Quote:
Originally Posted by Carl Johnson
and what would you do if you were in charge of bank of canada? wait for a full-blown recession then start cutting rates? the 2 rate cuts since the beginning this year, if anything, shows the central bank is being proactive. the old adage "don't fight the Fed" comes to mind. bank of canada is much more comfortable with a little bit of inflation like the input costs increase as you said than deflation.
the thread was created less than 3 years ago predicting a real estate bubble waiting to burst, i wonder when the doomsayers are going to come forward and admit they have been grossly wrong. oh wait i know what you are going to say, i am just early, wait for it. but you know what, it doesn't matter; if you are going to make a market call you have get both the timing and direction right.
as i said previously, even if vancouver real estate market crash and burn tomorrow all the naysayers are still wrong when their predictions are way too premature and uncalled for.
on the other hand, am i suggesting to go out and buy a 2+ million dollar house? hell no. i am entirely for living within your financial means, carrying no debt (except mortgage/student loan) and save as much money as possible. yet, a stable place you can call home, where you have tranquil peace of mind knowing you will not be evicted by a landlord over the petty issues, is an investment worth pursuing.
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you totally missed the point, the MSM is spinning that all the mess Canada is in is a positive... Canada is in a mess.
to answer your question, BoC's doing exactly what they're supposed to - the problem is that the government isn't living up to their side.
if i were in charge, this is what i would have done:
as money got cheaper due to BoC decreasing rates, make mortgages harder to obtain (don't prop up housing anymore - it is clearly unaffordable to the average canadian), but allow businesses cheaper and easier money to grow
i also would have diversified my economy, given tax credits to manufacturing, trying to keep as much of the mfg base as possible...
but the problem isn't the today, it was made in 2008 when canada didn't capitulate by pumping the two industries that will kill it today (real estate and commodities), whilst killing the one industry that should save it today (manufacturing).