Denial

Janette’s sister, she says, is a pain. “Knows everything.” Right now sis is on a crusade to convince Janette that in the economic storm she’s certain is fast approaching, real estate’s the safest place to ride things out.

“Fixed income pays nothing and bonds are following suit. We see everyone now flooding into gold/silver whenever the market shakes a bit, oil also to a lesser extent. And sadly, cash is only king as long as inflation doesn’t get out of hand.” A house, she concludes, is the rock.

Janette sent me a thread with her sister, hoping I’d give her some siblingcidal lines. I did. But I doubt any revelation’s coming. These days, in a confused world, people tend to believe the bits of news that suit them. This woman says bonds are useless, commodities are a shelter and cash is suspect. It’s a popular myth. Dangerous, too.

This will be a big week, of course. Tuesday, markets roil in the wake of Friday’s no-jobs report in the US. Wednesday, brother Carney diddles with interest rates, but will leave them untouched. Thursday, Barack Obama announces a mama of a new stimulus plan to create jobs and save the housing market. Chances of it happening are slim. And it all pops against a backdrop of dithering overseas, while both Canada and the States flirt with a new recession.

2011 was not supposed to turn out this way, but the summer months have brought a dramatic and unexpected weakening in the States and political paralysis in Europe. The greatest impact on us, of course, is the American malaise that has resulted in stuff like (a) only 55% of employable Californians working, (b) 27% of all families with a mortgage being under water and (c) the virtual collapse of the construction business. This has stripped American tourists from our coasts, shut down the softwood lumber business and tanked our exports. Soon it will also torpedo the price of oil, and other commodities, and reduce the price of a crappy aluminum trailer in Fort Mac to under $500,000. The horror.

For those who think real estate’s safe in this tempest, while bonds and cash are trash, surprises await. All of the above points to a re-emergence of deflation, which will be about as much fun as Janette’s next family dinner.

Deflation happens when things slow down, economies cool, demand falls, people struggle and – as a result – prices fall. The best example of deflation right now is the US real estate market, which has lost a third of its value, on average, and ain’t done yet. No matter how cheap the feds make interest rates, with too many jobless and too little income growth, prices will not reverse their losing trend.

Deflation caused by zero or negative economic growth also crashes the price of crude, along with base metals, because demand fades. And, most impactful on a nation where 70% of people own houses and have borrowed their buns off to afford them, deflation rewinds real estate values. Of course, deflation does not reduce debt or make it easier to repay – that’s inflation. But it does knock down prices, which erodes equity, and that makes existing debts proportionately larger.

This is what happened south of us. I hope you were watching. Those who tried to ignore it, saying they’d just hang on to their homes and weather the damn deflation thing, chose badly. Six years later their properties are worth significantly less. They often cannot afford to sell, since they no longer have equity. They can’t move to chase jobs or opportunities. And, as I said above, almost a third of them now owe more than they own.

Canadians, like Janette’s genius sister, think this is irrelevant. Can’t happen here. Prices will never go down. And if they did, who cares? Just live in your house and veg, because things will eventually come back.

Many American economists now say it will be 2025 before houses regain 2005 levels. If true, it will be the longest bear real estate market. It’ll mean an underwater couple in their 50s will for a decade or more make mortgage payments which come right out of their net worth and add not a penny to their wealth. Or walk, and lose their home. For young couples with big hopes and little equity, this kind of two-decade-long cycle could mean they’re trapped in one house, in one city, for the most formative years of their careers – and come out of it without a dollar saved.

No wonder these are the three main real estate trends right now in the US:

  • Renting over buying. Growing numbers of potential buyers would rather save and invest in liquid assets, be free and mobile, than gamble on a house.
  • Going small. Those who are buying are opting for smaller, more modest homes without expensive frivolity like SS and G-tops.
  • Staying put. Five years ago a third of people had owned their houses for less than three years. Now it’s just a tenth. Real estate’s no longer seen as a financial asset, a speculative commodity or a futures play. Merely a house.

Deflation, by the way, makes cash and bonds more valuable, as it makes debt more unrepayable.

But some things you’d never wish on your sister. Much.

160 comments ↓

#1 The InvestorsFriend (Shawn Allen) on 09.05.11 at 10:01 pm

Predictions are always difficult – especially when they are about the future.

Yogi Barra (paraphrased)

Oh well, whatever, it’s all good entertainment.

#2 Young Old fart on 09.05.11 at 10:05 pm

and they wonder why the rich get richer……

keep being stupid sheeple…..

#3 Stinky the Fish on 09.05.11 at 10:14 pm

I’ll sit back and watch this non-sense unfold. Later will snatch up a cheaper house. Snatch that sh-t up like a vulture. Sit on a lawn chair, drinkin a brewski, and laugh at those folks who paid double. Savin up cash at the moment. I am the lesser fool. Oh ya

Recession in Europe, United States and after that it’s Canada. Very easy prediction to make at this point. Deflation a moderate possibility,

#4 The world needs Deflation on 09.05.11 at 10:19 pm

Deflation would correct the bubble of credit once and for all. I love deflation Garth since my money would be worth more. What’s not to love deflation? I wish at night we would see a 1930’s crash/deflation. In fact I wish for worse then that. My money worth more! It would be a dream to buy goods without to have to compete with other’s who have no money but only credit. During the 2008 crash I spent more money then I have the past two years . I bought a truck for $35000 new when they normally sell for $55000. Oh no Garth I saved $20K. What about the $500 leather jacket I paid $200 plus taxes. Oh no ….Deflation is so bad. 2008 was THE BEST YEAR of the 2000’s. Deflation means NO MONEY can not buy anything and money is money and if you have money you are king. Right now credit is king. Garth , I know you believe or repeat the banker inflation propaganda but you tell me how money having more value is bad?

#5 T.O. Bubble Boy on 09.05.11 at 10:20 pm

Tomorrow (Tuesday) the GTA RE numbers should come out… it will be interesting to see if that brutal mid-month average detached SFH price recovered at all over the second half of the month.

Look for the press release:
http://www.torontorealestateboard.com/market_news/release_market_updates/news.htm

#6 cendrine on 09.05.11 at 10:22 pm

What do you make of this? Oil might not go down….

http://www.zerohedge.com/news/guest-post-where-our-oil-price-collapse

#7 pat on 09.05.11 at 10:29 pm

i am afraid BoC will drop rates hence more housing frenzzy.

Can BoC do this or has the high consumer debt tied their hands?

#8 Smoking Man on 09.05.11 at 10:35 pm

Yo !!!!!!
Smoking Man to Garth

Dude did you not see Major Stock Market collaps in Europe today? Blood Bath

Don’t feel bad Bloomberg missed it too..

The short that I put on on thur WOW, if what happns tommorow what I think is going to happen..

And if it does, old craney will be thinking when am I going to drop rates…

#9 BC Bring Cash on 09.05.11 at 10:38 pm

I believe like Garth that Real Estate Bubbles are all around us. Canada, Australia, China ETC. However the deflation is only in the Real Estate sector. Hyper Inflation will result in more QE’s by the Fed. Reserve. Prices at home here in Canada are already rising. Visit the grocery store. Almost all fresh produce is a Buck a pound or more. Check out what Lew Rockwell has to say about inflation.
http://www.silverbearcafe.com/private/08.11/hyperinflation.html

Lew who? — Garth

#10 vyw on 09.05.11 at 10:43 pm

#4 Deflation = high unemployment, social turmoil, lower exports, lower income (debt “costs” more), lower demand, higher deficit, lower dollar, lower prices resulting in…higher unemployment, social chaos, export prices are competitive but no buyers overseas, lower income, lower demand (or no goods because the plant is now closed and no new cars for sale), even higher deficit and still lower dollar, still lower prices resulting in…well you get the picture.

Govt austerity will lead us into this deflationary spiral.

#11 City Slicker on 09.05.11 at 10:44 pm

#5T.O. Bubble Boy on 09.05.11 at 10:20 pm
Tomorrow (Tuesday) the GTA RE numbers should come out… it will be interesting to see if that brutal mid-month average detached SFH price recovered at all over the second half of the month.

Look for the press release:
http://www.torontorealestateboard.com/market_news/release_market_updates/news.htm
—————————————————————–
My prediction is the second half of the month will be worse. July end of month was 30k lower than mid month, I’m guessing Aug could very well be worse, seeing how its closer to end of summer.

Garth where can I get Calgary numbers like what TREB posts?
thx

#12 Betty Danin on 09.05.11 at 10:45 pm

We need to see deflation in all government workers benefits, wages, pensions by at least 30% once and for all. The taxpayer’s piggy bank is running empty and the pigs can pig out somewhere else.

Pigs like cops, teachers and doctors? — Garth

#13 Led on 09.05.11 at 10:46 pm

I agree with Garth on just about everything with the exception that interest rates are going up. It hasn’t happened and won’t for a long time. we should be so lucky. eventually low interest rates stop working, and you don’t even need a pop in the housing market. it just becomes a car going down a hill, eventually it stops, no brakes needed.

#14 deaconmoss on 09.05.11 at 10:48 pm

Log on everyday and learn more and more. Garth has been there for us. We were going on blind faith believing in a system that is no longer viable. My blind faith anyways. Thanks as usual for your informative blog. It has saved the Mrs. and me from more colossal mistakes, ie more real estate. Not! Sold one last year a barely got scratched. Still learning about ETF, preferred shares and the like. Will stick to it until it sinks in. Keep on truckin, Garth.

#15 timo on 09.05.11 at 10:54 pm

perfect and to the point Garth, now what are you going to do for an encore?

http://market-ticker.org/akcs-www?post=193551

“Since 2008 the Federal Government has been attempting to prevent this monstrous credit bubble from deflating. A credit bubble that has accumulated approximately 25 trillion dollars of credit beyond what our economy can reasonably support. A credit bubble that the World Economic Forum said would have to double again to produce the so-called “economic growth” that has been claimed to be “expected.” Yet that growth, averaging about 4%, would only lift our $15 trillion GDP to $22.2 trillion in ten years, while adding 50 more trillion in debt.

What leads anyone to believe this can happen, when the reason we went off the cliff in the first place was excessive debt? We’re supposed to believe that we can support double the current amount of debt with 48% more output?”

Get a calculator and crunch the numbers people. We are in a huge credit bubble that is deflating and will only slow with helicopter printing.

keep your money safe and fluid.

#16 Bill Grable on 09.05.11 at 11:03 pm

If only for the brilliant writing – not just the unvarnished truth, this blog constantly blows me away.
Mr. Turner, thanks for the effort even with your punishing schedule.
This is a daily must read.
Safe biking and can’t wait for the new book.

#17 Cookie Monster on 09.05.11 at 11:07 pm

Gath, correct your article with Find and Replace the word ‘deflation’ with ‘inflation’.
I don’t know how anybody can see deflation when the global motto is zero to negative interest rates and print, print, print.
Just because houses are set to fall, does not mean all prices will fall in unison. All governments are debtors so all governments are printers. If governments had savings (a cold day in hell) then sure we’d have deflation, but hell’s still hot and governments are all maxed out. The Fed bought 90% of the USA’s debt this past year. That’s INFLATION. GOD!

#18 RumbleGuts on 09.05.11 at 11:09 pm

Zero Hedge is the bomb, a must read for all.(besides the Greater Fool)
Here’s a great article as well. ;-)

http://www.cnbc.com/id/44373049

#19 Bill Gable on 09.05.11 at 11:10 pm

Lew Rockwell and Max Kaiser are prominent on Russian Internet sites.
Uh, always consider the source and their incentive to talk ‘their book’.

#20 The InvestorsFriend (Shawn Allen) on 09.05.11 at 11:14 pm

DOW futures down 240 points at this hour.

a mere flesh wound…

#21 cool on 09.05.11 at 11:14 pm

#4 The world needs Deflation,

I agree with you 110 %

#22 JohnnyBravo on 09.05.11 at 11:26 pm

The Beard at the Fed recently announced (capitulated, really) that deflation in the real economy could not be stopped, not even by the most powerful central money-making machine in the world.

But the money supply must keep growing or the Ponzi will implode, so money will continue to be pumped into the system by whatever means necessary. As a result, the forces of Inflation and Deflation are waging an epic war on a scale never seen before in history. This is not a single battle event, but a roiling, protracted struggle with surprise attacks and counter attacks.

If one side finally and decisively wins the war, the results will be earth shattering. Perhaps the best outcome we should hope for is a silent stalemate brought on by utter attrition. No systemic collapse, no hyperinflationary blow-off. Thus, the war can pass with the vast majority of citizens not even aware that it had occurred.

Some cheer for a deflationary collapse in which cash becomes king and asset prices crumble. They wait patiently, longingly by the curb, hoping, praying that that house they want will come back down to earth. Others root for high inflation to wipe away impossible debts and to pretend assets are worth more than they really are.

But what we should all be hoping for is an end to systemic fraud and an economic recovery that will allow us to once again generate real wealth that is fairly distributed according to merit, so that we can grow our way out of the biggest “buy-now-pay-later” party of all-time.

Because unless that happens, prices won’t really matter. They can collapse, or they can explode (or both). But in either case, for the vast majority of us, life will become less affordable. Perhaps drastically so.

#23 OttawaMike on 09.05.11 at 11:26 pm

Nic Taleb writes on CNN about the great Bank Robbery by the US banks.
His solution: don’t invest in banks due to ethical reasons.

http://globalpublicsquare.blogs.cnn.com/2011/09/02/the-great-bank-robbery/

Rob Reich former labour secretary writes in the NY Times about the change in US labour balance. The oftwominds .com site has written much on the same topic.

http://www.nytimes.com/2011/09/04/opinion/sunday/jobs-will-follow-a-strengthening-of-the-middle-class.html?_r=1&pagewanted=1&ref=general&src=me

#24 dd on 09.05.11 at 11:45 pm

“We see everyone now flooding into gold/silver”

Funny, I read this everywhere but I still only know 2 or 3 people that actually own the metal. Gold and silver still make up less than 1% of most people portfolios. This comment is utter BS.

Case: At the local coin shop people have been SELLING gold to the dealers.

#25 dd on 09.05.11 at 11:49 pm

#12Betty Dani
…We need to see deflation in all government workers benefits, wages, pensions by at least 30% once and for all…

Wake up BD, it is happening. Government Pensioners in BC have just seen some of their benefits dropped this year. This year it is the dental benefit that was cut.

#26 Robert Dudek on 09.05.11 at 11:49 pm

Generalized deflation won’t happen for longer than a few months. Bernanke won’t allow it… they don’t call it a fiat system for nothing.

#27 dd on 09.05.11 at 11:51 pm

“Tuesday, markets roil”

In wake of the sell off of the German bank by 8% today (monday). Bank still have to delever.

#28 [email protected] on 09.06.11 at 12:01 am

Crud! Deflation – I wouldn’t have sold the bonds thinking I hit a high point last week. Tuesday has a bad feeling for everything in the market. Regarding American mortgages, Garth is there any chance the President Obama would force write downs like this article (http://www.bloomberg.com/news/2011-09-06/for-the-u-s-economy-the-real-slam-dunk-answer-is-debt-forgiveness-view.html) suggests?

#29 dd on 09.06.11 at 12:04 am

“Deflation, by the way, makes cash and bonds more valuable, as it makes debt more unrepayable”
”””””””””””””””””””””””””””””””””””””””””””””’
True, however, if this is off set by massive amounts of monetary stimulus therefore cash and bonds are dead in the water. Inflation is baked into the pie already, it has already occured. The price increases seen today are the result of QE1 and QE2.

Deflation … in financial assets that have been over priced. Now reality is setting in about the actual real cash flow.

Inflation … the printing of money will cause the price of crude, along with base metals to increase in short order.

#30 Dave on 09.06.11 at 12:34 am

City Slicker, creb.com has the monthly numbers for the Calgary real estate market.

#31 Waterloo Resident on 09.06.11 at 12:40 am

Deflation or Inflation?
Frankly, I sort of feel that we are following Japan’s footsteps into Deflation, we simply have WAY TOO MUCH personal/government/corporate debt to go any other way.

But funny things happen on the way down this deflation path, cheap cars get expensive and expensive cars get cheap. Let me give you an example:

Last year my old Corolla was sputtering so instead of fixing it I decided to go to a used car dealer (in Guelph) and buy a 2006 Corolla for only $8,000. Now, one year later 4-year-old Corollas are selling for $11,000 because nobody can afford to buy new, so the used cars and heading WAY UP in price.

Meanwhile, back then a nice used Porsche 911 would be selling for about $45,000. But now, I see ads for them going for a song, like this one selling for only $20,000

( http://www.autotrader.ca/a/Porsche/911/TORONTO/Ontario/19_4379066_/ )

I mean, if I was in a market to buy a used car today, i would buy the 2002 Porsche, NOT the 2006 Corolla, its a much better value for the money.

Like I said: very strange times indeed.

#32 Chris on 09.06.11 at 12:41 am

Smoking Man. I’m so proud of you. You can read! Being able to quote the Globe and Mail about what happened in European markets yesterday (early today) must make you feel so special… As if perhaps you just got the list from the master… Good for you. And those imaginary ‘puts’ you been placing, brilliant! Just like those lessons you been giving to your boy about how to play the Great Gatsby and lie one’s way into the corporate world. First rate old man. BTW, if I actually thought you had the intelligence to run trading algorithms and decoy algoriths, or to make anywhere near the money you claim to at trading or poker, I might come down to Windsor. As it sits, I’ll laugh at you over the net.

#33 Nostradamus Le Mad Vlad on 09.06.11 at 12:44 am


After a terrific day out, large barbie with drinks flowing freely, I come back to a barfspewmunchfest like this. Nevermind. Garth’s site needs nutheads like yers trooly to keep audiences panting for more!

“A house, she concludes, is the rock.” — A rock built from Bran Flakes? That is, by far and away, the WORST safe haven (along with PMs) that anyone can have. but it is their choice. Just don’t expect taxpayers to bail out over-extended Property Virgins, when they could have rented.
*
Pattern Hmmm. Seems to be a panic pattern developing in the west. Wonder why? Terrifying Speech Not that long ago, a link said that if the Euro banks tumble, US banks will follow; UK Total anarchy? Central Banks warning, and A bankrupt bank takes over another bankrupt bank; Looting Derivatives About time the banxters had their pockets picked.

O’bomba What would the outcry be if China ordered the WH, Pentagon and super congress stripped of all powers? What goes around comes around; Fourth Reich The German Reich exists; ‘Quake Last night a link said a bunch of volcanoes were acting up, today a medium-sized ‘quake; 13:40 clip NATO ravaging Sirte, worse than Gaza; Because it has nothing to hide, Iran has offered full supervision to UN (the UN is a joke); 9-11 has led to seven countries invaded in five years, all because of one person who died in Dec. 2001.

#34 Waterloo Resident on 09.06.11 at 12:44 am

(” Pigs like cops, teachers and doctors?” )

I thought about that for a while.
What if we are in a totally bankrupt society, what would you ABSOLUTELY have to have with your last dollar?

Cops!
Without law and order you die.

So yes, the teachers go, the doctors go, the firefighters go, only the cops are kept.

That is what happens when society collapses.

#35 tran, Calgary on 09.06.11 at 1:14 am

http://www.bloomberg.com/markets/stocks/world-indexes/europe-africa-middle-east/

Holy cow! Europe just did a “Fukushima”.

#36 BPOE on 09.06.11 at 1:15 am

You betcha. The media is finally getting it! Folks Vancouver is going to make New York look like a cheap backwater. We got the REAL goods here. Better backdrop, way way wayyyy higher demand and the best restaurants and city life to boot. Anyone see the papers the other day with all the kids with the new driver symbol getting arrested for speeding. Folks , make way for the mega rich, the creme de la creme is moving in

http://vreaa.wordpress.com/2011/09/05/vanhattan-vancouver-the-next-new-york-these-ludicrous-comparisons-have-to-stop/

#37 BPOE on 09.06.11 at 1:16 am

Interest rates are being lowered within 25 days

#38 Snake Pliskin on 09.06.11 at 1:25 am

We made the commie news!

http://www.youtube.com/user/russiatoday?blend=1&ob=4#p/u/22/Kckanxh1uWU

#39 NWO on 09.06.11 at 1:33 am

#3 Oh yeah and don’t forget tommorrow

Obama will go Blab Blab Blab, Blame Blame Blame and do absolutely nothing. He will try to create BIGGER Government which is the only thing this Rookie knows to do.

I trust he will get it wrong again, and that is why the markets will continue to crap out. After that Greece will have to pay more bills, Germany will have to let this bad hand fold at some time and then the rest of the Euro is under siege.

As for the US a couple more storms, bad debt huge bailouts all amounts to bigger debt. Things definately doesn’t look pretty for the states and they are dead broke. Their dollar is really junk, but the world allows them to print (counterfeit) more and more dollars. You would think China, India, and Russia must be thinking seriously of de-basing the green back

All this happening in the world and people are still buying Canadian real estate like dogs in heat.

#40 Thetruth on 09.06.11 at 2:31 am

Thought I’d throw this out there again,

Based on BC Stats data, the population of the province of BC (excluding immigration and interprovincial migration) will grow by 120,000 over the forseeable future. In about 15 years, it will start declining (again exclude aforementioned). What does this mean?

The general scenario applies to most all provinces. IMO, it basically means RE value outside the 2 major cities is screwed! Sure there may be a local 4 plex to pick up but nothing that will rise in value. As Garth says, its cooked.

Vancouver and Toronto are different as their populations will continue to grow for the foreseeable future and land use restrictions will increase. I’m not touting that immigration will save RE. Just pointing out that over the next 10 years, Vancouver will grow by about 560,000 (500,000 from immigration and 60,000 from natural increase).

Its the day after Labour Day, Do the Math!

#41 Thetruth on 09.06.11 at 2:33 am

Also, The Okanagan area of BC is screwed as well. Especially the retirees wanting to move there argument. Why wouldn’t retirees from other areas in Canada buy in Phoenix??

#42 Aussie Roy on 09.06.11 at 2:54 am

Aussie Update

Families in mortgage stress

http://www.dailytelegraph.com.au/families-in-mortgage-stress/story-fn6e1lzz-1226128811169

Australians are falling out of love with debt and that means pressure will remain on house prices this year as potential homebuyers hold off tapping banks for bigger loans to land properties, according to analysis by Deutsche Bank.

http://www.smh.com.au/business/house-prices-to-stagnate-as-debt-binge-ends-report-20110906-1juz1.html#ixzz1X9VhAwJZ

Steep price falls and weak demand hits property sales.

http://smh.domain.com.au/real-estate-news/grim-news-still-dogs-real-estate-20110906-1jv0e.html

Prices still falling dont buy now.

http://www.prosper.org.au/2011/09/01/house-prices-falling-at-9-5-don%E2%80%99t-buy-now/

It was the most read Domain article nationally over the weekend. We have received hundreds of emails from people eager to see the film. We are doing our best to get it out there.

In a generally positive review, Vadelago critiques the Real Estate 4 Ransom film on some important points that as Co-Director I must expand on:

http://www.prosper.org.au/2011/09/05/right-of-reply-r4r-in-fairfax/

SHOP workers’ penalty rates should be cut so the retailers can compete in an increasingly tough market, the industry says.

http://www.news.com.au/money/money-matters/retailers-want-to-cut-workers-wages/story-e6frfmd9-1226129716296#ixzz1X9WWQyrQ

Quick buy now houses prices never go down, its different here, we have a shortage. – Delusional.

http://au.news.yahoo.com/thewest/a/-/wa/10169055/boom-time-in-housing-shortfall/

#43 timo on 09.06.11 at 3:21 am

http://www.batteries-home.co.uk/

“There is no precedent. It would be extraordinarily fraught,” he said by phone from Washington. He said leaders have perhaps four months before borrowing costs for Italy and Spain reach the point where they cannot afford to refinance their debt. World leaders, he said, “cannot stand by and watch the biggest default in history unfold.”

nothing to see here…move along and keep buying r/e. It always goes up!

#44 Aussie Roy on 09.06.11 at 3:27 am

“There is a handful of people around the world whose work I respect because it intelligently addresses facets of our current predicament that I don’t”.

The economic and demographic analyst Harry Dent is one of those people.

Harry uses empirical data about consumption levels and population growth to accurately predict economic trends. A person’s consumption patterns change as they age, so information on the rate of growth of population and its age characteristics can be used to predict what consumption will probably be of a given commodity some years in the future.

http://www.debtdeflation.com/blogs/2011/09/06/harry-dent-in-australia-september-october/

#45 Jon in Cowtown on 09.06.11 at 3:34 am

Do I note a change in tone Garth, things ain’t so rosy anymore. Deflation is and has been a possibility for some time as iterated by many. How goes happy investing from here on in?

Investors who understand the terrain always do just fine. — Garth

#46 Onthesidelines on 09.06.11 at 3:58 am

Deflation? Maybe. Hard to call it this time me thinks. China is inflating, the era of dirt cheap consumer goods will be coming to an end. Vietnam is cheaper but a minor player as are all others in comparison. What will drive deflation then, when the cheap labor is finally gone?

Historically, nations have inflated their debt away, making paper money worthless. I’ve yet to hear a good argument why this may not be the scenario facing advanced nations.

My best guess as to what’s coming is the worst possible situation: inflation AND rock bottom interest rates. Debt will continue to grow, buying power will errode and savings will have no place to go except to gold, realestate and the stock market as, indeed, has been the situation already. Volatility and uncertainty will continue for some time still. Povery, unemployment, homelessness and crime will increase worldwide. There will be no real recovery until the current capitalism-on-steroids economic system crashes and burns….eventually, and is rebuilt with more robust regulatory control to be more responsive to a much wider spectrum of societal needs.

There is light at the end of the tunnel, but it’s going to be a very long time before the pileup gets cleared and anyone can come out the other end.

#47 House on 09.06.11 at 4:14 am

I guess you are no longer expecting Markie to raise rates this year. Wasn’t that part of the plot raise rates and plop real estate prices. Markie is a disappointment just like know-it -all Ben.

#48 Aussie Roy on 09.06.11 at 4:18 am

Aussie Update

Stamp-duty exemptions for first-home buyers in NSW have been tightened in a bid to spur building activity.

From January 1, 2012, first-timers in the property market will no longer be able to avoid having to pay transfer title charges on existing homes under $600,000.

Property developers welcomed the NSW coalition government’s 2011-12 budget measure, which will see stamp-duty exemptions restricted to newly built and “off the plan” homes, in an effort to stimulate building activity.

http://au.news.yahoo.com/a/-/latest/10197371/home-stamp-duty-exemptions-tightened/

#49 westopia on 09.06.11 at 4:26 am

These are not deflationary times. Gold is 1900+, oil is down, but gas prices are up. Compare your grocery receipts to prior year(s). Inflation is upon us and economic growth is non existent. The Greaterfool word of the day is… “Stagflation”

#50 Chris on 09.06.11 at 5:07 am

Was a European market rebound on Tuesday morning also what you had in mind Smoking Man? Sure it is. When you run your mouth about the past, your analysis is always 20/20. It’s called hindsight…

#51 Tim on 09.06.11 at 5:26 am

So oil drops on the market, but Ontario gas prices continue to rise, good thing I live so close to the border. Screw you McGuinty, see you at the polls.

#52 Off the River on 09.06.11 at 5:37 am

I’m hoping for prices of everything to get lower and for the Canadian dollar to drop while the Korean won rises against it. If that can happen, then I can convert, pack up the wife and kiddies and move back to Canada with a signifigant profit on my current savings.

Any chance in the CAD losing its value?

#53 Onemorething on 09.06.11 at 7:13 am

I smell DEBT-DEFLATION

Harry Dent is one of few I listen to! Steve Keen likes him!

http://www.debtdeflation.com/blogs/

#54 Steven Rowlandson on 09.06.11 at 7:33 am

Garth you took the blue pill didn’t you?

No, but I use them as a fuel additive for my bike. — Garth

#55 Moneta on 09.06.11 at 7:38 am

The taxpayer’s piggy bank is running empty and the pigs can pig out somewhere else.
———-
I’m so sick of this tax excuse.

If taxpayers truly paid the taxes they should have paid over the last few decades, we would not have the debt we have.

#56 Moneta on 09.06.11 at 7:45 am

Last year my old Corolla was sputtering so instead of fixing it I decided to go to a used car dealer (in Guelph) and buy a 2006 Corolla for only $8,000. Now, one year later 4-year-old Corollas are selling for $11,000 because nobody can afford to buy new, so the used cars and heading WAY UP in price.
———
It will be interesting to see if $4000 Chinese cars will ever make it here!

#57 Waterloo Resident on 09.06.11 at 7:54 am

Why does everyone have so much ANGER in them these days?

Its truly mysterious.

Just a hunch, but your posts may provoke it. — Garth

#58 TurnerNation on 09.06.11 at 8:00 am

Okay you fixed income freaks :-)

The US 20 year bond ETF, symbol TLT.US, is at $114 this morning, which is higher than its 2008 crash time high of ~111!

The safest ports in a storm. — Garth

#59 smoking man on 09.06.11 at 8:02 am

#33. Chris
You must be a teacher. I’m glad you find me funny

#60 bigrider on 09.06.11 at 8:09 am

Garth, what do you think of Harry Dent ? His predictive abilities? His advice?

He was interesting in the Eighties. — Garth

#61 Mackie on 09.06.11 at 8:18 am

I love the new election promise. Taxpayers will, if elected, pay more of the costs for our new university students by 30 per cent. I consider myself a liberal, but this attempt to buy the young people’s vote is enough for me to vote C and I hate conservatives.

#62 Kevin on 09.06.11 at 8:27 am

@The World Needs Deflation: “What’s not to love [about] deflation?”

One of my favorite segments of the TV show “Tosh.O” is a bit called “Guess What Happens Next?”

When goods are dropping in value, people put off making purchases, because they believe the longer they wait, the cheaper the item will become. So you get an economy where people have stopped buying stuff.

Guess What Happens Next?

#63 plain_janey on 09.06.11 at 8:38 am

Sisters, eh? Who’d have ’em…not looking forward to the day I move back to Canada, hopefully the RE koolaid will all have been drunk by then, but everyone will probably still be living off KD in their McMansions, mortgaged to the hilt, stressed out and watching the unemployment rate creep upwards…

#64 Ron on 09.06.11 at 8:40 am

“Staying put. Five years ago a third of people had owned their houses for less than three years. Now it’s just a tenth. Real estate’s no longer seen as a financial asset, a speculative commodity or a futures play. Merely a house.”

If people would treat they’re homes as just a house we wouldn’t be in this mess.

There once was a generation that actually treated homes as a place to set roots, raise a family, and create caring communities.

No more.

It’s mad dash speculation in the hopes of making a fast buck within a year, and then on to the next.

Foreign investors, speculators, and flippers have created what we have today, and the regular Joe is left scratching his head knowing that renting is the new “American dream”.

#65 Sky on 09.06.11 at 8:41 am

Deflation? Inflation? Stagflation? All of the above.

‘Conflation’ fits the bill. And what a con it was !

Things that will deflate: Your house price, your bank balance, productive jobs, wages, benefits, interest on your savings, the useful portion only of govt services( ie. health care ), your ego, your sense of security, hope.

Things that will inflate: Food, the price of gas, home heating, hydro, water bills, vehicle insurance,vehicle repairs, house insurance, property taxes, speeding tickets, parking tickets, GST, PST, CPP contribution rates, legal fees, red tape, govt power, cognitive dissonance, despair, poverty.

Not a pretty picture- conflation. Visualize the globalist elites and their sycophant whore govts as a giant fist with the middle finger sticking straight up. Now rotate. Get the picture ?

#66 Moneta on 09.06.11 at 8:46 am

http://www.hybridcars.com/news/cheap-chinese-cars-costco-25541.html

http://articles.moneycentral.msn.com/SavingandDebt/SaveonaCar/4000DollarCarFromGM.aspx

#67 Mr. Lahey, Trailer Park Supervisor on 09.06.11 at 9:00 am

Here is Marc Faber and his current take on world events.

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

#68 Rusty1 on 09.06.11 at 9:14 am

#19 Bill Gable;

Good observation. Everyone ‘talks their book’ at one time or another. Janette’s sister, who holds real estate,
is talking her book.

The lowly renters on this blog, hoping real estate prices will take a hard shot in the ‘nads, because they WANT to buy real estate, are talking their book.

Metal heads usually talk their book, at least the ones who buy and hold. Well, the ones who hold physical buried in the backyard hopefully keep their pie holes shut…

Deflation waiting in the wings? Not if the central bankers can stop it. I’m leaning towards a rate decrease now, although I was certain last year that rates were going to rise significantly.

What little physical gold I held I sold last year. I’m not not sure what do to with the few spare shekles I have in my pocket. Making use of my TFSA as much as possible. Wouldn’t mind buying some RE in the U.S., but I don’t think there’s any rush to get in the game there.

Ah, I better quit talking, before I start talking my own book. I’d rather listen to Garth talk his book – it’s more interesting reading…

#69 Echo on 09.06.11 at 9:16 am

SMOKING MAN:

A note for you and your son, and anyone who needs a lesson in critical thinking (many of you), over on “Be Creative”.
: )

#70 Smoking Man on 09.06.11 at 9:20 am

Wow Rule 48 invoked today on NYSE
This is going to be good.

Chris after the open expect a good rebutle, but as you are probably teaching right now, you can read it later.

#71 Echo on 09.06.11 at 9:32 am

#60 Smoking Man
You’re funny, your son’s funny, and that guy is scary. Two things for you to do now: Quit drinking even if it hurts and see my comment on Be Creative for you and your kid. Geez, he’s honest so I’m hoping that the other two aren’t the opposite! lol. If they’re being raised with a boxed in mind by your other half then the odds of dishonesty and passive/manipulative behavior on their part goes way up! : (

#72 BrianT on 09.06.11 at 9:54 am

You gotta laugh-after 3 yrs of giving away the store to grifters Obama wants to rebuild the USA infrastructure with the limitless wealth he has created http://www.bloomberg.com/news/2011-09-05/obama-says-his-jobs-plan-will-push-for-rebuilding-nation-s-infrastructure.html

#73 Ret on 09.06.11 at 10:30 am

#66 Inflation+Deflation+Stagflation= The Perfect Storm

Yes, I can see all three events possibly combining to make the perfect storm. Sectors of the economy such as labor, energy, raw materials, taxes will combine to all negatively impact the economy at the same time.

Some prices will go up, consumption sales taxes and hydro for instance, while material costs could fall lowering real incomes and putting more people on welfare necessitating even more government taxation. A downward economic spiral that starts small and grows uncontrollably like a hurricane.

Some sectors are comprised of subgroups and each subgroup could take a new and more damaging direction. One scenario, unionized government labor rates continue to increase while the underground economy working for non-traceable and non-taxable cash soars. Both events undermine the economy at the worst possible time. The government winds up borrowing billions to cover the shortfall in revenues.

Or I guess that they could invest in new jail spaces to feed, clothe and house tax cheaters but that would cost billions as well. There are no quick easy fixes.

When the government tries to correct one errant aspect of the economy, it will create two or three other major economic problems.

The Depression was the major event often studied by economists. Maybe they need to spend a little more time studying the decade plus long events in Japan which may prove to be even more relevant to our current situation.

#74 Bottoms_Up on 09.06.11 at 10:36 am

It’s funny how new builds get lit up when the housing market turns (this one in an affluent neighbourhood of an Ottawa burb):

http://www.ottawacitizen.com/news/Stittsville+family+sees+nearly+completed+home+flames/5355561/story.html

#75 Abitibi Doug on 09.06.11 at 10:43 am

@Sky, posting #66:
That appears the most likely scenario with inflation of some goods and services and deflation of others. It also looks like a done deal that there will be more rounds of quantitative easing.

#76 Young Old fart on 09.06.11 at 10:46 am

#42Thetruth on 09.06.11 at 2:33 am
Also, The Okanagan area of BC is screwed as well. Especially the retirees wanting to move there argument. Why wouldn’t retirees from other areas in Canada buy in Phoenix??
==================================

Or Mexico. The wifey wanted a 1200 sq ft townhouse priced at over 500K in the Okanagen that would cost us at least 12K a year to maintain. We ended up building a beautiful 2500sq ft house in a gated community filled with fellow Cdn’s by the beach in Mexico for half that and the yearly maintenance is about 2K.

….oh, my answer to your question is the same I always give… “what drug war?”

#77 Kilby on 09.06.11 at 10:47 am

#12 Betty Danin.
Like real estate sold to wealthy Chinese in Vancouver. The only government wages one hears people complaining about are usually upper management or professional levels. After 20 years as a government technician I clear $748 per month and medical plan paid. My wife has always worked in the private sector and makes double the wage the government would pay. The pension is a carrot for the government to attract workers at lower wages with the promise of “job security” Which is disappearing fast.

#32 Waterloo Resident.
The 2002 Porsche for $20,000 has probably been involved in an accident and had a lot of repair, most of the 37 for sale across Canada are over $30,000 with only 8 under and it’s the only one under $25,000, one has to read between the lines with cars priced like this, it’s not just the economy.

#78 Moneta on 09.06.11 at 10:49 am

Obama wants to rebuild the USA infrastructure with the limitless wealth he has created
———-

It takes a lot of energy to go the infrastructure route essentially guaranteeing huge inflation…. since Americans are net importer of energy.

If they want inflation, that’s probably a certain way to get it.

#79 Smoking Man on 09.06.11 at 10:58 am

#72 Ehco

Can’t give up drinking, do it for pain relief, bad case of arthritis, refuse to take amuine system suppressers or hard cord drugs like oxi. Bottle of wine works great for me after 9pm

Buy the way this
“If they’re being raised with a boxed in mind by your other half then the odds of dishonesty and passive/manipulative behavior on their part goes way up! : (“

But it was mostly caused by Teachers , managed to convert wife to the dark side.
Right smack on all the same.

don’t worry Chris I’m still coming for you. Just busy making more zillions at the moment.

#80 zipcar on 09.06.11 at 11:05 am

The richest guy in the world I the late 1980’s was a Japanese real estate mogul.Now he’s not even on the list.Warren Buffet is just as loaded up on financial assets. If were in the Japanese scenario of deflation, now would seem to be the time to buy gold/silver before deflation is followed by inflation .I’m sure Garth is worried about Warren’s lack of diversification too.

#81 brainsail on 09.06.11 at 11:18 am

The results of an international poll…

“The French are voted cooler than the British, and Canadians cooler than the Belgians. This may come as a relief for Canadians, who are sometimes viewed as chronically uncool.”

“Or, as Michael Ignatieff, the Canadian politician, once put it: “Paris, Texas stands as a metaphor for broken dreams; Paris, Saskatchewan just sounds ridiculous.””

http://news.yahoo.com/world-still-thinks-americans-coolest-poll-120048216.html

#82 Moneta on 09.06.11 at 11:38 am

Maybe they need to spend a little more time studying the decade plus long events in Japan which may prove to be even more relevant to our current situation.
——–
Japan was a net exporter and US is a net importer.

Japan spent on infrastrucutre to stimulate the economy but due to its size in the global economy, it did not put pressure on resources.

If US goes that route, it’s going to force all devleped countries to also go that route and resource prices will soar.

And North Amercians are going to realize that the only reason why houses got bigger over the last couple of decades is because energy was too cheap. And maintaining them is going to cost an arm and a leg in the future.

#83 Snowboid on 09.06.11 at 11:48 am

#32 Waterloo Resident on 09.06.11 at 12:40 am…

Both good cars, but how about the actual ‘stats’ from the Autotrader site for Toronto:

2006 Corollas range from $8500 – $11500
2006 911s range from $ 45000-$72000

A 2002 911 Carrera for $ 20K? That car must have an interesting history!! Have you ever serviced a Porsche? Not a good value when you factor in the cost of maintenance.

You are correct, however, that some used cars are increasing in value.

#35 Waterloo Resident on 09.06.11 at 12:44 am…

I’ve heard a rumour that you also die without doctors!

My bunker plan includes room for the security force as well as the medical wing.

#84 Utopia on 09.06.11 at 11:50 am

That was a great article today. Really interesting. I agree with the conclusion that deflation is in the cards too. Certainly for Canada.

As our housing market rolls over there will be a concurrent effect on many other assets held in this country. Wages have flatlined. If we follow the American experience we will surely see wages decline too as the supply of workers expands and competition for work results in declining incomes.

It does not help our case that oil and most other commodities have been falling on the prospect that both the US and Europe are slowing while China’s battle with inflation is stifling prospects there.

We appear on the verge of entering a fresh recession but this one will be more global in nature as the hopes of the growth engines in Asia and the BRIC seem to be dimming simultaneous with declines in the West.

China will not carry us through the next phase of a slow down as it has in the past. Our economies have become more synchronized and that is not a good thing now.

The interdependencies brought on by globalization and the risks they entail have now finally materialized as the interconnectedness of all nations brings truth to the expression “we are all in this together”.

All of this is signaling that inflation worries are in retreat, not advancing. The fact that home prices are still rising in some Canadian markets is not relevant either.

That is only symptomatic of the end of our own credit bubble and naturally we expect such a lag time to exist between economic indicators pointing to slowing growth and the realization by consumers that the credit orgy is at an end. This, despite easy money policies that have failed to stimulate the kind of consumption we actually need.

The consumer is tapped out and indebted. We are into record territory. Little can be done now to generate real growth through fresh household spending.

Low rates are in fact having little positive effect. It is in fact only the fear of higher rates and the very negative effects those bring that has the US Fed attempting to hold those in check in the hopes the economy might begin to turn around.

I am not holding my breath. US consumers are in retrenchment mode. Savings rates there are increasing and insecurity has replaced hope. This can only magnify the implications of a deflation as it is the consumers themselves who have turned to household austerity measures despite the hopes of governments we might spend, spend, spend.

I had been anticipating a break-out of the US dollar as I watched the sideways trading action this summer. That appears to be confirmed now and I believe the reversal will surprise many. This is one of the few silver linings for Canada right now as our dollar will again fall below parity.

With what is on the horizon regarding the debt issues in Europe I cannot see this trend changing anytime soon. Greek bonds are trading at nosebleed levels never before seen in Europe. The Bond market is telling us that it has priced in the certainty of a Greek default.

That could materialize before October and this will weigh heavily on the strength of the Euro as Germany grapples with the unthinkable while the electorate are showing increasing opposition to bailing out their neighbors.

Without Euro-Bonds and intervention by the ECB there are certain to be bank failures emerging and freezing of credit markets there.

A true stock market crash is no longer out of the question as investors come to grips with the failure of policymakers to contain this unfolding debt bomb and the global economy heading into a slowdown.

This might also present a once in a lifetime opportunity to buy into equities at bargain basement prices. The trick will be to estimate where the bottom might lie, not buying too early or too late. It is entirely conceivable that markets could fall back near 2008 levels again depending on how much fear exists unless serious intervention comes into play.

We will see what Mr Bernanke does next. Without intervention the inevitability of not just a US, but a global deflation cannot be ignored.

It is here already.

#85 Snowboid on 09.06.11 at 11:54 am

#78 Kilby on 09.06.11 at 10:47 am…

I know many provincial government salaries are low compared to the private sector, but are you really clearing $ 748 a month?

Are you sure that wasn’t twenty years ago or do you mean weekly?

#86 Utopia on 09.06.11 at 12:12 pm

Well, the Obama plan to rebuild America’s infrastructure is certainly reminiscent of similar programs that were launched during the Great Depression.

This is a clear indication of just how serious the situation has become down there where employment is concerned and it is not just a cynical election ploy.

Americans need work. The country badly needs reinvestment. That is a marriage proposal led by the overtures of labour that cannot be ignored as recession once again looms.

I certainly support that initiative as it is the means by which to put the largest number of dollars into the hands of the largest number of people while gaining a direct benefit for the whole country.

Obviously, this is quite different than past actions to recapitalize and bail out banks or specific industries that were failing. What is not to like about this idea.

#87 Smoking Man on 09.06.11 at 12:13 pm

Chris did you not read my post on the art of lying?

Chris as far as fibbing on what I buy and sell and how much money I make is a valid argument can not be proved or disproved, yes finally a bubble head with some deductive reasoning skills bravo little grass hopper. FYI I don’t trade puts or calls( better know as options) Equity Derivatives is my game.

Now this is where your argument broke down, and you made a fool of yourself. This is what you said..
“When you run your mouth about the past, your analysis is always 20/20. It’s called hindsight…”

Here are just some my historical posts calling major trend reversals. Now go back if you have the time and pull out all my posts and show me where I was ever wrong

Please Note the date and time stamp, before you run your mouth..

Hindsight huh, more like holly f, how do you do it and can you teach me, is what you should be asking.

Now pull up a chart on the tse and the dates and time and see what happened minutes after my Batman comments.

#124 Smoking Man on 08.09.11 at 3:24 pm
Batman head showed up again upside down, well defined at around 2 42 to 244 Unloaded all my shorts, buying back in with 20% capital
See what gives tommorow, might miss a big gap up, but will go all in if things look good…2 year at .8 div’s on blue chip CDN companies at 5%Can’t risist

#92 Smoking Man on 09.01.11 at 12:13 pm
Soft BatMan formation between 10:04 and 10:24 If TSE does not get past 12800 in the next hour, short it big time….God I’m good

Your serve

#88 888realtor on 09.06.11 at 12:24 pm

Mainland Chinese investors are heading toward GTA.
Huge money and easy visas to Canada.
It soon will be as “different” in GTA as it is now in Vancouver. What a relief: http://www.moneyville.ca/article/1049562–which-gta-homes-chinese-investors-are-buying?bn=1

#89 Dr.NickRiviera on 09.06.11 at 12:27 pm

“We see everyone now flooding into gold/silver whenever the market shakes a bit…”

Other than the goldbugs on this blog, I don’t know a single person who owns any gold or silver (physical/stocks/ETFs – nothing). Why does the price keep going up? Is it people oversees? Certainly not people in N. America flooding in.

#90 Dr.NickRiviera on 09.06.11 at 12:27 pm

OverSEAS. Oops. :)

#91 maxx on 09.06.11 at 12:29 pm

#10 vyw on 09.05.11 at 10:43 pm

Bingo. The fiscal einsteins should have ripped off the bandage in one move back in ’08.

#92 BrianT on 09.06.11 at 12:34 pm

#90Dr-Contrary to the popular belief on this blog, the global gold market is not controlled by guys living in cabins in the woods or renting basement apartments in TO-it is controlled by central banks, hedge funds and very wealthy individual buyers.

#93 Junius on 09.06.11 at 12:51 pm

A must read article from a GOP insider for everyone worried about the state of US politics. Especially important for you Tea baggers and Ayn Randites (yes, you Cookie Monster) out there. Scary stuff coming from someone with real credibility:

http://www.truth-out.org/goodbye-all-reflections-gop-operative-who-left-cult/1314907779

#94 young & foolish on 09.06.11 at 12:56 pm

“Mainland Chinese investors are heading toward GTA”

What is it with asian people and Real Estate?

Also, have you looked at other large cities with diverse populations and checked out their RE values as per average income multiples?

#95 Utopia on 09.06.11 at 12:58 pm

#88 Smoking Man

Actually, some of your calls were pretty good. I checked.

#96 Junius on 09.06.11 at 12:59 pm

#37 BPOE,

Clearly you remain high on crack. Now Vancouver is Manhattan? Last week we were Monte Carlo.

Just a sign that we are at the end of this madness.

#97 Utopia on 09.06.11 at 1:04 pm

#83 Moneta

Those were all good points Moneta. We are in checkmate.

#98 disciple on 09.06.11 at 1:07 pm

#78 Kilby…if you’re honest, you will admit that many vehicles have been involved in some type of fender bender, accident, or parking lot mishap, sometimes perhaps involving a curb, fire hydrant or tree. I personally don’t understand the stigma associated with accident vehicles which have been repaired. In my mind, a repaired vehicle is better than one needing repairs but looks good on the outside…am I wrong? If those pistons are firing, and the chassis/suspension is holding up to safety standards, what’s the big deal? You’re not trying to flip cars like houses are you?

#99 Devore on 09.06.11 at 1:10 pm

Couple of shoes dropped in Europe this week:

Swiss to peg CHF to Euro. I’m with this G&M writer; this will end in tears. When all is said and done, lots of innocent people will become poorer for no reason. Also, bullish for gold. It had to be said.

Next amongst the PIIGS, Italy takes laughable steps towards austerity, mostly because it increases retirement age for women, which is so totally unitalian.

#100 disciple on 09.06.11 at 1:32 pm

Just an FYI for anyone interested in a used vehicle, what you need to know is that even if the ad, carfax or salesperson says that it has not been involved in an accident, you can rest assured that it probably has to some degree. But it doesn’t matter anyway. Here are some of the most important things that you need to have checked first:

Idle roughness while stationary in DRIVE – very, very difficult to fix because there are a number of different things that could contribute to this and a mechanic will love fleecing your pockets trying to find out. It could just be a dirty Idle Valve but on newer models it isn’t so simple. Demand to have it fixed BEFORE you buy or walk away.

Creaky suspension – Normally the ball joints, CV valves boot ends or suspension arms. The most rugged moving parts of the vehicle, these can be replaced quite cheaply, so don’t fret over noises when you are mounting the seat or braking, just insist on repair.

Noises related to wheels/tires/brakes – My favourite, these are repaired easily, you can do it in your garage, this is one of the first things a dealer will fix to make the vehicle appear better than it is, so if they haven’t already, demand it.

Electrical problems – Check everything, it’s easy to overlook all the gadgets and toys in newer models, but sometimes if one electrical pathway is shorted, it may affect others down the road due to moisture build-up. It also indicates lack of use so the vehicle had been sitting for a long time in some field or garage – usually not a good thing. Often it’s just a breaker fuse which is accessible from the cabin or engine compartment – but again, have it fixed before you make any agreements, if you are not able to check it yourself.

Speaking of which – BRAKE LINES !!! – Have them hoist the vehicle so you can check the these with your own eyes. Look for rust on these aluminum-coloured metal brake lines that go from each wheel to the master cylinder in the engine compartment. You can negotiate the price based on the condition of these alone, but make absolutely certain that they are clean and free of leaks and rust.

Don’t worry about oil, transmission, coolant, differential or steering fluid changes, they will try to use these as bargaining chips, even when they have no intention of changing them or even checking them. You can do all of these on your own. If you need help, just let me know…

Take your time. Just as with houses, I predict unbelievably good deals are on the way…I want a Porsche…

#101 Cookie Monster on 09.06.11 at 1:42 pm

Most of the $US inflation is currently being exported to China, Korea, and many of the oil exporting countries but once the world gets too full of US dollars floating around in their economies or the loosen their pegs the world will puke and then we’ll see a hyperinflation avalanche of $US reserves and $US savings unleashed all at once when nobody want’s their crappy paper anymore, they will trade it for anything, the day is coming, and soon, QE3,4,5 which one will be the trigger?

The fact is there is massive inflation of fiat currency globally, the Chinese are inflating to keep up with their peg, its just that much of it is being exported so we’re not noticing it as much here as we should be, that will change soon, it’s creeping into everything slowly.

#102 Smoking Man on 09.06.11 at 1:45 pm

Echo just saw your post from yesterday, thanks and you nailed and u understand.
You a schrink or in that feild…?

And then there is disciple, yikes anyone know how to make a gralic neckless…..

#103 HouseBuster on 09.06.11 at 2:09 pm

@#32 Waterloo Resident – What are the engine compression numbers? How is the transmission working? What about the alignment?

Yeah, that’s why it’s $20,000.

#104 Utopia on 09.06.11 at 2:11 pm

#93 BrianT to #90 Dr NickRivera

“Contrary to the popular belief on this blog, the global gold market is not controlled by guys living in cabins in the woods or renting basement apartments in TO-it is controlled by central banks, hedge funds and very wealthy individual buyers”.
———————————-

You may be right there Brian.

It is indeed Central Bank buying that seems to be pushing the Gold market now and this leads to a confirmation of my suspicion that once enough Gold is back in the hands of Central Banks that the price will again be “managed” as they begin to buy and sell between themselves.

I am not sure anymore that this will actually work though. You will be shocked to hear that I am on the verge of reversing my opinion on the prospects for Gold going forward.

It seems clear to me that should a serious bout of deflation ensue that we should anticipate that governments will again respond with monetary stimulus. (code for money printing and devaluation).

The outlook for Gold would therefore change significantly and the rise in prices could potentially be meteoric. I am holding off on saying what I really think is coming next though (except it will be fast).

I do not want a lot of abuse from the Gold-Huggers if I switch camps though. The times they are-a-changing and I am prepared to admit it if I was wrong.

#105 disciple on 09.06.11 at 2:20 pm

#103 Smoking Man…don’t worry, Jesus still loves you.

#106 Utopia on 09.06.11 at 2:20 pm

#100 Devore sad…..

“Couple of shoes dropped in Europe this week: Also, bullish for gold. It had to be said….”
————————————

Good to hear I am not the only Gold hold-out who is looking at the recent news and coming to a new conclusion. I appreciate Garth is not favouring that view and that this is not gold blog but the outlook has changed and there are now good fundamental reasons for why gold could and should rise much higher in the coming years. Enough said. I still won’t hug it though…..15% is more than enough exposure.

#107 BPOE on 09.06.11 at 2:22 pm

In your dreams. BPOE is just getting started. This is the second leg of a multi leg century. Why you didn’t buy remains a mystery.
******************************************
Junius on 09.06.11 at 12:59 pm
#37 BPOE,

Clearly you remain high on crack. Now Vancouver is Manhattan? Last week we were Monte Carlo.

Just a sign that we are at the end of this madness.
.

#108 justsayin on 09.06.11 at 2:38 pm

I have missed a few days so I was going back a couple of days when I read your entry about Hamilton. Of course I have to read the comments where one blogger tells of a chance meeting with a couple of undesirables in downtown Hamilton at midnight. You don’t have to wait until midnight in beautiful Victoria. It makes me sick what these living dead crack heads have turned our downtown core in to. Try to walk three blocks in downtown at any time of day and it will shock you how many times you are asked for money by a dishevelled person covered in scabs. You have to dodge them as you drive down Douglas Street (4 lanes of busy traffic) because they just cross anywhere they want and expect traffic to screech to a halt. It’s like living in an episode of The Walking Dead.

#109 BrianT on 09.06.11 at 2:41 pm

#94Junius-Yes, but all you have to do is read just a few articles by Paul Krugman and you will realize that Paul is either insane or thinks his readers are. The operative writing this article holds Krugman up as a reasonable alternative to the Bachmann type madness.

#110 a prairie dawg on 09.06.11 at 2:49 pm

#33 Chris

Then there’s the matter of bragging about his decoy algorithms publicly on the net, a few blogs ago…

Pretty sure that could be construed as intent to commit fraud, or intent to withhold information from securities regulators.

You’d think someone with his superior coding skills would know NOT to do that?

Ya gotta love the internet. You get to speak with geniuses and supermodels almost every day. lol

#111 Snowboid on 09.06.11 at 2:56 pm

#103 Smoking Man on 09.06.11 at 1:45 pm…

Hay, fough smokeing main – isnt’ a not airly to bee heighting the whine?

#112 detalumis on 09.06.11 at 3:09 pm

#12. If you look at countries with vast disparities of wealth, you will see that teachers, coppers, and yes even doctors are not very well paid – that’s why they immigrate here.

I also think you are wrong with your comment about buying houses without all the bells and whistles like granite counters. I have a 1200 square foot bungalow that i renovated entirely (after paying it off). Unless you can do everything yourself you will find that the difference in quality material cost isn’t all that much – it’s labour that is very expensive especially in a small place. And if you were a person who bakes a lot (which you clearly are not) you would find granite much more practical than laminate, it’s an excellent surface for kneading bread and rolling out pie dough. You can also put a hot pot on it directly. Please stop with the granite-bashing.

#113 Two-thirds on 09.06.11 at 3:11 pm

Sadly, deflation is knocking on the door. Sadly, because though it is much deserved/needed, its consequences will be bruising for fool and prudent alike.

Reflecting on where we have been in the past 3 years, here are some things that may be coming our way:

1) BoC will drop interest rates in Q4 or Q1 2012

2) “Boxing day”-type deals will appear the second after halloween is over

3) Loonie dips under par with USD

4) Against all logic, RE in Canada hangs on for dear life – somehow – in 2011 and perhaps late into 2012.

The last point may underscore pent-up RE-bear exhaustion to some degree. Those of us who have used logic to analyse an emotion-driven market may in the end be proven to be fools.

If this bear is close to reaching the point of capitulation, does it mean the top is in?

(rant off)

#114 Bill Gable on 09.06.11 at 3:28 pm

“”We have absolutely no leadership in terms of any solutions being provided by politicians in Europe or the United States to try and solve any of the problems, so this is all catch-up.”

On Wednesday, the Bank of Canada will give its latest interest rate announcement. The central bank had expected 1.5 per cent growth in the second quarter but Statistics Canada reported last week that the economy contracted.

The Institute of Supply Management released its report on the U.S. service sector Tuesday morning showing that service firms grew at slightly faster pace in August compared with July. That was better than the expectations of economists who had predicted the sector would post its fourth consecutive monthly decline.

However, the sector remains weak, adding to concerns that the American economy is at risk of another recession.

The Institute for Supply Management says its index for service companies rose to 53.3 in August, up from 52.7 in July. Any reading above 50 indicates expansion.”

> Here comes a rate drop and some other magic imputations from Barack the “Teleprompter Emperor”.

More http://tinyurl.com/3c58v5j

#115 disciple on 09.06.11 at 3:43 pm

Just found out that NASA sent out a warning letter to its employees and their families to start storing food and water to prepare for communications shutdown due to Comet Elenin and Asteroid YU55 flyby October 16 which coincides with the launch of the Emergency Management Communication System…coincidence? Russia announced 5000 more underground shelters to be built…why? In 1856 all telegraph offices around the globe were lit up like fireballs due to a solar storm. Didn’t learn that in school…

#116 Sue on 09.06.11 at 3:50 pm

I happen to know that Janette’s sister owns their very large home outright and have no debt of any kind. They would not hurt with a downturn but could sell/invest to create an amazing income that would pay the rent of a beautiful mansion…and then some. She could also lose her stressful job. Oh well, to each their own.

#117 Ronaldo on 09.06.11 at 3:57 pm

A little look back in history to March 25 2000 when the TSE hit 10,000 for the very first time.

TSE – 10052 remember that Nortel made up 35% of this number or somewhere close to that. Today, 12,450 without Nortel, pretty darn good.

DOW – 11112 – Wow, it was even higher than TSE at this time by about 10%. Today – just over 11000, about the same. Nothing in almost 11 years.

NASDQ – 4963 – Today 2450

SP 500 – 1527 – Today 1156

London – 6738 – Today 5168

Tokyo – 19958 – Today 8590

Hong Kong – 17784 – Today 19700

Cdn. Dollar – 68.4 – Today, just over par.

Oil – 28.02 Today – around 86.00

Gold – 284.70 Today – about 1880.00

Silver – 5.08 Today – about 42.00

Vancouver Ave. SFH – 296,000 Today – over 600,000

5 yr. closed CMHC Mtg – 7.81 to 8.5

BOC rate – 5.0 – 6.0

Cht. Bank Prime – 6.65 – 7.5

Interesting to see where we’ve come from. Happy investing everyone.

#118 disciple on 09.06.11 at 4:07 pm

“A generation would soon be born that had never known a world without Lucifer.” Best selling author and world renowned scientist, Arthur C. Clarke, penned these words in his science fiction masterpiece, 2010: Odyssey Two–a book/movie sequel to his ground breaking 1968 work, 2001: A Space Odyssey. Unknown to those who only watched 2010, there was a major difference between the motion picture and the novel. Eerily, the book contained a section titled “Lucifer Rising.”

In Clarke’s Lucifer Rising story line, the hydrogen atmosphere on the planet Jupiter is ignited. The ensuing new “little” sun is dubbed “Lucifer” and illuminates the earth with its light. The result: darkness no longer existed. Fear, suspicion, and crimes of the night disappear. Mankind has become illuminated through the light of Lucifer.

To occultists and New Agers, the symbology of Arthur C. Clarke’s writing was unmistakable. Lucifer, the “light bearer” shines his knowledge (occult “truth”) upon all humanity, chasing away fear and ignorance, and providing mankind with the opportunity to discover his own intellect.

Hydrogen Cyanide – a poisonous gas, is a large component of Comet Elenin. Its coma discharge would be wider than Jupiter, quickly wiping out life on our planet within a blink of an eye?

#119 Snowboid on 09.06.11 at 4:49 pm

#119 disciple on 09.06.11 at 4:07 pm…

Sigh, and we are still 6 days from the full-moon.

#120 Moneta on 09.06.11 at 4:50 pm

It makes me sick what these living dead crack heads have turned our downtown core in to.
—-
Or is it life in BPOE that has turned them into crackheads?

Hmmmm… Chicken or egg?

#121 BrianT on 09.06.11 at 5:12 pm

#107Ut-It is time for you to be monitored as you have been advocating-you are starting to sound dangerous.

#122 timo on 09.06.11 at 5:14 pm

The yield on the 10-year Treasury note fell to 1.97 percent. On Monday the yield fell to 1.91 percent in Asian trading, the lowest since the Federal Reserve Bank of St. Louis began keeping daily records in 1962

http://www.businessweek.com/ap/financialnews/D9PJ7G1G0.htm

man is money running for safety with a yield like that.

#123 jess on 09.06.11 at 5:21 pm

Aug. 19, 2011

Leaked Oil Trading Documents Underscore Role of Speculators in Oil Price Spikes; Identities of Traders Should Be Public

Statement of Tyson Slocum, Director, Public Citizen’s Energy Program

Note: The Wall Street Journal this week ran a story about confidential documents from the Commodity Futures Trading Commission that named traders who held oil futures in 2008, when oil prices spiked to record highs.

The growing controversy over the leaking of trading documents naming 219 investors in oil futures positions during the 2008 oil price spike shows two things…”

http://www.citizen.org/pressroom/pressroomredirect.cfm?ID=3402

#124 Peakoilist on 09.06.11 at 5:53 pm

Just sitting here enjoying all of the Armchair economic prognosticating quarterbacks.. Have to scroll through quickly due to short of time. Good work guys..and noone is poopooing the remarks as “too gloomy”. it is what it is, that’s what I say, because who really knows what’s gonna happen anymore.

#125 Ronaldo on 09.06.11 at 6:04 pm

#90 – Dr. NickRiviera

“Other than the goldbugs on this blog, I don’t know a single person who owns any gold or silver (physical/stocks/ETFs – nothing). Why does the price keep going up? Is it people oversees? Certainly not people in N. America flooding in.”

Dr. Nick, here is a link to a conference call of the top minds regarding this topic. There are 4 parts to the videos and I am sure that by the end, you will be much more enlightened as to what is going on in these markets. I am not a gold bug by any means but I do invest in precious metals for the capital gains same as people buy bonds or any other securities for the same reasons. Here it is. Enjoy.

http://www.youtube.com/watch?v=elzmzwaicl4&feature=related

#126 Nostradamus Le Mad Vlad on 09.06.11 at 6:09 pm


#102 Cookie Monster — “Most of the $US inflation is currently being exported to China, Korea, and many of the oil exporting countries . . .”

You mean like this? Links with #66 Sky — “Deflation? Inflation? Stagflation? All of the above.”

There is so much BS happening behind the scenes, these scenes are probably more realistic than the stuff the m$m spews out.

Let’s see. The US Fed was formed Xmas Eve 1913 (or thereabouts). WW1 started 1914. After people finished with The Roaring Twenties, then came The Dirty Thirties which incl. hyperinflation (a politically-driven event) and stimulus plans, such as constant road- and bridge building, to lift the US outta GD1.

While this was going on, no one knew that Prescott Bush (dubya’s granpappy) was financing Hitler, the Third Reich and began WW2, quite profitable for the banxter elite who were funding all sides, much like Soros is funding O’bomba today.

One sees that history rhymes and repeats, with O’bomba taking roughly the same steps as his predecessors did. Will there be more yahoos making unfounded claims (like dubya)? You betcha! Will WW3 happen? Probably, or something similar to that.

Everything has a price, and with the UN – US – NATO invading MEast countries without any justification, they will all get back what they have put out. If China and Japan cash their IOUs from the US simultaneously, completely unexpected, there will be a lot of “Oh shits” going on.

disciple — Good posts from yesterday. We all come into this world with nothing, we leave with the same amount. Eric Idle (Always Look On The Bright Side Of Life) had it right:

“We come from nuffink, we’re going back to nuffink, wot ‘ave we lot? Nuffink!”

As well, your #116 and #119 posts go with Chaos and disciple — 7:27 clip, Russian with subtitles. Nibiru will be here shortly, and 2/3 of us are gonna Break On Through! Further. Not sure if these links still work, but Nibiru is approx. five times the size of Jupiter. Should make for a great fireworks display!

#127 Beach Girl on 09.06.11 at 6:14 pm

Hi Disciple. Really, do not get your agenda. Smoking Man was lucky enough to get your attention.

Of course, I am money obsessed. I know, no one looks after poor people, especially old, demented and extremely ugly. Hard to be religious there.

Are you living in the real world or NOD (children’s book).

Of course, I know Jesus loves me. Why would he not. But if his bank balance is low, I should make an attempt to assist.

These are hard and trying times, but I bet you are out there Sat. or Sun? in your dour suit promising everyone’s problems will go away.

Oh, I have integrity, and money is not everything. There are stocks, bonds and RE.

People who say they don’t care about money, don’t have any.

#128 Echo on 09.06.11 at 6:20 pm

#103 Smoking Man

Nope, just a swift visionary with integrity but with no vices. It’s why I can see you clearly. There is no fog.

As for your #80: If all if that isn’t the bony long-nailed claw taking a ferocious swipe from the back of your head (i.e. your subconscious) at the invader who who dares to speak I don’t know what is! lol Now, speaking directly to your conscious mind because it is my choice darlin’,
the claw’s speech is redundant. There are easy solutions for all that ails you, no alcohol or poisonous western drugs needed. Healed those like you for almost 30 yrs and counting, nothing mystical, all science.

Geez Smoking Man, what the F ya gonna say to that? Gotta have your alcohol anyway? Shall we ask the claw?

#129 Young Old fart on 09.06.11 at 6:26 pm

#119disciple on 09.06.11 at 4:07 pm

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

Dude…really?? I love throwing curve balls as much as the rest……

But keep it within the realms of RE and money will ya?

I too believe interesting times are coming… but save that for those “other” blogs….

I for one still can’t get over the cheerleader picture….

That would be a heck of a trophy wife…. :o))

#130 GTA markets weak and falling on 09.06.11 at 6:27 pm

888realtor pure propaganda and myth.

Sales in the GTA continue to fall and prices are now following. Anyone in the industry will tell you in private they are worried of a housing crash. They are pulling out all the stops and lies to keep the bubble from popping. They know and admit in private that housing is in a monster bubble. Why do you think realtors sell RE and not buy it themselves if it was such a sure thing?

#131 Young Old fart on 09.06.11 at 6:29 pm

#118Ronaldo on 09.06.11 at 3:57 pm

A little look back in history to March 25 2000 when the TSE hit 10,000 for the very first time.

TSE – 10052 remember that Nortel made up 35% of this number or somewhere close to that. Today, 12,450 without Nortel, pretty darn good.

DOW – 11112 – Wow, it was even higher than TSE at this time by about 10%. Today – just over 11000, about the same. Nothing in almost 11 years…..

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

That’s the beauty of dividend shares. As long as they pay every quarter, as to share price? Who gives a shit??? Buy, hold, sleep at night………….

#132 Junius on 09.06.11 at 6:32 pm

#110 BrianT,

You said, “The operative writing this article holds Krugman up as a reasonable alternative to the Bachmann type madness.”

Bachmann is a complete idiot. Whether you agree with Krugman or not he is intelligent and thought provoking.

What is your point?

#133 Junius on 09.06.11 at 6:34 pm

#108 BPOE,

You asked, “Why you didn’t buy remains a mystery.”

Who said that I wasn’t a home owner? I never said that. I am not even against Real Estate investments.

I am against the delusional pumpers like you who sell fear and greed. That is whay I am won’t buy.

#134 Dan in Victoria on 09.06.11 at 6:34 pm

Young old Fart @ 77
I read this fellow all the time he lives in Mexico.
His column yesterday was about the drug war in Mexico.

And for any of you who thinks Garth is gruff…..
Go read some of this fellows past posts, I find them blunt and to the point.
Also very entertaining.
NOT for everyone.
He calls it the way he sees it.
http://fredoneverything.net/Downhill.shtml

#135 Echo on 09.06.11 at 6:42 pm

Whether you want to deal with masking all if your joy and pain any time either comes about is up to you. Cool. Just keep on posting. As for what you did with your son and the gift you gave him… there are two kinds of Canadians:
1) The majority > those small minded enough to actually MISS the fact that your son OFFERED the truth at the onset to a) proceed on his own merit and b) demonstrate that he was willing to be asked to leave. Bonus info: Suss out a great boss with some inherent wisdom. That can never hurt.
2) The miniscule minority> the A Game. In the US business market this conversation, and subsequent wrath, would barely have taken place. Duh. It was a story not to teach kids to misrepresent, but to ask them to have some confidence, some ambition, some great intentions.

These are the kids that Garth won’t have to teach a thing to. Better choices, hard work, better world. Your kid obviously wasn’t looking for an easy ride, just a shot at working his a** off. Oh my, you and he shall rot in the firy pits below. lol

#136 jess on 09.06.11 at 7:22 pm

bubble talk back 2002

The Economist of March 30, 2002 was entitled “The houses that saved the world“.

The premise that housing cushioned the fall in equities
sheltered the US economy from a longer recession.

See, for example, Stiglitz, J. (1990), Symposium on Bubbles, in: Journal of Economic
Perspectives, Spring edition, pp. 13-18. Abraham, J.M., Hendershott, P.H. (1996),
Bubbles in Metropolitan Housing Markets, in: Journal of Housing Research 7,2, pp.
191-207.

#137 Bobby on 09.06.11 at 7:23 pm

For # 32 Waterloo Resident,

I have to disagree with your take on used cars, here on the west coast anyways. With employee pricing in June at Nissan, I got a 2011 fully loaded car for only a couple thousand more than a two to three year old vehicle. Full warranty and much better equipped.

Many buyers are misled into believing used is cheaper. Much like real estate, rather than doing their own research many tend to believe a salesman. You can buy a new Corolla or Civic for under $20k and they will probably offer cheap financing. Go to carcostcanada.com and pay to join. You will be glad you did.

#138 Utopia on 09.06.11 at 7:30 pm

#122 BrianT

“#107Ut-It is time for you to be monitored…”
————————

HaHa. Hey Brian, it is still just one more investment class. I won’t stretch beyond 15%. That is called rational behaviour unlike the Gold-Huggers who go all-in, guns in tow and head for the hills with Tuna and Gopher traps to await Armageddon. In any case, you already know that gold buyers are scrutinize closely in the US now with the new 1099 rules. Why will Canada be any different?

#139 Onemorething on 09.06.11 at 7:43 pm

Well lost a nice chunk of paper gaines on that CHF yesteday. It appears back into USD which is likely to happen given what the SNB has done to peg to the EURO at 1.20 AT ALL COSTS they claim.

This correction had to happen as Swiss Businesses were getting hammered and the Unemployment might have been close to 10% but how long can SNB buy EUROS. Maybe it will backfire and my CHF will strengthen.

Problem now is DEFLATION in the USA with a move like this. Drives USD up and makes exporting deflation out of the USA that much more difficult.

#140 Nostradamus Le Mad Vlad on 09.06.11 at 7:43 pm


4:29 clip Eurozone done and dusted? Bernanke In the news again; Lawsuits “I’m listening in and I can tell you that the US government won’t be collecting anywhere near the $196 billion headline number named in the lawsuit.”; Italian Austerity “Boy, I sure do miss the days when we could trick the serfs into giving us all our money by promising them they would go to heaven after they died.” — Official White Horse Souse – wrh.com; Europe Up or down?

Pensions “Still left unsaid is that pensions were encouraged to invest their money in mortgage-backed securities, promoted as rock-solid investments but now recognized as the biggest financial swindle in history. Wall Street is still trying to keep the lid on the scandal as are the governments that looked the other way despite clear warnings signs and now loot the people to try to pay for the disaster, not to mention the pension managers themselves who are reluctant to confess their own stupidity at having been taken in by the scam.” wrh.com; O’bomba and Gibson Guitars — outsourcing jobs to continue crashing the economy. There is no recovery; Taking away pieces of the pie, one at a time; 3:46 clip Detroit looting Detroit (nothing left).

Atlantic Post An extremely good question; 3:35 clip The US govt. after 9-11; ConAgra Following in Monsanto’s footsteps and GMO Rootworms 1, Monsanto 0; Egypt Building a wall; Polls Sheeple are waking up! BP Tarballs surfacing in the most unexpected places; Change disciple, you may like this. Before this outer world can be changed, we change ourselves first.

NATO supports black genocide, and is therefore a racist organization; Cameron gloats to soon. “We used to call these people ‘Al Qaeda”. The Toilet is plugged again; Staged Event? or coincidence; Something’s happening. Bob Dylan called it right; Is Hay a pollutant? EPA says it is; Diplomatic or military escapade?

#141 Davey Boy on 09.06.11 at 7:56 pm

Happen to be a Porsche nut. The reason the car is priced relatively cheap could also be that true porsche fanatics find the styling of that year bland, also the older air cooled ones are the ones that hold value and sell for top dollar, particularly 95-98 years. Just for fun compare those to the newer ones you will see they command more and are better built. Wish I knew as much about investing, that why I keep tabs on Garth!

#142 Utopia on 09.06.11 at 8:01 pm

It’s always interesting to go back into the archives for a look at the past article and commentary. This blog post linked is from November 2009 turned up on my screen by accident this afternoon when I typed in Greaterfool incorrectly.

http://www.greaterfool.ca/2009/11/21/canaries-2/

Funny how little has changed. The message still fresh. Still, few listened and look where we are today. Facing exactly what was warned about nearly two years ago.

Except now it is real and not mere conjecture anymore.

#143 Smoking Man on 09.06.11 at 8:08 pm

#136 Echo on 09.06.11 at 6:42 pm

I like you, “rot in the firy pits below” LMAO

This is a streach but say their was a heaven and lots people like dysiple, guys bowing to meca, the sideburn dudes whaling at the wall, those evangilical southern bible thumpers. If these guys actuly made in.

I will take my chances with the fire pit, cause living with those types for eternaty whould be hell.

#144 maxx on 09.06.11 at 8:10 pm

#114 Two-thirds on 09.06.11 at 3:11 pm

“RE bear exhaustion”……….”point of capitulation”.

Perhaps much of that imagined “exhaustion” will sublimate into the realization that much better options exist, such as a simpler life, being unfettered and having much more cash to engage in things that are inherently a lot more fun, profitable and rewarding.

#145 BrianT on 09.06.11 at 8:24 pm

#133Junius-Bachmann is an idiot. Krugman is even more of an idiot than Bachmann, which is saying something. If you are going to dispute this fact, don’t bother responding by telling me you like his resume-defend his absurd, ridiculous theories.

#146 Mike Rotch on 09.06.11 at 8:56 pm

Further to 138 Bobby:

Few things on cars. I recently shopped for and purchased a modest rice-grinding import in the $30,000ish class.

My conclusion is that Auto manufacturers and their dealers might be hurting a bit.

I’ve never had an easier/faster time negotiating a buy. The salesman even caved at a better price than I was prepared to settle for. (12% off sticker, a couple of token throw-ins).

With this, I believe I got a car for something right around ‘dealer cost’……

The manufacturer’s head office is helpfully financing the loan for me. I was prepared to pay cash, but once I found out that they would not shave the price further in exchange for a sizeable downpayment, I opted to take their free money.

Funny story – with the initial discount and zero interest, each of the 60 monthly buy payments was lower than a monthly for a 48 month lease

Used is still cheaper, but you have to find a car that you want and the dealer doesn’t and negotiate like a bastard. (I would absolutely never pay more than 60% of sticker for a 3 year old car and 50% for a 4 year old one…..at four years, half of the normal useful life is gone, and you’re starting to approach expensive repair territory)

They also don’t offer free money for used cars so you have a borrowing cost which eats into any savings.

Finally, I’m not sure if it’s worth paying for carcostcanada or equivalent. A relative had some unused price checks and offered them to me. I ran my car, and got a couple of quotes.

Thing is, I ended up going to a different dealer and negotiating better than what was shown to me.

I don’t know what this proves if anything, but as available credit dries up, and people struggle to budget for shelter, food, and the other essentials, well, some of the medium-expensive toys might fall in price.

#147 bigrider on 09.06.11 at 8:57 pm

Looks like Goldman Sachs knows there is a collpase coming but publicly re-assures.

http://www.thetradingreport.com/2011/09/02/even-goldman-sachs-secretly-believes-that-an-economic-collapse-is-coming/

#148 TurnerNation on 09.06.11 at 9:11 pm

2 bedroom in Las Vegas for 25k:

http://www.trulia.com/property/3056614307-2110-Los-Feliz-St-Las-Vegas-NV-89156

#149 Utopia on 09.06.11 at 9:25 pm

So comet Elenin is going to whack the planet October 16th and NASA is warning to stock up on fresh water and food and be prepared for a long haul with no communications…..Hunh? Are they serious?

Guess the internet will be off. Cell phones too. Does that also include the electrical grid? This does not sound good to me and will really put a damper on most of my plans.

What is really weird though is that when I went looking for more information on this astral phenomenon only to find that so many of the links were broken, have been withdrawn or are no longer available to the public.

Is there something to it? I just knew I should have made the bunker deeper and put in more supplies. No way I can last a whole seven years. Not with my home canning skills anyway.

I guess this is it. Damn. I had some good shorts lined up.

#150 Great Blog Garth on 09.06.11 at 9:29 pm

Did not care much for smokingman and thought he was an idiot. He may not spell well but he does have a very good understanding of reality. He also made good calls on the market. Garth is the man with street/school smarts and I wake up in the morning and enjoy reading his thoughts of the day which sometimes come with investing treats. Nostradamus Le Mad Vlad what can I say you bring up so many cool issues of current/past events that my head hurts from information overload. All in all This blog is the best.

#151 Hoof-Hearted on 09.06.11 at 9:52 pm

Richmond has highest office vacancy rate in Metro Vancouver

http://www.bclocalnews.com/ric…..42588.html

Richmond has the highest office vacancy rate in Metro Vancouver—a rate nearly triple the region’s average.

According to the commercial real estate firm Avison Young, the vacancy rate stands at 23.9 per cent, compared to the region’s average of 7.6 per cent.

Avison Young principal Bill Elliott said new inventory coupled with a major market slowdown in 2008 that hit technology companies especially hard and less-than-ideal public access is to blame.

“The Canada Line​ provides access to Richmond, but really doesn’t provide access to the office parks,” said Elliott, noting inventory in Burnaby has similarly grown, but its office parks are built within walking distance to a rapid transit line or offer shuttle service

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

Bad News in HAMville

#152 Habbit on 09.06.11 at 10:14 pm

Some people think that predicting the future is what this is all about. I think it’s about raising awareness of what may take place. Garth makes a good case as to why RE prices should come down and have already done so in Alberta for example. The logic of Garth’s position has been well presented here for some time and this has given many the opportunity to act or not to. People are challenged to think about it. All good. No one will bat 1000 except perhaps smoking man… Thanks again Garth.

#153 penpal on 09.06.11 at 10:20 pm

Would anyone know when TREB (Toronto Real Estate Board) publishes their results for the previous month (at this time for the month of August).

Thank you in advance for any assistance offered.

#154 GOD on 09.06.11 at 10:32 pm

Listen, Garth

Toronto(and GTA ) is NOT Godless, what proof hast thou?

I doth ownest season tickets to the Maple Leafs and have since creation.

Rest assured, HELL will freeze over before the Leafs win a cup( ….especially with Burke as GM )

PS Smoking Man….has not the time arriveth to expose thine true identity ?

#155 disciple on 09.06.11 at 10:33 pm

Hi Beach Girl,
Amazing I know, but I don’t have an agenda. I’m not religious, either, so much of what you wrote is irrelevant, sorry. Did I say I don’t care about money? No, I did not, and yes I do have some of it. But don’t justify the emptiness of your obsession by telling me that is how the world works etc…you are dead wrong. The sooner you realize it the better for you, not my problem. No one looks after poor people? You sure about that? Give a man a fish…

#156 Blacksheep on 09.06.11 at 10:37 pm

Utopia #139,

“It is still just one more investment class. I won’t stretch beyond 15%. That is called rational behavior unlike the Gold-Huggers who go all-in”

Give it time, you will rationalize a higher % allocation to PMs. As you dig, more and more, the folly of our debt system and counter party risk attached to other investments will become self evident.

Regardless to what you’ve heard,

The meek shall NOT inherit the earth.

take care
Blacksheep

#157 disciple on 09.06.11 at 10:42 pm

#144 Smoking Man….There is no heaven and there is no hell…right here is all the heaven and hell you’ll ever see…I’m stuck with children like you…too bad your obvious genius doesn’t extend beyond the shallow pursuit of money. Pity.

#158 Smoking Man on 09.06.11 at 10:43 pm

To God
155 GOD on 09.06.11 at 10:32 pm

Do they have strip joints in heaven, next dance is on me bro

#159 Waterloo Resident on 09.07.11 at 1:15 am

#138 – Bobby:

you said : (” I have to disagree with your take on used cars, here on the west coast anyways. …..
Many buyers are misled into believing used is cheaper.”)

Yes, I totally agree with you. I think that maybe you got my message a bit wrong. I said that the used car I bought was fairly cheap but since then used cars have just gone NUTS as far as price is concerned, and you are totally CORRECT about new cars being actually a better buy right now than used cars.
Sorry I didn’t explain myself fully on that.

I bought a 2006 Corolla because to me it felt more comfortable than the 2010 ‘new’ model that I took a test drive in, the old design had a better ‘feel’ to it, that’s all, otherwise a new car would have been the better way to go; you are correct.

As for carcostCanada; its okay but they only give you the price that the dealer pays, it will be up to you to haggle a fair price from that and that is a pain in the butt. My advice; go to http://www.unhaggle.com/ and then you don’t have to do any haggling at all.

#160 Betty Danin on 09.07.11 at 2:23 am

If you think that cops,teachers and doctors are not paid enough than ask the public to pay a national CTD sales tax of say an extra 10% dedicated to pay for their services. I don’t think that a 25% total national sales tax would go down to average working taxpayer in Nova Scotia. A $30,000 car would cost a minimum $7,500 in sales tax to serve and protax.