$1 USD, that's like $1 CAD?

[Andrew]

It's illegal for you to copy money. But OK for a government sanctioned monopoly to do so whenever they want. :)

Have fun with the government stealing money from you. :)

If you want to read a depressing book, read Rothbards What has government done with our money?. Tells you how they steal from you using inflation and other stuff, basically tells you how the current recession was formed with banks doing whatever they want and screw everyone over. Written 40 years ago of course, so everyone ignored it (those Austrians don't know what they are talking about! ::)). Then once done with that, read Rothbards Case Against the Fed (direct pdf link) Fed=federal reserve

Americas Great Depression and Panic of 1819 are also good reads by him. (1819 difficult to read as it is scanned book)

They give a pessimistic view of the whole government/Central bank. Point out flaws which can contribute to problems. Rather than the fairy tale that was learned 2 years ago about how good banks are for everyone. Point out problems that contributed to previous recessions, and I found it interesting how those same flaws existed for the current recession.

The only reason why western society is so well off is probably because of businesses and governments taking on debt now to get stuff done and paying for it later. I can get a house or new car now, and pay for it the rest of my life. Money can be spent on research now, and pay for it later once something is discovered and can be sold.

I definitely think there will be high inflation, followed by high interest rates to deter high inflation (but of course they will downplay inflation so they can steal from you). Although, since it is difficult to get loans/debt now from banks, when interest rates go up businesses will be complaining that it is expensive to get. Sad to see businesses relying on debt in order to survive. Because if something goes wrong at some point your out of business. Acquiring debt is fastest way to expand though.

Mortgage Rates May Fall to Lowest Since WWII on Fed Purchases

Free houses for everyone!

Yep massive inflation.

Time for wikipedia review of inflation:

Quantity theory of money

Monetary inflation

Inflation

Increase in money supply -> increase in inflation

EDIT:

Shell dumps wind, solar and hydro power in favour of biofuels

Hahahaha. An oil company dumping renewable energy. And going with biofuels which has proven to take more inputs than outputs to create.

Surprise inflation offers hope

Consumer prices showed some surprising signs of life in February, dispelling fears of deflation gaining a foothold in the Canadian economy. Prices rose 1.4 per cent from a year earlier, driven by higher food and shelter costs, Statistics Canada said Thursday.

And so it has begun.

Gold rallies 6% as Fed's plan fuels inflation worries

Nothing to worry about. ::)

EDIT:

As expected higher inflation in USA means a depreciation of US exchange rate. Canadian dollar has rose 1.5 cents already

Citigroup May Spend $10 Million for Executive Suite

I'm glad those executives have nice offices. Otherwise they would not be so productive.

Maybe a study should be done where in a company that normally has an executive that cost $50 million a year in wages, why not hire 501 fresh out of university students (or anyone at all) with various degrees and specialities at a wage of $100,000 each? Who would be more productive? The single executive or 501 grad students? I picked an odd number so that if big decisions are needed, no ties would occur. And maybe these students would get 1/2 their pay 5 years from now based upon future performance (so that long term profits are more important than short term?)? And have the students only have 1 year terms to decrease politics. Would be interesting.

Instead you have people who don't even know what front line workers are doing, and they just look at numbers. Gee profits have decreased. Lets fire employees! Then I can increase my own bonuses because I met quarterly shareholder expectations.

[Andrew]

Well this deserves its own post (probably thread)

http://www.detroitblog.org/

A blog showing what life is like in Detroit and the decay of urbanization.

In Detroit, Artists Look For Renewal In Foreclosures

Houses are selling for less than $1000.

Profota's house has been broken into three times, his garage six times. Same goes for pretty much every house on his block.

"You gotta have an alarm system on your houses, a dog and a gun, because the neighborhood is terrible," he says. "I got all three."

Move to Detroit for cheap houses. Stay for the urban warfare.

House passes bill taxing AIG and other bonuses

Good old government. If it moves, tax it.

[Khan]

Might be worth buying up some land anyway, It'll surely keep its worth better than a few hundred pounds. It'd be worth it just to own a house outright at 21 anyway.

[Andrew]

Yah but the land is currently worthless and has only been depreciating over the decades. No one wants to live there, so even if you did own 100 acres, what would you do with it if you were still surrounded by slums? Build a large wall around it to keep people out? You'd still have to leave the property, and when you did that you would still get shot and robbed.

The houses are run down and ransacked, so they are uninhabitable. You can't just bulldoze them because that would cost a lot of money to do, and they probably contain asbestos which would be very expensive to properly remove.

Sounds like fun but you'd be better off at the casino. :)

[Khan]

True, it still seems like the most likely place for the next art scene, we're just gonna have some bad ass artists on our hands.

[chatfsh]

If you want to read a depressing book, read Rothbards What has government done with our money?. Tells you how they steal from you using inflation and other stuff, basically tells you how the current recession was formed with banks doing whatever they want and screw everyone over. Written 40 years ago of course, so everyone ignored it (those Austrians don't know what they are talking about! ::)). Then once done with that, read Rothbards Case Against the Fed (direct pdf link) Fed=federal reserve

Americas Great Depression and Panic of 1819 are also good reads by him. (1819 difficult to read as it is scanned book)

They give a pessimistic view of the whole government/Central bank. Point out flaws which can contribute to problems. Rather than the fairy tale that was learned 2 years ago about how good banks are for everyone. Point out problems that contributed to previous recessions, and I found it interesting how those same flaws existed for the current recession.

Thanks for the recommended readings.  I'll try to check them out when I get a chance.  However, I don't need to read them to know that the government is screwing us six ways from Sunday. ;)

EDIT:

Gold rallies 6% as Fed's plan fuels inflation worries

Nothing to worry about. ::)

Must

[Andrew]

Yah, if you find the books a bit boring you can quickly scan over them until you find a chapter that is more interesting. I've done that a few times. One of the problems of reading books on computers.

EDIT:

Must…resist…doing…the I told you so dance! :D

Yes, true. You were correct at pointing out gold good investment several days before the rally. Very intuitive. I didn't even think about the news of feds printing more money would cause investors to buy gold.

But it's been between 900 and 1000 for a long time, so I dunno. Just another volatile day that markets have had for past year. Probably go back down next week. who knows.

/making 6% return in a week would be very nice.

[chatfsh]

Thanks. :)  Don

[Andrew]

Bored, so I thought I'd type up some info:

I'm guessing for high inflation, followed by high interest rates to combat high inflation (Canada is inflation targeted, I think USA is unemployment targeted for interest rates). Most of my post will be related to Canada/USA since that is what I know most about.

Governments have two main tools to affect economy: fiscal and monetary.

Currently world governments are going on a spending spree which will incur massive deficits.

An increase in government spending, decrease in taxes and several other variables are currently causing aggregate demand to increase. An increase in aggregate demand will cause output (GDP, employment etc) to increase. This will cause inflation and is considered fiscal expansion.

At the same time central banks are doing what is known as monetary expansion. This occurs usually with a decrease in interest rates. A decrease in interest rates causes the money supply to increase. At the same time of decreasing interest rates to their lowest level in a century or more, and the central banks have run out of room to lower them any more which is a bad thing. Central banks are also "printing" money buy giving out bailouts/loans and buying bonds etc (they are literally creating money). What I am currently learning has more to do with how this affects exchange rates, and doing this will cause a depreciation of currency. Which is what happened to US dollar this past week which apparently had its worst week in 25 years (I was surprised to learn this as I thought back when CAD was $1.15 was worst, maybe Canada is doing bad as well). This was because of expected inflation and the devaluation of USD. Of course this was not sustainable so it went up some today. This is caused by the immediate reaction of asset market, which occurs almost immediately, and is based on expectations.

So we have both tools in a very aggressive expansion phase to stop the worst recession in at least ~20 years. Unemployment rates are still increasing. As soon as you hear unemployment rates stabilize and start decreasing is when the recovery should begin. Once this aggressive expansion starts to work, expect high inflation. And to combat this inflation most countries will increase interest rates.

I'm going to make some complete guesses below.

Bank of Canada current interest rate is 0.5%. It was at 4.25%(?) before the bubble burst back when this thread was started. Interest rate announcement dates for 2009 and my absolute prediction based on nothing are:

21 April - unchanged

4 June - +0.25

21 July - unchanged

10 September - +0.25

20 October - unchanged

8 December - +0.25

Yah no science there, but It wouldn't surprise me if interest rates are 0.5-1% higher by the end of the year. If they are not, then the fiscal/monetary policies to get rid of recession are taking longer than expected to work, or are not working.

It will be interesting to see how 10% national unemployment levels will affect job markets. Less working = less spending. Could create a glut which will take longer to get out of than to "get into" (unemployment numbers increased faster than they will decrease once highest % is reached).

A very scary thought is that oil is at 50 dollars per barrel during a time which is apparently the worst recession in a long time. So as soon as it is over and people start consuming and demand increases (I doubt supply will increase), should see $100 barrel by summer 2010. Unless somehow the USD increase in value (appreciates against other currencies), then that might slow down the increased price of oil.

Don't make decisions based on my predictions :)

I'm a talking head just like the dipshits on tv (buy! buy! buy!, there is no recession!), but my predictions would be more pessimistic, and I probably have more education in economics/business than them, since they are actors ;)

EDIT:

Wondering why tv news channels are focusing on AIG bailout/bonuses?

So that citizens do not hear about Fed to pump another $1 trillion into U.S. economy.

Will Obama, McCain, Dodd Return Contributions From AIG Employees?

More proof that AIG paid off politicians, politicians bailed out AIG, there is no ethics in USA government.

[Dante]

Teehee

[Andrew]

I love bob the angry flower.

woot on local news saw someone using ubuntu. It was at a university about creating adaptive websites. Looked like default intrepid 8.10.

[chatfsh]

Teehee

Cute. :)

Wondering why tv news channels are focusing on AIG bailout/bonuses?

So that citizens do not hear about Fed to pump another $1 trillion into U.S. economy.

Will Obama, McCain, Dodd Return Contributions From AIG Employees?

More proof that AIG paid off politicians, politicians bailed out AIG, there is no ethics in USA government.

But I give the House of Representatives kudos for passing a bill to tax executive bonuses at 90% for all corporations that received bailout funds.  Of course the senate must pass it as well before it goes into effect.  It

[Andrew]

A.I.G. Sues U.S. for Return of $306 Million in Tax Payments

So US gov owns 80% (?) of AIG, yet AIG is still running independently. They need to be wiped out and completely government socialized.

[chatfsh]

Totally agree! 

AIG

[Andrew]

Remember how the US deficit was supposed to be 1 trillion this year?

Deficit Will Hit $1.845 Trillion This Year, Agency Says

USA is bankrupt.

The agency also predicted a total of $9.3 trillion in deficits over the next 10 years.

Maybe buying gold is a good idea? Along with guns and ammo.

Of course mainstream news will protect americans by talking about $165 million in AIG bonuses, while the government steals from the pocket of every american.

Time for scary graph

[chatfsh]

Scary indeed...

I don

[Andrew]

Funny image about people's networth

Once you've read it see below:

[hide]funny how the homeless guy has more net worth than others[/hide]

[Dante]

[hide]Thing is, the little girl probably has more than any of them in her piggy bank.

Or, if she's particularly far sighted, trust funds. [/hide]

[chatfsh]

Very astute commentary on the true financial position of most in today

[Andrew]

In order to get ahead in life, you need to be capable of acquiring debt. 8)

I doubt hide tags are needed now.

Official: AIG bonus estimates grow $53 million. Company paid $218 million, not $165 million, Conn. attorney general says

Oops. This should keep it in the news longer. Wonder what else the gov will do while the press is busy reporting on something that allows them to maximize profits by selling advertisements.

Courts OK Nortel execs' bonuses

As far as I remember, Nortel hasn't been profitable since dot com bust in 2000. So of course execs will get bonuses for restructuring even though the company has been in constant restructuring mode since dot com bust.

Administration wants to buy up banks' toxic assets

Sounds like a great idea. Have the government buy worthless assets. I have some worthless rocks I am willing to sell. Maybe gov will buy them.

Treasury to unveil bank rescue bid soon

The plan, a cornerstone of the Obama administration's costly attack on the credit crisis, will aim to attract private investors by offering abundant loans and generous terms.

Yes, the gov should give out lots of loans with "generous terms". WTF is wrong with the gov? Did they forget what happened when they gave out bailouts with no strings attached!?

Hmm, I thought I read that Zimbabwe currency has stopped being traded.

Zimbabwe chooses rand as reference currency

"It is, however, the first step in anticipating an epoch when we can resume use of the Zimbabwe dollar," he said. It was, nonetheless, necessary to first restore the multi-currency economy to a reasonable and sustainable level of activity.

[Dante]

Does Zimbabwe even have an economy anymore? The sooner they stop pretending and start bartering the better.

[Andrew]

Not really no.

Although people are buying the currency on ebay for fun. Apparently the currency even has an expiry date on it.

[chatfsh]

The banks are now pushing back on the new legislation that would tax employee bonuses at 90%.  I can

[Edric O]

Isn

[Andrew]

Lousy Rating Agencies To Make $1 Billion Rating Bailout Debt

The agencies that rated all the worthless subprime assets at AAA, are now going to get paid $1 billion to rate government bailouts.

More large companies that failed, are now getting paid again. They profited from rating garbage AAA, and now get to profit from the bailouts caused by it.