Bank of Canada Rates...from 1935 to Present

[BruceW]

With everything that's been going on in both the Cdn and world economy,  so I looked up the historic bank of Canada interest rate.

It's interesting to note that from 1935 to 1943 it was fixed at, I believe 2.25%, and now of course, it's at what, 1%?

http://www.bcrealtor.com/d_bkcan.htm

Now, I'm no, "financial expert", like, say the guys who sell mutual funds.      

I know what that suggests to me, what do you think?

[Weste]

I think it means they have learned how to adjust interest rates to help maintain some health to an ecionomy in trying times.  I am no expert but I hope someone learned something from the biggest economic disaster that occurred in the 30's.

I am confused as to what you think it means.

[Tuc]

I like the idea of low rates for the young families trying to enter the housing market but for us ole foggies, low rates mean **** all for our investments.

[BruceW]

Last night we ate at a long established restaurant in the city, one that has been around since I was a little kid.  While eating I overheard an employee tell a delivery guy that he'd been there for over 20 years and had never seen it this slow, and how it's been like that for over a year.

2 days ago I was talking to a friend who said he's shutting his doors, getting his class 3 and going driving.........customers have just dropped off the the point it's not viable.  This is not a young man, nor an, "iffy" business.

About a week ago I was talking to a girl in a long established hardware store who confided in me she's worried about her job since business has been dead for over a year now.

Next time you're in the city, (any city), make closer note of all the empty storefronts.  Another thing you'll notice is how 5 yrs ago every second vehicle was a private business of some sort and lot's of new vehicles.  Not so many independant business flashing logo's now, and same could be said for new vehicles.

Then I heard on the news about the Bank of Canada rate being around 1%.  Or, in other words, 1/2 of what the interest rate was during the 30's yet, tumbleweeds slowly roll past the loan officers door in the banks.

Meanwhile, I hear an ad on the radio about mutual funds, tax time, etc.  Apparently people are still buying them despite the massive drops in value and low volume of cash flowing through the economy.

I hear of lot's of people running down to places like FL and AZ to buy houses since what was worth 200G 3 yrs ago is selling for 60,000 now.

I'm thinking the middle class has ceased to exist.  Either that, or the middle class has completely stopped all but essential spending to get their debt in order again.  If that's the case then you'd think things would slowly improve???

I'm not sure what's going to happen, but IMO we're in for some massive changes.  We are living in strange times.

Maybe I've got all wrong;  ice cream and rainbows are just around the corner.  That's why I was wondering what you guys thought of the interest rate and it's meaning for the economy.

What worries me more than anything is knowing what pulled the world economy out of the 30's depression.

[walleyes]

Inflation !!! there just isn't that much excess capital kicking around for people to spend on every whim. Personely I think its a damn good lesson and one that has been a long time coming.. And just wait its only going to get worse. The interest rates will be coming up,, very up,, then the real crap is going to hit.. The days of having the 400g house with the 2 new 50g vehichles, 50g RV, 50g boat, every toys known to man is going to be over. People are going to have to learn to live a differant life style.. More like the ones our fathers and for most now a days like there grand parents lived. They were happy to just have a house over their head, a job and food on the table. Maybe take a week off and head to the lake in the tent for a summer vacation once a year.. Yup its going to be interesting seeing all these people try and cope. But like I said its been a while coming..

[Weste]

Not sure what a few of you are referring to but my business  has been very brisk over the last year and we have never been busier than we are right now.  The projections for the next 12 to 24 months is as healthy as they have ever been. Although I agree that the economy may be fragile, and it is healthy to maintain a lifestyle within our respective budgets, doom and gloom predictions arent good for anything.  I think people are just being a little more frugal and responsible. Basic needs spending in ALberta has been growing as our economy continues to grow.

[Tuc]

Weste, I agree. I don't think there is much of a doom and gloom outlook for Alberta. Our province still leads the way followed by NFLD and Sask.

[walleyes]

Yes boys you are right Alberta may weather the storm better than some but better is still going to be tough. Hell kids can't buy a house now whats it going to be like in 5 - 10 years. Its not doom and gloom its reality, its inflation its whats going to happen as oil starts going higher and higher up over $200/Bbl, and gasoline will be $4.00/ltr  that loaf of bread will be $8.00 so on and so on. We are falling behind now on wages it all looks good but in the end there is less and less excess capital. The people that hunker down and are prepared are going to weather it much better. The people that continue to walk around with their heads in the clouds thinking all is well and think the politicians will figure it out are wrong. Its the politicians that ran all these countries beyond broke, its the head in the clouds bankers and stock houses that still think they can spend their way out of debt that are running it even deeper..

This isn't doom and gloom  boys,, wake up look around you look beyond Nisku and Calgary and Fort mac,, look at the world.. The U.S. has already fell way back it will happen here and it is happening here just at a slower pace. Go to B.C. for a vacation talk to the locals,, they  are already there.

People in this country are in for a big ass slap in the face..

[walleyes]

Here is a long read but just one of many that are out there for people who want to be aware of what is going on. if you choose to go through life on a whim,, your choice,, if you want to be aware and alert some better start paying attention.. This refers to the U.S. economy but unforetunetly canada an the world are all in this together..

With the precious metals sector having been in the grip of another bankster-induced “silly season”, I was very unsure about how the market would “react” to the latest shenanigans of B.S. Bernanke. Put another way, I was uncertain as to whether the actual fundamentals would be allowed to assert themselves – even to a small degree.

In fact that is precisely what we have seen: a “small” reaction to yet more monetary insanity. As I have written previously, the U.S.’s 0% interest rates are the economic equivalent of hooking someone up to a defibrillator. Shock someone continuously with a defibrillator for 3+ years, and it is safe to say that we will not end up with a “patient in recovery” – but merely with a badly-charred corpse.

Thus it is with the U.S. economy. Three-plus years of continuous, maximum stimulus has produced nothing except a steady stream of ever more-absurd statistical lies, attempting to delude the sheep into believing this badly-charred corpse is “recovering”. Are the Wall Street market-pumpers who reside at the Federal Reserve ready to admit defeat?

Hardly. Instead these banker voodoo-shamans continue to artificially animate the zombie-banks more commonly known as “Wall Street”: their primary raison d’etre. B.S. Bernanke has announced that 0% interest rates – i.e. the economic defibrillator – will remain cranked up to its maximum setting for at least three more years. As these morally- and intellectually-bankrupt servants of the Financial Oligarchs recklessly cater exclusively to the whims of their masters, they remain either oblivious or simply indifferent to the economic carnage they are inflicting on the U.S. economy, and the global economy as a whole.

Sadly, that carnage has just barely begun to manifest itself. The fraud-saturated graveyard that is the U.S. housing market is yet another place where throngs of “zombies” reside. In this case it is millions of zombie-mortgages: already underwater, and with U.S. housing prices destined to keep falling for as far as one can see into the future. Here the walking-dead can only be ‘resurrected’ through massive principal-reductions. However, since that would push the Wall Street zombies much closer to their own annihilation, such relief is denied to the holders of the zombie-mortgages.

Savers are also being slaughtered with apparent zeal by the Federal Reserve shamans. As the U.S. population ages, and becomes more dependent on personal savings to fuel this consumer economy, the massive wealth-drain being inflicted on this ever-growing demographic through massively negative “real” interest rates ensures there is no future for this zombie economy – other than burial, followed by (eventual) re-birth.

Stripped of their savings, the greying U.S. population has no recourse but to fall back on (supposed) entitlement programs: the U.S. “social safety-net”. Pathetically, the American population remains almost entirely oblivious to the fact that this safety-net is entirely illusory.

The Social Security system is supposed to be “backed” by what is hilariously described as a “trust fund”. It has been gutted by successive regimes of the two-party dictatorship: one-party steals, while the other accomplice remains silent.

The situation is even worse with respect to the health-care system which purportedly safeguards the health of Americans. It was never fully-funded. Now, as the $trillions in “unfunded liabilities” become $10’s of trillions, and now somewhere approaching $100 trillion, all that remains to be decided is when this benefits-bubble “pops” (and then vanishes completely).

Equally, the Federal Reserve shamans (and the Wall Street Vampires) recklessly inflict their economic mayhem on the global economy. Relentless Fed money-printing ignites one commodity-rally after another. Concurrently, the extreme shorting by Wall Street stomps these commodity-markets again and again – trying to hide the hyperinflation suicide rapidly approaching.

As I have explained in many previous commentaries, such predatory shorting has catastrophic long-term consequences: the destruction of inventories – across the entire global commodities complex. While debauched currencies provide ever-lower real income to commodity-producers, Wall Street’s price –suppression depresses these revenues much further. The inevitable result is that artificially low prices stimulate demand while simultaneously drastically curtailing supply.

The only possible long-term consequence is inventory default in one commodity market after another, followed immediately by dizzying price-explosions – and chaotic rioting, as nearly non-existent supplies and sky-high prices inflict global economic hardship which few can yet envisage in their worst nightmares.

It is with this context in mind that we can now analyze B.S. Bernanke and his no-win conundrum. With interest rates already permanently set to zero, the principal “tool” of these monetary assassins is already permanently lost to them. This leaves Bernanke and his junior-shamans with only two other devices left to them to cause further economic chaos: one real, one merely virtual.

As has been iterated by many other commentators, the Fed now can only “move markets” (brute-force style) through announcing yet more totally unprecedented and extravagant money-printing. However, with the Fed shamans having already over-used (i.e. abused) this device, the specter of hyperinflation now hovers above the heads of these witch-doctors like the Sword of Damocles.

How terrified are B.S. Bernanke and his brethren of this dire blade? Frightened enough to have reverted to secretly printing-up their $trillions – or as I described previously, the U.S. economy is now being “funded” by (fraudulently) counterfeited U.S. dollars. And so we arrive at the Fed’s latest announcement.

With real implements of mass (financial) destruction now denied to them, B.S. Bernanke and his henchmen are reduced to “jawboning”: the last refuge of failed monetary policy. Thus we have a promise of three more years of 0% economic suicide. All the energy left in this decaying corpse goes into creating the illusion of life – leaving no time/effort/energy being directed into a future economic re-birth (after the Wall Street Vampires have reduced the U.S. economy to rubble).

And so we see the response of not only precious metals, but virtually the entire spectrum of commodities. Permanently gone is any more (absurd) pretense of an “exit strategy” for the Federal Reserve. With B.S. Bernanke forced to abandon that myth, yet another small segment of market participants have now permanently removed their blinders and now see the Fed shamans for what they really are…or at least nearly so.

Remarkably, even many of the more astute commentators continue to ‘soil’ their otherwise useful analyses by diluting them with “official statistics” – i.e. the legion of numerical fantasies which the U.S. government (and other Western regimes) have inflicted upon us. Viewing Bernanke’s latest announcement through the prism of a (supposed) inflation-rate of under 5% - while in the real world it rages in double-digits – inevitably means that the reaction we have seen to his latest jawboning can only be described as “extremely muted”.

Thus we see the no-win conundrum of these suicidal banksters crystallizing. Cease “shocking” the U.S. economy with 0% interest rates and the entire, fraudulent spectrum of Wall Street Ponzi-schemes come crashing down. Continue this monetary madness, and the U.S. economy chars – as the sadistic Bernanke ‘juices’ this lifeless corpse again and again.

Similarly, if the Wall Street Vampires ease up on their predatory shorting, the true economic fundamentals (i.e. massive upward pressure on prices) will materialize and real “inflation” will begin to assert itself – via a barrage of triple-digit increases in prices. In turn, this becomes the likely trigger of a hyperinflation spiral. The Sword of Damocles comes whistling downward, simultaneously beheading Fed shaman and Wall Street Vampire alike – as hyperinflation takes their empire of paper-fraud to zero.

Conversely, if the Vampires continue their assaults on commodities, upward price pressures only intensify from relentless inventory destruction. The restraints holding back the Sword of Damocles become ever more-dangerously strained.

There is nothing deeper in this analysis than simple cause-and-effect. All Ponzi-schemes are doomed to fail from their inception; all frauds destined to be exposed. The (serial) economic rape perpetrated by the banksters down through history fortunately has a limited “shelf life”. We now see the end of this era of bankster paper-fraud approaching, just as all previous incarnations have self-destructed before this.

B.S. Bernanke can huff-and-puff with his jawboning until he is literally blue in the face. His fate (and that of his Masters) is sealed, like some gruesome Greek tragedy. The Sword of Damocles hovers, its blade sharp, its aim true