Global Economic Cracks Widening . . . .

[quadtrac]

Low rates have already contributed to asset bubbles over the past five (5) years . . . luxury real estate, art, classic cars . . . but these bubbles are now deflating rapidly.

Manhattan real estate now under heavy selling pressure, due to vanished Chinese buying. Barrett Jackson classic car auction values have had a tune-up. Trade war tariffs creating heavy damage to markets (IMO) . . . especially asset bubbles.

Stock markets continue to simply be a parking lot for money, being supported by corporate buybacks, not earnings. But the Dow now appears stalled out in 2019, treading water right now. There might not be a huge traditional crash in markets . . . rather a very long and prolonged sag in markets heading into 2020 and beyond.

Farmland? Slowing global investment and trade tensions don't favor a near-term recovery (IMO).

'The Great Financial Sag' is now underway . . . .

I’m not saying you’re wrong and do appreciate your posts but honestly how long have you been predicting this type of stuff? You’ll be accurate one of these years I’m sure. But meanwhile life will go on either way.

[Taiga]

Regarding real estate, nothing is selling near me. Residential or farm. People have been living on savings for the last few years, depleting them. Maybe things will turn around after this election and once great industries can resume business. Money has fled this country for the US in massive amounts. Texas is absolutely booming.

[malleefarmer]

I’m not saying you’re wrong and do appreciate your posts but honestly how long have you been predicting this type of stuff? You’ll be accurate one of these years I’m sure. But meanwhile life will go on either way.

Actually reckon Errol has been very close to the mark.

Commodities to be subdued.

Whilst we all want better grain prices old be getting toppy especially wheat. Basis narrowing here in oz

[Guest]

can't go any lower here , below the cost of production

[errolanderson]

I’m not saying you’re wrong and do appreciate your posts but honestly how long have you been predicting this type of stuff? You’ll be accurate one of these years I’m sure. But meanwhile life will go on either way.

quadtrac . . . You don’t have to look very far to see bizarre economics of runaway government spending and consumer debt and it’s devastating impact on our business growth and on the next generation. What I have seen is a slow moving freight train that has already crashed into an economic brick wall of debt. Central bankers are now ‘pushing on a string’. They are TRAPPED, and they know it. But you don’t want to spook the investor, heaven for bid.

Negative rates? Where did that come from? But everything is A-OK because the stock market is doing so damn good. But everyone’s net worth is now in-decline. How ‘s that hang together? And how come prices are deflating? That’s not so rosy. And negative rates only means there is a growth less future, particularly for consumers.

Yes, I have been breaching this for years as it could be seen from a long way’s away. What has delayed the impact is pure manipulation, not economic growth. We are drowning in debt, pure ‘n simple. And cheap money no longer works. And this reality has already hit and it is now hitting hard . . . .

The crash of 2008 has never been repaired in-full. Not a chance. The can has just been kicked down the road . . . Now the can has been kicked into the ditch.

[sumdumguy]

I’m not saying you’re wrong and do appreciate your posts but honestly how long have you been predicting this type of stuff? You’ll be accurate one of these years I’m sure. But meanwhile life will go on either way.

Easy preaching doom and gloom just like global warming fear mongers. Turns out they don’t have an f-ing clue but someday markets will sour and they’ll say, “I told you so”.

[Zephyr]

quadtrac . . . You don’t have to look very far to see bizarre economics of runaway government spending and consumer debt and it’s devastating impact on our business growth and on the next generation. What I have seen is a slow moving freight train that has already crashed into an economic brick wall of debt. Central bankers are now ‘pushing on a string’. They are TRAPPED, and they know it. But you don’t want to spook the investor, heaven for bid.

Negative rates? Where did that come from? But everything is A-OK because the stock market is doing so damn good. But everyone’s net worth is now in-decline. How ‘s that hang together? And how come prices are deflating? That’s not so rosy. And negative rates only means there is a growth less future, particularly for consumers.

Yes, I have been breaching this for years as it could be seen from a long way’s away. What has delayed the impact is pure manipulation, not economic growth. We are drowning in debt, pure ‘n simple. And cheap money no longer works. And this reality has already hit and it is now hitting hard . . . .

The crash of 2008 has never been repaired in-full. Not a chance. The can has just been kicked down the road . . . Now the can has been kicked into the ditch.

Errol, love your posts.


You've obviously seen and heard about new world monetary policy... The stuff people like AOC follow, where a government can basically print money in an unlimited unhindered fashion as long as it's for the good of the people...



You're right on all the asset bubbles. If you can't see it here in Canada you're a blind dimwit. Land, housing, vehicles, machinery (not just farm) everything keeps going up without any correlation to its intrinsic value or its capacity to generate wealth.

There's so much fake money in the market it's basically like living in a 3rd world socialist dictatorship... but all the western countries are doing it so it's not as visible to the public.


Errol, in your opinion what's the best way forward for a business owner? I'm not talking ag alone, in general... How do you somewhat protect yourself from the coming fall?


Keep posting!!

[errolanderson]

Thanks . . . . How does a business from ag to making ball point pens protect itself?

Brass tacks is; if a business hasn’t already recognized big picture economic risks and implemented a money risk management program ie; dealing with debt load and risk, it is already too late. The market taketh and won’t get back easily anytime soon.

This was discussed at The Farmtech conference last year as a major risk. Bottomline, we are all going to be worth less one year from now unless you have the cash available to pick up deflated assets ‘pennies on the dollar’ which will ultimately begin the reseeding of the new economy. But this process will be very painful and could take years to complete this incoming business transition.

There is a huge makeover coming for the S &P stock index (IMO). Huge company turnover and mergers. There is a changing of the guard. The U.S. is trying to battle this change; but tariffs won’t change this outcome. True economics will rule, not bullying and manipulation.

Cash is king in my view, which would make any banker scream. Bankers are not going to enjoy this ride. Consumerism will have a whole different meaning for the next generation. It’s already started.

But for those able to take advantage of this deflating asset environment, there is huge opportunity ahead. And as for central bankers, they have created a royal mess. ‘Feed me now’ Keynesian economics at its worst.

[Zephyr]

Thanks . . . . How does a business from ag to making ball point pens protect itself?

Brass tacks is; if a business hasn’t already recognized big picture economic risks and implemented a money risk management program ie; dealing with debt load and risk, it is already too late. The market taketh and won’t get back easily anytime soon.

This was discussed at The Farmtech conference last year as a major risk. Bottomline, we are all going to be worth less one year from now unless you have the cash available to pick up deflated assets ‘pennies on the dollar’ which will ultimately begin the reseeding of the new economy. But this process will be very painful and could take years to complete this incoming business transition.

There is a huge makeover coming for the S &P stock index (IMO). Huge company turnover and mergers. There is a changing of the guard. The U.S. is trying to battle this change; but tariffs won’t change this outcome. True economics will rule, not bullying and manipulation.

Cash is king in my view, which would make any banker scream. Bankers are not going to enjoy this ride. Consumerism will have a whole different meaning for the next generation. It’s already started.

But for those able to take advantage of this deflating asset environment, there is huge opportunity ahead. And as for central bankers, they have created a royal mess. ‘Feed me now’ Keynesian economics at its worst.

Thanks, Errol!


So you're saying for those of us that have realized this is coming... staying in a long-cash, no/low debt situation is best?

We've been talking about that in our family. We farm, but it's by no means a big part of our 'pie'... Want to leave a legacy for our three kids, and that would require some expansion of our business ventures... However at this point in time we've been staying with a "gut" feeling of remaining in a holding pattern for a few more years.


How would you protect cash, though? Having it in the bank is a money loosing proposition considering we don't get interest enough to cover inflationary action.

The stock market, IMHO is way over bought.

Bonds are risky?

[tweety]

So.... auction sale time before the wheels fall off? But then if they don't.....

[foragefarmer]

Zep

I will give Errol credit, he does put a lot of effort into his posts, good on him. The only down fall is he has been painting the doom and gloom for several years now. If you would have followed his advise when he started making his predication and exited the Stock Market, you would have missed out on the biggest bull run in history.

So trying to time any market upturn or downturn is very dangerous as a investor, you will be eaten by the sharks. You have to look at any investing as a long term endeavour, it takes years to see results not a few months.

I follow the advise of the greatest investor of all time Warren Buffet, buy good blue chip stocks that have been around for decades that pay good dividends. Buy them and forget about them, Cd banks railways, insurance companies etc.

I also believe in real estate as well, but it is a bit scary right now. I do not own any bonds because there's no return on them currently, besides dividends are taxed differently.

Again Errol does take time to post the information, I'm just telling you what I have done. It's up to you to do your own HOMEWORK!

[errolanderson]

Thanks, Errol!


So you're saying for those of us that have realized this is coming... staying in a long-cash, no/low debt situation is best?

We've been talking about that in our family. We farm, but it's by no means a big part of our 'pie'... Want to leave a legacy for our three kids, and that would require some expansion of our business ventures... However at this point in time we've been staying with a "gut" feeling of remaining in a holding pattern for a few more years.


How would you protect cash, though? Having it in the bank is a money loosing proposition considering we don't get interest enough to cover inflationary action.

The stock market, IMHO is way over bought.

Bonds are risky?

It's all about risk appetite, your age and how well you sleep at night . . . . I'm not remotely concerned about missing out on gains on the stock market . . . that can be erased in-a-blink.

When you are young, you can weather through a sudden net worth decline. If you are close to retirement, it's a different story . . . you can't take that risk. When the equity market starts to correct, it is already too late. Recent gains in the stock market and a decade of building-a-business could be washed out in one day. So everyone's financial position has a different feel.

[errolanderson]

What a mess . . . hundreds of Husky Energy employees being laid off this morning (mostly in Calgary). Taxis lined up at the door right now with employees holding their vanilla envelopes.

Cdn retail sales released this morning were negative . . . .

Canada's government spending and debt is now blowing to the moon.

This is more serious than just a recession folks . . . .

[tweety]

What a mess . . . hundreds of Husky Energy employees being laid off this morning (mostly in Calgary). Taxis lined up at the door right now with employees holding their vanilla envelopes.

Cdn retail sales released this morning were negative . . . .

Canada's government spending and debt is now blowing to the moon.

This is more serious than just a recession folks . . . .

Because of Liberal/BQ government majority or coincidence the day after the election?

[blueversi]

Because of Liberal/BQ government majority or coincidence the day after the election?

Not likely a coincidence. Probably was in the plans depending on what happened on Election Day. More red tape, more climate b.s. , etc. not heading in right direction for the energy industry.