Before we begin, I encourage you to click on this song to play in the background while you read. It always pumps me up and it might put the spring back into your step at least for a few minutes. 

https://youtu.be/gCWj8Nz5DUg?si=br24qxYd72xHh8Cp

Yesterday, the Federal Reserve held the line on interest rates. The Fed Chairman stated that they will let the markets know when they are good and ready to lower rates. Inflation remains heightened and the Job market is tight, at least from their metrics. Is there a disconnect from reality or are their indicators out of line? The Power is the money and the money controls the optics of what they want us to believe. 

Meanwhile, a question was recently posed on a site, stipulating that the Real Estate market is ready to take off once interest rates start coming down. Of course, it was from the perspective of a Realtor. I just had to respond and did. 

It won’t be enough, even when they do, how much of a drop will we expect after the rates have risen exponentially? A minimal reduction will not have the desired effect to keep the real estate market from imploding. Especially, in Canada, with almost 40% of mortgages coming due at the end of this calendar year. 

In my opinion, it is wishful thinking when inflation is still high and government spending is out of control. The personal debt loads are tremendous as interest rates increase exponentially in comparison to people’s income. 

The difference over the last 20 years is the fact that the increase in housing prices has made it easy for homeowners to refinance when in difficulty as credit facilities were readily accessible.

The homeowner will soon see the ugly reality of a doubling or tripling of costs. Individuals could contemplate walking away from ownership to restore dignity in their personal lives. The only way to avoid it is to go into a reverse amortization which the Ombudsman stated was illegal for the banks to do so, specifically concerning mortgage amortization.

The bankers are trying to avoid an implosion in their residential lending portfolio because they base their lending on valuations. Guess what, if values fall they will call in the loans. Cash will be King and a scenario like the subprime catastrophe could repeat. Canada is not immune. 

Introducing Carbon Taxes at a time when money is already tight, printing money causing hyperinflation, without accountability or transparency is not what the markets need. People are the priority not the made-up science of unelected globalist elites pulling the world’s strings and puppet leaders. 

Agenda 2030 looks like it is on track, “You will own nothing and be happy”. Some mortgages are already at 100 years to pay off reinforcing the fact that you will own nothing and your future generation will be saddled with consequences of your legacy. All we can hope for is that a solution is found before many lose their homes so that a sense of dignity and pride is restored in homeownership. Presently, the real incentive in the market is to build rental units.

To my delight, my opinion was challenged because the individual claimed to be an educated professional. I just responded by asking that because of their position,  did they think they had a better understanding of the market outcome. I did not want to burst their bubble, but not everyone at renewal will be in a leveraged position to dictate their outcome positively. 

This is when the vultures come out to take advantage of the less fortunate and where integrity is lost at the expense of someone else’s misfortune. People can share different opinions of how things might transpire. I am not here to discredit anyone’s profession, I am just sharing my opinion of what can happen if debt loads aren’t severely reduced and rates don’t come down significantly. 

The Bank of Canada is in a no-win situation because inflation will not come down unless the government reduces spending drastically. Further, they can manipulate the inflation number by altering the basket of goods in their calculations but I think many are very aware that inflation is running much higher than the government states. Case in point, if you heat your home with Gas(a clean source of energy), a carbon tax has been applied. Not only has it been applied as a tax but they also tax the tax. My cost alone has increased by 30% (check your bills, regardless of the rebates they return). An exercise in futility, let the consumer decide. This is absolute nonsense and a factor in the potential downfall of the economy because people are stretched to the limit, robbing Peter to pay Paul. 

Particularly affected are those on fixed income, salaries that aren’t rising as fast as inflation and so forth. Also, let’s not forget the disaster in the City of Toronto with a Mayor who wants to raise taxes 10-16.5%, is this what people voted for? As I stated, for those with resources in troubled times, cash will be king. I assume those agents with wealthy clientele will prosper but at whose expense? Lastly, watch the movie “Good Will Hunting”, one of my favourites, never underestimate anyone in life, regardless of your social status. 

With a new month upon us and after the Fed left things unchanged, the air deflates from the sails of USD strength. Currencies regain their upward momentum as the USD index slips toward the 103.0 level.  The Canadian dollar is approaching the 0.75 cent level more or less on USD weakness, despite Oil slipping toward $76 from a recent high of $79/B. On the other hand, Precious Metals explode significantly higher as Gold breaks through $2060/oz and Silver a foothold above $23/oz.

Lastly,  a reality of the times as residential development projects across the country are increasingly being pushed into receivership.