Beware the Ides of March, was a quote from the Shakespearean play Julius Caesar it was a statement made by the soothsayer who delivered a premonition of an end to his rule. This week the focus was on both the Bank of Canada (BOC) and the Federal Reserve, delivering their decisions. It’s a guessing game in foreshadowing the future. 

Their decisions can severely impact the lives of many struggling with debt. Basic living becomes a handicap when food and shelter are out of reach for the most vulnerable. The need for stability and health is the essence that keeps people productive. A healthy mind produces a healthy body. Bankers’ rhetoric provides a false sense of hope when they discuss lowering rates, also amplified by others, they make it sound like the next boom is around the corner. In turn, the markets have developed heightened expectations because we are in a position where what we see isn’t actually what it is. Sorry if that sounds like Kamila Harris (lol). 

The Bank of Canada led the week and did the expected, leaving rates unchanged as the Bank Rate remains at 5%, this is the rate banks borrow at to lend to consumers. They will let the Federal Reserve take the lead as they crush people coming up for renewals. Presently, CIBC leads the reverse amortization Realestate Portfolio with $38.1 Billion in debt. Mortgage holders simply meet interest obligations only. You will own nothing and be happy? Many didn’t believe the warnings. Nonetheless, because interest rates also attract investment flows rates need to stay elevated to keep the governments propped up, otherwise money goes elsewhere. How else can they fund a $ 1.2 trillion deficit, in Canada, to pay the Banker’s untold Billions? 

Next on the docket was testimony from the Federal Reserve. They remained optimistic but firm in leaving rates unchanged for now. They mention that the results of the economy would dictate their next move. Nonetheless, Non-Farm Payrolls came in @275k vs expected (200k), higher than anticipated and follow-through from an unexpected (350k) increase the previous month. Then ISM Mfg PMI drops to 47.8 in February vs expected (49.5). This shows a contraction in Mfg and the possibility brought on by higher production costs overall. Things are getting out of hand, possibly by design. 

Despite, the positive jobs data the USD Index continues to fall aggressively, now in the 102.50 vicinity. Recently, it was above the 104.0 range. Something isn’t right, as expectations for a rate cut diminished yet the USD should be stronger, not weaker. 

Meanwhile, Gold is booming approaching the $ 2200 USD/oz level and Silver is roaring above the $24/USD/oz range. On the other hand, Oil remains firm at around $78/B and the Canadian Dollar is heading back to the 0.74 cent level. 

When something seems too good to be true, it usually is. The markets have been quietly positive and information relayed might give the impression that things are improving especially in North America. Yet, something just doesn’t feel right. This week saw the Canadian banks write off a total of $3 Billion in Loan Losses that are incorporated to prop up their balance sheet and maintain share prices. A shell game of reality. 

Consequently, with the manipulation of reverse amortization and high interest rates trying to show their positive impact on fighting inflation the fabric of human society is eroding. If rates don’t decrease significantly, much more pain will be forthcoming. Also, they are doing this to avoid a flood of houses onto the market because it will make prices plummet and the banks lend based on valuations. If the prices fell below their lending threshold, the markets would implode. Cash would be king and people would have nothing left other than the clothes on their backs.