The inflators

hyperinflation1

So, the people who run the world have committed another trillion dollars to get out of the mess which happened on their watch. The taxpayers of little Canada, for example, are now on the hook for $10 billion for a new global fund. Of course, nobody asked.

But this is not about the G20, Mrs. Obama’s grip on royalty or Stephen Harper’s Flomax moment when it was picture time. Nah, bigger stuff.

PD*27934962 Many people believe current events will lead almost immediately to some kind of world-sweeping inflation akin to that in Zimbabwe of today or Germany between the wars. In this situation, all the rules would change.

This letter, from a guy named Michael, pretty much puts the case:

Hello… I just finished reading your book “After the Crash” and have admired both your bravado and acumen over the years.  I have a question for you regarding the economy.  If you have the time, please watch the following video on YouTube “Peter Schiff: They’re gonna change this into an inflationary depression!” (10:56 min).  My question is the result of being confused after watching this video, and yet also agreeing with you on the one key word you mention in your book to remember (deflation). I would therefore love your opinion.

With the G20 pumping 20 trillion into the worldwide economy today after individual governments have already printed money…. when do you see deflation bottoming out and inflation rising?  I haven’t been able to find anyone who is willing to address timing.

Why am I concerned?  I have always been a saver… and knew there was something wrong with the market when I returned to Canada from a job in Europe to buy a home (and my Toronto residence I originally sold in 2003 at $540K was now $1.1M in 2007).  I’ve been fortunate so far- 80% of my portfolio is sitting in cash/GICs with one bank- CIBC (and thanks for scaring the bejesus out of me).  However, after watching Schiff’s video, he says the US dollar value (and therefore Cdn $) will be worthless as it buys less with the eventual super-inflation.   I’m concerned that the coming inflation would eliminate the value of the money I’ve saved.  You mention “cash is king” with deflation.  What is a responsible guy to do in this scenario?  Would you still advocate gold?  What timing and why (in light of my question on timing of deflation vs inflation)?

Good comments. And I like Peter Schiff, who had the vision to see far and the stones to say so. He nailed the US housing bubble and continues to be a voice of reason. Except on this.

I have found the people who trumpet, promote, warn against or just covet an orgy of inflation fall into three groups.

(a) Gold nuts. With their garages turned into mini Fort Knox-type installations, their backyards riddled with suspicious holes and their pants at half-mast from heavy pockets, these bullion-loving apocalyptics say repeatedly that paper money will be rendered worthless by the new trillions being created to counter the almost-depression. They warn all other forms of wealth will be wiped away, financial markets reduced to dust and no purchases possible without first having a Maple Leaf or an Eagle coin. They are myopic, self-centred, and greedy enough to wish for the collapse of the monetary system which sustains most of the planet’s people. This is why they will lead such tormented lives going forward.

(b) Realtors and other housing junkies. Ever denying that deflation exists, believing the crash in housing prices is just a bad dream and convinced that ‘Flip This House’ was edgy and intensely spiritual, these guys pray for inflation that will again send housing prices endlessly spiraling. They believe in credit, think equities are for insane gamblers and that financial diversification is owning four condos instead of two.

(c) The indebted. Finally, we have those who may have staggered into a 0/40 mortgage because they were stoned at the time, who put 90% of their net worth into a house they couldn’t afford, who are so far underwater right now they have reefs in their rec rooms or were simply the greater fools we all dreamed would be stupid enough to enlist for a bidding war. These folks know that just as deflation is their death, so inflation is their salvation – diluting the value of money while raising the worth of assets until, without working or accomplishing anything, they benefit. Of course, this kind of thinking got us into this mess. Man, I miss disco, too.

Well, I may be wrong, but I’m betting on deflation stalkng the land for some time yet. As the economy stabilizes and expands a little, so will prices. Modest inflation will be with us in a year or two, resulting in higher interest rates. Prime now in the 2% range will likely double in two or three years, then double again two or three years after that. Thus, a prime of 8% by 2015, giving us longer-term fixed rate mortgages around 10%.

There is no way the US is going to allow a devaluation of its currency, since that would spell the end of global bondholders willing to buy its debt. It’s also not going to allow its financial problems to be exported through hyper-inflation and a crashing dollar, because that would trigger a trade war it could not win. And we are unquestionably entering a new era of global financial oversight and regulation which has not existed before, since it’s now obvious to everyone what happens when national regulators fail.

Moderately increasing inflation and higher interest rates are a certainty. But not soon. And not abruptly. And not extreme. However, it will be bad enough that people renewing mortgages five years from now will feel the sting, and another reason there simply is no debt relief or real estate renaissance in our immediate future. And I haven’t even mentioned the twin anchors of rising energy prices and an aging population.

As for the bullion bunnies, they’ll soon start hoping for nuclear winter.

136 comments ↓

#1 dd on 04.02.09 at 10:40 pm

“And I haven’t even mentioned the twin anchors of rising energy prices and an aging population.”

High energy prices worry me the most. And I work in the energy sector in Calgary. Business needs predictable long term pricing … and they will not get it going forward.

Aging population in Canada … is there anyway that the goverment / voter can be a lot more proactive in this area? We could be opening up the doors for a lot more people to move from this country (young people that want to have kids). Why is the government not addressing this issue!

#2 john on 04.02.09 at 10:41 pm

Garth,

Look again in your crystal ball and see if it is less foggy??

TSX – October 2008 – 10,000
TSX – Today – 9,100
TSX – December 2009 –
TSX – December 2010 –

#3 Al on 04.02.09 at 10:42 pm

The simple reason deflation is in the cards for some time to come is that more money is being destroyed than is being created. Additionally, to have inflation, you’d have to have an expansion of credit, which clearly is not happening at this time. Cash is king for the time being. Gold will trace its way back to the 600’s. I was reading the local paper yesterday, and already being net short gold and silver, after seeing a full page advert touting some gold scheme, I immediately went downstairs to my trading room and added to my position. I’d be buying US dollars right now if anything. Just my .02 of course.

#4 North Vancouver Citizen's Analyst on 04.02.09 at 10:43 pm

Garth, if I had a million dollars I’d buy you a monkey.

But not right now because monkeys are falling in value and I’m no fool.

Thank god the G20 meeting solved everything – now I can enjoy springtime in Vancouver, the next gangster/homeless/junkie capital of the world.

#5 Jimster on 04.02.09 at 10:57 pm

The only thing that seems for sure now is that the elites will get their New World Order, the main casualties being capitalism and the will of the people.

My feeling is that we are headed for a new type of stagflation, where the cost of day to day needs like food, energy, healthcare will cost more and things like real estate and equities will fall due to oversupply and higher interest rates. Is there a word for that yet?

Garth, a question; after all the Trillions the USA has spent on war, security and bailouts how could they possibly defend their dollar, war?

#6 Observer on 04.02.09 at 11:07 pm

Peter Grindich is predicting that the CDN $ will be at par with the US in 12-16 months. Curious on your thoughts on this.

#7 smwhite on 04.02.09 at 11:19 pm

#1 dd

Your 100% right, its a detriment to the customer to have this much instability.

One thing is guaranteed,

Taxes. Death.

Every Canadian with equity sitting in money market funds(of all things) instead of GIA/GICs, should be considering investing in cash flow rich, forward thinking, Canadian energy companies. Make the switch in the next year.

Real estate prices may have hit a plateau for the next decade, energy hasn’t.

After all, a house is only shelter.

#8 max on 04.02.09 at 11:20 pm

Garth

1. were the canadian subprimes (0/40 arms) ever sliced & diced & sold to investors. if they were not, then these would just be writedowns for the banks and life would just go on.

2. werent the canadian subprimes only in existence for a year & half tops. unlike the US where it was for at least 5-7 years en masse and were sold to investors.

3. even in the US, only the wealthy & the lower middle class are the 2 groups affected most. the upper middle class and the rich (not the wealthy) are not that affected as they still have jobs in solid companies like J&J, P&G, Franklin-Templeton, EDS etc. i know many of these guys. The same is true of canada. but i dont know of any working people here but suspect there are.

4. Most of the gta and mississauga has a big upper middle class and they still have their jobs or savings. so the effect will be mitigated in these areas.

5. just like public pressure reversed the bonuses, wont that happen here with the harmonization.

my prediction is that the gta will not be like windsor now RE wise.

#9 Da HK Kid on 04.02.09 at 11:28 pm

I like Schiff as he did in fact have the nuts to call the housing but from what I’ve heard has lost his gold bugs tons of money being too early. His Asian investments may work.

Yes he called the housing bubble, yes the air is still coming out and how far back is still unknown. 2003 now, maybe 2001!

If you want to really play your cards right on an analyst try Gary Shilling who support the USD and another 15-20% more deflation in housing sector. He is the only BEAR in the clearing along with Jim Lecamp RBC Wealth and Joe Batipaglia – Stifel Nicolaus.

Anyone who reads my posts know I am in support with Garth on the deflation model and that until a bottom of housing is found, deflation will be with us likely another 18-24 months AND recovery will not in the slightest be HYPER.

Snail pace re-inflation on deck is a must as people, NOT ON THE SIDELINES LIKE US, but people who are screwed in housing and/or unemployed need to re-enter the market.

Take all the boomers who are wounded and ask them if they will jump back into anything being triple shy as they face the new reality of going back to work or living out their days in a simple, quite honestly refreshing manor!

For me, I just sold about 75% of my AUD over the last few days as I picked it up at 0.62 sold for 0.71 back into the USD. I have sold my Gold at peak and watching it come back, my call is $750-$800 retracement min.

I believe that we are in a clearing right now with stage three denial baby boomer investors trying to make back anything they lost via deflation.

Unfortunately, it will not last and we will re-enter the forest again shortly in the BEAR MARKET RALLY!!! Not BULL!!!

Furthermore, I am full agreement that the dollar will be protected worst case on the index back to around $0.80. I am back into a slightly weaker dollar today so I can post gains on it in the next stage down on flight to safety AGAIN. GOLD is now moving with the dollar somewhat.

If I short any stocks it will be the financials as when the Geitner plan to deal with the banks gets started and with a mark to market plan which will give move value to the assets of these banks come true, it may be the only stocks to rebound next phase.

The new administration is only for the support of the Global Elite including the Wall Street vets so stay tuned.

I have no CAD in my portfolio! If I did I would have sold it like the AUD for USD over the last few days.

Good news for commodity currencies is rare in a deflationary period and only support when the stock markets BEAR market rally.

My 0.02 cents USD!

#10 North Vancouver Citizen Jr. on 04.02.09 at 11:40 pm

#4 NVCA

ROTFLMAO

#11 Da HK Kid on 04.02.09 at 11:49 pm

Watch Gary Shilling hold is own against the BULLS and see how Kudlow tries to twist his position along with the other jokers!

http://www.cnbc.com/id/15840232?video=1080280172&play=1

part 2

http://www.cnbc.com/id/15840232?video=1080280172&play=1

#12 R.Moer on 04.03.09 at 12:02 am

Wrong my man Garth. You assume the potent director’s theory, that those in command can land the crippled jet-of-state can safely be managed down into a controlled hard landing (i.e. organized crash).

It only works if you maintain a closed economic system al a ‘Mussolini fachista’ style control of the economy..which may well yet occur… but until then the US dollar (being a debtor currency) will plead with the creditor/savings endowed Asians to bail it out.. mostly from the Wall Marx Chinese.. who in themsleves are smart scoliaista-capsitalia’s of the the finest order. (Sam Walmart was prospectiveally a pedigreed 1/100th Chinese smart bastard afterall (At least that’s the Bejing rumors of late).

Once the rest of the revenue deprived world figures out that Uncle Sam is really the global beggar, rather than the pugnatious Popeye of yore – he is the “Whimpy …of “I’ll gladly pay you next Teusday.”

The credit illusion is over, kaput, dodo, as one more fiat paper system bits the dust. Move over Robert, the Thug Mugabe, you got company.

Obama is kiting treasury checks right now printing money backed by old faded glory-memories and nothing else.

We suffering tax slaves will have for a period of time both deflation and stagflation, until the savers of the world run for the exits by grabbing anything of remnant value that is fungible. It may be cigarrettes, tampons or matches. Basically anything that is is deemed currency in the new desperado economy. Think any contemory penal system where consumables beome treasured luxeries and these have some negotiable, tradeable value.

Take you pick on new currency me buckos.

Fasten your mental seat belts

It gonna be a rough, wild, ugly ride down.

#13 Clueless In Saskatoon on 04.03.09 at 12:32 am

Hi Garth, I have been following this blog for a while now and I still cant seem to figure this out.

Do I buy a condo in Saskatoon rather than renting while interest rates are low. I can lock in @ 5.5 on a 10 year mortgage with a 10 000 downpayment. The condo I’m looking at is 124900. I understand interest rates are lower and you say go variable, however I’m paying this mortgage in full during the 10 years. Do house prices go down here? The premier is out in Ontario doing job fairs, surely these people will buy, will that drive prices up? As insane as that seems.

I have no idea how to read this brave new economy and I’m feeling some savings in the bank might be better than owning a home.

#14 Vancouver_Renter on 04.03.09 at 12:37 am

#3… “Gold will trace its way back to the 600’s.”

You may be right. Whether gold falls to $400/oz or rises to $2000/oz, what matters is the REAL price of gold measured other asset classes. So far, gold has risen strongly against practically everything else, including energy, commodities, stocks, bonds, and real-estate. That’s what happens, historically, in great deflationary contractions.

That’s why gold miners do well. Their costs (energy, capital equipment, labor) fall while their product (gold) holds up in price and is liquid relative to everything else. An ounce of gold, produced by a gold miner, is not going to sit in a car lot hoping for a buyer to come along. If they can produce the gold, the buyers are there.

What you guys are missing is that the central banks and governments aren’t just pumping money into the financial system – they are also pumping the lie of hyper-inflationary fears. They don’t want everyone to know that deflation is likely. They want everyone to fear cash because “Watch out! Cash will be inflated away any minute now. Go spend it instead! Buy buy buy! Please, we’re begging you, BUY STUFF before your cash is worthless!” That lie sold to the masses will be one reason gold remains strong versus other asset classes.

Another reason is that, in a deflationary contraction, counter-party risk is a major concern. If you hold a corporate bond, are you confident that the company will be able to meet its obligations to you? An ounce of gold in your hand has no counter-party risk. Gold behaves more and more like money and less and less like a commodity.

Study your history. We’ve been through this deflationary contraction 5 times in the last three centuries. The central banks and governments stimulated and pumped just like today. And just like today, there was fear of peak commodities. For example, at the peak of the bubble of 1873, the Economist Magazine notes that the everyone assumed that world’s copper supply had peaked and that prices would rise without limit. Didn’t happen… Instead a 12 year Great Depression set in.

The outcomes of these post credit bubble contractions has always been the same… a deflationary spiral lasting a generation. I’m betting on what DID happen in the past rather than your guess on what LOGICALLY SHOULD happen. There are, of course, no guarantees but history is on my side.

The extra trillion dollars thrown into the pile today might be the catalyst for a stock market rally for a few months, but later this year watch out. It will be Act II of the Great Deflationary Spiral.

#15 Grumpydawgs on 04.03.09 at 12:39 am

Garth , this comment relates to how the easy riches the property owning ” inflato bucks) generation made thier money in the ’70’s.

” without working or accomplishing anything, they benefit. Of course”

We saw this again in the new century. But as we have seen these profits are illusory ‘trading profits’ unless you followed Adam Smiths advice and moved away to somewhere which was still trading at a discount.

They had property appreciation without asking and a 10% raise every year whether they liked it or not. Inflation was pretty sweet to these folks.

I really wish that everyone would stop referring to the ongoing downside adjustment to the bubble price real estate market as ‘deflation’, it’s not. The term is being used as a boogie man because the press thinks it’s gotten through to the psyche of the consumer and it can be used to herd them away from the truth.

Deflation refers to an overall slide in CPI, not real estate specifically. In fact we have no deflation in Canada and as anyone who has gone to the grocery store or gas station recently knows we have a fairly strong element of inflation. The term is a red herring.

Falling real estate prices are not deflationary because the cost of real estate was artificial not static and a choice not a comsumer neccesity. Real Estate prices went into a parabolic price inflation and now that price action is in a natural reversion to the mean ( as your previous chart shows) towards it’s long term support levels. A bubble price is not representative of ‘value’, therefore no deflation , just normalization.

Garth, I believe that you too are gambling on the sincerity and responsibilty of the governments motivations. You may be right concerning us commodity bugs, but the price action over the past seven years must also concern you. If this is not demand inflation then what is it.

The Arabs and the Chinese will not ( are not ) fooled by the squeaky machinations of the US Dollar and will not take fourty cents for a dollar of debt unless they’re getting something in return. That may be a steath debasement of our currencies so that these cash bloated powers can buy our resources cheap and that will screw us all.

#16 Basil Fawlty on 04.03.09 at 12:45 am

Sorry Garth, but I don’t fall into any of your inflationista categories. All I know is that “diversification reduces risk” and the reason is that no one knows the future, so we hedge our bets.

#17 Jack the Lad on 04.03.09 at 12:56 am

What do people think about the current market?

A bear market rally or the beginning of a new bull market?

Will we be retesting the lows we experienced not too long ago?

#18 Brent on 04.03.09 at 1:04 am

OCT 1929, the DOW was at 388. Seven months later, it was at 186. Five months after that it retraced to 290.

Then from late 1930 to mid 1932, the DOW went from 290 to 41. Yes, you heard it right! That was a 89% drop from 388 to 41!

Even more spectacular, it stayed under 100 for the next 4 years!!!!

It wasnt until 1955 that the DOW got back to 388! It took 25 years to gain back what it lost!!!

#19 timbo on 04.03.09 at 1:06 am

#4 NVCA

thinking about coming out there so thank you for the heads up on the scenic attractions.I will come out after I take care of my uuumm investments.

1) finished armour plating my hummer.(BC sounds scary)
2) loading my gold in the U-haul trailer. (gold only goes up in value),taking out a heloc to the max.
3) mount a snorkel to my 0/40 year little treasure. It was so good at treading water but after putting on a couple of pounds,, well you know.

someone should put a parity of a 0/40 year shaw cable commerical . mean mean mortgage…. lol

#20 Lance on 04.03.09 at 1:08 am

I’m a firm believer that inflation is coming, though I do not fall in to one of Garth’s 3 categories. I’ve put a good chunk of money in to oil, as it will benefit both from a coming energy crunch and inflation combined. We may look back in 5 years at $145 oil and wish it was that cheap again.

There are cracks showing with the treasury auctions in the US and the UK. In an effort to keep treasury yields low (and thus translate in to cheap borrowing in all tiers above that), their central banks will be purchasing more and more treasuries as signs of inflation begin to rear themselves across the economy. Who will buy a 10 year t-bill yielding 2.75% when inflation is running at 4+%? And then the central banks will have to monetize all of its debt because no one else will buy it. And then watch the US currency (and others) lose a lot of value.

And so it will go. Jobs will continue to be lost, real estate in Canada will continue to crash, central banks will print money and devalue their currencies to halt declines in nominal asset prices. This will not mean the end of real prices dropping, but inflation will arrest the drop in nominal terms and make us all feel happy even though the value of every dollar in our pocket is depreciating.

The economy has wild and weird ways of falling back in to an equilibrium and the more we attempt to tamper with it, the more unexpected its manifestations become. All of this money printing/debt accumulation combined with a global oil shortage may be setting us up for one doozy of an economic collapse in 3-5 years.

#21 ralph on 04.03.09 at 1:12 am

Also, I think governments will try to keep inflation from happening is the real possibility of civil unrest getting out of control. Maybe, a revolution. It has happened before. History has a nasty habit of repeating.

Although us Canadians would be the exception since only about half couldn’t even be bothered to vote.

#22 Sondra on 04.03.09 at 1:14 am

The effects of the new global fund will not help out the average Canadian. This fund will create yet another level of government that we can not vote for.

I wonder if they are going to have the same “transparency” that government often tells us that they are going to have.

Now, where are my blinders,… I know my MP gave out free samples.

#23 canuck99 on 04.03.09 at 1:42 am

FP: Carney warns of too much stimuli

“Mark Carney, the Bank of Canada governor, warned governments Wednesday about the urge to pump more stimuli into the economy to combat the deepening recession — a sign, analysts say, that he’s worried about the emergence of runaway inflation.

His comments … stand in contrast to remarks by Stephen Harper, the Prime Minister, who has indicated in a series of recent interviews with foreign media that policymakers must do ‘everything necessary’ to pull the global economy out of the worst crisis in the post-war period. ”

http://www.canada.com/business/fp/Carney+sees+record+drop+Canada/1452516/story.html

#24 rick in Surrey on 04.03.09 at 2:22 am

Hi Garth,
I have followed this site for about a year now and have agreed with many things you stated. I also know you are the antithesis of a “gold bunny”. However, I must say I am offended by the way you make people sound that have chosen to invest in gold. To state “They are myopic, self-centred, and greedy enough to wish for the collapse of the monetary system which sustains most of the planet’s people. This is why they will lead such tormented lives going forward.” That is a pretty big brush you are painting everyone with my friend. Frankly, I have a fairly diverse portfolio but do believe gold will increase in value due to the coming inflationary environment. Do I want to see gold be $6,000 or $60,000 an ounce? Hell no! The cost of living would be horrid. Do I think gold will go to $2,000 an ounce? Yes. Maybe not in 2009, but I think some point in 2010 it will. I think $1,200 to $1,500 this year is very likely. Too large of a crisis to be solved in the next 6-12 months and the constant spending and monetization of debt by governments will drive the event on further.

It has been proven through history that when governments over print money, etc that inflation (even Hyper-Inflation) replaces deflation. The leaders of the G20 today just tossed more money(over $1Trilliion) into the fire to “correct ” the financial crisis. The U.S. has been creating money(both physical and digital) like Purex does bathroom tissues. With all this going on, you still don’t think there will be high inflation? Just like Newton’s Law in physics, “For every action there is an equal and opposite reaction.” Strangely enough, it applies to finances too! I challenge you to tell me what FIAT currency has ever lasted? They have all eventually failed over time and get replaced by a new form of FIAT currency. This can be traced back to the beginning of recorded time. So, thinking the U.S. Dollar to be bullet proof and able to survive this crisis intact is wrong. It can and will fail. Not out of my wishes or the “gold bunnies” wishes, rather from the Global Communities wishes and the U.S. excessive spending sprees and absurd debt load!

With respects to your other comment of “There is no way the US is going to allow a devaluation of its currency, since that would spell the end of global bondholders willing to buy its debt.” Have you been watching the news lately? China isn’t buying U.S. Treasuries any more, the US FED had to buy their own treasuries a couple weeks ago. China and Russia have also been leading the charge to the IMF about going back to a Gold Standard and not having the U.S. Dollar as the Reserve Currency. The ball is already in motion and sorry to pop your bubble Garth, but the U.S. is not the big cahuna on the world market anymore. They are viewed as the country that caused this world crisis and certain countries are quite prepared to make the U.S. eat crow now. There is alot of pent up animosity towards the U.S. from countries like China, Russia and other European countries. The U.S. has been viewed as a swaggering, egotistical, lazy country and is a mass consumer of the World’s resources. The U.S. uses approximately 25% of the world’s production of oil alone. I have news for you, the U.S. has little say in the coming changes to the world monetary system. Payback’s a bitch!

With respects to timelines, I don’t expect the real effects of inflation for about a year. However, we are already seeing increases locally in produce and other commoditites. Furthermore, look at the price of oil today $51.94bbl. A little over 1/3 of the price it was last summer, yet fuel prices here in Vancouver are at $1.00 per litre (2/3 the price of the summer).

Inflation is coming Garth and telling everyone it will be gradual and not extreme is a pipe dream in my opinion. What information/facts do you use to back up your comments of deflation then a moderate increased inflation over the next several years? I would also ask you about the site Xurbia.ca If you don’t think inflation and truly bad economic times are ahead of us, why are you linked to that site that sells survival products based on fear? Your positions on the 2 sites confuses me. One sells products or recommends what type of products to buy based on doom and gloom scenarios. Yet on here, you merely imply that Real Estate is the ugly two headed monster of this crisis and everything else will be moderate.

I look forward to your reply.

#25 Blacksheep on 04.03.09 at 2:23 am

Garth,
It seems you cannot fathom the possibilty of the US dollar becoming worth-less or just maybe, worthless.

Your words,
“There is no way the US is going to allow a devaluation of its currency, since that would spell the end of global bondholders willing to buy its debt.”

I feel this is an enevitability and has already begun.

The Fed has started buying U.S. Treasuries.

China & Russia are openly talking about forming a more stable basket of currencies for global trade.

All paper currencies are racing to the bottom, due to
massive printing.

I have a general theory:

Items the average person pays cash for are inflating.

Items you need to puchase on credit are deflating.

Some Profound lyrics from Zeppelin,

“Hangman, hangman, hold it a little while,
I Think I see my friends coming, Riding a many mile.
Friends, you get some silver?
Did you get a little gold?
What did you bring me, my dear friends? Keep me from the Gallows Pole.
What did you bring me to keep me from the Gallows Pole?

take care
BS

#26 Blacksheep on 04.03.09 at 2:39 am

Al #3,

Short on gold and silver, long the dollar?

You’re a braver man than I.

take care
BS

#27 Future Expatriate on 04.03.09 at 3:50 am

There’s one thing you can say about bullion bunnies… they breed like rabbits. And like a cross country trip on the highway, you can squish hundreds of them and there are still millions more.

US stock market hits 5000 and I think the resulting bunny frenzy could just about create its own gold standard.

Bartering for the new world.

By the way, Russia is lobbying to get back on the gold standard… I dunno, I think they know something.

#28 confused and a little crazed on 04.03.09 at 3:55 am

#4

nice touch with the homeless/ junkie theme.

but i alwayse beem partial to Rainvancover’
get it Rain- Van- cover

ok maybe it’s not that great

#29 dave on 04.03.09 at 5:03 am

If all asset prices are falling and “cash is king”, shouldn’t precious metals hold their own? Gold is not expensive in historical terms, and it’s more than kept it’s value thus far in what has shown to be a deflationary bust. Ergo, doesn’t it make sense to have a little exposure. What am I missing?

#30 hagbard on 04.03.09 at 6:38 am

I don’t fall under any of the three groups, yet I still think it likely we’ll experience hyperinflation. Still haven’t heard anything that convinces me otherwise.

#31 ts harpoon on 04.03.09 at 6:49 am

#1 dd “High energy prices worry me the most”…

I couldn’t agree with you more. Oil created prosperity, peak oil will devastate it; derivatives launched a pre-emptive strike. Brace yourself (and your portfolio) for an oil price shock by 2012 or sooner.

“A plunge in oilfield spending means non-OPEC oil output could soon fall, raising prices and potentially derailing any global economic recovery.” (Joshua Schneyer and David Sheppard, Reuters, 01 Apr 2009)

see:Globe and Mail, April 1st, 2009 page B5 for interview with Matt Simmons regarding fear of oil shortages.

The oil issue is but one of the reasons we should thank Garth for his Xurbia site.

#32 Kash is King on 04.03.09 at 6:58 am

I no longer believe it’s a matter of inflation/deflation, that may be only a distraction.

It may be a matter of can the overall system survive just how widespread corruption has become, and just how high up does the corruption go?

http://www.ritholtz.com/blog/2009/04/aig-before-cds-there-was-reinsurance/

http://www.moneyandmarkets.com/financial-terrorism-and-you-32944

http://market-ticker.denninger.net/archives/925-Ticking-Financial-Nukes-OTC-Derivatives.html

Perhaps the whole cash/gold /whatever? is out the window .

Maybe a bunker doesn’t sound so bad right about now ?

#33 ts harpoon on 04.03.09 at 7:10 am

http://inmotion.magnumphotos.com/essay/foreclosures

#34 David Bakody on 04.03.09 at 7:12 am

Once again ladies and gentlemen, look at the unemployment numbers, not the Stock Market. You can not live on the stock market, food shelter and clothing cost money …. real money … and investments require a job after those basic needs are met. People who are secure and looking for wealth can think about stock markets and may very well need them when the kids move home! or should they get sick and Senior Boomers can get sick in a heartbeat ….. one day I thought I was fit as a fiddle the next day I was on 9 (nine) bills a day and waiting for heart work and off work. So Mr. & Mrs Canadian pay down debt and save wisely …. it’s just that simple ….. what I still can not believe is all the people who write Garth Turner thinking he will tell them how to accumulate wealth or worst confirmation after they have made a bad move it was indeed the right one! Never fails people ask dumb questions right after they made dumb moves ….. and I love it when they say: guest I should have checked first eh?

Thanks again Garth….. most has been said wrt our future so it would be best for all concerned to buckle up and prepare for the ride to the bottom, and for all who have put their faith in all those G-20 clowns ” May Heaven Help You All” me I am sitting pat and stocking up on nuts.

One last point, a good friend said to me yesterday: “David new cars sales have just turned into used car sales” get it? and that says it all!

#35 Adam on 04.03.09 at 7:39 am

Garth, take a look at the reserves in the US… they could protect the dollar for about a minute then reserves would be gone… you say they wont allow the dollar to be devalued. They do not have a choice in the matter, unless you think they’d raise rates to protect it? doubt it.

#36 Bobby G on 04.03.09 at 8:21 am

http://www.edmontonjournal.com/Business/Condo+projects+feel+pinch/1455257/story.html

#37 Soylent Green is People on 04.03.09 at 8:21 am

#10 North Vancouver Citizen Jr. on 04.02.09 at 11:40 pm #4 NVCA

ROTFLMAO

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

This guy is high and mentally out of it. The more you mention his handle, the more gleeful he becomes, not unlike a child.

For him it’s better to be wanted for murder than not be wanted at all.

.

#38 Dark Wettler on 04.03.09 at 8:23 am

I must save the contents of this blog and email it to you in 12 months. I do truly enjoy your writing as I read fewer things these days that make me laugh as much as you do.

Real estate values are declining. Tell me something I don’t know already.

I was going to define deflation for you but grumpydawgs above beat me to the punch. A correcting stock or commodities market does not define deflation, nor does a correction of vastly over-priced real estate.

I am paying more now for almost everything I need to live than I was two years ago. What is that called again…?

When something is said to you over and over it must be true. Did you know that the term ‘public relations’ was created (by Freud’s nephew) because the US government felt the word propaganda elicited a negative response and needed a new way to describe their manipulation of the public through mass media?

Of course you did.

The bullion-loving apocalyptics have enjoyed the single best performing asset class for the last seven years straight. There have been top callers coming in droves every time there is a price retracement. Do you think they are finally correct?

Deflationists argue that more money is being destroyed at a faster rate than is being created. Not so. You could see for yourself by viewing the M3, except that the Fed stopped publishing that annoying little statistic.

But you are so correct, the Fed is surely demonstrating their commitment to a strong dollar by announccing ten thousand billion (that’s 10,000,000,000,000) in fresh spending in less than a year.

So where is that AIG bailout money going? To pay the counterparties. This is the real scandal, right under our noses. Where one side loses, another wins. New Billionaires.

This is fact, not opinion. Don’t listen to what is being portrayed for you in the media. Stop and think.

When something is said to you over and over it must be true.

When something is said to you over and over it must be true.

Deflation is where the price of a car falls. When wages and salaries fall. When pension and health care benefits cannot be met, and are reduced. When business input costs are reduced. When electronics costs tumble. When large corporations bankrupt, leaving rivers of unpaid supplier invoices. When tax rates decline. When 5.43 million Americans are on unemployment benefirs but the actual number of jobless is double. When, above all, there is the expectation that people will pay less for goods – houses included – in six months, than today. Deflation is not when your grocery bill goes up 5%, which is the result of an entirely different dynamic (exacerbated by credit woes). Tell me, exactly, how you are paying more for everything than you did two years ago. Gotta stop shopping at Holts, dude. — Garth

#39 kitkat on 04.03.09 at 9:01 am

In defence of the bullion bunnies….Garth, just as a point of info, during the 1990’s the gold bugs forums were all about coins, bullion and sludge (silver) and a smattering of world-affairs and politics comments.

Since then, they’ve split into various separate forum warrens and some started their Web sites. The hard core originals, some coin and pawn shop operators and bullion dealers, now don’t speak of gold much any more.

In the last 15 years or so, they’ve called the future correctly and were always hopeful that our movers and shakers would finally head down a moral, sensible, honest path instead of balancing on the brink. They’ve never hoped for chaos and despaired at the insanity.

For the last year or so, their focus has been on guns and ammunition shortages. Chilling.

#40 Steve on 04.03.09 at 9:04 am

Look at those G20 morons trumpeting more “growth” – as if that’s not what screwed us in the first place! The whole house of cards is tumbling down because of our unsustainable growth-based economic system and they want to keep it going? (That’s what they must mean… growth = no jobs or stability)

#41 North Vancouver Citizen Jr. on 04.03.09 at 9:05 am

Many prescient postings this morning.

…The big picture folks…the big picture…

1/
Consider that Europe/Mid East and the US have been 20/21st century wealthy consumer/spenders.
All are bankrupt.

2/
Consider Russia, China/India and Asia are heavily populated but are not the major consumer/spenders.
All are bankrupt.

3/
Now consider the one country in the world wealthy with resources, with a tiny population and strategically located….hmmmm, thinking, contemplating, thinking.

OMG, that’s Canada…and Western Canada in particular.

…The sooner the smart Eastern Canadians acknowledge the above the sooner they move west.

btw, Silver is rarer than gold and it has physical use too.
…the western world will never allow a gold standard considering Russia, China and India control the useless item.

#42 Investor on 04.03.09 at 9:09 am

Yes, he was right that US Equity Markets Will Crash
but Peter Schiff has been wrong in many ways. Also he is so in love in gold and looks like has no exit strategy for it and it pounding the table when Gold is at almost all time highs.

He was wrong on:

US Dollar Will Go To Zero (Hyperinflation).
Decoupling (The rest of the world would be immune to a US slowdown.
Buy foreign equities and commodities and hold them with no exit strategy (they got crashed more than US markets)

Its hard to compare Germany to US as Germany had hyperinflation due to payments that had to be made for the World War I to France, so it was natural for Germany to inflate to get rid of the debt burden.

#43 charles on 04.03.09 at 9:11 am

Prof Krugman, 1991 in “The Risk of Economic Crisis” edited by Marty Feldstein.

“The sustainability argument says that at some point, perhaps when the accumulation of debt has risen sufficiently to draw attention to itself, the market notices that the exchange rate is unsustainable, and there is a crash… The U.S. success so far in avoiding a hard landing is partly due to the fact that financial markets have not actually forced a large adjustment of the U.S. current account. If they did, the inflationary consequences of the required exchange rate change would be much larger than anything that has happened so far. If there is a type of international financial crisis to worry about, it is probably a currency crisis – the United States as a giant Latin-style debtor – rather than a replay of 1929.”

http://krugman.blogs.nytimes.com/2009/03/31/partying-like-its-1931/#comments

#44 Da HK Kid on 04.03.09 at 9:12 am

Wow, quite a bit of Inflationary new bloods on the blog today. Garth, good deflation explanation for dummy’s on post #38.

#18 Brent, good history lesson!

Last I looked, those with any brain matter left were focused on discretionary spending only and then the others were forced into it.

No spending, No demand – Deflation!

No end in sight for unemployment & asset destruction – Deflation!

#45 Da HK Kid on 04.03.09 at 9:13 am

New Mark to Market ruling – Japan!

#46 Bill-Muskoka (NAM) on 04.03.09 at 9:38 am

The MSM had another orgasm over Michelle Obama and Queen Elizabeth II acting like two human beings.

Good for the First Lady and the Queen. Let the Protocol Police go suck an egg.

Meanwhile, back in the realm of the Money Changers nothing has changed, except who is getting more meaningless paper wealth as a political gesture.

SSDD with a twist of humanity shining through the fog of BS!

#47 dd on 04.03.09 at 9:40 am

#10 North Vancouver Citizen Jr.

“#4 NVCA – ROTFLMAO”

Whatever you said … it is probably the shortest and most intelligent thing that you have written to date.

#48 ally ally oxycontin free on 04.03.09 at 9:48 am

“In what should end up being the country’s darkest hour, GDP has dropped at an annualized 9-per-cent rate since October,” said Avery Shenfeld, chief economist at CIBC World Markets Inc.

http://www.theglobeandmail.com/servlet/story/RTGAM.20090401.wxreconomy01art1915/BNStory/Business/

BTW—The Fundamentals are strong

http://www.youtube.com/watch?v=Yuo-5gwuWfo

#49 Devil's Advocate on 04.03.09 at 9:50 am

Everyone is looking for a quick fix. I believe the best quick fix is to accept economic contraction as a consequence of bad investment behaviour on all fronts but none so much as business’ disregard of late toward protecting the investment their customers make in the business they patronize.

Everyone is looking for a quick buck. From monetary investments to investments in personal relationships everyone seems focused on today and not looking at the long term. We look to our customers not as the future but only for the present. We seem to have lost, somewhere along the way, our understanding that by providing good service today at a reasonable return we will ensure the longevity of our business as we cement the loyalty of customers who will, long into the future, frequent our business themselves and refer friends and family to us such that our business grows. Even a lineworker ought to understand this simple principle of business as it will ensure their continued employment.

There are no quick fixes. This economic contraction is a signal that it is time to get back to the real work of providing real value. We can not be armchair stockbrokers. Condo flipping for a quick buck is dead. Buying gold to hide from anticipated economic meltdown is nothing more than running scared at best. We need to “WORK” and by work I mean provide real value.

We can not squeeze the last nickle out of our clients and leave their economically lifeless carcasses behind for the vultures to feed off. We need to look not so much at our own bottom lines but respect that of our customers and in so doing will cultivate a sustainable future of and for our own endeavors. This is a simple fundamental principle that applies in every aspect of our economic lives. We seem, at all levels, to have lost sight of this simple fundamental business principle and I believe the economic situation we find ourselves in today is largely the consequence of that lost longer term vision.

Rather than gamble on investments why not place your bets on a sure thing which has for all time proven the best return on your investment… good old fashioned work. You know who I am talking of and too.

#50 timbo on 04.03.09 at 9:56 am

charles:#43

The book you quote is out of date. It’s like running a cavalry charge at tanks. Poland 1940.G20 governemts have technically socialized the banking system now. This is not a free market anymore and governments are all working in conjuntion to maintain stability and slowly deleverage debts off the books. How can exchange rates change wildly when all G20 governemts are working together to print money.

here is the kicker, if all developed nations can and are printing to socialize losses why go into gold when you know the currency you are in is backed by all G20 nations not just 1.

quoting 1991 books does not work today. Like waiting for disco to be they rage again. MBA’s should all work at burger king. Home for telling woppers.

Next time your visit your gold website see what they are selling and you might catch the ads for snake-oil.doom ,crash ,the world is going to end, buy gold, buy gold ,hurry the end is near!

#51 PTDBD on 04.03.09 at 9:58 am

American Banks are expected to increase by 20% due to new accounting rules which replaces “mark to market” valuations with “mark to what you want” valuation now mandated by Congress. This should tell you something.

When flying at night and your one engine craps out you are advised to glide in low and then turn your landing lights on to examine the landscape. If it becomes obvious that the terrain will be deadly, you are then advised to turn your lights off.

Thus, the change in accounting rules.

#52 Eduardo on 04.03.09 at 9:59 am

“Deflation is where the price of a car falls. When wages and salaries fall. When pension and health care benefits cannot be met, and are reduced. When business input costs are reduced. When electronics costs tumble. When large corporations bankrupt, leaving rivers of unpaid supplier invoices. When tax rates decline. When 5.43 million Americans are on unemployment benefirs but the actual number of jobless is double. When, above all, there is the expectation that people will pay less for goods – houses included – in six months, than today. Deflation is not when your grocery bill goes up 5%, which is the result of an entirely different dynamic (exacerbated by credit woes). — Garth”

The price of cars and houses falling due to oversupply is not general deflation. Pensions and health benefits will not be reduced but more dollars will be thrown at the problem.

We are in the bailout era.

For all the money that has been lost by GM and Chrysler on their cars… they have received free money from the government.

The tax rate is only declining here. In the US they are talking about taxing and spending everything to death.

Energy is much more expensive than when the housing bubble started so although there was a correction, costs of business are still increasing and are forecasted to continue.

Food could be in shortage and will continue to increase.

Everything you cite as causing delation is really going to be inflationary because of all the action taken to counteract it.

Then go and buy a house and a car, quick. — Garth

#53 Signal Loss on 04.03.09 at 10:14 am

I’m not a bullion booster, but didn’t gold significantly out-perform financial instruments over the last 10 years? (just saying is all)

So, lets say I’m a young and mildly adventurous professional in his late 30s in Toronto with no kids who is employed by a very large and stable nation-wide organization that shall go unnamed and could possibly scare up a secondment or a posting out west. In short, lets pretend I’m North Van’s “smart easterner”. Where would I go? NW Calgary? Upriver in BC? Where is the cool place next door to the Mississauga of the west (e.g. municipality not bankrupt, plenty of business activity of all types, etc)? And will it significantly impede my integration into western canadian society if I think “Wild Roses” is stupid and overwrought?

#54 bobs your uncle on 04.03.09 at 10:23 am

Looking at what happened at the G20 meeting I am disapointed. They are clearly trying to go to a command economy, semi-fascist, government buying banks and companies. Yet at the same time vowing to maintain free trade.

Obama is mulling over whether or not to allow the auto sector to go bankrupt yet forks over trillions to the financial sector. Robbery and graft, pure and simple.

#55 Dark Wettler on 04.03.09 at 10:27 am

#51 PTDBD on 04.03.09 at 9:58 am

As a fellow pilot, your post was an absolute beauty.

#56 Eduardo on 04.03.09 at 10:34 am

Garth,

If cars are going to get cheaper it’s going to be the result of efficiency and reduced labour costs not energy price. Becoming a more efficient company is not deflationary.

Inflation and deflation are not local to specific industries or areas.

By your definition deflation is over in Calgary… YEEHAW!
http://www.findcalgary.ca/listings?pathway=127&pageId=19

#57 Investor on 04.03.09 at 10:51 am

“As for the bullion bunnies, they’ll soon start hoping for nuclear winter.”

That kind of make sense, as gold is durable to the point of virtual indestructibility, but all the bunnies would not exist. So the question is who would be holding the gold?

#58 CM on 04.03.09 at 10:51 am

Not about real estate or politics, but I’ve been known to go off-topic before.

This one’s for David Bakody. I hope this kind of thing doesn’t go on at his local Tim’s in NS.

Nude man places drive-thru order at Tim’s

The best bit was the last line:

“The women working at the drive-thru window were not impressed.”

http://cnews.canoe.ca/CNEWS/WeirdNews/2009/04/02/8979056-cp.html

#59 Eduardo on 04.03.09 at 11:02 am

I could argue the other side of cars getting cheaper and say that it will result in more disposable income which will be spent in the rest of the economy.

#60 Herb on 04.03.09 at 11:02 am

PTDBD,

you’ve nailed it again at #51, Ducky. We’ll need a proactive supply of Leasa’s personal lubricant, because it is going to be rough and painful before the landing lights are switched off.

#61 charles on 04.03.09 at 11:07 am

Timbo @ #50,

The date and source of the quote is the point.
Your hypothesis about the G20 agreements going forward will be tested however cannot at this time be stated as fact.
Your line of thought suggests the arbitage trade and currency valuations are a thing of the past. Doubt it.
No gold holdings or soft hands here. Check yourself.

#62 Westcoaster on 04.03.09 at 11:10 am

Bang on Garth ! Peter Schiff prays every night to the almighty for the collapse of the world as we know it just so he plant his smug face on CCN and say ” I was right”. Notice how they yanked his butt off of there with his “apocalypse now” nutbar attitude ?

Inflation ? yes but not for awhile and not hyper….also agree the US will not allow a collapse of the US $ nor the system.Only a loose cannon is praying that happens and he probably lives in Deliverance land.

#63 Bill-Muskoka (NAM) on 04.03.09 at 11:11 am

#48 ally ally oxycontin free on 04.03.09 at 9:48 am

Did you mean ‘Funnymentals?

#64 Dark Wettler on 04.03.09 at 11:14 am

#44 Da HK Kid on 04.03.09 at 9:12 am
Wow, quite a bit of Inflationary new bloods on the blog today. Garth, good deflation explanation for dummy’s on post #38.

#18 Brent, good history lesson!

Last I looked, those with any brain matter left were focused on discretionary spending only and then the others were forced into it.

————————————————————–

No need to insult others for having an original thought. Now go do as your told.

#65 dbg on 04.03.09 at 11:20 am

Great post Garth.

I like the gold nut description. Every gold nut I have met seems to wish for the collapse of the world economy. I think they’ve watched too much 007 when they were kids.
Their pleasure while others suffer. A sick attitude.

#66 B on 04.03.09 at 11:24 am

Flowmax moment…. Well done Garth lol

#67 PTDBD on 04.03.09 at 11:24 am

Please tell me this is an April fool’s joke, ….please.

Financial Times.com is reporting that U.S. bailed out banks are considering buying toxic assets from each other under Geithner’s plan. You see, the risk/reward leverage in favour of the investor versus the taxpayer is so sweet that they can’t resist.

The taxpayer will provide 90% of the money to buy the toxic assets (formerly called hookers in high heels) but only get 50% of any realized profits. The buyer puts up 10%, gets the leverage from the government and takes 50% of profits. Nice huh?

What a Nobel prize winner is saying about the plan and Krugman agrees.

This is supposed to inspire confidence?

#68 rick in Surrey on 04.03.09 at 11:30 am

This article posted today on Stockhouse.com by Casey Research should shed some light on things about gold values.

http://www.stockhouse.com/Columnists/2009/April/3/How-long-before-the-gold-price-takes-off-

#69 TrueGritCalgary on 04.03.09 at 11:31 am

Paul Krugman explains why the Chinese are screwed.

http://www.nytimes.com/2009/04/03/opinion/03krugman.html?_r=1

#70 Alex on 04.03.09 at 11:34 am

“They are myopic, self-centred, and greedy enough to wish for the collapse of the monetary system which sustains most of the planet’s people”

Please give me a break, this fiat monetary system sustains people?
Greedy are those who print money and abolish gold standard that has been around for 6000 years.

Since 1971 when gold standard was abandoned, we got inflation and derivateves markets to hedge agains the risks that were unimaginable during the gold standard era.

Since 1971 Canadian dollar has lost 96% of its purchasing power – check Bank of Canada website, they admit it clearly!!!

We desperately need the gold or silver standard back otherwise we are doomed.

Then we’re doomed. Ain’t gonna happen. — Garth

#71 Snapper on 04.03.09 at 11:34 am

Garth,

I have been watching gold for awhile now and I am struck by what seems to be a shepherded action by the financials and media. From your comment on “gold bunnies”, I expect you are seeing something similar or you have some historical reference. I don’t own any gold yet, but have been looking at an entry point sometime in the next 3 months as I am expecting some correction. Are you expecting something similar?

Thanks

#72 Canned Goods and Buckshot on 04.03.09 at 11:49 am

re: gold bugs

I’m sure I’m not the only person to notice this, but Nouriel Roubini today in the G&M had something insightful to say about the rise of gold:

“What’s your take on gold in this environment?

I’m bearish on gold. I think that there will be deflationary – not inflationary – forces in the global economy for the next few years. Gold represents a safe haven not against inflation but against Armageddon, in a world in which … banks can’t even be bailed out and people are going to buy guns, ammunition, gold bars and canned food and rush to their log cabins. But that’s a world of great depression. I don’t think we’re going to end up there.”

#73 jess on 04.03.09 at 12:07 pm

merger time = less jobs going forward.

#74 jess on 04.03.09 at 12:25 pm

sunk-cost fallacy

cut and run – swipe the balance sheets clean banksters

#75 North Vancouver Citizen Jr. on 04.03.09 at 12:25 pm

#47 dd (aka nvca)

ROTFLMAO…rolling on the floor laughing my a$$ off.

…and to all my Vancouver renter friends on this site, the ones that are predicting the 100% real estate drop, you know, the ones that have “entitlement” written all over their posts….I say to them…move to the U.K. and convert to Islam.

#76 Paul Fist In Your Face on 04.03.09 at 12:44 pm

Hot off CBC.ca. :

Recession a ‘relatively mild’ challenge for Canada:
Flaherty

“Relatively speaking, this is a mild economic recession,” Flaherty said. “These are relatively mild challenges for us.”

Der Unter Secretary of Der Dollars was quoted today from Engerland. Speculation is Herr Flop,during a break, took the Chunnel to the continent and spent some time in a hash bar in Amsterdam. (Just in case you were wondering what this goof was smoking)

#77 Jacqueline on 04.03.09 at 12:54 pm

Does anyone have an opinion on Treasury Inflation Protested Securities (TIPs) in the US? Its a government bond that is inflation indexed. My mom has lost money in everything and just wants a safe place to put her money. I think there will be a tax credit for her and there is a small interest rate return.

#78 Jacqueline on 04.03.09 at 12:55 pm

Sorry I meant “Protected”.

#79 pbrasseur on 04.03.09 at 1:26 pm

“As for the bullion bunnies, they’ll soon start hoping for nuclear winter – Garth”

I love it, wish I could write like that.

You’re a greate writer, you remind me of Mark Steyn (without the anti-muslim non sense). :-)

Oh and I agree, the threath of inflation is not severe and gold might collapse as soon as confidence builds up

#80 Mike B formerly just Mike on 04.03.09 at 1:30 pm

Not that I am not a proud Canadian but the recent comments about how Canada plays a leadership role in the world economy really is quite laughable. Witness the interview with Stephen “all knowing” Harper is interviewed and on the one hand says we play a leadership role and then quickly indicates that we as a country and he as a prime minister cannot fix or impact the global recession. He indicates what keeps him up at night… give me a break…an attempt at being human

http://watch.bnn.ca/clip157456#clip157456

#81 North Vancouver Citizen Jr. on 04.03.09 at 1:37 pm

MLS # V756116 North Vancouver

…Sold over asking…

http://www.mls.ca/PropertyDetails.aspx?PropertyID=8056298

…I’m the first to agree, this will become a dinasour in no time….but rich people have to live somewhere…don’t they….and N.V. is West Vancouver’s poorer sister municipality.

#82 Got A Watch on 04.03.09 at 1:42 pm

I am getting a good laugh out of most of the pro-inflation arguments put forward here.

Colour me deflationista. It is here, now, and it will get worse before it gets better.

Failure to recognize this simple fact can be toxic to your financial future. All the arguments posted above in favor of inflation now or soon are just wrong. Read the whole post here, Mish lay’s it out, and he is 100% correct: Fiat World Mathematical Model. Short’n’sweet – wealth destruction outweighs ‘stimulus’ by many orders of magnitude, and Governments applying enough ‘stimulus’ to correct that is impossible for many reasons.

But debating inflation/deflation is one of those debates that nobody can win. Both sides are entrenched in their fortified bunkers of belief.

I have no axe to grind either way, I have analyzed the situation, read the arguments, extensively, for years, on inumerable Blogs and websites, where this debate has raged for years. I call ’em as I see ’em.

When the deflation ends it will be apparent. We will not go from deflation to inflation in one day. Nor will hyper-inflation break out overnight, if ever. You will have time, if you are watching closely enough, to position yourself accordingly.

Thinking too many moves in advance can cause you to not pay enough attention to what is happening now.

Canada will be hit very hard by this crisis, regardless, with morons like Stevie ‘The Economist’ Harper and ‘Dim’ Jim Flaherty in charge:

Flaherty still sees mild recession

“LONDON (Reuters) – Canadian finance minister Jim Flaherty played down concerns about the depth of the country’s recession on Friday, saying it would be relatively mild and that Canadians were not worried about the exact pace of the slowdown.

Flaherty predicted at the time of his budget in January that the economy would shrink by 0.8 percent this year — an estimate now viewed as too optimistic by forecasters such as the OECD, which predicted a 3.0 percent decline earlier this week.

But Flaherty, speaking to reporters after a trade promotion event in London, did not see any urgent need to revise the government’s official estimate, which he said had been based on private-sector forecasts.

“I think we’re certainly looking at negative growth. I don’t think Canadians are that concerned if it’s ‘2-point-this’ or ‘1-point-that’,” he said.

“Relatively speaking this is a mild economic recession. We will come out of this strongly. We are able to withstand this,” he said.”

I rest my case. More to read at the link, if you really need to. ‘Dimmie’ may have a second career ahead as a comedian. As a Finance Minister, not so much.

#83 Eduardo on 04.03.09 at 1:45 pm

Mike,

You can play a leadership role without having an impact. It’s really quite simple. We could go carbon neutral as a country and it wouldn’t matter compared to the US and China, as an example.

We are also showing leadership with banking regulation. Others will follow but it will not prevent the crisis from getting worse.

If Canada showed “leadership” by bailout out ____ for 100% of their GDP it might show leadership in Canada but it would be a drop in the bucket in the US.

I could go on all day.

#84 PTDBD on 04.03.09 at 2:10 pm

What is still not understood about this financial crisis is that it a crisis of trust.

Our monetary system is the foundation of the problem. Politicans will increase money creation to sustain their regimes and promises until the entire edifice collapses.

Basing the money system on gold or diamonds or bank digital credits will not solve the problem. Who will be the honest keeper of the accounts? Who will count the diamonds. How can we trust them? That is at the crux of the problem. It’s human nature and our current deteriorating morality makes it exponentially worse.

In the past, they shaved the edges off the silver and gold coins to smelt the gains. Today, our bearded financial elf waves his digital wand to create a trillion at a time.

As for gold bugs, they never wished for more than security for their loved ones. Unfortunately, their obsession clouded their outlook on life:

With baited breath and ears that bite
they haunt the hollowed halls of night
golden gnomes, slithery silver elves
for centuries sat, mumbling to themselves.
flickering shadows of lives like firelight
waned to deathly darkness before their sight
truth, beauty, justice, freedom…
they gnawed like bones
only seeing value in their stones.

#85 Bill-Muskoka (NAM) on 04.03.09 at 2:11 pm

All the Bull on Bullion is humorus to say the least. Try carrying or eating it.

Now, on the serious side. I have been hoarding Canadian Tire Money and will accept bids for my stache starting at face value and going up. There is the only really safe monetary gamble around nowadays. LOL

#86 Shawn on 04.03.09 at 2:13 pm

#70 Alex

Also since 1971 the median standard of living in Canda has risen dramatically. Back then cars were about $3000 but most families could afford only 1. Houses typically were 1200 square feet or less with 1 bathroom.

Air travel was not very common.

The amount of retail stores was way smaller. MacDonanl;s and A&W were a lot fewer and futher between. People ate out rarely.

In the country some people still had no running water.

I was there i saw it.

#87 Makeorbreak on 04.03.09 at 2:14 pm

ECONOMIC COLLAPSE TO TRIGGER SOCIAL PANDEMONIUM:

http://www.doomers.us/forum2/index.php/topic,43224.0.html

#88 kc on 04.03.09 at 2:29 pm

This arguement is getting old. in/de-flation should’nt truely be of the greater worry. What should be of concern is the fact that Canada is gutting the (once proud) manufacturing hearts of the general workforce. I know this isn’t news for it has been happening over the last 15 years and no one is crying foul, as we sit and take it again and again. What we are witnessing is the greatest shift from Made in Canada to bought in Canada. The silver carpet of consumerism is turning into a lead carpet of credit debts. This anchor of debt is sinking all of the once proud Canadian way of life by being sold a rusty bill of goods. I sit in amazement watching the markets over the past week, what in hell is driving them? There isn’t a honest piece of good news about factories opening up, or new ventures, however, up she goes… must be the great sucker’s rally of ’09.

We as Canadians are getting what we deserve! We watched our hearts and blood being sold off to manufacturing overseas, as we strip mined our forrests and dug the soil to sell. What did we get in return? Hopes and dreams… a simple shell game of who has the magic pea… Our Canadian way of life is being sold out from under our feet and as we stand here watching… what do we do? drink the kool-aid and buy more on plastic/mortgages, We are paying for what we deserve.

way back I posted this, and i feel it is time to repost again for it is 100% true. cheers

Here is an insightful quote from page 135 “The Stock Market Crash of 1929” by Gordon V. Axon

“The old saying that a stitch in time saves nine applies with force to controlling speculation and a booming economy. The nation as a whole can produce only so much wealth. No country, no system, has found the means to rapidly stimulate national wealth, over a period of years, without facing either serious social problems or a dramatic setback. Wealth does not normally increase rapidly, but through the slow processes that increase industrial and argricultural productivity as the years pass. So any stock market boom that rapidly outpaces the economy is bound to collapse sooner or later. Any economy that is stimulated to excess will surely have setbacks that undermine the future.”

#89 Glenn on 04.03.09 at 2:34 pm

Well, if I buy gold and there is no devaluation (Zimbabwe, Argentina, Germany….ROME!), I guess I have stored my wealth in a stable form that I can then sell for a tidy profit. Granted, there are efforts to SUPRRESS the price of gold, but thats merely polishing the railings on the Titanic. Gold can, and will, break out within the next 12 month and when it does, look out!

If a massive devaluation DOES happen, my cash will be worthless or very close to it, and my wealth will be stored in a stable medium…gold! On top of that, during a depression and deflation an ounce of gold could possibly be worth $6000USD or somewhere in that range.

In other words, this is a complete no risk option that offers a win/win for the owner. If thats “crazy”, then I guess thats what I am. As far as I am concerned, its simply not worth the risk to NOT put my meagre funds into precious metals.

One of us is wrong, Garth. If its me, no sweat. If its you, Lord have mercy.

Your “no risk option” gold lost three-quarters of its value after the last balloon. — Garth

#90 supersocco on 04.03.09 at 2:39 pm

Actually, Schiff believes the CDN dollar will RISE vs. the American dollar. 2-1 ratio predicted:
http://www.cbc.ca/thehour/videos.html?id=1065863016

#91 Chincy on 04.03.09 at 2:39 pm

#24 Rick in Surrey

Inflation occurs when
a) the money supply grows
b) the velocity of money grows

Has the money supply really grown when credit and wealth is being destroyed at 10-20 times faster than it is being issued? What is 1 trillion going to do when 40 trillion has been wiped out?
Is the velocity of money in play right now? Everyone is saying ‘get the credit flowing’…my question is get the credit flowing to who? everyone is tapped out and those that aren’t (people and corporations) are too freaked out to go out and borrow as they may not have jobs tomorrow.
We are in the natural state of what some term a ‘bust’.
Now if you really want to freak yourself out, go research demographics as it relates to spending haibts…tough times ahead or conversely great times ahead for those that didnt over-leverage.

Just my thoughts.

#92 Chris in England on 04.03.09 at 2:58 pm

“…The sooner the smart Eastern Canadians acknowledge the above the sooner they move west.”

North Vancouver Citizen, you are a hoot. Do you really want everyone to move there? Won’t it ruin the landscape? I am starting to rethink my negative thoughts about rain – must be all that public relations (no, Freud’s nephew has just corrected me – “propaganda”) that you are putting in. You really are a one man tourist board. OK, I’m convinced [digging her brolly out of the bin]. Vancouver here I come.

#93 ally ally oxycontin free on 04.03.09 at 2:59 pm

#63 Bill-Muskoka (NAM) on 04.03.09 at 11:11 am

Yes, I did Bill … Unfortunately, it didn’t capture the lies O’Flairity is spreading today. There he was, at a much shorter podium, [ side elevation view to capture his spectral presence ] telling the world Canada is in a “mild” recession. None of the bankers agree with him.

To date we have the culpable five caught in their lies; Harper, Bush, McCain, O’Flairity and his PA Menzies, who lied about the funding cuts to the PBO’s office. The PBO more or less told everybody the finance department’s numbers are / were wrong.

#94 George on 04.03.09 at 3:36 pm

Hey Garth, Take a little cyber trip to data.bls.gov and check out the government statistics on inflation. Now I fully understand that the price for downloading ringtones on your cell phone and of course file sharing music has of course deflated. Good Work by the way but when you check those government stats on gasoline, orange juice, bananas, milk, chuck etc well I’m sure you’ll get the picture. What if your wrong? Is it possible to consider that a new global currency is a back door approach to hyperinflation. IMO hyperinflation is just the destruction of a currency. Think G20 all those admissions by global leaders about NWO and of course all the talk about the IMF SDR perhaps being the new world reserve currency. I think you might have an education coming to you soon especially when you see the IMF hinting at dumping 400 plus tons of gold. They don’t need it. They got a new currency unit. The one that runs the risk of making your “King” obsolete or at least worth less, much less.

Forget gold. Hoard tinfoil. — Garth

#95 Bill-Muskoka (NAM) on 04.03.09 at 3:40 pm

#93 ally ally oxycontin free on 04.03.09 at 2:59 pm

Well, watching Harper and Dim Jim is like watching ‘Twins’ but far less entertaining! With McSquinty now Buddies with Dim Jim shall we expect the ‘Three Amigos’ on stage soon?

John Stewart was a hoot Wednesday night BTW showing bloopers of leaders. Bush trying to leave the stage was still the best. Man, he could look like a moron in his sleep, or is there a difference between awake and asleep with him?

The Star’s cartoon today was also a hoot. Can you imagine how upset Harper was to miss a PHOTO-OP?

#96 Live Within Your Means on 04.03.09 at 3:41 pm

#75 North Vancouver Citizen Jr. on 04.03.09 at 12:25 pm
#47 dd (aka nvca)

ROTFLMAO…rolling on the floor laughing my a$$ off.

…and to all my Vancouver renter friends on this site, the ones that are predicting the 100% real estate drop, you know, the ones that have “entitlement” written all over their posts….I say to them…move to the U.K. and convert to Islam.

Hi Harry.

#97 Jake on 04.03.09 at 3:45 pm

#67 PTDBD Excellent post. It really does make you wonder how corrupt the system is when the administration questions the morality of a few billion auto bailout, but pushes trillion dollar bank bailouts with religious fervor.

For the love of Obama, what is going on here?

Not a surprise that Geithner’s plan rewards the banks and screws the tax payer. The tax payer will just bend over and take it though. After all, everything is OK now that Bush is gone.

I will expect responses from Obama supporters later this afternoon after they are finished watching Oprah.

#98 rory on 04.03.09 at 4:03 pm

#90 supersocco

Just great SS …you have given more fodder to our NVC Jr.;)

Peter Schiff, in the video link you posted, said China will buy more of our stuff …how does stuff get to China …ummm …that would be thru Hongcouver …with bated breath I await his next reply.

#99 john m on 04.03.09 at 4:04 pm

Deflation is where the price of a car falls. When wages and salaries fall. When pension and health care benefits cannot be met, and are reduced. When business input costs are reduced. When electronics costs tumble. When large corporations bankrupt, leaving rivers of unpaid supplier invoices. When tax rates decline. When 5.43 million Americans are on unemployment benefirs but the actual number of jobless is double. When, above all, there is the expectation that people will pay less for goods – houses included – in six months, than today. Deflation is not when your grocery bill goes up 5%, which is the result of an entirely different dynamic (exacerbated by credit woes). Tell me, exactly, how you are paying more for everything than you did two years ago. Gotta stop shopping at Holts, dude. — Garth……………….. Bang On! and its all happening.

#100 supersocco on 04.03.09 at 4:37 pm

@ #98 rory

Cdn dollar double the worth of American dollar =

– dead film industry for BC
– no forestry exports to US for BC
– tourism collapse for BC

to name a few.

#101 Future Expatriate on 04.03.09 at 5:05 pm

#42 said “Its hard to compare Germany to US as Germany had hyperinflation due to payments that had to be made for the World War I to France, so it was natural for Germany to inflate to get rid of the debt burden.”

Well, thank GOD the US doesn’t owe a single penny to China today! And wouldn’t dream of inflating to get rid of the debt burden, but merely to prop up an unsustainable untenable market and economy.

Unbelievable the lengths a fool will go to defend throwing away his money.

#102 North Vancouver Citizen Jr. on 04.03.09 at 5:09 pm

#92 Chris in England

“Vancouver here I come”…Chris, maybe you’d be happier living in a bunker next door to Garth’s.

#98 Rory

I have just been stating the obvious.

…To all my eastern canadian friends…it’s never too late but you missed a grand opp 10 – 20 years ago moving west…Instead, ex pat Iranians, Asians & even Zorastrians gobbled up the North Shore, Asians dominate Richmond and Sikhs et al just kept growing… just to name a few far sighted immigrant populations.

I won’t mention Easterners still carry “Centre of the Earth” on their shoulders.

#103 RJ on 04.03.09 at 5:22 pm

Bullion Bunnies? That’s good. Believers in sound money even have a funny index named for them. Gold Bugs. People like you have been chastising devotes of gold and silver ever since the first shyster issued a paper receipt over four hundred years ago. We’re still here, and will be long after all fiat currencies achieve their true value. Zero.

The Federal Reserve Bank of New York is the largest gold depository in the world. It sits on Manhattan bedrock, and rotates until the inner and outer doors align. Then, and only then, are the eight thousand tons of gold bars contained therein accessible. Wow.

So, as soon as they ship all those old gold bars to the Smithsonian Institution, I’ll concede the point and ship mine too. Like never.

http://www.newyorkfed.org/

You have gold bars? Where? — Garth

#104 canuck99 on 04.03.09 at 5:24 pm

Re: #39: Tell me, exactly, how you are paying more for everything than you did two years ago. Gotta stop shopping at Holts, dude. — Garth

Never let the facts get in the way of a good retort. To back up Dark Wettler here are few pertinent ones:

Supermarket News: Food Fluctuations Drive Inflation in Canada

“Food price inflation was a major contributor to the most volatile price fluctuations in the Canadian Consumer Price Index in more than five years, Statistics Canada here said Monday.

Consumer prices increased by 2.3% in Canada in 2008, up from 2.2% in 2007. But the average masked a 3.9% annual increase in food bought from stores, the agency said.

Inflation was most active during the fourth quarter, when food price increases accounted for more than 60% of the increase in the CPI, about 10 times the corresponding figure for the first quarter. Prices for food staples such as bread, rice, flour, milk and eggs rose sharply in 2008, Statistics Canada added. Among the reasons were higher transportation costs resulting from rising gasoline prices, surging commodity prices and increasing demand for food in emerging markets in other countries, the agency said. ”

Source: http://supermarketnews.com/news/food_inflation_0324/

Hey, you plow down food crops to plan industrial corn, guess what you get? Yeah, green gas priced the same as the black stuff, and more expenseive food. This is not the result of today’s economic forces, but more of questionable policy. (And no enviro benefit). — Garth

#105 Future Expatriate on 04.03.09 at 5:26 pm

Paper believers are like abused, cast-off children, while paper peddlers are the complicit siblings urging the parents on so they themselves avoid the abuse for yet another day. They both refuse to believe the obvious truth about their abusive parents, even to the point of death at the hands of their parents, and would gladly defend them unto the grave itself.

It is easy to understand the sick psychology, born of absolute dependence, and the difficulty or even absolute impossibility of breaking through with simple facts like gold outperforming every bit of paper for the past decades, the absolute unsustainability of the current paper Ponzi scheme, and how gold represents practical absolute independence from a crashing and corrupt system.

Do I wish for nuclear winter? No, but NOT wishing a thing will NOT ever make it so. I imagine millions tried to wish the Depression away. As they are wishing Obama away now, and Armageddon in the future.

Only the blind, not knowing they are blind, leading the blind, who also don’t realize they are blind, can’t see the edge of the abyss. Even if they managed to feel potholes along the way before. Indeed, perhaps their success at navigating the potholes makes them feel the abyss is just another dip in the road.

Rather than hope for nuclear winter, I wish the abyss to be just another pothole. While knowing it is not.

Crying “LOOK OUT” is not making the abyss a single bit larger.

#106 . . . fried eggs and spam . . . on 04.03.09 at 5:27 pm

Excellent assortment of posts today. Aha — TGIF!

#7 smwhite at 11:19 pm — “considering investing in cash flow rich, forward thinking, Canadian energy companies.”

Top notch advice. Our CFP set up monthly dividends to be automatically re-invested in diversified companies, so we will have an adequate to good pension plan soon.

#15 Grumpydawgs at 12:39 am — “The Arabs and the Chinese will not ( are not ) fooled by the squeaky machinations of the US Dollar and will not take fourty cents for a dollar of debt unless they’re getting something in return. . . .”

One reason that Russia is looking at the gold standard, or with China, are calling for a new currency possibly with Chavez and some mid-east countries, primarily to regain stability, which they are not getting from the dollar.

#41 North Vancouver Citizen Jr. at 9:05 am — “btw, Silver is rarer than gold and it has physical use too. …the western world will never allow a gold standard considering Russia, China and India control the useless item.”

Credit where credit is due. As far as I know, India and China use more gold than anyone else in the “trinkets” they make for tourists, so Cdn. silver coins would be a better bet to exchange for food, gas etc., or as a hedge against stag- or hyperinflation.

Besides, the tourist market will begin slowing down shortly.
——
Garth has his view, and I have mine. — http://tinyurl.com/c5mvte

“The Great Depression in the United States,” wrote Milton Friedman, “…is a testament to how much harm can be done by mistakes on the part of a few men when they wield vast power over the monetary system of a country.”

Speaking of a few men, Mark to Market Madness, here is — http://tinyurl.com/depbao

BTW, deflation to inflation; when and where does stagflation occur?

#107 brazer on 04.03.09 at 5:29 pm

Garth, have you read Sprott’s latest?

http://www.sprott.com/pdf/marketsataglance/03_2009.pdf

What do you think of this last report? They continue to say that gold is the only safe haven.

Thoughts on his analysis?

I like the guy, but he’s lost it. — Garth

#108 David Bakody on 04.03.09 at 5:48 pm

#76 Paul Fist In Your Face on 04.03.09 at 12:44 pm

Paul I have given up Flaherty and his three ring circus, look in the stands the only persons sitting are the sweeper and the guy with the bucket and shovel!

#109 john m on 04.03.09 at 5:52 pm

97 Jake on 04.03.09 at 3:45 pm…good post—-the Obama and Harper celebrity show to me is somewhat offensive considering the pain our people are going thru and will for generations by their actions. Fortunately im not worried about food on my table (yet) but i can imagine the dismay some people are feeling as they watch this puppet show transpire.

#110 Grumpydawgs on 04.03.09 at 5:53 pm

Garth, the GOC couldn’t sell the ‘deflation scare’ over the past two weeks of propaganda and they are now floating the “Inflation’ ballon to see how that effects the polls.

They can’t seem to make up thier minds. The prices that people are keeping thier eye’s on are the skyrocketing price of groceries and all the services costs related to living in this country.

I would guess that the pollsters have reported that the pop doesn’t give a crap about sinking house prices but that they are feeling the squeeze from rising prices.

Mr. Flaherty is poised to switch from ‘deflation fighter’ to ‘inflation fighter’. The fickle winds of Ottawa eh?

#111 Grumpydawgs on 04.03.09 at 5:54 pm

http://www.financialpost.com/news-sectors/story.html?id=1460447

heres the ‘inflation fighter’ story

#112 David Bakody on 04.03.09 at 6:06 pm

Well, well, well, how close we came …. the word now is: The country that controls clean air technology and imposes a carbon tax will control the world’s next great manufacturing base ….. Clean Clear, Non Toxic Living … and the race is on, and China has positioned itself in the lead to be the first while America is working fast not to left out …… and like the Avro Arrow Project a Western PM scraped it in a snap election fueling what? The Tar Sands … OMG we came that close …. Dion must be LOL big time.

#113 john m on 04.03.09 at 6:29 pm

Just something i have been thinking about?…..as i watch the actions of our political leaders…….is this a game at taxpayers expense (they know we are headed for seriously bad times)……..so is the object to get as many fat cats in their corner…political donations etc at our expense to secure their futures while our futures and our worlds collapse? After all it is our money,these people are on the taxpayers payroll…..where are the guarantees for our health care,our seniors,the poverty in our country? ………

#114 Argentum Aurum on 04.03.09 at 7:22 pm

Garth,

“Forget gold. Hoard tinfoil. — Garth”

Why hoard tinfoil?

It goes on the inside of your apartment windows to keep the aliens out. Sheesh. — Garth

#115 timbo on 04.03.09 at 7:26 pm

I have seen with my own eyes a proper way to discuss, express and think about other points of view and up to a year ago I never realized that these type of blogs could actually foster a good debate.

Cheers, Garth and to all who throw out ideas that are not subject to editorial that used to come from an advertiser’s wallet.

I will say that some ideas are way out to lunch but atleast most are free and have given me a very good clue into how people are feeling in Canada.

Thanks again for “the greater fool” ,and thank you again for the blog without the Schiff every day, buy my book, power spin.

#116 timbo on 04.03.09 at 7:57 pm

gold bugs,

http://www.itulip.com/forums/showthread.php?t=847

What do you make of this?
I would say that banks can manipulate the price and play a chase game at any time. But always remember the market is a free force that is controlled by the mob.

#117 dbg on 04.03.09 at 8:08 pm

KC – “We as Canadians are getting what we deserve!”

I haven’t. I’m still waiting for mine and I will get it.

You guys on this blog are so serious. That you’ve gone funny.
The cavemen are laughing.
LOL

Cheers,

#118 timbo on 04.03.09 at 8:20 pm

forget gold get a bonus

http://uk.reuters.com/article/marketsNewsUS/idUKN0335729620090403

this is starting to be a bad joke. They should parade these people down the street with signs saying how much they made off taxpayers. Imagine the tomato sales and the sauce left over after the parade. 2 of these parades would wake everyone up to the fact that if you take a bonus you better of earned it.

what a joke.

#119 Tinfoil Trade of the Decade on 04.03.09 at 8:24 pm

Garth, send some tinfoil recommendations over Ambrose Evans Pritchard’s way. He’s talking about the IMF expanding their Special Drawing Rights privilege. Having worn the horns of a politician why is Gordon Brown and Obama using the NWO word is that some arcane politspeak us pleabes are unfamiliar with?

#120 Rural Rick on 04.03.09 at 8:30 pm

Hey, you plow down food crops to plan industrial corn, guess what you get? Yeah, green gas priced the same as the black stuff, and more expenseive food. This is not the result of today’s economic forces, but more of questionable policy. (And no enviro benefit). — Garth

Questionable policy? Oh you are so political. It is insanity like most of our so called green government ideas. It is amazing how politicians and big business have hijacked the idea of conservation of our environment and turned it into a weapon. The sheeple following along cause hey it’s green so it has got to be good. Less biodiversity, less habitat, less energy no it is not good. We have to learn to do cost benefit analysis on everything big brother says. It is scary the way most just swallow everything they are told.
Think I will open a Koolaid stand.

#121 RM in Oakville on 04.03.09 at 9:07 pm

#2 john on 04.02.09 at 10:41 pm

John, knock it off with the “what does your crystal ball see for the TSX” crap. Just write some numbers in and be done with it. Do you honestly think anyone has absolutely any idea?

#122 Da HK Kid on 04.03.09 at 9:37 pm

#64 Dark Wettler

Dont mistake an insult for tough love!

#123 TUT on 04.03.09 at 10:34 pm

Some estimates:
Max. weight or gold available in the world : 5 billion oz
Approx. current price: 1,000$/oz
Total value: 5 trillion

Not very much, it seems…

#124 Investor on 04.03.09 at 10:58 pm

Future Expatriate,

Well, thank GOD the US doesn’t owe a single penny to China today! And wouldn’t dream of inflating to get rid of the debt burden, but merely to prop up an unsustainable untenable market and economy.

Unbelievable the lengths a fool will go to defend throwing away his money.

Of course US might hyperinflate, but the point is the circumstances. US borrowed willingly to fuel its growth. Germany was made to pay. Totally different scenarios. If US hyperinflates I would say the world economy is cooked as the US dollar is the reserve currency and many countries hold dollar reserves.

Economies have been propped up by governments before some attempts were more successful than others.

#125 kc on 04.04.09 at 7:44 am

117 dbg on 04.03.09 at 8:08 pm KC – “We as Canadians are getting what we deserve!”

I haven’t. I’m still waiting for mine and I will get it.

Don’t worry… pink slip is in your mailbox….

#126 Future Expatriate on 04.04.09 at 11:02 am

#124- Here’s the problem in perception:

You theorize as if the folks actually in charge of the US really want what’s best for the US and the planet.

I submit that is the LAST thing central bankers want. I submit they want complete control and no autonomy whatsoever, least of all to the world’s “number one” economy. That all the market free-for-all the last decade was merely allowed so the public would beg for their iron grip.

All conspiracies aside, consortiums of controlling groups only want more power and control; never less. And “of course” always for the “benefit” of the masses (which always translates to them and theirs).

And barring a revolution (which can ONLY come when the masses realize exactly WHO and WHAT are in control) they usually end up with more control, never less.

That’s the big picture, and unfortunately barring a few crazy short-lived experiments like the early US, that’s how it’s been through every form of government yet invented.

Only now for the first time since Rome, global control is achievable, if not already actually secured.

#127 dbg on 04.04.09 at 11:14 am

KC -“Don’t worry… pink slip is in your mailbox….”

I hope you weren’t wearing it.

By the way I am self employed and loving it.

#128 Dave on 04.04.09 at 2:48 pm

Back then cars were about $3000 but most families could afford only 1.

——————–

back then, most families had 1 bread winner and they bought stuff with money they had

#129 Dave on 04.04.09 at 2:56 pm

All the Bull on Bullion is humorus to say the least. Try carrying or eating it.
—————————-

The one time you keep a post short enough for people to want to read it, you come with something like this.

going back to biblical times, there was always a goldsmith that held gold for people and exchanged a receipt for their gold holdings. Even in some mass famine that you’ve seemed to embrace, there will always be different classes of people and some of which will be in a more advantageous position. Someone with an abundance of food, would exchange that abundance for an asset like gold for capital preservation.

You people say its either cash or food as if there’s no other medium. A bartering system, which is the worst case scenario, would have gold and silver amongst the resources traded.

can anyone suggest balance for crying out loud? A bit of cash, a bit of gold, etc to cover your asses. A balanced position would be the best position in times like this….just in case

#130 Future Expatriate on 04.04.09 at 5:12 pm

#129- Herein lies the problem with a “balanced” position, Dave.

As all paper is crashing, and as a fiat system, is inherently entirely worthless UNLESS you trust those ACTUALLY in power (not “elected” politicians but the bought and paid for whores of central bankers and the central banker puppetmasters themselves) with your life and the lives of your children, gold becomes not just an option, or a “hedge”, but an outright threat to the established system and their control.

So the paper pushers MUST denigrate it at every turn, because reality, created by deregulation and greed, is denigrating their paper at every turn.

If everyone, including the little investors, moved to gold en masse BEFORE THE ELITE LOCK IT ALL UP, the paper system built on blind faith in the benevolence of central bankers would crash. Not only that, their global control (through a global cyberspace fiat “currency”) would effectively be set back decades if not longer, as those who held more gold than their useless paper would have a level of independence and autonomy that would be extremely messy and require much violence and the exposure of overt totalitarianism to confiscate and destroy. The false front of “Democracy” would be exposed for the fascism it actually is, to everyone, and for all time. Inviting revolt. Can’t have that.

So the paper pushers and their paperholder victims will never acknowledge for a single second the importance of gold more than the proverbial 10% of a portfolio. As long as that is what most people ascribe to, they can be effectively wiped out at whim, en masse. Indeed, through driving the price of gold down via gold paper sales and their constant public derision of gold, most folks can be convinced effectively to sell what gold they do own, which consolidates it into wealthier and wealthier hands.

And the world thus easily herded into the next global Ponzi currency scheme and its attending middle and upper middle class wealth-destroying bubbles.

The oldest game in the world, even older than prostitution; the rich constantly eating the less rich because they are a threat to survival, and the resulting blowback, ad infinitum. Only this time they’ve finally figured out how to do it with little threat of blowback.

#131 Dave on 04.05.09 at 1:52 am

As all paper is crashing, and as a fiat system, is inherently entirely worthless UNLESS you trust those ACTUALLY in power (not “elected” politicians but the bought and paid for whores of central bankers and the central banker puppetmasters themselves) with your life and the lives of your children, gold becomes not just an option, or a “hedge”, but an outright threat to the established system and their control.

—————————————-

yeah, but the fact is: the masses have embraced a fiat currency. For now, that is the best way to purchase goods. So why abandon it totally? What if there isn’t some “awakening” towards fiat currencies?

a bit of precious metals, along with the more sound fiat currencies is the best way in my opinion

#132 charles on 04.05.09 at 7:12 am

http://www.calculatedriskblog.com/2009/04/inflation-vs-deflation.html

#133 Davinci on 04.05.09 at 9:26 am

You see gold bugs as black and your philosophy as white. I made a short video that sums up the truth about money that is undeniable.

http://www.youtube.com/watch?v=lH4-nW-01-E

“Gold in the hands of the public is an enemy of the state.” Adolf Hitler
“Paper money has had the effect in your State that it ever will have, to ruin commerce — oppress the honest, and open a door to every species of fraud and injustice.” George Washington

Prove those statements to be false.

#134 Chris in England on 04.05.09 at 6:59 pm

North Vancouver: ”…Chris, maybe you’d be happier living in a bunker next door to Garth’s.

Maybe, at least he has a generator.

#135 Future Expatriate on 04.06.09 at 6:22 am

#131- The masses have “embraced” a fiat currency because they are ignorant and listen to lying politicians and wall street. Educate them, and they’d flee from all paper and into gold and silver.

Once the US and CAD dollars crash, this argument WILL be moot.

#136 Esoteric on 04.09.09 at 1:42 am

Inflation isn’t the increase in price of assets. It is the increase in the money supply. People who naysay about inflation focus on the price of things. This is a distraction.

Also, I’d like to point out that energy prices haven’t dropped much. Food isn’t dropping at all. Just because home prices and equity prices have fallen through the floor doesn’t mean there isn’t inflation.

Once the economy stabilizes even marginally, the amount of money circulating in the system (20 trillion USD extra globally as you said Garth) will be chasing far fewer goods (production having been curtailed so badly during the recession)

That is a recipe for the explosion of prices of everything to the upside.