A Money Coach in Canada

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The Bank of Canada, along with most banks of the western world, have done all they can to get money into our economy. They’ve lowered interest rates pretty much as much as they can, but the banks aren’t loosening up credit, and there’s no indication of when that will happen.

Until it does (and I’m just doing some armchair economics here, drawing mostly on what I hear on BNN etc), I don’t see that we’re in for inflation. On the contrary, in desperate bids for business, I suppose deals and more deals will be offered to consumers = deflation.

But once things change, look out. With all the money injected, but not yet moving, in the economy, things could change fast, and drastically.

One implication is that anyone in collective bargaining should beware of wage increase freezes. While it may be the case that this year, and next, things are pretty desperate for businesses (ergo can’t pay employees much) it could be the case that people locked into increases that don’t factor in COLA find themselves in bad shape. Ie., once inflation strikes, your salary’s purchasing power diminishes, and fast. It will hurt.

Readers, what do you think? Am I off base here? And what are other implications for your average joe/ette that you can think of?

3264811316_0182992842photo credit: Jurvetson

About the Author


Imagine if Canadians were known for being all over their money. Engaged. Proactive. Getting out of debt. Savvy. Saving. Generous. Nancy wants to help. Nancy started her own journey with money over 15 years ago, and formed her company “Your Money by Design” in 2004 to help others along the same path. It’s not the usual financial advising/investment stuff. It’s about taking control of day-to-day finances –managing monthly cashflow effectively, spending appropriately, getting out of debt, saving. If you're ready to take control over your finances, pop by her business site, YourMoneybyDesign.com

5 Comments

  1. I think you are correct here. We are and have been in deflation, and there are no indications that point towards inflation yet (though they must come eventually, of course). If we are headed for anything like Japan (and it does look like it!), then we may not see inflation for some time to come. Great Post.

    [Reply]

    Feb 28, 2009
  2. I am with you. Deflation is on the way, if not here already, and it has a long way to go before it turns around. Some even say the U.S. is in for a depression (http://www.thedeflationtimes.com/depression.html) and that’s not where we need to go. Will Canada also face the same?

    [Reply]

    Feb 28, 2009
  3. I live in Raleigh ,N.C. ( US) and we have a very high tech work force but even Cisco,IBM, Nortel and our 2 largest banks ( Bank of America and Wachovia) are on the slide. We have foreclosures ,slow home sales and same credit situation as Canada.
    I personally have endured similar situations in 1974-76 , 1980 to 83 when prime interest went to 22% and the late 80’s to early 90’s.
    Even though we had unemployment and high interest rates money was available and real estate still appreciated.
    The situation now could really be DEFLATION. mY SPECAILTY IS LAND SALES AND BANKS HAVE STOPPED LOANING ON LAND TO ANYBODY-OUCH! Oh well at least I hAVE SOME SAVINGS.

    [Reply]

    Feb 28, 2009
  4. i happen to have a secure low paying job and very low monthly obligations. That is how I will weather the coming months, years.

    david – living in the tree house’s last blog post..what do you do when you…

    [Reply]

    Mar 01, 2009
  5. here from netchick

    david – living in the tree house’s last blog post..what do you do when you…

    [Reply]

    Mar 01, 2009

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