Interest Rates - 2021 - | General financial discussion | Discussion forum

2023? Try 2030.

Give or take a few years.

Cheers,
Doug

We have no way of knowing where interest rates will be in the coming months. The most important thing is today. I have a friend that has large short term GIC. It may be a ridiculous low rate. He is doing fine.

My response to many special rates. "I have no money". Another way of saying this. "I am not interested". I have NEVER bought a GIC from the big banks in my lifetime. I started buying GIC's from trust companies in the 1970's. Their rates were better than the big banks.

I don't ignore GIC offerings from big banks; though there have been none I cared for in the last five years, I fondly remember a 5-year at 3% from Scotia that beat everyone else at the time.
RetirEd

I have previously mentioned that there are structural problems why the whole world (or at least developed countries) have low inflation. However, I also believe inflation will spike up (my opinion have pivoted). This is because:
1. the massive liquidity injected into the economic system by the central bank, implying it that the economy only need to partially recover to have massive inflation impact (velocity of money * money supply = price level * real GDP).
2. the massive reduction in capital expenditure in the oil and gas industry cause output to fall significantly, in addition, President Biden's policy on fracking will further constrain the output of oil and gas. This means the oil price will increase significantly when the demand return partially to the pre-COVID level.
3. as something that is previously mention by Bill, we live in a world where producing locally become fashionable (started off as a hipster thing, but it has become mainstream mostly due to national security reason). This is a violation of David Ricardo's Law of Comparative Advantage. This means the growth of economic output globally will slow down as countries fail to specialize in things that they are good at producing.
4. the rise of China and the comparative fall of the US have ushered in a dangerous era (as suggested by scholar of international relation), this will further exacerbate the previous problem (point 3), but it will also pose physical danger to the global supply chain. This is especially true because modern day Sarajevo is the Republic of China (Taiwan), which make more than 50% of the world's computers chip. As the US seeks to block China's intrusion into the ICT world, which is the bread and butter of the US economy, an adventurous Chinese leadership will seek to attack (unify) the island in order to capture Taiwan's computer chip manufacturing capacity. THIS IS WORLD WAR THREE.
5. lastly, even if WW3 is not materialized, the lack of trust between countries will make international cooperation in handling climate change and environmental degradation become impossible (we already have a taste of this, thanks to COVID). Continue degradation of environment may cause food shortage in the future, which will cause spike in inflation in the developed countries (while it leads to humanitarian catastrophe in the global south).

P.S: I really believe the future is bleak and ugly, but as a Christian, I simply think this is the second coming.....

Jon, I agree with much of what you say, but don't worry about the 2nd coming, i.e. it's usual for folks whose civilization is over to think the entire world is ending but there are always other rising civilizations (e.g. Asia, as you indicate) where days are getting sunnier. And China has no need of a WWIII, in fact its rise is based precisely on strategies that deliberately exclude catastrophic military conflict.

Vatox said
As long as human nature drives people to acquire more and better things, the modern societies will degrade. Accepting a lower standard of living and being happy with less is the only way modern society can survive. The only thing that would offset that outcome, is a clean, limitless, and close to free source of energy. One other thing could change that outcome, remove 7 billion people from the planet.  

Said Mr Gates from his 666 thousand square foot home by the lake.

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