Then there were 6

Gas at a buck eighty. Crap houses for a mill and a half. Skinny heads of romaine for three dollars. We all know what’s happening. Now it’s official, and now we also see the consequences.

The news today: inflation in Canada has ripped to 5.7% and will have a six-handle later this month. Compare that with the average of 1.8% since the early 1990s, when our central bank set a target – now shattered for eleven straight months.

Blame Covid, cocooning, WFH, Putin, realtors, the Bank of Mom, used Hondas and the wonky supply chain. Oil at a hundred bucks has made it all worse, along with game-changing sanctions because of the Ukraine war.

So, of course, interest rates are set to pop in Canada on April 13th, and meanwhile bond yields have gone squirrely, guaranteeing the cost of five-year fixed-rate mortgages will swell again before then.

Canada bond surge means higher mortgages

Now the US has moved, too.

For the first time since 2018, with American prices raging higher by 7.9% year/year, the Fed has increased its rate. The central bankers say there will be six (6!) more increases in the US during 2022, while Mr. Market is pricing in three additional in 2023. Our guys are expected to pace, or maybe exceed, that. This means the current chartered bank prime of 2.7% will certainly be pushing 4% by Christmas and within sight of 5% by the one after. Five-year mortgages (which were 2% a few months ago) are 3.4% now, on their way to four and a half.

Actually many economists believe the bank of Canada blew things, and is way behind the curve. “Our findings indicate that as of late 2021, the Bank’s priority should have been squarely on inflation,” says a new report from Scotiabank Economics. “We also find that inflation expectations have been completely de-anchored from the 2% target since late 2021. This recent de-anchoring of expectations means that the Bank’s monetary policy will need to be more aggressive to bring inflation back to target.”

More aggressive. You betcha.

What will this do to residential real estate in Canada, where benchmark prices jumped 3.5% in February alone? Well, nothing good right now. Buyers are flooding into the market (sales up almost 5% last month) to try and beat the rate hikes. (Of course, this is dumb. Swelling rates have always cooled sales and lowered valuations, so buyers would be better off to wait – paying and borrowing less, even if financing costs are higher.)

Inevitably real estate is cooked – at least as we have known it since the summer of 2020. House price acceleration with home loans over 4% cannot approximate the market velocity when mortgages were 2%. Everybody should expect slower sales, more listings and flat prices. If inflation and rates hold, sellers will have to start reducing their asks.

How likely is that?

Very. It could take many months and repeated rate hikes in both Canada and the States, along with a long period of healing in the Ukraine plus years to re-integrate the Russian economy, for prices to be corralled and the global supply chain to repair. Meanwhile you can count on wage pressures to build (more job openings than workers) and taxes to increase (Covid cost governments about $20 trillion globally and gave Canada a muddah of a deficit to finance).

So how can these conclusions not be obvious; (a) if you have debt, lock it up now. (b) If you’re looking to buy real estate, stop. (c) If you’ve been thinking of selling, moving, downsizing or exiting, do it. (By the way, this is an interesting harbinger.)

How about investments and portfolios?

Higher rate expectations are baked into stock prices. CBs have been transparent about their intentions and certainly don’t want to upend the economy or markets, coming off two years of global pandemic misery. In fact, traders and investors welcome a higher cost of money since that is far more palatable than runaway inflation.

Meanwhile wars, like viruses, morph and peter out. Once the Kremlin and Zelensky formally recognize this conflict is killing them both and reach a settlement (no NATO, avowed neutrality, territorial swap) equity markets will advance. Maybe erupt. We’ll see. The post-pandemic reopening trade can then continue, as only 58% of the world is fully vaxed now and there’s a lot of open runway ahead.

We all should have known this was coming. Now it’s here. Those who told you rates would never rise were fools. Or charlatans. Or born in the Nineties.

About the picture: “Thank you so much for your daily blog. I have been reading it for 3 to 4 years now,” writes Kuan. “Learning lots from your blog and keeps me grounded. I was introduced to it by my sister and she reads it also. I don’t have a dog, but my sister does. She is such a sweetheart (the dog, and maybe my sister). Her name is Rosie. Perhaps you can put her photo up on your blog and my sister will be ecstatic.”

144 comments ↓

#1 Jim on 03.16.22 at 3:46 pm

The Feds announcement of 0.25% increase is like spitting on a forest fire.

#2 T-Rev on 03.16.22 at 3:57 pm

I’m in Camp Garth on the trajectory of rates, but I don’t know if they’ll swell by more than a couple points, leaving them ultimately in line with the norms of the 2010s. No return to the days of 1981-82. This is because I don’t believe it will take much to quench an over leveraged populace and equally over leveraged public entities, and also because I’m not sure how rising rates are going to help supply chain issues, which is where a lot of the problem is stemming from. Sure, higher rates mean less spending overalls which ultimately has a negative pressure on the price of everything, but I don’t think it’s going to make much of a difference to whether or not there’s enough furnace parts and electrical breakers coming from China. Raising them too high is going to cause recession, with potentially little impact on prices.

Maybe I’m thinking to micro- but I’m not sure this time it’s about money supply.

#3 TurnerNation on 03.16.22 at 4:02 pm

A glimpse into the future. This all makes sense when you accept there is no more news only the manufacturing of consent.

–5 days ago I wrote:

#12 TurnerNation on 03.12.22 at 12:00 pm
SO what might come next in this global WW3 – it kicked off March 2020 in all the Former First World Countries
Easy. Check the history books. USA Must be drawn in.
What could it be a Cyber attack blamed on Russia or, does it really matter what gets cooked up?

…on cue our “news” begins selling us that that is inevitable. Sure guys. Sure.

“The Financial Post reports in its Wednesday edition that Forward Security’s Farshad Abasi says Russian cyberattacks against Canada are inevitable given Prime Minister Justin Trudeau’s decision to be a participant in sanctioning Russia over its invasion of Ukraine. The Post’s Marisa Coulton writes that Beauceron Security head David Shipley says: “We are literally and figuratively poking the bear. So Canadians should not feel that we are not connected to this conflict. We are.” He expects future cyberattacks to be driven in part by Russia’s need for money. Large Canadian companies might be ready. For example, Canada’s six largest banks spent about $100-billion on technology between 2009 and 2019, and a significant portion of that spending was on tech “dedicated to security measures.” For smaller companies, it is a different story. (stockwatch.com)

#4 Reality Check on 03.16.22 at 4:03 pm

The perennially wrong conspiracy theorists

I kinda feel bad for the conspiracy guys. Time and time again they create farfetched convoluted theories and time and time again they are proven wrong. Usually not just wrong, but embarrassingly wrong.

Unfortunately there’s poor conspiracy advocates jump dow the rabbit hole of conspiracy bloggers and “alternative” media (alternative media = guys cooking up totally non verified ideas in there basement suite.)

Remember, Covid was a created virus that would be used to infect and control us and it would be with us forever. And now we see that Covid is coming to an end to as science said it would.

Remember how vaccines were going to kill us all. Real science shows that the vaccine is incredibly safe and has been effective in keeping people out of ICUs and allowing the health care system to treat people sick with non-preventable diseases.

Remember, Canada was the “test ground” for control of society through Covid measures. Some control! Look how easy it was for a vanishingly small group of antivax truckers to makes fools of three levels of government, hold Ottawa hostage and stop billions of dollars worth of Canada/U.S. trade. So much for controlling us all.

Remember, how Measures, lockdowns and vaccine passports would be used to control and track us all. All these are being phased out just as science and policy makers said they would be as the pandemic ended.

Remember also how passports and really tiny, tiny microchips would be used to control and track us . As an aside, don’t these conspiracy theorist have cell phones and don’t they understand that cell phones/apps allow private sector companies to track your every physical and commercial move?

Remember the Emergency Act was going to impose martial law, put soldiers in every corner and confiscate our bank accounts. Of course the Emergency Act was rescinded after it did the job of freeing Ottawa’s downtown. And only 200ish bank accounts were frozen in a country of 38 million.

Now I hope that most “conspiracy” adherents don’t drink the cool aide – that they view it like most people view horoscopes – fun to read but not something real. But unfortunately I think many of these conspiracy peeps swallow these ideas hook, line and sinker and make life decisions based on them. Decisions based on an utterly wrong construct of the world.

#5 The Original Jake on 03.16.22 at 4:06 pm

“many economists believe the bank of Canada blew things, and is way behind the curve”

Powell admitted this afternoon that the FED is behind the curve, however, no one can predict the future even with all the tools they have.

Covid has created many surprises. Oil negative for the first time ever. House prices up 20% yoy. People quitting their jobs and refusing to go back. Inflation the highest ever in 40 years and still rising. It would not surprise me if rate increases surpass expectations that puts us into recession in order to combat runaway inflation.

#6 Apocalypse NOW on 03.16.22 at 4:11 pm

HIGH ALERT!

The speech by Zelensky and the announcement by Biden today will lead to dramatic escalation.

https://www.usatoday.com/story/news/politics/2022/03/16/ukraine-invasion-live-updates-zelenskyy-congress/7056525001/

Giving $800 million in weapons to Ukraine and calling Putin a war criminal (albeit accurately) today ignites huge issues for Putin.

Get out of any capital cities asap.

Expect nukes, as warning shots first, within 24-48 hours.

Then all hell will break loose.

PREPARE

#7 dave on 03.16.22 at 4:11 pm

Everyone knows that there should be a .5% hike – inflation is way beyond control.

#8 THE DANDADA on 03.16.22 at 4:13 pm

“Blame Covid, cocooning, WFH, Putin, realtors, the Bank of Mom, used Hondas and the wonky supply chain.”

Uh NO!!! Blame the incompetent elected officials put in charge to handle the financial statements of a nation……

Fiscal Irresponsibility at it’s finest.

Money Printer go BBBRRRRRRRR!!!!

#9 west coast on 03.16.22 at 4:15 pm

over 400,000 new immigrants each year.
record low inventory for houses.
low mortgage rates (compared to history).
inflation close to 6%.
so many families looking for homes over the last two years.

these, among more, will continue to fuel the real estate market for the near future. perhaps it will lever off in the next year or so.

#10 FRANK BONESS on 03.16.22 at 4:28 pm

Hi Garth: The only place JustFlation is 5.7% is in Ottawa and the B.O.C. This does not reflect the hikes happening on the street where people live. I would gander to say that it is closer to 25-30% on most if not all items. An example – Yesterday at YIG’s, ‘No Name Butter’ before the New Year, had gone up to $4.59; its now $5.99; an increase of $1.40, which is 30.5%. So now, when I go to buy groceries this increase in costs reflects a huge increase of the total in my grocery cart compared to pre-covid.

#11 Recession on 03.16.22 at 4:30 pm

Recession is coming.. The stock market crashes during a recession. The 1% including Elon Musk are prepared for it and have moved to Cash. Elon Musk started selling stocks in November last year.

Move your holding to Bonds including Treasuries or GIC.

https://financialpost.com/investing/david-rosenberg-food-and-energy-shock-this-severe-has-only-happened-four-times-before-three-led-to-recession

https://markets.businessinsider.com/news/stocks/david-rosenberg-asset-bubbles-stock-market-correction-treasury-bonds-deflation-2022-1

#12 Dogman01 on 03.16.22 at 4:35 pm

Ukraine Fog of War: What’s Really Happening?

https://youtu.be/Igq2fqa7RY4

Decent commentary and a selection of analysis etc.

No wonder this type of media is eating the lunch of the legacy media.

#13 Steven on 03.16.22 at 4:38 pm

2 more to go and QE resumes plus rates go down.

Just a scratch.

#14 Dogman01 on 03.16.22 at 4:47 pm

Inflation: It really is a “WOW”!

You would think our Minister of Middle Class Prosperity and Associate Minister of Finance would be all over this.

If Over Half (53%) of Canadian Households $200 or Less Away from Insolvency, in April 2021.
https://www.ipsos.com/en-ca/over-half-53-canadian-households-200-or-less-away-insolvency-yet-still-optimistic-about-financial

Some back of the napkin math:
$6000 Monthly spend x 5.7% Inflation = $342 -$200 = -$142 a month. I sure hope they get a raise or another job.

Can they afford higher payments on that fat mortgage…I think not.

This inflation will have to cause a recession…as consumers will have to stop consuming.

#15 Doug t on 03.16.22 at 4:48 pm

Yeah the pandemic is petering out – yeah this war will end (somehow yikes) – but I can’t help but think that TPTB will come up with a new “pandemic/war” to beat us over the head with until they initiate The Great Reset – You will own nothing and be happy lol

#16 PeterfromCalgary on 03.16.22 at 4:53 pm

I don’t think the central banks of the world can pull off a soft landing. I hope I am wrong.

The ghost of Paul Volcker may haunt us in 2022!

#17 PL on 03.16.22 at 4:54 pm

Garth, what do you think of building a house right now? Will building costs also fall as interest rates rise or are higher construction costs here to stay?

#18 Brett in Calgary on 03.16.22 at 5:01 pm

#11 Recession on 03.16.22 at 4:30 pm
Recession is coming.
———————–
Rosenberg is a well-known bear, but I think he has a valid point about extreme leverage ultimately stopping interest rate hikes at a 2-2.5% increase. I have added to bonds lately, as they appear on sale to me.

Food/energy inflation is really killing people, maybe not the folks on Garth’s blog who can weather it, but the regular joes in your neighborhoods, and in your families are in serious trouble already.

One example, my sister (levered to the hilt) admitted she’s already $1000 short every month because of inflation, and this is before their variable rate mortgages have up ticked. She’s not dumb, she’s just a typical Canadian.

#19 Søren Angst on 03.16.22 at 5:01 pm

#12 Dogman01

Some of the legacy media have actual Generals talking about what is happening and has happened (and will happen).

“Average Infantry Man” is just that. Watched him awhile ago and concluded 10 min on Twitter is better than what he says and it is his source as well.

Just a guy trying to boost his subscription numbers on YouTube. Look at his Playlists.

#20 ogdoad on 03.16.22 at 5:02 pm

what? Could all you sycophantic, hubris narcissists actually be shaking in your Gucci thong sandals b/c house prices actually may take a significant hit? Or not go up for a while? The horror! To think that you could even be in the same room as a refugee…or a renter…the shame! At least the nose bleeds will stop.

News flash – you failed at life – your kids suck at sports, won’t be famous, important, good looking (sucks) or have kids that have these traits…’sigh’…and feigning happiness is soooo fb, or? Buy a tesla to ‘make-up’? The ridicule is like a waterfall…

Hugs on the way out provided by yours truly. You WON’T be disappointed. Little blues’ got the news…’you first’ is on the front page – provided by Ogdoad – *wink*

Og

#21 Linda on 03.16.22 at 5:06 pm

‘Rosie’ does indeed look like a sweetie:)

Have to say, nice to see that Canada is finally beginning to publish somewhat more believable inflation numbers. That having been said, I think actual inflation is still understated & that our true rate is closer to 8%. So, will our BoC decide to go big & raise rates by 0.5% come April? Or will they continue to ease upward by a mere quarter point?

Meanwhile, fingers crossed that the Russian/Ukraine crisis will end soon. In other news, apparently China is likely to have supply chain issues due to a new round of Covid lockdowns. Just another bit of fuel to throw on the inflation fire.

#22 Pick your poison on 03.16.22 at 5:07 pm

Option 1: Massive interest rate hikes to curb inflation. We need rates over inflation long term or we have negative rates. House prices plummet massively, perhaps by 50%. Much screaming.

Option 2: Head in sand and keep inflation high as we don’t want to pop house prices. If we assume 5% inflation ongoing, your property (if prices stay flat) will be worth 50% less approximately in purchasing power after 10 years, and everything else will be very unaffordable. Much confusion and then screaming.

Central bankers, over to you.

#23 Timmy on 03.16.22 at 5:12 pm

The Tiffster must be in the back pockets of the real estate industry, otherwise he would have raised rates months ago.

#24 yorkville renter on 03.16.22 at 5:21 pm

Doug T – why do you live in such fear? turn off the TV, get some fresh air… you own, what you own, no one will take your toys away.

#25 yorkville renter on 03.16.22 at 5:22 pm

I hope those who called our government “authoritarian” are finally waking up to what a REAL authoritarian is…

it’s pathetic that people throw words around like they have no meaning… sheesh.

#26 tkid on 03.16.22 at 5:25 pm

Where in hell is the BoC getting an inflation rate of 5.7% from? Rent in my building has gone up 25%. Prices in the grocery stores are up 25%. The prices of everyday items are up 25%.

And now prices are set to skyrocket with the Russian embargo kicking in.

The Fed increasing the rate by .25% is absolutely useless. It’s so little I wonder why they even bothered.

We need another Volker.

#27 Greg on 03.16.22 at 5:25 pm

#1 The Feds announcement of 0.25% increase is like spitting on a forest fire.

Seems as if it were priced in, many stocks dipped but now are upticking across the board.

#28 NOSTRADAMUS on 03.16.22 at 5:25 pm

PET ROCK SPECULATORS.
Today, if you’re looking at your stock or Real Estate portfolio, you’re looking at a relic of a bygone-era. Print it out and hang it on the walls of Woulda, Shoulda, Coulda- got out. New point. For whatever reasons rents are rising, Putin sure isn’t the cause. By the way, how many landlord’s needed to raise rent significantly just to recover not getting paid for 18 months thanks to eviction moratoriums? Then again, if you are a Wanna be a re-elected politician, the math would suggest there are far more renters than rich Landlord’s. New point. (705 area code) While talking to a few local real estate agents I couldn’t help but notice their ashen faces. They reminded me of the recently departed at the funeral home. It would appear that as of March 15th in the year of the Lord 2022 the phones have stopped ring a ding dinging. New Point. So many assets to choose from. However I still believe in (CASH), contrary to all the pet rock speculators. I am on my throne and I will not step down.

#29 Realist on 03.16.22 at 5:36 pm

I think a bit more emphasis should be put on the possibility of war escalating and causing serious damage to all world economies. That, and China shutting down again, will cause further supply issues. We are in for a rough ride.

#30 Chalkie on 03.16.22 at 5:42 pm

As one half feels the the rising pain for mortgages, the other half claps for better income based on better investment rates. What goes up, must come down (home prices) what went down will rise again ( investment rates). The generational wheel, repeats and repeats, just ask the quite old man next door, he has lived it many times, up and down, up and down.

#31 Nonplused on 03.16.22 at 5:50 pm

Saw an interesting perspective on inflation recently. The basic argument is that supply chains are not causing inflation. How to tell? What is inflating the most? Land. Is there a supply chain problem with land?

Heck we’ve even got houses going for more than ask in Calgary now. Our market has been relatively stable since 2006. What’s changed? It’s not like there is a lack of land around Calgary and compared to other jurisdictions in Canada it is relatively easy for developers to bring product to market (if the price is right).

The inflation is being caused by the large increase in money/credit that occurred in response to covid. Inflation is always and everywhere a monetary phenomena. Money had been too cheap for too long before covid, but covid gave governments around the world an excuse to really open the taps. They were finally able to push on the rope. How did we not expect inflation? And it was made even worse by paying people not to work. Money injections with not even a semblance of productivity, not even the inefficient government type of productivity. No goods and services of any kind were produced. But the money was there to be spent.

Supply chain problems are inflationary, but not the 7% kind of inflationary. If people don’t have the money to pay the higher prices, they delay of forgo purchases. Maybe they put off that kitchen renovation or drive the old car another year. They cut back on vacations to Aruba. They delay house repairs. Interestingly, they buy less new underwear (turns out that is a key recession indicator).

So it turns out that all you have to do to get 7% inflation is to inject 7% more money and credit into the system without a corresponding increase in productivity and economic growth. The money will be spent. It will chase what goods and services are available.

On the real estate side, and somewhat with cars also, anything largely financed really, if they also keep interest rates well below inflation then they get a self-reinforcing loop. Why not borrow at 4% to buy real estate, any real estate, in Toronto when it is going up 20% per year? That’s a 16% annual gain on money that isn’t even yours! Even if they put a full capital gains treatment on it the same as they do with stocks, it won’t stop it. People will still be making 12% on the money they borrow. Given even a 20% down payment, the leverage is huge! People are looking at a 50% per year gain on the money they invested, after capital gains taxes! It’s nuts. But of course to actually see that profit, you have to jump off the merry-go-round before it stops. So far not very many people are doing that. Why would they? All indications so far are that the CB’s are only going to tap the brakes, for fear of skidding on the ice.

Buy all the things. There won’t be “deflation”, so nothing is going to get any less expensive. Except maybe oil. But that will be because at a certain price the poor can’t afford any (demand destruction). That isn’t better.

#32 AM in MN on 03.16.22 at 5:52 pm

I still think we’re headed for stagflation like the ’70’s. The money is already printed, it just needs to circulate.

Not sure if that leads to the ’80’s and hard times for employment. Baby Boomers are heading for retirement, and there aren’t that many young ones to take their place.

Also, every industrial company I know has a backlog of at least two years, with more on the way. The cuts to the world supplies from Russia will be very good for Canada, if the Liberals take advantage, but I’m not holding my breath…

#33 crowdedelevatorfartz on 03.16.22 at 5:54 pm

@#14 Dogman01

“You would think our Minister of Middle Class Prosperity and Associate Minister of Finance would be all over this.”

+++

Don’t you worry.
Our non finance Finance Minister has BILLIONS to spend….

https://financialpost.com/news/economy/trudeaus-finance-chief-has-more-room-to-spend-in-april-budget

Extra money from higher gas taxes ….the Liberals get to Par-tay….. ( with your money natch)

#34 Entrepreneur on 03.16.22 at 6:02 pm

Feels like we are on own again especially the responsible ones like the savers, endlessly getting hit the hardest. We know and work around the value of earned money, waiting to jump into opportunities.

Plus getting used, abused, and ignored by the system does not help us, their way or the highway. Who knows what to really do with the worthless money while debt houses go to extreme. Now interest rates going up, put that knive in a little more deeper. This is not a working system for the taxpayer citizen.

Grab that tent yet as most of us are on our own.

#35 Neptunian on 03.16.22 at 6:05 pm

Agreed that BoC is behind the curve, but why?

Agreed that the real inflation is much higher than 5.7%.

There is too much debt outstanding, effectively increasing rate to a level to lower inflation is too risky to trigger a recession. That’s why BoC is behind, they knew it.

The question now is, slow and small rate increases don’t help lower the inflation. Canadians like you and me, under 20%+ inflations, what would we do and what would be the consequence?

#36 Quintilian on 03.16.22 at 6:07 pm

Garth:
Seems as if you are relying on the competence, integrity, and a data based decision from our Central Bank to do the right thing going forward.

But I suggest that previous behaviours are indicative of future behaviours.

They won’t and can’t raise rates until inflation becomes a greater political liability than throwing the over extended debtors and homeowners relying on the unearned equity to finance their retirement under the bus.

They don’t want to be caught with a pin in their hand when the bubble bursts.
They can wait for prices to pop the bubble

#37 Brian on 03.16.22 at 6:09 pm

12 Dogman01 on 03.16.22 at 4:35 pm
Ukraine Fog of War: What’s Really Happening?

https://youtu.be/Igq2fqa7RY4

Decent commentary and a selection of analysis etc.

No wonder this type of media is eating the lunch of the legacy media.

Thanks for the link Dogman01!

#38 Søren Angst on 03.16.22 at 6:12 pm

Well Garth, you pollyanna Russia-Ukraine resolution idea balloon just got burst…

https://twitter.com/dwnews/status/1504210443639926784

The Russians (Putin) are idiots by persisting with their BS narrative and war.

Digging the hole deeper for themselves. Americans will send more lethal weaponry to the Ukrainians that have show they know what to do with it.

I don’t see this ending well for them.

Interesting to see if Mr. Market has a bird about Biden’s proclamation.

#39 Dave on 03.16.22 at 6:20 pm

Rob McLister

Tweet:

It’s not a question of whether we get a recession, but rather how long until the next rate cut.

#40 You know Val on 03.16.22 at 6:20 pm

Time to Eat Russia, All [email protected]!

#41 Gen Z on 03.16.22 at 6:24 pm

Don’t worry.

Adam Vaughan will find a way to suppress mortgage bond yields for the oil dictators and “global investors” who own Canadian real estate.

“Good for foreign investment, but bad for Canadians wanting to own a home”.

#42 Retirement: TurnerNation on 03.16.22 at 6:28 pm

For so long now, I have been praying that TurnerNation would just disappear from the face of the blog.

Every day, I glance at the comments and usually don’t read the names. Within 5 seconds, I realize that it is a TurnerNation comment and my stomach starts to convulse and I get violently ill!

Please Dog …. make him go away!

#43 Big Bucks on 03.16.22 at 6:31 pm

Last time inflation was this high 1991 you could get 13% on a 1 year GIC.Today the best you can do is 2.5.Sorry to say interest rates are going to have to go a lot higher than anything planned if they want to get inflation under control.An overnight rate of 2.5 or even 3% just won’t have any effect in bringing down inflation that looks to hit 10% by the summer.

#44 pPrasseur on 03.16.22 at 6:34 pm

Where in hell is the BoC getting an inflation rate of 5.7% from?

Inflation now running at 5.7% in Canada which likely means somewhere be 10 and 15% in reality, at least if this data was calculated as it was pre- 1980 and 1990:

http://www.shadowstats.com/alternate_data/inflation-charts

Inflation is just a composite number made from an algorithm which is filled with man made decisions, what the bureaucracy and establishment want is what you get, doesn’t mean it’s real.

Same applies to global temperature estimation, gotta follow that narrative.

#45 Strength in dumb ers. on 03.16.22 at 6:50 pm

#18 Brett in Calgary on 03.16.22 at 5:01 pm
#11 Recession on 03.16.22 at 4:30 pm

Recession is coming.

One example, my sister (levered to the hilt) admitted she’s already $1000 short every month because of inflation, and this is before their variable rate mortgages have up ticked.

She’s not dumb, she’s just a typical Canadian.

________

hmmmm. So by your calculation, if a whole lot of people do the same dumb thing, then it’s ok and their really not that dumb!

I guess she could tell her bank this once she is no longer able to make her payments and are ready to repossess her home.

#46 Mattl on 03.16.22 at 6:52 pm

So why didn’t the Fed raise between 2018 and the beginning of Covid? Tells you all you need to know about how they felt about the pre-Covid economy. I think we do get back to pre-pandemic rates, which were incredibly low. Economy falters, and back to zirp.

Sorry but rates have been kept artificially low for over a decade and the pandemic ran 2 years. They will find a reason to put the brakes on raises before 2023 because for whatever reason we can’t have large corrections or recessions. Simply spend our way out when things get shaky.

#47 DON on 03.16.22 at 6:53 pm

#10 FRANK BONESS on 03.16.22 at 4:28 pm
Hi Garth: The only place JustFlation is 5.7% is in Ottawa and the B.O.C. This does not reflect the hikes happening on the street where people live. I would gander to say that it is closer to 25-30% on most if not all items. An example – Yesterday at YIG’s, ‘No Name Butter’ before the New Year, had gone up to $4.59; its now $5.99; an increase of $1.40, which is 30.5%. So now, when I go to buy groceries this increase in costs reflects a huge increase of the total in my grocery cart compared to pre-covid.

********

Milk in our area went up a full dollar from 4.6 a gallon to 5.6. Butter as well. etc etc

#48 pPrasseur on 03.16.22 at 6:53 pm

Elon Musk started selling stocks in November last year.

Tesla is possibly the most overvalued stock in the world, in this case selling to bag a profit is a total no brainer.

#49 Doug t on 03.16.22 at 6:57 pm

#42 retirement

Sorry but most here enjoy Turnernation – you on the other hand can leave anytime

#50 Factorial of 6 rate hikes (6!) on 03.16.22 at 6:57 pm

6! = 6x5x4x3x2x1 = 720 rate hikes. Not enough days in a year for so many :-P

#51 Doug t on 03.16.22 at 7:00 pm

#24 Yorkville

Not living in fear at all – just sitting watching the Big Show unfold …..without fear lol

#52 HH on 03.16.22 at 7:02 pm

Well, Rosie has an endearing and friendly little face. She looks like a lovely dog. I bet she would get along just fine with my sister’s dog, Magpie.
My other sister, also, has two dogs. Border collies. Reba and Muggs. They are so loving and friendly. Rosie would probably like them, too.
Anyway, lovely photo of Rosie.

#53 Barb on 03.16.22 at 7:03 pm

Rosie’s such an adorable looking buddy; she’s smiling!

—————————————
“Blame Covid, cocooning, WFH, Putin, realtors, the Bank of Mom, used Hondas and the wonky supply chain.”

…and flat-out gouging, especially grocery stores.

#54 crowdedelevatorfartz on 03.16.22 at 7:03 pm

@#36 Quintillian
“They won’t and can’t raise rates until inflation becomes a greater political liability than throwing the over extended debtors and homeowners ”

+++
The Bank of Canada and our politicians will be dragged, kicking and screaming by inflation and international money markets…to DEAL with this housing bubble.
The spineless gastropods leading all the political parties will be forced to deal with this.
One way or another.
Sooner than later.

Get out of debt, save a bit of money and be ready to vulture.

#55 BK on 03.16.22 at 7:10 pm

EDIT: Gas at two o nine. Crap houses for two mil. Skinny heads of romaine for five dollars. We all know what’s happening. Now it’s official, and now we also see the consequences. #Vancouver

#56 Sail Away on 03.16.22 at 7:15 pm

For those without debt, or with reasonable debt, interest rate hikes can be beneficial.

Higher interest rates will result in ever more citizen income being pounded right back into the economy, similar in many ways to medieval tyrannical feudal lords taking 90% of their workers’ product.

Over-leveraged people are in big trouble… but this need not affect one’s own finances.

If you have a good nest egg, higher rates can benefit. For example:

Scenario 1 (2010-2021): 1-2% interest rates, 4% fixed income return, 7% overall portfolio return

$1M invested returns $70k/year

Scenario 2 (2022 onward): 5% interest rate, 8% fixed income return, 11% overall portfolio return

$1M invested provides $110k/year

Discrepancy +$40k

**

With $2M invested, the beneficial discrepancy is directly linear, providing an additional $80k/year for Scenario 2. With $10M, it’s an extra $400k/year.

If you’ve properly sown your financial seeds during the good years, prepare to relax and reap the benefits.

#57 crowdedelevatorfartz on 03.16.22 at 7:17 pm

@#46 DON
“Milk in our area went up a full dollar from 4.6 a gallon to 5.6.”

+++

It’s a shame we couldnt burn milk in our cars.
Save a lot f money.

#58 Leftover on 03.16.22 at 7:26 pm

Even a 5% mortgage is still a negative real interest rate, so housing bulls won’t blink. They’re also correct about “supply” being the problem, though they’ve miss-labeled it; it’s not how many houses are getting built (historically quite a few) but how many are getting listed (historically low). I honestly don’t know what will tip the scale to make people more willing to sell.

As for Putin…one word, reparations. Oligarchs are just the start.

#59 Crazy in retirement on 03.16.22 at 7:27 pm

#42 Retirement: TurnerNation on 03.16.22 at 6:28 pm
For so long now, I have been praying that TurnerNation would just disappear from the face of the blog.

Every day, I glance at the comments and usually don’t read the names. Within 5 seconds, I realize that it is a TurnerNation comment and my stomach starts to convulse and I get violently ill!

Please Dog …. make him go away!
//////////////

Maybe you should go see Faron’s doctor. I’m sure he will give you some good meds.

#60 willworkforpickles on 03.16.22 at 7:39 pm

“Blame Covid, cocooning, WFH, Putin, realtors, the Bank of Mom, used Hondas and the wonky supply chain. Oil at a hundred bucks has made it all worse, along with game-changing sanctions because of the Ukraine war.”
……………………………………………………………………

This is precisely what the gullible masses are told by those who are directly to blame for the rising inflation.

Government spending monetized by the Fed/BoC is where the blame solely and primarily belongs. And from where it began, was mismanaged and got out of hand in the first place.

Now as I’ve said many times over here in the last 6 months and even a year or more , the government and the Fed (and BoC) will use any scapegoat excuse to blame rising inflation to hide the fact they are solely responsible for it .

The gullible masses drink the Kool-aid of government BS packaged and tailor made for the mainstream…and the sheep stay blind led on by the blind who themselves fall for their official doublespeak narratives.

Duping the masses allows them and the Fed to hide behind a smokescreen of lies as they go on adding mega $$ to the debt. That in effect is the blameable source where inflation is conceived and born and where more and more of it is created.
The damnable reality is, its all that’s left they can do.

You can say all of this a hundred times even to infinity.
Some get the picture and can see the truth while most keep their heads buried in the sand thinking, it is , its being … and will be all figured out for them.
They won’t discover until its too late that transfixed by the lies they are mere puppets to, they are being left unprepared/unable to cope in the coming calamitous times ahead they are being deceived about ever arriving.

Some take note of what’s really happening while the rest remain locked in a past time warp.

As for interest rates. None of those several or so tiny quarter point raises will cool inflation even if they add on another 2% or more.
The Fed has the duped masses believing they are serious such lame increases can get inflation in check.
Even with a 2% higher rate , inflation is going to rage on.

Historically normalized rates no longer possible with unprecedented national debt levels are what it will take to tame inflation.
Factor in a by-pass of recession/stagflation straight into a depression along with that scenario.

Inflation is here to stay (for now) is what they won’t tell you.

Historically normalized rates, economic calamity and worse will come after the world outside our borders now hell-bent on replacing the US dollar as the world’s reserve currency succeeds in upending the buck. The days of cheap money will be gone for good with it.

China wants Taiwan and wants to distance itself from future US sanctions effects first.

The clock is ticking. Its only a matter of time, just not a great deal more of it.

Oh… I almost forgot
…for those with their heads in the sand who actually read this…
..this message will self destruct within 5 seconds or less.

#61 Mattl on 03.16.22 at 7:44 pm

#54 crowdedelevatorfartz on 03.16.22 at 7:03 pm
@#36 Quintillian
“They won’t and can’t raise rates until inflation becomes a greater political liability than throwing the over extended debtors and homeowners ”

+++
The Bank of Canada and our politicians will be dragged, kicking and screaming by inflation and international money markets…to DEAL with this housing bubble.
The spineless gastropods leading all the political parties will be forced to deal with this.
One way or another.
Sooner than later.

Get out of debt, save a bit of money and be ready to vulture.

———————————————————–

I can recall you and other posting this exact same thing 50-100% appreciation ago. Don’t disagree that there will be a large correction, but the concept of vultching was pretty popular 3-4 years ago here and it would take a 40% haircut to get back to what, 2 years ago?
And rates will be up, incomes down – 40% correction would mean serious recession, I believe you are in the trades, they will get hammered in any market that makes vultching a real thing. And our portfolio’s would get crushed.

Careful what you wish for, you may have not benefited from housing the past 5+ years but most of us benefited from this crazy asset bubble in some manner. Any market that wipes out trillions in home equity is going to be a doozy.

#62 Rose colored glasses on 03.16.22 at 7:48 pm

Reality Check #4

The tube (pipe?) that connects your brain to a colostomy bag has come undone.
Please re-attach.
Thank you.

#63 TurnerNation on 03.16.22 at 7:51 pm

From this comments section we know that the
Deca Millionaires drive only 15 year old Toyota Corollas — with the steel wheels natch.
While the mere Multi Millionaires drive the Teslas.

—-
—-
If only there was nothing to write about!
We are like so close to back to normal…just
something to do with Control Over Our Feeding.
They’re not even hiding it. The Old System was shut down in March 2020.

https://www3.weforum.org/docs/WEF_White_Paper_Roadmap_Protein.pdf
Meat: The Future
A Roadmap for Delivering
21st-Century Protein

Pursuing an intentional ‘Transition Decade’
The aim here is to explore the pursuit of an intentional
“Transition Decade” strategy from 2020–2030, using
evidence-based narratives to shift today’s global system for protein provision to one in line with meeting the SDGs and the Paris Climate Agreement.
The transition of today’s protein delivery system from a largely meat-based focus to a wider range of alternatives will play out in different ways around the world.

#64 I don't know on 03.16.22 at 7:53 pm

Rate hikes are coming in response to higher inflation. No question. However the hikes will be slow and gradual (as they should be). Inflation will still be present, albeit lower.

Yes some real estate will stagnate, such as condos and homes in far flung places. Will this make that SFD home in the GTA that you have been holding cash for more affordable? Nope. Affordability is about to get worse, not better in that domain.

There is going to be a housing crisis, but it’s not going to look like 2008. The coming crisis will see prices continue to relentlessly rise, although at a slower pace.

Essentially when people complain about house prices, they are usually complaining about the SFD in urban areas. That’s what everyone wants and is the gold standard. Demographics, population growth, lack of land, lack of new builds, urbanization, WFH, building costs, permit costs, smaller family unit sizes, cultural preferences for real assets, and government incentives like the PRE/FTHBP are all factors that will still be present even with an uptick in rates.

It’s becoming more important than ever to make sure your cash is converted to assets as soon as you can. Sitting in a pile of quickly depreciating cash is now more of a bad idea than ever (and it was bad before). Make sure you have a b and d portfolio and make sure you buy dirt (the moment you can afford to).

Disagree? Go ask anyone between the ages of 20-40 what they would invest in if they were given 500 grand. It’s a good chance about 85-95% would say “buy a home”.

IDK

#65 The Original Jake on 03.16.22 at 7:59 pm

#6 Apocalypse NOW

You are nutbar.

#66 I don't know on 03.16.22 at 8:01 pm

#54 crowdedelevatorfartz on 03.16.22 at 7:03 pm

-Canada’s housing market is not uniform. Some areas a bubbly, but many are not.

Vulch a SFD in an urban area like the GTA? Get in line. There is an entire generation (or two) of people with down payments growing every day waiting for the slightest hint of a drop in prices to jump in.

This is also the largest demographic in Canada, all entering family formation mode at the same time, most having grown up in detached homes and expecting the same for themselves.

The coming crisis will not be a repeat of the 80’s, nor will it be a repeat of 2008. Quite the opposite, actually.

You buy dirt the moment you can afford to. This will always be the case.

IDK

#67 David Prokop on 03.16.22 at 8:09 pm

Housing market is not slowing down, 3 houses went on the market in my Mississauga neighborhood, all sold within 2 days, all above asking around $2M
Quarter point hike is meaningless

#68 GIC People on 03.16.22 at 8:12 pm

So our RRSPs, TFSAs compounding at 3.75% simple interest, 4.04% effective interest, building $20,200 year and my regular cash GICs earning $35,000 a year simple interest from our GICs don’t look too bad as my CPP, OAS, her OAS pays for all my taxes, bills and still left with $2,000 a year as I am a 65 year old retired 38 years mechanic.

We are debt free, modest house, putting $4,000 a month into savings and now GIC rates will be over 4% soon, 3.0% to 3.10% to 3.20% currently. The wife never worked at a paying job stayed home, saved us money, took care of the house and me and I brought home the money so we can really not worry about running out of money but growing.

#69 Observer on 03.16.22 at 8:15 pm

#31 Nonplussed

Interestingly, they buy less new underwear (turns out that is a key recession indicator).

^^^^^^^^^^^^^^
They buy old underwear instead?

#70 Dogman01 on 03.16.22 at 8:15 pm

#19 Søren Angst on 03.16.22 at 5:01 pm

Some of the legacy media have actual Generals talking about what is happening and has happened (and will happen).

————————————-

I would not put much trust in those media paid consultant “Generals”.

I believed this one back in the day: https://youtu.be/DhWlPo3qxak ; big mistake.

However this Major General, I think has it pretty much nailed:
https://www.youtube.com/watch?v=nzr5pW21a7U

As they say “truth is the first casualty”.
I doubt we will know too much of the big picture until a decade has passed.

“Trying to determine what is going on in the world by reading newspapers is like trying to tell the time by watching the second hand of a clock.” Ben Hecht

#71 AACI Homedog on 03.16.22 at 8:30 pm

Rosie looks like a beautiful happy pup !

#72 Ponzius Pilatus on 03.16.22 at 8:39 pm

I have no beef with Russians or Chinese.
Actually, I was planing a trip to the Baltic and to St. Petersburg before COVID hit.
Planning to go this fall, regardless of the political situation.
Beautiful City, Venice of the North, Hermitage Museum, largest in the world.
Bucket list for sure.

#73 Satori on 03.16.22 at 8:45 pm

#11 Recession on 03.16.22 at 4:30 pm
Elon Musk are prepared for it and have moved to Cash.
…………………………………………………

Elon cashed out ‘stock options’ that were coming due. Simple research prevents a lot of misinformation. Don’t believe everything you hear.
As for GICs… ugh… no thanks Gramps.

#74 DON on 03.16.22 at 8:46 pm

#26 tkid on 03.16.22 at 5:25 pm
Where in hell is the BoC getting an inflation rate of 5.7% from? Rent in my building has gone up 25%. Prices in the grocery stores are up 25%. The prices of everyday items are up 25%.

And now prices are set to skyrocket with the Russian embargo kicking in.

The Fed increasing the rate by .25% is absolutely useless. It’s so little I wonder why they even bothered.

We need another Volker.

****************&
Yup

We should have a geaterfool easter hunt to find products and services that have only increased by say 6%.

If I read my history correctly Mr. Volker was initially against raising interest rates at first but then was forced to. The same people that said inflation was transitory last year are the same ones that have set out the current rate hike path. Things change fast.

‘How inflation works’
https://finmasters.com/how-inflation-works/

They even have an inflation calendar. One used to have to go to the library for this info…now at a click of a button but now a type and click for the most part.

There IS no easy way out of this. Recession is seemingly at the end of every path, just the timeline differs. Are families more in debt now than there were in the 70s? I was a kid don’t no what the talk on the street was, but others on this blog lived it as adults. I would pay attention to their warnings.

#75 theoryAndPractice on 03.16.22 at 8:47 pm

https://www.bankofcanada.ca/2022/03/central-bank-digital-currency-collaboration/

Perhaps programmable…

#76 mike from mtl on 03.16.22 at 8:48 pm

Nobody’s debating that rates are going up somewhat (to meet where they fell off a cliff), just we’ve had over four decades of trend it’s kinda hard rationalise: ‘it’s different this time’.

Sure rates can break the housing bubbles which is a huge contributor to general inflation, but much of this is now out of their hands.

>So many governments still have not got the message and Covid stupidity continues.
>Related to above people have found ways not to ‘work’ – a real recession is needed to bring them clawing back.
>Wage slaves are smartening up and it’s not funny now.
>Oil and general energy are actually volatile, seems we’ve forgotten this.
>Everyone knows, once things get bad rates come crashing down. This is the almost given.

#77 A01 on 03.16.22 at 8:50 pm

JustinFlation….

#78 Ponzius Pilatus on 03.16.22 at 8:51 pm

About inflation:
There is the Macro Inflation that affects Yhe economy as a whole, like mortgage rates, whole sale price, cost of gas etc.
Then there is Micro Inflation, that affects individual consumers according to their spending habits.
If you don’t own a car, gas prices don’t affect you directly, if you don’t eat steak, who cares.
That’s why Ronnie Read made 8 million.
Inflation up or down, he stuck with the plan.

#79 Ponzius Pilatus on 03.16.22 at 8:57 pm

Fake news of the day:
6 year old Ukrainian kid travelled alone 620 miles through snow and ice to “freedom”.
That’s like walking from Vancouver to Calgary, folks.
I can see a dog doing that, though.

#80 Peter in Toronto on 03.16.22 at 9:04 pm

DELETED (Anti-vaccine)

#81 AK on 03.16.22 at 9:18 pm

A global recession will more than likely start after the midterms.

#82 Dana on 03.16.22 at 9:21 pm

Thank you for being a voice of reason, logic and unknowingly a saving grace to so many!

#83 DON on 03.16.22 at 9:26 pm

@31 Nonplused

“The inflation is being caused by the large increase in money/credit that occurred in response to covid. Inflation is always and everywhere a monetary phenomena. Money had been too cheap for too long before covid, but covid gave governments around the world an excuse to really open the taps. They were finally able to push on the rope. How did we not expect inflation? And it was made even worse by paying people not to work. Money injections with not even a semblance of productivity, not even the inefficient government type of productivity. No goods and services of any kind were produced. But the money was there to be spent.”

#84 crowdedelevatorfartz on 03.16.22 at 9:28 pm

@#67 David prokop.
“Quarter point hike is meaningless”

+++

Yep.
10 quarter point hikes are also meaningless.

We need half point hikes every two months to CRUSH this housing market

#85 DON on 03.16.22 at 9:32 pm

#64 I don’t know on 03.16.22 at 7:53 pm
Rate hikes are coming in response to higher inflation. No question. However the hikes will be slow and gradual (as they should be). Inflation will still be present, albeit lower.

Yes some real estate will stagnate, such as condos and homes in far flung places. Will this make that SFD home in the GTA that you have been holding cash for more affordable? Nope. Affordability is about to get worse, not better in that domain.

There is going to be a housing crisis, but it’s not going to look like 2008. The coming crisis will see prices continue to relentlessly rise, although at a slower pace.

Essentially when people complain about house prices, they are usually complaining about the SFD in urban areas. That’s what everyone wants and is the gold standard. Demographics, population growth, lack of land, lack of new builds, urbanization, WFH, building costs, permit costs, smaller family unit sizes, cultural preferences for real assets, and government incentives like the PRE/FTHBP are all factors that will still be present even with an uptick in rates.

It’s becoming more important than ever to make sure your cash is converted to assets as soon as you can. Sitting in a pile of quickly depreciating cash is now more of a bad idea than ever (and it was bad before). Make sure you have a b and d portfolio and make sure you buy dirt (the moment you can afford to).

Disagree? Go ask anyone between the ages of 20-40 what they would invest in if they were given 500 grand. It’s a good chance about 85-95% would say “buy a home”.

IDK

*********

Oh..my..God Magnum! Blank [email protected]

Did u and Honest realtor come up with that understanding together?

#86 1917 on 03.16.22 at 9:33 pm

I heard that Doug Ford is planning to gut healthcare, freeze social assistance rates for another twenty years, and hand over billions to the developers who will build more condos and investment properties for the Russian oligarchs and genocidal war dictators across the Old World.

#87 DON on 03.16.22 at 9:40 pm

#57 crowdedelevatorfartz on 03.16.22 at 7:17 pm
@#46 DON
“Milk in our area went up a full dollar from 4.6 a gallon to 5.6.”

+++

It’s a shame we couldnt burn milk in our cars.
Save a lot f money.

*****************

If we could burn milk it would likely be $200 a liter. I would become the DON of milk crime industry. Walking around with a screwdriver and a long straw.

Imagine if there were non drinking water powered cars.

#88 IHCTD9 on 03.16.22 at 10:06 pm

#64 I don’t know on 03.16.22 at 7:53 pm
Rate hikes are coming in response to higher inflation. No question. However the hikes will be slow and gradual (as they should be). Inflation will still be present, albeit lower.

Yes some real estate will stagnate, such as condos and homes in far flung places. Will this make that SFD home in the GTA that you have been holding cash for more affordable? Nope. Affordability is about to get worse, not better in that domain.
—- ——— –

Indeed. GTA/GVRD re will remain stupid long into the future due to huge rental demand on account of massive immigration. As long as M+P landlords feel they’ll get a free house after the rent is paid (and re values at least stay somewhat flat), then the demand will not wane for any stack of sticks and bricks that can be rented out.

Bunnypatch will stagnate. Low end beat houses will still be cheap, nice new houses will stay expensive. The boondocks will be priced in accordance with what the priced-out urban M+P LL’s and downsizing retirees will be willing to pay for the kind of properties they seek to own. That being big, nice, new, and multi-unit.

Rates will play a role in small towns fairly quickly, but will take a while in urban areas. IMHO, places like the gta will need to see 7%+ mortgages before the math starts screaming at the drunken specuvestors. There will be blood in the streets before this time, but only for those who bought post 2020. If rates get there, we go back in time nuking “investors” who bought in 2019, then in ‘18, then ‘17.

BUT – only if rates get there. I hope the Fed keeps cranking, because I have zero faith in the BOC to do what needs to be done otherwise.

#89 Quintilian on 03.16.22 at 10:09 pm

#61 Mattl on 03.16.22 at 7:44 pm

“Careful what you wish for, you may have not benefited from housing the past 5+ years but most of us benefited from this crazy asset bubble in some manner. Any market that wipes out trillions in home equity is going to be a doozy.”

Zero net gain.

The generational wealth transfer from old to young is unfair and unsustainable.
Your unearned and undeserved gain is my generation’s debt.

Basically, you are sucking my life energy as I have to work for what you got while sleeping.

Aside from the fact the current state of affairs is egregious and immoral at a social level, the long-term damage to the financial ecology will be much worse than the phantom “trillions in home equity is going to be a doozy.” To which you refer will get worse the longer it takes to right this wrong.

You must realize at some point; people will rise against the return to feudalism.

#90 red falcon on 03.16.22 at 10:15 pm

To the people who would be sheeple, who always say house prices would go uppa uppa, the only thing that will increase is the debt and debt carrying costs. How do you like them apples?

It always happens, they think one security like housing will be the one and only. Well, the only thing they do is outlive their money based on that half baked approach.

Them bad cats. Them bad. Them.

#91 IHCTD9 on 03.16.22 at 10:31 pm

#36 Quintilian on 03.16.22 at 6:07 pm
Garth:
Seems as if you are relying on the competence, integrity, and a data based decision from our Central Bank to do the right thing going forward.

But I suggest that previous behaviours are indicative of future behaviours.

They won’t and can’t raise rates until inflation becomes a greater political liability than throwing the over extended debtors and homeowners relying on the unearned equity to finance their retirement under the bus.

They don’t want to be caught with a pin in their hand when the bubble bursts.
They can wait for prices to pop the bubble
——-

Isn’t that the 64 million dollar question, eh? Urban blood, the Liberal keep. When it flows, the knives will come out, and the cake eating ends.

Trudeau is losing control of the situation. He ain’t in control of the pin anymore. But he sure packed the black powder during Covid. Too late now, he’s just a spectator. Big grenade, and big damage – but he’s got himself to blame. The US Fed is driving the bus, we elected a goof.

RE will be what it’ll be, but don’t kid yourself: there is no choice. If the BOC does not keep in step with the Fed, then the inflation will never end, and everyone on the planet working for loonies pays the price. That’s as bad as it gets.

#92 Inadequate on 03.16.22 at 10:51 pm

This is music to my ears. A 4%-5% five year mortgage rate is exactly what we need to cure the housing madness.

#93 willworkforpickles on 03.16.22 at 10:52 pm

#85 DON

“Did u and Honest realtor come up with that understanding together?”
……………………………………………………………………………………………………………..

Maybe they’re a stand up act doing the amateur comedy house circuit together.

#94 crowdedelevatorfartz on 03.16.22 at 10:54 pm

@#72 St Ponziesburg
“Actually, I was planing a trip to the Baltic and to St. Petersburg before COVID hit.
Planning to go this fall, regardless of the political situation.”

+++

Be sure to say hi to Count Vlad The Blood Spiller.

#95 crowdedelevatorfartz on 03.16.22 at 10:56 pm

@#89 Quint the Quitter
“Basically, you are sucking my life energy as I have to work for what you got while sleeping.”

+++
Well,
Someone has to pay for all this.
Might as well be YOU!
Moo hoo haa haa haaaaaaa.
:)

#96 Two-thirds on 03.16.22 at 11:05 pm

On the 6 rate increases: will they still take place if a recession appears?

Garth, I know you do not like Rosie’s perma-bear predictions, but here he points to a fact that when gas and food prices have been this high before, 3 out of 4 times a recession ensued:

https://www.msn.com/en-ca/money/topstories/david-rosenberg-food-and-energy-shock-this-severe-has-only-happened-four-times-before-%e2%80%94-three-led-to-recession/ar-AAV7s9w?li=AAggNb9

So, are markets and central banks pricing in a recession already?

With inflation stoked from both rising demand, but imminently and more urgently, SUPPLY constraints on energy and food, is there a plausible scenario where global economies do not tip into a recession?

If this happens, will the Fed and BoC stick to their planned increases, stop, or perhaps even reverse them?

The textbook central bank response to recessions is to drop rates, to stimulate demand, but if supply is choked thanks to the consequences of the war and other supply-chain issues, will they do so?

We will see…

Also, correcting this sentence:

“Covid cost governments about $20 trillion globally and gave Canada a muddah of a deficit to finance”

to:

“Covid cost governments about $20 trillion globally and the Liberal government gave Canada a muddah of a deficit to finance”

Covid did not decide to replace 156% of lost income, or give CERB to unqualified recipients. This was done by prime minister T2’s government, 100%.

Let us call a spade a spade.

#97 Mattl on 03.16.22 at 11:11 pm

89 – what are you rambling about? I likely am your generation and only half my NW is in real estate. Own one family home and have never had a mortgage at more then 2x income.

If you are having a hard time making money in this crazy employment market thats on you junior. I have a team of mostly millennials making the equivalent of 175k CAD, all work from home.

Be better.

#98 Mattl on 03.16.22 at 11:19 pm

A few more things:

That transfer of wealth will transfer back, or get injected into the economy. Boomers aren’t going to pass their wealth down to other boomers, hopefully I don’t have to explain how ageing works.

And people always get left behind. Based on your posts you are one of your generations losers. Talent matters and I suspect you lack any.

Because anyone with real talent has grabbed their share of the trillions injected into the economy the past 5 years. These are the good times, like I said, careful what you wish for, if you are struggling now I doubt a recession is going to be the catalyst for you to get yours.

#99 Balmuto on 03.16.22 at 11:28 pm

Common sense would dictate that higher mortgage rates will prick the housing market bubble as financing costs go up.

But something tells me that won’t happen. Instead, home prices will keep getting bid up because prices are going up generally. Inflation will be the new justification.

Until one day, after all the housing bears have capitulated, for no apparent reason the market will suddenly go bidless.

Then look out below.

#100 IHCTD9 on 03.16.22 at 11:30 pm

#89 Quintilian on 03.16.22 at 10:09 pm

The generational wealth transfer from old to young is unfair and unsustainable.
Your unearned and undeserved gain is my generation’s debt.

Basically, you are sucking my life energy as I have to work for what you got while sleeping.
—— –

I can’t cross the street without treading a rainbow. I deal with it.

You’ll never own a house. You deal with it.

I know the ups and downs of who I vote for.

You?

No crybabies.

#101 DON on 03.16.22 at 11:31 pm

Careful what you wish for.

I didn’t know you can wish a coming reality away.

The youth in the US experienced a housing downturn but not the young ones in Canada. Two different perspectives for sure.

If the government gets into debt they can usher in taxes. Like the gov that takes over from Trudeau.

If you can’t handle your debt payments the gov doesn’t care. They expect you to be an adult and be responsible for your own actions. Not every home owner is over indebted but it only takes a percentage to start the slide. But it can never happen in Canada cause we are well special in our thinking. House prices are also a two edge sword. Who will feed the fat bastard of a beast? It needs constant food? Rents are rising for full sized house so people are renting basements and buying old RVs And travel trailers. All over BC…an interior regional district said a person couldn’t live full time in a travel trailer on her Dad’s private land in a rural setting.

#102 john on 03.16.22 at 11:42 pm

Rates will go up all this year. Then we head back down into 2023 because the Recession, at it’s beginning right now, will be very clearly defined in the data later this year. Asset inflation does not cause Recessions, price inflation does. That’s what we have right now. Buckle up!

#103 IHCTD9 on 03.16.22 at 11:49 pm

#86 1917 on 03.16.22 at 9:33 pm
I heard that Doug Ford is planning to gut healthcare, freeze social assistance rates for another twenty years, and hand over billions to the developers who will build more condos and investment properties for the Russian oligarchs and genocidal war dictators across the Old World.
———

Incorrect. He is actually planning to blow up Ontario. I read on the Babylon Bee that he just purchased 1000 Soviet-era nukes from Putin’s stash of spare warheads. With these, he will blow up Ontario. Yes, the whole province. This will touch off a massive condo construction boom, and create a massive job market as the thoroughly irradiated builders will only last a few weeks before turning into fallout zombies, thus requiring a whole new workforce every single month for a thousand years. The subsequent nuclear winter will also create a huge demand for heating fuels and agricultural products thereby turbocharging the entire Canadian economy.

#104 DON on 03.17.22 at 12:03 am

@Two Thirds

This is Rosenberg from May 11, 2021. He was on the transitory band wagon with the Feds et al. A grain of salt..

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.bnnbloomberg.ca/rosenberg-inflation-likely-transitory-gargantuan-debt-will-keep-a-lid-on-rates-1.1602418.amp.html&ved=2ahUKEwjxo838oMz2AhWpGDQIHU-2Bm0QFnoECAQQAQ&usg=AOvVaw3UsFmYC5btotmpKXUNIOMo

#105 yvr_lurker on 03.17.22 at 12:17 am

I have no beef with Russians or Chinese.
Actually, I was planing a trip to the Baltic and to St. Petersburg before COVID hit.
Planning to go this fall, regardless of the political situation.
Beautiful City, Venice of the North, Hermitage Museum, largest in the world.
Bucket list for sure.
———-
I don’t think Aeroflot will be taking you there any time soon. Hope that they ban ALL nato carriers from going to Russia. Has nothing to do with the Russian people who are held hostage to their nutbar Gov’t, but can’t see see how it is not the time to be planning to go to Russia any time soon? For me, I have crossed Russia off my “wish” list until Putin and his entourage are gone.

#106 tc-contra on 03.17.22 at 12:22 am

DELETED

#107 The West on 03.17.22 at 12:33 am

Anybody else following the last gasp of the USD’s reserve currency status?

#108 DON on 03.17.22 at 12:45 am

Dogs languish in some shelters as pandemic winds down, says Surrey shelter
Canada –
British Columbia
|
2 Hours Ago
|cbc bv news

#109 Great Bear on 03.17.22 at 12:45 am

Addendum. Regarding the fake climate hysteria capitalists I mentioned including our very own Marc Carney attempting to push carbon products with no climate benefit. Sickening.

http://www.bnnbloomberg.ca/carney-s-bid-to-boost-carbon-market-scaled-back-amid-controversy-1.1738509

#110 Dr V on 03.17.22 at 1:27 am

68 People

OMG 2 of you live on less than $30k a year? I thought I
was cheap.

But you still get kudos.

Yes your GICs may earn 1-1.5% more this time next year.

Dont forget to live a little.

#111 Dr V on 03.17.22 at 1:29 am

70 D-man01

“I believed this one back in the day:
https://youtu.be/DhWlPo3qxak ; big mistake.”
————————————————-

It wasnt that I did not believe him. He just never convinced me.

#112 Dr V on 03.17.22 at 1:38 am

“….along with a long period of healing in the Ukraine plus years to re-integrate the Russian economy….”

My question is whether it will ever be re-integrated. Cant see it happening with Putin in charge. We might give back a few yachts, but how can this regime ever be trusted again?

“…..reach a settlement (no NATO, avowed neutrality,
territorial swap)…..”

I think these are all possible. If we go back several months, an agreement to this effect would not have even gotten a GF post.

#113 DON on 03.17.22 at 2:18 am

https://www.cbc.ca/news/canada/calgary/calgary-inflation-cpi-gasoline-groceries-prices-1.6387525

#114 Joe Lalonde on 03.17.22 at 4:02 am

Garth,

You want to see lack of understanding on industry is our politicians.

Giving away billions of dollars to companies and institutions to build they’re crap.

So, where’s the materials coming from?
And how are they getting it to these new contacts he just signed?
China is closed down right now and it’s virtually illegal to get materials from our own country.

#115 undee the radar on 03.17.22 at 6:17 am

Let’s see the duration of the sugar diet the fed prescribes. Obese patient needs to lose a lot.

My transition out of purpose built rentals has begun with an offering to developers. Took me 5 years to get to the sale process.

#116 Constipated on 03.17.22 at 8:10 am

Frozen blueberries went from $11.99 to $14.99 at my grocery store today.

Guess I have to live with constipation for a few days and let the taxpayer pay for my hemorroid removal treatment!

Thanks Galen Weston!

#117 BillyBob on 03.17.22 at 8:16 am

Lazy disinterest battled with curiosity and the latter narrowly won – baffled why I got the badge of honour of being deleted yesterday? Was it for linking to the CBC? lol

I do think it was quite brave for the PM’s of Slovenia, Poland and Czech Republic to travel in person to Kyiv. Don’t know how smart it was from a safety point of view, but no doubt a threat assessment was done and the strength of such a gesture is surely related to the risk involved. My contrast to Trudeau’s visit to Latvia wasn’t flattering but didn’t realize it was controversial to the point of being unpublishable.

C’est un mystère.

Inflation really is bad. My natural gas bill could double, adding another 60 bucks to our monthly costs lol.

#118 Manowar on 03.17.22 at 8:37 am

@ #42 retirement

TurnerNation is a greater fool blog treasure the fact that you are a latte sipping beta to mentally weak to even hear information that does not fit the mainstream narrative says more about you….

#119 crowdedelevatorfartz on 03.17.22 at 8:41 am

@#107 The East
“Anybody else following the last gasp of the USD’s reserve currency status?”

+++

Bwahahaha
And the world will do what?
Embrace the Russian Ruble?
The communist Chinese Renminbi?

Evergrande ring a bell?
The Chinese govt is busy bracing up their faltering real estate bond market. Hundreds of billions are due this month and only the govt has the cash to stave off the creditors.
The greenback will be around for a while yet.

Speaking of indebted currency.
I wonder when Trudeau will print a Rainbow denomination…. a C$3 bill would be a nice touch…for a liter of gas.
I guess that will let us know there’s an election looming.

#120 Observer on 03.17.22 at 10:07 am

#89 Quintilian on 03.16.22 at 10:09 pm

The generational wealth transfer from old to young is unfair and unsustainable.
Your unearned and undeserved gain is my generation’s debt.

Basically, you are sucking my life energy as I have to work for what you got while sleeping.

^^^^^^^^^^^^^

It seems you are upset with an entire generation including those who only one house – the house they live in.

What about younger people (say, under 50) who “invest” or more accurately “speculate” in real estate, effectively driving prices out of your reach? Is their “unearned and undeserved gain [your] generation’s debt” as well, or is it just the oldies you are po’d with?

#121 The West on 03.17.22 at 10:09 am

#119 crowdedelevatorfartz

The world will revert back to a pre-WWII order. It’s not far of a stretch.

You can’t go arbitrarily confiscating people’s assets and wealth (though I vehemently stand opposed to Russia’s bloodbath in the Ukraine) and claim that holdings in USD are free and open to the world. Washington has become lawless and corrupted. Not to mention, terribly indebted.

Maybe Trudeau should just hand out digital ration coupons for gasoline?

#122 Sail Away on 03.17.22 at 10:56 am

#121 The West on 03.17.22 at 10:09 am
#119 crowdedelevatorfartz

You can’t go arbitrarily confiscating people’s assets and wealth (though I vehemently stand opposed to Russia’s bloodbath in the Ukraine) and claim that holdings in USD are free and open to the world.

———-

Sure you can. Just classify any and all Russians as personas non grata and take all their stuff, boo their (previously ours as well) sports heroes when they play in Calgary, create a media narrative where not just the actions of the government over which they have absolutely no control are abominable, but the people themselves.

Russians bad. Take their stuff. Righteous are we.

Lots of historical examples of this winning strategy. Spanish Inquisition, for one, created some very wealthy, and righteous, don’t forget righteous, people. The German high command was also rolling in wealth from confiscated artwork to golden fillings from the ‘rats’. When profitable Venezeulan corporations were publicly labelled oppressive profit machines, there was joyful jubilation as their assets were confiscated.

This always ends well. The best, most noble, human behaviour on display.

#123 Mehling on 03.17.22 at 11:09 am

Imagine what this would do to heavily mortgaged Canadians, and real estate prices – as Garth mentions.

Former U.S. Treasury secretary Larry Summers predicts that U.S. short-term rates – which strongly influence Canadian rates – may have to rise to 5 per cent or more to control inflation.

That’s an “almost unimaginable” prospect, he wrote in Tuesday’s Washington Post.

#124 Ponzius Pilatus on 03.17.22 at 11:09 am

#105 yvr_lurker on 03.17.22 at 12:17 am
I have no beef with Russians or Chinese.
Actually, I was planing a trip to the Baltic and to St. Petersburg before COVID hit.
Planning to go this fall, regardless of the political situation.
Beautiful City, Venice of the North, Hermitage Museum, largest in the world.
Bucket list for sure.
———-
I don’t think Aeroflot will be taking you there any time soon. Hope that they ban ALL nato carriers from going to Russia. Has nothing to do with the Russian people who are held hostage to their nutbar Gov’t, but can’t see see how it is not the time to be planning to go to Russia any time soon? For me, I have crossed Russia off my “wish” list until Putin and his entourage are gone.
—————————
It will be part of a Baltic tour, to some of the scenic former USSR vassal states.
Also Sweden and Finland.
Usually I make one trip overseas per year.
So this one will be a longer one.
Some catching up to do.
Hate the leaders, not the people.

#125 Ponzius Pilatus on 03.17.22 at 11:15 am

116 Constipated on 03.17.22 at 8:10 am
Frozen blueberries went from $11.99 to $14.99 at my grocery store today.

Guess I have to live with constipation for a few days and let the taxpayer pay for my hemorroid removal treatment!

Thanks Galen Weston!
————————
Organic Oatmeal and Chia Seeds is a good deal at Costco.
A good sized bowl in the morning, or even at night.
And say good bye to constipation.

#126 Bdwy on 03.17.22 at 11:39 am

#107 The West on 03.17.22 at 12:33 am

Anybody else following the last gasp of the USD’s reserve currency status
……..
Sure. I’ve aleady switched my stack into Chinese yuan and roubles. So what if it keeps plummetung i get to screw over usa and trump. /s

#127 Quintilian on 03.17.22 at 11:41 am

#120 Observer on 03.17.22 at 10:07 am

“Is their “unearned and undeserved gain [your] generation’s debt” as well, or is it just the oldies you are po’d with?”

Let’s just look at “unearned and undeserved gain” of those who “invest” or more accurately “speculate” in real estate” as you state.

The speculators actively engage in the market, they take the risk, and sometimes they actually improve and increase the housing stock, so their gains are not while they sleep.

Furthermore, when the affordability wall can no longer be scaled with negative interest rates and the bottom falls out, they will be the first to exist, thereby facilitating the stampede out of the exit.

#128 Dharma Bum on 03.17.22 at 11:43 am

#17 PL

Garth, what do you think of building a house right now? Will building costs also fall as interest rates rise or are higher construction costs here to stay?
——————————————————————————————————

Construction costs are comprised of the wages of the trades (carpentry, masonry, heavy equipment operators, electricians, plumbers, HVAC technicians, drywallers, roofers, etc.). Those wages are increasing.
Then, there are the building material costs (lumber, engineered lumber, plywood, OSB, insulation, concrete, gravel, piping, steel, windows, drywall, bricks, stones, siding, paint, hardware, kitchen cabinetry, plumbing fixtures, electrical fixtures, finishing and decorative materials, furniture, appliances, landscaping, etc.). These are all subject to inflationary price pressures, so up they go!
If you currently own a lot for which you can get a building permit, then that’s your biggest benefit. At least you know your locked in cost of land.
You now have some degree of control over the cost of erecting the structure and completing the mechanical and finishing work. You can decide what sort of design you want, and what size of house. Then you can compile a bill of materials for which you could possibly lock in pricing for if you commit to a supplier/wholesaler for the complete package.
Pinning down the trades for their quotes can be a bit trickier, but you can get an idea of the cost within spitting distance.
Unless you have any previous building experience, your best bet might be to go with a reputable general contractor that specializes in residential construction, and get them to provide you with a firm turnkey quotation with a guaranteed timeframe for completion.
The construction costs will increase as time goes by, but hopefully your land was purchased for a bargain price before the madness took hold.
One more thing: If you do proceed, have patience, and appreciate the process. Have fun witnessing a hole in the ground become a beautiful architectural structure, and enjoy shopping for appliances, furniture, flooring, fixtures, kitchens, bathrooms, and other design related Knick-Knacks.
Once it’s built and finished, it’s just another place to live in.
The enjoyment is in the process.
Except for the endless invoices that pour in.

#129 Barb on 03.17.22 at 11:48 am

#101 DON
“All over BC…an interior regional district said a person couldn’t live full time in a travel trailer on her Dad’s private land in a rural setting.”

——————————————-
About 10 years ago, my North Okanagan community’s mayor was quoted in the newspaper as saying “You can still paint your house without a permit.”

Looking back over our 45 years here, Official Community Plans/Land Use/Zoning created brutal restrictions. Guessing that was a project for an anonymous sociology prof.

Insidious control.
Bureaucratic “creep” is a verb as well as a noun.

#130 Linda on 03.17.22 at 11:55 am

#122 ‘Sail’ – When mentioning arbitrary confiscation of people’s assets and wealth lets not forget Canada’s own record in that regard. The Acadians were driven out & their very lucrative, highly productive lands seized by the powers that be; their crime was twofold. First they had what others wanted without doing any of the work to create it; second they were suspected of being Yankee sympathizers during the War of 1812. A century or so later, Canadians of Japanese descent were interred in camps & their assets seized by the Canadian government; they too were suspected of being sympathetic to Japan during the World War. As for land dealings with Indigenous people, too many examples to mention.

#131 I don't know on 03.17.22 at 11:56 am

#121 The West on 03.17.22 at 10:09 am

-It’s actually a huge stretch. Reverting back to the pre ww2 order would be to ignore the long peace that has existed since 1945, and the fact it was the most prosperious in human history. Almost everyone has an interest in maintaining it. The several small scale conflicts that occurred since also pale in size and scope to what occurred before. This is why there is such unity on this issue, and why the USD is not going anywhere for a long time.

The sanctions are a desperate attempt to exert pressure without resorting to violence. Everyone can see there is enough bloodshed in this pointless war already.

IDK

#132 DON on 03.17.22 at 12:01 pm

https://www.cnbc.com/2022/03/16/mortgage-demand-falls-as-interest-rates-surge-to-multiyear-highs.html

In the US.

#133 Dr V on 03.17.22 at 12:11 pm

101 DON

“…an interior regional district said a person couldn’t live full time in a travel trailer on her Dad’s private land in a rural setting.”
———————————————

This is not new Don. I know of other RDs that have bylaws prohibiting use of RVs as a “residence”. Typically it may be permitted during house construction on the parcel. Actually heard of RDs trying to prohibit “camping” on larger forest parcels as well. Not sure how that turned out.

Typical local government response though. Get 1 or 2 bad cases and they want to throw the baby out with the bathwater.

#134 Philco on 03.17.22 at 12:42 pm

#65 The Original Jake on 03.16.22 at 7:59 pm
#6 Apocalypse NOW

You are nutbar.
=============
With extra nuts.

#135 Sail Away on 03.17.22 at 12:48 pm

Have no doubt these robots are equipped with weapons and cameras in the black-ops lab next door:

https://youtu.be/-BqNl3AtPVw

#136 Philco on 03.17.22 at 12:57 pm

#48 pPrasseur on 03.16.22 at 6:53 pm
Elon Musk started selling stocks in November last year.

Tesla is possibly the most overvalued stock in the world, in this case selling to bag a profit is a total no brainer.
=====================
I mention that way back and at near $1200 I said run.

#137 Sail Away on 03.17.22 at 1:01 pm

@Dharma Bum

Re: new house construction

Good post. I agree. It’s much more work retrofitting the machine gun turret and booby traps into an existing house than building new. The efficiency just isn’t there.
And so hard to match colour.

#138 Faron on 03.17.22 at 1:04 pm

#121 The West and #122 Sail Away

Can you please list the assets that the US or any other NATO member have permanently seized in the Russian conflict? Especially note anything similar to how Putin recently confiscated 500 previously leased airliners. Thanks!

#139 Sail Away on 03.17.22 at 1:10 pm

#130 Linda on 03.17.22 at 11:55 am

#122 ‘Sail’ – When mentioning arbitrary confiscation of people’s assets and wealth lets not forget Canada’s own record in that regard. The Acadians were driven out & their very lucrative, highly productive lands seized by the powers that be; their crime was twofold. First they had what others wanted without doing any of the work to create it; second they were suspected of being Yankee sympathizers during the War of 1812. A century or so later, Canadians of Japanese descent were interred in camps & their assets seized by the Canadian government; they too were suspected of being sympathetic to Japan during the World War. As for land dealings with Indigenous people, too many examples to mention.

——-

You bet. No end of examples. Much historical precedent.

Hopefully, not all the Japanese-Canadians were interred. :-)

#140 Sail Away on 03.17.22 at 1:30 pm

#138 Faron on 03.17.22 at 1:04 pm
#121 The West and #122 Sail Away

Can you please list the assets that the US or any other NATO member have permanently seized in the Russian conflict? Especially note anything similar to how Putin recently confiscated 500 previously leased airliners. Thanks!

——-

Like this, you mean? Unless France and Italy are no longer NATO members? Not sure about your ‘permanently’ qualifier…

https://www.cnbc.com/2022/03/03/here-are-the-russian-oligarch-yachts-being-seized-as-sanctions-take-effect.html

Also, the whataboutism is unnecessary. Such unsophisticated blunt object debate techniques have no place in an erudite comment section such as this.

Suggest self-flagellation as penance.

#141 DON on 03.17.22 at 3:14 pm

#133 Dr V on 03.17.22 at 12:11 pm
101 DON

“…an interior regional district said a person couldn’t live full time in a travel trailer on her Dad’s private land in a rural setting.”
———————————————

This is not new Don. I know of other RDs that have bylaws prohibiting use of RVs as a “residence”. Typically it may be permitted during house construction on the parcel. Actually heard of RDs trying to prohibit “camping” on larger forest parcels as well. Not sure how that turned out.

Typical local government response though. Get 1 or 2 bad cases and they want to throw the baby out with the bathwater.

………..

Yup i know it’s not new. example from last year that madecthe news. Area F on Vancouver Island full od camper user etc. The regional district slowly bringing in the bylaw enforcement. And the campers aren’t in the process of building houses it is permanent living.

cheers.

#142 Thomas on 03.17.22 at 6:23 pm

GIC People, I am in the same camp as you. I have my $2,070 a month RRIF payment and my laddered GIC’s, TFSA’s making me my $16,000 a year 3-7 year maturities with some coming due this year. I have my CPP, OAS $22,000 a year and I am debt free, own a medium size house in Oshawa. I lost my wife last year but I still got my health and live quite well with my income in retirement.

#143 Sally Mae on 03.17.22 at 7:41 pm

DR V, they GIC people live on $30,000 maybe cheap but the Bank of Canada, Canadian government, provincial governments, banks, financial institutions in Canada are cheap for years paying at least 2% to 3% a year less interest than they used to pay above inflation, taxes. They were supposed to be paying 4% to 5% GIC rates for a least the last 10 years and did not. There were short moments of 3.0% to 3.75% GIC rates 4-7 year terms but lasted only months not years. Kudos to anyone that can live off GIC, bond interest rates of 3%+ as they really found a way to make it work for them.

#144 David Gerald Paquette on 03.17.22 at 10:38 pm

I did of lot of walking. I would get soaked a lot. Being raised in the north shore of Vancouver can do that to you.

I moved to Calgary for work – mighty Imperial Oil. It was not a bad trade and I staid. Alberta is dry. My father would call me when he saw the whether reports – so how do you like those cold winter in the parries?

When I moved to Alberta in July, it was nice. I was ill prepared for winter. I nearly died my first winter, I had no idea how cold it could get. Then I bought the right gear though it took time to get it right. Minus 35 (c) is not kind but it did last long. So I could continue walking.

Coyotes have shown in the park behind me. They yap mighty and I out of cats. I am not going out there without a gun.