Money destruction

How much do houses really cost? Everybody says we have a real estate crisis. Instead, John argues, we have a money disaster.

He’s an engineer who bought his first house 41 years ago. It cost $28,000. That represented 250% of his annual income.

So today the average detached in Toronto is $1.785 million, 21% more than last autumn. In the 905 commutershed the increase is 29%. In Vancouver a detached averages $1.85 million, up 20%. We know from the feds that people buying homes worth seven figures or more carry an average debt equal to 450% of incomes. And the prices themselves range from 8 to 12 times annual household earnings. We also know mortgage debt continues to crest and home loan/equity LOC borrowing is ramping up at more than twice the rate of inflation. Plus interest rates will be rising in 2022.

In short, asset inflation. On an historic scale. And because the asset is housing – not hockey cards, NFTs or Tickle-me-Elmos – it’s become a kind of national emergency. In fact that last federal election campaign was all about affordability – which has worsened since the voting ended. As a result, the feds are about to usher in new plans making debt and home-buying easier, as the CMHC limit zooms to 1.25 million, for example.

But wait, John says. We’re being manipulated. Diverted from reality. “Politicians, whose deficit-spending caused all this currency debasement, are bringing out all the old excuses, which date back to Roman Emperor Diocletian, to the Roosevelt gold confiscation in 1933, to Nixon’s default on gold convertibility in 1971, blaming “Foreigners,” “Speculators,” “Hoarders” and all the usual suspects for nominal house price increases except themselves,” he says.

In support, he offers this chart of US home prices expressed in ounces of gold. As you know, the Americans have suffered far less FOMO than we little beavers and moreover went through a housing crash (2006) that we skirted around. But, still, this is interesting…

House prices expressed in ounces of gold

Source: longtermtrends.net. Click to enlarge.

What does this tell us? No, not to buy gold – which has been a lousy performer for the past decade. Instead it suggests anyone who thinks cash is a storehouse of value better think again.

Says our engineer:

Note that there is little change over the last decade. The recent average US price is 250 ounces of gold. It’s the currency that has gone down a lot. Now houses cost ten times incomes. How things have changed. Now houses are as cheap as ever, going back to 1889, when measured in real money. When will the general public realize what has happened? Then what?

The point is clear. The value of currency is being destroyed over time by asset inflation . It’s all the more painful because income inflation hasn’t kept pace. Recall that government benefits will rise 2.4% in 2022, intended to offset the swelling cost of living, but houses cost 29% more in Mississauga. Not to mention food, insurance premiums or the price of golden retrievers.

Government overspending, overborrowing and the consequent creation of money by central banks has brought us to this point. A third of the currency in circulation did not exist three years ago. Ottawa spent $350 billion more than it earned last year, papering over the rest with the issuance of bonds. In fact deficit financing is now normal. Routine. Society burns though money it does not have, faster than ever. The Bank of Canada for a whole year spent $5 billion a week in newly-created funds to buy up government bonds and artificially suppress rates.

So now we have the result. Inflation is the greatest in three decades – since back when Blondie was still hot. Real estate is out of control. Housing costs eat half, two-thirds or more of the incomes of recent buyers. Forty per cent of people live paycheque-to-paycheque. A majority would be pooched if they missed just one. Measured on the street in any Canadian city, monetary policy has been a fail.

How to keep up?

Don’t save. That would be a start. Invest. Any asset yielding less than inflation or, outside a registered account, less than inflation plus tax, is putting you at risk. A balanced financial portfolio makes sense. Buying a physical asset like a house is an option, but in that case you give up diversification and take on leveraging risk. And there’s no guarantee real estate will not suffer when the cost of money rises.

Also muse on this the next time you’re allowed to vote. If the day when monetary systems like ours implode is to be pushed away, forestalling a collapse in asset values (like your house), then we need better leaders. We might get away with this profligacy for a gen or so, but our kids will eventually wonder what the hell we were thinking.

If they don’t already.

About the picture: “This is my grand dog this week during the heavy rain we experienced,” writes Michelle. “This kind of sums up what we should all be doing instead of buying over priced real estate. Lol.”

146 comments ↓

#1 marcovenier on 12.02.21 at 2:27 pm

A good read:
https://www.collaborativefund.com/blog/how-this-all-happened/

#2 Ponzius Pilatus on 12.02.21 at 2:31 pm

115 Dr V on 12.02.21 at 1:05 pm
100 Dharma

“All jobs are slavery.”

Maybe your jobs were. Worse thing you can do for a living is something you dont enjoy.

What happens to many is they just tire of it, or lose their edge. Not much use for a shaky-handed brain surgeon.
But I know a few multi-millionaires who still get up to “go to work”.
————————
I enjoyed my work, but then came the time to find out what else I could do with my time that’s left.
Never regretted it.
There’s a fine line between liking your work and workaholism.
But always make sure your retirement fund is safe, diversified and balanced.
Don’t wanna end up living under the bridge

#3 TurnerNation on 12.02.21 at 2:32 pm

Perhaps our Forum Host would provide an update from his Nova Scotia Health Zone. A report of healthiness – relative and absolute in that Zone. (I’m sure the prefecture Block Captain keeps such records.)
Also with regard to the Green/Sanitary Pass an estimation of the Sanitary level in the region along with a general Hygiene update.


— War on Small Business. Yep permanent rolling Economic Lockdowns. New in SW Ontario:

https://www.swpublichealth.ca/en/news/enhanced-public-health-measures-aimed-at-rising-covid-case-count.aspx
“Restaurants, bars and other food or drink establishments without dance facilities: The total number of patrons permitted to be seated indoors at the establishment must be limited to 50% capacity. ”


— Buckle up guys. As always take what our rulers tell us and flip it 180 degrees to make sense. Things will be getting very expensive for your family. Interest rates, price inflation, Karbon taxes! Bank on it.

“@JustinTrudeau We’re focused on making life more affordable for you and your family – by investing in housing, reducing closing costs for first-time buyers, cutting child care costs down to an average of $10 a day, and so much more. Get the details:”


— Keep an eye on the food supply. There is no ‘news’ only manufacturing of consent. This is one step away from telling us Cattle have CV and must be disposed of?

.Virus that causes COVID-19 found in three white-tailed deer in Eastern Townships in Quebec (montreal.ctvnews.ca)

….Which I predicted here many times – 2019 and earlier:

#91 TurnerNation on 12.17.19 at 8:06 am
For years now I’ve stated a time will come whereby armed government men destroy perfectly good food stuffs while desperately hungry people look on. Maybe the WHO says there is a virus, or maybe the correct ‘carbon permit’ was not obtained beforehand

#49 TurnerNation on 09.10.19 at 8:54 pm
I beleive in my lifetime good foodstuffs will be trashed as armed men look on and people are starving. Maybe the correct karbon permit was not applied for, or the WHO claims dread disease and we comply. Trees have more rights than yourself.

#4 Griffith on 12.02.21 at 2:35 pm

More news from the engineering world.

Allen Bradley Programmable Logic Controllers (PLC’s) (basically customizable computers that are the brains of any kind of industrial plant) have been back ordered for months. Old news. But now Schneider Electric PLC’s and components (input/output cards) are becoming back ordered to the factory. These two brands are some of the largest if not the largest used for PLC’s in North America.

Also I heard that Schneider cannot ship millions of dollars worth of circuit breakers. There is a $~0.05 plastic piece that needs to go in certain varieties, and that is what’s holding up delivery.

The PLC delay means that industrial plants can’t be started up. Without this key component, nothing turns on. This affects water plants, wastewater plants, industrial processing plants etc.

Well designed plants will have spares and back up systems to run if a component fails. But many do not, due to cost conscious design, or poor maintenance practices. Right now in North America, if a PLC card dies in say, a water treatment plant, you may not be able to get one for months, if you don’t have a spare on hand, or another control system you can cannibalize.

As system integrators like us struggle to get materials, we are forced to try and buy up the market to protect our business. But all the other system integrators are doing the same. A multimillion water treatment plant will not be able to be commissioned due to the lack of a $1000 PLC card.

There are workarounds, of course. Use different PLC’s. But people are trained to program only certain PLC’s. So that requires a huge amount of labour to learn new stuff. And then that type of PLC can easily have supply chain issues too as other system integrators move to do the exact same thing.

Our sales team is moving from bidding projects to scouring the global market for vital components. Fun.

#5 Quintilian on 12.02.21 at 2:36 pm

“Also muse on this the next time you’re allowed to vote”

Garth, you just blew up my logic board.
I thought monetary destruction was caused by Central Bankers, who are, according to you, independent of the politicians.

Voting in a different party won’t change that.

In the last election campaign did the Cons utter the word “bubble”, or did they point the finger at reckless monetary policy?

Not as far as I recall.

#6 pPrasseur on 12.02.21 at 2:36 pm

So today the average detached in Toronto is $1.785 million

Totally normal, everybody knows woky Toronto in the center of the know universe, possibly the unknown too ha ha!

#7 SunShowers on 12.02.21 at 2:39 pm

“Government overspending, overborrowing and the consequent creation of money by central banks has brought us to this point.”

The act of simply issuing more currency does not debase the dollar for the same reason you don’t see billionaires lighting mountains of hundred dollar bills on fire to drive up the value of the money they didn’t burn.

#8 money printer go brrrrrr on 12.02.21 at 2:39 pm

So why are you investing in bonds where real returns are -5%

You’re just as well off owning gold.

If there’s a serious bout of inflation, gold will at least hold its value. Bonds will get destroyed.

Tell that to the VBAL people. Smart advisors built a rising-rate strategy long ago. – Garth

#9 Bezengy on 12.02.21 at 2:40 pm

The walls are closing in on the low income folks, those who live paycheck to paycheck. Along with higher house prices come higher rents. I can feel the anger on the streets now, something has to give. Meanwhile, Justin says higher housing costs are a supply chain issue. This guy has to go, unfortunately the damage has already been done.

#10 Sincere Frank on 12.02.21 at 2:51 pm

In all honesty, COVID has been fantastic for business so far. Why would someone genuinely want it to go away?!

Medical threat? – there are currently ~200 people in hospitals (https://covid-19.ontario.ca/data/hospitalizations) out of a population of 13 million. That doesn’t even count as a rounding error.

#11 crowdedelevatorfartz on 12.02.21 at 2:51 pm

“In fact deficit financing is now normal. Routine. Society burns though money it does not have, faster than ever. ”

++++

Balancing the budget should be the Law.
Federally, Provincially and Municipally.

All three levels of govt are squandering our future.

Tie the budget to govt pensions.
Every year the budget is in debt….. that year should be excluded from any pension the people in charge have “earned”..

#12 Kurt on 12.02.21 at 2:54 pm

“Also muse on this the next time you’re allowed to vote. If the day when monetary systems like ours implode is to be pushed away, forestalling a collapse in asset values (like your house), then we need better leaders. ”

Garth, I disagree. The damage is already done – through the magic of fractional reserve banking, our currency is effectively backed by residential mortgages. In any bubble, the damage is done on the way up – it’s called malinvestment, and your blog has hammered away at the risks caused by it. Cleaning up the balance sheet involves reducing the total value of mortgages to their real worth, which will necessarily create a pullback in house prices, rapid or slow. Securing the monetary system will not prevent a collapse in house prices; it may in fact require it, depending on other factors. Regardless, the rest of your statement is absolutely correct, this mess needs to be unwound now, and we’ll need real leaders to do it. Too bad you’re out of the politics business.

#13 THEY KNOW EXACTLY WHAT THEY ARE DOING on 12.02.21 at 2:55 pm

You think they are dumb?

You think they don’t know what they are doing?

They know EXACTLY what they are doing

Incompetence is a lovely excuse, isn’t it?

And you all believe it?

#14 Don Guillermo on 12.02.21 at 2:57 pm

#103 mousey on 12.02.21 at 11:17 am
#46 – Venezia
Any money left after getting sloshed on $30 Bellinis at Harry’s Bar, will quickly be removed from your money belt at Caffe Florian where it costs about $10 per person just to sit in the premises – the coffee and treats are on top of that. The seating fee is not uncommon in high traffic tourist spots, but personally I couldn’t stomach it. Beautiful place, and touted as the oldest cafe in Italy (maybe even Europe – can’t remember exactly) so I took a picture, got up and left. Found another beautiful cafe with many tasty treats without seating fee.
*****************************************
To be fair to Dolce, going in the winter is probably a better experience. I was there a few years ago in October and it was a gong show.
I read this recently and started thinking December in Venice might be interesting. Good read.

“The City of Falling Angels”
by John Berendt

#15 Shawn Allen on 12.02.21 at 2:58 pm

U.S. houses in terms of Gold.

The graph suggests U.S. houses are cheap. They are indeed very affordable in many areas of the U.S. Snowbirds may wish to take note.

Retirees, you can sell in Toronto and move to Florida. Yes, you can collect your CPP and old age pension there. Surely you also have substantial investments by now as well.

#16 Ian on 12.02.21 at 2:59 pm

While not saving for retirement or fund RESPs to instead spend on ever more expensive housing a seems to be a stupid decision. However though, as a long term renter, I’ve only continued to see Governments reward this behaviour, as it’s the majority who think and behave this way. Recently, mortgage payment holidays to continue to prop up housing. Sure it added a few months to the total amortization, but clearly a lot of people benefitted. It seems no government will EVER deal with this issue. Fixed rates will go higher, but still will be low overall looking at the prior 20 yr period. While I agree buying at this end of the exuberance cycle is stupid, once rates rise 1% to 1.5% and stall the market a bit, it’s probably going to be a good entry point for those who can buy. The tax free gains and hedged protection against renoviction and rent increases above inflation and prop taxes are an ever present risk! Your right Garth, this printing of cash screwed a generation. But if we’re becoming a generation of renters, and most people can’t, or don’t save as student loans and rent are too high for meaningful savings. What is going to happen? If you have a house to sell to fund your retirement with CPP and OAS your going to be a lot better off than having only rented and saved with this kind of price growth. Heck housing is going to increase another 9% forecasted. Tax Free! I’m poochesd, 40 yrs old, maxed RRSP and TFSA and financial planners tell me I’ll be able to retire at 70, but only 50% of working income.

#17 crowdedelevatorfartz on 12.02.21 at 2:59 pm

@#2 Ponzies Puptent place

“Don’t wanna end up living under the bridge”

++++

I believe South of the Fraser there are no significant bridges…..yet…. just highway over passes.
Cardboard box living at it’s finest.

#18 crowdedelevatorfartz on 12.02.21 at 3:02 pm

@#13 SHOUTY McSHOUTSTER

So angry.
Take a chill pill.

#19 Chameleon on 12.02.21 at 3:03 pm

The answer to this problem is very simple.

Instead of renting your basement to humans to pay the mortgage, start a puppy mill in the basement. At current prices, 1 litter will bring in $40,000-$50,000.

Choose bread carefully and wisely. Lean toward cute, small, high value.

Plenty of dog lovers out there to help you pay your mortgage on your Toronto slanted semi that’s going to the dogs.

Woof Woof!

#20 Nonplused on 12.02.21 at 3:04 pm

Not 1 person in 100 understands inflation, and that number might be high.

Prices rise when the money supply grows faster than the supply of goods and services. This is almost always caused by government deficit spending, especially to the extent that central banks are expanding their balance sheets to support the government borrowing. It is therefore no coincidence that the recent rather alarming blip in inflation followed shortly behind one of the largest nonwartime government spending sprees in history.

Housing inflation should not necessarily run ahead of general inflation, but there is a unique factor at play: mortgages. Mortgages make money available that people don’t have, and they are typically only associated with housing. As the “cost of money” (mortgage interest rates in this case) approach zero, the amount of money people can borrow approaches the amortization of the loan with no interest. At zero interest rates the monthly payment would be the principle divided by the amortization. That can be a pretty big number compared to say what you would get with even 5% interest. Since the housing supply cannot rise as fast as the amount of money available as rates approach zero, the price of houses goes way up. A false competition arises because everyone has more mortgage money with which to bid. So you can’t just bid what a house “should” be worth if interest rates were 5%, because you are bidding against people who are borrowing at much lower rates. It’s all about the monthly.

#21 Quintilian on 12.02.21 at 3:08 pm

#11 crowdedelevatorfartz
“Balancing the budget should be the Law.”

Thoughtless brash, uninformed statement.

Even the nutbars from that right wing radio station that brainwashed you would disagree.

Deficit spending is a perfectly useful and appropriate tool when used at the right time to the right degree.

Misuse and abuse by politicians is what should be outlawed.

#22 Nonplused on 12.02.21 at 3:11 pm

#7 SunShowers on 12.02.21 at 2:39 pm
“Government overspending, overborrowing and the consequent creation of money by central banks has brought us to this point.”

The act of simply issuing more currency does not debase the dollar for the same reason you don’t see billionaires lighting mountains of hundred dollar bills on fire to drive up the value of the money they didn’t burn.

———————————–

I’m glad you don’t work in banking!

First of all billionaires don’t have mountains of 100 dollar bills and it would be very hard for them to acquire that kind of cash. They would have to sell their business interests.

But if they did burn mountains of money, yes, it would have the same effect as the central bank withdrawing cash from circulation: deflation. The remaining money would get more valuable. (Although probably not by enough to offset the billionaire’s losses. There is a lot more money in circulation than even the billionaires could burn.)

So if that is true, that withdrawing money causes deflation, why wouldn’t printing excess money cause inflation? Where is the excess money supposed to go if not into prices? People’s bank accounts? Maybe at first, but it isn’t going to stay there any longer than the money they already have does.

#23 Dave on 12.02.21 at 3:14 pm

The Feds have caused this bubble by making it too easy for people to buy houses. There should be much higher taxes on people who buy second homes in cities where there are housing shortages. Buying a cabin at the lake is one thing, but why do we let greedy specers buy multiple properties during a housing shortage. The feds should tax the %^#$% out of them.

#24 crowdedelevatorfartz on 12.02.21 at 3:23 pm

@#21 A quintillian dollars deeper in debt

“Thoughtless brash, uninformed statement.”

+++

Its how I roll.
:)

#25 Victor on 12.02.21 at 3:26 pm

Question – for non registered, return should be inflation + tax. If the tax is 20, 30+ %, how this is attainable? Or I missed the point?

#26 Stealth on 12.02.21 at 3:37 pm

Good afternoon,

Why can’t the interest rates drop further? E.g bond yields.
Are all experts now convinced that they must rise?

Thank you.

#27 Klaus on 12.02.21 at 3:53 pm

You will own nothing and be happy

#28 jess on 12.02.21 at 3:53 pm

… “sterling laddies” “standing down”

Today we complete our sixth cartel investigation in the financial sector since 2013 and conclude the third leg of our investigation into the Foreign Exchange spot trading market. Our cartel decisions to fine UBS, Barclays, RBS, HSBC and Credit Suisse send a clear message that the Commission remains committed to ensure a sound and competitive financial sector that is essential for investment and growth. Foreign exchange spot trading activities are one of the largest financial markets in the world. The collusive behaviour of the five banks undermined the integrity of the financial sector at the expense of the European economy and consumers”.

The Commission’s investigation focused on the trading of the G10 currencies, the most liquid and traded currencies worldwide. When companies exchange large amounts of different currencies, they usually do so through a Forex trader. The main customers of Forex traders include asset managers, pension funds, hedge funds, major companies and other banks.

read more @
https://ec.europa.eu/commission/presscorner/detail/en/ip_21_6548

#29 jess on 12.02.21 at 3:57 pm

rent by necessity’ group of Canadians? sat what?
”“Not to be confused with affordable housing, Workforce Housing ?

https://pressprogress.ca/big-property-company-tells-investors-its-business-strategy-focuses-on-essential-workers-in-provinces-where-theres-no-rent-controls/

#30 twofatcats on 12.02.21 at 3:58 pm

CRA going after house flippers:

https://financialpost.com/personal-finance/taxes/liberals-plan-to-go-after-house-flippers-but-the-cra-is-already-doing-so

Dec 2 Today’s flipped ‘principal residences’

https://www.zolo.ca/hamilton-real-estate/129-luscombe-street#sold-history

https://www.zolo.ca/hamilton-real-estate/175-bluebell-crescent#sold-history

https://www.zolo.ca/toronto-real-estate/47-wildlark-drive#sold-history

#31 Shawn Allen on 12.02.21 at 3:59 pm

Money Created stays in banks

Nonplused at 22 asked and said:

Where is the excess money supposed to go if not into prices? People’s bank accounts? Maybe at first, but it isn’t going to stay there any longer than the money they already have does.

*****************************
More money supply no doubt does lead to higher prices.

But the money does not go anyplace. Think of any transaction involving goods, services and assets paid for with money. Money flows from one bank account to another. Spending $100k of money does not reduce the total in bank accounts by a penny.

Borrowing money creates money. Repaying loans reduces the money supply.

And we don’t even need to bother mentioning paper money which is basically obsolete.

#32 IHCTD9 on 12.02.21 at 4:07 pm

#7 SunShowers on 12.02.21 at 2:39 pm
“Government overspending, overborrowing and the consequent creation of money by central banks has brought us to this point.”

The act of simply issuing more currency does not debase the dollar for the same reason you don’t see billionaires lighting mountains of hundred dollar bills on fire to drive up the value of the money they didn’t burn.
___

Uhhh, you don’t understand how it works…

#33 greyhoune on 12.02.21 at 4:08 pm

gold – which has been a lousy performer for the past decade.
How about, “past performance is no guarantee of future results”

#34 Phylis on 12.02.21 at 4:11 pm

#4 Griffith on 12.02.21 at 2:35 pm
Back to the days of sweet clickity clacking of relays. Those panels will be enormous.

#35 Dolce Vita on 12.02.21 at 4:12 pm

“Don’t save. That would be a start. Invest.
-Garth

Dow Jones 2210 hr CET

+617.75 pts

Don’t regret having bought low 2 days ago instead of yesterday.

I never get market timing correct. Just the consistent ‘invest” part for my threadbare portfolio.

#36 Prince Polo on 12.02.21 at 4:22 pm

Speaking of real-estate to the moon; which of these is most likely:
a) GTA becomes Monaco-north with yachts & supercars galore
b) GTA housing is h’m’r’d mercilessly over the next decade via price de-escalations
c) Our dear Photo-op Minister decrees that mortgage amortizations can be extended by generations

Yep – lack of leadership has me leaning heavily towards option C. Mortgage rate increases be damned! 75-yr amortizations are the popular answer. What evidence do we have that Mr. Socks would do the right thing? Maybe we can ask the very honourable JWR about that!

#37 TurnerNation on 12.02.21 at 4:25 pm

Blog Dogs making plans for 2020:
– January: Max out TFSA.
– March: 4th Booster.
– July 5th Booster.
– December: 6th Booster.

——–

— Life in Kanada -All the old culture must be torn down Comrades! Who would pay for this experience.

Winnipeg Free Press:
“Jets’ prices too high for many fans; Attendance falling across NHL as admission costs climb”

Also Winnipeg Free Press:
““Mask Compliance Team on Patrol at Winnipeg Arena
Staff at Canada Life Centre clad in bright blue vests bearing the words “mask compliance” have become a new feature at Winnipeg Jets games.”

Umm how many people have you fired this month? But the hospital capacity guys!
“‘We are on our last legs’ – Chronic shortage leaves one in five Winnipeg ER and critical-care nursing positions vacant”


— Saskstoon:

https://mikestack.substack.com/p/small-turnout-for-riders-playoff
“Mosaic Stadium was half empty, or half full depending on how you view things I suppose, for their West Division playoff game against Calgary on Sunday. This, despite the fact it was a very important game and the weather was perfect.:
Here is what I know – the Riders sold out their home opener and they also sold out Labour Day right before more restrictions (namely the vaccine passport) were introduced. Every home game crowd since then has been exceedingly low.

#38 IHCTD9 on 12.02.21 at 4:29 pm

#22 Nonplused on 12.02.21 at 3:11 pm
#7 SunShowers on 12.02.21 at 2:39 pm
“Government overspending, overborrowing and the consequent creation of money by central banks has brought us to this point.”

The act of simply issuing more currency does not debase the dollar for the same reason you don’t see billionaires lighting mountains of hundred dollar bills on fire to drive up the value of the money they didn’t burn.

———————————–

I’m glad you don’t work in banking!

First of all billionaires don’t have mountains of 100 dollar bills and it would be very hard for them to acquire that kind of cash. They would have to sell their business interests.

But if they did burn mountains of money, yes, it would have the same effect as the central bank withdrawing cash from circulation: deflation. The remaining money would get more valuable. (Although probably not by enough to offset the billionaire’s losses. There is a lot more money in circulation than even the billionaires could burn.)

So if that is true, that withdrawing money causes deflation, why wouldn’t printing excess money cause inflation? Where is the excess money supposed to go if not into prices? People’s bank accounts? Maybe at first, but it isn’t going to stay there any longer than the money they already have does.
___

SS’s Billionaire is a bad example, he doesn’t need the money so it’s sitting in his bank account doing nothing other than floating on the Forex market. It’s not being spent, so it’s not contributing to inflation of assets.

Obviously taking a billion dollars cash out of the safe where it has been sitting for the last ten years and burning it does nothing to anyone except for making the billionaire, 1 billion dollars poorer.

#39 Dolce Vita on 12.02.21 at 4:30 pm

#14 Don Guillermo

I was going to originally go to Puglia (Bari, Brindisi, Lecce and Santa Maria di Leuca).

Because of Omicron decided to do an Italian “Staycation” which for me is Venezia – 62 km as the bird flies from Pordenone.

I have been to visit her I would say a few 100 times, even lived there for a number of months.

Leaved thru “The City of Falling Angels” (I am a sucker for compelling titles) and liked it. Same idea as Goethe’s “Italian Journey” – Goethe is mandatory reading in Deutschland…why there are so many Deutsche tourists in Italia.

Venezia has become, in my view, a giant AirBnB Disneyland for tourists. Few Veneziani left there, too expensive thanks to tourists. They all live in Mestre or the next train stop away Mogliano Veneto.

In those 100’s of time, some early in the morning or late at night, you see them come from or go to work.

Even with all that, she is still:

La Serenissima
Venezia Unica

My favorite time when living there was early in the morning. I would with my espresso to the rooftop terrazzo and listen. All that I would hear is:

Mothers waking their children up to go to school, the sound of dishes and cutlery noises during colazione.

From Shakespeare to Byron to Berendt:

Venezia Inspires.

– Incanta il cuore.

#40 Tom Jones on 12.02.21 at 4:37 pm

Not sure how you can write this, understand the analysis, and still come away with the conclusion that Bitcoin is not an investable asset. It’s digital property for the next generation that has grown up with a digital everything world. It’s inevitable, and not having a small allocation seems imprudent.

Backed by nothing. What could go wrong? – Garth

#41 CanaFuna on 12.02.21 at 4:47 pm

Can you think of a more fun to govern and be a political and PM than over the past 2 years for the Liberals?

Name me any other time it was this much fun.

Endless spending.
No-limit credit card.
Money from the sky.
Do what you want.
No consequences.
Just empty talk.

Lovely stuff.

Rock stars don’t have it this good.

#42 Ponzius Pilatus on 12.02.21 at 4:51 pm

#38 Dolceamus
Leaved thru “The City of Falling Angels” (I am a sucker for compelling titles) and liked it. Same idea as Goethe’s “Italian Journey” – Goethe is mandatory reading in Deutschland…why there are so many Deutsche tourists in Italia.

From Shakespeare to Byron to Berendt:

Venezia Inspires.
 —————
You forgot another compelling title: A Death in Venice: By Thomas Mann.
When you go in the heat of the summer, the stench from the stagnant water can be unbearable.

#43 Brett in Calgary on 12.02.21 at 4:53 pm

This is one of your best posts, ever. I think the gold to house comparison is interesting. As my father in-law says, “how much can you buy for an hour’s worth of work”? Much less than last year, that is for sure.

#44 Literally Hitler on 12.02.21 at 4:57 pm

Dagwood’s Blondie or Deborah Harry’s Blondie?

#45 Billy Buoy on 12.02.21 at 4:57 pm

Why did our government allow housing to get out of control?

Answer: – What else was creating growth in Canada?

– The banks make $$ off housing.

– The banks are too big to fail and control the
government. How else can any of their potential
losses be backstopped by CHMC aka taxpayers.

– The banks take next to no risk and make billions.

The game is 100% fixed in the banks favour. Nice odds.

Re: Federal Budget : Never forget the budget “balances
itself” according to you know who.

Finally, The TRUTH to sum up EVERYTHING since 2009 came from Garth’s article OMNIFLOP last Friday.

I present :
” In March of 2020, when the world looked dark, Canada’s financial regulator took steps to protect the banking system. Nothing is more central to the health and viability of the economy than the banks. They’re legally designated as “domestic systemically important” or D-SIB – and that’s why there are formal ‘bail-in’ provisions now in place virtually eliminating the chance of failure, wiping out your pathetic GICs.”

The banks control the governments who make the laws to FULLY protect the bank from ANY ACTIVITY they engage in…and YOU the taxpayer WILL BAIL them out FOREVER.

THINK about it…and pray to your overlords at Bay Street.

#46 Tom Jones on 12.02.21 at 4:59 pm

Not sure how you can write this, understand the analysis, and still come away with the conclusion that Bitcoin is not an investable asset. It’s digital property for the next generation that has grown up with a digital everything world. It’s inevitable, and not having a small allocation seems imprudent.

Backed by nothing. What could go wrong? – Garth

A bit flippant of you. I can tell you haven’t done the work on the asset class. What gives anything in this world value?

Paul Tudor Jones, Druckenmiller, Dalio, etc. all can’t be filled up on hopium. There’s something there.

#47 Ponzius Pilatus on 12.02.21 at 5:02 pm

#21 Quintilian on 12.02.21 at 3:08 pm
#11 crowdedelevatorfartz
“Balancing the budget should be the Law.”

Thoughtless brash, uninformed statement.

Even the nutbars from that right wing radio station that brainwashed you would disagree.

Deficit spending is a perfectly useful and appropriate tool when used at the right time to the right degree.

Misuse and abuse by politicians is what should be outlawed.
———–
I go with Quinty on this one.
CEF, I suggest you read up on FDR, The Great Depression and John Maynard Keynes.

#48 Dolce Vita on 12.02.21 at 5:11 pm

#14 Don Guillermo

Forgot to mention off tourist season (mid-Oct to mid-May) best time to go and the worst weather you will get is like Victoria or Vancouver. Usually 3-4 deg C warmer.

This year though is weird.

Lots of tourists from the rest of Europe. From talking to them they are all escaping unusually cold weather esp. in the “Paesi Freddi” as we call them but also France, Switzerland, etc.

From talking to them it is an escape not only from the weather but from Covid.

They feel safe in Italia with low cases counts relative to the rest of Europe per capita and a disciplined populace what with the Green Pass, masks and distancing.

So this year, all bets are off for a “low season” in Italia.

Also, she tests her people to ensure their health like the Brits unlike other countries that talk a good story but in the end “deeds and actions” speak louder than words:

https://i.imgur.com/fqMUC7h.png

#49 enthalpy on 12.02.21 at 5:14 pm

Certainly ain’t saving over here. Just got back from Mexico.
Wow, talk about long overdue. Everyone needs to get back out there. Life is being lived and boy do we all need a break from this circus up here.

#50 Shawn Allen on 12.02.21 at 5:18 pm

How to achieve return of inflation plus tax

#25 Victor on 12.02.21 at 3:26 pm

Question – for non registered, return should be inflation + tax. If the tax is 20, 30+ %, how this is attainable? Or I missed the point?

Unless you are joking (which is fine) I imagine that what you missed was math class.

Say inflation is 5% and tax is 30% (of profits). You need return of 5%/ (1-0.30), That’s 7.14%. Tax is 30% of 7.14% = 2.14%, You are left with 5% after tax, nothing after inflation. You need more than 7.14% to get a real return. You don’t need to make 35% but it’s okay to do so.

#51 Millennial 1%er on 12.02.21 at 5:26 pm

The sad part is that many young people are running headfirst into mortgage debt that they cannot afford due to this environment. A self perpetuating cycle that spells doom for everyone.

#52 NOSTRADAMUS on 12.02.21 at 5:30 pm

GRAVE DANCER!
Thoughts on an old chestnut. Anyone who refrained from investing over the past 5 years in almost all asset classes, such as stocks, real estate, etc, has apparently missed out on the once in a lifetime monetary gains. And by the way, never to be seen again. In case it isn’t obvious, you only miss out if you get out, at, or near the very top of the market. Big secret, the vast majority who have ridden the bull all the way up will ride it all the way down again. Such is, today’s investor psychology, stay the course, be fully invested at all times, there is more to come. However, the drip-drip-drip death spiral of what was once only a monetary mirage will shortly become crystal clear. For those who sat on the sidelines, this means you missed out on nothing. Sleep soundly, for the man with cash, your day to grave dance is coming. Amen Brother.

#53 Voila! on 12.02.21 at 5:31 pm

Can you imagine a world where you didn’t have to be subjected to the incoherent ramblings of a TurnerNation … the incessant chatter and self-aggrandizing comments of serial poster CEF… the ongoing childish name-calling antics of Sail Away, Ponzies and the like … or the near daily suckups from a 3rd world country poster?

Well, now you can! I’ve written an extension to my browser that does what Garth won’t do. It allows me to filter out all of the posters whom I have no time for … as if they didn’t exist! (WordPress blogs only so far).

Should have done this years ago! It’s like a breath of fresh air.

#54 crowdedelevatorfartz on 12.02.21 at 5:34 pm

@#39 Tom Jones
“Not sure how you can write this, understand the analysis, and still come away with the conclusion that Bitcoin is not an investable asset.”

+++

I listen to the cheese “Bitcoin” ads on the radio while stuck in Lower Brianland traffic daily.

“Dude! You haven’t invested in Bitcoin yet? It’s like a totally new way to invest! ”
Cue the background singers
“Bit. Bit. Bit. Bitcoin….!”

https://www.youtube.com/watch?v=RX4nInVOQNE

Think of how many tattoos you can get when you’re a bitcoin Quintillionaire …..
So Flippin EASY Dude!

#55 Blondie on 12.02.21 at 5:37 pm

So now we have the result. Inflation is the greatest in three decades – since back when Blondie was still hot.

Careful what you say about Blondie! She’s old enough to be your older sister. Besides, hot is relative …. she’s still “smouldering” in my books.

#56 M. Essaie on 12.02.21 at 5:41 pm

Saint Margaret Thatcher opined that any government presiding over inflation was in essence stealing from the electorate.

#57 IHCTD9 on 12.02.21 at 5:46 pm

#30 Shawn Allen on 12.02.21 at 3:59 pm
Money Created stays in banks

Nonplused at 22 asked and said:

Where is the excess money supposed to go if not into prices? People’s bank accounts? Maybe at first, but it isn’t going to stay there any longer than the money they already have does.

*****************************
More money supply no doubt does lead to higher prices.

But the money does not go anyplace. Think of any transaction involving goods, services and assets paid for with money. Money flows from one bank account to another. Spending $100k of money does not reduce the total in bank accounts by a penny.

Borrowing money creates money. Repaying loans reduces the money supply.

And we don’t even need to bother mentioning paper money which is basically obsolete
——-

I like to think of it as the total volume of travelling $ is what drives inflation. If the money supply is high, but everyone just stuffed it under their mattress, there’d be no inflation because it’s not moving. Behind the idea that increasing the money supply raises prices – is the assumption that it will be spent.

So the dollars travel from one bank account to another, but the more volume in transit, the more total work the $’s are doing, and the higher prices go until the volume slows down. Total global deposits remain the same, purchasing power drops via higher prices.

An amateur’s perspective :D

#58 Honest Realtor on 12.02.21 at 5:51 pm

An interesting financial intrigue to consider today, for sure.

But the bottom line remains – real estate is solid and on the way up over time. Add in a massive projected increase in immigration to Canada, and properties will likely at least triple in value by the 2040s.

Will any other investment even come close?

#59 PastThePeak on 12.02.21 at 6:09 pm

Sigh. A man of your stature should be above cherry picking very select dates to try and make a point.

Outside of the purchasing gold during 2010/11/12, it was a fine investment for the last two decades as a stabilizing element to a portfolio.

Owning the TSX is all the PM exposure a reasonable person should have. – Garth

#60 Wrk.dover on 12.02.21 at 6:11 pm

#38 Dolce Vita on 12.02.21 at 4:30 pm
#14 Don Guillermo
Because of Omicron decided to do an Italian “Staycation” which for me is Venezia.
______________________________________

Just curious, what does that town smell like, when you don’t smell food?

#61 Linda on 12.02.21 at 6:11 pm

So what is the solution to this debasement of currency? Should we all of us join the ‘preppers’ movement & start storing guns, ammo, toilet paper et al in some bunker somewhere?

More practically in my view would be folks learning to grow their own food. I noticed quite a few new raised beds being installed around our neighborhood over the past couple of years. While the vast majority of gardens still focus on flowers a growing number have switched over to vegetables or have added some veggies to the garden display.

#62 Wrk.dover on 12.02.21 at 6:18 pm

Oops, sorry Dolce, Brother Ponzi already covered it!

#63 Sam on 12.02.21 at 6:18 pm

#2 Ponzius Pilatus on 12.02.21 at 2:31 pm

>> “All jobs are slavery.”

> Maybe your jobs were. Worse thing you can do for a living is something you dont enjoy.

doing anything for 40 years will eventually seem like slavery.

When I was doing contracts for small businesses I can’t remember how many times people told me

“Once upon a time I loved X (insert X here – flowers, books, guitars, cameras, jet-skis in the bahamas) … nothing like staring at X from 40 to 80 hours a week to make you hate X”.

#64 T-Man on 12.02.21 at 6:21 pm

No sane person wants our monetary system to implode, as flawed as it is. Controlled demolition would be better. Will we be allowed to elect better leaders before it’s too late?

#65 JSS on 12.02.21 at 6:24 pm

#58 Honest Realtor on 12.02.21 at 5:51 pm
An interesting financial intrigue to consider today, for sure.

But the bottom line remains – real estate is solid and on the way up over time. Add in a massive projected increase in immigration to Canada, and properties will likely at least triple in value by the 2040s.

Will any other investment even come close?

———-

In the Vancouver/lower mainland region and parts of Ontario (GTA, K-W, hamilton etc), yes you are correct. Real estate has been a good investment.

For other parts of Canada, no.
Reference Alberta real estate prices over the last fifteen years

#66 Nonplused on 12.02.21 at 6:25 pm

#23 Dave on 12.02.21 at 3:14 pm
The Feds have caused this bubble by making it too easy for people to buy houses. There should be much higher taxes on people who buy second homes in cities where there are housing shortages. Buying a cabin at the lake is one thing, but why do we let greedy specers buy multiple properties during a housing shortage. The feds should tax the %^#$% out of them.

——————————–

You’d kill the rental market, which would harm more people than it would help.

People, you can’t make something cheaper by taxing it, no matter how convoluted the rules.

#67 Steven Rowlandson on 12.02.21 at 6:34 pm

The so called money supply grows every time someone takes out a loan that is financed without investors providing existing capital. The loan is a book keeping entry and is usually some kind of a security like a bond or some other debt instrument including cash. If debtors pay off debt at a lessor rate than new debt being contracted we have positive inflation. If in balance we have no inflation and if debt is being expunged by payment or default faster than new debt creation we have deflation.
What we do not have is a permanent money supply except for the coinage and no value backing up the money supply as in ounces or grams of silver or gold.

So under the right conditions we could have the money supply go to equal to or less than zero. No joy for Canadians without the shiny stuff and then may be.

#68 Do we have all the facts on 12.02.21 at 6:37 pm

I think many contributors to this blog have forgotten that Canada has a mixed economy that supports private companies while protecting the basic quality of life of all citizens.

All this ‘moving to the left’ chatter by contributors to this blog ignores the simple fact that the majority of new money created by the Bank of Canada through asset purchases and by financial institutions through the issue of mortgages and loans ended up in the pockets of the wealthy.

Both monetary and fiscal policies implemented during the Covid 19 crisis leaned strongly to the right. All you have to do is track where increases in the net worth of Canadian citizens actually occurred. Hint it wasn’t in the net worth of the bottom 80% of Canadian citizens

It is difficult to claim that the end result of what happened to $500 billion of Government of Canada debt was a shift to the left. Just take the time to track where the substantial increase in money supply ended up not where it may have started.

Some shift to the left!!

People who received CERB and spent it did not increase their net worth. Seems easy to grasp. – Garth

#69 Tudval on 12.02.21 at 6:42 pm

In 1955 you could buy a detached home in Leaside TO for $10k. 10 years later – same property would be $25k. Another 25 years later, in 1990 the price would be ten times that, #250k, or an astounding 25 times the price 25 years before. Another 21 years brings us up to today’s prices , which are “only” 6 times higher than 1990. So no, destruction of money has not been historic in the last two decades, we’ve seen worse and without much consequence except for the occasional 25% crash that would normally recover within 5 years or so (last time it happened in 2017).

Now tell us how much the house cost in multiples of average income at the same points. – Garth

#70 Shawn Allen on 12.02.21 at 6:48 pm

#45 Billy Buoy on 12.02.21 at 4:57 pm

The game is 100% fixed in the banks favour. Nice odds.

**************************
So let’s say you are right. How long have you been massively invested in bank shares? If not, why not?

#71 Tudval on 12.02.21 at 6:48 pm

One error in my previous post – the price increased 25 times between 1955 and 1990 and that would be 35 years, not 25.

Another point I want to make is that we need to look at prices of new housing in new areas to properly gauge affordability. Leaside was a cow field in the 1950’s. Today is one of the most desirable area in the city. We need to look at prices of new developments north or east of the city OR prices of new condos within the old city limits (the only housing still being developed) .. the picture that emerges is not so dire.

#72 Shawn Allen on 12.02.21 at 6:51 pm

#57 IHCTD9 on 12.02.21 at 5:46 pm

I like to think of it as the total volume of travelling $ is what drives inflation. If the money supply is high, but everyone just stuffed it under their mattress, there’d be no inflation because it’s not moving. Behind the idea that increasing the money supply raises prices – is the assumption that it will be spent.

So the dollars travel from one bank account to another, but the more volume in transit, the more total work the $’s are doing, and the higher prices go until the volume slows down. Total global deposits remain the same, purchasing power drops via higher prices.

An amateur’s perspective :D

******************************
Looks right to me.

#73 crowdedelevatorfartz on 12.02.21 at 6:53 pm

@#53 Voila!

“Can you imagine a world where you didn’t have to be subjected to the incoherent ramblings of a TurnerNation … the incessant chatter and self-aggrandizing comments of serial poster CEF… the ongoing childish name-calling antics of Sail Away, Ponzies and the like … or the near daily suckups from a 3rd world country poster?”

++++

That magical world is called Disney+ isn’t it?

#74 IHCTD9 on 12.02.21 at 6:56 pm

#66 Nonplused on 12.02.21 at 6:25 pm
#23 Dave on 12.02.21 at 3:14 pm

——————————–

People, you can’t make something cheaper by taxing it, no matter how convoluted the rules
————

Depends. Here in Ontario the government started taxing the living crap out of tobacco 30 years ago. The result was the birth of the Native tobacco industry, a loss for the Province of near 80% of the market, and a return to prices circa 1990.

#75 PastThePeak on 12.02.21 at 7:05 pm

#53 Voila! on 12.02.21 at 5:31 pm
Can you imagine a world where you didn’t have to be subjected to the incoherent ramblings of a TurnerNation … the incessant chatter and self-aggrandizing comments of serial poster CEF… the ongoing childish name-calling antics of Sail Away, Ponzies and the like … or the near daily suckups from a 3rd world country poster?

Well, now you can! I’ve written an extension to my browser that does what Garth won’t do. It allows me to filter out all of the posters whom I have no time for … as if they didn’t exist! (WordPress blogs only so far).

Should have done this years ago! It’s like a breath of fresh air.
+++++++++++++++

Please share!!!

#76 tbone on 12.02.21 at 7:08 pm

TD bank had quite the run up today and is boosting its dividend 13 % . Me likes .

#77 crowdedelevatorfartz on 12.02.21 at 7:08 pm

@#47 Predepression Ponzie.
“I go with Quinty on this one.
CEF, I suggest you read up on FDR, The Great Depression and John Maynard Keynes.”
+++

Hmmm,
During The Great Depression the US increased deficit spending and left taxes alone.
Trudeau and his non Finance, Finance Minister has blown the doors off Deficit spending ( with no end in sight) AND is INCREASING taxes………

Not a brilliant startegy if the govt expects the economy to jump start after Covid ( 2023? 2024?) especially when one realizes that the economy runs on Mr and Mrs Taxpayer spending money on “stuff”.

Ain’t gonna be too many people spending money on “stuff” as their payroll taxes ( Cpp and EI) jack up Jan 1st 2022 and the second Tax Thor Hammer comes in March.

Taxes for more rainbow crosswalks and govt business cards, emails and letters that say (He/She/They) after every name.
I feel better knowing my tax dollars aren’t being squandered on frivolous, politically correct agendas that no one really cares about….. .
Don’t you?

At least Biden is upgrading infrastructure …..as ours falls apart…..

#78 Bezengy on 12.02.21 at 7:19 pm

#47 Ponzius Pilatus on 12.02.21 at 5:02 pm
#21 Quintilian on 12.02.21 at 3:08 pm
#11 crowdedelevatorfartz
“Balancing the budget should be the Law.”

Thoughtless brash, uninformed statement.

Even the nutbars from that right wing radio station that brainwashed you would disagree.

Deficit spending is a perfectly useful and appropriate tool when used at the right time to the right degree.

Misuse and abuse by politicians is what should be outlawed.
———–
I go with Quinty on this one.
CEF, I suggest you read up on FDR, The Great Depression and John Maynard Keynes.

—–

Yup….everyone should study John Maynard Keynes.

In bad times, governments should run deficits, said Keynes, but good times usually both precede and follow bad times. In good times, he said, governments should run surpluses.

https://theorca.ca/visiting-pod/we-cant-dodge-deficits-and-debt-forever/

#79 Sail Away on 12.02.21 at 7:34 pm

#53 Voila! on 12.02.21 at 5:31 pm

I’ve written an extension to my browser that does what Garth won’t do. It allows me to filter out all of the posters whom I have no time for … as if they didn’t exist!

Should have done this years ago! It’s like a breath of fresh air.

——–

Good job.

It is always easier to maintain one’s opinions when dissenting ideas and facts are kept far away.

#80 Som Itay on 12.02.21 at 7:36 pm

Very interesting and eye-opening post.

Hard to deny that Bitcoin, with its fixed supply that cannot be manipulated like fiat currencies, isn’t a fantastic hedge. I’m allocating a small % as insurance.

#81 Jm on 12.02.21 at 7:37 pm

Question… etf VBAL, XBAL, HBAL, an easy way to get into investing? Applying your 60/40 exposure?

#82 Mehling on 12.02.21 at 7:48 pm

“Liberals plan to go after house flippers, but the CRA is already doing so”

https://financialpost.com/personal-finance/taxes/liberals-plan-to-go-after-house-flippers-but-the-cra-is-already-doing-so

#83 wallflower on 12.02.21 at 7:59 pm

Poster above has link to financial post article regarding CRA going after flippers. Yep. Let me tell you what they are doing.
They are sending letters that say, Please refund the GST credit.
And, comically, they are sending these letters to the unit that has already been flipped!!!!!
Serious.!
Comedy 101 CRA and specuvestors

#84 Habitt on 12.02.21 at 8:04 pm

The younger crowd has the most votes now. It’s in their corner. Time for action. Hang onto your wallet. Nuff said

#85 Albertaguy in AB on 12.02.21 at 8:09 pm

Voila! Yes please…how can i get a copy

#86 Robert Ash on 12.02.21 at 8:12 pm

Yes John comments, about being Manipulated is an understatement, how about Wealth Destruction, Counterfeiting, Fudging the Balance sheet, no respect for the Monetary System. It is counterintuitive, for all our lives to Save in some form, to take care of ourselves, and allow any Government to destroy that necessary life long goal, if the system is to work. Think about the Older folks, who played by the rules, and get no interest income, while RBC CC’s charges 24.99%. Why not some restraint. Some useful, programs, to help the average Canadian. Back to Basics.

#87 Dr V on 12.02.21 at 8:18 pm

2 Ponz – well said

63 sam – my BIL was an HD mech in the forest industry.
Eventually a couple of injuries caught up with him and he couldnt monkey wrench 8-10 hrs 5 days a week. Got a brief desk job at a service centre and is now retired.

What does he do now? Fixes things. But now they are
his things.

#88 IHCTD9 on 12.02.21 at 8:20 pm

#68 Do we have all the facts on 12.02.21 at 6:37 pm
I think many contributors to this blog have forgotten that Canada has a mixed economy that supports private companies while protecting the basic quality of life of all citizens.

All this ‘moving to the left’ chatter by contributors to this blog ignores the simple fact that the majority of new money created by the Bank of Canada through asset purchases and by financial institutions through the issue of mortgages and loans ended up in the pockets of the wealthy.

Both monetary and fiscal policies implemented during the Covid 19 crisis leaned strongly to the right. All you have to do is track where increases in the net worth of Canadian citizens actually occurred. Hint it wasn’t in the net worth of the bottom 80% of Canadian citizens

It is difficult to claim that the end result of what happened to $500 billion of Government of Canada debt was a shift to the left. Just take the time to track where the substantial increase in money supply ended up not where it may have started.

Some shift to the left!!
———

Hehehe, great post! You got the results nailed down 100%. But you missed out on the intent. Looking at the results of lefty government policy, you can figure out what the intent was by reversing it to the opposite of what was achieved.

In the case of Canada, Trudeau wanted to help the poor but instead made the rich richer. He wanted to make housing more affordable, but instead made it more expensive. He tried to save Canadians from COVID, but instead he financially destroyed a country that was once one of the greatest on earth.

This is the essence of left wing leadership. Trying to do something, but achieving the direct opposite. Trudeau was genuinely trying to help those who needed it, but he just doesn’t have the brainpower to make it happen, so ends up doing the opposite of what he hoped to achieve. 100% left wing right there. I’ve been watching my net worth shoot to the moon since the day he took office.

When rich folks start having trouble stacking the millions, that’s when you know a right wing government is running the show. If rich folks need to hire dump trucks to make a bank deposit, that’s when you know a guy like Trudeau is in charge.

#89 Jibber Jabber on 12.02.21 at 8:32 pm

#45 Billy Buoy on 12.02.21 at 4:57 pm
Why did our government allow housing to get out of control?

Answer: – What else was creating growth in Canada?

– The banks make $$ off housing.

* * * * * *

You are absolutely right, Billy Buoy.

Recently, my wise father once said to my brother and I as we sat with him on his deathbed … “boys, there are two types of people in the world. Those that work and play hard, make great decisions, and associate themselves with winners rather than expending energy on lost causes.”

Regrettably, he took his last breath before he could tell us about the other type of person but we both knew it wasn’t important anyway. We had already heard enough and it was then that we knew who we wanted to be.

#90 Do we have all the facts on 12.02.21 at 8:38 pm

Garth your response was exactly the point I was trying to make. CERB and other programs initiated in response to the economic lockdown were intended to protect the quality of life of Canadian citizens.

No doubt there were some abuses but in the end most of the $500 billion of borrowed money eventually ended up adding to the net worth of the wealthy. I was not passing judgement only pointing out that you could hardly call the end result of quantitative easing a shift to the left.

To suggest that protecting the basic quality of life of all a Canadian citizens after our economy was shutdown as a form of ‘socialism’ is just a touch pejorative. CERB definitely could have been implemented more effectively but the majority of net benefits would still have accrued to the wealthy.

#91 He's just portending on 12.02.21 at 8:46 pm

#52 NASTYDUMBASS on 12.02.21 at 5:30 pm

GRAVE DANCER!

……..A whole lot of stupid things … ending with even more stupid things!

BTW, I want that thingy that guy mentioned for filtering out dunces like this?

#92 BIG LEAFS FAN on 12.02.21 at 8:57 pm

If the Liberals raise the CMHC lending limit to $1,250,000 from the existing $1,000,000 amount will they also adjust the down-payment requirement as well? ie: 5% on first $500,000 and 10% on amount above $500,000 to $1,000,000 currently.
Say go 5% down up to $1,250,000 ?

#93 greaterfool on 12.02.21 at 9:17 pm

bank is too big to fail
mortgage/RE is too big to fail
PM who will keep spending is voted to power by Canadians

so what’s the problem here? it is all our Canadians own choice. If you can’t beat/change them, join them.

Sad though.

#94 Leslie from Lilloet on 12.02.21 at 9:29 pm

#53 Voila! on 12.02.21 at 5:31 pm

Can you imagine a world where you didn’t have to be subjected to the incoherent ramblings of a TurnerNation … the incessant chatter and self-aggrandizing comments of serial poster CEF… the ongoing childish name-calling antics of Sail Away, Ponzies and the like … or the near daily suckups from a 3rd world country poster?

Well, now you can! I’ve written an extension to my browser that does what Garth won’t do. It allows me to filter out all of the posters whom I have no time for … as if they didn’t exist! (WordPress blogs only so far).

Should have done this years ago! It’s like a breath of fresh air.

______________

Me too. I’ve been able to avoid the comments from those narcissistic idiots you named and about a dozen others. Found a web tool that works very well to filter. It started for me three years ago, getting tired of the most frequent posters here like Mark and Smoking Man.

It’s a relief to avoid the trash.

#95 Don't bet against the Fed on 12.02.21 at 9:37 pm

Prohibition Edward Island: Close the Stores, we have Covid.

Beginning in 1901, the province would enact prohibition and while the rest of the country would follow years later and repeal it soon after, Prince Edward Island doubled down. The last major province to repeal prohibition was Nova Scotia, which had it in place for nine years from 1921 to 1930. Prince Edward Island would continue for nearly two decades after that.

It would not be until 1948 that the province finally repealed prohibition.

Today, I’m looking at the nearly half century of prohibition in Prince Edward Island.

#96 ImGonnaBeSick on 12.02.21 at 9:45 pm

#89 Jibber Jabber on 12.02.21 at 8:32 pm

I always thought the saying went;

“There are two types of people in this world. Avoid them both.”

“Until next time friends!”

#97 PREFERRED SHARES on 12.02.21 at 9:45 pm

Do some research on why all fiat systems have failed.

Inflation is caused by money printing.

Isn’t it obvious? ….. the more extra dollars in circulation the more extra dollars individuals are willing to give up for products and services until we get to a point in which the money supply is greater than the ability to create products and services.

Then the fiat of that country becomes worthless.

#98 AM in MN on 12.02.21 at 10:07 pm

Government overspending at these levels can only happen if they have the central bank print money for them. Borrowing and taxing of sound money prevents they types of extremes we see now.

The money printing is really a wealth tax on everything that is denominated in C$, but assets like a house can re-price much faster than your paycheck. Add in the tax advantages of asset inflation over payroll inflation and you can see why the serfs get pooched.

One could moan about it, but the serfs voted for it, thinking they were being looked after. It isn’t the same as being conquered by some invading army and enslaved, it’s more like Benjamin Franklin’s remark that people willing to give up their freedom for the illusion of security, end up with neither.

Many people in the western countries who grew up thinking that the post-war middle class structures were normal, are going to find out that they weren’t, they were an aberration to the more normal landlord-serf relationship, which is what we are returning to.

Now get back to work and pay the master his due!

#99 Bobbie Bird on 12.02.21 at 11:00 pm

The solution to Trudeaus hyperinflation is to leave Canada to live and work where hyperinflation isn’t a problem. I live in a country where professional salaries are 50% higher, taxes are 50% lower , luxury rental ( a pool villa on a tropical island weekend getaway) , a luxe city condo, gas, insurance, clothes and the cost of living for groceries, cell phones, internet, water and electric bills etc are around 1/5 th of what I would pay in Canada. Get smart, get out. Do something other than bitch how you list your country . It’s over, gone, you lost. Don’t be squeezed out if the profits you’re right to take, instead of being drained drip drip drip.

#100 Don't bet against the Fed2 on 12.02.21 at 11:04 pm

Well I Did it,

transferred all my TFSA gains tax free !

am I day trading? Not

#101 DON on 12.02.21 at 11:18 pm

#91 He’s just portending on 12.02.21 at 8:46 pm
#52 NASTYDUMBASS on 12.02.21 at 5:30 pm

GRAVE DANCER!

……..A whole lot of stupid things … ending with even more stupid things!

BTW, I want that thingy that guy mentioned for filtering out dunces like this?

**********
How is that anyway to refute any claims?

Trolling trolling trolling
Boy your head is swollen
Dumbass!

Blank Stare

#102 Shawn Allen on 12.02.21 at 11:25 pm

#97 PREFERRED SHARES on 12.02.21 at 9:45 pm

Do some research on why all fiat systems have failed.

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

They have all failed? That would be except for all the ones that have not failed?

#103 Nonplused on 12.02.21 at 11:35 pm

#74 IHCTD9 on 12.02.21 at 6:56 pm
#66 Nonplused on 12.02.21 at 6:25 pm
#23 Dave on 12.02.21 at 3:14 pm

——————————–

People, you can’t make something cheaper by taxing it, no matter how convoluted the rules
————

Depends. Here in Ontario the government started taxing the living crap out of tobacco 30 years ago. The result was the birth of the Native tobacco industry, a loss for the Province of near 80% of the market, and a return to prices circa 1990.

———————————-

Fair point, but I wasn’t discussing extrajudicial or underground stuff. In the case of houses, which can’t be bought on the reserve, taxing them cannot make them less expensive.

#104 Nonplused on 12.02.21 at 11:39 pm

#72 Shawn Allen on 12.02.21 at 6:51 pm
#57 IHCTD9 on 12.02.21 at 5:46 pm

I like to think of it as the total volume of travelling $ is what drives inflation. If the money supply is high, but everyone just stuffed it under their mattress, there’d be no inflation because it’s not moving. Behind the idea that increasing the money supply raises prices – is the assumption that it will be spent.

So the dollars travel from one bank account to another, but the more volume in transit, the more total work the $’s are doing, and the higher prices go until the volume slows down. Total global deposits remain the same, purchasing power drops via higher prices.

An amateur’s perspective :D

******************************
Looks right to me.

————————————-

Ya, I guess I implicitly held velocity constant. But there are no guarantees that an increase in money volume will be met with a decline in money velocity holding prices constant. If the velocity remains constant, or people get spooked and velocity rises, increasing the money supply will generate inflation. (The exception being if the economy is growing and the increase in money supply carefully matches the increase in demand.)

#105 Bob Dog on 12.03.21 at 12:22 am

I have ‘bit-coined’ a new phrase. Psycho-capitalism. A new realm of advanced mathematics that predicts the downfall of human civilization based a large sample of people obsessed with the accumulation of wealth. I propose a plan where all human knowledge is accumulated and recorded at an outpost on Baffin Island in order to shorten the dark age of endless war and death brought upon human civilization by the Uber Capitalist.

#106 All Hyperbole except when it's Shennanigans on 12.03.21 at 12:23 am

I guess it was two or three weeks ago one of those non-profit public interest/good groups in the states put out the following tweet about housing affordability.

Public Citizen

@Public_Citizen


34m
Average cost of a home in: HI: $690K DC: $673K CA: $635K MA: $481K WA: $478K CO: $449K OR: $409K UT: $408K NJ: $382K ID: $360K NY: $353K MD: $346K RI: $345K NV: $338K NH: $338K MT: $329K AZ: $320K VA: $312K CT: $294K This is what an affordable housing crisis looks like.

Compare that to our prices here in Canada. They think that is a housing affordability crisis and we are paying double the highest on their list, or more, without batting an eye and looking for more increases.

#107 Bob Dog on 12.03.21 at 12:34 am

There is an NFT , non fungible token for the poor and desperate, available for the new bit-coined phrase ‘phycho-capitalist’ invest now before you are priced out of the lucrative NFT phrase ownership market. There are nearly 5 billion human beings in the known universe, but only one can possess the 256 bit key that distinguish the authenticity of the phrase ‘Psycho-capitalist’ from the words you just read.

Let’s start the bidding At $512,128 USD.

Don’t think you hillbilly Canadians can use your Monopoly money

#108 B on 12.03.21 at 12:49 am

Bobbie Bird on 12.02.21 at 11:00 pm
The solution to Trudeaus hyperinflation is to leave Canada to live and work where hyperinflation isn’t a problem. I live in a country where professional salaries are 50% higher, taxes are 50% lower , luxury rental ( a pool villa on a tropical island weekend getaway) , a luxe city condo, gas, insurance, clothes and the cost of living for groceries, cell phones, internet, water and electric bills etc are around 1/5 th of what I would pay in Canada. Get smart, get out. Do something other than bitch how you list your country . It’s over, gone, you lost. Don’t be squeezed out if the profits you’re right to take, instead of being drained drip drip drip.

———–

What country?

#109 IHCTD9 on 12.03.21 at 1:15 am

#94 Leslie from Lilloet on 12.02.21 at 9:29

Me too. I’ve been able to avoid the comments from those narcissistic idiots you named and about a dozen others. Found a web tool that works very well to filter. It started for me three years ago, getting tired of the most frequent posters here like Mark and Smoking Man.

It’s a relief to avoid the trash.
—-

Smoking Man has been dead since Sept 13 2020.

You’re an *******.

Why don’t you take a ******* hike?

Seriously, **** right off.

Get lost.

Thanks!

#110 westcdn on 12.03.21 at 1:44 am

A Churchill quote, “When you are going through hell, keep moving”. Advice I keep in my hip pocket. Mr Market knows best – really? I see big money taking care of itself and the club is small. They will eventually fail as true wealth are people with their endeavors. These are the ones who will deliver (odd, spelt backwards is reviled – goes with take).

I am betting Omicron will turn out to be a regular but contagious flu. It remains to be seen. I don’t like a vaccine playing around with my DNA – I was coerced because there are unknowns plus I want to be able to move about. I do trust my immune system and do benefit from defeating a new virus. Many times the cure is worse than the disease.

This week I looked for opportunity from dysfunctional Mr Market. I bought a few equities with cash flow. I also bought some call options – these are always an adventure, good and bad. I didn’t invest more in “beanie baby” type schemes or residential RE. The ship, Titanic, sailed on me with my ticket to a life of leisure and power.

PS. I am mainly socially exciting as an ordinary rock but there are reasons. I still day dream a lot until reality slaps me in the face.

#111 IHCTD9 on 12.03.21 at 1:47 am

#93 greaterfool on 12.02.21 at 9:17 pm
bank is too big to fail
mortgage/RE is too big to fail
PM who will keep spending is voted to power by Canadians

so what’s the problem here? it is all our Canadians own choice. If you can’t beat/change them, join them.

Sad though.
———-

Do you own RE? Do you own liquid assets? If so, Trudeau and the BOC are your best buds. Work hard to focus on your own situation. Forget about the future of Canada. Let them vote for their own destruction. It’s out of our hands.

If you’ve got RE and liquid assets, you win. ‘Nuff said.

#112 Ponzius Pilatus on 12.03.21 at 2:20 am

78 Bezengy on 12.02.21 at 7:19 pm
#47 Ponzius Pilatus on 12.02.21 at 5:02 pm
#21 Quintilian on 12.02.21 at 3:08 pm
#11 crowdedelevatorfartz
“Balancing the budget should be the Law.”

Thoughtless brash, uninformed statement.

Even the nutbars from that right wing radio station that brainwashed you would disagree.

Deficit spending is a perfectly useful and appropriate tool when used at the right time to the right degree.

Misuse and abuse by politicians is what should be outlawed.
———–
I go with Quinty on this one.
CEF, I suggest you read up on FDR, The Great Depression and John Maynard Keynes.

—–

Yup….everyone should study John Maynard Keynes.

In bad times, governments should run deficits, said Keynes, but good times usually both precede and follow bad times. In good times, he said, governments should run surpluses.

https://theorca.ca/visiting-pod/we-cant-dodge-deficits-and-debt-forever/
————————-
Are the good times here already?
The brilliant Eric Burton comes to mind:
:When I think of all the good times that I’ve wasted, having good times”

#113 under the radar on 12.03.21 at 5:40 am

Not too long ago saving was the prudent and responsible thing to do. I think it still is.

#114 Prince Polo on 12.03.21 at 6:38 am

YOWZA!

BMO today announced that its Board of Directors declared a quarterly dividend of $1.33 per share on paid-up common shares of Bank of Montreal for the first quarter of fiscal year 2022…up 25 per cent from the prior quarter and prior year.

https://www.newswire.ca/news-releases/bmo-financial-group-increases-common-share-dividend-by-27-cents-from-the-prior-quarter-up-25-per-cent-from-the-prior-quarter-and-prior-year-885119826.html

#115 Summertime on 12.03.21 at 6:47 am

#97 PREFERRED SHARES on 12.02.21 at 9:45 pm

Then the fiat of that country becomes worthless.

—————————

It is ‘worth’ approximately 1/100th of a brick in a typical wooden shack in GTA, or 2 square centimeters of land, give or take.

By my modest observations, if one considers the real cost of living, Canada is quickly falling behind even countries like eastern Europe, Spain and Greece that have far cheaper cost of living and in my opinion much higher standard.

High standard of living does not mean high cost of living, it means whether you can afford more real stuff with less money.

There is not much real economy left in the great white north so the fallout to housing at the last driver in the engine of economy is kind of pathetic if it was not tragic.

And the ‘statistical math’ of reporting annual inflation of 1-2 % when housing that accounts for half of the household expenses increased by 15 % + annually in the last 2 decades is nothing more than a giant lie and deception, a low level scam perpetrated by pathetic low level scam artists dressed in ‘authority’.

#116 crowdedelevatorfartz on 12.03.21 at 7:33 am

@#109 IHCTD9

Les lives in Lillooet…that’s punishment enough.
:)

#117 crowdedelevatorfartz on 12.03.21 at 7:43 am

@#95 Don’t bet
“It would not be until 1948 that the province finally repealed prohibition.

Today, I’m looking at the nearly half century of prohibition in Prince Edward Island.”

+++
PEI “prohibition” merely created a huge underground Moonshine business.
Just about everyone I knew either had a Still or had gallons of drinkable “gasoline” buried somewhere in the yard.
Yep the brilliant govt missed out on almost 50 years of tax revenue.

Interesting fact:
When the “Fathers of Confederation” met in Charlottetown PEI to hammer out the “deal” to create Canada…. The booze tab was enormous.

https://hazlitt.net/blog/drunk-history-canadas-booze-soaked-beginnings

#118 Do we have all the facts on 12.03.21 at 8:02 am

Several months ago I suggested on this blog that Quantitative Easing was initiated by the Government of Canada to cover projected deficits related to the Covid 19 crisis. I was strongly rebuked and told in very strong terms that the Bank of Canada always acts autonomously from the Government of Canada.

Last week Pierre Poilievre, Finance critic for the Conservative Party, informed the House of Commons that all evidence indicated that the Government of Canada was the force behind the curtain of Quantitative Easing not the Bank of Canada.

Without QE the Government of Canada could not have raised the funds necessary to cover the projected deficits related to Covid 19 initiatives. The only conclusion that could be reached was that Bank of Canada decision to purchase hundreds of billions of dollars of Government of Canada bonds in the secondary market was made for no other reason than to support the projected deficits of the Government of Canada.

As a result of QE an institution whose primary function was to initiate monetary policies that maintained the value of money by controlling inflation became a primary force behind the increase in M2 money supply that helped stoke inflationary fires.

Mr. Poilievre is not alone in questioning the ‘autonomous’ role of the Bank of Canada in stimulating inflation over the past 22 months and in asking what how they intend to control inflation in the future.

Sometimes what is presented to be believed is not to be believed.

#119 IHCTD9 on 12.03.21 at 9:02 am

#116 crowdedelevatorfartz on 12.03.21 at 7:33 am
@#109 IHCTD9

Les lives in Lillooet…that’s punishment enough.
:)
___

I was totally drunk when I wrote that, but it was honest.

#120 Don Guillermo on 12.03.21 at 9:58 am

#48 Dolce Vita on 12.02.21 at 5:11 pm
#14 Don Guillermo

Forgot to mention off tourist season (mid-Oct to mid-May) best time to go and the worst weather you will get is like Victoria or Vancouver. Usually 3-4 deg C warmer.

******************************
Yes, off season is best for Europe and Italy is my favorite destination. Weather isn’t a big concern for me these days. That’s the reason the book intrigued me about winter in Venice. I believe sometime between November and carnival would work. Flying from CDMX to Europe is easy.

#121 Dharma Bum on 12.03.21 at 9:58 am

#113 Under the Radar

Not too long ago saving was the prudent and responsible thing to do. I think it still is.
————————————————————————————————

I believe that there is a bit of a misunderstanding with the “don’t save” idea.

The issue is what you do with the money that you save.

Obviously, if you save money and keep it sitting in a bank account at 0%, that’s a losing proposition.

It’s slightly better than blowing money on worthless chotchkies, but it’s a recipe for erosion nonetheless.

However, call me Captain Obvious, but you cannot invest money unless you first save it.

My advice to the young’uns out there who seem to be mired in confusion, and distracted by the myriad misinformation and disinformation spewing forth from their beloved social media outlets is this:

Investing is crucial. However, for most newbies it is a skill that needs to be learnt and developed. The first step to becoming a seasoned and disciplined investor is to become a diligent and disciplined saver. Learn to systematically save your money as opposed to blowing it.

Get that part of it down COLD.

THEN, you can learn about where to park that saved money in order to make it grow.

If you don’t want to learn how to do it, just give it to Garth. He’ll do it all for you, for a very reasonable fee.

Easy peasy.

So, start saving, all you young spendthrifts out there.

#122 crowdedelevatorfartz on 12.03.21 at 10:06 am

@#119 IHCTD9

:)

Even God has forsaken Lillooet.
Both roads ( Hwy 99 and Hwy #1) leading from Lillooet to Vancouver are closed due to continuing mudslides.
When you look at a map of BC you will realize…..
Lillooet is way beyond… Hope

#123 Dharma Bum on 12.03.21 at 10:09 am

#96 I’m gonna be sick

“There are two types of people in this world. Avoid them both.”
—————————————————————————————————–

“[There are two types of people in the world] the horrible and the miserable.” – Woody Allen (Annie Hall)

https://www.youtube.com/watch?v=DE3OYSVpycY

“When you go through life, you should be thankful that you’re miserable”.

It’s funny because it’s true.

#124 Summertime on 12.03.21 at 10:18 am

#118 Do we have all the facts on 12.03.21 at 8:02 am

I am sure that it is just pure coincidence, that the ‘independent’ BOC decides to purchase 1 billion of government bonds a day exactly when the government intends to run the largest deficit ever that matches exactly their purchases.

And to make it even better – I am sure that BOC will brag on how important it is ‘to diversify it’s holdings into safe government bonds’ and ‘how sound an investment that is’ by front running the other candidates for a guaranteed loss of 10-15 % yearly (the margin between the ‘return of bonds’ and the real inflation or opportunity cost of investing in other assets ).

My hemorrhoids’ still hurt by remembering the laugh my behind was having when reading their press release at the time.

Remember folks, this is the ‘authority’ in charge of your money, they ‘have all the tools’ and ‘monitor seriously the situation’.

How is that 2.4 % yearly generous indexation helping the folks on fixed income and government benefits?

#125 Quintilian on 12.03.21 at 10:35 am

#118 Do we have all the facts:
Actually, we do have all the facts.

And as you stated, and I also, repeatedly argued with the blog host, Central Bankers are not independent.
They are lap dogs, girly yes men, and some manly women.

They are political menials.

I would have less disdain for them if they had a shred of honesty and not hide behind the pretentious shroud of gravitas.

#126 Shawn Allen on 12.03.21 at 10:40 am

Money Supply?

Fun fact: The currency in bank vaults is not considered part of the money supply.

Neither is the “cash” that banks have on deposit at the central bank.

The reason in both cases is that this money is not “in circulation”.

https://www.bankofcanada.ca/rates/indicators/key-variables/monetary-aggregates/

It’s the borrowing that increased the money supply. Government, personal and commercial borrowing. The biggest role of the central bank was in pushing interest rates down through bond buying and other measures that incented much more borrowing.

Blame the higher money supply on the borrowers including government.

#127 Shawn Allen on 12.03.21 at 10:43 am

#124 Summertime on 12.03.21 at 10:18 am

How is that 2.4 % yearly generous indexation helping the folks on fixed income and government benefits?

*************************
How is it a fixed income if it is indexed to inflation?

#128 SunShowers on 12.03.21 at 10:56 am

#22 Nonplused on 12.02.21 at 3:11 pm
Although probably not by enough to offset the billionaire’s losses. There is a lot more money in circulation than even the billionaires could burn.

#38 IHCTD9 on 12.02.21 at 4:29 pm
Obviously taking a billion dollars cash out of the safe where it has been sitting for the last ten years and burning it does nothing to anyone except for making the billionaire, 1 billion dollars poorer.

Glad you two get it!

#129 Ponzius Pilatus on 12.03.21 at 10:56 am

#118 the elusive facts
Last week Pierre Poilievre, Finance critic for the Conservative Party, informed the House of Commons that all evidence indicated that the Government of Canada was the force behind the curtain of Quantitative Easing not the Bank of Canada.
———————
Where are “all zees facts”?

#130 Ponzius Pilatus on 12.03.21 at 10:59 am

#119 IHCTD9 on 12.03.21 at 9:02 am
#116 crowdedelevatorfartz on 12.03.21 at 7:33 am
@#109 IHCTD9

Les lives in Lillooet…that’s punishment enough.
:)
___

I was totally drunk when I wrote that, but it was honest.
—————————
“In vino (rumo) veritas”

#131 Wrk.dover on 12.03.21 at 11:23 am

#119 IHCTD9 on 12.03.21 at 9:02 am
I was totally drunk when I wrote that, but it was honest.
_______________________________________

On Sammy Hagar’s TV show, Joe Walsh advised, “don’t drink drunk”.

It does have valid benefits, beyond a certain plateau/peak.

#132 millmech on 12.03.21 at 11:56 am

#124 Summertime
If the folks on fixed incomes and government benefits are wise they would be using their home equity to borrow and living off the income. Using $500k in equity to generate up to $2k a month in extra income, this year one could have easily made $4k a month.

#133 Summertime on 12.03.21 at 12:08 pm

#132 millmech on 12.03.21 at 11:56 am

Sure, I agree that the best use of ‘money’ is to get rid of them asap and invest in something stable, that retains it’s value, preferably also generating income.

It is just sad and pathetic that the very purpose of money – as deferred labor and consumption, to be a store of value, is destroyed by the very entity that is supposed to protect it.

Combined with pathetic low-life constantly lying behavior.

As for the inflation (apparently 2.4 %) that Shawn Allen is experiencing in his alternative universe – that is not comprehensible by any intelligence, except his.

#134 Russ on 12.03.21 at 12:18 pm

Hey Felix,

The difference between cats and dogs…

https://twitter.com/slender_sherbet/status/1459626830655275010?s=21

Cheers, Russ

#135 Paterfamilias on 12.03.21 at 12:35 pm

# 130. Yes, but ‘veritas’ as perceived by a drunk.

#136 Internet_My_Friend on 12.03.21 at 12:43 pm

#102 Shawn Allen on 12.02.21 at 11:25 pm

All fiat currencies eventually fail. Not because we said so, but because History tells us so.

By the way – did you know that of the total US dollars in existence, 40% of it was printed in the last 18 months?

https://fred.stlouisfed.org/series/M1

If that’s not a cause for concern… I don’t know what to tell you…

Nah, it’s totally okay. Elon got most of them. – Garth

#137 Elon Fanboy on 12.03.21 at 12:52 pm

BMO…25% divi increase….yummy!

#138 Robin on 12.03.21 at 1:01 pm

When taking into account assets such as housing, inflation is actually more like 10-15% and has been for many years. A balanced portfolio yielding 7% is better than cash yes, but still not keeping up with true inflation. Until governments stop printing money at an insane pace and destroying the value of fiat currency, housing prices will only continue to worsen.

As incomes cannot keep pace and rates rise that is an impossibility. – Garth

#139 david on 12.03.21 at 1:25 pm

Garth you are the BEST! Glad to have your fantastic financial advices!

Your loan has been declined. – Garth

#140 Shawn Allen on 12.03.21 at 1:26 pm

Money Supply?

#136 Internet_My_Friend on 12.03.21 at 12:43 pm
#102 Shawn Allen on 12.02.21 at 11:25 pm

All fiat currencies eventually fail. Not because we said so, but because History tells us so.

By the way – did you know that of the total US dollars in existence, 40% of it was printed in the last 18 months?

https://fred.stlouisfed.org/series/M1

If that’s not a cause for concern… I don’t know what to tell you…

Nah, it’s totally okay. Elon got most of them. – Garth

**************************
Another great response by Garth.

As to Money Supply, get back to me on M2. M1 is a tiny portion of total money. What is the percent recently “printed” (whatever that means) of M2?

#141 IHCTD9 on 12.03.21 at 1:27 pm

#131 Wrk.dover on 12.03.21 at 11:23 am
#119 IHCTD9 on 12.03.21 at 9:02 am
I was totally drunk when I wrote that, but it was honest.
_______________________________________

On Sammy Hagar’s TV show, Joe Walsh advised, “don’t drink drunk”.

It does have valid benefits, beyond a certain plateau/peak.
___

Haha “don’t drink drunk”- that’s some good advice! I was more than half in the bag by 11:00, so everything after that was full-on unbridled drunk drinking.

#142 Shawn Allen on 12.03.21 at 1:45 pm

Money Supply?

Actually, my mistake, M1 is is large and covers most deposits accounts.

The bizarre graph from St. Louis Fed with link at 136 is based on a changed definition of M1 that greatly increased the quantity of M1.

This is interesting. The fact is that the nature of money has changed. Paper currency is becoming obsolete. Bank deposits are money. The FED has apparently changed the definition of M1 to get with the times.

It looks like the FED article explains that the surge in M! was also becasue of money money from M2 to M1. This is complex!

Just go ahead and accumulate lots more wealth and and we will be okay.

#143 Kevin on 12.03.21 at 2:04 pm

Remember in the end the poor masses will always eat the rich

When did that last happen? – Garth

#144 IHCTD9 on 12.03.21 at 2:21 pm

#130 Ponzius Pilatus on 12.03.21 at 10:59 am

—————————

“In vino (rumo) veritas”

——

Don’t tell my wife, I’ve been using intoxication more as an excuse.

#145 14 July 1789 on 12.03.21 at 3:09 pm

#143 Kevin on 12.03.21 at 2:04 pm

Remember in the end the poor masses will always eat the rich

When did that last happen? – Garth

There’s no bread let them eat cake
There’s no end to what they’ll take
Flaunt the fruits of noble birth
Wash the salt into the earth

#146 Robin on 12.03.21 at 4:20 pm

When taking into account assets such as housing, inflation is actually more like 10-15% and has been for many years. A balanced portfolio yielding 7% is better than cash yes, but still not keeping up with true inflation. Until governments stop printing money at an insane pace and destroying the value of fiat currency, housing prices will only continue to worsen.

As incomes cannot keep pace and rates rise that is an impossibility. – Garth

****

Incomes haven’t been keeping pace for decades yet housing has continually risen out of control. As far as interest rates, due to the sheer amount of government debt to service they won’t be able to raise interest rates by enough to make a meaningful impact.