Trusted Tips and Resources

Trusted Tips & Resources

Trusted Regina Financial Advisor John Barabe explains Inflation.

John Barabe has an unwavering commitment to quality and service which has enabled him to build and retain a successful practice in Regina. He and his team believe that planning with honesty and integrity are cornerstones to improving clients' quality of life. He applies his knowledge to help clients make the right choices when considering all the product and service options that exist in today's marketplace.  In this article he gives us a little perspective and insight while ansewring the question does inflation matter.

Does INFLATION matter?

Let’s simplify inflation with a silly story: The U.S. government just printed and deposited 1 billion dollars into everyone’s chequing account. The first thing that happened is a 5-mile-long line up at the Ferrari dealer. But, will the Ferrari dealers sell their expensive cars at yesterdays price? Not a chance, because currency is now nearly worthless. 

 Above sports cars, there are exotic sports cars—and then there’s the LaFerrari! Base model starting at $1,420,112 U.S.

The purpose of my above silly story was to emphasize that printing does cause inflation. Further to that point, 78% of all money the U.S. has ever created was printed since January 2021. Please note that the M2 money supply chart was recently discontinued. I wonder why? What is the value of anything that can be produced for nothing?

Okay, enough theory. Commodities broke out to the upside (by Michael Oliver’s criteria) in October and is currently up ~28% since that breakout. He is predicting a ~50% climb in less than a year and we are on pace for his prediction to play out. 

As commodities are the basis for everything we consume, does it not make sense that costs (actual inflation) will also be increasing by about this amount? 

We have known for a long time that Statistics Canada and BLS (U.S. Bureau of Labor Statistics) understate inflation. Check out (see below chart) and the Chapwood index for carefully calculated inflation (both of these independent sources calculate inflation amounts and their results roughly confirm each other, and dispel the official calculation).

Understating inflation is done to save the government billions a year. Think about union negotiations when the official inflation is only 1%. This creates unfortunate negative affects, the payout of social programs and pension plans to name a few. Over time we end up with way less income than “actual” inflation would dictate we should have. 

What if inflation, real inflation, were to be 50% from October 2020 to October 2021 (matching the increase in commodities as discussed above)? If this were the case, I would guess that Stats Canada and the BLS would have to increase their official numbers higher, much higher. After all, there is a limit to how far you can pull the wool over people’s eyes.

If “official” inflation were to become 12% (still way below the above “potential” actual) a 5-year GIC (guaranteed investment certificate) becomes ~16% and mortgage rates would jump to ~20% (there is a profit spread for banks). A $1,905 a month payment ($500,000 house with a high ratio $450,000 mortgage at 2%) would become $7,267 a month

The likely outcome for many homes would be that the bank now owns them as this payment is much too high. The bank would then attempt to sell it to recapture the debt lent out.

House prices are dictated by the affordability of the monthly payment. For example, $7,267 is not affordable. Assuming $1,900 is still affordable the $500,000 house would have to fall in price (using the same high ratio 90% mortgage - now $120,000) to $135,000. That is a drop in value of -73% or a $365,000 loss. 

Our money forms the banks reserve (bank deposits are unsecured loans to the bank/credit union/trust company). It does not matter if we deposit to savings, chequing or locked in for a time period. From our deposits, the banks loan money out at a huge leverage. I was shocked when I looked up the reserve that Canadian banks set aside. It seemed as though it was a secret (finding specifics was nearly impossible). The reserve is apparently 0.62% on average for Canadian banks. Less than one percent. Let’s make it 1% to simplify how leveraged the banks are. 

For every $100 in deposits, they loan out $100/0.01 = $10,000. All the banks need to lose is $100 of their $10,000 block of debt to be bankrupt. Considering the above losses with only a 12% inflation rate, I believe that is a real risk. 

In addition to the above, the actual amount that CDIC (Canada Deposit Insurance Corp.) could cover in a system wide banking collapse (which would likely be the result of 12% inflation) is $6737 per $100,000. It is just not designed for a system wide collapse. I do believe the money needed will be printed, but is that not what caused the problem in the first place? I believe more printing will not solve the problem, but will make the problem worse.

Also think about the effect of your money sitting in the bank. If inflation is way higher than the understated official number, deposits are not being compensated. After tax and inflation, what will you gain? Or will you suffer a guaranteed loss? 

Why is it that no one is telling you about this but me? Why is this not front-page news? Should GIC’s still be rated low risk?

So, does inflation matter? I will let you decide. There is more to this story, much more. As this plays out, we will be here every step of the way. Our objective is to guide each of you to the best of our ability and do everything we can to protect and grow your wealth. This is evident with the strategies and investments that are recommended (and more than likely implemented) already.

If you have any questions, or just want to catch up, please feel free to touch base by email, phone or with an in-office appointment. 

John Barabe and his team carefully consider your needs, goals and dreams in order to implement a well-constructed financial strategy, so that you can have peace of mind about your hard-earned money and financial future. They can simplify your life by addressing your complete financial well-being, which encompasses everything from:

John Barabe is a Trusted Financial Advisor

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Trusted Regina Franchise Owner Bonnie Day Shares Tip's on Avoiding Dangerous Scams When Selling a Vehicle Online.

Tip's on Avoiding Dangerous Scams When Selling a Vehicle Online.

In our latest tip Bonnie Day, owner of the directory shares her thoughts on scams we should all try to avoid. 

As the owner of Trusted Regina, I have gained a level of skepticism much higher than most mere mortals. I frequently examine businesses to see if they are trustworthy and look for red flags as part of what we do on a daily basis.  So it would come as no surprise that I would utilize this superpower to ensure that I am not having the proverbial wool pulled over my eyes. 

Recently I listed my Harley Davidson for sale.  I carefully gathered the information, mileage, maintenance on the vehicle and any extras that I had added to the bike.  Took great images and prepared to sell.  I decided on two places to post to the world what a wonderful specimen my bike was in hopes that a savvy buyer would love and appreciate it as much as I have.  I then took it to the masses and posted it on Kijiji and Facebook Marketplace.  

This wasn't the first motorcycle I had placed for sale online so I knew that scammers would likely pop up as I have experienced in the past.   Within ten minutes of posting the first one came in, it was pretty easily identifiable as a scam. The second one, however, was much more interesting... But we will get to that later, for now, let's address the first one.

Enter Scammer #1 Paul Martins - Deployed overseas PayPal Scam

Paul contacted me stating: 

"I read through your advert and from what I have seen it's priced favourably compared to others so I want you to consider it sold to me because I am ready to buy it for the asking price and Presently I am out of town on duty in a remote area. Our phones have been disabled from voice calls as making phone calls is against the code of ethics of my job Military. I work in the army services civil contractor for the D.O.D field artillery unit and won’t be back until November 30th,  otherwise I would have called you.

So,I am ready to seal the deal right away and pay you via my PayPal account that is attached to my bank account as it is the only secure form of payment that I have access to right now.

So, kindly get back to me with your full name and PayPal email address and your cell phone number along with your final asking price so that I can initiate the payment immediately. If you don't have a PayPal account, it is absolutely free to set one up, kindly visit A shipper will be hired that will come for the pick-up upon the completion of the payment aspect of the transaction. Let me have the requested details to proceed with the payment if we have a deal.TY "

Let's break it down, Paul has access to the internet and initially contacted me via text from a 615 area code... Nashville Tennessee USA, I am in Canada.  If Paul was an active serving member as he claims he would be allowed to use cell phones for an hour or two per day in barracks, enforced not by the military itself, but by specialized subscriptions from telecoms providers, so he wouldn't have been able to text me from his "disabled" phone in the first place.  Also a little common sence works here:  If a service member is lucky enough to have his personal phone and send a text while deployed overseas he certainly isn't using it to text me about a Motorcycle he can't ride until after November.  I know my bike is amazing but it isn't that amazing!

Paul is trying to portray himself as someone I can trust, he has put himself in a role that is meant to instantly reduce your level of skepticism after all Service members are trustworthy right.  

Paul goes further He is going to give me the full asking price and send me the money via PayPal... a secure source of payments right.  In addition, Paul has conveniently given me the link to start up a PayPal account just in case I didn't have one.  He is also going to hire a shipper to come and pick up the bike.  Paul has red flags everywhere. 

A scammer, posing as a buyer, will fail to negotiate. They may ask a few standard questions to appear to be a legitimate buyer, but this is a facade. Most buyers will ask very specific questions.  The “immediate offer” is a classic scamming tactic.  Of course, it’s never ideal to settle for less than your asking price. 

But a buyer that doesn’t even attempt to negotiate or ask questions is most likely a scammer.  

The PayPal detail is important.  Paul has likely sent me a "fake link"  that sends me to a website that looks identical to PayPal but it is not!  Now if I had entered in all of my details to this fake website Paul would have all of my information: Name, Address, Credit card information and so on; essentially all of the stuff I don't want Paul to have. 

The other trick Paul may be attempting here is that the PayPal site and information is accurate however when Paul pay's me he is going to overpay me.  The “overpay” scam has several variations. In this one, the scammer will offer to pay you via PayPal or a similar service. Then, they will claim they accidentally overpaid you. The scammer will forward you a fake PayPal confirmation email as proof of payment, then ask you to wire them back the amount they overpaid. The trick is that they never paid you in the first place. But you actually paid them when you send them the “difference” they “overpaid.”  

Enter Scammer #2 Richard - VIN SEARCH SCAM ALERT

Richard sent me a text asking if the vehicle was still for sale and other normal buyer questions. 

  • How long have you had it?  
  • Can I come by tomorrow at 2 pm to see it?  
  • Can you provide me with a Motor Vehicle Report?  

It was an out of province number but that is not overly alarming in and of itself.  So I replied sure 2 pm works and sent him a VIN search from SGI showing that it was free and clear of any accidents.

Richard wasn't ok with the SGI VIN search and insisted that I run the VIN on a website he sent  

For me, this was a reg flag so I figured I would have a look.  I check out the website where it asks me to pay $26.00 to run a VIN number via credit card.  Sadly for Richard I'm cheap and had already run a clear VIN search for him and was unwilling to pay the $26.00 however I offered to reduce the amount of the search if he purchased the bike.  

Richard then started to get aggressive and said 

"I want it ran on registeryourvin,  I don’t trust people."

 At this point, I had figured out that Richard was a scammer, but I wanted to see where he would go with it. I decided to offer a compromise. I suggested to Richard that I run a VIN search on Carfax or a site of MY choosing. I told him that people are scamming sellers in this exact way and, dear Richard, I don't trust people either.  Richards reply was short:

I want registeryourvin report!

Sorry Richard I am NOT going to give you my name, address and credit card information so that you can steal from me.

The point is even if a buyer initially seems legitimate, at some point you need to trust your judgment even if something small appears strange.  It's not strange for a buyer to request a VIN search.  In fact, I initially thought that this made him a serious buyer.  But his insistence on where this VIN was run was what set off my alarm bells.   Here are some tips to look for when avoiding these types of scams.  


Here are some tips to avoid being scammed when selling online.

#1 -  Guard your personal information.  Never enter your personal or credit card information on a website a potential buyer has sent you! It may appear real but in all likelihood, it is NOT and they want to steal your money, identification or both.

#2 - Profile the buyer. If your buyer is legit — and reasonable — the sale will flow smoothly.  Exchanging text messages about buying a used car is normal these days, but push for a quick phone chat. As you talk with the potential buyer, pay attention to your intuition. If the buyer makes any unusual requests or if anything makes you uncomfortable, just wait for another buyer.

#3 - Never accept an offer to Ship the Bike/Car - This is a common scam anyone asking you or offering to ship an automobile is likely a scam and should be avoided. Even if they claim they are so “busy”, they’ll most likely insist you ship the bike. They’ll pay will a stolen credit card or send you a fake PayPal payment confirmation. 

#4 - Don't be overeager.  A real buyer will likely ask you questions about your vehicle and make you an offer that is below your asking price.  

#5 - Don’t let emotions cloud your judgment.  Some scammers will have a sob story or try and play on your heartstrings to convince you of their scam.  Think of it as a business transaction and nothing else.


If all else fails take your vehicle to a dealership or reputable Auto dealer and sell the vehicle to them.  

At Trusted Regina we share all kinds of tips to protect our community; we aim to ensure you have some peace of mind and information to help you.  


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