ning the

The Better Business Bureau is warning busi-
nesses that they may receive a phone call from
an individual purporting to represent one of the

-— major banks. The individual attempts to get the
> merchant's VISA machine number or debit card
». machine number...

Calls are. coming. into ‘the Bureau from
Courtenay to Campbell-River area, but it is ex-

n April a column appeared warning about
the possibility of a deflationary cycle. Evi-
dence has been mounting over the past few
months which would seem to confirm that we
are in fact entering a period of deflation.
Since that first article we have [eg
had an almost steady decline in
most commodity prices, the trou-
bles in world wide stock markets
have . spread’ and accelerated,
-- most currencies have weakened
and interest rates have continued
to fall: :
We fave. becoiic accustomed |
to dealing with the ravages of in-
flation. In an inflationary en-.
vironment it makes sense to
borrow money to buy asses
<which *-are’ increasing in”
~ price: It makes sense toi in
~ yest short term so that | you :
~ can take advantage of rising.
: interest’ “rates: It: makes

: ‘constantly’ rising in price. =:
“An-a deflationary: cycle n none of the: above

: ‘has to: change the way you: think and’ invest. It
a makes. no sense.to ‘borrow money to. ‘buy: an as-
~ set which may or will decline in. price. *

:' “tate prices. As property valueshave declined the. .
_ security of the loans are € lost and. at some point

eo Resthaven Drive
Sidney, B.C, VEL 39°

Pee nd “Geet TS: G id
——— ae et & . Sag

a tot

, ¥ SECURITY, a PERS SONA SAFE TV
Wee COMMUNITY OF FRIENDS

“+ RECREATION & SOCIAL PROGRAMS,
* MEAL SERVICES =
+ NON-PROFIT PRICE G

° ae LEN MONEY BACK UNE

ve

“sense to explore for natural resour ces which are S

-- While it’s tempting to argue that rates can
‘makes any, sense. To profit from deflation one:

Just look at what is happening in Japan. Banks 3
are failing there primarily because in the ‘past:
" they lent money based on extraordinary real es-

(GD NessITT BURNS

Munber of the Sank af Montreal Group of Comoantes ae

- HOUSING
IN BRENTWOOD BAY.

pected that businesses throughout Vancouver
Island will be targeted.

The BBB warns businesses and individuals
not to give out any financial information to any-
one claiming to be calling from your bank.

Anyone who receives any suspicious calls re

lating to this scam should call the Better Busi-
ness Bureau at 386-6348.

Lock in money for the long term

7 the borrower owes more money than the value

of the asset. At that point they either stop mak-
ing the payments or the bank forecloses on the
bai cal
_ Either way this generally leads toa further re
duction in the value of the asset.
_|_-As there is less demand for bor-
rowed money, interest rates fall.
The effects of falling interest
rates can be illustrated by look-
ing: at the pool of capital one
needs to accumulate to retire.

‘common to use a 10 per cent rate
“of return. So, for example if you

come. of $50,000 you
needed to accumulate
$500,000. Pegg os

“With | rates: now “at
about 5 per cent, to get the
same income you need $1

‘What hagpens’ if rates decline. further f from.
‘here? ‘The answer is, you need. more. money.:

much lower keep in mind. what's happened:

Ja apan.. ‘Their, interest rates are currently:1/4 of

In: period of defla yo

long term non-callable bonds...

“new ways of thinking. about. investing i is. Te
quir ed.

Raiph Sommerfeld, F.CS.L
- Senior Investment Advisor
Tel. (250) 655-2320

FOR SENIORS

ris ruin A

it i
ea oo

| ny) }
i ‘i oh
ee

A few years ago. it was not un--

wanted a retirement .in-

tgo..

“Jong term income stream. This means buying =

“We appear to be entering a new era where

gare, dv cde i
wet

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