Quote:
Originally Posted by Slava
I disagree though, largely because we heard the same arguments after 2008-09. People were predicting $5000/oz gold because of hyper-inflation and there was "no way they could get that money out of the system". Well, it's easy to see now that we weren't dealing with hyper-inflation, they did get the money out and in fact what we saw was issues with deflation.
But more than this, its odd to blame the BoC. In a country where we routinely see that people have terrible financial literacy, the thought is they're actively paying attention to the comments Macklem made and making life decisions based on them? Gimme a break. People *might* look now, based on the newsworthy inflation issue, but even then I think that most Canadians go about their day and pay zero attention to what the Governor of the BoC has to say.
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It wasn't just some random guy. It was the head of the BoC. If the average person has no financial literacy, that just means they are more reliant on the people in charge.
There were likely many people who relied on those BoC statements when deciding whether to go fixed or variable. I also guarantee that many bank "advisors" brought those same statements to their customers attention when signing their mortgage papers.
The BoC, two years ago, should have said interest rates are historically low and there is a massive amount of uncertainty in the economy moving forward. That was the truth. They wanted to encourage people to take loans to simulate the economy and, totally unnecessarily btw, acted recklessly. Recklessness is not a quality I want in the head of the BoC. People should be sacked.