Great to hear from you and thank you for sharing!

In the absence of the credit crisis we are weathering right now, I would agree with you on everything except the War on Terror (Al Qaeda needs to be wiped out, Nato & America were justified going into Afghanistan, Iraq was wrong and a mistake)

I also agree with your expectation of inflation. But I expect it because I think stimulus will be successful and central bankers and ESPECIALLY elected politicians will find it very difficult to wean themselves off the drug of government spending.

Tarp is not necessarily about creating jobs but about bailing out Wall Street. Its being sold as a solution for Main St and indirectly it is and it will create jobs once the credit crisis is fixed/subsides.

I agree with you about the 75-85 cycle returning and I will be posting a video on inflation.

I totally agree with your last point. Inflation makes bricks and mortar attractive because its a tangible asset that will see its price rise with inflation while the real value of the fixed mortgage on that property will be eroded by inflation. Inflation is coming and it will be good for Real Estate.

Thanks again for your thoughts and I will be commenting on your blog soon!

I believe in freedom and markets, in low taxes and even less government, but I’m fine with a strong defense and an aggressive War on Terror too.

On real estate I would propose that cutting corporate income taxes, reducing the time it takes to build job creating new businesses by rolling back regulations, balancing the federal and state budgets so they borrow a whole lot less … would all be better than borrowing $800 billion (actually more if you count the TARP funds). I’d say less than half of that money will find it’s way to job creation, and if most of those jobs are union then even less jobs will be created than the market would on it’s own. That’s a sad waste of effort and long term the debt will be a disaster.

As I said on the radio and on twitter today, I expect inflation now, just as housing was beginning to recover and get it’s legs … the inflation cycle of 1975-1985 back again. Increased taxes, increased borrowing, talk of more freebies from gov’t and you get inflation. I hadn’t even though of your point on Chinese manufacturing and inflationary pressures, good point.

I am telling all my mortgage and real estate clients that they will never see an affordable time like this. Low prices, low rates, sellers nervous to sell, home builders willing to pay for everything. Buy now or hold your tongue when things get rocky in year ahead.

Good to hear from you.

Thank you for taking the time to comment.

Please feel free to disagree with my ideas.

I agree with you about the nature of Canada’s economy, but what we are dealing is a banking crisis that effects every other sector in any country that relies on US credit markets for financing including all the sectors you mention.

If a consumer of our products cannot get financing or has to pay exorbitant rates to finance our products, what happens to our economy?

Our trade numbers go from the continuous surpluses of the good times to trade deficits today. As they mention in the article Canada is being hit by a collapse in global trade brought on by the financial crisis.

I don’t think Canada’s stimulus package was brought in to ape the US. Our leaders saw a clear and present danger in our economy and acted (Not as swiftly as I would have liked).

What would have been a better course of action for Canada in the financial crisis, aside from a stimulus package?

I look forward to hearing your thoughts.

Thanks!

Just a Realtor!?

Appreciated the reply! I, also, am not a Ron Paul supporter nor am I a republican or conservative (whichever side of the border you might be on). I only posted his video as he touches on issues that Canada shares and has shared in the past.

We are a manufacturing country, strongly tied to production & commodities/service much like our big brother. We are not the states but we are definitely not independent in economic nor political ideologies. Do we strongly support and emulate any and all proposals the States put in motion? Of course not, but I think that an intense stimulus will not increase spending nor will it boost confidence. What might? Who knows? Definitely not spending ourselves into deficit in hopes to drum up “confidence”.

I’m very interested in getting into the BC realty industry and though I might not agree with everything you post, it’s a great resource & I will be avidly listening.

** I AM NOT A RON PAUL OR A REPUBLICAN SUPPORTER **

I posted the video of Ron Paul so readers would be able to see what Konstantin wanted share easily

Great to hear from you and I appreciate your input.

Thanks for the compliment about my “prestige and name”, but I am just a Realtor.

I don’t think anyone can guarantee the stimulus package will be successful, but I think the action being taken by governments is the right thing to do for two reasons.

1) Confidence – Action on the part of the authorities to calm the markets is also important to maintain public confidence in the financial system. The problems we are facing in Canada are caused by confidence. We never had a dub-prime crisis here. We are not having the same issues the US is and has had.

2) Demand and the lack thereof – In many economies, private sector demand has completely collapsed. Serious deflation which could lead to a Depression is a real risk. Governments have to step in these situations to ensure there is sufficient demand in their respective economies.

What do you propose we do instead of stimulus?

(I embedded your video so it would be more accessible)

Thanks!

Sorry it took me a while to respond!

I think the situation is tough in Canada and dire in the US and I think the stimulus packages we are seeing are necessary.

Its a dynamic situation and particularly in the US, deflation is a risk with horrible consequences. The best way to reflate an economy is with interest rate cuts and increased government spending.

We are dealing with a lack of demand in the economy and if the government doesn’t step in, who will?

The potential for moral hazard by rewarding bad behaviour is huge.

The Big 3 – I am into domestic cars (yes, its more of a fetish as they have been producing a lot of crap in the last 20+ years) and support the domestic auto industry.

It worries me that gov’ts in North America are just delaying an inevitable bankruptcy of one of them and wasting our money in doing so. If GM and Chrysler needed a a bail out 2-3 years ago I would have let Chrysler fail, but we are in an unprecedented economic crisis and now is not the time to add to unemployment in the Rust Belt.

If one of these companies comes hat in hand in a few years time, I say let ‘em fail. Right now is not the time.

Wall Street/US Financial Industry – The main failing there was inappropriate or just and out and out lack of regulation. US policy makers have been irresponsible for far too long in their oversight of Wall Street and the financial sector.

If one looks at Canada, we have not had the same issues as the USwith sub-prime mortgages and instability in the banking sector because we have had a history of staid and sober banking regulation that was derided as boring and hide-bound by some.

I think the bailout is the right thing to do, but it has to be provided with a return to responsible regulation. Thank god the US finally has intelligent and pragmatic leadership to keep Wall Street and others in line.

What are your thoughts Robert?