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Email this2:12 am
February 27, 2018
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I have my own twisted view on "inflation". Are you sitting down?
The governments of canada are the leading contributors to inflation. They, and pretty well they alone, dictate where and what inflation is. They basically doctor, or fudge the numbers. In the same manner they control the unemployment stats. Everything must look rosy, until we can't hide the stench any longer. Though, all countries do this. If something looks bad, just take it out of the picture. So is the BOC really independent?
The energy boards in canada must approve cost increases and because the boards in Ontario can never say NO. Ontario has the highest electricity and natural gas prices in north America. Ontario raised their minimum wage to $14, which caused trickle down inflation. Government Carbon tax, again causes what looks to be inflation. Insurance rate increases must be approved by Canadian government agencies, again they can never say NO. I once heard someone say, there's no need to worry about our finances because the books will automatically balance themselves. https://torontosun.com/opinion/editorials/editorial-trudeaus-budget-still-hasnt-balanced-itself
Years back, i received pay increases, i think they were quarterly because i had COLA on my pay cheque, Cost of living allowance. Whenever the government increased the price of cigarettes, i got a raise. Then they got wise. Hey, we're the government, we can redefine inflation. Everyone living on Earth knows, the cost of day to day living is more expensive, A LOT more expensive than the inflation numbers posted by governments.
After your government decided what they would consider the new inflation criteria, i started to get pay decreases. The UAW went for "profit sharing" instead of cola. The Americans have won this battle hands down, every gm employee in the states gets thousands of dollars every year in profit sharing.
Has anyone ever looked into PBGF? Hmm.
2:33 am
February 27, 2018
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Hmm?
5:38 am
January 9, 2011
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Loonie said
It went up .25 today according to my TV station.
Stay tuned for any further changes. Next dates are Dec 05 (2018);
Jan 09, March 06, April 24, May 29, July 10, Sept 04, Oct 30, Dec 04 (2019).Now, let's see (a) how fast the banks can increase their lending rates; and ((b) how slowly they can increase their deposit/GIC rates!
Completely predictable...... Methinks its time to buy bank stocks with some of my savings as the stock market is currently cratering. Why? Savings rates are unlikely to continue increasing as fast or faster than the rate of BoC rate increases, instead GIC rates will start to gap savings rates. And I'm not that interested in being locked in to a current GIC rate and only get paid interest annually. Banks stocks are down to where dividend rates paid are attractive, and in future I expect banks' quarterly earnings "positive surprises" because of the aforementioned increased gap between lending rates charged and savings deposit rates paid.
"Keep your stick on the ice. Remember, I'm pulling for you. We're all in this together." - Red Green
8:41 am
October 29, 2017
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Loonie said
If you only look at YoY in , let's say, August, you are only assessing the increased cost for anything bought in the most recent August as compared to the previous August. Things bought in May would have had less inflationary increase compared to previous May.
Thanks for your explanation Loonie.
Why would May have less inflationary increase? Is it because it is earlier in the year than August or are you getting that conclusion from the reported numbers? please elaborate on that.
Thank you.
9:42 am
October 29, 2017
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Here's a good question: what is the difference between annual inflation and yearly inflation?
11:06 am
October 21, 2013
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Vatox said
Loonie said
If you only look at YoY in , let's say, August, you are only assessing the increased cost for anything bought in the most recent August as compared to the previous August. Things bought in May would have had less inflationary increase compared to previous May.Thanks for your explanation Loonie.
Why would May have less inflationary increase? Is it because it is earlier in the year than August or are you getting that conclusion from the reported numbers? please elaborate on that.
Thank you.
I was looking at a chart a couple of days ago that said May was lower, I think it was 1.8. I think it was YoY. I may have misinterpreted or misremembered, but it doesn't really matter. The point stands that some months will be lower and August was high.
11:16 am
October 29, 2017
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Okay, so it's the reported numbers and nothing to do with order or progression.
5:49 am
September 11, 2013
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With the current reported rate running at about 2.8%, and with many folks here believing the stats are fudged to be low and that their own personal rate of inflation is much higher, how does it make sense to think you're making money with your money tied up in GICs or savings accounts paying, before income taxes, 3.5% or less? Seems to me that approach is losing you money every single day.
E.g. if you think your personal rate of inflation is 4%, and your tax rate is the lowest at about 20% (and most people probably aren't in the lowest tax bracket), you need to make pretty much 5% just to break even, never mind build your savings. 5% is not available to savers, from what I can tell.
6:39 am
December 17, 2016
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TOO much common sense in that comment, Bill!
5:47 pm
October 21, 2013
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There are many reasons why people would choose GICs. Beating inflation is probably not one of them, but when I look at the crap people spend their money on, their biggest problem is not GICs or inflation.
9:24 pm
April 6, 2013
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Loonie said
I was looking at a chart a couple of days ago that said May was lower, I think it was 1.8. I think it was YoY. I may have misinterpreted or misremembered, but it doesn't really matter. The point stands that some months will be lower and August was high.
In some months, there is deflation. Inflation does not occur evenly throughout the months of the year.
For the 12 months ending in September, all-items CPI inflation was +2.2%. That doesn't mean that prices moved up evenly at (1 + 0.022)1/12 - 1 = +0.182% per month for 12 months.
For example, all-items inflation was actually negative in September: -0.4% for the month. That's not year-over-year. That -0.4% from end of August to end of September!
The all-items Canadian CPI is a weighted combination of these components:
- Food
- Shelter
- Household operations, furnishings and equipment
- Clothing and footwear
- Transportation
- Health and personal care
- Recreation, education and reading
- Alcoholic beverages and tobacco products
Statistics Canada releases both the all-items CPI and the individual component CPI. One can calculate a personalized all-items CPI if one does not spend on the component categories in the proportions as the standard all-items CPI.
10:15 pm
October 29, 2017
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Norman1 said
In some months, there is deflation. Inflation does not occur evenly throughout the months of the year.
For the 12 months ending in September, all-items CPI inflation was +2.2%. That doesn't mean that prices moved up evenly at (1 + 0.022)1/12 - 1 = +0.182% per month for 12 months.
For example, all-items inflation was actually negative in September: -0.4% for the month. That's not year-over-year. That -0.4% from end of August to end of September!
Technically it is called disinflation. Deflation only occurs when you have inflation below zero(negative). In this case it's only a drop in the inflation rate.
10:18 pm
October 17, 2018
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They are going to have to revise the CPI to include pot now , since alcohol and tobacco are on the list. It makes sense actually as booze , smokes and weed are as much of a staple as bread and milk nowadays to some , and I'm sure the gov has added it to their revenue calculations
12:17 am
December 17, 2016
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Loonie said
There are many reasons why people would choose GICs. Beating inflation is probably not one of them, but when I look at the crap people spend their money on, their biggest problem is not GICs or inflation.
By crap, do you mean individuals spending THEIR hard-earned money on things like smartphones, tablets, BMWs, Audis, Porsches, vacation properties, enjoying dinners out, lengthy out-of-country vacations, and similar frivolous flings of enjoyment?
12:39 am
October 21, 2013
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Top It Up said
By crap, do you mean individuals spending THEIR hard-earned money on things like smartphones, tablets, BMWs, Audis, Porsches, vacation properties, enjoying dinners out, lengthy out-of-country vacations, and similar frivolous flings of enjoyment?
Interesting that you would think of these things this way.
12:46 am
December 17, 2016
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Unbelievable as it may seem, rather then waiting and hanging around for another quarter of a percent rise in GIC rates, THAT is what most people do with their lives ... they live them.
6:44 am
September 11, 2013
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I agree, Loonie, GICs are just one of the many ways to lose money.
You're of the opinion those who spend their money on "crap" have problems bigger than GICs or inflation (I'm not sure I personally see any evidence of your assessment of others' "problem levels"), but I do tend to agree with Top It Up that it's just personal preference how we choose to "lose" our money and that by far most folks concentrate on "losing" their money via life's pleasures and experiences. But this is a site for dedicated savers, so that obviously impacts the views one generally finds here.
Anyway, for the information of the younger folks on here, my original point was that in my lifetime, no matter whether rates are high or low, I've observed that savers are pretty well always losing money, once you factor in taxes and inflation as stated by CPI. It's a slow, steady loss, masked often because savers tend to save more so their piles continue to grow due to constant, new "contributions" to the pile as well as the fact that $102 next year is larger than $100 this year even if it costs $103 to buy next year what $100 buys now - it's a comforting thing to see $102 instead of $100 in your savings account. Dedicated savers tend to prefer to lose to inflation steadily, little by little, instead of take their chances of sporadic, larger declines in market instruments. Again, just personal preference.
9:36 am
October 29, 2017
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Please keep in mind, that a loss of money requires that you already had the money. Saving money and buying GICs is never a loss. Spending the money now to perhaps get more, before inflation reduces the spending power, leaves you with less money and maybe you won't be able to pay for the things you need later. It's just perspective and comfort ability. People that don't worry about how they will pay for things tomorrow will generally spend more today and savers are the opposite. The range is vast between the two ends and people can be anywhere along the gauge. Inflation is irrelevant when it comes to deciding whether to spend more or save more. People don't save more or spend more just because of an inflation value.
Hyperinflation would change all of that of course.
All I wanted to point out here, is that saving money and receiving interest is never a loss. You may have lower spending power due to inflation, but spending that money earlier, before the inflation, is definitely money gone. But hey, you get to enjoy the money now.
Choose wisely grasshopper.
11:43 am
September 11, 2013
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There are more ways to save money than on GICs/savings accounts. I know some very old folks who spent $16,000 on a house in Toronto in 1960, so now there's an asset - how does its value compare to if they'd spent that money on GICs over that time? Or on stocks? Or on farmland? Or on insurance policies? etc. And how does each one compare to inflation? It would likely turn out that some ways of "saving" were better than others over that time.
12:07 pm
October 29, 2017
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That's always true Bill, for many things. The point I'm making is very simple. Please don't report that someone with a 3% GIC or even 2%, is losing money. They may not be gaining as much as with some other investments, but it's a poor message to send new members, that may not have much knowledge or experience, that they are losing money by saving in a GIC. It's simply not true.
Pointing out those other investments for the higher gains is a much better idea. Or simply state that future spending power decreases if the interest rate is too low.
Please write your comments in the forum.