More signs of Economic DEFLATION: As Home Proces Fall in Canada, Canadian regulators want to add MORE regulations to the Stress Test #LateStageSocialism – January 13, 2023,
You can’t blame individuals who profit from the real estate market for preaching an optimistic message; the market will bounce back, because it has to bounce back, right? Well, yes and no; if by bouncing back you mean there will be buyers, yes, of course, there will be buyers, the question is how much will they pay.
What people tend to forget is that ALL business tends to revolve around cash flow and ACQUISITION, and the two must be harmonious if you want to attract smart investors. If I’m an inquisition entrepreneur, even if my strategy is to sell, the business or PROPERTY I’m buying has to be PROFITABLE when I buy it, meaning that if I’m purchasing real estate, it has to be CASH FLOW positive the moment I make my purchase.
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Buying STRICTLY for capital gains is similar to purchasing a STOCK. As most people know, in real estate, the strategy is typically to buy, hold and sell when the market is BOOMING, or hold onto the investment if it’s a cash flow property REGARDLESS of the season. If I’m, to be honest, it’s hard for me to imagine actual homeowners in mass defaulting on their mortgages all at the same time.
However, it’s EASY for me to imagine house Flippers who, for example, purchased a condo in hopes of selling it for a profit in the future; I can easily see these people defaulting on their mortgages. So when I see the regulators appearing to target the people who are buying to occupy a home, I see this as a potential DEFLATIONARY indicator because most real estate investors, if they want to obtain a mortgage, they’re going to find a lender willing to lend.
Most people are trying to emphasize interest rate hikes as the reason for the housing market downturn; on the other hand, I point SPECIFICALLY to consumer price INFLATION for the housing market downturn. The Bank of Canada serves the best interest of the FEDERAL government; the Bank of Canada is a FEDERAL Crown Corporation and it’s there as a WARNING to the Federal government that its balance sheet is out of whack.
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The Bank of Canada hasn’t even begun to fight inflation yet; the inflation rate in Canada is still higher than the central bank’s interest rates; the Bank of Canada, without saying it, is trying to tell Justin Trudeau that his government’s INVESTMENTS are not panning out, and Trudeau’s cabinet, better find a way to generate some revenue before Canada starts losing investments at a RAMPANT rate.
In most third-world nations or nations that struggle with hyperinflation problems, during their LATE STAGE SOCIALISM cycle, their FEDERAL governments often dictate to their central banks how things are going to be; the central banks of these nations are 100% politicized and therefore will 100% accommodate the federal government’s objectives, no matter how INSANE they are.
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In America as an example, Far Left politics have found it’s way into the Democrat Party, oddly enough as the Latino population of the United States swells. In many parts of Latin America, far-left politics Dominates. When you think of a country like Ecuador, you might think third world, but what you might not comprehend is how PROGRESSIVE Ecuadorian politics is.
Yes, even poor countries, before developing their nations, have COMPLICATED their economy with far-left politics. Recently a man in Ecuador had to change his gender to win a custody battle for his children.
Politics can DESTROY a nation before it’s even developed; I’ve always had this problem with the term “populism” because democracy is all about populism; whatever is popular at the time amongst the majority of people is populism. Is it? Far-Left- Far-Right who cares? Whatever is popular is all the rage.
What’s so seductive about far-left politics is that it makes economics secondary, “POWER TO THE PEOPLE,” no matter how dumb the people are, is the common mantra amongst the financially uneducated and the economically illiterate. In Canada, we’re importing a lot of immigrants who are coming from countries that still are ECONOMIC and Financial failures.
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It amazes me how quickly many of these newly arrived immigrants find their way into politics, quickly becoming lawmakers; I remember a CONSERVATIVE politician in Toronto who came to my Toronto home and told me that he wanted tighter RENT CONTROLS; this Conservative politician could barely speak English but imagined he could convince me to add more stringent PRICE CONTROLS to my provinces rental market?
Most politicians Left and Right wings is a lot like Justin Trudeau, imagining that they should be the ones to pick winners and losers in the economy; the voting public actually encourages politicians to rule over them the way a King or Queen would and this from my vantage point is due in large part to what Robert Kiyosaki taught me is a lack of FINANCIAL EDUCATION.
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Bill Maher often used the term “sky daddy” Bill Baer is an atheist and imagines that Christians and believers of religion are STUPID for having a ruler who rules them from the sky or rules them from their imagination, well the flipside to a skydaddy is a PHYSICAL RULING CLASS, that dictate human actions from the BULLY pulpit.
Unlike the sky daddy, this ruling class, when given enough powers, can make ANYONES life a living hell, for any reason the PEOPLE think is POPULAR for the time being. If you love liberty and freedom, you prefer a sky daddy over a POLITICIAN. Liberty lovers don’t want the government to rule over them because government people are all about rules, regulations and securing their own power.
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First and foremost, what is the federal government doing regulating prices in the housing market, to begin with? Why can’t the housing MARKET decide who qualifies for a loan? If I run a for-profit bank, in order to be PROFITABLE, I’m only going to lend money to individuals I know are capable of servicing the loan; after all, that’s what my private banking business is all about.
The only reason why the government is in the housing market, to begin with, is to help otherwise UNQUALIFIED borrowers obtain a mortgage because if it were up to the banks, everyone would have to put AT LEAST 20% down to obtain a mortgage. The only reason housing prices are so high is that the Canada Mortgage and Housing Corporation (CMHC) and the Federal government, in general, have created these 5% down and LESS financial products that are INSURED by the Federal government of Canada.
More people who qualify of a mortgage lead to HIGHER PRICES now that there the Canadian Federal government via its war on fossil fuels, has created Consumer price inflation in every sector of the Canadian economy that uses fossil fuels, thereby raising their operational costs, the Federal government now wants to regulate or pick and choose who it wants to have a mortgage in the future?
Now, if I’m a private bank, this is an EASY decision for me to make who qualifies for a mortgage, but you see, if private banks start turning away people who can only obtain a mortgage with federal government assistance, then the Federal government will have a harder time WINNING an election.
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Some people like to blame politicians for everything; I prefer pointing the blame at the PEOPLE who vote for these politicians. We are witnessing in real time how to destroy a once great nation, we’re in the era of vote buying, and as interest rates rise OR vote to buy goes into hyperdrive, developed nations will soon find themselves experiencing third-world problems.
Banking regulator launches consultations on mortgage rules, proposes additions | citynews.ca
Interesting times ahead!