Feedback Friday - November 30, 2012

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Another week has passed, and judging from your comments, questions, and concerns, life isn't getting any more free out there. Good thing you come by TDV for insight and investigation of the ongoing fight for liberty. This week in the feedback, something's going on in Kanada, and where to go, Acapulco or Chile?

On to the feedback...

WILL ALBERTA SURVIVE?

Dear TDV,

Will Alberta, Canada, survive the US collapse? Will 4500 oz of silver bullion protect my future? What other country is the place to move?   

Leon Z.

Jeff’s Response: You couldn't have asked a better guy this question.  I spent the first 21 years of my life in Edmonton (which I affectionaly refer to as Deadmonton), Alberta, Canada.  First though, the way you posed the question is confusing.  Are you asking if the geographical region of Alberta will survive?  In other words, will there just be a big hole there after the US collapses?  That, funnily enough, is almost possible.  The next 1-10 years will be the most chaotic time in human history as the world's biggest paradigm change occurs.  First, this religious belief in statism is about to have millions of converts as the mirage that the state is a good thing comes to an end.  Secondly, as all these statist systems collapse, including The End Of The Monetary System As We Know It (TEOTMSAWKI) it will cause fiat currency collapse across the globe and none bigger than the US dollar. At that point, the people in costumes from the US military, police forces, Homeland Security and more will find themselves sitting there with some of the world's most lethal weapons and no money or fuel to operate them.  At that point, depending on how things devolve, it is very possible that the US Government looks to not buy but take the fuel it needs to continue on with its tyranny.  Where do you think they'll be looking for quick access?  They'll be looking directly at Alberta, home of the Canadian oil sands just a few hundred miles north of my birthplace.

However, that's just one scenario.  So, let's get back to your question, "Will Alberta survive the US collapse".  Again, the question is very vague.  Do you mean, will the government of Alberta or Canada survive?  My answer to this is, hopefully not!  All governments are an unnecessary evil and no tear is ever shed when they collapse.  And, that could happen because 90% of Canada's exports go to the US.  So, once the US dollar collapses and the welfare EBT cards get shut off you'll see all those Black Friday shoppers acting in a similar fashion as they did last weekend... but this time, not over cheap knickknacks from overseas but for food, water and shelter.  So, the massive majority of Canada's trade to the US will be wiped out completely.  This would cause a major depression in Canada that would starve the governments of tax theft revenue eventually leading to a collapse.

That said, I am going to venture a guess that what you meant by "will Alberta survive" you are asking, "will I survive in Alberta".  This is the least easy question to answer for many reasons.  For example, if you are a billionaire and have a private standing army of 500 well paid guards, large guardwalls, years of food and water in storage and live in an out of the way place like on the border of the Yukon in the far north, then I'd say you have an excellent chance of surviving.  If you live in a major city like Edmonton and Calgary in a high population area, have no private security, have no guns, have no food stored and don't have any precious metals nearby, then your odds go way down.  

I don't want to seem like a fearmonger.  The true fact of the matter is that no one really knows what will happen in the coming years.  What I am quite confident of, though, is that it will not be like the last 30-40 years... and mostly in negative ways that will shock most people.  We've unfortunately had most of the western world live under a delusion that the period from 1971-2000 was "real".  Economically and financially, it was not real at all.  But many people got used to their stocks always going up... to their mutual funds doing well... to their pensions paying them out handsomely, to receiving their Socialist Insecurity cheques.  It wasn't real.  It was a big fraud and if you've followed our writings at TDV for the last 3 years you'll have a wealth of evidence that that is the case.

To finalize, I will say this.  I think, if you had to pick an area of the US or Canada which will be least affected by the coming storm, it likely will be Alberta.  Energy rich with energy-hungry customers from around the world.  Endless areas of farmland.  Low population per square mile (you can drive for days in Alberta and not see another person it seems sometimes).  But, will it be as good as parts of Asia or parts of Latin America to wait out the coming storm?  Definitely not.  Chile, where we are building our expat refuge, Galt's Gulch, is truly booming.  And you'd be hard pressed to find a location further away in the Americas than beautiful, modern and happening Santiago, Chile... which is less than an hour from our mountain surrounded valley hideout.

And, if Chile or Mexico isn't for you and you do want to get away from it all to wait out the storm (or even to live forever... once you see many of these places you'll realize them for what they are, the future!  Comparing stock markets in Chile, Mexico and the USA makes it clear where the performance has been over the last 10 years.

Just see what the Economist has to say about Mexico in "The Rise of Mexico" as example).  It should be noted that what the Economist magazine said is what I've said for years.  Another reason to subscribe to The Dollar Vigilante.

And, if that isn't enough, for $15/month you have access to TDV's tens of thousands of readers/subscribers who have already done what you are considering, fled to a more peacable and prosperous place.

That $15/month might be looked back upon as a pretty good investment if Alberta does turn into a smoldering patch of Earth as TEOTMSAWKI and collapse of the states continues.  And, we can even help you protect your 4,500 ounces of silver (see our special report, free to TDV subscribers, "Getting Your Gold Out Of Dodge".

MORE ALBERTA? WHAT’S GOING ON IN KANADA?

Dear TDV,

I’m an Aussie living in Canada.  I still have my Aussie passport, and I'm a permanent resident in Canada.  What should my Canadian wife and I do?  We were looking at buying a house here, but that (in the eyes of a dollar vigilante) would be foolish.  We were looking at the flip side as well..... moving to Thailand.  But after international schools, insurances etc the math looked cheaper to stay in Canada (if we were to keep our current standard of living).  I’m very confused. We are also looking at internationalizing our banking... earning in CAD but keeping the cash elsewhere, ie. Hong Kong???.  My wife and I are of mixed minds. We think living in Alberta is safe for the next 20-40 years, but ??????? Do you really think Canada is going to crash and burn too?  Strong banking, great resources, sure housing is inflated but the market will correct itself. And housing prices are cyclical, if you are in it for the long term you will always win.  I just don’t see the crash being as bad here. We will feel it, but it wont be as dire as you guys make it out to be. Help me out guys with a bit of direction. 

Nick F.

Jeff's Response:

What is going on? Numerous emails from my home town/province?  Maybe they are feeling something in the air!  Or, maybe, it is just a function of the National Hockey League season not starting (and possibly cancelled) over a money dispute.  I actually mentioned this in my article, "Unions, Collectivism Gone Awry" where I described what it is like up there without hockey:

"As the snow already has begun to fall across much of the expanse of Canada, the weather has settled into a deep freeze (-20C, -4F overnight in Calgary this week) and the sun shrinks into the distance, a faint light mocking you for living so far away from it, there is usually one thing that makes living in North America's version of Siberia possible.  Hockey."

So, as you sit, freezing in the pitch black and you can't even watch multi-millionaires fist fight for enjoyment, things start to look pretty bleak!  I think this explains the influx of emails from Alberta, Canada!

I actually answered a lot of your questions above, Nick.  But I do want to comment on your statements about the "strong banking" in Canada and your optimism with Canadian real estate.  First, on real estate, it is my belief that the Canadian real estate market is at about the same point as the US real estate market was in 2006. I've commented in the TDV newsletter directly on this before but in the last few months I've heard countless pieces of boots-on-the-ground evidence that it is finally going to come to a screeching halt.  First, many people I know who own properties in Whistler, a popular ski resort north of Vancouver, have had their property prices slashed in half in the last year!  If you remember, Whistler was the epicenter of the Canadian housing boom as people believed the Vancouver 2010 Olympics would make everyone want to move there.  And, now that it is crumbling, it is making its way down the sea-to-sky highway and banker friends of mine who I have known for 20 years look at me with fear in their eyes as to what is going on.  And in Toronto, home of the Canadian financial sector, the condo in the coal mine isn't looking too healthy. From the Globe and Mail: According to new statistics released today, condo sales plunged 20.5 per cent in the third quarter of the year, to 4,541, from a year earlier. If you wish to read more, check out the excellent "Canada Bubble" blog which is covering the coming Canadian real estate collapse.

As for all the propaganda you hear every night about the "Canadian strong banking sector"on the government "news" channel , CBC, I now open the platform to Redmond Weissenberger, the Founding Director of the Mises Institute of Canada and Managing Editor of The Dollar Vigilante for another opinion on that:

The propaganda you hear about the Canadian banking sector is just that - propaganda. Canadian banks are as leveraged up as there international counterparts – if not more: in fact Canadian banks have no reserve requirement whatsoever, zero. Of course you needn’t worry about your deposits in the event of a banking crisis, deposits of up to $100 000 insured by the Canadian Deposit Insurance Corporation. The CDIC doesn’t hold enough cash on hand to actually pay out the potential claims, but it does have the Bank of Canada ready to print the money up out of thin air to make you whole – with your own money. How do we know that the BoC would pony up the fiat currency? We come to the dirty little secret of Canadian Banking – the big five were bailed out just like every other bank in the world. The report in question was prepared by a left wing think tank, so we can question their motives, but the reality is that Canadian bank sector is subject to the same problems of fractional reserve banking as the rest of the banksters.

Now what could lead to a Canadian banking crisis? Simple: exactly the same factors that led to the housing crisis in the US and Europe, namely artificially low interest rates leading to a bubble in real estate prices and unsustainable consumer debt.

 

You see, the Canadian housing bubble did not pop in 2007-08 like it did world-wide, and with the ZIRP policy of the BoC since then, Canadian households have managed to rack up a hell of a lot of debt. Mark Carney and the Federal Government have been issuing warnings on a regular basis to Canadian sheeple to reign in their spending, but the sheeple aren’t listening. The power elite are unwilling to do the one thing that would lead to a reduction in debt levels, that is, raise interest rates – two reasons jump out:

1. The Canadian Dollar has appreciated against the USD since 2008 from $.67 to roughly par. And a raise in Canadian Interest rates would necessarily lead to a further increase in value against the USD, further reducing Canadian exports to our largest trading partner, the USSA .

2. Raising interest rates would put potentially millions of Canadians underwater on their mortgages, leading to – wait for it – the bursting of the Canadian real estate bubble, and the subsequent fallout in the Canadian banking sector.

And on that note, Mark Carney, head of the BoC has just pulled a Greenspan and jumped ship for the top spot at the Bank of England, the granddaddy of the Anglo-American Central Banks.

So please makes sure you don’t have your blinders on when it comes to the Canadian financial situation – keep yourself out of debt and have your bug out bag handy.

ACAPULCO OR GALT’S GULCH?

Hi Jeff (or anyone else),

We have been speed traveling through SE Asia, Colombia, and are now in Playa del Carmen (Disneyland). Everyone here (everywhere) is a socialist. How is Acapulco? My girlfriend likes to wear her gold and diamonds and get smiles back for it (Colombia failed, Singapore and Thailand did best in that department). Are the people there angry at anyone who has more than them? Perhaps there are better neighborhoods with well-to-do residents and quiet internet cafes. We are really interested in the Chilean project, but are terrified of the sub 30 degrees Celsius temperatures. Although being around like-minded people certainly sounds extremely appealing (I am starving for a sane discussion). I have so much to talk about. 

Liberally, 

Olivier F.

Jeff’s Response:

Hola Olivier!

That's a good question, where is the best place for your girlfriend to wear proudly all her gold and diamonds!

It's a two faceted question, in my opinion.  First, where are people least socialist minded.  And, second, where is it safe to do!

Taking things in order, Acapulco (click here to see what we've got going on in Acapulco) definitely gets a big check mark in the non-socialist department.  I often sit at world-class restaurants with some of the world's richest people (and the bill rarely comes up to be much more than $100-150/person) and you would never hear a socialist world mentioned.  Some of the world's best capitalists all have homes here including Carlos Slim (#1 richest on Earth) and Hugo Salinas Price (#14).  In fact, my wife regularly tells me how I have to make a LOT more money so she doesn't look so out of place!

But, those are just the upscale areas of Acapulco.  In the more downscale areas you will NEVER hear anyone say that they don't like to see your wife wearing nice things because they think money and capitalism is bad.  But, what you could see is some people begin to follow you to take them.  So, I definitely wouldn't advise you to take your wife to some of the more poorer areas of Acapulco with all her jewels.  But, I'd say the same thing in almost any city on Earth including any major city in the US.  She certainly wouldn't want to be flaunting her wealth on the south side of Chicago where 50 people are shot every weekend!

But, the good news is, if you have some money (and it doesn't have to be a lot) you just live in the nice, wealthy parts of Acapulco and live in your own bubble.  But, I guarantee you that you will never hear the word "socialism" raised in public anywhere in any parts of Acapulco I know.  This is a true capitalist outpost.

As for the rest of the world, it's pretty much similar everywhere.  There are nice parts of Hong Kong, Santiago, Bangkok, Sydney, London, where you'd never hear a negative word said about enjoying your own production and never hear anyone bring up the word "socialism" but in each of those cities there are areas I definitely wouldn't recommend your wife walk around looking like Mr. T.

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