One year ago, in March, 2022 the Bank of Canada began an aggressive rate hike that saw interest rate increases at each policy meeting, the last of which was at the end of January when the BoC raised by another 25 basis points to top out at 4.5%.
Yesterday, we got word that the BoC has paused hiking rates until further notice. The central bank expects inflation to drop to 3% by this summer, due to lower energy costs. The bank also states that GDP growth has stalled at 0% instead of the expected 1.6%. While Canada's economy has not contracted, neither has it grown.
The BoC is looking now to see the effects of the last year's rate hikes for which there is a lag time of 6 months to a year and a half. For now, it seems us Canadians can rest easy for a bit but the BoC does also state that interest rates may increase as they see fit.
Gold in Canadian dollars climbed a bit to $2,508, peaking at $2,511. While the record is over $2,700 in the summer of 2020, today's gold prices in CAD are very much in 'historical territory'. Since year 2000, gold has risen $2,088.84 for a 501.9% increase.
What an inflation buster!
If gold were to continue to rise in similar fashion over the next 20 years or so, an increase of 500% would imply a gold price well over $10,000 CAD. Based on current world events, whether political, financial or social, that $10,000 CAD target is likely to be reached much sooner.
According to FitchRatings, Canada's debt to GDP ratio reached 107.7% in 2022, a slight decrease from 111.6 in 2021. Now the BoC is telling us that the economy has stalled. I don't see how a stalling economy can improve on the 107.7% debt to GDP ratio. We'll have to wait till next year at this time to get the numbers and see how we fared for 2023.
So far, the BoC is the only G20 member to pause interest rate hikes. Just a few days ago, the Bank Of Australia hiked their rates by 25 basis points to 3.6%. According to abc.net.au/news, that tiny 25 basis point hike adds another $77 in interest on a $500,000 mortgage.
Up next, the Federal Reserve, later on March 21 / 22 following their scheduled FOMC meeting. Consensus is to expect another 50 basis point rate hike. Will they pull a fast one, like a 25 basis point hike instead or go for a pause like the BoC?
We'll find out soon enough, eh?
Consider investing in precious metals.
Peace and love to everyone!
Earn free Bitcoin using CryptoTab Browser.
Purchase any precious metal at OwnX.
Secure your crypto and get $10 in Bitcoin - Ledger Nano X
Support free speech - join Rumble today.
Earn TFuel watching livestreams on Theta tv
Bitify - Buy and Sell Bitcoin marketplace
Videvo - Professional Quality Videos
Subscribe to my blog and hit the 'like' button if you enjoyed this post. Tips are always appreciated.
Check out some of my previous posts.
Never before seen divergence between silver and gold.
Perth Mint busted 'doping' gold bullion sold to SGE.
WGC revises January central bank gold purchases by 45 tonnes.
Will 2023 be the year silver finally breaches its 1980 high?
U.S. mortgage apps drop to 28 year lows.
Sugar and silver - Starting to taste sweet again?
Success! My first Bitcoin purchase went through.
India crushes it with record silver imports.
For the 79th time, what's with this debt ceiling thing?
Fill out surveys - earn valuable points!
