Choices

Toby and Calvin and asking for advice. They live in Calgary, so instead of running to MissyBunny or realtor Nikki, they’ve come here. We are so unworthy.

The problem seems to be whether to live in Cowtown or move to Skatch. As usual, though, nothing is simple – and of course merely by asking for advice, thus couple will now receive a wholly embarrassing financial assessment.

Here’s the story:

We are both 40, 2 children – 5 and 7 years old.  We live in Calgary but are from Saskatoon, been here since 1999.  We own a nice home in a good neighbourhood, the home today is worth approximately $600,000 (on a good day if a greater fool puts money down on it).  We have $225,000 in registered investments, $26,000 in TFSA, another $24,000 in non registered investments such a flow through (which give us great income tax advantages).  We have a mortgage of $217,000 (prime minus .60) and have borrowed $80,000 (at prime) against the house which has been invested in flow through and mutual funds.  The $80,000 loan interest is paid by dividends from the investments so technically no cost to us.  We have little consumer debt, maybe $3000 (I added in my head).

I stay at home with the boys and my husband works in sales salaried at $103,000 with a 20% bonus structure (which we don’t count on but are very happy to receive if it so happens to be).

I’m ready for the slaying after you hear my question so don’t hold back.  Out of the blue my husband has a very good chance of getting a job in Saskatoon that will pay about the same or more then he is making now.  We don’t know what to do.  We are torn between staying in Calgary and plugging along or moving to Skatch where our families are and we would be almost mortgage free.  As you know housing there is stupidly over priced, I would venture to say almost more then Calgary.  Fast paced Calgary, more to do, more opportunity for the kids and us.  Slow Saskatoon, great University, family and lakes.

So my question is do we stay or should we go?  Do we up-root ourselves and venture into the unknown (sort of) or stay here and keep plugging.  We don’t want to ask people we know because they are biased so you are the deciding factor (ok, that might be too much pressure to put you under) how about you will be the one to tip the scale for us……

Any advice from you will be greatly appreciated as I am trying to live what you write (maybe not as eloquently).

Well, Toby and Calvin, let’s parse the numbers. You have $275,000 in liquid assets and $297,000 in debt, and it doesn’t sound like there are any pensions coming due in your household. Of your total net worth of $498,000 (assuming the house is really worth six large), about 77% is in real estate – way too much.

What bothers me is the $80,000 LOC taken out for mutual funds and flow-through shares. First, the cost of the loan is 4%, and the MERs on the funds are likely in the 2-3% range, which means the funds have to be torquing out a return of 7% or so to even be in the game. Second, the reason there are tax advantages for owning flow-through shares is the same logic behind incentives for buying labour sponsored venture capital funds – most of them are mongrels. If they were decent investments instead of high-risk sinkholes, the government would not have to pay you to own them. (There are a few exceptions, of course, but not many.)

So whether you move or not, I’d recommend dumping these puppies and paying off the line. Now your liquid investment assets are $195,000 – and I hope the RRSP and TFSA form a balanced portfolio of bonds, preferreds, REITs and ETFs, among other things, with a nice 40-60, fixed-equity mix. (This is what my own looks like, and grew by 14% this year, with major tax avoidance.)

I mention this because if your portfolio is not swelling by at least 8% a year, hubs is gonna have to start knocking off liquor stores in his spare time. First, you have two short people in your house who will be going to university in about 10 years. That should be worth between $100,000 and $200,000 over six years – pretty much wiping out what you now have. Of course, when they’re finished sucking off your money and on their own, you’ll both be in your mid-fifties, and have only a decade or so to prepare for retirement.

How much will that require? About $800,000 would be a nice amount, able to throw off roughly $50,000 a year in income – assuming it isn’t all in an RRSP tax bomb – which should be enough to supplement CPP. Will this be sufficient to live on in 2035? Probably not, but it’s a start, which means you’ll likely have to eat through all of the capital and leave the kids some flash drives to remember you by.

So what does this have to do with Calgary or Saskatoon?

Well, the average Cowtown house is now $455,000 and the average home in Skatch is $313,000. Calgary prices have declined 10% from the peak, while Saskatoon prices are up 78% from 2006. There’s no doubt that Potash City is over-valued, and you should expect to lose equity the day you move in.

Having said that, if you can actually find an idiot to pay you $600,000 now and relocate without a mortgage, then presumably you’ll have more savings to throw at your investment portfolio. Your financial salvation might have a better chance of actually being achieved.

But then, it’s Saskatoon. You’ll likely die early of frostbite, ennui or locusts.

Hope this helps.

156 comments ↓

#1 HouseBuster on 12.28.10 at 12:00 am

re: Nikki… I didn’t know you could do weight lifting with a camera…and..umm…she’s kind of scary looking

#2 Ben on 12.28.10 at 12:06 am

Wow… You make it sound like Toby and Calvin are just hanging on. I better head for the homeless shelter. lol

#3 Timing is Everything on 12.28.10 at 12:07 am

Toby and Calvin…

Who cares where you live? The main point is get rid of the LOC.

Oh ya….

http://www.faculty.de.gcsu.edu/~cbader/ghprecwithinsects.html

#4 Kevin on 12.28.10 at 12:16 am

You will find that comparable neighborhoods between Saskatoon and Calgary are not so far off in price as the average house prices from local realtor boards suggest. Both cities are over priced. But house prices should only be a small equation to moving.

I would say move to Saskatoon, but do not be surprised to see your house value fall. ( Same thing in Calgary, I guess)

#5 Willa on 12.28.10 at 12:28 am

Why not move to Saskatoon and rent for a while?

There’s more math needed here. Cities have a cost-of-living factor that goes beyond just house prices. In some cities, daily life (food, retail, transportation) is expensive. The city can also eat up all your time with hours of commuting, too many traffic lights, rush hour tangles, elbowing through crowds, and standing in queues just to get a grocery cart at the supermarket. Put a money value on your time.

Plus there are hidden benefits, such as (potentially) lower competition from other sales agents, which could lead to higher sales and faster promotions. It’s easier to be a bigger fish in a smaller pond.

A slower city is a much nicer place to raise kids anyway.

My two cents (guess what I would choose?)

#6 Freedom 55r on 12.28.10 at 12:36 am

Garth – Why aren’t you advising them to rent?

They read this blog. — Garth

#7 paleobotanist on 12.28.10 at 12:37 am

Dear Garth

What do you have against Saskatchewan? Just curious….

Too many visits. — Garth

#8 Citizenman on 12.28.10 at 12:39 am

Any city is what you make of it. We know people that have lived in Vancouver where there is always so much to do. They never did anything. I live in Regina and there are things to do if you want as there is in Saskatoon. I would actually favour Saskatoon for things to do. I have also lived in Edmonton and miss things there but I like the slower pace. If there is family in or around Saskatoon, that would be another bonus. As Garth metions all the time, rent for now and let the housing have a correction.

Another bonus here is that it does not take 45-60 minutes of driving to get everywhere. In a peak oil period that would be a great add-on as well.

#9 Best Place to be Deluded on Earth on 12.28.10 at 12:40 am

As a result of the over-supply the consultancy warns that prices will fall by another 20% on average over the next five years – 15% in cities and up to 30% elsewhere, including popular tourist areas on the costas.

Some firms are suspected of trying to talk up the ailing market. Valuer Tinsa says in its latest market report that some coastal house prices actually rose 2% in November. “I find that hard to believe,” says Mark Stucklin, an analyst who writes a guide for buyers

http://tinyurl.com/2eyy2le

#10 Page on 12.28.10 at 12:47 am

40 isn’t too old to learn the difference between ‘then’ and ‘than’.

Is this now a grammar blog? — Garth

#11 Kevin on 12.28.10 at 12:50 am

Garth,
Potash City?
Less than 1% of the working population actually work in Potash and live in Saskatoon.

Maybe Walmart City.
With 2 super centers and 1 big center, Walmart employs more people that live in Saskatoon compared to Potash.

Here is a link of a mineral resource map of Saskatchewan.

http://www.sreda.com/maps/Natural%20Resources/Sask%20Mineral%20Resources%202008.pdf

#12 Nostradamus jr. on 12.28.10 at 12:51 am

“”NEW YORK (CNNMoney.com) — The former president of Shell Oil, John Hofmeister, says Americans could be paying $5 for a gallon of gasoline by 2012″”

…Move back to the major cities, use public transportation

“”I see no proof there that public sector salaries are triple those of the private sector. In any case, if you think the cost of government is our biggest economic concern, you are lost in the forest. — Garth””

…The Private Sector economy died in your own province of Ontario…so whatever the premium is, being paid to the Public Sector is ok with you Garth?
Does that also include Public Sector Pensions?

Nostradamus jr.

#13 Jon B on 12.28.10 at 12:52 am

My advice: first learn the difference between the words “then” and “than” and how each is used in a sentence. Once accomplished you can move on to figuring out the move to Skatch or not issue. I can’t stand grade 2 spelling among adults.

#14 T.O. Bubble Boy on 12.28.10 at 1:04 am

Sell in Calgary, rent in either Calgary or Saskatchewan.

Since the kids are now in school full-time, look at getting a job, and the second income should help pay for university for both of them.

Overall, for 40 years young, they aren’t doing too badly… especially on 1 income!

$26,000 in TSFA means that they’ve made $6000 (+30%, or about 20% per year since they would have only had $10k the first year), which is great — much better than the 1% most Canadians get in a TFSA savings account.

#15 rog on 12.28.10 at 1:05 am

How come so many people make more than me and be so dumb .
Huge income like and has no idea and what to do with It.
How did you land a great job and be soooo dumb

#16 Utopia on 12.28.10 at 1:10 am

Yes, that damn ennui. Watch out for the ennui people. Stay away from Saskatoon. It is very, very dull here. Did I mention how boring this city is? Well you Calgary folks should know better anyway. We have the ennui here, doncha know. And it is catching!

#17 T.O. Bubble Boy on 12.28.10 at 1:12 am

I’ve called it before on this blog — the condo market in Toronto is officially dead (thanks to over-supply). It looks like we’ll see a flood of new condo units hitting the market in Yorkville:

http://www.blogto.com/city/2010/12/a_condo_explosion_is_on_the_horizon_for_yorkville/

#18 Timing is Everything on 12.28.10 at 1:16 am

#10 Page
#13 Jon B

Whatever.

#19 Mean Gene on 12.28.10 at 1:23 am

Do these people have any life insurance, being this is a single income family… and no I am not selling it.

#20 nonplused on 12.28.10 at 1:23 am

Even dogs think a kitten is cute.

Good advice as always to this couple Garth, but you neglected to touch on job security. We know nothing about how the new job really measures up to the old job. If hubs is racking in $120g a year now and fits in to the organization well and has job security, we have to look at the new opportunity with some scepticism. But if he hates the old job perhaps now is the time to move.

It’s that old “devil you know” thing. These days a good job paying $120g a year is perhaps your most valuable way of monetizing your most valuable asset, which for most people is their time.

It took me a little while to figure this one out, but here it is:

The amount of time you spend on your investments should be proportional to the income you receive on your investments versus the income you receive from your job. In this particular couple’s case, the lion’s share of the income comes from the husband’s job. Investments should take up no more than 8 hours a week, probably a lot less since so much is in the house.

That’s why I now get a kick out of all these people day trading $20,000. You are wasting valuable time that could be spent improving your lot in the work world!

I even get people at work coming up to me to discuss their fantastic returns (I am known to have dabbled in the market counter-intuitively with some success) on their favourite junior that they said I should have bought. And they are up 100%! Well, that’s great, but what did you have in I ask? “$5000”! See, I don’t have time to look at stuff $5000 at a time. It may be a great investment but if I can’t justify the time evaluating the company versus how much I would commit, then I just can’t do it. Heck, I’ve got $5000 worth of ski equipment lying around here for me and mine, and the other 4 picked out their own, not me!

So anyway, my 2 points of additional points of advice for this couple are: 1. Evaluate the pros and cons of the new job versus the old job carefully, and be careful that you will get what you are promised in the land of the mosquito that looks like a remote control helicopter, and 2. Just implement a Garth portfolio, since you don’t have time to figure it all out yourself at a good “cost of time versus income” payback.

PS: So why do I spend so much time responding to Garth’s posts? Surely that is a waste of time! Truth be told, I do it with a glass of wine in the other hand, late at night when nothing is going on. And real estate was a significant part of the portfolio at one point, and will be again I presume one day, although living in the RV following the sun is looking ever more cost effective. Plus the anonymous blog responder platform is a good (and narcissistic) way to rehash one’s thoughts. If anyone else benefits, which I doubt, great, but I don’t even think anybody is reading this drivel. I used to get a few comments, but now just name callers. I have little time for name callers. You’ll draw me in once if I think you can be helped or we have a misunderstanding. Call me names twice and you are on your own. Attack the premise at will of course. Nobody’s opinions are exempt from criticism. Not even Garth’s. But do not attack the man. Attack the idea. And don’t use words like “stupid”. Show how the idea is wrong with facts and rational arguments.

#21 Amarillo on 12.28.10 at 1:38 am

I could never move to a province that has elected NDP governments so often. I know, they finally voted the NDP out. But moving to Skatch could be like marrying the fat chick who’s enrolled with Herbal Magic — you just don’t know what things will look like in five years.

#22 Nostradamus Le Mad Vlad on 12.28.10 at 1:43 am


Whatever choice Toby and Calvin make, it will be the end result of how they will adapt to change as a result. Must also factor in the children, ‘tho they are remarkably resilient and can adapt quickly.

We used to enjoy life in the fast lane in Toronto, but now we’re teetering old farts, the Okanagan has a nicer, gentler pace of life.

You are right, of course. Ditch the LOC and pay down / off debts ASAP.
*
GW? Mt. Washington (Vancouver Island) receives 2 1/2 metres of snow in 48 hours. Still coming down. Plus — 4:07 clip Brit. weatherman kills the GW cults’ ideology.

Not so Rare Earth Minerals.

H1N1 Now Japan, Taiwan and Iran all match the same cluster as the UK.

Change Jobs He has become quite successful at the new job.

Hypocrisy Uncle Sam still doing plenty of business with Iran. Bluster bash one thing, do another.

Slowly but Surely Implementation of martial law.

India and China — aka Chindia.

War has always been profitable for the elite. Most are well aware that all sides are equally funded. Here are The Workers (Drones).

#23 beyond neanderthal on 12.28.10 at 1:44 am

No one can predict the future. Yes, of course the Garth is a much better guide for the future of your life than your own internal indicators could ever possibly be and of course that unreliable bipolar thing – what’s it called? intuition?”Don’t pay any attention to that man behind the curtain. I am the great and powerful oz. (I am) Bring on a failed politician to guide the course of your life. And since when do you pay for your University. I bet your parents rolled out the wad for your education? Right there Garth. Bank of Mommy and Daddy showed up to finance your post-grad?

#24 GBoomer on 12.28.10 at 1:53 am

#13 Jon B. wrote:

“My advice: first learn the difference between the words “then” and “than” and how each is used in a sentence. Once accomplished you can move on to figuring out the move to Skatch or not issue. I can’t stand grade 2 spelling among adults.”

Well, well, well. I spent 37 years as an educator, have degrees from two different universities and have published extensively. I learned a long time ago that it was not necessary to correct obvious spelling and syntax errors committed by adults. What is the point?

To illustrate your contention, I am about to use the word “urine” in a sentence:

Urine insufferably pompous stuffed-shirt.

Incorrect usage to be sure, but you get my meaning.

#25 Miss. Adventure on 12.28.10 at 1:55 am

The BF and I were out Open House hunting in the South West (expensive) part of The ‘Peg in July. We happened upon a nice, but way over-priced two story listed at $400,000. Oh well, everyone is allowed to dream, and who knows, they may have snagged a Greater Fool. Forward 5 months to last weekend and the BF grunts “Wikileaks Task Force”, the house we saw is listed in the Sold section of the Free Press. He’s annoyed. The house is pictured with an Asking Price of $359,900 and a Sold Price of $352,500. It looks like the house got a New Price afar we saw it. The BF, who is cute, but not that bright, thinks something is not right. Anyone reading the paper would think the Agent got the owners 98% of the asking price. Not bad for a slow market. But, using the New Math skills he acquired in public schools, he says they really only got 88% of the asking price. I replied this goes on all the time. The Agent has just got his name in the paper and some great free advertising for doing a poor job of selling the house.

My only thought was for the owners of the house probably listed with the Agent because he promised them he could get them $400,000. “With that much for your old house, why not just add another $50,000 to your current mortgage and get the house you really deserve?”. So now instead of an additional $50,000, they owe and additional $100,000.

#26 PPP on 12.28.10 at 1:56 am

Poor Tobi should of known some wanka would comment on her grammar.

#27 Bottoms_Up on 12.28.10 at 1:58 am

Do you like your respective families? If so, move. If not, stay. Does your husband like the offer? If not stay.

ps. congrats on your financial situation. imagine if you were both 30 right now and starting out, where would you be living and how would you get ahead? thank your lucky stars for the position you’re in.

#28 Thetruth on 12.28.10 at 2:07 am

Record high gas prices in Canada. Never been higher during Xmas. How about food?? Copper? Gold? Dirt?

And all the talk about deflation… Ever hear about coordinated currency devaluations?? Asset prices keep on rising!

#29 Thetruth on 12.28.10 at 2:13 am

And can anyone answer this question pleeease?

If a 5 year fixed rate mortgage in Australia is 8% (yes eight), then why have house prices continued to rise there??? Does Canada really have to worry when we see what is happening in Australia?? WHY ARE WE SO DIFFERENT?

#30 Jerry on 12.28.10 at 2:16 am

Garth, you always identify a portfolio of 40/60 (with the majority in equity) as the most effective arrangement.

Just curious: are you suggesting that is the correct weighting regardless of one’s age?

Of course not. It’s an example of balance that works for many. — Garth

#31 Subversive on 12.28.10 at 2:31 am

I’m thinking the real estate/mortgage brokering business can’t be that hot…

http://www.nikkiportraits.com

In all seriousness though, thanks for all your work on this blog, Garth. My wife and I are moving the right direction with our finances, and in a hurry, thanks in large part to the advice you dispense here on a regular basis. I’m interested to see what the future holds, hopefully not the doomsday scenarios many of the posters here seem to get so gleeful about. In any case, I feel we’ll be better positioned to deal with whatever comes than we would have been. Thanks again.

#32 Jeff Smith on 12.28.10 at 2:41 am

Being an x-gen I never really thought much about retirement. But seeing some of the calculations you presented got me thinking, and I am scared. I think we (x-gen) are in deeper trouble than we realize.

#33 Jeff Smith on 12.28.10 at 2:42 am

>#10 Page on 12.28.10 at 12:47 am
>40 isn’t too old to learn the difference between ‘then’
>and ‘than’.
>
>Is this now a grammar blog? — Garth

grammer police!

#34 Temporarily renting on 12.28.10 at 3:00 am

I’ll repeat the question from 6 above – why not rent for a while? I have only started reading recently and plan to move back to Canada next year. My intention has always been to rent (in Toronto) for at least a year or three. Garth please explain what is wrong with this family renting for a few years at least? I could pay for a house with cash tomorrow if I wanted to and renting is a lifestyle / financial choice for me. I did the math and renting won. If I need to read your book to get the answer so be it, but really I think an answer to number 6 question would be nice for us newbies to your blog.

#35 Mark on 12.28.10 at 3:14 am

Saskatoon is one giant bubble. Very few good quality jobs, tons of university grads chasing everything. High taxes, poor quality schools and healthcare. Stay the heck away, even Calgary will retain its value better, IMHO.

#36 Temporarily renting on 12.28.10 at 3:14 am

What if they move there and the new job doesn’t work out? What if the kids hate it there? Garth you are advising these people they must buy the minute they set foot in the province, even though you said yourself they will lose equity as soon as they get the keys. And for how long after that will they continue to lose equity, three years? Five years? And then we have interest rates facing nowhere to go but up? So you are basically saying it is always a good time to buy a house? Hmmmmm…..

What a foolish comment. — Garth

#37 Jody on 12.28.10 at 3:22 am

“In any case, if you think the cost of government is our biggest economic concern, you are lost in the forest. — Garth”

uh, yea! The cost of government is what got us into this mess in the first place. What’s about to happen in the US? Dozens of major cities will default on their bonds, then the shit will really hit the fan. The “average Joe,” cannot afford to support the government pigs at the trough anymore, especially when it comes to public pensions, a timebomb in the making.

Federal governments can print money but provinces and municipalities can’t. The fiat currency/private banking scum era of screwing the little guy is over with, they got greedy, screwed it up and now a major financial collapse is looming. Governments will not be able to inflate/deflate their way out of this mess for their banking buddies. Do you really think when people are hungry, losing their home and out of a job they will want to be told they need to pay more tax to “save society(pay big bonuses to private bankers)?” Nope. They see bankers getting millions of dollars in bonuses and are very pissed off, almost pissed off enough to encite and commit acts of violence/to riot, and some people think things will keep going as is and everything will be fine? Really? There is a webcam just for the riots in Greece, riots are going on all over Europe but why would the msm in NA report on that? Politicians in Ireland and Greece have been assaulted, people aren’t stupid, they know when they have been robbed/fleeced. People have been bent over and done up the bum, the SWHTF.

The only way of making sure this does not happen again will be to get rid of the fed, get rid of fiat currency. Look at what China is doing, they are buying up assets that will be worth something in the future, gold, silver, mines, oil sands etc. They are dumping their US dollar reserves as quickly as they can. What do you think the missle off of California was hmmm? It was a message to the US, stop devaluing your currency, as China wants a decent return on its investment. Why do you think the yanks are getting the Koreans to conduct military exercises so close to the border? The pricks want a war, the US leadership should be dragged out into the town square and hung from a tree just for thinking about that crap. Those yankee dinks are going to take us into WW3 just so thier currency won’t collapse. I curse them and hope they all get a terminal illness.

#38 The Original Dave on 12.28.10 at 4:03 am

early 30’s here. These situations are so easy to decipher. It’s as if some of these people don’t think.

Not once did this woman mention anything about renting a place. It doesn’t matter if she’s in Calgary, Saskatoon, Toronto, or Tokyo, they can’t afford real estate in their situation. Not enough savings, and not enough income to substantiate a purchase in this market. If she doesn’t see this, she’s doomed.

People would KILL to be in that situation. Taking $500k -$600k and allocating it in the proper places to provide income, provide a nestegg, provide something for your children is a no- brainer. Why is this difficult for people?

Lady, get over the obsession of owning real estate for the time being. In a couple of years, after renting and saving money, you can re-purchase a house at a much more sensible price. Get your finances in check. You have kids for crying out loud. You’re not a single mother with no access to information and education (like this blog). You’re priviledged. Harness that. A lot of people don’t know what’s coming, so they’re tough to scrutinize. I’m sorry, a bad decision on your part would be to continue on your current route – whether that’s in Saskatoon or Calgary. The main issue is that you shouldn’t be owning a house considering the little savings you have, the 1 income, your age, and your 2 dependants.

By the way, I back up my opinion. Recently married, we have a lot of savings, investments are doing well, WE ARE RENTING here in Toronto. We continue to be rewarded financially because we pay attention to the information available to us and we apply that information. Don’t neglect Garth’s biggest message on this blog. I’ll bet my marbles you’ll pay a hefty price if you bite more than you can chew.

#39 Devil's Advocate on 12.28.10 at 4:25 am

People are still buying. They’re just looking longer and harder for their best value. Ain’t nothin’ wrong with that.

#40 Devil's Advocate on 12.28.10 at 4:53 am

It’s a game… it’s all a game. Respect and enjoy your opponents for without them there is no game. Learn from them as, no doubt, they are from you. As in all lifes adventures it is not the destination but rather the journey… enjoy the game because when this one is over… it’s over.

“While I thought I was learning how to live, I have been learning how to die” – Leonardo da Vinci

“The fear of death follows from the fear of life. A man who lives fully is prepared to die at any time” – Mark Twain

#41 Jim on 12.28.10 at 6:24 am

Garth what is this new passing the buck between F and the banks about credit avalibility? Or is this some kind game they are playing? Were is this going to lead?

#42 Drew on 12.28.10 at 6:27 am

By all means, if the opportunity comes, why not make the move since it sounds like a better gig? That said, why buy when you know it’s a losing proposition? Why not plan on renting for the next few years?

#43 Nostradamus jr. on 12.28.10 at 7:44 am

Vancouver…World’s “Greenest” City by 2020

Ten specific targets…

http://talkgreentous.ca/goals.php

Nostradamus jr.

#44 Aussie Roy on 12.28.10 at 8:20 am

This is a VERY long report, so at first I was reluctant to post it. However I thought its 120 pages might be of interest to some.

This report is “The Proof Committee Hansard” (Aust govt Senate enquiry) on Australias banking system.

http://www.aph.gov.au/hansard/senate/commttee/S13372.pdf

A little off topic here, but it never hurts to think outside the box. What about spending some money to reduce the ongoing costs of living. Firstly I admit I dont know what might work in Canada but it might just get you thinking.

Energy costs, Solar power (the sun does shine there doesnt it – tongue firmly in cheek), wind power, converting your car to nat or lp gas). My point being sometimes a great way to have more money is to reduce your living expenses with some infrastructure. Just do the sums before you spend.

I have a 5kw solar array, 4 500 watt wind turbines and pay 60 cents a litre (Gasoline is 1.40 a litre here) to fill up my RV. I no longer get a bill from the electricity supplier, I get a check instead.

#45 Oasis on 12.28.10 at 8:48 am

“”I see no proof there that public sector salaries are triple those of the private sector. In any case, if you think the cost of government is our biggest economic concern, you are lost in the forest. — Garth””
_________________________________________________________

there is no question that public sector workers are grossly overpaid for what they do. you can go across the board on that. add up hourly pay, health benefits (which by the way, as INCREDIBLE), and pensions. compare the SAME job, to someone working in the public sector. there is NO comparison.

government is the CAUSE of our biggest economic concerns. like our friends Bart Carney and Flapperty. who do you think caused this mess?

on NO, what’s going on today? Gold nearly $1400 again, and the USD tanking? what a shame.

#46 Mikey the Realtor on 12.28.10 at 9:17 am

“People are still buying. They’re just looking longer and harder for their best value. Ain’t nothin’ wrong with that.”

Of course their still buying, the buying wont stop as we have some great opportunities all over the country. You want to do some skiing today DA? I have a couple of clients lined up early in the morning but I’m free after that.

#47 Willa on 12.28.10 at 9:55 am

Amarillo –

If Sask has elected NDP governments “so often” and the world hasn’t ended for them in all that time, why worry about it now? It sounds as if the Sasks manage their NDP governments just fine.

Remember that federally, Sasks tend to vote Conservative. Its not unusual for them to have an NDP prov gov and all Con fed reps.

That’s not reckless. It’s refreshlingly balanced.

#48 Moneta on 12.28.10 at 9:58 am

The main issue is that you shouldn’t be owning a house considering the little savings you have, the 1 income, your age, and your 2 dependants.
———-
On a single income of 120K per year, her home should be 350K or less. Anything beyond that is looking for trouble.

She has a lot of options but lifestyles and mindsets are sticky.

#49 Macrath on 12.28.10 at 10:00 am

#29 Thetruth

An Aussie 5 yr Gov. bond pays 5.5% and the ASX200 pays dividends around 4%.

CDN 5 yr 2.4% and the TSX pays in the 2% range.

We are both sticks and stones economies so why the huge discrepancy? Asian influence vs US (Goldman Sachs) influence perhaps.

Maybe Aussie Roy can help.

#50 MadMan on 12.28.10 at 10:03 am

Geez, each of the Public Sector Haters on here must have some sort of back story as to why they are so bitter. Are there specific public sector positions that offend them? Weird.

Here in Ontario, the salary of any public worker who makes over $100 k is posted online. Awesome money for sure but, I know some of these guys and I bet you wouldn’t want or physically couldn’t even do their jobs. The richest people I know either work for themselves or work in the mining industry. Stop the hate and let’s get back to RE puhleez!?!

#51 Moneta on 12.28.10 at 10:10 am

government is the CAUSE of our biggest economic concerns
———
Yes and government is also the reason why we are not living in caves. Pooling of interests and fiat lead to specialization. And specialization leads to technological advances.

Every day, I am amazed that we can be 7 billion on this planet and actually live how we live! That things actually run as smoothly aas they do. I’ve been in committees, and meetings and have witnessed first hand how hard it is to get consensus or things moving.

It’s amazing that anything actually gets dones at all! Do you really think we could be 7 billion without some form of government?

Perhaps all you government bashers could tell us how to create and manage a perfect currency and how to lead 7 billion people living in a world constrained by an unfair distribution of resources.

#52 David B on 12.28.10 at 10:25 am

“If in doubt, don’t” ….Say put and pay the LOC off ASAP … all your home town dreams are speculative and Calgary is real.

#53 Aussie Roy on 12.28.10 at 10:28 am

GBoomer on 12.28.10 at 1:53 am

“Urine” that reminds me of an Aussie joke.

Teacher in class says those who can put a word I say in a sentence will get to go home early.
Teacher says Urinate.
Little Roys hand goes straight up in the air (teacher is a little confused because Roy is a little bit of a terror). Teachers says yes Roy. Roy says, “my dad reckons urinate (your an eight) but if you had bigger lips you would be a ten”. Boy did I clean that up for this family blog….

Thetruth on 12.28.10 at 2:13 am

You asked this same question in a different way a few days ago, go read my reply and the links I posted.

“If a 5 year fixed rate mortgage in Australia is 8%”.
FYI 95% of Aussie mortgages are variable rate loans.

BTW does anyone else find it funny that some people so desperately seek credibility for their opinions they have to choose blog names which try to imply some predictive power or imply they are the holders of the only truth.

#54 David B on 12.28.10 at 10:42 am

CHICAGO — Through a combination of procrastination and bad timing, many baby boomers are facing a personal finance disaster just as they’re hoping to retire. Starting in January, more than 10,000 baby boomers a day will turn 65, a pattern that will continue for the next 19 years.

——————————-

Hello Canada.

#55 Leanne on 12.28.10 at 10:43 am

This is definitely not my grammar’s blog, although she might enjoy some of the pictures (eg. Guitar-Boy).

#56 yt on 12.28.10 at 10:45 am

I think the couple will have an easy time deciding where to live if they read the article in the globe and mail business section entitled: Oilsands to outsource 40-60% of jobs(to India).

Lets see, first Alberta gives away 75% of their trees to offshore owned pulp and paper mills. Then despite having royalty rates in the bottom 5% in the world on oil and gas is currently building pipelines to the U.S. to ship raw bitumin thus no longer needing any upgraders in Alberta to do primary refining. Now anybody in the industry that doesn’t get their hands dirty will lose their job to India. The article didn’t mention jobs outside the tar sands itself, but how many jobs in Calgary and Edmonton will go too? Not to mention the rest of the economy that depends on the oil industry.

If Alberta is the engine of the Canadian economy and looks like it could easily become the caboose then what kind of train wreck are we all on?

#57 T.O. Bubble Boy on 12.28.10 at 10:50 am

@ #43 Nostradamus jr.

wrong kind of green… they are targeting to have the most pot.

#58 dark sad person on 12.28.10 at 11:09 am

#20 nonplused on 12.28.10 at 1:23 am

If anyone else benefits, which I doubt, great, but I don’t even think anybody is reading this drivel. I used to get a few comments, but now just name callers. I have little time for name callers. You’ll draw me in once if I think you can be helped or we have a misunderstanding. Call me names twice and you are on your own. Attack the premise at will of course. Nobody’s opinions are exempt from criticism. Not even Garth’s. But do not attack the man. Attack the idea. And don’t use words like “stupid”. Show how the idea is wrong with facts and rational arguments.

***************
Always read your stuff but seldom comment because i seldom disagree and besides i’m usually up to my ass in alligators with the name callers you mention-
The foolish ones who look at daily or weekly micro moves and start screaming that a trend has developed and try to defend their positions by hurling insults but that only exposes their lack of maturity in all things market related-
I see the USD is down .50% today–omfg

#59 S.B. on 12.28.10 at 11:17 am

Lack of education is a part of the problem: you can spend 20 years in school – from JK to a Masters – and still never learn how to make money. You will accumulate plenty of debt though. I think we are led into a servitiude class/caste of obedience.
———————————-
Released Tuesday, the U.S. Conference of Mayors 2010 Status Report on Hunger & Homelessness in American Cities — in their annual assessment of 26 American cities — has tallied a 9 percent overall increase in the number of homeless families in the U.S in the past year. Fifty-eight percent of the cities analyzed showed an increase in family homelessness.

http://www.huffingtonpost.com/2010/12/22/homeless-families-increase_n_800040.html

#60 T.O. Bubble Boy on 12.28.10 at 11:30 am

First the Olympic Village debacle, now another poorly planned example of financial waste (and lack of basic math skills) from Vancouver:

http://fullcomment.nationalpost.com/2010/12/28/adrian-macnair-in-vancouvers-new-math-9-million-is-worth-more-than-170-million/

#61 BrianT on 12.28.10 at 11:39 am

#51Moneta-Might be a good time to climb out of your bubble-there aren’t 7 billion people living like you live, there aren’t even 100 million people worldwide living like you live.

#62 grantmi on 12.28.10 at 11:43 am

More double dipping in the US housing markets!!

Here’s the Case-Shiller numbers today!!

http://bit.ly/dMYhqO

and……….

David Rosenberg, chief economist at Gluskin Sheff, tells CNBC another decline in housing prices is being underestimated.

http://yhoo.it/h5sJQm

#63 JBP on 12.28.10 at 11:43 am

We did what this couple is considering doing. I retired in Edmonton and after a couple of years there we moved to Saskatoon where my family lives.

It took two long, hard years but we finally managed to sell our house there and to move back to southern Alberta where we belong and are happy, happy.

Our property tax bill went from $2.8K/yr in Edmonton to $11K (yes, ELEVEN THOUSAND dollars) a year in Saskatoon. Our car insurance was almost double in Saskatchewan. As retirees we had no one to “play with” – the average retiree there comes from a generation before Saskatchewan’s economy picked up and they don’t have the disposable income for non-essentials.

Every day when we read the local paper our stomachs knotted as we read about strikes, union drives and editorial condemnation of any politician who wanted to make Saskatchewan “more like Alberta”. The lean to the left is palpable and permeates all aspects of life there.

It drove us nuts that the folks there see no problem with the government being in the business of retailing beverages. I was told that it was wrong for Alberta to allow anyone at all to open a liquor store since government run stores were one of the few ways for university graduates with degrees in history to get a good paying, unionized job.

The biggest difference between the two provinces is that in Saskatchewan Robin Hood would be considered a hero while in Alberta he would be regarded as a shiftless thief.

#64 dark sad person on 12.28.10 at 12:05 pm

#51 Moneta on 12.28.10 at 10:10 am

Yes and government is also the reason why we are not living in caves. Pooling of interests and fiat lead to specialization. And specialization leads to technological advances.

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

You’re joking right?

I say we’re not living in caves despite governments-
I’m not anti government btw-i just believe we would be much better off with a monetary system that can govern governments and they can get their stupid asses out of trying to control the markets-
What’s happening today is a prime example of what government/central bank interference in the market has caused-
Governments should be about protecting the laws of the land-not making them up as they go along to suit their failed corporate/banker buddies who help them buy votes-
They have no friggen clue where interest rates should be-if they did-this credit bust never would have seen the light of day to begin with-
Who knows where rates should be set?
The market knows-

#65 Herb on 12.28.10 at 12:09 pm

For all our repetitors of the “reduce the PS and cost of government” line …

Repeating a political mantra does not make it real. Just because you think that “there is no question that …” does not mean that there is no question. Stop the bleating and produce the facts.

Considering the number of “commenters” repeating neo-Republican talking points, Garth’s humble RE blog must be a political threat to Harper “Conservatism”. The “coincidental” synchronization of the MSM (such as the Post and Sun newspapers) with the internet does cover a lot of propaganda bases, and Garth outlining the economic minefield real estate has been turned into by government policies is dangerous.

#66 MEL EAGER on 12.28.10 at 12:11 pm

#31 Subversive,

Hi, you said you are having success?

What have you invested in, and in what allocations?

Cheers,

Mel

#67 Basil Fawlty on 12.28.10 at 12:13 pm

Something that is as regular as clockwork, is the number of people who blame government employees, when the economy takes a downturn. The financial sector and some industries received the largest bailouts in history, in the amount of trillions of dollars. Yet, many short sighted fools never complain about this, nor do they consider the massive tax cuts initiated in Canada and the USA. In addition, they completely ignore the subsidies handed out to the largest and most profitable corporations on the planet.
I can just see you shnooks getting all constipated over this one and thinking “I’m a free enterpriser”. Well, I’d say “Good on yeah mate”, however it’s only free markets for the middle class and below. The 1% in the US that controls 16% of the ,operate under another system called socialism and to them we are nothing, but pleebs.
Imagine this schoolyard scenario. The bully convinces me the future civil servant and you the aspiring free market adherent to fight one another, then he steals both our lunches. It keeps his suit clean.

#68 Page on 12.28.10 at 12:21 pm

#13 – Excellent point.

#18 wrote: “Whatever”

Is that whatever ‘then’ or whatever ‘than’?

#24 wrote: “Well, well, well. I spent 37 years as an educator, have degrees from two different universities and have published extensively. I learned a long time ago that it was not necessary to correct obvious spelling and syntax errors committed by adults. What is the point?”

Well, well, well, if ‘yore’ not part of the solution, ‘yore’ part of the problem. Incorrect usage to be sure, but you get my meaning.

#26 – “Poor Tobi should of known some wanka would comment on her grammar.”

Is that anything like “TobY should HAVE known”?

#33 wrote: “grammer police”

Grammar, please (unless you’re talking about Frasier)

Garth wrote: “Is this now a grammar blog?”

Ha! You wish.

#69 rosie on 12.28.10 at 12:21 pm

Your investing advice, although profitable this year, confuses me. On the one hand you advise bonds, preferred, reit’s and etf’s among other things while on the other hand the news in the states and elsewhere is not looking very good. China is in a real estate bubble, hence higher rates. Europe is having major debt problems which are not going away. Canada is in the puncture stage of a housing bubble and Canadians are in debt with record amounts and at record numbers. The U.S. consumer is gun shy, their housing is still dropping in value, their currency is under assault, their doing by the way, their job market is being exported or eliminated altogether, yet you continue to advise what some say are risky alternatives. I read many sources daily, and only a small few are suggesting anything that even comes near to your investing strategy. Bonds are risky because of real interest rates. Stocks are overbought, probably with Fed paper. Real estate is on the cusp in Canada, including commercial property. Could you justify your strategy and how it might look going forward.

Then keep your money in your lingerie drawer. Good luck. The essence of balanced investing is just that – to have multiple asset classes plus active management to ensure you are one step ahead of events while reaping current opportunities. You could have made the same comment last December, and missed an excellent year for returns. — Garth

#70 Moneta on 12.28.10 at 12:24 pm

BrianT on 12.28.10 at 11:39 am
#51Moneta-Might be a good time to climb out of your bubble-there aren’t 7 billion people living like you live, there aren’t even 100 million people worldwide living like you live
————
We all have a world view. Perhaps mine is off kilt but frankly, I don’t anything in your comment that helps me see the light.

#71 Dan on 12.28.10 at 1:06 pm

Power of sales is spreading through Brampton and now hitting other parts of the GTA as the housing crash continues to spread. BTW Brampton RE board has still refused to put out horrible sales numbers since September of 2010. Word is power of sales have increased in other parts of the GTA like in Miltion and mississauga . In the news you are seeing increased home “fires” of homes that were unable to sell. Watch for more home “fires” in the news as the housing crash continues to get worse. Driving throught the GTA you see an endless amount of for sale signs with the odd sold sign that’s been sitting up for MONTHS as realtors need to keep the propaganda going that homes still selling when in fact they are not. The house of credit cards is starting to fall and fall hard. Word is the government can not keep this ponzi going and will change the rules which will crash housing worse then the 90’s housing crash. Many realtors will need to find real employment. People are maxed out and need to sell before they go bankrupt like so many have in Brampton and now other parts of the GTA. Realtors are worried 2011 is going to be a bad year. Everyone in the biz is worried.

POP…………..

Realtors……….It`s going to be a bad year in 2011

Greater fool…………..FU realtor scum I am finacially ruined because of you lies. I have gone bankrupt and my home is now a power of sale.

#72 rosie on 12.28.10 at 1:12 pm

Reply to # 69 comment by Garth. Do you know any good active managers in the Niagara Region. I have made good returns over the last few years. I got out of the market in Jan 08, bought a lot of gold and am up 55% on that portion. Not a lot of profits on the bulk overall, but I have not lost any money either. Knock on wood.

Email me to chat, [email protected]. And take those gold profits. — Garth

#73 ken on 12.28.10 at 1:15 pm

Low interest rates =greed, corruption, bubbles and inflation. It is the core begining and cause of most of the troubles today. They never seem to learn!

#74 UrbanCowboy on 12.28.10 at 1:24 pm

Gold up $23 thus far today still in the dead of the xmas season. Good indicator that 2011 won’t be off to a good start in terms of economic health.

#75 David B on 12.28.10 at 1:26 pm

Not sure why, but Canada is buying more and more USA debt while China is selling. Could it be our Reformers are even more USA friendly than we thought.

http://www.guardian.co.uk/news/datablog/2010/mar/09/china-federal-deficit-us-america-debt

And we are about to pay 2-3 times for F’35’s than they are worth

http://www.bloomberg.com/news/2010-11-01/pentagon-said-to-see-higher-f-35-costs-delays-up-to-three-years.html

So become a Greater Fool in 2011 … it could be trendy if y’all believe in Reform.

#76 ken on 12.28.10 at 1:28 pm

The bank of canada and the fed are losing their credibility or have already lost it in the general population of north america, over the last ten years they just did not get it. In my opinion.

#77 Devil's Advocate on 12.28.10 at 1:35 pm

What is it that people must blame government for what ails the economy? A democratic government is nothing more nor less than a reflection of the society which it serves. I would go so far as to say any government is a reflection of the populace.

If you are not a part of the solution you are a part of the problem.

That government bailed out sectors of the economy as being “too big to fail” is indicative of what is important to us. Business does not grow to be “Big Business” without significant and continued patronage and to achieve that you must give the people what they want.

Is it where the buck stops or where the buck starts? I believe where the buck starts is where it stops for every dollar you spend is a vote in support of that entity to which you pay it. Everything is worth what the market will bear be it housing or government employee salaries. If you disagree don’t pay it. Withhold your voting dollars from those entities you do not favour. If enough people feel the same way soon those entities will cease to exist. On a grander scale – run for public office for those who do not get involved in politics are destine to be governed by their inferiors.

At least get out and vote. If you don’t at least do that you have no right what-so-ever to complain about a government which is not what you want it to be.

What a pathetic society of lard asses we have become… is it any surprise? Are you so surprised that you are being taken advantage of? Yes you! Making a comment like that I know I’ll hit at least 75% of the correct target because at least 75% of Canadians are fat, lazy, pathetic cry babies. And because of that all most of us have to do to succeed is show up! You don’t even have to be particularly good at what ever you do just make a reasonable effort and there is little or no competition. No wonder so many feel like shepple being led to slaughter… that is exactly what they are!

If you don’t like it rise up and do something about it!

Democracy… think about it… If you give them the power they will use it and eventually, if an apathetic society does nothing to stop them, abuse it. In a free and democratic society you can take that power back but only for so long as, if you neglect to exercise your democratic right, you will soon loose it.

#78 Fuzzy on 12.28.10 at 1:40 pm

Two quick points:

1) I think the evaluation for $100,000 for education is at the very, very high end. I’m sure there are more cost effective options.

2) It’s been stated many times here: we are in an era of deflation. Hence cost of living in 2035 will not be as massively inflated compared to today as people think. Deflation will bring other risks, but higher cost of living is not one of them.

#79 Off-Gridder on 12.28.10 at 1:42 pm

I am really not sure why people expect or assume their parents should foot their university bill. Better be something in it for the parents no?…

#80 kitchener1 on 12.28.10 at 1:47 pm

Gonna have to go against the grain here.

Why would the parents have to pay for their kids education?

My parents never paid for my Univeristy, I never expected them too.

These folks would be insane to wipe out there future savings to pay for there kids education.

Why is this becoming an expected part of being a parent? When did this change? Are parents also supposed to buy their kids cars and pay their insurance as well when they turn 16.

Its something that is nice to do if you have the means available but not a must.

#81 Derek on 12.28.10 at 1:59 pm

#28 Thetruth wrote

Record high gas prices in Canada. Never been higher during Xmas. How about food?? Copper? Gold? Dirt?

And all the talk about deflation… Ever hear about coordinated currency devaluations?? Asset prices keep on rising!

There’s some real confusion in those two paragraphs. Gas, food copper, etc. are all commodities, not assets. Commodities get consumed, assets don’t. And sure, the commodities are going up in price. That’s one of the reasons that assets are going down in price, particularly Real Estate. In hard times when people have to spend more on essential commodities they have less to spend on buying/renting assets, so asset prices drop. That’s just common sense.

Governments can try to change things via QE, co-ordinated currency devaluations or whatever, but in the face of the massive deflation in the global private loan market that’s going on right now, they face a nigh-vertical uphill struggle.

#82 Drowning in Debt on 12.28.10 at 2:01 pm

Oh,

One other thing. I live in Milton. Garth is right about many Miltonians. I know many who have refinanced, barely getting by, drowning in debt as bad or much much worse than what I have.

#83 dark sad person on 12.28.10 at 2:08 pm

hmmmmm-

Gold up-
USD up-
CHF up-

This isn’t supposed to happen-in the world of hyper-inflationists is it?

Oh well-it’s still early in the game-but get used to that trade pattern-because-
that is the essence of the deflation trade-
It will be confirmed when that trade is cooking and commodities and markets are crashing-but-
like i say-it’s still early days and it can all change in a new york minute-

#84 Jon B on 12.28.10 at 2:14 pm

#24 GBoomer
So what you’re saying is that as an educator you let obvious gramatical errors slide? I hope you never teach my kids.

#85 BrianT on 12.28.10 at 2:16 pm

#75David-on the chart-from Jan 2009 to Aug 2010 our holdings of US junk went up 12X-I wonder who is at the Bank of Canada?

#86 Coho on 12.28.10 at 2:21 pm

Who or what is to blame for the present and soon to get worse financial crisis? There are many symptoms of the root cause which misdirect the blame.

As long as we’re paying interest on the growing national debt to the owners of the central banks things will continue to get worse. What is much more powerful that the power to tax is the elite few with the power to print and lend money with no backing! Talk about enabling your jailer! While this practice continues (forever funnelling money into private unseen hands) the middle class will go down, down, down.

Talk of solutions to our predicament is like figuring out how to run a marathon with a millstone around our necks. We need to get rid of the dead weight, and it should start with usurping privately held central banking systems, and not working people and services.

Our only hope of getting out of this mess is to make these parasitical institutions the property of the government and thus the people, so the interest on the debt is payable to the government of the people, for the people, and not into the pockets of the ruling class who use the proceeds to make war, manipulate world affairs and financial markets, and to exploit people and countries to further enrich themselves. This kind of situation cannot and will not end well (for us, the “little people”) unless this practice is stopped.

All other talk of solutions and otherwise blaming property virgins, government workers, politicians, boomers, ladies who wear curlers, and latte drinkers misses the point and it is a distraction those that are bleeding countries dry, are happy to see.

#87 Billy on 12.28.10 at 2:26 pm

#60 T.O. Bubble Boy:

The card readers are not about saving money. Smart cards are more about convenience and efficiency than fare evasion. With a Smart card, you don’t have to carry around change, and it’s a great system for those who don’t use the transit system every day, and don’t want to buy a monthly pass. It also allows for more “fair” fares, in that you can charge by distance rather than by arbitrary zones.

There are a whole lot of other benefits, but the argument that it will “cost more than it will save” is a straw man, and bad journalism. If you’ve ever lived in a city with a smart card system (e.g. London, Hong Kong) you would not understand why any large city would want to be without one.

#88 dd on 12.28.10 at 2:40 pm

#43 Nostradamus jr.

You are not living up to your word! What happened to your 50% price increase in Vancouver real estate prices? Should we really take you seriously?

#89 Sam on 12.28.10 at 2:41 pm

Part 2 (half way thru) talks about the what Garth says…

http://rt.com/programs/keiser-report/episode-105/

#90 Utopia on 12.28.10 at 2:41 pm

#20 nonplused

I do read the “drivel” as you call it most days and have gotten to know most of the posters pretty well. In a bit by bit way.

I know what you mean though about not getting responses. I don’t get many either. Thankfully nobody is calling me an idiot lately although that is not certain to last forever.

I agree the glass of wine (beer) helps numb the sensation of reading some of the obsessive commentary from a few posters on this site. Not all of course. I have my favorites too.

Some of you people out there write terrific commentary on a really regular basis so I always check to see what you might be thinking today. I am partial to Victoria Tea Party and Kitchener1 for example but there are many others and some of you guys (gals) really crack me up too.

Try not to take the comments from some posters as personal slights Nonplused. That is the nature of annonymity and people get braver online than they ever would be face to face.

Anyway, this site is still one of the more civil ones I read. Have you noticed the level others go down too?

Holy macaroni Bataman. I can hardly get through three or four comments on other sites before being totally put off, even disgusted. The newspapers of all places seem to attract the loopiest of commentary. There are a lot of whack-jobs out there.

This site is almost family oriented by comparison!

#91 Bill Grable on 12.28.10 at 2:43 pm

This is coming to a town in Canada, near you – but of course, Mr. Turner has been telling us this for how long?

*Dedicated to you snippy grammarians who jumped all over Mr. T. for ONE word – have a nice day – sheesh>

“Home prices are dropping in America’s largest cities and are expected to fall through next year, with the worst declines coming in areas with high numbers of foreclosures.

The Standard & Poor’s/Case-Shiller 20-city home price index fell 1.3 per cent in October from September. All cities recorded monthly price declines.

Atlanta recorded the largest decline. Prices there fell 2.9 per cent from a month earlier.

Washington, which had posted increases for six straight months, dropped 0.2 per cent in October.

The 20-city index has risen 4.4 per cent from their April 2009 bottom. But it remains 29.6 per cent below its July 2006 peak.”

http://tinyurl.com/25gsppz

#92 dd on 12.28.10 at 2:50 pm

China increases bank rates and gold and silver increase! According to some on this blog it isn’t suppose to happen this way.

#93 betamax on 12.28.10 at 2:53 pm

#68 Page: “Well, well, well, if ‘yore’ not part of the solution, ‘yore’ part of the problem. Incorrect usage to be sure, but you get my meaning.”

If meaning is clear regardless, then your argument is moot — doubly so since it’s predicated on a false dilemma.

Ostensibly, you think logical fallacies and thoughtless cliches are less egregious than grammatical errors. You are incorrect.

Internet spelling is the hobgoblin of small minds. Ideas are important; typos aren’t.

#94 BrianT on 12.28.10 at 3:02 pm

#78Fuzzy-IMO the cost of living in 2035 will be sky high compared to today. A long and entrenched bear market in RE will not offset far increased costs in every other area-even RE property taxes will be far higher in real dollars in 2035 IMO. The other aspect is that when buyers pay a fortune for a home there is an expectation of at least some price appreciation, which offsets the purchase price-with a long and entrenched bear market there will be no offset at all.

#95 obert on 12.28.10 at 3:05 pm

Of course stay in Calgary. Better health care, better university, cheaper and more connections flights. Same cost of housing as in Sakatoon and as you said a similar job. Unless… you miss the old good Saskatchewan. But watch out for “frostbite.”
And yeh, get rid of too much debt (LOC).

#96 Timing is Everything on 12.28.10 at 3:06 pm

#68 Page

‘whatever’ as in definition #3….

http://www.urbandictionary.com/define.php?term=whatever

#97 Utopia on 12.28.10 at 3:09 pm

#44 Aussie Roy…..

“I have a 5kw solar array, 4 500 watt wind turbines and pay 60 cents a litre (Gasoline is 1.40 a litre here) to fill up my RV. I no longer get a bill from the electricity supplier, I get a check instead”
————————————————–

If I had guessed at the cost of fuel in Australia I might have gone a little on the high side,…..but 1.40 a liter is pretty expensive. I just paid 1.07 Canadian per liter for a fill and thought I was getting hosed.

That is 7.5 cents higher than it was two weeks ago. With the fuel station discount included I had actually been paying only about .94 cents.

For you US readers, that is nearing four bucks a gallon so while it sounds like a bargain up here it is a terrible price from your perspective.

#98 Timing is Everything on 12.28.10 at 3:11 pm

#68 Page

‘whatever’ as in definition #3… and #4…take
YOU’RE/YOUR/YORE pick…

http://www.urbandictionary.com/define.php?term=whatever

#99 Timing is Everything on 12.28.10 at 3:16 pm

Oh great moderator – You can toast #88 if you want

#100 Stevermt on 12.28.10 at 3:28 pm

#51 Moneta
thanks for verbalizing my thoughts exactly..I hate these government bashers too. They just don’t realize how good they have it. We have a nation envied around the world because of our government..that priviledge does indeed cost money and resources.

#101 Utopia on 12.28.10 at 3:38 pm

#62 grantmi

Here is that David Rosenberg interview you mentioned.

http://www.cnbc.com/id/15840232?video=1712226966&play=1

#102 Bottoms_Up on 12.28.10 at 3:42 pm

#80 kitchener1 on 12.28.10 at 1:47 pm
—————————————-
If parents have the means, it would be stupid to not build an RESP for their children.

Automatic 20% paid by the government on up to $2500 saved per year; $7200 maximum in total contributions by the government over the life of the RESP. That’s one year’s tuition covered right there.

http://www.heritageresp.com/resp_questions.html#Grants

Or, you could always let your kids go to the school of ‘hard knocks’, accumulate massive student loans and spend decades trying to pay it off. Then you can enjoy your impoverished grandchilden, feeling good about the lesson you instilled in future generations. Pay it forward.

#103 realpaul on 12.28.10 at 3:46 pm

Government announces 2011 tax increases….no duh. Who will be the beneficiaries? The fat sucking greedy overpaid and over pensioned civil servants thats who. With teachers taking ninety five percent of the education budgets leaving zero behind for education and healthcare workers taking 100% leaving people to die in the hallways we might wonder when the general population will have the balls to say ‘enough is enough’.

City workers of all stripes are making more than $100K p/a and their numbers are increasing at over 20% per year. Insiders by the hundreds of thousands are pulling down hundreds of thousands a year plus perks.

People are starving in this country, there are no seniors housing being built, no new texts in the classroom etc etc etc….every new dollar of taxes goe’s stright into the greedy maw of the unions and their thralls.

http://www.torontosun.com/money/2010/12/28/16690256.html

#104 Paul on 12.28.10 at 3:56 pm

#11 Kevin

Thanks for posting that link.

All those little purple dots around St Albert are going to pay off big time I hope. The news gets better everyday.

Who needs gold.

#105 realpaul on 12.28.10 at 3:57 pm

Heres proof of the abuse by civic servants.

http://www.vancouversun.com/business/Surrey+school+official+receives+record+compensation/4030267/story.html

Deny all you want but you can’t ague with the facts.

One local school board guy? Is that the best you can do? — Garth

#106 Paul on 12.28.10 at 4:01 pm

#11 Kevin

Thanks for posting that link.

All those little purple dots around St Albert are going to pay off big time I hope. The news gets better everyday.

Who needs gold when you have Type lla

http://www.shoregold.com/_resources/presentations/SGF-StarOrionSouthDiamondProject10Nov2010.pdf

#107 Mike on 12.28.10 at 4:08 pm

It is unreal that the TTC does not use some type of SMART card or zone fare system. We are stuck in the 1970’s and the inefficiencies are so glaringly obvious

ie. Having the Yonge subway cars jammed full at Yonge/Sheppard at the north end of the line with ppl who are paying the same $3 fare as those who are trying to commute 2-3 stops within the city core.

Nevermind that places like London/Singapore/Hong Kong have this ….. even Bangkok, Thailand uses a SMART card + Fare zones!

#108 Basil Fawlty on 12.28.10 at 4:13 pm

“This isn’t supposed to happen-in the world of hyper-inflationists is it?”
Inflation/deflation/hyper-inflation, they all equate to a decrease in the standard of living.

#109 Brian Poncelet, CFP on 12.28.10 at 4:31 pm

The RRSPs though nice is really worth only 50%. As you grow your investments CRA also grows theirs (yours).

Having no debt is good but how to grow it tax free like an TFSA is the question. Also, how can you grow it in all types of economic conditions.

#110 BAD on 12.28.10 at 4:42 pm


On some things the choices are made for us:

“Nearly every working Canadian will be paying more in income and payroll taxes in 2011,” said Derek Fildebrandt, CTF national research director.


We’re going to be taxed more: CTF

Just as Garth has predicted. Also C & F Bros. have promised interest rate increases and tougher lending regulation. Nothing we didn’t know or didn’t expect, at least on this blog… seems the 2011 is going to be a very interesting year, perhaps one for the Canadian history books.

#111 Bullion.Bunny on 12.28.10 at 4:45 pm

#83 dark sad person on 12.28.10 at 2:08 pm

hmmmmm-

Gold up-
USD up-
CHF up-

This isn’t supposed to happen-in the world of hyper-inflationists is it?

———————————————————-

Dark Sad Person…you better “Take those gold profits. — Garth”

Deflation for sure, mixed in with central bank inflation generated manias.

#112 Macrath on 12.28.10 at 4:53 pm

Alan Grayson questions Elizabeth Coleman, Inspector General of the Federal Reserve.

http://dailybail.com/home/there-are-no-words-to-describe-the-following-part-ii.html

Inspector General of the Federal Reserve actually inspects nothing. Knows nothing of 9 trillion in off-balance sheet transactions.

#113 Bullion.Bunny on 12.28.10 at 5:02 pm

Now for Something Completely Different

Workings of the stock market according to Dilbert…..It really works this way.

http://www.youtube.com/watch?v=4e1auoglqkA&feature=fvsr

#114 Derek on 12.28.10 at 5:06 pm

#104 realpaul wrote:
City workers of all stripes are making more than $100K p/a and their numbers are increasing at over 20% per year. Insiders by the hundreds of thousands are pulling down hundreds of thousands a year plus perks.

Yep, and those city workers are spending all that cash on food from the private sector, housing from the private sector, cars from the private sector, you-name-it from the private sector. So all that tax money is coming from the private sector, going through the city workers hands and straight back into the private sector.

What was your point again ?

#115 bigrider on 12.28.10 at 5:26 pm

#69 Rosie.

To quote a cliche ‘ markets climb a wall of worry’. The time to be invested in financial markets is when everyone believes as you do(which they do) that problems in the world mean that you should stay away.

#116 bigrider on 12.28.10 at 5:30 pm

Garth may clip this one out but as for leverage of 80k in above example given, client could diversify among basket of mutual fund product offered by Sprott, Dynamic , Front street (a couple others). Odds of success over 5 to 10 year period very much in favour of investor in my opinion, that’s if you can get over the higher fee issue.

#117 Dan in Victoria on 12.28.10 at 5:54 pm

Jon @ 84
Education comes to us in many forms. Some think perfect spelling in a rigid class room, with order and method. Strict guide lines, minimum marks for acceptance are the only way.
Others among us could never learn in that enviroment.
They need to be able think freely, turn ideas over in their heads, create and blossom on their own.

When I was younger I worked with an older gentleman who was obviously not educated to your high standards.
He actually was I think what we call “challenged” now a days.
He drove an old truck and had a dog that came with him to work.
He had difficulty speaking, always ate lunch alone in his truck with his faithful dog, who got a couple of treats from his shirt pocket, and a scratch behind the ear after lunch.
He was an introvert, shy, never had any real friends I suppose, had trouble writing anything down. Had trouble communicating.
It was painful.
But you know what ? He was brilliant at his job, could cut the angles and fit stuff together by just eyeing it.
I got to know him over the course of time, encouraging him to talk to me, having my lunch with him and his dog.
He had had a rough life, abadonded, abused, made fun of for years. No wife, No family, No friends.
He was well into his seventies and still working.
I learned a lot from him, not only about little tricks to save time but how cruel people can be.
How people fear others that are diffrent, how people can bully some one who they see is not adequate.
How we can just not give a damn about some one.
My time working with this fellow came to an end as all constuction jobs do.
We parted friends, a simple hand shake and a nod.
I saw him from time to time always a smile and a nod from both of us.
Time passed I no longer was at the bottom of the heap, I was starting to direct people, the old fellow was still doing his job.
One day his dog got out and was checking out the neighbourhood. The dog was old, bad sight, poor hearing.
He was hit by a car and killed.
The old fellow held him and cried and cried. his whole world gone.
The guys pitched in and got him another dog, life was better again.
That fellow never wrote anything on a black board, never lectured at a fine school never debated anyone.
Yet I learned so much from him.
And you can too.

#118 Oasis on 12.28.10 at 6:03 pm

hmmmmm-

Gold up-
USD up-
CHF up-

This isn’t supposed to happen-in the world of hyper-inflationists is it?

__________________________________________

actually, gold up, usd DOWN (not up), Swissie up.

and you forgot, US bonds, CRUSHED again today.

COPPER, new all time historical high. Grains, all up, Silver up MASSIVE, Coffee, sugar cocoa, ALL UP…

yes.. this is what goes on in the early stages of a hyperinflation…. oh…

hmmmm….

#119 Bullion.Bunny on 12.28.10 at 6:03 pm

One local school board guy? Is that the best you can do? — Garth

What, I have to post the sunshine list again?

#120 Bullion.Bunny on 12.28.10 at 6:09 pm

Here are two of the most interesting interviews I’ve heard in a long time.

Rob Arnott: Founder and Chairman of Research Affiliates, discusses that possible bond default in the U.S. Already the big money is thinking ahead.

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/12/28_Rob_Arnott.html

R. CHRISTOPHER WHALEN of Institutional Risk Analytics, gives an excellent history lesson on past bubble.

http://www.financialsense.com/financial-sense-newshour/in-depth/chris-whalen/inflated-how-money-and-debt-built-the-american-dream

#121 Rural Rick on 12.28.10 at 6:10 pm

If you feel you must correct someones grammar or spelling do it privately anything else is just rude and condescending.

#122 Derek on 12.28.10 at 6:27 pm

#111 BAD wrote:
On some things the choices are made for us:
True enough and sadly I too must agree that interest rates and taxes will probably rise.

Raising the interest rates will have a nasty effect, causing not just bankruptcies but also increased deflation. Not raising them will cause the debt problem to get even bigger. So he doesn’t want to raise them; he doesn’t want to lower them. Likewise raising the overall tax take is going to cause problems for the poorest part of the population. Is there any other approach that might work ?

Fortunately there is. Unfortunately it involves increasing an unpopular tax. Fortunately it involves reducing an even more unpopular tax.
Unfortunately the elite will fight it tooth and nail. Fortunately it’s straightforward to implement. Unfortunately you need political balls of steel to do it.

So what is it? It’s a tax shift. Let’s look at the situation. We need to raise interest rates but we can’t because recent borrowers won’t be able to pay the increased charges. Okay. So what can we raise that acts like increased interest rates? We could raise property tax. That would have the same effect on borrowers as raising interest rates. So the bubble should stop inflating. However the difference is that the government would receive the cash instead of the banks. And that makes all the difference because the gov can use that extra tax revenue to reduce another tax. Federal GST. And that reduction in GST means that everyone has more cash in hand to pay the increased property tax. So they won’t default. They should come out even or a little bit up. But they would be dissuaded from bidding up real estate prices even further.

Of course it won’t happen. No doubt we’ll go down the austerity route that Europe has already started down. And there will be much wailing and gnashing of teeth. Still, it’s nice to dream of what could have been…

#123 Moneta on 12.28.10 at 6:27 pm

Try not to take the comments from some posters as personal slights Nonplused. That is the nature of annonymity and people get braver online than they ever would be face to face.
———-
I always wonder if my most vehement opponents in the web world could be my best buddies in real life.

I wonder if it’s like that voice on the phone and the face that comes with it. Any research done on that?

#124 Rich CEO on 12.28.10 at 6:28 pm

realpaul on 12.28.10 at 3:57 pmHeres proof of the abuse by civic servants.

http://www.vancouversun.com/business/Surrey+school+official+receives+record+compensation/4030267/story.html

Deny all you want but you can’t ague with the facts.

One local school board guy? Is that the best you can do? — Garth”

Thank-you brainwashed puppet realpaul for pointing out the gross waste of taxpayers money. That money could of been better spent at bailing out a bank or giving my billion dollar company billions of dollars. The work class slaves are a stupid people and you realpaul are a perfect example. Why am I telling you working class slaves the truth? Because of years of corporate propaganda in the MSM have brainwashed you puppet masses to be good slaves. Keep up the good work puppet realpaul you are a slave a master can be proud of.

#125 David B on 12.28.10 at 6:42 pm

Garth & Friends

How many times have we stated Jan 1st 2011 is going to unleash the “SENIOR BOOMER GENERATION”

Stand by …… it is not going to be fun ….. and the sad news is it never had to be in Canada. We were sold out lock stock and barrow by CTV and our National News papers who said time and time again “Canada’s Economy is as strong as the Canadian Shield because PM Harper, FM Flaherty & Mark Carney said so. Buy buy Real Estate and all will fine, better still borrow, borrow and vote Conservative. Just look how they spent money ….+ (PLUS) $15 Billion to – (MINUS) $60 Billion in just four short years! Thank you MSM for lack of professional journalisum and somthing called the truth.

Happy New Year …. it’s going to be one hell of ride in wrong direction.

Any bets?

#126 Bullion.Bunny on 12.28.10 at 6:47 pm

Baltic Dry Index down to $1773, China and U.S. slowing down?

#127 goldenfox on 12.28.10 at 7:05 pm

You still sure you want to buy houses in the good ole USA

http://www.stansberryresearch.com/pro/1011PSIENDVD/PPSILC33/PR

#128 pjwlk on 12.28.10 at 7:07 pm

Dan… *POP*… Welcome back… *POP*, *POP*…

#129 throwstone on 12.28.10 at 7:11 pm

Garth,

It seems you are defending the government wages, benefits and pensions.

Are you?

Only against groundless, dumbass comments. — Garth

#130 unbalanced on 12.28.10 at 7:15 pm

To Nonplussed!!

Take it with a grain of salt. I come here to learn and understand things in the financial world. Alot of dawgs have contributed immensley. Some things I agree with and some I don’t. In life you will always have the naysayers. Just remember when the GOING gets tuff, the tuff get going. Keep contributing !!! Goodluck

#131 Debtfree on 12.28.10 at 7:23 pm

Gr8t pic of king stevie good poem 2 .

http://thetyee.ca/Opinion/2010/12/24/TheSteveGreened/

Hey Jon B if don’t like opur8ting a living language try Latin it’s written in stone and will never change unless someone uses it again .

#132 Moneta on 12.28.10 at 7:48 pm

Is this now a grammar blog? — Garth
———
Most of the more popular letters on my keyboard are erased due to overuse. I should probably spellcheck more often but I often don’t because going backwards in the 2 inch posting box is annoying.

I’m sure others have all kinds of excuses apart from the dog ate my fingers.

#133 Moneta on 12.28.10 at 7:50 pm

the 2 inch posting box is annoying.
—–
Just measured… more like 1.5 inch.

#134 Moneta on 12.28.10 at 7:56 pm

there are no seniors housing being built
—–
I predict that when the real estate bubble bursts, all those 400K+ condos will become cheap senior housing.

And that’s not counting all the senior housing built for the rich boomers who are about to find out they are not so rich.

#135 Rich Renter on 12.28.10 at 8:02 pm

$26,000 in TSFA means that they’ve made $6000 (+30%, or about 20% per year since they would have only had $10k the first year), which is great — much better than the 1% most Canadians get in a TFSA savings account. That alone is a shocking return and raises questions from my end. Garth you brag about 14% but this beats the lot.

I certainly do not brag about returns, only illustrate that decent yields are available with little risk. It matters not how much money you make if it can be easily and quickly lost. — Garth

#136 AG Sage on 12.28.10 at 8:37 pm

#134 Moneta on 12.28.10 at 7:50 pm
>Just measured… more like 1.5 inch.

It’s supposed to be suggestive, maybe?

I’m in Vancouver at the moment for a conference. Have not found a native yet who 1) thinks the banks are perfectly healthy, thank you, 2) thinks housing won’t adjust much, if at all.

It’s like fish in a barrel.

#137 bystander on 12.28.10 at 8:52 pm

“That’s one of the reasons that assets are going down in price, particularly Real Estate.” — Derek

**********

Please, please, please, can we please just STOP calling the LIABILITY an ASSET ?

While it’s true that some investments into RE are assets,
many investments into RE are huge liabilities.

My point is that the mere fact of piling money into any particular group of investment vehicles does not make it an asset. Nor does it define your investment as liability. It is just that – an investment.

Example to make it easier to understand:
From the moment you sign on that dotted line, your mortgage becomes an asset on your banker’s book. The very same mortgage becomes a liability on your book – that same very moment.

[folks on the street]
…but people were making money on their houses, during boom years… The banker must have lost money lending to me, because the bank made less money than the me, the borrower.

Well… let’s look into that:

Q:
What is the banker’s ROI ?
Cost of underwriting a mortgage =(Writing a cheque)+(Risk of customer default)
Cost of writing a cheque = ZERO (money created out of nothing)
Risk = ZERO (Taxpayer is 100% at risk via CMHC)
Banker’s Profit = Mortgage payments for 35+ years (until you die)

A:
The banker makes an infinite return on your mortgage because the cost of doing business for them is …zero ! Banker doesn’t need to charge a lot of interest… because interest charged on nothing = Infinite return !

Q: To every winner there is a loser. Who is the loser ?
A: People (aka citizens, taxpayers, debtors, consumers, voters)

—————————————————————-

Shall I continue ?
still hope there few conscious minds listening…

Banker is in the business of lending printing money and collecting interest payments on nothing.

Q: So what’s in it for the Government, or why doesn’t it stop bankers ?

A: Government supports this mechanism because it creates an inflation which is a hidden form of Tax. This is an immensely profitable partnership for the Government. Without such mechanism there would be no inflation, and the government would not be able to meet it’s obligations such as pensions and health care. Without inflation the government would have to to keep raising taxes. Politicians don’t want to be held responsible. If Taxes go up, the government is at fault, but if inflation goes up, it’s some mysterious global economic forces that are at fault. Got it?

Q: What should I do ?
A: You don’t need those parasitic institutions to properly function. You have kids. They will need your help to get real educated about the world we live in. You have a lot to do in your life. Boomers are coming in huge quantities to collect their cheques. The government will default eventually. There is a good chance it will. They all end up there. Look back – so many things happened in just 100 years. You will not believe how much of that lies ahead. Be prepared. Stay liquid, and yes you don’t need those parasites on your back to function.

Q: Is media in this business too?
A: Sadly, yes. Media keeps every citizen (working on two jobs – taxpayer being the 1st, and debtor – being the 2nd job) remain entertained and consumed with all that BEEEEP flowing from big screen amusement boxes flat panels every day just before you go to bed, right after you wake up, and every moment in between, in case your subconscious mind awakens and begin to ask questions about your real purpose of existence.

Some facts:
Mortgage = engage in debt until you die
Etymology
1390, Old French mortgage, from mort (“dead”) + gage (“pledge”). Verb attested 1467.
Source: http://www.etymonline.com/index.php?term=mortgage

To all the sceptics who ask to put my money where my mouth is:

1. Secured mortgage in summer 2005 – was expecting a new baby.
2. The decision to buy was made since it was cheaper to buy than renting a larger place for a bigger family
3. Moved in Jan 2006 to a new Condo in one of Calgary’s ‘beautiful’ neighbourhoods near the city limits. Put 12% down. Signed a 2yr. term variable mortgage at (Prime – 0.75%). Three days later a new baby arrived. What a busy time it was!
4. Sold in Dec 2007 (had to aggressively drop the price).
5. The decision to sell was obvious. The buyer (young nurse) put 0% down on a beautiful 800 sq.f. 2 bedroom condo.
6. The ROI in 23 month is 500…1000% (depend how you count)
7. Now renting for less than the cost of owning a condo
8. Put money in the stock market with the commitment to learn.
9. Seen massive opportunities, but could not handle the emotional aspects of it. So made nothing, but lost nothing either. Learned a lot about myself and the markets.
10. I am developing an automated trading systems now that take the emotional aspect out of decision making process in trading. Let’s see what comes out of this.
11. Right now I am short Canada all together and fully invested into BRIC
12. Just of curiosity looked recently at asking prices for condos where we used to live. The asking price today is 1K …30K below our selling price. That is a reality and given the fact that we had to drop our price by 20K+ to get out.
13. Frankly I feel for the buyer of our condo, but I don’t regret. We have a new baby now – a huge responsibility.

Shall I also mention that I am an immigrant never making more than 15/hr in Calgary ? I will leave it at this.

#138 Nostradamus Le Mad Vlad on 12.28.10 at 8:56 pm


#29 Thetruth — “WHY ARE WE SO DIFFERENT?”

Umm, we’re not that different (possibly except in cultures and lifestyles).

For the most part ‘tho, Cdns. have become The Tragically Stupid. So far, medicine and science have not found a cure for stupidity.

#37 Jody — Great and accurate post!

#40 Devil’s Advocate — “. . . not the destination but rather the journey…”

Ahh yes. We come, we go. Such is the short physical lifecycle, and is no more than a short step toward the next rebirth, and the experience of death itself is a gorgeous, lucid, vivid and especially, freeing one.

When my number is called, I am more than prepared and ready to enjoy the moment!

#74 UrbanCowboy — “Good indicator that 2011 won’t be off to a good start in terms of economic health.”

Correct. Whole lotta residential mtgs. begin resetting soon, commercial RE diving, incl. exorbitant food / gas / diesel / energy costs ballooning. Economy is one small part of a very big jigsaw puzzle.

#77 Devil’s Advocate — Cdns. may elect any fed. govt. they want, but who controls the govt.? Who pulls their strings, tells them what to do?

We have each other’s e-mail addresses, so I can pass the info. on if you want.

#86 Coho — “Who or what is to blame for the present and soon to get worse financial crisis?”

The elite continues to orchestrate the downturn, but like us, are caught in a cycle change. See response to #74 Urban Cowboy.

#93 betamax — “Ideas are important; typos aren’t.”

Hear hear! Ideas are one of the most important resources we have, and this forum is a great place to share with others!

#139 throwstone on 12.28.10 at 9:00 pm

Garth,

“Groundless, dumbass comments”

Dumbass I agree, but “groundless” as in unfactual?

Let’s try this …

Question:

Garth, Do you think the Government will continue to tax the Canadian public at ever increasing levels to service its debts?

Answer: Yes

Question:

Garth, In the province of Ontario four out of five tax dollars are used to compensate the wages, benefits and pensions of the O.P.S.E.U members; do you think this is hindering the provinces ability to service its debts?

Answer:

Q: How do you have universal health care and education without doctors, nurses and teachers? A: — Garth

#140 SRV ES339 on 12.28.10 at 9:00 pm

I agree that many civil servants are overpaid (teachers, firefighters, anyone in Hydro, police, TTC, etc in Canada can make up to twice as much as those in the US), but I don’t blame them one bit… it’s the short sighted government negotiators that accept whatever it takes to avoid long term work disruption, leaving future generations to deal with the consequences.

However, the most serious problem is the pension gains (teachers are a prime example) the unions have negotiated (and the politicians happily comply, knowing it will never be a problem on their watch) over the last 50 years… and we will pay for their incompetence for generations to come.

#141 Bottoms_Up on 12.28.10 at 9:08 pm

Semi-detached in Temiscaming, asking $19,900:

http://www.realtor.ca/propertyDetails.aspx?propertyId=8801964&PidKey=-304302767

#142 a prairie dawg on 12.28.10 at 9:23 pm

A side effect of the cold and the locusts is that they help to filter out the genetically weak. The ennui also doubles as a potent snob repellent. Both have been fairly effective thus far.

Now if you’ll excuse me, I have a socialist party meeting to attend, as they are mandatory here in Skatch. ;)

#143 Herb on 12.28.10 at 10:03 pm

Unreal Paul,

City workers of all stripes are making more than $100K p/a and their numbers are increasing at over 20% per year. Insiders by the hundreds of thousands are pulling down hundreds of thousands a year plus perks.

Since you haven’t produced any facts, let me link you to the so-called “Sunshine List” of the Province of Ontario. Here you will find the name, function and earnings of every public servant at any level who made over $100K in 2009. You can even go back over other years.

http://www.fin.gov.on.ca/en/publications/salarydisclosure/2010/

Make of it what you will, but get real or put a sock in it.

#144 Kaganovich on 12.28.10 at 10:10 pm

Coho

Phrases like ‘debt jubilee’ will most likely become more common in the next couple years, although I highly doubt ideas of debt repudiation will be discussed in right wing political groups. Perhaps the idea of a debt jubilee will be a point around which a debt strapped and extremely atomized/privatized middle class can regroup (in a politically militant way).

#145 Milhous Plumbers on 12.28.10 at 10:12 pm

Garth never mind grilling these pipsqueaks.. more important things on hand. U.S. housing price declines continue in major cities.. our dollar past parity.

#146 Timing is Everything on 12.28.10 at 10:14 pm

#104 realpaul

Divide and conquer. They win. Get real, paul.

#147 Nostradamus Le Mad Vlad on 12.28.10 at 10:26 pm


Devaluation In Progress while none of us are watching. Interesting story, banxters are also following orders. Plus — One in Three families low income.

2:47 clip US cities going bankrupt in 2011.

Corrupt is the world we live in. Plus — US Fed is private, not public so the public (taxpayers) are not responsible for US govt. debts / deficits — the US Fed is. Plus — Owners of the US Fed.

2011 “It turns out Orwell and Huxley were both right. Huxley saw the first stage of our enslavement. Orwell saw the second.” Plus — 2011 (2) “Inflation,caused by this round of quantitative easing, coupled with food commodity shortages, caused by bad weather, will make life even more miserable for the American people in 2011.” wrh.com.

Watch only if you want — 1:05 clip “Austerity Protest in Romania … Romania’s Parliament cancelled a no-confidence vote on Thursday after a father whose payments for his disabled child had been cut by the Romanian government leapt from a balcony in the parliament in protest against the decision.”

Unemployment “When numbers are tallied on this basis, look for true unemployment figures most likely to double.” wrh.com.

Rigged “As George Carlin famously said, “It’s a club, and you ain’t in it!” wrh.com.

South Korea Looks as if the US may be preparing a FF to justify something larger.

Top Trends “One issue Celente doesn’t touch is the possibility of a shooting war next year, potentially with Iran and Israel; between Lebanon and Israel, or Syria and Israel (which will inevitably bring the US in on the side of Israel) or North Korea and South Korea (which will inevitably bring China and the US into the equation).” wrh.com. Russia and Iran will back China. Plus — 0:38 clip Does this have anything to do with the war talk?

Shades of the Quebec ice storm.

Gandhi’s Mantra appears at the right moment. But — Not what Gandhi used, but it’s a start.

NATO – US “If ever there was a country which desperately needed a Department of Peace, to figure out how to obtain specific objectives without resorting to war, it is absolutely the United States of America in the 21st century!” wrh.com.

Haiti “International health experts say that the figure will triple in the next twelve months.”

Palestine The Brits are waking up!

NAU – SPP is back! “The U.S. is formulating a strategy with the aim of implementing a North American security perimeter…”

Putin loves Linux So long Microsoft!

#148 X on 12.28.10 at 10:39 pm

re#69 – Wake Up…the people offering your safe money, for a non safe world, are using the some of the same investments garth has recommended, to make money off of you.

Get educated on this stuff. Knowledge is the best defence and offence.

#149 Bullion.Bunny on 12.28.10 at 11:01 pm

Only against groundless, dumbass comments. — Garth

I think you miss the point. Leftist government policies that cater to ever larger and more centralize power always ends in tears. These policy arrangements are of course unfair to both parties.
First to the tax payer as an ever increasing burden must be shouldered from an ever shrinking tax base. Unions along with their federal and provincial brethren hide behind overly generous contracts that only serve to enforce many bad habits. Double time which is quaintly called “double bubble” is handed out like candy to demanding union members on threat of work disruptions. Garth you should have a look at the typical union contract, both public and private. These documents are three to fives inches thick and at the best of times only function to muddy the waters. I think you would be stunned to see how your tax dollars are misallocated.
Secondly these arrangements are also unfair to the unionize workers themselves. They produce the least common denominator effect within the organization. The laziest bastards now become the productivity standard, it spreads like a bad flue. Once this attitude sets in, it’s like old age. This lull’s union members into thinking that this environment can last forever, leading to over spending and over leveraging on the individuals part. Of course these pay and benefit levels are unsustainable and collapse in a pile of rubble over time. This not only harms the union member but also the public that has become dependant on the services provided. Union members are often shocked when they are forced leave this environment due to closure or other circumstances. The non-unionized private sector not only pays substantially less in both pay and benefits, they are also expected to work!
I’m not asking for our civil service to work for free, but at the same time the status quo cannot continue. The definition of productivity is not defined as TTC ticket taker making $100,000 dollars a year only to be found sleeping at their post. I assure you this occurs much more that you can imagine. I know I see it all the time.

Here is a great little documentary on Detroit. Showing the results of over unionize services both public and private.

http://www.youtube.com/watch?v=1hhJ_49leBw&NR=1&feature=fvwp

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

Decline starts somewhere.

Here is Detroit in the Glory years 1965.

http://www.youtube.com/watch?v=Ga6xmbEmyOM&feature=related

Forty five years to the bottom. Detroit……..four hours from Toronto.

Enough is enough. Stop the spending.

#150 walter safety on 12.28.10 at 11:09 pm

Does anyone remember the Interest Income Tax Deduction . ?First $1000 of interest income was tax free per person.Taken away in 1981 I believe .
How long before you will earn $1000 in your TFSA ? About year 8 for most people. Will TFSA’s last that long .?

#151 SophieZombie on 12.28.10 at 11:57 pm

48 Moneta on 12.28.10 at 9:58 amThe main issue is that you shouldn’t be owning a house considering the little savings you have, the 1 income, your age, and your 2 dependants.
—-

#I would rather say 3 dependants !!
When kids are old enough to go to school FULL time, a house wife becomes a dependant. Especially if you did not keep any professional skills updated. Is that a new TLC channel trend? I see so many women stay-at-home-forever burning money like breathing. I hope I am wrong, but a lot of trouble families described in that blog seem to include a house-sitting wife. Is that a macho rule or a new cocooning-women-of-the-year-goal or I just don’t get it ? (Yes, I am a woman, working more than full time and just loving it!)

#152 dd on 12.29.10 at 12:16 am

#72 rosie

“And take those gold profits. — Garth”

Rosie, stay long. Garth and many others have been predicting the fall off in gold since this blog started. There will be asset deflation. However governments will print and this will lead to price inflation (currency deflation).

Investors take profits. Gamblers hold. — Garth

#153 dd on 12.29.10 at 12:42 am

#153 dd on 12.29.10 at 12:16 am

…Investors take profits. Gamblers hold. — Garth..

Very true. Investors also take profit when 1) the goal is reached, 2) fundamentals have changed. Gambling is when the house holds the odds. And, if you actually study government debt, GDP, trade balances, etc the fundamental for holding metals have increased.

#154 Sharron Clemons on 12.29.10 at 9:55 am

48 Moneta on 12.28.10 at 9:58 amThe main issue is that you shouldn’t be owning a house considering the little savings you have, the 1 income, your age, and your 2 dependants. —-#I would rather say 3 dependants !! When kids are old enough to go to school FULL time, a house wife becomes a dependant. Especially if you did not keep any professional skills updated. Is that a new TLC channel trend? I see so many women stay-at-home-forever burning money like breathing. I hope I am wrong, but a lot of trouble families described in that blog seem to include a house-sitting wife. Is that a macho rule or a new cocooning-women-of-the-year-goal or I just don’t get it ? (Yes, I am a woman, working more than full time and just loving it!)

#155 North of the 49th on 12.29.10 at 12:32 pm

Toby and Calvin,

Most Albertans with any sense have a RV or a 5th wheel or at least know someone who has one, so sell the debt hole in Calgary, live in the 5th wheel this spring and summer (in Calgary or Saskatoon or in between…who cares where, when your kids are very young and you are already almost two thirds of the way to the north pole), save your sheckles and get out of debt! Then things will look much different next fall.

#156 Wilde_at_Heart on 12.29.10 at 5:26 pm

I agree with a couple of the above posters – it’s silly to plan your own financial life and sacrifice your retirement fund based on what your kids’ needs MAY be after they’ve finished high school.

I don’t believe parents are obligated financially beyond a few loans/gifts here and there or rent-free accommodation if they go to university in the same city, particularly if they can’t afford it.