Enough chatter has hit the web regarding 2020, a year of infamy, so I will refrain from getting into pointless jabber over masks, anti masks, bizarre enforcement against shinny players on outdoor rinks (while the political elites Jetset), and inept leadership at the highest level in Canada. After all, this is a business post. No politician is ‘responsible’ for what happened, nor is any politician worthy of any ‘credit’ for managing our society. I read somewhere that politicians should be the last people to receive a vaccine, because they, as in professionally, are not scarce or irreplaceable. Literally any educated adult in Canada could be a politician and do as well or better than what we’ve got (and certainly no worse than at the federal level), so I’d subcribe to that notion. Let’s inoculate those who staff senior care homes first, and healthcare front line staff second and then, only then, start widespread vaccinations from the oldest to youngest (with elected officials dead last regardless of age or self importance, lol).

First of all, on a personal note, my family was blessed with good health in 2020 and my business was a winner by happenstance. While other small business owners had their financial lives ruined by diktat, construction was deemed essential. I guess the cult of real estate is that strong here in Canada that it is prioritized over basically all other industries. While the retail/restaurant/tourism operators were crushed, and in my view, unnecessarily given what we know now, I started new homes full speed ahead with bountiful access to the men and materials that make it all happen, until of course that changed too. By the end of the year serious material shortages were noticed, and ridiculous price changes hit builders hard, like 3x pricing on some lumber product. But spring/summer was smooth sailing and a great time to be a home builder, especially compared to the broader society. It wasn’t such a great time to be a home owner, as prices have dropped again, and the NE was hit by a second black swan, just a terrible hail storm that will take years to recover from. The market really rebounded later in the year and right through Christmas break sales have been good and buyer preferences appear to be moving in a parallel direction to my operation, building larger, well equipped homes with plenty of amenities such as offices and gyms.

More specifically about the business year, three homes were finished and turned over to the owners, all very nice clients and great people to work with. A townhouse transformation was completed and sold, despite horrible market conditions, and I built a garage as a side job, which turned out extremely challenging to finish when we couldn’t get any siding product. Two new detached homes were started and are at the lockup stage now, a third bungalow was started and is in limbo right now due to some permit related fiascos (resolved as of years end, yahoo). If that was the worst thing that happened during 2020, then I got off really lucky. I also have a large pipeline to start four new builds next year, so 2021 is planned to be a success. I wont discuss the three that got away because it makes me too annoyed. Given circumstances, I didn’t capitalize on what I saw as tremendous business growth opportunities, and I may be kicking myself as time goes by. What have I learned from this? I’d say nothing, because I am still not positioned to do much different or better in 2021.

On a more macro level, 2020 was pure central bank led insanity. One need only look to the central bank balance sheet ending the year exponentially increasing from $125 billion to $550 billion. This money printing experiment is the equivalent of the central bank purchasing government debt which is then circulated into the economy through program spending. $550 billion divided by 38 million citizens is around $14500 per person in money creation, most of it in 2020. Add this to the out of control deficits and debt at all levels, look at the province of Ontario, its debt per share of population is over $26k, the federal debt is another $26k per person. This will never be paid back, a family of four will simply never have $50k plus to hand over to the governments to reimburse it for its prior bad decisions and management. Yet there is no topic that gets less attention among the general public than this egregious debt burden. Has all that cash been funnelled into real estate, bitcoin, and tech stocks? Seems so, and this bankster behaviour is contributing to the stratification of wealth in society which is the opposite of how it is supposedly intended. What a bizarre year.

Interest rates are at all time lows and can quite possibly go lower, as in negative. Interest rates cannot go up without crushing the consumer and the government debt machine requires interest rates be lower than the growth rate of the economy. One bank was supposedly offering .99% loans, with plenty of strings attached, that is free money. It is hard to argue against accumulating assets as a hedge against bad banker behaviour. If the government is going to defend and protect house values at the expense of any other sector of society (pity those retirees that must eke out subsistence from below inflation fixed income products) then by all means go and buy some property. Where does this end other than continual currency debasement and an eventual currency or sovereign debt crisis, I can’t say.

2020 comes to an end as a conspiracy theorists fantasy come true, construction remains a respite from this madness. Happy new year!