As I am sure many people are, I am watching the news of the world/global economy on a regular basis. I try each day to take the pulse by reading the online news and hearing what -if anything- has developed in Greece or the United States. Although it may seem as though we are "removed" or distant from these markets, Canada is directly impacted. It is much like a monkey see, monkey do situation. Okay, maybe that's incorrect- more accurately our economy is so well tied to the USA that whatever happens to them, happens to us.
Today the Canada dollar tanked by almost 3 cents. We are now under valued to the US dollar for the first time this year. We have been $1.03 or $1.06 or $1.02 to the US dollar most of this year. This has done shit for export-import, but maybe helped a bit with Canadians buying across the line or travelling there. Sucks for my sister, who just this weekend will be landing in California for vacation.
In a longer term vision, the World Bank is urging countries to continue to keep interest rates down, encourage consumer confidence and spending, which in turn generates income for the banks and enables them to lend. The question is balance. If you read the mortgage rate forecasts you see that they anticipate (and have actually for the past 2 yrs) an increase in prime rate. It hasn't climbed the way forecasted YET, but they anticipate a 0.75 point increase this year and next, well into 2013. They say prime will be 4.5 percent or so. Now, the sky has been falling according to these people for 2 yrs. Prime has historically always been under posted rates, in fact 77% of the time, variable wins. No need to panic in my opinion. However for people like myself potentially entering the housing market in the next 6 months or so, this is something to watch.
Feels a lot like a sit on your hands time anyways. Likely what we intend to do.