If GoC bond yields go to 7%, housing prices will crash 80%.
Ain't going to happen.
Canada has only three sectors:
Economically sensitive,
Interest rate sensitive,
Inflation sensitive,
Staying away from the first two would be wise.
Caveat Emptor.
I was only giving 7% as an example, but lots of people like you said 19% interest rates would never happen. But I was there when they did. Look closely through history and you'll realize that nothing is impossible, and the puppeteers who control the marketplace have their own agenda that doesn't include you or me.
I was only giving 7% as an example, but lots of people like you said 19% interest rates would never happen. But I was there when they did. Look closely through history and you'll realize that nothing is impossible, and the puppeteers who control the marketplace have their own agenda that doesn't include you or me.
I read you. Moreover, I also believe that nothing is impossible. I just think it's improbable given the amount of global debt we have today.
The whole western world would collapse if they pulled a Paul Volcker.
I was only giving 7% as an example, but lots of people like you said 19% interest rates would never happen. But I was there when they did. Look closely through history and you'll realize that nothing is impossible, and the puppeteers who control the marketplace have their own agenda that doesn't include you or me.
If you know what's coming, it really doesn't matter what it is because your moves will pay out. The further things go from the expected, the more your wealth multiplies.
Now, I don't think rates will go that high as the fallout would be a bigger mess than the politicians want to deal with. Definitely rates will increase and put the squeeze on a lot of people but I am thinking more like 3% or less within the next five years.
All this talk about raising the FEDFund rate (BankRate) is mostly jawboning.
Push comes to shove, they may raise 25bps pehaps another 25~50bps to save face and be done with it.
Prime Interest rates in the purest sense are driven by the 2 forces: money supply and demand for credit. In a perfect capitalistic world, these would be market forces, in reality they are gov't policy driven, meaning the bank rate is set at the pleasure of the govt of the day.
The forces that work on the gov't are more complex. Inflation, economic stimulus, deficit spending... these all can be manipulated with interest rate change.
Recently gov't have increased the supply of money (printing money) as fast as they can run their printing presses. When this cash enters the economy, there is more to go around so people spend a lot. This reduces supplies for many manufacturers as they need time to gear up, consumers are willing to pay more as there is more money available (price a truck lately?) . INFLATION.
The sad thing about inflation is happens to prices for everything, not just the new items purchased by the working stiff. It also happens to the value assets - which are disproportionately owned by wealthier people -- they soak up the spare cash into their wealth as the value of stocks, real estate etc grows inflates too.
Inflation hurts the poor and middle class the most -- the cost of survival increases, this diminishes or eliminates their opportunity to amass assets that enjoy inflating values. The rich get richer, the working class and poor get poorer.
So my brother finally started investing. He beat his 40th birthday by a little (I started at 16). I was encouraging him to get this years RESP contribution in ASAP as he is way behind and needs all the growth he can get. He agrees with that. I asked what they were investing in. Huge face palm. He can't remember what it is, it costs nothing to buy, he has no idea what the MER is and when markets are volatile, it transfers to safe investments and when markets are stable, it transfers to more volatile investments. F me. That has all the hallmarks of a huge loser that will substantially underperform an index fund in every market condition. It sounds like it locks in behaving like a moron. Oh well, half the battle done, he did something but the need to choose his own path has again kicked him in the nuts.
My cousins signed up for some private savings plan for kids' education...last I spoke with them a few months ago the response was "we got so effed by this that there's pretty much nothing there"...I didn't ask for further info as I don't know if I want the answer.
I'll assume they didn't contribute regularly, and some of these plans take your money if you stop contributing.
My cousins signed up for some private savings plan for kids' education...last I spoke with them a few months ago the response was "we got so effed by this that there's pretty much nothing there"...I didn't ask for further info as I don't know if I want the answer.
I'll assume they didn't contribute regularly, and some of these plans take your money if you stop contributing.
Thankfully he listened enough to avoid the programs that function like defined benefit but take a fortune. This is a defined contribution, likely with a crap return.
Those savings plans typically take 75% of your contributions for the first number of years as fee payment. If you try to pull out once you realized what you signed up for, there is nothing there.
Heard that Azon regrets turning that line of biz to Shop and is planning on a re-entry to that sector (sector, short definition is "hosting and payments"), also the reluctance of Shop to take on the last mile (last mile = delivery), may play a part.
caveat: verify the facts yourself & no intent as financial advice
Thankfully he listened enough to avoid the programs that function like defined benefit but take a fortune. This is a defined contribution, likely with a crap return.
Those savings plans typically take 75% of your contributions for the first number of years as fee payment. If you try to pull out once you realized what you signed up for, there is nothing there.
With the number of consumer reports on how awful these private funds are with crap returns and so many what ifs you may not actually get any value I’m still staggered anyone signs up. But if your not some what financially savvy , which is the target market, there you go. Like PayDay loans LOL
With the number of consumer reports on how awful these private funds are with crap returns and so many what ifs you may not actually get any value I’m still staggered anyone signs up. But if your not some what financially savvy , which is the target market, there you go. Like PayDay loans LOL
The marketing is solid. Preys on the insecurity (you don't know how much education will cost, you don't know what returns you will get, etc). In exchange for giving up a huge service fee and a lot of potential return you get security. Like GIC's for education. Almost always the wrong choice but easy to sell as most people are terrified of losing any of their hard earned money.
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