JUROCK’S Facts by Fax
Jurock Publishing Ltd. #200-1311 Howe Street, Vancouver, B.C. V6Z 2P3 Tel: (604) 464-0808/Fax (604) 683-1707/E-Mail: ozzie@jurock.comWorld Wide Web: http://www.jurock.com/
Reproduction without permission strictly prohibited
November 22/1996 – November 28/1996″The less we know the more we suspect” Josh Billings

This weekend saw “Armstrong groupies” plunk down $498 US to listen to the
pearls of ‘the Armstrong.’ After all, the Guru Martin Armstrong of
Princeton Economics had forecast the rise in wheat, the Australian dollar
and (in 1993) the sharp rise in interest rates. In a wide ranging
presentation Armstrong pointed out that Japanese pension funds are
virtually insolvent (because of record low interest rates-less than 1/2
%-), that the amount of capital leaving Japan is staggering, even
unbelievable. For instance, in 1985 Japan held a full 25% of US Foreign
debt, that percentage dropped to 7% by 1987 (precipitating the stock market
crash of October 87′), but in the last 18 months alone Japan has come back
to where now Japanese institutions hold a full 33% of US foreign debt.
That’s one reason for the current low interest rates, it’s also a reason
for the rising stock markets. The incoming capital into the U.S. and Canada
have offset domestic pressures and thus watching what that capital is going
to do becomes vital. More importantly, to watching the US dollar should be
every investors first priority and could be the first indication  of things
to come (i.e. the U.S. dollar goes down, capital leaves quickly, the
downside would be sharp, steep and fast). This vast unprecedented foreign
buying has distorted the money supply, brought about increasing volatility
and has had a huge impact on all investments from stocks to real estate. In
a nutshell (for more details listen to this week’s HOTLINE after 6 PM
Thursday) Armstrong indicated some turning points: What goes down or
sideways into January will rise later that year, what goes up and makes new
highs into January (stocks, bonds, gold) will come off sharply later in
1997. Calling 1997 a “panic cycle year” he sees the possibility for a sharp
downturn of all stock markets – likely 15%, possibly as much as 40% – BUT,
and it is a big BUT, the DOW to recover from such a low and march onward to
as high as 10,000 by 1998 or sometime between 1998-2003. WOW! He sees
inflationary times ahead, but a different kind of ‘asset only’ inflation,
took a shot at the Governments CPI index (it’s all a lie!) and directed our
attention to the Producer price index currently rising at 7.5% annually. He
also saw short term interest rates sharply higher, with long-term rates the
staying the same or falling. He is bullish on Oil, still looks for Gold to
hit over 1,000 in the period between 1998 and 2003 (a fairly nasty period)
and sees a total currency collapse/ re-alignment possible during that
period. A period, where fickle capital zooms around the world creating
booms and panics. Finally on Sunday afternoon, Armstrong admitted: ” I have
never experienced anything like (this situation) in my lifetime.” Well,
right. Last year Mr. Armstrong forecast a marked return to inflation,
soaring Gold prices and soaring interest rates. He wasn’t quiteais definite
this time around. However, on Real Estate he was  positive (depending where
it is). Real Estate prices are rising all over the world, particularly in
Great Britain and parts of the U.S. Clearly, however  this world is unusual
and no one has all the answers, not even Mr. Armstrong.

All year we argued. We continuously saw reports about falling inward
migration from Asia. Yet, our sources told us, that applications were up
sharply. Now Stats Canada reports that B.C. attracted 23,774 immigrants UP
12% over 1995 in the first 6 months. We also received 29% of all assisted
relatives immigrants, 35.2% of the Entrepreneur class, 37.5 % of the
Self-employed and 57% of the Investor class. Further, 72.3% of all the
retired immigrants come here as well. Not bad, when you only have 12% of
the population!

The lowest prime rate since 1932, the lowest 5 year mortgage since 1954 and
we are going a’shopping. Realtors report a lot of action at the lower price
range. If the home, is clean, well-priced it will sell and quickly. The
magic price range is $150,000 to $200,000. Houses from Maple Ridge to
Chilliwack are now inviting  even multiple offers. Sold in 4 days or less:
Chilliwack, 15 year old home, 1300 sq. ft  $140,000
Abbotsford, New home, basic, 1,800 sq ft. $185,000
Victoria-Gordon Head, 15 year basic home, $219,000
Victoria Condo, New, $114,000 w. 3.5% interest rate

While he emphatically does not wish to be quoted, one lawyer stated this
week: ” The Foreclosure business is positively buoyant, it’s wonderful!”
Files at some law firms are 3 times the size of last years. A lot of the
problems? Low, low or no, no down payments. Most deals don’t have enough
money to clear the accounts and have a $10,000 to $50,000 shortfall  even
on smaller transactions. Also this month some big foreclosure deals  came
under the Judge’s hammer. Everything from subdivisions in the Interior,
apartment buildings in Penticton, White Rock, Nanaimo, Prince George, even
Golf Courses found new owners and their cash. The excesses of 1994/1995 are
being cleared out. With CMHC reporting housing starts in October to tumble
to their lowest rate in a year (seasonally adjusted rate fell from 26,800
to 18,300) and with most of the drop coming in new apartment construction,
the market WILL now recover. If I were a lender however, I’d resist the
pressure to get my money out at all costs… because the cost of
foreclosure may outweigh the benefit of the new initial client.

So much is told about the armed forces leaving its base, that we forget a
lot of the new positives in this market.  An Ontario manufacturer is
setting up shop at the former Pillsbury site (20 jobs) and becomes  part of
the redevelopment of the 15.7 acre Legacy Pacific Industrial Park site. The
Cottonwood shopping mall is adding spending a 10 million dollar renovation
and the home market has really heated up as well. With an average price of
$157,400, a classic “Penturbia” environment, Chilliwack will recover. Says
Terry Taylor, manager of the Fraser Cheam (Royal Lepage co-broker) office:
” Chilliwack never gets mentioned in the press, but our market is very
strong..and our prices are a lot less than Langley.” Indeed, volume soared
by 60% this month and November is also reported as very strong.
This Year       Last Year    Increase
Units Sold                        131                    79                60%        Avg. Price               $157,400                $152,000           +04%
Active Listings             2,104                 2,049           +01%

In the same vein, we hear that lenders are sitting virtually on a pile of
cash. Not that excited about lending to small businesses or plunking down
money for commercial real estate , the concentration is still on the
residential market. Competition for new loans is fierce and will still
increase. Now is the time to get that project financed. Even if you were
turned down in the past, re-submit, you may find a willing ear.

We have received dozens of requests for a tape of the Mike Campbell talk
last October. Mike has kindly agreed to have JREI subscribers receive this
tape. This tape will not be marketed. We will accept orders only until
Dec.5/1996. After that, the tape will not be available. Subscriber price
$16.95, plus GST and shipping & handling.
talk about hotels

LAST CHANCE On  Saturday, November 23rd from 10:00 a.m. to 4:00 p.m. at The Westin
Bayshore, Tim Cestnick, author of A Declaration of Taxpayer Rights and
Canada’s most popular financial analyst, Michael Campbell of Money Talks,
among many other speakers are holding an all day event. Tickets are only
$19.95 for JREI subscribers and if you say you come from JREI, you also get
a tape by Harry S. Dent, author of The Great Boom Ahead and Jobshock:  How
To Get In On The Great Jobs Ahead.  See you there.  Call 878-8822.

Subscribers’ Plots of the Week: 1. Salmon Arm, 3 bdrms, Full bsmt, new,
Price $128,900; 2. Salmon Arm, Townhouse, 1 yr old, garage, Price $105,900;
3. Prince George, 3 bdrm, townhouses, 3 levels, positive cashflow at 85%
financing, Price: $65,900; 4. Enderby, bare land zoned for 18 hole Golf
Course , 130 acres, Price: $1,450,000; 5. Silver Star Mountain, 160 acres,
4 wells, can be rezoned to anything, Price : $2.8 million. Call Liesl or
Lin at 464-0808  (All SPOW’s are for you to evaluate, just look interesting
to us. No guarantees).

RESIDENTIAL MORTGAGE  RATES: Best 5 year rate (must close before
Dec.16’/96) $6.10 %
Best rates    6 mos.    1 yr     2 yr     3 yr       4 yr       5 yr       7 yr           10
yr   High Ratio    4.85    4.80     5.35    5.60       6.00        6.20        7.14      7.69     Conventional    4.85    4.80     5.10     5.60          6.00     6.20        7.14      7.89

Mortgage rates based on a weekly survey of 65 major financial institutions.
The lowest rate posted  may be conditional  to the borrower meeting certain
requirements/conditions. For Lower Mainland rates try: Nova Financial
Services  (John Ribalkin or Jaeson Robinson direct tel: 251-6682); The
Mortgage Source (Rick Robertson cell: 377-6985/toll-free 1-800-465-6275);
Canada Trust (Brad Currie (604-816-5198).

To subscribe to Jurock’s Facts by Fax ($125 per annum) call
683-1111/464-0808 OR fax 683-1707. While the above information is compiled
from sources believed to be reliable, its accuracy cannot be guaranteed.
Any type of investing carries inherent risks; as such we cannot assume
responsibility for any subscriber’s actions or choice of investment.