Random Opinions:
With out-of-control central banks printing money at astronomical rates and record high unemployment (not to mention fear), who will suffer the most? Very likely candidates: Small, local businesses, the Young(ish) and those in entry level, service sector jobs.
Perhaps the drop in condo sales is signalling the removal of first-time home buyers from the market? As the CMHC tightens their lending (on insured mortgages), this pain point will increase.These first-time buyers are often motivated folks, on the first rungs of the economic ladder, but tightened lending + an “unessential” status, are putting this demographic in danger.
**Separately, the increase in detached home sales ($1M+) during the shutdown tells us something about the resiliency of certain sectors and also highlights the importance of learning valuable skills in this Brave New World…
The shutdown was touted as the cure to an actual disease. Closely followed by a second cure (to the government created financial disease): Fiscal stimulus, in the form of CERB cheques + CRB proposals + various other executive interventions.
The latter cure may prove to be worse than either disease; at least to anyone without property holdings, hard assets or a “secure job”.
When money is created out of thin air (governments have no money of their own!), inflation occurs; costs of consumer goods increase and the value of hard assets soar. Combine these factors with the current unemployment trend + a global recession, and it may be many years before first-time home buyers ever get to step upon an overpriced ladder.
I sense inflation is already occurring gradually (have you bought celery lately, paid tuition or procured pressure treated lumber?) I’m also preparing for it to happen suddenly in the next couple of months/years; imagine the supply chain bottlenecks when all global economies finally race to re-open, full-throttle…
The government has no real ability to conjure up a cure to their manufactured crisis. This fact however won’t stop half of us from stomping our social media feet, waiving signs and/or petitioning the Chamber for a remedy. With luck however, Parliament might choke on it instead!
Haha, just kidding; Talk soon.
Randall Reashore
Ontario Assets
Stay sane, stay ready and start planning now
for whatever comes next!
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