QE Carney: Loonie monetary policy

Mark Carney Leaves Canada With ‘Stealth QE’ Rising At Fastest Pace Since 2009

Carney has much practice devaluing the Canadian loonie.  He is perfectly suited as the new head of the Bank of England.  From Zerohedge:

As Mark Carney steps aside from his role at the Bank of Canada to undertake all manner of easy money in the UK, we thought a reflection on the ‘stealth’ QE that he has been engaged with, very much under the radar, in the US’ neighbor-to-the-north was worthwhile. It seems quietly and with little aplomb, Carney’s BoC has grown its balance sheet by over 21% YoY – the most since 2009. If that was not enough to make someone nervous, the quantity of Canadian government bonds on the BoC’s balance sheet has grown at a remarkable 46% YoY! All of this has taken place during a time when ‘supposedly’ the Canadian economy has been reasonably strong and foreign demand for debt high. With Canada’s CAD267bn debt due in 2013, we suspect this ‘stealth’ QE will continue to rise.

Where is this easing reported in the Canadian news media?  Inflation in Canada is rampant–that can be seen in the price of housing alone.  But who is covering the monetary expansion of the loonie?  So now we Canadians who have Canadian dollars suffer the abuse of both ZIRP (zero interest rate policy) and QE.

It’s all monopoly money.

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Carbs are poison: carpal tunnel or peripheral neuropathy?

Carbs are poison (for those with elevated glucose levels)

I’m going to start a new tag/category called “Carbs are Poison”. This is my new motivational motto as I have entered a major lifestyle change that took place two months ago.

About sixty days ago, I learned that the tingling I feel in my hands was related to elevated glucose levels in my blood stream. I’ve had this tingling in my hands for about ten years now, and it affects my comfort when driving, playing a guitar or ukelele, typing on a keyboard, and even holding a cell phone to my ear. I would have to lower my hands below my waist and shake them out to get rid of the tingling.

For years I thought that it was carpal tunnel, and generally speaking, my investigations into the question showed that carpal tunnel was work related, i.e., caused by repetitive use of, e.g., a keyboard or a jack hammer. But the more accurate term for my condition is peripheral neuropathy, a condition whose most common cause is diabetes. Once I learned this about two months ago, I was certain that I was diabetic.

Well, I also have four risk factors: I am (1) Asian, (2) obese, (3) over 40, and (4) I have a family history in that my brother, my mother, my grandmother and my grandfather all have/had type II diabetes. So I immediately went into get tested for diabetes and the hbA1c test came back 6.0, which means that I am prediabetic (between 5.6-6.9; 7.0 is considered diabetic).

But later, through reading Nikolaos Papanas, Aaron I. Vinik, and Dan Ziegler, “Neuropathy in prediabetes: does the clock start ticking early?” (Nat. Rev. Endocrinol. 7 [2011] 682-690), I confirmed that my symptoms were related to prediabetes–this is one that my physician couldn’t answer, “If I’m not diabetic, then why do my hands tingle?” The article shows that prediabetics with impaired glucose tolerance are more likely to have peripheral neuropathy and non-diabetics with peripheral neuropathy are likely to be prediabetic. The elevated glucose levels in the those with impaired glucose tolerance, i.e., those whose glucose levels don’t immediately come down from a high carb meal, can have the nerve damage that is related to peripheral neuropathy. The damage was so severe that I had for about one year started to experience severe arthritis in my finger joints.

It stands to reason that a low carb diet would have the benefit of helping me to control my glucose levels. I was especially informed by Dr. Richard Bernstein, who has made numerous appearances on Youtube. But I’ve also had some experience with low carb dieting in the past. So on November 28, 2012, I used the occasion of the twelve hour fast for my blood test, to begin a new low carb regimen. This is day 60, and here are the results so far:

  1. My blood glucose levels went down immediately from HbA1C 6.0% (=3 month average of about 7.7) in my blood test to about 5.4 (when testing with personal glucose tester).
  2. Within two weeks my blood pressure has come down from high (140/90) to normal levels (127/82).
  3. The tingling in my hands largely subsided immediately after beginning the low carb diet. At day 60, I’ve been typing at this keyboard for several minutes now, without any tingling.
  4. My arthritis is almost completely gone with some mild problems in only a few of the joints, particularly my right middle finger. Nevertheless, I can snap my fingers in both hands with no severe pain as before.
  5. I’ve lost about twenty-five pounds.
  6. I’ve come down two pants sizes, as my waist has shrunk from 43 to 39 inches.
  7. I feel less sleepy after eating.
  8. I have greater energy levels and enjoy exercising and long walks (except when my knees give me problems).

My low carb diet does require fat: it is not a low fat diet! However, I am consciously trying to eat only to satiety. I snack on low carb foods when I feel cravings or hunger between meals, but after the first few days, the intrusive thoughts of food and the cravings subsided. I now avoid all sugars and starches to the degree practical. Here are the main foods I avoid:

  • any thing with flour
  • bread
  • desserts with flour and sugar
  • potatos
  • carrots
  • lentils, beans, peas
  • sweet potatoes
  • milk
  • rice
  • candy
  • fruit

Here are some typical foods that I eat:

  • meat, fish, poultry (including the skin and organs)
  • spam, corned beef, sausages (kosher salami, summer sausage. pepperoni)
  • eggs
  • hard cheese (brie, gorganzola, blue, cheddar, gruyere, etc.), low carb/high fat yogurt
  • 18% table cream; whip cream (in home-made non-sugar, low-carb ice cream)
  • coconut milk or cream
  • tofu
  • pumpkin
  • onions and garlic
  • avocados (ca. 1 per day)
  • tomatoes
  • green vegetables: cabbage, lettuce, cauliflower, broccoli, eggplant, zucchini
  • olives
  • non-sweet pickled cucumbers and asparagus
  • mushrooms
  • turnips (small amounts in soup)

I am drinking no sweetened beverages. I have lowered my caffeine intake because I find that it stimulates the cravings for carbs. I drink a lot of water flavored with lemon or lime juice (e.g., Real Lemon), and now copious amounts of cold, weak green tea (1 tsp loose tea or 1 tea bag makes three litres). Since one is in a state of ketosis (using one’s own fat for energy), the low carb diet requires drinking a lot.

Finally, I am abstaining from alcoholic beverages for until I’ve reached my weight loss goal (at least 65 lbs–or down to about 180 lbs).

Avoid the scrutiny of FATCA/FBAR/Form 8938 by putting your gold in an offshore safety deposit box

Cross posted from the Isaac Brock Society.

Simon Black (Do I Have To Report My Offshore Gold…?) asks whether custodial gold “accounts” (e.g., James Turk’s Gold Money) fall under FATCA provisions and his people think so. However, gold kept in a safety deposit box would not fall under FATCA:

What’s more, in all of those 544 pages, there is not a single mention of the words, “gold”, “silver”, or “precious metals”. So there’s still quite a bit of mystery with respect to the question, “Do I have to report my offshore gold…?”

I’m still having my team go through the rules; after an initial read, though, the language of the regulation does suggest that custodial gold institutions (like GoldMoney, etc.) should be reported. Offshore safety deposit boxes (like Das Safe) do not.

This is good news for “structuralists” like myself. In a discussion with Just Me, I learned that my suggestion of opening a few extra accounts to get one’s total over 25 (thus avoiding a detailed FBAR) could be “structuring”. Structuring is the practice of breaking up a single large transactions into multiple transactions below the reporting threshold. See what happened to this Greek American couple: My Big FAT IRS case. A US Person in Canada could withdraw funds from their FATCA covered account, until it is below $50,000, and then buy legal tender gold coins (Maple Leaf). These coins would go into safe storage–meaning it would be safe from burglers and from the snooping noses of the IRS, for such coins would not be reportable under FATCA, FBAR, or Form 8938. But almost certainly, it would be a violation of United States law for you or me to exercise our Canadian freedom to buy legal tender coins minted by the Royal Canadian Mint and legally purchased in a legitimate Canadian business, providing all kinds of jobs to Canadians. You would become a structuralist.

For those readers in Canada, I suggest that you take few seconds and take a deep breath. Breath in that Canadian air. Isn’t that good? That’s because you are breathing freedom–freedom from the tyranny of the United States.

Bear in mind also the ramifications of these legal tender coins for Form 8854. The current retail buy price of the Maple gold (1 oz of super fine gold, purity of 0.9999) is about $1650 (See Canadian PMX in the Toronto Area), but its face value under legal tender laws is $50 CDN. So let me ask the question: when reporting on Form 8854, does one report the legal tender value or the intrinsic value of legal tender coins? If you had ten million US quarters, you would have to report their face value on Form 8854 (US $2.5 million). It would be illegal to report only the intrinsic value of the coins (ca. $500,000). This is because the US quarter is a legal tender coin and its reportable value is what is marked on the coin. So therefore, if you have 6,000 Gold Maple Leaf coins, you would be required to report CDN $300,000 on Form 8854. Accuse me of being a structuralist vis-a-vis United States law. Just do it! But I am obeying the laws of Canada where I live.

There are some people who say that gold is not a good investment, such as the crony capitalist extraordinaire Warren Buffet. Others point to the gold chart and say that this is why gold is a bad investment. Well, I admit that that argument is slightly counter-intuitive.

Goldman Sachs says gold will go down $500: LOL

The Financial Post has repeated a Business Insider article about Goldman Sach’s prediction that gold will go down $500.  Here is my comment:

The National Post loses credibility with these Business Insider “articles”. Henry Blodget, the founder of Business Insider lost his right to trade in the US when he openly pumped dot.com stocks but then said privately that they were worthless. Others are just partisan hacks who write anything to make the Obama administration seem credible or the US economy seem stable.

The facts are that the interest rate can’t go up because that would cause the economy to collapse. The United States can’t stop monetizing its debt because it has too large a debt, too large a budget deficit and unfunded liabilities in excess of 60 trillion dollars. So the factors which cause the gold to go up are actually becoming stronger not weaker.

Goldman Sachs is one of the banks that is trying to manipulate the price of gold down, and their report that gold will drop $500 is a case of short and dump on–i.e., the opposite of pump and dump–in short and dump on, you first short something, then you loudly claim as publicly as possible that it is going to go down for whatever reason.

When I went to the Canadian PMX in December there were no one oz. coins or bars of gold or silver. They said they would have delivery in January, which they did around the second week. Get it while you can. Imagine the price of gas went down to 50 cents a litre but you went to the gas station only to find out that it was going to be a couple weeks or more before they had any gas. Well, a lot of good it does to have falling prices if there is none to be had. The prices of gold and silver are manipulated and the world markets are a broken price setting mechanism. That is because of the large short positions (paper gold) sold by the bullion banks. While there is abundant paper traded every day, the actual physical gold and silver is scarce.

Price setting mechanism for gold and silver is broken

The law of supply and demand should dictate that when a physical commodity is scarce and there is unsatisfied demand, that the price of that commodity will increase. Yet in the last few weeks, the world market price for the scarce commodities of gold and silver, which are still at least a week away from physical delivery in our local Canadian PMX,  has shrunk.  How is this lower price helping to assure that buyers and sellers are able to make transactions?  Lower supply of the physical item should result in a higher price, and instead, we see the price go down. Clearly, the price setting mechanism is broken, for if there is supply but no demand, the price goes down.  In this case, we have great demand but no supply.  So the price should go up.  The fact that the price has gone down is proof that the gold and silver markets are manipulated and not free.