Every country is borrowing money....who from???

[doug3030]

When I was at school, it was often observed that I thought a lot. Thinking things through.... I was often roused by the teachers due to my deliberate brevity. When asked a question, for example in maths, I simply wrote the answer.... No workings.

English was the same. I simply wrote the answer, often in five words.

It was explained that my brevity was because I didn't know the answer. Perhaps this is true (I'll never know... Dunning Kruger and all that). Shame though that the answers were always right.

A for answer, E for explanation.....

I can relate to that Evan. Nobody was ever able to give me a sensible answer as to why I should have to show the working as long as the answer was right. They used to argue that if I didn't show the working they would not be able to find out where I went wrong. I told them that didn't matter because if I got it wrong I would make sure I found out what I did wrong.

Interestingly, they only ever seemed to take the matter up when the answers were all right, never on the rare occasion when one was wrong.

[GraemeCook]

..... We are seeing negative interest rates in some countries and that is just crazy. Imagine your mate asking to borrow $100 today and give you back $95 at the end of the month and you call it square? ......

Interesting statement, Doug. But negative interest rates are not unprecedented.

I first struck it some thirty years ago when my employers office in Geneva, Switzerland had leases for office space and employee's housing. Like many leases, these had CPI adjustments and the inflation was negative, so after each rental review the rents were decreased. Switzerland has also had periods of negative interest where the customer basically pays a storage fee for the bank looking after their money.

In fact, if you add up the miriad of small charges and fees that the banks charge their Australian customers I would guess that many customers have effectively been earning negative interest for years!

[doug3030]

Interesting statement, Doug. But negative interest rates are not unprecedented.

I first struck it some thirty years ago when my employers office in Geneva, Switzerland had leases for office space and employee's housing. Like many leases, these had CPI adjustments and the inflation was negative, so after each rental review the rents were decreased. Switzerland has also had periods of negative interest where the customer basically pays a storage fee for the bank looking after their money.

Interesting that there was negative interest in Geneva around 1990 when interest rates in Australia were over 17%

Interest Rate in Australia

averaged 4.25 percent from 1990 until 2020, reaching an all time high of 17.50 percent in January of 1990 and a record low of 0.25 percent in March of 2020.

Australia Interest Rate | 1990-2020 Data | 2021-2022 Forecast ...

tradingeconomics.com

[Chesand]

in maths, I simply wrote the answer.... No workings.

English was the same. I simply wrote the answer, often in five words.


It has often crossed my mind that being an economist or weather forecaster is a great job. One can be wrong every single day and still have a job.

I was taught at school (a long while ago) that if you showed the workings and got the wrong answer, you would get some marks if the workings were correct but made a slip in the maths.

If you put 12 economists in a room, you will get 13 different opinions.

[Simplicity]

I was taught at school (a long while ago) that if you showed the workings and got the wrong answer, you would get some marks if the workings were correct but made a slip in the maths.

If you put 12 economists in a room, you will get 13 different opinions.

My dad taught English(I know don’t laugh lol)
At an all boys school in the 70s/80s in Melbourne.


He would regularly send his students home on a Friday with “Learn Chapter 6”

Some students from one particular ethnic group would learn “Chapter 6 word for word”

Dad would then ask them on Monday what chapter 6 was all about in “context”
They would recite there little hearts out word for word,dad would again ask them what chapter 6 was about,I’m sure most of you will get were this is going,
Yep Dad would fail them,
Then explain why, and them teach how to enjoy reading just not Learning a chapter word for word.

It’s sometimes the journey we are learning not the end destination.

Ps Dad wasn’t fond of teaching at home lol(Maybe he was I love reading)

Cheers Matt

[woodPixel]

You know, as I get on, I realise just how much of a little schite I must have been. A dreadful student... absolutely dreadful.

It would be grand indeed if I could go back in time and sit that young man down and tell him what I know now.

How often must we all have thought "Gee, school wasn't actually that hard. Shame I cant re-do this life".



The Madatory HHGTTG quote:

“You know,” said Arthur, “it’s at times like this, when I’m trapped in a Vogon airlock with a man from Betelgeuse, and about to die of asphyxiation in deep space that I really wish I’d listened to what my mother told me when I was young.”
“Why, what did she tell you?”
“I don’t know, I didn’t listen.”

[KBs PensNmore]

An interesting aside to all this is that China is trying to dominate the world by lending monies to small countries, knowing that there's no way that they can make any repayments.China ‘colonising smaller countries by lending them massive amounts of money they can never repay in bid for world domination’

Kryn

[FenceFurniture]

An interesting aside to all this is that China is trying to dominate the world by lending monies to small countries, knowing that there's no way that they can make any repayments.China ‘colonising smaller countries by lending them massive amounts of money they can never repay in bid for world domination’

Kryn

I'd classify that as bloody scary, rather than interesting Kryn. We all know what China will want in return.....strategic land.

[Simplicity]

I'd classify that as bloody scary, rather than interesting Kryn. We all know what China will want in return.....strategic land.

I think we need to clarify hear,
The Chinese communist party,are the S............

The Chinese people on the street are under the paranoid dictatorship off a top down controlling government.

They are suffering more than we will probably know.

Cheers Matt

[Chris Parks]

An interesting aside to all this is that China is trying to dominate the world by lending monies to small countries, knowing that there's no way that they can make any repayments.China ‘colonising smaller countries by lending them massive amounts of money they can never repay in bid for world domination’

Kryn

Nothing new there, the Soviet Union did a similar thing, witness the missile crisis in 1962. The kicker in China's case is that the western nations gave them aid in years past. China has a timeline and it is not limited to years, more like centuries and we westerners can't tolerate that sort of approach. Every major European country has colonised other countries in the past, think of the atrocities that occurred in Africa because the Europeans thought they owned the world. Australia was founded on the idea of we found it so we own it and damn those who were here before us.

[doug3030]

Nothing new there, the Soviet Union did a similar thing, witness the missile crisis in 1962. The kicker in China's case is that the western nations gave them aid in years past.

Russia and Germany were at war in both WW-I and WW-II. Not sure I would go so far as to say we were on the same side as Russia but we were both at war against Germany.

Similarly China and Germany had declared war on each other in WW-I, although China never committed troops to the war. China and Japan were at war in WW-II.

So China, Russia and us were on the same side in both World Wars.

[GraemeCook]

Interesting that there was negative interest in Geneva around 1990 when interest rates in Australia were over 17%
...

OOps, mid-eighties - doesn't time fly. From memory, when Australia's inflation was 17% Switzerland's was round 6-7% - I don't actually remember it reaching 7%. We used to monitor it closely, as in HTF do they do that!

Switzerland's 10 year bond rate - the standard measure of the cost of debt for a country - has been negative since November 2018 - 17 months ago - and is currently -0.368%.
Switzerland Long Term Interest Rate [1988 - 2020] [Data & Charts]

[GraemeCook]

....
If you put 12 economists in a room, you will get 13 different opinions.

You have obviously never been in a room with 12 economists. ... only 13?

[GraemeCook]

An interesting aside to all this is that China is trying to dominate the world by lending monies to small countries, knowing that there's no way that they can make any repayments.
...
Kryn

I started to write a reply saying that that was probably cheaper and less scary than doing it the way the British, French, Spanish et al colonised the world ..... by sending in the military. But then I realised that this assumption was not quite true.

The colonisers sent in the traders, bankers and missionaries first, then much later the military followed to consolidate their position. Just history repeating itself?

[FenceFurniture]

The colonisers sent in the traders, bankers and missionaries first, then much later the military followed to consolidate their position. Just history repeating itself?

The Spanish sent Smallpox to South America which was a much more passive way to knock them over. Wasn't deliberate of course....