The two goals

On the weekend, my snappy portfolio manager buddy Doug put on his asbestos pants and wrote about Bitcoin. Good thing. He got flamed by those who claim crypto has made them fabulously wealthy (on the Internet everyone is Beyoncé).

Needless to say, my colleagues and I do not do crypto. Or weed. Or Elon. We don’t day-trade, crowdfund or flip options. We don’t go short. We don’t pool funds, use the hedgies, invest in MICs and eschew IPOs. We don’t even buy individual stocks for folks. We just invest so people can have a life and sleep at night. We’re aggressive and conservative. All at once. We are not cowboys.

Here’s why we invest as we do (and why you should, too).

As this blog’s stated before, we assume most people share two overriding goals: Don’t lose money. And give a reasonable return. If those are not your objectives, stop reading and go directly to BNN.

The enemy of this approach of ours is risk. And risk means volatility. So the goal of an advisor or an investor is to contain volatility, but not to the extent that returns crash and you lose ground to inflation or taxes. That’s why GICs are not an option, neither is cash, nor HISAs. Inflation has so outpaced interest rates that it’ll be years – or a decade, maybe – before collecting interest will even begin to build net worth. Until then, savers will be losers.

This is a poor strategy because life is long. Like, seriously long. Most people now spend 15 years, sometimes 30, after employment income has ceased. Government pogey (CPP and OAS) isn’t enough to live a satisfied life on, and 70% of us have no company pension. Each year defined-benefit plans become rarer. Investing – for almost everyone – is not an option. It’s a necessity.

Things to remember.

First, investing isn’t gambling. It’s not a race. The goal isn’t to get as much as fast as possible. That breeds risk and bad decisions. Over and again I hear about the first securities people ever buy and they’re invariably stocks – usually speculative ones. Almost always they have their butts handed to them. They understood nothing about wealth accumulation. They thought they were smarter than Mr. Market and everyone else in the room after 20 minutes of Googling. Have you read some of the ‘loss porn’ posts on Reddit? Exactly. Bitcoin? Fuggeddaboutit.

Second understand that age isn’t germane to success. It’s a myth the young can absorb volatility and should therefore embrace risk. They can’t. Losing capital scars them for life. It’s also a myth that wrinklies should be all in bonds or safe stuff. Nope. A 70-year-old needs growth, unless she already has a few million. The real risk for almost everyone is running out of money, not losing it. What a hard lesson that is to learn. And most never do.

Face it – we all live in the same world. From Gen Z to Boomers, there is a suite of risks at the moment and into the foreseeable future that guarantees volatility.

For example, inflation is back with a vengeance, destroying the value of money. Anyone born in the last 40 years has never seen this, or experienced what it can do. You are about to, in spades. Inflation decimates money held in non-growth, interest-bearing assets. Do not save. Invest.

Then there’s interest rate risk. It’s a certainty CBs will raise the cost of money six, seven or eight times over the next 24 months. That will materially impact anyone with a LOC, a home equity loan, variable-rate mortgage, demand loan or credit card debt. After years of rates so low that household debt soared beyond $2 trillion in Canada, this will be a shock.

Don’t forget currency risk, either. Canada borrowed a staggering amount during the virus years, and has plans to increase spending – and the national debt. Our debt-to-GDP ratio is ugly and the dollar could be impacted. Always hedge against this risk with a quarter of your portfolio in US$-denominated assets. Also understand the tax risk. 2022 could be a pivotal year. More on that when you-know-who talks on Tuesday.

The pandemic? After almost two years it’s still here. Growing again. Wave four. Omicron. Wave Five next? Maybe Covid just stays forever, passed among the careless and the unvaxed – the latter group burdening the health care system, causing collateral damage. So far the market believes the worst of Covid is over in terms of economic destruction, but we also thought this thing would be gone in 90 days.

Politics. Scary. What the heck is China up to with the anti-capitalist actions of President Xi, plus the military buildup? Meanwhile Trump wants back in the White House in ’24. That may be unlikely, but American society is more polarized than ever so the next presidential election could be far worse than the last one. And look at January 6th. The political risk posed to investors that day was legion.

Oh, did I mention the climate?

Another fallacy to dispel is that the 40% of a 60/40 should be in bonds. Nope. Many govy bonds suck and will be creamed as rates rise. So this is a really bad idea. That fixed income portion of the portfolio should be made up of short-duration bonds, some corporate invest grade issues, a floating-rate bond ETF and a healthy weighting of rate reset preferreds, which rise in value along with the prime. Sadly, many people will discover their all-in-one ‘balanced’ fund is an anchor.

Finally, never expect everything in your portfolio to go up at the same time. That’s an amateur mistake. Think of a car engine. Some cylinders rise. Some fall. You move forward. Besides, if everything were to go up at the same time, odds are they’ll all go down together, too. That is not the point of balanced investing.

Is it easy? Not exactly. But neither is getting married, being good at your job or parenting. The point of life is not accumulating money. But without it, life’s harder. Don’t blow it.

About the photo: “Bumped into an old high school friend at O’Hare Airport in March 2020,” writes Dave, “and he recommended your blog. I’ve been a daily reader ever since! A lot has changed since that airport encounter, most importantly my girlfriend and I got our COVID puppy George, a flat-coated retriever. Attached is a picture for your blog – George on the right with his best friend Sophie (a Bernese / Aussie Shepherd mix) on the left. Photo taken dockside on the Ottawa River.”

128 comments ↓

#1 Vax a Nation on 12.12.21 at 4:24 pm

#11 Old Active on 12.11.21 at 12:59 pm
Oh no, the spread is widening!

Ontario reporting 864 fully vaccinated spreaders and only 623 unvaccinated spreaders from the 1607 Ontario cases reported today.

Now what?

They (vaccinated) can go anywhere.
They can dine inside without masks.
They can go to large gatherings.
They can enter Long Term Care homes.
They can go to concerts with huge crowds.
They can travel internationally to bring back Omicron 2.

What would be after Omicron? Pi?

That’s right vaccinated want to have their pi and eat it too!

_________________________________________

Old Active is very indicative of the caliber of readers who frequent this site. His/her ignorance is plainly obvious to anyone with an IQ over 120.

Let me explain to the less fortunate:

If case counts between vaccinated and unvaccinated are roughly equal, BUT 4* as many people are vaccinated, wouldn’t this suggest to you that vaccines are HIGHLY beneficial, since as a percentage, case counts are significantly lower for the vaccinated cohort? And the difference is even more pronounced when looking at hospitalizations … and especially those in ICUs.

The media has done a p-poor job in relating this fact to those who are not good with math! Instead of just regurgitating meaningless case count numbers, they should be phrasing things in terms of the effectiveness of vaccines.

Unfortunately, the likes of Old Active are not unique. They probably worked on a car assembly line in backwoods Ontario for their entire career.

#2 T-Rev on 12.12.21 at 4:31 pm

Ok, orthodox Garthians. What ya’ll running for the fixed side of your portfolio? I’ll start: basically running 30% fixed, and of that, 90% is in ZAG with 10% in ZPR. I’m beginning to think, after a year or listening to Garth really harp on this topic, that I should be allocating that differently. So help a Dog out, what funds are you in and why, and what weighting do you give each in your portfolio?

#3 espressobob on 12.12.21 at 4:49 pm

The whole idea of professional management is to guard against bad decisions based on fluff.

Uber trading newbies are ripe for the picking, and usually chum for those playing their egos. This never gets boring.

Like midevil torture, being eviscerated alive somehow isn’t productive.

#4 Dave on 12.12.21 at 5:02 pm

If there is 5 interest rate hikes in 2022 starting in January.

How much of a correction can there be? 10%, 15% or 20%.

Canada lives on real estate, the taxes it collects keep this country running and growing. No government will let this slide significantly.

There will be no big correction, small one at Best!

#5 Chameleon on 12.12.21 at 5:07 pm

Is there anything worse that a wet dog?

A question: Do you find you’re lazier now than before the pandemic?

#6 Chalkie on 12.12.21 at 5:13 pm

Motivation runs in many ways Garth, there is plenty of proof that Day trading is an art, and perhaps you have missed the boat. Volatility is a day traders dream, when the rest are running and jumping ship, day traders build their dreams. If you like watching paint dry Garth, stay the course and enjoy.

#7 Rod on 12.12.21 at 5:13 pm

I get it, Garth. This is just another one of those “Get Rich Slow” pitches. Well done.

#8 Faron on 12.12.21 at 5:13 pm

Sage advice Garth.

Regarding climate, here’s an essay.

Well, weather actually, but I’ll get to climate. Just heartbreaking what has happened in MO, Il, KY, TN. I was tuned into weather twitter all night on Friday and watched in powerless horror as towns were obliterated, debris was vacuumed to the tropopause then spread over thousands of square kilometers. The icing on the cake was a fierce tornado that touched down just minutes before mowing down a part of Bowling Green Ky. That plume of debris climbed to 20,000 feet. There was almost no time for warning. It was 1 AM local time.

Was this climate change? Well, tornado outbreaks happen. Even December tornado outbreaks. It’s a fact of life if you live in the US heartland where the doors to both modified arctic air and tropical are wide open all downwind of a huge mountain range (mountains “spin-up” low pressure centers).

Still, this was one of the strongest outbreaks ever with the only truly comparable storms happening in mid to late spring. The ingredients (record warm temperatures, very unstable atmosphere) were unprecedented for the time of year. Climate projections tell us that changes in severe weather will be complex, but that in south-central US, the worst severe weather will be stronger. Think of it like baking a cake — going to the grocery store doesn’t “cause” the cake, but it makes the ingredients available. Climate change is stocking the shelves for extreme weather.

Another thought, based on some of what I have watched over the past year and half (beginning with watching Oregon’s “rainforests” get crisped over the course of 48 hours) is that the knock-on effects of climate change are very underestimated. Quantifying change in temperature or precipitation or even wind is “easy”. But quantifying the increased likelihood of combined extremes is very hard and often escapes human imagination.

Take the Coquihalla’s washouts. Engineers (who I have consulted with) carefully planned for potential large river flows among vast suite of environmental factors to be designed for. But, they didn’t foresee that the knock-on of those flows was a reorganization of the channel. Highway 8 is an even better example of that. The BC heatwave on December 1st very nearly had a knock-on of wildfire. The ingredients were there in the form of high wind, dry air and warm temperature. This in December. (There actually was a reported fire in Alberta). Later in the month, dryness in the CO Rockies was causing unprecedented fire danger increases. These chains of events — oh crap, Oh Crap, now this is happening! HOLY CRAP, THAT TOO? — will become more common.

Because of these summing effects, we can expect more and more “surprises” in the future. Surprises equate to economic disruption. Economic disruption can contribute to social upheaval. Perhaps that’s the ultimate knock-on effect.

#9 Old Active on 12.12.21 at 5:25 pm

#1 Vax a Nation

First, if you’re going to throw insults around, you’d better first check how you stack up on the IQ meter, as your comment isn’t exactly indicating triple digits on comprehension basis alone.

Second, once you validate that your ignorance is setting high score, maybe you can realize that generalizing about the entire pool of readers blindly and blanketing them with insults is way out of line and reflects poorly only on you, not the readers.

And since your little comment clearly shows your IQ is not in the triple digits, allow me to explain it to you like I would to a 5-year old to help you with your comprehension problems.

The point of the post is that the PASSPORTS are clearly not beneficial for prevention of spread, NOT that the vaccine is not beneficial for the subscribers.

Where did I ever say what you claim about the vaccine?

If you need proof that these vaccine passports are a total face, consider the number of spreaders reported, the viral load levels, the spread of variants, etc. as highlighted in the comments.

And hey…”car assembly line in backwoods Ontario for their entire career?”

What are you saying with this incredibly rude and classist comment? Do you not appreciate your car? Do you not respect the work people do? Appreciate people’s work and effort so you could benefit from a finished product that is made in Canada?

Are they lesser people to you?

My goodness, look at you. You’re so special and better than other human beings because why exactly?

Insecure much on this lovely Sunday afternoon?

#10 Jake on 12.12.21 at 5:26 pm

Well said, and yet never said enough times. This is why I come to the blog for more than 10 years now.

#11 Old Active on 12.12.21 at 5:27 pm

#1 Vax a Nation

First, if you’re going to throw insults around, you’d better first check how you stack up on the IQ meter, as your comment isn’t exactly indicating triple digits on comprehension basis alone.

Second, once you validate that your ignorance is setting high score, maybe you can realize that generalizing about the entire pool of readers blindly and blanketing them with insults is way out of line and reflects poorly only on you, not the readers.

And since your little comment clearly shows your IQ is not in the triple digits, allow me to explain it to you like I would to a 5-year old to help you with your comprehension problems.

The point of the post is that the PASSPORTS are clearly not beneficial for prevention of spread, NOT that the vaccine is not beneficial for the subscribers.

Where did I ever say what you claim about the vaccine?

If you need proof that these vaccine passports are a total farce, consider the number of spreaders reported, the viral load levels, the spread of variants, etc. as highlighted in the comments.

And hey…”car assembly line in backwoods Ontario for their entire career?”

What are you saying with this incredibly rude and classist comment? Do you not appreciate your car? Do you not respect the work people do? Appreciate people’s work and effort so you could benefit from a finished product that is made in Canada?

Are they lesser people to you?

My goodness, look at you. You’re so special and better than other human beings because why exactly?

Insecure much on this lovely Sunday afternoon?

#12 DON on 12.12.21 at 5:31 pm

Loved the engine example.

Thanks for the info.

Add in Russia/Ukraine…incoming multipolar world?

Hypersonic missle / space arms race?

#13 Toronto on 12.12.21 at 5:36 pm

Inflation is taxation without representation. What the Bank of Canada is allowing amounts to treason of the Canadian people.

#14 Leichendiener on 12.12.21 at 5:38 pm

“Over and again I hear about the first securities people ever buy and they’re invariably stocks – usually speculative ones. Almost always they have their butts handed to them.”

Actually, it was my head.

#15 Sail Away on 12.12.21 at 5:40 pm

A farmer stopped by the local garage to have his truck fixed. They couldn’t do it while he waited, so he decided to walk home.

On the way home he stopped at the shops and bought a bucket and gallon of paint. He then called at a friends farm and picked up a couple of chickens and a goose. However, now had a problem – how to carry everything home? While he was scratching his head he was approached by a pretty lady who told him she was lost.

She asked, “Can you tell me how to get to 16 Mockingbird Lane?”

The farmer said, “Well, as a matter of fact, my farm is very close to that address. I’d walk you there if I didn’t have to carry all this.”

The lady suggested, “Why don’t you put the can of paint in the bucket. Carry the bucket in one hand, put a chicken under each arm and carry the goose in your other hand?”

“Why thank you very much,” he said and proceeded to walk her home.

On the way he said “Let’s take a short cut down this alley and we’ll be there in no time.”

The lady looked at him cautiously then said, “I am a recent widow without a husband to defend me. How do I know that when we get in the alley you won’t take advantage of me?”

The farmer said, “Hang on a minute lady! I’m carrying a bucket, a gallon of paint, two chickens, and a goose. How on earth could I possibly do that?”

The lady replied, “Well, put the goose down, cover him with the bucket, put the paint on top of the bucket, and I’ll hold the chickens.”

#16 Dolce Vita on 12.12.21 at 5:43 pm

I read your Blog out loud tonight for the 1st time.

It sounded really good and made me laugh.

Just thought I’d tell you that and thanks for the cheering up. And, I like your investing style too Garth.

———————-

Bulk of my stuff is in +10% Div Yield per year ETFs, ETNs paying out monthly – mostly US where the money is. My hedge. Inflation in Italia compared to Canada or the USA low so far, happy about that.

Europe going NUTS as usual with Delta + Omicron. Italia still hanging in there and unlike Sweden and Spain, Italia like the UK and Denmark actually go looking for cases *.

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

Neighbors:

France 433
Switzerland 778
Austria 390
Slovenia 512
[latter 2 why in the NE of Italia where I live, cases up]

Europa Others:

United Kingdom 504
Germany 432
Denmark 720
Netherlands 818
Poland 427
Slovakia 1154

* That’s you too Canada, you’re also sh!t at testing:

https://i.imgur.com/tVHq0Kg.png

As for Sweden low numbers, that’s all about saving face. Spain reports at the last minute things going bad to save their tourism €’s.

To be honest, AFTER the pandemic will not travel again to those 2 Charlatan countries. Pity, people nice, their Gov’s and the truth another thing.

#17 millmech on 12.12.21 at 5:43 pm

With 2 trillion owing to the banks and 16 plus increases to interest rates over the next 48 months would one be wise to start stocking up on bank stocks. Fixed rate mortgages at 7% and HELOCS at 8%+ in four years mean bank divvies and share price go up, up and up. HCAL.TO and ZEB.TO will seem like a screaming deal now.

#18 Drill Baby Drill on 12.12.21 at 5:44 pm

I copied and sent to my son in law yesterday’s Bitcoin article from your heavenly blog. He is infatuated with his Bitcoin success to date. Hope fully this article will sober him up.

#19 Wrk.dover on 12.12.21 at 5:45 pm

Todays posting reads like a eulogy for the 2021 rate of gain, which has been ratcheting downward for months.

Is it too soon to point out tornadoes seem to be getting more severe? Something/something, human contributed atmospheric carbon percentage increase?

B&D portfolios in 2021 should be sitting north of 13%. Not bad for a plan that aims at averaging 7%. – Garth

#20 Alberta Ed on 12.12.21 at 5:46 pm

The earlier young people can start socking away a few bucks, the better. Basic financial planning education should start as early as possible as well. Our granddaughter at age 5 was already a keen Monopoly player with an excellent appreciation of finance. She could beat Socko and Chrystia hands down.

#21 Prince Polo on 12.12.21 at 5:52 pm

Is there any possible scenario where you would substantially increase the USD allocation from 25%?

#22 Dolce Vita on 12.12.21 at 5:55 pm

“South African president calls for lifting of Omicron travel bans”
– Nov 28

“South Africa “punished” for discovering Omicron variant”
– Dec 6

2 hr ago:

https://twitter.com/PresidencyZA/status/1470123711424520193

Still, get better Pres. Ramaphosa.

#23 Soviet Capitalist on 12.12.21 at 5:58 pm

Good stuff

#24 millmech on 12.12.21 at 6:01 pm

#1
How come nobody is talking about the BMI of the hospitalized, both vaxxed and unvaxxed. Therein lies the crux of the problem but it seems to be taboo to bring this up.

#25 Dolce Vita on 12.12.21 at 6:07 pm

If Omicron in terms of infection rates seen in UK and Denmark is that bad, expect Medical people in no rush to go back to Covid wards.

Sad article about that from the UK:

https://twitter.com/DrEricDing/status/1469975237894803457

Add in last week Swiss Doc’s want to prioritize vaxd over unvaxd and Singapore a few weeks ago “get Covid, get sick, unvaxd you pay the hospital bill”.

————–

Think about it, rock solid UK, Singapore and Switzerland…who would of thought?

I think if Omicron soars like the say it will, it’ll get UGLY in the hospitals of the World for the unvaxd.

#26 Ponzius Pilatus on 12.12.21 at 6:15 pm

#67 Marcia M on 12.12.21 at 10:29 am
#62 crowdedelevatorfartz on 12.12.21 at 9:44 am
Tomorrow is Chrystia’s pre Christmas announcement Day for 2022.
How will the incredibly brilliant, vertically challenged, polyglot, non finance, Finance Minister stand tall?
____________________________________________

Vertically challenged? Because women are shorter on average than men?

You bigoted POS, just go away.

Garth, please delete this self-absorbed fool.
———-
Marcia,
Not every one gets what a POS is.
They think it’s referring to our venerable Postal Services.
So may I suggest you call CEF a 5.8 inch short SOB.

#27 Dolce Vita on 12.12.21 at 6:24 pm

#24 millmech

Thus, using your infallible logic, Canada has many obese and overweight young:

https://i.imgur.com/hxz7Nra.png

Add up 0 – 39 yr olds, divide by 1.8 M.

To consumate your theory, then calculate the Correlation Coefficient vs. the entire population BMI using the above.

Or more simply:

https://www.statnews.com/2020/04/21/he-ran-marathons-why-did-coronavirus-almost-kill-him/

https://www.reuters.com/article/factcheck-covid19-protection-idUSL1N2PG1GH

Just Google “fit people that got covid”.

Knock yourself out.

#28 Ponzius Pilatus on 12.12.21 at 6:25 pm

Blogdogs.
Print out this blog, frame it and give it as stocking stuffer. It’s free!
And it’s probably the best investment advise you’ll ever get.
Not a Suck Up.
I’ve used similar strategies in my personal and professional life.

#29 Faron on 12.12.21 at 6:30 pm

#19 Wrk.dover on 12.12.21 at 5:45 pm

Unfortunately, the noise in tornado data (location, strength, duration, frequency) makes it really hard to say anything meaningful about trends. Can only comment on the conditions that fuel them and even that’s hard.

#30 Beanie Babies For Sale on 12.12.21 at 6:35 pm

#9 Old Active on 12.12.21 at 5:25 pm

Vaccine passports are very effective at keeping those whom are most likely to consume healthcare resources if they catch covid from being in situations where there is a high chance of covid exposure.

It’s not about the unvaccinated spreading to the vaccinated, it’s about keeping the unvaccinated from catching covid and filling up our ICUs which has a negative effect on healthcare for everyone.

Let that sink in a bit.

#31 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 12.12.21 at 6:38 pm

Hey Torunturds!

Why not bet all your Bitcoin on the Argos tonight – what could possibly go wrong?

A REAL Canadian winning CFL East Division team takes the field tonight for the Grey Cup!

After the pathetic choke-loss by the Argghhhhoes, the Ticats have a shot at the big prize.

OSKEE WEE WEE!

Did you know that chant, from a livable and decent Canadian city, unlike the Torontoilet, is already 100 years old!?

https://www.cflaa.ca/tiger-cats-oskee-wee-wee-cheer-turns-100/

Yep, the Ticats chant was barely grown up the last time the Make Believes did not disgrace themselves with yet another pathetic season of failure.

GO HAMILTON!

GO BOMBERS!

You are REAL teams from GREAT places that don’t embarrass Canada!

#32 The Fix is In on 12.12.21 at 6:38 pm

#2 T-Rev on 12.12.21 at 4:31 pm

Ok, orthodox Garthians. What ya’ll running for the fixed side of your portfolio?

———————-

ZAG – 7.5%
XFR – 7.5%
CPD – 15%
ZRE – 10%

If you consider REITs to be fixed income, I’m 60/40. If you consider them risk assets, I’m 70/30.

#33 VladTor on 12.12.21 at 6:41 pm

Garth ,very emotional post today, but… unfortunately everything is true!

In my opinion investing is not easy like thinking too much independent investors. Success coming with practice! Practicing will create intuition about what is good and opposite. That’s why need to use knowledge’s professionals.

From other point of view, looking on getting worse world economical situation I’m thinking sooner or later will be hyperinflation. How Garth Investment will protect itself ?

#34 R on 12.12.21 at 6:41 pm

Omicron may be the gift from Heaven. Everyone will get it, very mild symptoms. Everyone gets immunity .The world will be done with Covid by the spring, then it is just another flu.I trust Dr Campbell, anyone else, not so much.
https://youtu.be/m2vI4XczqZ8

#35 espressobob on 12.12.21 at 6:42 pm

There are those who see themselves in a limelight and choose narcissism above what is best for the majority.

It might be better for these individuals to look beyond their collective noses and possibly do something never considered, like getting vaccinated to the max.

Just a little prick.

#36 ogdoad on 12.12.21 at 6:45 pm

patience is the new multi-task…desperation the new norm

Happy Sunday!

Og

#37 VladTor on 12.12.21 at 6:51 pm

Dear Garth,

80% Canadian vaccinated! With me – 80.0000000000013%.
Nevertheless here still too many comments about vaccination. Personally me, I’m tired reading about vaccination here. Maybe came time to delete not only AntiVax comment but Vax comments too. Time to using new mark for deleted messages – “Vax!” How do you think? Folk forgot where they are! Here is blog about housing and money. Lets return to reality!

#38 Stone on 12.12.21 at 6:54 pm

I enjoyed today’s post. It was nicely written.

I do have a question, Garth. Why do you have a Trading & Research Specialist? What is their accountability?

#39 yvr_lurker on 12.12.21 at 6:57 pm

It seems to me that some percentages of different all-purpose ETF’s (ZBAL, ZGRO, etc..) could do a decent job for smallish portfolios (<300K or so). Indeed to diversify away from all purpose ETFs which have an excess of bonds. At what point does one go with a 1% or more financial dude as a better option that doing it yourself along the lines as some others have indicated?

#40 oops on 12.12.21 at 6:59 pm

#16 Dolce Vita on 12.12.21 at 5:43 pm

“I read your Blog out loud tonight for the 1st time.”

Was it everything you expected? I mean, I was a little disappointed my first time. But, now I sing them…we all do :)

#41 Do we have all the facts on 12.12.21 at 7:03 pm

In the ten years that preceded the Covid 19 crisis revenues generated by the Government of Canada increased from $237.1 billion in 2010/11 to $334.1 billion in 2019/20. An average increase of 3.5% per annum.

Expenditures of the Government of Canada including debt service costs increased from $270.5 billion in 2010/11 to $362.9 in 2019/20. An average increase of 3.05% per annum.

Debt servicing costs declined from $30.9 billion in 2010/11 to $24.4 billion in 2019/20.

My point is that the combination of economic growth and a reduction in debt servicing costs put Canada within reach of achieving a balanced budget within ten years.

The possibility of Canada ever achieving a balanced budget all but disappeared in 2020/21 and will be made significantly worse as government bond rates increase.

After recovering from the Covid 19 crisis growth of Canadian GDP will eventually return to the average of 2.0% per annum realized prior to 2019/20.

One troubling issue facing Canada in the coming years is the extent of unfunded liabilities related to our health care system and pension plans as out current population ages. Scarcely a peep from our current Finance Minister on this serious issue. Between current Government of Canada debt and current unfunded liabilities future obligations now exceed $2 trillion.

An economy expanding at 2.0% per annum and Government revenues expanding at an average of 3.5% per annum cannot possibly cover the legal obligations attached to a $2 trillion basket of long term debts.

The pep talk by Chrystia on December 14 better provide some realistic plans to stimulate future economic growth or the Canada we once knew will become mired in a spiralling series of annual deficits.

This is no time for rose coloured glasses or hoarding corporate profits. We must try to invest our way out of this mess for the sake of future generations.

#42 Dolce Vita on 12.12.21 at 7:06 pm

Canary in the Coal Mine Denmark. Looking for real data not hysterics.

Honest to God, if Denmark is future Italia or Canada, we are so SCREWED.

Projections * (stats) bang on to observed for Omicron:

https://twitter.com/ProfPHansen/status/1470028370075435020

Somebody asked another Danish Doc (DNA sequencing nerd) if restrictions in Denmark will help…

https://twitter.com/MadsAlbertsen85/status/1470055110386622474

—————-

* Many say Projections NEVER match Actual data. Looks like Omicron paid attention to that beef and decided to make liars of these people this time around.

WINTER OF DISCONTENT people.

#43 willworkforpickles on 12.12.21 at 7:11 pm

Get ready for the next 6 years of the rest of your lives North America/North Americans.
…beyond that

“Fuggeddaboutit”

#44 Pandemic Is Over on 12.12.21 at 7:19 pm

Garth, but preferreds are positively correlated with common shares – much more that we’d like to. In Feb/March 2020, preferred ETFs dropped 20-25%, quite in sync with regular equities. How does this reduce the portfolio’s volatility?

#45 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 12.12.21 at 7:19 pm

Hey Toronturds!

Why not bet all your Bitcoin on the Argos tonight – what could possibly go wrong?

A REAL Canadian winning CFL East Division team takes the field tonight for the Grey Cup!

After the pathetic choke-loss by the Argghhhhoes, the Ticats have a shot at the big prize.

OSKEE WEE WEE!

Did you know that chant, from a livable and decent Canadian city, unlike the Torontoilet, is already 100 years old!?

https://www.cflaa.ca/tiger-cats-oskee-wee-wee-cheer-turns-100/

Yep, the Ticats chant was barely grown up the last time the Make Believes did not disgrace themselves with yet another pathetic season of failure.

GO HAMILTON!

GO BOMBERS!

You are REAL teams from GREAT places that don’t embarrass Canada!

(PS – tonight may be very traumatic for you all in the GTA, seeing a competent team actually win something – just try to distract yourself by thinking how your slanty semi should be worth millions of Bitcoin in the next few years, thanks to all the Greater Fools out there!)

#46 tkid on 12.12.21 at 7:27 pm

I’m 40% in ZPR, mostly because I’m not digging bonds right now. Even the bond ETFs I owned would go down when equities went down, so why own ’em.

Don’t like this weird weather’n’ reports of shortages out of the US. Everything is very unsettled. It’s time to hunker down and make sure the pantry is full.

#47 Barb on 12.12.21 at 7:34 pm

#25
“I think if Omicron soars like the say it will, it’ll get UGLY in the hospitals of the World for the unvaxd.”

——————–
Omichrist.

#48 Catatonic on 12.12.21 at 7:35 pm

#5 Chameleon on 12.12.21 at 5:07 pm

Is there anything worse that a wet dog?

A question: Do you find you’re lazier now than before the pandemic?

====

Yes, Felix … a wet cat! In fact, any cat, wet or dry.

Sorry, what was your second question?

#49 yvr_lurker on 12.12.21 at 7:35 pm

#8 Faron

Regarding climate, here’s an essay.

—-
Really good essay and I think you have it spot in. Hard to over-design for a road such as Highway 8 when nobody would have predicted that the river has completely carved out a new channel from the storm. What are they to do now? Go over the mountain with the new road, given that the river has completely taken down the embankment.

These extreme events (heat domes, rivers of rain, super-hurricaines and tornadoes) I think are going to become
more commonplace, and regular but severe events from the past are no longer accurate predictors of the extreme events that we will see more regularly.

I don’t see, however, that the Vancouver city council putting in parking permits everywhere or mobility pricing in Metro Vancouver, or putting in their climate levies (taxes) is going to do squat (except make everything more inaffordable for citizens). To get a first hand view of the issue, just go to Shanghai like I did twice in 2019 for work. Many huge smokestacks billowing day and night near the ring road, smoke so thick you can barely see the sun on most days I was there (stinging the contact lens).
Probably multiply this scenario by some huge factor across all of China.

#50 Matt Damon on 12.12.21 at 7:42 pm

Fortune Favors the Brave.

Are Garth and Doug being brave, bashing Bitcoin?

No.

Am I the only one of the three of us with truly chiseled abs?

Yes.

https://www.youtube.com/watch?v=9hBC5TVdYT8

#51 Dolce Vita on 12.12.21 at 7:43 pm

Honest to God, bad enough Boris is freaking out the UK about Omicron, he is also freaking out Italia too. A sampling from the major Italian online dailies today:

https://www.rainews.it/dl/rainews/articoli/gran-bretagna-johnson-riusciremo-contrastare-omicron-terza-dose-b8f07007-e35f-4439-9d6c-a0d4646d99f9.html

https://www.corriere.it/esteri/21_dicembre_12/covid-gran-bretagna-livello-allerta-omicron-39fa21fc-5b7d-11ec-b816-7f846470eaec.shtml

https://www.lastampa.it/esteri/2021/12/12/news/omicron_allarme_nel_regno_unito_ogni_giorno_i_contagi_raddoppiano-1457516/?ref=LSHStandard-undefined-I0-PM5-S1-T1

https://tg24.sky.it/mondo/2021/12/12/covid-uk-johnson

Il Giorno GOT IT RIGHT…

“Omicron variant tide”, now Britain scares Europe.

https://www.ilgiorno.it/cronaca/covid-gra-bretagna-omicron-1.7142533

——————

So far, Mr. Market not reacting…a good thing.

You know it’s bad in the UK when they start CANCELLING Village Christmas Quizzes, Shropshire reports:

https://twitter.com/WhittallClive/status/1470145095047561219

Darn you Boris.

Maledetto Boris.

#52 mike from mtl on 12.12.21 at 7:46 pm

#2 T-Rev on 12.12.21 at 4:31 pm

Ok, orthodox Garthians. What ya’ll running for the fixed side of your portfolio?
//////////////////////////////////////////////////////////////

KISS **Do your own research**

Non-reg & TFSA:

VSC
VSB
ZPR

RSP:
BND

#53 Provocateur on 12.12.21 at 7:49 pm

#9 Old Fart on 12.12.21 at 5:25 pm

What are you saying with this incredibly rude and classist comment? Do you not appreciate your car? Do you not respect the work people do? Appreciate people’s work and effort so you could benefit from a finished product that is made in Canada?

———————————————————————–

Kind of presumptuous that I would be buying any vehicle that is built in Canada. Your just proving my point about IQ even more.

The thought would never cross my mind to buy any of these vehicles. Seen too many horror stories over the years. I need a vehicle that is dependable.

And yes … I do know a few who work/worked on the line and have since been “mothballed”.

#54 Pulp Faction on 12.12.21 at 7:53 pm

I’m STILL trying to decide whether I should start speaking Chinese or Russian, and why German was such a non-option ?

#55 VladTor on 12.12.21 at 7:58 pm

#44 50 YEARS OF MAPLE LEAF INCOMPETENCE!
… Torontoilet…

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

Can be pretty witty! In some situations.

BUT….

Toronturds

***********
Apologize right now! This is not humor! Not worthy of an intelligent person! UGH !!!!!!!!!

#56 Paterfamilias on 12.12.21 at 8:00 pm

#1 Vax a Nation. # 9 Old Active. I possess almost no personal information about any of the other readers of this blog. I have some knowledge of the mathematical skills of not a few members of the modern media. Many such persons would be seriously challenged to count beyond 10, without removing shoes and hose. They are not much better at reading and writing.

But who needs the old ‘Three Rs’ on a planet where budgets balance themselves ?

#57 baloney Sandwitch on 12.12.21 at 8:03 pm

Buffett has said many times that volatility is not risk if you know what you are doing. Of course, for most people the approach you have outlined is the best as they cannot handle the emotional roller coaster of bouncing capital. But for people who have more than ten million, it’s much better to stay 80% in equities and 20% in fixed.

Until it isn’t. How much more do you need? – Garth

#58 Penny Henny on 12.12.21 at 8:03 pm

#67 Marcia M on 12.12.21 at 10:29 am
#62 crowdedelevatorfartz on 12.12.21 at 9:44 am

Tomorrow is Chrystia’s pre Christmas announcement Day for 2022.

How will the incredibly brilliant, vertically challenged, polyglot, non finance, Finance Minister stand tall?
____________________________________________

Vertically challenged? Because women are shorter on average than men?

You bigoted POS, just go away.

Garth, please delete this self-absorbed fool.
//////////////
Marcia, Marcia, Marcia

Short is short

#59 Rastafarian on 12.12.21 at 8:07 pm

#36 VladTor on 12.12.21 at 6:51 pm
Dear Garth,

80% Canadian vaccinated! With me – 80.0000000000013%.
Lets return to reality!
—————————————————————————–
What reality? The sad reality, as I have mentioned previously, that the majority on this site are lacking of basic math skills.

Try 80.0000026%

**Are you sure you aren’t related to Old InActive?

#60 crowdedelevatorfartz on 12.12.21 at 8:10 pm

@#49 matt damon

Just curious.
Did you get paid residuals for Team America?

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

#61 Eco Capitalist on 12.12.21 at 8:12 pm

@ #15 Sail Away

Thanks, that made me smile!

#62 millmech on 12.12.21 at 8:13 pm

#27
The information I have gathered is from five relatives who work in the hospitals/care homes in BC.
When I asked them about covid and what seems to make it worse , in their experience they said the people who are over weight have a harder time and longer recovery.
That is my anecdotal evidence from people at ground zero so to speak.

#63 Drinking on 12.12.21 at 8:21 pm

#8 Faron

Take the Coquihalla’s washouts. Engineers (who I have consulted with) carefully planned for potential large river flows among vast suite of environmental factors to be designed for. But, they didn’t foresee that the knock-on of those flows was a reorganization of the channel.

—————————————————–

You must be joking. This was all built under numerous engineers objections just to get it done for Expo 86. Cut the crap, the warnings have been out there since then, numerous so called carbon taxes collected to fix all this,(so called improve all this) what a joke, and you wonder why people tune out to politicians and jokes as yourself. Get effing real and start telling the truth!!!!

Take that flight or drive your SUV to the next protest and destroy the economy of the next town with NOT providing ONE SINGLE JOB!! Middle finger directed right to you!!!

#64 VladTor on 12.12.21 at 8:26 pm

#58 Rastafarian
The sad reality, as I have mentioned previously, that the majority on this site are lacking of basic math skills.
**************

This is really sad ! With whom?

Number of births in Canada each year – close 380000!

So, my friend, for a more accurate calculation, I used a double integral eliminating the inevitable statistical error.
Also I used the Gaussian function. Got it?

#65 Old Active on 12.12.21 at 8:27 pm

#52 Provocateur

#9 Old Fart on 12.12.21 at 5:25 pm

What are you saying with this incredibly rude and classist comment? Do you not appreciate your car? Do you not respect the work people do? Appreciate people’s work and effort so you could benefit from a finished product that is made in Canada?

———————————————————————–

Kind of presumptuous that I would be buying any vehicle that is built in Canada. Your just proving my point about IQ even more.

The thought would never cross my mind to buy any of these vehicles. Seen too many horror stories over the years. I need a vehicle that is dependable.

And yes … I do know a few who work/worked on the line and have since been “mothballed”.

———————————————————————–

Yes, I would expect no less.

You really should stop commenting, because the more you do the more we see continued rudeness and your insecurity for some reason.

Dependability is your criteria? Why don’t you tell us the model you chose that is so dependable and reliable.
TIP: Google it first before you make a fool of yourself.

Let me guess? You buy one of those luxury brands, probably from Germany, right? Driving behind a three pointed star makes you feel like you’re a much more worth human, right? Like you’re better than others. Or maybe you’re the four rings house of VW guy – Audi/Porsche? Or maybe you still believe that BMW is the ultimate driving machine, instead of front wheel drive commuter or cheap SUV both shadow of the BMW cars you were told were amazing two decades ago? The premium gas they require makes you feel like a premium human? The loss of value is depreciation you write off with pride? Maybe you don’t even know that BMW or Mercedes was made in NASCAR country? Or that your Audi is maybe Mexican?

Would you believe that even in the motherland of Germany these cars have a below average reliability ranking and report between 135-150 problems per 100 vehicles? And that’s for ones built in Germany.

Meanwhile, those people you speak about with such contempt in Ontario put together some of the most highly rated brands and models in reliability and dependability year after year. Toyota and Lexus for example – dominating the charts for a decade if not more.

Anyhow…I’m done with you. I wish you all the best. May you become a better person, seek improvement and show more kindness and understanding to your fellow humans.

#66 leebow on 12.12.21 at 8:37 pm

There is this Von Neumann-Morgenstern theorem, that proves that a rational (in Von Neumann-Morgenstern sense) agent will prefer a lottery with highest expected return. Truth is, everybody is a cowboy (in Von Neumann-Morgenstern sense) and looks for high expectations when things go well. When things go not so well, they promptly soil their pants and change their preference to low volatility (ca$h). Which is a pity, because the expected return on investment (investment as defined by, for example, Graham – what Garth promotes, which bitcoin is not) is actually higher when things are too scary for the cowboys.

#67 Shawn Allen on 12.12.21 at 8:39 pm

How Municipal Property Tax Works

#4 Dave on 12.12.21 at 5:02 pm said:

Canada lives on real estate, the taxes it collects keep this country running and growing. No government will let this slide significantly.

There will be no big correction, small one at Best!

***********************************
It appears you are implying that municipal property taxes would fall if home prices fall.

That’s simply not how it works. If AVERAGE home prices in a community fall by half the mill rate doubles.

Let me show you a real example

In 1998 the mill rate in my community was $11.259 per $1000 or 1.1259%. This excluded the education portion of the tax.

In 2021 with the average home value far higher the mill rate is $8.52 per thousand or 0.852%.

A lower mill rate! Yet property taxes rose each and every year. The mill rate went down because AVERAGE property values rose faster than the advertised tax rate increase.

Municipalities tax based on what they need and voters will put up with. They adjust for changing home values such that if home values double the mill rate falls in half.

I’m not sure if that is the case in every municipality in this country but it may be. This has always been my understanding.

True the federal government would not want to see a big decline in home values but I don’t think any government in would lose tax revenue. They adjust the mill rate.

It’s simply a myth that municipalities directly benefit from higher average property values.

Perhaps someone in the know can confirm this. You need to look at the mill rate.

When a municipality says they increased property taxes by 3% they mean 3% if average property values were unchanged. Then they adjust the mill rate for the actual change in average property values.

#68 Cici on 12.12.21 at 8:41 pm

Good advice Garth, as usual, except… where are you getting this from: “It’s a certainty CBs will raise the cost of money six, seven or eight times over the next 24 months.”?

Everyone else seems to be saying the complete opposite: one or two rate hikes, maybe, before they bring her down again. Didn’t Tiff just say no increase until later half of 2022, and didn’t Australia and England say something similar, all using Omicron as cover? And in 2018 Canada, when things were less lofty and fragile, didn’t the housing market start to slump when rates went up to around 3.5%?

Personally, I’m wearing my tin-foil hat both day and night these days, because I can’t see anything good coming out of policy: housing up, inflation up, poverty up, crime up, and aiding and abating criminal activity up too. The MMT model JT and CF seem so to be so furiously touting makes me believe low rates, increased government borrowing and deficits, speculation, inflation and currency devaluation are on the menu until it all blows and the G7 coordinate a debt jubilee reset. And/or something worse happens lead by China and/or Russia.

Interesting, yet frightening times.

CBs never move once or twice then reverse. Bizarre. – Garth

#69 Sail Away on 12.12.21 at 8:45 pm

Dolce, can you sample this place for steerage and report back? Thx.

“27 courses, very little edible: Review of Michelin-starred restaurant goes viral” https://www.today.com/today/amp/tdna242696

#70 wallflower on 12.12.21 at 8:46 pm

#8 Faron on 12.12.21 at 5:13 pm
—–
Faron – this is what climate change is!
Hotter hots
Colder colds
Bigger bigs, etc.
Volatility writ large.

This has been predicted and communicated for many decades by those who study climate and climate change. It has been covered in layman publications. There is no news in this.

#71 Chameleon on 12.12.21 at 8:52 pm

#47 Catatonic on 12.12.21 at 7:35 pm
#5 Chameleon on 12.12.21 at 5:07 pm

Is there anything worse that a wet dog?

A question: Do you find you’re lazier now than before the pandemic?

====

Yes, Felix … a wet cat! In fact, any cat, wet or dry.

====

Cats and water? I’ll let Felix tell you about that. Maybe on Feline Friday?

Meanwhile…lovely piece in the NYT today.

Pandemic Puppy Owners, We Need to Talk

When a friend of mine called recently to announce that he and his family had welcomed a puppy into their home, I didn’t exactly gush with congratulations. A halfhearted “That’s great” was about all I could muster. I’ve been asthmatic for pretty much my whole life.

As he chattered on about the puppy’s breed (something-doodle) and name (Randy or Rosy or Moppy), I swore I could feel the onset of runny eyes and itchy skin. As the cute candid puppy photos started pinging on my phone, I thought of my 7-year-old, who, like me, is allergic to feathers and fur. Then I mentally shuffled these friends into the category of acquaintances whose apartments I would rarely, if ever, visit again.

The pandemic has also driven other friends and family to puppy love. A few informed me, without a hint of shame, that they cleverly registered their shaggy menaces as therapy animals, giving them access to restaurants, hotels and airplanes.

Data on dog ownership since the start of the pandemic is a still a little spotty, but as a New Yorker, I have noticed more dogs underfoot and a ramping up of the species’ cute and cuddly influence on the city ecosystem. All of this is perfectly acceptable for those nonallergic humans who regard New York City as dog-friendly terrain and therapy animals as typical as brunch and pizza. But the rest of us wheezing, sniffling types find ourselves living inside a puppy bubble, where the refusal to gush over a hive-inducing, albeit adorable, canine is considered poor etiquette.

Here’s something dog owners should consider: When introducing your beloved companion to non-dog folk, think of it instead as a wild animal. Don’t ask: Would you like to pet my adorable pug? Instead ask: Would you like to pet my direct descendant of the gray wolf?

I know I am inviting the wrath of dog lovers everywhere, but please keep in mind, my puppy aversion is less Cruella de Vil and more Benadryl and hand-sanitizer derived. I just think, at least here in New York, that we have gone too far: dogs in restaurants, dogs in strollers, dogs on buses and subways. And the unscooped poop on sidewalks suggests that both puppy and puppy owner have taken to marking their territory.

I don’t mean to blame the poor dogs either. It’s the owners who concern me, especially those to whom I am related. They have an excessive and annoying glee about their minions. They labor over what to name them. They spend lavishly on their happiness. Why? I have a theory: While pets can bark, they can’t really talk back or express pointed observations about their owners. If there is ever technology that translates meows and barks into owner feedback, it will dry up the billion-dollar pet industry in weeks.

My children, even the sniffly one, adore dogs, which makes my disenchantment more difficult. They are eager to pet dogs in elevators, gaze mesmerized at dog runs and ask, nearly every week, “When are we getting a puppy?”

I’ve been straight with the little guys: We’re not, I told them. And I’m not going to budge. But when my eldest son brought home a lizard named Bobby from school to babysit for the weekend, it revealed a small fissure in my anti-pet stance. I fell for the lizard.

Bobby was a chameleon. The kids loved him. They held him. They sponge-bathed him and dressed him in paper-towel robes. They FaceTimed cousins to tell stories of his cute or devious shenanigans.

To be honest, I never detected an instance of emotion in Bobby’s lizard face. He did no tricks and showed no personality, not even wagging his reptilian tail. He was the perfect pet.

It turned out everyone was happier with Bobby in the house. We sat around the cage ogling him through the glass, waiting for him to perform a flip, which he never did. Waiting for him to lift a claw or wink an eye, which he refused to do and which was so Bobby-like. We asked him if he was a good boy and he looked at us with his blank Bobby stare, and we concluded, yes, he was such a good boy.

When it was time for Bobby to leave, we took a family picture. Because for those few days, Bobby was part of our family. He hung in there through all the petting and rubbing and sponge baths. He had no hair. I never sneezed once. I love him for that.

#72 yvr_lurker on 12.12.21 at 8:56 pm

#62 Drinking You must be joking. This was all built under numerous engineers objections just to get it done for Expo 86. Cut the crap, the warnings have been out there since then, numerous so called carbon taxes collected to fix all this,(so called improve all this) what a joke, and you wonder why people tune out to politicians and jokes as yourself. Get effing real and start telling the truth!!!!

Take that flight or drive your SUV to the next protest and destroy the economy of the next town with NOT providing ONE SINGLE JOB!! Middle finger directed right to you!!!

—————-
No need to get bent out of shape. Help yourself to whatever dose of Cannabis oil you need as T2 says it is all
legal.

I think Faron is spot on with his diagnosis of how the extreme events now (and what will likely come) could not have been in the planning by engineers who designed these highways at the highest levels of hazards imagined in say 1986 (Coquihalla). It is now just a different level of magnitude and will be so going forward. Faron is spot on.

Where I might differ from Faron is what the “local” solution should be. Should we join the Extinction Rebellion nutbars and glue ourselves to the Cambie street bridge blocking traffic for hours, and happily accept the blocking of all access points to YVR for those trying to fly out of the airport (after having had multitude of COVID tests before flight) and miss their plane? Should we accept huge tax grabs from YVR city council who were proposing permit street parking everywhere in the city (rising to 450.00 per year for a car in front of your house) or mobility pricing if we cross some imaginary line in the city. We can’t shut the entire oil and gas industry down tomorrow, and the pipeline should probably be completed.

Indeed we will all transition away from oil and gas (but no massive unemployment) , there should be Gov’t incentives for businesses dealing with clean energy, and everyone must do their part by driving less etc….

#73 David on 12.12.21 at 8:57 pm

Very wise words here Garth, much appreciated.

As for the virus it’s hard to tell, i did warn you last time before Delta that this isn’t over yet but with O i am hearing lots and lots of confusion among the experts.

Hoping for the mild version and not the attenuated one.

#74 Ponzius Pilatus on 12.12.21 at 9:02 pm

#29 Faron on 12.12.21 at 6:30 pm
#19 Wrk.dover on 12.12.21 at 5:45 pm

Unfortunately, the noise in tornado data (location, strength, duration, frequency) makes it really hard to say anything meaningful about trends. Can only comment on the conditions that fuel them and even that’s hard.
—————–
Here’s what I’m thinking about the economic impact that these Tornados will have on the South.
Many major companies have listened to Mr. Market’s counsel, and have located to the South, where cheap labour and housing are in abundance.
Now, Mrs. Nature throws them a nasty curve ball.
Let’s see what Bezos will do?
I’m long on Mrs. Nature.

#75 Leechy Fruit on 12.12.21 at 9:19 pm

I’m contemplating switching from vab to vsb and xsb. Question, though. With VAB, when rates rise, don’t yields increase accordingly? In other words, isn’t switching to vsb a wash (just swapping price for yield)?
There’s something I’m not grasping here. Anybody care to help me understand, please?

#76 Shawn Allen on 12.12.21 at 9:22 pm

Municipal Taxes

In an extreme case of average home prices falling 50% and the mill rate doubling this would be billed as a 0% property tax increase.

Why? Because a $4000 tax bill on a average $400,000 house would still be the same $4000 even thought the average house value fell to $200,000.

It worked the same on the way up. There simply was no wind fall gain for municipalities as home values rose on average. That’s my understanding. And my own tax bills confirm it for my municipality.

In that sense municipal property taxes are indexed to average prices and the advertised tax increases have been honest – no extra benefit from inflation.

#77 Palpha on 12.12.21 at 9:41 pm

https://youtu.be/ZbiOAqZaKDQ
C2 bill. Where does the money come from?
If it wasn’t so sad it would be hilarious

#78 Sail Away on 12.12.21 at 9:49 pm

#8 Faron on 12.12.21 at 5:13 pm

The icing on the cake was a fierce tornado that touched down just minutes before mowing down a part of Bowling Green Ky. That plume of debris climbed to 20,000 feet. There was almost no time for warning. It was 1 AM local time.

———

It’s possible that Bowling Green may actually be the Hellmouth. A sinkhole also swallowed their Corvette museum a few years back.

#79 Bdog on 12.12.21 at 9:56 pm

7-8 rate increases over the next 24 months? Not a chance. Remember last time you thought rates were going up in any meaningful amount?

Not my prediction, but the consensus position of Canadian economists, plus market participants. But you know better, right? – Garth

#80 Drinking on 12.12.21 at 10:05 pm

#72 yvr_lurker

Understand your logic, appreciate your feedback.
My point that it has nothing to do with oil and gas. This was forecasted back in the 80’s due to bad engineering.

One can argue till (whatever one believes), does climate change?? Always has; do humans have a role in all that, sure but just stop and I mean STOP all world problems on greedy developers building on flood plains, people purchasing on it, very bad and manipulated language by the special interest groups, MSN and most hypocritical liars out there that take but do not deliver and yet all blamed on oil and gas.

If they want to take a job then create one. If they wish to close down an industry then use the donations to a new creation of jobs. Do as you say!! I know, hard concept nowadays!

I will stand by my sayings with these called pretend new engineers that think this all is based on this new fallacy instead of digging back and seeing what the real truth is/was, then new engineers get your heads out of your asses and do your homework!!!!

The engineering behind the Coquihalla was a joke to begin with and I think that you know that!

#81 Ponzius Pilatus on 12.12.21 at 10:06 pm

#71 Sail Away on 12.12.21 at 12:00 pm
#67 Marcia M on 12.12.21 at 10:29 am
#62 crowdedelevatorfartz on 12.12.21 at 9:44 am
Tomorrow is Chrystia’s pre Christmas announcement Day for 2022.
How will the incredibly brilliant, vertically challenged, polyglot, non finance, Finance Minister stand tall?
———-
Vertically challenged? Because women are shorter on average than men?
You bigoted POS, just go away.
Garth, please delete this self-absorbed fool.
———-
Yes, how dare Crowdie talk about someone’s height. Shockingly rude. Possibly a hate crime.
Is this better: ‘with her sturdy caboose and nose that could split hailstones’?
————————
Sailo,
I always thought that your favourite President always acted like a little P**ck.
Turns out some nasty people on the Internet think even worse of him.

https://www.dailydot.com/debug/fake-donald-trump-christmas-card/

#82 TurnerNation on 12.12.21 at 10:35 pm

When will this end? Once the FEDERAL QR codes are ready. These will be linked globally, as as the regular passports.
The patchwork of Provincial QR codes is just an enrollment stage.
Fact: the bogus Charter of Rights and Freedoms has been toppled, supplanted by QR codes.
Want freedom of travel, freedom of association? You must first submit to the New System. Into the Blockchain you go.

#83 Drinking on 12.12.21 at 10:35 pm

#72 yvr_lurker

Just a note I forgot on my last post; spent 50 yrs in B.C. and Alta, Sumas prairie ( was a lake at one point); was recently stranded on the Island, first wave, could not get out for a week, lovely people treated me great, help me escape the terrible situation in B.C., forever grateful, made a donation to Red Cross to help them out as well as other things that Canadian just do for one another, I am as much British Columbian as an Albertan and vice versa; 50 plus yrs does that, respect and love all the people in my two favorite Provinces but cannot stand the liars and special interest groups.

Been blessed enough to travel this country and love every canuck out there! Great country, lousy politics!!

#84 Repurchase Disagreement on 12.12.21 at 11:08 pm

Faron posted:

“Still, this was one of the strongest outbreaks ever with the only truly comparable storms happening in mid to late spring.”

Absolutely untrue about when comparable storms comparable storms occur. When winter dynamics and spring-like thermodynamics present anything can happen. It doesn’t happen frequently from a human perspective (except in the 1950’s but that is another discussion…), but cool season high-end outbreaks with long-track violent tornadoes happen regularly on the meteorological time scale. Some notable examples, including the December 18, 1957 outbreak (which was a bit further north and produced F5/EF5 damage):

https://en.m.wikipedia.org/wiki/Tornado_outbreak_of_February_19%E2%80%9320,_1884

https://en.m.wikipedia.org/wiki/February_1950_tornado_outbreak

https://en.m.wikipedia.org/wiki/Tornado_outbreak_of_December_5,_1954

https://en.m.wikipedia.org/wiki/November_15%E2%80%9316,_1955_tornado_outbreak

https://en.m.wikipedia.org/wiki/Tornado_outbreak_of_November_7%E2%80%938,_1957

https://en.m.wikipedia.org/wiki/Tornado_outbreak_sequence_of_December_18%E2%80%9320,_1957

https://en.m.wikipedia.org/wiki/1967_St._Louis_tornado_outbreak

https://en.m.wikipedia.org/wiki/Tornado_outbreak_of_January_23%E2%80%9324,_1997

And there are more.

Also, the Tri State Outbreak of March 1925 was actually in late WINTER, and that has the > 200 mile path-length event comparable to Friday’s event, and in the same region (actually a little norty).

Again, blog dogs… 1925.

“The ingredients (record warm temperatures, very unstable atmosphere) were unprecedented for the time of year.”

Misleading. Yes there were daily records broken, but the Mesoscale environment the Mayfield, Kentucky storm was ingesting was roughly 70°F with a 68° F – 70° F Dewpoint. Nothing close to the many records in the mid 70’s for that region in the second week of December.

Sustained outbreaks are a function of balanced favorable shear and favorable thermodynamics, not EXTREME surface temperatures.

“Climate projections tell us that changes in severe weather will be complex, but that in south-central US, the worst severe weather will be stronger.””

The whole “Tornado Alley will move east” notion is purely speculative, and the paper suggesting that possibility explicitly states that.

#85 Repurchase Disagreement on 12.12.21 at 11:19 pm

Faron also stated in a later post:

“Unfortunately, the noise in tornado data (location, strength, duration, frequency) makes it really hard to say anything meaningful about trends. Can only comment on the conditions that fuel them and even that’s hard.”

I concur.

Also Faron, all of the Tornadoes on Friday were warned WELL in advance.

#86 westcdn on 12.12.21 at 11:29 pm

Am I cowboy – yes. Don’t get your hopes I will destroy myself. I listen and will get things done. Sure I take chances. I am not stupid nor bright and will fight.

I care about my daughters. What matters to me are them and their children. I will leave them something, even a memory.

I will try. Failure is not my goal.

#87 GOLDENBOY on 12.12.21 at 11:50 pm

#5 Chameleon on 12.12.21 at 5:07 pm
Is there anything worse that a wet dog?

Yes, a wet dog that has been sprayed by a skunk.
My poor Australian shepherd, Blossom.

#88 Malcolmm on 12.13.21 at 12:14 am

Volatility does not mean risk. Or maybe you know more than Warren Buffett and Benjamin Graham about investing. Volatility creates opportunities to buy and sell assets at attractive prices, simple as that.

http://mastersinvest.com/volatilityquotes

#89 TurnerNation on 12.13.21 at 12:41 am

War on Small Business. Sudbury ON just released a 28 page document, specially with NEW CV rules, and targeting only the small businesses.

You can’t make this stuff up. Well, they did. Almost back to normal guys! The most diabolical stuff is in there. They will be so healthy up there.

https://twitter.com/rpoconnor/status/1470083605296726024

“@rpoconnor
1/ Sudbury Medical Officer of Health Dr. Sutcliffe has issued a Letter of Instruction of record-setting length at 28 pages.

It’s full of restrictions that will harm small business and kids, and will ruin Christmas traditions for many”

#90 yvr_lurker on 12.13.21 at 3:08 am

#83 and #80 Drinking
——-
I have empathy for the workers in the oil and gas sector who are just trying to feed their families. Have in-laws in Alberta (Drayton and Okotoks) in this area. They completely recognize that long-term change is coming, are no climate change deniers, and are taking night courses from NAIT to learn more about alternative energy technologies in order to make a transition to a new field.

Where I have a real problem is with those climate activists, like Extinction Rebellion, who want everything shut down immediately (no YVR, huge layoffs, uber-high taxes on cars and parking, mobility pricing everywhere). What exactly should all those workers displaced by an immediate change in the oil and gas sector do? Can they all get shares in T2’s 9Million dollar trust fund? Do we all collectively inviscerate ourselves financially while China and India keep pumping out massive TOTAL amounts of hydrocarbons?

Many of the hardcore climate activist leaders in our city are very well off financially (Boyle married to Seth Klein who is Naomi Klein’s brother) through book-writing etc..They live close to work. No need to worry about long commutes due to insufficient public transport and having to live in far-flung suburbs where housing is cheaper than in the inner core. Should those less fortunate have to completely eat up the costs through all sorts of climate taxes imposed for needing a vehicle for work?

Regarding the highway issues, fires, heat domes, etc…Faron I think is spot on in what is unfortunately in store for us. Frankly, I don’t see technically how they are going to be able to redesign parts of the highways in narrow canyons or on cliff sides next to rivers to the level needed not to be washed out by the extreme storms that will become more common.

Was explaining to my 17 year old tonight (who is applying to engineering schools) about how the civil engineering field may have lots of jobs going forward with redesigning infrastructure to help mitigate the effects of these extreme events.

#91 Jane24 on 12.13.21 at 3:14 am

Guys if you want balance then have a little bitcoin and bitcoin’s friends in your investment portfolio. I was late to the crypto party as i read too many sensible articles on how crazy it all is and only put in 5% of my investments in March/April this year. The volatility is stunning to watch but in those 8 months I am up 80% and I really have no idea what I am doing. I read an article about some weird non-existent investment, as in there is nothing you can touch or actually see or a profit, buy a tiny bit and then watch it rise and drop but overall rise very nicely indeed. I am working on getting a free house extension. I have already removed my original Spring investment so we are on 100% found money now. Crazy.

Talking about crazy the UK is going to do 20 million booster shots in the next 18 days so by NYE everyone over 18 who will accept one has a booster. Terrible Covid numbers in the EU. It’s coming back.

#92 Faron on 12.13.21 at 4:13 am

#83 Drinking on 12.12.21 at 10:35 pm
#80 Drinking on 12.12.21 at 10:05 pm
#63 Drinking on 12.12.21 at 8:21 pm

Really feeling your feels tonight. Or drinking your drank?

Don’t blow a gasket fella.

#93 Faron on 12.13.21 at 4:14 am

#79 Bdog on 12.12.21 at 9:56 pm

7-8 rate increases over the next 24 months? Not a chance. Remember last time you thought rates were going up in any meaningful amount?

Not my prediction, but the consensus position of Canadian economists, plus market participants. But you know better, right? – Garth

LOL, Bdog sounds like the kind of guy who “does his own research”.

#94 Faron on 12.13.21 at 4:28 am

#78 Sail Away on 12.12.21 at 9:49 pm

#8 Faron on 12.12.21 at 5:13 pm

…hellmouth…

No, pretty sure that’s in Nanaimo.

#95 under the radar on 12.13.21 at 4:56 am

“Until it isn’t. How much more do you need? – Garth “- So right you are. At a certain worth and when you near retirement eschewing risk and preserving capital by avoiding loss , becomes a dominant theme . I say no alot.

#96 westcdn on 12.13.21 at 5:14 am

I am always amazed by what people think it is worth. Think RE and ask me. You will not like the answer.

But then that is me. I will go after opportunity even if it could be ugly. Saving is something I do and it is not to make me rich but live well. It is pointless if you do not spend it when you can.

I intend to keep my head high. It will be a more difficult task than I want. Things have never come easy for me. I do win but with cost. I am waiting to what God will say to me.

#97 rates will rise on 12.13.21 at 6:28 am

#79 Bdog on 12.12.21 at 9:56 pm

7-8 rate increases over the next 24 months? Not a chance. Remember last time you thought rates were going up in any meaningful amount?
__________________________________________

most people will be SHOCKED to see how high interest rates go in the next decade. shocked.

#98 Do we have all the facts on 12.13.21 at 7:33 am

On January 1, 2020 the M2 money supply in Canada was $1.8 trillion. The M2 money supply in Canada on January 1, 2022 will approach $2.3 trillion.

Increasing the supply of money by $500 billion, or 28% over two years, has resulted in inflation as the purchasing power of each Canadian dollar was reduced.

If a company was to increase the number of shares issued by 28% over two years is seems obvious that the value of each share in that company would decline. The Bank of Canada however told Canadian citizens that inflation was transitory and once external factors, like the supply chain, were resolved inflation would return to manageable levels. Pants on fire!

Apparently Modern Monetary Theory has concluded that you can increase M2 money supply by 28% over two years without reducing the purchasing power of the Canadian dollar. All you have to do is withhold the truth from Canadian citizens.

Let’s see if Chrystia is prepared to tell Canadians the truth about the cause of inflation and provide some guidance on how the Government of Canada intends to protect the Canadian dollar from inflation in the future.

Mendacity has never been a virtue.

#99 crowdedelevatorfartz on 12.13.21 at 8:02 am

@#91 Jane 24
“The volatility is stunning to watch but in those 8 months I am up 80% and I really have no idea what I am doing.”

+++++

Perhaps you should spend some of that cyber money on cyber real estate and get a piece of property in the Metaverse.

https://nationalpost.com/news/world/a-couple-got-married-in-the-metaverse-and-some-people-are-just-complaining-about-the-graphics

Think about it.
No icky virus. No vaccines. no pollution.
Just one dimensional people.
You’d be way ahead of the curve.
10 years from now you can sell for millions of bitcoins and then switch that to real cash….. and buy Sicily

#100 Old Active on 12.13.21 at 9:15 am

#30 Beanie Babies For Sale on 12.12.21 at 6:35 pm
#9 Old Active on 12.12.21 at 5:25 pm

Vaccine passports are very effective at keeping those whom are most likely to consume healthcare resources if they catch covid from being in situations where there is a high chance of covid exposure.

It’s not about the unvaccinated spreading to the vaccinated, it’s about keeping the unvaccinated from catching covid and filling up our ICUs which has a negative effect on healthcare for everyone.

Let that sink in a bit.

—–

In hospital but not the ICU
Unvaccinated 166
Vaccinated 84

In ICU
Unvaccinated 68
Vaccinated 25

https://covid-19.ontario.ca/data/hospitalizations

Who but the vaccinated with their passports are spreading and more importantly moving variants around the world? Omicron did not get here on an unvaccinated person, of that you can be certain. Thanks for protecting everyone so well vaccinated people.

The point of my comment, for clarity, is not division of unvaccinated or vaccinated. That’s already been achieved by our leaders and MSM.

I believe everyone should have the freedom of choice, and I believe everyone deserves to be cared for by the health care system into which they have contributed. To do otherwise is to violate that individual’s human rights as clearly as daylight.

I’m fully prepared to defend this view, and welcome other views, if you feel this freedom of choice as it pertains to body and compassion and care and access to health care are wrong views to hold.

#101 Money Supply on 12.13.21 at 9:19 am

#98 Do we have all the facts

What about this chart from a few months back?

I thought it was more than that

https://www.greaterfool.ca/2021/08/18/

#102 Don on 12.13.21 at 9:28 am

RE: oil and gas

Renewables will never overtake oil. They are intermittent and unreliable. They are construced using plastics, carbon fibre, and rare woods such as balsa. They have their own carbon footprint and environmental poisoning that is larger than an oil field when it comes to development and the mining consumes too much water. In places such as the Lithium Triangle, governments must choose between feeding their citizens or using the 500,000 galons of water needed to produce only 90 Tesla batteries.

Because oil by-products makes 90% of goods in our day-to-day life, by removing fuel from oil (the largest revenue stream) it will put upward price pressure on all goods since higher prices will be needed to fill the gas revenue.

The demand for lithium and copper for the EV is and will continue to put upward pressure on the price of EV’s, making them even less price competitive with the ECM. The only thing that will help is increasing subsidies. How much longer will people put up with subsidies for people who can most likely afford an EV in the first place? Would those funds not be better spent on healthcare?

People also forget how much we rely on batteries for things such as the cell-phone. There is not enough Lithium around to accommodate both overtime. Which do you think governments will favor in the future – communications or cars for people with above average incomes?

There is roughly 100 years worth of mineable Lithium available at todays level of extraction. There is 400 years worth of both natural gas and coal that will keep energy prices low for centuries. Battery power will prove to be a pipe dream.

#103 Dharma Bum on 12.13.21 at 9:32 am

It was really, really windy here on Saturday.

I lost 1 shingle off my roof.

Climate change.

It’s an emergency.

#104 Quintilian on 12.13.21 at 10:00 am

“#79 Bdog on 12.12.21 at 9:56 pm
7-8 rate increases over the next 24 months? Not a chance. Remember last time you thought rates were going up in any meaningful amount?

Not my prediction, but the consensus position of Canadian economists, plus market participants. But you know better, right? – Garth”

The consensus is predicated on numbers.
Monetary policy is predicated on politics, nothing to do with what is appropriate.

#105 Meh on 12.13.21 at 10:09 am

Yawn…wake me up when interest rates are 5-7 percent in Europe and North America and banks actually have to shoulder the risks of their ridiculous lending practices.

Until then, this all just meaningless jabbering as it has been for nearly 13 years. I read that if interest rates just climb to a measly 2%, paying just the interest on debt will become the number 1 expense for most government budgets in developed countries. What a joke, what a sad and criminal joke.

#106 Do we have all the facts on 12.13.21 at 10:15 am

The chitchat leading up to today’s speech by our Finance Minister includes the suggestion that Bank of Canada economists have determined that increases in the overnight interest rate in 2022 may not curb the type of inflation that currently exists in Canada.

This line of thinking acknowledges that the major portion of the $500 billion increase in M2 money supply went into the pockets of the wealthy not into the mainstream Canadian economy. As a result current inflation in Canada was caused by external factors not an increase in consumer demand within the general population.

Yikes!! I would love to hear that theory presented to Canadian citizens. Let’s face it the Bank of Canada is never going to admit that a combination of low interest rates and a 28% increase in M2 money supply contributed to inflation. Their primary role in life is to control inflation not give it wings to fly.

We deserve to hear the truth about inflation from the government we elected to represent and protect our collective interests.

We can handle the Truth!!

#107 Shawn Allen on 12.13.21 at 11:14 am

Money Supply?

#98 Do we have all the facts on 12.13.21 at 7:33 am

On January 1, 2020 the M2 money supply in Canada was $1.8 trillion. The M2 money supply in Canada on January 1, 2022 will approach $2.3 trillion.

******************************
Good facts. Do you have a link to a graph that shows the increase or a table of the M2 number by year?

How much of the $500 billion increase came from non-government borrowing from banks (which creates money) and how much from government borrowing from the central bank or regular banks, and how much from the central bank buying existing government bonds from entities other than banks?

Here’s my understanding of money creation which I believe is correct:

In summary, money is created when:

1. People, corporations or other entities borrow from banks

2. A bank buys a newly issued government bond. In effect this is the same as number 1, it is the government borrowing from a bank.

3. The central bank buys a newly issued bond directly from government. This is the government borrowing from the central bank. The government can transfer the deposit created at the central bank to a commercial bank and issue cheques.

4.The central bank buys existing government bonds from people, companies or other entities (NOT including banks).

Money is not created when:

1. People, corporations or other non-bank entities buy newly issued bonds from government. (Existing deposit amounts merely get transferred to government, no new deposits are created.)

2. The Central Bank buys an existing (government) bond from a bank. The bank gets reserves at the central bank but those are not counted as part of the money supply. This does count as injecting liquidity since the bank has added ability to make loans. But especially if the bank was not constrained in its loan making this does not directly cause the bank to make new loans and create money.

#108 Ponzius Pilatus on 12.13.21 at 11:26 am

#90 Lurker
Good post.

#109 gold on 12.13.21 at 11:27 am

Can you explain why Canada has no gold reserve? Only Canada in G7 and G20 has no gold reserve (sold all in 2016). That can make Canada’s currency no power in the future?

Gold is unrelated to currency. The CB doesn’t have any. Neither should you. – Garth

#110 Mattl on 12.13.21 at 11:32 am

I guess the only place I may differ from you is the definition of ‘reasonable return’. I know the inflation numbers have show to be low for years but things like housing, utilities, fuel are way up the past decade. The boat I was planning to buy cash today has almost doubled since I started saving – a 70K boat in 2012 is a 120K boat today.

I’m not convinced 7% net fee’s, around 4% net inflation, is enough. And I’m not convinced that returning 1/2 the SP 500 is a good plan for someone with a 20 or 30 year horizon.

Hope this gets posted, made comments like this that have been deleted. Not a shot at your strategy, which is perfect for majority of Canadians. But in my high earning years and with a long horizon I prefer a bit more risk, and upside.

#111 Ponzius Pilatus on 12.13.21 at 11:39 am

#98 Ipso Facto
If a company was to increase the number of shares issued by 28% over two years is seems obvious that the value of each share in that company would decline.
————————————
Not if it’s Tesla.
Tesla investors are going by a new math.

#112 Diamond Dog on 12.13.21 at 12:41 pm

A few things come to mind this morning Garth. I’ve got a dim view on Crypto but for obvious reasons. Bitcoin as Doug mentioned is laden with volatility and while it may have a long term future, it’s memes will not.

Most crypto memes won’t be here in a few years. The currencies that trade within this sphere have demand almost solely from investors wanting to get rich quick from a rise in value from the float. Most of these currencies aren’t circulating in the general public.

The fees are high (like popular Coinbase in the U.S.) for users. Paypal for example, is a platform that passed fees onto the consumer, making it free for retailers which is great marketing but it’s a 4% fee none the less for the consumer using Paypal and that’s steep. China is many things but I can’t imagine China ever allowing a Paypal platform to exist because it gouges the consumer.

Crypto currencies aren’t anywhere near 4% (Coinbase is 1.5 to 2.5% and scales down for high volume trade, but 80% of transactions are low volume) but it’s still far more expensive than banks using Fiat and they don’t make it free for retailers meaning the edge Paypal enjoys does not exist. So what are we buying when we buy Crytpo?

An unregulated market. It’s good for drug dealers and arms dealers and the black market. Youth is buying something new but new does get old. At the end of the day, user fees are not cheap, Crypto is not mainstream and as such is not user friendly, Most of the Crypto isn’t circulating so these are not productive assets, the Stable coin that acts as a coin exchange is fraught with fraud charges and the main attraction of Crypto being unregulated will at some point be regulated (U.S. treasury says 2023 expect regs), and most if not all investors are not in it for any other reason than to get rich quick.

What is so wrong with Fiat currencies? They are regulated… is that an actual problem? Public debt is swelling but they are backed by sovereign nations with real assets unlike crypto backed by nothing, is this a problem? Government can trace transactions, is that really a bad thing for an honest person? Fee’s are for the most part cheaper and Fiat is used everywhere quite freely, is this a bad thing?

I’m just listing some of the major problems with Crypto namely, it’s competition. For the most part its a poor imitation of the real thing. The arguments for it’s existence “Fiat will fail or spiral and we need a replacement”, imagine what that world looks like. No Fiat, no Crypto. We should expect some big lumps coming in the entire sector with Crypto for all these reasons and more.

#113 R on 12.13.21 at 12:53 pm

102: Don
Renewables will completely take over oil and gas. It will occur because it is the economically superior . It will happen within the next decade.
https://youtu.be/k7dxbegTsTI

#114 Shawn Allen on 12.13.21 at 2:08 pm

Do We Have All the Understanding?

#98 Do we have all the facts on 12.13.21 at 7:33 am

On January 1, 2020 the M2 money supply in Canada was $1.8 trillion. The M2 money supply in Canada on January 1, 2022 will approach $2.3 trillion.

Increasing the supply of money by $500 billion, or 28% over two years, has resulted in inflation as the purchasing power of each Canadian dollar was reduced.

Increasing the supply of money by $500 billion, or 28% over two years, has resulted in inflation as the purchasing power of each Canadian dollar was reduced.

If a company was to increase the number of shares issued by 28% over two years is seems obvious that the value of each share in that company would decline. The Bank of Canada however told Canadian citizens that inflation was transitory and once external factors, like the supply chain, were resolved inflation would return to manageable levels. Pants on fire!

Apparently Modern Monetary Theory has concluded that you can increase M2 money supply by 28% over two years without reducing the purchasing power of the Canadian dollar. All you have to do is withhold the truth from Canadian citizens.

************************************
You are smart and have tons of knowledge as you have demonstrated. And I agree you are directionally correct here. 28% more money supply must be contributing something to inflation.

But the stock analogy is not really valid.

One share in a company is clearly worth what the total company is worth divided by the number of shares. (Although by the way when a company sells shares both the numerator and denominator change but that is another story)

It is not however the case that a dolalr is worth the total value of all the financial assets in a country divided by the number of dollars in existence. That might seem logical but it is simply not the case. The correct facts in the wrong equation give the wrong answer.

You mention M2 money supply is $2.3 trillion. The value of the TSX alone is more than that. The total value of all the financial wealth in Canada is vastly more than the amount of M2 money.

I’m just saying that your company issuing shares analogy is simply not valid. Agreed 28% money supply leads to some inflation but it is clearly no where near 28% inflation.

You being smart will dwell on this and agree I suspect.

Many people will claim that inflation is indeed over 20% but they are cherry picking a few items and they are wrong.

#115 Sail Away on 12.13.21 at 2:09 pm

Well, profit taking and company dividends leave us with piles of free cash right at tax loss bargain shopping season.

And Omicron might stampede the herd. Oh my. Such anticipation.

#116 Faron on 12.13.21 at 2:19 pm

#84 Repurchase Disagreement on 12.12.21 at 11:08 pm
#85 Repurchase Disagreement on 12.12.21 at 11:19 pm

Shall I take you to the woodshed?

The only thing worth replying to is, no sht the severe weather was well forecast. That has zero to do with anything in my essay nor your biased rant. You and Drinking should hang out.

#117 Yuus bin Haad on 12.13.21 at 2:32 pm

Apparently the good people at the WHO have been thinking about what to do after the anticipated Omega strain and have come up with the “Frat House” naming convention – you know, things like “Kappa Delta Rho”

#118 mark on 12.13.21 at 2:37 pm

“Rosie” indicated that those who think that their will be 5-8 interest rate hikes are in la la la land. Got to respect his opinion, has been deep diving into market/economics for a long time.

#119 Don on 12.13.21 at 2:55 pm

R: Renewables will completely take over oil and gas. It will occur because it is the economically superior . It will happen within the next decade.

How is intermittency economically superior? Why do they need to be backed by traditional forms of energy? Why are renewable companies losing gobs of money?

More importantly, why are subsidies needed to create demand?

#120 Diamond Dog on 12.13.21 at 2:57 pm

“Oh, did I mention the climate?” – Garth

Like Faron says, climate is disrupting the economy. Take for example, high fertilizer costs. The largest Urea (Nitrogen fert) plant in the U.S. was shut down on the east coast from flood damage there. The plant is up and running, but coupled with a 50% reduction in Chinese exports, the world will run short of Nitrogen next year. Nations like India are looking like they won’t have enough to get by. It’s not all climate change, there is monopoly price fixing involved but the result is the same. Shortage.

Deliveries of Nitro could come late into seeding next year in North America, but it remains to be seen. Just the idea of a global shortage running past spring planting next year means a bite into global crop production coming off a year that may not have kept pace with consumption this year. In temperate climate in the Northern hemisphere, if commodity values mean anything, demand has exceeded supply.

Farmers will also have a shortage of Glyphosate next year (big drop in Chinese exports). The usage of Glyphosate on cultivated acres across North America is extensive, guessing here but it’s likely around 85% or higher as a pre-burn before planting. Farmers in western Canada that didn’t buy early, have no guarantees of access to Glyphosate for weed control next year.

What will this lead to? Potentially a record year for cultivated acres out of production going back to the early 90’s. Coupled with another La Nina (one is ongoing), this means inflation in food prices is not transitory and related to climate change and economic disruption in China.

In fact, with global supply chain disruption coming mainly from China i.e. empty shelves, and coupled with collapsed iron ore prices within secretive China, one might guess that China is entering recession led by a collapse in real estate construction followed by values. This is concerning since Chinese real estate is valued at close to $70 trillion, with more value than the U.S., Europe including the U.K. and Japan combined. It is the world’s monster housing bubble and all indications are that it’s popped. Early days, but more disruption is likely to follow and worsen.

Another wrinkle worth following is a potential war with Russia invading Ukraine. I mentioned possibility a couple years ago with anti NATO Russian compromised Trump in power and now Putin has decided the timing is right. It could be in part due to economic developments in China that the western world hasn’t yet caught on to or weakness in Turkey (currency has devalued 40% there, inflation running at 20%) or have to do with Putin polls or other geopolitical circumstances, but Russia has been stocking up on gold as an alternative currency to the dollar for a while now and the threat is real.

http://e-sushi.fr/imagearticle/2015/08/europe-map-countries.jpg

If we look at the map of Europe and cross reference it with a list of NATO allies, we will see that there’s more at stake to the world than Ukraine. The nations in yellow (see link below) are the nations that Russia wants to take over within the next few years:

https://en.wikipedia.org/wiki/NATO#/media/File:NATO_partnerships.svg

Russia friendly Belarus may also annex to Russia. There’s plenty to be concerned about with Russian aggression. Without NATO, there isn’t much stopping Russia from moving west of Ukraine to the borders of Italy and Germany creating a battle ground east of these nations which brings up the question of how broken U.S. politics has become to have a political leader of one of the 2 main parties that would do away with NATO if he could.

There is no defense for an anti NATO stance other than wilful ignorance of foreign policy and defense of a political brand at any cost including the full support of a compromised president to a foreign power, especially an autocrat like Putin.

Let’s remind, Putin is likely the most successful thief/autocrat in the world. His involvement with family members being caught in a money launder scheme with Deutche Bank of near $ 2 billion over 10 years tells readers all they need to know about his character as a Russian, politician and person. He’s likely the world’s most successful thief in the world and a real life villain exercising a ruthless control of power with demonstrated plundering of his nations assets for his own self gain.

Will the U.S. market be adversely effected by a war in Ukraine? One would think so, but maybe not that much. Its not in this continent, doesn’t involve the U.S. directly and money media can spin it strengthening the U.S. dollar keeping rates low and war profiteering as a net benefit etc., but ultimately war/conflict creates a poverty effect. A weaker, more destabilized Europe is not in North America’s best interest or ever will be.

#121 Shawn Allen on 12.13.21 at 3:07 pm

The bank of Canada has an excellent page that shows its current balance sheet.

But what is really excellent is the ability to see a graph of each component gong back in history. Click the “radio buttons” to add or remove lines from the chart.

https://www.bankofcanada.ca/rates/banking-and-financial-statistics/bank-of-canada-assets-and-liabilities-weekly-formerly-b2/

#122 crowdedelevatorfartz on 12.13.21 at 3:08 pm

@#90 yvr Lurker

“Was explaining to my 17 year old tonight (who is applying to engineering schools) about how the civil engineering field may have lots of jobs going forward with redesigning infrastructure to help mitigate the effects of these extreme events.”

+++

About 25 years ago I worked at an office building that had a large engineering firm.
One of the younger engineers ( late 20’s) was packing his personal stuff in boxes out to his car one day.
I asked if he was laid off.
“Nope, going back to University in Norway to upgrade my degree to Environmental engineering”.

All the other old time civil engineers though he was nuts.
Came back two years later with his new degree.
Same company, almost twice the salary.
Way ahead of the curve.

#123 Millennial 1%er on 12.13.21 at 3:10 pm

Something you don’t understand garth, is that while there is an endless sea of dude bros who buy ‘bitcoin’ because ‘its real money bro’, there is a small cabal of computer science geeks who secretly own a few million dollars in monero because they bought early because they learned about ring key signature schemes in their number theory class.

#124 Do we have all the facts on 12.13.21 at 3:17 pm

#114 Shaun Allen

Fractional banking says it all.

#125 Faron on 12.13.21 at 4:13 pm

Wow, some serious rug-pulls happening in equities today.

Someone’s taking out the trash.

#126 R on 12.13.21 at 4:24 pm

119 Don:
The IMF found the production and burning of coal, oil and gas was subsidised by $5.9tn in 2020, with not a single country pricing all its fuels sufficiently to reflect their full supply and environmental costs. … Explicit subsidies that cut fuel prices accounted for 8% of the total and tax breaks another 6%.Oct 6, 2021
https://www.theguardian.com › oct
Think of the world eventually running on sunshine 24/7 , then think of your grandchildren’s life if it doesn’t. We didn’t inherit the past, we borrow from the future. We can do better.

#127 willworkforpickles on 12.13.21 at 8:56 pm

How long can the Fed (or even the BoC) go on lying about inflation to keep interest rates down.

Can the Fed excuse the reality of real inflationary causes much longer with secondary (even bogus) transitory inflation reasoning, citing supply shortages to cover for endless government spending/new debt creation in itself being the real and actual primary cause of it.

When food riots break out in the streets…not as a result of empty shelves as much as the high cost of food, then we’ll be that much closer to the answer for… how much longer.

After many of the bottlenecks are cleared and rampant rising inflation persists, which is basically here to stay… supply shortages will be a tough call to make in subbing for irresponsible monetary policies.

Big food shortages aside (still a few years off) will be here eventually anyway.

When endless new money created out of the blue to pay the interest on the interest of government debt reaches its breaking point and foreign bond holders of that debt lose faith in the US dollar as its being driven into the ground by real inflation…they stop purchasing t bonds is when interest rates will start to climb.

Those rate increases will affect Canadian interest rates down the road too.

The steel toe of the ravenous franken-monster pieced together by mindless debt policy will arrive at the front door sooner than most expect… kicking at it.
One good boot and its off the hinges and the horror show begins in a blood fest with the vulnerable getting ripped to pieces.

#128 Chris Campbell on 12.14.21 at 5:11 am

Anyone know how good NEI Investments are as a “have your cake and eat it” option for someone trying to balance returns with being socially responsible? (https://www.neiinvestments.com/)

Any advice appreciated…