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Originally Posted by bizaro86
It's strong but it isn't objectively wrong either.
1) he said interest rates would remain low
2) then he raised them
He has direct control over interest rates. I'm not saying he shouldn't have raised them, that was the right choice to fight inflation. But he shouldn't have said they'd remain low for years, because that caused people to make unnecessary economic mistakes. Basically making the economic pain worse for no gain.
I really hate it when powerful people hurt those weaker/less educated than themselves, which is absolutely what happened here.
He either knew or should have known that inflation was a likely outcome from worldwide massively expanding money supply and low interest rates, and that if it came through he'd have to go back on that and raise rates. I guess its also possible he's an idiot, but I think it's more likely he knew that wasn't true and said it anyway to further short term motives at the time.
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He didn't. He said they'd be low for a long time. He didn't define 'long time'.
He said they'd be low as long as inflation was below 2%, which they projected to be at least early 2023.
Every word on those statements is carefully considered. You're misrepresenting them (I'm probably bastardizing them a bit with my paraphrasing, too).
Quote:
Originally Posted by bizaro86
I don't think someone whose broker quotes a bank of Canada promise to keep rates low for years and thus takes a variable rate is a greedy fool.
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No such promise ever happened.
Quote:
Originally Posted by bizaro86
No, like I said now that we have inflation they need to raise rates. But he never should have told people he wasn't going to for years.
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He DID-ENT!
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Originally Posted by blankall
Things change. Exactly. Which is why the BoC shouldn't have been actively encouraging people to take on risky loans.
I'm far from an expert in economics and it seemed painfully obvious to me, as soon as the COVID lockdowns hit and the government responded by printing money, that inflation was almost certainly going to be an issue in the somewhat near future.
The BoC should have just kept quiet about their long term strategy, as it was painfully clear we were headed into a period of uncertainty. That alone could have factored into people's decision for fixed vs variable.
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Lol, when did they encourage risky loans? You really have to twist and misrepresent his statements to get anywhere close to that.
Keeping quiet or saying "we really don't know" would be a powerful statement in itself, likely leading to undesirable outcomes at the time.