Run

This wretched blog was born 30 months ago when we all lived in a different time. The Canadian economy was humming along. The posted rate for a five-year mortgage was 7.1%. Bay Street economists declared Canada had decoupled from the US – where the housing market was freefalling and President Bush was ignoring it. Ottawa  approved federal mortgage insurance for 0% down loans with 40-year amortizations. And home prices were stiff.

A financial meltdown wasn’t on the public radar. The Toronto stock market index touched 15,000, and few would have believed it could lose 35% by the end of the year or 50% by the spring of 2009. The shocking days of autumn were yet to come, when the world stood inches away from the cusp of a depression.

Back then I spent a lot of time warning the few people who strayed here that what you saw was not what you were going to get. The economy is far more fragile than it appears, I argued, while we’re vulnerable to the same credit mess and housing disaster than was enveloping the USA.

So now in the final months of 2010 I’ve reached the view that most people, having gone through all this turmoil, have no clue where they’re or what comes next. It seems endless subdivisions full of families think we’re on our way back to 2008. Too bad for them.

Here are a few reasons you need to run in the other direction:

The US has yet to hit bottom, and it may take a year or three longer. This means interest rates will stall where they are, gold will rise some more and American politics is about to get ugly.

None of this is particularly good news. Cheap rates mask the debt trap most households have walked into. The gold bubble is a giant bet against America, and will end badly. Meanwhile US turmoil will help keep our economy weak, jobs hard to find and home values falling.

Worse, our dollar will probably soar in value next year as commodity prices rise and our rates stay above those to the south. That makes us less competitive, hurting exports, manufacturers and employment. Actually, as the housing market here heads for a dead stop, so will a huge amount of economic activity.

What won’t happen: Hyperinflation with the US government purposefully devaluing its currency. And no depression, either, with a Japanese-style decade-long spiralling deflation. There is no extreme outcome to the situation we are now in – just a number of numbing years of discomfort, equity loss and a declining standard of living for most people.

Sorry. It may suck. But there ya go.

If you are a homeowner with a mortgage, most of your net worth in the house, little in the way of liquid savings or investments, dependent on your paycheque and without a corporate pension, you are at risk. Sadly this group makes up about 60% of the Canadian population.

This is why you need to be a contrarian.

In the near future (within five years), the USA will start into an economic renaissance which will support equity markets. Interest rates will begin a long, determined march higher. It will be evident real estate soon ceases to be the dominant storehouse of value in North America. The first evidence of the coming Boomer retirement crisis will emerge. Taxes, energy and the cost of living will march higher. The Canadian middle class will be under assault, dragged down by a housing deflation that should have been completely obvious.

So, a world in which most people do less well and the people who prepared clean up.

Want to be one of them?  Then best start now.

Shift wealth from real assets to financial ones.  Invest in things that pay you income to own them – not a potential profit, but actual cash flow. Aggressively and legally avoid tax. (More on that soon.) Be balanced to counter volatility, owning equities, bonds, trusts and cash. Above all, be liquid. Never lock into a GIC or hand your money over to a salesguy who hands it off again.

As most will learn, there’s no silver bullet – not houses, bullion or a handful of stocks.

But there is a way forward.

Hear Garth here:

Wolfville NS
Tuesday October 5, 7 pm, Ken-Wo Golf Club. Register here.

Lunenburg
Wednesday October 6, 7 pm, Fisheries Museum. Register here.

Halifax
Thursday October 7, 7 pm, Ashburn Golf Club. Register here.

Victoria BC
Wednesday October 13, 7 pm, Victoria Convention Centre. Register here.

Kelowna
Thursday October 14, 7 pm. Register here.

Surrey
Friday October 15, 7 pm. Register here.

Toronto
Tuesday November 9, 7 pm, Double Tree Hilton, 655 Dixon Road (airport strip).

288 comments ↓

#1 Grandpa Grinch on 09.24.10 at 10:28 pm

So commodities will march higher, the US will continue its decline, but gold is going to drop as, according to you, its in a bubble??

I don’t know about others on here (Lebowski, Bullion Bunny, et al), but I for one am willing to put my money where my mouth is. My portfolio against yours Garth. You can pick the timeline – minimum 12 months. $5000 in a trust account with an agreement signed by an attorney with that amount invested for the whatever time you wish. Winner takes all at the end.

I for one have a clear understanding of where we are and know that my commodities only portfolio will mop the floor with the GIC’s, bonds, mutuals, preferreds and other components of a balanced portfolio you tout. Those choices aren’t contrarian, they’re the same as what everyone else who invests is doing.

How bout it?

You’re a speculator, not an investor. — Garth

#2 blase on 09.24.10 at 10:31 pm

How can America get going again when they are running trillions in deficits and state and local governments have to cut jobs to pay the bills? Where will the economic recovery come from, since you don’t say anything about that in your post.

In the 1970s New York City was going bankrupt. Don’t bet against America. — Garth

#3 T.O. Bubble Boy on 09.24.10 at 10:37 pm

0%/40-year mortgages were introduced in 2006 by Mr. F, and then the 5%/35-year limits were brought in around October 2008.

http://www.cbc.ca/canada/story/2008/07/09/mortgage-rules.html

Look for renewals of these wonderful debt experiments in 2011-2013, when the typical 5-year terms end.

Mr. F had better hope that prices hold through the spring, or defaults could start rising by mid-2011.

Speaking of Mr. F, Mark Carney sounded quite a bit like a hack politician on CNBC today:
http://www.cnbc.com/id/39342010

“Our economy is back to the pre-recession peak, both in output and employment.”

“We have a financial system that’s firing on all cylinders.”

ummm…. I guess “firing on all cylinders” refers to how fast the banks sign up highly-leveraged mortgages and dump the risk to CMHC?

#4 Old_is_Gold on 09.24.10 at 10:46 pm

The gold bubble is a giant bet against America, and will end badly. – Garth

Before the ’29 crash, shoe shine boys were giving tips on stocks, that is when you know that something is in a bubble when the average person starts thinking that they have found Eldorado. I would venture to say that even today the average person is clueless about gold, they have no idea how to invest in it or how to trade it. Most of the gold price rise is attributable to government purchases and institutional investors. It will not be until the average person start viewing gold like Vancouverites view RE at present that gold will be in a real bubble. Every year the gold price forecasts from JP Mprgan, Citibank, Goldman Sachs, Scotia, CIBC, BNN, CNBC, and all the other ‘experts’ have been WRONG. By a long shot!

When I see the average Joe desperately trying to sell RE to buy gold, that will be the signal to sell gold and buy RE. Till then no bubble!

And silver has a fivefold upside yet – at the minimum!

Global National ran a piece tonight on his gold investors ‘can’t lose.’ Cue the shoe-shine boys. — Garth

#5 nonplused on 09.24.10 at 10:49 pm

Exit gold? Not a chance. That market will end badly, all markets do, but not until oil is back down under $50 a barrel. One must remember that OPEC prices oil in gold, always has, and it was a New York banker who taught me that, although I had suspected it already. The US dollar is just the medium of exchange in their minds.

More anecdotal stories from Calgary. Was told today of a couple who sold their house in 2008 for a nice double, took the $200,000 they had earned and “invested” in a $880,000 house brand new. Took out a line of credit to landscape and buy a new truck, and had a kid. Now similar houses on the same block are listed for $690,000, so they have no equity, and a line of credit with 6 digits. Worse, wifey wants a divorce.

House prices in Calgary would show greater losses than they have if they would sell. Instead, they sit their on the market with an ask price nobody will touch and maybe the odd “condition of selling our other house” sale not sale. Why anybody would sell a house on the condition that the buyer sells their other house first is beyond me. Fancy thinking about price I guess. “See! We got the $950,000 offer! The buyer just can’t close and never will. All future offers have to be in the same range.” Realturd tricks, don’t be fooled, move on to the next one.

#6 dark sad person on 09.24.10 at 10:53 pm

The gold bubble is a giant bet against America, and will end badly.

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

There is no Gold bubble G-
There is no big bet against America-save for the misguided Hyper-inflationists-

Gold “is” Money and Money is King in Deflation-
Gold is the King money-
Always has been-
Always will be–
Everything is Deflating and will continue to Deflate- against Gold
*******************

And no depression, either, with a Japanese-style decade-long spiralling deflation. There is no extreme outcome to the situation we are now in –
***************

I’ll bet you–barring a WW-or-some unforeseen Technological breakthrough-we will be a hell of a lot longer than 5 years-before we even-start-out of this-

A Depression-is right where we’re headed-
Governments will cause this Depression-just like they did the last one-by Protectionist/Intervening policies in the Market and trying to hold prices high-instead of letting the Free Market do what it is supposed to do-
Which is “Price Discovery”
The Market wants to clear-
It will eventually-it never loses-ever-

When China goes into convulsions-short Commodities-
The World-is going to be in godawful financial shape-

http://www.youtube.com/watch?v=iqsxF_zt700

#7 goldenfox on 09.24.10 at 10:58 pm

Dark sad person

I dont understand what your point is. Are you saying that house prices have to rise to validate an inflationary enviroment. As far as I know, real estate values fell during the wiemar hyperinflation. There is a story of a bellhop who recieved a gold coin for a tip from a wealthy client before the hyperinflation. At the height of the hyperinflation he bought the hotel with his gold coin.

#8 Old_is_Gold on 09.24.10 at 11:03 pm

In the 1970s New York City was going bankrupt. Don’t bet against America. — Garth

Rolling the debt over for future generations is what has brought us here. We are that future generation paying the debts of 70’s NY, of Citibank (the bad loans they made to Brazil and other South American countries) and God only knows how many other corporate bailouts, even in those days, not to mention the cost of the Vietnam War.

Comparing the present day to the 70’s is naive at best. America was still a manufacturing nation, not just a warmongering nation. People still had to save to buy homes, cars and even clothes and shoes. Visa, MC, Amex, gas station cards, department store cards, and credit for even the most basic necessities was not yet the norm. People were still saving 10% or more of income, and as a rule one income could still support a family, maybe 1.5 income in the 70’s. And there was no China, even Japan was only beginning to come into it’s own. There was still some fiscal sanity in how many dollars were circulated worldwide. The list goes on on on…

America and NYC were saved by Wall Street sleight of hand by passing the buck to the taxpayers and ultimately that is where the buck stops at the taxpayers’ feet. Comparing consumer, corporate, municipal, State and Federal debt level of the 70’s to the present day is like comparing the Model T to a Formula 1 car, even that may not be a valid comparison, maybe it’s more like comparing the Model T to the Space Shuttle.

So all betting person should bet heavily against America; if 13 trillion and counting has not gotten the job done but made the debt burden for Mr. & Mrs. America that much bigger, another 13 trillion will only break what’s left of Mr. & Mrs. America’s back. And America in the process!

#9 Patz on 09.24.10 at 11:11 pm

With all due respect, you guys are arguing about the wrong thing. Whatever gold does will not matter in the very near future (within 5 years). America is not going to recover from this. It still has far too much unwinding to do and it’s economy is the most liquid fuels based economy in the world—bad news there.

The American economy is in much worse shape than all but a few are admitting to. Real unemployment is far higher; housing has still a good ways to fall and there is no engine for growth on the horizon.

Garth says that equities will roar back to life with the money that boomers will put in as they sell their assets. But as he’s said and most of us know their assets are mostly RE and those are headed for the lagoon. How much are you going to get out of an underwater house to buy preferreds?

A lot of people now like Robert Prechtor are calling for a plunge in equities around the corner. Maybe, maybe not. But it’s a real possibility that the market with tank so badly that it will never recover. Not a place people will want to put much money.

Hardly anyone here seems to get a simple equation energy = the economy. If one depletes, so does the other. Oil is not a commodity, it is the life blood of growth and there’s not enough to give any more transfusions. Liquid fuels have plateaued; ironically saved by a declining economy. (Saved in the sense that less demand has taken pressure off the peak for the time being.)

Garth says 30 months ago was a different time. No it wasn’t, it was just a different spot on the same continuum.

#10 Old_is_Gold on 09.24.10 at 11:12 pm

Global National ran a piece tonight on his gold investors ‘can’t lose.’ Cue the shoe-shine boys. — Garth

Garth, I am not trying to debate you or convince anyone of my views. However amongst all the people I know personally (family and friends), not a single one has a clue about gold as an investment. Yes, they all ooh and aah that the the price of gold is 1300 or whatever but it has not yet sunk into the mass psyche that they should buy and hold at least a bit of gold. When this realization dawns on the masses and we see shortages of gold coins and 1oz. bars, then you can be sure that gold is in a bubble, until then I believe it still has legs left in its bull run with the caveat that there could be a short term pullback, even a substantial one, but it will not last long.

#11 JET on 09.24.10 at 11:20 pm

Confirmation that the Canadian housing bubble has peaked!

http://www.yourhome.ca/homes/decor/article/864663–ty-pennington-i-want-to-bring-canada-some-love

:)

#12 blase on 09.24.10 at 11:20 pm

#5 nonplused,

if you’re friends with this guy, tell him to tell his wife this:

“if you are planning to divorce me and are counting on me carrying the mortgage, paying you alimony, and child support, think again. you will get child support, and that’s it. I will mail you cheques every month, but I won’t be living in Canada. I plan to take an indefinite leave to Asia, teaching English. You took vows, and now when the going gets rough, you want a do-over with me holding the bag. Well, you married the wrong guy, because I’m not going to fund your life. Either stick it out, or find another candy man, your choice.”

#13 dirtyoilbanndit on 09.24.10 at 11:28 pm

Are you really comparing america in 1970 to today? they were world leaders in oil production, at 10 millions barrels a day, now they import 70% of transportation fuels, on credit!!!

The old america is finished, there is a direct corellation between vehicle miles travled and GDP in america, once we start having oil shortages, their asset prices will be crushed, just like canada’s.

I would love some detail as to why you are so bullish, other than

“USA will start into an economic renaissance”

#14 Jane on 09.24.10 at 11:32 pm

Here in Van we have been looking for a place to rent after selling our condo. Met a nice couple who just bought a teardown for $1 million in Kits, and are wanting to sell their downtown condo. When I told her we sold and are going to rent for a few years, she looked a shade paler. Her plan? To sell the condo to afford the renos on the house in a year or so. Hope she sells the condo soon.

#15 Love this Blog on 09.24.10 at 11:42 pm

“This wretched blog was born 30 months ago when we all lived in a different time”

You kill me dude!

#16 dirtyoilbanndit on 09.24.10 at 11:43 pm

There is a very simple point that 99.9% of people are missing.
People picture a long slide down hubbert’s peak. You are in for a nasty suprise.
Oil production has been basically flat from 2004-2010 even with an 700% increase in oil drilling. In essence, we are keeping the peak flat with a MAJOR increase in drilling, ie, stealing from the future. making the impending drop off steeper.
The world burns a bilion barrles every 12 days, please, stop and think about what oil shortages will mean?

#17 Nemesis on 09.24.10 at 11:45 pm

“You’re a speculator, not an investor.” — Garth

With the possible exception of venture capitalists, Garth… we’re all just speculators…

“Speculation is only a word covering the making of money out of the manipulation of prices, instead of supplying goods and services.” – Henry Ford

“In the 1970s New York City was going bankrupt. Don’t bet against America.” — Garth

http://tinyurl.com/2fbj7aq

;)

#18 bullion.bunny on 09.24.10 at 11:48 pm

The gold bubble is a giant bet against America, and will end badly. – Garth

Let’s see…..
1.) 40 million Americans on food stamps.
2.) 13 trillion in the hole.
3.) 25 trillion in unfunded liabilities.
4.) 3 trillion in wars that are “off book”.
5.) 30% of heavy industry gone to china.
6.) An aging population with few or no pensions.
7.) A public education system that is broken and ranks near the bottom.
8.) The complete collapse of the housing market, followed by a complete collapse of the banking system.
9.) Wall Street fueled by out of control greed.
10.) Resource depletion on almost every front.

………yes America is in fine shape, need I go on? I do agree with you however that the U.S.A. will overcome its problems. This however will take at least a decade and gold can move much higher in that time frame.

#19 VICTORIA TEA PARTY on 09.24.10 at 11:49 pm

#2 Blase

I also can’t see how the US can have an economic renaissance starting about five years hence.

For that to happen some boffin, in a university lab somewhere in that country, will have to invent something that will take the world by storm; American workers will have to be trained in skills that no others anywhere will be smart enough to beat; and a sales force of heavy-duty persuaders will have to stomp about this chunk of rock, selling this “thing” to people, regardless of their ability to afford it. Then multiply that gadget by many, many more to get that whole enterprise back to where she was in 1969. Then, maybe, pehaps.

I can only see advances occurring if:

-the education system is suddenly transformed into a “learning” system, rather than a baby-sitting system for child-like misfits of all ages cared for by whiney public sector school marms;

-an industrial strategy that will be ready to produce the latest “thing” mentioned above;

-the national debt, including unfunded liabilities, is somehow corraled by a much larger income stream coming from God knows where. And on and on.

The US economy’s problems are now regularly being masked by nonsense government stats. The latest NBER blather that the US recession ended in mid-2009, has been highly criticised by some in the MSM and commentators and others who make a living analysing such stuff. I don’t believe those stats.

A renaissance, to me, is a serious shift in societal attitude initiated by an implacable desire to get out of a very uncomfortable rut.

The American rut is wide, deep and very, very long right now. For those wanting to escape, most cannot because they don’t have the equipment.

For the rest, it’s a comfortable sewer in which they will dwell for a very long time, because they’ve given up on the American Dream.

If 300-million people is the US population then about 250-million of them will have to have the jam to escape the rut.

Otherwide it’s a no go. And someone else will start ruling the roost and the rut will be filled in and forgotten.

On a happier topic:

They waiting for Garth in Victoria: Bulletin…Bulletin…

-The Oak Bay Border Patrol held its first meeting last night since November 11, 1918 in Col. Nutmeg’s tudor style bungalow overlooking the lovely Chatham/Discovery islands. The Warning Order was issued, and uniforms were distributed from QM Stores:

-jodhpurs

-tweed hunting jackets

-brogues

-wool knee-high stockings

-deer stalker hat

-flask with three fingers of single-malt

-concrete-filled and licenced long-barrel muskets.

Patrol area…deepest Foul Bay Road, 500-600 blocks, starting at dawn, after a robust singing of “God Save the Queen,” and two fingers, as the sun goes up over the yard-arm. So watch it, Garth!

-Over in Falacious Fairfield a lot of appointments are being made with stress counsellors and lattee emporia outlets.

-In jaded James Bay, another (!) celebration of 1968 (one every night BTW).

-In flakey Fernwood, BONG…!

-As for Esquimalt, the perpetual emergency continues.

-Saanich: still gathering recall signatures. Clueless.

This is the Way It Is in the city that sleeps fitfully or whenever it damn-well pleases. Servant! Pull Up the Drawbridge. He’s coming!

#20 Industrial Guy on 09.24.10 at 11:51 pm

Construction accounts for 12% of Canada’s Gross Domestic Product according to the The Construction Sector Council (CSC). That’s more than a million direct jobs.
The Government of Canada has chosen not to extend it’s support of infrastructure projects past March 2011. This decision couples with a decrease in demand for both new home and commercial construction over the next two years could throw hundreds of thousands on to the unemployment rolls. We can expect that many of these newly unemployed will be dumping their homes on the market to reduce expenses and free up cash. If we mirror the recent U.S. experience, new home construction will basically come to a halt as the inventory of homes in the resale market grows from a few weeks supply …. to in some areas a years supply.
This will not end well ….. Everything is connected.

#21 The Original Dave on 09.24.10 at 11:59 pm

G Man, I hate contradicting you, but there’s something you’ve been suggesting lately that I’m not sure will transpire in the coming years.

You’ve been saying that there will be an equities rally in the coming years because of the boomers. This is assuming the boomers sell their homes and move into equities. This suggestion is logical. That is the problem though. Since when do the masses make sensible financial decisions? The public, for the most part, see the stock market as a giant casino. They’re not going to roll the dice (in their eyes) with their remaining dollars. Real estate is a very emotional asset for people. Downsizing might be a more likely trend. I don’t see people cashing out of their homes and dumping it into the stock market. GIC’s, savings accounts etc seem like a more probable area. This won’ t spark a rally in the stock market unless you get out there and educate the millions that need the education in Canada.

People scrape by without even knowing that they’re scraping by. Some how, some way, they’ll survive and if there’s a crisis, the government is always there as a shoulder to lean on.

Secondly, a rally in equities (I’d imagine you mean tsx), would possibly depend on higher commodity prices. Oil, copper, uranium,gold, silver etc. There are roughly 4-5 countries with lots of boomers – Canada, U.S, Australia, New Zealand. The boomers in those few countries don’t have the pull to bring up any of those commodities to make mining sensible for any of the commodities I’ve mentioned.

Basically, if China and some Euro countries, or the U.S and India are saying “Eff you” to a commodity, and are not purchasing, there won’t be a rally in that commodity which will make anything associated with that commodity on the tsx undesirable.

#22 Larry on 09.24.10 at 11:59 pm

The herd look at low interest rates and spend like there is no tomorrow.

#23 False Facade on 09.25.10 at 12:01 am

Hey Garth, you rock!

Financial assets are the only way to go. People say we don’t make anything here in North America. But we do! We print money, we make inflation and export it to other countries. Inflation is coming and it will help the financial instruments! Buy on dips!

I so agree with you!

#24 Ha ha subprime on 09.25.10 at 12:12 am

Just read an interesting viewpoint, that from the perspective of Americans, (US citizens, not Mexico or Canada) all Canadian mortgages are structured as subprime. Here’s the beef: No locked in interest rate until the end of the mortgage (you probably know this but the maximum term anyone signs up for is 5 years on a 25-35 year mortgage). Lots of VRM’s. Zero down or maybe 5%. Subprime. All our mortgages are subprime, despite that there is the odd guy out there who actually can pay it off over time.

#25 The Original Dave on 09.25.10 at 12:16 am

Global National ran a piece tonight on his gold investors ‘can’t lose.’ Cue the shoe-shine boys. — Garth
———————————————————–

the only gold bull market you can compare the current one to is the one of the 30’s. Everyone on here talks about gold and it’s continuously about the nominal price of gold – what it’s priced in U.S dollars.

I have a question for you guys. Garth, when these wrong gold bets as you’re suggesting, come into fruition, do you think that gold will fall and other commodities will rise in value? I’m talking gold vs. copper and gold vs. silver, gold vs. oil etc.

During this rally of the last month, these commodities have been rising in value versus gold. Are people oblivious to this? A happy stock market and inflationary times may bring the price of gold up, but it brings everything esle up higher.

If you guys are talking about gold getting clobbered in this environment (deflationary economy), everything else gets clobbered even more (yay, just like the 1930’s). Gold miners make more money because they extract gold for a cheaper price. In this scenario, the bull market in gold remains.

Basically, you need credit expansion to get everyone buying things again. This makes for an active economy, higher stock prices and so forth. Credit expansion would deter people from buying physical gold and would also minimize profit margins by the gold miners.

The only question is: how the heck does anyone see global credit expansion in the next few years?

#26 Nostradamus Le Mad Vlad on 09.25.10 at 12:24 am


“. . . The gold bubble — gold will rise some more . . . the cusp of a depression. . . just a number of numbing years of discomfort, equity loss . . .”

At the Howe Street schmozzle last week, there was a company there (forgotten their name) who were gasping for investors. The price of the stock? 13 cents a share.

Unlike Bre-X, everything was already proven and all the equipment was already in place to start whatever they were doing.

Oohhhh, to have a hundred grand sitting around, twiddling its fingers and begging to be used, because that is where I would have parked it.

That would be running away from the norm.
*
Dates are very interesting. Remember George H.W. Bush’s speech to Congress re: the NWO?

For those who don’t believe pigs fly, here is the proof.

Deflation Obama’s latest rotten fish offering (BP preferreds?).

Not peak oil. Not peak gold.

Earth, Wind and Fire. At least it rhymes!

Curious to see if this spreads world wide via other unions.

Cute charts and stuff I don’t understand about US Treasuries. More bondage stuff.

How critical can a market crash be?

#27 Basil Fawlty on 09.25.10 at 12:27 am

“What won’t happen: Hyperinflation with the US government purposefully devaluing its currency.”
Does this mean QE is going to end, or that the US government can fine tune the money printing to avoid hyperinflation? The US dollar has been devalued to the tune of 95% since 1913, indicating a rather poor track record of protecting the value of the currency. There must be some adverse consequence associated with the printing of trillions and more to come.

#28 rp1 on 09.25.10 at 12:39 am

Economic renaissance in America? You’re nuts. The US has had incredibly self-destructive policies for 30 years. America sent manufacturing overseas, then development, now research. What do the Americans do again? Finance it I guess, for a while yet. They don’t even educate their children properly because what is the point? It’s a liquidationist policy Garth. Sell and outsource everything to enrich the top 10%, then 1%, then 0.1%, now 0.01%. Pacify the population with lies and TV. The only thing they have is scams, until that is outsourced to Nigeria.

#29 Tom on 09.25.10 at 12:45 am

Another Olympic Village F$%$-up
Vancouver CIty council Caught in about face
http://www.citycaucus.com/2010/09/vision-council-caught-in-apparent-in-camera-policy-about-face

Severe price reductions, loans to developers… he’ll they just can’t sell these units…

Our brilliant mayor wants transparency:
“”We’re calling for transparency so that the people of Vancouver can understand what the risks are and whether there are problems with the loan as it’s been approved. We’ve heard all sorts of rumours and new information through the media this week. We’d like to hear that in public, in council, and understand what is exactly going on in this deal.”

Transparency now? Isn’t it a little late Gregor?
Where was this line of thinking before the site was developed and before city council F#@#ed it up?

How about our “Conservative” Govt?
1.2 Billion on the Summit. What did it do for us?
http://www.cbc.ca/canada/story/2010/09/24/g20-g20-spending-liberals.html

#30 Tom on 09.25.10 at 12:47 am

City of Van allegedly makes Secret Loan to Developer to get rid of Olympic Village

http://www.canada.com/theprovince/story.html?id=6b638362-fca7-400e-8e13-b3244d9ee806

#31 Joseph [Original] on 09.25.10 at 12:52 am

Another must read by Mort Zuckerman on the US housing crisis.

http://politics.usnews.com/opinion/mzuckerman/articles/2010/09/23/the-american-dream-of-home-ownership-has-become-a-nightmare.html

#32 EJ on 09.25.10 at 12:54 am

As long as governments continue to act irresponsibly, refusing to accept the consequences of their past actions, attempting to cheat (inflate) their way out of taking their medicine, and screw the responsible citizens, gold will continue to rise.

That’s my signal to sell gold; when governments start doing the right thing.

I’m not sure it’ll ever happen though. These guys seem to have a terminal case of stupid.

#33 Brian1 on 09.25.10 at 1:30 am

Garth; as I think on it you may be saying that even though houses fall, perhaps 40%, the baby boomer will still sell their present house from 2010 to 2020 in order to downsize and use those proceeds to invest in the stock markets to fund their retirements? Do you think that 40% is a conservative number? I hope that I am not asking too much of you but this seems key to your assumptions and I’m sure that an answer would help us all.

I have submitted a request to attend your Toronto conference but my E mail does not work too well.

#34 John De Melville on 09.25.10 at 1:45 am

In the 1970s New York City was going bankrupt. Don’t bet against America. — Garth

I’m sure they said the same about the Egyptian empire, Roman empire, Austro Hungarian empire, British empire… … but when your time’s up it’s up. Cycles Garth, birth-death cycles. Can’t beat ’em, maybe just delay with smoke ‘n mirrors.

#35 Jack the Lad on 09.25.10 at 2:01 am

Garth wrote:

“In the near future (within five years), the USA will start into an economic renaissance which will support equity markets.”

I would be inclined to agree in a sense because, historically, “every bust ends in a boom” usually (but of course not always.

It’s easy to say “don’t bet against America because Rocky always recovers and wins in the end”, but given that a lot of the real wealth producing industries have been moved off-shore in the recent years, I just don’t see what’s going to support the renaissance (barring of course some great new technology that changes everything).

#36 Fritz on 09.25.10 at 2:47 am

So when are you dumping your gold?

#37 pks on 09.25.10 at 2:48 am

Garth, you must get hundreds asking you about this topic daily, the sanest of which _merely_ show up unannounced in your office wearing a tinfoil hat and camouflage fatigues, so I apologize for asking in advance.

What do you think of peak oil theory? If nothing else, it has serious implications for ex-urban real estate, right?

#38 mel on 09.25.10 at 2:53 am

If you know enough about States history, it will tell you they have been there more than once. Never learn, I guess. They will eventually overcome it, but it will take time.

I don’t agree with Garth that it will be in a recovery in 5 years or so. I have held the view that the coming decade will be lost for many middle class around the world. Ten years from now, many midlle class people will be poorer than they are today.

Also, don’t agree that oil will be high. It will fall first in a big way, stay there for sometime, and only after 2020+ will it start to recover .

As for Gold, most likely it has not reached it’s peak yet. However, it is only for those who want to be brave with their money.

I still don’t get as to why GIC is such a bad investment? If you like Bonds, why not lock in some GIC? Are you so sure that interest rates are going higher? If yes, then why Bonds? I am not saying all of your money! Some.

#39 Burnaby Boy on 09.25.10 at 3:00 am

I missed both the housing bubble and the dot com bubble. I am trying to catch the next bubble which is supposed to be the precious metals. When do I get out and switch to dividend paying shares? That is the catch (trap), the timing.

#40 grumpy on 09.25.10 at 3:02 am

As cash go’s south in purchasing power commodities will march higher in lock step….after all the Arabs aren’t going to accept 60 cents on the dollar and neither is anyone else. So forget about monetization…we’re looking at asset inflation…..gold will rise along with everything else. Where will gold go from here…who knows..the fundamentals of a falling dollar support higher prices.

Look at the uncertainty lasting at least after until the next election in the US. I think you’re right about the market improving…but it won’t be on the back of an improving economic picture.

1) There will be either be a a guarantee by the Obamanutz to guide the market through POMA intervention thus moving money off the sideline.

2) More of the same from the GOP after a change of leadership

Either way…we’re still in the crapper…what the market needs is a good old fashioned wash out…until that happens these bubbles will continue to destabalize free enterprise globally. Theres no such thing as a market without losers….except in never never land that is.

#41 grumpy on 09.25.10 at 3:26 am

http://money.cnn.com/2010/09/24/markets/thebuzz/index.htm

#42 TheBigLebowski on 09.25.10 at 3:40 am

#2 blase
after currency devaluations similar to the Louvre Accord of 1987 and the Plaza Accord of 1985, America will be the new Argentina. Standard of living will be cut by 1/3 and the middle class will be gone. Sovereign debt will be defaulted on amongst nations and revaluations and devaluations of currencies globally will take place against one another. In the 70’s as Garth tends to omit, the U.S didn’t have massive debt to the tune of 100 trillion dollars counting all unfunded liabilities. A default is coming, bet on that.
I don’t believe our dollar will soar. Carney came out today and said as much. We will devalue right along with the U.S he said. Gold isn’t going to rise “some” in this environment. Its going to blow through $2000/ounce on its way to $5000. This is just to adjusted to inflation since 1980. Central banks have run out of gold to sell into the market to suppress the gold price. This is why we are about to enter stage 2 of a 3 or 4 stage secular bull market in gold. The manipulation is ending and its the only safe place to be going forward along with commodities in the inflation phase. But eventually deflation will take hold and the plug will be pulled on the global economy and you will wish you owned gold/silver assets at that point.

#43 TheBigLebowski on 09.25.10 at 3:48 am

The gold bubble is a giant bet against America, and will end badly. – Garth

This helped me make up my mind. I am purchasing another 10k of gold/silver on Monday, which is options expiration day by the way so there will be a battle going on. If I had more cash I would buy even more but I am already long. If garth had recommended gold 30 months ago he would have helped people protect themselves and double their buying power as well. I hope people are taking measures to protect themselves with some real money and not that funny colored paper with pictures of old Freemasons on it.

#44 TheBigLebowski on 09.25.10 at 4:03 am

All the gold in the world is only valued at 1% of all financial assets and what is still in the ground only equals another 1%. Historically that figure has been higher than 20%. So where is that bubble again?

#45 Bill ( Peterborough) on 09.25.10 at 4:07 am

Well Garth , looks like alot of the middle class will not recover , being in hawk to their eyeballs.

Shame they were hoodwinked by the government/ financial elitist’s/ medias to get further in debt.

And some people on this blog actually think the government will save us.

There will be alot of people hurt . Families torn apart, crime usually goes up…

I would like to thank all the political ; bought /payed for, parasites for ruining this country of ours, as well as other countries.

And especially the Banking Cabals for ruining the world, creating most of histories conflicts….

May you all get back 100 fold of you bestowed upon us.

http://www.youtube.com/watch?v=D97OxHZzBeQ

#46 Bill ( Peterborough) on 09.25.10 at 5:25 am

No depression , just a declining standard of living for most people.

Wonderful statement Garth. Funny how the people with abit of wealth are under the illusion that they will be alright. After “THEY” have sucked dry the middle class , who do you think will be next.

Food for thought ( Not intended for sheeple)

http://www.youtube.com/watch?v=_dkC8OwIImM

http://www.youtube.com/watch?v=QOhU7i_vnlU

http://www.youtube.com/watch?v=Adn8qFhq4l0

#47 Buyright on 09.25.10 at 5:27 am

Good weekend reading

Bubble or not, Canadian markets in for rude awakening

http://www.theglobeandmail.com/globe-investor/investment-ideas/experts-podium/article1722246.ece

The housing boom is over—really

http://www.theglobeandmail.com/report-on-business/rob-magazine/the-housing-boom-is-overreally/article1719330/

Consumers ‘relapse’ on the economy

http://www.theglobeandmail.com/report-on-business/consumers-relapse-on-the-economy/article1720528/

Recovery declining dramatically: economist

http://www.financialpost.com/news/Canadian+economy+declining+dramatically+economist/3563588/story.html#ixzz10K8reftd

#48 Ottawabound on 09.25.10 at 5:50 am

I do enjoy reading your blog, I may not always agree with your predictions and or statements. Your timing is sometimes off but that’s a risk of being a forecaster, such as making assumptions that may change in an unpredictable manner.

I have stopped reading most of the daily posters from grampa grinch to dark sad person to gold doomers and then the gloomers, as many of their comments are the same every day blah blah everyday.

So 60% of the population has no savings or pension and all their money in mortgage and RE and it will not end well.

My question is was this not the same situation in the last housing crash in 89? So my point is, we survived that one? So why is this time any different?

Even if 30% of America has negative equity? And even if it happens here? Its only hurts the people that sell.
Same sort of thing you say about preferred shares never sell? Oh its different because its RE?

I do not think the Boomer situation will end badly because in the paper on Friday, just as I predicted weeks ago on this blog, is that boomers will not retire but will continue to work for what ever reason negative equity, too much debt or no pensions.

That’s the problem with some of your assumptions on future predictions you cannot predict a shift in people’s attitude. If something bad happens people will shift their attitudes to correct their problem.

#49 HappyTradersFx on 09.25.10 at 6:13 am

I am currently considering investing in Canada and my quest for info on housing led me to this site. I must say that I was impressed and have read the recent postings…thank you.
There is however one particular point that I disagree with Garth in his position that vis-a-vis the economic health the USA and Canada are much closer than people believe. It is my opinion that the FED’s reply to the crisis has been quite different than that of the BOC but I won’t go into detail on this point at this time.

I should note that I reside in Japan and my travels to Canada are limited to my stays at the Chateau Frontenac in Quebec city which is the only part of Canada worth spending a week in if you’re looking for a truly Canadian experience. I am a Japanese citizen with a European background…that is my bias.

Recent Canadian data clearly shows that its deficit is falling. July compared to last year for example continues to show that the conservative govt is doing its bit to bring spending under control following a bout of supporting the economy by spending billions to keep the economy afloat with a significant portion going to the auto industry. Canada’s July deficit totaled $473 million loonies which is a drop from the 580 billion from last year (that my Canadian friends is some serious loony). Sure some will say “this is a fluke” but not so…From April to July of 2010 the budget shortfall tanked to 7.7 billion compared to 18.33 billion for the same period in 2009.

Numbers don’t lie. Unlike most governments yours has been quite accurate with its assessments. Stockwell Day, the Canuck charged with finding ways of cutting corners is on target for meeting his targets “we’re staying on track” he said and numbers back him up. Jim Flaherty was quoted as saying that the budget would be back in surplus next year…okay well that those sound a tad optimistic but the point is being made…

Canada is canoeing ahead in clearer waters than its American neighbor which is still expected to dive into debt as speculators bet that another round of QE is now virtually guaranteed. The FED continues its key language tag “to remain unchanged for the unforeseeable future” while Canada has already begun its tightening cycle by raising rates.

While we need to take with a grain of salt what politicians say..the numbers do seem promising here. Canada is now aggressively tackling the deficit and promises to end its extraordinary stimulus spending at the end of March 2011 which will take a massive bite our of its deficit. Flaherty promises more savings as well with freezes on all operational expenditures and cutting low priority programs.

I’m not interested in getting into a debate regarding the social costs associated with govt cutting of social programs…I only stated the above to illustrate my point that the USA and Canada are not similar in respect to the current economic and monetary policy.

I hope I am welcomed here and will post again if welcomed.

Happy

#50 nestor on 09.25.10 at 6:29 am

Garth, i have to respectuflly disagree with your statement that gold is a bubble. A bubble measured against what?
In your house valuations, you claim home prices are 5X+ the average family income. The SP500 a decade ago, reached astronomic P/E ratios, and a 1% dividend yield. The Nasdaq was far worse.

What is your comaprison for Gold, and the basis of your statement that it’s in a bubble?

#51 Moneta on 09.25.10 at 6:52 am

Long term, the US dollar needs to drop so Americans can stop living the big life at the world’s expense using its overvalued dollar.

Short term, the world is set to export to America and the rich are the exporters. Politicians around the world are the exporters’s puppets and the latter will force their respective countries to devalue its currency to keep the export game going as long as possible.

It’s called a race to the bottom and it will get ugly.

#52 bruce corell on 09.25.10 at 7:11 am

Was at a real estate meeting the other day. Were presented with compare sheets , London, New York, Chicago and other large cities. All have had corrections except Toronto. Toronto is at a 20 to 25% correction level due to its recent surge. All foreign investors have bailed and this will cause immediate stall in sales and price. You can make up all excuses but this is inevitable and all charts point lower since May 2010. The decline has begun….

#53 Genghis on 09.25.10 at 7:12 am

I am not sure if this has been posted in the past on this blog. Bloomberg has a chart that tracks the price of gold in 1980 US dollars. As of yesterday it is closing in on US $600 in 1980 dollars.

http://www.bloomberg.com/apps/quote?ticker=IADMGOLD:IND

The last peak in 1980 was $2,287 according to the US Dept of Labor http://www.bls.gov/data/inflation_calculator.htm

Gold may be in a bubble, however that is not going to stop investors from riding it up. Once it starts it is nearly impossible to predict how high it will go. Usually it will go to shockingly high prices, higher than most people would have predicted, just like the house prices did over the last decade and the tech stock market bubble before that. Even when clearly overpriced money can be made and that is what will drive all sorts of investors to jump in, including those who know the current price is bogus (professional fund managers included).

#54 Bill ( Peterborough) on 09.25.10 at 7:25 am

Re #1 Grandpa Grinch;

I’ll take some of that as well.

Gold has always been a good bet in these times. ( personally I like the kind I can touch, feel , look at)

I have always made money on real estate. Can still make money on it. Alot of good deals will be coming up. The question is to know what to buy, when, where.

As far as the stock markets…; I have no faith in them, since they are always being manipulated.

There books require a team of forensic accountants to get to the bottom of their actual worth.

Sort of like fractional banking. How the hell can you lend more money than what you physically have. Wild.

Like going to the carnival and spending $5.00 to get the 50cent prize.

Step right up, we have a winner everytime.

#55 PR on 09.25.10 at 7:34 am

The deliberate suppression of both gold and silver prices gave the elitists time to create a one-world currency and one-world government, but thus far those efforts have been unsuccessful and the world is learning via talk radio and the Internet exactly what these people are up to and the public worldwide is outraged that they have deliberately perpetrated such a crime. These dark powers didn’t plan on the public finding out what they were up too. The result has been slowly rising gold and silver prices, which has only served to allow many to purchase these metals at prices far below their true worth. Major financial changes are beginning to manifest themselves, and no matter what those in charge do, they can no longer control the value of the dollar, or gold and silver.
The result of this gold and silver suppression, which is finally coming to light, has been ten years of upward movement in these metals. The fall in the dollar has been totally offset by gains in gold and silver and that will continue with the inclusion of a catch up factor that will be startling in its scope and force. You haven’t seen anything yet as we enter phase two of a three to five phase bull market. Over the past eight years, in what will prove to be the biggest bull market in history, gold and silver have risen a compounded just under 20% annually. When compared to all real estate, stocks and bonds this is phenomenal and this was just the beginning.

#56 breezer1 on 09.25.10 at 7:39 am

had they invested in gold and silver…
http://www.msnbc.msn.com/id/39312450/ns/business-real_estate/?source=patrick.net#lead

#57 Taipan on 09.25.10 at 7:57 am

Gold isnt rising, the USD is falling against gold.

Also check the long term price of gold. Yes its probably got more run up, but its into bubble territory as well from now on.

Dont believe me, look how quickly it dropped last time.

#58 Old_is_Gold on 09.25.10 at 7:58 am

I wouldn’t bet on the Canadian dollar rising either. Once the Canadian RE bust becomes mainstream news around the world, the C$ is going to take a hit as is the Aus.$

Amongst Fiat currencies the US$ will most likely be the last man left standing since it is still the reserve currency and oil is still priced in $. So we’ll wait and see what happens when the world starts viewing Canada as they presently do the US, the UK or worse the PIIGS nations. Then we’ll find out the real value of our $, has been down to 63 cents in the past, may go back down to the 70-80 range again.

#59 Grandpa Grinch on 09.25.10 at 8:02 am

You’re a speculator, not an investor. — Garth

I’ll take that response as a resounding “NO”. If you aren’t willing to stand behind your assertions on this blog, than they shouldn’t be posted as gospel. Not only is gold not in a bubble by any quantitative measure, but it has a long way to go before it is. The following link should clearly show that:

http://www.zerohedge.com/article/gold-bubble-visual-aid

#60 BrianT on 09.25.10 at 8:03 am

#18Bullion-and: #11-leadership determined to increase illegal immigration from Mexico indefinitely, with the major intent lower median wage levels for the US. Anyone that predicts the US will recover should show their evidence for an increase in median US wage levels, because without a very dramatic increase, it is literally impossible for the slide in US median home values to turn around. US real estate is at 2003 levels right now (median 204000) and this is with almost all mortgage lending backstopped by the taxpayer, millions living in homes without paying the mortage, etc. etc. US REAL ESTATE IS FAR TOO EXPENSIVE FOR THE ASSET POOR AND UNDERPAID US PUBLIC.

#61 BrianT on 09.25.10 at 8:28 am

#49Happy-a reasoned comparison would be Canadian deficit numbers circa 2010 and US deficit numbers circa 2005 (when their real estate bull was running). You seem unaware of the incredible deficit run up by the Ontario idiot (in the midst of an alltime RE bull market)-compare it to California’s.

#62 Brian1 on 09.25.10 at 8:46 am

Well I can’t get any answers for my questions so I’m left to assume that they will be forethcoming in your Toronto lecture provided I am invited. But what if I’m not invited or I can’t make it. What if all the information is overwhelming. How will I find my way home?
I think though that if the baby boomer sells his house and puts the proceeds into savings and GIC’s that money will still find it’s way into the stock market. Is that plauseable?

Garth; who on the blog is worth listening to? Can you rate each one or is that dangerous. Most have logic skills but who do you think is right. Gold will probably go to 3000 since Mr.Rosenberg suggests it is possible. BTW, I no longer am suspicious of him. I think he is sincere.

#63 S.B. on 09.25.10 at 8:49 am

I used to know a former futures broker who said back in the early 1980’s, when gold was in its previous bubble, that people were lined up outside his office in the morning looking to open accounts. History repeats.

Look what happened to those who bought in 1980:

http://www.futuresbuzz.com/gc.bmp

In early-mid 2008 on the streetcar I heard people excitedly chattering about peak oil and a $200 price target. How’d that work out? Oil then plunged by 50% or more within a year.

Commodities (they are not money or a substitute for fiat money!!), gotta love ’em.

#64 Sherri on 09.25.10 at 8:52 am

“The gold bubble is a giant bet against America, and will end badly. -“-Garth

Get a new bag of tea leaves Garth. Talk about a mega misread.

Gold is a global bet against WORLD-WIDE(not just USA)
money printing and currency devaluations. (Read this weeks news from Japan, US, Brazil, UK, Korea, China, Peru, Colombia).

Gold is at ALL-TIME highs in all currencies not just the USD.

Try Earl Grey. Your Orange Pekoe aint cuttin’ it.

http://www.galmarley.com/Chart_pages/currency_charts.htm

#65 BrianT on 09.25.10 at 8:58 am

Don’t bet against America (I think that is Charlie Munger’s catch phrase)-Vegas real estate is coming back strong http://www.youtube.com/watch?v=UN6882gSMJY&feature=related

#66 Joel Brico on 09.25.10 at 9:11 am

Slow news day – stir up the gold bugs

#67 John on 09.25.10 at 9:11 am

Anybody have any estimates on how much upside is left in gold? Rosenberg projected gold at $3000 the other day. Worth investing at this point?

#68 C on 09.25.10 at 9:17 am

Garth, I love ya but I disagree with you in regards to your gold and USA comments.

The USA is in MAJOR MAJOR trouble. I truly believe they are at the point of no return. There is nothing they can do to escape. Their only solution now is to just let things play out and deal with the aftermath. They have a crumbling infrastructure, education system, rising poverty, massive municipal/state/federal deficits, on and on.

The Fed can’t raise rates here because that’s the only way the US banks are making money through spreads. The Fed can’t raise rates because the US consumer is on life support and any raise in rates to credit card rates/lines of credit/variable mortgages will kill them.

Obama ia failing. He has promised change but what’s really changed? Not much? Starting today he needs to address the American people from the Oval Office saying we as a nation must change. Slash military spending big time. The empire is failing. Use the savings from military cuts to build America financially, intellectually, and spiritually. The focus should be making America strong at home, not globally.

The USA is quickly slipping from a leader in the capitalist world to a banana republic. Their manufacturing sector has been decimated and now the US is fully dependent on the service sector and creating paper profits.

As for gold, there’s a simple question we can all ask to see if gold is in a bubble or not. How many people own gold? How many of your friends and family own gold, gold ETFs, or gold mining shares? Probably about 5% tops. If so how can we be anywhere near a bubble??

In 1980 we had line ups at banks to buy Canadian Maples. Do we see that today? Nope. Just a lot of tv commercials telling us where we can sell our gold. When radio and television is full of ads where we can buy gold and silver and people are going head over heels to do so, then we are getting close to a gold top.

In order for the whole gold story to end we need a major shift in the G-8. They must start raising rates, cutting debts and spending. Due to the democratic system this won’t happen cause it will cause a loss of political power.

US financials are a joke as well! Anyone remember how they started their rally back in March 2009? It’s because marked to market was tossed aside and the US financials didn’t have to report the actual value of all their toxic assets. What about all the showdow US housing inventory that still isn’t being reported. Banks are allowing people defunct in their mortgage payments to live in their homes so the homes stay someone maintained.

2008/2009 was act 1 of this mess. We’ve had our rebound which is expected when stock markets fall so fard so fast. Act 2 will emerge likely any day and my bet is it will begin this coming week.

At $147 a barrel we had an oil bubble. How many people owned oil? Lack of widespread ownership did not stop it from losing 70% of its value. That is no valid argument. As for the USA, take positions now for the road back. — Garth

#69 Blitzkrieg on 09.25.10 at 9:23 am

In regards to America, keep in mind that we have not seen the commercial real estate collapse as a very high level source has informed me that banks are allowed to price it at book value, mark to market does not apply. Furthermore, class A office in New York has declined by over 40% since 2006, most loans are rolled over 5-7 years. The CAP rates are lower, prices are lower, rents are lower, lenders are not lending….its a disaster in the making, don’t forget the market is much larger than the residential piece.

#70 Blitzkrieg on 09.25.10 at 9:32 am

Garth,

You constantly assume that boomers will sell housing and favor equities/debt investments. What about, liquidating current investments in order to prolong occupying that residence? You can’t disqualify that behavior and personal choices will entirely (or not depending on access and relationship with a good CFP) depend on whichever lifestyle creates the most happiness and peace. For many it involves staying in current residence until it is no longer physically possible.

Of course some will do that. Poor souls. — Garth

#71 T.O. Bubble Boy on 09.25.10 at 9:37 am

Betting against America? Berkshire Hathaway is up 22% in 1 year.

(vs. Gold up 28% I believe, and S&P up 7%)

#72 T.O. Bubble Boy on 09.25.10 at 9:38 am

I have a great idea for the Olympic Village: put it on a boat, and ship it to India… I’ve heard that they are looking for an athlete’s village in New Delhi!
(since the current one looks a bit like the car in Garth’s pic)

#73 Blitzkrieg on 09.25.10 at 9:41 am

BigLebowski

I am all for gold but have you thought of a scenario where the ruling party, class, world government…. will decide that gold is no longer exchangeable for money and it no longer holds any value. I understand its abstract thinking but do not forget the 1930’s Roosevelt gold confiscation. I feel that silver being a more industrial metal is a far better inflation protector, means of exchange and storage of value.

#74 breezer1 on 09.25.10 at 9:43 am

a gold prediction…
http://fofoa.blogspot.com/

#75 Ndg on 09.25.10 at 9:45 am

It’s different here in Montreal
http://www.shdm.qc.ca/acces_condos/en/programme.php

#76 dd on 09.25.10 at 9:47 am

“What won’t happen: Hyperinflation with the US government purposefully devaluing its currency”

True. But the fed just changed its inflation policy (last week). It wants to run with inflation – create it. It is the only way to manage its debt outside of actually living within budget. If they can run inflation at 4%, in 20 years the debt can be 1/2.

Furthermore if the US proceeds with this borrow and spend mandate what is to change? I see the old pattern is back; high trade and budget deficits. This pattern has to be broken. I don’t see any concrete policy or plan in place to address this issue. The decks have to be cleared to start a true bull run. Not this lift based on printed money. Until then it is wishful thinking.

Hey … I thought that this was a real estate blog.

#77 bullion.bunny on 09.25.10 at 9:53 am

“In the 1970s New York City was going bankrupt. Don’t bet against America.” — Garth

“You’re a speculator, not an investor.” — Garth

Very interesting indeed! Let’s bring a few more facts to the table, the link below is a BBC documentary called “New York – Nightmare In The City that Never Sleeps”. Chronicling the profligate spending in New York City, leading up to its near bond default. I would recommend everyone watch this, BBC did a fantastic job in presenting little know facts.

http://www.youtube.com/watch?v=Ex-iMzSNcrE

Yes don’t bet against America when it has just one city in trouble, but this time around America has most large cities in trouble and in need of large cash injections. Case in point as follows:

“State Sen. Dave Luechtefeld was in session in Springfield, Illinois when he
got a call from the secretary in his district office. She was calling from a cell
phone because the district office phones, which are paid by the state, had been
disconnected for nonpayment.”
– stltoday.com, September 3, 2010

Will the Federal Government bail them all out? Most likely the Fed’s will, but if they do add another $1200 to the gold price as they roll over state & local bonds.

As far as Canadian banks go one question remains to be answered. If the banks are so healthy, flush with cash complete with strong asset balance sheets. Why are they raising cash issuing preferred shares? Could it be that the assets they hold are questionable and they need to increase reserves? Let’s wait for the tide to roll out and we shall see who is naked. It should be interesting to say the least!

I would like to leave you with a quote from a speech given by W. Earle Mclaughlin president of the Royal Bank of Canada 1961-1979

“Governments, through creating a climate of uncertainty, particularly in the sphere of taxation and royalty policy, and through their siphoning off of the available financial capital into their own treasuries, can create the very need to step in. When governments then come to the rescue, let us not be deceived. We are merely seeing a shift or restructuring of control; we are not seeing the provision of any new physical capital. Furthermore, governments through their own powers are frequently in an advantageous position when they tap the freely operating financial capital markets, thereby pushing aside the private borrower of capital in those markets.”

Board of Trade Club of Metropolitan Toronto, March 24, 1975.

#78 dark sad person on 09.25.10 at 9:53 am

7 goldenfox on 09.24.10 at 10:58 pm

Dark sad person

I dont understand what your point is. Are you saying that house prices have to rise to validate an inflationary enviroment. As far as I know, real estate values fell during the wiemar hyperinflation. There is a story of a bellhop who recieved a gold coin for a tip from a wealthy client before the hyperinflation. At the height of the hyperinflation he bought the hotel with his gold coin.

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

I’m sure-that none of the pages of data I’ve given you-which you have not-or likely cannot disprove has sunk in-
Your post above shows your lack of understanding-

You claim-real-estate “fell” during Wiemar-
Then in the next sentence you talk about Gold value skyrocketing against the Mark-which has nothing to do-with Hyper-inflation-(it is only a result)

Of course goldenfox-
In Germany-people would sell their homes-because tomorrow-they would sell for “less”-in a devaluing currency

Give it up-

http://upload.wikimedia.org/wikipedia/commons/9/93/German_Hyperinflation.jpg

#79 C on 09.25.10 at 9:55 am

Garth,

Your point about oil at $147 a barrel is a good one. Pretty much everything got whacked during the collapse. I think gold went down to $680/oz from $1,000 in short order. I was still bullish on gold though through that drop simply on fundamentals. The peak oil story is good for oil but it is tied at the hip to the economy so the fear of a demand drought helped bring it down. So the fundamentals of oil were strong on one had but if the economy went to hell (as it did) then the demand side of the equation spooked the price.

I just feel very strongly about the fundamentals for gold and have so since 2004 when it was trading at $375/oz.

On another note, if we do get a big 20-40% correction in GTA housing prices it will be awesome!! Imagine if it happens for those of us waiting? The feeling would be amazing.

You know what’s weird, is housing was hot as a pistol in the GTA going into 89. Then as the economy froze the housing market did as well. This time as the economy froze the housing market started to freeze, but then the rock bottom rates were brought in. I guess this can be viewed as an artificially housing recovery from the bottom of early ‘ 09? If so then the housing market of the GTA could have an even better correction. Not only to be where it should be after such a strong economic contraction, but also to work off the 20% gain experienced recently.

Good things come to those who wait and patience is a virtue my fellow blog dogs :)

#80 Blitzkrieg on 09.25.10 at 9:56 am

On another note countries cannot afford to be raising rates as it directly affects increases in debt payments. As someone stated it is a lose-lose situation. I don’t have the numbers but Canadian Government debt payments amount to something like 20% of the entire budget. Raising rates would increase that amount, taking from other government spending programs.

I really hope that somehow US can overcome that big mess and come back from the cliff, the question is how?

Everything has been outsourced, its a service driven economy that with the exception of defense and air transportation, high tech and heavy machinery does not make anything else.

Stimulus program has not lowered the unemployment rates or stopped the housing collapse. With the exception of some minor upticks in indicators (green shoots) the recovery is stuck in between neutral and gear one. Judging from history you need a catalyst for economic expansion, be it a new free energy source, MAJOR properly spent and accounted for infrastructure stimulus bill, or a major war that spools up manufacturing and provides employment while killing off a couple million to lower unemployment.

#81 BrianT on 09.25.10 at 9:57 am

If there is anyone who owns a large illiquid house that you or your wife are attached to emotionally, you should check out the details re the CMHC reverse mortgage plan. You pay 1.5% over normal rates for up to 40% of appraised value. The real kicker is you are only responsible for payment when the house is sold or both of you are dead, and then you are only responsible for what you borrrowed, even if the house is worthless. A great many Cdn properties right now couldn’t sell quickly for 40% of appraised value, and this is just a couple months from a strong bull-this program could be huge (and a huge screw job for the taxpayer). The older demographic votes, and they will always vote in their self interest, so the program might become even more lucrative. Falling in love with a house is stupid, but if you (or more likely your spouse) is in that head space, this Ottawa scam could be a godsend. Especially recommended for those owning grand old mansions in Brantford, Welland, St. Thomas,etc.etc.

#82 dd on 09.25.10 at 9:59 am

#73 Blitzkrieg

..World government…. will decide that gold is no longer exchangeable for money…

The US can easily manage its balance sheet. The talk around is that they could revalue their gold holdings from $42ish to close to current prices or even sell their holdings. It was done a couple of time in the 70’s. By doing this the assets on their balance sheet are adjusted upward thus giving more solvency. It also gives the dollar more backing. Thus even though the dollar is not backed by gold there will be assets on hand to support the dollar.

#83 BrianT on 09.25.10 at 10:01 am

Correction-YOU ARE ONLY RESPONSIBLE FOR PAYBACK UP TO THE VALUE OF YOUR HOUSE (EVEN IF YOUR HOUSE IS WORTHLESS)-theoretically your actual payback could be almost nothing in the best or (for the taxpayer) worst case scenario.

#84 dd on 09.25.10 at 10:06 am

“This is why you need to be a contrarian.”

That is right.
– Sell your real estate in Canada because most own it. — Buy real estate in the US because most hate it.
– Buy gold and silver because most do not own it.
– Sell US goverment bonds because most own it (in 401K plans)

#85 dd on 09.25.10 at 10:08 am

#62 Brian1

..Mr.Rosenberg..

He is balanced. Big bond and gold guy. “Barbell” approach as he calls it.

#86 dd on 09.25.10 at 10:09 am

#66 Joel Brico

“Slow news day – stir up the gold bugs”

Totally. He hates them but it is 1/4 of his following.

I hate nobody, of course. But I feel sorry for those who so at risk. — Garth

#87 Shut Up Lebowski on 09.25.10 at 10:28 am

Hey BigLebowski,

IF you’re from Calgary, and I think you are, I know exactly who you are. You make me throw up in my mouth a little bit every time I have to hear you talk like you actually know anything about anything. The first sign of intelligence is a lack of certainty and an overwhelming curiosity to know more and more (since you’d be aware how very little you actually do know). So please, go find a gold blog to wet your panties and stay out of my reading material once and for all.

#88 alrightythen on 09.25.10 at 10:54 am

“Comparing the present day to the 70′s is naive at best. America was still a manufacturing nation, not just a warmongering nation. ”

And who is currently the biggest manufacturer in the world? The United States.

“Nobody has ever made any money betting against America.” ~ Warren Buffett

#89 Medic on 09.25.10 at 11:01 am

#59 Grandpa
Wow. I’m shocked that somewhere on the internet, you were able to find one chart that supported your position. You’ve convinced me.

#90 goldenfox on 09.25.10 at 11:07 am

Not always a good idea

Was talking to a friend of a friend yesterday and he was ticked. It seems that a few years ago his financial adviser talked him into taking out a mortgage on his mortgage free house and putting the proceeds into the markets to take advantage of the tax benefits of using borrowed money to finance investments. Well fast forward. His portfolio is down 30% and guess what, his debt is still the same. To say he’s not impressed, is an understatement.
Like I’ve said before, my house is mortgage free and I sleep good knowing that there are no financial intermediaries between me and my house. And in a way my house does pay me as I have no rent or house payments to make.

The only lesson there is to get better advice. Your ‘friend’ obviously did not have a balanced portfolio. — Garth

#91 bullion.bunny on 09.25.10 at 11:16 am

A financial meltdown wasn’t on the public radar. The Toronto stock market index touched 15,000, and few would have believed it could lose 35% by the end of the year or 50% by the spring of 2009.

I did…….and many others did to.

#92 JM in London on 09.25.10 at 11:23 am

#4 Old_is_Gold on 09.24.10 at 10:46 pm

http://business.financialpost.com/2010/05/13/gold-from-a-vending-machine/

not to mention:

http://www.oliverjewellery.ca/

and the exponential growth explosion in his ilk:

http://www.cashforgoldcanada.com/
http://www.cashgold.ca/
http://www.morecashforgold.ca/
http://www.gold4cash.ca/index2.html
http://en.dollars4gold.ca/

Not really saying anything here – just food for thought on the masses acting strangely. If the unwashed don’t understand gold, why would they be selling houses to buy it?

#93 LongviewLonghorn on 09.25.10 at 11:32 am

‘”I think the prices will go up. I think it’s a really great time if you have money,” Quilty said.’ (as she wiped her Kool-Aid mustache with the back of her hand)

Read more: http://www.calgaryherald.com/business/Incentives+being+offered+lure+condo+buyers/3576925/story.html#comments#ixzz10YhOuvbb

#94 PR on 09.25.10 at 11:38 am

I hate nobody, of course. But I feel sorry for those who so at risk. — Garth

Yes ,me too, for those guys: http://www.youtube.com/watch?v=iPvBQ1qscpg&feature=player_embedded

This blog is now scaring the crap out of me. — Garth

#95 dd on 09.25.10 at 11:39 am

#89 alrightythen

“Nobody has ever made any money betting against America.” ~ Warren Buffett

YA. He is selling the dollar short big time.

#96 Taxpayer like everyone else on 09.25.10 at 11:40 am

44 TBL – I’d be interested in your opinion on this:

http://www.financialsensearchive.com/fsu/editorials/dollardaze/2009/0126.html

#97 dd on 09.25.10 at 11:49 am

#25 The Original Dave

…Basically, you need credit expansion to get everyone buying things again…

This is what we DONT need. We need to save and produce not borrow and consume. “Buying things” we don’t need and can’t afford got us into this mess! Credit expansion is the old pattern. Guess what? It didn’t work last time and it isn’t going to work this time.

#98 goldenfox on 09.25.10 at 11:51 am

Do you feel lucky? Well do you, punk?

snippet:
“We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.” – 7/1/2005

“Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.” – 2/15/2006

Bennie actually made these statements when the chart below showed home prices at their absolute peak. You should keep this in mind whenever this rocket scientist opens his mouth about anything. And always remember that he is a self proclaimed “expert” on the Great Depression. That should come in handy in the next few years, just like his brilliant analysis of the strong housing market.

http://www.financialsense.com/contributors/james-quinn/the-child-of-the-mother-of-all-bubbles

#99 Al on 09.25.10 at 11:52 am

With the fat commissions from bloated commodity stock transactions, Toronto Stockbrokers will be buying expensive homes and condos in TO. Get in now before the herd !

#100 BrianT on 09.25.10 at 11:58 am

#80C-make sure you buy the right property because this isn’t 1989 where sky high interest rates buried the sector (and the rebound was fuelled by the huge interest rate declines). Far fewer residential properties will come back from this one.

#101 bullion.bunny on 09.25.10 at 11:59 am

#88 Shut Up Lebowski on 09.25.10 at 10:28 am

Nice, Stalin and Hitler have joined the conversation.

#102 Debtfree on 09.25.10 at 12:03 pm

@#73 Have you been watching glen beck ? The confiscation act was never used and repealed the very next year. It’s only ever been used to frighten the uniformed by scammers like glen beck in order to sell gold coins with little if any gold in them . I find it HARD TO BELIEVE that some of you guy’s are literate enough to find your way here but don’t now the difference between assets and liabilities or investing and speculating . I have both and do both but not enough of either to get hammered . For the guy that was pumping mutual funds yesterday read the “naked investor ” you’ll be glad you did . Banks sell them .. that should say it all. If you want to make money on mutual funds invest in the guys that sell them . They are the ones that make the money in mutuals.

#103 BrianT on 09.25.10 at 12:03 pm

#76DD-I don’t know why your misunderstanding of math is so widespread-an inflation rate of 4% does not magically decrease debt. You are assuming that the overall economy will grow at 4% just because some grifter decides it is convenient-how is it possible that makes sense to you after literally 30 yrs of economic experience to examine?

#104 dark sad person on 09.25.10 at 12:04 pm

#93 JM in London on 09.25.10 at 11:23 am

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

As usual-you’ve got it all-assbackwards-
By trying to prove Gold is in a bubble-you’ve done the opposite–

It’s when people are lined up to buy Gold-is when bubble characteristics are present-not when people are selling jewelry for cash-

#105 T.O. Bubble Boy on 09.25.10 at 12:05 pm

BUY NOW BEFORE INTEREST RATE INCREASES!!!

http://www.calgaryherald.com/Housing+prices+offer+good+deals/3578353/story.html

seriously?

at this point, who is scared of near-term interest rate increases?

#106 Tony on 09.25.10 at 12:08 pm

#1 Grandpa Grinch

Commodity prices will march “lower” next year probably sharply lower. Nothing has changed things are still getting worst in America. Bernanke’s comments fished in a lot of “stupid” money chasing something that isn’t there just like the fools chasing gold. The US currency should trade around present values vis-a-vis the Canadian dollar next year. The best bet will be short palladium, i’d look for a fall to the 350 to 375 US range next year.

#107 BrianT on 09.25.10 at 12:09 pm

#71TO-BRK price Oct 8,2007-127100 (vs 124800 currently). So a 1% loss over 3 yrs and no dividend-very impressive work for those two.

#108 Sam on 09.25.10 at 12:11 pm

QUESTION for the blog dawgs & Garth:

A relative was telling me that a friend of theirs was trying to talk them into buying several properties for rental income, and moving into one every couple of years and selling it for capital gains.

Is this the “REIN” approach?

If so, how are the REIN people going to fare going forward? Are their loans structured in ways that they might be able to survive?

Say one person bought 5 houses over 8 years, 2 in the last 2 years – say the overall average LTV is 80% as of today – will this person get wiped out with a 20% drop in house prices, 1 tenant stops paying for a few months due to job loss.

#109 bullion.bunny on 09.25.10 at 12:13 pm

This blog is now scaring the crap out of me. — Garth

Yes, too many facts to get in the way.

Take a look at the video. No facts there, bunny. — Garth

#110 BrianT on 09.25.10 at 12:15 pm

#99Golden-I might disagree about Bernanke-contrary to public belief, he is not employed by and does not work for the US government and is not obligated to serve the US public in any manner. He was brought in after the Greenspan era to attempt to limit damage to the connected banks-obviously this was enough on his plate-he cannot be expected to work on the overall US economy also as conflicts of interest necessarily arise.

#111 goldenfox on 09.25.10 at 12:20 pm

dark sad person
…………………………………………………
You claim-real-estate “fell” during Wiemar-
Then in the next sentence you talk about Gold value skyrocketing against the Mark-which has nothing to do-with Hyper-inflation-(it is only a result)

Of course goldenfox-
In Germany-people would sell their homes-because tomorrow-they would sell for “less”-in a devaluing currency

Give it up-
…………………………………………………..
Leave the mark out of it. If the hotel sold for many gold coins previously and then it sold for only one coin, then that means the price of real estate fell precipitously.
Okay now I will give it up. We’ll have to agree to disagree.

#112 bullion.bunny on 09.25.10 at 12:25 pm

Take a look at the video. No facts there, bunny. — Garth

I was not referring to the video, that is merely entertainment, sorry for the confusion. If you really want to know how the banking system works. Let’s get it from the horse’s mouth.

http://www.scribd.com/doc/9684794/Standing-Committee-on-Banking-and-Commerce-May-9-1939-MINUTES-CANADA-pg-461-500

A seventy year old transcript. You are more irrelevant than I thought. — Garth

#113 Devore on 09.25.10 at 12:28 pm

Shift wealth from real assets to financial ones. Invest in things that pay you income to own them – not a potential profit, but actual cash flow. Aggressively and legally avoid tax. (More on that soon.)

Garth, I am hearing a lot of trusts converting to corporations before the end of 2010. Broadly, what are the future tax implications to people holding units?

#114 LS on 09.25.10 at 12:35 pm

Government and corporate bonds, strip bonds, preferreds, income trusts, REITs, PP notes, index-linked assets — there are many places to secure income with relatively little risk. You should learn these things. — Garth

The question is not whether I know about these things or even that low risk investments exist. The question is whether a generation of risk adverse, everything in the house, type investors will suddenly plunge into the investment world after having their rrsps decimated in 2008. Real risk might be low, but all that matters is the perception. Will be interesting to watch.

People do surprising things when they have insufficient income. — Garth

#115 Sandra on 09.25.10 at 12:36 pm

Garth,

Any possibility that you’ll be speaking in Ottawa?

#116 S.B. on 09.25.10 at 12:38 pm

Insidious realtor marketing 101:

How to polish dung:

Apartment -> Condo -> Private Residences

House -> Home -> Exclusive Community

It’s just a place in which to live.

:evil:

#117 Devore on 09.25.10 at 12:42 pm

#2 blase

How can America get going again when they are running trillions in deficits and state and local governments have to cut jobs to pay the bills? Where will the economic recovery come from, since you don’t say anything about that in your post.

Indeed, recovery will come, as it always has. It will be slow, and most people will not see it until it’s in full swing. It’s impossible to predict who will lead the way out, just as certain as it is to say there is no recovery today, because no one can identify the leader, the sector that is growing first.

Eventually, there will also be a new technology to lead a new period of rapid growth, and will probably come out of US, which is still a strong science, research and technology powerhouse.

Probably something in genetics, nanotechnology or alternative power, but even in such general terms no one can say for sure. The company that will do it probably does not exist yet, which is why it is important for government to step away and stop mandating. regulating and subsidizing new industries and technologies, stifling competition.

But it will come, and only those quick to see the trends will benefit the most.

#118 TheBigLebowski on 09.25.10 at 12:44 pm

#39 Burnaby Boy, historically gold and the dow revert to close to a 1 to 1 ratio. So if the dow is trading at 10,000, gold will go up to near 10,000. If the dow drops to 6500, gold will meet it close to that level. I am looking for north of 3,000/ounce and will post on here if allowed when I think its time to sell, if ever. We might just level out at a new higher norm as gold is reworked into a new monitary system 5,000/ounce.
#67 John , if you don’t have a position buy in now, and then every couple of weeks if possible make another contribution. We have only finished the first phase of a 4 phase bull market so its early times still. But the real money will be made in the gold mining shares, they will outperform bullion by 5-10x. Here is a good fund to hold and add to
http://www.theglobeandmail.com/globe-investor/funds-and-etfs/funds/summary/?id=18215
#97 Taxpayer like everyone else, first, the BIS and the World Gold Council are both giant gold suppression organizations, their data is bogus and designed to keep a lid on prices. The gold council still equates gold demand to jewlry demand not admitting India buys investment gold in the form of 24k jewlry. Don’t voercomplicate the trend, just go long and stay long.
#88 Shut Up Lebowski-IF you’re from Calgary, and I think you are, I know exactly who you are….

If you are that 300lb black woman that I rent a suit from then ya, thats me, and by the way, wanna go out for dinner and a movie? My treat.

#119 Basil Fawlty on 09.25.10 at 1:02 pm

An individual named Christopher Whalen is interviewed on the KingworldNews site this week in regards to the US banking system. He was saying that 20% of US homes are expected to be foreclosed on and that only 1/4 of those have been so far. He indicated that the remaining foreclosures total in the the trillions, but the total equity of US banks is under a trillion. So, what does this mean, bank nationalisation? QE to infinity? Bank bankruptcies?
Like Garth says, “this will not end well”.
In regards to gold being in a bubble, we have still not seen the around the block lineups and the gold fundamentals could not be stronger, especially given the largest bubble in world history, which is the US treasury market.

#120 dark sad person on 09.25.10 at 1:02 pm

#112 goldenfox on 09.25.10 at 12:20 pm

Leave the mark out of it. If the hotel sold for many gold coins previously and then it sold for only one coin, then that means the price of real estate fell precipitously.

***********************
Leave the Mark out of it?
We were discussing Hyper-inflation/Wiemar–
What do you suppose Hyper-inflated?
Gold?

Yes–lets disagree–

#121 shane on 09.25.10 at 1:04 pm

Garth, new home builder had and open house today on Markham rd and 16th ave the place was packed with people they where parking on the street whats up with that???? are they the greater fools???

Mikey

#122 Patz on 09.25.10 at 1:05 pm

#16 dirtyoilbanndit says:
“There is a very simple point that 99.9% of people are missing.
People picture a long slide down hubbert’s peak. You are in for a nasty suprise.”

Great to hear at least one other voice who gets the importance of oil to the economic equation. Unfortunately probably fewer than .1% of people even get that there will be any drop slow or otherwise in the trip down from Hubbert’s. All they know is: pull up to the pump; how much is it today?

Most of the middle class is one paycheck away from disaster and the world is one crisis away.

#123 Basil Fawlty on 09.25.10 at 1:10 pm

Here is something I would pay money to see. A debate between Garth Turner and Eric Sprott. Two smart individuals with widely different investment/economic philosophies.

#124 Jeff Smith on 09.25.10 at 1:11 pm

>#23 False Facade on 09.25.10 at 12:01 am
>Hey Garth, you rock!
>Financial assets are the only way to go. People say we
>don’t make anything here in North America. But we do!
>We print money, we make inflation and export it to
>other countries. Inflation is coming and it will help the
>financial instruments! Buy on dips!
>I so agree with you!

I also agree with you on this FF, people keep forgetting that making something does not mean it has to be something tangible. In fact North America manufacture something called Intellectual Properties and even though it has no tangible material feel to it, it still creates wealth. What do you think companies like Microsoft, Google or Oracle or Intel make. That’s right intangible intellectual properties which creates tremendous wealth for North America. Creating something out of people mind and then exporting it for an income is non-polluting, and quite profitable. I agree that America isn’t going the way of the Roman Empire anytime soon.

#125 Timing is Everything on 09.25.10 at 1:14 pm

“You’re a speculator, not an investor.” — Garth

“The only lesson there is to get better advice. Your ‘friend’ obviously did not have a balanced portfolio.” — Garth
——————————————————————
Especially bad if your friend has no ‘marketable’ skills…

Roll them bones. We are all a firiggin’ gamblers (Investors,speculators,poker players, wheel spinners, RE owners) at the end of the day. Just pick the right time to roll ’em i.e. when you think the odds are more in your favour. Simple, but not easy.

Investment = Gamble = Speculation

Only the odds change, and even that is subjective.

#126 squidly77 on 09.25.10 at 1:18 pm

Calgary condo sales now down 46% YOY.

Prices hanging in there….for now

#127 Calgary Rip Off on 09.25.10 at 1:19 pm

http://www.calgaryherald.com/business/real-estate/Incentives+being+offered+lure+condo+buyers/3576925/story.html

This just in from the Calgary Herald. Perhaps sellers in Calgary should realize that their market values are inflated and not real.

Take $150K-$200K off the property price. Otherwise, assume that buyers will come to look at your place, say its nice, then leave. Most people simply cannot afford what houses and condos are valued at today.

It is mind numbing how the market values of Calgary has created a mass moron mindset so prevalent in the actions of self entitled fools.

Have these owners created substantial value to their homes? Some have, and they should be rewarded, but the majority have not, and have homes that are around 10 years old, for sale on the market for double what they paid. But hey, that’s real estate, right?

And for all the people investing in Gold, there is another metal out there that is worth more. It is called PLATINUM. Unless you are going to go buy some milk with gold coins as a medium of trade, buying gold and expecting it to not fluctuate in value is about as stable as becoming a poker professional and expecting to earn your living off it. The odds are against you.

#128 Devore on 09.25.10 at 1:21 pm

#76 dd

True. But the fed just changed its inflation policy (last week). It wants to run with inflation – create it. It is the only way to manage its debt outside of actually living within budget. If they can run inflation at 4%, in 20 years the debt can be 1/2.

Impossible. No one will get our of their debts with inflation.

Most of US debt is short term. The average roll-over period is now under 5 years? I dunno, lost track. It’s been getting shorter for a decade. This means if inflation goes up, so will rates at which US will be able to renew their debt. This scheme will only ensure higher servicing costs, and will wipe away the middle class, not debt.

The FED is between a rock and a hard place. On the one hand they are scared of inflation, because that will make debt servicing costs skyrocket. On the other hand, they are terrified of deflation, because that will break the fiat debt money system even faster than rising rates.

They must keep rates low, and keep the money supply expanding surreptitiously. Today, the new money is going through primary dealers into bonds, equities, commodities and gold, and through Washington into bigger government, war financing and more social spending (medicate and social security, which are now cash flow negative and no longer cash cows).

As a result of the monetary inflation of the last few years we’re seeing inexplicably rising prices of staples, energy, commodities, and services and service-based products. Higher input costs simply must equal higher final prices. At the same time prices of highly levered assets, such as houses, are falling, because credit is available only to big financial and corporate players, everyone else must delever.

This squeezes people from both ends: higher prices, lower equity and net worth. Biflation. There’s no deflation here, and uneven inflation in all the wrong places.

#129 eddy on 09.25.10 at 1:31 pm

“106 T.O. Bubble Boy

BUY NOW BEFORE INTEREST RATE INCREASES!!!”

The article from the Calgary Herald is CLASSIC propaganda. The Globe says the opposite.
Perhaps the Globe is ‘controlled opposition’ helping to crash a market already falling off a cliff?

“The best way to control the opposition is to lead it ourselves.”
– Vladimir Ilyich Lenin

First, I stopped buying the Globe, then last week I deleted their bookmark from my browser. Can you believe it? I’m rejecting free brainwashing. If anyone still has any faith in MSM, watch the video ‘September clues’

http://video.google.com/videoplay?docid=8045542387672451515#

All controlled media is engaged in a war on You. And all are accessory to 911 treason.

#130 IceBerg on 09.25.10 at 1:34 pm

Marketwatch did a photo shoot of the 10 most costliest housing markets in the USA … Not certain if these were representative examples, but it does challenge one when these are compared to Vancouver Shacks.

http://www.marketwatch.com/story/the-10-costliest-us-housing-markets-in-pictures-2010-09-22?pagenumber=1

#131 BrianT on 09.25.10 at 1:39 pm

Karl Denninger is on fire today-he has some choice comments on America’s kindly grandfather grifter, Warren Buffett (along with other comments) http://market-ticker.org/

#132 Timing is Everything on 09.25.10 at 1:40 pm

#115 LS said – …”but all that matters is the perception.”

Garth said – “People do surprising things when they have insufficient income.”

I disagree. People do quite predictable things when they have insufficient income. Perhaps you meant surprisingly predictable things.

You know, like a change of life-style, lowered expectations, no trip to Europe
this year, buy cheaper cuts of meat, sell the Corvette, cutting out coupons, turn the furnace down and put on a sweater, down-size….blah, blah

#133 squidly77 on 09.25.10 at 1:40 pm

To all the goldbugs out there

At what price would you sell your GLD at?
$1,300
$1,400
$2,000
$4,000

What currency would you sell it in?
CDN
USD
GBP
EUR
CHF or CNY?

I’d bet you say CNY – Because your cheering for the commies to win, that’s called being a turncoat, a traitor or a hater of our way of life – Your betting against America.

I’ll tell you something right now, before America goes down it’ll fire off every missile, bullet, bomb or whatever ammunition it has – It’ll set the world on fire – The world will go, before America goes.

But before that happens this will happen. http://www.the-privateer.com/1933-gold-confiscation.html

That’s right folks they’ll steal it from you and rightly so.

I want, No I insist that my children grow up in a civilized world – No Chinese, Iranian, Indian or any other nation will occupy and control America.

I for one don’t believe any standing army in the world could even get through NYC, but if they did, they would then meet the rest of us.

America has been hijacked by self serving politicians and greedy corporations hungry for power.

The American people will sort them out in due time.

Now is not the time to give up on our friends, our very best friends.

One more point, a wounded animal fights to the death, America is wounded and if it turns nasty, pity there foes.

#134 Rolled Gold on 09.25.10 at 1:47 pm

Not saying gold is cheap or expensive…but I will say it is not in a classic bubble.

Compare gold to the Nasdaq bubble in this chart: http://www.planbeconomics.com/2010/09/07/chart-what-gold-bubble/

Based on this, gold would need to rise to $3,100/oz to match.

#135 Great White Mudshark on 09.25.10 at 1:52 pm

One thing that seems to be missing from the “don’t bet against America debate” is the fact that America is still a great entrepreneurial nation. It attracts the best & brightest from around the world. The line up to emigrate to China is not quite so long.

Entrepreneurs create wealth and game changing ideas or products. America is in a mess now but are the economies of India or China without their challenges also? Foreseeable trends such as the long term rise of energy prices will cause much of the offshore manufacturing to transition back to local.

What about an America that within 100 years has a population larger that China?

http://www.theglobeandmail.com/news/opinions/more-americans-than-chinese-a-lot-can-happen-in-100-years/article1703279/

Just some food for thought.

#136 grumpy on 09.25.10 at 2:40 pm

I agree with the comment that stated ‘there wil be no bubble until the public gets involved’….as it is this is true. The rise in gold has been governments and institutions buying…the public has not been a particapant up tilll now. The gold stocks are just barely starting to move….but the move has been signifigant.

There was a gold coin scandle in the US lead by by Glen Beck but no action outside professional buying. It will be when individual gold stocks are household names ( Bre-X , Homestake and such) that there will be a mania. I have been in since the very early 2000’s and have seen a steady rise in each of the ten years……I am an investor…not a speculator….I just happen to believe that the debasement of the paper currency will lead to a rise in the value of hard and soft assets. This theory has proved itself with corresponding rises in those asset classes far superior to dividends. I admit that not everyone is cut out or designed to live with the type of volitility that comes with the sector.

In ten years one of the Chartered Bank Precious Metals mutual funds has gone from a unit price of $6 per unit to over $69 today…the ‘advisor’ told me I was crazy to risk so much….she was pushing their Science and Technology Fund. Who’s crazy now? Recently I called the call center for an adjustment and was asked by the ‘advisor’ to change my mix because of the ‘risk’ they also recommended bond funds. OK….nuff said. There is no bubble…only a reflection of the inflation that the government would rather not publicly recognize.

#137 T.O. Bubble Boy on 09.25.10 at 2:48 pm

@ #108 BrianT:

So, 1 year of Berkshire is +22%, 3-years is near 0%, and 5-years is +51%… all far better than the TSX (excluding exchange rates), which is up 12% over 5 years.

#138 T.O. Bubble Boy on 09.25.10 at 2:52 pm

YatterMatters.com started the 7-day breakdown of September Vancouver stats…

http://www.yattermatters.com/2010/09/community-series-coquitlam/#more-21290

Coquitilam over the last 30 days (39 sales) was even slower than the previous 30 days (64 sales).

39 sales /585 listings = 15 months of inventory!!!

#139 Bill ( Peterborough) on 09.25.10 at 3:01 pm

Re #88 Shut up Lebowski

Hey BigLebowski,

IF you’re from Calgary, and I think you are, I know exactly who you are. You make me throw up in my mouth a little bit every time I have to hear you talk like you actually know anything about anything. The first sign of intelligence is a lack of certainty and an overwhelming curiosity to know more and more (since you’d be aware how very little you actually do know). So please, go find a gold blog to wet your panties and stay out of my reading material once and for all.

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

I personally find TheBigLebowski blogs very informative, not striking me as a know it all person.

He is a very well read person. And bang on with the majority of his blogs.

You on the other hand, with your jargon, seem so far like quite the ASS.

As far as staying out of “YOUR READING MATERIAL”, truly shows your mental intellect.( that of a cabbage )

After you get both feet out of your mouth perhaps you can try to contribute to this blog, which I highly doubt from your comments.

#140 Malcolm W on 09.25.10 at 4:07 pm

“our dollar will probably soar in value next year as commodity prices rise”
With the US, Euroland, Japan and even China (whose economy depends on exporting to these countries) going into a major austerity driven economic slow down, why would you think our commodity prices will rise when the demand will drop. Just monitor the price of oil which drops every time some bad economic news comes out of the US and goes back up with good news.
As David Rosenbugh (probably the smartest economist out there) says, there won’t be a double dip, we never came out of the first depression.
Canada’s resouce based economy, with it’s high individual’s debt loads is not going to fare as well next time round as it did this time, as all Harper did was “kick the can down the road” by stimulating housing to absurd levels.
Can we PLEASE get a government that understands economic fundamentals and plans long term, not just to the next election.

#141 Burnaby Boy on 09.25.10 at 4:13 pm

Thanks bigboy #119

#142 NZ on 09.25.10 at 4:26 pm

We are entering the …
“Greatest Depression of all TIme”….an utter collapse will wash over the great unwashed masses. Few will survive with capital intact. Can anyone disprove the fact of economic cycles?…every 60 to 70 years the world has experienced a depression. We are in one now….

Ultimately you either believe or disbelieve….because most folks are naive they do not understand the cyclical nature of how the world works. Nothing follows a straight line…2008 crash was predictable….and the next leg down is as well…time is very, very short…Prepare or Perish…

The world’s debt levels are totally uncorked from reality. You and your children’s children have spent the resources from the future to live today. Most will become peasants, indentured slaves, “citizens”, when the utter financial collapse destroys all vestiges of security. We as a society have reached a point of no return….YOUR DECADENCE HAS LED TO UR DESTRUCTION…

,,gather up ur friends and family…because this ponzi scheme is coming to end shortly..only the strong will survive!!!!!!!!!!!!!!!!

Oh great. Nutjob reinforcements. — Garth

#143 Basil Fawlty on 09.25.10 at 4:27 pm

A cartoon.

http://jsmineset.com/wp-content/uploads/2010/09/clip_image00215.jpg

#144 Waiting and waiting on 09.25.10 at 4:35 pm

Some people seem to be confused about why things are the way they are.
For those unaware, let me clarify.

A politician’s first goal is to be elected. Second is to be re-elected. They will help you and their district as long as it helps their first two goals. Some actually put you and the country before themselves. They don’t get elected/re-elected.

A salesman’s job is to sell. Not sell what is good for you, but sell as much as possible. Some actually try to sell you only what is good for you. They get fired.

#145 Basil Fawlty on 09.25.10 at 4:42 pm

John Embry, the chief metals strategist for Sprott Asset Management was interviewed today on Financialsense.com. He said: ” the recent run-up in gold prices is only the hors d’oeuvre”.
They print, we buy!

#146 freedom_2008 on 09.25.10 at 4:49 pm

From 109 Sam “A relative was telling me that a friend of theirs was trying to talk them into buying several properties for rental income, and moving into one every couple of years and selling it for capital gains. ”

Note that if there is capital gain, you must pay tax on the gain for all the years which were rented out even if you live there yourself now.

#147 dark sad person on 09.25.10 at 4:52 pm

134 squidly77 on 09.25.10 at 1:40 pm

To all the goldbugs out there

I’d bet you say CNY – Because your cheering for the commies to win, that’s called being a turncoat, a traitor or a hater of our way of life – Your betting against America.

I’ll tell you something right now, before America goes down it’ll fire off every missile, bullet, bomb or whatever ammunition it has – It’ll set the world on fire – The world will go, before America goes.

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

Typical drivel from you–
You don’t have the economic smarts to meet the goldbugs head on-cuz-
you know they’ll kick your ass in front of the whole board-so-
You resort to name calling and nasty
(littleman syndrome) innuendos–

btw-i also hold a whack of USD (:

#148 Brian1 on 09.25.10 at 5:32 pm

I feel that I am in a golden insane asylum. I am zig zagging through a Midas mine field. How long can this go on?
As an aside I return to one of my earlier suggestions for government to adopt and that is they should pass laws to hire 2 babyboomers for evry 5 hirings, but one should be a minority and the other should be a white non-nepotistic straight male. This would be fair.

#149 Mike in Victoria on 09.25.10 at 5:36 pm

Garth, I’m not sure if it will be you or John Nadler who will be the the proverbial shoe-shine boy marking gold’s top when you finally get buggy.

Maybe you can explain why debasement will not occur, when there has never been a fiat currency that was resistant to it.

Thanks

You have lived your whole live so far in dollars. You will die the same way. And who’s John Nadler? — Garth

#150 junius on 09.25.10 at 5:53 pm

Am I the only one that here that doesn’t understand the persistance of the goldbugs? They have taken over from the RE pumpers as the most irritating people on this site.

#151 Holy Moley on 09.25.10 at 6:25 pm

Am I the only one that here that doesn’t understand the persistance of the goldbugs? They have taken over from the RE pumpers as the most irritating people on this site.

—————–

What is to understand? They bought gold and now they have to pump it up…

Rather buy some beatup blue chip that is not so closely based on a commodity….

#152 The Original Dave on 09.25.10 at 6:40 pm

hey all, the great George Soros once said “ride the wrong trend and get off before sentiment changes”. Basically, it’s okay to buy something that is over valued. Emotions drive bull markets much higher than true values.

Look at the housing bubble. House prices have gone up for years and they’ve been overpriced for years. That’s manic buying.

For those that are suggesting that gold is in a bubble, that doesn’t mean that a reversal is coming soon. Bull markets can tediously long.

#153 S.B. on 09.25.10 at 6:56 pm

The gold bugs/nuts are running out of control on this forum. Such benevolence chaps in not keeping this investment-of-a-lifetime all to yourselves. Or are you simply looking for a sucker onto whom to unload your gold – a “greater fool”, to coin a phrase ;)

#154 JRH on 09.25.10 at 7:06 pm

Ohhhhhhhhhhh Testy

#155 bridgepigeon on 09.25.10 at 7:14 pm

Junius,
I’m with ya. I can hear the ice clinking in Garth’s highball glass from here…

#156 jess on 09.25.10 at 7:24 pm

mad max is for everyone outside the gates

masdar sustainable desert city
http://www.nytimes.com/slideshow/2010/09/25/arts/design/26masdar-ss.html

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

…“This is not primarily a problem of shady fly-by-nights or unsophisticated mom-and-pop small businesses. Major multinational corporations, and sometimes significant segments of entire industries, use misclassification as a business model to cut corners, gain a competitive edge, and maximize profits,” Burger said. “It’s only reasonable that employers should be required to properly classify workers and keep records.”

The U.S. Department of Labor has conservatively estimated that 10-30% of the nation’s businesses misclassify at least some of their workers. Misclassifying employees as independent contractors – or just paying workers off the books altogether – has exploded in recent years, necessitating comprehensive action. Rep. Jim McDermott (D-WA) and Sen. John Kerry (D-MA) have introduced legislation to close the tax loopholes that let businesses off the hook for misclassification. The Obama Administration has proposed a new initiative in the Dept. of Labor to step up enforcement of the law and help states go after violators. And Rep. Jerry Nadler (D-NY) will soon be proposing a measure to address the widespread misclassification of port truck drivers.

“Today, we open up another front in the fight against this abuse of the law. This bill is long overdue and we are delighted Senator Brown and Congresswoman Woolsey are standing up to fight for the rights of workers,” concluded Burger.
========

#157 Bill Gable on 09.25.10 at 7:26 pm

Let’s drop the Gold line guys and get back to RE, please?

#158 T.O. Bubble Boy on 09.25.10 at 7:31 pm

Flaherty is having himself an amazing week:

First, he had the ridiculous speech for the Canadian Club, claiming that the other parties would destory 400,000 jobs and would act like pirates in taking control of Canada’s economic ship

Then, he endorses his tweedle-dum partner Rob Ford for mayor

And finally, he announces $40 Million for an Innovation Program, which is about 0.1% of what he gave to the banks and auto companies, and about 1% of what the Conservatives spent on the home reno tax credit!

#159 Off the Leash on 09.25.10 at 7:39 pm

Gold Bugs are not wrong as they may well prove their earnings better than many, possibly most. But they too might find they as well are riding a wave of irrational exuberance and if they do not get off in time they too might be slaughtered.

To each their own. I do know that many will envy those they ridicule as what goes around comes around, always has, always will.

#160 squidly77 on 09.25.10 at 7:41 pm

For those that are suggesting that gold is in a bubble, that doesn’t mean that a reversal is coming soon. Bull markets can tediously long.

yeah, but you guys are in love with the stuff, at what price point would you sell? Answer..there isnt one cause you think that the end of the world is coming.

You goldbugs sound just like realtors, way way to emotional.

A fool and his money are soon parted.

#161 Cristian on 09.25.10 at 7:54 pm

In the 1970s New York City was going bankrupt. Don’t bet against America. — Garth

I don’t think it is appropriate to compare America of the 70s with the current day America.
Back in the 70s America was still manufacturing and exporting, they had a solid middle class and their fiscal balance was a lot more solid than it is now.
Back in the 70s China and India and Brasil were not even on the map (economically speaking), not to mention the other Asian countries.
The situation has changed a lot since the 70s. Maybe America will not decline massively in the next 5 or 10 years. But history proves that all empires have a beginning and an end, and that new empires take the place of the declinining ones. Spain in the 1600s, France after that, England in the 1800s, America in the 1900s… history moves forward and looking back, hoping that history is going to repeat itself is useless. And not economically sound. Not betting against America is a cliche of times past. America is and will be a “has been”…

Don’t bet on it. — Garth

#162 LongviewLonghorn on 09.25.10 at 8:00 pm

Oh great. Nutjob reinforcements. — Garth

Apparently Garth forgets that without “nutjobs,” his readership would hover right around zero. Anyone that concurs with his assessment of real estate is considered a nutjob by the mainstream. It’s a little rich for anyone on this blog to call anyone else a nutjob or tinfoil hatter.

Are you speaking for the mainstream, or the nutjobs? You have me so confused. — Garth

#163 VancouverGoinUP on 09.25.10 at 8:22 pm

“The gold bubble is a giant bet against America, and will end badly. -”-Garth
When?!?!! Not for years. America is finished. If America was a stock you would short the hell out of it. America is never coming back to the way it used to be in our lifetimes. Gold is poised for abit of a pullback here but the longterm trend is intact with Uncle Sam on serious life support. Financials is NOT where you want to be, Gold and currently Rare Earths are the place to be. Was driving though Vancouver and Richmond today. It is unbelievable the amount of homes being sold, bulldozed and a monster home built. Don’t take my word for it, come down and loof for yourself. Come to Steveston a part of Richmond. 40 year old home sells for 750k, the new owner bulldozes it and rebuilds 3500 to 4000 sq feet. Total cost around 1.3 million. BUT and here’s the big BUT bought with cash. Vancouverites don’t need mortgage as Cash is King for the Non locals here!
A couple more notes, Gold is money,Gold is real just like Vancouver.

#164 AU AG - JCILOA1 on 09.25.10 at 8:27 pm

TO #134 squidly77 and anyone else who is asking

“At what price would you sell your GLD at?” (or gold)

Gold (and silver) is a store of value . At the current price it is still extremely UNDERVALUED.

A general rule of thumb of when to sell :

approx. 100 oz of gold (or around 1700 oz of silver) can buy an average house in a downtown area in most major cities e.g. tor ny van la london sydney etc.

This was historic VALUE of gold and silver last time it peaked IN 1980’S.

Thus, one should sell tomorrow if gold went to around $7000.00 and silver $400-$500 (canadian dollars)

Comments anyone???

#165 Love this Blog on 09.25.10 at 8:29 pm

WOW! Bullion Bunny is begging to be tossed off the site.
Dude/dudette, if you are BEGGING to be thrown off….?? Why not just stop posting? And I agree with Junius…………….the gold pluggers are getting a bit tiresome. Guys, if you like gold, fill your boots. You have no obligation to convince the rest of us. This is, after all, a site geared more toward real estate.

BB, I’d suggest if Garth’s opinions are getting under your skin…………just move on. Works for me.

#166 Hovering on 09.25.10 at 8:32 pm

hey garth

obvious new book topic

The descent of MSM

you seem well placed to write it

(i look forward to my 20%)

(ok 10)

#167 Love this Blog on 09.25.10 at 8:38 pm

” Anyone that concurs with his assessment of real estate is considered a nutjob by the mainstream.”

And there’s the key. Mainstream. Dude, right after Garth’s appearance in S’toon, the next morning, at 6 am, there was press releases, rebutting him, telling us all how great RE was doing, and to buy in. I sent 3 comments in disputing this, and NONE was printed on the site. See, I’m just a “reader” I don’t pay the bills. ADVERTISERS pay the bills. 34% of that comes from RE. They will NOT bite the hand that feeds them. My experience was proof of that. Wake up. What you read, what you hear?? Bought and paid for. Except this bog, and others. TG for the INET.

#168 Old_is_Gold on 09.25.10 at 8:50 pm

Gold is not money. — Garth

I would bet that in any major city worldwide exchanging a gold coin into local currency would be as easy as exchanging dollars or pounds or euros.

I read somewhere that US dollars are not being accepted in some European countries because of counterfeiting problems. Can’t counterfeit gold, can you?

Money is anything people are willing to accept in payment and as such gold would fit the bill! In today’s world it must needs be converted to other forms before use but I doubt that that would be a problem anywhere in the world.

When I can fill my car with a gold coin, I will believe you. — Garth

#169 april on 09.25.10 at 9:05 pm

Junius#160 @ Bill Gable #169

I’m with you folks re the goldbugs. It’s getting tiresome.

#170 dark sad person on 09.25.10 at 9:09 pm

160 junius on 09.25.10 at 5:53 pm

Am I the only one that here that doesn’t understand the persistance of the goldbugs? They have taken over from the RE pumpers as the most irritating people on this site.

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

Would you care to go “deep” into “any” Economic subject-other then Gold with these irritating Goldbugs on this site?

Didn’t think so–

#171 Old_is_Gold on 09.25.10 at 9:10 pm

As for the USA, take positions now for the road back. — Garth

If the US leadership is truly capable of bringing the country back, they would have never allowed it to get so far off the track in the first place. Ask yourself how they got where they are, was it a simple economic cycle that brought them here? And were their Ivy League experts from Wall Street really so clueless that they didn’t see it coming?

Right till 2007 all the talking heads were patting themselves on the back of ‘how the fundamentals of the US economy are strong’, that ‘there is no sub prime crisis’, the list goes on and on and on and on….

If this is a normal business cycle problem the US will be back but if it is not, then a bunker with a well stocked pantry may not be a bad idea!

#172 alrightythen on 09.25.10 at 9:12 pm

““Nobody has ever made any money betting against America.” ~ Warren Buffett

YA. He is selling the dollar short big time.”

If the fed announces that they are going to engage in quantitative easing to induce inflation, increase exports and reduce the national debt, it would make sense to short the dollar, as its value relative to some other currencies would most likely fall in the near term.

It is not a bet against america any more than it would be a bet against america to go long the loonie if it fell to 60 cents.

Buffett has traded other currencies before. He then used some of those profits to buy an entire U.S. railroad, an all in bet on the future of the American economy.

It is not a crime to do research and think critically- in this country anyway. It would have saved a lot of people a lot of money. It could have prevented this bubble from forming.

#173 alrightythen on 09.25.10 at 9:14 pm

“If the US leadership is truly capable of bringing the country back, they would have never allowed it to get so far off the track in the first place.”

I suppose if you ignore The Great Depression, you could feel comfortable making that statement.

#174 Old_is_Gold on 09.25.10 at 9:18 pm

#129 eddy on 09.25.10 at 1:31 pm

Good post

Stalin said – ‘It matters not who casts the votes, what matters is who counts the votes’. Like the MSM, the LEFT / RIGHT paradigm in politics is also a smokescreen. George McGovern said that there ain’t a dime’s worth of difference between the Republicans and Democrats. Poor guy had to take a bullet for being too honest.

Those who think Harper is the problem and Ignatieff the solution see neither the problem nor the solution.

#175 Chrystal Tost on 09.25.10 at 9:23 pm

COMMENT REMOVED. Crystal Tost, of Calgary, reports this was posted under her name without her authorization. — Garth

#176 SpaceMonkey on 09.25.10 at 9:23 pm

@129 Eddy,

I’m skeptical about a lot of the things that happened on 9/11, but that video that you posted a link to is horrible.

It’s videos like that which discredit anyone who raises questions about 9/11 and earns everyone who thinks critically about the events names like tin hat wearers.

To the people that think everyone who has questions about 9/11 is nuts, there are much better reasons to be skeptical than that ridiculous video which Eddy posted a link to.

#177 dark sad person on 09.25.10 at 9:43 pm

180 Old_is_Gold on 09.25.10 at 9:10 pm

As for the USA, take positions now for the road back. — Garth

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

O_I_G

You’re onto it-

The US has a Keynesian educated Fed chairman and the GOP–who believes-
“Grey faced old men”-with the power to print and tax-can bypass true market forces and maintain an always Inflation driven Economy–

Well guess what?
The mighty US Fed–has been kicked in the balls-by the delusional peasants-that account for 70% of GDP-
You see-Ben is standing in front of Sentiment–
It’s simply shifted–
The pool of greater Fools dried up-
Inflation turned South
Check Mate–

The Market and Gold-are both on the prowl-always dangerous-with their Ferrel like instincts-sniffing out true Value-true Prices and the true worth of Labor-

They will destroy whatever needs to be destroyed-in order to bring sound fiscal policies-to the people-but first-the people must be taught-to welcome “both” into their lives and from there-Society will move forward in a responsible and sensible manner-
But-the lessons are painful-
Gold and Mr Market are very stern teachers-

http://www.youtube.com/watch?v=ZgMEPk6fvpg

#178 Blair on 09.25.10 at 9:46 pm

I still am trying to understand Garth why you always feel that you need to “toot” your own horn Garth. Please try the “confidence before arrogance” approach!!

Toot this. — Garth

#179 Old_is_Gold on 09.25.10 at 10:05 pm

#188 alrightythen on 09.25.10 at 9:14 pm

“If the US leadership is truly capable of bringing the country back, they would have never allowed it to get so far off the track in the first place.”

I suppose if you ignore The Great Depression, you could feel comfortable making that statement.

++++++++++++++++++++++++++++++++++++++
I don’t see what your point is?

#180 dark sad person on 09.25.10 at 10:08 pm

For those who say Gold is not a Currency-

One question–

Why does it “act” like one?

All you need to do-is disprove these charts-

http://3.bp.blogspot.com/_nSTO-vZpSgc/Rdh85QBPcwI/AAAAAAAAAXg/f26Q-D_UcAc/s1600-h/US%24Index-vs-Gold-1970-2007.png

http://4.bp.blogspot.com/_nSTO-vZpSgc/RdpQl2IYHnI/AAAAAAAAAX0/Sqh0qKI9zRw/s1600-h/GoldVsUS%241.png

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

Keep in mind-on the last chart–
It took 20+% interest rates and thousands of tons of Gold “dumped” onto the open market
(including “all” of Canada’s 700 Metric tons)
In order to return “faith” back into the USD–which finally brought Gold back into line and stopped the run on the USD–

#181 Nostradamus Le Mad Vlad on 09.25.10 at 10:14 pm


I’m too tired to be bothered to post anything useless, so instead here is a 2:50 clip on our elected leaders.

The commentary is in French. See if you can distinguish the politicos from reality!

Naughty Looniebins

Le End (until tomorrow)

P.S. — Don’t forget Sept. 11, 1991 / Sept. 11, 2001 / Sept. 11, 2011. Goes back to my #26 post.

#182 squidly77 on 09.25.10 at 10:24 pm

GLD is an ETF. Not physical gold.

#183 BrianT on 09.25.10 at 10:26 pm

Big Shock (or nutjob conspiracy theory) -Wall Street runs on fraud http://www.huffingtonpost.com/2010/09/25/wall-street-subprime-crisis_n_739294.html

#184 Cameroni on 09.25.10 at 10:31 pm

A worry of mine lately is that the current low yielding bonds and Treasuries are setting buyers up for more than a little heartbreak. Anything long term is risky and anything locked-in is investment suicide in my books.

If you had purchased treasuries for example (In US$) and locked in a mere year ago you have already lost in the range of 10% buying power considering US dollar declines.

The interest paid did not make the purchase worthwhile. With significantly more weakness expected in the dollar you will need to feel certain of a turnaround before buying in today’s current rate environment.

Canadians have benefited from the exchange difference lately (although it is a real puzzle as to why the Loonie is stuck in it’s current range despite some steep declines in the Greenback,…I will let the conspiracy crowd answer to that)

Currency is a big deal though. Those buying bonds denominated in Canadian Dollars may have done a bit better lately depending on when they bought. If commodities do take off (eventually) as expected you could stand to gain a boost on the exchange trade too as the Loon rises in which case the interest paid is gravy. Depends on where and what you bought and in which currency of course.

It baffles me why so much money has shifted to bonds and treasuries lately. This is an investment class that is just a drain on savings as currency devaluations take center field in what I consider to be a high risk environment. What is safe about bonds when a global currency race to the bottom is siphoning away real wealth? Is it really all about losing money “slower than everyone else” now.

In the old days we only worried that simple inflation and rising prices were eating our wealth (and it was). Now we worry that currency devaluation in a period of deflation (?) will destroy buying power, savings and investments while we look to minuscule interest rate returns to keep our heads above water.

(And PS: To the people who already want to argue with me that currency devaluation equals inflation which it does not exactly, I want you to consider that a 10% devaluation of US dollars did not resurface as a cooresponding inflation in the wider economy. If it did of course we might already be seeing home prices and wages rising in the US. But they are not. Asset declines and deflation continue on that front. Instead it has shown it’s ugly head in the form of a steep rise in Gold prices, precious metals and some soft commodities).

#185 PR on 09.25.10 at 10:42 pm

#163 The Original Dave

hey all, the great George Soros…

Please be advise George Soros IS a CONVICTED CRIMINAL. On record, its public, nothing great about that.

#186 VancouverGoinUP on 09.25.10 at 10:42 pm

You can find out where America is going from this website

http://www.fdic.gov/bank/individual/failed/banklist.html

#187 Mark on 09.25.10 at 10:46 pm

Does anyone know if it’s free to attend a Garth Turner show or does he get you to sign up and then charge you at the door? Turner staff haven’t answered my question. Can someone else?

It’s free, but if your spouse is hot we might keep her. — Garth

#188 Randman on 09.25.10 at 10:50 pm

I suggest people take Bullion Bunny and Lebowski’s
comments on precious metals ,credit and fractional reserved banking…..very seriously

DYODD and research…I did over 7 years ago and
prospered from what I have learned

Gold has risen against ALL curriencies in the world
for the past 10 years

This stat alone should make you all stand and take notice!

The advice given here is for your own good….
disregard it at your own peril!

#189 Bigboy on 09.25.10 at 10:51 pm

Ok, I’m done. Bullin bunny and all of the other wacko commentors and tin foil hat people. From now on I will read Garths blog and skip the comments. In the end I read this blog for his take on the current state of the economic climate, I can do without the tinfoil segment and the blog dogs who use this site to write their PHD disertations. BTW, thanks Garth for your advise, I am retiring in a couple of months and your blog has helped me get my ducks in a row and get ready to enjoy the next phase of my life. Thanks, I will keep reading your blog, just not the wacky comments. Cheers!

#190 dark sad person on 09.25.10 at 10:53 pm

When I can fill my car with a gold coin, I will believe you. — Garth

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

Welcome to the Dark Sad World of Cloak an Daggers and Suspicious Men in business suits-who meet late at night-in dark alleys– G-

****************************
Ron Paul Silver Ounces Accepted at Michigan Gas Station; Chiropractor Accepts Gold, Silver.

Connect Mid-Michigan reports Competing currency being accepted across Mid-Michigan.
New types of money are popping up across Mid-Michigan and supporters say, it’s not counterfeit, but rather a competing currency. Right now, you can buy a meal or visit a chiropractor without using actual U.S. legal tender.

They sound like real money and look like real money. But you can’t take them to the bank because they’re not made at a government mint. They’re made at private mints.

http://www.connectmidmichigan.com/news/story.aspx?id=481793

#191 grumpy on 09.25.10 at 11:09 pm

Consumers have been cheated on phony gold scams in the US….make sure you’re not one of them.

“Meanwhile, in DC, hearings over alleged shoddy bullion sales practices continued to spark heated words between businessmen, their lawyers, and politicians. “The TV gold industry is lead by one company, Goldline, which focuses its energy on fear, lies -and rip-offs. Goldline gets people scared about the economy and their future, then they transition to a lie saying buying certain gold coins acts as a hedge against economic downturns and then the consumer is profoundly ripped off almost irrespective of how high the gold market is.” Pretty charged words by US Rep. Anthony Weiner. None quite as dramatic as those spoken by a New York neurologist who testified that he instantly lost some $55K on a purchase of certain coins that he says he was pressured into buying. Some very mad men, over there, on Capitol Hill.”

Buy gold stocks in Canada not US TV scams!!!!!!

#192 echo on 09.25.10 at 11:46 pm

Garth, you are way off. I think the market is at the bottom and on it’s way back up. The information is clear. Check out my blog

http://calgaryfirsthome.com/2010/09/25/calgary-home-buyers-sitting-on-the-fence/

I did. And I will comment tomorrow. — Garth

———————————————————-

this should be fun:)

#193 JM in London on 09.25.10 at 11:52 pm

#105 dark sad person on 09.25.10 at 12:04 pm

As usual-you’ve got it all-assbackwards-
By trying to prove Gold is in a bubble-you’ve done the opposite–

It’s when people are lined up to buy Gold-is when bubble characteristics are present-not when people are selling jewelry for cash-
____________________________________________

Here you go again…do you have “SPECIAL” glasses to go with that “SPECIAL” way you have of being acerbic and caustic?

What was I trying to prove or where did I mention anything? This is what I posted:

“Not really saying anything here – just food for thought on the masses acting strangely. If the unwashed don’t understand gold, why would they be selling houses to buy it?”

Just posting links for observations & question or two to provoke thought. You seem to have this overwhelming need to assault everyone on this blog you disagree with (even if, as in this case, there is NOTHING to debate) and prove YOU have the answer, people are stupider (intended miss use) than you, and you have all the answers. I’ve seen you use everything from MSM articles to fringe crap in some sort of what seems like a maniacal attempt to prove your rightness. Couple that with the amount of time you seem to spend here in research of your point, coming up with sad attempts at clever insults, and pining for some women here (HINT: nasty little people usually die angry and alone) and planning to do what ever it is you’ll do with with your millions (you must be rich if you’re right so much, right??).

You at least live up to your name sake I guess…

#194 Crash Callaway on 09.26.10 at 12:02 am

Re: #190 Crystal

This posting at 9:23 PM is proof that Vampires sleep during
daylight hours.

I wonder if old fashioned garlic hung around the neck will be enough protection from Tech savvy bloodsuckers.

#195 JM in London on 09.26.10 at 12:11 am

#160 junius on 09.25.10 at 5:53 pm And everyone else in agreement…

It’s looong in the tooth and it seems to attract a bunch of nutters too. love when some come out swinging with religion (respect all religions incidentally so everyone just stop getting ready to cry fowl) to mix in with business and matters of state… illuminates much I think… After all, most of the worst gaffs in history happen when those lines get blurred.

#196 Crash on 09.26.10 at 12:26 am

Hey Chrystal:
It’s “sight” not “site”

#197 45north on 09.26.10 at 12:30 am

Crystal Tost: Yes we very well may have already seen the bottom come and start to fade away, but don’t let it fall out of site.

sight

My feeling is that we are not in just another cycle but in a downward trend that you have never seen in your life, that your parents have never seen in their lives.

Here’s a song about Alberta:

http://www.youtube.com/watch?v=wfZes9fFmXc&feature=related

#198 Keith in Calgary on 09.26.10 at 12:33 am

People are scared of equities and rightfully so. It’s a con mans ponzi scheme………has been for decades.

When rates hit 4-5% again for simple savings accounts the DOW will slowly crumble back to 5-6,000 even with greater government support than it has now……

#199 Peter Pan on 09.26.10 at 1:31 am

#89 alrightythen on 09.25.10 at 10:54 am

“Nobody has ever made any money betting against America.” ~ Warren Buffett

——————————–

Didn’t you read “The Big Short” by Michael Lewis?… Those guys bet big time against America and made billions…

#200 Dan in Victoria on 09.26.10 at 2:22 am

Geez, I guess the worm hole opened up again.
Mr. Mxyzptlk and his friends are back.

#201 Jody on 09.26.10 at 2:24 am

“In the near future (within five years), the USA will start into an economic renaissance which will support equity markets. ”

What industry will lead this charge Garth? The US has gutted itself, industry has left the country, not in the quest to find cheap workers either, but to rid itself of the massive blob of rules and regulations that prevents new and wonderful ideas from becoming a viable business. The US is not like it was in the 50’s, 60’s, 70’s or 80’s, it’s a mess, a huge mess, and yes, I’m betting against the US. The only thing that will rise out of the ashes will be an even more facist nation than the one they have now. To many boomers have abdicated the simple responsibility of taking care of themselves to the government, how sick. Now they have a bigger bunch of greedy asshole civil servants than even Canuckistan. The parasites outnumber the producers and the producers are still leaving. What happens when there are no more producers to feed the parasites? I’d like to think the Yanks could stage a comeback but their government is to big, it’s hand’s in to many things. Unless the government down there cuts government programs and red tape massively, there is no hope, it’s the dying days of an empire, we’ve seen it before. It’s very surprising it lasted this long. The US dollar is dying, it’s place on the world stage as the reserve currency is over, especially when Obama the socialist ass decides to dump trillions more to bail out the people who put him in the white house.

Canada should tie our dollar to gold or silver but what Canadian government would ever have the balls to do that eh? No, we just kiss the ass of America like we always have, what a bunch of pussies we are. The US is done, kaput, finished, unless they finally line all their elected officials up against a wall and bring out the firing squad their goose is cooked. When you have government controlled by corporations you have facisim, all that’s left is to find out what color of shirt they will wear, what kind of march they will do and who the enemy of God will be, my money’s on the Chinese or the North Koreans.

About the gold VS dollar argument. Money came about as a way to trade, the real store of value is your time/labour, you may get paid in pies if that is what you want but the majority of people want to have fiat paper, stupid, yes, but that’s how the sheeple want it, someday they may want half silver and half cooper coins, perhaps in the future disks of hydrogen to power their furnace, who knows. Precious metals certainly have been used as money in the past and are used now in certain countries, but buttons were once currency, quick, someone start hoarding buttons! What is considered money or what is used as a medium of exchange will change, and there is a very strong possibility that change will happen sooner rather than later, especially if the US decides to screw the world up because they can’t keep their financial house in order. Hell, since all these big agribusiness companies seem intent on screwing life up, non-GMO seeds may be a very valuable item to have in the future. I think gold will go up, a lot, but it will eventually come down, it more than likely will go over $3000 an ounce and more people are accepting it, I just gave a friend an ounce in exchange for a freezer full of moose and deer meat. As government becomes more intrusive more people will tell it to piss of in subtle ways, using barter, and yes it is possible on a large scale, just go to Cairo, Mumbai or Mexico City to see it in action. Eventually federal governments will become extinct, as they are nothing but a burden and a noose around the neck of mankind.

Only when the last politician is strangled with the entrails of the last priest will man truly be free.

#202 The Original Dave on 09.26.10 at 2:32 am

For those that are suggesting that gold is in a bubble, that doesn’t mean that a reversal is coming soon. Bull markets can tediously long.

yeah, but you guys are in love with the stuff, at what price point would you sell? Answer..there isnt one cause you think that the end of the world is coming.

You goldbugs sound just like realtors, way way to emotional.

A fool and his money are soon parted.
——————————————————–

Most of you guys miss the point. Barrick profits up close to 60%, another major gold miner raises it’s dividend, and all the major gold miners are fighting over properties to take over. Are these signs of a bubbled market? The public buys with their eyes closed based on emotions. The companies I’ve mentioned see opportunities.

I think you’re missing the point on the gold bull market. I’ve said this a hundred times on here. An increase in credit like we’ve had up until 2007 brings all asset prices up compared to gold. When credit contracts, these asset prices fall versus gold. Gold miners need falling asset prices (copper, oil, labour) to become more profitable. These low asset prices will remain until sensible balance sheets exist – government, corporate and personal balance sheets.. With low asset prices comes higher profit margins for the gold miners.

Basically, gold miners will be making a lot of money for the next few years…believe the unbelievable. The economy stampedes forward with credit expansion. Without credit expansion there is less profits, less jobs, little inflation. This leads to profitable mining opportunities for commodities that aren’t driven by purchases on credit (gold).

Maybe I’m speaking for myself, but I couldn’t care less if everyone that reads this blog sells their gold mining shares. In fact I hope everyone that reads this blog sells all their gold shares next week. It doesn’t matter. If you can’t understand the simplicity that I’ve explained, then yes, a fool and his money are soon parted. The bull market in gold mining companies has a long way to run. It’s laughable how the word bubble is thrown around just because something has increased in price, yet I NEVER hear anyone consider the dramatic drop in mining costs for gold miners in the past 3 years. This is what is fueling the takeover, high profits, and high stock prices. The arguments against a gold mining bull market comes from those that haven’t delved into the subject enough.

Again, please sell all your gold stocks everyone. The credit markets are in the sh*tter and won’t return to what we remember for a few years. The gold mining bull market has a long way to go.

Most people will never learn how to make real bucks in markets because they’re stuck on the sidelines critiquing things for most of the time and they get suckered in when valuations are ridiculous.

Again, look at profits for gold miners. Again, look at costs for gold miners. Now go back a few years and you’ll notice the spread between the price of gold vs all other commodities has increased. I’m simply pointing outthe most obvious thing – gold miners are making more money now. How does this not make sense to people?

The public isn’t going to scurry into financial assets and all other assets because the profits aren’t there. A sell-off of gold would be pointless for the public. They’re not going to jump out of gold to jump into things that aren’t making a lot of money. The public will remain in liquid assets like dollars and gold. A sell-off in gold would be accompanied by a more aggressive sell off of other resources and commodities. This would be great for gold miners.

Here’s an example:

Gold today is $1280. The mining costs for a gold company lets say is: $550 an ounce.

Well if gold sells off and hits $1,100, meanwhile all other assets get hammered again, it would then cost the gold miner for eg. $425 an ounce to mine.

Scenario A with higher gold price – would make 2.327 times the gold miners money.

Scenario B with lower gold price – would make 2.588 times the gold miners money.

Scenario B with a crashing gold price is better for the gold miner than Scenario A with a higher gold price.

I’ve done the best I could..

#203 gold bugger on 09.26.10 at 2:47 am

“The gold bubble is a giant bet against America, and will end badly.”

No, it’s not. It’s a bet against paper money. And history is 100% on the side of gold.

#204 TheBigLebowski on 09.26.10 at 2:51 am

#164 S.B.-read any of my posts. I am here only to state how people should be protecting themselves going forward. I am not here pumping up gold hoping the 14 people who read this blog will drive the price to $5000 so I can sell. I don’t know you so this next comment can’t apply but most people are so domesticated that even when offered help they will choose to follow the rest of the lemmings off a cliff.

#205 Edmonton Rigman on 09.26.10 at 3:08 am

I’ve just read that in Edmonton, ALberta downtown the prices for rent in commercial/retail have punged off there “bubble-highs” to 2003 levels in just a few months! I’m just wondering if we have all these newer highrises sitting so empty-unable to sell out, like the Meridan on 111 st, the Venetian on 111st, The Panache on 11 st too.. just to name a few.
Here’s the article anyways… http://www.edmontonjournal.com/business/Downtown+office+rents+retreat/3571797/story.html?cid=megadrop_story

#206 Numbers. on 09.26.10 at 5:51 am

Can we talk about something other than gold which less than 1% of people own and about REAL things like RE which 70% own and cash which 99% of us own?

BTW – I won’t trade a loaf of bread for a bar of gold, a 1ltr of oil, a gun and ammo or a bag of seeds. To me, it’s not currency or of any value other than what is printed on it ($50 Candian dollars = 1oz).

http://www.tulving.com/bullion/CanadianMapleLeaf999BU.jpg

See that? 1oz Canadian gold coin = just $50. Agrue with the mint, but that’s all I’d give for it.

Thanks.

#207 Brian1 on 09.26.10 at 6:40 am

I’m beginning to see the goldbugs as people who are trapped and owned by gold because they have been with it so long. They may be of closed minds. It has been somewhat painful for me to quietly wait for ideas to sink in. For example, the babyboomers won’t be the ones who will be trapped in underwater mortgages unless they bought recently. So when their egos get over the losses they will see that all house prices are relative to the others and will still downsize and invest the rest in GIC’s, savings and (the bravest) in equities.

Old is Gold; Politics sucks, but what else we got.

Junius; I see the persistence, but I don’t understand.

dd: Rosenberg said 3,000; I don’t think that is a goldbug.

Chrystal Toast; will that mean that Calgary will lead the world back to recovery? This is wonderful news.(It sounds like Florida).

If goldbugs are not enslaved to their gold then think of selling now and making a profit, or is their nothing else to invest in? I mean; does it make your skin crawl when you think about it?

#208 Moneta on 09.26.10 at 7:11 am

The question is whether a generation of risk adverse, everything in the house, type investors will suddenly plunge into the investment world after having their rrsps decimated in 2008.
——————-
When houses tank, HELOCs get cut and develeraging takes hold in Canada, many will be forced to sell investments to make ends meet. Lifestyles are sticky.

And what hot products have been selling like hot cakes? Dividend and high yielding securities. They’ll do well until they don’t.

It’s not an investor’s market right now. It’s a trader’s market.

#209 Mike on 09.26.10 at 7:13 am

$100, Chrystal is going to regret posting that link to her blog.

#210 Grandpa Grinch on 09.26.10 at 7:27 am

Just some people, which is why it’s not currency. — Garth

I think what confuses most people about gold is that those who tend to tout it tend to be overly passionate about it to the point of lunacy in some cases. Unlike RE, cars or toilet paper, there are several things that gold IS which can’t be refuted, thus its attractiveness to some.

1) It’s no one elses liability. Our CAD$ is the governments liability and its value can be manipulated, influenced or otherwise tinkered with by the politicos.

2) It’s a store of value. Has been for 6000 years and will continue to be as above ground supply diminishes, the amount per person has averaged between 1/2 – 1 oz continually and is culturally seen as a storehouse of wealth by the Indians & Chinese – 1/3 of the global population who doesnt read Garth’s blog.

With QE2 injecting an additional $3 Trillion into the US economy this fall/winter – the price of gold has nowhere to go but up. Is it a bet against the US economy – sure as its been in decline since the 1950’s.

OK, enough about gold. We get it. You’re all obsessed. Bullion is the new granite. Enjoy while it lasts. — Garth

#211 Joe Realtor on 09.26.10 at 7:35 am

I got some spam yesterday from another Realtor and I thought of ya’ll when I glanced through it.

Note: I do NOT agree with her, and make sure your mouth is empty of coffee, tea, Coke or excess venom when you read this – not so much the info at the link, but her commentary afterwards …

“Canada Housing Resales Rise 4.1% in August
http://www.jeffreyteam.com/blog/toronto-real-estate-market/canada-housing-resales-rise-4-1-in-august/

Listings are going down, while sales go up. Prices are also rising. Mortgage
rates are low and the economy is growing. The news don’t get much better than
this folks! “

#212 HouseBuster on 09.26.10 at 7:45 am

#182 Old_is_Gold — Ever heard of Tungsten?

#213 steven rowlandson on 09.26.10 at 7:51 am

Garth Gold is not in a bubble! Silver is not in a bubble either. Both are still depressed in price. Untill the price of both metals exceeds the world economy divided by the supplies of real above ground bullion both metals are ridiculously cheap and a good buy if you can find some to buy.
For now we are not there yet so relax and keep dissing
real estate and government debt.

Steven

Yadda, yadda, yadda. — Garth

#214 jane54 on 09.26.10 at 8:16 am

Can we kill off all these gold insects who are infesting our real estate blog?

Garth can you please block any spam with the word ‘gold’ in it?

And yes this is the beginning of the end of the American Empire and the begining of the Chindia one.

#215 rosie on 09.26.10 at 8:40 am

#222 Numbers

I would happily give you $50 for every 1 oz. coin you have.

#216 steven rowlandson on 09.26.10 at 8:42 am

RE:Posting #217
Canada should tie our dollar to gold or silver but what Canadian government would ever have the balls to do that eh?

Yes Jody you are correct but there is one problem and that is that for the most part the government of canada and the bank of canada have almost no gold or silver. The exception being a possible 100,000 oz worth of old coins at the BOC and the working stockpile at the mint. Do chartered banks have any metal?
May be but they won’t prove it by showing you.
Most Canadians have little or no silver and gold coin or bullion although there are exceptions. I would say getting real money back into circulation would be slow, painfull and difficult. Most think all the old silver coins are still around as are the olympic coins. This is not the case. Over the years any thing that wasn’t high quality and got brought to a dealer got for the most part scrapped and melted for its silver content.
What ever is left is in strong hands now.
The quest to subsidize the silver users association and make fiat currency look good has seriously depleted the supply of monetary silver and excess bullion relative to what existed before the mid 60s.
So if anyone has silver please don’t sell at these ridiculously low prices. If you do you will be cheated.
So how can silver be reintroduced as the basic coin of the realm? The answer is that it can not do so for the purpose of being small change. Those days are long gone. We are in an age where conservatively silver should be between $50,000 and $60,000 an ounce and gold between $11,000 and $50,000+\- an ounce.
That is the world economy divided by real metal and therefore is not inflationary or in a bubble.
Right now both metals are from a market price stand point hyper deflated relative to the world bullion supplies and economy. In the light of all that the average house price should be 6 to 7 ounces of silver at this time.

Right now silver and gold could be used for buying very big ticket items based on the above mentioned real prices as opposed to the current market fantasy prices. Lowering the real value of metal would depend on increasing the production of metal and not wasting it by turning it into consummer goods as is the case with silver.
Idealy electronic and paper currency should be outlawed in favor of coin and bullion and lethal penalties should be imposed for debasing the coins or bullion in any way shape or form. 999 fine or better should be the standard for gold and silver coin or bullion. What about small change? I think that untill we have tens of billions of ounces of silver in circulation base metal coins will have to do.

Steven

#217 T.O. Bubble Boy on 09.26.10 at 9:00 am

Burnaby, B.C. – home of the price reduction:

“The Average Sold price (of detached properties) in the Jul/Aug was $870,369. In Aug/Sept it dropped to $744,462.”

(-17% in 1 month)

http://www.yattermatters.com/2010/09/community-series-burnaby/#more-21300

#218 andrewS on 09.26.10 at 9:07 am

Re #204 dark sad person

Maybe he takes gold but he’d have to resell it into real money to do anything.

Barter is still legal. I’ll go rake my elderly neighbour’s yard when the leaves fall and she’ll bake me an apple pie in exchange. This does not make applie pie “money”. The government hates it because it’s technically under the table and they don’t get their cut, though if they really want to I’ll mail them a slice of the pie.

As long as people universally agree a unit of currency is worth a certain amount of labour then it’s money.

If gold were money it would have to be de-commoditized. The simple fact that a worker making an average wage in 1998 would be paid around 100oz of gold a year but that same guy would be paid only 30oz a year today tells us it’s not money.

#219 Confused on 09.26.10 at 9:39 am

Can’t wait for you response to Crystal about the Calgary housing market. (Crystal kudos to you for posting here – with a link to boot!)

I checked out Mike Fotiou’s site (findcalgary.ca) and sales numbers are definitely up – what the heck is driving the surge in recent sales is way beyond me. I am at a loss … it was down for the last few months and now September it is back up! Anyone, in Calgary, have any ideas? (I still think the market in Calgary is WAY overpriced.)

#220 Moneta on 09.26.10 at 9:40 am

The government hates it because it’s technically under the table and they don’t get their cut, though if they really want to I’ll mail them a slice of the pie.
———-
It depends when.

Many seem to love it when women stay home and do all the work for free including when they nurse sick family members.

#221 Pixma on 09.26.10 at 9:46 am

#190 is an imposter. Would Crystal Tost come on here and post a link to her blog under the name Chrystal Tost? It’s obviously an imposter trying to bait Garth into more realtor bashing.

She couldn’t spell “sight” so maybe she can’t spell “Crystal”. — Garth

#222 rosie on 09.26.10 at 9:47 am

#233 andrewS

Does that mean I am being ripped off to the tune of 70 oz. per year. We need an inquiry, better yet a Royal Commission. This is outrageous I say.

#223 dark sad person on 09.26.10 at 9:49 am

#209 JM in London on 09.25.10 at 11:52 pm

I’ve seen you use everything from MSM articles to fringe crap in some sort of what seems like a maniacal attempt to prove your rightness. Couple that with the amount of time you seem to spend here in research of your point, coming up with sad attempts at clever insults, and pining for some women here (HINT: nasty little people usually die angry and alone) and planning to do what ever it is you’ll do with with your millions (you must be rich if you’re right so much, right??).

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

JM–If you think the data i use- is fringe crap-then it should be easy to disprove–no?

I spend little time researching anything-
I have folders and folders of “factual” documents-that have simply fallen into my lap-over the years and are a simple click away-

“Nasty people usually die alone”
Yes-you should heed those words JM–
btw–still think I’m smoking dope-after that last spanking you got from me-for trying to deflect a debate-with insults?

(you must be rich if you’re right so much, right??).

Well-rich is a widely defined word-but-to you-
I’m sure it;s all about money-i mean-considering your occupation involved signing widows and orphans-to a life long obligation of debt-into a dieing RE industry over the last 5 years-
Sleep well JM?

“and pining for some women here”

Yes!
They’re all so gorgeous–who could resist-
Sound a “bit” jealous JM? that they find me smoken hot and leave you on the sidelines-

http://www.youtube.com/watch?v=ncLZD4KFUD4

#224 PR on 09.26.10 at 9:54 am

*Real Estate*How can we be so blind?
The average Canadian is blissfully ignorant about what has happened… about what is happening… about what is about to happen.

http://www.canadabubble.com/bubble-article-list/1361-how-can-we-be-so-blind.html

#225 Numbers. on 09.26.10 at 10:03 am

#227 rosie “#222 Numbers…I would happily give you $50 for every 1 oz. coin you have.

http://www.tulving.com/bullion/CanadianMapleLeaf999BU.jpg

Sure thing. I have NO ISSUE trading a coin for face value. If you want to change your $1 bill, I’ll give you 4 25c coins. But I doubt the gold gollum’s would ever give up their “Precious”, ever. “My golden Precious!”

#226 Numbers. on 09.26.10 at 10:04 am

#229 jane54 “Can we kill off all these gold insects who are infesting our real estate blog? Garth can you please block any spam with the word ‘gold’ in it?”

HAHA. I was just going to request the SAME thing!

#227 Grandpa Grinch on 09.26.10 at 10:10 am

Garth do you ever plan on leaving Canada to explore RE in other countries? I went to AUS & NZ last Xmas and prices there are even more ridiculous than here. Mrs. Grinch’s aunt & uncle bought a place in Melbourne in 1977 for $70,000. They added onto the house and now the LOT alone is worth $1.2Mil. A 450 sq ft. box in Oriental Bay in Auckland is $1Mil.

#228 JM in London on 09.26.10 at 10:21 am

Well well, Junius seems to have stirred quite a little storm! Just like those who have placed their bets on housing, they brew up such a storm at anyone questioning their position. I’ll remind everyone of the whole “history repeats” lines that are so often quoted. I get annoyed by the repeats part of it as it may rhyme but it never repeats

In other news – off to a few open houses today – report to follow later. One I’m intensely interested in has a “home inspection included” sign hanging from the bottom – should be interesting as it rhymes with the new picture up top…

#229 AnotherLowlyRenter on 09.26.10 at 10:28 am

There is something that does not make sense with the whole gold story.

Gold is one of the best performing asset classes this year – up around 18%. But there is another asset class that is also up 18% YTD – and that is US government bonds.

Why does that not make sense?

The fact that the long bond can be at all time highs — a deflation worry — while gold is also at all time highs — an inflation (& end-of-the world worry) — illustrates that there is an unparalleled disparity of views in the market place. Because you can’t have both deflation and inflation.

Not to mention the fact that a number of emerging stock markets are at or near all-time highs.

My point: the markets are telling you that they have no idea what is going to happen. For what it’s worth, stay balanced & rationale in your investing decisions.

#230 dd on 09.26.10 at 10:28 am

#163 The Original Dave

…For those that are suggesting that gold is in a bubble..

A friend did a survey about the metals a couple of weeks ago. Out of 100 people NO ONE owned the yellow or silver metal! I know 2 people that own the physical. That is it. It is not in bubble.

#231 junius on 09.26.10 at 10:30 am

#185 Dark Sad,

You asked,”Would you care to go “deep” into “any” Economic subject-other then Gold with these irritating Goldbugs on this site?”

I suppose I would. However I stopped reading it so long ago I have no idea what these nuts are saying and why. The relationship between gold bug/tinfoil and crazy has been firmly established on this blog.

BTW – I hold some gold. Lat year it was about 5% of my portfolio. Now it is closer to 10%. However I do not see the point in all this mindless banter about. It is a hedge only – IMO.

#232 rosie on 09.26.10 at 10:39 am

#240 numbers

Not for $50, that would be foolish.

#233 Dawn in Calgary on 09.26.10 at 10:41 am

I’m with #229 and #241 Can we filter out the gold bugs — it’s getting tiresome sifting through the arguments to get to the RE discussion. They’re hijacking your site.

#234 Love this Blog on 09.26.10 at 10:43 am

Good link here. Garth referred me to it at the S’toon show.

https://s3.amazonaws.com/policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2010/08/Canadas_Housing_Bubble.pdf

#235 JM in London on 09.26.10 at 10:45 am

#238 D-S-P

Right on que…deflect debate? You seriously do think you’re an intelligence worth debating? That you gave some sort of “spanking”? You are truly spending far too much time here if you’re attaching that kind of importance to it all. As one of the sites most prolific posters, says much I think…

#236 Bill ( Peterborough) on 09.26.10 at 10:58 am

Re # 242

Garth do you ever plan on leaving Canada to explore RE in other countries? I went to AUS & NZ last Xmas and prices there are even more ridiculous than here. Mrs. Grinch’s aunt & uncle bought a place in Melbourne in 1977 for $70,000. They added onto the house and now the LOT alone is worth $1.2Mil. A 450 sq ft. box in Oriental Bay in Auckland is $1Mil.

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

How about that Garth, since you say that a globilized ecocomy will save us.

Perhaps India or China, then you could see what goes on these countries. Having only rich and poor.

Oh I forgot, most people just want to exploit those countries for their slave labour and resources while living in other parts of the world,( through their financial portfolios).

Easier to sleep at night not having to see how their money is working for them.

#237 Peter on 09.26.10 at 10:59 am

I think this is a site where a bunch of negative people get together to feel better. There wont be any bubble burst! Period. In ontario, people are willing to pay. Too many people getting into this country and most of them stay in the GTA. People will have less money to spend, they will spend most of their salaries in mortgage, houses wont apreciate too much year over year, less people will have cash in their accounts……but burst, forget about it.

Pd: My house is almost paid.

Spoken in your own self-interest. Well done. — Garth

#238 BrianT on 09.26.10 at 10:59 am

#241Num-this isn’t solely a RE blog-almost all of the key posts mention investments other than RE. People buy gold or any other investment to make money-you might as well say this blog should ignore investment completely and just focus on lawn care or whatever you are into.

#239 Arjo Soer on 09.26.10 at 10:59 am

I think the USA will make a comeback as well. For the simple reason that they have the largest military, spend the most money on the miltary. They will use the military to revive their economy before rolling over and dying.

#240 dark sad person on 09.26.10 at 11:07 am

#241 Numbers. on 09.26.10 at 10:04 am

#229 jane54 “Can we kill off all these gold insects who are infesting our real estate blog? Garth can you please block any spam with the word ‘gold’ in it?”

HAHA. I was just going to request the SAME thing!

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

Wonder why all you anti Gold folks have to go sniveling to G–to make it all “please stop”
Why don’t you simply prove us wrong and shame us off the board-
Should be simple enough-considering you’re all so sure of yourselves-that we’re all totally wigged out-

The only thing that keeps me in the Gold game-is the excitement and intrigue that “always” accompanies Gold-

I mean-look how the mere mention of the word-spurs emotions so deep it makes grown men cry and threaten to “never” read this blogs comment section-ever again!

http://www.youtube.com/watch?v=XwPexocJK3Yhttp://www.youtube.com/watch?v=55upTRq3Eks&feature=related

#241 BrianT on 09.26.10 at 11:11 am

#220Big-LOL-you pretty well summed it up-on this blog you get a lot of sychophants looking for a messiah-if Garth turns bullish on gold their attitude will change real quick. “How shall I buy it? What do you recommend?”

#242 Basil Fawlty on 09.26.10 at 11:26 am

In BC 71 mills have closed since 2001. During this same period the export of raw logs has increased 3000%. Forestry has been the main economic driver of our economy for most of the provinces history. The question naturally arises as to what kind of economy will be left here when all the government stimulus money and cheap credit dry up?
If one looks at North America a similar argument can be made, as the manufacturing base has been shipped offshore, even from Mexico to Asia. It’s a situation where the negative economic consequences of off-shored manufacturing has been glossed over by cheap credit and stimulus. This has created massive misallocations of capital into real estate and into the derivatives market, as people have chased yield for example.
Some people look at the above and realize our standard of living is not sustainable under these circumstances and then make their investments accordingly. Many put their heads in the sand and cry out against the increases in commodity prices, they seem to be in denial of the fact that the run up in commodity prices is just a symptom of an underlying disease(irresponsible fiscal and economic policy).
Through all this the recent middle class borrow and spend life style is coming to an end and ignoring it will cause future pain.

#243 PR on 09.26.10 at 11:28 am

#241 Numbers.
#229 jane54
And others.
The ride in the real estate train is over you had to be on board in 1998 and get out last summer. Now like it or not the gold train is leaving the station you have to be on board, now. You just have to follow the trends. Pepole who descredit this gold trend , look like frozen deer in the light. Exaclly like the pepole, who Gart and others try to warn ABOUT REAL ESTATE and did not belived it.

#244 ALE on 09.26.10 at 11:28 am

Garth, stock correlations are at all time highs. There’s no such thing as a balanced portfolio.

Among asset classes, of course there is. — Garth

#245 Taxpayer like everyone else on 09.26.10 at 11:42 am

Garth – sorry to weigh in on gold and PM.

231 Steven R – I’ve posted this link before

http://www.financialsensearchive.com/fsu/editorials/dollardaze/2009/0126.html

Basically it concludes that the currency in circulation is roughly equivalent to the current value of the total gold ever procduced (c. 160000 tonnes). Though there is no mention of silver, this would be offset to some degree by the “non-marketable” gold in museum pieces and other treasures.

“That is the world economy divided by real metal “. How have you measured “world economy”? Measurement is
normally over an arbitrary time period – like $50T per
year. But within that time period, currency can travel through many hands, meaning $100 of currency can creates many $100s of products and services.

#246 Gord In Vancouver on 09.26.10 at 11:54 am

#257 Basil Fawlty

Gloomy but true.

#247 junius on 09.26.10 at 11:59 am

#257 Basil Fawlty,

You said, “It’s a situation where the negative economic consequences of off-shored manufacturing has been glossed over by cheap credit and stimulus. This has created massive misallocations of capital into real estate and into the derivatives market, as people have chased yield for example.”

I don’t always agree with your posts. However that analysis is dead on correct – IMO.

#248 bigrider on 09.26.10 at 12:01 pm

Garth, would you really recommend against an investor putting a portion of his portfolio into the mutual fund I mentioned, that you just censored, because of some extra fees ?

Really?

This site is not turning into a place to pump individual securities. Period. — Garth

#249 Timing is Everything on 09.26.10 at 12:02 pm

#217 Jody said – “Only when the last politician is strangled with the entrails of the last priest will man truly be free.”

Can I keep my iphone?

#231 steven rowlandson said – “Yes Jody you are correct but there is one problem and that is that for the most part the government of canada and the bank of canada have almost no gold or silver.”

But Canada does…It just has not been mined yet.

#250 junius on 09.26.10 at 12:03 pm

#255 Dark Sad Person,

You said, “Wonder why all you anti Gold folks have to go sniveling to G–to make it all “please stop”
Why don’t you simply prove us wrong and shame us off the board.”

Because many of us hold gold and some like me even think it is not done its run. However the gold bugs take it all too far when they get into their arguments about gold becoming the next currency, blah, blah, blah.

There is nothing to disprove. It is just tedious ranting in attempt to get more people to drink the Kool-aid.

#251 dark sad person on 09.26.10 at 12:21 pm

#244 AnotherLowlyRenter on 09.26.10 at 10:28 am

The fact that the long bond can be at all time highs — a deflation worry — while gold is also at all time highs — an inflation (& end-of-the world worry) — illustrates that there is an unparalleled disparity of views in the market place. Because you can’t have both deflation and inflation

*******************
I like your post-as it inspires a sensible debate-on a very interesting-yet confusing topic-
Long Bond VS Gold–

I have to disagree with you though-
Gold is not much of a hedge against Inflation-there are much better Inflation hedges-such as RE–

Gold is a hedge against Deflation-as is the long Bond–

Look how closely correlated they are-
You can see this “risk” relationship develop in 2001-when both these “true market” influenced entities-sniffed out extreme credit risk-which “both” are still signaling today–

http://research.stlouisfed.org/fred2/series/DTP30A28

http://www.the-privateer.com/chart/gold-pf.html

Keep in mind-until 2001-both the long Bond and Gold-were mired in a 20 year Bear Market-that was Credit/Inflation driven-all the way-
That cannot be denied-

Here is a few good examples of how Gold performs in Deflation–

http://2.bp.blogspot.com/_nSTO-vZpSgc/RbmMtplgCjI/AAAAAAAAAPk/NtN5JDlwHio/s1600-h/homestake.png

http://4.bp.blogspot.com/_nSTO-vZpSgc/RbZwf5lgCXI/AAAAAAAAAN0/WJYO6dh-ogg/s1600-h/Gold-CPI-FF-Rate.png

#252 Sail1 on 09.26.10 at 12:34 pm

Spoken in your own self-interest. Well done. — Garth

Why is anyone on this blog deep down representing the interest of the masses. Careful how you answer, you may be mistaken as the second coming.

#253 T.O. Bubble Boy on 09.26.10 at 12:41 pm

Apparently some economists are calling this period of rising prices (for commodity-based items) and falling assets (for durable goods and debt-based items) “biflation”:

http://balancejunkie.com/2010/09/20/are-you-ready-for-biflation/

#254 Love this Blog on 09.26.10 at 12:49 pm

I’m with #229 and #241 Can we filter out the gold bugs — it’s getting tiresome sifting through the arguments to get to the RE discussion. They’re hijacking your site.

#255 Bill ( Peterborough) on 09.26.10 at 12:55 pm

Re #246 junius

#185 Dark Sad,

You asked,”Would you care to go “deep” into “any” Economic subject-other then Gold with these irritating Goldbugs on this site?”

I suppose I would. However I stopped reading it so long ago I have no idea what these nuts are saying and why. The relationship between gold bug/tinfoil and crazy has been firmly established on this blog.

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

No worries in regards to having stoppped reading about
any other economic issues.

We’ll bring you guys up to speed on whats really going behind the scenes. ( NWO, BANKING CABALS, BLACK POPE, POPULATION DOWNSIZING THROUGH FAMINE, DISEASE…)

It’s all out there. Just have to look for it and piece it together.

#256 TheBigLebowski on 09.26.10 at 1:03 pm

#256 BrianT-
I live in B.C and use Border Gold to buy pysical. A good place to invest to start at least is Cef.a (Central Fund of Canada) , a fund that is traded on the tsx and hold 60% gold and 40% silver. A good mutual fund is RBC precious metals or Sprott has one too. Add bi-weekly or monthly and don’t worry about timing the market. Its a volitile arena and may make your stomach turn so don’t watch it daily. The long term trend is up , leave it at that. I think someone on here said RBC also sells physical metal. I use Cef.a as a savings account instead of cash and add whenever I can. Go long and stay long , do not try and trade this market, just dollar average in.

#257 Patz on 09.26.10 at 1:05 pm

I like posting well past the 200 mark as it insures few will read it. But let me join with the others who are tired of hearing about gold. As Garth says, “We get it.” Now forget it. Goldbugs are an invasive species; you are the Asian Carp or the Mountain Pine Beetles of this blog. At first I read all your points but now it is repetitively repetitive not to mention redundant. By all means if gold breaks through some magical high, post away. For now it’s all same old, same gold.

#258 Bailing in BC on 09.26.10 at 1:07 pm

#242 Grandpa Grinch

Surely, you mean Oriental Bay in Wellington?

#259 Bill ( Peterborough) on 09.26.10 at 1:07 pm

Re # 248 Dawn In Calgary

I’m with #229 and #241 Can we filter out the gold bugs — it’s getting tiresome sifting through the arguments to get to the RE discussion. They’re hijacking your site.

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

Hey Garth Dawn is right. We all know real estate is toast for a while. Especially for those who have bought in the last 3 or so years, in general. It’s like flogging a dead horse. Anybody who is still asking questions about real estate in my opinion is already screwed. Where have they been in the last 5 years. On the space shuttle? (are they all astronouts)

Lets move on to profitable ecomomic ideas for the future to get us out of this shit. ( gold, becoming self sufficient, farming 101, perhaps an uprising of the masses in the future…)

#260 dark sad person on 09.26.10 at 1:14 pm

#265 junius on 09.26.10 at 12:03 pm

Because many of us hold gold and some like me even think it is not done its run. However the gold bugs take it all too far when they get into their arguments about gold becoming the next currency, blah, blah, blah.

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

Yes-
I’m absolutely certain “most” here hold Gold–lol
Of course-being-follower’s-instead of a leaders-
“Proper” Investors would always hold just the “right” allocation of all entities and never take a risk-

“Fortes fortuna adiuvat”

Speaking of mindless drivel-
I have to agree with you–
My poor little Mouse-gets soooo tired by the end of the day-from-over scrolling-

http://www.youtube.com/watch?v=Etv16q0iMNw

#261 prairie gal on 09.26.10 at 1:30 pm

The comments here have degraded so much in quality I just skim through the ‘gold good’ and ‘NWO is coming to get you’ – but they are getting thicker by the day!

#262 TheBigLebowski on 09.26.10 at 1:34 pm

#270 Bill ( Peterborough)
yes, the U.N wants to reduce the population by controlling the world’s food supply. Their weapon of choice is carbon taxes and credits. Soon each country will be allotted a certain number of carbon credits to feed its people. The U.N will slowly squeeze the number of credits dolled out and countries will be force to implement one child policies and pay massive taxes to have a second baby. Rockefeller is quoted saying that China was the future model state.

That’s it. Any more absurdist, conspiratorial, nutcase comments like this will be struck. — Garth

#263 S.B. on 09.26.10 at 2:40 pm

I am amazed at the rat-box condo prices in my area. Here is a 1 bedroom for 450k:

http://www.privateservicerealty.com/listings/?prop_id=1328

The trend is for exposed concrete ceilings, sold as a “feature”. But to me, builder is too lazy to install a real ceiling?

Here’s a 2 bedroom sub penthhouse in the same building , for a mere 719k:
Monthly condo fees are $600…

http://www.Obeo.com/621173

Only a greater fool would buy one of these units??

#264 Ben on 09.26.10 at 3:04 pm

#278 S.B. on 09.26.10 at 2:40 pm

Are you serious? 719K for that? It’s like a garage with a splash granite overlooking some warehouse tar paper roofs?

#265 bigrider on 09.26.10 at 3:05 pm

#263 -Garth- This site is not turning into a place to pump indivdual securities. Period.

Fine and understood. Let me rephrase my question.

Garth, do you feel that there are some long standing mutual funds that have shown a long history of consistently beating benchmarks by such a wide margin that they warrant the additional fees over ETF’s ?

#266 Dan in Victoria on 09.26.10 at 3:14 pm

Wealth.
What is it. To some its gold, to others its real estate.
Still others see it as material goods.
Or a huge bank account.
Others see it as control over their fellow man.

I’m going to take my 80+ year old dad salmon fishing tomorrow.
The coho are running in Sooke, some in the 20+ pound size (huge).
He’s unsteady on his feet, can’t see to well , and has a little trouble hearing.
I’ll hear all the old stories again like I do every time I take him out.
He’ll probably break some thing like he invaribly does…
Or screw up my electronics from playing with the knobs and buttons.
I’ll be having peanut butter sandwiches on old bread cause thats all he can afford, after all he always brings the lunch.

But you know what? Tomorrow to me is worth more than anything that some of you covet.
Thats my wealth.

#267 Nostradamus Le Mad Vlad on 09.26.10 at 3:17 pm

Old is Gold — Great meeting you this morning! Tim’s is still a great place to meet, greet and chat! See you and yours shortly!

Mad Vlad

#229 jane54 — Absolutely right. This is The Decline of the American Empire, along with the rise of what you mentioned.

#252 Peter — “There wont be any bubble burst! Period.”

Accurate. A nuclear WW3 is more likely, along with various land masses collapsing into the sea, new ones rising, with tea and crumpets being served at four o’clock!

#257 Basil Fawlty — “In BC 71 mills have closed since 2001. During this same period the export of raw logs has increased 3000%.”

How much have the NDP and BC Libs. let go across the border on 18-wheelers, getting little or nothing in return?

About the same period of time that you mention. That is why the NAU / SPP are still on (under) the table, but especially why the cycles must change.

The old empires are toast, burning even as we talk.

#270 Bill (Peterborough) — Actually Bill, life itself proves that this entire life cycle we’re all in is nothing more than a ginormous conspiracy theory, that none of us actually exist!

#277 TheBigLebowski — “That’s it. Any more absurdist, conspiratorial, nutcase comments like this will be struck. — Garth”

FWIW, I agree with Bill (Peterborough), TBL, Old Is Gold and a few others. We may be labeled as nutbars, but so what?

#268 sk76driver on 09.26.10 at 3:22 pm

Now that this thread is nearing the end I quote an excerpt from the first post:

#1 Grandpa Grinch on 09.24.10 at 10:28 pm

…I don’t know about others on here (Lebowski, Bullion Bunny, et al), but I for one am willing to put my money where my mouth is. My portfolio against yours Garth. You can pick the timeline – minimum 12 months. $5000 in a trust account with an agreement signed by an attorney with that amount invested for the whatever time you wish. Winner takes all at the end.

How bout it?

You’re a speculator, not an investor. — Garth

I on the other hand am not only an investor and at times a speculator, I am also a gambler…..

I think I may be interested in fronting Garth that $5K…

For say a………6% vig?

#269 alrightythen on 09.26.10 at 3:23 pm

“Didn’t you read “The Big Short” by Michael Lewis?… Those guys bet big time against America and made billions…”

I did read the book, and no they were not betting against america. They bet (correctly) that the valuations of the subprime securities held on the books by various investment banks were mispriced and inflated through collusion with the rating agencies. They were correct.

I shorted LULU and RIM a few years ago – because the valuations on the individual securities were too high. It was not a bet against Canada.

Now if you entered into a long term contract with someone betting that the value of the SP500 would be 10% of what it is today in twenty years, that would be a bet against america. Good luck with that.

#270 JM in London on 09.26.10 at 3:57 pm

Reports from a gloomy open house day here in the S/W. Traffic down across the board. This should be interesting to see the September numbers down here as the listings are sure up. Ran into another broker I’ve mentioned here in the past. He’s sweating bullets right now as things in his office are off by 30ish percent.

#271 TheBigLebowski on 09.26.10 at 3:59 pm

#276 prairie gal
Like the Borg in Star Trek, one day the huddled masses with their one collective linier way of thinking will come looking for the free thinkers. This will take the form of a Socialist/Fascist government elected by a population begging for the officials to bail them out. It will be a mass case of Stockholm Syndrome where the people fall in love with their captors. Stating the truth is now looked at as conspiracy, and people willing to point out the obvious are attack. George Orwell’s 1984 is upon us and you have no idea. Rig now the masses are fixated on real estate, but when that house of cards falls they will be screaming for hand outs. The people that have protected themselves will be tracked down with higher taxes and less freedom of choice financially, economically, and socially. I know the truth does not compute with you but that doesn’t change the truth.

#272 JM in London on 09.26.10 at 4:03 pm

#238 DSP

Since you’ve decided I’m so professionally wretched, I mean all I do is help people save money over what the banks will offer.

You seem to paint me as some kind of monster. I assure you I sleep very well at night and if I can manage to keep my seriously awesome wife (Garth can attest to this) I’m not in any immediate danger.

What do you do for a living.

#273 Bill ( Peterborough) on 09.26.10 at 4:13 pm

Re # 277 TheBigLebowski

That’s it. Any more absurdist, conspiratorial, nutcase comments like this will be struck. — Garth

****************************************
A)

Your Blogs are informative Garth. Some people are just trying to pinpoint the reasons why they feel this is happening. Backing up what they say with research which is presented as well. Granted alot of hypotheseis are floating around, but again they are based on previous patterns in history which seem to repeat themselves.

How can we keep making the same mistakes over and over again and not learn from them? It does make you wonder.

After all this is all economically based , even if some people tend to disagree.

I think alot of people are starting to question why it is getting harder every year to try and maintain whatever lifestyle they choose to be comfortable with. ( Especially in North America, with all of our resources)

We all know Greed/Lust for Power exist on smaller levels why not larger levels?

Nobody is talking about aliens, yet.

B)

At one time people thought the world was flat , Garth.

The ones who said it was round were thought to be nutcases, tinfoilers.

Free thinking intellect was always frowned on by the
general populous. But time always showed that the free thinkers were in general right in their observations. And the masses always found out when is was generally to late.

Keep in mind the video below was done in 1974. In general what is said has come true

http://www.youtube.com/watch?v=qlWd_1Ph0r0

Commie-hunting, segregation-loving, US protectionist, right-wing drivel. — Garth

#274 timbo on 09.26.10 at 4:14 pm

#257 Basil Fawlty,

“It’s a situation where the negative economic consequences of off-shored manufacturing has been glossed over by cheap credit and stimulus. This has created massive misallocations of capital into real estate and into the derivatives market, as people have chased yield for example.”

Add the fact that we now have no baby-boom to chase future growth and you have my vote in spades.The only thing that North-America has lived on in the last 20 years is debt.

#275 Cameroni on 09.26.10 at 4:42 pm

#268 T.O. Bubble Boy

I read that article you posted about bi-flation. Very interesting stuff and much of it paints an accurate picture of the squeeze that is currently underway insofar as asset values like housing are dropping while the prices for food and services and some commodities are on the rise.

We needed a new term actually and it is nice to see that what we on this blog have been discussing in detail for ages now is becoming more mainstream.

Garth, very notably, had actually nailed this idea down quite awhile back when he wrote “in an age of falling asset values and rising consumption costs….” or something akin to those words.

This is really a terrifying time to

#276 Cameroni on 09.26.10 at 4:45 pm

OK,…that was weird. I was typing when suddenly my computer went berzerk and my comments posted even though I had not finished writing or hit the “submit” button.

Must be gremlins in the machines.

#277 Cameroni on 09.26.10 at 4:53 pm

#276 prairie gal

The comments here have degraded so much in quality I just skim through the ‘gold good’ and ‘NWO is coming to get you’ – but they are getting thicker by the day!
————————————-

I have to agree Prairie Gal. I am noticing the same thing lately and have lost interest in reading comments on the “crazy days”.

“Hey, maybe Mercury and Venus are in retrograde today”!

(Not sure if you could hear the extreme sarcasm in my voice when I wrote that line, but trust me,…it was there)

#278 prairie gal on 09.26.10 at 4:56 pm

posters such as Bill (Peterborough) and TheBigLebowski are living, breathing examples of those who are so open-minded that their brains fell out.

#279 dark sad person on 09.26.10 at 5:14 pm

#288 Bill ( Peterborough) on 09.26.10 at 4:13 pm

Re # 277 TheBigLebowski

That’s it. Any more absurdist, conspiratorial, nutcase comments like this will be struck. — Garth

****************************************
A)

Your Blogs are informative Garth. Some people are just trying to pinpoint the reasons why they feel this is happening.

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

Good point Bill–

Perhaps the {Non-crazies} on this site can explain to all of us Nutbars–

WTF is happening-

WHY is this happening-

Is all of this just some “normal” Economic cycle-that-
TRAPS-your Kids-into a lifetime of Debt Slavery-IE-
High taxes for “life”??

Why is it–only the Nutbars-that seem to give a shit-about saddling future Generations-with this mess?

G-talks about what and how and who caused this-BUT-
NEVER–about why or how–this was “allowed” to happen–

So speak up-Sane ones-cuz–
I’m all ears–

http://www.youtube.com/watch?v=euASXGWJJDw&feature=related

#280 Bill ( Peterborough) on 09.26.10 at 5:35 pm

Commie-hunting, segregation-loving, US protectionist, right-wing drivel. — Garth

Your wild Garth, I said in general. And by the way whats wrong with protectionism. Being abit right wing is better than a lefty. Most of the things stated in the speach have happened, or are you going to try and put another one of your spins on that as well.

Oh I forgot you are some sort on new world man.

Probably have no problems in investing in 2’nd 3’rd world countries either. Who cares how you acquire wealth , right.

I personally never invested in anything that resembled slave labour, child labour, exploitation of another countries resources…( not like alot of people out their)

That way I have no problems sleeping at night.

But then again alot of wealthy/enlightened people have lost most of morals or principles through repetative conditioning( WHAT CAN I DO/ THATS JUST THE WAY IT IS…)

#281 Bill ( Peterborough) on 09.26.10 at 5:51 pm

# 293 Prairie Gal

posters such as Bill (Peterborough) and TheBigLebowski are living, breathing examples of those who are so open-minded that their brains fell out.
**************************************

Can’t change you because of socialistic government job you had.

Must be wonderful to go through life with blinders, so as to not see what is really going on.

I remember when I was younger my nieghbour was mentally handicapped. Could barley say anything intelligent was always the happiest kid on the block.

Alot of kids made fun of him, but I thought he was truly blessed, not having to deal with all the things normal people had to deal with.

Thanks for bringing back some of my childhood memories Prairie Gal.

#282 Bill ( Peterborough) on 09.26.10 at 6:36 pm

Re # 281 Dan In Victoria

Dan you are 110% right.

Alot of us tinfoilers here just want to try make sure the generations after can have the same opportunities .

Only have one father Dan, spend more time and do more with him, as well as mother. The day will come when DAD won’t be around. Lost my father last year, wish I had done alot more with him.

Have a great day tommorrow with your father Dan.

All the best.

#283 bill on 09.26.10 at 7:31 pm

full moon

#284 Crystal Tost on 09.26.10 at 7:39 pm

Thanks Garth for removing the link to my BLOG which clearly I did not post here. Everyone has to decide for themselves when and if it is the right time for them to make a real estate purchase in Calgary. I just offered my honest opinion of the current state and what I believe we can expect.

#285 Dan in Victoria on 09.26.10 at 7:53 pm

Thanks Bill.

I understand where you and others are coming from.
Had a long, long think about it years ago.
Lets just say my thinking, questions and reasoning at school did not fit in.
Hell I never fit in period come to think of it.
Time and circumstances has since passed me by.
I took a diffrent direction.
My hope is that some of my experiences / stories will help another person out.
Make them sit up and say
Hey….?

#286 JC on 09.26.10 at 7:54 pm

Garth

you are so right about the Canadian Realty market and the Canadian debt levels.
But if you can tell me how the USA will fianace their debt when you have guys like PIMCO Mr Gross demanding more compensation for risk then gold / silver not in a straight line but will move higher.

#287 TheBigLebowski on 09.26.10 at 9:22 pm

#288 Bill ( Peterborough)
Thanks for the link, matches exactly the conclusions I have come to with different sources. And the response you got pretty much plugs into the saying”Keep your friends close and your enemies closer”
Does our mediator know that Troudeau belonged to the communist youth party? We have already been taken over from within.

I hope you enjoyed your last post. — Garth

#288 dark sad person on 09.26.10 at 9:32 pm

#300 Dan in Victoria on 09.26.10 at 7:53 pm

#297 Bill ( Peterborough) on 09.26.10 at 6:36 pm

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

You guys are my favorite posters-
You always speak of wealth-
Real wealth–“earned”