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talus 15-10-2009 18:17

Hear, hear!

muskoka 15-10-2009 19:58


Originally Posted by Intentional Drifter (Post 347169)
I say, "screw it, November's right around the corner, let's get on the boat and get outta here!"


That is literally what we're doing! We plan to leave the dock - for good - in mid-November when the typhoon season abates.

Fair winds.

Palarran 16-10-2009 06:06

Great Post Talus. For what it's worth, if your in the charter boat market, April is the month to buy. The season is over and there are 6 to 7 long months of expenses to pay if not sold.

sww914 16-10-2009 10:42


Originally Posted by Intentional Drifter (Post 347050)
Just for another point of view, you might find the following of interest:



He's a catamaran broker saying it's time to buy now. The people selling always say now is the time to buy, there's never been a better time...
How'd that real estate thingy work out?

muskoka 16-10-2009 11:03


Originally Posted by sww914 (Post 347458)
He's a catamaran broker saying it's time to buy now. The people selling always say now is the time to buy, there's never been a better time...
How'd that real estate thingy work out?

Ask the barber if you need a haircut...

muskoka 16-10-2009 11:09


Originally Posted by talus (Post 347161)
America is the largest consumer in the world... and America consumes in US dollars.

True. Literally and figuratively.

TaoJones 16-10-2009 12:29


Originally Posted by talus (Post 347161)

I believe Phil is wrong about inflation as well - inflation is an increase in money supply. The economy will remain deflationary as long as banks are not lending. This is choking money supply - regardless of what the Fed prints. And when inflation finally rears it's ugly head, interest rates will rise and choke the money supply off again. Yes we will eventually see inflation --- in about 10 years.


Do I believe we have hit bottom? No chance.

I think your analysis is correct, talus, and your conclusion fairly accurate. I just want to point out an apparent contradiction in the paragraph quoted above.

You are correct that inflation in an increase in the money supply, not an increase in prices. Price "inflation" is merely a symptom of true inflation, an increase in the money supply, and it follows an increase in the money supply as surely as night follows day.

But you then state that "...we will eventually see inflation - in about 10 years." You have, in other words, reverted back to the incorrect notion that an increase in the prices of goods and services is "inflation," and we will only see it "eventually - in about 10 years."

The inflation has already occurred, as the Federal Reserve in the US has printed and pumped dollars into the various stimulus plans and bailed out various entities at a staggering rate. But the increase in prices that must surely follow has been delayed. Price levels of some asset categories have actually declined, and, as a result, some pundits are incorrectly predicting "deflation."

Since deflation is the opposite of inflation, it necessarily means that the money supply will decrease - that is not going to happen. The real reason that prices, in some instances, have fallen is because the quantitative easing of the Fed has led to the injection of the newly created dollars into the existing banking system and the stock market, but it has failed to reach the broader economy.

Why is that? Because the insiders who control the banking system are hoarding those new dollars, both because they wish to be well-capitalized when the weaker institutions go on the block, and because they are, in fact, much closer to bankruptcy than most realize, and they need to hold onto every nickel to meet their capital requirements.

Thus, the velocity of money is retarded, and the economy can't recover as long as the capital injections are hoarded. But when that hoard of cash and credit breaks loose and enters the economy, we will see price inflation that will be truly staggering. Think Weimar Germany, or present-day Zimbabwe - inflation of the "hyper-" variety.

And it will arrive much sooner than ten years from now, I'm afraid.

I would also dispute your notion that when "inflation finally rears its ugly head, interest rates will rise and choke the money supply off again." First, go back to the definition of inflation, above, but second, while that predictable strategy has worked in the past, it is highly unlikely to succeed (or even be attempted) this time.

While that was the accepted practice at least since the recovery following the second World War, it is probably not going to be the chosen course this time. What's different, now? The US dollar is losing its status as the world's reserve currency, an incredibly powerful advantage that has been abused and squandered.

As a result, the US dollar has replaced the Japanese Yen as the base currency for the global carry trade. With interest rates effectively pegged at 0%, large and powerful interests borrow in US$ and invest the proceeds in a higher yielding currency. Going forward from here, that currency will be gold (yes it's a currency - the ultimate currency, actually), yuan, yen, Euro, real, dinar and even the ruble and the rupee, and those powerful interests benefiting from the carry trade will not meekly accept an interest rate increase that ruins their money machine.

It took the Japanese twenty years to escape the use of the Japanese Yen as the base currency of the carry trade. Indeed, the "Lost Decade" of the Japanese economy was actually two lost decades.

By losing its reserve currency status and becoming the base for the carry trade, the US$ is doomed. It will steadily lose purchasing power going forward, the American middle class will be wiped out, world commodities will no longer be priced in US$ and American military adventures will be starved for lack of funding and popular support.

The United States of America, in short, is on the slippery slope that ends with third world status: A thin veneer of powerful, connected interests at the top, a huge pool of disenfranchised, poverty-stricken, unumployed rabble at the bottom, and a layer of police and military in the middle, bought and paid for by the elites to ensure their security and keep the repressed denizens at the bottom from exacting revenge.

Any notion that a "recovery" is possible is fantasy, I'm afraid, and there is no possibility that things will, or indeed can, return to the way they were.


talus 16-10-2009 15:46

1 Attachment(s)
TaoJones -- Good post. I was making quick leaps, and I basically agree with your analysis.

I should have been more clear on my definition of inflation. Inflation is a net increase in money supply and/or credit. Deflation is the opposite, a net reduction in money supply and/or credit.

As you said, it's the flow of the money after it's printed that matters.

Right now, despite Fed printing (increase in money supply) there is a massive shortage in credit thus creating an overriding deflationary effect. Yes the unprecedented cash infusion was intend for the consumer, however the banks are afraid and/or unwilling to lend. As you said, cash is being hoarded and it is failing to reach the market. This resulting "shortage" is a decrease in money supply or... deflation.

The money just isn't hitting the streets. I think we agree on the terminology we just disagree on the result. If a tree falls in a forest and....

But yes, I agree, all that printed money has to show up at some point. All that fictional debt* has been turned into actual paper debt and placed square on on the taxpayers shoulders.

*Note: Best basic video on money I have seen so far. Watch it with your children! I promise you it won't disappoint. Money as Debt - by Paul Grignon Money as Debt

I just think it will take longer for the inflationary effect of this irresponsibility (to the people) to be felt. You are right, in Japan it has been nearly 20 years of deflation - and they printed money just the same as the US did. That is one reason why I don't see a hyper-inflation scenario.

Attachment 10530

I had not considered of the US Dollar being the new carry trade. I think you are right though.

In the end, the consumer is leading this recession. He/she is cash poor and to afraid to spend (finally). Without consumers the next blow will be the failure of commercial real estate and the resulting take down of more banks. And I'm not saying consumerism is good, but without consumer confidence there will be no recovery...and I don't think the consumer is going to be confident for quite a while.

In retrospect, if the Government had kept their hands off (and we Canadians bailed out our share of banks/industries also), the resulting pain would have been much shorter and sharper. And while the failure of several of the large, and irresponsible (bordering on criminal?), banks and financial institutions would have been painful, the recovery would have been much more swift and fruitful.

As it stands now the powerful just got more powerful. And, we the people, paid for it.

Great viewing... Bill Moyers --- PBS the Journal : Former International Monetary Fund chief economist Simon Johnson and US Rep. Marcy Kaptur (D-OH) report on the state of the economy.

talus 16-10-2009 16:31

I was thinking of a boat analogy.

Let say we are on the good ship ECONOMY. And while we were out a gale picked up. The helmsman, FED, steered directly into the storm but incorrectly called for more sail area (printed money).

However, the seas and winds were far to great for FED and now, with all the sail up ECONOMY could only steer into wind. If FED put her off course the slightest she would be knocked down. And since ECONOMY couldn't go forward (inflation) all that was happening was she was slowly drifting downwind (deflation).

What is worse, all the people in the first class section (the BANKS) that knew what to do, ---- lower the sails, put on life jackets (educate the people), rig the foul weather gear (take responsibility), decided instead to call "Every man for himself" and bail out taking what safety gear with them that they could. This left a whole lot of passengers stranded and panicking on ECONOMY with FED out of options and no one to implement them anyway.

The only remaining questions are: How long with the storm last? Can FED keep ECONOMY pointed into the wind? And how much sea-room does she have before she hits something?

-- What do you think of that analogy?

muskoka 16-10-2009 21:35

I think the mask has slipped hasn't it? The clear link between lobbying, campaign contributions and policymaking is evident to everyone.

One commentator reckons the Return on Investment for banks has been something in the order of 280,000% (based upon what they got via TARP for their lobbying expense and campaign contributions). I think there's some very heavy lifting to be done if citizens are to ensure they have government 'by and for' the people. Because right now what is in place is something that looks like democracy outwardly but really is something else.

What really surprises me is that there isn't more outrage.

sww914 16-10-2009 22:59

I'm a bit more interested in the boat side of things here.

talus 17-10-2009 15:23

Ok, back to boats...

I found some old comps from some research I did last year. These are all Lagoon 410's, most were sold in southern Florida or east coast USA.

The first number is the model year. The Listed Price is the "Last" price it was listed at. The listed/sold date is (MM/YY). Of course there is little reference to condition etc. so don't get your knickers in a knot. AND - you have to trust what the brokers put down as the sold price. Enjoy.

1998 Listed Price: US$ 325,000 (02/01), Sold: US$ 325,000 (03/01)
1998 Listed Price: US$ 350,000 (01/01), Sold: US$ 295,000 (08/01)
1998 Listed Price: US$ 260,000 (11/01), Sold: US$ 225,000 (12/01) -- Owners Vers
1998 Listed Price: US$ 280,000 (07/02), Sold: US$ 255,000 (12/02)
1998 Listed Price: US$ 325,000 (04/02), Sold: US$ 275,000 (06/02)
1998 Listed Price: US$ 299,000 (08/02), Sold: US$ 273,000 (12/02)
1998 Listed Price: US$ 259,900 (05/03), Sold: US$ 242,000 (08/03)
1998 Listed Price: US$ 229,000 (10/01), Sold: US$ 209,000 (04/02)
1998 Listed Price: US$ 265,000 (09/03), Sold: US$ 265,000 (10/03)
1998 Listed Price: US$ 265,000 (12/03), Sold: US$ 237,750 (12/03) (Same boat as previous)

1998 Listed Price: US$ 249,000 (06/03), Sold: US$ 225,000 (12/03)
1998 Listed Price: US$ 249,000 (04/03), Sold: US$ 230,000 (02/04) -- Eng 1200hrs (Same boat as previous - Conflicting or double listing??)

1998 Listed Price: US$ 249,000 (10/04), Sold: US$ 235,000 (01/05) -- Eng 1500hrs
1999 Listed Price: US$ 375,000 (06/02), Sold: US$ 330,000 (01/03) -- Owners Vers
1999 Listed Price: US$ 370,000 (11/07), Sold: US$ 325,000 (01/08) -- Owners Vers (Same boat as previous)

1998 Listed Price: US$ 225,000 (11/07), Sold: US$ 200,000 (01/08)

1999 Listed Price: US$ 295,000 (08/02), Sold: US$ 282,000 (09/02)
1999 Listed Price: US$ 309,000 (01/03), Sold: US$ 277,777 (03/03)
1999 Listed Price: US$ 320,000 (11/05), Sold: US$ 320,000 (06/06)
1999 Listed Price: US$ 265,000 (12/03), Sold: US$ 265,000 (01/04)
1999 Listed Price: US$ 269,000 (04/07), Sold: US$ 263,000 (06/07)

2000 Listed Price: US$ 360,000 (06/01), Sold: US$ 395,000 (07/02)
2000 Listed Price: US$ 385,000 (07/05), Sold: US$ 375,000 (01/06)
2000 Listed Price: US$ 360,000 (06/01), Sold: US$ 360,000 (06/02)
2000 Listed Price: US$ 100,000 (05/04), Sold: US$ 213,000 (05/04)
2000 Listed Price: US$ 310,000 (11/04), Sold: US$ 272,500 (08/06)

2001 Listed Price: US$ 345,000 (04/04), Sold: US$ 330,000 (10/04) -- Owners Vers
2001 Listed Price: US$ 329,000 (01/04), Sold: US$ 329,000 (02/04)
2001 Listed Price: US$ 350,000 (08/03), Sold: US$ 318,000 (11/03) -- Owners Vers
2001 Listed Price: US$ 335,000 (01/04), Sold: US$ 315,000 (03/04)
2001 Listed Price: US$ 325,000 (05/07), Sold: US$ 300,000 (07/07)
2001 Listed Price: US$ 325,000 (08/08), Sold: US$ 290,000 (09/08)
2001 Listed Price: US$ 279,000 (03/08), Sold: US$ 255,000 (07/08) -- SunSl. Charter

2002 Listed Price: US$ 319,000 (02/08), Sold: US$ 284,500 (04/08)
2002 Listed Price: US$ 289,000 (07/07), Sold: US$ 265,000 (10/07) -- Ex Charter
2002 Listed Price: US$ 379,000 (11/07), Sold: US$ 235,000 (12/07) -- Owners Vers

2003 Listed Price: US$ 415,000 (05/05), Sold: US$ 415,000 (12/05) -- Eng 300hrs
2003 Listed Price: US$ 390,000 (09/04), Sold: US$ 370,000 (01/05)
2003 Listed Price: US$ 385,900 (11/06), Sold: US$ 366,605 (01/07)
2003 Listed Price: US$ 365,000 (06/05), Sold: US$ 365,000 (06/05)
2003 Listed Price: US$ 325,000 (06/06), Sold: US$ 325,000 (12/06)
2003 Listed Price: US$ 339,000 (04/07), Sold: US$ 295,000 (01/08)
2003 Listed Price: US$ 275,000 (09/06), Sold: US$ 255,000 (07/07) -- SunSl. Charter

2006 Listed Price: US$ 394,602 (09/05), Sold: US$ 394,602 (05/06) -- New Boat
2006 Listed Price: US$ 399,000 (05/08), Sold: US$ 379,000 (10/08)
2006 Listed Price: US$ 399,000 (04/08), Sold: US$ 300,000 (04/08)

VERTIGO 18-10-2009 06:36

OK I should not post after cocktails but...
I don't read the economy in such "depth" as previous post. Pretty simple to me. The claim the banks are withholding money just doesn't strike me as complete truth. I personally find them to be doing what they should have been doing in the first place. I can still go out and get a loan, just not a stupid loan.
I think I consider myself to be the "average American." I don't spend as much on stupid stuff as I use to. I want to pay down or off ALL my debt. If I have extra money, I don't go shopping I pay off a debt. For me, it is going to take me 2 years. I still spend, just not the way I use to. I use to go out to dinner, night on the town, and drop $75-100-200 and not even blink, those days are gone. I want out of debt, some from fear, some from an awakening.
I think that we will see a stronger America emerge, but it is going to take time, 3-5 years. I now live in Japan and it really irritates me that the US is viewed as the big waste Country. We are not offered the same as the other Countries are. Japan has tiny cars, 3 cyl. Yellow plates, new $12,000. If that were offered in the States I would have bought one long ago. The energy savings of Germany, the cars of Japan we just are not offered these things. We want it, we just do not even know it exists.
The USA is not going to crumble, not yet. We will emerge, IMO, stronger than before, smarter than before. One of the issues I see is that we might be bending over backwards to "help" people that were living wayyy out of their means. Those poor poor people that bought a $300,000 house but only made $40,000/year, dam you dumb.
Ok to put it to the boat market, 2-3 years ago I have to admit, I might have taken up to $200,000 worth of debt to get "THE" boat I want. I am smarter now, cash, maybe $50-75,000 debt, as long as it goes with not owing a penny when I cut free.
We're not done, we are waking up. everybody bitched that we were the land of excess, we are changing, don't bitch about the change. We did live in excess for a long long time, but we also carried many economies while doing it.
OK now I have to go pass out....
God Bless Spell Check

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