The ride


For reasons unknown, the car rental lady at Halifax airport said there were only two vehicles available. A Hyundai Accent or a Lincoln Town Car. “Which do you want?”

Is this a trick question, I asked?

Speaking of cars, the fix is in that GM will be going bankrupt in two weeks. All that’s unknown is in how many countries the industrial giant will be seeking protection from the courts, but I cannot imagine GM Canada will be spared. If creditor protection is followed here, and the Chrysler model is any guide, that means an instant shutdown of manufacturing facilities until the courts are done – likely in two months.

Of course, this is all contingent on the unionized workers eating more of their wages, and governments handing over billions that taxpayers will never see again. It’s an imperfect solution for everyone, but politicians figure that letting a failed, discredited, moribund, terminal gorilla like GM fail right now would be too much to handle.

This comes amid news Canada is still in a “strong slowdown,” according to the OECD. Despite what the MSM tells you (see previous post), there are virtually no signs right now our economy is snapping back into recovery mode. The US, Russia, Japan, Germany, Brazil – and Canada – are still in decline, according to these guys, while there are “tentative” signs economies in France, Italy and Britain have staunched the bleeding.

If this is so, a decision to (say) buy a house with a small mountain of mortgage money could be more than dumb. The cost of that loan will be at least double by renewal time in five years, and there’s no guarantee of any capital appreciation in the real estate. Not only will financing charges rise, but so will energy costs and (I betcha) property taxes, just when  9,000,000 freaked-out, house-rich and cash-starved retiring Boomers are dumping their Scarlet O’Haras in the burbs.

Worse, our future also guarantees higher income taxes and less government support, since Ottawa – like Washington – has just led citizens into the jaws of a generational debt trap. This will happen after the current recession has hollowed out a lot of our manufacturing base, destroyed iconic companies like Nortel and guaranteed a high number of jobless for at least the next five years.

And did I even mention peak oil, climate change, pandemic, or the infidels overrunning Pakistan?

In other words, low mortgage rates and slightly reduced real estate values are hardly enough to offset the obvious dangers which lie in the weeds. How young buyers can be confident their incomes will swell enough to cope with higher rates, or houses grow in value to overcome the burden of carrying costs is unclear. Maybe they actually believe the real estate experts on TV. God help them.

Of course, owning property is absolutely fine. I sure do. But debt isn’t cool. Nor is having more than 40% of your net worth in real estate. If you can’t see that in your future, stay zipped.

So I pulled into Wolfville, for my gig, in a Town Car.

Then Dorothy made me park it behind a dumpster.


For Garth’s latest podcast, go here.



#1 Grumpydawgs on 05.11.09 at 5:17 pm

The US government is currently borrowing .50 cents of every dollar it spends. The current deficit is a whopping gen -changer 1.8 trillion dollars…. OMG. And that is going to lead to what? Did you say massive tax increases and much higher intrest rates? If you said yes , you aren’t completley brain dead.

We are being told to look for ‘green shoots’ is this something a ‘chicken in every pot’ or ‘better days are just around the corner’? NOTHING suggests that we are at any kind of bottom. We are still going down. The spin is that we are not going down as fast, what is the good part of that thought. Hope and optimism, better get some, we may run out soon.

Don’t blame Haper they say, don’t blame Obama,these are the good guys. LOL

#2 Crash on 05.11.09 at 5:43 pm

Rather than pour billions into the bottomless holes that General Motors and Chrysler will become, I’d rather see the government back new technologies like the Tesla electric car,or Canada’s own ZENN electric car. Electric automobile technology is almost to the point of going mainstream, and if there was the same substantial funding that is being shovelled into the dying automobile companies was going into electric car R&D, we’d soon be ready to move into this new technology and put the gasoline automobile out to pasture where it belongs. GM already proved with their failed EV1 that they don’t want to produce electric cars.

#3 Living in Calgreedy on 05.11.09 at 6:32 pm


Thanks you so much for this post. I’m 40, very low consumer debt, renting, no car and am dropping a huge chunk of money on my back taxes every month. I’m working hard to put myself in a better position and posts like this help a lot.

A good number of the people in Calgary still don’t believe that the party is over. When I tell them I don’t want credit and that I want to be debt free they look at me like I’m a leper.

Thanks for being one of two places that I go to on the web that lets me know that I’m on the right track.

Don’t even get me started on trying to get a date in this town after you say the words, “I don’t own a car.”

#4 lotusland? on 05.11.09 at 6:45 pm

I hear ya Garth, but it’s tough. there’s more activity out there, the dead cat bounce is in full swing and some of us have been sitting on the fence for sometime. I hate renting……….yes, it’s an emotional position, but it’s true. you don’t feel attached to the place, no desire to fix it up, it just doesn’t feel like a home. That’s okay for a kid, but I sold my place 3 years ago and I’m tired of the fence……..

The problem being, you could sit on that fence for a very long time, 5 years? Where do the lines cross between the emotional comfort of owning a home and the bottom of the market? Hell, if I knew that I wouldn’t be writing, would I ? Houses in the burbs in Vancouver are coming down. the area I am looking in has gone from mid $500’s, to mid $400’s. I would like to get in for $400 or less, but if that takes a long time (2-3 years), I might be better of getting in, hitting the principle hard with 3% interest and ending up in the same place. I sure as hell ain’t making any money with my down payment money. In the last year, it feels like anything you put your money in is a sinkhole. If there’s a solid 5-8% out there for the next 6-12 months, let me know. I will be all over it.

I know your right, but it’s tough to stick with the plan…..

#5 David Bakody on 05.11.09 at 6:50 pm

I am not sure but there must be a way to collect more EI if one is self employed especially if they hire family members …… playing the UI/EI game is not new news is it? …… so these employment numbers just may be bad news. Also come income tax time next year will be interesting. Guest this went well over the heads of the MSM. Also Harper’s news without investigation or comment just may have fueled more housing sales compounding the sadness that awaits home buyers in the near future.

#6 Da HK Kid on 05.11.09 at 6:53 pm

Just look at the big picture drawn around the RE market if you wish to be guided. Boomers in denial over what they think they have lost and what might be the recovery and their future 10-15 years out!

Foreclosures are up with the second bubble being formed as we speak by our trusted pushers. Deflation will be around for another 18-24 months as stock market rallies fizzle and pull back, stagnate!

Dont watch the DOW or S&P, keep your eye on the trend of the NASDAQ as it is not gained back its upward support position and has been throughout history of this bubble the leading indicator of how we are doing in NA and 1st world countries.

As the car companies take a dive more loose their jobs and cannot find replacement work for years, see those $400K+ homes foreclose along side boomers selling out and in Toronto anyhow not a one looking to pay an extra 8 points!

Deflation will only hurt your high ticket items. Dont mistake Inflation for food prices going up as demand is down overall, but producers will stop producing making supply tighter. You may see the lower priced brands creep up to medium priced quickly as they will be initially in demand. Walmart price watchers WANTED! BABY BOOMERS OR AUTO WORKERS PLEASE APPLY!

A decade of savers is underway for sure especially when the denial is over and for the western world with no domestic product to survive on, saving kills GDP! More jobs!

Unemployment will be growing for at least another two years I fear as all of this first round damage and phony recovery needs to be paid for with much more of the above.

Whoever thinks 30 years of abusive government stimulus spending along with destructive consumer spending is just going away in a year is believing in their own demise.

Get your house in order now, especially when cash is king and you have all your savings in your home. Simply step off, stuff your pockets, rent a home and sideline yourself and watch it unfold. Being debt free is your ultimate survival and hedge.

I agree with Garth, ONLY 40% of your net worth should be in something that has little growth potential which puts a roof over your head. Rent until you have the 40%, that should take enough time for you to see the future unfold kiddies!

Good Luck!

#7 Ultraman on 05.11.09 at 7:04 pm

One for the bears.

I had my place appraised (908 sf condo, downtown Vancouver) Nov. 07 for $590k. Had it appraised last week $490K. Same appraiser. Also I just had my hair cut, No 1 all the way. Clean shaven for the summer.

#8 Da HK Kid on 05.11.09 at 7:08 pm

Another disturbing article:

One reason the employment losses slowed somewhat in April was that the government added 72,000 jobs, most of them temporary hires as part of the preparation for the 2010 Census. The private sector dumped 611,000 jobs. Moreover, the Labor Department revised the job losses for March upward, from 663,000 to 699,000, and for February, from 651,000 to 681,000. Some 5.7 million jobs have been lost since the start of the recession in December 2007.


#9 marty on 05.11.09 at 7:17 pm

“How young buyers can be confident their incomes will swell enough to cope with higher rates, or houses grow in value to overcome the burden of carrying costs is unclear. Maybe they actually believe the real estate experts on TV. God help them.”

Well, nothing’s perfect, like buying in 2006 and only 10% down . but we budgeted (our budget, not the banks crazy-sick 32/40 ratios) at 7% interest rate.

But 2010 town budget will need to be kept on eye on.

#10 . . . fried eggs and spam . . . on 05.11.09 at 7:21 pm

Couple in question are two of the New Style Of Shoople’shrooms.

Growing up on a dark manure mushroom farm, they are now living a wildly extravagant and decadent lifestyle, but expecting boomers to bail them out.

Curious viewpoint, but let’s entertain them for now. After all, it’s “Money For Nothing (And The Chicks For Free!)”.

Wait! Boomers are broke! They can’t bail us out! Never mind, the provincial and federal govts. will help! We’ve done nothing wrong!

Oh no! The govts. don’t have bailouts for taxpayers anymore! Too busy bailing out Dead Dinosaurs, who are producing cars in different parts of the world!

So if no one is going to bail us out, banks are foreclosing, all the McJobs are spoken for then it’s time for action!


So I’m Chocolate Covered Macadamia Nutz, but what the hell! I’m having loadsa fun in the process!

“. . . also guarantees higher income taxes and less government support, since Ottawa – like Washington – has just led citizens into the jaws of a generational debt trap.”

Nicely designed fiscal takedown, because for each down there must be its’ opposite — the UP. See link following link for further info., plus find out who is profiting from the downturn and there is the cause of all this.

Garth’s old political blog (if it still exists) had links which pointed to this taking place. It’s water under the bridge now, but I guess I’m not intelligent enough to comprehend, or understand why folk are so transfixed by worthless material junk, buying garbage as if it’s going outta style.
At first, I thought this was a US-based link. Not so. Good ol’ Kannahduh! — — (Square parens mine)

IRS / CRA and the Lottery

“I am certain that you, also, have felt the effects of the IMF on your personal finances. Whatever your loss, it is important for you to know [that it was all by design and intention].

“Please realize the truth of this, before you consider confiscating, from me, the meagre amount that I have, compared to what IRS/CRA will receive, forever, from my signature. I created ALL the value and IRS/CRA is the beneficiary of that.

“Then, please, consider a job more suited to your ethics. You’ll feel much happier and your family will be very proud of you.”

#11 timbo on 05.11.09 at 7:34 pm

just had to post this as it brings back memories. The cat to me is a mortgage payment.

#12 ts harpoon on 05.11.09 at 7:47 pm

And now a message from our sponsor(s)…

Garth Turner continues to lead. May I remind all of us that this is free information-take it or leave it. Who could imagine, relevant information that just may spark an internal dialogue within us that could lead to rational decision making. It may have started as a digital democracy project, but GT’s work today, yesterday and the day before is true public service.

Back to our regular scheduled program.

Brad Lamb, Stephen Harper and Mark Carney ought to be dragged over fifteen miles of broken chardonnay bottles behind a GMC Yukon.

Stay tuned.

#13 Devil's Advocate on 05.11.09 at 7:57 pm

There’s an eerie calm in the air at the office. More talk of multiple offers. Prices have actually risen in each of the last four months, 5.25% increase January to April to be exact. First time buyers are visibly present in the marketplace and actually gobbling up anything resembling a median affordable home. Attempted viewing appointments are met with a disappointment that accepted offers are in place. Sellers are not so willing to negotiate as they see more “SOLD” signs in their neighbourhood and listen to news of a returning “sellers market”. Yes there are many positive signs Perma-Bulls might point rejoicing fingers at while ridiculing the Chicken Littles.

Yet below the surface a quite different story is brewing. A great many of those construction workers who just a year ago were being run off their feet have now not been able to find work for over six months. Many of them haven’t been meeting their monthly credit obligations and the banks are being forced to play their trump foreclosure card. Demand notices are starting to come to a neighbourhood near you. But that’s just the start as these notices are just a demand to bring their account current. It will take a continuation of missed payments and subsequent letters from the bank before the courts are asked by the bank for a conduct of sale. All the while these homeowners are putting up a brave smiling face such that you wouldn’t know what’s going on behind their closed doors. In the morning they smile and wave as they hop into their $45,000 rig and head off to the welfare office. Yes all looks fine… just fine indeed – the Perma-bulls are quite sure

In the twelve months of 2007 (the absolute volume peak of the market) and well into 2008 (the absolute price peak of the market – price always follows volume – up or down) I estimate that a good 50% real estate transactions were zero down forty year amortizations and a significant portion of those were taken out by principle income earners who’s wages depended on the construction industry. If anything has dropped off the map it is the sale of vacant lots… Why? Because NO ONE IS BUILDING new homes.

We’re being told a lot of truths of the moment about the market but what we are not being warned of is a tidal wave of defaults that loom on the very near horizon. Unemployment is our biggest concern today. Without an income you can not pay your mortgage let alone food and utilities. Tell me what is going to stop this tidal wave of mortgage defaults. We are but six months into this economic meltdown. It takes closer to twelve months to forclose on a mortgage in default.

You think it has turned around? I’ve got news for you, we ain’t seen nothin’ yet.

#14 JO on 05.11.09 at 8:16 pm

Good words Garth. As usual, the herd moving into the largest purchase of their lives will get the short end of the stick. If anyone believes in “efficient” markets, a simple look at the RE market in the last 7-8 yrs (and especially last 2 mts) will see signs of obvious delusion. Most of these property virgins, had they been prudent, could have rented a place of much cheaper and with no risk of detsroying their balance sheets. The extremely optimistic mood toward RE borders on bizarre. I see it everywhere.

Tragically, our government and central bank have decided to pump the final nails in the coffin which will surely seal the fate for anyone who “bought” in the last 7-8 yrs…and anyone who has purchased in the last 3 is done. If these recent homebuyers step back they would see nothing but hude red flags:

1) Exploding unemployment – what does that do for home prices?
2) Everyone loves RE . This, more than any chart or stat, is the single most worrisome factor in seeing the market will very likely be a disaster over the next 5 yrs.
3) Record low rates. All this means is the next major trend in rates is upward of course. I am expecting a major bear market in long gov bonds by the Fall.
4) Rising unemployment and falling RE prices mean banks will need to add default premiums in rates.
% Property taxes will rise over the next 3-4 yrs..until the masses revolt..which is GUARANTEED ! Eventually, scared politicans will do what should have been done right away – cut gov spending !!! Yes, that is a foreign concept..only until massive tax protests and more importantly, jittery bond investors give the politicos a proverbial middle finger..the bond market is undefeated against the socialists and other interventionists.

So for most, the 0/5/10 % down payment will be gone..then, at renewal time, imagine the rate going from 4.50-5 to 7-7.50 (potential for more) which means payment goes up significantly…the horrorof seeing equity evaporate, monthly payment explode, taxes go up..and house value down 30-40%..what a mix..the making of a true generational catastrophe..

#15 Aston on 05.11.09 at 8:17 pm

Bond yields have gone up sharply in the past few days. Expect fixed mortgage rates to go up pretty soon… and take down house prices with it.

#16 My_view on 05.11.09 at 8:35 pm

Forgot to add, the earth being hit by a ASTEROID!

#17 MenWithHats on 05.11.09 at 8:56 pm

Edmonton housing posts 12 ,per cent slide .

#18 john m on 05.11.09 at 8:59 pm

Great post Garth..just curious why you took the lincoln ha,ha…I can not by any fiction of my imagination understand the mindset of the people buying houses right now?We had a hell of a problem in October now we have a larger disaster in the making—a celebrity President making the rules and our sheeple prime minister following every step of the way.Trillions and billions have been thrown to the wind by each respectively…. dishonest propaganda supporting their actions…… telling us things are improving as our neighbours worlds fall apart…..bullshit doesn’t create a job or put a meal on anyone’s table.

#19 squidly77 on 05.11.09 at 9:08 pm

multiple offers ?
you mean as in i offered 20% below asking price and the offer was denied so i re-tendered at 18% below asking price and it was accepted
that would make it a completed sale with multiple offers

words can be deceptive..

#20 squidly77 on 05.11.09 at 9:17 pm

5.25% increase January to April to be exact. First time buyers are visibly present in the marketplace and actually gobbling up anything resembling a median affordable home..

wrong again..where as prices may be up slightly carrying costs are down dramatically
$400,000 @ 6% = $2559/mo
$400,000 @ 3.5% = $1997/mo

thats a $562 monthly saving and over the 60 month loan period its a savings of $33,700 or a saving of 8%

personally if i were a buyer i would prefer to buy in a relatively normal to high interest rate environment as high interest rates are house price killers

#21 Madame Guillotine on 05.11.09 at 9:20 pm

I had a feeling you had read Mary Croft Fried Eggs.
Robert Menard too?

#22 john on 05.11.09 at 9:37 pm

A future rate of 6.25 – 7.25 % is hardly something to worry about. This is the thing, we are talking in hypotheticals and I like to believe I will benefit from my frugal ways however I just am having a hard time seeing things evolve quickly.

#23 eddy on 05.11.09 at 9:42 pm

“The cost of that loan will be at least double by renewal time in five years, and there’s no guarantee of any capital appreciation in the real estate.”

People know that they are working within a zombie world economy on life support. five years from now i expect high or hyper inflation -savers will have been punished hard and debtors will be rewarded- like the endless list of corporate bailout freeloaders. the government subsidizes your loan now, you get good money at low rates today to buy your house, but you pay them back with dollars that are less valuable. from what I’ve been seeing, price inflation Is guaranteed. even if rates double within five years i do think that prices will have risen enough to offset the rates.

#24 Rachel Corrie, martyr on 05.11.09 at 9:48 pm

#2 Crash –

No point in building or buying an ‘electric’ car until the correct energy distribution is put into place.

The battery-heads all want to assume driving is random and sport-oriented. They don’t want to have anything to do with electricity distribution beyond charging plugins.

BUT, most driving is over the same routes (getting to work, buying food at the same grocery store, going out to the same places, same gym, etc). We need either a tethered (trolley system) or semi-tethered ( meter-length wireless power) distribution along common arteries.

That’s so that we don’t end up schlepping around a quarter-ton of batteries everywhere, with their vastly restrictive ranges and very limited life.

Electric motors are very nice because, in addition to smoothness, very high torque, extremely long life, and nearly zero maintenance, you get away from carrying around heavy fuel everywhere. Further, an electric motor that converts electricity to mechanical torque is way lighter than an engine that converts gas or diesel to torque. We must not exchange dragging gasoline around for dragging batteries around.

#25 Rachel Corrie, martyr on 05.11.09 at 9:52 pm

#3 Living in Calgreedy –

Bullshit. You just need to live near where the action is, so you can walk there. If your dates are out in the boonies, maybe that’s the problem.

#26 Rachel Corrie, martyr on 05.11.09 at 9:55 pm

#4 lotusland? –

So attach yourself to something besides a “little patch of land”.

How about a guitar, or motorcycle, or girlfriend, or an airplane, or career, or boat, or higher education, or politics, or a “free electric band” ?? .

#27 OK Garth, where do we put our money? on 05.11.09 at 10:02 pm

Garth, I read your books, and follow your blog. I also sold my house & retired debt.

Stocks suck (I’m not a short-term trader), commodities will drop again, gold is questionable (but my wife is all for it!), commercial real estate is gonna tank, bonds & GIC’s are a bankers’ joke.

Can’t buy an apartment bldg, as who knows what the re-finance rate will be in 5 yrs.

Where/what/how do we preserve our money; is it too much to ask how we can prevent the coming inflation from eating away at it’s value?

How about an article on that?

#28 smwhite on 05.11.09 at 10:28 pm

#16 My_view

Do you know where?

Location, location, location…

#29 Fool me once... on 05.11.09 at 10:30 pm

#4 Lotusland
I share your thoughts. I’ve been predicting this outcome in the market for sometime. Very happy to have read “Greater Fool” and find that I was not crazy as everyone thought I was. But………
Like you, I’m in my 40s, and while I agree renting is the smart way to go, I too am getting tired of not being able to paint as I like, add things I wouldn’t think of doing to a rental unit. Our landlord has announced that he would like to move in himself next spring.
I do not want to buy on emotion, but it sure would be nice if in 12-18 months I could feel comfortable enough to give my family some stability.

#30 smwhite on 05.11.09 at 11:02 pm

The NIKKEI dropped by 50% and was back up about 20% in the run of 16 months or so.

The slowly bled to death when it finally hit bottom at 7,000 in 2003, from a high of 40,000.

Yeah, demographics and psychology have nothing to do with markets…

Supply sure does.

And there is a generation banking on their children’s ability to pay 50% of their net worth on shelter.

One problem, that “extra” 15% – 20% that is spent on bricks and mortar isn’t being flushed into the economy.

Guess when this shit gets figured out I’ll be able to replace my Monte Carlo every 3 years again…

#31 Nostradamus jr. on 05.11.09 at 11:56 pm

…Across the U.S. this time next year there will be a Nationwide Strike.

Taxpayers will refuse to pay their Personal Income Taxes.

…For decades all U.S. Personal Income Taxes collected has been siphoned to pay interest to the holders of Treasury Debt….

…the largerst Creditor being China….

China is the root cause for more than two decades…China has played the Manufacturing Economy by paying its workers 10% labour costs vs the rest of the world.

That is why China is now diversifying into Gold and Copper…but that will not help…

The U.S. will be forced to Nationalize its debts…just for starters.

Think Illegal Immigration

Think Prison Populations

Think War with its evil neighbour “Cuba”.

Think…Vancouver will be recognized as the new Financial/Trade/Culture/Leisure capital of North America.

…I predicted this nearly 500 years ago btw…

#32 Investx on 05.12.09 at 12:13 am

Garth: “The cost of that loan will be at least double by renewal time in five years, ”

Didn’t artificially low rates last for a while during Japan’s “Lost Decade”? Can’t it happen here?

No. — Garth

#33 Da HK Kid on 05.12.09 at 12:32 am

Lets face it, even if you take all the other factors off the table and just focused on RE and you attached job losses to it, this spiral will continue to plague us for at least 3-5 years down the road.

I have said this numerous times, so regulars please be patient as newbies need the skinny;

Stage One – Sub Prime Mess
Stage Two – Re-inflate bubble via perceived bottom and cheap rates
Stage Three – Commercial Mess and Option Arm-Alt A’s coming due, to what $2 Trillion.
Stage Four – Further 15-20% losses on home values, that sucking sound of 10-25% down mortgages underwater bought between 2004-2008.
Stage Five – Oversupply of homes current to go to 12 months, shadow inventory of approx. 800,000 homes released now on banks books.
Stage Six – Unemployment reaches 12% U3, 25% U6 numbers. Housing inventory 18+ months?
Stage Seven – One in 5 houses are under water, unemployment out of control, taxation only answer, mortgages taken in Stage Two now coming to term 2014 and interest rates closing in on double digits plus the drop in value = cannot refinance and you can swing a stick and hit a foreclosure.

Our children and their children pay for the mess we created fueled by Baby Boomers who btw have spent all their retirement (which isnt much as the home was the saving vehicle) on Health care costs and are a burden on society.

Garth, she made you park out back by the dumpster. Little did they know dumpsters would be in high demand by 2015.

Newbies, gets your facts straight, set up a timeline and plot it out yourself.

Does anyone believe this is a once in a time opportunity to buy a home? Get real!

#34 lightning_kash3 on 05.12.09 at 12:35 am

When do you think the alternative energy start to have such an impact which drive less demand on oil? I am a little confused as you seem you highly support for alternative energy but peak oil will hit us in our near future. Is this because this is due to the dark side of politics? Oil = Money?

Renewables will never account for more than 10% of demand, until demand withers. This will not end well. — Garth

#35 Vancouver_Renter on 05.12.09 at 12:40 am

With regards to inflation, it seems to me that the hyperinflationists are looking only one move ahead in the game. They think that money printing will lead to higher asset prices, including real estate. In their view, debt will be inflated away.

But printing money (aka quantitative easing) is going to lead to bond holders demanding higher and higher yields. This, in turn, will severely punish anyone with debt. We’ll see massive defaults and debt contraction, given the world is awash with debt. This will have the equivalent effect of reducing the money supply. And new demand for practically everything will decline, given the savings rate is so low and debt is relied upon to make most purchases these days.

I think the inflationists forget that we’ve HAD inflation for decades now. You could argue we’ve had hyperinflation, actually. My parents bought their home in a Vancouver suburb for $2K in the early 1960s and it was valued at a peak price of $900K in 2007. That’s a compound depreciation of the currency of almost 15%. Now THAT’S inflation.

I think we’re in for 10-20 years of deflation. And there is plenty of historical precedent to back up that view. In the last 5 major post debt-bubble contractions in the last few centuries, it took a generation of deflation to flush out the excesses. Everything wasn’t fixed in 6 months!

The housing bubble has reminded me of the NASDAQ in the 1990s. Many of us knew tech stock prices were insane, made no sense, and would eventually collapse. But it took longer to pop than I had thought it would. I sold my portfolio in 1998 yet had to wait an agonizing 2 years before my suspicions were confirmed and the bubble finally burst.

In Vancouver, the real-estate bubble is also going to burst, but when? Later this summer? Possibly. After the Olympics? Probably. Once it does, I think we’ll be in for a decade or more of prices trending ever downward. The day will come, someday, when this blog will be void of readers and contributors because real estate will have been dead for years – along with many of the Baby Boomers and their “golden era” of asset appreciation.

Young home buyers and investors who are buying today with big mortgages are going to be impoverished for life, as a consequence.

But maybe I’m wrong.

#36 Munch on 05.12.09 at 1:26 am

Hi All

I really don’t want to trump Garth’s daily notes, I really don’t, but this fellow really writes well and will add a lot of value to your thinking when read in conjunction with Garth’s own thoughts.

Scroll down to the weekly column, this week called “Decoupling From Reality” – it’s really worth your reading it.

Are any of you “Cannucks” coming to South Africa for the soccer world cup? :o)


Munch, from Johannesburg

#37 Winning Pegger on 05.12.09 at 1:40 am

Where’s squidly77 these days? I miss his hourly rants.

#38 . . . fried eggs and spam . . . on 05.12.09 at 1:46 am

With all this blithering horsefeathers rubbish going on thruout the world, it is evident this was started in order to keep Shoople’shrooms attention distracted away from a few other things, which are shown following.

Hence, from From Vive Le Canada! A rather revealing article, with some out-takes. —

“Global Crisis: How Much Time Do We Have? . . .

“Plan ‘A’ seeks to resolve the on-going financial ‘crisis’ through merely financial measures. It’s not working….

“Plan ‘B’ will seek to resolve the ‘crisis’ by a comprehensive overhaul of the global financial system, which among other factors will include introducing a New Dollar, backed by ‘foolproof’ gold bullion. This will allow the global elites to transfer the bulk of Wall Street and European bankers’ losses to other geographies (amongst them, China, which is one of the focus of present crisis, as well as Latin America), and

“Plan ‘C’ that will seek to ‘kick the chessboard’, so to speak, triggering a planetary war.
Note the word ‘crisis’ in quotes. Simple fact is there is NO crisis at all — using fear controls people; consequently, they become willing and obedient slaves to unknown others, and stand in line waiting to be told what to do.

This is what the m$m is controlled by and for — the elite use it to propagandize their doublespeak, and Shoople’shrooms buy it hook, line and sinker.

One thing that will mess up all these ‘plans’ by and for the elite would be a series of increasingly-occurring natural calamities, which aren’t disasters at all, just a very good — and extremely effective — method of the earth righting itself (it’s wonky and wobbly at present), and no one can do anything to prevent it.

I put it to you, fellow bloggers: Can two major pole shifts be arranged for 2011-2012, one north / south turning upside down, the other east / west turning inside out?

I believe I am morphing into a Monty Python sketch!
Weather in China sure ain’t helping matters. —

Never fear, as Venezuela has increased oil exports to China! —
First link is from Mish’s site about the soaring cost of the healthcare plan in the US — — while the second is from various health unions which propose a US$2 trl. overhaul. –

Where these people expect to get this kinda money is unclear, but there are plenty of US hospitals cutting back on services.

#39 Chris in England IG-AZ at the moment on 05.12.09 at 7:26 am

Nostradamus jnr #31:

Think Prison Populations”

The UK is already an open prison, with the illusion (for those who care to bury their heads in the sand) that civil liberties remain unchanged. In fact, the initial creep, and now the open state surveillance, has become so entrenched that public “servants” now assume themselves to be masters.

I am leaving on 5 June and as you know, fleeing to a bunker next to Garth’s. The winding-up of my life here has been an interesting exercise. Various drones in government call centres have subjected both me and my husband to the third degree, wanting to know: (a) where we are going; (b) why we are going; (c) what is our new address? Haaaaaaa!!!

When I asked one drone WHY I was being such questions, he said it was on the list of questions he had to ask me! As I was informing him I would no longer be collecting child benefit from the end of May (universal & automatic in the UK, not means tested) there was simply no need for him to know anything other than the date the payments were no longer necessary, and I told him so. He insisted he had to have an address for me so he could send a letter of confirmation that the benefit would no longer be paid (completely ignoring the fact he could send it to my current address) so I gave him my mother’s address. He sounded amused, and did say he understood my point of view.

A few days later, my husband phoned the local authority to say we were leaving the country and would no longer be paying local taxes for amenities, etc. He was subjected to the third degree and almost got into an argument because he wouldn’t tell the drone what country he was moving to. When he asked what refund we could expect for overpayment of services, she snapped “how would I know? You haven’t gone yet!”

She was less than amused at his refusal to give a new address, and even less amused at being told he didn’t want to be “tracked” by them once he had left the country! As all of these transactions are made electronically, anything they owe us can be repaid that way. There is no need for them to know anything about our motives, our movements, our intentions or our reasoning, but still they ask and expect to be given the answer.

Once upon a time these kinds of questions would not have been asked at all. Now, not only are they asked, we are made to feel obliged to answer them in full. The irritation at being denied the answers is often very apparent, even from the other end of the phone!

It doesn’t take more than a generation or two for the natural insistence on personal privacy to die out, and a willingness to inform Big Brother to set in. I have noticed in the past 10 years that the younger people I work with laugh when I recount examples like this because they think I am making a fuss about nothing, and after all – what does it matter if the government knows everything about us?

Make no mistake, this is how they _will_ know everything about us, because people will willingly tell them in the mistaken impression that they somehow need to know it to run the country, and that it does no harm to tell them.

Over and out, from the UK Prison System

#40 Chris in England IG-AZ at the moment on 05.12.09 at 7:26 am

Nostradamus jnr.

I bet you predicted my answer over 500 years ago.

#41 pbrasseur on 05.12.09 at 7:48 am

“And did I even mention peak oil, climate change, pandemic, or the infidels overrunning Pakistan?”

True enough yet the world always had to live with risks like that, before it was the cold war and the risk of nuclear holocaust, or the risk of communism spreading, etc… There’s always been something to worry about and each time some people were saying “this time is different”.

Yet the world thrived… Not only the world economy grew, but it’s growing faster and faster and the pace of growth is increasing.

Incidentally do you realize that China AND India and probably several other emerging countries economies are going to double in size during the next decade? Consider what this means when you look at the size of those populations…

For my part I think macro-economics are far too complicated to predict details like GDP growth, the price of money, currency fluctuationd, the price or of resources and least of all the stock market. But when Billions of people become freer and go to work every day to become more productive I see nothing but a growth explosion which will have an effect on businesses all around the planet.

Yes it’s a rocky ride, but don’t forget the big picture.

Mu bullish comment of the day :-)

#42 Nostradamus jr. on 05.12.09 at 8:13 am

>>>#27 OK Garth, where do we put our money?<<<

…He’s given you his answer…(I’ve asked him the same question more than once on this blog site)

Buy a Power of Sale (POS), renovate it to suit, allowing it to operate self sufficiently as possible.

…We are all better for it having access to a blog site such as this one.

A more interesting question is to ask why Garth chooses to remain in Ontario?

…As to answers to your question…, Shelter is #1, Get out of debt #2 and #3 is…move to Vancouver, the next Financial/Trade/Culture/Leisure capital of North America.

If you ever visit Vancouver, visit Splitz Grill on Main Street, will likely be voted #1, Best Hamburger/Fries.

First Location in Whistler has been #1 for more than ten years running.

..If you are relocating to Vancouver, choose the North Shore, North Vancouver or its super wealthy sister West Vancouver.

You heard it here first.

…I predicted all of this nearly 500 years ago…

#43 Chris in England IG-AZ at the moment on 05.12.09 at 8:35 am

And quite OT, from the BBC

“A Japan Airlines flight has been grounded at Los Angeles airport after a large object was sucked into one of the plane’s engines, officials say.”

Must have been Gordon Brown’s head.

#44 CTM on 05.12.09 at 8:49 am

Re: #3 Living in Calgreedy

Less is more…

I think you’re right. I’m not rich, but I’m not staggering under sysyphean debt loads, either!

#45 Greg W., Oakville on 05.12.09 at 9:03 am

Hi #2 Crash on 05.11.09 at 5:43 pm,
& Garth (below)

Correct me if I’m wrong but,
isn’t the Zenn electric car now going to be made and shipped here from China?

Hi Garth, It is my belief that our industries have been going over seas and to lower wage areas long before this currect slow down.
We are screwing ourselfs and kids in the long run!
But most people just want to buy the lowest cost goods they can, to stretch there srinking buying power given inflation and none existant wage increases.

But all the big boys give them selfs above inflation wage increases.

The world can now make more than we could ever use and with less workers. How will all the people get/pay for, the water, food housing, clothing we all need?

My two cents.

#46 Larry on 05.12.09 at 9:19 am

#39 Chris in England.
You’ll enjoy Canada, i live in Calgary and all the ex pats i play soccer and drink canadian beer with :) would never return to the UK prison system to live there again. I don’t know which city you have chosen but best of luck.
Garth i’m still renting and being a good student.

#47 Calgary_police_state on 05.12.09 at 10:51 am

Nice post Garth.

I hope you are right about this, especially in Calgary. The arrogance and delusion present in most of the cattle living in this town is nauseating. There is only one reason to live in Calgary. Work. I find it laughable that shacks that look like crap go for $400k. Think this whole place needs a reality check. Who in their right mind would pay that price for a hole in the wall? Look at the stats prior to 2004. Those holes were worth around $180K or less. So what has changed? Nothing. A piece of crap is still a piece. The whole housing delusion makes me want to go inside one of those granite countertop holes in the wall and smear my dogs crap all over the walls. Not that that would make much of a difference, as the walls are already painted earth brown, painted in 2006, forecasting the years to come in Calgary. Green light cameras, claustrophobia, idiots, congestion, no trees come to mind. Hopefully the whole stupid thing collapses. I visualize house prices plummeting, and interest rates quadrupling. Bring it on. Unfortunately, there still seem to be idiots buying these shacks here. Who are these people?

#48 Dave on 05.12.09 at 10:52 am

Renewables will never account for more than 10% of demand, until demand withers. This will not end well. — Garth

renewables (wind, solar, geo) can account for 10% while peak oil is in the horizon. That leaves coal and nuclear as the beneficiaries of energy needs. This seems to be going over people’s heads. In the mean time I’m up 400% since Q4.

#49 Dave on 05.12.09 at 11:01 am

Stocks suck (I’m not a short-term trader), commodities will drop again, gold is questionable (but my wife is all for it!), commercial real estate is gonna tank, bonds & GIC’s are a bankers’ joke.

you’re bearish on everything. So commodities will drop again? The shortest commodity boom in the past lasted 15 years. The longest lasted 23 years. This commodity boom has lasted roughly 9 years. The rush into commodities in the past never had one-third of the world’s population (China & India) sucking up most of that demand. Caterpillar reported the other day their biggest monthly sales ever (pretty sure it was monthly sales) because of purchases from China.

Please, please, please, tell me why are commodities going to drop? what is it that some of you people are reading that you gather this ridiculous information? I don’t mean to insult you, but your rationalization is like someone telling me real estate prices will be higher next year because houses always go up.

#50 Living in Calgreedy on 05.12.09 at 11:11 am

#25 Rachel Corrie, martyr

Rach, I’m a block from 17th & 4th SW so I really can’t get much closer to the action than that.

Sorry but I should clarify. SOME women in Calgary will not date you if you don’t have a car.

Calgarians love conspicuous consumption and some people really don’t understand someone like myself who gave that lifestyle up a long time ago. The car is really just a symbol of that lifestyle.

See you at The Ship sometime. :)

#51 Marc on 05.12.09 at 11:20 am

For reasons unknown, the car rental lady at Halifax airport said there were only two vehicles available. A Hyundai Accent or a Lincoln Town Car. “Which do you want?”

I asked “which one gets better fuel economy, as I care about climate change and global warming, and do not want to drive a gas guzzler?”

She said it was solar-powered. — Garth

#52 conan on 05.12.09 at 11:28 am

“Then Dorothy made me park it behind a dumpster”

Why? What color was it?

I do not think you can even hide a Town car behind a dumpster, unless of course , it’s a big dumpster

#53 Alex on 05.12.09 at 11:33 am

“The abandonment of the gold standard made it possible for the welfare statists (government bureaucrats) to use the banking system as an unlimited expansion of credit. In the absence of the gold standard, there is no way to protect savings from confiscation through inflation… Deficit spending is simply a scheme for the “hidden” confiscation of wealth. Gold stands in the way of this insidious process.” – Alan Greenspan

Read this article to FULLY understand where our problems are coming from:

#54 miketheengineer on 05.12.09 at 11:44 am

Garth et al:

I work at North America’s largest auto parts supplier. I believe that in the next 2 weeks, it will virtually shut down, similar to Chysler and GM. Many employees have been given either permanent layoff notice or 90 day layoff notice. I will check, but I think about 20,000 people work in the 20 some odd plants in Ontario.

Ontario will be screwed for tax money.
Government of Canada will be screwed for tax money.

We are all going to have one hell of a summer.

Unemployment will go beyond 20% by July. Home defaults will go up, again and again as the summer continues. Good luck to the new home buyers, you are going to need it. Just wait till winter of 2010….

The “GREAT DISASTER” has now offically started.

I am not optimistic as Obama and Harper.

#55 mathew gibson on 05.12.09 at 11:52 am

Data from Ucluelet, BC.

Well, data might be stretching it a little …

I happened by the local realtor’s office on other business. When we first moved here at the end of 2006 the boom had swept through, trippling prices in 5 years. For the next 18 months there were only ever about 10 places for sale, with prices rising a few percent each month. At the same time, construction was in overdrive.

Fast forward to May 2009.

There are about 60 places on offer, many of which have been up for sale for six months or more, especially a lot of condominiums. The Big Development (golf course and more) has gone busteroo. Most of the places on offer have “reduced” slashed across them, most down 10% from their stated asking price.

And this is the West, where it won’t happen. Even locals I talk to think that it won’t get much worse.

What is particularly intriguing is that way back when the economies here produced 80k wages for everyone working in logging and fishing the RE prices were low, rarely breaching 100k. Then those jobs went, to be replaced by 60k jobs in construction, and the housing prices trippled (good martketting to people who thought prices would skyrocket forever). When the construction finishes (this has happened rather abruptly) all that is left are the 30k jobs in hospitality; and somehow people think prices won’t go down any further.

#56 Nostradamus jr. on 05.12.09 at 12:04 pm

Real Estate is all about Location, Location, Location.

…it is most important deciding where to live, situations in Canada and around the world are changing quickly.

Federal Politics for Canada has begun a slow death.

…The future for Canada lies in its Provincial Govt’s.

No longer can Quebec, Ontario or the Atlantic Provinces dictate their agendas over Western Provinces.

…Many U.S. States are also preparing to alienate themselves from the corrupt power centres of New York, Washington, Miami and Los Angeles.

Carefully consider where you live.

…I predicted this nearly 500 years ago…

#57 ~d on 05.12.09 at 12:19 pm

Garth…i don’t get you….sometimes you make no sense at all; your timing is wayyyy off on this one…
…didn’t you know the best time visit Wolfville is in the Fall?

#58 Madame Guillotine on 05.12.09 at 1:05 pm

Big Picture?
As we live in a finite space with limited resources, any system that depends on growth is doomed.
I’m pretty sure someone predicted this 500 years ago.

#59 morfeus on 05.12.09 at 1:24 pm


My wife, 3 year old and yellow lab are renters in Toronto with little debt (10K) and decent income for the moment (greater than 100K but less than 150K).

What about buying a year round cottage (waterfront or not) and claiming it as principal residence while continuing to rent in T.O.?

We get the benefit of home ownership (for what that’s worth) if the need of hunkering down and squirrel hunting arises (which seems likely) with the mobility and standard of living income that T.O. provides.

I’m preparing myself for your tirade – be gentle.


#60 Book Bug on 05.12.09 at 1:44 pm

I saw this today and thought it was telling – you know it’s bad news when books on how to make money on Real Estate are on sale!

The Automatic Millionaire Homeowner, Canadian Edition: A Powerful Plan To Finish Rich In Real Estate – Now 82% Off at Chapters!

#61 . . . fried eggs and spam . . . on 05.12.09 at 2:26 pm

#21 Madame Guillotine on 05.11.09 at 9:20 pm — Bonjour Madame.

I pop over to Robert Menard’s blog a couple of times per week. Quite interesting!

It sure is nice to mix one’s short, temporary physical lifecycle and combine it with a knowingness of the after-, or spiritual life. That is enjoying the best of both worlds!
#27 OK Garth, where do we put our money? on 05.11.09 at 10:02 pm — “Where/what/how do we preserve our money; is it too much to ask how we can prevent the coming inflation from eating away at it’s value?”

This may be of interest but keep in mind, all investing must be viewed from a long term perspective, at least two decades.

That’s why our CFP put all my investments in Cdn. equities in the early to mid-90s, which have become six-figure gains. Monthly dividends are automatically reinvested to buy more shares. —
#31 Nostradamus jr. on 05.11.09 at 11:56 pm — “2/ Think Illegal Immigration — and — 3/
Think Prison Populations”

The volatile mixture of illegal immigration and overflowing prison populations will greatly contribute to a large increase in violence.

Neither of these two include the pre-planned fiscal takedown, which is already showing the effects on Shoople’shrooms worldwide — that is another kettle of fish.

When the three are joined, and including wars between countries, then the fan hits the shit.

#62 Avenge_Gerald_Bull on 05.12.09 at 2:36 pm

#47 Calgary_police_state –

Those are just the immigrants from Ontario, who listen to too much Green Day & Hoobastank. i.e. the Bent exploiting and controlling the Twisted.

Those originally from here, who haven’t since moved to New Zealand, California, or Arizona, still know where to go and how to live, to avoid most of that noise.

#63 rory on 05.12.09 at 2:54 pm

#56 Nostradamus jr.

Agree with it all except of the timelines …we will be used and abused long before we ‘get it’ & get out …maybe it is time to go offshore and come back when the ‘ship’ has been righted …in time for my health benefits to be fully needed.

Alex Doulis has written a few books about the tax man cometh and offshore investing/living.

#64 Nostradamus jr. on 05.12.09 at 3:00 pm

#55 mathew gibson from Ucelulet


#54 miketheengineer from Ontario points out…

Firstly, the Sh*t hit the first in Europe…has now crossed the Atlantic, hitting North America’s East Coast and is now travelling inland.

…but it will stop dead in its tracks at the Manitoba border.

>>>Ontario will be screwed for tax money.
Government of Canada will be screwed for tax money.
Unemployment will go beyond 20% by July.<<<

…Small correction Mike….Unemployment will go beyond 20% by July…in Ontario only.

Atlantic Canada’s unemployed fisherman collect EI and Quebec’s unemployed Snow Removers are also on EI.

Sorry…Ontario is screwed…

Western Canada is looking better and better every day and Vancouver is the Land of Oz.

…Just follow the Yellow Brick Road…

I predicted this nearly 500 years ago.

#65 Greg W., Oakville on 05.12.09 at 3:19 pm

Hi Garth, FYI for anyone that might like to know

I was checking to seeing what the latest updates were on this web site,
See the 2min video if you want the ’truth’ about what drinking fluoridated water is doing to your bodies and mind. More good information can be found through the site above.

I then was web surfing and found;

‘Chemical Dumbing Down of America’, YouTube 10min

‘Whats your IQ? Click here to find out’ YouTube 11min

And ‘They’ want us all to go deeper into debt!!!

For the energy issue some of you might find this informative.
This is an entertaining view on the energy situation we are all facing,

‘Robert Newman’s History of Oil (1of9, all 9 parts are about 45 min long)

If you don’t understand the compound equation yet this is a really a good wakeup show to see. (you need to watch the whole show)

The Most IMPORTANT Video You’ll Ever See (part 1 of 8)
Dr. Albert Bartlett: ‘Arithmetic, Population and Energy’

for a transcript of this show

My three cents today.

#66 jess on 05.12.09 at 3:38 pm

only in canada eh?

In each of the last three years, top businesses have realized a $30-million windfall by paying a total of $4 billion into accounts managed by the Canada Revenue Agency that cover them in the event their tax returns are reassessed.

The accounts have paid an interest rate of between 5 and 7 per cent since 2006. The rate is considerably more favourable than that offered by the banks, but Canadian tax dollars account for 2 per cent of that interest.

Auditor General Sheila Fraser said it appears corporations were well aware of the favourable treatment they were getting with their federal accounts, though it is difficult to prove a company has set out to bilk taxpayers.

“No one asked the corporations or tried to determine what the motivation was but I think we can probably arrive at that conclusion,” she told reporters. “The agency did try to return the money to them and they declined.”


#67 David Bakody on 05.12.09 at 3:49 pm

Breaking News ….. forget Mulroney, Forget Ruby, Forget what Garth said about not buying a house …. wait did I just say that ….. yup I sure did …. Hey kids buy one of those big honking McMansion now …. Not because it will be money tree …. Nope …. we ode folks just might have to move in with y’all ! The recession is going go wipe out Social Security, and Medicare much sooner than expected south of border …. are we different here? I do not think so, hello Canada’s 9 million senior boomers are about to hit the piggy bank sooner rather than later ….. add health care costs coupled with the rising cost of drugs and diabetes surging all wrapped in multi billions required for PTSD and the like ….. means even more bad news.

Some might remember a earlier post when I mentioned talking to fellow I worked with who said to me when I asked how things were at work…. he said “It’s not Freedom 55 anymore it’s Freedom 75 David! So young ladies and gentlemen ….. get that guest room (s), Nannie sweet or in-law sweet ready when making your move into the wonderful world on Real Estate. When we come having sold our house ….. we can help out but we will need lots of spending money so do not count on too much.

#68 lgre on 05.12.09 at 4:18 pm

” while peak oil is in the horizon.”

Peak oil? if anything was at peak it would not be selling for 1/3 of what it was last year. The peak oil lie is just that, a lie..also, there would be a massive push for alternative energy by governments..and there isn’t..they are only talking about it because the public is asking.

#69 TS on 05.12.09 at 4:47 pm

Caterpillar’s sales performance has been extremely weak worldwide and has led to massive layoffs, and reductions in executive compensation. The company posted a loss of $0.19 per share in its most recent quarter. Anyone wanting to look at investor/financial information can use the following link:

#70 TS on 05.12.09 at 4:55 pm

Personal bankruptcies are soaring in Canada… this plus growing unemployment will pop the mini rebound in real estate…

#71 lgre on 05.12.09 at 5:24 pm

Personal bankruptcies soar in Canada

#72 Nostradamus Jr.'s Analyst on 05.12.09 at 5:42 pm

#60 book bug

>>The Automatic Millionaire Homeowner, Canadian Edition: A Powerful Plan To Finish Rich In Real Estate – Now 82% Off at Chapters!<<

Soon to be followed by Vancouver condos – 82% off.

Did you know Vancouver is tapped to become the next gangster/homeless/junkie capital of the world?

I predicted this over 500 hours ago.

#73 Live Within Your Means on 05.12.09 at 6:56 pm

Have big business found another way to profit & rip off Cdn taxpayers.

OTTAWA–Some of Canada’s largest corporations may be using the government as a high-yield investment account by deliberately overpaying on their annual tax returns to collect favourable interest rates, the federal auditor general says.

I’m still trying to get the CRA to finalize our ’07 return. They owe us money & I keep being told they’re working on it. Its the old run around. One hand doesn’t know what the other hand is doing. No wonder this country is in such a mess. We owe this year, according to software, and I just hope they’ll confirm the amount before we go on vac.

#74 Roial1 on 05.12.09 at 7:00 pm

#2 Crash on 05.11.09 at 5:43 pm

“GM already proved with their failed EV1 that they don’t want to produce electric cars.”

It was not a failure.

It was a SABOTAGE job by GM and Texaco. (Among others)

#75 Da HK Kid on 05.12.09 at 7:03 pm

Quick Note on RE news US. Increases in sales of homes noted but 1/2 were first time home buyers and 1/2 of the sales were on foreclosed properties.

This simply means bottom fishing has started before the bottom on spec in hardest hit areas noted Nevada, Florida and CA.

Greenspan also reported on this situation (in which he seems to be coming clean on all his sins of the past these days), that this type of sales activity only means further drops in RE in the US and further home owners being under water in the many months to come.

All in line with my overall downward spiral play!

Canada hasn’t even seen this scenario unfold and noting it will, we are so far behind the curve that it makes even more sense to hold and watch it play out.

Furthermore, even if you do the stupid thing and jump in as a first time home buyer, you better do it in a depressed market (not in Canada yet), at least on foreclosed property (so you can take further depreciation), with a bucket of money down (so you can actually renew when the property tanks and interest rates work against you) AND FINALLY,

What do you think the dynamic will be when both the above happens in Canada, and the banks do a 180, 3-5 years down the road (as they are now doing with credit cards approvals) and not even consider you for a home loan?????

When Credit is tight, the buyers market will have its most powerful trump card, only the approved can buy your home and you’ll have to drop your shorts to sell it in the mega-oversupply of homes and bad debt.

#76 Green Sharon on 05.12.09 at 7:53 pm

Chris from England,

I totally agree with you regarding questions to track you. Governments LOVE to find out personal information and try and make you think you have to.
The Western world is certainly not as democratic and ‘free’ as they would like you to believe.
I must admit that it seems to be even worse in North America than in the UK. We are so used to “giving all” to the damn ‘authority’ that we really need to question it more often!
My British husband has shocked me by refusing information to others, and it just made me think, “no kidding it is none of their business!” and I too will play
with them by digging my heels in and keeping quiet.
Good for you guys, I hope you enjoy it here in Canada, you will hopefully get a good deal on a home.
We may have cold winters but we also have a lot of sun and beautiful days during the year!

#77 Darryl on 05.12.09 at 8:12 pm

“Then Dorothy made me park it behind a dumpster”

It’s a Town Car (probably black).She probably thought you had a body in the trunk. So she pointed out the dumpster. :)

#78 Calgary_police_state on 05.12.09 at 8:14 pm


Yes those originally from Calgary dont leave their homes unless absolutely necessary. That isnt rocket science. I learned that my first year here. You see, people have a problem seeing the green light, understanding that it is green, and then depressing the gas pedal. The new green light cameras add added applause to that delayed reaction time present in the cattle here. So you either have someone too slow; someone tailgating your butt; or cops/green light cameras-no middle ground for traffic here in Calgary. No other arguments from u, so its obviously true that the prevailing mentality supports a house median $200K(at least) in excess at what most of the shacks here are worth. A condo for $285K? What a joke! Those sellers and realtors(all of them) should go start dealing drugs so they are dealt with swiftly by the new police force downtown-this might kick their butts into line and they might realize how deluded they are. One could argue that that solution to the continuing insanity for housing in Calgary doesnt work. Hopefully interest rates will double(at least) so when all those bozos(greater fools)who bought their hole in the wall shacks-they wont be able to pay-and as a consequence foreclosures will look as common as green light cameras. Only then will sanity resume in Calgary. This of course is only a dream as the vultures lurk seeking any decent home that is around $300K. If a house is 1800 sq ft and around $300K, guess what, the house is sold in a day!!! Let the insanity continue….

#79 ts harpoon on 05.12.09 at 8:17 pm

#68 lgre ‘The peak oil lie is just that, a lie…’

Igre-fear not, for you are not alone on the misunderstanding of the topic of peak oil.

The issue is not one of “running out” so much as it is not having enough to keep our economy running.

“Sky-high oil prices caused the global recession. And as soon as the economy starts to recover, it will likely be hobbled again by rapidly rising oil prices.” (Jeff Rubin- former chief economist at CIBC World Markets)

What you must realize is there has not been a significant discovery of any new conventional oil fields in the last 40 odd years like the Ghawar super-giant field in Saudia Arabia.

Instead we witness a huge mining operation called the tar sands which is required to offset global demand. Compare the cost of producing a barrel of oil in Saudi Arabia vs. Alberta.

Almost all oil producing nations are experiencing declines in thier extraction rates.


Google/search: M. King Hubbert, Matt Simmons and Colin J. Campbell.

#80 . . . fried eggs and spam . . . on 05.12.09 at 8:51 pm

On Mish’s site today, 500,000+ jobs are lost each month in the US. “Given there is no economic driver for jobs, credit card losses will continue to soar. Things will get much worse before they get any better.”

So things are much clearer to those who DO NOT follow the m$m whores; plus other events are getting mighty toasty around the globe.
A first-class reason, when buying a brand-new PC, have a technician shut all MicroGates’ junk off, politely decline automatic upgrades then download and install free Linux or Ubuntu OS’s.

If those technicians and the companies they work for want anyone’s business, they’ll do it promptly. —

“What is totally mental, and I mean running around the supermarket without your pants on shouting “where is the mustard” mad, would be to start shutting down the user PC every two hours until they upgrade to a paid for OS and to start this nutball feature THREE MONTHS before the thing actually expires.

“Yet that is exactly what some loon at Microsoft thought would be a good idea, and that’s what is going to happen. Starting March 1st 2010 your PC will shut down every two hours.”

Webmaster’s Commentary: “Yeah, Microsoft has developed a serious attitude problem. Not that I was looking at W7 after my experience with VISTA, but this is simply loony!

“Plus, once you have installed W7, Microsoft could decide to increase the price of the permanent activation.

“When my XP machines start to go bye bye, new hardware will be LINUX based. Enough of this American Corporate Arrogance!”
No link, but quite informative — text explains most of it.

The Final Push for World Government

“Throughout the history of mankind, the elite have always fought for world empire. They’re within touching distance now.

“Now, using secrecy and international banking systems, they are making their final push for world government. Only an educated and informed public can stop them in their tracks.”

Webmaster’s Commentary: “World Government. That’s what Genghis Khan, Attila the Hun, Alexander the Great, Augustus the Great, Charlemagne, Persia, the Ottomans, Napoleon and Hitler wanted.

“That’s NOT what the people wanted.”

#81 ts harpoon on 05.12.09 at 8:54 pm

Peak Oil on TVO with Steve Paiken 03/17/2009:

#82 Nostradamus jr. on 05.12.09 at 9:17 pm

A few kind words to my Apostle, Nostradamus jr.’s Analyst and my Stalker, dd.

…You both remain behind with your initiation fees.
Please send me the money….Only then will you receive your brass, I mean, solid gold personal decoder ring and lifetime Nostradamus Club membership.

I’m angry w/ myself for letting you both take advantage of me because I predicted this would happen to me nearly 500 years ago.

#83 conan on 05.12.09 at 9:20 pm

Re: 77

It is probably one of those Town Cars with the Mac and Cheese orange color with the green tartan Scottish pattern racing stripe down the sides.

I do believe some idiot at Ford thought it looked good.

#84 lgre on 05.12.09 at 9:31 pm

“Igre-fear not, for you are not alone on the misunderstanding of the topic of peak oil.”

I’m not misunderstanding a thing, whether oil is ‘not enough’ or ‘running out’ makes no difference..the point is that they claim that we are reaching a point of peak..which tells me that prices should be much higher as it’s becoming a commodity of extinction, much needed btw.

““Sky-high oil prices caused the global recession.”

Sky high oil prices did not cause anything, the greed in the financial system caused the recession.

There are many oil sands today that are at a stand still, with peak oil I dont see how that can be. I’m sure some ‘expert’ has a good explenation for it.

Big Brother will take care of you, fear not.

#85 POL-CAN on 05.12.09 at 9:48 pm

Further to post #84

Too much cheap credit caused the RE bubble as there was not much else to invest in. The smart money then fled RE and went straight for the stock markets around the world. The high oil prices were another bubble as were pretty much all natural resources. Have a look at the price of Potash over the last few years as an excample:

It is all a PONZI scheme.

Stay in cash = love deflation

#86 CS on 05.12.09 at 11:27 pm

To Chris in England – good for you for telling them to get lost! One of my pet peeves is having not just govt want to know everything about me, but having nearly every store clerk ask for my phone number, as if they need that to do business with me. I tell them it’s unlisted and I choose not to make it public. Some shrug, some get very anxious as if their boss is going to be pissed that they didn’t get it and some are downright rude ‘Good luck getting a refund if you need to w/o giving us the info we need’ one snapped…leaving me to wonder when returning a product with the sales receipt intact became unacceptable. You are so right that it is this creeping thing that people just accept and I too have had those younger than me wonder why I don’t just hand over my private info whenever I am asked. We left the city for the country backwoods a couple of years ago and continue to try and get a little more unplugged.

#87 Dave on 05.12.09 at 11:52 pm

I’m not misunderstanding a thing, whether oil is ‘not enough’ or ‘running out’ makes no difference..the point is that they claim that we are reaching a point of peak..which tells me that prices should be much higher as it’s becoming a commodity of extinction, much needed btw.

no, as stated, you’re not understanding. If peak oil is here at 85,000,000 barrels a day, as demand grows going forward, the price will continue to rise as it has in the past few years. The world’s oil fields haven’t exceeded the 85bn. The Ghawar field never surpassed 9.5 bn barrels in a day. With China and India requiring more energy with each passing year, global oil output is going to have to increase dramatically or its price will be felt at the pumps and everywhere else.

#88 Avenge_Gerald_Bull on 05.13.09 at 2:21 am

#59 morfeus –

A 3-year old Lab will happily subsist mainly on fresh squirrels, as long as they have been slightly cooked in a campfire first. (If they’re anything like my old Alsatian was). Decades ago, a friend of mine and myself would take our 3- to 5- year old dogs out squirrel and gopher hunting (using large-caliber big game rifles..good for target practice, you know). They would fall over themselves to be the first to the downed squirrel(s), but would be even happier to get them fresh from a small fire.

It would be better to have a place outside of the city for the 3-year old, to chase and eat all sorts of critters, and have room to play with other animals and/or your wife. That could be your first residence, where you might put in 4 days a week in telecommuting from outside, and be in the office for 1 or 2 days a week in the city.

So, you’d have to trade off with the wife on the ‘city-day’ and the weekend in the city, every second weekend, to take care of the Lab. Which would be OK, because you could be in the apartment twice a month enjoying the city, socializing & getting to know people, etc. Alternately, you could also get a second dog which would make the 3-year old very happy, as dogs are pack animals and most breeds are much happier with other dogs around.

#89 Avenge_Gerald_Bull on 05.13.09 at 2:46 am

#78 Calgary_police_state –

You’re missing the point. There’s a near-infinite number of new characters around here recklessly blasting around in their modified Honda Civics with fart-can exhaust like they were on the 405 making a beeline for the very last flat of beer in south ontario on a Saturday night, and clueless suburban married types in their minivans and SUVs glued to their cellphones totally oblivious to the traffic around them. They’re mostly either in-migrants or kids of in-migrants.

So, the City now gets to squelch that insanity and make a money-grab at the same time. Way cool is the fact that its a bunch of dimwitted fascist newcomers than actually came up with the idea in the first place. It’s like a bunch of corrupt cops beating on a bunch of vagrant crooks.

It’s sorta like the half-million dollar sardine-packed chipboard doghouses that are being snapped up by the truckload. Half-baked hammer-banging labourers from Ontario are slapping together junk for other in-migrants to put their life earnings into. Poetic justice, really.

#90 Bill-Muskoka (NAM) on 05.13.09 at 10:32 am

#80 . . . fried eggs and spam . . .

Now I know Microslop would conceive of such a thing, but where did you get that from? You’ve been eating the SPAM again haven’t you? LOL

I also know the public tweaked Microslop’s neck over Vista by refusing to go to it and demanded XP instead.

I am still running XP and will or drop Microslop altogether and go to a Mac if they try anymore of their Big Brother BS!

#91 Bill-Muskoka (NAM) on 05.13.09 at 10:33 am

#89 Avenge_Gerald_Bull

FYI The word is spelled immigrant!

#92 Bill-Muskoka (NAM) on 05.13.09 at 11:45 am

Enquiring minds want to know is Notadumbass the answer to Nostradamus jr.? Can the present tell us this or will we need to wait centuries to find out?

#93 Greg W., Oakville on 05.13.09 at 1:19 pm

Hi Garth, FYI anyone, more on peak-oil/energy issue

In 2007 we all used 1 cubic mile of oil for the first time.
Link for artical;
Joules, BTUs, Quads—Let’s Call the Whole Thing Off
By Harry Goldstein and William Sweet
First Published January 2007.

One dramatic way of portraying their results is to ask how many alternative energy sources—say coal-fired plants or solar panels— it would take to produce the equivalent of one CMO.
See link for picture.

#94 hagbard on 05.14.09 at 7:36 am

To put what our largest trading partner is doing into perspective:

Of course, we’re pretty much copying their methods.