OTTAWA—Bank of Canada Governor Mark Carney kept borrowing costs unchanged Tuesday but used his rate announcement to warn debt-burdened consumers that today's low interest settings won't last too much longer.
Citing a precarious world economic outlook, the central bank held its trend-setting overnight interest rate at 1 per cent in an effort to sustain Canada's rebound from the global recession.
But Carney took the opportunity to alert Canadian consumers, businesses and financial markets that he will “eventually” have to take steps to drive up borrowing costs to slow inflation.
Above form the Toronto Star..
Is it just me, or are the rest of you getting a bit tired of Carney. He sounds like a parent who keeps telling his kid that if the kid doesn't smarten up, he will take away his allowance. Meanwhile the kid has gone from truancy to breaking windows and finally using hard drugs and all the while mummy Carney is standing there wagging his finger and threatening to..do something!
Meanwhile it is savers that are getting the beating. 1% rates when inflation is well over 2%. so what to do. Put it in high dividend stocks like YLO and lose 50% of your money in a year? Or buy bank stocks and hope for the best?
..or better still just spend the danged stuff and borrow more to spend. But be careful, Carney may, possibly, inevitably do something..
..Just do it- or shut up.
Fish I want to take up something you said in the last post about absentee owners costing less. In my kid's class there are five wealthy Asian families, we live in a good area, but rent.
ReplyDeleteAll of them are satellite families with fathers working in HK, China, Taiwan or Korea and mothers and children living here. The fathers are maybe here two months a year.
I wonder if they report their overseas income on the Canadian tax return/ Do they even submit a tax return?
If so, then they we need more of them to help pay for our huge deficits, but I have my doubts.
Anon @May 31, 2011 10:07 PM
ReplyDelete2 Taiwanese families who came here 20 years ago, declared very-very little in their own words. One husband is an architect-developer, and the other one is a businessman with factories in China. Both have a brother in their companies in-name-only. One of them has settled in North Van in 2009. In fact in the early 90s, they were able to move in and out of Vancouver driving to Seattle to catch flights to Taipei - all below the radar of our Immigration - without staying in Canada the stipulated 2 years.
The new batches from China they too have accountants and lawyers to assist them to declare their offshore incomes. If you listen to radio talks and forums, callers/posters own up that they had been under-declared in the past. They now want to transfer big sums here to purchase more properties, hence they are in a dilemma how to get around CRA.
Oh my, was that a joke or what? I heard from BBC that Goldman Sachs lost $1.3 Billion of Gadaffi's money buying shares of Lehman Bros.
ReplyDeleteThat money belongs to the Libyan people. Sad.
GS was credited for Greece's membership to EU. How? Geniuses at work.
Don't worry. Most people are blind, mute & deaf.
"hey are in a dilemma how to get around CRA"
ReplyDeleteGood luck. The usual trick I hear is attempting to incorporate. Another common way I have seen to "circumvent" (or at least minimize) this is to borrow money in Canada at low interest rates (often variable), and importing income offshore piecemeal to cover any shortfall from renting. Works great when rates are low but now that prices are high the necessary down payments are getting a wee bit bigger... especially if there is heightened construction activity from these investors.
Here's a question: if foreigners are given such favourable tax treatment (not needing to declare foreign income or whatever, correct me if I'm wrong), why not get a foreign relative to invest instead of trying to import the money themselves? If there really is a large chunk of cash waiting to get in held up by CRA, why isn't foreign ownership more prevalent than 1%? Honest question.
@jesse, "getting a foreign relative to invest instead" was one of the many solutions suggested. Remember that most of the stupid questions are from single moms and language-challenged newcomers, preferring free advice from their own than the professionals (=$$$ + distrust of outsiders).
ReplyDeleteOne interesting point mentioned is in the past 2-3 decades, almost all make their millions through speculating in the real estate. Thus, the generation(s) that now settled in GV continue to speculate in our real estate. Easy money, don't blame them.
"Easy money, don't blame them."
ReplyDeleteI guarantee you I am the first one not to blame the player. If I were in a rich nationalized Canadian's shoes I would seriously consider doing the same. There are risks of course, including getting nabbed by the taxman.
When I hear "2-3 decades" it certainly gives me pause that a healthy majority of people have never experienced a severe and prolonged housing recession. In terms of what is possible, well, we only need look 50 miles south of Vancouver for one scenario. Not saying it's going to happen but people should at least be aware it's on the table.
Vancouver Sun has a piece of news that was reported in ethnic papers last week. Googling "CFIA DEHP" should bring up the story.
ReplyDeleteSince last year I stop patronizing Chinese restaurants after news broke out that a toxic chemical had arrived in Toronto. Check it out on google-search "一滴香 Toronto" (literally means "a drop fragrance"). If it can be smuggled up there, why not here in lotusland.
It has since been replaced by a more powerful toxic additive called "肉香王" (literally, "meat frangrant king"). One drop in a pot of plain water makes it smell like beef/pork consomme.
How is this relevant to our discussion here. We are at a time of unprecedented greed. Wall Street, GS et al are the champions.
How long was WWII? This prolly will last much longer.
China now buying a big chunk of Argentina.
ReplyDeleteThose Billion mouths have to be fed.
http://www.guardian.co.uk/global-development/2011/jun/01/china-land-deal-unease-argentina-agribusiness
China's largest inland lake has disappeared in worst drought to hit the centre and east of the country for more than half a century.
ReplyDeleteBy Malcolm Moore, Shanghai
9:36PM BST 30 May 2011
The volume of water in Poyang lake in Jiangxi province, normally 100 miles-long and 10 miles-wide, is now a tenth of its normal level, according to Xinhua, the Chinese state news agency.
Fishing boats and house boats have been left stranded on a vast stretch of the lake bed, now a lush grassland.
The drought, which has seen no rainfall for two months, has struck the central Chinese provinces that are known as the country's "home of rice and fish".
Almost half of all the country's rice fields have been affected and four million people do not have access to drinking water.
At Honghu Lake, in Hubei province, fish farmers have seen 80 per cent of their stocks die. "More than 20,000 acres of fish farms have been severely damaged," said Zou Haibin, the local Communist party secretary in Dianhe, to Xinhua.
Bloomberg
ReplyDelete"‘Naked Auditors’ Case Shows Wall Street Not Cured"
"Goldman Sachs Group Inc. (GS), the fifth- biggest U.S. bank by assets, received a subpoena from the Manhattan District Attorney’s office seeking information on the firm’s activities leading into the credit crisis, according to two people familiar with the matter. "