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.

Sort by:   newest | oldest | most voted
Bizznitch
Guest
Bizznitch

Poloz should slowly, very slowly, start to raise rates. Doing that is much easier to adjust to than a rapid rate rise later. Sure, some people might lose their houses, but maybe they shouldn’t have gotten so over-leveraged in the first place.

Dave
Member
I don’t think most people have really felt the effects of our low dollar yet and I think we’ve only just begun the discussion. I think the mood will have changed a lot by the end of March, after Spring Break. I think a lot fewer people are going to go away on vacation this year and by that time, I think a lot of inflation will start being felt. We’re just starting to see it in the grocery stores. The price of everything is going to have to go up because we’ve lost a lot of purchasing power. We don’t make anything ourselves and the things we do get sold at the ‘global price’. You think potatoes are going to be cheap because we grow them ourselves? No. Farmers will sell at the highest price of course. The only… Read more »
Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

economies are slowing, oil is down, BOC’s response has always been rate cuts.

yeah, it sucks that it’s more expensive to buy crap to stuff into the garage. but at least you still have a job and will likely continue to have one.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

also, fate and fortune are smiling on canada once again. just as commodities are crashing and economies are slowing we elect a government that already planned to go into deficit and build infrastructure.

this is great. we will build things when materials are cheap and oil sands workers are looking for jobs. the future is bright for canada and HAM will see us continue to do well and fly their money over here by hook or by crook.

Dave
Member
We’ll see how that plays out Bull. The direction of the economy is closely tied to consumer and business confidence. How is the consumer going to feel confident when the price of everything starts going up? The consumer is going to feel squeezed. Cutting interest rates was a dumb move this past year in my opinion. It propelled the housing market higher but that wasn’t underpinned by the real economy, nor is it is likely to be this year. I think the better move would have been to increase rates. It would have tempered the housing boom and kept our dollar much higher than where it is now. It would have corrected regardless to be sure and whatever that amount was would have been maximum economic stimulus for manufacturing and export. In my opinion, the marginal benefit to export from… Read more »
Bizznitch
Guest
Bizznitch

Sky high house prices don’t help us either. People are dumping most of their income into trying to pay down their mortgages. I bet in many cases, most have very little disposable income to spend elsewhere in the economy. Sure, we’d have some pain if housing corrected hard, but we’d probably come out much stronger in the end.

Interesting
Guest
Interesting

Paul B – Is it easy to post price reductions when you post the numbers? I know must Realtors simply pull it off and relist it rather than show a price reduction but it would be interesting to see this information if its not hard.

Thanks!

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

>How is the consumer going to feel confident when the price of everything starts going up?

a lot better than they would if people were getting laid off.

paulb
Member

When the market was weak in 2008 etc. I used to post the price changes. At that time almost all the “changes” were price cuts. Now half of the price changes are increases so it’s not a very interesting stat.

NOM NOM NOM
Guest
NOM NOM NOM
vangrl
Member
vangrl
Some price reductions I’ve figured out. Obviously I don’t have access to MLS info, and listings change MLS #’s a lot. But most of these should be fairly accurate. A Realtor can correct me if there are any mistakes. 1637 Angus Drive – reduced $700,000 – 19,100,000 4608 NorthWest Marine – reduced $600,000 – 14,900,000 3589 Granville Street – reduced 2 million — 11.988,000 6011 Adera – reduced $310,000 -8,680,000 2428 Crown – reduced $490,000 – 4,380,000 2825 31st – reduced $300,000 – 3,990,000 3333 Crown – reduced $500,000 – think it sold in last few days 2227 West 33rd – reduced $200,000 -3,799,000 1010 West 57TH – reduced 1.6 million – 5,388,000 1561 Wesbrook Cres- reduced 2 million – 9,980,000 2129 West 35th – reduced $390,000 -2,498,000 2875 Alamein Ave – reduced $500,000 -4,298,000 4650 Granville st – reduced… Read more »
vangrl
Member
vangrl

And like Paul said, some changes are increases. But some of those listings were listed for months last year, at lower prices and didn’t sell. Re-listed after Jan 1st for higher price. Chinese New Year and all!

Yunak
Member
Yunak

A short but very descriptive clip encompassing HAM-Locust social fabric, mindset, action and expectation. It can be entirely mapped with their recent existence and presence in Canada.

https://youtu.be/9O28Lj9JEOk

Oracle
Guest
Oracle

Prmier Cristy wants total control over immigration.

She will jack it up as high as she can.

She is speaking right now. google it.

Save your province white folks. You have a traitor amongst your midsts.

Oracle
Guest
Oracle

The downturn will come when politicians start unloading real estate.

As of right now, many have multiple properties and are loading up on more. Where u think policies are heading?

Yes! Jack up immigrations! Take in more refugees! More more more!!!

vangrl
Member
vangrl

Obviously those reduced are only West Side detached

Hçistory
Guest
Hçistory

traitorous India Bears shorting

India Nifty Fifty, down 1.17%
http://m.investing.com/indices/s-p-cnx-nifty

India BSE Sensex 30, down 1.09%
http://m.investing.com/indices/sensex

currency INR

Hçistory
Guest
Hçistory
http://www.business-anti-corruption.com/country-profiles/south-asia/india/land-administration.aspx Indian Land Administration “When dealing with India’s land administration, businesses are likely to encounter corruption in the form of bribery. Around 38 percent of companies expect to pay bribes when obtaining a construction permit (ES 2014). Red tape and burdensome land acquisition policies have in the past been identified as major investment impediment. Dealing with construction permits can be a multi-step procedure but takes around the same time as elsewhere in the region (DB 2015). Registering property takes around 47 days, which is half the average of south Asia (DB 2015). Private property is legally safe-guarded and respected (BTI 2014). The acquisition of land by large companies have traditionally met resistance in the population (BTI 2014). Reform efforts by president Modi to smooth land acquisition for businesses have repeatedly been backtracked (Reuters, Aug. 2015).” Modi must be fornicating with… Read more »
Bull! Bull! Bull!
Guest
Bull! Bull! Bull!
Hçistory
Guest
Hçistory

India came out with new trade numbers today

Exports (USD) (Dec)
Act: 22.30B Cons: Prev.: 20.01B

Imports (USD) (Dec)
Act: 33.96B Cons: Prev.: 29.80B

Trade Balance (Dec)
Act: -11.66B Cons: -9.60B Prev.: -9.78B

wowsers, 2 billion miss on consensus. Good for India, keeping the global economic engine going… import more, import more!

… not like those traitor emigrants, looking into the abyss from their debthole ghetto hovels in Commodity countries, crying the blues cause they cant get ever more govt social leeches to spend flow-thru-rent Surrey basements

david
Guest
david

The C$ is the petro currency of all petro currencies…because our national economy never progressed any further in 150 years.

Read that slowly until understood.

And then run out and protest climate change…after that, it’s the scourge of continental drift, and then Earth’s inconvenient axial rotation.

crabman
Guest
crabman

Hey spacetroll, how do your countrymen feel now that they’ve put so much money into a hugely overvalued asset in the world’s weakest currency? Idiots!

Yunak
Member
Yunak

@22

They probably justify it with “easy come, easy go” and don’t care that much, it wasn’t their money after all, although they are still idiots. Unfortunately local sheeple who join the orgy are more to have “some feelings” down the road…

paulb
Member

New
279
Sold
68
TI:7061

http://www.paulboenisch.com

space889
Member
space889

@crabman – why don’t you ask them yourself? Oh right, I forgot, you can’t stand China or talking to any actual Chinese people who aren’t Westernized. Hence you wouldn’t never really know what the hell they think aside from what you read in newspapers written by the same ignorant people as you.

Btw, that MacDonald Realty guy already answered your question and they don’t really care cuz the purchase is cheap to start with, and with all the price increases, the currency depreciation is mostly cancelled out, and most of them didn’t buy it for investment hoping to sell it at a higher price to someone else.

Lastly, legally you are my countrymen, so I guess we are all scums together 🙂

wpDiscuz