And, to make sure I’m clear about this, I don’t believe any government can stop the economy from going bad, nor do I think they should (even if they could).

Churches and soup kitchens and food banks and all sorts of community organizations are far better prepared to help the citizenry than the government. Higher taxes only mean that the dollars collected are being wasted in government coffers and paying for bureaucrats when those dollars would be better in the hands of the needy through voluntary contributions to community groups.

To best way to aid the needy is for government to lower taxes right across the board (unfortunately, most governments believe they can spend your money better than you can).

To be safe, there is an inevitable need for worldwide deflation.

People with funds, like single mothers, natives, street people, and a number of assorted disparate groups cannot afford bread, milk and eggs.

Also, without deflation, nobody with a normal wage will ever be able to afford a house in the future.

The two main culprits are:

(1) Unions — they keep pushing wages higher, forcing companies to raise their prices to cover the higher wages, and then wage-earners in other fields also need a greater income to pay the extra costs. It’s cyclical.

(2) Real Estate sales and bankers. My parents bought a huge house in Toronto in 1975 for $57,000. They sold it in 1989 for $240,000 (a more than 400 percent increase). Two years ago the demand for condominiums was slowing. There were more condos across Canada than the number of people wanting them. So, to keep demand artificially high, real estate agents got first in line (sometimes paying someone to stand in line for day in their place) and bought up all the new condos that were being built, preventing home owners from having access unless they wanted to pay a higher price to the real estate agent.

Anyone buying a house or condominim today is going to be hurt financially. It’s a foolish decision. Real estate price will fall heavily over the next few years. Houses that were worth $200,000 at their height will be worth maybe $40,000 when it’s over (an 80 percent drop). The homeowner who puts $50,000 into a $200,000 home today, might end up owing $150,000 on a $40,000 house.

It’s best to hunker down, pay off all of your debts, and save toward the end of the depression, which is not only unavoidable but will be worldwide.

It was a huge mistake for the U.S. government to bail out Fanny or Freddy or AIG or the three big auto makers. Failure of each would mean we’d get through the financial crisis quicker. There were likely very rich business men who would have been happy bid on each of those industries at a lower than cost offer. But, instead, the gov’t bought then at a higher than cost price. Why would the failing companies sell to lower bidders if the taxpayer is going to pay more.

It also means the government is going to fail, financially speaking. The dollar is going to loss all of its value, like in Zimbabwe. While you can buy an apple for 25 cents outside the border of Zimbabwe, it costs $25,000 to buy one inside the border. At least it did a few months ago. The price is far higher now, somewhere between $30,000 and $50,000. Their money has no value.

Yesterday the Canadian dollar was almost at 80 cents, down from $1.10 at the beginning of the year. In the past couple of decades we’ve been below $70 cents. If it reaches 50 cents, it means you pay $2.00 for anything outside of Canada that would normally cost $1.00.

And, it would be a good idea to pray for Japan. They’re known for experiencing earthquakes. If they endure too many at one time, the wealthy Japanese citizens will feel compelled to pull their investments from world markets to prop up their country.

Of course, conversely, if they liquidate, it will mean the deflationary period will happen much more swiftly and the recover will kick in sooner.

The question is, would you prefer an extremely difficult financial time that is somewhat short, or a less difficult, but difficult nonetheless time that lasts for years? Would you prefer to think you can buy more with your money in two years from now, or a slower recovery in perhaps seven to ten year?

If the economy crashed heavily, eggs and milk and bread would be forced to come down in price or nobody will be buying it – they no longer have money or jobs. Houses and cars and gas wouldn’t sell at all, and costs would come down even faster since they are not as essential as eggs and milk and bread.

I actually thought these bubbles were going to burst in the 90s. But I was wrong, regarding the timing. The bad news is, if I’m wrong about the overall results and the need for the crash, it means prices (inflation) will never come down again to more affordable meet cost of living realities.

I’m not intending to monger fears, but to tell the truth. That’s where my loyalty lies.

Are the fundamentals still strong, Harper?