Email from: Stephen Williamson
Sent: Wednesday, 18 September 2013 2:02 PM
Subject: Thanks for the chat, Tim :-)

Hi Tim, Hi everyone

Yes, thanks for the chat Tim. Here’s that page below, tracking inflation, firstly in Britain, next in the US (in comparison with Australia). I’ve shared this page before, I’ve made a few adjustments recently. Appreciate all/any comments

But now with seven billion people in the world, and with all the many, many wealthy ones worldwide who are storing the $16 trillion in US Treasury notes and bonds as the basis of their current wealth, we are truly in uncharted territory at present.

Numerous prophecies and recommendations, but it’s not simple stopping a juggernaut like this, regardless of the experts.

Blessings all :-) Steve

Extract from Forbes on Sep 20th: From QE1- Nov2008 through QE3- Sep2012 as of now the Federal Reserve has increased its balance sheet from $900 billion to * $3.7 trillion today. Here is a primer on the mechanics. The Fed currently purchases $40 billion in mortgage backed securities and $45 billion in treasuries each month. The Fed has no excess money or reserves … so they simply fire up the printing presses and print out of thin air $85 billion of new money each and every month. This is money that goes directly into the money supply. Nobody knows the ultimate denouement of money printing on this scale.
 
* Ended Oct2014 at $4½ trillion

 
But lower interest rates and increased inflation in "more hospitable yield environments" are inevitable.

Click here for the history of money, silver and gold, in scripture.

Click here for more info on today's banks.

Click here for Adam Creighton's recent reappraisal of Keynesian economics

Inflation over the past 2,000 years

where d=denarius or pence or cents, s=shilling (12 pence), £=Libra-pondo (240 pence).

30AD (time of Christ) 1d per day (i.e. one penny for working in a vineyard). It contained about 4 grams of silver and a Libra-pondo (240 drachma or 1/60th of a talent) in Israel was thus just under one kilogram.

By 250 AD, this level of silver had dropped to zero. In 312 AD, Constantine issued a new gold coin, the solidus, and shifted the Roman capital to Constantinople (now Istanbul) in the east, with merchants being forbidden to use these coins outside the kingdom.

East of the Roman Empire was the Persian Empire, where silver coinage was in abundance from trade with Rome, Arabia, China and India. These were drachma coins, later called dirhams, still with 3½ to 4 grams of silver, and issued from their capital at Ctesiphon, (near ancient Babylon and close to modern day Baghdad). Click here for a brief two-page history of the world (with hyperlinks) as the Muslim caliphates took power.

And with the collapse of silver coinage in the west, numerous trade agreements vanished. Invasions by Goths, Vandals, Huns, Lombards and Vikings followed, capturing slaves which they traded for Eastern silver. But at the same time, decentralised government, manorialism and monasteries sprang up everywhere.

790 AD King Offa of Mercia in England joins forces with Charlemagne in France. With a silver mint having been established at Dorestad on the Rhine with access to a significant quantity of silver, the penny (pfennig) was reintroduced at a set weight of just under 1½ grams of silver. The standard £ Libra-pondo (known in England as the Tower-weight or Tower-pound) of 240 pennies contained about 350 grams or exactly 12 "tower" ounces in silver.

Later on, around 1518, each one-ounce silver coin became a "crown" in England, a "thaler" in Austria, and in the U.S. a "dollar". Around that time, in 1526, Henry VIII altered its weight from a "tower" ounce of 29.1667 grams to a "troy" ounce of 31.0833 grams.

Now, let's go back to 1261, see this page for a family timeline of daily wages from 1261 - 1780.

1261 Tuppence or 2 silver pennies per day

1351 Threepence or 3 silver pennies per day. Note that with the price for silver on the continent having a higher value, the level of silver in the penny is now reduced to 0.8 grams. Halfpennies and farthings are also now in production with a proportional level of silver. English coins were much envied in Europe for their weight and good metal content, with English halfpennies being copied on the continent.

And as further background to what was happening on the continent, click here for details of the gold florin, issued originally from Florence in 1252.

1401 Fourpence per day

1541 6½d (Sixpence ha’penny) per day, the rise of Protestantism, in 1568-1648 the 80 years war between Catholic Spain and its Protestant Dutch provinces (then almost all of Europe, Russia and Turkey joining one side or the other), led to considerable instability, shortage of labour and silver. In 1544 Henry VIII reduced the content of silver in the penny to one-third, with two-thirds becoming copper. His children Edward, Mary and particularly Elizabeth restored the silver but its level is now down to ½ a gram. Many new denominations are introduced: shillings, sixpences and threepences containing 6 grams, 3 grams and 1½ grams of silver respectively. And as mentioned before, the crown, a large five shilling piece weighing 31 grams and closely equivalent to a newly released Spanish dollar, the basis of a coming U.S. dollar click here for further details.

1583 8½d (Eightpence ha’penny) per day. Halfpennies and farthings now become copper in content, and legal tender up to the value of sixpence.

1640 10d (Tenpence) per day

1780 18d (One shilling and sixpence) per day — inflation starts to take off. What with the French seven year war 1756-1763, their revolution in 1789 and the rise of Napoleon, again there is considerable instability, a shortage of labour and silver, with paper money having to be printed to pay government wages and expenses. When pennies do end up getting reminted, their content is now all copper and the basic silver coin becomes the threepence.

This period also saw the rise of income tax as a taxation measure. Prior to this, invading a neighbouring country, bribes, extortion, customs duties, sales taxes on certain goods (e.g. alcoholic beverages) and property taxes (based on, say, number of windows) were the main sources of income for governments. Click on each country to see some of its income tax background.
America   Britain   France   Germany   Italy   Russia   Japan   India   China   Australia

Now over to Australia (while tracking US Govt Debt/Investment/Printing of Paper Bonds)

In 1907, the Commonwealth of Australia establishes the concept of a "sufficient wage" for unskilled workers, or as it became known, the "basic wage". The weekly wage decided upon is two pounds and two shillings (i.e. 42 shillings per week) for adults (21 years and older) working full time.
Note too that with Australian federation in 1901, each state enacted "early closing time" legislation for shops and factories that reduced employees working hours to 8 from the 10-12 hour days many employees had been required to work. And in terms of a "working week", while everyone in 1901 worked a six-day (48 hr) week, in 1930 it became a 5½-day (44 hr) week, in 1948 a 5-day (40hr) week.
AustraliaUS Govt Debt
1907 70cents (Seven shillings) per day
Nearly five times the daily wage (15c) in 1780.
$1 billion
1920 15 shillings per day with widespread inflation following the First World War.
Paper money (i.e. a promise backed by 80 tonnes in gold reserves) has become all the rage following the Australian Notes Act of 1910 enabling banknotes issued via Australian Govt Treasury and cancelling those more fallible banknotes of individual banks.
$25 billion, through the enormous expenditure of First World War and the setting up of the League of Nations
Drops to $16 billion in 1930
then rapidly increases under Roosevelt's "New Deal"
1950 £2 per day with considerable inflation following the Second World War.$260 billion as US sets up United Nations, provides help to West Germany, South Korea, other economies worldwide
1960 £3 per day with inflation over 10 years measuring 150%$300 billion
1970 $10 (£5) per day growing to 167%$400 billion

In 1971, President Nixon cancels the US government's dollar to gold backing (since 1944, at US$35 per ounce).
 
Click here for our experience in Australia during the tumultuous years of Gough Whitlam's government.
 
1980 $30 per day having accelerated to 300%$1 trillion
1990 $55 per day decelerating to 183%$3 trillion
2000 $80 per day and back to 145%$6 trillion
2008 $108 per day $10 trillion
2016 Currently $134.54 per day using our basic adult wage of $672.70 per week, arguably the highest in the world, plus 9½% compulsory superannuation.$19 (going on 20) trillion

So in 2017, $134.54 (say 13,454c) per day which is 192 times the 70c daily wage of 1907. A fair increase in inflation over these 110 years. At that 192 fold rate of increase, and accelerating another 41 times as this was the acceleration factor over the 4.67 increase that occurred between 1780 and 1907, by 2100 we could all be earning over $1 million per day.

Not bad .

Yes, at these times, may we keep our eye on the Lord. Let our eye be single, having "dove's eyes".


Mammon

Thoughts on Mammon

On February 07, 2013 8:27 AM, "Stephen Williamson" wrote:

Hi all

Here’s an interesting link on Wikipedia

http://en.wikipedia.org/wiki/ Net international investment position

What it does is take the net position: Total external assets (owned in other countries) of every individual , company, and government institution, then subtracts the total external liabilities.

It then sorts the countries using that figure as a percentage of each country’s GDP i.e. the country's total gross production for the year (ignoring subsidies and pensions made by the public service).

Ok in this year, yes, China’s near the top: doesn’t show actual figures, it just shows it’s in the black with a percentage of 37%. Their GDP is currently $US 7 trillion, which would indicate a net investment position of $ 2½ trillion in the black, and is why every other country would like them to revalue their yuan, as it artificially makes their goods too cheap.

The U.S. and the U.K. are together in the middle

The U.K. £180 billion in the red which is 13% of their GDP

The U.S. **$ 2½ trillion in the red which is 16% of their GDP

Finally, near the bottom, Australia $850 - $900 billion in the red which is 64% of our GDP, yes, ever since we were first settled we’ve relied on other countries to invest in us, to help us get going. And yes, our public service has always been somewhat top heavy
See the page below for how much we are individually and corporately in debt to "managed funds" (in Australia as well as overseas).

**U.S. figure updated in 2nd Qtr 2016 to $ 8 trillion in the red

Mammon and Babylon — Matthew 6:19-24   Luke 16:1-13   Revelation 17:1-5   Zechariah 5:1-11

Revelation 17:5 And upon her forehead was a name written, MYSTERY, BABYLON THE GREAT, THE MOTHER OF HARLOTS AND ABOMINATIONS (foul stenches) OF THE EARTH.

Click here re the Four Horsemen, Simon the Pharisee, Judas, and Paul's attitude to taking up a collection.

Click here re the History of Money and click here re the History of Inflation.

On May 28, 2014 6:49 PM, "Stephen Williamson" wrote:

Subject: Chatting about mammon - the great "mamma" this morning :-)

Ok Australia’s Federal debt in bonds is now roughly about $270 billion
Total State and Territory debt in bonds roughly about $230 billion
Private company debt in bonds about $720 billion
So, bonds investment: $1.22 trillion

Total private housing debt about $870 billion
Total investment housing debt about $410 billion
So, housing: $1.28 trillion

Private credit card debt and personal borrowings $140 billion
Private company borrowings from banks, etc about $730 billion
So, other borrowings: .87 trillion

Total Australian Debt $3.37 trillion, roughly, in May 2013 click here

So who is in the black?

Various Australian Managed Funds (excluding “cross-investments”) — superannuation (about 75% of the total),
public unit trusts&life insurance (about 25% of the total)
ABS Link: $2.3 trillion
$2.3 trillion
Gross: Overseas investors (in Australian currency)
AFR Link   DFAT Link: $3.2 trillion
 
less: Australian investors (in overseas currency)
DFAT Link: $2.2 trillion
 
Nett from Overseas Investment
ABS Link: $1.0 trillion
$1.0 trillion
Leaving a balance, roughly, for banks and other investors in Australia to supply:$70 billion
Total:$3.37 trillion

Yep, we’ve relied hugely on overseas investment since 1788 — starting with those famous IOU's written in 1793 for 7,500 bottles of overseas rum, authorized by the British Regiment's Paymaster — but with so much now available in our own superannuation and insurance and trust funds, the percentage of nett overseas investment has actually dropped.

So, while Mr Abbott and Mr Hockey are doubtless wise in endeavouring to, very gradually, reduce the $300 billion owing in federal bonds, those other figures do help to bring it all into a better perspective, with all the shouting that’s going on.

Thank you Lord, yes, to rest in you, to look to you, our loving heavenly Father, for each coming day’s needs.

“give us day by day, the bread for each coming day” as several translations put it.

Blessings all :-) Steve

And at the end of the day, as the scripture says, each one of us has to bear his own load, whether as individuals, company directors or politicians. Ahh the Lord knows.


Now the following email has had its figures adjusted to reflect some of the latest stats.

Note its use of the word "currency" is as follows:
1. M0 (including MB): Banknotes and coins in pockets and in bank vaults and in ATMs, plus the exchange settlement / banking reserves in gold and government bonds that have been deposited by individual banks in their Reserve Bank. According to these links this is a small amount relatively speaking, in Australia it's about $90 billion, in the US it's about $4 trillion.
2. M1: Easily accessible cheque and savings bank deposits. In Australia it's about $325 billion, in the US about $3 trillion.
3. M2 and M3: Long term deposits via managed funds in banks and money markets, a much larger figure. In Australia it's about $1,760 billion — while the US Federal Reserve no longer reports. The figures below are estimates only.

On July 20, 2013 3:42 PM, "Stephen Williamson" wrote:
Subject: Where's all the money :-)

Hi all

With computers, we’re certainly a long way from the gold / silver standard the world used for thousands of years. Again, appreciate any feedback.

A brief summary of the top five countries with liquid assets and liabilities
- a very,very rough picture :-)

Much of this is based on each country's net investment position, and a list by Allianz of currency/stock/bonds owned by each country's residents - America currently showing €42 trillion. At $1.36 to the euro, this converts to about $57 trillion.
CountryResidents and institutions in the blackResidents and institutions in the red (excluding central govt)Central Govt
US$57 trillion$43 trillion$16 trillion in red
Japan$19 trillion$4 trillion$12 trillion in red
China$12 trillion (includes central bank)$9½ trillion$3 trillion in black
UK$8 trillion$6 trillion$2 trillion in red
Germany$7 trillion$3 trillion$3 trillion in red


From: chris Turner
Sent: Sunday, July 21, 2013 11:47 AM

steve
how would the us and uk gold reserves affect these figures?
chris

 

Click here for a history of the world's gold reserves by country over the past 170 years.

From: Stephen Williamson
Sent: Sunday, July 21, 2013 6:14 PM

Hi Chris

I didn’t take account of it. The US records theirs as 8,000 tonnes at a book value of $35 an ounce, about $9 or $10 billion dollars, but that’s very theoretical, its true market value may be closer to $350 billion if they were to exchange any of it. But still it’s a lot less than $1 trillion.

It is more than any other one country, but apparently they haven’t touched it for ages. So it’s very minimal.

Now, with regard to the foreign exchange reserve assets held by each country’s banks, it’s a pretty small amount, a total of about **7 trillion dollars all up worldwide, 65% are now held simply in US dollar paper, 25% in euro paper, and the last 10% in that IMF animal which the Chinese like, a basket of currencies which the IMF call “special drawing rights” (and some UK pounds, Japanese yen, and only a very tiny amount in gold, yes, and other precious metals).

**Though in June 2014, this figure was increased/corrected to almost 12 trillion dollars.

https://en.wikipedia.org/wiki/List of countries by foreign-exchange reserves

Some further thoughts.

Hmm, so ok, back in 1944, the UK didn’t have much, but the US gold reserves and the Bretton Woods political agreement certainly gave the US government back then a massive leading edge:

Firstly in taking charge of winning the war, and

Secondly in assisting countries like Japan, South Korea, Germany, etc to recover.

And also helping Israel become a nation. Simply by printing the paper to underwrite the loans, and also in providing military help to help the governments rebuild their economies.

Of course it meant the US Govt was going massively into debt, from about $16 billion in 1930 to about $250 billion by 1950.

Mostly everyone else was happy to let them do it, though Mr Stalin in particular wasn’t too pleased at the edge it gave the US politically. And numerous Islamic countries got very cranky, as Israel, as a political entity, didn’t align with that worldview recorded in the Koran. Very emotionally upsetting for many of their leaders and preachers.

And a lot of US people weren’t too pleased either, at how their generosity was being repaid, both in the press, and in numerous new wars. So, of course, since 1971, when the US decided to stop allowing foreign governments to exchange US paper dollar reserves any further at that cheap price of $35 an ounce, a price that was by then far, far too low from the market’s point of view, yes, I think the rules have changed enormously.

So, to sum up, yes, gold reserves look good on paper, having a lot, back in 1971 when countries everywhere acknowledged that gold standard, (and were happy to make a profit at the US’s expense), but according to that article above, it would indicate that gold holdings now have historical significance only.

Interestingly, it’s been dropping heaps in price just recently, there’s a lot of worried people out there wanting to put their money somewhere else.

Blessings Steve

From: chris Turner
Sent: Monday, July 22, 2013 7:26 PM

Hi Steve

For thought...The 2 major governmental assets are 1/tax's and 2/ crown land. I am not sure if the nations books include these amount.(I think not ).more food for thought

Chris

From: Stephen Williamson
Sent: Monday, July 22, 2013 9:19 PM
Subject: Re: Where's all the money :-) and future tax income and crown land

Hi Chris

Yes you’re right, neither are included, I did think about it a fair bit, but of course it’s present day value could be argued about “ad infinitum” :-). And there’s also all that private physical land and buildings and non-monetary assets that are owned outright by people in each country. But of course that generally ends up costing money. Part of our responsibilities before the Lord, hey :-)

But coming back to your point about the government, with the US government printing bonds as freely as they are at present, I thought they were useful figures, currently they’ve printed $16 trillion in US bonds, and they’re currently printing $85 billion in extra money every month, calling it “quantitative easing”. So I guess that’s based on that potential future income.

Interestingly, there was an article in today’s Business page of the Australian showing China’s credit outstanding as having gone right up to 180% of their GDP of $7 trillion, i.e. it’s over $12 trillion, but then there’s mounting concern at its asset quality.
A substantial portion, it is thought, just keeps getting rolled over rather than repaid, so I suppose the value becomes gradually meaningless, i.e. it’s a book value only. And of course, that’s what you get in a “closed shop” economy.

Yes, the “liquid” currency, stocks and bonds in the “in the black” column, are objective figures. Before the Lord, they’re a different form of responsibility in some ways.

Steve

Addendum: In a report in March 2015, 20 months later, national corporate debt levels in China rose to more than 250 per cent of GDP at the end of June 2014. Twenty to twenty-five trillion dollars is now invested by state-owned banks in "underused roads, airports that are practically empty, newly built 'ghost cities' that are wholly abandoned, and enough empty units and townhouses to cater for the expected increase in urbanisation for the next 20 years at least."

In a June 2016 report, total debt in China was estimated as thirty-five trillion dollars, borrowed both within China and from overseas, with an excessive increase in the number of “zombie” companies in recent years.

From: chris Turner
Sent: Monday, July 22, 2013 9:31 PM

Hi Steve
Enjoyed this report.I am a believer in diligently knowing the state of your flocks as proverbs declares.I am also learning to improve my skills in sustainably managing debt and income.
Regards
Chris

From: Stephen Williamson
Sent: Monday, July 22, 2013 10:09 PM
Subject: Thanks bro

Appreciate the encouragement ;-) Steve

Stephen Williamson Computing Services Pty Ltd
www.swcs.com.au/aboutus.asp

** End of article

 

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