RE: RE: Random thoughts Hey James thanks for the response as usual. I believe you're right on in regards to your comments on the commodity cycle and as usual most new investment money comes flooding in as it gets closer and closer to the end. One has to remember that most of this area was in play in the 50's also hence all of the historical workings, but shelved due to a much more cost effective resource along the mesabi range.
In regards to 7.2 % compounded annually not seeming like much you have to remember that wage growth has been say 3% or flat for a large majority of that time, does the average wage double every ten years ? so those numbers add up fast. Also if you take into account that fuel is up 223 % in the last ten years plus the increasing food costs and so on one can see that this is not sustainable. Use your 7.2 % for 20 more years and ask yourself if that is still acceptable for a house price , I doubt it, so less growth will mean smaller GDP numbers and fewer jobs which leads to even less growth, it's a tough cycle to get out of. Also you have to take into account that this is still only possible due to record low interest rates on dirt cheap money. When the cost of carrying these houses increase you will see the real power of supply and demand take over here in Canada. the world has felt it and we will not stay immune forever. Anyways my thoughts are all scrammbled off to play with the Nolster.
Have a great day.