Of bullion & bubbles


Book-signing in Langley BC, after my lecture Sunday.

While my plane was not hijacked by a crazed Jamaican, the flight back from the Left Coast was not normal. So, thanks to another AirCan delay, I arrived way too bagged to blog.

But there are two topics I want to address: Why are people buying houses and shunning gold?

First, the metal.

Here’s an interesting comment, all fresh and aromatic: “My question,” says Davinci,  “is why do you hate gold?  Is it because you are/where a politician and it would make it more difficult to achieve a political agenda or is because you truly believe that your fellow man will do the right thing?   If it is the former don’t say so directly, do what all politicians do and answer the question without answering the question.  :) I hope you are right even though I have 98% of my money in PMs and have stored food and provisions to last. With that said there are only 2 out comes here you are right or I am right. The worse case scenario if you are right, is gold buys you the same things as it does today but you get less dollars. The worse case scenario if I am right is you have lots of dollars but are broke. This will not happen if government stops bailing out the wealth, do you see that happening?”

Actually, Davo, the worst case is the gold you are buying at $900 an ounce is worth $500 by the end of the year. So much then for having 98% of your net worth in one asset, which pays you no interest, no dividends, no capital gains – in fact, no income at all. You have to pay money to store it, you cannot insure it, and the price changes every hour.

As for the reason I am not a believer in gold (other than having a max of 10%, purely as an inflation hedge), it’s contained in this chart of the spot price of bullion over the past year. I mean, Leonardo baby, look at this puppy:


If there was ever a time in the course of men’s affairs when gold should have topsided, it’s now. Face it, we’ve just been through:
* A stock market collapse of epic proportions
* Bankruptcy of the entire Wall Street investment banking industry
* Failure of major banks like Washington Mutual and nationalization of others like Citibank and Royal Bank of Scotland.
* A collapse of interest rates to zero
* Destruction of the major industrial sector in the US – cars
* The printing of about $9 trillion in new Yankee dollars
* The worst economic downturn since the Thirties
* Rampant, nonstop, frightening unemployment
* Unprecedented government bailouts, and
* The discrediting not only of capitalism but the capitalists overseeing it.

And what has gold done? Diddly. The world has failed to see bullion as an alternative currency in this time of turmoil, financial crisis, increased money supply or the historic accumulation of debt. The metal has given a one-year return of zero, traded in a fairly narrow range and been in far less demand than guns and ammo. The US dollar has become even more of a global currency than ever and the safe haven for worried wealth.

Give it up. Long-term, gold’s finished. Buy oil.

Now, about those houses.


Here’s a note from Nancy:

“Thought I would share with you a recent experience (last week) we had with our son who is a newly minted graduate (2008) with a decent job in Toronto. He has a good sized (more than 30%) down payment. He has looked and is not interested in living in the the condo glass towers or massive condo townhouse developments of downtown Toronto. He felt he had finally found a prospect. A small (600 sq ft) home on a 15×120 lot in central Toronto with a short walk to subway and streetcar.  House was purchased in 2007 for $286000 which was $50,000 above the asking price of $236,000.  His Toronto realtor suggested that all detached homes were still selling well  in Toronto. She and her firm’s collegues had sold over 8 houses in the last week all of which went for 95% of the asking price. In consultation with us we figured the house was expensive for what you get but that 95% of the asking price of $299,900 or $285,000 might be the price one has to pay to live in Toronto in a detached home in a nice neighbourhood near downtown so we agreed with him and he contacted his agent to make an offer.

However the interest in the property was so great and the showings so fast and furious (over 10 the first day on the market) for this entry level property in the great location that the sellers agent decided to forgo the standard offer format and go straight to sealed bids with a less than 24 hour deadline. The house appeared to be in good conditon with a new kitchen and new appliances but it was still old and had been added onto at the rear – the roof line was odd and it’s condition could not be viewed from the street as well there was evidence of past leaking through the basement foundation walls. The ceiling height in the basement was a whole five foot 6 inches – not really usable and the only usable bathroom needed some work.  However the location was prime and the house was rare so we decided okay he should change directions and go the bid route and put in a bid of $285,000 with the very non negotiable condition of a house inspection. Anyways his agent balked at our proposal and said she would not even enter his bid – too low – house would go for at least $314,000. We thought she was crazy and he did not submit a higher bid.

Well she was not crazy.  She was right!   It went for $328,000 with no conditions!!! It was on the market for 48 hours!!!

From $236,000 to $328,000 in less than two years!! What the heck? The bubble seems to be growing!!!”

Hey, Nancy, what can I say? Your boy dodged a bullet. More than $325,000 for a house on 15 feet of dirt with a damp cellar and a bus depot bathroom? This is exactly what happens when desperate governments collapse interest rates to nothing, when irresponsible realtors pump and dump, and when inexperienced first-time buyers are led to slaughter by peer pressure and media whoring.

Yes, there is a mini-bubble right now. In the first 15 days of April 3,681 houses sold in Toronto, up 30% over March. The average sale price of $383,000 was down just 5% from a year ago. The local real estate board says this means prices have finally stabilized.

What it actually means: New victims.


#1 Investor on 04.20.09 at 4:52 pm

Ah, Toronto real estate is experiencing a dead cat bounce. Remember people houses have a hard time landing on four feet once they go down.

#2 lgre on 04.20.09 at 4:56 pm

I don’t know how you do it Garth, my patience would of run out long time ago..good job and keep it up, someone needs to.

#3 905er & Spouse on 04.20.09 at 5:04 pm

It sounds like that home would become a sinkhole for money within a short time! Eeeeek, sounds expensive for what must be a one bedroom shack (sorry!). There are much better buys that can be had in the greater GTA also in decent neighbourhoods. And it will get even better of course. A new grad, what’s the rush! Enjoy the unattached and free life of a renter. Take your time to decide where to live. Who knows, maybe in a few years there will be other considerations to think about by then that will lead him somewhere else anyways, ie: spouse, children, schools etc.

#4 DG on 04.20.09 at 5:07 pm

What I just don’t understand is why people take advice about anything from realtors. Sure, some of them are nice, competent people, but they generally have minimal education or business experience outside of the paper pushing involved in buying and selling homes.

And yet most people in Toronto would rather take their realtor’s pseudo advice and dismiss any negative analysis of the economy as misguided fearmongering. Is it a generational thing? Has my generation become incapable of hearing points of view that don’t reinforce our existing behaviours?

#5 Investx on 04.20.09 at 5:08 pm

“If there was ever a time in the course of men’s affairs when gold should have topsided, it’s now. ”

Great point, Garth.

#6 POL-CAN on 04.20.09 at 5:12 pm

Funny how it all works….

Deat cat bounce in housing sales probably goosed by the stock market rally. Maybe not enough people felt the economic pain yet? Maybe they belive the MSM bottom calls in both the housing and stocks? Sheep….

Either way…. all just in time for the next leg down in said stock market (-3.3 % today alone).

#7 LS on 04.20.09 at 5:13 pm

>> What it actually means: New victims.

God I hope you’re right Garth. All logic goes against this afterbirth of the housing bubble, and yet there it is, happening. I want to get out of renting our apartment, and I don’t expect to make money on a house, but the current prices are just stupid in Victoria. It’s gotta come down, or I’ll be stuck in an apartment with screaming babies next door forever. Here’s hoping.

#8 CinToronto on 04.20.09 at 5:17 pm

Regardless, I am still upset about the spring thaw in the TO housing market (and seemingly elsewhere), even if it is temporary. I have been waiting to buy a house for 4 years, and I believe this market would have crashed ages ago had it not been for (a) the introduction of the 40 year mortgage a few years ago, and now (b) the reduction of the 5-year rate to below 4%. Canada will seemingly do anything to keep its housing market afloat. I can wait, but I’m extremely pissed off. I’ll buy abroad before I buy a piece of crap house in TO for $400,000.

#9 Real Estate Deal or No Deal on 04.20.09 at 5:17 pm

The young man can be glad he didn’t get that house … sounded like a lot of money for nothing to speak of … he should live with mom for a year and then get something much nicer.

Garth, thanks for clearing up your thoughts on Gold … after reading your book … I kind of thought you were a Gold Bug … but you are right … with the kind of pressure happening right now and gold not doing much …

Great Book … After the Crash …

#10 Comfortable in a coma on 04.20.09 at 5:26 pm

A fifteen foot lot is a parking space, not a house.
This sounds so much like the last initial offerings during the Dot Com bust. We couldn’t wait to get some in case we missed out. But we were just buying ideas with no company behind them.

If only someone had cut up our credit cards for us!

#11 CM on 04.20.09 at 5:35 pm

Last month in the U.S., the sale of “consumer durables” went up. I thought at the time that people were trying to make sure that they could get hold of things they needed (e.g. a washing machine) while their money could still buy something and also while the articles were actually available.

Is it possible people are thinking this way about houses?

#12 Toronto C9 Renter on 04.20.09 at 5:40 pm

“..gold’s finished. Buy oil.”

Garth, ironic that you picked today to make that statement! 9% drop in oil today, man did that hurt!!

Having said that I agree with your sentiment — oil is a good bet

But 9% in one day! Ouch!!

In this environment one day is meaningless. Now ask me about monthly car sales in China. — Garth

#13 Steve Tanner on 04.20.09 at 5:45 pm

Garth when you coming in Calgary??

When some cowboy’s got the stones to invite me. — Garth

#14 @Garth 2 on 04.20.09 at 5:46 pm

Garth, kudos on acknowledging that Toronto is not trending downwards presently. I have tried to point out that your advice to give up on selling in early spring was not right (at least for T.O.) given the circumstances. Perhaps you meant homes 600K and up only (which would surprise me… I thought you were all for the little people).

Anyone with modest real estate in Toronto who sold out in 2007 is probably cursing themselves (and by extension… this blog). If prices eclipse 2008, there could be a lot of unhappy “unwealthy renters” posting here.

Inventory comes up here a lot, so I wonder: What is the inventory of people previously priced out Toronto? Different from the late 80’s run up, home price inflation has been more drawn out, and deceptively slower, meaning that “sidelined new home buyer inventory” may have been piling up and is now emptying into the local market. But perhaps I’m wrong. To me, it would be an interesting question to try to answer…

So finally, Garth, a question: How long will this *new* bubble last?

Until it ends. Jump in. — Garth

#15 Duddly on 04.20.09 at 5:58 pm

Friend of mine just paid over $400,000 for a detached place in north-east Toronto. Nice enough and a good size for a family of four, but it needs a fair bit of work and isn’t particularly close to anything. Buyer’s market my butt.

#16 . . . fried eggs and spam . . . on 04.20.09 at 6:10 pm

Interesting to see various things happening almost simultaneously. Garth’s current post about gold now — see Mish’s first para. . . .

More Greater Fools For Cannon Fodder In Trawnna, The Former Centre Of The Universe.

Nanaimo, B.C., sitting close to the San Andreas Fault, is now the centre. Neptune, the Sun, Jupiter, etc. all revolve around it!

Different websites have all said — within the past six months — that gold could hit a low of US$600 / oz., the opposite saying that it may reach between $2K – $5K / oz., so 10-15% gold, same amount in silver seems fair to middling.

“Buy oil.” — If it reaches beyond last summer’s levels — it may, ‘coz really weird and strange things are happening now — and settles around US$350-500 brl., how soon before electric / hydrogen and other modes of energy suddenly become available?

#17 john m on 04.20.09 at 6:10 pm

“Actually, no. This is after the crash. This is the damage and debris, the fallout and the failure, the headline-grabbing, shocking consequences of an accident already occurred”………..I was just re-reading one of your posts Garth and you are a very smart man……the dynamics of the crash which has already occurred are the paving stones for our future and the aftershocks will destroy everyone who gambles on a quick recovery.Trillions of dollars in wealth have disappeared that took generations to achieve and will take more generations to recover in a much more difficult economy.The false hopes of the fast buck artists and our governments are doing nothing more than adding to the destruction of many more peoples lives.IMO

#18 Bulls eye on 04.20.09 at 6:15 pm

Let’s see $328,000.00 = 3280, 100 dollar bills. Imagine asking yourself to wallpaper that home in 100 dollar bills and then ask yourself how good of a deal you have. Just a thought –

#19 North Vancouver Citizen's Analyst on 04.20.09 at 6:20 pm

Like a fine Swiss timepiece, Martin Armstrong has once again nailed a major turning point right to the day.


Goodbye, stock market rally – hello DOW 3500!
See you in June 2011 when we hit bottom.

#20 Sail1 on 04.20.09 at 6:21 pm

#4 DG

You just can’t take 12 years of progressive Re market and suddenly shut it off. If an individual’s dream is to have a home regardless of the consequences, no blog, government, or agent can tell them otherwise.
Let’s not forget new emigrants in Toronto are also a wonderful equation for Re.

#21 eddy on 04.20.09 at 6:26 pm

this is a normal spring flurry of activity. the lady’s son got lucky. sit tight and wait for june, july and august- seasonally slow months. walk from multiple offers, if your agent Refuses to type up your low offer- immediately insist on a release from your buyer agency agreement (if you signed one)then get another agent.

#22 905er & Spouse on 04.20.09 at 6:28 pm

One thing further to my last post. If he were to have bought this house and finds out it isn’t suitable in a few years time (needs more bedrooms for growing family, too small etc) he will likely be forced to sell at a loss. What A terrible position to be. He will likely marry and want a bigger place soon.

I have a good friends in their mid 30s who recently bought a townhouse in the 400s in the GTA as they were having a baby. It has no greenspace (does an 8X8 deck count as a backyard?), the layout is completely incompatible with family life (bedrooms on different floors), there is no park nearby, they are in the middle of a big long complex. Schools were not considered. They could sell and move somewhere more suitable but would have to take a loss. These homes have already depreciated since they moved in just recently. They will have to make do and it is far from ideal. Young buyers should be very careful, do all due diligence and think LONG TERM.

#23 David Bakody on 04.20.09 at 6:29 pm

Well Nancy what can I say ….. “If in doubt don’t” your son just won the lotto…. to spend hard earned/saved money on anything that does not have true value is mistake in any market. All good things come to those who have the time and patience to wait. Tell him to keep his money safe and enjoy life. Good selections Garth.

Many years ago I found a beautiful quarter horse for sale at the Diamond “R” Ranch, he was a too spirited as a lead pony at Woodbine and so was sold to a dealer …. this horse could stop on a dime and give you 5 cents change. Boys oh boys I wanted this horse …. I took my Dad and big brother along to help close the deal, but he was just too much money even with some help from my Dad, so I passed. Johnny Royal (Owner of the “R”) then Johnny told me something I never forgot, “Do not worry about it David, for no matter how much you like a horse there is always another one that comes along that catches your eye …. and that gentlemen is what makes horse trading such a great business! And that is how I came to get “Smoky” the best horse I ever owned at a better than fair price some time after when I was not even looking.

#24 Down South on 04.20.09 at 6:45 pm

Come to Windsor. 1200 sq.ft. house, quiet cul-de-sac, walk to the new arena, shopping, schools (public/catholic, elementary/secondary) on main E/W transit route $48,500.

B.Y.O.E (Bring Your Own Employment)

#25 @Garth 2 on 04.20.09 at 6:46 pm

Reading between the lines is fun…

Are we at two or three unwealthy TO renters so far?

As unwelcome as my commentary may be, it is supposed to be to the point, and not disrespectful. If the stock market corrects again, and takes that next nasty leg down, it will be one rough ride again. But until then, I’ll keep counting the discontented as votes to the contrary—all the while trying to ignore that Garth actually bought property this year.

Perhaps I should ask, when is it a good time to buy real estate?

#26 Too Old Bob$ on 04.20.09 at 6:50 pm

” It went for $328,000 with no conditions!!! ”

Wow! 15×120 lot. I’m guessing house worth about $60000 (with water problems) and lot $268000. Now you see why people commute from the suburbs.

In Calgary about a year ago they were selling houses like this for about $400 – 500K. Then they would come in and knock down the old house just so they could build something new. I guess the area was desirable.

I just can’t imagine 15 ft. though. My lot is 50 x 130. That house must only be 11 ft. wide or do they allow you to build up to the property line?
Oh! well small lot, less yard work.

#27 Da HK Kid on 04.20.09 at 6:55 pm

Here’s the skinny, simply served and ready to eat! And proof read!

Everyone who wants to buy now and not take the clear advise that Garth is offering along with the countless posters supporting the same subject on RE being overblown and global correction on tap for the next X years do the following:

Go out and buy that house and risk your future, there will be no consequences!

Parents who are helping there children with advise, go ahead and commit them to rolling the dice right out of the gate on their futures, you can always bail them out when your house value hits the skids as well.

For those of you who flaunt your stupidity openly on this blog, I wont even wish you good luck in your home buying euphoric venture, only that someone will be picking your bones in the years to come.

As posted a few weeks ago, I commend Garth on his efforts as it is very tough trying to save the flock one body at a time. Some people just dont want to be saved!

It’s okay 5% of them is really all is needed.

#28 North Vancouver Citizen Jr. on 04.20.09 at 6:59 pm

Citizens of North America are shocked that “Paper Money”, “Gold”, “RRSP’s” & “Mutual Funds” have been very prone, perhaps becoming worthless….they then realize solid home shelters reflect physical value and their own last stand bunker.

…I say “Yikes” to Toronto…overpopulated w/ a dying manufacturing base adjacent to Dead or Dying U.S. Trading States.

and now you know why Vancouver is so expensive….Location, Location, Location….to Raw Materials, Finance, Trading Partners, Leisure and Growing World Culture.

…Torontonians/Ontarians may be wise to cash in and move to nearby similarly, maybe even cheaper priced Vancouver locales than Toronto.

#29 squidly77 on 04.20.09 at 7:02 pm

The stress tests were conducted to determine how well, if at all, the top 19 banks in the USA could withstand further or future economic hardship

Of the top nineteen (19) banks in the nation, sixteen (16) are already technically insolvent.


if this turns out to be true..look out
the downward spiral would accelerate into an all out free fall

#30 Dale on 04.20.09 at 7:07 pm

Whereas I’d be a little concerned about the young guys Realtor not even putting his offer forward, they should all be glad that they dodged a bullet on this one.

Buy a home without a home inspection? Never! Paying over list with no conditions?? Never ever! Heck, I bought my own home without one (town with condo elements) and boy do I regret it.

Granted, there were things that the previous owner didn’t disclose and even went to efforts to hide. A lazy lawyer on my side didn’t help much, but I foolishly thought, it’s less than 4 years old, what could possibly be wrong with it? Well, the AC for one, which I had replaced today in torrential rain. Though in my defense, a home Inspector wouldn’t have checked that it worked in the middle of winter anyway.

Even if the seller warrants that everything is in good working order, I’d still get a home inspection. A persons word isn’t what it used to be.

#31 Canned Goods and Buckshot on 04.20.09 at 7:13 pm

Yes siree. It’s frustrating to watch the stats month to month and observe the greater fools and the housing market defy common sense.

My wife and I have been waiting awhile to buy a acreage or a city lot with a little more space. Nothing pretentious, just a little more room for the kids and parents of soon to be teenagers.

I didn’t put too much effort into analysis (after all I was buying Garth’s books and checking this website), but really, this “mini-bubble” shouldn’t have been too hard to anticipate.

Realestate, for many people, has been a stable store of accumulated wealth for a long time. It still has that reputation though that will change. In the face of the debacle on Wall St and the stock meltdown, realestate still shines for the kids who grew up in nice 3 or 4 bedroom single detached homes in the suburbs. Especially when the boomers are willing to help Johnny or Jane.

I don’t wish to see people lose, but I don’t want to play the same game as them. The plump and dumpers are still doing their thing. But what should we have expected from them? Roll over and die? Of course not. Even the Romans were still partying hard even as the barbarian hordes closed in.

#32 Zoronqueen on 04.20.09 at 7:18 pm


I hope it’s a dead cat bounce. Otherwise I will be kicking myself. I sold in March 12 2009 for 280K, 55K under assessment, in Edmonton. Granted the inventory is still high and the house I had, 1340sq ft in 30ft lot was in a mediocere location, Ellerslie Crossing.

Same thing happening in Edmonton where you hear of buyers going about 10-20K above listing. I have 2 co-workers, one first time and the other a mover uper who believe in the MSM hype…

I am still trying to get money back from my realtor who promised no commission. My lawyer says give them a deadline then go to small claims. But I wonder if it’s worth it for $2700

Anyways I’m a bit of a gold bug myself. Don’t have large amounts but feel it’s comforting to have the physical gold, granted it’s still in as safety deposit box.

Thanks for the advise Garth, the price of gold is too high right now and I’m waiting on the sidelines to see what happens cause I definately would love to own some.

#33 Zoronqueen on 04.20.09 at 7:20 pm

what I meant to say is I would love to own some more gold….

#34 dd on 04.20.09 at 7:40 pm

#7 LS

” It’s gotta come down, or I’ll be stuck in an apartment with screaming babies next door forever. Here’s hoping.”

Change apartments and wait for the decrease. You don’t believe? Look south.

#35 dd on 04.20.09 at 7:44 pm


Inflation will be a non issues until GDP is running at full (Y).


#36 dd on 04.20.09 at 7:47 pm

Toronto C9 Renter

“Garth, ironic that you picked today to make that statement! 9% drop in oil today, man did that hurt!!”

We can only hope in the short run that oil drops back to $35.00 a barrel. Load em up.

#37 conan on 04.20.09 at 7:49 pm

Garth, do you have any details to share on your visit to O town? Are you doing the signed copies of Sheeple thing at the writers fest?

Yes. — Garth

#38 dd on 04.20.09 at 7:50 pm

#15 . . . fried eggs and spam . . .

“Buy oil.” .. and settles around US$350-500 brl., how soon before electric / hydrogen and other modes of energy suddenly become available”

If it settles at that price … we will have another recession or depression.

#39 Some Guy. on 04.20.09 at 7:53 pm

How does one properly invest in oil for the long run? Pure crude is only bought on 1-3 month futures no?

Anyone with this knowledge? Ive always been confused in how to play the long run game with oil.

#40 dd on 04.20.09 at 7:55 pm

#28 squidly77

“The stress tests were conducted to determine how well, if at all, the top 19 banks in the USA could withstand further or future economic hardship”

Bet ya that this is not factored into the stock market.

#41 Grumpydawgs on 04.20.09 at 8:00 pm


Collapse of the real estate bubble and related phony credit economy is at the heart of a deflationary enviornment in Spain. The bubble created a false economy which is now in correction due to the general recognition that money supply was falsely based on credit and not fundamental value. Prices on SFH and foriegn owned condo’s have been in free fall for some time but now the inflation left over has prices of excess inventory coming down as well. A lack of fresh bubble money has people spending less and demanding lower prices by forcing competition and also pushing retailers to ask less. One assumes that they are in turn forcing wholesalers to do the same, for the same reason.

I say ” GO Espana”. The economic regime we are currently experiancing has inflated for exactly the same reasons. I postulate that the ‘deflation’ scenario that is being used to frighten consumers and citizens is the best thing that could happen in Canada. Why should the only entity to profit from lower commodity prices be the major investors such as soveriegn wealth funds, who are buying cheap while our own government insists on keeping retail prices high.

The “bubble’ was a false economy, the governments rode the fat gravy train for all it was worth giving themselves fat bonuses and piggish perks. Lower prices will will lower revenues for government and it will force one of two things to happen, either the government comes back to earth and lives within it’s means or it forcfully manipulates the prices higher in order to maintain the tax regime and forces an eventual breakdown of the middle class lifestyle and risks social revolution.

House prices are too high, bring them down by letting them fall. Consumer prices are astronomical, let them fall by not artificially juicing the market to boost government revenues.

Spain is just one of many bubble economies which is imploding, Hawaii is another. When a country has to shake off the artificiality of the bubble economics thrust upon it by an irresposible government the value of ‘units’ becomes more apprarent. It get gets down to what the average local person can afford to pay. Canada is still stuck on raising taxes and borrowing money, but seriously, how long can this facade last before we all have to look in the mirror and admit that the bubble economy was unsustainable and it was nice while it lasted, but…. it’s over.

#42 lgre on 04.20.09 at 8:01 pm

Da HK Kid – nicely said, some people on the blog and the real world need to wake up and smell the roses.

I said this before and I’ll say it again, until the U.S gets it’s sh*t in gear, Canada is going nowhere..the problem, the U.S is sinking fast. Flaherty is still singing his song about the ‘great Canadian bank’s’. Like it makes a difference.

The kid got lucky and should be thankful, but something tells me he will be buying very shortly, over asking.

#43 miketheengineer on 04.20.09 at 8:16 pm

Grow a 100lbs of potatoes in a 4×4 foot space.

Food for thought:

Imagine if everyone in GTA had one or 2 of these in their back yards…a bet we could feed a lot of people.


I hate to see people go hungry. Home depot as “bits” of lumber that they sell for a 1 or 2 if you look around. I don’t think it would cost much to build one.

The first year would be a wash, cost versus product, unless the soil/compost was for free, and you had the lumber just sitting around. The second year on would be the pay back.

Just some thoughts.

#44 Chris in England at the moment on 04.20.09 at 8:22 pm

Nice shiny hair Garth!

I always travel with my hairdresser. — Garth

#45 Spencer Baxter on 04.20.09 at 8:24 pm

Garth, I think your advice about investing in oil rather than gold is right on the money. As I alluded to in an earler post on ‘xurbia’, if there is a major war in the mid-east by the end of summer, oil prices will skyrocket very quickly due to the dangers to oil tankers and supply disruptions in the Arab countries. In which event we may be looking at a situation here similar to the 1973-74 oil crisis.

#46 Midas on 04.20.09 at 8:38 pm

All that glitters is not gold; ONLY GOLD IS GOLD. It cannot be counterfeited, it cannot be manufactured in China and it will always retain its value even if the counterfeit dollars and paper currencies its priced in fluctuate day to day, and will eventually not be fit to be used as toilet paper. Gold will have its day; maybe even by the end of this year. BTW your chart is just as flawed as your reasoning; if the FED had not kept the banking system alive on life support gold would be priced in 5 figures already. Where would the stock market be without these trillions? Zero perhaps! However that gig of pumping trillions into a bottomless pit will not save the day and only gold and silver will be left standing in the end. Faith in paper will evaporate sooner than you think and it is mere faith that dupes people into thinking of paper as money. All paper will eventually go to its real value – zero! Keep investing in stocks, bonds, treasuries, cash and good luck!

You guys are delusional. — Garth

#47 HalifaxFamily on 04.20.09 at 8:44 pm

Just spoke to a friend in the renovation/materials supply business. He says that things are crazy here in Halifax. Walking down our street in Halifax suggests that there is no recession. At least three houses have huge garbage sleds/bins outside.

They perceive the government rebate as doing something to spur this. I also think it’s because interest rates are low.

Something is REALLY screwy… and we’re hoping to resist so that we don’t have to fight for expensive renovation labour with everyone else who can ‘afford’ things with low rates. Patience is so hard, especially with cash ready in hand.

Are we delusional in Halifax, or is there really this much cash floating around? We shall see!

#48 Dali on 04.20.09 at 8:56 pm

The U.S. Debt increases by $1,000,000.00 every 10 seconds. Scroll down and look to the right.

U.S. Debt

#49 ts harpoon on 04.20.09 at 9:02 pm

Pay up or get OUT.


Mr. Turner: Put some gaz in your HOG and drive/hurry up to Ottawa Town. We’ll buy ya lunch at the Parliamentary Cafeteria…We’ll put’er on Stephens’ tab.

#50 Basil Fawlty on 04.20.09 at 9:03 pm

“If there was ever a time in the course of men’s affairs when gold should have topsided, it’s now. Face it, we’ve just been through:”
Most of the factors mentioned on this list are recessionary and gold is not a safe haven for a recession. It is a safe haven for inflation and currency risks. Therefore, it would not be suprising for gold to go down under current circumstances as deflation is occuring and the trillions printed have barely left the banks.
“The metal has given a one-year return of zero” Good grief, what investment class is positive over the last year? Over the last nine years gold ranks near the top of investments. Garth are you cherry picking here?
Additionally, over the last year the demand for gold bars and coins has never been higher with shortages and difficulties in making purchases. At the same time, hedge funds have been reducing their positions in gold options and futures to make margin payments, which has put downward pressure on price, while physical demand is strong. These margin calls have also helped put upward pressure on the US dollar
“Give it up. Long-term, gold’s finished.” This is rather extreme based on the evidence presented.

#51 Argentum Aurum on 04.20.09 at 9:04 pm


I don’t think oil fared much better than gold, going from $150 to almost $30 a barrel (now close to $50/barrel), based on 1 year performance. 1 year is not long enough to confirm a hypothesis.

While I wouldn’t hold 98% of my net worth in gold, I do think that gold is a better hedge against financial Armageddon than inflation. I can also pay for stuff – I can’t lug oil with me wherever I go.

It’s interesting that 480 tons of gold are being sold on the market – wouldn’t that bring the price down?

The reason oil will fly is rust as well, not just high demand – the infrastructure needs to be fixed.

The reason gold will fly is because gold is money, not an investment – you only maintain the purchasing power.

I aim for 15-20% of my net worth in gold and silver – it is nobody’s liability, and I am being my own central banker. Food reserves I read are now the lowest in the last 50 years. Food, oil/energy, water and precious metals are going to be the next bull market.

I am glad you brought the bullion topic up, and I appreciate the time and effort you put in the blog(s)- education is the key, differences of opinion are always going to exist.

#52 ts harpoon on 04.20.09 at 9:13 pm

HUH? You want to talk about OIL?

The subject of Oil must begin with a clear understanding of what it is, how it came to be, and where it is headed.

Suggested reading (Authors): Matt Simmons. Colin J. Campbell. Keneth Deffeyes. Jeremy Legget. James Howard Kunstler. Albert Bartlett. Senator Bartlett…

Start here: http://www.energybulletin.net/node/48713

Biggest recent earnings? EXXON MOBIL!!!!!!!

#53 JamaicanGal on 04.20.09 at 9:16 pm

“While my plane was not hijacked by a crazed Jamaican, the flight back from the Left Coast was not normal.”

Haha….This recession will leave a lot more loons in its wake….

#54 Real Estate Deal or No Deal on 04.20.09 at 9:21 pm

Even dinosaurs were giving birth as the Ice Age approached

… they had no idea what was about to happen.

#55 $fromA$ia on 04.20.09 at 9:22 pm

Canadian bank stoks lose 2.5-4% on the day, gold up $21.

Hmmm…. compare printed money (fluff) to yellow shiney stuff.

Bank stocks have improved over 20% in a month. I did not hear you comment on that. — Garth

your bearish comment on gold on this thread is going to come back and bight you on the A$$. :P

I hope it goes to $500/oz so I can buy more!

Canadian banks,I wrote a couple weeks ago are doing well, I just warned od a div. cut.

#56 $fromA$ia on 04.20.09 at 9:22 pm

bite, sorry

#57 gold bugger on 04.20.09 at 9:24 pm

DG whines about realtors: “…they generally have minimal education or business experience outside of the paper pushing involved in buying and selling homes.”

OK, DG. What do you do? And what are your qualifications? This is a serious question. Man up.

@Garth: Gold has a 400% return in the past 10 years. Name one thing that has done as well. Just one.

Politicians can always be expected to disparage gold. It would force them to be honest, which is the last thing on their agenda.

You won’t make gold go up by running me down. — Garth

#58 Eduardo on 04.20.09 at 9:56 pm


Gold hasn’t gone up because people have run to treasuries instead because they didn’t want it to get caught in the “commodity downturn” considering gold is a barbarous relic.

It will go up shortly. It will be back over 1000 and all of us gold holders will make 12% from todays close on something that “earns no return” other than the 400% previously mentioned… that’s why you hold gold.

You know how much I like oil too though Garth, realistically people should hold gold, oil and agriculture… and property in Alberta.

Purely speculative, but obviously addictive. — Garth

#59 Coho on 04.20.09 at 10:12 pm

Owning or renting:

Either way we pay way too much. Those at the top of the financial pyramid have designed things in such a way that people are slaves to the roof over their head, their job, and to the car or truck that gets them to their job.

And we often hear comments that we’re lucky to even have a job to pay for these inflated transportation and shelter costs. Such a troubled world we live in. Many scramble just to survive. Other’s with means never seem to have enough and could write books about how to live the ultimate hedonistic lifestyle. Then of course almost half the world’s population is either poverty stricken, starving, diseased, or malnourished for no good reason other than the avarice of exploitative corporations and their installed puppet bananna republic presidents.

It’s interesting how governments the world over are willing to print trillions of new fiat currency to prop up markets and banks…in essence to continue the ponzi scheme, yet can’t be bothered to elevate the impoverished nations and people of this world. Wasn’t that one of the reasons explained for terrorism, that “religious extremists” find fertile ground for recruitment in the ranks of the the hopeless and despair poor people of this world. If there was any truth behind it, which I doubt, then why don’t they ‘buy a round” for the poor while they’re at the frigging printing machine? We’re paying for it (as will our children and grandchildren), after all. Shouldn’t we feed some human beings while we’re at it? Unfortunately, we have no say in how “our money” is being spent. Such is our pseudo-democracy.

Is it reasonable that an average person pay anywhere from $1500 to $2500 per month for shelter and operating a vehicle? It’s no mystery why these bubbles are initiated by the ruling elite and their politician and bankster enablers. When most of one’s take home pay is mopped up by shelter and transport costs, there needs to be a basis for extending credit so people can purchase things they need, or just simply “want” that they wouldn’t otherwise be able to afford. No money left over for food, college tuition for the kids, trips, or LCD TV’s? No problem — enter inflated house prices, stocks, etc as collateral against 20K, 50K, 100K lines of credit.

Yes, everything is cyclical. In every generation, the assets, wealth or pseudo-wealth of that generation gets taken away by “market flucuations” etc, and at the right time, is bought for pennies on the dollar by the few (elite/insiders) who have money.

#60 North Vancouver Citizen Jr. on 04.20.09 at 10:19 pm

So the world continues to manufacture medium, light and heavy goods…(eg: steel, autos, fridges, tables & beds) but no one is really buying’em.

…raw material prices will continue to fall…because all the end users in the world have either cut back or just stopped buying’em.

So what is inevitably the next shoe to drop?

…Wars…Protectionism, probably both…

What can any Canadian do to prepare?

…Kill yourself, live in an underground bunker or move to Vancouver, the next Financial/Trade/Cultural/Leisure capital of the World.

…If you haven’t heard it anywhere else, you’re hearing it here first…

#61 Midas on 04.20.09 at 10:23 pm

#5 Investx wrote: “If there was ever a time in the course of men’s affairs when gold should have topsided, it’s now. ” Great point, Garth.

Well friend you seem to be making a great big assumption in your argument that the market has hit bottom and gold has failed to live up to its expectations. If you are right about the market hitting bottom then there’s argument on this end but if it ain’t…

The economy is like an airliner that is going to crash, the engines lost power and it dropped from 35,000 ft. to 20,000 ft. Momentarily one of the engines has started up again and the pilot has managed to straighten the plane but only momentarily. Let us all hold judgment on gold, oil, cash until a bottom is firmly in place. I am of the opinion as are many other ‘gold bugs’ that the real value of gold will only become apparent when the real value of paper money becomes apparent; that revelation is a little bit further down the road, so let’s wait and see. Garth’s charts notwithstanding Gold was one of the few if not the only investment that finished in positive territory last year; no reason why it will not do better this year. Again’ let’s wait and see!

#62 Eduardo on 04.20.09 at 10:23 pm


Someone mentioned the IMF selling 480 tonnes of gold?

Well looksy at what happened last times they threatened to sell or sold

#63 Eduardo on 04.20.09 at 10:25 pm

“purely speculative, but obviously addictive”

Did you mean this website?

#64 Anon on 04.20.09 at 10:37 pm

With respect to Toronto real estate (rather than the GTA as a whole), I think it is interesting to look at the mid-month numbers and spin offered up by TREB recently.

Although there was only a 1 % drop in sales compared to this time last year, the average price was still down 9%. (Again, this is specific to the 416 not 905.)

“In lock-step with the favorable March results, resale housing market conditions in the first half of
April were markedly improved compared to the winter time,” said TREB President Maureen

TREB is still forced to make useless comparisons to the Winter months, where they are traditionally slower than the spring months. Who cares that sales are up in April compared to December and January? It is expected.

I could comment how sales of air conditioning units are up 1000% in June compared to January sales. Only a fool or unfortunate misled soul would bite at such obvious spin.

I would suspect that even in declining markets, there will be a hiccup or two upwards despite the obvious downward trend.

#65 GenXer on 04.20.09 at 10:43 pm

How does a new graduate get 30% to put down on a $300k house? Eating KD every night got us through University breaking even – and tuitions have gone up over 60% since then…

#66 OttawaMike on 04.20.09 at 10:43 pm

Warren Buffet has said the same type of things about gold as Garth Turner.
“It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”
(1998 Harvard speech)

#67 dd on 04.20.09 at 10:56 pm

#56 gold bugger

“@Garth: Gold has a 400% return in the past 10 years. Name one thing that has done as well. Just one.”

So. The question is what will return 400% in the next 10 years?

#68 Paul Fist In Your Face on 04.20.09 at 10:56 pm

Good little bit on gold. IMF is the worlds third largest holder of gold, behind US and Germany. China doesn’t have enough gold to fill a wheel barrow. All of China’s reserve is in paper money and promissory notes [US treasuries]. That is China’s big problem. If they move to protect their cash they will tank the dollar and make their cash worthless. They have allready discounted their US Treasuries as non-recoverable. 2 trillion-poof. If they buy gold they loose their cash position for a possibly dead asset. But then again they maybe on to something. “Keep all your gold fools,it IS the world’s biggest dead asset” Maybe that’s why they have been turning their cash into something usable like copper and aluminum and oil or something eatable.
The IMF dumping gold -and doing it slowly over many years will keep the price down and moderate. Something had to be done to save what is left of the value of paper assets. If gold were to take off or interest rates on savings spike, all the cash will leave the stock market in a New York minute. Or so the perception is. On that note,wait till GM goes broke. Or maybe nothing will happen. Enough rumors and hints have been dropped over the last few months that the market may have already discounted this and it will have no effect. In fact when it does happen the market may rally as this monkey is now off its back. In the mean time gold moves side ways for a long time. Interesting times we live in.


#69 $fromA$ia on 04.20.09 at 11:19 pm

Garth forget the hair desser, shave your head and wear a tupie like flaherty.

#70 Nicholas P on 04.20.09 at 11:26 pm

This is what the “Sheeple” should be exposed to. Take it to the next level Garth!


Harper is irrelevant… the real players can be seen here:


Wake-up Sheeple!!!

#71 Irene on 04.20.09 at 11:34 pm

Nice shiny hair Garth!

I always travel with my hairdresser. — Garth

Too funny Garth. Are you looking to replace Stevie wonder wanna be Obama? We can ony wish. sigh

#72 Grumpydawgs on 04.20.09 at 11:48 pm

I think that gold hasn’t gone up because the PTB doesn’t want thier sales pitch interrupted. ” Optimism, Confidence blah blah blah, wouldn’t sell well with gold showing up the trick. The gold guru Gordon Brown (LOL) has been lobbying the IMF to sell all the gold held within it’s mandate. The Institutional paper shorts have kept the physical market in chains. And yet people have been buying record amounts of physical gold. It’s not a matter of gold being dead, it’s a matter of when it will ressurect itself as a market force as opposed to the Keynsian socialism which id falling apart now. Paper is worthless, whats next, glass beads?

Gold is a barbaric relic, so are 100 year mortgages in Japan.

#73 dd on 04.20.09 at 11:55 pm

$#50 Argentum Aurum

“It’s interesting that 480 tons of gold are being sold on the market – wouldn’t that bring the price down?”

YA … the IMF is selling gold. It adds instability to the market. If gold goes higher central banks will sell more to the market to keep the price lower or volatile. All governments will defend their FIAT currency at the cost of gold. It is a dangerous game.

#74 Big Picture Guy on 04.21.09 at 12:27 am

The same very same gold proponents will magically say they sold before gold takes a dump.

#75 Future Expatriate on 04.21.09 at 12:31 am

Cold fusion is back with a vengeance… gold will grow, but polonium will probably go through the roof.

60 minutes report… dig the rabid attack coments from oil investors and oilmen. Hysterical. Rabid.

As for oil? Forget it. Time to flush it and the GD (literally) Mideast Empire with it.

Good riddance to bad rubbish. Sometimes you just have to flush the damn toilet, Garth.

#76 Future Expatriate on 04.21.09 at 12:34 am

Wow, paper sure did a headfirst dive today… any bets that the sucker bear market rally is finally over?

Wait until the commercial real estate resets and crashes and burns.

#77 Happy Renter in North Van on 04.21.09 at 12:49 am

Didn’t Nancy’s realtor breach her duty? Aren’t realtors supposed to act as an agent and are obligated to submit any valid offer? The fact she refused to submit an offer on her son’s behalf mean she failed to act according to her contract?

#78 Tony on 04.21.09 at 1:46 am

Sounds like the banks in the Toronto area are back giving mortgages to welfare recipients after a brief respite.

#79 Dave on 04.21.09 at 1:57 am

Garth, sometimes you’re so far behind you think you’re in first. Why didn’t you show statistics for what gold has done from 2000-2009? Your assumptions as to why the price of gold should have skyrocketed are completely wrong.

The economy was humming the from 2002-2007 right? well, so was gold. Look for gold to rise when inflation and economic activity pick-up, just like in the past. Everything was dragged through the dirt the past year, but you like focusing on gold. Other than the U.S dollar, can you tell me anything that lost less % value than gold in the past year? Not the DJIA, not the DJTA, not the TSX, not copper, not zinc etc. Actually, I’m pretty sure gold bullion ranks 2nd to only the USD for 2008. You think there’s going to be more of a mad rush to U.S dollars? I think we reached a climatic point for that. Soon people will be returning to their senses and supply and demand will rule the day.

If gold is so bad, I would want to know how you feel about the charts for everything else in the past year.

Good job on the real estate information though

#80 Dave on 04.21.09 at 2:01 am

If there was ever a time in the course of men’s affairs when gold should have topsided, it’s now. ”

Great point, Garth.


ridiculous point. Gold topsided in the past during times of high inflation. We had that in the past few years, we had that leading into the early 1980’s, and we will have that once the economy is roaring once again.

#81 Dave on 04.21.09 at 2:04 am

In this environment one day is meaningless. Now ask me about monthly car sales in China. — Garth


yet one year of activity in the gold bullion market means the world! haha

#82 Dave on 04.21.09 at 2:16 am

Most of the factors mentioned on this list are recessionary and gold is not a safe haven for a recession. It is a safe haven for inflation and currency risks. Therefore, it would not be suprising for gold to go down under current circumstances as deflation is occuring and the trillions printed have barely left the banks.
“The metal has given a one-year return of zero” Good grief, what investment class is positive over the last year? Over the last nine years gold ranks near the top of investments. Garth are you cherry picking here?

great post. I wish I had read this before I posted my comments. Just about the same information and idea

#83 WakeUp on 04.21.09 at 3:23 am

#56 gold bugger
“@Garth: Gold has a 400% return in the past 10 years. Name one thing that has done as well. Just one. ”
Where would you be if you bought gold 30 years ago?

#84 Vancouver_Renter on 04.21.09 at 3:36 am

This gold price discussion is moot for gold stock investors. It really doesn’t matter whether gold goes up or down in price.


– There have been five great deflationary spirals in the last 300 years. They occurred in 1929, 1873, 1825, 1772, 1720
– In all five of these depressions, governments and central banks of the day pumped and stimulated like madmen, but they couldn’t prevent the contractions.
– In some cases the price of gold was fixed, while in other cases it was not.
– In each of these contractions GOLD STOCKS outperformed every other asset class because their operating costs (energy, labor, capital equipment, etc) plummeted while gold prices held up and the gold market remained highly liquid.

If you want to throw 10% at gold, you should be buying quality gold producers and speculating on juniors. Investors in the 1930s who had 10% of their portfolio in gold shares found that this hedge completely offset their losses in the general market.

Gold bullion is great for hyperinflation. But for deflation, gold stocks are king.

#85 JimInToronto on 04.21.09 at 4:02 am

Similar experience this weekend in Toronto. We were interested in a home on a quieter street in our neighbourhood (which is a high demand area). Place listed for $749 (3 bdrms) and went for $835 with 7 sealed bids. Our agent advised we wouldn’t have a chance without removing all conditions (like selling our current home). So we said screw it and did not bid.

Garth, you may say “real men go firm”, but I cannot justify putting the family’s financial future in jeopardy in this market. People are crazy and the music is going to stop suddenly. It’s a frenzy out there…

#86 Chris in England at the moment on 04.21.09 at 5:00 am

Sail 1: #19: “Let’s not forget new emigrants in Toronto are also a wonderful equation for Re.”

Not necessarily – some of us read this blog and will be renting!

#87 Mike B on 04.21.09 at 5:03 am

In actual fact this time of year does see slight increases in prices and volume as evidenced by the charts on guava.ca… In Toronto that is… Having looked for a new house( sold in late 2007) I have seen stuff sell quickly and recklessly of late.. Leave it to T.O. to buck the trend but stupid buyers with other people’s money (bank of mom and dad) need to think they’re in the market at any cost. Problem is interest rates being so low that buyers blow their brains out on the principal side of the equation. Would love to know what the assessed value of the house that the kid luckily didn’t buy. Nothing near what was paid I am sure. Once May is over things should slope off as usual summer house season dwindles. But with 30,000 comissioned pumpers out there who knows. Let’s ask Maureen O’Neil of TREB that would be entertaining.

#88 Chris in England at the moment on 04.21.09 at 5:08 am

Zoronqueen #32: “what I meant to say is I would love to own some more gold….”

Me too, but I would like mine to be in rings, necklaces and watches.

#89 Dali on 04.21.09 at 5:18 am

Roubini: ‘Suckers Rally’ to Fade Amid Economy Woes

By: Associated Press | 21 Apr 2009 | 04:11 AM ET

Well-known economist Nouriel Roubini, one of the few experts to foresee the current global crisis, said Tuesday a recent “suckers rally” in stock markets would fade as the U.S. economy continues to wither and the financial system suffers unexpected shocks.

Hopes the world economy will stage a faster recovery this year have fueled a six-week rise in global markets, with major benchmarks on Wall Street and in Asia up more than 20 percent over just six weeks.

But Roubini, a professor at New York University’s business school and former adviser at the U.S Treasury Department, was doubtful and predicted markets would test the lows seen in March.

“For people who say there are green shoots, I seen only yellow weeds frankly,” Roubini said at a conference in Hong Kong. “It’s not a true recovery. It’s just a bear-market rally, it’s a suckers rally.”

That’s because the U.S. economy won’t grow again until 2010 after contracting by 2 percent this year, he said. Unemployment will hit 11 percent next year and corporate earnings will come in worse-than-expected, he predicted.

Troubles in the financial sector, meanwhile, are far from over and will be worse than many expect. The results of the government’s “stress tests” will show even the biggest 19 American banks don’t have enough capital to cope with the huge losses they’ll inevitably suffer on souring loans.

“The losses are much more than people are predicting and (the banks) have not reserved enough,” Roubini said.

“It looks ugly for every one of those 19 banks, let alone the smaller ones,” he added. “So it’s going to be ugly for the financial system.”

#90 Da HK Kid on 04.21.09 at 6:16 am

Roubini interviewed by Forbes (himself)


#91 David Bakody on 04.21.09 at 6:21 am

#47 Dali on 04.20.09 at 8:56 pm

The world does not care anymore, so the US mint just keeps on printing. Could it be many know that our time as humans on this earth are close to the end as food and energy runs out? Who knows? so why invest in shabby real estate living with no time to enjoy life while working to try and save a future for our children and grandchildren?

#92 Kash is King on 04.21.09 at 7:19 am

#50 Argentum Aurum, setting yourself up to mirror a central bank is probably a great idea.

They do have a core position of gold, and silver. All carefully stashed in big expensive vaults and closely guarded. If gold and silver were truly barbarous relics, why would they go through all this bother? They do because it is the bottom line in money. It’s what they pay each other with, since they have some mistrust of each others’ paper(electrons today)
Paper money is a simple means of exchange.
In a way, it does have value in terms of gold, because we are still free at any time to buy gold or silver with it, so in that sense it is convertable to gold, just the exchange rate fluctuates.
In my view, gold and silver are cash/money…. just an old-fashioned form of it. Kind of like an old Underwood typewriter is still a “word processor” in reality.Quaint but a lot more difficult to transact with and keep.

Perhaps gold and silver have been used as vessels to hide inflation? Namely there has been so much “paper” or “fake” gold created through certificates, contracts and those deadly derivatives, that if a day ever came where all the physical gold was accounted for and measured against them, gold would likely be demonstrated to have an astonomical value measured in dollars.
I’ve read that in 1912 there were 35 US dollars in circulation for every ounce of gold held by the US. Today it’s estimated that there are @ 53,000 dollars circulating per ounce allegedly held.

A head’s-up to anyone owning or buying gold /silver certificates: make sure it indicates the serial number of your bar, and that it is an unencumbered stand alone bar which you have title to, and find out if you can take delivery if you so choose. Otherwise you may be purchasing simple paper and there may not be physical metal allocated for your certificate.The bank may not even have any…! If you have doubts, consult with a legal professional for opinion.
Thus imho, your “purchase” may not even register on the physical market, and your “purchase” won’t affect the demand/price of the physical market. This deception has been another way of allegedly suppressing physical gold/silver prices.
Bottom line, if gold/silver were to shine, paper and it’s ugly twin (debt) would look bad.

#93 Argentum Aurum on 04.21.09 at 7:34 am

Guess who’ll help fix the problem…


“…The report lands as the bailout plan comes under new leadership at Treasury. Last week, the White House announced it had nominated Herbert Allison, the president and CEO of mortgage behemoth Fannie Mae, to replace Neel Kashkari, an assistant Treasury secretary and a holdover from the Bush administration.”

#94 Toronto C9 Renter on 04.21.09 at 7:43 am

Re the temporarily “hot” Toronto market…

An important difference in this years spring rally is whats happening at the high end, which is nothing.

Last year everything was selling, including 2M+, and with significant bidding wars even in the 1.5 – 2m range.

Not this year. The bidding wars are below 1M. The high end stuff is cutting price and still not moving.

Very different from past years and for me, foretells that we’ll be solidly back into a weak market by summer, and resume our long overdue decline

#95 hagbard on 04.21.09 at 7:47 am

ts harpoon – From that article you posted:

“When I was young if you got heavily into debt it was a very serious issue, but now it’s just seen as normal,” he says. “If you’re an average middle-income family with two or three kids and only a single income, debt is the only way to keep the family going.”

Guess computer programmers aren’t as smart as they think they are. We’re a middle class family, have one income (my wife works p/t as a GP) and we have NO debt at all and lots of cash in the bank. My only concern is that cash could well turn into confetti when (not if) the fiat currency collapses.

#96 Munch on 04.21.09 at 8:05 am

Here in Johannesburg South Africa we do NOT buy property without AT LEAST the following (it’s worth the cost):

1. Inspection by qualified builder to pick up defects such as rising damp
2. Inspection by architect (as a fall back on the builder)
3. Inspection by qualified electrician
4. Visit the local police station and see how many burglaries reported in the last year or so
5. Draw the house plans from the municipal offices (check that all additions have proper plans)

Go back and view the house …
1. On a week night
2. On a Friday or Saturday night (noise, parties)
3. On a Monday morning (traffic)

So buying “sight unseen” here is unthinkable



#97 Jonathan on 04.21.09 at 8:07 am

Gold hasn’t gone up because oil has gone way down. If oil were to rise again, you’d see gold rally.

Sale of New Homes, Condos plunge:

Sale of Toronto condos down 77% in first quarter.


#98 Munch on 04.21.09 at 8:07 am


Can you point me to a site (or book) which discusses the proper way to value a house?

For example, it covers the mortgage or it yields x% above bank rate?



I have yet to write it. — Garth

#99 Alex on 04.21.09 at 8:24 am

“Give it up. Long-term, gold’s finished. Buy oil”

But gold perfectly tracks oil prices and protects from paper money inflation!

1oz of gold buys the same amount of oil today as it did in the 50s, 60s, 70s, 80s, 90s etc.
Actually as of April 1oz of gold buys twice more oil than a year ago.

Just look at these simple table and the graph:

The world runs on oil. The obsessed run on gold. — Garth

#100 Bulls eye on 04.21.09 at 9:08 am

I remember my best investment, a Generator. Lived through a hurricane and was offered 10x the purchase price. So for those who look to Gold as an investment, through a couple of genies aside instead. Desperate people don’t need gold.

#101 Kash is King on 04.21.09 at 9:23 am

A funny and completely relevent commentary :

Why I Fired My Broker
May 2009

By Jeffrey Goldberg


#102 Anonymous on 04.21.09 at 9:46 am

#24 @Garth 2,

Secondly, the best time to buy real estate is when people stop asking when the best time to buy real estate is. Quite frankly, expect to see a 40% drop in prices.

But when do you buy? When it feels reckless, when it’s painful, when it feels aweful, when buying makes you sick/terrified, when your family is begging you to reconsider. Buy the blood. Do you understand? Or do you want a specific day?

But you won’t. Very few people have the balls or smarts to buy the blood. If you need to ask other people when to make a decision this big, you just need to wait until the market recovers and you need to pay up. Which isn’t a bad idea either.

Did you buy the blood in the stock market at the beginning of March? If you did, congrats, you are somebody who MAY be able to catch the housing bottom. You just may have enough guts to do it.

#103 Live Within Your Means on 04.21.09 at 9:53 am

#29 Dale on 04.20.09 at 7:07 pm

Dale – Don’t know which province you live, but even here in our ‘often backward’ province we’ve had laws for several years that, I believe, force sellers to reimburse buyers who don’t disclose problems. However, the old motto ‘buyer beware’ should still apply. Twenty years ago when we sold our 3 level , spacious townhouse Home Inspectors weren’t available. Even now, there are many that aren’t worth the money. I must admit that when we sold our last place we hid lots of problems that, upon a closer inspection by the buyer, would have caused him concern. But, the place was spotless during viewings, latest colour schemes (due to a fire), and new kitchen that my husband had built, on the cheap. Window seals had broken on large picture windows which were common in those units. We had verticals in those days and they were turned to hide it, but if the young male buyer had looked more closely he would have noticed them from the outside. Today, what I did 20 years ago, is called ‘staging’. We’ve never regretted buy our current home, except I’d dearly love to have a smaller backyard now. Our lot is 70 by 190 ft. much of which is composed of flower/shrub/veggie beds I can no longer maintain. I know “cry me a river’.

#104 Live Within Your Means on 04.21.09 at 10:01 am

Re my last post. A chap who rented a townhouse behind us 20 yrs ago accepted a job in TO before we sold ours. For the exact same style townhouse, its going price was 4X ours. And we were 15 minutes from downtown and he was in the burbs. He moved back a year later. Tho his wages were higher, it just wasn’t worth it.

#105 Punnoval on 04.21.09 at 10:10 am

Wow, Nancy’s son missed out on a real bargain. Should have bid at least twice the asking price. If she thinks he is missing out maybe he could make a bid on this super-fine piece of real estate:


#106 Jonathan on 04.21.09 at 10:22 am

This real estate bubble is completely confined to first time buyers. Only homes under 400K are selling like hot cakes.

If you go into new areas like Milton and home sales are now up 62% YOY. Builders have cut prices by up to 75K combined with 2-4% mortgages.

Need I remind everyone of how the housing bubble in the US was triggered in large part to a 2001 recession.

#107 Jason on 04.21.09 at 10:48 am

Regarding Gold. Don’t forget the largest manipulation in history.

I’m sure advertising goes a long way as well. If there were as many Gold commercials in the media as there are Real Estate right now, everyone would own Gold.

IMO Silver is the better play so the majority of my holdings are in Silver vs. Gold.

Just say NO to Gold & Silver ETF’s…..if you don’t own physical Gold/Silver or pure Gold/Silver stocks you’re contributing to the manipulation.

#108 Bill-Muskoka (NAM) on 04.21.09 at 10:51 am


Why do you even bother to be rational with these people?

Gold was in the crapper for a long time, and will go right back there again, but these fools are ‘investing’ (same results as the people playing the slots in the casinos) and willfully ignoring reality.

Apparently people are so brainwashed they are now a permanent part of the Matrix? Then, along comes reality in the person of Susan Boyle, who’s God given natural talent has taken the world by storm. She is not any of the things people have been taught to ‘see’ as positive: not wealthy, not a model, just a simply human being whose dream became real by a moment of fate.

There is a lesson in that, but it is one those pursuing money will never understand until they find the hole in the heart and their ideology.

#109 Bill-Muskoka (NAM) on 04.21.09 at 11:00 am

#95 Munch

You are absolutely right, but miss the key issue. PEOPLE ARE TOO FRIGGIN’ LAZY to do such things. They want to buy on emotions. Afterall, they have been carefully trained to do so.

They could make a movie about it called ‘Eyes Wide Shut! Hmmmm…seems Tom Cruise starred in a movie about cheating, screwing, and such already. Okay…can we say Sequel? LOL

BTW, if realtors actually do their job (or did it) they would be informing the prospective buyer of the very issues you listed. We called around before we bought, talked with some friends in law enforcement and eliminated numerous choices.

The Cops know where the trouble spots are, and one realtor friend mentioned little details like the sewage treatment plan, City Dump locations near one property.

Sure saved us from some serious mistakes by simply making a few phone calls. Now we are seeing new development near us, but far enough away to not be a problem. I see property value INCREASES coming within the next year. ;-)

#110 Bill-Muskoka (NAM) on 04.21.09 at 11:04 am

It will be interesting to see what properties move in Cottage Country now that the ‘season’ has arrived? Those multi-million dollar fiascos will be like a millstone around their necks. How convenient they have waterfront in which to drown themselves.

I suspect there will be numerous bankruptcy filings for those who ‘had to have their dream home’? Yeppers, there are two types of dreams…Happy and NIGHTMARE!

#111 Jimster on 04.21.09 at 11:27 am

If gold is finished they why do the central banks own %60(est.) of the world’s supply?

Although the gold price can be heavily manipulated in the short term with derivatives, the physical metal does not lie to you.

Good luck with the banksters.

#112 $fromA$ia on 04.21.09 at 11:34 am

Gold opens up $7 and the U.S. led gold cartel starts to sell off relieving U.S. citizens of the fear factor.

Amazing! Have a look for yourself at bullionvault.com
You’ll need to allow Java to get a good look at real time graph. While this happened sheeple started going back to the financials which started off the day in the red.

#113 $fromA$ia on 04.21.09 at 11:45 am

The governments want the poplulations to be throwing their money at the financials. Simply amazing, gold rises and the bank stocks cough. It’s almost as if the banks/governments are trying to get all that money back from those who are holding all that money now that created this big black credit crisis hole.

Then the banks will dividend cut and reap the $$$ when their share prices are cut in half!

#114 Live Within Your Means on 04.21.09 at 11:54 am

#42 miketheengineer on 04.20.09 at 8:16 pm
As an almost previous gardener, that’s a great idea to grow taters, but most people don’t have a ‘cold storage’ area in which to store them. We can only keep them in our unheated back basement for a month or so before they start to sprout. My grandma had a cold cellar back in the ‘old days’ – earthen floor where root veggies and preserves were stored. Homes are no longer made to accommodate preserving root veggies. I know that you can dig a deep hole in the ground & layer them with straw to preserve them, but realistically how many people will do that. I’ve had a veggie garden for 20 years, but the last product I’d try to store (considering the price) is taters. BTW, could I interest you in a 67 year old mason jar of foxberries? :-) I recently ate some jam that I made about 5 years ago. It was yummy. But, as we don’t eat much jam anymore, I don’t find its worth the effort. Who knows tho, with this economic crisis, I might go back to canning. I also used to grow garlic and made garlic power.

#115 North Vancouver Citizen Jr. on 04.21.09 at 12:45 pm

#109 Bill-Muskoka (NAM)

…You might find it interesting to note that Garth’s bunker is in fact a “prime Muskoka waterfront home w/ 10 Bdrm’s, 10 Baths, coach house, circular drive and attached storm cellar/bunker”.

Pictures including a Royal Tour description to be his next book, naturally titled…..””Canadian Prime Minister Garth Turner’s Humble yet Esteemed Muskoka Retreat””.

Due out @ 2012

#116 George on 04.21.09 at 12:45 pm

Why do bullion banks and the IMF announce that they are going to sell their gold and actually tell you how much of it they want to sell. Any commodity trader that did this would be an absolute fool. Shake the confidence of a market possibly, deliberately weaken it and then sell in to it? For the purpose of helping the poor? When you look at how national incomes really step up to care about the poor it’s abysmal, that’s the spin that we’re fed. Public Opinion stuff. You can see this all is a hoax. Government does not want to pimp gold in fact they are at war with it. It is such a marginalized commodity that if even a tiny fraction of investors got turned on by it, they could make that price go well, well over a 1000. Governments don’t like the stuff it discredits them. They are willing to get hosed and take a loss on the sale of the stuff it is so important to suppress. Gold discredits governments period. This is Garth’s site, he can do and say whatever he wants with it. I can’t pull over while driving my car and walk in to someone’s home and use their bathroom. Markets can remain irrational longer than we can remain solvent. Jesse Livermore. Time will tatoo the Greater Fool.

#117 Jimster on 04.21.09 at 1:05 pm

I see H.R 1207 , US Bill to audit the Private Federal Reserve has now got 55 Co-sponsers!

Perhaps if this goes through they may get another bill through to require Fort Knoxes to audit their gold supply?

#118 Live Within Your Means on 04.21.09 at 1:06 pm

#100 Kash is King on 04.21.09 at 9:23 am

Boy can I relate. In the mid 90’s , after we had paid off our house and had excess cash available we interviewed (:-) 3 investment guys. Went with one who seemed to spew the least BS. He had also been recommended to us. We were very naive, like, I suspect most ‘average investors’ were at that time. We filled out those ‘how risk adverse questionnaires’ . I was less risk adverse than my hubby. I was the biggest breadwinner & had a more secure job. Well our so called adviser, moved on to another local in the company. Then his replacement took over &, as the market was gaining, he convinced us we should take out a market loan, use OP’s money, and write off the interest. I had read about this in various articles – that’s how the big guys made money. Shortly after, however, our investments started to go down but ‘our guy’ said it was only a ‘blip’. I started to question him about things I had read but he showed us all kinds of charts to prove HIS point. To make a long story short, we asked him last year to change our accts to Blue Chip ones, yet they’re still going down. Knowing our age, we should have been smarter & he should have advised us to do this several years ago. But, as a nice guy that he is, he’s really only a salesman in the end. Thankfully, we’ve only got 9 payments to go to pay off that loan. Garth, and others, may still feel that its OK to use OP’s monies, but in this crisis, I want to get rid of it. And, NO, we haven’t withdrawn our money in the market. Maybe,our nieces and nephews when they’re 45 will reap the benefits :-). Pardon my negativity. It’s just a testament of why those who don’t understand the market shouldn’t invest, IMHO. Guilty I am.

#119 Jimster on 04.21.09 at 1:10 pm

$fromA$ia – Just watch Tim (and Barry) convert all those secured loans they made to the banksters to equity ownership just in time for them to go bankrupt, ensuring the taxpayers get paid back ZERO.

What did IMF say recently; they estimate 4.1 Trillion in further bank write downs over the next year!

#120 David on 04.21.09 at 1:16 pm

Nancy’s comments are to say the least amusing. High drama in the real estate theatre of the absurd. In two years, this substandard hovel showed annualised compounded price increases of 18% with little or no value added. An aged, measly 600 square foot home trading at $550 a square foot. The lot size at 120′ x 15″ sounds like the same dimensions of pathway to the two hole outhouse that I remember on my grandpa’s cattle farm.
Even more insane was the sealed bid frenzy and unconditional offer sheet requirement that the real estate “expert” demanded.
I doubt any rational investor would fork out $328K to collect at best $10K or less in annual rental gross rental incomes. Even with a $100K down payment (which is substantial these days) ay a25 year amortisation the loan payments on $228K would be almost $15K to collect less than $10K in GROSS rental income in year one. The cumulative interest costs in year one alone even at today’s super low rates would be in the $9K range. Add in property taxes, utilities and maintenance expenses and any sane landlord would look at his net operating income would scream and run for the exits.
Naturally enough, there is still the will out there to try to reflate a deflating housing bubble. The corollary of this manic episode will be prolonged agony for a housing market in desperate need of healthy dose of reality.

#121 Chris in England on 04.21.09 at 1:21 pm

Punnoval #104 “Wow, Nancy’s son missed out on a real bargain. Should have bid at least twice the asking price. If she thinks he is missing out maybe he could make a bid on this super-fine piece of real estate:



“Built in : 9999”

We have seen the future and building standards have not improved! (I knew there was a reason we don’t live forever).

#122 Nathan in Edmonton on 04.21.09 at 1:35 pm

That house sounds very much like the first house my wife and I bought in 2002 in Edmonton… Price $60,000. Once we spent 6k on the foundation and 10k on renovations it was a very comfortable home.

Until prices return to this level, first time home buyers should steer clear.

#123 Central Toronto Home Owner on 04.21.09 at 1:52 pm

Seems that the market has bottomed. Low interest rates are keeping the market afloat. I live off of Bayview and there has been a multiple offer on my street and one home on the next street from me sold for more that a million (nothing special).

People are putting their money back in Real Estate.

#124 Dave on 04.21.09 at 1:57 pm

The world runs on oil. The obsessed run on gold. — Garth

yeah, but why bother trying to change the mind of the masses? Its a pointless fight. If the masses say gold is $900 an oz, then gold is $900 an oz. Just because oil is the worlds most important commodity, it doesn’t make everything else insignificant

#125 Too Old Bob$ on 04.21.09 at 2:03 pm

BOC says recession is worse than they thought it would be. lol. Like i’ve said before…never trust any of those overpaid, under worked imbeciles. BTW! rate down to .25%.

Also heard a commercial for house buying, similiar to the Brick. Buy house and get 1 year of no payments.
Can’t afford it now, but will be able to later. :o

About Gold. Better get it in youir hands were you can see it and feel it. Who you going to trust?
Also if you need a safe place to hide it, get a Dog, they know how to do it.

#126 . . . fried eggs and spam . . . on 04.21.09 at 2:03 pm

“The world runs on oil. The obsessed run on gold.” — Garth

Everyone and everything, including oil and gold down here has a “best before”, or “expiration” date. If the planet runs out of oil in this current lifecycle, has anyone figured out what will replace it? I haven’t!
#67 Paul Fist In Your Face at 10:56 pm — “. . . Chinha doesn’t have enough gold to fill a wheel barrow. All of China’s reserve is in paper money and promissory notes [US treasuries]. That is China’s big problem. . . . that’s why they have been turning their cash into something usable like copper and aluminum and oil or something eatable.”

Valid points. China has been making very quiet strides, not only to dump their most, if not all of their US securities / cash, but also switching and / or buying up loads of copper and other resources / commodities which the world will eventually need for new equipment.

China is not stupid. They are putting themselves in a very smart position of keeping their friends close, but their enemies closer still. Russia and Iran, which hold 20-25% of the world’s oil and gas reserves, Venezuela, and other energy rich countries have also sided with China.
Mish’s site looks at California Public Employees Retirement System going under and fat pensions for the wealthy choking cities. — http://tinyurl.com/d25lg4 / http://tinyurl.com/cru99c.

Taxpayers pick up the costs associated with public pension plans, but allowing that California is now $US$42 bln. in debt and rising, along with home foreclosures, thoughts of tax revolts are taking shape all over the globe; turns out taxpayers are being screwed royally.

How many ‘costs’ are taxpayers supposed to pick up?

#127 Zoronqueen on 04.21.09 at 2:06 pm

#104 Punnoval
I wouldn’t pay 100K for that piece of crap….

Chris in England…
I collect gold coins strictly as a hobby, would love the day when the price comes down so I could invest….

So far our money has been tied up in real estate. Still own a Condo in downtown Edmonton in which my MIL resides and of course can’t kick her out….

#128 Dave on 04.21.09 at 2:14 pm

Why do you even bother to be rational with these people?

Gold was in the crapper for a long time, and will go right back there again, but these fools are ‘investing’ (same results as the people playing the slots in the casinos) and willfully ignoring reality.
of all people to point the finger, haha. Rational? you post the most ridiculous things on this site that for the most part are completely unrelated to the inital web post.

you need to educate yourself. Opinions don’t matter, statistics do. Supply and demand matter. Is it difficult to understand that capital costs are down which makes mining for an asset class that outperformed every commodity (except for 1) in the past 10 years that much more attractive? That is the reality of things. Good mining companies will reach astronomical highs, just like in the past. There is a huge disparity in supply and demand and a huge disparity in the price of gold bullion and gold mining stocks- a recipe for tremendous gains.

Stop salivating over everything Garth says, geez

#129 AL B on 04.21.09 at 2:18 pm

My brother in law bought a house in SE Oakville for $479 last July, and just sold it for $515. I’m not sure what’s wrong with folks out there. Don’t they see what this house previously sold for? Don’t they know prices have come down since July 08?

#130 RGE on 04.21.09 at 2:47 pm

Garth – you make a reasonable case about what has happened so far with gold prices.

But who is to say that we can’t yet have a speculative bubble in precious metals?

We’ve been moving from one bubble to the next. Won’t we continue to have bubbles so as long the as the government intervenes in the market?

#131 MikeB on 04.21.09 at 3:07 pm

I am sure most here know that the BOC has dropped rates once again to retardedly low levels. While they deem this will stimulate the economy it will only benefit the greedy realtors and moron buyers. Besides it is a step closer to what Greenspan did near 911… Rates were too low for too long and it seems the governments don’t learn their lessons. I suspect you will see rising unemployment for sure AND rising real estate prices once again as basically ANYONE with a pulse will be able to afford anything. A monetary policy with more holes in it than swiss cheese. Some bank governor.. One month he pushes the idea of a plus 3% increase in GDP and the next he slashes it in half. Does he actually know what he’s doing. My fear, fellow Torontonians, is that prices will rise quite smartly very soon as the floggers see an opportunity to keep making more dough for themselves. I know one realtor who sold10 houses in one month with an average of 700K per house that means almost 150K in commissions in ONE FREAKING MONTH. Doctors do not make that kind of bread or CEO or CFO’s. There has got to be something wrong with this industry.
Can we impeach a bank governor??? If so.. Let’s

#132 Future Expatriate on 04.21.09 at 3:40 pm

#66 “So. The question is what will return 400% in the next 10 years?”

That’s a trick question. Trick answer: Same thing.


#133 Future Expatriate on 04.21.09 at 3:42 pm

#67- “Something had to be done to save what is left of the value of paper assets.”

In God’s name, why? I don’t know about you, but I flush excrement when it starts to smell. Sometimes proactively.

But thanks for explaining the “logic” of abject desperation.

#134 [email protected]!t on 04.21.09 at 3:57 pm

Nancy’s kid obviously knows what he is doing. He is fresh out of school and work for about a year and he has more than 30% down payment on a house? When I was “fresh mint” from school, I was working 2 jobs just to pay back my $24K student loan. Had I put that money into a house, I would’ve tripled my return.

#135 Avenge_Gerald_Bull on 04.21.09 at 5:00 pm

#112 Live Within Your Means –

We have technology and research data now that will let you design something, possibly using natural forces and conditions, that will let you store tubers over the winter.

Specifically, all commercial operators know that potatoes require at least:

a) controlled humidity (non-condensing) to stop shrinkage
b) ventilation to carry away carbon dioxide, and provide oxygen
c) ventilation to carry away heat, and keep potatoes cool (yes, stored potatoes are living, breathing organisms)
d) chemical sprouting inhibitors, such as clove oil or maleic hydrazide

So, for example, your home system has to provide a storage room that allows lots of air to pass through a stack of potatoes, a small amount of fresh outside winter air for oxygen and cooling, and a controlled humidity source for it.

Not sure where you can get the maleic hydrazide though, although gamma radiation was used back in the 50’s to stop sprouting…

#136 Kash is King on 04.21.09 at 5:31 pm

Hmm, looks like conspiracy theory goes mainstream?

Jack Bauer can’t stop ‘The Goldman Conspiracy’
10 reasons why Wall Street has absolute power over America’s democracy


#137 Bill-Muskoka (NAM) on 04.21.09 at 5:50 pm

#126 Dave

LMAO! Glad I rattled your chains there Dave! So, you must be one of the investment Flim Flam Artists that come here? Keep on going, you are a HOOT! RATTLE! RATTLE!

#138 kitchener1 on 04.21.09 at 5:57 pm

Buyers in the GTA are picking up homes at a brisk pace. In Kitchener the RE market seems to have picked up quite a bit. Lots of sold signs all around.

What I am seeing on Guava.ca and locally as well as in Toronto is a lot of new listings coming online, let the first time buyers jump in and I’ll wait at least until the fall before I start to look.

Economically, things will get worse before they get better, its going to be ugly when Chrysler and GM go bankrupt. IMO I think that people have become accumstomed to hearing about layoffs in the thousands so if does not fase them as much a it did in Dec/Jan/Feb etc..

#139 . . . fried eggs and spam . . . on 04.21.09 at 6:03 pm

Precious metals really don’t matter anymore. A day or so ago, mention was made of the second wave of home foreclosures, taking effect quite rapidly; commercial real estate was also starting to tank as well. Tsunami has begun? — http://tinyurl.com/c2ajtr
Here are seven positive signs for China. There are zilch for western society! — http://tinyurl.com/cl4pn8
A point of view on deflation, and how it is affecting western countries.. — http://tinyurl.com/cae5m4
Talking of precious metals (silver), a bounce to nowhere and joining in the fun of a depression.

Somewhere in there is de-, stag-, in- and hyperinflation, all occurring in different parts of the globe at roughly the same time. — http://www.dailyreckoning.com/

#140 maria on 04.21.09 at 6:15 pm

#42 miketheengineer on 04.20.09 at 8:16 pm

Thank you very much for sharing the address with the advise on how to cultivate potatoes in such a small space!
It is a very clever idea and many people can produce their own potatoes for next winter …

#141 Joe Realtor on 04.21.09 at 6:20 pm

MikeB wrote:
I know one realtor who sold10 houses in one month with an average of 700K per house that means almost 150K in commissions in ONE FREAKING MONTH. Doctors do not make that kind of bread or CEO or CFO’s.

What did that Realtor make in the other 11 months of the year? Hey, I’ve had nothing for 3 months and 2 paychecks in the pipeline for June. Nothing after that yet!

Someone up above wrote about “hiding” issues and calling it staging these days. True “Staging”done by a professional is NOT hiding things, but the exact opposite. It’s fixing everything that is liable to be used to chip away at your asking price, cleaning everything from top to bottom and then making the place look nice to showcase the space. Too bad that some people have taken to calling themselves stagers and throw a blanket over the end of the bed, paint over the mould and say the place is staged.

#142 john m on 04.21.09 at 6:22 pm

#127 AL B on 04.21.09 at 2:18 pm

My brother in law bought a house in SE Oakville for $479 last July, and just sold it for $515. I’m not sure what’s wrong with folks out there. Don’t they see what this house previously sold for? Don’t they know prices have come down since July 08?……………well Al just curious how much he lost?………real estate commission alone would be about $30,000,and then theres land transfer fees,legal fees etc——–sure eats up that $31,000 profit…….cmon now!

#143 john m on 04.21.09 at 6:25 pm

#133 john m on 04.21.09 at 6:22 pm ………correction typo…$36,000 profit

#144 Glenn on 04.21.09 at 7:19 pm

Garth, may I ask you if you think a complete collapse of the American or Canadian currency is possible? If not, why?

As you know, such a currency collapse happened in Wiemar Germany, the Soviet Union, and very recently in Argentina.

Also keeping in mind that Henry Kissinger openly admitted that the collapse in Argentina was fully planned as a test scenario.

Also, “Heinz” admitted the same plan would be put into play in America at some point in the future.

Perhaps that future is now?

If the answer is not forthcoming, I suppose its best to break out the “GOLD BUG” stamp and send me packing.

Are you on drugs? — Garth

#145 ts harpoon on 04.21.09 at 7:24 pm

Tune into TVO in 10 minutes as Steve Paikin covers the topic of PEAK OIL!

#146 AL B on 04.21.09 at 7:31 pm

#141 john m on 04.21.09 at 6:25 pm

Of course he lost a few bucks, but the point is, someone just paid 35K more than what is supposed to be the peak (summer 08). He had multiple offers too, and sold in 2 days!

#147 Dave on 04.21.09 at 7:54 pm

#126 Dave

LMAO! Glad I rattled your chains there Dave! So, you must be one of the investment Flim Flam Artists that come here? Keep on going, you are a HOOT! RATTLE! RATTLE!

nah, most of your comments are extremely long and irrelevant. All you seem to do is echo what Garth says. Its as if you don’t have an opinion for yourself. I’ve said it many times, Garth has a good understanding of the Canadian real estate market, which is why I visit this site. Guys like you think he has the answer for everything.

I’ve done my research and have made some mind-boggling gains the last few months. Have fun with your generator and squirrel meat. haha

#148 Kash is King on 04.21.09 at 8:14 pm

Sorry, my link above re: Jack Bauer was too long.
Lemme try this with a tinyurl. It’ll go to Marketwatch hopefully.


#149 dd on 04.21.09 at 8:25 pm

#130 Future Expatriate on 04.21.09 at 3:40 pm

“That’s a trick question. Trick answer: Same thing. Duh.”

If you are so sure and if it is that easy, pile in buddy and don’t be looking for Garth or confirmation.

#150 Kash is King on 04.21.09 at 8:41 pm

Really interesting read about goldbugs vs central bankers:

Why Gold Owners Are Targets of the Government
Gary North

Short link this time:


#151 Dan on 04.21.09 at 8:44 pm

Home prices continue to crash. My brother inlaw bought a home for $550,000 in maple and sold it a week ago for $521,000. He put in on the market just before the crash took hold at $660,000 last summer. Even with this dead cat bounce prices are still down and job losses are still going up. Once the suckers are done the crash will pick up speed and prices will fall 15-20% by Christmas. Don’t believe those who claim homes are selling on this site. They are nothing more then RE agents putting out propaganda.

#152 Sondra on 04.21.09 at 8:51 pm

#129 MikeB on 04.21.09 at 3:07 pm
I know one realtor who sold10 houses in one month with an average of 700K per house that means almost 150K in commissions in ONE FREAKING MONTH. Doctors do not make that kind of bread or CEO or CFO’s.

Mike are you complaining or running out to get your real estate license?

It is so easy to type disparaging remarks about people and professions. Everything you do, everyday is a portrait of who you are. Get the picture?

#153 Live Within Your Means on 04.21.09 at 8:53 pm

140 john m on 04.21.09 at 6:22 pm
#127 AL B on 04.21.09 at 2:18 pm

My brother in law bought a house in SE Oakville for $479 last July, and just sold it for $515. I’m not sure what’s wrong with folks out there. Don’t they see what this house previously sold for? Don’t they know prices have come down since July 08?……………well Al just curious how much he lost?………real estate commission alone would be about $30,000,and then theres land transfer fees,legal fees etc——–sure eats up that $31,000 profit…….cmon now!

John- Its not just all the commissions, legal fees, deed transfer taxes, etc. What about moving costs, cable, telephone, etc., etc. associated with moving. People seem to forget about all those incidental costs that just keep adding up. I’ve moved at least 25+ times in my life and besides cost, it can be very stressful.

#154 RJ on 04.21.09 at 8:57 pm

It’s gonna be fun watching petroleum exporters demand bullion or bullion backed currencies as payment for oil and gas. This may in fact be the reason why oil is so far off it’s highs and yet gold is holding up well versus federal reserve notes. They’re in a heck of a fix.

#155 Grumpydawgs on 04.21.09 at 8:59 pm

So, the BOC has lowered intrest rates again, purportedly to ‘throw some gas on the fire’, and restrain deflation from taking a foothold in the CDN economy. Isn’t too much cheap money the progentitor of the economic conflagration we are currrently experiancing? They want FTB’s to start buying again based on renewed ‘affordability’.

Isn’t a loss of value recognition and a reliance on monthly payments what created the hyper price inflation in the real estate market. Hypothetically, if the intrest rates could go negative would prices continue to inflate in order to fill the price-affordability gap? Is this why we are seeing the dead cat bounce in the real estate markets? The government can certainly sustain the manipulated low intrest rate regime for several years without immediate effect. The results will manifest in a continued weak CDN dollar and much higher taxes going forward.

Long term this manipulation is deadly to buisness which will not be able to afford to retool and retain any semblance of competivness. On that point , if you think you’re seeing permanent job loss now, this is just the beginning. Factories world wide will be far more technologically effificient and productive. The erosion of the middle class lifestyle will continue as the government raises taxes to pay for unsustainable social structure. it looks to me that we’re past the tipping point and only competative if you consider that a race to the bottom is a good thing.

#156 Sondra on 04.21.09 at 8:59 pm

#112 Live Within Your Means on 04.21.09 at 11:54 am
re:canning & preserving.

I bet your foxberries are delicious. I have been canning for the last 5 years, ripe peaches, cherries, pickles, and my own tomato/veggie sauce. No way is it a cost saver, but my family tastes the difference,and I use all organic fruit and veggies I’d like to think I’m taking care of our health. All my nieces & nephews beg me to give them peaches for Christmas.

Go back to your canning, I’m sure it delicious, and give the gift to yourself and friends that money can’t buy :)

#157 redcurlygirl on 04.21.09 at 9:11 pm

Hey for all you potatoe people out there, here is my gardening do-it-yourselfer guru to get me growing this spring..he’s amazing and if he can grow it in Edmonton we all can the rest of the country!

(you’ll like him Garth)

Here I am out here in Calgary, in our lovely rental duplex looking at all the real estate signs “springing” up in our neighbourhood in the south west, heck could have gone for 15 open houses this Saturday alone at a whole bunch of empty million dollar infill spec homes.
Finished “The greater fool” before we were moved out here and by reading this blog and some great alberta ones decided to rent and happy we are! Downsized to one car, hubby takes the bus, got rid of alot of stuff in the move, bought the composter last year, the rain barrel will be next week and started 72 little seedlings of veg, herbs and plants thanks to Canadian Tire!

Now to think what to do with all the money we have. The proceeds of the house in T.O sold “$330 net after everything ( including the car loan) split in two G.I.C.’s , one at one year for 3.5 and one for two at 4.5% (to be safe). One already comes up in June…any options anyone recommends? We want to play hardball with the bank…none of this .25% ..one Alberta credit union offering 3.25 that we can fax to our bank and bargain with at least. Now finished reading “After the crash”..yes Garth we got our emergency bag together, spare cash in the house, extra propane tank for the b b que (p.s large fondue pots are great for heating things as well in a pinch with gel fuel), extra canned goods from Costco downstairs and a small inverter that works off the car battery for phones etc .
Plus a place back in Ontario in the woods completely solar and propane and self sufficient
Guess we followed your advice pretty well didn’t we!
Thanks for telling us that owning 2500 square feet is not the end all to beat all and renting in certain conditions is the SMART thing to do.
We’re laughing in a duplex that would be $650 000 ( even with $250 000 down, rest at 5% average for about 15 year mortage ( hey we’re 40!) at $4000 a month ) for $1500 a month, no loss in commissions etc if we leave, no property tax, no worry of mortages..thank you thank you thank you..now to get back to my gardening!

#158 Avenge_Gerald_Bull on 04.21.09 at 10:08 pm

#152 RJ –

Iraq was already demanding payment in Euros several years ago, and trying to convince other oil producers to do the same. That was at least half of the reason that the Yanks invaded Iraq; to try to discourage it.

Now the Chinese want a different payment currency too, for similar reasons; specifically a mix of currencies so that no one country can pull off the same catastrophic stunt that the U.S. did over the last half-century.

#159 Live Within Your Means on 04.21.09 at 10:38 pm

#154 Sondra on 04.21.09 at 8:59 pm
#112 Live Within Your Means on 04.21.09 at 11:54 am
re:canning & preserving.

I bet your foxberries are delicious. I have been canning for the last 5 years, ripe peaches, cherries, pickles, and my own tomato/veggie sauce. No way is it a cost saver, but my family tastes the difference,and I use all organic fruit and veggies I’d like to think I’m taking care of our health. All my nieces & nephews beg me to give them peaches for Christmas.

Go back to your canning, I’m sure it delicious, and give the gift to yourself and friends that money can’t buy

Hi Sondra – I’d dare not open the foxberries. My Mom preserved them the year my eldest bro was born. The date is still readable. I just keep the jar for sentimental reasons. Think they’d be deadly .

Glad to hear you are canning/preserving. Agree the taste is so much better. I too canned toms from the garden. My neighbour grows peaches. Unfortuntely, my stubborn hubby won’t let me get rid of some Mirabel plum trees that only grow in his area of France, but are not suitable to our acidic soil & wet springs. Plus they propogate by underground roots and suffer from blacknot disease, which is a N.A problem. So each spring & fall he has to do major prunning & we’ve only tasted a couple of their fruits in the last 12+ yrs. I’d rather grow peach & other fruit trees. But, hey what do I know. I’m just a silly woman who doesn’t know a fiddlehead from a brugmansia.

I hope you keep canning & preserving Sondra. Agree, nothing like sharing the fruits of your labour with family & friends. Just wish my health allowed me to continue doing that now.

#160 M I K E on 04.21.09 at 10:39 pm

What Am I missing here?

Does it not go something like this.

Oil up = U.S dollar down
Oil Up = Gold Up
U.S Dollar down = Gold up
Oil up = inflation, since everything is tied to oil
Inflation = Gold up

Oh yea, Garth has been calling for the coming inflation
So this time it’s oil up and gold down Mr Turner?
hey you’re the prophet around here.

With that said I do agree with you on max of 10%, purely as an inflation hedge, but of course Jim Sinclair would not.


#161 smwhite on 04.21.09 at 10:54 pm

Lots of good stuff to thumb through here, I especially like the “Golden Brown” Gold Rally Indicator, priceless.

As for ETFs, whats the worst if they can’t deliver the physical gold, your stuck with Obama bucks. Having all of your 80% of your worth in any one asset class, well its not smart, and isn’t that what brought most of us here?

This is the article from 2004 speaks values about gold to oil and their relationship and some of that inflation gibber jabber.


“When my original essay advancing these arguments was published over four years ago in June 2000, oil was trading near $32 and gold around $292. Since then gold has run up nearly 47% while unhedged gold stocks (HUI index) have screamed 340% higher! It definitely leads to big wins to pay attention to the gold/oil ratio and trade accordingly rather than fretting about higher oil prices.”

As mentioned above about gold stocks versus shares, I agree 100%.

“This chart highlights the four-decade GOR average line in white, which happens to be at the level where an ounce of gold will buy 15.4 barrels of oil. In addition, we drew in standard-deviation lines to help judge the degree of extremes. By definition, 68.3% of the data points are within one standard deviation of the mean, 95.4% are within two standard deviations, and a whopping 99.7% are within three standard deviations. The farther out that a particular GOR extreme is from the mean, the rarer it is statistically.”

As of today the gold/oil ratio is at 19, which is above the overall average of 15. To quote the article, either oil plunges or gold soars or both to bring the Gold/Oil ratio back into line.

Make your own conclusions where it’s(gold price) going.
Gold continues to show great resistance against the powers of deflation and I’m sure its pissing off a few central bankers, presidents and prime ministers.

#162 timbo on 04.21.09 at 10:55 pm

#148 Cash is king

here is a bio on that link of yours.

sheep that drink in words from salesmen, lol!!

#163 eddy on 04.21.09 at 10:55 pm

even REDC foreclosure auction adds 5% to your winning bid

nytimes auction article


#164 The Coming Depression on 04.22.09 at 12:29 am

Grthj your in la la land with GOLD. First of all the price of Comex Gold and the street price has been debased or what Jim Sinclair says backwardation..True backwardation occurs when the front month moves to a PREMIUM over the next month and particularly over the next set of three or four different contract months. Garth you don’t understand the GOLD market so why do you even speak about it. Have you gone to your local coin shop or ebay and checked the prices of SILVER or GOLD? It is different than the criminal Comex.

Blah, blah, blah. — Garth

#165 Future Expatriate on 04.22.09 at 5:23 am

#147- I did, many years ago, and I haven’t regretted it a single second since. Gold would have to go lower than physically possible for me to have lost anything. No matter how much dumping might happen in the future.

#148- FANTASTIC article… I agree completely! Definitely explains all the desperate pooh-pooh.


#166 smwhite on 04.22.09 at 9:37 am

#159 smwhite

As mentioned above about gold stocks versus shares, I agree 100%.

..gold stocks versus bullion…

Some more to chew on, gold/silver ratio…


If you have my wallet your stuck with silver maples, if you have garth’s wallet, you can make the choice to buy gold maples…

#167 Bill-Muskoka (NAM) on 04.22.09 at 9:39 am

#145 Dave

Actually, I disagree with Garth on a lot of RE issues. But then, you being a newbie around here wouldn’t know that. You disagree with what I say because it causes FUD in your little world. Too bad. What I type here is my opinion, and not Garth’s. Never has been.

So, keep up your mantra because there are those who you owe. I owe no one.

#168 Bill-Muskoka (NAM) on 04.22.09 at 9:42 am

#142 Glenn


You are shaking their tree with historical facts. They can’t comprehend such things.

#169 JTH on 04.22.09 at 10:04 am

“Gold at its 1981 all-time high of $850.00 is dirt cheap in 2009. The best analogy I can give you is to buy a new 2009 Mercedes Benz at 1981 prices. Do you know of anyone who would turn down an offer like that? I don’t. Gold is the epitome of value and investing in true value is the only way to protect your future. Gold is going to become money and all the Geithners and Bernankes in the world will not be able to stop that train. If you want to store your wealth, you had better buy gold while it’s cheap.” – Richard Russell, 19 April 2009

Russell has been commenting on the market since you were 9 years old, Garth. I’ll take his word on gold over yours any day.

Richard who? — Garth

#170 Glenn on 04.22.09 at 6:21 pm

#166 Bill-Muskoka (NAM) on 04.22.09 at 9:42 am #142 Glenn


You are shaking their tree with historical facts. They can’t comprehend such things.


I begin to suspect you are right, Bill.

I may as well go for broke then.

HEY GARTH! May I ask another question? Garth, did the economic collapse of Argentina (circa 2001) actually happen?

If yes, did the entire middle-class of Argentina get wiped out? Also, is it true that Argentina was considered almost 1st World as far as properperity…before the implosion?

Lastly, did the Argentinian monetary unit also drop to its inherent value (toilet paper) during the above mentioned “conspiracy theory”?

If no to the above, just call me a drugged out delusional gold bug.

Try reading “The Ascent of Money,” for answers (the correct ones) to your questions. — Garth

#171 DBG on 04.22.09 at 7:40 pm

#162 The Coming Depression

Goldfinger was a good movie.
Otherwise gold and hoarding are passe. We are global now baby. Enjoy the fiat and use it like it’s 1999.
Yeahhhhh baby.

#172 Davinci on 04.22.09 at 11:30 pm


Thanks for responding to my email, if you truly understood the gold market you would understand why it did not react to all of those events you pointed out.

I will tell you why bluntly but I expect you not to believe it as I did 2 years ago.

Gold and silver are managed markets and the price is held down even though there is record paced buying. There is much evidence of this, explaining how and why it is done. If you take the time to research it and cross ref the data, the truth becomes clear if you chose to look it up.

My average buy in for gold in 2008 was $900 Canadian and even right now as I write the Canadian price is $1100.

If you have only 10 points of your net worth in gold that’s good enough for a person who does not understand gold or care to learn more about it.

Finally I would like to say thank you for not getting to upset with me. Most paper money lovers call me stupid or clueless, even after calming them down, I never know why they hate gold. With you, I know why, it’s because you don’t understand gold and it’s history.

Thanks again,
I am very happy with your response.


#173 Future Expatriate on 04.23.09 at 12:56 am

#171- Austin Powers is so 1999…

Keep selling gold so I can keep buying it at bargain basement prices. Surest way to world domination for me and ma boy Scottie yet….

Dr. Evil

#174 Sean in E-Town on 04.23.09 at 1:41 am


1. Your realtor? Sue his ass if you have something on paper. It won’t be 40 hours of your time and will net you 2300 plus satisfaction. Well worth the price. Or better yet, report him to his association. Last thing they want is an embarrassing small claims case. That’s as outrageous as the realtor who wouldn’t put in the bid on the TO house.

2. You made a fantastic sale. That house won’t ever rent for $2800 a month. So it won’t ever sell for 280K again either. I’ve become fairly convinced that the rent-price ratio is not so much an indicator as an iron law as time goes on. You might get a deal, someone who has a place that they can’t make whole, but that you can, and so they’ll sell it to you for less than it’s worth to you and more than it’s worth to them, but you will never be able to sell that place, spit and polished and gorgeous, for much more than it would rent for 9 years for, for much more than 2 years’ pay. So be glad you got out with that much of the bubble’s gains now, because in a couple of years, in real terms, it will be worth what it ought to be worth, which so many speculators and flippers and other yahoos are convinced, their blood-koolaid content over economically legal limits, is next to nothing.

#175 Glenn on 04.23.09 at 6:48 am

Er…*gulp*…uhm. Garth, did you mean the PBS documentary called The Ascent of Money?

If so, you are aware that PBS is a gov’t funded entity? Much like the gov’t funded “education system” can be counted on the brainwash…I mean “teach”…a statist view, we can count on PBS to toe the line.

That line leading straight to the current global financial fiasco we find ourselves in.

Please tell me Im wrong here. If not, things are much worse then I imagined.

I better go check on gold and silver. Thats what crazy people do, it seems.

The book, not the TV show. — Garth

#176 Danforth on 04.23.09 at 12:26 pm

“Now, about those houses.”, and is followed by a picture.

Those two housers are on my street, in the neighbourhood of Coxwell and Danforth in Toronto

On the market about a month, but prices were similar to what this street saw a year ago.

#177 Daniel on 04.26.09 at 4:17 pm

In regards to the gold bullion comments. If one were to read the Kitco gold chart,you could identify the elliot wave theory at work. From the November 08 low to the February 09 high, gold had made 5 new highs in line with Elliot wave theory and is now completed 2 of 3 down waves. A possible low for down wave three is in the low $800’s. All in line with bull market action and corrections.
Also, it really frustrates me to continually hear gold always displayed in U.S dollars and not in our own Canadian dollar. If one were to do that and apply that to the physical gold price the Kitco chart would look quite different. For example when gold first broke the $1000 U.S barrier , our dollar was worth $1.10 u.s. Gold at that time in Canadian dollars was roughly $900 for a difference of 30% canadian.
The second time gold breached $1000 U.S. gold was roughly at $1200 Canadian.
If gold is dead why then the 30% increase ? Is that a terrible rate of return in a deflationary environment ? Compared to current declines in both stocks and real estate, gold is up 30% ; not down 30% like the other asset groups. that is a difference of 60%. Not bad for a dead asset !
Truly gold is behaving like a storehouse of value that it is in turbulent times. The 30% increase in the Canadian gold price merely reflects the Canadian dollar decline relative to the U.S. dollar.
I recently purchased your book, and both me and my wife enjoyed reading it and would recommend it.