This may be the end of low interest rates.

[Ken07AOVette]

And our Dollar is up, plus gas apparently shot up .15c overnight.

The swing is starting to come back?

OTTAWA—With the Bank of Canada nearing its next policy decision, governor Stephen Poloz is reiterating the message that his 2015 interest-rate cuts appear to have done their job.

Poloz said in an interview broadcast on business news channel CNBC that the Canadian economy enjoyed “surprisingly” strong growth in the first three months of 2017 and he expected the pace to stay above potential.

The comments fed speculation about a Bank of Canada rate hike as early as its next scheduled announcement in two weeks. If the central bank increases its key rate, the big Canadian banks will raise their prime rates, driving up the cost of variable rate mortgages, other loans and lines of credit tied to the benchmark rate.

Poloz credited the two rate cuts introduced by the bank in 2015 for helping the economy counteract the effects of the oil-price slump, which began in late 2014. The reductions also helped increase the speed of the adjustment, Poloz added.

“It does look as though those cuts have done their job,” said Poloz, who was in Portugal on Wednesday to participate in a forum hosted by the European Central Bank.

“But we’re just approaching a new interest rate decision so I don’t want to prejudge. But certainly we need to be at least considering that whole situation now that the capacity, excess capacity, is being used up steadily.”

More “hawkish” statements in recent weeks by Poloz and the bank’s senior deputy governor, Carolyn Wilkins, have suggested the bank is moving closer to its first rate increase in nearly seven years.

A softer-than-expected inflation report last Friday led some analysts to believe the bank might wait until the fall or later before introducing a rate increase.



https://www.google.ca/?gws_rd=cr&ei=...+interest+rate

[Brian Adams]

Originally Posted by Ken07AOVette

And our Dollar is up, plus gas apparently shot up .15c overnight.

The swing is starting to come back?

OTTAWA—With the Bank of Canada nearing its next policy decision, governor Stephen Poloz is reiterating the message that his 2015 interest-rate cuts appear to have done their job.

Poloz said in an interview broadcast on business news channel CNBC that the Canadian economy enjoyed “surprisingly” strong growth in the first three months of 2017 and he expected the pace to stay above potential.

The comments fed speculation about a Bank of Canada rate hike as early as its next scheduled announcement in two weeks. If the central bank increases its key rate, the big Canadian banks will raise their prime rates, driving up the cost of variable rate mortgages, other loans and lines of credit tied to the benchmark rate.

Poloz credited the two rate cuts introduced by the bank in 2015 for helping the economy counteract the effects of the oil-price slump, which began in late 2014. The reductions also helped increase the speed of the adjustment, Poloz added.

“It does look as though those cuts have done their job,” said Poloz, who was in Portugal on Wednesday to participate in a forum hosted by the European Central Bank.

“But we’re just approaching a new interest rate decision so I don’t want to prejudge. But certainly we need to be at least considering that whole situation now that the capacity, excess capacity, is being used up steadily.”

More “hawkish” statements in recent weeks by Poloz and the bank’s senior deputy governor, Carolyn Wilkins, have suggested the bank is moving closer to its first rate increase in nearly seven years.

A softer-than-expected inflation report last Friday led some analysts to believe the bank might wait until the fall or later before introducing a rate increase.



https://www.google.ca/?gws_rd=cr&ei=...+interest+rate

Thank you for copying and pasting
this very important news here.

[rugatika]

What would an interest rate increase do to the housing market/bubble?

[wildwoods]

Originally Posted by rugatika

What would an interest rate increase do to the housing market/bubble?

With our busy yet fragile building market, $100-$200 per month could destroy any momentum we have going. Even speculating landlords will keep their money under the pillow. Now is not the time but we do need to face it soon. The great thing is that the lenders are still relatively stringent especially to real estate investors (unless you're really good at messing with the system). Hopefully people left that cushion to absorb any unforeseen costs...

[Ken07AOVette]

Originally Posted by Brian Adams

Thank you for copying and pasting
this very important news here.

And thank you for your always insightful and topic relevant reply.

[Badgerbadger]

Originally Posted by Ken07AOVette

And our Dollar is up, plus gas apparently shot up .15c overnight.

The swing is starting to come back?


https://www.google.ca/?gws_rd=cr&ei=...+interest+rate

Gas is up because the long weekend is coming.

[Ken07AOVette]

Originally Posted by Badgerbadger

Gas is up because the long weekend is coming.

Oh absolutely. Just another way to screw us at the pumps. I'm surprised there isn't a nozzle lubricant at every 7-11

[dmcbride]

Originally Posted by rugatika

What would an interest rate increase do to the housing market/bubble?

I am more concerned with the out of control borrowing all over the world. Looks like the central banks are going to tighten credit.

http://business.financialpost.com/ne...b-116539e94629

"Global borrowing hits record $217T, as central banks prepare to tighten credit"

[molly]

I just got a letter from RBC advising me my rate on my line of credit will go up 6 points in August. I called them and was told they sent out half a million letters. They said their cost of borrowing was going up. Must be going up a LOT! My rate has now doubled from 6 to 12%.

The banks make such massive profits already. Their fees just keep increasing even though most people now bank online. I wish I knew of a cheaper option besides banks for loans!

[jrowan]

Originally Posted by rugatika

What would an interest rate increase do to the housing market/bubble?

Home prices and the base interest rate are inversely related (same as bonds). In general when rates go up home prices go down.

However, that being said even if central banks increase interest rates they will be doing it slowly. When you are this close to 0% any increase has a fairly large impact, but a decrease has barely any. The BoC makes interest rate decisions in January, March, April, May, July, September, October, and December baring any economic crisis. So event if they raised rates by 0.25% at every meeting (an unlikely possibility) in the next year rates would go up 2%. 2.5% is still fairly low, and is just above the inflation target.

The jump of 6% at RBC on personal line of credits (assuming unsecured by the current rate) is just a way for them to make guaranteed money even if some people fail to pay.

[Drewski Canuck]

WHO are the Low Interest Junkies? ALL THE GOVERNMENTS OF THE WORLD???? Yup!!!

You see, when the G 7 - 1 meet (used to be 8 of them), or the G 20 meet, they all compare how badly in debt they all are. Whether it is Japan, US, EU, Canada, or some third world tin pot republic, the Governments of the World are mired in DEBT!!!!

So, who controls the world Interest rates, ... . Governments!!!

So if an economic recovery is tied to low interest rates, and Governments are unable to break the backs of the people any more with Taxes to pay for their spending, why do you think there is any incentive to increase interest rates???

(I'm just a simple country boy, so help me out here.)

Now for the REAL thugs, the banks. You see, if I borrow from the Bank of Canada at prime rate (approximately .05 %) and I LEND on a Mortgage, which is insured anyways, at 2.5 %, how much did I make???
(pause for dramatic effect in case you are still thinking about this one ....)

2 % right??? Wrong.

I made a Profit of 400 %!! ( Cost of the "product" (money) was .05. Sold it for 2.5. Yes, the volume is relatively small, and is dependent on the amount borrowed, but the Percentage profit is enough to gag a LIBERAL, or an NDP, or a Conservative for that matter. These are the stooges who let this go on, but then again, they need profits made so Taxes get paid.

Now for Economics 101. If I give you a Credit Card at 15 %, and use deposits on which I pay .25 % to lend this money .... how much did I make???

Anyways Ken,

The reason that we have these news headlines of Interest Rates "skyrocketing" is to get people to hurry up and borrow more money "before the rates go up".

The system is broken, and everyone world wide knows that the Governments will not be able to pay the debt at current interest levels for 3 generations, let alone more debt that we are piling on by the minute.

What you should really be worried about is the next financial collapse.

We Almost had it when China had a run on its Stock Market. China ended up buying the stock on the major Chinese Companies so that the domino effect of Stock Market Collapse did not happen. China had the money to do the necessary support with its US foreign reserve.

We almost had a collapse in 2009 with the US having to do "quantitive easing" to shore up the big investment brokerages on Wall Street and the mortgage losses. The US could borrow more money to do this.

What happens when say the EU, Britain, Japan, face this crisis and DO NOT have the Money. We are so economically interconnected in the modern world that the whole house of cards will fall.

Now you can worry.

Drewski

[lmtada]

Looks like some arm twisting from Trump Administration. Remember trade talks couple weeks ago, blackmail.

http://www.greaterfool.ca/2017/06/29/jeez/

[pikergolf]

Originally Posted by molly

I just got a letter from RBC advising me my rate on my line of credit will go up 6 points in August. I called them and was told they sent out half a million letters. They said their cost of borrowing was going up. Must be going up a LOT! My rate has now doubled from 6 to 12%.

The banks make such massive profits already. Their fees just keep increasing even though most people now bank online. I wish I knew of a cheaper option besides banks for loans!

You need to do some research. Six points does not mean six percent.

[Ken07AOVette]

Originally Posted by pikergolf

You need to do some research. Six points does not mean six percent.

If I owed any money and had to deal with a 6 basis point increase, I could live with that for sure.
6 percent to 12 percent though is a 100% increase, that would put us into what, 1983 rates and Bankrupt most of Canada?

With just the threat of an interest rate hike, I am glad I didn't buy that cabin in Prince George. On my line of credit the interest worked out to $483/month which is doable but add 2% or more to that and I will stay home stashing money until I retire.

[HalfBreed]

Apparently this is the lowest the gaspump price has been in the province in near a decade for this holiday week-end.

YMMV.

[270person]

Originally Posted by HalfBreed

Apparently this is the lowest the gaspump price has been in the province in near a decade for this holiday week-end.

YMMV.

I haven't seen any price jump either. 84.9 all around Edm today.

[Sloughsharkjigger]

Buy a bigger mattress everyone..

The worlds finacial system is setting up for a major re-boot... it has too!

The worlds finacial system is getting so convoluted the so called experts/controllers can't get a handle on it. The only thing that doesn't have an impact on world finances is the planet Pluto.

Net-worth versus accumulated debt versus the cost of servicing... three very different powers competing against each other.

Through in some world turmoil, natural disasters and health care and the soup gets really thick.

[Drewski Canuck]

Actually, for the developed world, the biggest drag on Government spending is ... OLD PEOPLE!!!!

Yes, we are living longer and longer. Just at a Prayer service for a 90 old lady, her Husband is still alive.

The Baby Boomers will be using up pension resources and healthcare resources for Decades to come. The Tax Base in the young workers is not enough to pay the debt the Baby Boomers created, and the tax drain that they are going to create.

Governments in the Developed World are shaking in their boots for a reason. The Baby Boomers paid a lot of taxes in their time and now its their turn to collect the benefits.

This is what did in the Big 3 Auto makers. In the US, the Unions had health care paid by the Companies after retirement. Imagine a heart valve transplant on an 80 year old who has not made the Company a dime for 15 years or more. Then after that $100,000 surgery, the retired employee collects another 10 years of Pension before another slug of healthcare costs when he finally dies.

As for interest at 12 % in the 80's, that actually was palatable. It was the 18 % in 1983 that killed the World economy. This time its different. Its just the massive debt load on all the World Governments as well as all the future expenditures on the horizon.

Drewski

[mgvande]

I know allot of people are to the hilt. But i saved and never went the way of excess and was debt free at 34yrs. I'm in my early 40's now and I'm getting punished for being a saver. In hind sight I should of blew more money and had fun. I guess I'm still young....

[rugatika]

Originally Posted by mgvande

I know allot of people are to the hilt. But i saved and never went the way of excess and was debt free at 34yrs. I'm in my early 40's now and I'm getting punished for being a saver. In hind sight I should of blew more money and had fun. I guess I'm still young....

I don't think the savers have even seen the start of it. People with money in their accounts will be the next natural target for Canada Revenue folks.

[pikergolf]

Originally Posted by rugatika

I don't think the savers have even seen the start of it. People with money in their accounts will be the next natural target for Canada Revenue folks.

Hey, they are already targeting TFSA that earn to much.

[fishtank]

up to 1% .... road to recovery

[play.soccer]

Originally Posted by fishtank

up to 1% .... road to recovery

road to disaster.

[lmtada]

One more time for 2017. Four for 2018. Ratchet up.

http://www.greaterfool.ca/2017/09/06/balanced/

[6.5 shooter]

JT will screw the country up just like Daddy...wait and see

[Bub]

He might and probably will, but he is not the one setting the rates.

[67ZL1]

At least the rates are heading in the right direction. The ones complaining are the ones that are way overextended trying to keep up with the Jones's. I think southern BC, Ontario and east need a bit of a reality check that the rest of us in the west are going thru.

[Ken07AOVette]

Originally Posted by 67ZL1

At least the rates are heading in the right direction. The ones complaining are the ones that are way overextended trying to keep up with the Jones's. I think southern BC, Ontario and east need a bit of a reality check that the rest of us in the west are going thru.

Well, I am debt free and not complaining, this thread was more of a 'buckle down' and 'things are improving' thread.

[lmtada]

Originally Posted by 67ZL1

At least the rates are heading in the right direction. The ones complaining are the ones that are way overextended trying to keep up with the Jones's. I think southern BC, Ontario and east need a bit of a reality check that the rest of us in the west are going thru.

The cheap zero interest money has created bubbles everywhere. Real Estate, Stocks, Automobile, government spending. Correction is coming. Pain for all Markets, and Governments.
However government will have difficulties balancing budgets with increased interest rates. Expect higher taxation to makeup differences. Pain is coming until a tax revolt.

[67ZL1]

Originally Posted by Ken07AOVette

Well, I am debt free and not complaining, this thread was more of a 'buckle down' and 'things are improving' thread.

Sorry if I came across insinuating that you were complaining. Which I knew you weren't. This rate hike and hopefully more down the road is good news for the people that saved and invested wisely, paid down their mortgage or LOC instead of making minimum payments.