Economy

There is certainly something to be said for being positive and thinking that anything is possible and, as Americans, optimism seems to come naturally for us. When we deny reality and engage in irrational wishful thinking, we are engaging in something called “hopium” - the irrational belief that, despite all evidence to the contrary, things will turn out for the best.

Canada’s housing bubble has been a sight to behold. Home prices only dipped 8% when the US housing market crashed. Then it re-soared. Now, across the country, home prices are 26% higher than they were at the already crazy peak in 2008. In Toronto, they’re 42% higher! There is a major drawback Canada's housing bubble beyond the fact that it will eventually crash with terrible consequences.

The latest rage is writers saying that the current economic cycle is aging and we had better watch out as the ‘bubble’ will burst soon. NONSENSE. Here's why.

Many investors think that we could never have a crash like the melt-down in 2008 but they are wrong. The 2008 Crisis was a stock and investment bank crisis - but it was not THE Crisis. That will happen when the biggest bubble in financial history - the epic Bond bubble - bursts. Let me explain.

Dozens of “analysts are convinced that the U.S. economy is going to hell in a hand basket – and soon. How sound are their analyses of the current economic situation? Will they be proven to be very insightful or nothing less than fear mongers looking for attention? Their views are all here. You be the judge.

Most of the hundreds of financial articles posted every week are just "financial entertainment" - unfounded forecasts, fear mongering or cheerleading. That being said, there are a number of articles that are absolutely MUST READS if you want to become an informed investor and be in position to understand what is evolving in the financial environment and be in a position act accordingly. Here they are.

It has been put forth that the U.S. dollar will soon lose its position as the world's reserve currency, and that when that happens, the world will fall into a deep depression. Is such an event really likely to unfold? Would such an event be really something to fear? How would/should we prepare for such a presumed collapse?

The infographic below shows the difference in living costs around the world using CPI data as a relative indicator of a country's living costs compared to New York (for example, if a country has a CPI of 70, on average, it enjoys 30% cheaper living costs compared to New York).

This infographic shows the difference in Monthly Personal Disposable Income around the world using data from 2014. In this context personal disposable income refers to the income per person after all taxes have been paid.

If you believe that ignorance is bliss, you might not want to read this article. [Why? Because] I am going to dispel the notion that there has been any sort of “economic recovery”, and I am going to show that we are much worse off than we were just prior to the last economic crisis. [Ready to become informed? Then, read on!]