Found this hunky piece of man online and decided to make a few wallpaper to decorate the ol'puter. If you know of any more man-studs I have missed please let me know ;)

more cat pictures

I figure I would post some of my economic opinions as a blog to spice up what I normally post. Very interesting stuff going on right now. I will give you some important data to back this up so You don't think I'm taking out of my butt. :)

Firstly, the interest rates have been going down. This is to promote spending because it's cheaper to borrow money. The Federal Reserve bank has lowered rates from last year from 5.25 to 2.25%, Bank of England from 5.75 to 5%, What this is supposed to do is encourage people to spend more. It has some side effects though. For example it encourages people to borrow to spend, not actually use their own money to do so, It makes money more liquid so its easier to move around and spend, and it means that you will get less money by saving it, so it discourages people to save money. The last point is important. Right now at current conditions people have been borrowing less, and just buying more essentials, This is proven in the data showing Fuel demand is still strong and so is commodities like food. So basically people are not borrowing to buy luxury items, they are instead buying essentials, and this data is healthy. This is why we seem to be in a recession but the economy is still strong. One last thing that lowering interest rates does, it makes the dollar earn less, and loss value, so it makes OIL and FOOD more expensive. See how that's a teeter totter.

bbc info: http://news.bbc.co.uk/2/hi/business/7346657.stm

Second, So with prices climbing, and people less money, and the dollar loosing value, where will we get out of this mess. Its gonna be tough and unpleasant for a while. The major enonomists are saying to write off 2008 and that 2009 will all be rosy again. That's a big load of pony loaf. Fact is that values for everything including real estate and land and good and services have been going up too fast for 10 years. You say well now real estate prices are coming down and that will reset everything, ha ha nope. This is why, average incomes have not grown as fast as the cost of expenses in the last decade, thanks senor Bush. So while you may be taking in good money, chances are its worth less due to more expensive goods and the losing value of the dollar. I'm thinking 2-5 years is a more realistic expectation of resetting the market.

Third, banks have been going Bear Stearns for the last 5+ years. That means they take your $1,000 deposit, and loan out $10,000 to people and business. That's is the actual number they are supposed to keep it under. However they have been cheating lately. They wrote off the loans by selling them to other banks, and on the stock and bonds markets. They believed that home values would climb forever. This allowed all the banks to loan out or leverage 30 times what they actually had in cash reserve. Imagine if you made $30,000 a year, but you felt like spending $900,000 just because you thought you could pay it back. That's exactly what the banks did. It wasn't sub-prime loans that did the trick, it was the drop in house demand, and the high prices that killed off demand. So if Joe Bank only has $30K in reserves but has lent out $900,000 in loans, even a small bad loan will create big losses. This is also bad news for the value of money, because it artificially creates electronic money that doesn't really exist and makes your money weaker still. How weak you ask? Well you can't actually buy anything with money today that you can exchange for later in equal or greater value. Real Estate was supposed to be that miracle cash cow, but she turned out to be a sick mad cow diseased kind.

Fixes, should we just stop spending? No we need to keep the economy moving, but we need to change things, borrow less, save more, not depend on things to always increase in value. I for one believe that the stock market should be looked at as a way to loose lots of money, and its value can always go down long term too. One more thing, we need to let the people run the banking system, not the investors that only care about making money. The banks are not to be trusted as long as they only serve their own interest. We also need to create a fluid currency that will earn a set interest and not lose value, and make it easily exchangeable with everything. This way you can actually save your money and it will be worth something someday. Todays money is a joke and a hoax that saving at 3% will be fine. Your actual income and expenses are rising faster than that.

Sorry for the length on this blog. Keep up to date with economic news on news.bbc.co.uk and good luck to you in this harder time.

Billy
More good reading: Only Yesterday, US before and after the Roaring 20's
http://xroads.virginia.edu/~HYPER/ALLEN/cover.html

Just posted some pics for pride!

Pride 08 Gallery