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Misallocation matters

Those not schooled in Austrian economics trust prices as signals of real demand.  Without stable money, with a current debt-based system, with money essentially being mortgage-debt, prices are turned on their head.

Valuable agricultural land is destroyed for speculative housing, which then lies idle as ghost towns.  Manufacturing hubs are wiped out, turning previously thriving communities into drug and whore-infested hovels.  Why?  Because the price signals motivating action in market participants in completely corrupted by our present, debt-money economic system, which is coercively imposed on us by monopoly government.

The Grip of Death is an excellent introductory text explaining the extent of the distortions.  You can read an extract of the book here.

An example of the irreparable damage done by the present monetary system can be found here, in this piece from today’s The Australian:

Winemaker fights to keep developers from the door

McLaren fights

Chalk Hill winemaker Jock Harvey finds himself on the frontline, with land separated from the planned development.

THERE’S a rise on the road to McLaren Vale where you are finally surrounded by the rolling green hills of the world-renowned wine region

The reward comes after a long, grey, 40-minute drive through Adelaide’s sprawling southern suburbs, which, if the proposed Seaford Heights housing and retail development gains approval, will expand literally up to the vineyard fence.

Winemakers are rallying against the development, which includes 1170 homes and retail precincts with apartments built on top. But they face an uphill battle; the state-owned greenfield site has been zoned residential since the 1980s.

However, a geological survey released in June shows the soil under threat is perhaps the finest in Australia for growing vines, giving them new hope.

McLaren Vale Grape Wine and Tourism Association chairman Dudley Brown believes a more long-term approach is needed.

“Why are we in such a bloody hurry to develop this?” Mr Brown said this week.

“This land has the oldest exposed geology in the entire region, at between 600 million and 650 million years old.”

McLaren Vale’s proximity to Adelaide — the last houses are about 2km from the first vineyards — has helped make it a tourism winner but has also attracted developers such as Fairmont Homes, which holds the contract for Seaford Heights.

This week it declined to comment on its plans, described by winemaker David Paxton as “low-rent”.

“Once this land goes under cement and bitumen you’re buggered forever,” Mr Paxton said.

“Would the French let this sort of crap development happen at the gateway to Burgundy? No, they wouldn’t.

“The farmers would get up and protest, burn down the council and probably bulldoze the houses if they tried to put them up.”

Chalk Hill winemaker Jock Harvey, whose vines also overlook the site, believes government is more interested in a quick buck than preserving food bowls and tourism employment. Similar arguments are advanced in the Barossa Valley, north of Adelaide, as plans are made to extend the neighbouring town of Gawler.

In McLaren Vale, the local Onkaparinga Council is still formulating development plan amendments that Fairmont will be judged against.

Mr Paxton once inquired about buying the land for vines, but was told it was unavailable.

Mr Brown admits oversupply in the wine industry means there is no guarantee the site, even if available, would be used for vines.

But he says things will eventually “settle down” and overseas demand for premium wines from areas such as McLaren Vale will rise.

For now, he fears the sight of more than 1000 new houses abutting the vineyards will damage the region’s tourism value.

“If you build houses right up to the edge of a wine region, you manage to make the wineries look ugly too,” Mr Brown said.

“Nobody goes to the suburbs for a holiday.”

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