RE:RE:Truth comes outTempo1 wrote: Interest rates policy looks like easy; a decision between no change, -0,25% or - 0,50%.
But the work behind is huge. I read comments about parts of the problem like Real estate. It is a large part of the problem but not the whole problem.
It is about a balanced economy with a 1%-2% annual real growth with a controlled inflation. All is linked; if you don't have the growth, companies make less profits, stocks are depressed, less biz jets are sold etc
Many Candian have a 2%-2,5% mortgages. With a 400 k$ mortgage, a 4% renewal means 7,000$ less for others expenses each year. That is 7,000$ out of the economy; 7,000$ used for debt service, used to pay the money used instead that buying goods. It not only about the homes prices, it is about how much money will be use for buying good and services, to helps growth.
Central banks is independants from politics, for the good reasons. Rates policy don't have to be popular.
I agree completely.. lets put it this way , whatever the rate , banks make the same amount of money , so the only thing that changes is that the borrower has more money to spend when rates go lower , businesses have more money to spend/invest ... I believe that we will have to allow a higher inflation rate compared to the 2% unfortunately... things change but one constant remains , politicians will fill their pockets no matter the crisis ... GLTA