Economists are idiots.

[Klause]

Bank of Canada will raise interest according to CBC...


So none of them see we will be in full blown recession in 3 months?



Ontario is going to lead in growth... but not really grow.


The west is going to come to a stop. Our equipment MFGs are building and stockpiling... oil keeps dropping companies keep cutting jobs.


The bottom will fall out of the housing market as high paid workers get laid off...


But somehow this will spur inflation and the need for higher interest? Wtf so these people smoke?

[fjlip]

Maybe they are reading deflation as inflation, NOT, interest rates will DROP if the economy slides as predicted. Could a lower dollar save our ass?

[errolanderson]

Klause . . . totally agree with you.

The western Cdn oil patch washout is a Cdn economic problem. The Bank of Canada could very well be lowering rates into the last half of 2015. Also, the Cdn trade balance reported this morning was not good despite the falling loonie. The fallout and slowing exports trumps any consumer gains at the pump.

CBC . . . good grief

[Klause]

Error do you think we will see deflation in the next report? I'm thinking since the fall in gas prices is almost 40 cents, or 25% from the highs that'll have a trickled down in freight costs as well.

If we have deflation interest rates should drop .25 or .5

However I have no faith in our central bank... they seem to "do what the USA does".

[bucket]

Klause

You bring a good point about fuel costs.

Ever since a fuel surcharge was implemented on freight it has never disappeared.

Should be gone on rail freight for a while now as I am sure the railways will stock up on low cost fuel as far our as they can.

Freight rates should decline?

[food4u]

What is happening with diesel prices elsewhere because locally it is still 1.25/l the last time I looked at our local Coop..

[errolanderson]

Klause . . . the Bank of Canada may be forced to cut their bank lending rates later this year as Canada's recession deepens. This suggests mortgage rates could actually drop as housing prices drop, an unusual economic event.

And the U.S. Fed is in no position to increase rates (despite media hype to the contrary). American growth is actually quite frail as there are no signs of wage growth (a key indicator).

Canada's trade deficit (announced this morning) was disappointing because our oil shipments plunged in November triggering the biggest drop in nearly three (3) years.

Deflation has griped Europe and Japan and central bankers are now powerless to battle this situation. Europe's QE(IMO)will do little but kick-the-can and could ultimately make matters worst for Europe in the long haul.

This heightens the risk of another global debt crisis (IMO).

As far as Canada and deflation, we are already in it, but it will take months for government data and the CBC to catch up with this reality.

[Klause]

errol,

You've been watching markets much longer than I have... how many months is the Stats Can data lagging behind the real world?


I was surprised to see the volume of oil getting shipped drop... Was hoping lower prices (and lower rail costs to ship it) would cause oil exports to remain flat or even increase a bit.

I realize the world is awash in oil right now... but we have our fixed customers...

[boarderbloke]

This morning,

[URL="http://www.cnbc.com/id/102316429"]Euro zone slips into deflation[/URL]

[ado089]

Pop goes the bubble. What do you mean my $700K house is only worth the $225K it was in 2004??? I'd be more worried about the high cost oil explorers and producers not meeting their bond obligations and boosting the long end of the yield curve. I've seen number showing as much as 20% of junk bonds are oil realted. OUCH!

[boarderbloke]

also,

[URL="http://www.cnbc.com/id/102314476"]Are lower commodity prices here to stay?[/URL]

[boarderbloke]

I can believe this, as it happened with the DOW.

[URL="http://www.cnbc.com/id/102316098"]Europe shares rally on hopes of further ECB action [/URL]

[ado089]

The last 5 years have been about chasing the QE and stimulus from one region to the next. The ECB will do something, it will fail and the shit will hit the fan. Deflation will occur on an unprecedented level.

[cottonpicken]

Can somebody explain how the banking system survives deflation and how governments continue to function as tax revenues collapse and for shits and giggles explain how already under funded pension plans sink even further into the abyss without mass riots and people being strung up on street lamps?

[fjlip]

Might as well get more popcorn, Klause, this could be better than any movie. Sounds worse than apocalypse 2012...