What matters

mattters1

Still think deflation’s no threat? For months this pathetic blog has been beating the same drum. Now the world’s tipped closer to falling prices, lower demand and a flight of capital from real assets to financial ones. The metalheads fought it every inch of the way. They’re now crushed.

Gold’s fallen the most in 30 years for one simple reason. It’s not because Goldman issued a sell. Not because Euro countries will be dumping bullion. Not just because of market calls or the elite trying to destroy an alternative currency. Gold’s toast because there’s no reason to hold it.

Investors were overwhelmed by events on Monday, of course. The Boston bombs just heightened fear and accelerated selling on all markets. In Toronto the TSX was whacked by staggering gold producers and sideswiped energy companies. Commodities were creamed. Silver crashed 11%, while oil and copper took a serious haircut. Even the latest housing numbers – sales down nationally more than 15% – helped lead to the same inescapable conclusion.

Suddenly it’s become clear inflation is not what we should be worried about. There’s no debasement of currencies because of government money-printing when prices aren’t bloating. When investors can own shares in profitable companies that have doubled in four years and pay fat dividends, why would you hold gold? The last thing any sane person can imagine is hyper-inflation.

Ditto for systemic collapse. If no major banks have failed and no countries gone bankrupt through the travails since 2009, then it’s obvious this will probably won’t happen. The US is unarguably stronger each month while Europe stabilizes. Central banks have tightened their grip on global finances, and when China spanks North Korea because the US asks, you know the rules have changed.

So in the absence of inflation or chaos, why hold gold? It pays nothing. It’s speculation. It’s a gamble against the dark side. It is pure emotion. Bought on worry or greed. Sold in fear or disgust.

Some say Monday’s stock drop is proof the wheels have come off everything. Not so.

US stock markets were (as I’ve told you more than once) ready for a correction. Falling commodity prices and a terrorist attack were enough to get it rolling. In Toronto, where the market’s dominated by miners and energy companies, the bloodletting was predictable. Some formerly impressive companies, like Barrick, may well not survive what’s just happened.

Financial markets which got ahead of themselves will probably retreat to their moving averages, before advancing again. Like last year (11% correction) or the one before (a 20% decline). So long as companies are making money, interest rates are cheap and America creeps forward, there’s no reason to keep your cash in a can in the backyard.

But neither is there reason for complacency.

Trillions of dollars have been spent on stimulus, and yet no economies are surging ahead wildly. News from China that growth had slowed was enough this week to set in a motion a chain of events ending in precious metals panic. Wages and salaries are frozen in time. Money’s as cheap as it will ever get, and yet demand for loans is waning. Real estate’s big recovery in the US still has prices far below 2005 levels. And in Canada we daily chronicle the wobble and descent of housing.

Without the central banks, the money-printing, the quantitative easing and the stimulus programs, we’d be in the grasp of a deflationary spiral. Wages and prices decline, followed by jobs and houses, then lower wages and prices. In this world nobody needs gold. They need assets which, like stocks or REITs or preferreds or even bonds, generate income. And they need money. With deflation, cash becomes more valuable. As that happens, stuff – oil, cars, copper, silver, real estate and gold  – becomes less valuable.

This is the pattern you should have been expecting. Commodities get hammered. Volatility barely rises. Money flees dead assets. While Mr & Mrs Front Porch watch CNN and think about Nine Eleven.

From here, I will not even speculate on where gold bottoms or how long the margin-fueled hangover keeps stock values depressed. We don’t know if this is a pivotal moment or just a riveting interlude. But I do know we’ve been handed a lesson.

Remember what matters.

251 comments ↓

#1 Alex on 04.15.13 at 8:35 pm

Diversification of assets is the key, indeed Garth.

#2 Yellow Rox on 04.15.13 at 8:35 pm

Wow, what a day!

Bombings…

Stock market taking a dump…

Gold crashing…

Hang in there everybody.

#3 mortgagebrokeron on 04.15.13 at 8:37 pm

how low will oil go?

#4 Steve Sartori on 04.15.13 at 8:38 pm

Why might Barrick be in trouble ?

#5 Rainman on 04.15.13 at 8:40 pm

Surprised to say the least?

#6 [email protected] on 04.15.13 at 8:43 pm

I recently rebalanced. With the recent carnage my newly balanced are down. What are my options? Stay put or rebalance again?

#7 Chopper on 04.15.13 at 8:43 pm

Yea I am investing in America, they are on the move up. RE prices can only go up now as they have passed the bottom a few years ago.

Invest in US real estate and make lots of money or invest in Canadian RE and loose money.

Remember buy low sell high. It is as simple as that but some let emotions rule them and follow the heard like sheep to the slaughter.

#8 Steady Eddie on 04.15.13 at 8:43 pm

food for thought… Dow / Gold Ratio, if it holds true and 70’s repeat Dow will crash in less than a month… could see a drop as much as 25-40%.

Garth, what do you think of Japan?

http://www.bloomberg.com/news/2013-04-14/ex-soros-adviser-says-boj-s-bet-on-massive-easing-will-backfire.html#disqus_thread

I don’t think I’m turning Japanese, I really think so. Soon the Yen will be Vapor!!! haha.. sorry couldn’t help myself. You remember the 80’s rignt… oh man.. that was good times.

#9 Victor V on 04.15.13 at 8:48 pm

Too bad the conference call isn’t after business hours as I would have loved to have listened in. Will a recorded version be made available for those who can’t join live?

#10 Mike on 04.15.13 at 8:49 pm

Will the call be recorded and posted?

#11 Smoking Man on 04.15.13 at 8:49 pm

Conference Call….

I’M IN!!!!!!!!!

#12 [email protected] on 04.15.13 at 8:51 pm

Will tomorrow’s conference call be available as a recording afterwards?

I’ll work on that. But you have to behave. — Garth

#13 rich daddy on 04.15.13 at 8:52 pm

time to short the market big time?

#14 ray tobin on 04.15.13 at 8:53 pm

REIT stocks up ye/ye 8%. Plus DOW adjusted for inflation is still not quite at record high. ie room for more growth.

#15 TurnerNation on 04.15.13 at 8:55 pm

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#16 TurnerNation on 04.15.13 at 8:55 pm

Another one:

Stonecap Securites Inc., a small, Canadian institutional stock brokerage, has closed its Calgary office, laying off five in its equity-research and investment-banking operations–or about 18% of its professional staff..

Jeffrey White, Stonecap’s chief executive, confirmed the dealer’s plans. Stonecap is retaining one stock research energy analyst from the Calgary office, but moving that person to its Toronto headquarters, he said.

Stonecap laid off one Toronto-based analyst, who covered engineering and construction stocks for the dealer, as well as a number of support staff, he said.

“We had to make some difficult decisions to ensure the long-term viability of the firm, in what are clearly extreme market conditions, underscored by what we saw today,” Mr White said.

Stonecap’s layoffs come on the same day that equity markets in Toronto and New York fell sharply, led by a sell-off in commodity stocks amid worries over economic growth in China.

http://blogs.wsj.com/canadarealtime/2013/04/15/latest-canadian-market-fallout-stonecap-securities-leaving-calgary/

#17 Buyer on 04.15.13 at 8:56 pm

“They need assets which, like stocks or REITs or preferreds or even bonds, GENERATE INCOME.”

I love my 3 multi-family RE properties! All with positive cash-flow. Thank you tenants.

And your return on invested equity is what? — Garth

#18 mikef on 04.15.13 at 8:57 pm

6th? 46? 4567776?

anywho c’mon Le Mad Vlad I sure miss you

But seriously folks I read in the French newspapers that there are more condos for sale in Montreal than
Toronto & Vancouver combined.

Is this true?

#19 Publius Enigma on 04.15.13 at 8:57 pm

The blog may or may not be overrun with precious metalheads tonight.

Most of them will be over at sites like Zerohedge, amygdalas in overdrive, engaged in furious backwards rationalization.

But who knows, really?

#20 timbo on 04.15.13 at 9:01 pm

http://www.cnbc.com/id/100643896

Japan’s stock market dropped almost 2 percent in early trade, while South Korea’s Kospi fell 0.9 percent and Australian shares fell 0.5 percent.

ah ..blowback……hang on commodities it is going to get rough…..

#21 HAWK on 04.15.13 at 9:02 pm

Agreed you are correct it is now conclusive that the QE printing somehow is not finding it’s way into the economy, in any significant dosage and it’s almost certain there won’t be hyperinflation in the near future.

What is worrisome is that there is still definitely food inflation and and if oil prices are falling then we certainly are not seeing the benefits of the same at the pump. People can live with out fancy gadgets, cars, cottages, but not without food and energy. Sad, this is N. America, with the prairies, the granary of the world……..we could do better for our people……we should do better.

#22 Buyer on 04.15.13 at 9:02 pm

@Garth

“And your return on invested equity is what? — Garth”

My Internal rate of return between 9 and 12 % depending on the property. Based on a 25 years period.

Internal rate of return: “The discount rate at which the present value of all future cash flow is equal to the initial investment or in other words the rate at which an investment breaks even.” You’re funny. — Garth

#23 Canadian Watchdog on 04.15.13 at 9:05 pm

If no major banks have failed and no countries gone bankrupt through the travails since 2009, then it’s obvious this will probably won’t happen.

Easing up on words are we? Have your senses finally realized that a sell off of this magnitude in gold may be something like the last time? Wondering where all that inflation went? It went abroad Garth. Now the Fed and Treasury may have an exogenous problem they can't control and, with today's systemic banking risk even more interlinked then 2008 (because making banks more dangerous is the ultimate financial weapon to control governments), any major global bank failure poses a huge risk to our domestic banks.

Never mind gold. Watch stocks next.

Given your track record, equities are utterly safe. — Garth

#24 Thanks Garth on 04.15.13 at 9:05 pm

If Cyprus is the bellwether, then Canada is the red flag, showing that Cyprus is not an isolated situation. The damage wreaked by monumental debt is systemic, and it has taken place throughout the First World and beyond.
This latter statement will very likely be the most difficult to accept as reality. If so, here is something to consider: Canada has approved its bail-in, on a national level, just one week after a final decision was made in Cyprus. As we all know, the wheels of governments, worldwide, move slowly. The reader might ask himself whether he believes that the Canadian government has, in short-order, approved its own bail-in, in reaction to the events in Cyprus. If this possibility is simply too far-fetched, he must accept that the plan for Cyprus has been known to the Canadian government for some time and that a similar bail-in for Canada has been in the works for a while. It was simply agreed that Cyprus would go first – to act as the litmus test.
If the reader finds himself agreeing that it is likely that the Canadian government had foreknowledge of the events in Cyprus, his next logical conclusion would be that other nations had the same foreknowledge and have very likely been getting their own ducks in a row.
Most countries in the First World have gone down the same road of monumental debt and have found that that road has led to a precipice. At this point, they have no other option left in their bag of tricks. They are all in the same boat and will play their last option – “confiscation of your personal wealth.”

http://www.internationalman.com/78-global-perspectives/909-if-cyprus-is-the-bellwether,-then-canada-is-the-red-flag

Give it a rest. This is tin foiler junk. — Garth

#25 Tom Vu on 04.15.13 at 9:13 pm

Tin foil hat ….if dipped into Liguid Nitrogen..can make you as dangerous as rhino.

PS Mr Smoking Old Man …remember to take hat off…then again…never mind…

#26 Early Spring on 04.15.13 at 9:14 pm

Any thoughts on the problems barrick seems to be facing over the pascua lama mine in Chile Garth? A Vancouver based company mountain star gold(MSX)is claiming and has apparently won legal title rights along with joint partner jorge lopehandia over barrick. The story is ery interesting. Perhaps things have come full circle for msx and abx is running out of rope? Just a theory but a interesting story to say the least. Thoughts?

#27 Buyer on 04.15.13 at 9:16 pm

“nternal rate of return: “The discount rate at which the present value of all future cash flow is equal to the initial investment or in other words the rate at which an investment breaks even.” You’re funny. — Garth”

Garth, please don’t only pick the sentence that you like in Wikipedia. I’ve been teaching this stuff for years.

Internal rate of return: The internal rate of return on an investment or project is the “ANNUALIZED EFFECTIVE COMPOUNDED RETURN RATE”. In financial analysis, there are 2 basics things to look at: the best is the NPV and the other one the IRR. The bigger the NPV the better. The bigger the IRR the better. An IRR of 9 or 12 is great.

#28 big town on 04.15.13 at 9:17 pm

What is happening in the rental market? I viewed two 2 bed/bath units: one in Port Credit and one in Burlington. The rent was the same in both $1,200 and both units had the hydro turned off and both units were very dirty and not cared for. I have rented cheezy budget properties down in cancun, mex which were painted and neat. Am I missing something or has dirty and stinky ok at 1200 per month?

#29 Mocha on 04.15.13 at 9:22 pm

With WTI and Nymex Gasoline off a cliff in recent days, I wonder how long they will be able to resist an adjustment in prices at the pump. Probably until public outcry starts up again.

#30 Freedom First on 04.15.13 at 9:23 pm

Today is further proof of the fact that investing 100% in ANY 1 asset is insanity. No exception. Garth has outlined numerous times his foolproof strategy of investing for diversity, balance, and liquidity. The formulas he uses are clear concerning the % of one’s net worth in: fixed income, cash, RE, equities…..Garth has written advice on investment in every asset class. My only addition to this is being debt free, from day 1. Living debt free requires: patience, discipline, creativity, knowledge, and most important, the ability to not tell people in your life anything about your thought patterns, and, in the beginning, ignoring peer pressure from the financially illiterate. Freedom First.

#31 Golden Boy on 04.15.13 at 9:23 pm

The COMEX will default in the next week or several weeks and people will be “settled” with dollars, no more metal will be delivered! So, knowing that “game over” has arrived, they are dumping a massive volume of paper contracts with impunity to push the metals prices as low as possible before the “default.” This way the “shorts” do not have to and will not be “covered” when “supply” cannot be obtained because of “an act of God.” They will be settled in cash (at a profit no less) because these “unforeseen” disruptions in supply. “Who could have seen it coming?” will be the mantra. I would suspect that banking stress and “bail ins” will also become prevalent globally. The pricing structure will now push any and all physical sellers away from the markets and the “door” to safety is effectively being shut. Either you own precious metal in your hands or you don’t.

#32 Dr. Hoof - Hearted on 04.15.13 at 9:26 pm

You are all being manipulated …… the big boys know your moves….its one big milking excercise.

They own both sides of the equation.

Move the herd and skim the cream, as opposed to real assets and true productivity.

Like any herd that reaches the barbed wire fence….they accept the boundary, not realizing that if just one herd member simply moved a couple of feet forward, the fence comes down….. and the herd can avoid the slaughterhouse.

#33 Smoking Man on 04.15.13 at 9:26 pm

Tom Vu I proudly wear tinfoil hats…… Have one with a propler on top..

A lesson for you, you can’t demonize with a state sanctiond word designed remove the argument, and brand the individual insane.. When the individual is a self proclaimed loon….

It doesn’t work…..

#34 guy_ on 04.15.13 at 9:28 pm

mmmhmmm,

and the trillions of dollars in stimulus have no connection to surging equity markets, while main street gasps…

#35 Property Accountant on 04.15.13 at 9:29 pm

Hey Buyer,

Garth is right. In today’s environment on multi-family residential real estate in GTA region you can barely get 4.5% – 5.5% CAP rate – (learn that term instead on some Internal Rate of Return, that is usually being computed through multiple advanced interations and assumes reinvestment proceeds at its rate, which is unrealistic to say the least).

This CAP rate is valid assuming tenants do not destroy your property, you do not have to change the roof or fix driveways soon and tenants pay happy to be there. As Garth mentioned with 70% home-ownershipn rate in Canada, good luck finding good tenants these days. I am in this business, trust me.

Unless you bought it in 2008/2009 when prices were depressed or you are extremely creative in turning 300K shacks in the living place for 6 tenants, there is no way you can churn out 9-12& ROI.

#36 Smoking Man on 04.15.13 at 9:30 pm

Tom Vu I proudly wear tinfoil hats…… Have one with a propler on top..

A lesson for you, you can’t demonize with a state sanctiond word designed to remove the argument from the debate , and brand the individual insane.. When the individual is a self proclaimed loon….

It doesn’t work…..

#37 Aristophan on 04.15.13 at 9:31 pm

The same Canadian ‘journalism’ over and over again.
Interpreting the facts without looking in depth. Reporting sensation as it sells.

Let’s say you have 30 billion dollars and would like to make some money or screw a successful company. Accumulate some stocks in that company slowly or just start shorting it aggressively. Something to the tune of 5 billions short sales in 10 minutes. Then 10 billions in 1/2 hour. Triggering stop sales/washing them out along the way down. And buying the washed /flushed out stock with stop sales at the same time at lower prices. End of the day – you own the company.

It does not take genius to execute it. somebody did it after the battle of waterloo… we all know who.
Except it is illegal these days for some. Apparently not for the big guys.

Somebody sold 500 tons of gold shorts in very short timeframe with the intend to drive the prices down and crush the market. It worked. If these were real sales no one in their right mind would dump such quantities on a fragile market.

The question is: who bought the 500 tons of gold sold today on Comex. Apparently somebody was brave enough to catch the falling knife.

In other times these guys would be in jail. In our times somebody like Paul Grugman would proclaim the end of gold. And maybe he is right. The problem is that the system eventually fails. And then commodities rule again…

And do you visit this planet often? — Garth

#38 Dingleberry on 04.15.13 at 9:31 pm

This comment is for the G-Man…

I really appreciate all the insight and effort you put into this blog. I also love how you aren’t in it for the money – you could easily sell advertising space to companies (or realtors) but choose to keep it free of all that garbage.

Keep doing what your doing, buddy!

#39 Cici on 04.15.13 at 9:31 pm

#8 Steady Eddie

The Vapors were awesome, but this cover rocks hard too:
http://www.youtube.com/watch?v=2JLb1i1_i1I

#40 renting and waiting no more on 04.15.13 at 9:32 pm

#28 big town on 04.15.13 at 9:17 pm
What is happening in the rental market? I viewed two 2 bed/bath units: one in Port Credit and one in Burlington. The rent was the same in both $1,200 and both units had the hydro turned off and both units were very dirty and not cared for. I have rented cheezy budget properties down in cancun, mex which were painted and neat. Am I missing something or has dirty and stinky ok at 1200 per month?

——

hence, my username.

#41 Smoking Man on 04.15.13 at 9:32 pm

Wow looks I just developed a stutter…

#42 JSS on 04.15.13 at 9:33 pm

Garth –
Do you think the TSX is dead, along with commodity stocks which make up a good portion of the TSX?

Of course. Nobody needs oil any more. Sheesh. — Garth

#43 Canadian Watchdog on 04.15.13 at 9:33 pm

Given your track record, equities are utterly safe. — Garth

Safe huh? Let's review how big money is positioned. 

1) Hedge funds have the highest CAD short positions since Jan 2007. Chart

2) S&P500 volume is 2008 levels. Chart No liquidity

3) Asset Managers have reach record high net long positions in ES, of which many are weak positions from CME's ultra low margins. Know what a long squeeze is?

This is not safety. This is a house of cards ready to collapse. Markets can stay stupid for a while — if you want to bet on that — go ahead.

You just lost your shorts on gold. Go and heal. — Garth

#44 Thomas on 04.15.13 at 9:34 pm

We should we measuring our economic progress by how the poor and the middle class are doing. After all, besides the benefits being so narrowly focused, it hardly seems likely that the Fed induced stock market bubble, and off the charts corporate profits, are sustainable.

The Federal Reserve is selling to the world – the unrealistic, insane fiat dream that the monetary policy currently being employed by the Fed can fix the economy. It can’t, you cannot fix a debt induced problem by adding more debt.

Welfares role’s are going to grow, millions more will be looking for food stamps yet programs are being cut and taxes raised.

Is an American Spring coming? Certainly many of the same pressures that caused riots and civil disobedience across the Arab world are beginning to build in America and for the very same reasons.

The Arab Spring had many causes, socio-economic turmoil – lawlessness, poverty, lack of adequate medical facilities and attention, low to no employment, low wages, disease, no clean drinking water or water for irrigation and shortages of food or unaffordable food can all cause socio-economic pressure to build.

It seems to me there are very dangerous ambiguities about the U.S.A. democracy in its actual present condition. I wonder to what extent our ideals are now a front for organized selfishness and irresponsibility. If our affluent society ever breaks down and the facade is taken away, what are we going to have left?

#45 Buyer on 04.15.13 at 9:34 pm

@Property Accountant

You cares about GTA region ?

“I am in this business trust me” lol. Me too! Trust me!

#46 Aristophan on 04.15.13 at 9:36 pm

And do you visit this planet often? — Garth
——————————————

Yep, contrarian as always, made very good profits on the stock market lately and will make some more in the time to come.

In the meantime aligning some serious cash for purchase of distressed commodities at the right time.

#47 Jeff on 04.15.13 at 9:39 pm

Garth, you argue that there won’t be hyperinflation, nor will there be significant bankruptcies.

How, then, do you believe record debt-to-income ratios throughout the developed world will be tackled?

The only remaining scenario is a prolonged period of inflation (“hyper” in length, if not in rate), in which case commodities would be a good investment. But you also deny that conclusion.

How are you not contradicting yourself

Growth is not gone forever. — Garth

#48 Early Spring on 04.15.13 at 9:41 pm

Here is a interview on why barrick may be suffering the plunge it is??? http://m.youtube.com/watch?v=CCLu5hpYYWI

#49 Paully on 04.15.13 at 9:41 pm

Nice to know that no matter how far gold falls, there is still a subset of the population that values tin-foil above all!

#50 Soylent Green is People on 04.15.13 at 9:41 pm

Pls love of God stop saying
pathetic blog

,!!!

Unlike Justin Trudeau, I refuse to take myself seriously. — Garth

#51 Lollerskates on 04.15.13 at 9:42 pm

#43 Canadian Watchdog on 04.15.13 at 9:33 pm

Know what a long squeeze is?

——————-

Do you know what Lollerskates is?

Hilarity. On wheels!

#52 Reformed Gold Bug on 04.15.13 at 9:43 pm

What do you think of this ? Dundee international !

TSE:DI.UN

#53 EIT on 04.15.13 at 9:46 pm

A conference call! When’s the last time that happened?

#54 marnic on 04.15.13 at 9:46 pm

Aristophan, you are correct. Anyone can look it up; it happened. Fact.

#55 The Truth on 04.15.13 at 9:51 pm

But let’s get down to brass tacks. Since there can’t be two kings in a kingdom, it’s the international criminal banking cartel—not President Obama—who’s the real sovereign authority here.

Obama’s top law enforcer, Eric Holder, admits–fully in practice and nearly so in his own words–to being trumped. Obama’s announcement that bailed out banks have not committed any crimes, in the face of overwhelming and undisputed evidence to the contrary, quite accurately summarizes the system of sovereign immunity that is in effect: the real King–banks–can do no wrong. The President is merely their messenger.

#56 Intuitive Missus on 04.15.13 at 9:53 pm

#28 – big town
I know what you mean. In 2011 we sold our house and moved into a rental property. Hard to believe what people were asking for real dumps. We managed to find a decent rental but it is not inexpensive. A big plus though. We are glad we rented the property we did because now we know we would never buy a place like this even though we thought we would like it. Three story townhouse, good location but lots of stairs and lousy builder. We have now bought a small bungalow townhouse in a smaller town 20 minutes from here that suits our needs and no mortgage heading into retirement.

Hard to find decent rental properties at a reasonable price. We looked at lots of places. Many landlords are not very professional. We made an offer to rent one place on the landlords terms and he came back looking for more money and lots of conditions. Same thing happened to BIL. A real shakedown. Afterwards the agent came back to BIL and said they would accept. BIL told him to take a hike. Who does business like that?

There may be lots of shoebox condos available to rent in Toronto but who wants to live in a box?

#57 Smoking Man on 04.15.13 at 9:59 pm

52 Reformed Gold Bug on 04.15.13 at 9:43

I don’t normally rub salt in an open wound…

But perhaps road kill would be a more appropriate name than reformed gold bug…

Just saying

#58 big town on 04.15.13 at 10:00 pm

Where do you go to find research on buying preferred stocks? Any idea which preferreds are buys? the banks? insurance? the oils? who knows this stuff?

#59 debtified on 04.15.13 at 10:07 pm

Unlike Justin Trudeau, I refuse to take myself seriously. — Garth

Garth, is there anyway you can give that advise to Justin? I am not a big fan of the guy but I am a lesser fan of Mr. Harper. The NDP is not a viable option.

If little Justin has a chance of unseating the fascist in power right now, he has to avoid taking himself too seriously. Otherwise, Mr. Harper will destroy him with ease.

On another note, it’s time to thank you once again for the public service. I don’t agree with you 100% but, just the same, I learn from you an awful lot. I read every post. Keep up the great work!

#60 SHOOTER MCGAVIN on 04.15.13 at 10:08 pm

I moved to calgary 4 years ago and have been too scared to buy a house the whole time. Thank gawd i didn’t cause alberta is Toast!!!! Oils down another $2.50 overnight at $86. Good buy alberta. ahahaha

Gold is telling us something terrible is coming!

#61 Smoking Man on 04.15.13 at 10:08 pm

#55 The Truth on 04.15.13 at 9:51 pm

But let’s get down to brass tacks. Since there can’t be two kings in a kingdom, it’s the international criminal banking cartel—not President Obama—who’s the real sovereign authority here.Obama’s top law enforcer, Eric Holder, admits–fully in practice and nearly so in his own words–to being trumped. Obama’s announcement that bailed out banks have not committed a ny crimes, in the face of overwhelming and undisputed evidence to the contrary, quite accurately summarizes the system of sovereign immunity that is in effect: the real King–banks–can do no wrong. The President is merely their messenger.
…………

So what the hell are you waiting for, if what you say is true…

Work for bank. duh…..

#62 Humpty Dumpty on 04.15.13 at 10:14 pm

Here’s a few pivitol moments over the last 40 days…

1. Dead sea lions washing on shore in California appear to have died from radiation poisoning

http://www.naturalnews.com/039924_sea_lions_radiation_California.html#ixzz2QaRmMsc8

2. US rice imports ‘contain harmful levels of lead’

http://www.bbc.co.uk/news/science-environment-22099990

3. China admits pollution-linked ‘cancer villages’

http://www.france24.com/en/20130222-china-admits-pollution-linked-cancer-villages

4. A leaked study examining genetically-modified corn reveals that the lab-made alternative to organic crops contains a startling level of toxic chemicals.

http://rt.com/usa/toxic-study-gmo-corn-900/

Hoping it matters enough to post this G….

#63 Anyone surprised on 04.15.13 at 10:15 pm

CME Hikes Gold, Silver Margins By 18.5%

Anyone surprised, please raise your hands. And yes, it was fun when margin were hiked only on surges in the various futures contracts. Now, dumps works just as well. The logic, of course, is that gold shorts are also margined. However, judging by the immediate $15 drop in gold upon the announcement, those who are short the metals certainly have a much, much bigger balance sheet and cash hoard to satisfy any collateral requirements than those long.

#64 not 1st on 04.15.13 at 10:17 pm

Garth, aren’t financial assets technically anchored by real assets somewhere? And how can one rise while the other falls? They should move in lockstep.

If its all just paper chase and not indicative of the real economy producing real stuff, then your financial assets are just bitcoin 2.0.

#65 Jeff in Moose Jaw on 04.15.13 at 10:17 pm

Some deflation would be welcome.

Conference call – good idea.

#66 toughguy on 04.15.13 at 10:20 pm

where is the inflation ???? huh Garth we all live in north america the us is exporting inflation while we import deflation wait til them freshly printed dollars come back home that will end deflation ,deflation always precedes inflation according to history maybe not you but i’ll take my lessons from history eventually the printed notes finds its way into commodities in search of yield after all else fails

Give it up. You lost. — Garth

#67 not 1st on 04.15.13 at 10:20 pm

Garth, wasn’t it not long ago that you were recommending buying apartment blocks?

Missed that chance, didn’t you? — Garth

#68 Godth on 04.15.13 at 10:23 pm

How are private debt to GDP ratios looking these days?
Everyone’s tapped out on debt, consumer spending is slowing down, austerity is being imposed, and yet corporate profits are going to continue? I fail to see your logic.

#69 Kreskin/Uri Geller on 04.15.13 at 10:28 pm

We will use telepathy/ESP for the conference call(as long as they accept it collect.)

PS: Don’t mess with us or we will bend your spoons….yeah even the silverware.

#70 Jay_Huhman on 04.15.13 at 10:30 pm

Canadian Watchdog,

Using the last data point or two in a series isn’t the best idea, especially if the point is extreme and the series is apt to jump around. CFTC commitments might be the best data published but it has faults.

#71 Reformed Gold Bug on 04.15.13 at 10:30 pm

@Smoking Man, I had 10% in gold.

#72 Inglorious Investor on 04.15.13 at 10:31 pm

Contrary to the MSM or popular belief, central bank “money printing” or “liquidity” or “QE” is not for the economy. It’s for the banks. The banks are drowning in derivatives. Deflation in the banking system would destroy the world financial system as the derivatives default dominoes tumble.

Get this straight. Banks NEED inflation It is the source of their profits. But not only do they need inflation, which they create, they need accelerating inflation because the global debt load just gets bigger and bigger, requiring the issuance of debt at an ever faster pace.

We have a maniacal monetary system that is based on debt, rather than wealth. Money printing doesn’t help an over-indebted economy because in order to actually pay down debts (on the whole) you need real wealth, not more currency. All you actually do is create another bubble. If the economy has more capacity for debt, you can kick the can down the road a bit, but ultimately you cannot grow an economy on debt. You need growth in real wealth.

Less money has being going into the real economy and more into the stock market. That is largely where the inflation is being sent to die. Bernanke and his peers are trying to manage a slow burn deflation that protects the banks. But because the economy is not growing fast enough, the real wealth that they need is coming from savings. In other words, they are going to confiscate everything that is not nailed down, and some things that are.

This is far from over. Protect your wealth.

I casually predicted several months ago that gold would drop to around $1,200 in 2013. Get ready to buy more. Don’t let the paper people dissuade you. They say gold has no use because it does not generate income. True. But that’s not what gold is for. It’s like saying, “Don’t buy a security system because it does not generate an income.”

Gold has been in continuous demand throughout history across all civilizations on this planet. There are good reasons for this. The sell-off is not for fundamental reasons. Traders need to raise cash as commodities tumble. But physical demand is strong. John Embry once predicted the Comex would default. This would not be good, but it looks more likely.

The bottom line is, if the poop hits the fan, what you have in your hands will be far more valuable than the numbers you see on your computer screen. This goes for all assets. Might want to think about taking delivery of your stock certificates too instead of letting your broker have possession. Just something to consider.

Have fun.

Yawn. — Garth

#73 Reformed Gold Bug on 04.15.13 at 10:32 pm

#57 Smoking Man, also unless you give me some useful advise, you are no more than a troll.

#74 Freebird on 04.15.13 at 10:36 pm

Off topic but I appreciate the picture Garth. My husband and I are longtime supporters of Sick Kids Hospital both personally and through our business. I actually did some volunteer fund raising help onsite and got to meet some kids just like in the picture…blow you AWAY woth their courage! We also know doctors who have worked there…one still does and the other did his residency there before moving on because he cared too much. Great blog post tonight as well.

We have passed your website onto others…some who will learn from it and others not. Cheers.

#75 Smoking Man on 04.15.13 at 10:37 pm

#68 Godth on 04.15.13 at 10:23 pm

How are private debt to GDP ratios looking these days?Everyone’s tapped out on debt, consumer spending is slowing down, austerity is being imposed, and yet corporate profits are going to continue? I fail to see your logic.

………

So what, start a business, get an idea, idea first.. Billions of track6ets out there, bend Em over,, and sing hallelujah….

Love business……

#76 Freebird on 04.15.13 at 10:37 pm

BTW I realize the photo is not specifically about Sick Kids Hospital, but its the first thing I thought of. Love her!

#77 Tom Vu on 04.15.13 at 10:37 pm

#36 Smoking Man on 04.15.13 at 9:30 pm

Listen Gra$$hopper

I am the Master..ewe R the poopill.

Look at ewer last post… far better grammar..you see…you have it in you !!!!!…..to be a Master of the English language….(or at least beat Jean Chretien at SpEllInG BeE.)

#78 Smoking Man on 04.15.13 at 10:44 pm

#73 Reformed Gold Bug on 04.15.13 at 10:32 pm

I got run over too… But I can hold my gold in my hand, never sell It. Have distributed in 8 security deposit boxes, 3 countries, diversify.

It’s like an black swan insurance policy, about 5 precent.

But I bought it the 90s so… Not sweating….

But don’t here me pushing it or pouncing it, it’s just insurance to me.

#79 Toronto's >1mil$ house market -R.I.P on 04.15.13 at 10:45 pm

Here is the map with all the houses up for sale in Toronto and priced above 1mil$

http://recharts.blogspot.ca/2013/04/torontos-1mil-house-market-rip.html

#80 Canadian Watchdog on 04.15.13 at 10:48 pm

#70 Jay_Huhman

Agree on COT. But when you start reconciling other data, like margin debt , one can only easily conclude that this  ramshackle market is about to be wiped. Everything else is just hope.

#81 einsturzende neubauten on 04.15.13 at 10:50 pm

#60 SHOOTER MCGAVIN

four years ago (apr. 2009) was good time to buy RE in Calgary.

#82 To: Smoking Man the Duh….. Of Fools on 04.15.13 at 10:52 pm

The way of a fool is right in his own eyes,…. Whether it be the way of open profaneness, or self-righteousness, it appears to him to be the right way; it seems to him a very plain one, and he finds it pleasant; and, trusting to carnal sense, corrupt reason, and a false judgment, and having a high opinion of himself and his own knowledge, never asks after the right way, nor takes the advice of others;

but he that hearkened unto counsel is wise; that asks advice and takes it of such who are men of age and experience, men of longer standing, and are wiser than himself; who consults the word of God about the right way of walk, worship, and salvation, and makes the testimonies of God the men of his counsel, which are able to make him wise unto salvation; who hearkens to the counsel of Gospel ministers, and obeys it; and especially to Jesus Christ the wonderful Counsellor, and to the advice he gives, Revelation 3:18; and who not only hears his words, but does them; such an one is a wise man, Matthew 7:24.

[email protected]

You’re making me miss the metalheads. — Garth

#83 Gẻoge on 04.15.13 at 10:53 pm

#52 Reformed Gold Bug on 04.15.13 at 9:43 pm
What do you think of this ? Dundee international !

TSE:DI.UN
………………………………………..
Buy, nice yield :)

#84 Blinded on 04.15.13 at 10:53 pm

Soon the commercial shorts on gold will be exhausted, margin increases will whack gold some more, and it will be a great day for racing.

Derivatives took down lehmans, aig, atb, sun life, manulife, piigs, Cyprus, 2008 stock market, mfglobal, the list goes on, their glory is pain to paper investors…

#85 blok existentialist on 04.15.13 at 10:54 pm

Bravo, #74 Freebird and you’re not off-topic. You just bypassed all the trivial stuff and moved directly to The Meaning of Life.

#86 Blacksheep on 04.15.13 at 10:55 pm

Garth, great info on deflation today.

“There’s no debasement of currencies”

“With deflation, cash becomes more valuable.”

“As that happens, stuff – becomes less valuable”

http://www.storyofstuff.org/movies-all/story-of-stuff/

http://www.youtube.com/watch?v=MvgN5gCuLac

Been thinking we waste too much of our hard earned
CASH on, STUFF. Totally unnecessary!

It’s comforting to realize even if you:

“keep your cash in a can in the backyard”

You are getting ahead!

We got confirmation bank deposits are untouchable and with MMT my gov. will guarantee funds, no….mater…what.

Ultimately liquid, completely guaranteed, can hold it in my hands and thanks to deflation, gaining purchasing power on a daily basis!

Gold is toast, I think I’ve become a Cash Bug : )

#87 Fort Mac Flatlander on 04.15.13 at 11:00 pm

Hello blog dogs,

First off a prayer for all those affected by the Boston bombing.

Next, a rebalancing of the portfolio to take advantage of some dirt cheap miners. Cash flow positive miners that is. This shake up will knock out all those that overspent aquiring reserves and wean out the high cost producers. Juniors will scream. Majors may go tits up, but we will finally approach the strong surviving and they will be better for it. Damn glad I have a balanced portfolio. Do your own diligence.

#88 Dean Mason on 04.15.13 at 11:00 pm

This is just panic selling. In 12 years silver will be C$70 an ounce and gold will be C$4,300 an ounce.I have about 6.00% of my total portfolio in gold,silver and will hold it for the next 30 or 40 years.For me it is a hedge against inflation,world market turmoil and other financial panics.

I bought gold at C$280 an ounce and silver at C$ 6.00 an ounce in 2001. I bought long term bonds and strips since 1994 to present at these long term bond yields 9.60%,8.41%,7.60%,6.25%,5.60%,5.00%,4.90%,4.7%,4.25%,3.92% etc.

If your right deflation is coming my interest paying bonds and compounding strips will be just paying and adding interest with no problems because I hold all my bonds to maturity so market prices don’t really affect me.

#89 Investx on 04.15.13 at 11:00 pm

“Fat” dividends?
Where?

#90 Smoking Man on 04.15.13 at 11:02 pm

Amazing MSM bombs went off on patriots day…. Can you guess what’s coming next….

You can’t beat the machine…..

#91 Devore on 04.15.13 at 11:03 pm

#8 Steady Eddie

Dow / Gold Ratio, if it holds true and 70′s repeat Dow will crash in less than a month… could see a drop as much as 25-40%.

DOW/gold ratio has varied as widely as their prices over time, so what exactly do you expect to “hold true”?

Junk. — Garth

#92 Deflation on 04.15.13 at 11:11 pm

I’m still waiting for my cost of living to go down from all this deflation that is supposed to be afflicting us. Wake me up when our ‘small’ everyday expenses like tuition, energy, transport, insurance, healthcare and food go down. Hopefully at least housing goes down.

#93 Gogo on 04.15.13 at 11:12 pm

Garth, how much gold did you short??? :) It is one thing to talk and another to make money…

#94 Victor on 04.15.13 at 11:13 pm

time for more QE

#95 coastal on 04.15.13 at 11:13 pm

Gold crashing is not a good thing as you preach and was totally unpredictable to this extent. If commodities crash then all your stocks with dividends tank too, it’s a barometer of the economy. 1990’s all over again,maybe worse.

Oh yeah, US housing numbers not good, consumer confidence at multi year low. God bless the USA and Canada, all is not rosy no matter what glasses you have on.

Gold is a barometer of emotion, not the economy. — Garth

#96 T.O. Bubble Boy on 04.15.13 at 11:18 pm

For anyone who doubts the insanity of Midtown/North Toronto real estate these days.

Exhibit A: 96 Chaplin Crescent.

Sold in 2008 for around $1,000,000 (was listed twice in April 2008, once at $999k and once at $1,049,000).

Then, 4 years later, listed in April 2012 for $1,080,000
http://www.susanbandler.com/recent-sales/96-chaplin-crescent
(virtually no gains in 4 years)

Then, one year later, it was again listed April 2, 2013 @ $1,850,000, and re-priced down to $1,750,000 one week later:
http://www.realtor.ca/propertyDetails.aspx?propertyId=13013958&PidKey=30604203

Compare the pictures, and tell me even 5 things that have been renovated in the past 1 year…. betcha can’t do it!

So, this place is apparently worth $650k more than exactly one year ago, and the biggest “improvement” that I see besides some landscaping outside is that a wall was removed by the kitchen (and, apparently they felt the need to replace old granite & stainless with new granite & stainless).

This may be the most wasteful set of renovations I’ve seen (offering next to zero improvements to the actual house) — and yet the seller feels that they increased the value by 70% in 1 year.

Maybe the new buyers will put on some new paint and charge $2M next year.

This is the epitome of the greater fool theory.

#97 Fort Mac Flatlander on 04.15.13 at 11:24 pm

#44 Thomas

“If our affluent society ever breaks down and the facade is taken away, what are we going to have left?”

I believe the correct answer has already been seen in France, post guillotine.

#98 kreditanstalt on 04.15.13 at 11:27 pm

“…margin-fueled hangover keeps stock values depressed.”

Wot? Come again? But most seem to think they’re far, far bubbly and overbought.

Apparently, now that the leveraged and desperate hedgies (etc.) have stupidly burned through any profitable gold holdings, they’ll be starting to liquidate their (paper) stocks next – probably this week.

Don’t you mean “margin-fueled hangover keeps gold depressed”?

#99 jim on 04.15.13 at 11:28 pm

Garth’s point about gold is well taken. It is not performing well right now at all.

However, there is a certain lunacy in praising central banks for loose monetary policy, when it was those same central banks that created a lot of the problem in the first place with… you guessed it… loose monetary policy.

Not to mention that the moral hazard infesting the financial system has yet to be cleaned up. When banks can rely on constant bailouts and freshly printed money, there is rot at the heart of our society.

#100 Dingleberry on 04.15.13 at 11:29 pm

Does anyone have any insight as to what happened to the tsx today? Down 300+ points is an anomaly.

Is it just mere coincidence that the tsx tanked big time and a bombing took place in Boston, or is there more to the story?

#101 JustSayin on 04.15.13 at 11:30 pm

I bought more gold (stocks/etfs/funds) today.

That said, I did on Friday too!

Will keep doing so, as long as the carnage lasts.

Bought more Berkshire Hathaway too, though.

#102 maddius vladdius on 04.15.13 at 11:33 pm


#18 mikef on 04.15.13 at 8:57 pm — “anywho c’mon Le Mad Vlad I sure miss you”

Basically mikef, I’m retired, have too many other things to do and out of the loop now but Monday’s events raise some interesting questions, such as:

Were the two explosions Part of the Drill? If so, why were they planned for this particular day, and who okayed these plans?

Why was the Cellphone service shut down in the Boston area? To prevent cellphones, some of which have built-in video cameras from taking pictures?

Why was a Facebook page made up before the actual bombings happened?

Why is a Saudi person being detained as a person of interest? If Saudi Arabia (and China) want to cause trouble, all they have to do is demand their money back. Weren’t Saudi nationals behind 9-11, yet it is quite clear that 17 of the 19 ‘hijackers’ are still walking free, jumbo and any jets can be flown by remote control by anyone from a different location. Are there other nationals behind this?

Would the cost of ObamaCare have anything to do with it?

Algorithms SMan is a better soure to verify this, and here.

Gun Control Is the US involved? Evidently, they want to disarm sheeple of the world.

So your guess is as good as mine!

#90 Smoking Man — “You can’t beat the machine…..” — Sure as hell ain’t joining ’em! Break on thru, bud– much better on the other side!

#103 Dave on 04.15.13 at 11:33 pm

The end to the 10 year bull market run in Gold has been telegraphed for almost 2 years now…..

Gold had an incredible run from $300 in 2001 all the way to $1900 in the summer of 2011. A terrific investment relative to equity markets over the same time period.

The future for Gold seems clear to me…I expect Gold to remain in an ugly bear market for a long, long time. However, it still has a small little place in the makeup of my diversified and balanced portfolio.

Garth, I am surprised that you would suggest to investors that they should have no position in Gold. That doesn’t appear to follow your preaching of a balanced portfolio?

No hockey cards, either. — Garth

#104 Montreal in good shape? on 04.15.13 at 11:34 pm

Mr. Garth, what are your views on condo and SFH housing markets in Montreal? I get the impression that things are not as bad as in the other major Canadian cities, correct? Delaying buying in or near downtown will not likely be rewarded by 15+ percent price drops, right?

#105 Smoking Man on 04.15.13 at 11:35 pm

DELETED

#106 Charles Ponzi on 04.15.13 at 11:42 pm

Growth is not gone forever because forever is a very long time. Yes, the last Great Depression did finally end, but real growth only returned after the devastation of a world war and that growth came at the expense of the environment.

Man cannot escape from the laws of nature forever—and I doubt whether we will have any more success at escaping the laws of economics. Sticking your head in the sand and not contemplating the ‘impossible’ is immature and irresponsible. Here in Australia, many people still believe it is impossible for house prices to crash.

Debt fuelled growth is not real growth. We are now facing an environmental crisis as well as an economic crisis. The global economy is like a complicated food web that is currently under enormous stress. Food webs seem incredibly stable until they are not.

An individual snowflake looks pretty harmless, but under the right conditions can trigger an avalanche. War in Iran or North Korea, a bird flu epidemic, a volatile stock market, a terrorist attack or another Cyprus may just be the last snowflake needed under incredibly unstable current conditions.

The problem with many politicians is that they often fail to consider the bigger picture as they have a tendency to micromanage in accordance to daily poles and short election cycles. We are both sitting at the back of a train where the front carriages have jumped the track. We both feel no immediate sense of danger inside our carriage—but I do invite you to have a look out the window and stop staring at the gorgeous blonde sitting right behind us. Anyone looking out the window and taking a macro view of events can see that we are heading for disaster.

#107 Devore on 04.15.13 at 11:42 pm

#63 Anyone surprised

Oh make up your mind already. On the one hand, gold bugs bemoan the leveraged “paper trades” supposedly manipulating prices, on the other they’re up in arms whenever margins are raised. Should be a good thing long term, right, flushing out the “weak hands”?

#108 new canadian on 04.15.13 at 11:45 pm

You can still bet on “great” American economy but a sell-off in paper gold market won’t change anything. Gold will pick up shortly and then equity markets will crash.

#109 Devore on 04.15.13 at 11:46 pm

#63 Anyone surprised

And when are they supposed to change margin requirements anyways, if not on surges? If they it did on drops, they’d be accused of tanking gold, if they do it on flat runs, they’re suspect of trying to introduce volatility or price drops. Just can’t win with these guys.

#110 Physical PM's on 04.16.13 at 12:01 am

Interesting that while the prices of PM’s are crashing, demand for physical delivery is still high. Tug of war going on here – someone will get the short end.

http://www.coinnews.net/2013/04/13/gold-silver-plunge-in-weekly-loss-us-bullion-coins-surge/

#111 Godth on 04.16.13 at 12:02 am

#104 Charles Ponzi

“Growth is not gone forever because forever is a very long time.”

Que George Michael – faith, you’ve got to have faith.

For anyone that needs to scrub that out.
http://www.youtube.com/watch?v=OLW4Hb4SI_Y

#112 Nemesis on 04.16.13 at 12:02 am

…”Money flees dead assets.”…

Assets flee DeadMoney.

There, fixed it for ya.

Otherwise… [“Remember what matters.”], you’re on the RightTrack.

#113 Dean Mason on 04.16.13 at 12:05 am

To Dingleberry #100

The one main reason the TSX dropped 332 today is because Canada’s economy and sectors of the TSX has a much larger portion of commodities gold,silver,natural gas,oil,copper,nickel etc. compared to the U.S.

So when they drop hard the TSX goes down more than the Dow Jones. The Boston bombing did have an impact as well. You can see in the falling C$ down 0.83 cents or down 0.84% vs U.S $ to 97.83 cents. A almost 1 cent drop in one day is not usual.

#114 A local martingale on 04.16.13 at 12:16 am

Stimulus programs? Seriously, you think that stimulus gave anything but a negative multiplier?

Please Garth, look up Ricardian Equivalence.

#115 Bobbo on 04.16.13 at 12:16 am

Gold + naked short selling

#116 Small Town Steve on 04.16.13 at 12:25 am

#102

Why was the Cellphone service shut down in the Boston area? To prevent cellphones, some of which have built-in video cameras from taking pictures?

It was most likely shut down because some bombs are set to go off by receiving a cell phone signal and they were probably trying to prevent further damage ASAP. That is my guess.

#117 Poorboy on 04.16.13 at 12:41 am

The question is: who bought the 500 tons of gold sold today on Comex. Apparently somebody was brave enough to catch the falling knife.

Central banks. The irony is deafening.

Gold is not done. If this decline continues, production will be taken offline and gold will find its bottom. Industry numbers are a lot clearer now and we’re not there yet (nor have we been there for any period of time), so there’s still plenty of downward potential.

This expansionary monetary policy is unprecedented and masked by the record low velocity of money. The money supply is still out there. When the pendulum swings the other way and the velocity of money starts to rise (and it will), that’s when inflation starts becoming a real threat. Central banks will respond by cranking interest rates as fast as they dropped during the financial crisis. It is almost universally their #1 mandate and interest rates are one of their only real tools.

Gold will have another day on the speculative risk of imminent inflationary pressure alone (nevermind the chance that the banks will muck it up), irrespective of if materializes (I’m betting it won’t). I’m watching for my entry point on gold. After the dust settles, a bet on gold is anyones guess.

If you are heavily indebted right now, bet that interest rates will rise fast and furious – and put pressure on your solvency. Deleverage now.

Corporate profits cannot remain high despite anemic wage and job growth. These profits are presently sustained by debt and debt is at record highs.

We are in for another boom or bust cycle and it’ll be upon us in within two to three years. So if you’re “betting on America” let’s be clear about what you’re doing – you’re betting on boom. You might be wrong.

#118 Waterloo Resident on 04.16.13 at 12:43 am

Garth said: (“Gold’s toast because there’s no reason to hold it.”)

Yup, I couldn’t have said it better myself !

#119 Cowpie on 04.16.13 at 12:46 am

My thoughts and prayers tonight are with the runners and their families in Boston. Such senseless brutality and needless loss of life saddens me. I’m grateful for what really matters most in life, and to realize it can all change so fast.

#120 westopia on 04.16.13 at 12:46 am

VIX (aka investor fear guage) had it’s 5th biggest move today. Last time this happened gold went to…. The word of the month now is ‘volatility’.

You think this is scary? You frighten easily. — Garth

#121 Canadian Watchdog on 04.16.13 at 12:50 am

Competition Bureau loses online-listings case against Toronto Real Estate Board Link

No Zillow for Canadians, because what the Governor-General dictator wants, he gets.

#122 daystar on 04.16.13 at 1:03 am

From here, I will not even speculate on where gold bottoms or how long the margin-fueled hangover keeps stock values depressed. – Garth

I’m your huckleberry. Remember me, the anti gold guy? Gold will drift into the 1200’s within the next 6 months and trade steadily below 1,000 within the next two years. Heck, gold could trade below 1300 tomorrow but the bottom line is gold has fallen for some highly fundamental reasons.

Forget China. China had a less than expected quarter, big whoop. “Gold falls from bubble” makes for a better headline but even so, doesn’t do gold justice. China leading the way to gold falling is nothing short of a headline fake. There are 3 big reasons why gold is falling right now and at the top is shrinking U.S. trade deficits.

http://online.wsj.com/article/SB10001424127887324600704578404303079218028.html

http://4.bp.blogspot.com/_pMscxxELHEg/SXu-IBM6k3I/AAAAAAAAEXE/Q2KYO8ce_9Q/s1600/TradeDeficitGDP.jpg

The link below will require a tweak for longer timelines but what it illustrates is that under GWB trade deficits were in the 70+ billion monthly range. Since Obama, its shrunk to the low 40’s and energy policy has been a huge part of it. (some could claim Iraq U.S. corporate oil production as playing a part and it is, but the big story with energy in the U.S. is dramatically increased oil production with light crude from North Dakota (Bakken play), Wyoming and Texas as well as Nat gas from fracking in Eastern U.S. and the mid west). To put it in perspective, the U.S. was running monthly trade deficits in the low $40’s in the billions in 2003.

http://www.tradingeconomics.com/united-states/balance-of-trade

The consequence of an energy renaissance in the U.S. cannot be understated. For the last 3 1/2 years running or more, there are more drilling rigs working on U.S. soil than the rest of the world combined. (not sure if that’s U.S. corporate stats or by location i.e. U.S. soil, but this point can’t be missed)

http://www.wtrg.com/rotaryrigs.html

Couple this resurgence of oil drilling with ethanol blending (the U.S. consumed over 5 billion bushels of their 14.3 billion bushel corn crop in 2011 for ethanol blending. This is as a result of an increase of more than 3% ethanol gas mix in 2006 to 10% ethanol/gas blending in 2011. Readers… that’s significant):

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

So lets summarize. U.S. energy corps domestic and abroad are projected to produce more oil and gas domestically and internationally than they consume at home by years end. The U.S. has a shot (I think brief but its doable) to produce more on their own home soil than they consume at home within 5 years. On top of this, the U.S. is producing 10% ethanol at the pumps that isn’t part of the equation. There is added production internationally coming from Northern Iraq and at sea but the main pop in production is coming from U.S. soil specifically with fracking and horizontal drilling of old vertical wells. What is this doing to trade deficits? Try reducing them from the 70+ billion in 06′, 07′ and 08′ to the low 40’s and falling and what does that spell for gold coming off its biggest bubble ever?

What is the consequence of continued shrinking trade deficits and painful but necessary deleveraging since 08′? A stronger dollar which in turn lowers commodity values including energy and adds confidence to the U.S. economy. I can’t stress this enough really. There is a strong connection between oil and gold and the sooner Canadians realize it, the better off they will be in understanding what lies ahead.

It doesn’t stop there of course. Lower trade deficits, a stronger dollar cheapening commodities overall, deleveraging, flat lined incomes and predictably low interest rates from Q.E. all bode well for corporate U.S.A. profits and outside of intangible risk coming from Q.E., there is no risk to help inflate the value of gold. Gold has always been known as a hedge against inflation. Where’s the inflation with a stronger U.S. dollar cheapening commodities? Its like Garth says. These are asset deflationary times but core inflation led by a falling loonie, is set to rise.

As the U.S. dollar strengthens, the loonie will be under stress to stay at par and with commodities tanking will it widen our own trade deficits? Of course! If commodities do what I think they will, the loonie will predictably fall and what will that do to inflation in Canada? That’s right, it will go up. Physical assets will deflate, but core inflation will rise specifically on the import side. If inflation creeps up well past 2%, what will the BoC do? That’s right, they’ll raise rates to try to prop up the falling loonie. Everyone has been looking for that trigger that pops our gas bag housing bubble here in Canada, well “there ya go”. Some folks think its a waste of money to pay an extra 1% for a 10 year mortgage. I’m not one of them. I’m the anti-gold guy, remember?

While we are on the subject of oil, Canadians had really better think hard as to why Alberta politicians want to build pipelines south of the line to a nation that quite predictably will either not need our oil or be in the position to offer a whole lot less for Western Canadian Select than before. Its not like Harper and his crew don’t know what’s going on with U.S. energy since Obama like your average energy investor would. So why would they push so hard for southern pipelines only, against what’s actually good for Canada? Why would they not do what’s best for Canadians? Because that’s not what oil lobbyists are paid to do and the consequences could be a heck of a lot greater than $18 per BOE spreads between WTI and WCS than we are uncomfortably becoming comfortable in getting used to:

http://www.baytex.ab.ca/files/pdf/business-opportunities/Historical-WCS-Pricing.pdf

http://www.rbc.com/economics/market/pdf/wcs-price-spread-impact.pdf

Oh…. and this “bitumen bubble” b.s.? Only a lying Albertan oil lobbyist working for big U.S. oil would make such a claim. Bitumen has an API of 8. Heavy crude has an API of 11. To be of pipeline quality, heavy crude is blended with 23% NGL’s to make pipeline grade (20.5 API). It takes about 29% NGL’s to blend bitumen to a pipeline grade. As it continues its path south more NGL’s and light crude with much higher API’s are added. In the case of Canadian heavy crude, API’s are in the high 20’s by the time it gets to refineries and with ethanol they can pretty much make whatever they want. What I’m saying is that there is no such thing as bitumen oversupply, only a shortage of Canadian NGL’s to get bitumen to pipeline grade and that’s not happening! Its not grade that is the big concern with Alberta energy. Its supply/demand and access that are the main issues and when one truly looks at the overall U.S. energy renaissance in production in the U.S., Canadians really have to ask themselves why Canada isn’t piping western oil to eastern Canada. Why eastern Canada is paying Brent crude prices for decades now while western Canada has been hosed for its WSC and all Alberta politicians want to do is pipe it south is… well… try government corruption? Really, why should we elect Big U.S. oil lobbyists and expect a different result? Why should we expect functionality from dysfunctional self interests? Can’t happen folks. The world doesn’t work that way. Never has and never will.

#123 Sgip on 04.16.13 at 1:09 am

RT ‏@TrendsmapCanada 5m #inwayoverhishead is now trending in Canada trendsmap.com/ca … #cdnpoli #IdleNoMore #oilsands #p2 #roft #ableg

#124 Carpe Diem on 04.16.13 at 1:10 am

What matters to me is the death of the 8 year kids in Boston today and the people who lots limbs … how can we calculate that in our portfolios?

I had a friend running the marathon today. I am happy she is safe!

Aside from that … American stocks rules! Gold poops!

Sad day.

#125 Vince on 04.16.13 at 1:13 am

Keep buying precious metals all the way down.

#126 Two-thirds on 04.16.13 at 1:19 am

So if deflation is a threat, and it materializes in the next 2-3 years, is it best to load up on equity income and fixed income investments (i.e., prefereds, bonds, REITS, etc) now before it happens?

Is the pullback in the markets, which started yesterday a good entry point for equity income and bond-type investments?

Sitting on cash, waiting to buy some good deals in the near future…

#127 Coho on 04.16.13 at 1:57 am

In the spirit of today’s blog title ‘What Matters’, please find below a quote from President Obama.

“You hear some of these quotes: ‘I need a gun to protect myself from the government.’ ‘We can’t do background checks because the government is going to come take my guns away,’ Obama said. “Well, the government is us. These officials are elected by you. They are elected by you. I am elected by you. I am constrained, as they are constrained, by a system that our Founders put in place. It’s a government of and by and for the people.”

It is alarming to read such a quote by the leader of the ‘free world’. Talk about spin on the American Bill of Rights! HELLO. The law of the land was set up by the founders to indeed be very constraining to any future government’s quest to usurp the power from the people. George W Bush said “it would be so much easier (for him) if this was a dictatorship, so long as I’m the dictator”. Yeah, that’s why the Bill of Rights was tacked onto the Constitution — to make things very difficult for would be despots.

Obama is saying is that the government IS the people and if it sees fit to disarm the people to ‘protect’ them because they want it then it is lawful. Of course the majority of people wanting to give up their arms is key to attempt to get away with repealing the 2nd amendment. Yes, the government would love that. After all, governments tend to increase their power over the people. They are inherently anti-freedom and anti-liberty.

The way things are unfolding by way of a parade of ‘lone gun nut’ mass shootings and other terrorist acts it is likely that people will eventually become so fearful (as opposed to fierce) they’ll be convinced that giving up their arms will stop the onslaught. And if so, since when does the majority consensus trump the law of the land, especially when they can be frightened and herded in whatever direction is needed to achieve certain government agendas?

And indeed, if the government IS the people and is doing what the people want then what is being said is that the people want war, that the people want to give up their rights, that the people turn a blind eye to the financial criminality of the ‘too big to fails’, that the people support drug dealings by shadow government departments to finance covert ops, that the people agree to regime change where their government sees fit, that the people agree to political assassinations. These are dealings that are known. God knows what shenanigans and nefarious activities are going on that the general public is completely oblvious of.
Anyone can see where this is going. Hell, it has already arrived! Be prepared people, any of you who remains steadfast in support and adherence to the law of the land, the Constitution of the United States of America, will be deemed a criminal or terrorist sympathizer for not wanting to give up your rights and thus constraining your government’s ability to ‘protect you’.

#128 The American on 04.16.13 at 2:05 am

At #108: new Canadian… Wrong.

#129 Julie on 04.16.13 at 2:07 am

Ah yeah…………so like I said earlier……you MSM and Govt believers? Take OFF your tin foil hats and come down to reality…..BOMB SNIFFING DOGS were GOING NUTS at the finish line but the handlers did nothing. Just like 911, just like at the tube bombings in London etc etc etc…… yet another false flag that will be blamed on…..wait for it…..

T E R R O R I S M

http://www.local15tv.com/mostpopular/story/UM-Coach-Bomb-Sniffing-Dogs-Spotters-on-Roofs/BrirjAzFPUKKN8z6eSDJEA.cspx

Enjoy even less freedoms people…..coming to a fascist country (like Canada) near you…..

#130 Van guy on 04.16.13 at 2:09 am

Garth,

In the last post I said you recommended XCS. It wasn’t in a specific post but rather a question I asked you right after your Vancouver presentation. Here it is sir,

http://www.greaterfool.ca/2012/08/21/blog-dogs-west/#comment-191179

Wasn’t that a recommendation?

Of course not. — Garth

#131 Anon on 04.16.13 at 2:16 am

“If no major banks have failed and no countries gone bankrupt through the travails since 2009, then it’s obvious this will probably won’t happen”

What kind of logic is that? The structural problems did not go away, they got pushed out into the future and at some point will have to be dealt with.

#132 rp1 on 04.16.13 at 2:37 am

US dollar has moved into a bull market!

If this plays out like 1981, and all previous events line up spookily, there’s going to be:
1) a commodities crash – Oh Canada! China!
2) a real interest rate shock (4%?)
3) a big global recession which is nicer to the US than others
4) a new secular bull market
My target for the S&P would be around 1000. A triple top “reset” target is 350 if things go kooky.

If it’s like 1949 were going to get:
1) higher taxes
2) focus on families and dependents
3) crazy technology!
This might be pretty good. Definitely invest.

If it’s like 1936 we’re going to get:
1) They’re taking your gold at a bad price!
2) WW3 !!!
Not sure I want to bet on that one, actually.

#133 Tony on 04.16.13 at 2:43 am

GDP in the past has been in the 3 to 4 percent range. In the future it will be in the 0 to 1 percent range. The disconnect between the real world and commodity prices are finally starting to correct.

#134 Tony on 04.16.13 at 2:51 am

Re: #100 Dingleberry on 04.15.13 at 11:29 pm

Gold and oil make up a large percentage of the TSX.

#135 ronthecivil on 04.16.13 at 3:07 am

Not that it’s a big part of my portfolio but I added a little bit mining companies to my list of ETFs puking out dividends because they are starting to have low P/E ratios and could very well be bargains.

Just following the theory that when things crash it means they are on sale and thus buy them.

#136 Buy? Curious? on 04.16.13 at 3:18 am

Garth, would you consider yourself the Sean Connery to these Gold Metal pumpers? You do have that type swagger.

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

On a side note, please watch this video and replace “Britney” with Smoking Man.

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

And of course, I can’t forget about the Ladies.

http://www.youtube.com/watch?v=3rjpDzIUVAE

#137 Steve on 04.16.13 at 3:21 am

The gold price drop is the ultimate head-fake before a new rally and new highs priced in US Dollars and all fiat currencies. It will happen for the same reasons as people like Jim Rogers, Marc Faber and Peter Schiff have been saying. Money printing on an unprecedented scale to paper over otherwise unpayable debts.

If you are serious about a company like Barrick Gold failing, this implies others would too. Gold production would plunge to almost nothing.

The only real fundamental reason gold would fall would be if real interest rates (nominal rate over inflation) were positive and the currency was not be inflated ad infinitum. It’s not 1981 and we don’t have 21% interest rates.

Too many obligations in the Western world are unpayable. Our choices are either hard default and deflation OR inflate and print to infiniti.

It is a teeter-totter between the two and the years ahead will be extremely volatile.

#138 ronthecivil on 04.16.13 at 3:25 am

“Why is a Saudi person being detained as a person of interest? If Saudi Arabia (and China) want to cause trouble, all they have to do is demand their money back.”

And since China pegs it’s currency to the US all they would have to do is mint that 5 trillion dollar coin and give it to the Chinese. Even steven.

It’s what they are already doing, but in slow motion.

There’s certain freedoms in being flat broke/massively in debt. When you don’t own anything there’s nothing to take away, all fines become meaningless, and you literally have nothing to loose in every money negotiation.

#139 blase on 04.16.13 at 3:38 am

Please Garth, tell me why this can’t happen in Canada?

http://www.ft.com/intl/cms/s/0/f01f5c66-a5b7-11e2-9b77-00144feabdc0.html#axzz2Qbqm5iC1

“Popular rage against the (Spanish) banks that lent so recklessly is rampant. It has focused in particular on the mis-selling of preference shares in banks to unsophisticated savers – who thought they were buying a safe product, only to be wiped out when banks restructured. As elsewhere, many of the bankers responsible still seem to be doing mysteriously well.”

#140 hobbygirl on 04.16.13 at 4:26 am

I’d love to tune in on the conference call, but this busy librarian (yes, you need a graduate degree for that) will be busy helping college students who up until now have wisely spent their parents tuition learning at the school pub. Repeat business is always welcome since our current president has dropped our college admission requirements and faculty are no longer allowed to fail students (standards you would see set at an access college).

Given my experience at this point I think Smoking Man’s arguments have some merit.

That gripe being said…your chat is a most awesome idea and I’d give my valuable time to hear a playback

#141 JW on 04.16.13 at 5:32 am

Places such as Richmond BC are correcting fast. It’s the pockets of speculation over the last 5 years or so that will get hit the hardest. I’ve tracked one house; 3 price drops over the last 6-8 months. Nada. Likely on offer below assessed value which now means very little…look out below!

#142 hagbard on 04.16.13 at 6:02 am

Betting gold and silver will recover today.

#143 Tony Right on 04.16.13 at 7:09 am

This comment section is pathetic! Why do so many people come to a free blog, that has been telling you correctly for years not to buy Canadian real estate, and bash the writer for being right? Are they still trying to get their parent’s approval by writing a reply longer than a novel about some economic or financial theory, or are they just angry because all they own is real estate and/or gold (both which suck) or are people just dicks?

#144 tkid on 04.16.13 at 7:10 am

Why was the Cellphone service shut down in the Boston area? To prevent cellphones, some of which have built-in video cameras from taking pictures?

Cell phone service was not shut down – the cell phone carriers have all made announcements that service was overwhelmed by the number of calls, not shut down. Appeals were made by authorities to those with WIFI to open their WIFI connections up so people with cellphones could switch to email instead of text/talk.

#145 LP on 04.16.13 at 7:26 am

#136ronthecivil on 04.16.13 at 3:25 am

There’s certain freedoms in being flat broke/massively in debt. When you don’t own anything there’s nothing to take away, all fines become meaningless, and you literally have nothing to loose in every money negotiation.
***************************************
Cue Gordie’s “Freedom Means Nothing Left to Lose”.

#146 graham on 04.16.13 at 7:40 am

That’s a sad pic. What matters to her is life…Thats it.

My point. — Garth

#147 Victor V on 04.16.13 at 8:07 am

Competition Bureau loses online-listings case against Toronto Real Estate Board

http://www.theglobeandmail.com/report-on-business/economy/housing/competition-bureau-loses-online-listings-case-against-toronto-real-estate-board/article11249681/

The Competition Bureau has lost a high-profile attempt to force the Toronto Real Estate Board to make it easier for web-based real estate brokerages to compete, a case that was being closely watched across the country.

The Bureau said late Monday that its case has been dismissed. A spokesman said that an appeal is possible…

…The matter was heard by the Competition Tribunal last fall, and the decision had been pending since then.

The Tribunal’s brief order, released to parties involved in the case on Monday,suggests that the Bureau filed under the wrong section of the Competition Act, and that a case argued under a different section of the Act (under which less extensive remedies would be allowed) could have been more successful.

“This was a classic case of a legal technicality where nothing gets resolved,” said Lawrence Dale, head of real estate business at Zoocasa. “The Tribunal said the case was filed under the wrong section and has now steered the Bureau to re-file under the correct section. Once these technicalities are addressed, the fundamental issues still remain to be determined. How long that takes to get resolved is anyone’s guess.”

#148 Craig on 04.16.13 at 8:08 am

Hi Garth, great blog and you’ve been bang on in the 2 years I’ve been reading. Now I need your opinion / advice. We are in great shape financially we think. We own a $600K home, mortgage free, North of the GTA.
No debt at all, nothing. Kids have grown up and moved out so it’s just my wife and I.

1 – The debate at home is, do we downsize or sell and rent a home?

2- The current markets are crazy so if we sell our house where do we put the money that’s safe?

We’re afraid of investing all this money only to see a market meltdown and we lose a % of that investment.

We’re both in our 50’s.

Thanks much

Craig

#149 AK on 04.16.13 at 8:18 am

#88 Dean Mason on 04.15.13 at 11:00 pm
“This is just panic selling. In 12 years silver will be C$70 an ounce and gold will be C$4,300 an ounce.”
——————————————————————–
Will that be exactly 12 years or plus or minus 1 day? :-)

#150 jess on 04.16.13 at 8:22 am

atm evolution goes back to the late 60’s
deregulation and tech
http://www.bloomberg.com/news/2013-03-27/how-the-atm-revolutionized-the-banking-business.html

http://www.cbsnews.com/8301-202_162-57399610/sweden-moving-towards-cashless-economy/

#151 RegularReader on 04.16.13 at 8:48 am

Hello Garth,

I can only get the last 4 articles in your RSS feed (http://www.greaterfool.ca/feed/)… is there something wrong with it?

I went away for a couple of weeks and now I can only get the last 4 articles… (I even tried with different RSS readers and I’m getting the same result)

Thanks in advance

My spyware detected you were not nodding in agreement when you read them. Hence, cut off. — Garth

#152 Hammertown on 04.16.13 at 8:51 am

Dear Garth

The picture in this last blog post “what matters” proves what I always suspected. You may indeed be the holy grail of a perfect man. I thank you for your wise counsel, your intelligent humour and your human decency.

Sent from my iPhone

#153 marnic on 04.16.13 at 8:53 am

#146. Wow, $600K and all you get for it is “afraid”? That’s some kinda wealth you got there.

#154 blase on 04.16.13 at 9:17 am

House I saw recently listed in London, Ontario for $299,000. Realtor wrote in the notes to the listing that offers would be considered one week later. That day came and went, and the house was listed at $289,000. Hasn’t sold yet. Absolutely spectacular street, towering trees, gorgeous lawns, very prestigious area in every way. Locationx3. Still no sale. The house is 43 years old, has a new addition to the kitchen that is stunning, but no takers. Same house in Calgary in that setting would go for close to a million$. Can’t imagine what it would cost in a nice locale in Toronto. Goes unloved in a relatively large Canadian city. I’m guessing the seller is shocked at this point it hasn’t sold above selling price, which seems low for the neighborhood.

#155 T.O. Bubble Boy on 04.16.13 at 9:17 am

@ #58 big town on 04.15.13 at 10:00 pm
Where do you go to find research on buying preferred stocks? Any idea which preferreds are buys? the banks? insurance? the oils? who knows this stuff?
———–

Just google greater fool (“preferred site:greaterfool.ca”) for Garth’s opinions (he says go with big 5 bank prefs), or check out prefinfo.com.

If you don’t feel comfortable buying individual shares, try an ETF like CPD or ZPR.

#156 fancy_pants on 04.16.13 at 9:28 am

I’m not a pessimist hunkering in a bunker but I also am not a naive ostrich with head deep in the sandbox…

It is clear the wheels are wobbling more and more on this giant economic machine that runs “civilized” life on this planet. If it completely falls apart on a global scale, it will have far reaching negative impacts (except Canada of course ~ tongue in cheek)

You think your $ is safe in your RRSP, investments, tax free savings accounts etc, etc… “Of course, that would never happen here”, you say – it wouldn’t hurt to stretch your mind at “alternative” possibilities when cash is needed for the greater good so-to-speak. You will be amazed at how quickly things can go south when the motion begins. think gravity. food for thought – perhaps undigestible to many.

have a wonderful day. I hope to make the call. I will call in with smiles and sunshine though ~ you will feel the joy, even though I will be muted :).

#157 Herb on 04.16.13 at 9:34 am

#127 Julie,

BOMB SNIFFING DOGS were GOING NUTS at the finish line but the handlers did nothing.

Where is the evidence that bomb sniffing dogs were going nuts and that their handlers ignored these signals, Julie? That clip merely establishes that there were bomb-sniffing dogs at the start and finish, and I would expect that this would be standard procedure at any post 9/11 major event. If they were not used in other marathons, I’d want to know why.

Julie, we are going to tie ourselves into tighter knots with increased security “requirements” anyway. There is no point in contributing to the atmosphere of insecurity by unfounded allegations.

#158 rosie "moving forward" on 04.16.13 at 9:52 am

#146Craig
Why don’t you get a smart financial advisor. I think you already know of one.

#159 Herb on 04.16.13 at 10:11 am

#119 Canadian Watchdog,

get off the “Governor-General dictator” horseshit. Do you think that GGs like Clarkson and Jean were appointed to dictate anything to anyone?

They are national figureheads appointed by a PM to bless what is presented to them by a Prime Minister and cabinet to surface officially as the “Governor in Council”.

#160 rosie "moving forward" on 04.16.13 at 10:12 am

A reasonable assessment for those who won’t see reason. http://www.marketwatch.com/story/the-day-gold-died-2013-04-16?link=home_carousel

#161 CalgaryRocks on 04.16.13 at 10:13 am

#152 blase on 04.16.13 at 9:17 am
House I saw recently listed in London, Ontario for $299,000.

Dude, post a link. We’re moving out of Calgary on April 26th and would want to take a look at it if it’s THAT nice!

#162 Steven on 04.16.13 at 10:14 am

Gold’s fallen the most in 30 years for one simple reason. It’s not because Goldman issued a sell. Not because Euro countries will be dumping bullion. Not just because of market calls or the elite trying to destroy an alternative currency. Gold’s toast because there’s no reason to hold it.

Ha,Ha,Ha,Ha,Ha,Ha,Ha,Ha. Very funny Garth!
Your either lying,telling a joke or you don’t know jack about money and the hazzards of counter party risk.
That risk being default, force majeur or confiscation.
with the stroke of a pen or a key stroke. Most fiat currencies are for the most part only a financial statistic recorded in a computer. Same thing with most securities. A stroke of the pen or a key stroke and now you see it, now you don’t all nice and legal and done before the victim knows it happened. Next to that a coin or wafer squirreled away looks pretty damned good.

Do us a favour. Just go away and be paranoid by yourself. — Garth

#163 Rational Optimist on 04.16.13 at 10:21 am

#152 blase on 04.16.13 at 9:17 am

Can you post a link to the listing?

I grew up in London, and resultingly hate it because there was no good job for me there. It is a relatively large city, but it has recently done battle with Windsor for worst unemployment rate in the country, has long had disfunctional municipal leadership even by Canadian municipal leadership standards, and continues to lose decent blue collar jobs. The pizza factory will not save it.

London is a bad bet. Eventually, you have to sell, and most people probably instinctively feel that London’s fortunes are more likely to be further down than up in ten, fifteen, twenty years. As far as I know, price gains there have been lower than elsewhere (GTA suburbs, KW, wherever), but I think the losses could be worse than elsewhere.

#164 Doug in London on 04.16.13 at 10:26 am

Here we go again, a discussion here about where to invest your money is never complete with talk about gold. Forget gold, assume it doesn’t exist. In the periodic table, element #78 is followed by #80 and #79 exists only in your imagination. However, other commodities are on sale now and are probably worth buying. As I sit here in front of an electric computer, in an area with electric lights, I worry about the future of natural gas and uranium. When I go out in my petrol powered car, and see diesel powered buses, trucks, and trains running around I worry about the future of oil. Wow, I’m glad I scooped up more XIU at fire sale prices yesterday. I may buy up more before these fire sales end.

#165 blase on 04.16.13 at 10:29 am

Calgary Rocks:

Here ya go, and I recommend taking a stroll on google street view up the hill. Amazing looking neighborhood.

MLS: 518081

http://www.realtor.ca/PropertyDetails.aspx?&PropertyId=13018561&PidKey=-149977284

#166 Old Man on 04.16.13 at 10:30 am

#163 Rational Optimist – try 70 Park Lane Crescent, London (Byron), Ontario.

#167 Ralph Cramdown on 04.16.13 at 10:33 am

Well, the happy TREB warriors are out with their numbers for the first two weeks of April. In the 416, they sold fewer homes of all types versus 2012, despite 2012’s period containing both Easter and Passover, and this year’s containing neither. Are we becoming a society of Godless heathens?

#168 Blacksheep on 04.16.13 at 10:41 am

Vlad & Smok’in man,

A label heard too much for my liking yesterday.

Domestic T*******t. Don’t like using the word.

Wait for it.

#169 a fan on 04.16.13 at 11:01 am

#127 Julie on 04.16.13 at 2:07 am
Ah yeah…………so like I said earlier……you MSM and Govt believers? Take OFF your tin foil hats and come down to reality…..BOMB SNIFFING DOGS were GOING NUTS at the finish line but the handlers did nothing. Just like 911, just like at the tube bombings in London etc etc etc…… yet another false flag that will be blamed on…..wait for it…..
T E R R O R I S M
http://www.local15tv.com/mostpopular/story/UM-Coach-Bomb-Sniffing-Dogs-Spotters-on-Roofs/BrirjAzFPUKKN8z6eSDJEA.cspx
Enjoy even less freedoms people…..coming to a fascist country (like Canada) near you…..
—————————

Great source there Julie, some random guy giving his opinion.

#170 Mike on 04.16.13 at 11:05 am

@Garth

“And your return on invested equity is what? — Garth”

My Internal rate of return between 9 and 12 % depending on the property. Based on a 25 years period.
———————————————————-
You should kind of learn what terms mean before using them. IRR means that the future cash flows being discounted for the next 25 years at between “9 and 12 percent” is equal to today’s price. That is practically impossible. For example: for 25 years, if you receive $2000/month in cash flow, and the house is worth $1,000,000 in 25 years, then the price of the house today is approximately $319,000 based on a 10% discount rate. Tell me where these properties are because you struck gold (figuratively)

#171 Richard in Kelowna on 04.16.13 at 11:12 am

US stock markets looking weak despite PPT intervention at opening. Hope they don’t close down otherwise could be start of significant and protracted correction and that won’t help markets in Canada.

There is no PPT. — Garth

#172 Small Town Steve on 04.16.13 at 11:13 am

#148 Craig

Dump the house ASAP. The risks of losing in the market can be minimized by following what Garyh has said forever. Balanced diversified and liquid. You may even lose some money in the short term but with proper rebalancing you will be in great shape.

Hanging onto your house however is a guarantee to lose money in today’s market. Sales volumes are down, prices are down and it is going to stay that way for the next ten years. A melt year after year.

Dump the house and rent something nice. Let your landlord worry about maintanence and property taxes.

#173 Dr. Hoof - Hearted on 04.16.13 at 11:17 am

#163 Rational Optimist on 04.16.13 at 10:21 am

I grew up in London, and resultingly hate it because there was no good job for me there. It is a relatively large city, but it has recently done battle with Windsor for worst unemployment rate in the country, has long had disfunctional municipal leadership even by Canadian municipal leadership standards, and continues to lose decent blue collar jobs. The pizza factory will not save it.

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

Dysfunctional leadership is redundant.

There is a whole new breed of politicians, and its both amusing and pathetic.

#174 CalgaryRocks on 04.16.13 at 11:25 am

#165 blase on 04.16.13 at 10:29 am
Calgary Rocks:

Here ya go, and I recommend taking a stroll on google street view up the hill. Amazing looking neighborhood.

MLS: 518081

http://www.realtor.ca/PropertyDetails.aspx?&PropertyId=13018561&PidKey=-149977284

That is a great house. I love the neighborhood and the backyard. It looks like there are no other houses behind. That’s the kind of features I would be looking for.

For ourselves, we will be moving to a cottage in the 1000 Islands area for the summer and then head south for the winter. We’re greatly excited by the freedom of being responsible for nothing (except our little Shih Tzu ).

We haven’t really decided what we will do but we’ve cashed out of Calgary, just because we want to be closer to our family in Montreal (mine) & Gananoque,ON (my wife’s).

#175 Canadian Watchdog on 04.16.13 at 11:26 am

#159 Herb

They are national figureheads appointed by a PM to bless what is presented to them by a Prime Minister and cabinet to surface officially as the “Governor in Council”.

The Governor-General is not appointed by the PM!

Who appoints the Competition Bureau's commissioner? The Governor-General. Melanie Aitken was told to stand down, which is why she unexpectedly quit

Sorry, no public home price history for Canada. You'll just have to keep guessing.

#176 thiscountryisgoing down the toilet on 04.16.13 at 11:27 am

The ‘deflation scare’ is a red herring….deflating from what? The prices of goods and services were ratcheted up under Greenspans plan to raise revenue……instead of letting the market correct as it should…an entirely artificial economy with few beneficiaries.

Deflation is a word that frightens only the civil service who have wallowed in the trough of the tsunami of added tax revenue from the additional tax flow. Cut the civil service/social service albatross off at the ankles and price inflation will disappear.

The greatest deflation since the 1930s was the US housing market collapse. This is what we have a taste of ahead. — Garth

#177 Greed is God on 04.16.13 at 11:29 am

Why do I think Garth is going to sound like James Lipton from the Actors Studio?

#178 Dr. Hoof - Hearted on 04.16.13 at 11:34 am

#141 JW on 04.16.13 at 5:32 am

In my daily travels, I drive past one new finished home, which has been ” for sale ” for 6 months.

Kitty corner to it is one that is near lock – up, 1/2 block down same thing. These projects were delayed for months before they proceeded. The lots would have been bought at peak price.

One has to wonder what its like to go to work building these new homes, seeing one sit unsold for months…like watching a slow funeral.

#179 Renter for life on 04.16.13 at 11:44 am

And this is the kind of lie that’s being fed to the general public every single day.

http://www.moneysense.ca/2013/04/15/will-you-be-poorer-in-retirement/

Not even sure how they come up with the number, that >50% of retiree will have >115% of their pre-retirement income. Maybe if they made less than OAS and GIC combined.

#180 julie on 04.16.13 at 11:51 am

#127 Julie,

BOMB SNIFFING DOGS were GOING NUTS at the finish line but the handlers did nothing.
——————————————
Where is YOUR evidence Herb? You always take the other side. The govts side I’ve noticed. Are you saying that at EVERY false flag attack in the last twenty years the fact that there has been “A Govt Excercise” is just a coincidence? Get off the Herb and take off your tin foil hat…..

http://www.thedailysheeple.com/real-time-updates-national-guard-now-on-the-streets-of-boston-officials-may-have-had-prior-knowledge-cnn-suggests-patriots-to-blame-videospics_042013

http://www.pakalertpress.com/2013/04/16/facebook-page-set-up-for-boston-marathon-bombings-days-before-boston-marathon-bombings/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+pakalert+%28Pak+Alert+Press%29

http://www.thecommonsenseshow.com/2013/04/15/the-new-world-order-formula-for-false-flag-attacks/

http://www.naturalnews.com/039928_Boston_marathon_bombings_official_story.html

And there are lots more links…….people…..get off the Herb and remove your Govt Issue tin foil hats.

Now give us a single credible source. — Garth

#181 Calgary'OK on 04.16.13 at 11:55 am

“#161CalgaryRocks on 04.16.13 at 10:13 am

#152 blase on 04.16.13 at 9:17 am
House I saw recently listed in London, Ontario for $299,000.

Dude, post a link. We’re moving out of Calgary on April 26th and would want to take a look at it if it’s THAT nice!”

London RE is more affordable then Calgary, that’s for sure, but did you know that property taxes over there 1.5 % vs 0.5 % in Calgary? That nice 300K house is going to cost you $4500 in property taxes alone. Are you retiring? Because London is a University town, students are ready to work for pennies and in the summer even for free. Very rarely you can get yourself local job for more then $15 an hour… Unless you work for municipality, of course. On top of that, Ontario government is planning to spent over 50 billion dollars on infrastructure upgrade, how do you think they are going to raise these kind on money?

#182 Richard in Kelowna on 04.16.13 at 11:59 am

“US stock markets looking weak despite PPT intervention at opening. Hope they don’t close down otherwise could be start of significant and protracted correction and that won’t help markets in Canada.

There is no PPT. — Garth”

Au contraire….

http://www.archives.gov/federal-register/codification/executive-order/12631.html

The working group established as a result the 1987 crash has, in fact, created an environemt in which marketas are more orderly. But it is not a market participant. — Garth

#183 Canuck Abroad on 04.16.13 at 11:59 am

Garth, I’m as excited as you by the prospect of deflation finally gutting the banker criminals, but I’m puzzled that you think all assets are going to fall except stocks. Real estate – done. Gold – caput. Oil, cars, copper, silver – finished. But by some miracle, stocks will not only survive but will soar to the heavens. Really? And this is supposedly based on an American renaissance.

You also say that when things are expensive they are most risky (eg Canadian housing). I agree totally! So why continue to mock and trash gold after its had a major correction. Sure it could go to 1200 or 1000 but we are approaching the point where it will be a good buy for a trade.

It seems your hatred of gold leaves you unable to even consider its current battered position as a potentially good buy point. And your obvious love of all things stock market related leaves you blinded to the extraordinary risk there, with markets at all time highs while Europe is still mired in problems and China is suffering. But America is doing okay so stocks are good! LOL.

#184 CalgaryBoomer on 04.16.13 at 12:07 pm

Gee, thanks

#185 Future Expatriate on 04.16.13 at 12:10 pm

What an astute analysis!

#186 Smoking Man on 04.16.13 at 12:26 pm

#82 To: Smoking Man the Duh….. Of Fools on 04.15.13 at 10:52 pm

The way of a fool is right in his own eyes,…. Whether it be the way of open profaneness, or self-righteousness, it appears to him to be the right way; it seems to him a very plain one, and he finds it pleasant; and, trusting to carnal sense, corrupt reason, and a false judgment, and having a high opinion of himself and his own knowledge, never asks after the right way, nor takes the advice of others;but he that hearkened unto counsel is wise; that asks advice and takes it of such who are men of age and experience, men of longer standing, and are wiser than himself; who consults the word of God about the right way of walk, worship, and salvation, and makes the testimonies of God the men of his counsel, which are able to make him wise unto salvation; uh who hearkens to the counsel of Gospel ministers, and obeys it; and especially to Jesus Christ the wonderful Counsellor, and to the advice he gives, Revelation 3:18; and who not only hears his words, but does them; such an one is a wise man, Matthew 7:[email protected]

You’re making me miss the metalheads. — Garth

…………………

If this post is a prank hahaha…. If you believe this hocus pocus time to see therapist…… Or just smile and fork over your loot, the product the promise of an after life….. Fools… But your not alone…. Billions of you that have no deductive reasoning skills… A perfect customer in my eyes…

#187 Timbo on 04.16.13 at 12:32 pm

http://www.cnbc.com/id/100645285

sales flat? We have a Bank up here who can show you how to increase profits………

http://timiacono.com/index.php/2013/04/16/falling-energy-prices-push-inflation-lower/

another bubble with wages dropping?….go housing!!…

#188 Timbo on 04.16.13 at 12:39 pm

http://www.bloomberg.com/news/2013-04-15/ohio-s-500-billion-oil-dream-fades-as-utica-turns-gassy.html

“U.S. drillers that set up rigs amid the rolling farmland of eastern Ohio on projections underground shale held $500 billion of oil are packing up. ”

Alberta’s prayers are being answered?

http://rbth.ru/business/2013/04/15/russias_imported_meat_ban_spreads_to_mexico_canada_25039.html

“Russia reduced meat import from Mexico and Canada from April 8 because it can contains the growth stimulant ractopamine.”

damn and here I thought things were turning around…

#189 Blacksheep on 04.16.13 at 12:39 pm

Richard in Kelowna 171,

“There is no PPT. — Garth”
———————————-
A rose by any other name……

“Plunge Protection Team” was originally the headline for an article in The Washington Post on February 23, 1997 and has since become a colloquial term used by some mainstream publications to refer to the Working Group.

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

#190 CalgaryRocks on 04.16.13 at 12:40 pm

#181 Calgary’OK on 04.16.13 at 11:55 am
“#161CalgaryRocks on 04.16.13 at 10:13 am

#152 blase on 04.16.13 at 9:17 am
House I saw recently listed in London, Ontario for $299,000.

London RE is more affordable then Calgary, that’s for sure, but did you know that property taxes over there 1.5 % vs 0.5 % in Calgary?

Yeah, Calgary’s been really good to us over the past 8 years. If it was just for the money, it’s still in my opinion, the best place in Canada to live.

We’re nomads though so this is the longest we’ve stayed in one place. Time to move on to new adventures and opportunities!

#191 Tom Vu on 04.16.13 at 12:46 pm

Ok Garth….

I am ready to moderate this blog when you are doing conference call:

Code: Smoking Man: ” DELETE “

#192 Rational Optimist on 04.16.13 at 1:00 pm

181 Calgary’OK on 04.16.13 at 11:55 am

You’ve got London pegged.

Calgary Rocks: Byron is a very nice area, but probably not where anyone goes for adventure.

#193 Marshall on 04.16.13 at 1:00 pm

#180 Julie

Don’t believe everything you read on the internet. Thanks for wasting my time with those links to ridiculous sites. Let me guess, you have a subscription to The National Enquirer?

#194 Ronaldo on 04.16.13 at 1:07 pm

#110 Physical PM’s – ”Interesting that while the prices of PM’s are crashing, demand for physical delivery is still high. Tug of war going on here – someone will get the short end.”

The few people who actually invest in the physical pm’s and in particular Ag should be thanking the paper sellers for another great buying opportunity that they have provided for us.

When you consider that the paper market is capable of trading a years supply of silver in a matter of days it doesn’t take a genius to figure out what is going on.

What is happening now is very similar to what happened in 2008 when the price of silver first hit 21.00 and then began is downward spiral to less than 9.00 in November of that year. As the prices fell, the demand increased so much that there was none available to purchase. Dealers were cleaned out. The mint was unable to obtain blanks to produce coins. Premiums rose to near 100%. Right now they are around 20%. Those who purchased at the low in november were rewarded greatly as the price rebounded to 14.00 by March of 2009. Same will happen with prices in the near term. When you consider that less than 1% of people own any physical you know that its the speculative postions in the paper market that are determing the spot price at this time. The demand for physical will eventually take over from the paper market and that is when the market will determine the true value of the metal. One only has to hold a one ounce coin in their hand to realize how much value can be obtained from this small amount and realize how cheap prices are at this moment. I hope you loaded up at $22.00 as you rebalanced your portfolio to get back to your 10% allocation. Those who ignore the b.s. that is spewed out on BNN and the other media talking heads will be well rewarded in the years going forward.

#195 Godth on 04.16.13 at 1:22 pm

#143 Tony Right

http://www.movie2k.to/Four-Horsemen-watch-movie-2001182.html

#196 Humpty Dumpty on 04.16.13 at 1:32 pm

Canada has one of the biggest ongoing housing bubbles and contrary to the rhetoric we see, they have households deeply in debt. In other words, they are leveraging to the hilt just to keep this charade going.

http://www.mybudget360.com/canada-debt-bubble-canada-real-estate-bubble-the-coming-deleveraging-for-canada-unit-labor-costs-in-manufacturing-above-us-labor-costs-and-household-debt-to-income-at-160-percent/

#197 Ogopogo on 04.16.13 at 1:36 pm

#60 SHOOTER MCGAVIN on 04.15.13 at 10:08 pm
Gold is telling us something terrible is coming!

… for gold.

#198 RonH on 04.16.13 at 1:45 pm

No Inflation? I was buying at my local electrical
supplier. There was a sign at the register listing product
suppliers and their price increases. 6-12 %. Can I shop where you shop?

Asset deflation, price inflation. Get used to it. — Garth

#199 Old Man on 04.16.13 at 1:49 pm

#192 Rational Optimist – Byron is a highend area, and know lots of women that would be glad to take you on for an adventure called a date. So fill up your wallet with lots of cash, and drive a nice car, and they will take you on a tour of the big city to entertain them, as will cost you plenty.

#200 Bubu on 04.16.13 at 1:51 pm

#116 Small Town Steve on 04.16.13 at 12:25 am
#102

Why was the Cellphone service shut down in the Boston area? To prevent cellphones, some of which have built-in video cameras from taking pictures?

It was most likely shut down because some bombs are set to go off by receiving a cell phone signal and they were probably trying to prevent further damage ASAP. That is my guess.
———————————————————

Maybe this helps? (from MSN Germany)

Shortly after the explosions the authorities turned off temporarily the mobile network in Boston, to prevent possible remote detonations of other explosive devices.

#201 jess on 04.16.13 at 2:14 pm

… evasion costs are socialized through the agents who have to go and hunt for these [email protected]#$s

Crocodile Dundee” star Paul Hogan may have settled his tax case with Australian authorities but he is accusing his once-trusted tax adviser of absconding with $34 million he helped Hogan hide in offshore tax havens.

There is already an international warrant out for Philip Egglishaw, the man known as the ”bowler hat Englishman”, who is the alleged mastermind behind Australia’s biggest tax evasion scheme.

But now the international fugitive has the Australian actor on his tail, with Hogan’s advisers taking legal action in the US alleging Egglishaw, who set up elaborate corporate structures in tax havens to help his clients evade tax, has stolen the entertainer’s money.

Continue reading at ICIJ.org.
http://www.publicintegrity.org/2013/04/15/12493/crocodile-dundee-actor-paul-hogan-chases-his-missing-offshore-millions

#202 45north on 04.16.13 at 2:18 pm

Herb: Julie, we are going to tie ourselves into tighter knots with increased security “requirements” anyway. There is no point in contributing to the atmosphere of insecurity by unfounded allegations.

there’s something about criticism with no stake in the game that irks me. I’d like to see Julie assigned to the canine division of some police force -strictly a training position – for two years.

#203 Doug in London on 04.16.13 at 2:25 pm

@#192, Rational Optimist and #181, CalgaryOK;

You make some good points about London, the economic and employment prospects here leave much to be desired. I like it here none the less, close to family and in striking range of places where prospects may be better. I’m sure glad I don’t own a house here though, as I don’t expect house prices here to appreciate in value any time soon and a house ties you down.

#204 jess on 04.16.13 at 2:25 pm

Operation Wickenby, a joint investigation by the Australian Crime Commission and the Australian Tax Office, has taken years and cost millions of dollars investigating Mr Egglishaw’s and de Figueiredo’s Australian clients, including Mr Hogan and his comedy sidekick John Cornell

Read more: http://www.dailymail.co.uk/news/article-2309348/Tax-adviser-dubbed-Bowler-Hat-Englishman-runs-20million-Crocodile-Dundees-money.html#ixzz2QeUQEjzP
===============

Levin’s introduced a bill to ax the loophole in 2007 revisions + confusing language =phone books = delay/ too complicated for the barbarians.

The phone book creators like it to remain uneditied. But these are simple modifications

Changes in federal law would allow reporting and accounting of profits to be transparent and make the rich pay their share of taxes.Because of the secrecy of offshore financial institutions and the lack of information about offshore transactions, the regulation of international banks and securities dealers has become virtually impossible. Offshore arrangements have helped Google, Apple, General Electric and others pay little or no federal income tax. And the consortium’s data show how criminals use offshore vehicles to perpetrate frauds and then hide their gains.

The government tolerates this because the beneficiaries spend millions lobbying against simple reforms. Major corporations want a “territorial” tax system that would leave profits sent to tax havens permanently free of taxation. The American Bar Association has twice testified against a bill by Senator Carl Levin that would require all states to keep records of the real owners of corporations, rather than just the title holders. This would end the use of Delaware and other U.S. states as corporate secrecy jurisdictions, but more than 70 countries allow themselves to be used as a shelter from the rules of others, in one form or other.

Offshoring can be stopped by:

• Requiring firms to report their profits on a country by country basis to the Securities and Exchange Commission and the Internal Revenue Service. This would expose the shifting of profits to tax havens where no business is done.

• Creating a legal presumption that if a person deals with an offshore entity, they are an owner, removing the burden from the Internal Revenue Service to prove it.

• Requiring that all accounts at U.S. financial institutions identify who controls them, not just the identity of shell directors. Under current law a corporation from a foreign tax haven can be recognized as an account’s owner, and avoid taxes as a “foreign investor.”

• Ending deferral of taxation on foreign corporate profits. Presently corporations are allowed to defer U.S. tax on foreign earnings until they repatriate the money. The corporations use this provision to shift profits to a tax haven and then find ways to borrow it back free of tax.

• Refusing to allow banks and brokerage firms to set up “branches” and subsidiaries in places where they do no real local business.

#205 Victor V on 04.16.13 at 2:34 pm

http://www.theglobeandmail.com/report-on-business/top-business-stories/toronto-house-sales-hold-up-as-spring-season-begins-but-condos-sink/article11253614/

Over all in the Toronto region, sales of detached homes rose 3.9 per cent, but that was driven by a 6.8-per-cent increase in the so-called 905 area, the communities that surround the city denoted by their area codes. In Toronto proper, those sales fell 3.4 per cent.

The condo market remained a trouble spot, in both areas, with sales down 5.8 per cent, led by the outlying region.

In the first quarter, condo sales were down by some 17 per cent in the Toronto area, and prices down 0.5 per cent, while rentals were up by almost 13 per cent.

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

This will end badly for most everyone owning real estate, however, those ‘invested’ in the Toronto/Vancouver CONDO markets will likely feel the most pain.

#206 Canuck Abroad on 04.16.13 at 2:42 pm

Garth, was there ever any doubt that the outcome could be anything but deflation?

When the crisis hit, the US had two choices: Japan or Sweden. Had they followed the Swedish solution, the pain would have been very severe but brief and the US would have recovered already.

For whatever reason, the US chose the Japanese solution. Apparently it had something to do with the idea that Americans would never stand for nationalising banks because it’s too socialist or something(!). So, having taken the Japan strategy as its template, how could America now expect any other outcome than what Japan has seen for the last two decades, where even now, Japan still to this day continues to try to throw quantitative easing at their problems to no avail. Japan is now looking at two lost decades, and this will be the outcome for the US as well. But at least they didn’t do anything socialist like nationalise a bank or two…

#207 Louise R on 04.16.13 at 2:43 pm

Good Read, concur with your assessments! Interesting days ahead.

#208 Dr. Hoof - Hearted on 04.16.13 at 2:50 pm

16% OF US ANNUAL SILVER SUPPLY JUST VAPORIZED…

http://www.republicbroadcasting.org/index.php?cmd=news.article&articleID=5103

5 million ounces of annual silver supply and 500,000 ounces of annual gold supply have just been vaporized landslided.
Rio Tinto’s Kennecott mine in Utah- the US’ 2nd largest silver mine and world’s largest copper mine has just suffered a massive landslide which will likely shut down production at the mine for years as upwards of 1 billion tons of dirt and ore have collapsed into the basin.

16% of US annual silver production just vanished. Good thing there aren’t any physical supply issues in silver currently or anything…

etc

Click on link to see photos..WOW

#209 Dr. Hoof - Hearted on 04.16.13 at 2:53 pm

Property sellers using loophole to dodge B.C.’s transfer tax:

http://www.richmondreview.com/news/203239041.html

Critics say a growing number of businesses or wealthy individuals are exploiting a loophole to avoid paying B.C.’s tax on property transactions while average home buyers are stuck footing the bill.

The Property Transfer Tax consists of one per cent charged on the first $200,000 in property value and two per cent after that – adding up to an extra $10,000 in tax when a $600,000 Metro Vancouver home changes hands.

But businesses in particular are making growing use of what’s called a “bare trust” corporation to hold ownership of a property.

The trust can be transferred to a new buyer without any change in the land title owner and no PTT is triggered as a result.

“The loophole is big enough to drive trucks through,” Canadian Taxpayers Federation (CTF) B.C. director Jordan Bateman said. “Accountants are all over it, especially corporate ones. It’s becoming standard tax practice and that tells you people are taking advantage of it.”

etc etc.

#210 Bill Gable on 04.16.13 at 2:54 pm

May I present a Bearish view – with words from Peter Schiff.

A debate between Mr. Turner and Mr. Schiff would outdraw Psy, on You Tube.

“A record breaking stock market is distorting a frightening reality: The U.S. is being eaten alive by a horrific cancer that will ultimately destroy the economy and impoverish the vast majority of its citizens.

That’s according to Peter Schiff, the best-selling author and CEO of Euro Pacific Capital, who delivered his harsh warning to investors in a recent interview on Fox Business.

“I think we are heading for a worse economic crisis than we had in 2007,” Schiff said. “You’re going to have a collapse in the dollar…a huge spike in interest rates… and our whole economy, which is built on the foundation of cheap money, is going to topple when you pull the rug out from under it.”

Schiff says that, despite “phony” signs of an economic recovery, the cancer destroying America stems from a lethal concoction of our $16 trillion federal debt and the Fed’s never ending money printing.

Currently, Bernanke and company is buying $1 trillion of Treasury and mortgage bonds a year. That’s about $85 billion per month against a budget deficit that is about the same level.

According to Schiff, these numbers are unsustainable. And the Fed has no credible “exit strategy.”

Mr. Turner? Over to you. Is this tinfoil hat, too?

Link: http://tinyurl.com/d6ky9n7

#211 The Prophet Elijah on 04.16.13 at 3:00 pm

#198 RonH on 04.16.13 at 1:45 pm
No Inflation? I was buying at my local electrical
supplier. There was a sign at the register listing product
suppliers and their price increases. 6-12 %. Can I shop where you shop?

Asset deflation, price inflation. Get used to it. — Garth
———————————————————
I don’t know why anyone here doesn’t use the word STAGFLATION (Asset deflation, price inflation). This is what they had in the 70’s, and why Paul Volker of the Fed jacked up interest rates to stop it.
Simply a product of too much MONEY supply and not enough PRODUCTIVITY in the economy – hence too much money chasing to few products = price inflation.
2008 Bail outs + 85 billion QE/month = comig staglation.

#212 The Prophet Elijah on 04.16.13 at 3:04 pm

I don’t know why anyone here doesn’t use the word STAGFLATION (Asset deflation, price inflation). This is what they had in the 70′s, and why Paul Volker of the Fed jacked up interest rates to stop it.
Simply a product of too much MONEY supply and not enough PRODUCTIVITY in the economy – hence too much money chasing to few products = price inflation.
2008 Bail outs + 85 billion QE/month = comig staglation.
——————————————————–
This is what differientiates gold from other commodities, gold is not a commodity it’s money and goes ballistic in stagflation, especially when it turns into hyperinflation.

Sigh. Gold is not money. — Garth

#213 Godth on 04.16.13 at 3:13 pm

#206 Canuck Abroad

The Japanese have a strong manufacturing base and private savings…

#214 Julie on 04.16.13 at 3:35 pm

193 Marshall on 04.16.13 at 1:00 pm

#180 Julie

Don’t believe everything you read on the internet. Thanks for wasting my time with those links to ridiculous sites. Let me guess, you have a subscription to The National Enquirer?
=======================

Unlike you I don’t wear a tin foil hat and listen to the Main Stream Media……..

#215 From Mississauga with Love on 04.16.13 at 3:35 pm

Questions to all: in Ontario, specifically in Mississauga, if a buyer submits an offer in writing (and in there puts a clause that we request the seller to initial and sign the offer even if rejected), then is the seller obligated to reject it in writing?

No. It’s an offer, not an obligation. The seller can totally ignore you. — Garth

#216 From Mississauga with Love on 04.16.13 at 3:37 pm

just to clarify, the reason we are requesting the seller sign the offer is to ensure the seller’s agent actually has shown the offer to the seller (yeah, yeah, don’t tell me that they are legally obliged to do that), including all terms and attachments (in this case we have attached an appraisal of the house).
your advice (of course you as well, Garth) is much appreciated here on this one.

So call the seller and ask him. — Garth

#217 Julie on 04.16.13 at 3:39 pm

#202 45north on 04.16.13 at 2:18 pm

Herb: Julie, we are going to tie ourselves into tighter knots with increased security “requirements” anyway. There is no point in contributing to the atmosphere of insecurity by unfounded allegations.

there’s something about criticism with no stake in the game that irks me. I’d like to see Julie assigned to the canine division of some police force -strictly a training position – for two years.
==========================

1. We have two protection dogs. Professionally trained.
2. NO ONE MAKES YOU BECOME A POLICE OFFICER.

I’m tired of these guys crying the blues about how dangerous their job is. Ever see a BC hydro guy on top of a 5 million volt cable? Or a scaffolding construction worker? Or a faller? If you can’t take the heat….get out of the kitchen. No one MAKES YOU do your job. You volunteer…..generally for the pay and benefits.

#218 Julie on 04.16.13 at 3:44 pm

And there are lots more links…….people…..get off the Herb and remove your Govt Issue tin foil hats.

Now give us a single credible source. — Garth
=================================

You mean like Main Stream Media? That has everyone wearing tin foil hats about how dangerous terrorists are? Please….more people are killed by bees and falling rocks than terrorists. Its the MSM that has everyone one running scared…….

#219 Godth on 04.16.13 at 3:56 pm

#208 Dr. Hoof – Hearted

That’s quite something. Check out the ore grades, lol.

Copper – 835 Mt @ 0.48%
Gold – 835 Mt @ 0.30 g/t
Silver – 835 Mt @ 2.10 g/t
Molybdenum – 835 Mt @ 0.041%
http://www.infomine.com/minesite/minesite.asp?site=bingham

#220 jess on 04.16.13 at 4:00 pm

“God annointed him to run the city ” ….well then lucifer must be laughing….

http://www.freep.com/article/20120909/NEWS01/120909001/Timeline-Here-s-how-federal-public-corruption-probe-unfolded
starts in 2001 -timeline of the federal public corruption probe unfolded

http://www.freep.com/article/20121213/NEWS01/12
1213038/Ilitch-company-owes-nearly-1-million-taxes-Detroit-documents-show

Are these homes worth $65,000? The City of Detroit say they are even though they just sold for $500
Is the City of Detroit overtaxing property owners by using inflated assessments?

State Tax Board To Investigate City Of Detroit For Overcharging On …www.mfi-miami.com › States We Service › MichiganCached
You +1’d this publicly. Undo
2 days ago – Are these homes worth $65,000? The City of Detroit say they are even though they just sold for $500. One of things that pissed me off when

#221 Dr. Hoof - Hearted on 04.16.13 at 4:11 pm

Re: The Cultural Marxism that “sissy – fies” everyone .

It turns people into whinny wimps when a good knuckle sandwich delivered at the right time and moment would take out and re-adjust most bullies as well as Sigmund Freud disciples aka shrinks and other quacks.

The system feeds itself without any return to the citizen. Like Mike Rivero on RBN say…all these Fusion centers and big Brother surveillance are so gridlocked they prevent squat.

#222 Shawn on 04.16.13 at 4:12 pm

Is Gold Money?

The Prophet at 212 says: gold is not a commodity it’s money

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

If Gold is money why is its value measured in money?

And why does the purchasing power of this Gold money fluctuate so wildly.

The dollar may have depreciated 30% or whatever in the last dozen years.

And vairous currencies have changed value on the order of 50% (measurd in dollars) in the past decade.

But Gold’s va;lue in dollars surged several hundred percent.

You can it was the fdolalr that fell 80%, except you cannot since a car today costs about the smae as a dozen years ago and bleatings aside inflation has been LOW these last dozen years.

Gold is no reliable store of value. (of real value of purchasing power) instead it flutucates wildly.

Anyhow whatever… Gold bugs will never listen…

#223 dv8 on 04.16.13 at 4:14 pm

fake condo line ups (wherein ads appear on craigslist for people to stand in line for condo pre-sales).all for free doughnuts and coffee

#224 Frizzzz on 04.16.13 at 4:21 pm

The comments section is really rocking! A lot of very excited people. Nostradamus taught Garth well…….

#225 waitinonsense on 04.16.13 at 4:28 pm

Garth, what’s with the ascendance of ETF’s? It’s literally only the last few years of reading your blog, and some headlines in the last 6 months that I’ve been hearing about ETF’s at all, and now they seem to have really become the purview of mainstream investors. (keeping in mind I’ve only really been somewhat aware of what the markets are doing for 6 or 7 years).

Have you always held ETF’s in your portfolios, or only since mutual funds were cannibalized by high MER’s?

More to the point, should the ‘main-streaming’ of ETF’s be a concern? It seems that a new financial product rises to the tops of investor consciousness every few years only to be abandoned for the next product. First mutual funds, then income trusts, then seg funds, now ETF’s. How long are ETF’s going to persist as an ‘ahead of the curve’ investment vehicle?

#226 jess on 04.16.13 at 4:53 pm

debt :GDP
spreadsheet errors

Reinhart and Rogoff’s framework for austerity

University of Massachusetts, Thomas Herndon, Michael Ash, and Robert Pollin. Herndon, Ash, and Pollin (HAP) corrected the spreadsheets of Carmen Reinhart and Ken Rogoff. They show the correct numbers tell a very different story about the relationship between debt and GDP growth than the one that Reinhart and Rogoff have been hawking.

#227 FTP - First Time Poster on 04.16.13 at 4:55 pm

BAH…..6 minutes til Garth’s Broadcast from Amazon Control Central and I’m stuck at work. Hope you record it and post it on Youtube Garth. The wife is out with her friends tonite, I could put the kiddies to bed and let your soothing wisdom wash over me like a warm tide…..except for the part about gold, the US “recovery”, etc. But other than that…ya

#228 Smoking Man on 04.16.13 at 4:59 pm

Julie I’m with you…..

#229 bill on 04.16.13 at 5:11 pm

#218 Julie on 04.16.13 at 3:44 pm :
”Its the MSM that has everyone one running scared…….”
speak for yourself there…ok??
you dont have a tinfoil hat? you sure sound like you do.

#230 Ben on 04.16.13 at 5:14 pm

Conference is full Garth!!

You snooze, you lose. — Garth

#231 Buttcoin on 04.16.13 at 5:28 pm

Garth: Asset deflation, price inflation. Get used to it.
——————————

Which assets are you are referring to that are deflating? House prices are up in both US and Canada for last 2 years.

#232 ApplePi on 04.16.13 at 5:34 pm

@waitinonsense ETFs, in general, are new. They’ve only been around for 20 years.
It takes time for a new product to prove itself in the market.
It takes a bit longer for investors to trust it enough to move holdings.
It takes even longer for mainstream investors to move from what they know into what they don’t
It takes even longer still for this kind of news to hit main media outlets for the regular population.

#233 tony bologny on 04.16.13 at 5:46 pm

lately I have noticed a lot of intelligent contrarian comments only to be mocked by supposedly superior smart Garth ,,,,, hey man what gives ? i do find it comical that you are completely closed minded to some of their views

Contrarian I respect. Whacked, not so much. — Garth

#234 AK on 04.16.13 at 5:46 pm

Arizona Becomes Second State to Approve Gold and Silver as Legal Tender.
Utah is the other State.

Arizona

#235 EIT on 04.16.13 at 5:54 pm

Noooo, missed the con call! damn the life of a professional, damn it all to hell!

#236 Humpty Dumpty on 04.16.13 at 6:33 pm

Metal heads, these are two interviews worth listening to

Andy Hoffman

http://www.youtube.com/watch?v=ZhFZF940eYU&feature=player_embedded

This one starts at 10 mins

http://podcast.cbc.ca/mp3/podcasts/current_20130416_22647.mp3

#237 AK on 04.16.13 at 6:46 pm

#100 Dingleberry on 04.15.13 at 11:29 pm
———————————————————–

TSX Composite index

Financials – 32%
Energy – 25.5%
Materials – 17.7%
Industrials – 6.1%
Telecom – 5.3%
Consumer Discretionary – 4.7%
Other – 8.7%

#238 Gill on 04.16.13 at 7:13 pm

Garth, I can understand the deflationary cycle you describe. Gold was trading well under $600/oz some 10 years ago and I am sure people then were also fearful of deflationary economic curves that would see gold at under $300/oz. When you say that your not willing to speculate to a plausible price on gold in let’s say 1 month? I take that as you saying you have no solid proof on an indefinite deflationary curve about to hit All North American commodity markets especially gold. You are saying the exact same thing. So, do you now see gold the same way you see all real estate wrinklies in Canada as being in negative equity positions come fall, and massive fire sales in Spring of 2014? After all, what ought to be the intrinsic value of any asset class once it travels into a downward spiral? All Toronto real estate will be worth zero dollars? What does the market bear with cheap money supplies? Zero sales? No transactions at all for Toronto? I think you are the clown here.

#239 Gill on 04.16.13 at 7:16 pm

Everyone that owns a home ought to sell now because renting makes better sense in Toronto? No I absolutely disagree with your horseshit comment. What about moving outside of Toronto? No retort there. Just keep pouring on the mindless drivel against all boomer and wrinklies???

Did you get your privates caught in the shower door? — Garth

#240 jess on 04.16.13 at 7:28 pm

1b. to clean up giant mine – socialized gold

#241 Julie on 04.16.13 at 7:31 pm

#229 bill on 04.16.13 at 5:11 pm
#218 Julie on 04.16.13 at 3:44 pm :
”Its the MSM that has everyone one running scared…….”
speak for yourself there…ok??
you dont have a tinfoil hat? you sure sound like you do.
====================

I rest my case….

Btw…….it’s the msm that keep you tin foilers believing that RE is great, aspartame is safe and Anna Nichol Smith married for love…..

What? She didn’t? — Garth

#242 drydock on 04.16.13 at 7:38 pm

http://www.youtube.com/watch?feature=player_detailpage&v=Im7M5qjJXys

This is all that really matters.

#243 Timbo on 04.16.13 at 7:42 pm

http://www.ibtimes.co.uk/articles/457768/20130416/imf-world-economic-outlook-forecast-gdp-economy.htm

“Growth would probably be between 1.5 percent and two percent higher” if the US government were not planning significant fiscal tightening, the IMF’s chief economist Olivier Blanchard told reporters in Washington.”

no looking at the brake Ben, it all or nothing……

http://economistsview.typepad.com/timduy/2013/04/austerity-research-fail.html

They find “the average real GDP growth rate for countries carrying a public debt-to-GDP ratio of over 90 percent is actually 2.2 percent, not -0.1 percent as [Reinhart-Rogoff claim].” Going further into the data, they are unable to find a breakpoint where growth falls quickly and significantly.

Debt is good….weeeee…..

#244 The Man on 04.16.13 at 7:45 pm

April 16, 2013 — On April 15 the Competition Tribunal announced that it has dismissed an Application initiated by the Commissioner of Competition against the Toronto Real Estate Board, and ordered costs payable by the Commissioner of Competition to TREB.

The Competition Tribunal stated that its decision is based on its finding that the Toronto Real Estate Board was not acting anti-competitively.

#245 Daisy Mae on 04.16.13 at 8:00 pm

#143Tony Right: “This comment section is pathetic! Why do so many people come to a free blog, that has been telling you correctly for years not to buy Canadian real estate, and bash the writer for being right? Are they still trying to get their parent’s approval by writing a reply longer than a novel about some economic or financial theory, or are they just angry because all they own is real estate and/or gold (both which suck) or are people just dicks?”

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

My sentiments exactly….

#246 jess on 04.16.13 at 8:05 pm

you can’t make this up …the regulators may not make the evidence available to the public geezzz
Elizabeth Warren On Illegal Foreclosures. INCREDIBLE VIDEO

“You have made a decision to protect the banks but not to help the families who were illegally foreclosed on,” Warren said. “Families get pennies on the dollar for being the victims of illegal activities.”

http://www.youtube.com/watch?v=Xvi7RNr8s4A

e.g.
Wells Fargo Typo Victim Dies in Court
The bank billed Larry Delassus $13,361 owed by his neighbor, then foreclosed
Comments (670) By Jessica Ogilvie Thursday, Mar 7 2013
http://www.truth-out.org/news/item/15767-foreclosure-review-report-shows-that-the-occ-continues-to-bury-wall-streets-bodies

#247 Smoking Man on 04.16.13 at 8:12 pm

#241 Julie on 04.16.13 at 7:31 pm

Love you……. You’re awake, now can come on here all you want try and educate the herd….. Won’t work, I gave up long time ago.

You for sure ride on track5. Take your awareness and throw out the Window truth, justice, and the American way.

Use your powers of observation to profit and take advantage of the dumb….

I anointed you honorary Smoking Woman.. :)

#248 Ivandrago on 04.16.13 at 8:18 pm

#215 that was too funny

#249 Double Polarized Tinfoil on 04.16.13 at 8:33 pm

#208 Dr. Hoof – Hearted

16% OF US ANNUAL SILVER SUPPLY JUST VAPORIZED…

The agenda is clear. The cabal want to literally collapse supply in order to drive the price of gold. $3000 gold by end of the year! Don’t let them get away with this, the price must be kept low so hard working middle class families can afford to buy a 1oz coin a month.

#250 blase on 04.16.13 at 8:36 pm

London has higher property taxes, but the houses cost 1/2 of what a Calgary house does, and you can get to anything in London in 10 minutes (save on gas). I’m an ex-pat living in Korea (10 years) and so when we return, we will pay cash for a house when we choose to buy. Moving to Calgary would mean a big mortgage, and snow in April, May, even possibly June.

We will look at having a couple Korean homestay students live with us, at $1,500/each. That, with a house paid for, will mean a high salary won’t be necessary, unlike living in cowtown.

Calgary is great if you are employed in a professional capacity, but if you are in the $35-$50,000 range, I think you are making a mistake living there. Not everyone can make the six-figure salaries.

We are more of the mr.money mustache school of thought, learn to be satisfied with what you have, and don’t try to keep up with the jones’. If you have your health, holidays, a beach close by, and no mortgage, you are doing well in my books.

#251 louise on 04.17.13 at 10:17 am

Just stumbled across this: http://talkwithourkidsaboutmoney.com/