Quote:
Originally Posted by 4444
what's interesting is that Canada is in a real bind.
It's economy was sluggish before oil shit the bed, now it is in real trouble. There's even talk about interest rates being cut - i'd be amazed to see that.
trouble is, US is growing, Canada isn't. US raises rates in mid 2015, Canada must follow suit or it's currency will fall (even further), but a raise in rates will hit an anemic economy.
sadly, the currency already sucks over last 12 months. We may have a beauty coming to Canada, asset deflation and price inflation.
So whilst Vancouver may claim to be 'different', i'd rather be liquid and free when in the face of falling asset prices and raising prices in the stores.
I was recently back in vancouver and I was shocked at how expensive food is in the stores. It's still relatively cheap to eat good food out, i'll admit that. Spent time in the US, was cheap as ever down there.
always be a contrarian. Last while was the time to rid debt, not grow it. If deflation happens, ppl are fucked. It's already happening in Europe - people are fucked here (Europe is fucked, but that's a different story).
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i know this is going to sound cynical, but people only cut debt when they are forced upon. when things are good, or appears good on the surface, people will just pile on more debt to indulge. take a look at America before 2008.
the situation about van real estate is obviously very tenuous. from an economic point of view, the fundamentals like income or jobs does not support the prices, yet we know there are short-term factors like offshore money that is distorting the market. locals here obviously piled on so much debt which contributed greatly to the RE frenzy as well.
canada in general is in a precarious situation given the dependence on energies and commodities export. before the oil crash, people still had high hopes for 100k+ jobs without even a high school diploma. now that oil is gone, so is copper, coal and all the rest, mining and oil & gas which has been the essential the bedrock of western Canadian economy is severely curtailed. people who think the oil rout in Alberta will be isolated to Alberta is in a epic illusion. suncor's 1000 job cuts is a wake up call the good times are over. if you got no education or any relevant experience in the knowledge-based economy you are f***ed.
"the market will remain irrational longer than you can remain solvent," keynes famously said. i don't know what the catalyst will be for vancouver re will be, it could be the oil crash, it could be a U.S. rate hike, or it could be a chinese economy implosion, who knows? however, i wouldn't want to be anywhere near Vancouver when the ship crashes; it is going to be ugly.