{"id":24439,"date":"2017-07-13T18:57:59","date_gmt":"2017-07-13T23:57:59","guid":{"rendered":"http:\/\/olduvai.ca\/?p=24439"},"modified":"2017-07-13T18:57:59","modified_gmt":"2017-07-13T23:57:59","slug":"our-financial-buffers-are-thinning","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=24439","title":{"rendered":"Our Financial Buffers Are Thinning"},"content":{"rendered":"

Our Financial Buffers Are Thinning<\/a><\/h3>\n
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The fragility of our financial buffers will only be revealed when they fail in the next crisis.<\/i><\/div>\n
While\u00a0buffer<\/i>\u00a0has a specific meaning in chemistry, I am using the word in the broad sense of a reserve resource that absorbs the initial destructive impacts of crises or system overloads.<\/b>\u00a0Marshland along a sea coast is a buffer against destructive storm waves, for example.<\/div>\n
A savings account acts as a buffer against financial drawdowns or losses of income that would otherwise quickly cascade into a full-blown crisis.<\/div>\n
Redundancy of resources can act as a buffer.<\/b>\u00a0If an airline maintains an aircraft in reserve, this reserve plane acts as a buffer against the disruption to the airline’s scheduled flights should one of its aircraft be unexpectedly removed from service by a mechanical failure. The reserve aircraft can replace the plane that was withdrawn from service with minimal disruption.<\/div>\n
Stockpiles act as buffers against supply disruptions.<\/b>\u00a0A storage tank of oil buffers a refinery against any delay in its incoming shipments of crude oil. Supplies of food and water buffer against severe natural disasters that disrupt regional water service and food deliveries.<\/div>\n
Credit can act as a financial buffer against unexpectedly high expenses or declines in revenue.<\/b>\u00a0If a tire on our vehicle goes flat during a road trip and we only have a few dollars cash, a credit card buffers the disruption by funding the replacement tire and labor.<\/div>\n
But over-using credit can end up thinning our financial buffers.<\/b>\u00a0If someone starts using their credit card not as an emergency buffer but to augment their cash income–in effect, acting as if the borrowed money was a pay raise rather than a loan–their credit line diminishes to near-zero and when they actually need credit for an emergency, it’s no longer available.<\/div>\n
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…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Our Financial Buffers Are Thinning The fragility of our financial buffers will only be revealed when they fail in the next crisis. While\u00a0buffer\u00a0has a specific meaning in chemistry, I am using the word in the broad sense of a reserve resource that absorbs the initial destructive impacts of crises or system overloads.\u00a0Marshland along a sea […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[127,15516,312,4924,8676],"class_list":["post-24439","post","type-post","status-publish","format-standard","hentry","category-economics","tag-charles-hugh-smith","tag-financial-buffers","tag-financial-crisis","tag-oftwominds","tag-redundancy"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24439","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24439"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24439\/revisions"}],"predecessor-version":[{"id":24440,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24439\/revisions\/24440"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24439"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24439"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24439"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}