Bank of Canada Holds Firm Again

The Bank of Canada has held its overnight rate range at 0.75%-1.25%. I have highlighted the sections of the press release that have changed since the last release at the end of May:

The global economic expansion is proceeding broadly as projected in the Bank’s April Monetary Policy Report (MPR), with modest growth in major advanced economies and robust expansions in emerging economies.  The U.S. economy has grown at a slower pace than expected and continues to be restrained by the consolidation of household balance sheets and slow growth in employment. While growth in core Europe has been stronger than expected, necessary fiscal austerity measures in a number of countries will restrain growth over the projection horizon. The Japanese economy has begun to recover from the disasters that struck in March, although the level of economic activity in that country will remain below previous expectations.  In contrast, growth in emerging-market economies, particularly China, remains very strong. As a consequence, commodity prices are expected to remain at elevated levels, following recent declines. These high prices, combined with persistent excess demand in major emerging-market economies, are contributing to broader global inflationary pressures.  Widespread concerns over sovereign debt have increased risk aversion and volatility in financial markets.

In Canada, the economic expansion is proceeding largely as projected, although the expected rotation of demand is somewhat slower than had been anticipated. Household spending remains solid and business investment robust. Net exports remain weak, reflecting modest U.S. demand and ongoing competitiveness challenges, particularly the persistent strength of the Canadian dollar. Despite increased global risk aversion, financial conditions in Canada remain very stimulative and private credit growth is strong.

Following an anticipated slowdown in growth during the second quarter due to temporary supply chain disruptions and the impact of higher energy prices on consumption, the Bank expects growth in Canada to re-accelerate in the second half of 2011. Over the projection horizon, business investment is expected to remain strong, household spending to grow more in line with disposable income, and net exports to become more supportive of growth. Relative to the April projection, growth in household spending is now projected to be slightly firmer, reflecting higher household income, and net exports to be slightly weaker, reflecting more subdued U.S. activity. Overall, the Bank projects the economy will expand by 2.8 per cent in 2011, 2.6 per cent in 2012, and 2.1 per cent in 2013, returning to capacity in the middle of 2012.

Total CPI inflation is expected to remain above 3 per cent in the near term, largely reflecting temporary factors such as significantly higher food and energy prices. Core inflation is slightly firmer than anticipated, owing to temporary factors and to more persistent strength in the prices of some services. Core inflation is now expected to remain around 2 per cent over the projection horizon.  Total CPI inflation is expected to return to the 2 per cent target by the middle of 2012 as temporary factors unwind, excess supply in the economy is gradually absorbed, labour compensation growth stays modest, productivity recovers, and inflation expectations remain well-anchored.

The Bank’s projection assumes that authorities are able to contain the ongoing European sovereign debt crisis, although there are clear risks around this outcome.

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be eventually withdrawn, consistent with achieving the 2 per cent inflation target. Such reduction would need to be carefully considered.
This was a significant re-write of the Bank’s periodic overnight lending rate press release, not surprising given recent developments in the US and Europe. It looks as if the Bank is setting the stage for an eventual raising of rates but their required optimism surrounding the European debt situation is, well, a bit optimistic in my view. Sorry, savers!
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[…] Vansanity at vancouvercondo.info 19 Jul 2011 3:40pm – “This week I’ve had the conversation with 3 friends that are planning on moving away due to the disproportionate ratio between the cost of living:income. One is going to Calgary and the other two are going to UK and Australia (Australia has its own housing bubble to deal with but it sounds like the incomes are higher in their field).” […]

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[…] people observer at vancouvercondo.info 19 Jul 2011 8:34pm – “It seems to me that people in Van don’t have a strong appreciation for the amount of wealth that is actually coming across the ocean currently and in past years. We can really only look at anecdotes here since it is not observed through income. I am heavily exposed to the current wave of asian immigrants – i could only dream of the wealth that I have seen and it honestly churns my stomach. Simple examples of new immigrants whom, on first glance I would never have known had that kind of wealth. The current wealth is much greater, and deeper than that from Hong Kong and Taiwan. 1. family of three, wealth generated offshore (which is why there are semi-annual trips and wire transfers): two condos paid cash, looking… Read more »

midnite toker
midnite toker
9 years ago

@Anonymous: I'll give you a "phatty" clue… Something growing in all these rented houses and remote forest ranges.

bubba
bubba
9 years ago

@Van MD:

Re the Richmond House…

Further down Gilbert…almost to the dyke….was a rancher home that I beleive that Chinese guy they are trying to deport for the last 10 years

http://www.bclocalnews.com/richmond_southdelta/ri

Thousands of kilos of methamphetamine was found in the spacious three-car garage at 13451 Gilbert Rd., directly across the street from the Lulu Island Wastewater Treatment Plant. That home had previously been owned by alleged smuggling tycoon Lai Cheong Sing, also known as Lai Changxing, though investigators insist the drug investigation was not linked to him.

space889
space889
9 years ago

@keeperofthederp: Please put a not SFW warning next time!!

fixie guy
fixie guy
9 years ago

@82 Anonymous: For those who want a little more than the typical press gloss, CIBC's report below.

http://research.cibcwm.com/economic_public/downlo

A little scary to think that, even weighing housing as much as they do in the narrative, Vancouver's performance is mid-pack. Take that away and…

Check out the MLS Average Price chart on page 6 and have a nice day. 😉

Patiently Waiting
Patiently Waiting
9 years ago

About time. Most fraudulent citizens live outside Canada.

"Ottawa intends to revoke the citizenship of 1,800 people it believes obtained their status through fraudulent means, Immigration Minister Jason Kenney says.

The decision to revoke citizenship is rare, and a large-scale crackdown such as this one appears to be unprecedented. Fewer than 70 citizenships have ever been revoked since the Citizenship Act was passed in 1949."

http://www.cbc.ca/news/politics/story/2011/07/20/

Best place on meth
Best place on meth
9 years ago

@Frank:

"Trading" dirty money for clean money.

Some call it laundering.

Anonymous
Anonymous
9 years ago

@Anonymous:

At least they have maple syrop. What do we export?

Anonymous
Anonymous
9 years ago

Vancouver's economy now ranks 7th in Canada right behind that maple syrup export powerhouse, Quebec City.
http://www.vancouversun.com/business/technology/T

keeperofthederp
9 years ago

@Van MD:

you do the talking

i'll post the shoops

photos of the DTES will do nicely, mmm?

Van MD
Van MD
9 years ago

@bubba: cranial enema? sounds like a good moneymaker if I can recruit some volunteers to help me on a study on that :) @keeperofthederp: hahaha your posts are so utterly,weirdly, out-of-place'ly, randomly awesome, I'm sure it's rendering those house-pumpers quite confused 😀 Good job. Now I'm not sure on the avatars, will attempt to get myself one later this week. @BPOM so I started a thread there re: the house in richmond that listed at $8.5M and sold at $6.85M. It was soon pointed out by several users that it was initially purchased at 4.8M. Sold at 2M profit, albeit not at the 8.5M price tag which it was fishing for. So after taking some jabs from the pumpers (and actually quite a few supportive voices from the rational/bearish crowd), I delivered my counter-attack: "haha, I'm just an outsider who… Read more »

keeperofthederp
9 years ago

hold your applause

https://downandoutinvancouver.files.wordpress.com

shenzen tiger is a serious pumper bull douchebag, and so is his little cohort, mahakala – they're all over the place. we'll see how long this account lasts. then the process will begin anew.

does anyone want a tutorial for more organized raiding? it can be tough to navigate because you can't google translate the button icons, but i figure if i screen cap the step by step process to setting up an account it would take anyone 1-3 minutes to slog through and start posting.

– are avatars only for donators on this board? i can't seem to find the setup option – can you steer me in that direction?? i am flying blind, but not doing too bad, IMO. 😉

bubba
bubba
9 years ago

Riba…..interesting lecture re usury.

http://www.youtube.com/watch?v=8x9VbDOBpGc&fe

keeperofthederp
9 years ago

@Frank:

lol @ trader

Devore
Devore
9 years ago

@Frank:

WTF is ‘trading’ anyway?? Trading what?

You know, import-export /wink /wink

bubba
bubba
9 years ago

Oh geez…

Don'tcha get it?

Anecdote:

An Asian gal we know was royally po'd

3rd generation…spoke perfect English.

At her kids' school , Principal assumed that she was HAM.

She was insulted…via visual appearance.

Principal was "upset" because if her kids were HAM aka ESL…the Gov't would have provided the scholl with about $3000 in extra funding.

My Euro "trash" heritage, as DP's with F*ck all after WW 2, had to be sponsored to Canuck duh…and pay for "Engrish" lessons before allowed into Public School system.

HAM/ESL is a gravy train for Public Sector.

Boy..some of you VCI posters need Van MD services for a cranial enema…

paradox
paradox
9 years ago

@ frank "WTF is ‘trading’ anyway?? Trading what?" there isno is no problem with the trading, we dont care what he trades in Shanghai. The issue is that according to our laws, this guy is the perfect case of the deemed resident for tax purposes and CRA must be after these guys to see if they declare their worldwide income for tax purposes in Canada as required by law. For some reasons, CRA seems to be turning a blind eye on the vast abuse of our system. The way I see it, is rather his wife , family , parents and grandparents are getting free health care here and child benefit payments as they dont work here and dont declare any income and there is no chance in hell that chinese making money in china will declare it to CRA… Read more »

bubba
bubba
9 years ago

@white payer:

Well…..this has gotten out of hand…

I'm not sure about anonymous' bitch….call a spade a spade.

The powers than be have done a Roger Nielson…..waved the white flag ……and are saying in coded language or otherwise, that BC residents are peons to be tolerated…we'll use semiphor if need be to let Cathay Pacific flights in.

The view is better and more peripheral if one's head's out of ass.

Not racist…I don't care if its' Euro or Martian wealth.

If this satellite $$$ BS goes on much longer , this berg is TOAST.

Who the f*ck is gaining?,….answer = retarded politicians, bureaucrats and maybe 30 development companies. That's democracy eh….excluding 99.99999999% of the population. Talk about a gang bang

Oh F*ck……..

people observer
people observer
9 years ago

actually I do not blame the chinese at all, despite the unease the amount of wealth being transferred. the immigrants are looking out for their families and providing what they can. One issue is the speed at which the capital flows have entered the relatively small Vancouver market. Things are shifting quickly and i don't think that will abate.

Frank – It is Shanghai – so like New York, probably trading in equities.

Anonymous
Anonymous
9 years ago

I used to come to this site for intelligent banter with bulls and bears about the real estate bubble. Lately this place has turned into a place where trolls and racist roam. To me this is the sign that the bubble is truly over. I wish most of these people would grow up( most of you guys are 'adults') or at least act civil.

Frank
Frank
9 years ago

Yahoo article on the Chinese HAM buyers.A "trader' buys a $4.3 Million house, because 'I want my family to be comfortable' while he is in Shanghai – 'trading'

WTF is 'trading' anyway?? Trading what?

http://ca.finance.yahoo.com/news/Vancouver-real-e

Keeping An Eye On Th
Keeping An Eye On Th
9 years ago

@people observer: Yea yeah, we get the picture.

So why has mortgage debt grown to well over 1.1 trillion if so many rich people are buying cash?

keeperofthederp
9 years ago

@bubba:

bubba: amen

that's why we must wage reverse psy-ops
http://www.youtube.com/watch?v=PrkHtqjXpB0&featur

woops that's glenn gould
http://i54.tinypic.com/v5xz5f.jpg

white payer
white payer
9 years ago

@white payer:

And one more thing – for a few rich ones to exist, there's gotta be thousand-fold more of poor suckers around.

As the US is sinking deeper and deeper into a depression and peoples' misery riches new levels, few rich, fat fucks pay hundreds of thousands of dollars for some obscure classic cars at Las Vegas auction every weekend. There's no financial crisis there, no?