"This is the result of cheap credit for long periods of time. You would think central banks would eventually learn this very simple lesson. Cheap/free credit always leads to excessive borrowing (this is their goal) and eventually high levels of speculation (always ignored). The combination of excessive borrowing and speculation will result in market bubbles if allowed to occur unchecked. Eventually all speculative bubbles pop, because the actual real economy can not support certain asset prices back by price manipulation by central banks. Now the Canadian banks are caught deep inside a massive debt bubble and there is no way out without a wide spread market correction of not just housing prices but the debt market in general. Rates need to return to a normal rate to balance off excessive borrowing and speculative activities. The central banks created these debt bubbles and it is come the time to pay the price for their brutal scheme to boost asset prices. When it all said and done these same central banks will say it was impossible to see the bubbles before they popped. I guess they can mark me down as one of the people who can do the impossible." - Wayne Jones
"A downgraded credit rating increases the banks' cost of doing business"
The Canadian government is in deficit year on year, the country’s debt is just shy of $1 trillion dollars, the government borrows money from banks to finance their deficit spending. If the cost of doing business for the banks goes up then so will the cost for the government when they borrow money for their deficit spending, and so will the residential mortgates payment.
Interest only paid by government on the national debt to banks reached an all-time high of $47 billion in 2016, expect this amount to increase. Imagine what the government could do with an additional $47 billion per year; as an example all children’s educational programs in the 2016 fiscal year amounted to $22 billion.
According to "Bank of Canada Act", the tax payer 100% owned Bank of Canada (other than the US Federal Reserve is a private institution) should have lent money to the government for 0% interest for the government to build roads/transits/hospital/infrastructures, BUT the Bank of Canada ONLY print outthe cheap 0.5% interest rate money to the Banks, and all the banks later lend out 10 to 30 times the money amounts they got from BOC’s money print out to the federal provincial governments/businesses/individuals.
People and Governments are so slaved to the Banks who created (printed) money from thin air.
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