Pidgin Economics


“pidgin strives to be a simple and effective form of communication” and i like simple…

With the massive stimulatory efforts of Governments and central banks throughout the world, mainstream media is starting to use once-fantasy-world terms with a flippancy that does little to portray the intensity of what it being done.

For example, if the Australian Government commences an infrastructure project for $200 million dollars then we pause for a moment, try to visualise just what this actually means, and then give up – simply assuming that 220 of those nefarious million-dollar parcels sounds about right for getting a major project up and running. When we are told that it costs $2.28 million dollars per kilometre to build a four lane highway then we simply think to ourselves “sounds like a lot but i guess it is probably right”. Sort of. If we Google the issue, we find that this was the cost for the Midland Highway, whereas the Pacific Highway was costed at $8 to $25 million per km in 2005. A local council informs us of a $12.5 million dollar cost, and i am sure that the more we looked the better idea we would get of just how that compares.

My point here?

My point is that it all becomes a matter of relativity, to the point where we cease to even stop and consider just what the amount of money may actually entail. Politicians get to the point of talking in millions as a matter of course, and for a little while now, Billions has entered the pop charts.

Our senses have been even further dulled by the recent revelations of those fantasy numbers that were once limited to NASA, quantum physics and child trump games (bet you a million. Well yeh, i bet you a billion. Then i bet you a Trillion! Trillion always trumped everything but infinity. Of course, for a child that didn’t stop the squabbling as you could always move on to infinity plus one…).

Yes, the IMF has been setting and resetting the global losses from the credit crisis at $200 billion, $600 billion, $1.4 trillion, and now $3 to $4 trillion.

Bloomberg recently included an article which came out with a figure for US Government action through cash injections, guarantees and balance sheet expansion that equates to $12.5 trillion. All mind-boggling figures.

Just to help all of you who find their mind a bit stretched by these figures, i’ve tracked down a website that has come up with a visual representation to help us all come to terms with just what a TRILLION dollars would look like.

Here is the link. A Trillion Dollars.

Try to keep this in mind next time a newsreader blithely reports on a multi-trillion dollar activity.


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