Canada could theoretically follow the lead of other countries that have recently gone to negative interest rates in order to stimulate the economy, central bank governor Stephen Poloz told a business audience today after yet another drop in the loonie.
h/t Tim
Yes, that works so well, and then we can be just like Greece where everybody stores their Euros in a mattress.
It’s interesting that this kind of insanity is appearing now that Stephen Harper is no longer Prime Minister.
It leads me to believe that he was keeping a lid on it.
I suppose his being an evangelical Christian and having a masters in economics helped him do that.
Unfortunately, the wolf is now managing, if you will, the hen house.
Right… because ratcheting interest rates down to zero has done such wonders for the economy, why not double down and start digging?
I have said this here and elsewhere that it may well be that Harper threw the election because he wanted the Libtards to be at the helm when the economy went over the cliff.
Now, Truedope and his short pants advisers can pump the brakes all the way to the bottom of the cliff. And all those big promises to fulfill when all he has is a bag full of $h1t to hand out.
How do you say Prime Minister Justin Trudeau in Greek?
War on Cash
Negative interest rates so you lose money in the bank by government decree
No cash so everything gets reported to the government
All in the name of stopping money laundering and terrorism, Trudeau and Obama will say.
All in the name of grabbing as much money for the collectivist state is the truth
“Unfortunately, the wolf is now managing, if you will, the hen house.”
Weasels, Gary D., weasels. But you’re right about the chickens.
Negative interest rates, you say?
That should go well with the negative markets returns we have experienced in the last few days.
Hey,easy on him,he needs unpressured time to deal with other issues;ones which may need to have a re-alignment of Just-In’s pre-election “promises”.
http://www.huffingtonpost.ca/2015/12/07/liberals-door-to-door-mail-delivery_n_8745406.html
So this is what Junior meant when he said:
“we can grow the economy not from the top down the way Mr. Harper wants to, but from the heart outwards”
Or is this his plan to stop “the rich” from putting money in TFSAs?
Don’t worry because all this stuff just sorts itself out and stuff. It’s all too complicated for me.
@Skweeker
The hope here is that Justin will damage the Liberal brand once and forever, unless of course Conservatives find a red tory leader who wants to create Liberal-lite conservative in name only party.
“Why would anyone ever accept a negative nominal return when they could always simply hold cash and earn a zero return?” Poloz asked, rhetorically. “A big part of the answer is that there are costs to holding currency, particularly in large quantities, and these costs affect the lower bound. Because of the costs, which include storage, insurance and security, central banks can charge negative rates on commercial bank deposits without seeing a surge in demand for bank notes.”
Maybe it’s a great way to short a currency without having to purchase derivatives. IOW, negative yield bonds are a harbinger of falling currencies, vv. those that don’t issue such securities.
20 billion deficit and negative interest rates versus climbing rates in the US?
Get used to a 60 cent dollar folks.
Hope you all like inflation.
Within a year, they’ll be announcing a “one-time” tax on all RRSP accounts.
Just watch.
From what I can see it is only red Tories who are lining up to takeover anyways. If McKay is the best of the best then we are no further ahead than when Harper united the party.
It was a shambles before the defeat in my humble opinion and a red Tory simply accelerates things. Kenney might be a option but I have never met the man. McKay has been making regular trips out west for years in anticipation of this event.
I am reverting to my ‘the west wants out’ philosophy. The glee in Ontario over the oil collapse is pathetic. The economic divergence is so pronounced I cannot see how it can be mended. The federal Liebels will come out with a carbon tax which will forever re-establish the rape and pillage foundation of eastern dominance.
I am not interested in another wasted decade of trying to straighten the whole country out. I mentioned economic differences but there are cultural ones as well that will never allow any form of equality.
I guess this will go hand in hand with negative retirement age – I will officially be able to retire 5 years after I die.
I hope that it’s just CBC reporter Pete Evans and not Poloz who thinks that lower interest rates would increase the value of the dollar.
Given the rate of inflation (the real one, not that from Stats Canada) we already have negative interest rates.
The problem with negative interest rates is they don’t work (to stimulate the economy) when the global economy is contracting. The global economy is contracting at a far greater rate than “they” are telling us. Anglo American is laying off 60% of its work force (85,000 people). That is serious downsizing.
Start a web-based business that pays in US dollars, get a government job, or work for a bank. That is my advice.
That’s right Rick, lowering interest rates will lower the value of the dollar not increase it, which is what the article appeared to be about. And if the US raises rates (I don’t believe they will), it will also decrease our dollar’s value. It is scary that an ex-drama teacher is leading this country during interesting times but if Eastern Canada wants him, than that’s what we all get.
Wheeee, here we go folks, something for nothing, penalize those who built THIS country.
Gramps said, coming from Germany many moons ago, paper has value based on trust, and what Gov says and does. Don’t trust them.
Hard assets, tho beaten down, will have value when paper (in sacks folks) has nada.
The decimation of elderly and fixed income folks is just starting. To placate the “entitled”, greenies, new arrivals, etc.
A truly sad situation, but coming at you, be ready folks.
More Snowy Pony.
I heard on the radio today The Other One talking about Canada’s relationship ship with the Injuns as a relationship Nation-to-Nation.
Does this guy think before he opens his mouth? Why do his handlers allow him to say these things? Are there any adults in the Liberal PMO?
I will not despair. I will not despair. I will not despair.
Unfortunately, my career (electronic circuit design) depends upon investment in new produtcs. Not much is happening in that sphere. I might need assistance when my savings run out. Thanks progressive shites for taking half my money and burning the economy down.
This doesn’t apply to you and me. Rather it applies to the big banks as an incentive to move money out of their vaults and into lending.
Only in the SDA fantasy world did Canada’s economy start tanking on November 4, 2015, and no sooner.
In the real world, our commodity-centric economy has been slumping for over a year, ever since OPEC decided to flood the global petroleum market in a bid to put its shake industry competitors out of business. Where were your howls of protest then, when Mr Harper was at the helm? Oh right, you issued none, because you were — and remain — blinded by partisanship.
Harper Derangement Syndrome is dead, long live Trudeau Derangement Syndrome.
Why would I leave any money in any. A k that was charging me interest for storing my money . That would be insane. I have already started the orderly withdrawals.
λαμπερό πόνι
Why would the chickens come home to roost when the wolf is at the door?
Sorry, lost in metaphor.
We take issue with the response to the situation kk. We all acknowledge that both Harper and Justin can’t control oil prices (well we do at least, you likely don’t).
Bas akwards for the dollar
Aa economy from his heart ,an interest rate from his brain
“Where were your howls of protest then, when Mr Harper was at the helm?”
Here it is in short. We realized that the alternatives were worse.
When the Liberals/NDP were calling for “investment” in the economy, we knew that a) governments don’t create jobs and b) government has no money of it’s own, that it’s our taxes the pay for everything the government does.
Harper saw so many western countries bailing out banks, so he encouraged Canadians to keep their money in the banks by allowing Canadians to put $5000 tax free into savings accounts. Those accounts will now be emptied and the banks will soon be calling for bail outs as a result.
apparently in sweden where rates are negative they are exploring charging a processing fee if you use actual cash to buy something.
I don’t see why keeping rates near zero and letting the dollar fall wouldn’t be a better idea than going negative.
I read a comment about what to do if banks start charging fees to bank money with them (a negative interest rate). Take your savings money out and put it into “refillable” credit cards.
Speculation is that oil is going to $30/bbl. That ought to flush the oil sands down the tube. But carbon taxes will help – not!!
High unemployment means no consumer spending which means more unemployment. Unemployed people do not pay taxes nor do bankrupt companies. An empty treasury means broken promises and eventually reneging on pension plans.
The depression to end all depressions has started. Wait until the children in the PMO find out!
$20. ?
http://www.thetimes.co.uk/tto/business/industries/naturalresources/article4635048.ece
http://business.financialpost.com/news/energy/opec-is-dead-cartel-that-once-blackmailed-nations-now-only-able-to-bully-themselves?__lsa=b31d-47c7
If the Conservatives wish to contest for federal power in the next election, the first thing they must ditch is the idea of red or blue conservatives. Mr Harper fused the best of classical liberal and conservative ideas. The LPC is a socialist, not liberal party. Classical liberalism is the winning formula imho, augmented with conservatism, not the other way around. Swing voters in southern ON were the difference between a Tory majority in 2011 and a Grit one in 2015. No need to apologize for the Harper years, he will soon look good compared to the power at all costs driven LPC, who exist to further those with whom they’re politically connected. Here’s the latest example:
“Liberals say Harper’s end-of-regime patronage binge an abuse of process.” Those are jobs for which only Grits should be allowed to abuse process.
http://www.nationalnewswatch.com/2015/12/08/liberals-say-harpers-end-of-regime-patronage-binge-an-abuse-of-process-2/#.VmeE1_aFOM9
Negative interest rate on bank lending? Now THERE’s an interesting concept: as soon as I can get a negative interest mortgage, I’ll move into the biggest house I can find – and retire on the income!! LOL!!
“Only in the SDA fantasy world”
kt, You are plainly weird and such an incorrigible masochist.
I don’t suppose it will matter to you that the trail was blazed for your Trudeau government by the spectacular incompetences of the Provincial Liberals in Ontario. The Wynne cabal wasn’t exactly laying the groundwork for expanded manufacturing leading up to the Trudeau debacle. Rather, they chased away several previously well established industries in the province with their growing energy and legacy costs. These costs will continue northward, as will taxes. I predict more industry will be leaving and only heavily government subsidized crony capitalist enterprises will make their home here. Something in the order of Solyndra. Is it because of the climate change superstition that you find fault in capitalizing on commodities? Or perhaps it’s anything “capitalist” that has your central-planning Keynesian knickers in a knot. And TDS yes – but at least there is articulable reason behind it. Why you’re incapable of seeing it is beyond imagination. Repeat after me: “Trudeau is an idiot.”….and you have no right to an opinion otherwise. Smarten up!
Pilgrim….That’s a Laugh Out Loud!
The economy and other things — overall world chaos. An interesting theory. Harper was a stabilizing force for Canada and I think to some degree was a buffer against the worst extremes. The media and the left were so outrageously abusive to Harper that it would not surprise me if he was ready to throw in the towel. Now the stupids are in charge and we will all be rewarded accordingly. In a few years (or a few months as it now looks), Canadians may be begging Conservatives to take the reigns again.
KT. Stick around. The pencils around here could use a little sharpening.
Yes you have to be good at something to be useful. I sure hope he doesn’t trip over his feet and injure himself once he sharpens those pencils. All good until someone loses an eye as they say.
Pencil isn’t a code word for SDA enthusiast…is it? Warren….you’re not a kindred spirit of kt’s are you?
Hey lefty stooge, does kt stand for “kan’t think”?
Junior Jihadi Justin looks at Greece as a success story, something to be emulated.
He’s living proof that marijuana causes brain damage (to his mumsy, and to himself)
You must be a postie or a deadbeat gubmint worker.
“I am reverting to my ‘the west wants out’ philosophy.” Well said comment, and so am I. Red Tories are lining up to take over the direction of the Conservative Party. Not with my money.
The Eco-fascist plan to de-industrialize Canada is well under way.
If instead of giving away billions of $$$ to “refugees” or to help developing nation fight ” global warming” or to anyone outside Canada, Justimbecile Trudeau was putting that money into the Canadian economy, maybe there would be no need for negative interests?
or maybe we could pay less taxes?
Maxine Bernier. If he wants it.
Book it.
“KT. Stick around. The pencils around here could use a little sharpening.”
Not as badly as the crayons in Ottawa.