Garth vs 2013

Vegan modified

Yes, it’s that time of year. Power outages. New Miley vid. Futile resolutions. And a review of my DELETED comments file. It’s now official. At 284 pages, single-spaced, 12-point type, it’s the most in-depth, complete and exhaustive collection ever of people on this blog describing me as the most bad-assed, incompetent, egotistical, ill-informed mofo ever to terrorize a laptop, and an unsuspecting nation. I am humbled.

And 2013 started off with a tub of bile after I made a bunch of calls about the year to come. Just to refresh your memory, I said:

  • Tea Party zealots would futz Washington, roil markets and create a buying opportunity for investors.
  • Long-term mortgages would rise, as bond markets roiled. Anyone wanting to lock in should do it before autumn.
  • New condos would stutter, with cancelled projects and falling sales. The chill would spread to the detached world.
  • Anyone taking advice from [email protected] to buy bond mutual funds would regret it.
  • The biggest risk with stocks would come in not owning a bunch through a diversified ETF.
  • People hoarding precious metals and toilet paper would find only one of them useful.
  • F would chicken out on more house-cooling measures, declaring the market fixed.

Hmm. Some hits, some misses. As you know, the trouble with predictions is that they often involve the future. As it turned out, Tea Party nutbars did try to derail Obama, shut down Washington and cause global worries about default. But it passed. Equity markets rocked. The bond market got its panties in a knot over tapering (which I assured you would start. It did.). House prices and sales recovered from the 2012 swoon, except the new condo market collapsed. And for every time F said real estate would soft-land, another international report surfaced saying Canadians are house-lusty morons.

So, here are nine things this pathetic blog kept yammering on about during 2013, and how they all turned out.

Mortgage rates: When a 10-year, fixed-rate home loan was available for little more than 3.5% and a fiver for 2.99%, I said grab one. Shall not pass again. And when the snow melted, rates started creeping higher as the bond market pushed yields higher and prices lower. Today a five-year mortgage at the Big 5 is almost a full 1% higher. Hope you listened.

Gold: What an unmitigated disaster 2013 turned out to be for the bullion bunnies, metalheads and doomers who used to flock here like cameras to Rob Ford. The yellow metal plunged dramatically on two occasions and ended the year 27.3% lower than where it started – which was 12% lower than the year before. What did these guys expect? There’s no inflation, no financial crisis and no reason to own precious metals. BTW, more losses are coming.

US equities: All year I told you the American economy was in a slow but relentless recovery. Housing prices, job creation, corporate profits, productivity, consumer spending – it was patently obvious, unless you were blinded by ideology, which seems to be a common disease around here. And with every tick higher, the skeptics predicted a 2008 rerun, only worse. Get a life, I said. Or a dog. And a nice ETF. The results are in, with the Dow up 28.8% and the broadly-based S&P 500 ahead 30.8%. Those people who kept their wealth in the orange guy’s shorts, and widdled out 2% because they feared loss, just lost. And it’s not over yet, by miles.

US stocks modified

Canadian stocks: A miserable record in the early months, but a great catch-up performance in the second half of the year as money flowed out of US equities looking for value. Investors  ended up with a solid return, as the TSX gained almost 13%. Of course, while poor GIC-holders were getting 2% and paying marginal tax rates on it, equity players earned six times as much and paid 50% less to Ottawa.

Our economy: For a couple of years you’ve been urged here to buy America and sell Canada. US markets (see above) doubled the return of Canadian ones, and house prices in the States have been increasing at the rate of more than 1% a month from dramatic lows hit six years ago. Now the Canadian economy is slagging so badly the Bank of Canada dude has actually used the D-word. Yep, deflation is closer than inflation, and high-profile layoffs are underscoring the fact that while Canada escaped a lot of the GFC grief, it’s now time for pay-back.

Their economy: As mentioned above, the US is absolutely, irrefutable, irrevocably in recovery mode. It ain’t quick, smooth, pretty or conventional. But it’s real and will continue. Let me repeat: don’t bet against America.

The housing market: In 2013, I said I was wrong. I thought Canadians were smarter, but c’est la vie. Sales undulated dramatically, but real estate values finished higher than the year’s starting point.  At just over $390,000, the average house added 9.8% to its worth, and is now double the cost of a similar US home. But there’s a detailed backstory.  Some markets (The Maritimes, SW Ontario, Kelowna, Fraser Valley) are struggling. Others (Montreal, Saskatchewan) are going nowhere, while others (Toronto, Calgary, Van’s saucy bits) bubble away. But even hot markets are segmenting, with condos and high-end sellers begging for buyers while bidding wars happen in the yuppie middle. Pray for them.

What crisis? The biggest story that didn’t happen is the one this blog swore would never occur. There were no bank failures, no stock market meltdowns, no US collapse, no hyperinflation or depression, no credit crunch and absolutely no rerun of 2008. Nor will there be. Those paralyzed by fear missed a solid year of growth, recovery and advance. Let’s hope they learned something.

In praise of balance: So, how many times have I bored you with talk of a balanced, diversified and liquid portfolio? Not too aggressive. Not overly conservative. Neither too hot nor too cold. No individual stocks. No costly mutual funds. Half or less in fixed income assets like a variety of bonds, preferreds, and trusts. Half in growth stuff, like a bunch of equity ETFs. Rebalanced often, selling the winners and buying the losers. Doing everything normal people don’t. There was a reason I urged this. The return this year was over 11%. The four-year average exceeds 10%. The decade-long advance is now 8%, including 2008. The volatility was low. The sleeping, good.

Now, I predict abuse.

200 comments ↓

#1 bdy sktrn on 12.29.13 at 5:18 am

early or late , 2013 gets owned by g.

#2 Deb on 12.29.13 at 5:43 am

Hopefully 2013 will serve as a wake-up call to those who have most or all of their equity exposure concentrated in Canadian stocks. Although the ideal time to diversify into U.S. and global markets was some time ago, it is not too late to adjust the plan accordingly.

#3 MEANWHILE IN FRANCE on 12.29.13 at 5:52 am

And here is to a great 2014!

#4 Muttley O'Toole on 12.29.13 at 5:58 am

Well, you got the gold part right to my regret but this is not a sprint race and one day it will rocket again.
Probably when the Chinese publicize their true holding.
I wonder why the U.S. wouldn’t release Germany’s gold?
I know this is not a gold blog but I hope for your forbearance.
Real estate – you are the man!
Congrats.

#5 Faithful Reader on 12.29.13 at 6:46 am

Mr. Turner, thank you for the effort you make to write and publish your entries each day, when possible. This faithful reader wishes you and your family health and prosperity in 2014.

#6 live within your means on 12.29.13 at 7:30 am

#139 Daisy Mae on 12.28.13 at 9:05 pm
#75 LiveWithinYourMeans: “Regret not buying a beautiful old classical Chanel purse that I loved – like new.”

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

Should have! We only go ’round once. I’m not familiar with the Chanel purse, but I googled and notice they ARE pricey! I picked up a Derek Alexander for a pittance — perfect condition. And was delighted with that!
…………………………………………………

The chanel classic purse is the quilted one with the gold chain w/leather running through the chain. I too could have bought it for a good price. I was retired at the time & thought it was an extravagence. Plus, I already owned some beautifull Longchamps purses I had bought in France over the years. Have since given a couple to a sis & niece.

#7 Blase on 12.29.13 at 7:32 am

You were advising folks to keep 5% in precious metals. Now it’s on sale for 50% off, with higher rates and inflation fairly predictable to come. Seems like a pretty good contrarian buy at these prices.

No it’s not. There is now zero reason to hold physical gold. — Garth

#8 Razbo on 12.29.13 at 7:44 am

First-time poster…thank you for your insights over the past few years that I have been following your blog and especially during 2013. Best wishes for 2014!

#9 Forzudo on 12.29.13 at 8:08 am

That’s the great thing about diversification:
You don’t have to be right about everything, all the time, to get positive returns.

Best wishes to all for the New Year.

#10 Stupesing in Cabbagetown on 12.29.13 at 8:11 am

Garth, for every twisted nasty who contributed to your 284 pages there are a hundred readers who love you.

Thank you for this blog. Your work is very much appreciated. The best to you in 2014.

#11 Blase on 12.29.13 at 8:46 am

I wasn’t thinking physical gold, I was thinking gold ETF. It might take 2-3 years, but at 50% off, it’ll pay off nicely in the long term.

That’s a stretch. You don’t buy stuff just because it’s cheap. If so, I have a bungalow in Detroit for you. — Garth

#12 Just some guy on 12.29.13 at 9:41 am

Thanks Garth for your well-argued, cogent, and interesting posts. If I were looking for a financial advisor, I would call you as I believe your openness and frankness are two essential qualities that any advisor should have. To coin a phrase, you have Garthness.

Regarding your observations about America, I think you are entirely right. My wife and I went down to Buffalo yesterday. She wanted to pick up some things and so down the road we went. While there, we stopped in at a grocery store and as always, she was amazed at how much cheaper things are there, how much variety there is, and how much, comparing prices, we are being gouged by Canadian retailers.

I was just doing my cart-pushing duty and so I passed the time watching people. I didn’t see a lot of pessimists. I saw some startling clever recycling incentives (with a loyalty component that would put most Canadian efforts to shame), I saw excellent customer service, and overall, I saw a lot of shiny, happy people.

This is strictly anecdotal and anyone who believed that the Americans do not have some serious problems would be wrong but what I believe is always a factor when it comes to American prosperity and resilience is the American people themselves. Hopefully, they will sort out their budgetary woes and their divisive politics but even now, it appears that the Tea Party influence is waning.

#13 Tony on 12.29.13 at 10:00 am

Some people get lucky when the odds are 50/50. As for stocks the “real” P/E ratios on the major U.S. indexes are about double what they were just before the dot com crash or about 88 times earnings. America has come up with more ways to over-exaggerate earnings than carter has liver pills since the dot com era. This crash should be double what happened in the dot com era. A good investor can always hold out for the inevitable payoff. I will double and triple up on my out of the money puts on the S&P 500 index beginning in February 2014.

#14 Robert on 12.29.13 at 10:21 am

Garth I love your blog but seriously you really think inflation is low? Maybe with electronic goods and crap you buy at WalMart but in the real world living ain’t cheap.

#15 >> Confession No2 on 12.29.13 at 10:22 am

Great Garth Turner confessed recently.
So should we all here and because we are anonymous and he is not !
This may help GGT to understand who we are and what are our fears:

age 47. married 2 kids.
Both IT professionals one FT one Self employed.
HHI 80k annually
we rent $1400 month All included.garage hydro etc
RRSP $4000 ( from 9 years ago when we where stupid)
TFSA both maxed – as GGT ordered
RDSP – 5k – don’t understand this plan at all
The rest approx 70k in Orange guys shorts going to renamed Tangerine Guys ass..but best free effortless place for now
We are putting few thou a month aside.

Would like to have all this in nice portfolio with divis , but GGT is expensive for us below 100K or so.

And if it cost me 3$ to make $5 and lots of effort to do that it does not work for me.

I rent i have lots of free time and i spend it with my family and kids. We are not arrested in mortgage like lots of our friends who never leave their property and go nowhere…

I want to leave Tangerine as it is not same as Orange but do not know how … do i need GGT PhD in Economics for this?
there you go Gart i confessed too.

#16 geogar on 12.29.13 at 10:33 am

Greetings! All the best in 14. Keep the blog dogs barking. I bid you a healthy and happy NewYear! Goes double for Dorthy and Bandit. Goes triple for the Amazons. Hope to be reading “Greater Fool” for some time to come…

#17 Mr. BigStuff on 12.29.13 at 10:35 am

“a bunch of equity based ETFs” – how much is a bunch? would Cdn, Int’l, US and EE be enough exposure?

#18 Ralph Cramdown on 12.29.13 at 10:44 am

#11 Blase — “It might take 2-3 years, but at 50% off, [gold]’ll pay off nicely in the long term.”

Nice theory, but hardly based on facts. Adjusted for inflation even at the suspiciously low rates the government publishes, gold has never regained its 1980 peak. Think about that. There’s people who think like you and bought on sale in ’81 or ’82, who only broke even a few years ago and whose gold has been outperformed by stocks, bonds, real estate, postage stamps, classic cars and hockey cards.

Not many people can afford to be overweight stuff that’s going down at 20%+ per year and underweight stuff that’s going up at 20%+. A year or two of that and you won’t catch up in your lifetime.

And why would the price of gold change “when the Chinese publicize their true holding”? Why would they? Would you believe them when you don’t believe western governments? Hasn’t their buying already been reflected in the price action?

Your Comrade in Paper Arms,
Ralph

#19 T.O. Bubble Boy on 12.29.13 at 11:04 am

2014 predictions coming tomorrow?

#20 TurnerNation on 12.29.13 at 11:12 am

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#21 Alberta Ed on 12.29.13 at 12:06 pm

Vegans don’t actually live longer; it just seems that way.

#22 Barry in Pickering on 12.29.13 at 12:07 pm

How come no mention of the loser-for-the-year part of the portfolio that you recommend? REITS, pref shares, bonds – all fell this year.

Once you add up the winners and losers, a typical balanced fund of cdn bonds and equities was up 5% for the year. Not bad, but a balanced portfolio sure underperformed equities this year.

Actually I gave the expected return of a 60/40 balanced portfolio. If yours was substandard you have incorrect weightings. — Garth

#23 Retired Boomer - WI on 12.29.13 at 12:08 pm

Our Blog host was far more correct than incorrect on his advance views of 2013.

Shows much MORE than the lucky guesses of a babbling idiot. The advice, which is free, has been invaluable -if you listened, and acted according to your circumstances. So, take a lesson from the recently lived history. What lies ahead in 2014? Garth has given us a preview.

Off topic, but sad. I read the obituary this am of my 47 year old neighbor who passed suddenly on Christmas day.
Was not ill, had suffered a job loss in the last year, and had placed their 5 br home on the market recently. Pray for this young family in their time of devastating loss. It can happen to any of us at anytime. Hope he had a will & adequate insurance for the family. Goodbye, Mark-

#24 John on 12.29.13 at 12:37 pm

I am still a gold believer. Just look at history.

Just look at the chart. — Garth

#25 AK on 12.29.13 at 12:39 pm

#13 Tony on 12.29.13 at 10:00 am
“A good investor can always hold out for the inevitable payoff. I will double and triple up on my out of the money puts on the S&P 500 index beginning in February 2014.”
====================================
Huh. I always thought that there was a purpose for MONOPOLY Money. :-)

#26 ole Doberman on 12.29.13 at 12:46 pm

Garth do you beleive the gov will bail in TFSA accounts by 2016?

Yes. Right after the asteroid attack on Red Deer. — Garth

#27 T.O. Bubble Boy on 12.29.13 at 12:48 pm

@ #22 Barry in Pickering on 12.29.13 at 12:07 pm
How come no mention of the loser-for-the-year part of the portfolio that you recommend? REITS, pref shares, bonds – all fell this year.

Once you add up the winners and losers, a typical balanced fund of cdn bonds and equities was up 5% for the year. Not bad, but a balanced portfolio sure underperformed equities this year.
———————————————-

I think your problem is that you only had *Canadian* Bonds and Equities?

No U.S. and no International = limited growth in 2013.

#28 Tony on 12.29.13 at 1:04 pm

Re: #15 >> Confession No2 on 12.29.13 at 10:22 am

Outlook financial 3.1 percent for 5 years only 5 dollars to register. Just remember the tale about the tortoise and the hare? Interest rates will plunge and the stock market will crash then crash twice more. You want to bet on the tortoise not the hare.

#29 Jeremy on 12.29.13 at 1:08 pm

“The biggest risk with stocks would come in not owning a bunch through a diversified ETF.”

Had someone followed your advice and loaded up on XRE a year ago, he would be down 12% in capital loss. The 5% yield isn’t enough to cover the volatility. That’s off to a good start, isn’t it? Unlike you, most people don’t have infinite capital to buy more on sale.

Despite your bias for ETFs, I like your blog.

Expecting every asset in a diversified portfolio to go up all at the same time is the mark of an emotional investor. A.k.a. a losing investor. — Garth

#30 L Lawliet on 12.29.13 at 1:13 pm

I inherited gold jewelry. Should I keep it, or sell for melt value and invest in corporate bonds?

#31 OlderbutWiser on 12.29.13 at 1:18 pm

I used to be paralyzed with fear so I know the feeling. I used to read a lot of doom and gloom stuff, mostly zerohedge but came to understand that that was just one view of the world. You need to understand your own personal bias and then work like crazy to balance that with others views of the economy, like Garth’s. I am so very glad that I did.

As with most things in life, balance in a portfolio is imperative. Also, remember that investing is a long-term process. If you are investing for your retirement then your time horizon is decades. Short term trading is gambling. And finally remember, NO ONE knows what the future will bring. Enjoy each day and the best of luck to Garth and all of you for a happy, and prosperous 2014.

#32 Chris M on 12.29.13 at 1:24 pm

I love the nightly reading of your blog. Well done and thank you.

#33 sheane wallace on 12.29.13 at 1:28 pm

US stock market did great in 2013.
So did the European markets.
My choice for 2014: European markets.

Gold did very bad in 2013. At the cost dropping bellow the cost of mining I expect some reversal. Don’t forget that one of the reasons for the drop was the draining of the ETFs like GLD. There is no much to drain any more.
I expect gold and specially silver to recover.

My choice for investment in 2014: silver and gold and silver miner ETFs. Miners are suppressed to levels bellow 2000 and 2001 while other miners thrive.
Second choice for commodities: oil companies, Australian miners.

Don’t forget: There is loss if you sell. Otherwise is paper loss/paper gain.

Bonds will tank as interest rates are going firmly up, if the trend continues and the Fed ‘tapers’ we will hit 3.5 and then 4 % pretty soon. So they have no choice but to untaper.

The cost of zero interest rates policies in the years to come will be huge inflation. Inflation of things that matter is already here. It is not rampant as money stay on deposit at the fed. But they will eventually make it into the economy and then TSHTF (the thing will hit the fan).

I will leave to Garth to answer why with no inflation the interest rates on 10 years us treasuries increased from 1.6 to 3 % this year. And how the fed intends to reverse that by tapering, tapering in nature increases interest rates as somebody other than the fed has to buy those bonds and that somebody wants higher rates…

#34 sheane wallace on 12.29.13 at 1:32 pm

There’s no inflation, no financial crisis and no reason to own precious metals.
—————————–
Let’s explain that to the Chinese and the Indians, you could goodle stats on gold imports into China and India.

#35 not 1st on 12.29.13 at 1:33 pm

confused….

1. Canadian economy bouncing back, but ETFs still stagnant?

2. Canadian economy bouncing back but don’t buy it yet?

Pls clarify

#36 sheane wallace on 12.29.13 at 1:37 pm

principles of propaganda:

http://www.psywarrior.com/Goebbels.html

#37 DM in C on 12.29.13 at 1:39 pm

Our investments did VERY well this year and we got the 2.99 mortgage.

Also bought a car — not a Kia, but not a Benz either. They’re a dime a dozen here in cowtown anyway.

Calgary is indeed still bubbling away — a friend just sold his condo in 22 hours for cash, then tried looking for houses. The three he looked at were on the market for < 24 hours, then sold for over asking. He jumped on one in Tuscany. After he conditionally bought it, two others tried bully offers to get it away from him — the owners are in Jamaica for two weeks over the holidays and didn't want to have to deal with multiple offers or bidding wars, but they ended up having to anyway.

Crazy times. No rentals in this neck of the woods either.

#38 not 1st on 12.29.13 at 1:39 pm

Why wouldn’t a person just buy a Canadian ETF that tracks the U.S. market and pays a dividend? Don’t you then get U.S. exposure while at the same time getting then Canadian dividend tax credit?

Haven’t heard this mentioned on the blog before.

#39 Country Girl on 12.29.13 at 1:45 pm

Garth,
Thank you for making good calls in 2013. Learned a lot from reading your posts. Look forward to your 2014 predictions.

#40 HDJ on 12.29.13 at 2:02 pm

“The housing market: In 2013, I said I was wrong. I thought Canadians were smarter, but c’est la vie.” Garth

Those not so smart Canadians, the ones who ignored your advice and purchased after you first began saying (years ago) it was time to get out of the market, have benefited from increasing home values. Now may be the time to sell or hold off on purchasing, but doing so when you first suggested would have been wrong. By ignoring your advice they did the smart thing. Right?

Wrong. House prices have appreciated at a significantly slower pace than financial assets. Selling real estate and investing was a sound strategy. — Garth

#41 Moosey on 12.29.13 at 2:03 pm

Garth, any thoughts on peer-to-peer lending as an alternative vehicle for the cash portion of a diversified portfolio?

Happy New Year!

#42 Greed is God on 12.29.13 at 2:06 pm

I discovered Garth in early 2013 and since then I’ve put into practice many of his recommendations.

I now have a streamlined, balanced portfolio, not just a bundle of stocks and equity ETFs. I learned some valuable lessons about holding the yellow stuff (or not as the case is now). I also am a proud owner of a TFSA.

We’re continuing to rent and have no plans to buy, and my father-in-law who was so gung ho about buying has slowly come around once he saw the awesome townhouse we’re renting in Victoria for a fraction of the mortgage amount.

Thanks Garth. Your pathetic blog is a beacon of light in this uncertain world.

#43 Shortymac on 12.29.13 at 2:13 pm

Thank you for your advice as always! I’m an American living in Canada and the housing market here feels like right before the US crash.

I have 2 questions for the next year:

1) WHEN will it be the time to buy a house?
2) How will the Canadian dollar hold up over the next year?

I’m a US immigrant who still has about 10k in US student loans. I plan on paying it off this year but I am worried about the dollar parity.

Plan for housing is to spend no more than 300k with 10% down, 3 to 5 years from now. If all goes well we might buy somewhere between Barrie and Orangeville, avoiding the Toronto blight and cookie-cutter hells of Newmarket and Aurora. (I work in Barrie currently)

Considering that prices for houses in that area are 300k now I hope when the great stagflation happens we can get something for much less. Is this plan sound?

Family Income: 105k a year, renting 1,000/mon
Investments: Roth IRA – 16kUSD (Vanguard Index Funds, grew 2k this year), RRSP – 10k (Rollover from old job) – following your investing advice.

The plan for this year is to aggressively pay off debt. After the debt is paid off, the plan is to utilize RRSPs and TFSAs and switch our debt repayment to saving and investment money.

#44 Relocated Aussie on 12.29.13 at 2:21 pm

Have been waiting since moving back to Canada for some sanity to prevail in the Fraser Valley RE market. Why are there so many idiots paying dumb prices for houses? One house that interested me was overpriced and seemed like the one to put in a low ball offer, turned out it would have been a bidding war as it sold 2 days after being listed. It is about time that the rules governing levels of down payments and percentage of income to mortgage payments were tightened.

#45 Julia on 12.29.13 at 2:28 pm

#21 Alberta Ed on 12.29.13 at 12:06 pm
Vegans don’t actually live longer; it just seems that way.

Married people, vegans and people with big mortgages.

#46 Shawn on 12.29.13 at 2:30 pm

LEND YOUR MONEY TO YOUR PEERS?

Moosey at 38 asks: Garth, any thoughts on peer-to-peer lending as an alternative vehicle for the cash portion of a diversified portfolio?

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

Yeah, there is a reasons that banks exist. It’s because it’s highly risky to lend to neighbours, relatives and peers. Don’t do it.

I’d suggest that is you lend your cash to peers even via some web site you will never have to worry about that cash again.

#47 Julia on 12.29.13 at 2:32 pm

#23 Retired Boomer – WI on 12.29.13 at 12:08 pm

Awe that’s really sad about your neighbour. I guess i was wrong about the third one. :-(

#48 Shawn on 12.29.13 at 2:37 pm

MAKING MONEY IN TRIPLE BULL ETFs

Waterloos Resident yesterday mentioned making about 35% in triple bull S&P 500 ETFS in 2013.

Actually with the S&P 500 up 28% or so, it’s a wonder he did not get closer to his 100% target.

Last year the S&P 500 soared fairly steadily. It would be easy to convince yourself that you were oh so clever and could predict when the S&P 500 was on a rising trend.

In normal years, this will be a great way to lose money. Those type of ETFs lose money when the S&P 500 is flat due to their costs. And when it falls of course your wealth goes into freefall at triple speed.

Most investors will bail when they lose money fast whenever the S&P 500 falls.

Even when it works a strategy like this makes you obsessed with the market and interferes with your life.

I mean if you are hooked on the Casino life style, then whatever, but in general people are well advised to never touch triple bull or bear products or the doubles either.

#49 Mister Obvious on 12.29.13 at 2:38 pm

#13 Tony

“America has come up with more ways to over-exaggerate earnings than carter has liver pills”
————————————

“Than carter has liver pills”

What a hoot! That expression is pre-boomer. My dad would occasionally invoke the ‘Carter’s pills’ analogy and he was born in 1920.

And I thought I was some kind of fossil.

Memories here…

http://www.youtube.com/watch?v=-v2WRcfu5Yg

#50 quebec economist on 12.29.13 at 2:39 pm

Thanks Garth, Not bad predictions.

I would like to add your two best post of the year, according to me, yes i read them all.

My top two for best concise and useful advice: (these are the only two I have shared to friends and family on Facebook…)

-Choices
-It’s a date

#51 Ralph Cramdown on 12.29.13 at 2:40 pm

#32 sheane wallace — “Let’s explain that to the Chinese and the Indians, you could goodle stats on gold imports into China and India.”

Hey, Chinese and Indians. You want to be more like us, the richest per-capita peoples in the world with the highest living standards? Invest more of your surplus in productive assets and less in inflation hedges which pay nothing. Sincerely, the First World.

P.S. If you insist on buying precious metals, recent price action suggests that there’s more than enough people in the West willing to sell. Sincerely, the Smart Money.

#52 quebec economist on 12.29.13 at 2:43 pm

Vegan live longer because meat kills you, That is a FACT.

I am no vegan but eat very little meat, several times per month only.

Stick to housing and RE Garth. Save people money, not lives;)

#53 Casual Observer on 12.29.13 at 2:47 pm

“…As for stocks the “real” P/E ratios on the major U.S. indexes are about double what they were just before the dot com crash or about 88 times earnings… This crash should be double what happened in the dot com era… I will double and triple up on my out of the money puts on the S&P 500 index beginning in February 2014”

The dot-com crash (2000-2002) brought the S&P 500 from 1553 down to 768 for a total loss of just over 50%. Losses for the NASDAQ are even higher. The GFC crash (2007-2009) brought the S&P 500 from 1576 down to 667 for a loss of around 58%.

How is it even possible for the next crash to be “double” either of these? Is the stock market going to zero?

Secondly, what do you consider to be the “real” P/E ratio, and what numbers are you using to come up with a P/E of 88?

Even using the Shiller P/E ratio, which is the price earnings ratio based on average inflation-adjusted earnings from the previous 10 years, you only get a P/E of 26.30.

The current figure is high by historical standards, but also note that it has been much higher. On Jan.1, 2000 just prior to the dot-com crash, it stood at 43.77 which is two-thirds higher than it is right now.

It was also higher on: Jan 1, 2004 – 27.65, Jan 1, 2005 – 26.58, Jan 1, 2006 – 26.46, and if memory serves, the market did pretty well during those three years.

If you really believe we are in for a market crash, you will get more bang for your buck by going long volatility (VIX), either by buying a call spread, or even just using one of the ETFs that track the VIX.

Volatility is low right now, but if things go haywire it will rise, and possibly rise very quickly. Being long “Vol” at a time like that will offer protection. Don’t make it your entire portfolio, use it as a form of insurance.

I’m not smart enough to predict what markets are going to do next week, next month, or next year. The only prediction that I can make is that they will go up and they will go down.

Historically, they have gone up more than they have gone down, and you don’t want to miss out on the upside.

#54 Old Man on 12.29.13 at 3:12 pm

Detroit is a city I know well and they got hit badly, but big money is moving in with huge investments worth hundreds of millions, as land and real estate is cheap; not to mention the auto engineering skills about. Those in the suburbs are selling out to move into the core, and the Chinese have established dozens of companies that are auto related as well. The motto of this all is the City of Detroit is being restructured with those that have a vision. Down one day and up the next with tons of money moving in to buy bargains.

#55 Porsche on 12.29.13 at 3:13 pm

#24 John on 12.29.13 at 12:37 pm
I am still a gold believer. Just look at history.

Just look at the chart. — Garth
……………………………………………………………………

Just like those dumb Canadian REITS

REITs pay you to own them. Duh. — Garth

#56 Jordy on 12.29.13 at 3:38 pm

Thanks Garth,
Another excellent year of predictions and blogs. Really impressive record of calling it right, long in advance. Keep up the good work, looking forward to a profitable 2014! All the best.

#57 KommyKim on 12.29.13 at 3:44 pm

RE: #38 not 1st on 12.29.13 at 1:39 pm
Why wouldn’t a person just buy a Canadian ETF that tracks the U.S. market and pays a dividend? Don’t you then get U.S. exposure while at the same time getting then Canadian dividend tax credit?
Haven’t heard this mentioned on the blog before

You haven’t heard it here before because it doesn’t work that way. The Canadian dividend tax credit is for dividends from eligible Canadian companies only. Since the ETF holds only US companies, you will get no Canadian dividend tax credit.

#58 KommyKim on 12.29.13 at 3:47 pm

RE: #41 Moosey on 12.29.13 at 2:03 pm
Garth, any thoughts on peer-to-peer lending as an alternative vehicle for the cash portion of a diversified portfolio.

Sounds like a great idea. Send me your cash and I’ll invest it for you. Honest.

#59 Ralph Cramdown on 12.29.13 at 3:48 pm

#28 Tony — “Outlook financial 3.1 percent for 5 years only 5 dollars to register. Just remember the tale about the tortoise and the hare?”

Terrible analogy. Harelike investments (i.e. equities) have outperformed tortoieslike (= bond) investments full stop, even though in the markets, the hare occasionally sprints 20% or 50% of the way back to the starting line. Of course, if you’re allowed to place bets any time during the race, there’s some times the tortoise would have been the one to back — like when long government zeros were yielding 8%+. Betting on a fully taxable 3.1% for five years being the winner at a time when the US economy is expanding and nowhere near capacity, the Canadian economy isn’t near capacity and even most telecom and utilities pay more than that in dividends on their common, with tax advantages to boot? I’m on the other side of that bet.

#60 Vamanos Pest on 12.29.13 at 3:51 pm

“Now, I predict abuse”

Classic.

#61 espressobob on 12.29.13 at 3:54 pm

Its been a rough year for some of us retail investors. With all those double digit gains, profit taking & rebalancing, yup, pure hell.

Could have loaded up on pm’s (bullion & miners) instead and avoided being burried under all that FIAT polymer. Garth is to blame for this. Don’t know if I’ll ever forgive him?

As for the miners,

http://ca.ishares.com/product_info/fund/overview/XGD.htm

#62 Old Man on 12.29.13 at 3:54 pm

There is a lot of green being spent today, as not all in Canada are broke. I went to a small shopping center to buy some food bargains, and no place to park, as wanted to stock up at M&M, but tomorrow will be a better day, unless nobody is working anymore, as will spend $100 for bargains, and they better have some left for me.

#63 KommyKim on 12.29.13 at 3:59 pm

RE:#53 Casual Observer on 12.29.13 at 2:47 pm
If you really believe we are in for a market crash, you will get more bang for your buck by going long volatility (VIX), either by buying a call spread, or even just using one of the ETFs that track the VIX

That is a terrible idea! Contango will eat up all your investment inside a volatility ETF in a short period of time. Volatility ETFs such as VXX have lost 64% YTD and 98% since inception. These ETFs are for short term (a week or two) gambling.

#64 Smoking Man on 12.29.13 at 4:11 pm

Wow slow here, all in all I would say 2013 one of Garths better years.

Just have one question, is Garth a real name, if fact other than garth, can’t say I’ve ever met, or heard on anyone with the name Garth

#65 eddy on 12.29.13 at 4:15 pm

It seems like only yesterday when ‘deniers’ (and me) on this blog were going ape over global warming, climate change and Toronto’s ‘weather event’. Looks like Bill Still agree with us-

http://www.youtube.com/watch?v=xLh5zX_BKwY&feature=c4-overview&list=UUhZRoC9bMegevAxFmee1oSA

#66 Mark on 12.29.13 at 4:29 pm

#51-Ralph

Mr. Smart Money forgot to beg the Chinese to help keep the ponzi alive by continuing to lend the “first world” the money we use to buy the items they make. See in Cramdowns myopic world vendor financing is the path to everlasting wealth.

#67 Porsche on 12.29.13 at 4:37 pm

#40
Wrong. House prices have appreciated at a significantly slower pace than financial assets. Selling real estate and investing was a sound strategy. — Garth
…………………………………………………………………….

I’ll give you 2013 but before that forget it and you can’t live and raise a family in a bag of ETF’s

Maybe this one will get posted… lol

#68 crowdedelevatorfartz on 12.29.13 at 4:57 pm

@#30 L Lawliet
Well, good to know that your melting down the “inheritance” and investing it……..
I’m sure the person that left you something that they obviously valued chose “wisely” when they left their cherished items in your avarice claws…….

#69 Old Man on 12.29.13 at 5:01 pm

I am no idea where this is going to end up, but apparently as at January 1, 2014 there will be a light bulb ban declared by Caesar. As we all must buy those expensive ones which are poison, expensive, and might not fit my cute light shades anymore. Well, I for one am stocking up with 1000 hour soft white light bulbs 60 watts at shoppers drugmart in 4 packs, as will not be controlled by the machine. Do not buy the clear bulbs, as did this, and was blinded with red spots for an hour, but puts a nice pattern on the ceiling for special events at night.

#70 pinstripe on 12.29.13 at 5:02 pm

Garth told a darn good story about housing and real estate until the stuff he was chucking was not sticking to the wall. Many hornies took a financial haircut by drinking the kool aid. In the meantime the realtors made a big chunk of change from all the hoopla.

The jury is still out on the US economy with the democrats using the New Math to determine their success. They will spin whatever they desire to put a badge on this one. There is enough evidence to show the facts that the market is RIGGED.

I must admit that this blog is an uplift to the choir. Everyone clapping and singing along. Self praise does wonders.

#71 Paul on 12.29.13 at 5:04 pm

Hi Garth,
I will have to disagree with you, I strongly believe there is a huge correction coming to the stock market. It has made new highs and is trending upwards so it is very difficult to know where the top is, but there will be a eventual pullback since nothing goes up forever.

I will agree that you have been right and done well with your market predictions for 2013. Should have listened to you. But I think people should take some profit soon.

I would like to hear more on the Canadian Housing Bubble. I agree its ready for a huge correction. Could you over 2014 let us know when and how long the down trend will be. What will the impact of unemployment and debt levels have on the TSX during housing correction. A global recovery or demand for our resources seem slim; what can F and the feds do when we do get hit?

Looking forward to your blog in 2014, Happy New Year.

#72 Ralph Cramdown on 12.29.13 at 5:09 pm

Peer to peer lending, redux:

A company sets up an intermediary website. It takes a percentage on each loan, whether or not that loan gets repaid. Is its incentive to facilitate consistently great loans forever (there’s competition…) or to facilitate lots of loans until the party ends?

Early lenders get good returns. Word spreads and more lenders get involved. Interest rates decline and an arms race develops between lenders trying to be “Furst!” to grab chunks of supposedly well-qualified borrowers’ loans. Does the average lender understand that loan losses are cyclical and that a long period of profitable lending will be followed by a spike in defaults which will wipe out much of the earlier profit?

See:
http://ftalphaville.ft.com/2013/12/05/1713142/the-peer-problem-for-peer-to-peer-lenders/
http://ftalphaville.ft.com/2013/12/11/1719452/a-lending-buddy-needs-capital-as-well-as-trust/

…and good luck.

#73 espressobob on 12.29.13 at 5:20 pm

#49 Mister Obvious

I recall those commercials well, Carters little liver pills, yeesh. They probably taste a hell of a lot better than Tony’s drivel! Don’t worry, your not even close to a fossil.

Be cautious in the comment section!

#74 ILoveCharts on 12.29.13 at 5:34 pm

It doesn’t really matter if all your predictions came true or not.
What really matters is the impact that you have had. You prevented me from making a $400,000 mistake. I am very thankful that I found this blog in 2013.

You are still wrong about HAM though.

#75 Ralph Cramdown on 12.29.13 at 5:45 pm

#66 Mark — Mr. Smart Money forgot to beg the Chinese to help keep the ponzi alive by continuing to lend the “first world” the money we use to buy the items they make.

You can either believe the Chinese government is the wisest in the world because it is accumulating huge amounts of gold when we all know fiat is going to zero, or you can believe that it is the stupidest in the world because it continues to hold even huger amounts of US Treasuries which we all know are going to zero.

Your choice?

#76 not 1st on 12.29.13 at 5:49 pm

Since the ETF holds only US companies, you will get no Canadian dividend tax credit.

——-

But the ETF is actually TSX listed and the fund pays you the dividend, not those companies directly right?

#77 Tri-Guy on 12.29.13 at 5:54 pm

where were you 2 weeks ago before i bought up some gold. good thing my wife doesnt read your blog or i’d be sleeping on the couch

#78 not 1st on 12.29.13 at 5:58 pm

For 2014, I wish Garth would write about some new themes that are about to impact our economy such as;

1. Technological unemployment;

http://robotswillstealyourjob.tumblr.com/post/48210312400/robots-are-taking-our-jobs-and-we-will-take-their

2. Rapidly advancing life spans;

http://www.forbes.com/sites/johnnosta/2013/02/03/the-first-person-to-live-to-150-has-already-been-born-revisited/

3. Population thats actually going to 11 billion, not 9 billion;

https://www.youtube.com/watch?v=Mz_kn45qIvI

#79 Debtfree on 12.29.13 at 6:04 pm

@ #34 sheane Wallace . The reason is that there are vastly more people in china ,India than here that don’t read or understand that inflation is local and gold price is global . Garth have your books been translated into Hindi and or manderin ? Have you considered it ? They obviously could use them . We can’t thank you enough .we are Looking forward to an even greater 2014 . We still look forward to you blog every day . This is the first time in months that I’ve read the comments . Still full of people that don’t get the blatantly obvious .

#80 bentoverpayingtaxes on 12.29.13 at 6:28 pm

#57…..not quite….you said “RE: #38 not 1st on 12.29.13 at 1:39 pm
Why wouldn’t a person just buy a Canadian ETF that tracks the U.S. market and pays a dividend? Don’t you then get U.S. exposure while at the same time getting then Canadian dividend tax credit?
Haven’t heard this mentioned on the blog before

You haven’t heard it here before because it doesn’t work that way. The Canadian dividend tax credit is for dividends from eligible Canadian companies only. Since the ETF holds only US companies, you will get no Canadian dividend tax credit.”

Buying CDN interlisted companies gave me the performance of the US market with the benefit of div tax credit etc…..

Check out CP, TD, THI…etc etc etc etc… I own dozens of CDN interlisted co’s that are up more than 50% this year.

#81 Basil Fawlty on 12.29.13 at 6:29 pm

“No it’s not. There is now zero reason to hold physical gold. — Garth”

There is more reaon to hold gold now, then when you recommended 5% in ones portfolio.

Here comes the abuse:

The issue I have with many of your predications is that they are predicated on the continued printing of trllions and ZIRP, which you say is being discontinued. This is inconsistent, since the improving US real estate market, and stock market and bond market bubbles are the result of the largest mis-allocation of capital in world history.
To suggest that gold is “dead money” you are effectively implying that the Russians, Chinese and Indians are financially challenged, as they continue to purchase gold by the tonne. This is pure folly, as we all know that the individuals and governments currently vacuuming up gold are far from stupid. Demand for physical gold has never been higher in world history, yet the price is falling. Some might ask why, while others just keep their heads in the sand.

#82 Linda Pearson on 12.29.13 at 6:33 pm

#64 Smoking Man on 12.29.13 at 4:11 pm

Just have one question, is Garth a real name, if fact other than garth, can’t say I’ve ever met, or heard on anyone with the name Garth

************************************
Then it’s a darn good thing that Garth Brooks is coming out of retirement just in time!

#83 Casual Observer on 12.29.13 at 6:53 pm

#63 KommyKim
“That is a terrible idea! Contango will eat up all your investment inside a volatility ETF in a short period of time. Volatility ETFs such as VXX have lost 64% YTD and 98% since inception. These ETFs are for short term (a week or two) gambling.”

I agree that the ETFs are for the short term, but I was responding to a poster (Tony) who believes the market is going to crash in 2014 “double” the amount of the dot-com crash.

Tony was betting on those beliefs by being long out of the money put options on the S&P 500, which is a short term play where the value of the puts will erode over time. He was also going to double and triple up on those positions.

That’s why my first suggestion was to go long a VIX call spread. That way, the value of the position won’t erode as much because while you are long one option which is losing value over time, you are also short an option where the time decay is working for you.

In 2008, the VIX quadrupled in the space of about 8 weeks. During the last market rout during the summer of 2011, the VIX tripled in a little over 2 months.

While VXX wasn’t around during 2008, it was in 2011, and it did triple over that two month period, which is the kind of protection you want if we had a “double” market crash.

#84 Obvious Truth on 12.29.13 at 6:56 pm

People in developing countries will always convert some of their paper to gold. History tells them to. Can’t behave or invest in Canada the way people might in India.

Doomsday scenarios in North America are not very likely. Inflation and growth are more likely but you just can’t bet the farm. Too many all or nothing thinkers. Always need balance with your thesis. The opportunities to be an investor in this country are unmatched and growing.

If we get growth do beaten down miners/streamers allow a way to participate and protect? They seem to be popping up on some big bank best idea lists.

Deep cyclicals anyone? Do we have a thesis?

#85 Randy Randerson on 12.29.13 at 7:01 pm

Thanks Garth for your tireless crusade to educate the masses. I’ve started investing my savings in diversified ETF’s, so far I’m up 8.5%. Love to see my money work for me and not the other way around.

@76
The ETF company invests fund into US company stocks that are traded on NYSE, not Canadian stocks. Thus no Canadian dividend credits on TSX traded ETF’s that invest in US market.

#86 Casual Observer on 12.29.13 at 7:10 pm

#76 not 1st
“But the ETF is actually TSX listed and the fund pays you the dividend, not those companies directly right?”

The ETF is a structure, not a company, so I doubt you would get the dividend tax credit.

The tax credit is used to mitigate dual taxation of corporate earnings due to the fact that Canadian companies already pay corporate taxes, and then pay dividends out of those after tax earnings.

#87 timmy on 12.29.13 at 7:21 pm

Stay out of bonds like I’ve said for over a year. Blue chip stocks are where it is at. I’m up over 16% this year. Some of Garth’s predictions were right, but the most important one–that real estate would tank– has been wrong for about 4 years now. If anyone bought a house a year ago for 500, 000 and sold it for 9.8 percent return, they’d be up by $50 grand.

I have not said housing would tank, but correct and be a poorly-performing asset class. Consistently financial assets have outperformed real estate, and without the massive entry and exit costs. Your hypothetical $50,000 profit would therefore evaporate. Let’s deal in real world examples. — Garth

#88 Son of Ponzi on 12.29.13 at 7:22 pm

“people hoarding precious metals and toilet paper, will find only one of them useful”
I stopped using toilet paper, clogs up my outhouse.

#89 timmy on 12.29.13 at 7:22 pm

Investigative journalist Ian Young discovered Canada’s investor immigrant program has
attracted 36,892 rich immigrants to British Columbia over the past eight years, of whom
66 per cent were mainland Chinese. Nearly all of these millionaire households have settled
in Metro Vancouver.
Ian Young, writing for a Hong Kong newspaper, covers real estate issues in Metro
In Hong Kong, Metro Vancouver real estate is big news (Update)… http://blogs.vancouversun.com/2013/11/24/in-hong-kong-vanc
2 of 9 2013-12-15 9:04 AM
Vancouver with a rare kind of intensity and frankness.
Unlike in Metro Vancouver, Young says, Hong Kong newspapers run front-page stories
almost daily about the fast-rising non-resident purchases of Hong Kong properties. And
most of the Hong Kong media coverage zeroes in on the effects of wealthy Mainland
Chinese buying up so many Hong Kong condos and houses.
Young, an investigative reporter for The South China Morning Post, has been breaking
significant stories about similar stratospheric rises in housing prices here in Metro
Vancouver.
{UPDATE DEC. 4th: Here’s the latest from Young on his blog called The Hongcouver:
“Born in China, Joy Mo blames rich mainlanders for Vancouver’s housing woes”}
This week Young was picking up on Vancouver Mayor Gregor Robertson’s comments
in Hong Kong this month, in which the mayor claimed Mainland Chinese people
have nothing to do with Vancouver’s record-breaking property prices.
Robertson told the South China Morning Post the assertion that they do is “ridiculous.”
Judging from the East Asian news media, it sounds like Hong Kong readers couldn’t
believe what they were hearing from the Canadian mayor’s mouth.
Young makes it clear that most Hong Kongers (as well as the 90,000 Hong Kong-born
Chinese in Metro Vancouver) are not as sanguin as many B.C. politicians and residents
about what is happening to housing prices and what is behind the phenomenon.
Demographia Research ranks Metro Vancouver as the second most unaffordable city in the
world out of 350 cities — after Hong Kong.
Both places are highly affected, Young and others confirm, by foreign ownership and
immigration, particularly from Mainland China. Young, a permanent resident of Hong
Kong and Canada, dug up information that suggested 75 per cent of high-end Metro
Vancouver homes in one recent year were sold to Mainland Chinese (see below).
Of course Mayor Robertson is not the only B.C. politician who is coy about how migration
and foreign ownership affects Vancouver’s crisis of unaffordability, especially for young
people. I’m not aware of any politician who is being open about it. {Perhaps readers could
inform me if I have missed someone.)
RELATED Vancouver Sun stories:
Hong Kong immigrants streaming out of Canada
Vancouver planner

God help the Fifth Estate if this guy is called an ‘investigative journalist.’ His pieces are factually anorexic. But they support your prejudice, so he must be smart. — Garth

#90 Son of Ponzi on 12.29.13 at 7:24 pm

It this were ancient Greece, they’d probably erect a temple on Mt. Olympus for the great bearded oracle.

#91 Out West on 12.29.13 at 7:25 pm

Garth,
Just a quick note of sincere thanks in your sharing of wisdom and insight over these past few years

You continue to show true leadership in a world that severely lacks it.

#92 Shawn on 12.29.13 at 7:33 pm

CONVERTING TO U.S. DOLLARS

A week or so ago we had some postings here about converting Canadian dolalrs to U.S. and how to lower the exchange cost.

Let’s say this is for purpose of vacation to shop and spend money in the U.S.

One can covert cash at the bank, fee is about 1.7% in addition to the wholesale exchange rate.

You can use your credit card and be charged an extra 2.5% which will be buried in the exchange rate.

What about purchasing a pre-paid U.S. dollar Visa card at a Canadian Bank branch? Can it be done and what would the exchange premium be?

What about having a Canadian U.S. dollar account and getting a debt card on that that can be used in the U.S.? It does not really solve the problem of the exchange fee but at least you don’t need to carry currency across the border. And maybe the exchange fee would be lower when you transfer larger amounts and you are not asking for paper currency?

I am convinced that the banks and credit cards are scooping extravagant fees here. We need a Canadian bank to step and offer something cheaper. If they can make it all electronic it should be far cheaper than 1.7%.

How about a Gold credit card that would apply basically no additional currency fee other than the wholesale rate. That could be a marketing coup.

#93 AB Boxster on 12.29.13 at 7:34 pm

Here’s another perspective on gold:
http://www.bonnerandpartners.com/hold-onto-your-gold/

There’s no denying that Garth is right on many aspects of 2013.
However, perhaps it is akin to winning a battle but not the war.

Greater fool blogs back to 2008 talk about inflated prices for housing, etc.
How many more “This will not end well” do we need to hear.
Yet housing prices have continued to rise since then and likely will continue.

The fundamental issue is not the price of houses or gold or dividends value of REITs. That is looking at the trees but not the forest.

The issue is that of unsustainable debt, that funds government, households, and feeds false economic value to drive business profits, stock market gains, housing bubbles etc.
Debt that cannot ever be repaid, but which drives our economic growth and prosperity today.

Yes, the economy did not tank in 2013.
(Actually, the fact that we can look at this as a positive is fairly telling itself)
But the credit mess that came ‘oh so close’ to destroying the entire global financial system in 2008, is worse today, and little has been done to address the fundamentals that caused it.

Sure, focus on getting that extra 2% yield on your ‘balanced portfolio’ so you can achieve your financial freedom goals.

But don’t forget, much of the growth and prosperity of today, is happening at a tremendous cost through easy credit and government debt,.

That bill that will eventually come due and most likely will likely dwarf the meagre gains of today.
But I guess that’s not worthy of note.

Not when gold has lost 40% of its value in two years. — Garth

#94 father on 12.29.13 at 7:37 pm

I run my own businesses here in vancouver and my friends in the US, that are in retail business say that they have been very profitable for awhile now, the doomers can believe whatever they want but bottom line is when businesses make money they spend on reno’s, hiring employees and investing back in the communities they live in and that is called creating healthy economies.

#95 Finally on 12.29.13 at 7:37 pm

I’m looking forward to your 2014 recommendations. I will try and follow it completely. I hope you’re right on!!!

#96 Son of Ponzi on 12.29.13 at 7:39 pm

Vegans don’t live longer.
They just look older.

#97 Son of Ponzi on 12.29.13 at 7:41 pm

Just hope that in 2014 we go back to bashing the realtors and the house horny property virgins.

#98 Yitzhak Rabin on 12.29.13 at 7:46 pm

Is the date wrong? This sounds like 2007.

#99 not 1st on 12.29.13 at 7:49 pm

Mr. Porter also provided a bonus call: “Someone, somewhere, will call for a Canadian housing market crash, and they will be wrong again, at least in 2014.”

http://business.financialpost.com/2013/12/19/5-easy-predictions-and-a-few-tougher-ones-for-2014/

#100 Ralph Cramdown on 12.29.13 at 7:58 pm

#81 Basil Fawlty — “To suggest that gold is “dead money” you are effectively implying that the Russians, Chinese and Indians are financially challenged, as they continue to purchase gold by the tonne.”

Your plan is to get rich by emulating the behaviour of poor people?

#101 Ralph Cramdown on 12.29.13 at 7:59 pm

Vegans don’t live longer, but because of their diet they can be dead for a few months before they really start to stink; therein lies the confusion.

#102 KommyKim on 12.29.13 at 8:01 pm

RE: #76 not 1st on 12.29.13 at 5:49 pm
But the ETF is actually TSX listed and the fund pays you the dividend, not those companies directly right?

Here’s an example of an ETF (which trades on the TSX) which invests in US dividend stocks (Scroll down to the “Annual Distributions” summary). You’ll see that there are no eligible dividends for the Canadian tax credit listed:
http://ca.ishares.com/product_info/fund/distributions/CUD.htm
Most of it is capital gains and foreign income.

#103 Old Man on 12.29.13 at 8:01 pm

I need a hair cut badly, but just down the street this beauty shop opened up a couple of months ago and would cost me $10.00. So why do I have a home service at $23.00 with this old woman who has a license to serve the public? I had a problem and her son was an IT expert, and she brought me a device for my phone that cannot be bought in any store, and said $5.00. Now will I throw her under the bus to save money; not my style as she is only about 59 years old making money, and what can I say, as she talks her head off cutting my hair in the kitchen, and told her husband that I am safe, and a good guy. Why kill a good person to save a buck?

#104 Kilby on 12.29.13 at 8:10 pm

There’s no inflation, no financial crisis and no reason to own precious metals.
—————————–
Let’s explain that to the Chinese and the Indians, you could goodle stats on gold imports into China and India.
———————————————————————

Doesn’t make them smart…Just super sheeple. Owning physical gold is so BORING unless it is a tiny part of your portfolio.

#105 Freedom First on 12.29.13 at 8:12 pm

Liquidity, Balance, Diversification. Garth, “thank you” for your past/ongoing and wise in depth analysis and guidance on each of those 3 essential Principles used to build and maintain a rock solid financial portfolio.

It is no wonder you receive so many abusive comments regarding your advice, as there is many out there who are trying to fleece the masses for their own selfish financial gain. Of course, there is also the financially ignorant that simply resent your pointing out their own personally destructive financial behavior.

Thankfully, there is many who read your Blog who come to experience a financial awakening, repent, and are saved, and then out of profound gratitude, publicly write you to thank you for your help from saving themselves from a self-induced financial suicide. As an aside, I really don’t think it is Goldman Sachs who is doing God’s work.

I too, also look forward to your coming 2014 foresight.

“Happy New Year!”

#106 Shawn on 12.29.13 at 8:16 pm

Unsustainable Debt?

AB BOXTER says:

Debt that cannot ever be repaid, but which drives our economic growth and prosperity today.

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

To whom is the debt owed?

My understanding is that defaults on most all forms of debt are near record lows.

Yet you buy into the “sound bite” that the debt cannot be repaid. What evidence do you have for that?

I say it can be repaid and my evidence is that fact that it is being repaid everyday on schedule.

#107 Kilby on 12.29.13 at 8:16 pm

#97 Son of Ponzi on 12.29.13 at 7:41 pm
Just hope that in 2014 we go back to bashing the realtors and the house horny property virgins.
———————————————————————

Why?
Can’t contributions here be useful. Bashing realtors has taken this blog over in the last few months. Just don’t buy a house if you think it isn’t right time…..Buyer Beware.

#108 johnny d on 12.29.13 at 8:17 pm

Even here in Saskatchewan, it looks as if house prices have gone up. With that rents have as well. No end in site to this mess. Renting is still a waste of money and about the same cost as paying down an overpriced home or condo here. The moneyless keep buying and driving prices up. To add to that, they’re building income suites as recommended by HGTV and charging up the rear for rent. Renters have no choice but to pay. Time to admit it, there has been a shift in fundamentals when it comes to home ownership. The over-indebted will be redeemed while those holding onto cash or financial assets will have a tougher time putting a nice roof over their heads.

#109 AB Boxster on 12.29.13 at 8:20 pm

Garth – Not when gold has lost 40% of its value in two years.
—————————————-

Yes but gold is up 50% since 2008.
So over the ‘5 year term’ gold is a great investment.
And over the long term its been pretty good as well.
Up over 320% since 2002.

It sucks if you bought in at $1880. But who buys at the high anyway?
Houses, gold or otherwise.

Mostly though gold is a hedge.
If there is another financial crisis, and if it is worse than last time, gold will be king, paper will be worthless.
So having a house that you own (and I mean paid for – hopefully not too much) some land that can feed you, and some gold is not a bad thing.

Sort of like all them unfortunate folks in Ontario who are considering ‘investing’ in a generator.

#110 not 1st on 12.29.13 at 8:21 pm

#86 Casual Observer on 12.29.13 at 7:10 pm

The Canadian iShares ETF XTR holds another ETF in it called iShares US High Yield Bond Idx C$-Hedged.

#111 Rainclouds on 12.29.13 at 8:25 pm

Calgary, has a subdivision called Tuscany ………

Hilarious! Thanks for the chuckle

Here in Palm Desert RE seems to be recovering nicely, new homes popping up and selling. If you compare what you get here VS Van it is gobsmackingly obvious one is askew pricewise.

#112 Chicken little on 12.29.13 at 8:36 pm

Re: Retired Boomer- WI

That is very sad news! I’m sorry to hear that.

#113 D.I.Y. Dodo on 12.29.13 at 8:58 pm

Great blog Garth. Thank you!

First post here. Reserving the above handle. ;)

#114 PJ on 12.29.13 at 8:59 pm

No disrespect to you Garth, but the US economy is a dead end. The Federal Reserve may attempt more tapering in January, but their economy, the markets and their so-called real estate recovery will will start going down as soon as interest rates start going up. Feds will panic and start printing again, and all the Dow Jones junkies will continue to get their fix.

No rerun of 2008… The world fundamentals are twice as bad as it was before the 2008 meltdown. Countries debt levels have doubled.

Start writing After the crash part 2.

#115 Herb on 12.29.13 at 9:12 pm

#64 SM,

no, Garth is no Smoking Man in that respect. His name really is Garth. I met the man and pressed the flesh when he was on Parliament Hill.

#116 sheane wallace on 12.29.13 at 9:18 pm

First world country?
What are you smoking?

First world countries are Germany, Switzerland, Singapore, Sweden, Finland, Norway, Netherlands, even UK.

Have you ever seen any of them?

I would not look upon India and Chine as lesser countries and I am certainly sick of the North American complex of superiority (I cal it the syndrome of the small dick) . Now I can understand US but Canada?
Give me a break.

#117 Jimers on 12.29.13 at 9:24 pm

Government could crash Bitcoin and kill it overnight if they wanted to.

All they have to do is clean up Wall/Bay St. etc.

#118 sheane wallace on 12.29.13 at 9:25 pm

75 Ralph Cramdown on 12.29.13 at 5:45 pm
#66 Mark — Mr. Smart Money forgot to beg the Chinese to help keep the ponzi alive by continuing to lend the “first world” the money we use to buy the items they make.

You can either believe the Chinese government is the wisest in the world because it is accumulating huge amounts of gold when we all know fiat is going to zero, or you can believe that it is the stupidest in the world because it continues to hold even huger amounts of US Treasuries which we all know are going to zero.

Your choice?
——————————
You seem like a smart guy but still refusing to think on your own.

China has US by the balls. Their US bonds are leverage to control US, do you know what would happen if they start selling?

As far as I know Germany is asking for their gold and they are not getting it. I dare you to start calling the Germans stupid.

#119 Cristian on 12.29.13 at 9:29 pm

I’m not going to abuse you, just mildly spank you verbally for being old enough to know that nobody can predict the future but still trying, despite this.
Anyone can make predictions and have about 50% statistical chance of them coming true.

#120 Keith in Calgary on 12.29.13 at 9:44 pm

So what if gold lost 40% of it’s “paper value” in the last two years.

It’s been around for 10,000 years as a store of value…………….and in the same period there have been 1,000’s of paper currencies that have come and gone. I doubt you ‘ll see armed guards standing around a pile of Reichmarks, or early 1900 Russian bonds, somewhere under glass in a museum……but go and look at King Tut’s golden mask while you are in said museum looking for the “FIAT money” exhibit…….LOL !!

Geez…..today’s real estate won’t even last the length of the normal 25 year mortgage as it is made out of shit.

#121 sheane wallace on 12.29.13 at 9:58 pm

gold is rare and as such has value. Roman Gold Aurelius is between 15 k and 20 k USD on eBay. copper roman coin is worth nothing because is not rare. silver denarious are worth something as well.
Platinum ring will ALWAYS be expensive.
It is said: Born with a silver spoon in your mouth.

#122 Casual Observer on 12.29.13 at 9:58 pm

#109 not 1st
“The Canadian iShares ETF XTR holds another ETF in it called iShares US High Yield Bond Idx C$-Hedged.”

The dividend tax credit is for eligible Canadian dividend paying corporations, not high yield bonds.

I’m not sure I understand your point. Could you please explain?

#123 sheane wallace on 12.29.13 at 10:09 pm

#109 not 1st
“The Canadian iShares ETF XTR holds another ETF in it called iShares US High Yield Bond Idx C$-Hedged.”

The dividend tax credit is for eligible Canadian dividend paying corporations, not high yield bonds.

I’m not sure I understand your point. Could you please explain?
———————————-
It means that the dividend income from Canadian ETF that holds US securities is not eligible for ‘Canadian dividends preferable tax treatment’.

While dividend income from Canadian corporations is.

Not to mention that US will tax the Canadian ETF on the dividend received from the US companies.

Taxation of dividends is complicated topic, just look at RDS.A and RDS.B for royal dutch shell and then at the RRSP vs. TFSA/RESP…. tax treatment.

#124 Ogopogo on 12.29.13 at 10:16 pm

Attention everyone, beware liars spreading misinformation. Case in point:

#88 REITs dead money? on 12.27.13 at 4:54 pm

As a side note, Dundee Reit announced their January distribution at $0.1751, which is about 6% lower than their previous distributions of $0.1866. Share price is down about 24% for the year.

This is patently false. Or, to be precise, this anti-REIT propagandist is looking at the US$ equivalent of the December 2013 distribution for D.UN. In any case, the conclusion that this is 6% lower is a bald-faced lie.

Dundee has announced the Dec. distribution at $0.1866 as shown here: http://www.dundeereit.com/pdf/D-Dec-18-2013-Dist.pdf

As D.UN is the only individual REIT that I own, I keep a close eye on it. Come to think of it, I own a tiny piece of Garth’s office space!

As for “REITs dead money?”: fail!

#125 Andrew Woburn on 12.29.13 at 10:52 pm

Muttley O’Toole on 12.29.13 at 5:58 am

I wonder why the U.S. wouldn’t release Germany’s gold?
====================================

Most likely because the gold has been leased out and will take a while to get it all back. Gold leasing is common among central banks as a way of earning some income on an otherwise inert investment. In the US, the Fed loans gold to a designated “bullion bank” such as JP Morgan in return for an interest payment. In a standard gold lease, the bullion bank sells the gold on the market and invests the proceeds in Treasury bonds. The gold has to be returned at some point so the bank buys a futures contract to acquire the gold when needed. The bullion bank typically has paid as little as 1% to the Fed and earned 3-4% on the bonds. This is called the gold carry trade or “money-for nothing” as the song goes. Rates today are presumably a bit lower.

Apparently these gold leases are often rolled over at the end of term, delaying the time at which gold has to be repurchased. If physical gold were to be in short supply and if the bullion bank were carelessly unhedged at the end of a contract, it could theoretically get messy. The prospect makes goldbugs a little foamy but all the gold in the world is a relatively small part of international finance and one would need a vivid imagination to see the Fed foreclosing on JP Morgan. However the rate at which China is vacuuming up gold these days probably makes it tougher to get gold back to the central bank in a hurry without boosting the price. I have no idea if the Fed would have to notify the German central bank before lending out its gold but since one bar is identical to another it may not matter.

#126 AfterTheHouseSold on 12.29.13 at 10:57 pm

Old Man:
#54 Detroit
#62 bargains
#69 light bulbs
#103 hair cut

Some one here recently suggested that your posts are reminiscent of a “Hinterland Who’s Who” (btw 50th anniversary) tv interlude. Always makes me laugh now when I read your posts! Thanks I need that. Regards.

#127 piazzi on 12.29.13 at 11:01 pm

“””I am still a gold believer. Just look at history.

Just look at the chart. — Garth”””

LOL

There is opinion and there is price

price is what one buys and sells and what makes one rich or poor

#128 RayofLight on 12.29.13 at 11:02 pm

We’ve currently have a shade over $40K in each of our TFSAs, and I am very much hoping F follows through with his promise to open the contribution rate to $10K /yr.

#129 REITs dead money on 12.29.13 at 11:08 pm

@124 ogo

Yep I was 100% wrong, apologized in yesterday’s post about my wrong post on the divi, I read a release that reported in US funds.
I’m not a REIT basher, I actually own about a thousand shares of D.un as well as big chunks of other Reits as well.
I’m simply trying to see if any one as any reasoned arguments why they are still good places to park my money now and in the near term.
Perhaps you can tell me why you own d.un and why you will continue to hold given that interest rates are surely going up, which makes me believe that share prices will have to go down.

#130 Bob Rice on 12.29.13 at 11:19 pm

So how much should Cdn. equities make up one’s portfolio? 20%? 25%? 30%?

Keep it around 15%. Astonishingly, 70% of Canadian investors have 100% of their stocks in maples. — Garth

#131 Basil Fawlty on 12.29.13 at 11:24 pm

Per Ralph Cramdown: “Your plan is to get rich by emulating the behaviour of poor people?”

First, forget Rich, think insurance.
Second, calling Putin poor, is really rich.
Finally, it is a small portion of ones portfolio, as savings.

#132 Jon B on 12.29.13 at 11:54 pm

Hey GT. Sorry to hear some visitors are bad mouthing you to the extent the comment can’t be published. I appreciate all your efforts in keeping this blog current and always entertaining. Although I do not always agree with your point of view, I certainly appreciate your writing style and unique perspective.
As one of the original blog dogs I find the comments section like digging through a gold mine; there are a lot of stupid and irrelevant comments (slag) but now and then there are some really enlightening ones (the gold).
Thanks!

#133 Old Man on 12.29.13 at 11:56 pm

#126 AfterTheHouseSold – that is nothing as in my rant room am the wedding planner making arrangements for the big event with cream and her hubby. We are discussing the sit down dinner, and said lets bring in buckets of KFC and call it chicken gourmet as they will never know the difference.

#134 Smoking Man on 12.30.13 at 12:03 am

I have morphed into the character I’ve created, this little man typing the keys to make the legend Smoking Man, afraid of his own shadow a few yesterday’s ago. At 10 pm the family Italian, the one constanty demanding respect who has mob connections,

I bit into his wife’s soul with my scathing, let the world how f-ed the family was.

He showed up at my door to have a few words, me I run to smoking man, my eyes changed from frightened to a shark who has jaws just clamped down on a menstruating elephant.

The Fear in the mafioso surprised eyes was my q to up the level of expressive insanity.

I was willing to take a bullet, and I may get one in the back at place I’m not anticipating it.

But when I calmly told him his well taken care of teeth where about to be shown the floor, he backed off.

I’m now a smoking man. If I live to type more 2014 will be an amazing post season.

I’m now a smoking man

#135 Internal Auditor on 12.30.13 at 12:10 am

@#43 Good decision to pay off student loans. We paid mine off in January and my wife’s were paid a few months later. Sure we could have made greater returns tracking the index and could have therefore paid it off later with less after tax dollars. But I am of the opinion that we should be wise with what we have now because we don’t know what will happen tomorrow. I encourage you to live below your means, get that debt off your back and enjoy not owing a penny to anyone.

We have maintained a “pay the credit card as you spend” policy and it has served us well. We never have any credit card debt beyond a few days. Anyways keep plugging away, it’s an incredible feeling to be debt free.

If you buy a house (we bought recently) then just make sure it’s a home and not a spec purchase. If if meets most of the criteria and still allows you to save + invest then go for it.

PS: Plan on spending anywhere from $5,000-$15,000 on “things” once you buy the house. Stuff always comes up that isn’t expected.

#136 TRON on 12.30.13 at 12:11 am

Garth I’ve followed your blog for 5 years and held off on buying real estate in Vancouver. My New Years resolution is to continue taking your advice on most of what you write about except real estate. It’s not that you don’t know what you’re writing about on the subject, it’s that this market is conflicted with too much emotion to predict it with any accuracy.

I won’t be buying because that ship has sailed but wish I had 5 years ago.

#137 retiremt for yanks in canada on 12.30.13 at 12:26 am

#43 shortymac re using RSPs and TFSA

As a US taxpayer in Canada check with a tax advisor about treatment of TFSA by IRS. Not viewed as retirement plan or something like that hence no preferential tax treatment and possibly worse.

Be sure to investigate. RSPs are fine.

#138 sheane wallace on 12.30.13 at 12:50 am

Andrew Woburn on 12.29.13 at 10:52 pm
Muttley O’Toole on 12.29.13 at 5:58 am

I wonder why the U.S. wouldn’t release Germany’s gold?
====================================

Most likely because the gold has been leased out and will take a while to get it all back. Gold leasing is common among central banks as a way of earning some income on an otherwise inert investment.
—————————————-
It is a way of suppressing the gold prices, google Alan Greenspan’s testaments on the topic.
—————————————
In the US, the Fed loans gold to a designated “bullion bank” such as JP Morgan in return for an interest payment. In a standard gold lease, the bullion bank sells the gold on the market and invests the proceeds in Treasury bonds. The gold has to be returned at some point so the bank buys a futures contract to acquire the gold when needed. The bullion bank typically has paid as little as 1% to the Fed and earned 3-4% on the bonds. This is called the gold carry trade or “money-for nothing” as the song goes. Rates today are presumably a bit lower.
————————————
The above assumes no price appreciation for gold as it brings lower price increase than bonds.
————————————–

Apparently these gold leases are often rolled over at the end of term, delaying the time at which gold has to be repurchased. If physical gold were to be in short supply and if the bullion bank were carelessly unhedged at the end of a contract, it could theoretically get messy. The prospect makes goldbugs a little foamy but all the gold in the world is a relatively small part of international finance and one would need a vivid imagination to see the Fed foreclosing on JP Morgan.
—————————————–
The above is the proverbial short squeeze with the rehypothecation of gold.

Gold used to be 10 % of all financial assets, now is 1%…

—————————————–
However the rate at which China is vacuuming up gold these days probably makes it tougher to get gold back to the central bank in a hurry without boosting the price. I have no idea if the Fed would have to notify the German central bank before lending out its gold but since one bar is identical to another it may not matter.

——————————————-
Why s China buying gold? Are they that stupid?

The problem with the German’s gold is bigger: You can not lease somebody else’s gold without letting them know, they have left the gold for safekeeping with the Fed, I am not aware of any permission to lease it out and certainly Germans are not making money from that lease.

As for the money from nothing: it will reverse at some point, so the carry trade will blow in their face.
——————————————-

#139 James on 12.30.13 at 1:01 am

Wrong. House prices have appreciated at a significantly slower pace than financial assets. Selling real estate and investing was a sound strategy. — Garth

Again you forget that RE is 10x leverage and tax free for primary residence. Even with entry and exit cost you are still up more than financial assets.

#140 TRT on 12.30.13 at 1:12 am

I’ve been bang on correct for 5 years and counting!

Garth said: “…while others (Toronto, Calgary, Van’s saucy bits) bubble away.”

Hmmmm. Concentrated Immigration :) Thank You.

#141 Koolmate on 12.30.13 at 1:24 am

Garth,

Thank you for sharing your wisdom and expertise which, I find very educational. Also thank you, to the bloggers who share there insights.

Wishing you the very best for 2014 and God bless.

#142 Ogopogo on 12.30.13 at 1:26 am

#129 REITs dead money

Fair enough, my apologies for not seeing your retraction at the bottom of yesterday’s thread.

To answer your query, I keep D.UN for cash flow, as a tiny portion of my overall portfolio. As such, I’m really not concerned with share price at all. I’ll be holding my shares for years to come, possibly decades, unless of course the Dundee begins to show signs of incompetent management or excessive leverage. Their diversification in office space across Canada seems to bode well though for long-term stability.

I couldn’t care less about interest rates rising. I’m debt-free, liquid and diversified. If share prices go down, I’ll just keep buying more and averaging down.

#143 Cici on 12.30.13 at 1:32 am

Happy New Year Garth (and family),

Thanks for the not-so-pathetic yet highly entertaining blog, your insights and your hilariously scathing critiques.

This blog is definitely the best read on the net.

And thanks to all the commenters who also contribute so much to its success. But stay out of trouble Smoking Man: I don’t always agree with or understand you, but your cryptic posts are always a fun read!

Good health and balanced, diversified wealth to all in 2014 :-)

#144 ole Doberman on 12.30.13 at 2:41 am

Garth you cant be serious about gold going lower, will you be cueing us when its time to back up the proverbial track?

#145 ole Doberman on 12.30.13 at 2:42 am

Thats truck….

#146 devore on 12.30.13 at 3:36 am

As far as I know Germany is asking for their gold and they are not getting it. I dare you to start calling the Germans stupid.

They let the US hold billions of it for decades. That’s pretty stupid. They didn’t want their gold when “gold was money”, but they want it now?

#147 AB Boxster on 12.30.13 at 3:59 am

# 106 Shawn

Sound Bites?
Your kidding right?

The US currently spends $220 billion dollars on interest to service the debt it owes. By 2020 they will spend over 650 billion on interest alone each year.

Just for interest, no principal repayment.
That’s a whole lot of dollars for interest on debt that mostly goes to Asian holders of American debt.

Its the equivalent of paying minimum monthly balance on your credit card.
Except one difference.
It is now basically impossible for the US to ever pay off the credit card.

And with the interest payment taking up a greater portion of the annual budget, how soon before they will have to:
a) tax away your wealth
b) massively cut social programs (medicare, Social security)
c) massively cut all government services
d) declare bankruptcy (see Detroit)

Much of Europe is in the same boat.
Canada? Better but as the US goes, goes Canada.

#148 live within your means on 12.30.13 at 4:15 am

#12 Just some guy on 12.29.13 at 9:41 am

Hopefully, they will sort out their budgetary woes and their divisive politics but even now, it appears that the Tea Party influence is waning.
…………………..
One can only hope that it will happen in Canada too.

I`m an addict to Garth`s blog, mostly because of his wit. I dare not contribute financial commentary for I would be proven an utter fool. I`m a political junkie but refrain from commenting on articles, etc.

I think we`re in good hands with Garth & his team as our financial `caretakers`.

#149 groovin_123 on 12.30.13 at 6:37 am

Good calls for 2013, and a solid and entertaining read all through the year, so thanks for all you do.

Now class, play attention to the 10year US T-bill yield. Cue inflation for 2014.

#150 Ralph Cramdown on 12.30.13 at 7:32 am

#118 sheane wallace — “China has US by the balls. Their US bonds are leverage to control US, do you know what would happen if they start selling?”

You tell me. But keep in mind that the US is China’s largest single trading partner. Does China want to cause a US recession or crash the US currency, both of which would cause a major slowdown in China? Chinese leadership knows they are in place only as long as living standards keep going up.

Also keep in mind that the US Fed has shown itself willing to buy US debt obligations in enough quantity to keep interest rates where it wants them.

China could exchange its pile of bonds paying 4% for cash paying nothing and slowly deflating. What would it then do with the cash? America won’t let it buy high tech companies, energy companies or sensitive infrastructure… That’s why it bought the bonds in the first place.

#151 Future Expatriate on 12.30.13 at 8:30 am

Ah, THIS one’s a keeper, especially that last paragraph.

Thanks!!

#152 Grantmi on 12.30.13 at 9:42 am

Old Man! Buy an LED bulb you cheap bastard. Last you 50,000 hours

#69 Old Man on 12.29.13 at 5:01 pm

I am no idea where this is going to end up, but apparently as at January 1, 2014 there will be a light bulb ban declared by Caesar. As we all must buy those expensive ones which are poison, expensive, and might not fit my cute light shades anymore. Well, I for one am stocking up with 1000 hour soft white light bulbs 60 watts at shoppers drugmart in 4 packs, as will not be controlled by the machine.

#153 Castaway on 12.30.13 at 10:03 am

#87 timmy on 12.29.13 at 7:21 pm
……… If anyone bought a house a year ago for 500, 000 and sold it for 9.8 percent return, they’d be up by $50 grand.

Have you taken into account your closing costs like legal and bank fees, mortgage insurance, property taxes, maintenance and the 5-7% commission you have to pay to sell. You would need your house to go up by at least 10% just to break even. Most people just ignore those items so they can brag about how much money they made on their home last year. Illusionary gains.

#154 HalifaxEd on 12.30.13 at 10:08 am

#52 quebec economist

“Vegan live longer because meat kills you, That is a FACT.”

Stop it. Meat does not kill (unless it is still alive and coming for you). Humans have been consuming it since we crawled out of the ooze and learned to fish, hunt and trap. Stop spreading baseless propaganda based only on personal preference and not proven by science.

Put a vegan on an island without access to their B-12 supplement pills or “fortified” foods and see how long they last in nature. Animal products are both safe and natural for us to consume.

You want to improve your health? Eat the fats and meats and avoid the cookies, cake, and soda. It’s sugar and refined flour that are harming us, not whole foods such as fruits, nuts, vegetables, and animal products.

#155 The American on 12.30.13 at 10:09 am

At #147: AB Boxer, check your facts. LMAO. You do realize that as astronomical as the debt service may sound, that is the equivalent of $650/year/capita for a U.S. citizen. That’s *very* sustainable. We’re 10 times the size of Canada, so yeah, it’s going to sound like a lot. Also, most American debt is NOT held by Asians (whatever that comment is supposed to mean). Most American debt is held by, eh hem, the U.S. Aslo, “debt deals” will be struck, especially when addressing currency wars and manipulation of currency values. So short sighted and fearful.

#156 eddy on 12.30.13 at 11:17 am

@#69 Old Man on 12.29.13 at 5:01 pm

I am no idea where this is going to end up, but apparently as at January 1, 2014 there will be a light bulb ban declared by Caesar

—-

It will end up with a transfer of your money into other pockets. Did you ask for a smart meter? Of course not, no one did, but we’re all paying for them, now Hydro will need more loans for underground wires, It’s a UN agenda. Soon it will be more tax on Single Family Dwellings because they are resource hogs and the masters of the universe want you in condo the size of a garage

#157 sue on 12.30.13 at 11:49 am

#21
My sister is a vegan and she’s tough to be around. I’m more about meat and veggies, dairy etc (no grains) so this is a clash. Vegans seem self righteous and preachy even though they are constantly eating sweets and vegan cakes, chips etc sigh One vegan posts on her FB pics of her meals etc “why I’ll never get cancer..” LOL Careful honey.

#158 Joe on 12.30.13 at 12:26 pm

No bank failures, but fewer banks. (USA)
The rich get richer.

Remember the old proverb people;
Never write a check you can’t cash.

My prediction 2014 is going to open up a can of global financial whoop ass, for us little people.

Have a great New Year Garth and thanks!

#159 AB Boxster on 12.30.13 at 12:35 pm

#155 The American

Yep.
No debt issues in the good ole USA or Europe or Canada.

Don’t worry, be happy.
It will just work itself out.
After all, its working out well in Detroit, so far.

And these other cities and municipalities:

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/18/detroit-isnt-alone-the-u-s-cities-that-have-gone-bankrupt-in-one-map/

Next?

#160 Agio on 12.30.13 at 12:39 pm

Blase @ 7 Gold is on ‘sale’ at 50% of what? It’s all time record breaking extremely speculative high? Might as well buy silver as well. It’s on ‘sale’ as well-extreme boxing day sale type sale from it’s high. If you have anything left, buy RIM.

#161 Syd Cixel on 12.30.13 at 1:10 pm

The term “vegan” was coined in 1944, by Donald Watson, four years before the Windsor Meat. Co. in Vancouver was founded. During the intervening years, red meat consumption, on a per capita basis, in North America has declined while the number of people practising a vegan diet has increased. (It may be as high as 7% of the population.)

The movement toward a diet that is 100% animal free is small, but growing. Individuals and corporations make critical remarks, such as those on the blackboard, because they fear the public learning about just how dangerous animal products are to human health. Besides, the statistic is wrong. On average, vegans do not live 15 years longer, but 5 1/2 to 11 years longer, depending upon which study one considers.

As of the end of January, I will have been vegan for six years. Two years before that, I switched to a vegetarian diet. The biggest mistake of my life, looking back from the perspective of my mid 50s, is that I did remove animal muscle tissue and secretions from my diet sooner.

Happy New Year, Garth and everyone else!

#162 Quebec is Great on 12.30.13 at 1:12 pm

“Yes. Right after the asteroid attack on Red Deer. — Garth”

:) hehehe

Merry Christmas and Happy New Year Garth! Thank you for the work you do.

#163 Pr on 12.30.13 at 1:16 pm

Merci et joyeuses fetes a votre famille.

M Turner, thanks for this blog and your work here.

#164 Ralph Cramdown on 12.30.13 at 1:38 pm

#159 AB Boxster — “No debt issues in the good ole USA or Europe or Canada. Don’t worry, be happy. It will just work itself out. After all, its working out well in Detroit, so far.”

Aside from the snark about the bankrupt sub-national government, I’m glad to see you’re finally coming around.

Quiz time. What was the best performing asset class in 2013?

Hint: G???? G????????? B????

#165 Canadian Watchdog on 12.30.13 at 1:54 pm

Bubblemaker and chief, Mark Carney is doing a fine damn job at blowing UK's housing bubble. Chart

You see that red futures price line? That's what's driving prices higher — speculation in presale markets.

U.K. Builders to Stop Offering London Homes to Foreigners First

British homebuilders including Barratt Developments Plc (BDEV), Taylor Wimpey Plc (TW/) and Telford Homes Plc (TEF) agreed to stop giving buyers living abroad the first chance to buy London homes sold before they’re built.

Eleven homebuilders said they would offer new homes to U.K. residents and foreigners at the same time, the Home Builders Federation said in an e-mailed statement today. The companies typically pre-sell homes to foreigners to get financing to begin construction.

In case anyone wonders what happens when commodity prices (new SFHs and condos, wheat, copper) build up expectations through forward markets and then decline based on lower expectations, look no further then what happened to gold.

The best way to think about it is a portion of presale prices as a wedge between residential resale prices. If this wedge is ever removed, resale prices will come tumbling down. Thus, the only way to keep it from collapsing is to sell more forward contracts (presales) on margin to any willing buyer. This is exactly why F won't impose any regs on presales (until something happens like Asia's 1997 crash caused by presale speculation), allowing builders to offshore risk to any third world idiot living on this planet.

RE isn't your common mom and pop asset anymore. It's becoming a hyper-speculative market trading on nothing more then paper derivatives. Hence the chart above showing global property analysts now using forward data as a framework to assess RE value.

We're a world of speculators today: where everything and anything, existent or not, can be sold for an agreed price on margin, and serviced at extremely low rates. What can possibly go wrong?

#166 not 1st on 12.30.13 at 2:06 pm

Investing bothers me. In fact I only have 10% of my net worth in equities.

Why does it bother me? because I earn a 20% return on capital in my business only to then go and invest whatever proceeds I have at a 5% dividend. The tax break is nice but expanding my business somehow seems the better choice but there is limits on that as well.

#167 OttawaMike on 12.30.13 at 2:14 pm

The insidious effects of a housing bubble.

Canadians have less to spend on consumer goods thanks to higher consumer prices and our national house fetish:
http://www.huffingtonpost.ca/2013/12/30/canadian-american-spending_n_4519051.html

#168 devore on 12.30.13 at 3:14 pm

#118 sheane wallace

China has US by the balls. Their US bonds are leverage to control US, do you know what would happen if they start selling?

What would happen? Probably the pitchforks come out. Unlike people commenting on the issue, Chinese leaders can think more than one move ahead.

China has nothing. They are between the proverbial rock and a hard place. They know exchanging perpetual interest paying debt for a pile of worthless dollars is a very bad trade to make.

#169 Toronto_CA on 12.30.13 at 3:26 pm

#167 OttawaMike on 12.30.13 at 2:14 pm The insidious effects of a housing bubble.

Canadians have less to spend on consumer goods thanks to higher consumer prices and our national house fetish:
http://www.huffingtonpost.ca/2013/12/30/canadian-american-spending_n_4519051.html
___________________________________

I read that too, and I found that line about us buying less on everything, except housing and booze(!) to be humourous, although I’m not sure purchasing power parity was taken into account enough for this “study”. Obviously we spend more on housing and booze BECAUSE IT IS WAY MORE EXPENSIVE HERE. Although I’m sure we drink more and post recession have higher levels of home ownership.

Income taxes for individuals (as opposed to corporations) are much higher here but health insurance if you’re not covered by a work plan is much higher there (pre-Obama Care anyway). Too many variables.

Our housing is ridiculously over valued, and it sucks that we make less money but have higher priced goods and services (and have higher sales taxes on the higher priced goods) but shittier infrastructure in general–have you driven from Montreal to Burlington, VT and noticed the state of the roads crossing from Quebec to Vermont? It’s disgusting how bad the roads are in much of Canada.

#170 Canadian Watchdog on 12.30.13 at 3:42 pm

#167

"They found that general merchandise stores, like Walmart or Target, are more popular with U.S. consumers than with Canadians."

That's because about 46 million Americans use EBT cards, of which many live in one horse towns with one Walmart that everyone shops from and, we pay higher prices for everyday items. Chart (higher USD = higher price gap ahead)

Anyone who understands that chart knows why deflation is the least likely scenario for Canada, simply because we are and have been a mid-size economy pretending to be as big as our neighbours to the south: or better said, we've been running with a too big for your pants monetary policy, meaning, our dollar and bond rates can easily be whipped around should the bond market or FX vigilantes feel the need to punish Canada with a lower exchange rate if economic growth stalls. And even if that fails, the BoC can act by increasing its QE program.

Investing domestically with deflation in mind is a losing strategy. Canadians are not Americans, so don't go investing like one thinking your cost of living is the same or in decline. If we are, ever to experience real deflation, it is more likely to be caused from a disorderly economic fallout.

#171 Big Brother on 12.30.13 at 3:52 pm

#134 Smoking Man on 12.30.13 at 12:03 am

Don’t worry Smoking Man your brother in law doesn’t know you will be at Seneca on Tuesday! We have not programmed him. Your luck is about to take a turn though. Just remember mafia blood can not be programmed, sleep with one eye open. Hope you like fish.

#172 Garth on 12.30.13 at 3:59 pm

#64 Smoking Man on 12.29.13 at 4:11 pm

Is Garth a real name? Absolutely is Smoking Man Is Chicken farmer absolutely. I digress Smoking Man is a moniker for GET A LIFE !!!!!!!!!

#173 Nemesis on 12.30.13 at 3:59 pm

2013? Well, as they say in HollyWood… “AndScene”… or if you prefer, “It’s a Wrap.”…

Which naturally BegsTheQuestion: Whence 2014?

Amateur FortuneTellers will find everything they need for accurate forecasting embedded within the following Potpourri of journalistic eclectica… Think of it as a JigSaw.

Or as Edward R. Murrow was wont to say, “Good night and GoodLuck.”

OnComplaceny:

http://www.economist.com/news/leaders/21591853-century-there-are-uncomfortable-parallels-era-led-outbreak

OnPower:

http://pando.com/2013/12/29/snowdens-biggest-revelation-we-dont-know-what-power-is-anymore-nor-do-we-care/

OnRealpolitik:

http://dealbook.nytimes.com/2013/12/29/on-defensive-jpmorgan-hired-chinas-elite/?hp&_r=0

OnCulture&ComplexConglomerateSystems:

http://www.bbc.co.uk/blogs/adamcurtis/posts/WHAT-THE-FLUCK

And LastUp… “Trending”:

http://www.commondreams.org/view/2013/12/30-0

http://www.thetyee.ca/News/2013/12/30/Spectators-Disengaged-Youth/

#174 AB Boxser on 12.30.13 at 4:13 pm

#155 The American

Mea culpa on the Asian reference.
Including China and Japan, out of the $17 trillion in US debt, these two countries own only 2.3 trillion.

Problem is that to pay back this debt, every person in the US would need to pay back $56,698.

If you include research which shows that the 17 trillion is the low end based upon some pretty creative gov’t accounting, some estimates suggest the actual debt is from $70 to $200 trillion.
That means each American owes about $233,462, at the low end, to repay debt, not just cover interest.

All debt is fine as long as long as it never gets paid back.

#175 Ronaldo on 12.30.13 at 4:20 pm

Now here is a straight shooter of a financial advisor. As honest as the day is long.

http://www.stupidvideos.com/video/just_plain_stupid/SNL_Global_Century_skit/#20729

#176 S on 12.30.13 at 4:40 pm

Congrats on mostly accurate calls. To be fair though, this blog advocated locking into long term mortgage almost three years ago and those who did lost to the ones who stayed variable. Things seem to be changing just as the locked in mortgages will come up for renewal.
Geopolitical situation will dictate where gold will go. Could be nothing, but as the Economist points out, times resemble 1914. Those raised outside of sleepy Canada, with more acute sense of history, will probably feel a little uneasy.
Anyway, Happy 2014. Much appreciate the blog and the work it must take to maintain it. All the best Garth.

#177 HAM HAM HAM on 12.30.13 at 4:48 pm

Walking through Vancouver International Arrivals is like walking through a advert land. Every advertisement board except one was for a condo development written in english, chinese and korean. No ham money here. Some of the developments are Hong Kong companies that directly advertise to rich Chinese!!!!

#178 Retired Boomer - WI on 12.30.13 at 4:58 pm

Garth it appears the “abuse” you speak about is well underway.

Today gave a nice check to the family that lost their father on Christmas Day. Not that I’m a nice guy, but was the right thing to do for them, it was anonymous by the way just into the fund set up to help out.

Rebalancing time. Sold some stock, and funds, doubled my REIT holdings as well as more short term bonds to balance out that ballooning equity side of the house! Good grief 2013 was a nice year for stocks!!! Will 2014 repeat itself?

No crystal ball, but probably less spectacularly so. One can only hope for a reasonable return to ‘normal’ whatever that might mean in today’s crazy world. All we can do is try our best with what little intelligence we have to display

Time for a cocktail, and its beginning to snow!

#179 Ronaldo on 12.30.13 at 5:05 pm

Three types of investors according to William Bernstein:

“There are two kinds of investors, be they large or small: those who don’t know where the market is headed, and those who don’t know they don’t know.

Then again, there is a third type of investor – the investment professional, who indeed knows that he or she doesn’t know, but whose livelihood depends upon appearing to know. WILLIAM BERNSTEIN “

#180 Shawn on 12.30.13 at 5:17 pm

U.S. Debt

I don’t pretend to really understand national debt.

But I understand the U.S. annual deficit (not debt but annual deficit) is in freefall.

I understand people have fretted about national debts for hundreds of years.

Figures mean nothing out of context.

What does the balance sheet of the Unites States Government look like? What are its assets and liabilities? What is its income? What is its ability to increase income?

If the U.S. debt were considered risky why would other countries invest in its debt at record low interest rates?

If the debt is intended to be rolled over continually, as it has been for many decades what is the relevance of a lack of ability to pay it off immediately?

A Doctor making $400k per year fresh out of medical school may buy a million dollar house with a $900 k mortgage and may have negative net worth. He can’t pay off his debt immediately if asked. Yet he may be in fine shape financially.

A large and successful corporation like CN Rail continually increases its debt and this is expected to continue indefinitely. Yet CN is in great shape.

Beware of jumping to conclusions.

A strategy of refusing to invest based on the notion that the U.S is broke has been an abysmal failure over the last five years.

Will doomers be proven right in the end? Maybe, but I doubt it.

“But I understand the U.S. annual deficit (not debt but annual deficit) is in freefall.” Actually, the US deficit is 51% lower than it was in 2009. — Garth

#181 Renter's Revenge! on 12.30.13 at 5:18 pm

@166 not 1st

Really? Is your business one of the big 5 banks? Is it one of the big 3 telecoms? No? I didn’t think so. Do all small businesses have a 20% ROI? No, lots of them fail every year. Of course equities only pay 5% dividends. It isn’t called a “risk premium” for nothing. Please make your comments more insightful. Pretty please?

#182 Dupcheck on 12.30.13 at 5:32 pm

I don’t know what is worst Fiat or Kia? RE or Gold?

#183 Suede on 12.30.13 at 6:13 pm

Vancouver in a nutshell…

buy for $913,000 or rent for $1840/month

http://beta.realtor.ca/propertyDetails.aspx?PropertyId=13854628#v=d

Side note, if anyone wants a fantastic Manhattan, go see Frankie at BarChef in Toronto. Wow was that ever awesome- just try to get someone to buy it for you! At $45 it’s as pretentious as it comes!

#184 Willy2 on 12.30.13 at 6:26 pm

“America irrefutable in a recovery” ???

– According to John Williams the US never recovered from the crash of 2008. All that “GDP recovery” talk is just that: “talk”.
– When the US is in recovery then why are foreigners reducing their purchases of T-bonds ?
– One G. Turner is warning about the upcoming demographic changes in Canada. But the demographic situation in the US is worse (Source: Harry S. Dent). In other words, how is that going to have a positive economic impact on the US ?

Yes, the US is recovering nicely. Bond sales are rate-related, of course. Canada has far more Boomer per capita than the US. And demographics will play a zero role in the GDP over the next decade. You sure stretched on that one. — Garth

#185 AB Boxster on 12.30.13 at 6:52 pm

Bankruptcy – person or organization declared in law unable to pay outstanding debts – Wikipedia
Debt – is an obligation owed by one party (the debtor) to a second party, the creditor. Wikipedia

There is nothing wrong with some debt, and some kinds of debt.

There are major issues with too much debt.

A doctor making $400k per year with a million dollar house…
If the doctor makes $400k every year but spends 500K and yet can only service the mortgage interest payment, then he is bankrupt.
He is not in fine shape financially.
If the bank did allow this debtor ( see LOC’s) to pay interest only, the doctor pays $50,0000 per year forever and never owns an asset.

CN may always have debt.
If CN holds more debt than it can pay back (through liquidation of all assets + cash on hand, etc.) then it is insolvent.
The debtors will force the company in to bankruptcy so as to get back some of their original investment.

Why do people continue to invest in US debt?
Because the rest of the world is in even worse shape.
And the US has the capacity to print more and more money, (remember the trillion dollar coin).

It is not your income, it is your savings that counts.
It is not your revenue, it is your retained earnings that counts.

Yes, the US annual deficit is lower today than it was in 2009.
That’s like saying that I am doing so much better by only losing 20% on my investments this year, because I lost 50% in 2008.
Huh?

Is it a doomer scenario?
Probably not, but the consequences of not addressing the issue will likely manifest in significant financial and social upheaval.

Only a doomer or America-hater would consider the US deficit going down by 51% since 2009 a negative thing. — Garth

#186 AB Boxster on 12.30.13 at 7:25 pm

Only a doomer or America-hater would consider the US deficit going down by 51% since 2009 a negative thing – Garth

—————————-
Yes Garth, that must make one a doomer, or an America-hater.
Bye bye, buy bonds.

#187 Shortymac on 12.30.13 at 7:32 pm

@135, thanks! I hate debt hanging over my head and I only have credit card debt thanks to immigration and suffering a layoff in 2013.

Luckily I got a new job in Barrie, which greatly opens up my house options when the time comes. Toronto is just way too insane for a young family without Daddy financing your ass.

I’m not a fan of spec house, the plan is to live there for hopefully the rest of our lives. Moreover, I use HGTV shows as a 2 minutes hate so I can feel morally superior.

I am not a fan of granite counter tops or “master suites” that are the size of my old bachelor apt (give me an extra bedroom instead).

To me a house isn’t so much as an “investment” but as a place to live that you can hopefully make some money off of in the long term or recoup the costs. It’s not something to put most of your money into.

#188 Canadian Watchdog on 12.30.13 at 7:32 pm

Actually, the US deficit is 51% lower than it was in 2009. — Garth

LOL. Sure, looks great on the deficit side, until one looks at off-balance sheet liabilities according to some quant over at University of California.

Off-Balance-Sheet Federal Liabilities

The total dollar value of notional off-balance-sheet commitments came to $70 trillion as of 2012, or 6 times the size of the reported on-balance-sheet debt.

Or you can look at right-off-balance sheet liabilities according to by Boston University's Prof. Laurence Kotlikoff, and you come up a staggering $200 trillion dollars (this is correct). In fact, it's so absurd at this point that a brave bunch of politicians, Nobel Laureates, economists, CEO's and other supporters have signed onto The Inform Act to tell the old farts once and for all that America is broke and they ain't getting their pension money unless they're willing to sacrifice their grandchildren's future to pay for it.

The Intergenerational Financial Obligations Reform Act (See endorsements)

It doesn't take a genius to figure it out: Every year that passes by there will be more boomers needing pension payments, social and healthcare services being paid by shrinking contributions from Gen-Y, whose unemployment rate rises while wages stagnate or decline in real terms. On top of that, if yields rise, that's just compounding the debt even faster. That leaves very few options other then to just keep printing or do what is not practically possible and start denying social payments by the masses. War is also an option.

Every other theory of Washington getting its fiscal house in order is just wishful thinking. This is only getting started.

Your pissing and moaning never stops. Shall we compare portfolio returns for the last year? Or three? Or ten? — Garth

#189 Mike T. on 12.30.13 at 8:05 pm

Mr. Turner,

Thank you for curing me of fear-porn.

I am deeply aware of the backwardness of our planet and got caught up in the Alex Jones revolution that will never take place. Your web-blog helps keep me grounded in reality.

Best to you and your family in 2014.

Mike T.

#190 Ronaldo on 12.30.13 at 8:19 pm

Good Lord what next? Bit Coin now being seen as a viable retirement asset. What’s this world coming to. I remember when BreX made up a good portion of pension assets with most of the Financial Institutions in Canada.

http://www.kitco.com/news//2013-12-30/New-Bitcoin-IRA-Offered-by-Broad-Financial.html

#191 Encanto on 12.30.13 at 8:20 pm

I am part of the one percent who read you every post but never have anything clever enough to comment.

But my comment today is Thank you very much for your amazing blog.

#192 Mr Reality on 12.30.13 at 9:00 pm

2013 was the year in which a record number of central banks engaged in quantitive easing and market interventions, of which were a record in size, duration and quantity.

2014 will be the year everyone wakes up and realizes the interventions have done nothing but stoke asset prices and stocks.

2014 will be the year when you realize how bad it truly is to have an integrated global economy where one country can bring the world to its knees. That country is Japan, enjoy the show.

Mr. R.

#193 wallflower on 12.30.13 at 9:14 pm

#169
have you driven from Montreal to Burlington, VT and noticed the state of the roads crossing from Quebec to Vermont? It’s disgusting how bad the roads are in much of Canada.
——–
haha haha
Have you driven across Steeles southbound from 905 into 416? (That’s a high property tax to low property tax drive.)

#194 Ryan on 12.30.13 at 9:43 pm

154 Halifax says,

“Humans have been consuming it since we crawled out of the ooze and learned to fish, hunt and trap. Stop spreading baseless propaganda based only on personal preference and not proven by science”

Please do give us a scientific explanation how humans crawled out of the ooze, or is that just your personal preference?

#195 BullionTastesGood on 12.30.13 at 10:57 pm

Worst post of 2013

Ever

#196 HalifaxEd on 12.31.13 at 9:59 am

#194 Ryan
“Please do give us a scientific explanation how humans crawled out of the ooze, or is that just your personal preference?”

Seriously? The remark was facetious, but based on something called “evolution”. I’m sure the internet or any good science book can help you from this point.

#197 Enthalpy on 12.31.13 at 10:50 am

Thanks for your continued posts. Getting myself to check in here on the regular will most definitely help my future growth!

#198 Willy2 on 12.31.13 at 12:12 pm

Mr. Turner,

Demographics DO play a VERY important role in GDP. GDP equals what people spend. When people retire then their income goes down and they can spend less. Hence lower GDP.

Both americans & canadians have borrowed their ‘brains out” (Source: G. Turner on Howestreet.com) since the year 2000. US citizens are trying to reduce their debts from 2008 up to 2013. That means that the money needed for reducing their debtload can’t be used for something else. Hence a “weak” GDP.

Gold goes up when REAL interest rates are becoming more negative. But since the start of this year REAL interest rates have gone higher (see the US 30 year yield versus the CRB index this year). the CRB index drifted lower but rates went higher.

I said demographics will have no impact on the current US recovery. And it will not. BTW there is no direct correlation between gold and interest rates. Or tides, for that matter. — Garth

#199 triplenet on 12.31.13 at 4:13 pm

I think that house in Detroit you mentioned earlier would be a better buy, notwithstanding they both require substantial completion.
If you’ve never lived on an island before I suggest you visit a few times for a month or so. Each time.
Unless of course it has an airport.

#200 Willy2 on 01.01.14 at 9:24 am

Agree. there’s no relationship between gold & interest rates. But I wasn’t talking about “interest rates”, I was talking about “REAL Interest rates”.

And there’s a difference between interest rates & REAL interest rates (=rates adjusted for inflation).