The Bank of Canada went and done it! They raised the overnight rate to its highest rate in 9 years! This is going to ruin the economy! The rate is now at 1.25%, oh my God! Yes, I am being sarcastic about tighter money from the Bank of Canada. Their overview paragraph from the report was quite telling.
While the economic outlook is expected to warrant higher interest rates over time, some continued monetary policy accommodation will likely be needed to keep the economy operating close to potential and inflation on target. Governing Council will remain cautious in considering future policy adjustments, guided by incoming data in assessing the economy’s sensitivity to interest rates, the evolution of economic capacity, and the dynamics of both wage growth and inflation.
Talk about hedging your bets, I guess they are trying not to scare folks? Rates will be going up, but not in the near future, maybe? Does sound like tighter money policies are coming soon.
On the downside, the rate hike has caused all the banks to increase their prime rates, and mortgage rates, which is going to hit us all in the pocketbook. Most of the major banks have raised their “prime” rate to 3.45% and all mortgage rates have gone up as well.
For those curious, what would be the best investment given these changing times? GICs will start becoming more interesting to folks, but what might be a good investment? Hmm… How about Pay Down Debt! It now has even higher pay backs! What other investment can give you a guaranteed pay back of around 5% (on a mortgage)? On the plus side my guess is GIC Ladders is going to be a popular search on Google very soon.
Bitcoin lost value this week. Why? I have no idea really, but as I type these letters it is worth less than $10,000, but it might have recovered by the time you read this. To say this is a murky investment area is an understatement. Are you thinking of becoming a Bitcoin Miner? Go North young folk (Northern Quebec that is). Hydro Quebec is luring Cryptominers to Northern Quebec with very low electric rates. Evidently Quebec Knows How to use their excess hydro-electric resources, to make money.
My Recent Writings
This week I queried Can I get a Deal from a Chatbot ? Given the use of automated (some might say AI) on-line and social media bots being used for customer service, it is a valid question. My guess is you are not likely to get too much from a Bot, although they may hand out occasional perks just to keep folks from complaining about the lack of deals.
Micro Blogging on Finance
The importance of keeping your important financial information safe is nicely summed up in the following meme, which is a twist on an old adage.
— Alan Whitton (@alan_whitton) January 17, 2018
What’s Up This Week?
At least I am not a sophomaniac like some folk are. If you are an aboulomanic when it comes to money here are some good articles to help you with your inability to decide.
- Thinking of getting out of debt in 2018? Kerry from Squawkfox wants to give you the tools to do that, with Getting out of debt with the Debt Reduction Spreadsheet 2018, and it is free! Why aren’t you using it yet?
- Robb from Boomer and Echo returned from the Cleveland Browns perfect season parade (0-16) to help you Learn How to Budget and he gives you a free spreadsheet too! Why aren’t you using this yet? The Browns should!
- Remember as an executor one of your duties is to pay out all debts on the deceased estate, however, remember Estate Administration – The Importance of Advertising for Creditors , points out the Blunt Bean Counter.
- Ever wonder why people really quit their jobs? The Harvard Business Review has an interesting article, which a lot of employers should read (if they are interested in employee retention).
- Surprisingly I was on the Time list of the Top 10 Richest folks of all time. I call #fakenews, no mention of Scrooge McDuck or Smaug the Dragon.
- Captain Obvious must have started writing for the CBC, with Rogers employees say managers turn a blind eye so call centre workers can lie and cheat customers, all I can comment is, “D’uh?!?”. The fact that the major telecomm and cable firms are unscrupulous at times is nothing new. Every Canadian with a phone knows this.
- Amazon has a short list for their search for another HQ site, and Toronto has made the list of 20 cities being considered. Good luck having your new employees finding somewhere to live Mr. Bezos.
- Are you wondering how many more Underfunded Pensions there are out there (not just Nortel and Sears)? Should the firms with underfunded pensions be allowed to ignore that debt? These and other questions asked by Michael James.
Vikings Fan Joy
The first football game I can remember watching is Super Bowl IV when the Chiefs beat the Vikings, and from that day I have been a Vikes fan. Last Sunday something happened to melt the frozen hearts of the most die-hard Vikes fan. Yes, we haven’t got to the big game yet, but for a moment, it was wonderful.
The New 2018 Random Thoughts
- Paper Delivery, Bitcoin and #MoneyTalk (January 12th)
- Polar Vortexes, Minimum Wage and #MoneyTalk (January 4th)
End of 2017 Random Thoughts
- Winter, Inflation and Christmas are Here and #Moneytalk (December 22nd)
- Canadians Owe More , Polar Temps, CPP Survivor Benefits and #MoneyTalk (December 15th)
- DTC Changes, Christmas Present Ideas, Fraud and #MoneyTalk (December 8th)
- Unlocking Phones, Raiding Parents’ RRSP, Household Debt and #Moneytalk (December 1st)
- What is your price, Black Friday, Phoenix and #MoneyTalk (November 24th)
- We Shall Remember, Paradise Papers, Tax Cheats and #MoneyTalk #FLM2017 (November 10th)
- Fall Back, Farewell PC Financial, and #MoneyTalk #FLM2017 (November 3rd)
- Mortgage Tests, Thanks Gord and Bombardier and #Moneytalk (October 20th)
- Halifax Ikea, New Tax Plans, Pumpkin Spice ETFs and #MoneyTalk (September 29th)
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