Summer Vacation

I'm taking a bit of time off from blogging for the rest of the summer. I'll be traveling a bit and spending time in the outdoors to recharge my battery over the next month or so and plan to start blogging again in the fall when I hope to launch a new hosted site.

Also, if you're in Tallinn or Stockholm between August 11th-26th and want to get together let me know.

Parking Pain

I thought real estate prices were bad in Tallinn and things were getting real ugly there until I read an article about parking spaces in Manhattan going for $225,000 (~$2.5 million EEK). Yikes. Along with the congestion fees that Bloomberg plans on introducing it's going to be increasingly expensive to own a car in Manhattan, thankfully a lot of Manhattan's residents are fairly wealthy.

Paul & Katherine in the Globe

The Globe and Mail contacted my brother and Katherine before their wedding asking if they could do an article about them and the fact that they'd hired Prius "limos" instead of any other type of car. The article was in this past week's Style section with two nice pictures of Paul and Katherine.

Unfortunately the journalist didn't manage to get our family name correctly, talk about journalistic accuracy. :)

Full article can be read here.

More economics

More comments/analysis on the Estonian economy:

- Edward Lucas weighs in the on the overheating eastern economies.
- Estonian inflation climbs to 5.8% in June (Canada's inflation is 2.2%)
- Estonia's income inequality is judged to be among the worst in the EU.

Baltic Exchange

This article is pretty cool, apparently they are moving the historic Baltic Exchange that was destroyed by an IRA bombing from London to Tallinn. The building was taken apart piece by piece and will be put back together along with a lot of new construction somewhere in downtown Tallinn. Nice to see that someone cares about this historic place enough to do this.

Estonian economy overheated?

The Estonian economy has been firing on all cylinders for the past 2-3 years and a lot of people are predicting that the party is coming to an end soon, an article in todays Financial Times expands on this situation. Most recently Standard and Poors downgraded the Estonian economy to "negative outlook" because of the over heated economy, high inflation, increasing real wages and huge current account deficits.

The real problem with the Estonian economy is the government. The current coalition government has committed to a large amount of spending and tax cuts and it's unlikely that they'll be willing to sacrifice any of those commitments if the economy starts to turn sour. Since the Estonian Kroon is pegged to the USD Euro and most of the banks are owned by foreigners (thus lending decisions are made outside of the country with little regard to the local economy), the only outlet Estonia has to slow down the economy safely is through fiscal policy (ie. government spending). Unfortunately, instead of planning for the inevitable downturn and building surpluses, the government has pledged lower taxes and higher wages. If the economy slows down and the current era of cheap money all over the world starts to disappear we could start to see home foreclosures, small business closures and other serious problems in the short turn. Medium term, however, the Estonian economy should settle on 5-6% growth as it makes it's way towards the rest of Europe.

Can anything be done to ease the pain of a downturn? Only if the government is willing to reneg on some of it's promises (like continued tax cuts) and become more fiscally responsible.