High

During the past week or so, I’ve been reading the thoughts of the American economist: ‘John Kenneth Galbraith’. His book: ‘The Great Crash of 1929’, looked back at the events of the stock market crash from the safety of twenty five years afterwards. The words documented the rise and fall of one monster speculative bubble. It’s hard to believe, but that historical moment was almost a century ago, and I do wonder if in these more enlightened times of stock market highs, whether the lessons of the past have been forgotten. Always wise to check in on the past, to see what it has to say about the present.

The book brings to mind memories of my grandfather, the irascible and genuinely charming old bloke. He grew up on a farm in the town of Kyabram during the combined troubles of a very serious drought and of course The Great Depression. His grandmother raised him, under mysterious circumstances which were never revealed to yours truly, but one wonders. Some questions are best not asked in polite company, but even so I reckon there is some mystery in that story. In this instance, perhaps my preternatural curiosity is indicative that the charm which he so casually wielded, was not handed down in the genetic mix. Oh well, these things happen.

Anyway, back to 1929. Despite the early monster mania, towards the end of that year times got tough, and they sure ended up even harder in the following years. I faced 10% unemployment in 1992, but that’s just peanuts compared to the almost 33% unemployment rate in 1932. I survived the littler 90’s recession, thirty four years ago now, by stooping to do corporate debt collection work. It’s hard to imagine what the Great Depression would have been like, but I reckon if a third of the population was unemployed, I’m guessing that even a dirty debt chasing job wouldn’t be an option. Nobody would be lending any mad cash, to anyone, for any reason.

Crazy days, and it’s hard to ignore that the stock markets lately seem to be on an up, up and away trajectory. It is a truth universally acknowledged that gravity eventually brings most things back down to Earth. The tricky bit is that it’s hard to time the peak. The author / economist had something interesting to say about what actually pops a bubble, which is briefly reproduced here purely for educational purposes:

“for it is in the nature of a speculative boom that almost anything can collapse it. Any serious shock to confidence can cause sales by those speculators who have always hoped to get out before the final collapse, but after all possible gains from rising prices have been reaped. Their pessimism will infect simpler souls who had thought that the market might go up forever but who will now change their minds and sell. Soon there will be margin calls, and still others will be forced to sell. So the bubble breaks.”

Sounds like a truthful observation to me. And if you haven’t read the book yet, why not?

The funny thing about that big crash in 1929, was that no silver bullet was ever found. Turns out, like the fall of ancient Rome, there were probably, just as the cheeky song suggested: 99 problems.

There’s plenty of proverbial trouble looming on the horizon now. Earlier in the week, I paid a new record high price for fuel per litre:

An impressive achievement, and I’d imagine that some households are doing it super tough right now with their budgets. I’ve not read it mentioned anywhere, but a charmless act on my part would be to suggest that sales of petrol (ULP or Unleaded Non Ethanol Blend Petroleum) are subsidising the cost of Diesel (Dist or Distillate). It’s an unconfirmed theory, but very possible.

The entire train of thought, started the ol’ brain wondering that if a market crash occurred today, would there be any corporate debt collection work to keep the wolves at bay, food on the table and the rain off one’s head. And of course off Sandra’s head as well! Matrimonial harmony being a thing. The interweb is a wonderful place to source statistics, and here is what a mob called: ‘Trading Economics’, had to say about the growth in debt for the Private Sector over the past decade.

Phew! That’s a relief. With AU$1.45tn (trillion) dollars owed by the private sector (which presumably excludes government and households), there’s probably a lot of work right there in tracking down that lot and ensuring it gets paid, if that’s even physically possible. Well, we can put that fear into the trash, looks like even in a market crash, business in debt collection will be cracking.

It’s an impressive effort really given that serious economists down here suggest that we are already in an economic recession per capita due to sluggish growth. Maybe, it is the lack of charisma on my part which makes me wonder if all that mad cash has been borrowed and spent over the past decade, why has growth been so poor? Probably being hoarded. Here’s an interesting take on that story:

Fun fact: MØ is actually the stage name of a Danish singer from last decade. In this case however, M0 represents the physical and central bank cash reserve deposits held. It’s not hard to notice that during the health subject which dare not be named, there was what I’d describe as a distinct lack of trust on display. And it’s never really gone away, has it? Some of the borrowed mad cash is presumably hiding there in plain sight for all to see.

Households are also another factor in the mad cash story, but it’s actually difficult to find data on the growth in household debt over the past decade denominated in dollars. There’s probably a good reason for that. Turns out, that if the corporate world owes AU$1.45tn (trillion), the government just cracked the AU$1tn (trillion) a week or so ago, households alarmingly owe around AU$3.3tn (trillion) give or take a cool AU$100mn (million). Say, that’s a lot of debt, and working at collections could be an even more secure and lucrative industry in an economic downturn than I first thought…

There’s clearly some strange economic shenanigans going on, and few strike me as weirder than the ever expanding mad cash supply which the government more or less orchestrates. The statistic M3, pretty much includes all of the cash-like stuff in the economy. Check out this baby for growth:

A very impressive achievement indeedy, and alert readers will note that the trend almost matches the growth in corporate debt. I’ll bet the curve for household debt looks much the same, if I could find the data. It’s truly baffling to me that all of this paper mischief has continued for as long as it has, and yet produces such sluggish economic growth but increased prices. I don’t know what to make of it all, but I reckon I can guess what my charismatic grandfather would have called the muppets in charge. Oops! Without breaking the house rules, you know what he’d have said…

It’s been a warm and dry week, which has been perfect to commence the annual firewood harvesting and processing. Longer term readers will note that this task has traditionally been done in the warmer summer months of December to January. However, with the new firewood shed, the job can be done in an earlier month, when it’s cooler – which is a nice thing.

Two windfall trees were split and hauled.

Both trees were cut into discs months ago as part of the forest clean-up work. This week we drove the splitter down to the forest edge. It did what was needed to be done. Then the results were hauled back uphill and stored in the new firewood shed. Observant readers will be able to see the tree stump still in the ground just to the right of the black poly trailer. It’s horizontal, whilst trees are meant to be vertical. We’ll stump grind that up over the next few months.

Here is the other windfall tree (and that too has a stump on a funny angle):

The friendly family of magpie birds follow us around when we’re working, and they’ll happily pick over and consume the many insects discovered due to that activity. I for one particularly hope they got the scorpion that almost stung me.

Three trailer loads of crushed rock with lime were purchased and brought back to the property and placed on the path project. That’s a wrap, and the project can be declared: officially completed!

We had a bit of spare crushed rock with lime left over from the last trailer load. That’s when we remembered that the area next to the large water tank just further down the hill hadn’t been finished from last summer.

The rest of that area will be sorted out during the coming week.

We’re closely following the season this year, and it felt right to plant out the peas. The seeds looked rather shrivelled and sad, but after four hours in warm-ish water, they’ve sprung back to life:

Planting them out involved pressing my thumb into the soil, dropping a seed in, and then gently covering it over with loose soil. The garden bed they’re now in doesn’t get much, if any watering. For those whom are unaware, I believe that pressing the soil down underneath a seed, restores natural capillary action and will give the little plant access to some water early on in its life.

Amusingly, at the time I was thinking to myself of the crusty old farmers proverbial observation about dirt under the fingernails. There were a lot of pea seeds planted out!

We’ve started eating the radishes grown from seed in the greenhouse. They were only started a few weeks ago, and are delicious:

Salads are also enhanced by the many leafy greens, fresh boiled eggs, but I’m also a big fan of the Globe Artichokes.

The plants here are monsters at almost five feet tall. They’re of the thistle family but differ from all of those hardy weeds because in order to produce tasty chokes, they require super fertile soil. Skimp on soil feed, and they won’t taste good, or grow well.

The ten grape vines have begun to produce buds. Hopefully this year there aren’t issues with fungi, but time will tell.

We grow a lot of currants and other small berry producing shrubs like jostaberries and gooseberries. We didn’t get around to pruning them, and will have to do so next year. Hasn’t seemed to have impacted upon production.

At times this week, the air has literally buzzed with insects. It is one of the reasons we grow so many different varieties of flowers. The hum is audible, and one has to be careful pulling weeds:

Onto the flowers:

The temperature outside now at about 11am is 20’C (68’F). So far for this year there has been 1,012.0mm (39.8 inches) which is up from last weeks total of 1,009.6mm (39.7 inches)