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westcoastfella
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Re: Are interest rates finally going to rise?

Thu Jun 15, 2017 11:25 am

As you all know, asset values have been over-inflated because of zero (or negative) real interest rates. And, $14T worth of quantitative easing.
It doesn't help if you get shrill and hysterical. I'm cash rich. I welcome a rise in interest rates. Let it come.
This is how stupid Jimtan is, in original post he identifies that quantitative easing was the tune of 14 trillion.

Then his next post brags about how he is cash rich. I'm not even sure if he understands the principle of devaluation of base currency. Currency and money is two different things. Assets are the best way to hedge against inflation. Last time I checked you cant print more Vancouver homes.

Assets will move and keep up with inflation according to how much currency is out there. 4 apples will always be 4 apples, 4 dollars vs 400 dollars, there can only be 4 apples.

So Jimtan you idiot, not only did you lose out on RE gains your worthless cash is worth even less now. Good job, atleast you have a Hyundai E550
This article calculates global QE at 12 trillion, since 2008, so he's not far off.  The US was not the only country to flood the market with money...

If Jim has chosen to be cash rich, I assume its because he's hedging his bets on a significant drop in housing and/or financial markets - there is simply no other reason to allow your assets to waste away to inflation.  This does not make Jim stupid, and whether his bet pans out remains to be seen - Jim may have the last laugh in the long run.  I know a few people that sold all their financial assets and went to cash in 2012, 2013, 2014 and so on, thinking the top was in and the next depression was nearly upon us.  Instead they missed out on some great market gains, and are either grudgingly reinvesting or continuing to wait out.  But who knows what the future will bring.
 
tdma800
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Re: Are interest rates finally going to rise?

Thu Jun 15, 2017 11:28 am

As you all know, asset values have been over-inflated because of zero (or negative) real interest rates. And, $14T worth of quantitative easing.
It doesn't help if you get shrill and hysterical. I'm cash rich. I welcome a rise in interest rates. Let it come.
This is how stupid Jimtan is, in original post he identifies that quantitative easing was the tune of 14 trillion.

Then his next post brags about how he is cash rich. I'm not even sure if he understands the principle of devaluation of base currency. Currency and money is two different things. Assets are the best way to hedge against inflation. Last time I checked you cant print more Vancouver homes.

Assets will move and keep up with inflation according to how much currency is out there. 4 apples will always be 4 apples, 4 dollars vs 400 dollars, there can only be 4 apples.

So Jimtan you idiot, not only did you lose out on RE gains your worthless cash is worth even less now. Good job, atleast you have a Hyundai E550
First, instead of buzzwords,  intelligent people would know that things in Vancouver are a new normal. Its different that time.  Its well known both now and way back to when BC schools still had Consumer Ed 12.. Quite simply, to hold fiat currency is, for lack of a better word, the mark of a dull. Most people trade in their own home every 5 to 7 years tax free.
 
tiga
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Re: Are interest rates finally going to rise?

Thu Jun 15, 2017 11:38 am


Vancouver market is driven by wealth, not incomes. Big difference. Raising rates will put locals on the sidelines while foreigners continue to buy. The opposite of what they want (so they say).
I'm sorry my dear. The mass majority of sales are bought by locals (wage slaves). I see no evidence after the imposition of the foreigners tax of foreign buying. If the foreigners are not buying in West Vancouver and Vancouver West, then they won't be buying in the rest of metro. Yes?  :?:

Take a minute to think about what you posted. The graph is of Vancouver west, the average sale price was 3 million + . Again using some common sense, 1 million down payment and 2 million mortage? So a wage slave can make $10,000 monthly mortage payments?

ETB is right, no one is buying million dollar homes on wages. Its wealth from parents or some sort of inheritance.

Foreigners have stoped buying, but Canadians of foreign birth continue to buy. Its not just foreign Chinese buying, Chinese Canadian citizens with $ are buying.
Thats a good distinction. "Canadians of foreign birth". Many of these have rich roots outside of the country. So on paper, it is a local buyer (has PR/citizenship , etc). I know of many in this group. They make $100-150k combined incomes husband and wife, but have millions in property. They have been property which far exceeds their incomes' ability to pay. Its the same. Inheritance scenario just from overseas, and from a bigger pool. This money will stay here because Vancouver tends to be the end state for many families (who can afford it). 
 
reallyreal2
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Re: Are interest rates finally going to rise?

Thu Jun 15, 2017 1:30 pm

I'm sorry my dear. The mass majority of sales are bought by locals (wage slaves). I see no evidence after the imposition of the foreigners tax of foreign buying. If the foreigners are not buying in West Vancouver and Vancouver West, then they won't be buying in the rest of metro. Yes?  :?:

Take a minute to think about what you posted. The graph is of Vancouver west, the average sale price was 3 million + . Again using some common sense, 1 million down payment and 2 million mortage? So a wage slave can make $10,000 monthly mortage payments?

ETB is right, no one is buying million dollar homes on wages. Its wealth from parents or some sort of inheritance.

Foreigners have stoped buying, but Canadians of foreign birth continue to buy. Its not just foreign Chinese buying, Chinese Canadian citizens with $ are buying.
Thats a good distinction. "Canadians of foreign birth". Many of these have rich roots outside of the country. So on paper, it is a local buyer (has PR/citizenship , etc). I know of many in this group. They make $100-150k combined incomes husband and wife, but have millions in property. They have been property which far exceeds their incomes' ability to pay. Its the same. Inheritance scenario just from overseas, and from a bigger pool. This money will stay here because Vancouver tends to be the end state for many families (who can afford it). 
I know!  So True!
Vancouver is the ONLY  city in the World where people get inheritance and/or have wealth from off shore.  Whew!
 
tdma800
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Re: Are interest rates finally going to rise?

Thu Jun 15, 2017 1:34 pm

^--- exactly - finally some agreement
 
reallyreal2
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Re: Are interest rates finally going to rise?

Thu Jun 15, 2017 1:34 pm



Half of Vancouverites are have-nots.     This is a sellers market for the past 16 years except for a 6 month period in late 2008 early 2009. I dont see the conditions that created a buyers market repeating. Going to be sellers market here for as far as the eyes can see.
You should be praying for an earthquake.
hmmmm - what was a constant in BC for the past 16 years that might just change recently?
hmmmmm - what is the only direction interest rates go from here?
LOL
 
tdma800
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Re: Are interest rates finally going to rise?

Thu Jun 15, 2017 1:36 pm



Half of Vancouverites are have-nots.     This is a sellers market for the past 16 years except for a 6 month period in late 2008 early 2009. I dont see the conditions that created a buyers market repeating. Going to be sellers market here for as far as the eyes can see.
You should be praying for an earthquake.
intelligent people know that interest rates can still go down
 
yzfr1
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Re: Are interest rates finally going to rise?

Thu Jun 15, 2017 1:50 pm



Half of Vancouverites are have-nots.     This is a sellers market for the past 16 years except for a 6 month period in late 2008 early 2009. I dont see the conditions that created a buyers market repeating. Going to be sellers market here for as far as the eyes can see.
You should be praying for an earthquake.
hmmmm - what was a constant in BC for the past 16 years that might just change recently?
hmmmmm - what is the only direction interest rates go from here?
LOL
Are you implying the housing run up was caused by BC Liberals? Did they also have their tentacles behind the scenes in Toronto as well?

Interests rates can go in any direction, BOC already indicated its willing to go negative.


https://beta.theglobeandmail.com/report ... ice=mobile
 
reallyreal2
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Re: Are interest rates finally going to rise?

Thu Jun 15, 2017 2:29 pm



Half of Vancouverites are have-nots.     This is a sellers market for the past 16 years except for a 6 month period in late 2008 early 2009. I dont see the conditions that created a buyers market repeating. Going to be sellers market here for as far as the eyes can see.
You should be praying for an earthquake.
hmmmm - what was a constant in BC for the past 16 years that might just change recently?
hmmmmm - what is the only direction interest rates go from here?
LOL
Are you implying the housing run up was caused by BC Liberals? Did they also have their tentacles behind the scenes in Toronto as well?

Interests rates can go in any direction, BOC already indicated its willing to go negative.


https://beta.theglobeandmail.com/report ... ice=mobile
Irrelevant article from 2015.
Keep up with the times.  Canadian economy is booming.
 
tdma800
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Re: Are interest rates finally going to rise?

Thu Jun 15, 2017 2:38 pm



Half of Vancouverites are have-nots.     This is a sellers market for the past 16 years except for a 6 month period in late 2008 early 2009. I dont see the conditions that created a buyers market repeating. Going to be sellers market here for as far as the eyes can see.
You should be praying for an earthquake.
hmmmm - what was a constant in BC for the past 16 years that might just change recently?
hmmmmm - what is the only direction interest rates go from here?
LOL
Are you implying the housing run up was caused by BC Liberals? Did they also have their tentacles behind the scenes in Toronto as well?

Interests rates can go in any direction, BOC already indicated its willing to go negative.


https://beta.theglobeandmail.com/report ... ice=mobile
related, modern media. people actually in Canada know the eco is circling the bowl
 
jimtan
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Re: Are interest rates finally going to rise?

Thu Jun 15, 2017 8:08 pm



Half of Vancouverites are have-nots.    
Look at ETB. She talks like a plutocrat even thought she has only a single paper million! That's the kinda attitude generated by a get-rich-quick culture. Shame!

Anyway, we do need to return to a normal risk-return economy. Inflation at 1-2%. A small positive return to retail depositors. Five year mortgages at 4% again. Check out the chart below.


For those who didn't learn basic economics in school, or work in the finance sector. Here's a small comment on quantitative easing (QA).

Briefly, central banks usually use short-term reference rates to influence the liquidity of the banking system. Their target is the prime rate which is the reference borrowing rate for short-term business and consumer loans. This is a continuous process whereby the central banks manage the business cycle. 

Should the economy be too 'weak', a central bank can lower the discount rate which is the cost of lending money to banks for their reserve requirements. And, back it up by doing 'repo' which add liquidity to the banking system and affects the Federal Funds rate (the inter-bank rate at which banks lend money to each other).

In turn, the commercial banks lower their prime rate (one of the costs of doing business). And, hopefully that generates more demand and investment.

Conversely, the central bank can raise short term interest rates if demand or inflation is too high.

QA is rarely used. Why? 

https://en.wikipedia.org/wiki/Quantitat ... the_people

In a normal economy, incremental changes in short term rates is enough to maintain a target range of economic growth and inflation. In QA, the central bank targets longer term interest rates which has a longer lag effect on the economy. For example, construction of a new building takes several years.

However, the management of short term rates becomes ineffective as rates approach zero and inflation is negative. That is, to maintain a zero real interest rate, short term interest rates have to be negative also. It is a different ball game when banks charge interest to take deposits.

In addition, the banking system may be flooded with liquidity but the banks can't/won't lend.

So, there is a role for QA in an extraordinary emergency. To stimulate demand for long term investments like housing. To improve the RE market and protect banks (and governments) from a wave of mortgage defaults.

The problem is that the global QA has been so massive and prolonged that it has distorted the asset markets. For example, the Federal Reserve's asset base grew from $1T in 2007 to $4.5T today. In fact, the Fed should have started to unwind QA in 2013 when the RE markets had stabilized.

http://money.cnn.com/2013/12/19/news/ec ... index.html

So, listen carefully to the Fed Chairwoman when she says that it's time to end the party. She has been in  consultation with other central banks.

“Fed hikes interest rates despite declining inflation, sets plan for balance sheet reductionh

http://www.cnbc.com/2017/06/14/interest ... ellen.html

What does it mean for RE and stock markets? Hopefully, the asset-rich will stop getting richer. And, there will be less money from the stock market to buy RE.

What does it mean for savers? They can finally get a decent real return on their cash.
Attachments
Canada 5 year mortgage.JPG
Canada 5 year mortgage.JPG (60.59 KiB) Viewed 3160 times
 
tdma800
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Posts: 2977
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Re: Are interest rates finally going to rise?

Thu Jun 15, 2017 8:24 pm



Half of Vancouverites are have-nots.     This is a sellers market for the past 16 years except for a 6 month period in late 2008 early 2009. I dont see the conditions that created a buyers market repeating. Going to be sellers market here for as far as the eyes can see.
You should be praying for an earthquake.
in addition to that cnbc is foreign news - irrelevant to vancouver
 
yzfr1
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Posts: 286
Joined: Tue Mar 19, 2013 8:35 pm
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Re: Are interest rates finally going to rise?

Thu Jun 15, 2017 8:26 pm



Half of Vancouverites are have-nots.    
Look at ETB. She talks like a plutocrat even thought she has only a single paper million! That's the kinda attitude generated by a get-rich-quick culture. Shame!

Anyway, we do need to return to a normal risk-return economy. Inflation at 1-2%. A small positive return to retail depositors. Five year mortgages at 4% again. Check out the chart below.


For those who didn't learn basic economics in school, or work in the finance sector. Here's a small comment on quantitative easing (QA).

Briefly, central banks usually use short-term reference rates to influence the liquidity of the banking system. Their target is the prime rate which is the reference borrowing rate for short-term business and consumer loans. This is a continuous process whereby the central banks manage the business cycle. 

Should the economy be too 'weak', a central bank can lower the discount rate which is the cost of lending money to banks for their reserve requirements. And, back it up by doing 'repo' which add liquidity to the banking system and affects the Federal Funds rate (the inter-bank rate at which banks lend money to each other).

In turn, the commercial banks lower their prime rate (one of the costs of doing business). And, hopefully that generates more demand and investment.

Conversely, the central bank can raise short term interest rates if demand or inflation is too high.

QA is rarely used. Why? 

https://en.wikipedia.org/wiki/Quantitat ... the_people

In a normal economy, incremental changes in short term rates is enough to maintain a target range of economic growth and inflation. In QA, the central bank targets longer term interest rates which has a longer lag effect on the economy. For example, construction of a new building takes several years.

However, the management of short term rates becomes ineffective as rates approach zero and inflation is negative. That is, to maintain a zero real interest rate, short term interest rates have to be negative also. It is a different ball game when banks charge interest to take deposits.

In addition, the banking system may be flooded with liquidity but the banks can't/won't lend.

So, there is a role for QA in an extraordinary emergency. To stimulate demand for long term investments like housing. To improve the RE market and protect banks (and governments) from a wave of mortgage defaults.

The problem is that the global QA has been so massive and prolonged that it has distorted the asset markets. For example, the Federal Reserve's asset base grew from $1T in 2007 to $4.5T today. In fact, the Fed should have started to unwind QA in 2013 when the RE markets had stabilized.

http://money.cnn.com/2013/12/19/news/ec ... index.html

So, listen carefully to the Fed Chairwoman when she says that it's time to end the party. She has been in  consultation with other central banks.

“Fed hikes interest rates despite declining inflation, sets plan for balance sheet reductionh

http://www.cnbc.com/2017/06/14/interest ... ellen.html

What does it mean for RE and stock markets? Hopefully, the asset-rich will stop getting richer. And, there will be less money from the stock market to buy RE.

What does it mean for savers? They can finally get a decent real return on their cash.
Jimtan, you are posting crap you don't even understand.
There was no quantitative easing in Canada you tool. Inflation and prime rates are to manage fiat currency, money is created out of thin air from the central bank and Fed through bonds. Inflation is there to pay the interest on the original money created out of thin air. Retail savings will never meet nor beat inflation. Look up fractional reserve.
All the stuff you posted is so dumb. You don't have the first clue.
Quantitative easing in the States was a bond buying plan, they did bond buy backs to keep liquidity in the market. If banks dry up with liquidity the game is over.
That has nothing to do with Canada, there is no liquidity problem. RE in Canada has not been propped up QE you scum bag unless Americans are buying 90% of our real-estate .

Geez, it gives me a headache how you actually think like you know what you are talking about. If QE was real in Canada an the reason for housing prices to go up, it would be across the board in Canada. As cash base would increase equally around the country, but its NOT


 

"What does it mean for RE and stock markets? Hopefully, the asset-rich will stop getting richer. And, there will be less money from the stock market to buy RE."

bad news idiot, once the money is printed into circulation or fractional reserved into existence it can't be un-done. You have been permanently priced out of the market.
Last edited by yzfr1 on Thu Jun 15, 2017 8:28 pm, edited 1 time in total.
 
eyesthebye2
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Re: Are interest rates finally going to rise?

Thu Jun 15, 2017 10:23 pm

If QE was real in Canada an the reason for housing prices to go up, it would be across the board in Canada
This is exactly my point about interest rates. If low rates created the increase in values in Vancouver and Toronto, why did it not bring up values in most other locales? Are interest rates higher in Winnipeg, London, Quebec City, Halifax etc.?
 
tdma800
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Re: Are interest rates finally going to rise?

Fri Jun 16, 2017 5:38 am

He's doesn't realize that not everyone has a mortgage
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