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 a $460 million dollar investment did lose $12 million bucks
last month with the spiral set to continue until perhaps
.....those losses reach the $230 million dollar mark before
some sense of stability is restored. The worst part of course
is ....it could be 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, doubtful or untruthful
representation. You might want to pull up the Step into
Liquid Movie Trailer which is great.....to really gain
understanding of the metaphor here! Sadly, the music has
changed, the concepts of beauty have changed, the high
bar of excellence has even 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 uptick 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 our US Treasury Secretary thinks Greenspan is
drinking the wrong Cool-Aid. "I don't think we need a big
government bail-out.." Paulson said; as was reported in the
Financial Times today!

Let's just say that Money Markets in the world are in flux.
We can certainly be sure of one thing...nothing is for sure.
Stocks are falling and can fall more, Interest rates can fall
again and again, Food and Transportation Cost are skyrocketing,
Housing Starts are edging to an all time low. No one can even
afford to buy much....no one can even afford to sell that
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 just 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 and
broader expenditures (like his proposed $14.4 Billion dollar
new Heathcare for Californians) is probably not a particularly
good idea...as our nation and state are facing serious serious
re-evaluations - devaluations; for all Real Estate and Equity
Investments.

What seems most telling is...how long it is taking 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 major
difference in our lives? Sort of like.....Stepping into Liquid.
http://www.stepintoliquid.com/