Throughout history there have been episodes of mass delusion. There would be a triggering event followed by uncontrollable episodes of madness.
In the medieval times, mass delusions were often caused by Saint Anthony's Fire, a mass involuntary acid trip caused by eating rye grains that were contaminated by the ergot fungus (the precursor to LSD). When the Medieval mind was effected by St. Anthony's Fire all hell would break loose. People who when cognizant believed the world was flat, and the future could be foretold with chicken guts, would not be well equiped to handle a bad acid trip. A person would find themselves; talking to Jesus; watching a Rooster cast magic spells; or conversing in Latin with a duck.. Others would be effected by a Messianic delusion. They could find their self perception as one of omnipotence and thinking they could fly, hurl themselves from high places to their deaths. People would burn their children, their farms, and run into the wood with their Rooster who was talking with Christ. After about 24 hours, the survivors if they were lucky would get their sanity back. They would see their lives in ruins and they would see some fellow villagers who were still peaking and figure that the village was struck by witches. The peasantry would take the poor hapless souls who were suffering from psychosis , tie them to a stake, pile the kindling around them, and burn them along with the spell casting rooster. The children would dance the sun would rise and everyone would live happily.
However extreme and crazy a medieval outbreak of Saint Anthony's Fire was, the size and the scope of the mass delusions and insanity are nothing like British Columbia real estate bubble.
It seemed that logic, reason and common sense were thrown in the air. From 2002 to 2007 BC real estate prices increased an average of 150%. In late 2005, I started to rain on the parade and advise my clients this was unsustainable, real estate prices had overshot their fundamentals and we were in for a painful crash.
Fueling the medieval outbreaks of insanity was organic natural source LSD. Fueling the BC Real Estate Bubble was something far more sinister. It was a blinding all consuming greed that so warped many British Colombians perceptions of reality that probably half the province had the mind set of a seriously fucked up BAD ACID TRIP. BC's drug cocktail that turned otherwise sane cautious individuals into reckless morons was:
1> A Belief That Everything Has Changed, when no real change occurred. The acolytes of the Real Estate Cult, would preach things are different, people and are going to come to BC. Southern BC has better weather than Edmonton. People know about this place. Etc, etc. When we examine the facts, we will see that; people have always moved to BC. For the last 32 million years winter temperatures were warmer in Southern BC than Edmonton. Finally when the Canadian Pacific Company built the Empress hotel to serve as a Gateway to Asia, every child in the British Empire was aware of Southern BC. This delusion was quite similar to the medievil person watching a Rooster cast spells,. Nothing changed at all other than the thought process in the trippers head.
2> Real Estate is Finite and They Can't Make Anymore. The acolytes would use this statement in their two stage chant "People are coming to live in BC, and they can't create more Real Estate". This second point can only hold partially true, in the very short-term the amount of Real Estate is fixed. In the mid-term it is possible to increase the amount of Real Estate through re-development at an increased density. In the long-term, mankind has the potential to undertake LAND RECLAMATION, whereby garbage and fill are dumped into low-lying areas to raise the elevation turniing shallow bays and tidal flats into usable land.
3> The Olympics are Coming to Vancouver. The acolytes of the Real Estate cult would preach that the world would become aware of Vancouver's existence during the Olympic games and everybody on the Planet Earth would covet a place in Vancouver. Of all the delusions being preached by the Real Estate boosters, this was by far the stupidest.
Vancouver had a far better opportunity to put itself on the world stage 24 years before the Winter Olympics and it was called Expo 86. I refer to the Winter Olympics as "The White People Games", it is a celebration of Northern Nations with declining birthrates in a demographic death spiral, showing the world how they handle winter, which if Al Gore is right will be a distant memory in the all to near future.
If one put away their bong, swore off the chronic for a couple of hours, drank some orange juice and straightened up, they would realize that the Winter Olympics are one of the worst things that could happen to the BC real estate market. This is because:
a> The Winter Games take place in February in Vancouver, and they have to hold the opening ceremonies indoors in an inflatable marshmallow, to escape the torrential rain. The World media will be in Vancouver and they will be constantly beaming to the world the message that Vancouver is dark, rainy and the inhabitants are so stoned they think they have a pleasant climate.
b> The Winter Games trigger a wave of speculative building and buying of Real Estate. People who are wired on the Olympic delusion do so in anticipation of all the people who will see Vancouver on TV, and decide to abandon their lives elsewhere to come here. Real Estate has always been and always will be ultimately governed by the laws of supply & demand. The catch is the post Olympic demand increase will not exist, and may actually cause a demand decrease because who wan't to live in a dark rainy overpriced place. This occurring while supply has increased = a Real Esate bloodbath that started in 2008, and will continue to accelerate during 2009, 2010, and forward with no end in sight.
c> The Winter Olympics are a two week event that costs about 3 billion dollars. About 1 billion of the costs are recovered leaving a $2 Billion dollar debt hangover that will result in tax increases for BC residents that will serve to reduce FUTURE DISPOSABLE INCOME, thereby lowering FUTURE DEMAND FOR REAL ESTATE.
We are going to witness a financial fiasco with the Vancouver games. The greatest comfort will come from the fact that a significant portion the Olympic boosters were so deluded on the benefits of the games that they loaded up on speculative real estate with borrowed money... HAAHAAHAAAHAA.
Now if only we can bring some justice to the citizens of Victoria.
The Campbell Government has spent $1 billion dollars to upgrade the road to the cluster of Ski Chalets called Whistler. At the same time they keep telling the resident of the Capital Region that there is no money for safety improvements on the Malahat deathtrap. If there was justice, the property owners of Whistler would be assessed the bill for their upgrade road, and the $1 billion could four lane and centre barrier the main access road to the Provincial Capital.
This won't happen, so please pass me the LSD.
Til next time,
Mario
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