Farmer Diaries

I suspect that the problem is that the world is looking at a new set of conditions, in a way that we have never had to confront them in the past; The USA which until recently was the dominant economic entity is being overshadowed by the emerging economies; yes the US economy is still three times as large as that of China ($15 trillion vs. $5 trillion), but what is important is the rate of change, zero growth Vs. 10%, and the dynamic of resources which for the first time are considered a store of wealth (Chinese pig farmers and their copper plates). For America the story is asset deflation, you cannot have internally generated inflation when credit is contracting at an annual rate of 5% per annum, by definition asset prices have to fall, as the required leverage has to fall to meet the bankers' maximum asset exposure. Banks have been asked to reduce leverage, and as a whole have done so (it helps that they've not had to realize their portfolio losses, but I digress). ...

I must admit that I am a closet conservative, not that this is going to be a huge surprise to Ms. FitN, she knows what I am made of! I was never terribly impressed with the Conservative party, but hey, couldn't be worse than the Liberal Party headed by Stephane Dion (Now replaced by Micheal Ignatieff). The Conservatives were elected on a platform of small government and non-interference (although they do have a "bible belt preacher" attitude). Canada is somewhat peculiar, in that historically it has been the Liberals (left leaning party) that have reduced expenses and balance the books. Between 1995 and 2006 that is mostly what they did, they were very clever, the Federal government cut its portion of funding in joint provincial/federal projects -- the province taking on the burden of these obligations with the commensurate increase in provincial indebtedness. Imaging the Prime Minister Harper's (Conservative Party) dilemma when the Canadian economy, like the rest ...