Global Financial Crisis - Canada's Financial Outook
Recession is here! (We will refer to it as the 'R' word because it is a bad word to say).
THE PROBLEM
We are looking at a "severe and virtually unprecedented blow to the financial system". We were all thinking this is a housing bubble but the real problem and origin was the credit bubble that was developing since 2000. Policy makers and financial institutions relaxed and let this happen.
THE ACTIONS
We seriously believe that the problem cannot be solved with the actions taken. The so called "bailout" has failed and many are already looking at it with a suspicious eye. Most of it is a joke.
If the problem is really a $trillion or so dollars (from what they know today), what is $700 Billion going to do anyway? "It will restore confidence", they say! That's BS. Are all of us really that blind? All this DEBT is hanging above OUR OWN HEADS!!! We are BAILING OUT their own mess and their decisions!
What truth can restore my clients' confidence? "Your property will most likely go down to 1984 and 1990 levels".
Do you remember what happened then? Let me refresh your minds...
Homes had increased in value and fell back to old values within a few months. Now... if you say this won't happen, think again! It happened already twice! Why not this time around?
It also happens every day in Commercial transactions. Residential will follow suit. Mark my words... By the end of 2009, many properties in Toronto will see a 30-60% drop in value. There will be too many foreclosures and a huge increase in bankruptcies.
THE FUTURE
The future looks particularly bad, especially over the next 2-3 years. The market needs to stabilize.
When will you know the market has reached the bottom? (also known as how to determine value in the future market)
RULE OF THUMB
1) Take the possible gross rent of the property. (Say $1,500 + $200 in utilities= $1700/month)
2) Multiply by 12 months ($1,700 x 12 months = $20,400)
3) Multiply by 10 ($20,400 x 10 = $204,000)
Be particularly cautious of BANKRUPT COUNTRIES! Be particularly aware of food shortage soon, since shipments of crops are not being shipped anymore around the world. No Bank trust the other Bank's dinancial situation. They are not providing Letters of Credit. Right this mment there are shippments stuck in ports and ROTTING because of no credit.
Yes my friends... There is a strong possibility that some of us will suffer quite a bit. Be careful.
RECOMMENDED ACTIONS
Get out of bad markets today!
Remember what happened to your stocks in 2000? Those who knew and got out saved or cut their losses. Investors who held on got burnt.
HISTORY LESSONS
Let's look back in time.
1984: Exactly the same thing happened. Prices dropped and kept dropping for 3 years. Recovery came soon.
1990: Same thing. Prices dropped and remained low for about 4-5 years. Recovery came 4-5 years later.
2009: Same thing will happen again. Only this time, recovery looks far away, too far away!
IMO, most of the damage will occur AFTER the US elections. We know the game:
- Obama will complain "he inherited a mess"
- Obama will let things get worse for 2 years
- Obama will fail for the first two years
- Obama will do good things in the 3rd and 4th year
- Obama will get relected in year four
- Then things will fall apart again...
The cycle repeats itself over and over.
I forgot to mention... another war is then "required" as well as a few more "terrorist attacks" will occur to take peoples's mind off the REAL PROBLEM.
LOOK AT THE US NATIONAL DEBT CLOCK (it ran out of digits too!)
MY PREDICTIONS
- You think gas is low? Think $40 a barrel again (Say Good bye to Canadian and most Oil fields across the world that need prices of $33 or more to survive)
- Properties losing 50% of value (foreclosures soaring)
- Canadian dollar: 50 cents to the US (we will be a good bargain to be bought out in whole as a nation)
- Europe: still figuring things out (fortunately people there are not just numbers like in North America... they are considered more like animals)
- China: oops... foreigners are not buying anymore (Everyone back to being poor... Good bye Olympic fame...)
Please do NOT tell me that these people responsible for creating this mess did not know about it! This is what I call GRAND FAILURE!
If they did not foresee what was going on, they do NOT deserve to be in the positions that are. They are NOT CAPABLE of running global economies. REMOVE THEM IMMEDIATELY! Remove their powers immediately!
At the bottom of all this, it is a BIG SCHEME for money to transfer hands. FROM OURS (those who knew and created the mess) TO THEIR BANK ACCOUNTS (if there).
Those who knew the market over the past two weeks, made some serious serious money by buying when others were selling (see 1000 point drop in stock markets) and then continued to resell them the next day (900 points up the next day). This did happen a couple of times already, right?
Who is really playing this game? And why are we not OPENING OUR EYES to see the light? We are being fooled and we are accepting it.
So, here is my advice: WAKE UP WORLD. Difficult times are ahead of us. You haven't seen anything yet. Do not believe the media. Media and news companies are all owned by the same people that created this mess. WAKE UP!
Do what you have to do to protect yourself.
Cash is King! Hold on to it! There will be a lot of OPPORTUNITIES soon! Be ready to BUY!
More Info HERE