Negative interest rates – not an economic curiosity, an ominous pall of government control about to storm the US and an ill-prepared Canada

‘Canada, of course, is in epic trouble, with interest rates more closely aligned with the US, and with a government that treats international relations with the oddity of Trump and the results of a cow making an omelette. Our homegrown Zoolander and his gasoline-fight crew are flouncing around sipping frappuccinos and asking “Well that’s all well and good, money people, but how many interest rates will it take to save the planet?” ‘ Read on…

13 Replies to “Negative interest rates – not an economic curiosity, an ominous pall of government control about to storm the US and an ill-prepared Canada”

  1. Am I missing something? The economy is growing above expectations, inflation is edging up at a slow, slow rate…and banks are lending at the same rate or a little better than before the 2009 “recession.” All three of these things explain why the US will NOT pursue negative interest rates.

  2. The real issues the difference between Public rates vs Private Rates. Public rates are what you’re charged on your car loan, LOC, mortgage, etc. The differential between what you get and what the banks, industries get is growing and this is what will sink our economy. Look out for rising commodity prices as a result. It’s why gold has popped.

    1. We’re frigged anyways. I just saw a no interest 5 year loan on an $85,000 Ford truck (2017 transaction). He still owed $20,000 on the 5 year old pickup he traded in. There is a whole generation of Canadians who will likely never pay off a loan in their lives. Not a true no-interest loan as Ford likely builds the interest into the price. Note – an $85,000 pickup is mechanically the same as a $40,000 pickup but looks way cooler in the oilpatch. I don’t understand why these guys don’t invest in Viagra instead.

  3. negative interest rates, a contradiction in terms. when they start taking your money as opposed to paying you even a small amount of interest then you know we are screwed.

  4. Shrug.

    The average Canadian doesn’t know (and doesn’t want to know) anything about basic economics and can be easily convinced that negative interest rates are a good thing.

  5. There is an antidote to negative interest rates – real estate, specifically rental property. And vote for Trudeau to bring in unlimited rich communists and welfare people from the S hole world to bid up prices beyond Canadian affordability.

    1. scar, having owned rental property I know from experience that when your tenants have no money you have no money. an economy that is on the rails will impoverish all including the occasional landlord. throw in a socialist government and rent controls and voila, you are screwed.

      1. With no mortgage the downside risk is pretty low. Your costs are limited to taxes, insurance and hopefully minimal repairs.

  6. I think the country will be facing foreclosure 2 weeks after the election. and that is just announced spending EVERYWHERE OUTSIDE ALBERTA !!!! JUTHTIN for JAIL 2019!!!

  7. Negative interest rates are an unavoidable feature of irredeemable fiat currency. Every drop in the rate causes an increase in debt as the cost of capital falls. But the productivity of that debt also falls. Eventually the burden of debt becomes too heavy to bear, so rates drop once again. We will eventually reach a point where money-losing businesses, as long as they can borrow at a lower negative rate than their losses, use the spread as their profit margin. As the economy fills with such zombie companies consuming capital faster than they produce it, the situation will become terminal.

  8. allow me to bore you folks by suggesting this is *another* indicator that The End Times are in fact somewhere over the horizon.

    How long it takes the earth to spin and land it all in our collective and individual laps is the skill testing question.
    medicine ie antibiotic resistance,
    technology ie mass surveillance,
    finance ie THIS,
    politics as usual all over the place all the time,
    etc etc.
    and remember all, there are economic ‘laws’ that have been so proven as to behave like the ‘law’ of gravity.