Home » Posts tagged 'kevin muir'

Tag Archives: kevin muir

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Post Archives by Category

High Debt Levels Rant

HIGH DEBT LEVELS RANT

I am going to break from regular market commentary to step back and think about the big picture as it relates to debt and inflation. Let’s call it philosophical Friday. But don’t worry, there will be no bearded left-wing rants. This will definitely be a market-based exploration of the bigger forces that affect our economy.

One of the greatest debates within the financial community centres around debt and its effect on inflation and economic prosperity. The common narrative is that government deficits (and the ensuing debt) are bad. It steals from future generations and merely brings forward future consumption. In the long run, it creates distortions, and the quicker we return to balancing our books, the better off we will all be.

I will not bother arguing about this logic. Chances are you have your own views about how important it is to balance the books, and no matter my argument, you won’t change your opinion. I will say this though. I am no disciple of the Krugman “any stimulus is good stimulus” logic.

The broken window fallacy is real and digging ditches to fill them back in is a net drain on the economy. Full stop. You won’t hear any complaints from me there.

Yet, the obsession with balancing the government’s budget is equally damaging. In a balance sheet challenged economy the government is often the last resort for creating demand. Trying to balance a government deficit in this environment (like the Troika imposed on Greece during the recent Euro-crisis) is a disaster waiting to happen.

Have a look at these charts from the NY Times outlining the similarity of the Greece depression to the American Great Depression of the 1930s.

…click on the above link to read the rest of the article…

 

 

The Pricking of the Canadian Real Estate Bubble?

THE PRICKING OF THE CANADIAN REAL ESTATE BUBBLE?

First of all, sorry for the lack of posts lately. Long story, but rest assured, I am back on track and the old ‘tourist regular postings have resumed.

Next up, today I will write about Canadian real estate. I know, many of you find that about as exciting as watching Winter Olympic curling, but give me a chance – after all, we Canadians have a way to make even curling entertaining.

The Canadian real estate bubble

As most everyone knows, over the past decade, Canada has experienced a massive real estate boom.

And for the past half dozen years, we have had to endure all the proclamations from hedge fund managers about the coming great Canadian housing market crash. Although there has also been some Canadian skeptics, the majority of these doomsdayers have been American managers who, after experiencing their own real estate crisis, can only imagine the next “big short” occurring in Canada.

These managers often simply took the US playbook and applied it to Canada, never considering that the US situation might be different. Nor did they factor in the possibility that Central Bank reaction functions might have changed since the Great Financial Crisis.

Don’t mistake me for some sort of unapologetic delusional Canadian housing bull. I think prices are nuts. But what I think is even more insane is the amount of balance sheet expansion from global Central Banks. We must always remember – the Canadian real estate bears are fighting against the authority that has the power to dictate the quantity of the asset in which we price all these other assets in.

…click on the above link to read the rest of the article…

Oh Canada: An Economic Experiment

http://themacrotourist.com/images/2017/09/BoringSep1217.png

It seems like the only time Canada makes the news is when America elects some right wing President the Hollywood elite don’t like, and they all threaten to move to Canada. We are usually too polite to say something, as it is often clear the Americans are in the midst of quite the family squabble, but what makes these Hollywood shmoes think we want them? Leah Dunham? Alec Baldwin? Whoopi Goldberg? It’s not like we have an open door policy for Hollywood complainers. But while we are on the subject, we would like Seth Rogen back (tell him our pot laws are about to loosen up, that should get him), and my daughters have asked to put in word for the two Canadian Ryan’s to return home (Gosling and Reynolds). America, you can keep Justin Bieber, Howie Mandel and William Shatner.

http://themacrotourist.com/images/2017/09/SethSep1217.png

But that’s often the most news coverage that Canada receives. And in terms of economic news, Canada has trouble making the B segment on even the most boring day of financial network TV. That’s a real shame because there are some interesting economic experiments happening in Canada.

There are two major differences occurring with Canadian economic policy, and many experts are watching with great interest how they play out. The first is on the fiscal side. Canada was at the forefront of electing a leader who promised more infrastructure spending. Before Justin Trudeau, most politicians were running on platforms of promising to balance the budget and cut spending. But Trudeau’s win ushered in a new worldwide wave of politicians advocating the opposite. The second interesting development is Canada’s monetary policy. Bank of Canada Governor Poloz has taken a much different approach than most Central Bankers.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
Click on image to read excerpts

Olduvai II: Exodus
Click on image to purchase

Click on image to purchase @ FriesenPress