A couple of weeks ago I said the TSX would probably make a run for 13,000. We closed at 12,925 on Friday. That's a 2.6% increase in the index in the last 2 weeks.
Also on Friday, the CREA adjusted their housing forecast. It's nice to see some recognition of the actual market, but I guarantee you this is the first of many.
Then, in more exciting news, a useless politician (I guess that adjective is unnecessary, really, as a useful politician would be an oxymoron) named Jim Prentice resigned from his post as Environment Minister for a newly created position at CIBC. He was kind enough to help out Canadians by shutting down Taseko's Prosperity mine development in BC -- who's stock subsequently fell 29% last week -- and putting his left foot forward towards socialism with the negation of BHP's PotashCorp deal.
How odd that he decides to leave just a few months after qualifying for his gold-plated, government pension.
Yes, that's true.
Meanwhile in the US, Ben Bernanke is pulling the one lever he has available to him, which happens to be the one labelled "debase the currency".
One of my favorite blogs has a good piece on how to position yourself.
On the one hand, I'm glad I'm not an American right now, but on the other hand, I find it hard to see how Canada will avoid being severely harmed by this. When the exchange rate with the US dollar hits $1.50 CAN to $1.00 US, all I can hope is that we are selling our commodities based on prices in Yuan or ounces of gold.
Another exciting story that is gaining momentum involves the lawsuits against JP Morgan and HSBC for silver manipulation. Back in early September I mentioned I was looking for a way to play this opportunity, and I'm still doing that. I think that silver still has quite a large upside, and is a lot more accessible to the average Joe than gold.
A couple of amusing facts were posted on Garth Turner's blog today: first, only 9% of Canadians own equities, and only 1% of Canadians have investment assets of over $1 million. Retirement, for my generation, is going to be one of those crazy things your grandparents were able to do back in the good-old-days.
Looking into the future, I am sure of three things: higher taxes, increasing price inflation in consumer goods (groceries, gas, utilities), and massive deflation in debt-financed assets (real estate).
Lastly, I pose a question that I have asked many friends and coworkers over the last couple of weeks:
How many wealthy people do you know directly? I know wealthy is an ambiguous term, but let's define it as an unsubsidized person -- that is, no inheritance or family riches, no lottery winnings, no government pension -- who has accumulated enough liquid net worth to not work for the rest of their lives.
The answers I've received for the most part have been zero.
Let me follow this, then, with another question. If the number of wealthy people you know is almost nil, than isn't it likely that they do things quite differently than the majority of people, with respect to personal finance?
Celebrating your once-every-two-months Sunday off from Starbucks by buying a second investment property with a 2% cash back and 35 year amortization mortgage from CIBC, while driving your leased 2010 Cadillac Escalade to Holt Renfrew to put your coworkers' Christmas gifts on your home equity line of credit is probably not going to slingshot you into retirement.
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