CANADIAN INTEREST RATE TRAP...PEOPLE CANNOT AFFORD FOOD OR HOUSING!!!

The Bank of Canada is TRAPPED!!!

The lowest historical rate for the Canadian dollar vs U.S. dollar was $.61 on August 21, 2002.

Currently it is hovering around $.68, only $.07 to go!

To protect the Canadian dollar the interest rate needs to be increased but cannot be!

      CANADIAN FOOD RIOTS may very well take place as much of the fresh produce is imported and food prices have been increasing at a breath taking pace.

Then there is the Big Achillis Heel…Housing.

The two largest cities, Vancouver and Toronto have average house prices in excess of $1 million! Canadian mortgage rates are not fixed but are renewed at the market rate every 3 to 5 years.

The Bank of Canada cannot increase rates because then homeowners would not be able to afford the increased mortgage payments.

The Bank of Canada cannot further lower interest rates or head into negative territory because the Canadian dollar would fall even lower and food prices would spike even higher.

There will be a stampede to sell, and the sales inventory as a result would increase significantly thus driving down home prices as everyone races to the exit!

Ontario, Quebec and British Columbia are expected to be the engines to help pull the economy along, since Alberta has been slammed by the oil collapse.

GOOD LUCK WITH THAT!

Much of the manufacturing section was decimated several years ago when the Canadian dollar reached parity with the U.S.

Takes time to rebuild the manufacturing sector and then there is the problem that consumption in the U.S. has been significantly declining.

Everyone cannot sell to the same market!

Historical information taken from Wikipedia