That apocalypse

“Call me Ishmael,” he says, since being a civil servant in Ottawa these days makes paranoia a virtue.

So, Ish and his squeeze want change. They bought an upscale property in a New Brunswick city, where sub-$400k still means you live a good life. They’re transitioning jobs and futures eastward, looking forward to better days for them and the dogs.

But there’s a niggle. Actually, with recent events, it’s turned worse. A dark cloud.

“You’ve repeatedly assured us that 2008 isn’t going to happen again,” he says. “And if it does, big deal, we know how to handle it. I didn’t blink in March 2020. But, should I be worried about 1982 happening again? And what is my best strategy for dealing with this unlikely but non-zero possibility?”

Specifically, this fiftysomething couple are obsessing about what now appears to be endless and worsening inflation, leading to central bank tightening and a dramatic increase in the cost of money – and their mortgage.

“What really keeps me up at night is inflation, or more properly the hike in interest rates needed to tame it. The spectre of 20% interest rates a la Volcker 1982 would be apocalyptic; obviously lots of people would be wiped out, given their million-dollar mortgages. But even on our (by-2026) $290k-ish mortgage, that would be almost $60k a year in interest alone when we renew. This terrifies me.”

The first thing to remember is that this is not 1982. At that time inflation in Canada was 12.5%. The Bank of Canada rate rose to 13.96%. In the summer of ‘82, five-year mortgages were 19.2%. Several of the major banks stopped lending long-term money. I was the daily business columnist and editor of a large urban newspaper at the time, with a front-row seat to the carnage being caused as readers were mowed down and houses seized. That summer I lost my mind, organized a protest on Parliament Hill and succeeded in convincing the Trudeau government (the first one) to declare a moratorium on bank mortgage foreclosures.

What’s different?

Yes, inflation today is half what it was then. And household debt in 2022 bears no relation to where it sat forty years ago. The average house in Toronto sold for $95,496. A mortgage of $100,000 was a rare and scary thing as Canada slipped into a recession in 1982, hammered by central banks determined to squish the runaway cost of living. It worked.

In short, a central bank rate north of 5%, or double-digit consumer loan and mortgage costs are no longer feasible without economic devastation. We owe $1.73 trillion in home loans alone. Plus hundreds of billions more in home equity lines of credit. All those HELOCs have floating rates, rising each time the chartered bank prime swells. And 37% of all outstanding mortgages come up for renewal within 24 months. Already the savings rate has plunged and incomes are increasing far less than the CPI. The conclusion is, clearly, that a 1982-rerun is not in the cards.

Having said that, rates do not need to hit 20% to wreak havoc. Not with this epic level of debt in the land. A CB rate of 3.5%, chartered bank prime at 5.7% and five-year mortgages at 7% would have a similar effect. And there is perhaps a seven-in-ten chance we’ll get there.

This brings us to the question of why.

Unlike what Pepe is busy telling scared little beavs, inflation is not the fault of the central bank. It did not cause it. It did not ‘print’ $400 billion and hand it to Justin to spend on CERB. Nor is inflation a Canadian thing. Look at current rates in other countries:

US 8.1%
UK 9.0%
Euro 7%
Russia 17.8%
Germany 7.8%
Poland 12.4%
Australia 5.1%
Canada 6.8%

 

Was Tiff Macklem responsible for a global trend? Nah. Think deeper. We’re in a post-pandemic world where consumer spending and demand have exploded. Look at Toronto’s jammed airport chaos, or the fact you can’t find a car rental in Canada these days. Travel has exploded. So have audiences at concerts, parks and pro sports. Now consider energy. During Covid oil prices collapsed as lockdowns depressed demand. Now crude is consistently over $100 a barrel, helped along by the insane war in Ukraine. And the supply chain’s a big deal. Factories shut during Covid and are now overwhelmed. Demand exceeds supply. Prices rise sharply. A chip shortage means fewer new cars are built, so used car prices explode. That’s inflation. And fuel charges are goosing food costs, while full employment is now feeding strikes, labour discord and a wage-price spiral.

This is not the CB’s doing. Yes, government spending has been extreme and our national debt has erupted, putting pressure on bond yields. But that is fiscal stimulus adding to inflation. Monetary stimulus – which the Bank of Canada’s responsible for – is being seriously and quickly reduced. Interest rates are rising. Bonds are being sold and matured. Lots more to come. When the world needed help to survive a pandemic, CBs gave it. Now they taketh away.

So, Ishy, there’s reason to expect your mortgage rate will be higher upon renewal. But it will not be 20%. Or even 10%. And the value of your house – even in cheapo NB – may drop as the cost of money rises. And, yup, we could well go through a few quarters of negative growth. So factor it all in. Save a lot and pay down the principal upon renewal. Get a weekly-pay mortgage to shorten the amortization and reduce the debt faster. Maintain your B&D portfolio and use gains in a few years (they’re coming) to reduce the outstanding obligation.

But understand CBs will not tolerate double-digit inflation. Nor did they create this evil.

About the picture: “Here’s a photo of my dog Shenzie,” writes Brody. “I didn’t name her but kept the original name on her collar. With the high rent here on Vancouver Island,  she was left in the basement of a vacant house for 2 days alone. My brother-in-law was moving in to rent the new place and found they had left all their stuff and a dog in the basement. My wife said we would “foster her” and before you know it she is now a part of the family.”

126 comments ↓

#1 Apocalypse NOW on 05.22.22 at 11:58 am

Yes, it is still coming. This is only a brief illusionary pause before the full horror.

PREPARE

Is this Apocalypse2015 revisiting? – Garth

#2 Flop… on 05.22.22 at 12:05 pm

“Where do we go” asks Rhino.

Where do we go now, was a line made famous in the 1987 Guns N Roses hit Sweet Child O’ Mine.

Apparently they didn’t know how they wanted to finish the song and ask themselves “Where do we go, where do we go now?”

This is where things get juicy.

Not many people know that Sweet Child O’ Mine is a rip-off.

I guess you’ll want evidence after such a strong accusation?

There are not many things in this world that can’t be explained by a bit of Oz Rock.

In 1981, 6 years before Guns N’ Roses supposedly penned their biggest hit an Australian band named Australian Crawl wrote a song called ‘Unpublished Critics’

Like a lot of Australian bands at that time, they tried to get into the American market, after establishing themselves back home, but ultimately failed.

I don’t think they ever sued for plagiarism, so anyone on here looking for a quick buck is welcome to join to class action lawsuit, I am about to launch, partly for causing childhood trauma.

I’m ready to proceed, but will have to ask my Washed Up Lawyer “Where do we go now?”…

M47BC

https://www.youtube.com/watch?v=YA2P-0D2yds

#3 crowdedelevatorfartz on 05.22.22 at 12:14 pm

Great explanation Garth.
Unfortunately, the great unwashed have the attention span of fruit flies over a bowl of ripening cherries.

The common sense reason you have given for inflation and it’s consequences are lost in the shouts of the torch and pitchfork mob.
Sadly
“Mr. I’m going to fire the Bank of Canada leadership if I’m elected” pepe poilievre is counting on that.

#4 Flop… on 05.22.22 at 12:19 pm

Narcity highlighted how you can get this farm with extensive land and riverfront near Bella Coola is cheaper than a Vancouver condo.

The 500 Blueberry bushes would supply a steady supply for my Icecream adventures.

Mrs Flop pointed out it would be too far to drive to Walmart in the States to get my 2XL undies….

M47BC

https://www.narcity.com/vancouver/massive-farm-for-sale-in-bc-is-cheaper-than-the-average-condo-in-metro-vancouver

#5 My Body My Choice on 05.22.22 at 12:25 pm

Yes Garth, I remember reading your business columns in the Toronto Sun so many decades ago. As a fairly naive young man in the 1980’s I learned a lot from your columns. Thank-you!

Problem is, I endured many years of reckless mismanagement of the government finances and Canadian economy by Trudeau 1.0.
When he finally resigned, I, like many other Canadians gave a collective sigh of relief.

So Trudeau 2.0 is like a bad remake of a bad movie. Six years and there doesn’t appear to be anyway to get him to retire.

#6 Toronto on 05.22.22 at 12:26 pm

Pierre Poilievre is now using veiled anti-Semitism in his campaign trial.

He accuses the “Bay Streeters” and the media of being owned by a secret cabal who become rich during the pandemic.

#7 The Regulator on 05.22.22 at 12:37 pm

# 1 – Apocalypse Now : Preparing for unseen black swan events is sound advice. But unfortunately, large swaths of peoplekind are expecting the gubmint to come to their rescue if such events occur. Personal responsibility and common sense are quaint theories to people today. But these same people will seek out something or someone to blame for their own failures. Keep your head down.

#8 My Body My Choice on 05.22.22 at 12:37 pm

“The trouble you’re expecting never happens; it’s always something that sneaks up the other way.”

“The people who live in any generation do much, he realized, either to create or to solve the problems for the people who come in the generations later.”

“History was an artist, maintaining the idea but changing the details, like a composer keeping the same theme but dulling it to a minor or lifting by an octave, now crooning it with violins, now blaring it on trumpets.”

― George R. Stewart, Earth Abides, 1949

#9 Ustabe on 05.22.22 at 12:41 pm

#114 IHCTD9 on 05.22.22 at 11:01 am

#84 Ustabe on 05.21.22 at 6:40 pm

Today’s haul was 7 pounds ———-

What do you do to preserve that many mushrooms? Can you freeze them?

Morels are very wrinkly on the caps so you have to be very careful if you are preserving them. More careful than I am consistently capable of. Poisoning from badly preserved wild mushrooms is rare but it is real. So we eat large amounts, don’t go out daily, spread the wealth among the neighbours, etc.

But yes, you can freeze them. First you semi-dry them, hung on fishing line or dental floss for a couple of days to dry up a bit then into jars, not zip lock bags.

You can dehydrate them if you have a proper dehydrator. (hint: if your dehydrator uses heat in any form it is not a dehydrator in my world) When you want to use them re-hydrate in milk, not water and use as normal from there.

#10 What the &$!? Garth? on 05.22.22 at 12:47 pm

Needed an intense title to get your attention.

Thank you for the free financial advice for the past decade plus.
Thank you for also making me sane in trying times; you have made me see things rationally and logically (not just financially but also politically and humanely).

My children are also grateful (well they will be when they’re old enough to understand) for their education fund!

Many many many thanks-

I owe you much, Sir!

Thanks!!!!!!!

#11 RJ on 05.22.22 at 12:51 pm

It looks like since the 70s, CB rates have basically had to reach the peak inflation rate (sometimes lagging it alot) in order to knock it back down. I’m no expert, just looking at historical charts.. Every situation is unique, but if that’s the case aren’t rate expectations of only 1-2% more being overly optimistic in the news? As you said Garth, 7/10 odds being even higher. U.S is 8.1 and no immediate end in sight? Nevermind reducing, just plateauing. Don’t even get me started on household income to house price ratios and the need for prices to fall off a cliff, or go down a long hill..

#12 My Body My Choice on 05.22.22 at 12:52 pm

#6 Toronto “Pierre Poilievre is now using veiled anti-Semitism in his campaign trial.”

Did you pick that up on CBC or did you come up with it yourself?

Poilievre Derangement Syndrome is taking hold across the nation.

#13 Quintilian on 05.22.22 at 12:54 pm

Just a bit too quick to absolve the CB’s Garth.

They have acquiesced and genuflected to please the politicians and abdicated their responsibilities.

GDP growth was augmented to a great degree by facilitating the extreme accumulation of personal debt.

Yes, the low bank rates, and chain reaction it produces, were needed when the pandemic hit, but the base should have been much higher as they had many years to normalize the rates since 2008.

#14 Søren Angst on 05.22.22 at 1:12 pm

In the Government of Canada Bond Purchase Program (GBPP)—announced on March 27, 2020—the Bank committed to:

– purchase at least $5 billion of GoC bonds PER WEEK in the secondary market
– continue the program until the economic recovery is WELL UNDERWAY *

Ended Apr. 13, 2022.

And what’s $418 billion between us girls (BoC, GoC)?

No, the BoC completely innocent of GOOSING the economy after Apr. 13, 2022.

When it started:
https://www.bankofcanada.ca/2021/10/staff-analytical-note-2021-23/#:~:text=In%20the%20Government%20of%20Canada%20Bond%20Purchase%20Program%20(GBPP)%E2%80%94,economic%20recovery%20is%20well%20underway

When it ended:
https://www.bankofcanada.ca/2022/04/bank-of-canada-provides-operational-details-for-quantitative-tightening-and-announces-that-it-will-continue-to-implement-monetary-policy-using-a-floor-system/

BoC Balance Sheet, PLEASE note the happy chart AND N.B. the Apr. 27, 2022 number under the chart in the table, row called:

Government of Canada Bonds

Balance Sheet:

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

* Apparently, the “WELL UNDERWAY” was in April of 2022.

—————–

Miscreants. Fueled inflation. ASLEEP AT THE WHEEL 1 year after it was clear “WELL UNDERWAY” had started.

Oh. Look. “WELL UNDERWAY” was in mid-2021…

https://tradingeconomics.com/canada/monthly-gdp-mom#:~:text=Canada%20GDP%20Set%20to%20Expand,tenth%20consecutive%20month%20of%20growth.

With CB stimulus the economy of Canada (and America, and all of Europe) would have been depressionary, not just in a recession. – Garth

#15 Shawn on 05.22.22 at 1:14 pm

What’s this “we” owe?

We owe $1.73 trillion in home loans alone. Plus hundreds of billions more in home equity lines of credit.

*************************************
Not me, I owe zip. Don’t include me in this “we”.

Travel is exploding? Okay and VISA Inc. is trading just under $200 down from a $250 peak. Still not cheap at 28 times forward earnings. But a reasonable long term bet for those that enjoy the spills and thrills of individual stocks.

Every dollar of inflation adds to VISA’s revenues and mostly hits its bottom line since it does not have that much staff expense to pay most of its costs are fixed in nature. Just think how much VISA Inc. is benefiting from $2.00 gasoline. Without lifting a finger. Computers whir and money flows to VISA Inc. Think of the sound of that. It’s like a joyous sympathy if you own VISA Inc. shares.

Bank of Canada Balance Sheet? The assets are still vastly higher than 2019 but look at the reductions in the past few weeks. That balance sheet is shrinking fast. It’s down $30 billion this year. It’s down over $100 billion since the peak which was March last year. In some circles, that’s considered a lot of money. “Credit” where credit is due?

#16 Søren Angst on 05.22.22 at 1:22 pm

#3 crowdedelevatorfartz

You may want to read my last Comment about sweet innocent BoC.

Please peruse the BoC Balance Sheet. I mean, what’s almost HALF A TRILLION DOLLARS in about A YEAR right?

Chump change. That’s not going to goose the economy and inflation, right?

You know, considering GDP is $1.7 trillion, near HALF A TRILLION isn’t going to anything to it, right?

$5 BILLION PER WEEK. Peanuts.

—————-

– Pitch Fork Dude + Off with their heads (for that je ne sais quoi).

#17 Mark Rypen on 05.22.22 at 1:27 pm

So, oil prices are a major cause, but the CB has little blame? For someone who rattles know about being aware of the past, you seem to gloss over the fact that oil prices were well north of $100 during three separate periods this century (ie. 2000 onwards), and yet somehow, inflation wasn’t rampant. Pierre may be oversimplifying for the general electorate, but he’s certainly correct than an over abundance of dollars printed by CBs is the major driving factor. And given the fact that our CB (and others) all failed to see this coming and insisted that inflation was just transitory speaks to their incompetence and/or malfeasance.

Oil is a contributory side show. Post-Covid demand is more significant (as clearly stated). The CB did not create inflation and Pepe is smearing an institution which saved Canada’s rear end during the pandemic. He knows it. And he knows some folks are too dumb to think it through. That makes for a dangerous man. Like Trump. – Garth

#18 Søren Angst on 05.22.22 at 1:41 pm

You may not like Larry Summers but he nailed it back in Feb. 2021, inflation concern.

https://www.washingtonpost.com/opinions/2021/02/04/larry-summers-biden-covid-stimulus/

Basically, and I agree, he said this:

We should have done more in 2008, but we did too much in 2021.

https://finance.yahoo.com/news/larry-summers-inflation-whats-next-120032808.html

Just look at the World CBs stimulus:

https://www.statista.com/statistics/1107572/covid-19-value-g20-stimulus-packages-share-gdp/

And that’s as of MAY 2021. BoC still buying GoC bonds then.

—————-

You know, the World’s CBs they’re innocent in all this fueling of inflation with boat loads of stimulus + historically low rates.

To quote that intellectual luminary of past times (1995), Cher Horowitz from Clueless (like the CBs), the CBs are innocent:

As if.

#19 DON on 05.22.22 at 1:45 pm

#6 Toronto on 05.22.22 at 12:26 pm
Pierre Poilievre is now using veiled anti-Semitism in his campaign trial.

He accuses the “Bay Streeters” and the media of being owned by a secret cabal who become rich during the pandemic.

*********
Playing the central bank are the enemies theme is mild compared to this latest bit. The way he does it makes any reasonable person cringe and run back into Trudeau’s arms for another round.

#20 Shawn on 05.22.22 at 1:46 pm

I forgot to give the link to the Bank of Canada balance sheet.

It’s a fantastic interactive page where you can chart every line item on the Bank of Canada balance sheet.

Think of the hours you can while away.

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

#21 Bk on 05.22.22 at 1:51 pm

Yikes, two years for gains…

#22 IHCTD9 on 05.22.22 at 1:58 pm

#9 Ustabe on 05.22.22 at 12:41 pm
#114 IHCTD9 on 05.22.22 at 11:01 am

#84 Ustabe on 05.21.22 at 6:40 pm

Today’s haul was 7 pounds
———-

What do you do to preserve that many mushrooms? Can you freeze them?

——-

….So we eat large amounts, don’t go out daily, spread the wealth among the neighbours, etc.

———-

That’s what I was figuring. Same thing with tomato, apple and cucumber bumper crops locally, – spread the wealth. I love mushrooms, but they don’t last long in the fridge. A guy at work forages for giant puffballs, he must eat some of it every day. It’s 20-30 lb mushroom! Either that, or he makes a lot of spaghetti sauce.

#23 fishman on 05.22.22 at 2:05 pm

During Covid Russia’s GDP fell far less than Norad. Its GDP was around 33% consumer & service while the wests is around 70%. Canada didn’t do too bad because we like Russia, are a “primary resource” exporting country. Now their 10% ahead of us in inflation. Remember our buck is “pegged”, so far thankfully, to the $U.S. And the ruble is actually rising to the $U.S. Its not monetary policy like in Soviet days. The Kremlin just acknowledged that their traditional logistics lines are all but destroyed. Their inflation is caused by by the extra costs involved opening up,substituting,whatever to get what you need for the job.
Same thing here. Buy it, fly it, or make it. Make payroll. Pass on the cost or lay everybody off & go fishing.

#24 THE DANDADA on 05.22.22 at 2:05 pm

ANON — 11/30/2021

>> FED starts fighting inflation (ie. tapering, rate spike, etc)
>> deflationary event leads to liquidity crisis (most assets collapse)
>> people flee to real safety ($)
>> worst financial crisis as everyone and their mother are invested b*lls deep in everything
>> smart money and banks buy the blood after successfully brainwashing everyone that cash is trash

question is not if, but when.

We are close to stage 3 being official.

1. no inflation
2. inflation just transitory
3. inflation is permanent because covid, but nothing we can do about it
4. oopsy

#25 Concerned Citizen on 05.22.22 at 2:08 pm

“The first thing to remember is that this is not 1982. At that time inflation in Canada was 12.5%.”

I’ve made this point several times in comments here, and I’ll make it again. Comparing today’s CPI with the 80’s CPI is comparing apples to oranges due to changes in methodology. If we were using the 80’s methodology today, inflation would be ~15%, which I would say is what most people are feeling in the real world. So yes, inflation is at least as bad today as it was in 1982, if not considerably worse.

“The Bank of Canada rate rose to 13.96%. In the summer of ‘82, five-year mortgages were 19.2%.”

As well they should have been. That’s when we had a central bank that cared about price stability. Today we have high inflation and highly negative real rates, which is devastating all around.

“In short, a central bank rate north of 5%, or double-digit consumer loan and mortgage costs are no longer feasible without economic devastation.”

And the reason we have this amount of debt is because central banks have kept rates ridiculously low for over a decade now. And where is it written in the bank’s mandate that it should care about price stability, except in cases where that would hurt rich people’s asset portfolios? I must have missed that part. Central banks the world have failed society spectacularly, so that the wealthy can succeed spectacularly.

We live in a truly sick society. People that save and live within their means can’t afford a home and – increasingly – food on their table. All so that wealthy speculators – people that are way over their heads in debt because central banks keep bailing them out – can keep speculating and get wealthier.

How about we have an economy that values work, productivity, fiscal prudence, and positive real interest rates. Oh who am I kidding, let’s get real interest rates to negative 10% and flip crack shacks to each other for $10M – that sounds like the better plan.

#26 DON on 05.22.22 at 2:14 pm

#13 Quintilian on 05.22.22 at 12:54 pm

Yes, the low bank rates, and chain reaction it produces, were needed when the pandemic hit, but the base should have been much higher as they had many years to normalize the rates since 2008.

@@@@@@

Bank rates have been low for two many years enabling the excessive purchases caused by human nature and various vices to respond accordingly and leave ‘us’ in this FUBAR.

So in the end responsible adults took on the debt levels (lacking substantial income gains) did this to themselves. In this case they are trying not to rip the bandaid off…but the longer the wounds festers they might have to do so. The real question is how long the indebted (in all types of situations) can tread water waiting for things to return to once manageable levels. ‘Get another job says the UK Minister’.

Not rocket science as you know, just human nature and emotions. Watch the every day people for signs of the times. They are the economy.

New reports of Amazon and Walmart having too many employees. Online sales for Amazon slowing as people go outside.

On a side note: Went bowling the other night. The bowling ball holes were all greasy inside. It was an enlightening experience in human nature returning yet changing by adjustment. I got over it but made sure I didn’t touch anything and washed my hands before eating and before leaving.

#27 Damifino on 05.22.22 at 2:16 pm

#5 My Body My Choice

So Trudeau 2.0 is like a bad remake of a bad movie. Six years and there doesn’t appear to be anyway to get him to retire.
——————————

Precisely. These days, I lay the blame squarely at the feet of the eminently vacuous Mr. Singh.

He’s never had it so good and I suppose one can’t blame him for holding on as long as possible, since the next stop is total obscurity.

#28 Joseph R. on 05.22.22 at 2:17 pm

Toronto on 05.22.22 at 12:26 pm
Pierre Poilievre is now using veiled anti-Semitism in his campaign trial.

He accuses the “Bay Streeters” and the media of being owned by a secret cabal who become rich during the pandemic.”

—————————————

He has his team of researchers and focus groups to help him reach and trigger his targeted audience.

#29 DON on 05.22.22 at 2:17 pm

Garth

I sense you will need to keep this blog post on cut and paste. Play it again Garth…play it again.

#30 Meh on 05.22.22 at 2:31 pm

Canadian inflation 6.8 percent.

The leafs are also still in the playoffs.

#31 Dave Niagara on 05.22.22 at 2:33 pm

You jumped the shark Garth. Our inflation rate is way higher than the stated 6.8% and will only get worse. Trudeau and the bank of Canada are responsible for this mess. The banks mandate is to control inflation not deal with climate change and racial equity, yet they’re they are in the papers with Tiff leading the charge. To say there is no money printing to spend on Trudeau’s pet projects is a complete falsehood. Also calling other politicians names like Pepe doesn’t help your argument.

Wrong on all counts. Keep those blinders on. Makes life simple. – Garth

#32 REG Sherrian on 05.22.22 at 2:35 pm

Harry Dent says a 86% Market Crash is coming because of demographics. Garth, how can we overcome our demographics to survive this 2008ish market action?

Harry Dent’s best-before date was 1992. – Garth

#33 Tiff is the second coming on 05.22.22 at 2:40 pm

And Poloz was God.looooool

Give us a break, we are sharpening the pitchforks and lighting the torches..

Sheesh, stop posting stupid things. How is the inflation for CHF , young apprentice of Garth

#34 Joe Lalonde on 05.22.22 at 2:47 pm

How can any of the future factors be good for this globalization economy?
https://www.rt.com/business/555713-global-debt-record-high/

Expecting China to come back deliver products to the United States and Canada by ocean shipping is far too costly currently as fossil fuel costs have exploded exceedingly higher.
That’s the problem some United States is experiencing as well with the trucking industry.
By rail, many products is being confiscated by gangs of thieves going through their neighborhoods.

#35 ElGatoNeroYVR on 05.22.22 at 3:19 pm

Why panic on this beautiful Sunny Sunday ?
Since TN hasnˋt posted in a while let’s follow in the conspiracy theory spirit:
1) All home owners with properties assesed over 500K will be declared “the rich” and an extra tax will be applied – national wealth sharing tax
2) Those that can’t pay (new tax plus mortgage) will be given the option to have their properties nationalized and they can rent their current accomodation from the government at market rates
3) New Canada Wealth Bonds will be issued to pay for the above and everyone will have to hold them in their registered accounts plus a miniumum percentage in non-registered accounts.
4) probate tax will be increased to 25% to ensure equal redistribution to the less fortunate
5) progresively a maximum sqft allowance per family head will be implemented ,start high (say 500 sqft 3 person) then reduced to meet the UN smart city guidelines.

Think it can’t happen again (it did when communists took over after WW2) ?
“We shall see said the blind man to the deaf one” .
Happy Victoria Day ,and a kind reminder that the land in Canada is owned by the Crown and can be switched overnight to a 99 years lease ,like in our friendly neighbour from across the Pacific ,the Middle Kingdom which our current leader so oh so greatly admires.

Disclaimer: Inspired by the Nomad Capitalist YT videos and applying the worse case scenario.

#36 What Could Go Worse? on 05.22.22 at 3:20 pm

With many Canadian banks giving results this week, we all know their profits will be fine, probably will be a beat.

I am however interested to see what the provisions (recognising a loss on the loan ahead of time) will be.

#37 Tony on 05.22.22 at 3:28 pm

Moral of the story is don’t give free money to anyone especially all the people who did everything wrong. How are these people going to learn if you try to patch over all their mistakes with free money? I got no stimulus money because I did everything right.

#38 Jim on 05.22.22 at 3:29 pm

So you’re saying the CB isn’t responsible for inflating real estate prices by creating a trillion dollars worth of loans by low interest rates?

You did that. – Garth

#39 baloney Sandwitch on 05.22.22 at 3:46 pm

Every time you go to grocery store or the pump you get a shock. With the crazy Russian and kung flu still loose it ain’t over yet. Plus the recession is almost at the door. There will be an epic battle between Recession and Inflation reminiscent of the legendary battle of King Kong and Godzilla. I forget who won. They keep on making sequels.

#40 T Rex and the dinosaur clique on 05.22.22 at 3:48 pm

RE:

“That summer I lost my mind, organized a protest on Parliament Hill and succeeded in convincing the Trudeau government (the first one) to declare a moratorium on bank mortgage foreclosures.

What’s different?”

What’s different? If you did that today, your bank accounts would be frozen, you would be arrested and held as a political prisoner and you would be sued by a bunch of left wing groups for disrupting life in the Capital.

A lot is different today. Back when you were organizing protests, people still had human rights……

Stupid comment. People are entirely free to protest, but not to occupy a city, set up encampments in a downtown, defy police orders and inconvenience the populace. Please go away. I am tired of you and will give your mindless ravings no more space on this blog. – Garth

#41 Russ on 05.22.22 at 3:57 pm

Flop… on 05.22.22 at 10:42 am

“Where do we go” asks Rhino.

Where do we go now, was a line made famous in the 1987 Guns N Roses hit Sweet Child O’ Mine.

Apparently they didn’t know how they wanted to finish the song and ask themselves “Where do we go, where do we go now?”

This is where things get juicy.
Not many people know that Sweet Child O’ Mine is a rip-off.
I guess you’ll want evidence after such a strong accusation?
There are not many things in this world that can’t be explained by a bit of Oz Rock.
In 1981, 6 years before Guns N’ Roses supposedly penned their biggest hit an Australian band named Australian Crawl wrote a song called ‘Unpublished Critics’

I don’t think they ever sued for plagiarism, so anyone on here looking for a quick buck is welcome to join to class action lawsuit, I am about to launch, partly for causing childhood trauma.

I’m ready to proceed, but will have to ask my Washed Up Lawyer “Where do we go now?”…

M47BC

https://www.youtube.com/watch?v=YA2P-0D2yds
========================================
Hey Flop, (from the yesterday file)

Good luck on the CAS but it has been established a long time ago that you cannot copyright a chord progression. Some group tried it with a Led Zeppelin tune and lost too.

While you research, try this one:

Sweet Child of Mine, best cover ever!

https://www.youtube.com/watch?v=Wo9Iwhb3Z8A

Cheers, Russ
(soaking up the rays at Lake Okanogan. Life seems pretty sweet alright)

#42 SW on 05.22.22 at 4:08 pm

CBs did not create inflation but have been woefully behind the curve on all of this. They have an atrocious track record in their predictions and are still underestimating inflation. Oil is likely going to be high for years and the politicians keep blaming the war but oil was $94/barrel before that started and was headed triple digits anyway. Wait until the driving season starts and China opens up. There is structural supply problems that will take years to fix. I have no idea where any of this is going and neither does anyone else on the planet so I am not discounting anything in the cards for interest rates. I hear from older people that inflation feels worse now than in the 80’s. I bet the way these stats are calculated are manipulated and probably different than then. Who knows. Wait until the masses really start to feel inflation’s bite because until now people are just complaining but not changing behaviors. CBs have huge egos and will never admit any wrong doing as yes, they did not create inflation but have completely dropped the ball to try and tame it.

How is aggressively raising interest rates are selling off balance sheet holdings, “dropping the ball”? Do you want rates back at 10%? Tell us, monetary policy smart guy. – Garth

#43 Soviet Capitalist on 05.22.22 at 4:18 pm

BoC bought billions worth of bonds and it is not responsible for inflation?! Yeah, right.

It is in fact a global trend, but that because all other central banks were doing the same.

It bought bonds to suppress bond yields in order to counter the impact of the pandemic. Keynesian 101. How else would you have dealt with 14% unemployment and an instant recession? Was it the bank’s fault a zillion Millennials stormed Bunnypatch and blew their brains competing for real estate? Sheesh. The stuff people think… – Garth

#44 Philco on 05.22.22 at 4:28 pm

FOMO
Poof down she goes in those bubble areas.
Don’t follow the crowd and ALWAYs look for value.
Cost per sq ft to build is a good place to start.

https://ca.finance.yahoo.com/news/worry-buyers-remorse-high-real-080000175.html

#45 Philco on 05.22.22 at 4:32 pm

Some good comments Garth. Funny.
I believe Mr Biden is far more dangerous than Mr T.
Id like a conversation about that these days.

#46 an investor on 05.22.22 at 4:33 pm

“Maintain your B&D portfolio and use gains in a few years (they’re coming) to reduce the outstanding obligation.”

In other words, the stock market will do nothing until Trump is back in the White House. I agree.

Dog help us. – Garth

#47 Jason on 05.22.22 at 4:34 pm

Any data driven organization, like the central banks, is by definition going to be “behind the ball.” But what else are they going to base their decision on? I’d much rather have central banks be wrong by degree (i.e. late) but based on data, than having central banks just make random guesses based on anecdotal evidence. And that pretty much goes for everything else too, not just central banks.

Also the realization has to occur at some point that basing decisions on data means that things will change as the data changes! Same thing that happened with public health policies during COVID. But if you’re not basing your decisions on data what else are you using? Astrology?

#48 SW on 05.22.22 at 4:36 pm

DELETED

#49 Emma Zaun - Greater Fool Unpaid Intern #007 on 05.22.22 at 4:38 pm

You forgot again to mention the inflation and critical shortage of baby formula, Garth.

The starving deplorables here are getting way too cranky to put up with. We need a big raise, and now.

Emma Zaun
Shop Steward

#50 Senator Bluto on 05.22.22 at 4:39 pm

My ears always prick up when I hear a politician accused of racism. It can be a well constructed but unfounded political kill shot attempt by political enemies.

My rule of thumb is that unless an unaltered video is presented as evidence I assume the purveyor is lying.

It’s amazing how many times that technique works.

#51 Quintilian on 05.22.22 at 4:39 pm

[Keynesian 101]. How else would you have dealt with 14% unemployment and an instant recession? Was it the bank’s fault a zillion Millennials stormed Bunnypatch and blew their brains competing for real estate? Sheesh. The stuff people think… – Garth

I think Keynes would have suggested a different approach, but that is another story.

As for the real estate mania… the repricing of Bunnypatch was based on what the bubble markets were at, and those markets were inflated mainly because of the Central Bank.

#52 Shawn on 05.22.22 at 4:39 pm

Jim did this!

#39 Jim on 05.22.22 at 3:29 pm

So you’re saying the CB isn’t responsible for inflating real estate prices by creating a trillion dollars worth of loans by low interest rates?

You did that. – Garth

************************************
That’s right Jim and all the other mortgage borrowers did this. They mindlessly bid up home prices.

The Moms of the land are also hugely culpable.

All ya all better hide. Blaming Trudeau and the Central Bank for your crazy home purchases is weak.

Weird how 90% of us sat this out while 10% or so of you blew your brains out on debt.

#53 Søren Angst on 05.22.22 at 4:45 pm

With CB stimulus the economy of Canada (and America, and all of Europe) would have been depressionary, not just in a recession. – Garth

———————

It was too darned much Garth. They, World CBs that matter, did not want a 2008 repeat and got carried away.

Larry Summers was correct. Not enough in 2008. Too much in 2021.

Threading the eye of a needle with a sabre.

#54 Flop… on 05.22.22 at 4:46 pm

#42 Russ on 05.22.22 at 3:57 pm
Flop… on 05.22.22 at 10:42 am
“Where do we go” asks Rhino.
Where do we go now, was a line made famous in the 1987 Guns N Roses hit Sweet Child O’ Mine.
Apparently they didn’t know how they wanted to finish the song and ask themselves “Where do we go, where do we go now?”
This is where things get juicy.
Not many people know that Sweet Child O’ Mine is a rip-off.
I guess you’ll want evidence after such a strong accusation?
There are not many things in this world that can’t be explained by a bit of Oz Rock.
In 1981, 6 years before Guns N’ Roses supposedly penned their biggest hit an Australian band named Australian Crawl wrote a song called ‘Unpublished Critics’
I don’t think they ever sued for plagiarism, so anyone on here looking for a quick buck is welcome to join to class action lawsuit, I am about to launch, partly for causing childhood trauma.
I’m ready to proceed, but will have to ask my Washed Up Lawyer “Where do we go now?”…
M47BC
https://www.youtube.com/watch?v=YA2P-0D2yds
========================================
Hey Flop, (from the yesterday file)
Good luck on the CAS but it has been established a long time ago that you cannot copyright a chord progression. Some group tried it with a Led Zeppelin tune and lost too.
While you research, try this one:
Sweet Child of Mine, best cover ever!
https://www.youtube.com/watch?v=Wo9Iwhb3Z8A
Cheers, Russ
(soaking up the rays at Lake Okanogan. Life seems pretty sweet alright)

$$$$$$$$$$$$$$$$$$$$$$$$$$

Uncle Russ, once I bring Uncle WULLY to court they don’t stand a chance.

You don’t think the vocal layout sounds similar too?

I guess that had to wedge them in there somehow.

If I think we are struggling, I will take the stand and play a 3 hour medley of Australian Rock Hits that would have been global number ones had they been released in North America.

They audience will either be mesmerized or asleep, only time will tell.

I am a peaceful man, but in Vancouver I live in fear that Brian Adams kicks down my door in the middle of the night, and questions why I felt it was necessary to declare that I did not like his music at my Citizenship hearing…

M47BC

#55 willworkforpickles on 05.22.22 at 4:49 pm

The Fed at any rate will be exposed to the masses latter this year for their inability of get rising inflation under control and why … And to save the market fallout from the masses , will do a massive about face back to monetary easing sending inflation rates spiralling into an eventual inflationary depression and subsequent collapsing dollar.
Just a fantasy? You will find out to your own detriment if you fail to take steps in advance to prepare for this version of a particularly nasty outcome next year and beyond.
My version … my take …now i will switch to silent mode.

#56 Søren Angst on 05.22.22 at 4:57 pm

Tell us, monetary policy smart guy. – Garth

THAT was good.

You could of gone for “smarty pants”, but smart guy more dignified I admit and keeping with the Blog Comments section. 😉

#57 NOSTRADAMUS on 05.22.22 at 5:04 pm

MONEY CAN’T BUY ME LOVE! ” OR, MAYBE IT CAN!
Bailouts are the root cause of the dysfunction of capitalism and the demise of free markets. Over the last decade, the rise of wealth inequality and the failure of markets to function in a “fair manner” is apparent. We can directly attribute it to their influence of Central Banks and Governments.
We talk much about the bailouts and stimulus programs related to the economic shutdown and pandemic. However, the bailouts began back in 2008 when the Federal Reserve intervened with the insolvency of Bear Stearns.
While these massive infusions kept the economy “afloat” the realization of inequities between the financial system and everyone else led to a significant increase in social unrest.
The 2008 “financial crisis” was the eventful result of allowing financial companies to take on too much leverage, debt, and risk. When interest rates rose and the economy slowed, defaults rose, leading to a tipping point where major financial institutions faced insolvency.
However, instead of allowing these financial institutions to go through the bankruptcy process, the Federal Reserve and Government, decided to spend billions of taxpayer dollars to “bailout” these institutions . Regulators felt that financial institutions were too deeply ingrained in the economy’s functioning. Or as they put it: too big to fail.
The problem now is that regulators, the Fed, and the Government believe they must avoid “recessions” at all costs.
“This is a dangerous form of denial. A growing body of research shows that constant government stimulus has been a major contributor to many of modern capitalism’s most glaring ills. Easy money fuels the rise of giant firms and, along with crisis bailouts, keeps alive heavily indebted zombie firms and households.
Not only did banks and corporations get bailed out, but so did households. To keep individuals from defaulting on debt, direct checks and moratoriums on rent and mortgage payments got implemented. The bailout of everyone was complete. Steady lads, hold the line

#58 Geoff on 05.22.22 at 5:18 pm

Something that really grinds my gears is when people’s economic views are dictated by their political views. To say that if our overnight interest rate was 3% instead of 1% (or some iteration of that) or if our QE program was smaller or non-existent, we would have avoided any meaningful degree of the current inflation is absurd. All one has to do is look around the world and see that even when countries have wildly divergent overnight interest rates or QE program sizes, the inflation rate is roughly the same. Look at Mexico (7.5% inflation but a 7% overnight rate), New Zealand (7% inflation, a 1.5% overnight rate, and a QE program as a % of GDP at half of Canada’s). Switzerland has negative interest rates (-0.75) and inflation of less than 3%. I see almost no correlation in this current environment (reasons below) between QE, overnight rates and inflation.

The majority of inflation at the moment is due to things beyond the CB’s control: commodity prices, supply chain disruption, and a consumer shift to goods versus services through the pandemic. Pierre is a smart guy and knows better but he also knows there is a captive audience for the kind of half-truths he spews.

I love the blog and read the comments (to my psychological detriment) but the only thing I would ask people on here is: “Ok, you think x is true. Provide the data or a well-reasoned argument that your belief is true.” I actually do not care who an argument came from (Justin, Pierre, Jagmeet, etc) but I do care if it backed up by reason or facts. I’m a small “c” conservative who has no love lost for our current government but I think by and large, they did (economically) the responsible thing (although there are some finer points of their stimulus I disagreed with). That is borne out in the data.

Anyways, good/bad arguments and policies come out of both major parties here so let’s not automatically discount or support an idea or policy based on who it comes from.

#59 KNOW IT ALL on 05.22.22 at 5:20 pm

“Was it the bank’s fault a zillion Millennials stormed Bunnypatch and blew their brains competing for real estate?”
________________________________

Who leant them the money to blow their brains out?
Sure let’s not blame the dope dealers.

Apparently Mom did. – Garth

#60 PeterfromCalgary on 05.22.22 at 5:33 pm

“But understand CBs will not tolerate double-digit inflation. Nor did they create this evil.”

The late great Milton Friedman disagrees.

“Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”

Keynes says phooey. – Garth

#61 ogdoad on 05.22.22 at 5:41 pm

That apocalypse!?

A few words for all you suckers out there that think belongings are better than mushi…

‘Cry Me A River’

Og

#62 Summertime on 05.22.22 at 5:44 pm

Comparing apples and oranges, over and over again.

If measured as in the 80-es the current inflation is higher than in the 80-es.

If we apply the same strategy as in the 80-es the rates should be higher, i.e. 15 %+, 20 % +

We are talking about 2-3 % peak rates now in this cycle, which will not even dent inflation but further accelerate it.

So the inflation will not be dealt it, at least until it gets to 150-200 % cumulative inflation with rates barely moving above 2 %. It is highly likely that we will experience at least 150-200 % cumulative inflation in the next 4-5 years that will ‘make debt more manageable’

I would stay all in in inflation protected assets for that time.

#63 Summertime on 05.22.22 at 5:47 pm

Keynes says phooey. – Garth

Sorry, real inflation proves Freedman correct.

400 + PHD’s at the fed were wrong. again.

#64 I am Proud to be Jewish on 05.22.22 at 5:50 pm

If PP is using dog whistles to gain more votes from the Far Right, then he is doing a fine job appealing to his voter base: The Far Right.

Threatening to fire the central bankers is somewhat close to antisemitic libel.

Blaming the “Bay Streeters” for the economic woes of Canada does seem to mirror the rantings of a moustached man in Germany who wrote a book in the 1920s.

#65 Summertime on 05.22.22 at 5:52 pm

People who believe that real inflation in Canada is 6.8 % need some serious professional mental help.

#26 Concerned Citizen on 05.22.22 at 2:08 pm got it right.

Do we really believe we can fix things with half truths and outright lies?

You should know. – Garth

#66 Summertime on 05.22.22 at 5:55 pm

It bought bonds to suppress bond yields in order to counter the impact of the pandemic. Keynesian 101. How else would you have dealt with 14% unemployment and an instant recession? Was it the bank’s fault a zillion Millennials stormed Bunnypatch and blew their brains competing for real estate? Sheesh. The stuff people think… – Garth

—————————

Use real reserves and borrow from savings at market rates.
Economy 101, 1st grade of university.
Talking about meager 15 % of GDP.

Oops, CB has no reserves and there are no savings … as CB destroyed it with zero rates policies for far too long.

Bank of Canada reserves here. Currently $105 billion US. – Garth

#67 Quintilian on 05.22.22 at 6:10 pm

This is disappointing; I expected better reasoning behind the BOC defense.

Seems to me the argument in favour of the BOC is much like the Retrumplicans’, and National Rifle Association’s facile argument that guns don’t kill people, people kill people.

Central Bankers for whatever reason, kept rates too low for too long. PERIOD

It’s not a defense, but an explanation for those who have no idea what the central does or attempts to do – regulate the economy – which is constantly changing and subject to unforeseen shocks (Covid, war, $115 oil). Rates must rise gently, gradually and at the right moment, lest the impact on consumer behaviour is too consequential. Look at what’s transpired to real estate with just the first two of six or eight tightenings. When inflation is a global issue there is no quick local fix. How hard is that to grasp? — Garth

#68 TurnerNation on 05.22.22 at 6:14 pm

Subprime Slime, again?

More Subprime Borrowers Are Missing Loan Payments (wsj.com)
Consumers with low credit scores are falling behind on payments for car loans, personal loans and credit cards, a sign that the healthiest consumer lending environment on record in the U.S. is coming to an end.
The share of subprime credit cards and personal loans that are at least 60 days late is rising faster than normal, according to credit-reporting firm Equifax Inc. In March, those delinquencies rose month over month for the eighth time in a row, nearing their prepandemic levels.


— Life in Kanada. What timing. I bet we will be Back to Normal in Two Weeks time tho?

https://ottawasun.com/news/national/monkeypox-poses-low-risk-to-canada-public-health-agency-investigating-about-20-cases/wcm/f530828b-a273-4709-ab8b-67a8263538be
“Public Services and Procurement Canada put out a tender last month to purchase 500,000 doses of the Imvamune smallpox vaccine on behalf of the Public Health Agency of Canada from 2023 to 2028.”

#69 Km on 05.22.22 at 6:30 pm

This is part of the problem all along, keep rates lower to stop the over leveraged from causing an economic shock. How about we stop protecting all those who have blown up this bubble with their over spending. Enough is enough ready, suck blow suck blow.

In a difficult recession with unemployment rising, you may think otherwise. The goal of CBs is a soft landing. It is the correct one. – Garth

#70 earthboundmisfit on 05.22.22 at 7:20 pm

“Also calling other politicians names like Pepe doesn’t help your argument”.

Skippy PP is a whack job, like the mindless malcontents of the trucker tantrum. Whack jobs are fair game.

#71 Tom from Mississauga on 05.22.22 at 7:23 pm

China’s 3rd largest port Tianjin ready’s lockdown, timeless blame the foreigner’s food packaging with Omicron on it. CCP has made China uninvestible, at least till they import 3B MRNA.
https://www.globaltimes.cn/page/202205/1265807.shtml

#72 Philco on 05.22.22 at 7:27 pm

Alot of stupid ignorant comments here.
People who buried themselves in debt buying overpriced assets is their own fault.
I turned 1 mil in to 15 mil plus and got my debt to zero at the same time in 6 years..My stuff solid as hell and its going higher the next few years. Im no economist self taught. Biggest thing is avoid the herd, recognize long trends and what people will need.
The school of hard knocks is a bitch.
Listening to bubble tv and realtor is a bad choice.
I don’t like T2 at all but he is not to blame…I wish lol.
Now dum dums are firguring out that cant afford that big ass house, RV, trips and christmas presents.
Ive had many come to me for biz advice and ya know what they do?
Nothing it goes in one ear and out the other. They dont learn from their dumbo mistakes and cant change their behavior.
And i thought I wouldnt make it through grade 12 cause i hated school. BUT i aced math and trades. Engish and other crap not needed. You can tell be my spelling some days. I gotta work one that.
We need trades people!

#73 Nora Lenderby on 05.22.22 at 7:29 pm

#43 & #50 SW
If someone is going to take my 2 letters, and talk dirty, I’d better resume my old nom-de-guerre.

Some heavy weather tonight, Mr. T. It always brings out the annoying insects contributions.

Of course, you do attract them with those bright lights…

#74 Ed on 05.22.22 at 7:42 pm

Thanks for the blog always Mr Garth…does seem like the peanut gallery is getting to you though…I’d say a double Oban is in order!

#75 Nonplused on 05.22.22 at 7:45 pm

My theory is you cannot have general across the board inflation without an increase in the money supply, or at least the money available to consumers. That was provided by all the government handouts like CERB.

Sure, you can have an oil shock but if that’s all you have people need to cut back in other areas to pay for their gas, so you don’t get general inflation. But hand out a bunch of money and people can pay for both.

However it looks like now that the free money is drying up, a recession may be coming, at least in the states. The quarterly reports from retailers are awful. Excess inventory, reduced sales, inflation cutting into the bottom line, and possible layoffs (Amazon is talking 100,000 people). So ya the indicators are that the CB’s won’t need to go to 20%. In fact they run the risk of overshooting with just what they have planned.

#76 Shawn on 05.22.22 at 7:46 pm

The math of those who claim real inflation is say 15% is challenging.

Wages are up about 3%. How it it possible that demand remains robust if overall inflation is close to 15%? (It’s not)

Are we to believe tath households on average are now borrowing 12% of their spending needs compared to last year? Are credit cards really running up at a 12% annual rate right now?

So I think inflation is closer to the official 6.8% or so.

Still, households can’t maintain the same volume of purchases withy 7% inflation and wages up an average of say 3%. Retail volumes have to drop. That lowers GDP. Called recession. Coming.

#77 Ustabe on 05.22.22 at 7:51 pm


#42 Russ on 05.22.22 at 3:57 pm

Hey Flop, (from the yesterday file)

Good luck on the CAS but it has been established a long time ago that you cannot copyright a chord progression. Some group tried it with a Led Zeppelin tune and lost too.

While you research, try this one:

Sweet Child of Mine, best cover ever!

https://www.youtube.com/watch?v=Wo9Iwhb3Z8A

Cheers, Russ
(soaking up the rays at Lake Okanogan. Life seems pretty sweet alright)

What a pleasure to listen to real musicians, no auto-tune, no wall of sound over production! Thanks for that link!

Saskatoon, late 60’s, early 70’s had a group called Humphrey and the Dumptrucks. Vocals were by a guy named Graeme Card, their percussion guy went on to become the touring drummer for Johnny Cash.

They were good, real good and for whatever reasons never hit, can’t even find them on these Internets. Shame, they too were real musicians playing real music.

BTW, you spelled Okanagan wrong.

#78 Philco on 05.22.22 at 7:58 pm

Yes peeps that blame CB are wrong. Yes we are behind the curve but deflation scares the hell out of them.
They dont want a crash on their hands.
Tough choices no dought.

#79 Philco on 05.22.22 at 8:20 pm

Garth were you into the sauce today lol.
I gave up helping people id rather just have them over for an all inclusive Barbie.
When they hit the ditch maybe they will rember their mistake.

People and debt.
No diffent than when zi was a kid. Had a grocery store and my parents did not monitor the twixlers, chocolate bars and ice cream.
They said just write in the book what you took so we can keep proper inventory.
We never ever over did it and respected that. Was awsome.
Oh and dad built a take out restaurant at the end of the building maybe 25 ft x 25 made huge coin next to the ferry teminal.
Fish and chips, prawn the best dam milkshakes.
The whole town raved about us. I remeber City hall and the fire departs coming getting huge family packs.
Mom Dad let us eat whatever we wanted. I had no fat on me even with all the opportunity to over indulge. We never did.
When i was 13 i rebuilt at the commercial washers and dryers as we gad a large commercial laundromat attached to the other biz. It was like disney land for me.
Growing up there taught me ALOT.
So if someone gives you the keys to the candy store dont blame them for getting fat :-)
That on you.

#80 Sail Away on 05.22.22 at 8:47 pm

Thanks Garth, good post!

In the Sail Away extended family, mortgages have never really been a thing. We have no control over the mortgage rate, so why stick our head in a noose? There is always patience or another locale with better value- our family is spread far and wide over a few countries with a common theme: no debt.

What happens if rates do reach 20%? Sure, they almost surely won’t but if they do? That’s $160k annual after-tax interest payment on an $800k mortgage. Yow!

As Charlie Munger says:

“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”

#81 gfd on 05.22.22 at 8:47 pm

“We’re in a post-pandemic world where consumer spending and demand have exploded.” All right. But why is China’s inflation less than 1%?

#82 Brad on 05.22.22 at 8:48 pm

CB’s are responsible for this current mess we’re in.

“Money becomes worthless if too much is printed. If the Money Supply increases faster than real output then, ceteris paribus, inflation will occur”

Modern Monetary Theory is a crock of “$&@

The CB did not print money. It created credit which is now debt. Nothing was created from nothing. – Garth

#83 Bob H on 05.22.22 at 8:50 pm

The central banks will raise rates until something breaks; then back to zero rates and QE.
Corporate capital structure has bet that rates will never rise. They are correct. We might get 200 BP’s, then back down..
They could have kept this going for a generation, I think, but COVID and its effects were never in the mix.
Rates CANNOT go up.
I will check back here in 6 months

#84 Russ on 05.22.22 at 8:56 pm

Ustabe on 05.22.22 at 7:51 pm

#42 Russ on 05.22.22 at 3:57 pm

Sweet Child of Mine, best cover ever!

https://www.youtube.com/watch?v=Wo9Iwhb3Z8A
————————————————

What a pleasure to listen to real musicians, no auto-tune, no wall of sound over production! Thanks for that link!

Saskatoon, late 60’s, early 70’s had a group called Humphrey and the Dumptrucks. Vocals were by a guy named Graeme Card, their percussion guy went on to become the touring drummer for Johnny Cash.

They were good, real good and for whatever reasons never hit, can’t even find them on these Internets. Shame, they too were real musicians playing real music.

BTW, you spelled Okanagan wrong.

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

Thanks for the tip. I see it now on my resort sheet, with an “a”.

‘ been sitting on balcony above a Takki Tikki bar and the pounding boom boom and over-produced ,trying to be music, stuff (one after the other) from the bar sound is very unimaginative. Maybe it’s okay at a rave party I guess but this is daytime and patrons encouraged to be only drinking there.

BTW, the young ladies scantly clad, some as bikini only, coming to & fro off the boats by the hundreds over the course of the day. If it was a talent contest then I certainly could not pick the winner!
Granted a long weekend in BC but there sure is no lack of spending here, with 15 dollar drinks and every boat has a large engine. The lake surface is littered with them.

On the spot Cub reporter, out.

Cheers, Russ

#85 SW on 05.22.22 at 9:02 pm

Did not think what I said warranted a delete but ok that’s not my call. Certainly no dirty talk as Nora would suggest. Lol. Guess I’m just a grizzled old fart that’s been trading the markets too long and don’t have much finesse with words. Not a regular in the comment section but see from other posters this has been an unusually boisterous evening.

#86 crowdedelevatorfartz on 05.22.22 at 9:06 pm

@#74, 80, 81 Fillco

I agree that we need more skilled trades and less personal debt….
However…..

If you pay me 250k per year.
I’ll proof read your posts AND drive you home from the bar………

#87 Km on 05.22.22 at 9:07 pm

Oh I understand it as I remember living through one with my family and living on charity. Having no food was not fun. At the same time perhaps this is what is needed to blow off the excesses of all those who are making us need a softer landing. Who knows, it is just frustrating being careful and prudent while those who act foolish get coddled and have no repercussions.

#88 FeerisWheel on 05.22.22 at 9:09 pm

Respect you guys a lot but selling equities and sittyin cash is the best thing to do. We can be entering a nasty depression.

#89 Flop… on 05.22.22 at 9:10 pm

I’ve never thought of Surrey as Bunnypatch.

More like Funnypatch…

M47BC

——————————
“Average detached home prices in Surrey, Langley seeing double-digit drop

While home prices in Metro Vancouver remain sky-high, the price for single-family detached homes in two of the region’s fastest-growing markets have seen a significant dip recently, according to one industry group.

In Surrey, the average price dropped from $1.9 million to $1.59 million – a decrease of 16.3 per cent. In Langley, the price dropped from $1.75 million to $1.5 million – a decrease of 14.3 per cent.

While higher interest rates are said to be cooling the market in B.C. and beyond, HouseSigma agent Hao Li says there is likely something else at play in these two places. As people flocked outside of the city looking for cheaper housing, the population boom drove up prices. Now, Li says the demand has eased.

“One of the reasons that it is going downward even more is because it’s been rising much quicker in those two cities compared to other cities of Greater Vancouver for the past two years,” he says.”

https://bc.ctvnews.ca/average-detached-home-prices-in-surrey-langley-seeing-double-digit-drop-1.5914648

——————————————-

For Uncle Ustabe, one of Oz Rocks first international hits.

The Conservatives, sorry that’s The Easybeats.

Same diff….

M47BC

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

#90 crowdedelevatorfartz on 05.22.22 at 9:16 pm

@#76 Ed
“I’d say a double Oban is in order!”
+++
I’ll drink to that… but a 15 year old Macallan ….will just have to do….

#91 Ordinary Blog Dog on 05.22.22 at 9:34 pm

Garth, thanks for the responses today. Actually helping me to understand rate increases and why they are ‘slow’ rather than ‘fast’. Also, the distinction that demand is the main cause of inflation is helpful – as opposed to this wacky theory the CB caused it all. And all the people that believe the Pepe version – at face value …. amazing. Thanks for the replies today … priceless. And the humor was good too!

#92 I don't know on 05.22.22 at 9:41 pm

Central banks will not tolerate double digit inflation, but they will tolerate low levels of inflation since that is their mandate. What they fear more than anything is 2008 type deflation. So if you have been hoarding cash, sorry about that.

There is no other way to describe anyone expecting a repeat of 1982 other than out-to-lunch. Whatever someone who believes that says, it’s a good bet to do the opposite to make money.

This is the most valuable nugget of today’s post:

” Save a lot and pay down the principal upon renewal. Get a weekly-pay mortgage to shorten the amortization and reduce the debt faster. Maintain your B&D portfolio and use gains in a few years (they’re coming) to reduce the outstanding obligation.”

-Absolutely. Gains are coming (real estate and the stock market), but you have to be patient, it could be a while. If you were smart enough to lock in at rock bottom rates, than just enjoy life with fixed payments and go back to sleep.

IDK

#93 Loan arranger on 05.22.22 at 9:50 pm

#15 Shawn on 05.22.22 at 1:14 pm

What’s this “we” owe?

We owe $1.73 trillion in home loans alone. Plus hundreds of billions more in home equity lines of credit.

*************************************
Not me, I owe zip. Don’t include me in this “we”.

———

Clearly Shawn, you leave a deluded existence. It’s mighty nice that you feel this way, but your elected government decided otherwise and took out obligations on your behalf.

You do owe your portion of the national and provincial debts.. Including all those CHMC loans that your neighbours signed up for while you were sleeping so soundly and smugly!

#94 THE DANDADA on 05.22.22 at 10:02 pm

Rates going UP!!

Rent, Food, everything else going UP!!

So I thought the whole point of raising rates is to bring prices down so the middle and lower class with fixed incomes don’t get decimated.

What’s going on??

#95 45north on 05.22.22 at 10:03 pm

that apocalypse

In short, a central bank rate north of 5%, or double-digit consumer loan and mortgage costs are no longer feasible without economic devastation. We owe $1.73 trillion in home loans alone. Plus hundreds of billions more in home equity lines of credit. All those HELOCs have floating rates, rising each time the chartered bank prime swells. And 37% of all outstanding mortgages come up for renewal within 24 months. Already the savings rate has plunged and incomes are increasing far less than the CPI. The conclusion is, clearly, that a 1982-rerun is not in the cards.
Having said that, rates do not need to hit 20% to wreak havoc. Not with this epic level of debt in the land. A CB rate of 3.5%, chartered bank prime at 5.7% and five-year mortgages at 7% would have a similar effect. And there is perhaps a seven-in-ten chance we’ll get there.

the Bank of Canada didn’t want higher rates. The Government of Canada didn’t want them either but here we are. The housing bubble is a belief-based system. There’s no magic line. Once you raise rates, apocalypse is around every corner.

#96 K Shaped Recovery on 05.22.22 at 10:45 pm

re: #6 Toronto

This is worth a review:

https://www.youtube.com/watch?v=EwB5ihGu4Jw

It is also worth turning off Trudeau’s publicly funded propaganda. Pierre is mirroring Justin’s “dumb and dumber” hyperbolized populism for the sake of grandstanding. They’re both losers.

But “anti-semetic” …. the hypnosis wrapping itself around the citizenry of Canada is getting to be unsettling.

#97 gfd on 05.22.22 at 11:01 pm

It’s hard to believe how Canada has a demographic today of any size that is actually proud of how uneducated they are, and wave it like a flag and wear it like a badge of honour.

#98 Dr V on 05.22.22 at 11:25 pm

95 Loan arranger

“….your elected government decided otherwise and took
out obligations on your behalf.”
—————————————————

While this is true, who is owed this obligation?

#99 Ustabe on 05.22.22 at 11:35 pm

Flop, Russ, anyone else who like old time music!

The last time I went looking for Dumptruck music had to have been 10 or more years ago but guess what?

9 years ago someone put up a bunch of Dumptruck music.

Jugband warning, eh?

https://www.youtube.com/watch?v=X0yndWVDafs

#100 Truth or Consequences on 05.22.22 at 11:45 pm

Why do you defend Central Banks when it’s obvious they created inflation by keeping interest rates too low for too long and enabling governments by buying their bonds? They flooded the economy with money so we have inflation. It’s so simple a child can understand it.

Poilievre said he would fire Macklem and I agree with that move.

PS: Poilievre will be the next PM so get used to it.

I give up. – Garth

#101 PeterfromCalgary on 05.22.22 at 11:48 pm

Mohamed Aly El-Erian being saying for months that the FED had to tighten but the FED did not listen to him until recently. He is a smart bond guy which is why the Obama administration made him chair of the “Global Development Council”.

#102 MDQ on 05.22.22 at 11:58 pm

Garth, you blame supply chain for the inflation we are seeing and defending CBs for creating easy/cheap credit.

The two go hand-in-hand, one of the main reasons for supply chain disruption was the easy access to credit; created by CBs. Most manufacturers had to buy parts in bulk and in advance, using this credit.

Blaming individuals for this mess is easy, don’t you think that the CB and governments could have acted differently? They responded as most Canadians do, with lots of credit/debt. They could have lend money to everyone that needed it at 0% rate to be paid back in 10 years. But no, it was all “Free” for everyone, including corps making big $.

Stating that other CBs did the same thing is lame, we could have done better and avoid most of this debt. And don’t tell me that individuals inflated the housing market, you know why it happened; and CBs knew it too.

#103 MalcolmM on 05.23.22 at 12:25 am

Of course the BoC is at least partially to blame for high inflation. Sure inflation is high in other countries, those other countries were also printing money.

I also am surprised you can quote the Stats Can inflation rate without a comment about how it vastly understates inflation. Not that other countries don’t do the same but this is the rare case where Canada excels.

#104 Yukon Elvis on 05.23.22 at 12:51 am

Credit Suisse is adding Canada’s big banks to its coverage universe, expecting an average total return of 20 per cent from the Big Six over the next 12 months.
In a note to clients on Friday, Credit Suisse Analyst Joo Ho Kim outlined several growth drivers he’s eyeing for Canada’s banking sector. Those include continued loan growth, signs of an improving macroeconomic outlook and discipline around expenses and capital deployment.
Kim awarded outperform ratings (the equivalent of a buy) on four banks and neutral recommendations (the equivalent of a hold) on the remaining two.
Bank of Montreal: Outperform, 12-month price target of $159
Canadian Imperial Bank of Commerce: Outperform, 12-month price target of $81
National Bank: Outperform, 12-month price target of $106
Royal Bank of Canada: Outperform, 12-month price target of $153
Bank of Nova Scotia: Neutral, 12-month price target of $88
Toronto-Dominion Bank: Neutral, 12-month price target of $102.

https://www.bnnbloomberg.ca/credit-suisse-initiates-coverage-on-canada-s-big-six-banks-1.1768724

#105 Philco on 05.23.22 at 1:07 am

#88 crowdedelevatorfartz on 05.22.22 at 9:06 pm

LoL! Hows $250. Csuse i dont frequent the bar. Just hang with my awsome neighbors.
I was taught to spell phonetically. Grade 3-5 until they figured it was a bad idea. I know better now but usially on my crap old phone.

Garth nailed it. Cross our fingies.

It’s not a defense, but an explanation for those who have no idea what the central does or attempts to do – regulate the economy – which is constantly changing and subject to unforeseen shocks (Covid, war, $115 oil). Rates must rise gently, gradually and at the right moment, lest the impact on consumer behaviour is too consequential. Look at what’s transpired to real estate with just the first two of six or eight tightenings. When inflation is a global issue there is no quick local fix. How hard is that to grasp? — Garth

#106 neo on 05.23.22 at 7:50 am

Garth,

I love how you gloss over QE programs in the US and Canada. That wasn’t around in the 1980’s so you actually had truer price discovery. QE artificially suppressed rates. If left to it’s own devices the bond market would be very different in Canada without it the past 2.5 years. We are now having rate hikes AND QT.

Bond yield suppression to stimulate economic activity has been referenced here often. (Perhaps pay closer attention.) The reverse is now taking place as CBs unwind their positions amid pandemic fading. Seems reasonable. – Garth

#107 TurnerNation on 05.23.22 at 9:05 am

Gonna be a fun 2022. We know this is not set to end. The remaking of the world was kicked off that cold week March 2020.

1. Control over our feeding. Due to man-made shortages the food supply will come more and more uncer global goverment control. UN?

World has 10-week supply of wheat, expert tells UN Security Council: ‘This is seismic’
https://www.fox10phoenix.com/news/world-wheat-supply-food-shortage-un-security-council-sara-menker.amp
“This isn’t cyclical. This is seismic,” Menker said during a special meeting of the UN Security Council. “Even if the war were to end tomorrow, our food security problem isn’t going away anytime soon without concerted action.”

2. Control over travel/movement. Check

https://www.dailymail.co.uk/news/article-10844809/EU-health-chiefs-tell-nations-prepare-vaccination-strategies-amid-scramble-contain-monkeypox.html
“Europe’s red alert for monkeypox: EU health chiefs tell nations to prepare vaccination strategies amid scramble to contain virus – as Denmark becomes 16th country to be struck down and Boris Johnson reveals No10 is ‘keeping an eye’ on outbreak


….which of course is a couple steps away from this. I mean why not. The stricter The Rules the healthier we become.

.Shanghai District to Require All Shops to Shut, Residents to Stay Home (usnews.com)

.Beijing quarantines all residents of housing complex after Covid-19 cases found: Report (straitstimes.com)

#108 crowdedelevatorfartz on 05.23.22 at 9:10 am

@#107 Philco
“LoL! Hows $250. Csuse i dont frequent the bar. Just hang with my awsome neighbors.”

+++

No worries.
My Living Out Allowance will more than compensate me.
Oh and Canada’s daily inflation rate just bumped it to $300.

#109 KLNR on 05.23.22 at 9:18 am

@
#12 My Body My Choice on 05.22.22 at 12:52 pm
#6 Toronto “Pierre Poilievre is now using veiled anti-Semitism in his campaign trial.”

Did you pick that up on CBC or did you come up with it yourself?

Poilievre Derangement Syndrome is taking hold across the nation.

Take your blinders off.
PP is clearly a nutter.

#110 KLNR on 05.23.22 at 9:23 am

@ #23 IHCTD9 on 05.22.22 at 1:58 pm
#9 Ustabe on 05.22.22 at 12:41 pm
#114 IHCTD9 on 05.22.22 at 11:01 am

#84 Ustabe on 05.21.22 at 6:40 pm

Today’s haul was 7 pounds
———-

What do you do to preserve that many mushrooms? Can you freeze them?

——-

….So we eat large amounts, don’t go out daily, spread the wealth among the neighbours, etc.

———-

That’s what I was figuring. Same thing with tomato, apple and cucumber bumper crops locally, – spread the wealth. I love mushrooms, but they don’t last long in the fridge. A guy at work forages for giant puffballs, he must eat some of it every day. It’s 20-30 lb mushroom! Either that, or he makes a lot of spaghetti sauce.

Safe harvesting folks.

https://www.outsideonline.com/podcast/deadly-mushroom/

#111 Shawn on 05.23.22 at 9:30 am

#95 Loan arranger on 05.22.22 at 9:50 pm responded

#15 Shawn on 05.22.22 at 1:14 pm

What’s this “we” owe?

We owe $1.73 trillion in home loans alone. Plus hundreds of billions more in home equity lines of credit.

*************************************
Not me, I owe zip. Don’t include me in this “we”.

———

Clearly Shawn, you leave a deluded existence. It’s mighty nice that you feel this way, but your elected government decided otherwise and took out obligations on your behalf.

You do owe your portion of the national and provincial debts.. Including all those CHMC loans that your neighbours signed up for while you were sleeping so soundly and smugly!

*********************************
Sorry dude, I’m in Alberta where the provincial debt will be paid off by oil royalties in short order. (Did I mention, move to Alberta?)

No Canadian owes a per capita share of the national or provincial or CMHC debt guarantees. And CMHC will likely continue to be a money maker.

Do you believe those idiotic claims that every man woman, other, and baby owes such and such dollars. Like we are all average?

We must only only pay our income tax based on income. Some (apparently 40%) will pay zero and some will pay large amounts but many can easily afford it.

AND as Dr. V at 100 said, how do you know that the National debt is is not partly owed to me personally? Maybe I invested in government of Canada bonds. (I did not of course).

We live in a multi tier world. If you are suggesting that a boomer such as myself with ample investments and no debt is not well off you are wrong.

Others here suggest interest rates can’t rise. Talk about delusional.

Garth says we are in a post-pandemic spending boom and it seems many of us are. But it seems half the people are panicking about high gasoline and food prices and high energy costs.

Anyone suggesting they know exactly what comes next is delusional. But I do know I’m well prepared. Pass the popcorn.

#112 IHCTD9 on 05.23.22 at 10:19 am

#2 Flop… on 05.22.22 at 12:05 pm

Like a lot of Australian bands at that time, they tried to get into the American market, after establishing themselves back home, but ultimately failed.
——-

I remember when your handle was “for those about to Flop”, and always assumed it was a play on a certain tune, from a certain “well known” (ha!) Australian band.

Here’s a couple Australian bands I really like:

https://www.youtube.com/watch?v=Q0q9a5QS6WQ

https://www.youtube.com/watch?v=K7ngGOlna0A

But you’re right, these two bands should be much bigger than they are (IMHO)

#113 crowdedelevatorfartz on 05.23.22 at 10:35 am

@#111 KLNR
“PP is clearly a nutter.”

+++
nah.
He’s not crazy.
Just a shrewd opportunist that has found the easiest route to possibly defeating Little Lord Fauntleroy.
If it means embracing the Trucker crowd and making dangerous promises to “fire” the board of Bank of Canada leadership….so be it.
Anything to win.
15 second, zero substance, punch them in the mouth, sound bites.
The new reality in internet based politics these days…

#114 Graham Johnson on 05.23.22 at 10:46 am

Honest question Garth, I’m genuinely interested as to why you say inflation is not the fault of Liberal policy, enabled by the central bank. To a simple guy like me it seems that 1. The large fiscal stimulus led to a lot more cash available which causes inflation due to the law of supply and demand, 2. The stimulus was spent trying to shut down economic activity rather than promote it, which could cause supply chain issues, 3. Every Western government did this because almost every western government engaged in unprecedented lockdown policy.
I consider you an intelligent person, and genuinely wonder why you dismiss how these three points as not being possibly related to inflation.

To me, sure, Macklem isn’t completely at fault since this is global, but he sure didn’t do anything to stand against it

#115 Sail Away on 05.23.22 at 11:05 am

#112 KLNR on 05.23.22 at 9:23 am
@ #23 IHCTD9 on 05.22.22 at 1:58 pm
#9 Ustabe on 05.22.22 at 12:41 pm
#114 IHCTD9 on 05.22.22 at 11:01 am

#84 Ustabe on 05.21.22 at 6:40 pm

Today’s haul was 7 pounds.

———

What do you do to preserve that many mushrooms? Can you freeze them?

———

….So we eat large amounts, don’t go out daily, spread the wealth among the neighbours, etc.

———

That’s what I was figuring. Same thing with tomato, apple and cucumber bumper crops locally, – spread the wealth. I love mushrooms, but they don’t last long in the fridge. A guy at work forages for giant puffballs, he must eat some of it every day. It’s 20-30 lb mushroom! Either that, or he makes a lot of spaghetti sauce.

———

Safe harvesting folks.

https://www.outsideonline.com/podcast/deadly-mushroom/

———

Well, let me jump in the morel chatroom.

We’ve been finding some on VI during dog walks (because they sniff them out for a treat) mostly in known areas and mostly floodplains with cottonwoods. But the real bounty will be this week’s gathering trip to last year’s Sparks Lake fire near Kamloops. Getting some good reports. It’s possible in a good fire area to get 100lbs in a day, depending how hard you want to work. Key on the green spots within a burnt landscape.

We always dry them. Best picking is 4-5 days after the last rain and 20-ish degrees, since the mushroom surface is already dry. Then spread on racks, or sew on strings (downrigger poly is perfect) as Ustabe mentioned and air dry with hopefully a breeze. After two days they’ll be done and last forever- store loosely in bins in dry area with good air circulation and gently agitate now and again. 5gal buckets with holes work well for both gathering and storing. White because black can get too hot in the sun.

And since this is a financial blog, you can sell dried morels to restaurants after the season for $200/lb if you need pocket $. Maybe more this year. That’s around 8-10 lbs fresh. We’d have the kids do this to learn bizness. Now we’re mostly on the barter system for seafood and wild game.

#116 Omicron Kenobi on 05.23.22 at 11:15 am

But understand CBs will not tolerate double-digit inflation. Nor did they create this evil.

____________________________________________

I created this evil, and my offspring are coming after all of you.

#117 Dharma Bum on 05.23.22 at 11:24 am

What Apocalypse?

https://www.youtube.com/watch?v=tB5C5P9qveE

#118 Flop… on 05.23.22 at 11:37 am

#114 IHCTD9 on 05.23.22 at 10:19 am
#2 Flop… on 05.22.22 at 12:05 pm
Like a lot of Australian bands at that time, they tried to get into the American market, after establishing themselves back home, but ultimately failed.
——-
I remember when your handle was “for those about to Flop”, and always assumed it was a play on a certain tune, from a certain “well known” (ha!) Australian band.

/////////////////////////////////

Morning Trackie, yeah when I was try to think up a handle I decided to choose something that had a nod to my Southern roots.

I was never a huge AC/DC fan, sure I liked some of their songs but I never went to any of their concerts, bought any albums, or wore an AC/DC t- shirt, like seemingly half of Australia did during the mid 80s.

As revealed on here when I was working on new construction houses in the monied side of town in the run up to the 2016/2017 correction, I kept hearing rumours about ridiculously tight profit margins, and thought one little momentum change and the stuff is going to hit the fan.

It hit, some lost millions, lots made millions too, it’s still the biggest game in town, just now played in a more wider region.

I vaguely remember someone writing “For those about to flop…We salute you!” during my Pink Snow documentation adventure, so at least one person got it at the time.

I watched your videos, one of them made me cry, not the music, in the second one seeing the bag of nice looking oranges being slapped out of someone’s hands was painful to watch as even in my overloaded fruit stand Mecca it is getting harder and harder to get decent quality fruit for a decent price.

I watched Ustabe’s video too, I honed in on the musician in the background around the 1:30 mark sucking on a pipe.

It reminded me of my childhood, my Pop on my Mum’s side would smoke a pipe when we were all in the car on the way to the gas station, where we would top up for $5.

What song to finish up with?

We’ll, honestly with all the people running off to Bunnypatch hoping to find paradise and then running into problems, I don’t really have any option except to put up the Oz Rock classic Run To Paradise…

M47BC

https://www.youtube.com/watch?v=3hxYDqhy2Vc

#119 Quintilian on 05.23.22 at 11:43 am

Long before the pandemic decimated the consumer economy, we had Central Bank fueled asset inflation. The CB’s willful neglect distorted the economic ecology, created a wealth gap, and transferred unearned wealth to the gamblers from the savers.

It is finally beginning to be acknowledged that to control inflation the CB’s have to target the main source of persistent inflation.

The transitory portion of inflation will eventually dissipate, but the entrenched inflation which the CB’s created will take an asset price crash.

#120 cropgrower on 05.23.22 at 11:53 am

My brother in-law from Calgary used to come out and help with the harvest in the 70’s, and 80’s. I can remember him trying to decide wether he should pay off his remaining mortgage locked in at 7%. At the time I was paying 17% on a new $80,000 tractor. I told him he would be crazy to with practically free money like that. Bought the tractor because needed it, but also because you could depreciate 35% on “new equipment” for the first year, and that’s what we lived on…….ahh, the good ole days…..

#121 willworkforpickles on 05.23.22 at 12:19 pm

DELETED. (You are done here.)

#122 Apocalypse Dude's Drunken BIL on 05.23.22 at 1:07 pm

Oh, no, Bro, maybe you were right!

Now it’s gonna be the MonkeyPoxalypse!

Jane Goodall, save us!!!!!!!!!!!!!!!!!!!!!!!!!!!

#123 crowdedelevatorfartz on 05.23.22 at 1:34 pm

@#118 Tales from the Crypt
“I created this evil, and my offspring are coming after all of you.”

+++
Papa Pierre I presume…….

#124 willworkforpickles on 05.23.22 at 1:43 pm

DELETED

#125 Ustabe on 05.23.22 at 2:19 pm

I would caution anyone foraging for morels that they need to freeze the mushrooms after drying. Despite the method described above by Sail Away.

You have little to no control over humidity, temperature, etc. What works for one may not work for another and while poisoning from foraged wild mushrooms is rare it is real.

I’ll repeat myself: without some pretty extensive moisture meters, humidistats and temperature regulation simply drying ( where? garage, garden shed, basement?) and then storing in a bucket somewhere is a recipe for disaster. Harry Homeowner should dry as described and then freeze in jars.

One hopes that his engineering proposals have a bit more attention paid than his Internet methods he promotes.

#126 Sail Away on 05.23.22 at 3:35 pm

#128 Ustabe on 05.23.22 at 2:19 pm

One hopes that [Sail Away’s] engineering proposals have a bit more attention paid than his Internet methods he promotes.

——–

Nah, just about the same. You should see my recipe for kiviak.