Crapless

He drives a school bus through the serpentine splendour of nouveau riche agrarian GTA. This is where the people live who would enjoy polo and The Hunt. If they only had a horse. Instead they have BMW sport utes and John Deere riding lawn tractors. Neither come with saddles.

Andre makes ten grand a year driving the rich kids to school, and he reads this blog. “I like being kinda out there,” he says of his lifestyle. “Besides, if I ever get in serious financial trouble, I can always ransom one of the screamers.”

Anyway, the guy’s a doomer. His entire net worth, about $60,000, is in little bars of silver piled in the basement of his rented house. Last September, when the metalheads were swarming this site telling us America was about to default on its debt, Europe was trash and 2008 was coming back, he swallowed the Kool-Aid. The silver cost him $48 an ounce, and today’s worth $33. That’s a loss of 31%.

“Maybe that wasn’t such a genius move,” he offers. And I tell him it was right up there with kidnapping.

It’s hard to discern how many people the gold nuts, apocalypse newsletter-floggers and bear ETF salesguys have scammed. Judging from all the doomer web sites and the number of people now shorting the market (and getting creamed, in the bad way) it’s in the millions. Too bad. Especially for guys like Andre, who can ill afford to have a pile of useless metal in the furnace room.

In fact, a plunge in volume on stock markets, even as they plod higher, shows just how badly informed retail investors are. Freaked out by meaningless and negative headlines (“S&P downgrades US debt!,” “Greek fixed income yields soar!”) billions of dollars have been shunted off into no-yield bonds, GICs, over-priced houses or the orange guy’s shorts.

Once again, human emotion is the greatest obstacle to success. It’s easier to scare the crap out of people than inform them. In fact, fear is the greatest single motivator. Not lust, hunger or greed. We’re most driven to take action when we’re scared.

I mention this in case you feel like being contrarian, which is almost always a profitable thing. There are reasons the Nasdaq is at the best level since 2000, or the Dow may this year establish a new all-time high. It’s all the more remarkable this is happening in a period of low volatility (the VIX has practically gone to sleep), when there are bidding wars for insanely-price real estate, and when most people put “no risk” as their main investing goal.

In fact, the flood of comments on this pathetic site every time I allude to the growing economic recovery in the US and stabilization of Europe, is an indicator all on its own. If most people actually believe America is a failed financial empire, that hyper-inflation could make paper money worthless or a global conspiracy has the fix on markets, then we have an unbridled opportunity. Cuz they’re nuts.

During the GFC and again amidst last fall’s meltdown I told you not to bet against America. Since then, equity markets have rebounded 30%, precious metals have pooped and (most importantly) jobs are coming back. Over 200,000 last month in the US and more than 240,000 the month before. This has breathed new life into consumer confidence, and been reflected in retail sales – up in January the most in five months. Want a little proof? GM was bankrupt three years ago. Last year it made profit of $7.6 billion.

Most importantly, more evidence the US housing market may be forming a bottom. Pending sales, as I told you a few weeks ago, have shot higher. Now confidence follows. A survey released Tuesday shows 60% of people have a positive view of the housing market and 70% expect property values to shoot higher over the next two years. Last year 52% thought real estate was a deal – with cheap prices and rock-bottom mortgage rates – and now the number’s jumped to 63%.

Of course, the US budget deficit is immense. Unemployment is still rampant. Too many people on food stamps. And at least three certifiable whackjobs are running for president. It’ll take years yet for the country we knew in 2004 to come back. But the fact it will should now be obvious. When corporate profits are at record levels and Apple has enough cash to buy Greece, those who tell you we’re on the verge of collapse have probably got something to sell. Like their precious metals fund. Or a subscription to Modern Suicide.

Will markets swoon again? You bet. But 2008 ain’t coming back.

So here’s the crayons version. Houses in Canada are absurdly overvalued and risky. Financial assets are largely unloved and undervalued. Seventy per cent homeownership should terrify you, given the financial track record of your friends. And the best defence in a stormy world is liquidity.

But you can ignore me. Most will. Perfect.

304 comments ↓

#1 TurnerNation on 03.13.12 at 9:02 pm

Oh oh I hope Garth did not take our cheapo advice ;-)

http://www.cbc.ca/news/canada/toronto/story/2012/03/13/toronto-gas-thefts.html?cmp=rss%26cmp=AFC-I78V04166919

Gas thefts on the rise, says OPP

CBC News
Posted: Mar 13, 2012 5:59 PM ET
Last Updated: Mar 13, 2012 5:58 PM ET

Police say the recent rise in gas prices has resulted in almost-daily reports from Caledon gas stations of drivers stealing gas.

The Caledon detachment of the Ontario Provincial Police says it gets reports regularly from local gas stations of drivers not paying for gas and just driving away.

#2 Beagle on 03.13.12 at 9:05 pm

Sounds great, now will the central banks stop with the emergency rates please.

#3 Mean Gene on 03.13.12 at 9:08 pm

Milk and cookies will never be the same, snif snif.

#4 totalinvestor.com on 03.13.12 at 9:08 pm

“..who can ill afford to have a pile of useless metal in the furnace room.” Garth
Precious metals are useless?
This coming from the former Business Editor of the Toronto Sun.
Garth you really need your head examined.

See what I mean? The metal-pumpers have such cogent and compelling arguments. BTW, I last worked at the Sun 24 years ago. It has yet to mature. — Garth

#5 Furst on 03.13.12 at 9:11 pm

FUURRRRST!!!!!!Yeah..

#6 not 1st on 03.13.12 at 9:13 pm

Garth, shouldn’t you mean “don’t bet against the printing press” Lets try to be accurate and honest now.

There will be no hyper-inflation. No reason to hold assets valued in other than dollars. Not in this lifetime. — Garth

#7 I'm stupid on 03.13.12 at 9:14 pm

Will the dollar collapse. It will most defiantly, I’m just betting it will collapse after I’m dead. Every empire falls its just a matter of time. You could be a Roman betting the empire will fall and you would be right. If your in the first 100 years you would need to wait another 700. Even if it did chances are I would not live to see it. It’s funny that doomers stockpile gold and silver because they actually think it would happen. They all fail to realize they might be dead. You can hoard gold, generators, can tuna and what ever else you want and it won’t make a difference.

#8 not 1st on 03.13.12 at 9:17 pm

One of the biggest scandals in human history happened today around 2 pm. That is the big banks in the U.S. successfully pulled the wool over 350 million people’s eyes. They spent the last 4 year shuffling their massive debt, toxic assets and dead liabilities to off balance sheet so they could pass the bogus stress test which should have happened 3 years ago. These institutions are dead broke and are in zombie mode just like their Japanese cousins. They hold trillions of bad debt yet act like its business as usual. Don’t be fooled.

And your metal went down 30 bucks. — Garth

#9 T.O. Bubble Boy on 03.13.12 at 9:25 pm

I assume that it was intentional that the link for “evidence the US housing market may be forming a bottom” is an article promoting the HAM story?

#10 Otto Doppelganger on 03.13.12 at 9:31 pm

To me, the equity markets have been far too complacent on lethargic volumes. Slowly upping my vxx position.

Call it cynicism, but I think once the big fish convince the retail investor to return, that’s when the fear headlines will start to appear.

Methinks there will be some obsession (unfounded or otherwise) with China’s growth rate. We’ve numbed to worries in Europe, so time to pick another target.

#11 earlymidlifecrisis on 03.13.12 at 9:36 pm

pretty sad.
http://www.cbsnews.com/video/watch/?id=7361572n

That clip is 11 months old. What is your point? — Garth

#12 Min in Mission on 03.13.12 at 9:40 pm

Probably delivers to divorce lawyers, everyone knows they are full of

#13 Herb on 03.13.12 at 9:45 pm

… 60% of people have a positive view of the housing market and 70% expect property values to shoot higher over the next two years.

Careful what you use as evidence, Garth. Canadian percentages of positive views of the housing market and expectations of higher property values would be at least as high, and we know where our housing market is going.

It is relevant in a society when houses lost a third of their value. — Garth

#14 eaglebay - Parksville on 03.13.12 at 9:47 pm

#198 Van guy on 03.13.12 at 6:46 pm
#194 eaglebay – Parksville on 03.13.12 at 6:10 pm
“What’s your point? Are you trying to be racist, by hinting something? C’mon old man, is that why you live in the woods?”
_______________
Typical, only Caucasian are racists.
I know you’re Chinese. New Canadian.
I choose to live close to nature, a step back for me being a city slicker. Lived in Toronto for 25 years.
I don’t think that I’m that much older than you, maybe a bit older. I could probably mop the floors with you before breakfast.
So, don’t be so upset. We’re all in the same country and we should accept each other.
What’s picking on older people make you?

#15 Gary in Kelowna on 03.13.12 at 9:49 pm

Garth, I have one friend here in Kelowna that managed to sell his house for $550K last month. He had no debt. Promptly goes out and buys another house to keep his spouse happy and takes on more mortgage debt. Another friend with a house worth about $800K(and falling as we speak) that was proudly parading his silver bars at a dinner party a couple of weeks ago.
I was tempted to speak out with the Garth Turner philosophy that we have followed for years but thought the better of it. How can we help these people?
Keep up the good work. Thanks.

#16 Big Bad white rock on 03.13.12 at 9:53 pm

I have a friend who bought a rancher (about 5 months ago) in white Rock for about $ 500,000 walking distance to the beach. He now plans to tear it down and build a house which he says will cost no more than $ 450,000. He said that he will sell it within the next 5 months for $ 1.3 mil and make a handsome profit.

Garth , What is your take on the builders/developers (house, Condo, townhouse etc.) do you think they will continue to make crazy money as they have been the last 5 – 6 years?

#17 sidera on 03.13.12 at 9:56 pm

Sure his silver may be down right now, but maybe revisit him in a couple of years. The economy may be in a “recovery” in the states, but the cost of living is not going down any time soon.

With all your knowledge about the real estate bubble, you may sound a little austrian…. But please Garth humor us, what is the ultimate value of all fiat curencies?

It’s what you live in. The goal is to have lots of it. — Garth

#18 TaxHaven on 03.13.12 at 9:57 pm

I suppose you’re one of those characters who thinks MORE debt is the solution…

Give the governments TIME! They’re not finished subsidizing deadbeats, propping up asset prices, bailing out failures, tinkering, price-fixing, monopolizing and printing. They’ll hang themselves s-l-o-w-l-y…

In the meantime, buy gold and silver. Not because Mad Max and Raccoon City zombies are approaching and NOT because you expect to shop Walmart with precious metals in hand.

Because they can’t be PRINTED.

Jim Grant: “The Fed only knows how to print.”
David Stockman: “Buy baked beans, gold… – anything that can’t be printed.”

And tell the bus driver he’s on the right road and to be PATIENT.

#19 Retired Boomer - WI on 03.13.12 at 10:02 pm

Today I moved my 401K retirement account to my favorite brokerage. Decent number, too. Their concierge service called to say the transfer has been completed. Thursday I can select the funds I want that hard-saved nest egg to be invested.

That has been painstakingly sketched out, by myself, with the input of a variety of financial planners -who varied quite widely in knowledge, and -or- competence. (One must understand some had my best interests in mind, while others appeared to have their best interests in mind). That is business in the US, and caveat emptor still applies in purchasing financial products, as with everything else. So be it.

The market has been on a tear of late. Will it fall? Sure, when -I don’t have a crystal ball that works, do you?
Bonds pay nothing, but you DO need bonds for balance, as well as REITS, maybe a commodity play, or two. I like mutual funds, domestic, foreign, large cap, small cap, mid cap. Money is a lot like manure. Left in a pile, it stinks & draws flies. Spread out judiciously, it helps it to grow, like the fertilizer manure.

No use for metals, or sector type funds they take too much attention, and your bet could be quite wrong. I have been an indexer for over 25 years, and it has served me well. I get the market, no more, no less. Costs matter, and index funds are darn cheap here.

So, to put this nest egg to work later this week in a variety of ways. Will it always be blue skies? Get real, heck never, but for today maybe it is gone be warm & sunny. Tomorrow it will rain, that’s why I’ll invest some for that rainy day later.

No, the place isn’t going to hell tomorrow, neither is Canada. We have been through most of the idiocy in real estate, you are just gearing for the crescendo! Take it seriously, ratios rule aster all the hyperbole is over. Debt would be fatal for a 60 yr old retiree like me. I like my freedom and security.

Thus far retirement has been good.
Retirement has been wonderful thus far.

#20 Derfman on 03.13.12 at 10:02 pm

So let me get this straight. The Canadian housing market is about to collapse but we should invest in the market?
The North American consumer is tapped but they represent a meager 70% of the economy so we should invest?
The BLS puts out any number they feel like (it is “seasonally adjusted”) yet you are trying to convince us that because 240 000 jobs were created we should be dancing in the streets? They need that every month for 6 years to get back to the employment level of 07…never mind the growth in population. Banks change accounting rules at will and everything is just fine…awesome. Sounds like Enron to me.
BTW GM counting a “sale” once a car is loaded on a truck to the dealerships, which are 20% overstocked doesn’t excite me much.
Good luck Garth….things must be getting very slow at the office.

See what I mean? — Garth

#21 Tom from Mississauga on 03.13.12 at 10:03 pm

Who was the commenter a few months back that you said you’ll buy the S&P 500 and they buy a house in Kelowna and check in 6 months you did better? S&P up 17% and Kelowna RE…
http://www.cbc.ca/news/canada/british-columbia/story/2012/02/15/bc-okanagan-home-foreclosures.html

#22 Tim on 03.13.12 at 10:06 pm

One minor detail you left out: the Fed is not raising the interest rate-yet again. Of course this has implications for rates here. Those of us waiting for a big correction will have to wait quite a while if it takes a significant rise in interest rates to bring this on

The rates are not correlated, and the Fed announcement was not news. — Garth

#23 truth hammer on 03.13.12 at 10:07 pm

The macro on gold and silver is intact, nothing goes straight up…..gold has proven that 11 years in a row pulling in more than 10% oer consistently. The problem is that most don’t understand the big picture economics of quantitative easing. Superimpose a chart of metals and the M3 and there is no longer any question. As long as we race to the dollar by printing paper dollars, commodities..like gold and silver….will continue to increase over the long term. The immediate downside of the QA and ZIRP is the hyper inflation we’ve seen in consumer disposables…..like food…..and in consumer durables…like real estate….all doubling every five years as if magic has occured…..so strange…..not!!

For this exact reason you must buy the banks, utility co’s….oil and gas….rocks, tree…….if you’re scared of this….buy only dividend payers…..but kids…the macro is solid. You’re not getting richer in real estate….the unit of exchange is becoming increasingly more worthless as time goes by. A dollar is worth just pennies in purchasing power compared to three deades ago…the steady erosion of worth is being hidden by the hype of increased value……sheeple……wake up.

#24 DodgedBullet on 03.13.12 at 10:08 pm

I’m stunned to the point I can’t bring myself to again buy into the NASDAQ, since I made 22.52% on my initial investment!

Thanks for the advice, Garth!

Ben.

#25 Mr.Lee on 03.13.12 at 10:09 pm

As with everything in life, look at the numbers. Metals and their performance over a 10, 20, 30 year period. Same homes true for equity markets, fixed income, commodities and the like.

Diversification is the rule to live by. Will the US collapse under the large debt weight? Will the toxic derivatives that were transfered to the Fed’s balance sheet be dealth with? Will Canada’s housing frenzie end?

Who knows, but a few things are certain. Each one of us controls our destiny for the most part. What we invest in, what we buy, and what we choose believe. So as a great man once said, “you ears yet do not listen, you have eyes yet you do not see.” Ask yourself if you fit into this as well.

#26 Uh Oh Canada on 03.13.12 at 10:13 pm

“When corporate profits are at record levels and Apple has enough cash to buy Greece, those who tell you we’re on the verge of collapse have probably got something to sell.”

The opposite is true too. When ‘experts’ ignore the numbers and paint a false rosy picture, they too have something to sell. It’s very interesting that all the numbers look great just before the presidential election- Oh yeah, I call BS.

The election has had zero impact thus far on the economy. — Garth

#27 Timing is Everything on 03.13.12 at 10:14 pm

#196 eaglebay – Parksville

Good stuff. At least you actually use the torque/HP of the DuraMax. It is a great motor from what I can tell. The jeep gets us where we need to go…Rain, snow (deep), shine, pavement, back country or off-road. Great all-round vehicle.

#28 NotAGreaterFool on 03.13.12 at 10:16 pm

Online house listings expose sellers to assault, break-ins, TREB says

http://www.theglobeandmail.com/report-on-business/economy/housing/online-house-listings-expose-sellers-to-assault-break-ins-treb-says/article2368525/

What next?

#29 Goldensilver on 03.13.12 at 10:18 pm

Well I wish I had a pile of precious metals in my basement. If only someone could have advised me when I was a younger man.
Quick analogy why. I bought my first home in 1971. I was 21 years old. Paid $20000. Today that same home is selling for $279000.
In 1971 Gold was trading for $35/ounce. If I had bought gold instead of the house I would have purchased approx. 570 ounces of gold. Today that gold@ [$1700/Oz] is worth $970,000.
And don’t worry I have done all the math for the past 40 years if I had rented instead of buying and how that would have diminished my profit in gold. But without going into the intricate details I can tell you I would still be ahead by by at least $700,000.
Don’t think for one minute that Gold and Silver are not an ideal investment. I would like someone to prove me otherwise.
Oh and by the way it beats every other scenario too, including if I had rented the house out as an investment.

#30 Sebee on 03.13.12 at 10:20 pm

So many financial geniuses have scammed those they advised no wonder masses are gun shy. I get three phonecalls a day offering me their strategies to possibly be parted with some finds. It takes a while for the masses to come around and accept risk, just like it is taking them a while to realize risk on Canadian RE. But if US RE is picking up to close the average difference in price to Canada won’t that likely prop us up longer?

#31 Canadian Watchdog on 03.13.12 at 10:25 pm

Year-To-Date Asset Performance

Gold 0.1%
Silver 13.7%
Copper 16.3%

REIT Retail 12.1%
REIT Hotel/Motel 11.2%
REIT Office 9.2%

#32 Vulture Fun on 03.13.12 at 10:26 pm

Do you remember the last time the VIX was this low? Perhaps four months before a major crash? I’d rather use other indicators to gauge the health of the global economy, like the labour participation rate in the States (not the cooked 8.3% unemployment figure), or the debt level in the States that has a 0.9 correlation with the price of gold, or the recent bankrupty of Greece, which even the corrupt ISDA acknowledges as a default, triggering CDS payments. Keep frightening the sheep, Garth. It only means a better price for me. Perhaps your bus-driver doomer isn’t typical of most recent silver buyers, dudes who have been accumulating since 2000, dudes who are now billionaires sitting on great piles of “useless” metal.

Are you a billionaire? — Garth

#33 Smoking Man on 03.13.12 at 10:30 pm

My son, remember the dude that was going to join the army after a break up, he got a sales job to make some xmass money before basic training. He started with a company that did door to door sales He killed it top sales dude. With my demented morals and guidance.

Well Today he just switched teams, working for a big name co. 6 figure base plus commish on the backs of the tax farm slaves he teaches and manages. NO Certificate on the wall. I love it.

I taught him well, in 6 wee mouths his life went from a possible suicide to king of the hill.

The only way to make loot these days kids, is to take from the dumb and give to your self.

What freaks me out whenever I bust all of your balls when I say a pay check sucks, no one responds Positive or negative. Your teachers did so much damage.

I’m am trying to help you shit heads, In Canada productivity and innovation is stolen from the creative people, and the reward goes to the thief.

The only thing that has value is bring in loot.

Smoking Man a proud immoral scoundrel.

#34 TurnerNation on 03.13.12 at 10:30 pm

$48? A retail investor buying the top of market? Say it ain’t so:

http://finviz.com/futures_charts.ashx?t=SI&p=d1

#35 Shane on 03.13.12 at 10:35 pm

#15, I know how you feel! I have given up explaining and talking about this w/ my friends or family…they all think we are crazy for renting. Wish we could do more.

#36 coastal on 03.13.12 at 10:36 pm

Looks like the dumb asses buying in Vancouver and Toronto didn’t get the memo, go south young, rich leaded toy factory owner.

http://www.bloomberg.com/news/2012-03-13/asian-buyers-buoy-new-homes-in-california-s-orange-county.html

#37 Don on 03.13.12 at 10:37 pm

From an earlier post

277 The Thing in the Basement on 03.11.12 at 10:35 pm

262 Don – Parksville-Qualicum and area was a retirement
community long before 1996. Also, median age for qualicum beach 2006 was 61, though in 2001 was 58.

http://www12.statcan.ca/census-recensement/2006/dp-pd/92-596/P1-2.cfm?TID=0&Lang=eng&T=CSD&PRCODE=59&GEOCODE=21023

Parksville median age is a few years younger.

********

Thanks for the obvious, but Parksville’s average age is also increasing and you can’t bullshit me on Qualicum I have lived there all my life.

Still no answer to my original question: WHO the HELL will buy the houses when the older loving generation moves on?

Last year they were talking about closing the local high school and shipping them off to Parksville, but the town folk were aware that the kids spend money and the old only shop at QF (food store). Who will buy the houses? For sale signs everywhere… the obituaries in the paper increasing daily, houses for rent for under $1000 everywhere and no HAM.

And yet you quote statscan….and no Qualicum before the early 90’s was never a retirement community – not like it is today.

#38 blase on 03.13.12 at 10:37 pm

the #1 misunderstood word is racism. It has nothing to do with being white, and everything to do with making pre-conceived judgments about someone based only on their race/skin colour.

Therefore, black people who hate white people are racist. Koreans who think they are better than “dark skinned” S.E. Asians are racist. And Natives who think white people are evil are racist.

I think racism is a word that has lost all meaning, and has become a crutch for weak-minded, under-educated bafoons.

#39 Don on 03.13.12 at 10:39 pm

Prices are falling on Van Isle as we post.

#40 Bob knows best on 03.13.12 at 10:44 pm

Sigh.. Garth you’re drinking the koolaid yourself.

New jobs? Mostly part-time, and unemployment only going down because the BNS is arbitrarily reducing the size of the labour pool (those ‘looking for work’). They’ve been doing this the past decade and have accelerated doing so recently.

Record corporate profits? Only because the US dollar has fallen against international currencies. They’re not making more, it just seems like more because they’re making it in non-USD and converting back to USD to report their incomes.

Look an worldwide industrial growth – at a 2 year low. China on the verge of manufacturing contraction (look at PMI – GDP doesn’t tell you jack).

And back to jobs again, may I remind you that jobs LAG the economy. Time and time again we’ve entered recession while consumer spending rises and unemployment drops. And then we exit the recession and we’re still bleeding jobs. You’re going to have to turn that rear-view mirror 180 degrees and start looking at indicators that actually mean something, not past corporate profits and employment (lagging) indicators.

Oh, I see. Retail sales are a bad indicator. Jobs are a misleading indicator. Corporate profits indicate nothing. Housing intentions signal nothing. Equity markets are no indication. Did I miss anything? Like you indicating nothing? — Garth

#41 Smoking Man on 03.13.12 at 10:47 pm

What kills me me is The first gig matiraialized on pure bull shit, the srcond gig on refined artfull bullshit. The next faze of his life will be on bullshit he beilives.

I need to start a school to save this country for the inhabitance the schooled. are so fd

#42 mad vancouver on 03.13.12 at 10:48 pm

http://www.cbc.ca/news/canada/british-columbia/story/2012/03/13/bc-vancouver-families-priced-out.html

#43 Mike in Vancouver on 03.13.12 at 10:55 pm

“And at least three certifiable whackjobs are running for president.”

I count four: Romney, Gingrich, Obama, & Santorum.

Ron Paul, on the other hand, is an angel from heaven.

#44 Canayjun on 03.13.12 at 11:00 pm

Here’s an interesting article on the vix:

http://www.marketoracle.co.uk/Article33575.html

#45 Amazed on 03.13.12 at 11:03 pm

Debating house prices and investment strategies is a good problem to have… RIP Tori Stafford :( can’t get today’s news out of my mind… Horrible for her and the family. Sorry off topic… But a reminder to hug your kids and be careful of all the nut jobs out there. This blog is a welcome relief from the rest of this weeks news. ..

#46 guy from toronto on 03.13.12 at 11:04 pm

hey Smoking Man, nice to see that your superiority complex is alive and well. and that you’re qualified to judge everyone based on your standards.

give me a break.

BTW I must admit that it is hard to tell if your posts are actually for real, or if you are some kind of satirist trying to be all “out of the box”. But no matter what, you sure are full of yourself.

And pretty lame.

#47 Amazed on 03.13.12 at 11:05 pm

Back on topic… More and more people are stretching themselves thin… Cutting back on all potential expenses.. Lots of change coming.

#48 not 1st on 03.13.12 at 11:07 pm

Nasdaq 3000?? I tried that in 2000 and it worked out so great. Never again.

This is tech bubble 2.0 in the making, mark my word. We will be looking at it in a few years again asking what happened. These companies might have some earnings this time, but the internet is a fickle place and it won’t take much to turn people on to something else or tech to eat itself.

#49 Kits on 03.13.12 at 11:15 pm

Very good points Garth. Thanks said, I would argue the current stock market has equal parallels to the housing market. Three years ago you wrote that the housing market was over valued. Yet, the housing market has defied logic and prices have significantly increased since then. Inversely, the stock market today defies logic from a risk adjusted perspective. The market may go up from here but the risks are weighted towards a decline.

#50 Webcanto on 03.13.12 at 11:16 pm

I don’t know having a bit of gold and silver isn’t that crazy. In 2008, gold was at around $750/oz and it’s now at $1677/oz, that’s more than double. Silver was at around $9/oz and now it’s at $33/oz. I do agree though one shouldn’t have all their money in one thing. Having all your eggs in one basket is crazy.

#51 Steven Rowlandson on 03.13.12 at 11:22 pm

Stocks destroyed my first life savings and silver gave me the value of my first life savings back and then some. Blessed be silver for ever Amen.
For those who bought at $48 an ounce don’t worry about it, buy more for less and average down.
With financial assets estimated at 200 trillion and the bullion supply for silver being some what limited 48 bucks an ounce is almost nothing. May be 5 or 10 ounces of silver could buy a very nice house in the near future. Just a thought FWIW.

#52 Canadian Watchdog on 03.13.12 at 11:26 pm

Oh, I see. Retail sales are a bad indicator. Jobs are a misleading indicator. Corporate profits indicate nothing. Housing intentions signal nothing. Equity markets are no indication. Did I miss anything? Like you indicating nothing? — Garth

He’s is correct Garth. These are different times that require different metrics to measure real growth, more so in inflation adjusted terms, otherwise you’re just looking at nominal figures go up.

The public is getting smarter faster then you think.

He is incorrect, as time will (again) prove. — Garth

#53 Pete in Barrie on 03.13.12 at 11:27 pm

“And at least three certifiable whackjobs are running for president.”

I count four: Romney, Gingrich, Obama, & Santorum.

Ron Paul, on the other hand, is an angel from heaven

That’s great, Mike. I too was wondering why Garth didn’t say four whackjobs; then I realized that he probably would consider Romney at least acceptable. I love Ron Paul, only because he is completely honest (he truly believes his whackjob views). Unfortunately he is irrelevant, and after tonight it will only be Romney and Santorum left in the battle.

#54 Patiently Waiting on 03.13.12 at 11:30 pm

#16 Big Bad white rock on 03.13.12 at 9:53 pm

I have a friend who bought a rancher (about 5 months ago) in white Rock for about $ 500,000 walking distance to the beach. He now plans to tear it down and build a house which he says will cost no more than $ 450,000. He said that he will sell it within the next 5 months for $ 1.3 mil and make a handsome profit.

Garth , What is your take on the builders/developers (house, Condo, townhouse etc.) do you think they will continue to make crazy money as they have been the last 5 – 6 years?
=====================================

I would be a little more careful if I was your friend. Sales in the Valley have plummeted 30% so far this month in comparison to same period last March. Of course your friend would never get this kind of info from his friendly real estate agent . . .

FVREB STATS – as of March 13, 2012
8 of 21 Working Days
MARCH 2012 Listings 1134 Sales 407
MARCH 2011 Listings 1151 Sales 582

#55 Mr Buyer on 03.13.12 at 11:32 pm

#14eaglebay – Parksville on 03.13.12 at 9:47 pm
Typical, only Caucasian are racists.
………………………………………………………………….
Maybe I am stepping into the middle of a conversation here but I can assure you that the statement “only Caucasian are racists,” is patently absurd. I have spent the last decade listening to the Koreans dissing the Japanese and Chinese, the Chinese dissing the Koreans and Japanese and the Japanese dissing the Koreans and Chinese. What is even more surprising is the unbridled and widespread nature of it. The only reservation I detect is the people I am speaking with know I labour under a notion that racism is bad and thus they offer their opinions in measured amounts. I can assure you that while caucasians have conducted their racist endevours in the light of recent history and raised it to an industrial art form that saw its climax at the ending of the second world war, we caucasians are by no means the birthplace of racism and are not even the major practitioners of the henious art relatively speaking. We have to stop dumping on these young white children and in particular the boys. There is a battle for opportunity upon us and we can not approach it thinking we ourselves are undeserving and second rate from any perspective and in particular a moral one. It is hard to get what you need when you have been taught you are undeserving in one way or another.

#56 FTP - First Time Poster on 03.13.12 at 11:40 pm

It’s all the more remarkable this is happening in a period of low volatility (the VIX has practically gone to sleep)

The VIX went to sleep just before the crash of 2008 too. I think retail investors are to be cautious, keep some powder dry and grab on big dives in the market. It’s not a buy and hold market, too much gaming going on imho.

#57 Timing is Everything on 03.13.12 at 11:41 pm

Still waiting for BCHydro…37 hours and counting. Just wait until we have a real emergency. Oh, I don’t know, maybe an earthquake or something…Not just a bit of wind taking down some power lines. Should be ‘interesting’. And we’re just 10 minutes to the Victoria airport. Ha!

Luckily, we’re prepared and have plenty of sno-cones in the bunker. I just feel better having stuff that is truly needed when the system (the grid) stops for some reason or another. I stock up for 14 days, minimum. Longer during the winter. Good practice run…again.
————————————————
#37 Don

Do you know Howie Meeker? He’s 88 years old now.

‘He currently lives in Parksville, British Columbia.’ -wikipedia

#58 Debtfree on 03.13.12 at 11:44 pm

sure hope canada is doing better than these poor guys .

http://www.msnbc.msn.com/id/46719097/ns/local_news-west_palm_beach_fl/#.T2ATw8xhwy4

#59 Mr Buyer on 03.13.12 at 11:51 pm

#29Goldensilver on 03.13.12 at 10:18 pm
Well I wish I had a pile of precious metals in my basement. If only someone could have advised me when I was a younger man.
Quick analogy why. I bought my first home in 1971. I was 21 years old. Paid $20000. Today that same home is selling for $279000.
In 1971 Gold was trading for $35/ounce. If I had bought gold instead of the house I would have purchased approx. 570 ounces
……………………………………………………………………….
This goes to the heart of housing as the goto speculation appartatus. This gentleman speaks of the price of a house and the equivalent in gold but it is exponentially easier to get money from the bank to speculate on a house than it is to do so on gold. Stroll into a bank and try to get Xk to buy gold and then try it to buy a house. The precious metals speculation apparatus does not permit the extent of leveraging that housing does and thus a markedly smaller pool of participants are available.

#60 Friendship7 on 03.13.12 at 11:51 pm

“In fact, a plunge in volume on stock markets, even as they plod higher, shows just how badly informed retail investors are.”

That’s precisely the evidence you have used to indicate the housing market is rolling over. Why does it bode ill for the housing market but not the stock market?

An illogical comparison I did not make. — Garth

#61 TZM on 03.13.12 at 11:52 pm

#53

Paul will run as an independent.

#62 Wes coast on 03.13.12 at 11:53 pm

This is a quick back of envelope calculation but considering the USD has lost 40 percent of its value since 2008 and the DOW hit its peak at that time of 14,198 it would take a DOW of 23,633 just to reach the same peak in similar dollar terms. The download is priced in a fiat currency that has been diluted – that can’t just be ignored. That’s like the day President Bush declared victory in Iraq on that air craft carrier. The problems were just getting started. It’s not the end of the world for sure – but it’s not anywhere close to the end of the great financial correction either.

#63 Wes coast on 03.13.12 at 11:55 pm

My previous post ‘download’ should be DOW. Damn autocorrect.

#64 The Thing in the Basement on 03.13.12 at 11:56 pm

37 Don – steady there qualicummer, but who is BSing? Of
course there are more retired people there now – there is
more retired people everywhere. More people in general
on the east coast of VI too. Will people keep moving here? I dont know. We lose resource jobs but a big
retiring demographic coming up.

Funny quip a buddy used to say when working in
Parksville-qualicum. “I need a shirt that says ‘deaf mute’
so the old farts wont bug me”. That was 1981.

#65 Rental monkey on 03.13.12 at 11:57 pm

@ Smoking Man:

Whens the book coming? I want to learn to not be a tax farm slave anymore. I suspect morals and ethics will need to go out the window.
Then, I can utilize the great Garth’s wisdom for savvy investing.
I’m just not sure I have it in me to be a douche 24/7.

#66 Canadian Watchdog on 03.13.12 at 11:59 pm

He is incorrect, as time will (again) prove. — Garth

Take a good look at this S&P screenshot Garth. http://i40.tinypic.com/34njqcl.png

From the 2008 trough to peak it cost the US/Canada nearly $1 trillion dollars in stimulus (no including bailouts) just to save the economy and get the markets back up to near peak level. That stimulus has now run its course and if they want the market to continue up, they’re going to have to double down because of inflation.

The markets aren’t going anywhere without another $1-2 trillion dollars injected directly into the economy, and within a few weeks time, once Q1 earning start rolling in negative, you’ll see who’s really crapless and who’s not.

PS. Those robot algos now trade at picoseconds, not milliseconds like 2008. They’ll rape everyone’s profits before they can blink.

#67 static on 03.13.12 at 11:59 pm

Gold and Silver investors will be kicking themselves. Make sure to account for currency adjustments when you calculate the returns.

Garth, I will bet that the DJIA does not make a new hight this year, or next.

#68 Victor on 03.14.12 at 12:03 am

#31 Canadian Watchdog on 03.13.12 at 10:25 pm

Year-To-Date Asset Performance

Gold 0.1%
Silver 13.7%
Copper 16.3%

REIT Retail 12.1%
REIT Hotel/Motel 11.2%
REIT Office 9.2%

========================

Ironic post from you given how bearish you’ve been in the past few months re: REITs. After a stellar 2011, sure looks like they’re doing just fine again this year.

#69 Keith in Calgary on 03.14.12 at 12:05 am

Not “phurst”……..heh.

The US markets currently have the lowest volume and thinnest trading stats I have ever seen right now.

Pretty much every single individual retail investor has vanished, and all that is left are the hedge funds, investment banks, and pension funds moving money around between each other, and trying to out run the computer trading programs amidst a sea of freshly printed dead presidents that are keeping the entire ponzi scheme afloat.

I’ll keep my Real denominated Brasilian government bonds which have a 10% coupon…….obrigado.

#70 not 1st on 03.14.12 at 12:08 am

I suspect this little run up in the DOW and constant CNBC coverage of the “bull recovery” will have the effect of trying to lure the little guy back in. Right now, volume is so small that it takes very little of anything to move prices. Thats not a bull run.

If they can entice all that money on the sidelines back in, then the institutional investors and hedge funds can exit the top again and leave the average joe with the garbage again.

I do not believe for second that the U.S. consumer and manufacturing is on the upswing no matter what stats they cook. I do believe that cheap stimulus money always finds its way back to wall street.

#71 HDJ on 03.14.12 at 12:08 am

“Once again, human emotion is the greatest obstacle to success. It’s easier to scare the crap out of people than inform them. In fact, fear is the greatest single motivator. Not lust, hunger or greed. We’re most driven to take action when we’re scared.” Garth

I agree. And for a few years your gloomy message scared many of your blog-watchers into selling their homes and renting. House prices continued to increase and, consequently, they lost big.

Real estate values are rising in small portions of the country only. In most, they have flatlined or are in decline. Try to get out more. — Garth

#72 Waterloo Resident on 03.14.12 at 12:20 am

For the past 2 mnths I’ve had half my investments in SSO, the other half in AAPL . Just today alone both of them have gone up about 2.5%, thats including the CDN dollar exchange rate into account.

The way I see it, this MASSIVE low interest rate policy is creating a MASSIVE bubble of corporate profits world wide, and that will in turn create a MASSIVE stock market bubble over the next 3 years, one that I plan on riding up to the top, then get out of once I see it starting to pop.

As for houses / Condos in the GTA area: Who knows? Its all down to emotions of the people on that one.

#73 Canadian Watchdog on 03.14.12 at 12:21 am

#68 Victor on 03.14.12 at 12:03 am

I am bearish on REITs and have started pivoting into inverse ETFs that are dirt cheap right now, and if the market goes up in the next few weeks they’ll be even cheaper. HIX HIF.

Even when told, 95% of investors still don’t get it and will never have the balls to buy a stock when it’s going down, instead they buy it on the way up when it’s overpriced already. It never changes.

#74 blase on 03.14.12 at 12:29 am

Smoking Man you are so full of shit. So your high school educated son gets a 6-figure base salary job from having 1 job experience selling door to door. Suuuuuuuuuuuure. Lot of incentive to sell when you are making 6 figures to start with. Is it Amway?

#75 bluethunder on 03.14.12 at 12:33 am

#43 Mike in Vancouver

Ron Paul is quite the angel, dressed in white hood.

http://www.vice.com/read/yeah-ron-paul-is-racist-after-all-sorry

#76 Jsan on 03.14.12 at 12:37 am

I really have a hard time believing that the stock market is for real. No, I do not own any gold or silver, to me they are nothing but heavy chunks of metal. The idea that gold or silver would be worth anything in an economic armegeddon is silly in my opinion. Read about the WW2 seige of Leningrad. People were trading every last valuable item including pm’s for one slice of bread.

The problem I have is what is the US FED carrying on their books? What toxic assets are they holding? Nobody knows, they won’t tell anyone but they will eventually have to find a sucker to buy them most likely for pennies on the dollar. That should make everyone nervous. Another issue I have is realistically how strong can the US economy get? What drove the US economy for most of the last several decades? Debt, tons and tons of debt both government and personal. What happened as the US housing bubble grew? Home owners thought they were rich with a heavy dose of “The Wealth Effect” and their homes became ATM machines. Now what do they have? Mortgage debt plus home equity debt plus a house that is worth substantially less than it was at the peak. At best the US consumer will be anemic. Not to mention the fact that they are way behind on their retirement savings, plus the huge wave of baby boomers are now hitting the retirement shore. This will drive up government expenses across Federal and State levels. I haven’t even brought up the Trillions in unfunded Medicare and Social Security liabilities over the next 20 or 30 years.

Add to all of the above a potentially slowing China, a financially crippled Japan and Europe and Western nations with debt levels never seen before and I need to be schooled as to why the economy has any reason to be anything but anemic for decades to come???? When you don’t have massive debt driving an economy and most of your manufacturing has moved offshore, what is left to drive a 73% consumer spending driven economy?

#77 Browns Bottom on 03.14.12 at 12:40 am

yesterday… #166 NoName on 03.13.12 at 2:36 pm
All the stats on truck torque BS

Seriously who cares, unless your ass weight 1000 lbs any car will get from AtoB just fine.

Stick to the real estate doom, its much more being a smug renter than discussing torque.

#78 wollyone on 03.14.12 at 12:43 am

70th…………….

#79 Oceanside on 03.14.12 at 12:49 am

#37. Don. You have hit on an interesting phenomena

I was in the QF store last weekend and noticed a woman pushing a cart of groceries. The reason I noticed her was that she was about 35 years old and stood out amongst the elderly shoppers. I am 61 and felt like a kid in that store. It is a little worrisome that these people were the big move here in the mid 90’s, they are ageing and not being replaced, looking at all the houses for sale, most were decorated about 20 years ago when a lot of new subdivisions were being built to accommodate the rush. Parksville does feel a bit “younger” but close.

#80 Bottoms_Up on 03.14.12 at 12:50 am

Is it possible a re-emerging USA will buffer any significant downturn in the Canadian economy and/or real estate prices?

#81 Freedom 55 on 03.14.12 at 1:02 am

#18 TaxHaven

Excuse me… you said gold and silver can’t be printed?

Most people have no idea what is taking place behind the scenes of the precious metals market.

Most of what is determining gold’s price is paper trading – which is fundamentally flawed. The amount of paper gold and silver contracts that trade on the futures and equities exchanges easily outweigh the amount of actual physical trading that takes place.

That means it’s the paper markets setting the price discovery for gold. It means that short term sentiment – and manipulation – are the causes of both gold and silver’s volatility and not the actual fundamentals of gold and silver themselves.

For years, most people have assumed that the London Bullion Market Association (LBMA),
the world’s largest gold market, had actual gold to back up the massive “gold deposits”
at the major LBMA banks. But it doesn’t.

LBMA banks have approximately 100 times more gold deposits than actual gold bullion. This means that for every ounce of gold traded in these markets, 99
of them appear from thin air. Has gold and silver been converted into a fiat currency in these markets?

LMBA, trades nearly a year’s worth of worldwide gold production in less than a week.

#82 Kilby on 03.14.12 at 1:05 am

#64 The Thing in the Basement on 03.13.12 at 11:56 pm
37 Don – steady there qualicummer, but who is BSing? Of
course there are more retired people there now – there is
more retired people everywhere. More people in general
on the east coast of VI too. Will people keep moving here? I dont know. We lose resource jobs but a big
retiring demographic coming up.
—————————————————————–
The Island is losing some potential retirees as the general perception is that it is too expensive for the ferries, if not for the “old ones” it is for their kids and grandchildren to come and visit. A family of 4 in their car is now around $235.00 return.

Nanoose, which is close by and quite a nice neighbourhood with marina and golf course has, in the past been a realtor’s dream as they sell to couples from Vancouver or Calgary and after a year or so the wife (usually) feels isolated and wants to move “closer to the kids”

If prairie people can’t sell their houses for big bucks they certainly aren’t going to buy a $500,000 or $600,000 home on the Island. And if the “Boomer”savings stories we all hear about are true, many more will just stay where they are upon retirement.

#83 JB on 03.14.12 at 1:06 am

“the VIX has practically gone to sleep”

What has changed? Greece defaulted orderly… Ok what about P I & S? I can not see this rally being long lived.
Not a doomer or gold bug, but to me this rally makes no sense unless all the bad has already been priced in…

#84 great on 03.14.12 at 1:08 am

So a drop in volume on the stock markets as they “plod Higher” is a good thing? But a drop in volume in the housing market sales in Canada is a bad thing or signals the end? Can u explain.

Houses cost more than people can afford without taking on record levels of debt. So, prices always end up killing sales. Markets then correct. Stocks are not available for 95% leveraging, and can be very cheap to buy in small quantity. There is no valid comparison. — Garth

#85 Dead cat bounce on 03.14.12 at 1:25 am

Garth

I would have agreed with you a few months ago but after the run we have had I think it is a little dangerous to be pushing optimism now. I think you more meant your post as an ‘i told you so’ which is great, but it reads as a get in the market now rant.
It has been a great run for the last 4 months but we are due for a pull back, probably happen over the summer as it has the last few years. I am selling a lot of my stuff(buying corp bonds and preferreds), writing calls on the stuff I am not selling and buying some put options on the index. I will be back in after a pull back.
I am not a doom and gloom gold guy, just someone who is realistic about the run we have been on.

I said of course there will be a pullback, and it may well be a good entry point. But nowhere have I counseled people to ‘get in the market.’ I’ve repeatedly stressed a balanced portfolio approach, and warned against direct equity investment for anyone lacking a seven-figure portfolio. — Garth

#86 Nostradamus Le Mad Vlad on 03.14.12 at 1:30 am

-
Good post. We sold our PMs years ago, never gone back in again.
*
#47 Amazed — “Lots of change coming.”
— and —
#207 Smoking Man — You may be a lot closer to the truth than you know.

My uncle Nostradamus and I were chatting earlier. He said things will soon be happening which we haven’t even dreamed of. If we think things are topsy-turvy now, just wait a short while. We are gonna be shaken, stirred then poured down the sinkhole (yet to be created).

2014 is a good bet. This holds some truth in it (scroll down a little), and this (orchestrated silver take downs).

#214 OkanaganInvestor — Noted and thanks!
*
French Election means Euro down, gold up; Entitlements Who benefits? Virtual Tour of a dead mall; Who DDeided? “Who decided that it would be a good idea for the Federal Reserve to pay banks not to lend money to U.S. businesses and U.S. consumers?”; Battle Brewing over pensions (what else?) Unions are all but being wiped out; Gold Some banxters don’t know where their holdings are (link in); Life Boat (or Raft) Economies are on it, ‘coz their ships have sunk; Jamie Dimon Who he? Cashless Society Crime rates balloon; Fortune buying 4closed homes.
*
The Plot To destroy the US; Syria Russia and China veto UN again (good job too, because they would do to Syria what they did to Libya); PDF file Is the Toronto Star a threat to us? PDF file Sunlight, Vitamin D and health; Evidently, ACTA (like SOPA) has failed; Link in Big pharma used people in India as guinea pigs for testing; Full Moon Fever and high spring tides (link in); Encyclopedia Britannica Printing no more.

#87 Frank Dean on 03.14.12 at 1:51 am

“There are reasons the Nasdaq is at the best level since 2000″

Actually, there’s only one reason. Apple. Which might give pause to someone who repeatedly hammers away at the theme of diversification.

#88 ozy - Unbiased point of view below on 03.14.12 at 2:06 am

1. Garth is entitled to his opinion on financial markets, which appears medium-long term buy&hold, and objectives\outcomes are obsiuvsly going to be different than on a speculative 3-6 months horizon (mine) or longer term (some readers). So, it’s normal views differ, nothing wrong when comparing apples to pears and peaches. Everyone interests/needs are different and will go for it on his/her way.

2. Immigration and population growth in Canada, which has grown 5.9% from 2006 to 2011, help drive housing demands. But the population growth in some cities can no longer keep up with real-estate inventories.

The greater Toronto area has experienced a boom in high-rise condominiums in recent years. Housing starts are approximately 40,000 per year, exceeding the demographic need of about 18,000 to 25,000 units, Gulati, of TD Economics, said.

“The number is not going to be sustained,” Gulati said. “There’s going to be a gradual unwinding of excess in the next few years. The competition between new and resale markets will lead to a negative repercussion in terms of price.”

Fallout from a housing crash would hit Canada’s biggest banks hard.

http://www.marketwatch.com/story/canadas-housing-market-flirts-with-bubble-2012-03-14

#89 Scott in Gibsons on 03.14.12 at 2:17 am

Get a clue dude! The only reason stocks are rising is because of your money printing friends. Mountains of cash have been created to fix everything and when unlimited free money is made available, it goes into income producing assets. Proof of this can be seen in yields. This is not a sign of a healthy or recovering global economy. Get one of the Amazons to explain it to you.

Not only is your comment wrong, but you err in attacking personally, for a view held. You are my guest. If you have a point to make, do it without the invective. It diminishes you. — Garth

#90 Harlee on 03.14.12 at 2:41 am

Mike in Vancouver #43
“Ron Paul….is an angel from heaven.”
Better not go out on a limb like that. At least not until we check his birth certificate.Thank you.

#91 backwardsevolution on 03.14.12 at 2:45 am

Garth – I follow U.S. economics closely, and the people I follow (who are experts in their respective fields, such as housing, inflation, the manipulation of statistics, GDP, money printing, unemployment, holding of toxic assets off balance sheet, fraud, corruption, et cetera, et cetera) are ALL saying that we are in for a world of PAIN.

When you have state governments borrowing from pension funds in order to pay pensions, look out!

I don’t see hyperinflation. I see one huge mother of a correction.

The U.S. and the rest of the world are being run by the central banks, corporations and the military-industrial complex. The lot of them would fit on the sociopathic end of the spectrum. Of course, they are fighting for their lives. They want to keep their system going (you know, the one where interest and fees get fed back to them, where they get to create loans out of thin air, where they get bailed out no matter what they do, where fraud gets them a mere fine/no jail time); that’s how they buy their 1% lifestyle.

We desperately need a correction. We need to get back to a place where banks make their money on the spread between deposits and loans. They won’t like it, but we can’t afford them any more. They have ruined people’s lives, are causing absolute chaos in the world through inflation, artificially suppressing interest rates.

Let’s get back to a point where the FIRE (finance, insurance, real estate) sector of the economy is a small blip. It deserves no more than that.

#92 uk lad on 03.14.12 at 2:46 am

In 1999 one ounce of silver bought 4 gallons of gas today it buys 8.

In 1999 in Toronto gas was 49.9 cents per litre, today it is around $1.30 per litre.

Prime example of fiat currency debasement.

Prime example of how gold and siver preserve purchasing power.

Let’s go driver, ding, ding.

Today an ounce of silver will buy diddly. — Garth

#93 Daniel on 03.14.12 at 2:52 am

Gold and Silver are a way to protect your purchasing power.

Keep in mind that all Fiat currencies have failed, without exception, our current system will fail too, it’s only a matter of time.

What could cause our system to fail? If 5% of the population said they wanted to withdraw their money from the bank. That’s all, if people have faith in the dollar, that’s the only thing keeping it going, if people lose faith, it will collapse, the same as every other currency.

Also keep in mind Garth is pro stocks, and he’s conditioned to think this time it’s different. In that way he’s the same as all of us, he has his assumptions, and presents them as fact. Which is fine, this is his blog, we come here for good insight.

However, Garth has also been warning about gold being over valued since 2009, in which time is up (even with recent declines) over 80% … silver has doubled.

Silver traditionally has had a 15:1 ratio with gold, if this reverts back to the norm – as Garth tells us things do – silver should be at over $100 an oz.

Just some thoughts, I have about 10% of my NW in PM, even Garth says you should too.

“Our current system will fail too, it’s only a matter of time.” Don’t know about you, but I eat every day, gas up every week and spend money throughout my life. Every purchase is made in dollars. Every amount earned comes the same way. I suspect that is 100% correct for you, too. Vexing about potential currency debasement after you are dead is a fine exercise, but useless. Gold will never be a currency in the lifetime of anyone reading this blog. — Garth

#94 nobody you know on 03.14.12 at 3:15 am

“Over 200,000 last month in the US and more than 240,000 the month before.”

And don’t forget those revisions! The change in total nonfarm payroll employment for December was revised from +203,000 to +223,000, and the change for January was revised from +243,000 to +284,000.

http://www.bls.gov/news.release/empsit.nr0.htm

#95 titosantana on 03.14.12 at 3:21 am

Just found out that Scott Paper Factory is moving from New Westminster down to the good old USA. This is the second major company moving south that I have noticed this week. Wonder if this is part of a bigger trend???

#96 Victor2 on 03.14.12 at 3:25 am

wow, good to hear stock market will go up and up.
I guess most jobs are moved overseas for cheaper salary. that is how to make the earning season looking so delicious. On the other hand, there is a feeling that something is not right and smells fishy. maybe just me. generation after generation of screwing up on finance and politics after WWII won’t be punished. how nice our world we are living in.

#97 Zed in Geneva on 03.14.12 at 4:01 am

Garth, it appears to me that your daily talks this last year were only for entertainment purposes for most of the visitors to your blog. Now that your analysis/ predictions are coming to life, so many comments are egging you as being merely lucky/ full of bullshit/ crook/ self-centered and so on. I am invested in liquid markets that pay me every 3 months but I have to admit that being a contrarian was difficult the last 5 years as I saw RE go up and my stocks doing the yoyo. Reversal to the real values for all assets at some point. Thanks for all the talks.

#98 Charles Ponzi on 03.14.12 at 4:09 am

Green shoots. It must be spring in the northern hemisphere. Now that the global financial crisis is over, we can look forward to “normal” interest rates.

#99 T.O. Bubble Boy on 03.14.12 at 4:46 am

UK proposing a 100-year (or, possibly perpetual) bond.

I’m not sure if this is brillilant, or simply a case of finally giving up and admitting that today’s debts will be around forever:

http://www.cnbc.com/id/46729184

#100 T.O. Bubble Boy on 03.14.12 at 5:09 am

This is interesting — a blog posting talking about “The Five Year Rule” for buying a house (if you sell within 5 years, your costs will likely make it that you lose money over renting)… you’d think that this wouldn’t be very controversial, but there are a bunch of commenters arguing not that houses will make money in less than 5 years (like you’d have here in Canada on any MSM housing article), but that no one should ever buy a house!

http://moneyning.com/housing/the-five-year-rule-for-buying-a-house/

I guess when the “anti-house” crowd is peaking, that’s another sign that the bottom may be in?

(speaking of which, the XHB Homebuilders ETF is up 25% YTD, and around 70% from the lows in early October)

#101 crazed and a litte confused on 03.14.12 at 5:10 am

hi garth,

i recognize opportunity and put stop losses on 3 of my sstocks. They were automatically sold and I bought them back up just a few weeks ago plus 2 additional stocks. all 5 are in positive territory . 1 is actually 40 % up and the other is 26%. nice gain especially the 26 % is in my RRSP.

but one my buybacks is gold which i just bought monday. Study hard …contrarian ife is difficult

people are still buying property in vancouver. but it is taking longer 4-6 weeks. usually it’s some 70 plus year home

#102 T.O. Bubble Boy on 03.14.12 at 5:13 am

(which may also mean that the homebuilders are ready for a drop after that 70% run-up)

#103 cto on 03.14.12 at 5:39 am

#9 T.O. Bubble Boy

I’m guessing the HAM article was meant to say that the “HAM” or any other big investors move their money where ever opportunity shows its face.
Canada is a great place scocially however very over valued now at least in T.O and Van areas.

America? They seem to have reached the thresh-hold were there economy appears to be improoving and houses pose a great investors buying opportunity, right at the bottom.
If i was a big money investor, that’s were i would be going.

Maybe they are also starting to connect the dots on T.O and Ontario “industrial-commercial” front.
How does a big city maintain real wealthy living standards when the traditional surrounding areas industrial jobs market has been decimated?

This is were the money came from over the last 100 years and made Ontario and T.O rich. Not a short sighted solution like importing rich people in.
Really, in the years ahead, Toronto isn’t that much different than Detroit, Cleveland, buffalo if the industrial market doesn’t reverse itself here in the horseshoe.

#104 D on 03.14.12 at 5:45 am

Garth, I would like to point out there is more to life than ROI. I’m very happy with getting 1.25% on my money, safe in a bank because I don’t need anymore than that and I sleep better at night knowing I manage my money. Sure, I could make $100k more just in interest per year but I don’t need it and don’t miss it.

More to life than money and returns my friend.

You have no ROI. — Garth

#105 keny65 on 03.14.12 at 6:01 am

Rome has never fallen and is ruled by the jesuit general or the black pope adolfo nicolas…every road leads to the bank of rome….the bank of england was a creation of it and also the federal reserve(ever notice the roman temple look to these buildings)Rome is still going hard for world domination and the best way to keep the herd of sheep in check is through usury…hey if they want value without working for it …slavery through interest is all they deserve!If someone understands the value of gold it’s the romans…they started the whole “Give us your gold and we’ll give you this piece of paper”thing…

#106 Beach Girl on 03.14.12 at 6:14 am

181 Harlee on 03.13.12 at 4:10 pm

Beach Girl #106
“How do the generations get labellked? From what year to what year? Gen X,Y,Z. Or just generally whiny?”
The best questions/comments from any poster I’ve read here for some time.Whining wasn’t permitted in my house when I was growing up. “I’m bored…” Answer: Then go DO something !

_____

Thanks for the compliment Harlee. I got up for the stupid dog. But realize I am the stupid one. She has got me trained. LOL,

Westerman sounds depressing. He should purchase an asian person who isn’t to particular.

Anyway it is chicken wing night at our favourite shack. Was there last week and noticed two large older men, quite Aryian. I told the flame (think that is dying, by the way) and my girfriend they look like Nazis. They heard me. Did you call me a Nazi. No I said Nasty. I said where are you from anyway? They are Croatians. I said so your a Nazi.

And the end of the evening I said good night Boris and Karloff. (Romanian, to the unwashed) They loved me. When the flame went to the can, they told me to come back.

I know, some pinhead out there is going to say this is a business site. When they are not worth a buck 98.

#107 Ralph Cramdown on 03.14.12 at 6:21 am

This goes to the heart of housing as the goto speculation apparatus. This gentleman speaks of the price of a house and the equivalent in gold but it is exponentially easier to get money from the bank to speculate on a house than it is to do so on gold. Stroll into a bank and try to get Xk to buy gold and then try it to buy a house. The precious metals speculation apparatus does not permit the extent of leveraging that housing does and thus a markedly smaller pool of participants are available.

So you want to borrow money from a bank and then leverage that borrowed money 19:1 in the futures market? Or leverage that money 3.33:1 in gold ETFs? 6.67:1 in a 2X gold ETF? Or maybe you told the bank that you want to buy gold bars and hide them somewhere, because you don’t trust the system? I don’t think you know much about the precious metals markets, and that’s probably a Good Thing.

More problematic is this guy’s comparing 1971’s $35/oz price. Did he not know that that was a price fixed by the US government, and that US citizens were barred from owning gold at that time, or was he just trying to confuse you?

What goldbugs don’t understand is that, if the world gets as bad as they think it might, somebody’s just going to take their gold from them anyway, and if it doesn’t, other asset classes will outperform. Who’d want to win that bet? Is gold above its 1980 highs yet, in real terms?

#108 Danforth on 03.14.12 at 6:41 am

Happy Birthday Garth !

#109 David B on 03.14.12 at 6:51 am

Bin off for bit …. hey did y’all read the good news for all those cool cats who really run Ottawa … “Golden Handshakes all-a-round” Talk about a stock market boom! An influx of up to $2 Billion or more as they put their severences into tax savings accounts or give it all back at tax time. Boys oh boys is that “F” guy smart or what? They move on to private jobs (more money) to be re-hired to keep the country going full steam ahead under yet another PPP system for Harper’s new Canada. The world be dancing at Canada’s feet wondering just how does he do it. Who knows they may even buy bigger houses and more fancy toys ….. Let the good times roll in Upper Canada. Eat your heart out cowboys, the West may be in but Upper Canada rules the money printing machines and do not ever forget it “Really Folkes” REALLY?

#110 CTO on 03.14.12 at 7:35 am

#89 titosantana

Scott paper moving South in BC?

Same stuff happening here in Ontario too! I believe it is a long term trend. Is Scotts American? American companies are loyal to America especially if it costs them less to operate there.

T.O and Van are highly expensive cities where the housing prices demand a salary twice as much as say…a town in a state like Indiana or the majorty of American states for that matter.

Canada can’t be industrially competitive with anyone if it can’t be competitive with the U.S.

#111 eaglebay - Parksville on 03.14.12 at 7:39 am

#37 Don on 03.13.12 at 10:37 pm

Oceanside, including Qualicum Beach, is doing fine.
Who will buy the houses and the ones being built?
Don, look around you, there are Alberta plates and rental cars all over the area. One of them is mine.
You sound like you’re really down on your luck.
There’s a job waiting for you in Alberta if you have any skills at all.
Forget the obituaries, there are many young boomers around.
I don’t see anymore funeral homes than in any other town. The local papers are garbage.

#112 CTO on 03.14.12 at 7:45 am

Some more news on Canada industrial front.

Artical in Tor star today on how Canadian Industry can’t fill positions due to lack of skilled personel.
The reason? Not because they are sooo busy. Because this front has been suffering long enough now that much of the mentorship and on-the-job training for skills has been lost and will not easily return. This is what has happened in north eastern US states.
It’s easy to get kids to go to University, but without mentorship and job experience they can’t obtain the skills required in the industrial sector.

#113 Sebee on 03.14.12 at 7:45 am

http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html?_r=2&scp=1&sq=Goldman%20Sachs%20Group%20Inc&st=Search

Yeah, trustworthy. Just give us all your money. As your URL says – fool and his money…

#114 pbrasseur on 03.14.12 at 7:57 am

As long as I can remember people have been predicting the collapse of the “American empire”, to no avail and yet again many are pissed one more time as they see the American economy recovering. Of course they won’t believe it and will encourage you not to believe it either.

Yet you should believe it, the US recovery is real and it is only beginning, it is no smokescreen and this fact is reflected in many economic indicators, in effect the smokescreen is right here in Canada where mediocre productivity has been hidden for years behind a credit bubble which has been fueling artificial growth to our economy. This is about to end, maybe abruptly. Sure we still have commodities and resources but they are a mixed blessing as they also have been plagued by speculation and as they pushed our $CAN higher they contributed to the depletion of our industrial base while giving us the illusion of prosperity. It will be interesting to see what happens now as growth is slowing in emerging countries. If commodities are hit at the same time as our credit bubble explodes that would be called a perfect storm, there is a high risk of that happening.

Yet even when the US recovers, this time Canada won’t be able to ride on America’s jacket tail, not before our $CAN sinks, not before unbalances created by our own credit bubble are fixed. US recovery will eventually drive up interest rates, rates in Canada will have to follow and that will end the bubble for good (although it is very likely to end before that). When the tide of credit recedes you will see what little is left of the Canadian (real) economy, you may be shocked when you discover the emptiness and also find that governments, already swimming in red ink, leave you helpless, worse they will get hit themselves and they might even tax grab you (as they are going now in Quebec and will be doing shortly in Ontario…) more, if only to service their employee’s pensions (…), unfortunately you can’t legislate productivity or innovation, you can’t decree an industrial base.

At long last reality is here and it has come to bite us!

#115 Kaganovich on 03.14.12 at 8:00 am

#66 watchdog

China is experiencing a similar scenario. The ROI is getting progressively worse.

http://www.nakedcapitalism.com/2012/03/satyajit-das-“all-feasts-must-come-to-an-end”-–-china’s-debt-investment-fueled-growth-part-1.html

#116 Mark on 03.14.12 at 8:01 am

Steve Keen (Steve Keen is Professor of Economics & Finance at the University of Western Sydney, and author of the popular book Debunking Economics) comments on Canadian housing bubble:

http://www.planbeconomics.com/2012/03/14/steve-keen-talks-about-the-housing-sector-bubble-bursting-in-australia-canada-uk-and-hong-kong/

#117 eaglebay - Parksville on 03.14.12 at 8:14 am

#53 Pete in Barrie on 03.13.12 at 11:27 pm
“I love Ron Paul, only because he is completely honest (he truly believes his whackjob views).”
_____________
Give me one thing about Ron Paul that’s a whack job.
Just one. See how smart you are.

#118 neo on 03.14.12 at 8:17 am

#52Canadian Watchdog on 03.13.12 at 11:26 pm
Oh, I see. Retail sales are a bad indicator. Jobs are a misleading indicator. Corporate profits indicate nothing. Housing intentions signal nothing. Equity markets are no indication. Did I miss anything? Like you indicating nothing? — Garth

He’s is correct Garth. These are different times that require different metrics to measure real growth, more so in inflation adjusted terms, otherwise you’re just looking at nominal figures go up.

The public is getting smarter faster then you think.

He is incorrect, as time will (again) prove. — Garth

These are different times Garth.

Apple is now almost as large as the ENTIRE U.S. retail sector.

Ex-Apple retail sales were actually -3.2%.

Those overall corporate profits are also skewed heavily by Apple.

One company that can distort the overall picture and metrics that much doesn’t bode well or support your overall health of the economy/corporations thesis.

#119 eaglebay - Parksville on 03.14.12 at 8:18 am

#55 Mr Buyer on 03.13.12 at 11:32 pm

Google the definition of sarcasm.

#120 TurnerNation on 03.14.12 at 8:18 am

These guys advertise on the radio. Should be illegal.

Leveraging commodities to the hilt, unregulated. Might as well play futures (regulated market).

http://guildhallwealth.com/Silver.html

“If Market hits $50.00 per ounce (We think we could see this range within 36 months)”

Disclosure: Still long ZSL.US under $10 (short silver ETF), partially hedged by April covered calls – fast melting.

#121 Eric Catona on 03.14.12 at 8:20 am

Why doesn’t everyone just pull all their money out accounts, investments etc, and stop paying their credit cards and other unsecured debit for 3 months. Just 3 months and then we’ll see how solvent banks are. I’m at the ATM now!

#122 eaglebay - Parksville on 03.14.12 at 8:26 am

#57 Timing is Everything on 03.13.12 at 11:41 pm
“#37 Don

Do you know Howie Meeker? He’s 88 years old now.

‘He currently lives in Parksville, British Columbia.’ -wikipedia”
_________________

The hockey arena at Oceanside Place in Parksville is named after him.
For all the doomers that like to call me “old man”, yes, I play contact hockey. Anybody?

#123 eaglebay - Parksville on 03.14.12 at 8:42 am

#66 Canadian Watchdog on 03.13.12 at 11:59 pm
“PS. Those robot algos now trade at picoseconds, not milliseconds like 2008. They’ll rape everyone’s profits before they can blink.”
_____________
I call BS on your logic.
These so-called robots cannot function without human intervention. Humans do not react in picoseconds.
For every loser there’s a winner. Do your DD.

#124 fancy_pants on 03.14.12 at 8:43 am

Beep.

It all looks like roses and sunshine b/c GREED is the #1 driving emotion. Fear only rears it’s head every so often so the sheeple can be milked some more. Yes, all must be well b/c the media tells us so.

… meanwhile in the economic OR… “Quickly congress, more defibrillation to the corpse!”

#125 eaglebay - Parksville on 03.14.12 at 8:47 am

#70 not 1st on 03.14.12 at 12:08 am

More doomers.
Maybe you should listen to Jim Cramer.
Lots of small retail investors around. More coming.
Booyaaa.

#126 eaglebay - Parksville on 03.14.12 at 8:58 am

#76 Browns Bottom on 03.14.12 at 12:40 am
“Seriously who cares, unless your ass weight 1000 lbs any car will get from AtoB just fine.

Stick to the real estate doom, its much more being a smug renter than discussing torque.”
__________________
When you need a truck to work or “play” we care.
If you can afford it.
Back to you doomer. Need a job? Alberta awaits you.

#127 Nuke on 03.14.12 at 9:04 am

Garth

Make sure you and the Amazons in your birthday suits trip the light fantastic. March needs a holiday, maybe today could be it.

Have a fabulous BDAY!

#128 eaglebay - Parksville on 03.14.12 at 9:05 am

#80 Freedom 55 on 03.14.12 at 1:02 am

Watch the show “GOLD” on CNBC.
So much for your conspiracy.

http://www.cnbc.com/id/46413439/CNBC_S_GOLD_WILL_PREMIERE_ON_MARCH_12TH

#129 Mr Buyer on 03.14.12 at 9:06 am

#101Ralph Cramdown on 03.14.12 at 6:21 am
I don’t think you know much about the precious metals markets, and that’s probably a Good Thing.
…………………………………………………………………..
I think you have actually helped make my point. While there are ways and means to leverage a position in Gold they have barriers not present to most people thinking about leveraging real estate (such as having a clue what you are doing and some skin in the game) thus a smaller pool to contribute to speculation

#130 eaglebay - Parksville on 03.14.12 at 9:13 am

#82 JB on 03.14.12 at 1:06 am
“What has changed? Greece defaulted orderly… Ok what about P I & S? I can not see this rally being long lived.
Not a doomer or gold bug, but to me this rally makes no sense unless all the bad has already been priced in…”
______________
Those countries have been in this situation for a few years now. What has changed today?
So, you’re not a doomer, eh.

#131 eaglebay - Parksville on 03.14.12 at 9:18 am

#83 Nostradamus Le Mad Vlad on 03.14.12 at 1:30 am

Hey, you forgot about the asteroid, half the size of a football field, hurtling towards earth at 8km per second.
How about Fukushima today?

#132 dave99 on 03.14.12 at 9:20 am

#29, GoldenSilver you wrote:

“Quick analogy why. I bought my first home in 1971. I was 21 years old. Paid $20000. Today that same home is selling for $279000.
In 1971 Gold was trading for $35/ounce. If I had bought gold instead of the house I would have purchased approx. 570 ounces of gold. Today that gold@ [$1700/Oz] is worth $970,000.
And don’t worry I have done all the math for the past 40 years if I had rented instead of buying and how that would have diminished my profit in gold. But without going into the intricate details I can tell you I would still be ahead by by at least $700,000.”

Two points.
1. Before equivalent rent costs, your gold profit is $950k, and your housing profit is $259k, with a pre-rent difference of $691k. Can you explain to me how your after rent profit is $700k+?

2. If you do the math of your equivalent rent costs, and also add in the lost investment returns on those, then a house would have been a significantly more profitable investment than the gold.

And just to clarify, I’m not arguing in favour of investing in housing now. Just arguing against stupid people who can’t do math.

#133 eaglebay - Parksville on 03.14.12 at 9:28 am

#87 backwardsevolution on 03.14.12 at 2:45 am
“When you have state governments borrowing from pension funds in order to pay pensions, look out!”
____________
Isn’t it what pension funds are for?
What a conspiracy, doomer.

#134 Mackie on 03.14.12 at 9:36 am

Why do the anti-gold people here go to such extremes when they talk about people who buy gold. I don’t buy gold thinking that I will ever use it as a currency in the sense that I will take it to the grocery store to buy food. It’s an investment that can be turned back into cash at some point. So far I think those who own gold have done pretty well and continue to do well into the future.

Looks to me as if the extremists may be on the other side. — Garth

#135 eaglebay - Parksville on 03.14.12 at 9:42 am

#100 D on 03.14.12 at 5:45 am
“I sleep better at night knowing I manage my money.”
_____________
The bank, at 1.5%, manages “your” money not you.
You’re losing money every day.
Good night and sleep well.

#136 G2thaBLA on 03.14.12 at 9:48 am

TREB’s new tagline, “your safeguard” because they are always looking out for you: http://tinyurl.com/BSfromTREB

#137 eaglebay - Parksville on 03.14.12 at 9:48 am

#105 keny65 on 03.14.12 at 6:01 am

This is the most humorous post of the day.
Oh, what do you mean you’re serious.

#138 Shane on 03.14.12 at 9:53 am

garth, what do you think of this report?

Dear Reader:

Something bigger than the credit crisis of 2008 is
headed our way.

For most people, it will hit them like a brick wall.

It will touch Americans harder and deeper than
anything else we’ve seen since the Great Depression.

Michael Lombardi feels so strongly about this, he’s
decided to present his “Critical Warning Number Six” in a
new video.

In case you’re not familiar with him…

Michael Lombardi has been widely recognized as
predicting five major economic events over the past 10 years.

In 2002, he started advising his readers to buy gold-
related investments when gold traded under $300 an ounce.

In 2006, he begged his readers to get out of the housing
market…before it plunged.

He was among the first (back in late 2006) to predict
that the U.S. economy would be in a recession by late 2007.

Michael correctly predicted the crash in the stock market
of 2008 and early 2009.

Finally, Michael turned bullish on stocks in March of
2009 and rode the bear market rally from a Dow Jones
Industrial Average of 6,440 on March 9, 2009, to 12,952 on
February 29, 2012—a gain of 101%.

I call Michael’s video controversial because most people
will not like what he has to say…they will find it hard to believe
until they see all the facts as Michael presents them.

Michael’s first five predictions have already come true.
Now he’s issuing Critical Warning Number Six. I urge you to
be among the first to see this new video here now.

Yours truly,

Wendy Potter, BA
Managing Editor
Lombardi Publishing Corporation
News, Analysis and Information Services Since 1986
One Million Customers in 141 Countries

Like I said, fear sells. It is the lowest form of marketing. — Garth

#139 eaglebay - Parksville on 03.14.12 at 9:59 am

#112 CTO on 03.14.12 at 7:45 am
“It’s easy to get kids to go to University, but without mentorship and job experience they can’t obtain the skills required in the industrial sector”
______________
Obviously there’s something wrong with our education system.
Maybe Smoking Man has a point.

#140 MikeB on 03.14.12 at 10:00 am

Emergency interest rates are what’s keeping the stock market moving higher. No where else to put your cash and those Wall Street/ Bay Street dudes are buds with Carnie et al. If rates go up it will be a half a percent at best. Gotta keep those stock guys happy.

Corporate profits, and the anticipation of more, drive markets. — Garth

#141 Blue Monster Lover of Cookies on 03.14.12 at 10:26 am

#114 pbrasseur on 03.14.12 at 7:57 am
Nice post.
All Canadian manufacturing companies that still remain in Canada should have an eye on other jurisdictions at all times. Keep a thought in mind for a foreign office.
I do.

#142 Uh Oh Canada on 03.14.12 at 10:35 am

I don’t consider myself a doomer, but a realist. The economic fall of America seems to be a touchy subject here. The answer is simple- just look at the debt numbers, which are in the trillions.

Whatever your view, do not bury your head in the sand! Do you research. Take Garth’s advice and get liquid- it’s the best way to prepare.

#143 Oakville Owner on 03.14.12 at 10:36 am

Garth/Dogs….

Is it now time to lock in the prime -.80% (2.20%) mortgage for the 4yr 2.99% or 10yr 3.99%?

I have approximately 14 yrs left to go and will not be moving for the next 25yrs.

Thanks for your thoughts.

That sounds boring. — Garth
********************************************

Sounded like a perfectly good question to me. Don’t see anything wrong with wanting to live in a great area and give my family the best we can.

Lets try again (Garth/Dogs thoughts?)

P.S. Currently up $200 000.00 since we bought in 2008 and fully understand that is paper $$.

#144 static on 03.14.12 at 10:36 am

I am a little skeptical of rising profits. The DJIA and the TSX are properly priced. Many ports around the world have excess capacity, and CND’s are only beginning to experience consumer tightening. U.S. debt is increasing $2.1b per day. I beleive there are more negatives than positives floating in the economy still. Whatever recovery the U.S. does experience, I do not think it will be enough to kick start a new expansion cycle worthy of stock markets breaking new highs. Just saying!

#145 backwardsevolution on 03.14.12 at 10:37 am

eaglebay – Parksville said:

“#87 backwardsevolution on 03.14.12 @ 2:45 am “When you have state governments borrowing from pension funds in order to pay pensions, look out!”
____________
Isn’t it what pension funds are for?
What a conspiracy, doomer.”

Not a doomer, just a realist. I kind of thought that states and municipalities came up with their share of pension money from tax collection, not borrowing from the pension plan itself.

“Gov. David A. Paterson [New York State] and legislative leaders have tentatively agreed to allow the state and municipalities to borrow nearly $6 billion to help them make their required annual payments to the state pension fund.

And, in classic budgetary sleight-of-hand, they will borrow the money to make the payments to the pension fund — from the same pension fund.”

Happening in more states than you think. Hey, financial bubblehead, I think the Eagle has landed!

#146 Canadian Watchdog on 03.14.12 at 10:42 am

5yr bond yields are rising which may force the banks to end their 2.99% special any day now.

http://www.bloomberg.com/quote/GCAN5YR:IND
http://www.bloomberg.com/quote/CDSW5:IND/chart

#147 Alex on 03.14.12 at 10:44 am

Why I am leaving Goldman Sachs:

http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html?_r=2&pagewanted=1

http://www.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405

#148 SteveM on 03.14.12 at 10:46 am

I don’t understand why Garth has such confidence about this particular issue (the “doomers”). My crayons-version understanding is that everything we’re doing is pretty much unsustainable. This simply can’t go on forever. Immense debt can’t be swept under the rug forever. People can’t live beyond their means forever.

My impressions might all be wrong. But if so, how is this going to get fixed? I genuinely don’t understand how this is all supposed to resolve itself, or even reach some kind of equilibrium, without a massive period of austerity for everyone.

#149 long gold on 03.14.12 at 10:48 am

And your metal went down 30 bucks. — Garth

and real estate prices in GTA went up–does that mean you’re fundamentally wrong Garth?

gold has crushed everything the last 12 years and will continue to do so for the foreseeable future. cant argue with success.

People live in houses. Gold is 100% speculative. Bogus comp. — Garth

#150 OkanaganInvestor on 03.14.12 at 10:49 am

Garth-Of course, the US budget deficit is immense. Unemployment is still rampant. Too many people on food stamps. And at least three certifiable whackjobs are running for president.

Canadians have their own problems with leaders like Harper, Rae, and Mulcair. The money masters have bought them to support the privately-controlled central banks and Ponzi petrol dollar. A Veterans Today journalist reveals the following:

‘As it stands, the NDP is the only major national party not led by an avowed zionist. Stephen Harper leads a cabal of governing “Likudniks,” who value subservience to Israel above all else, and the interim leader of the “Labour-Zionist” Liberals, Bob Rae, is on the board of the Jewish National Fund, an organization so criminal that it has been condemned in Israel as racist.

‘The NDP, therefore, is the only apparently Canadian governing choice that voters have, but even this modest fig leaf will be blown away if the blatant Israel-firster Thomas Mulcair becomes party leader.

‘On May 1, 2008, he told Canadian Jewish News: “I am an ardent supporter of Israel in all situations and in all circumstances.” [my emphasis]’

http://www.veteranstoday.com/2012/02/13/will-canadas-social-democratic-party-be-able-to-prevent-a-leadership-coup/

#151 Behavioral Finance on 03.14.12 at 10:51 am

You got that right. Only 6 trillion sitting on the sidelines in savings and money market. Looking at the negative interest rate those guys are getting creamed.

#152 Steven Rowlandson on 03.14.12 at 10:53 am

Gold will never be a currency in the lifetime of anyone reading this blog. — Garth
The above statement is religious dogma that flies in the face of the truth. If gold is used in any way for trade or debt settlement either in bullion or coin then it is a currency and the same with silver. Its use as a currency or money at this time might be minor relative to pure fiat currencies but it still qualifies. If gold and silver were not money and or a currency there would be no denomination on the coins and no coins. It would not be traded and lent at financial institutions.
There would be little or no shorting of gold or silver or motivation to short gold or silver.
Also people all over the world would not be madly in love with the stuff. Malasia has minted gold and silver money for trade and savings as an alternative to its paper currency. Iran attempted to do a deal with India to trade oil for gold. Libya was going to use its gold reserves to create a gold coin currency to facilitate trade in Africa. The banksters used their pet governments and terrorists to quash that one.
Oh yes even the jewish bolsheviks who were working for the city of London and also the Wallstreet banks thought gold and silver money and currency was worth stealing and committing genocide for. Bankers and revolutionaries did quite well from looting the russian empire and later eastern europe. Gold and silver is money if some one thinks it is worth stealing and killing for. Otherwise who would want it? Why would Eric Sprott trade paper for silver or even gold if it were not money and not worth having? Why wouldn’t he buy stocks and bonds for his trust funds instead?
He knows that stocks, bonds and fiat can and do become worthless or disappear altogether.
The causes: bankruptcy, fraud , market manipulation or acts of war and politics.
The electronic and paper fiat currency that Garth knows and loves is merely a debased and defaulted promise to pay gold and silver. It is a scam that can not last and history shows that it won’t. Garth do you honestly prefer electronic / paper fiat or would you rather have gold or silver money and no false promises to pay?

Idiocy. Gold is not money or currency. We live in dollars. Bullion is a commodity. The dogma here is suffocating. — Garth

#153 TaxHaven on 03.14.12 at 10:54 am

#81 Freedom 55,

Oh, I’m fully aware of the paper games being played behnd the scenes. Perhaps it will take a major loss of confidence in some major currency to force larger numbers to take physical delivery.

You’d like to think that the expansion of the money supply worldwide alone would be enough, but remember that these are not investors, or even speculators, but BETTORS.

They CRAVE profits in paper currency. They have fundholders, unitholders, share holders to pay, daily. They have “investors”, employees and taxes to pay. Their entire capital – and that leveraged many times over – stays fully in play all the time: it HAS TO earn a return in quantifiable, payable currency.

They are not interested in”preserving purchasing power”. They and their pensioners, insurers, mutual fundees and shareholders are too short-term for that. They will ride this gravy train into the wall together one day, though that may not happen for many years.

However, do remember that in most of the world physical gold is what is important. India, China and SE Asia far outweigh in gold consuption the United States.

My guess, though, is that inflation of the money supply and the resultant price inflation will consume anyone not holding the real metal. It will become increasingly obvious, even to the stubborn financial donkeys, that perhaps they’d better gravitate into some asset class in more limited supply. Then there will be an increasing divergence between the physical price and the USD futures price. Possibly the next installment of sovereign debt/currency crisis, or a feel-good news failure, will not only shock Garth’s trust in “standard recessions” and “recovery” but will drive money into the real metal.

Patience.

#154 long gold on 03.14.12 at 11:01 am

Gold will never be a currency in the lifetime of anyone reading this blog. — Garth

wrong garth, its been a currency for a long time, diverse peoples all over the world have never stopped using gold to make payment, just last month i accepted a gold coin as payment for a reno job instead of loonies. Check goldmoney.com, ë’gold is already a functioning currency. india is talking about paying for iranian oil with gold, etc…etc…

Never.. ever.. happen. — Garth

#155 Ralph Cramdown on 03.14.12 at 11:02 am

While there are ways and means to leverage a position in Gold they have barriers not present to most people thinking about leveraging real estate (such as having a clue what you are doing and some skin in the game) thus a smaller pool to contribute to speculation

Most people thinking about “leveraging real estate” are buying a primary residence to live in, will continue to pay the nut if they can. and will become renters if they can’t. Only 1/2 of gold goes into jewellery, and there’s a lot more people speculating with gold derivatives than with real estate derivatives. If you want to count the young couple buying a condo as leveraged speculators, then I get to count buddy who puts a gold necklace on his credit card.

#156 long gold on 03.14.12 at 11:08 am

People live in houses. Gold is 100% speculative. Bogus comp. — Garth

Everything is 100% speculative. People use to live in caves, and tents, maybe it comes back in fashion, thats something to speculate on. Or speculate on whether the people eventually clue in on the counterfeiting of their currency, and start a massive panic into gold, commodities, equities…and yes real estate.

#157 eaglebay - Parksville on 03.14.12 at 11:11 am

Talking about horsepower.

http://www.timescolonist.com/health/Drunk+Amish+youths+crash+buggy/6292324/story.html

#158 OkanaganInvestor on 03.14.12 at 11:11 am

#76 Jsan on 03.14.12 at 12:37 am

Well said. The sheeple will soon be marching off to war as a diversion from the debt-created economic collapse.

#159 Ralph Cramdown on 03.14.12 at 11:13 am

I don’t consider myself a doomer, but a realist. The economic fall of America seems to be a touchy subject here. The answer is simple- just look at the debt numbers, which are in the trillions.

Now tote up the assets, and you’ll have a balance sheet. Then do the income statement, and come back to us and tell us whether the debt number still seems so scary.

#160 Ralph Cramdown on 03.14.12 at 11:16 am

Still long ZSL.US under $10 (short silver ETF), partially hedged by April covered calls – fast melting.

Next time, try shorting a long silver ETF. Free cash and you get to collect the management fees instead of paying them.

#161 yorel on 03.14.12 at 11:17 am

Looked at gold today? You’d better be patient.

Yep. Down another $50, or almost 3%. — Garth

#162 Behavioral Finance on 03.14.12 at 11:22 am

MarkB

“Emergency interest rates are what’s keeping the stock market moving higher”

Really, I must be missing something as corporations are sitting on a insane amount of cash and if interest rates went up they would actually benefit from this.

#163 Ray on 03.14.12 at 11:24 am

Just wondering why BMO 2.99 promotion has the end day of Mar 28, just right before the Fed budget. It might be forced to end earlier anyways consider the uptrend of the bond yields.

#164 Smoking Man on 03.14.12 at 11:26 am

#65 Rental monkey on 03.13.12 at 11:57 pm

Book is going to be awile, don’t think the world is ready for it just yet. Timing is everything.

Its easy to stop being a tax farm slave.

The first thing you got to do is look in the mirror and say to the one looking back, you’re stupid.
Second thing is think of the world as a concert, we have the audience (Investors) the musicians (tax farm slaves) and the conductor (Management) and the owner(YOU)
Every single person going through school is being trained as a Musician, who might one day if he kisses enough ass can become the conductor. Nowhere even in an MBA class do they teach street smarts, how to use people, lie scam get advantage while at the same time having everyone around you love you. It is a form of art. But until you unlearn years of schooling and training it is next to imposable to be the owner. It goes against your belief system where you associate pain and pleaser.
Most of you would be like a fish out of water if you magically become an owner. Yet most of you are quite happy and associate working for someone and getting a check as a good thing.

#165 Van guy on 03.14.12 at 11:27 am

Garth should hire eaglebay-parksville to answer all blog posts. He’s the number 1 poster now answering blog dogs. He’s the new };-)

#166 johnny5z on 03.14.12 at 11:28 am

House prices in Phoenix going insane! Bidding war now with a home listed at $95,000 getting offers for $100,000 – as reported on CNN this morning. Home looks to be between 2,500 to 3,000 square feet, in Buckeye, the southwest corner in the Valley of Financial Death. U.S. prices are starting to follow the Canadian experience.

#167 Canadian Watchdog on 03.14.12 at 11:28 am

“Idiocy. Gold is not money or currency. We live in dollars. Bullion is a commodity. The dogma here is suffocating. — Garth”

Then why do central banks and governments hold it on their balance sheet Garth? Why is it that no matter how dire the situation in Europe, no country is willing to sell their gold? What’s so special about it?

http://www.bankofcanada.ca/rates/related/international-reserves/
http://www.fin.gc.ca/n12/12-026-eng.asp

Do you see REITs and stocks as reserves? No.

I understand your hate for gold and metalheads, but to deny it as a currency or invaluable asset is absurd and clearly underlines your misunderstanding of its role in international monetary reform.

You don’t buy gold to make money, you buy gold when you have money.

Central banks also hold foreign currency reserves, and they understand (as you should) that diversificiation is not a bad thing. I do not hate metalheads (although the rude comments here belie a certain antisocial bias), but pity anyone who gets talked into being overweight in an asset class despite the obvious dangers, be it real estate or PMs. Moderation is sadly lacking today, in the age of extremism and strong opinions built on Googling. — Garth

#168 Browns Bottom on 03.14.12 at 11:29 am

#125 eaglebay – Parksville on 03.14.12 at 8:58 am
“When you need a truck to work or “play” we care.
If you can afford it.
Back to you doomer. Need a job? Alberta awaits you.”

Ooohhh – touchy…..

I just left Ab, made a pile of $ after 20 yrs in the oil field, Deep water drilling, another pile in real estate along with everyone else who owned houses and saw the madness ending.

Sold it all 08 before the collapse, into gold, nearly doubled the pile since then. Semi retired 3 years ago. Im doing fine thanks.

My point is if you need a truck, fine, but obsessing about torque and HP is just a little OCD….. just like the blog dogs reading this daily :-)

#169 OkanaganInvestor on 03.14.12 at 11:29 am

#106 Beach Girl on 03.14.12 at 6:14 am

I appreciate your sexy, candid independence.

#170 eaglebay - Parksville on 03.14.12 at 11:36 am

Kids, pick the right school and skills.
100,000 jobs in next decade.

http://www.theprovince.com/technology/Wanted+workers+next+decade/6270402/story.html

#171 R on 03.14.12 at 11:38 am

What if everything that is going on is happening for a reason? Doesn’t anyone think it’s sort of strange why interest rates haven’t risen like they should yet? Is it possible that maybe this is happening for a reason as part of an agenda to devalue the dollar so much, create enough chaos that people will be begging for “the” New World Currency? What if so much of what goes on is to do with oil and control? This is so hard to explain and I have had many questions….I believe there are 2 people that can explain why this is going on and where we may be headed better than I can. True, these people may be trying to sell something, but you can look these 2 people up on Youtube for free, all the videos they are selling are all posted.

Lindsey Williams (btw he’s in his late 70’s so I really doubt he has much to gain by all this) and Gerald Celente.

Think for yourself.

The savants shall appear, apparitions on YouTube, swaddled in tinfoil… — Garth

#172 static on 03.14.12 at 11:49 am

Gold has not made inflation adjusted returns since 1980. Sorry Goldbugs, there have been many more stocks that have outperformed gold. This trend will continue.

Gold would not climb this high if it was not for low interest rates.

And the Internet. — Garth

#173 eaglebay - Parksville on 03.14.12 at 11:56 am

#144 backwardsevolution on 03.14.12 at 10:37 am
““Gov. David A. Paterson [New York State] and legislative leaders have tentatively agreed to allow the state and municipalities to borrow nearly $6 billion to help them make their required annual payments to the state pension fund.”
___________
New York State is borrowing by issuing bonds to make their required payments to the state pension fund.
They’re not borrowing from the pension fund.
Doomer. And yes, the Eagle has landed.

#174 neo on 03.14.12 at 12:09 pm

Here is the bottom line.

The Fed is trying to simultaneously boost equity prices and keep yields low in treasuries. In a free market that isn’t possible. In our centrally planned economy they are trying to achieve this. So as Garth gloats about “corporate profits” and a rush to equities. At the same time investors flee treasuries and the yield rises which can’t happen because of the $120 billion in debt they need to raise every month to keep the charade of a recovery going. At some point, yields will get to high and the equities will tank again. That has basically been the pattern. In a TRUE recovery interest rates and yields would be rising and normalizing as a show of the strength Garth seems to believe is there but really isn’t.

I’m not gloating, investors aren’t feeling bonds and equities will shrug off higher yields. There’ll be no rush to higher rates in the US until inflation requires attention. I’m so pleased you do not run a central bank. — Garth

#175 eaglebay - Parksville on 03.14.12 at 12:11 pm

#151 Steven Rowlandson on 03.14.12 at 10:53 am

I have an idea.
You take one of your gold coins, if you have any, and go to your local convenience store to buy cigarettes, booze and lottery tickets.
Let us know what happens.

#176 Arse on 03.14.12 at 12:12 pm

Gold bullion could be major form of currency in long term. I never bought any gold. Neither have I bought any real estate. My mother has written her house and her extensive collection of 22-carat gold jewellery in her will for me as the sole inheritor.

I am worried about the present and the near future. I pay for my living expeses and help out with my mom’s expenses by trading in the liquid stock market by day trading, which offers multiple chances to enter and exit the market with a small losses and good overall daily profits.

Doomers could be right in the long term, but boosters of equities markets like Garth could be right in the short to intermediate term.

God bless day traders. They provide the food for more evolved species. — Garth

#177 Alex N Calgary on 03.14.12 at 12:16 pm

browns bottom, you sure sound like you’re from AB, thanks for reinforcing the mostly true stereotype that everyone thinks of this province.

#178 Ralph Cramdown on 03.14.12 at 12:17 pm

| Still long ZSL.US under $10 (short silver ETF), partially hedged
| by April covered calls – fast melting.

Next time, try shorting a long silver ETF. Free cash and you get to collect the management fees instead of paying them.

Good lord, man! Did you just short 5mm shares???

#179 Ronaldo on 03.14.12 at 12:18 pm

Geez Garth, you’ve just exposed Andre to a possible break and enter. If I was Andre I would relocate my stash from the furnace room.

#180 eaglebay - Parksville on 03.14.12 at 12:18 pm

#152 TaxHaven on 03.14.12 at 10:54 am

I invest quite a bit in gold mining equities.
They produce tons of gold so that you guys can buy it.
I love gold bugs. Our best customers.
Don’t own physical gold myself, I don’t even like the colour

#181 smartalox on 03.14.12 at 12:20 pm

I kbow that the greater fool is the fool that follows, but they’ll have to work pretty hard to find fools greater than these two:

http://m.theglobeandmail.com/globe-investor/personal-finance/home-cents/five-questions-to-ask-before-selling-your-house/article2367962/?service=mobile

Fool Moves:
– buying in 2010, selling in 2012
– asking Don Campbell for advice
– taking that advice
– buying with a boyfriend
– selling with the boyfriend
– assuming that your family situation will remain unchanged for the term of your mortgage
– assuming that they’ll make money on the sale to cover the cost of their cheap, cookie-cutter ikea and home depot DIY renovations.
– ignoring mortgage prepayment charges, or closing costs on a new home.

Still, if these idiots can sell, shouldn’t you? Why let them get all the suckers? Record low rates and teaser mortgages are a gift to help you sell your home. The supply of buyers is drying up; sell now, or sell never!

#182 Ronaldo on 03.14.12 at 12:22 pm

#171 – static ”Gold would not climb this high if it was not for low interest rates.”

Nor would anything else, especially real estate.

#183 eaglebay - Parksville on 03.14.12 at 12:24 pm

#158 Ralph Cramdown on 03.14.12 at 11:13 am
“Now tote up the assets, and you’ll have a balance sheet. Then do the income statement, and come back to us and tell us whether the debt number still seems so scary.”
______________
Excellent reply.
Most people, especially today, only see the doomer side of things.

#184 KingBubbles on 03.14.12 at 12:26 pm

Todays spin from our M$M friends:

http://www.cbc.ca/news/business/story/2012/03/13/f-spring-housing-market-outlook.html

#185 HDJ on 03.14.12 at 12:30 pm

“And for a few years your gloomy message scared many of your blog-watchers into selling their homes and renting. House prices continued to increase and, consequently, they lost big.” HDJ

“Real estate values are rising in small portions of the country only. In most, they have flatlined or are in decline. Try to get out more.” — Garth

I was clearly referring to what occurred over the last few years, not to the price situation today. Wish you had read my comments more carefully before responding, and telling me to “get out more” – that was a rather inane contribution to the discussion.

Be precise and avoid disappointment. — Garth

#186 debtified on 03.14.12 at 12:30 pm

It amazes me how the same people who strongly think that real estate is currently highly speculative as an investment also strongly think that gold is not.

#187 Snowboid on 03.14.12 at 12:44 pm

#28 NotAGreaterFool on 03.13.12 at 10:16 pm…

They are desperate to hold onto their secretive monopoly for RE information.

Every day they postpone the inevitable, the closer they move towards being irrelevant.

#188 Blue Monster Lover of Cookies on 03.14.12 at 12:47 pm

#151 Steven Rowlandson on 03.14.12 at 10:53 am

Idiocy. Gold is not money or currency. We live in dollars. Bullion is a commodity. The dogma here is suffocating. — Garth
—–
Give it up Rowlandski, it’s no use.
I have often tried to reason with Garth that gold is money and he won’t bite. I think the term is cognitive dissonance.

It’s not understanding what money is. — Garth

#189 Pr on 03.14.12 at 12:49 pm

…The silver cost him $48 an ounce, and today’s worth $33. That’s a loss of 31%… Garth you probably know and most of the people *in the knowing* that the prices drop is the paper silver its achief buy manipulation. They now have less physical silver buy the day. If 20% ask for delivery its all over. NEVER buy the paper gold or silver they will burn in you hand one day.

“Not owning gold is a form of insanity,” Robin Griffiths of Cazenove Capital (believed to be the private broker for the British royal family) told CNBC on Jan. 11. “It may even show unhealthy masochistic tendencies, which might need medical attention.”

#190 tc on 03.14.12 at 1:13 pm

if the vix is low it’s because confidence is high…that’s not contrarian…it hasn’t been this low since 2007…just before the last correction…newsletter writers are all bulls right now…maybe a contrarian should be on the other side of the bet…just a thought

The Vix is lower because conditions surrounding the US economy and European debt have improved markedly. How is that hard to understand? — Garth

#191 bill on 03.14.12 at 1:14 pm

Garth
the crazies abound today for some reason.
I wonder what weird tidal effect is at work on their brains.
and the anti – jew brigade from the okanagan and rowlandson …
you are a blight on humanity. there are plenty of other sites devoted to your drivel why dont you go there and post?

#192 Smoking Man on 03.14.12 at 1:17 pm

Looks like the herd swallowed the cool aid, fake economic news down south. (Self fo filling)
Treausry’s are selling off, yields are climbing. the curve looks like it’s been in water for a while and starting to bend.

How can I go against the herd.

What’s that mean for Canadian Real easte. The Fat lady is putting on her make and warming up.

Do Ray Me Fa etc etc

#193 EdmontonJim on 03.14.12 at 1:22 pm

Not only is bullion not currency, it can’t ever be currency. Currency is, and always has been, an aspect of governing society, whether by law or convention. Even when gold coins were used, the gold had to be minted by a trusted authority to prove its authenticity and value.

In the Klondike days, when gold dust was used to purchace supplies,- the gold was more commodity for barter than currency.

The simple truth is that returning to a gold standard would cost too much, unless they confiscated gold like the last time the US went there. So gold bugs – here is the true value of your gold:

Whatever some fool is willing to give you for it. The best bets are:
If society collapses: Your life, if you’re lucky.
If the economy collapses: Little-to nothing – your country thanks you for your cooperation.
If it’s sitting in a bank: Gold? What gold? This is ours.

Good luck with that.

#194 zeeman1 on 03.14.12 at 1:27 pm

#74 Blase.

My thoughts exactly.

#195 OkanaganInvestor on 03.14.12 at 1:47 pm

#86 Nostradamus Le Mad Vlad on 03.14.12 at 1:30 am

“The Plot To destroy the US.”

http://www.opinion-maker.org/2012/03/the-plot-to-destroy-the-united-states/#

This is the best article on current world affairs I have ever read. We are royally screwed!

#196 TRT on 03.14.12 at 1:47 pm

Garth,

What do you have to say about your peers at Gold,man Schs??

Is what the CEO says common amongst Investment Advisors?? or are they all totally altruistic??

Not my peers, dude.– Garth

#197 TRT on 03.14.12 at 1:52 pm

NEW CAR SALES UP 15.4% year over year.

The divergence of classes in Canada is happning now.

Expect record sales of new cars/luxury items to continue. Iphones, high end purses, brand name items, etc.,etc.

The unskilled labour class is mattering less and less nowadays.

The ‘consumer’ the gov is worried about is only the top 33% of the classes. The bottom 66% spending habits don’t matter anymore as they mostly buy staples anyways, used cars, etc.

The bottom 66% will call the other 33% greaterfools etc. but the joke is on them….

#198 EdmontonJim on 03.14.12 at 1:53 pm

In case I wasn’t clear enough in my post.

A functioning government will never ever allow physical gold to be used as widespread currency, and trying to use it for barter will be labled tax evasion.

In the absence of a functioning government, any person owning gold will be relieved of it by anyone smarter, stronger or less ethical for little if anything in return.

So sure, use it as a stable commodity hedge against inflation, but don’t think it’s going to be used for anything but jewlery and teeth.

#199 Ralph Cramdown on 03.14.12 at 1:55 pm

…The silver cost him $48 an ounce, and today’s worth $33. That’s a loss of 31%… Garth you probably know and most of the people *in the knowing* that the prices drop is the paper silver its achief buy manipulation. They now have less physical silver buy the day. If 20% ask for delivery its all over. NEVER buy the paper gold or silver they will burn in you hand one day.

If you’re going to quote the Man, at least update his quotes. Silver’s below $32. Silver hoarders make even less sense to me than gold hoarders. They claim the market’s rigged: Every time it goes up, it’s the natural order of things, but when it goes down, it’s always a fix! And yet, instead of buying the dividend paying, blue chip stock of the supposed fixers…

When I wrote that, silver was $33. But that was yesterday. Worth less now. — Garth

#200 Blue Monster Lover of Cookies on 03.14.12 at 1:58 pm

#171 static on 03.14.12 at 11:49 am

Gold has not made inflation adjusted returns since 1980. Sorry Goldbugs,
——-
That’s a top contender for the stupidest comment ever award! Congratulation static.

#201 HDJ on 03.14.12 at 1:59 pm

“I was clearly referring to what occurred over the last few years, not to the price situation today. Wish you had read my comments more carefully before responding, and telling me to “get out more” – that was a rather inane contribution to the discussion.” HDJ

“Be precise and avoid disappointment.” — Garth

Why is it so difficult for you to give a straight answer? My point was precisely made.

#202 TRT on 03.14.12 at 2:02 pm

And yet another story on the Investment community…

Rogers, Bell, and Telus are dragging the TSX down. They are down about 2% each. This is BEFORE an announcement comes out from the gov’t. Based on the percentage moves down, we all know now which way that ‘tight kept secret’ announcement will lean. Is this type of information leak common in the investment community. Is this insider trading?

#203 Blue Monster Lover of Cookies on 03.14.12 at 2:02 pm

#185 debtified on 03.14.12 at 12:30 pm

It amazes me how the same people who strongly think that real estate is currently highly speculative as an investment also strongly think that gold is not.

——
Gold is not an investment, gold is money.
Gold mining is an investment.

#204 guy from toronto on 03.14.12 at 2:04 pm

does DA = eaglebay-Parksville?

They both seem to have a lot of time on their hands, and both seem to know everything about everything.

And aren’t shy to let us know that they know everything about everything too.

#205 An Cat Dubh on 03.14.12 at 2:07 pm

Interesting take on gold and silver. I have some, but not in large amounts. No one should have all eggs in one basket. As far a nutjobs running for Repubicans I agree, though Obama and his cabinet are the same, it’s not going to make a difference. The Bilderbergers are calling the shots anyways. Cheers!

#206 NoName on 03.14.12 at 2:11 pm

News of the day, and it’s not gold…

http://goo.gl/bScFn

The decision will have a significant impact on Canada’s publically listed telecom companies.

#207 backwardsevolution on 03.14.12 at 2:23 pm

What’s going on in the U.S.?

GDP 2009: -2.4%

GDP 2010: 3.0%

GDP 2011: 1.7%

GDP (which stands for gross domestic product: the total market value of all the goods and services produced by a country in a given period) grew at a “lukewarm” 1.7% in 2011 over 2010. When compared to 3.0% growth in GDP in 2010 over 2009, the obvious question is: where is the economic recovery?

The picture becomes even more distressing when we look at fourth-quarter GDP numbers, because they point to a deceleration in growth.

On the surface, the 2.8% rise in fourth-quarter U.S. GDP was weaker than what Wall Street expected. When digging deeper into the numbers, we find that restocking of business inventories accounted for a whopping 1.94 % of GDP in the quarter. This is temporary boost to GDP.

If we remove inventory restocking from the numbers, we find that the U.S. economy grew at just a measly 0.8% in the fourth quarter of 2011, when compared to the third quarter’s 1.8% rise in GDP.

#208 EdmontonJim on 03.14.12 at 2:29 pm

Another fun fact about gold as Money.

The most recent Canadian gold coin (the 1/10th oz ‘Dragon’). It has a face value of $5.

Lets say you go to an electronics store and buy a $500 TV. You ask the salesman if you can pay him with 4 dragons and he says ‘sure’. You give him the coins and ask for change.

He says. ‘What change? You still owe me $480′. You protest that the coins are worth much more than that, which he responds by showing you that the coins clearly show $5.

You ask for your money back, and he shrugs and gives you a $20 bill.

You throw a tantrum and he throws you out of the store. You call the cops, they explain that he hasn’t broken any laws, and laugh their butts off when you hang up.

You sue him and win. Your legal fees are $1000 and you die of a heart attack a week later.

#209 neo on 03.14.12 at 2:35 pm

I’m not gloating, investors aren’t feeling bonds and equities will shrug off higher yields. There’ll be no rush to higher rates in the US until inflation requires attention. I’m so pleased you do not run a central bank. — Garth

The highest the 10 yr got before the market turned over was 4.0% and that isn’t even that high. Look Garth. Your missing the point. The Fed wants a high/rising equity market and a concurrent low/falling yield in treasuries to continue to fund their bloated government. THAT IS NOT POSSIBLE. I know they are attempting this slight of hand with QE1, QE2, Operation Twist etc. But you can’t have it both ways. Either we are in recovery like you say and the emergency rate training wheels come off and yields rise and the equity market continues to rally. But it won’t. It hasn’t done so for a decade. All we’ve had are fits and starts and crashes, that in the intermediate you make money, but in the long run the market moves sideways.

Until inflation needs attention? Oh that’s rich..lol

#210 NoName on 03.14.12 at 2:42 pm

#66 Canadian Watchdog on 03.13.12 at 11:59 pm

Looks like those robot algos can also play hockey 2…
http://youtu.be/7njq2hFbw14

#211 a prairie dawg on 03.14.12 at 2:52 pm

Gold stopped being money in 1971 when Nixon axed the gold standard. But…

-It can be described as a store of value.
-It can even be bartered and exchanged for goods or currency.

But gold is not money, any more than wheat is money.

#212 backwardsevolution on 03.14.12 at 2:53 pm

eaglebay – “New York State is borrowing by issuing bonds to make their required payments to the state pension fund.
They’re not borrowing from the pension fund.
Doomer. And yes, the Eagle has landed.”

What’s a bond? Isn’t it debt? You mean New York State doesn’t have the money to pay? Who is New York State borrowing from then? Apparently they’re borrowing from the pension fund.

“When New York State officials agreed to allow local governments to use an unusual borrowing plan to put off a portion of their pension obligations, fiscal watchdogs scoffed at the arrangement, calling it irresponsible and unwise.

And now, their fears are being realized: cities throughout the state, wealthy towns such as Southampton and East Hampton, counties like Nassau and Suffolk, and other public employers like the Westchester Medical Center and the New York Public Library are all managing their rising pension bills by borrowing from the very same $140 billion pension fund to which they owe money.

Across New York, state and local governments are borrowing $750 million this year to finance their contributions to the state pension system, and are likely to borrow at least $1 billion more over the next year. The number of municipalities and public institutions using this new borrowing mechanism to pay off their annual pension bills has tripled in a year.”

http://globaleconomicanalysis.blogspot.com/2012/03/public-pension-ponzi-scheme-new-york.html

http://www.nytimes.com/2012/02/28/nyregion/to-pay-new-york-pension-fund-cities-borrow-from-it-first.html

Apparently the Eagle has landed -on his head!

#213 Frustrated Buyer on 03.14.12 at 2:58 pm

Presently looking for a home in York Region.. the bidding wars are unbelievable.. homes are going 50,000 over asking prices.. we are trying to stay positive and thinking things will change.. we sold our home in the summer of 2011.. thinking prices will drop a little.. but its not looking that way.. prices last summer were starting at 629000.00 now they start at 650000.00 without the bidding wars..

So, wait. Problem solved. — Garth

#214 Devore on 03.14.12 at 3:03 pm

#154 Ralph Cramdown

If you want to count the young couple buying a condo as leveraged speculators, then I get to count buddy who puts a gold necklace on his credit card.

A bogus comparison, but even so, real estate wins by a long shot. And then fails for speculating on a necessity of life, which in the end will hurt everyone. A gold bubble bursting is irrelevant beyond its immediate fallout for investors.

#215 Wiki on 03.14.12 at 3:07 pm

Money From Wikipedia, the free encyclopediaJump to: navigation, search For other uses, see Money (disambiguation).

Coins and banknotes – the two most common physical forms of money.Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context.[1][2][3] The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past, a standard of deferred payment.[4][5] Any kind of object or secure verifiable record that fulfills these functions can serve as money.

Money originated as commodity money, but nearly all contemporary money systems are based on fiat money.[4] Fiat money is without intrinsic use value as a physical commodity, and derives its value by being declared by a government to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for “all debts, public and private”.

The money supply of a country consists of currency (banknotes and coins) and bank money (the balance held in checking accounts and savings accounts). Bank money usually forms by far the largest part of the money supply

The use of barter-like methods may date back to at least 100,000 years ago, though there is no evidence of a society or economy that relied primarily on barter.[9] Instead, non-monetary societies operated largely along the principles of gift economics and debt.[10][11] When barter did in fact occur, it was usually between either complete strangers or potential enemies.[12]

Many cultures around the world eventually developed the use of commodity money. The shekel was originally a unit of weight, and referred to a specific weight of barley, which was used as currency.[13] The first usage of the term came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money – often, the shells of the money cowry (Cypraea moneta L. or C. annulus L.). According to Herodotus, the Lydians were the first people to introduce the use of gold and silver coins.[14] It is thought by modern scholars that these first stamped coins were minted around 650–600 BC.[15]

#216 Wiki on 03.14.12 at 3:09 pm

A black market or underground economy is a market in goods or services which operates outside the formal one(s) supported by established state power. Typically the totality of such activity is referred to with the definite article as a complement to the official economies, by market for such goods and services, e.g. “the black market in bush meat” or the state jurisdiction “the black market in China”.

It is distinct from the grey market, in which commodities are distributed through channels which, while legal, are unofficial, unauthorized, or unintended by the original manufacturer, and the white market, the legal market for goods and services.

Worldwide, the underground economy is estimated to provide 1.8 billion jobs

#217 Devore on 03.14.12 at 3:10 pm

#155 long gold

You’re also speculating the world doesn’t end tomorrow. Go outside, breathe deep, get some perspective.

#218 Harlee on 03.14.12 at 3:14 pm

Garth is on his mark with his answer @170. That made me Laff Out Loud. Thanks for the chuckle…
I really like the old classic movies. “Silver Screen” is one of my favourite channels. Have you “goldbugs”heard of a Humphrey Bogart movie called “The Treasure of the Sierra Madre” (1948) ? Not only an entertaining action flick,but also a very good study in what greed can do to ordinary men who lust for gold.Worth a view if you’ve never seen it. Hollywood doesn’t seem to make movies like this anymore,just simplistic “comic book” stuff. Pity.

#219 Smoking Man on 03.14.12 at 3:19 pm

#74 blase on 03.14.12 at 12:29 am

It’s not amway,

It a big company trying to enter an established market that is not having success.

It was a awsome Macro enabled power point presntaion that blew the hiring manager of his seat, within the power point was all there gaps, and how to fix them

My son’s compition came in with bristl board and crayons.

My sons’s presentaion was done with balls as huge as the moon.

#220 Nemesis on 03.14.12 at 3:20 pm

“Financial assets are largely unloved and undervalued.” – Hon. GT

Hmmm… if true, could it possibly have something to do with this?…

“It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail.” – Greg Smith, today in the NYT – formerly Goldman Sachs’ Executive Director US Equities/Derivatives [Europe, Middle East & Africa].

No. — Garth

#221 OkanaganInvestor on 03.14.12 at 3:21 pm

#190 bill on 03.14.12 at 1:14 pm

As a wise man once said:
“Not only is your comment wrong, but you err in attacking personally, for a view held. You are my guest. If you have a point to make, do it without the invective. It diminishes you. — Garth”

Not anti-Jewish, just want our leaders to put Canadian interest first.

#222 Ronaldo on 03.14.12 at 3:22 pm

#192 – Edmonton Jim – seems some believe that silver may be a good alternative to paper currency once again. Only problem, there isn’t enough of the stuff available for that purpose.

http://www.silver-prices.net/home/silver-as-currency.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+SilverPrices+%28Silver+Prices%29

Nobody in a developed country will ever trade little pieces of metal for food, hairspray and lottery tickets. — Garth

#223 backwardsevolution on 03.14.12 at 3:26 pm

One-minute video entitled, “How the Hell did GM Pay Back its Loans in Full and Ahead of Schedule? Well, it Didn’t.”

http://www.youtube.com/watch?v=SOaS2SymjQ4

Why, it seems GM paid back one loan (provided by the government) by tapping another loan (provided by the government)!

Where’s my sugar daddy?

GM got in trouble because it got into SUBPRIME MORTGAGES, because of its lending facility.

#224 Van guy on 03.14.12 at 3:27 pm

My last post is no good Garth?

No. Bad link. — Garth

#225 pound puppy on 03.14.12 at 3:30 pm

Happy Birthday Garth!

Its your special day all sprinkled with “Gold Dust”

#226 Trusting in Statistics on 03.14.12 at 3:35 pm

A universal strategy of large institutions is the manipulation of their “books & records” in a positive direction – i.e. one suggesting high levels of current performance and future growth. We see this happen time and again across institutions in all sectors of developed societies, private and public. Large corporations, for example, extensively use off balance sheet vehicles riddled with leveraged products to hide their exposure to risk, or various other accounting tricks to over-state their revenues/profits and under-state their costs/liabilities.

What’s done in the way of data manipulation at the city or state level, however, is child’s play when compared to what is being done at the level of national governments and their administrative agencies. This manipulation is occurring with full force now because, without it, the dismal state of the global economic system would be revealed and, ultimately, almost none of these institutions would survive the ensuing “creative destruction”. They are caught in a self-reinforcing and self-defeating cycle in which the culture of manipulation takes center stage and shines.

People want to feel that the state of their world at every scale can be summed up with statistics, so they are given ones that have been juked into oblivion to mold a pre-conceived narrative. The open question here is how long before the discrepancy between reality and the massaged stats overwhelms the otherwise embedded culture of the manipulated masses.

#227 Canadian Watchdog on 03.14.12 at 3:39 pm

Nobody in a developed country will ever trade little pieces of metal for food, hairspray and lottery tickets. — Garth

What? There are over a dozen states with alternative currency bills pending in legislation that will allow citizen to transact and pay for goods in gold and silver if they choose.

http://www.scstatehouse.gov/sess119_2011-2012/bills/862.htm
http://data.opi.mt.gov/bills/2011/billhtml/HB0513.htm
http://www.house.mo.gov/content.aspx?info=/bills091/bills/hb561.htm
http://www.leg.state.co.us/clics/clics2009a/csl.nsf/fsbillcont2/107A082F6E9A3E098725753E005BDC18?Open
http://legislature.idaho.gov/legislation/2010/H0622.htm
http://www.in.gov/apps/lsa/session/billwatch/billinfo?year=2009&session=1&request=getBill&docno=453#latest_info
http://www.gencourt.state.nh.us/legislation/2011/HCR0013.html
http://www.ncga.state.nc.us/Sessions/2011/Bills/House/HTML/H301v1.html
http://wapp.capitol.tn.gov/apps/BillInfo/Default.aspx?BillNumber=SJR0098
http://www.leg.state.vt.us/database/status/summary.cfm?Bill=H.0361&Session=2012
http://lis.virginia.gov/cgi-bin/legp604.exe?111+ful+HJ557
http://apps.leg.wa.gov/billinfo/summary.aspx?bill=4010&year=2009#documents
http://thomas.loc.gov/cgi-bin/query/z?c112:H.R.1495:

Utah was the first to pass the bill: http://le.utah.gov/~2011/htmdoc/hbillhtm/hb0317s01.htm

It’s called nullification Garth.

Irrelevant and meaningless. — Garth

#228 Devore on 03.14.12 at 3:39 pm

Meanwhile, the bond market is quietly doing its thing.

http://www.bloomberg.com/quote/GCAN5YR:IND/chart

#229 static on 03.14.12 at 3:47 pm

@ #194 BLEW LOVER OF COOKIES

That’s a top contender for the stupidest comment ever award! Congratulation static.
_________________________________

Please provide evidence that Gold has created inflation adjusted highs from its last peak in 1980. Oh wait, I’ll save you time. You can’t!.

#230 Identify fraud in all its forms on 03.14.12 at 3:48 pm

Only in a debt-based money system could debt be curiously cast as an asset. We’ve made “extend and pretend” a quaint phrase for a burgeoning market for financial lying and profiteering aimed toward preventing the collapse of a debt- (or lack-) based system that was already doomed by its initial design to collapse. This will detail the major components and basic evolution of fake wealth creation, accelerating debt expansion, hollowing out of the economy, and inevitable financial implosion.

Implications:

Apparently you only need a few things to make a mockery of the entire global economic system, and big banks garnered these few important things through “regulatory capture”:

1) Unregulated, unenforced rules (particularly for derivatives)
2) license to “mark to model” (assign your own values to your assets)
3) ability to peg present value to irrational expected future returns (based on unlimited, exponential growth)
4) infinite leverage (no effective requirements for reserve capital in unregulated “shadow” markets)
5) massive size, so that the bank or company is “too big to fail”
6) non-transparency and non-accountability.

So here we have a system where you can 1) make up your own rules, 2) establish any value for any asset you choose, 3) inflate that value a hundred fold based on ostensible future value and returns, 4) leverage that inflated value another thousand or a million fold simply on your say-so, enough to buy up multi-billion dollar firms if you choose, 5) lean on taxpayer bailouts when you get into trouble, and 6) do this without any disclosure or accountability, all based upon a self-interested formula you concoct to enrich yourself.

To this we can now add:

7) effective take-over of national governance by private financial interests, meaning zero prosecution for large-scale control fraud, continuing complicity with and backdoor subsidies to big banks, and the stripping of national assets to pay for illegitimate debts.

8) making uncertain the very notion of private property by promoting illegal and nonsensical assignment and title processes in the mortgage market.

9) shameless annihilation of pensions and investor funds by simply leveraging those funds out of existence and charging enormous fees to do so.

If fraud is something from nothing, then solutions to fraud involve re-establishing exchange systems based upon something from something. These systems are already being developed with local currency experiments, bartering, and a host of other emerging alternate economic models and practices . These options need to be expanded and further developed.

Our task is to identify fraud in all its forms, stop our participation in them, pursue a counteroffensive and commit to moving our money, time, and value to genuine, prosperous, health-affirming, financial commitments and practices. We can see increasingly that we have nothing to lose and much to gain not only in terms of financial stability but personal and community fulfillment.

#231 Debtfree on 03.14.12 at 3:58 pm

God bless day traders. They provide the food for more evolved species. — Garth Thanks for the laugh garth .
In small towns you get to know who’s who and all the gold bugs that I have met are also conspiracy bugs . The funniest part is that most of the ones I’ve met keep their bars and coins in the (hated) bank . I all ways ask where would I keep my coins if I bought some . The answer is always the same . In the bank .
I guess no one else here realizes the implications of the new wood lot rules in B.C. It’s been the buzz at timmies for days . Lots of salivating in my neck of the woods . If you read this blog cristy thanks for the cherry but you’re still not getting my vote. Try harder.
Albertans trapped on vanisle tail gating each other up and down the island highways in off road trucks . Thanks for the laugh eagle bay . Just think you’ll be able to go boating in comfort in three more months .

#232 Bill Gable on 03.14.12 at 4:01 pm

Garth was incredible on CBC – ” Almanac”, in Vancouver.

A lot of kool aid drinkers. Thought Mr. Turner was very patient with the callers.

I actually heard one woman that said she was renting – the rest, still don’t get it.

CBC host was the worst I have heard. Idiocy extant here in LaLa land.

Mr. Turner tried…but are they listening?

#233 bill on 03.14.12 at 4:01 pm

okanagan
I think you are lying ok ? my opinion.you have yours.
I read the web site .its the usual drivel from an anti – semite.

#234 Industrial Guy on 03.14.12 at 4:02 pm

I was in Windsor yesterday … house Vulture central. While you’re considering buying that million dollar shack in Parkdale. Take a look at what you down payment gets you in Windsor. Yes, that’s a price for a whole houses!!!! it’s actually a duplex. Separate water heaters too. Can it go any lower?

http://www.realtor.ca/propertyDetails.aspx?propertyId=11558827&PidKey=-1839314950

#235 backwardsevolution on 03.14.12 at 4:05 pm

Employment in the States? Everything b-e-a-utiful?

“‘Nonfarm payroll employment rose by 227,000 in February, and the unemployment rate was unchanged at 8.3 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in professional and businesses services, health care and social assistance, leisure and hospitality, manufacturing, and mining.’

The Bureau of Lies and Scams claims that private employment rose by 233,000, with government decrementing the number by 6,000. They also claim that all of the employment gain in manufacturing came from durables, while the durable goods report was extremely negative last month. Hmmm… […]

This chart, the change in employment ex change in population, more than anything else, illuminates the evisceration of the American workforce, and nothing — absolutely nothing — indicates that we’ve done anything to change that over the last decade.

We have not added a single job, adjusted for population, since 2006 — and even then going all the way back to 2000 the “gains” were tiny and fleeting. Until and unless we stop sending jobs overseas there will be no durable economic improvement.”

http://market-ticker.org/akcs-www?post=203146

#236 Canadian Watchdog on 03.14.12 at 4:10 pm

Irrelevant and meaningless. — Garth

Not to crapkickers.

I forget the one more for RI as of last month PDF: http://t.co/6wRTawOz You have no idea what’s going on. I follow this area at the highest level.

Tea Party nutbar legislation. Irrelevant and meaningless. I’m surprised you waste your time so freely. — Garth

#237 backwardsevolution on 03.14.12 at 4:12 pm

“Now, however, the fun begins. See, the TNX moved up strongly — the 10 year yield. This in turn will force The Fed to sit on its bond holdings to maturity, lest they take a market loss (and given their thin capitalization that would bankrupt The Fed instantly!), which in turn ties Bernanke’s hands to a large degree.

I know many will argue that The Fed can always “print more”, but that’s not how it works. This is a negative feedback situation and triggering a run out of the long end of the bond curve isn’t so much a problem for The Fed as it is for the Federal Government’s financing and deficit numbers.

Take a look at the FVX (5yr Treasury Yield) and you see a materially-more-frightening thing. Yields have backed up from 0.7% to 0.97%. Sounds trivial. It’s not — it’s a huge move, close to 40% on yield since the end of January!

This matters because the Federal Government’s deficit spending in February is what has been driving the “improving” economic numbers, just as it has been for the last three years. This is a pincer move; while yields have to normalize if and when they start to move in this direction that move will also choke off federal deficit spending capacity. […]

Bernanke, Obama and Congress have swam into the jaws of the shark and now the trick is to try to get back out before the teeth clamp down on all of us. The problem is that extrication in one area will produce undesirable moves in another. If the Federal Government pulls back on deficit spending then the economy softens materially, unemployment goes back up and with a falling labor participation rate tax receipts collapse, adding to the problem. If The Fed pulls liquidity then interest rates go up, the deficit goes up, Congress finds itself up against the debt ceiling again in short order and a pullback on deficit spending will become inevitable. If The Fed engages in aggressive acts to try to prevent the yield curve from backing up on them then oil will likely skyrocket, gas prices will go through $5 and we all know what comes next. Finally, the corner we’ve painted ourselves into has occurred into a cyclical profit cycle peak. […]

Finally, last night the Shanghai index collapsed in the last bit of trade when China said it was not going to back off on halting property speculation. The move was huge — about 4% straight down right at the end of the session, and it drew almost no notice in the media here and no reaction came through in our markets either.”

#238 Ralph Cramdown on 03.14.12 at 4:21 pm

If we remove inventory restocking from the numbers, we find that the U.S. economy grew at just a measly 0.8% in the fourth quarter of 2011, when compared to the third quarter’s 1.8% rise in GDP.

So I guess the key question is: Why on earth would businesses be cumulatively restocking inventory to the tune of $71 billion? Do you know something they don’t know?

#239 jess on 03.14.12 at 4:31 pm

36 coastal
stimulus story
The mission of the Fresno Redevelopment Agency is “To strategically invest time and resources to improve neighborhoods, and develop industrial and commercial properties for the 21st century and beyond.”

http://www.fresnorda.com/?rda=updates&n=news

=============
development stimulus
Metropolitan Museum ,Granite Park downtown baseball stadium etc

Austerity long-term debt. Add foreclosures less tax collected, city workers let go , pensions cuts etc

Fresno Grizzlies owe city $275000 in back rent http://www.fresnobee.com/2012/03/12/2757376/fresno-mayor-lays-out-financial.html#storylink=omni_popular#storylink=cpy

The 2010 United States Census[24] reported that Fresno had a population of 494,665

#240 jess on 03.14.12 at 4:31 pm

ecommerce warehouse

hilariously written i guess the boos should go undercover!
http://boingboing.net/2012/02/28/miserable-working-conditions-i.html

#241 Canadian Watchdog on 03.14.12 at 4:35 pm

“Tea Party nutbar legislation. Irrelevant and meaningless. I’m surprised you waste your time so freely. — Garth”

Tea Party, OWS, nutbars, cowboys…call it what you want. It’s got legs and it’s moving.

Enough now.

Bizarre. — Garth

#242 Ralph Cramdown on 03.14.12 at 4:35 pm

What? There are over a dozen states with alternative currency bills pending in legislation that will allow citizen to transact and pay for goods in gold and silver if they choose.

And how’s that going to work? The government sells you a coin with $30 of silver in it for $50 face value and keeps the rest as seigniorage? Gold bugs will eat that right up. Wait, then silver pops again and everybody’s melting the coins down in their microwaves? Or maybe it’ll be exchanged at spot, and everybody will be checking their smartphones all day? I don’t know about where YOU live, but around here, a lot of cashiers have trouble enough making change with the currency we’ve got.

You guys crack me up.

#243 Ralph Cramdown on 03.14.12 at 4:42 pm

…transact and pay for goods in gold and silver if they choose.

You should get out in front of that one and invent a cash register with a little assaying kit on the side. I hope it doesn’t slow down the lineup at McD’s too much.

#244 888realtor on 03.14.12 at 4:47 pm

Canadian economy needs more borrowers in order to stay afloat.

Here is the text message I received 5 min ago: “First National Financial offers mortgages 4 yrs. –> 2.99 for up to 30 years and 10yrs. –> 3.99 for up to 35 years”.

Happy borrowing!

#245 Ralph Cramdown on 03.14.12 at 4:57 pm

Re: The cash register/assaying device. Call it “Pay & Weigh.” Kinda like Tap & Go, but slower.

#246 Canadian Watchdog on 03.14.12 at 4:57 pm

#242 Ralph Cramdown

Not for burgers, for business.

http://www.youtube.com/watch?v=CGrSyQdl4q8
http://www.bbc.co.uk/news/business-17203132

Spend your dollars, save in gold.

#247 jess on 03.14.12 at 5:10 pm

Mortgage execs charged with accounting fraud

CNNMoney‎ – 23 hours ago
Thornburg filed for bankruptcy in May of 2009

http://www.sec.gov/news/press/2012/2012-42.htm
=

Business model
Having begun as a conventional mortgage, REIT, Thornburg Mortgage branched out to also originate mortgages,[5] working with other financial institutions (a.k.a. correspondent origination) from 1999, selling directly to consumers (direct retail origination) from 2001 and moving into wholesale origination in 2006.[6] The company markets its products via print advertising, direct mail and online, avoiding the significant expenses associated with maintaining a network of branches. Other ways that the company looks to reduce expenses is by outsourcing the underwriting and servicing of its mortgages.[5]

Thornburg Mortgage’s customers are typically affluent and with superior credit. According to the company’s own figures (as of March 31, 2007) the average borrower had an annual income of $204,012 and a FICO score of 743. The rate of borrower default on these loans has also historically been significantly lower than the industry average.[6] wiki

#248 Canadian Watchdog on 03.14.12 at 5:13 pm

#241 Ralph Cramdown

“And how’s that going to work?”

It’s called innovation. You store your gold-silver at a bank and they give you a debit card that deducts the value of your metal (already in China). They could rearrange the bars on a weekly basis to segregate ownership of bars, coins, ect. Sprott is already on it and has applied for a chartered bank license in Canada to create the first commerce bank for metals storage and exchange.

Also interesting to note: TD Joins London Bullion Market Association as Full Member http://td.mediaroom.com/index.php?s=43&item=1492

They are years ahead of your thinking.

You guys are such comedians. A debit card backed by constantly-changing commodity prices making it impossible to ascertain relative values. Just what the word needs. Bartering hockey cards would be a step up. — Garth

#249 groovin123 on 03.14.12 at 5:20 pm

Gold always has been, and always will be a currency.

It protects your true “buying power” during periods of currency devaluation.

A “bet” on gold is simply a bet on increasing levels of government debt/deficits, and fiat currency printing to service it.

In the case of the US, observe their fiscal house and form your own opinion. Recent economic data suggests to me “bottom bouncing”- a bottom does have to form somewhere.

I would not bet against US markets at this point because you will not win against the printing presses but as far as true purchasing power goes, simply look at the levels of the DOW vs. commodities such as gold 10 years ago, and compare those levels to today.

How can so many people have no idea what currency is? — Garth

#250 debtified on 03.14.12 at 5:26 pm

202 Blue Monster Lover of Cookies on 03.14.12 at 2:02 pm

Gold is not an investment, gold is money.
Gold mining is an investment.
***********************************************

Why do people buy gold then? So they can spend it – just like money?

But anyway, it’s not important now,. You missed my point. Talking to people who think gold is money is just like talking to someone today who still thinks that buying a house is a good investment.

Speaking of houses… Buy or Rent?

[Same house in Fort McMurray]

BUY – $1.049M : http://tinyurl.com/6us6lvo

RENT – $4,500 : http://tinyurl.com/7v6lopw

#251 Ralph Cramdown on 03.14.12 at 5:28 pm

You store your gold-silver at a bank … Sprott is already on it

Of course he is. Storage fees and service charges. And he doesn’t have to pay interest. Your chip card could be backed by compressed ingots of donkey dung, for all it would impact his revenue model.

#252 backwardsevolution on 03.14.12 at 5:32 pm

Ralph Cramdown – “So I guess the key question is: Why on earth would businesses be cumulatively restocking inventory to the tune of $71 billion? Do you know something they don’t know?”

Perhaps they are seized with:

1. Wishing thinking/extreme optimism?
2. Bent on providing some really good sales coming up?
3. Stupidity?

Absent inventory restocking, the U.S. economy barely grew at all. If it weren’t for the U.S. government pumping money into the economy (food stamps, extended unemployment, temporarily stopping foreclosures, et cetera), there’d be what – a big fat negative number.

#253 Canadian Watchdog on 03.14.12 at 5:33 pm

“You guys are such comedians. A debit card backed by constantly-changing commodity prices making it impossible to ascertain relative values. Just what the word needs. Bartering hockey cards would be a step up. — Garth”

You’re out of tune Garth. Several different gold accounts are already being offered at ALL major Chinese and Indian banks. http://tinyurl.com/88d2n7l

You can put a down payment for a mortgage with gold, link your debt card, borrow against your gold, trade gold and on and on. If there’s demand for it and banks can profit from it, they’ll offer it.

Do a poll on this blog and ask how metalheads would store their gold and silver if Sprott opened a PM bank with a debt card. You’d be surprised.

So move to China or India if this turns you on. What a waste of time you are today. — Garth

#254 Alberta Ed on 03.14.12 at 5:34 pm

It’s getting BETTER, at least according to a Calgary realtor, who just told us “The city is your best investment potential and give (sic) the market is starting to pick up might be a better investment now then say next year. The market is starting to change again and we are seeing multiple offers on the most desirable properties, if inventory does not rise we will find ourselves in a sellers market quicker than we thought.” There you have it. Truth.

#255 debtified on 03.14.12 at 5:42 pm

#245 Canadian Watchdog on 03.14.12 at 4:57 pm

http://www.bbc.co.uk/news/business-17203132


***********************************************

I read almost all of your posts. I thought you are doing good research and for the most part you make a lot of sense. That’s why it makes me wonder if you really seriously believe that Iran charging gold for their oil will actually work.

Is there even enough physical gold to sustain this transaction in any significant period of time. At the end of the day this just means a return to gold standards and I’m sorry to tell you that it is not going to happen in your lifetime. Sorry about that.

#256 Browns Bottom on 03.14.12 at 5:43 pm

” A debit card backed by constantly-changing commodity prices making it impossible to ascertain relative values. Just what the word needs. Bartering hockey cards would be a step up. — Garth”

seeing as your stirring the goldbug hornets nest today its fair game to reply….

your comment above also applies to people trying to trade in a global economy when the governments are flushing the system with endless new money that is fluctuating daily.

EG swiss franc getting devalued back in sept ’11.

Also….
#207 EdmontonJim on 03.14.12 at 2:29 pm
Another fun fact about gold as Money…..Lets say you go to an electronics store and buy a $500 TV. You ask the salesman if you can pay him with 4 dragons and he says ‘sure’. You give him the coins and ask for change.”

Nice little story…. try that carrying 20 1 Oz gold maple leafs across a border into another county and telling the customs “they only have a face value of $50 each”

Be careful picking up soap when they lock you up :-)

#257 Nostradamus Le Mad Vlad on 03.14.12 at 5:46 pm

-
The Big Yin tells a dwarf story.
*
#130 egogoon – Slimesville — Who let a dense, loudmouthed know-it-all m-f’er like you out of your playpen? Go back and amuse yourself some more. You’re a complete waste of time to humanity.

#150 Behavioral Finance — “Only 6 trillion sitting on the sidelines in savings and money market.” — Great time to be loading up on equities and getting a good payback in return.

#194 OkanaganInvestor — “We are royally screwed!” — Sorta goes with #204 An Cat Dubh — “The Bilderbergers are calling the shots anyways.”

Don’t ever forget, we’re just dumb sheeple who don’t notice anything, or see the bigger picture in things. NOT!

#210 a prairie dawg — “But gold is not money, any more than wheat is money.” — Correct. Now we have to make changes in our own lives for the forthcoming one world currency! That’s when the underground economy will surge.

#258 Timing is Everything on 03.14.12 at 5:53 pm

Bartering hockey cards would be a step up. — Garth

Anybody want to trade/barter/exchange a Howie Meeker?
Hey! We can call it ‘Meeker Money’. Could work, Garth…(At least in Parksville.)

http://tinyurl.com/74g36kq

#259 MikeB on 03.14.12 at 5:57 pm

Corporate profits, and the anticipation of more, drive markets. — Garth

Yes thanks for that insightful retort. As others have pointed out, it is ENRON all over again. Move the bad stuff off the balance sheet and you have a strong company. GM is profitable because they screwed all their bond holders, suppliers, shareholders and wiped the slate clean. The banks win both ways… write offs and the spread between what they pay in the bond market to what they lend out.

OK, I’ve had it. Out of here. — Garth

#260 Harlee on 03.14.12 at 5:59 pm

#248 -Garth’s answer/question about currency..
I knew the minute the goldbugs would be buzzing this blog site was when Garth mentioned the “g”-word in his write-up….
They’re worse than Harold Camping and his followers.Really.

#261 Ralph Cramdown on 03.14.12 at 6:01 pm

OK, you got me. I looked up Sprott’s gold “bank.” He actually plans on not lending out anything. So he’s encouraging people who have capital not to lend it out to those who are willing to pay for it.

Does it occur to anyone that, in addition to universal education, public sanitation, vaccination and the rule of law, FRACTIONAL RESERVE BANKING is one of the pillars that society (not OUR society, all societies) is built on?

Christians figured out long ago that usury is good and necessary, Muslims have managed to creatively accomplish the same thing while apparently adhering to their beliefs, people who call themselves “savers” are constantly mooning that interest rates are too low, but wait! Here come the gold bugs, aiming to abolish borrowing from future income, such that those that have the gold now (and their descendants) will be collecting rents from those that don’t, for all time! If that ain’t class warfare, I don’t know what is. If there’s a Purgatory, I hope gold bugs are sentenced to watch It’s a Wonderful Life for a thousand years, and not just the bank run bit, either.

#262 Daniel on 03.14.12 at 6:03 pm

“Our current system will fail too, it’s only a matter of time.” Don’t know about you, but I eat every day, gas up every week and spend money throughout my life. Every purchase is made in dollars. Every amount earned comes the same way. I suspect that is 100% correct for you, too. Vexing about potential currency debasement after you are dead is a fine exercise, but useless. Gold will never be a currency in the lifetime of anyone reading this blog. — Garth

————————–

I think we’ll see a shift from the USD as the reserve currency of the world. I think gold may play a part in a what comes next, regardless…

I know that inflation will continue to eat away at the purchasing power of the USD and that Gold and Silver will hold their value and probably continue to increase their purchasing power.

I purchase everything in RM currently, but I do convert many purchases to the cost of an oz of silver, or gold to see the real value.

Appreciate the blog and your insights, but think you’re wrong on PMs – so, when you speak on them I comment.

#263 eagle eyes on 03.14.12 at 6:11 pm

Real Estate Board of Greater Vancouver has a Multiple Listing Index complete with various charts – similar to Zillow in the states. It’s interesting to see the graph. Check it out.

#264 Canadian Watchdog on 03.14.12 at 6:21 pm

#253 debtified

The use of gold and other currencies is an alternative solution to the Fed devaluing the USD. What do you expect Iran, Russia, Brazil and China to do? Sit back back let America devalue the USD while they’re holding US treasuries? No way.

The problem with those who doubt alternative currencies is that they do not understand third world effects of rising oil/commodity prices that are priced in USD. While the smallest appreciation in USD is hardly felt here, is largely felt in emerging economies who are already running high inflation rates. This makes it very difficult for governments to manage their economies and anchor their currencies to a USD floating exchange rate.

The BRICs have had enough of American monetary policy—that’s why they’re dumping dollars and exchanging/transacting with their own currencies, including gold. If you want to learn more about it, there are many IMF communiqués discussing the importance of gold in the future of monetary reform. Their words, not mine.

#265 Rene on 03.14.12 at 6:36 pm

Happy birthday G-Man. Take a day off.

#266 Ralph Cramdown on 03.14.12 at 6:47 pm

You can put a down payment for a mortgage with gold, link your debt card, borrow against your gold, trade gold and on and on. If there’s demand for it and banks can profit from it, they’ll offer it.

Sure, but when you borrow against your gold, what are you going to borrow? More gold? Nobody needs to borrow gold, except to deliver against a futures contract, and nobody wants to borrow gold to buy labour or materials denominated in dollars, if that gold might be worth x% more or less when it’s time to pay it back. So the borrower has to enter into a gold-dollar forward swap, at a cost of the dollar interest rate plus a premium based on gold-dollar volatility plus profit, to ensure that he’s protected against the fluctuation. He’s borrowed dollars, but at a greater cost. Who lent the dollars? Somebody who’s smart enough not to have all his capital sitting in a vault doing nothing, that’s who!

I’d like to second what Debtified said: Canadian Watchman, you do great work with charts, stats and analysis, other than in the gold department.

The Iranians are taking gold not because they prefer it, but because they just got frozen out of the BIS.

Absent inventory restocking, the U.S. economy barely grew at all. If it weren’t for the U.S. government pumping money into the economy (food stamps, extended unemployment, temporarily stopping foreclosures, et cetera), there’d be what – a big fat negative number.

I heard you the first time, Backwardsevolution. What’s special about inventory restocking and the government safety net? There’s any number of things you could randomly subtract from GDP growth to get a negative number, but so what? If you backed out defence and Medicare/Medicaid, the numbers have been consistently negative for decades! Safety net spending is countercyclical, and that’s a Good Thing. And the reason the PMI is considered a leading indicator is that purchasing managers, in aggregate, know about demand before you and I do.

#267 Canadian Watchdog on 03.14.12 at 6:49 pm

#250 Ralph Cramdown

Correct. Just like your $19.95 trading fees.

#268 TurnerNation on 03.14.12 at 6:53 pm

#164Van guy on 03.14.12 at 11:27 am

Yeah it’s funny, the people living in the supposed “BPOE”, spending so much time on this pathetic weblog! Must be the rain, keeping them inside.

#269 EdmontonJim on 03.14.12 at 6:56 pm

#252 Browns Bottom

Yay! You proved my point by missing it entirely!

This is the difference between currency and comodity.
A currency is a symbol, recognised by a society and/or government that denotes some arbitrary value. That symbol can be printed on paper or plastic, stamped on (any) metal, or encrypted electronically. It doesn’t actually matter what medium it’s on, it’s the symbol that represents an authentic I.O.U. that is good for paying debts.

A commodity on the other hand is a physical object that can be bought, sold, or traded in a market. Both substance and form matter in this case. if you try to cross any border with 20 ounces of gold, it’s not going to matter whether it’s in the form of coins or watches or bunny statues. They are going to ask you whether you intend to sell this commodity.

It’s the same as if you were to try to cross the border with 999,999 pennies and try to claim that it is just petty cash.

You can sell any collectable coin or bill for more than face value – all physical objects can be considered a commodity. Likewise you can barter with it.

But if you try to use it as currency – then for the duration of the transaction the value is equal to exactly the face value – no matter what the commodity value is. A valuable chunk of metal is worth $5 in the same way a small piece of paper or plastic is worth $20. The symbol overrides the substance.

Garth asked how so many people don’t understand currency. It’s because they don’t understand that nations are built on words, not rocks. And that realization would shake their whole worldview.

#270 Friendship7 on 03.14.12 at 6:59 pm

#60
An illogical comparison I did not make. — Garth

Here it is. And I agree with it.
From March 15th (Pay Attention)

“This is a classic sign of a market top – increasing prices on decreasing volume. Whether it’s stocks or houses, you push back from the table when you see this unfold.”F

The reference was to the volume of trade in an equity, not an entire market. — Garth

#271 titosantana on 03.14.12 at 7:05 pm

#254 Debtified:

You are right about not returning to gold standard for a long time if ever. Correct me if I am wrong but didn’t Gaddafi recall his gold from London in the months preceding NATO taking him out? He also had plans for a new Gold based currency from what i heard.

#272 45north on 03.14.12 at 7:17 pm

Ralph Cramdown: What goldbugs don’t understand is that, if the world gets as bad as they think it might, somebody’s just going to take their gold from them anyway

so it gets that bad, you pay your taxes in gold, the City clerk says “right you go, fully paid”. You have just announced that you have gold and your address.

earlymidlifecrisis: I’ve seen the cbsnews clip before. It’s very well done. The Canadian banks have mortgage audit sections – they play the clip to new recruits.

Gary in Kelowna: Another friend was proudly parading his silver bars at a dinner party a couple of weeks ago.

well you could promise to buy them at market value a year from now. Too rich for my blood.

mad vancouver: high quality clip from cbcnews: in Vancouver the above average family cannot afford the average house.

Canayjun: from your clip: Below is a chart of the spread between the volatility skew and the vix compared to the SPX. For those new to skew it simply measures the distribution of option implied volatility. When speculators price in tail events they buy out of the money options which “skews” or shifts the distribution of volatility from a normal bell curve.

whatever

amazed: More and more people are stretching themselves thin… Cutting back on all potential expenses.. Lots of change coming.

I got that.

ozy: good link. I’m not sure the banks are going to be hit that hard. I mean they get to follow the housing market to the absolute top, writing mortgages all the way, the way its written, everybody else takes the hit before they do. Heads you lose, tails they win.

Debtfree: I guess no one else here realizes the implications of the new wood lot rules in B.C.

I surely do not. Why don’t you tell us?

backwardsevolution: I follow U.S. economics closely, and the people I follow are ALL saying that we are in for a world of PAIN.

send me an e-mail backwards – actually send it to me frontwards:

[email protected]

#273 Lookinin on 03.14.12 at 7:19 pm

Garth, thanks for all the additional comments in today’s post, even addressing some of the loonier posters. I only read comments to which you’ve responded (CTRL + F = garth) and it’s amazing how dug-in some people are with their views even when they’re blatantly wrong. Thanks again for creating and maintaining this website – it’s about the only site where the great unwashed (myself included) can get a more “worldly” view of things. Cheers!

#274 R on 03.14.12 at 7:23 pm

Garth, I’m serious. Lindsey Williams and Gerald Celente have both made bold predictions on why and where we’re headed when you go back and look at the things they’ve been saying. When I first heard about them I was very skeptical but as time went on and watching things going on in the MSM, what they talked about only months before was slowly starting to evolve.

Perhaps (and I hope this is fair to say) as an economist it would be hard for you to understand these things which is only natural because you study one area. Sometimes (I think) you need to look at a variety of other professional views in order to see the big picture or to fit the pieces of the puzzle together.

In all honesty, I really hope what they’ve been saying is all wrong. Somehow, I am having a hard time debunking this especially after seeing what is going on right in front of us.

Please, humor me, look these people up and see what they have to say then think for yourself.

“In all honesty, I really hope what they’ve been saying is all wrong.” Then this is your lucky day. — Garth

#275 jess on 03.14.12 at 7:25 pm

In F-35 reversal

Mr. Smith’s culture description

Defence fraud Creative billing
Engineer spent workdays at movies, bars, and Air Force paid for it
Pentagon contractor settles ghost worker’s fraud for $2.5M
Pentagon Paid $999798 to Ship Two 19-Cent Washers to Texas
October 20, 2011

WASHINGTON, Oct. 20 2011
– Hundreds of defense contractors that defrauded the U.S. military received more than $1.1 trillion in Pentagon contracts during the past decade, according to a Department of Defense report prepared for Sen. Bernie Sanders.

Sanders (I-Vt.) called the report “shocking.” He said aggressive steps must be taken to ensure taxpayer dollars aren’t wasted

Fraudulent Defense Contractors Paid $1 Trillion
http://www.sanders.senate.gov/imo/media/doc/102011%20-%20DOD%20Fraud%20Report.pdf
http://www.truth-out.org/us-military-paid-11-trillion-contractors-defrauded-government/1319140017

#276 THE TITANIC on 03.14.12 at 7:27 pm

So I have a buddy that works for a Hedge Fund Co. in NYC…their favorite game to play on-line is Crack Shack or Vancouver Mansion? They NYC hedge fund guys are short Vancouver. Thought it was funny but also interesting…we are on the Radar

#277 maxx on 03.14.12 at 7:29 pm

#56 FTP – First Time Poster on 03.13.12 at 11:40 pm

Agree. 100%.

#278 TaxHaven on 03.14.12 at 7:31 pm

Although he maintains that asset price deflation is underway, I don’t think Garth realises the importance of, or sees any need for, attempts to preserve purchasing power in the face of ongoing wealth destruction.

Except, perplexedly, in real estate!

Wealth ‘destruction’ is not most people’s problem. Get a life. — Garth

#279 not 1st on 03.14.12 at 7:40 pm

Well Jim Rogers who is one of the most successful investors of all time buys gold and silver regularly and is now a strong buyer at these prices he says.

So Garth, are you going actually call Jim Rogers a metal head, whackjob?

Gold is not money or currency, its insurance. Just like our mortgages, deposits, homes, cars, lives are all insured. Insurance has no ROI, its not supposed to. Its the fail safe when the black swan comes around to see you and it always does.

#280 Nostradamus Le Mad Vlad on 03.14.12 at 7:46 pm

-
Gas Prices going up. What is oil doing? Gold and Silver latest; JPM’s ugly family secrets; The Great Tomato Bubble Somehow, it involves economics; Singapore New Asian bullion hub? Banking Principles in the new world; GS Toxic bank? Brit. Gilts Last a century then die;
Eurozone Like good sheeple, they follow each other over a cliff; Free Banking doesn’t work; 168 quid (pounds) a second for power companies;
*
Putin If ever there was a reason for him to make a comeback, this is it; A Menace to Catholic Plutocracy The chickens have come home to roost and crow; Kony Psy-Ops already collapsing; Chemically Induced Infertility poses a greater threat than super -‘canoes; Egypt “I wonder where Israel will get their gas from now?” wrh.com, and here, and 3:19 clip Egypt joining Russian alliance? Kyrgyzstan “It’s obvious, looking at the history of US military interventions in the region, that Kyrgyzstani President Atambayev wants absolutely no part what is coming here in the not too distant future.” wrh.com; Mercury A problem in cosmetics, but not in dental work? Summer in UK will be interesting, esp. if riots resurface; Orlando Airport stops using TSA; 2:17 clip Swallowing a cup of cinnamon whole can lead to unintended consequences; DNA Extradition Don’t give up your DNA! Lobbyists Great reason to dump ‘em.

#281 Smoking Man on 03.14.12 at 7:47 pm

Govt Bonds are selling off going to corp Bonds, after a while they will shoot over from corp to equitys.

Watch little grass hoppers watch

We are on the cusp of a new big rally.

O Yeah I called it a month ago on this pathetic blog

Batman never lies

#282 Iceberg on 03.14.12 at 7:54 pm

Please excuse if this has been already posted …

http://wsws.org/articles/2011/jan2011/chin-j31.shtml

You read the World Socialist Web Site? You left the back door to this blog open? — Garth

#283 The American on 03.14.12 at 7:56 pm

Housing purchases are up (way up in many depressed markets) across the U.S. for the past three consecutive months. It is expected the next release of figures will demonstrate greater strength in the housing sector. Prices are effectively flatlining across the U.S. right now, meaning the bottom has been reach in many markets, or is very close to bottom in many. Additionally, many markets are actually showing signs again of APPRECIATION, 7 major markets in FlORIDA. Arizona is also showing a resurgence of bidding wars (albeit small) in a market that was clearly over-corrected. The housing market is great indicator to a strengthening U.S. economy. Retail sector us up again, and many commercial spaces that were once vacant are again finding new life. There is no disputing it. Consumer confidence is rising, although slowly, but it is rising.

I do remember a fellow blogger telling those to “Buy American” a little over a year ago, specifically Florida was his example. Oh yes, that was Garth that made that recommendation, and I recall many people laughing at his prediction. Well, here is the bottom line… when anything is overpriced, it will revert to the mean. When anything is underpriced, it will revert to the mean. Those who understand this are starting to reap the reward of “buy-low-sell-high.”

Basically, for areas like Florida, you can expect a mean price to be around $120/square foot. In Arizona, expect around $100-$110/square foot as a mean. When prices are sitting at $30/square foot, it doesn’t take a rocket scientist to understand prices are too LOW. I don’t care how you want to debate it, low is low is low. It is insanity NOT to buy if you can afford it as values are greatly compressed and 30-year rates are at all-time lows. You make your money when you buy… not when you sell.

#284 smartalox on 03.14.12 at 8:06 pm

Can any of the ‘metalheads’ actually describe the experience of paying for something with gold? (or silver, or copper, platinum or palladium?)

if you go to the store with a 1oz gold coin, and buy a pack of gum, are you stuck with $1600 in fiat currency as ‘change’?

Do you just shave off a piece of your coin, and give 1/800th of an ounce to the merchant as payment?

Do you plunk down the whole thing, and start a tab, deducting the cost of goods you’ll buy from that merchant at some undisclosed time in the future?

Do you only shop in 1oz increments? Hoarding supplies in your bunkers back home? One oz worth of chili, one oz worth of flour, etc.

Please post actual stories of payments rendered only. No theoretical models please, it will only prolong an unproductive debate.

#285 Solitario on 03.14.12 at 8:08 pm

Funny…I’ve heard at least two of Garth’s former (conservative) colleagues calling him a “certifiable whackjob…and I’ve voted for him for that reason…I thought – wrongly as it turned out – he might be our Ron Paul…

#286 Canadian Watchdog on 03.14.12 at 8:15 pm

#261 Ralph Cramdown

“Sure, but when you borrow against your gold, what are you going to borrow?”

You’re confusing simple consumer gold loans with OTC gold derivatives.

Gold loans in India involve a customer pledging his or her gold in exchange for a loan based in INR (rupees). When the loan is paid back the customer receives their gold back, simple. This is highly beneficial to the customer if gold denominated in USD keeps rising while their loan based in INR is fixed with a low interest rate. Of course, gold can always go down but if you understand Indian culture, they don’t care.

Watch 60 minutes preview on India’s love affair with gold http://www.cbsnews.com/video/watch/?id=7398482n

“He’s borrowed dollars, but at a greater cost. Who lent the dollars?”

OTC gold derivatives is completely different animal that involves contracts based on forward swaps, GOFO, LIBOR and lease rates. The lease rate is determined by calculating LIBOR minus GOFO which at the current time is negative, meaning, lending dollars (or shorting) comes at loss. Who’s lending dollars to bullion banks at a loss? Who else, central banks.

Did we just land in India, or are you irrelevant? — Garth

#287 R on 03.14.12 at 8:32 pm

“In all honesty, I hope what they’re saying is all wrong” Today is your lucky day – Garth

I hope your right Garth, but I suppose only time will tell. It just seems the more I’ve researched this (and these guys do have credible information and ties to powerful people to back what they’re saying) history is only repeating itself as it did in the Great Depression.

#288 Canadian Watchdog on 03.14.12 at 8:39 pm

Did we just land in India, or are you irrelevant? — Garth

What part don’t you get Garth? 1.2 billion in India, 1.2 billion in China with rising incomes all obsessed with gold means THEY CONTROL DEMAND, not America.

http://i44.tinypic.com/f3rfoy.png

So it’s the latter. — Garth

#289 blobby on 03.14.12 at 8:47 pm

>How can so many people have no idea what currency is?

I blame a certain right wing news station which broadcasts south of the border, and where one of the more popular shows it broadcasts (which is constantly pumping this idea of gold as currency) just so happens to be sponsored by a “cash for gold” company.

.. Mind you with so many people lacking such a fundamental understanding of a concept which is quite simple – is it no wonder that gold prices bubbled up?

#290 The Thing in the Basement on 03.14.12 at 8:55 pm

230 Debtfree. I understand the woodlot rule change allows the removal of private land from the woodlot. Correct me if I’m wrong, but a woodlot comprises both crown and private land, or just crown land. A licence is for max 20 years. There are less than 1000 woodlots in BC (I thought there would be many more). To top it all off, a bureacrat has to approve the removal. I am not seeing a great impact here.

#291 The Thing in the Basement on 03.14.12 at 8:58 pm

Sorry, forgot the link

http://www.newsroom.gov.bc.ca/2012/03/policy-change-opens-up-options-for-woodlot-licensees.html

#292 eaglebay - Parksville on 03.14.12 at 9:29 pm

#230 Debtfree (with no life) on 03.14.12 at 3:58 pm
“Albertans trapped on vanisle tail gating each other up and down the island highways in off road trucks . Thanks for the laugh eagle bay . Just think you’ll be able to go boating in comfort in three more months .”
_______________
I boat and fish year round.
The amenities, including heating and air conditioning, on my ship outmatch the facilities in your house.
Most people in Oceanside have the money to live well and a reduction in the value of their homes is meaningless.
Oceanside has more BMWs and Mercedes per capita than anywhere else in the country.

#293 Daisy Mae on 03.14.12 at 9:32 pm

Well, it’s been a hard day, Garth. But you held your own, as usual.

Go have a nice candle lit dinner with Dorothy and celebrate your birthday.

#294 TurnerNation on 03.14.12 at 10:30 pm

#177Ralph Cramdown on 03.14.12 at 12:17 pm

Was not me! Maybe it was legendary investor
Warren Buffoon’s print.

#295 TurnerNation on 03.14.12 at 10:31 pm

300 comments! eaglesbay and the metalheads run amok.

#296 bill on 03.14.12 at 10:36 pm

Happy Birthday Garth

man the ‘bugs are biting like fox hounds today..

#297 John G. Young on 03.14.12 at 10:39 pm

#291 eaglebay – Parksville

“Oceanside has more BMWs and Mercedes per capita than anywhere else in the country.”

BFD.

Bidirectional Forwarding Detection? Binary File Descriptor? — Garth

#298 OkanaganInvestor on 03.14.12 at 11:01 pm

#232 bill on 03.14.12 at 4:01 pm
okanagan
I think you are lying ok ? my opinion.you have yours.
I read the web site .its the usual drivel from an anti – semite.

I am not lying, but maybe I’m naive.
I quoted from the Veterans Today website. Are you saying that the men and women who put their lives on the line to protect their country are anti-semetic?

#299 eaglebay - Parksville on 03.14.12 at 11:14 pm

Cool and last.

#300 Snowboid on 03.14.12 at 11:55 pm

#282 The American on 03.14.12 at 7:56 pm…

Well said, we paid about a bit over $ 89 a sq foot for our winter home in the NW valley of Phoenix in December 2010, and latest comparable sales around us are showing closer to $ 100 a sq ft.

Now if we could just figure out how to deal with the local wily coyotes!

#301 bill on 03.15.12 at 10:26 am

”Are you saying that the men and women who put their lives on the line to protect their country are anti-semetic?”
no but you just did…

way to weasel there okanogan or you are in fact naive .
which is it?
that website promotes an anti Israel stance.
why dont you wrap yourself in a canadian flag there.
israel is doing the good work just like our armed forces.

I still think you are a liar and I will continue to point that out.

#302 jess on 03.15.12 at 12:30 pm

anyone red this:

http://en.wikipedia.org/wiki/Innovation_saturation

Applied to Home-ownership Rates

The home-ownership rate is defined as the percentage ratio of owner-occupied dwelling units to total occupied dwelling units in a particular area.

DECADE RATE
1960s 63.7%
1970s 64.6%
1980s 64.4%
1990s 64.9%
2000s 68.1%

Notice that the home-ownership rate was essentially unchanged for four decades – from the 1960s through the 1990s – at around 64 percent. But in the early 2000s, home-ownership rates experienced an unusually high spike of five percentage points at its peak – an event previously unseen in the prior four decades. Driven by the desire to increase home-ownership in the U.S., the U.S. government required mortgage lenders to sell to poorer and poorer consumers, in order to artificially increase the universe of potential homeowners while lenders turned a blind eye to the wholesale slippage in lending standards. The hard lesson learned here: the artificial inflation of a universe of customers beyond natural levels usually results in a return to natural levels after a costly, wasteful and distracting pursuit.”

#303 disciple on 03.15.12 at 2:10 pm

Happy Birthday! (If it’s your birthday)…

#304 bill on 03.15.12 at 3:13 pm

okanagan investor

this is a website that actually helps veterans as opposed to your thinly disguised ‘political comment’ site
the difference is easily discernable…

http://www.veterans.gc.ca/eng