Flat delinquency rate in Canada, Bank of Canada Still Terrified Of The Impact of Raising Interest Rates! – March 6, 2018,
Well, the Bank of Canada is not raising interest rates and quite frankly I don’t blame them, it’s crazy out here in Canada, one thing I have to give my fellow Canadians credit for is paying their bills on time, namely their inflated mortgage bills, that aside there’s clearly a problem brewing, this is right around my wheelhouse and it’s the loans that aren’t mortgages, you know those auto loans, those credit card loans all those other loans that have nothing to do with the rates the Bank of Canada sets because they’re already costing borrowers up to 30%+ to use them.
These auto and unsecured loans at the very least are something to at least think about, clearly Equifax is worried about this number and if you’re Canadian and care about the value of your currency, you may want to consider reading the Equifax article below which goes into detail about the obvious economic wall that Canada is about to be faced with. On this economic wall it’s going Canadians are going to have to make a choice inflation or deflation, now obviously if you know anything about Canadian history the BoC, as well as Federal and provincial governments, are going to choose the inflation option, the problem is this time around Canadian manufacturing jobs which used to be in abundance have closed in large part, Canada is now more reliant on imports than at any time in history, making matters worse are Justin Trudeau’s Liberal policies, which aren’t too friendly to businesses.
So, yeah, hate to tell you Canada, but umm we have an economic disaster coming, the great news is if you’re not in debt, you’ll only notice a change in your standard of living if your governments assume that inflation will solve the problem, sorry, but higher interest rates and deflation are the cures to the coming crash, sure the government can inflate the country, inflate the currency etc. however the Canadian dollar will take an even harder hit than it’s already taken. right now around 0.74 USD will buy you $1 CAD, if Canadians start defaulting on their loans, it will be around $0.60 – $0.65USD that will buy you a Canadian loonie, in the past of course not that big a deal, it would be good for Canada selling stuff into the U.S, well like I said, Canada is losing it’s manufacturing while at the same time Donald Trump is pushing for Trade reform, I want to remind the reader that Donald Trump is one of the first U.S Presidents in American history to call Canada out on currency manipulation, so, inside the terms of the USMCA deal, the U.S is now allowed to retaliatory tariffs against Canada in the event the U.S is being unfairly treated in trade.
So umm yeah, a lot of Canadian manufacturers are rethinking their presence in Canada as a lot of the advantages they used to have been here may disappear if USMCA gets passed, just something I hope Canadians understand if they think this lower loonie is a good idea.
Interesting times ahead.
