- Joined
- Aug 22, 2007
- Messages
- 2,005
While so many get all twisted up about the interest rate drop (and the bank's not passing it on etc etc), the real result that the Bank of Canada was hoping for is actually coming to fruition.
No, it isn't about mortgage rates, no it isn't about Bank prime rate... it is all about how the world responds to our currency post-announcement.
We wanted a weaker dollar, thus making our Industrial and Agriculture products much more competitive on the world stage - thus stimulating these job creation areas of the economy (not immediately but over the medium term) . By signalling weakness, through a rate drop, we chase people out of our dollar, thus lowering demand and then lowering price people are willing to pay for our dollar on the world stage.
It also helps out Energy industries as the products we sell there are also in US dollars, but most of our costs are in Canadian Dollars.
Now we wait to see how that plays out over the next 6+months as Canadian World-Class goods and services are now "On Sale' in the eyes of the World. Great time to be an exporter given the lower dollar and the many new Trade agreements we have set up in the last 2 years.
Never be drawn into the 'mainstream' narrative.
No, it isn't about mortgage rates, no it isn't about Bank prime rate... it is all about how the world responds to our currency post-announcement.
We wanted a weaker dollar, thus making our Industrial and Agriculture products much more competitive on the world stage - thus stimulating these job creation areas of the economy (not immediately but over the medium term) . By signalling weakness, through a rate drop, we chase people out of our dollar, thus lowering demand and then lowering price people are willing to pay for our dollar on the world stage.
It also helps out Energy industries as the products we sell there are also in US dollars, but most of our costs are in Canadian Dollars.
Now we wait to see how that plays out over the next 6+months as Canadian World-Class goods and services are now "On Sale' in the eyes of the World. Great time to be an exporter given the lower dollar and the many new Trade agreements we have set up in the last 2 years.
Never be drawn into the 'mainstream' narrative.
