Just got word the BoC has just increased its key lending rate (for the fourth time this year) by another 3/4 percent with the overnight rate now set at 3.25%. The Governing Council still expects more rate hikes 'given the outlook for inflation'. This action pushed the price of gold in Canadian dollars to $2,245, up 0.35% on the day.
Tomorrow, it's the Bank of England's turn and as was expected with the BoC, the BoE is also expected to hike by 75 bps, to fight inflation just as the U.K. and the rest of Europe head into the mother of all winters after Russia turned off its Nordstream1 gas pipeline indefinitely last Friday, at first claiming it was because of a leak but then admitted it was purely a political move to counter western sanctions. Later this month, the FED is also widely expected to raise by 75 bps.
I'm so glad I locked my mortgage in for 5 years at 2.69% and have another 3 years to go. According to an article on Zero Hedge this morning, the average 30 year mortgage loan rate now averages 6.25%. Those who are renewing this fall / winter are in for a shock and will see a big chunk of their disposable income get eaten up by fast rising lending rates.
Oil fell below $90 USD overnight. WTI crude is at $82.30 while Brent crude is at $88.35 per barrel. The dollar hit a new fresh 20+ year high. The U.S. dollar continues to rally with the dollar / yen exchange rate hitting a high not seen since the 90s. Japan is one of the few countries to not raise rates, along with China and Russia while the Euro is at a 35 year low against the dollar.
Bitcoin fell below $19,000 USD to a low of $18,644 and a high of $19,119 and as of writing, Bitcoin is sitting at $18,996 and change. The high dollar is putting a damper on Bitcoin's price but that certainly doesn't mean the dollar is the better investment. The only reason the dollar is high at this point is because most of the other currencies are being ditched in favor of a strong dollar but is a strong dollar good for the American economy. Sure, Americans can get things on the cheap but when it comes to everywhere else on the plant, it just got a lot more expensive to buy American goods. Not good for the American economy.
But don't worry. According to Chairman Biden, we are not in a recession. Nothing to see here, folks.
Then again, when 'Big Short' Michael Burry speaks, the smart folks listen. He's back in the news this morning as he reiterates that the stock market is in the middle of 'the mother of all crashes'. Burry likens today's market conditions to that of 2008 ( the start of the GFC) and 2000 (tech stock bubble). Last night, he tweeted, '“Crypto crash. Check, Meme crash. Check. SPAC crash. Check. Inflation. Check. 2000. Check. 2008. Check. 2022. Check.”.
If Burry says we're headed for a market crash, I believe him. He's really good at what he does. So good in fact that they made a feature film about him. I'm getting ready, are you?
Update: Sept. 8, 2022: I realized I made an error in stating the Bank of England was set to raise rates today. For some reason, I got the BoE confused with the ECB or European Central Bank. It is the ECB that raised rates this morning by 75 basis points. After having negative rates since July, 2012, the ECB finally has a 'positive' interest rate of 0.75%. Is it only clear to me that the bankers are raising rates as we head not into a recession but a depression? Time will tell...
Check out some of my other posts...
Shocking: U.K. uitlity bills skyrocket by as much as 10X!
Heads or Tails: Another rate hike for September?
Getting ready for the coming cold, cold winter.
Have we finally reached 'peak purchasing power'?
Dehydrating - A great way to store food for winter.
Update on my backyard ''Victory Garden'.
Getting ready for the coming food shortage.
The food shortage that doesn't have to happen!
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