Monetary hacking

Well, I guess if this site had not been taken down Thursday night by forces unknown, I’d be giving you a few more words on what a mess we are getting ourselves into. Unfortunately, as a result of events my propeller-heads only surmise at the moment, some snake may have rerouted traffic from this site through a change in its basic address.

As a result, about 85% of the people who come here for cheap sex and boozy predictions were forced to spend time instead with their spouses and pets. I am so, so sorry.

But as I said, if I were actually making a posting right now, I’d be lamenting the fact this world has lost its mind. I mean, what else should you call it when the US central bank says it will create money to buy its own bonds (it’s called ‘quantitative easing’ or, more technically, ‘peeing in the soup’), and the stock market shoots up 200 points, commodity prices go nuts and everyone forgets the US president was rebuked two days ago meaning the American housing market will go into freefall?

What monetary authorities are trying to do is tell you about a shiny thing over there while your wallet and pants are being stolen. It’s clever, and it will work for a while, but eventually you’ll feel the winds of November on your dangly bits.

I wish I could tell you more about what this desperate action will mean. How it could create a faux rally that might ultimately make matters worse. How so many people are being suckered into filling their basements with boxes of useless silver. How the wealth effect of soaring assets could lead, ironically, to a deflationary crunch far worse than if central bank diddlers had stayed home watching The Good Wife.

But, alas, can’t. This site’s tanked again, and this time from a malady even my high-paid digital roadies can’t fix.

The good news, however, is we’ll still be floundering tomorrow. And that’s a comfort.

132 comments ↓

#1 Dan in Victoria on 11.04.10 at 10:12 pm

Been a weird week Garth, a lot of the sites I visit are going crazy.
They are up then down, then links are linking to where ever they please.
Took a while to figure out how to get in here consistently.
A couple of “economist ” types that I read are as perplexed as you.
Oh Well, the sun will come up tommrow.

#2 Min in Mission on 11.04.10 at 10:28 pm

Actually, time with the spouse isn’t that bad

#3 Randy on 11.04.10 at 10:30 pm

I couldn’t access the site from my Rogers internet nor through my proxy in Georgia, USA but thank God my BlackBerry works! I needed my fix today ;)

t

#4 Jeff Smith on 11.04.10 at 10:35 pm

Garth, isn’t QE is actually more like: You cook a pot of soup, and then you print some money to buy your own soup. So after being not so satisfied that you just bought your soup. You then print even more money (QE2) to buy your soup again. It’s called the great American economic model.

#5 Keith in Calgary on 11.04.10 at 10:49 pm

Times are tough…. And uncertain for sure!
Got my first sale today. Less than 1 month into the new career. Real estate is really exciting and thrilling.
Will I sell again next month? Who knows.
To remain professional as a RE pro is difficult. I apologize for bad mouthing realtors: it’s tough out there.

#6 HouseBuster on 11.04.10 at 10:51 pm

Wait until oil hits $150 and stays there. Then we’ll see some real fireworks.

#7 Patz on 11.04.10 at 10:56 pm

Soooo, I’m the only one who could read the post—spooky!

#8 Basil Fawlty on 11.04.10 at 10:59 pm

Useless silver, were you being sarcastic? Let’s see here, it’s gone from $8 to $26 in six years, while being subject to naked shorting by the four largest US banks (class action lawsuits filed). In addition, it is a metal used intensively in many of today’s high tech electronic devices and has a myriad of other uses. The world continues to consume more silver on an annual basis then is mined. Finally, the price keeps increasing as the value of dollars continues to decrease.
Try as I might, it is impossible to equate silver with “useless”. To quote Ross Perot, “that dog don’t hunt”.

#9 Crash Callaway on 11.04.10 at 11:12 pm

Peeing in the soup sums it up all right.
Just when we think the last trick in the book’s been played a new scamster creates pent up demand.

Every week we seem to say the fools have all been used up and we can slowly turn it around back toward sanity.

It’s like a freakin roller coaster where some idiot keeps giving the ridemaster a new handfuls of tickets and there’s no getting off.
We’re held hostage by the ride lovers.

Over the past 2 yrs I’ve gone from patience to anger to outrage over the whole stinking mess.
To those that still remember what normal was how are you coping?
The circus is a nice place to visit but some of us just want to go home.
It’s not just real estate & economy that’s finished, it’s the humanity and our control over it.
A tug on a string here or there and we dance for the master ($)

#10 Fiendish Thingy on 11.04.10 at 11:14 pm

Well, it looks like I may have to move my $USD from my home sale to my Canadian account sooner rather than waiting who-knows-how-long for the dollar to bounce back against the loonie. I guess parity is better than getting 80 cents Canadian for every $1USD?

Good luck Garth on getting the site back up; hope you send a team of ninjas out to punish the morons causing all the trouble.

FT in California

#11 Nostradamus Le Mad Vlad on 11.04.10 at 11:35 pm


The attempts to jingle your bells are becoming more brazen, so your continuing message of fiscal frugality and self-responsibility is right on track.

Imitation is the sincerest form of flattery, but don’t take this as a compliment. Most bloggers here are also good at pointing out cold, hard truths, ‘coz the truth always hurts.

Keep up the good work!
*
From the prior post . . .

#23 Tyler — Accurate. The world’s self-appointed messiah, Uncle Sam, is insolvent.

#25 Timing is Everything — “Rent it…High maintenance.”

Absolutely. No point in paying for something unnecessary in one’s life!

#31 concessionman — “Funny in that picture of Jennifer you can barely see the horns…”

The devil is in the details!

#36 dark sad person — “Markets like to crash on good news-”

Correct. With Gordon Campbell now exiting BC and Jim Prentice leaving at the end of the year, the Cdn. stock market is free to crash whenever it wants.

No doubt those two will be back at some point.

#37 Are You Kidding Me? — “Just remember that whatever goes up MUST come down.”

Well said. See above and below.

#43 S.B. — “War on Middle Class.”

That’s what the elite want which is why dubya, Obama and Harper have been put in place — to hasten the downturn, take a bow and exit stage left.

They are almost gone and we are almost done.

#68 David B — Be interesting to see in a couple of months whether a Chinese company offers $50 billion and gets it.

#79 Behind the Numbers — “. . . but need the income (ie. those retired).”

Amen! Someone who understands! Nicely pointed out.

“Your head will explode. — Garth” — Into cauliflower with cheese sauce?

#94 JB — Good question!

#107 Chaos — “She’ll be the new premier of British Columbia.” — ABC (Anyone But Campbell)!

#132 mid-Ontario — “. . . that inflation is on the way. Oil up to over $85 with everything else following -wheat, grain,corn,sugar,coffee. You cannot print money forever (QE2) without consequences.”

You are right. There are consequences for everything that is put in place and starts a new cycle. Sooner or later the consequences of today’s choices will come home to roost.

In-, stag- and deflation are part of economic cycles, but hyperinflation is purely political, and if the elite see a good chance of increasing their wealth via WW3, they will use whatever means are available to them.
*
US Fed Buyback may lead to excess food inflation. 2:18 clip.

3:17 clip The World Bank and the IMF — a match made in hell.

Interesting that Obama is in Asia. Buy silver, avoid gold. Plus — War “One has to wonder: is all this hardware being dispatched to prevent a confrontation… or create one?!?!?

“Or is it possibly a (not so subtly veiled) threat to the G20, which meets in Seoul from 6 November through 12 November, not to drop the US dollar as the world’s reserve currency?” wrh.com.
Vaccinations Merchants of death.

6:09 clip “Video: Start at the 2-minute mark – Former Rep. Paul Kanjorski lies about the meltdown … Wall Street beholden, bailout-loving, martial-law fear mongering, Hank Paulson’s best friend, Paul Kanjorski was kicked out of Congress tonight.”

Nine Reasons why QE is bad for the UK pound, the US$ and Cdn. $.

Obama 1 Spot the Difference! Obama 2

Jon Stewart “Not as many people are aware of it as should be, but Jon Stewart’s older brother, Larry Leibowitz, is the chief operating officer of the New York Stock Exchange.”

dubya’s WMD 1:42 clip.

Nice work if you can get it, along with a gilded paycheque!

#12 DiGiacomo on 11.04.10 at 11:59 pm

maybe they’re just testing their new internet kill switch on you?

http://www.tomshardware.com/news/obama-shut-down-internet-legislation,7478.html

#13 bill on 11.05.10 at 12:04 am

”If you are reading this, you are one of the few.
This site is being disrupted by a major issue”

sorry to hear that garth. on the other hand all my silver jrs along with the oil jrs, went up nicely today….sounds like another two years of congressional intransigence will only help them more.

#14 Kate on 11.05.10 at 12:19 am

Who is attacking your site? Realtors?

#15 Deliverator on 11.05.10 at 12:24 am

The end game of excessive ‘quantitative easing’, or more properly, currency debasement, or money printing , if you prefer, is inflation. Commodities, precious metals included, do well in highly inflationary environments. Assets, which should yield a return, like, say, real estate, do not.

#16 april on 11.05.10 at 12:31 am

Garth, I’m sorry we’re having this problem again. I’m sending your link to everyone I know.

#17 blobby on 11.05.10 at 12:38 am

Those realtors really know how to hold a grudge…

#18 Canayjun on 11.05.10 at 12:39 am

Wow. I can’t believe you carry such power. I mean you and you alone caused the RE market to stop dead in its tracks. You and you alone will cause the RE market to fall, crash, correct, whatever term you want to use. You and you alone are making this economic recovery impossible. You wield such an enormous power. No wonder you’re a target of the crazies. You and Ignatieff would make a great team, cuz you see Ignatieff alone caused Canada to be passed over for a seat on the UN Security Counsel. He is also a very powerful person.

Anyway, sorry for the problems you’re having. I really enjoy reading what you have to say. The world is upside down right now, but that won’t last forever…

#19 Dan in Van on 11.05.10 at 12:39 am

Life goes on….

#20 Foggy on 11.05.10 at 1:15 am

Don’t know about you Garth, but with each one of these hacker things I get steadily more angry. There are a few options. There are people you can hire that can sleuth their way to the source that is doing this. I would imagine they’re expensive. But you can litigate the shit out of the offender and recoup some of it. Or put in some tedious extra securities. None of us will mind. Anything to defeat the a$$hole who is doing this. I dislike bullies and people who try to intimidate me. Do whatever it takes.

#21 Will on 11.05.10 at 2:31 am

Americans are acting like those crazy women who keep going back to their abusive boyfriend hoping he will act reasonably this time. They never learn.

#22 Devore on 11.05.10 at 5:20 am

I mean, what else should you call it when the US central bank says it will create money to buy its own bonds /…/ and everyone forgets the US president was rebuked two days ago meaning the American housing market will go into freefall?

Why stop there? All through the country, Americans kicked out the incumbents, quite literally not caring who they’re voting in. Clearly the message was we don’t like the bailouts, the banksterism, record deficits, the backroom machinations, record bonuses, while nothing’s been done for the common person. Socialism for corporations, cold capitalism for the people. Time for some change. And literally the next day, Bernanke gives everyone the middle finger and shows how a dictatorship really works. And if anyone gives him grief over it, he just flashes the patented “Bernanke smirk”. Whatcha gonna do punk? Vote me out?

As long as we live under our monetary system, someone’s gotta be in charge of the money, and the worst people to do it would be the ones spending it, so an independent central bank it is. But surely there’s gotta be a way to stop this guy, no? You can’t audit him, what for? he won’t answer questions, why should he? he speaks nonsense, does he even have a plan for the next step? Seems like he’s just throwing things at the wall to see what sticks. Maybe he’ll last long enough to see the economy turn around, just in time for everyone to pat him on the back and put his face back on cover of Time. Unfortunately for him, the title Maestro is already taken.

Meanwhile, 2009 marked the first year when total federal receipts just about exactly matched mandatory spending (social security, medicare, medicaid, etc), leaving everything else to deficit financing (like, you know, running the country, paying for Obama’s vacations). 100% of everything that came in was already spent. And it’s not gonna get any better.

Where exactly is our big brother headed to?

#23 David B on 11.05.10 at 6:54 am

Yes, QE2 ….. dahhh “NO” !!

An early Spring had sprung, the markets albethey near or above the day before the bang we knew and undertood we were on shaky grouund and were living with it.

$600 freaking billion, printed! and shoved under the table borrowed from Happy Ben’s barn yard. All those dumb bunnies who were sent to Washington now have their heads stuck in the early Alaskan snow while the ode ones are stuck in yeasterday’s health care. The train appears to have shot through the station (s) and left emty without one thoughtful minded person on board and that includes several hour long TV show hosts that should understand just what a dump move this was and explained to the American taxpayer just who gets their hands on this payrol! (There is a very serious side to QE2) Hello?

News from WSJ, the banks are first going to give shareholds a early Christmas bounus, Wall Street top cats who’s Christmas bonus is tied to the market will see great Christmas bonuses …. I do not even want to tell y’all about Hedge Fund Managers & Investment Bankers …. yes our little ode investments look better, for now! new and better jobs (NAFC) (you know first word is Not)

News of the cash has spiked GM to say it future looks better hopping for a return on those good ode investors big time, other companies much the same.

American is paying down debt and do not trust any goup in Wall Street or Washington and putting their cash in tin cans in their back yard under a large dog house.

The banks will take the cash and the banks will continue to ask for your first born for a nickle …. more than that will require cash assets or your life signed away.

Housing will remain in the tank …..

Finally the guy who could have said “NO” is off on a jolly to Europe where early word is they are not happy with QE2 or his plan… and they are not talking about a boat ride in the Med on QE2.

So stand by, the market wave is headed ashore and we are all onboard. Good news we can see the shore bad news there are rocks there. “BIG ROCKS”

AND, IRAQ, AFGHANISTAN, air port security and transportation

#24 AM at LHR on 11.05.10 at 7:33 am

Took me a number of tries to get on here from LHR

# 15 Kate wrote
Who is attacking your site? Realtors?
———————–
Highly unlikely IMO

The conspiracy crowd appear to take on a little more credibility it seems

Google Urban Survival and Half Past Human amongst others…………Interesting

At least the Mad Vlad was able to post with his links which I find are always interesting also.

Cheers

#25 MikeT on 11.05.10 at 8:33 am

excuse my 2 cents, but I think the Fed’s action is a little different than what you describe it to be. In my view, it is a PRIVATE bank (the Fed) buying US GOVERNMENT bonds (issued by the Treasury) with the money that it creates with a couple of computer keystrokes aka from thin air. It’s not the US Government that creates these money, so it’s not like they they are selling their own bonds to themselves.

On another note, I was wondering: if the Fed creates money from thin air, and it can create as much as it wants or the US Govt (which “supposedly” keeps it under control) will allow it to, then it could also take any amount of losses. So, let it buy all the toxic crap that is crippling the banks’ balance sheets, and then just burn the stuff in the stove and fuhggeddaboutit. Yeah, it will issue money to buy the crap, but it will clean up the economy. The dollar will fall further, which is the biggest drawback, but it’s falling anyway with QE2, so what’s the problem? Oh yeah, the Fed owners may not agree with that and they have the true decision powers, so will won’t be done anyway. Just a (crazy) thought…

#26 Utopia on 11.05.10 at 8:52 am

#9 Basil Fawlty said:

“Useless silver, were you being sarcastic? Let’s see here, it’s gone from $8 to $26 in six years”
——————————————————–

Silvers climb has been even more dramatic than you suggested today Basil. In October of 2008 just twenty four months ago it was priced below 9.00 an ounce. It has tripled in value in that time. Even lunatic Vancouver housing price increases couldn’t match that gain.

#27 somecatchphrase on 11.05.10 at 9:11 am

Many observers expect QE to go on to infinity. I wouldn’t be so sure.

If QE succeeds in driving the oil price back over $100 while the economy remains stagnant, Bernanke could run into a brick wall of opposition.

With a skyrocketing gas price, Congress, corporate America, and Joe Six Pack will be united, screaming in unison, calling for Bernanke’s head on a plate.

Combine that with pushback from foriegn central banks and foreign governments who are not happy with the Fed’s currency debasement. The chorus of voices opposing further QE will become deafening.

Without ongoing QE, beyond that which has already been announced, you could see a stock and commodity price collapse, along with rising interest rates. This could all potentially happen within the next year.

#28 Porteño on 11.05.10 at 9:30 am

@Basil Faulty. Like most economists, Garth doesn’t understand the meaning of money. He seems to contracting the same disease of hubris that anyone who ever has a modicum of success does. Note how often he points out his brilliant strategy of buying bonds two years ago. He gets a lot of things right, but it does get a bit annoying.

#29 Just Another Geek on 11.05.10 at 9:51 am

I would have to agree with Hector’s Corpse.
Hard to believe you have actually paid $ for this level of security, or lack thereof.

#30 calgaryillusion on 11.05.10 at 9:57 am

Boxes of useless silver?

Just like the Chinese are storing warehouses full of useless copper and rare earth metals? Just like the price of corn, oil, cotton, coffee, grain etc are going to the moon? This is not a coincidence Garth. It is currency warfare, and the commodities happen to be on top of the toilet bowl while the precious paper assets of the world are swirling to the suck zone.

#31 Tim on 11.05.10 at 10:11 am

Things just got better in BC. We finally have the dishonest, arrogant, corporate stooge, Premier of BC stepping down, since his party forced him to do so. Now if we could only get him to admit his involvement in the BC Rail scandal…

#32 Fish Bait on 11.05.10 at 10:17 am

Keith in Calgary,

Your posts are lame. You’re trying to make it sound like you’re a new real estate agent. We know that you’re a long time agent. But your creative writing skills suck. You sound as stupid as Devil’s Advocate. No Keith, you didn’t get your first sale. Considering how stupid you sound, maybe you are Devil’s Advocate? The guy’s a moron who hasn’t the brains to actually listen to what people are saying about his blabber. If multiple people are saying you’re out to lunch, maybe…just maybe….their on to something.

#33 Debt's Dark Embrace on 11.05.10 at 10:17 am

Market fundamentals do not matter anymore, and have not mattered for quite some time now. In the brave new world what matters is animal spirits, caused by balls to the wall cheap credit. Fundamentals do not equal reality. Perception equals reality.

#34 Poor Buffalo Farmer on 11.05.10 at 10:23 am

Oil may go to 150us$ a barrel…but when their dollar is only worth 50 cents canadian…I think we will be better off!

#35 BDG-YYC on 11.05.10 at 10:32 am

#36 Buffalo Farmer
What in the world makes you think that our $ being double the value of the the US$ – the customer responsible for buying 80% of our exports would make “us” better off?

#36 Live within your means on 11.05.10 at 10:32 am

I was surprised when I clicked onto Garth’s link this am to find that it didn’t work. Twice in a matter of a few months. Deal with 2 banks online and never had a problem, thankfully. But, sure they spend big $$$$ to ensure online security.

Hubby manages many school servers and spends much of his time securing them. Students are very inventive. Even tho the IT dept. had installed Deep Freeze on every PC in the schools, some of the teachers, VP’s and Principals complain and don’t always follow the rules.

At home we use Avast antivirus software and hubby does automated backups.

#37 Dan on 11.05.10 at 10:34 am

The Housing crash is getting worse and garth is paying the price. Make no mistake VESTED INTERESTS are hacking and attacking garth. WHY? Because they know he is right and they hate him pointing out the obvious to the stupid masses which the vested interests wish to keep clueless. Anyone buying into this overvalued housing market bubble ponzi is the biggest fool. Realtor shills like AL on ice cold property will lie and lie and lie. They look so dishonest it is amazing anyone would buy from them. Al and his team look worried about the housing crash .Spread the word the house crash is a fact and getting worse. It’s getting so bad that they are now attacking garth.

POP………………………..

Realtor shills………………..Stop him…..Someone Stop Garth . The market is crashing

Bankers………….Stop him ……..STOP……the market is crashing.

Greaterfools…………………..I’ve lost my house and gone bankrupt. Tens of thousands of others are almost in my shoes.

#38 brett on 11.05.10 at 10:35 am

“faux rally” -garth are you mad!!! where else do you expect institutions to put their $, under the mattress (bonds)….as bernanke and geithner burn the value of the currency with their latest ponzi scheme. the companies in the stock market are real assets, and they will be seen as a hedge on monetary inflation. Your deflationary delusions have no basis.

Joe sixpack has been frightened by the 2008 meltdown, but 2010 is not 2008, perhaps 2012 will be, but not now.

#39 jess on 11.05.10 at 10:47 am

timely step downs?

http://www.cbc.ca/money/story/2010/11/04/andrew-saxton-credit-suisse-tax-haven.html

=
premium rates cuz’ we’re worth it
http://www.reuters.com/article/idUSTRE6424RU20100503

=

http://taxjustice.blogspot.com/
Just steps away from stopping tax evasion: European Parliament votes on draft report

04 November 2010

by Maria Jose Romero and Miguel Carapeto

On 9 December 2010, the European Parliament’s Committee on Development will vote on the Draft Report on Tax and Development led by Member of the European Parliament Eva Joly.
The report aims to present the European Parliament’s views on the initiatives set forth by the European Commission in the Communication on Cooperation with Developing Countries on Promoting Good Governance in Tax Matters. This report is good news for civil society organisations such as Eurodad that are advocating to effectively clamp down on tax havens and stop more than USD 600 billion of tax-related illicit flows bleeding the finances of poor countries every year.
======

#40 Got A Watch on 11.05.10 at 10:49 am

Evangeline -“#97 ((will recommend you just switch to cheaper things, like cat food ))

geez have you checked out the price of catfood lately?”

Yeah I have cats and dogs.

I was referring to the economists who use what they call “substitution” when calculating things like CPI inflation numbers. Basically, it means if prices for steak go up, they figure consumers will switch to cheaper alternatives, like hamburger, or maybe sawdust, and thus won’t spend any more than they did before for food.

It’s just a way they can rob people like seniors on fixed incomes, as their “increase” is calculated based on “CPI inflation” which doesn’t rise anywhere near as fast as real inflation is. They just lie to you with a straight face, and say your cost did not go up. Much the same reason why they excluded “volatile food and energy prices” from CPI, even though oil for example it is a cost input for everything in the economy just about. So this year, the Gov can announce “there is little increase in CPI, so your pension won’t be increasing any” in public, like they recently did. It’s a COLA that does not reflect the real cost of living, just a lower economists manipulated fantasy number. They should call it NCOLA, for No COLA.

Never you consumers mind that gas is way up, food way up, etc. It really is not, if you are an “economist”. Reality has no bearing on economists, after all, in their academic ivory towers, this is all a good thing. The Gov loves it because they don’t have to raise the pensions paid to seniors etc. Too bad for you if there is no “cheaper substitute” for what you need to buy, that’s not their problem.

———————————————————

Zimbabwe Ben Bernanke only cares about 2 things: Number 1 is saving his Bankster buddies on Wall St. Number 2 is keeping the US Bond market alive, so that the US can keep on selling Trillion$ worth of fresh Bonds to fill the Budget deficit.

So he is running the biggest real time experiment in monetary madness ever conducted. We are just the lab rats stuck in the maze.

Because if you really think about it , QE is about one of the stupidest ideas ever thought of. But that is not going to stop him. When does logic and common sense ever stop a Government anyway?

The truth is, every major US Bank is wildly insolvent many times over, if they had to actually account for all the mountains of toxic paper they are sitting on. The US Banksters have about $400 Billion alone of “2nd mortgages” and “HELOCs” on their books that they say are worth about 95% of face value, when in fact they are worth not much north of 0. That alone would have them all out of business, except they can just lie about it, due to political pressure on the accountants (FASB) from corrupt politicians to just let it all sit there at whatever “value” the Banks says it has, period.

So when several FED officials said this week they are interested in keeping stock prices high, that is just a distraction. They don’t want you looking at the Bond market, where their real interests lie. The “Senior Bond holders” must be protected at all costs, if that sinks the entire economy, so be it.

If push comes to shove, they don’t care about stocks except for the psychological value of “rising stock prices” and their claimed “wealth effect” (“stock market goes up, consumers feel better, go out and spend”). They will act to save the Bond market at all costs, and if that means they have to print money and buy every US Bond in existence, they will. That way the price won’t fall, as they are well on their way to owning them all, and would never sell them at a loss.

About the rest of the “economy” and “outside interests” (anyone not a Bankster) and “foreigners” (China etc) and consumers, they could not care less. They only care about saving the Big Banks at all costs, and there is no length they won’t go to do it. As demonstrated by QE2. It won’t do a damn thing for jobs or the Main St economy, and Ben knows that full well, he just doesn’t care.

He hopes to ignite “inflation” by driving up commodity prices, and the value of foreign currencies vs the US $. If you starve, well, that’s just an unfortunate side effect.

As a bonus effect, it can help to slow or even destroy the economies in foreign nations, like China or India or Brazil or Japan etc, where inflation will really take off. That’s why so many of those countries are protesting, they see Ben as waging an economic war on them by dropping the US $. And they are right, it’s just a by-product of #1 and # 2 above that Ben is clearly quite happy with. It’s like a tariff on their exports to the USA, that is not written in a law that could be appealed to the WTO or some other trade body.

It’s also a stealth tax on Americans, as their purchasing power with the US $ falls. Again, Ben could not care less, he is only focused on his 2 primary goals.

The fact the rest of the world, and even the US, could blow up, both figuratively (economic contraction) and literally (WWIII) is not of any appreciable concern to him. The last time we had a global movement to devalue currencies for competitive advantage the result was WWII.

Or to put it more simply, Ben is a corrupt brain dead idiot.

#41 bigrider on 11.05.10 at 10:51 am

“Stock market shoot up 200 points commodity prices go nuts”

Garth you have made me nervous. Previous you have said financial markets are going to continue higher. I interpret above comment today as you believe impending increased deflationary scenario may cause stock market grief as well.?

Please explain.

#42 BrianT on 11.05.10 at 10:59 am

#29Some-Yes. Even now, most cannot comprehend that conventional oil supply peaked a few yrs ago and is currently in a gradual decline. Bernanke’s moves would have been far more effective yrs ago for this and other reasons.

#43 Dorf on 11.05.10 at 11:01 am

#28 Utopia

You don’t need two laptops. Ditch one and run ZoneAlarm (it’s free from Zone Labs) on the one you keep and use it for everything. Zone Alarm is the best firewall I have ever used.
If you have a bad habit of opening any attachment that presents itself, run AVG Antivirus and do regular scans.

Garth’s problem likely lies within his service provider’s DNS server.

If you want to check the security of your personal machine (after installing ZoneAlarm) go to http://www.grc.com and there are free security checking tools there. Steve Gibson is a computer security expert and provides his knowledge for free.

Paranoia will destroy ya, knowledge is power and control.

Remember that 99.9% of laptop users are connected to the internet and use one machine, and they are doing just fine.

Also remember that you don’t need to wash your spouse in antibacterial soap before making love.

You don’t? — Garth

#44 Silver&Gold... or Copper on 11.05.10 at 11:03 am

Hey Garth,

Know you’re busy kneecapping the jerks who keep undermining the truth of what’s going on in the world by blowing up your website, but if you get a chance do you think you could do a posting on what’s going on with commodities like silver & gold? Actually, maybe silver & copper as gold has been talked to death…

It’s just that I see some conflicting views on whether or not to invest in silver in the comments section from your readers, and thought it would be enlightening to have you weigh in on the subject.

Take it easy, and if all goes well perhaps I’ll see you in Toronto on Tuesday.

Cheers!

#45 BrianT on 11.05.10 at 11:04 am

#42Got-Yes-at this point, you could have extremely high actual cost of living increases in the US with very low official inflation numbers. Don’t cry for me Argentina.

#46 Moneta on 11.05.10 at 11:06 am

I doubt voters are as stupid as you think they are. Anyone who manages their own household finances knows you can’t go on spending way beyond your income forever. Only leftists seem to believe that myth. That’s why they never discuss where “tax dollars” come from, except to call for higher taxes on “business”. Like businesses exist in a parallel universe, where they can just happily pay ever higher taxes forever with no repercussions.
————
There are different shades of gray. I believe there is a a world of difference between being stupid and being unsophisticated in financial matters.

I believe most Canadians are the latter. Most people do not even know the difference between debt and deficit. That’s basic. They don’t want to pay more taxes but they still want their services. They’re convinced that someone out there is taking advantage of them (which is true) but not realizing that they’ve been living above their means for decades.

I also believe this rightist movement born out of anger is a moving train. Nothing can be done to stop it. And it’s going to make things worse. But no matter what color spectrum politician comes in, we’re stuck between a rock and a hard place for at least a decade.

IMO, the writing is on the wall. Our debt-ro-GDP ratio will be going up. It will peak and then we’ll need to bring it down. And we’ll have 2 choices:

1. Write off bad debt and bad assets
2. Increase our GDP: growth or inflation

I believe that 1. will not happen as much as we’d like. Every time you write off debt, you write off someone’s assets. That’s the part that is freaking them out. Imagine pension plans which are already underfunded if they start letting write-downs happen. They’ll paper over most everything. If there are cuts, they will be in the entitlements and austerity will be forced on the indigent. They might cut taxes but they’ll be printing to cover those. There’s no free lunch.

2. The US will print and this will force Canada to print. This will create inflation. We’re a mature ageing economy full of debt for crying out loud. 2/3 of boomers don’t have enough saved up to retire. I wouldn’t bet on change when it’s the same freakin people holding the bridles. It’s possible to teach old dogs new trick but it’s quite hard. I,m not holding my breath. The boomers will want more of the same until the system cracks for real.

Our leaders talk about growth but they know darn well that it will be mostly inflation. Anyways, our friend Carney can’t scream from the top of church steeples warning us of future inflation. What good would that do? He’ll only be allowed to comment on it once the true effects are upon us and cannot be denied. Just like he’s now shaking his head over household overindebtedness, now that it’s too late. In the final analysis, you’ve got to deflate those entitlements without writing anything off… there are not 100 ways to do that.

Do I think most people see this? Nope. Nobody around me wants to talk baout this because it’s not fun.

#47 BrianT on 11.05.10 at 11:08 am

#38Live-a guy put AVAST on mine and so far it seems to work very well (knock on wood). The best part is the price-FREE-I guess they survive on the upgrades.

#48 Rob now in Nova Scotia on 11.05.10 at 11:10 am

… sniffle…I never realized how much I love this site until I tried to read the blog and couldn’t… sniffle…

“Useless silver”? Garth, I beg to differ. Silver is used in batteries, all kind of electronics (solder), hybrid cars, solar panels and more things than I can count. It will never be useless. It is the only metal whose oxide is conductive (the lines on your car’s rear defroster are made from silver oxide), has the highest reflectivity and highest conductivity of all the metals. No, Garth, silver will always find a use in industry. Best of all, it is poor man’s GOLD so it goes up and down with the price of gold. What more could you want?

#49 Reg Dunlop on 11.05.10 at 11:11 am

I live in Oakville, Ontario. It’s quite a good example of a place where people say “it’s different here”. October figures released by the local REB show sales down by 34% and the average price down by 8% compared to last year. You can read more pertinent info here:

http://www.omdreb.on.ca/press/October%202010%20-%20OMDREB%20Market%20Report.pdf

#50 Dorf on 11.05.10 at 11:12 am

#38 Live within your means

Deep Freeze – a very good product, especially for PCs that are publicly available, such as schools, libraries, kiosks, labs, etc. It’s not very necessary for work PCs where the same person is using the same machine all the time, though.

I met the guys that created the program and spent the day with them, perusing their technology and discussing it’s potential. They dared me to hack it and even provided me with a free production copy. I ran it on three different types of computers (tablet, laptop, PC with different operating systems) I was unable to cause any damage or have any of my changes stick. A reboot of the computer restores everything to Day One. IT guy’s best friend.

#51 Keith in Calgary on 11.05.10 at 11:12 am

Fish Bait:
Yes, I am a new realtor. Sales is all I know (Kinda sounds like Herb Tarlek!!!)
Still doesn’t change the fact that yes, RE is going down the tube. Big deal.

Now am I both lame and stupid? You’ve decided that.

#52 LastMan on 11.05.10 at 11:14 am

I wish I had a box of silver in my basement.

#53 fancy_pants on 11.05.10 at 11:15 am

When QE is dressed up like the new hip trend then you know they are really at the end of their rope.

It is down to the defibrillator folks. Elvis has left the building. Yes, it is becoming a dramatic exit and the encore won’t look, sound or feel like the show that was once enjoyed.

economic CPR on an otherwise clinically dead economy may momentarily appear to jumpstart the heart but what they won’t tell you is that it doesn’t actually start it, it only fries it more.

#54 Apsalar on 11.05.10 at 11:36 am

Things must be bad. CREA is caving:

http://www.theglobeandmail.com/report-on-business/economy/crea-slashes-home-sales-forecast/article1786967/

#55 NotAGreaterFool on 11.05.10 at 11:36 am

Interesting Read:

http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2010/10/18/o-canada.aspx

#56 Ottawa S. on 11.05.10 at 11:37 am

The Good Wife is currently my favourite show on TV. ;)

#57 p. on 11.05.10 at 11:37 am

How long do persons continue to make these paper claims to “bonds”, “stocks” and “currencies” that are produced in numbers as the leaves on the trees? These seasons of spring and summer of twenty years time, have offered a harvest to gather wealth that lasts for centuries. When the economy of the dollar, becomes as your “Autumn” and arrives suddenly, they will pause from this foolishness. In that time, the savings for the future of their children will be as these dried “leaves”of winter, blowing in the wind!

#58 Weeping in Windsor on 11.05.10 at 11:38 am

**As a result, about 85% of the people who come here for cheap sex and boozy predictions were forced to spend time instead with their spouses and pets.**
Garth

Wish I could tell you which one growled the loudest when I tried that.

#59 Tom from Mississauga on 11.05.10 at 11:44 am

Hi Garth
QE2 is about creating high inflation in China. Big Ben will unpeg the RMB if the G20 can’t. It’s not until that happens that manufacturing jobs, jobs that are needed for real recovery to happen will return.
Tom

#60 McSteve on 11.05.10 at 11:56 am

My on-line brokerage is bombarding me with IPOs for junior Gold companies. A bubble in the works?

#61 Andrew on 11.05.10 at 11:59 am

oh well. tomorrow you can tell us about how CREA just downgraded their 2010 forecast for sales to -4.9% from +13.3%

CREA Intial Forecast for 2010 – Sales up 13.3%
CREA Second Forecast for 2010 – Sales up 5.5%
CREA Third Forecast for 2010 – Sales down 1.2%
CREA Fourth Forecast for 2010 – Sales down 4.9%

When they get to their fifth forecast for 2010, I’m guessing it will be more like down 10%. This means their forecast will only have been off by about 23%! and in the wrong direction too!

#62 R1200C on 11.05.10 at 12:11 pm

Minister Clement saw his shadow on Wednesday: we will now get four more weeks of Potash.

#63 Marty on 11.05.10 at 12:16 pm

Garth, tell your techies to setup a mirror site. This way if one goes down you just change the A record and redirect you site traffic to your mirror.

“How so many people are being suckered into filling their basements with boxes of useless silver. How the wealth effect of soaring assets could lead”

I think you said that comment about silver because you knew you’d get lots of flack :)

Conversely the risk with this fiat money printing is that so many people are increasing the number of bank notes they are holding with faith that they will keep their value.

The government cannot print jobs or wealth, period.

I personally don’t mind what people do with their bank notes, but telling anyone to keep only cash is bad advice.

I’m getting rid of my bank notes as there are many greaterfools willing to exchange printed paper for highly refined precious metals that come from thousands of man hours of labor that have an ever increasing replacement cost.

TIP: Buy a small safe at costco, put a few thousand ounces of whatever you want in there and forget about it. No matter how ridiculous government policy gets you have your insurance policy.

#64 PLP on 11.05.10 at 12:18 pm

Simple:
……….screw the little guy…!

#65 Joe on 11.05.10 at 12:20 pm

Vancouver houses break the $1 million mark again!

Sales & prices are up, and listings are down.

http://www.yattermatters.com/2010/11/rebgv-detached-the-last-lap/

#66 dark sad person on 11.05.10 at 12:23 pm

#29 somecatchphrase on 11.05.10 at 9:11 am

Many observers expect QE to go on to infinity. I wouldn’t be so sure.

****************

Yes-QE has a limit-especially when facts enter the picture-
We can see 1 day after the expectations of free flowing liquidity in the future-
Markets/Commodities and Precious Metals soared on the announcement-
But here’s the problem-
These rising prices cannot be met by cash strapped consumers-it’s impossible-
I know us sheep are the least of the Sociopaths (Government/Bankers) concerns-but they need us-more than we need them-
Who will eat the corn-who will buy the bread-who will buy anything?
If people cannot afford the prices-who will consume the goods?
There is a limit to this-
People either get the means to purchase at these prices-ie: jobs with the means to obtain (credit or cash) or the price levels hit a ceiling and whoever the last buyer was with the free Government money to speculate with (GS et al) will end up being the biggest bagholders in history-when the prices eventually collapse as they must-
You can only store so much Oil or Wheat or any consumable–
Consumers consume and must have the means to purchase (jobs) and if they do not have the ability to purchase-it’s only a small step from there-to simply “taking” what they need to survive-

QE will meet its end somewhere ahead of us-
Already pressure is coming from within–

QE creates uncertainty-
Uncertainty leads to a loss of faith–
Faith-is all this whole Ponzi is based on-

*********************

Fed Governor Richard Fisher

The intrepid theoretical economist would argue in the affirmative, the logic being that there is a tipping point at which the market becomes convinced that money held in reserve earning negligible returns is at risk of being debased through some inflation and, thus, should be spent rather than hoarded. Hence, the appeal of the Fed’s showing a little leg of inflationary permissiveness, as suggested in the recent declarations of some of my colleagues.

There is some sound theory behind these arguments. Yet, my soundings among those who actually do the work of creating sustainable jobs and making productive capital investments―private businesses big and small―indicate that few are willing to commit to expanding U.S. payrolls or to undertaking significant commitments to expand capital expenditures in the U.S. other than in areas that enhance productivity of the current workforce. Without exception, all the business leaders I interview cite non-monetary factors―fiscal policy and regulatory constraints or, worse, uncertainty going forward―and better opportunities for earning a return on investment elsewhere as inhibiting their willingness to commit to expansion in the U.S. As the CEO of one medium-sized business put it to me shortly before the last FOMC, “Part of it is uncertainty:

http://www.dallasfed.org/news/speeches/fisher/2010/fs101007.cfm

#67 TS on 11.05.10 at 12:36 pm

OMG!!!! Even the shills at CREA are starting to recognize reality…at least a little bit…see the attached link….

http://news.sympatico.cbc.ca/home/realtors_cut_home_sales_forecast/93c29934

#68 Jeannie on 11.05.10 at 12:37 pm

There’s something going on in the wide web world, Garth’s site is not the only site that I’ve been unable to find.
Sites that have always been available to us are now inaccessible…temporarily I hope.
It’s mysterious to be sure, maybe something to do with the weather and satellites?
I can understand some paranoia, but there might be a logical explanation.

#69 super dave on 11.05.10 at 12:37 pm

TSX hit 13,000 today, WIN is up X5, UUU climbing like a rocket, Nortel… still bankrupt…

Too much, too fast, in a crappy economy, that is destined to falter, once our dollar hits parity and more, nothing will head south as far as exports.

Start balancing your investments… A big dump is heading our way within 6 months… maybe…

And what kills me, is Bonds and Equitys going up at the same time? I don’t get this? I thought they moved in oppposites…?

#70 TS on 11.05.10 at 12:47 pm

For folks who would like a good explanation of what quantitative easing is the following link may be worth viewing:

http://vimeo.com/2606496

The first round of QE in the USA did almost nothing for the US economy and it is doubtful that this latest round will do anything either. Unfortunately for Obama with the loss of control of the Congress he has no ability to initiate any kind of real economic plan other than the Republican mantra of ‘cut taxes and spending and eliminate controls on business’…makes one wonder how the h*** the US will ever get its deficit under control.

Interesting that gold is rising strongly…this has more to do with a LACK of confidence in the US dollar and US economy than anything else. Latest data indicates that mutual fund managers have almost no cash and their funds are almost fully invested. Based on history this is a VERY BAD sign for the economy…in the past when this has happened the economy and stock markets have tanked.

QE has the effect of fueling the ‘carry trade’….i.e. selling a currency with a low level of return (i.e. gov bonds) to buy a currency with a higher level of return.

http://www.investopedia.com/terms/c/currencycarrytrade.asp

All that the QE strategy will do is fund capital flowing to areas like India where the bond rates are much higher.

The US owes so much money that it is desperately trying to devalue its currency…effectively cutting its obligations to other countries…and desperately trying to make its exports more cost effective.

Watch for gold to continue to rise and a sharp sell off in stocks in 2011 once investors realize that the US economy is really in the tank after all US stimulus money is stripped out.

#71 Soylent Green is People on 11.05.10 at 12:50 pm

To the person up there who’s bought the NeoCon myth that Conservatives are good money managers:

If Stephen Harper’s an economist, I’m the Queen of Sheba

The ammunition to bury the Conservatives is overwhelming. Yet a majority of Canadians still don’t see it.

Maybe they’ve sensibly tuned out the cynicizing political spectacle that Ottawa presents. Maybe they’re just not fully aware of the Conservative record.

The slam dunk case that the Conservatives have no credibility and have forfeited the right to be trusted by Canadians has, obviously, not been made.

But surely the government is most vulnerable in the area that, with awe-inspiring chutzpah, they tout as their greatest asset – economic management.

Amazingly enough, they want this to be the ballot question. The Conservative spin begins with The Big Joke that the Prime Minister is a “trained economist,” a myth repeated by lazy reporters.

This bit of folklore is at the heart of the government’s case for its credibility. Can they get away with it?
http://www.theglobeandmail.com/news/politics/if-stephen-harpers-an-economist-im-the-queen-of-sheba/article1769401/

The Tories may be newly vulnerable on the fiscal file, as Finance Minister Jim Flaherty announced last week that the 2009-10 deficit was $55.6-billion – the largest in history and $1.8-billion over forecast.

http://www.theglobeandmail.com/news/politics/liberals-aim-to-scoop-tories-deficit-busting-message/article1762749/

#72 Soylent Green is People on 11.05.10 at 12:52 pm

Published Tuesday, Nov. 02, 2010

Finance Minister Jim Flaherty recently vowed to balance the budget within five years. Don’t bet on it, says Parliamentary Budget Officer Kevin Page.

Mr. Page said he will be updating his previously stated concern about a structural deficit, warning Ottawa and the provinces that the current 6-per-cent annual increases in federal health transfers to the provinces is simply not sustainable for the long term.

http://www.theglobeandmail.com/news/politics/tory-deficit-targets-are-too-optimistic-budget-officer-says/article1783203/

#73 dark sad person on 11.05.10 at 12:59 pm

#49 Moneta on 11.05.10 at 11:06 am

2. The US will print and this will force Canada to print. This will create inflation. We’re a mature ageing economy full of debt for crying out loud.

******************

Very good–
Only one glitch-imo-

********************
2. The US will print and this will force Canada to print. This will create inflation. We’re a mature ageing economy full of debt for crying out loud.

**********

Keep in mind-the amount of debt-levered above collateral-is much larger than any amount of printing-
As collateral values fall below the amount of debt that’s leveraged to it-creating Inflationary results-is dead in the water-
Speculative money moves into commodities and drives prices-no question and we see this happening today-but then the question of consumer affordability comes to the forefront-
“This” is where Governments will find out that they are powerless against the real Market and when it decides to make its move and will trample “all” who stand in its way-
Bernanke/Carney/Presidents/Prime Ministers-are such tiny frail gray faced old men that Mr Market has never heard of and could care less about-
The People-are all that it cares about and it wants to help them by bringing them lower prices and it will have its way eventually-
The Market never loses-ever-

#74 dd on 11.05.10 at 1:02 pm

…US central bank says it will create money…useless silver…

You really have no clue what you are talking about. Please, stay focused on real estate.

#75 Steven Rowlandson on 11.05.10 at 1:03 pm

Far better to have useless gold and silver than to have a portfolio full of stocks that are worthless or could be shorted untill they are worthless. Far better than bonds that can be defaulted on or inflated away.
And far better than real estate that one can not afford.

Blessed be the gold and silver bugs. Amen.

Steven

#76 Hiteclowtec on 11.05.10 at 1:12 pm

Looks like there are some serious DNS problems all over the web. My sympatico dns server is giving me the (try again blues) since I signed up with them. Windows XP is history because of an unstoppable rootkit trogan which they say will soon attack vista as well.

web war has joined the currency war , Gerald Celente says the US will soon launch the war on everything and everybody.

#77 dark sad person on 11.05.10 at 1:16 pm

USD and Gold trading together-competing as currencies-
Have to ask the Hyper-inflationists-how this can be happening?

Affordability–keep that word in mind going forward when thinking about rising prices and Inflation-
Lack of affordability is intensifying-not easing–

**************

A huge number of American households are still relying on government assistance to buy food as the recession continues to batter families.

Bloomberg News
More Americans are using government assistance to buy food.

Food stamp recipients ticked up in August, children consumed millions of free lunches and nearly five million low-income mothers tapped into a government nutrition program for women and young children.

Some 42,389,619 Americans received food stamps in August, a 17% rise from the same time a year ago, according to the U.S. Department of Agriculture, which tracks the data.

http://blogs.wsj.com/economics/2010/11/04/some-14-of-us-uses-food-stamps/

http://www.fns.usda.gov/pd/29SNAPcurrPP.htm

#78 Nostradamus Le Mad Vlad on 11.05.10 at 1:18 pm


Morning all from the Frozenagan. Exc. comments today, including . . .

#1 Dan in Victoria — “Been a weird week Garth, a lot of the sites I visit are going crazy.”

#6 HouseBuster — “Wait until oil hits $150 and stays there. Then we’ll see some real fireworks.”

#10 Crash Callaway — “. . . from patience to anger to outrage over the whole stinking mess.” — Above all, don’t let the emotions take centre stage. Drop back ten yards and punt, let it go in one ear and out the other.

If one lets their emotions run and control their lives, they cannot think or see clearly. None of us has any control over outside forces, so don’t fight it.

#13 DiGiacomo — Very good possibility.

#23 Devore — “Where exactly is our big brother headed to?” — AND — #24 David B — “. . . bad news there are rocks there. “BIG ROCKS”.

See quote from hph.com and Mike The Engineer further down.

#25 AM at LHR — “The conspiracy crowd appear to take on a little more credibility it seems”

It won’t be a conspiracy any more when sheeple finally realize the mess we are all in. That’s the difference between reality and conspiracy theories!

No, it almost certainly wasn’t Realtors. Try Harper’s paid minions, none of whom we know of.

#26 MikeT — “. . . a PRIVATE bank (the Fed) buying US GOVERNMENT bonds (issued by the Treasury) with the money that it creates with a couple of computer keystrokes aka from thin air.”

With one other keystroke — the delete button — all that electronic money can vanish in a second.

#29 somecatchphrase — “. . . a stock and commodity price collapse, along with rising interest rates. This could all potentially happen within the next year.”

Good timeline!

#35 Debt’s Dark Embrace — “Market fundamentals do not matter anymore . . .”

Correct! A bunch of numbers with a plus or minus sign.

#42 Got A Watch — “We are just the lab rats stuck in the maze.” — And the less we know, the happier TPTB are, as they are milking us dry.

#48 BrianT — “Don’t cry for me Argentina.” — No crying, but at some point we’re going to head down the same road they did not too long ago.

Don’t forget, hyperinflation is politically motivated to cause wars based on greed. Not fiscally caused.

#49 Moneta — “1. Write off bad debt and bad assets”

One sure way to mess up world’s economies, and possibly that’s one reason why China is switching its US$ debt holdings to buy hard, tangible assets. Next Jan. or Feb., see if a Chinese co. offers to buy Potash Corp. at an inflated price.

#59 Apsalar — “Things must be bad. CREA is caving:” — Timing is just about spot on.
*
From a combination of halfpasthuman.com and Mike The Engineer, who put this together nicely, a theoretical possibility.

This hasn’t happened — YET — but look beyond what the M$m gives. All possibilities are already in existence.

“Steven Quayle states that there may be bank holiday Nov 11.

“Pres O and 65 airplanes and 34 warships and 3000 ‘friends’ leave for overseas trip.

“Something big is about to happen.

“I went and purchased a new Coleman cook stove last night from Crappy tire. The one that runs on ‘camp fuel’ not propane. Once the shit starts, might be good to have something few people still use. Can’t use propane in -20 weather.

“Picked up an extra jug of oil lamp fuel tool. Along with some last minute items.

“Fill up your car and gas cans asap and propane too.”

Just our two cents worth!

#79 RationalNational on 11.05.10 at 1:22 pm

Hrm, trip down memory lane anyone? May 2009 to be exact?

#12 rationalnational on 05.28.09 at 12:08 am
Folks, interest rates are a function of the bond market.

Changes in bond prices have an inverse effect on interest rates. Bonds down, rates higher. Bonds up, rates lower.

Bond prices are subject to supply and demand. Demand goes up, supply goes down, prices go up, interest rates go down. Or, inversely, Demand goes down, supply goes up, prices go down, rates go up.

Supply lately has been quite large in the US. Of course, our little deficit problem is large too, and the governments are all selling bonds to raise money for their deficit spending.

Now, this is a global crisis, so other countries are doing this too. Like, the UK for example – who recently experienced some difficulty in a bond (gilt) auction.

Now, since everyone is trying to sell debt, and NOBODY wants interest rates to go up because we need all these serfs to keep paying their mortgages, something must give.

Another incentive is to keep asset prices high enough to motivate the serfs to continue paying their mortgages. Gee, with so much wealth being destroyed, and with the percentages of folks close to, or already under water, not to mention all the other sectors to oft mentioned, what to do?

To keep interest rates low, you have to create demand for bonds. Central banks are doing this now by printing money and buying bonds all along the curve (7-10-20 year bonds). This is AKA quantitative easing and the prime purpose of “QE” is to reduce interest rates. But something must give.

As China has been saying, they don’t like the US going down the QE path because it devalues currency. It is the government version of taking on debt, and because currencies are fiat, they are basically a promise that the government stands behind the currency. Because the balance sheet of the country takes on debt, it dilutes the common shares (dollars!) of that country.

Devaluing currency devalues all debt denominated in that currency.

This is a debt crisis. It is systemic. There is not enough money anywhere to pay for the obligations these governments are taking on. Deflation is the devil, and it will be defeated.

By purchasing bonds with printed money, the central banks are creating a false market. Investors don’t like false markets. This will reduce foreign demand from creditor nations and cause more QE to be applied. This is inevitable, and it may not proceed in an “orderly” fashion.

This may lead to a currency crisis. And that’s exactly what the end game will be. Devaluing debt by reducing the real value of money is a systemic solution to a systemic problem. Interest rates will not rise – they will be kept down in order to force currency values down, decreasing the real value of debt, and increasing GDP across all sectors.

Garth, if the powers that be played by a traditional rule book, deflation – in nominal terms – would win. These are not normal times, and the rules are out the window. Deflation does not have a chance against the power of the printing press if those who control it are willing to do whatever they must to defeat the “d”.

Best of luck to all.

#80 Fish Bait on 11.05.10 at 1:24 pm

What’s the point of you give us a blow by blow account of being a real estate agent? Why tell us how sorry you are regarding your previous thoughts about them?
Most sales people are viewed in a poor light.

If you’ve in fact been in sales all your life, then it wouldn’t be a suprise to you what sort of tasks are involved as a real estate agent. Sales agents are sales agents. Writers are writers. The general set of tasks is very similar in either case. Based on how you write and your knowledge of business, I doubt you’re neither.

Your referencing Herb Talek also sounds suspect. Why reference a goof ball if you really are in the sales department? Would a legitimate writer compare himself to Madonna because the whore wrote a children’s book? A real writer, one that was committed to being good would reference someone they want to be like. No sales agent would want to be like Herb.

So yes, you’re trying to pretend that you’re a sales agent and a writer. One more thing…you just started and you got your first sale, in your first month no less?!?!
The odds of a that happening are very slim. In business of any sort there is something called “start up.” A guy doesn’t just open his doors and expect to get sales the first month or maybe the first couple.

So yes…you’re either very stupid or full of crap, which is it? Unless you’re idea of doing sales all your life is retail, you’ve not been doing sales or running a business of any sort all your life.

#81 Fish Bait on 11.05.10 at 1:25 pm

Previous entry meant for Keith in Calgary

#82 BrianT on 11.05.10 at 1:29 pm

#64Tom-if you think a more valuable RMB will magically create manufacturing jobs in NA you do not understand the numbers on this one.

#83 craline on 11.05.10 at 1:30 pm

Go and see before it disappears, a gem….

http://www.huffingtonpost.com/2010/11/05/wall-street-bonus-taiwan-animation_n_779554.html

#84 Daniel on 11.05.10 at 1:32 pm

Silver

I’m definitely not a silver, or gold nut, but I’ve been following them for some time.

I started buying silver when it was $4.50 an oz (when Buffet actual used his option to purchase on the exchange (about 10 million oz. I think – the exchange almost couldn’t fill the order from what I remember).

Anyway, silver has gone from $4 – $26 in 10 years and $10 – $26 in 2 years. Garth might be right about the future, that Silver and Gold are in a bubble and no longer relevant in our current economic system. If so, they’ll go down – perhaps to $500 an oz again, or lower.

Or, the fact that they have been money for thousands of years could win and people could view them as money again (or at least an exchange for money) – if they do, they’ll just keep going up.

Also, gold and the dow jones typically are the same price at some point … stocks are coming down and gold is going up, they’ll probably meet somewhere around $5000 per oz (maybe in 2 years, maybe in 10).

Dan.

#85 dd on 11.05.10 at 1:39 pm

Garth,

…US central bank says it will create money to buy its own bonds (it’s called ‘quantitative easing … stock market shoots up 200 points, commodity prices go nuts..

Two months ago you said that the government doesn’t “print money.” Now it is front page of the globe. NOW you say they do. So what is it?

Two weeks ago you said that QE has zero effect on stocks and commodity prices. This week they do. So what is it?

Yesterday you said there is no inflation and the US dollar will not go down much. But I say look at the effects of inflation – commodity prices & FED policy. Tomorrow it will be in the Globe and THEN you will say there is inflation vsv devaluation of the US$.

Deflation will be the end game. Inflation is the game today and tomorrow as per Fed policy. Don’t get ahead of yourself.

Actually you have it reversed. Do not be deceived by a few days. Surely you are smarter than the stock market. — Garth

#86 Thetruth on 11.05.10 at 1:46 pm

In about 2 years time, bank of Canada will either have to

(i) keep interest rates low and in the process have a 60 cent dollar (US) while US rates rise

(ii) increase rates and really decimate the economy

Is it Possible that low rates and increase in commodity prices (gas, food, etc.) because of our low dollar will balance each other out??

#87 Wilson on 11.05.10 at 2:04 pm

This are certainly getting ugly out there. Mortgage arrears/foreclosure rates continue to climb out West.

http://edmontonhousingbust.com/2010/11/arrears-jump-again/

Alberta has by far the highest in the country, and B.C. is apparently following the trail they blazed. I wonder about the rest of the country, since the bubbles played out earlier there then in the East.

#88 Jacques on 11.05.10 at 2:06 pm

As with all fiat bugs, they are assuming there is a free market for gold, but there is not. It is suppressed by the US government and big Wall Street banks. It was a free market up until it hit the $800 mark in 1980, then the bullion banks resumed their suppression activities to bring it back down. Now they are losing control of it because they use naked shorts and they have run out of silver and will soon run out of gold to supply the physical buyers.

#89 bigrider on 11.05.10 at 2:15 pm

#66 McSteve Junior gold companies a bubble in the works ”

Maybe in the works but much, much further to go.

#90 Moneta on 11.05.10 at 2:30 pm

This” is where Governments will find out that they are powerless against the real Market and when it decides to make its move and will trample “all” who stand in its way-
Bernanke/Carney/Presidents/Prime Ministers-are such tiny frail gray faced old men that Mr Market has never heard of and could care less about-
———
No matter what happens, we’re losing purchasing power.

With deflation, those with big houses and big debts will suffer.

With inflation, those with big houses and big debts will suffer.

Why the same? We have so much debt that we need to generate income in the future to pay it off. So either we write it off or we work to pay iot off. Who will need to make us work? Emerging markets because they’re the ones with the reserves. And if they keep on growing, they will eat up our resources. And if they eat up our resources our McMansions are going to cost us a fortune to maintain.

And if we plan on not paying back our debts, we’ll be put in time out.

Pick your poison: writing off or printing. It think government will print, then stop and take away entitlements. Then it will print a little more, then take away more entitlements. Fits and starts for a decade, that’s what I see.

#91 Moneta on 11.05.10 at 2:40 pm

Who will need to make us work? Emerging markets because they’re the ones with the reserves
———-
And I’m not counting on the US to be our savior. Once the Fed picks up all the bad mortgage debt, American households will have cleaned up their balance sheets. Some will buy back their homes at half price with 30 year locked in low rates and others will be stuck renting. The Fed won’t need QEs anymore and will let the rates increase just in time for Canadians to renegotiate all their jumbo mortgage loans.

And the Americans, having lost a good chunk of their purchasing power will be importing less and rebuilding their industries. In the first few years of investment, you don’t get much returns… you are spending with no revenues. That is inflationary. Not a good scenario for Canada.

#92 Two-thirds on 11.05.10 at 2:41 pm

@ #64 Tom from Mississauga

“QE2 is about creating high inflation in China. Big Ben will unpeg the RMB if the G20 can’t. It’s not until that happens that manufacturing jobs, jobs that are needed for real recovery to happen will return.
Tom”

Interesting thought. This is the first time I’ve heard of this angle to QE2.

Could you elaborate on the mechanics of your point? How will this be accomplished? Is it through the carry trade?

#93 Moneta on 11.05.10 at 2:54 pm

Two-thirds on 11.05.10 at 2:41 pm
———-
When a country pegs its currency to another currency, it must print every time the other one prints. That creates inflation inside the country and they end up exporting it. There is a lag.

If China let its currency float, its products would automatically become more expensive.

China does not want to increase its currency because it knows very well that if its products become instantly more expensive, the US would quickly look to import from cheaper places and quickly be stuck with idle capacity.

Of course it’s always more complicated that this, but it’s a quick explanation.

#94 DiGiacomo on 11.05.10 at 3:01 pm

as per my last post, for those worried about internet kill switches, etc.

It always helps to have the direct IP addresses of sites that could be important to you in a crisis listed down.

This way if DNS servers go wonky (I believe this is what Garth is referring to in this post) during a crisis, one can still access banking / weather / survival tips / etc .

DNS servers aren’t what is behind the “internet kill switch” mentioned in the news lately, however they’re widely acknowledged to be the weakest chain in the internet.

The direct ip of a server can be found:
http://domainsbyip.com/
http://www.domaintools.com/reverse-ip/

if anyone knows a list of “important” ip’s of sites can be found, I’d love to see it

#95 Kitchener1 on 11.05.10 at 3:13 pm

Nice to see you back online.

FUn day yesterday was, with a crazy rally in all markets.

USD broke support levels and oil breached the upside support as well, crazy scary in terms of the trading world. USD has since regainged its posistion just above the 75 trendline and is being defended. Oil has yet to bounce of highs and looks parabolic to me. It will hit $100 ballpark very very soon, possibly even before Christmas.

Forgot gold and silver, look at cotton/corn/soy/oil etc.. these are products that are consumed every day of the year.

The thing that scares me the most is the move in oil. It will be catastrophic to the economy if it breaches $100/barrel, if it hits $140 again, then we are toast.

BoC has no more bullets left, no more stimulus in Canada to spend, cant bring rates lower and if they are forced to raise rates to combat price inflation, then we are truly screwed. In terms of RE- 2 basis point increase will = a min 40% drop in price.

Here is some perspective for your own lives.
approx every dollar increase in oil = .1 cent increase in gas.

so: for GTA
$88/barrel = $1.07
$100/barrel = $1.19
$110 = 1.29
$120= 1.39
$130= 1.49
$150= 1.59

Add in a CAN/USD at 1.05-1.10 and our exports are finished. And eventually with all this QE2, and QE3 (its coming too) the dollar will be at 1.25 USD.

#96 market watcher on 11.05.10 at 3:24 pm

I couldn’t get on the site last night either…

CBC – Realtors cut home sales forecast:

http://www.cbc.ca/money/story/2010/11/05/crea-housing-market-forecast.html#socialcomments

#97 Hell in a Hand Basket on 11.05.10 at 3:29 pm

Are we surprised that teh Fed is engaged in another round of QE? Is the receission over yet? No.

Are we surprised that Gordon Campbell stepped down? Did he accomplish his masters bidding with the HST? Yes.

We don’t need more politicians, who lie as easily as they breathe. We need people who tell it like it is. We need people like Garth! We need people like Jamie Scott of the Truth Party.

When are you going to run for office again Garth?

#98 The Original Dave on 11.05.10 at 3:49 pm

So I ask myself, if I know that inflation is always and everywhere a monetary phenomena, then why ha all this QE not caused inflation? I find my answer in my ol Econ textbooks, because inflation is a product of the quantity of money supply times the velocity of money. So recently we have had a flood of new money, but it isn’t moving fast, it is being hoarded. I don’t see deflation as the biggest threat. As soon as all the various entities hoarding cash get a whiff of inflation they will move out of cash and bonds quickly. I think the velocity of money has the capacity to spike very quickly. Am I missing something?

———————————————–

Yes, like tons of people, you are missing something. Credit. With credit expansion comes “money velocity” but with a contraction in credit, there’s less money and much less velocity. This counters the expansion in printed money.

I swear, I feel like getting a t shirt printed with the above. Too many people have this same misconception. Too many people forget about the roll of credit in rising and falling prices.

#99 Live within your means on 11.05.10 at 3:56 pm

#48 BrianT on 11.05.10 at 11:04 am
#42Got-Yes-at this point, you could have extremely high actual cost of living increases in the US with very low official inflation numbers. Don’t cry for me Argentina.

…………

Don’t cry for me Argentina. Couldn’t help but say that song is my all time favourite.

#100 dark sad person on 11.05.10 at 3:56 pm

#95 Moneta on 11.05.10 at 2:30 pm

No matter what happens, we’re losing purchasing power.

******************
Like your posts-but lets get something clear-
Purchasing power/Buying power-are in a sense 2 different things-

Purchasing power is related to employment or balance sheet condition-

Buying power is a monetary/currency phenomena-as in-what will your $ buy you-

In some things we are losing buying power-in some things we’re gaining-
House prices going down-
Food and taxes going up-

************

With deflation, those with big houses and big debts will suffer.

****************
Yes
**************

With inflation, those with big houses and big debts will suffer.
************
If we have Inflation (in the economy) those with houses and debts-will actually “improve” their personal balance sheets-as Inflation will drive house prices up–
Doesn’t mean that the debtors will ever become whole or anything-only that it will be an improvement “for them” from today’s conditions–

But the big problem for all of us is-future employment and falling wages-
These are extremely Deflationary conditions as purchasing power (not buying power) decreases on an international scale-
For the US-or any Country to start building or rebuilding Industry-there must be a demand and what we have instead-is an oversupply of almost everything and it must be depleted before demand out weighs supply-
In order for inventory to deplete-there must be buyers and the “prices” have to meet-buyer demand-
If unemployment stays high and the economy stays weak (i see nothing to reverse it) then demand will slacken because of affordability and prices will have to follow-
Oil and Food are always wild cards–

also-imo-don’t bet on emerging economy’s to turn this thing around-

#101 no flu on 11.05.10 at 4:11 pm

Yeah, velocity is down but it’s rising again.

Yields reacted to QE2 by rising! Metals reacted by rising faster than stocks.

It seems like the market voted against QE2

http://www.planbeconomics.com/2010/11/04/3-early-indications-the-market-view-qe2-as-inflationary/

#102 rower on 11.05.10 at 4:16 pm

Every single forum and blog that I read each day has gone down this week.

ALL of them tell the truth about what is happening with the economy, real estate, military, etc.

Coincidence? I don’t think so.

Glad you are back, Garth.

#103 Fiendish Thingy on 11.05.10 at 4:17 pm

@#24 Devore

Meanwhile, 2009 marked the first year when total federal receipts just about exactly matched mandatory spending (social security, medicare, medicaid, etc), leaving everything else to deficit financing (like, you know, running the country, paying for Obama’s vacations). 100% of everything that came in was already spent. And it’s not gonna get any better.

Big Brother wasn’t born on Jan. 20, 2009…

You forgot to mention the deficit spending required for two wars, illegal wiretaps, bailouts for predatory banks, lenders and Wall St., tax cuts for millionaires, etc.

Obama would have to take the next two years off to even get close to Bush43’s record setting vacations.

I do agree with you it’s not going to get any better, while both parties twiddle their thumbs while flipping each other the bird.

#104 Kevin on 11.05.10 at 4:17 pm

CREA revises their housing outlook for 2010 again
“And housing activity is now over 20% of Canada’s economy according to CMHC.
Now think about what this means to housing and our economy if sales revert to levels not seen in over a decade.”

http://saskatoonhousingbubble.blogspot.com/2010/11/crea-revises-their-housing-outlook-for.html

#105 Another Albertan on 11.05.10 at 4:47 pm

#99:

Maybe 10 or 12 years ago that approach would have been helpful.

Any major site these days is hidden behind load balancers and content distribution networks. On top of that, web servers handle multiple named sites hosted on a single IP.

In 2010, trying to retrieve content from many web servers using only an IP address isn’t going to that fruitful of an exercise.

Everyone else’s mileage may vary.

#106 somecatchphrase on 11.05.10 at 4:48 pm

#72 Dark Sad Person

“These rising prices cannot be met by cash strapped consumers-it’s impossible”
__________________

That’s the nub of the problem.

We have input cost inflation at a time when companies find it extremely difficult to raise prices. There has already been a spate of recent articles documenting how this is already showing up in the latest corporate reporting period. (Q3 2010) Kraft foods (KFT) is one example that I can recall.

“Shrinkage” seems to be the preferred method of dealing with this dilemma so far – the package gets smaller, but the price doesn’t.

Ultimately, cost-push inflation will have a negative effect on corporate earnings, which will, in turn, have a negative effect on stock market indexes and employment levels.

If this trend keeps up, you’ll have mainstream corporate leaders going on mainstream TV denouncing Bernanke’s QE program. Bernanke will be roasted on mainstream TV with a degree of vigour and venom that you currently only find on the fringes of the blogosphere.

The market doesn’t seem to care about high unemployment. The market will care when CEO’s start going on CNN/CNBC/BNN to blame their declining earnings on rising input costs which are a direct result of Bernanke’s QE. (Actually, by the time this happens, markets will probably have already fallen substantially.)

The glimmer of hope is that QE is something that will eventually correct itself, and, austerity will be forced up on us, both individually and collectively. Excessive QE sows the seeds of it’s own demise. Market forces will reign in the Bernanke’s and Krugman’s of the world.

#107 Live within your means on 11.05.10 at 4:50 pm

#53 Dorf on 11.05.10 at 11:12 am
#38 Live within your means

Deep Freeze – a very good product, especially for PCs that are publicly available, such as schools, libraries, kiosks, labs, etc. It’s not very necessary for work PCs where the same person is using the same machine all the time, though.
………………..

Mostly agree – but for some, like a bro, who goes on some questionable websites, it’s been a life saver. Also, some school admin staff are not as security wise as they should be.

#108 jess on 11.05.10 at 4:53 pm

Back in Feb 2008
Olivia Chung is a senior Asia Times Online reporter.
HONG KONG – China’s foreign exchange regulators, after smashing more than 30 underground banks with 10 billion yuan in illegal funds last year, have pledged tighter supervision and management of cross-border capital flows. …
http://www.atimes.com/atimes/China_Business/JB28Cb01.html

============================
cross-border flow of illegal money.
shadow financial system comprising tax havens, secrecy jurisdictions, disguised corporations, anonymous trust accounts, fake foundations, trade mis-pricing and money laundering techniques.”

http://www.gfip.org/storage/gfip/documents/executive%20-%20final%20version%2005-14-09.pdf

#109 Live within your means on 11.05.10 at 4:54 pm

.#61 Ottawa S. on 11.05.10 at 11:37 am
The Good Wife is currently my favourite show on TV.
………………..

Are you being facetious? Have never heard of that show.

#110 Derrick Moore on 11.05.10 at 5:01 pm

Garth, love your iconoclasm on Canadian real estate, but wish you had a bit more of it for the big economic picture. The USD dollar is going to keep being devalued (now QE2, later QE3/4/5 etc). But ask not for whom the bell tolls, because if anyone thinks the C$ is going to be allowed to hit $1.25 US or more then I’ve got a nice desert lot with cactus and rattlesnakes for sale on west Vanc Is. Consider checking out http://www.zerohedge.com for similar irreverence to your own, and mock gold bugs a little less. The C$ will be devalued in lockstep to the greenback…

Do not make the common mistake of assuming what is likely to happen over the coming months bears any relationship to events of 2012 and beyond. — Garth

#111 Ben on 11.05.10 at 5:04 pm

All the Greater Fool junkies couldn’t get their fix. lol

#112 Hiteclowtec on 11.05.10 at 5:08 pm

#99 DiGiacomo

Its not that simple like everyone having their own phone number, which are also running out. This is why we have to dial 10 numbers when we used to dial 7.

There are not enough IP addresses for all the sites and blogs on the web . Most IP`s are dynamically assigned via DHCP (dynamic host control protocol) in the routers.
So in effect you have many sites sharing the same IP. Even if you have the IP number you will not connect via Http:// if the servers are hacked or shutdown.

Like I said earlier my Bell sympatico can barely find anything even when the system is 100% up and running, too much traffic like the 401.

Propeller head -over and out.

#113 JC on 11.05.10 at 5:29 pm

To offer up a less than rosy picture of the times to come will naturally invite attacks to one’s character and mode of communicating his/her message.

“It ain’t easy bein’ sleazy”

#114 Moneta on 11.05.10 at 5:34 pm

With inflation, those with big houses and big debts will suffer.
************
If we have Inflation (in the economy) those with houses and debts-will actually “improve” their personal balance sheets-as Inflation will drive house prices up–
———–
Not necessarily.

First of all, with inflation, we’ll be finding out the true cost of McMansion ownership. Go to TMR and Westmount… many houses built 50+ years ago still have the original windows. McMansions built in the mid 90s are already in need of window replacement. The entropy in the system is huge. Energy and commodity requirements are going to be huge in the coming decades to maintain what we’ve built up. And I’m not saying that old homes are a better bet! CMHC reports do talk about the state of the housing stock and it’s in disrepair. The amount of people who do nothing to their houses for 20 years is amazing.

Secondly, when inflation takes off it usally catches everyone off guard. Businesses have trouble pricing it in and margins contract. People will lose their jobs and won’t be able to make their mortgage payments. House prices will decline for a few years before inflation starts to be reflected in real estate values.

As businesses adapt to the new reality, the economy will recover and house prices will start to reflect inflation. But go back to the first point. If maintaining a home becomes more expensive and house prices decline, homeowners won’t put one dime more than they have to into their depreciating asset. Finally, we know that a large % of boomers still have a mortgage or have increased it in the last decade instead of paying it off. When inflation hits, they’ll be the most affected and if they don’t plan on living in their homes for the long term, they won’t maintain the place.

A lot of damage could happen in real estate before inflation gets reflected in the price.

#115 Fiendish Thingy on 11.05.10 at 5:36 pm

@#49 Moneta

Anyone who manages their own household finances knows you can’t go on spending way beyond your income forever. Only leftists seem to believe that myth. That’s why they never discuss where “tax dollars” come from, except to call for higher taxes on “business”. Like businesses exist in a parallel universe, where they can just happily pay ever higher taxes forever with no repercussions.

Many businesses do exist in parallel universes- it’s called offshoring, where they pay no taxes back to the nations they make their profits in, and where CEO’s make on average 400 times more than their lowest paid worker, where it was once 40 times.

I say tax corporations at the top rate during the prosperous 1950’s and 60’s. Oh yeah, and the U.S. should invade and seize the Cayman Islands as their territory to eliminate tax evasion. ;-)

#116 G.P. girl on 11.05.10 at 5:37 pm

#6 Housebuster
We’ll start hitting that infamous wall, just like last time.
3 part video worth the time.
http://www.youtube.com/watch?v=nbHVnC87jOw

#117 Consider This on 11.05.10 at 5:40 pm

Looks like the U.S. is once again in the top 5 countries for best quality of life. Canada wasn’t mentioned. Hmmmmm.

http://news.yahoo.com/s/afp/20101104/hl_afp/unhealthsocial_20101104145621

#118 mid-Ontario on 11.05.10 at 5:48 pm

“How so many people are being suckered into filling their basements with boxes of useless silver. How the wealth effect of soaring assets could lead, ironically, to a deflationary crunch far worse than if central bank diddlers had stayed home watching The Good Wife.”
-Garth

Garth, you must be shell shocked by your web woes. Today, the bloggers made more sense than you.
You are so wrong about silver as you have seen today by so may astute comments,all of which I agree with.

You are so wrong about deflation.
Inflation is the worry, my friend. The extra trillions will eventually be brought out from under the mattresses and circulated…boom,inflation plus!

Just imagine what a $50 million lottery winner who never left town would do in a village of 500 people when he/she started to buy things in town. Prices would go up and fast. Inflation is coming.

As for the Good Wife, have a look #114 “Live within your means”, tis the best show on TV, Tuesday at 10 EST.

#119 S.B. on 11.05.10 at 5:55 pm

This cyber attack bears all the hallmarks of a realtor(r) attack.

The Axis of Evil: VREB, TREB, CREB ;)

#120 conf in T.O on 11.05.10 at 5:55 pm

My friend….
really,…it’s all about debt…

#121 allister on 11.05.10 at 5:58 pm

It’s the politicans that spend, and it the Feds job to make sure the money is there. Its that simple. Its a game where the FED gets blamed.

The FED was not established to help out the little people and has no alliegence to the masses. That has been in full view for the last 3 years. When will people catch on?

(The FED also supplies credit to banks so they can loan money into existance and thats how the little people buy things – it’s credit based economy. There is very little cash circulating.)

The US FED is the lender of last resort for the US government. When they can’t/won’t tax enough, and they can’t issue enough bonds to private organizations, the FED steps in.

The game can go on only until the US $ buckles under its own weight, that is, when no one will accept it for payment because they realized that the FED is the worlds biggest counterfeiter that is destroying the US $. The guessing game is, when will that happen?

When currencies collapse, it ususally happens in a VERY SHORT time frame, like less than a month.

It’s happened hundreds of times in history.

It’s all paper with ink splashed on it – a confidence game.

#122 Devore on 11.05.10 at 6:16 pm

#100 DiGiacomo

if anyone knows a list of “important” ip’s of sites can be found, I’d love to see it

In this day and age(tm), this is unlikely to work to any significant extent. Any even moderately complicated site will make quite frequent use of FQDNs, and also likely to be using names on the back-end too, not just browser-facing. There are crude ways around it client-side (with a hosts file), but that’s not sustainable. This is why we have DNS.

Without DNS, the internet as we know it would cease to exist for 99.99% of the users for 99.99% of the things they use it for.

#123 dd on 11.05.10 at 6:20 pm

#91 dd on 11.05.10 at 1:39 pm

“Actually you have it reversed. Do not be deceived by a few days. Surely you are smarter than the stock market. — Garth”

Actually inflation is now. I know what the paper is saying today … deflation blah blah. Look at the commodity index. Way up. Prices will be pushed to the consumer. It has too.

The Fed has to buy the treasury bonds because no one wants to and there is not enough world wide savings. When the bonds traders finally figure this out there is going to be an mass exit from US dollar. This will cause even more inflation. It is happening today. You want proof? It is called QE!

#124 Paul on 11.05.10 at 6:36 pm

All you dawgs that have problems with their PC…have you ever heard of MAC?

#125 Timing is Everything on 11.05.10 at 8:12 pm

#101 Kitchener1

$1.14.9 for regular gas in Victoria now.

#126 Patz on 11.05.10 at 9:01 pm

#1 Dan in Victoria, “Oh Well, the sun will come up tommrow.”
You wouldn’t say that if you lived in Vancouver.

#127 Screwed in BC on 11.05.10 at 9:02 pm

Well…the meddlers are at it again. This guy Ben whatever should be in a straight jacket.

#128 Tim on 11.05.10 at 9:06 pm

Hi Garth,

This blog has bought an enlightenment to my interest and knowledge of the real estate industry. If possible, I might be able to lend a hand or suggest a few things in regards to your blog set up since that is my day job :)

Tim

#129 Behavioral Finance on 11.05.10 at 9:06 pm

MikeT,

Please explain to us how the Fed is privately owned?

The Federal Reserve System has a structure designed by Congress to give it a broad perspective on the economy and on economic activity in all parts of the nation. It is a federal system, composed basically of a central, governmental agency–the Board of Governors–in Washington, D.C., and twelve regional Federal Reserve Banks, located in major cities throughout the nation. These components share responsibility for supervising and regulating certain financial institutions and activities; for providing banking services to depository institutions and to the federal government; and for ensuring that consumers receive adequate information and fair treatment in their business with the banking system.

#130 Behavioral Finance on 11.05.10 at 9:16 pm

MikeT,

I know there is plenty of conspiracy theories about the Fed, but most of them don’t seem to hold water. Congress has the authority over the Federal Reserve.
Bottom line, most advance economies need a central bank without them the financial system would have a very hard time working as it is. Personally I don’t think QE 2 will do any good for the middle class as 1.7 trillion spend by the Fed already did not help that much. There is just a lot of unwillingness to spend.

http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#4

#131 S on 11.05.10 at 9:25 pm

#115 Live within your means
Are you being facetious? Have never heard of that show.

A quick google search would answer that question! Tuesday nights, 10pm, Global TV. Great show!

#132 babygirl on 11.06.10 at 2:03 pm

Exactly print more money.