Yellow fever

gold

Almost two years ago Jennie called me from Regina. “You’ve got to talk to him,” she said of Tom, her husband of 34 years. “He’s just whipped up on this stuff and I can’t convince him otherwise.”

Nor could I. Tried hard. Buying silver at about $50 an ounce is financial suicide, I said. You will live to regret this. But Tom was mesmerized by the doomer sites, infatuated with meteoric bullion prices as the US debt ceiling crisis mounted, determined to drain their joint account and turn it into a glittery, shimmery shrine in his basement vault. He sent me links to metal-pumping newsletters promising economic collapse, $500 silver and gold at five grand an ounce.

Needless to say, Tom’s lost half their money. I don’t talk to Jen anymore. This week that would be especially awkward.

There ‘s no better symbol of the end of the financial crisis than the collapse of precious metals. Simply put, there’s no reason to hold metals. No runaway inflation. No currency devaluation. No velocity of money. No weakening American currency. No systemic financial collapse. Nor should there should be surprise.

I told Tom and Jen as gold was cruising towards $1,900 (as I told people on this blog, to the howls of metalheads) that the gains were emotional and unsustainable. The American economy would continue to improve, unemployment fall, corporate profits rise, and the metals melt. And they have. Whether you own gold or not, it’s significant. You should learn from it.

Gold is now at a 34-month low and will fall more in this current quarter than at any time since 1920. The decline for this three-month period alone is 23%, which means it entered a bear market back in April.

About $60 billion has been wiped away from people like Tom in the form of precious metals ETFs. Investors are deserting the commodity in droves, now that it’s clear the United States is advancing, not contracting. As I mentioned yesterday, house prices are up 12%, house sales are at an 8-year high, unemployment has dropped 3%, consumer confidence is buoyant, the US dollar has grown stronger, corporations are profit-driven, inflation is contained, car sales rock, the federal deficit is lower and now the central bank has decided it’s time to reduce its stimulus.

Overall economic growth is still subdued at 1.8% in the latest quarter, but there’s no hint of recession. The fiscal cliff was a dud. Enforced government spending cuts were a dud. The presidential election was decisive. And that US debt ceiling debate, titillating the gold maniacs two summers ago, a complete phfttt.

The ‘money-printing’ by the Fed, the US central bank, was the last, best kick the bullion bunnies had at convincing non-believers to surrender their cash for ounces. But that too was a myth. The Fed may be buying $85 billion a month in bonds, but it’s not printing the money. Rather credit is created on the central bank’s expanding balance sheet in favour of the bond sellers. No actual money is created, making its way down into Mr. & Mrs. Front Porch’s bank account.

This is called the ‘velocity’ of money, and right now it’s at the lowest level in history. Without new dollars coursing through the economy, there’s no currency debasement or hyperinflation. There goes the one sane reason to hold metals, as a storehouse of wealth.

We’re back to 2010 levels, thus all those fools who listened to the can’t-lose arguments of gold nuts and bought in the last three years, are losers. Poor Tom’s silver is down 34% this quarter, the biggest tumble since 1980, and is the worst performer among 34 major commodities.

As the US gains strength, so does its currency. Positive economic data pushes the dollar up and gold down (as well as the Canadian loonie). Now the certainty that central bankers will cut loose their stimulus spending has pretty much sealed the deal. Those left holding gold positions – the clever ones, anyway – realize the best strategy is to cut loose and flee future losses.

What does this tell us?

Don’t bet against America, because you will lose. Do not buy assets that don’t pay you own them. Don’t pile into stuff that’s reaching historic highs. Never invest out of fear. Move from real assets into financial ones. Invest, don’t gamble. And realize the financial crisis is over.

Undoubtedly, the bullion-lickers, doomers, skeptics and America-haters will pile on me once again. They want the US to fail and banks to wobble. They long for another Zimbabwe or Weimer Republic, when fiat money folded and gold ruled. They think owning rocks is iconoclastic, cool and defiant of efforts to control them with government-issued money. Many think wealth you dig up is natural and superior to the wealth that actually funds your life.

And you know what? They’ll never stop. Never change. Never understand.

But for the rest of us, the lesson should be simple. Fear is done.

234 comments ↓

#1 Randy on 06.26.13 at 8:48 pm

Should have gotten porcelain fillings instead of gold and silver…

#2 Mr. Monday Night on 06.26.13 at 8:51 pm

Oh goodie, we’re gonna let the gold-humpers play tonight…this is going to be interesting!

#3 City that smells like it sounds on 06.26.13 at 8:51 pm

Almost talked about Regina real estate… Almost! oh and FURRRRST

#4 Mr.Hulot on 06.26.13 at 8:53 pm

How about chocolates with gold-foil wrapping?

#5 T.O. Bubble Boy on 06.26.13 at 8:57 pm

ok – we get it – gold and silver are done like dinner, and REITs, Preferreds, and solid Dividend-payers are still worth holding for income.

What about bond ETFs? You know, those things that pretend to hold bonds, but that can’t be held to maturity to re-coup the principal?

#6 Rob on 06.26.13 at 9:00 pm

Some reports say that its a slow motion deflation. How is that possible when the housing bubble is emotion driven?

#7 Robbie on 06.26.13 at 9:00 pm

Rats! Too late to sell those gold cuff links my aunt gave me many years ago! Oh well, that’s all the gold I have and a couple of Canadian silver dollars rounds out my metal holdings.

#8 JimH on 06.26.13 at 9:02 pm

Thanks for another great post, Garth! Timely, correct, clear as a bell and right to the point! Empirically correct and loaded with common sense.

#9 not 1st on 06.26.13 at 9:03 pm

Garth, do you operate a consultant service or a self help line? People actually call you up to complain about their spouses?

Anyway, Tom was simply buying the wrong asset for his worldview. If you are convinced of collapse, buy raw land with a well and a homestead and turret gun, not gold and silver. When the zombie apocalypse comes, land is your only recourse, but if it doesn’t, it still holds its value. This has been known for 5,000 years.

And Garth, please stop you Canada bashing;

http://www.businessinsider.com/canada-is-less-failed-than-the-us-2013-6

#10 Finally on 06.26.13 at 9:04 pm

I make 100K a year, 42 and just got married with 1 baby. I have 220K in RRSP + 260K in Cash + 20K in TFSA. No debt, No house and rent. My wife has $0 and is on mat leave, but only 30. Are we financially OK? – because I feel we’re behind a bit compared to others.

Joke, right? — Garth

#11 totalinvestor.com on 06.26.13 at 9:06 pm

“Don’t bet against America, because you will lose.”

76% of Americans are living paycheck-to-paycheck

http://money.cnn.com/2013/06/24/pf/emergency-savings/index.html

Like you. — Garth

#12 weewillywonka on 06.26.13 at 9:09 pm

Is it too late to short?

#13 Dean Mason on 06.26.13 at 9:12 pm

You can see as interest rates more specifically bond yields rise as they have over the last 12 months by at least 75 basis points to 100 basis points depending on what bonds your talking about Gold,silver etc. keeps dropping.

Very low bond yields were one of the reasons gold,sliver etc. was climbing because there was not much safer investments paying interest,direct competition against gold,silver etc.The easy investing strategy of buying gold,silver ETF’s was boosting gold,silver etc.prices.

A 4% to 5% interest rate on a GIC,CD or government bond is terrible for precious metals.A rising stock market is terrible for precious metals.A stronger economy and lower unemployment with 2% or less annual inflation is bad for precious metals.Something really bad has to happen to see $100 silver,$4,000 gold per ounce.

It sees that every 25-30 years or so gold more than doubles and then falls back again for years if not decades.This seems to be the pattern.

#14 NFN_NLN on 06.26.13 at 9:13 pm

Garth, please don’t filter ALL the gold nuts. Once I stop seeing their rants on here I’ll know it’s time to start buying into a 10-15% position again.

#15 Drill Baby Drill on 06.26.13 at 9:15 pm

To those of you who do not understand supply and demand theory and you happen to be a housing / Office construction contractor please ignore what is happening in Calgary and High River Alberta. If you do understand supply and demand theory then get to southern Alberta because we need your economic good sense and manpower.

#16 Tom from Mississauga on 06.26.13 at 9:16 pm

Was I while since you stomped on the gold bugs. Guess the market has been doing that for you.

#17 Smoking Man on 06.26.13 at 9:22 pm

As the US gains strength, so does its currency. Positive economic data pushes the dollar up and gold down (as well as the Canadian loonie).-garth

When S&P goes up UsdCad goes down, S&P goes down UsdCad goes up..

Perhaps you can clarify your above statement. Or I’m an idiot and made 62k today by flook

I put one in the net today…. :)

#18 Gary M on 06.26.13 at 9:23 pm

Garth, why so bitter about gold? Would it be because you missed the biggest bull market of the last 10 years?

#19 AK on 06.26.13 at 9:26 pm

“Nor could I. Tried hard. Buying silver at about $50 an ounce is financial suicide, I said. You will live to regret this. But Tom was mesmerized by the doomer sites, infatuated with meteoric bullion prices as the US debt ceiling crisis mounted, determined to drain their joint account and turn it into a glittery, shimmery shrine in his basement vault. He sent me links to metal-pumping newsletters promising economic collapse, $500 silver and gold at five grand an ounce.”
——————————————————————–
Not surprising. He was probably convinced after watching a Peter Schiff video. :-)

#20 Forever Gold on 06.26.13 at 9:27 pm

I have started my buy campaign. For every $50 drop, I buy $ 10,000(t: cgl). All the way to Zero. Use itrade. No commission.

#21 Devore on 06.26.13 at 9:28 pm

Someone has to be on the other side of the trade.

#22 espressobob on 06.26.13 at 9:43 pm

Commodity plays are what they is. The energy bulls from a few years ago get it! Funny, they don’t post here? The recent decline in PMs is just a tap on the shoulder.

QE to infinity or financial repression, sounds like some are hiding behind their rusting guns for more drivel from the likes of Faber, Schiff, or Sprott!

Be forewarned. I’m waiting on the other side!

#23 Ray Skunk on 06.26.13 at 9:45 pm

I make 100K a year, 42 and just got married with 1 baby. I have 220K in RRSP + 260K in Cash + 20K in TFSA. No debt, No house and rent. My wife has $0 and is on mat leave, but only 30.
—————————————-

Correction – your wife has most of your income, 130k in cash and 10k TFSA should she exercise the option of leaving you for a younger guy.

#24 Anti-Gold on 06.26.13 at 9:47 pm

Gold is down, but I’m not bullish on the economy. If you get your financial news from fox and CNBC, guess everything is fine. Below is a taste of reality direct from the Fed itself in it’s own marble mouthed manner:

http://www.federalreserve.gov/aboutthefed/fac-20130517.pdf

May 2013
“While some believe monetary policy may not be accommodative enough in light of current government fiscal policy, others believe that constant injections of new reserves have not returned the economy to the vibrant upbeat model it used to be and that current monetary policy is ineffective.”

“Uncertainty exists about how markets will reestablish normal valuations when the Fed withdraws from the market. It will likely be difficult to unwind policy accommodation, and the end of monetary easing may be painful for consumers and businesses. Given the Fed’s balance sheet increase of approximately $2.5 trillion since 2008, the Fed may now be perceived as integral to the housing finance system.”

“Uncertainty exists about how markets will reestablish normal valuations when the Fed withdraws from the market”

“Further, current policy has created systemic financial risks and potential structural problems for banks. Net interest margins are very compressed, making favorable earnings trends difficult and encouraging banks to take on more risk”

There is more, but read for yourself. I guess as the stock market and housing market is up, everything will be fine. Let’s hope, or the metal heads will have the last laugh.

#25 earlybird on 06.26.13 at 9:48 pm

Beautiful post……Gold is screaming deflation….

#26 tigerbaby on 06.26.13 at 9:54 pm

> the bullion-lickers, doomers, skeptics and America-haters will pile on me once again …

it appears many have cut their internet to conserve fiat toilet papers?

#27 saltpony on 06.26.13 at 10:01 pm

The brain is not designed for thinking. It’s designed to save you from actually having to think , because the brain is not very good at thinking. Thinking is slow and unreliable.

However, emotion is always a most reliable sense.
;)

#28 tigerbaby on 06.26.13 at 10:04 pm

> … Faber, Schiff, or Sprott …

coming soon! Canadian tire school of business.

#29 Forever Gold on 06.26.13 at 10:04 pm

May I buy the yellow sh*t @250? I missed the chance ten years ago.

#30 takla on 06.26.13 at 10:09 pm

garth,china bought and imported 720 tons of gold in 2012 and are on course to exceed that this yr,have they got it wrong as well as the rest of us “goldbugs”?

#31 Mister Obvious on 06.26.13 at 10:10 pm

In 1974, the American author Harry Browne wrote his third book “You Can Profit from a Monetary Crisis” and made a doomer out of me for about six months.

Harry’s basic advice was to put a two thirds of your money into a Swiss bank account, convert the remainder to silver coin, break it into small units and hide it in various places that will probably still be accessible after martial law is declared.

After all, one sliver coin would still have real value on the street when hyperinflation arrives. It could probably buy that $50,000 loaf of bread the panicked masses will be fighting over.

Having no significant money at the time anyway, I ended up buying neither Swiss Francs or silver coins

But I was so young and so easily swayed. I spent quite a bit of time in a paranoid state thanks to old Harry. Then I just ran out of energy for that type of thing.

#32 Michael Francis on 06.26.13 at 10:11 pm

Garth

Your advice is golden.

#33 mel in victoria on 06.26.13 at 10:13 pm

I don’t know Garth. I thinks it’s time to at least nibble. The commercial traders have been doing so lately. They are usually the smart money…

#34 Spiltbongwater on 06.26.13 at 10:21 pm

I always think it is better to hire 2 escorts so they can have someone to talk to when I pass out.

#35 tigerbaby on 06.26.13 at 10:22 pm

> … have they got it wrong as well as the rest of us “goldbugs”?

please read up on how many things they’ve got wrong in the last 60 years …

#36 Bottoms_Up on 06.26.13 at 10:25 pm

#161 Saint Herb on 06.26.13 at 5:28 pm
—————————————–
“15” is the historical price-to-annual rent balance…meaning, that you’re essentially nuts to be renting when the ratio is “10”, and nuts to be buying when the ratio is “20”. Your personal situation is “30”, indicating that the rent you are paying is a ‘steal’ compared with historical price-to-annual rent ratios.

#37 Rikky R. on 06.26.13 at 10:27 pm

Glad to see this blog has turned gold friendly!!

#38 Bottoms_Up on 06.26.13 at 10:28 pm

#163 Tyrone on 06.26.13 at 5:55 pm
————————————–
Thanks for that link, I didn’t know they had covered call funds.

#39 -=jwk=- on 06.26.13 at 10:28 pm

Would people please stop quoting the stupid “7x% of americans live paycheck to paycheck”?!? Please. I lived in the US for 8 years, right through the real estate boom (got out just in time). EVERYONE in America lives paycheque to paycheque. BMW drivers. Audi drivers. mcMAnsion owners. private school kid senders. All them max out their credit, and use it all up every month. It’s the freakin American way. If you have money left over at the end of the month, go buy something on credit! When I see 75% I think that is LOW for America and wonder what happened to cause that?! Should be 90%+ by my reckoning….

#40 Yellow fever — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate | The Affluent Boomer on 06.26.13 at 10:38 pm

[…] via Yellow fever — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. […]

#41 Gerryantics on 06.26.13 at 10:41 pm

The debate is really about confidence. Where do you put your faith? And ultimately where do the masses put their faith?

The paper money bugs have their full faith in a note of paper, which today really costs next to nothing to create, its just an entry in a computer. It’s creation includes interest that must be paid back. Where does that extra paper come from to pay the interest?

And there is the rub, in effect paper money is a collection of exponentially growing debt. Alternatively, just think of the fairy tale story investment advisors always tell you about compound interest (and ipso facto every saver should be a millionaire in 40 years, they are everywhere). How long do paper money systems last, that is how long should you put your faith in them?

Every single paper money created in history has died, and in their very last days quickly vaporized. The average is 40 something years. The US dollar went off the gold standard in the early 1970’s, 40 years ago.

The ETF bugs are a more interesting species, they put their full faith in a mathematical algorithm that only exists in a computer and tries to replicate something else, its just a simulation, like friends on Facebook. And they dont mind the fine print that basically says anything can happen because these are derivatives and if anything happens too bad.

Basically the gold bugs are sayin they want to put their faith in something that they can hold in their hands. They are saying they think the existing paper money is going to fail along with all the debt and derivatives because there really is no collateral due to massive leverage in the game of greed – and at best a group hug and some type of reset will happen. They really only emerged considerably in recent years, because what they claim to observe is the US dollar et al in its twilight years.

The metal head labels and bashing will go on every day until there is a true economic recovery, at which time everyone will stop reading financial blogs and the metal heads will go back to a normal life. But should the US dollar gasp its last breath then we will truly witness the last and final laugh on the paper bugs.

Only time will tell who is right.

#42 KommyKim on 06.26.13 at 10:44 pm

RE: #5 T.O. Bubble Boy on 06.26.13 at 8:57 pm
What about bond ETFs? You know, those things that pretend to hold bonds, but that can’t be held to maturity to re-coup the principal?

If you hold the bond ETF for it’s “Weighted Average Duration” you will receive it’s “Weighted Average Yield to Maturity” minus the MER.
So, for an ETF like XBB, you’d have to hold it for 6.76 years to get around 2.39% return. (2.72% – 0.33%). And yes, that sucks…..

#43 Charles on 06.26.13 at 10:47 pm

To Peter Schiff’s credit, he was right about QE 2 and 3. When everyone else said the fed was mapping their exit strategy back in 2009, he claimed they could never exit. The roach motel of monetary policy he called it. Thus far he has been incredibly accurate, especially considering the reaction in the bond market to the mention of possibly, maybe tapering QE in a year or so. Gold has certainly corrected hard, there’s no denying that. However gold fell 47% at one point during the 1970’s bull run and then promptly climbed 800% over the next 4 years. Sentiment is so bearish right now, it’s hard to imagine there is anyone that even owns any gold to sell anymore. The bubble hunter Garth worshippers could be premature, just saying.

#44 KommyKim on 06.26.13 at 10:52 pm

OOps, that should read “Weighted Average Term” instead of “Weighted Average Duration”. This means you’d have to hold it for 9.64 years to get around 2.39% return.
Sucks even more….

#45 EvilMagpie on 06.26.13 at 10:56 pm

A few telcos went on sale today. Are there no ETFs that have most or all of their weighting on Canadian telcos?

#46 Chaddywack on 06.26.13 at 11:00 pm

Garth, I believe you said that gold should be a max of about 5% of your portfolio. Maybe a good time to stock up soon? I currently have 0 gold :(

#47 Smoking Man's Old Man on 06.26.13 at 11:03 pm

I guess Jennie wasn’t calling from that phone cause…

A) It’s out of service.
B) Not a lot of bridges in Regina.

:)

#48 Schiff on 06.26.13 at 11:06 pm

Schiff is as convinced as ever, which makes me cautious. Now bond traders are starting to sing his tune, and others are taking note.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10138033/BIS-fears-fresh-bank-crisis-from-global-bond-spike.html

Given he predicted the dot com bubble, the housing crisis, the banking crisis and following credit crunch, sovereign debt issues and predicted QE 1,2 and 3 (all in great detail), he at least deserves credit for understanding fundamentals others just don’t see. He is now predicting a bond bubble and a dollar crisis, and he may be right on the money yet again. Give him another year.

https://www.youtube.com/watch?v=LBD6eBYYffY&feature=c4-overview&list=UUIjuLiLHdFxYtFmWlbTGQRQ

#49 Gg on 06.26.13 at 11:10 pm

The Fed may be buying $85 billion a month in bonds, but it’s not printing the money. ……

Love it. A guy that gives financial advise sees nothing wrong with central banks actions and actually believes they can delever a $4 trillion balance sheet without any consequences.

Wow. Just stick to real estate.

Where did I say any of that? — Garth

#50 coastal on 06.26.13 at 11:12 pm

“now the central bank has decided it’s time to reduce its stimulus.”

That’s not a true statement, Bernanke has not committed to tapering yet, just bouncing it out there. He said if the economy doesn’t respond by late in the year he will increase the stimulus but you forgot to mention that part. Saying and doing are two different things.

He will gradually turn off the tap. Guaranteed. — Garth

#51 Gerryantics on 06.26.13 at 11:14 pm

” Investors are deserting the commodity in droves”

Yes, in Digital form via the ETF. But physical demand is the highest ever globally in the last 10 years including central banks.

“Overall economic growth is still subdued at 1.8% in the latest quarter, but there’s no hint of recession”

Lets be a little more genuine about the us gdp “Gross domestic product grew at just a 1.8 percent annualized pace in the first quarter, the Bureau of Economic Analysis said on Wednesday, revising down its earlier estimate of 2.4 percent growth. Economists had expected no change in the BEA’s third effort at estimating GDP, and such sharp revisions are rare in a third estimate”

“But that too was a myth. The Fed may be buying $85 billion a month in bonds, but it’s not printing the money”

Sure it is. $45billion to major banks to buy worthless mortgages, and those banks put it to work to make money, they don’t exist to lose money, thats how they keep up with those massive bonuses. Second the other $40billion to buy treasuries from the us gov who then certainly does save it but spends it.

“Don’t pile into stuff that’s reaching historic highs”

So then with the us stocks have recently been at historic highs and gold at a major correction, shouldn’t one be selling stocks and buying gold?

“And you know what? They’ll never stop. Never change. Never understand”

Oh come on, they probably enjoy a beer and a quad ride now and then too.

#52 Gg on 06.26.13 at 11:15 pm

#48 Schiff on 06.26.13 at 11:06 pm
Schiff is as convinced as ever

…… He calls are good. Timing a bit off. He understand the WHOLE picture as appose to others.

#53 CatFoodLady on 06.26.13 at 11:18 pm

Ah yes – the doomers. I read – several times a week – a community site that just LIVES for doom. They sneer at investors; call them sheep who can’t think for themselves. Yet never have I seen a bunch of people so willing to leap, lemming-like at anything recommended by their own, home grown oracles. Never mind that most of these ‘oracles’ have lost their shirts over the years.

2008? Many hit the panic button & sold every real investment they had, including cashing in retirement plans. I don’t want to think about the tax hit they took. Of course they bought gold… and silver… and bullets.

Far too many lost their homes because every last cent they had left was needed to replace lost income, pay off doomer toys & buy more stuff they didn’t really need – not in the quantities they had.

They rushed to buy a year’s worth of MREs & other ‘zombie apocalypse’ food; some simply added to their Y2K stocks. Hey, nothing against a well stocked pantry. I do that but I buy what we eat, regularly rotate what’s bought & always, ALWAYS hit the sales. 3-6 months worth of most foods is more than adequate.

These folks buy stuff they never eat & never use it. Periodically, they have to throw it out. They rail against everything or most things, mainstream & wonder why they’re not doing well. Actually, they don’t wonder – it’s the evil ‘banksters’ fault. Or the government – anything but their own poor decision making. We all make bad calls but this bunch never seems to learn from their own mistakes.

I keep the URL for that site filed under ‘entertainment’.

Investing does involve confidence. That confidence should be well seasoned with research, common sense & lots of diversification. Long term isn’t next week. Or next year. I’m sitting on some sectors right now, (energy & REITs primarily), that took a bit of a trimming this week. So what? Energy is particular is cyclical & volatile. Knowing I’m down about 11% isn’t keeping me up at night.

Tomorrow afternoon or Friday morning, is buying time again. I happen to like sales.

The money taken out of any investments this week & last will find a home & economies will recover. People anywhere want the same things for the most part. They want to look after themselves & raise their families to do well. They want more than they have. And they’ll work their tails off for it. Most aren’t afraid of hard work. And it’s hard work & positive results that grows economies.

We’ve been in hinky economic times before & recovered. We will again.

#54 Gg on 06.26.13 at 11:23 pm

Rather credit is created……

Lol. So I go buy stuff on my credit card. It really isn’t money. Lol. Don’t bullshit. Something is exchanged for this $85billion a month. It keeps rates low. The fed is supporting housing. It is supporting contractors. It is artificially supporting the economy.

Wow … Please no more Fed talk. You just embrassas yourself.

#55 Nemesis on 06.26.13 at 11:28 pm

YellowFever? Nothing the OldTimey SkilletLickers can’t cure…

http://youtu.be/GVRBQAYTEjg

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

#56 Freedom85 on 06.26.13 at 11:32 pm

Garth speaks and slams gold and silver – what else is new – we must be at the bottom.

#57 neo on 06.26.13 at 11:35 pm

If The Fed isn’t “buying” and only “expanding”. Why is there concern about how they plan on unwinding and selling all this expansion without producing a massive spike in inflation. You are understating what they have done so much it is embarassing. Sure, drain their balance sheet by $3 trillion dollars to get back to pre-crisis levels? No problem says Garth. As far as Gold is concerned. This entire financial crisis has always been about deflation. The spike in Gold since the Central Banks infusion was just a smokescreen for what is really going on here. Which is why I agreed with you to sell once it got past $1,800. But not to gloat when I said it would get back to $1,000 because of what it would mean with respect to Central Bank policy meaning nothing at that point and the delfationary cycle becoming a realization to everyone. That is being reflected in commodities in general, and will to coming to bonds and stocks as they will both be down.

#58 allyourkitcoRbelongtous on 06.26.13 at 11:35 pm

If gold was intrinsically so beleaguered at $1900.- it would have been a wonderfully profitable put. Or even straddle.

To bubble is to profit. To crash is to vanquish.

#59 Gg on 06.26.13 at 11:35 pm

He will gradually turn off the tap. Guaranteed. — Garth

LoL. The fed is trying for inflation. Growth or import it. That is what this is all about. They have stated starting targets of inflation (not CPI) of 2-2.5 % and ui of 6.5%. Q1 GDP just revised down to 1.8% btw.

If stop … It will begin again.

#60 Metro Van Observer on 06.26.13 at 11:38 pm

The Oracle of Ontario. That’s a fitting title for you Garth. Thanks for your great public service!

#61 george soros on 06.26.13 at 11:38 pm

The Obamacare mandates slated to go into effect next year will force employers to provide health care coverage, or pay a fine to the government of $3000 per employee if they fail to do so. This is a job killer in and of itself.
what a great country but dont bet against USofA

#62 stupid? on 06.26.13 at 11:39 pm

When Ben turns off the tap, interest rates will rise and the economy will collapse Garth. That Thursday / Friday 500 point was a large Chinese Bank not loaning out money and the borrowing rate went from 3% to 12%. It was a test.

This whole thing will collapse, there is no way out.

#63 Tony on 06.26.13 at 11:42 pm

One thing for sure is the day before the June job figures come out in America will be a day traders dream come true. Silver should rally between ten and fifteen percent and long term bonds will have a huge rally when the figures are made public. Long term i can only see both gold and silver fall due to the fact deflation will grip the world worst than during the dirty thirties.

#64 Chris on 06.26.13 at 11:45 pm

Mr.Turner,
you should pay attention to Mr.Schiff,he is the real pro and called it bang on before.
So far he is 1-0.
I will place my bets with him as he has a complete understanding of where the U.S is headed.
Gold may be getting trounced now,but make no mistake in the future it will be much higher than it currently is.
You seem to have pleasure at the moment of telling everyone how right you are.
We’ll see if your theory stands the test of time.
I’ll bet it doesn’t
This will prove to be a short term trend.
The smart money now would buy the shattered gold co’s and sell the significantly overvalued US market, versus its fundamentals for long term growth.
Gold will have its day in the sun in the not too distant future.

#65 Jon B on 06.26.13 at 11:48 pm

So Gold’s down in the dumps and stocks are looking a bit turbulent for my liking. Any thoughts on taking a significant position in Canadian Tire money?

#66 The Man From Nantucket on 06.26.13 at 11:48 pm

#38 Bottoms_Up

If one were fortunate enough to purchase at the right part of 2011 when everything was getting slugged, it was yielding over 8%.

Options trading scares me almost as much as Forex, but I’m sitting here wondering why this isn’t part of my portfolio.

The chart variability looks sort of like that of a preferred share and the yield is delicious looking.

fund manager playing derivatives with dividend paying blue chips?

Risky, yet somehow sort of safe?

I dunno.

#67 Tony on 06.26.13 at 11:49 pm

Re: #48 Schiff on 06.26.13 at 11:06 pm

The bond bubble is at least a decade or more away. This is a once in a lifetime opportunity to buy long term bonds and reap a small fortune off the stupidity of others at this time.

#68 Jeff on 06.26.13 at 11:54 pm

Garth,

You understand real estate. Stick to that.

Your macroeconomic forecasting, and especially your assertions that the financial crisis is over, are naïve at best, given that we remain in a world of ZIRP in which the slightest hint of a retreat from the pace of the Fed’s bond purchases, let alone an increase in the Fed’s target rate, causes panic attacks in the stock market, the bond market, and even your precious REITs and preferreds, which are “reach for yield” investments that stand to suffer in a manner akin to high-yield bonds from the perceived return of risk.

Private debt levels throughout the world remain at levels far above those that led to both the Great Depression and the crisis that began in 2007. The world is in a “balance sheet recession”, and the central banks of the world can barely keep up to prevent deflation. Any sign that they will let up leads to days like last Thursday, when everything was down in US dollar terms. This rhymes with 2008, when cash was king. But the central banks of the world have shown us they will do everything in their power to prevent that deflationary outcome by diluting their currencies as much as possible. If cash is king but the central banks are trashing cash, the next best thing is the currency you can’t trash, and that, for better or for worse, is gold. Ask yourself: why do central banks hold gold if it’s worthless?

To be clear, I’m not advocating a major position in gold. I’m just providing a counterargument to your total condemnation of gold as pure quackery. In the present environment of generalized over-indebtedness, the name of the game is diversification, and gold is just a part of that.

#69 Cristian on 06.26.13 at 11:55 pm

“Fear is done.”

Hmm… How naive. :)

#70 Tony on 06.27.13 at 12:00 am

Re: #45 EvilMagpie on 06.26.13 at 10:56 pm

Some sale, when Verizon gets their “foot in the door” think of the money they have to bribe the C.R.T.C. they’d make what Bell throws them look like peanuts. Ultimately that could spell the total end of the big 3 oligopoly in Canada.

#71 JimH on 06.27.13 at 12:06 am

This frenzy will pass. We have always had hoarders and they have always had a rational for their unproductive hoarding. Freud’s rather amusing explanation can be found here: http://www.ocfoundation.org/hoarding/dante_to_dsm-v.aspx

Reduced to the basics, the rationale of the fanatical gold bugs just boils down to good old fashioned geed and selfishness. Their pseudo-religious prayers for Financial Armageddon are puerile and annoying, and reflect their resinous hearts. Perhaps if they were to melt down all their gold and cast it into another golden calf and bow down to that, they’d have better luck.

In 1841, Charles MacKay published his “Extraordinary Popular Delusions and the Madness of Crowds”.

Remarkably, his book is still in print.

#72 Jeff on 06.27.13 at 12:11 am

Oh. And for the record, the bond bull is not over. Pull up a long term (10 years +) chart of the 30-year US Treasury Bond. The trend is intact. This is just a pause until everyone panics about deflation again in a few months.

#73 LH on 06.27.13 at 12:15 am

My 89 ounces of gold (hidden in a safe deposit box at my bank) are getting crushed but at least this is only 2-3% of my portfolio. Maybe I’ll buy the dip to make it an even 100…

Up to 5% I would consider eventually but would not suggest any more than that.

#74 No Debt on 06.27.13 at 12:30 am

I’ve been saying for too many years now that this credit happiness of ours is really going to hurt when the crap hits the blades.

The winds are blowing.

#75 German History Buff on 06.27.13 at 12:34 am

Weimar Republic

#76 gold is for pirates on 06.27.13 at 12:35 am

I know a “goldbug” that goes on about gold bullion, the NWO yada yada. He has become prisoner in his own home because he doesn’t want to leave his “precious” metal, fearing it might get stolen. Gold has not made him king, it has made him a servant.

#77 joe on 06.27.13 at 12:54 am

Gold like the Libor rates is being manipulated and if you don’t sell it you haven’t lost a cent. It’s a long term investment that will revive once the cartell runs out of options. Gold always ends up on top.

#78 ronthecivil on 06.27.13 at 12:55 am

Granted I am no gold bug but I like to have a small portion as a hedge and yep it got it’s but kicked. Luckily lots of other stuff kicking out dividends to make up for it.

However, last I check, pretty much every country, state, province, and person that has the ability to seems to have a ton of debt and be running in the direction of increasing it. If the recent US move to decrease the speed at which they are going further into debt is seen as salvation by the masses so be it but there’s still a long way to go. And until that day comes it’s in everyone’s best interest to create inflation to inflate those debts away and it’s in every governments interest to avoid deflation like a plague.

So it matters not how it’s done via QE or whatever happens next until they will still be doing whatever policy they can get away with to create inflation as it’s in their interest to do so.

As such, when it looks like the gold has finally hit bottom (it’s got a way to go yet for sure) then I will be doubling up on my gold producer stocks which are already on sale and will be bargains at the end of the day.

The world has a loooooooong way to go before it can consider itself deleveraged and until it is the incentive to create inflation will always be there.

#79 ronthecivil on 06.27.13 at 12:57 am

He will gradually turn off the tap. Guaranteed. — Garth

So long as inflation continues at a healthy pace on it’s own, why not?

#80 Yellow rocks rock on 06.27.13 at 1:00 am

I love gold and am not in the least unhappy to see it falling. I won’t take the hate bait today other than to simply state that any market can be overvalued and any overvalued market eventually corrects. It’s healthy!

#81 Freedom First on 06.27.13 at 1:13 am

The sane/wise investors I listen to who do invest in precious metals hold 5-10% of their assets in gold/silver. They are also the ones who were rebalancing-selling as gold and silver climbed, and are the same investors who will be rebalancing-buying again when prices have dropped to their appropriate low price. Same people, the wealthy, are very good at buying low and selling high. This includes all assets. Garth refers to it as being liquid, balanced, and diversified. I like cash, fixed income, cash flow, income streams, a minimum of 8 different asset classes, and no debt. No 1 investment/asset should have the power to financially wipe you out. Like all your money in a house. But, many Canadians think we are different. Foolish.

#82 gold dropping like my pants on 06.27.13 at 1:13 am

DELETED

#83 Mr.Hulot on 06.27.13 at 1:29 am

I am curious, do you still advocate a position in precious metals as part of a balanced portfolio?

#84 Donald Trump on 06.27.13 at 1:33 am

DELETED

#85 Mark on 06.27.13 at 1:35 am

Garth, certainly you know that the bond market and gold are countercyclical. So I don’t know how you can call for RE to melt down because of higher interest rates *and* for gold to go down. It simply does not make sense.

#86 Devore on 06.27.13 at 2:03 am

#30 takla

china bought and imported 720 tons of gold in 2012 and are on course to exceed that this yr,have they got it wrong as well as the rest of us “goldbugs”?

They seem to have been getting lots of things wrong recently. It’s funny how central banks and governments are evil, but when they buy some gold all the goldbugs go aflutter. Pst, they also bought lots of US treasuries.

#87 Peter on 06.27.13 at 2:08 am

I am buying silver since 2003, save 600-1000 monthly and then buy silver.

2003 – 1500 oz
2004 – 1200 oz
2005 – 1000 oz
2006 – 500 oz
2007 – 400 oz
2008 – 500 oz
2009 – 400 oz
2010 – 200 oz
2011 – 150 oz
2012 – 200 oz

Yes, I was paying even 45$ / oz but in 2011 I was able to buy only 150 oz

#88 GarthBSCorrector on 06.27.13 at 2:11 am

>>There ‘s no better symbol of the end of the financial crisis than the collapse of precious metals.

The depths of your financial ignorance are bottomless. Precious metals are going down now because of the end of QE. As the recession worsens the price will go down even further. Gold goes up when inflation is high.

*Please* get the basics under your belt before you embarrass yourself any further!

I’m leaving that to you. — Garth

#89 peter on 06.27.13 at 2:30 am

The Gold bull market lasted more than a decade moving from about $300 to over $1,900 an ounce. Did you participate in this historic run and recommend gold in the early 2,000’s? Investment Advisors dislike gold because there is no management to interview, financials to interpret, no IPO’s to dump on the public & most importantly little chance to earn trailer fees or commissions. Owning some physical gold has and is prudent for any reasonable investor.

Read my books from the period. — Garth

#90 VanPerfecto on 06.27.13 at 2:36 am

Jim Sinclair over at Mineset now foaming at the mouth. His latest target something like $50,000 gold no typo. Anyone follow Peter Grandich the so called “whiz kid” of Wall Street. Another doomer and gold nut who’s followers lost alot of money

#91 Bazza the impaler on 06.27.13 at 2:51 am

By far the most interesting story out of Europe comes out of an Irishman’s arse. A banker’s to be precise.

The Irish government bailed out Anglo Irish bank during the financial crisis. Recently, the bank management’s internal phone tapes from 2008 were leaked to the press and include some brilliant commentary. For example, one banker asked the other how many billion the bank was going to ask politicians for:

‘Yeah, and that number is seven, but the reality is that actually, we need more than that. But you know, the strategy here is you pull them in; you get them to write a big cheque and they have to keep – they have to support their money.’

So if they knew they needed more, where did they get the €7 billion figure from? ‘Picked it out of my arse’. Besides, ‘this is a €7billion bridging [loan]. So you know, it is bridged until we can pay you back … which is never.’

It’s funnier with an Irish accent…

Instead of pouncing on the tapes in tabloid style, the Irish media did something very odd. The Independent said this on its website’s index page:

‘The brilliant English economist John Stuart Mill, writing in the 1860s, noted that ‘a crash doesn’t destroy wealth, it merely reflects the extent to which wealth has already been destroyed by stupid investments made during the preceding boom.’

It’s only taken them five years to figure it out, but well done anyway.

#92 Nancy on 06.27.13 at 3:03 am

#10 Finally on 06.26.13 at 9:04 pm
I make 100K a year, 42 and just got married with 1 baby. I have 220K in RRSP + 260K in Cash + 20K in TFSA. No debt, No house and rent. My wife has $0 and is on mat leave, but only 30. Are we financially OK? – because I feel we’re behind a bit compared to others.
———————————————-

Your wife will talk you into buying a home, and you will cause you want to get a stable place for your kid to grow up and get into a nice school. BAM – there goes your cash of 260K for a downpayment. From this point forward, you will not be able to save a dime – mortgage, utilities, preschool, lessons, second vehicle, second child, third child, family vacations, etc. Wife doesn’t go back to work after 2nd kid. BAM – dig into that RRSP of 220K. But you sure got yourself a young wife – good luck with that. Stay at home moms tend to wear lululemons.

#93 Yitzhak Rabin on 06.27.13 at 3:09 am

Gold and silver will tank if the Fed really does do what is says and tightens the tap. The key here is you have to believe Bernanke’s forecasts which have never once been correct.

Look at how QE1 led to QE2, then Operation Twist, followed by QE3+. If these operations ever worked, they would not need to be repeated continuously, and would not results in weak data and market sell-offs whenever they were stopped.

Gold was up for 12 years in a row and needed to correct. The sell-off is based on a false narrative that the Fed will tighten permanently. 1 year ago they talked about an exit strategy from their large balance sheet ie. shrinking the monetary base. Now they talk has shifted to merely growing it at a slower rate.

I refer everyone to a chart of the monetary base in the US:

http://research.stlouisfed.org/fred2/series/BASE?cid=124

It is certainly right to be concerned about the stability of the economy and currency when such Mad Scientist style experiments are undertaken.

The Brad Lambs of the world have been snickering at Garth for predicting Canada’s real estate crash for 5 years.

Well informed gold investors like Peter Schiff, Marc Faber, Jim Rogers and Michael Pento have similarly been warning of problems with the US currency, bond market and economy for years. They will be proven right, for the right reason unless policy makers dramatically change direction.

People who bought $1,900 gold and $48 silver probably did not understand their purchase and did buy on emotion. Same with the suckers who bought $700/share Apple stock or Groupon at the IPO.

When you get into a taxi cab and get tips on buying the hottest gold mining shares, when family talk about silver at Thanksgiving, and when Ben Bernanke becomes Paul Volcker is when you should sell gold and run for the exits.

#94 Onthesidelines on 06.27.13 at 3:29 am

“He will gradually turn off the tap. Guaranteed. — Garth”

By whom and based on what? Just another pompous unfounded declaration, dare I say.

Sure sounds like your oft stated proclamations on Carney and interest rates which never materialized. Your defence? Mortgage rates went up… and that’s the same. Sorry, no, it’s not the same, especially for those of us who don’t give a shit about mortgage rates. But nice try at pretending you were right.

#95 Martin Lazi on 06.27.13 at 3:33 am

Garth I thought you were a liberal?! your ideas are just to pragmatist. lucky who understands them. cheers

#96 Martin Lazi on 06.27.13 at 3:36 am

He will gradually turn off the tap. Guaranteed. — Garth
—-
It took you so long to put guarantie !!!

#97 Buy? Curious? on 06.27.13 at 4:41 am

So load up on gold NEXT week? Buy Low, sell High, right on! Garth!

You’re like Sean Connery in Goldfinger!

http://www.youtube.com/watch?v=v0nKkhy8v0M

#98 Die USA auf dem Weg in die nächste Finanzkrise | Geolitico on 06.27.13 at 4:55 am

[…] viel zur Einschätzung von Garth Turner im Blog The Greater Fool. Turner hat mit vielem Recht. Er schreibt gut und er argumentiert […]

#99 Canmore on 06.27.13 at 5:24 am

With all of the flood stories, I checked out Realtor.ca and looked up Canmore.

I used to live in Edmonton and owned a vacation condo in Canmore. I sold out of both more than 15 years ago and now live out of the country.

My jaw dropped when I saw the prices in Canmore. Properties that I knew, are now selling for 3 times more. Are Canadians nuts? Don’t get me wrong, Canmore is beautiful. But, a million bucks for a crummy 50 year old bungalow, near downtown that you rent out to seasonal ski hill attendants or hotel workers from Banff. Or how about a family home near Cougar Creek. Amazing.

You fellow Canadians need to do some shopping around and compare prices. I never realized that the situation was this bad. Holy crap!

#100 TinkerTailorSoldier on 06.27.13 at 5:31 am

What the metalheads fail to appreciate is the Gotterdamerung they envisage making their precious metals so much more so would also lead to the undermining of the rule of law. In that environment you would be better off with a pointed stick and a mean dog allowing one to just take what others seek to buy. It would be like a giant game of rock, paper scissors only the goldbugs would lose every time. Next stop $1000…

#101 Derek R on 06.27.13 at 5:51 am

#41 Gerryantics on 06.26.13 at 10:41 pm wrote:
The paper money bugs have their full faith in a note of paper, which today really costs next to nothing to create, its just an entry in a computer. It’s creation includes interest that must be paid back. Where does that extra paper come from to pay the interest?

Whenever I see this particular type of question, it tells me that I am dealing with someone clueless about banking. It’s actually quite easy to work out how a punter can get a bank loan of $1000 in paper money, gold coins, or cowrie shells and pay back $1005 (or even more) by the end of the loan term.

Here’s a hint. Someone owns the bank that issued the $1000 and that someone has to eat. See if you can work out the answer from that.

#102 NoName on 06.27.13 at 6:07 am

What i found most interesting about gold is the fact that gold is
most mallable metal that we know of. According to wiki 1oz of gold (28.3grams)
can be bitten into a sheet of 300sq-ft.
I can see this in not so distant future
…Immaculate x bedroom, x bathroom condo, located in the highly desirable area.
luxury gold leaf floor unlike carpet, don’t harbor allergens, …

On this blog “we” often talk about american economic recovery, but it is interesting
that obamacare doesnot come up so often. What i think is that soon as initial cost is absorbed by
gov and bussiness, (around 2 trilion), we will see steady growth for years to come. There is a
possibility that they will syphon lot of our manufacturing jobs due to labour and energy beeing lot
cheaper on their side of the border.

NoName, know-it-all, self-trained, auto-lubricating monetary analysts. :-)

#103 Charles Ponzi on 06.27.13 at 6:23 am

You can’t call something a “recovery” if you pay for it with more debt.

#104 Buy? Curious? on 06.27.13 at 6:42 am

Hey Garth! One quick thought, when you say don’t bet against ‘Merica, do you ever factor in pension obligations for cities across that great land that are due on a massive scale over the next 20 years?, What about student loans defaulting on an equally massive scale, will that have effect on Read (all your emails), Whitey (Two words: Paula Dean) Blew (Anthony Wiener will be the next mayor of New York City)?

Speaking of Mayors, John Tory, The Buffalo Bills of the 90’s of Mayors, is thinking of running for mayor of Toronto up against Rob Frickin Ford? What’s his slogan? “At least I don’t smoke crack”

http://www.youtube.com/watch?v=TMIws86ZLyk

#105 Skeptic on 06.27.13 at 6:53 am

As the US gains strength, so does its currency.

Unfortunately, as witnessed last week and then again yesterday, as the US gains strength, the stock markets fall, and vice versa. Any improvement in the economy is viewed as an indication that the Fed will stop artificially supporting bond (and correspondingly stock prices), so the resultant effect on stock prices is the opposite of what it logically should be. This whole rally is nonsensical and once the government steps out, stock prices will come back down to the levels they should be at.

For anyone who thinks otherwise, consider it this way. Stock markets are at an all time high, implying that companies are generating more profits, and have stronger outlooks, then they ever have in history. Think back to 2008 (pre-crash) and the figures then, and then consider whether companies today and financially stronger than they were then, and whether their shares deserve the huge premiums today that the markets have assigned.

Skeptic

p.s. Garth, still waiting for your predictions of rate hikes by the BoC and national declines in housing prices to pan out. You seem to take great pride in gloating when you have been right; how about manning up and admitting when you haven’t?

The US markets were up yesterday, not down. So much for your argument. Regarding large corporations, most have vastly stronger balance sheets now that in 2008. My rate prediction? Correct. The BoC does not need to move when mortgage ams are shortened and the bond market does the work. — Garth

#106 The Man From Nantucket on 06.27.13 at 6:58 am

#76 gold is for pirates on 06.27.13 at 12:35 am

…………..he doesn’t want to leave his “precious” metal, fearing it might get stolen. Gold has not made him king, it has made him a servant.

Only thing crazier than having all of your hoard in gold is telling folks that you have all of your hoard in gold……and that it’s stored at your house!

#107 Bob Copeland on 06.27.13 at 7:03 am

Thank you again. Only because of your blog I sold gold and silver last December.

#108 bigrider on 06.27.13 at 7:05 am

Funny, as much as financial assets make sense over real ones at this juncture the following is so true.

Ask a wealthy individual in Canada how he became wealthy and one of three answers emerge.

1) They inherited it.
2) They built and own a successful business
3) He acquired commercial and residential real estate in that order.

I have never met anyone who built wealth investing in the stock markets.

Just an observation

And then where did they put their money? — Garth

#109 Gg on 06.27.13 at 7:35 am

Who has been buying all the paper gold contracts? The large billion banks (JP Morgan). Long contracts held have reached levels of 2002. Banks don’t make these type of position just out of a guess. Watch the recapitalization of these banks begin at the expense of the massive hedge fund short traders.

#110 Mr. Frugal on 06.27.13 at 7:47 am

Hoarding gold is just plain silly. If things get so bad that world economies start to fail and we’re thrown into a global crisis of biblical proportions, gold won’t save you. At that point the important things will be (1) guns (2) ammo (3) water (4) canned beans. Oh and don’t forget lots of toilet paper. You’re gonna need that too.

#111 Rusty Venture on 06.27.13 at 7:51 am

I always get a hoot out of the gold bugs who cite “weimar republic” and “$1000 loaf of bread” when they jabber amongst themselves.

A good supply of flour, beans and yeast is all you need to get through a period of hyperinflation. A mean dog and a sharp stick would be useful, too. You can always eat the dog when the flour and beans run out…

#112 fancy_pants on 06.27.13 at 8:06 am

Lately the bullion bulls have been playing hide and seek. You can come out now. Who needs a hug?

#113 Ben Bernanke on 06.27.13 at 8:09 am

Are you going to stop fighting each other bunch of idiots?
I will try to make everybody happy, the metalheads and the Garth followers as well.

#114 rosie "moving forward" on 06.27.13 at 8:18 am

Garth is correct in his assessment. Gold bugs are nobs when it comes to investing. They brag about buying, but they never seem to sell. http://static.c2w.com/uploads/question/image/01/07/91/95/N1079195/file.jpg

#115 Mark on 06.27.13 at 8:39 am

“I have never met anyone who built wealth investing in the stock markets.”

The past 30 years have been very unkind to equity investors, with even bonds outperforming the TSX by a significant margin. But with bonds at a valuation extremity, and stocks very cheap in comparison, this isn’t likely to be replicated for the next 30 years.

The future belongs to active businesses, not passive holders of assets such as real estate or bonds. No risk = no return. The past decade of no risk = all the return is completely unsustainable. The days of savings accounts providing excess returns are over.

#116 TurnerNation on 06.27.13 at 8:45 am

A few comments yesterday re. ‘lefties’ and Toronto’s transportation woes.

I’m not always an “Agenda 21” watchdog, but their message is clearly: freedom of movement, bad; concentrating in the city, good.

Talk last week of shutting down King and Queen Sts to cars during rush hour.
Always talk of tearing down Gardiner (a major major arterial route).

The DVP even on weekends is a parking lot.

Talk of tolls for cars, too.
– Plans for new condos beside Eaton Centre with no parking spots for cars whatsoever.

Their message clear: freedom of transportation is no longer a right.

Airport taxes and fees certainly discourage transportation. Across the country Greyhound bus is slashing rural routes for economic reasons.
Seeing a pattern?

Proletariat, on yer’ bike! They want us like a 2nd or 3rd world country; on bicycles and scooters, in cities.
Of course the party elites will retain their luxury wagens.

#117 Jess Livermore on 06.27.13 at 8:55 am

“Needless to say, Tom’s lost half their money. I don’t talk to Jen anymore. This week that would be especially awkward.”

What poor ol Tommy has done is the classic error of all amateur traders/investors. The first rule of professional trading it to CUT YOUR LOSSES! Amateurs cut their WINNINGS when they should let them run and let their LOSSES run which they should never do. This is why amateurs will never win at the investment game.

#118 bigrider on 06.27.13 at 9:12 am

#108- Garth to Bigrider- “And then where did they put there money”.

Well, the ones I know of just kept doing the same thing over and over again, that is ,buying more commercial RE. Some actually graduated to development, still RE related anyway.

If you are implying yourself Garth in your response to me, then all the power to you. Since I don’t know you personally, I was not referring to you.

I am confident in saying, that if you have moved from commercial RE to financial ones, if that is what you were implying, you would be the very small minority for sure.

#119 Skeptic on 06.27.13 at 9:15 am

The US markets were up yesterday, not down. So much for your argument. Regarding large corporations, most have vastly stronger balance sheets now that in 2008. My rate prediction? Correct. The BoC does not need to move when mortgage ams are shortened and the bond market does the work. — Garth

Yes, they were up when the economic data was negative (i.e., GDP growth lower than expected, consumer spending down, etc.). So much for your argument.

As for corporations having “vastly stronger balance sheets”, I have no idea where you are getting that from but I disagree. Regardless, In its simplest form, a stock price is the current value of the future earning potential of a company, so has a lot more to do with the income statement and earnings than liquidity or balance sheets. And, not even someone as stubborn as yourself can argue that global corporate earnings today are stronger than they were five years ago.

Revenues and profits, both doing nicely. There is no corporate slippage, just a geenral advance. Kills you, doesn’t it? — Garth

#120 sciencemonkey on 06.27.13 at 9:15 am

I’d recommend becoming a copper bug because copper kills bugs.

http://www.reuters.com/article/2011/06/30/us-copper-antimicrobial-idUSTRE75T5C520110630

#121 Skeptic on 06.27.13 at 9:19 am

#94

@Onthesidelines…you are absolutely correct. Garth is so focused on mortgage rates that he can’t seem to appreciate that the BoC overnight lending rate affects so many other things.

Garth, bond prices and yields will always fluctuate. Any more negative economic data and yields will come down again (in anticipation of further Fed support). Regardless of these swings, the BoC still has to set its own policies and can’t rely on the bond market doing “the work” as you claim.

I said mortgage costs would increase. They did. I said amortizations would be reduced. They were, hiking rates by .9%. Get over it. — Garth

#122 Goldmember on 06.27.13 at 9:39 am

I like gooooooooooooooold!!!

#123 Basil Fawlty on 06.27.13 at 9:43 am

It ain’t over till the fat lady sings. Hang in there Tommy, you have not lost anything until you sell!

Garth is cherrypicking on the strength of the US economy, it has huge problems, witnessed by a trillion per year in money created out of thin air.

The worst advice. And you know it. — Garth

#124 David Jensen on 06.27.13 at 9:44 am

We can agree on Gold Garth.

In an apocolpytic world you want guns (preferably with bullets), canned food, land, seeds and chickens.

In any other world, you want income producing assets.
Gold produces no income, and is not neccesary.
I can see arguments for other commodities, based on world growth. We actually need oil, copper, corn, and the like. Heck even Silver has legitimate industrial uses…but Gold…well, if all the gold in the world dissapeared tommorrow it wouldn’t affect humanity very much at all.

#125 Victor V on 06.27.13 at 9:48 am

New condo buyers could face big bills at move-in time

http://www.thestar.com/business/real_estate/2013/06/27/new_condo_buyers_could_face_big_bills_at_movein_time.html

Thousands of people who’ve bought preconstruction condos in the City of Toronto over the last two years or so could find themselves faced with an unexpected extra bill when it eventually comes time to move in.

If city council goes ahead with a proposal to double development charges, those extra costs — some $7,671 on the average one-bedroom unit and $10,624 on the average two-bedroom — are likely to land right in the laps of unsuspecting buyers.

“Most new condominium contracts provide that the buyer is responsible for any increased development charges that the developer incurs after the date that the agreement (of purchase and sale) is signed,” says veteran real estate lawyer Mark Weisleder, who writes about real estate law for The Star.

The get-rich-quick mentality that became the hallmark of the condo boom of the last few years may have also left thousands of buyers of preconstruction units vulnerable.

Some buyers became so convinced they could make a quick buck by the time the unit was built and ready to occupy, they didn’t have lawyers even review the complex sale documents and may not know the clause even exists, says Weisleder.

#126 Dupcheck on 06.27.13 at 9:48 am

The US stock market is behind 5-6 years. I believe there is no other way but up for the coming while in order to catch up where it should have been if there was no recession or the 2008-2009 hiccup. I think the bull market is powering up and ready to release.

#127 Skeptic on 06.27.13 at 9:54 am

I said mortgage costs would increase. They did. I said amortizations would be reduced. They were, hiking rates by .9%. Get over it. — Garth

Actually, you said Carney would hike rates…why can’t you ever admit that you were wrong?

He did not need to, given the effective jump in mortgage costs. So why would he impact manufacturing when housing was the target? Get over it. — Garth

#128 Grantmi on 06.27.13 at 9:54 am

#70 Tony on 06.27.13 at 12:00 am
Re: #45 EvilMagpie on 06.26.13 at 10:56 pm

Some sale, when Verizon gets their “foot in the door” think of the money they have to bribe the C.R.T.C. they’d make what Bell throws them look like peanuts. Ultimately that could spell the total end of the big 3 oligopoly in Canada.

About frigen time. These big3 have been ripping the Canadian consumers off for far to long.

#129 Ralph Cramdown on 06.27.13 at 10:07 am

#41 Gerryantics — “Every single paper money created in history has died, […]”

I think what you meant to say is that every paper money that has died has died. Obviously the ones that we’re still using and which haven’t died yet… haven’t died yet. So yes, the dead ones are all dead. Honestly, I impart more information to those around me when I fart.

#130 George on 06.27.13 at 10:12 am

What a bizarre state American capitalism is in. Check out this headline on the Globe and Mail right now: “Wall Street rallies as data show US economy weaker than estimated”. The article explains that first quarter GDP grew by 1.8%, which is below the forecasted 2.4%. That means investors are doubtful that the Federal Reserve will pull back on quantitative easing. In other words, bad economic news translates into good news for Wall Street because it means more printing of money.

http://www.theglobeandmail.com/report-on-business/economy/us-first-quarter-growth-cut-to-18-per-cent/article12822046/

#131 angela on 06.27.13 at 10:15 am

#93 Yitzhak Rabin on 06.27.13 at 3:09 am

When you get into a taxi cab and get tips on buying the hottest gold mining shares, when family talk about silver at Thanksgiving, and when Ben Bernanke becomes Paul Volcker is when you should sell gold and run for the exit.
So true and when Garth talks about gold negativley you should be buying in his own words sell high buy low

I was negative two years ago. Explain that. — Garth

#132 Doug in London on 06.27.13 at 10:18 am

I can really relate to this topic. In fall of 2011 I struck up a conversation about gold with a coworker. He said he bought $22000 worth of gold, and at the time it was worth $60000. I suggested he sell it all, he said he liked the direction the price was going and intended to keep it. I then suggested he sell some of it, at least the initial purchase price of $22000. That way, even if it drops you essentially own it for free. I don’t know, to this day, if he took my advice. I also recall explaining that gold went up and back down again in 1980, an event he would have been too young (or possibly not even born yet) to recall.

As I said before in another post, if you absolutely MUST buy a yellow metal, you’re better off with uranium, which comes from bright yellow uranium oxide.

#133 Daisy Mae on 06.27.13 at 10:20 am

“Poor Tom’s silver is down 34% this quarter, the biggest tumble since 1980, and is the worst performer among 34 major commodities.”

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

So as the price of silver goes down, greedy retailers increase their prices for Halia silver bracelet charms. Go figure…

#134 Ronaldo on 06.27.13 at 10:33 am

#86 Devore -”Pst, they also bought lots of US treasuries.”

Which they are converting to gold. They will have the last laugh.

#135 What really happened on 06.27.13 at 10:37 am

#73 LH . My 89 ozs in safety deposit box at bank.
Word of advice” if its not in your posession its not yours “when the bail-in comes to Canada.

#136 Holy Crap Where's The Tylenol on 06.27.13 at 10:38 am

#97 Buy? Curious? on 06.27.13 at 4:41 am
So load up on gold NEXT week? Buy Low, sell High, right on! Garth!
You’re like Sean Connery in Goldfinger!
http://www.youtube.com/watch?v=v0nKkhy8v0M

Or perhaps Austin Powers in Goldmember!
https://www.youtube.com/watch?v=7TwPV5Xn-OM

#137 Ronaldo on 06.27.13 at 10:39 am

#87 Peter – that was an excellent strategy. Far ahead of the herd. Similar strategy but started much earlier. Good for you.

#138 Stickler on 06.27.13 at 10:40 am

#45 EvilMagpie on 06.26.13 at 10:56 pm

A few telcos went on sale today. Are there no ETFs that have most or all of their weighting on Canadian telcos?

—————————
You don’t need an ETF, there are only a handful of Telcos: Telus, BCE, Rogers, Manitoba Tel, Bell Aliant, Quebecor.

There is a covered call ETF with equal weight telco, utilities, & pipelines. (ZWU)

#139 Sebee on 06.27.13 at 10:40 am

OK, that’s just a little bit funny you must admit.

http://www.telegraph.co.uk/finance/personalfinance/interest-rates/10144039/Millions-told-they-will-have-to-work-longer-or-cut-spending-to-pay-the-mortgage.html

#140 Stickler on 06.27.13 at 10:44 am

as for gold…Once it falls to, or below the cost of production mines will reduce production. Eventually the market price will rise.

But holding any more then 5% in your balanced portfolio…good luck with that.

#141 Holy Crap Where's The Tylenol on 06.27.13 at 10:46 am

#124 David Jensen on 06.27.13 at 9:44 am
We can agree on Gold Garth. In an apocolpytic world you want guns (preferably with bullets), canned food, land, seeds and chickens. In any other world, you want income producing assets.
Gold produces no income, and is not necessary.
I can see arguments for other commodities, based on world growth. We actually need oil, copper, corn, and the like. Heck even Silver has legitimate industrial uses…but Gold…well, if all the gold in the world disappeared tomorrow it wouldn’t affect humanity very much at all.

Actually it would affect humanity, not so much regarding the use of gold as a decorative embellishment on your person. It does however have quite a few uses that most people do not even know about. It is a very unique metal with attributes few others have.

http://www.dailyfinance.com/2011/09/13/six-reasons-businesses-cant-live-without-gold/

#142 The Original Dave on 06.27.13 at 10:50 am

The Rona’s at Highway 7 and Weston Road in Woodbridge is closing down. They had an emergency meeting yesterday. Wife went there and found the doors closed.

Popular area. Lots of traffic. Easy entry. Good income area.

There’s problems.

They have just closed 11 stores. — Garth

#143 Calgary Rip Off on 06.27.13 at 10:52 am

It’s more important what metals do than what they are worth. Nickel makes excellent guitar strings. Gold supposedly is helpful for joint pain and general wellness. Silver is an antifungal antibacterial metal as is copper. Titanium is excellent for use in medical devices and anything that needs strength and lightness. Metals for Canadian coins are listed on wikipedia: 1980’s loonie coins make for excellent guitar picks whereas the toonies, not so much, due to metal composition. If the loonie is wearing down too much due to playing heavy metal guitar, one could of course put a steel Canadian quarter in the vise and file that down to the guitar pick.

But again, practicality. Copper or silver for countertops as it kills bacteria. And you could cook with a gold coin for benefits. But buying metal for investment? Crazy. If governments have their way all coinage and bills will be eliminated in favour of an electronic bar code on everyone’s forehead and anyone who does not comply will go underground or starve to death.

http://www.orthop.washington.edu/?q=patient-care/articles/gold-treatment.html

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

http://en.wikipedia.org/wiki/Antimicrobial_copper-alloy_touch_surfaces

#144 fancy_pants on 06.27.13 at 11:01 am

Black gold anyone?

hold on.. crystal ball was dirty. Ah yes, there it is.

Oil will be over $120 a barrel by Christmas. you heard it here first.

#145 World History Buff on 06.27.13 at 11:05 am

#75 German History Buff on 06.27.13 at 12:34 am
—————————————————
China circa 1000’s years B.C. to ?
USA circa 1700’s to ?
Canada circa 1800’s to ?
Dozens of European countries circa 1500’s to ?

One example, Weinmar Republic, does not a trend make.

#146 Ronaldo on 06.27.13 at 11:07 am

#120 ScienceMonkey – copper is good but silver is better for killing bugs. Not certain though if it will kill Gold Bugs or not.

http://microbepost.org/2013/01/02/silver-nanoparticles-have-antibacterial-properties/

#147 Bottoms_Up on 06.27.13 at 11:09 am

#66 The Man From Nantucket on 06.26.13 at 11:48 pm
——————————————————–
It’s not options trading per se — the downside risk of selling covered calls is the same as when owning a stock. Your losses only come from underlying share price decreasing. The calls that you sell to generate the cash flow are sold on the shares that you already own — so you generate cash flow, also collect the dividend, and may have to sell your underlying shares at the strike price. Therefore, it is a lower-risk strategy than simply (naked) option trading.

#148 Gold Forever on 06.27.13 at 11:11 am

Can you sellers work a little harder? Break the 1220 support. Me ready to buy at 1175 for my second tranche.

#149 T on 06.27.13 at 11:12 am

“He will gradually turn off the tap. Guaranteed. — Garth”

While your statement is accurate its also consistent with another statement.

Everyone will die–guaranteed.

You see, its been YEARS since this started. When this first started the forecast went from next week, to next month, to next quarter to next year.

What I find interesting is nobody seems to want to accept the possibility, (even years later) that this perhaps maybe the cycle we are in for decades to come.

(insert Garths famous “don’t bet on it” comment)

Three versions of QE have been implemented over four years. They worked. Soon it will end. Prepare. — Garth

#150 Ronaldo on 06.27.13 at 11:17 am

#124 – David Jensen – ”In an apocolpytic world you want guns (preferably with bullets), canned food, land, seeds and chickens.”

David, I agree but the bullets should be made of silver because those that invest in Silver are like the Lone Ranger. They don’t have much competition.

http://bullion.nwtmint.com/silver_bullet_bullion.php

#151 brainsail on 06.27.13 at 11:21 am

“Mortgage rates soar to 4.46% – biggest jump in 26 years”

http://money.cnn.com/2013/06/27/real_estate/mortgage-interest/index.html?iid=Lead

#152 Nonna Nicola on 06.27.13 at 11:25 am

#118 Bigga Rider

“Well, the ones I know of just kept doing the same thing over and over again, that is ,buying more commercial RE. Some actually graduated to development, still RE related anyway.”

Long tima no speaka Bigga Rider. I hopa you and youra famiglia are doing justa splendida. One more thinga you gotta understanda abouta da real estata. In 2005, da governmento di Ontario putta a green belta around da GTA. It is da biggest green belta in da world Bigga Rider. 7500 sq kilometres. You a smart young fella, you even go to da universita unlika Nonno who only go to grada 5. You knowa what da greenbelta do to da real estata prices Bigga Rider? Ah hah, now you capisce!

http://en.wikipedia.org/wiki/Greenbelt_(Golden_Horseshoe)

#153 Ronaldo on 06.27.13 at 11:27 am

#132 – Doug In London –

”I then suggested he sell some of it, at least the initial purchase price of $22000. That way, even if it drops you essentially own it for free.”

That was great advice and is exactly what should have been done but this is something many investors have difficulty doing and as a result end of losing.

#154 Iconoclast on 06.27.13 at 12:04 pm

“The only erasing of value comes if you sell them. Is that your plan? If not, go back and enjoy the dividends.” — Garth

“We’re back to 2010 levels, thus all those fools who listened to the can’t-lose arguments of gold nuts and bought in the last three years, are losers.” — Garth

So, goldbugs have lost their money forever but with preferreds (and I believe I saw a similar statement on REITs) you only lose when you sell.

I see.

Idiot comment. People buy preferreds for dividend income, which continues regardless of capital value, which is inherently stable. People buy gold to gamble on capital gains. Did your mom let you use the iPad today? — Garth

#155 Old Man on 06.27.13 at 12:06 pm

America is in the process of restructuring, and will become a different America as we have known it, but the one problem is the unfunded liabilities which are huge going forward, as this needs to be addressed; not sure how they can do this, but they need to remove the capping on payroll deductions, as this would bring in $trillions of needed revenue instantly.

#156 sciencemonkey on 06.27.13 at 12:07 pm

@151 It would be better if they just sold the silver projectiles, so when the SHTF you can get some use out of them by reloading ammo.

#157 Old Man on 06.27.13 at 12:21 pm

Praise the Lord, as my CP24 ticker tape showed that the preferred shares that I hooped the other day with my panic buying made a huge jump, so I checked with the TSX and last trade was at $24.74 for a huge capital gain. :)

#158 Joe on 06.27.13 at 12:27 pm

114 Rosie you have to be careful of broad statements they will come back to prove you wrong.
I bought a significant position in gold when it was in the 500 oz range and sold in the 1400 range.
Gold has made loads of people great returns.
My theory with gold is the same as going to a casino if you can’t afford to gamble stay out of the house.
I don’t know if you are aware of the Libor rate rigging but check it out, the same manipulation is occurring in the metals market.
Even the ex members of the Fed agree.
The markets are rigged the US markets crapped the bed at a hint of a QE pull back.
Now there’s talk of them being QE injected and up they go.
Kinda like a welfare Wednesday x 17+ trillion.
Wait and see what happens when interest rates go up with the shadow banking.
There’s loads of debt out there that will have to be addressed.
And trillions of dollars that are going to have to disappear so that the books balance.
It’s going to hit the fan just like in Europe and Asia Australia…

#159 Mike T. on 06.27.13 at 12:41 pm

#116 Turner Nation
RE: transporation systems

history provides some interesting perpectives regarding mass transit systems

GM is in the middle of some controversial stuff

‘In 1922, GM President and CEO Alfred P. Sloan established a special unit within the corporation charged with the task of replacing America’s electric railways with cars, trucks and buses’

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

it is titled a conspiracy and anything on wiki should be taken with a grain of salt, but I am pretty sure a good researcher could put a case together showing GM, Firestone, and SO (standard oil) conspired together to ruin mass transit systems and popularize personal vehicle ownership

in fact here is a PG version of exactly what I mean

‘The Big Three (auto companies) saw public transportation as standing in their way of selling cars – each public transportation vehicle held up to 50 spots per trip that could otherwise have purchased automobiles’

‘GM also had built a solid grasp on city bus production’

and

‘Interestingly enough, GM realizes in the 1950s they make more money by selling cars than buses; 10 times more to be exact’

http://dornsife.usc.edu/natural-history-ca/?p=300

so, there’s that

good post Mr Turner, so far by my count the score is:

Mr Turner: lots
Doomers: not lots

it’s not that Doomers are all wrong, they are victims of fear mongering and mis-direction….the evil empire is never going to tell you the next move, but they will lead you in the wrong direction hook line sinker….

#160 Macrath on 06.27.13 at 12:43 pm

A lot of covered call talk lately, as if its some kind of guaranteed extra income. Gee! What could possibly go wrong ?

#161 Old Man on 06.27.13 at 1:04 pm

Now have an idea for you gold bugs holding one ounce gold Maple Leaf coins, and they are somewhat large, so did you ever hear about the latest craze? It is called a coin flooring format, so why not start a project in your home and lay an entrance way with those coins glued to the flooring at the inner entrance door. List your home, and hold an open house waiting for a gold bug to buy. I bet you will get an offer way above the asking price for a quick closing.

#162 Piccaso on 06.27.13 at 1:06 pm

#45 EvilMagpie on 06.26.13 at 10:56 pm
A few telcos went on sale today. Are there no ETFs that have most or all of their weighting on Canadian telcos?
…………………………………………………………………..

Yes… because Verizon, the biggest wireless company in America is entering Canada buying small Wind Mobile.

The big 3 Canadian telco’s days of gouging Canadians are coming to an end.

Off topic… got another job offer in the U.S. paying $55 an hour. Twice the amount that Telus, Rogers or Bell will pay anyone.

Oh ya…. did I mention it costs 3 times as much up here to live. Don’t want to forget that little tid bit.

#163 The Mummy on 06.27.13 at 1:07 pm

As more Fed members back peddle on tapering of QE you can see the markets recovering and calling the bluff. My guess is double the QE annoucnement coming next week before or after July 4th. I’m sure the boys made money on the short side. This is a good chart showing market performace as more Fed members came out of the closet and say unlikely QE will be tapered. What a crooked bunch of folks:

http://www.zerohedge.com/news/2013-06-27/1-week-alongside-feds-open-mouth-operation

Tapering is a certainty. — Garth

#164 The Mummy on 06.27.13 at 1:09 pm

#145 QE Forever on 06.27.13 at 11:05 am
Stocks rally at the realization that QE is not ending. Rates cannot go up, or it is game over.
$120B by the fall. Deflation is winning.
——————————————————–
Too much interest rate sensitive derivatives on the books. Total anhilation if they went up.

#165 The Mummy on 06.27.13 at 1:17 pm

#110 Mr. Frugal on 06.27.13 at 7:47 am
Hoarding gold is just plain silly. If things get so bad that world economies start to fail and we’re thrown into a global crisis of biblical proportions, gold won’t save you. At that point the important things will be (1) guns (2) ammo (3) water (4) canned beans. Oh and don’t forget lots of toilet paper. You’re gonna need that too.
———————————————————-
Always stupid no matter how many times i hear this argument. If currency value is falling and you were a billionaire or had millions, billions, trillions to protect wealth were would go? canned food and kraft dinner, or maybe farmland, or to a metal that is rare and doesn’t tarnish in time and can be bought with a quick transaction?
Think mega rich and what they would do. The small fish don’t move markets.

#166 Old Man on 06.27.13 at 1:22 pm

Now am not joking as this is being done bigtime with pennies for flooring, and it looks good, and youtube has all the videos with detailed instructions with the key words copper penny flooring, so why not with gold and silver coins to blow off a home before it is too late with an open house to hoop a silver or gold bug into paying you top dollar with an offer well above the listed price, as hook them in.

#167 Piccaso on 06.27.13 at 1:26 pm

#167 The Mummy on 06.27.13 at 1:17 pm
Always stupid no matter how many times i hear this argument. If currency value is falling and you were a billionaire or had millions, billions, trillions to protect wealth were would go?
………………………………………………………………………

Get out of the over valued loonie fast !!!!!!!!!

#168 Donald Trump on 06.27.13 at 1:29 pm

Re Doom and Gloom:

Sure, the economy is a bit iffy, and the ill winds sneak up “silent and deadly” like a crowded elevator at a burrito eating contest…

That said, I do have full confidence when the SHTF… people will come together as one , fully united and together we shall overcome, and shed the decadent lifestyle we have been immersed in,……you betcha !

#169 Ronaldo on 06.27.13 at 1:35 pm

#168 Old Man – now you are making us old people look bad with that idea. We’re not all that crazy.

#170 Saint Herb on 06.27.13 at 1:48 pm

#36 Bottoms_Up on 06.26.13 at 10:25 pm

Thanks for the info, that is reassuring, now to see if history really does repeat itself, and how long it will take to for one or both of those number to come back into line.

If 15x’s is the magic number shouldn’t landlords know this and realize that they overpaid for the property or are charging way to little rent?

At 15 not one single rental would qualify as a good buy, and I see many houses for rent and sale at the same time.

One in my area was for sale and rent; 1.3M or 3,500/mth then it dropped to 1.19M then to 999,000. Then it sold.

I would not rent a house that was for sale bc’s they will sell it under your nose and then ask you to move.

#171 bigtown on 06.27.13 at 2:00 pm

Garth:

How do you know which Canadian PREFERRED BANK STOCKS to buy when there are “several different series” for each bank stock? thanks.

Ask someone who trades them. — Garth

#172 not 1st on 06.27.13 at 2:00 pm

If you are a follower of Buffet, he said that the ultimate hedge is land…farmland. He would buy that over any precious metal. I guess you can’t stroke it in your basement, but you can grow your food and live off it if you had too, so it pays a dividend too.

Hedge against what? — Garth

#173 billl on 06.27.13 at 2:05 pm

Garth do you read alex?
http://www.alexcartoon.com/
sounds like your advice….

#174 spaceman on 06.27.13 at 2:06 pm

Just bought GLL – Ultrashare Gold short. it has been piling on the gains, and is espected to keep going. Will let you know the outcome in a month or so.

#175 Old Man on 06.27.13 at 2:13 pm

There will be no great depression in the world, as the elite do not want this, as the last thing in the world is for them to be hurt with a loss, so are using the central banking system to adjust things for adjustments for the good of all with deflation worldwide, as the big players do not want to lose everything.

Things are in a mess, and somewhat out of control, so they are making adjustments for the corruption that took place, so be patient with the outcome. I was a baby boomer in life, and my parents went through hell, more or less, and told me many things. My dad was training weekly to go into WW2, and he put his life on the line to fight Hitler, and was on a 24 hour standby to be flown to the Aleution Islands to be dropped behind enemy lines.

Why? He gained a high rank, and could speak German, so was trained as a Spy; he was willing to give up his life for Canada, but the order never came, so when the war ended I was born.

#176 Mike T on 06.27.13 at 2:18 pm

just saw gold at $1198/oz

#177 Keith in Calgary on 06.27.13 at 2:35 pm

“There ‘s no better symbol of the end of the financial crisis than the collapse of precious metals”

“The American economy would continue to improve”

“it’s clear the United States is advancing, not contracting.”
“Don’t bet against America”

“the financial crisis is over.”

Channeling Goebbels there Garth ? You seem to be trying your hardest to keep “confidence” in the equity markets afloat. The difference between Bernanke (or the outgoing BOFC governor Mark Carney) saying they are going to do something, versus actually doing it, are two very distinct things.

Remove the QE and ZIRP life support from the US and you’ll be eating your words in a very public way. If they could, they would…….but they cannot.

When I am finsished my buying cycle (in about 8 more months) I’ll have between 20-30% of my net worth in physical gold and silver, depending on the average net cost per ounce as I average down, about 10% in real estate, and the rest will remain in cash or cash equivalents. So, I am diversified and comfortable with my allocation choices. Also, I am done with bonds for now, that bubble is due to burst, along with the enormous equity bubble caused by the aforesaid QE and ZIRP.

Physical metal is the arch enemy of fiat currency, and the policymakers are more than prepared to sacrifice easily printed (or keystroked) money at the altar of paper metal price debasement in their efforts to keep confidence as high as possible in their ponzi scheme.

Can anyone post a link of a picture of armed guards in a museum protecting a pile of 4,000 year old FIAT currency that is priceless ? Inquiring minds want to know.

Your failure to learn current lessons is unfortunate. You will pay a large price for such paranoid and ill-informed views. — Garth

#178 Grantmi on 06.27.13 at 2:44 pm

Mortgage Rates in U.S. Jump to Highest Since July 2011

Mortgage rates for 30-year U.S. loans surged to the highest level in almost two years, increasing borrowing costs at a time when the housing market is strengthening and prices are jumping.

The average rate for a 30-year fixed mortgage rose to 4.46 percent from 3.93 percent, the biggest one-week increase since 1987, McLean, Virginia-based Freddie Mac said in a statement.

http://bloom.bg/14wuUAo

WOW! From 3.93 to 4.46!! Ouchie!!

#179 FutureExpatriate on 06.27.13 at 2:44 pm

Folks, LISTEN to Garth about frickin’ gold and other metals.

I DIDN’T a few years back. We had quite a safe full. We lost around $4000 by the time it was all gone. You will HATE your local dealer (who will deduct for every single minor mark and scratch, really, it’s like going into PawnStars. NOTHING like a bank.)

NOW, I LISTEN. Hard.

#180 RSK on 06.27.13 at 2:54 pm

Hi Garth, I am a new immigrant in Canada. I was introduced to a RE agent by my uncle and the agent convinced me that buying a condo is a good investment. So last year in bought a condo in Mississauga. Then I came across so many news items saying condo market is unstable. I freaked out and listed the condo for sale. It sat in the market for three months and finally I had an offer twenty thousand more than I paid last year. After my closing cost, CMHC premium, realtor commission and bank penalty for early termination of mortgage I am still losing eleven thousand dollars. Did I do the right thing by selling it for a loss?

#181 Old Man on 06.27.13 at 2:54 pm

#171 Ronaldo – you are so wrong as was dating this gal who was hot, and gave her a gift called the rock in a box which cost me $10.00. Well you might be not wrong, as thought that would impress her for a home run hit. I kid you not, as she placed this gift at my apartment door with a note saying keep the rock in the box, as want to see a diamond ring instead. Man did she throw me under the bus, and was so depressed by it all, but got a bit on the way. :)

#182 S on 06.27.13 at 3:03 pm

The hyper-optimistic run up in gold prices was to large extent the result of individuals and institutions trading the commodity (without actually taking possession of any of it) through ETF and other such vehicles. One wonders what the real values of other securities of which ETF’s are comprised of might be.

#183 tim frednel on 06.27.13 at 3:13 pm

Mortgage rates soar to 4.46% – biggest jump in 26 years

http://money.cnn.com/2013/06/27/real_estate/mortgage-interest/index.html?iid=HP_LN

#184 Bargains everywhere on 06.27.13 at 3:17 pm

#162 Macrath on 06.27.13 at 12:43 pm

I’ve been writing covered calls for over 15 years. It is a very safe and prudent way to add tax-advantaged income to your portfolio as the call premium is treated as a capital gain. Choose lower risk stocks and you’ll be fine.

#185 Mr. Frugal on 06.27.13 at 3:20 pm

#167 The Mummy

Gold is a silly investment because it doesn’t earn anything. It just sits there staring at you saying “look at me, I’m really shiny”. When you buy gold you are speculating not investing. Probably a better idea to take the money and head to Vegas.

And by the way, what’s wrong with stocking up on .22 cal ammo, baked beans and toilet paper. Oh, and don’t forget the kraft dinner. Thanks for reminding me. I almost forgot about that! I mean you never can tell when the zombies will decide to attack or the inlaws will drop in unannounced. Better to be safe than sorry.

#186 Lola Hoi on 06.27.13 at 3:24 pm

I’ve been a gold bug for many moons. My method is simple, buy a few gold coins or a few more then forget about them. The most precious commodity in Japan after they surrender in 1945, was not gold, not food, not water but soap. Yes soap to clean yourself with.
No one has the all seeing crystal ball life is short and unpredictable.

#187 broadway skytrain on 06.27.13 at 3:32 pm

METRO VANCOUVER – The home resale market in Metro Vancouver has seen some healthy gains, new data from the Conference Board of Canada shows.

The average resale price rose 4.8 per cent, looking from May of last year to May 2013.
The sales of homes by Metro Vancouver owners rose 2.1 per cent year over year

Rear view mirror? Who cares? — Garth

#188 broadway skytrain on 06.27.13 at 3:33 pm

link
http://www.vancouversun.com/business/affordability/Metro+Vancouver+home+resale+market+makes+gains/8586743/story.html

#189 94 on 06.27.13 at 3:47 pm

Garth,

I’m a fan wanting to buy “Money Road”, Chapters has been out of stock for a while. Where can I find a copy? Chance a Kobo version will be coming out?

Sorry. Wait for the next one. — Garth

#190 Holy Crap Where's The Tylenol on 06.27.13 at 3:50 pm

It’s never paid to bet against America. We come through things, but its not always a smooth ride.

Warren Buffett

#191 cynically on 06.27.13 at 3:54 pm

I just read yesterday’s postings and couldn’t believe the amount of venom coming from the goldbugs. They are blaming Garth for being correct in his forecasts and warnings about loading up on gold. Some couldn’t get it all out in one posting but had to keep coming back with almost hateful remarks so they must be really hurting and having to admit that our host was right all along just adds to their financial frustration.
As for #154 Tony in Calgary, your very negative, hateful comments about the US empire are true to some extent but all prior empires including your British Empire(not mine in mind) had their gross faults but you can take consolation in the fact that our poor slow-thinking, non visionary Canada will never have empire problems and can remain pure and simple.

#192 Tyrone on 06.27.13 at 3:54 pm

#138Stickler on 06.27.13 at 10:40 am

ZWU looks like it yields between 6 and 7%. Intrigues me almost as much as the covered call bank shares ETF.

And covered calls seem to be as innocuous as you can get with options. The only risk seems to be selling before a run finishes running…….and as you say, that risk exists even if you are just trading the stock.

#193 screwed on 06.27.13 at 3:55 pm

Recovery, you can believe in ….

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=A103600001&f=M

US gasoline retail sales HALF of what they were in 2009

Fuel prices need to come down or there will not be any recovery. All consumers including government (as one of the biggest fuel consumers) are adjusting their fuel consumptions due to higher prices and lower incomes.

Not much else matters.

#194 Donald Trump on 06.27.13 at 4:01 pm

#175 Holy Crap Where’s The Tylenol on 06.27.13 at 3:50 pm

It’s never paid to bet against America. We come through things, but its not always a smooth ride.

Warren Buffett

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

Doesn’t count…self – fulfilling prophecy level.

#195 Kent on 06.27.13 at 4:12 pm

Still don’t know why I shouldn’t bet against America. What do they actually produce there other than currency and war machines? I think they’re a losing bet. And I believe the pm’s market is heavily manipulated and its going to come back with a vengeance. Also, btw, I’m usually wrong.

#196 Toronto_CA on 06.27.13 at 4:13 pm

Middle-class income stagnation has become a common theme in many countries, and new data suggest Canada is not immune.

Median after-tax income for families was $68,000 in 2011, “virtually unchanged” from a year earlier, Statistics Canada’s annual report on income trends shows.

Since 2007 – the year before the recession – after-tax income has grown 1.9 per cent, from $66,700.

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/middle-class-income-stagnation-made-in-canada/article12858848/

_______

Interesting stats to be sure, given that median incomes have been flat since 2007 but “median” housing prices have gone up staggering amounts since that time especially in Toronto and Vancouver. How is that possible? Cheap, easy credit and a cult like compulsion to own real estate.

When will it end?

#197 Ronaldo on 06.27.13 at 4:23 pm

#183 – S – Exactly. When the entire world annual production of a commodity can be traded in a matter of minutes or hours, it does make you wonder for sure.

#198 bill on 06.27.13 at 4:46 pm

Hi Garth
was that ‘alex’ toon not in good taste?
or did I screw up the posting…?
I am sorry if you were offended old son.

Not sure of your reference. I deleted nothing of yours. — Garth

#199 bill on 06.27.13 at 4:51 pm

Hi Garth
I just read that you and the late W.O.Mitchell are/were in the privy council….
are you a fan of his by any chance?

#200 Macrath on 06.27.13 at 4:55 pm

#186 Bargains everywhere

Good to hear that it has been profitable for you for so long. I`ve been reading up on the subject. You must have a good grasp of where a stock price is headed.
I stink at stock picking and constantly get hammered with Murphy`s Law, so I invest accordingly.
If I could learn to hedge my positions with options rather than using betapro ETFs, I`d be a happy camper.

#201 Old Man on 06.27.13 at 4:58 pm

I just checked that last spot price on gold, and it is crashing, so now what? Well no dividends with a tax credit; no interest earned, so for those that have this asset to make an offer on a home to cash in for a for home, you are out of luck. In fact it might be time to call a Lawyer for a divorce settlement, as this is one big shock, as there will be trouble between a husband and a wife :)

#202 bill on 06.27.13 at 5:12 pm

screwup on my part obviously .
check out Alex if you hadnt already.
gave me a chuckle.

#203 mel in victoria on 06.27.13 at 5:15 pm

Attention gold haters and lovers!! Something very interesting and unusual happened with many of the major precious metal stocks today, esp. going into the close. Gold the metal was hit for $25.00. Normally that would have resulted in a significant sell off in these stocks. But not today. Instead they closed up!! Why you ask did this happen? One explanation is that there were huge short positions in these stocks and when they saw the $1200.00 mark hit today they figured they made enormous profits on the short side the past many months so it was time to buy and cover at least some of their positions. Many mines are not profitable at $1200 gold and will be shutting down thus decreasing supply. Decreased supply usually leads to increase in prices right? Next few days will be interesting. Also, as I mentioned earlier,the commercial traders have been going long lately in silver and gold.

#204 JimH on 06.27.13 at 5:20 pm

#198 Kent
“Still don’t know why I shouldn’t bet against America. What do they actually produce there other than currency and war machines? I think they’re a losing bet.”
====================================
Kent; ever heard of Google? Bing? Yahoo?
No…I didn’t think so. Here’s a gift to get you started on your way into the 21st century…
http://americansworking.com/
There now… There you go… look Kent! See? You can see things made in the USA! Look! See? Wow!

#205 espressobob on 06.27.13 at 5:33 pm

#203 Macrath

We all start at the begining. Keep educating yourself! Oh, and dump the stocks! Better yet, find a good advisor who detests mutual funds & individual stocks! Keep it real. And beta-pro etfs?????

#206 Ronaldo on 06.27.13 at 5:38 pm

#182 Old Man – holy crap and I thought you were old. We’re the same age for crying out loud. That’s not old. Anyway, I got to thinking about your idea of laying gold coins on thefloor of entryway of your house to make it more saleable. Well, at roughly 1.5 square inches for a Canadian Gold Maple and my entryway being about 36 s.f., I would need around 3350 of these precious little coins at current value of $1322 each that would make the value of my home worth about 4.5 million more. Yep, would sure make it sell fast alright.

#207 rosie "moving forward" on 06.27.13 at 5:44 pm

#160 Joe
Bought in Sept 08 for $826, sold half at $1890, sold rest at $1780. Figured it was done. Looks like I was right. Hang on for 20-30 years and you might prove me wrong yet.

#208 Onthesidelines on 06.27.13 at 5:45 pm

“There will be not be another 2008 in a generation. — Garth”

Not a betting man, but I’d take a bet on you being wrong on this one.

I don’t take bullion, sorry. Only cash. — Garth

#209 Old Man on 06.27.13 at 5:52 pm

I saw something for the past couple of weeks that have not seen in 15 years that involves Tim Hortons, as the lineups to get a fix for a cup of coffee were long at a place for a window operation. I gage the economy with observation, and the lineups are history, as have a sell on Tim Hortons. The lineups have disappeared, as people are saving their money, as the cars have all disappeared.

#210 screwed on 06.27.13 at 6:18 pm

Gold knows something.
True in 2009 and true again in 2013.

In 2009 gold was bought as hedge against inflation. In 2013 gold is sold in the face of a coming deflationary cycle.

Buckle up Daisy, it’s going to be a bumpy ride.

Deleveraging is the unholy child of Deflation. Debts can neither be rolled over, nor serviced. Haircuts will be the only solution. Falling house prices will be the least of our concerns.

#211 espressobob on 06.27.13 at 6:19 pm

#206 mel in victoria

Diversified investors ignore this tripe! Get over it.

#212 Old Man on 06.27.13 at 6:22 pm

Now back in the 1980’s was still in action making big mortgage deals in USA to make me some green. Ok, do you remember the loonie coin? Well my partner and I stayed at this chain called the Kings Inn which was tops at that time. We went out at night to eat well, so we tipped the gals with a loonie and they screamed as thought we guys in Canada were throwing them a Gold Coin lol.

#213 Macrath on 06.27.13 at 6:37 pm

#208 espressobob

I gave up on stocks a long time ago. Now I`m in ETFs ,diversified and not afraid to take a profit and re-balance, as Garth teaches. Worked great with the peak in bonds and XRE .

“a good advisor who detests mutual funds & individual stocks!” Thats like the hunt for the holy grail !

And this is a real expensive insurance policy
Horizons BetaPro S&P 500 Inverse ETF (HIU.TO)
Check the 5 year chart. Scary !

#214 Victor V on 06.27.13 at 6:38 pm

http://www.theglobeandmail.com/report-on-business/international-business/physical-gold-buyers-sit-it-out-as-price-falls-below-1200/article12872727/

In April, after gold dived more than $200 an ounce in two days, an unprecedented scramble to buy everything from coins to jewellery at “bargain” prices helped arrest the plunge, tempering fears of a prolonged rout.

But not this time, say dealers and jewellers, who report that consumers across the world are reluctant to buy even after a price decline of almost $200 in 10 days as investors rushed to liquidate their gold in anticipation of the Federal Reserve’s scaling back its bond-buying stimulus since November 2008.

The failure of everyday consumers to rush to gold’s rescue, as they did two months ago, suggests that prices may have much further to fall as investors rush to liquidate, analysts say.

#215 mel in victoria on 06.27.13 at 6:43 pm

#214 EspressoBoB

“#206 mel in victoria

Diversified investors ignore this tripe! Get over it.”

You missed the point….was just trying to educate you!!

#216 Suede on 06.27.13 at 6:44 pm

Gold = hedge against catastrophe, not inflation. Pull up a chart and you’ll figure this out in seconds

When your mother in law tells you that gold is really low from its highs, then you buy if you’re a cowboy, but remember gold does not pay you to own it. Converseley, when she tells you that gold has done really well, hit the sell button.

For everything else, there’s diversification.

#217 Devore on 06.27.13 at 6:51 pm

#141 Holy Crap Where’s The Tylenol

Actually it would affect humanity, not so much regarding the use of gold as a decorative embellishment on your person. It does however have quite a few uses that most people do not even know about. It is a very unique metal with attributes few others have.

It would have an effect, but it is not irreplaceable in any of those uses. Less efficient alternatives abound, and are still dominant, actually, mostly due to speculation-fueled high price of gold.

#218 Devore on 06.27.13 at 6:54 pm

#142 The Original Dave

Safeway is handing out surveys with every purchase, first time ever to my memory. Sobey’s eggheads are sharpening their pencils as well.

#219 Pantagruel on 06.27.13 at 6:59 pm

Smoking Man, congrats on your 63k yesterday, that’s a huge feat on a 50-70k account… But it means to me you played everything at a 200:1 leverage. Does not seem like trading to me, more like gambling. To make this amount on 60 pips you should have had the stop around 20k. Takes a lot of strength to take a 20k loss and not look behind on a 70k account… That’s when you decide to “wait a little more”, maybe the odds turn around… That’s how you wipe your account… or do you have a secret?

#220 johnnny on 06.27.13 at 7:13 pm

#212 oldman-I see different.My job takes me to the hard hat places,(from Kanaka bar toWabush and everywhere in between)and I am stunned(and P.O’d)by the line-ups
not just at Tims,but anywhere you can get a bite or a drink.Maxed out!!!

#221 Canadian Watchdog on 06.27.13 at 7:20 pm

#214 espressobob

Actually Bob, Mel’s post is correct and if you understood how futures markets work, you would realize (like smart money does) that there is record amount of short positions that will have to soon close their positions and buy long contracts. This will force prices back up (short squeeze). Futures markets are volatile and can go up as fast as they came down, especially when speculators are shorting during low season and get caught when seasonal buying starts again.

But you’re right, diversified investors don’t care about that. They’ll sit tight in this relief rally (part of the sell off) until the next wave of hedge fund hyenas comes out selling everything.

#222 Cautious on 06.27.13 at 7:22 pm

#87 Peter on 06.27.13 at 2:08 am

By purchasing up to $1,000 of silver per month, you’ve amassed 6,050 ounces of silver over the ten years from 2003 through 2012. The price of an ounce of silver today is $18.50, so your silver is worth $112,000.

Not much of a return on your investment given that adding $1,000 per month to a chequing account = $120,000 over ten years.

Hmmm…strong argument for rebalancing.

#223 Smoking Man on 06.27.13 at 7:34 pm

#222 Pantagruel on 06.27.13 at 6:59 pm

Smoking Man, congrats on your 63k yesterday, that’s a huge feat on a 50-70k account… But it means to me you played everything at a 200:1 leverage. Does not seem like trading to me, more like gambling. To make this amount on 60 pips you should have had the stop around 20k. Takes a lot of strength to take a 20k loss and not look behind on a 70k account… That’s when you decide to “wait a little more”, maybe the odds turn around… That’s how you wipe your account… or do you have a secret?

You can’t by 100 contracts with 70 k, had some loose change kicking around, topped up my account to 500 k.

Last week when USDCAD moved up big number x4 I know it’s coming back, wasn’t getting a rush with 10 k a week.

No brainer…

#224 Poorboy on 06.27.13 at 7:42 pm

Without new dollars coursing through the economy, there’s no currency debasement or hyperinflation.

Wow, just wow. Pro-tip: the US government does not take the proceeds from bond sales to start camp fires. Banks that transfer toxic assets from their balance sheets bringing down their leverage ratios will _______. Can you fill in the blank?

There is a 100% guarantee of massive inflationary pressure in the future. No one knows exactly when. The Fed believes it can de-leverage its balance sheet, in a hurry if need be, to control this. You have way too much faith in a group that bases most of its decisions on trailing indicators. Economics is not math – you cannot plug some numbers into a formula to get the right numbers.

Central banks are the largest group of potential buyers here and they’re largely diversifying into gold and other assets away from the USD. It’s simple supply and demand. Do you know anybody with a few trillion dollars lying around ready to bail out the Fed?

#225 TorontoBull on 06.27.13 at 7:43 pm

reason why we love zero:
http://www.zerohedge.com/news/2013-06-27/thursday-humor-hockey-porn

#226 Smoking Man on 06.27.13 at 8:00 pm

Pantagruel

It’s like poker, 7 duce anty is 2 buck and your small blind you toss in a buck, never know what the flop will bring.

Now you have pocked Aces and hit one on the flop, no flush or strait draw, someone trys to steel the pot after you check, you go all in.

With a five cent move in Thurs to Monday,

You short that your going to be in the money huge, fibonach said so.. Top up the account, balls to the walls..

Still have 400 k in play just in case you are wrong, and fight the loss.

#227 Joe on 06.27.13 at 8:00 pm

#210 Rosie.
Good on you for getting out when you did.
I guess we will have to wait and see what unfolds over the next few years.

#228 Old Man on 06.27.13 at 8:05 pm

#223 jonnny – thanks for your comments as keep that hard hat handy, as checked out your gig in life, and wish you the best of luck for future employment, and that hard hat can always be used on the street for donations to get you a cup of coffee somewhere.

#229 AK on 06.27.13 at 8:12 pm

#177 Mike T on 06.27.13 at 2:18 pm
“just saw gold at $1198/oz”
——————————————————————–

Take a picture of it, as it is heading down to the $300.00 level.

#230 Ret on 06.27.13 at 8:37 pm

#212 Timmy’s customer volumes.

This crowd are somewhat dependent on government income transfer and pension checks and as a result they are not sitting in a Starbucks WiFi-ing deals.

In Hamilton, the last 2 1/2 weeks of every month are a black hole for doughnut shops, grocery stores, taxi cabs, bars, KFC stores etc.

The first week of every month, is needless to say, a feeding frenzy and non-stop for all of the above as well as the coppers and the para-medics.

This upcoming long weekend should be a wild one in the lower city. Checks (or direct deposits) are probably out already.

#231 Daisy Mae on 06.27.13 at 8:55 pm

Well, this blog has been interesting.

A lot of angry people out there.

But Garth handled it beautifully….

#232 Canadian Watchdog on 06.27.13 at 10:13 pm

Pittsburgh Post-Gazette – Sep 28, 1999: Revenge of the gold bugs

“Fear, Mr. Bond, takes gold out of circulation and hoards it against the evil day” —Goldfinger

The muppets still don't get it. We've been here many times before. So what happens next? Miners and physical gold owners pull supply off the market (confirmed by sliding GOFO rate) while the latest herd of muppets jump in shorting (as told to by banks and hedge funds who placed short positions months ago and are now closing out), only to be slaughtered right into a massive short squeeze, like every other time.

I'm a buyer here with the banks and smart money.

#233 SCIBIDUBADEBUMBADO on 06.28.13 at 11:37 am

Re: Randy #1
Should have gotten porcelain fillings instead of gold and silver…
Beware of street toughs in poor countries with a pair of pliers in their back pocket…..ouch!

#234 Steven on 06.28.13 at 12:48 pm

When you understand the nature of government, banks and their followers AKA sheeple the popular point of view regarding gold and silver is easy to understand.
They all hate it at least publicly because you can’t create it out of thin air with a printing press or key stroke on a computer.
The real deal takes work to produce and it is relatively rare. It absolutely flies in the face of political correctness and exposes fraud and market hanky panky that the powers that be and their sheeple know and love so much.
This world is based on the proposition that evil is good.
Therefore it naturally follows that the good money AKA gold and silver is evil except in private for the elites to own. Hence all the propaganda and short selling to make the metals look like crap in order to protect paper and electronic assets. How pathetic!
There are no un manipulated financial markets and if that were not the case then gold and silver exchange rates with fiat would be far higher than they are today.
Then there is an observation made by Pastor Lindsey Williams to the effect that gold and silver is the money of the elites. It is their strategic financial reserve if you like. Why? Because the smart ones in their ranks don’t drink the cool aid they supply the sheeple with. I have no doubt that while their agents are trashing the metals they themselves are topping up their holdings on the cheap and at the expense of everyone decieved by politically correct propaganda.

So Garth how much real gold and silver do you have squirreled away?

You are living proof of what sucking on nuggets does to cognition. — Garth