L E T   'E R     R I P !!!!!!

The following paragraphs are taken from an article titled “The Age of Prosperity is Over”. This article was posted on the Wall Street Journal web site on Oct. 27, 2008. The article was written by Arthur B. Laffer.

“When markets are free, asset values are supposed to go up and down, and competition opens up opportunities for profits and losses. Profits and stock appreciation are not rights, but rewards for insight mixed with a willingness to take risk. People who buy homes and the banks who give them mortgages are no different, in principle, than investors in the stock market, commodity speculators or shop owners. Good decisions should be rewarded and bad decisions should be punished. The market does just that with its profits and losses.

No one likes to see people lose their homes when housing prices fall and they can’t afford to pay their mortgages; nor does any one of us enjoy watching banks go belly-up for making subprime loans without enough equity. But the taxpayers had nothing to do with either side of the mortgage transaction. If the house’s value had appreciated, believe you me the overleveraged homeowner and the overly aggressive bank would never have shared their gain with taxpayers. Housing price declines and their consequences are signals to the market to stop building so many houses, pure and simple.

But here’s the rub. Now enter the government and the prospects of a kinder and gentler economy. To alleviate the obvious hardships to both homeowners and banks, the government commits to buy mortgages and inject capital into banks, which on the face of it seems like a very nice thing to do. But unfortunately in this world there is no tooth fairy. And the government doesn’t create anything; it just redistributes. Whenever the government bails someone out of trouble, they always put someone into trouble, plus of course a toll for the troll. Every $100 billion in bailout requires at least $130 billion in taxes, where the $30 billion extra is the cost of getting government involved.”

The following is the link to the article”

http://online.wsj.com/article/SB122506830024970697.html?mod=special_page_campaign2008_mostpop

I would to see even lower gas prices in this town like the rest of the Country are enjoying,not just go down a bit then freeze at one price for weeks on end.

http://www.gasbuddy.com/

Prince George - all gas stations advertise the same: $ 108.9

Purely coincidental, of course.

how come downtown Vancouver $110.08. Yale is $106.08 don't they have transit tax.This was on Monday.

$84.00 cents a litre in some parts of Ontario ...wow.

of course it is $0.84 in Ontario, that is where our federal government seat is.
If the petro companies priced gas there as in the rest of the country, our appointed leader would more easily be able to see the gauging and would not be able to deny the fact that we a getting screwed by these petro companies.

The instigators of the global meltdown were not politicians but those who control global financial manipulations.

Politicians are not smart enough to pull off something like that and they always come and go.

The financial gurus are neither elected nor are they accountable to the public.

Politicians are mere mortals compared to them.

I have just received a letter from Co-op insurance stating my premiums will go up on my variable premium whole life insurance policy. The increase is a whopping 58%. This would lead me to believe Co-op has made some very poor investment choices and now is trying to recoup lost funds on the back of policy holders. Insurance companies such as Manulife, Sunlife, Co-op,etc have been hard hit with the fall of values in the equity markets and are now under funded to meet their obligations. A quick look at the value of these companies on the TSX will confirm these new values.

On the subject of the municipal election it seems every candidate wants to refurbish the downtown area and develop residential living facilities. I have yet to see anyone who is running for city council come forward to state they want to be first in line to purchase living quarters downtown.
It seems when it comes to civic issues our present councillors wear the hat of enviromentalists, they just want to recycle the same old issues. Their real concerns should be to fix the roads, keep tax increases to an absolute minimum, and just maybe listen to the tax paying citizens of the city for a change rather than the self-interest groups.

The whole insurance industry is legalized racketeering anyway. Premiums will go up according to the market and also on whether or not you have submitted a claim. Even if you have no responsibility for the claim, your premiums will go up until the company recoups its losses.

Gateway seniors complex we have to find an owner-operator. What is going on here ?? Is this a seniors complex or is there more to it??opportunity to expand??Its already full?? The first thing that comes to my mind is Riverview. I do not trust Northern Health.

Any ideas what caused this worldwide financial mess ?

Any ideas why they call Greed one of the 7 deadly sins ?

Ever play Monopoly ? How does the game always end ?

What caused the worldwide financial mess is that total collective incomes distributed will not fully amortize total collective costs allocated into prices in any same given fiscal period.

Wrong Socred, Greed is the only cause of this whole mess. Rich greedy people.

The cause of the world financial problems was the private US Federal Reserve facilitating fraud on the real economy for private profit with tax payer backed guarantees.

The only thing that will fix the world economy in the long run is a quick deep recession (capitalism at work) without any bailouts for the large banks that enabled the over leveraged casino economy to exist. The laws of free enterprise need to be respected by the banksters and not manipulated to meet their false profit needs.

The whole world should be calling for an end to the privately controlled for profit US Federal Reserve bank and its control of the money supply and market regulations for the financial sector.

America IMO needs to nationalize its currency (not the banks) to take the greed motivation out of the banking system and allow for a true free enterprise system to replace the corpocracy we have now.

Time will tell.

Socred you are confusing the symptom with the problem.

In simple terms the cause of the global financial crisis is the world stock markets.
These are manipulated by a few key players to produce a profit for themselves. These key players allow others to gain a profit as a side benefit for the appearance of making a sound decision.a
The markets a manipulated by press release of "Corporate News" that encourages people to invest in said companies.
The markets are further artificially manipulated by automated system for buying and selling large blocks of stocks under programmed conditions, the traders on the floor really are not as numerous as they wold be without these computers.
The result of this is an artificial economy compounded by the corporate world not just encouraging but insisting that private citizens and commercial consumers live beyond their income through credit. This lead to escalating real estate prices and more people tried to make a buck by house flipping, dumb idea for most individuals.
Finally the markets could not sustain this environment and reacted with a major contraction.

You can look up all the numbers and stats that you want, but the simple explanation is as I described it.

Dow Jones up 14.5% since the low this past monday...is the market trying to tell us something?

yeah they are, the markets are dynamic and will not be controlled by the few. And that no matter the outlook, someone is always trying to reap a profit.

Dont we all want to make profit? I don't seem to know anyone that likes to lose

I heard that the cause was gambling. Bets were placed on which mortgages would fail. Huge profits were realized from this cross betting.
Greed at its' worst.

The following quote is from an article which was posted on the Web of Debt internet site. The article was written by Ellen Brown.

"All the king’s men cannot put the private banking system together again, for the simple reason that it is a Ponzi scheme that has reached its mathematical limits.
A Ponzi scheme is a form of pyramid scheme in which new investors must continually be sucked in at the bottom to support the investors at the top. In this case, new borrowers must continually be sucked in to support the creditors at the top. The Wall Street Ponzi scheme is built on “fractional reserve” lending, which allows banks to create “credit” (or “debt”) with accounting entries. Banks are now allowed to lend from 10 to 30 times their “reserves,” essentially counterfeiting the money they lend. Over 97 percent of the U.S. money supply (M3) has been created by banks in this way.5 The problem is that banks create only the principal and not the interest necessary to pay back their loans. Since bank lending is essentially the only source of new money in the system, someone somewhere must continually be taking out new loans just to create enough “money” (or “credit”) to service the old loans composing the money supply. This spiraling interest problem and the need to find new debtors has gone on for over 300 years -- ever since the founding of the Bank of England in 1694 – until the whole world has now become mired in debt to the bankers’ private money monopoly."

The followng is the link to the article:

http://www.webofdebt.com/articles/modest_proposal.php

I was hoping to see more comments about our civic election.
I've decided to vote for anyone who isn't an incumbent. We don't need more of the same old, same old, or any potential feeders at the trough.
We're in for some very tough economic times; we need some fresh ideas and some workable solutions. No more pie in the sky junkets to China or Portland. And most of all no more bailing out symphony orchestras or other such special interest projects on the municpal tax dollar. Vancouver's symphony orchestra is always struggling. What is a city the size of P.G. doing bailing out a symphony orchestra?

P.S. I'm also all for Harper cutting the "cultural" funding. Those are our dollars. If we want to invest in culture, let it be our choice. Not our tax dollars.

Anyone notice that the last home game of the Cougers attracted 2288 fans. If you subtract the number of seats paid for by corporations who buy tickets but do not attend games you would probably end up with around 2000 fans. This is the hard core fans in the town, however there are not enough of them to support a WHL team. The owners of the Cougers stated last year that they needed 3000 fans per game to stay in business. Is this year the end of the Cougers and the WHL in Prince George???


Has anyone noticed that the Northern Sports Centre is totally under utilized. At any given day you wont find more than 20 or 30 people using this facility. (Mostly female UNBC students). At this rate this facility will become a drain on the resources of the City and UNBC who at present are each committed to funding of $300,000.00 per year. The facility itself was to generate an additional $400,000.00 in revenue to cover the $1 million annual cost of running this centre.

Where are all the people in Prince George who supported the building of this centre? Where are all the politicians, contractors, and business people who supported the building of this centre. They are conspicous by their absence. Is it possible they were only interested in the actual construction where they could make money, or get political mileage, but when it comes down to actual support they are not interested.

In the last year I have not seen any of these dudes using this facility on a regular basis. The only politician I have seen at the centre was Ralph Klein from Alberta who was taking a tour.

Are our Politicians, Contractors, Business people who supported this venture to cheap to buy a membership and support it.?? You bet they are.

Gee, we worked so hard for our symphony orchestra. We lined up pennies all along third and George and it was just so great to buy our Grand Piano and hear our first symphony. We had been through depression and hard times and we paid our taxes and lived in even once sixty below zero, the symphony orchestra was a a wondrous thing to us. It was a breath of Spring. I just wish newcomers would appreciate the work we old timers have done.

No, Eagle, I'm not "confusing the symptom with the problem", at all.

The 'problem' is the current financial system is not fully 'self-liquidating'in each successive cycle of production/consumption.

What others have identified as the 'problem', including 'greed', are 'symptoms' or effects of it.

In the overall economy the rate that total costs are impressed into prices at the point of final retail exceeds the rate at which total consumer incomes are generated in the same time period. Incomes that will have to meet those prices if businesses are to maintain a rate of profit adequate to fully amortize loans. The basic cause of this is ongoing 'labour displacement'in a multitude of different forms ~ i.e., mechanization, automation, an increasingly lengthening and broadening of the whole structure of production through multiple divisions of labour, outsourcing jobs to 'cheaper' wage countries, etc., etc.

The 'gap' between 'prices' and 'incomes' is currently made up by an increase in debt. Which is why unrepayable overall debt continues to grow apace in our economy, and those of other countries as well.

Has anyone given any thought to what happens to our ecological bank account when we finally find out that we have been overspending the earth's resources. Unlike the man-made financial system which we can eventually reconfigure, as we have done so often throughout history, that will be much more difficult to do with the physical, natural systems of this planet of ours.

Lamb, I totally respect your efforts and your opinion. And I am very respectful of the efforts of the people that built this country, province and our city of Prince George.
My protest is, $200,000 of our municipal tax dollars went to bail out an orchestra. That doesn't make sense in the tax base we have in P.G. The point I was trying to make is.....a city the size of Vancouver can't support (user pay) a symphony orchestra. If the people of P.G. want it, they will attend, if they don't, they won't attend and unfortunately it deserves to fold just like any other business in town.

I haven't seen our present city council trying to clean all the spit and filth off the sidewalks downtown. $200,000 would have gone a long way to clean that up.

We have some wonderful and unique shops downtown. The sidewalks are disgusting.
And I enjoy looking at the old architecture. We're losing it.

Like I said above this was caused by rich greedy people.

Charles, Ellen Brown should stick to her legal practice and writing books about women's issues. Her "Web of Debt" book and website are full of errors and monetary myths. Ones that could easily be debunked by anyone with some basic knowledge of how the 'accounting' behind the 'money' and 'banking' systems REALLY works.

When she makes an utterly inane statement like this one above:- "The problem is that banks create only the principal and not the interest necessary to pay back their loans.", she is displaying an almost total ignorance of financial processes.

In any modern money system LOANS (and the Purchase of Securities by a Bank) CREATE Bank DEPOSITS. The repayment of those LOANS (or Sale of Securities) CANCELS those DEPOSITS. The system is entirely 'creditary'. It is based on contracts for future performance.

The Bank DOES indeed create the "interest" when it creates the "principal", for if the Banker can create money to lend to other firms and consumers, it can (and does) also create money for itself.

Which is spent into circulation to pay the Bank's costs of providing banking services, i.e. for wages and salaries of the Bank's employees, plus all the other costs it incurs, BEFORE any of those expenses have been offset by the interest income it will receive. It is all "bookkeeping", and NOT a "Ponzi scheme" whatsoever, but a very vital process without which we'd still be mired in a Medieval world, (as can be seen in those countries which never developed the principles of double-entry accounting on which modern financial processes are based.)

"Like I said above this was caused by rich greedy people."

Lets say they took advantage of the 'flaws' in the system because we, and those we elect who'd lead us, are too ignorant or too stupid to try and understand and correct them. Ultimately, it's more an urge to gain 'power' (over others) than it is to accumulate 'money'.

Socredible.

In your post you state "The 'gap' between 'prices' and 'incomes' is currently made up by an increase in debt. Which is why unrepayable overall debt continues to grow apace in our economy, and those of other countries as well."

It seems to me the world's problems with too much debt is getting worse as time goes by. How long can we (in the words of hedge fund manager Julian Robertson) continue to solve our problems of ever increasing debt by utilizing the strategy of "ease, ease, ease; cut, cut, cut; print, print, print", before our luck runs out and we have the big one.

The following is the link to the quote I have provided:

http://moneynews.newsmax.com/streettalk/julian_robertson/2008/10/14/140359.html

If you do not see this post in time to reply to it, I would appreciate your reply on next Friday's Free For All.

gus, we 'overspend' the Earth's resources to try to make a failed financial system work. Physically the 'costs' of all production are fully met as that production occurs. Or it couldn't occur. That is what should be, but currently is NOT, fully reflected 'financially'. We continually have to mortgage tomorrow's incomes to pay for yesterday's production at today's prices.

Charles, there would be no problem with unlimited 'debt', (which is merely a very useful 'financial tool' that has enabled us to obtain things in our lifetimes that would otherwise have been largely unobtainable), if that debt, (in an overall, or macro-economic sense), always relates to the ongoing physical realities of production and consumption.


This is not at all difficult to make it do. It merely involves a technique of 'credit' applied macro-economically, and based on the facts, as near as they can be determined, of the total amount of difference between overall 'capital appreciation' and overall 'capital depreciation' in any same fiscal time period.

If 'Capital appreciation ' is larger, which is normally the case, 'credit', properly applied, can then be used to lower retail prices below financial cost without involving producers or merchants in a loss.

Which is the reverse of the way we've been trying to use it, where new issues of credit (an increase in the volume of loans), raises prices, and leads to just what the financial guru you quote above is talking about. Fundamentally, 'inflation' rather than 'prosperity'. And 'debt' that grows exponentially over time, and can never be reduced without serious consequences.

I don't personally think the real danger lies in any coming "big one" ala 1929. Rather the real danger is the concentration of the already existing 'monopoly of credit' into still fewer hands, (it is a 'monopoly' because 'banking' itself is what is called a "natural monopoly" ~ we want the 'credit' issued by any one bank to be fully fungible at every other bank, and in the community at large, and that takes a lot of organization and co-operation).

This presently and unfortunately leads to the centralization of POLICY concerning all credit issue and withdrawal into the hands of those ADMINISTERING the system. And further removes the ability to modify that POLICY from the hands of each of us, as individuals, or in free association with one another.

So what you are really trying to say is that we are not an operationally profitable society on the aggregate, and rather our profits are merely a result of accounting trickery to create the false appearance of profitability through such things as advanced amortization and subsidizing income loss statements by negligent methods of full costing expenses like neglecting legitimate maintenance and on-going investments that keep a company innovative and efficient in the long run. Short term profits at the expense of long term accounting obligations and operational viability. False valuations are then arrived at that fuel over leveraged speculation by everyone relying on the accounting methods used from the stock buyers and sellers, to the bank lenders, to the company managers who actually think they earned their profit bonuses.

IMO over the long range that is where free markets are supposed to ensure true value in the markets ability to correct over the long run. Problem is that can sometimes take decades to play itself out. Regulators are needed to ensure fair accounting play in the short term (3-5 years), but the taxation system works against the regulators by providing the incentive for fraudulent accounting.

So I can see how a mirage of value can be created that never really was and thus is a source of short term overproduction, but that is not the problem with todays markets.

The problem with todays markets have nothing to do with loans (victims in many cases) or overproduction in the real economy... and only a banker will tell you that because the banker wants to blame it on anyone but his fellow bankers.

The problem with the markets today is a problem of risk. The people taking large risks for large profits were doing so with false and misleading valuations as a basis of their decisions... and speculated with as many as $30 dollars for every dollar of their own based on the certainty of their false valuations that were provided by their computer models... of which they were mostly working on erroneous data inputs conjured up by computer geeks that had dreams of a perfect ever expanding keynesian market. The risk takers then armed with their computer models entered into private contracts called derivative for the most part where they placed their bets in a ponzi scheme of self fulfilling money creation as trillions of dollars moved markets through black holes of private transactions all working nicely according to the ponzi scheme computer modeling. The only thing stopping them was when they reached the limits of global financial capacity to leverage further speculation fueled by new cheep low cost subsidized growth via federal reserve debt and the ability of the real economy to continue to service that debt.

If derivative trading was banned tomorrow and all outstanding contracts were made null and void the world would still turn, the real economy would hardly notice any financial induced trauma, and the financial crisis would be over for everyone other than the banksters who created the mess in the first place. Then nationalize the American currency and the world would be on its way to prosperity. Of course JFK was assassinated for signing that policy (nationalized currency) into law... which was never enacted upon his death.

ICBC was playing the hedging game big time. It will be interesting to see how much our insurance rates now go up in the next few months? Also what about the government pension funds? Eeek they just got a huge raise that will have to be funded....