This headline is everywhere today. All I can say is wow!
https://globalnews.ca/news/10890583/bank-of-canada-deflation-price-drops/
https://globalnews.ca/news/10890583/bank-of-canada-deflation-price-drops/
Bank of Canada official warns it would be ‘painful’ to see big price drops
- Thread starter HunkyBill
- Start date
This is a quote from the article
“ Mendes said getting back to the two per cent target would also be more challenging because consumers expecting falling prices would continue to put off purchases, triggering lower prices from businesses, which would further incentivize delaying purchases. “
So what he is essentially saying is if prices went down the people would purchase less items therefore higher prices leads to more purchases ? Benefiting everyone more ?
If so I cry complete and udder bullshit , thats the stupidest thing I’ve heard in yrs .
The most frightening aspect of the headline is that the masses will blindly and unconditionally believe whatever the government and media presents.
How is it that you literally quoted the reason - and then completely ignored the reason??????
Purchases are delayed because consumers are expecting falling prices. This is especially so for discretionary spending. If you had your eyes on a vehicle that you want but don't need and it has decreased in price by $500 every two weeks without fail, at what point do you buy it? Similarly, if it has increased in price without fail, at what point do you buy it?
Purchases are delayed because consumers are expecting falling prices. This is especially so for discretionary spending. If you had your eyes on a vehicle that you want but don't need and it has decreased in price by $500 every two weeks without fail, at what point do you buy it? Similarly, if it has increased in price without fail, at what point do you buy it?
Or maybe, just maybe, people are stretched and not making as many discretionary spends over the same metric period. Things like eating out, vacations, movies, gifts might all be curtailed.
And really , are consumers delaying spending based on expected price drops or is it businesses?
The Canadian and US government has never taken greedflation and shrinkflation seriously.
Such a cynical and ignorant statement form government official. Simply deplorable. In the "Let them eat cake" category.
Just made me angry.
One quote:
Just made me angry.
One quote:
He basically said the Bank of Canada and Canadian Government couldn't care less about you and your struggles, they are going to keep prices going up, just because they think it might be better for big business
1 guy got $125k raise, 4 other people got $0 means $25k average wage increase. If you think this hyperbole, go look at the stats.
The article talks about deflation. Falling prices is deflation To trigger deflation the Bank of Canada would need to jack up interest rates sharply. Think of what would happen to anyone with floating rate debt or if your mortgage was up for renewal. Clearly the Bank of Canada is not going to do that. In fact, they will probably cut interest rates by 50bps in December with more rate cuts to come.
You are most likely correct, but with most of the household wealth in the country going to homeowners, they either need to be taxed more or deflated on their 'investments'. Otherwise there's a runaway cycle where real estate and rents goes up 20% a year for non-commercial and bank rates are 3% while wages hardly rise....oh wait, thats already happened.
One group has benefited incredibly from governemnt policy while the rest are left to suck it. Gov doesnt really control interest ( have to closely match fed to within a few basis points) so taxation and other policy is what they should be using so that the economy grows across the board instead of getting hollowed out.
Well if interest rates were sharply increased and deflation kicked in then homeowners would see the value of their properties drop. The amount of house price drops would also depend on population growth. House prices in Vancouver should have dropped more but the demand side of the equation is still being supported with the amount of people still moving to Vancouver ( and surrounding areas).
The "reasonable" BoC man says things like this, and meanwhile here's me hoping the real estate market completely implodes and simultaneously wipes out every "investor" in it.
Greed is good aparently, and market forces should rule the day.The "reasonable" BoC man says things like this, and meanwhile here's me hoping the real estate market completely implodes and simultaneously wipes out every "investor" in it.
