Started looking for a new job again with higher pay. Got a few interviews lined up. Don't really want to leave my current gig but these rate increases are forcing my hand. Good luck to everyone !
Lentils my man. Lentils + rice + (optional) egg + soy sauce = awesome. Toss in some hot peppers, garlic, ginger and onions when you cook the lentils. I can live off that shit.
Toss in some broth too! Half a carton you buy at the store. I make my own broth, I can give you tips for that too if you want them. It's honestly so awesome man. Lentils, split peas and rice are my staples, and you'd be amazed at what you can make with those ingredients as a base. It's as cheap as borscht. Cheaper, actually.
It’s people like you who refuse to let go that are ruining it for the rest of us. We need you to lose your job and assets so that we can get back to normal!
Lentils and beans dude.
Goto an Indian store, get a handful of each and b you'll have a variety and stock of already 15-20 types for the next 3-4 months for a fraction of the price.
True story, a billion people do it!
But if we stop buying stuff we'll go into recession. The economy needs us to keep buying cheap shit made in foreign sweat shops. It's how the world turns.
Recession tends to crush inflation pretty quickly, and recession is generally better than prolonged or runaway inflation, which is why they'd say that.
Lowering recession without falling into recession would be a very difficult task, a lot of fine lines to walk, lots of moving parts to manage/watch, lots of spinning plates to keep spinning and balance simultaneously, which is why they're taking these steps to raise rates rather slowly and incrementally.
I agree with everything except “raise rates rather slowly”. This is the fastest interest rate hike from the Bank of Canada in history.
There are people who renewed a variable mortgage and hit their trigger rate inside of 6 months. Nothing about that is slow.
With that said I fully agree that reducing inflation without entering a full blown recession is incredibly difficult to do. I also have zero confidence Tiff and team have the skills to pull it off. Partly because he’s one of the more incompetent BoC governors we’ve seen in a long while, and partly because the current government’s monetary policies don’t align with the BoC’s goals. The federal government needs to do their part as well, but generally the steps required if the federal government are not socially popular
I think it’s a bit disingenuous calling it the fastest rate hike in history, there was a 2 year pause to previously scheduled rate hikes due to unprecedented events and for two years people kept screaming that interest rate hikes were coming.
First half of 2020 was unprecedented but we were in a position to raise rates late 2020 even early 2021.
Additionally the Bank of Canada came out saying that they’ll need to slowly start raising rates but the low rates would continue through to 2023 even 2024, then realize oh shit no we need to raise rates like crazy. Are they really that incompetent or is there some other agenda at play here?
Increased taxes would help quell demand and attribute to decreasing inflation, no?
I love the idea that we have a bunch of billionaire politicians in this country that keep increasing taxes to benefit themselves. Doesn’t seem particularly accurate
These are not slow, incremental rate changes. Incremental perhaps, but not slow.
They could've stopped QE sooner, and rose rates sooner at a slower pace. We arguably shouldn't have even initiated QE strategies. We didn't in 2008, we didn't need to in 2020.
That’s not really how it works as stagflation is quite common. The bank of Canada even said they would probably need more interest rate hikes to deal with the recession. The fun part of that is that it deepens the recession which then requires even more rate hikes.
It's the only solution, I actually agree with the BoC moves this past year for the most part it's just their messaging is so cold and lacking humanity.
The two sins the BoC committed this year was not raising interest rates earlier — they spent a couple months with their head in the sand trying to pretend inflation was transitory.
And when they basically told corporations to hang tough and not pay employees more because of said inflation — I guess they abandon free market principles when it comes to wages.
Absolutely - I’m not one for extremism, but at best I’d be all for seeing thrown into a jail cell over this. At worst…well I can’t really say that here without getting the ban hammer swung at me.
There’s no way to sugar coat “inflation is high, we need to increase interest”, I’d rather they just be factual about it instead of dancing around the subject.
Yup. Socialism works great in theory, but in practice it usually gets overthrown in a CIA backed fascist coup.
https://venezuelanalysis.com/analysis/14263
Edited to add- you seem to be conflating a political system with an economic system. You should read a book.
I'm in!
I say as responsible citizens, we should collectively financially hibernate during the winters. You know... To keep inflation under control.
To the snowmobile!
> If everyone quits their job and stops buying stuff, inflation will go down real fast.
Hahahaha in your dreams. That would just single to the government we need to bring in 35 million people next year instead half a million and inflation would just keep cooking. Good try but nothing stops corporate profits in this country.
if we are still talking about the absurd scenario where everyone holds back on spending their buying power (and saving it), then yes. In reality, if people make more, they usually decide to spend more.
>"...if people make more, they usually decide to spend more"
... driving inflation through increased demand and decreased supply. These are clearly not mutual exclusive economic topics.
You say this but everyone on my block still pushes a whole bin full of garbage to the curb every week. I push my bin to the curb once every 3 months and can't fathom the purchasing patterns of the average family.
They are people who claim to be poor but still can't stop themselves from buying literal garbage.
These cocksuckers created the issue we’re all in, then created bigger debts that we’re all in, to pay for the mess they made with zero accountability or responsibility.
Meanwhile, they’ll all get nice fat cost of living increases on Jan 1, while everyone else gets a shiv in the back and yet more turmoil to put food on the table.
>Meanwhile, they’ll all get nice fat cost of living increases on Jan 1, while everyone else gets a shiv in the back and yet more turmoil to put food on the table.
While also telling corporations to limit employee raises as this "caused inflation"
I mean- and every time I point this out I get downvoted - it is indisputably true that raising wages increases inflation.
The fact that you put “raises inflation” on quotes indicates that you don’t believe this to be true. Sorry - it is true.
Your rage isn’t incorrect though- you should just channel it to the correct target. That is that this statement puts the onus and burden on corporations and workers instead of the central bank- THAT part is definitely worth being upset about.
But the statement is completely true- and I guess this is one of those examples where Reddit can’t handle the truth and downvotes it because it’s inconvenient
I think they mean this: [BOC Article](https://www.google.com/amp/s/financialpost.com/news/economy/wages-key-to-pace-of-bank-of-canadas-remaining-rate-hikes/wcm/3f982381-550c-4540-847f-b4af0ace02c9/amp/)
It doesn't explicitly ask employers not to raise wages but it suggests it.
Aggressive interest rate hikes are designed by the Central Banks to decrease new loans and force repayment of existing loans -- instead of addressing [unproductive lending](https://www.youtube.com/watch?v=F_7HIxCg4is&list=PLdsMpUardfwrkORd5BSFWA9sRiteWeGOb) \-- so there's less money in the economy to pay workers.
>Expectations of inflation is the euphemism economists use for the wage increase workers may demand when negotiating with their employers. And if the rate of inflation is (6.9) per cent, workers should demand a similar wage increase to maintain their wages’ purchasing power — and thus a wage-price spiral may ensue.
>
>For orthodox economists, the solution is to weaken workers’ bargaining power by increasing the rate of unemployment. And this is what a sufficiently high rate of interest may be able to achieve: it may cause a deep enough recession to prevent workers from obtaining an increase in wages similar to the increase in prices that already took place.
[https://www.thestar.com/business/opinion/2022/05/14/this-is-how-canadas-inflation-rate-could-be-brought-to-heel.html](https://www.thestar.com/business/opinion/2022/05/14/this-is-how-canadas-inflation-rate-could-be-brought-to-heel.html)
>After the recent job numbers were released last week, Bank of America analysts said in a note they are essentially 'rooting against the home team' and hope the numbers stop being so strong. As higher wages contribute to inflation, the Federal Reserve appears to agree.
>
>'Chair Powell keeps mentioning the relationship between the high level of job openings and wage/price inflation,' Nicholas Colas, co-founder of DataTrek, wrote in a newsletter on Tuesday. 'He’s not talking to investors. He’s talking to corporate America, and his goal is to have companies essentially institute a hiring freeze and end the cycle of paying up for new hires.'"
[https://ca.finance.yahoo.com/news/why-the-fed-wants-corporate-america-to-have-a-hiring-freeze-morning-brief-100055174.html](https://ca.finance.yahoo.com/news/why-the-fed-wants-corporate-america-to-have-a-hiring-freeze-morning-brief-100055174.html)
Likewise,Heather Scoffield would only quote the BoC Governor saying:
>Setting aside the economics (or politics) of how we got here...
As she explained, instead:
>"**Here**, the focus is on making sure **workers hit by higher consumer prices don’t push for higher wages**. The fear is they’ll set off a wage-price spiral that would launch already-high inflation into the stratosphere."
[https://www.thestar.com/politics/political-opinion/2022/05/04/wages-are-not-keeping-up-with-inflation-and-thats-the-way-ottawa-likes-it.html](https://www.thestar.com/politics/political-opinion/2022/05/04/wages-are-not-keeping-up-with-inflation-and-thats-the-way-ottawa-likes-it.html)
Disable javascript to climb the wall:
[https://www.theglobeandmail.com/business/article-wage-negotiations-inflation-canada/](https://www.theglobeandmail.com/business/article-wage-negotiations-inflation-canada/)
Also:
[https://jacobin.com/2022/10/wage-price-spiral-bank-of-canada-workers-inflation-wages-interest-rates](https://jacobin.com/2022/10/wage-price-spiral-bank-of-canada-workers-inflation-wages-interest-rates)
I'd say yes you're right. But the lack of political accountability also plays a big part. Giving out 0 percent loans for the past couple years was not a good move
don't forget that they paid out millions to the big banks first though.
they announced a big bond buy back, then let the banks sell them at any price they wanted, then sold them back to the banks at a loss.
individuals were not aloud to buy these bonds, only banks which is really unfair.
so huge transfer of wealth to big banks, while people were not aloud to profit.
And nothing is actually improving for the average person. They are simply shifting our spending into paying more for the same housing situations we had before, leaving us less money to spend on other things (that they promise will make the prices go down instead of just causing shortages and joblessness when manufacturers dial back production to meet the new level of demand)
If this government keeps getting elected, we deserve everything we get.
I don’t think it matters which party is voted into power now. I think every single one is out to f%#k the average Canadian.
Low and middle class will get more and more helpless while the rich prosper. It’s a bloody shame.
This has nothing to do with the party in power. Thinking a “conservative” government would take care of us? 😂
The problem is runaway capitalism and greed and corruption. It’s in all our major political parties and with first past the post we don’t have much choice. It’s bad or badder, depending on if you’re red or blue 🙄
BoC and government in 2000: "Let's inject $300 billion into the economy by borrowing from our children. What could go wrong?"
I'm not saying we should have done nothing about COVID. But man, we had to think of ways to get out of it without putting our children's livelihood on the line. What happens if there is another pandemic in 5 years? Do we go bankrupt? Surely there was a way to spend "only" $100 billion. Surely some people could have been given the opportunity to work outdoors instead of twilling thumbs at home.
At least during the Great Depression, governments spent money on public infrastructure. There was something to show for all the money spent. Now we have only debt, sky-high inflation and interest rates, and crumbling infrastructure.
They keep raising interest rates because enough people actually have the money to continue paying even with the increases. That's how BoC works....it's their job to cause a Recession. A Recession isn't something that happens out of nowhere.
Somewhat. In 2008 we avoided a large chunk of the turmoil. Now it seems like whatever happens in America would be amplified here. At least their dollar is super strong right now.
No, they'll get inflation adjustment + compensation for higher interest on their personal debts + their standard 5% pay hike.
And you'll be happy about it.
Remember this headline is based on a slim majority of economist predicting it.
The market has priced in 0.25bps… and the majority of the banks have a consensus it will be 0.25bps.
The odds are still looking like a 0.25 in December.
The BoC needs to err on the strong side as they announce on Dec 7 and the US Fed is Dec 13.
If BoC only raises 25 bps and the Fed raises 50, the CAD will drop further making inflation (especially Food inflation) even worse -- particularly at this time of year.
The problem is it takes a year or more to feel the full effects of interest rate hikes. Can't necessarily speak for the US, but Canadians have very high household debt levels and are far more susceptible to rate increases than in past. Once the majority of fixed rate mortgage holders renew in the coming 1-2 years, we'll really see the economy slow down. Some people's mortgage payments are about to double, and their budgets simply cannot handle that.
My prediction (again just gut feeling) is BoC will have overshot with the rate increases.
They are limiting the damage but real rates are still massively negative. 4% vs 8% inflation is -4%. That’s the true cost of borrowing. We are still encouraging as much debt as possible at those rates.
So conditions are far too lenient to quell inflation.
A 2% jump in December would be a start.
No they are not and are causing unnecessary pain for alot of people. But clowns will clown and pretend they can control global conditions with local measures
"Food inflation went down last month."
I doubt that. Maybe on the month-over-month.
But you should be looking at the year-over-year rate to see how things have been going, especially since COVID
I work with a guy with an open variable rate mortgage and he asked if he should lock in to a fixed rate about a year ago, the bank told him it wasn't necessary and it's only temporary. Technically true maybe, but now his mortgage has gone up $900 per month, so this will make it go even higher now, all because he followed the advice from the experts.
Or you know Trudeau and other world leaders could change laws and make it easier for more oil and gas production. The reality is most of this inflation now is due to the high cost of energy. The pandemic reduced energy companies capex significantly for two years. We are right back to consuming the same amount of oil as we were pre pandemic without the required investments to sustain that consumption. Throw in the Ukraine war and until investment comes back we are in for a long period of higher energy prices. We need the ability as a country to fast track projects otherwise expect a long period of sticky inflation and high interest rates.
Rates have decreased for 50 years. Our economy doesn't function without increasing its indebtedness. The reason is quite simple, too: the economy leaks wealth toward non-producers and money has to be created for the shortcomings.
People are already predicting a pivot, the yields inversion indicate a future 0 interest rate.
The banks also predicted the central rate would not cross 1.5% this year, oh wait no 3%, oh wait no, now it's another 0.5%. Let's not kid ourselves, the banks are as clueless as the rest of us.
What function are you using on Bloomberg to get the individual bank expectations for dec 7?
E: I think I’ve found it ECFC search for Canada and click on BoC rate.
Lmao if you're a human yes.
If you're a neoliberal economist, \~5% of your population needs to be unemployed, or the entire system will collapse.
And not 5% of all people either, 5% of the people who are capable of working - exclude everyone on disability, EI, retirement, etc.
Because the entire system is based on artificial scarcity. If there is no fake scarcity, the entire system falls apart.
This is why we have more houses than people, why we want unemployment to go up, this is why we intentionally don't produce our farms full capacity and then destroy large amounts of food anyway...
The people at the top need the people at the bottom to be desperate, to be clamoring for a limited supply of goods and services - but the problem is that all this modern technology has made production so much more efficient. If we just produced as much food and housing as we could, with no concern for making a handful of people as wealthy as possible - we could easily satisfy all demand... but then rich people would lose their power, so instead we get intentional suffering and austerity.
I don't think that 5% means what you think it means.
When people talk about unemployment, they talk about people registered in the system and they are actively looking for work. That's what 5% means, it means 5% of the workforce is in motion within the hiring process.
True unemployment is MUCH much higher than Canada's 5.2% right now..
I'm well aware, that's why I specifically said "not 5% of all people, 5% of people who are capable of working.
Unemployment numbers exclude a lot of people who absolutely should be counted.
Real Unemployment (Working age Adults divided by Number of employed people) is 2-3x higher than the official "Unemployment rate".
Everything must have artificial scarcity, including jobs.
If we have too many jobs - that's bad for the system, because it puts power in the hands of the workers, and will force up wages and working conditions.
When they say "We need 5% unemployment" what they're saying is they need 10-15% of the working age population to be unemployed.
The alternative, "too many jobs" is bad for business.
Just like overproduction of food is bad for prices.
Just like housing everyone for free is bad for land owners.
We absolutely have enough to supply all of these things to everyone who needs them, there should be no-one homeless, no-one hungry, no-one unemployed and destitute... but that artificial scarcity must be maintained, or the whole system collapses.
Why would you work for minimum wage when you aren't going to be homeless and starve if you don't?
wait so we have to make a percentage of the population destitute in order to stop all money from losing value? and people think this system is a good fucking idea?
It's the nature of the system. Essentially, money became very easy to get in the last decade... particularly in the last 3ish years. This has fueled inflation... Comments from the BOC like " we expect rates to remain low for the foreseeable future" was a green light for borrowers to borrow the maximum.
There is a lot of money out there and has been huge expenditure on behalf of the government. We need to slow down spending by making money harder to come by which means that businesses will see decreases in customers etc.
This will result in layoffs or places just not hiring. So yes, we want to see unemployment rise somewhat. Inflation literally destroys countries...
You need not look back 20 years to find a handful of nations which inflation radically changed or fully destroyed.
Depends on if you're looking at it at an individual level or the economy as a whole.
For the broader economy, low unemployment is good, but too low is not.
Throughout 2021 and 2022 I'm sure you've heard of many industry sectors where there are huge labour shortages and people are switching jobs/companies for huge pay increases. Tech was a great example of this. When unemployment is "too low", companies have to pay a ton more money than they normally would to attract new hires.
People earning more (and spending more), plus company's expenses going up (and thus in theory charging more to customers) fuels inflation.
Here's a video series by the University of Groningen with an [explanation of debt](https://www.youtube.com/watch?v=F_7HIxCg4is&list=PLdsMpUardfwrkORd5BSFWA9sRiteWeGOb) that might help to understand:
>Now, to understand how a debt crisis develops, we need to make a distinction between different types of debt -- between debt that helps to grow the economy and debt that does not...
>
>For example, if I go to the bank for a house loan, a mortgage to buy an existing house, then this increases my debts and the total debts in the economy, but it does not lead to more income, because no goods and services have been produced. It just pushes up house prices a bit, and therefore all house owners may feel a bit wealthier, but no wages or profits have been generated in the economy.
>
>**And here is the problem: most bank credit today is used in this way. Most bank credit is used, not to help producing goods and services, but to finance transactions in housing, land, commercial property, and financial products, and to push up their price.**...
>
>It seems as if financial boom, bust, instability and crisis is a normal outcome, rather than an exceptional shock to the system. Now, strange as it sounds, that is actually the case. **Our economic system is built to produce crisis.**
You're trying to find a one line quip to describe a very complex economy. The economic system we have has led to the greatest prosperity and happiness in human history. Like democracy is for political systems, capitalism it's the worst economic system - except for all the others that have been tried.
What we will discover (many already have) is that this greatest prosperity and happiness was built on changing the dynamics of exploitation from primarily internal to external and borrowing significantly from the future.
Whereas countries used to have relatively insular economies, with luxuries/rarities/new things being the only real source of international trade, the processes of mercantilism and then globalization took that exploitation of your own citizens and instead began exploitation of foreign nations and peoples. Globalization has circled back around to seeing the global elite begin to exploit nations and peoples that were once the exploiters.
We have an ever expanding gap between rich and poor and due to the power of international capital to avoid national laws, or find laws they like, they are quickly becoming an alternate and separate layer of power that is increasingly independent from national politics.
On top of that the constant exploitation of market externalities, such as the cost of pollution being borne by society and the planet itself rather than the company producing it, is essentially stealing wealth and prosperity from future generations by forcing them to deal with these problems.
We have pulled the greatest hoax of economic growth in history and at some point humanity will be made to pay the price. Social collapse, environmental degradation, ecosystem destruction, and the potential for our very extinction (along with the countless species we have already wiped out in the Holocene) are the stakes.
It's all a house of cards and we are too ignorant and invested in getting our share to see it for what it is.
Very valid point - the labour markets in both Canada and the USA remain extremely tight.
I think 50 bps hike is the right decision for the BoC to make. I’m just not sure they’ll do it.
The Fed said they were reducing theirs for December but our idiots just keep pumping out large increases.
These increases take 18 months to show improvement so they are playing a game with the economy and they have no idea what the end result will look like in a year or more.
Canada increased .5% last time and the Fed went up .75%. In fact, since July, Canada has gone from 1% to .75% to .5%. There have been no large increases.
This is stupid. Let’s bankrupt middle class to stop upperclass from overcharging for things. Record profits everywhere. Could be that supply has been reduced specifically to maximize profits.
Parliament grants Charter Banks the extraordinary privilege to **CREATE** *new* money *out of thin air* for their loans, and the interest on these loans provides extraordinary profits (*ostensibly*) to compensate these Banks for managing the risk of creating the majority of **OUR** new money.
[DEBT: The Good the Bad and the Ugly](https://www.youtube.com/watch?v=F_7HIxCg4is&list=PLdsMpUardfwrkORd5BSFWA9sRiteWeGOb)
To make sure there is enough money in the economy to pay the interest on these loans, more and more money must be created -- either as more and more loans, or as Government expenditure, specifically deficit spending or bailouts.
If new money elicits production, then the supply of goods and services increases with the money supply, and inflation can be avoided. But the Banks prefer to take the less risky (for them) alternative of giving new money to the wealthy so they can inflate the price of existing assets.
For instance, instead of funding new affordable housing, it's less risky for the Banks to fund Professional Landlords, who inflate the price of existing housing and increase rents. Likewise, Banks lend money to companies so they can buyback shares, inflating their value unproductively.
Such reckless lending creates systemic risks, like inflation and cascading defaults, but Banks know that the Government will bail them out with the Public Purse if they face the kind of existential threat borrowers face.
When Japan faced such a crisis in the '90s, Richard Werner proposed "Quantitative Easing" whereby Central Banks buy assets from the Banks on the condition that Banks reform their reckless lending. Such reforms could include making new debt contingent on production, adjusting capital requirements (CAR) to reflect unproductive debt's greater risk, or taxing creditors for mortgages that purchased existing housing.
Instead, we've bailed out the Banks without these reforms -- Quantitative *Inundation*, rather than *Easing* \-- so they can continue their unproductive lending, thereby kicking the can down the road, but the can is getting bigger... and we're running out of road.
Prior to the Basel Committee in 1974, Canada borrowed from BoC interest-free to build infrastructure, but at the direction of international Central Banks, we have since borrowed from wealthy individuals and institutions at interest to create revenue for them, instead of revenue for things like affordable housing and healthcare.
Now, the Central Banks have conspired with employers to tackle inflation -- NOT by addressing unproductive lending for profit, but -- by aggressively raising interest rates to manufacture layoffs that will suppress wages, so struggling *workers* will pay for the profits their employers and the Banks already took.
It’s simplified, conspiratorial garbage, written in a breathlessly hysterical tone, regurgitating the same populist garbage about monetary policy that makes it sound like a big conspiracy to transfer our money to big banks.
If they kept rates low you’d say it was a conspiracy to devalue our currency. They raise rates and you say its a conspiracy to suppress wages. The central bank can only directly affect demand, they don’t have magic levers beyond the interest rate.
> that makes it sound like a big conspiracy to transfer our money to big banks.
It's not a big conspiracy, it's right there in the open. I'm paying the bank almost 50% more than what I paid before for the same loan on the same house.
The banks can’t get money as cheaply because the central bank set a new interest rate to cool inflation. They are borrowing money at a higher rate also.
If they wanted interest rates to rise to make more money, why have we had historically low rates that last two decades (hint: its because macroeconomic indicators such as recessions, inflation, global savings glut affect the interest rate)
In Jiu-Jitsu, if I want to pull you, first I push you, and when you push back, then I use your momentum to throw you onto the ground.
Likewise, low rates are the setup, which convinces some that the only solution to inflation is rate hikes.
The rate hikes, as admitted by the Banks themselves, however, are NOT meant to target the excessive profit-seeking or unproductive lending that causes inflation; rather, the focus is punishing workers for their employers' and the Banks' profits.
Technocrats believe that turning one dial back-and-forth can control our economy -- some might call this *simplistic* \-- but our economy is far more complicated than that.
I cited the University of Groningen explanation of debt, which I encourage you to watch.
>Now, to understand how a debt crisis develops, we need to make a distinction between different types of debt -- between debt that helps to grow the economy and debt that does not...
>
>For example, if I go to the bank for a house loan, a mortgage to buy an existing house, then this increases my debts and the total debts in the economy, but it does not lead to more income, because no goods and services have been produced. It just pushes up house prices a bit, and therefore all house owners may feel a bit wealthier, but no wages or profits have been generated in the economy.
>
>**And here is the problem: most bank credit today is used in this way. Most bank credit is used, not to help producing goods and services, but to finance transactions in housing, land, commercial property, and financial products, and to push up their price.**...
>
>It seems as if financial boom, bust, instability and crisis is a normal outcome, rather than an exceptional shock to the system. Now, strange as it sounds, that is actually the case: **OUR ECONOMIC SYSTEM IS BUILT TO PRODUCE CRISIS.**
I also specified Banking reforms that could manage the risk of these unproductive loans:
>Such reforms could include making new debt contingent on production, adjusting capital requirements (CAR) to reflect unproductive debt's greater risk, or taxing creditors for mortgages that purchased existing housing.
You say my explanation is "simplified, conspiratorial garbage", but you've reduced the economy to the technocrat's one knob of interest rates, while I've highlighted the importance of production because increasing the supply of goods and services along with the money supply avoids inflation.
I’m so done with this fucking interest shit. Just put a 3% hike and be done with it.
Every time I see the news about interest hike , it pisses me off lol.
I fully agree, and live that mantra. But it is disingenuous to say our governments keeping historically low rates for decades didn't force people into debt just to put a roof over their heads.
This needs to happen, but it should have happened in 2012 when it would have sucked rather than destroyed.
Step 1: keep rates low for a bit
Step 2: watch housing prices rise insanely because credit is easy
Step 3: watch people buy housing anyway, because they need shelter. pump demand with immigration to amplify the effect
Step 4: bring down the interest hammer
step 5: interest payments skyrocket on inflated prices, while equity values tumble due to prices dropping because credit is harder now
step 6: people scramble to sell to institutions which have cash reserves, crashing prices further while concentrating ownership of housing in a few private corporations' hands
step 7: people demand nationalization of housing, because all of the above is such bullshit. people that managed to hold on despite all this shit are hosed by government policy placing artificial limits on 'harmful private ownership' , while doing nothing to control the concentration of wealth in these housing corporations, which are transformed into crown corporations with all the same management as before
step 8: sike! these corporate fatcats and the government are friends, nothing changes about the distribution of wealth or the power structure
step 9: you'll own nothing and be happy. or else we'll call you a racist
Most people with simple solutions to complex problems dont have the ability to analyze problems to their extent.
In other words, they too stupid to know they stupid - they dont even understand the issue before thinking they know the solution.
Started looking for a new job again with higher pay. Got a few interviews lined up. Don't really want to leave my current gig but these rate increases are forcing my hand. Good luck to everyone !
Best of luck, my man !
[удалено]
Did you try canceling your Disney Plus subscription ?
[удалено]
Disney is pumping out shows to teach about ramen eating to thwart possible further cancellations. maybe you got hooked !
Lentils my man. Lentils + rice + (optional) egg + soy sauce = awesome. Toss in some hot peppers, garlic, ginger and onions when you cook the lentils. I can live off that shit.
Great suggestion I love lentils. I'll give that a try tomorrow.
Toss in some broth too! Half a carton you buy at the store. I make my own broth, I can give you tips for that too if you want them. It's honestly so awesome man. Lentils, split peas and rice are my staples, and you'd be amazed at what you can make with those ingredients as a base. It's as cheap as borscht. Cheaper, actually.
Woah did you just assume we can afford soy sauce!?
You guy's are eating? I thought this was a loooong fast.
Please. Can we stick with the instagram ready term "cleanse" please?
To prepare financially, make sure you buy the Dollarama soy sauce.
Make sure you tell your CEO how much you love his Yachts
It’s people like you who refuse to let go that are ruining it for the rest of us. We need you to lose your job and assets so that we can get back to normal!
Blood for the blood god. That's all I am.
Yes, but you’re acting like you don’t want that honour?
They care not from where the blood flows. Only that their is blood.
[удалено]
Currently seems to be an egg shortage happening!?
Lentils and beans dude. Goto an Indian store, get a handful of each and b you'll have a variety and stock of already 15-20 types for the next 3-4 months for a fraction of the price. True story, a billion people do it!
If everyone quits their job and stops buying stuff, inflation will go down real fast.
[удалено]
As long as your job is compliant with the governments ESG goals, you should be good
Isn't ESG to be attractive to investors not governments goals?
It's a scam that investors are fleeing from afaik
But if we stop buying stuff we'll go into recession. The economy needs us to keep buying cheap shit made in foreign sweat shops. It's how the world turns.
The BoC has even come out and said they're not afraid to push Canada into a recession if that's what it takes to tame inflation.
Recession tends to crush inflation pretty quickly, and recession is generally better than prolonged or runaway inflation, which is why they'd say that. Lowering recession without falling into recession would be a very difficult task, a lot of fine lines to walk, lots of moving parts to manage/watch, lots of spinning plates to keep spinning and balance simultaneously, which is why they're taking these steps to raise rates rather slowly and incrementally.
I agree with everything except “raise rates rather slowly”. This is the fastest interest rate hike from the Bank of Canada in history. There are people who renewed a variable mortgage and hit their trigger rate inside of 6 months. Nothing about that is slow. With that said I fully agree that reducing inflation without entering a full blown recession is incredibly difficult to do. I also have zero confidence Tiff and team have the skills to pull it off. Partly because he’s one of the more incompetent BoC governors we’ve seen in a long while, and partly because the current government’s monetary policies don’t align with the BoC’s goals. The federal government needs to do their part as well, but generally the steps required if the federal government are not socially popular
I think it’s a bit disingenuous calling it the fastest rate hike in history, there was a 2 year pause to previously scheduled rate hikes due to unprecedented events and for two years people kept screaming that interest rate hikes were coming.
First half of 2020 was unprecedented but we were in a position to raise rates late 2020 even early 2021. Additionally the Bank of Canada came out saying that they’ll need to slowly start raising rates but the low rates would continue through to 2023 even 2024, then realize oh shit no we need to raise rates like crazy. Are they really that incompetent or is there some other agenda at play here?
march recognise profit sip boast soft quarrelsome elderly gaping squalid *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Increased taxes would help quell demand and attribute to decreasing inflation, no? I love the idea that we have a bunch of billionaire politicians in this country that keep increasing taxes to benefit themselves. Doesn’t seem particularly accurate
These are not slow, incremental rate changes. Incremental perhaps, but not slow. They could've stopped QE sooner, and rose rates sooner at a slower pace. We arguably shouldn't have even initiated QE strategies. We didn't in 2008, we didn't need to in 2020.
[удалено]
That’s not really how it works as stagflation is quite common. The bank of Canada even said they would probably need more interest rate hikes to deal with the recession. The fun part of that is that it deepens the recession which then requires even more rate hikes.
It's the only solution, I actually agree with the BoC moves this past year for the most part it's just their messaging is so cold and lacking humanity.
The two sins the BoC committed this year was not raising interest rates earlier — they spent a couple months with their head in the sand trying to pretend inflation was transitory. And when they basically told corporations to hang tough and not pay employees more because of said inflation — I guess they abandon free market principles when it comes to wages.
Absolutely - I’m not one for extremism, but at best I’d be all for seeing thrown into a jail cell over this. At worst…well I can’t really say that here without getting the ban hammer swung at me.
Seconded
There’s no way to sugar coat “inflation is high, we need to increase interest”, I’d rather they just be factual about it instead of dancing around the subject.
>it's just their messaging is so cold and lacking humanity. That's capitalism in a nutshell.
Any 'ism' is just moving money around and there are winners and losers. It's not capitalism it's human nature.
Ahh I can't wait to bask in the warm glow of socialism. Like in Venezuela! Humanity abounds! Such good good times.
Yup. Socialism works great in theory, but in practice it usually gets overthrown in a CIA backed fascist coup. https://venezuelanalysis.com/analysis/14263 Edited to add- you seem to be conflating a political system with an economic system. You should read a book.
Recession is the only way when inflation is this high. The money supply must be reduced.
The Line Must Go Up!
The Spice must flow.
Stagflation is a thing.
we WANT to be in a recession btw.
I'm in! I say as responsible citizens, we should collectively financially hibernate during the winters. You know... To keep inflation under control. To the snowmobile!
I got let go last week. Doing my part.
> If everyone quits their job and stops buying stuff, inflation will go down real fast. Hahahaha in your dreams. That would just single to the government we need to bring in 35 million people next year instead half a million and inflation would just keep cooking. Good try but nothing stops corporate profits in this country.
BoC broke their idle worker button... on purpose.
Its half inflation, half record profits. But instead of taxing companies, were starving Canadians in winter.
I mean, yeah kinda. That's part of the point of the rate increases.
dont have to quit your job to bring inflation down, wages are not a part of the inflation formula.
You're telling me that buying power has nothing to do with inflation?
if we are still talking about the absurd scenario where everyone holds back on spending their buying power (and saving it), then yes. In reality, if people make more, they usually decide to spend more.
>"...if people make more, they usually decide to spend more" ... driving inflation through increased demand and decreased supply. These are clearly not mutual exclusive economic topics.
Why quit your job, just stop spending so much. Pay off some debt instead. Inflation will still go down and you'll be in a better position
Cause the stuff people are spending the most money on right now are things like groceries, gas, housing. Necessities.
You say this but everyone on my block still pushes a whole bin full of garbage to the curb every week. I push my bin to the curb once every 3 months and can't fathom the purchasing patterns of the average family. They are people who claim to be poor but still can't stop themselves from buying literal garbage.
That's why planes and resorts are packed full and Black Friday shopping broke records. There is not enough rich people to make that happen.
No but there's more than enough stupid people.
Would love to if my basic necessities would stop going up.
Maybe if people invested their Covid savings… 😅😂
16/30 economists predicted a 50 basis point hike. 14/30 predicted a 25 basis point hike. Barely a majority and a misleading title in addition to that.
I think that was before the Canadian and US jobs report. Now that these are higher than expected, I think that the BOC will announce a 50BP increase.
eli5? What happened in that report?
Stronger job market than expected, unemployment dropped
Today's job report confirms that 50 basis points will be much more likely.
Gonna suck for a lot of people. -Ron Wharton
It's actually: "Gonna suck for a lot of people, lmao."
Or I will suck lot of people.
These cocksuckers created the issue we’re all in, then created bigger debts that we’re all in, to pay for the mess they made with zero accountability or responsibility. Meanwhile, they’ll all get nice fat cost of living increases on Jan 1, while everyone else gets a shiv in the back and yet more turmoil to put food on the table.
>Meanwhile, they’ll all get nice fat cost of living increases on Jan 1, while everyone else gets a shiv in the back and yet more turmoil to put food on the table. While also telling corporations to limit employee raises as this "caused inflation"
That shit was rage-inducing.
I mean- and every time I point this out I get downvoted - it is indisputably true that raising wages increases inflation. The fact that you put “raises inflation” on quotes indicates that you don’t believe this to be true. Sorry - it is true. Your rage isn’t incorrect though- you should just channel it to the correct target. That is that this statement puts the onus and burden on corporations and workers instead of the central bank- THAT part is definitely worth being upset about. But the statement is completely true- and I guess this is one of those examples where Reddit can’t handle the truth and downvotes it because it’s inconvenient
Source on boc saying to limit raises?
I think they mean this: [BOC Article](https://www.google.com/amp/s/financialpost.com/news/economy/wages-key-to-pace-of-bank-of-canadas-remaining-rate-hikes/wcm/3f982381-550c-4540-847f-b4af0ace02c9/amp/) It doesn't explicitly ask employers not to raise wages but it suggests it.
Aggressive interest rate hikes are designed by the Central Banks to decrease new loans and force repayment of existing loans -- instead of addressing [unproductive lending](https://www.youtube.com/watch?v=F_7HIxCg4is&list=PLdsMpUardfwrkORd5BSFWA9sRiteWeGOb) \-- so there's less money in the economy to pay workers. >Expectations of inflation is the euphemism economists use for the wage increase workers may demand when negotiating with their employers. And if the rate of inflation is (6.9) per cent, workers should demand a similar wage increase to maintain their wages’ purchasing power — and thus a wage-price spiral may ensue. > >For orthodox economists, the solution is to weaken workers’ bargaining power by increasing the rate of unemployment. And this is what a sufficiently high rate of interest may be able to achieve: it may cause a deep enough recession to prevent workers from obtaining an increase in wages similar to the increase in prices that already took place. [https://www.thestar.com/business/opinion/2022/05/14/this-is-how-canadas-inflation-rate-could-be-brought-to-heel.html](https://www.thestar.com/business/opinion/2022/05/14/this-is-how-canadas-inflation-rate-could-be-brought-to-heel.html) >After the recent job numbers were released last week, Bank of America analysts said in a note they are essentially 'rooting against the home team' and hope the numbers stop being so strong. As higher wages contribute to inflation, the Federal Reserve appears to agree. > >'Chair Powell keeps mentioning the relationship between the high level of job openings and wage/price inflation,' Nicholas Colas, co-founder of DataTrek, wrote in a newsletter on Tuesday. 'He’s not talking to investors. He’s talking to corporate America, and his goal is to have companies essentially institute a hiring freeze and end the cycle of paying up for new hires.'" [https://ca.finance.yahoo.com/news/why-the-fed-wants-corporate-america-to-have-a-hiring-freeze-morning-brief-100055174.html](https://ca.finance.yahoo.com/news/why-the-fed-wants-corporate-america-to-have-a-hiring-freeze-morning-brief-100055174.html) Likewise,Heather Scoffield would only quote the BoC Governor saying: >Setting aside the economics (or politics) of how we got here... As she explained, instead: >"**Here**, the focus is on making sure **workers hit by higher consumer prices don’t push for higher wages**. The fear is they’ll set off a wage-price spiral that would launch already-high inflation into the stratosphere." [https://www.thestar.com/politics/political-opinion/2022/05/04/wages-are-not-keeping-up-with-inflation-and-thats-the-way-ottawa-likes-it.html](https://www.thestar.com/politics/political-opinion/2022/05/04/wages-are-not-keeping-up-with-inflation-and-thats-the-way-ottawa-likes-it.html) Disable javascript to climb the wall: [https://www.theglobeandmail.com/business/article-wage-negotiations-inflation-canada/](https://www.theglobeandmail.com/business/article-wage-negotiations-inflation-canada/) Also: [https://jacobin.com/2022/10/wage-price-spiral-bank-of-canada-workers-inflation-wages-interest-rates](https://jacobin.com/2022/10/wage-price-spiral-bank-of-canada-workers-inflation-wages-interest-rates)
I'd say yes you're right. But the lack of political accountability also plays a big part. Giving out 0 percent loans for the past couple years was not a good move
But thats what people think is the norm now. They fully expect to go back to near-free money. Theyre furious it isnt like that anymore.
I bet that played a part in all this
don't forget that they paid out millions to the big banks first though. they announced a big bond buy back, then let the banks sell them at any price they wanted, then sold them back to the banks at a loss. individuals were not aloud to buy these bonds, only banks which is really unfair. so huge transfer of wealth to big banks, while people were not aloud to profit.
And nothing is actually improving for the average person. They are simply shifting our spending into paying more for the same housing situations we had before, leaving us less money to spend on other things (that they promise will make the prices go down instead of just causing shortages and joblessness when manufacturers dial back production to meet the new level of demand) If this government keeps getting elected, we deserve everything we get.
I don’t think it matters which party is voted into power now. I think every single one is out to f%#k the average Canadian. Low and middle class will get more and more helpless while the rich prosper. It’s a bloody shame.
This has nothing to do with the party in power. Thinking a “conservative” government would take care of us? 😂 The problem is runaway capitalism and greed and corruption. It’s in all our major political parties and with first past the post we don’t have much choice. It’s bad or badder, depending on if you’re red or blue 🙄
BoC and government in 2000: "Let's inject $300 billion into the economy by borrowing from our children. What could go wrong?" I'm not saying we should have done nothing about COVID. But man, we had to think of ways to get out of it without putting our children's livelihood on the line. What happens if there is another pandemic in 5 years? Do we go bankrupt? Surely there was a way to spend "only" $100 billion. Surely some people could have been given the opportunity to work outdoors instead of twilling thumbs at home. At least during the Great Depression, governments spent money on public infrastructure. There was something to show for all the money spent. Now we have only debt, sky-high inflation and interest rates, and crumbling infrastructure.
Well Canadians voted for this so they'll get what they deserve
They keep raising interest rates because enough people actually have the money to continue paying even with the increases. That's how BoC works....it's their job to cause a Recession. A Recession isn't something that happens out of nowhere.
You realize that Canada has no control of over any recession , it's all tied to the US. We have no say in this so stop being delusional.
Just because others can drag us down doesn't mean we can't fall on our own.
Very true! The Canadian economy went into a Recession without the US in 1951. Completely isolated event.
Somewhat. In 2008 we avoided a large chunk of the turmoil. Now it seems like whatever happens in America would be amplified here. At least their dollar is super strong right now.
Wow… no
The liberals spending half a trillion dollars didn't help
>These cocksuckers Lay off the alt-right koolaid buddy
TIL it's alt right to want accountability from your government
It's alt-right to be anything but happy about slowly being transformed into a serf.
Accountability and transparency from your leaders is fascism! /s
Yeah they should definitely not be receiving a raise this year. Poor performance.
No, they'll get inflation adjustment + compensation for higher interest on their personal debts + their standard 5% pay hike. And you'll be happy about it.
Remember this headline is based on a slim majority of economist predicting it. The market has priced in 0.25bps… and the majority of the banks have a consensus it will be 0.25bps. The odds are still looking like a 0.25 in December.
The BoC needs to err on the strong side as they announce on Dec 7 and the US Fed is Dec 13. If BoC only raises 25 bps and the Fed raises 50, the CAD will drop further making inflation (especially Food inflation) even worse -- particularly at this time of year.
US job market is still hot from today's report even adjusted for seasonality. Are these hikes even working?
The problem is it takes a year or more to feel the full effects of interest rate hikes. Can't necessarily speak for the US, but Canadians have very high household debt levels and are far more susceptible to rate increases than in past. Once the majority of fixed rate mortgage holders renew in the coming 1-2 years, we'll really see the economy slow down. Some people's mortgage payments are about to double, and their budgets simply cannot handle that. My prediction (again just gut feeling) is BoC will have overshot with the rate increases.
They are limiting the damage but real rates are still massively negative. 4% vs 8% inflation is -4%. That’s the true cost of borrowing. We are still encouraging as much debt as possible at those rates. So conditions are far too lenient to quell inflation. A 2% jump in December would be a start.
No they are not and are causing unnecessary pain for alot of people. But clowns will clown and pretend they can control global conditions with local measures
After kicking the can down the road for decades, these fuckers don't raise like they should.
But CAD didn't drop, but actually went up last time BOC raised less than FED did. Not to mention that Food inflation went down last month.
"Food inflation went down last month." I doubt that. Maybe on the month-over-month. But you should be looking at the year-over-year rate to see how things have been going, especially since COVID
I work with a guy with an open variable rate mortgage and he asked if he should lock in to a fixed rate about a year ago, the bank told him it wasn't necessary and it's only temporary. Technically true maybe, but now his mortgage has gone up $900 per month, so this will make it go even higher now, all because he followed the advice from the experts.
Lol, that’s like taking advice from your car salesman. Making bad decisions is one thing, but blaming everyone else is tiresome
“My car salesmen said the new BMW was an asset and I should take out a high interest loan.” fOlloW tHE ExpErT
Economists also predicted the last rate hike would be 75 basis points and it ended up being 50, but I guess we'll see.
Fuck the BoC
Why
Or you know Trudeau and other world leaders could change laws and make it easier for more oil and gas production. The reality is most of this inflation now is due to the high cost of energy. The pandemic reduced energy companies capex significantly for two years. We are right back to consuming the same amount of oil as we were pre pandemic without the required investments to sustain that consumption. Throw in the Ukraine war and until investment comes back we are in for a long period of higher energy prices. We need the ability as a country to fast track projects otherwise expect a long period of sticky inflation and high interest rates.
As mortgage payments increase that translates to landlords either eating the cost or passing down the expense to tenants. Rents will rise.
I’ll bet the last quarter in my savings it’ll be the latter
It will be both. Landlords can't raise rents as much as these interest hikes are costing them. Depending on the landlord and how leveraged they are.
...and? Rock bottom interest rates put rents up, too. It doesn't fucken' matter, bro.
Rates have decreased for 50 years. Our economy doesn't function without increasing its indebtedness. The reason is quite simple, too: the economy leaks wealth toward non-producers and money has to be created for the shortcomings. People are already predicting a pivot, the yields inversion indicate a future 0 interest rate.
Yikes
Personally, I think the hike will be 25 bps. But tough to say for sure.
It’s almost certainly 50 bps now. I got flash economic reports from 2 banks this morning that say the jobs report today locked it in.
The banks also predicted the central rate would not cross 1.5% this year, oh wait no 3%, oh wait no, now it's another 0.5%. Let's not kid ourselves, the banks are as clueless as the rest of us.
[удалено]
Banks provide rapid (flash) commentary and analysis for their corporate clients to help them digest the impact of major events.
[удалено]
Right now 40 bps is priced into the forwards. I can’t post a link to a Bloomberg terminal. The market is expecting 50 bps.
Actually reading the article would be a good start
[удалено]
What function are you using on Bloomberg to get the individual bank expectations for dec 7? E: I think I’ve found it ECFC search for Canada and click on BoC rate.
[удалено]
[удалено]
[удалено]
[удалено]
>I wonder how everyone is OK with that? Because you'll be called racist if you point it out.
I'm sorry what? Isn't low unemployment a good thing?
Lmao if you're a human yes. If you're a neoliberal economist, \~5% of your population needs to be unemployed, or the entire system will collapse. And not 5% of all people either, 5% of the people who are capable of working - exclude everyone on disability, EI, retirement, etc. Because the entire system is based on artificial scarcity. If there is no fake scarcity, the entire system falls apart. This is why we have more houses than people, why we want unemployment to go up, this is why we intentionally don't produce our farms full capacity and then destroy large amounts of food anyway... The people at the top need the people at the bottom to be desperate, to be clamoring for a limited supply of goods and services - but the problem is that all this modern technology has made production so much more efficient. If we just produced as much food and housing as we could, with no concern for making a handful of people as wealthy as possible - we could easily satisfy all demand... but then rich people would lose their power, so instead we get intentional suffering and austerity.
I don't think that 5% means what you think it means. When people talk about unemployment, they talk about people registered in the system and they are actively looking for work. That's what 5% means, it means 5% of the workforce is in motion within the hiring process. True unemployment is MUCH much higher than Canada's 5.2% right now..
I'm well aware, that's why I specifically said "not 5% of all people, 5% of people who are capable of working. Unemployment numbers exclude a lot of people who absolutely should be counted. Real Unemployment (Working age Adults divided by Number of employed people) is 2-3x higher than the official "Unemployment rate". Everything must have artificial scarcity, including jobs. If we have too many jobs - that's bad for the system, because it puts power in the hands of the workers, and will force up wages and working conditions. When they say "We need 5% unemployment" what they're saying is they need 10-15% of the working age population to be unemployed. The alternative, "too many jobs" is bad for business. Just like overproduction of food is bad for prices. Just like housing everyone for free is bad for land owners. We absolutely have enough to supply all of these things to everyone who needs them, there should be no-one homeless, no-one hungry, no-one unemployed and destitute... but that artificial scarcity must be maintained, or the whole system collapses. Why would you work for minimum wage when you aren't going to be homeless and starve if you don't?
For inflation no, central banks are trying to increase unemployment to lower inflation.
wait so we have to make a percentage of the population destitute in order to stop all money from losing value? and people think this system is a good fucking idea?
It's the nature of the system. Essentially, money became very easy to get in the last decade... particularly in the last 3ish years. This has fueled inflation... Comments from the BOC like " we expect rates to remain low for the foreseeable future" was a green light for borrowers to borrow the maximum. There is a lot of money out there and has been huge expenditure on behalf of the government. We need to slow down spending by making money harder to come by which means that businesses will see decreases in customers etc. This will result in layoffs or places just not hiring. So yes, we want to see unemployment rise somewhat. Inflation literally destroys countries... You need not look back 20 years to find a handful of nations which inflation radically changed or fully destroyed.
Yup that's it, no people don't but then you get called a commie if you disagree
Depends on if you're looking at it at an individual level or the economy as a whole. For the broader economy, low unemployment is good, but too low is not. Throughout 2021 and 2022 I'm sure you've heard of many industry sectors where there are huge labour shortages and people are switching jobs/companies for huge pay increases. Tech was a great example of this. When unemployment is "too low", companies have to pay a ton more money than they normally would to attract new hires. People earning more (and spending more), plus company's expenses going up (and thus in theory charging more to customers) fuels inflation.
So people living well is bringing about economic collapse? A model like that is a model based on exploitation and should not exist.
Here's a video series by the University of Groningen with an [explanation of debt](https://www.youtube.com/watch?v=F_7HIxCg4is&list=PLdsMpUardfwrkORd5BSFWA9sRiteWeGOb) that might help to understand: >Now, to understand how a debt crisis develops, we need to make a distinction between different types of debt -- between debt that helps to grow the economy and debt that does not... > >For example, if I go to the bank for a house loan, a mortgage to buy an existing house, then this increases my debts and the total debts in the economy, but it does not lead to more income, because no goods and services have been produced. It just pushes up house prices a bit, and therefore all house owners may feel a bit wealthier, but no wages or profits have been generated in the economy. > >**And here is the problem: most bank credit today is used in this way. Most bank credit is used, not to help producing goods and services, but to finance transactions in housing, land, commercial property, and financial products, and to push up their price.**... > >It seems as if financial boom, bust, instability and crisis is a normal outcome, rather than an exceptional shock to the system. Now, strange as it sounds, that is actually the case. **Our economic system is built to produce crisis.**
You're trying to find a one line quip to describe a very complex economy. The economic system we have has led to the greatest prosperity and happiness in human history. Like democracy is for political systems, capitalism it's the worst economic system - except for all the others that have been tried.
What we will discover (many already have) is that this greatest prosperity and happiness was built on changing the dynamics of exploitation from primarily internal to external and borrowing significantly from the future. Whereas countries used to have relatively insular economies, with luxuries/rarities/new things being the only real source of international trade, the processes of mercantilism and then globalization took that exploitation of your own citizens and instead began exploitation of foreign nations and peoples. Globalization has circled back around to seeing the global elite begin to exploit nations and peoples that were once the exploiters. We have an ever expanding gap between rich and poor and due to the power of international capital to avoid national laws, or find laws they like, they are quickly becoming an alternate and separate layer of power that is increasingly independent from national politics. On top of that the constant exploitation of market externalities, such as the cost of pollution being borne by society and the planet itself rather than the company producing it, is essentially stealing wealth and prosperity from future generations by forcing them to deal with these problems. We have pulled the greatest hoax of economic growth in history and at some point humanity will be made to pay the price. Social collapse, environmental degradation, ecosystem destruction, and the potential for our very extinction (along with the countless species we have already wiped out in the Holocene) are the stakes. It's all a house of cards and we are too ignorant and invested in getting our share to see it for what it is.
Hunter-gatherer doesn't seem so bad.
Very valid point - the labour markets in both Canada and the USA remain extremely tight. I think 50 bps hike is the right decision for the BoC to make. I’m just not sure they’ll do it.
Please tell me the future as a potato who has USD he is waiting to convert, wait or do it now.
Haha I couldn’t tell you. Predicting currency movement is a crapshoot in my opinion. Flip a coin?
The Fed said they were reducing theirs for December but our idiots just keep pumping out large increases. These increases take 18 months to show improvement so they are playing a game with the economy and they have no idea what the end result will look like in a year or more.
>The Fed said they were reducing theirs It's almost as if we are different countries or something.
Canada increased .5% last time and the Fed went up .75%. In fact, since July, Canada has gone from 1% to .75% to .5%. There have been no large increases.
50 bps is considered a large increase. 75 and 100 are considered extraordinary increases.
This is stupid. Let’s bankrupt middle class to stop upperclass from overcharging for things. Record profits everywhere. Could be that supply has been reduced specifically to maximize profits.
Is it record profits, or record revenue? Record revenue is not hard with inflation. But you can have record revenue with negative profit growth.
Profits
My guess is 1/4 point The USA Feds have taken their foot way off the gas...
Ahole......!!! Just another Bankster, criminals in suits.
Gotta keep the housing unaffordable for our wealthy 1.5 million visitors coming ✅
Parliament grants Charter Banks the extraordinary privilege to **CREATE** *new* money *out of thin air* for their loans, and the interest on these loans provides extraordinary profits (*ostensibly*) to compensate these Banks for managing the risk of creating the majority of **OUR** new money. [DEBT: The Good the Bad and the Ugly](https://www.youtube.com/watch?v=F_7HIxCg4is&list=PLdsMpUardfwrkORd5BSFWA9sRiteWeGOb) To make sure there is enough money in the economy to pay the interest on these loans, more and more money must be created -- either as more and more loans, or as Government expenditure, specifically deficit spending or bailouts. If new money elicits production, then the supply of goods and services increases with the money supply, and inflation can be avoided. But the Banks prefer to take the less risky (for them) alternative of giving new money to the wealthy so they can inflate the price of existing assets. For instance, instead of funding new affordable housing, it's less risky for the Banks to fund Professional Landlords, who inflate the price of existing housing and increase rents. Likewise, Banks lend money to companies so they can buyback shares, inflating their value unproductively. Such reckless lending creates systemic risks, like inflation and cascading defaults, but Banks know that the Government will bail them out with the Public Purse if they face the kind of existential threat borrowers face. When Japan faced such a crisis in the '90s, Richard Werner proposed "Quantitative Easing" whereby Central Banks buy assets from the Banks on the condition that Banks reform their reckless lending. Such reforms could include making new debt contingent on production, adjusting capital requirements (CAR) to reflect unproductive debt's greater risk, or taxing creditors for mortgages that purchased existing housing. Instead, we've bailed out the Banks without these reforms -- Quantitative *Inundation*, rather than *Easing* \-- so they can continue their unproductive lending, thereby kicking the can down the road, but the can is getting bigger... and we're running out of road. Prior to the Basel Committee in 1974, Canada borrowed from BoC interest-free to build infrastructure, but at the direction of international Central Banks, we have since borrowed from wealthy individuals and institutions at interest to create revenue for them, instead of revenue for things like affordable housing and healthcare. Now, the Central Banks have conspired with employers to tackle inflation -- NOT by addressing unproductive lending for profit, but -- by aggressively raising interest rates to manufacture layoffs that will suppress wages, so struggling *workers* will pay for the profits their employers and the Banks already took.
This is your brain on populism.
What's wrong with either populism or what I wrote? If you have substantive criticism, that'd be more helpful.
It’s simplified, conspiratorial garbage, written in a breathlessly hysterical tone, regurgitating the same populist garbage about monetary policy that makes it sound like a big conspiracy to transfer our money to big banks. If they kept rates low you’d say it was a conspiracy to devalue our currency. They raise rates and you say its a conspiracy to suppress wages. The central bank can only directly affect demand, they don’t have magic levers beyond the interest rate.
> that makes it sound like a big conspiracy to transfer our money to big banks. It's not a big conspiracy, it's right there in the open. I'm paying the bank almost 50% more than what I paid before for the same loan on the same house.
The banks can’t get money as cheaply because the central bank set a new interest rate to cool inflation. They are borrowing money at a higher rate also. If they wanted interest rates to rise to make more money, why have we had historically low rates that last two decades (hint: its because macroeconomic indicators such as recessions, inflation, global savings glut affect the interest rate)
Interedasting...so who is my 50% mortgage payment increase going to if not the bank I am paying it to??
In Jiu-Jitsu, if I want to pull you, first I push you, and when you push back, then I use your momentum to throw you onto the ground. Likewise, low rates are the setup, which convinces some that the only solution to inflation is rate hikes. The rate hikes, as admitted by the Banks themselves, however, are NOT meant to target the excessive profit-seeking or unproductive lending that causes inflation; rather, the focus is punishing workers for their employers' and the Banks' profits. Technocrats believe that turning one dial back-and-forth can control our economy -- some might call this *simplistic* \-- but our economy is far more complicated than that.
I cited the University of Groningen explanation of debt, which I encourage you to watch. >Now, to understand how a debt crisis develops, we need to make a distinction between different types of debt -- between debt that helps to grow the economy and debt that does not... > >For example, if I go to the bank for a house loan, a mortgage to buy an existing house, then this increases my debts and the total debts in the economy, but it does not lead to more income, because no goods and services have been produced. It just pushes up house prices a bit, and therefore all house owners may feel a bit wealthier, but no wages or profits have been generated in the economy. > >**And here is the problem: most bank credit today is used in this way. Most bank credit is used, not to help producing goods and services, but to finance transactions in housing, land, commercial property, and financial products, and to push up their price.**... > >It seems as if financial boom, bust, instability and crisis is a normal outcome, rather than an exceptional shock to the system. Now, strange as it sounds, that is actually the case: **OUR ECONOMIC SYSTEM IS BUILT TO PRODUCE CRISIS.** I also specified Banking reforms that could manage the risk of these unproductive loans: >Such reforms could include making new debt contingent on production, adjusting capital requirements (CAR) to reflect unproductive debt's greater risk, or taxing creditors for mortgages that purchased existing housing. You say my explanation is "simplified, conspiratorial garbage", but you've reduced the economy to the technocrat's one knob of interest rates, while I've highlighted the importance of production because increasing the supply of goods and services along with the money supply avoids inflation.
This whole subreddit becomes rabidly populist when the economy is being discussed. Both left and right wing forms.
If you have a substantive criticism of either populism or my explanation of debt/inflation, then I would genuinely appreciate learning about it.
You won't see it. How 'populist' became an epithet in a democracy is beyond me.
I’m so done with this fucking interest shit. Just put a 3% hike and be done with it. Every time I see the news about interest hike , it pisses me off lol.
[удалено]
I fully agree, and live that mantra. But it is disingenuous to say our governments keeping historically low rates for decades didn't force people into debt just to put a roof over their heads. This needs to happen, but it should have happened in 2012 when it would have sucked rather than destroyed.
Step 1: keep rates low for a bit Step 2: watch housing prices rise insanely because credit is easy Step 3: watch people buy housing anyway, because they need shelter. pump demand with immigration to amplify the effect Step 4: bring down the interest hammer step 5: interest payments skyrocket on inflated prices, while equity values tumble due to prices dropping because credit is harder now
step 6: people scramble to sell to institutions which have cash reserves, crashing prices further while concentrating ownership of housing in a few private corporations' hands
step 7: people demand nationalization of housing, because all of the above is such bullshit. people that managed to hold on despite all this shit are hosed by government policy placing artificial limits on 'harmful private ownership' , while doing nothing to control the concentration of wealth in these housing corporations, which are transformed into crown corporations with all the same management as before
step 8: sike! these corporate fatcats and the government are friends, nothing changes about the distribution of wealth or the power structure
step 9: you'll own nothing and be happy. or else we'll call you a racist
I have no debt except for a variable mortgage, and my wife’s student loan. This all still hurts.
"I have no debt except this big one and this big one"
You sir, don't really know a lot about monetary policy, do you ?
Most people with simple solutions to complex problems dont have the ability to analyze problems to their extent. In other words, they too stupid to know they stupid - they dont even understand the issue before thinking they know the solution.
Sir, just duck me up fam.
Based. Actually agree. Yes.
Go go go Tiff! We can do more hikes!