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moneysense.ca, 22/01/09
This and That: Bank of Canada Rate Cut, Warren Buffet Interview and more…
- The Bank of Canada cut interest rates by 0.5% this week. The commercial banks quickly followed suit and cut the prime rate by 0.5% to 3%. The press release accompanying the decision notes that the Canadian economy is now in recession but our central bank expects a rebound in 2010.
- When Warren Buffett speaks, we pay attention. In an interview with PBS’s Nightly Business Report, Buffett holds forth on Barack Obama, the economy, the Madoff scandal, the stock market and investing. The transcript of the interview is available here.
- With news on the jobs front getting drearier by the day, The New York Times offers tips on how to prepare for a financial disaster.
- So much for ’smart money’. Jason Zweig reports on how liquidity has dried up for university endowments, which gorged on alternative assets such as hedge funds and private equity.
- If you are a car guy or gal, you might be interested in Preet’s tip on buying a civic and renting a Ferrari, instead of buying a BMW.
- Michael James takes a look at an index-linked GIC and wonders if he can do better building one himself.
- Clever Dude on why renter’s insurance makes sense.
- Blunt Money on why tracking your spending will be very helpful.
- Money Ning offers fifty tips to budget travel and save money on vacations.
- That’s crazy talk! Million Dollar Journey has six reasons why recessions are a good thing.
Don’t forget to enter your name in the two giveaways: two Chapters gift cards and The New Rules of Retirement book.
moneysense.ca, 22/01/09
The reasoning behind the BoC’s forecast of an economic rebound in 2010 is low interest rates and a low Canadian dollar. Well guess what? The reality is that unless the loonie drops so low that our wages are comparable to Mexico or China, a lot of the manufacturing jobs that we lost in Ontario are gone FOREVER. They’re not going to reopen these factories just because our interest rates are low for as long as they can just do at 1/10 the cost in Mexico.
Thanks for the link – see you in Ottawa in my Honda.
Thanks for the mention CC! It’s not the first time someone has called me crazy.
Thanks for the mention! I’m listening to the Buffett interview as we speak.
You can SEE the Buffet Interview via this page (http://www.pbs.org/nbr/site/features/special/30-years_home/)
Scroll down…
Phil: I’m not sure how the Bank comes up with these forecasts. I suppose their reasoning is the massive stimulus late last year should start to kick in sometime in the middle of 2009. But with manufacturing jobs gone forever like you mention and commodities crashing and burning, you may well be right.
FT: I didn’t call you crazy! I said it’s crazy talk!
dave2duk: Thanks. I’ve included a link to the video already.
So I’m sitting here fretting about my portfolio in these turbulent times and have a more than usual furrowed brow because of the unsubstantiated statements everywhere I turn such as “the US economy will turn around”, “maybe a bit longer than ususal” etc. etc.
)
Read my Peter Schiff over the holidays and now I surf to the gold hawks sites and the sky is falling, “they’re printing money”, “inflation on the way”, “hyper inflation risks”, “worse underpinnings than before”. I cast these off as the usual gold and US dollar hyperbole, but make a mental note to think about looking at my bullion allocation…
And then….
And then I read between the lines of Obama’s speech.(Hmmm he didn’t actually say inflation and dealing with it later, but why is it rattling around in my head…)
And then I read Buffett linked through thsi site and he’s chiming in with the same type of inflation talk previously reserved for the alarmists. Well now I’m alarmed!
If you’re a long term investor, shouldn’t you read Buffett’s interview as sage advice to get ready for a bumpy inflationary bubble? And the problem with the inflation bubble is trying to fix it without printing more money – causing the mother of all hyperinflation bubbles… (Bubble Of All Bubbles – BOAB (you heard it here first
And he’s talking about mid term inflation, not far off, long term.
I have been warned, will I heed the advise?
Solid Infation proof Equities?, Bullion buried in my yard?, 4 barrels of oil and some potash?, anything monetized in Euro’s?, China Central Bank Savings account?….. anything it seems but what I’m currently flush with!