Testo

Can’t believe on a Friday night in the middle of July I’d write a blog post. Apparently more pathetic than even I realized, it’s too late to stop now. Adrian beckons.

Hello Garth,
I thought it time to speak up and tell you my story, as well as get some advice/support for my master plan. I’ve been a daily blog junky since 2008. Wify (around my age) and I (48) are self employed, she a consultant on contract, me a custom home builder (on spec only) I try not to work for anyone. 2009 Invested 280 large in gold and silver (against your advice). I must say I’m quite happy with these investments thus far. We also have 230k invested in equities etc.

We own a 3 br bungalow in 416 free and clear. We listed it for around 700,000 recently and recieved a full price offer. Not being happy with the offer we rejected it and pulled it from the market, taking into consideration RE commish and Taxes etc. You see, we are happy here and will only sell if we get stupid money (we were hoping for multiple offer over asking). We bought the house for 430k in 07 and pumped in 170k to deck out the place.

We are now building a cottage up north for around 250k. The plan being to spend our summers there and winter in Miami (oh ya, I forgot to mention I bought a condo there for 100k cash in 2008). We intend to list the 416 house again in Sept. and hope for the best. The question is what do we do for digs is TO after we sell, she is petrified of not having a Toronto home base. Our incomes right now are minimal since I haven’t built a specker for 3 years because I know the market will fail sooner or later. Also wify’s contracts have dried up substantially since the U.S. finacial crisis nuked the budgets of all her clients.

I would appreciate any comments or advice you may have for us on the TO digs as well as any other financial nuggets of insight. Sincerely, Adrian.

OK, dude, let’s summarize. Real estate (house, cottage and Florida condo), $1 million.  Speculative assets (PM and equities), about $700,000. Occupation, spec house builder. Income, minimal. Employment prospects, nil. Current project, shoveling money into the cottage.

And Wify’s terrified about not having enough real estate? Maybe she should worry about next week’s groceries.

For a couple with a sizable net worth, you’ve sure put yourself at risk. Obviously you’ve way too much of your net worth in one asset class – real estate. And other than the bung, the absolute wrong kind. The recreational market is moribund, so why would you build? A Florida condo bought in 2008 is probably worth 30% less today. And even the 416 house could be a concern – maybe the fact those expected multiple offers fizzled is a harbinger of things to come.

As for your liquid investments, time to harvest profits from the precious metals. Also time to exit equities. You have far too much risk in this portfolio, given the likelihood of sustained volatility ahead of us. Besides, you need income – the kind you’d get with a more balanced portfolio including preferred shares, corporate and high yield bonds, government notes and lots of ETFs. A 7% return would put $49,000 in your pocket, whereas now you’re doing the same with this stuff as you do with houses – speculate.

Of course you should have sold the house for full price. Conditions could well be worse in the fall. Add it in with the liquid stuff, rebalance, and then put $1.4 million to work. Now you could have an income of over $100,000 without diminishing the principle. Rent a mansion for $8,000 a month for Wifey.

Better still, move. I mean, it’s not like either one of you have a real job. Hell, go and buy Windsor. Like me, they need some testosterone.

By the way, you asked me for some advice on your master plan. I missed it. Did you mean the part about spending summers up north and winters down south? Doing what? You’re 48, Adrian.

Here’s some advice. Grow up.

155 comments ↓

#1 Steady Eddie on 07.15.11 at 8:52 pm

don’t sell your PMs. keep physical, trade paper. this bull market has about 5-10 years left.

#2 bill on 07.15.11 at 8:55 pm

send them to the sprouting chambers…….

#3 Dan on 07.15.11 at 8:57 pm

Think it might be an idea to take some off the table with the precious metals, but many advisers see gold at $2000 and silver near $75 by the end of the year; huge potential profits from current levels.

#4 No Fun Vancouver on 07.15.11 at 8:59 pm

1st?

#5 Chuck D on 07.15.11 at 9:01 pm

Your revolution is over, Mr. Lebowski. Condolences. The bums lost. My advice is to do what your parents did; get a job, sir. The bums will always lose. Do you hear me, Lebowski?

#6 babblemaster on 07.15.11 at 9:02 pm

Greed.

#7 Ginny on 07.15.11 at 9:06 pm

Wow! This guy is in deep trouble. I agree, he should have sold the house for his asking price, it may be too late now. Vancouver sure seems to be drying up now. Lots of for sale signs and no real activity.

#8 cata on 07.15.11 at 9:07 pm

OMG…….FIRSSSSTTTTT????!!!!

#9 Maxamillion on 07.15.11 at 9:09 pm

“I can calculate the motions of heavenly bodies, but not the madness of people.” Sir Isaac Newton

#10 Dan M. on 07.15.11 at 9:09 pm

We should all have this guys problem…but GT is right…grow up and maybe grow a set while he’s at it.

First?

#11 Mr. Lee on 07.15.11 at 9:11 pm

This story is like so many that I have heard of in Calgary. Contractors and self employed people who fall upon hard times and are not very prudent with the money that they made in the past. When I was a kid (now 41) I was told about the story of the grass hopper and the ant. How one creature lived for the day and the other, knowing full well, that winter would come worked to prepare. Well the ant made it and the grasshopper, well you know the rest.

It appears that we have a lot of grasshoppers to contend with that will discover the hard way the true feeling of a long cold winter.

#12 I pity the fool who drinks soy milk on 07.15.11 at 9:17 pm

Today’s entry really got me thinking Mr. Turner. So many of my colleagues (I’m late thirties) dream of the day in the not-too-distant future where they can rot in a Muskoka chair all summer and play florida/arizona golf all winter. So much human capital and potential turned into bumps on logs. Collectively, we deserve the “Long Emergency” even though it will likely never arrive.

#13 Dave on 07.15.11 at 9:31 pm

Windsor has some of highest property taxes in the country with 0 economic prospects.

Its for old folk looking to move somewhere to die.

You can’t even get a family doctor here and wait lists for specialists is a VERY long time.

Come to Windsor to die and get cheap real estate nobody else wants!

#14 syd on 07.15.11 at 9:32 pm

did you see the news on cbc on housing today ? they are predicting a continuing boom. crea.

#15 Sumadartson jr. on 07.15.11 at 9:34 pm

If the Canadian Dollar is near $1.05 US, What would happen to the Canadian Dollar if Interest Rates rise?

Isn’t Canada dependant on its Exporting Industry which needs a competitive low Dollar?

So why would the Cdn Central Bank of Canada allow interest rates to rise?

Doesn’t make any sense.

#16 Mr. Reality on 07.15.11 at 9:41 pm

She’s afraid of not having enough real estate?

Lol, see folks you do not have to be smart to have money…..unbelievable.

Mr. R.

#17 Not 1st on 07.15.11 at 9:45 pm

Do nothing for 1 years time. By then gold will be over $2000 and QE3 will be driving up the fake stock market bull run. You are safe until the 2012 election cycle, but then watch out.

#18 squidly77 on 07.15.11 at 9:46 pm

When Oil gets whacked, and it will, the CDN will get crushed.

#19 squidly77 on 07.15.11 at 9:48 pm

My last comment directed at Sumadartson jr.

It will likely get whacked after labour day.

#20 squidly77 on 07.15.11 at 9:53 pm

There was very nearly a major Gold sell off today. I would be very nervous holding Gold or Silver right now.

I dumped all my equities in March, except of course SIRI.

#21 Jon B on 07.15.11 at 9:56 pm

Sounds like a couple of DINKS opting to check into the good life a little too early. I think “GREEDY” sums up this guy pretty nicely.

#22 HouseBuster on 07.15.11 at 9:57 pm

Here’s some advice. Grow up.
——————————-
LOL

#23 Duke on 07.15.11 at 9:57 pm

I love you Garth! But Gold is the Bernanke PUT. If he decides to hand over trillions more to the bankers then we the common people need a way to protect ourselves. Gold is good in inflation and currency devaluation. Cash and short positions are good in case the market crashes. A little bit of physical gold and short positions will hedge well either way. And invest the rest in a government bond etf.

#24 squidly77 on 07.15.11 at 10:00 pm

I have always said that the problem with Gold and Silver Bugs is that they will never sell it. What fool didn’t sell his Silver when it was in the mid-forties, cripes if Gold hit $3,000 the Bugs still wouldn’t sell it.

And the markets know that.

#25 Lisa on 07.15.11 at 10:03 pm

It’s a Friday night in the middle of July and I am happy to read a fresh blog post from you, Mr. Turner.
The dude however, G-R-E-E-D-Y. Helllllloooo, 700k IS stupid money, moron.

#26 squidly77 on 07.15.11 at 10:06 pm

For the past 6 years I have had a buy on Suncor (SU) whenever it hits $29.99, I also have a permanent sell price when it hits $33.00, it works over and over again.

10% gains over short periods of time are very effective, going for the big kill, not so much.

#27 squidly77 on 07.15.11 at 10:10 pm

Damn meant to say 2 years, oh well.

#28 45north on 07.15.11 at 10:19 pm

I thought it time to speak up and tell you my story, as well as get some advice/support for my master plan.

“the plan”
http://www.youtube.com/watch?v=jTmXHvGZiSY&feature=related

Adrian, you turned down $700,000!

Adrian, I told Tony that he’d never again brag about the dumb-ass house he bought in Mississauga and he never has.

Adrian, this is a game of musical chairs and you just decided to go to the bathroom.

#29 DK on 07.15.11 at 10:19 pm

Adrian,
you’re arrogant and an a**hole to come to this blog where poor people, as self declared by the author, come to vent and pontificate on the terrible turn this market has taken. You might as well drive your BMW down the main street of afganastan. Listen, you have equity, you have ownership (the part the bank doesn’t own) I wish you well and in the same breath I hope the market crashes because you have something valuable that you’re not even aware off … I can’t believe I’m quoting dick cheney, but you “don’t know, what you don’t know” I wish you the worst and every other JOE on this blog the BEST. sayonnara. DK

#30 totalchaos on 07.15.11 at 10:19 pm

Here’s a cute little story. I was grousing to a neighbour today about our house. It is a bit tight for the 6 of us and there is nothing to rent in my city that will fit us. Neighbout asks why we don’t buy something bigger? I say that I don’t want a half million mortgage. Neighbour replies, why not? Everyone else has one!

#31 HouseBuster on 07.15.11 at 10:32 pm

@squidly77 – Oil isn’t going to get whacked. Get ready for a revisit of 147 and then on to 200.

#32 Kilt on 07.15.11 at 10:34 pm

I say take garths advice. Sell the gold, silver, or most of it. I am betting they will still go up, but no point in keeping more than 10% of you worth in precious metals. Balance your portfolio, dump the house and do the fixed income thing.

Kilt

#33 Dan in Victoria on 07.15.11 at 10:41 pm

I played that game Adrian.
Big ego, nice house, vacation property, nice boat, fast cars, yada, yada,yada.
Got my ass handed to me cause I thought I was so smart.
Was an expensive but valuable life lesson.
Like I say, you always pay for an education, how much is up to you.

I learned a lot of humility from that experience, changed me.
Changed me a lot…..
You’re lucky that you can come here and learn from others.
We’re all lucky that Garth has the patience to do this blog and put up with the crap.
I didn’t have anyone to slap me smart, you do.
Smarten up Adrian (In a good way) it can turn in a minute and once it starts you can’t stop it.
Been There Done That.

#34 Toxicosis on 07.15.11 at 10:45 pm

DON’T SELL YOUR SILVER OR GOLD!!!!! If Garth chooses to be monetarily foolish or suicidal staying in fiat money, let him. If that’s your hidden currency then keep it that way. Garth missed the run-up from 600 to 1600 in gold and called silver a bubble like he’s some kind of a market maven. Take him always with a grain a salt. It’s not his financial future you have to concern yourself with, it’s yours. He cannot possibly fathom an economic or bond collapse globally, but that’s his problem not yours.

#35 Toronto RE Death on 07.15.11 at 10:51 pm

I am sure you have not declared all the debts.
ANYWAY, sell 50% of gold the moment it reaches $1700. Sell the fricking bungalow now.
Retire. Do someting good (volunteer) for others, time to give back friendello.

#36 The InvestorsFriend (Shawn Allen) on 07.15.11 at 10:53 pm

Sounds like a very fake story. Has not bothered to build a house for three years despite that is what he does for a living. Well maybe he built one on request for a customer but he made it sound like he built nothing for three years.

Says he builds “custom” homes “on spec.” Duh, it’s not custom if it is not customised for the customer, perhaps he means high-end houses.

If the story is true sell everything except the cheap condo in miami and live there year round off the balanced portfolio. Play Golf.

But yeah, this is among the fakest of stories ever posted here. An obvious attempt to bait us all into a raging fit.

No one could be that dumb and yet have accumulated those assets.

#37 Helicopter Ben on 07.15.11 at 11:10 pm

#19 Squidly77 .Oil isnt going to get whacked, its going up and up for a long time. Shortages causes higher prices add in money printing and inflation and you have a major world crisis on your hands, the U.S. printing money is causing riots around the world. commodities, agriculture ,PM , oil has no where to go but up, in reality though they are staying the same its money that is free falling as it isnt anchored to anything. same with stocks , they look like they do well at times but when compared to gold they are crap and really dont make any gains as a whole. comparing prices in u.s. dollar is silly as it doesnt show the true worth. the u.s. is just trying to print their way out of the crisis, paying off their debt with cheap money and devaluating the dollar to keep up with chinas slave labor in the same time trying to fight off deflation, i really dont see how anything of real “value” is going down.

#38 pablo on 07.15.11 at 11:10 pm

Me thinks the bard’s advise is tainted with a twinge of jealousy given the lad’s accomplishments at such a tender age in comparison to his own weak accomplishments in the same time frame.
Hang on to the physical gold a little longer, the failing u.s. economy hasn’t hit bottom yet, you’ll hear the plunk when the turd hits the water in the bowl. But not selling the house at full asking price was just greedy and foolish. But I’ve gotta agree with Garth about the cottage and the condo as both purchases go against population demographics and economic reality.

#39 Jack the Lad on 07.15.11 at 11:13 pm

What’s so wrong with wanting to chill in Florida… thousands and thousands of French Canadians do it.

#40 radio free oj on 07.15.11 at 11:14 pm

“I haven’t built a specker for 3 years because I know the market will fail sooner or later. ” if you know the market will fail, then get out of it. you answered your own question.. or is the post to tell us all how smart you are having done so well in the first place?

#41 Ben on 07.15.11 at 11:16 pm

The dudes worth 1.7 and your telling him to grow up. To funny.

#42 Helicopter Ben on 07.15.11 at 11:32 pm

The U.S. is scared of china, they know if they can control the oil they can control china. Since China gets most of their oil from the middle east they want to control the whole region and in essence control the world. by going to libya they booted out the chinese, not to mention stealing all of the massive amount of gold. these humanitarian missions are nothing more then raping and pillaging to seize real assets. if the u.s. is spreading democracy and dropping humanitarian bombs on children i guess hitler was spreading humanitarian gas to the jews. Obama should be dragged out behind the white house and shot dead so he can meet his master early.

#43 AB Bust on 07.15.11 at 11:40 pm

Is this dude for real? hold out for more, greed is the nature of this beast. Seriously how bad will this dude fall in a few months when the Ontario bubble will correct, burst. good luck spec builder.

#44 a prairie dawg on 07.15.11 at 11:55 pm

Adrian,

This is just Calgary’s market.

They don’t even mention the elephants in the room. eg: GTA and Van.

Any questions?

http://www.financialpost.com/personal-finance/family/Calgary+home+prices+high+single+buyer/5096373/story.html

#45 Kevin on 07.16.11 at 12:05 am

Garth,
just a heads up, from the previous post

“#152 Ben Rabidoux on 07.15.11 at 7:45 pm

Bite me!”

this was not from Ben, but my $50 bucks says from a “prominent” Calgary realtor who likes to troll on other blogs.

But you probably know that already.

#46 Kitchener1 on 07.16.11 at 12:33 am

RE bulls this should be a wake call for you folks.
pruchased in 07 for 430k
spent 170K on property to date
total cost is 600k

Gets sell price of 700K, minus 5% RE commission 35K minus 1% (cover legal, mortage penalty, moving etc..) is 7K

Total profit 58K!!!
minus property tax for 4 years, lets say $3500/year=14K

total after property taxes 44K– lets say land transfer–when he brought the place and legals cost $4000

that leaves 40K profit. And this is at the very top of the market in absolute dollar terms.

#47 kimi on 07.16.11 at 12:46 am

If you have read this blog since 2008… then you are the idiot in this whole thing… exactly ‘why’ are you asking?????????? REALLY ???? I dont get it.

#48 kimi on 07.16.11 at 12:47 am

I mean does this guy really deserve and answer? Come on Folks? I can’t be the only one who thinks this?

#49 Young Old fart on 07.16.11 at 12:56 am

I am a middle of the road kind of guy. I don’t believe that the real doom and gloom will happen but then I also am not like some of the realtors on this blog that thinks roses come out of my @ss!!

I am fairly realistic.

But then I went to a town this last week that I had not visited since 2008. Back then I was consulting for a firm and was renting an apartment, an apartment that was on the market for $389,000.00. The market was hot but starting to cool. I was seriously considering buying that apartment to invest as the prices were still looking to go up!
After visiting this last week, I am so glad I did not purchase. That same apartment is now listed for $244,000.00!!!
All the condo projects that back then had “hurry before they are all gone” stickers on them now have for sale signs with “court ordered sale” on them. Nothing is moving, sales have slumped. I knew the market was dropping but I had no idea it was this bad. The town? Penticton BC.

And it looks like the real shite has yet to hit the fan…….

#50 Onemorething on 07.16.11 at 1:16 am

Divest of All RE right now. Even that useless condo in Miami! Take profits on PM’s and move to an emerging market and sit tight! Contract job, house builder, come on bro…your high risk!

Oh yeah, when you get to that emerging market then rent! Hire a driver, maid, cook, caddie, find a 10 year VISA there and relax. Get out of all investments tied to the USD, and currency in that emerging market, Swissy or Yen!

#51 Goldenrod on 07.16.11 at 1:32 am

When I read between the lines of that guy’s comments, I see “addicted gambler.”
He gambles that he’ll get a better offer on his principal residence. He gambles on FLA real estate. He’s about the gamble on a cottage. He gambled an amount on gold and silver that represented 70% of the purchase price of his house. He builds houses on spec, so he’s among the first builders to get kicked in the n#ts in a downturn.
He blames his wife. And he wants Garth to be his enable.
He should seek 12-step help.

#52 Beach Girl on 07.16.11 at 2:37 am

This is not related to any of the above. But I was walking my dog today and came across four neighbours having a chit chat. They are all just over the sixty mark. I will be there in six years. They are all applying for early pension benefits at the reduced rate. I asked why? They explained to me that in the long run you would get more money, because of drawing down five years early. I shut up, because I do not understand if this is correct. I am not an actuary by any means. But is this possibly true. I have paid in, I can wait till sixty-five, but is it in by best interest?

#53 Kevin on 07.16.11 at 2:54 am

“We listed it for around 700,000 recently and recieved a full price offer. Not being happy with the offer we rejected it and pulled it from the market”

Huh? I’m confused. You felt it was worth $700k. So you listed it for $700k. Someone offered you $700k for it.

Then you decided you “weren’t happy with the offer?”

You’re an idiot.

#54 Vapour Trails on 07.16.11 at 3:27 am

Hi Mr. T,
Need no convincing re: R-E. Watched your lecture in Victoria last fall with great interest (though I was sold before I booked). Currently am 1/2 in cash and the other half in 5-7%+ dividend yielding securities. Add in a few short option positions for kicks. Am ready to either jump on opportunity in the market or a principal residence if the it should present itself. I invite your abuse.

#55 TheTruth on 07.16.11 at 4:03 am

#136 Patsan previous post

Your writing skills are orders of magnitude better than your research and analytical skills.

So yeah, like you said in that post, immigration numbers have been changed to maximum 10,000-10700 per year.

Wow, a hundred year backlog because the accepted 250,000 per year the last few years.

Can’t stop laughing …. More laughing!

#56 Robert Dudek on 07.16.11 at 4:40 am

Cash in some of the PMs and buy some ultrashort base metal ETFs to protect you from a possible market crash.

Sell most or all of the real estate and buy bank preferred shares and high-yielding oil company dividend plays to provide you with steady income (hold these over the long term).

If I had your assets and made these changes I wouldn’t have to work another day in my life.

#57 Rob now in Nova Scotia on 07.16.11 at 5:11 am

Adrian,

Do not sell your gold and silver. PMs generally peak in the 4th quarter and 1st quarter. Gold is headed toward $2,000 and silver to $70 in the next 6 months. IMHO Garth is right about RE but dead wrong about PMs. $280K in PM is impressive.

Cheers, Rob

#58 bullion.bunny on 07.16.11 at 6:14 am

Sell the real estate, buy more GOLD and Silver. Only going higher, sell it when everyone wants it. Europe is on the verge of collapse, what do you think that is going to do to the price?

#59 Ronaldo on 07.16.11 at 6:27 am

A few items of interest on Real Estate in Canada

http://www.theglobeandmail.com/life/home-and-garden/real-estate/done-deals/upper-beaches-home-snags-a-106000-premium/article2098002/

http://www.theglobeandmail.com/life/home-and-garden/real-estate/done-deals/six-bidders-compete-for-west-end-bungalow/article2098007/

http://www.theglobeandmail.com/life/home-and-garden/real-estate/buying-and-selling/canadian-real-estate—a-piggy-bank-for-chinese-investors/article2055668/

http://www.theglobeandmail.com/report-on-business/economy/housing/home-sales-rise-while-prices-ease/article2098495/

http://www.theglobeandmail.com/report-on-business/video/video-how-is-canadas-housing-market-holding-up/article2098637/ Francis Fong, TD Economist on Canadian RE….finally someone with brains …….listen

#60 Steevo on 07.16.11 at 6:30 am

http://www.moneyville.ca/article/1025676–housing-market-hot-streak-coming-to-an-end?bn=1

#61 Ronaldo on 07.16.11 at 7:07 am

For those that didn’t get to see this link, I thought I would post it once more since we are nearing the Aug. 2 date where the U.S. has to raise the debt ceiling or default. It seems that the U.S. is going in the red by 1.5 trillion per year or more. So here is what 1 trillion looks like, enjoy.

http://www.pagetutor.com/trillion/index.html

Here is something else you may wish to ponder. The U.S. holds approx. 8100 tonnes of gold in reserve or roughly 1/4 of all reserves worldwide. The value of that is about 400 billion or 4/10 of 1 trillion. If they were to sell the whole lot to help pay their bills, it would only keep them going for about 3 months. Kinda makes one wonder what will happen to the price of gold doesn’t it? Maybe Adrian, you should cash in all your real estate and go all in on gold. You’re a gambler, right?

#62 Sail1 on 07.16.11 at 7:15 am

#53 Kevin

Kevin your missing the point. The listing price was a teaser, he actually thought he could get multiple offers. This is the new way of listing property don’t you know. Get with the program.

#63 TEMPLE on 07.16.11 at 7:20 am

Hi Garth, I think that having money in equities is a smart move for Adrian, contingent on what kind of stocks he holds, of course. He is still fairly young, so why shouldn’t he be heavily invested in the asset class that is the best performing and lowest risk over long periods of time?

I don’t see how it is possible to achieve a 7% return with preferred shares and bonds at this time. It might have been possible in 2009, but an admittedly quick look at some Canadian bank preferred shares shows them trading at a premium to redemption value, and with a dividend between 5 and 6%. As high as that is, if the preferred shares are redeemed, an investor might incur a capital loss which offsets the appeal of the high yield. I don’t see much advantage over bank common shares, which are also paying a hefty dividend.

My point is, why mess around with preferred shares, when you can buy common stock and not only get a good yield, but also claim a part of the equity of the company as well? I am not saying I would buy Canadian bank shares (on the contrary, actually), but there are plenty of high yielding, value-priced companies on the US and Canadian exchanges right now. Especially the US exchanges. Buying US has the further benefit of avoiding, and possibly profiting from, deteriorating economic conditions in Canada if the currency exchange rates adjust accordingly.

Thanks again for your blog, by the way- it is a great resource.

TEMPLE

The average dividend yield on the TSX is 2.17%. The inflation rte is 3.4%. So much for your theory. — Garth

#64 Mr Buyer on 07.16.11 at 7:38 am

sitrep Japan… Fukushima, they have closed the cooling circuit on at least one of the reactors (if not more) and have replaced sea water with fresh water. The contaminated sea water is being filtered and treated as much as possible (no idea of the actual effectiveness of the process) and that sea water is being released into the ocean. They are attempting to install lead shielding in the most belligerent of reactors (I believe it is reactor 3). The latest quake in the region of magnitude 7.3 had little adverse effect on operations.
In regards to clean up costs, three government employees have reported to me that salaries are to be decreased 8 to 10 percent for a period lasting anywhere from 1 to 3 years and their bonuses have been decreased over 20% (one person usually received a 1 million yen, about $12k Canadian, summer bonus and that was deceased to 800k yen, about $9.7k can). There have also been rumors of further cuts to what we know as baby bonuses but they are only rumors presently. There are a number of other cuts that I have no direct knowledge of.
On the production front they entered the phase a few weeks ago that involves improvements in present supply chain efficiencies. Upstream suppliers changed and reduced holiday schedules to maximize production downstream. Devastated subcontractors are being provided with necessary space and equipment in house and at no cost. Another point worth noting is that supply chain efficiencies are superseding competitive considerations with supplies being shared amongst competitors all to preserve market share. While I have been reasonably assured it is happening, I have asked friends for specific examples in which subcontractors are asked by parent companies to supply competitors. The overriding consideration is preservation of market share on a national level. Companies supplying North American and European companies have been asked to relocated manufacturing facilities to safer regions of Japan and these requests are being honored. New state of the art facilities are to be constructed (in some cases construction is already underway) in regions not known to be impacted by tsunamis.
Public honors for people simply doing their duty as expected is not done here really (it is somewhat embarrassing if not shameful). Having said that, I wish to thank the samurai that stood by their posts and are working the problem in Fukushima. They have served to protect their nation and fortunately for me as a result my family.
On a personal note my daughter is now in grade 1 here and after teaching her how to carryout additions such as 47 + 39 and subtractions such as 45 – 18 I thought we were set on the math front for the remainder of grade 1 at the very least but such is not the case. We just received a shocker from her teacher when the teacher recommended that our daughter and her mother take summer classes so that our daughter can improve her speed and efficiency.

#65 Sky on 07.16.11 at 7:40 am

@ Helicopter Ben ( # 42 ) :

“The U.S. is scared of china, they know if they can control the oil they can control china. ”

I hate to break it to you, Ben, but the US military is PROTECTING Chinese oil interests in Iraq.

snippet :

‘In a little over a year, CNPC, China’s main oil producer with revenues of more than $188 billion and a 1.5 million-worker payroll, has won large stakes in three Iraqi oil fields. The total production target for those fields is around 3.5 million barrels per day—close to China’s domestic output. In two of the ventures, China is the controlling partner…’

http://www.businessweek.com/magazine/content/10_05/b4165044386657.htm

http://www.nytimes.com/2011/06/29/world/asia/29chinairaq.html?_r=1

So, the US military bombs the hell out of Iraq to get rid of Saddam’s non-existent WMDs and to control the oil.
But where oh where are the American oil companies ?

‘Not a single U.S. company secured a deal in the auction of contracts that will shape the Iraqi oil industry for the next couple of decades.’

http://www.time.com/time/world/article/0,8599,1948787,00.html

How could it go so terribly wrong ? It didn’t. It went exactly as the power elite planned. Iraq is crawling with Chinese, British, French and Russian oil companies. And the US military is there riding shotgun.

It’s a deep rabbit hole … controlled by psychopaths.

#66 Mr Buyer on 07.16.11 at 7:44 am

I do not mean to suggest a permanent cooling circuit has been installed in the reactor. It is a temporary jury rigged affair but the cooling loop has been closed meaning much less contaminated water escaping.

#67 eaglebay on 07.16.11 at 8:22 am

#42 Helicopter Ben

Boy, are you a winner. Spewing your garbage here doesn’t make you look very smart.
Oil will go up of course and so will the markets.
The US will do just fine and so will Canada. Loser.

#68 Toon Town Boomer on 07.16.11 at 8:37 am

Pure Greed!

#69 Daisy Mae on 07.16.11 at 9:32 am

Dan on 07.15.11 at 8:57 pm “Think it might be an idea to take some off the table with the precious metals, but many advisers see gold at $2000 and silver near $75 by the end of the year; huge potential profits from current levels.”

Precious metals are extremely volatile. Adrian should have sold the house for asking when he had the chance. He’s in for a major disappointment. Not doing so boils down to just plain greed.

#70 Peakoilist on 07.16.11 at 9:33 am

#42 Helicopter ben..you said, “Obama should be dragged out behind the white house and shot dead so he can meet his master early.
wth ! what kind of racist rant is that..do you have to stoop that low in this blog..hateful !! ( we noticed how you skillfully inserted the word “master” in there.substitute for god)

#71 kimi on 07.16.11 at 9:38 am

#32 Dan in Vitoria said ‘You always pay for an education, how much is up to you’
————————————————
Well said Dan.

#72 Bottoms_Up on 07.16.11 at 9:46 am

Late 40’s with that type of net worth. Here’s a forward-looking projection of my own situation, and hopefully this helps Adrian figure out what he should do.

I spent the years 1997-2009 pursuing higher education and obtained a Ph.D…..cost me tens of thousands in tuition, and lost opportunity of benefitting from the housing boom (because I was forced to rent my accomodations all those years).

I now have a public sector job. I net out at around $4000/mo. I have a mortgage with a 35 yr am, and have to borrow to pay my property taxes. I can barely afford to put food on the table for my two dependents, let alone acquire any type of net worth.

Best case scenario my wife soon gets a similar job and we could live comfortably and reasonably save $18,000/yr.

So in 15-16 years (putting us into our late 40’s), if things go well and we keep our jobs, we could have around $400,000 in net worth (assuming growth of our savings), plus assume 50% equity in our house. Giving an overall net worth of $600,000.

Adrian is looking at 3 times that money. And yet it is all tied up in illiquid real estate. Adrian, think of how many others would gladly trade places with you. Think of what you need to do to protect your money. Diversity is the only free lunch. And diversity doesn’t mean owning real estate in three different postal/zip codes.

Seems like a no-brainer to me.

#73 kimi on 07.16.11 at 9:51 am

#42 Eagle bay and anyone eles.
I have a question, since some of today is about money. I am a novice, I get the RE thing, but what about the US Dollar and the CDN Dollar? Will the CDN keep going up, will it ever be lower than the US again? How does that work and what are the predictions there?
For all my life I have never seen the US higher than the CDN, will this be the norm? I would love to learn your views on that. How does it work? Thanx (:

#74 kimi on 07.16.11 at 9:52 am

I meant I have never seen the CDN dollar higher than the US in my lifetime… sorry typo, should have proof read it. opps

#75 Roxana on 07.16.11 at 9:55 am

@32 Dan in Victoria:
I would kill to hear your story – about the nice life and how you learned your lesson. I will save it for my kids.
Please-please-please share!!!!! Your story will be learned by 2 wonderful kids and will prepare them for the big life.

#76 Helicopter Ben on 07.16.11 at 9:59 am

#66 eagle bay….. loser? ha ha. ok, i try to be polite on here so i will just say this . the U.S. is going to do just fine? you are not a very observant person are you. you almost have to go out of your way trying to avoid all the facts to come to this conclusion this late in the game. #64 Sky….. I just dont see it, spending trillions on wars to protect china when they just booted them out of Libya, agree to disagree.

#77 Peakoilist on 07.16.11 at 10:11 am

Probably the little wify is guilty too..can’t you just hear her chirping in on the other side?..let’s hold out honey bear for more..lets see if we can get more….the poor guy is probably whipped..poor thing. She made him get the cottage,’cause the GFs all have one..he agreed only if he could buy the South beach condo..what a pair…who’s going to cry the loudest when the house of cards comes tumbling down?There’s no voice of reason in that household.

#78 Helicopter Ben on 07.16.11 at 10:16 am

#70 Peakoilist……. save your racist rant, I said should shoot him cause he is evil, he could be purple for all i care, while you are back there take the bush jr with him. and master is for the devil. I am not the one who is killing innocent people for oil, but if you say it people look at you like you did it. i think there is something seriously wrong with you if you arent outraged by these wars. unless a bomb was dropped on your family in the name of oil and you didnt mind.

#79 Ben Rabidoux on 07.16.11 at 10:17 am

Garth,

Yesterday, someone posted a comment under the previous post using my name. It was a rude and ignorant comment directed at you. I would appreciate it if you could please compare the IP address from my posts and this other poster and acknowledge that this comment was not mine.

We may not agree on everything, but I can assure you I wouldn`t write that. Likely one of my resident trolls posting under my name.

Regards,
Ben

Just checked. You have posted on this blog recently under three separate IPs and several different names. They all contain links back to your own site. The email addresses provided for all comments, including the one in question, are consistent. Do you have an evil twin? — Garth

#80 Ben Rabidoux on 07.16.11 at 10:18 am

Garth, just to add, it was comment #152. Could it be removed?

#81 Ben on 07.16.11 at 10:19 am

How Much Is $14 Trillion Anyway?

$14,000,000,000,000

That’s the size of the U.S. National Debt.

A stack of 14 trillion one dollar bills measures 949,200 miles.

That’s more than two round trips to the moon.

Distance from the Earth to the Moon is 234,878 miles; dollar bill is .0043 inches thick.

#82 Sumadartson jr. on 07.16.11 at 10:20 am

Friends, relocate to where the Food, Water and other Natural Resources are in abundance.

Bay St, Wall St, Ottawa and Washington are not the answers.

Hint, Western Canada

#83 Smoking Man on 07.16.11 at 10:23 am

Anyone catch the front page of the star today.

Headline Housing=po po

LMAO two weeks ago on this blog I said the media will put cold water on RE, because the market is on fire and Carneys coconuts are in a knott. He can’t spike rates.

The Star the paper that makes huge dollars pumping RE. Why?

What does this tell me………………..

Market must be RED HOT.

ps my condo closes on Thru

LATWTTB

Ok It means Laughing All The Way To The Bank

#84 cb on 07.16.11 at 10:27 am

I read this blog everyday and am continually surprised at the level of animosity on here. Relax, people (you know who you are).

#85 Killer Chicken or Imploding Boomer? on 07.16.11 at 10:28 am

52 Beach Girl – just google “cpp breakeven” and you’ll find some good links including:

http://www.nupge.ca/node/1991

#86 Daisy Mae on 07.16.11 at 10:31 am

Beach Girl. “They are all applying for early pension benefits at the reduced rate. I asked why? They explained to me that in the long run you would get more money, because of drawing down five years early.”

Wrong. They will NOT “get more money”.

The government estimates we will live an average 85 years — and calculates our CPP based on that figure.

Withdrawal at age 60 results in accumulated contributions spread over a 25-year period and pays a minimum benefit.

Applying at age 65 (20-year period) results in a higher benefit.

Applying at age 70 (15-year period) results in a much higher benefit.

#87 Ben Rabidoux on 07.16.11 at 10:34 am

Just checked. You have posted on this blog recently under three separate IPs and several different names. They all contain links back to your own site. The email addresses provided for all comments, including the one in question, are consistent. Do you have an evil twin? — Garth

Garth, my email address is on my website. It’s easy enough for anyone to get. Give me the benefit of the doubt here. That was not my post.
And I have not posted under several different names. Do you assume that every article of mine posted on this site was done by me?

I don’t do DNA. — Garth

#88 Grim Weeper on 07.16.11 at 10:40 am

#52 Beach Girl

http://www.financialpost.com/personal-finance/retire/Making+most/4988376/story.html

http://www.financialpost.com/personal-finance/taxes/Timing+application/5108888/story.html

#89 randman on 07.16.11 at 11:04 am

“There was very nearly a major Gold sell off today.”

Yeah and there was very nearly a sunny day in Vancouver….

See the idiocy of both statements?

#90 Mister Obvious on 07.16.11 at 11:17 am

#52 Beach Girl

I am not an actuary by any means. But is this possibly true. I have paid in, I can wait till sixty-five, but is it in my best interest?”

To be quite blunt, it all depends upon when you plan to die.

#91 squidly77 on 07.16.11 at 11:36 am

“There was very nearly a major Gold sell off today.”

Yeah and there was very nearly a sunny day in Vancouver….

See the idiocy of both statements?

Well randman if your holding Gold and U.S. debt ceiling is raised this weekend it’ll be an ugly day for you come Monday (Sunday actually).

#92 BrianT on 07.16.11 at 11:45 am

#74Kimi-The most likely scenario sees the US dollar going way down the toilet bowl and basically dragging the Cdn dollar with it. Our MSM focuses solely on the US dollar exchange rate (currently 1.046) yet the Cdn dollar has devalued greatly versus the Swiss Franc and even Australian dollar. The other issue is that the economy of southern Ontario (outside of TO) is very questionable with an extremely high US/Cdn rate (e.g. 1.20)-IMO there is an effective ceiling on the Cdn dollar which makes it shaky as a longer term store of value for this reason.

#93 Young Old fart on 07.16.11 at 11:50 am

… I would appreciate it if you could please compare the IP address from my posts and this other poster and acknowledge that this comment was not mine.

We may not agree on everything, but I can assure you I wouldn`t write that. Likely one of my resident trolls posting under my name.

Regards,
Ben

Just checked. You have posted on this blog recently under three separate IPs and several different names. They all contain links back to your own site. The email addresses provided for all comments, including the one in question, are consistent. Do you have an evil twin? — Garth

LMAO…. BUSTED!!! Be sure your sins will find you out!!

Ah crap….gotta clean my closet……….. ;o)

#94 Ronaldo on 07.16.11 at 11:51 am

#86 Killer Chicken – thanks for the link. I have been following Richard Shillington for several years now and was because of running across his website several years ago that I started unwinding my RSP’s before reaching 65….it also enabled me to retire at age 54. As Garth as pointed out on this blog, RRSP’s can turn into a real trap for people down the road as it would have for me and my spouse. I’ve transferred RSP’s to our TFSA’s since any gains do not affect any income based benefits such as mentioned in Richards web site.

The gov’t saved billions of dollars over the years from people who were not aware of the GIS since individuals who turned 65 had to apply for it. It was not automatic. You would be alarmed to know how many retired inidviduals who struggled to make ends meet who were not aware of this benefit.

Nowadays, when you apply for your old age pension as I did, there is a box that you check to say that you are applying for the GIS. After that, it is no longer necessary as the system will automatically determine your elligibility based on your previous years income.

Indeed, 40% of retired individuals will be elligible as stated. Given what we know and what Garth has told us regarding the savings rates, pensions, etc. of Canadians today, it is not surprising.

For the younger individuals saving for retirement and not expected to have a company pension down the road, load up your TFSA’s as this is the best thing since canned milk. I wish that they had instituted this 25 years ago when I seriously started saving for retirement.

Many people, especially those with good company pensions will find themselves in a clawback situation with their RSP’s down the road. It’s a huge tax grab for many especially once you reach age 71 and have to convert to RRIF.

I recently brought this to the attention of a good friend whose husband passed away a few years ago (she’s 63). She was left in a very good financial position but has over 100m in her own RSP. I suggested she talk to her accountant about this and the conclusion was that she start drawing down the RSP’s prior to age 71.

Everyone’s situation is different and persons should contact their accountant or a good fee based financial advisor to determine if RSP’s are right for you. We know they are right for the financial services industry who are in the business of selling mutual funds since they make a tonne of money in MER’s on these funds, but are they right for you?

#95 Utopia on 07.16.11 at 11:53 am

“As for your liquid investments, time to harvest profits from the precious metals. Also time to exit equities. You have far too much risk in this portfolio, given the likelihood of sustained volatility ahead of us. Besides, you need income – the kind you’d get with a more balanced portfolio including preferred shares, corporate and high yield bonds, government notes and lots of ETFs”. ~~Garth
————————————————–

Sounds like pretty fair advice to me. Stays conservative and avoids the risk trades for the moment. There are a lot of worries now (there are always a lot of worries) but there seems to be an escalation of momentum towards hazard right now.

Next week we may finally know if Greece will be in a technical default following meetings with the ECB. The debt ceiling issue in the US will be front and center as the clock ticks down and here in Canada we may have a new rate announcement based on higher than expected growth.

Bernanke meanwhile is soft pedaling new stimulus and keeping mum on his next move so that ball is still up in the air. If this was all just mad theater then it is one hell of a juggling act between so many different interests.

Caution is no doubt what we want to be exercising right now. There are quite a few here pumping gold lately but I have my doubts. Too many variables and unknowns right now and I do not agree that all instability is positive for metals. Neither am I alone in that concern for precious metals prices.

Here is a guy I like to read named P. Radomski and he has done some respectable technical analysis in the past. You can follow up on his doubts about Gold and the Gold Miners here:

http://www.sunshineprofits.com/commentary/15-jul

#96 Macrath on 07.16.11 at 11:53 am

#74 kimi
The Canadian and Australian dollars are up now because of the demand for commodities and the higher interest rates, than those available in the US. There are plenty of other factors as well.

Will this last forever ? NO. It is a good time to get some money invested internationally. Try some TD e-funds for an appetizer.

#97 Ronaldo on 07.16.11 at 11:57 am

#90 Randman – agree with the idiosy of statements by this individual. Sometimes I wonder where he comes up with them. Likely pulls them out of a hat. By the way, have you been loading up on silver since the big adjustment?

#98 poco on 07.16.11 at 12:00 pm

squidly–#26 & #27

For the past 6 years I have had a buy on Suncor (SU) whenever it hits $29.99, I also have a permanent sell price when it hits $33.00, it works over and over again.

10% gains over short periods of time are very effective, going for the big kill, not so much.

—-Damn meant to say 2 years, oh well.—
______________________________________________

Well I guess you haven’t had any shares in Suncor since May of 2010. That is the last time the share price fell below $30.00–check the charts —you’ve posted some other idiotic stock quotes etc in the past–where do you get your info–just make it up
Anyone taking and using stock advice from a blog has got rocks in their head—-

#99 Echo on 07.16.11 at 12:05 pm

My broom got so much exercise in the early 90’s sweeping up guys like you I had to toss it out and start using a bulldozer. Wise up sunshine.

#100 bbcoq on 07.16.11 at 12:18 pm

With this guys appetite for risk he should start buying and tearing down Vancouver ranchers and spec building in Vancouver……

#101 Golden Stu on 07.16.11 at 12:19 pm

Adrian……..

Generally when you invest in something, you will sell when you see a change in the basis for your initial decision. If you think something has peaked or reached a top based on changing information then sell, if not hold.

Some people buy gold because it has been rising, some buy it because they understand WHY it is rising.

Gold (and silver) is money, clear and simple. The financial crash of 08, is still ongoing, nothing has changed or been fixed.

When the governments of the world stop the unlimited printing of “paper money” and debasing our savings with inflation then I will sell my PM’s. Until then I will hold them.

My only advice is make sure you are holding ALLOCATED gold & silver, NOT paper “promises to pay” such as SLV & GLD….. AND …. keep it out of the banking sector. Go visit BullionVault or GoldMoney instead

Maybe Garth is just too trusting of people to think the Bonds, Prefs etc are the nirvana of income. Personally I think before this episode of life is over the full scale corruption the banking sector and politicians will be clear to see.

If you want “cash flow” out of PM’s it simple. If you want a 7% income, then every few months when the price of PM goes up another 7% simply sell some.

An essential interview for everyone with interest in PM’s to listen to is here. This interview will be dug up in future as a classic case of “I told you so”

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/3/31_GATA.html

Gold (and silver) are not money. Money is a medium of exchange. Precious metals are stores of wealth, but they are not currency. You can’t be that naive. — Garth

#102 Imstupid on 07.16.11 at 12:27 pm

Here is a true story…

A guy put a deposit of 100k on a 1.5 mil home. 50k 1st deposit, 50k second deposit and was going to put 50k as third deposit, he walked on deal. The builder told me that he would sue if the custom home sold for less than 1.5 million as was the agreement with the buyer that walked. I said nothing but I don’t think the builder has a leg to stand on because the timed deposits are terms to break contract. The builder kept the 100k so this should void the contract. I of course said nothing, just let him rant. Am I right in my conclusion or does he have the right to sue for damages if he doesn’t get 1.5 mil when he does end up getting buyer?

You bet he can sue. — Garth

#103 TurnerNation on 07.16.11 at 12:38 pm

An update for King West condo market in Toronto, found on another forum. Don’t forget the condo fees at .50-.60/sq foot!!

2 more 475sf units went on at market at 75 Portland and sold for $282K and $300K ($631psf without parking).
other sold units with parking:
Unit 409 – $455k, $620psf
Unit 319 – $560k, $607psf

55 Stewart is seeing high demand, especially in higher end units:
Unit 818 – $389K, $608psf without parking
Unit 507 – $625K, $542psf
Unit 439 – $655K, $630psf
Unit 314 – $845K, $670psf (1262sf, 1 day on market, 100% price)
Unit 824 – $925K, $630psf (1468sf, 2 dom, 100% price)

#104 Robins on 07.16.11 at 12:39 pm

MLS®: V860114
For Sale: $8,500,000 [weird-Mingpao quoted $6M lower]

sale history
2008 September 05: $1.545M [owner: Lai Chang-xing]
2009 May 01: $1.545M

According to Mingpao, asking price on 2010-Nov-25 was $2.2938M [weird-unknown to people who read MLS.ca]
http://www.mingpaovan.com/htm/News/20110715/vaa3.htm

Either our system has lots of loopholes, or the authorities just keep a blind eye on money laundering.

#105 ryan on 07.16.11 at 12:40 pm

# 49 young old fart – I also have made these same observations having visited the okanagan each summer since 07. In 2008 a property was listed for 970,000 didn’t sell of course and is now once again listed for 670,000 and in my opinion still way over priced. The urgency of buy now in 08 is all but faded, good for those that waited. Now there is no confidence no interest or panic buying this market as prices start to free fall.

#106 LS on 07.16.11 at 12:44 pm

Just watched property ladder on TLC. Don’t know when it was filmed but I would assume a while ago. It was a house in Santa Barbara, paid $1.1, put in about $100,000 in renos and sold it for $1.399. Doesn’t include carry costs etc. Anyhow, not my point.

Wish I could find a picture of it. Nothing special, reminds me of what would sell on the west side of Vancouver. It was a tract house with a lipstick job, a nice lipstick job, but still a tract house!! Anyhow, I just looked up the cumulative price correction in Santa Barbara here (page 28.):

http://www.economy.com/home/products/samples/case-shiller-methodology.pdf

From 2006Q1 to 2010Q3, down 45.6% which would bring this $1.4 million house to $756,000.

Sobering… actually more than sobering.

#107 Utopia on 07.16.11 at 12:45 pm

Are we on the verge of a fresh liquidity crisis?

That is the question in the minds of some as the US money supply (M2) has grown dramatically over the past two weeks, clocking in at more than eight times the usual rate.

My sneaking suspicion is that a Greek default is indeed in the cards and the Fed is taking steps ahead of that event to ensure the stability of the financial sector. Some US banks are a little over-exposed to a Greek default. We would not have immunity here to what happens there.

There can be no doubt though that this is a time to be extremely wary on the markets as the system is being flooded with liquidity in preparation for…..who knows what.

But it cannot be good.

You might recall how the credit crisis in the recent past kicked the beans out of the markets and even sent Gold tumbling as many covered positions. It is the linkages between different investment classes that meant almost everything was impacted at once.

Here is one guys take over at Seeking Alpha. The chart alone should be setting off the alarm bells. Are markets again being goosed? Is a steep inflationary trend ahead and is devaluation in the works? Is action being taken simply to head off a deflationary spiral or rather are the wheels of the system being greased in anticipation of a major liquidity event?

http://seekingalpha.com/article/279710-money-supply-growth-alert

Interestingly, there does not seem to be a consensus on what is taking place even amongst floor traders.

Confusion about the moves are prevalent as there have been no formal announcements. My gut tells me the Fed may in fact be front-running the next potential financial crisis but that is a rogue view and I certainly cannot see into the future on this one.

Zerohedge commentary:
http://www.zerohedge.com/article/no-there-nothing-strange-about-surge-adjusted-monetary-base-past-two-weeks

#108 bill on 07.16.11 at 1:06 pm

ozzie jurock has a problem…..

please have a look at david baines column in the vancouver sun.
it seems a condo development wasnt what it was advertised as or purported to be and a class action suit is being contemplated.

#109 Hoof - Hearted on 07.16.11 at 1:08 pm

Top 10 most indebted G20 nations

http://money.ca.msn.com/investing/gallery.aspx?cp-documentid=29516186&page=10

#4 GERMANY

Debt as % of GDP: 78.8
Total est. debt: $4.71 trillion

While it has stood in support of Greece’s faltering economy — Chancellor Angela Merkel agreed to foot much of last year’s $155 billion bailout package — Germany is not without its debts, too. Germany carries the third-highest external debt of the world’s countries, and it’s not slowing down. From 2009 to 2010, as a percentage of its GDP, Germany’s fiscal liabilities grew by 6.3 per cent.

5. United Kingdom

Debt as % of GDP: 76.5
Total est. debt: $8.98 trillion

Even outside the G20 membership, the U.K. holds the second-most highest debt of any country on earth. And unlike other nations, which are slashing unemployment as the economy heals, there are several red flags hiding in the U.K.’s fiscal profile. Not only did the United Kingdom’s unemployment actually jump from 2009 to 2010 (up 0.3 per cent, a rarity on this list), its debt level similarly boomed by 8.3 per cent as a percentage of its national GDP. On a per capita basis, each U.K. citizen owes more than a whopping $144,000, a figure that dwarfs even what the average American ($45,097) is on the hook for.

7. United States
Debt as % of GDP: 58.9
Total est. debt: $13.98 trillion*

What else can we say about the United States’ debt? By the latest estimates, the U.S. owes nearly $14.3 trillion, and perhaps comparison is the best way to illustrate how obscene a number that really is. By contrast, the U.S. — whose debt level is by far the highest on earth, let alone among G20 nations — owes more than the entire European Union, which is made up of 27 countries.

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

Guess who is #1 ?

#110 bill on 07.16.11 at 1:15 pm

http://www.pagetutor.com/trillion/index.html

this is a little out of date I believe but those of us who wonder about such things ……

#111 bill on 07.16.11 at 1:19 pm

oops thought it would show the debt…..

for the year 2009 it looked like this:

http://www.pagetutor.com/trillion/usdebt.html

#112 Ronaldo on 07.16.11 at 1:59 pm

http://www.theaureport.com/pub/na/10266 Italy hold 2451 tonnes of gold. 71.9% of its reserves according to this report. Compare that to the U.S. with 8100 tonnes or 73.9%, France 2435 tonnes at 67.2% and China 1054 tonnes a measily 1.7% (no wonder they want more). You can bet that if Italy is asked to cash in some of their hoard to fund their debt that the U.S. may be next and guess who would be asking for it.

As Nadler of Kitco states, there is nothing more liquid than gold as collateral for a loan so it may be that this could be what bails some of these countries out in the end. As the saying goes, “Whoever has the gold makes the rules”. It would seem to me that the more printing of fiat money by the U.S. the better for gold since that would increase the price of gold as well as the value of their reserves. Where then is the incentive not to print more money. Just my thoughts.

Oh, I forgot, Bernanke just stated that “Gold is not money, it’s a precious metal”. In that case, it should be no problem to get rid of some of it. Not like they have any shortage of the stuff and its just sitting there collecting dust anyway. China could use a bit more since their people are getting all hot and bothered over it. Not like in the U.S. where nobody seems at all interested in the stuff. Interesting days ahead for the precious metals markets indeed.

#113 randman on 07.16.11 at 2:13 pm

Ronaldo

I would be buying if I was underweight in PM’s but
already well past Garth’s recomended percentage and I don’t want to upset him.

Having said that I am dabbling in the PM ETF’s for fun

Squidly

I couldn’t care less if PM’s drop on Monday…..In fact I hope they do to shake out weak hands like you

I’ll just scale in on my ETF’s

#114 Bottoms_Up on 07.16.11 at 2:19 pm

#99 poco on 07.16.11 at 12:00 pm
———————————–
Most charts do not show intra-day lows. So it’s possible he picked up SU at 29.99 even though the price on the chart doesn’t go that low.

#115 Jody on 07.16.11 at 2:24 pm

Dear Garth,

Wifey and I don’t know what to do man. We have a house in North Vancouver thats only worth $2.3 million, a condo in Arizona worth $120,000, and we’ve just bought a cabin with it’s own lake in Northern BC worth $300,000. We have $140,000 in gold and silver and another $100,000 in GIC’s. I direct the occasional adult video and my wife is a consultant for the sex toy industry. What should we do Garth?

Definitely start a blog. — Garth

#116 Ron on 07.16.11 at 2:32 pm

Just checked. You have posted on this blog recently under three separate IPs and several different names. They all contain links back to your own site. The email addresses provided for all comments, including the one in question, are consistent. Do you have an evil twin? — Garth

Garth – with all due respect, the fact that the posts occurred under 3 different IPs suggests that those posts were likely from different people.

I deal with spammers, trolls, and other internet lowlifes every day as part of my job. You can spot them a mile away, and Ben isn’t one of them.

I understand that. But he has a computer at home and one at the college. Plus he’s posted here under several names from the same IP. He’s free to do this all he wants. I’m flattered. Just don’t deny. — Garth

#117 dd on 07.16.11 at 2:34 pm

Adrian,

Hold your metals.

#118 dd on 07.16.11 at 2:45 pm

#92 squidly77

“Well randman if your holding Gold and U.S. debt ceiling is raised this weekend it’ll be an ugly day for you come Monday (Sunday actually)”

Do you really think the gov will not raise the debt ceiling? They have since 1971. It proves that the US has no real plan to deal with the debt. Remember G Bush Jr was suppose to have the debt well under control. Of course this was outlined in the budget in 2001.

#119 Hoof - Hearted on 07.16.11 at 2:48 pm

From Vancouver Condo Info

Parties are discussing Asian RE Blogs

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

Van MD Says:
July 16th, 2011 at 2:42 am

Help me out here (planning a response to a thread in the Chinese forum). This “hongyu.wang(at)bmo.com”, a mortgage broker at BMO, who is also a financial sponsor to the forum, posted this thread titled “If interest rate rises, will home price fall?”

too many gems: “If interest rate rises and home value does not fall, wouldn’t you regret not having bought earlier?”
“I would suggest that if you ever plan on buying, buy early! Whether interest rate rises or home price drops, the day you buy is the day you stop paying rent, work as the landlord’s slave. If 1/3 of your income goes to the taxman, and 25% of your after-tax income goes to the landlord, then you are practically a slave 50% in a year for the government and the landlord.
“It is rare for someone hesitating and waiting for home price to drop to get a home he wishes for. When home price falls, the amount of homes for sale will also fall, thus fewer choices for you.” At the end he smartly covered his behind with “Above are just my personal view, for your references only”.

He also talked about correlation of interest rate vs home price, referring to a graph about US rate vs price 1970-2006, but saying in Canada interest rate is not the main factor behind home price. He also said in 2010-2011, new immigrants have been the driving force behind CANADIAN real estate. Geez, I feel my blood pressure rising just translating his rhetoric. I’m sure there are some graphs depicting rate-to-price relationships in non-immigrant-dominant markets in Canada?

Ok, then “Horse Dragoon” replied “if interest rate rises, then home price will skyrocket! think about it, when potential buyers see a rising rate, they must hurry to lock in the rate before it rises further. Thus multiple offers and rising price! Also, bank managers will not raise rates too high, or else even they can’t afford the houses at high rates and must resort in renting in a cockroach-filled, curry-smelling crappy apartment with an Indian roommate!” (Gosh, the Chinese often complain of racial discrimination, but they are often the more discriminating ones!)

/end rant

#120 Jody on 07.16.11 at 2:52 pm

Back to reality.

Here is what governments used to say long ago before ultimately brainwashing you all to believe in toilet paper money.

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

and from the UK in the Daily Telegraph

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8638644/Return-of-the-Gold-Standard-as-world-order-unravels.html

#121 Peter Green on 07.16.11 at 3:23 pm

I’m a loyal reader of this and Ben Rabidoux’s blogs. Despite the childishness exhibited between you two, I’ll continue. Everyone has bad days, but let’s be adults about it and move on.

Mr. Rabidoux has been posting here for some time under assumed names, prodigiously linking to his site. I agree. That’s childish. — Garth

#122 squidly77 on 07.16.11 at 3:37 pm

You are correct I did not buy at the bottom, however I did not sell either, mainly because I held nothing. I cashed ou during May 2007 16 months before the crash, sure that was early and I missed quite a bit a top, but I am not a good gambler, no SS balls for me in-fact I am a very flighty investor.

Since 2010 I think I have been in and out of Suncor 5 times I think. I agree with 100% that nobody should take stock picking advice over the Internet, preferred shares are o.k. as they really aren’t much of a gamble.

#123 Government Dude on 07.16.11 at 3:37 pm

@DK #29:

“Adrian,
you’re arrogant and an a**hole to come to this blog where poor people, as self declared by the author, come to vent and pontificate on the terrible turn this market has taken. You might as well drive your BMW down the main street of afganastan… I hope the market crashes… I wish you the worst and every other JOE on this blog the BEST. sayonnara. DK”

WOW!

Don’t hold back DK really tell how you see it! LOL!
So if I get you right this blog attracts poor, envious people? Or is that just you? In any case, this is a free country so feel free to get off your chair and start a business to make money. What’s with the BMW in Afghanistan?

#124 squidly77 on 07.16.11 at 3:39 pm

http://finance.yahoo.com/q/bc?s=SU&t=2y&l=on&z=l&q=l&c=

#125 squidly77 on 07.16.11 at 3:42 pm

I just checked my account, it was 7 times and it yielded me 10% each time.

#126 steve p on 07.16.11 at 5:28 pm

Adrian is good for nothing. he should sell and go to the mall everday. he has no job prospects for the rest of his life. sell you arrogant, as hole, idiot

#127 TS on 07.16.11 at 5:43 pm

Do you have an evil twin? — Garth

Perhaps your brother was playing a trick. Was your evil twin visiting you Ben?

#128 steve p on 07.16.11 at 5:44 pm

hey Adrian bad move punk. Rob Ford offered 17,000 non producers that work for the city of toronto a buyout. these people will be getting much lower welfare rates now.
17,000 less people in the ponzi pyramid now to buy your house. bad move

#129 squidly77 on 07.16.11 at 5:52 pm

dd

Of course they will raise the debt ceiling, only those holding Gold think they wont, they re salivating for a U.S. default.

#130 Bottoms_Up on 07.16.11 at 6:23 pm

#117 Ron on 07.16.11 at 2:32 pm
———————————–
It’s very easy to post from different IP addresses: home, work, library, parents, friends, siblings etc.

#131 mid-Ontario on 07.16.11 at 6:34 pm

Adrian – Sell the house asap and take whatever you can get.

Put a few extra dollars into the new cottage for comfort.
Adjust to living the good life. There are several good people in cottage country.

Fortify the basement.
Fill the fortifications with PM’s.
I don’t have to sell you on the reason why you should buy more.

Sleep well knowing that your assets are very liquid and will rise with folly of the banks and politicians.

The dream world we all live in is about to change big time and not for the better.

Watch Greece this Summer very closely.

The debt ceiling is very real but will be kicked down the road as always.

What a farce the US system has degraded into.

Follow this advice and be very happy.

#132 TEMPLE on 07.16.11 at 6:53 pm

The average dividend yield on the TSX is 2.17%. The inflation rate is 3.4%. So much for your theory. — Garth

Hi Garth, you are not making the correct comparison here. The average yield on the TSX is, as you note, around 2.1%- but this includes many companies that pay little or no dividend. You have to compare apples to apples- you can get a much higher average dividend by selecting appropriate common stocks. Just like you are not blinding buying a preferred share index fund, the dividend-seeking investor is not suffering the paltry average yield of the TSX. Inflation is applied equally to all returns, so the inflation rate is moot in this comparison.

My point is that many common stocks are paying yields that rival preferred shares, as well as having a higher likelihood of realizing capital gains. Over time, the returns on common stocks significantly exceed the returns on preferred shares- this is fact. I am not automatically criticizing your recommendations for allocating capital to preferred shares, but certainly for someone like Adrian, with a long time horizon and a demonstrated appetite for risk, favoring preferred shares over common stock is a bit too conservative. Especially because with a net worth north of a million, Adrian’s relatively small allocation of 230K in stocks is already very risk adverse.

I’m all for yield, but I think you overemphasizing the yield of preferred shares and ignoring the quality of common stocks.

Anyhow, thanks again for your comment and blog, all the best,

TEMPLE

#133 eaglebay on 07.16.11 at 6:58 pm

#108 Utopia
“That is the question in the minds of some as the US money supply (M2) has grown dramatically over the past two weeks, clocking in at more than eight times the usual rate.”

Curious here. Where did the money come from?

#134 dd on 07.16.11 at 7:09 pm

#130 squidly77

“… only those holding Gold think they wont, they re salivating for a U.S. default”

Actually holding gold and knowing that the US will not techicially “default” is not a contraction. Gold has climbed this wall of worry for 10 years and been through many debt ceiling increases.

It is the realization of western debt and the slim chance of repayment that gold holders salivate over. Noticed over this past week Italy being thrown to the wolves? We haven’t even solved Greece’s problems yet.

#135 need a mortgage on 07.16.11 at 7:15 pm

The truth is, most home IP addresses are dynamic and change regularly. Unless you were recording it, you would never know.

#136 Golden Stu on 07.16.11 at 7:21 pm

Re #102
“Gold (and silver) are not money. Money is a medium of exchange. Precious metals are stores of wealth, but they are not currency. You can’t be that naive. — Garth”

Garth, it depends on your point of view, you are right in that PM are a store of wealth, however I would argue that “currency” is the medium of exchange where as the real wealth of a person or country (Money) is defined by the physical assets they hold. The definition of “Money” or “Currency” depends on the interpretation and is really a moot point.

All “currencies”, Dollar, Stirling, Yen, Euro etc, whatever currency want to compare are ALL dropping in value against PM and have been for years due to politicians running the printing presses to keep themselves elected.

Every country is in the same boat, all drowning in debt with no chance of ever paying it off in full. The solution is either default or print “currency”. The more they print, the higher PM go.

All the worlds central banks are now net buyers of Gold, where as for the past decade they were Net Sellers. The worlds currency ran for thousands of years with some form of backing of Gold to limit the money that could be printed. Since the US defaulted on its obligations back in the 70’s and ditched the last link to gold, the worlds reserve currency has flooded the world with printed US$.

What we are witnessing now is a return of the worlds “Money” to some form of asset backed “currency”.

The naivety lies in thinking all these “I promises to pay you” bits of paper such as bonds will ever pay back anywhere near the value you paid for them.

You are confident you can play the game and get in and out of bonds and come out ahead, I congratulate you on that, I personally rather buy and hold PMs. Its a much easier life with far less risk!

Anyway….if we all had the same views the world would be a boring place and this blog would not exist , and I love the blog, like reading your views, just don’t necessarily agree with everything.

Argue all you want. I need dollars to gas up my Hummer. That’s money. My goal is to always have lots. — Garth

#137 TurnerNation on 07.16.11 at 7:34 pm

Never before have so many owed so much to so few!

(A rough Churchill quote or a description of today debtor class home owners vs. bankers? :-P )

#138 Government Dude on 07.16.11 at 7:35 pm

#99 & #119:

That squidly77 guy is a nut case. He says just about anything & regularly contracdicts himself.
On his blog he calles for $70 oil by now, Calgary average home prices at $160K, etc. Crazy guy…
I did not know guests of the Alberta Hospitals had access to computers…

#139 jess on 07.16.11 at 7:42 pm

“From 2006Q1 to 2010Q3, down 45.6% which would bring this $1.4 million house to $756,000.

add this: ”
..”the maximum FHA, Fannie Mae, and Freddie Mac conforming loan limit will decline to $625,500 beginning Oct. 1, 2011, from the current $729,950 limit, though the majority of counties will fall far below the $625,500 maximum. The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee. Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.”
——————–

Entitlement programs
“The u.s.a.military is the nation’s largest and most firmly entrenched entitlement program, one that takes half of every tax dollar”

Bruce Gagnon writes:
Across the nation colleges and universities are turning to the Pentagon for greater research funding as Congress and successive administrations have cut back on scientific research and development investment. As this trend worsens we find growing evidence that engineering, computer science, astronomy, mathematics, and other departments are becoming “militarized” in order to maintain funding levels.

Chalmers Johnson estimated in 2004 that as much as 40% of the Pentagon budget is “black”, meaning hidden from public scrutiny”

“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed … . We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people.” – Dwight David Eisenhower, “The Chance for Peace”; speech given to the American Society of Newspaper Editors, April 16, 1953.

The military as a jobs program
By Ellen Brown
http://www.atimes.com/atimes/Global_Economy/MF22Dj02.html

#140 jess on 07.16.11 at 8:01 pm

ontario trade

Produced by International Trade & Marketing Division, Ministry of Economic Development and Trade

Goods Exports 2010
(% of global goods exports)
United States 78.78%
United Kingdom 7.63%
Norway 1.52%
Mexico 1.19%
China (5) 1.04%
Top 10 Goods Exports 2010 (HS4 Code) C$ (000’s

Copper waste & scrap $116,061
Raw furskins $94,616
Copper ores $66,825
Nickel mattes $64,583
Machinery for working rubber & plastic $63,399
Synthetic rubber $62,683
Polyamides $48,102
Aluminum waste & scrap $47,499
Metal foundry moulding boxes, bases, etc. $46,077
Ferrous waste & scrap $35,748

#141 Joseph [original] on 07.16.11 at 8:05 pm

The United States is not Canada I know but still an eye opener to digest, an article citing US home prices to decline yet another 20 percent.

http://www.moneynews.com/StreetTalk/gary-Shilling-Plunging-Home/2011/07/15/id/403741

#142 GrimBot on 07.16.11 at 8:13 pm

Well…it must be official….the time to sell before the crunch has already gone by… How do we know? Front page of the Saturday Star…. i.e. homes in for 25% price decline. By the time the MSM reports something it is already too late!

Also, interesting piece on major condo problems in Alberta re: shoddy construction now resulting in huge condo repairs and ‘special assessments’ on condo owners. Some of these ‘special assessments’ have been as high as $170.000 per unit! Apparently this has caused some personal bankruptcies etc.

Everything contains an element of risk….

#143 GrimBot on 07.16.11 at 8:16 pm

Re: Adrian bragging on the blog about past successes and cash purchases of real estate…. I suppose with no income and his wife’s consulting practice dead in the water that’s all he has….memories of past successes…?

Best to find some immediate income generation and forget past glories.

#144 Utopia on 07.16.11 at 9:01 pm

#120 Hoof – Hearted

Maybe you can explain why you published that crap at post #120 Hoof. What the hell is your agenda anyway?

Rant off.

#145 Al on 07.16.11 at 9:12 pm

HAM is getiing rid of their paper money and buying real estate as well as PMs

#146 pablo on 07.16.11 at 11:18 pm

#116 Hey Jody, good one, LMFAO dude

#147 Cash is King on 07.17.11 at 6:07 am

Condos have been shoddily built during a housing boom resulting in major repair costs for their owners!?!?
Boy that’s a surprise. Never happened before in BC, or Ontario, or Quebec etc etc.

Condo’s….today’s Ford Pinto

#148 TurnerNation on 07.17.11 at 9:41 am

Received this in my email, Garth on internet radio:

http://talkdigitalnetwork.com/2011/07/week-money-25/

■Garth Turner – On real estate – an auction you want to hear about.

#149 TurnerNation on 07.17.11 at 10:05 am

How much value could a realtor add in an overheated city market (Toronto or Vancouver) when people are buying houses with no conditions attached not even a home inspection?? This is straight out gambling and emotional buying driven by 2.5% mortagage rates.

People will exercise greater caution and dilligence when buying a pair of jeans.

And with good Toronto downdown condos selling for peaky $550-650 sq foot, condo fees at .50-/60sq foot, would the realtor ever against such a purchase? Never.

What we are witnessing is over the top emotional buying with all facts set aside.

#150 jess on 07.17.11 at 1:06 pm

Proposed $125 Million Settlement Reached in the Kitec Plumbing Class Actions
WINDSOR and LONDON, Ontario, June 28, 2011 /CNW/ Kitec’s Canadian manufacturer, as well as homebuilding companies and plumbing contractors that installed Kitec fittings, have been the target of a series of massive class-action lawsuits

defective fittings known as Kitec

The settlement relates to Kitec Systems sold under various brand names including Kitec, PlumbBetter, IPEX, AQUA, WARMRITE, Kitec XPA, AmbioComfort, XPA, KERR Controls and Plomberie Amelioree. The Kitec System is a type of plumbing product, the components of which include Kitec fittings and Kitec pipe. The Kitec System was used for a variety of applications, including hot and cold water distribution in plumbing applications and radiant heating systems in homes, residences, buildings or other structures. The settlement covers class members throughout Canada and the United States.

#151 Dorf on 07.17.11 at 1:34 pm

Ha ha, greed is the name of this story. This guy can’t bear the thought of cashing out at the peak, he wants to wait until he experiences a strong long term decline, just like everyone else who lost their shirt waiting too long.

Who cares ? Obviously the guy is horribly bored with his life in spite of all of his excesses, I surmise his wife is an expensive habit and also a bore. He keeps her because of what she will take if he kicks her to the curb.

Here’s my advice: Cash in your wealth and spend the rest of your days snorting coke off a hooker’s bare ass.

Or, kill yourself, your life is over. You made it to the finish line and it don’t get any better than right now.

I can’t believe you have been reading this long and you are still not a believer. Some people just never get it, and I would be personally embarassed to admit openly that after all this time I still just do not F^%%@# get it ?!

#152 jess on 07.17.11 at 2:02 pm

Incentives –
body bag culture…or the scalpers of the past

10 years and over $8 billion dollars of US assistance to Colombia. Was this money being used to kill “rebels” who weren’t

14 July 2011

“A Colombian army colonel has admitted his unit murdered 57 civilians, then dressed them in uniforms and claimed they were rebels killed in combat. ..The scandal arose from a body bag culture in the army, in which soldiers were rewarded with prestige and promotions according to the number of rebels they killed…Borja’s unit was operating in the northern province of Sucre when the murders, for which he has been convicted, were perpetrated.

Most of the “false positives” occurred under the two administrations of President Alvaro Uribe. He is credited with beating back left-wing rebels who threatened to overthrow the state.”
===

History is a nightmare from which I am trying to awake.” Just … “Shut your eyes and see.”
— James Joyce (Ulysses)

#153 Neo on 07.17.11 at 2:54 pm

Can someone explain to me how the U.S. Debt to GDP is only 60% when there GDP is $14.7 trillion and there debt is $14.3 trillion. Isn’t that pretty much 100%.

#154 TurnerNation on 07.17.11 at 5:28 pm

#108 Utopia on 07.16.11 at 12:45 pm

Ewetopia! What did Garth say, stay away from those pop culture doomer blogs. ;)
This is your doom right here buddy.

#155 garrulous squirrel on 07.17.11 at 5:52 pm

According to Thackrays research the best time to exit gold and gold stocks is between September 25th and Oct 9.

Full price offer rejected? Very suspicious……see “Invitation to Treat” under Contract Law. And BTW the ‘headcount’ on ‘networth is way off. We’re forgetting about the depreciation in Miami since ’08 and didn’t we double count the 700K?

The bubble is full of people in denial….thats the definition of ‘being in a bubble’. When you’re inside the bubble you can never get enough….when it bursts you can’t give it away.