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Email this11:07 am
September 7, 2018
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This conversation was split off from this other thread
Not sure why several of you seem surprised that interest rates are now decreasing a bit. Haven't you heard that the economy is slowing down - actually I am surprised the Canadian economy is even doing as well as it is with all that is doing - high personal debt, GM plants likely to close, Alberta oil and gas industry in crisis, the Pipeline stalled, Trudeau's failed relationships with China, India, US, Saudi Arabia which affects trade, tariffs and more tariffs etc. I do not have a lot of confidence in 2019 Canadian economy - I believe it will stumble along while the federal debt and deficit will keep increasing - which is going to mean more taxes at one point. Anyways, my opinion.
3:41 pm
February 24, 2015
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No one has mentioned "surprised" about rates going down. My experience is that the GIC market is only loosely tied to interest rates and the economy. I have a GIC from Tangerine maturing this weekend, which I planned to merge with some HISA. If the HISA had been with Oaken, I could have locked in the current rate because Oaken gives advance warning of rate changes. So instead, I will likely move the maturing funds out of Tangerine.
4:27 pm
October 21, 2013
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Vatox said
Bad times are coming!
It may be true (or not), but it's not very helpful to just say this. What do you recommend people do in anticipation of it? - assuming they are not in debt.
6:22 pm
February 20, 2018
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Vatox u hopin ur 5yr gic bet will payoff or somethin
Rates are goin up they have to or we'll have more homeless
10:00 am
October 29, 2017
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hotmony said
Vatox u hopin ur 5yr gic bet will payoff or somethinRates are goin up they have to or we'll have more homeless
Not sure I understand your comment. If rates don’t go up, how does that result in more homeless?
10:27 am
October 29, 2017
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Loonie said
It may be true (or not), but it's not very helpful to just say this. What do you recommend people do in anticipation of it? - assuming they are not in debt.
Lol, that is going to be the exact cause of the “bad times”, too much debt, household debt, corporate debt, government debt, and investor debt are all way beyond high. So, for those of us with no or very little debt, reduce or eliminate exposure to the markets and don’t worry about inflation with respect to low gains on GICs and HISAs.
9:34 pm
October 21, 2013
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I think it's going to involve a lot more than that.
If a lot of people on my street or my fellow condo-dwellers are virtually bankrupt, it's going to have a huge impact on me, even if I am debt- and markets-free. and have a million or two in funny-money GICs.
11:24 pm
October 29, 2017
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You are correct Loonie. It’s going to be the largest Reset that has ever been experienced and nothing can be done to avoid it. I don’t even think that holding other currencies will save you, it might help, but the fallout will hit everywhere.
1:00 am
October 21, 2013
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I am extremely pessimistic. I don't really see any safe havens, just alternatives. It doesn't hurt to diversify. You might get lucky. Was hoping you had some insights.
Even RSP/RIFs contain a form of debt, because you still owe tax on them and rates can change. I am getting rid of ours as fast as reasonably possible by topping up tax brackets.
The other huge threats are climate change ramifications and rogue/repressive political leadership.
I see all of these things converging over the next while, no more than 20 years. It's not a pretty picture.
7:57 am
February 20, 2018
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Vatox housing rents are unaffordable because of government policy including low interest rates. A one bedroom now averages $2000/mth 75% of Canadians cant afford that this is a crisis now ahead of transit. Low interest rates subsidized the building development industry at everyones expense they did not deliver.
10:00 am
October 29, 2017
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Unfortunately, for the majority of us, we won’t be able to completely protect our finances, because the world is too integrated. If you rely on the system for your daily operation you can only minimize the fallout by reducing exposure. The only insight I have, would be to buy hard assets that are useful to you and that will be in demand. But what would that be, exactly.
The only safe place, is to live off the grid and be self sufficient.
2:00 pm
October 21, 2013
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I'm too old to set up off the grid and be a back-to-the-lander! lol. My back isn't strong enough any more. But I imagine us old folks will be considered dispensable when things get really tough anyway.
Do you live off the grid etc yourself? just curious.
The only person I know who does so to some degree is now considering moving to town to live with her daughter as it's getting to be too much for her with the isolation and all the work etc as a widow over 70. And, having lived this kind of lifestyle, she doesn't have much money with which to insulate her situation, just the value of the property.
I don't know what sort of hard assets would help me as a city dweller. I remember reading once many years ago that there were some kinds of businesses that did very well in the Great Depression. The only one I can remember was Dominion Glass as they made canning jars. People couldn't afford canned goods so they did their own canning. Nowadays we wouldn't even have the skills for the most part - or the storage space.
3:12 pm
October 29, 2017
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I’m severely disabled, so I won’t be leaving my city condo, lol. I’m stuck in the system, I need the amenities of the city.
Utilities and waterworks are definitely going to be needed regardless of the world economy and financial system. If you can grab a piece of that action, it’s sure to endure. I don’t see people giving up running water and sewer system. The electrical grid is also quite desirable.
I’m going to research solar panels as they would be useful to yourself and to the masses that can’t afford potential skyrocketing electrical costs.
7:12 pm
February 20, 2018
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Todays U.s. employment report despite shutdown blew past doubled expectations. Rates are going up another round. Those who locked in 5yrs will be disappointed
8:42 pm
October 21, 2013
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Vatox said
I’m severely disabled, so I won’t be leaving my city condo, lol. I’m stuck in the system, I need the amenities of the city.Utilities and waterworks are definitely going to be needed regardless of the world economy and financial system. If you can grab a piece of that action, it’s sure to endure. I don’t see people giving up running water and sewer system. The electrical grid is also quite desirable.
I’m going to research solar panels as they would be useful to yourself and to the masses that can’t afford potential skyrocketing electrical costs.
Yes, I think you are royally stuck.
I don't actually know how you invest in water works. I do feel fairly confident though that we will see water shortages due to climate change. These are indeed necessities, and I have opposed their privatization for that reason. Sir Adam Beck, long-serving PC MPP in Ontario, had the right idea way back when Ontario Hydro was first established.
Have you read Ted Koppel's book on the vulnerability of the electrical grid? It's called Lights Out. He's hardly a flaming radical. Very sobering.
Yes, some kind of solar system that could easily be attached to your roof or balcony and plugged into your fuse box or whatever would be very functional. Let me know if you find one.
The Arctic should be warm enough for repurposing soon... but kind of weak on infrastructure! lol
9:55 pm
October 29, 2017
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hotmony said
Todays U.s. employment report despite shutdown blew past doubled expectations. Rates are going up another round. Those who locked in 5yrs will be disappointed
Lower unemployment will just increase wages, slow economic growth and lower demand from rising prices. That’s in addition to the tariffs and trade barriers already doing it. The numbers you are seeing are reflected from the initial stages of protectionism and the Trump tax cuts. Once those are done, the fallout begins.
Don’t forget the USMCA that needs to get passed by the Democratic controlled House.
6:38 am
September 11, 2013
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I agree, people who live in large cities with all their wealth in electronic blips or pieces of paper, their goose is cooked. History is instructive, shows some options for when things hit the fan. I started my learning decades ago by reading about who did best and who did worst during the desperate times in social-order-breaking-down Germany/Austria between the world wars. Very helpful to me, but I'd stress the key is that at the end of the day you have to implement. Otherwise no point wasting your time and just scaring yourself.
7:44 am
December 15, 2016
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Interesting thread ! I guess many of us that have been studying the past and investing realise that someday the chit will hit the fan and savers will be wiped out.
Gold may be a safe haven but stores won't accept it as payment and dollars will have to be printed daily, perhaps similar to Weimar Germany.
Perhaps owning a utility like Emera would retain some value because their infrastructure will increase in value and their debt will wiped out, inflated away.
I hope I'm not around to see it because it won't be pretty. I also hope that we're wrong on this one.
2:22 pm
February 20, 2018
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Vatox said
Lower unemployment will just increase wages, slow economic growth and lower demand from rising prices. That’s in addition to the tariffs and trade barriers already doing it. The numbers you are seeing are reflected from the initial stages of protectionism and the Trump tax cuts. Once those are done, the fallout begins.Don’t forget the USMCA that needs to get passed by the Democratic controlled House.
Tariffs trade barriers a nothing burger trump has it under control he's just makin sure the States is solidly in charge for us all his moves alone will force up rates. No fallout man not even close trump is doin a helluva job. Usmc is done. Gic rates will top out at around 5-6% where they should be for stability. Some inflation
here hidden in housing market thats it and taxes ford then cons start to bring down. As long as the radical left doesnt get in we're ok.
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