Banks hold reserves to pay out withdrawals or take losses on bad loans, not because law dictates they must. If you’re a bank and you don’t have sufficient money to pay out, in a classical banking sense, well then you’re pretty fucked.

In this day of money printing, I get that banks love having lower limits, because then they can play tight and fast with the houses money. But from their economy’s standpoint, what does lowering loan reserve requirements for their banks mean for China?

Is it a good thing, really?

Or does it indicate that Chinese banks are having some serious issues juggling their obligations without government intervention?

Not all central bank printing needs to lead to higher prices. Come on people. I mean, if an economy has 20X the currency in credit running around and the central bank doubles the currency, then sure the same credit level would result in higher prices. But if the central bank is printing because that 20X number is getting crushed down to 10X as bad loans and poor investments dampen the system, well then that printing really just gets you to about break even.

Especially looking at China’s inflation and housing problems, why on Earth do you think the China reserve cut is a good thing? If anything, it’s an action they shouldn’t have wanted to take.

I left late Friday evening to enjoy some downhill skiing in the frosty northern lands of Canada. The scenery was beautiful, the people rather friendly, and the architecture, motivating. I always enjoy seeing cosmetically adorned brick buildings; our homes should be ornate and representative of a people who care. Nothing puts me off more than functionally driven housing. If the post-industrial world has claimed one underserving victim, it is the myriad of grand style that has been supplanted with faceless and formless buildings dotting the landscape.

What does that say? I’m so poor I just can’t take the time to cast some concrete into a more pleasant shape. I’m so destitute that constructing living spaces in anything other than cubes is a hindrance to my well-being. The old neighborhoods we drove through were splendid to look at, and full of cathedrals and churches made with the tall pride of a people replaced with a generation whose catchall is “no one can build them that way anymore.”

Oh really? “Can’t,” or “Are too lazy to try?”

That being said, I’m glad to be back in the U.S. If I have one criticism to place against Canada, it is this: your costs of living are stupid expensive.

Between dropping $1.20 per liter for gas (well over $5 a gallon for those who don’t care about the metric system) paying 20-25% more for all goods we purchased (all beer including domestics starts over $10-12 a pack. I was “overjoyed” to pay $50 a meal for Mrs. Thaler and myself, when eating out and that was for “decent” food, not great), I simply cannot fathom how you Canadians get ahead in life. Those prices would easily devour the entire budget of most ordinary citizens. You really see how high the costs are, now that the two dollars are near par with one another; the old excuse of a weak Canadian dollar is no longer valid.

Oh, I’m actually playing devil’s advocate. I know exactly how you get ahead. Don’t pretend like I don’t know that Canada has a brazen and rampant black market for labor. I’ve heard the stories from before healthcare reform, when men and women could work some paltry handful of months a year to qualify for coverage, and then quit their jobs and work under-the-table on all sorts of odds and ends for the rest of the time. And I know that remnants of that dark pool still exist. There’s nothing like tax free income to escape the burden of high costs.

It’s a shame; I’d probably visit the country more if I could at least engage in the simple enjoyment of living without constantly needing to contribute money to someone else’s welfare or benefits. It’s fairly ridiculous how much money those price disparities eat up with just the simple necessities like food and drink. This concerns me, because it looks like the Democrats put us on a similar path not long ago.

Two men should be able to exchange as freely as possible between themselves, without having to constantly feign worry for others; it’s a pretty straightforward transaction until you start chaining the planet to the participants. I’m a firm believer that a homeowner should be able to fix the roof on his house as easily as possible, without resorting to hiding in the shadows to avoid the open hands. It disgusts me to think that we could be dealing with these price levels at home in just a few short years, if a prolonged liberal majority were to ever hold office.