Not so fast

Damn, I hate doing this, but a few words about gold. And what it means.

For the past two years I have told anyone with gold to sell out when the metal hits a high point, and to reinvest in financial assets that actually pay you to own them. Never was this more true than a year ago when the rocks hits $1,900 an ounce. I yelled sell, and the metalheads screamed buy. Anyone who listened has lost 11% of their money, and it’s not coming back.

This week gold stocks like Barrick tanked a bit and gold fell $35 an ounce on Friday alone, 2% of its value. This is not the interesting part however. Why it happened is what matters because it impacts on themes this pathetic blog has been humping away at for months.

Bullion crumbled and oil prices swooned because they are priced in US dollars, and the greenback soared. In fact it’s just had the best week in months. The immediate reason was a better-than-expected jobs report, as employers added 171,000 workers (the numbers in Canada were anemic). That beat expectations and was the best performance in eight months. It gave hope the American economy has internal strength, especially in the wake of rebounding real estate numbers. Consider the symbolism of Sandy and the human resilience it met.

That’s reason one.

Te second is political. The more people working, and the more houses sold, the better the odds voters will stick with the incumbent. So it all supports Barack Obama in a presidential race which was never supposed to be a squeaker. To the financial markets, Obama means stimulus spending, which means more corporate profits, low interest rates and liquidity. Romney, on the other hands, means less regulation, tax cuts plus fiscal responsibility (all good in the long term), but also lower government spending, austerity and slow growth.

On Friday, Obama won. The dollar rallied.

Thirdly, bullion bunnies love to spread the myth of hyper-inflation, arguing that all this government money-printing represented by central bank spending will surely make paper money worthless, and gold shine. It’s not true. The billions being created are going to buy government bonds and support the banking system. They are not finding their way into the economy. The velocity of money has been falling, not rising. If we’ve needed to worry about anything, it’s been deflation.

But what the good jobs numbers on Friday did was remind everybody when all the government largesse will stop. The Fed’s made it clear the big goal is to create jobs and hammer down the unemployment rate. As that happens it makes people focus on what happens when all this stimulus is withdrawn and the economy is self-igniting. Suddenly the numero uno reason to hide yellow wafers in your sock drawer goes poof.

The pros know this. They’re bailing.

Has gold done well over the last decade? Absolutely. And up until 2010 I’d always advocated having precious metals as part of a balanced and diversified portfolio. The book on the GFC that I published in late 2008 suggested holding up to 15%, which was appropriate (and profitable) advice. Today that weighting is zero.

This is part of the tectonic shift taking place beneath our feet. From the birth of the middle class to its demise. From the accumulation of stuff to a new definition of wealth. From rocks and houses to cash flow. Real assets are entering a period of decline, in which not only metals and commodities will perform poorly, but also real estate. It’s exacerbated by a demographic tidal wave, as millions of new retirees turn into yield pigs, turning costly houses into income.

There’s little doubt the US recovery will continue, whoever sneaks by Tuesday night. Anyone betting against it, or its currency, will get spanked.


#1 Smoking Man on 11.02.12 at 8:15 pm

” Anyone betting against it, or its currency, will get spanked.”

Something tells me Garth will be spanked all week end by the gold bugs for this post. :)

#2 Nukester99 on 11.02.12 at 8:15 pm

Well, NOT following what Mr. Market says will always make you better off in the long run. Good article Garth.

#3 TurnerNation on 11.02.12 at 8:16 pm

Those realtors that own gold are doubly paniced today…

#4 Ferrari on 11.02.12 at 8:16 pm

“He second…” The second? :)

#5 T.O. Bubble Boy on 11.02.12 at 8:17 pm

Wow – down from 5%-10% to ZERO.

Garth – you’re just asking for the gold bugs to spam you all weekend!

#6 mel in victoria on 11.02.12 at 8:23 pm


May I offer the following comments re what happened today in the precious metals market and let’s not forget the North American stock markets also got hit . And tomorrow the asian and european markets will likely fall in sympathy….Technically north american stock markets are also at risk of much more downside..I personally hold only abt 20% of my assets in the pm’s …metals as well as stocks and etfs..

Yep,pretty ugly day for the precious metals on Friday…$GOLD&p=D&yr=0&mn=10&dy=0&id=p66172062397&a=204032049

But for the long term holders…..a minor blip..$GOLD&p=M&yr=10&mn=10&dy=0&id=p10791311449

However, don’t even think about getting into the precious metals markets unless you have steel nerves,years of experience managing high risk as well as the right psychological temperment to handle gut wrenching days like this one…..even then keep your investment minimal. There’ll be many more and far worse days than this one before the precious metals bubble out… I suspect a lot of people, including a lot of rookie MBA candy assed fund managers, got scared… panicked and sold today.

#7 Keeping the Faith on 11.02.12 at 8:23 pm

You know what I say to gold bugs? ….RAID!!!!!!!

#8 DM in C on 11.02.12 at 8:27 pm

Cue the gold bugs/bullion bunnies to take over the comments section all weekend…. starting in 3…. 2…..1

#9 Canadian Watchdog on 11.02.12 at 8:28 pm

“The billions being created are going to buy government bonds and support the banking system.”

Buy bonds and drive yields down to what? 0%? Pension funds and insurance companies are already broke.

#10 Paully on 11.02.12 at 8:34 pm

If the bugs sell all of their gold, is it still okay for them to keep their tinfoil hats?

#11 Victor V on 11.02.12 at 8:38 pm

Benjamin Tal, deputy chief economist at CIBC World Markets, said the pullback in sales and decisions by builders to hold off construction is probably good for the market.

“It is exactly what we had been expecting, some cancellations,” Mr. Tal said. “Supply starting to react to demand, that is a functioning market and the way it should be.”

In the interim, condominiums in the pipeline continue to get built. There were 207 projects with 56,336 units under construction in the metro area. It was the eighth straight quarter in which apartment construction starts have outpaced completions.

Mr. Tal expects downward pressure on price. “Demand will fall faster than supply; supply is not as flexible as demand,” said Mr. Tal, adding prices have already started to fall in the luxury segment of the condo market.

#12 metal-nut#756 on 11.02.12 at 8:47 pm

1. Garth: “Anyone who listened has lost 11% of their money, and it’s not coming back.”

– After gaining 500% since 2001 (average 15% per year, beating ALL of Garth’s tips combined – YEAR AFTER YEAR), 11% is just a *very* small bump in the road.

2. GARTH “This week gold stocks like Barrick tanked ”
– Physical Bullion is not gold stocks. Gold stocks have NOT performed well at all and won’t continue to. Input costs too high (oil has quadrupled), Massive gold ETFs stealing investor $$ that would otherwise go into gold miners (especially juniors). Stay away from gold stocks! ETFs are ok for now, until the SHTF, then your account will go to $0 as you can’t transform your ETFs into rehypothicated physical gold.

3. GARTH: “Bullion crumbled and oil prices swooned because they are priced in US dollars, and the greenback soared”
-Most physical gold investors I know are in it for the long haul (multi-year), not visiting the coin stores to buy AND sell every other month, let alone day. Physical gold forces discipline – more effort to liquidate than clicking a mouse button. Your comment is based on today’s market action. Gold lost 2.3% WOW… NOT!

4. GARTH: “On Friday, Obama won. The dollar rallied.”
– Last I checked, the election is on the 8th of Nov, not 2nd. It’s not over till it’s over, but even if Obama wins, which may very well occur, it just means more of the same in the past 4 years. Since 2008 Gold has nearly DOUBLED! And that was before entire countries were going bankrupt.

5. GARTH:”Thirdly, bullion bunnies love to spread the myth of hyper-inflation, arguing that all this government money-printing represented by central bank spending will surely make paper money worthless, and gold shine. It’s not true.”

-That may be true of many gold bugs, but not major gold investors. I agree, there will be no Hyper-Inflation in the forseeable future (I call until at least 2020) for the US dollar. HOWEVER… and this is a BIG *H*O*W*E*V*E*R… We will see a US Bond collapse prior to 2018, which translates to US high inflation due to USD devaluation due to massive Treasury bill selling by foreign nations. It’s all a confidence game, and the Fed just went all in with QE3 (aka. QE-infinity!). This bond collapse MAY be pre-ceeded by a new IMS (International Monetary System) wherein all major fiat currencies are backed by a basket of currencies (Wikipedia: “SDR”). SDR’s will highly likely include a portion (15% ? 20%? 40%? of gold backing). The days of the US dollar hegemony are counted in terms of being a reserve currency. The Euro is not a real currency (no fiscal union + no Euro-bonds), and it’s only another fiat currency. Yen/Japan is in a worse position, GBP was last century’s reserve currency (so it won’t be again), Swiss Franc is too small a forex market and nobody trusts the Chinese.

6. GARTH: “Suddenly the numero uno reason to hide yellow wafers in your sock drawer goes poof.The pros know this. They’re bailing.”

WRONG! George Soros and John Paulson both just added to their gold positions in August 2012. Rencently Germany, Venezuela, Ecuador, Netherlands and several other countries are asking for their physical gold BACK from London, Paris and NY. Central Banks are NET buyers of gold since 2009 (#1 reason to hold gold – the guys that can print money, are printing it and buying gold). The smart money is getting into gold, not out. China has gone from a gold exporter to a gold importer and Russia just announced they added significantly to their gold hoard.

7. GARTH: “There’s little doubt the US recovery will continue”. In nominal terms .. maybe. In real terms (inflation adjusted), it has gone NOWHERE for 10 years. The US is stuck in a 4% GDP gap trap that it can not close, even after printing TRILLIONS.

Garth, you are right on Canadian real estate, but wrong on gold.

#13 Bigdaddy on 11.02.12 at 8:48 pm


Just how long will be experience deflation of assets in Canada?

5-10-15-20 or more years?

Please look into your crystal ball for us all…

#14 Smoking Man on 11.02.12 at 8:53 pm

My son’s cowboy song dedicated to me, he tried to merge it with Charlie Sheam. Big mistake, 200 hits lol. he should have just followed me in Vegas after midnight with a vid camera.

He dropped his music , to focus on his carreer. Door to door sales men. Ahhhh Kids

His other songs are great.

After a few drinks crank it, enjoy

#15 Suede on 11.02.12 at 8:54 pm

DUST up 12% today (Gold stock bear)

Nevermind HAM, Vancouver definitely has yellow fever when it comes to gold stocks

#16 DaleFromCalgary on 11.02.12 at 8:55 pm

I got my physical gold years ago, just as I bought my house years ago. A 2% correction is meaningless in the long run. Everything got knocked down today because insurance companies have to pay out for Hurricane Sandy. The U.S. dollar went up because the claims are paid out in that currency. Don’t confuse short-term panics with long-term fundamentals.

Just a reminder that gold before the Panic of 2008 was $900, then fell to $600 during the collapse, and is now $1,775 for the physical and $1,675 for the fictitious paper options and futures.

Before the Panic of 2008, the TSX was 15,000. Now it struggles to stay above 12,000. Anyone who had $1,000 in gold before the Panic made money. Anyone who had $1,000 in Canadian stocks has never regained their loss.

Physical gold is not an investment. It is insurance. I know that my 10% position in gold coins will still be worth something years from now. The only losers in gold will be those who panicked like you did today.

#17 Wofenstein on 11.02.12 at 8:56 pm

From Bill Gross of PIMCO:
“If growth cannot be boosted by monetary policy, and fiscal policy is in the hands of a plutocracy more concerned about immediate profits as opposed to long-term vitality, then no Genie or Flavor Flav with a magic clock can make a difference. If, therefore, real economic growth is stunted in the United States and globally, then portfolio strategies should acknowledge bite-sized future returns and the growing risk that the negative consequences of misguided monetary and fiscal policy might lead to disruptive financial markets at some future point.”
I just can’t see what fundamentals, especially asset deflation, paint a rosy picture for equities.

#18 Marco from Van on 11.02.12 at 8:58 pm

I’m going to look forward to comments that add to the theme of the post today, looking forward to critical thought that will help me increase my knowledge in all matters regarding the effect of real time events on the liquidity of specific asset classes and how staying ahead of this is critical in planning diversification of a portfolio.

I’ll avoid the barblings of alcohol induced prose, any references to global warming, then ensure I am not concerned with the impending end of the world as we know it, not too worried about Agenda 12, will be impervious to any emotional outburst on how any of the political parties are the re-incarnation of pure evil, and really be interested, from the back of the class, in a highly intellectual discussion on the subject of this post.

Funny though – I have just joined the “dark side” in airing my totally unrelated opinion – more power to you all and may the pot be stirred!

#19 espressobob on 11.02.12 at 9:03 pm

Like many have said, When PMs are going up you never own enough and when they tank whatever you own is too much.

#20 DaleFromCalgary on 11.02.12 at 9:08 pm

Re: Calgary housing. The CREB was having an orgasim today because September sales and prices were up in Cowtown. Meanwhile, the University City condo project continues to run full-page ads in the newspapers listing individual units for sale at deep discounts, but the list hasn’t changed in two weeks.

Today a couple I know who are in their fifties told me they were ignoring my advice not to buy. They just bought a townhouse condo (not the University City but an old project) for less than their current rent, including monthly fees and taxes.

Meanwhile, a house a few blocks from me still isn’t selling and has never been lived in since it was completed just in time for the Panic of 2008.

Just sign my name as Confused in Cowtown.

#21 X on 11.02.12 at 9:09 pm

Good blog entry tonight. I enjoyed the commentary.

#22 If you want to buy gold ... on 11.02.12 at 9:13 pm

… buy it as part of the ETF iShares S&P/TSX Capped Composite Index (XIC). It’s the safest way to invest in gold, but also keeps your portfolio diversified.

#23 Randy on 11.02.12 at 9:14 pm

All I want is dividends and low ETF volatility !!!

#24 futureexpatriate on 11.02.12 at 9:19 pm

Encouraging. Thanks!

#25 Smoking Man on 11.02.12 at 9:21 pm

I use to think Gartho was embellishing about hits he gets on the pathetic blog.

Well when I posted a link to my charts on my really, really pathetic blog. Holly cow, the counter was climbing so fast it almost broke.

So lets say, only 10% of his followers go to comments. and say only on in a few hundred post.

Doing the math, I would say Garth is right on the money with his numbers, maybe even under reporting numbers.

Message for my fans, it is much better to be rich and not famous, than rich and famous. You see when you have a sore back and need a massage, being not famous you walk in threw the from door:) wink

The amount of hits I got is truly scary,

Perhaps it’s time to lay low for awhile, on my blog anyway.

How did this happen, your a drunk, you talk shit, and people love you.

What a world :)

#26 peter on 11.02.12 at 9:24 pm

So a bank preferred is a good investment if we think real estate will plop and interest rates have bottomed? Don’t think so. Preferred’s are highly sensitive to interest rate moves and by any measure we are at historic lows in rates with a greater probability of rates rising than falling. Combined with the potential balance sheet damage a real estate correction will cause the banks makes a bank preferred a lousy choice to place funds. That boat sailed years ago.

QE to infinity is in full affect and the Fed has no way out. Does anyone actually think the fed can sell what it has bought back into the market? With trillion dollar annual deficits and 16 trillion in debt I’ll take gold over bank preferred’s any day.

We are witnessing a Keynesian financial experiment where the outcome is unknown, making ownership of some gold a prudent form of insurance.

I hope you know more about gold than preferreds, which are unaffected by bank profitability. — Garth

#27 Brico9 on 11.02.12 at 9:40 pm

Must be a slow news / RE day. Bash gold and the gold bugs are worked up. 200+ comments for sure. If the message is – do not buy at the top. I agree. It’s the same for all assets.

It’s actually not about gold, which is why this is so much fun. — Garth

#28 Eaglebay - Parksville on 11.02.12 at 9:41 pm


What is the difference between a Harley and a Hoover ?
The position of the dirt bag.

Why is divorce so expensive?
Because it’s worth it.

What do you call a smart blonde?
A golden retriever.

What do lawyers use for birth control?
Their personalities..

What’s the difference between a girlfriend and wife?
20 kgs.

What’s the difference between a boyfriend and husband?
45 minutes.

What’s the fastest way to a man’s heart?
Through his chest with a sharp knife.

Why do men want to marry virgins?
They can’t stand criticism.

Why is it so hard for women to find men that are sensitive, caring,
Because those men already have boyfriends.

What’s the difference between a new husband and a new dog?
After a year, the dog is still excited to see you.

What makes men chase women they have no intention of marrying?
The same urge that makes dogs chase cars they have no intention ofdriving.

A brunette, a blonde, and a redhead are all in Grade 9.
Who has the biggest boobs?
The blonde, because she’s 18..

What’s the difference between a porcupine and a BMW?
A porcupine has the pricks on the outside.

What did the blonde say when she found out she was pregnant?
‘Are you sure it’s mine?’

Why do men find it difficult to make eye contact?
Breasts don’t have eyes.

What would you call it when an Italian has one arm shorter than theother?
A speech impediment.

What’s the difference between an Australian zoo and an English zoo?
An Australian zoo has a description of the animal on the front of thecage
along with a recipe.

How do you get a sweet little 80-year-old lady to say the F….. Word?
Get another sweet little 80-year-old lady to yell *BINGO*!

What’s the difference between a northern USA fairytale and a southern
A Northern fairytale begins ‘Once upon a time..’ A southern fairytalebegins
‘Y’all ain’t gonna believe this shit..’

#29 T.C. on 11.02.12 at 9:42 pm

Geez, last spring Barry was going to “romp” to victory.

Now the election has become a “squeaker” for the killingest president evah:

Gold, oil, stocks will tank just like real estate because these become over-valued, particularly as QEternity (almost free money) is pumped into them.

This is not happening because Bam Bam may or may not win an election.

The job creation in the U.S. are part time jobs as employers scramble to hire people at less than 30 hours a week to avoid the new O’bummer-care provisions. This is a further gutting of the American middle class.

I think R&R is going to win this one. I think the American people know it.

You should hope so or one day we could all end up on Hussein’s kill list.

#30 JO on 11.02.12 at 9:50 pm

As one of the lucky ones who started buying it at around 400/ounce, i have twice sold most of my gold. I was luck to have reduced my exposure down to 5 % bullion in the mid 1700s and think gold is still ok for 5-10 %. Yes it could spike to 1800-former highs in the next 1-2 months, but as long as it stays below its former high, the odds are for gold to decline in a major way into Aug 2013..i am hoping for 1300-1400. If we close above the former high, watch out…2300-2500 here we come…but i am with Garth here..the forces of deflation are the much greater force over the next year or two…yeh for savers..

#31 Nemesis on 11.02.12 at 9:52 pm

Well… That’s one scenario, OldPol.

However, if the PrivateEquityMissionary wins on Tuesday… well, he has pledged to start a TradeWar on his first day in office… If the IncumbentCommunityOrganizer emerges triumphant… there’s the “Pivot to Asia” and the FiscalPrecipice to consider…

Joint US/Japan naval exercises commence in territorially disputed waters on Monday.

#32 Mr Buyer on 11.02.12 at 9:54 pm

21 straight years of property price decline after the Real Estate bubble in Japan. Bright spots from time to time but still, 21 straight years.

#33 The end is nigh on 11.02.12 at 9:55 pm

How about the fiscal cliff?
The deficit of $13 Trill?
This will all go away, because of some pathetic, little positive news in the last couple of days?

#34 EIT on 11.02.12 at 9:56 pm

If we talk about gold, we might as well talk about money. So everyone brush up on your history:

I hate it when people say ‘Keynesian Economics’. Keynes is an acknowledged master, but his followers perverted his teachings. Just call it ‘Inflationary Economics’ and leave poor John Maynard Keynes alone. You know what they say: ‘blessed is he that has no disciples’, think about it Garth.

#35 Smoking Man on 11.02.12 at 9:59 pm

#166 Grim Reaper/Crypt Speculator on 11.02.12 at 7:39

Grim no need for a speedo, the gold never made it on the ship.

Just like Swiss air flight 111 near Halifax.

Wink:) I know people that know.

#36 Smoking Man on 11.02.12 at 10:03 pm

Correction, on last post, its was diamonds, I have gold on the brain for some reson

#37 Pr on 11.02.12 at 10:03 pm

No, the precious metal market is rig: 192 Million Ounces of Paper Silver Dumped on Market in 10 Minutes On NFP Release!

And CFTC do…nothing!

#38 No Gold knowledge on 11.02.12 at 10:03 pm

Garth…your good at providing stats for the Real Estate market…..but your a ‘know it all’ on Gold too? really….so gold goes to $1,900 and you claim to be a top caller……so when it goes thru $1,900 will you shut your trap on trying to call the Gold price………you state good info and reason for not owning R/E yet no evidence on why or why not to own Gold…..sheeesh…… poster has blogged here already some evidence of who’s buying yadda yadda yadda …maybe you could provide a seminar to the Soros and Paulsons, oh and Bill Gross who you give credibilty to once in a while…….. dont forget the Gov’s around the world too….. to take your advice…… they sure must be all wrong buying at these levels……….may I suggest you hold a seminar for them to……why is it those of who know about Gold are discounted and yet those who opine on dividend paying stocks are the know it alls….in fact Gold has provided a more than decent return….I just don’t get it…..its your blog…and your the good guy……and thats that …..FYI gold stocks just started paying dividends in the last 1-2 years……yes paying dividends……hmmm….and in 2-3 years I suspect a guy like you will own 1 or 3 of those miners……..please dont tell me when this happens please….I’ll puke …………..we are just some gold investor who ‘knows’ we ‘knows’…..and made a wack full of cash over the last 10 years…..why is it that others claim we are gold bugs with a negative connotation and raking in long term profits…you know – the same long term investment attitude you espouse to people who invest in dividend payers…..Long term,not one day, one week, one month, one year……….then why the advertising of a short term decline in Gold price?…. stay being a hero on what you know and can support… we who invest in gold are giving a negative connotation of being a ‘gold bug’ as if we are blind to the investment……..-are you then a dividend bug?
don’t use Barrick as your battering poster child because they have a mine issue and the stock tanks……many dividend payers have the same fate once in a while….. we know the reason why Gold has gone from $250 in 2001 to the $1,675 today…can you recant the reasons? no no really some educated reason Garth ? you know….the same analysis and back up you give on the R/E market? – when it breaks through $1,900 …..maybe you can ask some us why……you know when your open to knowing…… Oh boy….I can here the slammers getting ready to hit their keyboards……..whoa boys and girls whoa….dont envy us who have made a whole lotta monies…….we dont envy you…….we support your profit making opportunities, yet you slam ours……go figure…..

Smart investors maintain a weighting for all assets. When one goes ‘overweight’ because of price gains, you harvest them. When one goes ‘underweight’ as prices fall, you acquire. Most metalheads buy, then hold for Armageddon. This is why they end up with rocks, not profits. — Garth

#39 alien on 11.02.12 at 10:19 pm

Insightful speech/lecture/presentation about the demise of the middle class by Elizabeth Warren

She addresses the decline of the American middle class; however, her points can equally apply to Canadians, although Canadians have a different health care system than our southern cousins.


#40 Gregor Samsa on 11.02.12 at 10:20 pm

The “wageless recovery” in Canada:

Nobody has any real money in this country, just debt.

An untrue statement. — Garth

#41 Canadian Watchdog on 11.02.12 at 10:21 pm

#31 The end is nigh

“How about the fiscal cliff? The deficit of $13 Trill?”

Garth says kick it and don’t worry about it, even through it will cost them another downgrade.

#35 Pr

It’s called hedge funds and HTFs making profits. Futures have always been paper contracts, that’s why it’s called a futures market. It’s a two way market, so once and while turn your charts upside-down and bet the other way.

#42 Jsan on 11.02.12 at 10:21 pm

Canada Housing Slump: Flaherty’s New Mortgage Rules A Scapegoat For A Much Bigger Problem.

Malcolm Hamilton – A Simple Sanity Check on Housing Prices.

And then once again tonight I watched the realtors being paraded on GlobaltvBC once again trying to put lipstick on the Vancouver real estate pig.

#43 alien on 11.02.12 at 10:22 pm

The Elizabeth Warren link should be:

#44 Smoking Man on 11.02.12 at 10:29 pm

#40 Gregor Samsa on 11.02.12 at 10:20 pm

Not tax farm wage slaves, your right they don’t have loot.

Now the hot dog vendor on wellington street who doesn’t wear deodorint, word is his looking to buy a cottage in Muskoka.

#45 Form Man on 11.02.12 at 10:32 pm

#151 DA yesterday

I do not recall saying the Kelowna market was currently tanking; that has already happened. What I did say was the market appeared to have bottomed, but the prices would continue falling until MOI is below 6 or 7.

I remain of that belief.

If you want an honest view of the current Kelowna market look at posts #149 and #164 from yesterday.

It makes me sad to see the damage that has been wrought by cheap money and irrational optimism.

Sopa Square should never have been started. Now it is half built and a lot of people have lost a lot of money. No winners.

Time to stop the denial DA. Its never too late………….

#46 OkanaganInvestor on 11.02.12 at 10:39 pm

All looks rosy the week before Obama’s election. Wait a week and watch what happens. Speaking of gold, here is a short assessment from Doc Willie:

“My firm belief is that the Gold Wars have reached a new level, where Germany will be disappointed when it learns the gold is gone. To be sure, big distractions and absurd excuses will be offered. The pressure is on. The Dutch have joined the movement in making demands on London and New York. The call to the corrupt fortress is plain: WHERE IS OUR GOLD?? Maybe like with Jericho, after several calls the walls will fall. The irony is thick, since for 20 years the Western leaders have proclaimed gold as a barbarous relic that pays no yield, a dead asset. So the Germans with Dutch echo want a full accounting of their prized so-called dead asset, which in the end will provide salvation when the new monetary system is put in place. That system is ready, with full trade settlement foundation. It awaits the monetary system full collapse.”

Oh, jeez. — Garth

#47 Jounce on 11.02.12 at 10:42 pm

Weak hands sold, while strong hands bought. Bullion banksters organized a whipping to goose the US elections and US dollar.

No surprises here, just another gift from the Bernake cult.

I love having a sale on sound products. Bought more gold today … just cause I was in the mood … Garth’s admonitions not withstanding.

You still haven’t figured out this is not about gold? — Garth

#48 Jimster on 11.02.12 at 10:43 pm


I think you are confusing financial collapse and economic collapse.


#49 Canadian Watchdog on 11.02.12 at 10:50 pm

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#50 City Slicker on 11.02.12 at 10:51 pm

2 states were not included in the jobs numbers, California being one of them, and will be adjusted AFTER the election. Geesh and golly skipper how coincidental and convenient for the Obama administration.
And profits for miners have all be up Q3 as the numbers roll in, except for Barrick due to isolated problems.
I can go on and on here but won’t and will let price of gold do it’s own talking shortly after the election. As usual Garth you amaze me with your gold analysis. But thank you for your real estate advice, it’s why I come here.

#51 squidly77 on 11.02.12 at 10:54 pm

The problem with Goldbugs has always been the same – They don’t know or they simply are not able to sell the stuff when it spikes. Silver was $45 a year ago, and guess what, the silver bulls held the metal and watched as it swooned 33% to date.

Same thing with Apple, AAPL was so dead a year ago, yet people continued buying the future NTFX all the way up to $706 a share, today its in the $590 range. Its dead money.

Same thing with real estate, here in Alberta the realtors are wearing pink and green pom-poms jumping up and down belching that Alberta will be the next world Oil super power and claiming that prices will rise forever and forever. Will they will, at least until they don’t.

What people cant see is the obvious, Edmonton is down 20% from 2007 and Calgary is down 15%, those losses have occurred while the rest of the country has been in a house price super inflation boom.

Albertans will watch much like the AAPL and Goldbugs have as their their net worth and their assets get brutally and violently savaged.

Its no wonder and certainly not rocket science why the rich get richer and the poor get poorer.

#52 Inglorious Investor on 11.02.12 at 10:54 pm

If the less financially informed among us listen to intently to the various opinions offered by various talking heads on various media outlets, they risk invariably stumbling away so confused as to not only forget which way is up, but even forget what ‘up’ means.

Here’s the thing. If one prognosticator forecasts the price of a certain asset will rise, and one predicts it will fall, who is correct? Maybe both. How? Time frame.

For example, let’s say a well-respected financial expert like Garth Turner says the price of gold will decline, but another well-respected expert, like Don Coxe says gold is still in a super cycle bull market. Now let’s say over the next year, the price of gold declines to, say, $1200/oz. But over the next two years gold goes to $2500, which of these two experts was correct? Well… both, right?

You see, too many of us fall victim to the tendency to extrapolate current trends indefinitely into the future, as if once a trend is recognized it can only but last forever. But economic conditions are constantly in flux. In fact, change, and rates of change are at the heart of economic analysis, and economic metrics only make any sense when it is understood that they are always relative and always changing. This is why prices can increase while supplies also increases. Or why inflation can spike while employment collapses.

Back in 2007 when the price of oil was flirting with $100, I told family members at a gathering that I would not be surprised if oil fell back to $40. None of them could accept that it was even a possibility. The trend was up and there was no stopping it. Yet, perhaps they forgot that as recently as 1999, a barrel of crude was as cheap as 10 bucks or so. And in the early ’70s crude prices spiked to over $40. I was not making a prediction. I simply understood that oil prices can experience extreme volatility.

Today, on BNN they tried to explain the drop in oil prices as a result of reduced refinery capacity due to Sandy. Yet, how many times have they explained an increase in oil prices for the same basic reason. By the way, the spot price for gasoline was also down today. But they did not touch that one.

In short, we humans love to rationalize in order to explain what is happening around us. But we rationalize with a bias, such that our rationalizations support what we want to happen. And of course, one cannot forget that timing plays a key role. That’s at least partly why two intelligent individuals who have different world views can both be correct when making opposite predictions on the same thing.

#53 chaser on 11.02.12 at 10:58 pm

Only fools believe those job numbers.

#54 lord lucan on 11.02.12 at 10:58 pm

Going back 30 years, the historical seasonality of gold has been to rise during September, with a subsequent correction in October.

This fall, gold has followed this historical trend, with the metal climbing throughout the month of September to reach a high of $1,790 an ounce on October 4, only to have a normal correction to $1,701 by October 24.

This decline typically comes prior to the Hindu festival of lights, Diwali, which begins in November.

(and the Indian/Chinese markets are major players in gold)

Unlike housing, the supply of gold had radically diminished.

That’s the the “elephant in the room” — new finds have become elusive.

Beginning in 2000, gold companies have experienced production remaining flat, even declining in some years. In 2008, mine supply of gold fell to levels not seen since the early 1990s.

It can be argued that we have hit ‘peak gold’.

According to CIBC World Markets, the replacement cost for an ounce of gold is now $1,500, with $1,700 as a sustainable number.

Cash operating costs eat away the most, at $700 an ounce, while sustaining capital, construction capital, discovery costs, overhead and taxes eat up $800.

At the October 24 gold price of $1,700 an ounce, only $200 is left over as profit, says CIBC.

A another trend is the reemergence of emerging markets central banks as buyers of gold.

So – demand up, supply down.

With increasing purchasing power in places like Asia, demand will continue to rise.

My advice – buy on the dips.

Diwali. This is a riot. — Garth

#55 will on 11.02.12 at 11:02 pm

I got my preferred 3rd quarterly dividends the other day. Did yous get yours?

#56 squidly77 on 11.02.12 at 11:04 pm

Should nave read NFLX

#57 Tomavitch on 11.02.12 at 11:24 pm

#52 – Great insight!

#58 Inglorious Investor on 11.02.12 at 11:28 pm

I am agnostic on gold, just as I am agnostic on any asset.

That said, I believe people should try to put aside their biases and think truly objectively about gold. Once you’ve done that, think about the fact that central banks all around the world hoard gold.

Now, keep in mind that central banks are the masters of fiat currency, and the mongers of debt. The very currencies they create are ostensibly backed by nothing other than the faith and credit of their host governments, and that that faith and credit is predicated on the host governments’ ability to collect taxes from their respective peoples.

Even after the US repudiated Bretton Woods and ceased gold backing of the dollar in ’71, central banks continued to hoard gold. Levels have reportedly fluctuated over the past four decades, but they have never given it up. And recently, the Germans are getting antsy about not having their own gold in their own possession.

Even if you believe the conspiracies that the gold in such places as the repository at Fort Knox or the New York Fed is not even there, the government and Fed certainly don’t want anyone to know about it.

So ask yourself: If money is debt and currencies are only backed by government fiat, why do central hold gold, or at least claim to? And, why are they reportedly increasing their bullion holdings? Why don’t they hoard copper, or crude, or lumber? Surely, if gold is just a yellow hunk of useless rock, it makes more sense to store things that have actual economic value?

Now, ask yourself: Hmmm… if central banks (the institutions in charge of our very currencies, the life blood of our economies, and the measure for all economic values––hold gold, might it, perhaps, possibly, make any sense for me to hold some too? I wonder…

Central banks maintain reserves of US dollars. Gold is a diversification, denominated in the reserve currency. — Garth

#59 daystar on 11.02.12 at 11:35 pm

I quite agree with what you are saying here Garth. I just want to add a few things to what you are saying.

Japan had a disasterous month economically:

Imports rose by over 4% as corporations raced to avoid a new energy tax and exports fell particularly with cars exported to China as a possible trade war brews sparking a whopping 10% yoy drop in exports and speaking of China:

… China has prospered at Japan’s expense but elsewhere in Asia its still sluggish whether its south Korea, Taiwan, India or elsewhere. None of this is good for the world’s 3rd largest economy in Japan and speaking of jobs:

… Europes unemployment situation just plain sucks. It doesn’t matter the economy whether its the U.K.:

or Canada:–real-gdp-contracted-by-0-1-per-cent-in-august-statscan

… things aren’t so good out there. So… in short, one of the few highlights globally is the U.S. economy. The U.S. could quite simply be the only deciding factor keeping the world slipping into a global recession (not to be confused with a GFC, readers). Europe is already there, Japan looks to be on its way, China’s problems aren’t slight, would readers be surprised with the U.S. dollar prospering on the trade and currency weakness of other nations and thus weakening gold? Same goes with base metals and energy for that matter. Is anyone surprised at this outcome?

I just wanted to add as well that the U.S. pursuit for energy independence is for real (there are more drilling rigs drilling in the U.S. right now than the rest of the world combined) so what I’m seeing is world weakness in economies that chokes demand for commodities, the prospects of energy independence and economic strength in the U.S. built largely on the failings of other major economies and as such, weaker demand for commodities including energy (save agriculture).

Base metal inventories are building, the U.S. dollar is strengthening and this spells bad news for all metals including gold and lets not forget what happens when GWB tax cuts expire in the U.S. . Should that happen, what happens to golds argument for strength based on fiscal weakness? It goes “poof”, thats what happens. Gold could be headed for a route by years end unless… Romney wins, brings in 20% tax cuts, increases defence spending and runs up more trillion dollar deficits. If Obama wins, we could still see a fiscal cliff realized in congress, a sluggish 2012 as the balance sheet readjusts but strong growth coming from the U.S. in 2014, 2015 and beyond making believers of us all and putting gold in its place (where it should be).

Regardless of who wins, I concur Garth, the U.S. economy recovers but one party will do it on more debt than the other and at least as far as the Whitehouse is concerned, thats the only thing I can disagree with Garth in terms of what you said here (going back quite a while, actually). Why again? Romney would spend a great deal more on defence, introduce 20% tax cuts and possibly start another war this time, in Iran and that means, well… strength in energy and gold and does the world really need that? Nope! We need the guy who believes in healthier more productive americans (thats what social spending in the right places will do), the guy who would provoke a U.S. fiscal cliff from congress (fiscally their long term economy can’t afford 20% tax cuts, they have to bite the bullet), the guy who is already turning the U.S. back towards energy independence instead of just talking about it and the guy who avoids costly unnecessary wars and defence spending not just for americans but for us too so… yeah… the future of gold will be different from what I can tell depending on who is the next president and I’m investing accordingly depending on the outcome.

#60 coastal on 11.02.12 at 11:44 pm

Cherry picking the worst day in 4 months for gold is not exactly the proof of anything. I don’t own a single ounce of gold but the it will continue it’s journey upward along with gold stocks. Gold is the only bubble game left in town and it isn’t even half way there.

Take a look at Apple and Google stock the last month, billions lost. Sure fire signs the largest drivers of the US market the last few years has peaked.

#61 Telecon on 11.02.12 at 11:46 pm

Everybody put all of your money into bank preferreds because apparently they bear ZERO risk while providing solid income and consistent capital gains. I think if anyone is wearing a tinfoil hat, it’s Garth.

Never put all your money in any asset, obviously. About 20% in a variety of bank preferreds is fine. There is risk in everything, but these are stable, dividend-producing assets with proven low volatility. They are bought for income, not capital gains. Stop embarrassing yourself. — Garth

#62 Gman on 11.02.12 at 11:47 pm

I find gold to be really emotional. I have family friends in Iran, where the currency has been decimated by 80%. I true crisis if there was ever one. Guess what the hard currency is? Not gold but US$’s. Explain that to me anyone? When the poop hits the fan, those in crisis go to the most liquid currency around, not gold.

#63 lord lucan on 11.02.12 at 11:49 pm

Indian gold buying goes up at festival time. Up 25% according to Bloomberg.

Google India gold buying season and see what turns up.

#64 FTP - First Time Poster on 11.02.12 at 11:50 pm

Garth – I have to once again respectfully disagree with what your stance is on the US economy and its “return to normal”. While I have agreed with your stance on RE since the beginning, there is no empirical data to support a return of the US as an economic powerhouse, other than the greatly fudged jobs report – aka government propoganda.

I never trust just one data set or one source of information when making financial decisions and neither should anyone else. I would encourage you to watch just the first 10 minutes of Chris Martenson’s video as he presents empirical data based on a wide data set and puts it all together succinctly throughout the entire hour and ten minute video. The first ten minutes gives you a taste of what has changed. You can see it here:

To assume that because he was invited to speak at a gold conference and can therefore be dismissed as a nut would be a mistake. He’s a scientist and looks at what empirical data is telling him. His arguments are well thought out and succinct. I’d suggest you watch just the beginning and decide if your take on the US and its recovery really is well founded.

#65 kreditanstalt on 11.02.12 at 11:53 pm

Nobody “buys” gold with the idea of “selling” it at some intermediate high for paper currency. Gold is a wealth preservation vehicle: over the long term it will beat inflation with minimal risk.

And what’s THIS? “…advocated having precious metals as part of a balanced and diversified portfolio”

Sounds like a mutual fund salesman…

(re $1900/oz) “…it’s not coming back.”

That juicy statement – and this entire shortsighted post – have been bookmarked for the not-too-distant future…

#66 MC on 11.02.12 at 11:55 pm

Instead of whining, why didn’t anyone just short Gold. Anyone with half a brain, could have seen it was in a downtrend within the last few weeks. A local tripple top anyone?? Jeez so simple, so profitable

#67 Barry in Pickering on 11.02.12 at 11:59 pm

Regarding gold Garth….

Your error is looking at gold in USD. What happened this week, is the USD went up. Gold therefore fell in USD, but if you look at in CAD, gold was about flat for ther week.

Yes, gold is most commonly valued in USD, but if you buy it with CAD, that’s what you should be looking at…

Why not in terms of Vancouver real estate? — Garth

#68 peter on 11.03.12 at 12:09 am

“preferreds, which are unaffected by bank profitability”

Remember when you took the CSC they explained how preferred’s work? “Retaining characteristics of both an equity like component and bond component”? Ring a bell? They absolutely do get affected by market moves of the issuer including the issuer’s credit rating. A blown balance sheet &/or credit downgrade (which will happen if housing implodes the way you say), absolutely will impact bank preferred’s value.

Wrong. A bank downgrade, as inconsequential as it will be, won’t affect the capital value of preferreds, which are in hot demand, and certainly will not alter the yield. Textbooks are cool. The real world is better. — Garth

#69 Groundhog Day on 11.03.12 at 12:12 am


#70 Nostradamus Le Mad Vlad on 11.03.12 at 12:14 am

“But what the good jobs numbers on Friday did was remind everybody when all the government largesse will stop.” — The good jobs numbers always come from the feds., and (for my part) long ago stopped believing them. They’re politicos.

“The immediate reason was a better-than-expected jobs report, as employers added 171,000 workers . . .” — Many sides to every story, Slowing Down Mind you, this link is from CNN (m$m), so the less said, the better plus Declining Incomes.

“This is part of the tectonic shift taking place beneath our feet.” — In more ways than one!
John, this one is for you “Remember a few months ago Obama was ‘working’ with Europe to keep it together until after the elections. After next Tuesday, we can expect dramatic events in Europe followed by a derivatives nightmare on Wall Street.” and One Month ’til ‘net regulations start; Basel III and gold money; #46 OkanaganInvestor — “. . . where Germany will be disappointed when it learns the gold is gone.” — Correct. See link — Germany’s Gold Poof! Gonzo; Bullish Traders Hoarding Gold; 12 min. clip US budget — half to military, half divided by everyone else; EZone Strike Nov. 14th; Obumbler 2/3 of jobs go to immigrants during his tenure; Rothschilds dial 911 “. . . and later Andrew Jackson, Abraham Lincoln and John F. Kennedy. The latter two were assassinated for trying to nationalize the Federal Reserve via the issuance of Treasury Department-backed (publicly-issued) currency.” As per Libya.

3:10 clip Obombanomics explained; Niche Player “Android has 75% of the global smartphone market.”; Burying J.M.Keynes and Economic Growth is not bought on by tax cuts for the wealthy; Filthy Rich? Headline says it better; UK’s PPP Plunging Pension Pots; UK shopping Comet collapses just in time for xmas.
43:41 doc. How beer saved the world. dOg be praised! 4:37 clip Pope St. Gored by the Als has begun frothing at the mouth again. Taken down by a meteorologist, no less. Junius, perhaps you can help him? After all, Al did state on national TV that the earth’s temperature was ‘millions of degrees’ in the crust and GW scam Incl. highly complex chart; Megaupload “All your cloud data are belong to us!” — Official White Horse Souse.; 3:19 clip Who owns the US? No Warrant needed for spying; EUSSR dictatorial arrogance Lotsa places in the world getting testy; Louisiana Sinkhole Large collapse confirmed; Iran “What? You mean that really is a nuclear power station?!?” — Official White Horse Souse”.; Siberia Home of the Yetis; Hotel of Doom May be true in NKorea; 1:43 clip Oldest town in Europe found near Bulgaria; Politicos Collective Intelligence gushing into Deep Space 9 3/4.

#71 Scott (GVRD) on 11.03.12 at 12:21 am

I must be pretty stupid. If this blog post was not about gold, what was it about? A hint at least, anyone?

#72 len on 11.03.12 at 12:24 am

hehehe – the moment they stop the printing presses is the moment I will sell – no sign of that for QUITE some time.

Not sure why the obsession with gold – it means nothing to the economy except it removes money from the financial sector’s churn so that is probably not good for FIRE – no wonder it is hated so!

Natural gas and oil prices are way more meaningful to the economy, at least in this resource based province – Alberta. Who cares about gold?

And one more thing, a paired trade of gold and us currency is looking pretty good in my portfolio!

#73 Tony on 11.03.12 at 12:25 am

The reason commodities tanked was the people in the know or have insider knowledge already know America is still losing jobs every month not gaining them. You’ll see what i mean when America is back in the recession they never came out of. The lies are all over for the next 4 years of the 5 year presidential term. The stock market will plumb new lows not seen since 1987. Commodities will hit lows not seen since the 1950’s.

#74 neo on 11.03.12 at 12:30 am

Hey Garth,

What you don’t understand is Gold cascading down is a precursor to equities following it. Why? Margin calls and redemptions aka selling your winners. Gold crashing = equities crashing. Be careful what you wish for…

Gold is correlated to equities? Gee, that’s what I suggested a year ago. Just another commodity. — Garth

#75 Tony on 11.03.12 at 12:31 am

Re: #53 chaser on 11.02.12 at 10:58 pm

I really wonder how many jobs America lost last month? A better question is did America have any positive job growth months this year. I really doubt they did. I expect unemployment in America to hit somewhere around 28 percent over the next decade.

#76 house burden on 11.03.12 at 12:35 am


#77 Blacksheep on 11.03.12 at 12:35 am

Marco from Van # 18,

“Funny though – I have just joined the “dark side” in airing my totally unrelated opinion – more power to you all and may the pot be stirred!”

Excellent post sir!

take care

#78 The Real Jimbo on 11.03.12 at 12:47 am

“bullion bunnies love to spread the myth of hyper-inflation”

For the record, I am one “bullion bunny” who holds gold and gold stocks because of their track records in deflation, not inflation. In the depth of the 1930s Great Depression, gold stocks took off and provided incredible returns. Why? Because their product (gold) was highly liquid and held up in price while gold company margins increased with lower operating costs (labor, energy, cap equipment fell in price). Gold performed similarly well in the deflationary periods of 1873, 1825, and 1772.

It turns out that investors facing spiraling deflation and debt contraction start to think, “Hmmmm… I need to preserve wealth in this mess. But can I trust my counterparty to remain solvent? At least gold bullion has no counterparty risk.” Today, the US is so in debt that any little black-swan event could result in the overnight destruction of confidence in fixed income investment because of counterparty concerns.

To believe that gold only performs in hyperinflation ignores history. Gold is a bad investment to hold in stable periods but a good one in hyperinflation or deflation. Do you think we are in a stable period? Me neither.

I’m not sure how you can repeatedly poke fun at a class of investment (and its investors) that has seen 12 consecutive years of increases.

#79 Tom from Mississauga on 11.03.12 at 1:27 am

Energy stocks now are a better hedge against inflation than gold. Energy companies are generating better cash flow and pay better yields.

#80 Saskatoon-Living on 11.03.12 at 1:29 am

Garth, totally disagree with this post…….. well, partially. This is not the first time gold had dropped by 2% in a single trading day. Most of the gold stocks didn’t trade that badly considering a $40 drop in price. I do believe you are misleading many readers here when you state that gold wasn’t a great part of a diversified portfolio from 2010 to present. If you would have been buying or averaging down since then, you would easily have a 25% + ROI, if not better. Which is far better than the 7% you post about. How about Yamana hitting 52 week highs in the recent days?? You would have been wrong to sell in 2010. I do agree that asset deflation is happening, but don’t lead the herd into thinking that gold is bad for a diversified portfolio. I believe by Jan/Feb gold will be touching $1,900 again. But what do I know, I’m just from SK. Keep up the great work Gartho!!

#81 Canucklehead on 11.03.12 at 1:36 am


#82 Ronaldo on 11.03.12 at 1:43 am

#22 if you want to buy gold –

”… buy it as part of the ETF iShares S&P/TSX Capped Composite Index (XIC). It’s the safest way to invest in gold, but also keeps your portfolio diversified.”

or if you really want to be safe you can buy it via:

CEF.A (you get silver as well) and MNT (Canadian Mint). Now if you want a safe silver play go with SBT.UN which is trading at a minus 1.2 percent discount to NAV after today. All trade on the TSX.

For those that have been scared off buying precious metals don’t count then out just yet. I personally see it as a great buying opportunity once again going forward but I would wait for a further drop in price which should occur over the next couple of weeks.

Even 10 or 15% of ones portfolio over the past 12 years would have gone a long way to preserving your wealth. Look upon it as insurance. Had you invested 10,000 in gold in 2000 and this was 10% of a 100,000 portfolio, even if the 90% returned you zero, your portfolio would still be up 49%. Had you invested the 90,000 in a good bond fund, this portion would have doubled. A 139% increase over the past 12 years.

There may not be much interest in North America (less than half of a percent own any pm’s), but China and India are gobbling it up as fast as they can along with other asian countries. Gold is still up 5% this year and silver 7.7% and we still have 2 months to go.

The TSX hit 10000 for the first time on March 25, 2000 (Nortel made up 1/3 of that).

Since that time we’ve seen the TSX climb to 14,468 on July 23, 2007, drop to 12132 on Jan. 21, 2008, climb to 15073 on June 18, 2008, drop to 7566 on Mar. 9, 2009, climb to 14252 on March 4, 2011 and drop to 11,177 on October 4, 2011……now over 1 year later it has a hard time hanging onto 12,500 having risen a mere 24% over the past 12 years. Gold on the other hand has had a nice steady rise over that same period of time and is up a healthy 490% and the poor man’s gold (silver) is up 510%. So, a 2.3% drop for gold today is not exactly something one has to be concerned about is it? The precious metals have been very kind to a select few over the past decade and I know that Mel in Victoria would agree, right Mel?

#83 Rentvester on 11.03.12 at 1:50 am

wow #52 great comment
thanks for the read

#84 Blacksheep on 11.03.12 at 1:55 am

This is not about gold. This is about whether you believe jobs will come back on mass, or not. Period. 150K jobs a month only holds things level. 300K in jobs, a month will be required for multiple years, to get the 70 % consumer driven economy back to substantial GDP gains. So… You place your bets and you takes your chances.

take care

#85 Blacksheep on 11.03.12 at 1:57 am


Solid post tonight.


#86 willworkforpickles on 11.03.12 at 2:03 am

It’s the smoke and mirrors game show south of the border.
Gold will ROAR back as it always does and sooner than many here may think.

#87 groovin123 on 11.03.12 at 2:03 am

The Fed is printing $85 BIL a month out of thin air.

I’ll keep the yellow metal in my portfolio thanks.

#88 Ronaldo on 11.03.12 at 2:12 am

#51 squidly 77 -”The problem with Goldbugs has always been the same – They don’t know or they simply are not able to sell the stuff when it spikes. Silver was $45 a year ago, and guess what, the silver bulls held the metal and watched as it swooned 33% to date.”

Are you even able to name even one of those “gold bugs” you speak about? Do you keep track of all the gold bugs? How could you even make such a statement? Have you not yourself taken advantage of this magnificent opportunity in the last 12 years to profit from this incredible investment? If not, you are the one that has missed out and now you make yourself sound like a poor loser. Too bad for you. By the way, I sold my silver at $49.44 for a nice 400% profit. How did you make out?

#89 Canuck Abroad on 11.03.12 at 2:13 am

Saying gold will NEVER see $1900 again is a pretty bold call, Garth. And a 2% move either direction is a tiny blip and can be ignored as far as long term trend is concerned. I think the greater concern re gold is that central bankers absolutely hate the idea of people holding it instead of stocks and bonds, and will move heaven and earth to keep its price down. So the big returns have probably already been made last decade.

Unfortunately, gold -along with the stock market- has been taken over by the central bankers and high frequency trading firms. Buy and hold anything is dead.

I happen to disagree with your “never again see $1900” call, but still would not hold gold long term because I know I would be fighting every central bank on earth. Gold is, however, a great thing to trade, certainly as good as any stock or ETF.

I also think your level of complacency is too high. European newspapers have been completely silent on the debt crisis this past week because all Europe is desperate for Obama to win. Nobody over here wants Romney and his band of nutters invading Iran. Doesn’t mean the debt crisis has gone away. Watch for it to spill all over the papers again as soon as the election is over. And this is not just Greece.

#90 cynically on 11.03.12 at 2:39 am

#29 T.C. – must stand for Truly Clueless! Obama for sure and that is his name, idiot.

#91 broadway skytrain on 11.03.12 at 2:39 am

from yesterday,
excellent post until this part…
“that plastic iphone/ipads/laptops/cell phones and their still-dead batteries matter not a whit during such disasters”———————–
nope, but if you happened to glance at any one of said devices in the preceding few days you saw it comin. all the gas you could cart away was avail for 3.95 or so. jerry cans too. no markup or lineup.

i live in bc and watched closely as the storm left cuba on a slow march north. for next 3,4,5? days the predicted track was for NYC. the predictions were right on.
there was plenty of warning.

#92 broadway skytrain on 11.03.12 at 2:41 am

171 disciple on 11.02.12 at 11:06 pm
Pope Benedict is played by actor Robert Blake


wow , dude you never fail to dissapoint!!!!

sure your are @hitting us.

#93 Duf on 11.03.12 at 2:43 am

Reading all these hot on gold posts, reminded me of a poem by Robert Service:

I wanted the gold, and I sought it;

Yet somehow life’s not what I thought it,
And somehow the gold isn’t all.

“You still haven’t figured out this is not about gold? — Garth”

Nope, they have not figured it out yet!

#94 willworkforpickles on 11.03.12 at 2:55 am

Bite on this one.
Volume not stimulus for a healthy stock market.
Obama = stimulus and low low volumes.
Romney = fiscal change and a return of investment risk taking and renewed volume in the market.
..Eligible voters sitting on the sidelines …. go ahead….Vote Romney…….for shit sake.

#95 Over in Australia on 11.03.12 at 2:59 am

“I yelled sell, and the metalheads screamed buy. Anyone who listened has lost 11% of their money, and it’s not coming back.”

I am happy to wager $1000USD to the charity of your choice that Gold will exceed $2000USD/Oz in 2013.

#96 martin9999 on 11.03.12 at 3:03 am

”gold fell $35 an ounce on Friday alone, 2% of its value” – gart

wrong dude, 2.13%

and guess what silver 4.2%

they both in oversold mode, should retraice some by monday before election


#97 martin9999 on 11.03.12 at 3:10 am

no offense, but i like romney better. as a canadian north american, invester, trader and citizen obama gives me scepticizem on my trades

we should be having an election poll:

lets start:
who is gonna [email protected]#$

#98 cynically on 11.03.12 at 3:12 am

#50 City Slicker – Y our comment about California’s job report not being included in today’s figures and thus being coincidental and convenient for Obama’s administration smacks of sarcasm. California always releases its figures exactly 2 weeks after the national figures by state law and perhaps those numbers might be very high coming from the largest state and would have been even more positive for Obama so save your sarcasm for something you know about.

#99 daystar on 11.03.12 at 3:16 am

I stumbled upon this link looking for stats on what the top 1% pay in taxes and what the top 1% owns in terms of wealth and the link is worth a read.

There are claims by some that the rich pay too much in taxes y’know… that the top 1% are paying way more than their share but the stats are saying that the top 1% in the U.S. owns 40% of all the wealth while the bottom 60% owns less than 3% of all the wealth. The bottom 40% owns .3% of all the wealth. I’m not saying this, this is from a U.S. senator.

Now… look at this first chart on the next link and note for moment how much revenue is generated in payroll taxes in the U.S.. Its pretty much the same as collected income taxes:

So here’s my point. Do the rich pay payroll taxes? To my knowledge, most don’t but all the other classes do including the working poor so the poor and middle classes pay a good deal more than propaganda would lead us to believe. Do the rich get taxed based on the percentage of what they own? Good God, no. Again, the top 1% owns 40% of the wealth and what did they pay if this link below proves correct?

Answer: The top 1% paid 16.9% of all income taxes collected. Now… the top 1% in america owns 40% of all the wealth but they paid 16.9% of all taxable incomes. (note the same link claims a 37% income tax level while Geitner claims its in the low 20’s. Who’s right and is this average tax rate the top 1% pay even relevant considering my next question?) Did the top 1% pay anything in payroll taxes? Very little unless someone can prove otherwise and its not hard to say why since most 1%’ers aren’t employees and what does this really mean? It means of the total tax revenue collected from the U.S. federal government that the top 1% actually paid around 9% of the entire federal taxes collected and yet, they own 40% of all the wealth.

Now I ask you all, is that currently a fair taxation system with equality in mind? There’s a demon (greed) walking around destroying systems. Ecological, financial, political, social, moral… and I can’t help all the individuals rich or poor out there slay this beast, we have to do it within ourselves for ourselves and each other but I can offer you a sword (truth) that helps put it to rest and it begins by valuing each other as equals and treating each other that way.

Ah…. one more link:

Again, note. Mitt Romney says 47% pay no income taxes (and yet true unemployment is around 15% so 32% of that 47% pay payroll taxes that overall, generate almost as much as income taxes do in federal tax revenue. How can a president wannabe ignore that fact? Again, check out the first chart below)

#100 martin9999 on 11.03.12 at 3:18 am

what you dont understand garth is that gold will be worth 2k probably by 2014. simple: deflation

reasoning?! stocks and etf’s will be star performers, and possible in a little bubble teritory.
real estate will be NOT an investment of interest.
the only asset for diversification will be comoditties/gold and people cannot forget its past performance that easy.

2k its still good lets face it

no emotion here

#101 John Prine on 11.03.12 at 3:21 am

What’s the difference between a porcupine and a BMW?
A porcupine has the pricks on the outside.

That was a Corvette originally…

#102 martin9999 on 11.03.12 at 3:29 am

#40Gregor Samsa on 11.02.12 at 10:20 pm

Nobody has any real money in this country, just debt.
and i thought me secretary was funny

look on your piggy bank cousin, what’s in there

#103 broadway skytrain on 11.03.12 at 3:33 am

#165 Silver on 11.02.12 at 7:35 pm

wow , congrats you really took the G-plan, good for you. talk about options. assesments/mill rates/comparables are someone else’s problems now! you will feel much better for it i think!

… and I smell a couple of monster box’s———???of cigars?

… has dropped $400,000.00 in the last year.
down to $450,000.00, I will bet on 350 – 400 or less at the end of the day… the 4500 sq. ft log house —————————
sounds expensive to heat – too bad you don’t have a chainsaw….

hope it all gets closed quickly for ya.

#104 Mike on 11.03.12 at 3:48 am

Thanks for that article. I couldn’t figure out why there’s been no hyper-inflation…now I get it.

But somethings still don’t add up. I guess we just have to live in the make-belief numbers world.

CBC reports that

‘It was the 25th straight month of job gains for the country’s economy, and there are now 580,000 more people employed than when Obama took office.’

and most economists agree the US needs 150K – 200K each month just to keep up.

Obama is well over 4 million short on that alone.

? How do they get away with it?


a colourful infographic for derivatives

it’s just that there is such a disconnect between what the MSM is saying versus all this absurd financial behind the scenes stuff. how could anyone know what going on

no predictions or criticisms though…just be happy and love your family.

#105 n1tro on 11.03.12 at 4:08 am

Always entertaining when Garth tries to rile the gold crowd. I think most of the gold people here are not the tin foil hat wearing types but decent investors who know more than what you (Garth) give them credit for.

As you say, the “pros” know when to get out and they did it back at $1900 right up until today. Are these the same “pros” that got out during the GFC or was the 40% drop in the market just made up of the little guys panicking?

Too bad the comments section can post charts or I can post 1 minute charts showing “pros” dumping 10000 gold contracts (1 million oz of gold) outside of regular market hours during periods of low liquidity in a span of a few minutes.

Now if you are a “pro” handling a big hedge fund and foresaw the gold “top”, is it logical to dump all your fund’s holdings outside of market hours where there is low trading volume in a span of 5 minutes?? Would it not be the smart thing to sell into strength as idiotic “gold bugs” pile into the gold frenzy so you, the “pro” fund manager, maximize your your company’s profits?? I would think so but what do I know.

The only reason I can think of for a million ounces of gold to be sold outside of market hours is to trigger stop losses and paint the chart that a “top” is in.

Yes boys and girls, things go up and down not just based on fundementals (asset deflation and dollar strenght) but can be manipulated. Gold manipulation?! I must be a tin foil hat person! Not! Gold manipulation is similar to the real estate board producing their seasonally “adjusted” housing numbers. If you can swallow real estate manipulation, why not gold or the employment numbers “tweaking” for that fact?

Time will tell if a top is in for gold but I’m sure most of the gold investors here unloaded some of their holdings near the top if they understand the cycles of how gold trades.

#106 Buy? Curious? on 11.03.12 at 4:33 am

Garth, I was going to post this yesterday but you know that people who post multiple times here are losers of Losers (Smoking Man, Eaglebay Parkside, Mr Buyer, I’m looking at you!)

First of all, what fool buys gold now ($1786 approx. per oz)? Are they hedging themselves against some type of societal collapse? Idiots. (Smoking Man, I’m still looking at you, you moron!)

Now for some real world stories. I was talking to this old couple and we talking about stocks and investments. They’re scared. Their biggest concern is end of life care. Old Age homes, an average home, is about $60k per year. For one person! Even if they sold their house and made a $400k profit, that may only mean 3 or so years in a old age home for the couple. What happens then? Many of their friends are getting nervous because their health is not getting any better and the stairs in their houses are becoming too much. They’re also beginning to sense that the market is about to tank and they can’t afford to wait out the housing correction. They are even talking about selling their jewellery, gold chains, rings, etc. The panic is about to set in.

#107 Freedom First on 11.03.12 at 4:51 am

Like your post Garth. I have always been leery of the 100% PM crowd. I believe in debt free, diversity, cash flow, cash, the age formula for dividing assets in……fixed income, RE, Etf’s with dividends, preferred’s, Reits, minimum of 8 assets, but better if more. and 5-15% in PM’s. Friends I have talked to, debt free with million $ dollar + net worth, all keep their 5-15% PM weighting. I ask them why, and they say it is insurance, they will never sell it, and if worst comes to worst, they have already wisely planned how to leave it to their kids and grand kids. It sounds good too me:)……..mind you, these folks are balanced, diversified, and liquid. Sweet:)…..100% net worth in 1 asset……..extremely foolish. No exception. PM’s to me are another investment…..not a religion.

#108 Nubbers on 11.03.12 at 5:29 am

SM #1, most prophetic and relevant 1st post.

I have put a link to this page in Outlook so that I will be reminded to see who was right in a year’s time.

#109 Canuck Abroad on 11.03.12 at 5:41 am

Not related to gold but sort of related to real estate…I’m thinking of moving back to Canada this year and was thinking Montreal might be kind of fun for 3-4 years. Spent a summer there 20 years ago and it was great. However, with the recent spat with Mina Barak and the STM and articles like the below (esp the comments), I’m a bit freaked out:

Are there any Montrealers out there, current or past, who can advise? My french is pretty crap but I have a flawless british accent if I need to pretend to be a tourist. Seems rents are super cheap, and with the PQ in charge, real estate prices should be rock bottom in a few years too? If I live in Westmount am I less likely to be hated by all my neighbours?

And Garth, will you be going to Montreal? I will fly over if so.

#110 mark on 11.03.12 at 6:37 am

CTV and Global reporting the rotten news in Vancouver. Particular focus on the hot potato condos now burning hands.

And oh god they’re pulling out the shared equity garbage now.

Other news I found, Prince George sales down 46% August 2011 vs August 2012.

#111 gmc on 11.03.12 at 6:49 am

In normal times????? I could see what Garth is talking about, after 2008 not really knowing what to do, I ran into Garth WEb page, funny enough on 321gold, he advocated selling real estate, and I believed him , and still do, but you see his prediction are spot on, but his timing is not, I sold my house, way too early, lost a shit load of gains, and bought some good old Canadian silver and gold coins.
I have since sold some and did very well but still hold onto most, really do not need to sell, and not sure what else to do.
The misses not understand the Garther, and many others decided that the best way to granite was via someone else, and I stand toasted, lost half of my wealth.
All I am saying is Garth is not always right, his advice, and I still believe him, cost me a great deal, .I do not want to blame him, How idid he know the game was going to be juice by the short elf from the blue side.
I sustained more damage from the real estate selling than buying precious metals.
Yes I still believe Garth, although I don’t get what he is talking about, Jim Sinclair had a bet of a million dollars that gold would be above $1600 by now, and everybody laughed at him but nobody took the bet, turns out he was right.
I read that the barbaric metal does pay interest, if you buy from the crimex and flip your contract at the end of the month some have been getting up 14% to flip their contracts, therefore making money on gold and silver.
I am incline to follow what Garth says but from what I am reading things are not OK with the world, and in normal times people would have gone to jail, but today it’s ok to steal from the pension funds, high speed trading, gang shorting, fraud on a massive scale, mortgage fraud, etc,,,,
My conclusion is nobody can predict what is going to Happen even you Garth, especially when we do not have all the facts.
How come guys like Mark Talibi, from Rolling Stones, Jim Sinclair, Jim Rogers, Marc Faber, Peter Schiff etc and many others write about the fraud and stealing and can get away with it, is there any truth to what they are claiming????? and if so , then who can predict the next move in anything I read the 150 million Americans are under employed and or simply out of work, is that TRUE????
So I will hold on to my Gold $460/oz, Silver $15/oz and my apartment, and MY JOB until something unfolds, but who knows of the timing, Garth was not right in 2008 to sell real estate, I probably lost 50% gains, but then again would I have sold today???
So you see maybe what unfolds is going to be what Garth is preaching today, but in the long term NOBODY KNOWS where things are headed.

#112 Racine on 11.03.12 at 8:13 am

The BLS number are notorious for being inaccurate!!! Biderman has a great “blow by blow” explanation on the past two month numbers (which were revised up by a “small” 100% in Aug and “only” 25% in September) and an explanation as to why the most recent numbers are overstated and subject to downward revision….

It makes for great headlines particularly just before an election.

#113 Stickler on 11.03.12 at 8:29 am

I am no gold bug…but I’m surprised no one mentioned talk about making gold a tier 1 asset.

What if: Jan 2013 the BIS makes Gold a Tier 1 Capital Asset and thus rescinds the 50% Capital Requirements on Gold assets.

On news that the Fed will monetize Gold and it’s rise to Tier 1 Capital, markets push Gold to $3,000/oz.

Something that gets a huge boost in demand will not fall in price.

Possible, well yes.

Move your portfolio to 100% gold, well of course not.

#114 Eaglebay - Parksville on 11.03.12 at 8:33 am

#69 Tony on 11.03.12 at 12:31 am
“I expect unemployment in America to hit somewhere around 28 percent over the next decade.”
You’re talking about Italy aren’t you?
Sneaky little devil.

#115 Jimster on 11.03.12 at 8:35 am

The only thing left backing the US Dollar is the US Military.

And what about the largest economy on earth? — Garth

#116 Eaglebay - Parksville on 11.03.12 at 8:46 am

#91 daystar on 11.03.12 at 3:16 am

What do you mean by ‘payroll taxes’?
How’s the ‘income tax’ that you mentioned being collected?

#117 claudius emperor on 11.03.12 at 8:49 am

some physical gold in the portfolio helps.
the allocation may varry based on the market conditions.

primary investment instrument being good divident paying stocks, maybe some short term corporate bonds.

agriculture land: hold (already too expensive to buy)

increasing one’s gold/platinum physical holdings in the portfolio from let’s say 2 to 5-6 percents: good idea.

let’s not downplay the coming inflation. prediction of douple digits real yearly inflation by 2020 are not unrealistic.

it is about risk management. otherwise agree that larger speculative allocation in gold can bite you.

the interesting question is how eventual rise in the gold holdings (physical gold) in a balanved portfolio from let’s say 2 to 6 percents on world’s scale would impact gold prices…

I can easily see some uptrend here for the gold. I won’t play it though beyond the reasonable 5-6 %.

#118 Eaglebay - Parksville on 11.03.12 at 8:55 am

Paper gold (digital) versus physical gold.

#119 TurnerNation on 11.03.12 at 9:08 am

Metals are a commoditity. You don’t hoard barrels of oil, or spools of copper wire, or sacks of rice in your
basement, with the hopes of retiring and striking it rich – right? I’m sure you can pull quotes from ancient texts, singing the praises of wheat, rice, coal, oil, water. Why not start a Rice Bugs site. Rice – the gods’ food!!???

– Attn. new Blog Dogs. The following user names are still available. Reserve yours today!

Pathetic Pundit

Never used yellow highlighters

Track6er’s Delight


Stephan who?


Beach man


Blog Dog Carney

#120 Uwinsome on 11.03.12 at 9:09 am

Toronto October total resales number out.
Sales slightly down, prices up.

“The board noted that there were two more business days in October this year than last year, and on a per-business-day basis, sales were down 15.6 per cent from October, 2011.” Doesn’t sound ‘slightly’ to me. — Garth

#121 Grantmi on 11.03.12 at 9:21 am

#46 OkanaganInvestor on 11.02.12 at 10:39 pm
All looks rosy the week before Obama’s election. Wait a week and watch what happens. Speaking of gold, here is a short assessment from Doc Willie:

Yea…. But Willie also predicted what was forming here was a cup with handle on gold.

That got creamed yesterday. If this puppy breaks the next resistants of the 200 DMA. …. Goodbye gold.

#122 Oakville Owner on 11.03.12 at 9:23 am

Hi Garth,

Would you know a good fee based advisor in the Halton area you could recomend?


Contact me offline for personal issues. — Garth

#123 Grantmi on 11.03.12 at 9:24 am

Yea. Also pickie duster Bob Ramme was on the Bill Good show the other day on CKNW.

Again….. “everything is wonderful … And I’m mr. Wonderful!”.


#124 MarcFromOttawa on 11.03.12 at 9:39 am

Notice Garth does not insult silver stackers as much as gold bugs.

I insult nobody. My arguments are fact-based. In contrast, I will be deleting several dozen comments this morning from gold bugs whose know only how to abuse, not make a cogent case for their conviction. — Garth

#125 so it begins... on 11.03.12 at 9:43 am


October sales were 28.5 per cent below the 10-year October sales average of 2,700.

At 17,370, the total number of residential property listings on the MLS® increased 12 per cent from this time last year and declined 5.3 per cent compared to September 2012.

Sales of detached properties in Greater Vancouver reached 790 in October, a decrease of 18.9 per cent from the 974 detached sales recorded in October 2011, and a 19.1 per cent decrease from the 976 units sold in October 2010.

#126 Oh Garth, you make me laugh on 11.03.12 at 9:45 am

Oh Garth, you make me laugh. Truly. It’s strange; I feel like you must have felt when you started writing this blog, when people disputed your contention that housing prices were forming a bubble and destined to fall. You must have felt like you were tilting at windmills, yes? Judging by the tone of your blog, I’m guessing their dissent invigorated you. I’ve agreed with you about that growing housing bubble and the underlying factors which created it. I’ve agreed with much of what you’ve said about inflationary and deflationary forces. However, your rationale for the decline in the gold price is utterly wrong. Gold didn’t go down because investors were concerned about the withdrawal of stimulus (fiscal stimulus may go away, some day, sure, but certainly not monetary). In fact, the US Fed stated it wouldn’t withdraw its stimulus even when the economy picks up. Why? The major central banks of the world won’t pull back on the monetary injections because their purpose isn’t really stimulus. They’re printing money to keep the banking system afloat. This is a minor pullback in gold and you are an excellent contrary indicator. You are tremendously misguided in your criticism of gold, and you are doing your readers a great disservice. The problem, I’m thinking, is that you appear to misunderstand the underlying monetary system and its mechanisms. That underlying system has changed: in substantial increments (over decades) and then, eventually, drastically. I suggest you venture a step through the looking glass.

When you say that cash rises in value in deflationary times, in general, you’re correct or, more accurately, at one time you would have been more correct. However, you fail to realize that the basis of this notion is a throwback to the days when we were on a gold standard. In that system, hoarding cash equated with hoarding gold, increasing purchasing power, and actually accelerating the deflationary forces. However, we are no longer on a gold standard; we are on a fiat system; central banks are flooding the system with paper and digital money, attempting to compensate for the massive, ongoing deleveraging. Therefore the system no longer affords the individual the capacity to preserve purchasing power by hoarding cash; or if it does, it’s only temporary and fleeting because as more people hoard cash, central bankers reach once more for the print button, issuing ever larger amounts of currency into the system in an effort to increase the velocity of money. And it is leaking out, but often in unexpected – or more to the point, unwanted – places, exacerbating the mispricing of things and the misallocation of capital. And this contention doesn’t even address other issues like persistently negative real rates and a host of other contributing factors. Yes, I too advocate easily liquidated positions (and I don’t advocate an all-in position in gold), but the ultimate, go-to form of liquidity of last resort in a fiat system of money is no longer cash in the form of paper money, but gold (and silver).

The smart money saw this coming a decade ago and the smart money is buying on days like Friday. In a fiat world, gold preserves wealth in both inflationary and deflationary environments. Gold is going to soar in the year ahead and, in all likelihood for many years ahead if current monetary practices continue (with its ups and downs along the way, of course, like the down episode of the last 14 months). Gold is nowhere near its peak. In fact, gold isn’t in a bubble; currencies are. Gold isn’t volatile; currencies are. Gold is merely the measuring stick. Those without a long-term perspective, and confused by how the devolving monetary system works, are too quick to dismiss it. The untethered, credit-expansion trajectory that we have been on for decades has begun to unwind and central bankers are trying to compensate with a torrent of cash. Gold is simply reflecting this and these forces will no doubt, at some point, meet in a great market-clearing event that restores a more stable equilibrium to the system (either planned or market-induced). I and many others feel at times as though we are tilting at windmills. So we understand how you must have felt a few years ago. However, there is a large contingent of very smart and very experienced financial experts who advocate buying gold, and they provide very sound reasons. I’ve read no legitimate contrary argument in your blog. I would encourage you to do a little more research, if not for yourself, then for the benefit of your loyal readership.

This graphic of Exter’s pyramid shows what happens as credit contracts: Investors continually seek safer assets. The pursuit of a nominal return on invested capital will eventually be abandoned in search of simple wealth preservation.

Note the nadir of the pyramid. The penultimate stage is cash, but the final one is gold.

#127 Inglorious Investor on 11.03.12 at 9:48 am

#61 Gman on 11.02.12 at 11:47 pm
“I have family friends in Iran, where the currency has been decimated by 80%.[…] Guess what the hard currency is? Not gold but US$’s. Explain that to me anyone? When the poop hits the fan, those in crisis go to the most liquid currency around, not gold.”

First, check this out:

Sub-heading: “Rial sent into tailspin in spite of Ahmadinejad’s defiance as Iranians rush to convert assets to foreign currency or gold”


Second, check this out: (Iranian rial priced in gold)


Third, gold is not used as a medium of exchange by consumers. Even when currencies were backed by gold, people still used paper notes/certificates in day-to-to transactions. So anyone who tries to refute gold because people don’t use it to buy mild and bread is either ignorant of the facts or intentionally trying to mislead others.

#128 Inglorious Investor on 11.03.12 at 9:56 am

Of course that should be “gold priced in Iranian rials”

And people buy milk and bread not “mild and bread”.

#129 Not 1st on 11.03.12 at 10:15 am

Garth, you are looking at gold all wrong. It’s not to be compared with stocks. gold is insurance against reckless monetary policies. You have fire insurance right? Currency insurance is just another way to protect against a black swan event arising from aggressive and mis guided monetary policy. This recession would have been over 2 yrs ago if we would have deleveraged and restructured then but the fed has prolonged the misery until we face another now shortly.

No, gold is an asset. There will be no currency collapse, banking crisis or economic meltdown in this lifetime. The end goal is to have lots of the stuff you finance your life with – money. — Garth

#130 M G on 11.03.12 at 10:17 am

Garth thanks for addressing gold, and yes I guess I am a bug. I appreciate your arguments. But I think gold’s rise will continue because of simple reasons:

1. Central banks are buying and not selling anymore

2. Gold/silver are hard to find

3. Big banks have huge short positions which o ne day will have to be covered. Yes the price could continue back to 250 ounce, but i doubt it. why…

4. Simply put money is backed by nothing. Maybe debt. So just like why the housing market may correct because its built on debt, then what what value does the US dollar have? Will they ever pay back 16 tillion and deal with unfunded liabilities in the trillions?

The real bubble is in US bonds. That is a scheme. Never in history of the world has a fiat paper system survived. So why is this time different in US and in Europe? I guess trillions of govt debt means nothing to you Garth? c mon Garth, that is the definition of Armageddon.

Currency has always been backed by the power to tax. That is not ‘nothing.’ — Garth

#131 happy renter on 11.03.12 at 10:37 am

If you want to know the real truth go to .Watch the videos and learn,end of story.

#132 Herb on 11.03.12 at 10:44 am

#91 Daystar,

you are depressing on a Saturday morning on which the weather is promising to lighten up a bit.

#133 Herb on 11.03.12 at 10:52 am

#86 willworkforpickles,

you’re even more depressing than Daystar to-day. Daystar is reporting sourced facts he’s found. You’re just slipping in unsourced propaganda laced with wishful thinking.

#134 renters rule on 11.03.12 at 11:13 am

Romney is going to win and it won’t be a squeaker

Based on what? — Garth

#135 Triplenet on 11.03.12 at 11:16 am

The price of gold will revert to the mean and according to the UN should be a price multipe of 3 times average daily income.
There, that’s official.

#136 Mark on 11.03.12 at 11:27 am

1913 – 1 oz of gold = $20
1971 – 1 oz of gold = $35
1980 – 1 oz of gold = $850 (Bubble top)
1981 – 1 oz of gold = $300
2012 – 1 oz of gold = $1700

Who the hell looks at this, even with the bust in 1980 and thinks the USD is the winner here? Seriously, explain why money is going to gain value in the coming years when the exact opposite is true for the last 100 years?

Garth cherry picks the stats out of the US and is uncritical of them in the same way he berates realtors for cherry picking CREA stats. There is no recovery in the US. Unemployment and underemployment is sky high. The trade deficit grows every month. In 2008 about 28-million Americans used food stamps, today 46-million do. For some reason, the number of Americans collecting disability has spiked since 2008, another 1.5-million. Why Garth? No jobs, no hope, and unemployment has run out.

This is a recovery 5-trillion in borrowed money?

Get ready to be spanked in 2013. — Garth

#137 Ronaldo on 11.03.12 at 11:33 am

#103 Marc – ”Other news I found, Prince George sales down 46% August 2011 vs August 2012”

I recall very well that when prices of houses crashed in the early 80’s, it took 20 years for houses in Prince to regain their pre crash prices. Problem with buying homes in a one economy area. Many like that in BC.

#138 Sacola on 11.03.12 at 11:36 am

Gold is a function of the U.S. dollar. Its price reflects the markets true long-term expectations of the currency.

#139 rob on 11.03.12 at 11:37 am

Speaking of the BIS

“What Is The Real Price Of Gold IN The Central Bank World?”

The one that posts using SDRer, has shown many times how “Gold Value” is used in international trade. What cannot be seen is the value of gold in the “INTERBANK” world. Here is the realm of “true valuations” in paper currency terms. It is a real shocker for lesser eyes.

In this modern world, the current value of every asset is formed by a relationship of gold/currencies/oil. This cross relationship is the “very basis of our modern world banking system”!

Through this basis, all currencies are given value as the local government treasuries hold US$ as reserves. The US$ is given backing as its government is guaranteed that all crude oil, worldwide, will be settled in dollars. An oil reserve backing, if you will. And the “value” that the “future supply of” currency traded “oil” imparts to the world economy, is guaranteed by an “INTERBANK paper gold MARKET” that values “physical bullion” in the Thousands!…

But, how can this be, you ask? It is done, “right before your eyes” and we see it not! I ask you, if you have one ounce of gold, and sell it on the market for $300, it is worth $300, yes? Now, what if a CB holds one ounce of gold, and sells it twenty times, that one ounce is now worth $6,000, no? The difference between you and CB? The persons that hold “interbank” IOUs for gold, value them at the multiple of leases/sales made against reserves. This leverage, it is held for performance on bank part. The BIS, it forces performance, on any economy! You ask Korea about gold, yes?

This is why oil can take a small amount of physical gold out of world supply, at current “freely traded”, “managed prices”, and hold it at a many times valuation. That is what gives this “new world gold market” much value in trade at high levels. Look even at your “Comex”, and divide the daily volume by the “eligible stocks for delivery”. That number (perhaps three million ounces divided by 150,000 stocks), deliverable, times the spot close gives close, real world price of physical, $6,000. It follows close to paper trade on LBMA.

You see, “physical gold is of much greater value than public traders can move it for”! In your world, this cannot be, but it is, and will show for all to see in your time.

#140 Grim Reaper/Crypt Speculator on 11.03.12 at 11:39 am

All the glitters is not Gold….

Thus: Invest in Gold – plated Tungsten bars…..huge profits !

#141 Ronaldo on 11.03.12 at 11:40 am

#109 GMC –

”but in the long term NOBODY KNOWS where things are headed.

Truer words never spoken. Good post GMC.

#142 Rob on 11.03.12 at 11:43 am

GTA Sales in October 2011 = 7642
7642 – 15.6% = 6449 sales in October 2012

6449 = lowest October sales in the last 9 years outside of the 2008 low of 5155

#143 coastal on 11.03.12 at 11:48 am

It’s been pretty funny watching the Victoria CTV news the past two days as they all hold hands praying prices won’t drop even though they already have been for months.

They trot out the usual lame and bias agents who claim the usual drivel that you can’t make a serious case for a price correction. I just about puked watching that garbage but what do you expect when you don’t want to tell the masses the truth that you’re screwed.

The ending was another beauty when the VREB prez claims prices will start to go back up in 2 to 3 years but they forgot to mention the higher rates that will be in full court press by then. The Life of Denial in V-town… pity.

#144 Stoopid Idiot on 11.03.12 at 12:10 pm

I’ll stick with Jim

Jim, thank you for all of your wisdom and advice.

CIGA Henry (HFT)

#145 tkid on 11.03.12 at 12:13 pm

#62 First Time Poster

That was a fanfastic video – thank you for sharing! Do you have any more, particularly more recent Chris Martenson videos?

#146 Stoopid Idiot on 11.03.12 at 12:18 pm

This is worth your time and money….

Nope. Nutbar cinema. — Garth

#147 picasso on 11.03.12 at 12:22 pm

How the Hell does the last place Eskimoes in the Western Conference make the Eastern Conference Semi Finals?

Eastern Semi-Final
Edmonton Eskimos at Toronto Argonauts

What kind of play off format do they have in that bush league now?

#148 Derek R on 11.03.12 at 12:27 pm

#97 daystar on 11.03.12 at 3:16 am wrote a depressing but informative comment on ownership vs tax.

This is why I harp on about abolishing GST and income tax and replacing them with resource taxes and property tax, (preferably a Land Value Tax). That would provide a much better match between wealth owned and tax payable than the current complex system does.

#149 M G on 11.03.12 at 12:40 pm

No Garth, we were on the Gold Standard, and all our problems started in tghe early 70s when we left that. Garth you, no anyone else, cannot deny history – gold/silver are money. period. Anything else is ludicrous. By the way Garth I know you are way too smart to believe everything you hear out of the USA. Gee Beaver, could the US govt be lying about their jobs report? About the amount they really owe?

Govt s are just a bunch of liars and they work with the devil (bankers) to keep themselves in charge and make the general populace dependent on them.

Canadians – paper money is worhless.

Lets put our money where our mouth is. Between now and Nov 3 2013, I say we reach 2000 per ounce gold at least once. If I am wrong, Garth I will send you 1000 dollars Canadian. If I am right you send me an ounce of what you consider worthless gold. Deal?

Prove any collusion in US government labour numbers. I’m fascinated to know. — Garth

#150 Jimster on 11.03.12 at 12:45 pm

Garth is correct, the Dollar is backed by taxes, %50 in most Ca cases, enforced by police. Hows that for value, or morals?

The average income tax is 28%, not 50%. There is no police enforcement of collections. Grow up. — Garth

#151 John Prine on 11.03.12 at 12:45 pm

#129 M G on 11.03.12 at 10:17 am

1. Central banks are buying and not selling anymore

2. Gold/silver are hard to find

I don’t understand what you mean by gold and silver being hard to find? Buying it or mining it? Easy to buy at any bullion exchange……

#152 Rasputin on 11.03.12 at 12:52 pm

Houses are bought by virgins with 95% debt. Physical gold is bought by grizzled investing vets all cash. Which group is more likely to panic and stampede when things don’t go their way? Futures market mean squat. It’s manipulated bs. When gold drops 10% in a year it just means the leveraged paper speculators got spooked. It doesn’t change anything.

‘Grizzled investing vets’? Hardly. You should meet the young people I do, who have been traumatized by this trash talk, lured into a volatile asset and mistaking gambling for investing. — Garth

#153 daystar on 11.03.12 at 1:05 pm

#115 Eaglebay – Parksville on 11.03.12 at 8:46 am

#131 Herb on 11.03.12 at 10:44 am

Lol, sorry about that pal. Sometimes we’ve got to accurately assess the depth of the mess before we can clean it up and if we can’t do it ourselves it simply forces us to learn to work together and that never a bad thing. :)

#131 Herb on 11.03.12 at 10:44 am

Lol, I didn’t mean to pal.

#154 anotherwhistleblower on 11.03.12 at 1:07 pm

Garth….you should know that Friday is always a ‘risk on’ day no one holds long positions over the weekend especially in times as uncertain as these… more complicated than that…gold will be back up futures, fundamentals and the macro suggest.

Barricks plunge had everything to do with pee poor management of a project in Peru..nothing to do with the global price of metal. I remind you to relate a chart of the money supply against gold price rise over the past 13 years…and you’ll see that the uptrend is firmly in tact…and has nothing to do with housing, Obama or a temporary blip in the US dollar-Euro trade. Apples with apples friend…convieniance is a political trick…..we are investors and view things much differently. Of course you have no training in independant thinking do you….a journalist….a politician….and now an unlicensed ‘financial advisor’ with no formal education or training in economics or finance…..the perfect combination for leadership…..why are they even considering Justin Trudeau? it something in the liberal genome that desires an adherance to the fiat systems control economic model and a hatred of the ‘barbaric metal? Will the liberals world view collapse if the economy is not under stricy government control? Apparently so with the comments we get from the liberal left.

Meanwhile what is the legacy the liberal economy has left us…..80% taxation…..$11,000 per person per year tab on ‘universal health care’….elite unions making 50% more than everyone else…featherbedded pensions that no one else gets…..massive institutional corruption….a murderous police force existing outside the law..ethnic division….high unemployment….creepy foreign ‘terrorists first’ policy……yes indeed..lets keep on the track you suggest.

How does thinking you are seriously overweight in one asset class make someone ‘liberal’. Owning gold is clearly more dangerous than I believed. — Garth

#155 JuliaS on 11.03.12 at 1:09 pm

Following Sandy I was expecting a pre-emptive sellout of stocks and bonds on behalf of NY and NJ insurers to cover upcoming claims. That didn’t happen.

What if the insurers chose to trim precious metals in their portfolios? Something had to be selling off to the tune of $100bn. If it weren’t stocks and bonds, what else then?

Garth advocates stocks and I don’t trust stocks. He thinks 7% is reasonable and 16% is a scam. I think 1% is risky and 7% is pure risk play. In fact, anything offering above the government bond level of return is likely junk.

Like someone here mentioned – gold is an insurance against systemic breakdown. It’s valuable when S is about to H the F. It’s cheap when the economy is stable enough to last another day.

If one buys gold to gamble or trades GLD (fiat insurance against other fiat), then it’s a whole different type of game.

One thing pointed out by Garth correctly, is that gold is not an insurance against inflation or hyperinflation. Plenty of historic proof to support it. Plenty of declines throughout inflation.

Gold, like I said, it insurance against a total breakdown. Some believe it could be imminent. Others think there’ll be years and years ahead for them to collect their coveted 7%. Well, keep playing and good luck. Wherever it goes, we won’t have to cover your losses and you won’t have to cover ours.

‘Garth advocates stocks.’ Garth does not advocate stocks. How can a comment so wrong lend credibility to your post? — Garth

#156 Sarah Anderson on 11.03.12 at 1:15 pm

>>There’s little doubt the US recovery will continue

There’s little doubt in your mind. However, there is also no evidence to back up your belief apart from wishful thinking. Or do you imagine that the debt can just carry on rising forever?

No evidence? Employment. Consumer confidence. Real estate. Profits. Technology. Influence. How about US bonds as the global safe haven? This is getting too stupid to comment on. Going for a ride. — Garth

#157 Canadian Watchdog on 11.03.12 at 1:20 pm

#143 Crash Test Dummy #141 Rob #119 Uwinsome

Read post #121 for full explanation on TREB’s home sales and price stats.

#158 Jimster on 11.03.12 at 1:23 pm

Income tax %29 + 13.5 HST + Land tax, excise taxes and tariffs, in pretty close to %50 for most grow’d up Canadians.

You cant pay those taxes in gold, anymore.

#159 Old Man on 11.03.12 at 1:25 pm

#149 M G – if paper money is worthless, just try to pay the grocery bill at the checkout counter with a troy ounce of gold; they might call the cops on you, or even worse report you to the TAX MAN for an investigation.

#160 Mark on 11.03.12 at 1:36 pm

“, lured into a volatile asset and mistaking gambling for investing.”

Is gold really a volatile asset if you measure it in gold? If you measure the dollar in gold, it would seem that it is the dollar that is the ‘volatile asset’. The degree of volatility in an asset would seem to be related to the reference asset against which it is measured. If you’re used to thinking of the reference asset as being “dollars”, then, of course, dollars and derivatives of dollars, ie: bonds, would seem to have low volatility and low ‘risk’ relative to other potential reference assets such as gold.

Just saying…

Hey, let’s measure oil in oil. Or RIM stock in RIM stock. Unbelievable. — Garth

#161 M G on 11.03.12 at 1:39 pm


My friend, have u ever tried to find gold – I mean in the ground. It is very very very difficult and big miners are always looking and spending millions trying to find the stuff. It will become even more precious due to its scarcity in the future- along with oil.

money-paper money- is being printed by the billions as we speak. Call me crazy, but it will make great toilet paper. I believe to get out of all this mess is to go back to the gold standard-

As for Garth, you my friend are truly naive. What did Mark Twain say about stats- lie damn lies and statistics. My theory, the powers all over the world want Obama for another term just to keep the house of cards going and allow all the sword rattling in the mid east to continue – which allows Israel, big banks, and Opec to control the prices of commodites like oil with ease. All Iran has to do is mention the gulf of Hormuz and oil goes up.

This is all reminiscient of the cold war when the “enemey” or sand paper was ussr. America needs “an enemy” to keep its people brainwashed and govnt full with control. What – u thought this was a real democracy or we really have freedom.

As my good old dad said : tutto bullash#%$t

Garth, I am Italian and th Roman Empire went bankrupt because of unbacked currency. But it did a great job in brainwashing people like yourself to believe in worthless money and trust the govnt. HAHAH trust the govt. That is very very funny. VIVA LIBERTARIANISM!!!

This is why, as a group, gold bugs are considered the lunatic financial fringe. — Garth

#162 M G on 11.03.12 at 1:49 pm

You know Garth

at one point Jesus was considered nuts.Usually people that speak truth are considered nuts. Coming from you, being called nuts is a compliment. Please post this. thanks

Blessed be thou. — Garth

#163 Joe in van (livin in it) on 11.03.12 at 1:52 pm

Smoking man, don’t think you are getting my point about the village out there looking for you,
you really are thick

#164 Penny Henny on 11.03.12 at 1:56 pm

“The board noted that there were two more business days in October this year than last year, and on a per-business-day basis, sales were down 15.6 per cent from October, 2011.” Doesn’t sound ‘slightly’ to me. — Garth
Garth you discount this arguement last month and yet this month you are on board.
You’re flipping and flopping more then a fish in a boat.

I did not mention it last month. A 15% decline (per the board’s admission) is consequential. — Garth

#165 TurnerNation on 11.03.12 at 2:13 pm

Those people with $600,000 mortgages are never able to pay it off. Ever. The game’s rigged

Even if you shovelled $3000 each month into it – assuming a zero interest rate – you’ll need 16 years. But by this time you’ll also need renos and repairs, plus the utilities and taxes which are rising by 3% each and every year.
Throw in interest, and you’re hooped.

But people are counting upon 5% yearly price appreciation as a hedge…

On a $770,000 Toronto purchase price you’re paying $23,000 in land transfer taxes. Add this to the above burden. Throw in the CMHC graft and you are done for life. You will never ever pay this amount off.

#166 Old Man on 11.03.12 at 2:27 pm

The last time in my life that wanted to find gold was almost arrested, as researched this old inn located in Ontario going back to the late 1700’s which was a point of travel. I had this vision of drunks, fights, gambling, and those that took a room.

I said to my dad the relic is still there, so am renting a metal detector to search the grounds for gold coins around this property, so come along for the adventure which was located in a Federal Park. Now just as I was getting a hit for gold with a small garden scoop, out of nowhere a park official showed up.

He said what the hell are you doing? I replied looking for Indian arrow heads, and he said this is illegal, and said had no clue – sorry. The official said get out of here, or else. We left quickly, and my dad said well it could have been worse ending up in jail.

#167 cynically on 11.03.12 at 2:29 pm

#59 daystar — Great posting – particularly your insight on the US election and its possible effects, depending on the winning agenda, on the country itself and the rest of the world. As Garth has pointed out, they have a resiliency.

#168 Sarah Anderson on 11.03.12 at 2:35 pm


#169 Sarah Anderson on 11.03.12 at 2:36 pm

“The immediate reason was a better-than-expected jobs report, as employers added 171,000 workers (the numbers in Canada were anemic).”

Do you have any understanding of how those job figures are calculated? Or how Canadian ones are?

I really doubt it, otherwise you would be quoting something more reliable.

Enlighten me, Sarah. Another government conspiracy, orchestrated by thousands of civil servants? Do you know how dumb you sound? — Garth

#170 Bill Gable on 11.03.12 at 2:38 pm

I have to disagree with your note that “Obama Won”. He has won nothing, and will NOT win this go.

The word is filtering out that the election in New York and New Jersey, might be put off for three weeks.

Obama’s optics were great day one – but now, the situation has become apocalyptic in areas of Jersey and New York, and people are at the breaking point.

I also suggest that the raw sewage mixed with gasoline in the water that has been flooding the streets – will create a health time bomb. That and NO TOILETS for millions. OMG.

Obama will have to call out the Army is my bet – this story is NOT over and Obama, to use an old Tiger Williams line, is “done like dinner”.

#171 Gunboat denier on 11.03.12 at 2:41 pm

99 Daystar

The link provided claims that the top 1% of wage earners makes 16.9% of total taxable income (not taxes paid).

It then states that this 1% pays 37% of total income taxes received (not the tax rate).

If we equate wealth with income (a very strong but not
perfect correlation) we see very close proportions to the
wealth stats you provided. Interesting. Perhaps by design?

Now this is all American, so I dont know, but wrt payroll taxes, do the contributions to SS and Medicare not
correspond to potential benefits received, or does one
get those benefits regardless?

#172 industrial Guy on 11.03.12 at 2:43 pm

Gold has always been a barometer of fear …. The US economy is beginning to show new life. Housing prices are stabilizing. Job numbers are growing. The US dollar is getting stronger.

Gold is just another commodity. It has many uses .. but it’s just another commodity. The professional speculators will run from this market just as fast as they have from the housing market as soon as they see profits turning into losses.

Buying gold as a bet against the US economy was just foolish. You just have to attend the “Greenbuild 2012″ show” in San Francisco in a weeks time to see where the next US manufacturing boom is coming from. Never bet against the USA.

#173 Not 1st on 11.03.12 at 2:46 pm

Garth, its not 1982 anymore. The U.S.A is destined for one of two outcomes and its as clear as day;

1.) Either they will stimulate their way out of this at a cost of tripling their national debt, which will make the cost of debt servicing somewhere close to 50cents or higher on the dollar (its already 40 cents or so) which is not sustainable under any tax regime.

At the end of it, they will have several trillion of debt on the feds books, and equivalent hole at the Treasury dept and probably 16-18 trillion in national debt and several 10s of trillions in unfunded liabilities, all while interests rates rise to normal and boomers weigh down the system

2.) Or the mandated cuts will kick in one way or another, current stimulus will be removed, tax burden increases drastically, housing slumps again, consumer retreats, etc and the U.S. goes into a double dip recession, maybe flirts with depression.

Number 2 is going to happen one way or another eventually. It can either happen now, take the medicine or it take it in 5 years when it will be a lot more bitter. Best thing the U.S. can do is elect Obama and that he do nothing for 4 years and let these cuts go through.

Wrong on both counts. Long, gradual, disappointing but incremental recovery. Along the way doomers will be systematically wiped out. — Garth

#174 Inglorious Investor on 11.03.12 at 2:46 pm

“Central banks maintain reserves of US dollars. Gold is a diversification, denominated in the reserve currency. — Garth”

That’s why I suggest it may be a good idea to hold some yourself.

Central banks have always hoarded gold bullion regardless of what currency may or may not have been used as an international reserve currency (e.g. pound sterling, dollar), and regardless of whether or not their nation’s currency was backed by gold or government fiat.

When a currency is backed by gold, it is not the gold that is valued in the currency, but the currency is valued as an amount of gold.

I know you know all this, but some on this site might benefit from a better understanding. I encourage them to educate themselves.

I’m not one of those people who advocates going all in on gold. It is my opinion that gold is not a good investment, but some have gotten lucky speculating in it over the last decade or so. Or maybe they were just smart. Also, I would not buy gold as an inflation hedge because the higher inflation goes the more of your net worth you will actually lose, not gain, if you sell.

I simply think people should hold a percentage of their assets in gold, if feasible (each person has to decide how much), and hold it indefinitely, only selling if you absolutely have to. Gold has thousands of years of history as money and as a store of value behind it. Apparently, even in our fiat/debt money world, central banks have never forgotten this, and still adhere to it.

More and more countries (China, Brazil, Russia, for example) are establishing bi-lateral and multi-lateral agreements to settle trades in currencies other than the US dollar. And there is increasing talk that any new international reserve currency, or basket of currencies, should also include gold bullion as a component.

The US itself has experimented with various currencies throughout its history. All fiat currencies eventually go away. But the gold remains. And barring short periods of extreme volatility, so does its value.

#175 Shane on 11.03.12 at 2:48 pm

Face it Penny Henny!! The market is going down you know it and everyone else knows it..get use to it.. The dream world that everyone has been in the past few years is coming to a end… LMAO!!

#176 Daisy Mae on 11.03.12 at 2:49 pm

Hey, at 1:15pm you said you were going for a ride and here it is….1:56pm (#167) and you’re still here!

Go! Enjoy! :)

#177 Canadian Watchdog on 11.03.12 at 2:50 pm

#165 Crash Test Dummy

CMHC Newsroom

Letter to the Editor — National Post — “Good Reasons to Start Now with CMHC Privatization”
October 31, 2012

CMHC Response to Reuters
October 18, 2012

CMHC’s Response to Article on emili
October 11, 2012

And then…

Montreal Gazette – Mar 5, 1980: CMHC faces severe losses: Secret report

Edmonton Journal – Mar 7, 1980: CMHC ignored RCMP warnings

Ottawa Citizen – Oct 19, 1981: CMHC denies dire predictions

We’ve seen this rebuttal before, because when there’s something to hide, you refute it until you can’t.

Now have a look at this chart and remember Genworth’s insurance-in-force was reported at $295 billion as of Q3, just $5 billion shy of its limit. Now we await CMHC’s Q3 report.

Note: It is impossible for CMHC to manage its risk with a limit cap because in order for the market to remain liquid, requires more high-ratio buyers entering the market. Not hard to see what spring sales will look like as most banks, it not all, will be refusing high-ratio loans, leaving first-time and cash-strapped buyers to mortgage with brokers who will be charging a hefty premium.

#178 Frank Newton on 11.03.12 at 2:53 pm


#179 daystar on 11.03.12 at 2:54 pm

#148 Derek R on 11.03.12 at 12:27 pm

I like it! Not entirely convinced of getting rid of the GST (consumption tax) and wealth has to generate income of some sort, it has to self sustain to a degree? But I like it!

#18 Marco from Van on 11.02.12 at 8:58 pm

Cool. I’ve got no problem with that. You do realize btw, that your “wish” the other day was voiced over the last couple years a good couple dozen times before in much the same way. At some point when you keep making deposits at the karma bank, sooner or later you have to expect a statement. Glad your around, we need you… peace.

I just gotta say though, if you want to avoid CC, you might have to stop watching mainstream news:

… and is CC relevant to RE? Some folks in the media are saying the RE recovery in the U.S. means more investment in Canadian RE (totally baseless from what I can see, shows how desperate the industry is to try a slant like that, Canadian homes are still worth twice that of U.S. homes on average). How much are homes worth now in the lower lying levels of the eastern seaboard? We’ve talked at length on this site about the pros/cons of selling Canadian and buying american. Can we seriously make a reasoned choice in areas like Florida and NY (and thats just hurricanes) without considering what could be new normal with extreme weather patterns relating to CC? I think not.

Btw, I should thank you for prodding me to consider starting my own blog. Smoking man has inspired me as of late (as well as GT for a long time now) and while the odd person (Buy? Curious? I’m looking at you) may consider folks who comment several times a day as “losers”, they should really stop and think about where it leads, the folly of generalizing and just who comments the most on this site. Its the guy that everyone truly does come here to read, love him or hate him, the maverick, the bearded one, the protector of virgins and innocents who doth shed light in darker times, the one and only John Garth Turner. Oh and btw, what do amazons, chizeled torsos, harley’s, Dorothy’s and gut splitting jokes have to do with RE? Oh… nothing. :) (but they still shed light)

#180 Doug in London on 11.03.12 at 3:11 pm

My car runs on gasoline (petrol) made from crude oil, my home and hot water are heated with gas, and the electric power I use (for many purposes including reading this sad blog) is generated in part from burning gas. By contrast, gold doesn’t power anything and is not edible. Not only that, but gold can be recycled and fossil fuels can’t. So what’s a better investment, fossil fuels or already grossly over priced gold? I’ll have to sign off and think about that for a while.

#181 daystar on 11.03.12 at 3:20 pm

#150 Derek R on 11.03.12 at 12:27 pm

I’d really like to see what you’ve got in mind if you have some detail worked out. I believe you are by far and away one of the most brilliant people I’ve read here and very polite and fair, very well mannered y’know, a true gentleman so… its an excellent combination that makes me that much more interested in what you have to say Derek. If you need another pair of eyes, I am at your service! (but give me 24 hrs, I’m gone for the rest of the day)

#182 luke8929 on 11.03.12 at 3:24 pm

My income tax rate is %46, that doesn’t include other taxes, GST etc etc etc. so I am well over %50 all in.

Don’t pay and the courts will order your worldly possessions seized. Done by the Sherriffs in BC, armed and yes those are Brown shirts their wearing. The Police, well any indication that you might fight back and they will be there to “keep the peace”, carry on peasants.

Alternate view on the increasing job numbers.

Businesses are reducing part-time hours across the board from 30-34 hours to 25 hours or less because Obamacare defines full-time work as 30 hours. Business owners (small and large) are cutting the hours people work so they can avoid penalties for not offering health-care insurance.

For details please see Obama Slashes Four Hours Off Definition of “Full-Time” Employment.

Today I learned of another company with 2,000+ part-time workers sending out a notice to part-time employees that their hours would be capped at 25. I was asked not to mention the company, so in deference to the worker who told me, I will honor the request.

Other examples are easy to find however, just check out the reference to Olive Garden and Red Lobster below.

Do the math. Reducing hours from 30 to 25 for 2,000 workers is a net reduction of 10,000 hours. To make that up, the company will have to hire 400 workers, an increase of 20%.

This is happening across the board in many industries. 10-20% staff increases in fast food chains, restaurants, grocery stores, etc., is one hell of a lot of jobs and right at election time as well. Did someone figure this out in advance or was it pure luck?

Its all good, don’t play for anything bad the .gov will bail you out, just look at how well they are doing in New Jersey, medals all around for everyone.

#183 Hoof-Hearted on 11.03.12 at 3:48 pm


‘Grotesque Debate’

NYC Banker?……oh worries.

#184 Canadian Watchdog on 11.03.12 at 3:49 pm

#183 Doug in London

“By contrast, gold doesn’t power anything and is not edible.”

That’s the whole point of it and why it’s been the benchmark currency for thousands of years. XAU/CAD

#185 Tim on 11.03.12 at 3:50 pm

What’s the big deal with gold?, why continue to trash it?

It’s just a near cash equivalent that holds its purchasing power.

100 years gold was $20/ounce, yesterday it closed at $1678.8 US, thats an annual compond return of 4.5%, just about offsetting inflation.

2000 years ago you could buy, with 1 ounce of gold, a toga, belt and sandals, in the middle ages a suit of chain mail, now you can get a good suit.

So whats the big deal?

#186 Kaganovich on 11.03.12 at 3:51 pm

150 Derek

Your idea may also tax the unearned portion of the total national income at a higher rate. That would be a good thing.

#187 Hoof-Hearted on 11.03.12 at 3:54 pm

Mc Cluster U- Know- What

—America today is losing 23 manufacturing plants a day. That is after having lost more than 50,000 manufacturing plants since NAFTA (North American Free Trade Act).

—Only 51% of 2011 college graduates found jobs. Those who took out loans owed an average of $25,000 in student loans and $3,500 in credit card debt.

—-A college graduate with $25,000 in student debts at 10% and $3,500 in credit card debts at 29.9% could pay of those debts over ten years with 120 monthly payments of $442.62 ($330.38 + $92.24). That is hard to do if you have a job at WalMart paying no more than a high school drop out co-worker.

—Michael Snyder tells us that: Since January 2009, the “labor force” in the United States has increased by 827,000, but “those not in the labor force” has increased by 8,208,000. This is how they have gotten the unemployment numbers to “come down”.

—-In the past two months we have seen more layoffs than at anytime in the past two years. This is despite the fact that Obama has asked defense employers to violate federal law and not give workers advanced warnings. Corporate earnings are down at a time when we are told we need to raise taxes and cut spending. Roosevelt tried that in 1938 and the unemployment rate shot back up to 17%.

—Almost one in four American workers has a take hone pay at or below the federal poverty level. To say you are employed today is not the same as in 1970 when wages were high enough to pay a mortgage, buy a car and feed your children three times a day every day of the week.

—-A lawsuit filed in federal court by the Spire law group estimates the total cost of bank and mortgage fraud at 43 trillion dollars. Do you understand that the Department of Homeland Security, the Transportation Security Administration and the laws that repealed the Bill of Rights are there to make sure you can never demand the bankers return the 43 trillion dollars the bankers stole from you?

And it’s the largest, most powerful economy in the world, and will remain so for your lifespan. — Garth

#188 willworkforpickles on 11.03.12 at 3:57 pm

It’s because there’s so much uncertainty out there is why there’s so much uncertainty out there.

#189 cynically on 11.03.12 at 4:00 pm

#s 163 & 164 M G – Here’s what you want to hear – Garth is naive and you are nuts. Are you happy now? Who’d have thunk it – there are more goldbugs posting this blog than those interested in RE. It only took a column on gold to flush them out. I’m overwhelmed.

#190 Old Man on 11.03.12 at 4:01 pm

The only gold I own is a bracelet in 18 carot, and a diamond ring with a two carot diamond; not to mention a well tailored suit, and wear a pair of Cole Hann shoes. This is all a man needs to impress any lady in waiting for a dinner date, as women look at how a man dresses, and do not think they don’t know, as women know all.

#191 Not 1st on 11.03.12 at 4:12 pm

Imagine if there was a nightmare scenario and paper money disappears. Are you going to walk into town with your gold bars and start bartering for food and such? You’ll be mugged and robbed if not killed in mere minutes.

The only store of value is that which can enable your survival and only one asset class falls into that category and thats land and real skills. A few potatoes and someone who knows how to grow them will be worth way more than gold trinkets in an crash scenario.

Most people are holding gold with the expectation that it once again back currency. This is a fantasy. The possible replacement basket of currencies being tossed around is likely to be tied to a countries natural resources which are not as finite as gold.

#192 MarketWatcher on 11.03.12 at 4:14 pm


#193 Mark on 11.03.12 at 4:26 pm

Get ready to be spanked in 2013. — Garth

Why Garth, you expecting 60-million on food stamps? Boy, imagine the boom then.

See my previous comment on food stamps. You have no idea what you are talking about. — Garth

#194 FTP - First Time Poster on 11.03.12 at 4:29 pm

Here are a few facts about the US economy. Read the first part:

Bread Lines of the Modern Era– The Great Recession

IF all EBT recipients shopped at only Walmart Super Centers for ALL their SNAP benefits, then this is how the Bread Line would look each month– 14,588 people.

There are 3051 Walmart Super Centers in USA and 44,510,598 participants in SNAP (2011), making the average SNAP line at each Walmart at 14,588 people.
The Modern Era’s Bread Lines are not visible because the business is handled discreetly through EBT Cards.

According to this Food Stamps report pg 16-17, Walmart receives half of all SNAP dollars in Oklahoma.
Walmart is the largest retailer in America.Short Facts:
47% of Food Stamp participants are children.
78.6% of all SNAP participants are in metropolitan areas.
93.2% of all SNAP benefits go to US citizens.
Only 4% are self-employed.

7731 SNAP Adults per Month,
per Walmart Super CenterThe bread line is 4.1+ miles (6.6km) long.

6856 SNAP Children per Month,
per Walmart Super CenterThe bread line is 3.67+ miles (5.9km+) long

Doesnt sound like a recovery to me……………

…because you are ignorant. In the US many families receive food stamps the way Canadian families receive the Universal Child Care Tax Benefit, the GST credit or OAS. It is a social program, not a handout to the homeless. We do exactly the same. — Garth

#195 Old Man on 11.03.12 at 4:40 pm

#185 luke8929 – the difference between you and me, as will do such in private; not for this blog, but you made a good point. In fact, this stuff has happened in Canada at a different level for many years, and such is life in the business world. I have this moto that any job is worth a sense of dignity to put food on the table, and respect anyone in Canada, man or woman, who works at anything to survive to earn a living.

#196 Linda Pearson on 11.03.12 at 4:45 pm

#193Old Man on 11.03.12 at 4:01 pm
…This is all a man needs to impress any lady in waiting for a dinner date, as women look at how a man dresses, and do not think they don’t know, as women know all.
Don’t forget to shine your shoes too. Otherwise, the rest is wasted.

#197 brainsail on 11.03.12 at 4:51 pm

The talk about gold is getting old…

It’s actually not about gold. But PM zealots do not see this. Figures. — Garth

#198 Questioning Calgary stats on 11.03.12 at 4:59 pm

#199 Crash Test Dummy

In 2009, CMHC had $300 B in mortgages on its books and that total today, only 3 years later, is $600 B. That is approx. $100 B of new money being used per year and that explains why house prices increased. Your logic is flawed, since there has always been space freed up each and every year as existing mortgages are retired. You completely miss the point that it is the new money that is necessary to keep house prices where they are, otherwise they sink, fast.

You’re the doomer as you want prices to go higher preventing young families from being able to afford a house.

#199 fullup on 11.03.12 at 5:04 pm


#200 Grim Reaper/Crypt Speculator on 11.03.12 at 5:06 pm

#200 Linda Pearson on 11.03.12 at 4:45 pm

#193Old Man on 11.03.12 at 4:01 pm
…This is all a man needs to impress any lady in waiting for a dinner date, as women look at how a man dresses, and do not think they don’t know, as women know all.
Don’t forget to shine your shoes too. Otherwise, the rest is wasted.


Well its been my experience , through the eons…that the feminist movement and equality is just a fad….

I see the pendulum swing, whereby people like Madonna and Kardashians and their implants will beg forgiveness…..act as retro role models…. willingly and lovingly don aprons…cook, clean. laundry…shine shoes…have drinks waiting when hubby gets home

This single income will of course re-adjust the economy to reduce inflation, create more stability, and most important…. reduce the amount of soft porn RE blogs.

If you have lived history, you learn from it.

#201 Jimster on 11.03.12 at 5:07 pm

IGuy – Gold has always been a barometer of corruption, that fear is well placed now a days.

Gold is an ASSET, look it up.

#202 Davey Boy on 11.03.12 at 5:21 pm

Fear, fear, fear, and more fear.

Couple of suggestions;

1) Turn of the news.
2) Hire a good financial adviser.
3) Enjoy your friends/ family.
4) Find things that make you laugh.
5) Exercise and eat reasonably healthy foods.
6) Walk in beautiful peaceful areas.

All we are is dust in the wind, never truer words spoken ;)

#203 Smoking Man on 11.03.12 at 5:27 pm


I bet on red or blake, the ponies and gold.

It is shiny, that attracts my interest.

Also,when I rub it my hands don’t get all sticky and covered in a wet film.

#204 Canadian Watchdog on 11.03.12 at 5:30 pm

#199 Crash Test Dummy

“Just in case you’re math challenged as well as being quite obviously comprehension deficient; that’s room for 20,000 new $250,00 high-ratio mortgages every month. Moron.”

Just in case your observational skills are challenged since you completely overlooked the word ‘growth’ in the previous chart, here’s a second chart for your deficiency.

#205 Junius on 11.03.12 at 5:33 pm

#202 Questioning Calgary stats,

Good post. The CMHC is going to end up costing Canadian tax payers billions of dollars. It is just a matter of when, how much and how the loss is taken.

#206 Old Man on 11.03.12 at 5:49 pm

It is not about Gold, but rather a deflation of assets with an employment report that sent the USD higher, to trash market currencies in the end. Now there was those that held sell positions with a stop loss, and all went down quickly, as Gold is an asset just like Real Estate. Now if you want to hold Gold it is tantamount of buying a Condo in the core of 416, as the bell tolls for you as well; need I say more?

#207 Ken R on 11.03.12 at 6:02 pm

Great post Garth, obviously you have struck a nerve with the number of comments.

I however use a very simple method of judging the economy. Friday three new Ford F150’s were in the lot at the payday cash store on my way home. Today, one new Toyota Tundra, loaded, was idling while the owner was inside securing a few bucks to get some grocery or party money. There are 5 or 6 payday loan outfits in this city of 45k. That about sums up my view of the economy and consumer debt in Canada.

#208 Glenn on 11.03.12 at 6:23 pm

‘Romney, on the other hand, means … fiscal responsibility.’

Fiscal responsibility! Is that supposed to be a joke.

No Republican president since Nixon has managed to balance the books and his pledge to reduce taxes while dramatically raising military spending ensure even bigger deficits.

I don’t where people get this idea that Republicans are fiscally responsible.

#209 salonist on 11.03.12 at 6:28 pm

“15 per cent stamp duty”

#210 Mark on 11.03.12 at 6:30 pm

See my previous comment on food stamps. You have no idea what you are talking about. — Garth

Your previous comment does nothing to explain why millions more families now receive this “handout.” Not surprising given your penchant for ignoring the facts that don’t fit your narrative.

Millions more on food stamps, sky high unemployment, more people collecting disability, trillions in debt added, this is the recovery Garth doesn’t want us to bet against.

Suit yourself. — Garth

#211 Junius on 11.03.12 at 6:36 pm


It is always fun to watch you poke the Gold bugs. I am rather gold agnostic or so I think because I hold a little as a hedge.

I would suggest – just for fun – that you poke the gold bugs, man made climate change deniers and Ayn Randroids all in one post but I see that their is already considerable overlap so there is no need. Thanks for making a rainy Vancouver weekend more amusing.

#212 Brico9 on 11.03.12 at 6:42 pm

200+ posts

How about a write up on silver?

We can get to 250 posts!

#213 daystar on 11.03.12 at 6:43 pm

#174 Gunboat denier on 11.03.12 at 2:41 pm

You are correct, I made a mistake and I’m glad you caught it. (It forced me to double check the links accuracy and found a wiki link that is much better, thanks again for catching this)

The correct answer:

the top 0.1% of taxpayers by income pay 17.4% of federal income taxes (earning 9.1% of the income), the top 1% with gross income of $328,049 or more pay 36.9% (earning 19%), the top 5% with gross income of $137,056 or more pay 57.1% (earning 33.4%), and the bottom 50% with gross income of $30,122 or less pay 3.3% (earning 13.4%).[8][9] – wiki

The link also gives a breakdown of income taxes based on wealth:

If the federal taxation rate is compared with the wealth distribution rate, the net wealth (not only income but also including real estate, cars, house, stocks, etc.) distribution of the United States does almost coincide with the share of income tax – the top 1% pay 36.9% of federal tax (wealth 32.7%), the top 5% pay 57.1% (wealth 57.2%), top 10% pay 68% (wealth 69.8%), and the bottom 50% pay 3.3% (wealth 2.8%).[

But it doesn’t end there. The link continues:

Other taxes in the United States have a less progressive structure or a regressive structure, and legal tax avoidance loopholes change the overall tax burden distribution. For example, the payroll tax system (FICA), a 12.4% Social Security tax on wages up to $106,800 (for 2009) and a 2.9% Medicare tax (a 15.3% total tax that is often split between employee and employer) is called a regressive tax on income with no standard deduction or personal exemptions but in effect is forced savings which return to the payer in the form of retirement benefits and health care. The Center on Budget and Policy Priorities states that three-fourths of U.S. taxpayers pay more in payroll taxes than they do in income taxes. – wiki

That last line has some major meaning. Check out this chart. Payroll tax revenues account for as much tax revenue as income tax revenues do in the U.S.:

Note the tax burden that has been shifted from corporations to the employer/employee over the years in the chart. Another clip from the first link:

While the top marginal tax rate on ordinary income is 35 percent, average rates that a household in the upper income bracket pays is less. Much of the earnings of those in the top income bracket come from capital gains, interest and dividends, which are taxed at 15 percent. Also because only income up to $106,800 is subject to payroll taxes of 15.3%, which are paid by the employer and employee, individuals in the upper income bracket pay on average an effective rate not much different than that of other income brackets. – wiki

If one looks at the chart “Average Effective Income Tax Rates for Different Income Groups 2007”, one quickly sees why Warren Buffet and Mitt Romney paid less than 15% in taxes last year.

Are these tax loopholes favoring the most wealthy?(15% taxed capital gains, no need for a TSFA, must be nice) For sure! And getting back to my earlier point and comment (glad I’m not entirely wrong here, I really didn’t want to weaken my point on greed and equality) this is why what Mitt Romney said in the link below has such significance. 18.2% of americans paid neither a payroll tax or income tax and of this percentage, 10.2% or more than half of that number were seniors who likely did pay for the most part, both income and payroll taxes when they were younger. So 29% of the 47% work and/or pay payroll taxes and to some level sales and state taxes that help pay for everything Mitt Romney says the poor believe they are entitled to without paying income taxes, Romney claims that they all believe they are victims and Romney is implying that this 47% are all Democrats who will vote for Obama no matter what:

Seriously, when I watch this vid, I have to ask 2 questions. Has Romney ever even looked at where tax revenues come from or did he just bald face lie in an effort to tell the rich what they want to hear? And secondly, how much money did he raise from the luncheon? Y’know, how many people listening agreed with him?

As to your question Gunboat denier:
“Now this is all American, so I dont know, but wrt payroll taxes, do the contributions to SS and Medicare not correspond to potential benefits received, or does one get those benefits regardless?”

I really don’t know. I’m guessing it scales up to a max depending on the contributions you make but I’ve made enough assumptions and mistakes for one day and my brain needs a break. Thanks again.

#214 Old Man on 11.03.12 at 6:58 pm

#200 Linda Pearson – thanks for the tip about polishing my shoes for a date, as I do well, as it is Smoking Man that needs help in this regard; not me, as he is the one that is short of babes.

#215 Smoking Man on 11.03.12 at 7:02 pm

#206. fake

joe in van. ur right i am thick. please explane. village

bi courious. are you realy.

#216 Toon Town Boomer on 11.03.12 at 7:07 pm

Good Read

#217 Bottoms_Up on 11.03.12 at 7:13 pm

#158 Sarah Anderson on 11.03.12 at 1:15 pm
The debt CAN rise forever, as long as there is an equal or greater rise in GDP. Total debt is not the issue; debt as a percentage of GDP is.

#218 Smoking Man on 11.03.12 at 7:14 pm

#200 linda

you got a crush on old man? lmao.

being 50 + could care less what woman think. past my prime . rentals are the only way to go. screw ownership. to be clear not talking about re.

#219 Industrial Guy on 11.03.12 at 7:25 pm

Jimster .. if Gold is an asset ….. so are lottery tickets. Gold’s value should be based on its used to manufacture things ….. It’s become an “investment” because fools want to turn metals into a lottery.

After the British courts are finished with Libor … their next target should be The London Gold Market Fixing Ltd. and the LME. (London Metal Exchange). Price fixing is everywhere.

It’s like diamonds market. The suppliers limit the amount available to ramp up the prices. There are no free markets …. Capitalism is just a scam.

#220 jess on 11.03.12 at 7:34 pm

some new vocabulary all courtesy of the cftc

the “hammer- “banging the close”,”move,” “whack” and “bully”

#221 Canadian Watchdog on 11.03.12 at 7:35 pm

What a joke. TREB waited to release their report today (low-traffic non-working day) just to avoid a negative headline getting plastered all over Bloomberg, The Wall Street Journal et al during market hours.

GTA REALTORS(R) Release Monthly Resale Housing Figures

Now here’s the odd thing: TREB reported that sales declined by 7.1% and 15.6% adjusted for an two extra days, making a net difference of 8.5%. This means that on two days of October there was roughly 585 more sales then Oct 2011.

Now if you look at the two days that were included (Tuesday Oct 30th and Wednesday Oct 31), and reference for listings on Oct 30th and Oct 31st, you’ll notice there was five total listings posted on those two dates, which is abnormally low considering Tuesday is the busiest day for listings.

What’s TREB hiding? Why manipulate listings? Right here.

#222 Denise on 11.03.12 at 7:40 pm

#144 Coastal
I live in Victoria & lately am finding that Channel 12 news (CTV or the “New VI”) is more factual regarding the true Victoria RE market than Channel 6’s CHEK news. Channel 6 are major real estate shills as a fair bit of their advertising is from real estate developments (West Hills, Sun River for examples). Ch. 6 had that Carol Crabb RE Victoria President on, ugh – what total BS, nauseating.
So – maybe try Channel 12, I think we’ll switch from Ch. 6 (CHEK) as they’re not giving the facts on Victoria Real Estate.
BTW: a house that’s been for sale in the neighbourhood has dropped its price by $70K since it was listed 7 months ago. Still too high, delusional sellers.

#223 Smoking Man on 11.03.12 at 8:04 pm

#222 Industrial Guy on 11.03.12 at 7:25 pm

It’s like diamonds market. The suppliers limit the amount available to ramp up the prices. There are no free markets …. Capitalism is just a scam.
Of course its. Welcome to the machine.

So if you know this what have you do to capitalize on the knowledge, can’t beat em, why not join them has always been my motto.

Now get out of the stands, put up some loot and go hit one out of the park.

#224 Van guy on 11.03.12 at 8:07 pm

If gold is going to tank, is it a good time to buy the gold bear etf?

#225 Smoking Man on 11.03.12 at 8:13 pm


#226 Hugh Jasz on 11.03.12 at 8:27 pm

Garth’s response to #154 Rasputin on 11.03.12 at 12:52 pm

‘Grizzled investing vets’? Hardly. You should meet the young people I do, who have been traumatized by this trash talk, lured into a volatile asset and mistaking gambling for investing. — Garth

I recently listened to the sales pitch that some of these pirates made on Talk 640 on a Sunday morning.

Clearly gold, silver, platinum, palladium and fancy coloured diamonds are a “can’t lose” proposition consistently bringing index beating returns 15 to 30% per year, hit $5000 over the next few years, etc. ad nauseum.

In my humble opinion, they’re tip-toeing around criminal fraud, but recent charts let them make a convincing argument to an unsophisticated amateur with a few thousand looking to turn it into a million quickly.

I think there will be a time to start buying gold again in the not too distant future, but the real grizzled vets are going to place orders carefully and keep it to a sane percentage of their holdings.

As for physical gold, the small timers can’t win.

Check out what it really costs when you buy one or two ounces at a time.

Check out what you can sell it for, and what your net return is after fees, commissions, etc.

It looks to me like you’re dealing with a paper loss of around 10% before you’ve even started.

Buy carefully, young Jedi.

#227 Daisy Mae on 11.03.12 at 8:31 pm

#164M G — “…Usually people that speak truth are considered nuts. Coming from you, being called nuts is a compliment. Please post this. thanks

Blessed be thou. — Garth


Yeah, well…ain’t it the truth?

#228 OkanaganInvestor on 11.03.12 at 8:48 pm

#70 Nostradamus Le Mad Vlad on 11.03.12 at 12:14 am,

#46 OkanaganInvestor — “. . . where Germany will be disappointed when it learns the gold is gone.” — Correct. See link — Germany’s Gold Poof!

Noted and thanks.

#229 Gunboat denier on 11.03.12 at 8:55 pm

216 Daystar – thanks for the extra research. And Romney
scares me too.

222 Industrial Guy – that reminds me – must check my tickees…..

#230 OkanaganInvestor on 11.03.12 at 8:57 pm

#64 FTP – First Time Poster on 11.02.12 at 11:50 pm,

“He’s a scientist and looks at what empirical data is telling him. His arguments are well thought out and succinct. I’d suggest you watch just the beginning and decide if your take on the US and its recovery really is well founded.”

Best lecture on factors for global economic growth I’ve seen. Thanks.

#231 Boomer21 on 11.03.12 at 9:03 pm

Old Man: who talks like that, “as women do” “as they” “as women know” etc, etc. Good god that would drive me crazy after 5 minutes if you actually speak “as” you write. Does anyone else think it is a strange way to write or speak? What gives Old Man? OK, Saturday night and nothing to do or nothing on TV, rant over. Oh, BTW, 5% of portfolio in Argonaut Gold stocks. Had Yamana but sold at 40% gain, hope to do that again, it’s fun.

#232 Bottoms_Up on 11.03.12 at 9:39 pm

#137 Mark on 11.03.12 at 11:27 am
You conveniently left out the price of gold in 2000. About a 50% loss on your 1981 number. What does that tell you?

#233 JRH on 11.03.12 at 9:43 pm

#28 What’s the difference between a driller and a cowboy? With a driller the shit is outside the cowboy boot!

#234 Bottoms_Up on 11.03.12 at 9:48 pm

#135 renters rule on 11.03.12 at 11:13 am
Romney is like a box of chocolates, you never know what you’re going to get.

#235 Bottoms_Up on 11.03.12 at 9:54 pm

#131 M G on 11.03.12 at 10:17 am
Stating: “trillions of govt debt” means nothing. You have to provide context for the magnitude of the debt. And Garth has stated before, government debt is not meant to be paid back….it just needs to be controlled.

#236 Awesome on 11.03.12 at 10:08 pm

Ok I know everyone is talking about gold… But on the positive front… It’s been an interesting Saturday. Price drops galore in south Mississauga, south east oakville. Seriously shocking today. I knew those mpac assessments would be a shocker this week and I was right. Prepare for even more listings. Yes there are some stubborn people out there.. But like I’ve always said. It’s one thing to build the house, it’s another thing to Try to maintain it with those high property taxes that are here to stay. It just seems like everyone was in cahoots and price dropped at once :) better for us. I’m just watching the market on the way down ready for the bottom.

#237 Smoking Man on 11.03.12 at 10:14 pm

I’m a supper Sociopath and proud of it.

Had un-fan send me a scathing email calling me a Sociopath with all kinds of links to resources proving it, was signed with a PHD in phyops. Thanks for making my day mortal schooled one.

Sociopath Characteristics!!!!

•Glibness and Superficial Charm Manipulative and Conning They never recognize the rights of others and see their self-serving behaviors as permissible. They appear to be charming, yet are covertly hostile and domineering, seeing their victim as merely an instrument to be used. They may dominate and humiliate their victims.

•Grandiose Sense of Self Feels entitled to certain things as “their right.”

•Pathological Lying Has no problem lying coolly and easily and it is almost impossible for them to be truthful on a consistent basis. Can create, and get caught up in, a complex belief about their own powers and abilities. Extremely convincing and even able to pass lie detector tests.

•Lack of Remorse, Shame or Guilt A deep seated rage, which is split off and repressed, is at their core. Does not see others around them as people, but only as targets and opportunities. Instead of friends, they have victims and accomplices who end up as victims. The end always justifies the means and they let nothing stand in their way.

•Shallow Emotions When they show what seems to be warmth, joy, love and compassion it is more feigned than experienced and serves an ulterior motive. Outraged by insignificant matters, yet remaining unmoved and cold by what would upset a normal person. Since they are not genuine, neither are their promises.

Some excerpts and my reply: Think Doc was female.

PHD: What Sociopaths want: They want to win. Take away love and relationships and all you have left is winning the game, whatever the game is. If they are in business, it’s becoming rich and defeating competitors.

SM: Ah seriously lady, would you love me more if I was like you. A fat cow walking quietly down the plank to the kill floor singing a song.
We live in a competitive world, where the weak and dumb live in poverty with ugly wives and the strong live in luxury with hotties. It’s a fact, I lie to others not to myself.

PHD: “There is no known cure or therapy for sociopath. In fact, some evidence suggests that therapy makes them worse because they use the therapeutic interactions to learn more about human vulnerabilities they can then exploit. They learn how to manipulate better and they learn better excuses that others will believe. They don’t usually seek therapy, unless there is something to gain from it.:

SM: Hello you idiot, what is wrong with that line of thinking, where you beaten as a child. Do you know what it’s like to go bankrupt with 3 small kids, and all of a sudden know wants to know you or help you. You have a choice, fold the hand and go to a lonely bin or fight back. I fought back, and it made me strong.

PHD: Sociopaths don’t have as much to think about as normal people, so they can be very clever and conniving. Sociopaths aren’t busy being concerned with relationships or moral dilemmas or conflicting feelings, so they have much more time to think about clever ways to gain your trust and stab you in the back, and how do it without anyone knowing what’s happening.

SM: when I stab someone it’s in the face and it’s because they stabbed me first and they know it. You are exhibiting serious signs of paranoia, you should get some help doc., Where your parents loaded, put you threw obedience school, you have never experienced the highs and lows I have, you go through life on a boring safe plane, not realizing that death is not far away for all of us, I say sha la la la live for today. But then again reading your links Boredom and adventure seeking make one bad ass sociopath.
Doc, what is wrong with your brain. I can save you, you can come and sit on my couch, cause you don’t have the mentally capacity to help anyone. You’re a weak nieve idiot preaching from a pulpit of fear and lack of real world experiance, you will do more harm than good..

She never answered back. What is wrong with these people.

#238 broadway skytrain on 11.03.12 at 10:29 pm

193 Old Man on 11.03.12 at 4:01 pm
The only gold I own is a bracelet in 18 carot, and a diamond ring with a two carot diamond;
note to self : when pubically boasting about the specifications of one’s man-jewlery – don’t spell the units of purity(gold) or mass(gems) like a misspelled vegetable.

#239 love_depends on 11.03.12 at 10:35 pm

I like David Rosenberg’s take on the job report:

#240 Network Admin on 11.03.12 at 10:39 pm

> Romney is going to win and it won’t be a squeaker
> Based on what? — Garth

Canadian psychic Blair Robertson picks a winner in next week’s U.S. presidential election

#241 love_depends on 11.03.12 at 10:40 pm

BTW he is not someone you’d call a “gold bug” ..
he says gold will go to $3000.

The article was written eight months ago. He was wrong. — Garth

#242 Nostradamus Le Mad Vlad on 11.03.12 at 11:16 pm

#205 Davey Boy — “Fear, fear, fear, and more fear. All we are is dust in the wind, never truer words spoken” — Well said. The physical life is way too short to become engulfed by stuff that ‘happens’, which no one can change anyway.

As long as one has a roof over their head, just enough to take care of family, ourselves and friends there is not much more needed to have an adequately good life. Good post.
April 3, 1957 From British humor magazine Punch. Only change is a US dollar sign for a British pound; Apparently, this isn’t a hoax. In court while banxters and lawyers have panic attacks; Central banks debasing / facing; Mitt Romney’s bailout Enuff said; Germany “There is only one way to deal with the global debt problem and that is to shut down all the private central banks issuing the public currency as a loan at interest, which by design creates more debt than they create money with which to pay that debt.”; #231 OkanaganInvestor — FYI — Gold run by a central bank? Along with The Other Side of Gold; Just For Fun The first 12 hours of a US$ collapse; EUSSR New 20% VAT on homes (renting will be way cheaper); Stockton, CA Garbage economy; A Financial Superstorm awarded to Oromneybama; Russia to build Siberian gas pipeline to Pacific; Martha Stewart Still alive after all these years; Largely ignored or unknown Another fiscal crisis.
2:39 clip Chris Rock endorses Barry Obama; Iran Their scientists are smarter than given credit for. World’s first VTOL drone; 2:52 clip The rich get sicker, and they’re running / ruining the world; COINTELPRO for several things, incl. ‘net control; Roundup and others directly linked to Parkinsons; Smart Meters and EM Radiation As good as Monsanto’s stuff!

#243 Barry Lainof on 11.03.12 at 11:22 pm

And it’s the largest, most powerful economy in the world, and will remain so for your lifespan. — Garth

So true, so sad.

#244 love_depends on 11.03.12 at 11:40 pm

“Prove any collusion in US government labour numbers. I’m fascinated to know. — Garth”

Garth prove that they are real !

Unbelievable comments today. — Garth

#245 love_depends on 11.03.12 at 11:54 pm

BTW he is not someone you’d call a “gold bug” ..
he says gold will go to $3000.

The article was written eight months ago. He was wrong. — Garth

You are a funny man are dismissing a guy
that advises clients whose net worth must be at least
$3,000,000 before he even talks to them.
BTW if you watched his video :
he doesn’t put any time frame on his prediction .

That’s handy. — Garth

#246 Realtors in an all out PANIC! on 11.03.12 at 11:59 pm

Crash Test Dummy on 11.03.12 at 10:15 pm #207 Canadian Watchdog:

What part of moron don’t you get. None of your blatherings carry any traction. You reply with non sequitur after non sequitur trying to appear relevant, while coming off as desperate and uninformed.

Doomsday retard.

Realtors like you are in an all out panic as the housing crash continues to get worse as many realtors haven’t made a sale in months. Word is some realtors have gone bankrupt and lost their homes. It’s going to be a NASTY housing crash realtors , a NASTY crash!

#247 Realtors in an all out PANIC! on 11.04.12 at 12:04 am

Canadian Watchdog on 11.03.12 at 2:50 pm #165 Crash Test Dummy

CMHC Newsroom

Letter to the Editor — National Post — “Good Reasons to Start Now with CMHC Privatization”
October 31, 2012

CMHC Response to Reuters
October 18, 2012

CMHC’s Response to Article on emili
October 11, 2012

And then…

Montreal Gazette – Mar 5, 1980: CMHC faces severe losses: Secret report

Edmonton Journal – Mar 7, 1980: CMHC ignored RCMP warnings

Ottawa Citizen – Oct 19, 1981: CMHC denies dire predictions

We’ve seen this rebuttal before, because when there’s something to hide, you refute it until you can’t.

Now have a look at this chart and remember Genworth’s insurance-in-force was reported at $295 billion as of Q3, just $5 billion shy of its limit. Now we await CMHC’s Q3 report.

Note: It is impossible for CMHC to manage its risk with a limit cap because in order for the market to remain liquid, requires more high-ratio buyers entering the market. Not hard to see what spring sales will look like as most banks, it not all, will be refusing high-ratio loans, leaving first-time and cash-strapped buyers to mortgage with brokers who will be charging a hefty premium.
Good job Canadian watchdog

It’s going to be a NASTY crash realtors , a NASTY crash!

#248 Freedom85 on 11.04.12 at 12:07 am

Gold is in a bull market. Period. Until it isn’t. The metal has risen from 252 to 1678 today. Nothing goes straight up. The bull market in gold is digesting gains and consolidating. The gold stocks are getting ready to go up – big time. Need to pick’em right but soon within the next few weeks, maybe months, we’ll be off to the races. I ask you this. What has changed? minor uptick in the US? all bear markets have bull market cyclicality and that is what is happening in the US right now. When policies change to reflect better economics, then maybe the bull market in gold will be complete, but not any time soon. If the US gains strength, I argue gold will along for the ride. Gold’s bull will really get going when the final top in the bond market is in, around the time interest rates start climbing. When the US (and the rest of the world)finally starts making policy which strengthens their long term outlook, I will agree that it’s time to move away from gold and other tangibles. But QE to infinity is no such move. So Garth, your comments are only opportunistic bashing supported by a big down day. What else is new. You never mention it when it goes up by the same amount. So buy gold and gold stocks and go for the ride of your life.

#249 Canadian Watchdog on 11.04.12 at 12:13 am

#243 Crash Test Dummy

It’s gonna be a nasty crash Dummy, A NASTY CRASH!!!

#193 Old Man

“The only gold I own is a bracelet in 18 carot”

Have you figured out why it’s returned over 4800% since 1970 yet?

#250 Grim Reaper/Crypt Speculator on 11.04.12 at 1:24 am

#242 Smoking Man on 11.03.12 at 10:14 pm

I’m a supper Sociopath and proud of it.

Pick a number between 1 and ONE..and don’t forget to shine your shoes

#251 victor y on 11.04.12 at 1:28 am

Think for one second, all the central banks have done in the past 10 years is kicking the can down the road. Where would this can go?Currency market might be the one that will have problem next. Europe is fine now. where would USD go in the next 2-3 years?

#252 Ronaldo on 11.04.12 at 1:52 am

Excellent interview with Donald Coxe, Global Stratedy advisor to BMO Financial Group on gold, etc.

#253 cynically on 11.04.12 at 2:05 am

#190 Hoof-Hearted – It’s easy to tell from where you got your information – the radical right Republic Broadcasting Network – and if you believe everything they print or broadcast, then you are quite stupid. Remember all these dismal “facts” which you seem to believe were caused by 8 years of Bush economics and his two unpaid-for wars. Be honest, man, think! The same can be said for some far left publications. The clue is usually when there is absolutely nothing positive said about the other side. We know that neither one is always wrong unless it is Fox News(joke).

#254 eagle eyes on 11.04.12 at 3:22 am

#213 Salonist

Hong Kong recently imposed at 15% stamp duty to curb non-resident foreign speculators and avoid a real estate bubble. 90% of Mainland China buyers have decided against buying in Hong Kong for the next 6 months.

Hong Kong (which is a special territory of China) is discouraging HAM from Mainland China from buying RE. Whereas Canada freely allowed HAM to inflate our real estate bubble without consideration.

#255 Red Tarted on 11.04.12 at 3:39 am

Wish a buck was still silver, back when the country was strong ….

#256 Corban on 11.04.12 at 3:58 am

Grade “A” trolling this weekend! I counted 54 “— Garth”s which has to be one of the higher counts.

My old man was in town and I was showing him the newer condo developments near the bow river. It’s amazing how few units have lights on, on a weekend. The riverpointe still hasn’t sold out according to the developer’s billboard on the SW edge of the property. Apparently it’s booming here in Calgary if you listen to the realturds but i’m still skeptical.

#257 futureexpatriate on 11.04.12 at 4:12 am

“Unbelievable comments today. — Garth

People never remember the Kool-Aid at Jonestown was sweet and went down easy. Unfortunately, folks in Canada are able to watch Fox.

#258 martin9999 on 11.04.12 at 5:08 am

Romney is going to win and it won’t be a squeaker

Based on what? — Garth

equties will perform best with a republican rather then a scary democrat

#259 martin9999 on 11.04.12 at 5:10 am

option / future = love it, pure liquid

#260 martin9999 on 11.04.12 at 5:10 am

learned it here

#261 daystar on 11.04.12 at 6:35 am

#234 Gunboat denier on 11.03.12 at 8:55 pm

Scares you lol, now why would Romney do that?

Readers, I’ve followed the U.S. election and watched the last 3 debates and polls somewhat (I’m a political junkie) and its been entertaining. And I’m bias, I want Obama to win but all bias aside when I look at whats happening from the campaigns to the polls in electoral votes what I see forming is an Obama win and its a squeaker.

It looks tight but Obama repeats and when its all over, the media will be talking about two main events. The impact Hurricane Sandy had on the election and Ohio. The negative advertizing that Romney has tried in Ohio is a total flop. Ohio was a statistical tie but now there are late polls that have Obama up by 6 points and it comes down to this:

No Republican president has ever won without Ohio.

The swing states will decide this election as has been in the past. Pensylvania, Ohio, Michigan, Wisconsin, Iowa, these states are most likely going Democrat while Virginia, North Carolina and possibly Florida (a big state) will go Romney while Nevada, Colorado and New Hampshire are up for grabs. Obama can lose Nevada and Colorado, the vote rich state of Florida and New Hampshire and still wind up with 270 votes, just enough to win. I predict Obama wins with 274.

Oh, and has there been a standout political star in this election? I would have to think Joe Biden. Romney had true momentum until they ran into Biden in the vice presidential debate. Joe has been elected for more than 40 years running for a reason, mostly as a senator serving under 8 presidents, first time at the age of 29. If folks want to take the time to watch a true pro in the game, its worth a watch as his style is a force. There’s a full 41 minutes of video in the link below and well worth the watch if readers are into politics in any way:

#262 syfon on 11.04.12 at 8:13 am

Hi Garth
200 + comments
works like a swiss watch. just mention gold

#263 Mark on 11.04.12 at 8:14 am

This argument put forward by Garth and many blog dogs that soverign debt isn’t meant to be paid back only managed never address how it will be managed when interest rates rise.

Also do the Asians know they’re never going to be paid back?

#264 Rob now in Nova Scotia on 11.04.12 at 8:36 am

Jim Sinclair is good. I like myself and

I’m amazed at how this blog works. Gold goes from $1550 to $1770 from June to October (a gain of 14%) and Garth is quiet the whole time. I wonder why? Then it drops 11% and viola, gold is not recommended.

Monday’s blog will no doubt remind the sheep that gold, like houses is driven by emotions forgetting that gold has functioned as money and store of value for thousands of years whereas houses become tear downs after a while.

Then we’ll pretend that every government figure is stunningly accurate while belittling the franken number index known as the Housing Price Index. Like the CPI and other BS government numbers, the HPI is just a number published by some “respectable” organization. I remind everyone that the CPI does not include food and fuel because they are “too volatile”. Forget the fact that most Canadians over a year spend more on food and fuel than just about everything else. Instead, let’s include the prices for washing machines and other items that we buy once in 10 years and tell everyone that the CPI is a measure of the prices that consumers pay. Wow. Ditto the NFP number. To include that figure as gospel is no different than believing the CREA’s HPI index expect that the CREA has a vested interest, while the government apparently doesn’t (*well, except for calculating increases to OAP and CPP, public servant pay increases and that sort of stuff*).

No, I won’t waste my time telling everyone to buy silver anymore and will instead wait until the greaterfools that bought Facebook and diversified like they were supposed to wake up and realize that inflation is not far off, it is here.

Large-scale silver investors are even more misguided than those who worship gold. If you fall victim to this thinking, keep the weighting small, and rebalance constantly to harvest gains from your original position. Any other strategy is gambling, not investing. — Garth

#265 Bottoms_Up on 11.04.12 at 8:40 am

#250 love_depends on 11.03.12 at 11:40 pm
Wow, that takes the cake. Why don’t you prove that you are real, ‘love_depends’. For all we know you could be a troll-bot.

#266 Bottoms_Up on 11.04.12 at 8:41 am

#268 Mark on 11.04.12 at 8:14 am
They do get paid back, with interest payments.

#267 Bottoms_Up on 11.04.12 at 8:48 am

#242 Smoking Man on 11.03.12 at 10:14 pm
That is hilarious, someone trying to get help for an on-line persona. I’m with you on this one, that ‘PhD’ needs some help.

#268 Kip on 11.04.12 at 8:59 am

“Thirdly, bullion bunnies love to spread the myth of hyper-inflation, arguing that all this government money-printing represented by central bank spending will surely make paper money worthless”

The US dollar has lost approximately 30% of it’s value against the Canadian dollar over the past 3-years so your argument that printing money by the US Fed won’t make their currency worthless does not hold. It’s happening before your eyes.

Appreciation in the CAD is fueled more by commodities and interest rate spreads than the US money supply. — Garth

#269 neo on 11.04.12 at 9:06 am

Currency has always been backed by the power to tax. That is not ‘nothing.’ — Garth

Again Garth. How is that “power” working out in Greece, Italy and Spain. It means “nothing” if the tax base refuse to pay.

Then they get the country they deserve. It will self-correct. — Garth

#270 Mr Buyer on 11.04.12 at 9:10 am

#259 eagle eyes on 11.04.12 at 3:22 am
#213 Salonist
Whereas Canada freely allowed HAM to inflate our real estate bubble without consideration.
I see the mythic HAM is still being bandied about. IFF HAM was any kind of force behind this epic real estate bubble I would liken that force to the forward momentum a housefly adds to a pinned corvette as the fly lands on the back window of said pinned vette (I am talking about the bat-mobile styled vettes of my childhood). Free money and 40 year mortgages are the sponsors of this horrific real estate bubble. As for maintaining the bubble, it becomes an exponentially more difficult and expensive proposition as the bubble progresses. Now we are witnessing the collapse.

#271 Herb on 11.04.12 at 9:34 am

#266 Daystar,

I’m rooting for Obama too, mainly because I find the merciless mendacity of the Republican Party offensive (that goes for you too, CPC!) and he would be the lesser evil.

Hope you are right about the narrow win. Republicans have no qualms about stealing elections, and Obama blew it in the first debate. You’re right about Biden – Obama should be Mr. Vice.

In a way it doesn’t matter: it’s not about politics anyway, only about political advantage. And their sheeple have no more say in what happens to them than ours do.

Darn, too early in the day to get drunk!

#272 Eaglebay - Parksville on 11.04.12 at 9:35 am

#268 Mark on 11.04.12 at 8:14 am
“Also do the Asians know they’re never going to be paid back?”
The Asian foreign debts are a trade off for our foreign debts.
The bulk of the US debt is owed to Americans.
As for interest rates increasing, it only applies to future debt.

#273 Eaglebay - Parksville on 11.04.12 at 9:47 am

Too many Neanderthals on this blog this weekend.
Whatever happened to common sense and analytical thinking.
People throwing around opinions and faux facts without critical thinking and knowledge.

#274 rosie on 11.04.12 at 10:12 am

The “Asians” are paid back every time we buy their stuff.

#275 mark on 11.04.12 at 10:20 am


historically, one thing that has benefited gold has been negative rate of return which has been prevalent for quite some time. As long as money does not return anything positive, gold can be seen as a a small portion of a portfolio. Of course, gold bugs tell us to sell everything and just buy gold, and given the three reason you sited, and the only reason that is out there supporting gold (negative rate of return), just being in gold makes little sense

After all, if it is the rate of return that is the driver, there are other assets that beat it.

But goldies usually do not use numbers and reasons like tha, they say the financial system is on the verge of collapse and all money will disappear poof!

fears sells, eh? :-)

#276 Tony on 11.04.12 at 11:06 am

Re: #253 Freedom85 on 11.04.12 at 12:07 am

What kind of stupid advice is that? Number one stocks will be hammered to the downside after the U.S. election as will commodities including both gold and silver. That really wouldn’t seem to bode well for almost all gold stocks except for some of the very small juniors.

#277 John Prine on 11.04.12 at 11:14 am

Romney is going to win and it won’t be a squeaker

Based on what? — Garth

equties will perform best with a republican rather then a scary democrat

Since 1948 nearly all markets have done better with the Democratic Party in control. Odd how many think that the Republicans will make them money….

#278 Tony on 11.04.12 at 11:14 am

Re: #250 love_depends on 11.03.12 at 11:40 pm

Garth don’t you get it? America has taken a page out of the WWE playbook, cheat to win. From what i’ve seen that only seems to have a good ending in movies not in the real world. The entire world knows America will either be in a recession or depression next year. That’s a forgone conclusion. Wait another 4 years and the cycle of lying will repeat all over again.

Recession, maybe (but unlikely). Depression, not in this lifetime. — Garth

#279 Really on 11.04.12 at 11:18 am

Everytime you write stuff like this credibility starts to fall. I don’t care about Gold, but its the right play to have a good chunk of it.
Labor reports prior to an election are irrelevant. How is it that you don’t get that?
USA real estate – yes its rising. Look at where its coming from.
The velocity of money is not increasing because the situation is THAT BAD STILL. It will have its day and sooner than you think.
Europe is a disaster. They have systemic issues and an entitled, enabled populace and leaders who don’t give a sh*t about telling the truth – like us, but they are at an advanced stage.
There is no solution there that is going to be acceptable but to “print” into oblivion. Yes that will make the USD attractive – FOR A WHILE – until its also exposed for the crap that it is.

The US will NOT be able to finess their outrageous printing and debasing in a manner that money velocity wont be extreme.

You are wrong on Gold (so am I I only have a few ounces total). But you are even more wrong on your economic statements about the USA and Canada, and you keep pushing it.

You think the comments here are all gold bugs – thats wrong too Garth.
People read you because you are excellent writer in general, entertaining, but most of all because you are a shining light of true analysis on REAL ESTATE markets.
Every time you write about gold and the future economic condition of the world however you lose your credibility.

The worse part though Garth is you keep setting up “doomer” and “gold bug” strawman and just as easily think you are knocking them down.

The people who read your blog AND who think about the economy and the times we are in cannot understand how you can be so right about real estate (because they saw it too Garth) and yet be so different (wrong) about virtually every other economic view and further even substantially off about the future outlook.

It’s amusing how people who agree with a position laud it as being ‘right’, and when they disagree they scorn the other person as ‘wrong’. This is the arrogance of self. We all share it. Fact is, gold and real estate are strikingly similar asset classes, and have a similar fate ahead. Another fact is the US is recovering and will continue to do so. The American dollar will remain the global reserve currency, as as it strengthens over the next few years, gold could be devastated, while US housing shoots higher. The dark, black-and-white economic view many are exhibiting here this weekend is identical to that of condo buyers who see only sunshine ahead. Both are naive. But that’s only my opinion. Disagree if you will, but try do to be more convincing. — Garth

#280 Tony on 11.04.12 at 11:29 am

Always remember gold and stocks usually go in opposite directions so the prudent thing to do is short stocks not gold and silver. Longer term when everyone knows America is in either a recession or depression then you’ll see gold revert back to the 500 dollar mark or less. Short term gold could either be flat or move up as stocks fall.

They are now far more correlated. — Garth

#281 not a goldbug anymore on 11.04.12 at 11:31 am

I am switching to bitcoins

#282 FTP - First Time Poster on 11.04.12 at 11:46 am

#147tkid – That is by far the most cogent video by Martenson I have come across in awhile. Chris Hedges is a great speaker as well and his most recent video is worth watching:

In it, he talks about the decline of America – both in present and historical terms. Garth, I cannot believe you think the US will slowly recover. There is no empirical data that conclusively speaks to that, but rather the opposite. We’re witnessing the decline of an empire – the same that occurred with the Romans, the Ottomans and the British. There is no other path for the US, only down unfortunately.

I disagree. And you should fervently hope you are wrong. — Garth

#283 Devore on 11.04.12 at 12:00 pm

#38 No Gold knowledge

How nice of you to take a nice steaming dump on someone else’s blog. Don’t got your own?

So, Mr Gold “Investor”, what is your exit plan? What do you plan to do what your piles of gold? When do you sell? What’s your target? What’s your trigger? What’s your stop-loss? What’s your hedge? Or are you waiting for armageddon so you can walk the post-appocalyptic streets with gold bars in your pockets?

#284 JOVAN on 11.04.12 at 12:01 pm

Try to search google for:

gold (silver) chart inflation adjusted
us home prices in gold (silver)

or search it for Eric Sprott

#285 squidly77 on 11.04.12 at 12:07 pm

I have never understood the mentality of those that bash and insult an author that creates a blog for free public consumption.

I guess with some people if you don’t write exactly what they want to hear you become their personal enemy. Its really strange behaviour.

If I happen to come across a blog author I don’t agree with, I simply don’t visit the site anymore. Its really quite simple and far less time consuming than posting mindless insults that no one cares about except you the one that posted them.

P.S. No one cares.

#286 Canadian Watchdog on 11.04.12 at 12:14 pm

#281 Really

The dark, black-and-white economic view many are exhibiting here this weekend is identical to that of condo buyers who see only sunshine ahead.

That’s exactly his point Garth. You portray gold owners as doomers or juxtapose them to condo owners and tea party activists, when fundamentals and facts are miles apart. I don’t know if you get a kick out of it or if nobody is presenting a strong argument against your view, but you are dead wrong on gold.

If you don’t understand the gold market, you’re better off saying so.

Understand it fine, thanks. — Garth

#287 mel in victoria on 11.04.12 at 12:15 pm

OLD MAN #161

gold and silver as money:

South Carolina Approves Gold and Silver as Money

“Back in February, CNN reported on the growing allure of the “shiny new currencies made of silver and gold” as over a dozen states across the nation contemplated an alternative currency.

Fast forward two months into present day and the South Carolina House has given the go ahead to use gold and silver as real money.

As local and state economies attempt to ward off devastating fiscal disasters amidst the plummeting value of the dollar, lawmakers in states all over the country are considering passing laws that would make gold and silver legal forms of currency.

Last year, Utah led this movement by becoming the very first state in the United States of America to officially legalize silver and gold coins as legal tender.”

If you google ‘silver and gold as money’ you’ll see how this idea is growing esp in the US

Have a nice day..

You can’t buy gasoline, food or shelter in any US state for anything other than credit or currency. And never will. — Garth

#288 Doug in London on 11.04.12 at 12:22 pm

The time to buy gold was in the late 1990’s and 2000, and the optimum was in about June 1999 when it fell to about $230 per ounce. Yesterday and today I set the clocks back to EST. Some clocks also have the year, and guess what? It’s now 2012, not the late 1990’s or 2000 (or Y2K, as it was also known) anymore and NOT the right time to buy gold.

#289 Hoof - Hearted on 11.04.12 at 12:31 pm

#264 martin9999 on 11.04.12 at 5:08 am

Romney is going to win and it won’t be a squeaker

Based on what? — Garth

equties will perform best with a republican rather then a scary democrat


Romney will win….Google DIEBOLD…the fix is in.

Obama’s role was to bail out banks..Romneys is to get the Iran war going.

#290 EIT on 11.04.12 at 12:39 pm

I have zero problem with an America in decline. Maybe they’ll stop killing people. That would be nice.

We’ll be killing each other. Big gain. — Garth

#291 Devore on 11.04.12 at 12:39 pm

#78 The Real Jimbo

I don’t see how the experience of the 30s has any bearing on today.

Roosevelt repriced gold from $20 to $35 (which might have had something to do with the bottom line of gold companies) and made the holding of gold by citizens illegal. Gold holders realized a massive loss as they were forced to sell their holdings, which they might have recouped had they immediately turned around and bought gold companies.

I’m not sure what parallels you are drawing between the 30s and today. If you’re going to learn from history, learn the right lesson?

#292 Gunboat denier on 11.04.12 at 12:45 pm

270 Rob

“Forget the fact that most Canadians over a year spend
more on food and fuel than just about everything else. ”

Not even close in my case Rob.

My mortgage (when I had one), fuel and electricty, and my food bill roughly totalled MY MONTHLY TAXES not including property or consumption taxes.

#293 Canadian Watchdog on 11.04.12 at 12:49 pm

“Understand it fine, thanks. — Garth”

Not really. You’re still under the impression that a printing press and military power dominates a reserve currency’s international role, when in fact, it is global confidence that gives economic power to a reserve currency. North America’s population is only 7.5% of the worlds population. Remember that.


China-Australia Agree on Bilateral Currency Swap Agreement

Chinese, Russian officials agree to strengthen economic ties

India-China bilateral trade set to hit $100 billion by 2015

Chinese, South African presidents discuss bilateral cooperation

China and Brazil strike $30bn bilateral swap deal to reinforce economies


Russia is bulking up its gold reserves

South Africa records increase in value of gold reserves

Brazil’s Gold Reserves Rise For First Time Since 2008


You’ll understand the importance of that stupid yellow metal one day Garth.

I heard that in 1981. How old were you then? — Garth

#294 DonDWest on 11.04.12 at 12:52 pm

As predicted, gold/silver went through a momentarily bull run based off the fear of QE3, however it seems the inertia for that is now finished.

As of two weeks ago I’ve completely vacated from gold/silver. Sentimental, seeing that I’ve been playing this market since 2006 and as a young person it was truly the only market I could afford entry.

At the time I first invested in precious metals, nobody was even aware of their existence. Sometime around 2009, I would say 2% of the population was investing in gold and silver. Now in late 2012, as this post has proven, it seems every moron possible is now buying gold/silver. That’s the time to get out – glad that I did.

#295 Form Man on 11.04.12 at 12:53 pm

#295 hoof

Actually, the facts show that both the car companies and the banks were bailed out during the George Bush regime. Obama continued cleaning up the banking mess, and put both GM and Chrysler into bankruptcy.

#296 Mark on 11.04.12 at 1:27 pm

#278 Eaglebay –

As for interest rates increasing, it only applies to future debt.

Wrong. The government borrows the same way we do, the rates will reset. They haven’t locked in this historically low rate for eternity. If the government tried that the rates would skyrocket immediately.

You folks need to counter your Garth based information with a little Peter Schiff.

#297 Smoking Man on 11.04.12 at 1:41 pm

#274 bottoms up

no kidding. testomont to my. writing skills and character devlopment. we live in strange world . or im awsome. . my money on one

#298 Canadian Watchdog on 11.04.12 at 1:46 pm

I heard that in 1981. How old were you then? — Garth

What were interest rates in 1981?

What was the national debt-to-GDP?

Someone is in denial, and it’s not the goldbugs.

#299 gladiator on 11.04.12 at 1:47 pm

OT for a Sunday:

Q: Where does Santa make his first stop on Christmas?
A: In China – to fill up his bag.

Have a good week everyone.

#300 Devore on 11.04.12 at 1:49 pm

#185 luke8929

Did someone figure this out in advance or was it pure luck?

I think the question is whether this is an unintended consequence (cutting of hours for workers to keep numbers below an arbitrary government-imposed threshold)? I think most likely so. Politicians and bureaucrats are fond of making rules to achieve certain goals (social engineering and incentives) but unintended consequences always foil them, producing a nearly opposite result to the intended one. Freakonomics talks about this a lot.

#301 AprilNewwest on 11.04.12 at 2:01 pm

#291 squidly77
I wholeheartedly agree with you.

#302 new canadian on 11.04.12 at 2:04 pm

Gold prices are determined by paper certificates, not the real thing. Fake financial trades are so big, they drive prices, not real physical gold. This will change!

Secondly, US keeps printing money but money doesn’t get injected into economy? They print it to actually devaluate dollar.
Global big banks are being bribed with zero-interest billion dollar loans from FED just to keep US dollar as primary currency. This will change too.

#303 Coraline on 11.04.12 at 2:05 pm

Canadian Watchdog #226: Good hypothesis. I thought it was plausible that new listings were low on October 30th because it was the day after Sandy, but they should have shot up again on the 31st. Clearly, TREB held off posting the new listings so they could get a better sales/listings ratio for October.

Plus, in following Toronto real estate for 15 years, I have never known TREB to issue a press release for monthly sales on a Saturday.

Who knows what else they will get up to? Because Canada has such poor data on virtually everything to do with the housing market, we are largely reliant on what the boards are willing to provide.

#304 Canuck Abroad on 11.04.12 at 2:05 pm

Max Keiser, watched all on RT and PressTV, as been picked up by China and begins broadcasting there in 2013. Nice profile of him here in the Independent.

“…Keiser has a decent record on prediction. He was in Reykjavik, issuing bleak warnings, months before Iceland’s catastrophic economic collapse. He was talking about Athens years ago, predicting civil unrest and what now appears to be an inevitable Greek default.
“I came to London,” he says, “because being here gives you a front-row seat on the imminent collapse of an entire city. I think that the Eurozone is over-rated as a disaster area. They are not yet in as bad shape as Britain. The UK pound,” he continues, “is about to collapse. And the collapse of the British economy will be one of the biggest in modern economic history…”

Fun stuff.

#305 Old Man on 11.04.12 at 2:11 pm

Caesar should be landing soon in India for gifts of gold, and word is out he will be doing a photo opp riding an elephant. I have my fingers crossed for a bait and switch routine for someone to bring in a jackass instead, as would be more appropriate in the end.

#306 Ayn Rand Army on 11.04.12 at 2:18 pm

The dark, black-and-white economic view many are exhibiting here this weekend is identical to that of condo buyers who see only sunshine ahead.
Differences are many, but government never financed the purchases of gold like they did housing.

nice post Really! BangON

#307 Doctore on 11.04.12 at 2:19 pm

Never mind this gold related foolishness. I got to thinking regarding real estate and down payments. Myself and many new home buyers have used their RRSP for the home buyer plan to put a down payment on a house. This has to be repaid up to over 15 years installments. If you do not make min installment then you will be deemed to have that as income for that year and taxed accordingly. So what happens to people with these huge mortgages and go into negative equity, wouldn’t they take an even bigger hit as they have to eventually pay back the RRSP? And if they don’t then they will be taxed?

#308 futureexpatriate on 11.04.12 at 2:26 pm

Forgive because this is the less-than useless Murdoch Wall Street Journal, but is this anywhere near accurate, or is this a gold plugger/Romney campaign worker in disguise?

9 Scenarios And All Lead to Stock Plunge


Fear sells. — Garth

#309 Rookie57 on 11.04.12 at 2:39 pm

Yes, our great bearded one, the Obiwan of Diversity, can be wrong…. but to me he is wrong in small ways that will not crater your portfolio. His message to the great unwashed, diversify with balance and you shall inherit a life of less stress, more financial security, and more relaxation. In other words, don’t put all your eggs in one basket (e.g. gold, RE, tulips, railways, etc). Seems to me, this is a mantra that many here do not appear to have grasped. There are no “Hail Mary’s” in Obiwan’s mantra — just solid advice to diversify and balance. ….Now that I think about it, he isn’t Obiwan – he is Yoda! With an edge.


#310 agent.smith on 11.04.12 at 2:44 pm

#296 – EIT

Another anti-American rat. You’d much rather China or Russia be the dominant force in the world, huh? Because we all know how humane the Chinese are. We all know how much the Russians respect freedom of expression. We all know how gentle the Russians are with their enemies.

Are you really that deluded?

#311 Canadian Watchdog on 11.04.12 at 2:53 pm

#300 DonDWest

“Now in late 2012, as this post has proven, it seems every moron possible is now buying gold/silver. That’s the time to get out – glad that I did.”

Sorry Don, but you don’t know what you’re talking about either. If you’re betting on gold prices falling, you are also betting on the U.S. defaulting on its debts.

There is a debt ceiling and fiscal cliff to deal with in less then three months, which means, the government will print, kick the can down the road again and get downgraded like the last time.

Gold went from $1525 to $1900 last year and is now trading at $1700, an 11.5% gain. If gold falls, central banks and institutional investors will buy more to increase reserves or allocation, respectively.

Stop looking at goldbugs buying little gold coins. Research where billions of central bank and institutional investors’ (QFIIs and QDIIs) funds are fleeing to.

You guys make me laugh. Do you homework.

Speaking of homework: “Gold went from $1525 to $1900 last year and is now trading at $1700, an 11.5% gain.” Actually it is now at $1,675, for a 12% loss from when you told everyone to load up. I told them to harvest gains. — Garth

#312 willworkforpickles on 11.04.12 at 3:00 pm

The first world financial systems will ultimately and finally collapse… namely London and New York…. and they will when confidence in these lawless and corrupt behemoths reach the breaking point of no return and foreign investors flee followed by panicked capitol flight.

Those governments will finally be unable to borrow money and will print it without US reserve currency might resulting in a shockingly devaluing currency , devolving economy and soaring inflation.
The accumulation of gold as a hedge against that kind of inflation and currency devaluation will send gold prices rocketing to the moon and our First World nations on to becoming Third World nations.

See why some buy gold? They’re whacked. — Garth

#313 EIT on 11.04.12 at 3:10 pm

#316 agent.smith

US foreign policy is the delusion. Besides, there’s a new world order to pick from, and its called the European Union. Why bring up China and Russia. Is there something you want to get off your chest? Why don’t you take the time to discredit this:
while you stew over those nationalist issues.

#314 willworkforpickles on 11.04.12 at 3:15 pm

Waiting for the inevitable collapse to happen first before you buy gold will do you no good.
I don’t own any gold. Too damn expensive anyway .
Guess I’ll go down with the ship.
And that’s whacked.

#315 Coquitlam Resident on 11.04.12 at 3:16 pm

In it, he talks about the decline of America – both in present and historical terms. Garth, I cannot believe you think the US will slowly recover. There is no empirical data that conclusively speaks to that, but rather the opposite. We’re witnessing the decline of an empire – the same that occurred with the Romans, the Ottomans and the British. There is no other path for the US, only down unfortunately.

I disagree. And you should fervently hope you are wrong. — Garth

Gartho – Hope has nothing to do with it – you sound like a condo owner ;-)

I suggest you refer to complexity theory.

In a nutshell, the US is now requiring exponentially more energy to maintain necessary growth to just preserve the status quo. Non sustainable deficits and the US Federal Reserve’s 50-1 leverage and investment in volatile medium-term securities indicate the system is, at the very least, now exhibiting diminishing returns.

As a consequences, there is now wide-spread rent-seeking behavior in the USA. Post-modern finance is emblematic of parasitic elites accumulating wealth through non-productive means. America’s GINI index is now approaching Mexico.

The consequence is rival nations, such as China, which exhibit less complex systems, require much less energy to achieve relatively greater growth. Case in point:

“The Strategic Impact of China’s J-XX [J-20]”

“In terms of China’s ability to manufacture and deploy significant numbers of the J-XX [J-20] it is worth observing that in terms of raw “bang for buck” China’s defence industry is outperforming the United States’ industry by a robust margin. ”

“The woeful inefficiency of many portions of the United States defence industry, and procurement bureaucracy, is best exemplified by the fact that the underperforming single engine F-35 is now more expensive than the larger and much better twin engine F-22 Raptor, in terms of Unit Procurement Costs.”

Basically, Garth, China has the capability to bankrupt the US via an Arms Race. This is the most common route for civilization collapse, and the US appears to be going down this path right now.

#316 martin9999 on 11.04.12 at 3:25 pm

#295Hoof – Hearted on 11.04.12 at 12:31 pm
#264 martin9999 on 11.04.12 at 5:08 am

Romney will win….Google DIEBOLD…the fix is in.

Obama’s role was to bail out banks..Romneys is to get the Iran war going.

this is exactly my hope. glad to hear we share the same idea. republicans made the US and a comandar in chief should never apologize. that was a good one. i tell you

#317 Canadian Watchdog on 11.04.12 at 3:26 pm

Speaking of homework: “Gold went from $1525 to $1900 last year and is now trading at $1700, an 11.5% gain.” Actually it is now at $1,675, for a 12% loss from when you told everyone to load up. I told them to harvest gains. — Garth

Ah huh.. as if Friday’s close means anything in a non-linear market. How did your REITs do last year when the U.S. was downgraded? Chart

Watch the access market this week as QFIIs and QDIIs buy everything U.S. hedge funds dumped on Friday. Inflation now heading to Asia again.

Keywords: Hedging, Benchmark, Currency Anchor.

REITs did just fine, continuing to pump out a 5% return. How much cash did gold distribute while it lost value? — Garth

#318 M G on 11.04.12 at 3:30 pm

Love your post. I guess the US govnt agencies are also to be trusted when they publish job numbers and inflation figures. But Garth wants prove that the govnt does not lie. Garth you seem like an honest man although I may not agree with you. AND THATS WHY HARPER GAVE YOU THE HEE Ho. YOU ARE PROBABLY NOT A LYING GANGSTER LIKE THE OTHERS IN OTTAWA. when it comes to any govnt reporting, always think of what they want the sheep to believe.

#319 Coquitlam Resident on 11.04.12 at 3:38 pm

People seem to have a hard time grasping that Gold’s multi-year rise is a direct consequence of Bernanke’s success in devaluing the dollar on an absolute basis.

I would love gold to go down in price so I could buy some, but its not going to happen while Bernanke continues with QE3.

It already did. — Garth

#320 Doug in London on 11.04.12 at 3:42 pm

@Luke8929, post #185:
If what you say is true about employers reducing work hours, then that’s a good thing! It sure beats the hell out of reducing payroll costs by eliminating jobs and have the remaining workers taking on an increased work load and the stress that inevitably goes with it. It’s about time (actually long, long overdue) that productivity increases over the last century translated into a shorter work week. I work part time, it’s variable but averages 24 hours a week, and guess what? I absolutely LOVE it and wouldn’t trade it for any job with 40 hours a week. It’s great to have time for a little known and less understood abstract thing called having a life.

#321 Coquitlam Resident on 11.04.12 at 3:46 pm

People seem to have a hard time grasping that Gold’s multi-year rise is a direct consequence of Bernanke’s success in devaluing the dollar on an absolute basis.

I would love gold to go down in price so I could buy some, but its not going to happen while Bernanke continues with QE3.

It already did. — Garth

With respect, Garth, with all my 30 years of living on this earth, I predicted verbatim that gold would get drubbed the week before the elections. In the era of Post-Modern Finance, markets are largely political instruments now.

With Bernanke’s “War on the Dollar” likely to continue unabated if Obama gets re-elected, I see the relative value of Gold trending upwards, loosely keeping pace QE3.

Irrelevant. Gold has flopped like a beached fish for a year, and is 12% lower, even with QE3. — Garth

#322 Canadian Watchdog on 11.04.12 at 3:49 pm

“REITs did just fine, continuing to pump out a 5% return. How much cash did gold distribute while it lost value? — Garth”

That’s what mining and gold related stocks are for. You waisted all your time convincing yourself that gold and silver are doomer assets. Now you’re missing out, big time.

Which is why “only 18% of large cap managers in Canada outperformed the benchmark index” and “Large cap managers, on average, are more than 4% underweight gold stocks so when these stocks surge, active managers tend to struggle relative to the benchmark since gold stocks have such a large weighting in the index,” Link

I told you already: last year TD wealth management increased allocation to 5-6% from 3% (it will increase again at some point) and TD Joins London Bullion Market Association as Full Member.

What does TD know that the retail or mom and dad investor doesn’t?

Spreads. For them. — Garth

#323 neo on 11.04.12 at 3:53 pm

Currency has always been backed by the power to tax. That is not ‘nothing.’ — Garth

Again Garth. How is that “power” working out in Greece, Italy and Spain. It means “nothing” if the tax base refuse to pay.

Then they get the country they deserve. It will self-correct. — Garth

Neither you nor I are naive enough to believe they will get what they deserve. If that were the case Greece would have defaulted already and neither Spain nor Italy would be bailed out by the rest of Europe either, namely Germany. But we know German and French banks were enablers of southern Europe this whole time and getting what they deserve isn’t pallatable to German and French financial institutions because they would quickly have solvency issues and by proxy U.S. banks, so this charade continues.

Therefore, with bailouts prevalent and the power to tax impotent. Currency becomes more and more unstable and volatile with more and more Central Bank intervention. Central Banks need an intervention.

#324 Coquitlam Resident on 11.04.12 at 4:01 pm

With respect, Garth, with all my 30 years of living on this earth, I predicted verbatim that gold would get drubbed the week before the elections. In the era of Post-Modern Finance, markets are largely political instruments now.

With Bernanke’s “War on the Dollar” likely to continue unabated if Obama gets re-elected, I see the relative value of Gold trending upwards, loosely keeping pace QE3.

Irrelevant. Gold has flopped like a beached fish for a year, and is 12% lower, even with QE3. — Garth

Bernanke just started to pump $80-85 billions per month, indefinitely, in net securities purchases from the banks.

Again, It’s increasingly clear that the US, a highly complex system, is requiring exponentially greater inputs to grow. Eventually these inputs will start to produce negative outputs. When this happens, faith in the US dollar will be abandoned.

We already see this from statistics, that show the US is basically becoming an oligarchic society (a la Mexico) with little to no manufacturing base. Unlimited government intervention is not the solution and will not bring these jobs back.

If anything, a return to a Gold Standard is probably preferable to a race-to-the-bottom currency war that the US will disproportionally lose relative to less complex system like China.

“The US is basically becoming an oligarchic society with little to no manufacturing base.” Really? The US is the world’s largest manufacturing economy, producing 21% of global manufactured products. China is second at 15% and Japan is third at 12%. This blog is terrifying me. — Garth

#325 Coquitlam Resident on 11.04.12 at 4:07 pm

#329 neo on 11.04.12 at 3:53 pm

“Central Banks need an intervention.”

It’s happening. The G20 (IMF) has more than doubled its SDR borrowing capacity to 600 billion as of 2012. Blue-prints are being drawn up for a liquid SDR bond market, that will basically replace the US as the global reserve currency.

A global central bank could be drawing nearer, and Communist China’s voting power will be greater enhanced relative to countries such as France, Britain, and the Netherlands. Interesting times are coming.

Have you checked the water in Coquitlam lately? — Garth

#326 Coho on 11.04.12 at 4:09 pm

FTP #288,

We’re witnessing the decline of an empire – the same that occurred with the Romans, the Ottomans and the British. There is no other path for the US, only down unfortunately.

I disagree. There is no American Empire. It just appears that way at the surface. Slightly beneath the surface, it is still British. And at a deeper level it is one of the ‘chess players’. The Yanks have been sucked into maintain and even expand it with her resources, financial and human. NATO (American Money and Muscle Under British Manipulation) pretends to be the do gooder bringing liberation and democracy to the middle east when it could care less for these concepts. Does it make sense that America engages in perpetual war…bombing…oops, I mean…bringing democracy to other people while the Bill of Rights in America which guarantees rights and freedoms to her own people gets shredded? Quite ironic is it not?

Conquest and imperialism still is and always has been a British trait. It was never supposed to be America’s. Perhaps that is the price America must pay her handlers for having become an economic power house during the last century. Of course the people are never told this. They’re none the wiser. Their job is to give up blood and money to be NATO’s muscle man.

America has strayed very far from her foundation of freedom and liberty and to stay away from foreign entanglements. Her behaviour has become exactly the same as the King whose tyranny she revolted against almost 240 years ago.

Will the USA remain the world’s military superpower and economic power house? I guess that depends on whether she’s outlived her use. TPTB build countries up to serve their agenda and they can take them down for the same reason. The only reason we in Canada (and in many other countries) have any rights and/or privileges is because of the American Bill of rights, although ours are cheap knock offs in comparison. However, there is no reason to be jealous of American freedoms because they are about toast. As goes freedom in America, so will go ours. I don’t bet against America, but I DO pray that it finds its true self again. We’ll all be better for it.

#327 Form Man on 11.04.12 at 4:11 pm

‘the trouble with ‘common sense’ is it isn’t very common…………….

#328 Coquitlam Resident on 11.04.12 at 4:21 pm

“The US is basically becoming an oligarchic society with little to no manufacturing base.” Really? The US is the world’s largest manufacturing economy, producing 21% of global manufactured products. China is second at 15% and Japan is third at 12%. This blog is terrifying me. — Garth

Well, in 2011, China became the largest manufacturing nation @ 20% global manufactured output (source: Financial Times). Maybe your stats are old?

And 20% is irrelevant. What is relevant is trends. During gold-backed money, the GINI index stayed low. Since the 1970s, the US GINI index has increased virtually every year, and is NOW basically on par with Oligarchic Mexico.

Conclusion? It appears unlimited money printing creates social inequality. As a result, the US now has a massive rent-seeking problem, largely related to entrenched elites feeding from the Post-Modern Finance.

This in turn destroys global competitiveness – beautifully demonstrated by the F-35 debacle.

#329 Canadian Watchdog on 11.04.12 at 4:28 pm

Spreads. For them. — Garth


Anybody want to take a swing at why these two gold related stocks gained? Hint

Always, always, always measure and weight your portfolio in key currencies and the benchmark, gold.

#330 anotherwhistleblower on 11.04.12 at 4:30 pm

Garth..calling precious metal investors ‘zealots’ is a bit like calling a politiian a ‘thief’. In fact the p/m investor is just trying to hedge against government trying to steal away all his savings…..and if you want to start calling savers ‘zealots’….then whip me with your Keynsian lash . Argue as much as you want abount gold…the fact is that it has appreciated at 14% p/a fourteen years in an unbroken line with the uptrend channel firmly intact. Why would an ‘investment advisor’ argue against gold ownership when it has outperformed every other asset class over the same time frame. Do you hate seeing your clients make money?

My argument is against overweighting a volatile assets class which pays no interest or dividends. Buying and holding gold is not investing, but gambling. Hence the need for rebalancing and harvesting of profits – that is how anyone makes money. Should be obvious. — Garth

#331 Gunboat denier on 11.04.12 at 4:31 pm

Garth – Quick! Start a new post!

#332 squidly77 on 11.04.12 at 4:50 pm

just mention Gold/Silver in a negative way and the whole blog turns into a goon show, reminded me of the short video here…

Cant imagine why that happened. LOL!!

#333 Dom on 11.04.12 at 4:51 pm

Coho #332

It’s sad but true. Good post

#334 n1tro on 11.04.12 at 5:15 pm

“As predicted, gold/silver went through a momentarily bull run based off the fear of QE3, however it seems the inertia for that is now finished.”

So the same reasoning that QE3 drove gold prices up, recently announced QE4 will have zero effect?!

“it seems every moron possible is now buying gold/silver. That’s the time to get out – glad that I did.”

Maybe you should hang around less morons…I know no one invested in precious metals. When commercials like “Harold the Jeweler buyer” or “Russel Oliver aka the Cashman” stop appearing, and people at work start talking about how many ounces of gold they have in their portfolio, then I’ll sell my stash. I think we are 2 years away from that according to the cycles theory I follow.

#335 n1tro on 11.04.12 at 5:24 pm

edit: Sorry meant to write QE2 drove gold up and QE3 will have no effect?

#336 Questioning Calgary stats on 11.04.12 at 5:25 pm

The gold bugs are definitely out in force.

#337 Canadian Watchdog on 11.04.12 at 5:29 pm

#338 squidly77

Agree. This post was a bad idea. Let’s keep talking about RE so when it drops 10% everyone will jump in, only to get slaughtered in a bull trap.

Today’s gold debate reminds me of when everyone said Apple would never be as big as Microsoft.

#338 cynically on 11.04.12 at 5:42 pm

#296 – You are “cutting off your nose to spite your face” if you’ll be happy with an American decline because who will then defend Canada from the baddies out there in the big world? Think about it.

#339 squidly77 on 11.04.12 at 5:50 pm

#343 Canadian Watchdog

Never said it was a bad idea. I too believe that Golds best days are behind us. There’s equal chance that Gold could drop to a thousand a troy ounce just as easily as it could spike to $2500, but metal believers still have a wee problem, they simply cant sell the stuff. Its that emotion thingy, and hey you metal-heads have got to know when someones poking you with a sharp stick in your tender under-belly. Its very, very obvious.

Apple has one very large problem write now, look around and take notice of what devices are popular with the majority of kids today, they’re Droids, namely Samsung Droids and what they get comfortable with, is what they’ll stay with.

#340 Inglorious Investor on 11.04.12 at 5:51 pm

#296 EIT on 11.04.12 at 12:39 pm

“I have zero problem with an America in decline.”

You should.

#341 D.Reigel on 11.04.12 at 6:20 pm

I’ll take that bet. Why will gold resume its trend higher?
1.Gold moves inverse to the USD over 80% of the time. While we have seen a counter trend rally the USD, it is all but assured that the USD will resume it trend lower, the consequence of a 16.2 trillion debt and deficits running @ 10% of GDP.
2.Gibson’s Paradox – Gold performs very well in a very low or negative real interest rate environment. The Fed has indicated it plans to leave rates at these levels until late 2015.
3.Supply & Demand – for over 10 yrs between (1999-2009) Western central banks were able to sell 500 tonnes per year into the market, which they did until the last several years where the selling dropped off. Now eastern central banks have been purchasing gold at a consistent and increasing rate. China has purchased and imported over 580 tonnes in 2012 alone representing over 10% of Global supply.
So we have gone from a point several years ago where central banks were selling over 10% of global supply into the market to a situation where central banks are now purchasing over 15% of global supply a swing of 25%.
3. Currency Wars by James Richard, illustrates the ongoing significant global debasement of national currencies in order to promote increased exports- begar thy neighbour. In a world where currencies are being debased hard assets are king.
4.Global mining supply is only growing @ 1% even though there has been billions spent on exploration. The average grade and size of new deposits has been declining for over thirty years which under pins current or even higher gold prices.
5. The Global Financial system is still broken and there is still an out of wack ratio between global debt and the assets being held as collateral for those debts – further central bank easing is all but assured.
Many financial generalists believe they can call a top in the gold market, however it is a “little” more complex then meets the eye. More anyalyis is needed…

#342 D.Reigel on 11.04.12 at 6:21 pm

Anyone betting against the USD will get spanked, interesting statement, but not very likely. Short term trends are always tough to predict, however is Mr. Turner indicating that the debt problems in the US are not structural? Other countries will support the current global financial system until they don’t – think musical chairs. China has already been decreasing their US bond buying and shortening the duration on the bonds and T-bills they do buy. They have have been investing their USD reserves for years in acquiring large resources of oil, base metals, rare earth metals, precious metals etc….While other trading blocks are not going to cut off their nose to spite their face, they are also aware there is an eventual tipping point and they must prepare for that eventuality. The trend is already in place, the USD is being used less and less in global commerce. In the last twenty years it has declined from almost 80% of global transactions to a present 68% – what happens when it is 60% or 50% will the USD be worth more or less?

#343 Herb on 11.04.12 at 6:50 pm

Hell hath no fury like a gold bug whose dearest investment is scorned.

#344 Herb on 11.04.12 at 6:52 pm

#344 Cynically,

would you mind listing the “baddies out there in the big world” who are a threat to Canada?

“Think about it.”

#345 EIT on 11.04.12 at 7:15 pm

#344 cynically on 11.04.12 at 5:42 pm
#346 Inglorious Investor on 11.04.12 at 5:51 pm

America must r u l e the world FOREVER!!!!!!

#346 daystar on 11.04.12 at 7:49 pm

“The US is basically becoming an oligarchic society with little to no manufacturing base.” Really? The US is the world’s largest manufacturing economy, producing 21% of global manufactured products. China is second at 15% and Japan is third at 12%. This blog is terrifying me. — Garth

Garth is correct. (Not that I need to tell Garth this. I should note that these are 2009 stats and likely based on national/multinational corporate revenues as opposed to actual domestic manufacturing capacity but revenue and profits, not capacity, at least over the short and mid term, is the brass ring. )

Garth’s points are also correct in his post. Anyone betting against a U.S. recovery and a stronger dollar will get some lumps. It doesn’t take an M.A. in commerce to figure out what this will do to commodities and gold and Garth gives solid reason concerning “the velocity of money”. (mind you, as inglorious investor states, don’t ignore timelines)

Again, the only thing I can disagree with on Garth’s post from yesterday specifically is this (and it does go back a long time):

“Romney, on the other hands, means less regulation, tax cuts plus fiscal responsibility (all good in the long term), but also lower government spending, austerity and slow growth.” – Garth

Less regulation or more to the point, wreckless regulation is how we ended up with a GFC to begin with. Tax cuts is not a good thing in the long term fiscally and as a consequence, the U.S. dollar and their entire economy is modelled to function best with a strong dollar relative to world currencies at least from what I can tell and if fiscal responsibility means throwing 10’s of millions of people off of medicaid and/or serious cuts to education then there will be consequences to U.S. productivity especially in the long term. Austerity, slow growth, yes, but not necessarily lower spending when one considers defence and war and thats what worries me most with Romney so I like to put these things on a timeline, like glorious investor does.

Whoever wins, the U.S. will recover and the dollar will strengthen over the next few years, of that I have no doubt. But 5, 8 and 10 years from now, the differences between the policies of Obama and Romney will have an obvious impact on debt and the dollar going forward and when I consider foreign policy alone, I see the Dems as better for the dollar in the long run. The consequences of wreckless deregulation, war and defence can run up a hell of a bill in the long run (can they afford it? I don’t think so) and there are no guarantee’s that Obama will be peaceful but the rest of the world thinks so and so do I. Romney’s religious views, Iran and Israel and how that can play out… scary.

#277 Herb on 11.04.12 at 9:34 am #266 Daystar,

I don’t think Obama has really had the freedom to do what he set out to do in the whitehouse. 4 years of GWB tax cuts were written into law for example before he got there and there was a brief period of DEM dominance in congress where he could have dealt with it but the nation was still fragile 2 years ago and if he tried, he would have likely had no chance of winning this election. So what I see on Obama’s face is a man who has been forced to examine his own record and its not so much failings as a president as it is simply falling short. Its like examining the promises you made to get there and not delivering on some or like… having the ideals of knowing what needs to be done with the belief that you are the most powerful person in your nation and you are… but then over time you realize that a good number of things are beyond your influence and control more than you realize.

What we are witnessing I think is a man who is under a great deal of external pressures but internal ones as well. Joe Biden, he’s got that pressure relief valve, that optimism, humor, wit and experience (the same one Garth has and will likely have to draw from after this thread) and Joe isn’t under the same pressures that Obama has taken on so thats why I think we are seeing different levels of performance in areas like the debates.

The differences between the 2 parties are so stark from foreign policy to social domestic policy and fiscal policy and healthcare and taxation, I think energy policy as well, one can get caught up in the hype and just… need a drink. :) And some laughs! (fox actually aired this):

#347 Just Checking on 11.04.12 at 9:31 pm

#243 Crash Test Dummy
Canadian Watchdog comes across as an intelligent, very resourceful contributor to this blog.
You, on the other hand, come across as an immature, name-calling ass.

#348 Freedom85 on 11.05.12 at 12:18 am

#282 Tony

QE to infinity means stocks will be supported. As the stock market rises, so will gold stocks because the dollar is debased.

#349 cynically on 11.05.12 at 2:37 am

#350 Herb – First of all, any threat to Canada would be indirect – collateral damage in a military attack upon the US – but hopefully it will be an economic or financial one which will hurt Canada as well, the two countries being such close trading partners. Empires don’t last forever. I do beleve one of the two will come about, probably not in my lifetime and because of the militarism in the US’s psyche it will probably be the former. Just who it might be in my opinion is not important My question to you is why do you even care about external things when your bugaboos seem to be the rightwingnuts and neocons within Canada? They are much more dangerous and extremely well-financed in the States but don’t ask me to name them, please. #351 EIT – Great sarcasm!. Is that all you’ve got?

#350 futureexpatriate on 11.05.12 at 4:12 am

#296- You didn’t get the memo? America’s wars are ending and the killing for profit ended in 2008. US soon out of Afghaninam as well as Pakistambodia. Bin Laden dead, Al Qaeda gutted, energy independence coming. And Romney and the kill-for-profit Party disappearing with them. Without a trace. Now, when are you going to deal with YOUR conservative nutjobs?

#351 EIT on 11.05.12 at 8:34 am

#355 cynically on 11.05.12 at 2:37 am
Plenty of sarcasm for Pawlenty of bullshit

#356 futureexpatriate on 11.05.12 at 4:12 am
current affairs amateur… Try to get past your two party system obsession… and try ctrl+F once in a while…

#352 Herb on 11.05.12 at 10:19 am

#351 Cynically,

My question to you is why do you even care about external things when your bugaboos seem to be the rightwingnuts and neocons within Canada?

Because “external things” are used by wingnuts and neocons inside and outside Canada for political gain, and by the armed forces and their industrial straphangers to push institutional imperatives and justify budgets and expenditures.

Glad you decided not to manufacture a list of external threats. Agree that our main threat is collateral damage, which is why we should pursue foreign and defence policies that further our national interests, rather than only making the USA smile upon us. Of course, that is an important national interest, but by no means the only one.

#353 Wondering... on 11.05.12 at 1:15 pm

Garth, How much time do you spend on this pathetic blog? The writing and then the responding and the comment reading/approving?

#354 futureexpatriate on 11.05.12 at 2:41 pm

#357- Sorry, my God always gives me a valid pragmatic useful workable choice between the greatest evil and a far lesser evil. And maintaining they are the same is the greatest lie by the greatest evil.

#355 Silver on 11.05.12 at 5:49 pm

Agreement signed…. $1,025,000 all in…
owe $165,000…
we are so out of here if this clears…
… also talking ten year’s development and a $mill. in Tech. Research out of Vancouver.
… more room for Wall mart greeters and their well paying jobs now.

According to my agent Richmond is Quicksand now…

Not happy about being forced, by increased assessments to sell,… but the logic of math wins every time… can’t keep up… creates a negative equity position… that’s would be stupid to hold on…
Take profit and regroup…

… and as I actually don’t own the land/property according to the crown and they can do what they like with the property taxes… I will reduce the risk level…
cash out.

Debt leverage is not richer than you think…
the sh.t fest in van should be good…

some nice rec. stuff in the interior for less than a 3rd of what we will end up with… some well under $300,000.00 and getting better all the time…
and this is after they kindly took the major loss on the property builds for us…
… we intend to take advantage of it… say in 6 months time. Vulture Capitalist Commie now…
Then go fishing for a while…


#356 TurnerNation on 11.05.12 at 9:04 pm

400th? What a weblog!

#357 Greg on 11.05.12 at 9:27 pm

Garth’s last paragraph was …”There’s little doubt the US recovery will continue, whoever sneaks by Tuesday night. Anyone betting against it, or its currency, will get spanked.”

Anyone betting Europe will sink us all ? Banks with huge leverage (much more than USA had in 2008) . Then there is Japan ( aka Kyle Bass ) … throw China in for good measure … how do we see a recovery out of this mess ? I am holding my Gold & Silver – thank you …

#358 EIT on 11.05.12 at 10:01 pm

#360 futureexpatriate on 11.05.12 at 2:41 pm

“I don’t hang out with the lesser of two evils, I don’t vote for the lesser of two evils”

and ‘valid pragmatic useful workable choice’.. aww that’s so cute, did the state teach you to use those words?

#359 futureexpatriate on 11.06.12 at 3:46 am

#364 No. God did, you schmuck.

He taught me that one too.

#360 EIT on 11.06.12 at 7:26 am

#365 God should be amping up the lessons.