Comments on: Nah

By: David Gurvey

David Gurvey — Thu, 19 Nov 2009 12:16:59 +0000

It is always interesting to hear a “fall of the cliff prediction” but without timing…Sure, there will be a downdraft in real estate pricing in the future….but does that mean the house you buy today at $400,000 will fall to $250,000 or, the house you buy today for $400,000 will top out at $600,000 and then fall back to $400,000….Mr. Turner is a dangerous individual who accurately predicts the future….without any responsibilty due to lack of predicting timing…There are several fundamental reasons why real estate will rise into the near future…building costs are rising, and the BOC needs an accomadative monetary policy to spur a bit of inflation…This inflation will cause real estate prices to rise…causing price protection from those currently entering the market place..wages will start to rise in advance of rising interest rates, pushing up affordabilty…and, many canadians are taking 10 year mortgages at todays rates…Eventually rates will rise to a point where they push down pricing…as always…and the economic cycle will start again

There will be no inflationary increase without higher borrowing costs, for many reasons related to monetary policy and the bond market previously discussed here. The BoC is helpless to set its own rates independently of the Fed, since any country which is adding public debt at a record rate surrenders many policy decisions to the marketplace. No asset rises forever, and certainly not past the ability of purchasers to acquire it. All today’s sustained low rates are really doing is borrowing future demand. That’s why the future’s looking empty. Is that not obvious? — Garth the Dangerous

By: Evangeline

Evangeline — Wed, 18 Nov 2009 18:37:59 +0000

pbrasseur

Your perspective makes a lot of sense. I hope you will keep contributing to Garth’s blog

By: pbrasseur

pbrasseur — Wed, 18 Nov 2009 15:52:06 +0000

The US is no more insolvent than other nations, in fact it is probaly less (especially if you look at the real debt as opposed to the debt that includes future liabilities such as social security that are not calculated elsewhere, of course the medias mostly prefer the big scary numbers…). US debt to GDP ratio is more or less equivalent to Europe but its productivity is higher, taxes are lower and the demography is healthier. As for individuals, saving rates are up, a new and positive development and americans still control about 25% of the world assets…. I’d say bankruptcy is pretty unlikely and many other nations could head for trouble much sooner. At the worse of this crisis the USD was seen as a refuge, there’s a reason for that.

Gold standard is a nice idea indeed, only in a perfect world where there are no crisis, no market manipulation and no gross government intervention in the economy…

If there are crisis however the gold standard can become a very rigid scheme which can force you to restrict the money supply at the worse possible moment. In fatc the first country to get out the the great depression was Great-Britain after they gave up the gold standard.

That being said I would hope governments would start acting more responsibly and limit their interventions to prop up easy credit.

By: Bill-Muskoka (NAM)

Bill-Muskoka (NAM) — Wed, 18 Nov 2009 14:41:08 +0000

#103 Nostradamus Le Mad Vlad

The Tungsten article will soon turn into a fissionable material when the word becomes more wide spread.

I bet all the Gold aficionados here just wet their britches?