Me I choose to stand pat, how about you?

Fresh insight and lots to think about – and act upon. Thank you for you post and advise… Oh yeah, keep it coming — please!

Yes and that is why the governments have taken away your rights to owning a gun or knife (over 4″). We can’t have the people standing up for themselves now can we?

I’ll try to restrain myself, and explain this one more time. If one bank stops lending 95% for any given deposit, and goes back to only lending 90%, all the people borrowing from that bank can only borrow half as much. This is a mathematical fact, not an opinion. Westpac bank in Australia has reduced its LVR from 92% to 87%, which will reduce the MAXIMUM borrowers can borrow by 38%. Last year Westpac had 40% of the market for new loans. If this credit restriction is fully implemented, it will mark the end of the bubble in Australia. LVR restrictions are THE MOST INFLUENTIAL forces on house prices at this degree of leverage. Do the maths. It’s a fact.

I’ll give you one more very extreme example to get the message across. $10,000 deposit. The bank will lend you 99%. You can borrow $1,000,000 to spend on a house (ignore the fact you couldn’t service the loan, this is just so you understand the principle). Now the bank tightens its credit requirements by 1%, and will only lend you 98% on this deposit. You can only spend $500,000 on your house. A ONE PERCENT CHANGE in LVR has resulted in a FIFTY PERCENT reduction in house prices. If you can’t borrow the money, it just isn’t there to spend, regardless of sentiment. Prices are determined by banks and how much they are prepared to lend; emotion and how much people “want” to pay has damn all to do with it. This is mathematically inevitable: if Canadian banks tighten LVRs and the government can’t or won’t replace the ENORMOUS hole this will create, the bubble is OVER.

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#134 junius on 02.07.10 at 11:24 am

“I believe it will be U-shaped and we may even have a slight double dip in Q3 and Q4 of 2010 or even into 2011. What I do believe is that the Road ahead will be very rough for many people and certainly less good for all of us.”
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I wish i could believe in a U shaped recovery–but–
just cannot see it–
The biggest obstacle–imo–is “what” do we have for a driver,to pull us out of this?
What do we (the world) have-as an economic engine, to employ the billions of people on this planet?
Sure–some technological break through,could come along,some new innovation that can propel us forward–god forbid another world war–

Hyper-inflating the credit money system is over–
Credit has found a ceiling–it’s run its course–
All we have left is–Debt–with the collateral falling out from under it–

http://3.bp.blogspot.com/_nSTO-vZpSgc/SrZEryPbjkI/AAAAAAAAG7I/ASu_UKtTHNA/s1600-h/debt+vs+gdp.png

Over production of “everything” has created a glut on the market,that will take years to work itself off–
Too many houses–autos-china toys–just too much of everything and world debt–
like nothing ever seen before-

Ecco Van says above–

“Get out of debt and get liquid”
I agree with that-including having some gold–
I wont say buy gold–because people focus on the price–
This is wrong–the price is not about gold–
The price is about your money devaluing-
Gold doesn’t do anything–it just sits there–
Everything else revolves around it–
Gold has always been the anchor of the monetary universe–
This is how you should look at gold–the same for the folding dollars in your wallet–

http://home.earthlink.net/~intelligentbear/dj-au-ratio-lt.gif

3 times–the Gold/Dow ratio has been between 2 or 1-1

We are coming off a historic high ratio of 44-1
(there is your credit expansion)
notice the ratio spread is again narrowing-
Your gold buying power is increasing–

Here is a chart of CPI (consumer price index) vs Gold

http://www.wiltontech.com/purchasing-power-of-gold—100-year-chart/Purchasing%20Power%20of%20Gold.jpg?attredirects=0

Notice the sharp reversal in 2001–
There imo-is your credit money system hyper-inflating–
That is NOT run of the mill–inflation induced–
Look at the chart from 1980-2001–
That is inflation’s effect on gold–
Gold always keeps up with inflation–but–
does poorly–price wise–against most assets-during inflation–

Look at the long bond–(Greenspans conundrum)
He hiked rates 17 times–trying to “gradually” prick the bubble–and the long bond refused to climb–
imo–Gold and the 30yr could both sniff out hyper-inflation–
(btw–few agree with me on this)

http://finance.yahoo.com/echarts?s=^TYX#chart1:symbol=^tyx;range=1y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

It’s “never” about how many $ you have–or–the price of gold–
(ask the Zimbabweans )
It’s “always” about what a dollar or gold can buy–

Politicians hate gold–
Because gold governs governments–
No foreign wars–no printing money and buying votes–
No massive credit manias–
Fractional reserve banking–must also be killed–

Gold forces monetary discipline on people and more importantly on governments–
It saves people (savers) from theft via government/banker monetary inflation–
(dollar devaluation)–

Don’t worry about us being forgotten about–we will have a few chapters written about us and the future generations will say–

How could the Dutch have been so foolish to believe,that one tulip bulb,was worth mortgaging the family farm for-

How could the Canadians have been so foolish to believe,that they could borrow and spend their way to prosperity–

We are witnesses to a mania/insanity–an experiment in paper,that is coming unglued–
All the green shoots and talk of recovery–are– nothing more then an inflationary blow off,being goosed with your children’s future debt,by slime-ball politicians that only care about being re-elected

I survived cancer (bone) about 26 years ago. I did conventional therapy, and “mega” dose of Vitamin C. When I wasn’t barfing, and could stomach it, I took about 1000mg daily. I did this a year into remission. I had a strong “prayer” group of little old Italian ladies who were praying daily for me as well, though I didn’t know it at the time. I learned about the Vitamin C from Mr. Silva. I met him at the Hamilton Cancer Clinc at the Henderson Hospital. He told me how he started with the Vitamin C and how his cancer “shrank” in size (with conventional meds as well) They gave him 6 months and he stretched it to over 2 years. I used Vitamin C and mom purchased a juice extractor, and I drank “pure” fresh fruit juice and Pure fresh vegatable juice as well. You have to do a radical change in your life, and most importantly, you must have the will to live. The doctors and nurses at the Henderson were awesome…..just awesome. Believe it or not, I do have some fond memories of that experience.
……………

Wow – I recall 7 years ago when I was diagnosed with stage IV cancer and before my op. I had a bone scan. I had read and heard from others that bone cancer was extremely painful. Turned out my bone scan was negative. Great news.

I’ve had so many CT scans. Just had a PET/CT scan 2 wks ago and results were good considering. BTW, I only had to wait 2 weeks. Though I really haven’t changed my lifestyle, I do consume lots of vitamins, including those that bolster my immune system. My onc. considers I’m an “outside the box” patient. Last month she considered sending me to see a world renowned Dr. in Quebec City, depending on the outcome of the PET scan.

Sounds like you might be one too. I consider myself extremely fortunate, but try to take life one day at a time, yet, preparing for the future.

Oh please Garth, you’re not that naive. Housing is an emotional asset, and don’t even try to tell us you’re not emotionally attached to your bunker. Kinda hard to bury a fuel tank in the backyard of a rental, or install a permanent generator. Reducing it to figures isn’t even half the story.

I responded numerically to a numerical argument. Surely a university guy can understand context. — Garth

Hopefully this is not a signal that we are going to blame rich Chinese for our own housing bubble problem.
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It’s probably more of a sign that Global wants to butter up its real estate sponsors before they have to report on higher interest rates and more restrictive mortgage rules.

Here’s another Global a$$ kissing article.

http://www.vancouversun.com/business/Winter+Games+influence+local+real+estate+impossible+know+good+know/2531088/story.html