Dominic Darmanin

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When Will the Bank of Canada Do Something?

In a recent article on ZeroHedge, Tyler Durban wrote and article (Why The Bank Of Canada Should “Cease and Desist”) and posed the question why the Bank of Canada doesn't step in and raise interest rates to cool down the Canadian housing market. After all, historically low interest rates (along with other factors) have certainly contributed greatly to this absurd feeding frenzy on Vancouver and Toronto real estate.

Economists that Mr. Durban cites claim that manipulating interest rates is too “crude” an implement to deal specifically with the housing market price explosion as other sectors of the economy will be impacted. Sounds reasonable on the surface, however their low interest rate policy seems to only continue to fuel the fire. So do we carry on along this path and wait for what exactly? International financial turmoil, war, stock market collapse, banks globally collapsing, commodity manipulation exposed? What is the Bank of Canada waiting for? Isn't it better to influence the economic direction of our own country rather than wait for some external force to make those decisions for us?

I've written previously about the Bank of Canada not adhering to its mandate of providing interest free to low interest loans for federal and provincial infrastructure and social programs and how in 1974 the creation of money was ceded to the big banks in Canada. When is the Bank of Canada going to step up and do something positive for the betterment of Canadians?

It seems I can pose all the questions I want but the fact remains those that govern over us and those appointed to represent our nation's best interest often seem to have their own agenda which we are not privy to.

OK Stephen Poloz (appointed Chairman of the Bank of Canada) let's just sit back and wait for some possibly catastrophic event to occur to dictate our interest rate policies; great strategy! In the meantime provincial and city governments continue to impose more taxes to try and restrain the housing market, another punitive measure which impacts many innocent Canadians caught up in this real estate mania. Or let's continue to let the Banks and CMHC change the lending requirements making more challenging for all Canadians to even qualify for a mortgage. These blunt tools are OK, but the Bank of Canada actually taking the initiative and doing something is too crude. What's the point of having a Bank of Canada then?

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