Bank of Canada kept its key interest rate on hold at 1.75 percent, Loonie takes a slight dip on the News – May 29, 2019,
So, the Loonie is something, Canadians should pay close attention to when it comes to Justin Trudeau’s deficit spending Liberals. Unlike Stephen Haper whose growth was based on cutting down the deficit, the Liberals “growth” was entirely based on growing the deficit. Hyper-inflation is hard for most Canadians to comprehend because most have never experienced it, nor can they imagine it ever happening to Canada. But, one of the reasons many Asian countries like Japan and China are able to get away with their money printing is because of their strong manufacturing sectors. In Canada, our manufacturing sectors are shrinking, which again is why if you’re a Left-leaning Canadian you’ll want to turn a blind eye to the money laundering, that’s currently propping up the Loonie.
The markets like Canada because of our prospect for the future, but a declining Loonie on the news that our central bank is holding rates steady, this is something you’ll want to monitor, less manufacturing equates to an increased demand of imports. In Japan and even China, auto-loans aren’t as big a business as they are in Canada, primarily because they manufacture goods in that country, so obviously it’s more competitive, and not as costly. Canada on the other hand, we’re losing manufacturing while running a deficit, which doesn’t bode well in the event of an economic downturn.
It’s not to say we can’t rebound, but it will be challenging, already in Alberta, there are lots of empty commercial and residential real estate, the same is true in Toronto, but there are more people in Toronto, so it’s easier to conceal. The Loonie, the Canadian dollar remains an essential piece to the Canadian standard of living and a slow decline, with little activity from the Bank of Canada doesn’t bode well for Canadians if the world goes into recession. Recessions equate to tighter lending conditions and central banks having to entice investment. One of the reasons the price of Art goes up revolves around the devaluing of currency.
Money can only do so much, economics, in the end, revolves around trade and bartering, what can you offer for me that I can do for myself or don’t want to do for myself. As the world gets more developed and competitive, Canada has to consider being more economically flexible and that’s hard to do with the Canadian Government is claiming economic prosperity while intentionally running and expending the deficit. Yes, the Bank of Canada can lower the lending rate, but if holding interest rates steady equates to a lower loonie, imagine what lowering interest rates could entail.
Toronto and U.S. stock markets down at late-morning, loonie falls – The Canadian Press
Bank of Canada holds rate, says numbers reinforcing view slowdown was temporary – The Canadian Press
Interesting times ahead