If inflation in the US goes upto 10% will this affect interest rates and inflation in Canada and if so why? - variable mortgage rates canada
With the amount of money in the states of hyper-inflation, more printed. As this effect of inflation and interest rates in Spain is' I a mortgage with variable interest rate (3.9%) in Canada and am wondering if interest rates rise dramatically next year.
Sunday, January 3, 2010
Variable Mortgage Rates Canada If Inflation In The US Goes Upto 10% Will This Affect Interest Rates And Inflation In Canada And If So Why?
2 comments:
Yes, our economies are intertwined ..
The answer is yes to influence Canada, but you're worried about the wrong thing.
Canada is heavily dependent on U.S. Approximately 80% of Canadian exports go to the United States and about 55% of imports from the U.S. and what happens to the U.S. economy will affect Canada.
https: / / www.cia.gov / library / publications ...
Rising U.S. inflation, people buy less, so people will buy less in Canada if Canada will hurt the economy. But even without inflation, rising unemployment in the U.S., people buy less, so people will buy less in Canada if Canada will hurt the economy.
The export of oil from Canada, the price of oil the United States has decreased. Thus, Canada will earn less money as a result of economic recession.
Canadian lumber exports to the U.S.. Housing starts dropped, so that Canada sold less wood in the U.S. after the bursting of the housing bubble.
etc.
The Canadian interest rates are a combination of state of the Canadian economy (as determined in full bloom, the central bank should raise interest rates, and vice versaversa) and the outside world.
Given the current state of the world, there seems no obvious reason why mortgage rates should increase in Germany. But if Canada begins to see a housing boom, as we were Canadian central bank should raise interest rates aggressively.
And of course, everything depends on the success of the rescue plan, both in the United States and around the world and what happens to the U.S. economy.
What does this mean for interest rates in 2009 that we really can not predict.
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