Canadian inflation down to 2.3percent.

[monte]

http://www.theglobeandmail.com/report-on-
business/economy/inflation-takes-a-breather-in-
canada/article2309065

What do you guys think of this?
Interest rates staying low?
Canadian dollar going higher?

[bucket]

Raise interest rates 1 percent and everyone that owns an overpriced house is underwater. And there is alot of that.

[SASKFARMER3]

Take Interest to 5 percent from 2.99 on
a 25 year home mortgage. A mortgage of
520000 average around me will take
payments from 2400 a month to 3100 thats
a 700 increase per month, take to 7
percent and now 1200 plus. Wages dont go
up that fast. THis is 25 year home
mortgage.
But the mortgage isnt the problem if its
a locked in rate you can ride it out its
credit card debt and line of credit debt
that people have problems with.

[cottonpicken]

The central bank is obliged to follow the bond
market,and with global capital flying to safe
havens canadian bonds are easy sell so rates
could easily fall or even go negative.

The carry trade situation will become an
interesting story.

Real inflation on the other hand is much higher
than is being reported,therefore real gdp is much
lower than what is stated.

[errolanderson]

Our belief is that the loonie will drop
further in 2012. Agree with comment that
rates may actually go negative. Japan
experienced this in 1990s.

Loonie trading below 95 cents U.S. could
occur if China economy shakes.Also crude
oil is way overvalued to the fundamental
market right now. Iran sabre-rattling
has to subside first.

Deflation is now a real risk to
commodity contrary to any political or
banker thinking.

Errol

[sumdumguy]

US inflation has got to be huge. I cant believe
how much prices for food and of course gas have
risen in the last 5 years. Just returned from
Vegus. The e pty houses and nice areas that
have turned into ghettos, unbelievable. Areas
where 7-10 year old 400 - 500 thousand dollar
house stood are noe littered with jacked up half
tons and broken tv's on the sidewalk. The city of
Las Vegas evidently has no plan to reverse the
trend. Hope our government is cautious with
immigration policy.

[monte]

Thanks guys.
Errol, what would deflation mean to my farming
operation. Low rates are good, drop in grain
prices is bad. I doubt inputs will go down. Lower
Cdn dollar is good.

I am just try to figure out if kneed to change
anything before I get busy this spring.

Thanks again, I enjoy learning from you fellows.

[parsley]

Inflation in Canada is high. A year ago a bag of
coffee beans was 12 bucks. Now it's 20. Nuts
are a good 20'% higher. Inflation is rampant; they
probably changed the foods in the basket they
compare to determine the inflation rate. Dont be
fooled Pars

[ASRG]

Actually food only makes up 18% of the "basket" of goods and services, with a whole range of other things like transportation, utilities, recreation, etc.
A falling CPI doesn't necessarily mean prices are going down.....maybe people are just spending less? Replacing steak with hamburger....foregoing that meal out....running the old car longer?

[cottonpicken]

Most traders who follow this stuff use john
williams shadow stats for accurate numbers.

Us inflation is slightly over 6 percent and
unemployment is ruffly 22 percent.

The government fudges many numbers for many
reasons and they where a publicly traded
corporation they would be put in jail.

If you want a dose of reality youtube the gao and
watch the head government accountant david
walker try to tell everybody hoow screwed things
are......years back.

By the time obama leaves office he will have run
up more debt than from george washington to
george bush.

If you think this is some how deflationary you are
wrong.

[errolanderson]

Good morning . . . .

There is a risk of deflation ahead as
there has to be a serious period of
global credit deleveraging ahead. The
world simply can't keep printing money
to solve government debt recklessness.
Reading the Calgary Herald this morning,
it's all about inflation according to
bank investment firms. Their motive is
easy to figure out . . . commissions and
as a result I take some opinions with a
grain-of-salt.

A major national paper called and wanted
a corn inflation story. I wouldn't buy
in and my comments weren't printed.

My opinion (for what it's worth) is that
the money printing game has run its
course. It will just make matters worse.
What has to happen is a period of
writedowns and a lot of banruptcies
starting in 2012. This is unfortunate,
but in order for our global economies to
re-start, this has to happen. Those with
cash will be the winners in this
environment. No banker or politician
wants to enter this arena without being
forced. It's bad for business. And it
makes for lousy media.

As far as farming, we have seen the good
times in prices for some time. Corn
won't go racing back to $8/bu for a long
spell. $600/MT canola is now a thing of
the past. Cattle prices will eventually
break. But in this economic environment,
it is bearish the loonie. That's the
good news and will buffer our Cdn ag
prices should global deflation get a
head of steam.

Our land prices will be affected when
China hits a wall . . . and it will.
China can't maintain this incredible
growth. Their banking system is already
hard hit. Also, our house prices are
starting to break. U.S. and Cdn home
prices will likely start to converge
over the next 2 to 3 years.

Anyways, my opinion is not popular. But
it is a realism that I believe, we will
all see over the next 3 to 5 years.

Errol

[Hopperbin]

No doubt China and the rest of asia has certainly been helping our canadian mining economy as the rest of the world faulters. Very high paying jobs in the mining industry. As metals etc are typically recycleable at what point does china have to slow down to to crash our mining industry. They are still at something like 8.9 which is wicked, Will a 5 percent growth rate be needed? Tuff question. Now compared to Corn , wheat etc. These are non recycleable commodities they must be grown every year. Just something I like to think about. Then again Errol a crashed American and Canadian dollar is typically good for grain prices. Another thing to take into account Errol is that a lot of Chinese have been buying second and more houses in China with cash, not borrowed money for the purpose of like vacation home like we buy cabins at a lake for instance.