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Email this3:34 am
December 8, 2015
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See Section 3. Money creation in the private banking system.
5:20 am
March 30, 2017
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amidat said
See Section 3. Money creation in the private banking system.
That section is interesting. However the money is "created" only cuz Bank of Canada sold the private commercial bank the govt securities as the starting point.
So technically speaking, its still only the Bank of Canada that can "create" money in my mind.
7:47 am
April 6, 2013
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3 Money Creation in the Private Banking System
Private commercial banks also create money when they purchase newly issued government securities as primary dealers at auctions. They do so by making digital accounting entries on their own balance sheets: the asset side is augmented to reflect the purchase of new securities, and the liability side is augmented to reflect a new deposit in the federal government’s account with the bank.
What do you think the federal government is going to do with the deposit balance in its account with the commercial bank? Just leave it there?
Those "government securities" are Government of Canada bonds and treasury bills. Federal government doesn't issue those and pay interest on them just for the heck of it. The federal government will spend the bank balance by writing cheques or originating direct deposits.
That commercial bank better have Canadian dollars from somewhere to deliver to the banks and credit unions that accept the government cheques and direct deposit items for deposit.
Banks can create M2 "money" that includes chequing account balances. But, a bank can't always settle a cheque drawn on it by giving a credit to another of its chequing accounts.
10:47 am
October 12, 2022
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gicbits said
It should be 5% for 1 year now. Two more interest rates hike to go this year so there should be 1 year GICs at 5.5% by the end of the year.
So for first time 2-5 y gic from royal investing RBC are above 5%. In few days may be 1 y would go to 5 from 4.9
11:31 am
October 5, 2017
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oltunde :
Could you provide the web link for these rates above 5% ? 
9:59 am
September 30, 2017
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There are 5% (or more) in 1-5 y terms. Now what? Would you bite or wait for something else instead? …some HISA offers are quite near 5% as well
11:38 am
October 21, 2013
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FWIW, I'm waiting until at least mid-Dec. When I do leap, it will be a small portion of my cash but enough to keep my GIC ladder alive and spread out income for tax purposes. It would take a very extraordinary situation to persuade me to remain completely on the sidelines in 2022 - but not impossible.
I would AT LEAST wait until after the US mid-term elections, as there is likely to be more crap going on down there which could create more instability. When the US twitches, the world shakes, alas.
11:58 am
April 14, 2021
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I'm doing the same; waiting until after the Dec 7 announcement before making any major decision. The proliferation of 5% offers just gives me that much more flexibility, if a major turn is in the works. Plenty of offers from which to choose, before they all disappear.
Please write your comments in the forum.