In the latest sign of a drastically cooling economy, Statistics Canada said Monday that sales of manufactured goods tumbled eight per cent in December of 2008 — the steepest monthly decline since the measurement began in 1992.
Let me see if I understand the situation.
A bunch of greedy americans became bankers. And they made loans that they knew would fail , but not for two years. (Sub Prime Morgages, low interest rate for 2 years, then a high interest rate). They made a lot of sales, they made a lot of commissions, commissions based on the notion that very very few of these sales would fail.
Because idiot could afford a house , the prices went through the roof, to the point that only an idiot would actually buy a house, because only an idiot is going to sign away his entire income for the next twenty or more years in exchange for a two bedroom flat on a busy street with loud traffic.
Then the bankers took their many millions in commissions, and they retired to play golf for the rest of their lives.
Then the two years ran out on these morgages, and the vast majority of them could not be paid. And so the idiots simply declared bankruptcy. They refused to pay. They could not pay , to be honest no one could pay such insane rates.
And so their houses were taken from them by the banks. Who tried to sell them. At the current rates. And they wont' sell. So they have to mark them down.
But banks are only allowed to lend out so much money. They have to have 5% in cash or assets on hand at all times. When they marked down the houses, suddenly they were over their limits. So they dared not mark the prices down too much, even though they wont sell because it would promptly choke the bank. They wouldn't be able to operate anymore.
And so a whole bunch of houses sit at insane prices , and no one wants to buy them, and no one dares to lower the prices.
And a whole bunch of people are living in cars, beside these empty houses.
And a whole bunch of banks technically have their minimum 5% assets , but not really, and everyone knows it, and so they have no confidence in these banks , and so the banks are going belly up.
And this creates a world wide mess because 300 million really rich people are suddenly living in cars instead of houses, and when you live in a car you're not going to buy a computer. Or a stereo. Or anything else like that. And though you have money because you're still working , you're not putting that money in the bank that just did you dirty. And you're certainly not putting money in a bank that you have no confidence in , in fact you're moving money out of that bank before it goes belly up ! Thus ... causing it to go belly up. And so they have been effectively removed from the market place , and the whole system crashes.
Is that about right ?
Ok. You know , the same thing happened with the power plants a few years back. One went down , and for months the Americans blamed Canada for it all (and then in a very quiet whisper admitted it had been an american company , but the whisper was so quiet that to this day most americans think it was Canada's fault).
And so what happened ? The Canadian Government decided to seperate their power grid from the american grid. Because hey , you took down most of ontario and a good chunk of quebec and it was some stupid american's fault and we can't have that. You dont take down the heartland of our country because some foreigner is too cheap to put safeties on his power reactor.
I think the same solution needs to be put him place here. There's no controls on the American Financial system, they've done this before , several times. Remember the great depression when they were selling all those stocks that were nothing but pieces of paper ?
We need to band together with a bunch of other nations and we need to seperate our economy from the American one. The whole world suffers an earthquake every time an american banker has a hiccup , and thats just not acceptable.
We need to get off this merry go round , and maybe get onto one that we control , not someone else.
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