Elaine Meinel Supkis
Every time Wall Street falls, the entire government system moves everything possible to re-inflate that particular balloon. The Treasury Sec. is pure Goldman Sachsaphone, blowing away on his instrument. I review the stupid, stupid things Bernanke said last month about trade and the economy. And Bear Sterns hell hound hedge fund has rabies and is being taken out and shot by the bankers. Who are foaming at the mouth themselves.
Bear Stearns Cos.'s attempt to rescue its money-losing hedge funds may falter after creditor Merrill Lynch & Co. decided to seize and sell $800 million of bonds held as collateral for loans to the funds.Merrill Lynch accepted bids for the securities until 4 p.m. New York time today, according to people with knowledge of the offering. JPMorgan Chase & Co. canceled its plans to sell about $400 million of bonds today while creditors negotiate with New York-based Bear Stearns, one person said.
The 10-month-old High-Grade Structured Credit Strategies Enhanced Leverage Fund, run by Bear Stearns senior managing director Ralph Cioffi, has lost about 20 percent this year. The fund and a sister fund called the High-Grade Structured Credit Strategies Fund, which hadn't borrowed as much and was down less, both have faced pressure from creditors. They specialized in mortgage bonds and so-called collateralized debt obligations backed by home-loan bonds and other assets.
In the famous story, 'The Hound of the Baskervilles', Sherlock Holmes and Doctor Watson heard the howl of the hound and ran outside to capture it but were too late to prevent the huge beast from killing. But at least they were trying to stop it, not feed it! The hell hound hedge funds with all those charming or darkly amusing names of death, piracy and destruction or like this latest one, long and obtuse, were not only unleashed by the Treasury Department and the Federal Reserve but also were fed by Congress, the corrupt war criminal President and his gang as well as a bunch of monetarist ideologues and free trade booters as well as nearly everyone with their hands on our economic till put their dirty fists into the national till and now our banks are nearly empty of real money, our trade deficit is through the roof, our debt is a mountain and now people at the bottom of the financial heap are going bankrupt and this simple fact is now moving up the financial chain to reach the criminals who created this mess in the first place and eventually all of them will go bankrupt.
When hedge funds first raised their skull and bones flag, they sounded oh-so mysterious. It certainly took me a while to figure out what they were babbling about and when I did, I began a great hunt of this Baskervillian creature and the more I learned, the more pissed off I got. It was too simple! They took out loans from Japan and other entities who have huge trade surplusses with the USA and they used it to make much higher interest loans here by signing onto these stupid high-interest loans to people with bad credit or eyes too big for the house they were buying and then they resold these bad deals to other people who wanted to make money faster than the rate of inflation which has been roaring along much higher than the Federal Reserve pirates were willing to admit.
They then claimed that if the 'cut up and re-past together' this crazy quilt of ridiculous loans to dead beats who can't pay them back and then resold them...TO EACH OTHER....as if they were high-quality, high-interest bearing certificates of deposit accounts! These stupid things were displayed as superior to 20 year, 20% down, low interest mortgages because they were often hitched to non-fixed rate 30 or 40 year mortgages!
I received a letter in the mail yesterday that offered me fantastic monthly payments if I wanted to put my free property (like hell!) into hock with them---for 40 years! If I outlive that loan, I'd be 95 years old and a dottering fool indeed. I remember when banks didn't offer loans to people after a certain age or they could only get 15 year mortgages because you die. And when that happens, the loan can die too if the property is run down and often, with the elderly, it is run down, so banks avoid this unless they get something big like big interest returns.
But in today's case, a host of crazy loans were given to anyone including prisoners and con artists. And the price of housing was bid up through the roof which is a major cause of inflation of taxes as well as housing and all this is pounding our economy as housing has ceased to be a 'money maker' and is now a 'money eater.' Bear Stearns thought they were all oh-so-clever by having a hedge fund inside their organization. But like all such ventures, they will discover the downside is inescapable.
High-Grade Structured Credit Strategies Enhanced Leverage Fund began with about $600 million. It halted redemptions after investors sought to withdraw $300 million by June 30. The fund borrowed at least $6 billion.The fund had made $11.5 billion of ``bullish'' investments and $4.5 billion of ``bearish'' bets, the Wall Street Journal reported today, citing documents it reviewed. Using borrowed money, or leverage, can magnify a fund's returns if markets move as planned, or increase losses if investments sour.
Why do they call this 'bullish'? I called it foolish and hark, I was right. When I was very young and had no money, I sold my beloved cello and asked a slumlord to give me a loan so I could buy a brownstone. We worked things out and I bought, he got his money in full when I resold it three years later for quadruple the amount I owed...and this, in a bear market! Since he owned the property before me, if I defaulted, he simply would have taken it back and sold it to someone else.
But the money loaned by these hell hounds isn't like that at all. They gave a huge sum of money, in toto, to someone else who skeedaddled with it and used it elsewhere while they got a piece of paper promising huge interst payments until the cows came home or the buyer defaults. Then they are stuck with a house that is loaded with debt! My friend wasn't in that situation since no one got a penny except if I paid and no one owed a penny on the building except for me!
I have set up such situations for others and this is how we sell stuff when lenders dissappear. It is a form of barter and it is hard to get hurt and the pain doesn't spread. But the hedge funds not only funneled actual money out of their own pockets, they got this in the first place by BORROWING IT THEMSELVES! So instead of performing like the Federal Reserve and Treasury assured us as a way of spreading risk, they INCREASED RISK!
Namely, if Joe Smoe doesn't pay his mortgage and his over-priced hovel is siezed by the lenders, first, they must pay taxes or the state and city takes it! And if they can't get the house sold for the price owed, they are up the creek and they then cease the money payments of any sort and a whole lot of money vanishes. Then the lenders who are actually people funnelling loans from the Bank of Japan, can't pay their bonds and honor their charges so they cease. Then the investors who pooled the seed money for all this expecting a 20% per year return get burned and everyone loses...big time.
In recent trading sessions, the Treasury-market yield curve has steepened, thrusting the yield on the 10-year note above that of the 2-year note and placing the 30-year bond's yield above the returns of both shorter-duration securities.The steeper curve reverses the inverted condition that's marked the bond market during much of 2007, with 2-year yields richer than 10-year yields. The steeper curve brings back the motive for lending money over longer terms.
*snip*
The phenomenon "suggests that the market believes that risk and reward are fairly well-priced versus economic growth and the rate of inflation," according to Kevin Giddis, fixed-income portfolio manager at Morgan Keegan."Over the last two weeks we have learned that inflation is under control and that the economy -- [excluding] housing -- is growing," Giddis said. "The general feeling is that when the curve gets this normal, it shows confidence in the economy and growth. It suggests that there is some comfort level in the market."
This is pure insanity. Who controls the world bond markets? The BUYERS of bonds! And who by far is the country in dire need of funds, lots and lots of funds due to a trade deficit that is roaring over $1 trillion a year now? And who has the biggest FOREX reserves on earth bar none?
Of course, the Chinese. And ditto the runner-uppers, the Japanese who have a total upper hand on our economic affairs. If we let them have their stupid yen drop lower than the dollar, they will buy our bonds even at ridiculous interest rates! Indeed, it is pure honey for them, their own rates are near 0%!
The Chinese are demanding something more reasonable which is why interest rates are rising relentlessly. They would be much higher if Japan were not buying bonds at a 'loss' to keep the yen weak! If they defended the yen and instead of dropping 20% vis a vis the euro, it rose against the dollar and tracked the euro, the yen would be at 100 yen to the dollar not the 123+ amount today. This article is typical of what I read in the press which pretends the news from Asia doesn't cause whatever is going on.
We have been in a false bond market for 7 years now! This is why the Fed could drop rates to 1% after 9/11: our Asian bankers gave Greenspan the green light!
Now the Chinese banking light is flashing yellow and will soon turn red. But until then, we can pretend all is well and this curious situation will continue even if the trade deficit rises to $2 trillion or $8 trillion or whatever. Like our budget deficit which was only $1 trillion in the second year of Reagan's misrule. It is now nearly $9 trillion and rising. Rising at a rate of $2.5 trillion a year is insanity. And the trade imbalance is just as bad. Americans are not the biggest buyer of bonds, Asia buys them. This means, if someone over in Asia stops buying, we go bankrupt.
I watched TV, a rare event, tonight and counted car commercials. There were 7 car commercials on ABC during the 15 minutes I watched the weather reports. Every single one was for Japanese cars. Think of that! This is the clue, the instrument of our destruction. All the cars had great 0 intrest loans appended from the Bank of Japan. Try competing with that!
From 2000-2001, debt increased by $150,988.78 million, CDs were 5.83%, dropping to 1.75%.
2001-2002, it rose by $112,575.52, CDs dropped from 1.75% to 1.29%.
2002-2003, it rose by another $103,876.90 million and rates fell from 1.29% to an unheard of, historic low never seen in our history of 1.04%!
2003-2004, it went up $115,560.91 million as interest rates climbed from 1.04% to 2.34%.
2004-2005, it went up a lot, $199,121.81 million while interest rates continued to climb to 4.32%.
2005-2006, it still climbed $104,753.86 million while interest rates on CDs rose to where it is now: over 5%.
The rate of going into debt has risen over the years, the most rapid rise has been the last 7 years but looking at the data, it is obvious something is very different now. During Bush Sr.'s reign, the rate of accumulation was near 0% for two years. I got reamed out during that time, this is why I ended up living in a tent when my husband got injured at work! There was no money!
But the growth in debt even in the teeth of rapidly rising interest rates has to be explained. I suggest there are two things at work here just like when the Federal Reserve strangled selling bonds in 1922 but the overflow of funds cranked out during and right after WWI flooded the markets with 'liquidity' which is RED INK, ahem, and this liquidity ran dry in October, 1929!
So we see the excess liquidity created by the Fed and the Bank of Japan...which is now ending, grindingly slowly but ending. The loans people generate from banks have a time-lag. If you want a loan for a house, it takes at least 3 months to get it through the system. As things slow down, it takes longer. The year with the most growth was when rates were already rapidly rising and all the home sellers were frantically closing on their properties to unload them before rates hit 5%. So the price hikes in homes ended around December, 2004 when rates passed the 2% mark. But the overflow of closing on them and the beginning of the panic selling by developers meant from 2005-2006, there would still be growth.
I bet the statistics for this year will be dismal. Already the numbers are running in the negative:
2006-April, 2007, it has dropped by $14,006.92 million! And interest rates are at 5.28% where it has been for the last YEAR! We know that housing is dropping but people are still spending which means they must accumulate more debt but this isn't good news, this is bad news, it means we have that old devil, inflation!
The Northeast was the last place to feel the bite of the drop in house sales but it is here now, I not only see lots of 'For Sale' signs all over everything, today I began to see those darker 'Auction of this property' signs!
The risks and rewards are not good right now nor will they improve. But the risk of the Japanese losing their USA markets is very real and this is what drives them to keep rates here as low as possible by buying our lousy bonds that are still below the real rate of inflation of dollars. I would suggest the number of excess dollars the Fed is creating (they hide this data) is well above 5% a year. And the fact that the FOREX reserves of Japan, if you add the bonds they hold, represents $1,700,000,000,000! That is nearly $2 trillion! An astonishing sum. And add China's bonds and FOREX dollars, that is another $1.6 billion and Russia holds half a trillion dollars so these three alone have around $4 trillion in extra dollars and if you add everrything on earth it comes to, um, about what our budget deficit is. Gads.
This is not good news. How can we have a sane bond market with that going on? But the news today is pure propaganda, as usual. Like the Beige Book which was full of outright lies, these lies will pass through the system and stocks will climb again as everyone thinks, 'It isn't going off the cliff after all!'
Here is an old story from over a year ago from Money Central MSN:
On Mar. 14, the U.S. Bureau of Economic Analysis announced that the broadest measure of the U.S. trade deficit grew to $225 billion in the fourth quarter of 2005. That marked an increase of 21% from the $185 billion deficit in the third quarter of 2005. And the quarter's results drove the deficit for all of 2005 to $805 billion, a new record.The current account deficit -- defined by economists as the combined balance on trade in goods and services plus income transfers between the U.S. and the rest of the world -- increased in the fourth quarter to 7% of U.S. gross domestic product (the most common measure of the U.S. national income). For all of 2005, the deficit was 6.4% of GDP.
In 1985, when the G7, then the club of the world's seven largest free-market economies, pushed through a major devaluation of the U.S. dollar in the Plaza Accord, the current account deficit was a mere 3.5% of U.S. gross domestic product. The good news is that the world is a lot more tolerant of a massive U.S. deficit with the rest of the globe than it was 20 years ago. The bad news is that we're running a lot deeper in the red than we were in 1985.
The writer of this article tried to raise some alarm but obviously was ignored. The Plaza Accords didn't fix much of anything, the entry of Russia into world oil markets saved us. The price of fuel fell like a rock to $12 a barrel! This killed inflation. But our trade deficit rose relentlessly because China entered our markets and the big rush of Asian goods simply accelerated.
In other words, the GNP% of our trade deficit doubled since we tried to fix it by having our government which is run by traitors who were taking bribes from the Japanese, to lower the value of the dollar and thus save us from our own greed because the dollar would be less than the yen and the DM of Germany. Of course, the Germans moved rapidly to drop their currency and create the euro. Which the Japanese drove up in value to keep their trade benefits.
This money has to recycle into American pockets or the trade system collapses and this is why the Bank of Japan has helped the hedge fund hell hounds and to this day, refuses to protect the yen even slightly. Every time the trade deficit rises as a percentage of our gross national product, we are assured that our economy is very big and can swallow this sword without struggle. But percentages matter! The pro-free traders are stupid if they ignore the growth rate of percentages because if anything 'grows' but the bad stuff grows at a faster rate, it dies! DUH!
Like the Red Queen in Alice Through the Looking Glass, our exports and our economy grows like mad but the imports grow faster and I would suggest, the more we do these things, the more it will grow since a big component of it is energy! Which is rising in price thanks to the falling dollar. For example, one of our bigger energy trade partners is Canada. And the loon is rising in value while the dollar is falling and so the number of dollars needed to buy energy rises for us and worse, the over-all price of energy is rising world-wide!
"The U.S. Trade Deficit: A Sign of Good Times"August 19, 1999
In the 26 years surveyed, America’s current account deficit as a percentage of GDP grew larger (or, in the parlance of the typical news report, "worsened") in 15 of them and shrank (or "improved") in 11. By almost any measure, America’s economy has performed better in years in which the trade deficit rose compared to years in which it shrank.During years of rising deficits, the growth of real gross domestic product averaged 3.2 percent per year, compared to 2.3 percent during years of shrinking deficits. In other words, our economy typically grows about 40 percent faster in years in which the trade deficit grows compared to years in which it shrinks.
On the issue of jobs, the story is much the same. During years of "worsening" trade deficits, the unemployment rate has, on average fallen by 0.4 percentage points. During years of "improving" deficits, the unemployment rate has, on average, risen by 0.4 percentage points.
In the politically sensitive sector of manufacturing, the trade deficit again proves to be a companion of better times. During years of rising deficits, manufacturing output grew an average of 4.5 percent a year. During years of shrinking deficits the average growth rate of manufacturing output was 1.4 percent--less than one-third the rate of growth during years of rising deficits. As to manufacturing jobs, those years in which the trade deficit grew saw factory employment increase by an average of 13,100 workers per year. Those years of shrinking deficits were accompanied by an average annual loss of manufacturing jobs of 116,700.
We are in the fix we are in today because of lunatics like Griswold! This neocon clown forget to understand that our trade deficit, which NEVER disappeared but only grew less sometimes, did this ONLY during RECESSIONS! Namely, the only thing that stopped our trade deficit from rising ever faster and growing a bigger percentage of the GDP every year was when our economy fell apart! This doesn't mean that this destructive trade that is eating us alive was making us stronger, it simply meant that whenever we saw any expansion at all, foriegn traders ate more and more of it! And each cycle is worse than the one before which is why the rate of eating into our GNP grows bigger, doubling every 10 years! Gads! This is terrible!
But like all criminals, he likes to hide this obvious fact and clothes this process in a nice flower print dress. He also leaves out the fact that these cycles whereby foreign traders take more and more dollars and slices of market are also where they buy out our own industrial base and our financial base! Namely, they are buying us faster than we are buying them! And at a good clip.
He claims our GDP rises on average 3.5% when our trade deficit rises rapidly. But if you subtract the trade deficit from the GDP numbers then it looks a lot worse! And of course, every one of these dollars becomes part of the pile of money that is warping the world's bond markets and is creating 'liquidity' that is really our trade coming home with compound interest attached. This all leads to bankruptcy. If I were to lose 1% of my money every year for 55 years, I would lose more than half of what I own! Indeed, as trade deficits have widened, the incomes of most working Americans have dropped. Behind inflation. Behind everything.
They may have jobs during these spells but they gain no leverage over earnings and can't force their owners to pay more so wages today are well below where they were, minus inflation, 40 years ago when the trade deficits started.
And this is the deal with statistics: they can say anything but if one wishes to know the truth, one must look at a wide range of data and then correlate ALL of it, not cherry-pick one thing or another. And if the data looks fishy, one must add more information to locate the cause. This is why looking at present housing finance issues is not enough, there is a 6 month's timelag involved and projecting forwards is tricky but not that hard, for me, anyway!
Griswold was hauled into Congress to soothe the savage beast and to basically lie to them so they would keep up this present ridiculous and dangerous course.
Here is Bernanke last month doing the same stupid thing, lying about free trade:
Embracing the Challenge of Free Trade: Competing and Prospering in a Global EconomyTrade is as old as humanity, or nearly so. Archaeological sites demonstrate that ancient peoples traded objects such as rare stones and shells across fairly long distances even in prehistoric times (Guisepi, 2000). Over the centuries, with stops and starts, the volume of trade has expanded exponentially, driven in large part by advances in transportation and communication technologies. Steamships replaced sailing ships; railroads succeeded canal barges; the telegraph supplanted the Pony Express. Today, in a world of container ships, jumbo jets, and the Internet, goods and many services are delivered faster and more cheaply (in inflation-adjusted terms) than ever before.1
*snip*
This is all standard textbook material, and it may well leave you unconvinced of the importance of international trade. After all, the United States is a big country, and we can certainly achieve many of the benefits of specialization by trading within our own borders. How important is it for the health of our economy to trade actively with other countries? As best we can measure, it is critically important. According to one recent study that used four approaches to measuring the gains from trade, the increase in trade since World War II has boosted U.S. annual incomes on the order of $10,000 per household (Bradford, Grieco, and Hufbauer, 2006).2 The same study found that removing all remaining barriers to trade would raise U.S. incomes anywhere from $4,000 to $12,000 per household. Other research has found similar results. Our willingness to trade freely with the world is indeed an essential source of our prosperity--and I think it is safe to say that the importance of trade for us will continue to grow.
Here is the top financial officer of America lying through his fangs. Since when have 90% of American households seen $10,000 pay hikes PER YEAR? I wish! And what percentage of any pay hikes one gets (and not many get these!) are eaten by inflation? Let's do some numbers!
Basic inflation eats up say, 5% a year--though I fear it is closer to 8% at this point---and if you earn $50,000 a year and remove that from the equation, you have only $47,500. Then your boss, General Motors, gives no pay raise and cuts benefits! So, thanks to free trade and the flood of Japanese cars, the income loses value due to inflation and doesn't grow by that magical $10,000! In my own life, I never saw such pay hikes. I made money on investments but not pay hikes. My daughter has not had a pay hike in over two years and benefits were cut and deductions rose so she LOST money! And then LOST MORE due to inflation!
If she got an extra $20,000 over those two years she would jump for joy. And Bernanke knows this! He isn't that totally stupid, he is merely totally EVIL. Only a traitor or an evil bastard would say what he said.
In practice, the benefits of trade flow from a number of sources. By giving domestic firms access to new markets, trade promotes efficient specialization, permits economies of scale, and increases the potential returns to innovation.3 U.S. firms increasingly seek to expand production and profits through new export opportunities; indeed, U.S. exports grew about 9 percent in real (that is, inflation-adjusted) terms last year. Export-oriented U.S. manufacturing industries include producers of aircraft, construction equipment, plastics, and chemicals. The United States also excels in the manufacture and export of sophisticated capital goods and scientific equipment. Outside of manufacturing, a number of U.S. high-tech companies, including software developers and online service providers, are world leaders in their fields. American films and music attract large worldwide audiences. Montana's exports include wheat, metal ores, and high-tech materials that are critical to the production of semiconductors.Firms that emphasize exports are among America's most dynamic and productive companies. Relative to firms that produce strictly for the domestic market, exporters tend to be more technologically sophisticated and to create better jobs. Among U.S. manufacturers, for example, exporters pay higher wages and add jobs more rapidly than non-exporters (Bernard and Jensen, 1999). A significant portion of U.S. international trade is conducted by multinational firms; studies show that these firms generally pay higher wages than purely domestic firms, both in the United States and in developing countries (Doms and Jensen, 1998; Bhagwati, 2004, p. 172). U.S. firms with a global reach tend to be better diversified and are better able to respond to new market opportunities wherever they may arise.
Exports are important, but so are imports. Without trade, some goods would be extremely expensive or not available at all, such as the Valentine's Day roses of my earlier example or out-of-season fruits and vegetables. Trade also makes goods available in more brands and varieties; examples include automobiles, consumer electronics, garments and footwear, wines, and cheeses. One of the great attractions of globalization is that it brings to consumers the best of many cultures. And of course, global trade allows many types of goods, especially consumer goods, to be purchased at lower prices. Lower prices help all consumers but may be especially helpful to those with tight budgets. Indeed, a number of the large, import-intensive retail chains in the United States are focused on low- and moderate-income consumers, who benefit from being able to buy a wide variety of lower-priced goods.
Let's talk about roses: my village of Berlin, NY, has been hammered on every level by free trade. Every single business here has been either badly damaged or totally destroyed. We had one of the biggest green house complexe, Seagroatt Roses, in New York state. It is gone, the buildings sitting on the hillside, empty. Decaying. This happened in just 10 years! They were expanding and had over 100 people working for them in Berlin when I came here but now have less than 10! Roses shipped in from thousands of miles away have destroyed their local markets. Seagroatt's family has broken apart the organization and one of them just bought shares in a Columbian flower farm and he now makes the trade deficit worse by importing these roses which he used to grow on the other side of my little mountain, our boundries meet at the top of it. Bernanke celebrates the death of my village and the loss of these jobs as a good thing. I also know the workers thus displaced didn't get rich quick, either.
Some had to abandon their homes and we see this all over and now, with the housing boom dead, the sad 'For Sale' signs are turning to 'Auction' signs to 'Seized by the Sheriff for back taxes' red signs! This is not a glowing example of how free trade has been a wonderful thing.
This beastly, evil man also gloats that free trade drops prices! Well, how do American workers earn an extra $10,000 per annum if prices are DROPPING? Eh? In construction, wages have not only stagnated during a building boom, thanks to a flood of illegal aliens, wages have dropped! Now the boom is over, wages will collapse or jobs simply vanish for years and years! How are bricklayers going to get an extra $10,000 a year? I wish! I would be really rich.
And Bernanke has created a lot of inflation so the poor people who can buy cheap imported goods can't since their own wages are eaten up by food, fuel, housing and medical costs. And no $10,000 wage hikes anywhere to be seen despite Congress raising the minimum wage.
To see the irrelevance of trade to total employment, we need only observe that, between 1965 and 2006, the share of imports in the U.S. economy nearly quadrupled, from 4.4 percent of GDP to 16.8 percent. Yet, reflecting growth in the labor force, employment more than doubled during that time, and the unemployment rate was at about 4-1/2 percent at both the beginning and end of the period. Furthermore, average real compensation per hour in the United States has nearly doubled since 1965.
HAHAHA. This man is a good devil, isn't he? He includes wage hike numbers from 1965! And when did the trade deficit begin?
1972! And when did inflation begin to pass the wage hikes workers demanded? Well, for non-unionized workers, that is the year they ceased getting raises faster than the rate of inflation! And for union workers, there was a 7 year time lag when they struggled to keep up with inflation that rose to over 16%! But then Reagan came in and began killing the ability to strike which no longer exists since workers can be fired and scabs brought in with impunity. Since 1984, wages of all working people have FALLEN in real and in inflationary terms. They kept above the water by having all the wives go to work so one-wage families are now 2 or more. But they are counted as households so it looks like wages doubled when they didn't, they simply kept up...barely...but at a price.
To sum up, international trade in goods, services, and assets, like other forms of market-based exchange, allows us to transform what we have into what we need or want under increasingly beneficial terms. Trade allows us to enjoy both a more productive economy and higher living standards.
True, our living standards have gone up...around $9 trillion of this improvement is in red ink in trade AND another $9 trillion in government red ink! $18 trillion in the red isn't the sign of a healthy economy, it is a sign we are bleeding to death!
And Bernanke knows this. He has the same data I have. Maybe because I have had to struggle to live all my life and thus, I know what is going on at the bottom half as well as the top half, having lived at both ends, I know that things are not well at all and the price we are paying for this 'wealth' is going to be more than we can afford in the bitter end.
The 'economic' folderol never made much of an impression on me. They said the means of production in the USA was right at hand, but the companies simply shut their doors during the 'Great Depression', and I believe that. But now, this time around, the means of production have been shipped overseas. There are not even any doors left to shut! This is much scarier than some stupid 'Depression'. And most of the kids I know are not skilled at anything much. If I am at all smart, I would say this spells D-O-O-M.
Posted by: blues | June 20, 2007 at 10:36 PM
Yup. You are 100% correct. There are fewer and fewer things to close now. And where is my lifetime of $10.000 pay raises? I should be earning at least $35,000 more than I can get!
Posted by: Elaine Meinel Supkis | June 20, 2007 at 11:23 PM
As Canadian energy is paid for in USD it isn’t exactly helpful to our cause unless energy pricing structure increases corresponding to the USD decline relative to world markets. This hasn’t been happening in a cohesive manner for a number of reasons. It’s being recognized that currency valuations are starting to cause some stress in the resource based provinces.
"The bottom line is that if our dollar goes to par, it's not good news for an exporting province like Alberta," Oberg said Tuesday in an interview. "For every one cent of increase in the Canadian dollar, what we see is a revenue loss of $123 million."
http://www.cbc.ca/cp/business/070605/
b0605106A.html
A rise in the Bank of Canada's interest rate, combined with stronger-than-expected economic growth will drive the Canadian dollar to parity with the US dollar by year-end, said CIBC World Markets’ latest Canadian Portfolio Strategy Outlook report.
http://www.albertaindex.com/content/view/
124/9/
The budget forecast the dollar at 86 cents U.S. for the fiscal year, but with the loonie trading above 94 cents U.S. -- and pegged by some to be on par with the U.S. greenback by the end of the year -- the government is bracing for a wallop.
http://www.canada.com/calgaryherald/
story.html?id=6d845e3c-47a6-4cdb-8a82
-69892214632c&k=71476
Posted by: Canuck | June 21, 2007 at 12:56 AM
More...
Canadian Association of Petroleum Producers vice-president Greg Stringham said smaller conventional oil and gas producers are the firms that will feel the effect of a rising dollar the most, but over the longer term it could also have an impact on larger projects, including multi-billion dollar oilsands projects.
"It's an effective lower price for the commodity that we sell, whether it be oil or gas -- and that's lower revenue," said Stringham.
http://www.canada.com/calgaryherald/news
/story.html?id=57e04ad8-e377-454b-
ad7a-3bb7ee45aff6&k=35638
Posted by: Canuck | June 21, 2007 at 01:03 AM
With Home Depot, Wal-Mart, and all the rest of the big boxes coming to your local Canadian town, expeditiously helped via NAFTA and the stronger dollar which along with higher gasoline prices should decrease tourism, this should add to Canadian outsourcing and crimp the trade surplus of natural resource revenues.
Posted by: teddy | June 21, 2007 at 09:55 AM
Big Box Coming to town? pretty much endemic at this point. Canadian outsourcing is typically expedited by a buyout punctually followed with a production rationalization.
More risk to Canadian tourism from US passport proposals than fuel costs.
Posted by: Canuck | June 21, 2007 at 10:36 AM
And the Border Guards won't let people like me through to Canada. They go on the internet and if one is slightly radical, they are not allowed to cross!
Canada is being sucked into our new Soviet Union and like it, we are going bankrupt.
Posted by: Elaine Meinel Supkis | June 21, 2007 at 10:57 AM
"Some had to abandon their homes and we see this all over and now, with the housing boom dead, the sad 'For Sale' signs are turning to 'Auction' signs to 'Seized by the Sheriff for back taxes' red signs! "
Hmm. Sounds like one could pick up a house in Berlin relatively inexpensively. Bet if I made a big down payment it'd be even cheaper.
I should look at Berlin real estate. Elaine & I could be neighbors!
Posted by: JSmith | June 21, 2007 at 01:25 PM
Yeah, and we all have guns up here. You would like it. Lots and lots of hunting.
Posted by: Elaine Meinel Supkis | June 21, 2007 at 07:39 PM
Elaine. I can relate..I was refused entry 1x and another time the french canadian guard was rude
Posted by: 90404 | July 07, 2011 at 03:27 PM