RE:RE:RE:RE:RE:RE:RE:Interesting tidbit on monthly progress reportbober2 wrote: We're in a bear market because we're down over 20%. The federal reserve in the states is going to increase interest rates to fight inflation and will do so until we're down to 2%. The Bank of Canada is going to do the same thing and fight inflation until we're down to 2%. Both countries are trying for a soft landing but if inflation is hard to move down.then we may end up with a recession in 2023 which won't be good for the markets. I'm staying with Heritage because my breakeven is .36 cents a share. It's a tough call for me but I have no choice because I own over 100,000 shares.
I hate to admit it, but the BOC did the right thing front loading the interest rate increase by raising it a full 100 points (1%). The next rate increase will be in September and that amount will be determined by what consumers did after that 1% rate increase.
Did the rate increase do what it was expectet to do? That is, bring down consumer spending and cool the housing market. That 1% rate hike should have gotten everyone's attention and curbed their spending immediately. But if it didn't and consumers continue to spend, spend, spend then you can expect interest rate increases to continue to go up, up, up. Interest rate hikes and control of inflation are literally in the hands of the consumers and their behaviour.
You can't complain about rising interest rates if one keeps spending and adds to the increased demand for goods and thus keeps pushing up inflation. STOP SPENDING and inflation comes down with less demand for the product, as do interest rates. It seems to me the governments around the world are trying to create a recession until they can get a handle on the slow manufactering of goods and supply chains issues created by covid.
The causes for this inflation is not the same as we have seen in the past. This is an odd situation of high inflation coupled with no real need to see employment numbers fall in this recession as there are lots of job opportunites in certain industries that are needed to fix the problem. Unfortunately, when spending stops, people lose jobs in all types of industries which leads to higher unemployment during a recession, this helps to decrease the spending even further. Interest rates come back down to encourage spending and that spending fuels the economy and employment again.
If the governments are focused correctly, then during this recession their main goal should be to fix the manufactering and supply chain issues to handle the larger consumer demand when we come out of this recession and spending increases again. As long as the supply can keep up with the demand then inflation is kept in check. In the meantime, STOP SPENDING!!!
Save you're money, look for good deals in the market during this recession and you will have far more cash in the future. Get ahead of everybody else who will be tapped out of money due to their spending and will be in a money crunch as the recession gets worse and won't have any cash to invest in great opportunities.