Who wants a 50 cent dollar?

With rumors of another rate cut, Rob Carrick points out 8 reasons he thinks that’s a bad idea. The very first reason? The Looney will fall even further against the US dollar.

For eight years, the Bank of Canada has been trying to encourage economic growth by lowering interest rates. It’s so not working.

In fact, lower rates are hurting a lot of people more than they’re helping. We have to at least acknowledge this as speculation of yet another rate cut grows. It could come as soon as Wednesday, which is the date of the next rate announcement from the Bank of Canada.

The central bank considers the entire economy when it sets rates. Now, let’s look at things from the point of view of everyday people. Here are eight reasons why the Bank of Canada shouldn’t cut rates any lower.

1. The dollar will fall even more: The most disruptive force in personal finance right now is the falling dollar. That’s because it’s hitting us all in a vulnerable spot – our grocery bill. Helpful for exporters, a weak loonie is a tax on families and snowbirds who must change Canadian dollars into U.S. currency. Last week, the dollar fell below 70 cents (U.S.) for the first time since 2003. A lower dollar adds downward momentum.

Read the full list over at the Globe and Mail, although a number of them are directly connected to a dropping looney.

The one group that a dropping looney should help are exporters as their products get cheaper for foreign buyers, but Jayson Myers, the head of the countries largest exporters association says don’t bother.

“Interest rates are low already. A little bit of dollar stability would be better.”

As an interesting aside, in 2002 when the CAD was hitting record lows Treasury Board President Scott Brison said it was

“a pay cut to every Canadian, a drop in our standard of living and a reflection of the fact that Canadians are getting poorer as Americans are getting richer under the watch of the government,”

Scott Brison is now a key cabinet minister and top economic aide to Trudeau.

 A hat-tip to southseacompany for the links.

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crabman
Guest
crabman

73, As I pointed out the other day, Vancouver RE is unchanged in $USD over 5 years, SP500 up 40%.

w
Guest
w

People who blindly listened to the mass media and bought Vancouver Real estate are light years ahead of supposed “really smart professional analysts and portfolio managers”. HA-HA-HA!

“Had the pleasure of meeting a few of the forum characters. Most casual readers of this forum have no idea how many really smart professional analysts and portfolio managers read and contribute to this site. VCI is without a doubt the top online real estate forum in the country.”

– Ben Rabidoux

http://vancouvercondo.info/2012/11/a-note-from-ben-rabidoux.html

Gnomes of Zurich
Guest
Gnomes of Zurich

Home prices up…no worries.
Tomato prices up… oops, second thoughts.
Go figure.

Dave
Member
I wasn’t surprised they held tight on rates. Even our exporters are screaming at them to quit killing the dollar. At this point, nobody wants a lower dollar. The economic problem in Canada isn’t aggregate demand. It’s a downturn in the resource sector. No amount of interest rate cuts is going to fix that. What it will do is further inflate our housing markets and squeeze consumers with inflation. Now the BOC is cutting growth forecasts. If the US slows down, I think we go back into recession. I think lower rates at that point will just be pushing a string. The only thing to keep us growing will be government spending. I’m sure we’ll see a lot of those ‘shovel ready jobs’. Ya right… more like a lot of pork barreling. If you’re in the social engineering business, times… Read more »
Oracle
Guest
Oracle

Mainstream media silent on pending Alberta housing crash. They don’t want to create a panic. Maybe a 30-40% fall in prices is possible.

Vancouver insulated because we here all know where the money is coming from.

Oracle
Guest
Oracle

Best investment in Canada over the last decade has been Vancouver real estate. By a wide margin.

Stocks are tanking.

w
Guest
w

Forget China and oil, this global stock market rout has much deeper causes, warns investing guru

http://business.financialpost.com/investing/global-investor/forget-china-and-oil-this-global-stock-market-rout-has-much-deeper-causes-warns-investing-guru

Maybe the Fed will throw more free money at the stock bubble to keep your portfolios afloat?

Cat in the hat
Guest
Cat in the hat

#66,

The price of Tomato at Safeway has locked some sense out the Poloz.

would-be buyer
Guest
would-be buyer

I’m actually surprised Poloz stayed pat…http://www.cbc.ca/news/business/interest-rate-poloz-1.3411621

tedeastside
Member
tedeastside

most admired cities in the world

http://www.gfk.com/insights/press-release/paris-wins-back-most-admired-city-from-london/

vancouver didn’t even make the list of 50 cities, i guess not everybody wants to go kayaking in the cold , Vancouvers local media didnt pick this up either

I'm with Stupid V
Guest
I'm with Stupid V

@50 LoL.

This guy is no better than Trump. Nice to see who you support buddy.

I'm with Stupid ^
Guest
I'm with Stupid ^

Facepalm…. Um casino is like the best way to launder money.

Softy
Guest
Softy

After they repealed the head tax, casinos are the only alternative.

Softy
Guest
Softy

“if you want to see society get some benefit from HAM support expansion of casinos and gaming. it’s the one thing that the government is more than willing to do if the community supports it.”

Even better, the gov should establish Chinese language casinos to encourage even more HAM gaming. It is the only way to get them to contribute to public revenues

Yunak
Member
Yunak

@53

” I think there a lot of mad people who would get out there and vote.”

Right, crowd voting would be much better option than crowd chasing HAM around with feculent sticks and paddles.

Lurker
Guest
Lurker

Wow. Booming sales today. This is nuts.

Vanco
Guest
Vanco

over 200 sales today, really picked up! I wonder what would happened when the CNY comes and they really go shopping.

@ 53. Yes, it really makes sense to punish people who took a risk and reward those entitled bears, which by the way is a small percentage given the 70% Canadian home ownership.

Yunak
Member
Yunak

@55

Nice, bring it on more and more HAM. This perpetual shitmill will run forever…

Whistler or bust?
Guest
Whistler or bust?
Whistler or bust?
Guest
Whistler or bust?

And things just keep getting better in the BPOE!

Tell me again how high real estate prices is good for the province?

http://www.theglobeandmail.com/news/british-columbia/vancouver-building-owners-feel-sting-of-soaring-commercial-assessments/article28276386/

paulb
Member

New
273
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TI:7087

http://www.paulboenisch.com

Whistler or bust?
Guest
Whistler or bust?

I have never voted NDP in my life but if they built a strong platform advocating the taxing of foreign ownership and vacant homes I might just consider it.

I am amazed at the lengths that Kristy Clark is going to to keep this bubble inflated. If I was running the NDP I would make foreign ownership a major if not the major election platform. I think there a lot of mad people who would get out there and vote.

I would have to balance this against shitty unions running the province again and a 3%-5% increase in the top marginal rate of income taxes.

mis-information
Guest
mis-information
It does appear like some political actors may be trying to actively spread misinformation. Th home-buyers grant being promoted by the local Liberals is nothing but a gift to developers and other people in the business of selling real estate in Metro Vancouver. Prices are set by marginal buyers, in the process of outbidding competitors. Such buyers often extend themselves as much as they can afford in the process of securing a property. Removing any costs associated to “community amenity contributions” would not change these prices by a iota. It would however mean that the full price would accrue to the house-seller, rather than going to a communal pot of money designated to pay for improvements and amenities that are enjoyed by all. This is spelled out in some detail by the local academic community in their letter to the… Read more »
Gnomes of Zurich
Guest
Gnomes of Zurich

The ’empty homes meme’ is just a distraction.
This tax will do nothing
To stem the tsunamai of cheap money that has hit us
With over a decade of the lowest interest rates in 5 thousand years,
And an amount of money printing that has been unprecedented in history,
Creating huge commodity and asset bubbles.
It’s not that the value of a Vancouver home has risen,
It’s that the value of money has fallen.