Tuesday, May 29, 2007

Interest Rates, Dollar, Going Up

The last few years have been pretty crazy as far as the economy goes, with many things going well out of the price range of the average person. You know what I'm talking about. Housing, fuel, etc. Everyone trying to make a big buck and fast.

I'm not much of an expert on economics, but I've felt for a long time that things are well out of balance and there has to be some kind of correction coming down the pipe. It looks like things are starting to go the way I figured.

This article posted on CBC today is in regards to the Bank of Canada and their indication that the interest rate will very likely be increasing again (it just went up last week).

CBC: Dollar jumps as Bank of Canada signals rate hike may be near

The Canadian dollar is going up, and fast. Within Canada, that doesn't have much of an effect, except that manufacturing is being hurt as other countries aren't making use of our "cheap" labour. A Big Mac is still $3.55 no matter what the rate is.

"The dollar closed above 93 cents US on Tuesday after the Bank of Canada signalled that inflation pressures may lead to higher interest rates sooner rather than later."

And the banks are predicting two further increases to stem the inflation.

"RBC economists also expect a rate hike in July and another later in the year."

So, what does all this mean? I can't say for sure, but I'm hoping it's all leading towards bringing the market back to where it should be, so that a regular working guy like me can buy a house to raise a family in, a yard to own a dog, and a garage to work in.

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1 Smart Remarks:

Anonymous Anonymous said...

I just heard on the news today that the real estate market will level out in the next 2 years.

10:15 PM  

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