Backyard Aquaponics
A place to discuss aquaponics

Well I wasn't born then yet, so I wouldn't have a clue..
but if you were saying that there was plenty of supply and plenty of demand... then yes, prices would come down...

It is with limited supply and plenty of demand that prices would go up... Sure affordability does play a part but if supply remain limited, and demand remains strong, people will find a way... Take Singapore for example, a property you would pay the price in Sydney for $500K, you would pay $1mil in Singapore... yet there is still people buying... as there is limited supply... (not much land left in Singapore undeveloped)...

Anyway it is all speculative... only time will tell...

I suppose you're familiar with Japan's RE bubble? At the top, the land under the emperor's palace in Tokyo (maybe 100 acres) was worth as much as the entire state of California. People still need property in Tokyo, not much undeveloped land, so how could prices possible fall?

Back on the RSPT for a minute

One of the things said at various points along the way is that the companies don't create value, these commenters seem to believe that the minerals in the ground have some intrinsic value and that "The People" own this value.
Well the value only exists when discovered and extracted, this is what mining does. As long as a resource is unknown its value is zero so the people own a percentage of that - worth i.e. zero.

For example compare Afghanistan a year ago to from now on.
Now whether this will be for good or bad is not for me to judge but changed it will be.

Hello Everybody. It’s a strange feeling—I have been lurking on this site for so many years that a lot of you old timers (who don’t know me from a bar of soap) seem like old friends. I have only recently registered on this forum, having finally bitten the bullet on starting an AP system of my own. I should have a thread up shortly on my system (I’m finishing the shed for the FT’s at the moment).

My compliments to so many contributors to this RSPT thread—from all the various standpoints regarding this issue. It is refreshing to read a discussion of these matters where people from all sides are sincerely trying to come to grips with the issues based on the merits of the arguments as they see them. I hope we all remain friends.

REGARDING “SOVEREIGN RISK”
I have read with interest the various definitions of “sovereign risk” given by others in this forum; and while I agree it is always helpful to define our terms, I think it is also useful—when dealing with companies that fight as hard and as dirty as the big mining companies—to step back and think about how they are trying to win the debate by dictating to us the very language that we use to discuss the issues.

The miners all scream “SOVEREIGN RISK!!!!!! OH NO!!!!!!” at us so loud and in such an alarming tone (via the media) that we can’t help feeling (if only subconsciously) that anything labeled “sovereign risk” is always bad thing. But I’d like to turn the fear-and-alarm-dial down for a moment and ask:

“What are we really talking about?”

And it seems to me that the answer is: When any government wants a higher share of the money that is earned from mining, the miners label this a “sovereign risk” in the hope that they can stop enough of us from reflecting on whether it is fair that so many miners (e.g., Palmer, Hancock/Hancock’s daughter, Twiggy, Rio, BHP etc.) get so rich so quickly. We (i.e., governments) are, after all, left with the cost of providing them with infrastructure, a workforce, law and order, generous tax breaks etc., AND doing little things like resurrecting global GPD growth from the GFC which was caused by their similarly parasitic, overpaid, banker mates. If we had not intervened in the GFC the miners would not still be making windfall profits from flogging our resources to China because demand would have collapsed. But when the requirement for these government actions—from which they have so directly benefitted—mean that governments have some extra bills to pay, our brave, public-spirited, Captains of Industry/Giants of Free Individual Enterprise do what they have always done: Seek by all possible means to privatize the profits while socializing the losses.

Their use of the term “sovereign risk” is just one example of how the big miners ruthlessly employ a thorough understanding of human psychology to bluff citizens out of their rights. They understand that humans are more easily swayed by the fear of loss than by the promise of gain. For this reason the RSPT is a difficult issue for the government to win—particularly in such uncertain times and with the opposition, and much of the media, in the miner’s pockets. I just hope the government holds its nerve.

I feel we need to keep in mind the sorts of other progressive government policies that the mining companies have opposed using the same language of the “big-scary-sovereign-risk-so-menacing as to cause mine closures, massive job losses, and catastrophic loss of national income” e.g.:
• Abolition of child labour in the mines (an historical example);
• Resource rent tax (similar to the RSPT) for the Australian petroleum/gas industry (1980’s);
• Native title for indigenous Australians (1990’s)
• The Gold Tax for the Australian gold mining sector (1980’s from memory)
• Restoring fairer labour laws (re. their opposition to the scrapping of the Work Choices laws in 2007-08)
What sort of country would we live in if we always allowed the big mining companies to bully us out of these sorts of changes which have, in my view, so improved our society?

Australia used to be a country whose people had enough spirit to stand their ground when confronted with self-interested power. In the face of threats that “the sky would fall in” we won things like:
• the eight hour day (starting in 1856 in Melbourne);
• women’s suffrage (1861-1902);
• historic wage cases in industrial arbitration (e.g., the 1907 Harvester Judgment) that gave working people a right to a living wage.
During those times Australia was well regarded around the world as a “social laboratory” i.e., an innovative, progressive, society that helped set the pace for the rights of ordinary people. I hope our government and the current Australian people—to whom the baton of enhancing social equity has been passed—find within themselves enough of that spirit to stare the miners down in the current RSPT stouch.

I too will vote Green.

Gee, that was a bit of a rant for my first post!—I hope I have as much energy for digging the post-holes for my greenhouse this afternoon.

Welcome to the forum Fishtopia...

And rant away mate... personally, I think you've summarised things well... and certainly encapsulated my feelings...

I'm certainly not surprised at the tactics employed by the mining companies... or indeed their motivations for doing so...

And they have that right...

But as you say.... over the last decade of Howardism, and other general trends... there's been an elevation of business over citezenship and democracy that has raised "business" to almost "god-like" status... and become almost all consuming in the average persons phsyche....

To the point where not only is it "unfashionable" to challenge "business"... but to the point where democratic principles and rights have been slowly eroded... and management of national economies held to ransom....


Well said mate...

How does that make any sense ?

It doesn't make sense, but I know what he means.

It's still wrong though! Governments borrowed money to cure the fact that there is too much debt in the system. Can't work but it did buy a little time.

Greetings Chillidude.

The short version of what I meant was that the governments of the key economies got together during the GFC and decided to support GDP growth with a coordinated global strategy of increased government spending because private sector spending was collapsing; as exemplified by many of the Australian miners who were sacking people left, right, and centre. (I remember that my neighbour flew over to a BHP mine in the Pilbara only to be told on day one that he was no longer required. In the light of BHP's recent arguments re. the RSPT, perhaps he should have tried to impress upon BHP that, from his point of view, their actions were “retrospective” bearing in mind his "existing" employment arrangements with them. Or perhaps they might have had sympathy with the argument that their actions constituted a "sovereign risk"—to him! ) In addition, those governments had to take a variety of costly steps both to bolster failing banks and also the broader finance sector. The consensus at the time was that if the governments did nothing then we would have ended up with a recession that may have rivaled the Great Depression. Not long after these government stimulus packages took effect, global GDP growth started to recover, particularly in China. And so the Chinese orders for e.g., iron ore and coal started to return to pre-GFC levels, the prices recovered, and this is why the miners are in the fortunate position of continuing to make what I consider to be "windfall profits" from the resources boom which was resurrected for them by government action.

It seems to me that the miners, who reaped the benefits of all this increased government spending, do not want to support the system that has bankrolled their prosperity. Opposition leader Abbott likes to frighten us with the analogy of the RSPT "killing the goose that lays the golden egg" but as far as I'm concerned it is the miners who need to think long and hard about the implications of Abbott's analogy:

Where would they (the miners) be without the countercyclical interventions of governments?

Can they afford to give so little back to these governments upon which they rely?

When recessions hit, the miners guard their profits while the world’s governments have to go into debt and deficit for the sake of the common good. The world's governments are desperately trying to fund all this spending and if the corporate sector won't pull it's weight then I think we will be going into the next recession, whenever it hits, without sufficient financial reserves to stop a recession from becoming a protracted depression.

I'd hate anyone to think from what I have said above that I think the current global economic system is the way it should be or that the GFC was handled in a way that has fixed the underlying problems. And in any case I reckon GDP growth is a hopelessly flawed measure of our real prosperity. But in the terms of the current debate:

Do I think the Australian Government needs the money from the RSPT? Yes.

Do I think the mining companies can afford to pay the increased taxes? Yes.

Do I think they owe it to us all? Yes.

And thanks for saying hello Rupert your system thread info and other contributions have been a big help to me.

Interesting info and point of view there Fishtopia... Interesting to jump in with a first post on a "hot potato" political topic...

I notice the big miners are trying to push themselves as nice people a bit lately, tonight on A current Affair or Today Tonight they had a segment about Rio Tinto flying the miners families out to the mine so the wives and kids could see where daddy works.

Very blatant crap publicity, look how good are we trying to help families, "Oh look at the little 5 year old girl pressing the button to set the blast off, lets all clap and cheer" I don't think we have a smiley for it... "stickfingersdownthroat:

if the costs of an element used, rises in cost...then surely the cost to the end consumer would rise...as in this debate it would be china wanting our mined products..

but it would be naive to think those buying the minerals would not have their fingers in the mining company as well...

a banned book i got hold of...as you do... in the 80,s was about grain merchants... their philosophy was to buy grain for less than you sold it to yourself.... that has worked for multinational and domestic companys now...eg gunns in tassie...

so my awkward...through the bottom of a bottle veiw... is that the companies who mine here are most likley linked to the ones who process the stuff there.. so they will jump and scream and such...cos it is in their interests to keep the price here as low as possible...

but for what its worth... we have a finite amount of this stuff in the ground and we can only sell it once...so we should get as much as we can for it...as a country..not state or political party..but as a country....

Don't assume I'm not familiar - I lost 3 people out of my team of 5 direct reports, and my manager, and his manager - all on one day, without any warning !

And I'm still pretty pissed off about it.

Yet you seem to think all governments jumped in and spent money wisely (money they don't have by the way - it was debt funded). Not true. Many Western governments did - almost no Asian governments did, and certainly the Chinese did not. They did not need to as they are not spending money they don't have and have a robust economy.

There was no threat of recession in Asia. That's why their currencies haven't jumped around like the U.S Dollar and the Euro.

Should there be a super profits tax ? Sure - why not ? But two things to think about;

[list="1"]why just limit it to mining companies ? why not other massive internationals such as pharmaceuticals (Smith-Kline) and agri-companies (e.g. Monsanto)[/list]
[list="2"]if you intend to do so - consult with the companies first instead of just thinking it up and announcing like a 12 year old kid - that would piss anyone off[/list]

Also, at least in Australia, what Govt spending are you talking about ? Giving everyone money is not spending - it's a handout. The schools project has been another one of Kev's farces as the money is not yet spent - Only between 3-5% of the school projects have been initiated, so that certainly didn't save the world as 95% of it hasn't been spent.

Of course the Chinese funded most of the spending! Who do you think bought the government bonds?

The Chinese RMB is pegged to the US Dollar and therefore jumps around as much. And that's why there is 100% chance of recession in Asia (and their markets are starting to reflect it).

I seriously hope that this forum will still be around in at least 5 years time and we have not lost this thread... Would be interesting to find out who is right and who is wrong about the global economy??? Would certainly be an interesting read in a few years time on how right or how wrong some of the comments are...

Not entirely true chilliedude.... the Japanese didn't and couldn't... they are such a basket case anyway... and have effectively been in recession for years...

Both India and China did in fact react with some level of stimulus... as they were affected by downturn in exports... with Chinese economic growth slowing from over 10% to about 6.5%...

But both countries had substantial internal demand... and inventory stockpiles....

Indeed, that's one of the reasons that mining companies laid off workers so quickly.... as (particularly the Chinese) were indicating possible refusal of shipments...



Indeed, most of the international stimulus was funded by the Chinese... in their own self interest... both for continued export sales.... to avoid devaluation of their currencies... and/or tariff trade wars... and to avoid internal dissention that layoffs of workers would have caused if their own economic growth had fallen below 5%...

Thankfully, for Australia... the combination of internal demand with China, and to a lesser extent India... and the stimulus measures... enable us to "buy time"... while the credit markets freed up.... inventory ran down... and demand ramped back up....



Indeed there is some logic, and reason to apply such a tax regime to other industries... and it already does apply to the oil sector for example... but on a production basis...

Personally, I'd like it applied to the financial sector in particular.... or at least a transaction based tax...

And secondly, yes I think the matter wasn't perhaps handled as well as it should have been... and some prior consultation should have taken place...

But you can bet your bottom dollar... that the mining companies would have made any such consultations public... and reacted in exactly the same way...

And bugger it... the governement is here to govern... not to have it's policies pre-approved by the mining companies, or any othe business sector...

And the tax isn't actually law yet, or even drafted... it was announced... and consultations and negotiations are now taking place...

You got me on the Japanese Rupe - I should have excluded them from my point ! Yes, they are a basket case, but a good example that govt stimulation won't result in growth until all the crap debt is flushed out of the system.


That's like me announcing on this forum that I'm going to come around and beat the crap out of you, then giving you a call to start talking about the issues involved. Professionalism score: 0 out of 10 !

cjinVT, Fishtopia - interested to hear what industries you are in and what your reaction would be if your govt decided to tax the crap out of that one industry, ignoring all others, to fix their deficit, in a large part created by their ongoing series of frack-ups.

Now, I'm not defending resource companies one iota - just think it should be across all industries making those sort of profits. Mining makes up about 5% of the world economy - what about taxing the other 95% equally ?? I'd also prefer to see it handled by someone with an ounce of capability or, failing that, some decent advisors.