Saturday, November 19, 2011

Canada’s home sales top predictions; why a real estate crash is inevitable

“The assurance of relatively low borrowing costs has likely given home buyers confidence while rising home values have kept new listings at a healthy level. Stable employment has provided some assurance to owners and buyers alike.”

The Canadian housing market continues to exceed expectations and is now forecast by many experts to remain healthy well into next year despite a slowdown in the overall economy.

The Canadian Real Estate Association revised its forecast upward Tuesday after reporting strong October sales. It now projects sales this year will be up 1.4 per cent from 2010, half a percentage point better than its previous forecast.

However, CREA expects there will be slightly fewer units sold next year than in 2011, but the 0.5 per cent decline is still an upward revision of its earlier estimate.

The association forecasts 453,300 home sales countrywide this year, up from 446,915 in 2010. The forecast for 2012 is 451,200 homes sold.

The latest RBC Housing Forecast released Tuesday also predicted 1.4 per cent growth this year, but was more upbeat than CREA about future sales, expecting a 0.4 per cent increase in 2012.

The revisions come at a time when central banks in Canada and the United States are keeping their key lending rates low to counter slowing global economic growth.

“There was no shortage of headline news in October about global financial market volatility and economic uncertainty, but it doesn’t appear to have dampened homebuyers’ spirits,” said Gary Morse, CREA’s president.

However, heavy borrowing activity signals dark clouds on the horizon for some households as debt reaches record levels. The most over-leveraged Canadians could find themselves unable to cope when interest rates eventually rise, federal Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney have warned. Source (1) Canadian Business News

On what grounds would I believe a press release (because thats what the above article is about) from a group of market manipulating, self-serving, fear-mongering, deceitful, neck-tied, land pimps, sucking their price-fixing commissions from the life equity of people’s homes?

The Bank of Canada, whose mandate was supposedly to keep domestic inflation under control, has cultured the largest bank mortgage ponzi scheme ever to be unloaded on our children, that of record unaffordable housing prices, and the BOC continues to allow housing prices to increase beyond the reach of the average Canadian, further eroding the spending recovery of the Canadian consumer due to inflated mortgage interest, effectively killing this country’s global competitiveness.

And they’re probably right. Now the fed has said that rates will be effectively zero for another two years and the BoC seems to be caught in the side-effects of that, more and more people are going to overextend themselves into living the good life they will not be able to afford if rates were ever to go back to historical levels. This setting us up for a housing bubble like the one that burst wiht such disastrous effects in the U.S.

Overly-expensive houses require overly-expensive wages, and manufacturing, industry, and investment will continue to be off-shored and outsourced to countries whose citizens don’t need high wages to pay for half million dollar bungalows.

For some unfathomable reason we, as Canadians, have been brain-washed by the Canadian Real Estate Association (CREA), the Canadian Bankers Association (CBA), and other self-interested parties into believing over-priced housing is a good thing when, in fact, it has become the largest domestic job-exporting pyramid scheme ever to be unleashed upon Canadian society.

When you leave in rates this low for this long, there is a consequential misallocation of resources. While indebtedness is being rejected by the US consumer, it is being embraced in Canada. Thus, while US consumers are actually paying down debt, Cdns are still shopping, buying cars and pumping up RE prices and incurring more debt.

While interest rates are certainly an important factor in real estate prices, there’s another one that doesn’t get nearly enough attention.


Historically, this ratio has been about 1:3 or 1:3.5 – through the good times and bad, and across a myriad of interest rates. In other words, if your combined household income is $100k, you should be living in a house that’s worth around $300-350k. Levels now are closer to 1:5 or 1:6. That just ain’t sustainable, folks.

The middle class is eroding in the West. The replacement for traditional household wealth and capital (the source of which used to be gainful employment) is household debt. We continue to try to live the baby boomer lifestyle without the traditional employment income levels we used to enjoy. We manage to do this by leveraging to repugnant levels. If we don’t have $1000 of disposable income left over to spend each month like we used to, we now simply borrow it (credit card).

This is sickening, if you really think about it. All the traditionally well paying jobs of yore have been shipped offshore, for 1/50th the cost.

The 2008 crash was just a trailer. The lights are dimming, the real movie is about to begin.

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Chinese Banking System Nearly Bankrupt Says Professor of Finance

Mike "Mish" Shedlock

In one of these headline news stories that sounds shocking but is not shocking in the least, The Epoch Times reports Chinese TV Host Says Regime Nearly Bankrupt

China’s economy has a reputation for being strong and prosperous, but according to a well-known Chinese television personality the country’s Gross Domestic Product is going in reverse.

Larry Lang, chair professor of Finance at the Chinese University of Hong Kong, said in a lecture that he didn’t think was being recorded that the Chinese regime is in a serious economic crisis—on the brink of bankruptcy. In his memorable formulation: every province in China is Greece.

The restrictions Lang placed on the Oct. 22 speech in Shenyang City, in northern China’s Liaoning Province, included no audio or video recording, and no media. He can be heard saying that people should not to post his speech online, or “everyone will look bad,” in the audio that is now on Youtube.
In the unusual, closed-door lecture, Lang gave a frank analysis of the Chinese economy and the censorship that is placed on intellectuals and public figures. “What I’m about to say is all true. But under this system, we are not allowed to speak the truth,” he said.

Despite Lang’s polished appearance on his high-profile TV shows, he said: “Don’t think that we are living in a peaceful time now. Actually the media cannot report anything at all. Those of us who do TV shows are so miserable and frustrated, because we cannot do any programs. As long as something is related to the government, we cannot report about it.”

He said that the regime doesn’t listen to experts, and that Party officials are insufferably arrogant. “If you don’t agree with him, he thinks you are against him,” he said.

Nothing Shocking About Mistrust, Lies, Suppression of News

The article was clearly meant to sensationalize. I gave it a big "so what else is news?"

You may wish to read the reasons for Larry Lang's statements but there is nothing shocking at all about mistrust, about news suppression, about lies, about Chinese bank insolvency.

I say that because I have reported on numerous occasions "the entire global financial system is bankrupt".

Gerald Celente: MF Global…What about Gold ETF GLD & HSBC?

from King World News:

Gerald Celente, Founder of Trends Research and the man many consider to be the top trends forecaster in the world, had some of his money in MF Global when the firm imploded. He is, understandably, not happy about it. KWN readers may not realize this but Celente would use a futures account to take physical delivery of gold and he was about to take delivery of gold on December contracts, “One of my methods of buying (gold) is to buy futures contracts. I buy futures, build up enough money in the account and then take delivery on the gold. I had enough money in my accounts to take delivery in December, which is what I kept telling the broker over and over, that I was taking delivery in December.”

Gerald Celente continues: Read More @

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John Embry: Tremendous Manipulation of Both Gold & Silver

from King World News:

With gold trading at $1,725 and silver above $32, today King World News interviewed John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management to get his take on where he sees gold, silver, the US dollar and the mining shares headed. When asked about the Australian Conference, where he was a keynote speaker, and the action in gold and silver, Embry responded, “I just got back from Australia last night and I thought the conference was absolutely outstanding. It was a credit to everyone involved in organizing the event, it was first class. As far as the action in gold, I don’t want to be arrogant, but I actually know that we have a big option expiry coming up on Tuesday and this is just business as usual.”

John Embry continues: Read More @

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Mike Krieger Exposes The Three Card Monti

We are grateful to the Washington Post, The New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those years. But, the world is now more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries.

– David Rockefeller

The interests behind the Bush Administration, such as the CFR, The Trilateral Commission -- founded by Brzezinski for David Rockefeller -- and the Bilderberger Group, have prepared for and are now moving to implement open world dictatorship within the next five years. They are not fighting against terrorists. They are fighting against citizens.

– Dr. Johannes B. Koeppl

Chancellor Angela Merkel said that Germany is ready to cede some sovereignty to strengthen the euro area and restore confidence in the common currency…“Germany sees the need in this context to show the markets and the world public that the euro will remain together, that the euro must be defended, but also that we are prepared to give up a little bit of national sovereignty,” Merkel said. Germany wants a strong EU and a euro “of 17 member states that is just as strong and inspires confidence on international markets.”

– Bloomberg article November 16, 2011

Three Card Monti

Just like the con (confidence) game Three Card Monte through which people have been swindled out of their hard earned money in alleyways and street corners all over the world for half a millennium, the previously sovereign nations of Greece and Italy have now officially been placed into the receivership of “technocratic governments” and are now in the final phase of their looting. It truly is sad to watch these proud nations whose histories form the very core of Western civilization be taken down one by one but what is even more nauseating is watching the corporate media pundits, Wall Street analysts and financial experts cheer the news because it is ostensibly “good for markets.” First of all, it doesn’t take a genius to see that the people that screw up the most get promoted and advanced in the Western world’s current political/economic structure. The primary reason for this is that there is a very serious agenda of TPTB and that consists on using crisis to consolidate power in a one-world government, headed by a global central bank that issues a global fiat currency. People have been saying this on the fringe for decades and have been called conspiracy theorists the whole time but if you look at how things are progressing today you’d have to be asleep to not notice that the guys in charge are completely and totally determined to bring this sick, twisted dream into place. That is why the agenda moves forward despite the repeated, desperate cries of the citizenry for them to stop.

Let’s take a look at Mario Monti, the “soft” dictator that has been thrust upon the people of Italy by TPTB. He is a member of the Bilderberg Group, he is the European Chairman of the Trilateral Commission (a think tank founded by David Rockefeller in 1973, see quote at the top) and is international advisor to none other than Goldman Sachs. This guy was put into place by design. Anyone in Italy that thinks they achieved a victory in by ridding themselves of Berlusconi you better think again. You just got the biggest insider, crony financial terrorist around put in charge of your country without having a say in it. Even for someone like me that expects these things, I am amazed by how badly Italy was just screwed. Speaking of the unreported coup that just happened in Italy I will let my friend Jared Dillian of the Daily Dirtnap add his two cents. From his piece today:

So I read recently that Italy wasn’t going to have elections because of “market crisis” or something like that, and I am the last guy who should be writing about this, since I know very little about political systems in any European country, for example, how can you just announce or not announce an election? Aren’t these things on a schedule? So already I don’t know what I am talking about. But I am worried about Greece and Italy that have chosen not to have elections to choose their leaders, I am actually quite concerned about that. You can’t use “market crisis” as an excuse to not hold elections. Even if elections take time and are messy and (most importantly) don’t produce the desired result, it is a part of gosh darn democracy, and if they are going to suspend elections for this, then they can suspend elections for anything. Like, say, pretend Mario Monti is a closet dictator and they just put a guy in there who is never going to hold another election again.

So this is a bad precedent.

This is way worse than a bad precedent but well said my friend. Oh and another thing. If you are looking at the gold market and wondering why it is so weak stop wondering. In my opinion, all you have to look at is Mario “three card” Monti (credit to Gerald Celente for that name). If I were anyone in Italy that cared I would be checking the gold in the vault every single day. I have zero doubt that Monti is letting the country’s treasure out the back door by the ton in the name of “global stability” and ECB bond purchases. The backroom deals that are happening right now at the expense of the people of Italy have got to be completely off the charts. As I have said many times before, the reason Europe doesn’t announce a solution is because there is no solution. They also know that the minute they announce massive monetization gold and silver will go no offer and the gig will be up. This is also why the FED hasn’t announced QE3 despite their desire to do so. So the strategy is to announce nothing, sell sovereign gold behind the scenes and perform all sorts of market manipulations behind closed doors. While the sheep in most nations will be completely unaware until way after the looting is over and then they are left with chaos and then a real dictator, the leaders of nations of China, Russia and others know exactly what is happening and will happily take Italy’s gold (and whatever Greece hasn’t already sold without telling anyone). I love how leaders keep coming out with stuff like “we need to stop freedom of speech and we need to manipulate markets and we need to take your sovereignty away to create confidence.” The worst part is people actually fall for this crap! On what planet does robbing someone, taking their freedom away and saying you and your children will be slaves forever inspire confidence?


How do you say “sucker” in German? No seriously, I want to know. I mean how about the quote from Merkel at the top. I mean did David Rockefeller write that speech for her. I love how politicians are now openly out there offering their countries sovereignty in the name of 50 up points in the S&P500. I seriously hope the Germans are buying Three Card Monti’s gold for their sake. After all, as Jim Rickards has stated they will never see an ounce of whatever gold they were stupid enough to store in NY. That’s all I have to say about the Germans. Ditch the periphery (and that includes you France) or go down with the ship. Gute Nacht.

The Ben Bernank is Superman

Banana Ben Bernanke is superman didn’t you know? Oh and on the side he prevents all economic downturns from ever happening in a single bound. It’s true. Didn’t you hear about the speech he gave in from of the military in Texas (what a sad joke). Yep, he was quoted as saying the following: "I'm not a believer in the Old Testament theory of business cycles. I think that if we can help people, we need to help people.” Wait, let’s do that again. "I'm not a believer in the Old Testament theory of business cycles. I think that if we can help people, we need to help people.” Good lord this man is a maniac and he is in charge of global monetary policy and the world’s reserve currency. Good luck to you if you don’t own gold.

As My Friend Tony Greer (if you aren’t getting his emails you’d better start) Likes to Say…Time to Hit the Links!

The Postal Service just lost $5 billion for the year. Did you know they employ 670,000 people?

Jon Stewart destroys the criminal bankster/political hack Corzine in one great clip.

Finally for the biggest joke of the day….U.S. banks. This article is a gem. It talks about how the big financial institutions don’t break out CDS exposure by region because it might scare people. How about this line. “As of Sept. 30, JPMorgan said it had sold $3.13 trillion of credit-derivative protection and purchased $3.07 trillion.” All good I guess! No one loses.

I DO know what the word for this in English is. PONZI.

Peace and wisdom,


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The Economist - 19 November 2011

The Economist - 19 November 2011
English | 108 pages | PDF | 45 Mb

download it here

Michael Pento on Full-Blown Bond Market Crisis in 2012 & Gold

from King World News:

With continued turmoil in global markets and gold remaining firm in the mid $1700s, today Michael Pento, of Pento Portfolio Strategies explains for King World News readers globally why a full-blown bond market crisis is coming in 2012 and how investors should prepare, “The European debt debacle continues to unravel and yet many investors fail to recognize the profound ramifications of taking the largest economy on the planet offline. EU 27, which has a GDP north of $16 trillion, is the largest export destination of some of the world’s fastest growing economies.”

Michael Pento continues: Read More @

South Africa’s Incredibly Shrinking Gold Production

Finding evidence to pop the talk of a gold bubble is much easier than finding a needle in a haystack. There are enough needles of evidence out there to fill a pin cushion. The latest Gold Demand Trends Report from the World Gold Council (WGC) contained two salient visuals of how the dynamics of the global gold market have shifted from the West to the East over the past 40 years.

Today we’ll take a look at supply, and tomorrow we’ll dive into demand.

This chart illustrates Africa’s incredibly shrinking gold production over the past 40 years. Africa's mine production was down by the continent's main producer, South Africa, which enjoyed a 100-year reign as the world's largest gold producer.

Big Changes for Global Gold Mine Production Over the Past 40 Years

At the height of South Africa’s gold mining empire in 1970, the country produced 79 percent of “free world” gold, according to the WGC. Free world does not include gold production from the communist bloc, which would decrease South Africa’s share to roughly 62 percent based on estimates. North America was the only other region to produce a significant share of gold, which was about 10 percent.

Over the past four decades, South Africa’s gold mining sector has been plagued by frequent labor strikes and a lack of necessary resources, such as water and electricity. In addition, South Africa’s production has suffered from a substantial decline in ore grades of gold deposits. According to the 2011 CPM Gold Yearbook, the country’s average ore grade peaked around 12.49 grams per metric ton in 1968 and has been on a steady decline since then. By 2009, the average grade of gold mined fell below 2 grams per metric ton, an 85 percent drop.

Lower ore grades require a miner to chew through more rock to recover the gold. A South African mine today would have to move roughly 10 times the tonnage of rock to produce the same amount of gold.

While mine production in the 1970s was a one-man show, today’s global mine production is a collective effort. No single country supplies more than 14 percent of the world’s total, according to the WGC. The WGC says, “This lack of concentration serves as a buffer against supply risks stemming from individual countries, a facet of gold that differentiates from the other precious metals, which have significantly higher production concentration.”

The biggest growth over the past 40 years has come from China, which has seen its mine production rise from obscurity to become the world’s largest producer. Interestingly enough, this production increase hasn’t been able to keep pace with the country’s insatiable demand for gold.

For the rest of that story, tune in tomorrow when we’ll discuss how China’s demand for gold is reshaping the industry.

See our interactive map to learn more about the top gold-producing countries of 2010.

Gerald Celente - Get all your money out of the Banks Now

Gerald Celente - Goldsek Radio - 16 Nov 2011 : they are going to keep interest rates to zero until 2012 - 2013 , and what does that mean ? it means if you have money in the bank you are wasting your time by keeping it in there cause you are not getting anything in return , you used to kep up with inflation , not anymore , they need to keep interest rates to zero so the Ponzi scheme could keep going , I am in Gold and Silver and mostly Gold and that's where I'll stay ....

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Senator Coburn Presents "Subsidies Of The Rich And Famous"

As the super-committee seems more and more likely to hit a brick-wall, we present with no comment, Senator Tom Coburn of Oklahoma's 'helpful' prose:

Dear Taxpayer,

Americans are facing tough times. Millions are still out of work. Wages remain stagnant, while health care costs, tuition, and other household cost continue to rise. Many homeowners owe more for their houses than they are worth.

With families across the country struggling to make ends meet during these economically trying times, many are left with few options so they are turning to the government – some very reluctantly – for assistance. The government safety net has been cast far and wide, with almost half of all American households now receiving some form of government assistance. But most taxpayers will be asking why when they learn who is receiving what.

From tax write-offs for gambling losses, vacation homes, and luxury yachts to subsidies for their ranches and estates, the government is subsidizing the lifestyles of the rich and famous. Multimillionaires are even receiving government checks for not working. This welfare for the well-off – costing billions of dollars a year – is being paid for with the taxes of the less fortunate, many who are working two jobs just to make ends meet, and IOUs to be paid off by future generations.

This is not an accidental loophole in the law. To the contrary, this reverse Robin Hood style of wealth redistribution is an intentional effort to get all Americans bought into a system where everyone appears to benefit.

“Everybody can have a free lunch,” explains Howard Leikert, supervisor of school nutrition programs for the Michigan Department of Education, where a new federal program is providing all students, regardless of their families’ incomes, free school meals in select areas.

But not everyone can have a free lunch. Ultimately someone must pay for each of the lunches being given away. Furthermore, not everyone needs a free lunch. The real result of serving everyone a piece of the pie is less is leftover for those truly in need.

Some economists argue “if we think that the rich are getting too much of the economic pie, then they should be taxed more.” This is no different than taking a dollar from one pocket and putting it into another in the same pair of pants. We should never demonize those who are successful. Nor should we pamper them with unnecessary welfare to create an appearance everyone is benefiting from federal programs.

Even in these difficult times, the United States remains a land of opportunity and not everyone is in need of government hand outs. The income of the wealthiest one percent of Americans hasrisen dramatically over the last decade. Yet, the federal government lavishes these millionaires with billions of dollars in giveaways and tax breaks.

The government’s social safety net, which has long existed to catch those who are down and help them get back up, is now being used as a hammock by some millionaires, some who are paying less taxes than average middle class families. Comprehensive information on the full range of government benefits enjoyed by millionaires has never been collected previously. This report provides the first such compilation. What it reveals is sheer Washington stupidity with government policies pampering the wealthy costing taxpayers billions of dollars every year.

These billions of dollars for millionaires include $74 million of unemployment checks, $316 million in farm subsidies, $89 million for preservation of ranches and estates, $9 billion of retirement checks, $75.6 million in residential energy tax credits, and $7.5 million to compensate for damages caused by emergencies to property that should have been insured. All and all, over $9.5 billion in government benefits have been paid to millionaires since 2003. Millionaires also borrowed $16 million in government backed education loans to attend college.

On average, each year, this report found that millionaires enjoy benefits from tax giveaways and federal grant programs totaling $30 billion. As a result, almost 1,500 millionaires paid no federal income tax in 2009. Fleecing the taxpayer while contributing nothing is not the American way.

Americans are generous and do not want to see their fellow citizens go without basic necessities. Likewise, we expect everyone to contribute and to demonstrate personal responsibility. Government policies intended to mainstream wealth redistribution are undermining these principles. The tragic irony is the wealth in these cases is trickling up rather than down the economic ladder. The cost of this largess will thus be shared by those struggling today and the next generation who will inherit $15 trillion of debt that threatens the future of the American Dream. These consequences are the results of shortsighted spending and tax policies like those outlined in this report that should be eliminated.

Tom A. Coburn, M.D.
U.S. Senator

Coburn Taxes

Coburn Taxes

Flag this message "The Entire System Has Been Utterly Destroyed By The MF Global Collapse" - Presenting The First MF Global Casualty

this on the heels of MF Globals stealing all the customers currency assets. some in the 6 figure and no promise of getting their money back, plus losing their positions they planned.. suggest you take this person's advice, and if you have 4 O1K plans, take it out, pay the taxes and protect what you can

Submitted by Tyler Durden on 11/17/2011 - 14:19

It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator. The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy... The futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism... Finally, I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform. So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy.