What is the point of saving for investment if the real yield (nominal yield less CPI = NRoI) or Net Return on Investment is zero(1), or worse if one has to pay the bank to hold one's deflating stock-pile of cash like paying a storage company to store one's old copies of VHS movie tapes after everyone has moved on to Netflix, Hulu and peer to peer file sharing torrents.
Not only does cash (money) 'feel' as if it has no value but realtors and developers also don't know what the value is of the product they are selling, because their value of money is being defined by a market seized by mania that is willing to pay more today than was spent to purchase yesterday and all along the way, agents in the market and government give their approval to a dynamic that will reach a limit (if not already reached in certain markets) UNLESS earnings improve.
At street level in Canada earnings have been topping with the commodity crash but in many cases, earnings reliability are not even necessary to use in the calculus of risk analysis when granting a mortgage or consumer loan. We should be ashamed of ourselves, but instead we blame others.
As CIBC economist Benjamin Tal said, he is concerned that subprime lending is “driving the bus.”
At the national level it's worse; net Federal Direct Investment widened dramatically in 2015 Y/Y meaning that Canadian investment capital would rather look for yield offshore than on. We can't even invest in ourselves (Net FDI has been negative for the last nearly 20 years); we continue to increase our borrowing so that we can consume to 'maintain' our lifestyle.
Even people without money via savings and low employment earnings are buying property - how would they know the value of money? Well they will find out along with their extended families the difference between equity and debt in an aging speculative triumph.
BMO Millennial Home Buyer Survey (March 2016)
Ipsos Reid - BDO Poll (May 2016)
Condo Construction Subject To Red Alert From Royal Bank
Gregor Robertson Mayor of Vancouver, May 30, 2016
Magic Bus - The Who 1968
I don't care how much I pay
History, Charts & Curated Readings
"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement; and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it." George Santayana Vol. I, Reason in Common Sense
"History, real solemn history, I cannot be interested in.... I read it a little as a duty; but it tells me nothing that does not either vex or weary me. The quarrels of popes and kings, with wars and pestilences in every page; the men all so good for nothing, and hardly any women at all - it is very tiresome." Jane Austen spoken by Catherine Morland in 'Northanger Abbey'