No Bubbles here… Move along!

[Variable81]

I may be wrong, but pretty sure I’ve read numerous times here on TAE before (and perhaps in a book about bubbles I had the pleasure of reading, Devil Take the Hindmost: A History of Financial Speculation) that, paradoxically, you tend to see rising prices right before a bubble pops/deflates. Usually it’s in conjunction with falling sales, which we seem to be seeing in Canada, at least according to Garth Turner (not that I hold him to any high degree of esteem):

Fact is, property values outside of Calgary, the weird steamy bits of Van/Lower Mainland and the manic middle market in the GTA are no longer robust. There’s a condo glut in Ottawa and Winnipeg starting to impact the whole market. Halifax is cooked. Montreal prices are comatose. Vancouver Island and Saskatoon are awash in listings. Yesterday I told you about the new housing market in the wider Toronto area, where sales have fallen by up to 50%.

All of this is happening when you can still get a variable mortgage for 2.4% or lock up for a half-decade at a point more. Does anyone seriously believe prices and sales will romp higher because rates fail to rise, or even drop by a quarter? Cheap money didn’t save the American housing market after prices had roared above income levels. It didn’t work in Japan or Spain or Holland.

https://www.greaterfool.ca/2013/10/23/new-lesson/

Cheers,
Variable

[gurusid]

Hi Folks,

Oh yes:
From ZH JPM Sees “Most Extreme Ever Excess Liquidity” Bubble After $3 Trillion “Created” In First 9 Months Of 2013

Submitted by Tyler Durden on 10/28/2013 15:04 -0400

…
To summarize:
In just the first 9 months of 2013, DM countries have injected $1 trillion in liquidity sourced exclusively by central banks; EMs have injected another $2 trillion driven by bank loan demand.
The total global M2 is over $66 trillion, growing at an annualized pace of over 6%.
The amount of excess liquidity, i.e. the infamous “liquidity bubble” in the global fungible system is “the most extreme ever in terms of its magnitude”
And that’s really all there is to know: the music is playing and everyone has to dance… just don’t ask what happens when the music ends.

“…just don’t ask what happens when the music ends.” Which is exactly what TAE has addressed in their ‘Century of Challenges/World of Change’ presentation.

Or… will they allow the currency to ‘devalue’ so that you’ll need all the ‘liquidity’ just to buy a loaf of bread. And no, I’m not talking ‘inflation’ here, but some perverse systemic manipulation unlike anything ever done before. I mean what’s to stop them pumping the QE handle forever until those that benefit own everything. Then they just reset the game by issuing a ‘new’ currency system, cancelling all ‘their debt’, but transferring all the other ‘private’ debt. If the system is completely rigged, with strange ‘flash crashes’ and ‘flash corrections’ on the stock markets, with commodity markets manipulated who knows where this is going? I think humanity has reached a historical disconnect: this is NOT Rome. Rome did not have (to my knowledge) high frequency trading, flash crashes and POMO (permanently open market operations). Maybe I’m just too stupid to understand all the ‘market fundamentals’ or to see the obvious that the ‘system’ will just crash; but something tells me that ‘they’ who are running the ‘show’ will not let that happen until they are good and ready. And when they are, I think that we will all be surprised… :unsure:

L,
Sid.

[linadavid]

Amazing post.

[kendalljett]

“Good fences make good neighbors” https://www.greaterfool.ca/2013/10/23/new-lesson/ wordle unlimited

[Author]

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