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Rate cut.




Full House
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Member since: Oct 12




Posts: 2544
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Quote:
Originally posted by Full House



Check un du trois kat....

Interest rates cut by the Bank of Canada to 0.5% for bank prime.

fh.

http://www.cbc.ca/news/business/bank-of-canada-cuts-benchmark-interest-rate-to-0-5-1.3152673</font>


--
I was on to CBC Montreal feed and it was pre broadcast announcement, such as testing etc., and I was too eager to get the announcement and hence the introduction to the topic.

Generally when an interest rate gets cut, the money that landed into Canada departs to greener pastures, seeking an higher yield. At least that is what they say. Also, the local industries are encouraged to borrow more and enhance their stock and production generate more and flood the markets and create demand.

There is more to it than what we think it is going to happen. Here is another scenario where imports become more expensive, because the purchasing power of the dollar drops down. It is like devaluing the Canadian Dollar. The markets find its own level.

You don't have to be a Governor to know that. The free floating gets started and the FOREX markets go wing ding and the Oil Companies enter into the picture and play with it. So also the others who want the Canadian Dollar devalued. The purchasing power of our Canadian Dollar goes down and people now want to get into Canada and sight see, purchase goods here and take it to their own country. All of this looks great on paper. In actual fact, the BIG Corporations that have been waiting for an opportunity like this has moved their capital, lock stock and barrel to countries that has cheap labour, such as Mexico, Bangladesh, India and China and opening up Newer branch plants and produce the same items that were manufactured here and create unemployment for us here.

These Corporations say that they get 15% or better yield on their capital with this cheap labour. Now they want to borrow more here at very low interest rates and create huge factories outside of Canada and hang us high and dry.

We do not have a huge capacity to borrow, like the Big Corporations, so when we go for our mortgages, we get a Canadian made rate when the interest rates drops. It has become a normal practice and the Consumer and Corporate affairs let the Big Banks also play with the interest rates. Now that we all know that there will be little or no activity will take place in the markets, we just wait for the New Immigrants come down and enter into the Real Estate Markets, either rent a place or buy one and fill the empty spaces and generate a flow of capital or help top up some one else's income who is owning a rental property. This type of free flow of cash creates consumer confidence and the wheels of high finance churns smoothly even in these down days.

Also it is nice to know that we are also gaining a very small chunk by saving on these interest payments to the Big Banks. Even there I see the Mortgage Brokers hedging their business by asking for a Higher Down Payment, in case the people who have business income head into a down turn. That is my observation. But it is nice to know that the borrower has a substantial amount invested into his property to satisfy the brokers requirements.

These are the times, if you can borrow and invest and make a good chunk of money, by taking a calculated risk, you will get ahead of all of us in the very near future.

HOW? There are very good vehicles that are on the market which only a few know and it is good to keep your eyes peeled open and get into it, the minute the avenue opens up. So, don't lose hope.

FH.


 
Last edited by: Full House on 18-08-15 19:04:25
Post ID: 225935 18-08-15 18:18:56
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Full House
Senior Desi
Member since: Oct 12




Posts: 2544
Location:


dup

 
Last edited by: Full House on 18-08-15 18:31:26
Post ID: 225936 18-08-15 18:18:57
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Blue_Peafowl
Senior Desi
Member since: Dec 08




Posts: 1350
Location: Brampton, Ont, Canada


Chalo local manufacturing ko Fayada hoga....

hope now they stay low for at least few years ...
sudden increase in rate will create huge Havoc/Chaos


-----------------------------------------------------------------
'Some goals are so worthy, it's glorious even to fail.' (Param Vir Chakra awardee Lt. Manoj Pandey)

 
Post ID: 225949 19-08-15 09:26:45
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JRF
Senior Desi
Member since: Jul 04




Posts: 1852
Location: GTA, Ontario


Local manufacturing has long been packed to third world countries.
Because of the rate cut, it becomes questionnable to reinvest in the infrastructure then manufacture.
So the rate cut still largely benefits the big banks.

One favorable fact is the flourishing economy down south with the trend of maintaining current ratio between the currencies, that is it.

Quote:
Originally posted by Blue_Peafowl

Chalo local manufacturing ko Fayada hoga....

hope now they stay low for at least few years ...
sudden increase in rate will create huge Havoc/Chaos



-----------------------------------------------------------------
The cowards never started,
The weak died on the way,
Only the strong arrived.
http://www.youtube.com/watch?v=_yK1i9cLAMM

 
Post ID: 225953 19-08-15 10:24:13
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Full House
Senior Desi
Member since: Oct 12




Posts: 2544
Location:

WE ARE GETTING BOILED IN A POT...
Quote:
Originally posted by Blue_Peafowl

Chalo local manufacturing ko Fayada hoga....

hope now they stay low for at least few years ...
sudden increase in rate will create huge Havoc/Chaos



------

Rumours have it that the rates will stay put around the same level for a period of Two years. But it could change if circumstances warrant an increase. The change is for upward movement.

But with our economy in a down turn and no amount of inducement will bring about a change to the positive side, people always look for another drop of a quarter point to stimulate the economy. Every time they do this, the reverse seems to happen and we end up with a status quo and see the money moving out to countries with cheap labour. In many an instance, they have closed the plant and physically moved them away from Canada.

All it goes to show is that we have a very large land mass and with a very small population, we are unable to run it suitable to bring about a prosperous country as the Governments have NO PLANS to bring about a change to help the population that is screaming for good jobs to keep them going. These minimum wage jobs and fight for fifteen is just a show to tell the public that they are doing something. It is just an eye wash.

We have been learning to live with any kind of situation, come hell or high water, as that is the human nature to overcome adversities and move on. We seem to adapt to even the worst scenarios. (It is like cooking a lobster from the cold state to a boiling state)

FH.


 
Post ID: 225958 19-08-15 11:38:11
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febpreet
Senior Desi
Member since: Jan 07




Posts: 3252
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Quote:
Originally posted by Blue_Peafowl

Chalo local manufacturing ko Fayada hoga....




Nahin hoga - they all left for China already. Canada's only hope is the Real Estate sector that the Govts are fighting tooth and nail by keeping the rates low.

I said it time and again, focus on the commodity, lumber, agriculture, services exports to Asia and Europe. Advertise Educational sector, and promote Canada aggressively for tourism. Get the newly Rich/Millionaires in Asia to invest here. In any case, expanding the horizon/perspective always plays out well for individuals, companies, and the Govts. As long as they stick out to US market, they are doomed to fail. You can't afford to put all eggs in one basket.


 
Last edited by: febpreet on 19-08-15 12:37:03
Post ID: 225961 19-08-15 12:36:04
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febpreet
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Member since: Jan 07




Posts: 3252
Location:


Also heard this morning on CBC that US is also withholding the rate increase in the next quarter and deferring it for now.

So, get used to the lower rates while they last. Try to pay out as much mortgage as you can while they are low, for you will have a sustenance if the rates jump up slightly later on.


 
Post ID: 225962 19-08-15 12:39:30
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hchheda
Senior Desi
Member since: Aug 05




Posts: 2243
Location: Woodbridge


I have been told by friends who are in position of control (CGs, CAs and controllers) that the rate drop has reduced the interest burden on most industry which frees up some cash for the business to invest in marketing and sales activities. It also becomes affordable to borrow to invest for short term gains.

I have no idea what goes on in the financial sector - but it seems that too many cooks are spoiling the broth scenario. There should not have been any micro managing by the BOC or Federal bank and let the market stabilize itself. It seems to me that the quantitative easing and fiscal support provided by the US Fed in 2009~2010 era had ulterior motives besides the local economy.

Wouldn't it be beneficial to repay the mortgage at a faster pace when the rates are higher?

:confused:

Hiren


 
Post ID: 225971 19-08-15 17:35:07
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Full House
Senior Desi
Member since: Oct 12




Posts: 2544
Location:

FOR THOSE WHO ARE ON THE LOOK OUT FOR ANOTHER RATE DROP....
Quote:


ANOTHER RATE CUT.. ON THE 9th SEPTEMBER 2015. Mmmm..I am eagerly waiting.

The Bank of Canada will cut interest rates at its Sept. 9 meeting, National Bank Financial says, becoming the first major bank to call for a cut amid signs market turmoil threatens an economic recovery.

Speaking by phone from Montreal on Wednesday, economist Paul-Andre Pinsonnault predicted Governor Stephen Poloz will cut the policy rate by a quarter point to 0.25 percent next month, matching a record low set in 2009 during the global financial crisis.

Will we get the full benefit of the drop this time?! javascript:smilie(':confused:');

FH.

http://business.financialpost.com/investing/global-investor/bank-of-canada-will-cut-interest-rates-again-on-sept-9-national-bank-predicts




 
Post ID: 226354 27-08-15 01:18:12
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Full House
Senior Desi
Member since: Oct 12




Posts: 2544
Location:

UNEMPLOYMENT INCREASED by 0.2%
Quote:


See how they manipulate the facts...!!

Compared with 12 months earlier, employment was up by 193,000 or 1.1%. Over the same period, full-time work increased by 318,000 (+2.2%) while part time declined by 125,000 (-3.6%). At the same time, the total number of hours worked rose 2.1%.

In August, employment increased among women aged 55 and older, while it edged down for men and women aged 25 to 54. There was little employment change among the other demographic groups.

Provincially, employment rose in Saskatchewan, Newfoundland and Labrador, Manitoba and New Brunswick. There was little change in the other provinces.

Employment increased in public administration and educational services, while it was little changed in the remaining industries.

The number of public sector employees was up in August, while self-employment edged down. At the same time, private sector employment was little changed.

FH

link. :
http://www.canadianrealestatemagazine.ca/news/canada-job-numbers-for-august-hit-195839.aspx

HRH LMC
/quote]


 
Last edited by: Full House on 04-09-15 17:51:51
Post ID: 226986 04-09-15 17:49:21
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Contributors:
Barangas(2)  Blue_Peafowl(1)  dhaikin(1)  febpreet(6)  Full House(8)  happywoman36(1)  hchheda(3)  
JRF(1)  
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