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David’s a realtor. With redeeming qualities. He wrote me a long letter this week, containing a crucial question. Here is a portion:

Firstly my thanks for your continued and much appreciated blog. As a Real Estate Broker for over thirty years I have recommended your books, including “Greater Fool” to hundreds of people.

In 1989 I owned a six thousand square foot office building and employed more than thirty agents with about half a dozen staff. In 1990 many deals had failed to close and the market for property was as good as dead.  Without sales my agents drifted away and without sales I could not support my office building. Eventually I sold it for far less than I paid for it and downsized to a much smaller building with a current staff of two, myself and my wife, who is also a broker.  So I know what a real estate slow down looks like up close.

However the point of my discourse, apart from expressing my admiration for your writings, as well as your political and current career, is to question your reasoning for your continued optimism concerning the world’s economic future.

I have also read other authors who tell a dismal story of the end of cheap oil and all that that entails. All of the authors are educated, knowledgeable and articulate. They all generally predict a sharp economic contraction in the near future resulting from oil shortages which could become a catalyst for a breakdown in societal norms.  My wife tells me I read too much.

Now I am aware that people have to sell books and that books which predict bad things tend to outsell those that predict nice things. Are they all doing it just for book sales?

So my question to you is; what do you know that is giving you the optimism in the continued good governance of Canada’s finances and its continued prosperity. (F and the Peckerettes is not a team name that really inspires confidence).  I was born in Britain while the war was still raging and bombs were falling on London. People still went to work; they still went out for dinner. I agree that some did not come home at the end of the day but by and large people continued on their lives, after all I was born. Same as in the depression, times were tough but people still went about their lives, 75% still worked and paid their bills and taxes. These thoughts do give me confidence that society is cohesive and strangely difficult to disrupt. However I also believe that our current society has grown and prospered as a result of inexpensive energy derived from easy to find oil which was also easy to extract. It is that inexpensive component which is about to end.

I am not suggesting that things will go wrong and  I am not suggesting that you are wrong in your prognostications and the others are right, I am just seeking greater clarity, at least as much as is possible.

You are, to my mind, a beacon of hope (like Obama ). Hope for financial normalcy, continued bank profits, safety and security, albeit with a bit of a slump in some areas of real estate, but by and large things will be OK. As a Grandfather I truly hope you are right. Thanks again for all your efforts.

To be clear, things will not turn out well for everyone. Often I’ve referenced the yawning, growing canyon between people with wealth and people with stuff. Countless families who this weekend are driving kids with new soccer uniforms in new cars from new houses, who have built a life on debt, will be hooped. It used to be that teachers, doctors, lawyers or leaders were respected. Now it’s the guy with the biggest Lexus living in a house with gates. He could be a drug dealer or, worse, an options trader. Nobody cares. Stuff rules.

This is leading to the destruction of the middle class, which was the finest creation of the past hundred years. The endless need to consume, now so obvious with real estate, has turned burghers and the merchant class back into serfs. As mild deflation thumps the housing market, billions in net worth will be lost. How we could have watched this happen in the US, and learned nothing, is a mystery.

So the wealth gap widens. It’s why I keep yapping on about balance, diversification and liquidity, trying to guide readers away from house lust and into preferreds, trusts, bonds, exchange-traded funds and other financial assets. In a low-rate, low-yield, low-growth world, real estate is finished. Liquid assets will rule. Cash will be king. It’s a shame so few get it.

David, society therefore faces trauma, turmoil and terror. The advice Boomer parents give their kids will ruin them. Millions of retirees expecting golden years will be shocked. Governments will be overwhelmed and pension plans will fail.

But at the same time, coming years will swell the wealth of those who can track the changing tides. Economies will slowly but relentlessly grow supported by a level of policy coordination previously unknown to the world. It’s just sad that most people – their wealth tied up in illiquid real estate and stooped under the burden of ever-more-expensive debt – will not be getting a share.

There will not be another 2008, at least not for a generation or more. No depression, no financial collapse, bank failures or hyperinflation. Paper money will grow more valuable, not less, as it buys more real estate, car or computing power. Stock markets will be as volatile and changeable as ever, and will neither soar nor crash. Just creep jaggedly higher on the back of earnings.

Corporate profits support and affirm this. Following the GFC, companies did the opposite of consumers – they paid down debt, shed costs, embraced efficiency, became more competitive and found new markets. Meanwhile everyone you know was gaga over Wolf stoves, Miele coffeemakers, Bosch dryers and the polished granite alters upon which to worship them. Of course, they did not have the income to support this, so they borrowed from the future. This will prove to be a biblical mistake.

Central bankers, have become the guardians. Their concerted, coordinated and blunt actions have ensured no systemic failures will occur, no financial institutions keel over and no equilibrium is lost. Europe is contained. America is struggling back. China will be tempered. Liquidity will be injected repeatedly, as we saw this week, until stability rules. What most of your doomer authors forget is that sovereign debt is unlike consumer or corporate debt. No homeowner or CEO has the power to tax.

Other things also give me the courage to say the world will carry on and opportunity spread. Like our connectivity, which has revolutionized human knowledge and adaptability. Technology and education are antidotes to extremism and tribalism, and one reason there’s been no global war in seven decades.

So, David, things will be okay for everyman – but not for everyone. Which makes the future just like the past.

303 comments ↓

#1 Randy on 09.14.12 at 9:23 pm

What …no deleveraging ???

#2 City that smells like it sounds on 09.14.12 at 9:23 pm

Furrrst!!! oh yeah baby!!!

It you’d actually been first it might have been less pathetic. — Garth

#3 Not on the boat. on 09.14.12 at 9:25 pm

I play to win.

#4 Johnny B. Goode on 09.14.12 at 9:27 pm

FIRST?????

And Al Gore invented the Internet for this? — Garth

#5 Keeping the Faith on 09.14.12 at 9:31 pm

I love the pic. nothing more raw than life lived and life to live.

thank you again Garth.

you are a provider.

#6 Tripp on 09.14.12 at 9:33 pm

Garth, really moving picture, probably the strongest you ever had posted when it comes to what really matters in life!

Regarding technology and education, unfortunately there are too many on this planet who do not have access to it for various reasons. The headlines today are a very good example.

#7 george on 09.14.12 at 9:34 pm

The basic alchemy that economists are preaching to the world is that we can keep borrowing more money and printing more money to get our way out of the debt crisis. This theory, like the obsession of turning iron into gold is by any measure of common sense, impossible, stupid, dangerous and absurd. However like any good ‘con job’, the leaders and the general population are a perfect ‘mark’ because they desperately want to believe the myth. The alternative is to accept that developed countries and their baby boomers are going to have to endure years of hard times and a lower standard of living while global debt is paid down, defaulted on and deleveraged.

Economist or Alconomist

#8 nocte_volens on 09.14.12 at 9:37 pm

Al Gore invented the internet? Obama is a beacon of hope?

Stop being a literalist. — Garth

#9 Bottoms_Up on 09.14.12 at 9:37 pm

Could David really believe that humans in 100 years could possibly find, and extract, all the oil deposited over millions and millions of years, from trillions of tons of animal and plant extract? I firmly believe that end of oil — and end of inexpensive to extract oil — is a myth.

Also — humans have an innate ability to react and adapt — natural gas and other energy sources (hydro, nuclear, wind, solar, geothermal etc.) could help fill any void.

It is also human nature to think that something major (end of days etc.) will happen in your lifetime, when the reverse is most definitely true.

#10 Alero01 on 09.14.12 at 9:39 pm

Thanks for the clear assessment of the actions taken by corporations vs. actions taken by consumers. Is it any wonder that corporate entities have so much more money? If they’re divesting themselves of debt and cutting costs by not hiring people, then how can anyone complain that they’re “hoarding” cash? It’s a simple function of being debt-free and keeping the wallet closed. Any non-corporate entity can follow the same steps, but the great majority choose not to!

#11 East Van on 09.14.12 at 9:44 pm

Garth fails to address the biggest problem we face. The world is getting hotter. The ice caps are melting. Crops are failing. The population is rising to 9 billion. Soon the feedback loops of climate change will begin and we will have lost ability to stop runaway global warming. Wars will be fought over water. People will starve. Climate refugees will roam the earth. Ocean levels will innundate coastal cities. Floods will destroy homes and infrastructure. Wild fires will be unstopable. desertifaction will continue unabated. The coral reefs will disappear along with all the commercially viable fisheries in the world as ocean acidification continues.

This will not end well.

I’ll fix that on Sunday. — Garth

#12 Seven Stars and Orion on 09.14.12 at 9:44 pm

With sunshine posts like this, how’s a doomer supposed to convince his wife to let him buy a decades worth of freeze-dried food, and a seed collection to rebuild after the apocalypse?

#13 City that smells like it sounds on 09.14.12 at 9:46 pm

Furrrst!!! oh yeah baby!!!

It you’d actually been first it might have been less pathetic. — Garth
———————————————————-

Garth, I refused to stop being a first poster until you do an analysis on Regina and Saskatoon housing………….!!

#14 Claudius Emperor on 09.14.12 at 9:47 pm

Al gore did not invent internet.
http://www.computerhope.com/issues/ch001016.htm

You need help. — Garth

#15 Claudius Emperor on 09.14.12 at 9:48 pm

And helicopter ben did not invent the inflation, he is re-inventing it.

Garth, it seems you are wrong on inflation and golds/silver….

What inflation? — Garth

#16 McDerp on 09.14.12 at 9:50 pm

I think the author of that well written letter perhaps should read this:

http://www.theglobeandmail.com/report-on-business/us-boom-in-oil-production-spells-peril-for-canadian-crude/article4535525/

Several years back I too was a firm beliver in “peak oil”. Jeff Rubin’s book was excellent on the topic. I’ve since done a complete 180 on the subject. Even if the production estimates don’t pan out to predicted levels, there still is an ocean of crude about to hit the North American market. I’m from Alberta, I pray that this means the end of Truckballs…

#17 TS on 09.14.12 at 9:50 pm

Garth,

Nobody can see how much money you have in the bank account.

They can see your interlocked driveway and the nice shiny leased beamer parked on it.

You’re effin’ right Stuff Rules!

#18 Stupesing in Cabbagetown on 09.14.12 at 9:51 pm

Another great post. We have been complacent in our own demise, haven’t we? In fact, we have been enthusiastic participants. Such a shame.

#19 A Yank in BC on 09.14.12 at 9:54 pm

He lost me at “a beacon of hope (like Obama).” Was that possibly tongue-in-cheek?

#20 Foggy on 09.14.12 at 9:55 pm

Do I detect a certain pathos in the pictures of late?

#21 TurnerNation on 09.14.12 at 9:57 pm

Smoking man called it. 416 SFHs to the moon. Today TO SOLDS is reporting six or so, sold in city’s South ends.

Two at 110% of asking, several at 105-106%, the others at 100%.

One listing reads:

“**Note: Bully Offer Presentation 13/09/2012 6:00Pm.**Extra Wide Semi, Renovated Throughout. Sought After Easy Flow Floorplan, Luxurious Appointments With Victorian Charm, Built In 1894. Gas Fireplace, Quality Built-Ins, Bathroom On Every Floor, 2nd Fl Fam Rm., 3rd Fl Office And Deck, 3 Great Sized Bdrms, Spa Like Bath With Soaker Jet Tub And Sep Shower.Large Eat-In Kitchen And Incredibly Private English Mews Garden. ”

[emphasis in original]

As LH mentioned, yesterday, the last round of TO SOLDS in C01, C02 were all over asking.

#22 Not 1st on 09.14.12 at 10:00 pm

“Europe is contained. America is struggling back” Garth, did you write that with a straight face? Cmon, you can’t seriously believe that. Tell us its sarcasm, anything. The BEST investment minds, hedge fund managers and CEOs say the U.S. is headed for a sub 2% GDP for the foreseeable future along with soaring debt and liabilities.

And your point about a global war note happening for 70 years is a copout. We have had hundreds of skirmishes instead or one big one so whats the difference – same lives lost and nobody learns anyway.

#23 prairieperson on 09.14.12 at 10:02 pm

I hope you are right. There is, however, massive unemployment among young men. In the past, unemployed young men were a signal for war. Armies waiting to happen. I hope I’m wrong, but my sense is that war might be somewhere just out of sight over the horizon. Hopefully, it will regional, contained, not involve super powers against each other. Germany has attempted a coup, what it hasn’t been able to take by force in two world wars, it has attempted to take by finances. However, that is beginning to unravel. What it will unravel to, no one knows.

#24 Smoking Man on 09.14.12 at 10:05 pm

Gatho said

“Other things also give me the courage to say the world will carry on and opportunity spread. Like our connectivity, which has revolutionized human knowledge and adaptability. Technology and education are antidotes to extremism and tribalism, and one reason there’s been no global war in seven decades.”
…………………………………………………………….

Were you hang out with monks this afternoon. Holly philosophy. I want some of that

#25 BigAl (Original) on 09.14.12 at 10:07 pm

I disagree. Trickle down does not work…trickle up does. Any stimulus money should go directly to ordinary people, who will spend it, fostering growth in business. Giving QE to banks in the hope they’ll lend it out to businesses who will then open up factories and shops to ‘hopefully’ employ people is putting the cart before the horse. Oil up, stocks up, gold up. So that’s it then? No argument for trickle-up? Just: “Sorry middle-class, it was nice to know ya, but this is all we can do. Maybe you’ll get the crumbs, but we really think its over for you”. And in the meantime print trillions for the already well-to-do? I really don’t think great nations like those here in the western world were built on this type of resignation and defeatism. This is the birth of the worst type of economy possible for the western world – crony capitalism, which has until now only been prevalent in the third world. It is surely firmly planted here when good men like the host of this blog have resigned themselves to it and have nothing more to do than shrug and just say that, hey, it helps corporate profits and the middle class is gone and there’s nothing anybody can do, or should do.

Sure, give government money directly to people who have already borrowed themselves into the ground. That’ll help. — Garth

#26 TurnerNation on 09.14.12 at 10:08 pm

Mmmm…burghers.

#27 Claudius Emperor on 09.14.12 at 10:11 pm

Al gore did not invent internet.
http://www.computerhope.com/issues/ch001016.htm

You need help. — Garth
————————————
–>I am sorry, I have been in the IT business for over 30 years now /wrote my first program over 30 years ago/, so allow me to know better the topic.

—————————

And helicopter ben did not invent the inflation, he is re-inventing it.

Garth, it seems you are wrong on inflation and golds/silver….

What inflation? — Garth

Inflation? The one at the gas pump and at the grocery store. there is hidden inflation of at least 5 % a year on food and gas in the last few years.

—————————————–

Garth you have my utmost respect. Absolutely agree with you on the housing and dividend investment topic.

but you are not factoring the US money printing policies…

While they print commodities will go higher.

John Hussman, another man that has my sincere respect is also wrong:

http://www.hussmanfunds.com/weeklyMarketComment.html

#28 Smoking Man on 09.14.12 at 10:14 pm

Sure, give government money directly to people who have already borrowed themselves into the ground. That’ll help. — Garth
……………………………..
A Gartho

the reason governments have money is because we gave it to them. It’s our money

But then again they print it out of thin air. I’m so confused.

#29 Blacksheep on 09.14.12 at 10:17 pm

Daystar # 158,

Being a total link guy, I’m surprised you overlooked the ones pertinent to your weak attempt at Subtly.
Let me help. Still waiting for that e-mail address : )

” Europe as a union is valuing that union as an entity that has enough monetary capacity to bail out its members. Its collateral? a European union is enough apparently. This is the European answer to today’s modern problem of sovereign debt. Is it justifiable for Europe to create an organization that has that kind of monetary power?”
——————————————–
http://en.wikipedia.org/wiki/European_Union

“Japan doesn’t Q.E., rates will rise and its highly possible that the nation could spin into default as a result. So… its Q.E. until default or bailout and the question there remains when which could be decades away or it could be years.”

“To the onlooker, it looks as though there is no plan to avoid this but maybe there is. An Asian union? A union much like the European union that gives itself the monetary capacity to bail out nations through another borrowing authority offering another layer of debt? Its possible. Who knows,”
———————————————
http://www.southasianunion.net/

“This leaves Canada and the choices policy makers now face and I have to say that if the U.S. continues with Q.E., Canada needs to ween itself off of trading in U.S. dollars. “When the day comes that currencies are no longer trusted because fundamentally government debt can no longer be serviced realistically, protectionism will become the logical choice for policy makers. I can’t say when that will come, but its now likely before the end of this decade.”
——————————————–
http://en.wikipedia.org/wiki/North_American_Union

take care
Blacksheep

#30 Claudius Emperor on 09.14.12 at 10:17 pm

and 8-10 percents inflation on medications. per year

#31 Claudius Emperor on 09.14.12 at 10:18 pm

and at least 5-8 percents inflation in education/tuition fees

#32 so it begins.. on 09.14.12 at 10:19 pm

#21 Turner Nation

i counted 5 that sold over asking
However I also counted
1 that sold -600k less than asking and another sold -200k less than asking
and an area of toronto that reported NO sales.

Falling prices will start with Condos, homes prices +2million and homes in less desirable areas.
we will not match last October stats.

#33 hmm.. on 09.14.12 at 10:19 pm

Yeah, you are painting a rosy picture. Did you ever had opinion of diamonds as investment? Color, rare or regular cut/uncut?

thx

#34 rp1 on 09.14.12 at 10:22 pm

Garth, do you think Canada will start deleveraging? We haven’t yet. Some info on this process:

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/09/Dalio.pdf

#35 peter on 09.14.12 at 10:22 pm

Don’t worry the central planners are in charge. QE to infinity. Uhhh. No. There is an end game and I doubt it ends well. Bernanke will never unwind his balance sheet because the gvt spends 1 trillion a year more than it brings in. Lets see how $100 plus oil prices impact the global economy.
God help us all and protect us from the central planners and ever expanding arm of government in every aspect of our lives. No large soda for you. Its unhealthy!!

#36 nocte_volens on 09.14.12 at 10:22 pm

Al Gore invented the internet? Obama is a beacon of hope?

Stop being a literalist. — Garth

I don’t know whether to laugh or cry. Besides, we all know that Al invented global warming.

#37 george on 09.14.12 at 10:27 pm

QE Forever

#38 LH on 09.14.12 at 10:30 pm

c01 and c02 sfh market is doing fine

http://www.torontomls.net/PublicWeb/CL_CF.asp?link_no=45295621.175000&t=l&fm=F

#39 PoorgEoisie on 09.14.12 at 10:40 pm

Garth, if the fed/BOC gave money to directly to me I’d buy six copies of money road and pay some gregorian monks to talk sing it to me. If there is any left over then me, you and the monks can deposit our gains in the bank and then the bank can lend it out. Giving money to the banks or GM or some other rich guy doesn’t make me buy stuff. At least with big Al’s plan I get to touch it a little… It all ends up in the bank anyway

#40 LH on 09.14.12 at 10:44 pm

Haha I AM an options trader
Real estate is only my hobby

#41 Esmerelda Gabrielle Stephanie Guillermo Harrison on 09.14.12 at 10:44 pm

“Like our connectivity, which has revolutionized human knowledge and adaptability.
Technology and education are antidotes to extremism and tribalism”

Truer words were never spoken.

Its evolution in action.

Adapt or die.

#42 Ignorance Is Bliss on 09.14.12 at 10:47 pm

I’m agree with the concerns of #11 East Van. Climate change is affecting our bottom line more and more. Just in the last year or so we’ve been inflicted with higher prices on so many basics – peanut butter, bread items, everything made with corn (and that’s a lot of stuff) and this fall’s apple crop, all due to extreme weather afflicting us. And every time a hurricane is within 1,000 miles of an oil platform, the gas prices shoot up. The Mississippi river, which is a huge transporter of goods in the U.S., is 20 feet below normal levels in some places, seriously affecting load levels for transport. Environmental collapse could equal economic collapse if this path continues.

#43 Ayn Rand Army on 09.14.12 at 10:58 pm

#10 Alero01 on 09.14.12 at 9:39 pm

Thanks for the clear assessment of the actions taken by corporations vs. actions taken by consumers. Is it any wonder that corporate entities have so much more money? If they’re divesting themselves of debt and cutting costs by not hiring people, then how can anyone complain that they’re “hoarding” cash? It’s a simple function of being debt-free and keeping the wallet closed. Any non-corporate entity can follow the same steps, but the great majority choose not to!

—-
Nice post, and corporations are where the wealth is created in the first place, we need Apple to have Ipods, not the other way round…. This is sooo fundamental to what makes an economy work.

Goes to show what Carney knows then eh, he was calling for corps. to spend. Trust me, corps WOULD spend if they saw and OPPORTUNITY. They don’t need to be told when to be GREEDY!

Nice post.

#44 GTA Girl on 09.14.12 at 10:59 pm

Smoking man…

Hope you will be at the seminar and wear a name tag.

And I hope you look exactly like a cross between Tommy Lee Jones, Wilford Brimley and Ed Asner….or would that just be one person?

I’ll bring a hip flask of grappa.

#45 FreeAlberta on 09.14.12 at 11:00 pm

Al Gore did not invent the internet——-he invented Global Warming

#46 Amarulaman on 09.14.12 at 11:09 pm

What the letter writer is expressing….and what Garth fails to address yet again. Is how does this magical growth of any kind exist in an era of peak oil?

I am a huge fan, but have always wondered why Garth does not see this simple fact for human kind going forward.

He needs to read some James Howard Kunstler and Richard Heinberg…just sayin.

#47 Bottoms_Up on 09.14.12 at 11:14 pm

#27 Claudius Emperor on 09.14.12 at 10:11 pm
————————————————-
Dude it’s called “tongue-in-cheek” or “sarcasm”. Look those up in the dictionary. Garth (as most people) do not believe Al Gore invented the internet.

#48 John in Mtl on 09.14.12 at 11:17 pm

While I don’t discount that the masse’s ignorance may very well lead them directly to the poor house – especially when drunk on houselust, granite and stainless, the destruction of the middle class is not necessaryly only brought about by individual irresponsibility. There’s a willingness to keep people ignorant through inadequate general schooling in important subjects like fractional reserve banking; the dangerous illusions of advertising and artificial “need creation”; “consumerism” (“stuff” rules); and credit with interest (the illusion of being rich) instead of real wage growth as a way to sustain a healthy economy and the ensuing prosperity. I could cite other things like the lies of organised religion to keep the people afraid and enslaved, rampant corruption and reckless spending at all government levels, global “competi-tiveness” that would have us working for a dollar a day so that big corps could make billions more, corporate hiijacking of government and true democracy, etc. Ignorant and passive people are a lot easier to control, influence and scare.

– “Central bankers, have become the guardians. Their concerted, coordinated and blunt actions have ensured no systemic failures will occur, no financial institutions keel over and no equilibrium is lost…

Europe is contained – not really, wait until after the American election. America is struggling back – and their government keeps peddling the lie of eternal growth, sustainable suburbia and a wasteful consumerist lifestyle, in short, “business as usual” insured by continued war and weapons sales. China will be tempered – they have their own internal lies and problems. Everyone should read Chris Hedges’s latest column “Growth is the problem”
http://www.truthdig.com/report/item/growth_is_the_problem_20120910/

…Liquidity will be injected repeatedly, as we saw this week, until stability rules. What most of your doomer authors forget is that sovereign debt is unlike consumer or corporate debt. No homeowner or CEO has the power to tax.”

That’s right – the power to tax. And how do you think this equilibrium and stability will be maintained? MORE TAXATION to sustain THE BANKS AND FOOLISH GOVERNMENT BACKING LIKE CMHC, more liar excuses for “austerity”; ultimately, more looting by the 1%. Only this time, its people like me that live responsibly that will be stuck to foot the bill. I got news for them…

– “Other things also give me the courage to say the world will carry on and opportunity spread. Like our connectivity, which has revolutionized human knowledge and adaptability. Technology and education are antidotes to extremism and tribalism, and one reason there’s been no global war in seven decades.”

Some of this technology has greatly enhanced our lives. A lot of it is also used to great advantage in the strategy of “divide and conquer”. Sure, millions can protest and rally on Facebook from the comfort of their armchair and have the illusion of “connecting”, but it is useless compared to a real crowd of millions in the streets protesting the system’s bull**it. The internet can be a great “relief valve” and the 1% know it all too well. As far as “there’s been no global war in seven decades” on account of technological advances, that remains to be proven when we remove nuclear weapons from the equation.

#49 squidly77 on 09.14.12 at 11:18 pm

Spot on man, spot on.

#50 Canadian Watchdog on 09.14.12 at 11:19 pm

Charts:

Canada Historical CPI

Food Price Index
Shelter Price Index
Transportation Price Index
Services Price Index

Alcoholic Beverages & Tobacco Products
Meat
Dairy Products and Eggs
Bakery and Cereal Products
Vegetables and Vegetable Preparations

Clothing & Footwear
Health & Personal Care
Women’s Clothing
Men’s Clothing
Jewellery
Child Care and Housekeeping Services
Homeowners’ Replacement Cost

Communications
Electricity
Water*

Purchasing Power of the Canadian Dollar

M2++ Money Supply

Most of the people on this blog will lose their wealth if they don’t protect themselves from currency debasement. Policy matters, and when it comes time for the government to pay its bills, they will change the rules.

Read history, and understand what lies ahead.

#51 Bo Xilai on 09.14.12 at 11:19 pm

“Technology and education are antidotes to extremism and tribalism…”

——————

Tell that to the US Consulate in Benghazi…

#52 DonDWest on 09.14.12 at 11:21 pm

“No homeowner or CEO has the power to tax. . .”

The facts state otherwise.

As a non-homeowner, I’m paying taxes to homeowners through the CMHC. I’m subsidizing their debts.

As a non-banker, I’m paying taxes to bail out banks that are “too big to fail.” My money is being plucked to rescue these multi-billionaire CEOs from their s****y failing businesses that produce nothing of value.

It seems quite apparent to me as a young, white, single man, who is not in debt and the beneficiary of little to no social programs due to my race, marital status, gender, age, and class; that I’m being taxed a great deal by homeowners and CEOs.

So remind me again, how is cash king? It seems the more you leave lying around, the more people take, take and take.

#53 langster on 09.14.12 at 11:26 pm

I guy i work with said a few weeks ago it used to mean something when you drove a mercedes now anyone can drive one. I agree credit is cheap these days. I drive a 20 year old car because i only buy cars in cash.

#54 Sound Money Gamer on 09.14.12 at 11:27 pm

Like Garth says “Do not put all your cash in one basket” and that also applies to “Do not put all your faith in the advice you get from only one source” and lastly avoid the msm they always have an agenda that ultimately will hurt you in the long run just like central banks and fiat money, sorry Garth but I disagree.

#55 Devore on 09.14.12 at 11:33 pm

#9 Bottoms_Up

It is also human nature to think that something major (end of days etc.) will happen in your lifetime, when the reverse is most definitely true.

It is human nature to want, no, NEED to believe that we are special, that we live in special times, face unique challenges, when millennia of history proves we’re at best average. Every generation has dealt with problems, every generation has seen progress and change in all areas of humanity, every generation believes it has the solutions to the problems of their forefathers and that the future problems they face are new and unique and have no solution. These beliefs force us, through cognitive dissonance (by far the strongest of all emotions) to undertake drastic self-defeating measures at tremendous cost to society to address the real and perceived problems we’re facing.

No, peak oil is not the end of civilization. Global warming isn’t going to wipe us out. Pollution won’t turn us into mutants. Not that these are not important issues, they’re just not nearly as important as we’d like to believe. Neither as they are as unsolvable as we’d like to believe. And certainly, no drastic actions are required NOW. But whether by design, or collective human nature, everything is an emergency.

The truth is, life will go on. In the local context, it means people will continue to go to work, pay taxes, buy stuff, there will be money in the ATMs, stores will be open, new books will be written, we will see amazing iterative and breakthrough technological advances, and all the other stuff that comprises the human story. Tomorrow the sun will rise and you will wake up, the gyrations of the economy and housing and markets and politics seemingly insurmountable, the now always vastly more pressing than the past, even though little has fundamentally changed in decades and generations.

Step back, breathe, see the big picture. Plan accordingly. Can’t live in fear some madman will detonate a nuke in your city, or economic collapse will plunge us into a Mad Max world, or an asteroid will end us all next month, or aliens will visit and give us replicators. Sure, tomorrow will be different from today, but not radically so that a humanity-wide paradigm shift is required today. Over generations, certainly. The only constant is change.

There is a theory the human brain is terminally bad at some pretty important things. Like very large and very small numbers. Probability. Risk. Exponential and logarithmic trends. We like things in manageable sizes and straight lines. Remote risks become daily concerns. You still have a much greater chance of being struck by lightning than any number of things you’re worried about every day, like, say, terrorists blowing up your plane. More likely to be run over by a car or dying from a medical mistake in a hospital than being shot. Complicated, far-fetched, improbable, impractical and fantastical “movie plot scenarios” dominate political discourse instead of the much more dangerous real problems, like sanitation standards at meat packing plants (how many people have to die before someone in charge at Cargill goes to jail?)

And on and on it goes.

An individual can vastly improve their situation by doing any number of simple and mundane things well within their ability and control, without having to worry one second about doomsday or economic collapse. Must be easier to throw yourself at a brick wall and say you tried but failed, rather than actually do something that might work. Change is hard. Admitting faults and mistakes is hard. There’s that cognitive dissonance at work again.

#56 dosouth on 09.14.12 at 11:34 pm

Well the “Boomer Trigger” is happening now in Parksville. Been watching this listing since last year @899,990 to $581,900 today. It was dropping 1k per day over the past week from 689 to now. I receive immediate updates from a local realtor so this site hasn’t changed yet – but it will…be sure of that!

http://tinyurl.com/8scqwhu

#57 coastal on 09.14.12 at 11:36 pm

“So, David, things will be okay for everyman – but not for everyone. Which makes the future just like the past.”

You got that right, just like the young Victoria couple I know who finally completed their bankruptcy a couple weeks back. Handed in the keys to the bank, 100K in LOC all off their backs now. Five years of paying the man with dick to show for it, not even a nice trip or two for some nice memories nor even a nice car. Just some bucket of bolts to haul the kids around in.

They feel better now, pressure is off but still there’s a bad feeling of “how the hell did we screw this up with a two job family and not living the high life”. I’m sure there are many more horror stories out there like this in the process the arrogant agents don’t want to hear about. It’ll blow up their BS agendas everytime there’s a pop in the daily sales numbers, except they fail to tell you the part about mass price reductions spreading like bed bugs in a flop house that created the sales. This is gonna get right ugly out in BC, I have no doubt now.

#58 betamax on 09.14.12 at 11:48 pm

#16 McDerp: “I too was a firm beliver in “peak oil”….I’ve since done a complete 180 on the subject.”

Excellent post and link. Yes, cheap oil may have peaked, but new technology and a will to drill where no one was allowed to drill before will ensure that the post-peak decline is glacial in effect. The doomsday scenarios may eventually come to pass, but we’ll all be dead and buried well beforehand. Carpe annum, full steam ahead and fire up the barbecue.

#59 Blacksheep on 09.14.12 at 11:50 pm

“What most of your doomer authors forget is that sovereign debt is unlike consumer or corporate debt. No homeowner or CEO has the power to tax.”
—————————————————-
100% agree Garth. But it does not end there.

The power does not lie so much in the actual ‘collection of revenue’ from the Cattle to finance the nation, but the necessity for the Cattle to ‘settle tax liabilities in sovereign currencies’, creating competition for said currency and thus demand. Taxation is just a ledger entry, stating you paid your liability this year.
I know…..it’s hard to believe.

The reality of the situation is Sovereigns in control can and do ‘print at will’. No constraints beyond public perception. I hear it all the time, my taxes pay for this! my taxes pay for that! Send the US fed cash and they most likely shred it. Why? It’s cheaper to just print more than process your dirty money.

As much as I like gold, Rev Canada will not accept nuggets to square accounts.
Wrap your brain around that and see If you want hoard cash (just paper and ink) under the mattress. As in all things, the laws of supply vs demand still applies, it just muddies the water a whole bunch.

take care
Blacksheep

#60 betamax on 09.14.12 at 11:51 pm

#27 Claudius Emperor: “allow me to know better the topic”

Dude, it was a joke. You “need help” because you apparently have no sense of humour. Get it now? Everybody else did.

#61 Devore on 09.14.12 at 11:51 pm

And #11 East Van just provided the perfect example this scales beautifully to the societal level.

We’d rather spend trillions we don’t have in a futile and heroic fight against global warming to save the environment, than a couple million on something practical that actually does so. That would require real work. Risk. Effort. Cost. Inconvenience. We’ll wave the ‘world’s greenest city’ flag while pumping tens of tons of raw sewage into Burrard Inlet and False Creek, rather than build treatment plants. That shit smell around the seawall in Vancouver ain’t the ocean breeze.

Carry on.

#62 45north on 09.14.12 at 11:52 pm

not 1st: We have had hundreds of skirmishes instead or one big one so whats the difference – same lives lost

not so, the Battle of Vimy Ridge lasted one week during which the Canadian Corp lost 3600 men.
http://en.wikipedia.org/wiki/Battle_of_Vimy_Ridge

compare and contrast that to Canadian losses in Afghanistan – less than 100 soldiers a year

we are entering the most critical period in history, our decisions, our lives make a difference

#63 Victor on 09.14.12 at 11:53 pm

Why it’s better to rent than buy

http://business.financialpost.com/2012/09/14/why-its-better-to-rent-than-buy/

Does it make more sense to buy or rent a home from an investment perspective? It’s a question I get asked more than any other. The answer, in an era of historically low interest rates and perpetually rising real estate values, appears to be obvious: buy.

Just ask any real estate agent and they’ll tell you, “Don’t pay your landlord’s mortgage for him,” or “Build equity for yourself instead of flushing your money down the toilet,” and our favourite, “There has never been a better time to buy.”

It all sounds pretty convincing, but it’s wrong. Unless you need the security blanket of owning your home, it is nearly always a better financial move from an investing standpoint to rent rather than buy. The reason: People rarely consider three major costs of owning a home.

#64 Canadian Watchdog on 09.14.12 at 11:54 pm

The comeback of Occupy Wall Street

Like I said Garth, it’s got legs, it moves and right now its looking for its head. If you think people are going to accept pauperism without a fight against the powers that robbed the global economy, illegally, then you’re in for a surprise.

#65 45north on 09.14.12 at 11:54 pm

Corp = Corps

#66 Victor on 09.14.12 at 11:58 pm

http://themashcanada.blogspot.com/2012/09/relistedprice-drop-50-salisbury-avenue.html

This 3 bathroom, 2 bedroom semi was initially listed in May for $949,900. I thought it would go over but it never sold.

There were mixed reviews about the house, especially the kitchen. Stuart and an anonymous reader loved it whereas a different anonymous reader said…

‘The kitchen is seriously unimpressive — basically a cramped galley, and the Bulthaup cabinets are nothing special.’

Well, looks like the owners, or at least the agent agreed, or someone, and they tore out that kitchen and put in a whole kitchen!

I know what you are thinking…..

W….T….F!!!?!!!!

At least that is what I am thinking.

<BThey have also reduced the price by $50,000 to $899,900.

#67 Jeff on 09.15.12 at 12:03 am

Garth,

That was so touching. With Bernake and company out with a plan to print money until unemployment is resolved, how can you post that…#*[email protected] Needless to say, I don’t share your views. We’re in a new age of centrally planned economies…how can printing money “until things get better be the answer? And to tell people there won’t be another GFC in our lifetimes is nothing short of idiotic. Two huge crashes in the span of one decade disprove you. You’re not naive, so therefore you’re disingenuous. Please stop writing this drivel.

#68 Grim Reaper/Crypt Speculator on 09.15.12 at 12:06 am

Sniffle sniffle….very emotional posting photos this week…

I think I will lay off Smoking Man till ….um….errrr….ahhhhhh…?????

#69 Hoof-Hearted on 09.15.12 at 12:07 am

Al Gore ?

Picture is worth a thousand words.

http://www.motifake.com/gore-liberals-democrats-climate-congress-funny-demotivational-posters-48667.html

#70 Jonny Noc on 09.15.12 at 12:08 am

Thanks Garth as always.

“And then it all goes back in the box.”

http://www.youtube.com/watch?v=DHM758QvcEs

#71 Kaganovich on 09.15.12 at 12:09 am

It looks as if you’re part of the cult Garth:

http://trimtabs.com/blog/2012/09/11/more-money-made-owning-stocks-than-running-companies/

Will orchestrated intervention by the central banks of the world really go on until things are settled back down?

#72 Cowpie on 09.15.12 at 12:30 am

#42 Ignorance Is Bliss:

I’m in complete agreement. Although I’m not sad to see GMO corn crops fail, global warming and its current + future costs cannot be ignored. I attempted to “eat locally” this year – food crops in our area got wiped out in July by hail, even though storm clouds in our area get treated to prevent hail. We had a hail storm a few years ago that caused millions of dollars in damage, not to mention that our forests look weirdly brown/dead from pine bettle damage now that our winters aren’t cold enough to kill the bugs.
People in Cowtown think global warming will turn the prairies into a tropical paradise, or so a petro engineer recently tried to tell me.

#73 Nostradamus Le Mad Vlad on 09.15.12 at 12:41 am


“However the point of my discourse, apart from expressing my admiration for your writings, as well as your political and current career, is to question your reasoning for your continued optimism concerning the world’s economic future. / Nobody cares. Stuff rules. Central bankers, have become the guardians. Liquid assets will rule. Cash will be king.”

As always, many sides to every story but one is obvious — in most parts of the country, RE is an illiquid asset, and folks depending on the (profit) from their home sale should think again, as it’s unlikely to materialize.

Central bankers may indeed have become the guardians, but can they be trusted? It’s not surprising that many are losing faith in the money junkies.
*
2:39 clip Smoking Man — US$8 or 9 / gal. gas in NJ and NY; 1:34 clip “Perry accuses Bernanke of treason for central printing.”; Banxters want the US to lose WW3. Why? Because the west is a dying empire. WW3 could well be a fiscal war, and Gold, the US$ and the Euro; Crash Alert Two Lotsa talk, but nothing substantive; Producer of anti-Muslim film was Fed snitch (FF); Benny’s medicine; Ax tax breaks for wealthy pensioners. Smart idea; Avalanche Not the GM product, fiat currencies; Cost of lviing soars; Surprise factory drop; Obombanomics and Bernanke; Zuckerberg speaks and FB rallies; Japan growth downgraded; Donald Trump On this he may be right; Devastating Comiing US cuts, prior to election; Affluent Americans, yet confidence falters.

Cdn. Friday links and more stuff; Weekly Savings Takes discipline, but in the long run, it’s worth it; Redefining Frugality Demand at the Kelowna Food Bank is up 12% this year, and the shelves are empty; The Fed’s Bazooka; Blogger may have saved the US economy; ECRI’s Lakshman US recession began in June; Zimbabwe, here we come; If it’s edible, buy it; New Best Buy CEO sells shares; Gold Reserves Top Ten countries; China IKEA good, Home Depot gone; Johnny Paycheck Buys 1/2 as much gas as a decade ago; Bernanke’s gift to Romney.
*
US-backed terrorists took out ambassador; Russia – China (probably with a few others) say non to US missile shield, and Son of Satan New missile to be created and built by Russia; Muslim Protests now in 20 countries; US “This is a red-warning sign that the US government may, in fact, be contemplating a war against both Iran and Russia. To project US forward military power, upgrades like this can be done, literally, in a matter of days, if the US government wishes to do so.” wrh.com and More protests; No rope that takes guts; Monsanto For those who advocate GMO food; Underground WH Has to be a reason for it; What ails Canada? The CPC for starters; Russian Pyramid Power Pic and story, and Underground Pyramids in Italy; Dog and Pony Show but this is one tall dog.

#74 TNT on 09.15.12 at 12:41 am

Garth,
Throwing money at this problem has never worked.
All fiats eventually crash.
Great minds said they never would.
Russia and China are bypassing the petro dollar announced earlier this month.
China and Japan bypassing the USD in trade.
Trillions of funny money coming home to roost.
Food prices up 40% since QE1, gas 9$+ in parts of the US.
Inflation 2.0
The economic fabric of the States is wearing more thin daily.
Do you not consider being on life support systemic failure, a weekend at Bernies.
I predict a huge market downturn within 4 months.
The US dollar is done like dinner.
If i’m wrong i’ll buy you dinner, perhaps KFC.

#75 Scalgary on 09.15.12 at 12:42 am

Wow,

What a decent mail by David? Is this called “Grown Ups”?

Garth,

“…I will fix this on sunday…” That’s hilarious!!!

#76 Fool me once... on 09.15.12 at 12:55 am

Wow, powerful picture Garth, independent of forum content.

BTW #17 East Van, if you grew up in East Van in the 60s and 70s, everything you described is a cake walk in comparison :)

#77 jonnib on 09.15.12 at 12:57 am

Garth:

To be off topic (slightly) with respect to the usual blog inquries to investments and real estate I humbly ask for your advice from your past political life. Our great nation is under a great shortage of skilled trademan and a lot of the western provinces are expierencing this currently. As a former tradesman I need some advice as to the conumdrum of inter provincial qualifications and certifications. Seems like this supposed “Red Seal” which is supposed to be “national trade recognition” in scope is battered in some cases by provincial regulation EVEN THOUGH apprentices becoming journeymen are granted this status. Which ferderal department should I start with to correct this? In the words of the Blues Brothers … I am about to embark on a “mission from god” to sort this mess out. Any advice would be welcomed.

#78 Scott in Gibsons on 09.15.12 at 1:02 am

The difference between Garth and Doomers is the information they operate on. Garth has lived a succesful life with moments of considerable power and wealth. Garth’s world is good. Things have worked out.

Doomers are operating on different information. Maybe they were poor at some point in their lives. Maybe they had family trouble. Or maybe they just have a strong conscience.

Ever larger financial crimes are being committed. Madoff, MF Global, HSBC drug money laundering, and the biggest crime of all; counterfeiting by Central Banks. When they print new money it immediately has value. Where does that value come from? You and I and everyone else in the economy. They steal from us when they print money. This is the basis of Garth’s optimism.

Can you not see Garth why there are some who are very concerned?

#79 earlybird on 09.15.12 at 1:26 am

Superb post….such a well presented question and reply. All that printed money(US) wont make it into the real economy, (no velocity in supply of money)hence low inflation. It makes it as far as the banks, they just invest it, lots flowing to commodities, where inflation is showing up. Commodities will keep the money printers in check. This economy we have created does not run on expensive oil, oil is the blood, the EROEI is getting very low….its not the end of the world, it would be the beginning of a different one…..namely no more shipping useless crap around the world, efficiency will be the new power. Gold is where misinformed people go to hide, oil is the real money.

#80 chaser on 09.15.12 at 1:30 am

“America is struggling back”

Garth then you better tell Ben that he doesn’t need to do the QE3 to infinity.

#81 Spiltbongwater on 09.15.12 at 1:46 am

With all this alarming climate change talk, and destuction when the oceans kill us all in the end of days, why do we care so much about how much debt those homeowners are carrying? Borrow, and heloc to the max, as if half of what the alarmists say is true, then you may as well have some fun in the meantime.

#82 NewWorldPartyDotOrg on 09.15.12 at 1:47 am

What could be just as bad, or worse, than the end of cheap oil, is the Stealing from Children via government debts. It is the biggest heist in human history:

http://www.newworldparty.org/2008/11/stealing-from-children.html

On top of that, the government, controlled by baby boomers, created the Housing Bubble which will transfer even more wealth from the young to the old.

http://www.newworldparty.org/2011/04/housing-most-manipulated-market-in.html

The young generation need to speak up and complain to their politicians, otherwise they just continue to get screwed.

#83 a prairie dawg on 09.15.12 at 1:51 am

“And Al Gore invented the Internet for this?” — Garth

– — –

Garth, please don’t propagate that myth about AG inventing the internet. Some will actually believe you. He would have been in diapers when DARPA.net got off the ground. And let’s face it, he ain’t no Bill Gates. lol

Great post tonight btw. Something different in your prose this time around. Good stuff.

Hope you like the pic in your email folder… lol

#84 THE CELIAC HUSBAND on 09.15.12 at 2:03 am

Since having moved to Europe, we don’t have english TV. French only. Though I speak it, I watch much much less of it.
The best side effect is that I worry less about things I can’t influence and focus more on issues I can do something about.

Only bad news sell. The world keeps turning.

#85 Rick Perry on 09.15.12 at 2:18 am

How can you have deleveraging in housing when the US central bank keeps doing QE3… if anything they are propping up the house market again and expect house prices to stay the same or actually go up… I dont think they will go up but they wont go down that much because there is so much more money in the system with all assets classes rising in prices… real estate wont just go up as much as other assets…. this also pushes down interest rates as well… to bad for savers…

Buy gold, buy silver, buy oil, buy agriculture… dump dollars, dump bonds, and get a second passport to another country and keep some of your wealth outside north america….

#86 T.O. Bubble Boy on 09.15.12 at 2:31 am

People need to focus on what they control. If you’re not Ben Bernanke or Obama or Carney or Flaherty or Harper, why are you so stressed out about whether rates rise/fall a quarter point?

Plan your life with some “buffers”, and don’t go all-in on a house, gold, oil, diamonds, beanie babies, storage lockers, or whatever you think is a sure thing.

Pay attention to the macro stuff, and always remember that every market is cyclical in some way, and nothing goes up forever.

That being said – life is short: take some calculated risks, and don’t be afraid to spend some hard-earned money on something other than the necessities.

#87 Mr Buyer on 09.15.12 at 2:35 am

Hey Genworth says condo prices to soar in 2013
http://ca.finance.yahoo.com/news/condo-prices-rise-most-cities-2013-demand-continue-091421596.html
I better get two now or be priced out forever…NOT

#88 Johnny D on 09.15.12 at 2:56 am

“…Technology and education are antidotes to extremism and tribalism…”

Didn’t a fourteen minute video posted on youtube just cause every muslim country to go crazy and start rioting and killing? I guess technology isn’t the best thing for everyone.

#89 EIT on 09.15.12 at 3:14 am

Sorry Garth, not seeing the value in what you guys are leaving behind for us.

#90 B P O E $$ #1 on 09.15.12 at 3:15 am

Thats right you heard it here folks, the unthinkable is unfolding, sales in Vancouver worse than 2008 inventory past 19000 and soaring to 20000, completely unstopable, the bubble has burst, all the pros waiting in the wings have filled their pants and were last seen waiting in line at Money Mart. Fire sale pricing on Mercs and Beemers from repo man coming soon, 2 for 1 hammers and drywall at Home Depot. Bob Rennie and Tsur new managers at Wendy’s. I’m right!

#91 cynically on 09.15.12 at 3:18 am

Yes #8 nocte volens, Obama, a beacon of hope unlike the other guy, a flashlight of despair.

#92 Next | CanuckPost.com on 09.15.12 at 3:30 am

[…] Next Posted on September 15, 2012 by chinatocanada Garth Turner » Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate […]

#93 cynically on 09.15.12 at 3:47 am

#24 Blacksheep – you say that if the US continues with QE, Canada needs to wean itself off of trading in US dollars. Maybe in petroleum if the rest of the petro world were to change its medium of exchange but Canada alone could never do it in all other US trading and I’m sure wouldn’t want the repercussions for trying to do so. The US still dictates the rules as far as Canada is concerned, good or bad?

#94 Onthesidelines on 09.15.12 at 3:53 am

These sort of posts are entertaining but of little value. Your analysis and the implications you draw are pure fluff. Yo may be right, but you also may be completely wrong. Your optimism hinges on basically 3 flawed arguents, all of which can be easily shot down. First, you claim that the middle class has destroyed itself with debt fueled consumerism. But you fail to understand the reasons behind this. Consumerism is a byproduct of your ever-so-hopefull advances in communication technology and education used for the not so worthy corporate and government cause of propagnda and indoctrination of the general public. People have become incurable consumers to a great extent because they have been indoctrinated and manipulated into such behaviour by those who are better educated and in the service of corporate greed. Need we discuss how the mainstream media, government and the realestate industry have maniulated the public into the “buy now” mind set? You know, the “you’re richer than you think” propaganda.

One could also argue, as I have done here before, that the middle class started to disappear long before the housing mania. Consumer debt is a direct result of the continuing changes in the power structure between management and labour in a globalized marketplace where 1st world labour competes with the cheapest labour available on the other side of the earth. As a result of this macro-economic trend, the wages and, therefore, the living standards of the middle classes have continued to slide. The taking on of debt to maintain living standards is, therefore, not a cause of the decline of the middle class but, rather, its symptom.

It could also be argued that for numerous reasons, in particular youth unemployment, Europe is not out of the woods nor is social unrest on a large scale an unthinkable possibility. Recent events in the middle east are very much a result of youthful populations with no employment prospects. Spain, Greece and Italy are not much different.

That the almighty central bankers are in control and that there will be no repeat of 2008 is truly laughable. These twits all screwed up on the way to one of the biggest global fracasos 4 years ago while doing the bidding of their former employers in investment banking, and we should think that they can set it right? Governments and their regulatory bodies are now more than ever in history a revolving door for industry insiders who write legislation for their own benefit and short term interests.

Never mind global climate change even or environmentally driven societal callapse, how can one have any beacon of hope with the corrupt and mindless leadership we see in governments throughout the world and the short term greed of corporate interests they collude with?

I’ll give you one thing though. Cash will, indeed, be king. As will be mobility.

#95 groovin_123 on 09.15.12 at 4:01 am

” Paper money will grow more valuable, not less, ”

That’s the most ridiculous prediction I’ve read on any financial blog this year.

Perhaps you should refresh yourself with some currency charts.

I wish I could print more currency and it becomes more and more valuable, like perpetual motion machine.

#96 Daniel on 09.15.12 at 4:17 am

Sure, give government money directly to people who have already borrowed themselves into the ground. That’ll help. — Garth

The same could be said for the government…

Sure, give government money directly to governement who have already borrowed themselves into the ground. That’ll help. — Daniel

———————-

The truth is, this is just a band-aid. Stocks will do alright for a while, everything will seem peachy until after the election, then come next year we’ll have all the same problems, just with more debt.

QE3 is not a fix, the debt has to be purged …

We’ll see lower USD, increase in the stock market, increase in gold/silver/oil for the next few months.

Then in Jan Feb, we’ll see higher USD as people see problems arise, but we’ll also see higher gold/silver as people start to see it as a place to put wealth as the US debt grows.

We’re in a 8-10 year down cycle starting in 2008, we’ll see lower stock prices than 2008 in the coming years and won’t see higher stock market prices than the 2006 and 2007 levels until around 2020.

#97 Mr Buyer on 09.15.12 at 4:30 am

QE to infinity will not alter the ultimate collapse of this RE bubble. Not much will really. It is happening now.

#98 Charles Ponzi on 09.15.12 at 5:06 am

No homeowner or CEO has the power to tax.

Who will the government tax when there is no more middle class??? The rich are good at avoiding tax and the poor have nothing to tax.

#99 Al on 09.15.12 at 5:07 am

It is because “central bankers have become the guardians” that we are all in serious trouble indeed. The “level of policy coordination previously unknown” that they are seeking to impose may not be accepted as widely or readily as they would hope.

#100 JC on 09.15.12 at 5:39 am

How the money that is being created out of thin air, not even printed, is going to be more valueable in the future, is beyond me.

#101 Rob now in Nova Scotia on 09.15.12 at 5:54 am

“What most of your doomer authors forget is that sovereign debt is unlike consumer or corporate debt. No homeowner or CEO has the power to tax.”

What most mainstream authors forget is that raising taxes slows down a nation’s economy.

#102 Superman on 09.15.12 at 6:17 am

Not going to lie, this photo made me tear up a bit. Yeah, even superman can cry. My mother died of cancer in 2009 and a few hours before she passed she held her grandson in her arms much like this. She lived her life for her grandson. My sister was pregnant with another baby boy and delivered him 8 days after my mom died. She never got to see her second grandson, but she lived a lot longer than she should have trying. The life will eventually fade from all of us. Enjoy the important things. Deep Garth, deep.

#103 nsqt on 09.15.12 at 6:47 am

Well….3 percent increase in rates for Nova Scotia Power starting in Jan 2013…..

#104 Canuck Abroad on 09.15.12 at 7:04 am

What do you have against options traders?

#105 Buy? Curious? on 09.15.12 at 7:08 am

Garth, you’re scarring people! If people were to sell now during fearful times, they’re going to take a loss. The time for selling your house has passed. Even if you listed your house right now, it would months to move it. Just ride out the storm, rent out a room, take in a foreign student, don’t lose your most valuable asset because you’re trying to time the market.

#106 John on 09.15.12 at 7:47 am

Well.

Your espousing the supposed “good character” and “soildity” of David, and his “faith in the human spirit” and piggy-backing it onto the ponzi.

You’ve made zero advance by “warning” people about debt, liquidity and diversifcation if you don’t apply that plain talk to the ponzi.

Your take on “central planning” is patently awful. Even singing the praises for thieves and crony capitalist supporters ( of which you are one).

Your post is so deeply flawed and filled with half-truths and barely edible “appeals” to human “higher values”, that the unbacked assumptions all jump off the page one by one. It would make a debate horribly tedious. It’s clear you don’t want one…and have no intention of creating a setting for one. You are instead looking to produce traps for doomer fools, who fall into reactive polarity and are quickly tossed aside ( as you can already see in the comments).

You know, not living in Canada, I hadn’t heard of CBC’s “The Dragon’s Den”..and looked it up on youtube. In a kind of morbid fascination, I saw how people are sucked in…to the same style of power play and BS you’re outlining in your post. If you’ve been soaked in the culture you might not see it:

-The beta male thinking “business” and “investment” and “MBA” and blah blah blah nonsense, giving away all his power.

-Drawing an unknowing innocent kid into the toxic dynamic and power play, and piggy-backing off the “Canadian family” sacred cow icon.

-The dark suited supposed “experts” arrogant and suffering extreme ego-ruptcy. Pure low self esteem.

-The body language ( removing glasses, facial posture, the “expert tester” tone, the supposed “put you on the hotseat” nonsense, the “club” BS).

Oh man, it’s bad. It’s how the housing bubble went forward. There are no natural healthy anchors. The subtext and true social dynamics are absolutely unbelievable. I mean off the charts. The frog is boiling and nearly cooked.

The thing is, David is right. But you, Garth, are so far off the main road, you don’t even know where it is.

For me personally ( in my own life and experience), being off the main road and finding out ( usually against my will) is the most important part of getting onto something real…quitting the hiding out and joining the human race. The kind of vibe David is sincerely aiming out in an imperfect way.

Being “kind” to the “out of debt, liquid, diversify” mantra as a replacement for honesty ends up being like holding an AA meeting in a bar.

And here is the awful clip. Never even heard of this until today:

http://www.youtube.com/watch?v=esFIE9uotsI&feature=youtube_gdata_player

#107 daystar on 09.15.12 at 7:55 am

#29 Blacksheep on 09.14.12 at 10:17 pm

When I began blogging regularly years ago, fellow bloggers conditioned me to use links frequently to validate or reference the data I used. Certainly it encouraged me to do way more online searches on the subject of the day and use links so that readers could see where I’m drawing my intel from and as a result I became far more informed of the issues and topics of the day. Online searches and links have helped me a great deal in making some strong points over the years and its just become a good habit for me, one I should continue to keep (if I don’t get lazy).

In that context, while Asian and North American unions created for the sake of a new lending entity or central bank to drum up fresh capital for sovereigns is still hypothetical, the European economic union is nothing new with a European central bank that has come into play heavily this last week so the question I was mulling over in my mind yesterday and now coaxed to find out by yours truly was, who backstops the ECB and what are the capital requirements of its members?

http://www.efsf.europa.eu/attachments/faq_en.pdf

K 7, 8 and 9 answer these questions. 11% capital requirements scaling up to 15% by 2014 is a sweet way of generating new capital with dirt cheap rates for sovereigns. The world knows or should know that Italy with a public debt to GDP ratio around 123% couldn’t continue to remain solvent selling 10 year bonds with 6.6% yields:

http://business.financialpost.com/2012/09/13/ecb-pledge-drives-down-italian-bond-yields/

The answer for Italy is for the ECB to restructure their debt at much lower yields to give their government a chance to balance budgets and return to surplus as GDP grows over time. The ECB stepping in buying bonds at far cheaper yields gives Italy and Spain a chance to turn it around. Without the ECB stepping in, Italy and Spain leaving the Euro would have been certain I believe and the consequences would have been a dramatically weaker Euro I think, hurting all of Europe as a consequence.

Inflationary factors, reduced buying power and value, market shakeups, there’s plenty of reasons why Europe should step in and restructure Italian/Spanish debt with lower interest rates and its a gamble to do it, Europe has to rely on Italy and Spain to get it together in a big way through fiscal policy but in the final analysis, it was likely a bigger gamble for Europe not to help Italy and Spain through their woes. The breakdown on K9 of the link above hints as to why when one considers how much exposure France has to Italian debt.

Getting back to Asian unions and NAU’s, ah… but this comment is already fat with volume. Cheers

#108 MarcFromOttawa on 09.15.12 at 8:33 am

Sure, give government money directly to people who have already borrowed themselves into the ground. That’ll help. — Garth

Of course banks don’t want to be paid back with devalued currency.

#109 Smoking Man on 09.15.12 at 8:41 am

#44 GTA Girl on 09.14.12 at 10:59 pm

LOL You do the last time I had grapa, ended up getting roughed up by bouncers at Barbarales(strip joint) in Ottawa. Jack Danial’s makes me spontaneously sing led zep songs.

won’t need a name tag, I look like this guy, few lbs lighter

http://cbskjaq.wordpress.com/2010/10/14/the-bald-100-power-list/#photo-1

Wine works best.

#110 Al on 09.15.12 at 8:43 am

Re: #50 – Canadian Watchdog; Jim Sinclair of http://www.jsmineset.com is telling his followers to clean out their retirement accounts because that is what the governments will go after to pay their liabilities !

#111 Ralph Cramdown on 09.15.12 at 8:45 am

If they’re divesting themselves of debt and cutting costs by not hiring people, then how can anyone complain that they’re “hoarding” cash? It’s a simple function of being debt-free and keeping the wallet closed. Any non-corporate entity can follow the same steps, but the great majority choose not to!

Get your head out of Atlas Shrugged and go read some real economics! Your expenditures are somebody else’s income. So if we all cut back at the same time, aggregate income goes down dramatically, as in depression. Just google the “paradox of thrift” and be enlightened.

#112 Darryl on 09.15.12 at 9:07 am

You’re getting old Garth

You’re opening pictures are starting to get a little to feelings oriented .They make me feel all warm and fuzzy inside and I don’t like that.

To many hugs and not enough babes !

#113 Nemesis on 09.15.12 at 9:11 am

Let’s hope so, OldPol…

But for the sake of the historical record, I can tell you that the FortuneTellers are ‘restless’. Them ChickenEntrails aren’t looking particularly good of late – consequently, the HiveMind (or what’s left of the CarbonBased one) is rather worried.

Still, all in all – I like to think that people are infinitely more resilient than CockRoaches (if not always for the best of reasons)… Accordingly, this era’s denouement is guaranteed to be fun [unfortunately, FortuneTellers have a strange sense of ‘fun’].

We’ll see. Must dash… MapleSyrup, anyone?…

#114 Beach Girl on 09.15.12 at 9:22 am

Well, made a lot of money this week doing nothing. TSX is on a run. I really can’t figure this out. Maybe it was my birthday last week that is causing it.

Anyway, on a lighter note, large party planned for Monday Night. Food and cooking all supplied by a new flame. He is going to cook at my home.

I have invited the young Bi-Polar Man. He is okay when he takes his meds, we all threatened to dump him if he goes off. Nice enough, just a lonely soul, very high intelligence. We will keep him. I joined Breaking Down Barriers with him. They took us to the Zoo? What? Seeing giraffes is nice but if you are a bit rattled, it doesn’t really cut it. He called the giraffe Ed and said your locked up too.

My tattoo guy, personally hate tattoos, boy can he score.

Nicole my sometimes dancer friend, she doesn’t want to score at all.

Our new friend a retired CAS worker, now he is screwed up. We laugh and call him “this is your new CAS”. We keep bugging him to bring home the Prince of Tribal Africa or the equivalent. He just tells us to F Off and smokes a joint. HAHA. Need to round the party out will more females.

Speaking of Obama, he only got the job because no one else wanted it. He is not the Great White Hope no pun intended.

Nice weekend everyone. the bank manager moved the appt to Wed. for the estate planning. Might just go blow a few bucks.

#115 dradak1 on 09.15.12 at 9:29 am

“… It used to be that teachers, doctors, lawyers or leaders were respected. Now it’s the guy with the biggest Lexus living in a house with gates. He could be a drug dealer or, worse, an options trader. Nobody cares. Stuff rules. …”

Bravo – Right On.

#116 maxx on 09.15.12 at 9:36 am

#101 Rob now in Nova Scotia on 09.15.12 at 5:54 am

“What most mainstream authors forget is that raising taxes slows down a nation’s economy.”

Excellent point!

#117 Beach Girl on 09.15.12 at 9:37 am

I couldn’t let this pass. My grown children’s father phoned on my birthday and informed me his new girlfriend is 11 years younger than me and much better in bed. I said of course she is, she’s a professional.

He is next to skid row, do the blue pills make you lose all the blood to the larger nonfunctional head?

#118 TorontoBull on 09.15.12 at 9:38 am

I went to see a mortgage broker with a friend last night…things are definitely tightening. The broker didn’t offer the most what my friend could afford, and said that there were a LOT of refusals due to OSFI. Interestingly TD still offers 30 years that the broker was pushing for…

#119 Form Man on 09.15.12 at 9:46 am

DA #183 yesterday

Of course . In Kelowna its different………

lets gather together some of the ‘facts’ about the Kelowna housing market according to DA:

1) most home sellers are not serious. they just list for fun

2) hordes of buyers are circling the city limits, unable to find their way into the city for some peculiar reason

3) one must be of a certain ‘tough’ disposition to successfully live here. As only the long time residents (and certain Albertans) have this quality, many new inhabitants are compelled to move away after only a short time

4) although the local real estate board compiles statistics in the same manner as in the rest of the country, these stats should be disregarded due to the ‘intricacies’ of the Kelowna market

a strange city indeed………

#120 penpal on 09.15.12 at 9:57 am

@ # 32 so it begins..

Could you please name the are of Toronto in which there were no sales reported and in what time frame (date and duration also please).

Thanks is advance.

#121 Smoking Man on 09.15.12 at 10:12 am

In evolution the strong, the smart survive and move on to make more copies of it self. It’s been that way since the very first cell split.

Violence braking out all over the world, Mozzies vs Westies Over a shitly made Vid

The world has a problem, it is running out of fresh water .Projections of population growth predict a major crisis in 25 years.

Humanity and population growth needs to be controlled.

The Mozzies have the highest pop growth, no nukes, and are behaving like rabid dogs.

Don’t they realize the machine(Skynet) has no mercy, hell it kills its own, 911 ring a bell.

The stairway to the virgins will be an elevator in the form of a mushroom cloud.

#122 Al on 09.15.12 at 10:29 am

Jim Sinclair is of the opinion that the Governments will sieze all retirement accounts to pay for the debts ; http://www.jsmineset.com/

#123 penpal on 09.15.12 at 10:43 am

@ #61 Devore

Are you telling us that in the “the birthplace of green awareness” in this country that untreated waste from the sanitary sewage system (not the runoff rainwater collected thru storm water management) is being pumped into Burrard Inlet and False Creek?

Might you have a link to info on this because I am astounded by this revelation.

Is it possible that the waste is semi-treated to promote rapid degradation and thereby is biologically “safe” although it may be odiferous in the extreme?

#124 torontorocks on 09.15.12 at 10:44 am

house on chestnut hills listed $1.49MM sold $1.48MM. where slowdown? how paid? who fricken knows anymore.

#125 walltiger on 09.15.12 at 10:45 am

#11 East Van.

the things you listed, although are developing, will not spread to catastrophe level in the next 50 years, and by then, we (you and me) will be probably dead.

#126 Grim Reaper/Crypt Speculator on 09.15.12 at 10:48 am

I like this Beach Girl, i think a perfect match for Smoking Man.

#127 syfon on 09.15.12 at 10:58 am

There is no inflation
Give your butler a day off once a month and do your own shopping.
Or tell that to a guy that buys gas

Gas goes up 10% and houses go down 10%. Overall, we’re closer to deflation. — Garth

#128 Doug in London on 09.15.12 at 10:59 am

Garth said: Following the GFC, companies did the opposite of consumers – they paid down debt, shed costs, embraced efficiency, became more competitive and found new markets.
That’s true, but keep in mind that while these gains were partly due to companies making intelligent choices, it’s also partly doe to BIG tax breaks government has given them in recent years.

@Bottoms up, post #9:
In the near future, oil prices may drop (although this recent trouble in the Middle East may keep prices up) deu to new supply and drop in demand due to a slower economy. Going further ahead, only time will tell if supply can keep up with increasing demand. Myself, I wouldn’t buy a big monster home 100 Km commute from my work place. You are right, however, that people will find a way to adapt if prices keep going up. The real elephant in the room, still ignored for the most part, is climate change and it could cause far more troubles than higher energy prices in years to come. The future could be very bright for nuclear and renewable energy.

What tax breaks? — Garth

#129 Canadian Watchdog on 09.15.12 at 11:06 am

#110 Al

Yes Tiny Tim Geithner will be borrowing pension funds in about a few weeks to fund the government’s operations. Canada isn’t there yet, but it will be one day.

Now you know why RRSPs were created.

#130 penpal on 09.15.12 at 11:09 am

@ # 105 Buy? Curious?

The storm may last longer and be more virulent than you expect.

Accordingly, your advice would to be alter your lifestyle a la “…rent out a room…” while your equity continues to shrink as prices continue their melt.

Great – lose your privacy as you get progressively poorer.

What a strategy!

Fail.

#131 Miko on 09.15.12 at 11:19 am

http://www.canadianbusiness.com/article/98306–canada-s-housing-crash-begins

EVERYBODY SHARE THIS ON YOUR FACEBOOK WALL! save you friends some pain by not making the mistake of buying in this market

#132 Canadian Watchdog on 09.15.12 at 11:28 am

“Gas goes up 10% and houses go down 10%. Overall, we’re closer to deflation. — Garth”

Garth do you even know that 70-80% of commodity prices is speculative trading? That’s equivalent to your food bill being wagered-up in a casino before you get it.

Even if fundamental demand declines, prices will keep rising. The system is out of control and regulators are doing nothing because if they did, GDP and revenue would decline.

The system is broken. Period.

#133 TNT on 09.15.12 at 11:44 am

re my post #74.
Correction- 9$ gas in the UK not US, yet.

#134 City Slicker on 09.15.12 at 12:24 pm

Garth it seems that the focus of QE3 will be to re-inflate the US housing market, do you think this will actually happen considering this bubble has recently burst and likely has too many holes in it to be revived again? Can 40 billion a month be enough for patch work?

US real estate apparently bounced off the bottom two months ago. — Garth

#135 penpal on 09.15.12 at 12:31 pm

regarding posting # 177 on yesterday’s (September 13, 2012) thread entitled “Scribbles”;

Smoking Man posted

“…HE wishes he was a movie star.” – in reference to myself.

Today he posts a picture at posting # 109 on this thread of Bruce Willis (who is a real movie star) as being his likeness.

Freudian slip?

Now who really wishes he was a movie star?

Btw… thanks for making it easy to identify you at Garth’s big evening – should be fun, old chum!

#136 TGS on 09.15.12 at 12:32 pm

Where does your optimism regarding future policy coordination come from, and what sort of policies do you expect this coordination to bring about?

Europe can’t even coordinate economic policy, let alone the whole world, which is required in the context of our global economy. The meetings after the economic crisis on reforming the IMF and other institutions resulted in nothing. China and Australia had a few interesting ideas for reform, but nothing really came out of it.

The economic crisis should have demonstrated to policy makers everywhere that the past 20-30 years of neoliberalism had been a spectacular failure; a failure that people in South America and South East Asia and various post-communist East European states figured out a decade ago with their respective economic crises. There seems to be no impetus from world leaders to replace the neoliberal dogma with anything else, and even if there were ideas, no means to actually coordinate on a global basis.

From a political perspective, we can expect things not to get incrementally better, but basically stay the same, with very low growth and a continued transfer of wealth from the working class to the rich. No matter how good the fundamentals of individual companies are, the political environment is a serious obstacle to developing any kind of optimistic outlook.

#137 penpal on 09.15.12 at 12:33 pm

@ # 119 Form Man

Too funny!

I still want to see a picture of the “hot wife”.

Probably about as “hot” as the Kelowna market!

C’mon DA, show what ya got!

#138 Realtors are in an all out panic on 09.15.12 at 12:44 pm

The market is doing so well that realtors have to come on this blog to tell us ? LOL the fact is the housing market has been crashing hard as sales continue to be weak and prices are coming down. Drive around the GTA and see a sea of for sales signs and nothing is really selling. It’s going to be a nasty crash realtors a nasty crash.

#139 Westernman on 09.15.12 at 12:53 pm

I see Beach Girl is at it again, keeping us all informed on the lurid details of her disgusting, freakish, degenerate lifestyle…
A pox on all of you who encouraged this thing to return…
This creature personifies what is wrong with this country – socially speaking…

#140 Don on 09.15.12 at 12:56 pm

http://www.theprovince.com/homes/Vancouver+housing+bubble+doesn+exist+real+estate+expert+says/7208209/story.html

B.C. Real Estate: ‘You can’t burst a bubble that wasn’t there’

Article: But there is no housing bubble, according to Tsur Somerville, director of the University of B.C.’s Centre for Urban Economics in the Sauder School of Business.

“You can’t burst a bubble that wasn’t there,” said Somerville. “But you can have prices above where they should be and it not be a ­bubble.

“A bubble isn’t just defined by high prices,” he said.

Somerville identified a housing “bubble” as conditions akin to what was happening in 2007.

“It didn’t matter what the condo looked like or what it’s going to look like or who was building it, people were lined up around the block and snapping it up,” he said. “They were saying, ‘I’ll take 12, please.’ That’s more of a bubble environment.”

While it might not be a bursting bubble, what is going on in the Vancouver area right now is not exactly normal, either.

Greater Vancouver home sales in August were the second lowest since 1998 and represented a drop of 30.7 per cent compared to August of last year, and were 21.4 per cent lower than in July of this year.

****************************
Manipulating the numbers…but forgot to take into account that young people will fire sale to get out from underneath the unmanageable debt burden…that and that the smart buyers have come to the realization to wait as they know it is only a matter of time before interests rates climb. I also wonder how this guy is teaching at a University. Did he also just take a 2 month course to become an expert and who funds his position – perhaps the real estate association. There are a multitude of factors that will make young people flood to the selling gates….One could be seeing their renting friends go on vacation after vacation with no looming financial burden.

#141 kreditanstalt on 09.15.12 at 1:02 pm

“Economies will slowly but relentlessly grow supported by a level of policy coordination previously unknown to the world.”

THAT statement gives you away. You actually believe that central planning works…as if the economy were a man-made construct that, with the adjustments and tinkering of “experts”, could be made to “work” as before…

I said ‘policy coordination’ not ‘central planning.’ Try to keep up. — Garth

#142 Davey Boy on 09.15.12 at 1:12 pm

#63 Victor

Thanks for posting, very interesting article.

#143 Suede on 09.15.12 at 1:13 pm

#11 East Van

You’ll have lots of fresh water in East Van. Just head up to the Capilano watershed and start drinking – you’ve got the most freshwater around you in the world! Bottle it and sell it!

More importantly, why did HeliBen pull the machine gun out and slaughter the bears?

Bernanke just solidified Obama getting re-elected with QEinfinity which means Bernanke keeps his job along with the other heads of the Feds around the US. He’s not dumb, he has a mortgage to pay and a pension plan to keep vesting!

Romney was going to can him and put in his own Fed chief.

http://blogs.wsj.com/washwire/2012/08/23/romney-reiterates-he-would-replace-bernanke/

#144 truth hammer on 09.15.12 at 1:18 pm

And helicopter ben did not invent the inflation, he is re-inventing it.

Garth, it seems you are wrong on inflation and golds/silver….

What inflation? — Garth

Well…someone spends way too much time talking to people who haven’t a clue….what inflation indeed. Gas prices and food costs raging….bills of all sort being ratcheted up…….this years home heating costs have near doubled this year over last for sure on the latest read of nat gas price futures. Unions of every drooling ilk on strike…gnashing their greedy teeth for more taxpayer flesh….creeping socialism amongst the growing class of have nots across the land …..no inflation expectations at all.

Clue in guys….it’s M Carneys job to lie and mislead….it’s called moral suasion….it’s not a secret…it’s actually written into the handbook.

Don’t expect taxes to go down any time soon…in fact expect the opposite as proincial budgets continue to expand. As real property deflation takes place we will see a further expansion in credit debt….it’s the wealth effect in denial.

In the near term prices will rise further to cover lost margins of reduced consumption….it’s a death spiral for the working guy.

A few extra smart pirates have got this figured out and are making out like teenagers on third date in the markets. It’s time to take the bull by the horns and leverage the fading equity in your house and place it on cyclical stocks ETF’s……………..either that or have it all taken away by people who say………..”Theres no inflation’.

If you think that way then you must be really confused as to why the market in base metals has begun to surge…….we ain’t seen nothing yet.

As I have pointed out many times ..the effect of additional money supply is inflationary….believe or not…and deny it to your peril……..otherwise …enjoy the geriatric doggy treats.

#145 Suede on 09.15.12 at 1:20 pm

#50 CDN Watchdog

I’ve heard a lot about the “purchasing power” of various currencies diminishing. Correct me if i’m wrong, but does that really matter? Shouldn’t the purchasing power be a function of income vs prices? Sure bread was 5 cents back in the day, but how did incomes relate to bread back then. Are they similar in ratio to now? higher, lower, etc.? i’m too lazy to research

Avg income to house price is the best number i can relate to as i can ask older family and friends and the ratio is definitely multiples higher today than it was 20-35 years ago.

#146 Grantmi on 09.15.12 at 1:21 pm

Here’s another HACK for the BC Real Estate market!!!

Cameron Muir!!!!!

The B.C. Real Estate Association is more optimistic. Chief economist Cameron Muir is predicting increased sales in 2013 because of continuing low interest rates, population growth and more full-time jobs.

Employment growth in the ­Greater Vancouver area in the first ­seven months of the year, according to Muir, has been 3.5 to 4 per cent ­higher than the same period last year.

“I would expect to see sales pick up before the end of the year, at least on a seasonally adjusted basis,” Muir said.

Adding to his optimism is increased consumer demand for housing in the Okanagan and in B.C.’s North, where resource extraction continues but where there has also been more economic diversification.

ADDING TO HIS OPTIMISM is the INCREASED consumer demand in the OKANAGAN!!!!

Is he on CRACK!!!

And the Province and the MSM continue to go back to these two HACKS each and every time there is a story needed to PUMP the RE market!!!!!

Garth! When was the last time the Province, or the Sun, or the G&M and NP called you DIRECTLY for a comment about the market! (Not pulling something off your blog and saying you’re Mr. Doom and Gloom of the RE market!)

#147 penpal on 09.15.12 at 1:24 pm

@ # 132 Canadian Watchdog

“The system is broken. Period.”

It certainly seems that way.

#148 Blacksheep on 09.15.12 at 1:25 pm

Daystar #107,

“was mulling over in my mind yesterday”
—————————————————
Yes, of coarse…mulling it over.

The EU was a failed execution before it began. The loss of control and accountability of sovereign currencies by default led to irresponsible financial practices. You suggest that Spain and Italy, being backstopped by the ECB is a positive, when we know the piigs could not have racked their debt to these levels without the financial shading of the EU umbrella, allowing them to hide under others, coattails.

Globally struggling economies, would not benefit from any form of union. The EU confirms this is a non starter. To suggest otherwise is disingenuous.
Sovereigns do not need to relinquish control, they need to become accountable to the citizens.

But of course, there is other reasons for the promotion of these ideals.

take care
Blacksheep

#149 bill on 09.15.12 at 1:47 pm

I see Westernman is at it again, keeping us all informed on the lurid details of his/her/its disgusting, freakish, degenerate lifestyle…
A pox on all of you who encouraged this thing to return…
This creature personifies what is wrong with this country – socially speaking…

#150 Hoof - Hearted on 09.15.12 at 2:01 pm

I think what Garth is saying is his Bunker is near completion..at an undisclosed location(….the 10 ft thick concrete walls and all….) he has enough supplies to last 10 years….can live off grid,(solar power, recycled urine to wash Hummer..etc and watch taped re-runs of House Horny type TV shows. and scream “The Horror the Horror”…

aka the rest of us are SOL

(Moi ?..I bribed one of his Amazon guards…ahahahaha )

#151 IM in C on 09.15.12 at 2:14 pm

They are advertising on facebook
http://takemetotrump.ca/?utm_campaign=tent_fb_lifestyle_college_takeme2

#152 leo on 09.15.12 at 2:25 pm

“There will not be another 2008, at least not for a generation or more. No depression, no financial collapse, bank failures or hyperinflation. Paper money will grow more valuable, not less, as it buys more real estate, car or computing power. Stock markets will be as volatile and changeable as ever, and will neither soar nor crash. Just creep jaggedly higher on the back of earnings.”

Some experts say 2008 is a harbinger of things to come. Anybody want to dispute that another 2008 will occur earlier than in the next generation.

What ‘experts’? — Garth

#153 Form Man on 09.15.12 at 2:29 pm

#149 Bill

agree

#137 penpal

DA is actually a comedian. The real estate gig is a cover…….

#154 Canadian Watchdog on 09.15.12 at 2:34 pm

#140 Don

“Did he also just take a 2 month course to become an expert and who funds his position – perhaps the real estate association.”

Apparently so. http://cuer.sauder.ubc.ca/sponsers.html

#136 TGS

“Where does your optimism regarding future policy coordination come from, and what sort of policies do you expect this coordination to bring about?”

There is no coordination amongst political leaders—only self-interest and a reactionary “spend more” response when a crisis hits. Flaherty has already hinted at a new stimulus that will pump shovel ready jobs to boost the economy. Meanwhile, in my area they are replacing perfectly fine roadside curbs that were replaced two years ago.

There is no efficiency, regulation or integrity left, only ‘control fraud’, and that includes OSFI who’s been watching porn like the SEC.

#134 City Slicker

U.S. real estate has modestly bounced but is heading into its second wave down. The Case-Shiller Index has a three month lag that will, in the near future, post y/y declines again. The recent rise in prices was stabilized by institutional and foreign funds buying bulk homes in regions hit hard. As Garth says, they can afford to be wrong, the average joe can’t.

#145 Suede

Here’s a quick one.

Leader-Post – Dec 20, 1974 Ottawa Widens Housing Aid
Now use The Bank of Canada’s inflation calculator to measure prices then in today’s dollars.

“For example a buyer with one child and a $15,800 annual income wanting to purchase a $35,000 new home in Ottawa with an 11.5% private mortgage could obtain the maximum $50/per month mortgage payment subsidy. This would reduce his payment from $386 a mont to $318.”

$15,800 income in 1974 is $72,992 in today’s dollars. A $35,000 mortgage is $161,692.

Q: How bad could it have been with a price-to-income ratio of 4.6, that the government had to subsides a worker who earned 73k to buy a 161k home. What does that tell you about how far we’ve come?

#147 penpal

Oh it’s broken alright. For good.

#155 Suede on 09.15.12 at 2:45 pm

#146 Grantmi

Of course he can predict sales increasing in 2013. His chances of being right are better than not, especially when this year may turn out to be the worst since 1998. He’s taking the contrarian bet now.

May not happen though.

#156 };-) aka D.A. on 09.15.12 at 2:46 pm

Quickly as I head out the door;

#119Form Man on 09.15.12 at 9:46 am
DA #183 yesterday

Of course . In Kelowna its different………

lets gather together some of the ‘facts’ about the Kelowna housing market according to DA:

1) most home sellers are not serious. they just list for fun

I did not say that. I said (paraphrased) at least half are not so seriously motivated and are hoping to find a buyer willing to pay the peak prices of 2007/08 which will not materialize for them.

2) hordes of buyers are circling the city limits, unable to find their way into the city for some peculiar reason

I did not say that. I said (paraphrased) there is today as there was during the peak of the market and will be always a “core” group of motivated buyers and sellers who can be depended upon to buy and sell.

3) one must be of a certain ‘tough’ disposition to successfully live here. As only the long time residents (and certain Albertans) have this quality, many new inhabitants are compelled to move away after only a short time

I did not say that. I said (paraphrased) many move here for the lifestyle not realizing how competitive an environment it is and are not prepared to “work” as hard as is required to compete with the others to live the lifestyle they came here hoping to enjoy, consequently they move back to where they came from.

But yes… the Darwinian theory of “survival of the fittest” is well demonstrated here.

4) although the local real estate board compiles statistics in the same manner as in the rest of the country, these stats should be disregarded due to the ‘intricacies’ of the Kelowna market.

As a layperson I can appreciate how you might not be able to grasp the “intricacies” of the market. Just as you, a general contractor/developer (if indeed you are as you portray yourself which sometimes I doubt), have (ought to anyway) a better insight to the whole construction industry than the subtrades let alone the general public. Been there done that.

Every neighbourhood is unique Form Man. The target market for a Rutland property is quite different than it is a Mission property. Someone asks me “how’s the market” my response is always “Well that depends, are you buying, selling or renting? What and where?” The answer can be very different. Kelowna South has seen nary a price drop, Kettle Valley… no so lucky.

a strange city indeed………

From many a perspective, yes indeed Kelowna is a “strange city” as certainly it has it’s unique attributes – not all of which are as positive might seem at first appearance. You know this better than most as I have read your lamenting comments ranging from comment on the competitive nature of the city that you find yourself compelled to ply your trade elsewhere to the real estate board’s publised statistics not aligning with your own (mis)understanding. Peel away the outer layers and a lot of inner complexity is divulged. Each market has it’s own unique character and Kelowna is no different nor are the individual unique neighbourhoods of this city when compared one against the other.

Penpal;

You are exceeding even my lowest lows on this blog. I did it intentionally to aggravate and stimulated debate. You do it simply because you are just that immature.

#157 salonist on 09.15.12 at 2:55 pm

united states of america 30 year mortgage

“PenFed Lowers Mortgage Rates Again! 5/5 2.75%, 30 Yr 3.375% (Limited Time Offer)Today I received an email from PenFed (Pentagon Federal Credit Union) touting new lower mortgage rates: “Limited-Time Offer — PenFed Lowers Mortgage Rates AGAIN!”

The 5/5 adjustable rate mortgage is now just 2.75%, with no origination fees and PenFed paying closing costs up to $10K. (There’s also the 5 year HEL with a 1.99% rate; the HEL rate is not new.)
https://www.penfed.org/55-Adjusta…-Mortgage/
https://www.penfed.org/Home-Equit…-Overview/

The 30-year fixed rate mortgage is now just 3.375%, with no origination fees (per fine print on the application page).
https://www.penfed.org/30-Year-Fixed-Mortgage/

PenFed used to charge a 1% origination fee on all fixed rate mortgages, but right now the 30-year fixed rate mortgage seems to be exempt!

There are many ways to join PenFed; for example, you can make a donation to the National Military Family Association. The PenFed website has further details: https://www.penfed.org/

#158 Herb on 09.15.12 at 3:15 pm

Canadian Watchdog,

thanks for feeding us raw meat almost every day. Your info is priceless.

#159 Westernman on 09.15.12 at 3:17 pm

Bill @ # 149,
Clever Bill, very original…
You forgot the na na na na na part…

#160 Derek R on 09.15.12 at 3:20 pm

#149 bill on 09.15.12 at 1:47 pm wrote:
I see Westernman is at it again…

Maybe, bill. But I think that that post more likely to be Talibanman pretending to be Westernman. Beach Girl has a western lifestyle of the kind that Muslim fundamentalists hate with a passion.

#161 Ayn Rand Army on 09.15.12 at 3:35 pm

#95 groovin_123 on 09.15.12 at 4:01 am

” Paper money will grow more valuable, not less, ”

That’s the most ridiculous prediction I’ve read on any financial blog this year.

Perhaps you should refresh yourself with some currency charts.

I wish I could print more currency and it becomes more and more valuable, like perpetual motion machine.
—–
I was surprised to see the CAD/USD DROP yesterday. There is only one plausible explanation for it, Mark Carney was buying USD and selling the CAD by the truck load to help prop up the USD the day after QE3.

NO fiat currency is getting more valuable. How anybody could think that is beyond me. Garth ?? Where is your logic?

When US dollars buy 32% more house in 2102 than in 2006, they are more valuable. Open your eyes. — Garth

#162 Old Man on 09.15.12 at 3:46 pm

The weather witch told me that she will be sitting up front for Garth’s seminar dressed in black wearing diamonds and gold. She has a message for all the amazon women – back off bitxxes, as he is all mine!

#163 Ayn Rand Army on 09.15.12 at 3:56 pm

#111 Ralph Cramdown on 09.15.12 at 8:45 am

If they’re divesting themselves of debt and cutting costs by not hiring people, then how can anyone complain that they’re “hoarding” cash? It’s a simple function of being debt-free and keeping the wallet closed. Any non-corporate entity can follow the same steps, but the great majority choose not to!

Get your head out of Atlas Shrugged and go read some real economics! Your expenditures are somebody else’s income. So if we all cut back at the same time, aggregate income goes down dramatically, as in depression. Just google the “paradox of thrift” and be enlightened.
—-
Haha, you’re the one that’s wrong. There’s no paradox of thrift. It’s an error in thinking and a misunderstanding of economics by people like you. Savings, money not spend on consumption, is capital formation needed to build higher orders of production (factories, machines, equipment)

And get a clue… Atlas Shrugged ROCKS dude!

#164 Van Isle Renter on 09.15.12 at 3:56 pm

Sorry Garth. I beg to disagree. What you’re really saying is that it is different this time…. it is possible to solve a debt problem by borrowing even more $$$.

I don’t buy it. Eventually everyone runs out of the ability to keep borrowing. Just ask the Russians. It took them 70 years to piss away everything that the czars amassed over the previous thousand years.

Broke is broke, and Europe is broke. And broken.

And creating more $$$ out of thin air only makes the problem worse when the reckoning comes.

#165 neo on 09.15.12 at 4:11 pm

Garth,

All the Fed can provide is liquidity. Either remove it or increase it to the system.

This is a NOT a liquidity problem. Banks are flush with liquidity. Corporations are flush with liquidity. Even the U.S. government is flush with liquidity. The consumer has gorged on liquidity and threw up. They don’t need to borrow more money. They in fact still need to do the opposite and continue to deleverage. What they need to EARN more money through wage growth and savings and have a job. The Feds efforts do NOTHING to address that nor can they. What the Fed will do is take those stagnant wages they do currently have and cause price inflation so they can afford less.

#166 Canadian Watchdog on 09.15.12 at 4:14 pm

Jim Flaherty ready to act, if needed

“There is an agreement between the Bank of Canada and me as finance minister, about what we could do if we both agreed. There are a couple of steps we can take in order to affect the market and the dollar. But the reality is, whatever we did would have a short-term, moderate influence. These are temporary measures. They don’t in the long term affect the value of a nation’s currency, which to a large extent depends on the fundamentals of that nation’s economy. Our fundamentals are relatively strong.”

————

A History of the Canadian Dollar.

The Devaluation of 1949.

“Following a major realignment of the pound sterling and most other major European currencies vis-a-vis the US dollar, the Canadian dollar was devalued by approximately 9.1% against its US counterpart September 20th, 1949”

————–

Firstly, if there is a devaluation in the cards, they will never say it. Secondly, the Canadian dollar would have to be devalued even more this time, considering the amount of reserves to money supply. Thirdly, they won’t called it a devaluation, they call it FX intervention, as scene here.

This is why I constantly remind people that their prospective on finance is an indoctrinated condition to measure their assets in a centralized position. It seems confusing to most, so I’ll analogize it this way: People look at the sun rise and go down every day. This is the way people are conditioned to view and think of it because it was named for what it appeared to be; a sun rising or a sun falling.

But the reality is, the sun does not rise and fall upon the earth, nor does it rotate around, in fact, it is the earth that rotates around the sun, giving the prospective that the sun moves around the earth.

Currencies work in the same manner. That is why when you see gold prices shooting up, it is not actually going up, rather the USD going down. Most are trained to think of it this way which distorts their way of measuring assets.

I’ll spare the lecture, but my best advice to many is to unlearn what you learned. These are confusing times, so you’ll need to change your prospective and the way you think and measure your wealth.

#167 Smoking Man on 09.15.12 at 4:14 pm

#135 penpal on 09.15.12 at 12:31 pm

Looking forward to it

#168 bill on 09.15.12 at 4:15 pm

oh dear a rebuke from westernman….oh the shame!
care to comment on Derek R’s comment westernman?
had the ring of truth to it.
you know stuck in the mud of yesteryear ,sore losers ,etc ?

#169 bill on 09.15.12 at 4:21 pm

westernman: its a little b on bill
big b on Bill is a fellow blogdog…got it? I have my doubts.

#170 neo on 09.15.12 at 4:24 pm

“Central bankers, have become the guardians. Their concerted, coordinated and blunt actions have ensured no systemic failures will occur, no financial institutions keel over and no equilibrium is lost. Europe is contained. America is struggling back. China will be tempered. Liquidity will be injected repeatedly, as we saw this week, until stability rules. What most of your doomer authors forget is that sovereign debt is unlike consumer or corporate debt. No homeowner or CEO has the power to tax.” – Garth

Let me ask you something Garth. Does the sovereign nations of southern Europe have the power to tax and more importantly the ABILITY TO COLLECT TAXES? Who cares if you have the power to tax if you have created a culture in countries like Greece, Italy and Spain where noboby pays them.

Now take it a step further. Can repeated injections from central banks solve Greece’s insolvency? NO. How about Italy’s lack of tax revenues and bloated spending? Dido for Italy? No and No as well.

You are using semanntics arguing with some that…

I said ‘policy coordination’ not ‘central planning.’ Try to keep up. – Garth

You need central planning to “ensure” any result. That is what we have in China to achieve 11% GDP growth for a decade. That would never ever happen in a free market situation. Aside from the fact that central planning causes inbalances that inevitably boomerang once any seblance of a free market returns. This charade can go on and has gone on for a long time. However, your faith in Central Banks to be able to “fix” everything when they are the ones that contributed to getting us to this point is puzzling.

#171 neo on 09.15.12 at 4:25 pm

When US dollars buy 32% more house in 2102 than in 2006, they are more valuable. Open your eyes. — Garth

That I can agree with (-;

#172 John on 09.15.12 at 4:27 pm

NO fiat currency is getting more valuable. How anybody could think that is beyond me. Garth ?? Where is your logic?

When US dollars buy 32% more house in 2102 than in 2006, they are more valuable. Open your eyes. — Garth
———–

No, US dollars do not buy 32% more house in 2012 than 2006. They stopped being “dollars” a long time ago. The only reason the “32%” headfake can be touted is because massive amounts of stimulous has and is being dumped into the system.

Without that dollar-destroying stimulous, your statistic couldn’t exist, and therefore cannot exist…unless you want to present a momentary hyper reality of “carnival investment world and economy”. Hardly relevant. The racetrack is more solid. It could hold together I suppose…but only at the point of a gun or massive public stupor. It just might go forward for a while. You’re not mentioning the context? You’re contrarian? I don’t think so.

So let’s see here: The “power” of the dollar is more in 2012 because of the stimulous that is destroying it, and the artificial house price is something you even care to measure between 2006 to 2012.

As more of your opinion on economy and “investing” continues to unfold, it’s like a series of brain teasers. A guy can learn a ton by thinking them all through ( I have).

At the end of each brain teaser, your assertion comes up empty. Over and over again. I’d challenge anyone to give it a try. You are afterall making your assertions very public, so it’s fair game.

Get out of debt. Check.
Stay liquid. Check.
Diversify. Check
Pardner on up with the ponzi. Huh? No check.
Stick your head in the sand. Whaaa? No check.

I think you’ve come full circle. Street smarts, wit, humour and a knack for social saavy can’t carry the ball across the line in this thing. It’s all pretty much new territory now.

#173 Old Man on 09.15.12 at 4:35 pm

I see those with GIC’s; Bonds; and a variety of investment vehicles that are away out of proportion for a balanced portfolio because all interest is fully taxable, so what is the net yield return after taxes at the top rate? Garth talks about preferred shares which can be bought with blue chip corporations with a fixed rate, but qualify for the dividend tax credit that is a hard credit against taxes payable.

There are many variations of a preferred share, so do your homework, but 5% is a good target, and what is your yield? It will depend on your tax rate, but will be a hell of a lot higher than paying full taxation on interest earned with the other stuff. Those in Toronto must go to his seminar in October.

#174 daystar on 09.15.12 at 5:00 pm

#148 Blacksheep on 09.15.12 at 1:25 pm Daystar #107,

Lol, thats right, mulling it over. Thinking out loud as I’ve done so many times before :)

“The EU was a failed execution before it began. The loss of control and accountability of sovereign currencies by default led to irresponsible financial practices. You suggest that Spain and Italy, being backstopped by the ECB is a positive, when we know the piigs could not have racked their debt to these levels without the financial shading of the EU umbrella, allowing them to hide under others, coattails.” – Black Sheep

I think what you are forgetting with all the lies and shading and coattails etc. is that the only government that seriously lied to the EU was Greece but lets not kid ourselves. The elected government of Greece also lied to its own people. Those books were cooked for everyone. Italy’s former prez on the other hand:

http://en.wikipedia.org/wiki/Silvio_Berlusconi

…oozed corruption but the world hasn’t heard anything about cooked books coming out of Italy and I now doubt that we will (Mario Monti has been in there for almost a year now) so lets look at this historically for a sec? Italy had a high debt to GDP ratio when it joined the Euro in 99′ (as well as Greece). What were they at, high 90’s? Italy and Greece had debt issues before they joined and its coming to a head now but the Greece government in particular was wreckless with spending and lied not just to EU but their own people and looking back, its not hard to see the end result. Greece was, quite simply, made an example of. They have my sympathies, they have lost more than anyone but at the end of the day, the people of Greece voted for a horribly corrupt and inept government and inevidably brought all this on themselves. It just took time.

As far as the ECU goes, I highly doubt that the ECU is failed, it certainly wasn’t over before it began and I believe history will prove it. Its not hard to find positives with the Euro when you look for it. It is the worlds second largest reserve currency and the second most traded which should speak for itself:

http://en.wikipedia.org/wiki/Euro

Does the world need the Euro? Look a the health of the Yen and the U.S. dollar and ask yourself that question. Sure, the world needs the Euro around. In my opinon, its the healthiest currency of the three at present (Mind you, 2 weeks ago I would have had a different outlook than today and I base this on Euro nations overall averaging somewhere around 90% debt to GDP as opposed to Japan being 200+% and the U.S. at 130% maybe, haven’t looked at them in a while) and offers expanded trade advantages especially in Africa for Europe that will boost large rewards for them over the long term.

“Globally struggling economies, would not benefit from any form of union. The EU confirms this is a non starter. To suggest otherwise is disingenuous.
Sovereigns do not need to relinquish control, they need to become accountable to the citizens.” – Black Sheep

Lol, here’s some advice from one of the most heavily opinionated persons I know (me). Don’t get married to your opinons. We get attached to our creations, they give us self esteem and such but our creations are for the most part flawed. So, y’know, be flexible. I feel compelled to say that when someone tells me that if I am to suggest something they don’t agree with, I’m “disengenious”.

I’ll get this out of the way right now, I’m not a supporter of the NAU but I do hope the EU keeps it together. I’ve already touched on this. Italy, Portugal, Spain, these nations wouldn’t be setting the world on fire outside of the Euro all this time. Berlusconi to me, was and is mafia. Both Spain and Portugal elected governments that gave them property bubbles that would make Canadians blush. Their #1 economic drivers in their bubblish heyday? Construction. We’ve covered why it doesn’t end well for them with our own bubble talk but what was missing for the most part with Spain and Italy in the EU? Inflation. Here, Spain and Portugal especially are 2 nations that had tremendous access to credit and healthy public balance sheets when they joined the Euro so what did they do? Grow an obscenely bloated RE/credit bubble. Is it the rest of Europes fault that Spain and Portugal elected governments who, in their steward wisdom decided a RE bubble was best, that we can let manufacturing slide because houses are more important?

I remember reading something about Spain in 02′ and 03′ being hailed for economically fiscal genious because their government had managed to use revenues off of RE to pay off healthy chunks of public debt. Of course, hindsight now suggests these same heros were running Spain and Portugal into the ground with RE/credit bubbles that would later go bust. So my point to you is, where are these nations better off?

You’ve got Italy that elects from what I can tell a corrupt leader (over and over, helps when you are a media tycoon and can propaganda the masses) and Spaniards and Portugese who elect shitty governments, what do you think happens next for these nations regardless of whether they are in a union or not? The only reason I can think of that wasn’t good for Spain and Portugal to be in the EU is that these nations now had access to way more credit further fueling their bubbles but geez, access to credit is such a bad thing right? Sovereigns don’t need to relinquish control, but they do need self control and sure, they need to be accountable to their citizens but citizens need to be accountable to their own choices as well. People simply cannot elect terrible governments and not expect it to blow up in their faces. History is merciless with examples.

Is the Euro the best thing for the most indebted nations? The argument rests on how well developed the nation’s productivity and trade capacity is, as well as how talented a government is to be able to capitalize on currency devaluations boosting manufacturing and exports and having joined the Euro, Italy, Spain, Portugal and Ireland haven’t been able to experience a falling currency as debt piles higher along with yields but the rising costs of imports that deflating currencies spawn offsets in some respects so it really depends on how developed the export capacity of the nation in question truly is and whether or not the right people are in power or in place to capitalize on a more competitive export currency. Certainly inflation would be much worse in the PIGGS (save Greece, its true misery for them) than it is at present and that counts far more than some of us can imagine.

#175 Smoking Man on 09.15.12 at 5:11 pm

Listen very carfully.

In Feb of 2009 on The globe and mail, I told everyone to Buy stocks, house, and anything that moved. x globe dogs you know. I new it was a sure thing.

We are at that point again. A sure thing. Gold, Silver, Real Estate.

Max out your lines of credit and go full margin, in trading accounts. Don’t hesitate don’t think. bulls to the floor.

I will welcome you to 1% club with open arms.

#176 Suede on 09.15.12 at 5:14 pm

CDN watchdog, you’re a beast!

How you dig up this info is uncanny.

#177 Form Man on 09.15.12 at 5:32 pm

#156 DA

thank you for confirming my statements. there is hope for you yet DA.

#178 Westernman on 09.15.12 at 5:48 pm

Bill @ # 169,
Grammer cop, huh? I didn’t think the Canada led the world in anything but I guess I was wrong…looks like we are way in the lead in the two-bit, petty peckerwood category…
How the world must fear and respect us…

#179 jess on 09.15.12 at 5:50 pm

The cost of bailing out the U.S. thrift industry totaled $152.9 billion, according to an FDIC analysis — $123.8 billion paid by taxpayers, $29.1 billion by banks and solvent thrifts.
==============================
In his memoir, Seidman offered a set of lessons learned. They included, “Instruct regulators to look for the newest fad in the industry and examine it with great care. The next mistake will be a new way to make a loan that will not be repaid.” (wiki)
==============================
…when the “professionals” become LIARS and the clients desperate…

tax-shelter-fraud case against Chicago lawyers and accountants
http://www.chicagotribune.com/business/ct-biz-0914-chicago-law-20120914,0,1683159.column
“This is the latest step in the federal government’s investigations of numerous national accounting, law and financial services firms, which began almost ten years ago,”

BDO said that its partners and employees helped wealthy taxpayers participate in fraudulent tax shelter transactions, including two that were named Short Option Strategy and Short Sale.

The case is U.S. v. Daugerdas, 09-cr-581, U.S. District Court, Southern District of New York (Manhattan

china accounting blog
Dr. Gillis is a member of the PCAOB’s- Public Company Accounting Oversight Board
– Standing Advisory Group

background chinese accounting development
The perfect storm: Big challenges face the Big Four in China
by: Paul Gillis, November 14, 2010

Buyer Beware of Variable Interest Entity Structures
What investors in Chinese ADRs should know
http://news.morningstar.com/articlenet/article.aspx?id=567604

=====================
ciccone Group
http://www.sunnewsnetwork.ca/sunnews/politics/archives/2012/08/20120824-200115.html

#180 Toronto Buddy on 09.15.12 at 5:59 pm

Inflation rate is no longer reliable as measure of cost of living. After many changes in its calculation, it has became a meaningless number. Anyway, current inflation rate is most likely well beyond of what is reported. For example, food in Toronto increased 7% from 2006 to 2007 http://www.toronto.ca/health/pdf/boh_foodbasket_2007.pdf
However reported inflation for 2007 was 2.19% http://www.bankofcanada.ca/rates/related/inflation-calculator/

Likewise, tuition fees, meds, TTC metropases, gas, public services, passport, hydro, real estate and so on are always growing above official inflation.

That said, I would argue that those guys who got a 40 years mortgage will end up paying less as a result of real inflation decimating their debt. Taking a conservative 4% “real inflation rate”, in only 20 years, their debt will be worth half at current values.

I wonder, how this “real inflation factor” plays out in deciding whether to buy a house. At current interest rates of 3%, are we actually facing negative real rates?

#181 truth hammer on 09.15.12 at 6:02 pm

Taken at face value and annualized…..better sit down inflation deniers…the facts is not pleasent. Taken fron George Ure’s ‘Urban Survival’…..a guy who’s proven himself time and time again…….and certainly with far more honesty and integrity than our sacred M Carnutsky.

“Friday Setember 14, 2012

7.44% Annualized: Inflation Shows Up

You can’t just print money hand over fist (more on that in a sec) and expect prices will sit on their ass and not go anywhere. So, here’s a good bit of evidence that argues for a hyperinflationary blow-off now just beginning to coil up to strike:

“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent in August on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.7 percent before seasonal adjustment. The seasonally adjusted increase in the all items index was the largest since June 2009. About 80 percent of the increase was accounted for by the gasoline index, which rose 9.0 percent and was the major factor in the energy index rising sharply in August after declining in each of the four previous months.

The food index increased 0.2 percent in August, with major grocery store food group indexes mixed. The index for all items less food and energy rose 0.1 percent for the second month in a row. The indexes for shelter, medical care, personal care, new vehicles, and recreation all rose in August. These increases more than offset declines in the indexes for used cars and trucks, apparel, household furnishings and operations, and airline fares.

The 12-month change in the index for all items was 1.7 percent in August, an increase from the July figure of 1.4 percent. The index for all items less food and energy rose 1.9 percent for the 12 months ending August, a slight decline from the 2.1 percent figure in July and its smallest increase since July 2011.”

Although this is certainly constructive for gold and stocks (inflation proxies) there has been a pullback from earlier post Fed printing euphoria of yesterday. Still, up, up, and away. Or, hyperinflation, he we come…

If gasoline prices going up at this rate (they won’t we hope!) that’d be a 281% annualized rate.

#182 truth hammer on 09.15.12 at 6:17 pm

The greed of these unionized Harper Haters is unfathomable.

Is the trough swilling mindset of the Liberal voting unions so debased and immoral that they will actually stoop to screwing their own children……apparently so. Double dipping teachers and a CAW recommendation that young people get screwed so that the socialists in power get to gorge on the largesse of legacy contracts all while children starve and see their hopes and dreams laid to waste under the communist hammer of Canadian unions.

http://www.thestar.com/opinion/letters/article/1235548—double-dipping-hurts-young-teachers

http://www.theglobeandmail.com/globe-investor/caw-hopeful-one-of-detroit-three-will-accept-new-hires-proposal/article4547803/?cmpid=rss1

These are the same people who pretend to care when they’re striking for higher wages and perks…but in practice they are nothing but jackals. Oh yes you hear them say all the right words through the media whores when they march with their little flags and wave their banners…but in practice…what do we see.

Screwing the young……despicable !! Shame…forever shame on these hypocrites.

#183 jess on 09.15.12 at 7:15 pm

…”Reputation risk” doesn’t get in the way of audit firms helping criminal banks do illegal things. “Reputation risk” is now an oxymoron. Bankers and their enablers, the audit firms, have no risk to their reputation from anyone that matters. They are both repeatedly the subject of settlements, consent decrees, non-prosecution agreements, cease and desist orders and the rest of the regulator arsenal. They keep profiting and repeating their crimes with impunity.”

http://retheauditors.com/2012/07/09/what-the-sec-and-pcaob-fail-to-acknowledge-about-chinese-fraud/

#184 Mr Buyer on 09.15.12 at 7:15 pm

#175 Smoking Man on 09.15.12 at 5:11 pm
Listen very carfully.

In Feb of 2009 on The globe and mail, I told everyone to Buy stocks, house, and anything that moved. x globe dogs you know. I new it was a sure thing.

We are at that point again. A sure thing. Gold, Silver, Real Estate.

Max out your lines of credit and go full margin, in trading accounts. Don’t hesitate don’t think. bulls to the floor.

I will welcome you to 1% club with open arms.
…………………………………………………………….
Good luck with the RE aspect of that little gem

#185 TurnerNation on 09.15.12 at 7:25 pm

#40LH on 09.14.12 at 10:44 pm

Do you know anybody that can afford a SFH in C01/02? At today’s prices?

#186 TurnerNation on 09.15.12 at 7:32 pm

#50Canadian Watchdog on 09.14.12 at 11:19 pm

Y’know, Loblaws stores are exhorting people to give $2 on their final bill to their childrens charity at this time.
On a $50 grocery bill this amounts to 4% “tax”; 2% on a hun.
If they care so greatly why not take/cut some of their common and preferred shares dividends to give to their blessed cause.
Why is the multi billionaire Weston family asking US to give our money to their pet projects?

We’re suffering through double digit, unrestrained commodity and food price hikes.

And don’t get me started on the record-profit bank with it’s “run for the cure” charity shakedown….

#187 TurnerNation on 09.15.12 at 7:34 pm

And why is McDonalds begging for local Ronald McDonald house charities from us? We are being scammed. They don’t need our money:

“CHICAGO (MarketWatch) — McDonald’s Corp. reported a 23% increase in fourth-quarter profit, helped by the weak dollar and higher demand from the U.S. and France to Russia and Australia.

Net income rose to $1.22 billion, or $1.11 a share, from $985.3 million, or 87 cents, in the year-earlier period. Revenue rose 7% to $5.97 billion from $5.57 billion, McDonald’s (US:MCD) said Friday.”

#188 Blacksheep on 09.15.12 at 7:47 pm

Daystar #174,

In my opinion, The EU will fail as structured not due to a shared currency,but a lack of unified policy and taxation. Sure, Greece lied to get in, but after that it was a free-for-all. No real repercussions for poor behaviour. Think the German people want to pay for foreign debt? Accountably is missing due to corrupt governments, world wide.

Thanks for the response.

take care
Blacksheep

#189 jess on 09.15.12 at 8:07 pm

A Portrait of a “Subverter”
Posted on September 14, 2012 by Yaxue Cao

First published by Human Rights in China in New York as a part of its press release, which also includes a translation of Chen Pingfu’s Indictment.

http://seeingredinchina.com/

#190 Willy H on 09.15.12 at 8:09 pm

“I have also read other authors who tell a dismal story of the end of cheap oil and all that that entails. All of the authors are educated, knowledgeable and articulate. They all generally predict a sharp economic contraction in the near future resulting from oil shortages which could become a catalyst for a breakdown in societal norms. My wife tells me I read too much.”
__ __ __ __ __ __ __ __

No, you don’t read too much, you are simply refusing to bury your head in the sand like most governments and corporate elites. The world economy is about to experience something truly unprecedented. In fact, it’s already started. Petrol at $1.50 a litre in parts of Canada while the North American economy sputters along. Our continued addiction to artificially low interest rates. Investing in equities for mid to long-term growth is like walking a minefield. Our central bankers, bank economists, finance ministers or corporate elites continue to spin the myth that growth will continue unabated by attempting to build up consumer demand by “building confidence” in markets. It’s fast becoming a sham. We are never going to return to post WWII growth between the late 1940’s and the 1990’s.

I highly recommend this:

Fleeing Vesuvius: Overcoming the Risks of Economic and Environmental Collapse

http://www.amazon.com/Fleeing-Vesuvius-Overcoming-Economic-Environmental/dp/0865716994

It’s not all doom and gloom but this collection of sobering essays certainly shed light on a completely different world economy over the next 3 decades.

#191 renters rule on 09.15.12 at 8:26 pm

Al Gore invented the internet, and Obama is a beacon of hope?!

I just threw up a little bit in my mouth…

Ever heard of sarcasm, Aileen? — Garth

#192 Coho on 09.15.12 at 8:31 pm

Why is there no respect or appreciation and thanks for us, the foolish consumer, living beyond our means? Without us, the rich wouldn’t be rich and the rich wannabees would have nothing to motivate them. It’s a consumer economy so without us loyal spenders there wouldn’t be much of an economy.

So why is it a mystery that we’ve learned nothing from what happened in the USA when any aware person knows that our government and many others have followed the same dictates passed down to the American Government? And that is to reduce interest rates to entice spending

Do our elected officials have the peoples’ interest in mind? When our MP’s are sworn into office, it’s NOT the Canadian people that they swear to serve. Rather, their allegiance is to the Queen because she is the true head of state and not our elected Prime Minister. Do we really think the interests of our rulers are always the same as ours? We, the people are merely the cows renting the Queens’s farm.

Without the cattle, there can be no milk. If everyone was smart and did the right thing financially, there would be little class differentiation…and this goes against the very foundation of earthly society. Everyone has his or her place. The Dvine Right of Kings. The Caste System in India. Every culture, every institution has a strict heirarchy.

It has always been a system of the few milking the many and those with power bullying and taking advantage of those without. So let’s stop with the ridicule and criticism and show some thanks and appreciation for us, the cattle with our head down grazing in the field and eating our way to financial doom because it is through us that the few (and our beloved central banks) can continue to prosper.

When did this turn into the anarchy blog? — Garth

#193 Kaganovich on 09.15.12 at 8:43 pm

So, it looks like the playerz of the global financial system are going to get a continuous replenishment of poker chips to keep gambling with. As the nickel is slowly dropping with regard to who is actually benefitting from the steady easing operations around the world, some groups are finally calling a spade a spade.

http://www.guardian.co.uk/business/2011/aug/14/quantitative-easing-riots

Like many have mentioned on this blog, the financial problems everywhere have little to do with liquidity and more to do with solvency and corruption. Who in their right mind would be willing to lend out their cash to a business start-up in this conjuncture? The rich would rather speculate/gamble on stuff that is neccessary for the common human to survive. This inclination towards the ‘free’ lunch is nothing new (http://www.youtube.com/watch?v=NY-altlUZHg), nor is the free part of the equation a permanent feature. It’s all good until the masses of people systemically destined to play the role of losers get fed up. Then that which seemed so free and easy for the wealthy won’t seem so cheap any longer. The Chinese elite are more attuned to these possibilities.

http://www.huffingtonpost.com/2012/09/14/marc-faber-stimulus-federal-reserve-destroy-world_n_1884709.html?utm_hp_ref=business

#194 Coho on 09.15.12 at 8:50 pm

So, is this the choice, Garth? Either stick with the status quo which is slowly milking the people dry, or anarchy? Whatever happened to good government? A government for the people. I imagine that the majority of the frustrated and disenfranchised are not pro anarchy, or anti-government — they’re anti-bad government. Who are the real sponsors of anarchy? We see what the results of the USA, UK and France ‘liberating’ Libya and Iraq are…anarchy.

It’s a democracy. Run for office. — Garth

#195 neo on 09.15.12 at 8:57 pm

O ya..One other thing Garth in our ongoing debate.

I’ve said many times and have been proven correct each time that The Fed can’t have the equity markets go up AND yields going up at the same time. That defeats what the Fed is attempting to accomplish. QE3 so far has caused yields to spill higher. That is NOT what they want to happen. I can guarantee you. They will sacrifice the equity markets again if the 10 year approaches 2.4%. Currently, 1.87%. They “say” they want people out of treasuries and into stocks. But in order for the U.S. to service their bloated debt/deficits and an American housing recovery to have a hope in hell of happening they need rates to stay at historical lows. That’s why equities have been trading in a range and will be for the foreseeable future.

The S&P is ahead 16.5% this year and 24.52% in the last year. Some range. — Garth

#196 bill on 09.15.12 at 9:04 pm

#178 Westernman on 09.15.12 at 5:48 pm

you ,in your apparent ignorance,addressed another person. the wrong guy. get it yet??? are you deliberately obtuse or is it just a natural state for you?

do we need people to ” fear and respect us…”?
I certainly wouldnt fear or respect you .not with your line of crap.

#197 Canadian Watchdog on 09.15.12 at 9:31 pm

“The S&P is ahead 16.5% this year and 24.52% in the last year. Some range. — Garth”

Yep, all while volume is plunging as investors flee to hard assets and emerging market investments.

Watch for continuing volume decline until nobody but HTFs are trading with each other.

Extreme statements negate much of the value you have added to this blog. — Garth

#198 DonDWest on 09.15.12 at 9:35 pm

“It’s a democracy. Run for office. — Garth”

No, it’s a Plutocratic Republic, you run for a silly established political party where you’re nothing but grass in a lawn. These silly political parties are then subsequently funded by bribes from rich people. Joining this gravy train isn’t exactly the best way an individual can promote change. . .

Oh, so no guts. I understand. — Garth

#199 PoorgEoisie on 09.15.12 at 10:12 pm

Gee I wonder if this will go over asking
http://www.homefinder.ca/listings/253147-1528-king-st-w-toronto-ontario-pt54608460
A shade under 1.2m for a 9 bed mansion over looking lake Ontario. The bulls will be on parade when this one goes “TO is on fire SFH gets 500,000 over asking”.
And if it doesn’t go over asking I think the bulls will have to admit it’s a done deal
Nas-ty

#200 PoorgEoisie on 09.15.12 at 10:12 pm

Crash

#201 Smoking Man on 09.15.12 at 10:22 pm

Mr Buyer

Not sure if u realized what happend a few days ago. For 30 years central banks did what they are mandated to do. Keep wages low. They call it inflatioin. They so good at it that they that now no one has loot only debt.

Its was good for business. Problem is they are not investing just hording cash. With the printing press on full speed that horded cash losses value quick.

If you want to protect its value you now need to put it in play. Ben just bitch slapped the machine.

This is a once in a life time oppertunity make out huge.

All central. Banks including our will need to do the same or live with massive trade deficets. Savers are royaly screwd. Debters how hold hard assets that apprecite with a devaluing us dollar will make out like bandands. Oil 200 a barral next year gold 2500.

I can’t stress it enough.

The rules just did a 180

Penpal question?

What would the probabilty of say I said I

Work in capital markets, I’m a guru code smith supporting and building apps killer apps that made my desk the most profotable desk in canada. What’s your bull shit meter say?

#202 penpal on 09.15.12 at 10:34 pm

@ # 55 Devore

I don’t always agree with your posts, but they are well considered and worded.

You are one of the few that I never scroll past.

#203 DonDWest on 09.15.12 at 10:43 pm

Oh, so no guts. I understand. — Garth

Jumping in a pit of vipers may be brave, but it’s also foolish (and stupid).

Lucky for us kids going to face Germans in 1942 didn’t see it that way. — Garth

#204 penpal on 09.15.12 at 10:54 pm

@ # 156 a k a D A

You mean you didn’t know I’m 16?

Oh , right, you got banned from the blog for quite a spell and must have missed it.

#205 TRT on 09.15.12 at 11:11 pm

Helicopter Ben caused some nervous breakdowns the other day… ;)

Inflation is coming…asset prices will rise (some more than others). Oh, and wages will remain stable. What you say? Doesn’t make sense!? Well visit India and China…where wages to house price ratio is astronomical. Figure it out!

Now, from the South Asian perspective: Buying a house means that after 25 years…you have something paid off. Sure renting may make sense in the short term but…what are you going to leave your kid(S)??

In the South Asian community, the retired parents then live with the kids. the kids have a huge advantage vs kids who had renter parents…A significant portion of their expenses are gone (housing) even before they begin their adult lives.

RE is generational in India. That view pervades Brampton and Surrey.

Comparing Renting vs Buying? Renters, see how your next generation (kids) will fare with kids ho have no housing costs. Good Luck!

#206 Canadian Watchdog on 09.15.12 at 11:14 pm

Where are Canadian pension funds putting their money? Chart

“Extreme statements negate much of the value you have added to this blog. — Garth”

Is this extreme too? Excerpt from Ontario Teachers Pension statement. If large institutions are concerned about property rights, what chance does the little guy have? Nil.

I think you’re too smart to believe some of things you say.

#201 Smoking Man

Excess QE is more likely to fire back and cause the velocity of money to decelerate faster. U.S. Velocity of Money Central banks can control the money supply on a medium term basis, but they can’t control the velocity, that is, how fast it’s spent and where it goes.

This is not 1970s if that’s what you’re thinking. During the 1970s, labour unions’ wages were rising with inflation and government stimulus was largely invested in infrastructure projects. Today we have nothing more then delusion central bankers trying to defy the laws of math by paying down debt with debt and governments freezing unions’ wages as if it won’t have any repercussions. That’s how stupid and dangerous it’s become.

We’re more likely to see a major revolution anytime within the coming years before it gets any worse. That’s fore sure.

#207 penpal on 09.15.12 at 11:19 pm

@ # 201 Smoking Man

If that were in fact the case it would make me question why you would spend so much time posting here.

Perhaps you enjoy manipulating peoples’ innate sympathies for the type of charachter you have created here – something I’ll openly admit that you do masterfully at times.

Perhaps another agenda.

I really can’t speculate much more than that I’m afraid – you are much too multi- dimensional for a quick analysis (by my talents at least).

Also, I would question, with your “insights”, why you wouldn’t be running your own hedge fund on a pot of GROWING managed money pulling 2 / 20 like clockwork.
Blow, hookers, ‘Floyd a plenty and f’ing endless!!!!!

Instead that is, of describing your alleged ‘career’ like you were a “Master of the Universe” (Bonfire of the Vanities – Tom Wolff – you probably saw the movie and left it at that) instead of a quant.

And btw…

Please note that in few, if any, of my posts to this blog I refer to you as an idiot.

Clearly you are not.

Please do not assume that I am one either, k?

Or, perhaps in your parlance;

I’m NOT “…just another brick in the wall….”

(with my sincerest apologies to the boys of ‘Floyd for use of their iconic lyric in such a context)

#208 Bill Gable on 09.15.12 at 11:21 pm

Life is a bowl of cherries.

Radioactive cherries.

What asset class did Dad and Mom live on? My parents used a house as a home, not a leveraged pile of nails.

They lived on wages, Military modest.

I got suspicious when BMW’s became as common as people that use botox in this town.

Now I am watching everything change very quickly.

Step lively.

At least you manage to slip some humour into this mess Mr. Turner.

Yipes.

#209 from Mississauga on 09.15.12 at 11:30 pm

have been following Mississauga market for 2 years now. this year finally witnessed some price reduction.. Noticed some properties were relisted on the market after reduced price..
for example

This property was listed $419 k in Apr/May

http://www.anthonywoo.ca/_mls/act_-108_arg/wsn_43131_arg/lin_78864_arg#.UFVGYXIa_vk

then it was off the market for a few months, now it’s just listed again for 399k.

http://www.homefinder.ca/listings/425070-981-zante-cres-mississauga-ontario-w2448677

#210 Grim Reaper/Crypt Speculator on 09.15.12 at 11:36 pm

#201 Smoking Man on 09.15.12 at 10:22 pm

What’s your bull shit meter say?
===================================

Who needs a meter…Smoked Man= PHD…piled high and deep

#211 penpal on 09.15.12 at 11:49 pm

@ # 197 Canadian Watchdog

I believe that HFTs are already reported to be as much as 50 to 70 % (seventy per cent! ) of NYSE and other US exchanges’ daily volumes on many days.

So we’re getting there.

However, the exchanges and the REGULATORS are slow to make restrictive policy ( let alone rules and regulations) as HFT plumps volumes and masks illiquidity which keeps the casino going.

#212 Smoking Man on 09.16.12 at 12:12 am

Ah. And for the last observation of the night a hooker just walked in. Hitting on all the + 50’s. That’s what I’m talking about u pay for them to go away.

She’s going to make some loot tonight.

God I love you man, but do something with the beard

#213 EIT on 09.16.12 at 12:26 am

The news is in! And the forecast is WAR! Thank god I’m the continued reincarnation of Hannibal and General Patton. I can already smell the weaponized airborne pathogen,.. O and the napalm, that too.

#214 Mr Buyer on 09.16.12 at 1:53 am

#201 Smoking Man on 09.15.12 at 10:22 pm
That still does not change anything regarding bubbles and our monstrous real estate bubble. It is finished and it will not matter if it takes wheel barrows full of money to buy a loaf of bread. There is nothing left to go into inflating the RE bubble. It does not matter what any government does. Bubbles inflate and collapse and when it becomes clear to the population that RE values can collapse that will be it for a generation or two. People are foolish but the degree of leverage is so extensive that peons like myself will not have the nads for million dollar crack shack gambles. It is a scorched earth full out RE collapse that is upon us. That’s my story and I am sticking to it (egg on my face and all).

#215 Mr Buyer on 09.16.12 at 2:06 am

#201 Smoking Man on 09.15.12 at 10:22 pm
Lets just say I accept your online persona at face value. It came to me the other day that maybe you are simply a warp nine max risk kind of guy and it pays off 70% of the time (it also explains why people think you are really an RE salesman because it is always a good time to buy with those guys). One afternoon a hundred years ago I was playing Euchre and it came to me that the game is called Euchre for a reason (not Pass). So I made it trump every opportunity that I had. I think I passed once the entire afternoon. Well I have to admit that while I did loose some games 10 to 2, my partner and I cleaned up over all, I am just guessing but it was amazing, maybe something like 85% winning games. That was great and my partner quickly caught on so we had a fantastic afternoon. The thing is I did not have to run down to the bank and get a million bucks on a 30 year loan at .0001% to get into the game, and every person in the entire country hadn’t gone to the same bank already, and everybody wasn’t looking at potentially losing their job and working at a restaurant if they were lucky. Risk. I admittedly am not even a top 30% so borrowing a ton of cash to buy a house that is falling in value and will never attain the same value again just does not make sense to a Luddite such as myself. I am having trouble getting my thick head around the new multiples.

#216 Mr Buyer on 09.16.12 at 2:09 am

#182 truth hammer on 09.15.12 at 6:17 pm
Liberal this Liberal that. Conservative poor victim looting the cookie jar. It kind of reminds me of when I was five years old and my four year old brother pointed at me and told my mother that I peed his pants he was wearing.

#217 Mr Buyer on 09.16.12 at 2:34 am

#190 Willy H on 09.15.12 at 8:09 pm
While I have no real grasp of economics, economists or finances it has come to me that the bottle neck approaching us is best ignored by such types as it is unprecedented and the strategy is to just continue motoring on with the implied bet being that the need to borrow money to do anything will always be with us. In any event it is okay to point out the elephant from time to time but it is best to not do so to often here. It is a little disheartening to see how far away from taking pro-active measures we truly are but good scientists and engineers are not in power and until they are it seems growing your money is the only game in town. I am guessing Canada will fair out much better than most providing we get to keep what we have but that is a very big PROVIDING.

#218 n1tro on 09.16.12 at 2:37 am

Sorry Garth, but I have to disagree. Deflation is not in the future. House prices may go down and liquidity is king but all your cash and 7%/year returns isn’t going to buy you food and gas if those 2 essential items rise more than 7% per year. Fill up your tank and go buy the week’s grocery and look at your wallet and see if your dollar is buying more or less than it did say 10 years ago.

With regards to government debt and the solution of increasing taxes to solve it….isn’t that polictical suicide?! Has anyone heard from Brian Mulroney lately?? And what happen to his polictical party? Thats right…they almost went out of existence and had to merge with a bunch of farmers out west to form the “new” PC party.

#219 Mr Buyer on 09.16.12 at 2:42 am

China is becoming a rather large headache. If the time comes that we have to go at it with them I hope that we round up all the Globalists that exported our manufacturing base upon which China built their modernized army. Front lines first to fight. That should be the fate for every advocate of globalization (even if they are 80 at the time). The Chinese are not as friendly as we hoped they would be once they fully modernized their great country. What a nightmare scenario, China and Russia. I think we were hoping China and Russia would be at each other but it is not working out that way. Lets see maybe 10 years for North American manufacturing to retool. Okay that is it, I am not thinking about this stuff for the rest of my holidays. I just want to get a place to live man.

#220 Rural Rick on 09.16.12 at 2:42 am

Westernman – Personal attacks are not allowed.
bill – see above

#221 Patz on 09.16.12 at 2:47 am

#83 a prairie dawg said:

Garth, please don’t propagate that myth about AG inventing the internet. Some will actually believe you. He would have been in diapers when DARPA.net got off the ground. And let’s face it, he ain’t no Bill Gates. lol”

My my aren’t we just so smug and superior but actually clueless. Al Gore never claimed he “invented the Internet.” What he did do, which was almost as important, was draft legislation that allowed it to become what it is today. Oh, and btw it’s ARAPANET not DARPA.net. lol.
And when DARPA.net (sic) got off the ground Gore was enlisting in the army and preparing to go to Vietnam (even though he was against the war he didn’t believe that he should take a deferment when most young men couldn’t).

From Wikipedia:
Gore introduced the Supercomputer Network Study Act of 1986.[54] He also sponsored hearings on how advanced technologies might be put to use in areas like coordinating the response of government agencies to natural disasters and other crises.”[55]
As a Senator, Gore began to craft the High Performance Computing Act of 1991 (commonly referred to as “The Gore Bill”) after hearing the 1988 report Toward a National Research Network submitted to Congress by a group chaired by UCLA professor of computer science, Leonard Kleinrock, one of the central creators of the ARPANET (the ARPANET, first deployed by Kleinrock and others in 1969, is the predecessor of the Internet).[56][57][58] The bill was passed on December 9, 1991 and led to the National Information Infrastructure (NII) which Gore referred to as the “information superhighway.”[59]

#222 cynically on 09.16.12 at 3:37 am

To #192 Coho – If our allegiance is to the foreign (my word) queen rather than to our country, then maybe this explains Canada’s confused identity.

#223 daystar on 09.16.12 at 3:55 am

#188 Blacksheep on 09.15.12 at 7:47 pm Daystar #174,

In my opinion, The EU will fail as structured not due to a shared currency,but a lack of unified policy and taxation. – Black Sheep

The danger certainly is there. Its not any time soon, but certainly the risk is there, sure. Any time there isn’t a cohesive fiscal plan between 17 nations the risk will be there but to impose fiscal policy on nations is to take away their sovereign rights to make up their own budgets and that is not something that will happen or as a pretend European politician I could support. We need grownups at the table to make the right calls, its as simple as that.

When the EU formed in 98′, Europe knew then that there were risks with Italian debt and that it was better than 50% that at some point Italy would need some kind of help so I don’t believe there was that much resistance in helping Italy? Its a large economy that borrowed substantially from France and to a lesser extent Germany but Europe couldn’t let Italy fail if Europe was serious about about keeping the Euro and the consequences of not helping Italy would have been Italian default leading to a regional depression of sorts that would have lasted years having the potential to spin the world back into another financial crisis, of that I have no doubt so the nations within the EU made the right call.

The question I have is, why did it take so long for the ECB to step in to begin with? I’ve said it before but its worth repeating. The narrative as they say for the most part is already prewritten. The leaders in the EU put a timeline together and made these decisions as early as late 2010 including, I believe, the timing by the ECB to bail out Italy and Spain close to a U.S. election in support of Obama. (I don’t believe thats a coincidence at all) Greece was to be made an example of for bad behavior (and nationally, the government of Greece by the time its all over won’t own an acre of land or building and be lucky if they own a share of any service. Their crown jewels have essentially been sold off):

http://news.yahoo.com/greece-resumes-privatization-drive-shortlists-property-bidders-173845773–finance.html

Greece unemployment is at 23.6% in Q2 and rising:

http://www.guardian.co.uk/business/2012/sep/13/greece-coalition-job-cuts-unemployment?newsfeed=true

Credit and trade is freezing there. Private enterprize is in major trouble, inflation is there even though they still have the Euro because private business is so shaken. Its depression in Greece right now and its not looking good at all for their immediate future.

Spain is in a depression like state as well, its karma. The sad part about it all is that there are innocent people there (I know, I know, is anyone innocent lol but in this context some are) who are living in a very real depression right now and they didn’t choose it, a good number opposed bad governments and their bad policies but there wasn’t enough of them to make a difference and now they are all suffering save a few ex politicians in the Caynan Islands.

For the EU now, fiscal policy I believe has to tighten straight across the board and I pretty much know that the rest of Europe will have to be generous at some level concerning GDP growth within the piggs. Really, the easy part is over in Europe. Now, the hard part comes with trying to kick start GDP growth in the piggs and thats going to take investment and jobs. The real work is just beginning with the piggs.

Appreciate your own responses. Cheers.

#224 g-unit on 09.16.12 at 4:20 am

I think there will be a major crash starting around now into 2013, which rivals 2008. The problem is there is just too much debt but also we are not yet through the low of the 40 year economic cycle. Hopefully the low made will be higher than 2008, but it should be close.

If this was the dirty 30s right now would be about 1932. We have a few years to grind out yet. The roaring 20s are over and they aren’t coming back.

Am I full of shit?

#225 John on 09.16.12 at 8:05 am

Coho wrote:

“It has always been a system of the few milking the many and those with power bullying and taking advantage of those without. So let’s stop with the ridicule and criticism and show some thanks and appreciation for us, the cattle with our head down grazing in the field and eating our way to financial doom because it is through us that the few (and our beloved central banks) can continue to prosper.

When did this turn into the anarchy blog? — Garth”
———

This is a tough one. I think it’s pretty much inevitable that opinions become more polarized as time goes on. Consider too that family and societal institutions ( in the west) don’t have the pull they once did. And this is progressive.

The concept of giving the current system over to angry “awakening” masses, who just passed several decades consuming and drugging ( with mood-alterers of various types) is not an option. If it’s possible, moderation is the way.

Without our current system, could internet be available to all? This blog? …and a lot of other things.

If the tune is “play it smart and ride the ponz”….that can be wise ( keeping moderation as a compass). But like it or not, the other pole ( disorder and demanding “real” power) is going to build.

Each pole must move towards the center for moderation to develop. Extremes are useless…although sometimes good to highlight the reality that poles do exist. For me, challenging debate achieves this. One pole or the other can never be the aim ( unless self-destruction is the real goal).

The guts…the challenge…is in being moderate once the landscape is more obvious ( the internet, passage of time and unfolding events…QE3 etc. light up the landscape).

I’d take a firm central banking pole over an anarchist pole any day. So would almost anyone. And that’s something to consider.

Yes…initial steps are to be smart and take care of yourself in the current game. To realize more of the spectrum of opinions out there. And to remember to keep moderation as a goal….even while laying out some of the harder truths.

#226 Bottoms_Up on 09.16.12 at 9:00 am

#55 Devore on 09.14.12 at 11:33 pm
————————————–
Well said. You’ve got my vote if you ever run for office.

#227 Herb on 09.16.12 at 9:22 am

#216 Mr Buyer,

BEAUTIFUL!

#228 Joe_blown_away_by_high _housing_costs on 09.16.12 at 9:32 am

“no global war for 7 decades”

What a joke! The USA has waged war in every corner of the globe continuously for 7 decades.

Korean war, Vietnam, east Timor, panama, Guatemala, Serbia, Afghanistan, Iraq, war on drugs in the America’s, etc. There are many more. The US is in a constant state of war. The military-industrial complex is intrinsic to US capitalism and they need somewhere to use up the products made for war to keep the demand for more weaponry going. Pretty soon (like after the US election) many are saying war will start in Iran.

Don’t insult our intelligence by saying no global war for 7 decades.

None of those conflicts have been global. The statement stands. — Garth

#229 John on 09.16.12 at 10:15 am

Daystar wrote:

“The question I have is, why did it take so long for the ECB to step in to begin with? ”

I think your question isn’t real. You’re starting from your answers. Who’s head of the ECB? What’s the role of the ECB? Why do you still think Merkel is a “head of the state? Where are you getting this from? Did you follow her visit to Canada? Is she the head of a state or not?

Who do you think is “sitting at the table” in Europe making “adult decisions” ( or should…or could..or can).

Whatever is happening is nothing more than the results of a mish-mash patchwork of opportunists transferring wealth away from the middle class. That’s it. The rest is just an illusion of “political process”….which you want to hang on to ….and hang on to…you are not relevant.

You’ve moved on well past “the role of the Bank of Canada” and “Mark”, but there’s still a ton of that old “belief in authority” that has to be dismantled for personal responsibility to emerge.

There’s no space for this responsibility with insistence on informed (?) technocratic and political jive talk. I mean….who cares? You’re not talking about the issues when you prop up puppets and systems that don’t even exist ( beyond reactors and spin mastering to real decision making forces).

You’re just not relevant. It’s as simple as that. Without relevance, where are your solutions? You have to at least start looking at reality…as hard as it is.

#230 Herb on 09.16.12 at 10:33 am

Re DonDWest’s #189 and your response, Garth –

Take it easy. You were sabotaged by both of our major parties and quit politics as a result.

Actions speak louder than words: you wanted to be more than a potted plant but were not allowed to be by the current party system. Hence, Harper fired you from the CPC, and Ignatieff did not endorse your Liberal candidacy in Caledon. Refusing to enter the partisan fray may be no more a sign of cowardice than getting out of it. The reference to WWII is a bit on the wild side.

#231 Gypsy Kid on 09.16.12 at 10:41 am

Westernman, your insults against Beach Girl is as disgusting….anyways, I thought this was a finance/real estate site.
Why do we have to post so much personal stuff???
Can we stay focused please??

#232 Smoking Man on 09.16.12 at 10:43 am

Penpal. Muti demetional. Lol. Is that a polite way of saying you’re a loonie.

Dude you have amazing writing skill you ever do a book

#233 Herb on 09.16.12 at 10:43 am

#197 Canadian Watchdog,

looks a bit like house prices going up while the number of sales declines. Ouch!

#234 Old Man on 09.16.12 at 10:58 am

Politics In Canada: Caesar engineered a political coup, and fooled you all; not me!

#235 Doug in London on 09.16.12 at 11:16 am

There is a lot of complaining in this topic about how people are being scammed and hurt by high petrol prices. While that may be a problem in years to come, as we move past peak oil, there’s little evidence it’s causing hardship to most people now. While travelling the secondary highways of Ontario, where the speed limit is 80 Km per hour, I found that if I went that speed it wouldn’t be long before a parade of drivers, all impatient at being held up, would build up behind me. Even travelling at 90 Km per hour, a long parade still builds up and they go zooming by at 100 Km per hour or more at passing lanes. Similarly, I travel at 100 Km per hour (the speed limit) in the right lane on the 401 and most people zoom by at 100 to 120 Km per hour. Now the punch line, many of these vehicles zooming by are big SUV’s or trucks with only one person.

Myself, being single and with only one income, I travel slower to save fuel (also wear of the tires and drive train) because I find petrol prices are exorbitant, ripoff, outright gouging robbery. It’s obvious most people have more money than I do and don’t share my views.

#236 TurnerNation on 09.16.12 at 11:22 am

#208Bill Gable on 09.15.12 at 11:21 pm

Appears, most people (age ~30) in my workplace are getting into BMWs lately. All are 905ers.

Jobs are along the lines of project manager, code implementer and so on. 70-90k/yr I’m guessing. Their Spouses are earning about the same. All own R/E, houses in the 400,000+ range. At lease one has an “investment condo” that’s renting barely break even if at all.

Their purchases, Used:
328i
M3
320

New:
335i
Another 335i
328i
X3

Two others have Mercedes SUVs although one is a Director although atill younger. Also, 905ers.
Keeping up with the 905 Joneses.

#237 TurnerNation on 09.16.12 at 11:24 am

See, this is the difference between guys and girls: Guys can tell you the age, make and model of their friends’ and co-workers’ cars. We drool an coo over the pictures and details.
Gals do the same but for kids! Break out the wallet photos.

#238 Beach Girl on 09.16.12 at 11:42 am

#231 Gypsy Kid on 09.16.12 at 10:41 am

Westernman, your insults against Beach Girl is as disgusting….anyways, I thought this was a finance/real estate site.
Why do we have to post so much personal stuff???
Can we stay focused please??

____

I read this site every day. If my life has a bit more levity than yours, SOREEEE. Ya, the world is going down the pan. I don’t believe that at all, unless your broke.

Specify what is more focused.

It is very basic, if you can’t afford a money pit, don’t even try. I personally can do what I please and home ownership is for me. Had 5 at one time. Some people like cars, gambling, partying, boats. I like a 30-40 saltwater pool and my collection of Mercedes.

Maybe, I am actually more focused than you will ever be.

Everyone here knows Westernman is a yearning Brokeback Cowboy without the horse. Living in basement apt with 90 cats.

Not disparaging basement dwellers. I know lots of them. Everyone has to start somewhere.

But, I think this site will turn into an I hate boomers vehicle, Bring it On.

Hitting the Beach with my Beautiful Jack Russell, will meet my regular band of rich, crazy boomers.

#239 Canadian Watchdog on 09.16.12 at 11:47 am

#233 Herb

“looks a bit like house prices going up while the number of sales declines. ”

That’s natural as the sample size becomes smaller with lower sales. What drives the average price down is when sales and price change volume increase. Notice how August’s average price increased as sales and price changes declined.

Vancouver sellers observed their first reality check in the spring while Toronto will get its first this month. As for Toronto, what we have is a market full of amateur sellers who are being complacent and will likely try to exit next spring after enough headlines post sale declines in the coming months . Well, when everyone and their mother has the same timing and selling strategy to exit next spring, what do you suppose is going to happen?

The bears have their nose press against the glass watching and waiting for prices to drop like 2008. That’s not going to happen (unless the stock market crashes). We have a loong way to go.

#240 neo on 09.16.12 at 11:57 am

The S&P is ahead 16.5% this year and 24.52% in the last year. Some range. — Garth

YEHHH! Now we are back to where we were in 2007 except the economy isn’t anywhere close to 2007. Garth look at a 30 year chart of the S&P for the last 12 years we’ve basically had spasms to the upside and then to the downside but ultimately we are going sideways. Every one of those “spasms” have come from artificial “asset bubble” central planned growth not REAL organic growth. Again, watch as the 10 year gets anywhere close to 2.4%. We won’t be seeing a breakout in equities because we would need a breakout out of bonds, which means spiking yields, which isn’t happening. Now watch and learn.

Markets have risen primarily based on corporate profitability. Sideways? Not much of a chartist, are ya? — Garth

#241 TheBigLebowski on 09.16.12 at 12:30 pm

That is a very interesting way of describing one of the largest criminal syndicates in existence.They are hell bent on raping the middle class through inflation and propping up the banking system. Their last concern is economic growth and prosperity for all. Yes paper money may buy more of things we don’t need such as houses, cars and computers as discretionary spending falls along with prices for luxury items . But the price of things people NEED like food,energy, will climb as inflation takes off and prices rise. All these QE’s are not directed at the economy, the sole purpose is to try to re liquify the criminal bankers levered 100 to 1 on their assets. And out of this mess they hope to consolidate into a new economic system which they have even more control over. Its one giant incestuous relationship between banking ,government and media and the average person is too busy having fun to even care. Oh well,

Unmitigated conspiratorial crap. — Garth

#242 Grantmi on 09.16.12 at 12:36 pm

#176 Suede on 09.15.12 at 5:14 pm
CDN watchdog, you’re a beast!

How you dig up this info is uncanny.

It’s called the Internet .

#243 Max Torque on 09.16.12 at 12:52 pm

Re: #156 AKA D.A. “Someone asks me “how’s the market” my response is always “Well that depends, are you buying, selling or renting?

Sure it depends…because you want to find out first if they are a potential buyer or seller. You “professional” Realtors always tell your buying clients “it’s a good time to buy” and the sellers “it’s a good time to sell” no matter what the market is doing.

#244 Hoof - Hearted on 09.16.12 at 1:22 pm

None of those conflicts have been global. The statement stands. — Garth

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

WW 1 and WW 2 were isolated per se in context to the entire world.

(War is basically a cyclical business venture by the Rothschilds to create market swings).

However,the world is far more integrated. Apparently 20% of the worlds oil supply is shipped through the Persian Gulf, and anytime someone lets off a firecracker over there we have speculators cashing in.

Its actually Iran that gains from these threats.

#245 Old Man on 09.16.12 at 1:26 pm

There must be lots of money around, as just drove past a Ford dealorship, and some type of sale must be going on because there were about 50 buyers walking the lots. Am going back tomorrow to see whats cooking.

#246 Canned Goods and Buckshot on 09.16.12 at 1:28 pm

Devore #55 said

“No, peak oil is not the end of civilization. Global warming isn’t going to wipe us out. Pollution won’t turn us into mutants. Not that these are not important issues, they’re just not nearly as important as we’d like to believe. Neither as they are as unsolvable as we’d like to believe. And certainly, no drastic actions are required NOW. But whether by design, or collective human nature, everything is an emergency.”

Devore suggests cognitive dissonance is what drives us to want to affect change now. He further suggests that global warming, peak oil and pollution should not be dealt with now. He advocates for planning for the big picture and not terrorist events, nuclear attack, aliens or asteroid strikes.

For a fairly articulate post, that’s quite a leap to associate not doing taking effective action now on global warming, peak oil and pollution with people’s difficulty in maintaining perspective in probability and risk for black swan events mentioned in the later!

I think it’s a form of cognitive dissonance to conflate the two. Rather than appreciate the risk of global warming and peak oil, the poster appears to artificially reduce the importance of these phenomena in an effort to decrease dissonance.

#247 Canadian Watchdog on 09.16.12 at 1:34 pm

#241 TheBigLebowski

“Unmitigated conspiratorial crap. — Garth”

Nope. It’s all set out in the UN’s Agenda 21 Read it if you care, then you’ll see the correlation between urbanizing populations, shrinking condos, banning horse breeding on pastures, revising education system to be based on values rather then facts and a lot more plans that would make the average person uncomfortable.

It’s developed by smart unelected people like you who travel around Canada lecturing Universities and towns on how to run their communities.

Very interesting.

I give up. Enjoy the conspiracy. — Garth

#248 Jim on 09.16.12 at 1:41 pm

“Technology and education are antidotes to extremism and tribalism, and one reason there’s been no global war in seven decades.”

This is a little nuts.

The major reason that great powers do not go to war anymore has to do with nuclear weaponry. This was known in the 50s, when the pentagon used to simulate conflicts between the USSR and NATO. Nukes were used each time, resulting in stalemates or annihilation.

As for tribalism, funny to hear you speak of the end of tribalism when it is actually venerated in one of the world’s major religions (eg., the chosen people). Funny that the internet has not changed that.

#249 Basil Fawlty on 09.16.12 at 1:53 pm

“Unmitigated conspiratorial crap. — Garth”
Fair enough, so why are Central Banks in Europe and the US announcing more money printing and zero real interest rates until 2015?

To spur economic growth by using liquidity to counter deflationary pressures so jobs can be created and lives improved. Why the hell do you think? — Garth

#250 Blacksheep on 09.16.12 at 2:01 pm

John #225,

Great post John.

“The concept of giving the current system over to angry “awakening” masses, who just passed several decades consuming and drugging ( with mood-alterers of various types) is not an option. If it’s possible, moderation is the way.”
———————————————-
Agreed. Due to personal economic ‘struggles’ a growing % of the Cattle have stopped grazing, only to look up and ‘see the system’ for the first time. Dancing with stars, off. Internet on. Questions ensue. The realization that purchasing ‘stuff’ offers only a quick chemical buzz, but debts linger for years. Personal austerities applied. Consumption declines. Economy slows. Fed steps in, and…………Here we are.

This is the folly of the Govs/Corps. thinking a 70% consumer based economy, is some how sustainable. Eventually peak debt is achieved and the ‘ponzi’ comes unglued.

I see no real threat of serious unrest, after all their (we’re?) still Cattle.

take care
Blacksheep

#251 Blacksheep on 09.16.12 at 2:18 pm

TheBigLebowski #241,

Interesting post.

#252 Daisy Mae on 09.16.12 at 2:20 pm

#230 Herb:

“Harper fired you from the CPC…” Because Garth wouldn’t agree to changes re the amortization rates? We all know how the feds decision in that regard played out…

“Ignatieff did not endorse your Liberal candidacy in Caledon….” Did anyone put much stock in what Iggy said or did?

#253 daystar on 09.16.12 at 2:25 pm

#229 John on 09.16.12 at 10:15 am Daystar wrote:

That was an ignorant comment. You can clean it up by learning how to treat others as you wish to be treated yourself John (unless you like double standards that leaves one “two faced”). You can start by treating others as “relevant”.

#254 Old Man on 09.16.12 at 2:38 pm

Some of you people are renting sitting on assets that can be converted into cash, and do not buy any Real Estate, even if the woman is getting horny for it all. I say have fun, and stalk your prey like a wolf over the next 2 to 3 years. Find an area that you can fall in love with; select a few condos that you like; go to an open house as a potential buyer to look only; hit the MLS on the internet and make notes for these properties as to changing listing prices; walk or drive in the immediate area to experience the factors that are important for you; and make it into a game for prosperity looking for a real bottom to settle – be patient – and then attack with an offer when the time is right. Oh, and be sure to attend Garth’s seminar in October, as knowledge is power.

#255 Investx on 09.16.12 at 2:40 pm

Thank you for your information and contributions, Canadian Watchdog. Keep it up!

#256 Ayn Rand Army on 09.16.12 at 2:48 pm

#241 TheBigLebowski on 09.16.12 at 12:30 pm

That is a very interesting way of describing one of the largest criminal syndicates in existence.They are hell bent on raping the middle class through inflation and propping up the banking system. Their last concern is economic growth and prosperity for all. Yes paper money may buy more of things we don’t need such as houses, cars and computers as discretionary spending falls along with prices for luxury items . But the price of things people NEED like food,energy, will climb as inflation takes off and prices rise. All these QE’s are not directed at the economy, the sole purpose is to try to re liquify the criminal bankers levered 100 to 1 on their assets. And out of this mess they hope to consolidate into a new economic system which they have even more control over. Its one giant incestuous relationship between banking ,government and media and the average person is too busy having fun to even care. Oh well,

Unmitigated conspiratorial crap. — Garth
—–
Not crap, that is precisely right! That is what is happening.

First the low interest rate policies inflate the bubble in housing and now they are trying to REFLATE it to make the banks whole. This is not rocket science. But it ain’t going to work, all the big US banks are teetering on failure as well as so many sovereign governments.

The term Cash is Trash has never been more true than today. Get out of cash, even the CAD is being debased. It FELL on Friday??? WTF? Carney and all the central bankers around the world were aggressively propping up the dollar after the QE decision.

Precious metals is the best way to protect yourself and most likely ever prosper greatly. No other vehicle is as safe or beneficial in a high inflationary environment. The gold mining stocks are still cheap and just started to blast out of the gate. Ride the bull baby! Ride the bull.

More crap. — Garth

#257 Ayn Rand Army on 09.16.12 at 3:03 pm

#249 Basil Fawlty on 09.16.12 at 1:53 pm

“Unmitigated conspiratorial crap. — Garth”
Fair enough, so why are Central Banks in Europe and the US announcing more money printing and zero real interest rates until 2015?

To spur economic growth by using liquidity to counter deflationary pressures so jobs can be created and lives improved. Why the hell do you think? — Garth

—–
Garth, central bankers buying financial assets with fresh money does nothing to help the real economy. It just perpetuates bad players and transfers wealth from savers and pensions to debtors.

Real businesses are now on hold, as we all know, because demand is down, and to future looks bleak. Demand being down means other producers are also scaling back.

In economics, supply is demand. Not money. Money is just the facilitator. Trade is based on goods for goods. This is why China will soon total reject the US dollar. No more funny money, they’re gonna want goods. Hence is why they are buying assets everywhere globally. Getting rid of their cash while the gettin’s good.

All this inflation and collapse of the US currency is destructive. How is a business supposed to make any economic calculations when the measure by money is unstable.

Imagine a civil engineer trying to design the blueprints for a building and the actual length of a meter is changing. Is he to add a factor to every dimension that accounts for the shrinking distance?

What if the shrinking is non-uniform. Then he needs a complex function to account for the changes. But we don’t know the future, hence the engineer can never design a building under these circumstances.

Same goes for finances. The current environment is rotten because of unsound money, the life blood of economy is poisoned.

#258 };-) aka D.A. on 09.16.12 at 3:05 pm

#243Max Torque on 09.16.12 at 12:52 pm
Re: #156 AKA D.A. “Someone asks me “how’s the market” my response is always “Well that depends, are you buying, selling or renting?

Sure it depends…because you want to find out first if they are a potential buyer or seller. You “professional” Realtors always tell your buying clients “it’s a good time to buy” and the sellers “it’s a good time to sell” no matter what the market is doing.

If you know what you are doing and there is valid purpose in your plan for doing so… well then yes indeed it is always a good time to buy or sell. The answer to the question “How is the market?” though can be quite different depending upon what that person is interested in doing. When someone asks “How’s the market?” they can be asking something quite different than someone else who might ask the same question.

A “professional” Realtor never assumes they know what the client is asking without clarification and qualification. Once clarified and qualified a “professional” will the commence guiding their client toward the best means by which to achieve the clients objective. If a client says they want to sell or buy a “professional” needs to qualify the parameters of their client’s expectations. If those expectations are achievable then it is a “good time to buy” or a “good time to sell” provided a plan is implemented that will best facilitate achieving the objective. There are good attributes in any market which can be exploited to achieve a client’s objective and there are bad ones in any market which must be avoided so as not to thwart the client’s objective and thus there-in every market is a good time to buy or sell – if you know what you are doing.

The only time it is not a good time to buy or sell is when the client has unrealistic expectations given the then current market conditions.

#259 Canadian Watchdog on 09.16.12 at 3:20 pm

“To spur economic growth by using liquidity to counter deflationary pressures so jobs can be created and lives improved. Why the hell do you think? — Garth”

I went for a drive yesterday around King and Stouffville to check out new developments in the area. Know what I seen? Miles and miles of new residential construction. Know what I didn’t see? New small commercial and industrial units for small businesses.

Our communities are not developed to promote small business growth, instead, they develop mega-outlet malls and banks with homes built all around it; that way the community keeps feeding corporations and the big fat banks.

What was the result of Canada’s Action Plan to promote jobs anyways? Chart Our government spent $60 billion dollars and all they got was jobs back, not job growth. Not to mention that most of the funds went to politicians’ construction buddies to rip-out and replace roadside curbs that were perfectly intact.

The political system is being excessively abused and it won’t stop until people do something about it. Unfortunately, the people won’t act until they lose their shirts—then they’ll demand answers. Too late.

Who works in the malls and banks? Robots? — Garth

#260 Bill Gable on 09.16.12 at 3:23 pm

Could I beg for shorter posts? Also – try tinyurl.com to make your links fit.

Oh, and one more thing – if you have pages and pages to post – get yer’ own blog.

Thanks – oh, and don’t faint – lunch with RE expert yesterday – now that I am back in Vancouver. He said he was telling everyone NOT to buy anything, then he added – “I’m out”.

Met guy in Paris who sold 12 condos in Vancouver in the last year (ok, he said muttering) – “I wouldn’t touch Van RE with a bargepole”. (Turns out he is a banker for a guy that likes orange underwear).

Canada is to be appreciated most, when returned to from far away places.

Lucky us.

#261 Old Man on 09.16.12 at 3:27 pm

There are many conspiracy theories floating around, and if such is true; so what, as there is nothing one can do to change the past. Live in the present with a clear mind, and take care of yourself moving forward in life with a personal sense of doing what is right with you and your family paying attention to personal finances with security, and looking for opportunities to make a better life; be it with employment; marriage; or the purchase of a home for a bargain.

#262 tkid on 09.16.12 at 3:35 pm

The Japanese ambassador to China has unexpectedly died in a street in Tokyo. Ruly mobs in China are protesting the Japanese purchase of several islands.

There is trouble a-brewing.

#263 Old Man on 09.16.12 at 3:46 pm

I am laughing at Garth about the robots, as drafted funds from RBC to a Royal Bank branch, and went to enter a counter cheque deposit at the TD a couple of months ago nextdoor. The systems were down, but the guy was able to clear my deposit, and said need $200, and he said your account has disappeared. I said ok will go back to RBC to get some cash, and he said nope as we have a hold on your deposit cheque. I said what no money for me?

#264 Westernman on 09.16.12 at 4:06 pm

Beach Girl 2 # 238,
Poor sad wretched deviant you are, not everyone is some kind of pervert like you and your “friends”… sideshow castoffs more like it.
Don’t forget the bi-sexual goats at your beach party – they should fit in just nicely with the crew…

#265 TheBigLebowski on 09.16.12 at 4:13 pm

#261 Old Man
What are you talking about? If you only worry about yourself and your only little world. You have just guaranteed with that logic to condemn all generations to come to live on their knees in-perpetual austerity. You really have no clew how the minds of the people in charge really work do you. They are not just going to leave you alone because you are only concerned with themselves. These people are utter control freaks and sociopaths. And they won’t stop until they have total control of every facet of this world. Your grandchildren will be lucky if they are allowed to live(U.N agenda 21 documented) let alone own their own property. Its this mass psychology of, “just leave me alone and don’t bother me with scary facts'”that has gotten us into this mess.

#266 Canadian Watchdog on 09.16.12 at 4:15 pm

Who works in the malls and banks? Robots? — Garth

Almost. Link
And for those who think I fetch this info on the fly, see here.

Speaking of promoting jobs. Check out this tweet I received last night from a young kid whose twitter summery reads:

“Started trading in 2008, lost 50% on 1st trade, then educated myself & developed a breakout trading system. Now trading profitably using equity stocks & options”

Reminds me of this 16 year old trader from Toronto who was on CNBC last week.

Is this the government’s idea of job growth? Turning kids into speculators?

#267 Basil Fawlty on 09.16.12 at 4:28 pm

“To spur economic growth by using liquidity to counter deflationary pressures so jobs can be created and lives improved. Why the hell do you think? — Garth”

I am not sure what the hell to think. These policies helped create the largest credit bubble in history, which created a massive misallocation of capital into real estate and consumer goods. The bubble burst in the US creating over 10M foreclosures, trillions in bank bailouts and the decimation of the middle class.
So, how the hell is more of the same going to cure our economic problems?
The way to economic sustainability is through savings-investment-production, which is impossible with interest rates at zero and currency values being continuously debased. An economy can’t print and borrow it’s way to success, it is the road to ruin.

The question was about ongoing QE, not rates. — Garth

#268 Canadian Watchdog on 09.16.12 at 4:32 pm

Sorry the first link was bad Garth: Mobile Banking Growing Among a Niche Group of Online Canadians

Who needs humans in a digital world? Mark this post. Canadian banks will start layoffs in T-minus…

“The principal objection of the Luddites was to the introduction of new wide-framed automated looms that could be operated by cheap, relatively unskilled labour, resulting in the loss of jobs for many skilled textile workers.” — Garth

#269 Old Man on 09.16.12 at 4:59 pm

#265 TheBigLebowski – there is nothing I don’t know about, so what is your point? My point is to forget about it all, and move on for a better day, as to worry about this all is a waste of time, as whatever has taken place in the past you cannot change it; so worry not and move on with a positive outlook. I met this man today all dressed up, and said looks like you just came from church. He said yes, and replied was it a good sermon, and he said wonderful. I said we all need a good uplifting in times of stress; he smiled!

#270 MultiCult on 09.16.12 at 5:21 pm

How can El Bernako print a bunch of money not worth the paper that its not printed on and have a deleveraging cycle ?

Inflation is the only solution to the central bankers, they will never allow the prices of any asset to fall in relation to dollars. And this Garth guy says “what inflation” he should ask his butler about inflation.

And you should worry more about asset deflation than price inflation. (I cannot believe how many times I’ve typed that.) — Garth

#271 Oceanside on 09.16.12 at 5:22 pm

Bimmer = Car

Beamer = Motorcycle

#272 Kaganovich on 09.16.12 at 5:42 pm

Garth quoted

“The principal objection of the Luddites was to the introduction of new wide-framed automated looms that could be operated by cheap, relatively unskilled labour, resulting in the loss of jobs for many skilled textile workers.” — Garth

Hi Garth, you may find this interesting as well as pertinent to the squabble:
http://www.youtube.com/watch?v=mjd5iM42APA

#273 Herb on 09.16.12 at 5:54 pm

#252 Daisy Mae,

Harper’s ostensible reason was Garth’s political blog. Garth can supply the details.

And Garth took Iggy seriously enough to quit politics. Personally, I took Iggy seriously enought to tell the Liberal Party to get lost until they knew how to choose a leader. (Wound up on their list of donors because I supported a man I valued as my virtual MP, Garth, and they thought I had become a Liberal.)

#274 kreditanstalt on 09.16.12 at 6:03 pm

“Policy coordination”?

That must be government action. Which is central planning defined.

It’s fighting human nature. Capitalism – with an absolute minimum of government interference – is the natural default setting for human economic interaction.

It’s the government interference which flies in the face of reason.

#275 Inglorious Investor on 09.16.12 at 6:12 pm

Garth, you know I have great respect for you. And everything you wrote in your latest post is true–from a certain perspective.

I’d like to offer another perspective…

You say: “Often I’ve referenced the yawning, growing canyon between people with wealth and people with stuff.”

Haven’t people with wealth always been the people with the most ‘stuff’? Bigger homes. Expensive cars. Fine clothes. Jewelry. Wine collections. Art collections. Etc. Etc. In fact, the people with little wealth have always tried to emulate the people with wealth by acquiring simulacra of the stuff the wealthy people have. Read Veblen for more.

You said: “It used to be that teachers, doctors, lawyers or leaders were respected. Now it’s the guy with the biggest Lexus living in a house with gates.”

Fact is, society has always admired the rich. This is nothing new. If society does not respect teachers, doctors and lawyers like we used to, maybe it’s because today teachers are no more well educated than the average university grad (and less so than a lot of people I know who aren’t teachers). More and more people are learning how little doctors actually know, even with the best diagnostic equipment, easy access to information, and a growing body of medical knowledge, your average doctor is probably no less effective today at treating illness as they were 20 years ago. And lawyers? I won’t even go there except to say that some lawyers are the biggest crooks you’ll ever meet.

You said: “This is leading to the destruction of the middle class […]”

I think was is causing the destuction of the middle class is a monetary system and govenment policy that forced nonimal GDP growth during a period when the growth in real wealth was declining. The void was filled with debt. But it’s those who control the financial system that used debt to get rich by siphoning off the future wealth of the middle class using various debt insturments. And let’s not forget plain old fraud.

The middle class used debt (which was highly encouraged by the ‘system’ to make up for stagnant wages in an economy with growing productivity but not enough real money to pay for it all. Read Batra.

However, the monetary system requires the money supply to keep growing or the banking system will collapse. So at every turn, the middle class was encouraged to consume more and more. Now that the moeny masters have all but given up on that strategy, they turn to outright money printing to keep the money supply growing.

You said:”Economies will slowly but relentlessly grow supported by a level of policy coordination previously unknown to the world.”

That’s a rather polite way of saying governments and cnetral banks are printing money. But when the money supply grows faster then real wealth, what happens is a transfer of wealth from savers to investors, as asset prices rise but the value of money declines. So, yes, you are correct to say that most people will not be getting their share. But this statement is somewhat specious, because if real wealth increases at a slower rate than the money supply, then by definition, most people will be left behind because there is simply not enough wealth to go around to collateralize the money supply. It is throudh monetary debasement that a transfer of wealth from savers to investors is occurring.

You said:”Central bankers, have become the guardians. Their concerted, coordinated and blunt actions have ensured no systemic failures will occur, no financial institutions keel over and no equilibrium is lost. Europe is contained. America is struggling back. China will be tempered. Liquidity will be injected repeatedly, as we saw this week, until stability rules.”

Yes, but liquidity without wealth only harms savers and forces everyone to become a speculator in order to try to get a piece of the action. Again, all it does is transfer wealth from savers to investors. But it’s not just a matter of becoming an investor. Again, there is not enough wealth to give everyone a share, so the markets have been corrupted and run for the benefit of those on the inside.

Bernanke’s QE to infinity is the beginning of the end game. Other actions, such as Operation Twist were sterilized policy actions designed to contain the money supply and keep money locked up in the banking system rather than bleeding out into the real economy where it could lead to very high inflation. But the new QE is different. It is open ended and will not be sterilized. Put another way, the Feds have basically given up and have resorted to the kinds of actions so many of us feared. Up to 85 billion in purchases every month, potentially forever. And no means to counteract the inflation, except what? to keep paying the banks an ever higher rate of interst on reserves so they won’t lend the moeny out and open Pandora’s box? What’s next? Allowing people to print money at home on their inkjets?

I don’t know how paper money will grow more valuable when the Feds seem determined to print faster than money can be destroyed in the real economy. In 2006 oil was about 60 dollars per barrel. Today it’s $100. Gold was about, what, $500/oz. Today it’s $1700. Electricity prices have about doubled. The cost of goods like food and other stuff is going up. So just how is money getting more valuable? Because houses will be cheaper? Don’t forget, it’s all relative. If everyone’s house goes up in price is anyone really richer? If everyone’s house drops in price has your money really become more valuable?

Let’s face it, there are no easy answers. The only way to succeed in a low growth economy is to align yourself on the postive side of the general transfer of wealth that central bank and government policies are causing. So, in so far as that goes, you are correct. But if anyone thinks all they have to do to get ‘their share’ is buy financial assets, they should think again. However, if you are a Wall Street insider, then by all means, have at it!

#276 Subversive on 09.16.12 at 6:20 pm

Just wanted to say that I’m really enjoying your blog, lately, even more so that previously, and that there are loads of us who don’t always comment but who still get tons of value, so thanks for doing this. Our family is working hard to pay down debt and be smarter going forward. No point in regretting mistakes of the past, all we can do is make better decisions in the future. Cheers.

#277 John on 09.16.12 at 6:25 pm

Daystar wrote:

“That was an ignorant comment. You can clean it up by learning how to treat others as you wish to be treated yourself John (unless you like double standards that leaves one “two faced”). You can start by treating others as “relevant”.”
——-

I was referring to your arguments in your post, not you. Your arguments are ignorant ( meaning “to not know”). That said, all of us are ignorant because we only are aware of the most minute aspects of reality…and have a giant capacity to project our beliefs out onto the world.

When you speak of the ECB acting or not acting…and its “timing”, you are projecting a misplaced legitimacy on the entity. Just like the Bank of Canada in 2012, the ECB in 2012 is not acting on behalf of “the economy” or “the people”, and this is not their aim…as has been demonstrated.

Your argument is driving in reverse gear on the highway. And this argument is surrounded by technocratic and political jive talk.

You as a person are completely and utterly apart from your arguments. In a “heated debate” the illusion of them being connected moves things forward and challenges assumptions. In reality the person and the argument aren’t the same thing.

And yes, I’m at times “two-faced” …like everyone. Some more, others less.

#278 Old Man on 09.16.12 at 6:41 pm

Garth have some Sorority amazons holding back that are taking studies at University College; did this get your attention? Well, they want to know when and where, so they are waiting for the big annoucement to book tickets, as want to see an old alumni in action, and if you are lucky they might throw an after party for you – damn some guys have all the luck in life.

#279 daystar on 09.16.12 at 6:43 pm

More crap. — Garth

Yep. The only way one couldn’t see that as crap is to dispute what you’ve said here Garth. (I can’t)

“Central bankers, have become the guardians. Their concerted, coordinated and blunt actions have ensured no systemic failures will occur, no financial institutions keel over and no equilibrium is lost. Europe is contained. America is struggling back. China will be tempered. Liquidity will be injected repeatedly, as we saw this week, until stability rules. What most of your doomer authors forget is that sovereign debt is unlike consumer or corporate debt. No homeowner or CEO has the power to tax.”

Central bankers are internationally co-ordinated and we’ve seen it in spades this month. There is no coincidence to the actions of the ECB and the U.S. Fed and its effects on currencies and therefore, the markets (and the moods of U.S. voters).

This Q.E. 3 thing… $40 billion a month pumped directly into MBS’s… what does this “message” truly mean? It means from what I can tell, that the fed is saying loudly there will be a housing recovery, that the fed wants (or needs) financial institutions to concentrate their capital elsewhere and that this Q.E. “investment” will do one of 2 things. It will most likely generate profit for the fed and it means that the U.S. central bank has put itself in the position to control in general, depending on how long Q.E. 3 lasts, future housing valuations through artificially low interest rates and right now they are doing everything they can to jack RE values higher.

PM’s will get a boost from this through the prospects of a down the road devaluing dollar and short term devalued dollar from a strengthening Euro and a short lived, I believe anyhow, Q.E. sentiment but fundamentals outside of currency fluxuations won’t support PM values from what I can tell. The real money to be made right now I believe, is in commodities but the window is short before profit takers step in and negative aspects hit the markets. (I’m thinking the window is a safe 8 weeks but alot can happen in 8 weeks)

For those who believe this central bank engineered bull run has legs past the election, they should think again. As markets rise, risk rises and the risk to the market coming down is not just in higher valuations that encourage selloffs but the dark shadow of taxation that looms in the U.S.

A good number to tax cuts are set to expire at the end of this year if gridlock remains. Again… the narrative for the most part is pre-written and I expect tax increases to hit the U.S., possibly straight across the board early next year and its hype potential is such that it should tame any potential stock market bubbles generated by mitigated world macroeconomic risk. I’m pricing in a lacklustre U.S. economy in 2013 but it picks up in 2014 and I picked up a vibe oh… about a year ago that there is a dark horse Republican winner out there that initiates some needed positive economic changes in Washington. I never caught a name or face but after following Romney somewhat and U.S. politics in general is that this individual will surface in congress. It will be interesting to see how U.S. elections shake out in November.

Garth, the only thing I found myself disagreeing with is this:

“There will not be another 2008, at least not for a generation or more.” – Garth

A U.S. war with Iran could change that, a resource war turned world war and if that doesn’t happen, there is a possibility of GFC as early as 7 to 8 years from now and if I had to put a percentage of it occuring off the top of my head, a 30 – 40% chance within the 9th to 10th year. I’m basing this btw on the potential for oil shortages between 5 to 10 years from now and the effects skyrocketing energy prices will have on the global economy.

What horizontal drilling, still experimental fracking:

http://www.democracynow.org/2012/9/14/pittsburgh_ban_on_natural_gas_fracking

…and oceanic drilling/ discovery has done is buy us time. How much time, its hard to say. Peak oil is defined by peak production but there is another component to it which is the half way point of the collective summation of all crude oil and I would think that right now we are past that half way point unless Africa, Greenland and the artic hold surprises.

As well, environmental degradation and climate change will start having some truly profound negative effects on the world economy. We are already seeing it now with heatwaves spawning drought that is shaping up to be world wide and possibly chronic but as I’ve said before, the first canary to go down will be the artic ice cap and it could be gone in as little as 10 years.

Could accelerating climate change have the potential to create a GFC? Sure it could. It could all by itself force an engineered cost runup at the pumps like no other whether its supply/demand or the world gets serious with carbon capture and the cost is passed down to the consumer to the point where e cars become the new norm. The question is when and sure, there’s a good possibility that all this goes down within 10 years.

We know the solutions to global warming. Its carbon capture of all existing and future coal plants and refineries, its increased fuel and emission regs, its banning or limiting use and recapture of “smart” gases:

http://www.theaustralian.com.au/news/world/smart-gases-boost-global-warming/story-fnb64oi6-1226475215129

…and ultimately, its the technological push towards e transportation and the soaring cost and outright shortages of fuel is the catylist that forces consumers to run towards e cars.

As droughts become more chronic and devastating it will become increasingly clear to the entire world that global warming (surpassing even, the threat of all out nuclear war) is the #1 issue, risk and threat to us all. That’s my belief. It threatens food stocks, energy applications, national and international economics, the works. I wish it was hype but when i read this:

http://in.reuters.com/article/2012/09/10/us-usa-heat-idINBRE88914W20120910

and this:

http://boingboing.net/2012/09/12/whats-climate-change-ruining-2.html

and this:

http://cleantechnica.com/2012/09/13/2012-hottest-year-on-record-for-us/

and this:

http://www.smh.com.au/environment/climate-change/staggering-arctic-ice-loss-smashes-melt-records-20120917-260zu.html

…and seemingly unrelated fear laced links like this (450 million hollow point rounds over 5 years):

http://www.youtube.com/watch?v=JTNUueBMOS0

The worlds biggest problems aren’t fiscal or monetary as I see it, they are environmental and if humanity won’t collectively change its polluting ways, our present human populations never mind future growth, is unsustainable. As such, I truly wish anarchists would see that we don’t have time to destroy and replace our current systems for some warped sense of justice and power coup, we have to work with what we have even if it means that anarchists won’t be able to smash and destroy only to re-create with them running the show. Its bigger than anarchists and their “superior” ways, bigger than the greedy ways of the 1%, bigger than us all.

#280 Nostradamus Le Mad Vlad on 09.16.12 at 6:47 pm


#262 tkid — “There is trouble a-brewing.” — It appears so, and not just over there.
*
Many moons ago, I came to the conclusion that the physical life here is no more than a quick, fleeting adventure — birth, life (decay), death or beginning, middle and end.

Nothing is accomplished by paying attention to the stuff of this world, as there is almost no difference between right here / heaven / hell. This is about as good as it gets, and anything beyond is a major bonus.

So we’ve had a thoroughly fantastic weekend — yesterday, a great pot luck for lunch, enjoying supper with friends and visiting Penticton today, all in glorious, sunny, warm weather.

Unless that was a nuke exploding in the sky!
*
Petro-dollar = Dodo bird Enter the Dragon (China). Iraq was razed for this, and 1:59 clip The fatal flaw. #241 TheBigLebowski — This? The TPP’s Global Economic Coup; Billionaires dumping stocks Guess; Prosecutors and Debt Collectors Brothers in arms; Phoney Tony Will he ever be astonished that in the afterlife, money counts for dick-all! Bernanke “The US public debt climbed to $14.58 trillion at the end of August 2012. This made it slightly bigger than the $14.53 trillion size of America’s GDP in 2010.”
*
1992 Noddin’ Yahoo said precisely the same things about Iran he’s saying now, and this; 55:53 doc — Iran Only govts. and zionists want war, and 13:13 clip; Pentagon Sure knows how to spread goodwill around; Organic Sugar Free Dark Chocolate Almond Milk Guaranteed to blow your mind; Busted Yanked memo from the State Dept.; US govt. privatizes national forests; Anti fish oils.

#281 Ayn Rand Army on 09.16.12 at 7:00 pm

What was the result of Canada’s Action Plan to promote jobs anyways? Chart Our government spent $60 billion dollars and all they got was jobs back, not job growth. Not to mention that most of the funds went to politicians’ construction buddies to rip-out and replace roadside curbs that were perfectly intact.
—-
I applied for $70k in funds to develop bidirectional battery testing equipment to feed energy back INTO the grid for discharging large batteries. I was denied.

This is why I HATE the government. The whole thing was a sham. Only the connected got the money. Tony Clement, Brampton revitalization, Child diabetes… the list is long. I think the Rotman school of business got millions for a new building.

But me, a little business from Canada with world class products selling all over the world who wanted some funds to move to large power was denied.

That’s why I will NEVER keep my business in Canada now and will NEVER pay another nickel in taxes here if I can help it. They are the enemy in my mind. they’re a bunch of looter and thieves. They’re all cronies. It’s all Nepotism!

#282 Ayn Rand Army on 09.16.12 at 7:11 pm

Garth quoted

“The principal objection of the Luddites was to the introduction of new wide-framed automated looms that could be operated by cheap, relatively unskilled labour, resulting in the loss of jobs for many skilled textile workers.” — Garth

—–
What are you saying, you want to get rid of bulldozers now. How about computers and robots , wanna get rid of them too to create jobs….

We have jobs to get production only. If we could push a button and everybody could have everything they want and need then we could all just live lives of leisure.

And we’d be a lot closer to that reality today if it weren’t for all the free riders, wars and governments and unions destroying capital and the economy. Dragging us ALL down.

#283 Ayn Rand Army on 09.16.12 at 7:16 pm

Whoops, sorry Garth, I think I got you backwards on that last post. I’m so used to arguing with you! haha.

#284 Ayn Rand Army on 09.16.12 at 7:19 pm

#274 kreditanstalt on 09.16.12 at 6:03 pm

“Policy coordination”?

That must be government action. Which is central planning defined.

It’s fighting human nature. Capitalism – with an absolute minimum of government interference – is the natural default setting for human economic interaction.

It’s the government interference which flies in the face of reason.
——
Yup, and we don’t need free trade agreements to have free trade. I just told a customer from France to take a hike. He wanted me to lie on the paperwork to lower the tariffs into France and I told him to get out of France! Hilarious.

I don’t need a customer like that, too much trouble.

#285 Daisy Mae on 09.16.12 at 7:38 pm

#260 Bill Gable: “Canada is to be appreciated most, when returned to from far away places.”

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

That is what everyone says. Without exception.

#286 Ayn Rand Army on 09.16.12 at 7:41 pm

#275 Inglorious Investor on 09.16.12 at 6:12 pm

Holy Syte, you’re scaring me man. Nice to somebody else who knows what he’s talking about. Welcome to the club!

I didn’t take the time to over think what you’re saying but it looks spot on at first read.

You think? — Garth

#287 Daisy Mae on 09.16.12 at 7:53 pm

#273Herb on 09.16.12 at 5:54 pm
#252 Daisy Mae,

“Harper’s ostensible reason was Garth’s political blog. Garth can supply the details.

And Garth took Iggy seriously enough to quit politics. Personally, I took Iggy seriously enought to tell the Liberal Party to get lost until they knew how to choose a leader. (Wound up on their list of donors because I supported a man I valued as my virtual MP, Garth, and they thought I had become a Liberal.)”

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

I understand…

#288 Old Man on 09.16.12 at 8:17 pm

#281 Ayn Rand Army: if you have world class products that sell all over the world get an audition in Canada with the whales to get money from the Dragon’s Den, and look out for my buddy Kevin O’Leary, as he might trash you in a New York minute – good luck!

#289 Hawk on 09.16.12 at 8:30 pm

To those who support Precious Metals:

I also believe we are entering a period in time when hard assets are better than cash, given the inflationary spiral.

But why not land, the hardest of all hard assets?

BTW – Any creative suggestion of hard assets besides Gold& Silver?

How are you geniuses going to buy gas? With gold wafers and pliers, or buckets of dirt? — Garth

#290 Canadian Watchdog on 09.16.12 at 8:31 pm

#281 Ayn Rand Army

If it’s an open loop circuit with a diode collecting feedback to the positive terminal, the gov won’t allow it.

#291 PoorgEoisie on 09.16.12 at 8:34 pm

Ayn rand army I hate free loaders too. Imagine people being born in a hospital paid for by someone else, going to school paid for by someone else and learning enough to start a business only to leave and act like the people that paid their way were actually holding them back.

#292 Ayn Rand Army on 09.16.12 at 8:45 pm

#288 Old Man on 09.16.12 at 8:17 pm

#281 Ayn Rand Army: if you have world class products that sell all over the world get an audition in Canada with the whales to get money from the Dragon’s Den, and look out for my buddy Kevin O’Leary, as he might trash you in a New York minute – good luck!
—–
Nah, I don’t need their help. They’re no help to me since I’m leaving. I know what I’m doing. I can grow organically at low costs. I’m very profitable. Just need more sales but for that I need production and for that I need to leave Canada.

That’s my new business plan. Leave Canada.
Only two words long and it the most effective. lol

#293 TheBigLebowski on 09.16.12 at 8:45 pm

#279 daystar
Good heavens, research Climategate
The IPCC scientists have been fudging and outright lying about the numbers for years. All that information you quoted sounded wonderful, until one realizes it all came from mainstream government controlled sources. Sadly you have been sold a bill of goods on that topic and have adopted Their opinions as your own and I fear the next step will be you defending those opinions that have been given to you. If humans are causing any sort of climate variances answer me this. Why are the ice caps on Mars receding at many Km per year, and why are two of Saturn’s moons once balls of ice, now liquid seas? What is the common denominator ? It sure isn’t suv’s and lack of carbon capture. It is that big orange ball in the sky you forget to mention because we are no longer taught about it being the biggest driver of climate in the Universe. Its the variances in solar radiation from the sun that cause any temp change, not emissions from cattle farms. The largest producer of any carbon on this planet is the plankton in the oceans. One volcanic eruption produces more carbon than all human activity for the past 100 years and there are 100’s of eruptions every year. The point is, the planet has always had changing climate, look into the medieval warming period where they had vineyards in norther England.
It all boils down to this. 40 years ago the main roundtable group called The Club of Rome which all governments answer to decided on one thing and I quote.”We need to find a common crisis to rally the people behind and the environment fits the bill.” Since then governments and NGO’s have taken the topic of the environmental movement, twisted it and turned it into a weapon of control. Until you can understand the larger picture all this information will do is cause your eyes to glaze over and a ringing in your ears. But that is ok because most people will grow to love their servitude over time…

#294 Roland on 09.16.12 at 8:54 pm

Garth’s right to say that governments and central bank will “coordinate” (gleischaltung) in the common cause of keeping the neoliberal globalist cause alive despite its perennial dysfunction and deepening injustice.

But the decline of the developed world’s “middle class” (actually never anything more than a working class which for a couple of generations enjoyed unusually high wages) will lead to social and political instability in parts of the world that have not suffered from them in a long time.

From the elite’s point of view, it’s not a big problem. Thanks to modern information and communications technology, surveillance and repression have never been so cheap and so easy, on a unit basis. Repression in the past was an inefficient, labour intensive affair. But tomorrow’s repression will not suffer from excessive institutional overhead costs, and will therefore be much more “sustainable” !

You could say that after WWII we had what Churchill once referred to as the “broad, sunlit uplands.” But now I think we’re going to be heading back to “a new Dark Age, made darker, and perhaps more protracted, by the lights of a perverted science.”

I need an Amazon… — Garth

#295 };-) aka D.A. on 09.16.12 at 9:36 pm

#289Hawk on 09.16.12 at 8:30 pm
To those who support Precious Metals:

I also believe we are entering a period in time when hard assets are better than cash, given the inflationary spiral.

But why not land, the hardest of all hard assets?

BTW – Any creative suggestion of hard assets besides Gold& Silver?

How are you geniuses going to buy gas? With gold wafers and pliers, or buckets of dirt? — Garth

With the income the land produces, be it rent paid by a tenant or food grown upon it then sold at market.

#296 disciple on 09.16.12 at 9:37 pm

Roland, Winston Churchill was a fake character played by Lionel Barrymore. Update your knowledge base.

#297 Ayn Rand Army on 09.16.12 at 9:54 pm

#291 PoorgEoisie on 09.16.12 at 8:34 pm

Ayn rand army I hate free loaders too. Imagine people being born in a hospital paid for by someone else, going to school paid for by someone else and learning enough to start a business only to leave and act like the people that paid their way were actually holding them back.

——
Hahaha! Don’t get me started about how shyte our educations system is. I hated the years I was trapped in public school while the teach catered to the lowest common denominator. People like you.

I owe the school system nothing except disdain. And id give it without limit. It’s a horrible system with perverse incentives.

I haven’t used the public run deathcare system yet and hope I never have to. I’ll gladly pay for my top notch healthcare in another country with all the money I save by leaving Canada.

#298 TheBigLebowski on 09.16.12 at 10:24 pm

#297 Ayn Rand Army
judicial system,education system,health care system etc. People might think government is stupid. But the fact is ,nothing happens in government that the people in control don’t want to happen. words ,terms,phrases and symbols are all chosen very carefully trust me. The word “System” comes from the Roman term they used to describe their sewer, the sewer system. So the people in the know love to laugh in our dumb faces, hence the word system used to describe the above.

#299 boston man on 09.16.12 at 11:31 pm

What most of your doomer authors forget is that sovereign debt is unlike consumer or corporate debt. No homeowner or CEO has the power to tax.

LOL. So with 25% unemployment in Spain, and 50% unemployment among 20-35 year olds in Spain, you are saying that the simple solution to Spain insolvency is to raise taxes?

WTF?

#300 daystar on 09.17.12 at 3:23 am

#293 TheBigLebowski on 09.16.12 at 8:45 pm

Governments didn’t come up with:

http://en.wikipedia.org/wiki/Milankovitch_cycles

…or study ice assays in the antartic:

http://epic.awi.de/18052/1/Lam2007b.pdf

… that prove the 100,000 year cycle of the eccentricity of earth’s orbit is the most profound aspect of glacial formation and climate change. If I asked you whether this planet was getting nearer or farther from the sun would you know the answer? Until you do know the answer, you don’t know what I know and atmospheric C02 is the half of it. It falls out over time, a much longer time than people realize. Check out the chart:

http://www.nature.com/climate/2008/0812/fig_tab/climate.2008.122_F1.html

http://en.wikipedia.org/wiki/Ocean_acidification

http://www.huffingtonpost.com/2012/07/09/ocean-acidification-reefs-climate-change_n_1658081.html

And governments, sorry but I have to laugh. Most of them have done nothing. Look at our own as an example. Harper is doing everything he can to promote higher atmopsheric C02 levels. It’ll be a sad realization if the time came for the world to face mass extinction because humanity was collectively too cheap, greedy, disorganized and stupid to deal with with the pollution that caused it.

#301 888realtor on 09.17.12 at 10:58 am

….

Canadian housing starts rose a better-than-expected 8.1% to an annual rate of 224,900 in August, fueled by a few, large, multi-unit projects in the Greater Toronto area, Canada Mortgage and Housing Corp. said Tuesday.

The August rate was up from a revised 208,000 units in July.

http://www.foxbusiness.com/news/2012/09/11/canada-august-housing-starts-up-81-to-22400-annual-rate/#ixzz26jtFUxd7

Condos. Old news. — Garth

#302 Victor on 09.17.12 at 1:41 pm

“Central bankers, have become the guardians.”

Guardian Angels….we should love them so much

#303 Victor on 09.17.12 at 8:20 pm

Is the destruction of so called “middle class” unavoidable, maybe even desirable?
without middle class income paying tax, will the rest except 1% die of hunger and disease?
All of these will help the corps profit, I figured. Which is a good thing supposedly for the smart investors who is reading the blog.
Maybe it is just a game play to solve the environmental problem we are facing today, reduce the population and demand by 99%