In January I decided to close this political blog and leave the affairs of the state to others for the time being. May they serve us well in days of uncertainty.

In the meantime, I try to help my fellow citizens in other ways. With an understanding of the economy, and strategies to help us all cope with monumental changes and mounting dangers. Also with tools and knowledge which I think are vital. I will do this through my books, my speaking, my daily blog and through providing direct assistance.

Deceased, but not finished.

There is always hope, and reason to be optimistic. The greatest guide on the path forward is understanding.

For my daily blog on the economy, investment and survival strategies, go here.

For information on my books, including “After the Crash” and my public speaking schedule, go here.

For tools and knowledge to help you and your family, go here.

On the Hill, dudes, lock-ups are reserved for big news. They are also designed so that media flakes (are there any other kinds these days?) are forced to sit in a locked room for several hours reading actual documents, instead of just trolling for three-second sound bites. If it’s really important news, there are even sandwiches in there.

So, it’s coming. And today in Question Period two of the players in this enviro drama sat about fifty feet from each other, but directly in their mutual line of vision. On the floor of the House of Commons was Ambrose the environment minister, who the opposition pilloried for months, thinking she was an attractive Alberta lightweight they could trample. But Ambrose, so far at least, has stood her ground like a linebacker and gained a big following within the Conservative caucus.

Above her and looking on from the public gallery was Elizabeth May, the leader of the Green Party. Unlike the petite, angular, cool, brunette and impeccable Ambrose, May exudes an earth-motherliness punctuated by flying blonde hair, black glasses, an uninhibited laugh and lots of touching. It’s an interesting study in contrasts. Does it set the scene for conflict?

May insists no, as I bring her into the foyer of the House – forbidden territory, since she is not an elected MP – for an interview with MPtv. She says she’d be only too happy to congratulate Ambrose on a knock-out climate change strategy document, but quickly adds that she doesn’t expect to be doing so. I find the woman to be sharp, engaging and surprisingly political, weaving in anti-Conservative messages that seem to go deep beyond the environmental file. She’s also a networker, taking full advantage of my delivering her to this sacred spot to buttonhole Liberal environment critic John Godfrey and try to catch the eye of some of the media gods.

May is clearly frustrated that while she leads a national party with federal funding and candidates in every riding, she likely will not be part of any leaders’ debate in the next election or, for that matter, be taken seriously enough by these reporters milling around. So, this week is as crucial to her as it is to Ambrose. The stakes are enormous for both of them, just as they are for Canadians.

As I have stated, climate change is a defining issue, and this is a landmark time for a generational government. Either we will rise to the challenge, or we will not. Those scribes sitting in the lockup will be reading about mandatory emission levels, permission-based production, mandated clean air, water and renewable energy targets, the fostering of green technology and a strategy of sustainable development, or they’ll read about voluntary targets, an absolute increase in greenhouse gases, the economic supremacy of the oil sands and industry consultations.

A new green plan was not one of the government’s vaunted five priorities. It was not even a campaign promise, with the environment relegated to a trashing of Kyoto and a practical tax credit to get people on the train and the bus. But in politics a week’s a long time and eight months is almost a life. Now global warming is household stuff. An administration born of tax cuts and tough-love crime bills must react with conviction.

Unexpected, perhaps. But utterly unavoidable. And a moment now looking for a heroine.

This is not good. It shows that while sales activity is slowing due to unsustainably high prices, pockets of panic buying continue and that some markets (because real estate is a very local commodity) still have no real grip on reality. (The last time this happened was just before the 1989 property collapse.) Meanwhile comes news that sub-prime mortgage market has grown an unbelievable 50% in the first six months of 2006. In case you missed it, “sub-prime” refers to riskier loans such as new immigrants with no Canadian credit history, self-employed folks who can’t easily prove their income and people with bad credit ratings.

More news homeowners should know: About $2 trillion worth of variable rate mortgage loans are coming due in the States over the next two years, and most of those people will be facing higher loan payments, putting further downward pressure on a market already on the skids. Yes, it is America but, yes, its influence does wash over the border.

And, also this week, the 40-year mortgage! One of Canada’s major mortgage insurance companies, Genworth, has increased its payment play for homeowners from 35 to 40 years. This means lower monthly payments, more accumulated interest and – yes – five more years of indebtedness. In fact, critics are calling this the “heritage mortgage” because it may well get passed on through inheritances, along with a property. Coming next – 50 year amortizations.

All of this, combined with those other factors – economic and demographic – which I have spelled out here in recent days, should give average Canadian families some pause. After all, we have almost all of our net worth tied up in real estate, a situation which appears to have never occurred before. In any case, we do know for sure that (1) house prices have never been this high, (2) there has never been this much mortgage debt in existence and (3) never before have so many people bough houses with practically no down payment.

This will only end well if real estate prices go up forever, or at least for the next 20 years. And the odds of that?

The real estate bubble, now starting to deflate, of course has political considerations simply because most families have banked so heavily on one asset. We could have a lot of unhappy voters on our hands within a year or two – something of keen interest to any political analyst.

What to do?

Well, government cannot be interventionist here because that would just make the situation worse. No intentional increases in mortgage rates to cool things off, for example. No sharp end to the now-questionable practice of allowing 5% and 0% downpayments.

But action is possible. The first should be some words of caution from the Governor of the Bank of Canada or (if he’s feeling brave) the minister of finance, along the lines of those delivered by the boss of the US Fed. People need some gentle signals, and they need them quick, that even real estate can lose altitude, and that people buying with almost no equity should be careful, or wait for another day. To deny there is a bubble when Calgary houses have risen 50% in one year or when an average Vancouver single is $741,000, is to deceive the people. No public figure should be doing that.

Hopefully this will be enough to talk the market into an orderly correction, so the boom does not turn into bust (which would be a first). Other actions are possible (tightening credit, more stringent deposit requirements, more controls on the sub-prime market), but let’s not go there now.

The best action, of course, is that taken by real estate-rich and cash-poor families. If, as I predict, we are entering into a long-term slope downwards for residential real estate – thanks to demographics and the inevitable fallout of a decade of buyer excess – then people need to shed house and grow financial assets. Sell, downsize, swap or walk, will all be strategies (but be aware of the legal consequences of the last one).

If I could find a buyer today, I would jump at the chance. Go for a long (six-month) closing, with as much deposit as you can get, then wait to buy another place until February or March. Can’t imagine you would not do better in terms of price. I’d eschew those kinds of real estate which easily come into oversupply, like urban condos, especially those ridiculous and juvenile lofts. And go back to real estate basics – you get more house for the dollar buying resale than new, and always go for the worst house on the best street, since location still is the biggest determinant of value.

Finally, as Canada goes green, as energy costs rise and as people reassess our basic accommodation needs, energy-efficient, well-designed, well-located and age-appropriate housing will command a premium.

If you care not about any of the above, yeah, buy that big sucker on a hill overlooking Calgary. We’ll pray for you.