Inflation : 40 Year High

[Chris12345]

On 3/22/2022 at 4:54 PM, Russ said:

Im about to sign papers to lock into a big bleeping mortgage.  Atleast there will be a rental to take away majority of the mortgage.

 

We think its massive, we get paid decent too.  Our realtor said this is going to be one of the smallest mortgages he's written in the last 6 months so I wouldn't even want to know how strung out others are.

Oh yea it's bad out there. Very similar to the US in 2008.

[Warhippy]

One thing I would like to point out.  Especially for the lurkers from AB who I hope are still around (you know who you are)

 

Oil has now dropped back to around $100 a barrel ish from just under $140; production has and is increasing.

 

But

 

Fuel has dropped exactly 5 cents from its record highs.  That's it.  March is almost over which means another bump to the carbon tax which will see fuel prices increase by 15 to 20 cents again; even though the increase is a dime.

 

This insanity at the pumps and clear and obvious price gouging of the people will only further exacerbate out of control inflation.

 

The government will not step in to ease this, there will be no reduction or cap or hold in this carbon tax increase.  Feds and provinces are making an absolute fortune in tax money from fuel sales.

 

Think it's tough now?  Wait 2 months.

[nuckin_futz]

6 minutes ago, Warhippy said:

One thing I would like to point out.  Especially for the lurkers from AB who I hope are still around (you know who you are)

 

Oil has now dropped back to around $100 a barrel ish from just under $140; production has and is increasing.

 

But

 

Fuel has dropped exactly 5 cents from its record highs.  That's it.  March is almost over which means another bump to the carbon tax which will see fuel prices increase by 15 to 20 cents again; even though the increase is a dime.

 

This insanity at the pumps and clear and obvious price gouging of the people will only further exacerbate out of control inflation.

 

The government will not step in to ease this, there will be no reduction or cap or hold in this carbon tax increase.  Feds and provinces are making an absolute fortune in tax money from fuel sales.

 

Think it's tough now?  Wait 2 months.

Pretty certain they charge a fixed amount/litre. Something like .37 cents/litre. So if prices increase it's of no benefit to them as the number of litres sold remains constant.

 

If price really escalated then people would curtail their use. That would negatively effect government as the total amount of litres would have dropped.

[Warhippy]

10 minutes ago, nuckin_futz said:

Pretty certain they charge a fixed amount/litre. Something like .37 cents/litre. So if prices increase it's of no benefit to them as the number of litres sold remains constant.

 

If price really escalated then people would curtail their use. That would negatively effect government as the total amount of litres would have dropped.

They collect pst off of every litre.  Municipal levies and the provincial positively affect the coffees regionally.

 

To my knowledge at least.

 

Bottom line is we're getting gouged horribly, china is shutting down for a week or two based on recent outbreaks and that may spread to major port cities soon not just Shanghai.

 

Things are going to get a lot harder in short order I'm thinking.  Opinion based only but something HAS to give at this point

[Ilunga]

7 minutes ago, nuckin_futz said:

Pretty certain they charge a fixed amount/litre. Something like .37 cents/litre. So if prices increase it's of no benefit to them as the number of litres sold remains constant.

 

If price really escalated then people would curtail their use. That would negatively effect government as the total amount of litres would have dropped.

According to this article, Vancouver residents pay the highest taxes on petrol in your country.

Apparently there is another federal carbon tax coming at the end of the year that will add 16 cents a litre at the pump.

 

https://vancouver.citynews.ca/2022/03/03/bc-gas-prices-government-taxes/

 

Meanwhile here in Aus with an election looming there is talk of cutting/ lowering the federal fuel excise 

 

https://www.theguardian.com/australia-news/2022/mar/27/scott-morrison-spruiks-cost-of-living-package-as-expectations-of-fuel-excise-cut-grow

 

 

 

[Bure_Pavel]

On 3/22/2022 at 1:15 PM, I.Am.Ironman said:

Has anyone asked for a wage bump to match inflation? I know my income hasn't changed.

Inflation and raises in min wages recently means every worker should get a decent bump in wage, if you dont you are getting left in the dust. The main reason people dont get raises is they dont ask or undervalue themselves. 

[Warhippy]

1 hour ago, Bure_Pavel said:

Inflation and raises in min wages recently means every worker should get a decent bump in wage, if you dont you are getting left in the dust. The main reason people dont get raises is they dont ask or undervalue themselves. 

Which is why we're seeing a massive migration or "The Great Resignation" as millions of people leave positions they've been at for years for similar or identical positions for far more money or more benefits as starting employees.

 

People finally have options, it is absolutely amazing that someone in a position for almost a decade can be making less than a new hire; but that is what we're seeing.  Like being a Rogers/Telus/Bell customer and seeing your bills climb endlessly; knowing you can join a new contract with one of the other big 3 providers with far lower bills and far better incentives.

 

https://www.usatoday.com/story/money/2022/01/04/great-resignation-number-people-quitting-jobs-hit-record/9083256002/

[Warhippy]

Brace yourselves.

 

Here it comes.

 

The soft landing they are hoping for might turn out to be a vertical thud

 

https://www.cbc.ca/news/business/interest-rate-analysis-1.6402439

 

For Carlos Capistrán, an economist with Bank of America, strong language like that from a central banker is a clear sign that "everything is on the table," when it comes to bringing down inflation.

That type of tough talk is the banks' way of saying "We're really going to fight this forcefully if we need to," according to Capistrán.

It's why he's hiked up his rate forecast since Kozicki's speech, to include not just one but three big hikes in quick succession. He's now projecting the central bank to hike by 50 points at each of its next three meetings in April, June and July, and follow those up with smaller ones after that into next year until the bank rate sits at 3.25 per cent.

That's almost double the 1.75 per cent the bank's rate was at before the pandemic, and you'd have to go back to 2008, before the financial crisis, to find the last time the rate was that high.

To Capistrán, the reasons to speed things up are obvious. "Inflation is pretty high, the economy is really hot, the labour market is really hot in Canada and the [U.S.] Fed is about to hike 50 basis points as well," he said in an interview. "So there are a lot of reasons why they may be more aggressive than usual this time around."

 

Edited March 31, 2022 by Warhippy

[Warhippy]

And mortgage rates in the US are now spiking.

 

https://time.com/nextadvisor/mortgages/mortgage-news/mortgage-rates-rose-again-amid-inflation-ukraine/

 

Food and Fuel costs are skyrocketing leading to a 40 year high in the US.

 

https://abcnews.go.com/US/wireStory/key-inflation-gauge-sets-40-year-high-gas-83783473

 

Consumer inflation at 30 year high in Canada PRIOR to the issues in Ukraine

 

https://www.bloombergquint.com/global-economics/inflation-hit-5-7-in-canada-before-prices-spiked-on-ukraine-war

 

From a purely domestic point of view this is a bad thing.  but looking at these stories being literally commonplace among the G 20 right now shows how much of an issue and how on the brink the world is to economic failure.

 

Good times.

[Warhippy]

Some potential relief on the food front.  Beef MAY get cheaper; but I doubt it

 

https://www.thestar.com/business/2022/03/30/class-action-lawsuit-filed-in-quebec-against-meat-packing-companies-for-price-fixing.html

[The Lock]

I have to admit. I'm more surprised it's only an 18 year high. lol

 

Between Covid and Ukraine, I would have just shrugged if they even said 80 year high. 

 

Edit: Oh.... this OP posted in 2021.... well then....who wants to bet it's higher? lol

Edited April 1, 2022 by The Lock

[Chris12345]

6 hours ago, Warhippy said:

Brace yourselves.

 

Here it comes.

 

The soft landing they are hoping for might turn out to be a vertical thud

 

https://www.cbc.ca/news/business/interest-rate-analysis-1.6402439

 

For Carlos Capistrán, an economist with Bank of America, strong language like that from a central banker is a clear sign that "everything is on the table," when it comes to bringing down inflation.

That type of tough talk is the banks' way of saying "We're really going to fight this forcefully if we need to," according to Capistrán.

It's why he's hiked up his rate forecast since Kozicki's speech, to include not just one but three big hikes in quick succession. He's now projecting the central bank to hike by 50 points at each of its next three meetings in April, June and July, and follow those up with smaller ones after that into next year until the bank rate sits at 3.25 per cent.

That's almost double the 1.75 per cent the bank's rate was at before the pandemic, and you'd have to go back to 2008, before the financial crisis, to find the last time the rate was that high.

To Capistrán, the reasons to speed things up are obvious. "Inflation is pretty high, the economy is really hot, the labour market is really hot in Canada and the [U.S.] Fed is about to hike 50 basis points as well," he said in an interview. "So there are a lot of reasons why they may be more aggressive than usual this time around."

 

Oh yea rate increases coming but honestly if you didn't know that two years ago and plan for it your head was up your butt.

[Warhippy]

34 minutes ago, The Lock said:

I have to admit. I'm more surprised it's only an 18 year high. lol

 

Between Covid and Ukraine, I would have just shrugged if they even said 80 year high. 

 

Edit: Oh.... this OP posted in 2021.... well then....who wants to bet it's higher? lol

Between what has happened in housing and personal/consumer debt and the issues with Ukraine/supply chain and pandemic I expect to see a 50-60 year high announced soon.  Interest rates as indicated could hit 3% to 5% within 6 months with rumours that fixed rate mortgages and loans might also potentially be at risk somehow

 

Things gonna get ugly soon

 

28 minutes ago, Chris12345 said:

Oh yea rate increases coming but honestly if you didn't know that two years ago and plan for it your head was up your butt.

A lot of businesses and people have been playing fast and loose with credit and loans since 2009.  Something has to give.  Over a decade of essentially printing money and near negative interest rates for consumers and businesses has kind of made people complacent.

 

one of the scariest numbers not reported or recorded is reverse home loans or whatever those are.  It was billed and geared towards retirees wen it was first created but now people have extended their lines of credit and spending by using reverse home loans/mortgages to purchase, spend and enjoy life a little more.

 

I actually know of a few people that do or have done it a few times since 2009 to take advantage of artificially low rates.  Buy a new vacation property using that loan as a downpayment.  hey a new car, oh we need a time share.  Let's renovate the new place.

 

All on credit, loan or the like.  Reading in to things about seeing an additional $500 per month tacked on to the average loan of even $400,000 if rates hit 3.5% or there abouts is frightening.  because reports indicate that even $280 a month in new spending would send tens of thousands in to potential insolvency; and the majority of new mortgage holders have mortgages far far in excess of $400k

 

Gonna be interesting.

[Chris12345]

5 minutes ago, Warhippy said:

Between what has happened in housing and personal/consumer debt and the issues with Ukraine/supply chain and pandemic I expect to see a 50-60 year high announced soon.  Interest rates as indicated could hit 3% to 5% within 6 months with rumours that fixed rate mortgages and loans might also potentially be at risk somehow

 

Things gonna get ugly soon

 

A lot of businesses and people have been playing fast and loose with credit and loans since 2009.  Something has to give.  Over a decade of essentially printing money and near negative interest rates for consumers and businesses has kind of made people complacent.

 

one of the scariest numbers not reported or recorded is reverse home loans or whatever those are.  It was billed and geared towards retirees wen it was first created but now people have extended their lines of credit and spending by using reverse home loans/mortgages to purchase, spend and enjoy life a little more.

 

I actually know of a few people that do or have done it a few times since 2009 to take advantage of artificially low rates.  Buy a new vacation property using that loan as a downpayment.  hey a new car, oh we need a time share.  Let's renovate the new place.

 

All on credit, loan or the like.  Reading in to things about seeing an additional $500 per month tacked on to the average loan of even $400,000 if rates hit 3.5% or there abouts is frightening.  because reports indicate that even $280 a month in new spending would send tens of thousands in to potential insolvency; and the majority of new mortgage holders have mortgages far far in excess of $400k

 

Gonna be interesting.

So scary. 

 

It's Canada so realitively safe but man I'd hate to unload my whisky collection!

[Warhippy]

1 minute ago, Chris12345 said:

So scary. 

 

It's Canada so realitively safe but man I'd hate to unload my whisky collection!

HAhahaha I now have 103 total bottles of whiskey, bourbon...booze in general.  I have enoguh to weather the storm!

 

And no sir.  Canada is anything BUT safe.  We owe, as a nation per person something like $1.70 for every dollar earned in debt servicing.  The average person from a former MNP survey from last April, said they were a mere $200 a month in additional payments from insolvency.  53% of that survey and that was year ago before gas, food, housing all spiked like mad and now rates are increasing

 

https://www.bnnbloomberg.ca/53-of-canadians-within-200-a-month-of-insolvency-mnp-1.1587379

 

I'd say if anything, we here in Canada are more exposed than anyone could believe or would want to believe.

[Chris12345]

6 minutes ago, Warhippy said:

HAhahaha I now have 103 total bottles of whiskey, bourbon...booze in general.  I have enoguh to weather the storm!

 

And no sir.  Canada is anything BUT safe.  We owe, as a nation per person something like $1.70 for every dollar earned in debt servicing.  The average person from a former MNP survey from last April, said they were a mere $200 a month in additional payments from insolvency.  53% of that survey and that was year ago before gas, food, housing all spiked like mad and now rates are increasing

 

https://www.bnnbloomberg.ca/53-of-canadians-within-200-a-month-of-insolvency-mnp-1.1587379

 

I'd say if anything, we here in Canada are more exposed than anyone could believe or would want to believe.

On the whisky....that's unreal. I thought I was doing well at 20+ bottles!

 

On Canada...I get all the numbers but JT is soft. Just keep printing money or some other false solution. He won't let it happen. There's a housing decline coming for sure but I don't think it will be brutal. Rough for sure but not brutal.

 

 

Edited April 1, 2022 by Chris12345

[24K PureCool]

On 3/29/2022 at 1:37 PM, Bure_Pavel said:

Inflation and raises in min wages recently means every worker should get a decent bump in wage, if you dont you are getting left in the dust. The main reason people dont get raises is they dont ask or undervalue themselves. 

Oh yeah for sure. I'm looking for a new job now partly because my company is parading around a 2% increase like they are saints while others in the field are giving out 10% increases left and right not to mention the stinginess of giving out laughable equity compensation. Do they really think a 10 stock per year equity priced at well below $100 is gonna make me hesitate from leaving? 

 

My co-workers all laughed how the 'pay bump' will barely cover gas to drive into the office let along the insane increase in cost of living that is making us the second most un-affordable place to live in North America right after Vancouver. 

[Alflives]

9 minutes ago, 24K PureCool said:

Oh yeah for sure. I'm looking for a new job now partly because my company is parading around a 2% increase like they are saints while others in the field are giving out 10% increases left and right not to mention the stinginess of giving out laughable equity compensation. Do they really think a 10 stock per year equity priced at well below $100 is gonna make me hesitate from leaving? 

 

My co-workers all laughed how the 'pay bump' will barely cover gas to drive into the office let along the insane increase in cost of living that is making us the second most un-affordable place to live in North America right after Vancouver. 

As interest rates spike housing prices will collapse.  We could see a 50 - 70 % adjustment in housing prices in markets like here.  1.3 mil will become 500 k.  Prices in some areas could come down even more.  A lot of home owners will be handing their keys to the banks.  The banks will then sell those homes at greatly reduced prices (taking losses) but write of those losses anyway.  The middle class will pay the freight for the next economic collapse.  

[nuckin_futz]

@WarhippyDunno how to quote from one thread to another ........ Here was your post in the other thread ..........

 

Hearing that some nations run the risk of potential default as well if rates increase to high which is absolutely beyond baffling to me.

 

This is from last year.  $200 from 53% of respondents in new spending, would be enough to send them to insolvency.  That $200 would be the equivalent of rates going up to 2% on a $400k mortgage.  without mentioning credit card debt, car loans, variable lines and reverse home loans/mortgages of that nature.

 

This covid shut down of China could be the proverbial straw that broke the camels back.

 

Hell, people forget but the Icelandic banking crisis.  That was brought about by one single series of developments in the Philippines (or was it thailand?) going teets up as part of the holdings of Lehman Bros.  it was the first major eye opener to the issues of an interconnected global economy before the entire thing tumbled.

 

This is interesting.

 

Wanna take it to the inflation thread?

 

**********************************

 

How do you default on anything when you have a printing press? Unless you're one of those s-hole countries and your debt is denominated in USD. In that case you can still print dough. You'll just wind up devaluing your currency.

 

If $200 bucks in additional expenses will destroy 53% of people and ruin the economy the government will step in with stimulus cheques. You can bank on that. It's always their 'go to' move. Reminds me of that Led Zep lyric from 'Livin Lovin Maid' it goes "when your conscience hits you, knock it back with a pill". When the bills come due govts always print.

 

Covid in China is a wild card. But they will stomp it out by any means. Plus I believe it's Omicron going around there. They will get through it quickly. Same as we did. I think the worst of Omicron in most countries was something like 6 weeks.

 

Iceland isn't a good example. What they did was just plain stupid. A sleepy little country in the middle of nowhere who's main industry was fishing tried for some reason to become a banking power. It ended as it always gonna end by going kaboom.

 

It was Thailand you're thinking of. Only it wasn't 2008 and wasn't connected to Lehman. It was what started the Asian Financial Crisis in 1997. Thailand had their currency pegged to the USD. IE) at a fixed rate that didn't move. One day they removed the peg and let it float freely. It set off a chain of events where many of the Asian 'Tiger' economies saw their currencies get absolutely pummelled. With so much of finance being global (even back then) it set off a global chain of events that had over leveraged people running for their financial lives.

 

It's funny because the total amount of capital that fled was about $100 Billion dollars. Nowadays that is complete chump change. The Fed can create that in no time, and they do.

 

In 2015 there was another example of a clueless central bank creating chaos. The Swiss had their currency the 'franc' pegged to the Euro at a rate of 1.20. The peg was in place for 3 years. When all of a sudden in what was the middle of the night in New York they abandoned the peg without a word of prior warning. Just put out a simple press release that said something like 'effective immediately we are abandoning the peg to the Euro'. What ensued was absolute chaos.

 

The Swiss franc is one of the 5 main currencies in the world. Not exactly the Thai Baht.

 

 

 

Edited April 1, 2022 by nuckin_futz

[24K PureCool]

21 minutes ago, Alflives said:

As interest rates spike housing prices will collapse.  We could see a 50 - 70 % adjustment in housing prices in markets like here.  1.3 mil will become 500 k.  Prices in some areas could come down even more.  A lot of home owners will be handing their keys to the banks.  The banks will then sell those homes at greatly reduced prices (taking losses) but write of those losses anyway.  The middle class will pay the freight for the next economic collapse.  

Lol good thing I am a broke millennial or Gen Z. I don't know what I am.