A hotch potch

Venice. © P. J. Croft 2008, 2023

Aaah, the tail end of summer, and it’s cloudy outside but still warm enough to have the aircon on. It looked a bit like rain earlier, but no such luck. Damn, more fine weather. ~:(

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This is crazy, and almost immoral. The Reserve Bank (Australia’s central bank) has raised interest rates for the last ten months in a row, from a low of 0,1% in 2010 to 3.6% now. They’re doing this to try to kill inflation by reducing demand. That is, if people don’t have the money to buy goods, then the demand will fall and the prices must either stay steady or fall. That’s the theory.

The effect is that home loan interest rates charged by the banks have risen sharply. When the Reserve Bank rate was 0,1%, the banks were encouraged to make as many housing loans as they could. This was supposed to lift the economy by increasing demand for building services and materials.

What’s more, the governor of the Reserve Bank said a couple of times that he didn’t expect the prime rate to rise before around 2024. The result was that people rushed the banks to take out mortgages at this bargain rate, with the expectation that they would have at least three years to get established.

But now they are being crushed by this sudden rise in the rate. People took out huge mortgages (as they have to be able to afford a house in Sydney and Melbourne) but now, relatively suddenly, they’re finding their repayments have risen to alarming levels. Many people are finding they can’t make the payments.

I don’t have any qualifications in economics but I think this stinks. The effect is to remove money from the economy, sure, and hence reduce demand, but the money is just flowing to the banks in the form of higher loan repayments. The banks are laughing all the way to the bank, so to speak. They are reaping bumper profits.

This is immoral. With the aim of reducing inflation, the Reserve Bank is severely hurting ordinary wage earners, to the extent that many, many people are finding they can’t afford the basics such as school expenses, sport costs, transport and even food. Pleas to charities have risen dramatically.

Yet the rise in interest rates has no effect at all on wealthy people, even increasing their wealth by rising deposit rates and investment returns. The reserve Bank’s policies are regressive, hurting the lowest income people yet helping the highest income people.

A solution to this was in an article last week. If the Bank wants to remove money from the economy to reduce demand, instead of funnelling it to the banks, why not introduce a temporary method where are certain percentage of people’s income is diverted to a government regulated savings account. This would be quarantined until some time in the future when the funds “saved” would be released to the individual, to be withdrawn and used. It would be similar to superannuation, just with different rules about withdrawal.

This would reduce demand in the same way as now, but stop the money flowing to the banks as windfall profits.

And there’s the answer: the banks and other wealthy institutions have tremendous power to persuade governments to do what they want, not what’s good for the customer. Such common sense would never get off the ground. Phut!

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That’s interesting. I named this post with a phrase I use sometimes, hotch potch, meaning a mixture, and looked it up in Etymonline.com (as I very frequently do). They don’t recognise hotch potch but this is what they say:

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Anyway, I was going through my Downloads folder just now and thought I’d do a post showing the hotch potch of things I’ve kept in the past few months and years.

First, I came across a website that shows all the undersea data cables around the world. Wow!

Our part of the world of data cables. Look at Singapore! They are becoming one of the richest, most highly developed tech countries in the world.
The big social media companies even have their own cables!

Next, a nice picture:

London, Hyde Park and Green Park.

A computer Central Processing Unit (CPU). All those pins are connections to the silicon wafer embedded under the small blocks in the middle. The overall dimensions are about 50x50mm, but the silicon wafer with all the billion transistors or more that do the job is about 10mm square.

More later.

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It’s nearly 5.30pm, when I move to the meals area table to watch Hard Quiz on the ABC. I’m a bit addicted to this program and as far as I know, I’ve watched every Wednesday night episode. Yet most of these early (before the news) daily episodes are new to me. How come? Have I seen them and forgotten them? Anyway. I enjoy this show.

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I’ve been testing my model locomotives on a 12V battery last night, and here’s a couple with their skin off:

This is a Kato model. I bought the decoder and substituted it for the simple one the loco came with. You can see how complex it is, with all those seven integrated circuits.
Side view of the above Kato loco.

This is another bought loco with DCC decoder already fitted.

Nearly ready to start laying track. Lucky I live alone — my dining table is covered edge to edge with train stuff, magazines, books, electronic parts, tools, you name it. I just push a bit aside to make room for my dinner plate. Hah!

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