*Updated* Ongoing Bank of Canada Benchmark Rate Announcements

[opendoor]

Originally Posted by blankall

You don't look at the price just at a year ago. You look at the average over the year. Oil price also started to slide in May of 2022. So by 1 year ago, they were sliding. Any way you slice it, a month of increasing oil prices are going to add to inflation.

For inflation, that's exactly what you look at. It's literally:

Average gas price in July 2022: $1.87/L

Average gas price in July 2023: $1.63/L

July 2023 annual inflation for gasoline: -13%


What it was in May 2022 is irrelevant. It could have been $100/L and it wouldn't change the July 2023 annual inflation reading for gasoline because that's based on only 2 numbers.

[blankall]

Originally Posted by pylon

This is what I don't understand.



This is a direct result of the rise in interest rates, being used to bring down inflation. So your inflation taming tool, is the biggest factor in causing more inflation. Isn't this just the snake eating itself? It all seems like quite the scam at this point.

I'm on a variable and my mortgage could double and we'd still be fine. We wouldn't like it, but we wouldn't be on the street. We didn't buy over our heads. But some people in the entry market, had no choice. If they wanted a home to call their own.... they had to stretch to their limit, that or continue to overpay for rent. I feel for those people.

Is Tiff Maklem gonna go beat his meat for hours when thousands of people start losing their homes? Is this guy getting off on destroying families, putting people on the street and driving them into financial ruin? We had a guy on our street self delete a couple months back, and word through the grapevine was it was directly related to these interest rates. Covid caused him to skate a fine line as it was and these rates were the final nail in the coffin and ruined him financially.

I really think they need to pause for a good 6 months and let these rates sink in a bit.

The double whammy of quickly increasing rates (after the BoC explicitly stated that rates would stay low for a while) and a housing shortage is really rough.

I also think a significant portion of the homeless/drug problem is being caused by the current economic conditions. When regular working Canadians are struggling, there's certainly no room on the fringes.

[blankall]

Originally Posted by opendoor

For inflation, that's exactly what you look at. It's literally:

Average gas price in July 2022: $1.87/L

Average gas price in July 2023: $1.63/L

July 2023 annual inflation for gasoline: -13%


What it was in May 2022 is irrelevant. It could have been $100/L and it wouldn't change the July 2023 annual inflation reading for gasoline because that's based on only 2 numbers.

July 2022, during a massive spike in oil prices, the inflation was 8-9%. This year, after another smaller spike, it's 3%. Both in July 2022 and July 2023, oil was contributing to inflation, just to a lesser extent now.

So you can't say that oil isn't driving inflation now, because the price is lower than it was in July 2022. In both July 2022 and July 2023, prices well above averages, and driving inflation. It's just a mater of degree.

[opendoor]

Originally Posted by pylon

This is what I don't understand.

This is a direct result of the rise in interest rates, being used to bring down inflation. So your inflation taming tool, is the biggest factor in causing more inflation. Isn't this just the snake eating itself? It all seems like quite the scam at this point.

No, because they understand what is market-driven inflation and what is a side effect of policy. A 3.5% inflation rate with mortgage interest inflation being 30% is completely different than a 3.5% inflation rate with mortgage interest inflation being flat or negative, and they will proceed accordingly.

And the same happens in reverse. Eventually mortgage interest inflation will be negative. If we have a 2.5% inflation rate but mortgage interest inflation was say -40%, then they would be concerned about inflation even though the headline number is within range. That's because it would be being artificially dragged down by rate cuts.

I'm on a variable and my mortgage could double and we'd still be fine. We wouldn't like it, but we wouldn't be on the street. We didn't buy over our heads. But some people in the entry market, had no choice. If they wanted a home to call their own.... they had to stretch to their limit, that or continue to overpay for rent. I feel for those people.

Is Tiff Maklem gonna go beat his meat for hours when thousands of people start losing their homes? Is this guy getting off on destroying families, putting people on the street and driving them into financial ruin? We had a guy on our street self delete a couple months back, and word through the grapevine was it was directly related to these interest rates. Covid caused him to skate a fine line as it was and these rates were the final nail in the coffin and ruined him financially.

I really think they need to pause for a good 6 months and let these rates sink in a bit.

Essentially that's what's supposed to happen. Higher rates cause people to spend less money and disincentivizes taking on debt, which helps cool demand.

But yes, it does hurt people who are over-leveraged. Which is why anyone taking on adjustable rate loans always needs to proceed very cautiously. There's a reason why they were stress testing mortgages at ~5% when you could get a ~1% variable in 2020 and 2021.

[opendoor]

Originally Posted by blankall

July 2022, during a massive spike in oil prices, the inflation was 8-9%. This year, after another smaller spike, it's 3%. Both in July 2022 and July 2023, oil was contributing to inflation, just to a lesser extent now.

So you can't say that oil isn't driving inflation now, because the price is lower than it was in July 2022. In both July 2022 and July 2023, prices well above averages, and driving inflation. It's just a mater of degree.

Maybe we're talking about different things. I'm talking about the annual inflation number which is what monetary policy is based on and what they're trying to get within their target range. Gas prices pre-July 2022 have zero effect on that because they're simply not part of the data, any more than gas prices from 2005 are.

Central banks aren't trying to get prices back to there they were years ago; that would be deflation and it's more dangerous than inflation. They are trying to achieve price stability at current levels, which means ~2% inflation (starting from current prices) going forward.

[blankall]

Originally Posted by opendoor

Maybe we're talking about different things. I'm talking about the annual inflation number which is what monetary policy is based on and what they're trying to get within their target range. Gas prices pre-July 2022 have zero effect on that because they're simply not part of the data, any more than gas prices from 2005 are.

Central banks aren't trying to get prices back to there they were years ago; that would be deflation and it's more dangerous than inflation. They are trying to achieve price stability at current levels, which means ~2% inflation (starting from current prices) going forward.

And price increase over the last few months have been contributed to by increased oil prices.

The discussion is whether the current inflation is being caused by an overheated market, that needs more cooling, or a combination of external factors, like increased oil prices, and the increased interest rates themselves, which are increasing debt servicing costs and housing costs.

[chemgear]

https://www.cbc.ca/news/canada/calga...ship-1.6937515

Calgary Humane Society overloaded with surrendered pets, amid surging costs of ownership

"We simply cannot keep up with the demand coming from the community," said Anna-Lee Fitzsimmons, associate director of community engagement.

"We're even having a hard time adopting out puppies and kittens; … normally it's quite simple to get those animals adopted."

"For some people, it's about putting food on the table for their family or getting their dog the dental surgery that it needs, and they can't really afford both," said Fitzsimmons.

At pet stores, food prices are also on the rise.

"For some people, it's about putting food on the table for their family or getting their dog the dental surgery that it needs, and they can't really afford both," said Fitzsimmons.

Doodle Dogs, a Calgary-only dog supply retail chain, has seen its pet food and accessories prices increase by about 14 per cent since 2022, according to co-owner Corey White.

"The disposable income isn't there, right?" said White.

[Cecil Terwilliger]

Don’t blame them. Vets have always been an overpriced scam but cat food has literally doubled in price in the last 18 months. It’s hard to justify a minimum of $100 a month on food/litter for my cat. I can’t imagine what people with multiple pets or large dogs must pay.

[GGG]

More likely that its pandemic regret rather than money causing the current surge in surrendered pets.

No one giving up their pet is going to tell the truth that they made a mistake adopting an animal when they were WfH on the pandemic. They are much more likely to tell a story where the blame is projected onto something else.

Adoptions of puppies and kittens are probably up for the same reasons. Less people getting new animals because they adopted during the pandemic and more irresponsible owners not getting dogs and cats spayed or neutered.

[Fuzz]

Should be a moratorium on pet breeding for a few years. You want a pet? Lots around, no need to pay big dollars for a purpose made pet.

[Cecil Terwilliger]

Originally Posted by GGG

More likely that its pandemic regret rather than money causing the current surge in surrendered pets.

No one giving up their pet is going to tell the truth that they made a mistake adopting an animal when they were WfH on the pandemic. They are much more likely to tell a story where the blame is projected onto something else.

Adoptions of puppies and kittens are probably up for the same reasons. Less people getting new animals because they adopted during the pandemic and more irresponsible owners not getting dogs and cats spayed or neutered.

No, it’s cost. That’s the source of regret. They can’t afford it anymore.

[chemgear]

Originally Posted by Fuzz

Should be a moratorium on pet breeding for a few years. You want a pet? Lots around, no need to pay big dollars for a purpose made pet.

Should also put one in place for humans. Would really work towards solving a lot of global problems.

[flamesfever]

Originally Posted by Cecil Terwilliger

Don’t blame them. Vets have always been an overpriced scam but cat food has literally doubled in price in the last 18 months. It’s hard to justify a minimum of $100 a month on food/litter for my cat. I can’t imagine what people with multiple pets or large dogs must pay.

If it were me, I would check the vet costs in small towns. I understand the vets in small towns tend to charge less than city vets.

[Cecil Terwilliger]

Originally Posted by flamesfever

If it were me, I would check the vet costs in small towns. I understand the vets in small towns tend to charge less than city vets.

And avoid VCA where possible. Evil company.

[Bill Bumface]

Originally Posted by chemgear

Should also put one in place for humans. Would really work towards solving a lot of global problems.

It's taking care of itself. Should only be a couple billion away from peak population.

That said, population peaking means less nodes of innovation. It may stall our rapid pace of innovation, which may or may not be bad news for our ability to survive and thrive as a species.

I'm not smart enough to know the answer, but the thought of the end of crazy population growth is comforting to me. Remind me about that when the world goes to hell because we don't know how to operate in a non-growth state.

[Bill Bumface]

Originally Posted by Cecil Terwilliger

Vets have always been an overpriced scam \

While I agree with this, I'm also perplexed that every independent vet I know is not exactly rolling in it. Is it all the upstream costs?

[you&me]

Originally Posted by Cecil Terwilliger

And avoid VCA where possible. Evil company.

Amen.

I remember a few years ago when we got a new puppy and were talking to our vet about insurance, she told us that Calgary is the single most expensive market in North America for pet insurance and it all comes down to VCA and their pricing, which inflates the entire market. After some VCA consolidation, prices had risen so much that insurance for our two dogs was now going to be more than Blue Cross for our (then) family of 5... GTFOH.

FFWD to last summer and another new puppy with some medical needs. The one VCA facility was the only one in the city with the specialty we needed and they quoted the price of a small car (with a 100% range, you know, just in case)... We were fortunately referred to another vet out of town that was able to perform the procedure for 1/6th of the low end of the VCA quote... And let's be real - there was never a chance the final bill was going to be on the low side of the range provided, so the real savings were probably more like 90%.

#### those guys.

[Fuzz]

Originally Posted by you&me

Amen.

I remember a few years ago when we got a new puppy and were talking to our vet about insurance, she told us that Calgary is the single most expensive market in North America for pet insurance and it all comes down to VCA and their pricing, which inflates the entire market. After some VCA consolidation, prices had risen so much that insurance for our two dogs was now going to be more than Blue Cross for our (then) family of 5... GTFOH.

FFWD to last summer and another new puppy with some medical needs. The one VCA facility was the only one in the city with the specialty we needed and they quoted the price of a small car (with a 100% range, you know, just in case)... We were fortunately referred to another vet out of town that was able to perform the procedure for 1/6th of the low end of the VCA quote... And let's be real - there was never a chance the final bill was going to be on the low side of the range provided, so the real savings were probably more like 90%.

#### those guys.

Man, I thought you had just directed me to a stock to buy. Turns out VCA was bought by MARS, which is private. So I can't even get in on the gouging. Just the worst!

[Firebot]

Powell just had his Jackson Hole speech which alludes that we will be in higher interest rates environment for quite a lot longer, and while any rate hikes may be slower and more prudent the inflation goal is 2% and rates will need to move up to reach this if needed. It also states that a recession or flatline growth will be needed (which is not currently occurring and may need monetary policy adjustments).

https://www.marketwatch.com/story/po...=mw_latestnews

This approach is likely impact our BoC outlook as well, as we are below US rates and too much of a spread will cause the Canadian dollar to tumble further.

In his remarks, Powell repeated his firm intention to get inflation back to the 2% target. He rejected calls to raise the Fed’s 2% target and took no victory lap for the recent benign inflation readings, saying it was just the beginning of what was needed.

Powell said inflation remained “too high,” he said. The Fed “will keep at it until the job is done.”

“We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective,” Powell said at the beginning of his remarks.

Powell said that, getting inflation back to 2%, “is expected to require a period of below-trend economic growth as well as some softening in labor market conditions.”

[Yoho]

https://twitter.com/user/status/1695110620390301754