Australia

09/18/2024

How exactly does it work?

There’s a moment in a nation’s evolution, and only the USA and Australia have had this moment, where you have enough consumption per person that more consumption doesn’t require any economic gains.

It’s like magic. Your trading partners keep sending you shit on credit because they can’t afford for you not to consume.

That’s because there’s this critical point in manufacturing called % utilisation – the actual production over a period compared to the maximum possible production. Below a certain point of utilisation, they lose money. That’s equally true for one factory, and for a whole country full of factories. Which is why we have to keep consuming their shit.

When I say they provide credit, it could be of the type where you print the money and they pretend not to notice. Or they buy your national bonds at a price that far exceeds any reasonable valuation.

Same, same.

In Australia’s case, being a smaller fish, we have had to provide security for this credit. This provision of debt is effectively underwritten by our continued provision of cheap raw materials to our trading partners.

The US just uses its military as security. They sort of promise not to use against their trading partners, at least for now, as long as they keep sending their shit over.

So in Australia, it’s money for nothing and cheques for free. Which is why our dumbarse politicians can be such fuckwits and get away with it. It doesn’t matter how much expense they waste, or how ineffective their investments are, there’s always more to eat.