Nicole Foss, author of The Automatic Earth made an appearance on the Keiser Report. I am a faithful reader of her site as it provides an interesting dialogue about credit creation and destruction. She has written some interesting pieces about the dynamic of debt-based money in our system. While she is far, FAR more bearish than I am, her writings are extremely interesting nonetheless. In this interview, she discusses the Canadian real estate market. Being a Canadian resident, she had a lot to say…and none of it is good. She paints a far scarier picture than I do.
Let me first say that although I am a deflationist, I’m not an uber-deflationist in the same camp as Ms. Foss. Her writings are incredible and her ability to construct an argument is impecible, but I still have a hard time wrapping my head around a deflationary depression at the scale that she believes we’ll experience. I sure hope she’s wrong anyways.
By way of a short biography, Ms. Foss is writes under the name Stoneleigh over at TAE. She and her writing partner have been chronicling and interpreting the on-going credit crunch as the most pressing aspect of our current multi-faceted predicament. The site integrates finance, energy, environment, psychology, population and real politics in order to explain why we find ourselves in a state of crisis and what we can do about it. Prior to the establishment of TAE, she was editor of The Oil Drum Canada, where she wrote on peak oil and finance.
Foss runs the Agri-Energy Producers’ Association of Ontario, where she has focused on farm-based biogas projects and grid connections for renewable energy. While living in the UK she was a Research Fellow at the Oxford Institute for Energy Studies, where she specialized in nuclear safety in Eastern Europe and the Former Soviet Union, and conducted research into electricity policy at the EU level.
As far as Max Keiser goes, I think he is an interesting character. He certainly is anti-bank, which I like. But he’s also a bit too conspiracy theory-ish for me, and I question his motives in a lot of the things he does (the JPM silver gate for example). Nevertheless, he certainly is interesting to listen to.
Here is the full clip. Fast forward to 13:40 for the bit on real estate. I’ve transcribed some of the conversation below.
“Real estate is peaking as we speak”
“We are in a massive bubble and there will be an enormous comeuppance. Canadians are tremendously in debt.”
“We are going to be playing catch-up to the downside (with American real estate)”
“I could see real estate falling 90%”
Holy crap! I’m not predicting anywhere near that type of collapse, but God help us if she’s right.