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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Yunak
Member
Yunak

@49

Good to see some reasonable comments being highly voted on TGM site:

830152 16 hours ago

“Canada has absolutely no idea who is inside its borders. All immigration from China should be halted immediately and a review done to find out who these people are. This isn’t just about filthy money in the real estate industry, this is mobsters and the worst scum coming to Canada because the country doesn’t regulate its immigration system properly. There are thousands of people selling forged documents all over the world, selling passports, and Ottawa’s doing nothing about it.”

Yunak
Member
Yunak

We need more of those successful Chinese entrepreneurs in Vancouver to learn how business is done so eventually change the ways and values how locals function and work therefore afford their own home in such competitive environment:

“The case centres on Su Bin, a 50-year-old Chinese aviation-industry entrepreneur residing in Vancouver, and the two unnamed “co-conspirators” revealed to be Chinese soldiers. Despite their military connection, it remains unclear whether the alleged scheme was state-sponsored, or whether the conspirators were essentially soldiers moonlighting to enrich themselves…

http://www.theglobeandmail.com/news/national/chinese-entrepreneur-living-in-canada-implicated-in-us-military-hacking-case/article28253148/?cmpid=rss1&google_editors_picks=true

franko
Member
franko

I hope Poloz has the sense not to draw more attention to our sad predicament with another cut tomorrow, on the heels of today’s downgrading of our growth by the IMF. That would be as futile as trying to jumpstart a jumbo jet with a flashlight battery.

With a looming $30+ billion deficit and an oblivious PM, it’s also getting a bit tiresome to keep blaming oil for our quandary.

hoy-poloz
Guest
hoy-poloz

@46

The time has come to tax assets as well as income. Period. why is that so shocking a concept.

Some people are adept at hiding their income and wealth and still expect all the services of a civilized society, including being able to safely enjoy their assets and have them protected for them.

now the time has come to PAY UP.

Christy is bought by the RE cartel. I have written detailed letters to her in the past, though I am a Liberal party member not even the courtesy of a reply! Though I am sure Rennie can get her to pick up the phone

Many Franks
Member
Active Member
Frances Bula nails it: As likely most of you who read this blog know, a group of UBC and SFU economists and/or business professors put out a joint statement yesterday calling for a tax on vacant homes. […] It’s been interesting to see the raft of defences and “oh, that can’t work” from the other side. Real-estate marketer Bob Rennie said it would kill foreign investment in everything, since it would inevitably lead to a tax on foreign investment in manufacturing or other sectors. (Never heard of that in other jurisdictions with housing taxes.) The mystery documents from the finance ministry surfaced again, claiming it would kill off $1 billion and 4,000 jobs related to construction. (Puzzling claim, since this surtax wouldn’t affect, say, foreign investors who are putting capital into major construction projects.) And Premier Christy Clark claimed again… Read more »
hoy-poloz
Guest
hoy-poloz
Bravo Patriotz “As I’ve pointed out before, the real issue is not whether the property is “occupied” or “empty” but whether the owner is paying an appropriate level of income tax. If the owner isn’t, levy an equivalent tax against the property. This gets around the issue of ownership by shell companies, trusts, children, etc.” You nailed it. EVERY home should have be asked to have an income statement associated. If there isn’t one OR it is inappropriate to the value of the home (eg 30K income on a $4 Million home) then there are 3 possibilities; 1) off shore money bought it, resident or not and wont declare their income. 2) undeclared local income eg drugs etc 3) Elderly owner with low income and legacy value. It should be easy enough to differentiate between 1, 2 and the 3… Read more »
Yunak
Member
Yunak

@39-42

Today forums and blogs are like medieval courts. Apparently each of them had/has its very own jester or droll. VCI’s buffoon is not that much funny, but should get some credit for trying very hard.

Dave
Member
space, I’m glad to finally hear somebody agree with me. Most people have the attitude that developers are the bad guys and part of the problem. People think they are making money hand over fist and screwing the consumer. But, that’s not completely true. Developers actually don’t complain too much because they know low supply is good for their business because it brings stable prices. They also can live with high fees and long timelines because it creates a barrier to entry for competition. It’s not just green building code stuff, it’s all sorts of other rules and space requirements that are adding costs. It can be little things like doorhandles and such. The BC Liberals are rightly pointing this out to the Mayor. The Liberals actually have a a few people with good knowledge of the housing market. The… Read more »
space889
Member
space889

@Dave – Not just that, they are also dramatically increasing construction costs with all their green environmentally bylaws and regulations. Last year while we were looking at a new duplex, the builder was telling us because he completed before Jan 1, he saved at least $10K in extra construction and inspection cost. Anything built after Jan 1 because of new energy efficiency rules will have at least $30K in added costs.

It is crazy the amount of taxes, fees, and costs the city imposed on residential construction. In a lot of US area, you can buy a nice house on a big lot for $300K or under. In Vancouver, the same house would probably pay $300K just in city development fees, permits, charges, inspection fees, and other extortion fees. It is just fing ridiculous.

space889
Member
space889

@BBB – Hmmm….so you are implying all Koreans are a bunch of savage scums that traffic in forbidden animal parts? Stop the presses!! We have new info! We have to kick out all the Koreans!!!

space889
Member
space889

@Whistler or Bust & BPOM – It’s ok…racist never admit they are racists, so I totally understand.

space889
Member
space889

@patriotz – yes, let’s do it! start a petition! Form a party in the next election on this issue! Might finally get me to vote.

I can’t wait to see all those wrinkly boomers paying their fair share!

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

Bear parts trafficking sting nets B.C. acupuncturist

Yunhee (Sarah) Kim faces fines ranging from $17.5K to $1.75M for trafficking in bear gall bladders

http://www.cbc.ca/news/canada/british-columbia/bear-parts-trafficking-sting-nets-b-c-acupuncturist-1.3396526

Dave
Member

While I don’t disagree with a tax on foreigners, I don’t think it’s going to solve our housing problem.

The solution is greater supply. At present, the City constrains new supply and keeps prices high by taxing the hell out of new developments through amenity contributions.

The other big problem is the lack of family housing in the City. We’re closing schools while we’re adding tower after tower. It’s crazy. The powers that be in Vancouver and Burnaby are very anti-automobile. That hurts families too because fewer people have the option of commuting.

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

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.

patriotz
Member
@29: As I’ve pointed out before, the real issue is not whether the property is “occupied” or “empty” but whether the owner is paying an appropriate level of income tax. If the owner isn’t, levy an equivalent tax against the property. This gets around the issue of ownership by shell companies, trusts, children, etc. Of course you can talk about it all you want, the real problem is that no level of government wants to bring in policies that may bring down prices, or be blamed for falling prices. And the politicians have said this explicitly, i.e: People who already own homes would be unfairly hurt by a policy that would lead to a drop in real-estate values. If the current homeowner has taken out a mortgage for say 90% of the worth of their home, and values then drop… Read more »
Lurker
Guest
Lurker

>>Something tells me that the top is in and that Winter/Spring 2016 will mark the top of the Vancouver Real Estate Market.

Never heard that before!

Whistler or bust?
Guest
Whistler or bust?

Something tells me that the top is in and that Winter/Spring 2016 will mark the top of the Vancouver Real Estate Market.

Let the vitriol flow!

Best place on meth
Member
Best place on meth

@28

January sales are usually even lower than this.

But 28 west side houses listed today alone seems unusally high, vs. 3 sales.

Hçistory
Guest
Hçistory

“…bull markets often end with a buying crescendo in the riskiest securities. Risk appetites grow as an uptrend persists, the desperation to participate gets stronger, it does not fade gently.”

“…selling becomes more fierce when the market is at a 20% discount to its previous high than when it is at a 10% discount. “How could it be even more urgent to sell down 20% than it is down 10%?” someone would ask. Going by fundamentals, it isn’t. But investors only pay lip service to fundamentals. What they are more concerned with is owning less of the thing that looks stupid to own – and the lower it goes, the stupider it looks”

http://thereformedbroker.com/2016/01/18/everyone-is-a-closet-technician/

Best place on meth
Member
Best place on meth

I like chinese people too, as long as they’re not from china.

Those ones are major league assholes.

Yunak
Member
Yunak

Even if this goes ahead Chnese will laugh at it loud. One can just imagine them paying any kind of tax on anything that they don’t take advantage or profit-off. Their RE investments will never be “empty” with all those available countrymen around. Just another longer term gig for all those actors and stunts from condo pre-sale lineups across the town.

http://www.huffingtonpost.ca/2016/01/18/vancouver-housing-affordability-tax-vacant_n_9013356.html

vangrl
Member
vangrl

are sales always this low in January?

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

Happy 7K Party!

Hey Space, I like Chinese people I just don’t like you.