Hot money is not strong money.
Opening up a gambling house the size of BC is not a long term strategy.
Being a primary beneficiary of a credit explosion to prevent an economy (China) from going in the gutter is not sound policy.
Finally, taking credit for something that is not even happening and repeating it over and over and over… does not make it real.
If you think the BC economy is strong, time to lay off the bong, the vape pen or whatever you are on. Put the bottle down, perhaps even the crack pipe. We do not have a strong economy we have the same thing everyone else has. A gambling problem. A big one.
Only thing worse than a huge gambling problem?
Using debt to spin the roulette wheel.
Risk Management 101 DON’T BORROW MONEY TO GAMBLE.
Government Risk Management 101: BORROW AS MUCH MONEY AS POSSIBLE TO GAMBLE.
Only thing worse than that?
When the house is taking the ‘profits’ and sending some of it to another gambling house (Cities) and another gambling house (Feds) for them to gamble it away and use more debt to hide losses. This always ends in unicorns riding on rainbows carrying everyone to the promised land.
I think it is obvious by now that if a politician is saying something 99% of the time it is the exact opposite that is the truth. Anyone with a calculator that needs to run a press conference with a podium that says ‘Strong Economy’ on it can come up with figures that fit the narrative. Our strong economy is about as clean as our LNG Fracking.
(just think in 30 Letters, she managed to lie 2 TIMES!)
Both fortunately and unfortunately for the BC economy the truth is bubbling to the surface in many ways.
Something doesn’t add up. Why is it that BC is magically the only jurisdiction on the planet that is hiring, everyone is working despite the slumps in virtually all sectors as we are being told?
What product exactly is it that we are offering that ‘no one else’ produces?
As in, if demand for all that we produce has dropped GLOBALLY who exactly is buying what we need strictly and solely from us… but no one else?
Our cost to produce and ship many things is way higher than most regions so we really have no competitive advantage. Especially getting things to those not so ‘hungry’ Asian markets.
Since we are in a global economy our customer base is accessible to us as anyone else since no trade/tariff wars have started yet (or were not happening over the last 5 years of our ‘economic boom’) Our LNG, Timber, Oil, Gold, Copper… whatever is the same here as everywhere else.
(An index chart will take a basket/group of commodities and track their prices) Of note look how ‘strong’ prices are for the same time frame our ‘strong’ economy has been so, well, strong.
Most items are priced in USD so there is no currency advantage. Sure, our hydro rates, for the most part are lower/lowest with sweetheart deals to companies that make big contributions to BC Liberal campaigns, but our cost of labour vs. a Middle Eastern producer (and their direct pipelines vs our cargo shipping) is way cheaper so that is a wash. Our increasing (as in massive increase) Hydro rates are dropping disposal income (local demand) and giving that money to a net loser (BC Hydro) and taking it from producers (like the whole purpose of the Carbon Tax)
Across the commodity sector we have seen massive drops in prices. Gold, Silver, Oil, Nat Gas. How these magically don’t apply to BC, I am still trying to understand.
Apparently debt is security itself, not just a security for the debt holder. Only in poli-tricks! Doesn’t that just make you feel ‘secure’? I will leave out all the other debt sources, like credit card, mortgage, municipal, federal, student loan, car loan, furniture loans, because we know they don’t matter in a ‘strong’ economy. Debt EXCEEDING GDP is, of course a good thing.
That said, lies can be hard to understand until you do your homework. Has there been an increase in BC or global tanker traffic? Rail car traffic? Nope.
So this really leaves us with domestic demand. Guess what? That has not picked up either as the rest of the Provinces (we are told) are hurting bad (but we are not)
Here is the best part for those of you who are seeing through this lie already and perhaps have done so for a long time: It is only going to get worse and the complete lie will be exposed for what it is.
China is going to stop what is the only thing that has kept our economy ‘strong’ and that is hot money. Gambling money. Real Estate get our money the hell out before it becomes less valuable money.
People’s Bank of China hit F9 on the keyboard and magically trillions appear out of nowhere money that goes into BC Real Estate money.
This was a fun ride, but just like every roller coaster, it must come to the very bottom before it stops. China is cracking down on money leaving the country.
They actually started this well before the 15% tax on purchases the Clark government put on to ‘show the people they cared’ They have done a lot more since the tax was put in also.
This was an easy strike against the clueless NDP who said nothing about this issue until some data algorithm told them it was a hot topic as the NDP were too busy looking at their own house assessments just like the BC Liberals.
How their ‘leadership’ walked right into this trap is very curious to me. But they did. As I a have said, typically what people see is that some law/new tax was the ‘turning point’ but the fact is the decline was already starting. NONE of these parties can stop or start this global force.
China is having failed bond auctions. Translation: All that debt they were issuing to keep themselves afloat… no one wants anymore. Just like most global debt, the buyers are starting to look into the debt of the issuers. I warned about this a year ago in the presentations I was doing, that this time was coming. And here we are. My thought is that the Chinese government knew this the whole time. They witnessed how Lehman destroyed global economies, which happened because of Sub-Prime and massive debt fueled housing boom.
Then, someone pulled the plug (started asking questions) and this is the same thing that is happening now. Again, if there are those of you that want to play the race card, be my guest, just realize this is happening with EU money also wanting to get out it is just that Chinese money has been the top source vs other countries. That’s all. There is not a single race that escapes a housing market implosion globally or a bond market implosion globally.
So, even if the Chinese wanted to keep the game going (which they don’t because their housing market is imploding) they can’t.
Usually when making statements like the above, you want to find comparables. A region we can do that with is Australia. Very much resource based with some cities like Vancouver/Victoria in Sydney etc. Yes, house prices in Australia have soared. Yes, same thing most of the money is hot money from China as the Chinese scrambled to convert out of the Yuan who’s purchasing power was dropping by the day and into an ‘asset’ that was appreciating in value, like, Real Estate. Price increases were also happening due to the low rate environment (which is over now)
Now, look at another similarity. As in that bank stocks are really the only thing holding up the ‘economy’
What happens when people start realizing the commodity bubble, collapse and then recovery is perhaps a ways out into the future? What happens when ‘investors’ start to wonder what will happen to house prices in a rising rate environment, a low commodity demand environment and an environment where hot money taxation is happening? (they are taxing hot money in Australia now also) What happens to bank stocks in Australia, Canada etc. when people realize they are in trouble for commodity loans and housing loans? (See Italy right now and in the near future as to what happens to non-performing loans in a crisis)
This brings us to our next item for Canada and the Globe:
What happens if Gold and other metals/commodities still have not bottomed and still have a ways to go before they do? (and they do)
If such is the case, how long will this take and what will be the fallout if this takes more time than the bank loans will let them? When will we truly know the extent of High Yield energy debt on bank balances?
What do they do with all that money that was lent out in USD at low rates when BOTH rates are rising AND the USD is rising… simultaneously?
I am sure a lot of you reading this ‘know’ that gold has bottomed. It hasn’t. Dozens of you know that privately you have been saying it has bottomed for years now ( I could say four years now) I can’t recall how many people I said to wait to buy gold because it had much lower to go. Well, people were buying at $1500, $1400 etc. to ‘prove me wrong’ and here we are $1130 (and headed lower). And no, the USD did not crash (and it will still go higher) and no the stock market did not crash (it will still go higher medium to long term) To those who said ‘they can’t raise rates while I warned that they will raise rates, they did, that happened.
Beliefs and price action are 2 different things. Just like a ‘strong’ economy based on trade and actual solid numbers vs. statements by politicians in a constant re-election campaign.
Why do I mention this? Because we spend most of our time listening to people who are either constantly wrong or constantly lying. In the end, this is how we ‘get what we deserve’ so to speak.
Oil. Isn’t it amazing how we have a ‘strong’ economy despite total global demand collapse since early 2014? Is it just BC that is ‘booming’ and using all the energy for the rest of the world?
US 10 Year Benchmark Interest Rates. We are at multi-cycle lows. Rates are going to Keep Rising. That is a fact that people need to start thinking about. They are rising in Canada also (of course to put a lid on ‘domestic’ demand?) So those of you thinking of buying or thinking of not selling and waiting it out, just think, if your plan is to own your home for 5-20 years this is an issue. This will be a primary issue for our ‘booming’ economy, because, this is in fact our economy, hot money and a hot housing market.
Gold. We have already went below the cost to produce number around $1200 +/- As I have said for years, gold will make it’s way below $1000 USD/oz.This will be happening soon. We see already companies bracing for this issue moving forward. If you are in this sector as a worker or investor, watch out. What people don’t understand is these high paying jobs people are looking over their shoulder for a pink slip already.
They see what happened in the patch. Maybe they will be shutting their wallets for some time?
That does not help a ‘strong’ economy. This is what they call animal spirits. As it is always confidence that prop prices in anything. Final target as far as price action could be in the $800USD/oz range +/- before the low. Gold will be heading lower into the May 9th Provincial Election. Perhaps Christy will have to change her tune, but it is only about 5 more months of lying. Since she has been doing it for over a decade a few more months won’t be an issue.
(not to worry in BC, we escaped all this global action, because the sign on the podium says so) The above is a good sign of the ‘demand’ in this sector and is in near lock step with prices.
As rates rise and the USD rises, most will shift asset purchases to stocks or real estate in the USA. For someone who holds lots of Yuan, this is better than CAD Real Estate since US Real Estate price fluctuations (declines) will be muted somewhat by USD appreciation vs the Yuan. The other sector where money will go is US Stocks because they are more liquid. Retail investing has barely started here and as people see the Equity market rise (yes with some pull backs) this will attract more money. The other issue is there is roughly $10 TRILLION borrowed by foreign countries in USD under the assumption the USD would stay low (the charts tell us this did not happen) and that rates would stay low (now rising) this increases the cost of borrowing so EVERYONE is scrambling for USD.
The advantage will be in buying USD priced stocks in the USA to get returns on both. Chinese (and all foreign) investment/speculation money will turn to US Stocks and USD especially as the EU implodes (see Spain and Italy and France) ((and Germany, Greece, Portugal)) This will send capital to the USA and they will have to convert for rapidly declining Euro to USD. So, if you were thinking that the USD or US Shares would collapse and citing ‘manipulation’ every time the market goes to the opposite of what you thought or read by some expert, this is the true reason why. The big wild card is what if China and USA go to war? (odds are roughly 90% this happens) What if the Chinese government tells people to ‘be a patriot’ and sell ‘foreign assets’ in ‘traitor countries’ like USA? (and it’s war buddy Canada) Could this be a Chinese weapon of financial destruction???
Now, this will have an effect on our largest trading partner as people shift to China for cheaper products and USD priced items become less attractive. So, Canada has to deal with declining demand from China AND the USA… at the same time, with a rising rate environment, lack of demand for government debt, AI taking jobs, refugee crisis and pension crisis. These are problems that are a 100% mathematical death trap. Lying and saying ‘strong economy’ is just that, a complete lie. A Trump tax cut won’t do anything either if the USD keeps rising.
Stocks: No need to say much more, you can clearly see the trend, and now you have the explanation as to ‘why’ this happened and will continue to happen. When it is all said and done, the dow/ S&P will likely double before a big top is in. This is a DIRECT INVERSE to government debt which will implode and take pension funds with it!
“How if stocks double will this hurt pensions’ Well, simple, because governments wilL FORCE pension funds to buy government debt, if no one else will and to do so, they will sell equities. Governments and Pension funds are controlled by the same entity: The GOVERNMENT. Isn’t it odd the BOTH Governments AND pension funds are completely insolvent? We see this happening with CALpers in California (selling equities) and New Jersey (pensions being forced to buy government debt as their state spirals into bankruptcy)
So. “What does this have to do with BC” well the above are signs of big problems. I will guarantee the ‘opposition’ NDP have no idea about any of the above. They are still pushing the shale dream that is completely dead. Make no mistake, the NDP policy is EXACTLY THE SAME AS THE BC LIBERALS. They want Electrified LNG. They want ‘more oil to port‘ They believe this is the ‘only solution’ when it is not. ALL deals are between? A BUYER AND A SELLER! Tell us please, where the demand is coming from? They are pushing ‘Fight For $15‘ which will kill jobs as ALL companies look to AI for replacements to make up for soaring business costs.
Global taxation is at all time highs. Guess what? They need more! That is why the Carbon Tax is coming.
That is why the mayors of big cities want ‘more taxation power’
These taxes are KILLING demand globally. The debt implosion is killing demand globally. The rising rates will further destroy liquidity, especially in a globe reliant totally on low rates.
What amazes me is the claim that ‘temperatures are rising’ (which they are not because the data was faked)… but taxes have been rising the whole time and are at their highest of all time… so a rise in taxes will make temperatures fall?
What if we are in global cooling? (as all evidence that is not faked suggests we are)
What if temps fall instead of rise to the ‘to keep it under 2 degrees rise that will kill us all we need a carbon tax’? Do we get a refund on the bogus taxes we were charged?
Or does it just try to make government and big energy deficits a little less worse than now on the backs of taxpayers? We are told that either cap and trade or a direct tax on carbon ‘won’t effect the economy’ because ‘BC has had a tax and it is a ‘strong economy’ so everyone is in on the ‘strong economy’ act. Yet it is clear that both tax styles will crush demand as PRICE INCREASES ON GOODS DECREASE DEMAND which is economics 101
Economics 101 for politicians: Price increases increase demand!
Why does nothing make any common sense? Because it is a common lie. Yet here, from them despite them saying ‘this won’t increase prices’ it in fact, does increase prices. Hypocrisy at it’s finest. If you consume things, this affects you. I’m guessing you fall into this boat.
PASSED ONTO CONSUMERS= NOT PASSED ONTO CONSUMERS
For some reason people still believe that Shale and Fracking are the way to go. When will Canada wake up, even if we wanted to be on this boat… we missed it. Basics of demand and supply tell us we missed it. If you have a job in Oil and Gas or mining, sorry, I am not against your livelihood. I am not against you working. I don’t say BS like you have a ‘dirty job’ vs. ‘clean jobs’ and not tell people about the dirty money involved in ‘clean’ jobs. I am only pointing out realities that we ALL must face together.
I believe the only mystery buyers for Electrified LNG (which I predicted would happen a year ago in this video along with Site C being approved by JT and the pipelines) is super/quantum computers and massive data centers. Data Centers are ALREADY using Nat Gas for electricity. Other than that, there will be no new demand source. Think also that they are wanting to export more oil, but have this plan in the works to get rid of cars? One tiny baby little question is…. Where is the $90 Trillion going to come from? That’s right, you, via carbon taxes.
Decreasing Demand = Increasing demand
I also stated that Carbon Taxes will be the primary subsidy to the Energy Industry moving forward and legislation is being passed just as I suspected in this regard. Don’t want to say ‘I’ to much to prop myself, but I have yet to see anyone else talking about or predicting this stuff.
Shale is toast. I could go on, but just read this link here, it explains it better than me.
What is the reality? As the hot money dries up from China, commodity demand/prices drop (USD Rise), people (workers) are replaced by AI, Pension bills come due, the Bond Market implodes thus increasing broke government funding costs and Real Estate enters crash mode… there is no strong economy. In fact, there never was. It was a gambling economy. It is an economy going up in a big pile of bong smoke.
So what is their solution? As in, what have the Political and Corporate Big Oil, LNG elite drummed up together? CARBON TAXES which gets the government MORE MONEY to lose from you and they can shift that money over to the energy/mining sector to bail them out!
They MUST bail them out because BANKS are underwater on billions in investments. What happens if banks lose money on those loans AND real estate loans? You pay of course.
Carbon Taxes will dry up more liquidity.
Carbon Taxes will tell small businesses to stop expanding.
Carbon Taxes will stop medium size businesses from expanding.
Anyone who tells you the opposite is a complete liar in every way and should never be listened to on any aspect of economics or the environment for that matter.
Energy Demand is NOT picking up so it does not matter how many pipelines we build to give a bump to near term GDP so politicians can get re-elected.
Site C is not needed at all.
It is definitely not needed to create a carbon tax bailout for ‘clean’ LNG. Carbon Taxes are coming to get rid of First Nations tax exemptions also thereby increasing government revenue when GST and PST are eliminated for an all encompassing government forced carbon tax which will NOT be tax exempt.
Rising property taxes for broke cities are coming.
How else will they make up for the lost revenue in Real Estate transactions?
As the pension crisis picks up steam, get ready for soaring (yes more than already) property taxes.
I LOVE the fact that they are telling us Mining and LNG are getting crushed… but of course we are still a ‘strong economy’
BC Hydro commercial demand is so ‘high’ we are losing $3.5 BILLION a year right now. Luckily we are not still paying IPP’s massive amounts of money for power that isn’t being used. Or wait, we are and will be, for decades.
But of course giving $300 MILLION in bill payment breaks… to an industry that is
I checked my politicians dictionary. Little did I know, right beside struggling and declining it had the word STRONG just in case you were wondering.
Rising water, hydro, MSP, ICBC rates are coming. They are broke. You better start to understand this. We all better wake up and start calling Clark and the Federal Government on this lie. We better wake up before the NDP does the EXACT SAME THING here as they did in Alberta.
Part of the BCNDP jobs plan? Give more money to Bankrupt BC Hydro for useless wind turbines. That’s it.
Are any of these people looking at GLOBAL DEMOGRAPHICS OF THE FUTURE in their forecasting? Nope! Is anyone telling you the truth about Canada, USA, EU’s complete collapse in population growth?
Is the ‘humanitarian’ crisis really a self generated bombing campaign ‘crisis’ to fix a demographic crisis?
What is the cost of blowing up countries full of oil and resources that just so happen to be the ONLY countries with increasing birth rates and importing those people (on your tax dollars) to countries with massive declines in birth rates? (there is not a single western country economy without the exact same issue as the headlines below, go ahead, look for yourself)
How will the bond market respond to BILLIONS in importing, health care etc. costs for people who will not even have jobs for their entire future in this country as the jobs they would get are being phased out by artificial intelligence?
Is the long bond market forcing rates higher because they look at the fact that no one will be working in these countries t0 produce taxes anyway, and even if they were going to be working, the host countries aren’t having enough assets/sureties to pay off the long date debt? Is this why long term debt is getting absolutely crushed in the bond market? Guess what? YOU will be forced to pay for their idiocy on this one.
We are in for a world of hurt. You can shoot the messenger all you want. You can ‘assume’ that because the signs are just emerging that this might not happen. You can say the ‘people have been saying this for years’ classic line. Yep, they also said the USD would crash, that the US Markets would ALL crash, that gold would skyrocket to $5000/oz. People have said a lot of things. People also lie and get things wrong. People also lie in their own self interest.
One thing doesn’t lie. Math and Charts.
One thing that always lies: Politicians looking for re-election.
The ‘strong’ economy line is getting weaker by the minute. It will get progressively worse heading into election day. Don’t just assume putting in the Orange party will fix things, it won’t. Sadly, it might even make things worse (See Alberta and yes I know they inherited a mess, but what did they implement to solve it? More Taxes. Nice Work!)
The easiest thing to do is cover your eyes and mouth and pray. This won’t solve anything, the only thing that will is waking up, seeing through the lies, preparing and sharing information with others.
Knowledge is Power.
Share the Knowledge.
Increase our Power to solve these problems!