It is Obvious

Chris Rick has got altogether too much to say

Archive for May, 2017

Got any spare change?

Posted by chrisrick13 on May 23, 2017

It is obvious: never a borrower or a lender be

It is a long time since I heard anyone say that they had paid into their state pension for 40 years and deserved their pension.  I don’t disagree that they have a good claim that they have put in for a long time and now they can take some out.  However their money (mine and yours as well) just paid for current pensioners.  There was no fund created as happens when you create your own pension…if you are foolish enough to do so.  There is nothing there to be taken.

Pretty well everyone has worked that out.  There is a fiction in place: as long as you have children who work then they will pay for your pension.  It is the same for government debt.  Borrow now and let your children pay for it.  Another alternative is to borrow then create inflation to make the money that you return to the lenders worthless.  A more helpful scenario is to borrow now and then increase the earning power of the country as a whole then it is easy to pay the interest on the debt with the increased income.

Yet another scenario is to borrow and spend and hope nobody will notice until you are long gone.  This is very much the Labour view.  Borrow and spend and someone else will have to solve the problem some long time into the future when you don’t care.  You might well borrow and ‘invest’ in infrastructure but it is a long and very uncertain road to some increase in income that will somehow be made available to repay the loans.  Borrow to build a hospital and keep people alive today but you will kill many more in twenty years.  However you don’t know them and they don’t vote for you…though one of them might be you.

Borrowing money is also an uncertain game.  Today you might borrow without interest.  If you have money to repay the loan when it comes due then all is well.  Suppose that all you do is roll-over the debt as the UK has done for a very long time.  Then the money is re-borrowed at the current interest rate.  Suppose that has gone to 5% from 0%.  Then you have a problem.  All the solutions are ugly.

Suppose those people who lend can see where this is going, and they can, then they might charge you (the UK) 20% to borrow as they know that inflation and currency devaluation are likely events.  It becomes more than ugly.

But we all know this or we jolly well should.  It is inevitable.  High levels of inflation.  Very low value of the pound.  Rioting on the streets.  Because of the Euro they only have one of those in Greece.

At least the crash will be short if painful.  Then we will recover and quite quickly but the people who will suffer most are those who thought about what they might do for the future – saving and lending the money to be used until they needed it.

It is obvious: never a borrower or a lender be…as if we ever had any say in it

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I, robot

Posted by chrisrick13 on May 18, 2017

It is obvious: I am a man

I have watched the increase of robots in our society.  It might have been with some trepidation but at 66 I have no fear of a robot taking my job.  I know that advances are fast but I am too old for Skynet to arrive and change my life either.

I think that ‘robot’ cars will affect my life and arrive sooner than most imagine.  I cannot see any downside for us as a society other than short-term upheaval in the car manufacturing industry.  Luckily the UK got rid of its industry many years ago.

I had the concern that robots would take jobs in manufacturing.  It is now a certainty.  I watched news footage yesterday of two men taking pressed metal parts off a conveyor belt and giving them a cursory inspection.  They typically gathered 5 in one hand neatly piled up before lobbing them into a large bin.  They probably did more damage with the ‘lob’ than they ever inspected out.  Why not complete the partial stack that they created?  I wonder if the two men thought about their contribution to…anything?

For a long time I have bemoaned that we are paying people at minimum wage (at least) something like $15 an hour to do jobs, done in Asia or Africa by people paid a-dollar-a-day.  The progress down to that parity needed for us to compete seemed to me to be a painful one for us in the west.

No longer is that the case.  You can have a man in Sunderland screwing wheels on to a vehicle at $15 an hour or you can have a robot do it for 10 cents a day.  So the guy in Sunderland loses his job…but so does the guy in Manilla.  If you are rich enough to invest the $100,000 in the robot you might as well do it in the UK.  Better infrastructure and shorter supply chain.

Robots will on-shore manufacturing and the people to lose their jobs first will be in 3rd-world countries.  That is where the suffering will hit first and hardest.

It is obvious: I am a man but a robot could probably do it better.

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Mais Non

Posted by chrisrick13 on May 18, 2017

It is obvious: the UK will suffer badly when it leaves the EU

The French made an easy decision, not that they had one, and a potential trigger event has slipped by.  Macron was manufactured by the ‘establishment’.  They recognised that the electorate was in no mood to vote for the established parties so they backed a new man.  Same as the old man, alas.  Anything he might want to do will have to pass the parliament where he will hold few seats.  Very well played establishment.  Amused to hear that France will be run by a woman after the election: le Penn or Merkel.

Brexit moves back to the centre of the news cycle.  Competition from the election, but not much.  If I am watching England playing Scotland at rugby I am vaguely interested but do other things in front of the tv.  Just occasionally there is a game worth sitting down and concentrating on.  Not always been that way as England have only won nearly twice as many games as Scotland.  Mr Milliband looks pretty good as Theresa May in his drag outfit.

So I am interested in Brexit.  My argument was that remain would have been an easy win if the remain group could have pointed at just one thing that was an outstanding benefit from being in the EU.  They could not because there are plenty of small things that were good but nothing big, and plenty of things that were bad, many of those carrying big labels.

So if there is nothing big to lose why should leaving bother us?  For sure the people who run the EU want to punish the UK.  They want to make us suffer, and they will.  The problem is that the suffering will go both ways.  It will not endure.  People in general are maxi-minimisers.  They maximise their gains and minimise their losses.

We have made the right decision for the wrong reasons.  We will now make our own laws and interpret them with our own independent judiciary.  That is all that matters.  The economic arguments are secondary.

It is the off-season.  The Horsemen of the Apocalypse (1st XV) have been on their off-season break but have started spring training.  Brexit will become a side-show and I think there will be a quick out with no agreement and we’ll sort out the deal with what remains of the EU afterwards.  We’ll be absorbed with the Horsemen matches which, alas, will be walk-overs.

It is obvious: the UK will suffer badly when it leaves the EU – for a very short time.

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