I've been so busy around the house lately that I neglected my blog for a whole month. Central Banker news in the last 24 hours though, was something I just had to pass on to my readers. It's so important to keep track of their shenanigans as it affects our lives in so many ways. Read on...
Rumors swirled in the last week that the Bank of Canada was set to cut rates for the first time since their last rate hike, less than a year ago in July, 2023. Yesterday morning, those rumors became fact when the BoC cut their prime lending rate by 25 basis points or a quarter percent. In doing so, Canada is the first of the G7 countries to reverse course and begin a new easing program.
This is also Canada's first rate cut in 4 years. Inflation hit a three year low of 2.7% in April, which marked the fourth month in a row that inflation was below 3% but still above the central bank's target of 2%. Consumers had less discretionary spending money these last couple of years due to high interest rates, putting a strain on inflation.
In a span of just 16 months, the BoC went on a hiking spree, jacking up interest rates by 4.75% to two decade highs, shocking mortgage holders as they renewed their mortgages and seeing their monthly payment spiking by hundreds of dollars per month. Credit card holders felt the pinch too, as well new car buyers. Restaurants are going belly up everywhere because, again, less discretionary spending.
Now that they've begun easing, there's no turning back. We WILL see more rate cuts and soon. In fact, this morning, the European Central Bank (ECB) also announced a quarter percent rate cut, becoming the second G7 country to cut rates. The Swiss and the Swedes have also jumped on the bandwagon. With massive government debt, there's no way they can continue at these high rates, simply because they cannot afford it. The USA now has trillion dollar interest payments because of their astronomical debt, approaching $35 trillion, which does not include unfunded liabilities, like old age security.
Historically, during an election year in the USA, a rate cut is usually factored in. Now, going back three years ago, it was the BoC that began the rate hike cycle, one month before the FED started its own rate hikes. I can pretty much guarantee the FED will cut rates in the next month, following the BoC's example, exactly as they did three years ago.
All this excitement has spilled over into the S&P 500 and the Nasdaq, which hit fresh record highs yesterday. Investors are already pricing in a FED rate cut by July or September at the latest.
Gold spiked on the news to about $2,370 while silver is at about $30.31 this morning. Most people aren't aware that silver is at a decade high. Word coming out that India and China are scooping up massive amounts of silver is helping push prices higher. In January, India imported some 637 tons. The very next month, imports rocketed by 260% to 2,295 tons, a record haul. This is due to their implementing massive solar power plants and I can assure you, their silver buying spree is far from over. There's word that silver could hit $50 this summer. I wouldn't doubt it.
Just look at copper. According to Business Insider, copper hit a fresh 52 week high two weeks ago. Now that central banks have started reversing course, expect commodities like copper and precious metals to soar over the next couple of years.
See links in the reference section for for information.
Coffee drinkers love Morning JAVA! Follow my new series:
Most Recent Posts
We need a good laugh now and then. May 6
FED holds rates, eases Q.T. May 2
The Bitcoin Halving #4 April 14.
Gold hits record intraday high $2,400 Apr. 12
Are university degrees worth it? April 4
Gold skyrockets but look at oil too! April 1
View All Morning Java Posts.
Consider Donating Bitcoin: My Public Address...
bc1qx5skjkw35djfs8spm6xmyrwhxmvdewjs99tww2
Thank you for your support!
The only coffee company I'm affiliated with, Cooper's Cask Coffee Co.
First time buyers get 10% off. Use code 'FIRSTTIME'.
10% off all products in the store, free shipping over $39.95
USE CODE: FIRSTTIME ( First time orders)
Thank you for supporting my sponsors.
Buy Silver! Visit my eBay channel.
Cooper's Cask Coffee Co. 10% Off First Order w/ code 'FIRSTTIME'
Printpapa - Get 20% off your first order!
Milk Road - Bitcoin newsletter
Bitify - Buy and Sell Bitcoin marketplace
Fire Maple Gear. 5% Off First Order w/ code 'FM5'
ShareAsale - $$ Affiliate Marketing $$
I'm also on Substack with occasional new podcasts and now also on Twitter / X.
Thanks for dropping by.
Subscribe and join the club!
Tips are always appreciated!!
