patrick.net

Oops. That worked before. I'll just put in the tags.

hopefully that will go through ok.

Peter
why does that work when you do it?

To get <, you need to type &lt;
To get >, you need to type &gt;

Wow. How you figure this stuff out is beyond me.

SactoQt, it is part of HTML, the language of web sites.

Oh. Guess I needed to take a computer programming class for that. Good stuff to know for a blog though.

Back to the topic at hand. I've heard of the US buying its own debt too, but I have no clue how that works.

@CF,

"Housekeeping" indeed.
As to your question, the Fed already "owns" about half of its own debt (in the form of U.S. Treasuries/bonds) --as much as foreign and domestic private investors combined: tinyurl.com/atvry. I guess it all pretty much works the way you describe --the government keeps running larger and larger deficits, so it keeps "borrowing" more money from itself. Basically the modern way of printing more money.

How could MP be evicted if this is an open blog?

We can use clues like language, IP address, and e-mail address.

Unfortunately, if they print it and spend it, won't they have to tax the people to be able to pay it back or cover interest at least?

Unfortunately, if they print it and spend it, won’t they have to tax the people to be able to pay it back or cover interest at least?

That's what I was wondering. The government can try to play a shell game of sorts with the debt, but in the end it has to paid off somehow. Doesn't it?

Gee... I wish I were a central bank, so I could lend myself unlimited piles of money --at a "preferred" rate that I get to set myself. Then I could tell everyone, "this debt is backed by the full faith and credit of the United States, if not God himself".

Hence "in debt we trust". HARM, do you remember?

How could MP be evicted if this is an open blog?

Please don't evict him, as I enjoy his provocative comments which give interesting viewpoints.

Please don’t evict him, as I enjoy his provocative comments which give interesting viewpoints.

I wish you hadn't said that. He needs no encouragement.

Unfortunately, if they print it and spend it, won’t they have to tax the people to be able to pay it back or cover interest at least?

That’s what I was wondering. The government can try to play a shell game of sorts with the debt, but in the end it has to paid off somehow. Doesn’t it?

Well... not exactly. A goodly portion of your tax dollars (can't recall the exact figure -25, 30%?) goes just to pay the interest on the National Debt each year. But the beauty of being a central bank, means you never really have to pay it all off. You just replace old bonds that mature by issuing new ones.

Pretty sweet, huh?

Gee. I wish I was a central bank.

Does anybody know if the money that is printed is backed by gold anymore. Central banks around the world used to hold gold to back their currencies, but in the early nineties they started selling their reserves. (Guess they thought they didn't need it anymore!)

Jack says:
"If you are playing it safe, it might be the best investment location wise, but if you are looking for the most percentage of appreciation, perhaps a less expensive neighborhood somewhere else in the Bay Area might make more of a jump, since Marin is already so high."

Well, I presented this example because it's the most out-of-control property I've seen to date in Marin, a possible case study for the topic at hand. Including taxes, that property is about $4600/month--for a 1000sqft hovel. In terms of an investment, I cannot honestly regard that property as one,--no more than a Thomas Kinkade painting sold at 100X value can be considered one. At this point, I don't consider any property in the bay area a "solid investment". While we do own property here and silicon valley, thankfully none of that's leveraged to the point of great risk.

By contrast, I've been scanning my home region, Puget Sound, and there's a number of attractive properties (real homes) within a Seattle commute for a fraction of that San Anselmo bungalo. But guess what--I'm even wary to buy there, since I suspect the same dynamic is underway. So my inclination is not to buy--but sell off/rent.

@AntiTroll from Oz,

Don't know about other countries, but not in the U.S. anymore. Nixon took us off the gold standard back in 1971.

General background on the gold standard & Bretton Woods agreement: tinyurl.com/cm6qw

Don’t know about other countries, but not in the U.S. anymore. Nixon took us off the gold standard back in 1971.

Maybe the banks have us on a new standard, the "Debt standard"

AntiTroll from Oz, I think the land of expensive watches still has a significant gold reserve.

Maybe the banks have us on a new standard, the “Debt standard”

It wouldn't surprise me if that's the actual name for it. :-)

AntiTroll from Oz, I think the land of expensive watches still has a significant gold reserve.

Issue maybe is who owns the gold. Is it the FED, government, or privately held?

Looks like the Swiss Central Bank is selling gold though...

http://tinyurl.com/c3ogb

I was trying to answer your question about the relative strenth of Marin County compared to the rest of the Bay Area, all other things being considered equal...The bungalow is priced based on wishful thinking. Watch it sit

Agreed, I think some areas of Marin have innate desirability (such as Ross, Kentfield, etc.), while others to a casual visitor look pretty much like middle-road housing--w/ working-class infrastructure (poor roads, above-ground electrical). Perhaps the desirable areas will carry the less to a degree during a correction. In any case, it will sure be interesting to see where all this leads!

There is a cool new rent-vs-buy calculator at CEPR:

http://tinyurl.com/cubol

For a 600K house in San Jose with 20% down using a 30YR FRM, it says:

Your basic costs start at $ 3,200 per month. However, if you can rent a similar home for less than $ 4,200 per month, you may be better off renting.

A 600K home can easily be rented for 1700 or less... Enough said.

I forgot to add, one assumption is selling the house in 10 years.

Just to add, CEPR appears to be quite optimistic about the probable depreciation. It only estimated a (real) decline of 49% for the San Jose-Santa Clara-Sunnyvale region.

Uh oh...more houses?

Court ruling clears way for 73 new houses
CLOSELY WATCHED CASE CLEARS WAY FOR BUILDING 73 HOUSES
By Ken McLaughlin, Mercury News
In a case watched by environmentalists around the state, a Monterey County judge Tuesday ruled that a 1907 map permitting 73 new houses on prime farmland is as legal today as it was nearly a century ago.

You guys ready for a new thread yet?

Re sauce: I vote no ban. Dude's clearly a chump, but I like watching him pretend to be a playa, kiddie punctuation and all...

u r all such 100z0rz!

_shrug_

Cheers,
prat

How about "Malibu Madness"? Just posted.

Jack-
Just as an fyi of Marin house prices, you might find this interesting:
I've compiled median home figures from '93-05, as shown here..
I've extended the '93-99 trend to '05, if that suggests anything.

It appears I've bungled the link mentioned above, which can be found here:
http://auth.mhhe.com/wmg/flashcomps/images/marintrend9305.jpg

Now you wouldnt by any chance be suggesting that the green line is where prices “should be” right now are you?

If prices do not return to their long-term trendline, it would be a new paradigm indeed. Where is my hover-car?

Jack, I did not say anything about the green line. :) It may or may not represent the (long-term trendline".

I would not recommend you to sell. It is a nice comfortable home after all.

Forgot to add...

Not investment advice.

"I am sure Kurt S will even agree that the green line in no way represents a “long term trend”! What, only 5 years, and two of them were appreciating when the rest of the market was still going down! (Hover car?) "

Yeah...that's a short span to calculate a "trend"--but only because I couldn't find stats prior to '93. When I have those, I'll figure them in.
And, of course, I don't suggest Marin housing should toe that green line, but it's certainly interesting to see how the slope changes, particularly during that timeframe. Alarm bells went off when I saw this--had to share.

Regarding selling--we've seriously considered it. As we could sell things and move back N. to Seattle and live quite nicely; that option has been spinning in our heads. But there's the job thing, family in Marin, and that's stopping us (for now).

Peter, Peter P...

Can we agree to sign/address by screen name only?

Of course, we can always pull a Netrugu and change name. ;)