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Questions addressed – China and the West gold arbitrage, Vancouver house prices

June 2, 2016

Chris is back with Cory as they weigh in on a couple questions from the blog yesterday. The first question is regarding the arbitrage between Shanghai and the western exchanges for metals and if there is a potential a bidding war heats up. The second question focuses on the Vancouver housing market…

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Thanks again for all your questions. Keep them coming!

Discussion
5 Comments
    Jun 02, 2016 02:33 AM

    The Vancouver market and the west coast of The US and Canada give me the willies. Who would have thought about Fort MacMurray even three months ago. If you are living their now the cost of home insurance will be catastrophic. Let’s talk about the earthquake zones in California running along the pacific ocean to Vancouver; when the big quake comes the insurance payouts will be astronomical and after that anyone who wants to purchase earthquake insurance will be sitting in the nose bleed section. It’s a disaster waiting to happen. DT

    Jun 02, 2016 02:36 AM

    Other than that, how was the play, Mrs. Lincoln?

      Jun 02, 2016 02:00 PM

      Feet don’t fail me, if you don’t understand how important your feet are just wait till they become an issue, look at what happened to John Wilkes Booth he caught his spur in Lincoln’s booth curtain, his subsequent downfall caused his demise.

    Jun 02, 2016 02:44 PM

    I don’t know why anyone even doubts that Vancouver’s bubble will burst. That should happen late this year at a reasonable guess. Just look at the SFH chart that gets posted so often and its classic parabola as evidence.

    Like all charts it has two major elements that you see on the rising line. There is price and there is time. When the only thing moving is price and the time element has essentially stood still then you are in the final act of a bubbles formation before it cracks.

    And that is exactly how that chart is behaving. Price has gone vertical so the time element appears to stand still. For a corollary just look at the monthly silver chart and see what happened once prices went orbital off the parabola.

    They dropped more than 40% in a single year as a response and Vancouver will probably fare no better.

    Silver — monthly chart….note the parabolic blow off top and crash in 2011.
    http://finviz.com/futures_charts.ashx?t=SI&p=m1

    Jun 02, 2016 02:54 PM

    Thanks for that commentary Cory. I see Lumber prices and building material and also labour prices going higher, therefore stabilizing these prices. Just a thought.