Yeah, you read that right, ‘minus’ 101. Read: Confusion. Implied meaning: we are not progressing in our understanding of economics, we are regressing. We might just be getting stupider…hard to say……especially if you are one of those getting stupider (like me).
Quick synopsis: The world economic engine has kinda shut down…that should be a negative influence on all the economies…and it is. Planes don’t fly, hotels don’t book, tourists don’t go on cruises and locals don’t dine out or socialize. They say retail stores are dead. The world has added 24 trillion dollars in debt to the books in one year. That is a pretty big negative, too – less cashflow, more debt payments and way more bankruptcies. Then there was the cumulative effects of the Trump years-of-international-alienation marked so dramatically by the Capitol Building riot and the demolition of the Trump Plaza in Atlantic city. That did NOT Make America Great Again. And it hurt everyone else as well. We could not even make face masks and yet Canadian unemployment is in the double digits. Oil is cheap (and, for Alberta, virtually land-locked). Then you gots your polar vortex and overdose deaths adding to the C-19 death toll (500,000 and growing in the US) and, of course, the significant increase in the homeless population all over North America. And the list goes on and on and on.
Don’t forget, the economy is basically a reflection of the collective MOOD of the people.
And yet…….every real estate market in Canada is up by a huge margin (except Regina). The average price of a home in Canada is $650,000. In Vancouver, it is $1,000,000!!! Toronto is pretty close behind in the high $900’s. And, get this: amongst the fastest growing markets in Canada is ‘Cottage Country’. I read where some modest 2 bedroom cottage on a distant Ontarian lake (think mosquito hatchery) sold for double the asking price! They wanted $400K and got $800K??????
Is the basic MOOD one of escape, retreat, run away?
When I spoke to my Bosch tankless repair guy in Vancouver, he said, “Oh, God! You live OTG? That’s my dream. I gotta get out of this madness. I’m 55 and, if I had the money, I’d leave in a heartbeat.” (I told him that he already had enough money but he didn’t believe me).
Seems the urban dream has been indelibly tarnished and the exodus has finally begun. Maybe. I guess we’ll see. But, let’s be real here: as much of an OTG booster as I am, I know that the urban centres are the economic engines of a country — even ones that rely so much on resource extraction such as Canada. People do NOT get money-rich in the country. Maybe some oil companies or logging companies do but the people working there do not. Living up or down country is NOT Wall Street, Bay Street or even Main Street….it is usually just a logging road.
Put another way; we have more and more homeless. But rents are dropping and, in Toronto, they are dropping as much as 30%. The poorest still can’t afford the rent. In St. John, New Brunswick, the average home can be purchased for $200,000. $500 a month will buy an average home in an urban centre! Pick a small village outside of that and the places are even cheaper!
So, the question students is how does that all work out? Record unemployment and homelessness but increasing real estate prices everywhere? And yet, more and more rental vacancies! More and more debt but the government does not care unless the debt is owed to them. More and more people living online. More and more people exiting real life for the ethereal. More and more people exiting the urban for the wilderness. More and more people incapacitated by climate change, C-19, drug addiction and unemployment. And the Boomers are getting older as I write.
If this is the apocalypse, shouldn’t Facebook tell us?
PS: As of Valentines Day Canada has vaccinated one million people with at least one third having received both doses. We are, in partial effect, 3% done. The dysfunctional, C-19-denying USA has vaccinated 60M people with both shots complete. Their math claims about 13 – 14%. But my math (328M / 60M is 18%). They are 18% complete their population. We are not keeping up with the Bubbas! All I can say is I am unimpressed with our institutions, as you know. I am also disturbed that they have not said out loud what I just did. The good news is that the politicians ARE saying: LET’S OPEN THE ECONOMY UP!!!