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July 9, 2019 | Speculative Flows and Money Laundering Have Helped Drive Canadians into Financial Peril

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel (www.venablepark.com) Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog: www.jugglingdynamite.com

Over the past 20 years, government policies have increasingly enabled reckless behaviors, policies and profits for certain sectors and actors at the expense of overall strength and stability.  This has helped to drive lending along with speculation in realty and security markets.  While those collecting transaction fees have prospered, most on the buying end have slipped deeper into debt and financial precariousness.

Since bringing in new taxes aimed at curbing speculation and land banking, realty prices have fallen in municipalities that had the highest levels of foreign buying over the last decade.  The proportion of foreign property buying in the Vancouver region went from roughly 1 in every 8 transactions in 2016 to 1 in 60 by May 2019.  See Vancouver real estate market experiences dramatic drop in foreign buying following tax.

Prices and revenues that went up in the asset inflation period come back down in the mean reversion phase and in Vancouver the slowdown in housing sales has already brought a significant reduction in taxes for government coffers.

Many people are hurt and angered as bubbles deflate and cries for who to blame intensify.  The truth, however, is that few look for culprits as the excesses build.  Indeed, as explained by the panel below, regulators and law enforcement have been systemically under-funded over the past decade in order to keep oversight at bay.

An ex-RCMP financial crime expert, investor that has shorted companies he suspected would fail due to fraud activities, and a Vancouver lawyer that is a member of various organizations related to financial crime, money laundering elaborate further in this clip.   Here is a direct video link.

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July 9th, 2019

Posted In: Juggling Dynamite

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