Supporting Canadians

Everything is actually all about Currency.

So, posted yesterday, about the American situation and Interest Rates: https://finance.yahoo.com/video/fed-leaves-rates-unchanged-says-181102400.html. To quote: The Committee also indicates that rate cuts aren't coming soon, saying that it "does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent."

They need higher Interest Rates to fight Inflation.

The Americans are suffering from Inflation because of Wage Growth is the rhetoric in the media; however, their economy is, by no means, going gangbusters. The USD needs to be kept higher to solicit Foreign Investment.

I don’t completely understand Current Accounts, Foreign Exchanges etc. But, I do know the American People are breaking and it strikes me as curious the American Fed keeps raising Interest Rates despite it.

China is really good for third party observation: https://www.globaltimes.cn/page/202404/1311456.shtml. So, I noticed this: US regulators seized Republic First Bancorp and agreed to sell it to Fulton Bank, which will assume substantially all deposits and purchase all the assets of the troubled lender to "protect depositors," Reuters reported on Saturday.

While Republic First Bancorp is not a big one in the US, its sudden collapse may still serve as a reminder that even after the wave of bank failures witnessed last year, the US regional bank crisis may still be far from over, as long as the Fed's policy rates stay elevated at a range from 5 to 5.25 percent.

Interest Rates cannot get higher as the American Economy will self-destruct. It’s definitely cracking already despite the Inflation rhetoric.

Curious to watch.

From the Chinese again: If anything, the plight faced by regional US banks is a microcosm of the negative impact the Fed's tightening policy has brought to the country's financial market. The Fed's high interest rate policy is supposed to tame inflation and maintain economic stability, but it has proven to be ineffective for those purposes. Now with US inflation exceeding expectations for a third month in a row, hopes for a rate cut in the short term have been dashed, highlighting the dilemma of the Fed's policy choices. More worrying, the Fed seems to have no clue about how to address the messy situation.

Obviously, I interpret Inflation differently, but it strikes me, Tiff, you are under the same sort of Currency/Inflation nonsense pressure, here.

Distracting rhetoric as well?

The scary press in the FP is about the CAD falling further relative the USD if Interest Rates aren’t increased.

Yesterday, I posted about Loblaws and its 10% year end profit increase; food prices have justified Inflation. This morning, I recollected the Supermarket news story and how ALL the grocery chains have seen their profits increase over the past year: Another study from December 2023 initiated by the Centre for Future Work, a Progressive research institute, predicted yearly profits of more than $6 billion, an 8% year-over-year increase.

Over the past year, Canadians have paid almost 25% more in grocery bills, for food.

Justifying an Inflation caused by greed? Confronted by BOC Interest Rates?

That’s not an over-heated economy, Tiff. That’s a manipulated one.

Because, you do know, Tiff, Canadians are breaking, too. Food prices have been Inflated by greed. Rent prices have been Inflated by Mortgage costs. I’ve posted twice about the Intimate Partner Violence epidemic and its likely cause of Financial Stress.

I happen to think Economists have noticed Peoples’ living conditions. It seems to me ones at the Royal Bank and BMO have; the odd ones at TD and Scotiabank, too. Their Reps have been in the papers, worrying, anyhow.

Maybe, think David Rosenberg?

He has warned the Canadian Economic situation is not good. Yet, the rhetoric is constantly higher Interest Rates? To support the Dollar (CAD vis-a-vis USD) ?Inflation is still not yet under control?

Mortgage holders are looking for lower Interest Rates, Tiff, but Interest Rates on Mortgages have also driven inflation.

That, I don’t understand.

Interest Rates go up to fight Inflation, but because they are Increased, they drive Inflation. And, Mortgage rates are determined by the BOC rates, which are raised to fight Inflation, so, that’s just a weird sort of reasoning.

I try to understand.

Inflation has risen as the Bank of Canada has raised Interest Rates which were raised to fight the Inflation caused by Higher Interest Rates? Warped reasoning?

I told you, Tiff, it’s all about Currency, anyhow, and not about the Canadian Economy or standard of living at all.

Now, the complicated question, Tiff. Why?

We’re pretty much back where we started pre-Pandemic. Even population ways, because, despite the BOOM (which I never believed), we’re still short Nurses, Teachers, Trades etc. So, what was the point? Of the Interest Rate hikes? The Inflation propaganda? To give the deep pocketed People more money?

The Chinese are worried about a Currency War.

Again from the Global Times: Meanwhile, the negative spillover effect of the Fed's high interest rates on the global economy and capital markets is bound to accumulate and worsen. The longer the Fed's high interest rate policy persists, the greater the constraints on the US economy will become, not only exerting rising pressure on the domestic financial system but also on global financial markets, particularly the emerging markets. 

In a high-rate environment, the emerging market economies have to contend with the pressure of capital flights, increased foreign debt servicing costs, and a heightened risk of currency depreciation.

For example, since the middle of April, the currencies of many Asian economies have experienced growing volatility, leading to concerns about a possible currency war. The depreciation of these currencies has also sparked turmoil in stock markets in some countries, evoking ugly memories of the 1997 Asian financial crisis.

I suspect we’re both an Emerging Economy trying to get free from the UK shackles, we are STILL a colony, and also a Western ‘POWER’ trying to game the most profitable elements of the financial system.

That should lighten your load, Tiff, our politicians are obviously not principled; we don’t have to stick with the Americans and the International Rules Based Order BS. You can choose not to.

And lower Interest Rates fast.

ps: Clean Slate: https://michael-hudson.com/2018/12/ft-wiping-the-slate-clean-is-it-time-to-reconsider-debt-forgiveness/