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Re: Interest rates USA, must be on up trend
Just observing things happening in Canada, the real estate market is very strong. We have a whole new bubble, but even bigger now than before.
Again, Mark Carney is Bernanke's man at the Bank of Canada, so we have negative real interest rates on Fed funds in Canada, just like in America. And mortgages are cheap like borsht. So money is flowing toward real estate and blowing-up the real estate bubble.
It may be my imagination, but I am noticing plenty of inflation in the cost of living on Vancouver Island: electricity up from 7c to 14c per kwh in one bump upward by BC Hydro; my water bill up from $20 per month to $80 per month in one bump since the Capitol Regional District took control of my water this year; my wood to heat the house up from $150 per cord to $200 per cord in one year; my house taxes way up; my groceries way up in a growing list of items this year, etc. My daughters' apartment rents were up from $600 per month to $800 per month in Victoria, just this year..... This doesn't feel like any 3% inflation rate.:rolleyes:
No wonder people are putting money into real estate. There is no other place to go with money. And if everything goes to shit, at least you can live in your house or draw rental income out of it..... People aren't stupid. The Bank of Canada created this bubble, and people are acting rationally and according to the Bank's expansionary monetary policy.
Sure the bubbles break, and the bad years come. But each break in the bubble brings a higher bottom, and each new peak inflation in the bubble ( whatever bubble you may pick: homes, land, oil, gold, stoxx, energy, bonds, farm commodities, whatever ) is bigger and piggier than the previous peak..... As I said, people aren't stupid: people have caught on to what is going on thanks to the long-term trend of inflationary monetary policy.
Just observing things happening in Canada, the real estate market is very strong. We have a whole new bubble, but even bigger now than before.
Again, Mark Carney is Bernanke's man at the Bank of Canada, so we have negative real interest rates on Fed funds in Canada, just like in America. And mortgages are cheap like borsht. So money is flowing toward real estate and blowing-up the real estate bubble.
It may be my imagination, but I am noticing plenty of inflation in the cost of living on Vancouver Island: electricity up from 7c to 14c per kwh in one bump upward by BC Hydro; my water bill up from $20 per month to $80 per month in one bump since the Capitol Regional District took control of my water this year; my wood to heat the house up from $150 per cord to $200 per cord in one year; my house taxes way up; my groceries way up in a growing list of items this year, etc. My daughters' apartment rents were up from $600 per month to $800 per month in Victoria, just this year..... This doesn't feel like any 3% inflation rate.:rolleyes:
No wonder people are putting money into real estate. There is no other place to go with money. And if everything goes to shit, at least you can live in your house or draw rental income out of it..... People aren't stupid. The Bank of Canada created this bubble, and people are acting rationally and according to the Bank's expansionary monetary policy.
Sure the bubbles break, and the bad years come. But each break in the bubble brings a higher bottom, and each new peak inflation in the bubble ( whatever bubble you may pick: homes, land, oil, gold, stoxx, energy, bonds, farm commodities, whatever ) is bigger and piggier than the previous peak..... As I said, people aren't stupid: people have caught on to what is going on thanks to the long-term trend of inflationary monetary policy.
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