dame Plum and I sat to the side enjoying the warm spring sunshine. The previously dead machine started up first pull, and I’m pretty sure we all did a happy dance to celebrate the achievement, even Dame Plum joined in.
Not all machines are made to be repairable. We had a failed batch of yoghurt last week. We back slop from one batch of yoghurt to the next, as well as adding a tiny bit of new bacteria each week. But with a ruined batch, you can’t back slop because of the contamination. You just have to start all over again. The next batch worked. Then the batch afterwards didn’t work. In order to discover where the fault lay, we eliminated every possibility but one. The machine was stuffed. As Sherlock Holmes was wont to arrogantly quip: “when you have eliminated the impossible, whatever remains, however improbable, must be the truth?” Personality flaws aside, the fictional dude was correct!
The batch felt hot, but it wasn’t hot enough for the bacteria to set the yoghurt properly. The lesson here: Digital displays are perhaps sometimes indicative only, and accuracy is to be found elsewhere. I hold some doubts as to whether I’ll be able to fix this machine, or even whether it is economically worthwhile to do so given it has worked continuously for nearly a decade.
We squeezed a small bucket of the Meyer lemons and froze the juice for later use. I have rather been enjoying a splash of lemon juice in my tea during my hours of need!
Spring is certainly here. The very first of the seasons asparagus spears have begun poking their heads through the soil, and gracing our meals.
Onto the flowers:
The temperature outside now at about 10am is 11’C (52’F). So far this year there has been 622.0mm (24.5 inches) which is up from last weeks total of 610.2mm (24.0 inches)