Inflation is really just part of the same coin as the Great Resignation.

When you have a load of folk who can afford not to work, and want to sit back and live off what they accumulated to that point, then the economy experiences a slight “vacuum” in that these people’s work was there, the other molecules of the economy were used to them and the space or volume was available for them.

Nature, and the economy, abhor vacuums. So what happens? Less producers means less “stuff”, to use the terminology of the article, there’s more money than stuff, and so the stuff is the scarce resource and its price goes up.

This then means that those who have resigned from the workforce expecting their savings to carry them receive an inflationary challenge. The current players in the workforce have first dibs (usually, not always) at getting their salaries increased in some response (usually less, sometines even more) than inflation, as the employer is like “can’t lose Fred, he’s all we have left” and there may be reticence at killing the fatted calf for prodigals returning to the workplace, as the employer is not exactly the Father in Luke 15.

The Great Resigners then start to find their ranks withering as some rather sheepishly go back into employment with holes in their CVs and a learning curve ahead of them to recover and catch up their unutilised skills. Production is then able to recover, the economy rebalances. Everyone remembers when a pint of beer cost half what it does then, but they also remember earning half what they do at that future time.

Fossil fuels and other things are continually getting more scarce, we move towards peak this and peak that, but also the 8 billion people we are about to hit later this year might also prove to be peak human. Everything in the end comes back into balance.

Flexibility and keeping at it are the core of resilience. Great Resigning is neither the one nor the other.

Nie Z Tej Bajki” in Warsaw established 2 years ago the first vocational school for autistic young people in Poland. We plan to a training apartment to the School from next September. We have been granted a favorable lease right near the School. However, renovating this will require a large financial commitment.

The parents alone can’t do it without your help. Please use the bank details in the letter and kindly help. The information will enable you to help from Poland or from abroad.

Many thanks in anticipation of your support.

Prosba o wsparcie osób z autyzmem Nie z tej bajki- mieszkanie

Let us do a small thought experiment.

Let’s imagine that the meat and dairy industries are cancelled, that everyone is convinced of the vegan arguments. Which of the following scenarios is then more likely?

a) the fields where the pastures for cattle were are allowed to continue as pastures full of natural biodiversity, with cover for birds and butterflies and wild flowers of all sorts have their haven there, grazed by cattle who now live until they are 22 years old, and die natral deaths, unbothered by humans. The original aurochs gradually reappears because the races of cattle interbreed and these majestic buffalo like beasts are viewed in huge herds at a distance by our great grandchildren. Occasionally we grow a field of crops on a field naturally fertilised by their natural grazing activities.

or

b) since we cannot use the cattle we don’t keep them and cattle as well as other farm animals with the possible exception of ducks and geese are threatened with extinction. We use the pasture land which has no sense without animals on it for crops (food or energy) and since these are monocultures it stresses to extinction several species of bird, many plants and insects which only survived till now because we had pasture for meat and dairy industries. Organic farming has no sense as there are no animals to provide the dung, so we keep on using agrochemicals and reach peak phosphorus and peak potassium faster. There is then a massive famine during which two to three billions simply starve to death, and a further several million from diseases aggravated by malnutrition, or food wars.

I you answered A, I may say you’re a dreamer, and by far and away not the only one. And that, for now, is a very big problem.

Certainly Bible prophecy shows a vegan or at least vegetarian heaven – Jesus ate fish after the resurrection so probably that is still going to take place – but we are not equipped for that now any more than we can run and not be weary, or walk through locked doors, or fly up into the sky by our own mere volition. These things go hand in hand and we need to wait for them, if we are looking for them as believing Christians.

For now the task is to use the animals but to treat them as well as we can, to increase the standard of care for each species, to take te reforms made in this direction over the last 25 years as a good start, and build on them.

We are also going to have to address the population issue, as there is not any answer to the issue of agriculture and the limit on yields other than the control of population.

The “solution” of taking animals out is not a solution when they are on land not classed as arable. We cannot eat wild grasses or scrub. A goat eats the scrub, we milk the goat. That’s how we do it.

The nineteenth century was all about obtaining more and more farmed land. In the twentieth century we had to slow that process right down as a limit was reached on how much forest we can take and still have a future.

The twentieth century was all about mechanisation, innovation, agrochemicals, management methods, new varities like Borlaug’s dwarf wheat or cattle with hyperplasia.

Welcome to the C21st, where we are now relatively out of ideas, out of somewhere to go to keep food production ahead of the curve in population. So the only thing left to do is to work on the popuation. And with that comes a lot of Government intervention, probably very unwelcome Government intervention.

All those of us who have studied double entry bookkeeping will remember their earliest lessons, in which we are told how the balances of the various accounts in the general ledger are taken to one of two statements at the end of the reporting period.  One of these is the balance sheet, which (we were told in lesson one) is like a family photo, a snapshot of your business at one particular point in time, and therefore is “na dzien”, and the other statement is the profit and loss account, which is a story of how the family developed and what happened to them between the last photo, and the current photo.  Put simply, a profit and loss account is the story of how you get from one balance sheet to another.  There are in fact other ways in which balance sheet items can change which don’t involve things passing through the profit and loss account, but international standards of accounting seem to prefer it when as much as possible going on between an opening and closing balance sheet for a reporting period (usually a year) is reflected to the maximum degree possible in the profit and loss account, or as it is now fashionably known, the statement of income and expenditure.

What I wanted to talk about in this article is to let us think I’m at about the order in which things appear in a typical profit and loss account.  This is worth doing as there are many different layouts for the balance sheet as you go around the world (the Americans have theirs, the British have theirs, the continental Europeans have theirs and each of the above look somewhat different) but there is a lot more uniformity as you go around the world in the order in which things are set out in the profit and loss account, or statement of income and expenditure.

Invariably the first thing that it deals with is the issue of turnover.  In most countries which have VAT, but by no means all, the turnover figure in published accounts is shown net of VAT.  That is how it is done in Poland and that is the way in which international standards would also have us do it.  Similarly the expenses, where VAT applies which can be reclaimed by the entity, are shown net.  (This of course is different to the balance sheet, where debtors and creditors are shown gross of VAT and the difference which you would have in the profit and loss account if those items were shown gross ends up in the VAT control account).

The first question that our profit and loss account seek to answer is whether the business is making a profit or loss regardless of how it is financed or tax.  It is also good to show items which are likely to be normal recurring items, and not one-off or extraordinary items in the first part of the profit and loss account.

Hence the top of most people’s profit and loss accounts as you go around the world deals with the question of ordinary sales income and the costs incurred to get to that sales income, giving a basic idea of profit.  Before you add in the cost of selling an administration, while you are still looking at a cost of goods sold or the cost of providing the services of is a service company, the profit figure achieved is known as gross profit.  Exactly what costs and what revenues make up that gross profit actually do differ quite significantly from one firm to another firm depending on the business, and the principles of management accounting have quite a lot to say in how we will classify the costs and revenues going into the gross profit line.

Once we’ve subtracted from the gross profit other operating costs such as the selling and administration costs, we come down to something called profit on ordinary operating activities.  After that it might be a good time to look at the extraordinary activities that happened which were still operational, or “other” activities which are not core, such as sales of fixed assets or unusual write downs, and this gives you the operating profit.

The next question that the profit and loss account will seek to answer is the cost of financing the business.  We are still well before the point at which tax is applied, as finance charges such as interest on business loans are usually tax allowable.  We look in this section of the profit and loss account at the interest received and take off the interest paid.  In Poland we have just about any foreign exchange differences also appearing in this section, where as in most western countries it would be considered correct to examine foreign exchange differences to see whether they really appeared on financing decisions or an operational decisions, and put them in the correct part of the profit and loss account depending on the answer to that question.  In Poland they are automatically considered to be part of the financing decision, which is not always true and therefore sometimes leads to misleading ratio analysis unless this is taken into account by the analyst.

At this point the profit and loss account will show us the profit on all the ordinary activities, and the next question that it starts to answer is what the tax is on that.  If a company is applying deferred tax, then the tax figure shown in the profit and loss account will be normalised tax on the profits to that point.  It takes account of timing differences between operational treatments of transactions and there tax treatments.  This means it probably won’t be the same as the figure on the tax return for the year.  The difference between the figure in the profit and loss account and the figure on the tax return for the year is usually going to be the amount added to or subtracted from the deferred tax assets and liabilities and the balance sheet.

In Poland that is usually the end of the line for the profit and loss account, however in some groups the profit and loss account goes on to answer the question ‘how about minority interest?’ which comes after the tax question because tax falls regardless of who the minorities are, and then questions about dividends are dealt with in the profit and loss account in many countries, but not generally so in Poland.

In order not to get confused the questions which the profit and loss account is trying to answer, it is important to observe the order of information, and also to consider whether an item is needed in order to help is to say the very important question of whether the underlying business is profitable or not, and the more the answer to that is yes, the higher up in the profit and loss account you should show it or expect to find it.