Who said it: the Canada-U.S. housing bubble quiz

A lot of reasons are given for why Canada doesn’t have a housing bubble. Almost all were said about the U.S. housing market.

HOUSING-BUBBLE-CAROUSELNearly a decade has passed since Americans started to hear loud and regular warnings that their housing market was a bubble ready to pop. Yet it’s easy to forget just how convinced so many policy-makers and economists were that prices had been driven by solid economic fundamentals, and not irrational exuberance. Even those who did admit that house prices had gotten ahead of themselves found it impossible to conceive the market might crash, and bring the economy down with it.

Paul Krugman addressed this disconnect recently, noting that “a thoroughly inflated bubble is a natural Big Lie—that is, a lie so audacious nobody will believe that anyone would dare to invent it … And this cognitive difficulty is reinforced by herd behaviour: you don’t want to be the guy shouting that the sky is falling when everyone else who matters is treating it as a minor correction at most.”

Today in Canada there are a lot of reasons given for why we shouldn’t be concerned about a housing bubble. Almost all of them echo things people said about the U.S. housing market before the bubble burst in 2006. To illustrate this, we created a PollDaddy quiz. Each question contains a quote and gives you two options of speakers to chose from, one from the mid-2000s in the U.S., and one from Canada over the last year.

See how you make out. And when you’re done, go here and read about a new report from Morningstar that debunks many of the myths given for why Canada is immune to a crash.

Take the Canada-U.S. Housing Bubble Quiz




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Who said it: the Canada-U.S. housing bubble quiz

  1. Canada will not crash, we will see hyper inflation and its already happening.

    Devalued money is Ottawa’s plan and why I invest offshore. Since the value of CAD money has decreased 7.5% in 8 months, it takes 7.5% more money to build a home. The intent is if housing fails, devalue money to add inflated pricing to support the market.

    From a domestic point this looks good, from a value point it is a disaster to wages, incomes, pensions, savings and investments. I say investments as if I make 5% ROI, but currency depreciated 10% annually, I am losing purchasing value big time.

    Hey, rich get richer as they don’t use corrupt govmint math, they look at VALUE and SPENDING POWER. And in these terms Canada is a deprecating tax inflated economy of debt.

    Could housing crash? In terms of USD and Yuan currencies, they sure will. In terms of devaluing CAD money, they may not. In fact, with interest rates below inflation, the bubble may have a bit to go yet before it pops.

    As govmint can’t create homes, gold, gas, food out of thin air like money, our money has zero future value with negative returns for having it. If I was young, I would save in physical gold and deny I had it, rack up the debt as debt depreciates with fiat money and bet govmint will devalue us some more to preserve big fat wasteful governments we can’t afford.

    Standard of living is going to decrease for most Canadians. Its now inevitable.

  2. Only scored 50% on the quiz as I was confused with the BS of the statements. Reality is its all BS to appease the public as the depression was caused by governemtn debt. Lets illustrate the truths of what REALLY happened and start with a factual chart that shows it nicely, scroll down it a page under the link:

    http://www.xe.com/currencycharts/?from=USD&to=CNY&view=10Y

    What happened in 2005/6 is interest rates should have risen to attract money to government debts. Trouble was US gov was spending far more than it could raise in debt markets with interest rates it could afford. In comes Bernanke and his money print for debt doctrine, in 2005/6 US Fed created no value depreciation fiat moneys to directly or indirectly buy US Treasury debt legitimate lenders no longer bought. It was to present the illusion of solvency when in fact its technical bankruptcy.

    Everyone loved free “thin air” money, ignored that real markets could not raise debt for rates below inflation, the credit crisis hit in 2007 where lenders wanted their money back and few would renew the debts for a after inflation value loss. Ignored by governemtn debt greed and fraud, the markets crashed in 2008.

    I even saw it coming and made obscene profits as I was high in cash for the crash and picked up stocks cheap in early 2009.

    The depression was cause by unscupiolous immoral bankers and debt greedy politicians that refuse to balance the books….they conspired to get debt-fraud economics, not much unlike Bernie Madoff’s pyramid scheme, let the unborn get the debts. This depression is NOT over, its just the beignin of the decline of corrupt western banking and bloated governments. Greece/Argininian like crisis of the past are coming now to our shores.

    Like Japan which started “think air” money for debt, in 2 decades, the “Lost Decades” they have had a 50% reduction in the standard of living. As corruption comes at a cost, and if money isn’t stable and depreciating, well, lower standard of living so we can preserve government bloat is assured.

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