Things have been quiet on the DTM front since moving out of Mon Abri. Having inherited my mother’s smart phone, I have actually mastered (well, kind of…) the art of mobile internet, but I draw the line at writing blog posts on those small screens. We are still waiting for an internet connection at my MiL’s place, and hopefully it will arrive before I leave for Tasmania on the 5th of September, and I am typing this at the Noosa Library where the net is actually very fast.
It looks like we sold just in time and getting out of debt when we did was a bonus. But now I worry our money might devalue before I have a chance to spend it all. It certainly looks like the Chinese bull has been slain, and the red ink is flowing – or is that red LED’s in this new modern world of algorithmic trading by digital means? Our treasurer is lying through his teeth – as usual – telling the world and anyone stupid enough to listen, that ‘the fundamentals’ are just fine, when in fact they are thoroughly broken. Even the young lady making market announcements on ABC TV’s morning news admitted it was her job to say this was a mere correction and not a crash….. I kid you not!
I even heard some ‘expert’ pronounce that China’s official growth figures of 7% were way overblown, and were more likely to be between 0 and 4%. Zero? Yep, that’s what she said….
Chinese state and private debt currently total about 300% of GDP. If you think that the GDP number they publish is too high, the debt percentage goes even higher. China has a lot of debt any way you look at it, and much of it is dollar-denominated, hence the recent devaluation of their currency which seems to have triggered this current crash.
The best article I have read about this whole affair came from The Automatic Earth:
Central banks will come up with more, much more, ‘stimulus’, but what China teaches us today is that we’re woefully close to the moment when central banks will lose the faith and trust of everyone. After injecting tens of billions of dollars in markets, which thereby ceased to function, the global economy is in a bigger mess than it was prior to QE. The whole thing is one big bubble now, and we know what invariably happens to those.
More QE is not an answer. And there is no other answer left either. Those tens of trillions will need to vanish from the global economy before any market can be returned to a functioning one, and by that time of course asset prices will be fraction of what they are now. It may not happen today, but that doesn’t matter: what’s important to know is that it WILL happen.
And if you keep being out there trying to outsmart a non-functioning market, you’ll get burned as badly as the millions of Chinese grandmas who already lost 20%+ so far just this month. And that’s just on their share holdings; Chinese property ‘markets’ will be at least as badly burned.
Raúl Ilargi Meijer nails it here in my opinion…..
China’s leaders, and its people, have walked eyes wide open into an ugly albeit nigh perfect trap. They’ve all started to believe that borrowing more could make them richer. Outstanding credit across the entire society has reached idiotic proportions. We can get somewhat of a glance at what levels debt have reached in Steve Keen’s Is This The Great Crash Of China?, in which he argues that a crash is inevitable, simply given those levels.
The main advice we’ve always given with regards to debt deleveraging stands: get out of debt.
Meanwhile, the western financial press, which has been reporting on non-functioning markets for years as if they actually were still functioning, is worrying about a potential Fed rate hike, telling its readers and listeners that the US central bank ‘looks set to make a dangerous mistake’. But the real ‘mistake’ was made a long time ago.
And then there’s oil……. trading at under $38 as I type. Who would have believed this a couple of years ago? And petrol is still as dear as it was when oil hit $147 in 2008. I guess if the oil companies can’t make a profit at the front end, they have to recoup their losses at the bowser….
On a completely different tack, I have been working on Mon Abri MkII, and have probably come up with a final design, subject to Glenda’s approval…… I’ve even made a model of it:
The rear and internal walls will all be made of core filled concrete blocks for thermal mass. I expect that the rear wall – which is 3.2m high – will be backfilled with as much as 2.5m of earth moved from cutting the flat pad for the slab floor……
The ‘missing bits’ at the front (North facing side) are literally all double glazing, and I may even triple glaze the bits in the peak that light the triangular wedge at the back. Starting in the middle, which is the living space, the low wall is under the kitchen windows. The blank wall is the pantry/store room which is a replica of the one I built in Cooran, complete with hot water storage tank; the ‘new AGA’ will be against the right hand wall of this room, connected to the hot water tank. To the left of that is a bathroom, and to the left of that will be a bedroom. The other end of the house is a mirror image, sans the pantry….
With all that thermal mass and heavy insulation, I expect this house to never drop below 18 degrees, even when it snows outside, as it would have done recently when Tasmania experienced low level snow three times in a fortnight!
Now all I need is a draftsman to finalise my plans………. any takers?
Eleven more sleeps, and I’m off to the deep South…… and not too late either, it’s already getting almost too warm for me already up here in the sub tropics.