Quote:
Originally Posted by Hehe
Now, if BoC drops the rate or maintain it when the Fed goes up, the only way it would make sense for Canadian is if their wages are increased by the same margin. Else, the housing market will collapse anyway because CAD will drop far too much, foreign investors will leave while new investors won't come until market stabilizes.
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Not sure if this argument holds. Dropping rates (decreasing money supply) means the value of each dollar is worth more. Why would wages need to go up? (sorry this is incorrect money supply actually goes up) With a lower currency, this usually drives foreign investments. I think you're forgetting that this also means the cost to invest in infrastruture and labour are also cheaper.