You guys are hilarious! Ozzie published almost the exact same piece in 1998 "A Case of the Yeah, Buts" http://www2.jurock.com/insider/login.asp?c=1&…

He's toying with you gloomy guses! Too funny!

Drachen

Gold is going to $1,650 within the next 12 months. Buy some today or lose out on easy money. BTW, what would YOU invest in now? This should be interesting to hear.

Oh yes most investors are just like me, making about 5 to 10 grand

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Warren

"A condition of slow economic growth and relatively high unemployment – a time of stagnation – accompanied by a rise in prices, or inflation.

Investopedia Says… Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stagnation increased the inflationary effects."

I can comment on the cashier point I made earlier. I was basing it on a random stat I remembered from first or second year Economics class, that housing had gone up at a ratio of 3 to 1 versus income since 1970 and a cashier I knew who worked at the same grocery store from the late 60's to the end of the 90's compared with the prices of houses in the area where she lived. The problem with having this argument everyday is idiots like Krissh haven't seen how fast "specuvestor" sentiment changes. 95% of Sophia buyers were speculators, I'm guessing 75% of downtown (that means we need 7,500 buyers who earn $300k per year to suddenly move here). Krissh must've moved here from Kazakhstan in 2003, and missed the previous ten years of flat prices because he… Read more »

Above comment was meant for Drachen's post.

As for stagflation, don't assume that just because the US seems headed for it, Canada is too. Canada has nothing to gain from inflation, and lots to lose, in both the public and private sectors.

"Doesn’t recession = lack of demand = lower prices?"

It depends on a lot of factors. As an example, look at Florida construction: excess inventory and no demand yet builders still have projects they are trying to complete! Huge deflation because suppliers don't scale back and demand low and going lower.

Oil is an imperfect example of the contrary, where supply can be changed relatively quickly and keep prices from deflating (though there are a LOT of other factors that make this an imperfect example).

Agriculturals are something different. It appears like increased demand and supply shocks are driving up prices. That and speculation. Peak food, anyone? 🙂

"During economic turmoil investors like to shift their money to “hard” assets. It happens every recession."

It's an interesting exercise to look at historical commodity prices.

Really? How did that strategy work out in 1990? 1982?

Or 1929?

commodities would skyrocket in a recession economy?

one possibility is wheat and other feed grains

another is potash, critical fertilizer ingredient

gotta eat you know!

Can somebody tell me why commodities would skyrocket in a recession economy? Gold, maybe as people fear inflation, but other commodities? Doesn't recession = lack of demand = lower prices?

Evergreen,

It sounds like your argument is "It should have gone down by now but because it hasn't gone down, it will not".

..that's just retarded

Evengreen,

Stop smoking weed. Your not making sense. The market will crash. No ifs or buts. No justifying. Too much negativity. US is not going to recover. It's got a long way down.

How de coupled can our economy be when in fact Greenspan had control of our monetary policy by proxy for almost 20 years?

Bank of Canada has been just a rubber stamp.

Even better

B.C.'s boom doesn't echo in the outskirts

http://tinyurl.com/33mxoj

Update on "Decoupling Theory"

Canada's Economy slows as Expors fall

http://tinyurl.com/3alngu

Evergreem, or should I say Everhopeful:

"The notion of a constant one-to-one relationship between income and RE price across time is no longer useful compared to say, the pre-80s. Population has boomed (natural and immigration) and Canadian real estate is up for grabs for investment both locally and globally"

I think the paradigm shift argument has been used before –it’s different this time right?, And the population explosion argument has bald tires, and has little traction.

What you have left is the creative financing which is blowing up everywhere in much more populated cities than Vancouver.

I have a feeling, yes just a feeling, no science based research like yours, that when the bubble finally pops in Vancouver, our market was fuelled by irrational buyers, accommodated by cheap money.

50% drop from the peak is not far fetched.

Australian Prime Minister Kevin Rudd will unveil a plan on Monday for families suffering mortgage stress.

Hey wait a minute. If the problem in Oz is that housing is unaffordable, aren't falling prices the solution? How can affordability and falling prices both be problems at the same time?

What does "mortgage stress" have to do with falling prices? The price you paid for your house is either affordable or it isn't, regardless of whether prices go up, go down, or stay the same.

People who buy at historically low interest rates and then get into trouble when rates go up have nobody but themselves to blame. Nobody forced then to buy a house.

Who benefits by keeping "owners" making payments on houses with falling values?

Where have I heard this song before?