The US debt bomb: tick, tock ...

I wrote the following for a local newspaper…

For those that don’t know, Greece has recently been pressured by the other 16 nations with whom it shares the Euro to control its federal spending habits. Greece has a debt well over 50 per cent of its GDP and the Euro nations are concerned that investors are going to lose faith in Greece’s debt and stop purchasing Greek bonds.

What good is giving someone a loan if it is only backed by other loans?

Aside from the US dollar, the Euro is considered by some the most important currency in the world. Luckily for those who share it, Greece has a GDP smaller than Ontario so its affect on the Euro is limited. If Greece were to default it would be devastating to the Euro but at least it would have 16 other nations, including the economic powerhouse that is Germany, to support it.

The United States of America, on the other hand, has no one to support it. The US is also drowning in a pool of debt. To make things worse, the US buys more than it spends. In January alone, the US bought $4.1 billion more than it sold – and that’s just with Canada.

That’s great for us, but maybe not for long.

The US, quite frankly, is a ticking time bomb. The debt bomb may not go off this year, it may not go off this decade or it may just be a dud. Chances are though, it is only a matter of time before investors, primarily China, say enough is enough and refuse to buy anymore US debt.

When this happens, the US dollar is going to plummet relative to other currencies, including the loonie. That is going to leave Canada in a very dangerous position.

The US’s money is going to be worth less and it will take more of it to buy Canadian goods. This wouldn’t be a big deal if it were Zimbabwe we were talking about, but this is the United States. This is the country that buys three-quarters of everything we sell and suddenly they won’t be able to afford it – or at least not as much of it.

Canadian jobs will be lost, businesses will close and recession will be upon us.

There isn’t much that can be done to prevent it, either.

First and foremost, fiscal responsibility must be addressed in the US, but unfortunately, the US’s track record is bleak and their partisan political ideologies make agreeing on a strategic plan a problem.

Second, Canada needs to diversify its trade – quickly. Lesser developed nations are growing rapidly and Canada needs to take advantage by negotiating agreements for them to buy our goods. We’ve got plenty of desirable things to sell here in Canada and they may just be our saving grace.

Third, Canada needs to depreciate the dollar so that our goods are cheaper to other countries, and it’s going to be difficult because downward pressure is already on the Euro, the greenback and even the pound sterling.

This is made even more complex due to increasing demand for oil that is developing as countries exit the recession. As the price of crude rises, so does our oil-soaked currency.

Another thing Canada can do is follow India’s lead and buy a pile of gold. Because gold is priced in US dollars, when the value of the greenback declines it takes more of them to buy gold than it did before, meaning the price of gold goes up. Although it won’t save any Canadian jobs, it is an ideal hedge against the US dollar and at least the government could use the profits as stimulus.

In a global economy, exports to another country are an investment and, just like any stock portfolio, you don’t want to put too many of your eggs in the same basket. That is a mistake that Canada has been making for too long.

Unfortunately, the US basket is doomed to drop.

[Via http://financegrain.wordpress.com]

Oil Shortage, Price Spikes Ahead: Gov't Scientist

A North Sea oil rig in stormy waters. Pic by Terry Cavner

I’ve harped on about peak oil here before on countless occasions, so I won’t rehash all the arguments about inability of market forces to provide a self-correcting mechanism to supply shortages etc.

But it’s good to note that more and more people seem to be becoming aware that we are in deep shit when it comes to oil reserves. First it was just the doom-mongers, then it was the head of commodities at Merril Lynch, now it’s former government chief scientist Sir David King.

As the Telegraph reports, King has helpfully pointed out to the tin-eared, leaden-booted twats who make policy in the UK that the world’s oil reserves have been exaggerated by the International Energy Agency (IEA) by up to a third and that shortages and price spikes are just around the corner.

The IEA functions through fees that are paid into it by member companies and has to keep its clients happy,” he said. “We’re not operating under that basis. This is objective analysis. We’re not sitting on any oil fields. It’s critically important that reserves have been overstated, and if you take this into account, we’re talking supply not meeting demand in 2014-2015.”

Sir David said he was “very concerned” that Western governments were not taking the concept of “peak oil” – where demand outstrips production – seriously enough, while China is throwing all its efforts into grabbing as many energy resources as possible.

Yes. The credit crunch is going to look like a walk in the park. Bear in mind that 2014 is just 48 months away.  Within the next decade we’re going to have to adapt to some pretty significant changes in lifestyle, whether we like it or not, I’d say. Read more at the Oil Drum.

[Via http://jamblichus.wordpress.com]

Deanne Goes to LA Part 2

On our way home finally and spoke to a couple who were on their way to Sydney. They were from Seattle and this is their first trip to Australia – great incentive at the moment as the dollar is holding up well.  They commented that their market is still terrible.  Tax rebates have helped the economy $8,000 for 1st homebuyers,  $6,500 for 2nd+. Around Seattle employment growth in the technology industry helped with the market and they do see a few signs of recovery, but the tell tale signs will be in May when the government tax incentives expire.

From what I have read and heard, 2010 seems to be the “Year of Recovery” for the real estate industry in America. Some industry facts of interest…

Characteristics of homes purchased

The median price of homes purchased in 2009 was

• $210,000 in the Northeast
• $158,000 in the Midwest
• $175,000 in the South, and
• $240,000 in the West

The typical home purchased was 1,800 sq ft in size and was built in 1991.

When considering the purchase of a home, commuting costs were considered important by 78% of buyers.

Characteristics of Home Buyers

The 2008 median household income of buyers was $73,100.  The median income was $61,600 among first homebuyers and $88,100 among repeat buyers.

The typical 1st homebuyer was 30 years old, while the typical repeat buyer was 48 years old.  47% of recent homebuyers were 1st homebuyers.

The Home Search Process

9 out of 10 homebuyers used the internet to search for homes

Real estate agents were viewed as a very useful information source by 81% of buyers who used an agent while searching for a home.

The typical homebuyer searched for 12 weeks and viewed 12 homes.

Home Buying and Real Estate Professionals

77% of buyers purchased their home through a real estate agent or broker

10% of buyers purchased a home in foreclosure (up from 3% in 2008).

 

Nearly Home

Survived the 15 hour plane flight home – there was a big sign as we got out of duty free stating that Border Security was being filmed. We did not make a cameo appearance thank goodness!

How lucky are we living in this country. We all whinge and whine about our government, and the state of the economy etc but after our first visit to the States, we have so much to appreciate what we have here…

Real estate in America is a mixed bag and their degree of challenges vary from state to state, but they are looking at signs of recovery.  I did hear that property management is nearly non-existent and people have been warned not to buy investment property if you do not live in the area as a lot of properties get trashed and have high rental arrears.  I would like to know more about this, and am looking to stay in contact with the people I met at the Convention and see if I can get a better insight into what happens with property management in America.

Although I am slightly disappointed not to have learnt any new technologies or real estate practices in many respects that is a positive thing.  I am now even more aware of how lucky First National members are – the tools that are available to us through the network are literally the best in the world.

Even though we are on opposite sides of the world, real estate services have the same fundamentals. How can we help our clients with their biggest transaction – how to assist them from moving from point a to point b. We become part of their lives so we need to concentrate on making their move a positive experience. We need to solve their housing needs. The Americans and Australians may have access to slightly different tools and have slight different methods to help facilitate this process but the person to person contact is the most important and needs not to be different from country to country – a ‘client for life’ is what we agents need to focus on.

I really appreciate the opportunity given to me by First National to be part of the Prudential Conference; it is something I will remember for years to come.

I will be using the next week or so to decipher notes, read and sort the newspapers and real estate magazines I collected, start putting into place my blog, become more involved in social media in a business sense, send a hello by email to the people I collected business cards from at the conference and analyse different ways we can make our client experience with our company more positive. The next thing for me to look forward to is the upcoming Property Management Conference in Sydney at the end of the month and of course our own National Convention in Alice Springs in May…bring them on!

[Via http://burnierealestateblog.com.au]

Psalm 2010

A fellow patriot posted this on one of the Facebook pages we administer and we received permission to pass it along. Enjoy!

Psalm 2010

PSALM 2010

Obama is the shepherd I did not want.

He leadeth me beside the still factories.

He restoreth my faith in the Republican party.

He guideth me in the path of unemployment for his party’s sake.

Yea, though I walk through the valley of the bread line,

I shall fear no hunger, for his bailouts are with me.

He has anointed my income with taxes,

My expenses runneth over.

Surely, poverty and hard living will follow me all the days of my life,

And I will live in a mortgaged home forever.

I am glad I am American,

I am glad that I am free.

But I wish I was a dog …..

And Obama was a tree.

[Via http://americayouaskedforit.wordpress.com]

UK must invest its way out of recession

By Michael Burke on Comment is Free

Britain’s deepest recession since the second world war has produced a highly distorted economy. So it is perhaps inevitable that there has been an extremely distorted debate about the how to deal with the consequences of it. Or at least one of the consequences, since the entire debate is focused on just one symptom of the crisis – the public sector deficit.

The economic distortion arises from the fact that the recession has been an investment-led slump. The British economy has contracted by £80bn and the majority of that has been a decline in investment, down £46bn. Individuals’ incomes and their spending patterns have been badly hit, but the 3.6% fall in consumption is completely overshadowed by the 19.3% fall in investment. Unless that lost investment is restored there will be a permanent lowering of the economy’s growth rate and a permanent loss to competitiveness.

The distortion to the economic debate is the fallacy that the deficit is not related to the decline in activity; that it is somehow a consequence of Gordon Brown’s reckless spending, or even a collective punishment for profligacy. Nothing could be further from the truth. Without a recession, a continued steady growth of taxation revenues on their long-run trend would have produced tax receipts this year £114bn higher than the Treasury currently expects – of a total current deficit of £128bn. Just asplunging investment is the driver of the recession, so falling taxes are responsible for the widening deficit. An economic policy aimed at boosting investment would not only revive the economy, it would also help to close the deficit.

Read the full article here…

[Via http://thefriendlylefty.wordpress.com]

Influencers Hidden Secrets

 

The circle of influencers and their success by manipulation is getting old.  Reality is not even real anymore.  You have reality TV hoes and camcorder freaks, by staying in front of a camera for publicity.  There is not too much a person will not do in Hollywood, but it gets deeper.

 

People think real gangsters are a bunch of fly dressing showboats; nothing is further from the truth.  Companies like All-Good Entertainment, Clear Channel Communications and Live Nation, as well as Microsoft and Goggle are influencers.

 

Entertainment especially the record industry tends to get young kids to mold into stars.  They make them into antisocial figures and screw people up.  I mean take Michael Jackson and Lil Wayne both were normal looking people, and then they went crazy as one turned white and the other turned into a walking billboard to include facial paintings.  They made mega star status in return for self destruction.  And will be good for nothing once there careers ended, because a fast food restaurant would mess with them.  So knowing there limited abilities they keep people out of the game?  No it is not them but the freak creators Dr. Frankenstein. 

 

Then as a result they create demands for services.  People are buying tattoos like madness, because Hollywood condoned it and promoted it.  Meanwhile these kids think they are cool because they are getting paid, tattoos and all to include pants falling off their behinds, something symbolic of the prison institutionalized mentality.

 

The bottom line is this it does not always require talents to be successful in the corrupt Gay Mobbed up Hollywood; you just have to welling to fuck yourself up and by a pig and whore.  Hollywood is a bunch of slaves working for publicity and attention meaning fame.  Sure they are millionaires but the costs of living is outrageous for them to include stratospherically high security costs and if you do not pay for the protection the system does you like Lil Wayne and Michael Jackson and those people who you did not hire uses their influence to put you in jail or destroy your reputation or even put you to sleep.

 

Bottom line:  In Hollywood you pay to play, and have to surrender the wealth or it is taken from you.  It is the ones behind the scenes getting paid, these people we see often are victims of the system that recruited them before they were mature enough to make wise business decisions and they seem to always be trying to keep up and make the next hit record.  The case of Childhood stars!

[Via http://frankpaulgambino.wordpress.com]

Billionaire Invests In Custom Vitamins: How To Join This Ideal Wealth Business Opportunity Of A Lifetime

The new Trump Network marketing company, formerly known as Ideal Health is becoming one of the most talked about products and opportunities ever. The company offers nutritional supplements and is promising to make MLM history and finally bring the long deserved recognition to the network marketing industry. You can either become a customer, a home based business with the network opportunity or both!

The previous company is a 12 year old company that has been recently purchased and partnered with the celebrity himself. The previous network marketing has been an innovator in the vitamin and supplement industry by offering customized vitamins. Each custom vitamin is created just for you based on a simple, yet complete in-home urinalysis test. The custom vitamins can be found at the Ideal Health online store as…. Custom Essentials.

Ordering Trump network vitamins are simple and easy. First, you will purchase a test. This test is created by you taking a simple, in-home urinalysis test. The test is then sent by Fed Ex to the lab and is analyzed by the scientists there to determine the custom vitamin formula for you. It’s really remarkable a great way to obtain optimum health. Over the counter medications are formulated for the masses, while Customized Vitamins are unique just for you!

Now you’re probably thinking that custom vitamins must cost a fortune. At one time this was a service just for the very few elite individuals, hence the celebrity. However, until now you can get network vitamins, a custom vitamin for about $2 dollars a day! That’s a great value when you think about a convenient store beverage, bottled water or cup of coffee costs the same or more.

Contact Dr. Mac’s Apprentice by filing out the short form at:

www.IdealWealthAcademy.com

[Via http://drmacsapprentice.wordpress.com]