The swelling

In the last few days bonds have sold off in Canada, the US, Britain and Europe. As prices fall, yields rise. In this nation, the return on a five-year Canada bond is back to where it was in February of 2020. Yes, that’s when we were all still naïve and invincible. Meh.

The US 10-year Treasury returned above 1.5%, which is a big deal. It will be a lot closer to 2% by year’s end, many believe. And consumer prices are going up. Everywhere. For everything. Inflation is a thing, even though central bankers have tried to downplay it as ‘transitory’. Investors aren’t so sure. They want yield, just in case. They also know if prices and wages swell that CBs will respond.

Energy prices are flying higher. Oil flirted with eighty bucks a barrel this week – a huge jump in the past month and a 7-year high. Natgas popped. There are shortages of stuff everywhere. Last weekend I stared at a giant empty shelf in Home Depot where a nice selection of blinds usually lives. “Just forget it,” said the unhelpful saleslady as she walked past in resplendent orange bib vest. “We haven’t had them for a month, and it will be another month. At least.”

“Just look around the store,” she added. And I did. It was a little spooky.

In the UK there’s a gas crisis as fuel shortages cause drivers to queue for miles. There is also a truck operator shortage there. And in Canada, too, where we’re down 18,000 drivers, says the industry. The media’s full of stories about food inflation. Farmers can’t get labour to harvest since immigration quotas have been reduced. Agricultural costs have ramped up.

We know all about housing. Prices are out of control. Toronto just matched Vancouver at $1.1 million for the average property and $1.8 million for a detached ($1.46 mill in the burbs). Rents dropped last year and have roared back. If it were not for politically-motivated pandemic controls, monthlies would be much higher. Now mortgage rates are ticking up. TD started that. Doing a reno? Good luck having new kitchen appliances delivered. A year for a decent stove.

It seems the supply chain remains seriously screwed up. The car guys can’t get chips to build enough new units. The dealership nearby currently has an inventory less than half normal levels. For many models the waiting list is months long. A lack of new cars has pushed used vehicle prices to all-time highs. That’s propelled the cost of rentals to shocking levels. The dominoes are falling.

On Wednesday the central bank in NZ doubled its rate, from a quarter to a half point and said more increases are coming. South Korea and Norway did the same. The US moves in a few months. The reason: inflation. Higher prices in these places flow from the same circumstances as here – rising energy costs, transport issues, housing price escalation and supply chain woes. The CB says it wants mortgages to become more costly, so a 30% year/year real estate surge can be halted. Over in Britain inflation’s at a 13-year high.

So emerging from the virus phase of our lives we face record levels of public and household debt. Rising prices and costs. Stagnant wages. Asset inflation. Real estate stupidity. And government deficits which will result in lower Covid benefits and higher taxes. Financial markets have been watching all of this with many investors vacillating between enthusiasm over what the reopening trade’s doing for equities and fear central bankers got it all wrong.

How to invest in a time of inflation

Of course you won’t know who’s right until it’s over. So the question is simple: how do you protect yourself, your family and your net worth?

Traditionally people have socked cash into commodities to escape the ravages of a declining currency. Gold. Real estate. There are two problems, however. First, gold has done nothing during post-Covid augmented. Investors have shunned it for better-performing assets, and bullion is further eclipsed as interest rates begin to climb. After all, it pays nothing. No interest. No dividends. So if you really want exposure to PMs, get an ETF for the sector or the entire TSX.

As for real estate, the performance has been outsized. But so has the debt associated with it. Money is not so much being created as it is being borrowed from the future. Properties have responded to record-low mortgage rates, but all that is about to change. There’s only one direction for the cost of money to travel, so if CBs hike in the next few years as most economists expect, real estate is highly vulnerable. Of course, if you’re buying it now, the risk is far greater. So invest in a bunch of REITs instead, where debt is less an issue.

And what of safe little havens like guaranteed investment certificates or government bonds? Bad idea. GICs have been losing money since the pandemic arrived and now with inflation topping 4%, the performance is even worse. Bonds fall in value as yields increase, so the fixed-income portion of your portfolio should be light on government issues and combined with some corporate and provincial debt. You still need this shock absorber.

So augment the FI 40% hunk of your accounts with rate reset preferred shares. Not only are they currently throwing off a dividend close to 4%, they come with a dividend tax credit and (best of all) jump in value as interest rates rise. This is more than enough to offset the drag of bonds, while your portfolio’s still shielded from equity market shocks.

And speaking of stocks, you need some. Get exposure in a diversified way through low-cost, high-liquidity ETFs. Remember that most big companies can deal with inflation by passing through higher costs to consumers and clients. Banks do better when rates go up. Commodity and energy companies get immediate pass-through to end users. The tech giants dislike rising rates but the changed consumer habits caused by Covid have baked in growth. Even in an environment of rising inflation, higher bond yields and swelling rates there are compelling reasons to stay invested.

Or, just sell your car. Big bucks.

About the picture: “I wanted to thank you so much for posting the story (September 23) about my Husky, Baylee, and her hip surgeries!” writes Jane. “It resulted in a massive increase in traffic to my Etsy shop and about $700 worth of sales! I am very very grateful – thank you!  I am also immensely enjoying your blog – as a writer, I must say, it must be a tremendous amount of work to write so frequently.  MANY thanks again – the response to this has been incredibly heart-warming and I am thrilled.”

164 comments ↓

#1 Woke up this morning... on 10.06.21 at 2:16 pm

Kindness is free.

Be kind to each other on here.
No name calling, come on!

Greed, pride and wrath? What’s in it for you?

#2 TurnerNation on 10.06.21 at 2:19 pm

For Dolce. Fact: First one offered is the best one we were told. Astra Z was nixed.

.Slovenia temporarily suspends use of Johnson & Johnson COVID vaccine (euronews.com)

.Denmark pauses use of Moderna COVID vaccine for people under 18 years (www.reuters.com)

.Sweden pauses use of Moderna COVID vaccine for younger age groups (reuters.com)

———
— UBI Watch: My guess is 2022. Would they later push the country over the edge, into a reset?
Just watch them. This WW3 is not meant to be won.

.Federal government pressed to extend COVID-19 benefits for small businesses (globalnews.ca)

** Question to the all the economists in this comment section. What happens to price level of goods when governments keep printing money/credit?
And wait till the next Karbon Tax kicks in. This is the destruction of the Middle Class. Hence the forced layoffs coming.

But you knew this – take everything out globalist rulers tell us and flip it 180 degrees, to make sense.
“Minister of Middle Class Prosperity”? I don’t think so. They are just mocking us.

….
— Control over travel/movements – main goal of this WW3. Oh you got jabbed to travel? Think again.

.Australia banning foreign tourists until at least 2022(fox5ny.com)

#3 wallflower on 10.06.21 at 2:21 pm

#127 Inadequate on 10.05.21 at 11:06 pm
Now, the new twist is that he was informed that the vaccination had “reduced” the seriousness of the symptoms. Oh really? I see.
= = = = = = = = =
This is not a new twist. The vaccine ALWAYS offered nothing more than high resistance to serious illness – mostly, avoid hospitalization. That is all!
Everybody knows this. Where have you been?
Vaxers can still carry and spread the virus.

What is wrong with people today that they cannot assimilate basic facts?

#4 Steveston on 10.06.21 at 2:30 pm

I did not think there were shortages until I went into Cdn Tire looking for some caulk. Something that is hard to ask for delicately to the staff there. Out of both types of caulk I wanted there and at Home Depot.

#5 Shawn Allen on 10.06.21 at 2:37 pm

The Shortage

The various shortages and their persistence are surprising to me…

They give rise to a few thoughts about the real economy:

At any given time there is only so much capacity in a country and in the world to produce goods and services. In the very short term production is hard or impossible to ramp up in many areas. Once all the willing workers are employed there are no more. Prices can increase instantly but production in many sectors can’t be ramped up instantly. Perhaps this is what is happening.

Capital investment is always and forever the key to added capacity to produce goods and services. But there is a trade off. If more workers and factories are busy creating new capital (factories, software, machinery) they can’t be used for production and current consumption. Possibly the temporary goods shortage is actually caused by ramped up capital investments?

Debt is always owed to someone. It nets out to zero for the earth as a whole.

Everything produced in this world has been fully paid for by someone at the moment of its creation. Be it the worker or the factory owner. It is impossible for the earth as a whole to borrow money from the future. A given country however can indebt its future generations to another country or to lenders within that country.

We can also harm the future by depleting resources and spoiling the environment. For the most part though each generation bequeaths vast amounts of improvements to the next generation.

#6 Dolce Vita on 10.06.21 at 2:39 pm

For once blame the:

VAX.

Wildly successful at protecting people from evil Covid. Thus, people buying again, producers had scaled back thinking perpetual lockdowns…expect supply chain problems to persist.

Globally integrated economies cannot be kick started in just a few days. This may last for months, maybe even a year. But it will come back as it was. The plants and supply chains are still there. The people need to be induced to come back to them.

It will happen. Patience a virtue.

Immediate gratification for once, will just have to wait (awhile).

——————-

Good recommendations Garth. Already switched and switching over to high yield ETFs and smidgen of fun, danger money high yield ETNs*.

* Don’t care what Investopedia says about them. They are backed by nothing and are a side bet about how something in Mr. Market will do. That’s a DERIVATIVE if every there was one. They can COVER CALL it all they want, they’re doing that with my money.

Dress them up with Coupons instead of Dividends, Notes instead of paper that says otherwise.

Lipstick on a pig.

Still going to try a couple out, low $, for the pure exhilaration of watching a part of my threadbare portofolio potentially evaporate into the Ether.

But collecting the +20% monthly dividends in the meantime…sweet (says he with his last gasp of air).

#7 Ian on 10.06.21 at 2:40 pm

Sold a 2016 vehicle for 30% more than I was offered 2 yrs ago. Unloaded a 2014 motorcycle for 20% off MSRP and I rode it for 7 seasons. Can’t believe the demand. Happy to cash in. Lots of toys will be for sale summer of 2023!

#8 All of this happened on 10.06.21 at 2:43 pm

DELETED

#9 Abc123 on 10.06.21 at 2:43 pm

As per usual good advice .

Also as per usual real estate wins in the environment we are in ( and seems any environment period )hands down.

#10 sailedaway on 10.06.21 at 2:45 pm

#2 TurnerNation on 10.06.21 at 2:19 pm

Still haven’t found a hobby I see. Sad.

#11 Faron on 10.06.21 at 2:47 pm

#182 crowdedelevatorfartz on 10.06.21 at 1:52 pm
@#156 Faron
“Stay out of it.”

…fan club of …….one

I was waiting for a special occasion to tell you this. Hoping, just maybe, we could meet up in Duncan for $1.46 gas and dinner at the Dog House. But, it just can’t wait. I LOVE YOU TOO MAAANNN!

#12 crowdedelevatorfartz on 10.06.21 at 2:49 pm

“Bullying kills. Please stop.”

+++

I think the Theater in Stratford is looking for a drama queen.

You should audition

#13 SoggyShorts on 10.06.21 at 2:52 pm

#165 Nonplused on 10.06.21 at 11:04 am
#65 SoggyShorts on 10.05.21 at 5:33 pm
#50 Nonplused on 10.05.21 at 4:32 pm
#19 Dave on 10.05.21 at 3:16 pm

It’s simple. Biden and the Left MSM are promoting getting vaxxed.

Trump tells his supports almost constantly that Biden and the Fake News (Left MSM) are not to be trusted.

Mostly he is referring to the “stolen” election, but his supporters absolutely do not make that distinction.

Also, he has Yuge influence on other Republican leaders and could make them speak up for the vaccine instead of denouncing the “Fauci ouchie”.
His buddies at Fox News too.

If you honestly can’t see that Trump could have done more you’re not paying attention.

#14 Millennial 1%er on 10.06.21 at 2:55 pm

Not only do I get taxed at 50%, i also lose 4% of my spending potential every year due to inflation

At least my crypto poppin

#15 mike from mtl on 10.06.21 at 2:56 pm

Dunno if the bond market really wakes up to the reality that inflation is getting out of control there’s not a convenient place to hide.

Ultra short is not much better than a GIC, Short still will get whacked resulting in cash-like breakevens.

If the Fed/BoC actually get serious and start hiking overnight rates.. closer to 1.0% stonks will tank as always.

First let’s see just cancelling CERB and the like without the real economy imploding. Everything is still high on the fumes of printing press.

#16 Faron on 10.06.21 at 2:56 pm

#167 Dr V on 10.06.21 at 11:14 am
Markets up yesterday, down again today

Look again. This bouncing between levels has been an extremely profitable past four days. Dealer positioning effects coming back online to support the market. Everyone is scared. Keep your eyes peeled.

#17 Bankrupting Landlords is good for the Economy on 10.06.21 at 3:01 pm

Wouldn’t higher inflation trigger another recession and thus lower rates?

#18 Dirty Dan on 10.06.21 at 3:02 pm

> if you’re buying it now, the risk is far greater. So invest in a bunch of REITs instead, where debt is less an issue.

I thought REITs were punished when rates rise. You’re saying REITs are going to go up?

#19 Dolce Vita on 10.06.21 at 3:05 pm

Energy costs in Europe soaring, Italia too.

Electricity +29.8%, Natural Gas +14.4%.

https://i.imgur.com/Qw14wOq.png

Inflation here holding firm at about 2% still the worst Italia has seen since 2013 (+2.2% then):

https://i.imgur.com/9B1m0ts.png

The nat gas is manageable. I cook every day and my 2 month bill total is €15. So 14.4% did not hurt (Grazie Vladimir).

Was stung by electricity. It went from €130/month (A/C blasting away full time) to €190…Somebody Gonna Get Hurt Real Bad – me.

—————–

No gasoline, diesel shortages in Italia. UK, that’s their own making with Brexit…enjoy Inghilterra (they also kicked out a lot EU truck drivers by virtue of making it difficult for them to transport to them…now they are giving them working visa’s etc.).

Pretty much destroys the reason for Brexit in the first place if you ask me but hey, their country, do as they please I say.

#20 alexinvestor on 10.06.21 at 3:09 pm

Weird how central banks think that raising interest rates will deal with the inflation stemming from supply chains, rising energy costs and transport issues. Maybe they want people just to consume less … I hear China is cutting electricity now.

#21 Woke up this morning... on 10.06.21 at 3:14 pm

#6 Dolce Vita

Let’s get back to consuming like crazy Dolce!

I need to go the mall, and to buy more crap and more stuff, and new car, and threads, and more and more and more!

Don’t you know the best thing in life are free? And usually all you get to keep is the memories.

Now, get a new watch so you know when to drive your new car in your new clothes to your old cubicle.

#22 Dolce Vita on 10.06.21 at 3:25 pm

Off topic Garth if you will let me.

Been meaning to say to any of you wanting to travel to France or Italy this year and worried about the Green Card…you should not have to.

A few weeks back friends from the US arrived in France with a paper CDC Vax card (fully immunized) and the French accepted it and issued them an Electronic Green Card they downloaded to their Smartphones.

In Italia, the French electronic Green Card was accepted no problemo wherever we went. A couple of seconds swipe/verify and they were good to go. Me as well with my Italian version (e.g., to see the Last Super at Santa Maria delle Grazie in Milano, indoor restaurants, Frecciarossa high speed trains, etc.).

Since the Green Card in Canada is a dog’s breakfast x 10 + 3 of differing requirements, ensure it is accepted in France and Italia before you leave. To be super safe get a PCR test no later than 72 hrs before flying to France or Italia.

Here is the email Gov Canada in Italia uses to send me info – ask them, don’t mention me:

[email protected]

and just in case:

[email protected]

or

+1 613 996 8885 (call collect where available)

#23 Emma Zaun - GreaterFool Unpaid Intern #007 on 10.06.21 at 3:26 pm

In spite of all these rising costs, Garth and the CUPE Amazons have partnered on this blog to provide free COVID-19 vaccines for all deplorables starting today.

TurnerNation, we realize you may feel your deep-state conspiracy theories are better justified if we could also insert some microchips into your vaccine:

Unfortunately, as Garth has noted, chips are in short supply and very expensive right now.

But – we have found a supply of usable microchips from manufacturers of discontinued sex toys, and we will be happy to put these in your vaccine dose as required.

(Please stay away from SailAway and crowdedelevatorfartz after getting your dose in case anything weird happens)

Emma Zaun – Shop Steward
CUPE (Canadian Union of Peelers and Exhibitionists)

#24 I’m stupid on 10.06.21 at 3:28 pm

#7 Ian

You think the prices are stupid for used cars and motorcycles? Look at commercial vehicles, the prices foe Vans and pickup trucks are insane. 3 year old trucks are selling for more than new because getting a new one will take a year or more. I’m not even talking retail either, dealers are paying more for used on some vehicles than new ones and they’re being shipped right to the USA.

I have no words for what’s happening on Main Street but it’s bizarro world.

#25 Nonplused on 10.06.21 at 3:31 pm

#7 Ian on 10.06.21 at 2:40 pm

“Sold a 2016 vehicle for 30% more than I was offered 2 yrs ago. Unloaded a 2014 motorcycle for 20% off MSRP and I rode it for 7 seasons. Can’t believe the demand. Happy to cash in. Lots of toys will be for sale summer of 2023!”

“Or, just sell your car. Big bucks.”

————————————-

I’ve been snooping around the market and am seeing similar things. 10 year old dirt bikes are being listed for 50% of the MSRP of a new one. Of course you can’t walk in to a dealer and buy a new one, you put a deposit down, so there is the immediate availability factor. But still, a 10 year old dirt bike should be worth close to zero. Maybe 10-20% of new.

Boats are doing similar crazy things, with 20 year old boats trading at $10,000 and up. Nuts. The engine should be worth zero and the tub on a boat that old not much.

But I’m not selling my car. Too hard to get a new one.

I am not sure there is any fire sale coming in 2023 though. The lost production will not easily be recovered. The thing is, you can shut a plant down taking production from x-many units a day to zero easy enough. But then that is x-many times days units that don’t get built. The time can never be recovered. Ramping up production from x to 2x units per day is darn near impossible. Thus, it could be years before the auto, appliance, motorcycle, boat, RV, sporting equipment, what-have-you dealers are fully stocked again.

Thus I say: “Buy all the things.”

————————————

Another trend that is a sign of the times is the rise in catalytic converter thefts. It was always a problem, but it seems to be an epidemic now. The thieves like trucks and SUV’s best because they can just crawl under there with a cordless saw and have the thing out in a few minutes. And in keeping with the economics of crime, if they damage other parts of the vehicle they just don’t care. Heard of one guy they cut his frame to get at the cat and the truck got written off.

So ya, if you don’t want to sell whatever it is you’ve got, chances are if you wait a bit somebody will steal it.

—————————————-

“Transitory inflation” is like my rear end; I just can’t see it. Know what else goes up when used car prices go up? Insurance. It now costs more to write the wrecks off. Know what else goes up when catalytic converters won’t stay put? Insurance.

I think we’ve got an inflation coming like we haven’t seen since the ’70’s. And no matter what they do with rates, prices are not never coming down. They may be able to stop the 4-8% year/year increases, but prices will not then retreat. Prices are sticky. They don’t want to go up, but once they do they don’t come back down. Not to the starting point, anyway.

And then throw in all the new government spending, which means that some way or another you have more money chasing the same amount of goods and services, and we’re in for a double whammy. Demand up and supply down.

Buy all the things. Including stocks in companies that have good productive assets. But also get yourself a new motorcycle while you are at it. And a car if you can. And a fridge. I’d say also a Play Station 5, but you could never get those and now it is darn near impossible.

#26 Dolce Vita on 10.06.21 at 3:38 pm

#2 TN

For Dolce. Fact: First one offered is the best one we were told. Astra Z was nixed.

——————

I’m 2 dose AZ vaxd. So is most of the UK. No problems here, there. They restricted it in Italia to +50 yr olds right away. UK everyone got it.

Touch wood so far, no evil Delta in me.

As usual, histrionic USA (all the way) found fault it in AZ. Nothing you do or take medically is 100% safe, fact of life and that Mother Nature if she wants to smite you, she will find a way.

Sweden you have to understand last year in essence euthanized their elderly in Care Homes for lack of oxygen diverted to hospitals instead due to shortages – they gave the elderly Morphine whilst dying. Understandably a little gun shy there using anything medical without being sure.

J&J you should know Canada threw out a few million doses due to QA/QC problems with their vax.

Oddly, USA good with J&J. Go figure.

The others I don’t know for certain but more than likely some SNAFU that happened last year with Govs over reacting this year so as not to repeat past errors.

– FWIW

#27 Mike on 10.06.21 at 3:39 pm

Seriously. Cash in your wallet pays no dividend or interest income. Your principal residence pays no dividend or interest income. Gold = capital gains or capital loss (cg or cl). Principal residence = cg or cl. Cash in wallet= cg or cl (foreign currencies exchange).

#28 Nonplused on 10.06.21 at 3:46 pm

This also will be inflationary:

https://mishtalk.com/economics/bofa-raises-minimum-wage-to-21-wage-push-inflation-will-kill-small-businesses

————————————–

And what about the “infrastructure” spending? Using US examples here but I am sure Trudeau is planning his own version, just a little bit more woke of course.

So if they poor $3.5 trillion into new roads to nowhere, where will the workers come from to build them. Are they currently all on the dole? Or do they have to bid them away from whatever it is they are doing?

And what about all the equipment? They’ll need hoes, dozers, graders, pavers, trucks (lots of trucks), cranes, all sorts of things. Do they have a bunch of equipment just sitting around? Or do we have to wait for it to be built? Inflationary.

Of course we’ll need a lot more asphalt and concrete too. And steel. Always steel. Always inflationary.

Buy all the things.

#29 Do we have all the facts on 10.06.21 at 3:58 pm

Gas price in the morning $1.23. Gas price in the afternoon $1.39. What mysterious force caused a 13% price increase in four hours.

Consumers are being exploited every day while our Federal government clings to the script that short term inflation will pass.

I can hardly wait until wage based inflation kicks in to hear the response of government spin doctors.

One casualty of Covid 19 is the Truth. With the exception of Rex Murphy the Fifth Estate have become lapdogs and opposition parties have morphed into blatant opportunists.

When I was 21 I thought George Orwell had a very negative perspective on our future. At 74 I seem to be living in a ‘Doublethink’ reality and am feeling more and more like Winston Smith with each passing day.

Maybe I should go to Tofino for a holiday.

#30 Dolce Vita on 10.06.21 at 4:07 pm

#21 Woke up this morning…

Well, I’m retired, have everything I want and no buying stuff etc. needed nor a cubicle or car (you don’t need one in Italia, planes, trains and public transit are excellent here). And walking good.

Italia is an open air museum, art gallery and it’s ALL FREE. Even tickets to Musei Vaticani, L’Accademia, Uffizi, Palazzo Pitti, Pompeii, Ercolano, Guggenheim in Venezia, etc., etc., are reasonable in price.

UN World Heritage says 70% of the Worlds most significant art in all of human history is in Italia. 40% of that is in Firenze. A lot of it you can just walk by at no cost.

You get to walk the same streets as the Medici did, Ancient Greeks in Old Napoli, Caliphates and Carthaginians in Sicilia, etc.

All free.

I mean what would the Louvre be without the Mona Lisa (and Titian masterpieces adjacent to it which almost all ignore or across the hallway and up a few meters more Da Vinci’s that again, they all walk by – THE don’t know sh!t from clay crowd but think they do…fools).

Without Italia the Louvre is a big hollow space with not much to see. Edmonton has a glass pyramid FFS, so much for big deal Louvre without the Italians (and Greeks).

———————

I moved here for FAMILIA. Free. All about love. Is there anything better than that?

And like Garth, I shop locally to help keep local merchants afloat instead of Amazon.it.

#31 45north on 10.06.21 at 4:09 pm

Energy prices are flying higher. Oil flirted with eighty bucks a barrel this week – a huge jump in the past month and a 7-year high. Natural gas popped.

Peak oil is real. Canada should invest in its own oil and gas to ensure its own supply. Second priority is the US. Liquified natural gas is a waste. A quarter of the energy is used to liquify the gas.

#32 april on 10.06.21 at 4:11 pm

Regarding Canadian RE, homes have been in decline since last May. Ross Kay @ Howestreet. The focus was Toronto this week. CRA has been totally “manipulating the buying public, politicians, the press, bankers, and economic teams”. forever it seems.

Van sales are also down but what have we been told by the media, realtors,banks, ??? What a fraudulent industry and they have been allowed to get away with it while the public pays the price but something is coming to a head about now….. hold your horses everyone.

#33 Leftover on 10.06.21 at 4:20 pm

Everything in this post relates to demand, which has been stoked for years but recently it’s been off the chart. This is a progressive’s dream; print money, make people happy (get votes).

But now the much maligned supply-side is getting attention. Even a left-hander like Ezra Klein gets it:

https://www.nytimes.com/2021/09/19/opinion/supply-side-progressivism.html

There’s only one sure-fire way to quell demand – raise rates.

#34 TS on 10.06.21 at 4:21 pm

You are right about selling your car. I bought a 2007 FJ Cruiser back in 2017 for $9500. Just sold it having put another 80000km on it for $18000. Messed up when you make a 100% return on a used car.

#35 Shawn Allen on 10.06.21 at 4:22 pm

Stop Saying a House Pays No Dividend

#27 Mike on 10.06.21 at 3:39 pm

Seriously. Cash in your wallet pays no dividend or interest income. Your principal residence pays no dividend or interest income. Gold = capital gains or capital loss (cg or cl). Principal residence = cg or cl. Cash in wallet= cg or cl (foreign currencies exchange).

**********************************
A principle residence pays a very valuable dividend indeed. It’s a place to live. And it’s more than the value of avoided rent.

Imagine your house is paid for. Except in very rare circumstances you can never be kicked out. Your property tax is not that high really.

Look at the dividend a single family house in particular paid in 2020. It provided a place to work for many. Imagine trying to work at home with kids in a tiny apartment. Years earlier the house provided stability in terms of where my kids went to school and which sports teams they were allowed to join and stability in their friends and our friends.

Can anyone who has owned a house really claim it pays no dividends? As far as capital gains or losses on my house that is all but meaningless to me. I did not happen to win the million dollar house lottery so who cares?

A principle residence pays huge dividends and that’s a good part of the reason people strive so hard to have one.

I don’t care to be homeless or to look for an apartment. Garth will disparage me but I have stayed put for 26 years now while also doing significant travel. Sure it also costs me a lot for the house in terms of renovations and insurance and property tax and utilities. But not enough to make me even consider renting.

#36 Elon Fanboy on 10.06.21 at 4:25 pm

#22 Dolce Vita

My daughter is doing Interrail Europe in November. She applied online for her EU Green card providing her BC vax proof, and amazingly got her online green card issued within an hour of applying. Very efficient.

Meanwhile we have no coordinated system across Canada. What a fustercluck.

In other news I just ordered the new IPhone 13Pro. A month long wait for delivery.

Oh the humanity!

#37 Shawn Allen on 10.06.21 at 4:26 pm

What is a luxury Home?

Sotherbys on BNN just said the luxury home category in Canada starts at $4 million. $1 millions gets a dumpy shack in much of Toronto and Vancouver I guess.

Indeed $10 million is the new $1 million. Those of us not yet worth $10 million have not “made it” yet. At least not financially although we may have in many other ways. And oops the goal posts are receding off in the distance for most.

#38 JSS on 10.06.21 at 4:31 pm

May i have a wage increase please?

#39 Faron on 10.06.21 at 4:31 pm

#30 Dolce Vita on 10.06.21 at 4:07 pm

Some of my most fond lifetime memories are from a summer trip to Italy that ranged from Sardegna to Certosa AKA Karthaus to Verona with just a day in Venice (hard left off the bridge into town and saw few people getting utterly lost). There was a girl, cappuccinos, surf, mountains and medieval streets. Next time I’ll see the south.

#40 OK, Doomer on 10.06.21 at 4:37 pm

This all reminds me of the Jimmy Carter era. I was wheeling and dealing cars in high school and making good money. Inflation was everywhere.

Luckily my parents were from the Depression era. They understood the value of living within your means and we lived just fine by behaving ourselves. Pay cash. Don’t borrow money to go on holidays. You know; common sense stuff.

Debt ended up being the real killer. When the Fed pushed interest rates went to 20%. Yes, TWENTY PER CENT. That’s what it took to finally bring inflation under control. And Jingle Mail was born as people walked away from their houses.

And yet here we are again. As a society we learned nothing. We elected Trudeau the Elder to wreck the economy for us during the Jimmy Carter years and now we have Trudeau the Younger to do it again during the Joe Biden years.

History may not repeat but the rhyming is all human nature sing song.

#41 AntMan on 10.06.21 at 4:41 pm

“Banks do better when rates go up.” -Mr. Turner

Will they do better when their tax bill jumps 30%?

#42 crowdedelevatorfartz on 10.06.21 at 4:44 pm

The Thucydides Trap gets ever tighter

https://www.reuters.com/world/asia-pacific/taiwan-says-us-commitment-is-rock-solid-after-biden-remark-chinas-xi-2021-10-06/

https://www.theguardian.com/world/2021/oct/06/biden-says-he-and-chinas-xi-have-agreed-to-abide-by-taiwan-agreement

#43 Honest Realtor on 10.06.21 at 4:52 pm

#35 Shawn Allen on 10.06.21 at 4:22 pm
Stop Saying a House Pays No Dividend

**********************************
A principle residence pays a very valuable dividend indeed. It’s a place to live. And it’s more than the value of avoided rent.

Imagine your house is paid for. Except in very rare circumstances you can never be kicked out. Your property tax is not that high really.

Look at the dividend a single family house in particular paid in 2020. It provided a place to work for many. Imagine trying to work at home with kids in a tiny apartment. Years earlier the house provided stability in terms of where my kids went to school and which sports teams they were allowed to join and stability in their friends and our friends.

Can anyone who has owned a house really claim it pays no dividends? As far as capital gains or losses on my house that is all but meaningless to me. I did not happen to win the million dollar house lottery so who cares?

A principle residence pays huge dividends and that’s a good part of the reason people strive so hard to have one.

I don’t care to be homeless or to look for an apartment. Garth will disparage me but I have stayed put for 26 years now while also doing significant travel. Sure it also costs me a lot for the house in terms of renovations and insurance and property tax and utilities. But not enough to make me even consider renting.

__________________________________

Very wise words, indeed.

Add to this the likely 3-4X increase in property valuations by 2035, and it will make Shawn’s thesis resonate even more:

“A principle residence pays huge dividends and that’s a good part of the reason people strive so hard to have one.”

I hope everyone can be part of this next boom cycle. few other investments will even come close.

#44 Woke up this morning... on 10.06.21 at 4:53 pm

#30 Dolce Vita

Lovely.

Amazing how little is needed.

Amazing how people with the most are never happy.

Consider how those with the most want more and more and more, and their appetite is never satisfied. Then they create Epstein for themselves, because…well, not enough.

Be warned people.

That is the path when your happiness is satisfied by money and things. When enough is not a word you use.
When you can’t find happiness from a walk and smelling a flower and seeing a bird.

You want the devil? I give you money.
You want his instrument? Greed.

Corny…but true.

Remember what Jeff Bezos wraps himself with, what Walmart wraps themselves with : “We’re doing it for the consumer.”

Yes…for you. The slave labour is just something you should overlook so you can continue to consume your useless ocean poisoning disposable but limited edition stuff.

#45 KLNR on 10.06.21 at 4:56 pm

@#30 Dolce Vita on 10.06.21 at 4:07 pm
#21 Woke up this morning…

Well, I’m retired, have everything I want and no buying stuff etc. needed nor a cubicle or car (you don’t need one in Italia, planes, trains and public transit are excellent here). And walking good.

Italia is an open air museum, art gallery and it’s ALL FREE. Even tickets to Musei Vaticani, L’Accademia, Uffizi, Palazzo Pitti, Pompeii, Ercolano, Guggenheim in Venezia, etc., etc., are reasonable in price.

UN World Heritage says 70% of the Worlds most significant art in all of human history is in Italia. 40% of that is in Firenze. A lot of it you can just walk by at no cost.

You get to walk the same streets as the Medici did, Ancient Greeks in Old Napoli, Caliphates and Carthaginians in Sicilia, etc.

All free.

I mean what would the Louvre be without the Mona Lisa (and Titian masterpieces adjacent to it which almost all ignore or across the hallway and up a few meters more Da Vinci’s that again, they all walk by – THE don’t know sh!t from clay crowd but think they do…fools).

Without Italia the Louvre is a big hollow space with not much to see. Edmonton has a glass pyramid FFS, so much for big deal Louvre without the Italians (and Greeks).

while the Louvre is an incredible museum with some amazing artifacts the Pompidou is much, much better imo. Also Paris is just an amazing city in general.

#46 SoggyShorts on 10.06.21 at 5:04 pm

#38 JSS on 10.06.21 at 4:31 pm
May i have a wage increase please?
*************
That depends.
♦Does your employer charge more now?
♦Did your employer’s (non-labor) costs go up?

If the company that you work for isn’t making more profit today than it was yesterday, how can it pay more for labour?

If the company is making more profit, is that because you have become better at your duties? Are you at least partially responsible for the increased profit margin?

#47 Linda on 10.06.21 at 5:06 pm

Shortages should pass eventually, but being unable to get the stuff one wants – or needs – isn’t something we privileged North Americans are used to. I’ve seen headlines regarding suppliers being unable to get the usual swag for the upcoming holiday season. There is a strong expectation that food costs will continue to increase & yes, shortages there too. Sadly, the drought conditions prevailing on the western half of North America are having an impact on the food chain. A lot of crops were turned into animal fodder. Hopefully the anticipated La Nina will send some much needed moisture our way. 2022 will be very scary if we don’t get some soon.

#48 J Lim on 10.06.21 at 5:06 pm

By the end of November, everyone who got vaccinated january thru may will be as good unvaccinated (falling antibody levels) so what then? (Re fed’s announcement today on mandatory vaccination for fed employees and travel on planes and trains). Mandatory boosters? A pandemic of the vaccinated?

And why is a negative test not acceptable? Where is “follow the science”? On this point?

And, there is no such things, philosophically or legally as a “freedom to be safe”

Anti-vaxers are selfish, cowardly, or most likely both. – Garth

#49 fishman on 10.06.21 at 5:07 pm

Garth asks the rhetorical question, How do you protect yourself? His advise on investing is correct. Nothing to add. But you have to make the cash first. Here’s a couple of rules from a hunter/gatherer all his life. For you younger bloggie doggies.
1/ Identify where the money is first. Then figure out how to get some of it. The corollary:
never work for somebody that has no money.
2/ Where & when money is being made creates a black hole. The bigger the money, the more the gravitation pull of all escaping info. Timely information to get in on the action will not come to you. Your close when you smell lies & glimpse those loading trying to deflect you.
3/ Stick around people that are making money where you want a piece of that action like flies to sh*t.
4/ Start off doing exactly what the best do. Don’t change anything for at least a half dozen years. When you do start exercising your prerogative it is imperative that you only change one thing at a time .

#50 Dolce Vita on 10.06.21 at 5:07 pm

#36 Elon Fanboy

Too funny and good for the daughter! And so you should be a fan of Elon, 2 large hedge funds impaled upon his altar.

#39 Faron

Nice to read Faron (at least you didn’t commandeer a gondola like idiot Americans do). Good on you.

Keep it down about the South, tell no one about below. It’s a jewel that few know about or travel (Mafia scared). If I were you I would travel South from Rome and do these must sees – you can do it all by train even the cross over from Villa San Giovanni to Messina:

– Napoli + Amalfi Coast + islands of Capri, Ischia and Procida
– Pompeii, Ercolano, Paestum
– Tropea, Scilla (latter as in Homer’s Scilla and Charybdis [Messina])
– Hop East to Puglia* do the entire heel starting at Taranto, all of it, stunning rocky beaches/towns all the way and while there end up at Bari and go see nearby Alberobello, Altamura and Sassi di Matera (in Basilicata, closest to Taranto).
– In Sicilia must sees: Siracusa, Ragusa (where Ricotta comes from), Taormina (& Mt. Etna), Cefalù, Is of Lipari [+500 BC Olympics there] & Stromboli, Palermo, Agrigento & Scala dei Turchi, Trapani & Is. of Favignana, Marsala (like the drink and have Scaloppine alla Marsala, to die for). Also try Arancini in Catania and Palermo for a snack and you cannot miss their Cassata Siciliana, delicious. When hot, have Granita…it’s the best thirst quencher ever and the Siciliani excel at it.

And I have just scratched the surface of what mine eyes have seen in the South let alone the North.

This Italia is amazing, it really, really is.

* Foodie Tip:

THE best olive oil comes from Puglia, the heel of Italia. All of us Italians know that. Look for Bari on the label if trying to buy in Canada. Also, THE best tomatoes come from Puglia as well, sweet, not acidic. Any Italian will tell you that. DO NOT be deceived by Toscana and their “San Marzano” canned tomatoes. They cannot hold a candle to those from Puglia. Also, tomatoes/olive oil from Calabria and Sicilia…the farther South, the better the canned tomatoes, oil. it’s their Sun and their Soil.

Pizza in Napoli cannot be duplicated in Canada even if you can find Caputo Flour. It’s their water as well. They will tell you that if you ask. Oh ya, have their Sfogliatelle for breakfast with espresso, delicious (best place is a 5 min walk from Napoli Centrale called “Attanasio”, for a quick high have Rum Babà as well.

#51 JUYL on 10.06.21 at 5:09 pm

Re fed mandatory orders announce,ent today – govt trying de facto where legal basis difficult…cancel Christmas basically

Are we still under emergency regime? sAskatchewan seems to be

#52 Linda on 10.06.21 at 5:15 pm

#35 ‘Shawn’ – the cost of maintaining a house once paid for is definitely no more than annual average rent would be. So yes, I’d say great dividends especially under the current circumstances. Have to say am very glad we had gotten a lot of work done on our house prior to Covid coming along – can’t imagine how much more we’d have had to pay always presuming we could even get the supplies in the first place.

Classic flaw is ascribing no value to equity. If invested it would likely provide substantial income. Abrogating that is most definitely a cost to be included in any calculation. – Garth

#53 TurnerNation on 10.06.21 at 5:19 pm

#23 Emma Zaun let me present just the facts and science in Kanada. Buddy of mine got two Astra. Now it’s banned here and in Europe. (Where his family is).
He has lost rights to travel. Charter was barter.

Now buddy will have to layer up with a 3rd, or 3rd and 4th. Once the boosters come let’s make it 5-6.

I will be tracking his progress…a facinating study no?
I love science.
——————–
——————–

– Welcome to your packed, fetid, UN Smart City. This is being repeated country-wide.
Your hint was that during the Economic Lockdowns new condo construction never was halted.

https://www.blogto.com/real-estate-toronto/2021/10/toronto-neighbourhood-filled-condos-doesnt-want-any-more
“Residents of a Toronto neighbourhood that’s already filled with condos say they don’t want any more of them to be built in the area.
Liberty Village is expected to get three now 30-storey condo towers, along with the introduction of a new street called Liberty New Street, running between Dufferin and Strachan.

Members of the Facebook group called Liberty Village Residents Association were angered by the news of the development proposal.
“Where are the schools, parks, libraries, enough condos in LV, this is ridiculous!” said resident Zeynep Ozgoren. “

#54 Dogman01 on 10.06.21 at 5:25 pm

Based on the odd delay and some signalling, I speculate our PM may actually approve Huawei.

https://biv.com/article/2021/10/huawei-sponsored-event-draws-flag-waving-bc-politicians

https://nationalpost.com/news/world/huawei-must-seek-high-nose-foreign-talent-from-canada-and-elsewhere-company-founder-says-after-cfos-release

Consequences: As this article states, once we find ourselves displeasing Beijing, our Infrastructure will fail inexplicably.
https://calgaryherald.com/opinion/columnists/corbella-if-trudeau-allows-huawei-into-canadas-5g-network-all-38-million-canadians-could-be-held-hostage

Canadians -just wait for it, as “You get the government you deserve.”

#55 sszk on 10.06.21 at 5:26 pm

DELETED (Anti-vax)

#56 pPrasseur on 10.06.21 at 5:40 pm

Inflation could become very quickly a serious problem and this country in certainly in on of the worst position to face it be cause of the massive amount of debt cumulated by governments and households.

Inflation can choke an economy rather efficiently and can only be fought by high interest rates.

The dichotomy between Canada and the US has been building for year and soon or later will lead to a lot of problem in this country.

Small economy wanna be independent? Fine but in this case better the straight and narrow… We sure have not.

#57 Leichendiener on 10.06.21 at 5:45 pm

Record gasoline prices expected for Toronto tonight. Wait until you see your natural gas bill! Uppa, uppa, uppa. The great reset has begun.

#58 SST on 10.06.21 at 5:48 pm

10 offers in the past 2 months on real estate in the Vancouver east end area. Lost out on every house to a no subject, cash offer. The demographic of people at these viewings are 25-35yr olds with parents in hand or 70+ geezers using the washrooms midway through the showings (literally). Either these people have won the lottery in their careers or the 6/49, or it’s a mass amount of borrowed money buying their way into borrowing more money. If not, where is this money coming from?

My wife and I have an easy 20% and the finances wouldn’t rob more than 35% of our monthly, even incomes that far exceed the requirements are not enough.
So to think if you just made $150k, $200k, even $250k that would get you into the market, think again! Maybe if my mother forked over 200k of her equity without a sniff her way of repaying it, could I then pay $150k over asking for a house that is unliveable.

And to add the the equation, we have viewed upwards of 150 houses, of which I would say 25% are as advertised. Most boast claims of community and foliage around the house but disregard quite literally the 4” lean in the living room from a cracked foundation or my favourite, photos from 5yrs ago before the living room was turned into 3 bedrooms to house a puppy mill of students.

As much as I blame blatant greed from people wanting to sit on a couchand collect slumlord sheckles, you cannot disregard the realtors who make gravel lot used car salespeople look honest. It’s a sad time in Canada these days. Morale is down year over year but at least the housing market is for the few

#59 UCC on 10.06.21 at 5:57 pm

#41 AntMan on 10.06.21 at 4:41 pm

“Banks do better when rates go up.” -Mr. Turner

Will they do better when their tax bill jumps 30%?

Yup. Will not affect the bank. You will be paying the tax bill. There is only one taxpayer.

#60 Reximus on 10.06.21 at 6:01 pm

so there’s a new approved anti-malaria vaccine.

i’m guessing there will be a million new facebook accounts created by mosquitoes any day now…

#61 Quintilian on 10.06.21 at 6:03 pm

“ They also know if prices and wages swell that CBs will respond.”

Yes, they will respond with a threat to “keep an eye on things”

But no action.

Unless governments, particularly the US, go into high gear with trillions of fiscal expenditures resulting in double digit inflation.

Central banks are helpless old wizards hiding behind the curtain.

CB’s have created so much excess money, there is simply too much of it to create higher yields. They need to buy back the bonds and reduce the money supply.

It shall remain cheap for a long time, or until inflation soaks it up.

#62 Reximus on 10.06.21 at 6:15 pm

#57 Leichendiener

I just filled up our volvo wagon for 80$ today; two months ago that would only be $70!!! my word, where oh where will i find that extra 10$???

i guess i’ll have to buy 1 less beer at the ski hill this winter

#63 Dave on 10.06.21 at 6:24 pm

If there is a war in the east and oil prices jump to $150 in a short period of time.

Inflation would sky rocket…would BOC hike interest rates in a few months?

#64 Faron on 10.06.21 at 6:25 pm

#46 SoggyShorts on 10.06.21 at 5:04 pm

That depends.
♦Does your employer charge more now?
♦Did your employer’s (non-labor) costs go up?

You are forgetting that labour is it’s own market in which employers tap into a pool of labour at whatever cost the market will bear. If an employer can’t find workers at a given wage, they have no choice but to seek alternatives that may include supporting a higher wage regardless of where the worker is located.

For a long time now, labour has been on the wrong side of the supply/demand see-saw. This has finally changed in the new times and gives labour needed leverage to finally ask for enough to live by and hopefully increases that exceed inflation. The

But, higher labour prices will cause more inflation some will say. “Muh $60 pizza, muh $10 coffee.” True to a limited extent, and not at nearly the same rate because labour is only a percentage of overhead. Regardless, wages have failed to keep up with inflation as it is (because of the skewed labour supply/demand situation which is a product of a variety of forces) so, at worst, inflation and wage rises will chase each other to zero sum. They won’t though.

#65 Trojan House on 10.06.21 at 6:30 pm

DELETED

#66 Is anybody home? on 10.06.21 at 6:34 pm

When oil was $120 a barrel the price of gas was $1.37 a litre. It’s now $80 a barrel and gas is $1.37 a litre. Thanks Liberals!
Remember when the Canadian dollar went up with the oil price? It’s not tracking it now Liberals!

Wake up Canada!

#67 Faron on 10.06.21 at 6:39 pm

#50 Dolce Vita on 10.06.21 at 5:07 pm

Thanks DV. Inspiring.

#36 Elon Fanboy

EF: I would also love to see efficient rail here in Canada. Some friends who lived in Zurich described their ski trips:

1) Walk to train ~5mins
2) Ride train to resort (can’t recall, maybe 30mins?)
3) Ski face off
4) drink face off
5) ride train home
6) walk home and done.

No packing the car, no pain, no parking, cheap as heck, can get drunk etc. etc. There’s no question that such is a superior lifestyle.

Canada is chained to its historical and ongoing investment/commitment to O+G and the ongoing multi $Billion subsidies of that industry. Maybe more importantly, the population density isn’t great and in BC the topography is challenging (the Alps fit into BC many times over). That can be overcome with gov’t initiative, but given O+G subsidization and the heavy O+G lobby, that ain’t happening. Definitely not under Trudeau or to the right of him.

Too bad, because the skiing in interior BC is GOOD and will last a few more decades at least.

#68 Penny Henny on 10.06.21 at 6:45 pm

#32 april on 10.06.21 at 4:11 pm
Regarding Canadian RE, homes have been in decline since last May. Ross Kay @ Howestreet. The focus was Toronto this week. CRA has been totally “manipulating the buying public, politicians, the press, bankers, and economic teams”. forever it seems.

Van sales are also down but what have we been told by the media, realtors,banks, ??? What a fraudulent industry and they have been allowed to get away with it while the public pays the price but something is coming to a head about now….. hold your horses everyone.
////////////////

Hey, Victoria Real Estate Update is back (VREU)

#69 NEVER GIVE UP on 10.06.21 at 6:47 pm

UPDATE on my ostracization of local media.
Global news, CBC news, and the CTV news.
I don’t watch any of it any more.

I am free!

Free from the social engineering of these news outlets.
I am convinced they are all in tandem doing work for the Government.

I have simply changed to watching movies and You Tube video and I do not have any more of the anger I felt when I watched evening news.

My wife and I both agreed that tacitly I as a Caucasian male was being blamed for many of the recent events and those that occurred in the distant past.

My life is as efficient as usual, I haven’t missed anything. So I now deem local news as….Useless!

#70 Faron on 10.06.21 at 6:47 pm

#16 Faron on 10.06.21 at 2:56 pm
#167 Dr V on 10.06.21 at 11:14 am

Markets up yesterday, down again today

Regarding what I wrote earlier about the “range” there’s a saying:

“Fool me once, shame on you, fool me twice shame on me”

There’s no continuation for three and four times. S&P has traded in this range for the better part of 5 days. It is extremely unlikely to stay there tomorrow. Combine that with the net expansive effect of the markets and the odds are that things start to grind higher.

#71 Nonplused on 10.06.21 at 6:47 pm

Where it is likely going:

https://www.aier.org/article/theyre-coming-for-you/

#72 Trojan House on 10.06.21 at 6:50 pm

#161 Sara on 10.06.21 at 10:41 am

RE: bullying

Interesting. Sounds exactly what is happening to people not getting the vaccine.

#73 Steve French on 10.06.21 at 6:51 pm

#4 Steveston on 10.06.21 at 2:30 pm

So you went to Canadian Tire “looking for some caulk”?

…I said.. pardon….

#74 Nonplused on 10.06.21 at 6:56 pm

Why Trudeau, nor anyone else, can fix things:

“Out of every hundred new ideas ninety-nine or more will probably be inferior to the traditional responses which they propose to replace. No one man, however brilliant or well-informed, can come in one lifetime to such fullness of understanding as to safely judge and dismiss the customs or institutions of his society, for those are the wisdom of generations after centuries of experiment in the laboratory of history.”

– Will Durant.

#75 Kiril Peev on 10.06.21 at 7:00 pm

DELETED (Anti-vax)

#76 Sail Away on 10.06.21 at 7:05 pm

Our housing journey:

We sold our Alaska home in 2006 for $150k profit, moved to Nanaimo and bought our current home for $350k cash on the barrelhead. Needed lots of elbow grease over the years, but we love it.

In 2009, a family member in Shaughnessy needed to move to a care home, so we purchased her home for $900k, with $300k down and the remaining $600k paid as available with interest. Paid off in 7 years by living lean. We created 6 bedrooms for the Olympics and cleared $40k, then rented it out as a whole until 2018 and after that used it for work, kids’ housing during school, and extended family vacations. No more renting. Sold August 2020 for $2.3M. Still paying care home at $11k/mo, so the final plus/minus may not be known for a while. Unless Tapestry bullies her, of course, since I understand that kills.

RE speculation worked for us. We love our place and wouldn’t dream of selling to change location. Probably the best place in Canada. Exponentially better than living in Shaughnessy (sorry Meng).

#77 Re:SST on 10.06.21 at 7:06 pm

You either have to flee Vancouver or wait for the market timing of a slow down. Or just keep throwing in bids hoping one sticks.

Brain drain has been happening in this area for awhile. You can’t even recruit executives to the area unless they are allowed to work remote and live elsewhere.

2009, 2010 was the last opening that I remember in Vancouver area and up until 2016 for the rest of the province.

I viewed well over 400 homes, but only made 5 offers. Reason being is because I have such a high standard of what I think is quality and I had to learn the game myself.

99.99% of the stuff on the market for a reasonable price is garbage. Comes with majors problems, which is a major headache.

Out of the 4 offers I made, 3 were accepted and only two were finalized (at different times) as per my quality standard.

In Vancouver, I sacrificed too much. The first place I got was garbage, but it was the best that I could do at the time. It was 500k in the 2009 dip and I negotiated it down by 70k including a home inspection after someone else backed out of the deal and the seller was desperate to close so he could close on a another property waiting in the wings. Now the place would go for 1.2M not updated and in worse condition than when I had it. It also cause me some health problems and renos just were not worth it. Never again. And definitely not for 1.2M.

The housing costs in Vancouver make it the worst place on earth unless you are well over in affording that 2M threshold at present. You need about a 10 million dollar net worth to be playing at these levels comfortably.

Everyone else if faking it and house poor is real. Yes, you need a place and stability, but unless you are very wealthy, time to load up the Uhaul and leave the area.

I have seen it all, but a well built detached in a prime location and neighbourhood is ideal. Get something built within the last 15 years. Negotiate a good home inspection. Again, this is virtually impossible in Vancouver.

It will cost you 2.2M or more in Metro Van for a decent pad, but if you have about a 10 million net worth with CEO pay, there are some good pockets to settle in and life will be good in Van.

I love Van and the climate and the great work opportunities, but after 20 years as a late mill early gen x, I cashed out like the boomers who were leading the way. Netted myself about 300 with a much better quality house.

Victoria and Kelowna was a good move, but that is even off the table now. The whole province is a rip off and inland locations are hit with the wild fire season, which sucks.

But if you like the West Coast and can afford Vancouver entry level, consider Victoria or Kelowna where Vancouver entry level prices will get you a custom newer built home in a nice neighbourhood – a step down from Van – but a better quality of life in my opinion.

And if you go beyond BC like to the Atlantic region, you can pretty much live like a king if bringing Vancouver money with you.

I don’t ever see a return to affordable living in BC for new entrants and I think entire country might be that way in 10 more years.

#78 yvr_lurker on 10.06.21 at 7:09 pm

#71 Nonplused
Where it is likely going:

https://www.aier.org/article/theyre-coming-for-you/

————
Skimmed the article, and with all the fear-mongering (linking capital gains on financial investments to the notion that homeowners would soon be coughing up 7K per year in unrealized housing gains) I fully suspected it was from the Hoover Institute. However, from wikipedia the AIER is even more on the fringe:

“The American Institute for Economic Research (AIER) is a LIBERTARIAN think tank located in Great Barrington, Massachusetts. ”

LIBERTARIAN says it all…..need to file this article where the sun does not shine…. 90% bluster, 10% insightful.

It was founded in 1933 by Edward C. Harwood, an economist and investment advisor.

#79 $200 Dollar Oil Contacts on 10.06.21 at 7:23 pm

Oil is going to sky rocket to an unimaginable level and the Central Banks will move faster that a viper to counteract it.

Big time rate hikes – social disorder.

The Canadian housing market and the entire debt strapped population will be collateral damage.

When has Garth ever wrote about empty shelves? This is playing out in real time.

#80 Jake on 10.06.21 at 7:26 pm

Inflation and supply chain issues has even impacted my weekly outing…

https://www.cbc.ca/news/business/tight-market-for-chicken-wings-1.6155083

#81 NEVER GIVE UP on 10.06.21 at 7:29 pm

#58 SST on 10.06.21 at 5:48 pm

10 offers in the past 2 months on real estate in the Vancouver east end area. Lost out on every house to a no subject, cash offer.
=================================

I don’t know how we did it but we got a place. 4 acres in Langley with a magnificent home and a second rental home. One year ago.

The market is so sick right now. We were offered $2.5 mil 3 months after paying 1.8. We don’t want to move anyway. Now the neighbors are asking roughly 3.5 for a comparable.

Still we are not moving. Not for a long time.
Even if our mortgage rates rise we are still much better off than the 7k we were paying in rent in the past.

#82 Dr V on 10.06.21 at 7:35 pm

67 Faron

“Maybe more importantly, the population density isn’t great and in BC the topography is challenging (the Alps fit into BC many times over).”

Actually, the countries of France, Italy and Austria fit into BC. With a combined population of 134M, it might feel a little crowded to some. I’m sure railways would be much more viable though.

But we do have to give a good portion of BC back to the previous “owners” first.

#83 protea on 10.06.21 at 7:44 pm

Garth thankyou for the advice a few months ago on rate reset preferreds in view of the pending inflation. Took your advice and purchased the ZPR below .Very happy with the decision at this time. As inflation is in full sweep at at this time.

ZPR – BMO Laddered Preferred Share Index ETF

#84 Shawn Allen on 10.06.21 at 8:03 pm

#38 JSS on 10.06.21 at 4:31 pm

May i have a wage increase please?

************************
You don’t need one. You already wore out two sweaters this year rubbing your tummy over various dividend increases. And many more to come. But, yeah, most workers will get higher wages.

#85 Shawn Allen on 10.06.21 at 8:15 pm

A home pays Dividends

#52 Linda on 10.06.21 at 5:15 pm
#35 ‘Shawn’ – the cost of maintaining a house once paid for is definitely no more than annual average rent would be. So yes, I’d say great dividends especially under the current circumstances. Have to say am very glad we had gotten a lot of work done on our house prior to Covid coming along – can’t imagine how much more we’d have had to pay always presuming we could even get the supplies in the first place.

Classic flaw is ascribing no value to equity. If invested it would likely provide substantial income. Abrogating that is most definitely a cost to be included in any calculation. – Garth

**************************
Okay, maybe fair enough as I did not mention the opportunity cost of investing the equity. I was responding to the crazy idea that a house pays no dividend. It has both a big cost and a big dividends.

Most people (or at least a lot) would have to sell and rent to extract the equity they gained while owning a home and giving up a home and all the dividends it pays and the stability in life it provides is just not on for many of us. To each his own. I go for balance. Home plus investments worth more than home. Why do just one of those?

Or extract some equity with a tax-deductible LOC and invest. Then your house is truly paying dividends, and not just the fuzzy emotional ones you espouse. – Garth

#86 neo on 10.06.21 at 8:20 pm

Garth,

So you are slowly coming around to my thesis of 70’s style stagflation I see…..

#87 Faron on 10.06.21 at 8:29 pm

#76 Sail Away on 10.06.21 at 7:05 pm

…Unless Tapestry bullies her, of course, since I understand that kills…

Amazing! Like, seriously, LOL. And from the master of self control, no less.

The comments section had a good few hours of peace and… you juuuust caaaan’t resist the insults and snipes, can you? Duly noted in ye olde tome I call “The Official Compendium of Sail Away Nitwittery Vol. 4”. Not to be confused with “The Official Compendium of Pale Grey Knittery” that is a practical handbook on somber sweaters, socks and toques that I did not write but find helpful.

Carry on.

#88 Faron on 10.06.21 at 8:36 pm

#82 Dr V on 10.06.21 at 7:35 pm

Pretty sure many of the previous owners would prefer rails to pipelines given that it would mean ability to move without need for a car and the need for the pipelines would be diminished.

Not that a rail line will ever be established here, but imagine this place with greater access for locals:

https://goo.gl/maps/1P66eVSh85cWAfiU6

350 km by gravel to the nearest town. Beautiful, but a BRUTAL place to live. Again, imagine what better transport would do for these communities.

#89 Pollster1 on 10.06.21 at 8:40 pm

DELETED (Anti-vax)

#90 SoggyShorts on 10.06.21 at 8:50 pm

#64 Faron on 10.06.21 at 6:25 pm
#46 SoggyShorts on 10.06.21 at 5:04 pm

That depends.
♦Does your employer charge more now?
♦Did your employer’s (non-labor) costs go up?


You are forgetting that labour is it’s own market in which employers tap into a pool of labour at whatever cost the market will bear. If an employer can’t find workers at a given wage, they have no choice but to seek alternatives that may include supporting a higher wage regardless of where the worker is located.

******************
You are forgetting that most companies have a small, often razor-thin profit margin and if labor (30% of costs) were to go up ~10% without an equal increases inprices they’d be in the red.

I was part of a group of small business owners who had everything from a bakery to a custom furniture store to party rentals and the standard was about
30% materials
30% overhead (rent etc)
30% labor
10% profit

So just a few points here and there or a slow couple of weeks meant a negative month.

So more realistically that “alternative” that employers choose will be automation(the baker), cutting hours(the furniture guy), or shutting down(my construction outfit& the party rentals)

#91 Nonplused on 10.06.21 at 9:02 pm

I think you should read the article again because it seems you missed the point, which is that taxes on unrealized capital gains are not workable. Oh and the point that the rich do pay their taxes.

#92 Nonplused on 10.06.21 at 9:02 pm

Whoops that was for #78 yvr_lurker on 10.06.21 at 7:09 pm

#93 Shawn Allen on 10.06.21 at 9:12 pm

Fuzzy emotional trumps money

Or extract some equity with a tax-deductible LOC and invest. Then your house is truly paying dividends, and not just the fuzzy emotional ones you espouse. – Garth

*************************************
That’s an okay strategy for some people. Even if you got a net 5% on that strategy (doubtful) the notion of getting $5k on $100k debt, does not appeal to me. Max I could get is probably $300k LOC and having $300k in debt in return for an extra $15k (and more likely more like $7.5k) does not appeal to me in the least. If markets happen to go down the full $300k in debt would still be there. I’ve been debt free for close to two decades and planning to stay that way. Buying a house in 1995 it was eminently feasible to pay it off in eight years.

What is the purpose of money other than to ultimately get fuzzy emotional dividends such as the sheer joy of contemplating your pile each day?

I value my fuzzy emotional dividends greatly. I got no use for a few grand more courtesy of going into debt.

You preach balance first and foremast and I am there. My investments will grow sufficiently with no need for debt and the stress it brings.

To each his own my friend, to each his own.

Finally, just admit that I am right.

#94 tbone on 10.06.21 at 9:15 pm

Talking to an owner of a fair size hvac company today.
He says a major manufacturer of commercial hvac equipment is 6 months delivery for new orders .

Another manufacturer told him his in house orders of several thousand dollars was going to go up 25 % . I told him If they accepted his purchase orders , his lawyer will straighten them out and they will back off.

Also replacement components are long lead times. Not good going into cold months without heat .

Yes there are going to be definite shortages of product
until the manufacturers can play catch up.

#95 Doug t on 10.06.21 at 9:18 pm

#81 never give up

YOU PAID 7k IN RENT ? Who the heck would do that and why? good lord it baffles the mind what people do with their money

#96 Doug t on 10.06.21 at 9:20 pm

#79

It’s on like donkey Kong

#97 Woke up this morning... on 10.06.21 at 9:22 pm

DELETED

#98 Woke up this morning... on 10.06.21 at 9:32 pm

#97 Woke up this morning…

Garth, that is a professional comedian stand up act. His name is Mark Britten and he goes by stage name The Chinaman. He was part of Just for Laughs a while back. His caulking bit is a smash hit. It was aired over standard TV repeatedly without any bleeps because he talks about caulk.

It’s also brilliant comedy. Most laughs come at someone’s expense. Only the smartest bits raise above that effectively delivering laughs and making fun of no one.

Anyhow, perhaps you enjoyed it, and that’s enough.

Bathroom humour. Are you 13? – Garth

#99 Grandma Sue on 10.06.21 at 9:34 pm

My son has 20+ years in federal gov’t. Works from home (IT) with an approved telework agreement. Even when he was in the office pre-covid he was “remote”. Now he faces medical tyranny or losing his job. What am I missing here that he poses a health risk to anyone under these circumstances? Or is this about punishing non compliance? What country are we even in?

Easy choice. Get vaccinated. – Garth

#100 facts on 10.06.21 at 9:35 pm

DELETED (Anti-vax)

#101 Dogman01 on 10.06.21 at 9:37 pm

#74 Nonplused on 10.06.21 at 6:56 pm

“Out of every hundred new ideas ninety-nine or more will probably be inferior to the traditional responses which they propose to replace. No one man, however brilliant or well-informed, can come in one lifetime to such fullness of understanding as to safely judge and dismiss the customs or institutions of his society, for those are the wisdom of generations after centuries of experiment in the laboratory of history.” – Will Durant.

——————————————

Systems are so complicated and intertwined the ramifications of changes are difficult to contemplate. The Public is disconnected from just about everything. Farming, mineral extraction, transportation, logging, fishing, infrastructure- all the industries that keep the nation going are mostly un acknowledged by the people who depend on them most.

Just look at the complete mess we may be in with $200 Oil, Climate change is “chaff in the wind” when you are in -30C.

“Utopian ideals are not only compatible with callousness about actual human lives, they sometimes demand it — the main thing is to maintain one’s own moral purity.” – Matthew Crawford

“hatred of dissenters from its utopian ideology in the guise of helping and healing.” ― Rod Dreher

“The fact that I have no panacea for the world’s ills is no reason why I should accept yours. It merely increases the likelihood that yours is a fake.” – Henry Louis Mencken

“Do not remove a fence until you know why it was put up in the first place.”

#102 Faron on 10.06.21 at 9:41 pm

#90 SoggyShorts on 10.06.21 at 8:50 pm

Sorry for using the overly sharp “you are forgetting…”. Disrespectful.

Makes sense. Improving efficiency can be an escape valve. You are also making my point that higher wages means higher prices/inflation but less than the shrill folks who talk about things costing double (the $60 pizza). No, things go up by 3% to offset the labour cost.

But, the cost of labour is set by a market mostly external to the business just as the cost of materials is. This is precisely why there are countless stories of businesses needing to raise wages to get any interest. If the market rate for labour that you can’t do without goes up you will pay more.

#103 willworkforpickles on 10.06.21 at 9:50 pm

After the mid 2020’s real estate is going to become the worst investment man ever made in this country having done so in the early 20’s.

#104 Sail Away on 10.06.21 at 9:54 pm

#87 Faron on 10.06.21 at 8:29 pm
#76 Sail Away on 10.06.21 at 7:05 pm

…Unless Tapestry bullies her, of course, since I understand that kills…

———-

Amazing! Like, seriously, LOL. And from the master of self control, no less.

The comments section had a good few hours of peace and… you juuuust caaaan’t resist the insults and snipes, can you? Duly noted in ye olde tome I call “The Official Compendium of Sail Away Nitwittery Vol. 4”. Not to be confused with “The Official Compendium of Pale Grey Knittery” that is a practical handbook on somber sweaters, socks and toques that I did not write but find helpful.

Carry on.

———-

Sorry, Foron.

#105 Ponzius Pilatus on 10.06.21 at 10:18 pm

#30 dolce

UN World Heritage says 70% of the Worlds most significant art in all of human history is in Italia. 40% of that is in Firenze. A lot of it you can just walk by at no cost.
———————-
Bullshit
In all human history?
What about the Greek, the Arabs, the Chinese, the French, the Mayas, the Atztecs, the Dutch, The Germans, the Spaniards, the Indians, the Egyptians.
I can go on.
You’re full of it

#106 Cowtown Cowboy on 10.06.21 at 10:25 pm

Just sold my ’18 Tundra for almost $20k more then I owed on it…had to dump it as my ’21 is due to be picked up next week..basically drove it free for 2yrs

When the going gets strange, the strange turn pro..

#107 Interstellar Old Yeller on 10.06.21 at 10:33 pm

So happy to hear Jane’s shop got a big boost from the mention here! Best wishes for Baylee’s surgeries.

I haven’t noticed product shortages yet, it’s interesting to hear other people have.

Emma Zaun #23 – hilarious. Do you have a tip jar?

#108 Ponzius Pilatus on 10.06.21 at 10:42 pm

Dolce, the best restaurants in the World
No Italian Restaurant in sight.

1. Noma (Kopenhagen, Dänemark)
2. Geranium (Kopenhagen, Dänemark)
3. Asador Etxebarri (Atxondo, Spanien)
4. Central (Lima, Peru)
5. Disfrutar (Barcelona, Spanien)
6. Frantzén (Stockholm, Schweden)
7. Maido (Lima, Peru)
8. Odette (Singapur)
9. Pujol (Mexico City, Mexico)
10. The Chairman (Hong Kong, China)
11. Den (Tokyo, Japan)
12. Steirereck (Wien, Österreich)

#109 TrueLies on 10.06.21 at 10:52 pm

DELETED

#110 Blushing Meadows on 10.06.21 at 10:56 pm

#4 Steveston on 10.06.21 at 2:30 pm

I did not think there were shortages until I went into Cdn Tire looking for some caulk. Something that is hard to ask for delicately to the staff there. Out of both types of caulk I wanted there and at Home Depot.

____________________________________

Yes, I know what you mean. Happened to a friend of mine years ago. What color do you want?… the big one or the little one? I usually ask the young female sales associate just to watch the reaction when they have to ask you what that is.

#111 The West on 10.06.21 at 11:06 pm

Man – it’s tense in here.

Hold tight keyboard warriors – the time of crusade is nearly at hand! Trust me, you’re going to get all you think you want!

https://www.youtube.com/watch?v=EFL1-fL-WtM

“The beatings will continue until moral improves!”

#112 mike from mtl on 10.06.21 at 11:07 pm

#99 Grandma Sue on 10.06.21 at 9:34 pm
…What am I missing here that he poses a health risk to anyone under these circumstances? Or is this about punishing non compliance? What country are we even in?
///////////////////////////////////////////////////////

With all due respect, yes given age group (40s probably pushing 50) is in the tiny minority. The risk/benefit is in favour of getting poked.

I could understand if we’re talking about the propaganda towards school aged ones who given what we know about the bug and the current vax: it makes zero sense to enforce them other than profit and image.

But if you’re ‘over the hill’ so to speak, what is your problem?

Hint 50% of the recent ‘cases’ are aged 0-12 so basically don’t count in the real world. Though all serious cases that do count are 40+ ‘pure bloods’. Why gamble?

#113 Barb on 10.06.21 at 11:10 pm

Good wishes to Jane and Baylee.
Be well!

#114 crowdedelevatorfartz on 10.06.21 at 11:20 pm

@#105 Pilfered Ponzies Picassos

“What about the Greek, the Arabs, the Chinese, the French, the Mayas, the Atztecs, the Dutch, The Germans, the Spaniards, the Indians, the Egyptians.
I can go on.”

++++
You are correct.
American Billionaires built scores of museums and either bought, swindled and finagled oodles of art from everywhere.

Here are but a few American art museums with their priceless collections….

Happy now?

https://www.guggenheim.org/

https://www.getty.edu/museum/

https://www.artic.edu/exhibitions/history

https://en.wikipedia.org/wiki/Crystal_Bridges_Museum_of_American_Art

#115 Mortadella on 10.06.21 at 11:24 pm

#50 Dolce Vita on 10.06.21 at 5:07 pm

Knock off your Italian bologna B.S. like you are some type of connoisseur. More like a con-man. Telling people which tomatoes are good and not good and that you can’t make a good pizza in Canada … because of the water, no less. I could make you a Neapolitan pizza and you’d swear it was made by Octavian himself!

Yet you post this info on a Canadian financial blog thinking nobody would call you out on your arrogant attitude. If Mother Italy is so good, why are you not engaging the culture there. Homesick … I guess. Pathetic too!

#116 DON on 10.06.21 at 11:43 pm

https://www.zerohedge.com/markets/deep-ship-deep-dive-supply-chain-crisis

Interesting long read. Supply chain consolidation and just in time supply chain…

#117 Faron on 10.07.21 at 12:21 am

#104 Sail Away on 10.06.21 at 9:54 pm

It’s, okay, Charles.

#118 DON on 10.07.21 at 1:08 am

Business
Higher rates set to protect emerging market currencies from Fed taper
6:14 PM PDT

https://www.reuters.com/business/higher-rates-set-protect-emerging-market-currencies-fed-taper-2021-10-07/

Hmmmm.

#119 DON on 10.07.21 at 1:26 am

Things you thought you’d never see…soon to be a ‘No Vacancy’ sign on the doors of Hell or will it just freeze over?

https://www.bbc.com/news/world-europe-58801183

French Church abuse: 216,000 children were victims of clergy – inquiry

#120 Midnights on 10.07.21 at 1:39 am

How is (t)rudeau working out for you now? I believe someone commented earlier we are the dumbest group of voters. I would have to agree with this.

#121 Dr V on 10.07.21 at 1:55 am

88 Faron – no argument here, just a minor revision from “transport” to “access” which would improve
services of all types.

Some very interesting data here.

https://en.wikipedia.org/wiki/List_of_countries_by_rail_transport_network_size

Canada is number 5 in the world in total track worked, and we have very high track km per capita (reciprocal of several columns over). We lack in electrical routes, and also in track density, in line with Russia and Australia. Germany, Switzerland, Belgium and Billy Bob’s home away rank high in the latter.

Note however the decrease from “peak track” in many of these countries. On VI, we’ve lost a lot of track in the last 40 years. And they estimate a few hundred million$ to refurbish what we have left.

#122 Jane24 on 10.07.21 at 3:43 am

Dolce I find you very Northern-centric. If you think that Florence has 40% of the world’s history you need to drive south -south-south and come to my stomping ground of Lecce where a restaurant sells you a bottle of wine for the cost of a glass in Florence! Only tourists go to Florence. Italians go to Lecce.

#123 Jane Finch on 10.07.21 at 5:49 am

Inflation temporary? Not for consumers. ‘ Shrinkflation’ ? Smaller cereal boxes and soup cans are now common among Lilliputians…pretty soon, pocket sized. It’s getting ridiculous. Downsizing isn’t just something for seniors anymore. We’re getting ripped off and lied to by the likes of Gerald Butts’ ” Super Geniuses”.

Nothing ‘small’ about the energy poverty’ crisis. Any news of a cold winter sends shivers through the over- mortgaged and fixed income column who are now becoming ‘ The Sixth Estate’. I can’t wait to hear how Trudeau and Greta will shrink those hydro bills this winter when the windmills freeze up. It makes me wonder where that ex-Premier of Ontario partner of Gerry Butts is spending her winter? Where are the poets like Gill Scott Heron when we need them. ” Wake up you a-holes…before we’re all through”.

ZPR the pure choice on prefs, entirely rate reset, but is it too late to catch the upside? Already up 11%. But the Energy Poverty play might lend a boost to energy delivery….like TRP or ENB. Has the Crazy-Green Goon Scare produced Energy Starvation? That won’t last. Which has the bigger upside?

#124 Jane Finch on 10.07.21 at 7:08 am

BTW… My guestimate of pref share ETF CPD over 24 mo’s is for a 200 BP reversal. That’s a 42% upside plus divs to replicate CB reaction of last CB cycle ’06 – 08. My price call on CPD…$20. I’m all in with a 5% total position at $11.00. So far so good. Bad news for a variable rate mortgage.

#125 neo on 10.07.21 at 7:11 am

#99 Grandma Sue on 10.06.21 at 9:34 pm
My son has 20+ years in federal gov’t. Works from home (IT) with an approved telework agreement. Even when he was in the office pre-covid he was “remote”. Now he faces medical tyranny or losing his job. What am I missing here that he poses a health risk to anyone under these circumstances? Or is this about punishing non compliance? What country are we even in?

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

It’s not about science or health. It’s about compliance. The fact that Trudeau is no longer even including “herd immunity” in his calculus and these seem like permanent measures with no end date in sight like he expects no end date to this pandemic is telling. If this was about science and health, almost 2 years into this and 80% vaccinated we would start to be seeing modelling about what a 2019 endemic would look like and how when we would be approaching that and normal. Instead we are still seeing worse case scenario modelling as if no one is vaccinated yet we have been trending down for months now in the key Covid indicators ie. Delta R value peaked August 6th at 1.43 and we are currently at 0.92 and cases peaked September 3rd at 944 in Ontario). Never mentioned in the media, by politicians or health officials though.

#126 Sail Away on 10.07.21 at 7:12 am

#117 Faron on 10.07.21 at 12:21 am
#104 Sail Away on 10.06.21 at 9:54 pm

It’s, okay, Charles.

——–

Haha.

You may as well follow your ethical doxxing compass to its logical conclusion and just share my wife’s place of business and spa appts now to save us all a lot of time.

#127 Wrk.dover on 10.07.21 at 7:43 am

#93 Shawn Allen on 10.06.21 at 9:12 pm
Fuzzy emotional trumps money

Or extract some equity with a tax-deductible LOC and invest. Then your house is truly paying dividends, and not just the fuzzy emotional ones you espouse. – Garth

*************************************
That’s an okay strategy for some people. Even if you got a net 5% on that strategy (doubtful) the notion of getting $5k on $100k debt, does not appeal to me. Max I could get is probably $300k LOC and having $300k in debt in return for an extra $15k (and more likely more like $7.5k) does not appeal to me in the least. If markets happen to go down the full $300k in debt would still be there. I’ve been debt free for close to two decades and planning to stay that way. Buying a house in 1995 it was eminently feasible to pay it off in eight years.

What is the purpose of money other than to ultimately get fuzzy emotional dividends such as the sheer joy of contemplating your pile each day?

I value my fuzzy emotional dividends greatly. I got no use for a few grand more courtesy of going into debt.
____________________________

Right on Shawn!

The last time I had any idea what the cash value of my house was/is, was in 1981 when it was appraised for the $18,000 mortgage, pre construction by self.

R2000 standard warm and fuzzy in here this morning, as usual. House allowed B&D to develop on it’s own later.

All of the missed opportunities? Moot.

#128 NoName on 10.07.21 at 7:55 am

#116 DON on 10.06.21 at 11:43 pm
https://www.zerohedge.com/markets/deep-ship-deep-dive-supply-chain-crisis

Interesting long read. Supply chain consolidation and just in time supply chain…

If you want fresh info and interesting commentary on sup chain this is a dude to follow.

https://twitter.com/man_integrated

#129 crowdedelevatorfartz on 10.07.21 at 8:18 am

@#108 Ponzies pretentious profit on a plate
“the best restaurants in the World”

“”””””

Spare me.
Expensive restaurants and their “ratings”.

Usually the “ratings” industry is a cesspool of glad handing snobs.
Highly subjective, always suspect, usually corrupt.
“The “best” restaurant.
The “best” golf course.
The “best” movie.
The “best” vacation spot. ( apparently its in the south of Italy because a faux Italian/Brit/Canuck sez it’s so)

$200 a plate for a snotty waiter to place a “meal” in front of you with what usually equates to . Unidentifiable, small portions, with an obligatory piece of asparagus twig with cheese sauce “drizzled” over it.
Pfffft.
Gimme a Big O Burger with fries and a side of gravy every time.

#130 Sobering on 10.07.21 at 8:27 am

All we need and should happen is a bank run, pulling out of money from all Canadians that have GIC’s, term deposits, savings accounts, RRSP’s, TFSA’s, RESP’s, RRIF’s and more. This way the Bank of Canada can just print more money and show they never wanted you to have money earning interest for yourself.

They want you to go to work until you drop dead. I know it is sobering but it is true.

#131 the Jaguar on 10.07.21 at 8:32 am

Good article in the NP this morning with Jim Keohane:

Jim Keohane has seen his share of market crises. Now a senior pension advisor in his role as a director of the Alberta Investment Management Corp. (AIMCO), Keohane was early in his investment career when the 1987 market crash hit. Two decades later, he steered the Healthcare of Ontario Pension Plan (HOOPP) through the Great Financial Crisis, emerging with narrower losses than many other pension funds in Canada and around the world.

He’s also a student of market history, and when he looks out at today’s markets, sees many of the characteristics associated with the worst bubbles of the past century — and a landscape that could leave policy-makers with limited options if things go south.

““The common elements seem to be that it was excessive speculation in housing, stocks and commodities, driven by cheap interest rates. It’s exactly the situation we’re in today,” Keohane told the Financial Post. “These things have always ended badly. You never know what the trigger is that will cause that to happen, but … something takes that off the rails (and) the downside can usually be very significant.”

#132 crowdedelevatorfartz on 10.07.21 at 8:38 am

@#120 Midnights
“How is (t)rudeau working out for you now?”

++++
Not to worry.
He will arrive in Kamloops with a somber suit, black shoes and sox’s.
A stern, grave look on his face.
Brow heavily furrowed.
Stooped in concern and feigning shame he may shed a tear or two while kneeling to lay a wreath in front of a hastily built monument of flowers, stuffed toys and crosses.

Another multibillion dollar announcement will be quietly uttered.
It’s not his money, damn the expense.
Anything to make this latest faux pas go away.

Canadian flags will fly at half mast…..forever

Everyone will smile, cheer and wave as the cash plane lifts off to fly back to Ottaweird

Just another day in Liberal land

#133 Dharma Bum on 10.07.21 at 8:49 am

#106 Cowtown Cowboy

When the going gets strange, the strange turn pro..
—————————————————————————————————————————

Ahhhh…Hunter S. Thompson!

I really miss that dude. He woulda had some choice words for the madness going on in the world today.

#134 Sail Away on 10.07.21 at 8:54 am

#124 Jane Finch on 10.07.21 at 7:08 am

BTW… My guestimate of pref share ETF CPD over 24 mo’s is for a 200 BP reversal. That’s a 42% upside plus divs to replicate CB reaction of last CB cycle ’06 – 08. My price call on CPD…$20. I’m all in with a 5% total position at $11.00. So far so good. Bad news for a variable rate mortgage.

———

Yes, as Garth notes, the rate reset prefs are looking good. Being a cowboy, I like the individual companies; my big company pref positions in 2019 were Bombardier, Altagas, Transalta, Brookfield. All have done well. Altagas leading the pack at 50% cap appreciation from purchase plus 6% annual yield.

#135 IHCTD9 on 10.07.21 at 9:00 am

#121 Dr V on 10.07.21 at 1:55 am

Some very interesting data here.

https://en.wikipedia.org/wiki/List_of_countries_by_rail_transport_network_size

Canada is number 5 in the world in total track worked, and we have very high track km per capita (reciprocal of several columns over). We lack in electrical routes, and also in track density, in line with Russia and Australia. Germany, Switzerland, Belgium and Billy Bob’s home away rank high in the latter.

Note however the decrease from “peak track” in many of these countries. On VI, we’ve lost a lot of track in the last 40 years. And they estimate a few hundred million$ to refurbish what we have left.
———-

That info speaks to the history of Canada. Logging, sawmills, mining, grain, Oil, pulp and paper, and eventually manufacturing. As these industries shrink and transport modes change, some of the lines become a financial liability and get pulled up. Note all rail lines are privately owned in Canada.

In Ontario, most of the formally maintained ATV trail systems are old rail beds. When I was a kid, everyone had railway ties bordering their driveways and flower gardens because they were giving them away. Most of the North/south rail lines in Ontario became idle and are today either gone, or are “tourist” train lines offering day trips up north and back.

One local town had one of the most advanced sawmills in the world back in the day, and it was fed logs from northern Ontario via rail. If you look on Google earth, you can still follow the rail line into town, even though it has been gone for decades. City blocks interrupt its path, but the bed is still visible in some places allowing you to connect the dots.

#136 ImGonnaBeSick on 10.07.21 at 9:03 am

DELETD. We are done with this childish spat. – Garth

#137 Concerned Citizen on 10.07.21 at 9:09 am

“They also know if prices and wages swell that CBs will respond”

No they don’t. The central banks will just continue to call inflation “transitory” so that they can keep real rates negative and continue to grow the everything bubble to even more obscene heights. They know that if money actually cost something, the bubbles would deflate in short order.

If the Bank of Canada actually cared about its official mandate, it would have ended its QE program long ago and raise interest rates by now. The fact that they haven’t tells you all you need to know about how much they care about maintaining price stability.

I don’t think they serve broader society anymore. Their chief concern appears to the be billionaire and house flipper/investor class.

#138 facts on 10.07.21 at 9:18 am

DELETED (Anti-vax)

#139 Canadian Govt is composed on 10.07.21 at 9:24 am

Is composed of idiots corrupt imbe ciles and Traitors!!!

Thank God for the idiots that voted for them!

#140 Mississauga Mel on 10.07.21 at 9:33 am

Your Vancouver comments are applicable to Toronto. Just insert Toronto for Vancouver and everything you wrote is ditto for Hogtown.

#141 Mississauga Mel on 10.07.21 at 9:34 am

#77 Re:SST on 10.06.21 at 7:06 pm

Sorry, my previous comment was for you.

#142 Woke up this morning... on 10.07.21 at 9:52 am

Greater Fools – definition – EVERYONE but the 0.1%

https://nationalpost.com/opinion/terry-glavin-the-pandora-papers-what-the-rich-and-powerful-dont-tell-us

Dumb suckers these 99.9% are…ha ha ha…Greatest Fools ever!

Hey, let’s put their grand children in debt before they even become a living sperm! Then let’s have lunch.

Capitalism! FREE MAKET! HA HA HA!

#143 ImGonnaBeSick on 10.07.21 at 10:45 am

You’re right. Smartest decision. I couldn’t help myself. My attention has been drawn recently.

#52 Linda on 10.06.21 at 5:15 pm

Classic flaw is ascribing no value to equity. If invested it would likely provide substantial income. Abrogating that is most definitely a cost to be included in any calculation. – Garth

This has been an issue for me. I would like to do a rather large renovation, and could pay for it without taking on debt. However, with such a long time until retirement, this is my biggest hangup. That money could double 2, 3 maybe 4 times before I retire. I don’t like to mention personal details too much, but I likely do not need to contribute any more to retirement accounts, nor do I have any mortgage left. But I’ve batted this idea (as well as just moving) around for several years. I suppose a small mortgage would be the most logical financial approach?

#93 Shawn Allen on 10.06.21 at 9:12 pm

I’ve considered this strategy in the past too, especially March 2020, however, I’ve always erred on the side of caution as well. If I needed to make up lost time, it may be more appealing? The old adage of “pigs get slaughtered” seems to always pop into my mind when considering this.

#144 Woke up this morning... on 10.07.21 at 10:50 am

Re: Native Claim on land.

When the treaties were being signed, it was done in English. Natives were given translators either of European or Métis descent.

I wonder, how in the world could they have understood the English language legalese, translated the legalese correctly to their Native tongue, bindingly, and in a manner where all the repercussions benefits, pitfalls and liabilities could have been understood in this contractual negotiation, especially in light of there likely not being equivalent words with same meaning to begin with?

How could clear misunderstanding not been fully accounted for considering the vast differences in legal understanding and application of the law between these two peoples, and one group clearly controlling the negotiation process, application of their laws, language of the contracts, translators of European descent, etc. This was as one sided as you can make a negotiation.

This negotiation and Treaties looks to be standing on VERY thin ice in my view, just from a legal perspective if challenged. It is actually mind boggling that they are being held up as legally binding considering the clear procedural issues.

The more I read and learn about this history, the more shaky it all looks to me.

#145 Ponzius Pilatus on 10.07.21 at 11:05 am

#131 The Jag
““The common elements seem to be that it was excessive speculation in housing, stocks and commodities, driven by cheap interest rates. It’s exactly the situation we’re in today,” Keohane told the Financial Post. “These things have always ended badly. You never know what the trigger is that will cause that to happen, but … something takes that off the rails (and) the downside can usually be very significant.
———————————-
Wow, that’s deep.
“Excessive Speculation in housing, stocks and commodities”
“Never know what the trigger is”.
And he gets paid money to state the obvious.

#146 NEVER GIVE UP on 10.07.21 at 11:14 am

#95 Doug t on 10.06.21 at 9:18 pm
#81 never give up

YOU PAID 7k IN RENT ? Who the heck would do that and why? good lord it baffles the mind what people do with their money
===============================
FYI.. It was very economical for me to rent acreage. Since 1985 I have worked from home. The business just grew over the years and I didn’t want to change. Warehouse space in the Lower mainland would have been $7k and then I would still need a place to live. bringing total rents to $10k.
People in the Lower Mainland see me a ultra frugal!

#147 Sail Away on 10.07.21 at 11:33 am

#143 ImGonnaBeSick on 10.07.21 at 10:45 am
#93 Shawn Allen on 10.06.21 at 9:12 pm

Re: Invest Heloc

I’ve considered this strategy in the past too, especially March 2020, however, I’ve always erred on the side of caution as well. If I needed to make up lost time, it may be more appealing?

——-

We are using a Heloc to invest. The current interest rate is 2.65% and we pulled the trigger mid-July with this standalone port:

20% XIC
10% XAW
30% VUS
10% VRE
5% VAB
15% CPD
10% RSG

Weighted return to date is 4.95%, and weighted avg. yield is 2.78%. It’s working so far…

#148 ImGonnaBeSick on 10.07.21 at 11:33 am

#144 Woke up this morning… on 10.07.21 at 10:50 am

This brings up an interesting topic. Do you feel the Metis should have entitlements? If not, I’d like you to have a little conversation with one of my employees…

What about adverse possession (squatters) laws?

What about statute of limitations?

You cannot say that our current rule of law is invalid, no matter how you feel about original treaties.

Honestly Woke, this issue has entire arms of government dedicated to it. If you want to help Indigenous peoples, find something you can actually affect the outcome of.

#149 yvr_lurker on 10.07.21 at 11:34 am

A narrow victory 6 to 5 for scrapping the ridiculous street parking cash grab in all of YVR led by the green zealots on YVR city Council

https://www.cbc.ca/news/canada/british-columbia/vancouver-city-council-scraps-controversial-climate-emergency-parking-program-1.6202580

Was given an opportunity to speak at the forum and explained that this was a punitive tax on those who do not have driveways. Moreover, I asked them to please explain to me how our second car driven 3000Km in each of the past few years is contributing greatly to air pollution. It is essential for certain activities, driving a group of kids to an after school basketball tournament, etc..

The ring leaders of this cash grab nonsense are Adriane Carr and Peter Fry…. Dogmatic zealots….They need to be voted out in 2022.

What I fail to understand with all of these increasingly radicalized green zealots, and especially those blocking major intersections in protest, making it very hard for commuters to get home from work, pick up their kids or dog from daycare, is what do they expect people in the oil industry or those who need to use their vehicles for work to do? Leave their jobs immediately so they can no longer support their families? Shut the entire industry down tomorrow? All the while China is pumping out endless hydrocarbons from their plants (just go to the suburbs of Shanghai which I saw in 2019… unbelievable).

It is perfectly clear that we need to transition away from oil into renewables or other forms of energy. The word transition here is key, so that people can adjust, still have employment in other related sectors etc… I don’t need Greta and the like blocking intersections or to abide by the worldview of the Adriane Carr’s, where we all accept a radically different and sudden paradigm.

I

#150 blind leading the blind on 10.07.21 at 11:45 am

You do know that at least 25 cents a liter is just from higher carbon taxes and GST,HST on top of that from Mr. Trudeau, Freeland, Morneau in the last 3 years. For some reason this morning on Global, they forgot to mention that talking about one third of Canadians are struggling financially because of the pandemic. No, it is because Trudeau, Liberals for the last 6 years is failing in their economic policies for the middle class and everyone else. Maybe it is because all the mainstream media gets paid billions a year from the Liberal Party, Trudeau to say what they are told to say. It is so clear by now that if you don’t see your head must be in the sand.

#151 Midnights on 10.07.21 at 12:01 pm

Not to worry.
He will arrive in Kamloops with a somber suit, black shoes and sox’s.
A stern, grave look on his face.
Brow heavily furrowed.
Stooped in concern and feigning shame he may shed a tear or two while kneeling to lay a wreath in front of a hastily built monument of flowers, stuffed toys an

That’s was good!

#152 Shawn C Allen on 10.07.21 at 12:06 pm

Punish the Banks by Removing Cash?

#130 Sobering on 10.07.21 at 8:27 am said:

“All we need and should happen is a bank run, pulling out of money from all Canadians that have GIC’s, term deposits, savings accounts, RRSP’s, TFSA’s, RESP’s, RRIF’s and more. This way the Bank of Canada can just print more money and show they never wanted you to have money earning interest for yourself.”

*******************************
Nice idea but basically impossible these days. For good or for bad we are basically a (paper) cashless society. It happened like the frog in the warming then boiling pot. Personally I am okay with it. In any case, it’s a done deal now.

So it’s not very feasible to pull say $100k or such amounts out as cash. You would face questions if you tried to literally buy a car for paper cash. Banks have questions if you try to deposit big amounts back in. And where would you keep the cash safe? (Don’t answer this question out loud!)

And of course cash in RRSPs cannot be pulled out without triggering tax and taking it out of TFSA and RESP defeats the purpose of those accounts.

I think the best we can do is be more aggressive and shop for higher interest (while paying attention to safety). I did my part by sliding $50k in a taxable investment account over to Simplii financial recently as they offered 2% interest for a six month period and I can take the money bank instantly.

As for cash in my RRSP however, I consider that to be trapped in with my big bank. I am not going to open multiple RRSPs to get a bit more interest. The big bank knows this and gives me 0.2%.

People who do shop aggressively for interest including those willing to hold multiple RRSPs are causing a little bit of competition that is helpful.

#153 Woke up this morning... on 10.07.21 at 12:07 pm

#148 ImGonnaBeSick

Apparently yes, because….

“The British and Canadian authorities recognized that indigenous peoples already on the lands had a prior claim, aboriginal title, which was not extinguished by the arrival of the Europeans.”

They way The Crown got a hold of the land is through these treaties, negotiated in a language that wasn’t Natives, law that wasn’t natives, under a system the Natives didn’t apply or subscribe to or even likely fully understand – after all, they never lived under it.

The reality of that treaty negation is so flawed, it is beyond comprehension how those contracts/treaties are allowed to stand as binding and stand up to legal challenges as to their validity.

Adverse possession point – see above detail – prior claim, aboriginal title, which was not extinguished by the arrival of the Europeans.

Statute of limitations does not apply here. But I am fascinated what the treaty termination rules and conditions are and if they are available to both parties equally with proper notice.

I do wish to read these treaties in more detail, review and learn.

#154 Faron on 10.07.21 at 12:22 pm

#126 Sail Away on 10.07.21 at 7:12 am

Don’t worry. This place is like the sitcom “Cheers” and its well-known theme song.

Buddy, my only issue with BillyBob’s creeping around was with him weaponizing it by seeming to confuse me with someone else. In case you haven’t noticed, I comment under my real name.

We all know who you are and when it came out nobody cared. To this day no one cares. Everyone knows who I am. No one cares. Anonymity is a reason the internet sucks. Garth leads by example. I own my words Perhaps you should come out of your she’ll Mr. T.

#155 ImGonnaBeSick on 10.07.21 at 12:28 pm

#147 Sail Away on 10.07.21 at 11:33 am

It seems like the timing would be perfect. You have already covered the majority of 2 years’ interest in 3 months. I’m very interested in who is using this strategy.

Whenever it’s mentioned, I find myself spending some time in front of spreadsheets. I would consider myself an above-moderate risk taker. You seem to have a balanced portfolio for this. Is the reason for overweight Canada for the dividend tax credit? I can’t say that I know what RSG is however.

Is this method a no-brainer if you have the resources?

Good fortunes ol’ boy, and I know I’ll be back to a running scenarios now…

#156 Faron on 10.07.21 at 12:35 pm

#135 IHCTD9 on 10.07.21 at 9:00 am
#121 Dr V on 10.07.21 at 1:55 am

Some if my fave running routes linked with the old rail line out to Cowichan Lake. No surprise that the per-capita rail kms remains fairly high in Canada. That speaks to low population density and how the pop is spread along the border. Canada is a very hard place to build a rail network that could replace cars. Rail + bus is doable and should be subsidized now to aid any transition.

#157 Dr V on 10.07.21 at 12:38 pm

144 Woke – 148 Sick is correct. there are over 400 “specific” land claims being examined, many for failure to meet existing treaty obligations.

https://www.rcaanc-cirnac.gc.ca/eng/1100100030291/1539617582343

Perhaps instead of trumpeting your awakening on this blog, you should finish up that law or history degree and discuss it with the nation that is part of your greater community so that you can become part of the process directly.

#158 Harry Callingsworth on 10.07.21 at 12:40 pm

Could a Dutch eco-terrorist cell aboard a ship have purposefully dragged an anchor to hook the Huntington Beach oil pipeline and foul beaches in order to push their crazy agenda? The ship appears to have been moved erratically over the pipe and then dragged. The suspect ship is now calling the entire array of technology which monitors ships positions as “erroneous”. Have the Green Goons taken the Climate Crisis to the next level and did they think they’d get away with this “helper skeleton” strategy to increase public anxiety? Is the “climate Crisis” not happening fast enough for the radical brainwashed Pink Hair Goons?

https://apnews.com/article/business-europe-california-environment-and-nature-0e3d71b1f161822bb157ce8d73dbbd11

#159 Faron on 10.07.21 at 12:45 pm

#16 Faron on 10.06.21 at 2:56 pm

#167 Dr V on 10.06.21 at 11:14 am
Markets up yesterday, down again today

Look again. This bouncing between levels has been an extremely profitable past four days. Dealer positioning effects coming back online to support the market. Everyone is scared. Keep your eyes peeled.

Rippy rippy. Millmech, I hope you weren’t holding $YANG for this one. -13%, ouch.

Next options expiry is in a week. Should be plenty of strength until then.

#160 Andrew on 10.07.21 at 12:55 pm

Shawn C Allen, this is why people should keep receipts for everything. I have receipts for 30 years now and many paper copies upon copies. I mean everything from something as a little to alot. I look at this way, if I have to spend the time, effort, cost to keep these records, why throw them away. This is one idea of hoarding I accept, agree with.

As for getting the best rates, savings, GICs, RRSPs, TFSA, RESPs, RRIFs, LIRAs, LIFs, LRIFs, DPSPs, RDSPs and anything else with an interest rate attached to it. I always shop around. There are at least 60, 70 maybe 80 banks, trust companies, credit unions in Canada that have all deposit insurance within certain limits. You have to keep on top of this stuff. The highest GIC and other fixed rates I found is 2.6% and mid range rates are 2.0% to 2.4%. I think these will be 2.8% to 3% in the next 6 to 9 months. As for inflation at 4.10% in Canada, it was always that way. They have lied for decades now about real inflation, cost of living to Canadians. You should shop around for everything as much as possible not just financial stuff.

The best way to deal with this is cut out crap you don’t need and stop paying expenses, costs, bank fees, credit card fees, fees everywhere as possible. We cut of everything by 40% to 80% from cars to alcohol to cigarettes to eating out costs, delivery food costs, insurance, housing costs and more. We have been doing this for decades. We retired early in our mid 50’s and just got this year our CPP, $1,506 a month and now not punching the clock anymore which means not paying $20,000 a year in CPP, EI, extra gas, wear and tear on car, car repairs anymore. This alone is bring in equivalent to $50,000 a year in gross income we would have to earn which is 5 months of our annual wages when we were working full time, 12 months a year.

#161 Chris L. on 10.07.21 at 7:18 pm

Letting Jordan Peterson weigh in on things. “Jordan Peterson: The collapse of our values is a greater threat than climate change | Off Script”

https://youtu.be/q4zZ2ker1iI?t=1375

#162 DON on 10.07.21 at 10:44 pm

@#128 NoName on 10.07.21 at 7:55 am

***thanks for the extra reading…much appreciated!

#163 DON on 10.07.21 at 10:50 pm

Peru now raising rates to combat inflation.

Ahh…What’s up doc?

#164 Chimingin on 10.08.21 at 9:17 am

Anti-vaxxers who reference God and Jesus in defending their position just show how little they know about anything. Any actual Christian knows the second most important commandment is to love thy neighbour. Very little of that happening in the antivax crowd, from what I can see. Always about “my rights”, never about “my responsibilities”. Shameful.