# Inflation?



## londoncalling

Although the recent inflation numbers are higher than what we have seen in quite sometime, I am puzzled by how some people are surprised by it. Many economists and posters here had predicted this increase due to all the money printing that took place during the pandemic. In some ways people have been warning about inflation since the end of the great recession. Regardless, the inflation has given me an opportunity to reassess my portfolio. Obviously, equities with no or low debt will be better off than those with higher debt to equity. Are any active investors making adjustments to the allocation or tilting their equity to certain sectors?


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## MK7GTI

londoncalling said:


> Although the recent inflation numbers are higher than what we have seen in quite sometime, I am puzzled by how some people are surprised by it. Many economists and posters here had predicted this increase due to all the money printing that took place during the pandemic. In some ways people have been warning about inflation since the end of the great recession. Regardless, the inflation has given me an opportunity to reassess my portfolio. Obviously, equities with no or low debt will be better off than those with higher debt to equity. Are any active investors making adjustments to the allocation or tilting their equity to certain sectors?


I’ve been buying TD, RY, BNS, PG, and JNJ most recently. Probably will stick with this trend until end of Q2 2022.


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## james4beach

londoncalling said:


> Are any active investors making adjustments to the allocation or tilting their equity to certain sectors?


I'm not adjusting anything myself. I don't like placing trades that are too popular (overcrowded trades), especially those pushed by the media. And fear about inflation is really in fashion right now. That suggests to me that any trades placed due to fear of inflation are likely the wrong trades.

It's too early to see if the inflation rate will be sustained and high. Remember that the inflation rate for 2017, 2018, 2019 was just under 2%. Then in 2020 the inflation rate dropped suddenly, fell near 0% for a while. Currently it's rebounded to 4% but in fact, when you calculate the *annualized inflation rate* over the trailing few years, it's still very close to 2%

Investors have a tendency to extrapolate current conditions, so people jump to assume that 4% or 5% inflation will stick around, but I'm not sure.

What will inflation be in 2025? That's the real question an investor has to ask, and we have no idea what the answer is.


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## doctrine

londoncalling said:


> Although the recent inflation numbers are higher than what we have seen in quite sometime, I am puzzled by how some people are surprised by it. Many economists and posters here had predicted this increase due to all the money printing that took place during the pandemic. In some ways people have been warning about inflation since the end of the great recession. Regardless, the inflation has given me an opportunity to reassess my portfolio. Obviously, equities with no or low debt will be better off than those with higher debt to equity. Are any active investors making adjustments to the allocation or tilting their equity to certain sectors?


This inflation was deliberate and planned by central banks. There was a heavy overtone of progressiveness too. The theory is that inflation is bad for the 1% and good for everyone else. It would force wages to go up finally. 

Well, wages have gone up. But not in real terms. No surprise to any real economist. Maybe if North America had spent trillions on actual infrastructure, rather than just giving it to people to spend on themselves and not work.

In other news, $15 minimum wage is now no problem thanks to inflation. Too bad everything else costs more.


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## james4beach

doctrine said:


> This inflation was deliberate and planned by central banks.


This all began with the promises made by Greenspan and Bernanke. The promise was: we will never let a depression or economic contraction happen ever again

So when COVID hit, they were committed to providing as much stimulus and liquidity as possible. This is very ideological to the central banks (especially the Federal Reserve).

When it comes to balancing stimulus vs inflation side-effects, it's pretty clear they are WAY heavily tilted towards providing stimulus. Again this started with Alan Greenspan and has been the style of the Federal Reserve ever since the mid 1990s.

Imagine if they only provided mild stimulus, and we still had a depression. There is no way they are going to take that chance. The Federal Reserve would rather have inflation than deflation.

And this is why we get one asset bubble after the other (and each one causes destruction and catastrophe). First Greenspan fuelled the market in the 90s, and we got the dot com bubble. Then Greenspan fuelled the housing and mortgage market in early 2000s, giving super low rates and encouraging mortgage borrowing... so we got the housing bubble and 2008 crisis. And ever since 2009, they've been pumping liquidity into the market like crazy, amping it up to new levels in 2020. Should be interesting to see what kind of bubble and crisis results from all this.

When that finally cracks, it could wipe out a lot of equity holders and risk-takers.


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## londoncalling

The US Infrastructure bill was something that was needed, sought and promised under the Trump administration pre pandemic. I agree 100% that infrastructure spending in Canada would do a lot to keep the economy going, provide facilities and services to tax payers. Wages have gone up in some sectors, declined in some and remained flat in others. Real wage growth is what really matters for most people. The gig economy has shifted everybody's mindset into believing we can all achieve great wealth by becoming entrepreneurs. As far as inflation goes I am not basing my investing decisions on 1 month of data. I just found it odd that the media as made such an issue out something everybody knew (or should have known) was happening. Each fall I take the time to give a close look at more portfolio and plan for 2022. I think it is a habit I picked up from working on company goals and budgeting each year. I have some GICs mature in October and November have them sitting in a HISA account presently. It may be awhile before term rates rise in Canada. I had considered moving some of it over to equities to better reflect my risk tolerance but the returns on equity this year may have already made that shift for me. I guess for now I will take a look at my sector allocation and see how it has changed since last year while cash continues to roll in from new contributions and dividends.


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## james4beach

londoncalling said:


> I guess for now I will take a look at my sector allocation and see how it has changed since last year while cash continues to roll in from new contributions and dividends.


Also, a nice thing about the index (like XIU for example) is that it adapts as the economy adapts. Tech has become a powerful sector and is now reflected in the Canadian index. A few years ago there was only a tiny tech sector in Canada.

Today though Tech is 13% of XIU which is pretty amazing.

I've been doing some of my own stock and sector picking, but I probably should have just put more money into XIU instead of guessing at my own sectors.


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## doctrine

james4beach said:


> This all began with the promises made by Greenspan and Bernanke. The promise was: we will never let a depression or economic contraction happen ever again
> 
> So when COVID hit, they were committed to providing as much stimulus and liquidity as possible. This is very ideological to the central banks (especially the Federal Reserve).
> 
> When it comes to balancing stimulus vs inflation side-effects, it's pretty clear they are WAY heavily tilted towards providing stimulus. Again this started with Alan Greenspan and has been the style of the Federal Reserve ever since the mid 1990s.
> 
> Imagine if they only provided mild stimulus, and we still had a depression. There is no way they are going to take that chance. The Federal Reserve would rather have inflation than deflation.
> 
> And this is why we get one asset bubble after the other (and each one causes destruction and catastrophe). First Greenspan fuelled the market in the 90s, and we got the dot com bubble. Then Greenspan fuelled the housing and mortgage market in early 2000s, giving super low rates and encouraging mortgage borrowing... so we got the housing bubble and 2008 crisis. And ever since 2009, they've been pumping liquidity into the market like crazy, amping it up to new levels in 2020. Should be interesting to see what kind of bubble and crisis results from all this.
> 
> When that finally cracks, it could wipe out a lot of equity holders and risk-takers.


While this is true, both Powell and Macklem are repeatedly on the record as justifying the current posture based on increasing wages. They both wanted it to run "hot" - to let the labour market heat up, and force wages to rise. 

Fundamentally there is nothing wrong with inflation nor central banks stimulating it. But to think you will get "real" wage gains is just ridiculous. It is the same pot of resources spread a little more thin as tens of millions of workers sat home, and now we suffer for lack of goods across the supply chain because of it. And not just Chinese made cheap stuff - durable goods, fuel, food, etc. Sigh. Predictable.

And ironically, those with assets continue to gain, which is the opposite of what Powell and Macklem desired. Imagine that. Paying people to stay home didn't make everyone richer.


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## peterk

The real scary thing isn't the 5%+ inflation currently, it's that it's happening while covid economic suppression is still active, and also while a good chunk of the population is saying things like "I'll just wait till next year to buy that stuff when prices are better". What happens when people become impatient and the prices next year aren't better, and the message flips from "wait till the prices drop" to "get it now before prices are even higher"??

Also the central banks' messaging that the inflation is "transitory", "temorary" or whatever words they are using is a scary and extreme message, but somehow we don't think it is extreme at the current moment --- Like really, the central bank is saying deflation is coming and prices will drop next year? That message would recklessly trigger a recession if delivered in normal times... The only reason they'd be saying it now is to try to stifle inflation from getting far worse, which they must be shaking in their boots over to be suggesting that prices will drop soon.


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## sags

Peter Schiff and others make a living claiming government spending (money printing) injected 15-20% into the GDP and it is driving inflation now.

What they don't say is GDP went into steep decline due to the coronavirus, because it doesn't fit their "government spending is always bad" narrative.

Money printing for years but no inflation.......how come ?

Maybe in part because the covid pandemic sucked more money out of the economy than the central banks put into it ?

In Canada, the CERB benefit was less than the minimum wage. It replaced lost wages for people with fewer dollars. How is that inflationary ?

The velocity of money slowed down considerably during the pandemic due to lower consumer spending. People weren't spending money they didn't have or they were afraid to spend money when facing an uncertain job future.

There is talk of the tens of billions of dollars that consumers have in their bank accounts, but the reality is most of that money flowed to the wealthy.

Average consumers aren't sitting on mountains of covid cash. If they were they wouldn't be racking up credit card debt and borrowing payday loans.

Today we have price inflation caused by supply and demand shortages due to supply chain disruptions. People need to buy goods that are sitting on ships.

Depending on future covid disruptions, the inflation is transitory and temporary. Labor shortages are a problem, especially in the supply chain jobs.

But people have to work to earn a living, so the labor shortage will correct itself in time.

What covid has revealed are the inherent risk factors of the just in time (JIT) business model, and companies are scrambling to convert away from it.


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## m3s

sags said:


> Today we have price inflation caused by supply and demand shortages due to supply chain disruptions.
> 
> Depending on future covid disruptions, everything will return to normal in time.


Nothing will return to normal @sags

When a business raises their price it won't come back down. When a landlord raises rent it won't come back down. Inflation devalues not only fiat but also debt. It's a stealth tax on the middle class because wages will not raise as fast. It's a boon for those with hard assets and debt. It also increases taxes on all those appreciated assets. Win win win unless you're not

Meme because maybe the memesters are on to something here


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## sags

Wages will rise as prices rise, unless the free market system is corrupted by bringing in cheap foreign labor or passing "right to work" types of laws.

Inflation is more of a political issue than an economic one, as politicians fear a consumer panic about price increases will threaten their political futures.

Lumber prices rose and fell. Businesses drive towards market share and have to be competitive.

People who live in areas with limited competitive markets, inflation is a bigger problem but that is the price they pay to live where they do.

That is why real estate in rural areas or small villages and towns has generally been cheaper than densely populated urban areas.


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## m3s

sags said:


> Inflation is more of a political issue than an economic one


Just wow. I can't even.



sags said:


> Lumber prices rose and fell. Businesses drive towards market share and have to be competitive.


Lumber is a commodity. That's what commodities do. Very different from products where the price is set.

The price of cars, rent, books etc don't adjust this much. They go up and they stay up. It's much more obvious when living with different currencies



sags said:


> People who live in areas with limited competitive markets, inflation is a bigger problem but that is the price they pay to live where they do.


I listen to economists all day. They make a lot of sense. They make a lot of money.

You don't make any sense


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## sags

People are freaking out because their mortgage interest rate might rise to 4%, and there might be 5% price inflation.

Our first mortgage interest was 21% and over 20 years later our mortgage interest rate was 7.99%. Inflation was higher than it is today but we survived.

People who are overextended will deal with it as past generations have. You tighten the budget, work more hours, or sell stuff to lower your debt.

In worse case financial scenarios, you declare bankruptcy and start over with a life lesson under your belt and a better plan.

Higher interest rates would be a whole new world for a lot of people.


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## damian13ster

The problem is - the one who is most overextended is the government. And they keep spending into oblivion like higher interest rates will never happen


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## sags

That isn't a problem for the government. They decide their own wages.


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## damian13ster

They don't decide interest rate of their debt


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## 307169

m3s said:


> I listen to economists all day. They make a lot of sense. They make a lot of money.
> 
> You don't make any sense


If you want to persuade people, it is better you are being polite. 



damian13ster said:


> The problem is - the one who is most overextended is the government. And they keep spending into oblivion like higher interest rates will never happen


Technically, if the economy improve, the tax revenue will also increase. 
What concern me is not one time spending, it is structural deficit that I mention previously. After all, unlike you and me, the government will not die, so it will always able to service its debt. _Consequentially, it never needs to repay its debt._ In case of a change in regime, a new government that control the land will also need to take over the debt, unless it wants to never borrow money in the future. (You can't inherit a house without inherit the mortgage). However, if the market caught wind of the fact that the government is running a Ponzi scheme (welfare state when we have aging population), the market will not be this kind.


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## damian13ster

Johnny_kar said:


> If you want to persuade people, it is better you are being polite.
> 
> 
> 
> Technically, if the economy improve, the tax revenue will also increase.
> What concern me is not one time spending, it is structural deficit that I mention previously. After all, unlike you and me, the government will not die, so it will always able to service its debt. _Consequentially, it never needs to repay its debt._ In case of a change in regime, a new government that control the land will also need to take over the debt, unless it wants to never borrow money in the future. (You can't inherit a house without inherit the mortgage). However, if the market caught wind of the fact that the government is running a Ponzi scheme (welfare state when we have aging population), the market will not be this kind.


'if the economy improve' - we are at historically low investment, and historically low R&D spending. On what basis would one think economy is going to improve? Only thing Canada has going for it us climate change. Warmer temperatures will unlock value in vast mass of land. Studies show Canadian economy would be best at +4 warming. Ironic, isn't it?

Exactly, you are looking at major devaluation of a dollar unless trend reverses quickly, and that means stagflation


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## 307169

@damian13ster 
We need to further deregulate our economy, so we can increase productivity quickly in order to avoid stagflation. 

However, as trade protectionism become a more serious problem, I still think stagflation is a serious risk.


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## m3s

sags said:


> People are freaking out because their mortgage interest rate might rise to 4%, and there might be 5% price inflation.
> 
> Our first mortgage interest was 21% and over 20 years later our mortgage interest rate was 7.99%. Inflation was higher than it is today but we survived.
> 
> People who are overextended will deal with it as past generations have. You tighten the budget, work more hours, or sell stuff to lower your debt.
> 
> In worse case financial scenarios, you declare bankruptcy and start over with a life lesson under your belt and a better plan.
> 
> Higher interest rates would be a whole new world for a lot of people.


It's not the same as past generations. RE prices were much lower relative to wages when rates were higher

8% mortgage, cheaper RE and reasonable saving yields was a much healthier economy. Inflation raised the value of assets and benefits those who already own. Of course you survived @sags all you had to do was buy a house and let its value increase. How would you like to start now the RE is so high?

Low mortgage rates allowed people to borrow more and bid up RE prices. Raising rates back up is not really possible without crushing the young people who just bought in. Saying people just need to learn a life lesson and a better plan is very narrow sighted and ignorant of reality people face today.

Worst case scenario is far worse than some personal bankruptcies. CMHC and banks would suffer. Economy would suffer


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## 307169

Ultimately, government is printing a lot of money is because of aging population. Aging population reduce the amount of consumer and the size of labour force, which reduced the growth of economy. As a result, the government have to continuously reduce interest rate in order to encourage investment in order to counteract the effect of aging population.


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## sags

A traditional hedge for inflation is gold.

The price has done pretty well even out to the past 20 years where it is up 580% and the past 5 years is up 53% and the past 30 days is up 5.58%.









Gold Price


Where the world checks the gold price




goldprice.org


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## sags

When boomers were buying homes at astronomical interest rates, home prices didn't rise as they have in the low interest environment of the past few years.

Many boomers had already retired and sold their homes before the steep rise in home prices.

We never considered our homes as investments, but liabilities that provided shelter. It was considerably less costly to rent shelter.

Our investments were pension contributions, CSBs, GICs, and for some financially astute boomers equities, often in the form of mutual funds.

Young people who are overextended on their mortgages have put themselves at great risk if interest rates rise precipitously, and I don't see any way for them to avoid the ensuing financial hardship that would create.

The problem is too big for the government to save everyone.


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## damian13ster

Housing was never supposed to be retirement savings vehicle. Making it so is one of the root causes of economical problems in Canada


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## Covariance

londoncalling said:


> Are any active investors making adjustments to the allocation or tilting their equity to certain sectors?


Yes. screened out companies that don't have pricing power. Started a while back and on-going. As there is strong underlying economic growth I'm less concerned about debt levels if the company can grow cashflow. Some of the best opportunities in fact have been in heavily indebted companies where the equity value has recovered strongly in reaction to fundamentals.

Looking ahead my sense is we need to be selective. With valuations where they are any company that misses on top line or earnings has it's multiples reset - immediately. Focus on good operators. Somewhat of a contrarian to some I'm focused on large cap (oil aside). Thesis is larger enterprise with good management have the resources to manage a transition manufacturing and logistics processes reflecting the current environment, and also implement digital transformation.


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## m3s

sags said:


> The problem is too big for the government to save everyone.


The problem is they are trying

Powell announces new Fed approach to inflation that could keep rates lower for longer


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## damian13ster

All they care about is next elections.
Long term consequences be damned


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## sags

Yet the loonie goes up because the world wishes they were us.

Don't worry, Chrystia has a masterful plan and Canadians will be thrilled and amazed.

Stay tuned.....all will be revealed soon.


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## damian13ster

Loonie goes up because oil goes up.
Compare where loonie was at 80$/bbl in 2010-2013 to where it is at 80$/bbl now.
Then you wouldn't talk nonsense about loonie going up.
CAD is still a petrodollar. It is just weaker than it was pre-2014.


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## MrMatt

sags said:


> When boomers were buying homes at astronomical interest rates, home prices didn't rise as they have in the low interest environment of the past few years.
> 
> Many boomers had already retired and sold their homes before the steep rise in home prices.
> 
> We never considered our homes as investments, but liabilities that provided shelter. It was considerably less costly to rent shelter.
> 
> Our investments were pension contributions, CSBs, GICs, and for some financially astute boomers equities, often in the form of mutual funds.
> 
> Young people who are overextended on their mortgages have put themselves at great risk if interest rates rise precipitously, and I don't see any way for them to avoid the ensuing financial hardship that would create.
> 
> The problem is too big for the government to save everyone.


The government needs to smarten up and allow development, and fix housing laws.
They caused this problem, the first step to fixing it is to stop causing it.

Some people are touting the NZ approach, of basically trying to get rid of government roadblocks to building housing.
Just think about that, the next big idea in fixing real estate is stopping government interference.

Also figure out how to raise interest rates << that's the hard one.


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## Mechanic

I remember struggling, like others of our generation, on $12/hr and paying our 21.75% mortgage on my $80k home in the 80's. What a struggle that was, fortunately it dropped to about 19 % the next year and slowly dropped as time went by. The fact that several homes later we have finally paid off our mortgages, our home has grown and increased our NW, doesn't give us spendable cash because we still need a place to live and don't want to be renters. We could downsize a bit, but that would only free up a little cash.


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## Ukrainiandude

*Inflation rate jumps again to new 18-year high of 4.7%*







Statistics Canada says the 4.7 per cent rate is the highest since February 2003.
cbc.ca/news/b...

will interest rates ever return to 4-5% ? That what they were back in 2003 to target the inflation.


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## KaeJS

Mechanic said:


> I remember struggling, like others of our generation, on $12/hr and paying our 21.75% mortgage on my $80k home in the 80's. What a struggle that was, fortunately it dropped to about 19 % the next year and slowly dropped as time went by. The fact that several homes later we have finally paid off our mortgages, our home has grown and increased our NW, doesn't give us spendable cash because we still need a place to live and don't want to be renters. We could downsize a bit, but that would only free up a little cash.


I rather have an 80k mortgage at 20% than a 600k+ at 2%.

Wages have not increased.

It's all fictional, fairytale money.
RE (and everything else) keeps rising and wages are not.


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## Thal81

Ukrainiandude said:


> will interest rates ever return to 4-5% ? That what they were back in 2003 to target the inflation.


Well, let's see. Imagine you have a $300,000 mortgage with a 1.3% variable rate like seems reasonable right now according to Ratehub.ca. With 25 years amortization, your monthly payment is *$1185*.

Now, let's say the BoC interest rate goes up to 4%. This would increase your mortgage rate by 3.75%, bringing it to 5.05%.The same house now costs $*1753* per month, an increase in payments of almost 50%. That would destroy the finances of pretty much any average family in Canada.

And that is the story why the BoC rate will never go back to 4%.


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## like_to_retire

Thal81 said:


> And that is the story why the BoC rate will never go back to 4%.


In 1981 I was paying 21% on my mortgage, and lots of people were losing their homes. Why do you feel this can't happen again.

ltr


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## birdman

sags said:


> A traditional hedge for inflation is gold.
> 
> The price has done pretty well even out to the past 20 years where it is up 580% and the past 5 years is up 53% and the past 30 days is up 5.58%.
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Gold Price
> 
> 
> Where the world checks the gold price
> 
> 
> 
> 
> goldprice.org


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## damian13ster

Index for tax deduction is a joke. Like inflation doesn't exist


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## nathan79

KaeJS said:


> I rather have an 80k mortgage at 20% than a 600k+ at 2%.


No doubt! Also consider how much easier it was to save up a downpayment.

If you were really worried about the interest payments you could just save up for longer and take a smaller mortgage.

$80,000 house in 1981:
$12/hr = 25K/yr salary (approx.)

Time required to save down payment (10% savings rate):
5% down = *1.6 yrs*
20% down = *6.4 yrs*


$600,000 house today:
Salary adjusted for inflation = 70K/yr (approx.)

Time required to save down payment (10% savings rate):
5% down = *4.3 yrs*
20% down = *17.1 yrs*

These numbers might be conservative. A house that cost 80K in 1981 is easily a million dollars around here today.


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## doctrine

nathan79 said:


> Time required to save down payment (10% savings rate):
> 5% down = *4.3 yrs*
> 20% down = *17.1 yrs*
> 
> These numbers might be conservative. A house that cost 80K in 1981 is easily a million dollars around here today.


So it might take a long time, but there are shortcuts. The $600,000 house needs $120,000 for a 20% downpayment. So their parents with a million dollar home can borrow enough money to easily give 3 children a full 20% downpayment. While this isn't true for everyone, it is true for close to a majority of the population.

And even if you didn't have supporting parents, then you can accelerate the 5% down by investing in your RRSP and taking out the $30k out on a tax free loan. Probably only actually 3 years of savings. And half that at a 20% savings rate. And half again if you have a working couple.

And with inflation at 5%, those old mortgages are looking quite nice. Your $600k mortgage saves you $30k on inflation alone in a single year, giving you a 100% return on your 5% down payment, a little less with insurance.

It's easy to see how it's not hard to get a mortgage, even at $600k. This is why prices are rising - the money is loose and easy, and competition is very high.


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## Mechanic

nathan79 said:


> No doubt! Also consider how much easier it was to save up a downpayment.
> 
> If you were really worried about the interest payments you could just save up for longer and take a smaller mortgage.
> 
> $80,000 house in 1981:
> $12/hr = 25K/yr salary (approx.)
> 
> Time required to save down payment (10% savings rate):
> 5% down = *1.6 yrs*
> 20% down = *6.4 yrs*
> 
> 
> $600,000 house today:
> Salary adjusted for inflation = 70K/yr (approx.)
> 
> Time required to save down payment (10% savings rate):
> 5% down = *4.3 yrs*
> 20% down = *17.1 yrs*
> 
> These numbers might be conservative. A house that cost 80K in 1981 is easily a million dollars around here today.


That $80k house is $350-400k today and salary went from $25k to $100k. Location plays a big part. Had to live where the work was.


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## Thal81

like_to_retire said:


> In 1981 I was paying 21% on my mortgage, and lots of people were losing their homes. Why do you feel this can't happen again.
> 
> ltr


Good question. I was going to reply that back then, rates were generally higher and so the relative change didn't impact people's finances so much, but then I looked at the BoC historical rates and saw that before 1955, rates were around 2% for a long time. So yeah, I guess that going to super high rates after a long period of low rates can indeed happen.

Well, now I'm scared, haha.


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## like_to_retire

Thal81 said:


> So yeah, I guess that going to super high rates after a long period of low rates can indeed happen.


Yeah, there's a whole generation that has never experienced high interest rates and they tend to feel that it can never happen. Back in the 80's, inflation started rising out of control (sound familiar) and so to counteract this, the Bank of Canada started raising rates. 

My favourite memory was one where I was at work and a bunch of us were sitting around at our desks and the manager came through as he did every year with a signup list asking who wanted to buy Canada Savings bonds to be subtracted from their cheques in small amounts until the bond was paid off. When we asked the yield he said it was 19.5%. Everyone laughed, and said no thanks, since we all just knew that rates would be going higher and that 19.5% was a terrible rate.

I wouldn't mind one of those bonds today.

ltr


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## sags

Remember Pierre Trudeau and wage and price controls ?

I don't remember if it was an effective strategy, but I remember leading workers out of our factory on the national Day of Protest and getting fired for it.

I got my job back because the other workers refused to go back to work......but it was an interesting time.





__





The largest labour protest in Canadian history | Canadian Labour Congress


On October 14, 1976 over a million workers walked off the job across Canada as part of a General Strike called by the Canadian Labour Congress to protest the federal government’s plans to impose wage and price control legislation – a broken campaign promise and betrayal of workers by the Trudeau...




canadianlabour.ca





Edit.......after research, the wage and price controls were a failure. The idea was an election campaign by the Conservatives that Trudeau said was ridiculous but a year later he adopted. It was a blatant attempt to control inflation by capping wage increases. Inflation was at 11% and the wage and price controls only dropped it by 1.7%.......a dismal failure that caused a lot of financial distress to working families.


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## sags

LTR is right and this generation will have to learn how to manage their own inflation. They do so by the spending choices they make.

We can't control all our costs, but we can control a significant number of them to make a difference.


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## Ukrainiandude




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## sags

$3 USD for a US gallon is pretty cheap gas. It is about the same price as Canada.

People have been spoiled by historic low interest rates, gas prices, food prices, and cheap trinkets and trash from China.

First world problems.


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## Ukrainiandude

Bonds are getting, in my opinion, worse and worse. Cash is disappearing at the rate of inflation which is over 6%, and I think is going higher."

Siegel anticipates rising prices will stretch out over several years, with cumulative inflation reaching 20% to 25%.








Market is ‘one more bad inflation report’ away from a correction, Wharton’s Jeremy Siegel warns


Long-term market bull Jeremy Siegel warns the Federal Reserve will likely take a more aggressive approach to fighting inflation within weeks.




www.cnbc.com


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## sags

Sounds like good news for people who have their savings stashed in GICs.


----------



## m3s

sags said:


> Sounds like good news for people who have their savings stashed in GICs.


How exactly is inflation good news for GICs sags?

The real return is negative when rates are less than inflation.. and you may even pay income tax on negative real returns

What am I missing here?


----------



## sags

They gain more in interest than they spend on inflation.

If someone has $100,000 in GICs, they don't have to run out and spend it right away.

Maybe they will use the interest income to pay the monthly payment on a debt....like a 7 year car loan with a low fixed interest rate.

Maybe they will use the interest to buy a vehicle that has a discount for cash only.

Maybe they will spend it on Black Friday sales on items that are discounted by 50%.

Maybe they will never spend it. There is no disputing that getting 20% interest on your money is better than getting 2%.

People should focus on managing "their" inflation and not worry about the "overall" rate of inflation for stuff they don't buy anyways.

It doesn't matter to me how much a new designer shirt has gone up in price, because I buy my clothes at Goodwill.

I buy a lot of things at Goodwill and Salvation Army Thrift stores........dirt cheap and no taxes. The stuff often still has the retail price tags still on them.

Shop smart......you are your own best inflation fighter.


----------



## m3s

sags said:


> Shop smart......you are your own best inflation fighter.


I agree with shopping smart. It still doesn't make inflation good for people with GICs denominated in fiat.

Inflation is good for people who hold assets not fiat. Fiat is devalued by inflation. Value of assets are inflated in terms of fiat

You don't want to "stash cash" anywhere if you expect inflation. Regardless how smart you shop imo


----------



## AltaRed

Ukrainiandude said:


> Bonds are getting, in my opinion, worse and worse. Cash is disappearing at the rate of inflation which is over 6%, and I think is going higher."
> 
> Siegel anticipates rising prices will stretch out over several years, with cumulative inflation reaching 20% to 25%.


I don't think central bankers will act that quickly. YOY inflation is still skewed by excessively "low" equivalent months in 2020 with uncertainty about how much current inflation is transitory. Looked at on a 2 year cycle back to 2019, average YOY per year over the two years is still well under 3%. No need to have a heart palpitation until late Spring. But I do expect there to be a move by central bankers by the end of 1Q22 to temper potential and arrest momentum.

One generally does not hold bonds or GICs for return ON investment. They hold for volatility reduction, cash reserve, etc. For seniors in retirement in withdrawal mode, most would hold it as a reserve bridge in event of equity market meltdowns. Much of my 15% fixed income component is cash reserve in HISAs @ 1.15-1.25% for that plus flexibility in expenditures. Quite happy with that situation.


----------



## m3s

AltaRed said:


> One generally does not hold bonds or GICs for return ON investment. They hold for volatility reduction, cash reserve, etc. For seniors in retirement in withdrawal mode, most would hold it as a reserve bridge in event of equity market meltdowns.


Hedge against equities makes sense. Still trying to wrap my head around inflation being good for GICs


----------



## AltaRed

m3s said:


> Still trying to wrap my head around inflation being good for GICs


Sags is my Ignore list so I don't see his posts and don't know the context but clearly inflation is terrible for GIC returns. 3% inflation and 2% GICs is terrible. So is 5% inflation and 3% GICs. 

The context might be speculation that high inflation will result in central banks having to raise short term interest rates so much to beat inflation back to 2% that the bond yield curve will then result in 4% GIC interest rates. Entirely possible but by then the compounded hemorrhage on old GICs has already put the funds in a significant loss position in real terms. A better situation would be 1% inflation and 1.75% GIC rates on a long term basis.


----------



## OptsyEagle

Yeah, when read post about the relationship between inflation and GICs I kind of shook my head. Every time I see the most recent announcement on inflation I go "ouch" and think of my GICs. As AR indicated, I don't own them to make money, I own them so I always have some. I agree, however, these days I feel like I will always have less and less...but at least it is something.


----------



## sags

What if you had a fixed rate auto loan for 84 months at 2% interest and used GIC interest to make the payments ?

Would you rather get 2% interest on your GIC or 10% interest ?

Same can be applied to mortgages or any long term debt with fixed interest rates.


----------



## m3s

sags said:


> Would you rather get 2% interest on your GIC or 10% interest ?


I'm trying to calculate how I would ever not want 10% but it's hurting my head

Debt is good in an inflationary environment because its value is debased. So ideally you take out debt for an asset that gets inflated like a house

Sounds like you are cancelling the rates out with fixed rates but I don't follow the logic. GIC income is taxed so I would not consider it equal


----------



## OptsyEagle

sags said:


> What if you had a fixed rate auto loan for 84 months at 2% interest and used GIC interest to make the payments ?
> 
> Would you rather get 2% interest on your GIC or 10% interest ?
> 
> Same can be applied to mortgages or any long term debt with fixed interest rates.


Using straight math, owning GICs while you have a mortgage is colossally stupid anyway. All you are doing is giving your money to the bank with the GIC purchase and they are loaning it right back to you with the mortgage offering. In between you are paying them an interest rate spread to basically move your money out of one pocket into the other. That will almost never be profitable. Car loans are the same just wrapped in a different package. If you decide you want to have both GICs and a loan then you need to be willing to pay the cost of that set up.

The only benefit of having GICs during a higher inflation period is that the interest rates you renew them at go up, but of course when all the math is done, usually you will find that the increase in rates does not keep up with the devaluation of the money itself, from the inflation.

There will always be a cost to owning GICs during inflationary times but that cost must be justified by the guarantees they provide. Its the return on them that suffers greatly during inflation but the guarantee remains.


----------



## m3s

OptsyEagle said:


> In between you are paying them an interest rate spread to basically move your money out of one pocket into the other. That will almost never be profitable. Car loans are the same just wrapped in a different package.


Income tax on the GIC income plus the spread

I don't know of any GIC that come out ahead


----------



## OptsyEagle

m3s said:


> Income tax on the GIC income plus the spread
> 
> I don't know of any GIC that come out ahead


Sure. I keep all mine in my RSP but I do understand that I am just deferring the tax issue. GICs are usually still ahead of burying the money in my backyard so until someone comes out with something else with similar guarantees, that offer a better rate of return, I will keep rolling my allocation to GICs over as they come due.

I believe that at some point in a person's life, as they age and if they are fortuneate enough, they transition from a person needing to make more money into a person who needs to ensure they don't lose what they have. I believe I have reached that point. Since one cannot be sure that inflation will not render this allocation almost worthless (in other words one can still lose it) I also diversify my portfolio in other investments that have had a much better experience in keeping up with inflation. I recommend everyone do this, to some degree, unless you feel you are in about the last 5 years of your life.


----------



## Ukrainiandude

Under pressure from Erdogan, the central bank cut key interest rates from 19 to 15 percent in September, driving a free-fall in the lira.

people in Turkey are protesting. What am I missing here? Turkish economy more developed compared to Canada. Are we going to have double digits interest rates next year? I hope so.


----------



## m3s

If interest rates go up here the RE market will bleed. Unlike Turkey we need to keep people paper rich and passive

Fed seem to indicate they won't raise rates. People don't protest the money printer. People like the money printer

Don't worry it's transitory. You'll be paper rich


----------



## Ukrainiandude

m3s said:


> You'll be paper rich


 Going to the store with a bag full of cash to buy a loaf of bread 🥖 
Thanks BofC you are the best


----------



## MrMatt

m3s said:


> If interest rates go up here the RE market will bleed. Unlike Turkey we need to keep people paper rich and passive
> 
> Fed seem to indicate they won't raise rates. People don't protest the money printer. People like the money printer
> 
> Don't worry it's transitory. You'll be paper rich


That's the thing, most people don't understand why high inflation is bad, or even really realize it.
I've recently heard lots of complaints about inflation, but indirectly about how expensive "things are", they're talking about it in the aisles of stores.

But people notice a 10% increase in price way less than a 10% drop in property values.


----------



## KaeJS

MrMatt said:


> But people notice a 10% increase in price way less than a 10% drop in property values.


That's because a property is a leveraged asset with a higher starting dollar amount than a loaf of bread.


----------



## m3s

KaeJS said:


> That's because a property is a leveraged asset with a higher starting dollar amount than a loaf of bread.


Funny thing about bread and inflation. I got into the sourdough craze during the early pandemic. It was mostly a waste of time but now I buy sourdough

Well the sourdough boules I buy are suddenly like half the size for the same price. Like not even subtle at all. Same thing all through the store could be worse here than Canada

Stores have an excuse now to raise prices or reduce quantity and people have accepted it. Several people at work cashed out their RE and ran for the hills


----------



## GL from QC

m3s said:


> Well the sourdough boules I buy are suddenly like half the size for the same price. Like not even subtle at all. Same thing all through the store could be worse here than Canada


Shrinkflation.  Legend has it that way back in the 1950s, Twinkies were way bigger than they are now. I wonder what other stuff will get shrunk to ridiculous levels over the next few decades...


----------



## nathan79

GL from QC said:


> Shrinkflation.  Legend has it that way back in the 1950s, Twinkies were way bigger than they are now. I wonder what other stuff will get shrunk to ridiculous levels over the next few decades...


Chocolate bars in the 1980's 65 grams... today 45 grams. Same with chip bags. The price has easily doubled or tripled, too.


----------



## peterk

You'd think "shrinkflation" would have shrunk away our stuff to nothing at all by now though. Jeez I remember shrinkflation being talked about by my parents 20 years ago. How much more shrinking could happen? The product still exists, at least!

This week at the grocery store I tried to be as objective and unbiased as I could when looking at prices of the things I usually, or unusually buy. It was all just by memory of course so not perfect... But I think in the end I concluded that I didn't seen any noticeable inflation from ~2 year ago. Everything still had the same prices or sale prices that I used to pay, if I focused on groceries as a whole. I _think _milk and butter have gone up a bit, but everything else seemed normal, including produce and meat.

It's really hard to judge just what "grocery prices" even means exactly...like the sale price? 50% of the things in the store are "on sale" this week or that and it rotates around. You try and buy sale items, or almost everyone does, to some extent, which varies based on need/budget/desire.

I think my vast grocery bill increase can entirely be attributed to lifestyle changes due to the coronavirus upheavals.


----------



## m3s

peterk said:


> It's really hard to judge just what "grocery prices" even means exactly...like the sale price? 50% of the things in the store are "on sale" this week or that and it rotates around. You try and buy sale items, or almost everyone does, to some extent, which varies based on need/budget/desire.


I'm pretty good at math until an american grocery store has 50 options all with various sales schemes, all the trendy buzz words, and all different quantities of course. I think the american grocery store is the epitome of marketing and manipulation. The bread one was easy because it's the only one from the bakery

Groceries are something I don't even think about the price that much because I'd rather just eat well. My grocery bill stays very consistent but changes drastically by region. Like annual grocery spending went up significantly in the US. Even across the US and Canada is varies more by location. Tourist and isolated areas cost more.

Canada has very cheap electricity and things like milk and butter I think are even controlled. Here in the US at least inflation is very blatant everywhere now. There are letters and signs everywhere announcing price increase and it's accepted now so why not raise your rates

Consumer prices aren't good indicators for inflation anyways. Businesses have profit margins and can set prices based on what the consumer is willing pay. A landlord can't just raise rent on existing tenants so you have to look at rent on new tenants. No one is going to lower prices later so it trickles into everything


----------



## sags

I laugh in the face of 4% inflation angst from baby boomers.


----------



## sags

People complain about 4% inflation while their homes went up 30% last year or went up 10X since they bought it in 1980.

We paid $78.000 for a home in 1980. Today it would sell for $800,000 or more.

Fellow baby boomers like Garth Turner should give it a rest already.

I feel badly for our son's generation who work their butts off and can't afford a home, but boomers......get real.


----------



## m3s

sags said:


> People complain about 4% inflation while their homes went up 30% last year or went up 10X since they bought it in 1980.
> 
> We paid $78.000 for a home in 1980. Today it would sell for $800,000.


Yes sags

The people complaining didn't get to buy a house for $78000 in 1980 because they weren't born yet

Boomers are clueless


----------



## sags

Yes, even at 21% interest rates a home was affordable for an average couple.

So we signed a 5 year term and watched our pennies for the first term. In future renewals, interest rates fell, we owed less, and payments went down.

Today.....home prices rose faster than they could save the down payment, and even with record low interest rates people can't qualify to buy a home.

If I was the housing czar of Canada.......I would fix this.


----------



## Ukrainiandude

*Fed Chairman Jerome Powell warns Congress that inflation may keep rising next year*








Fed Chairman Jerome Powell warns Congress that inflation may keep rising next year

unemployment seems to normalize around 4% same as it was in early 2000 when interest rate was around 3-4% to fight the inflation.
Perhaps it’s time for FED to do what it supposed to do? Control the inflation, before we need a bag of cash to buy a loaf of bread 🥖.
Raise the rate slowly 0.5%-1% per month.


----------



## m3s

Raising rates would crash everything else. Rock and hard place

How about a monetary system based on hard coded mathematics instead of the whims and conjecture of senile dinosaurs

Leaving the gold standard for fractional reserve banking was beneficial in the short term

Cocaine is fun until you can't stop


----------



## Ukrainiandude

m3s said:


> Raising rates would crash everything else.


It will crush down inflation. Other matters should not be important for central bank at this point. 4% unemployment is a bottom. People are not gonna flip burgers for $12 if they can make more, by selling covered calls in the bull market. That’s something that the fed can fix.


----------



## m3s

Ukrainiandude said:


> That’s something that the fed can fix.


You mean caused

They claimed inflation was transitory and now you think they know how to fix it. They are reacting to fires not preventing them

They cause bigger problems than they fix. Certainly for young people.


----------



## MrMatt

Ukrainiandude said:


> It will crush down inflation. Other matters should not be important for central bank at this point. 4% unemployment is a bottom. People are not gonna flip burgers for $12 if they can make more, by selling covered calls in the bull market. That’s something that the fed can fix.


Things need to be kept in balance. They could triple rates tomorrow and that would crush inflation, but it would also slam the breaks on the economy causing more harm. It needs to be done in a gentle way.
Unfortunately we've built a house of cards on the expectation low rates will continue for some time, so it's gonna be tough.


----------



## Ukrainiandude

MrMatt said:


> It needs to be done in a gentle way.


Yeah, as I said slowly 0.5%-1% per month. No need to jack it up overnight.


----------



## sags

Higher interest rates won't solve the supply issues.


----------



## m3s

MrMatt said:


> Unfortunately we've built a house of cards on the expectation low rates will continue for some time, so it's gonna be tough.


It's easy for the big money to sell off and apply pressure as soon as JPow even thinks out loud about it. Then he is forced to think about it longer

Big money wants low rates. This is why money needs to be based on math and markets not human decisions that can be easily manipulated

Fed chair hinting at what they will do shouldn't be the single most important factor in the markets but it's been that way for a decade


----------



## sags

Actually, Jeremy Powell isn't "the Fed". He is chairman and the pubic face of the fed, but he doesn't make all the decisions alone.

The Fed also does a lot more than "print money".

Crypto fans will appreciate this part......

*The Decentralized System Structure and Its Philosophy*

In establishing the Federal Reserve System, the United States was divided geographically into 12 Districts, each with a separately incorporated Reserve Bank. District boundaries were based on prevailing trade regions that existed in 1913 and related economic considerations, so they do not necessarily coincide with state lines.

Federal Reserve Board - Structure of the Federal Reserve System


----------



## MrMatt

Ukrainiandude said:


> Yeah, as I said slowly 0.5%-1% per month. No need to jack it up overnight.


0.5% / month for a few months would be insanely fast, and would be very tough. This is far more frequent than they normally meet to adjust rates, and it would be incredibly high.


----------



## Ukrainiandude

MrMatt said:


> 0.5% / month for a few months would be insanely fast, and would be very tough. This is far more frequent than they normally meet to adjust rates, and it would be incredibly high.


What were the interest rates last we had this high inflation? 
My income doesn’t grow 5-6% per annum to keep up with inflation. And it is central banks main and the only job to keep inflation in check, not to please the “self made investors”.


----------



## m3s

sags said:


> Actually, Jeremy Powell isn't "the Fed". He is chairman and the pubic face of the fed, but he doesn't make all the decisions alone.


Ok?

The terms "Don't fight the Fed" and "Taper Tantrum" allude to the importance of the Fed's public announcements. Whether JPow makes the decisions or not is irrelevant. The Fed's public announcements impact the markets. Even when they say that inflation is transitory and (almost) everyone knows its complete BS.

Inflation is bad for GICs.


----------



## MrMatt

Ukrainiandude said:


> What were the interest rates last we had this high inflation?
> My income doesn’t grow 5-6% per annum to keep up with inflation. And it is central banks main and the only job to keep inflation in check, not to please the “self made investors”.


That's not the only job.








Mandate and planning framework


The Bank of Canada is the nation’s central bank. Its mandate, as defined in the Bank of Canada Act, is “to promote the economic and financial welfare of Canada.” The Bank’s vision is to be a leading central bank—dynamic, engaged and trusted—committed to a better Canada.




www.bankofcanada.ca





Inflation is a key role of monetary policy, but it can't be pursued single mindedly without disasterous effects.

Plus government policy is the direct cause of inflation. 
You can't simply go give a massive handout and not have an impact on inflation. 

If they are too aggressive on the inflation target it will destabilize the financial system, which is also really bad.
IMO a lot of bad policy for years has led to the point where we've only got bad options, and they need to navigate between them.


----------



## sags

Inflation is too much money in circulation, relative to the goods and services being produced. It creates higher prices due to supply and demand issues.

As is happening now, too much money is chasing too few goods, due to supply chain constraints.

Case in point.....new and used vehicles are going up in price because there is more demand than supply due to chip shortages.

The solution to inflation isn't higher interest rates. The solution is higher taxation to withdraw money out of circulation.

Politicians are loathe to raise taxes as it is not a popular thing to do. So, they don't offset any increase in spending and simply create debt.

Inflation is a tax. Interest rates are a tax. And taxes are a tax. One way or the other, the counter balance to government spending is tax.

Nobody wants to pay higher taxes to offset spending, but everybody wants the government benefits that benefit them to continue or increase.

They want to "cut" the other guy's benefits, but not the ones they collect.


----------



## m3s

sags said:


> Inflation is a tax. Interest rates are a tax. And taxes are a tax. One way or the other, the balance to government spending is tax.
> 
> Nobody wants to pay higher taxes to offset spending, but everybody wants the government benefits that benefit them.
> 
> They want to "cut" the other guy's benefits, but not the ones they collect.
> 
> The politicians accommodate them and get re-elected by increasing the debt.


Yes it's a stealth tax.

The people who don't understand it are like frogs in a pot. They would protest tax increases or handouts for the rich but they don't mind inflation that achieves the same result

The people who do understand it profit from it. Just take out debt (devalued, free in real terms) and invest in appreciating hard assets. Then get taxes back on the interest

This is an investor's dream. Until the pitchforks hit the streets


----------



## m3s

sags said:


> Crypto fans will appreciate this part......


The Fed is trolling us all

They print money to validate crypto while telling everyone it's bad mmmkay

Maybe Satoshi Nakamoto is a Fed insider


----------



## sags

I think Satoshi is the US government, but that is another topic.


----------



## m3s

sags said:


> I think Satoshi is the US government, but that is another topic.


Put on a financial mismanagement puppet show for the world to enjoy

Hodl the keys to Satoshi's million BTC while publicly stating crypto is bad mmkay. Issue a monetary policy that validates BTC's value proposition while MSM convinces the masses crypto is bad mmmkay. US elite buy it up for themselves while telling the world crypto is bad mmmkay. Don't you worry about those panama papers crypto is bad mmkay

Are they that smart though? US gov invented crypto. Crypto innovation is led by US institutions


----------



## Ukrainiandude

MrMatt said:


> That's not the only job.


The Bank has four core functions:


Monetary policy: The Bank’s monetary policy framework aims to *keep inflation low*, stable and predictable.
Financial system: The Bank promotes safe, *sound* and efficient financial systems within Canada and internationally.
Currency: The Bank designs, issues and distributes Canada’s bank notes.
Funds management: The Bank acts as fiscal agent for the Government of Canada, managing its public debt programs and foreign exchange reserves.
yet for some reason the inflation listed on the top


----------



## MrMatt

Ukrainiandude said:


> The Bank has four core functions:
> 
> yet for some reason the inflation listed on the top


I know, and that's why i posted the link you just quoted.

Inflation is a major responsibility, but not the only one.


----------



## Ukrainiandude

MrMatt said:


> I know, and that's why i posted the link you just quoted.
> 
> Inflation is a major responsibility, but not the only one.


Why bank of Canada ignores its major responsibility? 
because I remember I called BofC when the loonie was dropping to 60 cents and ask when and how they going to interfere. The response was that they look at and target the inflation, but not the exchange rates. Perhaps now is the time.


----------



## james4beach

There's a new episode of the Rational Reminder podcast which people may find interesting:

Are Inflation Concerns Inflated?


----------



## peterk

m3s said:


> Yes it's a stealth tax.
> 
> The people who don't understand it are like frogs in a pot. They would protest tax increases or handouts for the rich but they don't mind inflation that achieves the same result
> 
> The people who do understand it profit from it. Just take out debt (devalued, free in real terms) and invest in appreciating hard assets. Then get taxes back on the interest
> 
> This is an investor's dream. Until the pitchforks hit the streets


The trick is that a majority of regular working people gradually and accidentally turn into "investors" through home ownership, salary (below real) inflation,and maybe a bit of stock investing (far less common than real estate ownership) and that one's perception of nominal asset gain continuously outpaces one's perception of inflated dollars.

Then you end up with a country of 40+ year olds who continuously feel more and more rich even though they have the same house and the same job. Their nominal dollars figure in their head for what "a lot of money is" is always stuck a decade or two ago as a benchmark, and it can't keep up pace.

Then, even though the regular person has spent a lifetime being robbed by inflation, they feel like it worked out great for them in the end and that it must be a pretty OK system. Best to not rock the boat.


----------



## m3s

peterk said:


> Best to not rock the boat.


Yes

This is an ingenious way to pacify the masses into thinking they are rich when in reality they are losing purchasing power.

If the masses ever got as half as engaged in economics as they do other issues we're in for civil unrest


----------



## peterk

^ Well in that case they'll just go ahead and politically neuter an entire generation by convincing everyone that they're either brain dead snowflake communists looking to destroy capitalism, or dangerous alt-right white supremacists looking for violence.

And if that doesn't work, they'll toss a war at us, or another pandemic and economic depression.

I am skeptical that the crypto world is working towards some path forward that will aid in circumventing the current control system, as I think you crypto guys are hoping it will? But who knows, maybe. I hope you're right


----------



## m3s

Crypto is just money based on math @peterk If you are an engineer with an interest in economics you could get it but you have to look beyond MSM

Some people who can't contribute or engage in the mathematical side tweet fluff about ideologies and politics. You have to dig below this surface. People will gravitate to the networks with the values they share such as self-custody property, self-sovereign identity, open source transparency, verifiable credentials, censorship resistance etc

We used to have the feudal system and now we have nation states. The world has always changed yet people think it won't change again hah. We're due for some change


----------



## m3s

peterk said:


> ^ Well in that case they'll just go ahead and politically neuter an entire generation by convincing everyone that they're either brain dead snowflake communists looking to destroy capitalism, or dangerous alt-right white supremacists looking for violence.


This is what military psychological operations do

Unfortunately China and Russia learned how to do it as well. Living in the US I can see how much more they are targeted than we are in Canada

In the US everyone is either on one side or the other


----------



## gardner

Today, the BOC says "Inflation? Yes, but only for a few months."









Bank of Canada maintains policy rate and forward guidance


The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent.




www.bankofcanada.ca







> The Bank continues to expect CPI inflation to remain elevated in the first half of 2022 and ease back towards 2 percent in the second half of the year.


----------



## londoncalling

m3s said:


> In the US everyone is either on one side or the other


This is the US approach to almost every issue, topic and discussion. The polarizing effect is starting to manifest here in Canada as well.


----------



## m3s

londoncalling said:


> This is the US approach to almost every issue, topic and discussion. The polarizing effect is starting to manifest here in Canada as well.


Too many Canadian boomers watching US MSM. Just look at the threads here might as well be the US money forum


----------



## Ukrainiandude

gardner said:


> Today, the BOC says "Inflation? Yes, but only for a few months."
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Bank of Canada maintains policy rate and forward guidance
> 
> 
> The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent.
> 
> 
> 
> 
> www.bankofcanada.ca


Is this even legit to rob people with 5% inflation and pay 1% on deposits?


----------



## james4beach

Ukrainiandude said:


> Is this even legit to rob people with 5% inflation and pay 1% on deposits?


Sell your CAD and buy a better currency.


----------



## Ukrainiandude

james4beach said:


> Sell your CAD and buy a better currency.


CAD version of 80s would do. Inflation was high but so were the interest rates on deposits.


----------



## nathan79

Should actually be a crime to pay so little. I think the minimum legal interest rate should be set by CPI. Of course that would increase mortgage rates as well, which would bring some welcome cooling to the market.


----------



## james4beach

nathan79 said:


> Should actually be a crime to pay so little. I think the minimum legal interest rate should be set by CPI. Of course that would increase mortgage rates as well, which would bring some welcome cooling to the market.


I would love to see higher rates. It certainly would extinguish the real estate lunacy and finally make homes affordable.

But sadly, I doubt the Bank of Canada will be able to raise much. The economy will crash and homeowners will start whining. The general population will say that homes are unaffordable because interest payments are so high (remember that most people think of "affordability" in terms of their *monthly payments*).

On top of that, rich people (the only group who really matter of course) will whine that asset prices are plummeting, and endlessly lobby the government, and then ultimately put in politicians who are committed to lowering interest rates.

So unfortunately I don't think there's any political will or even public desire for higher interest rates. Just about everyone is totally addicted to low interest rates. Rich people, poor people, real estate people, stock people... everyone loves zero interest rates!


----------



## MrBlackhill

james4beach said:


> Rich people, poor people, real estate people, stock people... everyone loves zero interest rates!


Not the poor though. And not those who don't/can't take any risk and only buy GICs & such.


----------



## james4beach

MrBlackhill said:


> Not the poor though. And not those who don't/can't take any risk and only buy GICs & such.


I think the poor like low interest rates because it makes loans affordable. Houses become more affordable (in their view) with 1% mortgages, and there are countless other types of loans which are all reasonably cheap. This makes it easier for poor people to buy cars, furniture, electronics, and keep their credit cards going by taking out lines of credit and doing balance transfers.


----------



## MrBlackhill

james4beach said:


> I think the poor like low interest rates because it makes loans affordable. Houses become more affordable (in their view) with 1% mortgages, and there are countless other types of loans which are all reasonably cheap. This makes it easier for poor people to buy cars, furniture, electronics, and keep their credit cards going by taking out lines of credit and doing balance transfers.


The poor has to save for a long time in order to buy something. But they get no return on their savings. Meanwhile, inflation runs high and their income doesn't increase as fast.

How can they even dream of owning a house if they can't even afford the downpayment and it takes forever to get that downpayment because they earn no interests on their savings, their rent keeps increasing, house prices keep increasing, etc? It would be better for them if rates were high, so inflation would be lower, their savings would earn some interests, house prices would drop, their rent wouldn't fly high.

The poor don't finance a car, because they buy a used car and they have to save the few thousands required to buy that used car. And they earn barely no interests while saving those few thousands.

Same for furniture, they buy used from their savings.

They could sure take some small line of credit with the cheap rates, they could buy stuff with those financing options paid weekly but they can't afford to take too much credit as they would become highly at risk if rates increases or if they lose their job while having barely no emergency fund to cover. And if they managed to have an emergency fund, again, it's earning barely no interests.


----------



## MrBlackhill

Inflation in the US rose 6.8% in November, year on year. Highest since 1982.


----------



## OptsyEagle

MrBlackhill said:


> Inflation in the US rose 6.8% in November, year on year. Highest since 1982.


and what do investors do...aggressively buy stocks.

Is that really the right move when stock prices will eventually become a function of the profit they earn and profits are the difference between what a company spends compared to the revenue the company receives and inflation will almost always increase what they spend but does not as easily work into the revenue they receive?


----------



## londoncalling

The Top 1% Officially Have More Money Than the Middle Class Combined (businessinsider.com)

I realize this link is from October but the harsh reality remains that those that have the greatest wealth seem to gain in good time and in bad. Periods of high inflation will not be any different as the ultra rich are able to move capital more easily than the middle class especially those with the bulk of their net worth tied up in individual properties. There are so many fascinating things happening in the economy right now. Some will gain substantially as a result. Unfortunately, this gain has to come from others losses.

Added: Inflation is great for diminishing existing debt especially if interest rates stay low. With the majority of the population carrying a lot of private debt this could be a good thing for the overall economy. It has already been established that holding cash(even GICs,) in an inflationary environment erodes capital. Will inflation fuel the stock markets to go even higher?


----------



## Ukrainiandude

*We'll all be paying a lot more for food next year, says Canada's Food Price Report*
*2022 expected to see the biggest annual increase in food bills on record, new report says
The Canadian Dairy Commission warned as much in a report last month, saying retail milk prices are set to rise by 8.4 per cent next year


https://www.cbc.ca/news/business/food-price-report-charlebois-1.6277590


*


----------



## Ukrainiandude

Meanwhile the BofC persistently keeps its rates under 1% despite the employment be back to historical normal. In 2003-04 when inflation was at lower rate the key interest rate was around 3-4% 
why do we need bank of Canada?


----------



## nathan79

This is getting ridiculous. What should I do with my down payment money? The stock market seems risky, but also can't risk it dwindling any more due to inflation. It's several hundred thousand dollars.


----------



## Ukrainiandude

CAD going into drains. Thanks BofC for good job. 
Why $1000 bill isn’t around yet?


----------



## sags

That is why people earn more dollars today. In 1970 the minimum wage in Ontario was $1.50 per hour. Today it is $15.00 an hour.

Inflation is built into the economic system. Governments have a natural inflation rate of around 5% to accommodate servicing a growing population.


----------



## londoncalling

At least we got rid of the penny. That helps even things out! 🤪


----------



## MrBlackhill

sags said:


> In 1970 the minimum wage in Ontario was $1.50 per hour. Today it is $15.00 an hour.


Now adjust this for inflation.










And anyways the minimum wage is barely just adjusted for inflation, meanwhile people with higher income make way more money and the wealth gap increases.

Some reading:








1. Trends in income and wealth inequality


Barely 10 years past the end of the Great Recession in 2009, the U.S. economy is doing well on several fronts. The labor market is on a job-creating




www.pewresearch.org


----------



## sags

Take from the rich and give to the poor !

We can have a national parade every year to thank them.


----------



## Ukrainiandude

BofC will only increase rate if FED does. “Independent“ central bank.
*American shoppers, especially those on low incomes have felt the pinch of higher prices, with annual inflation at rates not seen for 40 years.*
The latest figures show prices rose 6.8% in the year to November.








US inflation hits highest level for nearly 40 years


Prices rose 6.8% in the year to November with the cost of fuel, used cars and food rising fastest.



www.bbc.com


----------



## Ukrainiandude

james4beach said:


> But sadly, I doubt the Bank of Canada will be able to raise much.





james4beach said:


> So unfortunately I don't think there's any political will or even public desire for higher interest rates.


Is not BofC supposed to be independent organization?


----------



## doctrine

BoC is at least 1 quarter ahead of the US Fed, if not more. We already stopped the bond buying program, which is the US is still tapering. Very likely to see an increase in Feb here.


----------



## Ukrainiandude

__





Historical Rates | Tangerine


See where Tangerine rates have been over the years. Get historical rates of the Tangerine Savings Accounts, Guaranteed Investment Accounts, Tax-Free Savings Accounts, RSP Savings Accounts, Chequing Account, Mortgages, US$ Savings Accounts, Buying/Selling Rates, and the Tangerine Prime Rate.




www.tangerine.ca




Historical rates
Savings Accounts

May 18, 2000 5.00%


----------



## Ukrainiandude

2021 inflation 5% and GIC is 2% 
any one is feeling robbed ?


----------



## KaeJS

I feel robbed everyday.
Canada is ded.

You have two options:

1. Do what you're doing and fall behind.
2. Do more and lose out on leisure and stay where you are.

The days of getting ahead are gone.

It's only going to get much worse. Just wait.
I hate to see what things look like 5 years out.


----------



## damian13ster

Inflation is a tax on the poor. 
It is crazy how Bank of Canada and government doesn't react. I guess they only care about the rich.
When it comes to the market - there is really no other place to put your money right now.
You can't put it in bonds, a lot of people are priced out of real estate. Some companies have pricing power to thrive in this environment so they are only plausible investment at this point.


----------



## OptsyEagle

Inflation is a tax on everyone, however, like most things that cost money, it just affects the poor more.

The bottom line is that all this deficit spending financed with money printing may have felt like free money but it was not. We are just getting the bill now and as many of us should know, it is going to be a very big bill with a very long payment plan...and we are all going to pay it.

Budgets need to be balanced. There is no free lunch.


----------



## MrBlackhill

This is interesting:




__





M2 Money Supply Growth vs. Inflation - 154 Year Chart | Longtermtrends


The M2 Money Supply is a measure for the amount of currency in circulation. This chart plots the yearly M2 Growth Rate and the Inflation Rate.




www.longtermtrends.net





The recent increase of the M2 money supply has been the biggest increase in history.

Good news though, back in the 1970s, the increase in M2 money supply was near 15% for multiple years, whereas in 2020 that sharpe increase lasted no more than 1 year.

M2 money supply increase tends to correlate with inflation rate. Though since the 2000s we've had increases in M2 money supply while keeping inflation rate low.

We will likely have very high inflation in 2022, but it may not last and drop in 2023. Though my concern is that it may drop as the policy rate increases and the stock market crashes hard.

If you look at the other graphs provided further down, you'll notice it's one of the first time that the increase in M2 money supply is much faster than the increase in GDP. Which leads to a very low velocity of M2, as low as back in the 1930s. But in the 1930s we've had the biggest crash ever and deflation.


----------



## MrBlackhill

Oh, and bonds are good mostly in very low inflation environments.










If you want to know where to put your money, choose the right equity sector:








Myth-Busting: Equities Are an Inflation Hedge


How can investors hedge against inflation risk? Do equities offer any protection?




blogs.cfainstitute.org


----------



## sags

Ukrainiandude said:


> 2021 inflation 5% and GIC is 2%
> any one is feeling robbed ?
> View attachment 22463


Nope........we are happy to collect 2% on our GICs plus the 2.7% cost of living increases on our pensions.

We manage our own inflation quite easily.


----------



## sags

Inflation is global and has nothing to do with so called "money printing" in Canada. It is caused by the pandemic and disrupted supply chains.

The price of lumber and oil have already come down. The ships in harbor are stretching further out to sea at the docking ports.

Inflation is temporary but the cost of living increases stay forever. It is basic supply and demand economics at play.

Constrained supply.......unreduced demand........equals higher prices.

This too shall pass.









Big business bosses are warning that supply chain issues and inflation are here to stay


Top executives at multiple European blue-chip companies have told CNBC that supply chain problems, labor shortages and inflationary pressures have longer to run.




www.cnbc.com


----------



## OptsyEagle

Constrained supply...due to ...unprecedented demand.. due to .... too much money trying to buy more stuff then our infrastructure can supply......equals higher prices.


----------



## damian13ster

Even federal banks no longer pretend inflation is transitory.
It is policy induced inflation.


----------



## londoncalling

sags said:


> Inflation is global and has nothing to do with so called "money printing" in Canada. It is caused by the pandemic and disrupted supply chains.
> 
> The price of lumber and oil have already come down. The ships in harbor are stretching further out to sea at the docking ports.
> 
> Inflation is temporary but the cost of living increases stay forever. It is basic supply and demand economics at play.
> 
> Constrained supply.......unreduced demand........equals higher prices.
> 
> This too shall pass.
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Big business bosses are warning that supply chain issues and inflation are here to stay
> 
> 
> Top executives at multiple European blue-chip companies have told CNBC that supply chain problems, labor shortages and inflationary pressures have longer to run.
> 
> 
> 
> 
> www.cnbc.com


Not everyone has a COLA with their pension. I am fortunate to have a great pension but it does not have a guaranteed COLA. The board of trustees have been mindful to provide an increase to all plan participants but that has not always been the case. Many others do not have a DB plan or any pension at all. 

I don't believe the money printing referred to above was specific to Canada. I find it odd that most are surprised or upset about the current inflation situation. Even though I don't like it, most understand that the tab needs to be paid for all the money that has been put into circulation. What's even more concerning is the possibility of stagflation.


----------



## m3s

If only there was a unit of account tied to a store of value with a fixed supply and a hard coded mathematical equation for issuance.

Then we wouldn't need to worry about what monopoly money the central bankers were printing themselves


----------



## KaeJS

For those who don't already know...

We're all f(u)cked.

It doesn't get better.
And no, this shall not pass.


----------



## sags

Someday this will all be yours.


----------



## KaeJS

You will own nothing, and you will be happy.


sags said:


> Someday this will all be yours.


You will own nothing, and you will be happy.


----------



## sags

londoncalling said:


> Not everyone has a COLA with their pension. I am fortunate to have a great pension but it does not have a guaranteed COLA. The board of trustees have been mindful to provide an increase to all plan participants but that has not always been the case. Many others do not have a DB plan or any pension at all.
> 
> I don't believe the money printing referred to above was specific to Canada. I find it odd that most are surprised or upset about the current inflation situation. Even though I don't like it, most understand that the tab needs to be paid for all the money that has been put into circulation. What's even more concerning is the possibility of stagflation.


The "tab" has to be serviced but will never be paid in full.......nor does it need to be. Governments use debt to build things for a better future.


----------



## sags

KaeJS said:


> You will own nothing, and you will be happy.
> 
> 
> You will own nothing, and you will be happy.


Someday we will all own nothing........dust to dust.


----------



## KaeJS

sags said:


> Someday we will all own nothing........dust to dust.


And this is why I drink.


----------



## m3s

Imagine increasing the limits on your maxed out credit cards by signing away your grandkids future








Damn boomers. It's not even Ok anymore


----------



## sags

Canada is a huge country with a bounty of natural resources, the value of which is infinite.

To complain about a piddling small amount of national debt, is to dwell too much on a non-issue.

Ask yourself.........what is the worst that could happen ?


----------



## KaeJS

m3s said:


> Imagine increasing the limits on your maxed out credit cards by signing away your grandkids future
> 
> 
> 
> 
> 
> 
> 
> 
> Damn boomers. It's not even Ok anymore


You speak as though the grandkids have a future.

You feeling okay?


----------



## KaeJS

sags said:


> Ask yourself.........what is the worse that could happen ?


Where should I start?


----------



## Ukrainiandude




----------



## Ukrainiandude

Reported inflation is understated. Owners’ Equivalent Rent (OER) relies on owner surveys to estimate inflation in housing costs. This is an extremely imprecise metric. The single family rental market provides more accurate data. OER in today’s reported core CPI was 3.5% YoY.

The largest owners of nationwide single family rentals are reporting 17% YoY rent increases. OER is 30% of the Core CPI calculation and 24% of reported CPI. Using the more empirical measure in the calculation increases today’s Core CPI from 4.9% to 9.0% and CPI from 6.8% to 10.1%

Housing inflation is unlikely to abate based on supply and demand trends. The inflation that households are actually experiencing is raging and well in excess of reported gov’t statistics.”


Bill Ackman, Twitter


----------



## damian13ster

sags said:


> The "tab" has to be serviced but will never be paid in full.......nor does it need to be. Governments use debt to build things for a better future.


As per Nanos for November 2021
Only 11% of Canadians believe future generations will have higher standard of living
63% responded the standard of living will be lower.

Government is used historically high debt in a way that destroys Canadians' hopes


----------



## nathan79

sags said:


> *Ask yourself.........what is the worst that could happen ?*


No thanks!

I made the mistake of thinking it couldn't get much worse five years ago, and it's done nothing but get worse ever since -- at least in terms of housing and general affordability.

I'm confident that standard of living will continue to decrease for the working class. On the other hand, we will own nothing and we will be happy, so I'm sure our "qualify of life" will be at an all-time high. 

High income earners may see their standard of living continue to increase as they build more equity in their real estate holdings. The wealthy will continue to make out like bandits, naturally.

I'm not trying to be a downer, but this just seems like the most realistic outcome.


----------



## Ukrainiandude

all thanks to insane money printing and lowest in the decade interest rates. 
*Food is more expensive than it has been in decades
McDonald's (MCD) said in October that it expects menu prices to be about 6% higher this year compared to last.








Food is more expensive than it has been in decades


Bad news for American consumers: It's getting more expensive to dine out, and it's getting more expensive to eat at home.




us.cnn.com




*
some comments (not mine) for the article.
"consumers have accepted the price hikes" it's literally FOOD, what are we supposed to do STARVE??
I work in a very large grocery chain in Canada as the guy who adjusts price labeling in stores.

For the last few months, nearly every week I get up to several hundred new price labels where the cost of the item rises anywhere between 5~25%. It's getting insane.


----------



## Ukrainiandude

Real world food inflation is around 10% or more.


----------



## KaeJS

Yep. No surprise there.


----------



## Ukrainiandude

KaeJS said:


> Yep. No surprise there.


BofC is living in their own pink bubble, where inflation is 2-4%


----------



## Ukrainiandude

james4beach said:


> Sell your CAD and buy a better currency.


----------



## OneSeat

Why have we started putting the dependent variable on the Y axis - I keep seeing it more and more.
Not as important as the main subject though


----------



## nathan79

So... people call crypto a "scam", but central banks printing unlimited money, causing rampant inflation and increasing house prices by 30%, while your savings earn less than 1% interest is supposed to be legitimate monetary policy? I guess if you're the scammer who is pocketing the benefits.  

Gotta wonder how many of these BoC policymakers own significant real estate & stock portfolios. They wouldn't want to hurt their investments, after all. They can make up any B.S. statement (ie, "there's still slack in the economy") to justify their insane policies. I can only assume that anyone who supports this scam is massively benefiting from it. The rest of us don't have a choice in the matter. At least with crypto you can choose whether or not to participate.


----------



## nathan79

BoC governor Tiff Macklem... what a scumbag, you can't make this **** up...



> The governor of the Bank of Canada, who recently gave a speech lauding the importance of child care to the economic recovery from COVID-19, campaigned against having a daycare across the street from a $2.5 million home he and his wife owned in Toronto.
> ...
> The governor and his wife sold their home in July 2020, property records show, shortly before an interim approval of the daycare was granted.




Gee, I wonder what his priorities really are? 

*








BoC governor Tiff Macklem objected to daycare in his neighbourhood as not keeping with its 'heritage nature'


Macklem, who was a private citizen at the time, wrote that dropping off and picking up children would 'create serious traffic problems'




nationalpost.com




*


----------



## m3s

james4beach said:


> Sell your CAD and buy a better currency.


Have you heard of crypto currency?


----------



## damian13ster

The limited supply of nothing doesn't create value.
Cryptocurrency is not a cash alternative, it is much more volatile, and much more manipulated.
The entire idea imho is pretty bad. It is also not a hedge since it falls every single time markets do.
It is simply high-risk gambling play with potential huge reward or huge drop in value.


----------



## MrBlackhill




----------



## Eder

If we were using the same CPI used in 1982, the rate would be closer to 15%, which means it’s the worst year in inflation in US history.”


----------



## KaeJS

Everyone is so screwed and they don't even know it.
Except for some of us on the forum and elsewhere, people are in for a huge shock.


----------



## MrBlackhill

Who cares about inflation? Looking at this graph, my prediction of a market crash in 2023 could be postponed to 2024. Maybe just after the end of the next US presidential election, because we certainly wouldn't want to see a market crash during the election campaign.


----------



## MrBlackhill

Four graphs. Find what's wrong.

First graph. The US stock market. At all-time high.









Second graph. The US unemployment rate. Near all-time low.









Third graph. The US inflation. At 40-year high.









And the fourth graph, but not the least: US policy rate. *At all-time low!*









Summary:














__





United States Stock Market Index (US30) - 2022 Data - 1896-2021 Historical


US stocks fell in volatile trading Friday, with the Dow losing more than 500 points, the S&P 500 and Nasdaq lost 1.5% each, as investors digested a slew of economic releases. The Fed's preferred inflation measure, the US core PCE price index, came well above expectations in August, worrying...




tradingeconomics.com








__





United States Unemployment Rate - September 2022 Data - 1948-2021 Historical


The US unemployment rate rose to 3.7 percent in August of 2022, the highest since February and above market expectations of 3.5 percent. The number of unemployed people increased by 344 thousand to 6.014 million, while employment levels went up by 442 thousand to 158.732 million. Meanwhile, the...




tradingeconomics.com








__





United States Inflation Rate - September 2022 Data - 1914-2021 Historical


The annual inflation rate in the US eased for a second straight month to 8.3% in August of 2022, the lowest in 4 months, from 8.5% in July but above market forecasts of 8.1%. The energy index increased 23.8%, below 32.9% in July. Smaller increases were reported for gasoline costs (25.6% vs 44%)...




tradingeconomics.com








__





United States Fed Funds Rate - 2022 Data - 1971-2021 Historical - 2023 Forecast


The Fed raised the federal funds rate by 75 bps to the 3%-3.25% range during its September meeting, the third straight three-quarter point increase and pushing borrowing costs to the highest since 2008. Policymakers also anticipate that ongoing increases in the target range will be appropriate...




tradingeconomics.com


----------



## Ukrainiandude

MrBlackhill said:


> The US stock market. At all-time high.





MrBlackhill said:


> The US unemployment rate. Near all-time low.





MrBlackhill said:


> The US inflation. At 40-year high.





MrBlackhill said:


> US policy rate. *At all-time low*


 I got no idea what the fed trying to stimulate here.


----------



## m3s

Ukrainiandude said:


> I got no idea what the fed trying to stimulate here.


Don't worry the boomers know what they are doing. JPow and JYell got this


----------



## damian13ster

Ukrainiandude said:


> I got no idea what the fed trying to stimulate here.


They basically got themselves into a corner. Too much money printing and now there is really no way to slow down inflation without crashing the economy.


----------



## MrBlackhill

damian13ster said:


> They basically got themselves into a corner. Too much money printing and now there is really no way to slow down inflation without crashing the economy.


They should've started raising rates way earlier, but at a slower pace. Maybe they would've avoided the upcoming crash. But they won't.

Sure, we are just the nobodies on internet and I'm no expert, no economist, but we can see the obvious flaws, confirming that the market is definitely rigged and manipulated. Their actions illustrate their biases.


----------



## m3s

MrBlackhill said:


> They should've started raising rates way earlier, but at a slower pace. Maybe they would've avoided the upcoming crash. But they won't.
> 
> Sure, we are just the nobodies on internet and I'm no expert, no economist, but we can see the obvious flaws, confirming that the market is definitely rigged and manipulated. Their actions illustrate their biases.


Last time they tried to raise rates the market had a "taper tantrum" and they decided to delay instead

That just rewarded the market for throwing a "taper tantrum" so I'd expect the same thing to happen again.

My non-economist gameplan is to watch for "taper tantrum 2.0" The fed have cornered themselves here


----------



## Ukrainiandude

damian13ster said:


> They basically got themselves into a corner. Too much money printing and now there is really no way to slow down inflation without crashing the economy.


Why fed has to worry if some joe was gambling investing with stocks on borrowed money?


----------



## damian13ster

I don't think they are worried about average Joe. Public pensions though? Stability of financial institutions?


----------



## Ukrainiandude

damian13ster said:


> I don't think they are worried about average Joe. Public pensions though? Stability of financial institutions?


Public pensions are diversified and will be fine, there is no lack of financial institutions, and all deposits are insured up to 100k
The longer they wait the more it will fall. Rip off the band aid and be done with it.

Canadian real estate bubble is long overdue. Suspend all immigration until further notice, with pretext of covid fairs. And raise the rates alone with increasing the minimum down payment. Bubble will take care of itself


----------



## damian13ster

That's the thing. They don't want to rip off the band-aid. Same with Canadian real estate. All policies introduced serve to jack up the prices even more. Just so it lasts until next election.

It is a massive game of musical chairs, and no one wants to stop the music, because they don't want to be the ones blamed for repercussions.


----------



## Ukrainiandude

damian13ster said:


> Canadian real estate.


*Canadian home prices expected to rise by 10.5 per cent in 2022: Royal LePage
Royal LePage also anticipates the median price of a single-family detached home in Canada to climb by 11 per cent to $918,000 in 2022, while condominium prices are projected to grow by eight per cent to $594,000.








Canadian home prices expected to rise by 10.5 per cent in 2022: Royal LePage


After a record-breaking year, Canadian home prices are expected to continue rising in 2022, with Toronto, Vancouver and Halifax projected to see the largest increases.




www.ctvnews.ca




*


----------



## sags

Wonder what cost of living increases will be in January.

From the pension funds I researched, it seems to vary between 2.4% to 2.7%.

CPP and government benefits will likely be in the same range.


----------



## OptsyEagle

sags said:


> Wonder what cost of living increases will be in January.
> 
> From the pension funds I researched, it seems to vary between 2.4% to 2.7%.
> 
> CPP and government benefits will likely be in the same range.


For CPP, the YMPE for 2022 went up to 64,900 from 61,600 in 2021. That is an increase of 5.4%. Now before one goes and spends that raise one needs to understand that CPP is calculated against the average of the last 5 years of YPME. So the average 5 years of YMPE between 2022 and 2018 is $59,700 and the average 5 years of YMPE between 2021 and 2017 was $57,780. So that increase makes me think that CPP payments will rise by 3.3% next year.

Since I am not an expert on CPP, I could be wrong.


----------



## Ukrainiandude

The Fed expectedly decided to accelerate its tapering process, and is now set to conclude net purchases already by mid-March vs mid-June with the earlier pace. The dot plot was revised significantly higher, and the plot now shows three hikes for next year, a further three for 2023 and another two for 2024.
The Fed almost caught the market pricing for next year, but longer out, the market is much more sceptical than the Fed on the need for a longer cycle of rate hikes, and the terminal rate being priced in by financial markets is closer to 1.5% vs. 2.5% for the Fed. The market is now pricing that rate hikes could start already in the mid-March 2022 meeting.




















__





Nordea Corporate


Nordea Corporate is the new digital platform that makes financial management faster, simpler and smarter for financial professionals in corporates.




corporate.nordea.com


----------



## MrBlackhill

Listening to the news and... More inflation to come!

4 billion



https://www.cbc.ca/news/politics/federal-government-expands-pandemic-supports-again-1.6295217


----------



## Ukrainiandude

MrBlackhill said:


> Listening to the news and... More inflation to come!
> 
> 4 billion
> 
> 
> 
> https://www.cbc.ca/news/politics/federal-government-expands-pandemic-supports-again-1.6295217


wi Canada be Turkey-2 with double digits inflation? We are almost there


----------



## doctrine

Not to deflate the argument, but $4B is a rounding error in a $2+ trillion annual economy.


----------



## MrBlackhill

True.


----------



## sags

Even less than $4 billion after the government collects all the tax revenues they will get back.


----------



## MrBlackhill

Wow 10% increase on our internet plan.


----------



## Ukrainiandude

Two new provincial laws and new property taxes come into effect today. The property tax increase alone should amount to about $6 a month more for the average homeowner.
https://www.ckom.com/2022/01/01/839169/

it all adds up. Could not thank you BofC more for all the money printing and years of ultra low interest rates that’s making CAD closer and closer to turning into a plastic toilet paper.


----------



## off.by.10

MrBlackhill said:


> Wow 10% increase on our internet plan.


Same here. Although I suspect this is as much a consequence of the CRTC ruling about wholesale prices as it is COVID.


----------



## MrBlackhill

Inflation, Virus, War: What Market Professionals Fear Most for 2022


----------



## sags

It seems the big concern about inflation is more about the response from the Fed than higher prices.

_Respondents often tied the risks of higher inflation to central banks either falling behind the curve, or tightening too quickly. _


----------



## m3s

Maybe sags can understand this explanation. #justinflation is not good news for your GICs


__ https://twitter.com/i/web/status/1477625726048342016


----------



## KaeJS

Pierre is the best.
I wish he was PM.


----------



## sags

Ah I see now.......you get your economics from a guy with a BA in politics, MP at age 25, and the youngest ever MP to secure a DB pension.

With a wave of his hand and stroke of a pen, Pierre will solve global inflation. All that is required is to cut spending on social programs in Canada.

One of the fattest pigs at the trough will solve government spending......LOL.

Alas.........I thought the solution to everything was bitcoins.


----------



## sags

I would like for O'Toole to resign and Pompous Pierre to become leader of the Conservatives though.

That would make a "four-peat" even easier for "Justwin" Trudeau.


----------



## m3s

sags said:


> Alas.........I thought the solution to everything was bitcoins.


No you thought inflation was good news for GICs. You thought a lot of things but bitcoin is not a solution to this government's policy

Bitcoin is just another way to store value. You can also store value in GICs if you believe in deflation like the finance minister


----------



## MrBlackhill

Happy to see that the poor CEOs had a good year in 2020, as opposed to my young 30-year-old cousin who had a 20¢ increase (hourly wage), certainly because she doesn't deserve more, right...









Canada's top CEOs received second-highest pay on record in 2020


The highest-paid 100 CEOs at publicly traded companies earned an average of $10.9 million




financialpost.com


----------



## londoncalling

MrBlackhill said:


> Happy to see that the poor CEOs had a good year in 2020, as opposed to my young 30-year-old cousin who had a 20¢ increase (hourly wage), certainly because she doesn't deserve more, right...
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Canada's top CEOs received second-highest pay on record in 2020
> 
> 
> The highest-paid 100 CEOs at publicly traded companies earned an average of $10.9 million
> 
> 
> 
> 
> financialpost.com


"Macdonald said CEOs often justify their bonuses with claims the bonuses are only paid because they are exceptional at their jobs, but he said half the CEOs who got bonuses in 2020, worked at companies which received government aid like the Canada Emergency Wage Subsidy or only received the bonus because of an adjustment to the bonus formula."

I will acknowledge that navigating the pandemic has been difficult for all leaders, government, business or otherwise but this may be another example of pushing down the middle class and widening the gap between the wealthy and the majority.


----------



## damian13ster

Hmm, I am pretty sure if CEO of McDonalds worked for free and gave all his earnings to workers, they would get less than 8$/YEAR extra.

CEO pay doesn't look right, but it is not a solution to worker salaries


----------



## m3s

damian13ster said:


> Hmm, I am pretty sure if CEO of McDonalds worked for free and gave all his earnings to workers, they would get less than 8$/YEAR extra.
> 
> CEO pay doesn't look right, but it is not a solution to worker salaries


Canada Emergency Wage Subsidy apparently means Canada Emergency CEO Bonus?

Why am I paying for this "I don't have a monetary policy" government. Meanwhile they convince the senior citizens it's all good news for GICs


----------



## damian13ster

Oh, government being idiotic and destroying the economy, hurting middle class is one thing.
CEO pay not being a culprit for employee wages being what they are is another


----------



## londoncalling

Financially, CEO compensation may not significantly move the needle on a company's bottom line but the message it sends to taxpayers, customers, shareholders and employees is that the system is abusive, even *if *it is not. It is no different, when our elected officials implement double digit pay raises and then raise minimum wage a few percent. Our company was able to avoid layoffs because of CEWS. We took the approach that if we let workers go they may not be there when it was time to ramp up. Management agreed to a wage freeze and even indicated they would take a cut in lieu of layoffs of management staff. They felt it was better to make less than have an increased workload during a very tumultuous time.


----------



## damian13ster

No argument there at all.
The problem is when the 'message', 'virtue signaling' is distracting from pursuing actual solutions to actual problems. Let alone when 'solutions' introduced to perceived problems is detrimental and making actual problems worse


----------



## sags

And the Conservative policy was..........?

The correct policy should have been........?

The "actual solutions" were.......?


----------



## Ukrainiandude

Former Nutrien Ltd. CEO Chuck Magro made roughly $16.4 million, setting him up as the 11th highest paid CEO in the country.


----------



## MrMatt

Ukrainiandude said:


> Former Nutrien Ltd. CEO Chuck Magro made roughly $16.4 million, setting him up as the 11th highest paid CEO in the country.


BS.
In 2020 over 65 CEO's in the US made over $25M, Bloomberg - Are you a robot?

I doubt $16.4 even gets you into the top 100.

But yes, I'd expect you'd have to pay quite a bit to get someone with his experience, being CEO of Nutrien is kind of a big deal.
He's also on the board of a number of organizations, I imagine he's an excellent pick for his new position at Corteva.


----------



## coptzr

MrMatt said:


> BS.
> In 2020 over 65 CEO's in the US made over $25M, Bloomberg - Are you a robot?
> 
> I doubt $16.4 even gets you into the top 100.
> 
> But yes, I'd expect you'd have to pay quite a bit to get someone with his experience, being CEO of Nutrien is kind of a big deal.
> He's also on the board of a number of organizations, I imagine he's an excellent pick for his new position at Corteva.


Perhaps he meant 11th in Canada.


----------



## MrMatt

coptzr said:


> Perhaps he meant 11th in Canada.


Then perhaps he should be talking about CEOs of Canadian Companies?
Pulling up some the CEO of a US company really confuses the issue.


----------



## coptzr

MrMatt said:


> Then perhaps he should be talking about CEOs of Canadian Companies?
> Pulling up some the CEO of a US company really confuses the issue.


Wikipedia:
"Nutrien is a Canadian fertilizer company based in Saskatoon, Saskatchewan. It is the largest producer of potash and the third largest producer of nitrogen fertilizer in the world. It has 1,500 retail stores and more than 23,100 employees. Wikipedia
Stock price: NTR (TSE) $89.32 -1.93 (-2.12%)
Jan 5, 4:00 p.m. EST - Disclaimer
CEO: Mayo Schmidt (Apr 2021–)
Headquarters: Saskatoon
Number of employees: 23,100 (2020)
Founded: January 1, 2018"


----------



## doctrine

Little problem in society with paying a baseball player or other professional athlete or entertainer $25M a year, but pay a CEO of a company of large and complex company of global economic and fundamental agricultural importance with tens of thousands of employees $15M, and then it is the evils of capitalism. Sheesh. The developed world should be quite thankful of Nutrien and their CEO who kept fertilizer production going despite economic sanctions on countries like Belarus which forcefully hijacked a plane last year to further enable its corruption. The company went up in value $25B over the last year and will likely have $3-4 billion in net profits. $15M for keeping the course correct seems like not a big deal to me at all.


----------



## MrMatt

coptzr said:


> Wikipedia:
> "Nutrien is a Canadian fertilizer company based in Saskatoon, Saskatchewan. It is the largest producer of potash and the third largest producer of nitrogen fertilizer in the world. It has 1,500 retail stores and more than 23,100 employees. Wikipedia
> Stock price: NTR (TSE) $89.32 -1.93 (-2.12%)
> Jan 5, 4:00 p.m. EST - Disclaimer
> CEO: Mayo Schmidt (Apr 2021–)
> Headquarters: Saskatoon
> Number of employees: 23,100 (2020)
> Founded: January 1, 2018"


Kind of irrelevant isn't it?
Ukraniandude specifically named Chuck Magro, the CEO of Corteva Agriscience.
He didn't mention Mayo Schmidt (who isn't the CEO of Nutrien either)

Looking into it, apparently he was looking at 2020 salaries when Magro was actually the CEO of Nutrien, and was among the higher paid CEOs.

My mistake, I assumed a thread about CEO salaries in Jan 2022 would be focused on 2021 salaries.
This is what happens when people spout older facts which may be hard to find without a usable reference.








Nutrien, Cameco execs remain among the highest paid in Canada


Former Nutrien Ltd. CEO Chuck Magro made roughly $16.4 million, setting him up as the 11th highest paid CEO in the country.




thestarphoenix.com


----------



## MrBlackhill

doctrine said:


> Little problem in society with paying a baseball player or other professional athlete or entertainer $25M a year, but pay a CEO of a company of large and complex company


Because you don't even need a CEO to successfully run a company, but you need baseball players to play baseball. And anyways I don't agree with the salary of athletes either.


----------



## doctrine

MrBlackhill said:


> Because you don't even need a CEO to successfully run a company, but you need baseball players to play baseball. And anyways I don't agree with the salary of athletes either.


There is a long and distinguished list of CEOs whose policies and decisions, or lack thereof, ran companies into the ground, either slowly or quickly. Poor capital allocation is at the top of the list and CEOs have near full control over it. I'm sure the shareholders of Rogers, Blackberry, Nortel, and other stagnating or trashed Canadian giants wish their CEOs did a better job and maybe had a few years of $15M+ salary as a reward.


----------



## MrBlackhill

doctrine said:


> There is a long and distinguished list of CEOs whose policies and decisions, or lack thereof, ran companies into the ground, either slowly or quickly. Poor capital allocation is at the top of the list and CEOs have near full control over it. I'm sure the shareholders of Rogers, Blackberry, Nortel, and other stagnating or trashed Canadian giants wish their CEOs did a better job and maybe had a few years of $15M+ salary as a reward.


The success of a company is not a one-man show, that's why you don't even need a CEO to successfully run a company. And when there's a CEO, since it's not a one-man show, that's why the CEO doesn't deserve a pay of a few million dollars a year.

Prime Minister's salary... less than a million.
Salary of a surgeon saving lives daily... less than a million.

What's so special and unique about a CEO or an athlete justifying multimillions in annual salary?


----------



## doctrine

MrBlackhill said:


> The success of a company is not a one-man show, that's why you don't even need a CEO to successfully run a company. And when there's a CEO, since it's not a one-man show, that's why the CEO doesn't deserve a pay of a few million dollars a year.
> 
> Prime Minister's salary... less than a million.
> Salary of a surgeon saving lives daily... less than a million.
> 
> What's so special and unique about a CEO or an athlete justifying multimillions in annual salary?


Who says they don't deserve? It is literally up to the shareholders to pay the CEO whatever they want. Much like it is up to a professional sports team owners to pay their players whatever they want. I see it as quite deserved. Surgeons are quite talented, yes, and save lives. A major CEO is responsible for tens of thousands of workers and their families on a daily basis. And they have a lot less job security. And, I would bet they work much longer hours too and have a much lower quality of life. 

I'm sure there is an upper bound to reasonableness, but it's not $1M, especially for a $100+ billion dollar company. $100M is probably excessive. $10-20M? Not so much. I've been investing a long time and seen what crappy CEOs can do to a business. I'd rather pay a reasonable amount, thank you very much. The CEOs that are making $1M a year in smaller companies do not compare. 

If you took $10,000,000 of salary away from a CEO and distributed 100% of it to 20,000 workers, it would amount to $500 each. I'd rather pay a CEO for keeping them employed rather than risking a worse outcome.


----------



## fireseeker

doctrine said:


> I'm sure there is an upper bound to reasonableness, but it's not $1M, especially for a $100+ billion dollar company. $100M is probably excessive. $10-20M? Not so much. I've been investing a long time and seen what crappy CEOs can do to a business. I'd rather pay a reasonable amount, thank you very much.


Here's a corollary of an important investment question:
Can you identify in advance which CEOs will be good managers and allocators of capital?

If you can, why do the crappy CEOs (Rogers, Blackberry, Nortel from your list) still get paid eight figures?

If you can't, why do any of them get up front pay packages for eight figures?


----------



## doctrine

Yes, sure, you can't 100% predict and guarantee endless 100%+ annual returns by giving some dude $10M a year to work. No guarantee that paying a ball player $30M wins you the world series either, or a soccer player $50M+. But across the industry, it is pretty clear that good pay is necessary to keep top talent running large complex companies which underpin our economy. The pay and the opportunity is just fine with me if it is working; it is a competitive landscape, and top talent can go elsewhere, including into private equity, private companies, or other areas out of sight. And it is pretty clearly not $1M a year or less to me for a large company, and especially when the pay is mostly share based.

I'm more than happy to keep paying Entwistle a big salary at Telus - he went into retirement and the company started doing worse almost immediately under his replacement, Rogers-like if you will, but fortunately was enticed out of retirement to the benefit of all. Definitely a special CEO. Rogers CEO should have been fired a long time ago, but then again, I don't own any shares either, so there you go. I was not involved in paying him a big salary for a long time. Nor Blackberry. Nor Nortel. I would take a $500 pay cut for a CEO who could keep the company growing and being successful, especially if my shares were going up as fast or faster.

You are welcome for my alternate and non-mainstream perspective on the situation.


----------



## MrMatt

MrBlackhill said:


> The success of a company is not a one-man show, that's why you don't even need a CEO to successfully run a company.


Yes you do. They might have a different job title, but you need one.



> And when there's a CEO, since it's not a one-man show, that's why the CEO doesn't deserve a pay of a few million dollars a year.


It matters, I think choosing and guiding a company can create tremendous value.
I'm glad to pay Tim Cook an absolutely astonishing level of compensation, because under his watch Apple did well.
Maybe it's due to the rest of the team, I don't really care.



> What's so special and unique about a CEO or an athlete justifying multimillions in annual salary?


Nothing, they negotiated their compensation with their employer, it's between them.
Unless you're paying the salary it isn't any of your business.

It isn't like it's your money, so you rightly don't get a vote.


----------



## MrBlackhill

doctrine said:


> A major CEO is responsible for tens of thousands of workers and their families on a daily basis.


They are not. You put CEOs on a pedestal. Again, successfully running a company is a team-work, not a one-man show.

Mechanistic organizations aren't the only way to go. There's also organic organizations.








Mechanistic vs Organic Organization


In this article, we discuss Difference Between The Mechanistic And An Organic Organization. This two types of organizational structures.




www.marketing91.com















You can also simply replace the CEO by a management committee.


----------



## Covariance

MrBlackhill said:


> The success of a company is not a one-man show, that's why you don't even need a CEO to successfully run a company. And when there's a CEO, since it's not a one-man show, that's why the CEO doesn't deserve a pay of a few million dollars a year.
> 
> Prime Minister's salary... less than a million.
> Salary of a surgeon saving lives daily... less than a million.
> 
> What's so special and unique about a CEO or an athlete justifying multimillions in annual salary?


I would not invest in a company that didn't have a leader.


----------



## MrBlackhill

Covariance said:


> I would not invest in a company that didn't have a leader.


What about a company that doesn't have "a" leader, but a committee of leaders?



doctrine said:


> A major CEO is responsible for tens of thousands of workers and their families on a daily basis.





doctrine said:


> But across the industry, it is pretty clear that good pay is necessary to keep top talent running large complex companies which underpin our economy.


Then why our Prime Minister is responsible for 38 millions citizens and yet paid less than a million? He has a huge impact on our economy. Plus it's an even worse job because he gets all the hate from more than half of them and needs security guards. And all the media coverage.


----------



## fireseeker

doctrine said:


> You are welcome for my alternate and non-mainstream perspective on the situation.


I appreciate your perspective! You're one of CMF's best posters.



doctrine said:


> The pay and the opportunity is just fine with me if it is working; it is a competitive landscape, and top talent can go elsewhere, including into private equity, private companies, or other areas out of sight.


This is the part I'm not sure about -- that it's a competitive landscape.

I think compensation committees and boards of directors suffer from conflicts of interest when it comes to executive pay. 
It's in all of their personal interests to keep pay high. It helps confirm that the work they all do is Important. It also helps build a network of back-scratchers. What's the benefit to a board member to negotiate hard with a CEO candidate? As you point out, the trickle-down savings for individual stock holders is negligible. 
So, ratcheting executive pay ever higher works for all involved. But that doesn't mean it's justified.


----------



## m3s

Is Pierre the MP who even asks real questions? In another video none of the finance ministers could even answer what Canada's debt actually is. I guess it doesn't matter when we have magic banker moneys


----------



## Tostig

fireseeker said:


> I appreciate your perspective! You're one of CMF's best posters.
> 
> 
> 
> This is the part I'm not sure about -- that it's a competitive landscape.
> 
> I think compensation committees and boards of directors suffer from conflicts of interest when it comes to executive pay.
> It's in all of their personal interests to keep pay high. It helps confirm that the work they all do is Important. It also helps build a network of back-scratchers. What's the benefit to a board member to negotiate hard with a CEO candidate? As you point out, the trickle-down savings for individual stock holders is negligible.
> So, ratcheting executive pay ever higher works for all involved. But that doesn't mean it's justified.


This is why, in my proxyvote, I always vote against Executive Compensation and against all nominees.

One may say that executives deserve the high pay they get because of their value-add, but the growth in the gap compared to salaried employees is exponential as salaried employees only grow at the rate of inflation. How does one honestly say that the non-executive salaried or hourly employee does not contribute to their company's value?


----------



## KaeJS

m3s said:


> Is Pierre the MP who even asks real questions? In another video none of the finance ministers could even answer what Canada's debt actually is. I guess it doesn't matter when we have magic banker moneys


Watched this last night. Said it before and I'll say it again - Pierre is the best.


----------



## MrBlackhill

KaeJS said:


> Watched this last night. Said it before and I'll say it again - Pierre is the best.


I enjoy political videos like these. I've watched a few of his videos and sometimes there's some funny arguments like when he said we have so much land in Canada to build houses... Yeah who wants to live in the North? About 70% of Canadians live South of the 49th parallel, even though that's the Canada-US border for most of Canada. And even more below the 50th.


----------



## KaeJS

MrBlackhill said:


> I enjoy political videos like these. I've watched a few of his videos and sometimes there's some funny arguments like when he said we have so much land in Canada to build houses... Yeah who wants to live in the North? About 70% of Canadians live South of the 49th parallel, even though that's the Canada-US border for most of Canada. And even more below the 50th.


There is lots of southern undeveloped land not in use for agricultural purposes.

Either way, it's not up for debate.
Canadians are financially f(_)cked.


----------



## Covariance

MrBlackhill said:


> What about a company that doesn't have "a" leader, but a committee of leaders?


a committee would be even worse.


----------



## Covariance

Tostig said:


> This is why, in my proxyvote, I always vote against Executive Compensation and against all nominees.


An a honest question - I am trying to understand your perspective - how do you own shares in a company where you don’t support the management and board that are husbanding your money?


----------



## m3s

MrBlackhill said:


> What about a company that doesn't have "a" leader, but a committee of leaders?


You would like DAOs. They are taking off with the younger generation


----------



## Ukrainiandude

Time to lift rates to fight the inflation. No more excuses. 
According to the official report released today, the labour force participation rate among core-aged population (25 to 54 years old) remained at a *record-high *of 88.3% for the fourth consecutive month. The rate for core-aged women held steady at its *record high* of 84.6%, and the rate for core-aged men was little changed at 92.0%.

For the total working-age population (15 years and older) the labour market participation rate held steady at 65.3% in December, virtually the *same as it was prior to the pandemic* (65.5%).


----------



## Ukrainiandude

2022-23 grocery shopping in Canada thanks to bank of Canada new monetary policy.


----------



## nathan79




----------



## sags

Home prices aren't driven by inflation or money printing.

They are driven by a lack of building affordable housing.

Home prices are the result of rampant speculation among land developers, high priced builders, and real estate fees.

We still build homes in the most inefficient and costly manner possible, stick by stick in an open field.......just like the pioneers did.

Imagine building cars one at a time in an open field, with people coming and going to put parts on it.

There is a solution to affordable single family homes, that has been successful done in the past, but no politicians are interested in it.

Home building needs to move into the 21st century.


----------



## m3s

All your arguments existed before the pandemic sags

If anything RE should have decreased in value during the pandemic.

It increased because of money printing and inflation


----------



## Ukrainiandude

m3s said:


> It increased because of money printing and inflation


That plus reckless emigration policy. That’s why I gonna vote people party next time. 100,000 per year immigrants are more than enough.


----------



## KaeJS

Honestly, Canada can't be saved now.
It's too far gone.
It will only get worse and more difficult.


----------



## cainvest

KaeJS said:


> Honestly, Canada can't be saved now.
> It's too far gone.
> It will only get worse and more difficult.


Better get out now before it's too late!


----------



## londoncalling

Why inflation can actually be good for everyday Americans and bad for rich people - CNN 

Not sure how the headline identifies how inflation is bad for rich people. Also, there are a lot of assumptions around the positive results such as wage growth, appreciation of real estate etc. 
A lot of the article focuses on very near term trade offs.


----------



## MrMatt

londoncalling said:


> Why inflation can actually be good for everyday Americans and bad for rich people - CNN
> 
> Not sure how the headline identifies how inflation is bad for rich people. Also, there are a lot of assumptions around the positive results such as wage growth, appreciation of real estate etc.
> A lot of the article focuses on very near term trade offs.


From the article >> "Another group getting hit are people with exposure to government bonds — think households with more than $1 million who typically invest in both equities and debt. " 

The idea that the people who have a balanced asset allocation strategy are going to get hurt more by high inflation is "interesting".

I think inflating away debt sounds like it helps poor more. But if you want to inflate away your $20k in CC & car loan debt, while I "inflate away" my mortgage and real estate value... I'm cool with that.

That VISA/Mastercard stock that skims off a small percentage of every transaction... darn looks like their profit will inflate as well.

High inflation hurts everyone, and when you hurt everyone, the poor tend to get the worst of it.


----------



## m3s

londoncalling said:


> Not sure how the headline identifies how inflation is bad for rich people. Also, there are a lot of assumptions around the positive results such as wage growth, appreciation of real estate etc.
> A lot of the article focuses on very near term trade offs.


That article was just bad in so many ways. Looks like some girl had a shower thought that was just wrong and nobody at CNN cares as long as the title generates a few clicks

The mainstream media is a joke. They can't compete with internet content creators so they end up with the morons who never figured out how to publish their own content themselves publishing lazy clickbait content for the morons who still read it. Stop clicking and reading that stuff

Inflation hurts the poor, the middle class and the savers. The rich can use their inflated assets to borrow cheap debt to buy more assets that are being inflated. All tax free


----------



## BC Eddie

Probably unfair to say "some girl had a shower thought"

*About *

Allison Morrow is a Senior Editor and the lead writer for the CNN Business Nightcap newsletter. She joined CNN in 2016 as a Senior Producer for Social Publishing. Before that, she was a news editor at The Wall Street Journal.

In her current role, she assigns and edits breaking news on subjects including business, markets and the global economy. In the Nightcap newsletter, Morrow offers pithy musings on the biggest business stories of the day.

In her nine years at WSJ, she specialized in coverage of the Asia-Pacific region, based in Hong Kong and New York.

Morrow holds a Bachelor's degree in journalism from the University of Missouri-Columbia. She lives in Brooklyn.


----------



## m3s

BC Eddie said:


> Morrow holds a Bachelor's degree in journalism from the University of Missouri-Columbia. She lives in Brooklyn.


Oh my mistake

I didn't know she had a bachelor's degree in journalism. That does make her an expert in the global economy after 5 years of "social publishing" Maybe she can explain to simpletons like me how inflation is good news for GICs

Why do people think journalists know what they're talking about? They are experts are generating clicks and ad revenue

Otherwise she would be working on wall street


----------



## Ukrainiandude

Bank of Canada will hike rates this month: J.P. Morgan
Economists at J.P. Morgan expect the Bank of Canada will raise its benchmark interest rate at its Jan. 26 meeting, ahead of the central bank’s own timeline for liftoff.

“Based on rhetoric from the Bank of Canada in December, it was clear that labour market dynamics and outperforming economic data had created heightened concerns at the Bank that the output gap was closing more rapidly than expected,” wrote Silvana Dimino, a New York-based economist at J.P. Morgan, in a report to clients Tuesday.

Dimino sees the Bank raising its benchmark rate by *25 basis points* to 0.5 per cent in January; her team previously called for the first move in April. She expects there will be five rate hikes this year, which would push the benchmark *rate to 1.5 per cent by year-end.* 

She also expects the Bank to begin a modest run off of its balance sheet in the second half of this year.


----------



## MrMatt

BC Eddie said:


> Probably unfair to say "some girl had a shower thought"


Yes, more apt 
"some writer had a shower thought and put together a crappy piece"


----------



## sags

We haven't seen much inflation on our spending, other than a few extra bucks for gas and groceries.

The extra cost would be less than 1% of our total income.

We are getting a 2.7% increase on 80% of our total income, so we will have more discretionary income to put into GICs.

It is likely the interest on GICs will be rising as well, so it all works out for us.

I don't think we are unusual, so a lot of people are likely in a similar financial situation.

There has been low inflation and low interest rates for so long that some people think it is normal and has always been that way.


----------



## scorpion_ca

Ukrainiandude said:


> Bank of Canada will hike rates this month: J.P. Morgan


Morgan Stanley thinks the same too.








Bank of Canada to hike rates this month – Morgan Stanley


Morgan Stanley (MS) came out with hawkish expectations for the January monetary policy meeting of the Bank of Canada (BOC) while forecasting a surpris




www.fxstreet.com


----------



## Ukrainiandude

*U.S. inflation rises to another 40-year high of 7%*
TD Bank senior economist and director Leslie Preston said while the figures are eye-poppingly high now, consumers should brace themselves for even higher numbers in the months ahead.

"Buckle up," she said. "After reaching new highs, core inflation is likely to get even higher in the first quarter of 2022 on a year-on-year basis as price levels are compared to relative weakness in early 2021."


https://www.cbc.ca/news/business/us-inflation-40-year-high-1.6312003




The consumer price index, an inflation gauge that measures costs across dozens of items, rose 7% in December from a year earlier, the fastest pace since June 1982.
Used vehicle prices, which have been a major component of the inflation increase during the Covid pandemic due to supply chain constraints that have limited new vehicle production, rose another 3.5% in December, bringing the increase from a year ago to 37.3%.

central banker lost their minds.


----------



## sags

Better not buy a used car right now then.

If people can't manage a couple of 0.25% interest rate hikes they are already in big trouble.

Nobody promised interest rates would remain at historic lows forever and there would be no inflation.


----------



## james4beach

sags said:


> Better not buy a used car right now then.


I seriously goofed on the car issue.

Just before covid hit in 2019, I was looking at getting a small car, something like a Hyundai Elantra or maybe Toyota Corolla or Honda Civic. I checked a couple dealers but wasn't loving the prices, so I passed, thought I would wait to find a nice, lightly used second hand one.

I would have actually bought a brand new one as well if I found a good dealer clearance but there weren't any available at the time I looked.

In fact my dad even had an old Corolla. It was pretty old but I could have easily fixed it up myself. At the time I thought the pandemic would be over in a year, so when he told me he wanted to get rid of it, I said I didn't want it (*thinking I could buy a newer one*) and my dad got rid of that Corolla.

Double oops on my part! Now with covid it's become impossible to buy this kind of car, certainly not used or lightly used.


----------



## m3s

sags said:


> I don't think we are unusual, so a lot of people are likely in a similar financial situation.


On a pension that increases faster than your expenses? That's not common for anyone under the age of 60

For young people with long time horizons inflation is a real problem. For old people who happen to be making the decisions it's good news for all the assets they already had time to accumulate. If they want to upgrade they have an inflated asset to trade in. They must think like you that this is not unusual.

Most people do need to buy cars and RE in their future and don't have valuable assets to trade in especially first time buyers


----------



## KaeJS

james4beach said:


> I seriously goofed on the car issue.
> 
> Just before covid hit in 2019, I was looking at getting a small car, something like a Hyundai Elantra or maybe Toyota Corolla or Honda Civic. I checked a couple dealers but wasn't loving the prices, so I passed, thought I would wait to find a nice, lightly used second hand one.
> 
> I would have actually bought a brand new one as well if I found a good dealer clearance but there weren't any available at the time I looked.
> 
> In fact my dad even had an old Corolla. It was pretty old but I could have easily fixed it up myself. At the time I thought the pandemic would be over in a year, so when he told me he wanted to get rid of it, I said I didn't want it (*thinking I could buy a newer one*) and my dad got rid of that Corolla.
> 
> Double oops on my part! Now with covid it's become impossible to buy this kind of car, certainly not used or lightly used.


Yikes.

There are still some deals out there but you have to look long and hard.

I bought a new winter beater in October. Picked up a 2015 Mazda 3 GS with only 90k for a little over $11k.

Not a bad price for that, honestly.
But it did take me some searching and digging.


----------



## Ukrainiandude




----------



## Ukrainiandude

RE inflation got in to virtual world. 
Real estate in virtual worlds — sometimes called the metaverse — is going for millions of dollars in some cases.

The most expensive spots are near where lots of users congregate — for instance, someone recently paid $450,000 to be Snoop Dogg’s neighbor in a virtual world called the Sandbox.

https://www.cnbc.com/2022/01/12/investors-are-paying-millions-for-virtual-land-in-the-metaverse.html


----------



## Thal81

Ukrainiandude said:


> RE inflation got in to virtual world.
> Real estate in virtual worlds — sometimes called the metaverse — is going for millions of dollars in some cases.
> 
> The most expensive spots are near where lots of users congregate — for instance, someone recently paid $450,000 to be Snoop Dogg’s neighbor in a virtual world called the Sandbox.
> 
> https://www.cnbc.com/2022/01/12/investors-are-paying-millions-for-virtual-land-in-the-metaverse.html


Sounds a lot like the .com craze of the late '90s. I'm not surprised that the younger generation is repeating the mistakes of the past...


----------



## sags

The metaverse sounds like a big con job to me.

They put out a press release and claim somebody paid millions for this and millions for that, but nobody does an audit to make sure the "sales" were legitimate.

There is a massive amount of fraud, price manipulation, and outright lies in the crypto world.

At the core, it is all based on nothing of value and that never works out well for people who get drawn into the hype.


----------



## BC Eddie

m3s said:


> Oh my mistake
> 
> I didn't know she had a bachelor's degree in journalism. That does make her an expert in the global economy after 5 years of "social publishing" Maybe she can explain to simpletons like me how inflation is good news for GICs Why do people think journalists know what they're talking about? They are experts are generating clicks and ad revenue
> Otherwise she would be working on wall street


I am not sure if you are purposely ignoring the facts of this woman's experience or you just have a limited attention span. If you read her bio you can see that in addition to her BA in Journalism she has 5 years at CNN she and 9 years at the Wall Street Journal. I think 14+ years in a profession should give someone credibility, Just because you may disagree with this particular article does not mean she is not credible.


----------



## m3s

CNN is credible? Do you live under a rock?

*"Why inflation can actually be good for everyday Americans and bad for rich people - CNN"*

Inflation is not good for everyday Americans. Textbook fake news clickbait for boomers. 0 credibility


----------



## MrMatt

BC Eddie said:


> I am not sure if you are purposely ignoring the facts of this woman's experience or you just have a limited attention span. If you read her bio you can see that in addition to her BA in Journalism she has 5 years at CNN she and 9 years at the Wall Street Journal. I think 14+ years in a profession should give someone credibility, Just because you may disagree with this particular article does not mean she is not credible.


Based on the incredibly poor quality of the content, I do not find her to be credible on financial matters.
The "facts" cited aren't referenced, and they're also silly in application.
The actual argument/premise of the article isn't true, and the case to support it is laughably bad.

The writing itself however is excellent, it's just the factual content that is lacking.

I don't think anyone was denying that she's a good writer, but to suggest she is a credible or competent authority on anything financial is interesting. I don't think anyone competent in finance who was concerned about their reputation would have submitted such a poor article in the first place.


----------



## m3s

She's an excellent journalist

She is paid to write a catchy title that will catch attention and get the widest distribution possible to maximize ad revenue. I clicked just to see the absurdity.

Fake news is more entertainment than education nowadays


----------



## MrMatt

m3s said:


> She's an excellent journalist


Yes, she's an excellent writer/journalist.

She isn't a good "reporter of facts"


----------



## BC Eddie

MrMatt said:


> Yes, she's an excellent writer/journalist.
> 
> She isn't a good "reporter of facts"


I really don't mean to drag this out and this will be my last post on the subject but...

My original comment was not regarding the content of this particular article (in fact I agree with the much of the criticism) but rather the way m3s appeared to dismiss the author with "some girl had a shower thought" . Maybe it was not intended but to me it smacked of sexism and ignored the woman's credentials. 

But maybe m3s is also in the habit of disagreeing with male writers by saying things like "some boy had a shower thought". If so, then I apologize now.


----------



## m3s

It sounds absurd but I do like using the test of flipping things around

I wouldn't say "some boy" and therefore I have indeed sinned with this micro aggression

My distaste is definitely for bad journalism though and not directed at females specifically


----------



## Ukrainiandude

Let’s hope they will hike it up alright, where inflation is. Otherwise it’s hardly a “hike” if they going to those point twenty five steps, with double digits real world inflation.

Bloomberg) -- Canadian banks are bringing forward their forecasts for interest rate hikes to as early as next week, amid growing evidence the economy is hitting limits and inflation pressures are rising.
Economists at TD Securities and Laurentian Bank said Monday the Bank of Canada will start a hiking cycle at its policy decision on Jan. 26. Bank of Montreal brought forward its call on the first increase to March from April, while Bank of Nova Scotia said the central bank “cannot afford” to wait any longer. 
The more hawkish calls follow the release of the Bank of Canada’s quarterly survey of business executives on Monday, which painted a picture of an economy running increasingly hot, with widespread labor shortages, record inflation expectations, and strong demand.
“The context is appropriate for a liftoff next week,” said Dominique Lapointe, an economist with Laurentian Bank Securities, by email
Markets are also pricing in a January hike, with overnight swaps pointing to a greater than 70% chance that the central bank will move next week. The Bank of Canada has kept its overnight rate at the emergency level of 0.25% since March 2020. 
For some analysts, the survey data confirmed that risks require the central bank to move sooner than later.
“The Bank of Canada cannot afford to wait any longer to tighten monetary policy,” Derek Holt, an economist with Scotiabank, wrote in a report to investors.


----------



## m3s

"Those who have access to the financial system get vastly richer as *their debts shrink in real value and their assets inflate*. Those who do the work - the people in the fields for whom we painted these floors green - they watch the fruits of their labours wither away by this inflation"

The house of commons basically getting schooled by professor Pierre nowadays? But is anybody listening? #JustinFlation


__ https://twitter.com/i/web/status/1483481771496853508


----------



## james4beach

Ukrainiandude said:


> Let’s hope they will hike it up alright, where inflation is. Otherwise it’s hardly a “hike”


A rate hike is expected next week. The Bank of Canada policy rate will end up at 0.50%


----------



## MrBlackhill

CPI release today for December, so we had 4.8% inflation in year 2021.


----------



## m3s

MrBlackhill said:


> CPI release today for December, so we had 4.8% inflation in year 2021.


CPI is broken

It's much higher


----------



## MrBlackhill

Now let's see what will be my pay raise and how my boss reacts when I'll tell him that I consider a pay raise lower than 5% as a decrease in my salary due to inflation.


----------



## Ukrainiandude

james4beach said:


> A rate hike is expected next week. The Bank of Canada policy rate will end up at 0.50%


Like shooting the elephant with a pellet gun.


----------



## nathan79

m3s said:


> CPI is broken
> 
> It's much higher


I feel like CPI is borderline propaganda at this point.

Gas prices up nearly 40 cents/litre from this time a year ago (edit: my bad, using Dec 31st numbers it's "only" up about 20 cents... lol). Let's not even talk about housing.

Can someone explain why the US inflation numbers are so much higher? Is their measurement method better, or is there some other reason?


----------



## Covariance

nathan79 said:


> I feel like CPI is borderline propaganda at this point.
> 
> Gas prices up nearly 40 cents from this time a year ago. Let's not even talk about housing.
> 
> Can someone explain why the US inflation numbers are so much higher? Is their measurement method better, or is there some other reason?


Answer to your first question is timing. These are December numbers. Not real time.

Answer to the second question is their inflation is higher (when measuring the basket of goods/services in their market in their currency - USD$)


----------



## nathan79

Covariance said:


> Answer to your first question is timing. These are December numbers. Not real time.
> 
> Answer to the second question is their inflation is higher (when measuring the basket of goods/services in their market in their currency - USD$)


Yeah, I just corrected myself regarding the timing.

Hmm, interesting.


----------



## Covariance

Ukrainiandude said:


> Like shooting the elephant with a pellet gun.


I'm not sure what you mean. This hike will have little impact on inflation. Inflation is being driven by supply issues, not demand.


----------



## Covariance

nathan79 said:


> Yeah, I just corrected myself regarding the timing.
> 
> Hmm, interesting.


If we look globally inflation is even more dispersed . Japan its less than 1%, UK 5.4, Swiss 1.5%,...


----------



## Ukrainiandude

Covariance said:


> I'm not sure what you mean. This hike will have little impact on inflation. Inflation is being driven by supply issues, not demand.


that is my point no impact unless it’s percentage increase not fraction of the percent. 
I agree inflation is driven by supply issues, uncontrollable supply of money to be more precise.


----------



## m3s

Covariance said:


> If we look globally inflation is even more dispersed . Japan its less than 1%, UK 5.4, Swiss 1.5%,...


I think it's because how things are priced in different countries/currencies

Living in the US I can assure you there are better deals available on average. There is more competition here, bigger markets, more options, lower margins etc. Their prices got squeezed up by inflation. In Canada if the car dealer had bigger margins on the MSRPs they aren't forced to raise prices as much

I don't know about Japan and Switzerland but I remember paying like 6 euro for a coffee in Switzerland. Maybe those expensive countries were already inflated


----------



## damian13ster

nathan79 said:


> I feel like CPI is borderline propaganda at this point.
> 
> Gas prices up nearly 40 cents/litre from this time a year ago (edit: my bad, using Dec 31st numbers it's "only" up about 20 cents... lol). Let's not even talk about housing.
> 
> Can someone explain why the US inflation numbers are so much higher? Is their measurement method better, or is there some other reason?


Baskets are different. For example, used cars are included in US but not in Canada


----------



## Mechanic

I'm pretty sure inflation is higher than they are telling us. Fuel alone is up about 30% ? Housing costs, utilities, groceries are all up a lot more than 5%. Another crock from Trudeau's government ?


----------



## Ukrainiandude

Housing prices in Canada are so inflated and out of step with incomes due to decades of unmitigated foreign investment/money laundering, rampant immigration, and a lack of development, that I don't think the economy will be able to withstand much more inflation or interest rate increases without a major correction taking place. Like the U.S., Canada has kept cheap money available to home owners for so long that we now have record shortages in housing availability and landlords and sellers are increasing their prices monthly. Canada's banking industry is more heavily regulated than the U.S., which means that prospective mortgage holders need to pass a financial "stress test", simulating if interest rates should rise past 5+%, when they apply for a mortgage. This is a good thing, however, over the years people have found a way to game the system by applying for a mortgage through a broker who fudges the numbers, liabilities, debts, income, assets, etc. in order for the loan to be granted by the bank. Hard numbers are difficult to determine but reading accounts from industry insiders (brokers, bankers) leads me to believe somewhere in the region of 5-15% of mortgages in Canada could have been acquired through some form of fraud. The cheap money being far too enticing for those willing to leverage themselves for more income property. Families will register a second mortgage under member B, with income or assets of member A as collateral but said assets or already guaranteeing mortgage A, rinse and repeat. This is known as the "Brampton Mortgage", named after a town in southern Ontario with a large south Asian immigrant community who live in multi-generational homes, with multiple mortgages held by members of the home who wouldn't normally qualify for a loan on their own. This trend isn't unique to south Asian communities or even Ontario, it's everywhere. The bad news is that the Canadian government insures mortgages through the CMHC (Canadian Mortgage and Housing Corporation), which puts tax payers on the hook. Should there be a cascade of defaults, they government would hemorrhage billions to cover. So, yeah, that's why I want my savings decoupled from the Canadian economy. The U.S. corrected with legislation after 2008, Canada never did.


----------



## damian13ster

Yep, privatizing the profit and socializing risk - that's Canadian housing in a nutshell.
That's why it is extremely important to phase out CMHC. Such concoction should not exist in over-inflated market


----------



## MrBlackhill

Ukrainiandude said:


> that is my point no impact unless it’s percentage increase not fraction of the percent.
> I agree inflation is driven by supply issues, uncontrollable supply of money to be more precise.
> View attachment 22688


Prices = Quantity of Money × Velocity of Money / Real GDP

The issue is that we assume that the ratio Velocity of Money / Real GDP is constant, so if we increase the Quantity of Money, then Prices increase, but that's BIG IF that ratio is constant.

But in 2020, the Velocity of Money dropped. It dropped a lot (looking at US data). Obviously, because it's the rate at which people spend money. It was already low and it sharply dropped even lower.

So if the Quantity of Money stayed the same and the Real GDP stayed the same, Prices would have dropped! Deflation!

But, in the mean time, obviously the Real GDP also dropped. So the ratio Velocity of Money / Real GDP changed because the ratio actually decreased, so the Quantity of Money was increased.

But now in hindsight we could say that it was increased too much.










In the 70s, M2 growth (in black) caused inflation (in red), but since 1985 that correlation is not that strong.

But yes, in 2020 there was SO MUCH growth in M2 that even if the correlation wasn't as strong anymore, the inflation still picked up.

But it was very hard to know HOW MUCH money printing was too much because look at that HUGE drop in the Velocity of Money.










Whereas Real GDP wasn't as much impacted, even though it was low.









So there was expectations of DEFLATION, but then... they overshot so we have inflation. So if I'm trying to be a bit more objective, I think it was a though call.


----------



## Covariance

m3s said:


> I think it's because how things are priced in different countries/currencies
> 
> Living in the US I can assure you there are better deals available on average. There is more competition here, bigger markets, more options, lower margins etc. Their prices got squeezed up by inflation. In Canada if the car dealer had bigger margins on the MSRPs they aren't forced to raise prices as much
> 
> I don't know about Japan and Switzerland but I remember paying like 6 euro for a coffee in Switzerland. Maybe those expensive countries were already inflated


Inflation is a rate of change measure. So if something never changes in price the inflation is zero.


----------



## Covariance

MrBlackhill said:


> Prices = Quantity of Money × Velocity of Money / Real GDP
> 
> The issue is that we assume that Velocity of Money / Real GDP is constant, so if we increase the Quantity of Money, then Prices increase.
> 
> But in 2020, the Velocity of Money dropped. It dropped a lot (looking that US data). Obviously, because it's the rate at which people spend money.
> 
> So if the Quantity of Money stayed the same and the Real GDP stayed the same, Prices would have dropped!
> 
> But, in the mean time, obviously the Real GDP also dropped. So the ratio Velocity of Money / Real GDP changed because the ratio actually decreased, so the Quantity of Money was increased.
> 
> But now we could say that it was increased too much.
> 
> View attachment 22689
> 
> 
> In the 70s, M2 growth (in black) has caused inflation (in red), but since 1985 that correlation is not that strong.
> 
> But yes, in 2020 there was SO MUCH growth in M2 that even if the correlation wasn't as strong anymore, the inflation still picked up.
> 
> But it was very hard to know HOW MUCH money printing was too much because look at that HUGE drop in the Velocity of Money.
> 
> View attachment 22690
> 
> 
> Whereas Real GDP wasn't as much impacted.
> View attachment 22691
> 
> 
> So there was expectations of DEFLATION, but then... they overshot so we have inflation. So if I'm trying to be a bit more objective, I think it was a though call.


Understood. Didn't want to step into that debate with the OP. For the record when I referenced supply issues I was referring to the supply constraints on goods and services.


----------



## MrBlackhill

Covariance said:


> Understood. Didn't want to step into that debate with the OP. For the record when I referenced supply issues I was referring to the supply constraints on goods and services.


Yes I was replying to Ukrainiandude's graph. Forgot to quote.


----------



## MrBlackhill

Also note that we've been used to very low inflation over the past decade. I guess rates kept going down to try to increase that inflation.











And the issue in Canada with housing is a supply issue, so even if we raise rates to cool off the prices, Canada has lowest housing units per capita in the G7.















Which Province Has the Largest Structural Housing Deficit?







www.scotiabank.com





And we're currently at a record shortage.



> With sales little changed and new listings down in December, the sales-to-new listings ratio tightened to 79.7% compared to 77% in November. The long-term average for the national sales-to-new listings ratio is 54.9%.








December 15 2022 News Release | CREA Statistics







creastats.crea.ca


----------



## m3s

MrBlackhill said:


> So there was expectations of DEFLATION, but then... they overshot so we have inflation. So if I'm trying to be a bit more objective, I think it was a though call.


I agree it's a tough call

The US printed an insane amount of money though. 20-30% M2 supply growth in a year and people were still calling for deflation. There was a lot of divergence and confusion in 2020. You could see the inflation coming long before it was publicly admitted.

The Fed/Central banksters can also control the markets with subtle hints known as "forward guidance" They are talking hawkish now but their actions are not..

Like they are taunting the elephant with a pellet gun but they can threaten to go nuclear any day. They have infinite power


----------



## Ukrainiandude

MrBlackhill said:


> Canada has lowest housing units per capita in the G7


At 1,792 square feet, Canada ranks third out of nine major global countries in terms of average home size, after Australia and the US, according to a new survey by _Point 2 Homes_.

Canada takes the second spot after the US, with an average of 618 square feet of elbow room when it comes to living space per person or household. This is typically 36% more living space than in the UK and 44% upwards of Brazilians.

the solution is simple, make them smaller, smaller means cheaper.


----------



## nathan79

Ukrainiandude said:


> At 1,792 square feet, Canada ranks third out of nine major global countries in terms of average home size, after Australia and the US, according to a new survey by _Point 2 Homes_.
> 
> Canada takes the second spot after the US, with an average of 618 square feet of elbow room when it comes to living space per person or household. This is typically 36% more living space than in the UK and 44% upwards of Brazilians.
> 
> the solution is simple, make them smaller, smaller means cheaper.


While that may be true, the solution is a bit more complex. They're already building lots of small condos, but not enough family-sized homes. We need more 3-bedroom townhomes and detached homes, but we don't want more McMansions. There should be more supply of detached homes from 1500-2000 sqft, but builders aren't interested because it's not profitable to buy land and put a small house on it. The cost of land is the biggest problem right now. We need a way to acquire land cheaply. This is where various levels of government could be more involved. They could provide land cheaply to developers, but in return there would be set limits for lot size, house size and price per square foot.


----------



## nathan79

Speculative rezoning is a big problem. An investor or developer can buy farmland, apply for rezoning, then pocket the profits of the increased value. There should be a ban on such practices.


----------



## Covariance

nathan79 said:


> Speculative rezoning is a big problem. An investor or developer can buy farmland, apply for rezoning, then pocket the profits of the increased value. There should be a ban on such practices.


Why blame the capitalists? If there was no risk and the process was easy then it would not be profitable. The problem is with Gov't.


----------



## MrMatt

nathan79 said:


> While that may be true, the solution is a bit more complex. They're already building lots of small condos, but not enough family-sized homes. We need more 3-bedroom townhomes and detached homes, but we don't want more McMansions. There should be more supply of detached homes from 1500-2000 sqft, but builders aren't interested because it's not profitable to buy land and put a small house on it. The cost of land is the biggest problem right now. We need a way to acquire land cheaply. This is where various levels of government could be more involved. They could provide land cheaply to developers, but in return there would be set limits for lot size, house size and price per square foot.


The problem is if the city is only going to give you permits to build 20 homes, are you going to build 20 mid priced homes, or 20 of the most expensive and profitable beats you can?

Zoning laws already exist that control all that, typically even requirements for "affordable units".
But again as long as they limit how much you can build, they're going to maximize what they can.


----------



## m3s

I already posted this from twitter but it's worth reposting a better version

#JustinFlation


----------



## Ukrainiandude

MrMatt said:


> The problem is if the city is only going to give you permits to build 20 homes, are you going to build 20 mid priced homes, or 20 of the most expensive and profitable beats you can?


Why not expend the cities limits and issue 200,000 permits for 150 square meters houses? It certainly doesn’t look like Toronto and Vancouver one big megapolis. Plenty of room between and around them.


----------



## MrMatt

Ukrainiandude said:


> Why not expend the cities limits and issue 200,000 permits for 150 square meters houses? It certainly doesn’t look like Toronto and Vancouver one big megapolis. Plenty of room between and around them.


Why expand city limits?
That's kind of irrelevant to the problem.

If they're not letting people in Markham build, do you think renaming Markham Toronto will suddenly change their mind?

Here in London we have lots of land, the city says no. In the surrounding communities, they say no too.
Heck they wanted to replace half a dozen houses with student rentals with an apartment building, way more units, and even more affordable units than the handful of houses they were replacing, city said no.

The problem is that it simply doesn't make sense to spend months or years fighting the cities/townships to let them build. Even if they eventually win, they've lost a lot of time and energy.

That's one of the reasons I don't invest in residential real estate, my time and money is better spent elsewhere.
Really, why tie up money building housing and dealing with all that trouble?

The residential real estate I AM invested in is in the US, where the governments are more likely to allow development. That's capital flight in action.
I want to build housing for Canadians, but the government said no. Okay fine, I'll go build for housing for Americans then.


----------



## m3s

What inflation?


----------



## Ukrainiandude

MrMatt said:


> Here in London we have lots of land, the city says no. In the surrounding communities, they say no too.


The law should be changed, it should be mandated on federal level to issue permits in five business days. The program of issuing hundreds of thousands permits should by created. Make houses abundant, and dirty cheap. This will further remove the speculators aka investors from the market.


----------



## MrMatt

Ukrainiandude said:


> The law should be changed, it should be mandated on federal level to issue permits in five business days. The program of issuing hundreds of thousands permits should by created. Make houses abundant, and dirty cheap. This will further remove the speculators aka investors from the market.


No for many reasons
1. It's provincial jurisdiction. How would federalizing it make it better?
2. The current targets for 5-30 days is completely reasonable. Remember permitting means checking a LOT of things.

When I applied for commercial Reno permits, I was approved in hours.
My residential reno permit was approved while I waited.
3. The system should be expanded, but part of it is that they're short staffed etc.

I think the BS/political reasons to say no should be shot down.

FYI, I live in a spec home, speculative builds are how I found a property to quickly and easily move to my location.
I think investors and speculators add liquidity and make the market run better.

Heck, when they build a new subdivision, with thousands of houses, who do you think does that?
Investors and speculators, it isn't like the city goes and puts in new streets and infrastructure hoping that someone shows up and builds houses there. It's all built by investors and speculators. I don't want the goverment spending tax dollars speculating on real estate. 

Why do you think government should take on this role?


----------



## Ukrainiandude

MrMatt said:


> Why do you think government should take on this role


Because other way seems inefficient. We don’t have abundant and cheap house. Invite building companies from China and Turkey, if local contractors can’t make it fast and cheap. There’s a way if there is a will. You can build millions of houses on the belt from the USA border to 40 degree north.


----------



## MrMatt

Ukrainiandude said:


> Because other way seems inefficient. We don’t have abundant and cheap house. Invite building companies from China and Turkey, if local contractors can’t make it fast and cheap. There’s a way if there is a will. You can build millions of houses on the belt from the USA border to 40 degree north.


No, my question was specifically why you wanted to ban private real estate investors and have the government become the real estate speculators instead?
The idea that the government will be more efficient at real estate investing than the private sector seems absurd to me.


We could have abundant cheap housing, if the government let us.

The single biggest problem with housing is that when someone asks "may I build a house here", the government says "no".


----------



## Ukrainiandude

MrMatt said:


> the government says "no".


Need government who will say yes you can, please do.


----------



## MrMatt

Ukrainiandude said:


> Need government who will say yes you can, please do.


Yes, but that doesn't mean we need to
1 Federalize it
2 Ban investors. << That's literally the exact opposite of a government saying "yes please do", it's actually giving them even MORE reasons to say no.


----------



## sags

Actually, governments very successfully built many homes in the past.


----------



## m3s

m3s said:


> Last time they tried to raise rates the market had a "taper tantrum" and they decided to delay instead
> 
> That just rewarded the market for throwing a "taper tantrum" so I'd expect the same thing to happen again.
> 
> My non-economist gameplan is to watch for "taper tantrum 2.0" The fed have cornered themselves here


Is this WS throwing the taper tantrum ahead of JPow's announcements next week?

This is why we need a mathematical set monetary policy not something based on "forward guidance" from some grey hairs behind closed doors

JPow picks up the pellet gun but the elephant heard him coming


----------



## sags

Our GICs didn't lose any money.

Sometimes not losing is a good outcome. Even better outcome.....not losing and gaining a little.


----------



## sags

I should email Pierre Poilevre to buy GICs.


----------



## m3s

sags said:


> not losing and gaining a little.


In real terms though?

Money lost value. Money buys 27% less RE this year

No problem for grey hairs. Problem for young kids


----------



## KaeJS

sags said:


> Our GICs didn't lose any money.
> 
> Sometimes not losing is a good outcome. Even better outcome.....not losing and gaining a little.


Wrong.


----------



## sags

GICs only go one way.....up.

We have enough exposure to equity markets, bonds, real estate, with our pensions and CPP funds.

Sags motto is.....don't put all your eggs in the stock market basket. because you don't control the future.


----------



## KaeJS

You can get a 100% increase in salary, too.
But it doesn't matter if everything else goes up 200%.

It literally makes more sense to spend the money instead of putting it into a GIC.


----------



## KaeJS

Lmao.

You'd make more money buying non perishable items like toilet paper, cleaning supplies, canned foods, beer, etc...

Than you would by keeping your funds in a GIC 😂


----------



## m3s

Just buy a used car

They appreciate more than anything nowadays

Used car I bought in 2014 for $25k CAD is now worth $25k USD


----------



## Ukrainiandude

The Recount (@therecount) Tweeted:
President Biden appears to call Fox News' Peter Doocy a "stupid son of a *****," mocking his question about inflation. https://t.co/mZcp0f2Jyl


__ https://twitter.com/i/web/status/1485741910560022532_“That’s a great asset. More inflation. What a stupid son of a b****,”_


----------



## diharv

So the inflation is going to take care of itself according to BOC governor. Someone must have been bending his ear.


----------



## Ukrainiandude

diharv said:


> So the inflation is going to take care of itself according to BOC governor. Someone must have been bending his ear.


Inflation mostly affects low and middle class. Vs the equities are held by wealthy people. Bank of Canada has to look after the wealthy individuals, because on the next elections they will sponsoring political parties.
Corrupt government, corrupt bank of Canada.


----------



## gardner

Ukrainiandude said:


> Bank of Canada has to look after the wealthy individuals, because on the next elections they will sponsoring political parties.
> Corrupt government, corrupt bank of Canada.


While I agree there is an element of this type of donor-driven corruption in Canadian politics, I think it is minuscule compared to the mess the American's have to deal with.

The biggest effect is probably the more classist affinity of the rich educated party elites for their rich educated friends that run the businesses. If you wanted to throw stones at THAT system, you'd be voting for the NDP or Green's -- the outsiders with no school chums on the boards of directors.


----------



## MrMatt

gardner said:


> While I agree there is an element of this type of donor-driven corruption in Canadian politics, I think it is minuscule compared to the mess the American's have to deal with.
> 
> The biggest effect is probably the more classist affinity of the rich educated party elites for their rich educated friends that run the businesses. If you wanted to throw stones at THAT system, you'd be voting for the NDP or Green's -- the outsiders with no school chums on the boards of directors.


That's actually the problem with the NDP.
Nothing about making it better for lower or middle class, just trying to make it worse for the rich.

Heck many of their policy proposals simply make it worse for EVERYONE, which I guess is one way to "punish the rich"


----------



## damian13ster

Sabrina Maddeaux: When does the Bank of Canada's lack of action become reckless?


Who, exactly, does the Bank of Canada serve? The answer is ostensibly straightforward: the economic and financial welfare of Canada. However, the answer has…




nationalpost.com


----------



## m3s

When the Fed says hike the BoC says how high

Not the other way around


----------



## m3s

Can sags to convince all these people to just manage their inflation by shopping at goodwill instead?

New signs of wage inflation may force Bank of Canada's hand in raising rates


----------



## sags

Sorry, but people deserve wage increases. They also need to join or form unions to get better benefits and pay.


----------



## m3s

sags said:


> Sorry, but people deserve wage increases. They also need to join or form unions to get better benefits and pay.


I agree

But it was yee who claims that inflation doesn't exist or can be managed by shopping frugally. It was yee who seems to think it is not a problem because RE, pensions etc will go up.

Completely ignorant to the reality of the entry level worker who doesn't have inflated RE or pension adjusted to inflation


----------



## m3s

Pierre is taking on the boomer elite


__ https://twitter.com/i/web/status/1490115382157398030


----------



## sags

Yes Pierre....a multi-millionaire and the youngest MP ever to qualify for a full MP pension is the banner carrier for the downtrodden masses.

Some are wondering how he accummulated such wealth on an MP salary. I would guess we are about to find out as the media starts digging around.

As a political junkie I am happy he is running though. It makes the race more exciting and I would guess it will be a Trump Lite campaign for the CPC.


----------



## m3s

@sags do you understand that the Sobey's employees most likely

-cannot afford to live off 1% GIC savings
-will never have a DB pension adjusted to inflation
-probably can't afford their own RE either

Let me guess your solution. Print infinite CAD to give everyone UBI so they can shop at Goodwill to "manage their own inflation"?

The boomers are out of touch. We need more young politicians who have a clue


----------



## 307169

Ukrainiandude said:


> Because other way seems inefficient. We don’t have abundant and cheap house. Invite building companies from China and Turkey, if local contractors can’t make it fast and cheap. There’s a way if there is a will. You can build millions of houses on the belt from the USA border to 40 degree north.


The problem is in the local/ municipal government, where there is too much NIMBY stopping any effort to densify neighbourhoods.


----------



## londoncalling

US inflation data out tomorrow. Stay tuned for more threats of interest rate increases.


----------



## Ukrainiandude

londoncalling said:


> US inflation data out tomorrow. Stay tuned for more threats of interest rate increases.


The USA ten year bonds are very close to 2% already.


----------



## MrBlackhill

MrBlackhill said:


> Wow 10% increase on our internet plan.


Interesting... Just received this today.



> Dear Client,
> 
> We would like to inform you that we have made the decision to suspend, for an indefinite period, the price increase to your internet plan that we announced in our communication on January 1st, 2022. Your ongoing Internet plan rate will remain unchanged.


----------



## afulldeck

MrBlackhill said:


> Interesting... Just received this today.


Wow. That is strange....no increase. Was it your birthday ?


----------



## Eclectic21

m3s said:


> @sags do you understand that the Sobey's employees most likely ...


There seems to be even less info available now that Sobey's info is rolled into Empire's notes about DB and DC pensions. IIRC, the Sobey's annual report talked about both, which the Empire one does as well.

At the same time, I don't recall any of my part time jobs providing what reads to be company funded health and dental (never mind coverage for dependents) that Sobey's web site lists.


It likely varies by location as the Sobey's Ontario warehouse workers were announced have a immediate wage bump for full timers of 11% with a total of 19% over four years. I'll have to wait a bit for the numbers but I'll be surprised if I get more than about 1.5%, where many of the previous years have been 0% or 0.5%.

I'm pretty sure Sobey's was one of the companies that re-introduced temporary lockdown pay increases late last year.


Cheers


----------



## MrBlackhill

afulldeck said:


> Wow. That is strange....no increase. Was it your birthday ?


I wish!


----------



## MrBlackhill

There you go, US inflation 7.5% against the forecast of 7.3%. Highest in 40 years.


----------



## Ukrainiandude

MrBlackhill said:


> There you go, US inflation 7.5% against the forecast of 7.3%. Highest in 40 years.


I wonder what is the real inflation rate, using the same methodology used forty years ago.


----------



## m3s

I guess by transitory they meant it will be higher next time


----------



## damian13ster

Jesus. Oil at 90$, US inflation at 7.5%, yet USD/CAD at 1.27
Where will we be at if/when oil drops back to 50?


----------



## doctrine

damian13ster said:


> Jesus. Oil at 90$, US inflation at 7.5%, yet USD/CAD at 1.27
> Where will we be at if/when oil drops back to 50?


What happens if oil rises to $150?


----------



## MrBlackhill

doctrine said:


> What happens if oil rises to $150?


It could accelerate the shift towards EV?

I'm so happy to live in a big city with everything at a walking distance and to work from home. My transportation cost is near $0.


----------



## damian13ster

doctrine said:


> What happens if oil rises to $150?


Don't know. Logic would suggest loonie would strengthen. 
All the other parts of Canadian economy and terrible governance offset the strength though? 
If I was a betting man I would think 1.17-1.22 range.
And I think oil will rise close to 150 over next year or so. North America and Europe gave up control to Russia and OPEC. It was bound to backfire.

And I wouldn't be so sure about transition to EV either. Contracts for delivery of natural gas are either dependent on spot prices on market, or to price of oil (for example Poland transitioned from the latter to the former last year and now have 500-1100% rise in nat gas prices to deal with), and since Germany is phasing out Nuclear and replacing it with coal and nat gas, electricity rates will rise as well.

Europe got to the point recently where power generating plants were repurposed to burn oil rather than natural gas, because it was cheaper, despite being at over 70$ at the time.

Whether rise of oil price will be better for EVs? - questionable. Possibly, but with so many factors at play hard to predict.
One thing for sure though - it will result in higher inflation


----------



## sags

The inflation is temporary and will decline as the supply chains are reopened.

The good news is that cost of living increases and higher wage gains are locked in as inflation falls.


----------



## nathan79

Inflation gains are also locked in unless we go into deflation, which would never be allowed to happen. Even the BoC has conceded that inflation won't drop below 3% until next year. They've been way behind the curve with their predictions, so expect it to stay above 3% well into next year. Of course, that's just the manipulated CPI inflation -- real inflation is closer to 10%. People are getting less than 5% raises while house prices go up by 30% yoy.


----------



## MrMatt

sags said:


> The inflation is temporary and will decline as the supply chains are reopened.
> 
> The good news is that cost of living increases and higher wage gains are locked in as inflation falls.


yes, no, the high rate is temporary, but we're not going to see price drops.


----------



## doctrine

MrBlackhill said:


> It could accelerate the shift towards EV?
> 
> I'm so happy to live in a big city with everything at a walking distance and to work from home. My transportation cost is near $0.


Perhaps, but it's not clear; in many ways, the shift towards EV itself is exasperating the high oil prices. EVs have their own supply and inflation problem too and won't save anyone. It will take a long, long time to ramp up production. There isn't enough of most materials, which are already at record high prices. It will affect everyone, city or no.

I'm afraid inflation is here to stay for a while and we will have to get used to it, either the high inflation or enough fiscal and monetary tightening to reduce demand enough to make a difference.


----------



## afulldeck

doctrine said:


> Perhaps, but it's not clear; in many ways, the shift towards EV itself is exasperating the high oil prices. EVs have their own supply and inflation problem too and won't save anyone. It will take a long, long time to ramp up production. There isn't enough of most materials, which are already at record high prices. It will affect everyone, city or no.
> 
> I'm afraid inflation is here to stay for a while and we will have to get used to it, either the high inflation or enough fiscal and monetary tightening to reduce demand enough to make a difference.


I would agree we are going to see a 15-20 year inflation run now...


----------



## james4beach

damian13ster said:


> Jesus. Oil at 90$, US inflation at 7.5%, yet USD/CAD at 1.27
> Where will we be at if/when oil drops back to 50?


Shouldn't we be thankful that the USD/CAD is as stable as it has been? It's kind of amazing how steady this exchange rate has been over the last 6 years.

In this 6 period that the exchange rate has been steady, oil has ranged from $30 to $90 and was typically around $50.

You already have your answer about where it would be "if oil drops back to 50". We've already been there. The exchange rate doesn't correlate very strongly with oil.


----------



## damian13ster

France calls for nuclear 'renaissance' to end reliance on fossil fuels


Nuclear power currently provides around 70 per cent of France's energy, more than any other country.




www.euronews.com






USD/CAD was very strongly correlated with oil until 2018

Then the correlation weakened, and loonie didn't strengthen the same way that oil did.
At that point irresponsible monetary policy became the main driver, and has been since, especially with added oil volatility.
Now, once the focus is again on supply/demand rather than geopolitics, I think correlation will increase again.
Except at 120USD/barrel loonie won't be on par, it will be at 1.2 
Weaker currency because of irresponsible fiscal policy


----------



## sags

Resolution of the disrupted supply chains will ease the demand-pull inflation experienced today.

I expect the rate of inflation will be back to 2% or lower in 6 months.


----------



## sags

nathan79 said:


> Inflation gains are also locked in unless we go into deflation, which would never be allowed to happen. Even the BoC has conceded that inflation won't drop below 3% until next year. They've been way behind the curve with their predictions, so expect it to stay above 3% well into next year. Of course, that's just the manipulated CPI inflation -- real inflation is closer to 10%. People are getting less than 5% raises while house prices go up by 30% yoy.


House prices are not included in the CPI. Owning a home isn't considered a necessity.

Rising home prices don't negatively affect people who already own one, just as rising super yacht prices don't affect people are are never going to buy one.

What matters is inflation on goods and services that people need to survive.


----------



## m3s

sags said:


> Resolution of the disrupted supply chains will ease the demand-pull inflation experienced today.
> 
> I expect the rate of inflation will be back to 2% or lower in 6 months.


Well if you keep moving your transitory predictions out 6 months eventually it will come true

The supply chain disruptions have gone on so long now that they will compound. Entire workforces have been disrupted and lifestyles have changed. The great resignation is happening. This stuff doesn't just resolve in 6 months. The rising cost of oil alone impacts the price of pretty much everything..

Most people calling for transitory disruptions admitted defeat long ago


----------



## MrMatt

sags said:


> Resolution of the disrupted supply chains will ease the demand-pull inflation experienced today.
> 
> I expect the rate of inflation will be back to 2% or lower in 6 months.


But we still had a significant jump recently, and that will be problematic.


----------



## MrMatt

sags said:


> House prices are not included in the CPI. Owning a home isn't considered a necessity.
> 
> Rising home prices don't negatively affect people who already own one, just as rising super yacht prices don't affect people are are never going to buy one.
> 
> What matters is inflation on goods and services that people need to survive.


The cost of housing is rising dramatically, they're trying to hide it with rent controls.

Face it cost of living is WAY higher than it was a few years ago. Personally my food budget is up a lot vs 3 years ago.


----------



## nathan79

sags said:


> House prices are not included in the CPI. Owning a home isn't considered a necessity.
> 
> Rising home prices don't negatively affect people who already own one, just as rising super yacht prices don't affect people are are never going to buy one.
> 
> What matters is inflation on goods and services that people need to survive.


I'm aware of that, but owning a home is an aspiration for the majority of Canadians. Owning a super yacht isn't.

The CPI also does not include used cars, but not everyone lives near a bus stop or is capable of walking everywhere they need to go.


----------



## Ukrainiandude

Fed cannot afford to delay rate hikes anymore they are so behind the curve. They have to kill inflation. The lower income households in America are being killed right now .


----------



## off.by.10

MrMatt said:


> The cost of housing is rising dramatically, they're trying to hide it with rent controls.


That's nothing new. It's been going on for decades around here. And they wonder why there's a dire lack of rentals and why all the ones they call affordable are poorly maintained.


MrMatt said:


> Face it cost of living is WAY higher than it was a few years ago. Personally my food budget is up a lot vs 3 years ago.


Perhaps it's because I cook a lot but it has not seemed that bad for me. I noticed mainly meat/chicken/fish but not specifically the last two years.


----------



## MrMatt

off.by.10 said:


> That's nothing new. It's been going on for decades around here. And they wonder why there's a dire lack of rentals and why all the ones they call affordable are poorly maintained.
> 
> Perhaps it's because I cook a lot but it has not seemed that bad for me. I noticed mainly meat/chicken/fish but not specifically the last two years.


I cook a lot, I eat out/order in maybe 2x/month, which is VERY low for my area.


----------



## peterk

I just put in my order, attempting to buy a new vehicle for $45,000... The back order estimated wait time is 10 months. To buy one "off the lot", if they have any at all, is +$10,000 markup.

Thinking ahead a few years, new vehicle demand is sure only going to rise a lot since many of people have deferred buying since the start of covid. Into 2022-2024 these people will be looking to buy, but they should've been 2020-2021 customers.

Then in 2022-2025 will be the used vehicle buyers looking for a 2020-2021 model, but they'll hardly exist for sale used because production was so low for the last two years (and probably low in 2022 too).


----------



## like_to_retire

peterk said:


> Thinking ahead a few years, new vehicle demand is sure only going to rise a lot since many of people have deferred buying since the start of covid. Into 2022-2024 these people will be looking to buy, but they should've been 2020-2021 customers.


Agreed, and this is only a small example of the effect that COVID will have in the next few years, making things like GDP and inflation difficult to predict.

ltr


----------



## MrMatt

off.by.10 said:


> That's nothing new. It's been going on for decades around here. And they wonder why there's a dire lack of rentals and why all the ones they call affordable are poorly maintained.


Nobody wonders why there is a lack of rentals, the government is actively hostile to landlords, so people invest in other places. 
Why deal with the headaches of residential real estate, were you can't protect your investment, have limited ability to make people pay or cover damage, and if you have long term tenants you'll be forced to rent below market rates.
If you want real estate, go commercial as they don't have those anti-landlord policies.


----------



## m3s

sags said:


> The inflation is temporary and will decline as the supply chains are reopened.
> 
> The good news is that cost of living increases and higher wage gains are locked in as inflation falls.


You don't understand what the % rate of change is. Why am I not surprised

Inflation rate falling is not deflation sags

Inflation is not good for GICs


----------



## londoncalling

Inflation at 7%! Here’s why I’m not running for the hills (yet)! – Early Retirement Now 

Although this link was created almost a month ago I found it helpful to read some thoughts that are differ slightly from my own take on the current inflationary environment. In particular I liked the explanation on how long it will take to drop below the target rate of 3%


----------



## Covariance

londoncalling said:


> Inflation at 7%! Here’s why I’m not running for the hills (yet)! – Early Retirement Now
> 
> Although this link was created almost a month ago I found it helpful to read some thoughts that are differ slightly from my own take on the current inflationary environment. In particular I liked the explanation on how long it will take to drop below the target rate of 3%


It's an interesting take and quite rightly points out how the oft quoted year over year number will lag for some time.


----------



## londoncalling

Fed's Bullard says the central bank's 'credibility is on the line,' needs to 'front-load' rate hikes (cnbc.com) 

PPI numbers out today and again higher than analysts estimated. Canadian inflation data out tomorrow. Canada gets to go first so I expect a .25% increase to interest rates. I think .5% is what is needed from both BOC and Fed but won't happen for fear of spooking the markets. Many are saying we have already seen a correction for many stocks but looking at the charts they are not much lower than they were 6 months ago. Obviously tech has seen the greatest pullback but others like SBUX and FDX have seen significant drops from 52 week highs.


----------



## m3s

5.1% while RE is up 25% #InflationNotGoodForGIC


__ https://twitter.com/i/web/status/1493947376972845058


----------



## londoncalling

I was sure the rate would be higher than the estimate which has been the trend with analysts as of late. Hoping for lower inflation does not make it so.


----------



## Ukrainiandude

*Government doesn’t want to harm ‘mom and pop’ real estate investors, housing minister says*








theglobeandmail.com


----------



## like_to_retire

Ukrainiandude said:


> *Government doesn’t want to harm ‘mom and pop’ real estate investors, housing minister says*
> 
> 
> 
> 
> 
> 
> 
> 
> theglobeandmail.com


 paywall - can't read.........


----------



## nathan79

> As home prices spiral out of control, Canada’s federal Housing Minister said his government does not want to do anything that would harm “mom and pop” real estate investors.
> 
> “Small-time landlords do add to the rental stock,” Ahmed Hussen, the Minister of Housing and Diversity and Inclusion, said in a recent interview. “They provide rental stock to Canadian families and individuals. And so we don’t want to negatively affect them because they are actually providing a rental service to a lot of people.”
> 
> Individual investors are responsible for 20 per cent of all home purchases in the country, according to recent data from the Bank of Canada, and many of them rent out their properties for income.
> 
> But with the country’s typical home price 41 per cent more expensive than in January, 2020, individual investors are increasing competition for properties and contributing to the rise in home prices.
> 
> Mr. Hussen said “a lot of those Canadians” turn around and “rent their newly acquired properties and provide more rental units that make it possible for Canadian families and individuals to rent.”
> 
> “There’s nothing wrong with that,” he said.
> 
> As part of the federal government’s attempts to slow home price increases, it is reviewing down payment requirements for investors. The Liberal Party unveiled that plan during last year’s election campaign.
> 
> Liberals’ proposed cut to federal mortgage insurance rates won’t make housing more affordable, experts say
> 
> Liberals pledge to ban blind bidding as home prices soar
> 
> Asked whether the down payment requirement for rental properties should be higher than 20 per cent of the purchase price, Mr. Hussen said he could not answer that question and said he did not want to “prejudge” the budget process.
> 
> The federal budget is expected to provide details on how the Liberal Party’s 2021 campaign platform will be turned into government policy. It is not known when the budget will be unveiled.
> 
> The bank regulator, the Office of the Superintendent of Financial Institutions, does not have specific rules for investment properties, but an OSFI spokeswoman said the regulator expects banks to “accurately measure and underwrite the risks they may take on.”
> 
> The federal mortgage insurer, Canada and Mortgage Housing Corp., only provides mortgage insurance on investment properties if borrowers make a down payment of at least 20 per cent on rental properties that have two to four units and cost less than $1-million. Two of the large Canadian banks, Royal Bank of Canada and Bank of Montreal, said they require investors to make a 20-per-cent down payment on rental properties.
> 
> The federal government and Housing Minister have been looking for ways to slow the quick rise in home prices and help young Canadians buy homes.
> 
> Mr. Hussen has been directed by Prime Minister Justin Trudeau to work on a temporary ban on purchases by foreign buyers, as well as an anti-flipping tax on home buyers who sell a property within 12 months of purchasing it.
> 
> “This will reduce speculative demand in the marketplace and help to cool excessive price growth,” the minister’s press secretary, Arevig Afarian, said in an e-mailed statement.
> 
> Over the past three decades, individual investors have been providing the majority of Canada’s new rental homes. They helped fill a shortfall in rental properties when the supply of homes that were specifically built to rent started to decline in the 1990s.
> 
> _Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. __Sign up today__._


----------



## diharv

The foreign buyers are not the problem. Lack of supply and years of easy money. Supply will just get tighter because nobody will sell because, well, you have to live somewhere. Real estate is now a commodity. Sheesh, mom and pop real estate investors.


----------



## damian13ster

If prices go down and those who overleveraged themselves lose their shirt, the house won't disappear. It will simply become cheaper. 
The idea that you hurt housing market by not jacking up prices every year is insane


----------



## doctrine

m3s said:


> 5.1% while RE is up 25% #InflationNotGoodForGIC


Not every Canadian is exposed to exploding real estate costs at the same time, so the national rate isn't reflective of what is happening in real time. For those who are buying housing today, or renting a property today, their housing costs are up 25-100% year over year, easily. You see, not only are absolute housing prices 28% higher, but mortgage interest rates are close to 50% higher - so your interest costs today on a new real estate transaction can be *90%+ higher* year over year. That is a massive amount of money going to the banks and mortgage bond holders and real estate agents.

Given the trend with both housing prices and interest rates, it seems unlikely inflation will be abating anytime soon. Let's not forget energy prices are at record levels too.


----------



## Ukrainiandude

damian13ster said:


> If prices go down and those who overleveraged themselves lose their shirt, the house won't disappear. It will simply become cheaper.
> The idea that you hurt housing market by not jacking up prices every year is insane


Unfortunately I got stuck in this freezing authoritarian country with double digits inflation, poorly developed infrastructure, high taxes (especially property) and unavailable health care system. 
My brother in Ukraine bought a brand new (not used junk that they sell here) two bedroom condo in capital city with his five year worth of savings. In this country with stupid government financial policies you have get into thirty years of bank’s slavery to buy anything or rent for your life. 
The only negative thing in Ukraine currently is that western countries for some reason propagate this BS about “imminent” Russian invasion. This western misinformation hurts only Ukraine and no one else. Ukraine doesn’t need enemies with such “friends“.
Plus Ukraine doesn’t have this two year long covid nonsense.


----------



## Spudd

Ukrainiandude said:


> Unfortunately I got stuck in this freezing authoritarian country with double digits inflation, poorly developed infrastructure, high taxes (especially property) and unavailable health care system.
> My brother in Ukraine bought a brand new (not used junk that they sell here) two bedroom condo in capital city with his five year worth of savings. In this country with stupid government financial policies you have get into thirty years of bank’s slavery to buy anything or rent for your life.
> The only negative thing in Ukraine currently is that western countries for some reason propagate this BS about “imminent” Russian invasion. This western misinformation hurts only Ukraine and no one else. Ukraine doesn’t need enemies with such “friends“.
> Plus Ukraine doesn’t have this two year long covid nonsense.


If you're still a Ukrainian citizen I'm sure you could move back.


----------



## MrMatt

londoncalling said:


> PPI numbers out today and again higher than analysts estimated.


Families and armchair analysts have known inflation has been stupidly high for months.
Every time I go out, I hear about how costs are up.
I work from home and I don't hear much, but at my kids hockey, home depot, Costco (the only stores I physically go into) It's all about the cost of things.
The sports leagues in particular are really tight, they lost play time, and their costs are increasing, and they really don't want to hike costs to participate. 

Everyone knows costs are going up, even if the "experts" say that it's only minor and transitory.


----------



## MrBlackhill

The issue with the wording "transitory" is that in some sense they can't be wrong.

Inflation will come back down to 2% at some point in the future.

So the current inflation will have been "transitory" for... 3 years? 4 years? 5 years? 10 years?

How long can it be to still be qualified as "transitory"?

I think high inflation lasting 3 years is still qualified as "transitory".

I mean, 2021 is the very first year of high inflation with 4.8%. The 2020 inflation was... 0.73%.


----------



## Ukrainiandude

how Canada statistics calculated inflation rate? Do we have a list of goods and services and prices used available with the formula? I mean the methodology should not be a secret, everyone should be able to recreate the same results. 
there is lie , big lie and statistic.


----------



## MrBlackhill

Ukrainiandude said:


> how Canada statistics calculated inflation rate? Do we have a list of goods and services and prices used available with the formula? I mean the methodology should not be a secret, everyone should be able to recreate the same results.
> there is lie , big lie and statistic.


It is no secret.






The Canadian Consumer Price Index Reference Paper


This Canadian Consumer Price Index (CPI) Reference Paper provides an overview the Canadian CPI. It is intended for a varied audience, ranging from users interested in general information to those requiring more technical or theoretical details. As such, it explains all the important aspects of...




www150.statcan.gc.ca


----------



## londoncalling

Here's a list of January inflation rates for selected Canadian cities (msn.com)

Here are the numbers across the country.

It should come to no surprise that these numbers correlate closely to the real estate prices for January as well. Provinces that saw higher increase in home values also saw higher rate of inflation. I saw a chart yesterday that showed yoy increase as a percentage by province but can't find it currently so pasted this map instead. It provides a lot of search functionality by location.

National Price Map – CREA


----------



## Ukrainiandude

MrBlackhill said:


> It is no secret.
> 
> 
> 
> 
> 
> 
> The Canadian Consumer Price Index Reference Paper
> 
> 
> This Canadian Consumer Price Index (CPI) Reference Paper provides an overview the Canadian CPI. It is intended for a varied audience, ranging from users interested in general information to those requiring more technical or theoretical details. As such, it explains all the important aspects of...
> 
> 
> 
> 
> www150.statcan.gc.ca


All I got,


----------



## Ukrainiandude

All I wanted is a list of products, and services, including prices use, and percentages of the basket. 
it should be easy enough for everyone to recreate.
if cheese was $10 last year and $12 this year it’s ~20% inflation. If house was $200k and $240 now that’s 20% inflation, if gas was $0.80 and $1.40 now that’s 75% inflation.
I want to do similar math and get 5% 
Everything around is 10-30% plus more expensive, but somehow statistics get 5%


----------



## MrBlackhill

Ukrainiandude said:


> All I wanted is a list of products, and services, including prices use, and percentages of the basket.


For the weights, click add/remove data and you can play however you like with the complete database.




__





Add/Remove data - Basket weights of the Consumer Price Index, Canada, provinces, Whitehorse, Yellowknife and Iqaluit


Basket weights of major components, gasoline, and selected special aggregates of the Consumer Price Index (CPI) basket, for Canada, provinces, Whitehorse, Yellowknife and Iqaluit, last 5 years of the CPI basket. Includes price period of the weights as either weights at basket link month prices...




www150.statcan.gc.ca





For the CPI, click add/remove data and you can play however you like with the complete database.




__





Add/Remove data - Consumer Price Index by product group, monthly, percentage change, not seasonally adjusted, Canada, provinces, Whitehorse, Yellowknife and Iqaluit


Monthly indexes and percentage changes for major components and special aggregates of the Consumer Price Index (CPI), not seasonally adjusted, for Canada, provinces, Whitehorse, Yellowknife and Iqaluit. Data are presented for the corresponding month of the previous year, the previous month and...




www150.statcan.gc.ca


----------



## Covariance

@Ukrainiandude seasonally adjusted figures will require a little more computation to reproduce.


----------



## Ukrainiandude

Talking is cheap. Just do your job quietly and swiftly. It’s like announcing every single step.
*Bank of Canada deputy signals rate hike coming in two weeks *
Markets are pricing in as many as seven increases in borrowing costs over the next 12 months
Bank of Canada deputy signals rate hike coming in two weeks


----------



## james4beach

I can believe one rate hike, but I'll believe two rate hikes when I see it.


----------



## doctrine

Fixed mortgage interest rates are up again as the 5 year Canadian bond goes higher towards 4 year highs. Markets are definitely pricing in a lot of rate hikes, whether they come to pass or not, but you think something would fundamentally have to drive down inflation in order to take some off the table. Can anyone think of anything that is actually cheaper than a year ago?


----------



## Ukrainiandude

doctrine said:


> Can anyone think of anything that is actually cheaper than a year ago?


Even milk went up 10% or so, but Canada stat BS people with 5% inflation.


----------



## londoncalling

james4beach said:


> I can believe one rate hike, but I'll believe two rate hikes when I see it.


My guess is two, possibly three back to back if they go .25%. If they are serious about trying to get inflation under control that is what is needed. I wasn't much of a consumer last time we had double digit interest rates but this no to low interest rate environment has created some bubbles that need to be deflated before they pop and we have no mechanisms left to get out of the next recession.


----------



## Covariance

Ukrainiandude said:


> Talking is cheap. Just do your job quietly and swiftly. It’s like announcing every single step.
> *Bank of Canada deputy signals rate hike coming in two weeks *
> Markets are pricing in as many as seven increases in borrowing costs over the next 12 months
> Bank of Canada deputy signals rate hike coming in two weeks


BoC is March 2 and April 13. Hard circle the calendar for 25bps each. And then we will take stock of the situation.

As I've noted elsewhere, expect the US to go 25 each meeting until July. Then take stock of the situation.


----------



## james4beach

londoncalling said:


> My guess is two, possibly three back to back if they go .25%. If they are serious about trying to get inflation under control that is what is needed.


IMO the central bank(s) are *not* serious about controlling inflation. That's why I don't think they will raise enough.

Given the choice, they will always prefer inflation over deflation.


----------



## MrMatt

james4beach said:


> IMO the central bank(s) are *not* serious about controlling inflation. That's why I don't think they will raise enough.
> 
> Given the choice, they will always prefer inflation over deflation.


Yeah, I know they were using the term "The Great Reset", but I thought it was more of a silly conspiracy theory.

We should prefer inflation over deflation, but the inflation is too high, it's causing a lot of damage, that's only going to get worse.


----------



## ian

doctrine said:


> Fixed mortgage interest rates are up again as the 5 year Canadian bond goes higher towards 4 year highs. Markets are definitely pricing in a lot of rate hikes, whether they come to pass or not, but you think something would fundamentally have to drive down inflation in order to take some off the table. Can anyone think of anything that is actually cheaper than a year ago?


I can only think of one thing. Red wine from Argentina. I believe that it is attributable to their currency.


----------



## Ukrainiandude

See if you can get 5% 
official link from scam Canada.
*Personal Inflation Calculator





Personal Inflation Calculator


This interactive calculator allows users to create a personal inflation time-series. Users enter dollar amounts in the common expense categories to produce a personalized inflation rate, which will more closely approximate an individual’s inflation experience than the average measure of...




www150.statcan.gc.ca




*


----------



## MrBlackhill

I barely spend on gas. And I own a property.


----------



## nathan79

6.5%


----------



## londoncalling

Was too lazy to look up all expenditures but based on some knowns and good estimates I came in at 4.8% YOY for Jan 2022. Prior to this the last time we scored above official inflation rate was in June of 2020. Fun to play around with varying data points and see what areas see the biggest changes. My guess is that this is a moving target based on price differentials and changes in spending. 

A few observations.

Groceries have seen more inflation than eating out but from a cost standpoint in most cases it is still cheaper to eat at home. Time to start eating out more.  
Home ownership and fuel will see the biggest impact on inflation rate. NO surprise here. 
Having 0 childcare costs reduces ones inflation rate. 
Like everything the past couple years, the pandemic skews inflation for items like entertainment, home maintenance etc
Certain age group will will likely see differences based on where they are spending.

I am grappling with how to use this tool beyond an observational and entertainment function. We have already made lifestyle adjustments in some areas. I guess if I tracked my monthly expenses more closely I could see where to make adjustments. Seeing as we have 0 consumer debt, do not fall into lifestyle inflation (when we get increases in earning we proportionately increase our savings rate or even tilt the allocation more toward saving). Although not the primary purpose of the calculator, the option to add a few data points such as change in income, mortgage rate, HELOC etc, interest rates on consumer debt would should a truer picture in changes in spending power. Nonetheless, an interesting calculator and resource.


----------



## m3s

MrMatt said:


> Yeah, I know they were using the term "The Great Reset", but I thought it was more of a silly conspiracy theory.


You can see it in action in the US

I'm just going off second hand info here.. but it appears the Fed's "money printing" led to major corps buying up RE. At the start of the pandemic I expected RE prices to crash. You would think RE would crash.. but instead we have massive bidding wars in the US. Why?

The Fed announced buying mortgage-backed securities for the first time during the pandemic. Major investors (Blackrock) RE buying increased dramatically during the pandemic. Blackrock etc are major beneficiaries of Fed's purchases of corporate bonds and mortgage-backed securities

Local landlords sold RE during the pandemic to the major investors like Blackrock who were benefitting directly from the Fed's expanding balance sheet. Now if RE prices drop due to Fed increasing rates.. homeowners with negative equity could also be squeezed to sell to these Blackrocks

Conspiracy or smoking gun? You tell me


----------



## MrBlackhill

Turns out the inflation will continue with this situation of war.


----------



## Faramir

This is one long thread but I am always of the mindset that the government will do whatever it takes to minimize what their stats show. I trust Stats Canada far more than the BLS in the USA, which has totally politicized the inflation stats. Show lower inflation and you get a higher net GDP results. That makes POTUS happy. And of course lower inflation stats mean less social security to pay out. Which is why I like to go to Shadow Stats. They make a good case for much higher inflation that we are being told. Inflation is NEVER benign but our fearless leaders want to scam us to think so. Government LOVE inflation. Money gets cheaper and its easier to pay debt.


----------



## james4beach

MrBlackhill said:


> Turns out the inflation will continue with this situation of war.


I think this makes the central banks less likely to raise rates. I'll bet they won't come anywhere close to the 6 or 7 rate hikes talked about this year.

Maybe one or two rate hikes, if we're lucky.


----------



## Covariance

james4beach said:


> I think this makes the central banks less likely to raise rates. I'll bet they won't come anywhere close to the 6 or 7 rate hikes talked about this year.
> 
> Maybe one or two rate hikes, if we're lucky.


More than one or two. As long as oil and the US economy are strong the Canadian rates can keep moving up. Moving up the overnight rate doesn't mean the 5yr moves by the same amount (and drive the all important 5yr mortgage). It just flattens the curve. That said, I agree - can't see 6 this year.


----------



## Covariance

m3s said:


> You can see it in action in the US
> 
> I'm just going off second hand info here.. but it appears the Fed's "money printing" led to major corps buying up RE. At the start of the pandemic I expected RE prices to crash. You would think RE would crash.. but instead we have massive bidding wars in the US. Why?
> 
> The Fed announced buying mortgage-backed securities for the first time during the pandemic. Major investors (Blackrock) RE buying increased dramatically during the pandemic. Blackrock etc are major beneficiaries of Fed's purchases of corporate bonds and mortgage-backed securities
> 
> Local landlords sold RE during the pandemic to the major investors like Blackrock who were benefitting directly from the Fed's expanding balance sheet. Now if RE prices drop due to Fed increasing rates.. homeowners with negative equity could also be squeezed to sell to these Blackrocks
> 
> Conspiracy or smoking gun? You tell me


feds going to exit agency MBS this year (already stopped buying) and swap for treasury on their balance sheet. You can already see it in the US mortgage rates.


----------



## m3s

Covariance said:


> feds going to exit agency MBS this year (already stopped buying) and swap for treasury on their balance sheet. You can already see it in the US mortgage rates.


Are the mortgage rates climbing then?

That would move along the next phase of the "Great Reset" where homeowners get pressured and squeezed into selling to the Blackrocks

No more MBS, raising rates, negative equity homeowners, Blackrock to the rescue. You'll own nothing and you'll love it - Klaus


----------



## Covariance

m3s said:


> Are the mortgage rates climbing then?


Yes they have been. For clarity, when I said feds I meant Federal Reserve, ie US not CAD.


----------



## m3s

I'm talking about the US as well I'm just not tracking mortgage rates

If mortgage rates climb too much Americans will start to be squeezed out. Watch for Blackrock and other major corporations to continue buying up US RE

Not sure about Canada. Looks like a massive RE bubble except for Alberta with +$100 oil and a balanced budget


----------



## damian13ster

Meanwhile oil up at 110$. Carbon tax increasing soon. 
There is a bloodbath and middle class Canadians are the victims


----------



## MrBlackhill

Rate increased to 0.50%


----------



## damian13ster

Canadian gas prices reach 'record territory' amid attack on Ukraine


Canadian gas prices have reached record territory and show no signs of easing as Russia’s attack on Ukraine puts even greater pressure on the oil market.




www.ctvnews.ca





It is kind of hilarious that mass media in Canada lacks simple understanding of interest rates, exchange rate, and inflation, yet is still allowed to post drivel like that for Canadians to read


----------



## londoncalling

MrBlackhill said:


> Rate increased to 0.50%



I was in a meeting this morning when I got an alert the rate had increased .5% instead of an increase to .5%. Definitely a bit of a shocker! 😯 The alert was quickly corrected but not before I had a chance to mention and show the meeting participants.


----------



## sags

Revenues from oil and increased sales taxes from higher prices must be pouring into Ottawa..

It might be a good time to initiate a UBI to help Canadians manage inflation. It could be temporary support on a trial basis for as long as needed.

A small amount to cover the additional costs of inflation........say $300 per month per person to cover increased costs of basics should suffice.

I don't think it viable for government to do nothing for people struggling with their monthly bills even as government coffers swell with extra revenues.


----------



## KaeJS

UBI doesn't work.


----------



## sags

Complaining loudly and doing nothing doesn't work.


----------



## kcowan2000

UBI will put small businesses out of the labour pool.


----------



## KaeJS

sags said:


> Complaining loudly and doing nothing doesn't work.


Agreed. That is why our government should do something. But UBI is not the solution.


----------



## peterk

kcowan2000 said:


> UBI will put small businesses out of the labour pool.


That's the point.


----------



## sags

People will quit their job because they collect $300 a month ?


----------



## KaeJS

How will the government afford to give every person $300 a month? It will need to be paid back at some point. You can't just keep inflating the debt away. 

It is not a solution. It's a Band-Aid that has worse longer term implications. It also certainly won't help the housing crisis.


----------



## Covariance

sags said:


> People will quit their job because they collect $300 a month ?


Some, yes or not look for work.


----------



## Covariance

KaeJS said:


> How will the government afford to give every person $300 a month? It will need to be paid back at some point. You can't just keep inflating the debt away.
> 
> It is not a solution. It's a Band-Aid that has worse longer term implications. It also certainly won't help the housing crisis.


The logic is that tax revenue, not incremental debt, will fund a minimal standard of living. The issue of course is who will pay the taxes to carry everyone else.


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## KaeJS

Yes, and there is no real way to have your cake and eat it, too.

If businesses carry the load for others, they will reduce employees, stall wages, and increase prices.

If the people pay for it... Well... Then it doesn't make sense to take from people to give to people. And if you take from the 1%, most of them own businesses...


----------



## Covariance

KaeJS said:


> Yes, and there is no real way to have your cake and eat it, too.
> 
> If businesses carry the load for others, they will reduce employees, stall wages, and increase prices.
> 
> If the people pay for it... Well... Then it doesn't make sense to take from people to give to people. And if you take from the 1%, most of them own businesses...


It’s not businessss. Personal income tax is about half of GOC tax revenue. Corporations around 15%.


----------



## diharv

sags said:


> Revenues from oil and increased sales taxes from higher prices must be pouring into Ottawa..
> 
> It might be a good time to initiate a UBI to help Canadians manage inflation. It could be temporary support on a trial basis for as long as needed.
> 
> A small amount to cover the additional costs of inflation........say $300 per month per person to cover increased costs of basics should suffice.
> 
> I don't think it viable for government to do nothing for people struggling with their monthly bills even as government coffers swell with extra revenues.


How can government coffers be swelling? The outflow paying for this governments squandering outpaces inflow and will forever. There's no "extra" free money to fritter away.


----------



## MrBlackhill

KaeJS said:


> Then it doesn't make sense to take from people to give to people.


Why? I have absolutely no issue with my tax rate on my 6-figure income.

And if I made $500,000 net per year, would I really care if you took away 1% more down to $495,000? I wouldn't. And I'd be happy that it gets redistributed to help the Early Childhood Educators taking care of our children.


----------



## KaeJS

MrBlackhill said:


> Why? I have absolutely no issue with my tax rate on my 6-figure income.
> 
> And if I made $500,000 net per year, would I really care if you took away 1% more down to $495,000? I wouldn't. And I'd be happy that it gets redistributed to help the Early Childhood Educators taking care of our children.


Suit yourself.


----------



## MrMatt

MrBlackhill said:


> Why? I have absolutely no issue with my tax rate on my 6-figure income.
> 
> And if I made $500,000 net per year, would I really care if you took away 1% more down to $495,000? I wouldn't. And I'd be happy that it gets redistributed to help the Early Childhood Educators taking care of our children.


And what if it was used to fund something you don't believe in?
Maybe instead of paying for ECE's it was used to for a multimillion dollar photo op.
Or to build Infrastructure in Russia or China?

Maybe the free heroin they give away in some places. Or to fund the fight against veterans benefits that they're owed?

Lets not forget that government tends to be a very expensive and wasteful way to do anything.
Sure it has it's place, but why not skip the middleman and donate to charity yourself?
Go donate to the schools so they have the materials they need, playgrounds, sports equipment, air conditioning etc.


----------



## MrBlackhill

MrMatt said:


> And what if it was used to fund something you don't believe in?


It's used to pay our government and its initiatives. A government elected by democracy by a majority of people who believe that this government will either make the best decisions or the least worst decisions.

Myself and each individual obviously can't agree with how every single tax dollar will be used... But, hey, I prefer living in a country with a government and a democracy than living in a country with no government and/or no democracy.

And no, I don't agree with how every single tax dollar is spent. And yes, there's money wasted by the whole process and the government employees.

I guess you have a better solution instead of whining about the disadvantages of our system? I hope you also see that there are advantages to live in a country with a government and a democracy.

I don't know about you, but I'm witnessing many great countries where I'd be happy to live in with a great quality of life and they all have a government and a democracy... wasting their money and using the tax revenues on initiatives that obviously not every individual agree, even if they voted for that elected party?


----------



## james4beach

@MrBlackhill there are some people who aren't on board with the idea of the public paying (taxes) to fund national programs, services, etc. Some people also don't believe in the legitimacy of government.

Pretty wacky IMO. My hope is that most of these people move to the US -- many do -- and leave the rest of us to live in a country with good programs and services.

Those who believe in minimizing tax payments, because they don't need public services, really should go the the US. I would encourage them to do so, and I'll even share tips for relocating and what I've learned about moving investments and assets into the US.

@MrMatt given your posting history and your values, I think you may be happier in the US.

I have never been disappointed with the taxes I paid. I've always felt that I received good value for the tax $, whether I was earning 50K or 200K a year.


----------



## hboy54

I have come to see government spending as approximately half the spending benefits everyone, one quarter benefits someone in a fair and honest way, and the last quarter goes to various forms of theft and waste. Unfortunately we have to pay that last quarter to avoid being a place like Somalia.


----------



## sags

Alberta Premier Kenney announced a balanced budget due to a high oil price windfall. He will probably give cash to Albertans to buy votes.

Canada can spend their windfall aiding stressed consumers, even if only for a trial run until supply chain disruptions and war in Ukraine get sorted out.


----------



## MrMatt

MrBlackhill said:


> I guess you have a better solution instead of whining about the disadvantages of our system?


Personally I'm advocating for less government, and to withdraw from functions that aren't part of the basic responsibilities of government, to the extent possible.

I think we should all be able to see that the government can't possibly provide all things to all people, in my opinion it delivers incredibly poor value for the massive amount it spends..

As long as they feel okay handing out millions or billions of our tax dollars, to private companies, or foreign governments, they have too much money.
I do believe there are cases for strategic funding of initiatives, but so much of what our government does isn't really the job of government.

We spend way too much on things that do not justify taking those funds from family. 
It is absolutely sickening that the government takes money from people who are earning less than a living wage. That's when you know they've gone too far. 
I think the tax rate should be 0% until a living wage, then progressively increase, and under no circumstances should it go past 50%.

I just don't think that government provides services that justify taking half my work product.


----------



## MrBlackhill

MrMatt said:


> Sure it has it's place, but why not skip the middleman and donate to charity yourself?
> Go donate to the schools so they have the materials they need, playgrounds, sports equipment, air conditioning etc.


Because the human nature is egocentric.



MrMatt said:


> Personally I'm advocating for less government, and to withdraw from functions that aren't part of the basic responsibilities of government, to the extent possible.


Turns out the best countries in the world for quality of life are the ones with the highest tax rates.


----------



## MrMatt

james4beach said:


> @MrMatt given your posting history and your values, I think you may be happier in the US.


Possibly, at one point in time, but I think their two party system has deeply divided the country. 
Their partisan split has pervaded every aspect of their government, and that's a problem.

I don't think that Canada is as far down this path, and we have a strong history of non partisan institutions.
I hold out hope that people look to the US and choose to do better.

Hopefully Trudeau will leave politics and we get someone who is more interested in unifying than dividing our country.


I've posted extensively why I think Trudeau is particularly bad, take the recent example of suggesting Jewish MPs support Swastika waving.. like come on, I can't believe anyone could make such an accusation with a straight face, then to walk out without offering an apology.. That level of disrespect is unheard of.


----------



## sags

Didn't Mr.Matt advocate for Trudeau meeting with the truck convoy organizers to discuss taking over the government ?


----------



## hboy54

MrMatt said:


> I just don't think that government provides services that justify taking half my work product.


This is under your control. Work less. That was my solution 2 decades ago when I decided that not enjoying my career and losing so much to taxes led to my retiring. Turns out all these years later that I am perhaps drifting towards a state where my MTR will be 50%, but it is all passive income and not sweat of the brow.


----------



## MrMatt

sags said:


> Didn't Mr.Matt advocate for Trudeau meeting with the truck convoy organizers to discuss taking over the government ?


Nope.
I advocated for an appropriate government representative meeting with the protestors representatives to understand their concerns.

Just like he did for BLM when he joined in with their protest.


----------



## james4beach

MrMatt said:


> Just like he did for BLM when he joined in with their protest.


Protesters advocating for black lives never took the city hostage, didn't cause chaos by blocking all streets, harassing the citizens all day and night, seizing multiple border crossings, and demanding that the government be dissolved.

The only demonstration or movement that's done this in Canada is the far-right convoy.


----------



## MrMatt

james4beach said:


> Protesters advocating for black lives never took the city hostage, didn't cause chaos by blocking all streets, harassing the citizens all day and night, seizing multiple border crossings, and demanding that the government be dissolved.
> 
> The only demonstration or movement that's done this in Canada is the far-right convoy.


I chose BLM because they had widespread violence across the US, and many of their protests were far worse.

Maybe you didn't notice, but in some US, like Portland, cities they had violent protests for months.








Portland mayor: Time to ‘take our city back’ from violent protesters


The mayor of Portland, Ore. has asked for the public’s help putting an end to the violent protests that have ravaged his city since Black Lives Matter riots first erupted last spring. “They want to…




nypost.com


----------



## james4beach

MrMatt said:


> I chose BLM because they had widespread violence across the US, and many of their protests were far worse.
> 
> Maybe you didn't notice, but in some US, like Portland, cities they had violent protests for months.
> 
> 
> 
> 
> 
> 
> 
> 
> Portland mayor: Time to ‘take our city back’ from violent protesters
> 
> 
> The mayor of Portland, Ore. has asked for the public’s help putting an end to the violent protests that have ravaged his city since Black Lives Matter riots first erupted last spring. “They want to…
> 
> 
> 
> 
> nypost.com


Buddy, I lived in Portland, and there were anarchists causing trouble but it wasn't those protesting for black lives. Now you're just pointing to inaccurate tabloid papers meant to tickle the fancies of the Republicans. This is just more of your far-right propaganda, which you - *astoundingly* - try to pollute every single topic with.


----------



## MrMatt

james4beach said:


> Buddy, I lived in Portland, and there were anarchists causing trouble but it wasn't those protesting for black lives.


I know, you lived through it, and refuse to accept that the BLM riots were violent.

Why didn't they try to drive out the instigators like the Truckers did?
- I do think that if they took proper action against terrorist groups like Antifa some of the violence could have been prevented.

Why didn't law enforcement step in and take control?



> Now you're just pointing to inaccurate tabloid papers meant to tickle the fancies of the Republicans. This is just more of your far-right propaganda, which you - *astoundingly* - try to pollute every single topic with.


Not every single topic, maybe I shouldn't be so easy to bait.

yeah, tabloid papers like CNN or the NY Times.








What Do Portland Protesters Want, and How Have the Police Responded?


Eight weeks after the death of George Floyd, here’s a look at why longstanding protests in the city have recently intensified.




www.nytimes.com












Portland, Oregon, police challenged in 'really tough environment' as violence spikes | CNN


Like so many large cities across the United States, Portland, Oregon, is currently engulfed in fighting a second pandemic on top of Covid-19. City officials say Portland is seeing "a stunning amount of gun violence" at a time when police are experiencing a strain on resources.




www.cnn.com





Again you're attacking the type of newspaper, and me, but not the actual content.


You can't even define far-right. Sure I'm right of the far left, and yes I'm anti-communist.


----------



## MrBlackhill

Wow, if I were a more "active investor", I would've reacted more fiercely to this Ukraine-Russia war situation. I would've sold a big part of portfolio to buy:

Energy ETF (such as XEG.TO)
Materials ETF (such as XMA.TO)
Agriculture ETF (such as COW.TO)
Gold ETF or Gold Miners ETF (such as CGL-C.TO, XGD.TO)
It was easy to see... Look at the sanctions, look at Russia main exports and look at how people behave in times of uncertainty (for gold).

That's why I bought XEG.TO last week and already +6% and it would've been more if I had reacted faster, meanwhile the market keeps crashing lower.

I wanted to sell some of my diversified positions to concentrate in those sectors... but I didn't.

I should've at least sold my few remaining momentum stocks which are crashing at the moment.


----------



## james4beach

MrBlackhill said:


> I should've at least sold my few remaining momentum stocks which are crashing at the moment.


Interesting, my growth and momentum stocks have actually rebounded pretty strongly and now my stock picking portfolio is back to matching the TSX index.

Some of my better positions continue to be: CSU, WCN, TRI, DSG, WSP


----------



## londoncalling

Warren Buffett explains how to invest in stocks when inflation rises (cnbc.com)

I have seen most of these Buffetisms before but they do serve as a reminder that we should look at real return as opposed to nominal return. As mentioned by another poster elsewhere we are again approaching an all time high for oil but still have a ways to go if we are to hit the true all time high. How many gave themselves a pat on the back after looking at their 2021 performance? How many will be able to achieve positive returns in 2022 after inflation? The market in 2022 thus far cannot be accused of being boring.


----------



## damian13ster

Huh, interesting.
For some reason those who voted for carbon tax aren't out in the streets celebrating gasoline prices getting above 2$/l?
That was the entire idea you voted for! Higher prices. Rejoice!


----------



## MrMatt

damian13ster said:


> Huh, interesting.
> For some reason those who voted for carbon tax aren't out in the streets celebrating gasoline prices getting above 2$/l?
> That was the entire idea you voted for! Higher prices. Rejoice!


They forgot that these high prices hurt them, and even more they'll hurt the poor.


----------



## james4beach

londoncalling said:


> How many will be able to achieve positive returns in 2022 after inflation?


I think it's a mistake to look at single year performance, whether it's nominal or after inflation.

One should only care about multi-year performance, like what's your CAGR over the last 10 years. And then, are you getting a positive return after inflation?

If you look at any shorter time frame, it's too easy to feel disappointed due to natural market volatility. A person's return in 2022 is almost meaningless, just as your return in February was meaningless (it doesn't have anything to do with your long-term results).


----------



## londoncalling

@james4beach 1 year performance is very short term for an investor and longer performance is what matters. Thanks for pointing out that short time frames are not as important as longer term results. The intent of my post was to point out that everyone is an investment genius when the market offers the returns we saw in 2021. To speak more directly to longer term results many may have been tricked into thinking (myself included) they are able to generate above average returns. Anybody who started investing after the great financial crisis has experienced abnormally low interest rates and amazing returns in the equity market as well as RE. This mindset has taken such a grip on investors that they are abandoning bonds and fixed income to chase yield and higher returns. My IPS includes achieving returns of 2% greater than inflation each year. In the past this has been easy to accomplish. When reviewing my IPS I would often glance over this point or if it did catch my attention I thought the bar was too low and consider raising the number. 2022 may point out the reality that the market doesn't go up every year and that there may be periods where we see poor performance in all sectors. However, capital preservation is a key principal to investing strategies and negative returns (real or nominal) are counter to capital preservation. How does one avoid this while staying invested? I will remain invested in this market as I am still in accumulation. Perhaps, I would act differently if I were at or near retirement. Many do not have COLA'd pensions outside of what the government provides. Having experienced high inflation rates in the past may make our current situation laughable for those that were around in the 1970s

Canada Inflation Rate 1960-2022 | MacroTrends


----------



## MrBlackhill

7.9% inflation in the US for February 2022... Imagine what will be that number for March 2022 with the war that just started in late February.


----------



## wayward__son

^^^ No worries, the Fed got us covered, 25 bps at a time


----------



## sags

To me.....collecting the tax only to return it to taxapayers is a waste of resources for administration.

I would prefer they collect the tax and build a fund to mitigate future damage due to climate change.

The costs are rising and as insurance companies withdraw their policy coverage, the government will be under increasing pressure provide the funds.


----------



## MrMatt

sags said:


> To me.....collecting the tax only to return it to taxapayers is a waste of resources for administration.
> 
> I would prefer they collect the tax and build a fund to mitigate future damage due to climate change.
> 
> The costs are rising and as insurance companies withdraw their policy coverage, the government will be under increasing pressure provide the funds.


I would prefer that they only take tax money they need, and make sure they leave enough with the citizens so they can survive. No tax until you make a living wage.

The government arguably only has the moral right to take money from the citizens if it needs it to provide for a benefit to the nation. Taking money they don't actually need is simply wrong.

Secondly climate change is only one problem. They should focus on others, lets say national defense, crime, healthcare, pandemic preparedness, and countless others.


----------



## m3s




----------



## sags

It doesn't look to me like central bank "printing" has lined consumer pockets with piles of cash that spurs demand for limited supplies of goods.

I think inflation is more likely driven by disruptions to the supply chains and worker shortages throughout the economy, and by circumstances beyond our control like the price of oil due to war or damage to crops due to climate change.

_At the end of December, 2021 the total debt outstanding in Canada (bottom line of the Statistics Canada credit market summary data table) was $10.017 trillion. At the end of December, 2020 the total debt outstanding was $9.392 trillion. In the 1 year period from the end of December, 2020 to the end of December, 2021 it increased by $624.8 billion. *This is an increase of 6.6%. *_






Update on the total (household, business, and all levels of government) debt numbers in Canada


The borrowing and spending binge by Canadian households, businesses, and governments (all levels) continues unabated. At the end of Dece...




owecanada.blogspot.com


----------



## sags

MrMatt said:


> I would prefer that they only take tax money they need, and make sure they leave enough with the citizens so they can survive. No tax until you make a living wage.
> 
> The government arguably only has the moral right to take money from the citizens if it needs it to provide for a benefit to the nation. Taking money they don't actually need is simply wrong.
> 
> Secondly climate change is only one problem. They should focus on others, lets say national defense, crime, healthcare, pandemic preparedness, and countless others.


It would be short sighted planning to depend on a "pay as you go" funding policy to mitigate damage from climate change.

The damage is happening and someone is going to pay to fix it...insurance companies, individuals, municipalities, Provinces, or the federal government.

As insurance companies are increasingly bowing out or limiting their exposure.......that leaves somebody else to pay the cost.


----------



## m3s

sags said:


> I think inflation is more likely driven by disruptions to the supply chains and worker shortages throughout the economy, and by circumstances beyond our control like the price of oil due to war or damage to crops due to climate change.


You think many things about inflation sags. You thought it was transitory. You thought it was good. You thought it was deflation

I listen to the people who have a history of being on the right side and they were bang on here again



sags said:


> It doesn't look to me like central bank "printing" has lined consumer pockets with piles of cash that spurs demand for limited supplies of goods.


When a central bank increases the supply of fiat they are in fact inflating it which causes inflation. Hence the very definition of the word

"An increase in the supply of money is the root of inflation, though this can play out through different mechanisms in the economy. Money supply can be increased by the monetary authorities either by printing and giving away more money to the individuals, by legally devaluing (reducing the value of) the legal tender currency, more (most commonly) by loaning new money into existence as reserve account credits through the banking system by purchasing government bonds from banks on the secondary market."

Supply chains, climate change, labour shortages and whatever other excuses you have are merely secondary factors to the root cause of inflating the supply of the fiat itself.

If we give everyone CAD it doesn't matter how much the climate changes. It's still not good for GICs


----------



## MrMatt

sags said:


> It would be short sighted planning to depend on a "pay as you go" funding policy to mitigate damage from climate change.


What is climate change damage?
Building on a floodplain and getting flooded?



> The damage is happening and someone is going to pay to fix it...insurance companies, individuals, municipalities, Provinces, or the federal government.


The person who wants to repair the damage should pay.



> As insurance companies are increasingly bowing out or limiting their exposure.......that leaves somebody else to pay the cost.


Good.
Maybe if insurance companies stopped covering high risk behaviour, people would stop doing it.


----------



## MrBlackhill

MrMatt said:


> What is climate change damage?











The Effects of Climate Change


Vital Signs of the Planet: Global Climate Change and Global Warming. Long-term effects of global climate change in the United States.




climate.nasa.gov


----------



## MrMatt

MrBlackhill said:


> The Effects of Climate Change
> 
> 
> Vital Signs of the Planet: Global Climate Change and Global Warming. Long-term effects of global climate change in the United States.
> 
> 
> 
> 
> climate.nasa.gov


Yeah, I know the effects, not sure what the damage that we have to save for is.
Sags is suggesting saving billions of dollars to pay for future things, I don't see why. 

Extended growing seasons in Canada, maybe a bit more irrigation, don't live in low lying areas.


Not really much to save for. I'd say make sure we have good infrastructure across the country.


----------



## sags

Inflation will continue to be higher, driven by the disruption of supply chains.



https://www.cbc.ca/news/world/china-covid-pandemic-trade-1.6385206


----------



## sags

Mr. Matt forgot about the fires in BC, Fort McMurray and other forested areas. He forgot about all the flooding in different areas of Canada.

We are past pretending that climate change doesn't exist or cause financial damage and are already paying the rising costs.

Pretending otherwise is short sighted wishful thinking.


----------



## james4beach

Any predictions on the inflation rate being reported tomorrow?

The last reading was 5.1% and my prediction for this one is 5.5%


----------



## nathan79

james4beach said:


> Any predictions on the inflation rate being reported tomorrow?
> 
> The last reading was 5.1% and my prediction for this one is 5.5%


Your guess seems reasonable. It will be drastically understated as usual.

Gas costs alone are sending my personal inflation rate over 5%, and I don't even drive a lot -- just about 15K per year. Add in food and everything else, I'm probably paying close to 10% more than a year ago. All while trying to save up for a house at the same time, and it just feels impossible to keep up, let alone make any progress.


----------



## MrBlackhill

5.7%


----------



## james4beach

nathan79 said:


> Gas costs alone are sending my personal inflation rate over 5%, and I don't even drive a lot -- just about 15K per year.


That's a ton of driving. An average of 41 km per day? Just curious, where you are going that takes this many km? Is it occasional super-long road trip vacations?

If it's for work, your employer should be reimbursing you for fuel costs required for work.


----------



## MrBlackhill

nathan79 said:


> I don't even drive a lot -- just about 15K per year


That's the average in Canada, so you drive average, so your personal inflation due to gas will be spot on with the CPI.

I consider I don't drive a lot because me and my wife we use the same car and we have family at 200 km away and yet we drive about 6,000 km per year, so we spend only about $500/year on gas. Even if gas price moves up +50%, that's not a big of an issue to us.


----------



## m3s

So we've gone from CNN "Why inflation can actually be good for everyday Americans and bad for rich people" to Bloomberg "Inflation stings most if you earn less than $300k" in a few months


__ https://twitter.com/i/web/status/1505292742993321993
From Jan 10 in this thread



londoncalling said:


> Why inflation can actually be good for everyday Americans and bad for rich people - CNN
> 
> Not sure how the headline identifies how inflation is bad for rich people. Also, there are a lot of assumptions around the positive results such as wage growth, appreciation of real estate etc.
> A lot of the article focuses on very near term trade offs.











Yes inflation is good for GICs as long as you eat lentils but not in bulk and ride the bus


----------



## sags

We have gained significantly more in cola increases on our pensions and wage increases than our personal increase in cost of living expenses.

Inflation affects everyone differently, depending on their lifestyle choices and personal needs and expenses.

From what I have read, low income folks are the most adversely affected by rising costs for fuel, rents, and food primarily.

The government should direct their windfall revenues to pay an inflation benefit to low income folks, just as they do automatically for CPP and OAS benefits.

Maybe there will be something in the 2022 budget that is expected soon.


----------



## hfp75

Funny how CNN is saying inflations is beneficial for the bulk of people. Wonder what they are sniffing. In a year when inflation is worse and people are openly complaining I bet that article has been pulled !!!


----------



## KaeJS

Inflation really is only good for the people who no longer worry about their finances.

Everything else is a farce, but I'm sure most people on here know that.


----------



## MrMatt

sags said:


> We have gained significantly more in cola increases on our pensions and wage increases than our personal increase in cost of living expenses.


Not unless you work for the government.
Most people aren't seeing cost of living adjustments.




> The government should direct their windfall revenues to pay an inflation benefit to low income folks, just as they do automatically for CPP and OAS benefits.


No, they should increase the basic personal deduction to a living wage.
People should be allowed to keep enough for their basic necessities before they have to start funding Trudeaus photo-ops.



> Maybe there will be something in the 2022 budget that is expected soon.


More spending, Liberals don't believe that citizens are capable of deciding for themselves.
Tax relief, ie returning decision making power to the people, isn't in their playbook.


----------



## kcowan2000

The Liberal Playbook is clearly spelled out here:








Now is the time for a 'great reset'


The changes we have already seen in response to COVID-19 prove that a reset of our economic model is possible. Professor Klaus Schwab outlines how to achieve it.




www.weforum.org




There is no need to speculate. As long as you live in Canada!


----------



## diharv

BOC governor going to wish he had that rate hike that he chickened out on in late January. The Fed is talking about accelerating their hikes in light of inflation and the rumblings of a global recession coming up so there is an impetus to get some bullets in the gun fast.


----------



## londoncalling

Inflation hit 6.7 per cent in March: StatCan | CTV News 

last month was 5.7%. More rate hikes coming? Definitely a clear shift in interest rate policy. Current rates are still historically on the lower end but definitely a shift in public sentiment. I am already hearing from people concerned about being able to keep up with costs without signifacant wage increases. My discussions with business owners is that they have already increased prices but are seeing cost increases continuing to rise but are unsure how much they will be able to pass along to customers going forward. The Canadian economy is doing well but everyone sees clouds on the horizon.


----------



## KaeJS

Clouds?

That's a nice way to put it.

I'm seeing dark skies, hail, tornados...


----------



## Covariance

Parsing the March CPI, and employment reports. Notably purchasing power has been eroded with average hourly wages increased 3.4% year over year March, whereas consumer prices increased 6.7%


----------



## Thal81

Well, according to this article, markets are pricing in 100% chance of another 0.50% hike in June. An economist from Scotiabank says there's a solid case for an even bigger hike, 0.75% or 1%. I doubt that will happen, but regardless, things are about to get real serious real fast.

Market bets on another jumbo interest rate hike in June


----------



## damian13ster

They need to raise it by full 1% imho.
The 0.5% raises every couple of months won't reduce inflation expectation.
Don't think they have balls to do that though. Remember, there are no independent institutions in Canada


----------



## londoncalling

KaeJS said:


> Clouds?
> 
> That's a nice way to put it.
> 
> I'm seeing dark skies, hail, tornados...


The clouds are certainly not the big fluffy pillow like type. There is definitely a storm brewing.


----------



## diharv

Thal81 said:


> Well, according to this article, markets are pricing in 100% chance of another 0.50% hike in June. An economist from Scotiabank says there's a solid case for an even bigger hike, 0.75% or 1%. I doubt that will happen, but regardless, things are about to get real serious real fast.
> 
> Market bets on another jumbo interest rate hike in June


Please forgive me for asking this but can someone explain to me how the "market" is pricing in a whatever percent chance of a whatever percent hike at the next BOC meeting? The market is volatile, up and down everyday sometimes with reason, often with no rhyme or reason. Where or how do I look to find this actual market pricing data and how can it be a predictor of what a flesh and blood person will actually do at that meeting Does it predict if he would chicken out like he did in January? I don't see how the "market" can be a predictable indicator of anything since investors seen to respond like sheep to ridiculous things at times. Hell, Elon Musk knows he can manipulate it with in any direction he wants with one press release. I've been hearing this so much of late and need it explained to me.


----------



## Thal81

diharv said:


> Please forgive me for asking this but can someone explain to me how the "market" is pricing in a whatever percent chance of a whatever percent hike at the next BOC meeting?


It's based on prices of short term fixed income investments, like a Banker's Acceptance (I don't know much about those, so don't ask!). TMX has a website tracking implied BoC interest rate movements according to how the Bankers Acceptance Futures (BAX) are trading.
TMX - Montréal Exchange - Canadian Interest Rate Expectations
The chart is hard to interpret when you're not used to it. And it's all speculative of course because like you said, it's people at the BoC who make that decision, it's not investors. But, I'd call them very well educated guesses.

Interestingly, BAX prices are currently suggesting a 62% chance of a 75bps hike by June. And there's only one BoC meeting left till then. Oh man.


----------



## peterk

I'm not convinced that interest rate increases would solve the inflation problem today when it's mainly a supply-side constraint problem instead of a demand growth problem...

There's still lots of bottlenecks in supply chains globally with Covid restrictions hampering production of goods, or making it more costly if not hampered.

There's also the lost capacity for production from all the small businesses that were crushed during covid and didn't come back. Existing large businesses and new small business (fewer than before though) need to accelerate their production capabilities to make up for those losses.

I think rate increases today will stifle production growth coming out of frail businesses, more than it will suppress consumer demand.


----------



## HappilyRetired

hfp75 said:


> Funny how CNN is saying inflations is beneficial for the bulk of people. Wonder what they are sniffing. In a year when inflation is worse and people are openly complaining I bet that article has been pulled !!!


Don't make the mistake of thinking that an actual journalist wrote that story. CNN prints what they're told to print. It's just a press release disguised as news.


----------



## sags

diharv said:


> Please forgive me for asking this but can someone explain to me how the "market" is pricing in a whatever percent chance of a whatever percent hike at the next BOC meeting? The market is volatile, up and down everyday sometimes with reason, often with no rhyme or reason. Where or how do I look to find this actual market pricing data and how can it be a predictor of what a flesh and blood person will actually do at that meeting Does it predict if he would chicken out like he did in January? I don't see how the "market" can be a predictable indicator of anything since investors seen to respond like sheep to ridiculous things at times. Hell, Elon Musk knows he can manipulate it with in any direction he wants with one press release. I've been hearing this so much of late and need it explained to me.


It is like when an election results in a minority government and the pundits say "the people decided they wanted a minority government".

I have yet to hear about the big meetings where voters get together and plot out the strategy to get a minority government.


----------



## damian13ster

peterk said:


> I'm not convinced that interest rate increases would solve the inflation problem today when it's mainly a supply-side constraint problem instead of a demand growth problem...
> 
> There's still lots of bottlenecks in supply chains globally with Covid restrictions hampering production of goods, or making it more costly if not hampered.
> 
> There's also the lost capacity for production from all the small businesses that were crushed during covid and didn't come back. Existing large businesses and new small business (fewer than before though) need to accelerate their production capabilities to make up for those losses.
> 
> I think rate increases today will stifle production growth coming out of frail businesses, more than it will suppress consumer demand.


Yeah, it is a supply problem - money supply problem.
Check how many dollars were printed in last 3 years and you will see that supply of dollars is main factor in inflation.


----------



## londoncalling

peterk said:


> I think rate increases today will stifle production growth coming out of frail businesses, more than it will suppress consumer demand.


This is a potential outcome from raising too fast. The BOC is trying to increase rates to reduce inflation as well as create some wiggle room for the next downturn. They are trying to cool inflation without cooling "the economy". Since the economy is many things this not an easy feat. Is the economy bay street, main street, regional, national or global? some industries do well in high interest rate environments while others suffer. As noted, changing the interest rate is supposed to help change the demand side of the equation but has little impact on the supply side in the short term. The BOC is either going to overcorrect or their efforts to shock the system will work. My perception is that they are being reactive not proactive. The reality is the people making the decisions are way more knowledgeable and experienced with these decisions than I am. The good news is if they increase now they have the ability to decrease later. With rates at 0 they can still go lower but negative rates send a bad message on the state of the economy.


----------



## MrMatt

sags said:


> It is like when an election results in a minority government and the pundits say "the people decided they wanted a minority government".
> 
> I have yet to hear about the big meetings where voters get together and plot out the strategy to get a minority government.


It's called "election day".


----------



## Covariance

diharv said:


> Please forgive me for asking this but can someone explain to me how the "market" is pricing in a whatever percent chance of a whatever percent hike at the next BOC meeting?


I will give you the answer for the US Fed (equiv to BoC) which is more liquid and to which I am familiar. There are some technical and other nuances but the following is a high level understanding;

Futures contracts trade on the Chicago Board of Trade with the underlying the Effective Fed Funds (FFE) rate on average for a specific month in the future. They are priced at 100-the simple annual rate as averaged over the month, and settled at the end of that month. So a contract price of 97 for the June futures contract means an implied annual rate of 3% on average for June.
If you want the market expectations of a Fed increase (hike) at a future meeting: you would first look to the price of the futures contract for the month in the future in which the meeting is scheduled. Next you would determine the implied FFE rate from the price using the above formula.
Finally you take the implied FFE and subtract the current Fed Funds Rate, divide by (Fed Funds Rate assuming a hike less Current Fed Funds rate) to obtain a % probability of said hike occurring as predicted by the futures market.
Note; one determines the probability of different size hikes by insertion of your different hike estimates in the denominator.

Hope that helps.


----------



## MrMatt

diharv said:


> Please forgive me for asking this but can someone explain to me how the "market" is pricing in a whatever percent chance of a whatever percent hike at the next BOC meeting?


Covariance has a good example.
Let me try a simpler one.

Thought exercise.

Lets say the Bank of Canada rate is 1%.
If you had money and a lot of short term government securities (1 month or so) lets assume you'd make about the Bank of Canada rate.


Now if you think they're going to cut rates to 0.75, you'd spend your money and buy up as much of the available securities so you'd make a bit more than the new rate of 0.75%.
Similarly if you think they're going to hike rates to 1.25% you'd sell off everything you can get until it's almost at that new rate.

You'd be trying to get ahead of the changes.
If you thought they were going to change by 0.5% you'd buy or sell to hit that new rate.

Now instead of it being "you" the individual, it's all the individual entities trying to do this, aka "the market"


----------



## sags

China reported their export numbers and they are horrible. The supply chains will be broken for awhile and inflation is going to rise due to lack of supply.

GIven the scenario, should the BOC abandon raising interest rates which will add to price inflation, or should they sit back and let inflation run ?

On one hand they risk very high inflation numbers and on the other they risk a recession or worse. It isn't good times for central bankers.


----------



## londoncalling

If supply chain issues continue people will just stop buying. I am not sure how much of our imports from China are essential for consumers to live as I haven't done a deep dive. We hear a lot about delays for semiconductors and yes they are in almost everything. But how much of our purchases need to be made today. We can control personal inflation to some extent but not entirely. If supply chain disruption remains through the year we could face a a significant slowdown in consumer spending and a recession and the layoffs and high unemployment. Unemployment rate is the number I am most concerned with these days as it pertains to the health of the economy. The narrative I hear is there is difficulty in finding workers in my day to day activity and on this forum. Unemployment rate would confirm this as well. That tells me there is a ways to go before the wheels fall off. Interest rates are a lever to push the economy this way and that. However the economy is a big machine and the lever's desired effect often takes more time for things to change course.


----------



## damian13ster

That's just a reason to raise interest rates even faster, to further limit demand and inflation expectation. Once inflation expectation is above actual inflation rate (and we are almost there - the game is over, double digit interest rate or hyperinflation). BoC is already at least 3-4% behind the curve and they are slow to catch up, because of government interference. 10 year bond yields just exceeded 3% and they are likely, and hopefully, going to continue rising rapidly


----------



## londoncalling

Latest Numbers : U.S. Bureau of Labor Statistics (bls.gov) 

*CPI Latest Numbers*


CPI-U, US CITY AVERAGE, ALL ITEMS:
NSA +0.6%in Apr 2022
SA +0.3%in Apr 2022
NSA +8.3%since Apr 2021


----------



## sags

Interesting that "medical care" is 3.2% of the 8.3%.


----------



## Ukrainiandude

Fed Should Hike to 5% or Higher to Curb Inflation - Former Federal Reserve Bank of New York President Bill Dudley
_The U.S. central bank should stop “sugarcoating” its message on how high interest rates need to go -- and how much pain that will cause -- to get inflation under control.

“I think it’s 4 to 5 (percent) or higher,” Dudley said in an interview with Bloomberg Surveillance on Wednesday on how high the Fed should raise interest rates to cool price pressures. “I was 3 to 4 (percent) maybe six months ago. Now I’m 4 to 5 and it wouldn’t shock me if I’m 5 to 6 a few months from now,” said Dudley._


----------



## sags

A rate hike of that magnitude would plunge the US into a deep recession, and that would be far worse than temporary higher prices.

Governments are receiving increased revenues due to taxes on inflated prices, full employment and other factors.

They should be redistributing the surplus back to people in need of financial help, to weather the storm.

They should also focus on getting the kinks out of supply chains. This is a supply issue.......not a demand issue.

They also need to ensure that "inflation" isn't being used to mask any "price gouging", at least in essential needs and services.


----------



## londoncalling

To the best of my knowledge there is no surplus. We have been running massive deficits for quite some time now. I think all countries are looking into how to be more self reliant. canada could produce a lot of its own goods if it wanted to do so. I am not sure if they can do it for cheaper even at the current inflation rate. Making the pivot back to being a producing economy takes time to implement. Factories and pipelines don't just fall from the sky. As long as companies can pass along costs to consumers they will not seriously explore cheaper options. A couple of questions that needs to be asked are how long will we see supply chain disruption? Is this the new norm?


----------



## KaeJS

sags said:


> They should be redistributing the surplus back to people in need of financial help, to weather the storm.


There is no surplus.

But even if there was, redistribution to the people would only exacerbate our inflation issues and kick the can down the road further. This is not a solution.


----------



## MrMatt

KaeJS said:


> There is no surplus.
> 
> But even if there was, redistribution to the people would only exacerbate our inflation issues and kick the can down the road further. This is not a solution.


You don't understand the mindset of government interventionalists.

Take any problem.
Solution is more governmental intervention.. which causes more problems.. which necessitates more government intervention.

It doesn't solve the problems, but it gives control to the government, which is what the authoritarians want.


----------



## sags

Alberta Budget: Province to post $511M surplus on the back of higher oil and gas prices


The 2022-23 budget presented Thursday could be the province’s first balanced budget since 2014-15, but some projected spending increases, including in health…




edmontonjournal.com


----------



## sags

Tax cuts are a form of redistribution as well. Are you opposed to tax cuts ?

The Liberals may choose to retain the surplus revenues to lower the debt to GDP ratio at a faster pace than projected.

It would provide good commentary for them in future elections, and they have done it successfully in the past.

Chretien and Martin were masters of the "oh look, we are richer than you thought" election surprise, that blew up the Conservative election strategy.

It is a really old political trick, that in election years everything is blue skies and rainbows.


----------



## MrMatt

sags said:


> Tax cuts are a form of redistribution as well. Are you opposed to tax cuts ?


No they're not.
If you don't take from one person and give to another, it isn't redistribution.

Think about it, if you don't redistribute anything, how is it redistribution?

I am totally for tax cuts. The government already takes too much and wastes VAST quantities of money.


----------



## MrBlackhill

MrMatt said:


> The government already takes too much


Have you ever seen the corporate taxes, income taxes and sales taxes of the happiest and best countries to live in the world? Denmark, Finland, Sweden, Norway, Netherlands, Germany, etc?



https://en.m.wikipedia.org/wiki/List_of_countries_by_tax_rates


----------



## off.by.10

MrBlackhill said:


> Have you ever seen the corporate taxes, income taxes and sales taxes of the happiest and best countries to live in the world? Denmark, Finland, Sweden, Norway, Netherlands, Germany, etc?


I doubt they're happy because they have a large tax bill. They're happy because they have good public policy, which in turn may require collecting substantial taxes to implement. The taxes do no good if the government is just pissing the money away.


----------



## MrBlackhill

off.by.10 said:


> The taxes do no good if the government is just pissing the money away.


And why in Canada the government would be pissing the money away, but not in those countries? There will always be people to say that the tax money is not used properly. I'm pretty sure there's people living in those countries who have the same narrative: they say they pay too much taxes and that the government doesn't use it properly.

Actually, maybe not, maybe they aren't saying this. Maybe only people in Canada are saying this, due to the bad influence from the US culture.


----------



## HappilyRetired

So if you criticize govt spending it's because you were unduly influenced by the US?

Trudeau gets elected in spite of his corruption and poor performance likely because enough people happily believe such idiocy.


----------



## Ukrainiandude

*THE MOTHER OF ALL HOUSING CRASHES - The Canadian housing market is about to crash.*
A bubble since 1996 is going to burst. This is a domino falling in front of your very eyes. Evergrande is nothing in comparison.


----------



## MrMatt

MrBlackhill said:


> Have you ever seen the corporate taxes, income taxes and sales taxes of the happiest and best countries to live in the world? Denmark, Finland, Sweden, Norway, Netherlands, Germany, etc?
> 
> 
> 
> https://en.m.wikipedia.org/wiki/List_of_countries_by_tax_rates


 "_correlation_ does not imply _causation_"

The high tax policy is due to their more collectivist attitude and social cohesion. They're more culturally homogeneous which helps, mostly the same religion etc.

Here in Canada we aren't culturally homogeneous, in fact we have a massive urban/rural divide which seems insurmountable.

If you look at many policies they are wedge urban/rural.
Also how does our government deal with dissent?
Trudeau does it with name calling and insulting, and sending law enforcement after them.

Trudeau is deliberately attacking the very social cohesion that I believe makes people more willing to work together.

Two people who believe in different things, and have different values aren't likely to want to work together. << this is Canada.
In Finland where they believe the same things and have the same values are likely to want to work together to a greater extent.

It's gotten so bad that some people, including our government, are actively advocating and constructing systematic racism within our government institutions. Of course I don't want to work or support that. How can I work with and support people who are doing these things?


----------



## sags

Other than the far right conservative crackpots, everyone else gets along just fine.


----------



## MrBlackhill

MrMatt said:


> It's gotten so bad that some people, including our government, are actively advocating and constructing systematic racism within our government institutions.


You think the grass is greener on the other side and that the countries I've mentioned are doing it better. Did you know that Sweden is trying to have equality of outcome? And how do you think they are trying to achieve that? You'd call it systematic racism/sexism.


----------



## MrMatt

MrBlackhill said:


> You think the grass is greener on the other side and that the countries I've mentioned are doing it better. Did you know that Sweden is trying to have equality of outcome? And how do you think they are trying to achieve that? You'd call it systematic racism/sexism.


Yes I would.
Because they're discriminating by race and sex/gender.

The reality is different people will make different choices, and THAT IS OK.
The problem is they assume that everything should be perfectly even, and I can say that's just not logical.
People will naturally tend towards different fields, I don't care if a particular identifiable group dominates in one field, as long as there aren't unfair barriers.

Remove the unfair barriers, ABSOLUTELY, but not every difference is due to an unfair barrier.





sags said:


> Other than the far right conservative crackpots, everyone else gets along just fine.


Oh did you forget about the violent riots in downtown Toronto last summer?

As far as standing against racism, I think most people are actually against it, not just "far right conservative crackpots".
It's kind of sad you'd even suggest that they're the only group fighting racism.


----------



## Spudd

MrMatt said:


> Oh did you forget about the violent riots in downtown Toronto last summer?


I guess I did. So I googled it and found this as the first hit:








Charges laid at two massive protests in downtown Toronto on Saturday


Each protest garnered over 5,000 people, one starting at Queen’s Park and the other gathering at Nathan Phillips Square.




www.thestar.com





An anti-lockdown protest and a pro-Palestinian protest. It didn't really sound like a riot, though. Are those what you were referring to?


----------



## MrMatt

Spudd said:


> I guess I did. So I googled it and found this as the first hit:
> 
> 
> 
> 
> 
> 
> 
> 
> Charges laid at two massive protests in downtown Toronto on Saturday
> 
> 
> Each protest garnered over 5,000 people, one starting at Queen’s Park and the other gathering at Nathan Phillips Square.
> 
> 
> 
> 
> www.thestar.com
> 
> 
> 
> 
> 
> An anti-lockdown protest and a pro-Palestinian protest. It didn't really sound like a riot, though. Are those what you were referring to?


I was referring to the Ryerson riots/domestic terrorism, but the pro-Palestinian protest was likely not "right wing crackpots" either.


This doesn't look like the result of a peaceful protest to me.


----------



## Spudd

MrMatt said:


> I was referring to the Ryerson riots/domestic terrorism, but the pro-Palestinian protest was likely not "right wing crackpots" either.
> 
> 
> This doesn't look like the result of a peaceful protest to me.
> View attachment 23167


I never heard about that one, or if I did, I forgot completely. That does look pretty violent.


----------



## m3s

Spudd said:


> I never heard about that one, or if I did, I forgot completely. That does look pretty violent.


Bad press about the church? Heaven forbid


----------



## m3s

No wonder boomers are so confused about basic finances. Look what Biden is tweeting


__ https://twitter.com/i/web/status/1525309091970699265


----------



## MrMatt

m3s said:


> No wonder boomers are so confused about basic finances. Look what Biden is tweeting


Biden isn't tweeting anything.

They're basically playing Weekend at Bernies with a senile old man.
Time to stop the elder abuse.


----------



## HappilyRetired

Are there still people that think Biden is actually sending his own tweets?


----------



## londoncalling

14 Canadian Towns With a Low Cost of Living and High Paying Jobs (msn.com) 

What drivel passes for journalism these days amuses me. This piece of click bait is ridiculouos. For example:

*Armstrong, British Columbia*
In Armstrong’s town centre, you can get a one-bedroom apartment for an average of $1,250 per month, with an added $204 for basic utilities. This town in the North Okanagan is a good option if you want a rural lifestyle, with agriculture and tourism driving the local economy. The average monthly net salary here is $1,500."

Perhaps math is different in journalism school

Avg net salary - (rent + utilities) = wealth beyond comprehension
$1500- ($1250+ $204) = $46

Don't eat or do anything else and watch that $46 compound everymonth! 
🤣


----------



## HappilyRetired

londoncalling said:


> 14 Canadian Towns With a Low Cost of Living and High Paying Jobs (msn.com)
> 
> What drivel passes for journalism these days amuses me. This piece of click bait is ridiculouos. For example:
> 
> *Armstrong, British Columbia*
> In Armstrong’s town centre, you can get a one-bedroom apartment for an average of $1,250 per month, with an added $204 for basic utilities. This town in the North Okanagan is a good option if you want a rural lifestyle, with agriculture and tourism driving the local economy. The average monthly net salary here is $1,500."
> 
> Perhaps math is different in journalism school
> 
> Avg net salary - (rent + utilities) = wealth beyond comprehension
> $1500- ($1250+ $204) = $46
> 
> Don't eat or do anything else and watch that $46 compound everymonth!
> 🤣


Net salary for minimum wage is $2,150 per month in BC. Obviously they're counting students/teens and part timers in their average. If the town had just one billionaire the monthly average wage might be $120,000. 

But even at minimum wage working 40 hours at a week you can live quite well:

A couple earning minimum wage will net $4,300. After rent and utilities they will have $2,846 left over.


----------



## londoncalling

HappilyRetired said:


> Net salary for minimum wage is $2,150 per month in BC. Obviously they're counting students/teens and part timers in their average. If the town had just one billionaire the monthly average wage might be $120,000.
> 
> But even at minimum wage working 40 hours at a week you can live quite well:
> 
> A couple earning minimum wage will net $4,300. After rent and utilities they will have $2,846 left over.


@HappilyRetired see how easy it point out the ridiculousness of the finporn. These generic articles are pointless for readers trying to educate themselves. I give them a quick scan, chuckle and move on. For not one minute did I believe that the average fully employed worker in Armstrong make $46 a month more than rent and utilities. It's like they pulled out a map picked 10 locations, looked up random stats about each place and pasted into a word doc.


----------



## MrMatt

HappilyRetired said:


> Net salary for minimum wage is $2,150 per month in BC. Obviously they're counting students/teens and part timers in their average. If the town had just one billionaire the monthly average wage might be $120,000.
> 
> But even at minimum wage working 40 hours at a week you can live quite well:
> 
> A couple earning minimum wage will net $4,300. After rent and utilities they will have $2,846 left over.


Few minimum wage jobs offer a steady 40 hours/wk.
A lot of them are part time, or short a few hours.


----------



## HappilyRetired

MrMatt said:


> Few minimum wage jobs offer a steady 40 hours/wk.
> A lot of them are part time, or short a few hours.


That may be. Hard working and honest employees will be rewarded with more hours, perhaps they can work 2 different jobs, take the occasional weekend shift.


----------



## MrMatt

HappilyRetired said:


> That may be. Hard working and honest employees will be rewarded with more hours, perhaps they can work 2 different jobs, take the occasional weekend shift.


You'd think that, but I know a lot of AMAZING workers who get screwed over by bad management and politics, and from what I talk to this tends to be worse at lower end jobs.

Mangers promoting friends and firing their competition is quite popular.

I actually know people with pretty good jobs who pick up a second parttime/seasonal job to fund their "extras" ie vacation.


----------



## londoncalling

Most minimum wage jobs are not Monday to Friday either so the concept of an occasional weekend shift is not as relevant. The retail and service industry are loathe to offer up overtime which is a contributing factor in people needing to work multiple part time jobs. Anecdotally I have been told by contacts in this field that one reason they have so many employees is to juggle the schedules of their employees' other jobs.


----------



## sags

People are still spending. People say they have no plans to cut back on driving. People are making choices on where they spend their money.

Inflation is reported at 6.8% year over year........a slight increase. We are in an inflation cycle of increased prices and increased wages.

The biggest losers will be home owner equity and crypto and meme stock investors.

Some of those companies won't be able to borrow any more capital and will go defunct.

Most people will manage their personal inflation through their spending choices.

People who are on the edge didn't suddenly arrive there. They have been close for some time. The government will need to provide benefits to some.

It should be temporary. Most forecasts are for more traditional 2-3% inflation to return by next year.


----------



## KaeJS

sags said:


> People are still spending. People say they have no plans to cut back on driving. People are making choices on where they spend their money.
> 
> Inflation is reported at 6.8% year over year........a slight increase. We are in an inflation cycle of increased prices and increased wages.
> 
> The biggest losers will be home owner equity and crypto and meme stock investors.
> 
> Some of those companies won't be able to borrow any more capital and will go defunct.
> 
> Most people will manage their personal inflation through their spending choices.
> 
> People who are on the edge didn't suddenly arrive there. They have been close for some time. The government will need to provide benefits to some.
> 
> It should be temporary. Most forecasts are for more traditional 2-3% inflation to return by next year.


Increased wages? Where?

Also, can the government provide benefits to me for being a good boy and paying my taxes?

Why should people "on the edge" get help?
Let them starve.


----------



## MrMatt

KaeJS said:


> Increased wages? Where?


In unions paid by gun toting thugs.

Other than that I don't think there are widespread wage increases.


----------



## sags

If you are working for an employer who doesn't pay wage increases.......why do you stay ?


----------



## Ukrainiandude

I don’t mind paying more as long as gas prices will help to get rid or reduce the number of stinky big vehicles on the roads (pick ups and SUVS).


----------



## sags

Good grief......

Hey Andrew.......Canadian $$ had "intrinsic value" when they paid for your kid's private education from the Conservative slush fund.


__ https://twitter.com/i/web/status/1526683095260348416


----------



## KaeJS

sags said:


> If you are working for an employer who doesn't pay wage increases.......why do you stay ?


I stay because of the proximity to my house and the pension and the 5 weeks of vacation every year...


----------



## sags

Yea, so we had 5 weeks vacation, plus the week between the day before Christmas to New Year's Day off.

Pretty much everybody took the 5 weeks vacation pay and only took 2 weeks of holidays. They worked the other 3 weeks for straight pay.

Christmas Day, Boxing Day, and New Years Day were mandatory off, but they worked all the other days in between for 3 times pay.

Some people were forced to take the last 2 weeks of the year off, because they didn't book any holidays.

The union wouldn't ask for more vacation time off in contracts, because people weren't taking the time off they already had.

We had mandatory 8 hours of overtime for years, and some people worked 16 hours overtime a week.

Overtime money boosted our annual pay by 40% or more. You do what you gotta do......or so I thought.

P.S. If I had it to all over again....I wouldn't and I wouldn't recommend it either.

I gave up way too much family time and our son's achievements to buy stuff we could have lived happily without.


----------



## Ukrainiandude

Decades long playing with ultra low interest rates finely paying off, congratulations central bankers, well done.
*Canadian Inflation Hits New Three-Decade High of 6.8% on Housing


Bloomberg - Are you a robot?


*


----------



## m3s

MrMatt said:


> In unions paid by gun toting thugs.
> 
> Other than that I don't think there are widespread wage increases.


That's why sags buys his domestic brand Korean designed Chinese built $80k SUV with the $6k platinum protection package

The cartel of thugs kicked TSLA out of the ESG 500 while Exxon Mobile is top 10. We need to get rid of this cancer


----------



## sags

Good buy though. It cost 100k plus to get one now…..if you can find one. Financing also costs more today and is going up and up.

I can let you have it for 90k cash….no crypto.


----------



## m3s

sags said:


> Good grief......
> 
> Hey Andrew.......Canadian $$ had "intrinsic value" when they paid for your kid's private education from the Conservative slush fund.
> 
> 
> __ https://twitter.com/i/web/status/1526683095260348416


Fiat money by definition has no intrinsic value

CAD literarily has no intrinsic value as it is not backed by gold. Look up the definition of intrinsic value and then the definition of fiat currency

Canadian Money Forum on topic 10 years later ladies and gents


----------



## sags

Gold reserves are like the monarchy. Some people like to have it around even though it doesn't serve any useful purpose.

Fiat is backed by the assets, revenues, resources, and ability to collect taxes of the country issuing the currency.

Greece nearly had a financial collapse, not because of a big debt load, but because the underground economy robbed the country of tax revenues.

(that is one reason why governments won't allow alternative currencies which they can't tax......like people who don't pay taxes on transactions.)

Canada has no such issues of tax collection with fiat, and has vast resources that some say are incalculable, such as the value of fresh water.

Crytpto currencies are a solution looking for a problem to solve. Alternate currency....nope, storage of wealth.....nope, inflation hedge......nope.

Poor countries, poor people, and the disgruntled are susceptible to the free magic internet money solution to all their problems.

Crypto pumpers and promoters profit from their desperation. What happened to Matt Damon's "only the brave" crypto commercial ?

It appeared when bitcoin was $67K and disappeared when bitcoin fell to $30K.

Matt Damon, Kim Kardashian, and other celebrity pumpers had "no comment" when asked by reporters.


----------



## m3s

sags said:


> Gold reserves are like the monarchy. Some people like to have it around even though it doesn't serve any useful purpose.
> 
> Fiat is backed by the assets, revenues, resources, and *ability to collect taxes of the country issuing the currency.*
> 
> Greece nearly had a financial collapse, not because of a big debt load, but because the underground economy robbed the country of tax revenues.


Canada is chasing large tax revenue out of the country with this attitude. The last chance is Pierre

You will be long gone before you see how burdensome tax reporting and lack of intelligent monetary policy will hurt the country in a digital age

Greece collapsed because it failed to have a forward looking fiscal plan. Sound familiar?



sags said:


> Crypto pumpers and promoters profit from their desperation. What happened to Matt Damon's "only the brave" crypto commercial ?
> 
> It appeared when bitcoin was $67K and disappeared when bitcoin fell to $30K.


I'm happy to pay the taxes. Just don't treat me like a criminal and call me a desperate moron while I'm doing it

You bite the hand that feeds you while crying about only being able to $80k chinese SUVs on OAS and a pension bailed out by the government

GFY sags


----------



## damian13ster

Philip Cross: The Bank of Canada has failed, not just Tiff Macklem


Canada is undergoing its sharpest and most prolonged resurgence of inflation since 1983, almost 40 years ago




financialpost.com


----------



## MrMatt

sags said:


> Crytpto currencies are a solution looking for a problem to solve. Alternate currency....nope, storage of wealth.....nope, inflation hedge......nope.


Again you're looking at the wrong problems, going to the same stupid uses.
Alternate currencies and financial games are a very limited (and not particularly interesting ) use of the technology.


Crypto is solving the massively distributed computing problem. 

How do you interact with a massively distributed systems, where you can trust the actions, without actually trusting the servers themselves?
Crypto solves THAT problem.

Now, admittedly that "problem" is one that most people will have trouble understanding.
I think with your "government provides all" mindset, the idea of a system that isn't reliant on an authority figure to function seems odd, if not impossible.


If you don't understand why being able to trust the blockchain, without trusting the servers is useful, you simply don't understand the point of the technology.


----------



## afulldeck

damian13ster said:


> Philip Cross: The Bank of Canada has failed, not just Tiff Macklem
> 
> 
> Canada is undergoing its sharpest and most prolonged resurgence of inflation since 1983, almost 40 years ago
> 
> 
> 
> 
> financialpost.com


Boy did Dr. Cross get that right......


----------



## sags

Quote from the article........

_But it is not obvious that after the initial shock of the pandemic’s onset the economy’s problems went much beyond lockdowns and social distancing, which were best addressed with targeted fiscal stimulus. _

Is this guy serious ?

He apparently doesn't know about the supply chain disruptions, the lock downs in China, the war in Ukraine, or that oil is priced in the global market ?

Never mind all that. It is all the fault of Trudeau and the BOC because PP says so.

No wonder the Conservative Finance critic Ed Fast resigned from cabinet.


----------



## damian13ster

It's BOC fault because the supply chain, etc are not fixed by printing money.
Printing money ALWAYS adds to inflation.
Is it responsible for entire 7% inflation? - no.
Would inflation be significantly lower without ridiculous money printing and with BOC not falling asleep and raising interest rates earlier and higher? - yes.
How much lower? - you can debate that.

But those statements are factual:

Fiscal policy by government contributed significantly to inflation
Monetary policy from BOC contributed significantly to inflation.
Inflation would be lower if BOC didn't screw up their job.

They are not responsible for government being run by morons.
BOC is responsible though for doing what it takes to keep inflation at 1-3% and they have failed - miserably.


----------



## sags

If inflation had increased at 2% per year since 1993 to today......it would be higher than it is today.

The ultra low inflation we experienced for many years isn't normal.


----------



## londoncalling

So you are pointing out that the B of C hasn't been able to do it's job for a long time.  

I am hopeful that inflation starts to trend downward and wages start to narrow the gap that has been widening for decades. If one is going to dream they should at least make it a fantasy. 

Normalized rates are the goal but it is a tricky target to hit.


----------



## damian13ster

Conversation needs to be started as well of bringing inflation target down from 2 to 0.
You complain about consumerism affecting climate, yet inflation target is set to create demand and push people towards consumption


----------



## sags

Deflation is worse than inflation.

The BOC is navigating a complex situation with a lot of moving factors as well as anyone should expect.

I would be interested to hear from PP how he would manage inflation due to oil prices, imported good, and currency fluctuation.

Economics is a ball of strings. You pull on one string and it affects one on the other side.


----------



## m3s

sags said:


> Economics is a ball of strings. You pull on one string and it affects one on the other side.


And yet you claim that printing money does nothing and that inflation is good for GICs

You are a mess of constant contradiction but it is clearly based on political affiliation not logic


----------



## sags

Garth Turner nails it in his latest blog entry. Don't pay so much attention to all those "world is ending" Youtube crypto dudes.

They are all scammers, fraudsters or libertarian flakes. This is nothing like we haven't already experienced.........at least some of us.

It is transitory because it will pass. It is temporary because it will pass. Choose whatever word you want......but it will pass.

_Unlike what Pepe is busy telling scared little beavs, *inflation is not the fault of the central bank*. It did not cause it. It did not ‘print’ $400 billion and hand it to Justin to spend on CERB. Nor is inflation a Canadian thing. 

Was Tiff Macklem responsible for a global trend? Nah. Think deeper. We’re in a post-pandemic world where consumer spending and demand have exploded. Look at Toronto’s jammed airport chaos, or the fact you can’t find a car rental in Canada these days. Travel has exploded. So have audiences at concerts, parks and pro sports. Now consider energy. During Covid oil prices collapsed as lockdowns depressed demand. Now crude is consistently over $100 a barrel, helped along by the insane war in Ukraine. *And the supply chain’s a big deal. Factories shut during Covid and are now overwhelmed. Demand exceeds supply. Prices rise sharply. A chip shortage means fewer new cars are built, so used car prices explode. That’s inflation.* And fuel charges are goosing food costs, while full employment is now feeding strikes, labour discord and a wage-price spiral. _





__





That apocalypse — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate







www.greaterfool.ca


----------



## sags

Times change. Economics changes. During the pandemic the economy shrank to negative and now it is expanding again.

When conditions change the solutions change. What do you do when conditions change ?

Turner mentions the chip shortage raising the price of cars. Chips are also used in a lot of consumer products these days that are rising in price.

Pepe is running around spreading misinformation and FUD, but the good news is that most people already know that Pepe Le Fud is clueless.


----------



## doctrine

Is inflation bottoming? Have bonds bottomed? XBB hit its low on 6 May and two weeks later is up 1-2%. Maybe it hasn't but being above the 10 day moving average is the first sign of stability in any market. US retailers are starting to show growing inventory, which may mean some relief on pricing. 

Bonds and other deflation proxies have moved down enough that if there isn't rampant out of control inflation, that you could make some money on the upside.


----------



## nathan79

sags said:


> Garth Turner nails it in his latest blog entry. Don't pay so much attention to all those "world is ending" Youtube crypto dudes.
> 
> They are all scammers, fraudsters or libertarian flakes. This is nothing like we haven't already experienced.........at least some of us.
> 
> It is transitory because it will pass. It is temporary because it will pass. Choose whatever word you want......but it will pass.
> 
> _Unlike what Pepe is busy telling scared little beavs, *inflation is not the fault of the central bank*. It did not cause it. It did not ‘print’ $400 billion and hand it to Justin to spend on CERB. Nor is inflation a Canadian thing.
> 
> Was Tiff Macklem responsible for a global trend? Nah. Think deeper. We’re in a post-pandemic world where consumer spending and demand have exploded. Look at Toronto’s jammed airport chaos, or the fact you can’t find a car rental in Canada these days. Travel has exploded. So have audiences at concerts, parks and pro sports. Now consider energy. During Covid oil prices collapsed as lockdowns depressed demand. Now crude is consistently over $100 a barrel, helped along by the insane war in Ukraine. *And the supply chain’s a big deal. Factories shut during Covid and are now overwhelmed. Demand exceeds supply. Prices rise sharply. A chip shortage means fewer new cars are built, so used car prices explode. That’s inflation.* And fuel charges are goosing food costs, while full employment is now feeding strikes, labour discord and a wage-price spiral. _
> 
> 
> 
> 
> 
> __
> 
> 
> 
> 
> 
> That apocalypse — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate
> 
> 
> 
> 
> 
> 
> 
> www.greaterfool.ca


He's forgetting the "wealth effect" of rising asset values, caused by central banks lowering interest rates and buying mortgage bonds to free up liquidity, allowing banks to create more loans.

Millions of Canadians renewed or refinanced their mortgages at record low rates, leaving them flush with cash to spend on goods - a recipe for inflation. Many took out HELOCs. They used this wealth to buy new cars, especially Teslas and other electric cars, as well as boats and RVs, which exacerbated the chip shortage (and led to increased inflation).

If supply chains were the reason for inflation, then you would expect lower sales which is not the case.









RV industry rolls through U.S. shortages, inflation


The recreational vehicle industry has done what many U.S. businesses did in the face of this year's epic shortages and surging inflation: Churned out more products and made more money than ever before.




www.reuters.com





"*Despite all these barriers, the industry is producing and shipping more than ever*. Wholesale shipments of RVs in North America are expected to hit a record 602,200 units this year - a 40% increase over 2020 and 19% higher than the last record high set in 2017, according to an analysis prepared for the RV Industry Association. The analysis, by ITR Economics, is projecting a smaller increase of 2% in 2022, to 613,700 units. "









Boat sales took off during the pandemic and now dealers can't keep up with demand


Sales leaped to a 13-year high in 2020 to $47 billion, increasing 9% from the prior year, according to the National Marine Manufacturers Association.




www.cnbc.com





People were flipping houses and making 50% profits in less than a year. The RE frenzy also spurred a building boom which led to inflation in building supplies. That was a direct consequence of low interest rates, which had nothing to do with COVID or supply chains.

The Liberal government's overly generous COVID relief gave out $7 for every dollar of lost wages during the pandemic.









Ottawa gives households $7 for every dollar of income lost in private sector


For some economists, the extra tens of billions of dollars sent to households is proof that the new income support programs are simply too generous, and exceed the goal of protecting Canadians from an economic catastrophe




www.theglobeandmail.com













Canada's 'generous' COVID-19 income supports vastly outpaced other developed nations: OECD


The report shows household incomes in Canada increased by 11% in the second quarter of 2020, despite a more than 10% contraction in the economy over the same…




nationalpost.com





How does that not create inflation?


----------



## damian13ster

It does. That's why we have it.
By far the major component in inflation is fiscal policy that was designed to drive demand up.
The cost of it is decreased financial stability of the country, which caused drop in value of CAD, which also results in higher prices.

Fiscal policy is to blame for inflation

The problem - people in general don't have capacity to learn and draw conclusion. Every time the cash register rings higher number - you have idiots in Ottawa to blame for it. Just don't forget it when it is time to fire them


----------



## off.by.10

nathan79 said:


> He's forgetting the "wealth effect" of rising asset values, caused by central banks lowering interest rates and buying mortgage bonds to free up liquidity, allowing banks to create more loans.
> 
> Millions of Canadians renewed or refinanced their mortgages at record low rates, leaving them flush with cash to spend on goods - a recipe for inflation.


Indeed, I was forced to refinance in 2020 and it just happened that the bank offered 2% fixed and would happily give me enough extra money to cover the payments for the whole 5 year term. And kept literally shoveling money in my pockets every other week (promotion to cover transaction fees, promotion for opening an account, oh by the way the rate just dropped again, etc).

Now I can do math and manage that properly but I'm sure most people don't.

Edit: As for Garth, I believe it's much simpler: he does not like PP so he will speak opposite of him on pretty much anything he can. He's been ranting about low rates inflating house prices for years now, yet somehow the same does not apply to other goods? Yeah right...


----------



## MrMatt

sags said:


> Times change. Economics changes. During the pandemic the economy shrank to negative and now it is expanding again.


The economy shrank because the government literally sent out law enforcement to turn it off.



> When conditions change the solutions change. What do you do when conditions change ?


What solutions are being proposed.



> Pepe is running around spreading misinformation and FUD, but the good news is that most people already know that Pepe Le Fud is clueless.


Pepe is following the Trudeau/Trump playbook of pretending to want to address the concerns of the people, the fact that its' crap is irrelevant.

People know Trudeau is clueless, that doesn't seem to be a problem with respect to electability.


----------



## kcowan

It is amazing to me how many people have bought into the Trudeau party line via CBC et al. Now I know how Putin gets away with it.


----------



## sags

Homes are dropping in price from 1-2% a month.

On a home valued at $800,000......the loss is $8,000 to $16,000 a month.

Just living in a home no longer earns more than a job.


----------



## MrMatt

sags said:


> Homes are dropping in price from 1-2% a month.
> 
> On a home valued at $800,000......the loss is $8,000 to $16,000 a month.
> 
> Just living in a home no longer earns more than a job.


Living in a home never earned money.

Even the "gains" were all paper gaines, just like the stock market these valuations assume that the marginal transaction is an accurate valuation of the whole.

Well sure that 1 house sold for $800k, but if you tried to buy ALL of them, they'd cost more, and if you tried to sell ALL of them they'd end up going for much less.

I think looking at the marginal transaction makes sense in the VAST majority of financial analysis, there are a lot of assumptions in doing so, and people often forget it.


----------



## peterk

sags said:


> If inflation had increased at 2% per year since 1993 to today......it would be higher than it is today.
> 
> The ultra low inflation we experienced for many years isn't normal.


Err - which items to buy are thinking about that are only 1.8x more expensive now than in 1993? I'm sure there must be a few... I can't come up with anything.


----------



## sags

Some prices go up and some go down and they are all relative to incomes.

Big screen televisions and computers are cheaper today than they were.

Cruise ship travel would be far cheaper today than 100 years ago on the Titanic.......much safer too.

How much did you earn in 1993 ? The minimum wage was $8.69 per hour.


----------



## m3s

Old hag finally admits she was wrong on inflation.

She's wrong on crypto as well but she gets millions in "speaking fees" from the big banks that cloud her judgement. Time to get some younger people making decisions already. By younger I mean under 50 or even 65

75 is way to old to be making such important decisions


----------



## Ukrainiandude

m3s said:


> Old hag finally admits she was wrong on inflation


Jail time?


----------



## m3s

Ukrainiandude said:


> Jail time?


She'll serve her time in hell

Yellen Earned $7.2 Million In Speaking Fees Over Last Two Years



> Janet Yellen, President-elect Joe Biden’s nominee for treasury secretary, has earned more than *$7 million in speaking fees from banks and large companies since leaving the Federal Reserve in 2018,* a record that will force Yellen to seek permission before working at Treasury with some of Wall Street’s largest financial institutions.


----------



## HappilyRetired

She wasn't wrong, she lied. Everyone knew inflation was nowhere near what she had claimed.


----------



## m3s

HappilyRetired said:


> She wasn't wrong, she lied. Everyone knew inflation was nowhere near what she had claimed.


Naw some people on this forum believed her and went even further saying inflation was good


----------



## HappilyRetired

m3s said:


> Naw some people on this forum believed her and went even further saying inflation was good


Some people will eagerly believe every lie that they're told.


----------



## Ukrainiandude

how about Canada closing downtown to non essential vehicles and making people to take public transit. Next step is to develop public transportation. No one is benefiting from plethora of stinky pick ups on the roads moving a single arse around.
*Germans get €9-a-month travel in response to energy price rises








Germans get €9-a-month travel in response to energy price rises


For the next three months, public transport costs are being cut to tackle the soaring cost of living.



www.bbc.com




*


----------



## james4beach

Ukrainiandude said:


> how about Canada closing downtown to non essential vehicles and making people to take public transit.


Cities like Toronto definitely need to impose limits on cars entering the downtown. It's ridiculous. Having lived in Toronto for years I can tell you that the residents who actually live in the city center don't have too many cars themselves. It's the commuters and shoppers who all insist on driving (often alone) into the city, causing a disgusting mess of traffic, smog, pollution in the air.

Toronto needs to somehow limit car access into the city center


----------



## MrBlackhill

Interesting read about inflation.

Profit-price spiral would be the main issue. Wage-inflation spiral is just a story we tell to justify low wages... while big businesses are actually increasing their profits.









Who’s profiting from the cost of living crisis? Right now, it’s big business owners | Christine Berry


We’ve built an economy where life-or-death decisions on prices and wages are driven by shareholders’ interests, says writer Christine Berry




www.theguardian.com













Corporate Profits Drive 60% of Inflation Increases


Higher prices aren't just a result of supply chain chaos or government spending. Inflation is being driven by the pricing power and higher profits of corporations, costing $2,126 per American.




mattstoller.substack.com


----------



## damian13ster

The article makes no sense. They are essentially comparing profits that have happened in Q2 2021 to today's inflation.
They chose a single data point to fit their pre-determined point of view.
The profit growth has significantly slowed since then, and as seen by recent earnings from biggest retailers in the world, the margins are contracting.

If you want to hear the story of inflation - listen to Walmart's and Target's most recent earnings


----------



## m3s

damian13ster said:


> The article makes no sense. They are essentially comparing profits that have happened in Q2 2021 to today's inflation.
> They chose a single data point to fit their pre-determined point of view.
> The profit growth has significantly slowed since then, and as seen by recent earnings from biggest retailers in the world, the margins are contracting.


Clickbait journalists writing to to emotional reactions

There are far better sources of information who don't need legacy ad revenue to survive nowadays


----------



## damian13ster

The only monopolies/oligopolies in this country are the one that government has created

dairy market
airlines
telecom

Let the competition in and allow Canadians to access cheaper services/goods


----------



## sags

Lol…….pray tell what the rate of inflation will be in August 2023 ?


----------



## MrBlackhill

But why profits nearly doubled since 2020?









Nonfinancial Corporate Business: Profits After Tax (without IVA and CCAdj)


Graph and download economic data for Nonfinancial Corporate Business: Profits After Tax (without IVA and CCAdj) (NFCPATAX) from Q1 1947 to Q2 2022 about after tax, CCADJ, IVA, tax, nonfinancial, business, corporate, GDP, and USA.



fred.stlouisfed.org


----------



## off.by.10

james4beach said:


> Cities like Toronto definitely need to impose limits on cars entering the downtown. It's ridiculous. Having lived in Toronto for years I can tell you that the residents who actually live in the city center don't have too many cars themselves. It's the commuters and shoppers who all insist on driving (often alone) into the city, causing a disgusting mess of traffic, smog, pollution in the air.


Funny, I see the opposite in Montreal. In many areas, nearly all the on street parking now requires a permit and is basically reserved for residents. It has become extremely difficult to visit someone there by car because you just can't park. But the residents themselves have plenty of cars. They don't want _others_ to drive in _their_ city but they sure want to keep on driving, whatever they claim.

Also, almost nobody drives into Montreal for shopping anymore. It takes a stupid amount of time and there are better options in the suburbs. Public transit takes an even more stupid amount of time. I use it so I know very well.


----------



## Covariance

MrBlackhill said:


> But why profits nearly doubled since 2020?
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Nonfinancial Corporate Business: Profits After Tax (without IVA and CCAdj)
> 
> 
> Graph and download economic data for Nonfinancial Corporate Business: Profits After Tax (without IVA and CCAdj) (NFCPATAX) from Q1 1947 to Q2 2022 about after tax, CCADJ, IVA, tax, nonfinancial, business, corporate, GDP, and USA.
> 
> 
> 
> fred.stlouisfed.org


I believe what you are after is easier to assess in terms of what economists look at which is corporate profits as a percentage of GDP. The links below provide a long term time series. 








Shares of gross domestic income: Corporate profits with inventory valuation and capital consumption adjustments, domestic industries: Profits after tax with inventory valuation and capital consumption adjustments


Graph and download economic data for Shares of gross domestic income: Corporate profits with inventory valuation and capital consumption adjustments, domestic industries: Profits after tax with inventory valuation and capital consumption adjustments (W273RE1A156NBEA) from 1929 to 2020 about...



fred.stlouisfed.org





And at the aggregate level corporate profits are easy to see in the quarterly GDP releases. The most recent GDP release clearly shows corporate profits in retreat (in the press release and table 10)




__





Loading…






www.bea.gov


----------



## MrBlackhill

m3s said:


> Clickbait journalists writing to to emotional reactions
> 
> There are far better sources of information who don't need legacy ad revenue to survive nowadays


Well, honestly, I pointed out that article only as a matter of sharing a different perspective, a different opinion. But that doesn't mean it's right or wrong.

Anyways, every source of information is most likely just an opinion, when it comes to economics. People use data as facts, but data means nothing without an interpretation, which means an opinion. As much as an opinion doesn't mean much without data. In all the complexity of economics, there are so many ways to look at data and come to conclusions.

No one truly understand all the causes of the current situation. Obviously, some understand more than others, but the ones with the most knowledge who understand the most the situation are also the ones who have the humility to acknowledge that it's very complex and they can't truly understand all the factors in play. It's the Dunning-Kruger effect.











And how we view different sources of information is all about our personality, behaviours and cognitive biases. Personally, I read every type of source of information so that I can gather different opinions and perspective. And I always assume they are wrong, to try to minimise the confirmation bias from my own perspective and opinion. I also always assume that I, myself, am wrong.

It's honestly way too easy to believe in the opinion of someone who has a high confidence, a great ability to play with stats and data, and a great eloquence.

Take Lyn Alden for instance. She's great, she's awesome, I like her. But still, we are just humans trying to make sense of all this. No one can truly predict with accuracy what's coming next. No one can truly critic the decisions that have been taken because we don't know the extent of all the factors in play. A good decision for someone is a bad decision for someone else.


----------



## m3s

MrBlackhill said:


> And how we view different sources of information is all about our personality, behaviours and cognitive biases. Personally, I read every type of source of information so that I can gather different opinions and perspective. And I always assume they are wrong, to try to minimise the confirmation bias from my own perspective and opinion. I also always assume that I, myself, am wrong.
> 
> It's honestly way too easy to believe in the opinion of someone who has a high confidence, a great ability to play with stats and data, and a great eloquence.
> 
> Take Lyn Alden for instance. She's great, she's awesome, I like her. But still, we are just humans trying to make sense of all this. No one can truly predict with accuracy what's coming next. No one can truly critic the decisions that have been taken because we don't know the extent of all the factors in play. A good decision for someone is a bad decision for someone else.


Why read all the clickbait written by random journalists.

There are many people like Lyn Alden who are consistently providing more signal and less noise. I chose to focus on those people and there are many of them to get many perspectives. If you try to follow everyone in mainstream media you will drown in noise

Those random journalists aren't even trying to convey an accurate piece of information they're just trying to fill a page with some words to briefly capture your attention and they know most just are attracted by simpleton clickbait.

I'll listen to people with a history of being correct and providing me with good information. There are people on here who are consistently confidently wrong who don't even register on your chart


----------



## damian13ster

The latest data from US:
Productivity: -7.5%
Unit labor costs: +12.6%


----------



## Thal81

I'm no economist but that doesn't sound good.


----------



## m3s

MrBlackhill said:


> Interesting read about inflation.
> 
> Profit-price spiral would be the main issue. Wage-inflation spiral is just a story we tell to justify low wages... while big businesses are actually increasing their profits.
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Corporate Profits Drive 60% of Inflation Increases
> 
> 
> Higher prices aren't just a result of supply chain chaos or government spending. Inflation is being driven by the pricing power and higher profits of corporations, costing $2,126 per American.
> 
> 
> 
> 
> mattstoller.substack.com


Came across that article again by accident as I had the tab still open

That article is from 2021 lol. Things have changed so much nowadays in 6 months I'm sorry not gonna read that

That was written months before Russia invaded Ukraine.


----------



## sags

Oh look…there is Canada down near the bottom, and even better news is Canadian producers and governments benefit $$$$ from higher commodity prices.


----------



## m3s

sags said:


> Oh look…there is Canada down near the bottom, and even better news is Canadian producers and governments benefit $$$$ from higher commodity prices.


I don't think you understand what inflation numbers mean. Plus or minus 2% with inflation is just a matter or vague measurements

If you ran the country we would be up there with Turkey thinking inflation is good somehow

It's not good sags. It's not good for GICs. It's good if you bought commodities instead


----------



## damian13ster

m3s said:


> I don't think you understand what inflation numbers mean. Plus or minus 2% with inflation is just a matter or vague measurements
> 
> If you ran the country we would be up there with Turkey thinking inflation is good somehow
> 
> It's not good sags. It's not good for GICs. It's good if you bought commodities instead


Also, Canadian inflation basket is different. Cars for example. There was a point when US inflation print was 1.3% higher than Canadian only because their basket has used cars and Canadian doesn't. Just used cars accounted for that much...


----------



## m3s

damian13ster said:


> Also, Canadian inflation basket is different. Cars for example. There was a point when US inflation print was 1.3% higher than Canadian only because their basket has used cars and Canadian doesn't. Just used cars accounted for that much...


Yea that's what I mean

The rounding and measuring error should be like +/- 5% at least. We know the data is not accurate or precise at all - all you can look at is trends

Inflation is up across the board. Canada is no different. Turkey is the outlier because they print Liras like Trudeau only dreams


----------



## Covariance

Unexpected inflation is what one wants to be concerned about. And in conjunction with such conditions the volatility of expectations (said differently the uncertainty of forecast inflation).

If the inflation rate is predictable it will be priced into people's behaviour, business investment, and financial assets. There is nothing magical about 2% target.

What matters is wild deviations and as critically people's confidence in the inflation they will face in the years ahead.


----------



## sags

Some people want higher commodity prices (oil, grains, potash) but don't want the inflation that goes hand in hand with those higher prices ?

The price of oil (fuel) is a major driver of inflation, but Canada also receives windfall revenues when oil prices rise.

Someone can correct me if I am wrong, but I believe the royalty regime for oil was restructured years ago to a sliding scale calculation, to reflect lower royalty rates when prices are low and are ramped up when prices are high. The change was affected to support producers during times of low prices.

Alberta announced they wiped out their budget deficit due to higher oil revenues.

Personally, inflation doesn't affect us much at all, due to how our income and expenses are structured.

Other people will experience financial stress due to inflation, depending on their personal finances and the choices they have made and will make.

What the government could and should do is redistribute the windfall revenue to those in need due to inflationary increases.

Typically, that would be low earners, people collecting social benefits that aren't indexed to inflation, .....et al.

It won't surprise me if the Liberals announce extra financial aid for some target groups.

They already increased the OAS benefit by 10% for seniors aged 75 and over. I am not sure why they chose age over income as the determining factor.

Perhaps there are valid reasons, or perhaps they plan to restructure the OAS benefit to extend it to all seniors over 65, while applying a means test.


----------



## sags

Inflation psychology is important, but it sounds like inflation is peaking as supply chains disentangle and consumers don't appear to be too distraught yet.

Many economists and fund managers are saying that a mild "garden variety" recession is expected and would snuff out inflation rather quickly.

Regardless of inflation, I still think the bubbles are going to continue to deflate......real estate, meme stocks, collectibles, "all things bubble".


----------



## m3s

sags said:


> Inflation psychology is important, but it sounds like inflation is peaking as supply chains unravel and consumers don't appear to be too distraught yet.
> 
> Many economists and fund managers are saying that a mild "garden variety" recession is expected and would snuff out inflation rather quickly.
> 
> Regardless of inflation, I still think the bubbles are going to continue to deflate......real estate, meme stocks, collectibles, "all things bubble".


No you thought inflation was good for GICs last year

Why bother telling us what you think about inflation this year

None of what you said makes any sense. Just stop


----------



## sags

Wrong.......I said that inflation inspires higher interest rates (which is already happening) and higher interest rates are good for GICs.

I also said that rising inflation only affects purchasing power if you spend the capital on those items that are inflating in price.

Since we don't plan on cashing in our GICs to buy food or fuel......inflation is irrelevant to the GICs.

Maybe assets prices will fall considerably and we will decide to cash in the GICs and buy something on sale.

Even without that consideration, many people hold GICs as "just in case money" and higher interest rates are a benefit to them.


----------



## sags

m3s said:


> No you thought inflation was good for GICs last year
> 
> Why bother telling us what you think about inflation this year
> 
> None of what you said makes any sense. Just stop


It is happening before your eyes and you still don't believe it.

You are stuck deep into a "libertarian rabbit hole" where you are convinced the world is falling apart.

It isn't and wont be, as depressions, recessions, sovereign defaults, high inflation, and currency collapses all work themselves out eventually.

You should stop watching videos from the bitcoin bros. and Pierre P. and get informed from better sources.

You are young and can afford mistakes, but time is your most precious asset so don't waste it on the latest fads.

But don't take my word for it. Listen to the really smart people on CMF who are well advanced ahead of my knowledge base.

Frankly, to narrow it down to 2 members.......I would recommend James4B because he is very mature, informed, and savvy for his age and AltaRed because his perspective is looking back with a lifetime of experience and knowledge, and there are others as well. (no offense for not naming everyone)

I also miss member Humble Pie for her indepth knowledge of options trading and generally good financial advice.

CMF is a good financial resource, but it can't help people determined to swim against the tide.


----------



## m3s

sags said:


> Wrong.......I said that inflation inspires higher interest rates (which is already happening) and higher interest rates are good for GICs.
> 
> I also said that rising inflation only affects purchasing power if you spend the capital on those items that are inflating in price.


Here's what you actually said in this very same thread last year

That's still not how inflation works by the way. You don't seem to understand that inflation would have to be negative to ever gain purchasing power

The simple math is that any % less than inflation is negative real return. Please learn this or at least stop spreading misinformation



sags said:


> *Sounds like good news for people who have their savings stashed in GICs.*





sags said:


> They gain more in interest than they spend on inflation.
> 
> If someone has $100,000 in GICs, they don't have to run out and spend it right away.
> 
> Maybe they will use the interest income to pay the monthly payment on a debt....like a 7 year car loan with a low fixed interest rate.
> 
> Maybe they will use the interest to buy a vehicle that has a discount for cash only.
> 
> Maybe they will spend it on Black Friday sales on items that are discounted by 50%.


----------



## londoncalling

Thanks for sharing. I would have expected we would be closer to Australia who is also an exporting nation. 1.7% spread doesn't sound like a lot but it certainly is a lot. The spread was even wider in March. A longer term chart would be needed to get a better understanding of the situation as this 2 month yoy snapshot doesn't provide a clear enough picture.


----------



## m3s

londoncalling said:


> Thanks for sharing. I would have expected we would be closer to Australia who is also an exporting nation. 1.7% spread doesn't sound like a lot but it certainly is a lot. The spread was even wider in March. A longer term chart would be needed to get a better understanding of the situation as this 2 month yoy snapshot doesn't provide a clear enough picture.


You have to look at trends because both countries are not being measured by the same method

Unless we can see how the spread is trending it's a meaningless comparison. If everyone weighs themselves on their own scales on different planets then all we can compare is the trends.

So did Canada's inflation increase less than Australia's? Turkey's certainly changed more so they clearly have a serious problem


----------



## sags

_That's still not how inflation works by the way. You don't seem to understand that inflation would have to be negative to ever gain purchasing power_

Prices of the assets we purchase with the GICs would have to be less than the interest collected........which is often the case during recessions.

In past downturns, I remember steep discounts on new vehicles from GM and Chrysler if paid in cash.

In tough times......money talks.


----------



## m3s

sags said:


> _That's still not how inflation works by the way. You don't seem to understand that inflation would have to be negative to ever gain purchasing power_
> 
> Prices of the assets we purchase with the GICs would have to be less than the interest collected........which is often the case during recessions.
> 
> In past downturns, I remember steep discounts on new vehicles from GM and Chrysler if paid in cash.
> 
> In tough times......money talks.


That's called deflation sags. I agree deflation is good for GICs. Just wow

As you alluded to Black Friday 50% off sales making inflation good for GICs and dealerships having steep discounts lol......... If something is already a rip off don't be fooled by a % discount. That's how retail manipulates financially clueless soccer moms but you've been on a financial forum for 10 years. If a business sells something at a loss there's a reason for it. Maybe it's a Chevy Bolt that catches on fire

You should google cash discounts on vehicles because there's no such thing. 9k Platinum Protection is like a hole in one for a car salesman. But free coffee


----------



## MrMatt

sags said:


> _That's still not how inflation works by the way. You don't seem to understand that inflation would have to be negative to ever gain purchasing power_
> 
> Prices of the assets we purchase with the GICs would have to be less than the interest collected........which is often the case during recessions.
> 
> In past downturns, I remember steep discounts on new vehicles from GM and Chrysler if paid in cash.


Didn't happen.
The "cash discount" was simply the financing discount, handed to you instead of the bank. Even then it was often less than the bank discount.

Instead of putting $5k into making it look like 0.9% financing (Though the official rate on the loan might be 6%) They simply gave you that money.

I personally did this because the "cash discount" was less than the financing discount, then a week after I bought the car I paid off the loan in full. At the time the cash discount was like $2k and the financing discount was $5k.

Unless there are supply constraints (like now), cars are always "on sale".


----------



## m3s

MrMatt said:


> I personally did this because the "cash discount" was less than the financing discount, then a week after I bought the car I paid off the loan in full. At the time the cash discount was like $2k and the financing discount was $5k.
> 
> Unless there are supply constraints (like now), cars are always "on sale".


I did the same with my current car

I told the salesmen I'm not dealing with any theatrics but I would play along to make his job easy with the financial overlords. I agreed to take the loan for a discount and he asked me to wait x day before paying it off so he'd get his bonus for selling the finance. When the financial overlords tried to add all the surprise fees at the ends he had to remove it for me or else I could just pay off the loan early and he knew it

Dealerships have mastered the art of psychological financial manipulation


----------



## sags

So if a person pays cash for a vehicle, they should get a $5,000 discount if they didn't use financing ?


----------



## MrMatt

sags said:


> So if a person pays cash for a vehicle, they should get a $5,000 discount if they didn't use financing ?


They should get a discount roughly equivalent to the financing discount.
They often don't actually want you to do this, and might not have that promo listed.


When I bought my Chevy the loan was with BMO, and it was pretty clear, the actual stated value of the loan was like $5k less than the "amount financed at 0.9% or whatever it was.
Ford runs their own Ford Credit loan system.


----------



## like_to_retire

sags said:


> So if a person pays cash for a vehicle, they should get a $5,000 discount if they didn't use financing ?


I think it's actually the other way around. The dealers make more money when you take a loan. They don't seem to want you to pay by cash. I always pay cash for my vehicles and they never like it. They only seem to give me a good discount if I take the loan, which I never do.

ltr


----------



## m3s

sags said:


> It is happening before your eyes and you still don't believe it.
> 
> But don't take my word for it. Listen to the really smart people on CMF who are well advanced ahead of my knowledge base.
> 
> Frankly, to narrow it down to 2 members.......I would recommend James4B because he is very mature, informed, and savvy for his age and *AltaRed because his perspective is looking back with a lifetime of experience and knowledge, and there are others as well. (no offense for not naming everyone)*
> 
> I also miss member Humble Pie for her indepth knowledge of options trading and generally good financial advice.
> 
> CMF is a good financial resource, but it can't help people determined to swim against the tide.


Sure sags. I like discussing things with james4beach, AltaRed, humble etc. Talking with you is like talking to a brick wall

If you won't read anything I say maybe you should actually read what AltaRed said shortly after your comment on inflation being good for GICs

You won't because you don't seem to read anything. 



AltaRed said:


> *Sags is my Ignore list so I don't see his posts and don't know the context but clearly inflation is terrible for GIC returns. 3% inflation and 2% GICs is terrible. So is 5% inflation and 3% GICs. *
> 
> The context might be speculation that high inflation will result in central banks having to raise short term interest rates so much to beat inflation back to 2% that the bond yield curve will then result in 4% GIC interest rates. Entirely possible but by then the compounded hemorrhage on old GICs has already put the funds in a significant loss position in real terms. A better situation would be 1% inflation and 1.75% GIC rates on a long term basis.





OptsyEagle said:


> Yeah, when read post about the relationship between inflation and GICs I kind of shook my head. Every time I see the most recent announcement on inflation I go "ouch" and think of my GICs. As AR indicated, I don't own them to make money, I own them so I always have some. I agree, however, these days I feel like I will always have less and less...but at least it is something.





MrMatt said:


> That's the thing, most people don't understand why high inflation is bad, or even really realize it.
> I've recently heard lots of complaints about inflation, but indirectly about how expensive "things are", they're talking about it in the aisles of stores.
> 
> But people notice a 10% increase in price way less than a 10% drop in property values.


----------



## sags

Wow........a projected 8% increase in cost of living for US Social Security is projected for next year, following a 5.9% increase this year.

If I recall the CPP and OAS paid a similar cola last year as the US, so some hefty increases may be coming. OAS is quarterly so the next one is in August.

The CPP will adjust to inflation in January 2023.









Another record-high Social Security cost-of-living adjustment in 2023 could put more money in retirees' wallets, impact program's funds


Early signs point to a higher Social Security cost-of-living adjustment for 2023. That may put more money in retirees' wallets and impact the program's funds.




www.cnbc.com


----------



## londoncalling

sags said:


> Some people want higher commodity prices (oil, grains, potash) but don't want the inflation that goes hand in hand with those higher prices ?


Some realize that higher commodity prices are often inflationary for consumers and own shares as a hedge. I personally don't like when anything fluctuates wildly like we have seen with inflation and commodity prices but it does happen. My dividends from these companies take the sting out of higher fuel, grocery and lumber prices. When the commodity cycle heads south I am grateful that the price of goods aren't climbing at a stupid rate. When the share price gets too high its time to cash out and wait for the next down trend.


----------



## MrMatt

sags said:


> Wow........a projected 8% increase in cost of living for US Social Security is projected for next year, following a 5.9% increase this year.
> 
> If I recall the CPP and OAS paid a similar cola last year as the US, so some hefty increases may be coming. OAS is quarterly so the next one is in August.
> 
> The CPP will adjust to inflation in January 2023.
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Another record-high Social Security cost-of-living adjustment in 2023 could put more money in retirees' wallets, impact program's funds
> 
> 
> Early signs point to a higher Social Security cost-of-living adjustment for 2023. That may put more money in retirees' wallets and impact the program's funds.
> 
> 
> 
> 
> www.cnbc.com


So if the government massively increases the amount of handouts, what will that do to inflation?
The government is handing out billions, pushing inflation sky high, we can't fix this with interest rates alone.


----------



## sags

The sky isn't falling. This is a minor bump in the road of life compared to what us old folks have lived through.

Heck.......I used to walk barefoot 5 miles to school and back home in winter blizzards.......and it was uphill both ways.


----------



## MrBlackhill

sags said:


> what us old folks have lived through.
> 
> Heck.......I used to walk barefoot 5 miles to school and back home in winter blizzards.......and it was uphill both ways.


But back in the 50s people had a house, a car, a family of 6 and lived on one income, even if it was the median income.

Now, we have two incomes, people aren't able to afford a house, have two cars because each parent have a job in opposite directions, and they ask themselves if they can afford a second child without going broke.

Don't tell me it's because of our living standards. I have no TV. I have no computer. I go out at free activities only. I never eat out, no take out, all food from home. All of our furniture was bought used at very cheap prices. We have one car, a Hyundai Accent hatchback 2014 bought used that we'll keep for another 10-15 years. Yes, I have a cellphone and Internet, because internet today is like electricity.

There's absolutely no way we could make it with one income and 6 kids, definitely not at median income.


----------



## sags

Wages haven’t kept up with inflation and productivity gains. The rich got richer and convinced workers that is the natural order of things. The rich pump money into all the political parties so they maintain control regardless of who wins.

It can change but will take generations, a return of strong unions to a voice at the table, and reforming the capitalist system to value work as highly as ownership.


----------



## sags

The reality is a small number of wealthy own almost everything and won’t be happy until they own it all.

Sharing their wealth with those who earned it for them in sweat equity isn’t part of their DNA.

We are fighting for the leftovers.


----------



## damian13ster

Yes, inflation got too high.
The inflation hurts lower middle class the most, and that's why it is starting to disappear, increasing wealth gap.

The change has to happen - inflation target needs to be lowered, and Bank of Canada target should be on inflation alone, with automated changes to the policy so that politics don't get in the way.
Formula can be created using inflation, gdp, labor force participation that will adjust interest rates almost automatically. If Bank of Canada governor fails to control inflation for more than 6-12 consecutive months - automatically gets fired.
No government intervention, no poltiical interference - simply if you fail at your job, you automatically get fired.

On fiscal policy deficits and debt need to be hard capped. There are countries that already do that. The actions if deficit/debt exceed certain level are clearly outlined in constitutions. 
That should control the idiots who believe budgets will balance themselves and breaking the constitution is prosecuted as treason


----------



## sags

Listen to the wailing on business news these days. Wages are going up…oh my goodness…wages are going up. 

Whatever shall we do….says the CEO earning obscene amounts of money and bonuses. When a CEO earns more by lunch on his first day of work in the year than their employees do all year….it is a problem.


----------



## londoncalling

damian13ster said:


> Yes, inflation got too high.
> The inflation hurts lower middle class the most, and that's why it is starting to disappear, increasing wealth gap.
> 
> The change has to happen - inflation target needs to be lowered, and Bank of Canada target should be on inflation alone, with automated changes to the policy so that politics don't get in the way.
> Formula can be created using inflation, gdp, labor force participation that will adjust interest rates almost automatically. If Bank of Canada governor fails to control inflation for more than 6-12 consecutive months - automatically gets fired.
> No government intervention, no poltiical interference - simply if you fail at your job, you automatically get fired.
> 
> On fiscal policy deficits and debt need to be hard capped. There are countries that already do that. The actions if deficit/debt exceed certain level are clearly outlined in constitutions.
> That should control the idiots who believe budgets will balance themselves and breaking the constitution is prosecuted as treason


I agree with a lot of your post on inflation control. Formulas perhaps should be more than guidelines but there still should be exceptions to the rule. However, many central banks ignored their mandate in late 2021 and as such we are behind the curve on inflation control. They will reign it in but it may result in a recession.

However, I don't quite follow your example of hard caps on deficit and debt. One example that comes to mind is the US. Maybe I am mistaken but I believe they have restrictions on debt limits. This is where I may be out to lunch on what you mean by debt caps. For most of recent history the US has repeatedly passed legislation to increase the debt ceiling. How many times has raising the debt ceiling in the US come with increased lobbying, gerrymandering, market manipulation and gridlock before the cap is raised in the final hour? The only end result is more money printing and a greater divide between the haves and the have nots. Perhaps there are other nations that have been able to navigate the economy with rate controls. I don't know of any off hand but they must be out there. In all fairness, I understand that the US needed to raise the debt ceiling in some instances to avoid default. 🤷‍♂️ If I misunderstood your post please set me straight.


----------



## m3s

sags said:


> The reality is a small number of wealthy own almost everything and won’t be happy until they own it all.
> 
> Sharing their wealth with those who earned it for them in sweat equity isn’t part of their DNA.
> 
> We are fighting for the leftovers.


Check out the World Economic Forum

They are opening advocation for The Great Reset

"You'll own nothing, and you'll love it!"


----------



## sags

I retired in December 2005.

Since I was home all day I started listening to the business channels in the background. Started with BNN (ROB back then I think) and then went CNBC because it was more interesting.

I remember in 2007 when there were rumours of troubles ahead for the US housing market, there were only a few people on the shows talking about big problems ahead. I remember Peter Schiff was the most prominent among them. They were all dismissed as "gloom and doom" guys by everyone else.

The collapse started slowly and they all said....it is only subprime borrowers and won't amount to much. What they didn't know at the time was the derivative structure that had been built behind MBS securities. They found about "tranches" and all the rest of it as it collapsed.

Then the poo hit the fan and the housing and liquidity crisis ensued and we all know how that went.

Fast forward to today and listening to CNBC and it is a five alarm fire there.

Every analyst, fund manager, or talking head anchor is forecasting gloom and doom and they sound scared.

I have never seen it like that....almost full scale panic mode with nobody taking the other view.

To quote Trailer Park Boys Jim Lahey......

“We’re sailing into a **** typhoon Randy. We’d better haul in the jib before it gets covered in ****.”

“You know what a **** barometer is, Bubs? It measures the **** pressure in the air. You can feel it. Listen, Bubs. Hear that? Sounds of the whispering winds of ****.”


----------



## sags

We sailed through the 2007 crisis pretty well, basically eating popcorn and watching US banks fail and their economy fall apart.

Will we ride the next one out as well ? I mean...we have oil, we have grains, we have natural gas, we have hydro and water....we should be good...yes ?


----------



## damian13ster

londoncalling said:


> I agree with a lot of your post on inflation control. Formulas perhaps should be more than guidelines but there still should be exceptions to the rule. However, many central banks ignored their mandate in late 2021 and as such we are behind the curve on inflation control. They will reign it in but it may result in a recession.
> 
> However, I don't quite follow your example of hard caps on deficit and debt. One example that comes to mind is the US. Maybe I am mistaken but I believe they have restrictions on debt limits. This is where I may be out to lunch on what you mean by debt caps. For most of recent history the US has repeatedly passed legislation to increase the debt ceiling. How many times has raising the debt ceiling in the US come with increased lobbying, gerrymandering, market manipulation and gridlock before the cap is raised in the final hour? The only end result is more money printing and a greater divide between the haves and the have nots. Perhaps there are other nations that have been able to navigate the economy with rate controls. I don't know of any off hand but they must be out there. In all fairness, I understand that the US needed to raise the debt ceiling in some instances to avoid default. 🤷‍♂️ If I misunderstood your post please set me straight.


Estonia, and Poland are ones I am familiar with. The latter is actually getting closer to the 'soft' ceiling


----------



## m3s

sags said:


> Fast forward to today and listening to CNBC and it is a fire alarm fire there.
> 
> Every analyst, fund manager, or talking head anchor is forecasting gloom and doom and they sound scared.
> 
> I have never seen it like that....almost full scale panic mode with nobody taking the other view.


Yea cause we're below the mean now sags. The good analysts don't need ad revenue to feed themselves and panic sells ads. CNBC is not your friend. 

All you have to do is scale way out and draw the mean trend. We're below the trend now. Like Warren said “be fearful when others are greedy, and greedy when others are fearful.”

I was selling last fall which put me in a huge position of power this year. What do you think I'm doin now.


----------



## KaeJS

m3s said:


> Yea cause we're below the mean now sags. The good analysts don't need ad revenue to feed themselves and panic sells ads. CNBC is not your friend.
> 
> All you have to do is scale way out and draw the mean trend. We're below the trend now. Like Warren said “be fearful when others are greedy, and greedy when others are fearful.”
> 
> I was selling last fall which put me in a huge position of power this year. What do you think I'm doin now.


You think we are below the trend and you are buying?

I think we haven't even started to see the blood yet. I'm still buying, but I'm just buying in the normal amounts I buy every week. I'm certainly not adding extra or in any rush...

Things will get cheaper


----------



## MrMatt

sags said:


> I remember in 2007 when there were rumours of troubles ahead for the US housing market, there were only a few people on the shows talking about big problems ahead. I remember Peter Schiff was the most prominent among them. They were all dismissed as "gloom and doom" guys by everyone else.
> 
> ...
> 
> I have never seen it like that....almost full scale panic mode with nobody taking the other view.


When there is almost complete consensus, with no criticism or no questioning it. It's often wrong.


----------



## sags

damian13ster said:


> Estonia, and Poland are ones I am familiar with. The latter is actually getting closer to the 'soft' ceiling


Inflation in Poland is 14% and rising. Inflation in Estonia is 19.1%.....the highest in the Eurozone.


----------



## sags

One private equity manager said they are advising their clients to sell everything and put all their capital into US Treasuries.

That isn't advice they give very often, as it costs them money. Maybe they figure it is better than angry clients with steep losses leaving their firm forever.

Maybe they are all wrong and it will be sunshine and roses........one can always hope.


----------



## damian13ster

sags said:


> Inflation in Poland is 14% and rising. Inflation in Estonia is 19.1%.....the highest in the Eurozone.


Yes. Poland gained 10% of population in 1month (all refugees) and the debt is increasing incredibly fast (government's fiscal policy is ran by same mathematical illiterate as Trudeau).

Central bank started to act after first covering their eyes and pretending problem doesn't exist, and increased interest rate from 0.1 to 6.0%.

Sadly, fiscal policy negates that as they have given people vacation from mortgages, increased social benefits, increased minimal wage, and are doing absolutely everything to pump up the inflation.

So don't look at it now - the government is doing what the idiots in Canada are doing.
What's worth noting is what is going to happen once they get to that ceiling. So far they are trying to avoid it by having publicly owned companies issue debt rather than government itself, but it can only go for so long.
Only then you will see what effect such cap has on inflation.


----------



## m3s

KaeJS said:


> You think we are below the trend and you are buying?
> 
> I think we haven't even started to see the blood yet. I'm still buying, but I'm just buying in the normal amounts I buy every week. I'm certainly not adding extra or in any rush...
> 
> Things will get cheaper


I hope things do get cheaper.

Buying normal amounts because we are below long term trends. I'm averaging in just like I was averaging out last year when everyone was ecstatic

There's certainly no rush but there's also big money to be made during a bear market.


----------



## sags

The BOC projects mortgage payments will rise 30% within the next 5 years as mortgages are renewed.

Interest rates increases have a negative impact on monthly payments even when house prices decline.

Anyone who can't afford a home today, likely won't be able to afford one in 5 years either.


----------



## Thal81

sags said:


> Anyone who can't afford a home today, likely won't be able to afford one in 5 years either.


Not so sure about this, as interest rates increase and credit tightens, demand will go down, and so will house prices. Maybe the drop in prices will compensate for higher mortgage rates?


----------



## nathan79

sags said:


> Anyone who can't afford a home today, likely won't be able to afford one in 5 years either.


Hmm... not necessarily. The more cash you have saved up, the bigger the increase of affordability when prices drop.

Let's say the home I want is 800K and I have down payment of 400K, which leaves a mortgage of 400K. I earn 70K, which means the mortgage would be 5.7x of my income. I doubt I would qualify for that, since the loan-to-income ratio is usually capped at 450%

Let's say home prices correct 30%, so now the 800K house is 560K. I was also earning interest on my down payment while I waited, so I have a down payment of 410K now, leaving a mortgage of just 150K or 2.1x my income.

A more extreme price drop would increase affordability even more for those with savings.


----------



## KaeJS

nathan79 said:


> Hmm... not necessarily. The more cash you have saved up, the bigger the increase of affordability when prices drop.
> 
> Let's say the home I want is 800K and I have down payment of 400K, which leaves a mortgage of 400K. I earn 70K, which means the mortgage would be 5.7x of my income. I doubt I would qualify for that, since the loan-to-income ratio is usually capped at 450%
> 
> Let's say home prices correct 30%, so now the 800K house is 560K. I was also earning interest on my down payment while I waited, so I have a down payment of 410K now, leaving a mortgage of just 150K or 2.1x my income.
> 
> A more extreme price drop would increase affordability even more for those with savings.


Who has that kind of cash?


----------



## nathan79

KaeJS said:


> Who has that kind of cash?


Could be many legitimate reasons...


proceeds from property/business sale
gifted money
inheritance
sold stocks/crypto
retired and/or wealthy
combination of above and/or good at saving

400K is the minimum down payment on a 2M house... and that's a normal house in Vancouver.


----------



## KaeJS

nathan79 said:


> Could be many legitimate reasons...
> 
> 
> proceeds from property/business sale
> gifted money
> inheritance
> sold stocks/crypto
> retired and/or wealthy
> combination of above and/or good at saving
> 
> 400K is the minimum down payment on a 2M house... and that's a normal house in Vancouver.


Most people don't have this kind of money.


----------



## m3s

sags said:


> The BOC projects mortgage payments will rise 30% within the next 5 years as mortgages are renewed.
> 
> Interest rates increases have a negative impact on monthly payments even when house prices decline.
> 
> Anyone who can't afford a home today, likely won't be able to afford one in 5 years either.


This article is based on cherry picked data focused on Canadians with a five-year term taken out at banks in 2020-21, when rates were at record lows.

Basically if you specifically took out a 5-year mortgage during record low interest rates in the depths of an economic and public health crisis propped by insane fiat money printing.. your mortgage will increase substantially when you renew when the term is up

No **** sherlock. If people didn't know this already they probably should stop thinking CNBC is financial advice when it is really ad revenue entertainment


----------



## MrBlackhill

nathan79 said:


> Let's say the home I want is 800K and I have down payment of 400K, which leaves a mortgage of 400K. I earn 70K, which means the mortgage would be 5.7x of my income. I doubt I would qualify for that, since the loan-to-income ratio is usually capped at 450%
> 
> Let's say home prices correct 30%, so now the 800K house is 560K. I was also earning interest on my down payment while I waited, so I have a down payment of 410K now, leaving a mortgage of just 150K or 2.1x my income.


Depends on the scenario we're picturing.

Say the house I want is $1,000,000 and I currently have $200,000. I could've bought it with a 5-year fixed rate at 2% in 2020, but I waited. Mortgage would've been $3,387/month and I'd have paid $130,000 in principal and $73,400 in interests during the term.

Now say it's the end of 2022, the house drops to -20% to $800,000 and I have $210,000, but 5-year fixed rate reached 5%. Mortgage would be $3,431/month and I'd have paid $67,800 in principal and $138,100 in interests during the term.


----------



## off.by.10

KaeJS said:


> Who has that kind of cash?


Generally, people who require fewer shiny toys than you do ;-)


----------



## sags

Home prices had a long ways to fall to become "affordable" for most Canadians, even with record low interest rates.

Interest rates that double or triple means home prices must fall even further to become affordable.

A lot of the home buying was supported by parental gifts of down payments using their own homes as security for HELOCs.

That process will likely come to a complete halt as HELOCs become more expensive and the parent's homes depreciate in value as well.

The whole real estate market is being turned upside down and as we have found out in the past......the economic ripples extend far and wide.

Garth Turner lays out the situation pretty well in his latest blog article.

_Also today, the CB’s latest report warns everyone with a mortgage coming up for renewal – which is 37% of all indebted homeowners in the next year and a half – should brace for a big payment jump. The guessing is a minimum of 30% up to about 50%, depending on the existing rate borrowers have. In any case, it’ll hurt.

As for HELOCs, interest-only payments are set to double by Christmas from where they were on Groundhog Day. When the bank prime was 2.4%, those loans cost 2.9%. When prime is 5%, they will be at 5.5% or greater. *On a $200,000 borrowing, monthly payments rise from $400 to just under $1,000.*

Now imagine if you bought a rental property with 100% financing, using a HELOC to raise the 20% downpayment and an 80% LTV mortgage for the rest. Maybe even a variable one. Suddenly you are (a) in negative cash flow as the rent collected doesn’t come close to covering costs, and (b) the property’s value is falling weekly, wiping away the prospect of a capital gain. Whaddya do? Yup, list._





__





On a plate — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate







www.greaterfool.ca


----------



## nathan79

MrBlackhill said:


> Depends on the scenario we're picturing.
> 
> Say the house I want is $1,000,000 and I currently have $200,000. I could've bought it with a 5-year fixed rate at 2% in 2020, but I waited. Mortgage would've been $3,387/month and I'd have paid $130,000 in principal and $73,400 in interests during the term.
> 
> Now say it's the end of 2022, the house drops to -20% to $800,000 and I have $210,000, but 5-year fixed rate reached 5%. Mortgage would be $3,431/month and I'd have paid $67,800 in principal and $138,100 in interests during the term.


Yes, it depends on the amount of the housing correction AND the size of your down payment.

I've run two scenarios below with a minimum down payment, a typical 20% down payment, and a large down payment.

Scenario 1
Home Price: 800K @ 2%

Person A: 6.88% down (minimum allowed)
Person B: 20% down
Person C: 50% down











Scenario 2: (30% housing correction)
Home Price: 560K @ 5%

Same down payments in $ amount.

Person A: Down payment increased to 9.82%
Person B: Down payment increased to 28.57%
Person C: down payment increased to 71.43%











Comparing the mortgage payments above, a 30% correction means...

Person A saves $226/mo
Person B saves $384/mo
Person C saves $763/mo

As you can see, the larger your down payment, the larger your savings during a housing correction.


----------



## sags

What happens if mortgage interest rises to 7-8% or higher ?

If someone had $400,000 and wanted a home, why did they not already buy a home before the prices shot upwards the last couple of years ?


----------



## nathan79

sags said:


> What happens if mortgage interest rises to 7-8% or higher ?


At 7%, housing would probably correct by more than 30%?

But for what it's worth... 

Compared to Scenario 1...

Person A pays $398 more
Person B pays $92 more
Person C saves $573











At 8% the fabric of spacetime becomes unstable and Canada gets sucked into a black hole.


----------



## MrBlackhill

Yes there are so many variables in play.

If we look only at 3 variables:

How much down payment we have
How much the price crashed
How high are the rates
And we make 3 scenarios comparing only the mortgage monthly payment, not even how much interests you'll be paying (even if that should be the real matter), then we get this:

*Scenario 1*

Initial house price at $1,000,000 with a down payment of _x_% and mortgage rate at 2%
Against new house price at $800,000 with the same down payment you had but mortgage rate at 5%
Graph shows how much money you save monthly depending on the _x_% down payment you had
Turns out you don't save any money monthly unless your down payment was 27% ($270,000) or more
Obviously at 80% down payment ($800,000) you save the full mortgage as the price dropped to $800,000










*Scenario 2*

Initial house price at $1,000,000 with a down payment of 20% ($200,000) and mortgage rate at 2%
Against new house price that has dropped by _x_% with the same down payment you had ($200,000) but mortgage rate at 5%
Graph shows how much money you save monthly depending on the _x_% drop in price
Turns out you don't save any money monthly unless the price drops by 22% or more (house price $780,000 or less)
Obviously if the house price dropped by 80%, you save the full mortgage










*Scenario 3*

Initial house price at $1,000,000 with a down payment of 20% ($200,000) and mortgage rate at 2%
Against new house price that has dropped by 20% ($800,000) with the same down payment you had ($200,000) but mortgage rate at _x_%
Graph shows how much money you save monthly depending on the _x_% mortgage rate
Turns out you don't save any money monthly if the mortgage rate is more than 4.66%










Now, I personally have no clue of the relationship between Scenario 2 and Scenario 3 (how much will house price drop based on the current mortgage rate vs previous rate used as reference).

Also, even if you seem to save money due to a lower monthly mortgage payment, you still have to figure out if most of that money goes into interest payments instead of principal payments due to higher mortgage rates.

*Because, I mean... In a world where rates are always at 3% over the full 25-year mortgage, you'll pay as much interest on a $800,000 mortgage than in a world where rates are always 5% over the full 25-year mortgage of $455,000. That's pretty crazy.*

So, as I said in another thread, if you want to buy a house, I'm not sure where's the right balance because I'm not sure that higher rates solves any issue in the matter of affordability. We want higher rates only for the truly poor people who won't ever be able to afford a house anyways, but need higher rates on their savings because they also can't afford to invest their savings in stock market volatility, because they first need to accumulate an emergency fund. And it takes a while when rates are super low.

The house price issue is mainly a matter of supply, not rates. Build more houses. And don't allow investors to buy houses and then rent them. When a house or apartment is bought, there should be a family living there as a principal or second residence. No renting, it is not an investment.


----------



## KaeJS

Because people don't have that kind of cash on hand.


----------



## m3s

US CPI 8.6% highest in more than 4 decades and higher than expected again

Don't forget inflation is "transitory" cause by Chinese supply chain shock and now Russian war according to sags and CNBC

Nothing to do with printing unlimited magical fiat units


----------



## MrBlackhill

I think the point is that, yes, printing money causes inflation, *BUT* that's not the only factor causing inflation.

So the guy on the right should add that nuance.

Price = (Quantity of Money x Velocity of Money) / Quantity of Goods and Services


----------



## sags

m3s said:


> US CPI 8.6% highest in more than 4 decades and higher than expected again
> 
> Don't forget inflation is "transitory" cause by Chinese supply chain shock and now Russian war according to sags and CNBC
> 
> Nothing to do with printing unlimited magical fiat units


Bitcoin and crypto plunged on the inflation numbers. Good thing they are a hedge against inflation.


----------



## sags

Add in the negative effects of climate change on food shortages.

A long lasting drought in Mexico has wiped out their chili crop.

The long lasting drought in the western US is having a big negative effect on agriculture and a lot of other things.

The world is being negatively effected by the changing climate.









Sriracha hot sauce maker warns of shortage lasting through the summer


A drought is affecting Mexico, from which the company sources its chili peppers.




www.cnbc.com


----------



## sags

The difficulty with implementing a solution is the confluence of many different factors that are producing a perfect storm of inflation.


----------



## m3s

sags said:


> Bitcoin and crypto plunged on the inflation numbers. Good thing they are a hedge against inflation.


I don't know how you can spend 10 years here and not understand how markets work lol

Zoom out more saggy man stop thinking today has anything to do with price like CNBC


----------



## m3s

sags said:


> The world is being negatively effected by the changing climate.


The world is being negatively affected by boomers

If only they knew how to effect positive change

But they don't even know the meaning of the words


----------



## MrMatt

m3s said:


> The world is being negatively affected by boomers
> 
> If only they knew how to effect positive change
> 
> But they don't even know the meaning of the words


The world is also being negatively affected by every other generation too.

I'd be very happy if todays young people (ie <30) were working on positive change, but to a large part they're complaining and not actually presenting solutions to these problems.

They might have ideas, but the reason many problems haven't been solved is.
1. They're hard problems.
2. They're not actually problems.

The reality is that we've got it pretty darn good, and I'm so incredibly happy that most of my problems are First world problems.
Actually most of us are fortunate to have mostly first world problems.

It isn't that bad that I have to buy Adidas instead of Lululemon... I think I'll survive. (FWIW, I think Adidas sportswear is some of the best these days.) 
Oh no, there is a waiting list for the electric car I want to buy...


----------



## sags

Labour shortages are also causing higher prices.

Quebec doesn't have a minimum age for workers, so some younger teens are working in retail and fast food now.

The Province is going to tighten up safety and worker rights training regulations and provide more inspections as they should.

It might be a viable solution for the other Canadian Provinces, providing the jobs are regulated and safe.


----------



## sags

Bitcoin mining and other crypto is a waste of energy, which is expensive infrastructure to build and increases energy bills for consumers.

Many countries are now banning all mining of crypto or restricting permits for any new mining operations.

To dampen inflation........all the sources of the inflation need to be addressed.


----------



## MrMatt

sags said:


> Bitcoin mining and other crypto is a waste of energy, which is expensive infrastructure and raising costs for consumers.


No.
Many crypto doesn't even require mining. You're letting your ignorance and lack of understanding show.

Being a waste of energy? Depends on your view, I think watching RuPauls Drag waste is a waste of energy and valuable infrastructure. Doesn't mean we should ban it.

I know that wannabe authoritarians like you want to ban everything you disagree with or simply don't understand. That's now how our society works, maybe you should move to North Korea.



> Many countries are banning all mining of crypto.


Most notably China.

Mostly regressive countries that don't respect human rights... so maybe we shouldn't follow their example.
Actually if an oppressive authoritarian regime opposes something, we should really ask why.


----------



## sags

Many countries have banned crypto mining or crypto altogether.

The latest restriction on new mining permits in New York State were just passed a new law.


----------



## MrMatt

sags said:


> Many countries have banned crypto mining or crypto altogether.


Yes, bastions of human rights like China. Unlike Trudeau I don't admire their basic dictatorship, and I don't think we should look to them for policy guidance.



> The latest restriction on new mining permits in New York State were just passed a new law.


Yes, very narrow restrictions on new operations.


----------



## Ukrainiandude




----------



## m3s

sags said:


> Many countries have banned crypto mining or crypto altogether.
> 
> The latest restriction on new mining permits in New York State were just passed a new law.


Hence the mass exodus of people from states like NY and Cali. The libtards will be left in ruin when they have to pay for their own stupidity. Texas and Florida are booming with smart people now thanks to these policies

BTC mining monetizes energy that is otherwise wasted during off peak hours and in locations where it can't be distributed. It shortens the break even time of energy investments significantly because most energy production is wasted between peak demands

But it's been explained here many times and you clearly lack the capacity to learn anything of value. You contribute no value and most users have blocked you saggy man


----------



## m3s

MrMatt said:


> The world is also being negatively affected by every other generation too.


I was trying to teach saggy the difference between effect and affect

It's a lost cause


----------



## Ukrainiandude

Inflation is transitory they said.
*US Inflation Quickens to 40-Year High, Pressuring Fed and Biden*

Consumer price index rose 8.6% in May annually, 1% from April
Shelter, food and gas were biggest contributors to advancehttps://www.bloomberg.com/news/articles/2022-06-10/us-inflation-unexpectedly-accelerates-to-40-year-high-of-8-6?srnd=premium


----------



## Ukrainiandude

In the fall traditionally the whole market gonna tank.


----------



## MrBlackhill

Oh hell no!

I recall during the last 2 years of the pandemic we've had an increase in phone scams.

But now I've just recieved a text on my cell phone telling me that I've been approved for $500 from the government (Quebec government recently did this for real). And then there's a link to click... A bit.ly link, lol. And the sender of the text is some random number.


----------



## sags

I thought the old adage was "sell in May and go away"...........and come back to the markets in October.

Jim Cramer had quite the confessional rant on his show today.

He basically said the markets were full of companies that shouldn't be there, and are nothing but "pie in the sky" bogus tech companies.

He wants a big increase in interest rates to shock the markets and shake out the weak companies.

I remember years ago his famous rant calling for the Fed to lower interest rates.









Jim Cramer says to avoid ‘bogus’ tech companies that should've never gone public


"I say they should never have come public, but in many cases they shouldn't even exist," the "Mad Money" host said.




www.cnbc.com


----------



## m3s

Jim Cramer is entertainment for clueless boomers. Nobody ever made money by listening to him


----------



## james4beach

sags said:


> He basically said the markets were full of companies that shouldn't be there, and are nothing but "pie in the sky" bogus tech companies.


And he was pumping many of these a year ago. I remember what kinds of stocks he was directly recommending... names that come to mind are NIO, FCEL. He was telling people to buy them right near their peak!

He's a charlatan and can't be taken seriously. I think he's often on cocaine as well.


----------



## m3s

There's so much more clarity when you stop watching that brain numbing entertainment for unintelligent boomers

It's been shown so many times that Jim Cramer contradicts himself constantly. He's an evil man who used to manipulate retail traders from a hedge fund now he manipulates old boomers by turning them into potato brains

Jim Cramer is the epitome of the boomer fake news mainstream media. His job is to entertain to sell ads


----------



## sags

Right......you get your financial advice from this guy......the co-founder of Ethereum.


----------



## sags

Coinbase ......1 year........-74%

Arkk Innovation......1 year........-65%

Ethereum ....1 year.....-31%.

Peloton........1 year......-90%

Shopify.........1 year......-70%

Berkshire Hathaway......1 year........+ 2.21 %........hmmm......dumb boomer stock.


----------



## sags

m3s said:


> Hence the mass exodus of people from states like NY and Cali. The libtards will be left in ruin when they have to pay for their own stupidity. Texas and Florida are booming with smart people now thanks to these policies
> 
> BTC mining monetizes energy that is otherwise wasted during off peak hours and in locations where it can't be distributed. It shortens the break even time of energy investments significantly because most energy production is wasted between peak demands
> 
> But it's been explained here many times and you clearly lack the capacity to learn anything of value. You contribute no value and most users have blocked you saggy man


Texas ?......the companies that moved their mining operations to Texas may not be welcome for long ?

Bitcoin is a terrible waste of energy resources, and it is inflating energy bills for consumers.









Here’s Why Bitcoin Miners In Texas Are Cutting Down On Power


June witnessed record-breaking power use levels which occurred due to high temperatures in Texas, posing a challenge for the power




www.thecoinrepublic.com


----------



## sags

If you don't like the blogger's article on the Texas energy grid, even though the blogger is a self confessed crypto enthusiast, you will really hate his blog on Defi.

This is the market from which you are raking in the cash ?









DeFi Bear Market Shows No End in Sight


Crypto's DeFi area has been exchanging a bear market for north of a year, with large numbers of its top




www.thecoinrepublic.com


----------



## sags

Tens of thousands of dedicated computers working continually trying to solve a mathematical equation that rewards the 1st computer that solves the calculation with 1 bitcoin is an enormous waste of energy. All the other computers were wasting energy for no reward.

A decentralized blockchain constantly updating and running on tens of thousands of computers is an additional waste of energy.

Wait until the Texas energy grid goes down under load as it did a couple years ago and see how fast the miners get the boot.


----------



## m3s

sags said:


> Tens of thousands of dedicated computers all working continually trying to solve a mathematical equation that rewards the 1st computer that solves the calculation with 1 bitcoin is an enormous waste of energy. A decentralized blockchain constantly updating and running on tens of thousands of computers is an additional waste of energy.
> 
> Wait until the Texas energy grid goes down under load as it did a couple years ago and see how fast the miners get the boot.


MIT and the Department of Defense disagree with those statements

The BTC miners get discounts on Texas energy because they will ramp down when the grid needs the energy. This allows Texas to monetize unused energy during off peak season and also break even on grid infrastructure much sooner. We do the same thing at my work because we have backup generators. This is obviously impossible to explain to you

But enjoy staying poor old man


----------



## sags

The governor or Texas is an idiot like his predecessor and will likely lose to Beto O'Rourke.

Ron DeSantis is smart and is building a financial web of contributors to his future Presidential campaign war chest.

He is happy to accept donations from cypto boys and anyone else he can accommodate before he leaves office in Florida.

Sags predicts a future heavyweight fight between DeSantis and Trump that will be an epic no holds barred battle.

DeSantis is no wilting flower like Ted Cruz. There will be debris left on the convention floor.....and it will be Trump's and all other contenders.

This prophesy and the dissolution of crypto into the void of nothingness from which it sprang, may be Sags greatest prophecies to date.


----------



## m3s

I'm testing on chain governance protocols already. The voting is easy but DIDs are still a ways out. Wyoming and California are already interested

Canada is completed clueless on any innovation happening since the Chinese stole all of Nortel's tech and the stuffy NDHQ generals took over Carling Campus

American politics is a lost cause. The biggest donator to Sleepy Boomer Biden is the same Crypto bro who bought a mega US arena last year. Money is power


----------



## moderator2

I've deleted posts where insults were being thrown around, and temporarily banned the person hurling insults.

You can debate finance topics without resorting to personal attacks.

Insults and attacks directed at other forum members are not permitted.


----------



## MrBlackhill

Deleted


----------



## damian13ster

Well, today's inflation announcement - with massive fanfare - announced.......nothing.
Just reiterated budget from past 2 years.

No tax suspension on fuel and energy. No GST suspension on food - absolutely nothing


----------



## m3s

damian13ster said:


> Well, today's inflation announcement - with massive fanfare - announced.......nothing.
> Just reiterated budget from past 2 years.
> 
> No tax suspension on fuel and energy. No GST suspension on food - absolutely nothing


All according to the WEF great reset @damian13ster

Chrystia Freeland is very close with the WEF even though JT says it's a conspiracy and doesn't worry much about monetary policy

You'll own nothing and you'll love it!


----------



## damian13ster

m3s said:


> All according to the WEF great reset @damian13ster
> 
> Chrystia Freeland is very close with the WEF even though JT says it's a conspiracy and doesn't worry much about monetary policy
> 
> You'll own nothing and you'll love it!


Well, they need inflation to justify $50,000- $80,000 bills for in-flight catering.


----------



## sags

Freeland did call Pierre P "economically illiterate" at the business luncheon for high profile executives......so that was good.


----------



## londoncalling

Yeah the announcement was much ado about nothing. I guess a non announcement is better than a costly or ill conceived announcement. 

On a different note, Interesting to hear about interest rate changes across the G20 in June with most seeing 50 bps or more. One outlier would be Switzerland. I believe they are trying to narrow the gap between them and the EU.

Interest Rate - Countries - List (tradingeconomics.com)


----------



## scorpion_ca

damian13ster said:


> Well, today's inflation announcement - with massive fanfare - announced.......nothing.
> Just reiterated budget from past 2 years.
> 
> No tax suspension on fuel and energy. No GST suspension on food - absolutely nothing


Wouldn't that cause more inflation? I read that people have more savings now than March, 2020. Need to flush the excess money and reduce the debt at the same time. Future generations are Fcked....


----------



## sags

I heard on CNBC that a big Swiss sovereign fund is selling off a lot of their shares in top level equities like Microsoft, Amazon, Google, Apple etc and it may account for some of the selling off and downward drag on the big stock names lately. They were talking about billions of dollars worth of shares.


----------



## Covariance

londoncalling said:


> Yeah the announcement was much ado about nothing. I guess a non announcement is better than a costly or ill conceived announcement.
> 
> On a different note, Interesting to hear about interest rate changes across the G20 in June with most seeing 50 bps or more. One outlier would be Switzerland. I believe they are trying to narrow the gap between them and the EU.
> 
> Interest Rate - Countries - List (tradingeconomics.com)


CH action is about their FX and trade.


----------



## damian13ster

scorpion_ca said:


> Wouldn't that cause more inflation? I read that people have more savings now than March, 2020. Need to flush the excess money and reduce the debt at the same time. Future generations are Fcked....


Not when it comes to food and energy cost.
Those disproportionately affect lower middle class and the poor.


----------



## sags

Most of the "savings" came from deferring their mortgage loans, student loans, credit card payments, and car payments for months during the pandemic.

The payments have all started up again and those "savings" are long gone.


----------



## sags

The world price of Canadian oil is a major factor in inflation.

As I understand it, rather than develop our own oil with government owned oil companies and refiners, we have opted to allow private companies perform that function and tax the production through royalties. I believe the royalty regime was renegotiated years ago to a sliding scale where royalties are low when the price of oil is low but rise significantly when the price of oil is high.

My question is why the government cannot rebate the increased royalties back to the people in times of high inflation ?

If it can't for whatever reason, we should never have privatized our oil and developed it ourselvesl.

Maybe changes need to be made or royalties simply aren't as high as they should be.

It seems we are being punished by the high price of our own oil.


----------



## damian13ster

No, we have government that actively tries to destroy industry, kill investment, and vilify oil and gas.
API and Exxon have it right - why is government surprised there is little new investment if they literally are saying they want to kill the industry, stop new developments, and make it as expensive both politically and economically to extract and process hydrocarbons?

All government needs to do to decrease oil prices is to get out of the way and stop working to destroy the industry.

Changes need to be made - either governments who want to kill the industry need to be kicked out, or people need to start celebrating increased prices since that is literally what they voted for (carbon tax being prime example)


----------



## sags

Oil prices are set by the global markets, so the Canadian government has little control over them.

It was only pre-pandemic when there was a multi-year glut of oil in the world. Reserves were overflowing, tankers were wandering the seas trying to find a place to unload, and prices were falling all the way to below negative. Investors in oil were in retreat as they lost billions of dollars drilling for oil.

The TMC pipeline went up for private sale and there were no bidders, because the numbers required for profit from a long time horizon venture weren't there.

Oil is enjoying a price hike boom today, but it could be a short reprieve. The world is changing to renewable energy sources.........slowly but surely.

How quickly some have forgotten the situation of only a couple of years ago.


----------



## sags

Sanctions on oil is coming back to bite the west, as sanctions in general often do.









Venezuela and Iran agree to expand ties on oil amid U.S. sanctions


Maduro's first visit to Iran comes amid tensions across the Middle East over the collapse of Iran’s nuclear deal with world powers.




www.pbs.org


----------



## MrMatt

They are literally getting what they asked for.



damian13ster said:


> No, we have government that actively tries to destroy industry, kill investment, and vilify oil and gas.
> 
> Changes need to be made - either governments who want to kill the industry need to be kicked out, or people need to start celebrating increased prices since that is literally what they voted for (carbon tax being prime example)


Yup, they said they were going to shut down that industry, so they stopped investing.


----------



## damian13ster

Sags, idea that one of the bigger oil producing countries, with massive reserves, vilifying the industry and stopping investment has no effect on global prices is simply idiotic - why do you even try?

You also fail to see that significant portion of the price are taxes.

The government literally ran on a promise that energy will be more expensive.
They literally promised you inflation - enjoy it!

And if you want lower inflation - then learn from your mistake and kick current government out of power


----------



## sags

Fuel prices are considerably higher in Europe and have been for a long time.

If you want cheap gas prices.......nationalize it. The price of a US gallon of gas in Venezuela is 12 cents.


----------



## damian13ster

What's your point? Europe has higher taxes and higher fuel standards?
The facts are that current government increased taxes and stopped investments.
But that is what was in their program - higher taxes and inflation.

So those who voted for them - enjoy!
If you don't enjoy - learn from your mistakes and kick them out.

Venezuela isn't exactly the model I would follow, but based on your posts and political sympathies, I understand why this is the model you would strive for sags


----------



## sags

The current government spent billions of dollars to purchase a pipeline that private industry wouldn't fund because it is a sunset industry.

How convenient it is to forget that the world was drowning in surplus oil only a couple of years ago and everyone was cutting back production.

Venezuela isn't the only country with cheap gas, but many have one thing in common.........they produce their own oil.

Canada produces our own oil, but the companies sell it on the world market and we pay world market prices for it.

Canadians enjoy no price advantage to having an abundance of oil.

Canada was heading down the right path with Petro-Canada, but Alberta hated the idea and still ruminate about Pierre Trudeau implementing it today.









Gasoline prices around the world, 24-Oct-2022 | GlobalPetrolPrices.com


Gas prices by country using official data sources.




www.globalpetrolprices.com


----------



## MrMatt

damian13ster said:


> Venezuela isn't exactly the model I would follow, but based on your posts and political sympathies, I understand why this is the model you would strive for sags


That's the sickening thing about socialists and communists.
Their agenda is being implemented TODAY, we can see the results in just a few years, streamed live onto the internet, and they STILL think they want this crap.


----------



## sags

The "sickening thing" is how capitalism has been twisted into an unrecognizable shadow of it's former self by the greed of the wealthy and politicians.

I believe in small business capitalism, while understanding the wealthy and powerful version doesn't give a tinker's darn about anyone but themselves.


----------



## sags

How about this analogy.........

I will come over to your home and sell all your assets and give you a small fee from each sale.

I will invest my capital to rent a truck (contributing to GDP), hire a couple of guys to do the heavy lifting (job creation) and pay taxes on the profits.

Then when everything is sold, we will walk away and let you clean up the mess left behind.....and I may want to renegotiate the fee I am paying you.

That is basically what big oil is doing with our oil resources.


----------



## damian13ster

The private industry didn't want to invest more in the pipeline not because it was in 'sunset industry'.
They didn't want to invest in the pipeline because of anti-industry government, ridiculous red tape, resulting in at least a decade before it will get built.
Proof in point: it still isn't built.

Again, if you want Canada to turn into Venezuela - at least you got your voting patterns right.
At least now it is out in public on what model you are striving for


----------



## sags

Some would be suitors of the pipeline said the pipeline didn't make economic sense given the capital involved and necessary payback period.

If financing and building a pipeline is such a great idea, you should be thrilled that Trudeau is doing just that and it should never be sold to private interests.

I think you are just angry the outrageous slings and arrows fired at Trudeau by Conservatives have fallen harmlessly to the ground.

They gotta raise their game to stay in the big leagues and that is looking doubtful with a fourth string closer like Pierre P. leading them.

_And Pierre walks in yet another run, his third this inning......what do you think of that Dave ? 

Well, I think he should have taken up soccer. 

I can't argue with you there Dave._


----------



## damian13ster

You completely misunderstand basic economic terms:



sags said:


> Some would be suitors of the pipeline said the pipeline didn't make economic sense given the capital involved and necessary payback period.
> 
> If financing and building a pipeline is such a great idea, you should be thrilled that Trudeau is doing just that and it should never be sold to private interests.
> 
> I think you are just angry the outrageous slings and arrows fired at Trudeau by Conservatives have fallen harmlessly to the ground.
> 
> They gotta raise their game to stay in the big leagues and that is looking doubtful with a fourth string closer like Pierre P. leading them.
> 
> _And Pierre walks in yet another run, his third this inning......what do you think of that Dave ?
> 
> Well, I think he should have taken up soccer.
> 
> I can't argue with you there Dave._


Yes, pipeline didn't make economic sense BECAUSE due to regulatory red tape it takes a decade for approvals and outcome is uncertain. ROI calculation looks pretty bleak when you don't have any cash flow until a decade from now and inflation is 7+%

Financing and building a pipeline is a great idea in a place where regulations and government are friendly to businesses and investments - Canada is no longer a place like that, therefore financing and building a pipeline is not a great idea in Canada. Government unfriendly to investments and regulatory process that takes decades is a reason for that. 

The answer to that is to make regulations and government more business friendly - the answer is not to have government throw money at poor investment because private sector isn't stupid enough to do it.


----------



## james4beach

sags said:


> The "sickening thing" is how capitalism has been twisted into an unrecognizable shadow of it's former self by the greed of the wealthy and politicians.


And it really took off with Reagan. That's when this new brand of runaway capitalism really started.

Ever since then, we've had steadily growing wealth disparity, stagnation of wages for the common man, and steadily declining corporate tax rates! We've also seen a steady deterioration in the power of unions.

It may have hit its extreme point under Trump, who slashed corporate tax rates to a new record low to help his billionnaire aristocrat friends. And then when the citizens wanted him out, he tried to illegally seize power.

You couldn't ask for a better illustration of America's problems. A greedy billionnaire who refuses to leave when citizens vote him out.

Sadly though, the Democrats are also a party of corporate elites (though not quite as extreme as Republicans) so Americans really are screwed. The whole country is run by the aristocrat class. America serves the ultra wealthy, and couldn't care less about the common man.


----------



## MrMatt

james4beach said:


> You couldn't ask for a better illustration of America's problems. A greedy billionnaire who refuses to leave when citizens vote him out.


Good example, another is great example is Epstein. 
Apparently there was all sorts of evidence, from decades of hanging out with the rich and powerful elites.

That died off really quick, pun intended.


----------



## londoncalling

The corruption has always been there. It's just harder to hide in our current era.


----------



## sags

Canada is in very capable hands.


__ https://twitter.com/i/web/status/1538982052544102402


----------



## damian13ster

'Fiscally responsible budget' - Is she high? 2nd biggest deficit in history


----------



## andrewf

COMMENTARY: Budget 2022 and Canada’s incredible disappearing deficits - National | Globalnews.ca


The annual deficit has shrunk by $275B in two years, even as the government announced new initiatives. What gives? Economist Jim Stanford looks at the red line of Budget 2022.




globalnews.ca





They have reduced the deficit by $275B/year since 2020. That's 12.8% drag on GDP over two years. How much faster do you want them to stomp on the brakes?


----------



## sags

Some people only look at the "big" headline number, without consideration of the growing economy, naturally expanding need for more spending to provide services to a growing population, increased government revenues. future value of replacement and new infrastructure, and the lower cost of servicing the debt that was restructured long term at record low interest rates.

People do the same thing with the price of new vehicles....wow.....$50,000 for a new vehicle. I only paid $10,000 for a new vehicle in 1975.

Some people have a problem placing numbers into context. They also fail to consider the negative effects of the alternatives.


----------



## Covariance

andrewf said:


> COMMENTARY: Budget 2022 and Canada’s incredible disappearing deficits - National | Globalnews.ca
> 
> 
> The annual deficit has shrunk by $275B in two years, even as the government announced new initiatives. What gives? Economist Jim Stanford looks at the red line of Budget 2022.
> 
> 
> 
> 
> globalnews.ca
> 
> 
> 
> 
> 
> They have reduced the deficit by $275B/year since 2020. That's 12.8% drag on GDP over two years. How much faster do you want them to stomp on the brakes?


Deficit is not the metric. Spending is. Spending more (its at a record high) and taxing more is not a way to grow an economy or reduce inflation, even if it is a way to balance a budget.


----------



## damian13ster

andrewf said:


> COMMENTARY: Budget 2022 and Canada’s incredible disappearing deficits - National | Globalnews.ca
> 
> 
> The annual deficit has shrunk by $275B in two years, even as the government announced new initiatives. What gives? Economist Jim Stanford looks at the red line of Budget 2022.
> 
> 
> 
> 
> globalnews.ca
> 
> 
> 
> 
> 
> They have reduced the deficit by $275B/year since 2020. That's 12.8% drag on GDP over two years. How much faster do you want them to stomp on the brakes?


When you accelerate your car to 200 mph and point it at the closest concrete wall, tapping the brakes is not the answer.

Spending in 2020 was ill-advised.
The fact that deficit was above 275B/year in the first place is the root cause of the problem and the cause of inflation being as high as it is now.
So now you do slam the brakes as hard as possible, enjoy the higher than expected profit from natural resources, use higher tax revenue from inflation to have a surplus and start paying off the ill-advised mountain of debt you have created.

Instead they keep pushing the throttle, closing their eyes and pretending the wall doesn't exist


----------



## sags

Ah....but then the age old question must be answered....where would you significantly cut spending ?

Every politician who pledged to cut spending experienced either one of two outcomes and sometimes both.

The spending increased under their leadership, or they simply passed spending and services on to a different level of government.


----------



## MrMatt

andrewf said:


> COMMENTARY: Budget 2022 and Canada’s incredible disappearing deficits - National | Globalnews.ca
> 
> 
> The annual deficit has shrunk by $275B in two years, even as the government announced new initiatives. What gives? Economist Jim Stanford looks at the red line of Budget 2022.
> 
> 
> 
> 
> globalnews.ca
> 
> 
> 
> 
> 
> They have reduced the deficit by $275B/year since 2020. That's 12.8% drag on GDP over two years. How much faster do you want them to stomp on the brakes?


Double check your numbers.

I'm okay with a small temporary deficit during extreme crisis, maybe 1-2k/per person, not $10k/person.

When you're at the point where the deficit is 50% of the average family income, you're in an incredible crisis, and you need to stop as soon as possible.

Just think about that, for every dollar the average family made, the government was taking on $0.40 in debt, for over a year. That is in addition to all the taxes.
That is the sign of an incredible financial crisis.

How hard do you slam on the breaks?
As hard as you can, because you're driving into a brick wall.

The only question is if you have ABS or your tires are going to lock up.


----------



## MrMatt

damian13ster said:


> When you accelerate your car to 200 mph and point it at the closest concrete wall, tapping the brakes is not the answer.
> 
> Spending in 2020 was ill-advised.


Nope, spending like crazy in 2020 was necessary.
maybe they could have done better, but it isn't like they could have saved 20%+ of the COVID emergency spending.




> The fact that deficit was above 275B/year in the first place is the root cause of the problem and the cause of inflation being as high as it is now.


It's not that simple, or even completely avoidable.
We were in a crisis, they acted, they got some right, got some wrong, but I think it's disingenuous to say they got it completely wrong. At the time it was reasonable.



> So now you do slam the brakes as hard as possible...
> 
> Instead they keep pushing the throttle, closing their eyes and pretending the wall doesn't exist


Yes the crisis is over, you have to stop acting like it is ongoing.


----------



## sags

Is the glass half full or half empty ?

The debt is a big number, no doubt about it, but it should be considered in context of building one of the best countries in the world over the past 153 years.

How much of that total debt for all levels of government.....$3 Trillion or $10 Trillion or whatever it is, has built up Canada from barren land to what it is today ?

How much would it cost to replicate everything today ?

Replace all the roads and highways, bridges and tunnels, rail lines and airports, hospitals and schools, fresh water pipelines and waste treatment plants., educated a capable workforce and citizens, and everything else that we all take for granted today.

Yes we have a big number for overall debt, but the wealth created dwarfs that number. That is how building a nation happens.

One might also notice that many countries with no or very little debt, are also among the poorest, least habitable countries in the world.


----------



## damian13ster

MrMatt said:


> Nope, spending like crazy in 2020 was necessary.
> maybe they could have done better, but it isn't like they could have saved 20%+ of the COVID emergency spending.
> 
> 
> 
> It's not that simple, or even completely avoidable.
> We were in a crisis, they acted, they got some right, got some wrong, but I think it's disingenuous to say they got it completely wrong. At the time it was reasonable.
> 
> 
> Yes the crisis is over, you have to stop acting like it is ongoing.


Wrong, like you said, the spending was completely overblown, massively high compared to out peers, and as the analysis is showing now, more than 50% of it was wasted.

Canada Emergency Wage Subsidy cost estimated *$188,000 per job saved*. That is absolutely insane number.
Vast majority of it was unnecessary and did nothing but go straight into bottom-line of the companies.

As per FINTRAC, CERB was used for money-laundering and organized crime.
And in terms of legit use of CERB:
Average income for family and unattached individuals in 2020 (during pandemic, lockdowns, job losses, etc.) went *up by 7.1% - $4,400*.
Targeting the program and having it act as *wage replacement would allow (let's use 17.6mln tax filers in Canada) would allow 77bln in savings*

Extra spending during pandemic - fine.
Helicopter money with no limits, not targeted, and with well over 80% (in case of CEWS) going to 'save jobs' that were not at risk of being lost (report I read estimated among companies that received CEWS (the ones that qualified received it for all employees) only 1 in 12 employees were at risk of losing jobs)) is stupid.

They could have saved well over 80% of COVID spending were they smart about it.


----------



## Jimmy

MrMatt said:


> Nope, spending like crazy in 2020 was necessary.
> maybe they could have done better, but it isn't like they could have saved 20%+ of the COVID emergency spending.
> 
> It's not that simple, or even completely avoidable.
> We were in a crisis, they acted, they got some right, got some wrong, but I think it's disingenuous to say they got it completely wrong. At the time it was reasonable.
> 
> Yes the crisis is over, you have to stop acting like it is ongoing.


Libs botch up everything they touch so there is no doubt they could have saved $. We ran the largest deficit/gdp of anyone in the g20 by a wide margin We were double Germany so maybe they could have saved 20% . They are basically fools.

Their spending and the inflation crisis they created is far from over and they have no plan to balance ever. they all have to go.


----------



## MrMatt

damian13ster said:


> Wrong, like you said, the spending was completely overblown, massively high compared to out peers, and as the analysis is showing now, more than 50% of it was wasted.


I'm not sure of the claims that 50% was wasted.
Maybe 20% was wasted.
Maybe 50% was spent on things you don't agree with, but that is different than wasted.



> Canada Emergency Wage Subsidy cost estimated $188,000 per job saved. That is absolutely insane number.


Sounds a bit high to me.
I'd like to see that estimate.



> They could have saved well over 80% of COVID spending were they smart about it.


I don't think so, but I'd like to see an analysis supporting this.

I also would have rather had MORE spending and evenly spread it out, instead of the mismatch of unfair programs.
I even called for "UBI" during the peak of the crisis.


----------



## damian13ster

sags said:


> Is the glass half full or half empty ?
> 
> The debt is a big number, no doubt about it, but it should be considered in context of building one of the best countries in the world over the past 153 years.
> 
> How much of that total debt for all levels of government.....$3 Trillion or $10 Trillion or whatever it is, has built up Canada from barren land to what it is today ?
> 
> How much would it cost to replicate everything today ?
> 
> Replace all the roads and highways, bridges and tunnels, rail lines and airports, hospitals and schools, fresh water pipelines and waste treatment plants., educated a capable workforce and citizens, and everything else that we all take for granted today.
> 
> Yes we have a big number for overall debt, but the wealth created dwarfs that number. That is how building a nation happens.
> 
> One might also notice that many countries with no or very little debt, are also among the poorest, least habitable countries in the world.


Canada is not a better country than it was 7 years ago. It has triple the debt though.
Also, if you are using net debt/gdp then remember that Canada uses metric differently than other countries do.
Using same way of measurement as our peers, debt/gdp more than doubles compared to the number Freeland throws around in her propaganda


----------



## damian13ster

MrMatt said:


> I'm not sure of the claims that 50% was wasted.
> Maybe 20% was wasted.
> Maybe 50% was spent on things you don't agree with, but that is different than wasted.
> 
> 
> *Sounds a bit high to me.
> I'd like to see that estimate.*
> 
> 
> I don't think so, but I'd like to see an analysis supporting this.
> 
> I also would have rather had MORE spending and evenly spread it out, instead of the mismatch of unfair programs.
> I even called for "UBI" during the peak of the crisis.











There are better ways of helping the economy than CEWS


Analysis shows the Canada Emergency Wage Subsidy (CEWS) cost $188,000 per job saved. Other countries have recognized problems and made reforms.




policyoptions.irpp.org





I understand you are leaning towards more reasonable (at first sight) number; however, you are ignoring the fact that the country is run by a bunch of complete morons with zero financial acumen - and that is an understatement.


If you want more sources, just google '188,000 per job saved' and multiple will come up.

77bln savings on CERB plus over 90% of savings on CEWS (1/12 jobs it was paid for was at risk of being lost - 188,000/12 = 15,670 so that number is reasonable) and yes - well over 50% of extra spendings were wasted.

Why do you think housing market, stock market, and savings exploded? - because of extra money that was unnecessarily handed out.


----------



## Covariance

sags said:


> Ah....but then the age old question must be answered....where would you significantly cut spending ?


Start by not increasing.


----------



## sags

Covariance said:


> Start by not increasing.


That would be near impossible without making cuts to services.

The "natural" increase in government spending due to increased costs to service higher populations is around 6% annually.

Spending cuts are always possible.......but where to cut is always the unanswered question.

Lots of people want spending cuts but not to the programs and services they value........financial NIMBY.

I want politicians running on cutting the deficit and debt to step forward with a detailed list of the spending cuts they would make.

I will cut..........here, here, here, and here.

Otherwise they are just blowing smoke up the gullible voter's arses.


----------



## Covariance

deleted


----------



## sags

Regardless of the posted number for CERB spending........the money was taxable and likely acquired sales taxes, fuel taxes, as it was spent in the economy.

The final number would have to include the revenue that flowed back to the government in taxes and fees.


----------



## damian13ster

sags said:


> That would be near impossible without making cuts to services.
> 
> The "natural" increase in government spending due to increased costs to service higher populations is around 6% annually.
> 
> Spending cuts are always possible.......but where to cut is always the unanswered question.
> 
> Lots of people want spending cuts but not to the programs and services they value........financial NIMBY.
> 
> I want politicians running on cutting the deficit and debt to step forward with a detailed list of the spending cuts they would make.
> 
> I will cut..........here, here, here, and here.
> 
> Otherwise they are just blowing smoke up the gullible voter's arses.


6% due to population growth?
Annual population growth in Canada is around 1.1%

The one indicator on just how fiscally irresponsible current government is is the cost of running said government.

Under liberals, cost of government workers went up from 39.6bln to around 50bln now. Amount of bureaucrats went up by 10,000
You would think with such a massive increase in salaried employees you would need less consultants? Hell no!
The 'professional services' cost went up to 16.4billion from 10.4bln.

That's 16bln extra spending just on running the government - not on extra programs, not on health care, etc.
And which part of government is running better because of it?

border agency?
immigration services?
service canada?

That's 16bln dollars extra cost on running government that is worse across the board in each category.


----------



## sags

_Why do you think housing market, stock market, and savings exploded? - because of extra money that was unnecessarily handed out._

The CERB replaced income for those who couldn't work during the restrictions, and it paid less than minimum wage.

It is more likely "savings" came from deferred mortgage payments, student loan payments, credit card payments, and car loan payments for many months.

Of course people had more money in their pocket. They weren't paying their largest monthly bills for months.


----------



## damian13ster

sags said:


> _Why do you think housing market, stock market, and savings exploded? - because of extra money that was unnecessarily handed out.
> 
> The CERB replaced income for those who couldn't work during the restrictions, and it paid less than minimum wage.
> 
> I think the more likely "savings" came from deferring mortgage payments, student loan payments, credit card payments, and car loan payments for many months._


It didn't replace income. As I have shown, the benefits increased income by 7.1% during a time when government put economy to a halt. 
The 77bln was increase in income, not 'replaced income'.


----------



## sags

Um no........it replaced lost income.

If you filed for CERB and continued to work........the CRA would like to have a word with you.

Hence the news about people complaining they have to re-pay the CERB or temporarily lost social benefits.

Some people DID cheat. The government wanted to get the money out the door asap because people needed it , so it was based on trust.

Some people simply aren't trustworthy and the CRA was tasked with tracking them down to recover the money.


----------



## sags

During the pandemic economic growth went negative. There was a covid "recession".


----------



## damian13ster

sags said:


> Um no........it replaced lost income.
> 
> If you filed for CERB and continued to work........the CRA would like to have a word with you.


You are wrong - again. You didn't have to prove 2,000$ loss in income over 4 weeks in order to receive 2,000$ from CERB.
CRA has shown that incomes when economy was stopped by government went up by 7.1% - 4,400 on average for 17.6mln tax filers. That is 77bln of extra income. 

77bln wasted on CERB, over 90% of CEWS wasted, over 16bln increase in yearly cost of running government.
That is a huge chunk of money and significant portion of GDP wasted.

If you want to defend this government, inflation, economy, and fiscal policy is really not a topic you can do it on - objectively their level of sucking reached historic proportions


----------



## sags

I can see why you are so mixed up.


----------



## james4beach

damian13ster said:


> If you want to defend this government, inflation, economy, and fiscal policy is really not a topic you can do it on - objectively their level of sucking reached historic proportions


I think CERB was a good program. When the pandemic first started, I was trapped in quarantine and couldn't do any work (and none of my coworkers were responding... work had halted due to the pandemic). My consulting income completely stopped due to the pandemic.

So I filed for CERB and I got the payment within a few days. That was really nice. I only filed once for CERB, but for others facing longer interruptions this was a life-saver for sure.

Great job by the Liberal government and the Trudeau team.


----------



## damian13ster

james4beach said:


> I think CERB was a good program. When the pandemic first started, I was trapped in quarantine and couldn't do any work (and none of my coworkers were responding... work had halted due to the pandemic). My consulting income completely stopped due to the pandemic.
> 
> So I filed for CERB and I got the payment within a few days. That was really nice. I only filed once for CERB, but for others facing longer interruptions this was a life-saver for sure.
> 
> Great job by the Liberal government and the Trudeau team.


You are using an anecdote to judge country-wide program.
Yes, temporary income replacement is a good idea if you have government shutting down economy.

The statistics show though that CERB went beyond that - over 77bln beyond that. 
77bln is amount of EXTRA income, not replaced income


----------



## KaeJS

CERB was trash.
It was abused and misused.


----------



## andrewf

I was opposed to CERB as a no-strings grant. It should have been a loan. It was only to help people keep liquid and not default on their obligations and be able to feed themselves. I would have been open to it being forgivable after the fact. But many people did not really need CERB.


----------



## MrMatt

andrewf said:


> I was opposed to CERB as a no-strings grant. It should have been a loan. It was only to help people keep liquid and not default on their obligations and be able to feed themselves. I would have been open to it being forgivable after the fact. But many people did not really need CERB.


And many people who needed CERB didn't qualify.
Because of the suddenness of the crisis I think it should have been universal.

I think it's a policy debate on if it should have been
1. A handout
2. a loan.
3. a conditionally forgivable loan.

Some of the people who needed it most desperately, aren't able to pay it back anyway.


----------



## sags

The government could have given the CERB to everyone and then clawed it back the next year above a threshold of income for the year.

But.....there would have been plenty of people complaining that it was going to people who "didn't need it" because they don't understand how clawbacks work.

I still maintain the bulk of the "extra" savings for people came from not paying their bills. They deferred rents, mortgages, loans, credit cards, car payments etc.

Plus if the parents were home they didn't have to pay daycare, fuel to commute, sports fees for their kids, and other work expenses.

Covid restrictions basically created a situation forcing people to "live within their means" because they had nowhere to spend their money.

Well, they did spend money shopping online, and paying for Netflix.....but that appears to have tapered off considerably.

It is no wonder people ended up with extra money.


----------



## MrBlackhill

No one talking about the 7.7% inflation? Expectations were 7.4%...


----------



## sags

Not a big deal in the increase.......but the trend is worrisome.

Big cost of living increases to government benefits, perhaps record setting increases. (I don't know if government benefits were indexed back in the day)

Of course, they increase government spending. Fortunately, they should have surplus income to pay the increases without adding more debt.

Companies in private industry will struggle to provide sufficient wage increases to their workers to counter inflation, and most won't.

With more interest rate hikes coming, I am thinking the government needs to consider a termporary inflation benefit or low and middle income tax relief.

A recession is already knocking on the door, and the government has some fiscal tools they can deploy to offset how severe it might become.


----------



## Covariance

Commented on the rates thread.


----------



## MrMatt

MrBlackhill said:


> No one talking about the 7.7% inflation? Expectations were 7.4%...


The "transitory" inflation is going to continue for a while, because there is a whole lot of inflationary pressures.

This wasn't caused by only interest rates, and won't be solved by only interest rates.

You can't double the price of gas and expect the cost of goods to stay flat.

FYI, with inflation like this, this could be the first year of home ownership where property tax will increase by LESS than inflation. I'm sure we'll catch up next year.


----------



## sags

_FYI, with inflation like this, this could be the first year of home ownership where property tax will increase by LESS than inflation. I'm sure we'll catch up next year._

Yea, but just look how nice our downtown looks now......LOL


----------



## Zipper

sags said:


> _FYI, with inflation like this, this could be the first year of home ownership where property tax will increase by LESS than inflation. I'm sure we'll catch up next year._
> 
> Yea, but just look how nice our downtown looks now......LOL


What are you talking about Sags?

Downtown London is infested with bums, panhandlers, and drug addicts!


----------



## sags

KaeJS said:


> CERB was trash.
> It was abused and misused.


It may well have saved the country from falling into a severe recession.


----------



## sags

Zipper said:


> What are you talking about Sags?
> 
> Downtown London is infested with bums, panhandlers, and drug addicts!


That is what I mean.....the city developed an inviting gathering place for them.......municipal taxes well spent..........not.


----------



## damian13ster

sags said:


> It may well have saved the country from falling into a severe recession.


It instead pushed it into stagflation - yay


----------



## KaeJS

sags said:


> It may well have saved the country from falling into a severe recession.


Who says we aren't still headed that way?


----------



## sags

Maybe we are, but nobody can predict the future and anyone who says they can with 100% precision is a liar.

Everyone in economics agrees we are entering uncharted territory. They don't know what lies beneath the waves.

Beware the Kraken !


----------



## MrMatt

sags said:


> Maybe we are, but nobody can predict the future and anyone who says they can with 100% precision is a liar.
> 
> Everyone in economics agrees we are entering uncharted territory. They don't know what lies beneath the waves.
> 
> Beware the Kraken !


Of course it's "uncharted" because we haven't been here.
However it's pretty obvious that we're headed for trouble.

We're facing high inflation for several reasons.
1. Limited supply of in demand goods

Housing
Oil & Transportation
General supply chain disruption
2. Low interest rates.

Hiking interest rates vs the first half of the inflation cause is BOUND to fail.

The idea that we'll just make people so poor they stop buying stuff, particularly essentials like food, is the DUMBEST way to fight inflation.

Like sure if you starve people maybe it will lower inflation, but that's a pretty heartless way to solve the problem.


----------



## damian13ster

It is uncharted because we never had such morons running the country.

The economic situation calls for decreasing government spending, increasing the value of money, decreasing the red tape on businesses and productivity, suspending the taxes on energy.

However, we have idiots in charge so none of that will be done - and this is why we are in uncharted territory


----------



## MrBlackhill

MrMatt said:


> The idea that we'll just make people so poor they stop buying stuff, particularly essentials like food, is the DUMBEST way to fight inflation.
> 
> Like sure if you starve people maybe it will lower inflation, but that's a pretty heartless way to solve the problem.


And your solution is...?

You know the issue with most people when they criticize a solution? Some people want actions that will have an impact NOW, others want solutions that will have an impact in the future.

Turns out we need both.

It's not as if we can significantly increase supply tomorrow. And people have to change their consumerism habits and debt accumulation.


----------



## james4beach

MrMatt said:


> The idea that we'll just make people so poor they stop buying stuff, particularly essentials like food, is the DUMBEST way to fight inflation.


You're missing the fact that central banks previously inflated people's wealth and credit availability, artificially making people feel wealthier *than they really were*. People started using loans to pay for everything. Stock and real estate prices were pumped sky high.

Allowing these things to normalize seems pretty fair to me.

Yes, people will complain. But they previously benefited tremendously from free money (near 0% loans) and also had their wealth / home prices inflated, artificially. Mortgages near 0%. Companies borrowing at 0% too. All of these are a form of government hand-out.

We've had negative real interest rates for borrowing, for about 14 years now! That's literally free money... a government hand-out.

Do you want government hand-outs to continue indefinitely?

The problem is actually that people got used to that state of affairs, and have come to see 0% loans and home prices going up 10% to 15% a year as normal. As you have often said @MrMatt people need to take individual responsibility and cannot depend on the government for everything.


----------



## Ukrainiandude

damian13ster said:


> It instead pushed it into stagflation - yay


Recession seems unlikely anytime soon.
*We have a structural shortage': Record high job vacancies unlikely to reverse any time soon, economists say *
Latest numbers show a job vacancy rate of 5.6 per cent, continuing an upward trend since the first quarter of 2016
*Canada is reporting its highest quarterly job vacancies on record, with 957,500 open positions in the first quarter of 2022 — up 2.7 per cent from the previous peak last quarter.
The unemployment rate dropped to a record low of 5.1 per cent in May. As a result, the ratio of unemployment to job vacancies fell to 1.3 in the first quarter of 2022, it said.*








'We have a structural shortage': Record high job vacancies unlikely to reverse any time soon, economists say


Statistics Canada's latest numbers show a job vacancy rate of 5.6%, continuing an upward trend since the first quarter of 2016.




financialpost.com





Rate increase is much needed, hopefully the central bank will start soon.


----------



## damian13ster

The growth estimate for next quarter for Canada has been revised from 0.8 to 0.4%. 
Clearly economists disagree with you that recession is unlikely.
Unfortunately this time it isn't just recession - it is recession with inflation


----------



## londoncalling

A lot of people talk about the high job vacancy rate as a primary reason as to why we can avert a recession. Unfortunately, when economists rely on these stats they rarely indicate what factors would bring this number down from either a positive or negative perspective.

It is a common assumption that areas of high vacancy will be filled with rising wages. Not sure if that is always the case. What if wages don't go up enough to attract workers and we see further slowdowns. People view work and careers much differently than they did pre-pandemic. Yet some employers are reluctant to shift from the old model while others have embraced the change. Most see work from home as the major shift and it could be for some jobs. Not every sector has work from home. One area of change that is often overlooked is absenteeism due to illness. Many are encouraged or do not go into work when ill while pre-pandemic we all suffered through cold and flu season at the job.

The current inflationary environment is not just new to many consumers it is also new to a lot of business operators. Increasing wages may attract workers but will likely also require an increase in the cost for their products or services. Employers have been raising wages but I doubt they are keeping pace with inflation especially in lower skill jobs where there seem to be the highest vacancy. What if job vacancies remain high because the majority of the vacancies are in lower wages areas? One really has to dig into the data to see what is happening.

I think we could see peak inflation come July and hopefully by fall the "transitory" supply chain problems go away. So far it doesn't look promising with isolationist trade sentiment on the rise.


----------



## sags

What we got here is a series of unfortunate events, also occasionally referred to as being "royally screwed".


----------



## damian13ster

Biden now calling for gas tax suspension. If it goes through, Canada will be the ONLY country in G7 without any energy tax relief for their citizens.
At this point all other countries than Canada and US suspended taxes on energy


----------



## sags

Reducing taxes on fuel will increase demand on strained supplies. Lowering consumption taxes increases demand which leads to higher inflation.

We are entering a financial twilight zone where nobody knows what to do without causing problems somewhere else.

All people can do is secure their income, stock up, reduce discretionary spending, and hold on tight.

That is what Sags is doing.


----------



## damian13ster

Sounds great.
Next let's increase consumption taxes on food! More people will die of starvation and demand will drop - success


----------



## sags

In that scenario, you wouldn't want to be one of the wealthy elite.......mobs with pitchforks and all that.

_Although scholarly debate continues about the exact causes of the Revolution, the following reasons are commonly adduced: (1) the bourgeoisie resented its exclusion from political power and positions of honour; (2) the peasants were acutely aware of their situation and were less and less willing to support the anachronistic and burdensome feudal system; (3) the philosophes had been read more widely in France than anywhere else; (4) French participation in the American Revolution had driven the government to the brink of bankruptcy; (5) France was the most populous country in Europe, and crop failures in much of the country in 1788, coming on top of a long period of economic difficulties, compounded existing restlessness; and (6) the French monarchy, no longer seen as divinely ordained, was unable to adapt to the political and societal pressures that were being exerted on it. _









French Revolution | History, Summary, Timeline, Causes, & Facts


French Revolution, also called Revolution of 1789, revolutionary movement that shook France between 1787 and 1799 and reached its first climax there in 1789—hence the conventional term “Revolution of 1789,” denoting the end of the ancien régime in France and serving also to distinguish that...



www.britannica.com


----------



## Ukrainiandude

damian13ster said:


> Biden now calling for gas tax suspension. If it goes through, Canada will be the ONLY country in G7 without any energy tax relief for their citizens.
> At this point all other countries than Canada and US suspended taxes on energy


I didn’t notice a reduction of huge SUVs and pickups on the roads around. I must assume that gas prices don’t bother Canadians at all. Have you noticed any changes to the traffic? 
I personally don’t care if gas is 5 bucks per litre. Can’t afford driving? Walk or ride a bicycle it’s free.


----------



## Ukrainiandude

damian13ster said:


> Sounds great.
> Next let's increase consumption taxes on food! More people will die of starvation and demand will drop - success


There is not taxes on food items in Canada but all food items in Europe are taxed. Bingo.


----------



## damian13ster

Ukrainiandude said:


> I didn’t notice a reduction of huge SUVs and pickups on the roads around. I must assume that gas prices don’t bother Canadians at all. Have you noticed any changes to the traffic?
> I personally don’t care if gas is 5 bucks per litre. Can’t afford driving? Walk or ride a bicycle it’s free.


That's silly. You haven't seen reduction of SUVs and huge pickups on the roads around because energy, and gas are necessities. Same as food.
People who live 30-60km from work can't 'hop on a bike' or walk. They also can't buy a new car on a whim. They will also not be able to buy a property right next to work.
Same as they will not buy a bigger car, move further away from work, if you stop taxes on energy for 3 months

I have lived in city of 800,000 in Canada and you are more likely to get stabbed on public transit than get to your destination in a relatively good time.

Gas and transportation is a necessity of life with the cities and the country designed the way they are.
Also, transportation costs have input in other prices. Getting rid of taxes on energy is a targeted aid for lower-middle class that was priced out of city centers, need to drive to work, needs to cool/heat their living quarters.


----------



## MrMatt

MrBlackhill said:


> And your solution is...?


Short term or long term.

Immediate, be careful watching impacts. The rate hike is going to hurt a LOT of people.

Longer term, a broad reform of government based on liberal (today "right wing") principals. (basically not socialism, and not social conservative). 
In short, get government OUT of all the economic manipulation that makes the situation worse.


----------



## MrMatt

Ukrainiandude said:


> I didn’t notice a reduction of huge SUVs and pickups on the roads around. I must assume that gas prices don’t bother Canadians at all. Have you noticed any changes to the traffic?
> I personally don’t care if gas is 5 bucks per litre. Can’t afford driving? Walk or ride a bicycle it’s free.


My gas consumption is insignificant, but I don't drive the truck that supplies my local grocery store.


----------



## cliffsecord

Yeah people don't seem to care about gas prices. I still see people idling their cars while they wait for whatever they are waiting for. At my kids dojo some parents idle for 45 min. It drives me nuts. When I wait, I go out for a walk.

This will be the first time I'll be aware of inflation so it'll be an interesting experience. We are lucky to have good jobs and good savings. For the first time I'm actually kind of excited about our GICs. We just renewed a rung at 4.45% from 1%. I might buy more to make sure I keep my cash cushion instead of buying stocks.

I'm hoping to use this down draft to buy good value stocks, increase our dividends and hopefully retire. Or at least downgrade my job.


----------



## Ukrainiandude

MrMatt said:


> My gas consumption is insignificant, but I don't drive the truck that supplies my local grocery store.


Neither do I.
Grocery is still insignificant percentage of income in Canada. And last time I walked by fast food people still lining up to buy a burger or coffee. I personally don’t see any signs of inflation in people’s spending habits. Still lots of expensive gas guzzlers on the roads (no one wants to down grade and save on gas), fast foods and restaurants are still packed (no one wants to save on food and cook at home), people still shopping for houses etc.


----------



## off.by.10

Ukrainiandude said:


> I didn’t notice a reduction of huge SUVs and pickups on the roads around. I must assume that gas prices don’t bother Canadians at all. Have you noticed any changes to the traffic?


A month ago, I went on a 3 hour drive. It might be my imagination or just the time of day but I had the impression that there were far fewer people speeding past 120 km/h. Almost none. Usually, there are many who zoom by, often in large vehicles.


----------



## Gator13

I commute in the GTA 5 days a week. There is more traffic then ever.


----------



## m3s

I seem to remember a flood of used pickup trucks on the market around 2009


----------



## damian13ster

m3s said:


> I seem to remember a flood of used pickup trucks on the market around 2009


Pretty sure that would correlate much stronger with jobs than inflation.
I drive a truck - is it because I prefer it over Toyota Yaris? No. It is because once a week I need to haul tools, sometimes pumps, etc. - it is a necessity. No matter how expensive the gas, I will not be driving Toyota Yaris until my work requires me to drive a truck. It is as simple as that.
I imagine a lot of engineers, trades, farmers, laborers, delivery drivers, etc. have no option of having smaller car - that's why gasoline is a necessity for significant portion of population


----------



## m3s

damian13ster said:


> Pretty sure that would correlate much stronger with jobs than inflation.
> I drive a truck - is it because I prefer it over Toyota Yaris? No. It is because once a week I need to haul tools, sometimes pumps, etc. - it is a necessity. No matter how expensive the gas, I will not be driving Toyota Yaris until my work requires me to drive a truck. It is as simple as that.
> I imagine a lot of engineers, trades, farmers, laborers, delivery drivers, etc. have no option of having smaller car - that's why gasoline is a necessity for significant portion of population


I suppose.

I remember people saying it was the high gas prices but could be the jobs. A colleague at the time commuted in a truck to his office. He sold it because of gas

I see a lot of pickups especially in the US that have never hauled more than a few Ikea boxes or beach chairs


----------



## Ukrainiandude

Why worry about inflation? Right?
*Theresa Tam gets 22% pay raise: Report*








Theresa Tam gets 22% pay raise: Report


Dr. Theresa Tam has been granted a 22 percent pay raise, according to Blacklock's Reporter.




torontosun.com


----------



## Ukrainiandude

damian13ster said:


> I drive a truck - is it because I prefer it over Toyota Yaris? No. It is because once a week I need to haul tools, sometimes pumps, etc. - it is a necessity.


You do know that you could tow a trailer with even a small vehicle?
The towing capacity of the Toyota Yaris supports *up to 1050kg*.


----------



## MrMatt

Ukrainiandude said:


> You do know that you could tow a trailer with even a small vehicle?
> The towing capacity of the Toyota Yaris supports *up to 1050kg*.


Are you sure?

Many small vehicles aren't rated for towing in Canada, or have low capacities.
This seems to be a bit more recent change.


----------



## Beaver101

Top CEOs in Canada were paid at second-highest level ever during the pandemic



> _The Canadian Press, Erika Ibrahim, January 4, 2022
> 
> ...
> 
> In 2020, as many Canadians had hours cut or lost their jobs completely during repeated lockdowns and forced closures, the highest-paid 100 CEOs at publicly traded companies earned an average of $10.9 million.
> 
> That was down from the record high of $11.8 million in 2018, but an increase of $95,000 compared with 2019.
> 
> Macdonald said that CEOs receiving the second-highest pay on record is “quite an achievement” given that the pandemic was quite damaging to many of the companies they were running.
> 
> *More than 82 per cent of the average came through bonuses including cash or stock options, which Macdonald said companies creatively calculated to ensure poor performance during the pandemic didn’t affect CEO pay.*_
> 
> *“This only happens in bad times,” said Macdonald. “When things go badly for the company, CEOs are protected in many cases. When things go well for the company, the sky’s the limit.”*
> 
> _... _


 ... what bank CEOs are saying here is "inflation is a worry for the little people".


----------



## Ukrainiandude

MrMatt said:


> Are you sure?
> 
> Many small vehicles aren't rated for towing in Canada, or have low capacities.
> This seems to be a bit more recent change.











Toyota Yaris Towing Capacity


The towing capacity of the Toyota Yaris supports up to 1050kg. This is a braked figure, while the maximum load for any vehicle without using trailer brakes is 750kg, if rated to tow that much in the first place. Kilograms can also be expressed as kilos, and if you want to know the tow rating in...




www.carsguide.com.au


----------



## MrMatt

Ukrainiandude said:


> Toyota Yaris Towing Capacity
> 
> 
> The towing capacity of the Toyota Yaris supports up to 1050kg. This is a braked figure, while the maximum load for any vehicle without using trailer brakes is 750kg, if rated to tow that much in the first place. Kilograms can also be expressed as kilos, and if you want to know the tow rating in...
> 
> 
> 
> 
> www.carsguide.com.au


Australia is a different country.
Most cars in Canada have VERY limited towing.


----------



## AltaRed

Why not just google the information? Trailer towing for Canada - Toyota Yaris Manual - Toyota Service Blog It seems like 700lb towing is acceptable but only in jurisdictions that require trailer brakes. Can A Toyota Yaris Tow A Trailer? | EduAutos

700lbs is a light utility or similar trailer, or a small pop-up tent trailer perhaps.


----------



## Ukrainiandude

MrMatt said:


> Australia is a different country.
> Most cars in Canada have VERY limited towing.


It is the same 1.5 litre engine. No one is going to weigh how much you tow. This is Canada. You tow what you can.


----------



## Ukrainiandude

AltaRed said:


> 700lbs is a light utility or similar trailer, or a small pop-up tent trailer perhaps.


In the UK the current 1.3L Gas Auto 5-Door Yaris is rated at 880 kg or 1936 lb towing.
My buddy towed about 1000 lbs of boat and trailer with his Yaris, no problems at all. Legally you can tow between 2 and 3k unbraked with any car in most provinces and states.




__





Yaris towing a trailer


Sorry no pic but yesterday I saw a Yaris pulling the smallest teardrop trailer I've ever seen, and it still looked big behind the Yaris. Toyota doesn't "recommend" towing with one but what do they know? Traveling light to the extreme I guess....



bobistheoilguy.com




And in Canada Yaris is 1.5 L gas


----------



## MrMatt

Ukrainiandude said:


> It is the same 1.5 litre engine. No one is going to weigh how much you tow. This is Canada. You tow what you can.


If the vehicle isn't rated for towing, it can void your warranty.

I'd also be curious if you get in an accident, what would insurance say, is it inappropriate usage to use a vehicle in way that is not approved by the manufacturer?


----------



## AltaRed

One can only do legally what the vehicle is rated for, in the jurisdiction that it is in. In Canada, the Yaris is rated for 700lbs per Toyota Canada. Clear as water. No value in arguing anything differently. Shall we continue to derail this thread?


----------



## off.by.10

AltaRed said:


> No value in arguing anything differently. Shall we continue to derail this thread?


Now now, we haven't even begun on whether or not the tools that need to be hauled would fit in the back of a Yaris. Given that I've seen a guy collect my 60 gallon water heater with his honda fit, I vote yes. I've also seen him collect a washing machine. People's "needs" are often largely *inflated* ( <-- see there, we're on topic ) by marketing.


----------



## Ukrainiandude

AltaRed said:


> One can only do legally what the vehicle is rated for, in the jurisdiction that it is in. In Canada, the Yaris is rated for 700lbs per Toyota Canada. Clear as water. No value in arguing anything differently. Shall we continue to derail this thread?


Funny enough.
Here's an article about towing (written by an xB owner) - it even mentions the Yaris. Look at the rest of the world, and read this. Then decide...









The Great American Anti-Towing Conspiracy
By Paul Niedermeyer
February 23, 2008 - 

“Scion does not recommend towing a trailer… your vehicle was not designed for towing." Welcome to the great American anti-towing conspiracy. Manufacturers of anything less than a big SUV or pick-up are trying to take away our God-given right to tow with our cars. For a guy who’s towed everything from a Radio Flyer wagon behind a pedal-powered John Deere sidewalk tractor, to a three-bedroom house, I feel like I’m being singled out. Of course, there’s a possibility that I’m the cause as well as the target of this jihad. A lot of lawyers do drive the Ventura Freeway, and one of them may well have seen my spectacular stunt with a trailer.

Before I recount the creative maneuver with which I simultaneously occupied all four lanes of “the world’s busiest freeway” at sixty-five mph, let’s look at the prejudice American would-be towers are up against …

On Toyota’s UK website, the Yaris is credited with a towing capacity of 1050kg/2315lbs. That’s right in line with *the old rule of thumb that a car can safely tow an amount equal to its own weight.*

But here in the land of the (not so) free, the Yaris’ owner’s manual admonishes: “Toyota does not recommend towing a trailer with your vehicle.” The unnamed author goes on to give a partial pass to our northern neighbors: “In Canada only, total weight of cargo and trailer not to exceed 700lbs.” Please leave your trailers at the border? Perhaps this partial exemption reflects Canada’s status as being somewhere between English and American. But the logic is lost on me.

Maybe it’s a blatant tactic by Toyota to meet Tundra sales goals, by forcing us tow-heads into buying that over-achieving tug (rated for 10,000+lbs). But Honda is in on the conspiracy too. The CRV weighs 3600lbs and offers 166hp, about the same as an old gen Explorer. In Europe, where folks often buy CUV’s specifically for their towing capacity, the CRV is rated to tow 2000kg/4400lbs. And in the tow-aphobic US? A measly 1500lbs!

It wasn’t always like this. In the sixties, you’d see 40hp VW Beetles pulling a trailer. In 1976, my VW Beetle died in Ohio heading back to Iowa, so we left it and hitch-hiked the rest of the way. My girlfriend’s Mom was driving a 70hp Corolla, which was rated to tow 1800lbs, exactly the weight of my VW. She generously offered it. Towing the Bug home, the Corolla never broke a sweat.

Which I can’t say for myself when I nearly shut down the 101. 

It was 1986. We had just bought our first house, in Woodland Hills. I rented a big double-axle twelve-foot trailer to haul debris and junk to the dump. My Mexican helper was a zealous worker, loading lots of broken concrete into the back end of the trailer. I remember glancing at the warning sign about having 60 percent of the weight ahead of the axles. But any fleeting thought of relevancy or concern was quickly overpowered by the testosterone-fueled urge to PULL!

That trailer must have weighed about three times as much as the Jeep Cherokee tug. I managed to squeeze into the perpetually crowded Ventura freeway.

When our rig (finally) hit 65 in the right lane, the trailer began oscillating, which escalated exponentially. The next thing I knew, the Jeep was being swung wildly from side to side, like the tail on a dog. One moment, we were facing towards the shoulder, then across all the lanes facing the center divider. The Jeep was utterly out of control; there was nothing to do but hang on for dear life, waiting for the fishtailing trailer to roll and/or get creamed by the four lanes of traffic behind us.

Fortunately, the other drivers (and that corporate attorney) were on the ball and held back, in awe of our mad gyrations. When enough speed was scrubbed off and stability resumed, we found ourselves in the narrow left shoulder, where we sat bathed in sweat.

I had no choice but to steel myself, get back in the traffic, and fight my way across four lanes while keeping the speed below fifty. When we finally pulled off on the right shoulder, my ashen-faced helper tumbled out, got on his knees and crossed himself, before we started re-arranging the trailer’s load.

Having learned that cardinal lesson of towing, I’m a hair more cautious now. But I still believe that cars, by their nature, are “designed for towing.” So I always carry a tow rope in the old Ford pick-up instead of an AAA card. More than once, Stephanie has schlepped me home with the Forester. I don’t even want to know what its tow rating is; it’s survived just fine. And I’ve found an after-market hitch for the xB, rated for 2000lbs.


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## Ukrainiandude




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## sags

Lol…..good luck when the trailer starts to sway. Seen a few trailers overturned in the ditch over the years.

There is more to it than engine size or vehicle weight….like the frame, tranny,radiator, brakes, hills, wind.

I doubt that rig would be able to chug through northern Ontario.


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## londoncalling

Ukrainiandude said:


> It is the same 1.5 litre engine. No one is going to weigh how much you tow. This is Canada. You tow what you can.


I see all kinds of vehicles pulled over out west in the summer months for towing a camper or trailer with their cars. All you have to do is spend a bit of time on the Trans-Canada Highway system to know that statement is not accurate. Possibly in more remote areas that may not be the case but it is dangerous to live in absolutes. As someone whose company involves weekly transportation of materials on flatbed trailers we were constantly being stopped for inspection. Perhaps it is different in other parts of the country.


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## KaeJS

sags said:


> Lol…..good luck when the trailer starts to sway. Seen a few trailers overturned in the ditch over the years.
> 
> There is more to it than engine size or vehicle weight….like the frame, tranny,radiator, brakes, hills, wind.
> 
> I doubt that rig would be able to chug through northern Ontario.


You're not always right -

But this time, you are.


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## sags

In Ontario it is routine for the OPP and MOT to pull vehicles pulling trailers and U-hauls into the parking lots for a mechanical check.

A mechanic there told me that U-hauls are in the worst shape and they just take them off the road....as well as any other unsafe or illegal trailering hookups.

With Canada Day long weekend coming up........they are going to be very busy.


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## damian13ster

Oilsands investment paralyzed even as crude prices surge amid mixed signals from U.S.


U.S.'s contradictory politics around gas prices, climate change are creating conditions that make investment decisions impossible. Read more.




financialpost.com


----------



## sags

Here is the reason the US isn't interested. I doubt Republicans are either.

They want the US to produce more oil domestically and they have the capability to do so.

_*“I don’t see it as a short-term measure to address the current situation,*” U.S. Treasury Secretary Janet Yellen said about Keystone XL at a press conference in Toronto this week with Canadian Finance Minister Chrystia Freeland. *“And longer term, we remain committed to our climate change objectives.”*_


----------



## sags

I think we need to focus on securing oil production for a "made in Canada" low price for Canadians, but that will require nationalizing the industry.

Access to oil is a valid national security concern, as we have discovered with other resources and commodities.

Canadians should be asking.......why are we paying world prices for our own oil ?


----------



## damian13ster

Well, good for them. By not bringing infrastructure, pipelines, and export facilities - they pushed Europe back to coal.
#ClimatePlan for the win!

And the answer to your question on why we pay global prices for gasoline (not for oil, we actually sell oil cheaper than global price) is because we haven't built infrastructure to transport, refine, and distribute oil


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## sags

I agree.....we don't have the infrastructure because we relied on private industry to build it for us.

If the government is going to build it....as they are the TM pipeline......Canadians should be the chief beneficiaries of doing so.

Provinces would be more likely to support inter-Provincial infrastructure crossing their land if they benefited from it.


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## damian13ster

Well, energy east is never going to be built and that's where export facilities to Europe would be.
TransMountain is facing delays, cost overruns, and more court challenges


----------



## Ukrainiandude

damian13ster said:


> Well, good for them. By not bringing infrastructure, pipelines, and export facilities - they pushed Europe back to coal.


Russian lobbyists shut down all German nuclear plants. Maybe it’s time to reverse it.


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## MrMatt

Ukrainiandude said:


> Russian lobbyists shut down all German nuclear plants. Maybe it’s time to reverse it.


Really, Russian lobbyists lobbied to make Germany dependant on Russian energy? 
Who could have seen this happening? Oh EVERYONE!


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## damian13ster

Gross government debt of Canada reached 3.33 trillion dollars in Q1 2022.
For comparison: 2021 GDP was 1.99 trillion


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## Ukrainiandude

damian13ster said:


> Gross government debt of Canada reached 3.33 trillion dollars in Q1 2022.
> For comparison: 2021 GDP was 1.99 trillion


COVID-19 print press in action. No one is surprised.


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## damian13ster

I know, but it is worth pointing out because Freeland goes around lying saying our debt is better than majority of countries, best in G7, etc.
In the meantime she uses net debt for Canada and gross debt for other countries as comparison.
Sadly, it is rarely mentioned in articles that it is apples vs oranges comparison.


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## sags

Well...........isn't that something ?

I would never have believed that a CPC leader would say that Trudeau wasted taxpayer money to buy the TM pipeline, but that is exactly what CPC leader Candice Bergen said on CTV's Power Play show on Sunday.

If that is the direction the CPC party is heading, western Canadians should consider voting for the Liberals in the future.


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## damian13ster

It really isn't anything.

He is right. We had that discussion couple weeks ago.
The rules government created made Canada a country that is terrible to invest in.
Investment here in projects with long ROI and massive regulatory red tape is poor investment so private investors backed out.
So instead of fixing the rules and removing the red tape, Trudeau spent money on poor investment.

We had this discussion already. Instead of fixing a problem, Trudeau threw money away and didn't fix anything - modus operandi of current government


----------



## sags

So you believe average voters will agree with the same loose connection, or that Trudeau made a mistake because pipelines are a bad investment ?

My personal belief is the government should focus on creating a domestic supply of fuel for Canadians at a much reduced price.

A lower cost of fuel in Canada would be a tremendous competitive advantage to attract new businesses as well.


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## m3s

sags said:


> My personal belief is the government should focus on creating a domestic supply of fuel for Canadians at a much reduced price.
> 
> A lower cost of fuel in Canada would be a tremendous competitive advantage to attract new businesses as well.


You mean like Venezuela? Lots of cheap domestic fuel and socialism for you there

You really do live under a mattress don't you


----------



## damian13ster

sags said:


> So you believe average voters will agree with the same loose connection, or that Trudeau made a mistake because pipelines are a bad investment ?
> 
> My personal belief is the government should focus on creating a domestic supply of fuel for Canadians at a much reduced price.
> 
> A lower cost of fuel in Canada would be a tremendous competitive advantage to attract new businesses as well.


No, pipelines in Canada are bad investment - largely because of Trudeau.
Pipelines by themselves are a great investment, just simply not in Canada because regulations here are ridiculous and make business investment with long payback time in Canada a poor decision.

The correct approach is to change the regulations so then infrastructure becomes a good investment.

There is a very easy way to have lower cost of fuel in Canada - drop carbon tax, drop federal tax, drop provincial taxes on fuel. Boon --> 30-50% discount on fuel instantly


----------



## londoncalling

damian13ster said:


> No, pipelines in Canada are bad investment - largely because of Trudeau.
> Pipelines by themselves are a great investment, just simply not in Canada because regulations here are ridiculous and make business investment with long payback time in Canada a poor decision.
> 
> The correct approach is to change the regulations so then infrastructure becomes a good investment.
> 
> There is a very easy way to have lower cost of fuel in Canada - drop carbon tax, drop federal tax, drop provincial taxes on fuel. Boon --> 30-50% discount on fuel instantly


I agree that the current environment is not pipeline friendly due to taxation and legislation. Now that debt, inflation, cost of living, and amount of Canadian dollars have all ballooned how does the Canadian government get reinvestment into pipelines and the Canadian economy in general. This is not meant to be a pro Conservative or Liberal post as both Trudeau and Harper made great progress in this area. Some would argue (not me) that the lack of environmental regulation and failure to meet previous greenhouse emission targets in the Harper area branded Canadian oil as dirty and undesirable. I think the current government believes it can spend its way out of any problem and that is getting very tiresome. 

National Debt Comparisons: Real-Time World Debt Clocks By Country - Commodity.com 

Canada Money Supply M0 - May 2022 Data - 1955-2021 Historical - June Forecast - Chart (tradingeconomics.com)


----------



## damian13ster

Yeah, because Canadian oil has such an awesome reputation now after 7 years of Liberals.....
Branding is not a problem - it is a commodity. Hell, even Russia has no issues finding market for their oil.
Red tape and infrastructure is a problem.
Look at the TransMountain pipeline by itself. It could have been completed 6-7 years ago. With crazy inflation and IRR metrics chosen that would have absolutely IMMENSE effect on ROI calculation, making the project an absolute no brainer vs a waste of money.
Energy East would have been absolute goldmine. LNG terminals in both east and west coast would be printing money and increasing GDP and well being of Canadians substantially.

The problem is not unique to Canada. In US, there is a pipeline to Appachalian region that is 92% complete - the remaining 8% is in court and will not be completed for years. 
So gas production increase is not possible and Europe/Asia/Africa remain slaves to Russia - thank you climate change activists, Ukrainians are thankful


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## andrewf

damian13ster said:


> No, pipelines in Canada are bad investment - largely because of Trudeau.


Here I thought pipelines were long term infrastructure. I had no idea a substitute drama teacher had such a transformative influence over the future of the country.


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## damian13ster

andrewf said:


> Here I thought pipelines were long term infrastructure. I had no idea a substitute drama teacher had such a transformative influence over the future of the country.


When substitute drama teach becomes a PM for 10 years - he does.
And since substitute drama teacher is about as high of a position he should ever hold - that effect is negative.

Not sure if you ever did evaluate capital projects in your career, but discounted cash flow analysis has first years the project comes online as most significant part of ROI. And if first 10 years have to be spent in court with uncertain outcome - that ROI will naturally be negative in vast majority of cases


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## londoncalling

Again, I don't have a dog in this fight. Canada's energy policy has been subpar more often than it has been stellar. I guess I can take consolation in that we are not unique in that aspect. 

The challenges are difficult due to shear geography and size for Canada to get its resources to market let alone the complications of bureaucracy that you mention upthread. I am not sure why we continue to hamper our own progress with politicking every opportunity. Even construction of the railroads post confederation became a contentious issue that delayed construction. Perhaps it is just tradition for Canada to get in its own way.

Although a smaller producer of energy the Scandinavian countries have done a better job in resource development including overcoming environmental hurdles and creating an investment fund with the profits to spur further growth. Unfortunately, they are nowhere near the size of the major players in how much they can produce and export. Russia knows they have the largest stockpile. If people think the situation surrounding energy supply is bad now wait till this winter. Something's got to give or we may have an energy shortage.

Natural Gas by Country 2022 (worldpopulationreview.com)


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## sags

Only a couple of years ago there was a massive glut of oil around the world.

There was a growing surplus in 2018 before the pandemic further cratered demand.









Global oil market faces surplus throughout 2019 as demand growth slows


Global oil supply will outpace demand throughout 2019, as a relentless rise in output swamps growth in consumption that is at risk from a slowing economy, the International Energy Agency said on Wednesday.




www.reuters.com





Tankers were floating around looking for a place to unload, reserve tanks were filled to the brim, and the price of oil was lower than the cost to produce it.

That scenario existed despite embargoes on Venezuela, Iran, and other countries who were not producing due to war.

There was a massive oversupply and fuel prices were cheap.

In that economic reality oil companies weren't interested in investing more of their own capital.

They were closing down operations and laying people off. They didn't want the TM pipeline because it didn't make financial sense.

They are forecasting a surplus of 1 million barrels of oil a day in the near future, which could increase if sanctions are removed.

Boom and bust cycles mean far more to the capital investment scenario than anything else.









OPEC+ trims 2022 market surplus projection to 1 mln bpd -report


Producer group OPEC+ trimmed its projected 2022 oil market surplus to 1 million barrels per day (bpd), down from 1.4 million bpd previously, a report seen by Reuters showed.




www.reuters.com


----------



## sags

I doubt regulations or taxes in Canada are a big factor in the decisions to spend capital on new projects.

Many of the oil companies recognize they are in a sunset industry and new capital spending today requires an extended payback period.

It is a risk / reward calculation for them, and some are choosing to spend on alternative energy projects instead.


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## sags

Norway is building an enormous sovereign wealth fund.

The OPEC countries have built enormous wealth funds and are diversifying their investments to survive a future of declining oil revenues.

What has Alberta done all these decades ?

I think it is well documented they started out on the right path when Peter Lougheed was the Premier, but since he left the oil royalties have served as a source of general government revenues to provide lower personal and corporate income taxes, avoid a sales tax, and hand out annual "prosperity" cheques.

A steady procession of Conservative governments in Alberta spent the oil revenues as if there was no end to it.

The critics of Trudeau are misguided to place all the blame at his feet. He has spent the past 3 years dealing with a global pandemic.

Stephen Harper didn't build or buy a pipeline. Justin Trudeau bought the TM pipeline and approved the Line 3 replacement.

Recently, Premier Jason Kenney announced that higher oil royalty revenues "balanced the budget".

That is great for Albertans today.......but what about the future generations when oil revenues go into decline ?

Alberta is collecting high royalties based on the price of oil today. Where is the investment for the future ?

_The ability for royalty rates to change based on the price of oil is sometimes referred to as a *'sliding scale.'* The government has designed royalty rates to change based on the price of oil, so the risk and reward is shared between industry and government. When prices are high the royalty rates are higher, and when prices are low the royalty rates are lower. _









Oil sands royalties - Overview


Learn how oil sands royalties are calculated and collected, this includes individual oil sands project data.




www.alberta.ca


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## damian13ster

You can't compare sovereign states with province that has majority of their income and taxes siphoned away by rest of the country

And I am sorry, but if you think that massive red tape and court cases dragging a decade are not influencing capital investment decisions - you are simply not a very smart person


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## londoncalling

Alberta's good fortune is also a large boon to all of Canada. How do you think the national debt is going to be repaid? Where is the money going to come from to keep manufacturing plants like Bombardier in operation next time they need a bailout? I am glad that the AB minister announced provincial debt repayment and investment in the Heritage fund. Although the resource revenue in SK will be much lower in comparison to AB perhaps it will finally result in a balanced budget. Perhaps if oil goes to $200 a barrel they will be able to create a fund for that province.


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## james4beach

Here's a great interview with Jim Grant, an expert on interest rates.


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## KaeJS

londoncalling said:


> Perhaps if oil goes to $200 a barrel


This won't happen.


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## MrMatt

KaeJS said:


> This won't happen.


Oh yee of little faith.

The government is pushing inflation like crazy, it's just a question of WHEN we hit $200.


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## KaeJS

MrMatt said:


> Oh yee of little faith.
> 
> The government is pushing inflation like crazy, it's just a question of WHEN we hit $200.


That's almost a 100% increase from the current price.

It won't happen.


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## MrBlackhill

KaeJS said:


> That's almost a 100% increase from the current price.
> 
> It won't happen.


Maybe that's what people said back in the 2000s as they saw the oil bull run 3x from $25 to $75, then hit a resistance around $75 in 2006 as oil retreated below $60, maybe then they thought "$140 won't happen, that's double the $70 where we've just hit resistance". And then...

I bet that $150 oil is still achievable within 2022. Then $200 oil could happen in 2023-2024.

If the recession doesn't happen this year, the bear market will continue as inflation will stay high due to commodity prices rising and rates who can't be increased anymore.


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## MrMatt

KaeJS said:


> That's almost a 100% increase from the current price.
> 
> It won't happen.


It hit $140 a decade ago.
Since then the anti-oil movement has only strengthened

We have an energy crisis, Germany is considering restarting their coal plants.


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## andrewf

damian13ster said:


> You can't compare sovereign states with province that has majority of their income and taxes siphoned away by rest of the country
> 
> And I am sorry, but if you think that massive red tape and court cases dragging a decade are not influencing capital investment decisions - you are simply not a very smart person


Loads of excuses. It would be credible if AB wasn't high spending, low tax jurisdiction. They are happy being grasshoppers when they could be ants.


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## londoncalling

KaeJS said:


> This won't happen.


I don't think it will either but I wouldn't rule it out. The comment was more about this country's failure to transform commodity booms into sovereign wealth funds that generate returns in perpetuity as has been done elsewhere. My own province has more diversity in its commodity revenue and has ran defecits for a number of years. If individuals are looking to educate themselves on finances most governments are a bad example to follow.


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## damian13ster

andrewf said:


> Loads of excuses. It would be credible if AB wasn't high spending, low tax jurisdiction. They are happy being grasshoppers when they could be ants.


Low tax? Are you kidding me? The federal taxes alone make Canada and all provinces included a highly taxed country. Albertan taxes are high - they are just not as stupidly high as other provinces.

Prior to NDP coming to power Alberta had a nice heritage fund and very little debt. Obviously now that has changed. This year portion of debt will be repaid, heritage fund will be added to, and Alberta will continue propping up bankrupts out east. What else do you want?


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## damian13ster

New clean fuel regulations will cost Canadian families up to $300 by 2030: analysis - National | Globalnews.ca


It will cost between $22.6 billion and $46.6 billion for refineries and other fuel suppliers to comply, or an average of about $151 per tonne of emissions reduced.




globalnews.ca


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## andrewf

damian13ster said:


> Prior to NDP coming to power Alberta had a nice heritage fund and very little debt. Obviously now that has changed. This year portion of debt will be repaid, heritage fund will be added to, and Alberta will continue propping up bankrupts out east. What else do you want?


Revisionist history? It was small before the NDP took power, and continues to be small.

I should hope Alberta could manage to balance the budget with oil at USD$120/barrel.


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## andrewf

damian13ster said:


> New clean fuel regulations will cost Canadian families up to $300 by 2030: analysis - National | Globalnews.ca
> 
> 
> It will cost between $22.6 billion and $46.6 billion for refineries and other fuel suppliers to comply, or an average of about $151 per tonne of emissions reduced.
> 
> 
> 
> 
> globalnews.ca


I don't think this analysis makes sense. If the carbon tax is rising to $170/tonne by 2030, then any investment that costs $150/tonne per tonne reduced with result in cost savings. Or are they just double counting the impact of the carbon tax? I'm pretty suspicious of the article given that it doesn't cite the source of the analysis. If it was done by an O&G or right wing think tank I think we can be comfortable that they are being flexible with the truth.


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## andrewf

damian13ster said:


> Low tax? Are you kidding me? The federal taxes alone make Canada and all provinces included a highly taxed country. Albertan taxes are high - they are just not as stupidly high as other provinces.
> 
> Prior to NDP coming to power Alberta had a nice heritage fund and very little debt. Obviously now that has changed. This year portion of debt will be repaid, heritage fund will be added to, and Alberta will continue propping up bankrupts out east. What else do you want?


Also, Ontario collects less revenue per capita and spends less per capita than other provinces. Alberta has far higher per capita spending than Ontario, and any other province other than NL. Alberta could be banking over $1000 per capita annually in resource revenue that it instead chooses to blow on current consumption.









Financial Accountability Office of Ontario | Commentary


The Office provides independent analysis on Ontario's finances, trends in the economy and related matters important to the Legislative Assembly.




www.fao-on.org


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## sags

Alberta has never managed their boom and bust cycles very well.

It is much easier to blame everyone else for their lack of good fiscal management.


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## damian13ster

andrewf said:


> Revisionist history? It was small before the NDP took power, and continues to be small.
> 
> I should hope Alberta could manage to balance the budget with oil at USD$120/barrel.


The debt is at over 120bln. It is by no means small anymore.

And agreed with what you said - Alberta has spending problem. Spends more on healthcare and education than national average despite lower cost of living. Public unions jacked up salaries because province in certain times could afford it and they took the government and tax-payers behind a woodshed during negotiations. The sunshine list for Alberta is worth a read - it is a doozy and shows the kind of structural spending problem the province is dealing with

Like you noticed yourself, it is not a revenue problem, it is a spending problem - hell, there was an uproar when they wanted laundry services to go to private corporations rather than union to save taxpayers millions


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## londoncalling

Taxation and spending need to be consistent. It makes sense that Ontario spends less per capita as it also taxes less. That should be quite obvious. Some can provide good value and quality services with a high tax rate and others cannot or do not. The past few posts have been good examples of poor spending. Ultimately, future spending is determined by current investment from all revenue sources including taxation. Other things that need to be considered in cost of services are population density and geography. this is why rural servicing is always expensive on a per capita basis. For Alberta and Ontario the spread is not as big a factor than between Canada and many European countries.


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## sags

After decades of Conservative governments, Albertans should know who is responsible.


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## damian13ster

They do. That's why they kicked the NDP out of power first opportunity they got, after giving them a chance in 2015


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## andrewf

damian13ster said:


> They do. That's why they kicked the NDP out of power first opportunity they got, after giving them a chance in 2015


This is a long-standing trend, under the previous one party state in Alberta.


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## damian13ster

andrewf said:


> This is a long-standing trend, under the previous one party state in Alberta.


Meh, everyone can look at heritage fund inflows and debt history and look at actual objective numbers rather than listening to posters who don't provide any data


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## andrewf

__





Loading…






open.alberta.ca





Show me on the chart on page 3 of this report the massive decline in value in the fund during the NDP government, and look at page 9 where it shows to fund steadily being drawn down in value under the one party PC party rule.


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## damian13ster

andrewf said:


> __
> 
> 
> 
> 
> 
> Loading…
> 
> 
> 
> 
> 
> 
> open.alberta.ca
> 
> 
> 
> 
> 
> Show me on the chart on page 3 of this report the massive decline in value in the fund during the NDP government, and look at page 9 where it shows to fund steadily being drawn down in value under the one party PC party rule.


Since the Fund was established in 1976, it has received deposits of approximately $12.0 billion from non-renewable resource revenues and $3.9 billion from budget surpluses in 2005-06 to 2007-08. 

All the deposits and the creation of the fund was under PC. What did NDP do to help the fund?

Albertans have spoken and kicked NDP to the curb after giving them a chance at ruling. There were valid reasons for it. I have lived here under NDP rule - it wasn't pretty.


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## sags

The Heritage Fund report is embarrassing and Albertans should be outraged over the mismanagement of the fund.

$43 billion transferred to government "general revenue funds" since inception ? $1.2 billion transferred to government "general revenue funds" this year ?

Didn't Premier Kenney also dip into the Alberta public pension fund to invest $1.5 billion into the defunct Keystone Pipeline ?

Cripes.........I am glad Alberta's Premiers don't manage the CPP fund. They got really sticky fingers.


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## damian13ster

Isn't covid precisely when the emergency fund should be used?
The fund is actually really well managed. Returns are pretty damn good,

The idea of heritage fund was great and it is paying off handsomely, thanks to large investments in it done by conservative party (none by NDP). The issue is the deficit spending that started in 2014/2015.
Prior to that Alberta's financial position was very good. The charts above don't lie. Look at the deficits and debt added under NDP. It will take couple of decades to clear up the mess they did in 5 years.

It really isn't an accident that debt and deficits exploded when conservatives lost power - both on federal and provincial level.

The problem is that the spending has been a complete waste. Government services are worse than they ever have been before despite massive money printing. That's the entire tragedy


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## sags

The "returns" on capital would have been much higher if the Conservative governments hadn't continually drained the fund to pay their day to day bills.

Yearly return on capital is an important data point, but so is time in the markets which the money that was withdrawn never had a chance to accumulate.


----------



## andrewf

damian13ster said:


> Isn't covid precisely when the emergency fund should be used?
> The fund is actually really well managed. Returns are pretty damn good,
> 
> The idea of heritage fund was great and it is paying off handsomely, thanks to large investments in it done by conservative party (none by NDP). The issue is the deficit spending that started in 2014/2015.
> Prior to that Alberta's financial position was very good. The charts above don't lie. Look at the deficits and debt added under NDP. It will take couple of decades to clear up the mess they did in 5 years.
> 
> It really isn't an accident that debt and deficits exploded when conservatives lost power - both on federal and provincial level.
> 
> The problem is that the spending has been a complete waste. Government services are worse than they ever have been before despite massive money printing. That's the entire tragedy


The point stands that Alberta is blowing its resource endowment on current consumption by using those revenues to bridge the gap between very high spending and low revenues. Classic grasshopper mentality. Eventually, Alberta will be left with uneconomic reserves and no financial endowment to show for it.


----------



## damian13ster

Alberta has reserves for a century.
The province does have the spending problem. Unions took advantage of government and now spending per capita are the highest in the country and need to be lowered - the problem is that even such an obvious change like saving millions on laundry services has unions get their panties in a wad and NDP buying attack ads


----------



## andrewf

damian13ster said:


> Alberta has reserves for a century.
> The province does have the spending problem. Unions took advantage of government and now spending per capita are the highest in the country and need to be lowered - the problem is that even such an obvious change like saving millions on laundry services has unions get their panties in a wad and NDP buying attack ads


The reserves won't be economic for a century. Enjoy it while it lasts. Eventually Alberta will be back to pauper have-not status like it was before oil was discovered.


----------



## londoncalling

Just to provide some additional context I have provided a link to the price of oil. Unfortunately, I was unable to find an inflation adjusted chart for western select. It would seem that the debt graph and budget stats in post #830 have more to do with the price of oil than any other factor. It also correlates well with the event timelines in the heritage fund report. I draw the conclusion that Alberta's fortunes have always been tied to the price of oil. Government policy has moved the needle either direction very little over that timeline. The fund has served its purpose as stated in the report. However, I feel that the aim of the fund is short sighted. Perhaps drawing less in boom times would provide better growth for the fund to offset reliance on significant draw during down times. 

Crude Oil Prices - 70 Year Historical Chart | MacroTrends


----------



## damian13ster

On some perspective, yes.
However, the price of oil in 1995-2005 was lower inflation adjusted than 2014-2019.
Yet the debt and deficits don't reflect that at all. 
You can see that spending decreased with decrease in revenue under CPC government. Spending kept increasing under NDP despite revenue dropping - that's the difference


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## londoncalling

Yes indeed. Based on your chart deficit budgets started in 2010? and have been in place ever since. As you indicated the spread gets worse in 2016. Hopefully, for Alberta high oil prices continue. Definitely, easier for provinces like AB and SK to govern with high commodity prices.


----------



## damian13ster

londoncalling said:


> Yes indeed. Based on your chart deficit budgets started in 2010? and have been in place ever since. As you indicated the spread gets worse in 2016. Hopefully, for Alberta high oil prices continue. Definitely, easier for provinces like AB and SK to govern with high commodity prices.












Yes, I have posted this previously


----------



## damian13ster

Decent article on what money printing leads to:









Sri Lanka Shows the Folly of Fringe Theories


Promoting organic farming and heedlessly printing money, the country’s ruling clan has conclusively demonstrated why some ideas should remain on the shelf.




www.bloomberg.com





Enter the second set of cranks. The central bank governor at the time, Weligamage Don Lakshman, informed the public during the pandemic that nobody need worry about debt sustainability. All Sri Lanka needed to do was “increase the proportion of domestic debt.” Then the problem would be solved, since “domestic currency debt … in a country with sovereign powers of money printing, as the modern monetary theorists would argue, is not a huge problem.” 

Sri Lanka is the first country in the world to reference MMT officially as a justification for money printing. Lakshman began to run the printing presses day and night; his successor at the central bank, Ajith Nivard Cabraal, who also denied the link between printing money and inflation or currency depreciation, continued the policy. Between December 2019 and August 2021, Sri Lanka’s money supply increased by 42%. 

Reality did not take long to set in. By the end of 2021, inflation hit record highs. And, naturally, the clever plan to “increase the proportion of domestic debt” turned out to be impossible, as fewer people wanted to buy treasury bills. 

By February, the country was clearly heading for default.


----------



## sags

MMT proposes control of the money supply circulating in the economy by taxation. The concept requires a strong regime for tax collection.

In troubled times the government lowers taxes to increase incomes. In good times the government raises taxes to keep the money supply in balance.

Critics of MMT only talk about one side of the theory, because there is an aversion to raising taxes at any time for any purpose.

When Greece got into trouble a few years ago, the main cause was the lack of tax collection.

They had a huge underground black market and tax collection was a national joke.

Mention raising taxes in any discussion with many people makes their head explode.

Continued reliance on an economic theory developed hundreds of years ago is as questionable as MMT.


----------



## damian13ster

That was not the reason for the problems in Greece.
The reason was lack of productivity, low retirement age, massive benefits, which led to deficits and huge debt.
Greece was a manufacturing and shipping hub for a long time, which led to good times, which then had them waste money, rise in socialism, drop in productivity --> debt problems --> bailout.

Have you ever even travelled to Greece? How many mainland regions did you visit? How many conversations did you have with retirees, used to be blue collar workers, and management of Greek companies?


----------



## damian13ster

Philip Cross: Why central banks screwed up


Economists’ domination of central banks is suffocating




financialpost.com




.


----------



## m3s

Modern Monetary Theory is leading to economic crisis around the world

Meanwhile USD booms. I guess printing money works alright if you're the global reserve currency

Sri Lanka president to step down on July 13

2 days ago:
Sri Lanka hikes rates in face of record inflation, despite economic contraction

Japan and Europe don't look so hot either


----------



## sags

MMT would be an economic system adopted by consensus by the G7.

Countries like Greece, with such weak tax collection they failed to collect 85% of the taxes due, or an impoverished nation like Sri Lanka issuing currency without controls, are not practicing MMT.

No country is currently practicing MMT but that will change in the future.


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## damian13ster

Over last 2 years significant amount of countries practiced MMT - that's why we have runaway inflation right now


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## MrBlackhill

9.1% inflation in the US vs forecasted 8.8%


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## james4beach

I'm currently in discussions with a client to increase the cost of my services (project / wages) by 35%

One of my business partners is concerned that increase is too large, but even if we go with our milder increase, that's still going to be +25%.

Come on, Bank of Canada. I dare you to stop me!


----------



## MrBlackhill

james4beach said:


> I'm currently in discussions with a client to increase the cost of my services (project / wages) by 35%
> 
> One of my business partners is concerned that increase is too large, but even if we go with our milder increase, that's still going to be +25%.
> 
> Come on, Bank of Canada. I dare you to stop me!


Inflationary spiral. Thanks for being part of the issue...


----------



## james4beach

MrBlackhill said:


> Inflationary spiral. Thanks for being part of the issue...


This is a free market and I have to protect myself. Inflation might even accelerate further. Millions of other economic participants are thinking the same, so don't get angry at me.

Part of the reason I need to increase my prices so much is that I don't trust that the central bank is really going to fight inflation. I have to protect myself from the scenario where 8% inflation becomes 10% then becomes 15%.

I can't keep updating my prices, so I have to get ahead of the problem. For example when I enter a new contract, that price may be in effect for a couple years. You're calling this "inflationary spiral" but it's just rational pricing under these economic conditions.

The central banks have the power to really stop this kind of psychology. Just jack rates up to something historically normal like 6% or 7%.


----------



## james4beach

Everyone reading this should demand a 10% raise, if they haven't gotten a raise recently. *That's what you need to keep steady pay.*

Otherwise you're getting left in the dust with the cost of everything rising 8% to 10%.

If you're a renter (like me) you're going to see a huge rent increase next year. The landlord at my building has requested additional rent increases too. All together my rent is probably going up 10% next year. I've been in touch with my MLA and the province's Housing Minister to ask them to cap rent increases below the inflation level, but I doubt they are going to do it. It's really important to preemptively jack up our pay levels, because these effects (housing, food) are really going to hurt and there is no sign of them getting better.

And if you move? Holy cow. My building now rents units for 30% more than last year's prices. _Thirty percent more_. So I absolutely do need to jack up my pay level.


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## james4beach

@MrBlackhill now that I've remembered that rents in my neighbourhood are up around 30%, I'm starting to think my 35% rate increase may not be enough.

Housing (rent) is my single biggest expense. Looking ahead two years, maybe I need more like a 50% increase in rates? What do you think?


----------



## m3s

sags said:


> No country is currently practicing MMT but that will change in the future.


sags why do you even bother

Anything you write is as nonsense as when you said inflation was good for GICs

If you don't have a clue why not try to learn instead of showing everyone


----------



## Gator13

james4beach said:


> Everyone reading this should demand a 10% raise, if they haven't gotten a raise recently. *That's what you need to keep steady pay.*
> 
> Otherwise you're getting left in the dust with the cost of everything rising 8% to 10%.
> 
> If you're a renter (like me) you're going to see a huge rent increase next year. The landlord at my building has requested additional rent increases too. All together my rent is probably going up 10% next year. I've been in touch with my MLA and the province's Housing Minister to ask them to cap rent increases below the inflation level, but I doubt they are going to do it. It's really important to preemptively jack up our pay levels, because these effects (housing, food) are really going to hurt and there is no sign of them getting better.
> 
> And if you move? Holy cow. My building now rents units for 30% more than last year's prices. _Thirty percent more_. So I absolutely do need to jack up my pay level.


While listening to the news this morning, they mentioned that rents are back to pre-pandemic levels in the GTA and are likely going to increase further due to the ongoing interest rate hikes. They also mentioned that more people are deciding to rent rather than buy which will add to further increases in rent. Due to the higher rents and flat/lower property prices, they foresee an opportunity for those who want to purchase rental properties. (not speculators)


----------



## MrBlackhill

james4beach said:


> This is a free market and I have to protect myself. Inflation might even accelerate further. Millions of other economic participants are thinking the same, so don't get angry at me.


I was being a bit provocative, but I'm not angry. It's the capitalist game and we all want to get ahead. So you are part of the problem because of capitalism and free market. I was also part of the problem when I bought my property in 2019 and increased the rent by +40% because the tenant was leaving. Yet, people were rushing in to visit because... that was still considered cheap compared to the market. Once I found the perfect tenants, I haven't increased them on their first 2 renewals, but I did increase them this year... by less than 3%, a bit below the regulated price increase. Everybody's super happy.

I'm not saying that capitalism and free market is bad, but it has its pros and cons like everything else.



james4beach said:


> Housing (rent) is my single biggest expense.


If you stay at the same place, your rent shouldn't go up too much due to rent control. Prices go up when there's renovations or new tenants. People I know who have stayed at the same place for many years have super cheap rents. But I understand that you may want to increase your revenues because if ever you want to move out, you won't ever find another place as cheap as what you were paying.



james4beach said:


> Looking ahead two years, maybe I need more like a 50% increase in rates? What do you think?


You don't have to be scared by inflation to jack up your prices. As you said, it's a free market. So you have to study the market of your competition and as long as people are willing to pay the price, you can set whatever price you want. If you have 20 clients paying for the same service and you jack up your price +35% and lose 3 clients due to this, you are still increasing your revenues overall, though maybe 3 other clients will continue with you while looking for cheaper alternative and then you'd be losing. You are the one who knows what's the best strategy.


----------



## sags

So James....high inflation costs you more personally, but at the same time presents opportunities to buy stocks at a steep discount.

How does that balance out for you overall.......positive or negative, or is it too early to determine until stock prices bounce back up ?

If you received automatic cost of living increases, would that affect the equation ?


----------



## sags

People with GICs......are you opting to retain them for the higher interest or cashing them out to buy discounted stocks or physical assets ?


----------



## james4beach

sags said:


> How does that balance out for you overall.......positive or negative, or is it too early to determine until stock prices bounce back up ?


That's a very good question and I don't know. Just like everyone else, my investments are currently suffering.

Longer term I would expect that my investments will keep up with inflation.


----------



## like_to_retire

sags said:


> People with GICs......are you opting to retain them for the higher interest or cashing them out to buy discounted stocks or physical assets ?


I never buy GICs that I can "cash-out" as that type don't have the higher yields of regular GICs. Personally, I only purchase 5 year GICs after one comes due in my GIC ladders.

I have an asset allocation that defines a certain percentage that goes to fixed income and another percentage to stocks. It matters not what the interest rates of the day are regarding asset allocation. Stay the course.

Being retired, GIC interest and stock dividends provide a certain income. It's a welcome change this year to have my GIC interest income suddenly double or triple. That's a massive increase. 

As a retiree, who owns their home and car with no debt, and can control all their expenses, the small change in expenses from inflation absolutely pales in comparison to the increase in income from GICs . This is the reason many retirees are pleased with the interest rate increases, while young people, not so much.

ltr


----------



## sags

So you are content with the GIC and not interested in cashing out, buying stocks, and flip and flopping around ?

Yea, that is a good plan for people largely unaffected by inflation. My wife agrees with you and told me it isn't happening when I mentioned it to her.

I am also thinking that GICs come in handy if there is an asset you want to buy in the future like a boat, atv, motorcycle, Babe Ruth card, gold coin etc.

Hard assets tend to crash in price during a recession, which I believe is coming at full throttle.


----------



## londoncalling

sags said:


> People with GICs......are you opting to retain them for the higher interest or cashing them out to buy discounted stocks or physical assets ?


I have a lot of my fixed income in redeemable GICs at the moment. I had some 5 year rungs come due over the last few years that I put into shorter duration to eventually move over to equities. In fact, by November all of my fixed income will be redeemable or in cash unless I reestablish a 5 year ladder before then. I am not sure I need fixed income due to my time horizon and having the bulk of my retirement in a DB plan. My DC plan also holds fixed income. I felt after last year's runup in equities 2022 would see a major correction so instead of moving over to my trading account where I would be tempted to buy equities I started buying 1 year redeemable terms since November. I have broke and renewed with each rate increase. I have several possible places to reallocate these funds over the next 18 months. 

1. Re-establish GIC ladder if/when rates normalize
2. Move to equities should we experience a deeper bear market and I run out of dry powder
3. Pay off mortgage 
4. Possible RE purchase 

For now I am waiting as I still have cash to deploy into stocks in my equity portfolio. Although I have been making many regular buys they are usually less than 1% of equity portfolio. Total cash and fixed is about 25% of DIY portfolio. I do not include my home as part of that equation. 

My guess is most are happily rolling over any GICs after seeing abysmal rates for far too long. I may be ratcheting up my risk but I feel my allocation was misaligned with my tolerance level. When I first started DIY I bought into the philosophy that every investor needed fixed income. After a few cycles I realized I don't need as much fixed income. When retirement is a lot closer I will decrease equity allocation.


----------



## sags

Peter Schiff has rotated his podcasts to delving into the US financial data and what it reveals on a granular basis, for those interested in data analysis.

*Interesting that the highest level of inflation has made vehicle parts and repairs the highest line item category.*

So, new cars are up and many can't afford to buy one, and now they are facing higher repair costs to continue driving their older vehicle.

There is a huge pent up demand for new vehicles, as the age of the "cars on the road" continues to get older and older, which is over 12 years now.

That demand could wither away pretty quickly, if prices continue to rise and there is a recession.

Problem is that with the chip shortage, auto manufacturers are using their limited chips to produce their most expensive (and most profitable) vehicles.

A modern vehicle has an average of 3,000 chips or more in it.

There is also a looming shortage of auto mechanics. Young people aren't interested in the trades anymore.


----------



## like_to_retire

sags said:


> Young people aren't interested in the trades anymore.


Correction, young people aren't interesting in working anymore.

ltr


----------



## MrBlackhill

like_to_retire said:


> Correction, young people aren't interesting in working anymore.
> 
> ltr


Is that why today's households work more than 45 years ago as we have much more dual earners than before? Almost twice as much families have both parents working.

I wish we could financially afford to be single earners and have all that extra free time, like back in the 70s.

No wonder why the young people want the 4-day workweek, because they have lost the free time their parents had.


----------



## sags

Geez........I don't know about that.

My wife and I are both boomers.......in fact she was born in 1946, the first year for boomers, and we both worked in good jobs for over 40 years.

I know some families who only had one income, and it was a good income......but they still struggled along and didn't have a lot.

My dad was the only earner in our family with a wife and 5 kids, and we were dirt poor working class.

The only thing I ever got for Christmas was a couple of packs of hockey cards. We grew up learning not to ask for something dad couldn't give.

It may be worse today for the recent generation, but they need to plan their futures around training and education in a field that earns a decent living.


----------



## MrBlackhill

sags said:


> Geez........I don't know about that.
> 
> My wife and I are both boomers.......in fact she was born in 1946, the first year for boomers, and we both worked for over 40 years.
> 
> I know some families who only had one income, and it was a good income......but they still struggled along.
> 
> My dad was the only earner in our family with a wife and 5 kids, and we were dirt poor working class. The only thing I ever got for Christmas was a couple of packs of hockey cards. We grew up learning no to ask for something my dad couldn't give.
> 
> My grandfather was a sole earner with a wife and 3 kids, and he bought a house near the CNR where he worked. He never had a drivers license or vehicle.
> 
> Sacrifices were made by single earner families even back then.


The difference is that today a single earner family on the median income would not be dirt poor... they would be in the streets. And why single earner families on median income don't have 3+ kids? Because they know they can't afford it.

All Boomers who were median income dual earners are filthy rich today, whereas median income dual earners Millenials are the norm and wonder if they'll be able to retire at 65.

For some families it's not a question of sacrifices anymore, it's a question of survival.


----------



## james4beach

MrBlackhill said:


> The difference is that today a single earner family on the median income would not be dirt poor... they would be in the streets. And why single earner families on median income don't have 3+ kids? Because they know they can't afford it.
> 
> All Boomers who were median income dual earners are filthy rich today, whereas median income dual earners Millenials are the norm and wonder if they'll be able to retire at 65.
> 
> For some families it's not a question of sacrifices anymore, it's a question of survival.


Isn't it amazing how the boomers don't realize how uniquely good their fortunes were.

A guy in his 70s recently told me about his first job, and how working for just 3 years (junior position in his area) he was able to buy a house outright, no mortgage. Can you imagine?

And now boomers try to lecture us about "not working hard enough" and other nonsense, when our generation probably works a larger number of total hours, especially with the tethers of electronic communication.


----------



## MrMatt

james4beach said:


> Isn't it amazing how the boomers don't realize how uniquely good their fortunes were.


I think no generation realizes how uniquely good their fortunes were/are. And it keeps getting better for each generation.


----------



## cainvest

james4beach said:


> Isn't it amazing how the boomers don't realize how uniquely good their fortunes were.


Some were lucky, others not and live in hard times ... I think this holds true for most generations ... what's the point? Oddly enough I found out a few years back that 1/3 of my HS grad class had commited suicide ... but sure, sounds like it was easy times huh?



james4beach said:


> A guy in his 70s recently told me about his first job, and how working for just 3 years (junior position in his area) he was able to buy a house outright, no mortgage. Can you imagine?


I know a gen x guy that made millions trading stocks (mostly one stock) in one year. Can you imagine?

I'm sure I could find examples like the above for every generation ... pointless info IMO.



james4beach said:


> And now boomers try to lecture us about "not working hard enough" and other nonsense, when our generation probably works a larger number of total hours, especially with the tethers of electronic communication.


Every gen has hard workers and slackers.

It does seem more so nowadays that people focus on creating a divide on generations (and other things), likely due to the social media aspect I would gather. Just imagine if all people from all gens worked together to solve problems instead of pointing fingers in blame ... that would be an amazing time to be alive.


----------



## MrMatt

cainvest said:


> Just imagine if all people from all gens worked together to solve problems instead of pointing fingers in blame ... that would be an amazing time to be alive.


It is an amazing time to be alive.

The victim mentality is draining. Does it really matter how you got here? What are YOU going to do to make it better?


----------



## londoncalling

MrMatt said:


> It is an amazing time to be alive.


Yes it is. Indeed it is.


----------



## james4beach

cainvest said:


> It does seem more so nowadays that people focus on creating a divide on generations (and other things), likely due to the social media aspect I would gather. Just imagine if all people from all gens worked together to solve problems instead of pointing fingers in blame


Yeah that would be ideal, but the boomer-owned media has made a game of blaming and mocking Millennials for everything. And jokes about laziness etc.

I know that not every boomer is well off, but generally speaking, the generation had very lucky economic timing. In comparison, Gen-X had pretty much the most unlucky timing.

Seeing a privileged group (statistically speaking that's boomers) mocking and blaming relatively disadvantaged groups isn't very nice.

There are stats on the broad trends, wealth amounts, and things like median home price to income ratios. But I do agree there is a philosophical question about whether these overall averages (broad trends on the generations) really matters at all.

*Individual* outcomes vary so widely, so maybe it doesn't make sense to look at these generation-based statistics or averages.


----------



## cainvest

MrMatt said:


> It is an amazing time to be alive.


Could be even better IMO.



MrMatt said:


> The victim mentality is draining. Does it really matter how you got here? What are YOU going to do to make it better?


Is does matter to some degree how we got here (learn from mistakes) but we shouldn't be beating a dead horse either. To make it better ... wow, that's a long list of things. Stopping the "blame games" and working together with forward thinking is a start.


----------



## cainvest

james4beach said:


> Yeah that would be ideal, but the boomer-owned media has made a game of blaming and mocking Millennials for everything. And jokes about laziness etc.


So what is this boomer owned media you speak of? TV? Radio? All social media platforms?

Simple jokes are one thing (correct or not) but when divisions of hate are created (age, sex, race, etc) that will never end well IMO. Using terms or peoples names (real or made up) in a derogatory fashion, accepting negative stereotype attitudes as both things people shouldn't be propagating. 



james4beach said:


> I know that not every boomer is well off, but generally speaking, the generation had very lucky economic timing. In comparison, Gen-X had pretty much the most unlucky timing.
> 
> Seeing a privileged group (statistically speaking that's boomers) mocking and blaming relatively disadvantaged groups isn't very nice.
> 
> There are stats on the broad trends, wealth amounts, and things like median home price to income ratios. But I do agree there is a philosophical question about whether these overall averages (broad trends on the generations) really matters at all.
> 
> *Individual* outcomes vary so widely, so maybe it doesn't make sense to look at these generation-based statistics or averages.


First off is there some life guarantee that future gens will always "have it better" than the last? NO. Do most parents want a better life for their children ... most likely YES. Will blaming previous gens because life got more difficult make things better in the future ... most likely NO.


----------



## MrBlackhill

cainvest said:


> Will blaming previous gens


Millennials are just reacting to the Boomers who started complaining about them, not the other way around. It's a bit of a natural reaction to defend yourself or counter-attack when you're being attacked. It's a bit natural that Millenials won't accept being bullied by the Boomers. Some of the Boomers have this bad mentality of thinking "we've had it hard with our bosses/employers so you should too and if you ask for more perks at work it's because you are lazy (not because you are trying to improve the situation of employees for a better work environment and work-life balance)" but now Boomers are the bosses of Millenials but the game has changed and Millenials won't accept being bullied. Some Boomers are actually happy to see that their Millenials kids won't accept being bullied by their bosses.

Also, as soon as Millenials say a fact like "I can't afford a house", Boomers, instead of acknowledging the fact with empathy, will reply stuff like "just work more" or "just spend less" while the facts are that Millenials already spend less than Boomers and that "working more" definitely doesn't solve the issue of housing currently at insane price to income ratios (and that's even though they already work more because they are twice are much dual earners households).

This is a perfect example of egocentric bias. Most people will believe that their success is mainly due to their hard work and dismiss their luck, but when assessing other people's success they'll say it's mainly due to luck and not much to hard work. They will also think that they've accomplished more than what they've actually accomplished. And they will think that others have accomplished less than what they've actually accomplished.

Boomers were the first to complain about Millenials as they joined the workforce with all good intentions, but stronger opinions about their work-life values. How many magazines and articles have you seen with accusing titles like "Millenials are lazy", "How to deal with Millenials", etc. So many of them. I haven't seen many saying "Boomers are to blame" until just recently. None of those are good for the Boomers-Millenials healthy relationship and collaboration.

If my kid's generation end up all asking for a 4-day workweek, I won't be complaining, whining and saying "oh my generation worked 5 days a week, your generation is so lazy" like what the Boomers are complaining about the Millenials. I'll be happy that his generation is working towards improving their situation and the society.


----------



## m3s

MrBlackhill said:


> Millennials are just reacting to the Boomers who started complaining about them, not the other way around. It's a bit of a natural reaction to defend yourself or counter-attack when you're being attacked. It's a bit natural that Millenials won't accept being bullied by the Boomers. Some of the Boomers have this bad mentality of thinking "we've had it hard with our bosses/employers so you should too and if you ask for more perks at work it's because you are lazy (not because you are trying to improve the situation of employees for a better work environment and work-life balance)" but now Boomers are the bosses of Millenials but the game has changed and Millenials won't accept being bullied. Some Boomers are actually happy to see that their Millenials kids won't accept being bullied by their bosses.


I actually do it because of how triggered the boomers always get without realizing that they do far worse to the millennials who mostly shrug it off in comparison

What is also entertaining is the same people who refer to several generations as millennial also constantly say who isn't a boomer. Like yea that's half the joke dumbasses

I'm not even millennial but I'm close enough to relate to them.


----------



## sags

Our son and his spouse really want a house.

I suggested they move to my wife's home town of Eatonia, Saskatchewan where homes cost $40K to $200K

They could both get jobs easily because of their training and experience.

He is competent in several trades and has all kinds of licenses and she is licensed for daycare work.

We would move there too if they wanted us to go there with them. My wife's family is all around there.

But they don't want to go.....so I told them to get used to renting.


----------



## m3s

sags said:


> And government doesn't appear interested at any level.


They are rather interested in doing the opposite sags. Houses don't cost $1M to build

Justin and Chrystia have either drank the Klaus Schwab koolaid and/or benefiting in ways we will never know. When questioned in the house of commons they immediately dismiss this as conspiracy

Yet the plan is in plain sight - "You'll own nothing and you'll love it"


----------



## sags

I agree......so the government should compete with builders and get building tens of thousands of new "affordable" homes.

They don't need to be million dollar mansions. A small 1,000 foot bungalow with a finished basement is plenty big enough for families sizes today.

Eliminate the "gate keepers".....real estate, lawyers, land speculators, builders.........and just build the frigging houses already.

If young adults can buy a home for a reasonable price, they will have money to pay other expenses from the savings from outrageous rents and mortgages.

Providing people with well built affordable homes would have a huge positive economic benefit.


----------



## cainvest

MrBlackhill said:


> Millennials are just reacting to the Boomers who started complaining about them





m3s said:


> I actually do it because of how triggered the boomers always get without realizing that they do far worse to the millennials who mostly shrug it off in comparison


^^ I rest my case.


----------



## james4beach

MrBlackhill said:


> Millennials are just reacting to the Boomers who started complaining about them, not the other way around. It's a bit of a natural reaction to defend yourself or counter-attack when you're being attacked


Exactly


----------



## off.by.10

"He started it!"

How mature.


----------



## cainvest

MrBlackhill said:


> It's a bit of a natural reaction to defend yourself or counter-attack when you're being attacked.





james4beach said:


> Exactly


Really? Maybe natural for kids in an elementary school yard. As adults shouldn't we all try to rise above that?

A few bad apples start something, then others propgate it and escalation starts ... does that sound productive for a society? There are enough silly divisions in our world do we really need to create more?


----------



## MrBlackhill

cainvest said:


> Really? Maybe natural for kids in an elementary school yard. As adults shouldn't we all try to rise above that?


So if your manager keeps telling you every day that you're bad and lazy, you'll just keep your mouth shut?

Notice how I haven't said anything bad about Gen X, Gen Z, Gen Alpha, neither about generations prior to Boomers.




cainvest said:


> A few bad apples start something, then others propgate it and escalation starts ... does that sound productive for a society? There are enough silly divisions in our world do we really need to create more?


I agree with this. That's also why when I see a bad apple I throw it in the trash... and there's still lots of bad apples to throw in the trash.


----------



## MrBlackhill

I recall you own a motorcycle @cainvest . Some motorcyclists will do lane splitting very safely at low speeds during traffic hours when cars are almost stopped on the road, even though it's not tolerated here. But it is in Europe and some US states. Some car drivers will get so mad when seeing a motorcyclist lane splitting, but their main reason to be mad is "they should wait like the others". They aren't mad because they are breaking the law, they are mad because they are frustrated that _they_ have to wait, but not the motorcyclists. It's jealousy. Interestingly, those car drivers would likely do the same if they had a motorcycle.

Same goes for Boomers who like to keep calling Millenials "lazy" because they want more vacations, more perks, better work-life balance, etc. It's because _they_ didn't have it, so they feel like the next generations shouldn't. And _that_ mentality is what's harming the evolution of the society towards higher quality of life.

And all the other complains from the Boomers are due to the egocentric bias, believing _they_ worked hard, but not the others.

The only Boomer I know who truly worked hard, much harder than I ever will - and much harder than the great majority of other Boomers - is my stepdad who was a farmer working 85h/week, 7 days/week, 365 days/year, taking 1 week vacation every decade and worked 45 years, without counting the work he did as a teenager and child.

Millennials aren't sick of Gen X, aren't complaining about Gen Z, but they are sick of that unhealthy Boomer attitude which keep coming back day after day after day.

Obviously, not all Boomers are bad apples, we're just talking about the bad apples here, the ones that Millenials want to throw at the thrash.


----------



## cainvest

MrBlackhill said:


> So if your manager keeps telling you every day that you're bad and lazy, you'll just keep your mouth shut?


I gather you mean your manager says something to you like-> "You are part of [insert generation] so you must be bad and lazy!"?

To which my response would be. "Why do you think being part of a certain generation automatically makes me bad and lazy"? 

I certainly wouldn't come back with an insult to the managers generation.


----------



## m3s

MrBlackhill said:


> I recall you own a motorcycle @cainvest . Some motorcyclists will do lane splitting very safely at low speeds during traffic hours when cars are almost stopped on the road, even though it's not tolerated here. But it is in Europe and some US states. Some car drivers will get so mad when seeing a motorcyclist lane splitting, but their main reason to be mad is "they should wait like the others". They aren't mad because they are breaking the law, they are mad because they are frustrated that _they_ have to wait, but not the motorcyclists. It's jealousy. Interestingly, those car drivers would likely do the same if they had a motorcycle.


Similar to a phenomena when you go to pass someone in Canada or US they get offended and try to speed up

They be driving slow like a clueless boomer and now that I decided to pass their oblivious slow a$$ they suddenly have to speed up as if they just realized they could. Enjoy your Sunday stroll old man but F off

This doesn't happen at all on any other continent. People will actually slow down and help you pass like a logical human


----------



## cainvest

MrBlackhill said:


> Some car drivers will get so mad when seeing a motorcyclist lane splitting, but their main reason to be mad is "they should wait like the others". They aren't mad because they are breaking the law, they are mad because they are frustrated that _they_ have to wait, but not the motorcyclists.


Lane spliting is illegal where I live but where it is legal, sure some get mad. Those that get mad and do something dangerous (road rage) need to be arrested. But this is different than generational stereotyping.




MrBlackhill said:


> Same goes for Boomers who like to keep calling Millenials "lazy" because they want more vacations, more perks, better work-life balance, etc. It's because _they_ didn't have it, so they feel like the next generations shouldn't. And _that_ mentality is what's harming the evolution of the society towards higher quality of life.
> 
> And all the other complains from the Boomers are due to the egocentric bias, believing _they_ worked hard, but not the others.
> 
> The only Boomer I know who truly worked hard, much harder than I ever will - and much harder than the great majority of other Boomers - is my stepdad who was a farmer working 85h/week, 7 days/week, 365 days/year, taking 1 week vacation every decade and worked 45 years, without counting the work he did as a teenager and child.
> 
> Millennials aren't sick of Gen X, aren't complaining about Gen Z, but they are sick of that unhealthy Boomer attitude which keep coming back day after day after day.
> 
> Obviously, not all Boomers are bad apples, we're just talking about the bad apples here, the ones that Millenials want to throw at the thrash.


I understand things are different but instead of insulting the other generation, correct them! If you hurl back insults on their generation you've now put yourself in the bad apple group right?


----------



## MrBlackhill

cainvest said:


> I understand things are different but instead of insulting the other generation, correct them! If you hurl back insults on their generation you've now put yourself in the bad apple group right?


I'm personally not trying to insult any Boomer, I'm just calling them out when they say that Millenials are lazy and I bring facts from statistics about the difference between Boomers and Millenials when they throw things like "just work more", "just spend less", "I've worked hard", etc. I've used studies and statistics, not my personal opinion or interpretation or biases. I haven't seen a Boomer here doing this.


----------



## cainvest

MrBlackhill said:


> I'm personally not trying to insult any Boomer, I'm just calling them out when they say that Millenials are lazy and I bring facts from statistics about the difference between Boomers and Millenials when they throw things like "just work more", "just spend less", "I've worked hard", etc. I've used studies and statistics, not my personal opinion or interpretation or biases. I haven't seen a Boomer doing this.


^^ You just did it there. 

So by saying "I haven't seen a Boomer doing this" means you are saying all boomers (not just some bad apples) are not looking the differences and automatically just saying "just work more", "just spend less", "I've worked hard" based on the generational stereotype?


----------



## m3s

cainvest said:


> Lane spliting is illegal where I live but where it is legal, sure some get mad. Those that get mad and do something dangerous (road rage) need to be arrested. But this is different than generational stereotyping.


No it works quite well

My organization is very traditional and the joke is always "as is tradition" We are now breaking down these traditions that seemed to exist for no other reason than to punish the younger generation the same way they themselves had to endure

It's exactly that - some miserable divorced boomer who doesn't like seeing a free young guy on a motorbike


----------



## MrBlackhill

cainvest said:


> ^^ You just did it there.


I missed a word, I was talking about the Boomers here. None replied with stats and studies. Some just deliberately said "Millenials are lazy" as an opinion and nothing factual. Same for "Millenials should work more / spend less". No study or stats provided in all the threads about generation comparisons.


----------



## cainvest

MrBlackhill said:


> None replied with stats and studies.


Really not one huh ... guess the link I posted (and you replied to) showing some generational stats doesn't count?


----------



## MrBlackhill

cainvest said:


> Really not one huh ... guess the link I posted (and you replied to) showing some generational stats doesn't count?


Didn't know you were a Boomer and happy that you've provided value with stats.

I've also kept saying that not _all_ Boomers are bad and that not _everything_ Boomers did was bad. I'm just talking about the group as a whole and we obviously know that it doesn't mean that every individual acts like the group. A group is a generalisation, a statistical observation.

I've also kept saying that I'm mainly calling out the Boomers who keep saying that Millenials are lazy, should work more, spend less, etc.

I think we've all noticed that this "Boomers vs Millenials" is very particular because of how much it has been mediatised. We don't see stuff (not as much) like "Gen X vs Millenials" or "Gen X vs Gen Z" or "Millenials vs Gen Z" because... starting from Gen X no one saw any value in complaining about the younger generations as much as Boomers felt they had to complain about Millenials in articles and magazines (and then Millenials replied back). Maybe because it's at that point in history that the management paradigm shifted which occurred mainly in the 2010s (but started earlier) as most Millenials has joined the workforce, helped by some visionary and emotionally intelligent Gen Xers and Boomers.


----------



## cainvest

MrBlackhill said:


> I'm just talking about the group as a whole and we obviously know that it doesn't mean that every individual acts like the group. A group is a generalisation, a statistical observation.


For the many I know directly they don't buy into any generational stereotyping but I accept it may be different for others. Once again, promotimg or bringing attention to the bad apples doesn't do any good. Of course there are those types of people (in all generations) that enjoy creating divisions and hatred.


----------



## Saveching

cainvest said:


> For the many I know directly they don't buy into any generational stereotyping but I accept it may be different for others. Once again, promotimg or bringing attention to the bad apples doesn't do any good. Of course there are those types of people (in all generations) that enjoy creating divisions and hatred.


So, don't feed the trolls. gotcha.


----------



## MrBlackhill

Inflation at 8.1%, below expectations of 8.4%. Anyways, that's still pretty high.

I believe this is the peak.


----------



## sags

OAS benefit quarterly increase of 2.8% starting with the July payment. Anyone over the age of 75 will also get an additional 10% increase.





__





Old Age Security payment amounts - Canada.ca


This information allows you to know how much you could receive for your pension based on your income and if you are eligible for other benefits.




www.canada.ca


----------



## nathan79

MrBlackhill said:


> Inflation at 8.1%, below expectations of 8.4%. Anyways, that's still pretty high.
> 
> I believe this is the peak.


I'm surprised they set expectations at 8.4%. I was expecting around 8%, but not 8.4%. Maybe their new strategy is to overpredict so they can say it's not as bad as expected. 

I can see July coming in around the same or slightly higher. Maybe 8.2% to 8.3%. Slightly lower gas prices will moderate any increase, but the effects of persistently high gas prices is still filtering out to the rest of the economy.


----------



## james4beach

I was in Winnipeg airport recently, on a weekday. Huge numbers of travellers waiting in the terminal. Tim Hortons closed around 6:30 pm and by 7 pm, all the food in the terminal closed up. You couldn't get anything to eat, couldn't even get a coffee. Apparently Starbucks closes much earlier, around 3 pm.

A manager said it's due to staffing shortages. They can't find workers.

These airport food service workers are generally paid very little, so these are probably jobs at or near minimum wage. The management calls it "staff shortages" but I wonder if the staff might _magically_ appear if the jobs paid more? Or had better benefits.

I saw a worker leaving and was almost tempted to say to her: demand a 20% raise and threaten to quit.


----------



## MrMatt

james4beach said:


> Yeah that would be ideal, but the boomer-owned media has made a game of blaming and mocking Millennials for everything. And jokes about laziness etc.


Because they do silly things.
Also lots of them don't want to work.



> know that not every boomer is well off, but generally speaking, the generation had very lucky economic timing. In comparison, Gen-X had pretty much the most unlucky timing.


And I'd still rather been a Gen-X than a boomer.



> Seeing a privileged group (statistically speaking that's boomers) mocking and blaming relatively disadvantaged groups isn't very nice.


I think "priviledged" should be retired, it's so overused.
I also think you're wrong.

As a Not a boomer and Not a Millennial, I think I see that the boomers had a LOT of advantages, and so do Millennials, but they are dramatically different. They have different advantages and challenges.



> *Individual* outcomes vary so widely, so maybe it doesn't make sense to look at these generation-based statistics or averages.


Be careful, I think it's against "Progessive Orthodoxy" to treat people like individuals.


----------



## sags

Every hourly job in Canada should be unionized, and have automatic cost of living indexing.

It is past time the hard working people who create the wealth in this country get their fair share of it.


----------



## damian13ster

Nah, indexing to cost of living is a disaster. So are mandatory unions - a cancer killing our economy.
Just look at potential strike of westjet baggage handlers - they are doing disastrous work so it is a great time to go on a strike and demand a raise..... 

What you are asking for is a runaway inflation, with productivity dropping and cost spiral leading to hyperinflation. Been there done that - it is an absolute disaster


----------



## m3s

james4beach said:


> A manager said it's due to staffing shortages. They can't find workers.
> 
> These airport food service workers are generally paid very little, so these are probably jobs at or near minimum wage. The management calls it "staff shortages" but I wonder if the staff might _magically_ appear if the jobs paid more? Or had better benefits.


All temp foreign service workers where I live

All the customer facing jobs are attractive white people and all the "behind the scenes" jobs are visible foreigners. They don't have the same protections for holidays, overtime etc and they give half their money to Western Union fees trying to get it home

I remember it was the same thing when visiting oil boom towns in Alberta - McDonalds was run entirely by a large extended family from a foreign country


----------



## m3s

damian13ster said:


> Nah, indexing to cost of living is a disaster. So are mandatory unions - a cancer killing our economy.
> Just look at potential strike of westjet baggage handlers - they are doing disastrous work so it is a great time to go on a strike and demand a raise.....
> 
> What you are asking for is a runaway inflation, with productivity dropping and cost spiral leading to hyperinflation. Been there done that - it is an absolute disaster


Plus all the wealthy people will just leave 😂 

sags doesn't understand how economies work


----------



## MrBlackhill

After shrinkflation, I've just heard of skimpflation, the reduction in the quality of goods and services for the same cost to the customer.


----------



## Covariance

sags said:


> Every hourly job in Canada should be unionized, and have automatic cost of living indexing.
> 
> It is past time the hard working people who create the wealth in this country get their fair share of it.


Cuba and the former USSR tried this experiment.


----------



## Covariance

MrBlackhill said:


> After shrinkflation, I've just heard of skimpflation, the reduction in the quality of goods and services for the same cost to the customer.


Are we talking about Rogers now?


----------



## sags

m3s said:


> Plus all the wealthy people will just leave 😂
> 
> sags doesn't understand how economies work


You think wealthy people are “the economy” ?

Whst economic sector would survive solely on the spending of a few 
wealthy people ?

Maybe the luxury goods sector in retail.


----------



## MrMatt

m3s said:


> Plus all the wealthy people will just leave 😂
> 
> sags doesn't understand how economies work


Many of them don't.

They think that Elon actually has billions because of the market cap of Tesla.
They've got this Scrooge McDuck idea of someone swimming in a vault full of money.

Never mind that Elon is only worth so much because people think Tesla is worth a lot. If they decide that it isn't, his wealth will disappear faster than it arrived.


----------



## sags

Covariance said:


> Cuba and the former USSR tried this experiment.


Do you realize how many people receive automatic cost of living increases already _?

Anyone collecting government benefits, some _workers in the public sector, and many unionized workers.

OAS quarterly benefit increased today.

I doubt the economy will collapse from it.
The money will be spent flowing through the economy creating jobs and revenues for the government.

An economy will collapse when too few people have most of the money.

That is what happens in communist countries….example…Russian obliarchs.


----------



## m3s

MrMatt said:


> Many of them don't.
> 
> They think that Elon actually has billions because of the market cap of Tesla.
> They've got this Scrooge McDuck idea of someone swimming in a vault full of money.
> 
> Never mind that Elon is only worth so much because people think Tesla is worth a lot. If they decide that it isn't, his wealth will disappear faster than it arrived.


Lol that you Elon is only worth what TSLA shares are worth

He has effectively disrupted spacelift for the entire world and has a massive impact on the US space force launching new capability. He delivered Crew Dragon much faster, better and cheaper than Boeing Starliner. Starship, raptor engine and Starlink are all massive leaps forward in capability. Starlink marine will have huge impact on the navy and marine industry. This is not even mentioning neuralink and other projects

TSLA is nothing compared to SpaceX which is kept private for a reason.


----------



## MrMatt

m3s said:


> Lol that you Elon is only worth what TSLA shares are worth


I don't think that.

I just grabbed him as a convenient example, the reality is that for all his "Billions" he actually likely has no cash, or even negative cash.
Most of his money is in equity, not cash.


----------



## sags

It doesn’t matter that some people are really wealthy.

It does matter a lot that in a consumer spending economy, consumers have money to spend.

Is there an economist who would disagree?

Recessions are feared for good reasons.


----------



## james4beach

It seems that Doug Ford did something right, and capped Ontario rent increase at below the inflation rate. Ontario rents can be increased a maximum of 2.5% next year.

Given how large Ontario is, this move will actually help Canada's inflation readings next year by suppressing rental increase.

However, this excludes buildings occupied for the first time after 2018. Unlimited rent increases are allowed in those.



https://www.cbc.ca/news/canada/toronto/ontario-2023-rent-increase-guideline-1.6505362


----------



## Spudd

james4beach said:


> It seems that Doug Ford did something right, and capped Ontario rent increase at below the inflation rate. Ontario rents can be increased a maximum of 2.5% next year.
> 
> Given how large Ontario is, this move will actually help Canada's inflation readings next year by suppressing rental increase.
> 
> However, this excludes buildings occupied for the first time after 2018. Unlimited rent increases are allowed in those.
> 
> 
> 
> https://www.cbc.ca/news/canada/toronto/ontario-2023-rent-increase-guideline-1.6505362


He didn't do it. The previous Liberal government put in a rule that rent could only increase by inflation, or 2.5%, whichever was higher. Then Doug Ford removed rent control for newer buildings but left the old rules for older buildings.


----------



## james4beach

Spudd said:


> He didn't do it. The previous Liberal government put in a rule that rent could only increase by inflation, or 2.5%, whichever was higher. Then Doug Ford removed rent control for newer buildings but left the old rules for older buildings.


Oh that's interesting. So the 2.5% cap was put in by the Liberals.

That almost fooled me. So Ford is trying to score political points off Liberal policy?


----------



## MrMatt

james4beach said:


> Oh that's interesting. So the 2.5% cap was put in by the Liberals.
> 
> That almost fooled me. So Ford is trying to score political points off Liberal policy?


Well points off a bad policy he left in place while fixing other aspects of it.

He should get credit/blame either way. Of course people don't realize that bad policy is the reason for our housing crisis.


----------



## Covariance

sags said:


> Do you realize how many people receive automatic cost of living increases already _?
> 
> Anyone collecting government benefits, some _workers in the public sector, and many unionized workers.
> 
> OAS quarterly benefit increased today.
> 
> I doubt the economy will collapse from it.
> The money will be spent flowing through the economy creating jobs and revenues for the government.
> 
> An economy will collapse when too few people have most of the money.
> 
> That is what happens in communist countries….example…Russian obliarchs.


Many, most. a lot of people doesn't equal all workers. When all workers compensation is dictated by government, outside their control, you have communism.


----------



## sags

james4beach said:


> Oh that's interesting. So the 2.5% cap was put in by the Liberals.
> 
> That almost fooled me. So Ford is trying to score political points off Liberal policy?


Yea…..Ford will be forced to flip flop again on rent controls on new builds.

He is good as Flipper the dolphin at it.


----------



## AltaRed

Now that the US Fed Reserve has done another 75 bp rate increase, the first time in history for back-to-back 75bp rate increases, it will be interesting whether this will tame the monthly YOY inflation numbers in the USA before the end of 2022. It does give freedom for Macklem to continue rate increases as well. 

Hello...housing bust. It is about time mortgage holders, at least those speculative investors who have been driving up prices, started paying real money for their mortgages.


----------



## m3s

Spudd said:


> He didn't do it. The previous Liberal government put in a rule that rent could only increase by inflation, or 2.5%, whichever was higher. Then Doug Ford removed rent control for newer buildings but left the old rules for older buildings.


When looking for rentals in Ontario I found it interesting that almost everything costs the same

So I rented a new construction. Costs the same as an old place. Nothing seemed to really change the price (besides something like a makeshift basement)

Also interesting most of the new builds are foreign investors. Lots of mandarin on the RE ads


----------



## james4beach

AltaRed said:


> Hello...housing bust.


I still think the central banks will chicken out soon. I am doubtful they will raise rates to where they have to be (perhaps 4% to 5%) to tame inflation.

But I *hope* they continue with the rate hikes.


----------



## AltaRed

I don't think BoC needs to raise short term rates to as high as 4-5% to cause a circa 20% haircut in housing prices in hot areas. Variable rates are already 4% and fixed term over 5%, requiring stress test qualification another 2 percentage points. Most housing buyers in hot areas in recent times have so overbought due to FOMO, they are near naked. Never mind the HELOCs that are being withdrawn/reduced by financial institutions. FWIW, I hear that housing sales have come to a screeching halt in the Okanagan. The capitulation in prices will come this Fall when 'have to' sellers will have to accept reality and lower prices.

That alone will start to reduce YOY inflation numbers. So will reduced consumer demand for goods and services when debt servicing costs start to eat into disposable income.


----------



## sags

Home prices have already dropped 20% in many places, and the market is dead. I expect at least a 40% decline before they go sideways for a couple of years.

Even though prices are lower , the cost of borrowing is significantly higher, so most potential home buyers are still locked out.

They are also contending with higher fuel and food prices, so home sales will likely continue to decline.

It looks like our housing crash is finally here.


----------



## sags

Buyers who made offers on homes, are seeking legal advice on how to default on the sale, as banks require significantly more down payments to make up the lost equity. They are discovering that "pre-approvals" aren't valid anymore and they have to re-apply for the mortgage.

When people renew their mortgages, they may also be facing demands from the lender to pay down the principle to match the home value.

People who accepted an offer to sell their home and went ahead with an offer on another one, are stuck with a big problem if the buyers of their home default.

The only "safe" way to sell and buy another home is to wait until the deal is completed, rent for awhile and then buy a home.

Stories like this are popping up all over the local news channels, and they are always reluctant and late to report bad news on home prices.

People don't want to hear that their home prices are declining.


----------



## MrMatt

james4beach said:


> I still think the central banks will chicken out soon. I am doubtful they will raise rates to where they have to be (perhaps 4% to 5%) to tame inflation.
> 
> But I *hope* they continue with the rate hikes.


I think the only way to "tame inflation" with interest rates is to hike them to the point that we end up damaging the economy.

A month ago I knew house building workers who got put on hold as the developers scaled back their building plans. I don't imagine I just happen to know the only handful of guys losing their jobs due to rate hikes. 

I'm not saying it's needed, I AM saying that it's going to cause a lot of damage, I'm more concerned that it will be too much too late, and we'll end up with an overshoot.


----------



## sags

A lot of people are oblivious to the storm that is ramping up just over the horizon.

Inflation is bad........a deep recession is much worse.

With inflation......you can cut back, buy less, drive less, prioritize your spending.

With recession.........you may not have a job and money to buy anything.

I don't know that raising interest rates is such a great solution.

It may the cure that is worse than the disease.

Maybe it would have been a better solution to provide a temporary "inflation benefit" to people until the covid inspired supply chain disruptions have passed.


----------



## damian13ster

The cure is not worse than the disease.
The cure appears terrible only because it was realized it is needed as patient was on death bed.
The time to raise interest rates was much, much earlier. The money printing never should have happened.
Now we are simply all paying for that stupidity.
The choice isn't between high inflation and recession. Not anymore
The choice is between hyperinflation and recession.

It is also really hard to describe what's going on with housing as 'crash'. We didn't even give back last 12 months of gains yet


----------



## MrMatt

damian13ster said:


> The cure is not worse than the disease.
> The cure appears terrible only because it was realized it is needed as patient was on death bed.
> The time to raise interest rates was much, much earlier. The money printing never should have happened.
> Now we are simply all paying for that stupidity.
> The choice isn't between high inflation and recession. Not anymore
> The choice is between hyperinflation and recession.
> 
> It is also really hard to describe what's going on with housing as 'crash'. We didn't even give back last 12 months of gains yet


The disease isn't just interest rates.

Interest rates fighting inflation is like old school chemo fighting cancer.

I'm not concerned about recession, I'm concerned about more significant damage to the economy, you have to understand a MASSIVE portion of our economy is government jobs, which are far less sensitive to economic conditions. The private economy is going to take a beating here.


----------



## AltaRed

I beg to differ at least a bit. I think we will have at least 2 negative quarters which is the definition of a recession but I don't think the size of the 'negative' will be that severe. The housing component will be the key driver of negative growth but I don't see much to worry about in the industrial, utilities, or telecom sectors...as key examples.


----------



## m3s

sags said:


> A lot of people are oblivious to the storm that is ramping up just over the horizon.
> 
> Inflation is bad........a deep recession is much worse.
> 
> With inflation......you can cut back, buy less, drive less, prioritize your spending.
> 
> With recession.........you may not have a job and money to buy anything.
> 
> I don't know that raising interest rates is such a great solution.
> 
> It may the cure that is worse than the disease.
> 
> Maybe it would have been a better solution to provide a temporary "inflation benefit" to people until the covid inspired supply chain disruptions have passed.


Spoken like a true clueless boomer. You said inflation was temporary. Now you say it's better than recession

Inflation is absolutely worse than recession. Central banks are forced to raise rates to kill demand to stop inflation. Otherwise fiat money becomes toilet paper

It is you who is completely oblivious on your inflation adjusted pension. Now you say a storm is coming?


----------



## sags

Subscribe to read | Financial Times


News, analysis and comment from the Financial Times, the worldʼs leading global business publication




www.ft.com


----------



## AltaRed

I don't know what you are interpreting. Last year I did feel inflation at that time was mostly transitory and it would be fixed when supply chains were repaired, or caught up. I no longer share that view especially given the disruption also caused by Russia's invasion of Ukraine earlier this year.

My posts immediately above are in support of interest rates to tame inflation at the risk of a recession but I don't think BoC interest rates need to go as high as 4-5% per James' view to actually tame inflation back down to 2% in a year (or two). Neither does the 5 year and 10 year bond market at this time. 

You seem to be awfully hostile to generations above you for no particular reason that I can see. It most likely won't serve you well. FWIW, I do not have an indexed DB pension so I don't know where you got that information either.


----------



## MrBlackhill

m3s said:


> Inflation is absolutely worse than recession.


It is actually a tricky question because we'd have to agree with the inflation rate vs unemployment rate.

Inflation can be better than recession, and recession can be better than inflation.

For instance, what's worse, 10% inflation or 10% unemployment rate.

If I'm cash-rich I'll be worried by inflation. If I'm poor I'll prefer squeezing my finances during inflation than having no job at all.

I may be missing something but I feel like it's a matter of interpretation and context.


----------



## m3s

MrBlackhill said:


> I may be missing something but I feel like it's a matter of interpretation and context.


Many smart people predicted central banks would be forced to react to inflation by raising rates long before they did.

sags watches cnbc all day and drinks the mainstream koolaid and is always 2 steps behind instead of 2 steps ahead. Sad truth is mainstream is fed a misleading narrative and I think many come to accept this now (at least many people who grew up with access to alternative information sources)

The next signal to watch for is the central bank policy pivot. Modern markets have never been able to handle rising rates.


----------



## m3s

AltaRed said:


> I don't know what you are interpreting. Last year I did feel inflation at that time was mostly transitory and it would be fixed when supply chains were repaired, or caught up. I no longer share that view especially given the disruption also caused by Russia's invasion of Ukraine earlier this year.
> 
> My posts immediately above are in support of interest rates to tame inflation at the risk of a recession but I don't think BoC interest rates need to go as high as 4-5% per James' view to actually tame inflation back down to 2% in a year (or two). Neither does the 5 year and 10 year bond market at this time.
> 
> You seem to be awfully hostile to generations above you for no particular reason that I can see. It most likely won't serve you well. FWIW, I do not have an indexed DB pension so I don't know where you got that information either.


Sorry I was quoting sags. Since you have him blocked you seem to think I was responding to you

If you thought inflation was mostly transitory I think you should look for new sources of information. Most of the best analysts and thinkers nowadays are providing content direct by alternate means (newsletters, podcasts, twitter etc) Legacy media overhead simply can't compete with this direct model and is left with clickbait to sell bs emotional narratives. They come to very different consensus than legacy media, make a lot more sense, and far more accurate

If you watch cnbc all day you will see where sags gets his ideas. None of them are ever accurate at all


----------



## sags

The federal government posts a $5.2 billion surplus for first 2 months of the 2022 - 2023 budget year.


----------



## AltaRed

m3s said:


> Sorry I was quoting sags. Since you have him blocked you seem to think I was responding to you
> 
> If you thought inflation was mostly transitory I think you should look for new sources of information. Most of the best analysts and thinkers nowadays are providing content direct by alternate means (newsletters, podcasts, twitter etc) Legacy media overhead simply can't compete with this direct model and is left with clickbait to sell bs emotional narratives. They come to very different consensus than legacy media, make a lot more sense, and far more accurate
> 
> If you watch cnbc all day you will see where sags gets his ideas. None of them are ever accurate at all


Sorry, I had no idea you were responding to Sags. I don't know why members respond to Sags or why he posts here. I think his time would be better spent with Jerry Dias and his colleagues.

I have seen enough stuff from twitter, youtube, podcasts et al to know that most of this is click bait opinion from armchair quarterbacks with minimal to no credentials. The signal to noise ratio appears to be really low. Nor is anything from the cable channels worth watching. I couldn't tell you the last time I found CNBC online nor do I watch any of this stuff on TV. I do read business materials from The Economist, and sometimes certain writers from the G&M and Financial Post every few days or so.


----------



## sags

Quite the revealing cowardly chicken **** posts right there.......coming from the anti-Trudeau, anti-progressive everything, alt right conservatives.


----------



## m3s

AltaRed said:


> Sorry, I had no idea you were responding to Sags. I don't know why members respond to Sags or why he posts here. I think his time would be better spent with Jerry Dias and his colleagues.
> 
> I have seen enough stuff from twitter, youtube, podcasts et al to know that most of this is click bait opinion from armchair quarterbacks with minimal to no credentials. The signal to noise ratio appears to be really low. Nor is anything from the cable channels worth watching. I couldn't tell you the last time I found CNBC online nor do I watch any of this stuff on TV. I do read business materials from The Economist, and sometimes certain writers from the G&M and Financial Post every few days or so.


Do you pay anything for economist? I know how to get by the paywall but the extra few clicks is usually annoying enough

It's interesting that sags is starting to think a the storm is coming now but didn't see it coming last year. CNBC is basically leading retail to financial slaughter. Jim Cramer was yelling buy netflix this year when all my podcasts types were well aware since last year the fed could stop the music any moment. Markets can actually move up when news is not as bad as expected. Reverse sell the news

There's a clip somewhere that shows how all the mainstream media are just following a controlled narrative


----------



## AltaRed

I am a subscriber to The Economist. I don't have a problem paying for subscriptions that provide informative value to me in a number of ways. That includes things like Spotify for all my devices including vehicles, etc, etc. We all have our preferred list of things meaningful to ourselves.


----------



## londoncalling

The Economist is a great read as it focuses more on facts and potential outcomes than making predictions to suit a narrative. I read the Globe and Mail occasionally but find it to be more for entertainment than value. Same with the Financial post and Wall Street Journal. I've already posted about the value of Canadian Money Saver in the BNN guest thread. IMO it probably gives the best information for those who DIY. It uses plain clear language but dives a bit deeper than fire your advisor, go couch potato and only invest in vanilla ETFs. As Alta mentioned we all have our preferred lists which is why all these media outlets exist. I do follow a few podcasts but have to compete with the rest of my house for screen time. I guess that is why I still gravitate to text over video.


----------



## AltaRed

I am almost exclusively text driven. I find videos wanting at the best of times.Too much garbage to filter through in the process. With reading, I can be selective in any article.


----------



## m3s

londoncalling said:


> I do follow a few podcasts but have to compete with the rest of my house for screen time. I guess that is why I still gravitate to text over video.


I didn't even know podcasts were video form for a long time

They were originally mp3 audio that you subscribed to and loaded on your ipod to listen to while out and about. I still use them this way except on my watch/phone. They download and clear automatically and I set them to not use mobile data as I rarely need mobile data

They're too dry to watch but perfect for listening while doing something else


----------



## londoncalling

source: Resolve Asset Management

This graphic shows what assets perform well in 4 different environments. One can see that the real estate and equity returns we have saw in the past are because of lowrates and low inflation. Also, as most understand cash is going to lose even more in an inflationary environment. Fears of a recession have taken some of the momentum out of commodities while rate hikes have caused a correction in real estate. The part that I find interesting about the graphic is that there is little difference between low economic growth inflationary periods and inflationary booms. I would much prefer an inflationary boom even though I have more cash on hand to act as a buffer for fear of recession. If we are heading into a period of high inflation and accelerating growth as some are predicting I should have less cash. I guess I would prefer to the added security to pay for "emergencies" that are going up in price. I don't believe we have seen the bottom but would be happy if that was it. Come Q4 we should have a better idea and I will likely be looking at putting some cash into REITs and NA equities with international operations.


----------



## m3s

londoncalling said:


> I don't believe we have seen the bottom but would be happy if that was it. Come Q4 we should have a better idea and I will likely be looking at putting some cash into REITs and NA equities with international operations.


Depends what the grayhairs at the Fed decide

Fed prints fiat everything goes up. Fed tightens everything goes down. Fed has a lot of tightening left to do even after rate hikes. Just watch for the grayhairs to pivot if the political situation gets too bad from unemployment or economic stress. In China they have tanks on the streets now in front of banks due to riots over the economy.

Don't fight the garyhairs. I think we could see a "bullwhip" effect if they have to pivot


----------



## m3s

saggy man can you explain again how this is good for GICs please


__ https://twitter.com/i/web/status/1554969109531693056


----------



## sags

The in-laws had a 5,000 acre wheat and calf farm in Saskatchewan.

They didn’t buy 2 bales of hay from the local market and carry them home in the trunk of a Nissan.

They grew and cut their own feedstock, and stored it. They cut hay from the sides of roads.

Posting this person as a typical “rancher” to prove people wont be able to afford food only proves you are easily manipulated.


----------



## sags

We stockpile all the sales and our food inflation is not enough to worry about.

Even if steak cost too much….we would eat beans….we are very adaptable to whatever is affordable.

That is how both of us grew up.


----------



## m3s

sags said:


> The in-laws had a 5,000 acre wheat and calf farm in Saskatchewan.
> 
> They didn’t buy 2 bales of hay from the local market and carry them home in the trunk of a Nissan.
> 
> They grew and cut their own feedstock, and stored it. They cut hay from the sides of roads.
> 
> Posting this person as a typical “rancher” to prove people wont be able to afford food only proves you are easily manipulated.


So basically you have no awareness of what happens to livestock when feed price increase. The impacts can last for years

This example far for saggy brains from Toronto but was still too complicated I guess. The reason the price of feed and hay is up saggy brains is because the cost to produce it is up. I wouldn't expect you to understand when you though inflation was good for GICs

You have no idea how typical farmers live you chickened out from moving west


----------



## sags

We are happy to collect higher interest on savings and cola increases, because they exceed our inflation costs.

That is a concept you struggle with because you incorrectly believe all of our income is reduced by the rate of inflation.

That isn’t how it works, unless you ARE spending all your income on necessities and inflation affects all your income.

Ask forum members how much inflation is actually costing them relative to their overall income.


----------



## m3s

sags said:


> We are happy to collect higher interest on savings and cola increases, because they exceed our inflation costs.


Cola that comes from the government and taxpayer eh saggy man

This is why governments should not bail out failed companies such as GM. It creates delusional boomers

It is YOU who thinks that money grows on trees


----------



## sags

Input costs for growing feedstock is nowhere near what that woman quoted.

If it was, pasture land would be worth a lot more than it is.

A woman driving 2 bales of hay in the trunk of her car…..isn’t a “rancher”…..lol


----------



## sags

CPP has nothing to do with the government, nor does company pensions.


----------



## m3s

sags said:


> CPP has nothing to do with the government, nor does company pensions.


What would happen to GM company pensions if the government didn't bail them out

CPP is also organized by the government even if it is funded separated. It was established by the government and can be changed by the government

saggy brains thinks cola and pensions are magic money trees


----------



## sags

They are the returns on invested contributions.

You should stop hanging around crypto and Reddit WSB forums.

Try CNBC to learn what the CEOs, best fund managers, top analysts, and Government officials are saying about the real world.


----------



## m3s

sags said:


> Try CNBC to learn what the CEOs, best fund managers, top analysts, and Government officials are saying about the real world.


Just imagine the kind of person who watches Jim Cramer

CNBC's audience are not real traders they are saggy boomers


----------



## damian13ster

Yet government gives itself credit for CPP when 'calculating' their net debt, which they then compare to rest of the worlds' gross debt, making uneducated people think we aren't one of most indebted countries in entire world.

Just to make sure food prices get even higher, they will artificially limit fertilizer use. Starvation is official platform I guess


----------



## sags

FUD


----------



## damian13ster

sags said:


> FUD


Yeah, because farmers like to spend money on fertilizer as a hobby - not to increase food production......
Jesus, you are truly an idiot









‘It’s shocking’: Sask. farmers react to federal government’s proposed cutdown on fertilizer emissions - Saskatoon | Globalnews.ca


Local farmers have voiced their concerns with the federal government's plan to reduce overall emissions from fertilizer by 30 per cent by the year 2030.




globalnews.ca












Federally ordered fertilizer cut threatens food security, experts warn


Paul McLauchlin, president of the Rural Municipalities of Alberta, said farms will fold as a result of the ban.




www.westerninvestor.com












Canada wants to cut fertilizer emissions, but farmers say it could result in less food


Growers fear move will threaten food supplies at a time when the world is scrambling to cover looming shortages. Read on




financialpost.com












Less fertilizer, less food? Canadian provinces protest Trudeau’s fertilizer reduction target


25 Jul 2022 --- In a complex year for the agri sector, Canada plans to reduce 30% of its fertilizer use by 2030 in order to meet climate targets. However, Saskatchewan and Alberta Ministers of Agriculture have expressed their “profound disappointment” in the Canadian federal government’s...




www.foodingredientsfirst.com






https://ca.news.yahoo.com/peabody-agricultural-community-outraged-over-134008267.html


----------



## m3s

When cost to produce feed increase farmers thin their herds

This is simple for most to see but some impacts take time as you can't just bring herds back up to size overnight

Animals take time to reproduce and mature


----------



## sags

A 30% reduction in fertilizer use by 2030 is a stretch goal, that will encourage research into better fertilizers and farming practices that are already underway.

_“We need to continue to drive innovation. We are going to be their work to work with you. This is not an us (government) versus you (farmers), we have a policy in place,* this is where we are trying to go in the future*,” said Blais. “*The work done to this point by farmers is great, but we can do more.”* _


----------



## sags

There was widespread opposition to increasing fuel mileage for vehicles, but the stretch goals and mandates worked.

There was widespread opposition to seat belts, with people claiming they would be trapped in vehicles and burn to death. The mandate worked.

There was opposition to life saving vaccines. The restrictions worked to force the majority to get a vaccine shot.

There is always opposition to progress by some people. It is well known in business that many people fear change, and sometimes it must be forced.


----------



## m3s

sags said:


> There is always opposition to progress by some people. It is well known in business that many people fear change, and sometimes it must be forced.


If not for GM we would have electric cars already

Thanks GM


----------



## MrMatt

m3s said:


> If not for GM we would have electric cars already
> 
> Thanks GM


Uhh we already have electric cars.

Also GM was mass producing electric cars a decade before Tesla... so it isn't like they were holding back the industry.


----------



## MrMatt

damian13ster said:


> Yeah, because farmers like to spend money on fertilizer as a hobby - not to increase food production......


It's not unheard of for autocratic regimes to take control of the food supply as a political tool.
High inflation, restrict food production... great time for government to "step in" and "help".


----------



## m3s

MrMatt said:


> Uhh we already have electric cars.
> 
> Also GM was mass producing electric cars a decade before Tesla... so it isn't like they were holding back the industry.


Who Killed the Electric Car? Spoiler it was GM and the oil industry. Same reason US is designed so you have to drive everywhere etc



https://en.wikipedia.org/wiki/Who_Killed_the_Electric_Car%3F


----------



## MrMatt

m3s said:


> Who Killed the Electric Car? Spoiler it was GM and the oil industry. Same reason US is designed so you have to drive everywhere etc
> 
> 
> 
> https://en.wikipedia.org/wiki/Who_Killed_the_Electric_Car%3F


Yes a propaganda film will push an agenda.
The reality is that 30 years ago battery tech simply wasn't there yet.

Even with that they did make hybrids while the battery problem was worked on.

I know, you love Tesla and all that is shy and new, but as discussed before it isn't as simple as that.


----------



## damian13ster

sags said:


> A 30% reduction in fertilizer use by 2030 is a stretch goal, that will encourage research into better fertilizers and farming practices that are already underway.
> 
> _“We need to continue to drive innovation. We are going to be their work to work with you. This is not an us (government) versus you (farmers), we have a policy in place,* this is where we are trying to go in the future*,” said Blais. “*The work done to this point by farmers is great, but we can do more.”* _


The farmers already do that, because as I stated:

They don't spend money on fertilizer as a hobby - they do it to increase production.

So no, this isn't progress. This is decreasing food production, increasing prices, increasing starvation. Artificial limits on fertilizer use leads to nothing but what I just mentioned here.
They are literally working to destroy food supply


----------



## like_to_retire

damian13ster said:


> So no, this isn't progress. This is decreasing food production, increasing prices, increasing starvation. Artificial limits on fertilizer use leads to nothing but what I just mentioned here.
> They are literally working to destroy food supply


Yeah, I watched a farmer being interviewed who was exasperated that the government didn't understand that farmers absolutely fine tune their fertilizer to produce the maximum crop, and that not a single percent point of extra is used since that would reduce profits and yield. He said he couldn't reduce more than a single percentage point of fertilizer before his crop yield would be reduced. This insanity of reducing fertilizer by 30% would really reduce food production in the country.

ltr


----------



## m3s

MrMatt said:


> I know, you love Tesla and all that is shy and new, but as discussed before it isn't as simple as that.





sags said:


> There was widespread opposition to increasing fuel mileage for vehicles, but the stretch goals and mandates worked.
> 
> There was widespread opposition to seat belts, with people claiming they would be trapped in vehicles and burn to death. The mandate worked.
> 
> There was opposition to life saving vaccines. The restrictions worked to force the majority to get a vaccine shot.
> 
> There is always opposition to progress by some people. It is well known in business that many people fear change, and sometimes it must be forced.


There is widespread opposition to electric cars with people claiming they will burn to death and all kinds of things

As people age they oppose new things because it's hard to teach old dogs new tricks

Just like how boomers oppose crypto and electric cars today


----------



## m3s

like_to_retire said:


> Yeah, I watched a farmer being interviewed who was exasperated that the government didn't understand that farmers absolutely fine tune their fertilizer to produce the maximum crop, and that not a single percent point of extra is used since that would reduce profits and yield. He said he couldn't reduce more than a single percentage point of fertilizer before his crop yield would be reduced. This insanity of reducing fertilizer by 30% would really reduce food production in the country.
> 
> ltr


They even adapt the amount of fertilizer where it is required and less where it is not by mapping out previous years by gps

Same thing for animals. The feed can be fine tuned to the animal in many ways using tags and data

No need to listen to boomers from Toronto and Ottawa about farming


----------



## andrewf

cainvest said:


> Lane spliting is illegal where I live but where it is legal, sure some get mad. Those that get mad and do something dangerous (road rage) need to be arrested. But this is different than generational stereotyping.


My 'favourite' are all the idiots that like to punish cyclists for riding on the road, or taking the lane. I regularly get 'punish passes' where drivers illegally pass you within a couple feet in the same lane. Same for all the drivers who get butt hurt about cyclists rolling stop signs and riding the wrong way on low volume one way residential streets. Those rules are nonsensical to apply to bikes. North America waaaay overuses stop signs and traffic lights. We should be using more roundabouts and yields


----------



## m3s

andrewf said:


> North America waaaay overuses stop signs and traffic lights. We should be using more roundabouts and yields


Yea Europe was pretty awesome for bikes. Lots of dedicated bike roads, traffic designed in an efficient way and kids could even play in the streets. It boggles my mind everything a bike or something is in the oncoming lane and oncoming traffic maintains speed as if I should yield or some kind of game of chicken. Europeans were far better drivers in many ways

GM and the oil industry lobbied to design NA so that we have to drive on massive roads to massive parking lots so everyone needs 2 cars and public transport sucks. I could easily get by most of the time in Europe without a car unless I needed to carry luggage or passengers. Far more peaceful and enjoyable too


----------



## MrBlackhill

andrewf said:


> riding the wrong way on low volume one way residential streets. Those rules are nonsensical to apply to bikes.


I've already got a ticket and lost points on my driver's license because I was in the wrong way of a one-way street with my bike.

What I don't get is that you need a driver's license to drive a car and you'll lose points if you don't follow the rules, that makes sense, but you don't need a driver's license to drive a bike and yet you'll also lose points on your driver's license for cars if you don't follow the rules... but other cyclists without a driver's license only get to pay the ticket, as they cannot lose points.


----------



## m3s

MrBlackhill said:


> I've already got a ticket and lost points on my driver's license because I was in the wrong way of a one-way street with my bike.
> 
> What I don't get is that you need a driver's license to drive a car and you'll lose points if you don't follow the rules, that makes sense, but you don't need a driver's license to drive a bike and yet you'll also lose points on your driver's license for cars if you don't follow the rules... but other cyclists without a driver's license only get to pay the ticket, as they cannot lose points.


Canada has become a nanny state

The boomers got old and soft and control the votes and hold most influential positions

Lots of other good countries out there that aren't cold for 6 months


----------



## andrewf

MrMatt said:


> Uhh we already have electric cars.
> 
> Also GM was mass producing electric cars a decade before Tesla... so it isn't like they were holding back the industry.


It'd be nice if they were mass producing them now. They made less than 500 vehicles in Q1.









GM delivered only 457 electric vehicles last quarter, but it assures us more are coming


GM released its Q1 2022 delivery results today and revealed that it only delivered 457 electric vehicles during the last...




electrek.co


----------



## MrBlackhill

m3s said:


> Lots of other good countries out there that aren't cold for 6


I don't mind winter though, but for sure I'd prefer places where I can both surf and ski the same weekend.


----------



## andrewf

MrBlackhill said:


> I've already got a ticket and lost points on my driver's license because I was in the wrong way of a one-way street with my bike.
> 
> What I don't get is that you need a driver's license to drive a car and you'll lose points if you don't follow the rules, that makes sense, but you don't need a driver's license to drive a bike and yet you'll also lose points on your driver's license for cars if you don't follow the rules... but other cyclists without a driver's license only get to pay the ticket, as they cannot lose points.


I had no idea you could lose points for bike infractions. That's insane.


----------



## m3s

andrewf said:


> I had no idea you could lose points for bike infractions. That's insane.


Sounds Quebecois. You can lose points for english signs


----------



## MrBlackhill

andrewf said:


> I had no idea you could lose points for bike infractions. That's insane.


Don't know if that's only in Quebec, but yup.

Oh, I've just read that they've changed it in 2018 so you can't lose points anymore, thanks god that was so stupid.


----------



## m3s

MrBlackhill said:


> Oh, I've just read that they've changed it in 2018 so you can't lose points anymore, thanks god that was so stupid.


They hadn't separated church and state yet so yes thank god

Thank god for language police as well. Ins'allah as god wills


----------



## MrBlackhill

m3s said:


> They hadn't separated church and state yet so yes thank god
> 
> Thank god for language police as well. Ins'allah as god wills


Haha I would actually never use the word "God" in French, I guess I was simply lacking of a better expression in English.


----------



## MrBlackhill

Deleted


----------



## MrMatt

MrBlackhill said:


> I've already got a ticket and lost points on my driver's license because I was in the wrong way of a one-way street with my bike.
> 
> What I don't get is that you need a driver's license to drive a car and you'll lose points if you don't follow the rules, that makes sense, but you don't need a driver's license to drive a bike and yet you'll also lose points on your driver's license for cars if you don't follow the rules... but other cyclists without a driver's license only get to pay the ticket, as they cannot lose points.





andrewf said:


> I had no idea you could lose points for bike infractions. That's insane.


If you can't operate a vehicle in accordance with the rules, it will show up on your drivers license. That's why I don't drink in my canoe.








One Brew in a Canoe - Boating and Drinking


Take note! Drinking and boating in Ontario triggers the same penalties as does drinking and driving charges.




fightthecharges.com




This is "easy" as the traffic violation is provincial and the drivers license is also provincial.
But your pilots license or boating license is federal, so the province can't touch them.

If you're driving the wrong way down a one way street OF COURSE you should get a ticket.
FYI, in Ontario bicycles are vehicles as far as traffic laws, I'm not sure about QC. 
Lots of car drivers don't think bikes belong on the road and treat them horribly, but many bike riders don't think the law applies to them either. I find e-bikes tend to be even worse.


----------



## m3s

MrMatt said:


> I find e-bikes tend to be even worse.


All the kids in my neighbourhood zip around on e-bikes now

They can move as fast if not faster than traffic on the winding community streets

But they're silent and much harder to spot


----------



## MrMatt

m3s said:


> All the kids in my neighbourhood zip around on e-bikes now
> 
> They can move as fast if not faster than traffic on the winding community streets
> 
> But they're silent and much harder to spot


Yes, and with the re-introduction of photo-radar, they're going FASTER than the cars, while often ignoring many of the rules of the road. 
I think that they really should be licensing many of these vehicles, you need a license for a moped, why not for a similarly powerful e-bike.

In reality several of them are simply low speed motorcycles and should be treated as such.

I think the problem comes on the dividing line between a motorcycle and a motorized wheelchair.


----------



## m3s

MrMatt said:


> Yes, and with the re-introduction of photo-radar, they're going FASTER than the cars, while often ignoring many of the rules of the road.
> I think that they really should be licensing many of these vehicles, you need a license for a moped, why not for a similarly powerful e-bike.
> 
> In reality several of them are simply low speed motorcycles and should be treated as such.
> 
> I think the problem comes on the dividing line between a motorcycle and a motorized wheelchair.


I had to get a driver license and helmet for a 50cc scooter and I could only start that road/written test and inspections at 14.

These kids are younger and moving faster and lighter with bicycle helmet if any at all. Not sure if they even have signal lights. They also zip on/off road unexpectedly

I envy them though. I can only imagine how much freedom they have. Not yelling at the kids to get off my lawn yet 😅


----------



## cainvest

MrMatt said:


> I think that they really should be licensing many of these vehicles, you need a license for a moped, why not for a similarly powerful e-bike.


BC has regulations in place for e-bikes, not sure if other provinces have them yet.


----------



## damian13ster

Nasty jobs reports








Canada Sheds Jobs for Second Month as Labor Force Shrinks


Canadian employment unexpectedly fell for a second straight month in July as workers dropped out of the labor force, adding to evidence the economy is losing momentum.




www.bloomberg.com





Labor participation rate down, number of jobs down


----------



## sags

We have an excess of jobs already, so no big deal.


----------



## m3s

sags said:


> We have an excess of jobs already, so no big deal.


ok boomer


----------



## sags

Oil royalties are up 283%, the deficit and debt is being paid down, Ontario alone needs 45,000 healthcare workers trained for employment, huge investments in EV manufacturing will create tens of thousands of jobs in the next year, and unemployment is at record low 4-5%% levels.

But never mind any of that......Trudeau's government is doing really bad with the economy.


----------



## damian13ster

Hmm, if we only had immigration system that doesn't have thousands of health care workers in backlog - stopping them from working and helping out.

But unfortunately federal government can't run a passport office let alone immigration center so alas - no healthcare workers for Canadians.

And you must be high if you give current government credit for oil revenue


----------



## sags

_And you must be high if you give current government credit for oil revenue _

Does the same apply to Alberta who said they balanced their budget due to higher oil revenues ?


----------



## damian13ster

sags said:


> _And you must be high if you give current government credit for oil revenue _
> 
> Does the same apply to Alberta who said they balanced their budget due to higher oil revenues ?


Yes. The current government of Alberta doesn't get credit for higher royalty revenues.

They only can get credit if they are able to attract significant investment in the sector that will pay off in the future.
Royalty revenues are simply benefit of past governments attracting investment into the province.


----------



## MrMatt

damian13ster said:


> Hmm, if we only had immigration system that doesn't have thousands of health care workers in backlog - stopping them from working and helping out.


It's not immigration.

We don't have the capability to vet and train immigrants from some countries.
This gatekeeping is very important

I know many people who work in various regulated professions and you have to understand the real situation.
1. There are many high quality capable professionals. 
- From some countries it is relatively easy to get those credentials recognized in the various provinces.
2. There are some "Professionals" that are various levels of not acceptable.
- Some simply buy their credentials, and don't actually have the skills.
- They may also be from wealthy or powerful families, so they simply buy the status of being a doctor.
- Some countries medical standards are not equivalent.
3. Our medical professional training pipeline is overloaded, we've needed serious investment here for decades.

Honestly while some of the "doctors" driving cabs might be legitimate, I don't think many are actually "doctors" by our standards


----------



## damian13ster

A family member was trying to get through qualifications process in Canada.
It is a pain in the ***, not because it is strenuous, because you have to sometimes do extra studies, pass exams, etc. - it is a pain in the *** because it literally takes years to even get a response for what you actually have to do.

So yes, the gatekeeping is very important but the process needs to improve in order to evaluate credentials faster, so professionals know what to do in order to get credentials in Canada.

However, the specific article posted is referring to immigration, and that was the topic. The professional qualifications are whole other issue, but you can't start it until you have immigration process settled.


----------



## kcowan

Get the immigrant doctors tested and have a fast track to get them accredited,


----------



## MrMatt

kcowan said:


> Get the immigrant doctors tested and have a fast track to get them accredited,


They don't have the capacity to do it. They absolutely should expand it.

We can't even find positions for Canadian educated doctors.
They haven't for years.









Untrained and unemployed: Medical schools churning out doctors who can’t find residencies and full-time positions


'It’s a tragedy that here I am, I’m a Canadian medical graduate willing to work, willing to be a doctor, but unable to'




nationalpost.com





As far as simply testing, it's troublesom.
Ontario Engineers actually do test for the academic requirements, and interview for the experiential requirement. 
The stories I've heard are astonishing, they're not too common, but there are quite a few people who are clearly unqualified by any reasonable standard.

The nonsense I've heard from some "doctors" is just as appalling.


----------



## edip

I think the doctors are the issue.. If they limit the number of spots, they are in very high demand and of course they can make more money.... I don't disagree with the idea of bad doctors coming from outside of the country but there are many places in Europe with higher medical standards who are not able to get a doctor position in Canada. Force the universities and doctors to train more people and everything will go to normal. Why in Germany they have double of number of doctors per 100k than Canada and they are paid 30-50% of what doctors are paid in Canada?


----------



## m3s

edip said:


> Why in Germany they have double of number of doctors per 100k than Canada and they are paid 30-50% of what doctors are paid in Canada?


German healthcare was amazing. I remember being surprised that the doctors provided many sensible solutions besides drugs.

I don't have experience with it but post-secondary education in Germany is also free and their education system also specializes at a younger age and doesn't demean trades as much. I imagine the number of doctors has to do with different education system. Germany also has a very strong economy despite lack of natural resources thanks to intellectual property and that is probably thanks to accessible higher education.

Their houses are also cheaper and far better built. In Canada you'd pay 3x for much lower quality. Not even comparable really at all


----------



## MrMatt

edip said:


> I think the doctors are the issue.. If they limit the number of spots, they are in very high demand and of course they can make more money.... I don't disagree with the idea of bad doctors coming from outside of the country but there are many places in Europe with higher medical standards who are not able to get a doctor position in Canada. Force the universities and doctors to train more people and everything will go to normal.


The government is limiting the number of positions, not "the doctors".



> Why in Germany they have double of number of doctors per 100k than Canada and they are paid 30-50% of what doctors are paid in Canada?


Because you could just graduate HS, get a government admin job and make 30% of the salary, without all the work, stress and debt of being a doctor.

Canadian doctors can also easily walk across the border to the US and significantly increase their salary.


----------



## m3s

US rent









I work with young professionals in the US. They are now paying $3500 USD/month with a roommate for something decent and looking online a 1 bedroom in a sketchy area is $1800 USD/month and I've also heard the same from talking to young min wage workers.

Also many of the young professionals I work with were forced to move due to the landlord selling or increasing rent. The few who bought had to basically outbid everyone and waive all conditions including inspection

All the labour here is temporary foreign workers on unpaid overtime or working 2-3 jobs. Don't forget this is transitory and it's good for GICs. Your kids will own nothing and they'll love it!


----------



## KaeJS

^ the housing situation is not good by any means.

Renters are in deep trouble because the homeowners/landlords are in deep trouble lol


----------



## damian13ster

The trend continues:










Productivity down + labor costs up = inflation


----------



## sags

Summer vacations and vacation pay.


----------



## damian13ster

sags said:


> Summer vacations and vacation pay.


From april - june?
The numbers looked even worse in Q1 as can be seen on the table. Is your theory also 'summer vacation' for January-March?
When does summer start according to your calendar?
Those numbers are also yoy, but maybe in last year's version of your calendar summer vacation also switched place


----------



## sags

The report says July compared to July.

Many industries shut down in the summer vacation and perform maintenance work or assembly line change overs for new models.

Vacation pay is often paid out in one large payment in July.

Nothing to see here…move along.


----------



## damian13ster

sags said:


> The report says July compared to July.
> 
> Many industries shut down in the summer vacation and perform maintenance work or assembly line changeovers for new models.
> 
> Vacation pay is often paid out in one large payment in July.
> 
> Nothing to see here…move along.


It is quarterly and not monthly....
It is a year over year......


https://www.nasdaq.com/articles/u.s.-labor-productivity-continues-to-tumble-in-q2-labor-costs-continue-to-soar



You are fantastic at denying basic facts and lying though. Are you liberal staffer or something?
Your knowledge and attitude to truth would fit right in


----------



## sags

Industry will ramp back up in September.

Everyone is at the cottage. 😎


----------



## sags

Nasdaq is US…..see Honest Joe Biden.

Canada is doing very well….⭐


----------



## damian13ster

sags said:


> Nasdaq is US…..see Honest Joe Biden.
> 
> Canada is doing very well….⭐


Yes, those numbers are for US. Canada didn't release Q2 numbers yet.
They released Q4 and Q1. For both productivity dropped and labor cost increased

But Canada isn't doing well.
Productivity dropped in both previous quarters as well.
Labor cost increased in both previous quarters as well

Productivity drop + labor cost increase = inflation


----------



## m3s

Market is pumping on the latest CPI starting to come down


----------



## Covariance

m3s said:


> Market is pumping on the latest CPI starting to come down


Yes. Mainstream media is all in on this narrative. Headline changed 0% July over June. Core decelerated to 0.3% which annualizes to 3.7%


----------



## damian13ster

The headlines number do look much better.

The concerning part remains food. YoY up 10.9%, fastest since 1979.

The inflation itself has probably peaked with the baseline moving considerably higher, but food is likely to continue to go up due to higher cost of inputs and lunacy of some governments that want to limit food production


----------



## Covariance

damian13ster said:


> The headlines number do look much better.
> 
> The concerning part remains food. YoY up 10.9%, fastest since 1979.
> 
> The inflation itself has probably peaked with the baseline moving considerably higher, but food is likely to continue to go up due to higher cost of inputs and lunacy of some governments that want to limit food production


Agreed, Will need to see that one break, or other categories to go negative to move it lower. Food month over month 1.1%, which is 12.7% annualized.


----------



## newfoundlander61

Peaked (agree) will stay high for a long while yet.


----------



## sags

A lot of people have never experienced "normal" rates of interest or inflation and are shocked to pay more for food, gas and essentials.

Boomers have been down this road before and know how to handle it. We paid 19% mortgage interest and managed it.

I listened to CBC radio's "cross country" on Sunday and they asked people about inflation.

The first caller was a young woman working full time in the public service. Her partner worked full time in the public service.

She said they had to delay their rent payment for their apartment for a few days.....until pay day.

She said they had stopped going to grocery stores and were only buying essential food items by home delivery.

She said she didn't know how they were going to survive.

The host never asked them what they do with all their money, because it is going somewhere. Rents are high.....but not that high.

The next caller said he was doing fine and owned his home, and then went on a long anti-Trudeau ramble covering this, that and everything else.

He ended by saying he was moving to Costa Rica to live. A few questions revealed he had lived at home with his parents, inherited the home worth $1,000,000, had no retirement income, and was going to sell the house to move to CR because it was cheaper.

I mean seriously.........a single guy lives with his parents his whole life and has no money ? He inherits a paid off home.........and Canada sucks ?

I stopped listening after that. Some people are really suffering and are doing the best they can, but a lot of people are just doing a lot of whining.


----------



## james4beach

Good points @sags 

There are some people who do have very difficult circumstances, and inflation is really hurting some people badly (especially anyone who is unable to change jobs to get higher pay)

On the other hand, there's also a culture of complaining about the economy and country. Some people are just cynical, maybe others have unrealistic ideas about what middle class lifestyle means.


----------



## m3s

sags said:


> A lot of people have never experienced "normal" rates of interest or inflation and are shocked to pay more for food, gas and essentials.
> 
> Boomers have been down this road before and know how to handle it. We paid 19% mortgage interest and managed it.


Sure but that also means housing prices need to crash back to what they were when mortgages were 19%

That means people default on their mortgages when houses are worth less than the debt, that means financial sector gets left holding the bag and then investors get hit. That means central banks need to print lots of fiat causing more inflation or else enact the great reset they're opening planned for at the world economic forum

If only we all had a COLA adjusted pension from a failed company that was bailed out by the government then we could look down on everyone else for whining


----------



## londoncalling

I was glad to hear US inflation beat expectations but they still remain high and need to come down considerably. As noted core is still 3.7% and Food which is something people can substitute with lower prices but cannot eliminate is still double digits. Decreases in fuel prices should help reduce costs for goods further out. Inflation will take awhile to come done as we need to inflate away the massive debt and money printing of the past number of years. A look at Us recessions going back 150 years shows that they are spaced further out and tend to be shorter in duration. Perhaps the two are correlated but I believe at some point it has to stop before we experience total collapse. Bubbles need to burst and the bigger they get the more painful it becomes. Debt bubbles are no different.

To paraphrase Einstein "Compound interest is the greatest invention the world has ever produced". or better yet to quote him directly " Compound interest is the eight wonder of the world. He who understands it, earns it... he who doesn't ... pays it." Is there a chance that we can grow our way out of this debt so that future generations won't be left to pay the tab?

U.S. Recessions: History, Causes, Lengths, Stats (thebalance.com)


----------



## KaeJS

londoncalling said:


> Is there a chance that we can grow our way out of this debt so that future generations won't be left to pay the tab?


😂😂😂😂😂😂


----------



## sags

The actual debt number is relatively unimportant. What is important is the debt servicing cost.

It is projected that as the economy grows, and government revenues increase to balance the budget and produce surpluses, Canada's debt servicing costs will decline to 1-2 % of GDP within the next few years. That is not a debt servicing cost level that creates much concern for economists.

Future generations will have to service the debt and it is advisable to lower that future cost, but there is no critical reason to pay off all the debt.

Some will argue that savings from servicing costs could fund education, healthcare or whatever, but that ignores the fact that it is the debt that built the schools, hospitals and funded the medical and diagnostic equipment while simultaneously educating people to work there.


----------



## sags

According to Canada's debt clock provided by the Canadian Taxpayers Federation.....the federal debt is $1.179 trillion dollars.

For comparison, the market cap of all the crypto is $1.17 trillion dollars. It has declined from almost $3 trillion recently.

Which would Canadians rather have as owned assets for all the outstanding debt....all the land and federal assets in Canada or all the crypto in the world ?

The market cap of Apple is $2.7 trillion, which is about equal to the combined debt load of all government levels in Canada.

When put into proper perspective one realizes that our debt is hardly worthy of all the "it's spiralling out of control" hysteria by some.





__





Canada's National Debt Clock : The Canadian Taxpayers Federation







www.debtclock.ca


----------



## londoncalling

sags said:


> Future generations will have to service the debt and it is advisable to lower that future cost, but there is no critical reason to pay off all the debt.


Not critical to pay it all off but important to stop it from escalating like it has for the past couple decades. The current situation is comparable to someone who pays only the interest on a credit card or makes the minimum payments. With that line of thinking we'll never get out of debt. IMO that is very irresponsible. The US is in bad shape too but at least they currently hold the worlds reserve currency. All it takes is a single catalyst for developing countries with a younger demographic and less debt to capitalize on their innovation and production. They will surpass us in quality of life and GDP. It happened to Europe after WW2. Many predict China or India are in a similar position to do so in the next couple decades.

As a comparison here is the debt in 1946. 











After adjusting for inflation that $817 dollars in 2022 is $13 147.42. almost 2.5X.

The fact that people slough off the magnitude of our current situation explains why we are in such bad shape. I guess it won't matter to some as they may no longer be of this earth.

Added: I chose 1946 as it was a period in which the country had become largely indebted due to an unusual world event. If you fast forward a couple decades the multiplier is even worse.


----------



## damian13ster

sags said:


> The actual debt number is relatively unimportant. What is important is the debt servicing cost.
> 
> It is projected that as the economy grows, and government revenues increase to balance the budget and produce surpluses, Canada's debt servicing costs will decline to 1-2 % of GDP within the next few years. That is not a debt servicing cost level that creates much concern for economists.
> 
> Future generations will have to service the debt and it is advisable to lower that future cost, but there is no critical reason to pay off all the debt.
> 
> Some will argue that savings from servicing costs could fund education, healthcare or whatever, but that ignores the fact that it is the debt that built the schools, hospitals and funded the medical and diagnostic equipment while simultaneously educating people to work there.


*Another lie from sags.* In order for debt servicing cost to decline as a percentage of GDP, the GDP would have to double in 3 years, since the gross debt servicing cost will double in such a short period of time.

And no, this is debt that went directly to the pockets of the rich through biggest artificial asset inflation in history. Over the past 2 years, over 400bln were spent on nothing but forbidding people from working. So no, it was not invested and there won't be any ROI


----------



## m3s

sags said:


> Future generations will have to service the debt and it is advisable to lower that future cost, but there is no critical reason to pay off all the debt.


World economic forum will resolve this with the great reset

Boomers will go down in history as the great financial and environmental train wreck on society. Kids will learn about the prosperous days of the boomers when they didn't care about math or the environment and just spent like drunken albertan sailors because they thought printing fiat had no impact and inflation was good for their GICs

Your kids still won't own a house but they'll love the new world order


----------



## Beaver101

james4beach said:


> Good points @sags
> 
> There are some people who do have very difficult circumstances, and inflation is really hurting some people badly (especially anyone who is unable to change jobs to get higher pay)
> 
> On the other hand, there's also a culture of complaining about the economy and country. Some people are just cynical, maybe others have unrealistic ideas about what middle class lifestyle means.


 ... the falsies that keep crying wolves that nobody listens to eventually as they ruin it for the legitimates.


----------



## sags

londoncalling said:


> Not critical to pay it all off but important to stop it from escalating like it has for the past couple decades. The current situation is comparable to someone who pays only the interest on a credit card or makes the minimum payments. With that line of thinking we'll never get out of debt. IMO that is very irresponsible. The US is in bad shape too but at least they currently hold the worlds reserve currency. All it takes is a single catalyst for developing countries with a younger demographic and less debt to capitalize on their innovation and production. They will surpass us in quality of life and GDP. It happened to Europe after WW2. Many predict China or India are in a similar position to do so in the next couple decades.
> 
> As a comparison here is the debt in 1946.
> 
> View attachment 23545
> 
> 
> 
> After adjusting for inflation that $817 dollars in 2022 is $13 147.42. almost 2.5X.
> 
> The fact that people slough off the magnitude of our current situation explains why we are in such bad shape. I guess it won't matter to some as they may no longer be of this earth.
> 
> Added: I chose 1946 as it was a period in which the country had become largely indebted due to an unusual world event. If you fast forward a couple decades the multiplier is even worse.


I agree that increasing the debt at the same pace as it has the past couple of years would be catastrophic in the long term, but I think we must consider why the debt increased and what the future budgets by the current government indicate.

Prior to the pandemic, Canada's debt to GDP ratio was the lowest in the G7. We were the envy of the world with our low debt load and servicing costs.

The pandemic sparked a ton of new spending.......estimated at between $400 and $600 billion dollars all total. Canada's debt to GDP skyrocketed upwards.

We are now on the other side of the pandemic (hopefully) and the pandemic spending has largely stopped. Research and vaccine production will continue.

The deficit has returned to near normal and monthly surpluses have been reported.

The debt was restructured for long term at record low interest rates, which was a wise move by the Finance Minister. The projections are that servicing costs will decline to 1 -2 % of GDP. Economists say that is a very affordable number.

One can debate if the pandemic spending was too generous or not generous enough, but there is little question that it did prevent Canada from falling into an economic depression and healthcare disaster.

Now we have to hold the line on spending, reduce the deficit and pay down the debt.......which is what FM Freeland says is the government's focus.

That doesn't mean all spending will cease though. Strategic investments must still be made to secure a solid future for Canadians.


----------



## MrMatt

m3s said:


> World economic forum will resolve this with the great reset
> 
> Boomers will go down in history as the great financial and environmental train wreck on society. Kids will learn about the prosperous days of the boomers when they didn't care about math or the environment and just spent like drunken albertan sailors because they thought printing fiat had no impact and inflation was good for their GICs
> 
> Your kids still won't own a house but they'll love the new world order


Boomers did a huge amount to move society forward and we should be thankful for that.

They weren't perfect, but they did things like transition from dumps to landfills, they pushed for industrial scale recycling, brought environmental concerns into the public sphere, massive improvements in equality and human rights. Things like the EPA simply didn't exist.
I think you're minimizing all the hard work that has been done.

The idea that the great reset will be good is scary, we've built quite an amazing system, and to simply tear it all down is irresponsible.
Also do you really think that the elites pushing this agenda are doing it for the little guy, or just as a way to consolidate and grow their power.

When USSR broke up and went "free market", who got the lions share of the benefits?


Secondly, I have no doubt when your children look back at your generation, they admonish you for making such obvious errors, whatever they happen to be. While they also discount all your accomplishments.


----------



## sags

damian13ster said:


> *Another lie from sags.* In order for debt servicing cost to decline as a percentage of GDP, the GDP would have to double in 3 years, since the gross debt servicing cost will double in such a short period of time.
> 
> And no, this is debt that went directly to the pockets of the rich through biggest artificial asset inflation in history. Over the past 2 years, over 400bln were spent on nothing but forbidding people from working. So no, it was not invested and there won't be any ROI


Unsupported nonsense.

Covid spending paid for the vaccines, PPE, lost wage replacement, business support, and a host of other necessary spending.

Additional government spending put the economic levers in place to expand the economy.

Investing in the EV industry and vaccine production are but two examples of prudent spending for the future.

The debt has increased, but the debt was restructured by FM Freeland at historic low interest rates, which she described in past budget announcements.

The result of the restructuring was the servicing cost is lower on the increased debt than it was before the pandemic.

Historic low interest rates were a gift to debtors.

The _"Canada is on the road to self destruction_" theory is not supported by the facts.


----------



## sags

_And poor Bunnypatch. Once again a delusional Covid view of the world made people think they could exit the city – where jobs, friends, entertainment, culture and education were concentrated, and move to the boonies just because they were cheap. Now many are trapped in real estate that’s devalued, and understand the huge social price they paid. Not everybody loves bugs and cows.

Finally, there’s financial illiteracy. Never underestimate how little most people know about macroeconomics, financial markets, monetary policy, taxation or financial planning. The biggest cohort of the population has never experienced inflation about 4% (it’s twice that now) or dreamt mortgages could hit 6%. For their entire adult lives real estate has only gone up. RRSP contribution levels have been dropping for years and the spike in household savings rates during the pandemic was a total aberration. We’re back to spending everything we make. Worse, too many people are listening to charlatans tell them that the CB created inflation and that firing one guy will fix it.

In short, it’s a funk. A deep one. It will take a long time for this attitude to improve because life is about to get harder over the next few years. High rates. Continued inflation. Dismal housing values. And a crappy commute back to the cubicle.

But, of course, you can be different.






Chin up — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate







www.greaterfool.ca




_


----------



## m3s

MrMatt said:


> The idea that the great reset will be good is scary, we've built quite an amazing system, and to simply tear it all down is irresponsible.
> Also do you really think that the elites pushing this agenda are doing it for the little guy, or just as a way to consolidate and grow their power.


I guess I forgot the /s for sarcasm again

Great reset and world economic forum that the current liberals are complying with looks like a nightmare to me

sags types dream of ideology but we just tested UBI with CERB and now we see the impact on inflation



MrMatt said:


> Secondly, I have no doubt when your children look back at your generation, they admonish you for making such obvious errors, whatever they happen to be. While they also discount all your accomplishments.


The largest generation has massive impact on western society in all stages of life. Next we will see the impact on retirement living and funeral services etc

Biggest problem with boomer logic is they forget that growth declines after they leave this economy. The immigrants will not replace their consumer habits

Even sags said above debt is not a problem as long as GDP grows.


----------



## m3s

sags said:


> _But, of course, you can be different.
> 
> 
> 
> 
> 
> 
> Chin up — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate
> 
> 
> 
> 
> 
> 
> 
> www.greaterfool.ca
> 
> 
> 
> 
> _


You still read greater fool? I thought that guy was gone by now

Didn't you sell your house way too early? Great fool predicted the RE crash for more than a decade now. Ok we might finally get it now but will it ever crash back to your selling price?

Don't follow people who are wrong for decades people. Even broken clocks are right more often


----------



## damian13ster

sags said:


> Unsupported nonsense.
> 
> Covid spending paid for the vaccines, PPE, lost wage replacement, business support, and a host of other necessary spending.
> 
> Additional government spending put the economic levers in place to expand the economy.
> 
> Investing in the EV industry and vaccine production are but two examples of prudent spending for the future.
> 
> The debt has increased, but the debt was restructured by FM Freeland at historic low interest rates, which she described in past budget announcements.
> 
> The result of the restructuring was the servicing cost is lower on the increased debt than it was before the pandemic.
> 
> Historic low interest rates were a gift to debtors.
> 
> The _"Canada is on the road to self destruction_" theory is not supported by the facts.


Servicing cost is not lower.

Jesus man, just stop lying!

There are literally numbers provided by PBO and by economists that show servicing costs will double in 4 years.

Why are you continuing to lie when it is proven unequivocally that what you are spreading is absolute bullshit?


----------



## sags

Fitch rating agency would disagree with you on the debt declining over time.

*Narrower Budget*_* Deficits:* The spring FY2022-2023 federal and provincial budgets *place Canada's general government balance on a faster deficit reduction path than Fitch expected at its last review in June 2021*. Windfall oil and gas revenues and broader economic pick-up led to sharp narrowing of 2021 deficits and these have lifted federal and provincial revenue projections. The general government deficit was 5% of GDP in 2021 on a calendar year basis, and Fitch expects the general government deficit to gradually narrow during 2022-2024.

*Improved Debt Trajectory*: Fitch estimates that the federal and provincial governments medium-term budgets together will keep *the gross consolidated general government debt/GDP on a downward trajectory*, despite increased monetary policy tightening (275 bps) during 2022 in the June baseline scenario. *Fitch expects gross consolidated general government debt/GDP to decrease to 106% in December 2022 from 111% in December 2021.*_

On the debt servicing costs......it needs to be considered in proportion to the overall economy.....and the debt servicing cost to gdp ratio exists for that purpose.

That number declines as the economy grows. The information and mathematical formulas are explained here.

_*


https://www.bankofcanada.ca/wp-content/uploads/2010/05/wp95-4.pdf


*_


----------



## m3s

sags said:


> On the debt servicing costs......it needs to be considered in proportion to the overall economy.....and the debt servicing cost to gdp ratio exists for that purpose.
> 
> That number declines as the economy grows. The information and mathematical formulas are explained here.


There is no guarantee that GDP will grow forever to service the debt. Hence the house of cards

The largest generation is winding down its participation in the economy. Birth rates are in decline

So the only savior is immigrants. We need immigrants to fill the bottom of this pyramid scheme


----------



## KaeJS

m3s said:


> There is no guarantee that GDP will grow forever to service the debt. Hence the house of cards
> 
> The largest generation is winding down its participation in the economy. Birth rates are in decline
> 
> So the only savior is immigrants. We need immigrants to fill the bottom of this pyramid scheme


Immigrants won't save it.
It's a bandaid for a wound that needs stitches.


----------



## james4beach

Great news... inflation might be easing. Oil is down to $88 now!


----------



## sags

I also heard on the news that grain prices have fallen considerably.

The wife loaded up on pasta at 77 cents a package, but it was all spaghetti so she will load up on other pasta when they come in.

Stock up now.......just in case lower prices don't last.









 Food prices fell sharply in July — but the respite may not last


Global food prices slid in July, but there are doubts over whether the good news will last as, among other things, the Russia-Ukraine grain deal appears shaky.




www.cnbc.com


----------



## sags

Home sales and prices are also continuing to decline.

I think they still have a long ways to fall if interest rates continue to rise.

Affordability is still a major issue.



https://www.cbc.ca/news/business/real-estate-numbers-july-crea-1.6551351


----------



## damian13ster

CPI 0.1% mom, core inflation heating up to 0.5% mom


----------



## nathan79

Canada's inflation rate decelerated to 7.6% in July (from 8.1% in June). Inflation cooled in all provinces except for BC, where it _accelerated_ to 8.0% (from 7.9% in June).

I have noticed slightly cheaper gas here in the Vancouver area, but that's about it. Pretty much everything else has been skyrocketing, which obviously cancelled out the lower gas prices.


----------



## damian13ster

nathan79 said:


> Canada's inflation rate decelerated to 7.6% in July (from 8.1% in June). Inflation cooled in all provinces except for BC, where it _accelerated_ to 8.0% (from 7.9% in June).
> 
> I have noticed slightly cheaper gas here in the Vancouver area, but that's about it. Pretty much everything else has been skyrocketing, which obviously cancelled out the lower gas prices.


Yep, the headline number is pretty much all gasoline.
Food, shelter, and core inflation are strong. The breadth of inflation is getting much wider with over 60% of items exceeding 3% inflation.
This will take many more raises to get the prices down

The problem is that destroying food production is now official government policy so food inflation will be here for a while, and is currently double-digits


----------



## james4beach

nathan79 said:


> Canada's inflation rate decelerated to 7.6% in July (from 8.1% in June). Inflation cooled in all provinces except for BC, where it _accelerated_ to 8.0% (from 7.9% in June).
> 
> I have noticed slightly cheaper gas here in the Vancouver area, but that's about it. Pretty much everything else has been skyrocketing, which obviously cancelled out the lower gas prices.


Aren't we a lucky bunch here in BC


----------



## peterk

Anecdotally, I'm seeing hotels and AirBnbs up about 100%+ or so from three years ago. Places where it used to be $100/night regular and $160 in the summer time are now $350+ in summer 2022. Was thinking of a quick pop into downtown Toronto a couple weeks ago, but was $400 for a regular hotel and $800 for a nice one - Used to be 150 and 300...

Various construction and building materials for hobby builders and small time home renos is up 100%.

Pretty much anything that is a smaller-value (<$10,000) entertainment/hobby item or luxury item for those who are a bit richer with disposable income is up 100% or so from pre-covid.


----------



## AlwaysMissingTheBoat

peterk said:


> Anecdotally, I'm seeing hotels and AirBnbs up about 100%+ or so from three years ago. Places where it used to be $100/night regular and $160 in the summer time are now $350+ in summer 2022. Was thinking of a quick pop into downtown Toronto a couple weeks ago, but was $400 for a regular hotel and $800 for a nice one - Used to be 150 and 300...
> 
> Various construction and building materials for hobby builders and small time home renos is up 100%.
> 
> Pretty much anything that is a smaller-value (<$10,000) entertainment/hobby item or luxury item for those who are a bit richer with disposable income is up 100% or so from pre-covid.


I hadn't been in a hotel since prior to Covid. Booked a room last night for $240 at a mid-range hotel that would have cost no more than $129 per night before 2020. Everything else available was in the $300s and a good number had no vacancies. So there seems to be considerable demand despite the lofty prices.


----------



## m3s

So when does the transitory part of this transitory inflation happen?

Shouldn't inflation be negative soon to start going back to pre-covid levels?

That's what the central banksters told me


----------



## james4beach

peterk said:


> Anecdotally, I'm seeing hotels and AirBnbs up about 100%+ or so from three years ago. Places where it used to be $100/night regular and $160 in the summer time are now $350+ in summer 2022. Was thinking of a quick pop into downtown Toronto a couple weeks ago, but was $400 for a regular hotel and $800 for a nice one - Used to be 150 and 300...


Yeah, hotel prices have gone insane and it happened very recently.

I was in downtown Toronto in mid April, the weather was still bad and no tourism yet (I planned to go while the weather sucked because I suspected the summer was going to get nuts). I got a pretty nice downtown hotel at $170 a night, after taxes $188 a night.

Just checked the same place out of curiosity and it's currently $360 a night. Exactly what you said. The price more than doubled since April. I think it's all tourist demand, people have gone absolutely crazy and are determined to do tourism at any cost.


----------



## Money172375

james4beach said:


> Great news... inflation might be easing. Oil is down to $88 now!


No help to my most of my neighbours who use propane for heat. They were paying $0.499 /L just 18 months ago. They’re all getting letters this week to say the next fill up will be at $0.839. I have a heat pump with elec backup. I should be well ahead of them as I was nearly equal to them when propane was 49.9









Canadian propane costs soar due to supply chain issues


Canadian homeowners who use propane to heat their homes will have to pay a lot more to stay warm this winter.




toronto.ctvnews.ca


----------



## peterk

m3s said:


> So when does the transitory part of this transitory inflation happen?
> 
> Shouldn't inflation be negative soon to start going back to pre-covid levels?
> 
> That's what the central banksters told me


Nope, too late - we've already transited past the transitory part. Transitioning to negative prices now would be deflation, which is absolutely the worst thing in the entire world, according to economists from the 1930s, dontchaknow, and would require Trillions $$$ more in stimulus to prevent, obviously.


----------



## Covariance

m3s said:


> So when does the transitory part of this transitory inflation happen?
> 
> Shouldn't inflation be negative soon to start going back to pre-covid levels?
> 
> That's what the central banksters told me


Not going to happen. It’s a before and after, not a come and gone and back to normal. I’m not suggesting high inflation persists for ever. It will not. But returning to the good old days is a fantasy. At least for the next half decade.


----------



## MrMatt

m3s said:


> So when does the transitory part of this transitory inflation happen?
> 
> Shouldn't inflation be negative soon to start going back to pre-covid levels?
> 
> That's what the central banksters told me


The high *rate* of inflation was transitory. The actual inflation is not, prices aren't really going to fall.


----------



## m3s

MrMatt said:


> The high *rate* of inflation was transitory. The actual inflation is not, prices aren't really going to fall.


I forgot the /s again


----------



## MrBlackhill

Inability to detect sarcasm... A sign of dementia or autism.

Or a sign of conservatism, right-leaning. Interesting.



https://www.sciencedirect.com/science/article/pii/S0001691821002298


----------



## james4beach

MrBlackhill said:


> Inability to detect sarcasm... A sign of dementia or autism.


Could also be a shortcoming in the GPT-3 software


----------



## MrMatt

MrBlackhill said:


> Inability to detect sarcasm... A sign of dementia or autism.
> 
> Or a sign of conservatism, right-leaning. Interesting.
> 
> 
> 
> https://www.sciencedirect.com/science/article/pii/S0001691821002298


Or that it's hard to communicate sarcasm in text form.

It's kind of narcisistic to assume that a communication problem is always on the other persons side.

Also since you think it's so obvious, there are people who honestly thought that the new inflated prices were only temporary, and that things will "get back to normal" soon.
Sure for some items like gas they've come back, but most items will not.
It's a very common cognitive bias to think that the current situation is the normal situation. 

FYI, I'm a HUGE user of sarcasm, and yes I want to protect our liberal institutions, which of course makes me a "right wing conservative".


----------



## MrMatt

james4beach said:


> Could also be a shortcoming in the GPT-3 software


Ahhh yes, the favourite debate tactic of those who know they're wrong, unfounded attacks at those who disagree.

Unless you're suggesting I have superhuman arguments, this could be why you don't actually have a counter.

Face it, you're wildly partisan, I think you're actually unable to comprehend a different point of view.

It became very obvious during the Portland Riots, when you showed "evidence" of unidentified police conducting actions.
And included a screenshot of uniformed and identified Border Protection Officers as the "evidence".


----------



## MrBlackhill

MrMatt said:


> Also since you think it's so obvious, there are people who honestly thought that the new inflated prices were only temporary


The sarcasm was obvious because it came from m3s and if you've read enough of his posts, you would've known without a doubt that he was being sarcastic.


----------



## Thal81

MrBlackhill said:


> The sarcasm was obvious because it came from m3s and if you've read enough of his posts, you would've known without a doubt that he was being sarcastic.


I blocked that user a long time ago, now there's no problem.


----------



## MrMatt

MrBlackhill said:


> The sarcasm was obvious because it came from m3s and if you've read enough of his posts, you would've known without a doubt that he was being sarcastic.


The fact that m3s was being sarcastic was pretty obvious, but as it is a commonly held belief, based on the comments from our government, I followed that path, simply drawing the distinction between two of the interpretations.

You'll notice James also mentioned oil coming back down, there are many people who feel that the "transitory inflation" means that prices will come back down.


----------



## m3s

MrMatt said:


> There are many people who feel that the "transitory inflation" means that prices will come back down.


Yea I was making light of this belief

I don't think prices will come back down. The ideal is 2% rate of inflation. They stopped using the word transitory though because clearly it's not

Let's see how this soft landing goes


----------



## sags

James is right that some prices have fallen, but there are still pockets of resistance.

I am more concerned about the effects of future interest rate hikes, as central banks tend to overshoot the targets.

The good news is the Fed had an extra month to analyze the data coming in and can make a better judgement call.

The US housing market has entered a bear market, and it may have an effect on their decision. The last thing they want is another housing collapse.

In Canada, I think there is sufficient extra government revenue to support a temporary inflation benefit for Canadians earning less than $40K net income.

A few monthly cheques until the dust settles is just what Dr. Inflation prescribes.


----------



## londoncalling

m3s said:


> Yea I was making light of this belief
> 
> I don't think prices will come back down. The ideal is 2% rate of inflation. They stopped using the word transitory though because clearly it's not
> 
> Let's see how this soft landing goes


We would have to experience deflation for prices to come back down. We may be on the cusp of disinflation where inflation rate starts to decrease. The inflation of the past year was not transitory as many hoped or were led to believe. There were several posters here on CMF that made that call based on understanding monetary policy's effect on inflation. Fuel prices go up and down more frequently in comparison to other goods. It is highly unlikely prices will return to previous levels on most items. Stores typically don't lower prices unless it is to blow out inventory.

also believe the ideal rate will be increased over time. The experts will say it is an outdated model and does not reflect the modern economy. I am not saying that claim is correct or incorrect. The statement should help remove fear the rate can't get down to 2%. The YOY rate tells us what is happening in the short term. However, if we were to use a 5 year or 10 average we would likely still have a much lower rate than the historical average. To me this indicates we will experience a higher rate for quite sometime. Even beyond 2022-23. Of course the central banks can try to turn the ship by tinkering with monetary policy as they have done before.


----------



## nathan79

londoncalling said:


> also believe the ideal rate will be increased over time. The experts will say it is an outdated model and does not reflect the modern economy. I am not saying that claim is correct or incorrect.


The modern economy is based on constant stimulus, so the actual organic rate of inflation would probably be lower than 2%. Aging demographics and technological progress are both deflationary.

2% is a good enough compromise for me. I see no reason why the ideal rate should be increased, except as an excuse to continue stimulating. But I don't doubt that's what will happen.


----------



## sags

Agricultural commodities have fallen sharply in price.









Market Trends Report – July & August 2022 - Grain Farmers of Ontario


US and the World It is that time of year again when many analysts think the crop might be made. Late July and going into August is always a critical time for crop development and 2022 is no different than any other. As…




gfo.ca


----------



## MrMatt

londoncalling said:


> The inflation of the past year was not transitory as many hoped or were led to believe.


"let to believe"

The Bank of Canada literally said this inflation was transitory. 

They're LYING TO YOU!

Now I'm not saying PP is telling the truth either, and we'd be better off firing the lot of them.

What I am saying is that they aren't being truthful or at least they're not correcting widely held misconceptions/misunderstandings of what they say.

When they say it's transitory, and people say "Don't worry it will get back to normal", some people assume a "return to better days", and everyone knows that isn't happening.


----------



## m3s

sags said:


> In Canada, I think there is sufficient extra government revenue to support a *temporary inflation benefit *for Canadians earning less than $40K net income.
> 
> A few monthly cheques until the dust settles is just what Dr. Inflation prescribes.





MrMatt said:


> What I am saying is that they aren't being truthful or at least they're not correcting widely held misconceptions/misunderstandings of what they say.
> 
> When they say it's transitory, and people say "Don't worry it will get back to normal", some people assume a "return to better days", and everyone knows that isn't happening.


Everybody doesn't know

Just read sags post above and you can see he doesn't understand that inflation is a rate. He seems to think it is temporary and can be solved by the same thing that causes it

Think of how stupid the average person is, and realize half of them are stupider than that. Where does sags level of awareness fit on that spectrum?


----------



## MrBlackhill

Scary poll about Canadians situation:



> Half could not manage unexpected expense of more than $1,000


What I don't understand though when looking at this chart is how come 1 out of 5 households making $200k+ said they couldn't manage an unexpected expense of up to $1,000. Wow, really? Then I guess the interpretation of "not being about to manage it" is pretty subjective. And those making $200k+ who said they can't manage $100 unexpected expense must be joking or trolling the poll, right?

It's also scary that the median household is in the $50k-$99k range and 1 out of 7 said they couldn't manage an unexpected expense of up to $100.



















The Toll of Inflation: Soaring prices has four-in-five Canadians pinching pennies - Angus Reid Institute


Most believe grocery stores are taking advantage of inflation to boost profits August 22, 2022 – Statistics Canada may have reported cooling inflation rates in recent days, but the summer




angusreid.org


----------



## MrMatt

MrBlackhill said:


> Scary poll about Canadians situation:
> 
> What I don't understand though when looking at this chart is how come 1 out of 5 households making $200k+ said they couldn't manage an unexpected expense of up to $1,000. Wow, really? Then I guess the interpretation of "not being about to manage it" is pretty subjective. And those who said they can't manage $100 unexpected expense must be joking or trolling the poll, right?
> 
> It's also scary that the median household is in the $50k-$99k range and 1 out of 7 said they couldn't manage an unexpected expense of up to $100.


This is why Dave Ramseys plan, BEFORE tacking debt is to get that small emergency fund to a small issue doesn't throw you off track.

As far as what you don't understand, what is there to be confused about?
Canadians are financially illiterate, they don't have the skills to manage finances.

That's why there wasn't a huge uproar when Trudeau said he doesn't think about the economy, for most Canadians, they simply don't understand or appreciate these concepts.

That is my problem with so many government plans, they're put together by people who likely don't understand finance, and being supported by people who doen't understand it either.
You say "that isn't affordable" and they accuse you of not caring. We care, thats why we want a working system.

Look at the $10/day daycare, it's being widely ignored in Ontario, because they haven't provided the daycare providers with the details to determine if it is sustainable.
Something the creators of the program didn't bother with because they literally don't understand how finances work. For them saying "we made $10 daycare" is enough, the fact that there is nobody who can provide the service is irrelevant to them.


I've never been at a point where $100 was ruinous, and $1k wasn't ruinous a few months after I got a full time job.


----------



## sags

Our daughter in law works in private daycare.

The Ontario government created problems the way they are administering the program and setting their own arbitrary rules.

They are effectively implementing "wage and price" controls over a private industry, which means the daycare workers will end up subsidizing the $!0 daily fee.

All their spending would have to be submitted and approved by the government. The wages would be capped and they could no longer give employees yearly bonuses.

Their daycare center is full before the new program, so they would have to deal with revenue cuts unless the government replaces the full amount that is currently in place.

Any future raises or benefit improvements would have to be approved by the Ontario government.


----------



## m3s

sags said:


> All their spending would have to be submitted and approved by the government. The wages would be capped and they could no longer give employees yearly bonuses.


This is how everything works in the government

I just wrote a memo to save the government 50% of a major expense by letting me do it myself. I would easily bank $$$ and so would the government so once the precedence is set more people would follow and there for be massive saving for everyone (US already does this it's a no brainer)

Naw the government would rather pay multiple people to micromanage expenses they know nothing about plus end up spending more because everyone just rips off government contracts. We end up overpaying for very substandard service and the micromanager don't enforce any quality at all

What you'll end up with is a daycare system more focused on ripping off the government while completely neglecting the kids and the daycare workers


----------



## sags

Pierre P. teaching economics........one piece of bacon at a a time.


__ https://twitter.com/i/web/status/1561466349817171969


----------



## sags

I am not sure what Pierre P is actually talking about when he talks about Canadians being reliant on imported foreign food.

I made the same breakfast at home today, and all the food was grown and made in Canada, except for the coffee.

I also saved money cooking breakfast at home, instead of eating in a diner. If you dine out you have the cost of the gas, price, tax, and tips.

I also don't understand his.......if government wants to spend they have to cut spending somewhere else idea.

If the government sends money to Ukraine or to buy vaccines or fight forest fires in BC, they should cut spending on something else ?


----------



## milhouse

londoncalling said:


> We would have to experience deflation for prices to come back down. We may be on the cusp of disinflation where inflation rate starts to decrease. The inflation of the past year was not transitory as many hoped or were led to believe.





MrMatt said:


> The Bank of Canada literally said this inflation was transitory.
> 
> They're LYING TO YOU!


Permabear David Rosenberg was even commenting mid to late 2021 about deflation being more of a risk than inflation. 
If I were to fault the BoC, it was that they were way too slow to acknowledge the changing economic factors and adjust their actions faster. 



londoncalling said:


> It is highly unlikely prices will return to previous levels on most items. Stores typically don't lower prices unless it is to blow out inventory.


I wouldn't be surprised if retailers are taking advantage of this inflationary environment to blur that they are increasing margins. 

In other news, anyone seeing Citi bank's prediction of inflation hitting 18% in the UK around early 2023? 









British inflation to hit 18% in early 2023, Citi forecasts


Citi raised its forecast for British consumer price inflation once again in the light of the latest jump in energy prices




www.theglobeandmail.com


----------



## m3s

sags said:


> I made the same breakfast at home today, and all the food was grown and made in Canada, except for the coffee.
> 
> I also saved money cooking breakfast at home, instead of eating in a diner. If you dine out you have the cost of the gas, price, tax, and tips.


Cost to produce eggs, bacon, milk go up when the price of oil or any basic commodity goes up saggy

We burned a lot of oil to produce the hay to feed the cows that produce the milk. They also require electricity, feed, medical. Milk has the be transported. Complicated stuff to understand I'm sure. If nobody dines out this is called demand destruction. Then we have a lot of restaurant staff with no income, less taxes coming in, less consumers

We all can't live off GIC and golden pensions with cost of living adjustments thanks to government bailouts. It's not economically feasible for all Canadians to live like you


__ https://twitter.com/i/web/status/1559167595642867712


----------



## sags

Pierre's contention that the price of eggs, bread, bacon are up because people are eating more eggs, bread and bacon with all that extra government money stashed in their pocket is so lame. (Pierre's wonky parable about 10 or 20 pieces of toast)

It is doubly lame when he contradicts himself by saying people are using credit cards to buy all the extra food they are eating, instead of spending all that government money he said was stashed in their pocket.

As to your argument that people should dine out to save jobs, that is a weak argument that could be applied to spending of any sort.

If government spending caused the inflation, why hasn't there been any inflation for the last 14 years with the government "printing" money continuously ?

This inflation is not caused by increased demand for goods and services. The demand was there before covid. The cause is lack of supply to meet the demand.

The docks are full of containers that aren't offloading. The ships are in a holding pattern offshore. There is a shortage of over the road drivers to move the containers off the docks. The transportation system is temporarily seized up. Amazon, Fedex, Purolator and other companies are building massive warehouses in Ontario to transition back away from the "just in time" JIT......system, which has revealed the inherent weakness of global supply chains during the pandemic.

This inflation has nothing to do with government spending that replaced lost wages with a CERB benefit that was less than the minimum wage.

That money was spent long ago, as people struggled to pay their bills, and had to defer payments on mortgages, loans, credit cards, and rents.

I recently read that few people understand macro economics and I don't think Pierre is one of them.

It is much easier to blame someone else......unions, central banks, Trudeau, ........whatever.

Personally.........I just blame Harper.


----------



## sags

Maybe we could all just opt out of inflation.


__ https://twitter.com/i/web/status/1561843546902081536


----------



## m3s

sags said:


> I recently read that few people understand macro economics and I don't think Pierre is one of them.
> 
> It is much easier to blame someone else......unions, central banks, Trudeau, ........whatever.


I'm not reading your wall of text but you clearly don't understand basic math let alone macro economics

If printing money doesn't cause inflation then why don't we print infinite money saggy ol brains


----------



## sags

Pierre's economics tries to connect dots that don't exist.

According to him, government spending on vaccines, PPE, business support, and wage replacement benefits caused the increase in the price of eggs, bacon, bread and coffee.

Never mind that inflation is global......it is "Justinflation" created by Trudeau and the BOC, according to Pierre.


----------



## m3s

sags said:


> Pierre's economics tries to connect dots that don't exist.


saggy economics is that inflation is good for GICs


----------



## Eclectic21

james4beach said:


> Yeah, hotel prices have gone insane and it happened very recently ...


It seems to vary.

Last July I was warned to check prices in advance as the motel near a friend's cottage that relatives booked had doubled their price. We were headed to a larger centre so it was pretty much in line with pre-covid prices for us.

The hotel booked in Feb for a funeral was about 60% higher than pre-covid. 
It didn't look any busier than previous visits.




james4beach said:


> ... I think it's all tourist demand, people have gone absolutely crazy and are determined to do tourism at any cost.


Lots of factors ... the night we couldn't book anything in advance and had to drive an extra 145 Km to find a room had sports tournaments, weddings and several other factors as well.


Cheers


----------



## Covariance

sags said:


> Maybe we could all just opt out of inflation.
> 
> 
> __ https://twitter.com/i/web/status/1561843546902081536


If the unit of currency is bitcoin then inflation would be significantly higher not lower. Over the past year the purchasing power of bitcoin has been cut in half.


----------



## m3s

Covariance said:


> If the unit of currency is bitcoin then inflation would be significantly higher not lower. Over the past year the purchasing power of bitcoin has been cut in half.


Boomers really struggle with zooming out considering they've been around longer than most


__ https://twitter.com/i/web/status/1559676388235513857
Price of iPhone in BTC (this is because iPhone is priced in USD)
iPhone 4 was 2,857.00
iPhone 5 was 16.60
iPhone 6 was 2.17
iPhone 7 was 1.28
iPhone 8 was 0.24
iPhone X was 0.16
iPhone 11 was 0.14
iPhone 12 was 0.06
iPhone 13 was 0.02

For people who have the capacity to zoom out rather than cherry pick 6 months that correlate to Fed monetary tightening following extremely loose monetary policy. Anything priced in a central bank currency is highly manipulated by its central bank policy. It's like measuring something with a unit that changes constantly

Boomers lack the plasticity to understand this new concept of a fixed supply rather than money that can be printed


----------



## KaeJS

Between the radical inflation fairytale stories and the Bitcoin, my head starts to implode when I read this thread.

Inflation is a direct result of money printing. It happens every single time. Just like how m3s said "If it didn't cause inflation, we could just keep printing money forever".

You can't print money without inflation and currency devaluation. That is the law of economics.

As an aside - Bitcoin is not some magic inflationary hedge. It HAS been for people who bought in more than a year ago. But it doesn't mean that is what it is just because of what it has done (future performance is not indicative of past returns, blah blah blah).

Also, sags, can we stop with this inflationary credit to the poor? Are you trying to destroy this country along with Trudeau? That is the absolute last thing we need.

We need less immigration.
Less taxes.
We need the government to get out of our business and stop making stupid rules and let the market be the market.

You know why it's called a market price? Because the market dictates the price. When you start d!cking around with things and creating rules and printing money and all that, you severely destroy the moving parts of the market. You create imbalances. These imbalances usually lead to more tinkering which causes the entire system to become fragile. It can become difficult or impossible to fix.

Bitcoin happens to be part of the market. Let it be. If it goes up, it goes up. If it goes down, it goes down.

I am personally so sick of government intervention. They need only be accountable for infrastructure, healthcare, social programs and education. Everything else needs to be handled by the market. I can't even believe we are seeing rent freezes. What kind of nonsense is that?

It is not MY FAULT or MY PROBLEM if people can't afford their rent in the same way it doesn't seem to be the fault of the boomers that millenials can't afford homes. I can't afford a Porsche, anyone wanna donate? This forum is also so full of martyrs all the time. If you want to give a credit to the poor, why are we not giving credits to everyone? What about Ethiopia? At some point, your problems are your problems and my problems are mine. We need to stop trying to save everyone. A little Darwinism goes a long way and people start learning instead of being braindead.

The inflation we are seeing is only partly due to supply constraints. The majority of inflation is actually due to the government being full of tyrants and boosting this covid crap way out of proportion and handing out money like every single day is Halloween.

It doesn't matter if the food you buy comes from Canada or not. The reality is that it costs more. It costs more because the farmers are having their margins squeezed. We will eventually run into a point where it IS cheaper to buy foreign foods and then that DOES become a problem because then all the money we printed leaves Canada and makes foreign farmers profit and leaves our local farmers unable to compete.

However, Canada has been on a path of uncompetitiveness for seemingly quite some many years.

As a country with a huge land mass and an abundance of water, lumber, oil, Natgas, etc... It is completely perplexing to me how we aren't more wealthy than we are and if it wasn't for our government always sticking their grubby little hands in everyone's lives all the time... We might actually be better off.

Sags, it is great that you are older and have made it and love your life in London, Ontario. But just because you have "made it" doesn't mean that there isn't work to be done, and it certainly does not mean inflation is good for GICs.

But sags, I will agree with you that PP is a moron for all his Bitcoin talk. Regardless, he is still the best guy to vote for if you want your kids and grandkids to have a decent future.

This thread needs an economics 101 tutorial as a sticky post.


----------



## MrBlackhill

KaeJS said:


> You can't print money without inflation and currency devaluation. That is the law of economics.


Actually, you can, based on the most famous economics formula.

MV=PY

Where
M is the money supply
V is the velocity of money
P is the price level
Y is the real GDP

So you could increase the money supply while the velocity of money decreases faster and you'd have deflation. You could also increase the money supply while the real GDP increases faster and you'd have deflation.

During the pandemic, the velocity of money decreased sharply. It was hard to tell how to balance properly that equation.


----------



## KaeJS

MrBlackhill said:


> Actually, you can, based on the most famous economics formula.
> 
> MV=PY
> 
> Where
> M is the money supply
> V is the velocity of money
> P is the price level
> Y is the real GDP
> 
> So you could increase the money supply while the velocity of money decreases faster and you'd have deflation. You could also increase the money supply while the real GDP increases faster and you'd have deflation.
> 
> During the pandemic, the velocity of money decreased sharply. It was hard to tell how to balance properly that equation.


Sure.
But then what happens when your GDP is shot and your velocity returns?

Inflation.


----------



## m3s

How to we increase GDP forever when birth rates are this low?

Bring in as many immigrants and foreign investors as possible and extract as many raw resources as possible. This is only sustainable for so long and Canada will change drastically over the next decades

We need someone like PP in opposition to keep the liberals grounded otherwise they would just go too far


----------



## MrBlackhill

KaeJS said:


> Sure.
> But then what happens when your GDP is shot and your velocity returns?
> 
> Inflation.


And prior to this, what would happen if we didn't print money when the velocity of money decreased?

Deflation.

Yes, we printed too much money, but is it better to overshoot or undershoot? Is deflation better than inflation?


----------



## KaeJS

m3s said:


> How to we increase GDP forever when birth rates are this low?
> 
> Bring in as many immigrants and foreign investors as possible and extract as many raw resources as possible. This is only sustainable for so long and Canada will change drastically over the next decades
> 
> We need someone like PP in opposition to keep the liberals grounded otherwise they would just go too far


Has anyone done the math on Canada's real GDP ex-housing?


----------



## KaeJS

MrBlackhill said:


> And prior to this, what would happen if we didn't print money when the velocity of money decreased?
> 
> Deflation.
> 
> Yes, we printed too much money, but is it better to overshoot or undershoot? Is deflation better than inflation?


The velocity only decreased because it was a manufactured scare tactic.

You think velocity would have decreased if covid wasn't blown out of proportion? No.

So, naturally, everyone OUGHT to expect the velocity would ramp right back up (as it did, and is still doing). Just think about the people everywhere blowing all their money just to travel.


----------



## KaeJS

The velocity decreased. Absolutely.
But everyone should have known it would come back.

But you know what you can't do? Print a crap ton of money when velocity goes down and then magically burn it all when the velocity comes back.


----------



## MrBlackhill

KaeJS said:


> The velocity decreased. Absolutely.
> But everyone should have known it would come back.


Yeah but how do people pay their bills while waiting for everything to come back to normal?

As a reminder, during the pandemic, unemployment rate reached levels never seen in over 50 years. As of 2021 it was still at decades high.


----------



## m3s

MrBlackhill said:


> Yeah but how do people pay their bills while waiting for everything to come back to normal?
> 
> As a reminder, during the pandemic, unemployment rate reached levels never seen in over 50 years. As of 2021 it was still at decades high.


In the US everyone moved to Florida who wanted to just keep living like normal

Somehow everyone didn't die in Florida. I know people there and they said their lives didn't change a bit

Canada and Australia had some of the most extreme measures


----------



## KaeJS

MrBlackhill said:


> Yeah but how do people pay their bills while waiting for everything to come back to normal?


People should have emergency funds.

Funny you should ask how people pay their bills. How about all the businesses that got destroyed and people's lives got lost in every single way other than death?

Imagine how many people went financially bankrupt, emotionally bankrupt, relationship bankrupt...

And what?
You care about the people working restaurant jobs that didn't have an emergency fund or not enough EI?

If you read my post above... It says that at some point, your problems need to stay your problems and my problems need to stay mine.

It's not my fault if some people lost their jobs. And it's not my responsibility. I'm not the tyrant, and it's not my job to save an emergency fund for other people.

Life happens. Some are lucky. Some are unlucky. Always plan to be unlucky and hope that you're lucky.

Nobody is coming to my aid if I lose my job tomorrow...


----------



## MrBlackhill

m3s said:


> Somehow everyone didn't die in Florida. I know people there and they said their lives didn't change a bit


Maybe. But Florida had over 300,000 cases per 1 million population and nearly 3,700 deaths per 1 million population. Canada had 3 times less than this.


----------



## MrBlackhill

KaeJS said:


> People should have emergency funds.


Yeah people should have emergency funds or starve to death, I guess that sounds reasonable to some people. Individualism, survivalism, but definitely not collaboration and solidarity.



KaeJS said:


> Nobody is coming to my aid if I lose my job tomorrow...


What about unemployment insurance, what about all the social services we have in Canada?



KaeJS said:


> How about all the businesses that got destroyed and people's lives got lost in every single way other than death?
> 
> Imagine how many people went financially bankrupt, emotionally bankrupt, relationship bankrupt...


Exactly, imagine how worse it would've been if there wasn't any printed money to help.


----------



## m3s

MrBlackhill said:


> Maybe. But Florida had over 300,000 cases per 1 million population and nearly 3,700 deaths per 1 million population. Canada had 3 times less than this.


Cases mean nothing. 3.7k out of a million is practically nothing.

More people were impacted in Canada by the measures financially, mentally etc

If Canada got it right it would be very obvious.. but it's not at all


----------



## Covariance

m3s said:


> Boomers really struggle with zooming out considering they've been around longer than most
> 
> 
> __ https://twitter.com/i/web/status/1559676388235513857
> Price of iPhone in BTC (this is because iPhone is priced in USD)
> iPhone 4 was 2,857.00
> iPhone 5 was 16.60
> iPhone 6 was 2.17
> iPhone 7 was 1.28
> iPhone 8 was 0.24
> iPhone X was 0.16
> iPhone 11 was 0.14
> iPhone 12 was 0.06
> iPhone 13 was 0.02
> 
> For people who have the capacity to zoom out rather than cherry pick 6 months that correlate to Fed monetary tightening following extremely loose monetary policy. Anything priced in a central bank currency is highly manipulated by its central bank policy. It's like measuring something with a unit that changes constantly
> 
> Boomers lack the plasticity to understand this new concept of a fixed supply rather than money that can be printed


Nice deflection, but that doesn't change the inflation measure in the last 12 months. Anyone "paid" with it in the last year would have seen their purchasing power cut in half.


----------



## KaeJS

MrBlackhill said:


> Yeah people should have emergency funds or starve to death, I guess that sounds reasonable to some people. Individualism, survivalism, but definitely not collaboration and solidarity.
> 
> 
> 
> What about unemployment insurance, what about all the social services we have in Canada?
> 
> 
> 
> Exactly, imagine how worse it would've been if there wasn't any printed money to help.


Well, do other people not get EI and social services, too?

And I think a lot of that printed money ended up in alcohol, crypto and new iPhones, to be honest.


----------



## m3s

Covariance said:


> Nice deflection, but that doesn't change the inflation measure in the last 12 months. Anyone "paid" with it in the last year would have seen their purchasing power cut in half.


It's a cherry picked data point that goes against the long term trend

People aren't paying for anything with it. It's mostly used to store and transfer value. And yes this is what happens when central banks tighten monetary policy. Hence the term *"DONT FIGHT THE FED" *Central banks have all the power they want

I posted many times that I was risk off since last fall as I saw many warnings (mostly China which is still an issue) Everything is connected and if you think gold or oil or RE or BTC is your magic bullet then good luck with that

Difference is I understand both sides of the argument while most are one sided at best


----------



## MrBlackhill

m3s said:


> Cases mean nothing. 3.7k out of a million is practically nothing.
> 
> More people were impacted in Canada by the measures financially, mentally etc
> 
> If Canada got it right it would be very obvious.. but it's not at all


It's true that it's hard to tell the right balance.

Though I believe with 3x more cases and deaths our hospitals would've exploded, nurses and physicians would've went on burn out, people already in hospitals for other issues wouldn't be taken care of, population would be stressed out as they see so many people getting sick and so many people dying, so the mental health issues would also be present.

My parents live in a tiny village and yet their neighbour was a young family where the mother decided to kill herself because she was a physician working at emergencies and she was exhausted and couldn't bear the choices anymore of deciding who gets to be saved or not, who gets an ICU, a ventilator.

So it's hard to tell if all the issues created by lockdowns were better than all the issues created by having no lockdowns.

It's hard to know if it was a good decision, but it's also hard to know if it was a bad decision. Maybe there's some post-mortem studies who tried to evaluate all the complexity of the impacts of every decision, but it's still hard to contextualize.


----------



## m3s

MrBlackhill said:


> So it's hard to tell if all the issues created by lockdowns were better than all the issues created by having no lockdowns.
> 
> It's hard to know if it was a good decision, but it's also hard to know if it was a bad decision. Maybe there's some post-mortem studies who tried to evaluate all the complexity of the impacts of every decision, but it's still hard to contextualize.


I agree it was hard at the time to know how extreme to go

But we can already look at Florida and Texas and any other country that went far less extreme. They didn't all die and basically turned out the same. If covid is already in Canada does it makes sense not letting Canadians travel home. It's impossible to control things like this

From what I'm seeing Canadian health care is suffering far more than US. Especially considering Canadian health care professionals want to go work in the US instead.


----------



## KaeJS

m3s said:


> From what I'm seeing Canadian health care is suffering far more than US. Especially considering Canadian health care professionals want to go work in the US instead.


Who can blame them...


----------



## sags

“Moe” money as Sask announces a $500 inflation benefit. Alberta and Manitoba say they will announce something soon.

The old hypocritical Conservative ….do as I say and not as I do in action right there.









$500 tax credit cheques coming for Sask. residents this fall


The Government of Saskatchewan will be sending $500 "affordability" tax credit cheques to Saskatchewan residents 18 years and older this fall.




regina.ctvnews.ca


----------



## sags

Gee…..weren’t they just demanding more money from Trudeau for healthcare?


----------



## damian13ster

MrBlackhill said:


> Actually, you can, based on the most famous economics formula.
> 
> MV=PY
> 
> Where
> M is the money supply
> V is the velocity of money
> P is the price level
> Y is the real GDP
> 
> So you could increase the money supply while the velocity of money decreases faster and you'd have deflation. You could also increase the money supply while the real GDP increases faster and you'd have deflation.
> 
> During the pandemic, the velocity of money decreased sharply. It was hard to tell how to balance properly that equation.


It really wasn't. For anyone with half a brain cell it was evident that the velocity of money will come back as soon as it is not artificially interfered with by the government. So anyone with half a brain cell knew that increasing M will result in massive inflation.
Sadly current government of Canada doesn't have half a brain cell between all of them


----------



## MrBlackhill

damian13ster said:


> It really wasn't. For anyone with half a brain cell it was evident that the velocity of money will come back as soon as it is not artificially interfered with by the government. So anyone with half a brain cell knew that increasing M will result in massive inflation.
> Sadly current government of Canada doesn't have half a brain cell between all of them


Unemployment kept between 8% and 14% for a whole year even though interests rate was at 0%, what's your next move?


----------



## m3s

sags said:


> “Moe” money as Sask announces a $500 inflation benefit. Alberta and Manitoba say they will announce something soon.
> 
> The old hypocritical Conservative ….do as I say and not as I do in action right there.


Tax credits is how you get votes in a democracy. It's not sustainable

We need someone like Pierre in opposition to remind people of the consequences. I don't necessarily think he would do any better

You can't get votes doing the right thing. The future generations are the ones with the pain anyways


----------



## KaeJS

Well, fck.

If the other provinces are giving out $500, I better be getting my $500, too.


----------



## m3s

KaeJS said:


> Well, fck.
> 
> If the other provinces are giving out $500, I better be getting my $500, too.


$500 sounds like nothing to me now but I remember being a poor uni student when all the Albertan students got the $400 "prosperity" checks and blew it all on liquor and hoes the same night. Also those students had been studying in Ontario for years.



> In September 2005, Alberta Premier Ralph Klein announced in an open letter to Albertans that the province was expecting significant higher than expected revenue from energy royalties and the government would be creating a program to return a portion of the surplus to Albertans in the form of a one-time CA$400 payment sometime in January 2006.





> Ralph Bucks made it into national media after a handful of *non-Albertans came forward to admit they had received cheques to which they were not entitled*, prompting criticism from the Canadian Taxpayers Federation.


wiki


----------



## MrBlackhill

KaeJS said:


> If the other provinces are giving out $500, I better be getting my $500, too.


Our government in Quebec already did it this year to buy votes for the upcoming elections. They gave $500 to everybody making less than $100,000 *after-tax*, basically about 95% of taxpayers. Oh, and they'll give another $500 if they are re-elected. Talk about buying votes... Obviously, they are considered center-right, so they like doing such stupid things and giving back money to the rich instead of helping the poor. Our household make over $200,000 _pre-tax_ so both me and my wife each received $500. Thanks, we truly needed that... At least some reasonable people like us immediately gave it back to the poor, while others used it to buy a box of 12 bottles of wine and had an amazing weekend at their chalet in Mont-Tremblant.


----------



## sags

Not that I disagree the financial aid should be directed to low income folks, there is a method to their madness of giving it to a wider range of people.

It dampens the notion that government just takes their money and gives it to someone else (even though those people may need it more).

I also predicted this would happen and expect some announcement in future from the Trudeau government as well.

Governments are receiving more revenues than expected and have the option of reducing the deficit, distributing the cash, or a little bit of both.

I also predict that when the next election rolls around, the Trudeau government will announce they have surprise good news for Canadians, and the debt has tumbled down into the 30% of GDP range again (because the GDP is expanding). It has been the SOP for the Liberals in the past to overestimate the deficit and then announce good news that it is lower and they are doing a wonderful job of managing the economy.

It is the pea under the shell trick.......but it works.


----------



## damian13ster

MrBlackhill said:


> Unemployment kept between 8% and 14% for a whole year even though interests rate was at 0%, what's your next move?


Don't artificially create unemployment for the whole year.
The unemployment was nothing but political decision, same as money printing and massive inflation


----------



## sags

What happened to "hyperinflation" ?

Prices are coming down. Ag futures show the price of grain, corn, soybeans falling. Fuel prices are dropping.

Insurance costs are down. Our car insurance premium went down 25% this year alone.

Home prices are falling quickly. Retailers are unloading inventories at sales prices. Used car and collectibles prices have plummeted.

The Trudeau government plan to handle the economy worked to perfection.

Inflation was of "short duration" or "temporary"........which just happens to be the Merriam - Webster dictionary definition of "transitory".


----------



## m3s

sags said:


> What happened to "hyperinflation" ?
> 
> Prices are coming down. Ag futures show the price of grain, corn, soybeans falling. Fuel prices are dropping.
> 
> Insurance costs are down. Our car insurance premium went down 25% this year alone.
> 
> Home prices are falling quickly. Retailers are unloading inventories at sales prices. Used car and collectibles prices have plummeted.
> 
> The Trudeau government plan to handle the economy worked to perfection.
> 
> Inflation was of "short duration" or "temporary"........which just happens to be the Merriam - Webster dictionary definition of "transitory".


sags the whole point of rising interest rates was to stop inflation by cooling off demand. That's exactly what happened.

Trudeau had no plan to handle the economy at all - he said himself "forgive me if I don't think about monetary policy" Canada is just following the Fed's lead.

The Fed even admitted the inflation was not "short duration" or "temporary" which is why they aggressively raised the rate. You are clueless


----------



## sags

Interest rate hikes to normal levels were always on the table as the solution to prevent hyperinflation, even as some claimed the end was near and the monetary system is on the verge of collapse.

The crypto folks are the most vocal among among them and remain so today.

It is they who lack knowledge and understanding of economics.

It is not different this time. 

Crypto and austerity are wild eyed theories, representing nonviable solutions.


----------



## like_to_retire

sags said:


> Crypto and austerity are wild eyed theories, representing nonviable solutions.


I don't think crypto is a big player in the selection of the next Conservative leader or in the next election. The left picked up on this as a way to demonize Poilievre, but it's a waste of time attempting to make it an issue. They're grabbing at straws (as long as they're not plastic, because that would be bad).

ltr


----------



## m3s

sags said:


> Interest rate hikes to normal levels were always on the table as the solution to prevent hyperinflation, even as some claimed the end was near and the monetary system is on the verge of collapse.
> 
> The crypto folks are the most vocal among among them and remain so today.
> 
> It is they who lack knowledge and understanding of economics.
> 
> It is not different this time.
> 
> Crypto and austerity are wild eyed theories, representing nonviable solutions.


No saggy they delayed raising rates because they said inflation was transitory. When they had to raise rates this confirmed it was in fact not transitory

Pretty much everyone agrees including the central banks themselves that it was the wrong call to believe inflation was transitory. Your understanding is very flawed. Prices are coming down now due to demand destruction from aggressive interest rate hikes by central banks. If you knew better than all these people where is the money and gains to show for it

You get your information from people like Jim Cramer - was recently shown that you'd do better doing the exact opposite of what CNBC entertainer Jimmy Cramer says


----------



## londoncalling

m3s said:


> Tax credits is how you get votes in a democracy. It's not sustainable
> 
> We need someone like Pierre in opposition to remind people of the consequences. I don't necessarily think he would do any better
> 
> You can't get votes doing the right thing. The future generations are the ones with the pain anyways



Oddly enough there is a by election coming up in the previous Opposition Leader's former riding. That election was a close race. Not sure it will be the same this time around but who knows. Doubt it's worth $45 000 000 to secure the seat when they have a large majority and popular support. Our household will be happy to get some of our tax money back but this money could have been better utilized to help starving students or replace the cuts to healthcare and education, grants for new businesses in the province, or many many other things. Moe money Moe problems.  At least people can't say the government ignored rising inflation and its resource windfall. Now I remember why I didn't run for office. You can't even escape criticism when you give people money.


----------



## MrBlackhill

londoncalling said:


> You can't even escape criticism when you give people money.


Yup.

There will always be people who are unhappy; you can't make everyone happy.
There will always be people who keep seeing the glass half empty.
There will always be people who criticize the decisions others made but they wouldn't have the guts to step up and make those decisions themselves and bear the consequences.


----------



## james4beach

like_to_retire said:


> I don't think crypto is a big player in the selection of the next Conservative leader or in the next election.


Is PP still talking about wacky crypto stuff these days? Or has he given up on it because the popular hype has died down?


----------



## m3s

james4beach said:


> Is PP still talking about wacky crypto stuff these days? Or has he given up on it because the popular hype has died down?


He says you should be free to buy it

Most provinces have limited Canadians to $30k/year now except for the top 4 that come up on a google search (very out dated cryptos). Meanwhile signapore/europe/gb/aus have already upgraded to ISO 20022 banking standards that includes more advanced cryptos and companies like Samsung are getting into crypto

Canada has gone so far backwards considering how quickly we adopted the internet in the 90s. Grandma won't get it and jame4beach might buy the top on fomo alone but don't ban everyone who isn't j4b or grandma. Not everyone needs to be protected from themselves in this nanny state

Freedoms are being eroded because some people are dumb


----------



## sags

Crypto not good

Pierre not good.

Silly Willy buy crypto or vote Pierre.


----------



## m3s

Boomers are losing plasticity to understand new concepts

Same thing happened to my grandma who could barely understand caller ID and voice mails let alone email or online banking

The world will move on long after the boomers are done complaining about everything that is new


----------



## Gator13

m3s said:


> Boomers are losing plasticity to understand new concepts
> 
> Same thing happened to my grandma who could barely understand caller ID and voice mails let alone email or online banking
> 
> The world will move on long after the boomers are done complaining about everything that is new


You might want to reflect on your ongoing negative comments regarding boomers. Your comments are a classic example of ageism. Everyone ages. Just sayin'


----------



## m3s

Gator13 said:


> You might want to reflect on your ongoing negative comments regarding boomers. Your comments are a classic example of ageism. Everyone ages. Just sayin'


Boomers might want to reflect on how they practically wrote the book on every kind of ism there is known to date

Most people lose tolerance for change as they age. If this offends you maybe you should reflect about what boomers say about millennials and every other generalization they spouted for decades especially how they normalized mistreatment of minorities, women, anyone who was slightly different in any way

The irony is how sensitive the people are who spent their lives criticizing everyone else. Boomers can dish it out but can't take it


----------



## Gator13

^ Yikes.


----------



## AltaRed

Gator13 said:


> ^ Yikes.


There is considerable hate and resentment there. One way to deal with that hostility is with an 'ignore'. Of the 11 members I have on 'ignore', 5 of them have been banned from the forum, and another 3-4 of them apparently have not posted for quite some time.


----------



## m3s

AltaRed said:


> Of the 11 members I have on 'ignore', 5 of them have been banned from the forum, and another 3-4 of them apparently have not posted for quite some time.


Most of the members that added value have not posted for quite some time because we let the village idiots think they are adding anything

So I guess enjoy reading nothing but sags and beav "insight" from now on. There's about half a dozen active members left at best


----------



## Eclectic21

m3s said:


> ... maybe you should reflect about what boomers say about millennials and every other generalization they spouted for decades especially how they normalized mistreatment of minorities, women, anyone who was slightly different in any way ...


Really?
How's this work? Those before boomers did none of these things, taught the boomers and the boomers did their own thing?

I can find lots of examples from before the boomers with far worse consequences than spouted generalizations and with isms being in full force. I've also heard pre-boomers making similar complaints about boomers (or read it in their letters/diaries).

It seems more complicated than your generalization about boomers.


Cheers


----------



## Beaver101

Gator13 said:


> You might want to reflect on your ongoing negative comments regarding boomers. Your comments are a classic example of ageism. Everyone ages. Just sayin'


 ... I kept reminding him of that - his discrimination of ageism but then it evolved into hostility. Not only with ageism but gender ... god knows what else. Just a matter of time before the onion gets peeled naked full of hate.


----------



## Beaver101

m3s said:


> Most of the members that added value have not posted for quite some time because we let the village idiots think they are adding anything
> 
> So I guess enjoy reading nothing but sags and beav "insight" from now on. There's about half a dozen active members left at best


 ... then why are you still staying in this "village"? Do you want another repeat of MP's post, specifically for you, where he grabbed you by the throat?


----------



## m3s

Eclectic21 said:


> It seems more complicated than your generalization about boomers.


Of course it is

Boomers are a sacred cow that can't handle the mildest criticism that isn't even directed at them - such as old people losing plasticity for new concepts. Boomers are fine with making all kinds of generalization about millennials and anyone else that wasn't part of their large group. This is shown by how easily offended they are by the slightest criticism

The largest and wealthiest groups are perfectly fine with constantly looking down and belittling other groups but can't take it because they never had to


----------



## Beaver101

Eclectic21 said:


> Really?
> How's this work? Those before boomers did none of these things, taught the boomers and the boomers did their own thing?
> 
> I can find lots of examples from before the boomers with far worse consequences than spouted generalizations and with isms being in full force. I've also heard pre-boomers making similar complaints about boomers (or read it in their letters/diaries).
> 
> It seems more complicated than your generalization about boomers.
> 
> 
> Cheers


 ... you see - m3s as a "millennial*" thinks he's immortal.

* Should add "SPECIAL".

Strangely enough he doesn't refute MrMatt's claim that he (MrMatt) is NOT a boomer and neither is his mother (parents).

Hmmm....he stated he was in his 40s ... pick 45 years old. That would make him born in the year 1977 and with the last designated year of a boomer being of 1964 - that would make his mother at 13 years old giving birth to him. That's either an amazing feat or can't be right.

Then let's go with the 40 to 50 years age range - this would make his mother giving him birth at either age 8 or 18. And dollars for donuts say his mother wouldn't have given him birth at age 18 either. So basically MrMatt is a LIAR claiming his parents weren't boomers.

Hey, I get it if you don't want to be associated with being a boomer or all their the bad stuffs (in your eyes) but then you can't deny your parents ain't boomers. And what does this mean in the end- you must really HATE your parents to spew negatively about boomers.


----------



## Beaver101

m3s said:


> Of course it is
> 
> Boomers are a sacred cow that can't handle the mildest criticism that isn't even directed at them - such as old people losing plasticity for new concepts. Boomers are fine with making all kinds of generalization about millennials and anyone else that wasn't part of their large group. This is shown by how easily offended they are by the slightest criticism
> 
> The largest and wealthiest groups are perfectly fine with constantly looking down and belittling other groups but can't take it because they never had to


 ... sure sure sure, talking from the other side of your mouth making an attempt to defuse the boomers generalization. Just admit you "HATE boomers".

How about this, doing you a favour. Just admit you hate "sags" as a "boomer", you hate "beaver101" too (late late boomer) 'cause we (both sags and I plus others which I'm not pulling in) don't agree with you on crypto so that makes you so lovable as a "SPECIAL" "millennial", right?

Btw, crypto is gonna crash, just a matter of time.  But then it's okay since you'll be on this earth FOREVER.


----------



## Gator13

m3s, I commented on your constant discriminatory remarks towards boomers and I am not a boomer. You are doing the exact thing you chastise the boomers of doing. It's so counter productive to moving away from stereo-typing generations. Your comments on crypto and other topics are great. A different perspective which is always good.


----------



## m3s

Beaver101 said:


> ... you see - m3s as a "millennial" thinks he's immortal.
> 
> Strangely enough he doesn't refute MrMatt's claim that he (MrMatt) is NOT a boomer and neither is his mother (parents).
> 
> Hmmm....he stated he was in his 40s ... pick 45 years old. That would make him born in the year 1977 and with the last designated year of a boomer being of 1964 - that would make his mother at 13 years old giving birth to him. That's either an amazing feat or can't be right.
> 
> Then let's go with the 40 to 50 years age range - this would make his mother giving him birth at either age 8 or 18. And dollars for donuts say his mother wouldn't have given him birth at age 18 either. So basically MrMatt is a LIAR claiming his parents weren't boomers.
> 
> Hey, I get it if you don't want to be associated with being a boomer or all their the bad stuffs (in your eyes) but then you can't deny your parents ain't boomers. And what does this mean in the end- you must really HATE your parents to spew negatively about boomers.


If @KaeJS calls someone a cow it doesn't mean they are a literal cow. It's probably a difficult concept for you to understand

Like I said my grandmother didn't understand the internet. If that offends you you probably need to go for a walk


----------



## m3s

Beaver101 said:


> ... sure sure sure, talking from the other side of your mouth making an attempt to defuse the boomers generalization. Just admit you "HATE boomers".
> 
> How about this, doing you a favour. Just admit you hate "sags" as a "boomer", you hate "beaver101" too (late late boomer) 'cause we (both sags and I plus others which I'm not pulling in) don't agree with you on crypto so that makes you so lovable as a "SPECIAL" "millennial", right?
> 
> Btw, crypto is gonna crash, just a matter of time. But then it's okay since you'll be on this earth FOREVER.


I don't hate my grandmother for not understanding the internet at all

I don't hate sags for not understanding crypto. I'm pointing out that if my grandmother had no idea how the internet worked why would she waste her time telling everyone that uses the internet it that it was going to crash in a matter of time because she heard about the dot com crash on the news she watched everyday that was owned by the company threatened by disruption

Even though I sold most of it last fall and understand that the dot com bubble wasn't the end of the internet. Difficult concept for you I know


----------



## Beaver101

m3s said:


> If @KaeJS calls someone a cow it doesn't mean they are a literal cow. It's probably a difficult concept for you to understand


 ... just as a difficult concept for him AND YOU to understand that your mother, grandmothers, great-grandmothers and entire female ancestry were cows. "Cause they moo you all day. I don't nag - I use colourful languages when bullied.



> Like I said my grandmother didn't understand the internet. If that offends you you probably need to go for a walk


 ... why would I be offended as I'm replying to you via the internet? Are ageims/gender discriminations a natural for you - because that's becoming very apparent.


----------



## Beaver101

m3s said:


> I don't hate my grandmother for not understanding the internet at all


 ... sure sure sure.



> I don't hate sags for not understanding crypto. I'm pointing out that if my grandmother had no idea how the internet worked why would she waste her time telling everyone that uses the internet it that it was going to crash in a matter of time because she heard about the dot com crash on the news she watched everyday that was owned by the company threatened by disruption


 ... then why bring up your "grandmother" analogy? Why not your grandpa instead?



> Even though I sold most of it last fall and understand that the dot com bubble wasn't the end of the internet. Difficult concept for you I know


 ... I give a sh1t you sold or not because anything that comes out from your mouth is full of it. Sag's title for the thread "Crypto maybe (I would change that to IT IS) a scam" is spot on. And it's obvious now as crypto-"expert " aka crypto-pusher is a scammer when you got out. Feel better now with the truth?


----------



## londoncalling

Beaver101 said:


> ... you see - m3s as a "millennial*" thinks he's immortal.
> 
> * Should add "SPECIAL".
> 
> Strangely enough he doesn't refute MrMatt's claim that he (MrMatt) is NOT a boomer and neither is his mother (parents).
> 
> Hmmm....he stated he was in his 40s ... pick 45 years old. That would make him born in the year 1977 and with the last designated year of a boomer being of 1964 - that would make his mother at 13 years old giving birth to him. That's either an amazing feat or can't be right.
> 
> Then let's go with the 40 to 50 years age range - this would make his mother giving him birth at either age 8 or 18. And dollars for donuts say his mother wouldn't have given him birth at age 18 either. So basically MrMatt is a LIAR claiming his parents weren't boomers.
> 
> Hey, I get it if you don't want to be associated with being a boomer or all their the bad stuffs (in your eyes) but then you can't deny your parents ain't boomers. And what does this mean in the end- you must really HATE your parents to spew negatively about boomers.


I am a Gen X in my mid 40s and my parents were born during the Great depression. My oldest siblings are boomers. All of us have biases based on our demographic and experience. So it is possible that Matt's parents are not boomers and are part of the silent generation.

We should all try to strive to understand each other without judgement. I know that is not the typical modus operandi of a forum board. 

Also not sure what any of this banter has to do with inflation.


----------



## marina628

james4beach said:


> Is PP still talking about wacky crypto stuff these days? Or has he given up on it because the popular hype has died down?


James as you know I love playing poker online. A big poker room just changed from Bitcoin to tether as of Sept 1 and a few other casinos are jumping OFF BITCOIN .I wonder what will happen with bitcoin as buying .selling getting paid with bitcoin for 12 years now I have seen bitcoin surge when one group pays their 6000 affiliates and these affiliate move their coins around. I know a guy who makes easy 2 million a month all getting paid with bitcoin so no idea full dollar value this huge group has and there are hundreds of other casino/poker rooms in the bitcoin space. I made alot of money with bitcoin but can get upset losing 40 bux while i sleep these days lol .I have $xxx,xxx in profits on the books this year for my business from holding bitcoin and finally paying the taxes on the gains so bitcoin has been good but as I said i started 12 years ago. People like me paying 1200 -$5000 a coin still can relax but I feel these who jumped in at 50k may never see that number again .When casino rooms are complaining about instability of bitcoin and switching to Tether it makes me wonder what the future will be in coming months.


----------



## Beaver101

londoncalling said:


> I am a Gen X in my mid 40s and my parents were born during the Great depression. My oldest siblings are boomers. All of us have biases based on our demographic and experience. So it is possible that Matt's parents are not boomers and are part of the silent generation.


 ... MrMatt didn't state his parents were of the "silent GEN". He just stated his parents weren't boomers when "boomers" were criticized. of course, we have our biases but to generalize an entire demographic tells me how arrogant and rude the poster is. To top off that ageism and gender discrimination really takes the cake. Don't take my word for it - see Gater13's (an anonymous non-boomer) point out.



> We should all try to strive to understand each other without judgement. I know that is not the typical modus operandi of a forum board.


 ... and so it's isn't the m.o. of a forum board because not only m3s started it - he keeps badgering on it like his entire life is the boomers' fault.

If he doesn't like the opinion or hear that crypto-currency is going down, then I can't help him just as I can't help it if he keeps spinning that crypto-currency is gonna to make everyone rich. Everyone has the right to their opinion but it is him who can't take criticisms and then go on insulting everyone else with gens generalization (with outright age/gender discriminations), then names calling and more false spewings. 



> Also not sure what any of this banter has to do with inflation.


 ... that's because m3s keeps attacking sags' POV that inflation is good for GICs.


----------



## m3s

marina628 said:


> James as you know I love playing poker online. A big poker room just changed from Bitcoin to tether as of Sept 1 and a few other casinos are jumping OFF BITCOIN .I wonder what will happen with bitcoin as buying .selling getting paid with bitcoin for 12 years now I have seen bitcoin surge when one group pays their 6000 affiliates and these affiliate move their coins around. I know a guy who makes easy 2 million a month all getting paid with bitcoin so no idea full dollar value this huge group has and there are hundreds of other casino/poker rooms in the bitcoin space. I made alot of money with bitcoin but can get upset losing 40 bux while i sleep these days lol .I have $xxx,xxx in profits on the books this year for my business from holding bitcoin and finally paying the taxes on the gains so bitcoin has been good but as I said i started 12 years ago. People like me paying 1200 -$5000 a coin still can relax but I feel these who jumped in at 50k may never see that number again .When casino rooms are complaining about instability of bitcoin and switching to Tether it makes me wonder what the future will be in coming months.


Odd they're switching to tether now

USD pegged stablecoins (ERC-20 tokens that reside on EVM chains such as ethereum and ethereum based chains/layers) have had the most volume and liquidity since they came out. Ethereum is about to switch to PoS and likely about to flip BTC as the most dominant chain in marketcap, volume, liquidity, capital efficiencies etc

But tether is in decline and most defi prefer USDC now. USDC is close to flip tether in market cap and volume and will be used by banks, Visa/MC etc


----------



## londoncalling

Any discrimination is not helpful to generate positive discussion. I hold a similar opinion as provided by @Gator13 in post
#1140. I am sure a lot of the disrespectful commentary and discussion posted on CMF by several members does turn a lot of readers away. This is unfortunate as there are a lot of great helpful posts and resources. I see these types of comments as a distraction at best. If I am in a less tolerant mood I consider it a waste of time. I liken it to my daily commute. Sometimes the ride is enjoyable and adds value to my day. At other times it takes awhile to get where I am going.


----------



## Eclectic21

m3s said:


> Of course it is ...


You seemingly agree that it's more complicated than your generalization but then seemingly say boomers can dish it out but can't take it "because they never had to".

If the 2,500 years of older generations criticizing the younger generations does not matter to you, I've sat through "the greatest generation" lambasting boomers (sometimes their children and sometimes neighbour's children).


Here's one from 1 BC ... "Our sires’ age was worse than our grandsires’. We, their sons, are more worthless than they; so in our turn we shall give the world a progeny yet more corrupt."


Boomers are the source of boomer's mistakes/evils where many existed before the boomers. 


Cheers


----------



## james4beach

marina628 said:


> When casino rooms are complaining about instability of bitcoin and switching to Tether it makes me wonder what the future will be in coming months.


This may be a dumb question, but why don't they use real dollars (or Euros) on these platforms? Why are they so hooked on coinz?

Is it because they're off shore casinos that don't follow US or European regulations?


----------



## m3s

james4beach said:


> This may be a dumb question, but why don't they use real dollars (or Euros) on these platforms? Why are they so hooked on coinz?
> 
> Is it because they're off shore casinos that don't follow US or European regulations?


I believe all the banks agreed to ban online gambling since the government controls and profits from a monopoly on gambling. Online gambling is illegal in most states

@marina628 would know more about it than I. Personally I believe people should be allowed to gamble if they want just like they should be allowed to marry who they want and consume recreational drugs they want

A bit of nanny state is ok to protect the morons from themselves but the vast majority of people are capable of making decisions for themselves without hurting others


----------



## sags

Casinos are a favorite way to launder money. Crypto provides anonymity and the opportunity to wash the coins further at a mixer exchange.

Money laundering is bad enough in licensed casinos, including the charity casinos in BC and Ontario.

Money laundering, tax evasion, sanction evasion, sends people to poorly regulated offshore casinos.









BC Liberal Government Roasted in Money Laundering Report | The Tyee


Failure to act on years of warnings allowed billions to be laundered in the province.




thetyee.ca







https://www.nvbar.org/wp-content/uploads/23-Promises-and-Pitfalls-of-Cryptocurrency.pdf


----------



## m3s

Ah yes the boomer witch hunt

"I don't understand it so it all must be evil" because the mainstream media said so

Meanwhile the panama papers and unmarked graves are forgiven


----------



## Beaver101

Bank of Canada takes to Twitter to set record straight on 'printing money' claim

LOL!!!! .... the loud-mouth attempts attempt is like to get BoC to start mining for cryptos - crash & burn baby!


----------



## m3s

Beaver101 said:


> Bank of Canada takes to Twitter to set record straight on 'printing money' claim
> 
> LOL!!!! .... the loud-mouth attempts attempt is like to get BoC to start mining for cryptos - crash & burn baby!


They didn't physically print money because it's even easier to just add digital liquidity as most money is just digital numbers in a central privatized server

A physical bill costs something like $6 to print, probably more like $10-20 now with inflation thanks to all that "money" printing. Cash is also mostly used for fraud and untraced money laundering that saggy thinks is crypto which is far easier to trace. It doesn't make sense to print more of that dirty money

Printing cash is not literal printing cash. Once again if I call someone a hot dog you can write a literal article about how you aren't a literal hot dog.. and maybe there's another meaning for the word on the street like there are for most words. Hint even boomers doesn't refer to literal boomers anymore

Most language is not literal and changes overtime. Older folks understand less and less of how people speak over time. I don't even understand the zoomers


----------



## Gator13

A new study published by the Fraser Institute found the government sector accounted for 86.7% of all new jobs created in Canada since the pandemic started in 2020. (February 2020 to July 2022.)


----------



## m3s

Gator13 said:


> A new study published by the Fraser Institute found the government sector accounted for 86.7% of all new jobs created in Canada since the pandemic started in 2020. (February 2020 to July 2022.)


Need more people to pick up the slack when 86% of the government is working from home

Just print some more fiat


----------



## Gator13

^ Agreed.

We don't have a revenue problem, we have a spending problem.


----------



## MrMatt

Gator13 said:


> A new study published by the Fraser Institute found the government sector accounted for 86.7% of all new jobs created in Canada since the pandemic started in 2020. (February 2020 to July 2022.)


What do you think they spent half a trillion dollars on?


----------



## Gator13

Circa 2019. Canada was 11th....probably higher now.

Share of people employed in government by country 2019 | Statista


----------



## m3s

Well the US said they will add like 90k people to the IRS

To put 90k people in perspective the Canadian military is under 70k. That tells me all I need to know about where the west is headed.

The US was created to get away from high taxes lol


----------



## james4beach

The government is a huge source of employment in the US.

For example they will pump about $900 billion into the defense industry next year. That employs all the military, and reservists, and countless other defense contractors and the companies which supply them as well.

American jobs are heavily dependent on government. All that defense industry stuff is labelled "private industry" but only exists due to government spending. Much of the scientific and R&D industry is also government funded, when you trace where the money comes from.

And guess what... they boosted the defense budget, which is inflationary too.


----------



## m3s

james4beach said:


> The government is a huge source of employment in the US.
> 
> For example they will pump about $900 billion into the defense industry next year. That employs all the military, and reservists, and countless other defense contractors and the companies which supply them as well.
> 
> American jobs are heavily dependent on government. All that defense industry stuff is labelled "private industry" but only exists due to government spending. Much of the scientific and R&D industry is also government funded, when you trace where the money comes from.
> 
> And guess what... they boosted the defense budget, which is inflationary too.


Must be nice to be the world reserve currency

Now they stopped printing USD and currencies and liquidity is collapsing around the world

It's extremely powerful tool that impacts our financial sovereignty at this point


----------



## sags

Teachers, doctors, nurses, municipal workers, prisons, lawyers, accountants, real estate sales, social benefits admistration, air traffic controllers, inspectors of everything, border guards, police, intelligence agencies, research and development, military, politicians, lab techs, investigators, judges, prosecutors, legal aid defense lawyers, court staff, custodians, maintenance, social workers, probation officers, mental health support staff, coroners, infrastructure maintenance workers, landfill site workers, Coast guard, conservation officers, bylaw officers,......and on and on and on.

It is good Canada employs so many people. It reflects Canada as a healthy, safe, secure, economically advanced country.

Countries that don't fill all those "government" sponsored positions and leave them vacant are often lousy places to live.


----------



## sags

Want to see what a lack of funding and government services looks like.........here is one example and there are plenty more all over the US and world.


----------



## m3s

Germany will print (not literal for the boomers) 65B to fight inflation 🤦‍♂️ 

Coincidentally Germany suffered hyperinflation exactly 100 years ago

Scholz promises 65 bln euros to shield Germans through tough winter

Scholz was born in the 50s as expected. 4th turning is happening


----------



## m3s

sags said:


> Want to see what a lack of funding and government services looks like.........here is one example and there are plenty more all over the US and world.


Spending too much also causes this eventually

You can only print fiat to solve your problems for so long. Just like you can only rack up credit card debt for so long

Which is why Canada is bringing in as many immigrants as possible even though the houses and services don't exist


----------



## sags

Canadian federal and Provincial governments are reporting surpluses, so I don't know why some people stay on the "printing money" hamster wheel.

The BOC doesn't print money. They exchange credit to the major lenders in exchange for asset backed bonds.

It is referred to as quantitative easing and keeps interbank global credit flowing. It is "zero sum" finance as the collateral assets match the loans.

While holding the bonds, the BOC collects the interest and turns it over to the Department of Finance.

Someone like Pierre P. needs to take macro-economics courses if he intends on firing the governor and taking over the operations of the BOC.


----------



## Mukhang pera

Meanwhile, back at the ranch, I am learning to ride a camel.









Mouna on TikTok


Mouna's short video with ♬ Babel（DJ版）




www.tiktok.com


----------



## m3s

sags said:


> The BOC doesn't print money. They exchange credit to the major lenders in exchange for asset backed bonds.
> 
> It is referred to as quantitative easing and keeps interbank global credit flowing. It is "zero sum" finance as the collateral assets match the loans.


Quantitative easing = printing money. 99% of language is not literal

Will your son ride a Land Rover or a camel? You have said your son will not own a home due to runaway inflation and you also don't own a home so..

The camel does not need to be literal either. Maybe a moose or a horse or a chinese made EV?


----------



## sags

Home prices are not examples of inflation, any more than cabbage patch dolls or crypto were examples of inflation.

They are examples of bubbles created by the FOMO mania.

Boomers.......been there and seen that many times before.

The reversion to the mean will be financially painful for some but they will survive and learn from the experience.


----------



## sags

As Dubai returns to pre-oil economics, Canada will emerge as an economic superpower.

Few countries are as blessed as Canada with an abundance of land, resources, and a low population.

The future is bright and our best days are still to come. Always forward......never back.


----------



## m3s

sags said:


> Boomers.......been there and seen that many times before.
> 
> The reversion to the mean will be financially painful for some but they will survive and learn from the experience.


Is that why you sold your house before the RE boom?

Boomers won't be around to witness the outcome of their poor decisions.

4th turning is here and the easy times enjoyed by boomers are gone


----------



## sags

Yea , we sold 15 years too early.

We should have known homes would start doubling every couple of years if we just waited.

What were we thinking 🤔


----------



## sags

The 4rh turning depends on Jupiter and Mars double alignment during the equinox casting extended shadows on the far side of the moon…..so there is that consideration also.


----------



## sags

A religious sect determined by calculations based on Biblical prophecies and past world events that the world would end on October 22, 1844 with the second coming of Christ.

It was a theory that attracted a very large group of followers globally who sold all their worldly possessions and gathered in groups together to await the big day.

They all ended up homeless and broke.

Just saying… there are projections and then there are projections.

It is known as “the great disappointment” which is likely an understatement.

Sounds like the “4th turning” to me.





__





Loading…






en.m.wikipedia.org


----------



## m3s

sags said:


> Sounds like the “4th turning” to me.


Not the same at all

Not worth explaining to you as you have shown zero ability to consider new ideas

It's a personality type I know


----------



## sags

A great read from Garth Turner's blog.

The numbers are shocking and there is a lot of financial pain coming for those who borrowed a lot of money.

_Crusty old suburban mortgage broker dude Ron Butler did some math Wednesday afternoon. That was after the central bank raised rates for the fifth time, taking its benchmark from one quarter of one per cent (Covid money) to 3.25% on its way to, oh, 4% maybe.

Enough with talk of monetary policy, Butler said. “Let’s do some math with real life situations.”

*Example: a home equity line of credit (HELOC) for three hundred grand on which the owner makes interest-only payments (like most people). In March that monthly was $733. This week it rose to $1,469. Ouch.*

“It’s the pure double I have posted about,” the veteran lender said. “**** got real today for HELOC holders.”

By the way, Canadians now have $170 billion in HELOC debt, virtually all of it at floating rates. A significant amount of the money was borrowed against inflated residential equity (now deflating) to buy ‘investment’ rental real estate, or squeeze out downpayment cash for Junior. Yes, real estate financing more real estate, creating a ballooned family exposure to one asset class. And now higher rates challenge it all._






__





Getting real — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate







www.greaterfool.ca


----------



## sags

Our last home back in 2005 we owed around $200k mortgage at 8% interest. If I remember correctly, we were paying about $1400 a month PIT.

I find it shocking that people could borrow $300K and only pay $733 a month. No wonder people were piling into homes.

The 8% interest rate we were paying was the lowest we had paid since buying our first home in 1979 at 19% interest. 

Mortgage interest rates have a long ways to go up yet.


----------



## Beaver101

^ That's because there's "gold" at the end of the RE rainbow for RE investors, flippers, landlords (like JAG), and them followers/wannabees, etc. 

Good news is the job market is strong with employees being able to command the wages they want ... or they what think they are worth, $$$,$$$,$$$.


----------



## m3s

sags said:


> Mortgage interest rates have a long ways to go up yet.


I agree rates should be higher

Low rates punish responsible savers. But now that we've had low rates for a decade we'd have to absolutely destroy everybody with a mortgage to bring those rates back

Problem is the government and businesses all enjoy low rates. Now young people are priced out


----------



## james4beach

sags said:


> _By the way, Canadians now have $170 billion in HELOC debt, virtually all of it at floating rates. A significant amount of the money was borrowed against inflated residential equity (now deflating) to buy ‘investment’ rental real estate, or squeeze out downpayment cash for Junior. Yes, real estate financing more real estate, creating a ballooned family exposure to one asset class. And now higher rates challenge it all._


When I first learned about people borrowing downpayment money on HELOCs, I told a few friends, who didn't believe that such a thing was possible.

This kind of insanity has become normalized over the last 13 years. It's the near-zero rates which fuelled this housing insanity.

The BoC rate isn't high yet, so it's kind of funny to hear all the dramatic talk. Peoples' behaviours might not even change until a policy rate of 4% or 5%. The current 3.25% rate is still very low.

Show me 4% and I'll be impressed, and people might start changing their behaviours. But today's rate near 3% is little more than an irritation, won't put an end to the debt addiction.


This is an old chart. Current rate is 3.25%


----------



## Eclectic21

sags said:


> A great read from Garth Turner's blog.
> The numbers are shocking and there is a lot of financial pain coming for those who borrowed a lot of money ...


Sure ... but then again, as is usual for GT's blog claims - some of the claims look like exaggerations, at best.

For example, if it's really a significant amount off the HELOC debt where RE is financing more RE, why doesn't this use make the list in surveys that cover what funds were used for? 

With home renos at 43% then debt consolidation at 30% - that's 73% that could be switched to a more conventional loan. Not ideal but hardly the "RE financing RE" house of cards that is being claimed.


Why's $300K of HELOC debt used for illustration when 10% of those with a HELOC balance say their balance is over $100K while another 10% says it's between $50K to $100K? Perhaps GT and his source like the doom and gloom shock value?


There's definitely going to be pain for those who planned for perpetual low interest rates and/or have over extended themselves.


Cheers


----------



## andrewf

damian13ster said:


> The problem is that destroying food production is now official government policy so food inflation will be here for a while, and is currently double-digits


This is story-based analysis. There are no policies in effect currently that would affect food production. There were proposed rules on fertilizer use, but those cannot yet have had any impact. 

Food inflation is not driven by Canadian domestic policy. Commodities are a global market. Two of the largest grain producers in the world are at war or under sanctions, as well as the world's largest supplier of fertilizers. There are droughts and heat waves in NA and Europe affecting livestock.


----------



## andrewf

Money172375 said:


> No help to my most of my neighbours who use propane for heat. They were paying $0.499 /L just 18 months ago. They’re all getting letters this week to say the next fill up will be at $0.839. I have a heat pump with elec backup. I should be well ahead of them as I was nearly equal to them when propane was 49.9
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Canadian propane costs soar due to supply chain issues
> 
> 
> Canadian homeowners who use propane to heat their homes will have to pay a lot more to stay warm this winter.
> 
> 
> 
> 
> toronto.ctvnews.ca


I think minisplits will become quite popular, even if you retain fossil fuel heat for coldest nights. I hear it's already quite difficult to buy/install a heat pump these days.


----------



## MrBlackhill

james4beach said:


> The BoC rate isn't high yet, so it's kind of funny to hear all the dramatic talk.


Dramatic talk because you have to look at it relative to reference.

When rates rise from 8% to 12%, that's 50% more in interests payments. When rates rise from 2% to 4%, that's double the interests payments.

When rates are low, it's super risky, because asset prices rise so you have to take on more debt and then whenever the rates start rising back higher, the cost of that huge debt rises super fast.


----------



## londoncalling

I believe the latest rate hike results in notices being sent to many variable mortgage rate holders that they will now need to increase payments to cover the additional interest. I do not know for sure but there has been a lot of commentary regarding the change from analysts, economists and podcasters. If that is the case, most will be able to manage the increased payments with changes in spending habits. Those on fixed terms will not notice any difference until its time to renew. Inflation and interest rates will affect everyone a bit differently. Those on colad pensions will see little effect. those on fixed incomes whether working or retired will lose ground. Those who benefited the most by leverage in the low rate environment now have to pay more. Some will still make out well as the gains were substantial. Others who over extended or come to the party late will not be ok. That is how it always goes. Wash. Rinse. Repeat.


----------



## Eclectic21

YMMV ... a friend who has a variable rate mortgage says that one type of variable rate mortgage will result in payment increases as the interest rate increases while another will keep the payments flat but increase the amortization.

Lots of variables to the mortgage puzzle. 


Cheers


----------



## damian13ster

andrewf said:


> This is story-based analysis. There are no policies in effect currently that would affect food production. There were proposed rules on fertilizer use, but those cannot yet have had any impact.
> 
> Food inflation is not driven by Canadian domestic policy. Commodities are a global market. Two of the largest grain producers in the world are at war or under sanctions, as well as the world's largest supplier of fertilizers. There are droughts and heat waves in NA and Europe affecting livestock.


I think you don't appreciate how interconnected everything is.

Carbon tax directly increases prices in Canada. Lack of Energy East affects fertilizer and food prices worldwide


----------



## james4beach

MrBlackhill said:


> When rates are low, it's super risky, because asset prices rise so you have to take on more debt and then whenever the rates start rising back higher, the cost of that huge debt rises super fast.


Well then the Bank of Canada was incredibly reckless to keep rates near zero for 13 years.

Many of us criticized this practice for a long time. It was obviously going to lead to problems, especially with debt-addicted consumers and mortgages.

I still wouldn't be surprised to see the BoC cut rates back down to 1% before we know it. If there's one thing these economists love, it's inflating real estate.

These economists / central bankers have been aggressively encouraging borrowing and leveraging for 35 years so I have trouble believing that they will change their ways now.


----------



## MrBlackhill

james4beach said:


> Well then the Bank of Canada was incredibly reckless to keep rates near zero for 13 years.


Not only BoC though. Most of developed countries did the same. I guess that's how they kept pace in this competitive world?

I simply wanted to add this little observation before someone comes in and points out how BoC is doing a bad job. All central banks did the same bad job. I guess they had no other choice considering world economy and competitiveness?

Canada, US, UK, Australia, New Zealand, Germany, France, Switzerland, Netherlands, Norway, Finland, Denmark, Sweden, etc... They all did the same.


----------



## AltaRed

It is easy in 20-20 hindsight to see how central banks erred last year but before that, what else were they to do the past ~10 years when there was essentially zero (<2%) inflation? Raise rates and risk deflation? There are no tools to correct deflation if interest rates were already almost zero. Deflation is a very ugly beast once it sets in. It would have been far more reckless to raise rates AND get deflation.

Low rates for so long did result in asset inflation, both in the capital and real estate markets, that benefited those with assets/financial resources to begin with the most, but the lack of inflation and CPI increases also helped the consumer pay the bills.

So they got it wrong starting perhaps mid-2021 or certainly by 3Q2021 but I think it is malicious to say they got it wrong for the last 13 years or so.


----------



## Synergy

james4beach said:


> I still wouldn't be surprised to see the BoC cut rates back down to 1% before we know it. If there's one thing these economists love, it's inflating real estate.


Just enough time to lock in some GIC's and hopefully pick up some real estate for cheap! I think it's going to take 2-3 years+ before we start to see rates dropping.

Homes that sold for 600-900k back in 2015 are still setting for 1.5-2.3 million in my neck the woods.


----------



## londoncalling

Even with the current drop real estate is still above historical rates. Anyone who bought real estate since 2008 has seen great returns. We may see further drops but does anyone expect prices to fall to what they were in 2015? I think buyers would create a floor well in advance of those levels. I also think government interference would prevent the collapse of such a big part of the Canadian economy. I do not wish ill will on anyone but I am looking at purchasing a second property for when the offspring leaves home. Not sure if it will be for us or for the child. If the drop in real estate continues and rates start to drop in the next few years it may present a great opportunity.


----------



## Synergy

^ I don't anticipate a crash in price back to those levels. I know some people that have missed out on the market over the past 10-15 yrs as they have been anticipating a massive correction. All I know is that it will be interesting!


----------



## james4beach

Synergy said:


> ^ I don't anticipate a crash in price back to those levels. I know some people that have missed out on the market over the past 10-15 yrs as they have been anticipating a massive correction. All I know is that it will be interesting!


I was thinking about all this recently and would probably be comfortable renting for the foreseeable future. It's not a big deal to me.

But if we end up with a meaningful correction and maybe an economic crisis, I might go out there and put some "stink bids" for some homes. Well, the sellers will see them as stink bids. They would be genuine bids from me, I just don't think they will like the price I'm going to offer.

And if they don't like my price, nobody's holding a gun to their head.


----------



## m3s

james4beach said:


> I don't think they will like the price I'm going to offer. At the end of the day I'm not desperate to buy the house, but if they're desperate enough to sell, who knows.


Varies person to person

There are sellers who need to sell fast for whatever reason. Same is true for anything not just houses

If you have low time preference and you can get those rare deals (unfortunately requires a RE agent as the good deals never get listed)


----------



## james4beach

m3s said:


> If you have low time preference and you can get those rare deals (unfortunately requires a RE agent as the good deals never get listed)


Is that true, that good deals don't get listed?

I have a few friends who worked at RIM in Waterloo before that company started to disintegrate. They had bought homes during the heyday of Kitchener-Waterloo. Later when they wanted to sell, they found that nobody was willing to buy their homes. The RIM bubble had burst and the money in the area had dried up, employees were getting laid off and leaving, etc.

Both of my friends with homes to sell had their houses listed, and sitting on the market for a very long time.


----------



## m3s

One of the few remaining ways RE agents stay relevant even though they could be replaced by an app

Is that they get to see listings before the public. So any firesale that is priced to sell immediately the agents will get to pick who they call

Of course this could be an app with a notification but then how would they justify the agents fees


----------



## Synergy

m3s said:


> One of the few remaining ways RE agents stay relevant even though they could be replaced by an app
> 
> Is that they get to see listings before the public. So any firesale that is priced to sell immediately the agents will get to pick who they call
> 
> Of course this could be an app with a notification but then how would they justify the agents fees


Oftentimes the agents pick these deals up themselves or they pass them along to a family member. Good clients get the next kick of the can. Agents will likely have a job for many years to come. Too many people need hand holding and counseling throughout the process and transaction. Commission structure could use an overhaul.


----------



## m3s

Synergy said:


> Agents will likely have a job for many years to come. Too many people need hand holding and counseling throughout the process and transaction. Commission structure could use an overhaul.


Americans already have apps and young people prefer them

Agents will probably stick around for the older generations

And in Canadian because they have that CREA mafia


----------



## Synergy

m3s said:


> Americans already have apps and young people prefer them
> 
> Agents will probably stick around for the older generations
> 
> And in Canadian because they have that CREA mafia


I have a relative that builds software for insurance companies. We thought the online business would take off, younger generation would quote and bind online. Adoption has been very slow and leaders are surprised by the volume of business still flowing through agents and brokers. The challenge is making the process simple enough. Young people appear to need a lot of advice in some areas of their lives.

I hope you are right. I'd like to see things transition this way for many industries.


----------



## m3s

Synergy said:


> The challenge is making the process simple enough. Young people appear to need a lot of advice in some areas of their lives.
> 
> I hope you are right. I'd like to see things transition this way for many industries.


They don't need a lot of advice. The software needs to have very good UI/UX and needs marketing that young people trust (they don't trust the old fashion hand waving and ads you see on TV, they trust influencers on social media for better or worse)

There are apps doing well such as Lemonade, Redfin, Rocket, SoFi etc. If young people want advice they will go to social media and to be honest they might get better advice than going to a salesperson (which they won't trust because they don't see them as genuine as social media influencers)

I got insurance recently from squareone in Canada. Very simple process. It doesn't take a professional salesperson to set this stuff up the questions are pretty basic. Different generations will have different comfort levels with tech and salespeople


----------



## Synergy

m3s said:


> They don't need a lot of advice. The software needs to have very good UI/UX and needs marketing that young people trust (they don't trust the old fashion hand waving and ads you see on TV, they trust influencers on social media for better or worse)
> 
> There are apps doing well such as Lemonade, Redfin, Rocket, SoFi etc. If young people want advice they will go to social media and to be honest they might get better advice than going to a salesperson (which they won't trust because they don't see them as genuine as social media influencers)
> 
> I got insurance recently from squareone in Canada. Very simple process. It doesn't take a professional salesperson to set this stuff up the questions are pretty basic. Different generations will have different comfort levels with tech and salespeople


I hope you're right. I have some investments banking on the subject!


----------



## m3s

Unprecedented strategic petroleum reserves released to bring inflation down and CPI still up

This will be a disaster when they stop releasing reserves, have to start printing fiat, and also have to refill those reserves

Is hyperinflation good for GICs?


----------



## damian13ster

Core CPI rreading is insanely high. Looks like inflation expectations are rising rapidly and unless deficits and idiotic fiscal policy is not stopped, next decade will be atrocious. Monetary policy is less responsible for this disaster. Majority is caused by fiscal policy. Responsible thing to do would be period of austerity and surpluses but fascist authoritarian charge is a populist who doesnt care - budgets will balance themselves


----------



## m3s

You think people will vote for austerity or more "inflation support" cheques?

Fire up the money printers! (not literal money printers for the boomers)


----------



## damian13ster

Nah, that would require financial intelligence.

It has been amusing over last couple of days how suddenly according to state-funded media financial and individual responsibility became 'populism' and money printing and government handouts became normalized.
How rapidly language is changing in past decade is insane


----------



## m3s

damian13ster said:


> Nah, that would require financial intelligence.
> 
> It has been amusing over last couple of days how suddenly according to state-funded media financial and individual responsibility became 'populism' and money printing and government handouts became normalized.
> How rapidly language is changing in past decade is insane


Defund the CBC


----------



## sags

Personally, I blame Harper.


----------



## Covariance

james4beach said:


> Is that true, that good deals don't get listed?
> 
> I have a few friends who worked at RIM in Waterloo before that company started to disintegrate. They had bought homes during the heyday of Kitchener-Waterloo. Later when they wanted to sell, they found that nobody was willing to buy their homes. The RIM bubble had burst and the money in the area had dried up, employees were getting laid off and leaving, etc.
> 
> Both of my friends with homes to sell had their houses listed, and sitting on the market for a very long time.


Clearing price. Every market has one. It's the price where supply equals demand.


----------



## m3s

I mean if they price it low enough it well sell before getting listed

If a house is listed for months or a seller is not ready to sell the agents will do the opposite


----------



## sags

Most buyers don't want to deal with the owners of the home.

Do buyers want to make an offer and then have to explain to the seller that their home isn't worth what they think it is ?

It is a lot easier to offer a lower price when represented by a third party broker.


----------



## Synergy

[/QUOTE]


sags said:


> Most buyers don't want to deal with the owners of the home.
> 
> Do buyers want to make an offer and then have to explain to the seller that their home isn't worth what they think it is ?
> 
> It is a lot easier to offer a lower price when represented by a third party broker.


Thats why you create an electronic open bidding system!


----------



## m3s

sags said:


> Most buyers don't want to deal with the owners of the home.
> 
> Do buyers want to make an offer and then have to explain to the seller that their home isn't worth what they think it is ?
> 
> It is a lot easier to offer a lower price when represented by a third party broker.


There's literally nothing to explain

Offer goes over an app and the seller can take it, or leave it or counter offer

P2p trading is working very well already


----------



## sags

High end auction houses have such a system, but it is not without some complications and costs to the buyer referred to as a "buyer premium" often 10-20% of the sale price.

First, someone has to verify the authenticity of the home listing and ensure the description of the property is accurate.

Second, there has to be a way to include the details of the offer.......dates for the offer to expire, closing dates, conditions on sale such as home inspections.

Third, someone has to determine the buyer is capable of making the purchase, and then hold deposits and down payments in escrow.

Schill buyers would be a problem unless all potential buyers are properly vetted.

I read of one online brokerage in trouble because a guy listed and sold a home he didn't own.


----------



## m3s

sags said:


> High end auction houses have such a system, but it is not without some complications and costs to the buyer referred to as a "buyer premium" often 10-20% of the sale price.
> 
> First, someone has to verify the authenticity of the home listing and ensure the description of the property is accurate.
> 
> Second, there has to be a way to include the details of the offer.......dates for the offer to expire, closing dates, conditions on sale such as home inspections.
> 
> Third, someone has to determine the buyer is capable of making the purchase, and then hold deposits and down payments in escrow.
> 
> Schill buyers would be a problem unless all potential buyers are properly vetted.
> 
> I read of one online brokerage in trouble because a guy listed and sold a home he didn't own.


Looks like you're finally starting to understand the point of blockchain

Verify authenticity? Blockchain and oracle nodes who put up enough collateral to verify authenticity

Details of the offer? Smart contract metadata. Escrow? Smart contract again

This is literally what NFT trading is and why it's such a big deal (hint - not just jpgs) Fees are not 10-20% but there is usually a small % for the marketplace


----------



## sags

Perhaps useful for completed contracts, but it is getting to that end stage that is problematic without an agent handling offers and counter offers, vetting buyers etc.


----------



## m3s

sags said:


> Perhaps useful for completed contracts, but it is getting to that end stage that is problematic without an agent handling offers and counter offers, vetting buyers etc.


They already do it in the US and EU for example. It sped up during the pandemic.

My colleague bought his house on an app. They have commercials for them all the time.

I need an agent to buy a house as much as I need an agent to buy a car or washing machine (you can buy cars from vending machines on apps in the US by the way) Agents aren't inspectors or appraisers or lawyers they are just leeches who make themselves relevant by withholding information

Don't fool yourself the world is a changing and Canada is usually about 5 years behind


----------



## bigmoneytalks

MrBlackhill said:


> Dramatic talk because you have to look at it relative to reference.
> 
> When rates rise from 8% to 12%, that's 50% more in interests payments. When rates rise from 2% to 4%, that's double the interests payments.
> 
> When rates are low, it's super risky, because asset prices rise so you have to take on more debt and then whenever the rates start rising back higher, the cost of that huge debt rises super fast.


This is why I have paying down my mortgage. Many people think it's not wise but I'll be mortgage free in 2 years.


----------



## sags

People got all excited about buying used cars online through apps.

No more dealing with sketchy car dealers, and a game changer, they said.

The top app is Carvana and they looked good for a little awhile. Then reality took over and the stock lost 85% of the value and they are headed to bankruptcy.









Carvana Stock: Bankruptcy May Be Inevitable (NYSE:CVNA)


In my view, Carvana is likely to go bankrupt but may not be a short opportunity due to its high squeeze risk. Click here to read more.




seekingalpha.com


----------



## m3s

sags said:


> People got all excited about buying used cars online through apps.


Not sure if you noticed saggy man

The internet and apps are quite popular for a few decades now

Despite the price of speculative things falling


----------



## AlwaysMissingTheBoat

*Canada’s rising prices becoming entrenched, recession may be needed: economists*

The underlying pressures driving inflation in Canada are likely to peak in the fourth quarter of this year, economists told Reuters, though most see signs fast rising prices are becoming entrenched and warn a recession may be needed to avoid a spiral.

Canada’s inflation data for August will be released on Tuesday, with analysts forecasting the headline rate will edge down to 7.3 per cent, from 7.6 per cent in July and a four-decade high of 8.1 per cent in June.

But all eyes will be on the three core measures of inflation – CPI Common, CPI Median and CPI Trim – which taken together are seen as a better indicator of underlying price pressures.

The average of the three hit a record high of 5.3 per cent in July.









Canada’s rising prices becoming entrenched, recession may be needed: economists - National | Globalnews.ca


Six of eight economists surveyed by Reuters said they see signs of inflation entrenchment -- an outcome the Bank of Canada has hoped to avoid.




globalnews.ca


----------



## AlwaysMissingTheBoat

Some signs of progress...


__ https://twitter.com/i/web/status/1572225461614174209


----------



## sags

Loblaw profits were up 40% in the last quarter.

How does a company simply passing on price increases it can't control to consumers, end up earning 40% more profit ?

It sounds eerily like the 1970s situation, when the government imposed wage and price controls. (1975-1978)

Proposed by PC leader Robert Stanfield in 1974, they were implemented by Liberal PM Pierre Trudeau in 1975.

There is much debate on how successsful they were, but little debate that most people didn't like the policy.


----------



## Beaver101

sags said:


> Loblaw profits were up 40% in the last quarter.
> 
> How does a company simply passing on price increases it can't control to consumers, end up earning 40% more profit ?
> 
> ...


 ... simple: 1. prices gouging disguised as inflation, 2. keeping shareholders' mouth shut with its dividends, and 3. trim expenses to the bare-bone sans the C-Suite of course. Nothing new with points 2. and 3. Just a matter you choose to see it or not.


----------



## m3s

sags said:


> Loblaw profits were up 40% in the last quarter.
> 
> How does a company simply passing on price increases it can't control to consumers, end up earning 40% more profit ?
> 
> It sounds eerily like the 1970s situation, when the government imposed wage and price controls. (1975-1978)
> 
> Proposed by PC leader Robert Stanfield in 1974, they were implemented by Liberal PM Pierre Trudeau in 1975.
> 
> There is much debate on how successsful they were, but little debate that most people didn't like the policy.


Gross profit is up 40% or net revenue is up? Of course gross profit would be up when prices are up

Just looking quickly it looks like gross profits are up especially drug retail but neither revenue nor profits are up 40%? Unless I'm looking quickly at the wrong Loblaws financial report

See Pierre's explanation for school children - 10 loaves of bread and $10 vs 10 loaves of bread and $20

"Revenue was $12,847 million, an increase of $356 million, or 2.9%.
Retail segment sales were $12,623 million, an increase of $341 million, or 2.8%.
Food Retail (Loblaw) same-stores sales increased by 0.9%.
Drug Retail (Shoppers Drug Mart) same-store sales increased by 5.6%.
E-commerce sales decreased by 17.5%, lapping elevated online sales due to lockdowns last year.
Operating income was $742 million, a decrease of $10 million, or 1.3%. Operating income was negatively impacted by $111 million as a result of a charge related to a President's Choice Bank ("PC Bank") commodity tax matter.
Adjusted EBITDA(2) was $1,499 million, an increase of $128 million, or 9.3%.
Retail segment adjusted gross profit percentage(2) was 31.4%, an increase of 50 basis points."


----------



## sags

Loblaws profit up 40%, raised their dividend 40%, and the stock price has risen almost 70% year over year.

Price gouging capitalism on the backs of struggling consumers. Current greedflation wouldn't be the first time for this company

Sags says.......hit them hard with a "greed tax".









‘Shenanigans’: Calls to boycott Loblaws in August grow over ‘greedflation’ | Globalnews.ca


Some are claiming that it is not inflation driving prices up at the grocery store, but rather "greedflation" or price-gouging at the hands of grocers.




globalnews.ca





_Loblaw Companies Ltd. highlighted__ consumers' growing emphasis on value as it raised its quarterly dividend and reported its first-quarter profit rose nearly 40 per cent compared with a year ago. _









Canadian shoppers shift to discount stores, No Name brand amid high inflation: Loblaw


Canada's biggest food retailer says people are shopping for groceries more often but buying less and shifting to discount stores as pandemic restrictions loosen and inflation soars.




www.ctvnews.ca


----------



## sags

Pierre said he learns his economics from crypto dudes on Youtube.

Trudeau reminded Canadians in a recent speech.

_After congratulating Conservative member of parliament Pierre Poilievre for winning his party’s leadership on Saturday, Trudeau criticized his new rival’s politics, calling it irresponsible. The Canadian prime minister also attacked Poilievre’s advice about cryptocurrency.

Referring to Poilievre’s suggestion to Canadians that investing in bitcoin could allow them to “opt out” of inflation, Trudeau stressed:
Telling people they can opt out of inflation by investing their savings in volatile cryptocurrencies is not responsible leadership.

“By the way, *anyone who followed that advice would have seen their life savings destroyed*,” the Canadian prime minister claimed._

Did you follow Pierre's crypto advice M3S ? You should have bought GICs and you wouldn't have lost all your money.

Don't worry....you are young and have time to start over.


----------



## m3s

sags said:


> Did you follow Pierre's crypto advice M3S ? You should have bought GICs and you wouldn't have lost all your money.
> 
> Don't worry....you are young and have time to start over.


Why would I start over again  You don't seem to have much situational awareness to put it politely

You seem to think if something is down recently then someone must have lost their entire portfolio down when in reality it's not the case at all. I did extremely well last year, passive for most of the winter and doing extremely well already this year beyond imagination. There are many ways to do this but the worst thing you can do is follow Jim Cramer

Biggest problem now is paying massive taxes. Can you explain again how inflation is good for GICs?


----------



## Beaver101

sags said:


> Pierre said he learns his economics from crypto dudes on Youtube.
> 
> Trudeau reminded Canadians in a recent speech.
> 
> _After congratulating Conservative member of parliament Pierre Poilievre for winning his party’s leadership on Saturday, Trudeau criticized his new rival’s politics, calling it irresponsible. The Canadian prime minister also attacked Poilievre’s advice about cryptocurrency.
> 
> Referring to Poilievre’s suggestion to Canadians that investing in bitcoin could allow them to “opt out” of inflation, Trudeau stressed:
> Telling people they can opt out of inflation by investing their savings in volatile cryptocurrencies is not responsible leadership.
> 
> “By the way, *anyone who followed that advice would have seen their life savings destroyed*,” the Canadian prime minister claimed._
> 
> Did you follow Pierre's crypto advice M3S ? You should have bought GICs and you wouldn't have lost all your money.
> 
> Don't worry....you are young and have time to start over.


 ... PP's believers should be asking their "leader" as to just how much cryto-currencies he currently hold - today September 20, 2022? I bet his reply is "zero=0=zilch=nada. And thanks for voting for me, suckers!!!!".


----------



## m3s

Beaver101 said:


> ... PP's believers should be asking their "leader" as to just how much cryto-currencies he currently hold - today September 20, 2022? I bet his reply is "zero=0=zilch=nada. And thanks for voting for me, suckers!!!!".


I will vote for JT myself

Easy monetary policy is great for people who trade the market and own assets. It's horrible for people like sags son who just want to buy a house. They own nothing and they love it according to Chrystia Freeland and Klaus Schwab

I bet sags son will vote for Pierre even if he tells sags otherwise


----------



## MrBlackhill

That's almost like interviewing The Dogecoin Millionaire during the first few days of May 2021.

The video was posted 5 months ago, how many got influenced by that video thinking buying Bitcoin at that moment (5 months ago) was a good idea because inflation kept increasing?

Obviously there are winners and losers in crypto, but I'm pretty sure that video created more losers than winners. Good thing actually, Darwin theory of evolution.


----------



## m3s

If anyone buys crypto because a politician smoked some shisha with a restaurant owner they probably aren't very intelligent

How do you think Pierre raised the most funding of any conservative (in history?) I donated a LOT to him and I probably won't even vote for him

Bring on the financial support for poor renters like me and seniors like sags. Our votes are easily bought. Screw the youth


----------



## sags

You conflate owning a home with wealth, just because of recent gains.

For many people, owning a home was a money pit. For many people it is becoming a money pit.

Warren Buffet is one of the richest people in the world and still lives in the small home they bought in 1958 for $31,500.

None of his wealth came from buying a house. Imagine if he had invested that $31k into stocks.


----------



## m3s

sags said:


> You conflate owning a home with wealth, just because of recent gains.
> 
> For many people, owning a home was a money pit. For many people it is becoming a money pit.
> 
> Warren Buffet is one of the richest people in the world and still lives in the small home they bought in 1958 for $31,500.
> 
> None of his wealth came from buying a house.


Warren Buffet calls inflation a stealth tax. He certainly wouldn't call it good for GICs

Justin Trudeau will dangle a carrot of financial aid for poor renters and poor seniors. Homeowners will not want to vote for Pierre if they read between the lines that making RE affordable means destroying their wealth and plans to retire on reverse mortgages that are advertised on TV. So if JT dangles the right carrots in front of voters (seniors, renters, and wealthy home owners) it should be easy win

People who dream of buying their own house one day will want to vote for Pierre


----------



## sags

Pierre going to deliver a house unto them ?

People will be able to buy houses after the greatest home price collapse in history.

It has only just begun. The crazy must be wrung out of home prices, even it causes some people forced out for awhile.

Central banks will raise rates until home prices break, because they must.

Sags predicts home prices will drop 75% peak to bottom.

Put your money into GICs because stocks and crypto are going to fall too.

Capital preservation is what matters.


----------



## MrMatt

m3s said:


> I will vote for JT myself
> 
> Easy monetary policy is great for people who trade the market and own assets. It's horrible for people like sags son who just want to buy a house. They own nothing and they love it according to Chrystia Freeland and Klaus Schwab
> 
> I bet sags son will vote for Pierre even if he tells sags otherwise


I won't vote for JT, he's just horrible.

I'll vote to get rid of our NDP MP. They are just horrible, whoever looks most likley to get them out of office wins my vote.


----------



## sags

And you will watch Trudeau give another victory speech and then spend more years complaining about what he does.


----------



## sags

Stocks and crypto flop more today.

Hopium is not an investment strategy.


----------



## Beaver101

sags said:


> Stocks and crypto flop more today.
> 
> *Hopium is not an investment strategy.*


 ...  ... I'm in tears.


----------



## m3s

sags said:


> Stocks and crypto flop more today.
> 
> Hopium is not an investment strategy.


FOMC meeting. What else is new saggy

We can look at my results vs yours and see what works

Hopium is thinking inflation is good for GICs


----------



## sags

I listened to expert analysis all day on CNBC and what is new is that almost nobody is expecting the Fed to "pivot" any time soon.

That is why the market tumbled in the late afternoon trading.

A series of rate hikes, followed by a 12 month pause, and a recession is the consensus view.

Also notewhorthy, SPACs are finding it impossible to attract funding and IPOs have been cancelled.

Capital is starting to dry up.


----------



## m3s

sags said:


> I listened to expert analysis all day on CNBC and what is new is that almost nobody is expecting the Fed to "pivot" any time soon.
> 
> That is why the market tumbled in the late afternoon trading.
> 
> A series of rate hikes, followed by a 12 month pause, and a recession is the consensus view.


CNBC is the worst. It's basically business porn for old men

You'd learn this if you actually did any trading with real money. Expert analysts don't work as TV hosts if they knew how to trade

Old man Cramer was pumping all the meme stocks at the peak

__ https://twitter.com/i/web/status/1572293420114407430
Old man Cramer right before ETH falls 50% 

__ https://twitter.com/i/web/status/1519757049181216769
Poor Jimmy

__ https://twitter.com/i/web/status/1570773765445025792
It's just entertainment to sell viagra ads


----------



## nathan79

Gas prices are shooting up again, now averaging 193.8 in the Fraser Valley and same in Vancouver. It hasn't been this high since early July. If this continues along with increasing food prices and higher wages being priced into goods, I don't see inflation easing much below 7% this year. I think we may see more meaningful decreases in Jan or Feb since by then we'll be comparing from a higher base.


----------



## sags

Fed raises the interest rate another .75 points and is predicting rates "higher and longer". They are now looking at 2025 for sustained high rates.

The US 30 year fixed mortgage rate will be over 7%.......far higher than many have ever experienced.


----------



## MrBlackhill

I guess Cathie Wood and Elon Musk believe we're about to have deflation and the Fed should've decreased the rates.









Elon Musk says we should start worrying about deflation, even though prices are still growing at a four-decade high


The Tesla CEO called on the Fed to cut interest rates by a quarter of a percentage point, clashing with forecasts for a three-quarter-point increase.




www.businessinsider.com


----------



## m3s

MrBlackhill said:


> I guess Cathie Wood and Elon Musk believe we're about to have deflation and the Fed should've decreased the rates.


Fed just drives into both ditches before it corrects course

That's what happens when you're looking at past data to manipulate a real world economic

Future generations will call this the pre crypto era of the unenlightened boomer


----------



## damian13ster

MrBlackhill said:


> I guess Cathie Wood and Elon Musk believe we're about to have deflation and the Fed should've decreased the rates.
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Elon Musk says we should start worrying about deflation, even though prices are still growing at a four-decade high
> 
> 
> The Tesla CEO called on the Fed to cut interest rates by a quarter of a percentage point, clashing with forecasts for a three-quarter-point increase.
> 
> 
> 
> 
> www.businessinsider.com


Yeah, they benefit off of low interest rates.
They are also involved in technology which by nature is deflationary.

They are not involved in monetary and fiscal policy, and these are the culprits


----------



## MrBlackhill

Stupid question here.

With inflation at 7%, workers were asking increases in wage above inflation to be able to pay their bills, say 8% but then we've heard the saying "we shouldn't do that, it'll contribute to more inflation".

But when everything was under control and inflation was 2%, people were also asking increases in wage above inflation, say somewhere around 3% and no one was yelling "we shouldn't do that, it'll increase inflation".

Sooooo... My question is: wtf?

And then we wonder why real wage barely keep up with inflation...


----------



## sags

Raises for me but not for thee.

Know anyone who turned down a raise because it would cause inflation ?

Yea….me neither.


----------



## MrBlackhill

Yeah I recall our Premier in Quebec happy to say that average wage increase in Quebec was above inflation. But then when you look carefully, most of it is due to above-average increases for managers, directors, executives, C-suite, etc., while workers were all below average and actually below inflation.


----------



## sags

In reality, wages are a small % cost for most businesses.


----------



## Covariance

MrBlackhill said:


> Stupid question here.
> 
> With inflation at 7%, workers were asking increases in wage above inflation to be able to pay their bills, say 8% but then we've heard the saying "we shouldn't do that, it'll contribute to more inflation".
> 
> But when everything was under control and inflation was 2%, people were also asking increases in wage above inflation, say somewhere around 3% and no one was yelling "we shouldn't do that, it'll increase inflation".
> 
> Sooooo... My question is: wtf?
> 
> And then we wonder why real wage barely keep up with inflation...


Three ways to increase pre-tax pay; 1. get an increase in hourly rate, 2. work more hours, 3. change job (to a higher paying one)

Inflation is driven up on supply side by increased hourly rate, or lower productivity (more hours needed to produce a widget) either of which drives up input cost to company which it response raises prices. 

Inflation is driven up on the consumption side when increased take home pay in what ever form drives more demand and therefore higher prices.


----------



## doctrine

MrBlackhill said:


> Stupid question here.
> 
> With inflation at 7%, workers were asking increases in wage above inflation to be able to pay their bills, say 8% but then we've heard the saying "we shouldn't do that, it'll contribute to more inflation".
> 
> But when everything was under control and inflation was 2%, people were also asking increases in wage above inflation, say somewhere around 3% and no one was yelling "we shouldn't do that, it'll increase inflation".
> 
> Sooooo... My question is: wtf?
> 
> And then we wonder why real wage barely keep up with inflation...


Tiff Macklem spent a year talking about how inflation should be allowed to grow to allow workers salaries to increase. A tight workforce, so his naive thinking went, would give workers more freedom to negotiate above inflation rates of pay. Of course, that was assuming that companies would willingly just pay more and bankrupt themselves. Turns out, companies just shut down when it is not profitable to pay workers. Whoops.

So now Tiff Macklem asks workers to not accept pay increases and companies not to pay them. What a load of crap. Workers should try to get every cent of that 7% inflation and more. Start at 10% and walk back from there. You should look after yourself, because the government can't get its own head out of its *** to figure out how to do it, like it has been the case since..forever.


----------



## m3s

sags said:


> In reality, wages are a small % cost for most businesses.


What? Do you happen to be a union worker with an indexed DB pension

Why do they move all the manufacture jobs to China and IT jobs to India? Why do they build automation and robots to replace people? Wages are a massive cost for businesses.

This is the new inflation is good for GICs


----------



## Gator13

sags said:


> In reality, wages are a small % cost for most businesses.


What? Are you insane? Wages and benefits are one of the biggest expense lines in a business. You obviously have no business experience.


----------



## m3s

'23 "You may own nothing, but you'll love it"
'24 "Everything may be rekt but it's good for GICs"
'25 "Just eat the bugs ok, they're good for ya"


----------



## sags

Research shows the cost of labor runs about 10-15% of gross sales. In the automotive industry labor cost is about 5% of a new vehicle.

There has been virtually no increase in incomes in 40 years, while companies raked in record level profits, raised dividends for shareholders, paid record salaries and bonuses to CEOs and top executives, and bought back shares from profits.

Stock market values in these companies rewarded investors with record level profits.........and all that was all fine with business.

Now when workers need a raise to cover inflation......they start clutch their pearls and business is going to vanish from the earth.

Maybe all workers should go on strike and tell the CEOs and shareholders.........grab a lunchbox and do your own work.


----------



## sags

Gator13 said:


> What? Are you insane? Wages and benefits are one of the biggest expense lines in a business. You obviously have no business experience.


Not even close to accurate.


----------



## andrewf

Odd, gas prices are still in the $1.35-1.45 range in the GTA. The gas price bottomed out last week around the low $1.30s.


----------



## m3s

sags said:


> Research shows the cost of labor runs about 10-15% of gross sales. In the automotive industry labor cost is about 15% of a new vehicle.
> 
> There has been virtually no increase in incomes in 40 years, while companies raked in record level profits, raised dividends for shareholders, paid record salaries and bonuses to CEOs and top executives, and bought back shares from profits.
> 
> Stock market values in these companies rewarded investors with record level profits.........and all that was all fine with business.
> 
> Now when workers need a raise to cover inflation......they start clutch their pearls and business is going to vanish from the earth.
> 
> Maybe all workers should go on strike and tell the CEOs and shareholders.........grab a lunchbox and do your own work.


The value of stocks can go up or down regardless of gross profits. Stocks trade based on market speculation

You said that wages are a small % of costs and now you are saying it's a small % of gross sales. Costs and sales are not the same. You don't understand the difference between equity and expenses. Previous posts showed you don't understand the difference between profit and revenue. Or volume and liquidity

I agree CEOs and execs are overpaid and that wealth distribution is unfair. This does not mean wages are small % of costs.


----------



## sags

You don't understand the economics of labor. It is calculated on a "per unit" basis.

In 2021 productivity went up faster than wages, so the unit cost went down.

That is how economics works.


----------



## m3s

sags said:


> You don't understand the economics of labor. It is calculated on a "per unit" basis.
> 
> In 2021 productivity went up faster than wages, so the unit cost went down.
> 
> That is how economics works.


I didn't need to google because I use my intuition on this one

But the first google result says wages are not small cost for most businesses. Now you are just jabbering

*"The single biggest cost to any business is the labour cost. In fact, it averages at 70% of all expenses in a given business."

"As any company leader knows, one of the biggest costs of doing business is labor. Labor, which can account for as much as 70% of total business costs, include employee wages, benefits, payroll and other related taxes."*


----------



## Synergy

sags said:


> Not even close to accurate.


Salary is by far the biggest expense in my industry. It eats up an average of 65% of revenue. Ranges from 60-70%. Before I merged and improved efficiency I was running around 75+%.


----------



## sags

Some businesses are very labor intensive, but 65% of revenues on labor ?

The unit price at GM assembly plants is 5% and that is a unionized workplace with a DB pension and good benefits.


----------



## sags

m3s said:


> I didn't need to google because I use my intuition on this one
> 
> But the first google result says wages are not small cost for most businesses. Now you are just jabbering
> 
> *"The single biggest cost to any business is the labour cost. In fact, it averages at 70% of all expenses in a given business."
> 
> "As any company leader knows, one of the biggest costs of doing business is labor. Labor, which can account for as much as 70% of total business costs, include employee wages, benefits, payroll and other related taxes."*


post the link


----------



## sags

Unit labor costs are the accurate method of calculating labor costs.

When productivity rises the unit labor costs fall. When productivity falls, the labor cost rises.

Labor has not shared in the rising productivity for decades.





__





The Daily — Labour productivity, hourly compensation and unit labour cost, second quarter 2021


Labour productivity of Canadian businesses rose 0.6% in the second quarter, with the declines in hours worked more than offsetting the decrease in output. This was the first increase in productivity since the second quarter of 2020, when the first lockdown measures were imposed from mid-March to...




www150.statcan.gc.ca


----------



## m3s

sags said:


> Unit labor costs are the accurate method of calculating labor costs.
> 
> When productivity rises the unit labor costs fall. When productivity falls, the labor cost rises.
> 
> Labor has not shared in the rising productivity for decades.
> 
> 
> 
> 
> 
> __
> 
> 
> 
> 
> 
> The Daily — Labour productivity, hourly compensation and unit labour cost, second quarter 2021
> 
> 
> Labour productivity of Canadian businesses rose 0.6% in the second quarter, with the declines in hours worked more than offsetting the decrease in output. This was the first increase in productivity since the second quarter of 2020, when the first lockdown measures were imposed from mid-March to...
> 
> 
> 
> 
> www150.statcan.gc.ca


So why are all the unionized jobs going to China, India and Mexico?

Why did the Canadian government bail out GM only for them to move the jobs overseas? You think a truck costs more than the driver/mechanic/dispatcher or the burger costs more than flipper/cashier/manager? Labour costs must be very high especially compared to a robot

You live in a fairy tale land of the union worker with an indexed pension. The world is not the same anymore


----------



## sags

Synergy said:


> Salary is by far the biggest expense in my industry. It eats up an average of 65% of revenue. Ranges from 60-70%. Before I merged and improved efficiency I was running around 75+%.


Labor expense can be very high depending on the business, so it isn't a very accurate measure of labor costs overall.

I have a buddy who is a criminal defense lawyer and a native Canadian who also works on indigenous legal treaty matters..

He has an office on a reserve where he pays no rent. Otherwise he works out of his car or home.

His only labor expense is his own salary, and I would think his total labor expense is almost 100% of his overall business expenses.


----------



## sags

m3s said:


> So why are all the unionized jobs going to China, India and Mexico?
> 
> Why did the Canadian government bail out GM only for them to move the jobs overseas? You think a truck costs more than the driver/mechanic/dispatcher or the burger costs more than flipper/cashier/manager? Labour costs must be very high especially compared to a robot
> 
> You live in a fairy tale land of the union worker with an indexed pension. The world is not the same anymore


Simple......they didn't want to pay 5% when they could pay 1% and offset the shipping cost by charging "freight" charges to buyers.

How much is the shipping cost for the load the truck driver is carrying on his trailer ?

How much labor unit cost is there in each McDonalds hamburger or Tim Horton coffee sold ?

The cost of taxes, property, maintenance, hydro, all the food and sundry suppliers, ....etc.etc. greatly exceeds the labor cost of the hamburger flipper.


----------



## sags

If labor costs are so prohibitively expensive....say 60-70% of the cost of products, how about McDonalds pays their employees 50% of every sale and keeps the other 50% ?

McDonalds should be happy with that deal as they would make 10-20% more profit.


----------



## Synergy

sags said:


> Some businesses are very labor intensive, but 65% of revenues on labor ?
> 
> The unit price at GM assembly plants is 5% and that is a unionized workplace with a DB pension and good benefits.


Many service sectors have high payroll costs. Not much we can do about it, cost of doing business.


----------



## m3s

sags said:


> If labor costs are so prohibitively expensive....say 60-70% of the cost of products, how about McDonalds pays their employees 50% of every sale and keeps the other 50% ?
> 
> McDonalds should be happy with that deal as they would make 10-20% more profit.


Wow

You are confusing so many things here. It's actually mind boggling you can be this confused

I shouldn't be surprised by now but I am. Why are you here


----------



## andrewf

sags said:


> Some businesses are very labor intensive, but 65% of revenues on labor ?
> 
> The unit price at GM assembly plants is 5% and that is a unionized workplace with a DB pension and good benefits.


GM just snaps parts together. What do you think the embodied labour costs are of the parts?


----------



## sags

As the labor in a vehicle is calculated to be around 15% of the cost of the vehicle......it looks like the supplier labor cost is an additional 10% of the product cost.

It still is nowhere near 70% of the cost of their vehicles.


----------



## sags

If paying higher wages is inflationary, then so is paying dividends. Anything that increases buying power is inflationary.

I don't hear people complaining about collecting dividends.


----------



## Gator13

Sags, you are all over the map. Look at a few P&L's and then continue the conversation. Yikes


----------



## m3s

sags said:


> If paying wages is inflationary, then so is paying dividends. Anything that increases the money supply is inflationary.
> 
> I don't hear people complaining about collecting dividends.


Dividends don't increase the money supply. That money already exists and is just circulating

Only a central bank can increase the money supply. Unless it's Canadian tire money or Aeroplan points


----------



## sags

No difference than companies paying their employees more. That money already exists as well.


----------



## sags

Eliminate dividends and lower bank fees.

Bank fees are a tax on hard working Canadians......right Pierre ?

Maybe only employment money or government benefits in the hands of consumers is inflationary........not money from bank dividends ?

That is a different kind of money.


----------



## Covariance

sags said:


> You don't understand the economics of labor. It is calculated on a "per unit" basis.
> 
> In 2021 productivity went up faster than wages, so the unit cost went down.
> 
> That is how economics works.


After a brief rise in 2020, productivity actually declined in Canada for 7 straight quarters. It was slightly positive in Q2 2022 for the first time since then.


----------



## m3s

sags said:


> No difference than companies paying their employees more. That money already exists as well.


I only criticized when governments do it

Certainly wages need to keep up with inflation but they don't. This is why Warren Buffet and others call inflation a stealth tax

The poor love the "stimulus" handouts but it hurts them the most


----------



## m3s

sags said:


> Eliminate dividends and lower bank fees.
> 
> Bank fees are a tax on hard working Canadians......right Pierre ?
> 
> Maybe only employment money or government benefits in the hands of consumers is inflationary........not money from bank dividends ?
> 
> That is a different kind of money.


Did the banks raise dividends so people could stay at home and work on onlyfans and twitch instead?

I don't think you understand what's happening here. Inflation dilutes the market supply such as mining gold, mining BTC, or printing fiat out of thin air. Imagine playing monopoly and the banker just starts handing out money for no particular reason.

This is distinctly different from collecting money as rent or dividends from the existing supply and functioning economy. Like Pierre has tried to explain with loaves of bread but I don't know how much simpler a man can explain this simple concept

Banks paid dividends before the pandemic


----------



## sags

Pierre ignores that wages increase to pay for more loaves of bread.

In an ideal world, wages keep pace with inflation, but that hasn't happened for decades.

When I retired in 2005, I was earning 35x more than when I started work in 1967.

It is the balance between incomes and prices that matters.


----------



## m3s

sags said:


> Pierre ignores that wages increase to pay for more loaves of bread.
> 
> In an ideal world, wages keep pace with inflation, but that hasn't happened for decades.
> 
> When I retired in 2005, I was earning 35x more than when I started work in 1967.
> 
> It is the balance between incomes and prices that matters.


Wow

You still don't understand the basic concept of money supply and inflation at all. You should listen to Pierre and listen instead of reacting emotionally for once

If you increase the money supply but not the loaves of bread... the money buys less bread. It's not that complicated


----------



## andrewf

m3s said:


> Wow
> 
> You still don't understand the basic concept of money supply and inflation at all. You should listen to Pierre and listen instead of reacting emotionally for once
> 
> If you increase the money supply but not the loaves of bread... the money buys less bread. It's not that complicated


It's hopeless. 🤣


----------



## sags

m3s said:


> Wow
> 
> You still don't understand the basic concept of money supply and inflation at all. You should listen to Pierre and listen instead of reacting emotionally for once
> 
> If you increase the money supply but not the loaves of bread... the money buys less bread. It's not that complicated


You and Pierre confuse the economic textbook definition of "inflation" with price increases.

Prices are determined by the laws of supply and demand for the product or service.

If your thesis is correct and too much money is flowing in the economy.......why is consumer debt rising ? Why are people unable to pay the cost ?

Where is this tsunami of "central bank" money ? According to you......the world is awash in cash but nobody has any of it to spend.


----------



## m3s

sags said:


> You and Pierre confuse the economic textbook definition of "inflation" with price increases.
> 
> Prices are determined by the laws of supply and demand for the product or service.
> 
> If your thesis is correct and too much money is flowing in the economy.......why is consumer debt rising ? Why are people unable to pay the cost ?
> 
> Where is this tsunami of "central bank" money ? According to you......the world is awash in cash but nobody has any of it to spend.


Apparently so do all the Canadians who voted for Pierre

Pierre Poilievre is a member of parliament and the leader of opposition of this country. You are a saggy old man who rants nonsense on the internet. You seem to assume everyone has a unionized factory job with an indexed pension, that "wages are a small cost for most businesses" and that "inflation is good for GICs" These are all fantasy

It's no use explaining the same simple concept to you for the thousandth time.


----------



## m3s

__ https://twitter.com/i/web/status/1573315033660112901

__ https://twitter.com/i/web/status/1573315043525115905

__ https://twitter.com/i/web/status/1573315331409715200


----------



## Covariance

@m3s I would agree that is certainly a risk post this tightening cycle. One of a number of possibilities that we should be open minded about.


----------



## nathan79

andrewf said:


> Odd, gas prices are still in the $1.35-1.45 range in the GTA. The gas price bottomed out last week around the low $1.30s.


Gas expected to hit a high of $2.34/litre in Vancouver on Sunday. That would basically tie the record set in June.

I'm already seeing 226.9 at some stations on Gasbuddy.









Metro Vancouver gas prices on the rise again, expected to keep climbing


Gas prices in Metro Vancouver are expected to keep climbing at least into Sunday, perhaps going as high as $2.34 per litre, according to price monitoring website Gas Wizard.




vancouversun.com


----------



## m3s

nathan79 said:


> Gas expected to hit a high of $2.34/litre in Vancouver on Sunday. That would basically tie the record set in June.
> 
> I'm already seeing 226.9 at some stations on Gasbuddy.


Wow that's the same as European prices.

Decade ago when CAD was a par with USD gas was like double in Europe. It's still double the price of gas in the USA

What has justinflation done to this country. Save us Pierre









Gasoline prices in Europe 26-Dec-2022 | GlobalPetrolPrices.com


Gasoline prices in Europe. Gas prices by country using official data sources.




www.globalpetrolprices.com


----------



## sags

Gas prices here are 1.41

Why are you paying $1 more per litre?


----------



## MrBlackhill

nathan79 said:


> Gas expected to hit a high of $2.34/litre in Vancouver on Sunday. That would basically tie the record set in June.
> 
> I'm already seeing 226.9 at some stations on Gasbuddy.
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Metro Vancouver gas prices on the rise again, expected to keep climbing
> 
> 
> Gas prices in Metro Vancouver are expected to keep climbing at least into Sunday, perhaps going as high as $2.34 per litre, according to price monitoring website Gas Wizard.
> 
> 
> 
> 
> vancouversun.com


Wait, what? How come gas in Vancouver is so expensive? Why is it 50% more expensive than their neighbors in Alberta? And also 50% more expensive than Montreal?


----------



## sags

Our rent is going up $24 a month in January. That is a 2.5% increase.

Hearing from others their rent went up hundreds a month.

Some landlords are profiteering and using “inflation” as an excuse.

We may see wage and price controls again.


----------



## nathan79

MrBlackhill said:


> Wait, what? How come gas in Vancouver is so expensive? Why is it 50% more expensive than they neighbors in Alberta? And also 50% more expensive than Montreal?


Who knows. They always have an excuse, but never seem to fix the problem(s). So I stopped caring about why and focus on the price, which is what matters since we can't control the "why". (The official line is something about US refineries shutting down, an excuse they commonly use. Back in the day, they used to blame the price of oil. That one doesn't work now, so they come up with "whatever".)


----------



## AlwaysMissingTheBoat

Yeah, gasoline pricing is convoluted, but design, I presume. Of course the price of crude oil isn't the only factor in gas prices, but it's a major contributor. And crude is well of its highs. The price at the pumps has also declined, but nowhere near in lockstep. We're still paying in the upper $1.50s per litre where I'm at. I really believe we should be in the $1.20s. The carbon tax accounts for some of the increase, but only a fraction.


----------



## AltaRed

MrBlackhill said:


> Wait, what? How come gas in Vancouver is so expensive? Why is it 50% more expensive than their neighbors in Alberta? And also 50% more expensive than Montreal?


1) BC has high(er) carbon taxes on gasoline. 
2) In Metro Vancouver specifically, there is also a transit levy on top to pay for SkyTrain rapid transit expansion. When I travel to Vancouver, I fill up before getting there....to avoid filling up there.
3) BC gets most* of its gasoline from a combination of Alberta via TransMountain pipeline and Washington State refineries. The margin setting price is most likely WA state refineries and with the stronger USD these days, that will drive BC gasoline prices up. Incidentally, WA state refineries get most of their crude from a variety of imports.... Alberta and Alaska primarily, and then South America such as Columbia and the Middle East. A bit makes it there from Wyoming. 

* There is a small 55,000 barrel per day refinery in Burnaby owned now by Parkland that gets its crude from Alberta. Parkland is talking about a small expansion to up renewable fuel output but it won't be more than 5000 barrels per day or so. Its Burnaby footprint is constrained by the city of Burnaby around it (no room to grow).


----------



## m3s

Income needed to afford a home in US cities doubled according to Zillow

Something will have to break


----------



## nathan79

AltaRed said:


> 1) BC has high(er) carbon taxes on gasoline.
> 2) In Metro Vancouver specifically, there is also a transit levy on top to pay for SkyTrain rapid transit expansion. When I travel to Vancouver, I fill up before getting there....to avoid filling up there.
> 3) BC gets most* of its gasoline from a combination of Alberta via TransMountain pipeline and Washington State refineries. The margin setting price is most likely WA state refineries and with the stronger USD these days, that will drive BC gasoline prices up. Incidentally, WA state refineries get most of their crude from a variety of imports.... Alberta and Alaska primarily, and then South America such as Columbia and the Middle East. A bit makes it there from Wyoming.
> 
> * There is a small 55,000 barrel per day refinery in Burnaby owned now by Parkland that gets its crude from Alberta. Parkland is talking about a small expansion to up renewable fuel output but it won't be more than 5000 barrels per day or so. Its Burnaby footprint is constrained by the city of Burnaby around it (no room to grow).


Sure, but those things are nothing new. Prices have gone up by 30-40 cents in the last two weeks. Strong US dollar may account for a few cents of that change.


----------



## AltaRed

As of Sept 25/26, BC Central Interior gas prices are about $1.70-$1.80 with all of our gasoline coming from the Kamloops rack facility, which is supplied via TransMountain pipeline from Edmonton and/or perhaps rail tank car. If y'all on the coast are paying far more, it is a combined supply and tax and import problem. Y'all could have fixed it by supporting more refining capacity years ago.


----------



## sags

A growing number of guests on CNBC are now talking about how attractive fixed income is right now.

Treasuries, municipal bonds, GICs,......are on their favored lists. 

Funny......they don't sound concerned about losing "buying power" to inflation as much anymore.


----------



## sags

I called for more refining out west years ago on this forum, and was run out of town.

Funny, that the pipeline nobody wanted and Trudeau bought is supplying oil to BC.

I also remember meeting a lot of opposition when I suggested Alberta needed to diversify their economy awhile back.

It appears some posters now agree........to at least some extent.


----------



## m3s

So basically the NDP don't understand financial statements or how inflation works any better than sags  

Despite the clickbait title, if you read the article all the quotes say there is no evidence of greedflation in the statements. I mean just a quick look at the statements and if you understand the difference between revenue, profit and how inflation impacts numbers year over year

Of course profit and revenue is up during inflation you have to adjust for inflation because fiat has less value





__





Loading…






www.cbc.ca


----------



## AlwaysMissingTheBoat

m3s said:


> So basically the NDP don't understand financial statements or how inflation works any better than sags
> 
> Despite the clickbait title, if you read the article all the quotes say there is no evidence of greedflation in the statements. I mean just a quick look at the statements and if you understand the difference between revenue, profit and how inflation impacts numbers year over year
> 
> Of course profit and revenue is up during inflation you have to adjust for inflation because fiat has less value
> 
> 
> 
> 
> 
> __
> 
> 
> 
> 
> 
> Loading…
> 
> 
> 
> 
> 
> 
> www.cbc.ca


The grocery store chains certainly seem to be pocketing plenty of extra *profit* and rewarding shareholders during what is a very difficult period for low-income Canadians, so some checks and balances wouldn't be a bad idea. 

From May:

Loblaw Companies Ltd. highlighted consumers' growing emphasis on value as it *raised its quarterly dividend and reported its first-quarter profit rose nearly 40 per cent compared with a year ago*. 

The company reported its profit available to common shareholders totalled $437 million or $1.30 per diluted share for the 12-week period compared with $313 million or 90 cents per diluted share a year earlier. Loblaw said it will pay a quarterly dividend of 40.5 cents per share, up from 36.5 cents per share.









Canadian shoppers shift to discount stores, No Name brand amid high inflation: Loblaw


Canada's biggest food retailer says people are shopping for groceries more often but buying less and shifting to discount stores as pandemic restrictions loosen and inflation soars.




www.ctvnews.ca


----------



## sags

Perhaps m3s economic expertise could explain why their profits are higher ?


----------



## Covariance

sags said:


> Perhaps m3s economic expertise could explain why their profits are higher ?
> 
> They claim it is from an increase in the sale of drugs.
> 
> People are suddenly buying more drugs ?


Without getting into the specifics of any one company the underlying concept is company revenue is reported in nominal dollars. IE not adjusted for inflation. By way of example if they sold a toothbrush for $5 a year ago and inflation is 10% then the toothbrush price this year is $5.50. So revenue "went up" 10% but the quantity didn't grow at all.


----------



## MrBlackhill

m3s said:


> So basically the NDP don't understand financial statements or how inflation works any better than sags
> 
> Despite the clickbait title, if you read the article all the quotes say there is no evidence of greedflation in the statements. I mean just a quick look at the statements and if you understand the difference between revenue, profit and how inflation impacts numbers year over year
> 
> Of course profit and revenue is up during inflation you have to adjust for inflation because fiat has less value
> 
> 
> 
> 
> 
> __
> 
> 
> 
> 
> 
> Loading…
> 
> 
> 
> 
> 
> 
> www.cbc.ca


Well, most Canadian workers are making less profits because that's revenues minus expenses and most Canadian workers have seen their expenses increase due to inflation while their income have not increased enough so their profits are down.

Then why are grocery profits increasing? Because they've passed it to the customer, to increase their revenues as they saw their expenses increase due to inflation, so they are themselves helping the inflation to the customer, the Canadian workers. Correct me if I'm wrong.

If my revenues last year were $100 and my expenses were $80, I made $20 profits. Now, if the next year there's inflation of 10%, my expenses increased to $88, so my profits would decrease to $12 because of my $100 revenues... unless I increase my revenues by passing that bill to the customer. If I pass a 8% increase to the customer, my revenues are now $108 and my profits are still $20, I haven't increased them. But, sure, if I pass my full 10% increase on my expenses to the customer, my revenues will increase 10% to $110 and my profits will be $22, an increase of 10%, obviously. Sure, inflation-adjusted, that's no increase in profits... because they've passed the inflation to the customer to keep their profits stable in real terms.

How come Metro's profits increased by nearly 9% during a period of inflation? I wonder if they gave a 9% wage increase to their employees... ha.


----------



## sags

Covariance said:


> Without getting into the specifics of any one company the underlying concept is company revenue is reported in nominal dollars. IE not adjusted for inflation. By way of example if they sold a toothbrush for $5 a year ago and inflation is 10% then the toothbrush price this year is $5.50. So revenue "went up" 10% but the quantity didn't grow at all.


Top line revenues certainly go up due to increased prices due to inflation from rising input or supplier costs, but that doesn't explain increased profits.

Maybe a company laid off people, or restructured, or their sales skyrocketed....but generally speaking higher prices doesn't increase demand.

"Price gouging" is far easier for companies that sell "non-discretionary" consumer items......like food, energy, insurance companies but for most companies raising prices above the rate of inflation would reduce demand and sales.

At a time when most companies are feeling margin compression, how are grocery stores earning higher profits from sales to consumers who are cutting back their food budgets ?


----------



## m3s

sags said:


> Perhaps m3s economic expertise could explain why their profits are higher ?


I'll explain it in terms of your own situation

Your indexed pension went up thanks to high inflation. NDP is saying greedy sags had record profits this year because his income is higher and needs to be investigated. In real terms your pension probably has less purchasing power than before the adjustment. So are you greedy or is the increase nominal value justified?

You have to understand fiat is losing value due to inflation. Numbers going up doesn't necessarily mean record profit just like an increased pension doesn't necessarily mean you have more purchasing power

Unless of course your rent is controlled and capped to 2.5% increase then maybe the NDP should investigate you


----------



## Beaver101

^ I didn't know an indexed pension is subject to conditions of a free market.


----------



## sags

No doubt conservatives will say the NDP is misguided and defend the corporate profits without any investigation at all.

Imagine the outcry they would have if the Liberals said to seniors........

Your OAS benefit is indexed to inflation, so you will be getting a 10% increase on your monthly benefit to maintain your purchasing power.

But wait......there is more.

We are not only going to give you that 10% increase, but we are also going giving you an additional 40% increase to increase your disposable income.


----------



## m3s

sags said:


> No doubt conservatives will say the NDP is misguided and defend the corporate profits without any investigation at all.
> 
> Imagine the outcry they would have if the Liberals said to seniors........
> 
> Your OAS benefit is indexed to inflation, so you will be getting a 10% increase on your monthly benefit to maintain your purchasing power.
> 
> But wait......there is more.
> 
> We are not only going to give you that 10% increase, but we are also going giving you an additional 40% increase to increase your disposable income.


If you actually read the clickbait article or maybe looked at the financial statement you would see there is no 40% increase

Where is the data sags? Are you going by what the mainstream media clickbait says or did you even take a look at the financial statements?



> A recent report from Dalhousie University looked into the profits of Canada's major grocers over the past five years and found no evidence of profiteering off of the recent spike in inflation.
> 
> "If 'greedflation' exists, the available data suggests grocers are not responsible," the report reads.
> *
> "If people are accusing grocers of gouging and profiteering we don't know where they're getting their data," said Sylvain Charlebois, one of the report's authors.*


----------



## m3s

Beaver101 said:


> ^ I didn't know an indexed pension is subject to conditions of a free market.


I would be impressed if you have ever looked at a financial statement

I have explained inflation to sags 100 times by now so I tried to use an example he might understand. Indexed pension goes up to adjust for inflation, no to increase "profits"

Why would be want the government to control grocery prices? Some governments are capping rent or energy costs and this will certainly impact the free market in many ways


----------



## sags

An investigation will show if they are price gouging or not, so why not support it ?


----------



## m3s

sags said:


> An investigation will show if they are price gouging or not, so why not support it ?


Typical waste of tax money

Free market prices are set by the supply and demand. Of course you have 50% below rent price thanks to 2.5% cap on rent increase during high inflation when your indexed pension probably increased more than that. When the government manipulates the market like this it impacts supply and demand whereas free market prices are designed to slow/increase demand naturally

You don't live in the free market you live in union world


----------



## Beaver101

m3s said:


> I would be impressed if you have ever looked at a financial statement
> 
> I have explained inflation to sags 100 times by now so I tried to use an example he might understand. Indexed pension goes up to adjust for inflation, no to increase "profits"
> 
> Why would be want the government to control grocery prices? Some governments are capping rent or energy costs and this will certainly impact the free market in many ways


 ... I'm impressed that you're an expert on looking at financial statements and then coming up with the above twisted post, implying you still do NOT get it, even the basics. Post #1317 gave you another hint.

I'm not going go into a long post to have to "explain" so as to having to impress a pre-fixated if not twisted brain like yours so end of my posts here. And you can continue spewing whatever you want to fulfill the need to impress also. 

Summary here: I gather there's no sucking activity over in the crypto-world so it's back to the real world to explain "inflation" and picking on others. LMAO.


----------



## m3s

Beaver101 said:


> I'm not going go into a long post to have to "explain" so as to having to impress a pre-fixated if not twisted brain like yours so end of my posts here. And you can continue spewing whatever you want to fulfill the need to impress also.
> 
> Summary here: I gather there's no sucking activity over in the crypto-world so it's back to the real world to explain "inflation" and picking on others. LMAO.


I've never seen you explain anything here

So what content do you provide besides low value antagonizing people like kaejs? @KaeJS by the way provided lots of value over the years

Show me a post where you provided information instead of criticizing and antagonizing others who do


----------



## nathan79

Vancouver expected to shatter North American gas price record on Thursday with a forecast high of 239.9









Vancouver poised to again shatter North American gas-price record: analyst | Globalnews.ca


'Gas will be 239.9 on Thursday and that will smash an all-time record for any city in North America. That's Vancouver,' fuel analyst Dan McTeague predicted.




globalnews.ca





Prices are expected to moderate slightly in October, but remain high into the New Year.

Regardless of the cause, it's inflationary. This will hurt BC's inflation numbers for September and likely October, which will impact Canada's inflation numbers to a lesser extent.

The weak CAD will add further inflationary pressures.

At this rate I'm expecting another .75 interest rate hike from the BoC in October.


----------



## AltaRed

nathan79 said:


> The weak CAD will add further inflationary pressures.
> 
> At this rate I'm expecting another .75 interest rate hike from the BoC in October.


The weak CAD does add inflationary pressure, but my guess is 50bp in October, if for no other reason than it has December to do more AND we are seeing a few tipping points starting to show up.


----------



## m3s

Subscribe to read | Financial Times


News, analysis and comment from the Financial Times, the worldʼs leading global business publication




www.ft.com






Bank of England launches £65bn move to calm markets
Central bank to spend £5bn a day for 13 days as it warns of *‘material risk to UK financial stability’*

The Bank of England took emergency action on Wednesday to avoid a meltdown in the UK pensions sector, unleashing a £65bn bond-buying programme to stem a crisis in government debt markets.

The central bank warned of a “material risk to UK financial stability” from turmoil in the gilts market, which was sparked by chancellor Kwasi Kwarteng’s tax cuts and borrowing plan last week.

The BoE suspended a programme to sell gilts — part of an effort to get surging inflation under control — and instead pledged to buy long-dated bonds at a rate of up to £5bn a day for the next 13 weekdays.

*Economists warned the injection of billions of pounds of newly minted money into the economy could fuel inflation. “This move will be inflationary at a time of already high inflation,” said Daniel Mahoney, UK economist at Handelsbanken.*

UK government bond markets recovered sharply after the announcement. The pound rose 1.4 per cent on the day by evening trading in London, reaching $1.0877 against the dollar.


The bank stressed it was not seeking to lower long-term government borrowing costs. Instead it sought to buy time to prevent a vicious circle in which pension funds have to sell gilts immediately to meet demands for cash from their creditors.

*That process had put pension funds at risk of insolvency, because the mass sell-offs pushed down further the price of gilts held by funds as assets, requiring them to stump up even more cash.*

“At some point this morning I was worried this was the beginning of the end,” said a senior London-based banker, adding that at one point on Wednesday morning there were no buyers of long-dated UK gilts. “It was not quite a Lehman moment. But it got close.”

The most directly affected groups were final salary pension schemes that have hedged to ensure their ability to make future payments — so-called liability-driven investment strategies that are very sensitive to fast-moving gilt yields.

“It appears that some players in the market ran out of collateral and dumped gilts,” said Peter Harrison, chief executive of Schroders, which has $55bn in global LDI business. “We were more conservatively positioned and we had enough collateral to meet all of our margin calls.”

But a senior executive at a large asset manager said they had contacted the BoE on Tuesday warning that it needed “to intervene in the market otherwise it will seize up” — but the bank failed to act until Wednesday. It declined to comment.


Cardano Investment, which manages LDI strategies for about 30 UK pension schemes with roughly £50bn of assets, said it had written to the BoE on Wednesday.

“If there was no intervention today, gilt yields could have gone up to 7-8 per cent from 4.5 per cent this morning and in that situation around 90 per cent of UK pension funds would have run out of collateral,” said Kerrin Rosenberg, Cardano Investment chief executive. “They would have been wiped out.”

At a meeting with the chancellor earlier on Wednesday, bankers had urged Kwarteng not to wait until a planned statement on November 23 to take action to calm the markets with a new plan to cut debt.

One person at the meeting, which included Citi, Bank of America, UBS, JPMorgan, Deutsche Bank and Standard Chartered, said that date was too far off. Kwarteng’s allies insisted he was sticking to his timetable.

Following the BoE’s intervention, Labour leader Sir Keir Starmer called for parliament to be recalled and for Kwarteng to abandon his plans.

Kwarteng attempted to reassure markets by telling government departments to identify efficiency savings, reminding them they would have to live within very tight spending limits, already set until 2025.

But some Conservative MPs believe Kwarteng’s reputation has been shredded by the chaos of the last few days and cannot survive as chancellor, while some argue prime minister Liz Truss must change course.

Kwarteng’s allies said he would not resign, while one government insider said of Truss: “She’s very much not in the mood to budge and wants to tough it out.” Truss and Kwarteng said nothing publicly on Wednesday.

Andrew Griffith, City minister, said the government would stick to its strategy: “We think they’re the right plans because those plans make our economy competitive,” he said.

But Tory anger is mounting, with some warning that Truss faces a rebellion on key legislation — including possibly on the finance bill to enact the new package — when MPs return to the Commons in October.

Simon Hoare, Tory MP for North Dorset, tweeted: “These are not circumstances beyond the control of Govt/Treasury. They were authored there. This inept madness cannot go on.”

The BoE took the emergency measure after Kwarteng’s fiscal package last week sent the pound tumbling and set off historic falls in gilt prices.

After the announcement, 30-year gilt yields, which earlier on Wednesday had touched a 20-year high above 5 per cent, fell 1 percentage point to 4 per cent — their biggest drop for any single day on record, according to Tradeweb data. Yields fall when prices rise. Ten-year yields slipped to 4.1 per cent from 4.59 per cent.

The Treasury blamed “significant volatility” in “global financial markets”.


----------



## m3s

Dollar milkshake theory in action


----------



## AlwaysMissingTheBoat

Euro Zone in big trouble and the headwinds are sure to continue with their energy crisis.

*Inflation in the eurozone reached 10% in September, the highest it has ever been in the history of the common European currency*









Eurozone inflation hits record 10%, highest in the history of the euro | DW | 30.09.2022


Inflation in the eurozone reached 10% in September, the highest it has ever been in the history of the common European currency.




www.dw.com


----------



## Covariance

Used car market is reverting to the mean


----------



## sags

Carvana is in trouble because they paid too much for their used car inventory.

The bubble burst and they lose money on every sale.


----------



## nathan79

Covariance said:


> Used car market is reverting to the mean


Sellers haven't got the memo yet. I'm still seeing 10 year old Civics for 13K.


----------



## AltaRed

There are ridiculous prices still being asked by too many folk in our region. Lots of casting for fish.....


----------



## MrBlackhill

Nice.

One-Third of Americans Making $250,000 Live Paycheck-to-Paycheck, Survey Finds


----------



## Gator13

^ Very interesting.


----------



## sags

$100,000 a year in mortgage payments, a couple of nice vehicles, a boat, country club membership, annual vacations to Europe........it all adds up.


----------



## andrewf

I really doubt your average $250k income individual has a country club membership.


----------



## londoncalling

Are we starting to see


MrBlackhill said:


> Nice.
> 
> One-Third of Americans Making $250,000 Live Paycheck-to-Paycheck, Survey Finds


Sounds like a lifestyle and spending issue and not an income issue. Unless of course the majority are investing the bulk of that income instead of consumption spending.


----------



## james4beach

m3s said:


> Bank of England launches £65bn move to calm markets


You're going to love this @m3s @nathan79

The central bank is basically bailing out their Defined Benefit (DB) pension industry, because that's where the blow-up was happening. So all the young, working age people -- who don't have DB pensions by the way -- will be suffering the costs and consequences while they bail out DB pensions held by boomers.

Patrick Boyle explains some of the mechanics of the UK pension industry blow-up and how it comes from DB pension liabilities.


----------



## m3s

james4beach said:


> You're going to love this @m3s @nathan79


Thanks, I hate it

Did you see the Fed called an emergency meeting after trading on Friday for Monday? The US Inflation Reduction Act is also coming with $80B for the IRS.

The war of independence was to get away from high UK taxes after all


----------



## m3s

__ https://twitter.com/i/web/status/1576336458256109568


----------



## m3s




----------



## james4beach

m3s said:


> Did you see the Fed called an emergency meeting after trading on Friday for Monday?


I didn't see that one. Well they have all the best economists, I'm sure they know what they're doing.


----------



## m3s

james4beach said:


> I didn't see that one. Well they have all the best economists, I'm sure they know what they're doing.


Anyone is a genius if they can control the world reserve currency behind closed doors

We're about to learn why this is bad for the rest of the world. First it was small countries now it's the UK

China already told its banks to prepare to dump USD. The game only works if people believe and use it


----------



## peterk

Covariance said:


> Used car market is reverting to the mean


Sorry I missed this news? - Are used car prices dropping?

New cars are still being under-manufactured, and probably will be for 3-5 more years (2 years, says the car industry).

If car companies do actually get coerced by the governments into scaling back total production of regular ICE vehicles in favor of EVs, in the range of 10-20%+ of production in the next few years, then that's going to crush affordability of low and mid end vehicles too. Demand for ICE vehicles that are actually fully functional as expected (unlike EVs) will be through the roof.

Car makers/dealer are also eliminating the ability to factory order a new car for MSRP anymore. This has been a "loophole" for the past 1.5 years, essentially. In 2023 everyone will be paying the multi-thousand dollar markup for their new cars at the dealer, and you won't get to select any custom options. It'll be take it or leave it, and "thank you" for overcharging me. That seems to bode poorly all car affordability (including used) for the foreseeable future...


----------



## AltaRed

The auto companies are not being coerced directly on a broad basis (places like California excepted) to reduce ICE volumes. It is stuff like increasing US CAFE requirements that will limit volume and some product lines if the companies cannot squeeze that much more out of an ICE engine. It is a reason why we are seeing far more turbo and twin turbo 4s and auto stop/start, and gradual elimination of V8 and V6 engines.

I think we should to see electric motor boost on ICE performance cars within a few years like Formula 1 already does and will expand that in a big way for 2026. IOW, provide limited electric boost like turbo-chargers do today. NASCAR is even thinking about developing an EV series in the not too distant future to test the concept. Right now, there are only 3 manufacturers on the NASCAR senior circuits.... Chev Camaro, Ford Mustang, Toyota Camry. The Camaro will be gone circa 2024 and no other manufacturer has shown interest in this American centric sport since Dodge left the scene many years ago.

Used vehicle prices are coming down some from ridiculous valuations but I agree with Peterk they are unlikely to revert to the previous trend line.It will take a long time, perhaps 2035-2040 for ICE vehicles to looked down upon with some shame.

Added: The ADM in the USA has not manifested itself in a significant way in Canada. A number of us on discussion forums have purchased, some higher end, new vehicles in the past year at MSRP. It is a matter of simply waiting the 9-24 months for delivery and more folk are now making vehicle plans with that in mind. It has been a bit stupid the last year or two to let one's vehicle be on its last legs before getting into the market. On the ICE Mustang forums today, folks looking to buy the new 2024 model when it is available for order circa April 2023, know they will not likely get it until sometime in 2024. Plan for it.


----------



## Covariance

peterk said:


> Sorry I missed this news? - Are used car prices dropping?
> 
> New cars are still being under-manufactured, and probably will be for 3-5 more years (2 years, says the car industry).
> 
> If car companies do actually get coerced by the governments into scaling back total production of regular ICE vehicles in favor of EVs, in the range of 10-20%+ of production in the next few years, then that's going to crush affordability of low and mid end vehicles too. Demand for ICE vehicles that are actually fully functional as expected (unlike EVs) will be through the roof.
> 
> Car makers/dealer are also eliminating the ability to factory order a new car for MSRP anymore. This has been a "loophole" for the past 1.5 years, essentially. In 2023 everyone will be paying the multi-thousand dollar markup for their new cars at the dealer, and you won't get to select any custom options. It'll be take it or leave it, and "thank you" for overcharging me. That seems to bode poorly all car affordability (including used) for the foreseeable future...


I've been tracking used car availability and prices since last winter. I'm seeing, in September over prior months, a marked increase in availability, listings taking longer and prices dropping.

Perhaps to elaborate on my comment above, a reversion starts when the price level is dropping having gone past the peak. I agree we are still above average and it remains to be seen how long it will be.


----------



## m3s

AltaRed said:


> I think we should to see electric motor boost on ICE performance cars within a few years like Formula 1 already does and will expand that in a big way for 2026. IOW, provide limited electric boost like turbo-chargers do today. NASCAR is even thinking about developing an EV series in the not too distant future to test the concept. Right now, there are only 3 manufacturers on the NASCAR senior circuits.... Chev Camaro, Ford Mustang, Toyota Camry. The Camaro will be gone circa 2024 and no other manufacturer has shown interest in this American centric sport since Dodge left the scene many years ago.


What a boring motorsport

Why are people protesting useful things like pipelines when a bunch of ******** want to watch cars drive in a circle

It really shows that somebody drives the narratives behind the scenes


----------



## AltaRed

It doesn't matter what anyone thinks about any motorsport. The real point in the post was the senior motorsport organizations are pursuing electric and/or electric assist options as part of the transition. One might expect that to be a consideration for some ICE street vehicles, as an alternative* to hybrids, to keep them viable for longer.

* Meaning an electric assist (for torque for acceleration) to a small ICE based vehicle as compared to a hybrid which is ICE assist to an electric base. An example could be the ICE Mustang to keep it around longer. We won't know for perhaps another 5+ years. Nor do I necessarily care. We will be ICE based until circa 2030 anyway.


----------



## m3s

AltaRed said:


> It doesn't matter what anyone thinks about any motorsport. The real point in the post was the senior motorsport organizations are pursuing electric and/or electric assist options as part of the transition. One might expect that to be a consideration for some ICE street vehicles, as an alternative* to hybrids, to keep them viable for longer.
> 
> * Meaning an electric assist (for torque for acceleration) to a small ICE based vehicle as compared to a hybrid which is ICE assist to an electric base. An example could be the ICE Mustang to keep it around longer. We won't know for perhaps another 5+ years. Nor do I necessarily care. We will be ICE based until circa 2030 anyway.


Yea that makes sense when electric has such better torque/acceleration but ICE has the range

EV has a lot of other performance benefits though - center of gravity is so low and well balanced. I'm not interested buying one in the Canadian climate but I can see why they're exploding in the US. They also have far better charging infrastructure and will continue to get further ahead of Canada in that regard. Everything in Canada is a long drive and a harsh environment

This just popped up in my feed - Kentucky Speedway closed during the pandemic and now is a parking for for 40,000 unfinished Ford Super Duty


----------



## AltaRed

But back to where we were before derailing the thread subject matter, used vehicle prices are coming down as drivers make better plans on when and how to replace a vehicle. The desperation by those paying stratospheric ADMs is diminishing. It takes awhile for seller denial to come to terms with more rationale prices just like it seems to take forever for home sellers to recognize they can't get what their neighbour did just 6 months ago.


----------



## andrewf




----------



## andrewf

I imagine rising rates are putting a dent in people's ability to afford new or used vehicles. Marginal drivers dropping out as they can't afford payments, gas, insurance, etc. and switch to other means of transportation. I hear a lot of people bought nice cars with their stimulus checks and never made payments--cars are rolling through the auction still with their temporary tags.


----------



## m3s

andrewf said:


> I hear a lot of people bought nice cars with their stimulus checks and never made payments--cars are rolling through the auction still with their temporary tags.


US has an inflation relief package coming

I'm sure Trudeau will have one ready just in time for election

Basically easy way buy votes


----------



## james4beach

andrewf said:


> I hear a lot of people bought nice cars with their stimulus checks and never made payments--cars are rolling through the auction still with their temporary tags.


Which "stimulus checks" would have provided enough money to buy a new car?

If you're talking about CERB, to qualify, someone would have had to suffer a reduction in work hours (or stopped working due to the pandemic). The CERB then replaced their lost income. To buy a new car with that money, I think someone would have had to make a fraudulent CERB claim.

And even if you assume they weren't replacing lost income, it would have taken well over 5 months of fraudulent CERB claims to have enough cash to buy a nice car.


----------



## damian13ster

james4beach said:


> Which "stimulus checks" would have provided enough money to buy a new car?
> 
> If you're talking about CERB, to qualify, someone would have had to suffer a reduction in work hours (or stopped working due to the pandemic). The CERB *then replaced their lost income*. To buy a new car with that money, I think someone would have had to make a fraudulent CERB claim.
> 
> And even if you assume they weren't replacing lost income, it would have taken well over 5 months of fraudulent CERB claims to have enough cash to buy a nice car.


Not true. Average income rose over 10% when people lost/were forbidden from working


----------



## Gator13

I read a while back that the average age of Federal pubkic servant is something like 43. Same as it was about 10 ago. Tells me that memebers of every wage group are lining up at the trough will the majority of Canadians don't have a DB pension, but have to pay for those at the trough.

We need less government.


----------



## Covariance

james4beach said:


> Which "stimulus checks" would have provided enough money to buy a new car?
> 
> If you're talking about CERB, to qualify, someone would have had to suffer a reduction in work hours (or stopped working due to the pandemic). The CERB then replaced their lost income. To buy a new car with that money, I think someone would have had to make a fraudulent CERB claim.
> 
> And even if you assume they weren't replacing lost income, it would have taken well over 5 months of fraudulent CERB claims to have enough cash to buy a nice car.


I'm no expert in this sector by any means but I've studied the GFC extensively, and behavioural finance.

Stimulus cheque only needs to be large enough for the down, initial payment - no? Maybe a couple of months for runway thereafter? Wouldn't the marginal impact on used car prices from credit be driven by the underwriting standards of the used car seller, and other non-bank finance sources?


----------



## sags

The CERB paid out less than the minimum wage.

More likely people had some extra cash because they deferred all their bill payments for a couple of months.


----------



## AltaRed

There's anecdotal noise in the media that many vehicles bought in the pandemic on stimulus cheques are now being re-possessed, particularly in the USA. Just like so many recipients of largesse had no idea these benefits were taxable despite it being rather clear up front, and have had a rude awakening, YCFS.


----------



## m3s

sags said:


> The CERB paid out less than the minimum wage.
> 
> More likely people had some extra cash because they deferred all their bill payments for a couple of months.


Most young people have side hustles that are probably not reported

Onlyfans, twitch, youtube, ubereats, airbnb, robinhood and the list goes on and on

Even moderators are paid now on major channels (not these forums)


----------



## cainvest

m3s said:


> Most young people have side hustles that are probably not reported
> 
> Onlyfans, twitch, youtube, ubereats, airbnb, robinhood and the list goes on and on


1 in 500,000 maybe make significant money on those.



m3s said:


> Even moderators are paid now on major channels (not these forums)


Maybe I should ask for a raise!


----------



## m3s

cainvest said:


> 1 in 500,000 maybe make significant money on those.
> 
> Maybe I should ask for a raise!


Of course - because it's unreported

Moderating is pretty lucrative but those are busy servers with 24/7 shifts for mods and the position is also very competitive

Trust me people on CERB have many ways to make money online.


----------



## m3s

*U.N. Calls On Fed, Other Central Banks to Halt Interest-Rate Increases*
A U.N. agency warns that further policy tightening risks a global economic downturn











U.N. Calls On Fed, Other Central Banks to Halt Interest-Rate Increases


The Fed’s rate increases so far this year would reduce poor countries’ economic output by $360 billion over three years, and that further policy tightening would do additional harm, a U.N. agency warns.




www.wsj.com


----------



## cainvest

m3s said:


> Of course - because it's unreported


No, because almost all don't make money at side hustles.


----------



## m3s

cainvest said:


> No, because almost all don't make money at side hustles.


They do when they collect CERB, EI plus have all day to make any extra money online

There are many online side hustles. If you're still in the forum world this is pretty much 10 years obsolete. This is why the US just gave everyone the stimulus check - impossible to track income nowadays and most of it is not even known to boomers

I know people from India and other 3rd world countries making plenty (relative to their cost of living)


----------



## cainvest

m3s said:


> They do when they collect CERB, EI plus have all day to make any extra money online


Almost all can't create money worthy online content. Kind of like day trading, a few make good money while most don't.


----------



## james4beach

m3s said:


> They do when they collect CERB, EI plus have all day to make any extra money online


That's EI fraud. A person was not allowed to collect both CERB and EI.

I don't know how much CERB fraud there was.



sags said:


> The CERB paid out less than the minimum wage.
> 
> More likely people had some extra cash because they deferred all their bill payments for a couple of months.


Yeah, CERB did not pay much. Plus with the cars, people are referring to *American* programs. I don't know the details of their stimulus but perhaps it wasn't implemented as well as ours.


----------



## m3s

james4beach said:


> Plus with the cars, people are referring to *American* programs. I don't know the details of their stimulus but perhaps it wasn't implemented as well as ours.


All US residents could easily get the US stimulus check

I never had any interaction with the IRS but they still sent me a letter every stimulus to tell me I qualified as a US resident. I never accepted it because it sounds like a trap, but there was no rules like CERB

In the end the US way is probably better (like UBI) because you don't need to employ so many people to gatekeep it


----------



## m3s

cainvest said:


> Almost all can't create money worthy online content. Kind of like day trading, a few make good money while most don't.


It's not just content creation anymore. Big content creators hire support by the way - everything from editors, marketing, artists, mods etc etc

But content creation is just one of many online economies that are thriving now. If you live on forums you probably aren't aware of what all is happening

The pandemic probably made a lot of it. People are even paid to host discussions now


----------



## s1231

nathan79 said:


> Vancouver expected to shatter North American gas price record on Thursday with a forecast high of 239.9
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Vancouver poised to again shatter North American gas-price record: analyst | Globalnews.ca
> 
> 
> 'Gas will be 239.9 on Thursday and that will smash an all-time record for any city in North America. That's Vancouver,' fuel analyst Dan McTeague predicted.
> 
> 
> 
> 
> globalnews.ca
> 
> 
> 
> 
> 
> Prices are expected to moderate slightly in October, but remain high into the New Year.
> 
> Regardless of the cause, it's inflationary. This will hurt BC's inflation numbers for September and likely October, which will impact Canada's inflation numbers to a lesser extent.
> 
> The weak CAD will add further inflationary pressures.
> 
> At this rate I'm expecting another .75 interest rate hike from the BoC in October.


How come Ontario is cheapest gas in Canada?
Oct. 3 2022








Canada Average Regular Gas Price Comparison by Province


GasBuddy lets you search for Gas Prices by city, state, zip code, with listings for all cities in the USA and Canada. Updated in real-time, with national average price for gasoline, current trends, and mapping tools.




www.gasbuddy.com


----------



## AlwaysMissingTheBoat

Interesting development. Wonder if this will prove to be a one-off or the beginning of a trend among nations?


__ https://twitter.com/i/web/status/1577156632097726464


----------



## Covariance

AlwaysMissingTheBoat said:


> Interesting development. Wonder if this will prove to be a one-off or the beginning of a trend among nations?
> 
> 
> __ https://twitter.com/i/web/status/1577156632097726464


Not unexpected. They will all start to slow rate increases at some point. These are still outsized increases and slowing to a normal pace will occur at various stages depending on local inflationary forces, levels.


----------



## AltaRed

I agree the next round of rate increases by central bankers will be a slowing down of the size of increases. I expect BoC will only be 50bp later this month, and maybe the same 50bp or even just 25bp in December. It will depend on the slowing rate, or not, of CPI rate increases.


----------



## doctrine

AlwaysMissingTheBoat said:


> Interesting development. Wonder if this will prove to be a one-off or the beginning of a trend among nations?


Current rates are already starting to break things. The shoe really hasn't fallen on real estate yet, but Canadian real estate, and in many other places, does not work at 5-6% mortgages. An average mortgage on an average house can be $4000-$5000 a month - that is just insane. So something has to change. 

The rate in which institutions could collapse can easily facilitate emergency QE, such as seen in Britain last week. There is so much debt that current rates are like a nuclear weapon going off, but with delayed effects. 

I am positive there will be a pivot, although they may try to hide it. Central banks will lose their resolve, lower rates, and cause the next spiral. I could see this happening 4-5 times.


----------



## andrewf

I don't think we need to wait for housing to completely collapse before slowing the rise in rates. Housing has already softened considerably--much of the GTA is down 20-25% since the peak in Feb. Prices will likely continue to decline with affordability at higher rates stretched. Raising rates at 75 bpp per meeting is very aggressive and liable to overshoot. I'd rather BoC slow down the rate of increases rather than trigger a full-on crisis.


----------



## nathan79

doctrine said:


> Current rates are already starting to break things. The shoe really hasn't fallen on real estate yet, but Canadian real estate, and in many other places, does not work at 5-6% mortgages. An average mortgage on an average house can be $4000-$5000 a month - that is just insane. So something has to change.


Something needs to change = prices need to drop more. Cut the price in half and suddenly a 6% mortgage isn't too bad.


----------



## nathan79

andrewf said:


> I don't think we need to wait for housing to completely collapse before slowing the rise in rates. Housing has already softened considerably--much of the GTA is down 20-25% since the peak in Feb. Prices will likely continue to decline with affordability at higher rates stretched. Raising rates at 75 bpp per meeting is very aggressive and liable to overshoot. I'd rather BoC slow down the rate of increases rather than trigger a full-on crisis.


Hopefully they don't back off, though I'm not so confident now.

We're already in a crisis -- an affordability crisis -- which is why we're raising rates. Prices need to fall drastically and rates need to go higher (and remain high) until that happens. Edit: I do agree that prices are likely to continue softening for a while regardless, since it takes a few months for the rates to be priced in. At the same time, backing off too much would send the wrong signal and possibly spur potential buyers currently sitting on the sidelines into the market.


----------



## sags

Houses should fall 60% from peak to bottom, to reflect the historical interest rate versus home price balance, as it relates to affordability.

An average home that cost $800,000 a year ago at low mortgage rates, should drop to $300,000 at 7% mortgage interest.

Even if the bank halts increasing rates.....home prices will still fall as sellers become more desperate.

My sister put her townhouse up for sale a couple months ago for $450,000. She renovated the entire unit to get it ready for sale.

She has not had a single interested buyer. Her realtor told her that buyers just don't qualify anymore.

I would imagine there are a lot of real estate agents who haven't sold a property for a long time.


----------



## andrewf

sags said:


> Houses should fall 70% from peak to bottom, to reflect the historical interest rate versus home price balance, as it relates to affordability.


This would lead to depression. Millions would owe more on their houses than they are worth, and new home construction would grind to a halt and millions of construction jobs would disappear as it would not be economical to develop new housing.

I am all for reducing house prices, but it should be done in a controlled way without unnecessarily cratering the economy and interrupting to creation of new housing units.


----------



## m3s

sags said:


> Houses should fall 60% from peak to bottom, to reflect the historical interest rate versus home price balance, as it relates to affordability.
> 
> An average home that cost $800,000 a year ago at low mortgage rates, should drop to $300,000 at 7% mortgage interest.
> 
> Even if the bank halts increasing rates.....home prices will still fall as sellers become more desperate.
> 
> My sister put her townhouse up for sale a couple months ago for $450,000. She renovated the entire unit to get it ready for sale.
> 
> She has not had a single interested buyer. Her realtor told her that buyers just don't qualify anymore.


If houses fall that much people will default on mortgages which would ultimately cost the taxpayers in so many ways

It would also collapse the Canadian GDP that is based mostly on RE values, skyrocketing the debt to GDP into a death spiral

There's no choice but to keep rates low and print fiat to prop up the house of cards


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## sags

Destruction is what happens when bubbles burst.

Look at what happened in the US in 2008 where real estate prices dropped 70% in some States.

A lot of people defaulted on their mortgages, many small banks and lenders went broke, a few big banks went bust, and the economy cratered.

But the country survived and built up new bubbles.


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## m3s

sags said:


> Destruction is what happens when bubbles burst. Look at what happened in the US in 2008.


The government bailed out the banks and the poor people lost their houses?

Yea that was a great time - for the boomer banksters and politicians


----------



## sags

Lehman Brothers, Bearn Stearns, and a host of regional banks and alternative lenders didn't survive.

The housing crash led to the Great Recession, and millions lost their jobs, had to cash in their Social Security and went bankrupt.

It wasn't good times for anyone. Many people never recovered from the financial crisis.


----------



## m3s

sags said:


> It wasn't good times for anyone. Many people never recovered from the financial crisis.


It was a good time for the banks around the world who got bailed out. They got the risk/reward without the risk

Oh yea and GM too


----------



## MrBlackhill

It's always good time for the rich and always bad time for the poor.


----------



## MrMatt

nathan79 said:


> Something needs to change = prices need to drop more. Cut the price in half and suddenly a 6% mortgage isn't too bad.


They need to build more houses.

The big problem is that they're not building apartments, because cities keep saying no to infill development.
If there wasn't a housing shortage, prices would be much more reasonable.


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## m3s

MrMatt said:


> They need to build more houses.
> 
> The big problem is that they're not building apartments, because cities keep saying no to infill development.
> If there wasn't a housing shortage, prices would be much more reasonable.


That should mean more parks, schools, hospitals, firestations, police etc

Suburbia and crammed townhouses look pretty depressing without anything else mixed in

Europe was such a nicer lifestyle when everything was mixed in close


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## nathan79

andrewf said:


> This would lead to depression. Millions would owe more on their houses than they are worth, and new home construction would grind to a halt and millions of construction jobs would disappear as it would not be economical to develop new housing.
> 
> I am all for reducing house prices, but it should be done in a controlled way without unnecessarily cratering the economy and interrupting to creation of new housing units.


How do you control it and what's an acceptable reduction?

Every market is different, too. In the Lower Mainland, houses are probably 50-70% overpriced based on historical interest rates and price-to-income ratios, but Saskatchewan might only be 25% overpriced. Do we aim for an 30% reduction Canada-wide, accepting that prices in Vancouver might crash 60%, while Sask might only correct by 15%?


----------



## andrewf

It is beyond the capability of monetary policy to fine tune the valuation of regional real estate markets. IMHO, monetary policy can only target one thing, and that should be price level stability. I think a price level path target might be better for maintaining inflation expectations. 

Other policy tools should be used to address affordability and excess price appreciation. Tightening lending standards is one tool. Removing barriers to adding new supply is another.


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## AltaRed

The single most thing that could be done to improve affordability would be just as you suggest, reducing barriers to supply. Municipal zoning restrictions/processes and NIMBYism are at the top of the list.


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## sags

There is no shortage of homes or rental apartments being built in our area.

The problem is the homes are unaffordable.

Builders build expensive homes to maximize profit and that isn’t going to change.

Private developers and builders are gatekeepers and are part of the problem.

It will require Goverment to build affordable homes, as was done very successfully in the past.

In 2022, we should have affordable homes rolling off factory assembly lines by the thousands.


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## londoncalling

Most people don't want prices to decline at anywhere near the pace they had their meteoric rise. I would be curious to know how many of the current mortgages are underwater on home value. I don't believe it is that many right now. However, if buying stops prices will stagnant at best but more likely fall. The much-needed correction will take place one way or another. I would rather see values fall than rates continue to climb. I don't think either will have a significant impact on long time owners, similar to equity corrections on long time investors. In the unlikely we see chaos and a 60% correction I will be looking to buy. I haven't seen recent data but I believe only the number of sales is declining significantly. Prices have declined but for me not in any way that should cause fear or excitement.

CREA | National Price Map


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## damian13ster

andrewf said:


> This would lead to depression. Millions would owe more on their houses than they are worth, and new home construction would grind to a halt and millions of construction jobs would disappear as it would not be economical to develop new housing.
> 
> I am all for reducing house prices, but it should be done in a controlled way without unnecessarily cratering the economy and interrupting to creation of new housing units.


The only alternative is to inflate the debt away.
Picking up debt like a drunken sailor and printing money made central banks have to choose between the two


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## MrMatt

m3s said:


> That should mean more parks, schools, hospitals, firestations, police etc
> 
> Suburbia and crammed townhouses look pretty depressing without anything else mixed in
> 
> Europe was such a nicer lifestyle when everything was mixed in close


Actually no, that's the whole point of infill.

If you tear down 5 houses and put in a 100 unit apartment building, you don't need to do much.
They still have the parks, older neighbourhoods are closing schools due to the demographics and lack of students.
You don't need more firestations, because it's already there.

You need police per capita, so if you add more people sure, but I fail to see how that's a problem.
I'd suggest people in secure living arrangements actually cause lower demand for policing than homeless people.

I don't know what suburbia you're living in, but within a 10 minute walk of my house I have.
3 parks, 2 nature areas (protected forests), multiple schools, and 2 strip malls with banks, convenience stores etc, 
Several playgrounds, lots of open space, all manner of sportsfields

The grocery store and library is a bit further.

If Europe is so great, go ahead and move there.


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## m3s

MrMatt said:


> I don't know what suburbia you're living in, but within a 10 minute walk of my house I have.
> 3 parks, 2 nature areas (protected forests), multiple schools, and 2 strip malls with banks, convenience stores etc,
> Several playgrounds, lots of open space, all manner of sportsfields


Speaking with the developers here they have a mandate to build x amount of green space. They are adding that in last of course

They had to add that rule because some of the developments had nothing but new houses packed in for maximum profit. It looks depressing. Even the bare minimum parks looks more like a place for dogs to do their business than a real park

Just watched them build one in the US where they clear cut the forest then put ornamental green space whereas the old houses had the natural green space. Such a shame. American is basically designed to maximize use of cars

Walkable cities probably wouldn't really work in Canada because it's too cold for 6 months anyways


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## MrMatt

m3s said:


> Walkable cities probably wouldn't really work in Canada because it's too cold for 6 months anyways


What 6 months are that?
In Southern Ontario Jan & Feb are the only really cold months.

The argument that it's too cold for a walkable city is also suspect, it takes 5+ mins to clear and warm up your car. If the destination is only a 5 minute walk away, you might as well walk there.


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## m3s

MrMatt said:


> What 6 months are that?
> In Southern Ontario Jan & Feb are the only really cold months.
> 
> The argument that it's too cold for a walkable city is also suspect, it takes 5+ mins to clear and warm up your car. If the destination is only a 5 minute walk away, you might as well walk there.


Yea snowbirds spend 6 months in Florida for what reason?

Southern Ontario is warm relative to most of Canada but I didn't say Southern Ontario or Vancouver Island. It's all relative.

Why is southern ontario and Vancouver island so expensive anyways?


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## MrBlackhill

m3s said:


> Walkable cities probably wouldn't really work in Canada because it's too cold for 6 months anyways


They could, they could... Montreal is an example. Our bike paths are even cleared of snow during the winter. I'm at 5-10 minute walk of absolutely anything I need, it's such a great quality of life when you can simply walk to your destination and a huge time saver.



m3s said:


> Such a shame. American is basically designed to maximize use of cars


Yeah and Canada is doing the same which is also such a same. Every new residential development is simply tons of houses in the middle of nowhere and one road out of that huge residential sector to get you to the grocery store by car. Within the residential sector, there's literally nothing else than houses, other than maybe one park here and there.

I went in a rural area of France last spring to see family. They were living in a single-family family detached house in a residential area, yet we were able to walk to everything within 15 minutes (restaurants, cafés, grocery stores, bakeries, pubs, drugstores, etc), including public transport stations to big cities.


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## m3s

MrBlackhill said:


> I went in a rural area of France last spring to see family. They were living in a single-family family detached house in a residential area, yet we were able to walk to everything within 15 minutes (restaurants, cafés, grocery stores, bakeries, pubs, drugstores, etc), including public transport stations to big cities.


Those towns were probably designed before cars

It's just so much more interesting to have that variety of things within walking distance. Gas was more expensive but I also drove far less by car

I mean in new american residential areas people walk but mostly so their dog can sh!t in the small ornamental park


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## andrewf

m3s said:


> Walkable cities probably wouldn't really work in Canada because it's too cold for 6 months anyways


This is a fallacy. Northern Europe is cold and walkable. Even bikeable in winter.


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## MrMatt

m3s said:


> Yea snowbirds spend 6 months in Florida for what reason?
> 
> Southern Ontario is warm relative to most of Canada but I didn't say Southern Ontario or Vancouver Island. It's all relative.
> 
> Why is southern ontario and Vancouver island so expensive anyways?


What portion of Canadians live in Southern Ontario, Vancouver and Montreal?
It's not too cold for most Canadians to live in a walkable city.


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## m3s

MrMatt said:


> What portion of Canadians live in Southern Ontario, Vancouver and Montreal?
> It's not too cold for most Canadians to live in a walkable city.


This is funny

I made a comment about Canada being cold for 6 months. You replied that southern ontario is not cold for 6 months. I commented on southern ontario. Now you say southern ontario is not Canada  I could have made the same comment to you

Having just lived in the US I can tell you it's very different. People already started to heat their homes in October in Ontario.


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## m3s

Most Canadians live as close to the US border as possible to stay warm

Like moths on a lightbulb at night


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## MrMatt

m3s said:


> This is funny
> 
> I made a comment about Canada being cold for 6 months. You replied that southern ontario is not cold for 6 months. I commented on southern ontario. Now you say southern ontario is not Canada  I could have made the same comment to you
> 
> Having just lived in the US I can tell you it's very different. People already started to heat their homes in October in Ontario.


When did I say that southern Ontario is not Canada? It most assuredly is.

I was just pointing out that most of the Canadian population lives in areas that aren't very cold for extended periods of time.


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## MrBlackhill

m3s said:


> Canada being cold for 6 months.


It certainly is. Montreal, the coldest of the top 3 biggest cities in Canada, has 6 months with snow fall, 3 of them with average 30 cm of snow per month. (And Montreal is walkable, bikeable all year long)


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## m3s

I mean as a Canadian it was funny when americans think anything under 70f is "cold" but it's all relative

We already had frost and hit winter tire temps in Ottawa in late September. At 8c you're better off on winter tires for stopping. I still have performance summers on but it's time to change even though the law says mid-Nov and insurance requires it by mid-Dec I believe

So mid-Oct to mid-Apr people are using heat, dressing warmer and should have winter tires on. Yes it's not cold to a Canadian but if we're honest it isn't beach weather


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## sags

The numbers are tragic, but the medicine must be administered nevertheless.

When massive bubbles burst.......there will be suffering.





__





The correlation — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate







www.greaterfool.ca


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## m3s

sags said:


> The numbers are tragic, but the medicine must be administered nevertheless.
> 
> When massive bubbles burst.......there will be suffering.


Will we take the medicine, or will we bailout the GMs again sags?

California just started to direct deposit $1000 stimulus checks

Sounds like we will try the fiat printer again


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## james4beach

For me, at some point inflation is going to change from being a nuisance to a disaster. Rent in my area was stable in the years preceding the pandemic. While I stay at my current apartment, rent increases are limited, but "market rates" are going nuts. In terms of annual total $ rent for my kind of apartment:

2020 ... 19.8k
2021 ... 19.8k
2022 ... 27.6k
2023 ... 34.8k [ latest I heard from a property mgr I know ]

Look at that rate of increase in market rates for rent. Let's be generous and call that a 4 year time span, which makes it *15% annual increase*.

If I were to move today my annual housing cost would immediately increase by $15,000

I don't know about the rest of you but I don't have a spare $15,000 lying around.


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## MrBlackhill

As if inflation was not enough, credit card fees can now be charged to the consumer. Luckily for me, it doesn't apply to Quebec.





__





Loading…






www.cbc.ca


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## MrMatt

MrBlackhill said:


> As if inflation was not enough, credit card fees can now be charged to the consumer. Luckily for me, it doesn't apply to Quebec.
> 
> 
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> 
> www.cbc.ca


Wow, you seem to really misunderstand what is happening. You're still paying the credit card fees in Quebec, it's just hidden.

For the rest of the country, these fees suddenly became optional.

It's funny how someone can look at an increase in transparency and choice, and see that as a bad thing. Instead preferring opacity and lack of choice. You really do have a completely different perspective than me.


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## sags

Retailers don't necessarily pass on the hidden merchant fee to the customer.

In fact, I think that is the issue for retailers. They are paying the fees but not passing it on to their customers.

Retailers who have been passing on the hidden merchant fee should lower their product prices now.

I doubt if they will.


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## MrBlackhill

People don't get how capitalism works. The big names eat the small people. That's yet another example.

What's the profit margins of Visa and Mastercard? Crazy high.

Merchants kept asking to lower their fees. They barely reduced it.

Now, the solution? Passing on those fees to the consumers. Wow, amazing!

Bad guys here aren't the merchants nor the consumers, it's yet again the big corps Visa and Mastercard.

Transparency? What's the point of that transparency to the consumer? Why the need for transparency about that fee which was one of the many expenses the merchants had? Why not full transparency then from the merchants about all of their expenses billed within their pricing? They could detail how much of their employees salary, building expenses, storage expenses, transportation expenses is included within their price? And how much profit margin is within their pricing? Maybe merchants could pass on a salary fee for the cashier when I don't use a self-checkout? Nonsense. (After all, gas stations used to do that)

I don't think we'll see merchants reducing their prices by the amount of surcharge they can now pass on to their consumers.

It's simply a story of all the small merchants mad at the big corps Visa and Mastercard for their abusive fees and since those big corps want to keep all their crazy profit margins to themselves out of greed, the solution is to pass on those fees to the consumers instead. Nothing got solved.

People who use credit card because they live paycheck to paycheck (lots of people) won't be happy to see those fees, so their behaviour will change and merchants may end up on the losing side from that behavioural change. As if people living paycheck to paycheck could use an alternative... They don't have the money, period, that's why they use a credit card! In the end, both the merchants and the consumers are on the loosing side, while obviously the big corps Visa and Mastercard are yet again the winners.

Wonderful strategy, again...


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## MrMatt

MrBlackhill said:


> People don't get how capitalism works. The big names eat the small people. That's yet another example.
> 
> What's the profit margins of Visa and Mastercard? Crazy high.
> 
> Merchants kept asking to lower their fees. They barely reduced it.
> 
> Now, the solution? Passing on those fees to the consumers. Wow, amazing!


No, the solution is to let the consumers know the cost of the service they are demanding, and let them decide if they want to pay for that service or not.

Right now consumers use credit cards because they are "free", and give "free money".
All that is changing is the vendors are allowed to charge the consumers the fees.



> Transparency? What's the point of that transparency to the consumer?


They can decide if the service is worth the fee being charged.



> Why the need for transparency about that fee which was one of the many expenses the merchants had? Why not full transparency then from the merchants about all of their expenses billed within their pricing? They could detail how much of their employees salary, building expenses, storage expenses, transportation expenses is included within their price? And how much profit margin is within their pricing? Maybe merchants could pass on a salary fee of the cashier when I don't use a self-checkout? Nonsense. (After all, gas stations used to do that)


I think that if a business wants to do that, they should be free to do so.
And if a customer wants to opt out of some of those services, and it's mutually agreeable, that's fine too.



> It's simply a story of all the small merchants mad at the big corps Visa and Mastercard for their abusive fees and since those big corps want to keep all their crazy profit margins to themselves out of greed, the solution is to pass on those fees to the consumers instead. Nothing got solved.


Sure, the consumers will see the cost of credit cards, and they'll either happily pay it, or switch to lower cost alternatives.
The credit card companies now need to prove the value of the service they offer.



> People who use credit card because they live paycheck to paycheck (lots of people) won't be happy to see those fees, so their behaviour will change and merchants may end up on the losing side from that behavioural change. In the end, both the merchants and the consumers are on the loosing side, while obviously the big corps Visa and Mastercard are yet again the winners.


People use credit cards because they look like they're "free".
This breaks the illusion.

The thing is, if it costs 2.4% to use a credit card, the person making the choice is also the person paying the fee. 
Decisions are often better when the decision maker is also the person who has to deal with the consequences of the decision.




> Wonderful strategy, again...


Yes, it's a great strategy. Make the person who chooses to use a credit card pay the cost of doing so.

Unfortunately those in Quebec won't benefit from this agreement.


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## james4beach

Good news, Tiff Macklem wants to restore price stability! lol

Released today









Restoring price stability for all Canadians


Governor Tiff Macklem explains how inflation in Canada reflects more and more what’s happening with domestic demand and what the Bank is watching as it works to bring inflation back to the 2% target.




www.bankofcanada.ca


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## AlwaysMissingTheBoat

james4beach said:


> Good news, Tiff Macklem wants to restore price stability! lol
> 
> Released today
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Restoring price stability for all Canadians
> 
> 
> Governor Tiff Macklem explains how inflation in Canada reflects more and more what’s happening with domestic demand and what the Bank is watching as it works to bring inflation back to the 2% target.
> 
> 
> 
> 
> www.bankofcanada.ca


And I'd like the world to live in peace and harmony! In fact, I'd like to buy the world a Coke (but only if price stability resumes).


----------



## sags

Coke is the real thing!


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## MrMatt

james4beach said:


> Good news, Tiff Macklem wants to restore price stability! lol
> 
> Released today


Yeah, I'm sure he does.
But he lacks the ability to do so, the bank can do little more than play in credit markets.
They have no ability to stop the inflationary pressure being generated by the Federal government. Until that subsides, it's only going to get worse.

Alternatively we'll have massive imbalance with inflation on some parts of the economy, due to government action, and deflation in the rest of the economy, averaging out to a number that looks okay, but due to all the market distortion leaves us in even worse shape.


----------



## james4beach

MrMatt said:


> They have no ability to stop the inflationary pressure being generated by the Federal government.


I disagree. I think 0% interest rates and housing market stimulus (they bought mortgage bonds) is a significant cause of inflation. Certainly not the only cause, but it's a significant one.

Canadians went absolutely crazy with the 1% mortgages, plus everyone has drawn on HELOCs and gone crazy with the spending. I don't even have a house but I had an unsecured LOC at only 4% interest. There was way too much easy money.

They need to keep interest rates high, and it will extinguish all this.


----------



## Covariance

I think you are both correct. Stimulative monetary policy AND massive fiscal stimulus. Only one seems to have reversed course however. (And if they really wanted to do something - how about lowering our cell phone bills like they promised.)


----------



## kcowan

If JT and Macklin could fulfill any of their empty promises, I would be a happy camper.

The BOC, RCMP, Judges and Legacy Media, all willing pawns of our King Trudeau.

(Have you noticed any similarity between Hockey Canada and the RCMP in denying abuse charges?)


----------



## m3s

kcowan said:


> If JT and Macklin could fulfill any of their empty promises, I would be a happy camper.
> 
> The BOC, RCMP, Judges and Legacy Media, all willing pawns of our King Trudeau.
> 
> (Have you noticed any similarity between Hockey Canada and the RCMP in denying abuse charges?)


Institutional trust is at an all time low @kcowan

CDS/DM just posted a Directive For CAF Reconstitution

It's well written but time will tell if it's more empty words


----------



## Faramir

londoncalling said:


> Although the recent inflation numbers are higher than what we have seen in quite sometime, I am puzzled by how some people are surprised by it. Many economists and posters here had predicted this increase due to all the money printing that took place during the pandemic. In some ways people have been warning about inflation since the end of the great recession. Regardless, the inflation has given me an opportunity to reassess my portfolio. Obviously, equities with no or low debt will be better off than those with higher debt to equity. Are any active investors making adjustments to the allocation or tilting their equity to certain sectors?


What is surprising is that it took so long. Plenty of monetary expansion throughout the Clinton administration, then the Bush years, ect, and somehow it never played out as serious price inflation. Actually in inflationary periods debt is easier to manage - theoretically anyways.


----------



## Faramir

MrBlackhill said:


> As if inflation was not enough, credit card fees can now be charged to the consumer. Luckily for me, it doesn't apply to Quebec.
> 
> 
> 
> 
> 
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> 
> Loading…
> 
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Yeah, I can't imagine that will build much goodwill with stores. Canadian Tire starts charging fees then just go to Walmart. Or Home Depot.


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## Faramir

kcowan said:


> If JT and Macklin could fulfill any of their empty promises, I would be a happy camper.
> 
> The BOC, RCMP, Judges and Legacy Media, all willing pawns of our King Trudeau.
> 
> (Have you noticed any similarity between Hockey Canada and the RCMP in denying abuse charges?)


Yeah he's a clown. STILL waiting for my son's passport we applied for in May. And his solution for inflation is with the GST credit will not benefit middle income families. The RCMP problems are much like the FBI problems south of the border. Politicized and no scrutiny from anyone.


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## AlwaysMissingTheBoat

I'll just leave this here...


__ https://twitter.com/i/web/status/1578186828196171776


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## sags

Stock market crash tomorrow ?


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## MrMatt

kcowan said:


> If JT and Macklin could fulfill any of their empty promises, I would be a happy camper.
> 
> The BOC, RCMP, Judges and Legacy Media, all willing pawns of our King Trudeau.
> 
> (Have you noticed any similarity between Hockey Canada and the RCMP in denying abuse charges?)


I think they're taking "Full responsibility" just like Dear leader.


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## sags

OAS benefits rise 2.8% for Oct - December period due to quarterly indexing to cost of living.

Official inflation rate must still be high.


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## james4beach

sags said:


> Stock market crash tomorrow ?


I doubt it. Friday was a big drop but it was just un-doing a few days of gains. Also, market volume (# of shares traded) on major indexes really looks pretty normal. It does not show the intense selling that tends to show real panic.

The economy is also looking strong. The US reported jobs numbers on Friday and the unemployment rate actually declined. This isn't a story of stocks dropping because the economy is on shaky ground, and I think that should be comforting.

*However*, I think Russia/NATO war escalation is on the table as is a new Cold War nuclear standoff. If some news like that happens, yes, I think the market would crash. Lately I have been losing sleep about the possibility of nuclear war. The smart thing to do would be to de-escalate and detente, but I'm told by everyone that we're all tough men who don't fear death, so don't be surprised if the stock market crashes as war rhetoric and threats amp up. Apparently detente is only for sissies who want their children to live.



sags said:


> OAS benefits rise 2.8% for Oct - December period due to quarterly indexing to cost of living.


That's great news, looks like it's keeping up with inflation. Yes the Canadian inflation rate is still very high, though thankfully ours is one of the lowest among developed nations.


----------



## sags

Inflation is sill being driven by supply chain disruptions, global oil prices, labor shortages, and the war in Ukraine.

All the background noise about "money printing" and "government spending" is political clap trap or economic gibberish.

Inflation will return to the trend line as soon as the outstanding issues are resolved.

_Statistics Canada reported__ on Sept. 20 that inflation is up nearly 11 per cent across all retail food items. One of the main drivers is still *supply-chain disruptions* caused by the COVID-19 pandemic, complicated by* labour shortages*. Another factor is Russia's *war in Ukraine*, which has driven up commodity prices. _





__





Loading…






www.cbc.ca


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## m3s

sags said:


> Inflation is sill being driven by supply chain disruptions, global oil prices, labor shortages, and the war in Ukraine.
> 
> All the background noise about "money printing" and "government spending" is political clap trap or economic gibberish.
> 
> Inflation will return to the trend line as soon as the outstanding issues are resolved.
> 
> _Statistics Canada reported__ on Sept. 20 that inflation is up nearly 11 per cent across all retail food items. One of the main drivers is still *supply-chain disruptions* caused by the COVID-19 pandemic, complicated by* labour shortages*. Another factor is Russia's *war in Ukraine*, which has driven up commodity prices. _
> 
> 
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Oil prices are down saggy man and supply chain shipping containers are dirt cheap now - lots of retail is over stocked

Money supply also stayed flat in the US this year. Things take time to adjust but you're a complete clown if you don't think money printing impacts inflation

Of course you have indexed pension and rent capped at 2.5% so it's hard to see


----------



## sags

You can go ahead and dismiss all the factors cited by CEOs, expert sector analysts, economists, and big fund managers and stick with the crypto dudes, Pierre P, and conspiracy bloggers if that is your preference.

Doesn’t change the facts though.


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## sags

Governments have been stimulating the economy since 2008 and there was no inflation at all.

What changed all of a sudden ?

Uh….. Covid maybe ?

War in Ukraine maybe ?

Droughts and labour shortages maybe ?


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## m3s

sags said:


> You can go ahead and dismiss all the factors cited by CEOs, expert sector analysts, economists, and big fund managers and stick with the crypto dudes, Pierre P, and conspiracy bloggers if that is your preference.
> 
> Doesn’t change the facts though.


You mean CNBC?

Everyone knows mainstream media is propaganda saggy.

You clearly don't know what a fact is


----------



## m3s

sags said:


> Governments have been stimulating the economy since 2008 and there was no inflation at all.
> 
> What changed all of a sudden ?
> 
> Uh….. Covid maybe ?
> 
> War in Ukraine maybe ?
> 
> Droughts and labour shortages maybe ?


I'll post this graph again so you can see what changed in 2020

I know you don't understand how graphs work though


----------



## londoncalling

m3s said:


> I'll post this graph again so you can see what changed in 2020
> 
> 
> View attachment 23729


----------



## sags

That is a graph of the US M1 money supply that is in circulation and held in various accounts considered readily accessible.

In May 2020, the US began including savings accounts of all kinds, so it isn't surprising there was a big spike in the amount.

MI is no longer considered as a reliable metric to be used by economists as it's relationship to other economic components is questionable.

_For periods of time, measurement of the money supply indicated a close relationship between money supply and some economic variables such as the gross domestic product (GDP), inflation, and price levels. Economists such as Milton Friedman argued in support of the theory that the money supply is intertwined with all of these variables.

*However, in the past several decades, the relationship between some measurements of the money supply and other primary economic variables has been uncertain at best. Thus, the significance of the money supply acting as a guide for the conduct of monetary policy in the United States has substantially lessened.*



https://www.investopedia.com/terms/m/m1.asp


_


----------



## m3s

sags said:


> That is a graph of the M1 money supply that is in circulation and held in various accounts considered readily accessible.
> 
> In May 2020, the US began including savings accounts of all kinds, so it isn't surprising there was a big spike in the amount.
> 
> MI is no longer considered as a reliable metric to be used by economists as it's relationship to other economic components is questionable.
> 
> _For periods of time, measurement of the money supply indicated a close relationship between money supply and some economic variables such as the gross domestic product (GDP), inflation, and price levels. Economists such as Milton Friedman argued in support of the theory that the money supply is intertwined with all of these variables.
> 
> *However, in the past several decades, the relationship between some measurements of the money supply and other primary economic variables has been uncertain at best. Thus, the significance of the money supply acting as a guide for the conduct of monetary policy in the United States has substantially lessened.*
> 
> 
> 
> https://www.investopedia.com/terms/m/m1.asp
> 
> 
> _


Yes there is no transparency to fiat money supply

If only there was an asset that is issued by known mathematical formula rather than a few dusty old boomers behind closed doors

It's cute that you learned how to google m1 and copy/paste some of it here. You should read more often


----------



## sags

It would be cuter if you learned something about what you post before you post it.

That is a graph that has circulated around cypto dude bloggers media .....so I note your reference to crypto as the magic solution to all financial troubles.

Some day you should study how shortage of supply of products in demand causes price inflation.....like when there are supply chain problems.

And for goodness sakes.....stay away from get rich quick schemes for your own good.


----------



## m3s

sags said:


> It would be cuter if you learned about what you post before you post it.


I try to be polite. But you don't really deserve it

You're not very intelligent and I could easily point out why here on this topic. You barely scratched the surface of a topic with about 30 seconds of google.

You should do a lot more reading and far less typing, or in this case copy/pasting


----------



## sags

Peter Schiff made an interesting observation.

When Paul Volker was the Fed Chair and enacted higher interest rates to respond to inflation........inflation was 13% and he raised rates to 20%.

Currently, interest rates are still well below the rate of inflation. This is not "aggressive" rate hikes. It is dabbling and only adds to the inflationary pressure.

The problem for the Fed today is the amount of debt in the economy.

The US savings rate is the lowest in history. People are depleting savings to pay their monthly bills. Credit charges increased by $17 billion last month.

The level of interest rates required to crush inflation would cause a very deep recession, perhaps a depression like scenario.

So the Fed is going to increase interest rates a little......to show they are trying, but in reality they are going to let inflation run.


----------



## sags

The main sources of inflation......food, housing and energy are only made worse by raising interest rates.

The Fed should stop raising interest rates and let inflation run its course.

To continue doing what they are doing......raising interest rates slowly will cause a recession with inflation at the same time.


----------



## scorpion_ca

sags said:


> The Fed should stop raising interest rates and let inflation run its course.


And then the mighty USA becomes Turkey with 83% inflation.


----------



## sags

True.......inflation could run very high, but would that not be required to wring all the excess valuations out of markets ?

Even with the latest losses....homes have lost what......one or two years of past price increases. Are homes worth the current prices ?

Is Telsa worth the current price........more than many other automakers who produce millions of vehicles globally ? Are bitcoins worth $20,000 ?

Not a huge market but an indicator.....vintage (rare.....high value cards) have plummeted in price. The losses are over 50% in a year and falling.

NFTs that people paid millions to own are becoming worthless. Again....niche investments but informative on the financial mindset as it exists.

We had a few years of "bubble everything" and it will take high inflation to halt demand and reverse prices to historic levels.

Will it be bad.......really bad ? 

Oh yea......but the other choice is an economy with a recession AND inflation AND high interest rates, and that would be a worse situation.

I don't see any solution that won't be bad, but would be very happy to be proven wrong.


----------



## nathan79

sags said:


> The main sources of inflation......food, housing and energy are only made worse by raising interest rates.
> 
> The Fed should stop raising interest rates and let inflation run its course.
> 
> To continue doing what they are doing......raising interest rates slowly will cause a recession with inflation at the same time.


IMO they can and will keep raising rates as long as employment remains high, but it could get interesting once people start losing jobs. Some people carrying loads of debt are going to get rekt for sure, but it's not the Fed's (or BoC's) job to save people from themselves.


----------



## potato69

nathan79 said:


> IMO they can and will keep raising rates as long as employment remains high, but it could get interesting once people start losing jobs. Some people carrying loads of debt are going to get rekt for sure, but it's not the Fed's (or BoC's) job to save people from themselves.


I don't think so. Inflation is the ultimate economy killer. With inflation - everyone is getting poorer all the time if wages do not keep pace and they don't.

If job losses start occuring and inflation is still well elevated, rate increases will not stop.


----------



## sags

US Social Security benefits will go up 8.7% in January.

The fund is near bankruptcy already.

The wheels are coming off in the US.


----------



## james4beach

nathan79 said:


> IMO they can and will keep raising rates as long as employment remains high, but it could get interesting once people start losing jobs. Some people carrying loads of debt are going to get rekt for sure, but it's not the Fed's (or BoC's) job to save people from themselves.


I'd say the bigger issue is once the real estate industry and banks put big pressure on the BoC. The BoC has always loved the housing market and wants to prop up home prices, which is the main reason I'm skeptical that the rate increases will continue.

I think we could find ourselves in the situation where inflation remains high but the BoC stops hiking rates, and I would suspect the bank and real estate industry lobbyists and insiders at the BoC & government. Banks absolutely loved those near-zero interest rates and were able to hand out credit like candy.

It scares me, because once they stop fighting inflation, we could end up with something like 6% inflation for the next 10-20 years.

Rich people (investors) would be fine because investments would likely outperform inflation. Poor people and the middle class would be absolutely destroyed, because nobody is going to get 6% wage increases each year.


----------



## m3s

nathan79 said:


> IMO they can and will keep raising rates as long as employment remains high, but it could get interesting once people start losing jobs. Some people carrying loads of debt are going to get rekt for sure, but it's not the Fed's (or BoC's) job to save people from themselves.


We already see political pressure on the Fed in the US. Even though it should be separate let's be honest the economy has a massive impact on voters

If people get rekt from carrying too much debt that means the banks get rekt from loaning too much money to those people. Most of the Canadian GDP is RE and finances. The largest block of the TSX market cap by far is the banks and financial services

That means Canadian debt to GDP gets rekt and then the debt is a political issue. The short term solution is always to print more fiat and who can resist that cake


----------



## james4beach

m3s said:


> That means Canadian debt to GDP gets rekt and then the debt is a political issue. The short term solution is always to print more fiat and who can resist that cake


This is a *really* strong argument for always staying invested in risk assets (stocks and commodities), because it seems almost inevitable that the BoC will give into these pressures. The western world is addicted to debt and cheap interest rates and will not give it up.

Loading up on cash, not investing it, is potentially very dangerous. Watch the central banks slash interest rates again or resume QE, all then cash plummets in relation to other assets.

As bearish as I am, I'm remaining fully invested in my portfolio. I do keep enough cash just for immediate living expenses and my business cashflow needs.


----------



## m3s

james4beach said:


> This is a *really* strong argument for always staying invested in risk assets (stocks and commodities), because it seems almost inevitable that the BoC will give into these pressures. The western world is addicted to debt and cheap interest rates and will not give it up.
> 
> Loading up on cash, not investing it, is potentially very dangerous. Watch the central banks slash interest rates again or resume QE, all then cash plummets in relation to other assets.
> 
> As bearish as I am, I'm remaining fully invested in my portfolio. I do keep enough cash just for immediate living expenses and my business cashflow needs.


A lot of people are calling for a sovereign debt crisis

Countries can't afford high debt themselves with these rising rates and we are already seeing the weakest countries crack. Maybe the Fed lets everyone else collapse first but then they should finally realize the USD benefits the US the most. If demand for USD collapses that the end of the US power which is why they spend so much protecting it with military

I think what is coming is a wealth tax for the US, UK, Can and EU. Something like 1% per year on all assets above $1M. This is also short sighted and the ultra wealthy will flee


----------



## andrewf

james4beach said:


> This is a *really* strong argument for always staying invested in risk assets (stocks and commodities), because it seems almost inevitable that the BoC will give into these pressures. The western world is addicted to debt and cheap interest rates and will not give it up.
> 
> Loading up on cash, not investing it, is potentially very dangerous. Watch the central banks slash interest rates again or resume QE, all then cash plummets in relation to other assets.
> 
> As bearish as I am, I'm remaining fully invested in my portfolio. I do keep enough cash just for immediate living expenses and my business cashflow needs.


I have negative fixed income allocation, in the form of a mortgage. High inflation/negative real interest rates is working okay for me for now.


----------



## andrewf

Cathy Woods is not impressed with the Fed. I do get the feeling that the Fed is being run a bit carelessly at the moment.


----------



## Covariance

deleted


----------



## m3s

Data driven Fed:


----------



## m3s

I guess we're officially at the "Why did the government allow this to happen??" stage


----------



## nathan79

andrewf said:


> Cathy Woods is not impressed with the Fed. I do get the feeling that the Fed is being run a bit carelessly at the moment.


She's desperate for a pivot.


----------



## nathan79

james4beach said:


> I'd say the bigger issue is once the real estate industry and banks put big pressure on the BoC. The BoC has always loved the housing market and wants to prop up home prices, which is the main reason I'm skeptical that the rate increases will continue.
> 
> I think we could find ourselves in the situation where inflation remains high but the BoC stops hiking rates, and I would suspect the bank and real estate industry lobbyists and insiders at the BoC & government. Banks absolutely loved those near-zero interest rates and were able to hand out credit like candy.
> 
> It scares me, because once they stop fighting inflation, we could end up with something like 6% inflation for the next 10-20 years.
> 
> Rich people (investors) would be fine because investments would likely outperform inflation. Poor people and the middle class would be absolutely destroyed, because nobody is going to get 6% wage increases each year.


Yeah, I always have the same nagging fears, but I chalk it up to recency bias. The BoC "love" for housing prices coincided with 30 years of low inflation. Now that we're in a high inflation environment it adds an element of unpredictability.


----------



## nathan79

m3s said:


> We already see political pressure on the Fed in the US. Even though it should be separate let's be honest the economy has a massive impact on voters
> 
> If people get rekt from carrying too much debt that means the banks get rekt from loaning too much money to those people. Most of the Canadian GDP is RE and finances. The largest block of the TSX market cap by far is the banks and financial services
> 
> That means Canadian debt to GDP gets rekt and then the debt is a political issue. The short term solution is always to print more fiat and who can resist that cake


It's going to be interesting to watch for sure.

I'm always amazed by how much debt people have, but somehow they manage to make the payments. Lenders won't know something is wrong until the payments stop.

Maybe a good indicator will be when the boats and RVs start piling up on the market and selling for deep discounts.


----------



## james4beach

nathan79 said:


> Yeah, I always have the same nagging fears, but I chalk it up to recency bias. The BoC "love" for housing prices coincided with 30 years of low inflation. Now that we're in a high inflation environment it adds an element of unpredictability.


Thanks, that's a very good point!


----------



## james4beach

m3s said:


> Data driven Fed


Did you hear? Now they give Nobel Prizes for that! And remember, they gave Alan Greenspan a knighthood. Can't make this stuff up, like it's straight out of a comedy.

Sir Alan Greenspan pumped the market in the 90s, leading to a massive dot com bubble.
Any turmoil was met with Greenspan's intervention. It came to be known as "The Greenspan Put".
Then when the bubble crashed, he started to pump up the housing market, even directly endorsing ARMs.
The housing bubble grew to immense proportions, and it crashed too.
Almost wiped out the entire US economy -- again!
Helicopter Ben came to the rescue, brought rates to zero *again*, and then started QE.
QE grew to heights never imagined before... while economists cheered and cheered.

There should be public beatings. Instead, they gave Bernanke a Nobel Prize.


----------



## m3s

james4beach said:


> There should be public beatings. Instead, they gave Bernanke a Nobel Prize.


Boomers

I guess they can't all be called the Greatest Generation. But who expected the empire to be destroyed in a single generation

Thanks boomers


----------



## AlwaysMissingTheBoat

This sounds a tad concerning...


__ https://twitter.com/i/web/status/1579922436321075226


----------



## MrMatt

AlwaysMissingTheBoat said:


> This sounds a tad concerning...
> 
> 
> __ https://twitter.com/i/web/status/1579922436321075226


You mean you can't solve broad based economic and government policy problems by tweaking interest rates?

Who knew.... oh pretty much everyone!


----------



## andrewf

AlwaysMissingTheBoat said:


> This sounds a tad concerning...
> 
> 
> __ https://twitter.com/i/web/status/1579922436321075226


I'm not sure this is true. The used auto market has rolled over.


----------



## m3s

andrewf said:


> I'm not sure this is true. The used auto market has rolled over.


And things like lumber

But the goal is for things to "soft land" back to 2% inflation which means they continue to go up at 2% rate. Going down would be deflation. Thing is economics lag.

Fed is trying to soft land a plane by adjusting the air density or something


----------



## sags

And so it begins.......

Also could be called the "We paid too much for our house and are screwed" petition.









Sign the Petition


Home Owner's Relief | Aide aux propriétaires de maison




www.change.org


----------



## james4beach

sags said:


> And so it begins.......


lol thanks, that made my day brighter.

P.S. I personally helped lobby the BC government to introduce that cap they're complaining about (I met with my MLA and also was able to get a phone call with the Housing Minister). However I actually argued for a 3% or 4% cap. The government decided to cap it even lower.


----------



## londoncalling

m3s said:


> I guess we're officially at the "Why did the government allow this to happen??" stage


I like the cheat sheet but I think many are still in the "this dip is taking longer than expected part of the cycle" or perhaps the early days of "they will come back".


----------



## nathan79

londoncalling said:


> I like the cheat sheet but I think many are still in the "this dip is taking longer than expected part of the cycle" or perhaps the early days of "they will come back".


Yeah, it seems like Denial right now. There's definitely some Anger being expressed, but it doesn't feel like we've seen Panic or Capitulation yet. We're definitely a long way from Depression - there's still quite a bit of optimism out there. It seems like any bit of "not bad" news causes a rally. The Fed hiking 75 basis points is considered positive because it's not worse than expected.


----------



## Covariance

We have not yet gotten to the recession, contraction yet. In the real economy that’s where the pain lies. Asset markets are forecasting venues so the bottom comes after darkness and the end of the tunnel is in sight.


----------



## Covariance

m3s said:


> And things like lumber
> 
> But the goal is for things to "soft land" back to 2% inflation which means they continue to go up at 2% rate. Going down would be deflation. Thing is economics lag.
> 
> Fed is trying to soft land a plane by adjusting the air density or something


I expect many on the Fed have given up on the soft landing (which incidentally was 2% inflation, no recession). It's just no longer part of the dialogue. Higher, longer and hold it there until demand drops enough (below potential) to bring down inflation. We will see.


----------



## sags

The 30 year fixed rate mortgage is now an average of 7.1%. It was 3% only 6 months ago. The housing sentiment index is the lowest since 2012.

If it is any indication of where Canadian interest rates are heading, homes will fall considerably more in value.


----------



## Beaver101

^ Now the youngsters can stop b1tching about not being able to afford buying a home? No? They should be happy if not super-happy that housing prices are dropping ... dropping ... falling. Too bad for the realtors though.


----------



## sags

There are 40,000 real estate agents in the GTA standing around waiting for the phone to ring.

We know a couple who sold 2 homes at the all time high for $1.5 million total. They bought homes in Spain for $300,000 cash and have $1 million in the bank.

They are living the good life. Some people made out like bandits.


----------



## sags

A lot of people thought that interest rates "couldn't go up" because it would crush real estate. They were wrong, as it happened before.

In the 1980s, interest rates were 20% and inflation was 13%. Others disagree but I think GICs could once again pay higher interest than inflation.


----------



## m3s

sags said:


> There are 40,000 real estate agents in the GTA standing around waiting for the phone to ring.
> 
> We know a couple who sold 2 homes at the all time high for $1.5 million total. They bought homes in Spain for $300,000 cash and have $1 million in the bank.
> 
> They are living the good life. Some people made out like bandits.


This is the way to do it

Cost of living is much lower and weather is much better. My landlord bought new builds probably around the peak and due to interest rate increases his mortgage payments are higher than the rent now. I'm happy to rent and be able to trade in more liquid markets

Increasing rates will crush real estate. Volume and liquidity in RE has already dried up


----------



## sags

It takes a long time for real estate to reach bottom in a crash.

People hang on until renewals shake them out or the home is an estate sale or some other reason.

There could also be government intervention with 50 or 100 year mortgages.


----------



## m3s

sags said:


> There could also be government intervention with 50 or 100 year mortgages.


Every time the government intervenes in a market it causes 2nd and 3rd order effects they do not understand

At least the military now recognizes that nobody can predict 2nd and 3rd order effects with any useful accuracy

The free market is very well designed to manage supply and demand organically.. unless someone "intervenes"


----------



## AlwaysMissingTheBoat

^ It's kinda nice to see you two agree on something every now and then. That is all.


----------



## m3s

AlwaysMissingTheBoat said:


> ^ It's kinda nice to see you two agree on something every now and then. That is all.


----------



## andrewf

Beaver101 said:


> ^ Now the youngsters can stop b1tching about not being able to afford buying a home? No? They should be happy if not super-happy that housing prices are dropping ... dropping ... falling. Too bad for the realtors though.


Realtors only care about transactions. They don't really care if the price goes up or down.


----------



## andrewf

sags said:


> Others disagree but I think GICs could once again pay higher interest than inflation.


I find it amusing that you are only hoping for a breakeven real return on GICs.


----------



## MrBlackhill

Yeah, I agree, good luck with GICs.























__





Loading…






www.google.com









__





Monthly Market Insights | Meridian Credit Union


Monthly Market Insights from Aviso Wealth



www.meridiancu.ca


----------



## sags

Our personal rate of inflation is nowhere near the official rate.

COLA increases to income exceed the inflation we pay, because they are based on the official numbers and not on what we actually pay.

Capital preservation of savings is the goal.


----------



## sags

Curious….

If the inflation rate is 8% do people think they lost 8% of their total income to inflation and need an 8% raise to balance it out ?


----------



## AlwaysMissingTheBoat

*Still* a double-digit problem in the UK.


__ https://twitter.com/i/web/status/1582622690996797440


----------



## MrBlackhill

sags said:


> Curious….
> 
> If the inflation rate is 8% do people think they lost 8% of their total income to inflation and need an 8% raise to balance it out ?


Yes, what matters obviously isn't how much money you have/make, but what it means in purchasing power.

If I had $50,000 net income, $30,000 (60%) used for my expenses and $20,000 (40%) for my savings, and next year inflation is 10% and my wage increase is 5%, then:

My net income is now $52,500
My expenses are now $33,000 (63%)
My savings are reduced to $19,500 (37%)
Even though I'm saving almost the same dollar amount, it now buys 10% fewer goods and services
I mean, with $20,000 I could buy 10,000 things at 2$, now with $19,500 I can buy 8,863 of those same things now costing $2.20. My savings actually buys me -11.37% fewer things.

And if to some people their personal inflation is less than CPI, we should expect that to some other people their personal inflation is above CPI, as it's an average measure of the aggregate consumers.

Note that it's even worse if your expenses are a higher proportion. If your expenses are $40,000 (80%) and savings $10,000 (20%), then as your income becomes $52,500 (5% wage increase), your expenses are now $44,000 (84% of income, 10% inflation), your savings are now $8,500 (16% of income). Your savings can now buy you -23% fewer things.

It also means that every year that you are behind inflation, that effect compounds as your expenses proportion becomes bigger and bigger while your savings proportion becomes smaller and smaller, while at the same time buying you fewer things.

What if your income was $30,000, you had $29,000 expenses, $1,000 savings, now your income is $31,500 (5% wage increase), your expenses $31,900 (10% inflation)...


----------



## nathan79

Inflation came in above expectations for September... down 0.1% from August to 6.9%.





__





Loading…






www.cbc.ca





Only four provinces saw a decrease in September (Newfoundland & Labrador, Nova Scotia, New Brunswick and Quebec). All other provinces were either flat or up compared to August. British Columbia and Saskatchewan saw inflation accelerate by 0.5% and 0.6% respectively, to 7.7% and 7.1%.





__





Consumer Price Index, major components and special aggregates, Canada – Not seasonally adjusted


none




www150.statcan.gc.ca









__





Consumer Price Index for the provinces and for Whitehorse, Yellowknife and Iqaluit – Not seasonally adjusted


none




www150.statcan.gc.ca


----------



## cainvest

sags said:


> If the inflation rate is 8% do people think they lost 8% of their total income to inflation and need an 8% raise to balance it out ?


In simplistic terms ... Yes.


----------



## Covariance

MrBlackhill said:


> Yes, what matters obviously isn't how much money you have/make, but what it means in purchasing power.
> 
> If I had $50,000 net income, $30,000 (60%) used for my expenses and $20,000 (40%) for my savings, and next year inflation is 10% and my wage increase is 5%, then:
> 
> My net income is now $52,500
> My expenses are now $33,000 (63%)
> My savings are reduced to $19,500 (37%)
> Even though I'm saving almost the same dollar amount, it now buys 10% fewer goods and services
> I mean, with $20,000 I could buy 10,000 things at 2$, now with $19,500 I can buy 8,863 of those same things now costing $2.20. My savings actually buys me -11.37% fewer things.
> 
> And if to some people their personal inflation is less than CPI, we should expect that to some other people their personal inflation is above CPI, as it's an average measure of the aggregate consumers.
> 
> Note that it's even worse if your expenses are a higher proportion. If your expenses are $40,000 (80%) and savings $10,000 (20%), then as your income becomes $52,500 (5% wage increase), your expenses are now $44,000 (84% of income, 10% inflation), your savings are now $8,500 (16% of income). Your savings can now buy you -23% fewer things.
> 
> It also means that every year that you are behind inflation, that effect compounds as your expenses proportion becomes bigger and bigger while your savings proportion becomes smaller and smaller, while at the same time buying you fewer things.
> 
> What if your income was $30,000, you had $29,000 expenses, $1,000 savings, now your income is $31,500 (5% wage increase), your expenses $31,900 (10% inflation)...


Great summary that really illustrates how hard inflation is on those with no/low discretionary spending. As an aside, and to put salt on the wound, what people clear after tax and payroll deductions is probably lower due to indexing of deductions and progressively higher marginal rates.


----------



## damian13ster

AlwaysMissingTheBoat said:


> *Still* a double-digit problem in the UK.
> 
> 
> __ https://twitter.com/i/web/status/1582622690996797440


Can you imagine where it would be if they actually had market-priced energy rather than tack on debt to subsidize it?


----------



## AlwaysMissingTheBoat

damian13ster said:


> Can you imagine where it would be if they actually had market-priced energy rather than tack on debt to subsidize it?


True. There are some BIG problems over there. Not great here, but the UK and Europe in general are very suspect in their ability to weather the storm.


----------



## m3s

cainvest said:


> In simplistic terms ... Yes.


sags doesn't understand this because his rent is capped at 2.5% increase and his DB pension is indexed

He said his rent increased by $26/month. Simple math means that sags is paying about $1000/month rent when average rent in Canada is now 2x that amount. I'm sure sags landlord wishes him well.

This market interference will always have 2nd and 3rd order effects. For example sags not understanding inflation


----------



## cainvest

Covariance said:


> Great summary that really illustrates how hard inflation is on those with no/low discretionary spending.


Yes, those that can't afford to save money (i.e. all money goes to pay for living expenses) truely need an equal increase in pay to compensate for inflation.


----------



## sags

cainvest said:


> Yes, those that can't afford to save money (i.e. all money goes to pay for living expenses) truely need an equal increase in pay to compensate for inflation.


They all work for the same employers, so everyone gets the increases.........need it or not.

Like I posted......everyone gets cost of living increases to OAS and CPP......if they need it to keep pace with inflation or not.

If the government gave us a 2% annual increase it would pay our inflation costs. At current rates they are giving us a 10% increase.

That is an inherent problem with blanket increases.


----------



## cainvest

sags said:


> They all work for the same employers, so everyone gets the increases.........need it or not.


In what world does everyone working get a raise due to inflation? Answer ... None.

Government (possible, maybe even likely)
Union (depends on contract, usually COLAs are locked in for the term)
Private sector (between not likely to no chance in hell)


----------



## AltaRed

cainvest said:


> Yes, those that can't afford to save money (i.e. all money goes to pay for living expenses) truely need an equal increase in pay to compensate for inflation.


That is where targeted (means tested) support is a compassionate response that I can accept. We want lower income families to be able to feed themselves. What I can't accept is blanket OAS increases to 75+, blanket reductions in gas tax, mailing of cheques to all households, etc. Politicians are the rogues of monetary policy and must cause BoC heartburn.


----------



## KaeJS

Sags,

Have you lost your mind?


----------



## sags

KaeJS said:


> Sags,
> 
> Have you lost your mind?


Do you support handing out government cheques to everyone, regardless of the need ?

My wife got a 10% increase to her OAS this year (in addition to the quarterly cola increase) because she turned 75. How does that make any sense ?

Just because the official inflation rate is 8% doesn't mean that everyone is spending 8% more of their income to stay current.

If a person doesn't drive a vehicle......they aren't paying the inflation on gas prices.......for example.

A "one size fits all" solution isn't an efficient way to address inflation costs.


----------



## james4beach

Canadian CPI was reported today. The troubling part is that *Core CPI* came in much higher than expected.

The Bank of Canada isn't anywhere close to controlling this situation yet. The policy rate is 3.25% and will likely become 4.00% next week, but they probably need a policy rate of more like 5% to have any hope of getting this under control.


----------



## sags

Parliament unanimously voted in favor of temporarily doubling the GST credit for low income folks.

It is a small amount of money that is targeted somewhat to low income folks, and although it is mostly a symbolic gesture that will have little impact......it is better than nothing.

The government appears to be more cautious on spending, perhaps waiting to see what the impact of another round of covid will bring.


----------



## sags

Double digit mortgage rates may be coming in the future.

The US is already 7.08 % for the 30 year fixed rate, and continuing to trend upwards.





__





Compare Today's 30-Year Mortgage Rates | Bankrate


Find and compare 30-year mortgage rates and choose your preferred lender. Check rates today to learn more about the latest 30-year mortgage rates.



www.bankrate.com


----------



## MrMatt

james4beach said:


> Canadian CPI was reported today. The troubling part is that *Core CPI* came in much higher than expected.
> 
> The Bank of Canada isn't anywhere close to controlling this situation yet. The policy rate is 3.25% and will likely become 4.00% next week, but they probably need a policy rate of more like 5% to have any hope of getting this under control.


We've seen this game before, you're not going to fix a global problem, and government policy problem with interest rates.
We haven't even gotten to all the CPI contract clauses that's going to add more inflationary pressure. Ontario school staff are asking for double digit salary increases. (11.7%)




__





CityNews







toronto.citynews.ca





Just a question, at what point will interest rates be so high that government unions won't insist on ridiculous salary increases?


----------



## james4beach

Every working person should *demand* salary increases to keep up with inflation. If you can't get it, quit and go to another job.

This is actually one of the only ways to force policy makers to contain inflation. Rich people don't care much about inflation because it doesn't really affect them much. But when they have to pay workers more... boy oh boy do they lose their minds.

When employers have to keep paying workers more, that's when governments and central banks will act.


----------



## cainvest

james4beach said:


> Every working person should *demand* salary increases to keep up with inflation. If you can't get it, quit and go to another job.


That's not realistic, most people are not in a position to do that.


----------



## james4beach

cainvest said:


> That's not realistic, most people are not in a position to do that.


I understand that. For example my work has dried up and I can't demand raises to keep up with inflation either.

But anyone in a position to do so, should ... and it helps all other workers. One has to be willing to suffer some inconveniences like quitting and starting another job.

I'm not saying it's easy but keeping your wages high will make a big difference in the long term.


----------



## cainvest

james4beach said:


> But anyone in a position to do so, should ... and it helps all other workers. One has to be willing to suffer some inconveniences like quitting and starting another job.


This is actually no different than for low inflation times. Anyone focused on money generation should always be moving towards the higher salary/wage.


----------



## sags

_With inflation so sticky, economists are expecting more rate hikes to reduce demand and cool the economy. That could prompt a recession sometime in 2023.
While inflation has slowed somewhat in recent months as energy prices have stabilized, Freeland said the government will not be able to help everyone ride the inflationary wave.

"We cannot compensate every single Canadian for all of the costs of inflation driven by a global pandemic and Putin's invasion of Ukraine," Freeland said.
But she promised relief for the poorest Canadians who are most vulnerable to sudden spikes in the cost of food and rent.
Freeland pointed to the passage of Bill C-30, government legislation to temporarily double the GST credit paid to low-income households._




https://www.cbc.ca/news/politics/freeland-difficult-days-ahead-economy-1.6621800


----------



## m3s

sags is paying 1/2 the average rent in Canada and probably 1/3 to 1/4 the market rate in southern ontario due to 2.5% rental increase cap and sags gets 10% COLA

No wonder sags thinks inflation is good for GICs. sags lives in a world that doesn't exist for anyone below the age of boomer

The reality is the vast majority of Canadians cannot have housing locked below market. These indexed pensions and union deals no longer exist


----------



## sags

KaeJS said:


> Sags,
> 
> Have you lost your mind?


Message received and deciphered using my CMF secret decoder ring and reply in same code.

The rain in Spain falls mainly on the plain.


----------



## sags

m3s said:


> sags is paying 1/2 the average rent in Canada and probably 1/3 to 1/4 the market rate in southern ontario due to 2.5% rental increase cap and sags gets 10% COLA
> 
> No wonder sags thinks inflation is good for GICs. sags lives in a world that doesn't exist for anyone below the age of boomer
> 
> The reality is the vast majority of Canadians cannot have housing locked below market. These indexed pensions and union deals no longer exist


Maybe they own a home with hundreds of thousands or millions of $$ in equity.

By your own admission, you move around a lot......maybe too much to establish a secure future here in Canada.


----------



## andrewf

MrMatt said:


> We've seen this game before, you're not going to fix a global problem, and government policy problem with interest rates.
> We haven't even gotten to all the CPI contract clauses that's going to add more inflationary pressure. Ontario school staff are asking for double digit salary increases. (11.7%)
> 
> 
> 
> 
> __
> 
> 
> 
> 
> 
> CityNews
> 
> 
> 
> 
> 
> 
> 
> toronto.citynews.ca
> 
> 
> 
> 
> 
> Just a question, at what point will interest rates be so high that government unions won't insist on ridiculous salary increases?


We could, but it would lead to currency appreciation, decreased competitiveness and reduced exports.


----------



## m3s

sags said:


> Maybe they own a home with hundreds of thousands or millions of $$ in equity.
> 
> By your own admission, you move around a lot......maybe too much to establish a secure future here in Canada.


I'm talking about young people sags

I could buy a large house in London ON in cash. I'd rather pay a fraction of the price for a better place in Portugal for example

I'm more concerned about the young Canadians and the boomers ignorance to their situation


----------



## Gator13

^ We looked at some homes in London, ON a while back. Some really nice houses for +/- $2m for 3,000 sq ft.


----------



## m3s

Gator13 said:


> ^ We looked at some homes in London, ON a while back. Some really nice houses for +/- $2m for 3,000 sq ft.


Or you can get a better house for a fraction of the cost in a better climate

Where they have physicians available and less taxes too


----------



## Gator13

m3s said:


> Or you can get a better house for a fraction of the cost in a better climate
> 
> Where they have physicians available and less taxes too


Yeah, I've lived a few places. Lots of factors to consider when changing countries. 

Far, far simpler if you have nothing tying you down.


----------



## KaeJS

sags said:


> Do you support handing out government cheques to everyone, regardless of the need ?
> 
> My wife got a 10% increase to her OAS this year (in addition to the quarterly cola increase) because she turned 75. How does that make any sense ?
> 
> Just because the official inflation rate is 8% doesn't mean that everyone is spending 8% more of their income to stay current.
> 
> If a person doesn't drive a vehicle......they aren't paying the inflation on gas prices.......for example.
> 
> A "one size fits all" solution isn't an efficient way to address inflation costs.


I really just don't think you are seeing the big picture here.

Are you not seeing the house of cards? Because it's been built pretty high, and the wind is getting stronger...


----------



## sags

I see people who acquired too much debt heading for trouble.

People default. The banks write off the losses. The world moves on.

This is a cycle of cleansing out bubbles, bad debt, and weak companies.

For centuries they had a Jubilee that eliminated all debt and the system reset.

Bankruptcy law replaced Jubilees.

Some economists are proponents of a debt jubilee as a less damaging solution than punitive bankruptcy laws.

The simple truth is that debt that can’t be repaid … won’t be repaid.





__





How Debt Jubilees Work







www.lynalden.com


----------



## sags

The US is approaching $32 trillion in debt plus unfunded liabilities for Social Security, Medicare, and other programs like FEMA.

Does anyone seriously believe any US President would tell the American people they won’t collect SS or get medical treatment or other benefits because all the money has to be paid to debt holders ?

That debt will either never be repaid to foreign debt holders or they will just “print” US dollars to pay the debt and then switch to a new currency or monetary system.

MMT is growing more popular among economists and politicians globally as the possible new system.


----------



## m3s

sags said:


> MMT is growing more popular among economists and politicians globally as the possible new system.


Possible new system?

That's the house of cards sags. It's not sustainable it's just a boomer pipe dream continue living easy and to kick all the issues to the millennials after they're all dead

MMT was just tested and it clearly failed faster than the boomer brains ever imagined. Transitory inflation already became "sticky" inflation and if they continue we'll have hyper inflation. It's all based on a ponzinomics of taking infinite debt denominated in a currency you can print as long as other countries have demand for it

Countries will abandon the USD if it becomes too strong. Boomer Biden was already muttering that he's worried about it while licking an ice cream cone like a little child

The boomers don't have a time horizon beyond their own with MMT they just want to maintain the charade for their own reputation. History will remember them very differently once the house of cards comes down



> MMT says that as long as demand exists for the issuer's currency, whether the bond holder is foreign or not, governments can never be insolvent when the debt obligations are in their own currency; this is because the government is not constrained in creating its own fiat currency (although the bond holder may affect the exchange rate by converting to local currency).


----------



## Gator13

With early millennials now in their 40's, they are also part of the problem. It's the Gen Z that are going to be left holding the bag.


----------



## MrBlackhill

Gator13 said:


> With early millennials now in their 40's, they are also part of the problem. It's the Gen Z that are going to be left holding the bag.


Every generation after Boomers is going to be in a bigger mess each time. Boomers did great things but they still have a big influence while Gen Alpha kids are currently being born and that's unhealthy to have the biggest influence and power throughout the generations.

I'm honestly concerned about the future for my Gen Alpha kid.

Hopefully the mess will be solved before the generation coming after Gen Alpha. (Beta I guess)


----------



## Spudd

MrBlackhill said:


> Every generation after Boomers is going to be in a bigger mess each time. Boomers did great things but they still have a big influence while Gen Alpha kids are currently being born and that's unhealthy to have the biggest influence and power throughout the generations.
> 
> I honestly concerned about the future for my Gen Alpha kid.
> 
> Hopefully the mess will be solved before the generation coming after Gen Alpha. (Beta I guess)


Is that the real name for that generation? I haven't heard that before. It's kind of hilarious how we started with X so we have to circle back around to A so soon.


----------



## MrBlackhill

Spudd said:


> Is that the real name for that generation? I haven't heard that before. It's kind of hilarious how we started with X so we have to circle back around to A so soon.


Yeah, there wasn't any naming process. That's pretty new to name generations.

I read this:


> The Generation X label first appeared in a Robert Capa photo essay on young adults coming of age after World War II. The name resurfaced in 1964, when a London publication did a series on British youth culture, which eventually became a book called _Generation X_. And when a young Billy Idol was looking for a band name in the mid-1970s, he remembered the book from his childhood and claimed the title.
> 
> Generation X wasn't the preferred label until Douglas Coupland's 1991 book, _Generation X: Tales for an Accelerated Culture_, explained that the letter "X" was meant to signify his generation's desire not to be defined.


Then they simply decided to continue with the alphabet with Y (which then was popularised as Millennials because they lived the turning point of the millennia during their young years), then Z and usually after Z we continue with Greek alphabet.


----------



## Gator13

MrBlackhill said:


> Every generation after Boomers is going to be in a bigger mess each time. Boomers did great things but they still have a big influence while Gen Alpha kids are currently being born and that's unhealthy to have the biggest influence and power throughout the generations.
> 
> I honestly concerned about the future for my Gen Alpha kid.
> 
> Hopefully the mess will be solved before the generation coming after Gen Alpha. (Beta I guess)


Several others have posted here that the majority of Millennials have tuned out the boomers. The Gen Z's and certainly the Gen Alpha's, are and will be, influenced by the Millennials. An example is how Boomers are on Facebook and the younger generations have moved on to other platforms. The youngest Boomers are now approaching 60. Think teachers, sports coaches, actors, professional athletes, musicians, etc. None of them are Boomers.


----------



## MrBlackhill

Maybe I've missed a post, but I haven't seen anyone talk about Loblaws marketing stunt with that "freezing prices" for their No Name brand?

There's no such thing as "helping the consumer" in this capitalist system. That's why I call it a marketing stunt. Also, doing that after food price rose 10% lol.

Please recall the story about the bread price.






Loblaws' price-fixing may have cost you at least $400 - Macleans.ca


Any way you slice it, Canadian bread shouldn’t have cost this much




www.macleans.ca


----------



## sags

I think you misunderstand Loblaws offer.

What they mean is......we have raised our prices due to higher supplier costs and will freeze them at this price.

We won't be dropping prices regardless if supplier cost is lower in the future.


----------



## MrBlackhill

sags said:


> We won't be dropping prices regardless if supplier cost is lower in the future.


Exactly, they froze it at the top.

And now they are marketing this "freeze" as a good move, but also as a scare tactic, so that costumers believe they are having a good deal and should buy as much as possible before they unfreeze the prices.


----------



## Eclectic21

Gator13 said:


> ... The youngest Boomers are now approaching 60. Think teachers, sports coaches, actors, professional athletes, musicians, etc. None of them are Boomers.


Odd ... except for maybe the pro athletes, I can think of boomer examples in these categories.
There's fewer each day as I know many who are retiring or quitting but "none" seems a bit extreme.

Cheers


----------



## Gator13

Eclectic21 said:


> Odd ... except for maybe the pro athletes, I can think of boomer examples in these categories.
> There's fewer each day as I know many who are retiring or quitting but "none" seems a bit extreme.
> 
> Cheers


The context of my answer was with regards to who is influencing Millennials and Gen Z.

Yes, there are definitely a good number of Boomers around in pretty much every category, but they are not influencing the Millennials and Gen Z. Their followers are older. I.e. the Millennials and Gen Z aren't buying music from musicians from the 70's and 80's.


----------



## Beaver101

Gator13 said:


> The context of my answer was with regards to who is influencing Millennials and Gen Z.
> 
> Yes, there are definitely a good number of Boomers around in pretty much every category, but they are not influencing the Millennials and Gen Z. Their followers are older. I.e. the Millennials and Gen Z aren't buying music from musicians from the 70's and 80's.


 .. so who's following the Millennials, GenZ? Alpha A?


----------



## Gator13

Beaver101 said:


> .. so who's following the Millennials, GenZ? Alpha A?


That's exactly what will happen. When you're young you follow what is current, not something from decades ago. It's always been that way. Look at fashion as a prime example.


----------



## Beaver101

Gator13 said:


> *That's exactly what will happen. *When you're young you follow what is current, not something from decades ago. It's always been that way. Look at fashion as a prime example.


 ... so aren't the Millennials, GenZ older than the Alpha As? Or are the Alpha As to follow the Beta Bs in your "current" world, even in the world of fashion?


----------



## Gator13

Beaver101 said:


> ... so aren't the Millennials, GenZ older than the Alpha As? Or are the Alpha As to follow the Beta Bs in your "current" world, even in the world of fashion?


Beta B's will look up to Alpha A's. Of course each generation will put their own twist on everything. Think of a younger brother looking up to his older brother. The Alpha A's will probably look at Millennials as old relics. haha


----------



## Beaver101

Gator13 said:


> Beta B's will look up to Alpha A's. Of course each generation will put their own twist on everything. Think of a younger brother looking up to his older brother. The Alpha A's will probably look at Millennials as old relics. haha


 ... good one! Hear that m3s, you old relic ... LMAO!!!!


----------



## m3s

Beaver101 said:


> ... good one! Hear that m3s, you old relic ... LMAO!!!!


I'm aware. I'm at early retirement

The boomers are oblivious to reality though


----------



## AltaRed

The boomers (58-76) are largely enjoying retirement. They are into recreation, travel, mentoring and managing our retirement plans.

Just like the senior pre-boomers, now gone from this world experienced the depression and conducted their lives accordingly, the senior boomers in particular experienced the inflation of the '70s and '80s and understand today's reality (inflation and consequences) better than most.


----------



## Covariance

AltaRed said:


> The boomers (58-76) are largely enjoying retirement. They are into recreation, travel, mentoring and managing our retirement plans.
> 
> Just like the senior pre-boomers, now gone from this world experienced the depression and conducted their lives accordingly, the senior boomers in particular experienced the inflation of the '70s and '80s and understand today's reality (inflation and consequences) better than most.


Pre-boomer. I love it.


----------



## m3s

AltaRed said:


> The boomers (58-76) are largely enjoying retirement. They are into recreation, travel, mentoring and managing our retirement plans.
> 
> Just like the senior pre-boomers, now gone from this world experienced the depression and conducted their lives accordingly, the senior boomers in particular experienced the inflation of the '70s and '80s and understand today's reality (inflation and consequences) better than most.


I know some Karens who aren't Karens in the internet meme sense

There are boomers who aren't boomers in the internet meme sense.

Can you imagine there are also millennials who aren't lazy and entitled too


----------



## londoncalling

ISTM, that the central banks and the governments of the day are working against eachother. This is not a new revelation for me or anyone who has been watching policy for the past year. Central bank raises rates. Government sends everyone a cheque to fight inflation. Unlikely the attempts to tighten since 08, I hope the BofC and Fed don't flinch. I understand why the UK and EU have to back down. Not sure why resource based economies like Australia would need to take their foot off the brake. I guess we'll see in about a year which was the better move.


----------



## AltaRed

Covariance said:


> Pre-boomer. I love it.


Also called the silent* generation, born 1925-1945. As children, they very much saw the reality of the depression.They ultimately benefited greatly post-WWII with the surge in expansion of the '50s and 60s.

* so called because they were/are relatively few in number because their parents chose not to have many children.


----------



## AltaRed

londoncalling said:


> ISTM, that the central banks and the governments of the day are working against eachother. This is not a new revelation for me or anyone who has been watching policy for the past year. Central bank raises rates. Government sends everyone a cheque to fight inflation. Unlikely the attempts to tighten since 08, I hope the BofC and Fed don't flinch. I understand why the UK and EU have to back down. Not sure why resource based economies like Australia would need to take their foot off the brake. I guess we'll see in about a year which was the better move.


It is counter-productive UNLESS highly means tested to alleviate some of the hardships of the lower income quintile.


----------



## m3s

londoncalling said:


> ISTM, that the central banks and the governments of the day are working against eachother. This is not a new revelation for me or anyone who has been watching policy for the past year. Central bank raises rates. Government sends everyone a cheque to fight inflation. Unlikely the attempts to tighten since 08, I hope the BofC and Fed don't flinch. I understand why the UK and EU have to back down. Not sure why resource based economies like Australia would need to take their foot off the brake. I guess we'll see in about a year which was the better move.


Even in the US the states are working against the Fed

Reminds me of a flight safety incident where the left and right seat were fighting each other without knowing it


----------



## m3s

AltaRed said:


> * so called because they were/are relatively few in number because their parents chose not to have many children.


Millennials also chose not to have many children. Every fourth generation seems to repeat


----------



## MrBlackhill

m3s said:


> Millennials also chose not to have many children.


Some chose, some simply can't because they don't have enough money and don't have enough time.

From 1976 to 2009, two-parent families median earnings increased by 23% while median annual hours worked increasing by 26%. And then previous generations whine that Millennials are lazy and don't work. What a joke, Millennial families work much more than previous generations.

Meanwhile, so many things have been automated over the last 40-50 years. Yet, people work more.

Also, there's more than twice higher participation rate in university education, all years where they barely earn a decent income and most accumulate debt. All this in the hope of a better income.

In the 70s, it was possible to have 3+ kids while being a single-earner household with high school education. I'd argue that's possible today only if that single-earner is in the top 1% income.

No wonder why fertility rate is dropping.

My personal observations aren't statistically meaningful, but I know 8 Millennial couples out of 12 who currently have 1 kid, wanted 2 but concluded they couldn't afford it. The 4 couples who had 2 kids live in a very low density rural area while living on a urban income (work from home as professionals). They are all full-time dual-earners. Also, by the way, it's not a lazy-Canadian thing either. 4 of those couples who had only 1 kid are immigrants with university-level education.


































Median Earnings and Annual Hours Worked for Two-Parent Families | The Hamilton Project


The Hamilton Project seeks to advance America's promise of opportunity, prosperity, and growth.




www.hamiltonproject.org









Employment patterns of families with children







www150.statcan.gc.ca









Figure 4 Distribution (in percentage) of private households by household size, Canada, 1961 to 2011


Figure 4 Distribution (in percentage) of private households by household size, Canada, 1961 to 2011




www12.statcan.gc.ca


----------



## Eclectic21

Gator13 said:


> The context of my answer was with regards to who is influencing Millennials and Gen Z ...


Fair enough.




Gator13 said:


> ... Yes, there are definitely a good number of Boomers around in pretty much every category, but they are not influencing the Millennials and Gen Z. Their followers are older. I.e. the Millennials and Gen Z aren't buying music from musicians from the 70's and 80's.


Several listening to particular songs by those musicians commented "I've heard this before ... where?". After a while, they figured out that a more recent musician they listened to put samples of the old song into their new music. Or that the song was part of a sound track for a movie they loved.

For some of the high school types, I've been around - I've heard some of the samples as part of the new song.


Cheers


----------



## Eclectic21

AltaRed said:


> Also called the silent* generation, born 1925-1945 ...
> * so called because they were/are relatively few in number because their parents chose not to have many children.


Strange ... for both mom and dad as well as most of their friends that I can remember meeting, four or five kids was the number that survived. 

I suspect a couple of dad's classmates were outliers with ten and twelve kids.

I would check with them but they aren't around anymore. The son of one of the five siblings that moved to the US could probably provide more family history.

Cheers


----------



## MrBlackhill

Household size has been steadily decreasing over the past 160+ years.















The shift to smaller households over the past century







www150.statcan.gc.ca


----------



## AltaRed

My experience anecdotally was that large families often referred to in the 20th century were generally associated with religious doctrine. That was before they started thinking for themselves.


----------



## m3s

AltaRed said:


> My experience anecdotally was that large families often referred to in the 20th century were generally associated with religious doctrine. That was before they started thinking for themselves.


There are still large families where I'm from (rural east) The kids do farm chores between homeschool that is very religious. Social activities center around memorizing bible verses (awana) and sunday school

I went to a museum in geographically isolated northern Quebec about how people came from France and had dozens of children. Now everyone has the same last names there and kids have to be tested for genetic diseases specific to this situation (a lot of inbreeding)

Interesting that it doesn't carry the same connotations as some bible belt states in southern US. It's not even a joke in Quebec you can google it.



> In the last decades, many studies have investigated rare genetic disorders or susceptibility genes showing higher frequency in the SLSJ population. Altogether, these studies indicate that hereditary disorders in this population follow a specific pattern consistent with a founder effect: the ‘founder’ diseases have a higher prevalence explained by a lower genetic variability whereas some others (eg, phenylketonuria) are ultra-rare or not reported in the SLSJ population. Also consistent with the characteristics of settlement history, many reports documented that most of the genetic disorders found in the SLSJ region are also found in Charlevoix. As the existing founder effect increases haplotype homozygosity and reduces genetic diversity, many geneticists and physicians worked on the SLSJ population for gene discovery as well as for clinical and epidemiological studies.


----------



## Faramir

m3s said:


> You mean CNBC?
> 
> Everyone knows mainstream media is propaganda saggy.
> 
> You clearly don't know what a fact is


CNBC is the worst financial network but Bloomberg isn't great either with that fraud Cramer. The goal of these networks is distribution. Distributing shares from big investors to joe and jill sixpack.


----------



## m3s

Faramir said:


> CNBC is the worst financial network but Bloomberg isn't great either with that fraud Cramer. The goal of these networks is distribution. Distributing shares from big investors to joe and jill sixpack.


Yes they are pumping exit liquidity and now convincing fools to firesale back to the big boys

Far more clarity if you get your information elsewhere


----------



## Faramir

m3s said:


> Yes they are pumping exit liquidity and now convincing fools to firesale back to the big boys
> 
> Far more clarity if you get your information elsewhere


Yes, not to get too political but MSNBC and CNBC are for the more mentally challenged NBC audiences. I really don't know what are good financial networks as I avoid them all. I recall Neil Cavuto having guests on his show talking about the housing market in 2008 before the great fall.


----------



## m3s

Faramir said:


> Yes, not to get too political but MSNBC and CNBC are for the more mentally challenged NBC audiences. I really don't know what are good financial networks as I avoid them all. I recall Neil Cavuto having guests on his show talking about the housing market in 2008 before the great fall.


They all just pump exit liquidity for their owners. And some viagra ads for boomers


----------



## Faramir

Someone many post earlier was comparing 1976 to now. OK, the 70s sucked in many ways, but it was affordable unlike now. 1975 to 1976 was the nadir of affordability. Since then all down hill. Yes, we have these massive computers we can keep in our back pocket, but we can barely get a head.


----------



## Faramir

m3s said:


> They all just pump exit liquidity for their owners. And some viagra ads for boomers


LOL. So many criminals and not enough police.


----------



## sags

Yea….imagine listening to CNBC and being stuck with thousands of shares you bought decades ago…Google, Microsoft, Apple, Berkshire, …the horror.


----------



## m3s

sags said:


> Yea….imagine listening to CNBC and being stuck with thousands of shares you bought decades ago…Google, Microsoft, Apple, Berkshire, …the horror.


CNBC is for suckers. Your boy Jimmy Cramer pumping exit liquidity every day

He's like a cheerleader for clueless boomers


__ https://twitter.com/i/web/status/1575900559009189889

__ https://twitter.com/i/web/status/1585000873755049984

__ https://twitter.com/i/web/status/1518678833402109952

__ https://twitter.com/i/web/status/1584672850249588736
Meanwhile SEC sues influencers for doing the same


----------



## Gator13

Jim Cramer sure is loud.

One of those annoying types that know everything about every topic. The worst.


----------



## MrBlackhill

We have to admit though that being consistently wrong is actually highly valuable information. The least valuable information is noise at 50/50 chances of being either right or wrong.

Cramer being constantly wrong would actually make him an investment genius, we could even ask ourselves if he isn't doing it purposefully to pump & dump while in reality he's doing the inverse with his money.


----------



## m3s

MrBlackhill said:


> Cramer being constantly wrong would actually make him an investment genius, we could even ask ourselves if he isn't doing it purposefully to pump & dump while in reality he's doing the inverse with his money.


Cramer isn't dumb but anyone who follows him probably is. It's no coincidence he consistently pumps the tops of blatant bubbles

There's clips of him describing how he toyed with retail traders when he was a hedge fund trader. A leopard can't change his spots. All you have to do is watch how big trades are made against what the big boys say - talk things up while dumping and talk them down while loading up

He's pumping exit liquidity for for hedge funds. Same overly fake excitement in VC funded centralized crypto and animal picture NFTs


----------



## MrBlackhill

m3s said:


> Cramer isn't dumb but anyone who follows him probably is. It's no coincidence he consistently pumps the tops of blatant bubbles
> 
> There's clips of him describing how he toyed with retail traders when he was a hedge fund trader. A leopard can't change his spots. All you have to do is watch how big trades are made against what the big boys say - talk things up while dumping and talk them down while loading up
> 
> He's pumping exit liquidity for for hedge funds. Same overly fake excitement in VC funded centralized crypto and animal picture NFTs


Yup, exactly, it's all a façade and honestly his net worth is about $150 million and he's paid millions to make that show so he's just enjoying it and laughing out loud at all the dumb people following him blindly.


----------



## londoncalling

I have been contemplating initiating a position in MSFT for quite some time. For those that follow TA looks like a good signal.  

I do have an order in place below 52 week lows we saw a couple of weeks ago.


----------



## sags

CNBC has guests on all day with all kinds of opinions but the market data is the market data.

The same people who write blogs and have podcasts are guests on CNBC.


----------



## MrBlackhill

Canadian food banks had 15% more visits than last year and 35% more visits than in March 2019, before the pandemic. A record.

Half a million are kids.


----------



## m3s

sags said:


> CNBC has guests on all day with all kinds of opinions but the market data is the market data.
> 
> The same people who write blogs and have podcasts are guests on CNBC.


Some of the ones I follow are also guests on CNBC or MSNBC etc

They know it's a game they know how to play that game or they won't be invited back or in the first place. They've also said their are topics they aren't allowed to talk about. Even Cramer above said he would "never say this on TV"

Mainstream media clearly has a narrative for the low IQ people who believe it (sheep)


----------



## sags

MrBlackhill said:


> Canadian food banks had 15% more visits than last year and 35% more visits than in March 2019, before the pandemic. A record.
> 
> Half a million are kids.


The Trudeau government is frantically working on restructuring the EI support program, as Freeland has recently said there is a recession coming and the government can't hand out cash like they did during the covid pandemic. She made it pretty clear that people who paid too much for a home and are too indebted are on their own.

I think we are going to see a significant rise in defaults.....consumer proposals and bankruptcies, and since anyone living on government benefits or pension is credit proof anyways they will just stop making payments on unsecured debt.

Some of these alternative lenders charging 49% interest, and payday loan companies are going to feel some pain.

It might be tough times for some landlords as well.



https://www.cbc.ca/news/canada/toronto/delays-ontario-ltb-crushing-small-landlords-1.6630256


----------



## sags

We each got an extra $20 as a quarterly increase on OAS benefits, so inflation must still be running high.

An increase of $80 a month in a year would be over 10% on an annual basis.


----------



## m3s

Jim Cramer is showing a different side today


__ https://twitter.com/i/web/status/1585689644850728961

__ https://twitter.com/i/web/status/1585724916669636608

__ https://twitter.com/i/web/status/1575900559009189889


----------



## m3s

Inflation is transitory and good for GICs


----------



## james4beach

sags said:


> The same people who write blogs and have podcasts are guests on CNBC.


They are useless people with no better ability to predict markets than what we can do here on the forum.

Or in other words, none of us are any good at predicting the future. That's why it's best to just stick with one's diversified investment portfolio and hope for the best.


----------



## Thal81

There was an interview on the radio this morning with a lady from an accounting firm. She was raising the alarm that they're seeing about 30% increase in insolvency cases compared to the same time a year ago. As expected, high inflation combined with increasing interest rates are battering people's finances.

I think we're starting to see the tip of the recession iceberg.


----------



## MrMatt

Thal81 said:


> There was an interview on the radio this morning with a lady from an accounting firm. She was raising the alarm that they're seeing about 30% increase in insolvency cases compared to the same time a year ago. As expected, high inflation combined with increasing interest rates are battering people's finances.
> 
> I think we're starting to see the tip of the recession iceberg.


They stopped printing money, and starting increasing interest rates.
My mortgage payment has doubled in the last year.

also all the "rental assistance" has built up a lot of pressure in the rental market, causing those rates to spike as well.

We're in trouble, and the government isn' t willing to accept their role in contributing to this problem.


----------



## james4beach

Powell said this during the Fed press conference meeting on November 2:

*"Wages are not the principal story of why prices are going up"*

The business community (wealthy owners) sometimes push the story that high wages are causing inflation. Powell confirms, that's not true. The Federal Reserve is concerned about very large wage increases eventually becoming a problem if inflation persists and becomes entrenched, but this has not been the cause of inflation so far.


----------



## m3s

james4beach said:


> The business community (wealthy owners) sometimes push the story that high wages are causing inflation. Powell confirms, that's not true. The Federal Reserve is concerned about very large wage increases eventually becoming a problem if inflation persists and becomes entrenched, but this has not been the cause of inflation so far.


The cause is JPow himself

He knows this


----------



## AltaRed

Maybe, but it is also (maybe primarily) Biden and his gang with his trillion dollar plus stimulus packages. Plus politicians like to point fingers like Janet Yellen yesterday(?) wagging her finger at Jerome about wanting to take people's jobs away. WTF is she smoking when there are two job vacancies for every unemployed person in the country?


----------



## sags

Government stimulus money is the cause of the inflation ?

People are broke so where is all the stimulus money supposedly being pumped into the economy ?

As far as demand causing shortages that drive up the prices......grocery store shelves are full to the rafters. No shortages there.

I am not sure what is causing inflation at this point, as there doesn't appear to be any direct links. Some indirect links maybe.....Ukraine war etc.

Maybe there is a lot of plain old price gouging going on ?


----------



## james4beach

AltaRed said:


> Maybe, but it is also (maybe primarily) Biden and his gang with his trillion dollar plus stimulus packages.


If that's the cause, why is there high inflation in every developed country including ones with much less stimulus?


----------



## nathan79

sags said:


> Government stimulus money is the cause of the inflation ?
> 
> People are broke so where is all the stimulus money supposedly being pumped into the markets ?
> 
> As far as demand causing shortages that drive up the prices......grocery store shelves are full to the rafters. No shortages there.
> 
> I am not sure what is causing inflation at this point, as there doesn't appear to be any direct links. Some indirect links maybe.....Ukraine war etc.
> 
> Maybe there is a lot of plain old price gouging going on ?


Many people still have loads of cash to burn and stores are still having supply problems where I live. Several of the products I normally buy have been out of stock for months.

I've also noticed several products have just recently gone up in price within the last month or so. Laundry detergent and cleaning supplies are way up.


----------



## m3s

sags said:


> I am not sure what is causing inflation at this point, as there doesn't appear to be any direct links. Some indirect links maybe.....Ukraine war etc.
> 
> Maybe there is a lot of plain old price gouging going on ?


You were sure it was a lot of things sags 

Starting to realize it was all lies from mainstream media

According to Biden now it was the war in Iraq


----------



## m3s

sags said:


> Government stimulus money is the cause of the inflation ?
> 
> People are broke so where is all the stimulus money supposedly being pumped into the markets ?
> 
> As far as demand causing shortages that drive up the prices......grocery store shelves are full to the rafters. No shortages there.
> 
> I am not sure what is causing inflation at this point, as there doesn't appear to be any direct links. Some indirect links maybe.....Ukraine war etc.
> 
> Maybe there is a lot of plain old price gouging going on ?


Has nothing to do with the money supply right sags

Takes a while for all this money supply to trickle into the system. But keep believing all the excuses the mainstream media and government make up

It's first principle thinking that not everyone understands


----------



## AltaRed

james4beach said:


> If that's the cause, why is there high inflation in every developed country including ones with much less stimulus?


You can google a number of articles but this one is as short and clear as one needs to understand the key issues What is causing inflation? Economists point fingers at different culprits

Plus you already, or should, know the EU and Britain also had large stimulus packages and most recently, skyrocketing energy costs are infecting every step in the value added chain. This latter point since the Russian invasion is the Achilles heel for Europe at this moment.

The stimulus should have ended in late 2020 at the latest. Politicians couldn't get over the rush/addictiveness of writing cheques to everyone.


----------



## m3s

AltaRed said:


> The stimulus should have ended in late 2020 at the latest. Politicians couldn't get over the rush/addictiveness of writing cheques to everyone.


Inflation is also good for governments

Lowers the value of debt while increasing taxes and makes voters happy to see number go up. Imagine being a homeowner where the unrealized gain grows, property tax grows, but mortgage/debt remains denominated in pre-inflation terms

Win win win for the government. Until they go to far and the music stops


----------



## sags

The government gave out stimulus money to replace lost incomes to businesses and workers.

To be a fair comparison.......subtract the lost incomes from the government spending to determine if the stimulus provided "excess" money to people.

It is worthwhile to note that many economies, including our own, saw the GDP go into negative territory for a period of time.

Just looking at spending without compensating for lost incomes and business revenues provides an incomplete picture.

The CPC rail against the government spending now.......but voted in favor of most of it at the time. They have short memories.

The only time they voted against spending, they tested the wind first to make sure the spending would have enough support to pass without them.


----------



## sags

m3s said:


> Inflation is also good for governments
> 
> Lowers the value of debt while increasing taxes and makes voters happy to see number go up. Imagine being a homeowner where the unrealized gain grows, property tax grows, but mortgage/debt remains denominated in pre-inflation terms
> 
> Win win win for the government. Until they go to far and the music stops


Not so great for the cost of living benefit increases they have to pay out for OAS, GIS, social benefits, disability benefits, child support benefits, and an array of government benefits. Income tax exemptions also rise with inflation and the government loses that revenue.


----------



## m3s

sags said:


> Not so great for the cost of living benefit increases they have to pay out for OAS, GIS, social benefits, disability benefits, child support benefits, and an array of government benefits. Income tax exemptions also rise with inflation and the government loses that revenue.


So you think inflation is bad for the government and good for GICs?

New pensions are rarely indexed to inflation. It's not sustainable in the fiat money printing world

Same way young people start out with much lower wages when adjusted for inflation


----------



## damian13ster

Give it up, sags has absolutely zero knowledge on economy.
It is actually a statistical anomaly. Even a person with zero knowledge has 50% chance of being right in binary situation yet sags manages to be wrong just about every single time.

The causes of inflation are relatively well known. You print money at higher pace than increase in goods produced = you have inflation


----------



## m3s

sags said:


> The government gave out stimulus money to replace lost incomes to businesses and workers.
> 
> To be a fair comparison.......subtract the lost incomes from the government spending to determine if the stimulus provided "excess" money to people.


This is poor reasoning

The government added money to the money supply. This is first principles thinking.

Stop overcomplicating things to fit your world view



sags said:


> It is worthwhile to note that many economies, including our own, saw the GDP go into negative territory for a period of time.


So what? Why is that worth noting?

Many things dropped off - including inflation - for a short period of time

When you zoom out it doesn't matter



sags said:


> Just looking at spending without compensating for lost incomes and business revenues provides an incomplete picture.
> 
> The CPC rail against the government spending now.......but voted in favor of most of it at the time. They have short memories.
> 
> The only time they voted against spending, they tested the wind first to make sure the spending would have enough support to pass without them.


Doesn't mean spending is smart or reasonable. It means it's politically beneficial

Printing and spending is good for the government

CPC would probably do the same because we basically have 2 options of the same thing


----------



## sags

So you were working and received a big pile of government money and are spending the extra cash now and driving up prices ?

Anybody I know who lost their jobs during covid didn't get enough government money to replace their lost income.

After all.......$2,000 a month is less than the minimum wage.

I read that people are deeply in debt.....not loaded up with government stimulus money.


----------



## sags

damian13ster said:


> Give it up, sags has absolutely zero knowledge on economy.
> It is actually a statistical anomaly. Even a person with zero knowledge has 50% chance of being right in binary situation yet sags manages to be wrong just about every single time.
> 
> The causes of inflation are relatively well known. You print money at higher pace than increase in goods produced = you have inflation


Why weren't the goods being produced ? Who has all the money ?


----------



## sags

It is funny to listen to the economic gibberish of Pierre P. and the Conservatives.

One minute he is saying the government gave people too much money and the next minute he is saying people are broke and having to go to food banks.

He bounces around like he is inside a bouncy castle.


----------



## MrBlackhill

One thing though... Lots of people complain about our current government, yet look at all the developed countries out there, all the governments did basically the same thing. Lots complain about BoC, yet look at the timing of central banks in all the developed countries, they all did the same at barely a few months of difference at most and are all rising rates at similar pace or even lower pace. Yet some have even higher inflation, a few have a bit lower, but the developed world all did the same, so it's not a "Canadian" government thing, it's not a "Canadian" central bank thing.


----------



## m3s

MrBlackhill said:


> One thing though... Lots of people complain about our current government, yet look at all the developed countries out there, all the governments did basically the same thing. Lots complain about BoC, yet look at the timing of central banks in all the developed countries, they all did the same at barely a few months of difference at most and are all rising rates at similar pace or even lower pace. Yet some have even higher inflation, a few have a bit lower, but the developed world all did the same, so it's not a "Canadian" government thing, it's not a "Canadian" central bank thing.


Never said it was

Feudal system is long gone. Central banker system will one day be history as well

Hard for boomers to imagine but not for young people


----------



## m3s

sags said:


> After all.......$2,000 a month is less than the minimum wage.
> 
> I read that people are deeply in debt.....not loaded up with government stimulus money.


Liquidity was high when monetary policy was loose

This is well known and accepted. Those closest to the central banks benefit the most not the poor non-essential smuck living on social government handouts

You're looking at the micro instead of macro. Can't see the forest for the trees


----------



## damian13ster

MrBlackhill said:


> One thing though... Lots of people complain about our current government, yet look at all the developed countries out there, all the governments did basically the same thing. Lots complain about BoC, yet look at the timing of central banks in all the developed countries, they all did the same at barely a few months of difference at most and are all rising rates at similar pace or even lower pace. Yet some have even higher inflation, a few have a bit lower, but the developed world all did the same, so it's not a "Canadian" government thing, it's not a "Canadian" central bank thing.


I don't see many people arguing that Government of England or other developed countries acted in a smart way.
This is 'Canadian Money Forum' though so it is natural that people here complain about government of Canada creating inflation here, and not government of UK creating inflation there.


----------



## m3s

There exist smart countries such as Norway.

They are loaded with that sovereign wealth fund oil royalties. There's no reason Canada couldn't be like Norway

We chose to be like all the dummies instead


----------



## sags

When your economic arguments fail.........tilt windmills.


----------



## m3s

sags said:


> When your economic arguments fail.........tilt windmills.


You mean like when you argued that inflation was good for GICs?

Only in an imaginary world where your income is indexed and your rent is capped at 2.5% increase

$26 increase means your rent is $1000 in London ON. Market rate is at least double


----------



## MrBlackhill

damian13ster said:


> I don't see many people arguing that Government of England or other developed countries acted in a smart way.
> This is 'Canadian Money Forum' though so it is natural that people here complain about government of Canada creating inflation here, and not government of UK creating inflation there.


I get the point, it's Canadian Money Forum. Obviously we talk mainly about what's happening in Canada.

I simply wanted to point out that it's not unique to Canada. All countries did the same.

So there's no point in taking it personal as if it was a Canadian thing as when PP said he would fire the BoC governor, for instance.


----------



## MrBlackhill

m3s said:


> There exist smart countries such as Norway.
> 
> They are loaded with that sovereign wealth fund oil royalties. There's no reason Canada couldn't be like Norway
> 
> We chose to be like all the dummies instead


Yes, Norway is such an amazing country.

I'm not expert in oil energy, though I've heard that the oil extraction process in Norway is not the same as what is needed to extract oil in Canada, and that's why we can't take them as an example.


----------



## sags

We pay the true market rate.

Other landlords charging exorbitant rent for units built for $15000 in 1967 are gouging tenants.


----------



## m3s

sags said:


> We pay the true market rate.
> 
> Other landlords charging exorbitant rent for units built for $15000 in 1967 are gouging tenants.


When you economic argument fails.. tilt windmills

You don't understand economics or what true market rate means because you live in an imaginary union world that is indexed to inflation

Adjusted for 50 years inflation your landlord is earning squat.. about 1% before expenses and taxes


----------



## andrewf

damian13ster said:


> I don't see many people arguing that Government of England or other developed countries acted in a smart way.
> This is 'Canadian Money Forum' though so it is natural that people here complain about government of Canada creating inflation here, and not government of UK creating inflation there.


There is no such thing as 'government of england'.


----------



## londoncalling

MrBlackhill said:


> One thing though... Lots of people complain about our current government, yet look at all the developed countries out there, all the governments did basically the same thing. Lots complain about BoC, yet look at the timing of central banks in all the developed countries, they all did the same at barely a few months of difference at most and are all rising rates at similar pace or even lower pace. Yet some have even higher inflation, a few have a bit lower, but the developed world all did the same, so it's not a "Canadian" government thing, it's not a "Canadian" central bank thing.


You are correct that Canada was not the only one to create mass inflation. Initially stimulating the economy early in the pandemic was likely the best way to prevent mass panic and economic failure across the globe. As @AltaRed alluded it became a prolonged habit and a political ploy. I am not saying a different path would have avoided the current inflationary scenario, but it sure has magnified and accelerated it. Hindsight is 20-20 but the BofC and others should have been raising rates and tightening money supply in 2021. Instead, they chose to keep printing and blowing bubbles. Eventually, the economy will reverse course again and inflation and interest rates will stop climbing. Just a question of when and if it is again an overcorrection.


----------



## m3s

londoncalling said:


> Eventually, the economy will reverse course again and inflation and interest rates will stop climbing. Just a question of when and if it is again an overcorrection.


Biden mentioned pivot the other day and the market pumped until they realized he was confused

The market is forward looking and is still ready to pump as soon as rates ease or hold

Government can't afford to service its debts at high enough rates to tamper this beast


----------



## sags

You still haven’t answered where all the stimulus money is.


----------



## damian13ster

Savings accounts, down-payment on houses.
Look at savings rate and average income- both skyrocketed during pandemic.

Sags, you are putting out empty sentences that are easily disproven with readily available data. Put some effort in and educate yourself.

Average incomes spiked during pandemic.
Savings rate spiked during pandemic.
Canada was flooded with cash and now we have inflation


----------



## sags

Any source for that ?

I read that people are struggling and you claim they are flush with cash.

People had extra cash because they deferred mortgage payments for 6 months, car payments, student loan payments, credit card payments, rent payments, and weren’t working so they didn’t pay work expenses or daycare costs.

They added to their debt loads by deferring their payments and now they are broke.


----------



## damian13ster

Canada Household Saving Rate - 2022 Data - 2023 Forecast - 1961-2021 Historical


Household Saving Rate in Canada decreased to 5.70 percent in the third quarter of 2022 from 6.20 percent in the second quarter of 2022. Personal Savings in Canada averaged 7.80 percent from 1961 until 2022, reaching an all time high of 28.20 percent in the second quarter of 2020 and a record low...




tradingeconomics.com


----------



## sags

The increased money in the savings accounts is deferred debt.

They had to renew payments as the deferrals ended.

If people don’t have to pay their bills, they tend to have more money in the bank.



https://www.cbc.ca/amp/1.5718894


----------



## damian13ster

Canada Average Weekly Earnings YoY - November 2022 Data - 1992-2021 Historical


Average weekly earnings of non-farm payroll employees in Canada rose by 3.4% year-on-year to CAD 1,171.60 in October of 2022, continuing their growth since June 2021. It was the 17th straight month of growth in average weekly earnings, with 17 of the 20 sectors reporting gains. The...




tradingeconomics.com





You are clueless.
As I said, income also went up.
Or are you going to say that income is also result of deferred debt?

Just accept it - you are wrong. Helicopter money created the inflation.


----------



## sags

The bank offered us a 3 month deferral on our new auto loan. The interest rate was 0.9% so I said sure and we put the money into a GIC earning higher interest…voila, more savings.


----------



## sags

Income did go up temporarily for some of those working, from government “top ups” that were of short duration.

My wife earned significantly more covering hours for workers shortages and an increased workload from Covid testing residents and staff daily and extra requirements to gown up for Covid residents.

Her extra income had little to do with government spending and everything to do with the covid pandemic.

I posted about it at the time and I don’t remember people posting they were suddenly flush with government Covid cash.

Some posters are mixing up a lot of different facts and data trying to prove political points but it doesn’t prove anything.


----------



## m3s

sags said:


> The bank offered us a 3 month deferral on our new auto loan. The interest rate was 0.9% so I said sure and we put the money into a GIC earning more…voila, more savings.


And yet somehow you don't understand how giving magic pixie digits to the banks creates liquidity in markets

Which causes inflation. Which is not good for GICs


----------



## sags

If cost of living indexing was mandatory on all wages in Canada, we wouldn't be in a position of workers needing huge increases due to inflation.

Employers would have the ability to sustainably budget for labor costs and it would eliminate the angst over increasing minimum wages.

As the saying goes.....you can pay me now or pay me later. It is better economics to balance the increased costs over time.

There was no issue for business with a large pool of available labor to draw from, but now with a shortage of labor their attitude changes.

Business loves to cite "labor markets will determine the price" until labor pools dry up and they face huge increases to recruit workers.

Now they say the "labor market" is out of whack and they want to import cheap labor in the form of immigrants.

We have seen this movie before, like the " temporary foreign workers" problems during the Harper government days.


----------



## MrMatt

sags said:


> If cost of living indexing was mandatory on all wages in Canada, we wouldn't be in a position of workers needing huge increases to keep up with inflation.
> 
> Employers could have the ability to sustainably budget for labor costs and it would eliminate the angst over increasing minimum wages.
> 
> As the saying goes.....you can pay me now or pay me later. It is better economics to balance the increased costs over time.


You realize that would cause even more inflationary pressure right?

Why do you love inflation so much? Do you realize that high inflation isn't good?


----------



## sags

m3s said:


> And yet somehow you don't understand how giving magic pixie digits to the banks creates liquidity in markets
> 
> Which causes inflation. Which is not good for GICs


It had nothing to do with government spending.

It was deferring debt repayment, which increased the money in our savings.


----------



## sags

MrMatt said:


> You realize that would cause even more inflationary pressure right?
> 
> Why do you love inflation so much? Do you realize that high inflation isn't good?


Inflationary pressure for decades when it was near 0%, would be preferable to the situation today.


----------



## MrMatt

sags said:


> Inflationary pressure for decades when it was near 0%, would be preferable to the situation today.


If it's better there then move to the US.

The government can't legislate prosperity.


----------



## m3s

sags said:


> It had nothing to do with government spending.
> 
> It was deferring debt repayment, which increased the money in our savings.


Your consistent lack of intelligence impressive. Textbook Dunning-Kruger effect every day

You should spend more time reading. You're a living advertisement for secondary education


----------



## sags

You are right.

I don't understand how you equate a bank allowing payment deferral with government stimulus spending.


----------



## Faramir

m3s said:


> CNBC is for suckers. Your boy Jimmy Cramer pumping exit liquidity every day
> 
> He's like a cheerleader for clueless boomers
> 
> 
> __ https://twitter.com/i/web/status/1575900559009189889
> 
> __ https://twitter.com/i/web/status/1585000873755049984
> 
> __ https://twitter.com/i/web/status/1518678833402109952
> 
> __ https://twitter.com/i/web/status/1584672850249588736
> Meanwhile SEC sues influencers for doing the same


Cramer ran a boiler room operation. The guy is a crook.


----------



## Faramir

Joe Biden and Nancy say there isn't inflation. Just Republican noise.


----------



## james4beach

This is an interesting interview with Larry Summers. He thinks the talking point that "this is just a supply shock" is faulty, and explains how we know this isn't a supply problem. He also thinks inflation is going to persist, is now starting to become entrenched, and interest rates might have to go much higher than we all think.

I like his analysis, recommend watching this.


----------



## m3s

james4beach said:


> This is an interesting interview with Larry Summers. He thinks the talking point that "this is just a supply shock" is faulty, and explains how we know this isn't a supply problem.


Only the mentally deficient ever believed it was


----------



## sags

It is said that if you put 5 economists in a room you will get 6 different opinions.


----------



## sags

Professor Siegel, Peter Schiff, Larry Summers have differing opinions on the current situation.

People align with whomever coincides with their own personal beliefs.

Human nature.


----------



## james4beach

sags said:


> Professor Siegel, Peter Schiff, Larry Summers have differing opinions on the current situation.


That's basically why I still hold my diversified index portfolio, despite my suspicions about what might happen.

We really have no idea how this will play out. It's good to remind ourselves of that. And after events play out, people will usually look backward and say (in hindsight), oh it was obvious and I knew it!


----------



## m3s

james4beach said:


> That's basically why I still hold my diversified index portfolio, despite my suspicions about what might happen.
> 
> We really have no idea how this will play out. It's good to remind ourselves of that. And after events play out, people will usually look backward and say (in hindsight), oh it was obvious and I knew it!


If you watch mainstream media you will be constantly misled and confused by design

I remember the people who were right and they provided a lot of clarity. Some people do have success by understanding the potential outcomes and being able to react

It's not about having a crystal ball to time exact tops or bottoms in one trade. You can scale in and out over broad periods and do very well


----------



## sags

People like Pierre P who claim inflation is all due to government spending, are aligning themselves almost perfectly with Peter Schiff's economics.

A year ago, they would call him a gold bug and a kook, but today they align with him and many don't even know it.

If you go back in time, you can witness the "birth" of inflation was around the time lumber prices started to climb. Then it was the lack of computer chips for new cars, appliances, and other goods requiring them, which drove the up the price of used cars and any available products already produced. 

Then it was the war in Ukraine which drove up the price of oil and commodities. Then there is climate change drought and flooding disrupting crop harvests. 

There was a shortage of dock workers to unload cargo ships and the harbors were full of ships waiting to be unloaded. There still is a shortage of over the road drivers to transport the goods to distribution centers. Massive covid lockdowns in China have added to the supply problems.

My thesis is that those factors combined to cause the inflation we have now. I also think there is some "along for the ride" price gouging happening.

Government spending DID create bubbles in crypto, NFTs, collectibles, and stocks but they have since burst. 

That was a transfer of wealth from the many to the few......so a few people DID get very wealthy from the bubbles.

People are always looking for that one simple answer........so let's just blame the government and that be that.


----------



## m3s

sags said:


> People like Pierre P who claim inflation is all due to government spending, are aligning themselves almost perfectly with Peter Schiff's economics.
> 
> A year ago, they would call him a gold bug and a kook.


Politicians have to cater to the lowest common denominator. None of them are reliable

The mentally deficient who watch CNBC all day can't handle first principles thinking. Your explanation story changes every time it's proven wrong sags. First it was transitory, then it was supply chain, then it was Russia, then it's another story for the mentally deficient mainstream media viewer

Peter Schiff is consistent and has a history of success. First principles thinking


----------



## sags

Which proves you one of the people looking for that one simple answer, rather than considering inflation can be caused by a confluence of volatile events.


----------



## sags

If you have faith in Peter Schiff you should sell all your assets and buy gold, and most certainly avoid anything to do with bitcoins or crypto.

I listen to Peter Schiff's podcast when it comes out, because he breaks down the economic numbers very well, but I don't support his conclusions.

I don't believe the financial world is going to implode and return to the gold standard. I believe MMT would replace a failed financial system.

Global governments have been discussing MMT as a viable replacement for a long time.


----------



## m3s

sags said:


> Which proves you one of the people looking for that one simple answer, rather than considering inflation can be caused by a confluence of volatile events.


This proves nothing. Your logic lacks understanding of what proof is



sags said:


> If you have faith in Peter Schiff you should sell all your assets and buy gold, and most certainly avoid anything to do with bitcoins or crypto.
> 
> I listen to Peter Schiff's podcast when it comes out, because he breaks down the economic numbers very well, but I don't support his conclusions.
> 
> I don't believe the financial world is going to implode and return to the gold standard. I believe MMT would replace a failed financial system.
> 
> Global governments have been discussing MMT as a viable replacement for a long time.


Easy to say when you're a boomer

Not so much for anyone younger with a longer time horizon

Boomers won't be around to see how this plays out


----------



## cainvest

m3s said:


> Easy to say when you're a boomer
> 
> Not so much for anyone younger with a longer time horizon
> 
> Boomers won't be around to see how this plays out


Those younger generations better start voting to get them out of this, can't keep on letting this slide into the future.


----------



## Gator13

sags said:


> We pay the true market rate.
> 
> Other landlords charging exorbitant rent for units built for $15000 in 1967 are gouging tenants.


The average manufacturing salary was about $6,600 in 1965. Based on your logic, your pension should be based on your 1967 salary. Are you okay with that?


----------



## sags

I have no problem with rents keeping pace with inflation, and would expect my wages to keep pace with inflation as well.

Rent increases have grossly exceeded inflation while wages haven't kept pace with inflation.

Incidentally, my pension is the same as it was when I retired in 2005......17 years ago.

Our rent isn't the same as it was in 2005.


----------



## james4beach

sags said:


> Rent increases have grossly exceeded inflation while wages haven't kept pace with inflation.


I just talked to a new neighbour who has an apartment on the same floor of my building. Their apartment is identical to mine, same size, layout, view.

Their rent is 37% higher than the rent in the building last year. So the rent in my building (and in my neighbourhood) has gone up 37% year on year.

I've been talking with many neighbours, and everyone is concerned about this. We're OK in our current units, because rent caps exist, but we will never be able to move again. I don't know anyone who can afford a sudden 37% jump in their rent when they move to a new place.

And just wait until these rent figures get into the national inflation figures. The economists are already talking about this, since rent data is delayed. In the CPI calculation, even if other numbers start to come down, there is going to be a wave of massive rent increases starting to show up in the CPI figures. And housing (with rent) is a big component of CPI.

That means that reported (CPI) inflation next year is almost certain to remain very high.

Actually, there is one way people can afford a 37% increase in rent. *They can demand salary increases of 37%*. And that's how we're going to get a wage inflation spiral. Unless the Bank of Canada puts an end to this soon, young workers are going to start requiring wage increases like 10% to 30% to afford a place to live.


----------



## sags

Yup......and when the free market system favors labor what happens ?

They pass legislation that takes away the right to strike.

It is going to be interesting to see how this all works out. I see labor strife coming with a lot of public support behind it.

The days of cheap labor are over.


----------



## james4beach

To be honest I think we're on the brink of a wage inflation spiral... the greatest fear of the economists.

I've been talking with friends and neighbours for a while about the housing costs, but for the first time I'm hearing people say that they are going to demand pay increases due to these horrendous rent increases. The general public is finally catching on that they are facing a housing disaster unless they DEMAND big increases in pay.

Last year, I raised my hourly billing rate by +13% which I thought was a good pre-emptive move. But because so much of my cost of living is in my rent, it's actually still not enough to preserve my quality of life. To keep up with market prices of rental housing, I need to *jack up my hourly rate by another 20%*.

Are you listening, Tiff Macklem??


----------



## sags

One of the biggest changes is that many people are in the same difficult position so the public is sympathetic to each other.

The old tactic of pitting one group of employees against another....union versus non-union or public versus private......isn't going to work anymore.


----------



## m3s

james4beach said:


> Are you listening, Tiff Macklem??


Boomers aint care james. They will pretend all is fine and die off before they have to face the repercussion of their actions

My core living expenses have gone up more than 100% since moving to a much lesser quality/temp place. No chance income is going up anytime soon and everyone is quitting. It will cost Canada far more to replace what they have already lost. Healthcare system is in the worst shape but the military is not far behind.

All the wealthy/skilled/experience will leave Canada and be replaced by immigrants to prop up the boomer indexed pension pyramid scheme


----------



## sags

I have been through past high inflation and high interest periods, recessions and other economic conditions.......but this one feels a lot different than the past ones.

There are some elements in economics today that were not prevalent back in the day.

Global supply chains and manufacturing that relies on JIT (just in time). Everything coming from the other side of the world.

Indebtedness.....people didn't owe on HELOCs and credit cards like they do today. There was no such thing as "overdraft protection" on your bank account.

Technology has come with a cost. We pay internet fees, cable fees, Netflix, Amazon Prime, Disney, all kinds of fees for services that didn't exist in the past.

Where it all stops nobody knows......but as Stan Laurel said to Oliver Hardy.......


----------



## cainvest

james4beach said:


> Actually, there is one way people can afford a 37% increase in rent. *They can demand salary increases of 37%*.


Ummm not sure what kind of math you're using but how does a 37% rent increase require a 37% pay increase unless your wages are going 100% to rent?


----------



## james4beach

cainvest said:


> Ummm not sure what kind of math you're using but how does a 37% rent increase require a 37% pay increase unless your wages are going 100% to rent?


Rent is usually a pretty big component of people's budgets. Even for me (and my rent is pretty cheap) it's 55% of my monthly expenses.

So yeah, maybe you don't need as large an increase as the rent, but you still need something approaching that level. Certainly more than the 5% to 10% wage increase that's currently being seen in the private sector, that's not close to enough.


----------



## OneSeat

cainvest said:


> Ummm not sure what kind of math you're using but how does a 37% rent increase require a 37% pay increase unless your wages are going 100% to rent?


Those "37%" J4B used were words not numbers.


----------



## Covariance

james4beach said:


> I just talked to a new neighbour who has an apartment on the same floor of my building. Their apartment is identical to mine, same size, layout, view.
> 
> Their rent is 37% higher than the rent in the building last year. So the rent in my building (and in my neighbourhood) has gone up 37% year on year.
> 
> I've been talking with many neighbours, and everyone is concerned about this. We're OK in our current units, because rent caps exist, but we will never be able to move again. I don't know anyone who can afford a sudden 37% jump in their rent when they move to a new place.
> 
> And just wait until these rent figures get into the national inflation figures. The economists are already talking about this, since rent data is delayed. In the CPI calculation, even if other numbers start to come down, there is going to be a wave of massive rent increases starting to show up in the CPI figures. And housing (with rent) is a big component of CPI.
> 
> That means that reported (CPI) inflation next year is almost certain to remain very high.
> 
> Actually, there is one way people can afford a 37% increase in rent. *They can demand salary increases of 37%*. And that's how we're going to get a wage inflation spiral. Unless the Bank of Canada puts an end to this soon, young workers are going to start requiring wage increases like 10% to 30% to afford a place to live.


I am long apartment REITs for this reason. Nice inflation hedge.


----------



## cainvest

james4beach said:


> So yeah, maybe you don't need as large an increase as the rent, but you still need something approaching that level.


Why not go ask for 37% or even more, what are they going to do ... fire you for someone cheaper?


----------



## Covariance

james4beach said:


> Rent is usually a pretty big component of people's budgets. Even for me (and my rent is pretty cheap) it's 55% of my monthly expenses.


Shelter has a relative importance of 29.8% in CPI.


----------



## james4beach

Covariance said:


> Shelter has a relative importance of 29.8% in CPI.


That's the largest weight of any single item in the CPI. The largest weights, which make up 77% of the CPI, are

29.8% Shelter
16.9% Transportation
15.9% Food
14.5% Household operations, furnishings, equipment

So shelter (including rents) is the biggest component by far. That's why the massive pace of rent increases is a huge problem for inflation over the next year. The effects haven't really hit the CPI yet.

Reference


----------



## Covariance

james4beach said:


> That's the largest weight of any single item in the CPI. The largest weights, which make up 77% of the CPI, are
> 
> 29.8% Shelter
> 16.9% Transportation
> 15.9% Food
> 14.5% Household operations, furnishings, equipment
> 
> So shelter (including rents) is the biggest component by far. That's why the massive pace of rent increases is a huge problem for inflation over the next year. The effects haven't really hit the CPI yet.
> 
> Reference


Keep in mind, as you noted above, most people didn’t see the big increase in rent. The average increase across the survey group feeding into total survey would be more modest.


----------



## cainvest

Covariance said:


> Keep in mind, as you noted above, most people didn’t see the big increase in rent.


Of course not, most rents are capped at a much smaller amount, like 2%.


----------



## MrBlackhill

james4beach said:


> wage inflation spiral


Wage inflation spiral is a myth (or a mostly unlikely scenario). Big corps like to use that myth as a reason why they are being cheap on wage increase. First, those who put the biggest pressure on wage increases are those in a tight labor market who are currently struggling with paying their bills. So it's actually simply healthy as we would end up increasing the wages of the low income people who are in high demand. That's simply how the free market should work. Meanwhile, those with high income may whine and ask higher wages but as they aren't struggling as much as the low income, they don't put as much pressure. Unless obviously if they are also in such high demand, otherwise an unjustified increase in wage would lead to layoffs if there isn't enough demand. Anyways that increase in wages can't be all passed on as increase in prices because we need an increase in demand in order to justify an increase in prices.

Nobel Prize Milton Friedman said that wage-price spiral can't happen if there's no increase in money supply or money velocity. Nobel Prize Robert Shiller also disagrees on wage-price spiral.



https://www.cato.org/commentary/wage-price-spiral-explanation-inflation-dangerous-myth








The ‘Wage-Price’ Spiral Is a Symptom of Inflation, Not the Cause | John Phelan


If a restaurant raises its prices to cover higher wages, it may lose customers. And if this business can raise prices without losing customers the question has to be asked: Why didn’t it do so before?



fee.org












Council Post: The Myth Of The Wage-Price Spiral


Given the paths of prices and pay in the past year, I believe concerns of spiraling costs are probably overblown.




www.forbes.com












The wage-price spiral myth? | NEB Digest


Should workers ask for a pay rise? Exploring the relationship between wages and inflation, the state of public sector pay, and whether we are seeing a ‘profits-price spiral’.




www.neweconomybrief.net












A Wage-Price Spiral? Unfortunately, the “Wage” Part of That Equation Isn’t Cooperating


Some economists deny that “wage-price spirals” exist. They do. But we’re not in one. And in a way, that’s a shame.




newrepublic.com












The Myth of “Wage Push” Inflation


Much of the economic news lately is focusing on the fact that labor is becoming a scarce commodity. Each quarter when labor and job statistics are released, we hear how it is becoming more and more difficult for employers to find qualified workers. We have been told that for the first time in 20...




www.johnlocke.org


----------



## james4beach

Covariance said:


> Keep in mind, as you noted above, most people didn’t see the big increase in rent. The average increase across the survey group feeding into total survey would be more modest.


Anyone who is staying put will have small increases in rent (most parts of Canada anyway).

But people naturally do move over time. They move for work, family needs, many reasons. So over time, these catch-ups to "market rates" will kick in. But I don't know the NET effect on average rent in the country, when looking at a one year basis.


----------



## james4beach

I analyzed a few categories of my spending, from 2020 until now. Each chart shows a moving average over 6 months. So for example in the first graph (food), the first point at $626 was my monthly average food cost over 6 months. Every data point is a 6 month average.

The main point here is to look at the shape of the curves. I'm trying to figure out where my expenses are increasing. This is just a sample, not all my categories.


FOOD: the shape of this curve surprised me. My food costs early in the pandemic were quite high, probably because of indiscriminate buying, plus I preferred shopping at high-end stores which tended to be less crowded. My food costs have largely been *decreasing* since 2020 as I returned to hunting for deals. Recently, prices have started moving up, but hard to really call that clear inflation yet.










TRAVEL: this is clearly where I've had a *big* increase in spending. I'm taking more trips. Early in the pandemic I was averaging $100/month in travel. Lately I'm averaging $500/month. This is a big contributor to my increase in spending. Hard to figure out how much of this is inflation in travel costs vs say 2018 or 2019. There's a discretionary component, but travel has also gotten more expensive.










TRANSPORTATION: local car and transit costs, including gas. This has been stable. It started very low in 2020 (obviously) but has been range-bound in 2021 and 2022. No inflation. No visible impact from gas prices.











HOME ESSENTIALS: there's a big bump when I moved and bought a ton of stuff. But otherwise, these costs are stable/declining.










HEALTH: this has been steadily rising. This includes things like supplementary health insurance (since I'm self employed), vision, dental, masks, gyms and public recreation fees.










These are most of my big expenses other than housing (rent). I excluded rent because it's capped and stable, since I haven't moved.

So I'm not sure what to make of all this. If I look at the sum of each of these monthly costs, *I do see a whopping 23% increase over the last two years*
Early 2020: they summed to $1300
But today: they sum up to $1600

On the other hand, which of these is really steadily rising? *Only my travel and health costs are steadily trending up*. But if travel is somewhat discretionary, am I really experiencing "inflation"?


----------



## james4beach

After looking at the above, I think that virtually all of my increase in living expenses since 2020 is due to an increase in travel. I did not expect to see that. I really thought that things like food and essentials were getting more expensive. For me, they haven't been.

However, housing costs are still important. It *will* eventually hit me when I move.


----------



## MrBlackhill

To anyone truly trying to understand inflation, here's how it's calculated.

P = M*V/Y

P is the price
M is the quantity of money, the money supply
V is the velocity of money, the average number of times an average dollar is spent to buy final goods and services per unit of time
Y is the real GDP

Actually, the nominal GDP = P*Y = M*V

And, well, inflation will be the change in P (price) from year to year, which is ∆P

You could say that: ∆P = ∆M + ∆V - ∆Y

Basically, the price change (inflation) is the sum of the change in quantity of money AND velocity of money, to which we subtract the change in real GDP.

Conclusion, there's three variables to look for before blaming everything only on one of those variables. So when you wonder why we've been printing money, why rates have been low, then look at ALL of these variables.

So... Yes, M1 increased a lot









BUT velocity of M1 decreased a lot









Combined with real GDP









If we calculate it with the provided formula and use the change from a year ago to see inflation, we get...









Here's how it works out on the full period, comparing the reported inflation to the provided formula. (Some differences due to time scale and other nuances, but you get the correlation)














M1*Velocity of M1 Money Stock/Real Gross Domestic Product | FRED | St. Louis Fed


Graph and download economic data for M1*Velocity of M1 Money Stock/Real Gross Domestic Product from Jan 1947 to Nov 2022 about M1, monetary aggregates, USA, velocity, headline figure, real, GDP, average, all items, urban, consumer, CPI, inflation, price index, price, and indexes.



fred.stlouisfed.org


----------



## sags

MI includes all deposits in savings accounts, checking accounts, and other liquid assets.

Millions of Canadians deferred their mortgage payments, credit card payments, student loan payments and the money increased the balances in liquid accounts.

Contrary to popular belief by some it does not represent the money injected into the economy by the government. There are other factors involved.

Over $1 Billion a month in mortgages alone were being deferred in 2020. In addition there were deferrals of auto loans, student loans, credit cards etc.

There was also a surge in "new" mortgage debt, which was likely people refinancing their mortgage to raise cash.

That money would likely be held in savings or checking accounts, and skewed the "savings" rate of consumers during the pandemic.

The belief that people managed to save a lot of money during the pandemic due to government stimulus benefits is not accurate.

People emerging from the pandemic with pockets full of government cash is political misinformation.

_The CMHC calculated that on average, that means* Canadians deferred about $1 billion in mortgage debt every month since the pandemic began*. But most of those deferral programs were for six months at most, which means those who applied early are due to start making up those payments now or soon.
*"Given that many financial institutions have offered payment accommodations to their mortgage clients for up to six months*, there continues to be a risk that a significant increase in mortgage delinquency will be observed in the third or fourth quarter of this year as these deferral agreements come to an end," the CMHC said._









Canada's big banks field half a million mortgage deferral requests


Canada's biggest banks have received nearly half a million requests from homeowners to hold off mortgage payments as the economic fallout from the COVID-19 pandemic deepens, according to the Canadian Bankers' Association.




www.reuters.com





_Existing mortgages are getting more payments tacked on to them, and there's even been a surge in new mortgage debt, too, the CMHC said. The number of new loans grew by 14 per cent in the first quarter of 2020 compared to 2019.
*"We observed a surge in outstanding residential mortgage credit in the first five months of 2020*," said Tania Bourassa-Ochoa, the CMHC's senior specialist in housing research. "This mortgage credit acceleration is a result of an increase in newly extended mortgages, given residential property sales were up late last year and early this year, and* a record number of homeowners deferring their mortgage payments* from impacts of pandemic-related economic shutdowns."_



https://www.cbc.ca/news/business/covid-mortgages-cmhc-1.5718894


----------



## sags

There were also rent deferrals, which in my opinion was a particularly bad policy.

Unlike mortgages, student loans, auto loan deferrals which just added the unpaid amounts to the total balance, the deferred rent was eventually demanded by landlords.

When the tenants refused to pay what they owed, the landlords processed eviction notices and the tenants filed appeals.

The appeal process extended into years of waiting for judgement, and when finally issued.......the tenants moved out and didn't pay the outstanding debt.

The tenants did have extra money in their bank accounts because they weren't paying any rent, but the landlords suffered losses to their incomes.

Some tenants remained in units without paying rent for a couple of years, before they were successfully evicted.

It was a real mess.


----------



## AltaRed

M1 has nose dived in 2022. This year's data will show a remarkable decline as it has in Canada (BoC started a decline earlier than the USA). It will take quite awhile to work off as the velocity of money speeds up. Inflation will remain elevated, albeit not at current levels, for some time. Some economists predict it will be stubbornly difficult to get it below 4% for at least another 2 years.


----------



## m3s

Dunning Kruger effect sags

Your rent is capped at 2.5% increase so you are now paying less than half the Canadian average and probably 1/3 the local market. Meanwhile your pension is indexed to inflation better than anyone younger than boomer will ever have.

You said your income went up like 10% while your rent went up $26 which means you pay $1000 for rent in London Ontario while getting a PhD by watching CNBC fake news all day. There is such a disconnect between these boomers and reality

You have no clue how the world works today because you don't live in the real world


----------



## sags

None of Canada's political leaders are boomers.

Many of the children of boomers are now deeply entrenched in all aspects of business, politics, and society, preparing to take over the world.

Our niece graduated business school 20 years ago and is a senior executive for Walmart, earning high 6 figure income and owns a $7 million estate north of the GTA.

Many others are doctors, lawyers, business leaders, forging ahead by following the example of their boomer parents.

It sounds to me like you decided to live the life of a nomad, traveling from country to country, changing jobs constantly, and had little interest in building a future through the traditional methods deployed by boomers and generations before them.

There is a price to pay for that lifestyle choice and unfortunately for those who choose such a path, the realization of the price comes later in life.


----------



## m3s

sags said:


> It sounds to me like you decided to live the life of a nomad, traveling from country to country, changing jobs constantly, and had little interest in building a future through the traditional methods deployed by boomers and generations before them.
> 
> There is a price to pay for that lifestyle choice and unfortunately for those who choose such a path, the realization of the price comes later in life.


Changing jobs constantly is pretty normal/required nowadays for people who want progress professionally. It doesn't really apply to me as I've worked for the same organization for over 20 years and moving/progressing/learning is just the nature of the job. Not everyone has the same background or opportunities to chose their lifestyle and you have no information to make the judgement on other people here

It's impossible for example for a young person to skip university, get a unionized job at a party and do the same thing for 40 years to get an indexed pension and rental expenses capped at 2.5% well below market. The point is you don't understand what young people are facing today and they don't have the opportunities you had to get a pension without any post-secondary debt or competitive education.

Travelling country to country does give me a lot of perspective that people are clearly missing who stay in the same place. Things worked out fine for your niece and I can also easily retire before 40 (could have easily retired early 30s but there are too many great opportunities now) The problem is what is happening to the country due to boomer entitlement and actions - while simultaneously calling the younger people entitled


----------



## cainvest

m3s said:


> It's impossible for example for a young person to skip university, get a unionized job at a party and do the same thing for 40 years to get an indexed pension and rental expenses capped at 2.5% well below market.


You sure about that? 
Not sure what you mean by "get a unionized job at a party" though.


----------



## m3s

cainvest said:


> You sure about that?
> Not sure what you mean by "get a unionized job at a party" though.


sags said he got job at GM at a party one day

So where can a young person get a job that requires no secondary education or skills at a party nowadays with an indexed DB pension and union benefits? Trades are pretty good way to skip university debt but they don't walk off the street or get hired at a party they still require years of skills training and apprenticeship and often small business knowledge as well. They don't come with any pension or other benefits nowadays

Nowadays most young professionals who want to progress are moving to where good opportunities are - which means moving to move up or stagnate. Many Canadians don't have the luxury of staying home and doing what their boomer parents did. Maybe staying in the same rental apartment for a decade with 2.5% rental increase is a good way to scam the system but it's not sustainable or logical. I doubt sags landlord likes him very much.

Young people also can't rent at rates from 2005


----------



## cainvest

m3s said:


> sags said he got job at GM at a party one day
> 
> So where can a young person get a job that requires no secondary education or skills at a party nowadays with an indexed DB pension and union benefits?


Maybe someone at a party said a certain place was hiring ... that's about it, apply like everyone else. DB pensions are all but gone now for most jobs but DC pensions are alive and well at many places which are still good.


----------



## damian13ster

If you are dealing with inflation, just cancel disney plus subscription - problem gone


Also for those believing the lie that carbon tax rebates make up for carbon tax, PBO has shown otherwise:





__





Loading…






www.taxpayer.com


----------



## m3s

cainvest said:


> Maybe someone at a party said a certain place was hiring ... that's about it, apply like everyone else. DB pensions are all but gone now for most jobs but DC pensions are alive and well at many places which are still good.


DC pensions for trades with no post-secondary education? DC pension is not a DB pension indexed to inflation.

If people did what our boomer parents did back east well some do and they survive on EI, alcohol and drugs. They can't afford a house or to maintain even what the boomers had. The smart ones moved to where the opportunities were

But of course the young people are entitled because they share Netflix with 5 friends


----------



## Gator13

m3s said:


> Changing jobs constantly is pretty normal/required nowadays for people who want progress professionally. It doesn't really apply to me as I've worked for the same organization for over 20 years and moving/progressing/learning is just the nature of the job. Not everyone has the same background or opportunities to chose their lifestyle and you have no information to make the judgement on other people here
> 
> It's impossible for example for a young person to skip university, get a unionized job at a party and do the same thing for 40 years to get an indexed pension and rental expenses capped at 2.5% well below market. The point is you don't understand what young people are facing today and they don't have the opportunities you had to get a pension without any post-secondary debt or competitive education.
> 
> Travelling country to country does give me a lot of perspective that people are clearly missing who stay in the same place. Things worked out fine for your niece and I can also easily retire before 40 (could have easily retired early 30s but there are too many great opportunities now) The problem is what is happening to the country due to boomer entitlement and actions - while simultaneously calling the younger people entitled


You are correct that one shouldn't make judgement on others. Given your statement, you shouldn't criticize those who like having Canada as their home. You don't understand those who think having roots is important as you've moved around so much. 

If you have children, moving around can come at a cost (not measured financially). It can also change your perspective on what's important. Balancing spending time with your kids vs progressing professionally.

Curious if you work for a private company, public company or government type job? Have a family or not? Sounds like you spent time in the military.

There are still public service positions available that don't require a degree and offer a db pension. Trades don't require a university education and offer a very good living, some with db pensions.

I am certainly not criticizing your situation or choices. Everyone should make their decisions on what is best and makes them happy. Cheers


----------



## cainvest

m3s said:


> DC pensions for trades with no post-secondary education? DC pension is not a DB pension indexed to inflation.


Yes, DC for some unskilled labour jobs here. Some provide training if needed. Of course DC isn't DB but if the employer is providing matching contributions well that's a good thing right?


----------



## MrBlackhill

cainvest said:


> but if the employer is providing matching contributions well that's a good thing right?


Oh yeah, I guess it's only to be part of the stats. I had employers who where considered as providing a DC plan I guess... because they would match up $250 a year on that RPP. Amazing, right? Great help with the retirement, that's probably up to $70,000 after 40 years invested at 8% real return, wowza!

Only about 9% of employers in the private sector provide a DB plan, only about 8% a DC plan, and about 6% another type of RPP.

And, as I said, I guess the employers who match an amazing $250/year are considered in those stats for DC plan employers. Wonderful!





__





Percentage of paid workers covered by a registered pension plan


none




www150.statcan.gc.ca


----------



## Gator13

MrBlackhill said:


> Oh yeah, I guess it's only to be part of the stats. I had employers who where considered as providing a DC plan I guess... because they would match up $250 a year on that RPP. Amazing, right? Great help with the retirement, that's probably up to $70,000 after 40 years invested at 8% real return, wowza!
> 
> Only about 9% of employers in the private sector provide a DB plan, only about 8% a DC plan, and about 6% another type of RPP.
> 
> And, as I said, I guess the employers who match an amazing $250/year are considered in those stats for DC plan employers. Wonderful!
> 
> 
> 
> 
> 
> __
> 
> 
> 
> 
> 
> Percentage of paid workers covered by a registered pension plan
> 
> 
> none
> 
> 
> 
> 
> www150.statcan.gc.ca


A real shame the private sector workers have to pay taxes to fund the extremely generous DB public sector pensions.


----------



## m3s

Gator13 said:


> You don't understand those who think having roots is important as you've moved around so much.


This is an incorrect assumption. It is a well known sacrifice or lifestyle decision. Again everyone has different opportunities and situations



Gator13 said:


> If you have children, moving around can come at a cost (not measured financially). It can also change your perspective on what's important. Balancing spending time with your kids vs progressing professionally.


Of course. This is also apparently a major factor that women progress less and make lower average income statistically. They often prioritize time with their kids vs progressing professionally. I'm not saying everyone should prioritize career but again everyone has different opportunities, purposes and decisions to make

Now consider that younger people have far more pressure to compete and to earn a living wage and you may start to understand why younger people are having far less children. It is not simply the cost of raising children but the opportunity cost people can no longer afford. Again everyone has different opportunities and situations.



Gator13 said:


> Curious if you work for a private company, public company or government type job? Have a family or not? Sounds like you spent time in the military.
> 
> There are still public service positions available that don't require a degree and offer a db pension. Trades don't require a university education and offer a very good living, some with db pensions


I'm military with DB pension. The free education is a great deal when you're from the east coast. Some tried to carry on what our parents did back east but it's not as feasible at all

Like everything it has its perks and sacrifices. Younger subordinates have a watered down version of the DB pension and suffering economically - especially because of moving, lack of career opportunity for spouses in a country where the cost of living now expects dual incomes.

People are now quitting far faster than we can replace them before 2030, which only creates more work for those left and more pressure to leave in a viscous cycle. Canadian military will now accept permanent residents. Canada is now heavily reliant on immigration

This puts massive pressure on all public services such as healthcare. Canada is about to change drastically as the boomer demographic retires and moves into long term care while they are replaced by immigrants. Meanwhile skilled people are working elsewhere such as the US

I have lots of time to set my roots down elsewhere and I'm fortunate to have that flexibility. I'm certainly not going to retire to a frigid cold place to wait years just to get a family doctor while paying high cost of living and taxes

There exist better opportunities for those who will seek them out. It's just sad the boomers didn't think to hand over country as amazing as they received


----------



## sags

Unionized skilled trades often have DB pensions. Our son is a member of LIUNA and they have good wages, excellent benefits, and a generous DB pension.

Other skilled trades have similar or better packages.

People might be surprised at the wages and benefits skilled trades earn these days.


----------



## m3s

sags said:


> Unionized skilled trades often have DB pensions. Our son is a member of LIUNA and they have good wages, excellent benefits, and a generous DB pension.
> 
> Other skilled trades have similar or better packages.
> 
> People might be surprised at the wages and benefits skilled trades earn these days.


Trades are definitely under rated. I doubt the DB pension compares to what they used to be but it's good to hear they still exist

You've said your son has accepted he will never own a home though. Boomers should be up in arms about this out of concern for their children. Yet they only seem to worry about themselves while calling young people entitled, lazy and having it so easy etc

Imagine how the zoomer grandchildren will be if their millennial parents can't even afford a home. This is not a good situation for young Canadians


----------



## Covariance

The cure for high prices, is high prices. When fewer and fewer can afford, what necessarily follows is an adjustment. 

when thinking about where this is going, forget linear extrapolation of the past.


----------



## Gator13

m3s said:


> This is an incorrect assumption. It is a well known sacrifice or lifestyle decision. Again everyone has different opportunities and situations
> 
> 
> 
> Of course. This is also apparently a major factor that women progress less and make lower average income statistically. They often prioritize time with their kids vs progressing professionally. I'm not saying everyone should prioritize career but again everyone has different opportunities, purposes and decisions to make
> 
> Now consider that younger people have far more pressure to compete and to earn a living wage and you may start to understand why younger people are having far less children. It is not simply the cost of raising children but the opportunity cost people can no longer afford. Again everyone has different opportunities and situations.
> 
> 
> 
> I'm military with DB pension. The free education is a great deal when you're from the east coast. Some tried to carry on what our parents did back east but it's not as feasible at all
> 
> Like everything it has its perks and sacrifices. Younger subordinates have a watered down version of the DB pension and suffering economically - especially because of moving, lack of career opportunity for spouses in a country where the cost of living now expects dual incomes.
> 
> People are now quitting far faster than we can replace them before 2030, which only creates more work for those left and more pressure to leave in a viscous cycle. Canadian military will now accept permanent residents. Canada is now heavily reliant on immigration
> 
> This puts massive pressure on all public services such as healthcare. Canada is about to change drastically as the boomer demographic retires and moves into long term care while they are replaced by immigrants. Meanwhile skilled people are working elsewhere such as the US
> 
> I have lots of time to set my roots down elsewhere and I'm fortunate to have that flexibility. I'm certainly not going to retire to a frigid cold place to wait years just to get a family doctor while paying high cost of living and taxes
> 
> There exist better opportunities for those who will seek them out. It's just sad the boomers didn't think to hand over country as amazing as they received


Your response is pretty much as expected.

I would think the millennials and future generations will have some pretty heavy lifting to do to support all those public sector DB pensions such as the one you have.


----------



## m3s

Gator13 said:


> Your response is pretty much as expected.
> 
> I would think the millennials and future generations will have some pretty heavy lifting to do to support all those public sector DB pensions such as the one you have.


Of course - It's not about me. Pension contributions have increased substantially which means the younger pay a disproportionate amount

It's about boomers calling millennials entitled/sensitive when they themselves are not only more entitled but also more sensitive to words as innocuous as boomer. It's hypocrisy to an extreme

To the boomers everything is about them so they assume everything is about you as well. Meanwhile they call millennials the me generation  It's called projection


----------



## undersc0re

There is an apartment building here that was $1850 2 years ago, now they want $2600. This is a 3 bed 2 bath newer building. Thats insane, of course if you already had a place there then you only deal with small increases. They also charge extra for parking and storage.


----------



## Gator13

m3s said:


> Of course - It's not about me. Pension contributions have increased substantially which means the younger pay a disproportionate amount
> 
> It's about boomers calling millennials entitled/sensitive when they themselves are not only more entitled but also more sensitive to words as innocuous as boomer. It's hypocrisy to an extreme
> 
> To the boomers everything is about them so they assume everything is about you as well. Meanwhile they call millennials the me generation  It's called projection


Are Gen X just as bad as Boomers?


----------



## AlwaysMissingTheBoat

undersc0re said:


> There is an apartment building here that was $1850 2 years ago, now they want $2600. This is a 3 bed 2 bath newer building. Thats insane, of course if you already had a place there then you only deal with small increases. They also charge extra for parking and storage.


The apartment my folks rented was $1,250 two years ago (two bedroom outside of Halifax). It's now listed for $1,950 and it's in the same condition by the looks of the photos, no renos.


----------



## m3s

Gator13 said:


> Are Gen X just as bad as Boomers?


Gen X are the goldilocks of the generations. At least until we become geriatric and out of touch with reality



AlwaysMissingTheBoat said:


> The apartment my folks rented was $1,250 two years ago (two bedroom outside of Halifax). It's now listed for $1,950 and it's in the same condition by the looks of the photos, no renos.


Radio recently claimed the national average was over $2k. This is just what happens if you give everyone playing monopoly extra money


----------



## sags

What happens.......everyone runs out and rents 2 or 3 apartments ?

Rents are a case of landlords charging as much as they can get for a place.

Capitalism.........greed is good.

I think it will change abruptly though.

There are tens of thousands of condos being completed that are pre-owned or not sold at all......and there are no buyers remotely interested in buying them.

Those owners will have to rent them out or just walk away and declare bankruptcy. It will flood the market with rentals.

Just hold on......soon enough the apartments will have signs out front saying......"new appliances and a month's free rent" again.


----------



## Gator13

m3s said:


> Gen X are the goldilocks of the generations. At least until we become geriatric and out of touch with reality
> 
> 
> 
> Radio recently claimed the national average was over $2k. This is just what happens if you give everyone playing monopoly extra money


I love the Goldilocks reference for Gen Xers. LOL


----------



## james4beach

AlwaysMissingTheBoat said:


> The apartment my folks rented was $1,250 two years ago (two bedroom outside of Halifax). It's now listed for $1,950 and it's in the same condition by the looks of the photos, no renos.


What a disaster, up 56%. That's even bigger than the 37% (one year) increase seen in my building.

And yes those figures are comparable because the price in our building 1 year ago was almost the same as 2 years ago. The prices only started to increase in late 2021. When I talked to the landlord about this he said that rents did not increase the previous year, but 37% over two years is still 17% annualized! I think if I calculate my neighbourhood's rental increases over 3 years starting before the pandemic, the figure is around *12% annualized* from pre-pandemic to now.


----------



## m3s

sags said:


> None of Canada's political leaders are boomers.
> 
> Many of the children of boomers are now deeply entrenched in all aspects of business, politics, and society, preparing to take over the world.


Political leaders are puppets

The real powerful people look like this - old and gray


__ https://twitter.com/i/web/status/1589984081923768321


----------



## andrewf

^ Definitely saying the quiet part out loud. You're supposed to joke about that at the club after a quick 9.


----------



## m3s

andrewf said:


> ^ Definitely saying the quiet part out loud. You're supposed to joke about that at the club after a quick 9.


Catch the other comment "You should have told use that" in reference to her father working at BoA while she is supposed to be the government oversight of US banks

The sooner these corrupt boomers retire the sooner we get younger people who realize the world has changed drastically


----------



## damian13ster

And you think they will be any less corrupt?
Nah. If anything, empathy and values are on the downtrend. You act like generation change will result in 180 turn in major aspects. It won't. Just read Orwell again


----------



## Covariance

A revolution is just one groups of elites taking over from the previous group of elites.


----------



## MrBlackhill

damian13ster said:


> And you think they will be any less corrupt?
> 
> Nah. If anything, empathy and values are on the downtrend. You act like generation change will result in 180 turn in major aspects. It won't. Just read Orwell again


Well, at least, we won't have one entire generation driving the whole economy and politics during their entire life due to being the majority that whole time. It's not healthy.


----------



## cainvest

MrBlackhill said:


> Well, at least, we won't have one entire generation driving the whole economy and politics during their entire life due to being the majority that whole time. It's not healthy.


This never is the case. Also, those generation labels are just made up lines in the sand ... doesn't mean any of them think a certain way. It's like incorrectly saying someone born in 1964 vs 1965 will automatically have significantly different viewpoints due to a change in their generation label.


----------



## MrBlackhill

cainvest said:


> This never is the case. Also, those generation labels are just made up lines in the sand ... doesn't mean any of them think a certain way. It's like incorrectly saying someone born in 1964 vs 1965 will automatically have significantly different viewpoints due to a change in their generation label.


I haven't labeled any generation, but we can't deny the baby boom that occurred when looking at the evolution of the age pyramid in Canada. I don't have to name the generation, I'm only pointing out the issue of having a cohort which keeps majority power throughout every stage of their life, during their 20s, 30s, 40s, 50s, 60s, etc, they always represented the majority of the population and workforce. If in 2050 we somehow have a new baby boom, it will come with the same issues.






Age Pyramids


Age pyramids are dynamic applications that allow users to see the evolution of the age structure of the Canadian population over a given time period and for selected geographies.




www12.statcan.gc.ca


----------



## cainvest

MrBlackhill said:


> I haven't labeled any generation, but we can't deny the baby boom that occurred when looking at the evolution of the age pyramid in Canada.


The baby boom you mention is the Baby Boomer Generation, is it not?


----------



## sags

Guests on CNBC discussed how lending in risk assets has dried up.

Some companies are scrambling to locate loans, and the interest cost is higher if they do.


----------



## Covariance

sags said:


> Guests on CNBC discussed how lending in risk assets has dried up.
> 
> Some companies are scrambling to locate loans, and the interest cost is higher if they do.


Intended outcome, and thus not surprising. The objective of monetary tightening is to increase the cost of capital. The only surprise is that people are surprised. This has been communicated for so long I wonder where people have been hiding.


----------



## MrMatt

Covariance said:


> Intended outcome, and thus not surprising. The objective of monetary tightening is to increase the cost of capital. The only surprise is that people are surprised. This has been communicated for so long I wonder where people have been hiding.


They hide in happy thoughts and ignorance.


----------



## m3s

Covariance said:


> Intended outcome, and thus not surprising. The objective of monetary tightening is to increase the cost of capital. The only surprise is that people are surprised. This has been communicated for so long I wonder where people have been hiding.


CNBC just confuses people

By design they spend hours waffling about nothing that could be better explained in a single tweet

They need eyeballs to sell viagra and metamucil


----------



## m3s

Covariance said:


> A revolution is just one groups of elites taking over from the previous group of elites.


So we should go back to the feudal system?

Older people could get away with a lot more and assume they still can by plausible denial and speaking like robots. This is coming to light in police forces, politicians, and institutions everywhere like the catholic church

We have too many mays to share information nowadays and speaking like Bill Clinton denying sexual acts no longer works for younger generations


----------



## Covariance

m3s said:


> So we should go back to the feudal system?


Not sure how you derive that from my comment. But no, I'm not an advocate of that method of structuring a society.


----------



## m3s

Covariance said:


> Not sure how you derive that from my comment. But no, I'm not an advocate of that method of structuring a society.


Have you heard of the French revolution?

"The French Revolution was a watershed event in world history that began in 1789 and ended in the late 1790s with the ascent of Napoleon Bonaparte. During this period, French citizens radically altered their political landscape, uprooting *centuries-old institutions such as the monarchy and the feudal system.*"

I generally agree with your statement though because it's a cycle that occurs over multiple generations. Confidence in institutions gets so low there is a revolution to improve on institutions and systems. Then over time people learn how to game that system. But it's still and improvement

It's time for all the gray hairs to get out of the way so we can improve things


----------



## cainvest

m3s said:


> It's time for all the gray hairs to get out of the way so we can improve things


That'll never happen ... there is a constant resupply of gray hairs.


----------



## m3s

cainvest said:


> That'll never happen ... there is a constant resupply of gray hairs.


There should be an age limit on some jobs

Joe Biden looks like he's lost every time he leaves a stage and needs his wife to redirect him

It's absurd


----------



## Covariance

m3s said:


> Have you heard of the French revolution?
> 
> "The French Revolution was a watershed event in world history that began in 1789 and ended in the late 1790s with the ascent of Napoleon Bonaparte. During this period, French citizens radically altered their political landscape, uprooting *centuries-old institutions such as the monarchy and the feudal system.*"


lol. yes I have. And it illustrates my comment. It was led by a group of people. It didn't happen by itself to be followed by new people with power. To generalize, people stop following the prior leader (elite) and follow the rebel leaders (new elites who hold power).


----------



## m3s

Covariance said:


> lol. yes I have. And it illustrates my comment. It was led by a group of people. It didn't happen by itself to be followed by new people with power. To generalize, people stop following the prior leader (elite) and follow the rebel leaders (new elites who hold power).


You said you don't want to go back to the feudal system

There was an improvement there. Then they became like boomers of their time. Everyone wants to improve things.. and then become gray haired boomers

The cycle repeats but we aren't in a feudal system


----------



## Covariance

m3s said:


> You said you don't want to go back to the feudal system
> 
> There was an improvement there. Then they became like boomers of their time. Everyone wants to improve things.. and then become gray haired boomers
> 
> The cycle repeats but we aren't in a feudal system


It would appear we are in alignment. Thou I have no beef with boomers et al. My comment was more general; one set of elites replaces the other and so on and so...


----------



## james4beach

m3s said:


> There should be an age limit on some jobs
> 
> Joe Biden looks like he's lost every time he leaves a stage and needs his wife to redirect him


I think he's actually been making some very good decisions in his presidency so far. Yeah, he's old though. I'm worried that he's going to die. But he's doing quite well on the job IMO.

Still better than that morbidly obese, mentally ill, dim-witted authoritarian.


----------



## andrewf

Relevant.


----------



## m3s

andrewf said:


> Relevant.


I'm surprised that's even considered extraordinary for a leader to ask questions

The majority of my leaders have been very humble and know they rely heavily on their staff of advisors who are tapped into good subject matter experts

Then again I've always thought we have far better leaders just that none of them want to be president or prime minister anymore


----------



## damian13ster

james4beach said:


> I think he's actually been making some very good decisions in his presidency so far. Yeah, he's old though. I'm worried that he's going to die. But he's doing quite well on the job IMO.
> 
> Still better than that morbidly obese, mentally ill, dim-witted authoritarian.


Making decisions? That's a satire, right?
He is likely not even capable of deciding when to change his adult-diaper on his own.

Policies that are introduced are the work of whoever is behind 'Weekend at Biden's' and Joe Manchin.
They are the ones to be judged for what is being proposed or passed, And should be judged for elder abuse but that's a separate topic


----------



## james4beach

Biden has definitely given in, too much, to the right wing elements of his party.

Other than being bullied by the right-wing corporate democrats and their lobbyists, he seems to be doing a good job.


----------



## sags

Not much change in the Fed inflation numbers....core inflation down 0.3%,


----------



## Thal81

Lol, inflation comes out a tiny bit better than expected and pre-markets are up +3%... Such non-sense!


----------



## sags

Stock futures soar after inflation comes in below estimates during October


CNBC's Rick Santelli joins 'Squawk Box' to break down October's key inflation data, which showed that inflation increased less than expectated during the month.




www.cnbc.com


----------



## AlwaysMissingTheBoat

Thal81 said:


> Lol, inflation comes out a tiny bit better than expected and pre-markets are up +3%... Such non-sense!


The battle is won! Happy days are here again!


----------



## m3s

Thal81 said:


> Lol, inflation comes out a tiny bit better than expected and pre-markets are up +3%... Such non-sense!


Market is very forward looking

Wait until JPow stops raising rates


----------



## m3s

CNBC


__ https://twitter.com/i/web/status/1590708164378255361


----------



## Money172375

m3s said:


> There should be an age limit on some jobs
> 
> Joe Biden looks like he's lost every time he leaves a stage and needs his wife to redirect him
> 
> It's absurd


He tried a few times to say “apocalyptic“ yesterday. Ended up using a different word after about 3 attempts.


----------



## Thal81

Inverse Cramer is still sure bet.


----------



## m3s

Money172375 said:


> He tried a few times to say “apocalyptic“ yesterday. Ended up using a different word after about 3 attempts.


He said inflation was caused by the war in Iraq


----------



## kcowan

m3s said:


> There should be an age limit on some jobs
> 
> Joe Biden looks like he's lost every time he leaves a stage and needs his wife to redirect him
> 
> It's absurd


You are accusing him of agism even though he has achieved what no other President has achieved since JFK?


----------



## sags

Break out the champagne....it is party time in the markets.

Hangover tomorrow ?


----------



## m3s

sags said:


> Break out the champagne....it is party time in the markets.
> 
> Hangover tomorrow ?


Didn't you short the market yesterday 🤡

Talk is cheap


----------



## sags

Good stuff on CNBC......the investment committee and Professor Jeremy Siegel discuss inflation.


----------



## m3s

kcowan said:


> You are accusing him of agism even though he has achieved what no other President has achieved since JFK?


Joe Biden just mumbled in a press conference the Russians are pulling back from Fallujah

I'm sorry @kcowan but there is a limit when this man is Commander in Chief of the largest military in the world and confuses Ukraine with Iraq on multiple occasions now

If the driver's license of an 80 year old is revoked because they are not safe to be on the road, is that agism too?


----------



## AlwaysMissingTheBoat

m3s said:


> Joe Biden just mumbled in a press conference the Russians are pulling back from Fallujah
> 
> I'm sorry @kcowan but there is a limit when this man is Commander in Chief of the largest military in the world and confuses Ukraine with Iraq on multiple occasions now
> 
> If the driver's license of an 80 year old is revoked because they are not safe to be on the road, is that agism too?


Someone surely writes the old fella's tweets for him, but they're spittin' facts!


__ https://twitter.com/i/web/status/1590846300165373956


----------



## Covariance

AlwaysMissingTheBoat said:


> Someone surely writes the old fella's tweets for him, but they're spittin' facts!
> 
> 
> __ https://twitter.com/i/web/status/1590846300165373956


Mis type. That’s his approval rating with a decimal point misplaced.


----------



## sags

AlwaysMissingTheBoat said:


> Someone surely writes the old fella's tweets for him, but they're spittin' facts!
> 
> 
> __ https://twitter.com/i/web/status/1590846300165373956


An ususual situation when the US economy is so strong it is a problem.


----------



## kcowan

m3s said:


> Joe Biden just mumbled in a press conference the Russians are pulling back from Fallujah
> 
> I'm sorry @kcowan but there is a limit when this man is Commander in Chief of the largest military in the world and confuses Ukraine with Iraq on multiple occasions now
> 
> If the driver's license of an 80 year old is revoked because they are not safe to be on the road, is that agism too?


You seem to be affixed on his age rather than what he has accomplished.


----------



## damian13ster

kcowan said:


> You seem to be affixed on his age rather than what he has accomplished.


What is that exactly? 
His handlers have the country headed in wrong direction according to 75% of Americans


----------



## m3s

kcowan said:


> You seem to be affixed on his age rather than what he has accomplished.


If someone is a danger to society to be driving on the streets or commanding the most powerful military in the world

Ya but look what he has accomplished 🤷‍♂️ Ok


----------



## AltaRed

There is no reason to turn this thread into a partisan pi**ing contest more suitable for the Off-Topic Lounge political thread. Any number of Google links will provide a list of the top 3-5 accomplishments that can be debated out in the schoolyard.


----------



## Faramir

Always liked Peter Schiff. Not sure he is right on gold though. I am your basic Von Mises fan who doesn't fully support central banking.


----------



## Faramir

m3s said:


> This proves nothing. Your logic lacks understanding of what proof is
> 
> 
> 
> Easy to say when you're a boomer
> 
> Not so much for anyone younger with a longer time horizon
> 
> Boomers won't be around to see how this plays out


True the bad policies of the boomer years won't be addressed until they are long dead. What most don't appreciate is the new demographic trend. Hard to be taken seriously in a world extra hyper on population growth, but the trend is down. Japan already hit maximum population in the 2000s. Canada and America only grow from immigration - illegal or otherwise. The good part we are seeing. Lots of jobs as the boomers have left the workforce. That's why I don't equate jobs with a good economy. It is just demographics. The bad part is scary. Children of Men addresses what happens in such situations - in a more extreme example. Expect governments to start encouraging euthanasia for the elderly as there is just no labour supply available to take care of them.


----------



## m3s

Faramir said:


> Expect governments to start encouraging euthanasia for the elderly as there is just no labour supply available to take care of them.


You mean new people are required to fund the old people?

Sounds like a Ponzi scheme to me


----------



## Ukrainiandude

*The most important source of Canada’s inflation: The government borrowed more than $700-billion*
Economic stagnation is the deeper problem. Canada’s real GDP per capitahas only grown from $53,834 in 2007 to $56,197 in 2021. In U.S. dollars, it has barely grown at all, from $US42,097 to $US43,945. Even the dysfunctional U.S. has done better, rising from $US54,300 to $US61,280. American incomes are now a shocking 40-per-cent larger than Canadian ones.

Inflation teaches us that Canada cannot borrow and spend its way to growth. So what can be done?

A robust program of supply-side, growth-oriented policies is the only answer. It is the surest way to tackle debt and inflation: Higher income produces more government revenue for the same tax rate, and reduces the need to spend. By contrast, tackling fiscal problems with higher taxes is like walking up a sand dune.

Canada cured debt, inflation and stagnation in the early 1990s, with no painful recession. The same ingredients can work again. Start by getting serious about central bank’s inflation mandate. An inflation target means inflation, not employment, climate change or other goals properly left to elected politicians.

Fiscal policy must commit to fighting inflation – to repaying rather than growing debts. Also, the government needs an economic package centred on spending and regulatory reforms, and supply-side growth. For example, get energy moving again, remove housing restriction and fix occupational licensing. Get the sand out of the gears.

Every successful disinflation in the past has included monetary, fiscal and microeconomic reform. Attempts to stop inflation without all three have usually failed.
*








Opinion: The most important source of Canada’s inflation: The government borrowed more than $700-billion


The government cannot borrow more without causing inflation. Supply-side growth is the only answer




www.theglobeandmail.com




*


----------



## sags

Yea, just pretend that supply chain disruptions and oil prices don't cause inflation.

News reports are that covid is rampant in China's manufacturing cities. They will likely be locking down again....but supply chains don't matter.

Never mind that the government has posted budget surpluses for the past 2 quarters and is paying down the deficit.

Canada is falling apart for sure.


----------



## m3s

sags said:


> Yea, just pretend that supply chain disruptions and oil prices don't cause inflation.
> 
> News reports are that covid is rampant in China's manufacturing cities. They will likely be locking down again....but supply chains don't matter.
> 
> Never mind that the government has posted budget surpluses for the past 2 quarters and is paying down the deficit.
> 
> Canada is falling apart for sure.


You seem to disagree with all the educated experts

Maybe the PhD from CNBC is pretend


----------



## damian13ster

sags said:


> Yea, just pretend that supply chain disruptions and oil prices don't cause inflation.
> 
> News reports are that covid is rampant in China's manufacturing cities. They will likely be locking down again....but supply chains don't matter.
> 
> Never mind that the government has posted budget surpluses for the past 2 quarters and is paying down the deficit.
> 
> Canada is falling apart for sure.


Yeah, just pretend oil prices have nothing to do with government policy.

And deficit can't be paid down....... debt can be paid down, but it isn't - it keeps increasing


----------



## sags

Last time you argued it the other way around. You are going in circles now.


----------



## sags

Canada surpluses. Provinces surpluses…. but pretend they aren’t and carry on with the woe and despair stuff….it is amusing.


----------



## damian13ster

All you are doing with this post is showing you are not a very smart person.

If you want to then go listen to the russian studies major - even she tells you there is 30bln deficit this year









Government of Canada debt securities: Gross new issues, retirements and net new issues (formerly F4 to F10)


Monthly gross new issues, retirements and net new issues of securities by geography for the Government of Canada.




www.bankofcanada.ca


----------



## AlwaysMissingTheBoat

Inflation remains an entrenched problem in Britain.


__ https://twitter.com/i/web/status/1592812236858220544


----------



## sags

Inflation in Canada remains unchanged at 6.9%



https://www.cbc.ca/news/business/canada-inflation-1.6653163


----------



## sags

Rents absolutely skyrocketed in price, as landlords deal with higher costs and interest rate increases.

_According to data from rental accommodation website Rentals.ca, the average rent in October across Canada was $1,976. That's an increase of *11.9 per cent*, well ahead of Canada's inflation rate of 6.9 per cent.

The increases aren't even across the country, either, as Atlantic Canada has seen rents increase at the eye-watering pace of *32.2 per cent* in the past year. Ontario, B.C. and Alberta have seen increases of *17.7 per cent*, *15.1 per cent* and *13.2 per cent *respectively._



https://www.cbc.ca/news/business/rent-inflation-november-1.6650777


----------



## m3s

sags said:


> Rents absolutely skyrocketed in price, as landlords deal with higher costs and interest rate increases.
> 
> _According to data from rental accommodation website Rentals.ca, the average rent in October across Canada was $1,976. That's an increase of *11.9 per cent*, well ahead of Canada's inflation rate of 6.9 per cent.
> 
> The increases aren't even across the country, either, as Atlantic Canada has seen rents increase at the eye-watering pace of *32.2 per cent* in the past year. Ontario, B.C. and Alberta have seen increases of *17.7 per cent*, *15.1 per cent* and *13.2 per cent *respectively._
> 
> 
> 
> https://www.cbc.ca/news/business/rent-inflation-november-1.6650777


You said your rent went up $26 capped at 2.5% increase. That means your rent is less than half the national average but you live in a major Ontario city

Don't you realize your landlord has to pass on the lost rent from you to the younger generation? I thought you said inflation was cause by Chinese supply chains


----------



## sags

Our landlord paid $5k to build our unit. They recovered their investment in 1970s and are happy with the rent.

They gave us a 2% discount for paying by auto debit.

All landlords aren’t the same.

Some got way over their heads in debt and expect tenants to pay for their bad decisions.

Seen it all before. The cycle will change and landlords will be back offering a month free rent and new appliances again.

Until then, the government should even things up and allow tenants to deduct their rent from their income taxes.


----------



## Gator13

sags said:


> Our landlord paid $5k to build our unit. They recovered their investment in 1970s and are happy with the rent.
> 
> They gave us a 2% discount for paying by auto debit.
> 
> All landlords aren’t the same.
> 
> Some got way over their heads in debt and expect tenants to pay for their bad decisions.
> 
> Seen it all before. The cycle will change and landlords will be back offering a month free rent and new appliances again.
> 
> Until then, the government should even things up and allow tenants to deduct their rent from their income taxes.


When a new tenant moves into the building do they pay the same rent as you? Assuming for a like apartment unit.


----------



## MrMatt

Gator13 said:


> When a new tenant moves into the building do they pay the same rent as you? Assuming for a like apartment unit.


In Ontario new tenant means new rental contract. Which is why they try to kick out old tenants to get decent rent increases.

For example, in many places property taxes have increased faster than the rental increase.


----------



## Gator13

I was hoping Sags would answer the question. I don't think he has an appreciation of the issue.


----------



## m3s

sags said:


> Our landlord paid $5k to build our unit. They recovered their investment in 1970s and are happy with the rent.
> 
> They gave us a 2% discount for paying by auto debit.
> 
> All landlords aren’t the same.
> 
> Some got way over their heads in debt and expect tenants to pay for their bad decisions.
> 
> Seen it all before. The cycle will change and landlords will be back offering a month free rent and new appliances again.
> 
> Until then, the government should even things up and allow tenants to deduct their rent from their income taxes.


Property taxes are probably 5k every few years

Not to mention roof maintenance and renovations

Landlord is probably praying for a new tenant


----------



## nathan79

sags said:


> Inflation in Canada remains unchanged at 6.9%
> 
> 
> 
> https://www.cbc.ca/news/business/canada-inflation-1.6653163


Inflation increased in 8 provinces. It went down slightly in Ontario and Quebec, which was just enough to keep the national number unchanged.


----------



## sags

m3s said:


> Property taxes are probably 5k every few years
> 
> Not to mention roof maintenance and renovations
> 
> Landlord is probably praying for a new tenant


Nope.....they give cash awards at 15 and 30 years of tenancy.

They collect more than enough to earn a profit and value long term tenants. We have had some years where they didn't raise the rent at all.

They have a long waiting list for units.

It isn't hard to calculate. They have no mortgage and collect say $14,000 a year in rent.

If they pay $10,000 in taxes, heat, and maintenance per unit......they profit $4,000 per unit and own 1200 units.

Not a bad way to earn $5 million dollars profit a year just from the rental side of their businesses.


----------



## sags

Maybe some landlords don't want to kick out tenants to make more money. They would rather have good tenants paying the rent on time for decades.

Not everyone is interested in squeezing the last dime out of their customers.

Inflation is 5-7% and some landlords raised rents by over 30% ?


----------



## Gator13

> Sags, when a new tenant moves into the building do they pay the same rent as you? Assuming for a like apartment unit.


----------



## sags

In our townhouse units the tenants are long term, so the landlord updates and renovates them completely and raises the rent to recover the cost when they eventually move. Some tenants do their own renovating over the years. That is what we have done.

Our son rented a completely renovated 4 bedroom townhouse from them 18 months ago for $1575 a month plus hydro.

That is considerably below the so called market rate.

The landlord has also won the Best Rental Properties in Ontario several years in a row. The award considers design, neighborhood, landscaping, amenities etc.

There is no doubt they could charge higher rent but apparently don’t need or want to.

If they wanted to flip tenants for more profit, they wouldn’t give awards for long time tenants.


----------



## MrBlackhill

Analysis: The income you need to buy a house in these major Canadian cities


A homebuyer would need less income now to qualify for an average-priced home in a major Canadian city when compared to how much it was costing in the summer, according to new data from mortgage brokerage Ratehub.ca.




www.ctvnews.ca


----------



## Gator13

^ That is good news. Hopefully real estate prices and interest rates settle in a range that make home ownership affordable.


----------



## Thal81

Looking at Ottawa prices, a household income of $128K is needed to afford an average house of $631K. That's about my income. I would never buy a $631K house, that would be like putting on shackles of financial despair for the rest of my life.


----------



## MrBlackhill

Thal81 said:


> Looking at Ottawa prices, a household income of $128K is needed to afford an average house of $631K. That's about my income. I would never buy a $631K house, that would be like putting on shackles of financial despair for the rest of my life.


I agree, the limit price where you'd be approved for the mortgage but you'd be eating rice and bread.


----------



## james4beach

MrBlackhill said:


> I agree, the limit price where you'd be approved for the mortgage but you'd be eating rice and bread.


Several years ago, when I lived in Toronto (during low interest rates) bank reps at Scotia kept pestering me. They kept trying to convince me that I could buy a condo near 900K - 1M. I guess that was part of their "you're richer than you think" campaign.

My income was higher than it is today, but not that much higher. This would have been a ludicrous idea. And just a few months later, I was laid off and had to leave the city to find another job.


----------



## damian13ster

Oh yeah. Only determination for a mortgage with 5% down being income is weird - after all you can lose your income in couple of months/years.
Much higher equity should be required, especially in a market with house price/income being so ridiculously high


----------



## sags

Interest rates @ 5% ?

Does the average price include 1 bedroom condos ?

It doesn’t look right for single family homes.


----------



## nathan79

damian13ster said:


> Oh yeah. Only determination for a mortgage with 5% down being income is weird - after all you can lose your income in couple of months/years.
> Much higher equity should be required, especially in a market with house price/income being so ridiculously high


They only want the minimum amount of equity because they want to make interest on the balance. I have more than 35% down payment, but got offered worse rates than someone who put 5% down. I have over 700K net worth, but they only care about income which could disappear tomorrow.


----------



## m3s

nathan79 said:


> They only want the minimum amount of equity because they want to make interest on the balance. I have more than 35% down payment, but got offered worse rates than someone who put 5% down. I have over 700K net worth, but they only care about income which could disappear tomorrow.


A mortgage broker told me you can get better rates with a CMHC insured mortgage

Takes a lot of risk off the lender I suppose


----------



## nathan79

m3s said:


> A mortgage broker told me you can get better rates with a CMHC insured mortgage
> 
> Takes a lot of risk off the lender I suppose


Makes sense from their perspective, but it's completely ridiculous that such an uneven playing field exists. Who can qualify with 5% down? Pretty much only high income earners. They are getting subsidized (in the form of insurance) while people who spend years saving up a larger down payment get shafted.


----------



## damian13ster

nathan79 said:


> They only want the minimum amount of equity because they want to make interest on the balance. I have more than 35% down payment, but got offered worse rates than someone who put 5% down. I have over 700K net worth, but they only care about income which could disappear tomorrow.


That's not because of the banks. That's because of CMHC. Anything above certain % in downpayment is not insured by CMHC so banks actually have risk rather than risk being on taxpayer


----------



## MrBlackhill

nathan79 said:


> I have over 700K net worth, but they only care about income which could disappear tomorrow.


My ex-girlfriend had the same issue. At that time, I didn't even have 6-figure savings, but a good income and good profession fresh out of university, meanwhile she was still at university towards a low income profession but had $1M+ net worth, and she wanted to take a mortgage on a $300k condo but had a hard time with negotiation compared to me. Makes no sense.


----------



## Covariance

Just one of the many things in Canada that are geared to the person who gets all their income from a source that reports it all on a T4. Easy to track, easy to tax.


----------



## Faramir

james4beach said:


> Several years ago, when I lived in Toronto (during low interest rates) bank reps at Scotia kept pestering me. They kept trying to convince me that I could buy a condo near 900K - 1M. I guess that was part of their "you're richer than you think" campaign.
> 
> My income was higher than it is today, but not that much higher. This would have been a ludicrous idea. And just a few months later, I was laid off and had to leave the city to find another job.


Sorry to hear that, and in a similar situation as it looks like I will be taking a "voluntary" demotion. I am surprised that a bank would pester you to get into the real estate market. I've never had a financial institution do that. It is tough for the newer generations. I just shake my head at how expensive housing is. If rents were rising to match I would be seriously concerned.


----------



## AlwaysMissingTheBoat

You know you're in trouble when...


*Major mortgage lenders let borrowers shift unpaid interest onto principal to cope with rising costs*

At least two of Canada’s largest mortgage lenders allow borrowers to shift a portion of their interest costs onto the principal owed on their mortgages, helping them cope with the impact of soaring interest rates.

The variable-rate mortgage products from Toronto-Dominion Bank TD-T +0.38%increase and Canadian Imperial Bank of Commerce CM-T +0.65%increase are not new but they’re being put to the test in this rising rate environment.

With interest rates up 3.5 percentage points so far this year, borrowers are at risk of falling behind on their interest payments and increasing the amount of their original loan.









Major mortgage lenders let borrowers shift unpaid interest onto principal to cope with rising costs


The variable-rate mortgage products from TD Bank and CIBC are not new but they’re being put to the test in this rising rate environment




www.theglobeandmail.com


----------



## james4beach

Covariance said:


> Just one of the many things in Canada that are geared to the person who gets all their income from a source that reports it all on a T4. Easy to track, easy to tax.


Yes. This T4 income gets special treatment, and is taken more seriously for sure. It's been frustrating for me.


----------



## sags

Government extending amortizations back to 40 years or longer is likely coming.

With home prices falling, it also looks like buyers who took advantage of the joint ownership with the government program are better off than those who chose not to.

They owe 10% less mortgage, saved the cost of CMHC insurance, and the government eats 10% of the losses.


----------



## MrBlackhill

AlwaysMissingTheBoat said:


> You know you're in trouble when...
> 
> 
> *Major mortgage lenders let borrowers shift unpaid interest onto principal to cope with rising costs*
> 
> At least two of Canada’s largest mortgage lenders allow borrowers to shift a portion of their interest costs onto the principal owed on their mortgages, helping them cope with the impact of soaring interest rates.
> 
> The variable-rate mortgage products from Toronto-Dominion Bank TD-T +0.38%increase and Canadian Imperial Bank of Commerce CM-T +0.65%increase are not new but they’re being put to the test in this rising rate environment.
> 
> With interest rates up 3.5 percentage points so far this year, borrowers are at risk of falling behind on their interest payments and increasing the amount of their original loan.
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Major mortgage lenders let borrowers shift unpaid interest onto principal to cope with rising costs
> 
> 
> The variable-rate mortgage products from TD Bank and CIBC are not new but they’re being put to the test in this rising rate environment
> 
> 
> 
> 
> www.theglobeandmail.com


Nice... "Oh so you are struggling with paying the interests on your debt? Then let's simply increase your debt, there you go!"

Anyways, they allow this because they know these rates won't hold.


----------



## AltaRed

i am surprised the regulator would allow these variable rate mortgages in effect become reverse mortgages. I recognize they are designed to keep the total payment constant, but only to the point where 100% of the payment goes to interest. Beyond that, monthly payments are supposed to increase to keep pace.

This is the stuff that should keep Macklem up at nights because it does not put additional cash low pressure on the debtor as it is supposed to do.


----------



## Covariance

Re: Macklem. The team at the Bank of Canada are well aware of the potential issue. At the link below you can read their latest research on it. What is rather striking is a large percentage of variables have hit their trigger already and they represent 13% of ALL mortgages outstanding (as I read it). And we have more rate increases to come. 









Variable-rate mortgages with fixed payments: Examining trigger rates


We estimate the share of variable-rate mortgages with fixed payments that reached the so-called trigger rate—the interest rate at which mortgage payments no longer cover the principal. Amid rising interest rates, this share was close to 50% at the end of October 2022 and could potentially reach...




www.bankofcanada.ca


----------



## AltaRed

Good find! Unfortunately, it doesn't do anything to lessen my rage at lenders (and regulatory agencies) who allow 'negative amortization'. This simply increases debt kicking the can down the road while doing nothing to decrease consumer spend.


----------



## Covariance

I don’t support it, or like it either. 

In a quiet moment I looked a little closer at their model assumptions. (Chart 2). In particular the “peak” variable rate. Only another 50? I’m not familiar with the spread on these. Does that imply only 50 more on the policy rate?


----------



## AltaRed

From the verbiage below the chart


> Moreover, as of the end of October 2022, financial markets anticipate variable mortgage rates will increase by another 50 basis points by mid-2023. In this case, an additional 15% of variable-rate mortgages with fixed payments could reach their trigger rate, with the total thereby reaching 65% (or around 17% of all mortgages).


it implies "financial markets" and I imagine one can define that how they wish. The general assumption for some time has been circa 50bp to get to the 'neutral rate' and that is as good as one can assume for now. Use of any other number would imply BoC knowing more than it does. I think we all know (and BoC knows) that remains to be seen depending on how inflation plays out 1Q23.


----------



## sags

It is a lot worse situation that a lot of people realize.

Just as it was in the 2008 crash in the US, by the time the mainstream media reported the housing crash......it was already well into the crash.

The news media don't have reporters anymore and nobody is covering all the tentacles of the real estate industry in one place.

Some banks are sending out demand letters to borrowers.






The hard landing — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate







www.greaterfool.ca


----------



## m3s

sags said:


> It is a lot worse situation that a lot of people realize.


So you're just realizing what most of us have been telling you since 2020 🤡 

Maybe stop watching mainstream media if they don't have real reporters anymore


----------



## sags

Interest rates were cut 3 times in March 2020. They went down from 3.45% to 2.45%.

There were no increases in 2021.

The increases didn’t start until March 2022 when the BOC raised the rate by .25%.


----------



## m3s

sags said:


> Interest rates were cut 3 times in March 2020. They went down from 3.45% to 2.45%.
> 
> There were no increases in 2021.
> 
> The increases didn’t start until March 2022 when the BOC raised the rate by .25%.


You were confused and wrong the entire time about everything, as was Garthy Turner for the last decade

What makes you think you understand anything now? Inflation was not transitory and not good for GICs

Markets are forward looking and impacts take time to catch up


----------



## sags

Higher interest rates and mortgages have crossed the threshold of negative equity and higher payments on renewals.

It will take years to see the full effect.


----------



## sags

Yes, you should look forward to the future and stop ruminating about the past all the time.

Don’t worry JT will sort it all out.


----------



## sags

Garth Turner was right.

People didn’t listen and now they are trapped in a house they can’t afford.

The government will bail them out with extended amortizations and lower payments until the dust settles.

Watch for it.


----------



## Covariance

Zombie borrowers. Their outstanding mortgage balances will be higher than their property value for some time.


----------



## m3s

sags said:


> Garth Turner was right.
> 
> People didn’t listen and now they are trapped in a house they can’t afford.
> 
> The government will bail them out with extended amortizations and lower payments until the dust settles.
> 
> Watch for it.


Time to print more fake money UBI for dumb dumbs

Oh yea bring in millions of immigrants to prop up this ponzi


----------



## sags

No need to automatically resort to extreme measures. There are other solutions available that have proven successful in the past.


----------



## sags

US Fed meeting minutes will be released at 2 pm Eastern time today.


----------



## sags

Alberta is giving $600 each to Albertans.

Does Pierre approve of Danielflation ?


----------



## Jericho

sags said:


> Alberta is giving $600 each to Albertans.
> 
> Does Pierre approve of Danielflation ?


While I don't approve of cash handouts, it is at least coming from a surplus.


----------



## damian13ster

I think it is silly. Significant portion of people who will get it aren't actually in need. Irresponsible policies aren't limited to a single party. That's why elections are a comparison, not voting for ideal candidate since those don't exist


----------



## londoncalling

damian13ster said:


> I think it is silly. Significant portion of people who will get it aren't actually in need. Irresponsible policies aren't limited to a single party. That's why elections are a comparison, not voting for ideal candidate since those don't exist


The AB premier had to one up his Saskie counterpart. $500 in Moemoney. Most taxpayers are too dumb to realize its their own money. Doesn't matter if its liberal or conservative its coming from the same playbook .


----------



## MrBlackhill

damian13ster said:


> I think it is silly. Significant portion of people who will get it aren't actually in need.


Something we agree on!


----------



## sags

It is okay.

She will demand $600 per person more for “health transfers” and it will all work out.

The Premiers get the credit and Trudeau gets the bill.


----------



## Jericho

sags said:


> It is okay.
> 
> She will demand $600 per person more for “health transfers” and it will all work out.
> 
> The Premiers get the credit and Trudeau gets the bill.


He'll print more money as he bats his eyelashes and over enunciates his words for dramatic effect for the camera.


----------



## AltaRed

Jericho said:


> While I don't approve of cash handouts, it is at least coming from a surplus.


Imagine using it to pay down debt instead or putting it in the Heritage fund. It is terrible policy.


----------



## james4beach

londoncalling said:


> The AB premier had to one up his Saskie counterpart. $500 in Moemoney. Most taxpayers are too dumb to realize its their own money.


Moe money, mo problems.


----------



## Jericho

AltaRed said:


> Imagine using it to pay down debt instead or putting it in the Heritage fund. It is terrible policy.


That would be the responsible thing to do.


----------



## andrewf

Thal81 said:


> Looking at Ottawa prices, a household income of $128K is needed to afford an average house of $631K. That's about my income. I would never buy a $631K house, that would be like putting on shackles of financial despair for the rest of my life.


Indeed, the only time it might make sense to buy at the edge of affordability is if your income is likely to escalate (career progression, etc.). I bought my current home at about 4x gross income. Since then my income has grown by about 50% so I am financially comfortable despite rates rising. A friend of mine just bought for the first time in March, though I suggested he wait until spring as I suspected the market was softening. He was renting a basement apartment with his wife, the owner was moving so he had to find a new place and was tired of renting. He's now in a negative equity position. I feel bad for the guy. Feb/March was crazy. Bidding wars for pretty undesirable homes in the GTA exurbs.


----------



## james4beach

andrewf said:


> He's now in a negative equity position. I feel bad for the guy. Feb/March was crazy. Bidding wars for pretty undesirable homes in the GTA exurbs.


This is why excessively loose / stimulative central bank policy is so dangerous.


----------



## londoncalling

andrewf said:


> Indeed, the only time it might make sense to buy at the edge of affordability is if your income is likely to escalate (career progression, etc.). I bought my current home at about 4x gross income. Since then my income has grown by about 50% so I am financially comfortable despite rates rising. A friend of mine just bought for the first time in March, though I suggested he wait until spring as I suspected the market was softening. He was renting a basement apartment with his wife, the owner was moving so he had to find a new place and was tired of renting. He's now in a negative equity position. I feel bad for the guy. Feb/March was crazy. Bidding wars for pretty undesirable homes in the GTA exurbs.


That is unfortunate. It may be a while till he sees green with this purchase. Hopefully, he did not buy at the top of his range and plans to stay there for the long haul. It seems this purchase was more emotion based than investment based. As long as he can carry the cost and does not want to move it may turn out ok. Typically, house values follow longer term inflation rates. Everyone here is aware of the disconnect we have experienced since 2008. Not sure what it will be going forward. If inflation normalized and rates stabilize housing prices may not freefall due to the lack of supply especially in high demand markets. Currently I am neutral on where things are headed across all sectors. I think many are in a wait and see position. I would not want to be buying or selling in this market.


----------



## andrewf

He's a veterinarian who is early in his career. He'll be fine. But it was definitely a knee jerk/emotional decision that ended up costing him a few hundred thousand dollars.

Really, housing in the GTA has far outrun inflation since around 2000. My sister bought a 1800 sqft detached house in KW for $180k in 2001. In January of this year, houses in that neighbourhood sold for over $1M. That's 9% compounded. I think that is largely a story of falling rates lowering the discount rate used to value homes on implied rents. Cap rates for homes were down to like 4%.


----------



## AltaRed

If we return more to neutral interest rates over the longer term rather than the exceptionally low rates of the past decade, housing prices should more, or less, return to CPI style increases. The last decade was (should be) an aberration for the most part albeit easier qualifying criteria and longer amortizations were partially responsible for disproportionate asset prices. It is always a supply vs demand issue. That said, GTA and GVR regions are magnets for immigration so there will always be some disproportionate pricing pressure because of that.

The Economist had a very good (recent) article/analysis on global housing prices. Sweden, Canada and Australia were outliers in terms of prices being well out of whack with the rest of the economy, and thus have the furthest to fall in a recession, financial crisis, et al. Much of it is the fault of government policies looking to disproportionately pad their national GDP and Treasuries with the housing contribution to the economy. Dumb as it is, it is what it is.


----------



## sags

The only thing stopping 40 or 50 year mortgages is CMHC insurance on the mortgage.

With their massive liability, it may be the solution the government favours to save a meltdown at CMHC and unprecedented taxpayer bail out.


----------



## sags

The government should let the free market prevail but they wont because of the consequences of a housing price collapse.

The US housing collapse was a disaster that devastated financial institutions, home owners, retirees, construction, and a wide trail of destruction that many people never recovered from.

I followed it closely at the time and would bet there are lots of videos on Youtube detailing the damage the collapse caused to the “average” American who had done the right things but got caught up in it anyways.

We should be careful what we wish for.


----------



## londoncalling

History Lessons: How “Transitory” Is Inflation? | Research Affiliates 

This link suggests we won't see the neutral rate for quite some time. This link is a great reminder how scary hyperinflation can be. This is why I am content to accept this year's poor market return.


----------



## Covariance

Housing supply also needs to be factored in. BoC knows if they let up on rates then real estate will take off again, which is a bubble and inflationary.


----------



## sags

CNBC reports New York Fed chair John C. Williams is giving a speech in New York saying inflation is still too high and the Fed will be aggressive in rate hikes.

St. Louis Fed member James Bullard is also speaking to a business group talking about another 2.5% and a possible 7% rate end rate.

It looks like a "pivot" or "pause" aren't coming any time soon.


----------



## sags

Inflation isn't falling because consumers are still spending money they don't have. Personal debt levels have skyrocketed.

One way to stop the spending is to take away the credit punch bowl and freeze or lower credit limits.

The lenders did it in 2008. Will it be necessary again ?

The reality is consumers just can't help themselves. They gotta feed their spending addiction.....if they can afford it or not.


----------



## Covariance

sags said:


> CNBC reports New York Fed chair John C. Williams is giving a speech in New York saying inflation is still too high and the Fed will be aggressive in rate hikes.
> 
> St. Louis Fed member James Bullard is also speaking to a business group talking about another 2.5% and a possible 7% rate end rate.
> 
> It looks like a "pivot" or "pause" aren't coming any time soon.


They/he have been on this for a while now.

Here's the presentation if you want the source. Page 6


https://www.stlouisfed.org/-/media/project/frbstl/stlouisfed/files/pdfs/bullard/remarks/2022/nov/bullard-louisville-17-nov-2022.pdf?sc_lang=en&hash=4725A924300B1A6777E788822AF33277


----------



## nathan79

Record spending on Black Friday. Guess people haven't really gotten the message. I would have thought spending would be lower than the last two years now that the pandemic supports have ended.



> The $9.12 billion figure is up from $8.92 billion in 2021 and $9.03 billion the previous year, according to Adobe Analytics. Inflation accounts for some of the increase this year, with people paying more to buy less.











Black Friday sales rake in a record $9.12 billion from online shoppers


More than 166 million Americans are expected to shop over the five days from Thanksgiving Day through Cyber Monday.




www.npr.org


----------



## sags

Stock markets moved down on the statements from the Fed members.


----------



## Jericho

sags said:


> Inflation isn't falling because consumers are still spending money they don't have. Personal debt levels have skyrocketed.
> 
> One way to stop the spending is to take away the credit punch bowl and freeze or lower credit limits.
> 
> The lenders did it in 2008. Will it be necessary again ?
> 
> The reality is consumers just can't help themselves. They gotta feed their spending addiction.....if they can afford it or not.


The reality is, Justin Trudeau just can't help himself. He's gotta feed his spending addiction.....if he can afford it or not.

^^Fixed it for you. This is a huge participant in Canadians' cost of living increases.


----------



## damian13ster

Adjusted for inflation the spending on black Friday is actually down. You can't compare a dollar in 2021 to dollar in 2022. The latter has significantly less value


----------



## nathan79

damian13ster said:


> Adjusted for inflation the spending on black Friday is actually down. You can't compare a dollar in 2021 to dollar in 2022. The latter has significantly less value


The point is that spending is still high, even if it decreased slightly in real terms. Not everyone got a raise the same as inflation, so they won't necessarily spend more.

This is only for online by the way. There's still the other numbers to report, as well as Cyber Monday.


----------



## MrBlackhill

No wonder, with the current wealth gap still so high, the rich are still hella rich and able to spend tons. Meanwhile the poor are getting crushed and they aren't the ones moving those high spending numbers.


----------



## MrBlackhill

Another transfer from the poor to the rich... Just got $700 cashback from my credit card (transferred once a year). My credit card cost $120. I always pay the full balance, so I never pay interests. So who's paying for my $580 annual gift?


----------



## Faramir

m3s said:


> So you're just realizing what most of us have been telling you since 2020 🤡
> 
> Maybe stop watching mainstream media if they don't have real reporters anymore


Media is practically useless where the only thing they do is advance their own biased notions. I wish the media was like the ones in fairy tales. You know those journalists that put their life on the line, and would never publish an article without backing up them up with real sources. LOL.


----------



## damian13ster

MrBlackhill said:


> Another transfer from the poor to the rich... Just got $700 cashback from my credit card (transferred once a year). My credit card cost $120. I always pay the full balance, so I never pay interests. So who's paying for my $580 annual gift?


The sellers who get dinged credit card fees for each transaction


----------



## MrBlackhill

damian13ster said:


> The sellers who get dinged credit card fees for each transaction


That's not where the transfer from the poor to the rich happens. Notice how on some credit cards you get better cashback, better perks? But those credit cards are available only to those with income above median? And some are available only to high income?

For instance, how many credit cards with 4% cashback on groceries for people who make below $60,000 and households who make below $100,000?


----------



## james4beach

Got a bit of an early Christmas gift in the mail today.

The landlord is increasing my rent on the annual schedule, but only the 2% allowed by BC. This is good news because they have been trying (for over a year) to make a special, additional rent increase far above the allowed maximum. My rent increase could have been as much as 5.5% if it was approved.

Tenants in my building organized and started fighting it. We've been dragging it through the (rental) court system... we definitely delayed the whole thing. And we delayed the process so long, that the landlord had to give the standard rent increase notice and didn't have enough time to wait for the decision on their extra rent request.

I'm pleased to say that I started the effort to fight the landlord. Most recently they made a procedural mistake, and I rubbed their nose in it, and also spelled out to the judge (arbitrator) how the landlord was failing to follow the procedural rules. The judge agreed and punted the whole filling for several months.

Long enough for us to get our new rents locked in 

Don't shed any tears for the landlord. New tenants in this building pay 35% higher rent than a year ago.


----------



## sags

Well done.


----------



## james4beach

sags said:


> Well done.


Thanks. Someone on this forum helped me with the legal papers but I don't want to mention them without permission.


----------



## james4beach

Powell just gave a talk and said the Fed won't raise rates as aggressively going forward. In the same talk he said that inflation is very high and has not been coming down at all.

Energy flying. Oil immediately was back up over $80, gasoline futures went up 4%, gold up 1%, silver up 4%, lol.


----------



## damian13ster

Oil was up before Powell talk, due to massive inventory drawdown reported in this morning. Didn't move during Powell's speech


----------



## Gator13

james4beach said:


> Powell just gave a talk and said the Fed won't raise rates as aggressively going forward. In the same talk he said that inflation is very high and has not been coming down at all.
> 
> Energy flying. Oil immediately was back up over $80, gasoline futures went up 4%, gold up 1%, silver up 4%, lol.


OPEC is talking about cutting production to stabilize oil north of $80. I have heard some sound bites on this over the past couple days.

Powell's talk certainly gave the market some life though.


----------



## MrBlackhill

Deleted


----------



## m3s

All hail JPow - Lord of the boomers


----------



## damian13ster

Wait, oil is up to 4078!? Or are you showing chart completely irrelevant to my post while quoting only half of it?


----------



## MrBlackhill

damian13ster said:


> Wait, oil is up to 4078!? Or are you showing chart completely irrelevant to my post while quoting only half of it?


You are right, oil didn't move during Powell's speech.


----------



## james4beach

damian13ster said:


> Oil was up before Powell talk, due to massive inventory drawdown reported in this morning. Didn't move during Powell's speech


Thanks, didn't realize that.


----------



## AltaRed

Oil inventories et al are reported every Wednesday morning. The weekly US oil production report for the week ending Friday before is usually posted by mid-day. Weekly U.S. Field Production of Crude Oil (Thousand Barrels per Day)


----------



## MrBlackhill

Nice read.









History Lessons: How “Transitory” Is Inflation? | Research Affiliates


Across 14 developed-economy countries over the last half-century, we analyze the behavior of inflation once a country’s inflation rate surges past various thresholds and study how long a burst of inflation typically lingers. If history is a guide, inflation can take far longer to return to...




www.researchaffiliates.com


----------



## MrBlackhill

Any comments on this?

Personal savings rate at an historic low.








Personal Saving Rate


Graph and download economic data for Personal Saving Rate (PSAVERT) from Jan 1959 to Oct 2022 about savings, personal, rate, and USA.



fred.stlouisfed.org





Personal savings at lowest since about 15 years.








Personal Saving


Graph and download economic data for Personal Saving (PSAVE) from Q1 1947 to Q3 2022 about savings, personal, GDP, and USA.



fred.stlouisfed.org





People are getting broke, I guess?


----------



## damian13ster

All that chart does is proves how idiotic and inflationary covid spending was. Yikes.
Retail sales budged just a little bit. Airlines expect demand to continue to grow - there might be first signs of stress (c hink (in an armor) is apparently censored), but people are far from getting broke


----------



## AltaRed

The Canadian data is similar but not necessarily as dramatic Canada Household Saving Rate - 2022 Data - 2023 Forecast - 1961-2021 Historical Check both the 3 and 10 year rates. The impact of high(er) interest rates has not yet hit for most households, perhaps demand loans (LOC, HELOC) being the exception and those variable mortgages which pass through interest rate increases right away. The next few quarters will be important to see what the trend does.


----------



## londoncalling

What stood out to me in the link provided in #1837 in Q3 2022 was 5.7 which is much higher than any time between 2016 and Q1 2020 (right before Covid). A lot of the savings rate may be attirbuted higher debt levels and debt servicing cost. Be curious to know how many average Joes and Janes have actually increased their savings and how many have maintained their regular spending habits.


----------



## AltaRed

Folks without (or small) mortgages, HELOCs and auto loans are likely saving at higher rates because interest rates have increased dramatically. 

Per the link,


> In Canada, personal saving is personal disposable income less personal expenditure on consumer goods and services, less current transfers from persons to corporations and to non-residents as a percent of disposable income.


The table below the bar graph tells you much of the story though a single month over month comparison isn't much of a trend. One would need to go to the source (Stats Canada) for more data.


----------



## sags

I don't know about the US, but in Canada mortgage payments could be deferred and added to the balance, and auto loans, credit cards, and student loans were deferred.

It would be more surprising if people didn't have extra income if they weren't paying any of their major monthly expenses for months.

I remember Garth Turner warning home owners against it, but a lot of people did it anyways.......760,000 home owners (1 in 6 mortgages) deferred $1 billion per month for up to 6 months apparently.

_Roughly 760,000 Canadians applied for some sort of mortgage deferral from a chartered bank since the pandemic began. Canada's big banks control about two-thirds of the mortgage market, so that figure suggests that *one out of every six people with a mortgage has opted to defer at least one mortgage payment since COVID-19 began*.
The CMHC calculated that on average, that means* Canadians deferred about $1 billion in mortgage debt every month since the pandemic began*. But most of those deferral programs were for *six months at most*, which means those who applied early are due to start making up those payments now or soon._

Canadians have deferred $1B a month worth of mortgage payments since pandemic began | CBC News


----------



## sags

Someone paying $2500 a month mortgage payments and $500 a month car payments would have $18,000 of disposable income from deferred payments for 6 months.

We took advantage of the opportunity by deferring our new car payments which were locked in at 0.9 % interest for the full term, and my wife put the money into GICs.

Why not........it was basically free money and all it took was a couple of mouse clicks on the bank website and they added the payments to the end of the term.

I have a difficult time believing that people laid off from work and collecting $2,000 a month CERB were tucking it all away in a savings account.


----------



## m3s

sags said:


> We took advantage of the opportunity by deferring our new car payments which were locked in at 0.9 % interest for the full term, and my wife put the money into GICs.
> 
> Why not........it was basically free money and all it took was a couple of mouse clicks on the bank website and they added the payments to the end of the term.


I guess no reason if you don't mind being a sleazebag

The entitlement mentality of boomers is ironic indeed


----------



## sags

The bank made the offer and I honoured their offer. They were honoured that I honoured their offer.


----------



## londoncalling

The Daily — Consumer Price Index, November 2022 (statcan.gc.ca)

new data released today. Not much of surprise in my view. Fuel costs down food costs up, mortgage rates went up higher than rent etc etc. Now to see what predictions the soothsayers can put forward upon reading of the CPI tea leaves.


----------



## OptsyEagle

Does the CPI make some kind of adjustment for the actual size of the various components used to compute it. I mean a mortgage cost going up by 14.5% offset by purchases of digital media going down by 14.9% does not leave a person at a zero increase in overall living costs.

I guess the guy that paid 7.8% more for their car recouped all that extra cost when they saved the 28.2% in vehicle registration fees. That savings in the registration fee would have made all his gas free and gave him all the extra money he needed to take the whole family out to the restaurant since the gas and restaurants only went up 13.7% and 7.7% respectively. Thank god for that 28.2% decline in his vehicle registration fee or things might have been pretty tough for that guy last year. lol

There must be more to this.


----------



## m3s

londoncalling said:


> The Daily — Consumer Price Index, November 2022 (statcan.gc.ca)
> 
> new data released today. Not much of surprise in my view. Fuel costs down food costs up, mortgage rates went up higher than rent etc etc. Now to see what predictions the soothsayers can put forward upon reading of the CPI tea leaves.
> 
> View attachment 23978


So that's why Rob Ford cancelled vehicle registration fees. To manipulate the CPI 

Rent is also delayed because landlords can't just increase rent in many places unless people relocate

sags says his rent goes up by like $26 while his pension goes up with CPI


----------



## AltaRed

It's all weighted if you look up in StatsCan. See some materials....





Official Consumer Price Index (CPI) basket weights and monthly adjusted consumer expenditure basket weights


none




www150.statcan.gc.ca









The Daily — Consumer Price Index: New basket weights, 2022 update


Updated basket weights for the goods and services in the Consumer Price Index (CPI), representing consumer spending patterns in 2021, are now available. The 2021 basket will combine expenditure data from the Household Final Consumption Expenditures, Survey of Household Spending and alternative...




www150.statcan.gc.ca




Data Data


----------



## andrewf

MrBlackhill said:


> Nice read.
> 
> 
> 
> 
> 
> 
> 
> 
> 
> History Lessons: How “Transitory” Is Inflation? | Research Affiliates
> 
> 
> Across 14 developed-economy countries over the last half-century, we analyze the behavior of inflation once a country’s inflation rate surges past various thresholds and study how long a burst of inflation typically lingers. If history is a guide, inflation can take far longer to return to...
> 
> 
> 
> 
> www.researchaffiliates.com


Given that inflation is driven by expectations, I'm not sure the historical record is destiny. Given that CBs demonstrated the ability to bring inflation to 2% target and keep it there for decades, I think there is a lot more credibility in the system for their intent to 'do whatever it takes' to bring inflation back down to 2%. I don't think the Fed would be afraid of causing a deep recession if that is what it took to return inflation expectations to the target range. As it stands, wage growth is strongly lagging inflation, so there is plenty of room for decreased demand to weigh on prices, it is just a matter of decreasing demand. And the rapid rise in rates is certainly helping with that. It will take a bit longer for people on the edge to no longer be able to keep the plates spinning.


----------



## Faramir

Having an arms length stats Canada means we get fairly reasonable numbers. Since the time of Johnson the USA numbers have been manipulated. The reason of course is GDP is net of inflation. Fudge the inflation numbers then you get a higher GDP read out. That is why I look at Shadow Stats. Their methodology makes sense. To me anyways.


----------



## james4beach

andrewf said:


> I don't think the Fed would be afraid of causing a deep recession if that is what it took to return inflation expectations to the target range. As it stands, wage growth is strongly lagging inflation


Yeah I don't think they're afraid of it either. And they have given plenty of warning. Obviously everyone has had a chance to listen to their warnings and I think it's becoming comical how clear the Fed is in their warnings. The market listens to it, and immediately ignores it.

Wage growth may be lagging inflation by the way but Fed / FOMC members explain, in plenty of media interviews, how the indicators they watch are showing persistent elevated inflation. They place a lot of importance on core PCE which is a measure that has not shown any signs of declining. The media and some personalities have gotten way too excited about very tiny declines in core PCE but even with those declines, the readings are still quite high -- way above the inflation target. Core PCE has continued to increase at a very fast pace (way above 2% rate) all year.

FOMC officials have press interviews as part of their policy communication. I don't know how much more clear they could be that they will not be cutting rates any time soon, because inflation appears to be persistent.

Anything can happen, and inflation might come down soon, but I wouldn't count on it.

I would be very happy if inflation plummets and my XEG and CGL.C (gold) crash. Fine. I'd love to have this happen but I suspect that's not what's in the future.


----------



## MrBlackhill

You may be interested by the inflation rate at the provincial level, as most of them are above Canadian level (6.8%):


British Columbia: 7.2%
Alberta: 6.6%
Saskatchewan: 6.9%
Manitoba: 8.5%
Ontario: 6.4%
Quebec: 6.8%


New Brunswick: 7.8%
Prince Edward Island: 9.7%
Nova Scotia: 8.6%
Newfoundland & Labrador: 6.7%


Whitehorse, Yukon: 8.3%
Yellowknife, Northwest Territories: 7.8%
Iqaluit, Nunavut: 4.3%






Consumer Price Index by geography, all-items, monthly, percentage change, not seasonally adjusted, Canada, provinces, Whitehorse, Yellowknife and Iqaluit


Monthly indexes and percentage changes for all components and special aggregates of the Consumer Price Index (CPI), not seasonally adjusted, for Canada, provinces, Whitehorse, Yellowknife and Iqaluit. Data are presented for the corresponding month of the previous year, the previous month and the...




www150.statcan.gc.ca


----------



## MrMatt

MrBlackhill said:


> You may be interested by the inflation rate at the provincial level, as most of them are above Canadian level (6.8%):


Not surprising.

Canada is from the Federal perspective Ontario and Quebec.

It's also why such blunt tools as interest rates are problematic. The right rate for Ontario might not be the right rate for Nunavut or PEI.


----------



## andrewf

MrMatt said:


> Not surprising.
> 
> Canada is from the Federal perspective Ontario and Quebec.
> 
> It's also why such blunt tools as interest rates are problematic. The right rate for Ontario might not be the right rate for Nunavut or PEI.


This is every currency union. There is a whole branch of economics around optimal currency areas.


----------



## MrMatt

andrewf said:


> This is every currency union. There is a whole branch of economics around optimal currency areas.


Yes, and it's part of the reason to not use such a broad tool.

Sure it will likely work out fine for Ontario, but it will screw over other parts of the country.


----------



## damian13ster

They have no other tools - if fiscal policy is idiotic, monetary policy needs to increase rates and sell bonds. There really isn't much more they can do


----------



## MrMatt

damian13ster said:


> They have no other tools - if fiscal policy is idiotic, monetary policy needs to increase rates and sell bonds. There really isn't much more they can do


BS, the government of Canada has a full set of tools.
They simply have to use them, or better yet, STOP messing with them.

Trying to fix all the problems caused by bad fiscal policy is simply outside the scope and power of the Central bank.
They're the wrong institution with the wrong tools to address these problem.


----------



## damian13ster

MrMatt said:


> BS, the government of Canada has a full set of tools.
> They simply have to use them, or better yet, STOP messing with them.
> 
> Trying to fix all the problems caused by bad fiscal policy is simply outside the scope and power of the Central bank.
> They're the wrong institution with the wrong tools to address these problem.


Ehhhh, this is precisely what I said. If there is idiotic fiscal policy, MONETARY POLICY doesn't have many tools.
It is government of Canada that needs to adjust their behavior and sadly it is run by corrupt morons so it is not happening


----------



## Faramir

damian13ster said:


> They have no other tools - if fiscal policy is idiotic, monetary policy needs to increase rates and sell bonds. There really isn't much more they can do


Especially as we follow the actions in the USA. I am surprised actually that the Fed has taken such extreme measures as it has. Biden can't be happy that the Fed seems intent on tanking the economy - further than it already is.


----------



## AlwaysMissingTheBoat

MrMatt said:


> BS, the government of Canada has a full set of tools.


I believe it's called Parliament.


----------



## andrewf

damian13ster said:


> They have no other tools - if fiscal policy is idiotic, monetary policy needs to increase rates and sell bonds. There really isn't much more they can do


The benefits of sharing a currency union is presumably greater than the disadvantage of not having optimal interest rates.


----------



## james4beach

The US continues to fuel inflationary pressure with even more war spending, another $10 billion. Seemingly every few months, another $10 billion or more is added. What are they up to in total? Is it over $100 billion yet spent this year?

Lots of government-fuelled inflation there as the military-industrial complex is a huge "make work" project that fuels a lot of jobs and companies in America.

It's so inflationary that I even have friends in Canada catching some of this gushing money. They are trying to win a contract through the US DoD, will probably get it, and that will send about a million $ to these guys in Ottawa. So the US spends this stimulus money on "war" and it ends up absolutely everywhere.

In any case, it's inflationary and it's continuing. Just ask yourself... where does all that defense spending go? Boy do they hand it out like candy or what.

It pays people's salaries, pays for contractors, job benefits, etc.


----------



## AlwaysMissingTheBoat

james4beach said:


> The US continues to fuel inflationary pressure with even more war spending, another $10 billion. Seemingly every few months, another $10 billion or more is added. What are they up to in total? Is it over $100 billion yet spent this year?
> 
> Lots of government-fuelled inflation there as the military-industrial complex is a huge "make work" project that fuels a lot of jobs and companies in America.
> 
> It's so inflationary that I even have friends in Canada catching some of this gushing money. They are trying to win a contract through the US DoD, will probably get it, and that will send about a million $ to these guys in Ottawa. So the US spends this stimulus money on "war" and it ends up absolutely everywhere.
> 
> In any case, it's inflationary and it's continuing. Just ask yourself... where does all that defense spending go? Boy do they hand it out like candy or what.
> 
> It pays people's salaries, pays for contractors, job benefits, etc.


It's almost as if the Russians don't care about the economic effects of their unjustified invasion of a neighboring independent country.

I know it must be a tough call for the U.S. leadership: do we continue to hinder progress in taming inflation by extending defence spending to aid the Ukrainians under siege, or do we turn a blind eye to the slaughter of innocents, the rape of countless women, the widespread destruction of civilian infrastructure and the diabolical attempt to rob a proud nation of democracy?

I applaud the Americans for their choices in this instance. It's like we're all making inflationary sacrifices to help people retain their freedom, but the U.S. is doing the heavy lifting economically. And, ultimately, the blame remains squarely on the Russians for provoking this situation, and they could choose to withdraw at any time. Let's hope they come to their senses.


----------



## damian13ster

Weird to get hang up on 10bln in a week they passed another 1.7tn spending package.
China opening and US adding crazy spending bills is definitely inflationary though.
At least they didn't let in another 2.5mln people at once as that would be 3rd factor


----------



## m3s

AlwaysMissingTheBoat said:


> It's almost as if the Russians don't care about the economic effects of their unjustified invasion of a neighboring independent country.
> 
> I know it must be a tough call for the U.S. leadership: do we continue to hinder progress in taming inflation by extending defence spending to aid the Ukrainians under siege, or do we turn a blind eye to the slaughter of innocents, the rape of countless women, the destruction of civilian infrastructure and the diabolical attempt to rob a proud nation of democracy?
> 
> I applaud the Americans for their choices in this instance. It's like we're all making inflationary sacrifices to help people retain their freedom, but the U.S. is doing the heavy lifting economically. And, ultimately, the blame remains squarely on the Russians for provoking this situation, and they could choose to withdraw at any time. Let's hope they come to their senses.


If you listen to what Putin has been saying over the years this is clearly war on the global reserve currency and fiat money system

The mainstream media can talk about how the US failed in Iraq but it accomplished the strategic goal of protecting western economic interests and the petrodollar. US is once again forced to protect its position as the global reserve currency. Countries are already starting to buy gold and trade oil in other currencies after the economic sanctions.

Russia will not "come to their senses" any more than the Americans came to their senses in Iraq. Average Americans also cheered on the invasion of Iraq because of how it was portrayed to them in the media. I imagine the average Russian gets the same propaganda treatment, at least the boomer Russians who still watch mainstream media

Putin also asked to join NATO in the 90s. Probably not because they wanted to but to prove that NATO was not their friend. Very strategic


----------



## james4beach

damian13ster said:


> Weird to get hang up on 10bln in a week they passed another 1.7tn spending package.


Much of that $1.7 trillion is on DEFENSE spending.

I'm just pointing out that there is inflationary pressure for America's huge defense spending. They are constantly spending big money on defense, and much of that flows into companies and employees.

Just be aware of the inflation pressure. Really funny that you point to $1.7 trillion and don't understand how much of that is defense spending.


----------



## AltaRed

Much of US defense spending is wasted via pork to political districts and as a reward for political contributions, but without the USA remaining the generous contributor to allied/NATO defense, many countries would have already been overrun by Stalin II or the Chinese. We should be so fortunate to have a US defense umbrella over Canada to compliment our limp noodles.


----------



## sags

Increasing the US debt no longer matters, because they already owe $32 Trillion and are facing bankruptcy in 2 of their biggest programs.......Social Security and Medicare.

To pay off the debt......or even service it in the future, the US would have to cut many programs that benefit Americans.

That isn't going to happen because it isn't politically acceptable.

So what will they do ? They will default and advise their creditors they can accept 10 cents on the dollar or get nothing.

And that will be that. There will be financial chaos and damage for awhile......but the world will go on.


----------



## james4beach

AltaRed said:


> Much of US defense spending is wasted via pork to political districts and as a reward for political contributions, but without the USA remaining the generous contributor to allied/NATO defense, many countries would have already been overrun by Stalin II or the Chinese. We should be so fortunate to have a US defense umbrella over Canada to compliment our limp noodles.


I think it's great as well, but I'm here to remind people about the inflationary effects.

I do understand that many conservatives love high government spending and stimulus... as long as it falls under the defense budget.


----------



## m3s

sags said:


> Increasing the US debt no longer matters, because they already owe $32 Trillion and are facing bankruptcy in 2 of their biggest programs.......Social Security and Medicare.
> 
> To pay off the debt......or even service it in the future, the US would have to cut many programs that benefit Americans.
> 
> That isn't going to happen because it isn't politically acceptable.
> 
> So what will they do ? They will default and advise their creditors they can accept 10 cents on the dollar or get nothing.
> 
> And that will be that. There will be financial chaos and damage for awhile......but the world will go on.


Just boomers kicking the economic pain down to the next generation as usual

Any country that denominated its debts in USD is going bankrupt. Any country that denominated its debt in its own currency can just print more with the magic fiat money printer

US has the magic USD money printer. Works as long as other countries believe in it


----------



## sags

james4beach said:


> I think it's great as well, but I'm here to remind people about the inflationary effects.
> 
> I do understand that many conservatives love high government spending and stimulus... as long as it falls under the defense budget.


What did the US gain from all the blood and treasure spent in Afghanistan ?

As some US soldiers said recently, they talked to young girls going to school for the first time about living their dreams.

Twenty years later, the US left and the Taliban ripped the dream away from those girls who are young women now.

Yea.....the US fights wars for awhile, gets bored and moves on. 

Once the GOP take over the Congress, watch what happens to spending in Ukraine. They are already saying they can't afford it.

Zelensky knows what is coming and that is why he traveled to the US to speak to Congress. Fox News says he was making demands and support should be stopped.

Check out the latest Tucker Carlson videos on Ukraine spending.


----------



## james4beach

sags said:


> What did the US gain from all the blood and treasure spent in Afghanistan ?


Tons and tons of jobs, which is the main goal of American warfare IMO.

It's economic stimulus and a socialist make-work project. Same with Iraq.


----------



## AlwaysMissingTheBoat

sags said:


> Check out the latest Tucker Carlson videos on Ukraine spending.


Wow, Putin's propagandist-in-chief is critical of support for Ukraine. Colour me shocked! 

P.S. Never waste your time on Tucker. He's as disingenuous as they come.


----------



## m3s

AlwaysMissingTheBoat said:


> Wow, Putin's propagandist-in-chief is critical of support for Ukraine. Colour me shocked!
> 
> P.S. Never waste your time on Tucker. He's as disingenuous as they come.


sags is as brainwashed as the Russians watching their propaganda for boomers

They grew up on it so it is their reality. They have no first hand knowledge and seek no opposing view


----------



## like_to_retire

sags said:


> Yea.....the US fights wars for awhile, gets bored and moves on.


You don't feel that 20 years was enough? It's a lot to ask.

ltr


----------



## james4beach

like_to_retire said:


> You don't feel that 20 years was enough? It's a lot to ask.


Let's also remember that the US was defeated in Afghanistan. They lost the war after 20 years and trillions of $.

A bunch of cave dwelling hobos with crappy weapons were able to defeat the greatest army in world. How effective is American defense spending?


----------



## AltaRed

No one can win a war against protagonists that melt into the population and have much of the population in fear enough to play both sides when their lives depend on it. That is how it plays out everywhere shy of scorched earth policy. The USA made the mistake of not obliterating Taliban held areas into cinders and then leaving within a year.

I would submit American defense spending is highly effective in keeping authoritarians at bay. China would have already taken over Taiwan and maybe all of the South China Sea, and Putin would have already invaded many of his neighbours to re-build the Soviet Union.


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## AlwaysMissingTheBoat

Better than 8, 9 or 10%, but still way off target...


__ https://twitter.com/i/web/status/1609584026192420865


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## james4beach

That German inflation is horrendously high. I think the policy makers in 2023 are going to start trying to spin this as positive by saying things like "inflation is way down to only 5%" but let's not forget... these are ridiculously high rates of inflation.

If central banks cut rates when inflation is still up at 5% or 7%, the public is going to completely lose faith in the central bank and all hell breaks loose.


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## MrMatt

james4beach said:


> That German inflation is horrendously high. I think the policy makers in 2023 are going to start trying to spin this as positive by saying things like "inflation is way down to only 5%" but let's not forget... these are ridiculously high rates of inflation.
> 
> If central banks cut rates when inflation is still up at 5% or 7%, the public is going to completely lose faith in the central bank and all hell breaks loose.


I've lost faith in most of the government institutions years ago.

They, like most are simply not very good at their jobs


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## AltaRed

Why do you think the ECB might cut interest rates?


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## james4beach

AltaRed said:


> Why do you think the ECB might cut interest rates?


Well, they're stupid enough to have a 2.5% policy rate while euro zone inflation is 7% to 10%.
They're also stupid enough to not have started quantitative tightening yet even though QE was likely a major contributor to inflation.


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## AltaRed

I would suggest to you current behaviour is not indicative of a potential cut at all. If anything, it is recognition they are between a rock and a hard place with tremendously high energy costs which underlies much of their inflation as well as the loss of trade with Russia with whom they counted on for many raw materials and component manufacturing (for autos et al).

Energy intensive industries, and especially petro-chemical operations are pretty much out of action, not able to compete on the world stage. On a global scale, that would be stagflation through which the interest rate needle must be threaded carefully. Unemployment could swell leading to public unrest and a drop in support for Ukraine. I would give them the benefit of the doubt for the time being. Getting through the cold first quarter will be a tough one.


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## damian13ster

To be fair, natural gas prices are below what they were prior to the war.


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## AltaRed

Actually about the same in Germany per EU Natural Gas - 2023 Data - 2010-2022 Historical - 2024 Forecast - Price - Quote and that is a function of more LNG imports, warmer weather than normal and a cut in industrial use. The high prices earlier this year are still rippling through the economic system. 

Current prices could change on a day's notice in event of a deep freeze. The supply/demand balance is extremely tight,


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## Italicum

Sobering statements in this Globe’s piece The unfortunate market reality: Financial corrections take time, and there’s (very likely) more pain to come (article behind paywall)
this morning:
”This summer, two veteran economists released some stunning data about inflation in the United States. Going back to 1950, there have been four periods where a critical measure of inflation, the core personal consumption expenditures price index, needed to fall by three percentage points, like it does now. Crucially, across these four periods, the median time it took to do it was 59 months. As in, almost five years.”

Found the economists’ study very interesting.


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## james4beach

Italicum said:


> "...Going back to 1950, there have been four periods where a critical measure of inflation, the core personal consumption expenditures price index, needed to fall by three percentage points, like it does now. Crucially, across these four periods, the median time it took to do it was 59 months. As in, almost five years.”


And the Fed closely watches that exact Core PCE measure. Fed officials have remarked that there is no sign of it coming down to their targets yet; it has been stubborn and elevated. Consistent with the study you quoted, this is a big reason why I don't think rates are coming down anywhere close to 2% in the coming years. I think it's more likely we have rates around 5% for a few more years at least.

If inflation gets even worse (which is possible) we could even be looking at 6% rates or higher. Historically speaking those kinds of rates would be very normal, so it shouldn't be that shocking if it happens. See my other post here.


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## m3s

Bed Bath & Beyond warns of bankruptcy

Wasn't it a meme stock? Retail is getting crushed

Don't forget to cancel your Disney Plus, kids


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## Italicum

james4beach said:


> And the Fed closely watches that exact Core PCE measure. Fed officials have remarked that there is no sign of it coming down to their targets yet; it has been stubborn and elevated. Consistent with the study you quoted, this is a big reason why I don't think rates are coming down anywhere close to 2% in the coming years. I think it's more likely we have rates around 5% for a few more years at least.
> 
> If inflation gets even worse (which is possible) we could even be looking at 6% rates or higher. Historically speaking those kinds of rates would be very normal, so it shouldn't be that shocking if it happens. See my other post here.


I agree. on the other hand, as I mention in another post somewhere on this site (apologies, old age is setting in  ), I believe for all the current and apparent determination of OECD central bankers to get to the 2% inflation target, there might be other forces at play that could get them to accept a somewhat higher target in a year or two. i.e. The other side of the interests-inflation target equation may move as well. After all, a 2% inflation target has not been around forever, even if it is presented as cast in stone currently. Don’t get me wrong, i don’t advocate for it, as high inflation is horrific if sustained Over time. I am just thinking that, for one, geo-political circumstances are pivoting away from the trade-liberalization days that started in the 80s in the G7 countries (thrusted strongly by the various Regan, Thatcher, Kohl, Nakasone). We are all witnessing trade blocks and walls being built, as well as economic activities repatriated or developed within the safety of one‘s own borders to diminish dependence on unfriendly partners…even when it is not the most economically efficient thing to do. Unbridled free trade, which has its own very significant issues i suggest (but that‘s for another thread i would think), fosters a more efficient allocation of capital and labour across national borders, and therefore higher productivity and lower inflation. We are increasingly seeing the opposite due to war or desire for political/economic/military pre-eminence. I am thinking lower inflation from here but somewhat higher than 2%.


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## MrMatt

m3s said:


> Don't forget to cancel your Disney Plus, kids


I like Disney plus, just can't figure out how to cancel this CBC subscription.

They cost about the same, and only one of them is watchable.


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## sags

I include Fox News in my tv lineup.........just for laughs and giggles.


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## Italicum

james4beach said:


> And the Fed closely watches that exact Core PCE measure. Fed officials have remarked that there is no sign of it coming down to their targets yet; it has been stubborn and elevated. Consistent with the study you quoted, this is a big reason why I don't think rates are coming down anywhere close to 2% in the coming years. I think it's more likely we have rates around 5% for a few more years at least.
> 
> If inflation gets even worse (which is possible) we could even be looking at 6% rates or higher. Historically speaking those kinds of rates would be very normal, so it shouldn't be that shocking if it happens. See my other post here.


I would not be shocked at all…i do remember those 19.5 mortgage rates i paid in the early 80s


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## MrMatt

Italicum said:


> I would not be shocked at all…i do remember those 19.5 mortgage rates i paid in the early 80s


Last year I was planning to increase TFSA investing.
I'm actually thinking of doing more mortgage prepayments, the risk adjusted after tax benefit of mortgage prepayments is just HUGE right now.


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## m3s

Italicum said:


> I would not be shocked at all…i do remember those 19.5 mortgage rates i paid in the early 80s


Housing prices would get rekt

House of cards


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## andrewf

m3s said:


> Housing prices would get rekt
> 
> House of cards


All asset prices would be crushed, but most companies would go bankrupt, or would have to massively dilute existing shareholders to repay debt.


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## m3s

andrewf said:


> All asset prices would be crushed, but most companies would go bankrupt, or would have to massively dilute existing shareholders to repay debt.


They say they don't care about wealthy businesses and want to knock some unicorns down

Wrecking all the voter speculative wealth in RE is different though. Can't have that

So where is the breaking point?


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## sags

According to those statistics, rents went up across Canada during the same time period and it is due to higher interest rates and immigrants.

Apparently, a lot of landlords had their mortgages renew at the same time at higher interest rates and few of them renewed at the historic low interest rates.

Oddly, this unique scenario of massive renewals by landlords happened during a period of steep decline in mortgage originations.

It all sounds kind of funky to me. I think it much more likely that landlords saw rental rates rising and jumped on the bandwagon too.

I bet the rising rental rates have little to do with rising costs for landlords and more to do with making more profit.

Fair enough.....in a free market, but don't try to BS people that it isn't just a consequence of the "greed is good" capitalist philosophy.


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## KaeJS

I jumped on the bandwagon.

Used to charge my tenant $1890/month.
She now pays $2395.

Business is business.


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## m3s

sags said:


> According to those statistics, rents went up across Canada during the same time period and it is due to higher interest rates and immigrants.
> 
> Apparently, a lot of landlords had their mortgages renew at the same time at higher interest rates and few of them renewed at the historic low interest rates.
> 
> Oddly, this unique scenario of massive renewals by landlords happened during a period of steep decline in mortgage originations.
> 
> It all sounds kind of funky to me. I think it much more likely that landlords saw rental rates rising and jumped on the bandwagon too.
> 
> I bet the rising rental rates have little to do with rising costs for landlords and more to do with making more profit.
> 
> Fair enough.....in a free market, but don't try to BS people that it isn't just a consequence of the "greed is good" capitalist philosophy.


So what you're saying is you don't know how a market works

Landlords can't charge more than someone will pay. That's how a market works. When I search for a rental the market was priced very efficiently. Good deals went within days. Bad deals sat on the market. Very simple

Having your rent capped at $1k when the market rate is above $2k on average is not normal. Your landlord wouldn't give that rate to someone else


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## andrewf

KaeJS said:


> I jumped on the bandwagon.
> 
> Used to charge my tenant $1890/month.
> She now pays $2395.
> 
> Business is business.


You didn't raise rents because your mortgage rent went up. Why didn't you do it earlier--leaving profit on the table? You didn't because tenants would not pay it. Landlords are price takers.


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## james4beach

I found something pretty surprising when I calculated my year-end spending figures. I'm spending much more on travel these days, but if I exclude travel, all the other spending has been stable since I moved into my current apartment. Amazingly, monthly spending on food, services, utilities, transportation is all very stable. I'm not seeing any inflation there!

Some caveats here though:

rent is only stable until I move, at which point it will skyrocket (*this inflation is suppressed in the graph*)
travel is excluded, but the travel costs like flights/hotels are up versus previous years -- that's not visible here
food costs are stable, but I've stepped up my sale-hunting efforts and STOPPED eating at restaurants
I'm still very surprised that all my "core" costs are so steady, once travel is excluded.


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## Italicum

james4beach said:


> I found something pretty surprising when I calculated my year-end spending figures. I'm spending much more on travel these days, but if I exclude travel, all the other spending has been stable since I moved into my current apartment. Amazingly, monthly spending on food, services, utilities, transportation is all very stable. I'm not seeing any inflation there!
> 
> Some caveats here though:
> 
> rent is only stable until I move, at which point it will skyrocket (*this inflation is suppressed in the graph*)
> travel is excluded, but the travel costs like flights/hotels are up versus previous years -- that's not visible here
> food costs are stable, but I've stepped up my sale-hunting efforts and STOPPED eating at restaurants
> I'm still very surprised that all my "core" costs are so steady, once travel is excluded.
> View attachment 24099


Good on you and congrats on the monthly spend ex-travel. You put me to shame, though my excuse is that I am at a later stage in life than you and fed up with savings (done enough). You got me curious, so I took a closer look at my files. Total spend for 2022 is ~5% higher than 2021. However, similarly to you, if i remove travel and (especially) costs to support my son in university away from home, then I actually observe a ~4% decrease. Food, drinks and housing costs (ex-extraordinary costs like new patio, painter, etc) together are pretty much identical.


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## Covariance

One explanation is you adjust your habits. Substitute things when something gets too expensive, or stop buying altogether. CPI doesn’t measure either of these at all. PCE however does.


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## Italicum

They are getting ready to party: "we continue to judge that the Bank is underestimating how quickly overall inflation will decline. We expect headline inflation to average close to 1.5 per cent in the final quarter of 2023, compared to the Bank’s forecast of 2.8 per cent. Lower inflation should encourage the Bank to cut its policy rate to 2.5 per cent in early 2024”. Housing inflation set for a sharp fall, say economists | Financial Post

Granted, there is always a cacophony of strong opinions about future events no matter the topic or the circumstances but it is fun to watch.....and who knows, events may prove them right...but I would not bet on it.


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## MrMatt

Italicum said:


> They are getting ready to party: "we continue to judge that the Bank is underestimating how quickly overall inflation will decline. We expect headline inflation to average close to 1.5 per cent in the final quarter of 2023, compared to the Bank’s forecast of 2.8 per cent. Lower inflation should encourage the Bank to cut its policy rate to 2.5 per cent in early 2024”. Housing inflation set for a sharp fall, say economists | Financial Post
> 
> Granted, there is always a cacophony of opinions about future events no matter the topic or the circumstances but it is fun to watch.....and who knows, events may prove them right...but I would not bet on it.


If the rate falls that fast, I should pickup these dividend payers now at a discount, instead of paying off my mortgage.


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## Italicum

MrMatt said:


> If the rate falls that fast, I should pickup these dividend payers now at a discount, instead of paying off my mortgage.


That is one mighty 'if'. Maybe some of both? Best of luck.


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## james4beach

Italicum said:


> Good on you and congrats on the monthly spend ex-travel. You put me to shame, though my excuse is that I am at a later stage in life than you and fed up with savings (done enough). You got me curious, so I took a closer look at my files. Total spend for 2022 is ~5% higher than 2021. However, similarly to you, if i remove travel and (especially) costs to support my son in university away from home, then I actually observe a ~4% decrease. Food, drinks and housing costs (ex-extraordinary costs like new patio, painter, etc) together are pretty much identical.


Fascinating, so you're seeing something similar if you remove travel.

We're probably adjusting our habits. I'm quite frugal and have been working harder at finding sales.


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## sags

The government will be increasing CPP and OAS this month by 6.3%, which is higher than your stated personal rate of inflation spending.

The increases are above our inflation costs of around 3% per year. Our disposable income increases as a result.


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## Italicum

james4beach said:


> Fascinating, so you're seeing something similar if you remove travel.
> 
> We're probably adjusting our habits. I'm quite frugal and have been working harder at finding sales.


I am adjusting in my own way I guess. I have a 12 month moving forward budget that I try to stay within (a gentle budget, no tragedy if I have to increase it but never, ever exceeding income), though I can not consider myself frugal. I have been lucky in that, throughout my career, I have had a good self-employment income that has allowed for what I consider to be a balanced approach between savings (which have decreased as I approach retirement) & investing on one side and spending on the other. It has been a disciplined marathon that is paying....dividends and rents


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## james4beach

I wonder if I'm about to "eat my words" regarding food inflation.

My local grocery store appears to have marked up a whole bunch of prices over the weekend. I saw significant % increases across a wide range of things I typically buy.

Personally I don't think the inflation problem is anywhere close to resolved. They may say inflation has "peaked" but prices are still increasing at an unacceptable pace.


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## Synergy

james4beach said:


> I wonder if I'm about to "eat my words" regarding food inflation.
> 
> My local grocery store appears to have marked up a whole bunch of prices over the weekend. I saw significant % increases across a wide range of things I typically buy.
> 
> Personally I don't think the inflation problem is anywhere close to resolved. They may say inflation has "peaked" but prices are still increasing at an unacceptable pace.


I'm still seeing regular increases at the grocery store. It takes time for inflation to trickle through the system. I expect some further increases for some products. If you are willing to make changes it's possible to stay within your budget...


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