Wages chase prices
The tentative agreement for the Rail Unions, as yet unratified, included a healthy pay-bump. Critics scold Biden for brokering the deal because it will "embolden other unions to ask for higher wages".
Frankly that criticism is one of the stupidest I have ever read. Unions always ask for more money. With accelerating inflation they have a duty to demand it and STRIKE if they do not receive it.
I think they would be better served to accept a little bit less and to shorten the duration of the contract but that is just my opinion. A 20% pay increase on a three-year contract may seem enormous but it is paltry if annual inflation is that much or more.
When Money Dies
When Money Dies is the title of a book documenting the hyper-inflation in the Weimar Republic, Austria and Hungary after World War One.
Losers were legion. Especially hard hit were those on fixed incomes, that is, people on pensions.
Winners were few but they did exist. One class of winners were those who converted their assets to assets denominated in "hard currencies". Countries in the convulsions of inflation make it difficult to consummate these kinds of conversions but it is worth looking at. My dilemma is finding a currency that is not subject to inflation. I don't understand crypto...I don't trust it.
Another set of winners were families who could convert local or ubiquitous resources into necessities like food or wood-stoves or medicine or clothing. There is much to be said for an industrial sewing machine with parts, some solar panels to power it and 50,000 yards of #69, polyester thread. Throw in some zippers and snaps and buttons and you have a business.
Maybe those union members would be better served with more flexibility with regard to their time. Then they could get a side-hustle. That is how the southern tier of countries in the EU survive. Side-hustles. Gardens, nurseries, making distilled spirits, selling wine, shade-tree mechanics, resoling footwear, rides to the airport and so on.
Another lesson from When Money Dies is that people will rob you. One story is of a farm-family that went to church services and they came home afterward to find that their farm had been pillaged. Particularly sad was that the raiders had slaughtered their milk-cow and only removed a few cuts of meat. Key point: Leave several people to guard your source of wealth/production when going to church or to town lest you come home to ashes.
We have a habit of making sure there is someone minding the homestead before leaving to go somewhere . Criminal activity is increasing across the board . Exponentially ! Fentanyl and cartels are nationwide now that the borders are wide open . Crack heads driving around looking to junk your stainless steel McCormick-Deering cream separator that would have fetched 5 to 7 hundred at auction . They'll get $25 bucks at the junkyard . Ask me how I know . Heh .
ReplyDeleteFor most, their only real resource will be skills. Over time, those can be built up, and barring dementia/disability, they're hard to take from you. Be the guy who knows how to solve *likely* problems, that no one else can solve.
ReplyDeleteIf you have renewable resources, (productive land) you should aquire the skills and *tools* to produce product from those resources: food, firewood, lumber, furniture, wagons Skills: blacksmithing, textiles, wood/metal milling/machining, rudimentary chemistry, distillation, medicine, engine repair/retrofitting, boilermaking, etc.
ERJ, Crypto remains for me an interesting concept (and one I do not fully understand) but risky. It assumes a lot of things - like regular power, for example. In terms of other hard currencies, I am frankly a doubter of the concept of gold and silver being adopted as currency to any great extent. Maybe during the Great Depression, but now we live in an age where many do not carry cash at all, let alone precious metals.
ReplyDeleteTo your points, skills and the ability to make/supply items readily needed are probably the best investment.
I too have read When Money Dies, have a copy right here. It's why I looked up my relatives who survived the Great Depression and listened to their stories.
ReplyDeleteA very common factor in their stories was that more folks lost their farms-homes due to inability to get enough coin of the relm to pay taxes. Often enough local debts were paid in services or in kind (like meat, firewood etc.) but Uncle Sam wanted US Dollars and the bankers guarded by the sheriffs would sell your home on the courthouse steps for pennies on the dollar for back taxes.
Many well to do families lost their homes thusly.
Families and friends often closed ranks putting 3 generations in the same home as everybody helped the family survive. Otherwise, they would be homeless folks searching for work.
Kids might help neighbors with gardening chores to bring home some food or other trade item (like old clothing-shoes) Grandparents helped watch the house and babysit-nursing the ill.
Silver and gold are nice AFTER you have eliminated your debts, set aside a couple of years tax money, a couple of years food and other critical needs. Skills are awesome BUT without the tools and supplies not so much.
From my experience working in Bosnia as a Medic I found that the trade value of a gold ring or watch was not nearly what you would think. Everybody needed Food, Firewood, Antibiotics, guns and ammo. Trying to trade black market with Uncles old gold watch was risky at best.
I bring this up because I suspect that the Powers that Be who are pushing for electronic Dollars will make trading outside the "Official E-Dollar" a felony and thus a risky black-market event.
During the Great Depression Clothing became very expensive, repairing them and keeping folks in shoes was an ongoing issue.
Shoe Goo might be worth more ounce for ounce than .999 Gold, just saying.
The only difference between cryptocurrency and a US cash dollar is you can hold the dollar in your hand. BOTH are intrinsically worthless, can be created or destroyed at will or on a whim and the only inherent value they have is based on the holders faith in the honesty of the issuer. In essence both are worthless. Want REAL money. For thousands of years the ONLY actual real money has been gold/silver. These days an investment in lead/brass is likely to be as valuable as holding gold/silver. But converting your money from dollars to some other currency is just changing who you think is trustworthy. And NO government issuing currency, either paper or digital, is trustworthy.
ReplyDeleteThere are many reasons to doubt the wisdom of investing significantly in crypto, but:
DeleteMost crypto *cannot* be "created or destroyed at will". I'm not intimately familiar with them all, but for bitcoin, I am, so I will use it as reference.
Bitcoin *cannot* be destroyed, but you can accomplish the same thing by placing it in a wallet, and then destroying (forgetting) the wallet's public key.
Bitcoin can only be created by mining (proof of work), and the difficulty in doing so continually increases. Further, once 21M bitcoins have been created, no more can be created, and mining only earns the "fee" that people choose to pay (and that you choose to accept) for registering a transaction in the blockchain.
These things are so because the software the miners run forces these things to be so. It's math. It cannot change, unless the software changes. Any miner who changes their software effectively removes himself from the blockchain. The *only* way to change the software is to get greater than 50% of the miners to *all* change their software at the same time, and in exactly the same way.
While fiat currency (us $) can be created by the FED at will, and by banks through fractional reserve banking, this is *not* true of bitcoin. You are *trusting* the FED when you hold US$, you are trusting *math* (and a majority of the miner's processor power) when you hold bitcoin.
Other than these issues, I fully agree with everything else you assert. Choose an asset you can *know* will be valued in future.
I believe that what you say is probably true at this time.
DeleteI also believe that "Dominion" voting software was also cleaner than human counting when it was first adopted.
I am not smart enough to understand how any software system can be secured against being corrupted from the inside. I do know that there is a temptation to code in a few back-doors just-in-case. What is sold as a hermetically sealed system is likely not.
Or so I believe.
All good points Joe and I agree. The one that concerns me the most is the last concerning being robbed. With a community being invaded with more newcomers than locals all sense of community evaporates. A local Realtor told me last week that about 70% of all houses for sale in this area for the past year have been bought by out of the area buyers. And an employee of the title company I used to own said that so far this year they have done closings for buyers from 32 other states. And we are hearing that phrase "livin' off the land" used by new residents and cabin buyers. Back in the '50s and '60s my grandparents generation used to talk about the theft of food out of their gardens and even cows out of their barns back in the 1930s and that was in rural communities. I have no doubt it is going to get really bad, especially for us older people who will be attacked first. ---ken
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ReplyDelete