The ECB Stepping into Liquid!

The European Central Bank is akin to our Federal Reserve,
World Bank and International Monetary Fund. It’s prime
directive is to make sure their is enough cash in the system
for banks throughout Europe to operate on a daily basis.

Right now the ECB Philosophy is at odds with their American
brethren and the Bank of England. They have however decided
to unleash the cash hounds and add 20 Billion British Pounds
this month and 20 more next month to add to the Banking System.
This is a sure recipe for inflation when you consider that
just printing money and lowering the interest rates is not
always the great or best answer to being short on paying your
bills.

As we all know, our OC Treasurer, Chriss Street had invested
in some dicey SIV’s or Structured Investment Vehicles..which
on $460 million dollar investment did lose $12 million bucks
last month and the spiral is set to continue until perhaps
…..those losses could reach the $230 million dollar mark
….before some sense of stability is restored. The worst part
….it could get worse than that.

Fast Forward from the Surf Movie, Endless Summer in 1966 to
Step into Liquid 2003; http://www.stepintoliquid.com/
…….Yes, the halcyon long board days of a relaxed society
with Robert August and Mike Hynson just having a great time
traveling the world and looking for waves….we have shot
forward to “pull in” 100 foot rides 50 miles from shore. The
same is surely true of World Investment Strategies. Those old
days of having Commodities, Real Estate or solid; real world
goods and services support the price structure has moved into
a Virtual Investment Reality. What it is ….is what they say
it is…..unless of course someone dares to question their
veracity or untruthful representation. You might want to pull
up the Step into Liquid Movie Trailer which is great…..to
really understand the metaphor here! The music has changed,
the concepts of beauty have changed, the high bar of excellence
has changed too.

The ECB is still following all the falling interest rates..
with initially offering 4.9 Percent on short term investments
….which went down to 4.21 Percent for those that have already
been tendered. What does all this mean you ask? It means that we
are right in the middle of the biggest Stagflation Cycle since
the days of Jimmy Carter. No one can afford to buy houses except
millionaire Chinese people. No one can pay the ever increasing
and rising APR sub-prime mortgage rates. President Bush wants
a temporary freeze on rates….Good old Alan Greespan…remember
him…wants the Government to bail out home owners and the other
80% that are speculators and Real Estate Investors. Hank Paulson
the Treasury Secretary thinks Greenspan is drinking the wrong
Cool-Aid. “I don’t think we need a big government bail-out..”
Paulson said; which was reported in the Financial Times today!

Let’s just say that Money Markets in the world are in flux. We
can be sure of one thing…nothing is for sure. Stocks can fall,
Interest rates can fall again, Food and Transportation Cost are
skyrocketing, Housing Starts are edging to an all time low. No
one can afford to buy much….no one can even afford to sell
much. Foreclosures are edging higher and higher and higher.
Is it too late yet? Who knows? How much is your Real Estate or
Commercial Building really worth? 50% of what you paid, less
than that? Who can afford to buy much right now? Sounds like
you need to watch the Step into Liquid Movie Trailer and get the
feel for the market. Obviously, Chriss Street and John Moorlach
haven’t found time to do that yet. Hopefully, every “elected”
including our Governor….will get the message and realize that
sorting out this investment market or adding anything in the way
of Government Costs (like his proposed $14.4 Billion dollar new
Heathcare for Californians) is probably not a good idea…when
our nation and state are facing serious serious re-evaluations
for all Real Estate and Equity Investments.

What seems telling is…how long it takes to sell property..right
now, most are looking at two to three years…which takes us into
2011-12. Almost a whole four year National Election Cycle away!
How many will lose their homes by then? How much will the loss
of tax revenue affect Government at all levels? Which Presidential
Candidate can fix this problem? How are they going to do it? Does
it make any difference? Sort of like…..Stepping into Liquid.
http://www.stepintoliquid.com/