Bloody Rice Cakes Rising

In mid 2006, after I lost my job of seven years as a programmer, we decided to sell our house and move to Taiwan for a few years. At the time, our friends thought we were crazy and kept telling us that we wouldn't be able to afford a new place when we returned back to Seattle. Before we actually listed our house, I found another job that let me work from home by telecommuting. It was great opportunity and they even agreed to let me work from Taiwan! We continued with our decision even though we didn't have to sell at that point. Of course now that house prices are deflating, our friends have all changed their tune and a few of them are even stuck with an over-priced house or two. Unfortunately its all been downhill from that point for us too due to the Incredible Shrinking Dollar. Besides the fact that we now face negative real interest rates for saving, the New Taiwan Dollar has really strengthened against the USD, finally crashing through 30 just last week. Since we are earning an income in the US, living in Taiwan is increasingly becoming less of a bargain. While the rent is cheap and doesn't appear to be going up, everything else is.

I'm worried that the US is in such debt and the economy is like a junkie that must be constantly bailed out by the Federal Reserve. So, I called my grandparents just yesterday and asked them about the Great Depression of the thirties. They were just in their teenage years when that was going on. My Grandma, who is 96 years old, said that it didn't really affect them that much since they lived on a farm and had all they needed. When they wanted to "buy" something from town, they would just bring in a pail of cream or some fresh eggs and trade for it. My Grandpa on the other hand, lived in a larger city and his father worked at General Mills so he had lots of stories about giving away flour and biscuit mix to the desperate.

While I hope such a massive economic calamity doesn't happen again, you just never know. What I'm mostly afraid of is the sneaky efforts of the government to devalue the currency and take from the savers to bail out the banks, the borrowers and the speculators. I'm checking out all the options to keep our small savings from the house sale intact until we need them again including Australian Currency Funds and international bonds. While money in the bank is guaranteed, what good is the guarantee when they give you back the dollars and they're worth half as much? Still it could be worse ... we could have our account in Zimbabwe.

How much longer can I still buy a Bloody
Rice Cake for under one US Dollar??

Losing Money and Other Thoughts

That's me in the picture checking my investments... Not really, it's just for effect because there weren't really many people at the market center. I was told that there aren't nearly as many investors visiting these days because who wants to invest in this scary volatile market? Obviously they are much smarter than me, because while I own no Taiwanese stocks directly (I think some mutual funds do own shares of Taiwan Semi-Conductor) I am invested in some US Stocks and funds, and they have taken a considerable beating this week. Of a greater concern than the lackluster performance this year is the incredible slide of the dollar against all other currencies. Even the NT, although somewhat tied to the US Dollar, has become relatively stronger in the past month. We are all feeling the pain inflicted by this mess. Just last night I was ordering some fried up stuff and the lady told me that the price of her cooking oil has gone up from 450NT to 750NT per can since the beginning of the year. Of course all the other food costs are going through the roof. Corn is not only expensive, you can't even find it - I was lucky to get the last one and she said there would be no more.

There are all sorts of theories on the inflation and dollar slide. I believe these two situations are strongly related. It can be blamed on the the weak US Economy, the rise of other strong currencies like the Euro, or the fact that holders of US Dollars are giving them up and putting them back in circulation. My favorite for most plausible is that the US of A is s debtor nation and owes every other country in the world a boat-load of money. Just look at all the money spent in Iraq for the benefit of fat profits for the oil companies. The nation cannot possibly pay back the trillions in debt and is slowly (or quickly?) creating more and more money to pay it back. After all its just a bunch of numbers and they're not even on paper any more, most of them are stored electronically. Of course it may be too late to buy gold or move all our cash to Canada. Like they say in the investment prospectus "past results are no guarantee of the future results."


A few more Random Tid Bits

Related to photo gallery sites like mine, here is an interesting piece about the incredible Web Shots yo yo story. First, right before the .com bust in 2000, the founders sold the site to Excite for $83 million, then when Excite went bankrupt a year later, they bought it back for only $2.4 million. In a few years they sold it AGAIN to C-Net for $70 million. Now C-net decided they don't want it any more and sold it to American Home Greeting for $45 million for a net loss. That web site apparently is jinxed and should definitely cary the "Buyer Beware" label.

In other photo news from my hometown of Seattle, comes a story about a photographer who received an apology and $8,000 from the police after he photographed an arrest and was hauled down to the station and thrown in jail. The police had no official account of the incident and did nothing until the ACLU stepped in on the poor photographer's behalf.

That's it for this weekend's installment of the Foto-Zon Blog and I urge all those affected by the inflation and the souring economy to keep their head up and focus on the positive things in life. Family, Health and inner well-being. Later..