Molecule Holdings Inc C.MLCL

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[dart321]

have poked its ugly head up. Has everyone done their research on inflation and the cause and effect of high inflation. The last time inflation was this high was in the early 80's and interest rates peaked at 22% in Canada. The stock market crashed for the most part, only those companies with strong sales growth did well. We see inflation at 7% and we see interest rates starting to climb just like it happened in 1979 when it first started to climb then. Poor saps that have been buying houses today. I suspect we could see interest rate at 12% whin 18 to 24 months if inflation keeps going.

[dart321]

If you are intrested in Mortgage rates then watch the 10 year U.S. bond and the 5 year Canadian bond. Those are the two instruments that are used to decide mortgage rates. In the last 5 days the U.S. 10 year have rocketed up from 1.45% to 1.86% which is massive for a bond which is following the same trend as happened in 1979 when rates rocketed up then because of inflation. Canadian bonds always

[TheNextBigThing]

Sorry, what.... you think we could see inflation at ~12% within 18 months!?!? You realize what that would do to government debt servicing costs and to consumers? Central banks want a soft landing, not a crash landing. 

[Kaiser]

This post has been removed in accordance with Community Policy

[BooterMcGavin]

Met thinks you're mixing up inflation and interest rates. Inflation is actually good for debt servicing

[dart321]

Here is the catch 22 Booter, if inflation ( cost of living ) increases at a substantial rate and we will use an example. If inflation stays at 7% are govs around the world going to be able to pay 1% or 2% on the bonds they are selling, no certainly not so they have to raise the percentage they pay to people buying those bonds, hence you see the substantial rise in mortgage rates because those

[TheNextBigThing]

  you're right, inflation will help reduce the burden of the interest payments, but the 12% interest rate Dart is suggesting would be crippling to many. I don't believe inflation will be high enough to justify that level of interest rates personally. 

[dart321]

Yes I agree it would beond ugly for many people. We can not escape the fact we see inflation numbers are ugly. The Canadian gov just announce today with their economic outlook they missed their prediction far wore than ever before. What the mortgate rates will be at the end of 2022 will depend on the 5 or 10 year bond rate. If we look back in history we see when inflation was at the levels we see

[dart321]

My last post of the day It's almost 11 pm here. This will be my third time going through high interest rates in my life time. I remember my parents where getting 20% interest rates on a gov of Alberta bond. Not sure the year that was I would have to look back, way back in time LOL. The second time was in 1978/1984 and now we see it starting again. I believe it was in 81 or 82 where it peaked

[dart321]

according to economists around the world inflation will pick up and their predictions are anywhere from the 7% we now see to as much as 13%, 18 to 24 months out. I am not an economists so I look at history because history repeats itself over and over. The period of 1978 to 1984 was the last big inflation problem. Inflation went wild duing that period and intrest rates went even higher. Here this