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Originally Posted by Traum
I was expecting BoC to do another two 50 pts hikes by the end of the year. I think the US is seeing higher inflation than we are here, but with the US Feds doing a 75 pts hike now, I suspect we're gonna see more than an overall 1% hike by the end of the year now...  |
US Guidance is 1.75%, not 100% sure but I think expectations from analyst was as high as 3.00% to curb the inflation.
Quote:
Originally Posted by pastarocket
It is much easier for a person to provide suggestions than any level of government in Canada to actually do something quickly for the greater good of Canadians.
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Yeah, if one feels strongly about it, they should go and be the change they want to see. Otherwise the microstrategy for the common normie like me is to just figure out how to make more money.
Quote:
Originally Posted by supafamous
It's just a guess - I'm making some assumptions that gov't banks aren't as hardline on 2% inflation as they say they are b/c the consequences of getting there quickly outweigh the benefits of 2% inflation. At some point there's a compromise that 2% is a medium-long term objective rather than a 2023-2024 objective. Gov't banks don't answer to politicians but they also know the goal is to create conditions for a robust economy and, at some point, chasing 2% quickly is just too painful so they chase after it as a 2027-2030 goal which softens the interest rate hikes.
I think we're still in an era where cheap money is needed for a robust economy - maybe it won't be as cheap as it has been the last few years but I'm not sure we can reset fundamentals that quickly when the horses have left the barn. As things like mortgage renewals show up and billions (trillions?) of dollars end up being redirected towards mortgage payments there will be some give that shows up. Homeowners will have to eat some shit but if they eat too much then everyone else will end up eating some shit too.
Maybe a simpler translation is that we've created a bit of a Ponzi scheme and, as we all know, the gov't will bail out the Ponzi scheme if the scheme is big enough to bring the economy down.
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Having high inflation is dangerous though, if I know inflation is 3.5-8+% in 2023 to 2030, I'll buy out all the goods, gold and securities. Don't hold any cash minus emergency fund because it'll be worth less each year. All that increase in spending will jack up prices as demand inflates and supply can't keep up.
On goods that are low supply like hybrid cars, imagine holding Priuses into the next year just to keep up with inflation and a little more.
what's worse is if it average 6% over the next 8 years. Your $100 bill today will be $67ish dollars in 2030. $100K Salary > $67K salary.