Scotiabank has long had a slogan that states ” You’re richer than you think”. Yesterday Scotiabank had a damning report out on government spending that stated interest rates are higher than they should be due to Federal and Provincial Government pandemic spending.
Basically, the report states that 200 bps of the total 475 bps of increases was due to monetary policy and spending from governments.
I highly suggest you read the report put out by Scotiabank Economics. It is a worth while read, and has a lot of information in it. Anytime you can learn some nuggets and look smarter to your clients, it will help you win business.
But just imagine if rates were 200 bps lower? Imagine how much help that would be to our clients? I have long been critical of government spending ever since March of 2020 ( and long before then to be honest ). The government was printing money, issuing bonds to pay for the money printing, and having the BOC buy those bonds to keep rates down. You just knew it couldn’t end well, and here we are – and it has not ended well – and we aren’t even done yet.
Figure out what your average mortgage payment is, and then deduct 200 bps of rate from the average rate over the last year, and then re-figure the payment. Take that number and multiply it by every client, and you will quickly realize how much money a run away government is costing Canadians.
Fiscal and monetary policy matter, and the fact that Canada has spent more time worrying about the name of a street, or calling things by proper names has come home to roost. Money makes the world go around, and government have treated money without the respect it deserves.
Ryan Sims insights, thoughts, and analysis 
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