BoC warns of possible mass home foreclosures

[August1991]

You think? It sent the market down after it was released.

...

I guess we get all the good news from Flaherty so it is sometimes interesting to hear a more independent source.

God knows what makes this market move. These are particularly volatile times.

I just think that the Bank of Canada should be careful in such times in what it publishes. People who normally don't pay attention are now examining the Bank's announcements, and for some reason, they are looking for bad news.

No doubt that Flaherty wants to blame Goodale and the Liberals for the bad news. It just seems to me that people prefer to make a doom-and-gloom prediction as a way to hedge their bets. If false, everyone will be happy and forget the prediction. If true, the predictor will seem prescient.

I found this quote about UK data:

Today's figures also reveal that the number of mortgages three months or more in arrears has risen by 29 per cent year on year to 155,600 at the end of the first half.

This is equivalent to 1.33 per cent of all home loans, although the number of mortgages more than six months in arrears was 0.58 per cent of all loans.

Indpendent 8 Aug 2008

On a per outstanding mortgage basis, Canada's three month arrear rate (0.26 per cent) is about one fifth the UK rate.

I hear they are rioting in the streets in Greece but not yet the UK. In Canada, we have a way to go before the proletariat revolts.

IOW, the Bank of Canada issued a report that considered various scenarios, including one "worst-case" scenario. CTV chose to run with that worst-case scenario and make a headline of it.

Edited December 12, 2008 by August1991

[jdobbin]

God knows what makes this market move. These are particularly volatile times.

You've got that right.

I just think that the Bank of Canada should be careful in such times in what it publishes. People who normally don't pay attention are now examining the Bank's announcements, and for some reason, they are looking for bad news.

If the Bank is going to blow sunshine, it won't help its credibility when making monetary announcements. It dropped its rate for a reason. Best to explain that reason, I think.

No doubt that Flaherty wants to blame Goodale and the Liberals for the bad news. It just seems to me that people prefer to make a doom-and-gloom prediction as a way to hedge their bets. If false, everyone will be happy and forget the prediction. If true, the predictor will seem prescient.

It seems the Bank was making a number of forecasts. Some the forecasts were for a possibility that is best to be honest about. What you call doom and gloom is actually realism.

IOW, the Bank of Canada issued a report that considered various scenarios, including one "worst-case" scenario. CTV chose to run with that worst-case scenario and make a headline of it.

I think CTV said that right up front.

[Jack Weber]

Not a single word in the BofC update on the major chartered banks refusal - for the second time - to pass on to consumers the full amount of the central bank's interest rate reduction. How are homeowners to cope with variable mortgages if their banks keep a huge portion of interest reductions as increased profits? All this while the banks continue userous 20% rates on credit card balances.

This BofC update simply confirms it's usual function: pouring coffee for the Bankers Association.

It might help if we had a House of Commons that was actually sitting during an economic crisis.If the Prime Minister would hold the Big 6's feet to the fire and drop interest rates instead of appointing 18 Tory hacks to the Senate,that could help..Maybe?

And While he's at it,maybe Sweatervest Stevie could get the credit card companies(see the same banks) to drop some of the usurious interest rates,as well...

[M.Dancer]

All this while the banks continue userous 20% rates on credit card balances.

No one forces the customer to use a 20% credit card..our scotiabank mastercard just went up...to 8.75%

[M.Dancer]

I don't understand what you are trying to show here. This shows the instability of money as the money inflates and deflates.

No, it shows gold. Money is a very ambigous term. Gold is not.

[Huston]

No, it shows gold. Money is a very ambigous term. Gold is not.

I know it shows gold. BUT, here is the point that you are missing, it is being compared with MONEY! Peter Schiff, Ron Paul, Max Keiser, and the Austrian economists know this. Are they wrong?

[Oleg Bach]

Gold is pretty and maluable. It reflects the life force of light - as does diamond..but you can't eat them. - If B C wishes to survive they will provide free rent and create a jubaliee of forgiveness of debt. The Jews every 50 years would forgive the debts of all and grant a new start..ancient but smart. These measures are temporary but must be fulfilled. For the banks to forclose is the destruction of the client and the bank - there is no logic in that scenario.

[Oleg Bach]

Gold is pretty and maluable. It reflects the life force of light - as does diamond..but you can't eat them. - If B C wishes to survive they will provide free rent and create a jubaliee of forgiveness of debt. The Jews every 50 years would forgive the debts of all and grant a new start..ancient but smart. These measures are temporary but must be fulfilled. For the banks to forclose is the destruction of the client and the bank - there is no logic in that scenario.

[blueblood]

Gold is pretty and maluable. It reflects the life force of light - as does diamond..but you can't eat them. - If B C wishes to survive they will provide free rent and create a jubaliee of forgiveness of debt. The Jews every 50 years would forgive the debts of all and grant a new start..ancient but smart. These measures are temporary but must be fulfilled. For the banks to forclose is the destruction of the client and the bank - there is no logic in that scenario.

There are no logic in your posts.

[Huston]

There are no logic in your posts.

Yeah, they are strawmen.

[Oleg Bach]

There are no logic in your posts.

Why would a province make thousands homeless to wander about and embarrass the province? That is ill-logical. Take care of your people no matter what.

[Huston]

Take care of your people no matter what.

In what exactly do you mean by your people? Such a large community cannot exist socially. It will never will. This archaic sense needs to go... actually it needs to get back to the literal archaic.. small! Families and relationships create society, not the state. Top down will never work. God does not exist and the state's is not divine right, and self-righteousness is a disease of the mind. Reliance on some state cripples charity because it removes the incentives, by making it an impossibility or a passe (oh the state will do it), or more importantly, NO TIME! They are working for or are infleunced by the governments form of charity. Bureaucracy!

[M.Dancer]

I know it shows gold. BUT, here is the point that you are missing, it is being compared with MONEY! Peter Schiff, Ron Paul, Max Keiser, and the Austrian economists know this. Are they wrong?

Ummm...you want it to be compared with chickens? Would they be Canadian chickens Mexican or Germans chickens?

You do realize that there is no imperical money, right? Just like there is no absolute vale of ' chicken" '.

I imagine Ron Paul might not know this, being somewhat kooky.

[Huston]

Ummm...you want it to be compared with chickens? Would they be Canadian chickens Mexican or Germans chickens?

You do realize that there is no imperical money, right? Just like there is no absolute vale of ' chicken" '.

I imagine Ron Paul might not know this, being somewhat kooky.

So you have no argument for the gold price then right? Thought so. How is Ron Paul wrong, Max Keiser, Peter Schiff, Jim Roger, etc? But hey ad hominems are fun!

[M.Dancer]

So you have no argument for the gold price then right?

My explanation for the price of gold is above. (now below)

Gold is a commodity. Supply and demand.

Now if you can somehow explain what "money" is and state what its absoulte value is....

[Huston]

Now if you can somehow explain what "money" is and state what its absoulte value is....

Money has no absolute value, but the laws of supply and demand still apply to into, and that is why it is not a good indicator of how gold is. The fluctuations you indicated with gold are cloudy because money fluctuates a lot more then a steady commodity like gold. gold has always been used as an indicator of moneary inflation or deflation, as gold does neither of them very good or at all.

You have yet to say anything.

[August1991]

Money has no absolute value, but the laws of supply and demand still apply to into, and that is why it is not a good indicator of how gold is. The fluctuations you indicated with gold are cloudy because money fluctuates a lot more then a steady commodity like gold. gold has always been used as an indicator of moneary inflation or deflation, as gold does neither of them very good or at all.

Huston, if we used a gold standard, then the money supply would be a random variable dependant on the ability of people to run around the planet and discover gold deposits. Discovery of a new gold deposit could lead to runaway inflation.

Other than the absurdity (and wastefulness) of people running around looking for a metal buried in the ground, I object to the idea that something as important as the money supply should be determined in such a random fashion.

The modern State is an important institution in making our lives civilized. Live with it.

[Huston]

Huston, if we used a gold standard, then the money supply would be a random variable dependant on the ability of people to run around the planet and discover gold deposits. Discovery of a new gold deposit could lead to runaway inflation.

New gold deposits (not that anyone can do this, as they do not have the means to extract it) do not lead to runaway inflation, although fiat money does. So what, if you are right about gold. When has there ever been runaway inflation with a gold standard? Maybe fiat money based off a gold standard, but that has been manipulated many times.

I object to the idea that something as important as the money supply should be determined in such a random fashion.

Random?

The modern State is an important institution in making our lives civilized. Live with it.

Sure, and constant wars and corruption are civilized.

The modern state causes inflation that cripples the poor, it regulates it in a manner to the detriment of the poor, and is essentially a looter and leecher society in the Ayn Randian fashion, and is happening in case if you haven't notice the massive corruption the the "modern" states have allowed through the financial industry, agricultural industry.. but hey you keep on believing that people are leaving farms because they don't want to work there... oh, maybe it is because it is regulated to benifet big agri-business, which has help starve most of the third world, but hey, having the Iraqi destroy their seeds for big-agri is a good thing right?

[August1991]

New gold deposits (not that anyone can do this, as they do not have the means to extract it) do not lead to runaway inflation, although fiat money does. So what, if you are right about gold. When has there ever been runaway inflation with a gold standard?

Here's one, famous example.

Some link that wonders what happened to the gold discovered in South America and brought to Spain in the 16th century:

Where did it go? The answer has to do with the slippery nature of money. The importation of New World gold into Spain coincided with a corrosive inflation that has come to be known as the "price revolution." Although prices had dropped steadily during the 1400s, after 1500 they began to rise dramatically--300 percent by 1600, according to economist Earl Hamilton, who wrote a well-known book on the phenomenon. The reasons for this are complex, but it seems clear that at least in part it was a matter of a sharply increasing amount of money (in the form of silver and gold) chasing a relatively fixed output of goods and services, thus bidding up the price. Among other things the higher prices meant Spanish goods became uncompetitive on European markets. Even the Spanish themselves began buying foreign products, resulting in a lot of cash leaving the country. In addition, inflation stifled local investment, with the grandees spending their dough on conspicuous consumables instead.

----

Huston, I could possibly live with the randomness of such a monetary policy. (Imagine what would happen to our banking system if someone discovered a gold mine under glaciers in Antarctica.) But I really object to devoting manpower and resources to looking for gold in farflung continents and under glaciers for no other reason than to discover "money". It's much easier and far less wasteful simply to print the stuff.

Successful societies make people who seek "gold" produce something useful for others. A gold standard is a recipe for alot of wasteful effort as people run around the planet looking for the stuff.

Edited December 16, 2008 by August1991

[Huston]

Here's one, famous example.

Some link that wonders what happened to the gold discovered in South America and brought to Spain in the 16th century:

----

The inlfation was caused by the loss of gold and silver to imports, since Spain became like America today. The money lost value because it was mixed with copper and other metals. So I am not sure what your point here is?

Stealing is not good thing either.

Huston, I could possibly live with the randomness of such a monetary policy. (Imagine what would happen to our banking system if someone discovered a gold mine under glaciers in Antarctica.) But I really object to devoting manpower and resources to looking for gold in farflung continents and under glaciers for no other reason than to discover "money". It's much easier and far less wasteful simply to print the stuff.

Successful societies make people who seek "gold" produce something useful for others. A gold standard is a recipe for alot of wasteful effort as people run around the planet looking for the stuff.

This is still a non-sequiter.

[M.Dancer]

The inlfation was caused by the loss of gold and silver to imports, since Spain became like America today.

I don't think you either read or understood what was posted. Gold is an arbitrary benchmark on wealth...economic output isn't. The inflation was caused by a massive influx of ...ummm...gold.

Here is a book, a work of fiction that quite frankly best illustrates the absurdity of basing value on a soft useless meta.

http://www.amazon.co.uk/Making-Money-Terry.../dp/0385611013l

Edited December 16, 2008 by M.Dancer

[M.Dancer]

The modern state causes inflation that cripples the poor, it regulates it in a manner to the detriment of the poor, and is essentially a looter and leecher society in the Ayn Randian fashion, and is happening in case if you haven't notice the massive corruption the the "modern" states have allowed through the financial industry, agricultural industry..

Of course there was no corruption in the gold based societies...

[madmax]

Of course there was no corruption in the gold based societies...

The wholesome and good societies ,without corruption are diamond based societies ..... And societies with lots of oil........ then Gold, Diamonds and Oil based societies are good... all others are corrupt.

Ah the US federal reserve..

Ok, so there are a few bad apples.

In the meantime, I think the housing crunch is getting an early start for christmas.

[Huston]

I don't think you either read or understood what was posted. Gold is an arbitrary benchmark on wealth...economic output isn't. The inflation was caused by a massive influx of ...ummm...gold.

I already said the reason for inflation. You are missing some information.

[Huston]

Of course there was no corruption in the gold based societies...

Strawman. This does not address the magnitude of corruption.