Comments on: This and That: Bank of Canada rate decision, Bank earnings and more… http://www.canadiancapitalist.com/this-and-that-bank-of-canada-rate-decision-bank-earnings-and-more/ Helping you invest and prosper Fri, 19 Mar 2010 02:53:21 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Mad About Madoff http://www.canadiancapitalist.com/this-and-that-bank-of-canada-rate-decision-bank-earnings-and-more/#comment-193126 Mad About Madoff Tue, 09 Jun 2009 09:08:38 +0000 http://www.canadiancapitalist.com/?p=2502#comment-193126 [...] Canadian Capitalist recently highlighted two terrific Vanity Fair articles about Bernie Madoff.  For those who weren’t watching CNN or reading papers in December 2008, Mr. Madoff operated [...] [...] Canadian Capitalist recently highlighted two terrific Vanity Fair articles about Bernie Madoff.  For those who weren’t watching CNN or reading papers in December 2008, Mr. Madoff operated [...]

]]> By: Al R http://www.canadiancapitalist.com/this-and-that-bank-of-canada-rate-decision-bank-earnings-and-more/#comment-193098 Al R Mon, 08 Jun 2009 12:22:36 +0000 http://www.canadiancapitalist.com/?p=2502#comment-193098 Errr... that should read "as our neighbour to the south is doing". Should also note that a higher CAD/USD exchange rate is generally good news for consumers and anyone else that buys imports. Errr… that should read “as our neighbour to the south is doing”.

Should also note that a higher CAD/USD exchange rate is generally good news for consumers and anyone else that buys imports.

]]> By: Al R http://www.canadiancapitalist.com/this-and-that-bank-of-canada-rate-decision-bank-earnings-and-more/#comment-193097 Al R Mon, 08 Jun 2009 12:20:32 +0000 http://www.canadiancapitalist.com/?p=2502#comment-193097 If you actually take the time to read the Bank of Canada's interest rate announcement, they are concerned about *downside* risks to inflation, and the rapid appreciation of the CAD against the USD. The Bank of Canada is increasingly unlikely to engage in quantitative easing as is our neighbour to the south. These are DEflationary pressures. You'd have to be obscenely bullish on the Canadian economy to believe that inflation is going to take off in the next 12 months. If you actually take the time to read the Bank of Canada’s interest rate announcement, they are concerned about *downside* risks to inflation, and the rapid appreciation of the CAD against the USD. The Bank of Canada is increasingly unlikely to engage in quantitative easing as is our neighbour to the south.

These are DEflationary pressures. You’d have to be obscenely bullish on the Canadian economy to believe that inflation is going to take off in the next 12 months.

]]> By: Yuva http://www.canadiancapitalist.com/this-and-that-bank-of-canada-rate-decision-bank-earnings-and-more/#comment-193090 Yuva Mon, 08 Jun 2009 07:34:46 +0000 http://www.canadiancapitalist.com/?p=2502#comment-193090 I am not sure if the Canadian government could hold that rates till 2010. With fluctuating interest rates, i dont think it as realistic but anyway they have sent a positive signal for all stake holders. I am not sure if the Canadian government could hold that rates till 2010. With fluctuating interest rates, i dont think it as realistic but anyway they have sent a positive signal for all stake holders.

]]> By: BFM http://www.canadiancapitalist.com/this-and-that-bank-of-canada-rate-decision-bank-earnings-and-more/#comment-193043 BFM Sun, 07 Jun 2009 04:25:15 +0000 http://www.canadiancapitalist.com/?p=2502#comment-193043 Even though the interest rate is kept at 0.25%. In order to control inflation which we may likely face, the Bank of Canada is likely going to increase the rate in the coming quarters. Even though the interest rate is kept at 0.25%. In order to control inflation which we may likely face, the Bank of Canada is likely going to increase the rate in the coming quarters.

]]> By: Geron http://www.canadiancapitalist.com/this-and-that-bank-of-canada-rate-decision-bank-earnings-and-more/#comment-193033 Geron Sat, 06 Jun 2009 22:22:16 +0000 http://www.canadiancapitalist.com/?p=2502#comment-193033 It's important to keep in mind that the ageing baby-boomer issue is only really a problem if the number of young workers doesn't increase. If Canada were isolated, that would be true, however, the demographics of the world are very different from the demographics of Canada. If Canada needs more younger workers, young people living outside of Canada will be attracted to immigrate. In the past few decades we have seen freedom of movement of capital increase dramatically. I think the next few decades will see a dramatic increase in the freedom of movement of labour. We are already seeing it in the European Union with great economic benefit. Ease immigration and you get closer to solving the baby-boomer standard of living issue. It’s important to keep in mind that the ageing baby-boomer issue is only really a problem if the number of young workers doesn’t increase. If Canada were isolated, that would be true, however, the demographics of the world are very different from the demographics of Canada. If Canada needs more younger workers, young people living outside of Canada will be attracted to immigrate.

In the past few decades we have seen freedom of movement of capital increase dramatically. I think the next few decades will see a dramatic increase in the freedom of movement of labour. We are already seeing it in the European Union with great economic benefit.

Ease immigration and you get closer to solving the baby-boomer standard of living issue.

]]> By: MillionDollarJourney http://www.canadiancapitalist.com/this-and-that-bank-of-canada-rate-decision-bank-earnings-and-more/#comment-193023 MillionDollarJourney Sat, 06 Jun 2009 14:06:01 +0000 http://www.canadiancapitalist.com/?p=2502#comment-193023 Thanks for the mention CC! Thanks for the mention CC!

]]> By: Doug http://www.canadiancapitalist.com/this-and-that-bank-of-canada-rate-decision-bank-earnings-and-more/#comment-193015 Doug Sat, 06 Jun 2009 09:39:29 +0000 http://www.canadiancapitalist.com/?p=2502#comment-193015 Rob Carrick does a good job. However, I'm not certain about the article on the Retirement Rule of 20: it says you can have a 5% withdrawal rate. The number one usually hears is a 4% withdrawal rate. Even that can be a simplication; it depends on an individual's circumstances. I agree with Michael James point. It's about supply and demand when it comes to the cost of capital and labor. One way around this is for retirees to emigrate to countries where the cost of labor is lower. You see this already, where American retirees have basically emigrated to Latin American countries. Rob Carrick does a good job. However, I’m not certain about the article on the Retirement Rule of 20: it says you can have a 5% withdrawal rate. The number one usually hears is a 4% withdrawal rate. Even that can be a simplication; it depends on an individual’s circumstances. I agree with Michael James point. It’s about supply and demand when it comes to the cost of capital and labor. One way around this is for retirees to emigrate to countries where the cost of labor is lower. You see this already, where American retirees have basically emigrated to Latin American countries.

]]> By: Four Pillars http://www.canadiancapitalist.com/this-and-that-bank-of-canada-rate-decision-bank-earnings-and-more/#comment-192998 Four Pillars Fri, 05 Jun 2009 19:05:18 +0000 http://www.canadiancapitalist.com/?p=2502#comment-192998 Just read the Vanity Fair article about Madoff's victims - long, but quite interesting. It's hard to feel sorry for rich people who lose money but in some cases they literally lost everything. Just read the Vanity Fair article about Madoff’s victims – long, but quite interesting. It’s hard to feel sorry for rich people who lose money but in some cases they literally lost everything.

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/this-and-that-bank-of-canada-rate-decision-bank-earnings-and-more/#comment-192989 Canadian Capitalist Fri, 05 Jun 2009 14:25:57 +0000 http://www.canadiancapitalist.com/?p=2502#comment-192989 Actually, I think the fiscal and monetary arms talk to one another but there is a firewall between them. The firewall is there for a good reason: we don't want the Government of the day influencing monetary policy for narrow political ends. So, in one sense you are right -- the Government and the monetary authorities are trying to steer the same vehicle with different controls. They do sometimes co-ordinate with each other but I'd become uncomfortable if they become too closely aligned. There would then be too much power concentrated in one place. Instead of a car, I'd liken the economy to a huge oil tanker. Pushing the pedal or applying brakes does not immediately affect the tanker. It takes a while -- typically 6 months to as much as a year for the effects to be felt. Meanwhile, conditions might have drastically changed. Monetary authorities have a difficult job. I can't imagine how difficult Ben Bernanke's job is, how many ever helicopters he may have! Actually, I think the fiscal and monetary arms talk to one another but there is a firewall between them. The firewall is there for a good reason: we don’t want the Government of the day influencing monetary policy for narrow political ends. So, in one sense you are right — the Government and the monetary authorities are trying to steer the same vehicle with different controls. They do sometimes co-ordinate with each other but I’d become uncomfortable if they become too closely aligned. There would then be too much power concentrated in one place.

Instead of a car, I’d liken the economy to a huge oil tanker. Pushing the pedal or applying brakes does not immediately affect the tanker. It takes a while — typically 6 months to as much as a year for the effects to be felt. Meanwhile, conditions might have drastically changed. Monetary authorities have a difficult job. I can’t imagine how difficult Ben Bernanke’s job is, how many ever helicopters he may have!

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