The going wisdom is, that as homes rapidly depreciate, the “wealth effect” is lost and these homedebtors stop buying consumer goods, thus hurting the local retail economy.

But in my experience — four friends with expensive homes in West Van, now down 20 – 25 per cent — negative equity won’t affect their spending because all four couples were maxed out on their resources to even be in those homes to begin with; they have not been spending like good little profligate consumers since Day One. So where is the loss? I suspect Vancouverites as a group have been so overly invested in their inflated homes that they have not been big spenders on anything else for some time. Indeed most stats show Vancouverites’ spending lags that of places like Calgary and Toronto.
So — could the Great Real Estate Implosion in Vancouver co-exist with a merely flatlined local economy with no real consumer-led recession to be seen here?

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http://www.vancouverreflection.....#more-1059

I’m not saying it isn’t going down, but I have a hard time believing it’s falling that fast.

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If the story is true, let’s hope the MSM picks it up. Sounds like a great leader. Remember: you heard it at VCI first.

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Well he is actually, but he has still been right about a lot of other things.

That’s one reason I read his blog actually. If someone with such a different macro perspective from me agrees with me on things like RE we must both be right.

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Admittedly, low sales volume makes analysis difficult, but the trend is showing. A month ago a sub-$600K day was rare. Three months ago a sub-$700K day was rare, and sub-$600K never occurred. When do we hit our first sub-$500K day?

These are the prices that are selling now. Only a few $M places sell to the uber-rich. And there are very, very few of those. And they’re not gonna buy in East Van. It’s gotta be the most difficult and painful thing for the east van flipper to realize this.

The realtor.ca website listings map shows listings all over the place and it’s the end of November.

And yet the denial continues. I’ve got a colleague who scoffs EXACTLY like Peter Schiffs critics do when I foretell a big crash. Of course, he did buy his first condo in Yaletown this Spring.

The Peter Schiff video (again):
http://www.youtube.com/watch?v=2I0QN-FYkpw

BTW I love the way Peter’s first critic is some arrogant economic advisor by the name of “Art laffer” As in “Laugher”. Reality surely is stranger than fiction…

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Toronto has its own Maggie

http://www.thestar.com/Business/article/540073

“Toronto Real Estate Board president Maureen O’Neill.”

“I think we’re into a real consumer confidence problem. All the economic fundamentals are sound, but people are watching CNN and having a wait-and-see attitude. When they’re listening to all the bad press they’re bound to, we have kind of a collective herd mentality.

“People will start to buy again, and we’ll see the numbers go back up.”

Yes, everything would be just fine, if the media stopped reporting the bad news.

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Now which one of you posted this on Craigslist? Abbygirl?

http://vancouver.en.craigslist.....75816.html

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http://www.youtube.com/watch?v=2I0QN-FYkpw

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There are a few people that I can inquire with but I suspect that even people “in the know” (e.g. the banks etc.) would not exactly be forthcoming with information.

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Mish is a boomer in his early 50’s. He sometimes talks about the differences in consumption between when he was a kid in the 60’s and now.

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Not a bad paper on debt deflation. Sorry about link. In a hurry.

http://www.debtdeflation.com/b.....ion-begun/

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This is a rumor that I am trying to verify. Can anyone shed some light on this?

The story goes that various banks gave all the listings to one agent to not cause panic. None are offered at under 2M (for now).

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“it is becoming obvious that inflation is at our doorstep in a big way, a big Weimar way.”

Well, I don’t think it’s obvious, but I’ll agree with you that it’s one of the two things one should be actively preparing right now to be dealing with inside a decade, yes. The other alternative, which I deem more likely, is a Soviet-level regime of wage and price controls with the foreseeable consequence of the functioning economy being pushed underground.

“the price of gold will rocket much faster than the nominal prices of stocks.”

If you figure that’s a sure thing, you’ve got to explain why from 1980-2001 prices in general doubled but gold fell from $850 to $257. The only inflation hedge worse than gold was silver.

I’m with the theory that gold is a hedge against and predictor of price inflation, but not against monetary inflation. Which is what explains my last paragraph’s observation, and explains why gold is not a good strategy going forward I think.

“I’ll place my bet alongside the 5000-year history of failed paper currencies against hubris of economists who think they have figured out a better system.”

Superficially, this is logical, indeed. What you miss is that for those 5000 years gold was always an accepted alternative currency so debased currencies had a standard against which to fail. That is no longer true. All significant world currencies today are totally fiat and have been longer than almost everybody’s living memory. There is no institutional memory or framework that makes gold more valuable than any other commodity after a breakdown of modern central banking.

No, my planning for the apocalypse is based on the theory that in times of social collapse the only precious metal is lead, if you’re familiar with that euphemism. (If you’re not, let’s put it this way: You buy the gold, I’ll buy the guns, we’ll see who ends up with the gold AND the guns.) And a subsistence farm plot supplemented by fishing and hunting far enough out in the woods to be overlooked in the quite possibly coming food riots once the factory farming sector collapses is the strategy that anyone looking seriously at how close the entire global financial structure is to complete meltdown really ought to be pursuing right now.

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However you made my point. The Canadian dollar is losing purchasing power now but as it goes down the POG goes up. It coasts more CAD to buy an ounce of gold. In the US it costs less dollars. So if the CAD is going lower where would you rather be?

Now what if…the USD tumbles and gold goes up in terms of USD AND the CAD doesn’t rise at the same time? This is a distinct possibility in the weeks and months ahead. Still, show me one “commodity” or asset class that is outperforming gold right now besides the USD which generally means higher consumer prices coming. So the choice the way I see it is between holding USD and gold. This is a no brainer unless one is in love with paper with George Washington on it…a REAL relic.

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For now gold is holding up better than the market in the current environment of asset deflation. But when the pendulum swings back to inflation (I suspect months not years) the price of gold will rocket much faster than the nominal prices of stocks. I’ll place my bet alongside the 5000-year history of failed paper currencies against hubris of economists who think they have figured out a better system.

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Anyway I’m betting on runaway monetary inflation, lots and lots of it until it somehow filters down to create jobs that were lost and gets consumers to spend again. I don’t see consumer spending habits returning to last years levels for many years.

Lastly when, not if, the USD tumbles the price of gold will rocket, silver too. Patriotz big mistake is a common one, calling gold a commodity. Its not a commodity, its real money and seems joined at the hip by exchange rates and that is the proof right there.

BTW gold went up again today in CAD to 963.00/oz

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http://www.youtube.com/watch?v=V1ED4ohCZNk

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When in the same circumstance just recently, I said that the market meltdown is actually favourable for Real Estate.

As I go on, and feed them the BS line that as investors become more disillusioned with the stock market they will gravitate toward real estate, and given that Vancouver is the most desirable place on earth, many of the rich Asians are set to buy in Vancouver, and now may be the last chance for some to get into the market before the world wide exposure we are about to get thanks to the great team at VANOC for bringing the world to us in 2010.

Then I lay it on really thick…..

With the rest of the world in chaos, interest rates will drop further, and that can only help our Real Estate market.

Then a little thicker….

With oil dropping the Alberta oil barons will want to hedge, and with what better than British Columbia real estate? Because we are the California of the north and all the baby boomers will be moving here to retire, we can expect a huge wave on net migration of grey wealth to flock here.

And then I ended by saying…

British Columbia is about to burst at the seams, and if you can pick up an investment property, act quickly because there may not be an opportunity like this ever again.

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