Bank of Canada Rate Hike

[macdon02]

Proof again people react to price not vice versa. First rate bump the consumer ran out and bought what they were gonna as it was a signal rates were going up. Strong gdp? It's an artificial bump. Get ready for the bang as BOC is just got caught in a false move.

[sumdumguy]

Rates should never have been as low as they were with all the debt out there. In a free market supply and demand for credit would determine rate rather than central bank money printing which produced the asset price bubble everywhere economy. What good will suppressing rates even longer do? Have to get rid of all the excess cheap debt has got us sometime. Might as well get it on.

Exactly, government created and ignored the credit bubble and high property pricee with monetary and foreign policy. Now lets see how they try to undo the damage.

[errolanderson]

Proof again people react to price not vice versa. First rate bump the consumer ran out and bought what they were gonna as it was a signal rates were going up. Strong gdp? It's an artificial bump. Get ready for the bang as BOC is just got caught in a false move.

Macdon . . . You are right on-the-money.

[Stampsguy]

According to the realtors a 1/4% increase takes 2.75 % out of a persons purchasing power.

[errolanderson]

According to the realtors a 1/4% increase takes 2.75 % out of a persons purchasing power.

Interesting, . . . now times by two (2) . . . and maybe three (3) into October.

[ajl]

I doubt that there will be any further increases now. This was just Octobers rise a month early. Unless China is going broke and having to sell foreign securities like Canadian bonds and US treasuries. Something to keep an eye on. When that happens 10% interest is back in a flash. Remember the 1980s. China has more mal investment than anywhere else on the planet ie ghost cities and piles of commodities for the sole purpose of speculation.

[macdon02]

30 yr bonds are close to resistance and running out of time. I'm looking for a turn in the next couple weeks

[sumdumguy]

I doubt that there will be any further increases now. This was just Octobers rise a month early. Unless China is going broke and having to sell foreign securities like Canadian bonds and US treasuries. Something to keep an eye on. When that happens 10% interest is back in a flash. Remember the 1980s. China has more mal investment than anywhere else on the planet ie ghost cities and piles of commodities for the sole purpose of speculation.

Wouldn't 10 percent interest slow down the economy? Rather abrupt ending to the insanity but an ending anyway.

[macdon02]

Wouldn't 10 percent interest slow down the economy? Rather abrupt ending to the insanity but an ending anyway.

Any outsider is getting blitzed on bonds by the currency effect as their home currency is appreciating against any USD asset. Either currency reverses or they'll cry uncle right quick. Never under estimate what the USD is doing its the key to capital flow and where markets are headed. US assets are appearing cheap and why not hedge your home currency against the reserve? It's taken more places then Visa. There's an outside chance CAD goes to 88 but 85 ish more likely. At that point the majority will be thinking par and caught on the wrong side. This hunt for taxes is gonna get worse as exports will come to a standstill. Cue the pension crisis. We are entering the perfect storm imo.

[macdon02]

Realize today's 1/4% hike sounds like no big deal, but there have now been two (2) rate hikes recently totalling 1/2%. Consumers are now under huge debt pressure with many living paycheck-to-paycheck. This recent 1/2% increase has a sizeable impact on those caught in the debt squeeze (IMO).

Calgary real estate values are definitely in-decline right now . . . .

We've also effectively doubled the interest cost on govt debt