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Tuesday, 13 August 2013


TORONTO CONDO bubble CRASHING – WHAT NEXT? - READ MORE   2008 Meltdown or Japanese Bubble... (read more)

When will they ever learn? Or is it simply in the nature of our species to always create these gigantic credit-driven asset bubbles? And why is it a social phenomenon that no country, culture or region is immune to through-out history? 

From a investment view, we are seriously perturbed about Toronto's Condo Bubble and the possible outcomes that could occur when the bubble further deflates. As a result, we have placed a number of sectors on our watch list; obviously including  retail, financial, property development and construction industries. In the weeks ahead, we will provide further.comments and analysis regarding the much anticipated fall-out with more specific industry assessments.  

Remember also how globalization was sold to us as the best way to improve national economic well-being, standards of living, create jobs and lower risk levels. Now everything is so deeply inter-connected financially, physically and politically, yet these promised improvements seem to be moving us in the opposite direction. Do you think it was all a big lie serving a few special global interests? Do you think that they pulled the wool over the eyes of our political geniuses?  If you do - then you are not alone!

It begs the question - who is really governing sovereign nations given all the operative trade agreements, and organizations, such as the WTO, EU, IMF, World Bank and others, with relegated powers? Have all these supra-constitutional connections watered-down sovereign constitutions so much that national destinies have been moved beyond elected officials' powers? This may explain why Canada patterned its monetary policies after the FED - they have to!

This is a big issue that requires a good deal more analysis and thought, but there are clear hints that "globalization" was just a crafty synonym disguising "annexation". What does that have to do with the price of Condo's in Toronto?

Lots! Just ask its Mayor.   

First Financial Insights

August 12, 2013

Asset Bubbles 101: 

In the end, remember nothing is...


What everyone should come to understand in the age of globalized economies is that no country, region or city is completely immune from the trends and events that occur around the planet. More so in the years ahead when shrinking raw material supplies and food stocks cause more unrest and political strife.In all likelihood making the originating shortages worse and causing spikes in CPI and accordingly the borrowing costs set by markets. 

Therefore, cities like Toronto may experience seemingly immune short-term booms, but the hardships of marginal countries ripple back, sooner or later . And as more and more countries are affected by climate change, resource shortages, social and political tensions, booms may actually become just pages in economic history books.Why? Because abstract economic theory's positive-sum-game is moving rapidly towards a head-on collision with existential economic theory's negative-sum-game. Somehow, reality has a way of defeating the wild speculations of age-old stories, as physics and mathematics are absolutely concrete in construction.

Having that in mind, we should be concerned that as the population-resources-depletion formula worsens we do not blindly fall into the "exponential economic trap". Illustrated by the simple idea.that when an element doubles with every unit measure of time, then at one minute to 12 its glass is half full -  fooling one to think a lot more time remains. What happens next is clear, but perhaps not so clear if the concept is ignored or misapplied. The exponential function in itself sets hard non-negotiable constraints on all asset bubbles, and also total physical economic outputs. We must remember not to forget the implications of this function and its real, but invisible existential constraints.

If we do, the clock says there won't be much, if any, time to fix the situation. This function is plainly ruthless.

Dr. Peter G Kinesa
August 13, 2013

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