Inflation - Ask an economist their opinion on an economic matter, the joke is you'll get several answers to cover several bases. As mocking as that seems, there is some validity to it (IMHO) because there are often variables. More often the multiple answers are more linked to a predicition sought. Whilst the fundamentals are rock solid, players pulling big tricks can throw the findamentals off track for a while but as sure as night n day follow each other, eventually the fundamentals pull everything back onto the old normal set path. At some point the old concpet rules "Everyone has to pay the ferryman". Someone sells, someone pays, someone steals & someone works hard doing the right thing.
Ideology drives some to see things as they clearly are not...in the hope many will be fooled. You can fool people, but not theruling fundamentals. Excess spending, by individuals, companies or governments WILL happen despite good advice or perhaps because it was good advice but you will have to pay it back or lose stuff. Its kinda how it works in capitalism. There's no getting around it. There are definitely moving parts, sometimes lots of them. Some known, some unknown and some unforeseen despite the best laid plans of man & mice. For example, if you invest $100 in a reputable bank for 12 months at a rate of 5% I can tell you easily you're going to returned $100 plus $5.00 interest when the Investment Deposit matures. Known others are though, you're likely to have some bank fees & possibly some tax inplications. If you invest $100 in a listed company NO ONE can tell you with 100% guarantee what the return will be. But if you use the known fundamentals, know a little about the business (who supplies inputs & who buys the produced product or service), what likely exposure or opportunities lay lurking AND you read the company's reported financials & go a lot deeper than just checking the share price and the P/E Ratio who can have a better idea. It's still a risk & compared to the bank, there's a greater return because there's a greater risk. The banks do have a government guarantee if all economic hell breaks loose...to a point. Less risk, less return. Is taking on too much risk bad for you? Yes, that's what too much means. Too much means bad for you. That is the problem with predictions about the economy. It's not like the plain & simple bank prediction. It can have many moving parts & it outside influences, some big, small or devastatingly massive either way with little to no notice. The fundamentals of an economy remain unchanged. There are still broadly only 3 asset classes. Cash, Shares & Property. There is still the economic clock that was first made a thing back in the 1950s. It's not gone away, it still applies and in our lifetimes it probably won't go away if it ever does. Another thing that hasn't gone away is false economic ideology. Socialism has grown as a fad despite it never ever having worked as a fair & viable replacement of a capitalist system, nor able to offer anything even remotely looking like growth let alone sustainable growth. Socialists will tell you, arm chair keyboard ones, that there's is huge protection from inflation under Socialist structures because vile & greedy companies cannot reap excessive profits away from working people. Its false. Its false thoroughly, through & through. In fact to be so passionate about these sort of ideas whilst they have no logical basis in anyway is a testament to those who'll lie about anything staring them right in the face & their crooked hope others will join their delusion. Inflation is largely caused by the diminishing value of money in an economy. As the worth of that money falls, things will become more expensive & people will have trouble making ends meet. That's not caused by inflation, thats basically what inflation is. If a Government embarks on Quantative Easing, that is printing money or borrowing more foreign currency to push into out banks then the value of the money will decrease. The amount of money needed to buy a thing "inflates". When an economy grows, experiences real growth more money will be made available, lower interest rates to stimulate the economy thats been lagging or maintain it further. Great...except sooner or later that extra money in the system will reach a tipping point and its value will fall. Now how do greedy companies with excessive profits cause inflation? Well to twist this lie you need to not quote a rate of return as a percentage, you need to quote revenues, that is cash flow in & nearly always the Socialist extremists (yes they are extremists) will not only lie, they'll cherry pick numbers and it won't be profits, it'll be revenue & nearly always citing millions of dollars revenue (because big numbers can sound scary if played right) and the cloaked lie always uses EBIT or EBITDA.That's not profit. That's not taxable profits. That's not freed up cash they can use.
Its Earnings. Its Earnings BEFORE INTEREST TAX DEPRECIATION & AMORTISATION
That's not profits. A company not doing well can have a high number in revenue EBITDA but at the end of the financials, it might have hiuge borrowings, costly supply issues or a falling market
$100 in revenue EBITDA might not mean much is any profit at all.
Greedy excessive profits. This is a real sticking point.
If you use millions its easier to say greedy when you're decieving people.
You put the $100 in the bank your return is measured as a percentage.
What is the precentage ROI?
Why would you not look at the profits as a percentage return on investment when assessing if profits are excessive or fair/reasonable?
And what percentage is deemed excesssive? Have you ever heard anyone say "Got to ring my accountant/financial planner/advisor...my profits are excessive" ?
Ever heard that? It is complete nonsense.
Its a judgement made upon others by people who don't understand what they're not looking at.
Does anyone seriously think Twiggy or Gina Rienhart have a huge stadium sized vault at home full to the bring of dollar coins & hundred dollar notes?
No. When they, or Elon Musk make money they re-invest it.
What happens when their personal or their company's profits get invested? Well the aim is to make more profits not loses, not restrict it to stay below some "excessive profits" level.
So that invested money, it go into gold bars or cash deposits in banks?
No, it'll build companies, products to raise a profit return.
Guess what happens to make that happen?
Jobs are create.
No slavery. People agree to work for them & are paid. Usually quite well.
SO there's lie number 368 proven false & misleading.
Excessive profits?
1) Determine by who?
2) What is acceptable as a profit & what percentage is the first plank of excessive?
2% acceptable?
5% or maybe 10%
16% acceptable or excessive?
If 7% is an acceptable company profit by the Left Extremists, what happens when interest rates on a deposit account at a bank reaches 10-12% ?
Guess what, there's a lost profit. Yes there's ups & downs in a market but some small businesses would be better off putting money in the bank for some length of time & not starting a business, stimulating the economy & employing people.
The real underlying code for socialists is all profit they aren't personally getting is wrong.
Socialism is the culture & ideology or envy & potentially theft.
Recently an Aussie socialist ran the excessive profits line on me. He works for a foreign owned company, bought out be another massive foreign owned company. The amounts of profits they make exceeds those mentioned in the video of the left wing Australian Institute that he used to support his premise. Of course I can only find their earning had gone up 16+% over a year after expanding. Its a multi billion dolalr enterprise over all but those "earnings" are revenue ala EBITDA not profits so we have zero idea if he works for a huge multi national in profit or losing money. Or in profit what ROI % it is.
NOR will the social media expert say what is an acceptable profit & what's excessive.
Kinda like "What they're doing is making profits they don't need to, they're excessive, that is bad by a huge unknown amount that I don't know if its actually revenue, profits or if the firm is operating & trading whilst insolvent...its the vibe"
This is when you'll quickly take them to task & 2 things can happen, well maybe 3 or 4.
You'll be blocked/muted or they simply disappear and run the same line with someone else.
Or they'll Switch Lanes & point to the great things that Socialism has provided.
THIS was a classic self own for one socialist extremist...(I am not even kidding. A concocted comic was their main argument)
When it was pointed out that those things, except car brakes, predated Karl Marx, were not listed in Das Kapital & are by no stretch of any logic or indeed actual verifiable fact ACTUAL SOCIALIST IDEAS the Socialist Extremist hit block. One post, hit block.
They know nothing, won't listen to anything different & won't accept anything except full unquetionable acceptance.
Yeah. That kinda sounds like socialist dogma.
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