It's extremely important to understand that while we see CPI inflation it does not mean that wage inflation is a sure thing and for house prices total wages is what matters. CPI inflation without wage inflation is devastating for house prices. Even if there were wage inflation, interest rates would be much higher and eroded affordability would destroy high prices faster than wages could be raised to compensate. Either road you take, the end result is devastation.

Save a massive sweet crude oil strike in Queen Elizabeth Park, nothing will save Vancouver house prices now.

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Lululemon?"

Some Lululemon articles are produced in Vancouver, most are produced in; United States, China, Israel, Taiwan, India, Thailand and Indonesia.

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Bernanke tried a passive deflationary tactic without having to raise rates and is having some success so far. He doesn't want a repeat of the 1970s and 1980s, but I think sooner of later he will have no choice, because while house prices are trending lower, it's not low enough to cause the economy to spiral into a deep recession. Which means, inflationary pressures will continue to increase. They need a deep recession to cleanse all the bad credit and re-price them to proper fundamentals before we proceed to the next boom phase. This hasn't happened yet.

Canada, too, is facing a similar prospect as the US albeit at a lag. While we are unlike the US in some things, I think we may end up with the similar outcome. Today, house prices are high not because of population, best place to live and great breathing air. They are propped up because, it is easy to borrow money and it is an acceptable form of investment practice. If you take out the borrow money part and expect all people to pay for their own homes with cash, see how many souls can actually do just that.

But remember, if we expect higher home prices, we also must expect higher inflation rate to come which means less discretionary spending and which can lead to more job losses, companies on the brink of bankruptcies and subdued wages because of the increasing labour market.

Now, it's becoming difficult to get higher paying jobs and it is these jobs that would ideally meet inflationary pressures. Traditionally auto jobs are threatened. How many people will be working for $8 to $10/hr jobs here if inflation keeps rising? How many companies will survive with the lack of these employees? If you raise salary and so will your prices, but we are all cutting back on other stuff to say money that goes towards higher gas prices and food. It's a vicious circle. If the Fed or BOC continually deny inflation is on the rise or is on its magical 2.2% rate, then eventually there will be very few people left wanting to spend anything more other than food, shelter and medicine. Then more companies will fail and more unemployment.

How do you propose people pay their mortgages if they are out of work? If they can't pay their mortgages, how do you expect home prices to continually rise? Do you expect lenders to lend money to these people and expect no financial compensation? Do you think these people are stupid?

When I see people justify higher home prices with immigration data and current prices, they are all looking at a rear view mirror. When the economy is receding, people will move to wherever job prospects are better. It's called the brain drain, or maybe people had forgotten that term from the mid to late 1990s. Who says people will stay here forever?

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Just more proof at how little anyone outside of BC really cares about BC and more specifically Vancouver. Remember that BC real estate is 95% local and the 5% that isn't is drying up fast.

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Why don't you find out from the pope?maybe you are worried about the real answer right?tdk? oh i mean bdk?

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It makes sense to try to bring the blog off topic, so to recap

1.The Condo Market is finsihed.

2.Pre Sales at TV Towers are going to sell for $120,000 each within the year.

You never could get through the kids book "The Emperors New Clothes" could you?

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