Bank of Canada Raising Interest Rates 25 basis points to 0.5% Means Nothing, especially when The federal carbon tax rises to 11 cents per litre of gasoline on April 1, 2022 – (March 2, 2022)
There are warnings from the media about interest rates rising 25 basis points? Well, what’s ignored in all of this is what the Bank of Canada didn’t do when times were good in Canada. When times were good, and the real estate markets were making record highs and when Justin Trudeau went on an unnecessary spending spree, the Bank of Canada(BoC) opted not to raise interest rates.
If you ask me, I still think Canadians should get ready for NEGATIVE INTEREST RATES, because these tiny rate hikes aren’t going to do much of anything. Because of Joe Biden and Justin Trudeau’s energy policies, Vladimir Putin is flush with enough cash to have a sustained war with Ukraine. Ukrainians fighting back has led to more news stories about Russia threatening to use more of its most deadly weapons.
Wars typically lead to all sorts of unimaginable CENTRAL banking policies and one of the policies I imagine is negative interest rates. Inflation in Canada is running rampant and it would be even worse if certain industries in Canada were receiving government subsidies. Instead of raising prices, a lot of businesses will opt to go bankrupt or sideline their business until conditions improve and this to me has recession written all over it, imagine a recession when interest rates are struggling to get above 1%?
This news about Canada raising interest rates to 0.5% is nothing? I don’t even think it makes much of a difference for your monthly payments if you have a 1.5 million dollar mortgage. Justin Trudeau’s government debt is obviously going to expand, but a large chunk of Canadians don’t seem to care about the Federal debt, so from my point of view, the good times are coming to an end and it’s going to be apparent to a large chunk of people in the very near future that unless the Bank of Canada is willing to challenge inflation we’re headed for recession and quite possibly depression.
Currently, there is no substitute for Oil or fossil fuels in general, so until that innovation is realized, a global depression is imminent and I think Canada will be one of the first countries to experience waves of bankruptcies. Imagine a wave of bankruptcies happening while interest rates are artificially low. The whole purpose of Quantitative easing and Zero Percent Interest Rate policy was to stop bankruptcies, stop the too big to fail from failing.
Bank of Canada Policy Interest Rate Recent Data | bankofcanada.ca
Interesting times ahead