Bad News For Seniors (Lower Interest Rates)

Packerjohn

Packerjohn

Packerjohn
Location
Canada
I have just read that the interest rates in the USA & Canada have fallen 1/2% lower. They say they want to stimulate the economy because fear of Cornovirus is hurting the economy. People are traveling less & buying less. I was surprised to read this because apparently the sale of toilet paper is sky-rocketing! If the bank rates go down, then the interest you get in general savings also goes down. If this continues, you will almost get nothing for keeping your money in the bank. Oh well, guess I will have to spend less to counter the smaller interest. Don't want to travel anymore. Sitting in airports & in planes with huge crowds with masks on their faces has lost it's sex appeal to me. No place like home anyway! Maybe I'll cut down going to restaurants some too. What do you think about the smaller interest rates? Pretty soon the banks will be giving away the money at zero rates, as some have predicted.
 

PackerJohn, I share your concerns and worry about where this is going. At this point it looks like it will certainly interfere with our plans to sell our house in the next couple of years.
 
For the amount I have in savings it is not going to matter much, unless I sell the summer trailer and park that money in a TFSA.

It will put first time home buyers here in a better position, the lower rate gives them more buying power which in turn will push home prices higher.

Have been thinking hard about selling this place and moving to an apartment. Not to brag but bought at the right time last year and then watched prices here skyrocket in a three months time frame.

On the flip side, even if you can get a decent apartment with the shortage it will run $1200 and up for something nice.
 

Packerjohn said:
What do you think about the smaller interest rates?
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The Fed was scheduled to reduce rates by .25%, later this month....then, yesterday they dropped to rate by .5%...totally unexpectedly. This caused a sharp rise in the market averages, which has been pretty much wiped out today. The past week, or so, has been a vicious roller coaster ride for investors, with the markets down over 10%, in just a few days. If this keeps up, it won't be long before we see Negative interest rates...as has already happened in other nations....meaning, the banks will be charging people who have any savings in the banks.

All this market volatility is due, supposedly, to the Corona Virus, and it's economic implications. Personally, I think this Virus is just one of many things that could shatter the markets in coming weeks/months.....our runaway National Debt, for example. And...I don't trust the news about this illness, and suspect things will get far worse before they get better. With limited ability to test for this illness, and no apparent cure on the horizon, the potential for consumer panic to set in remains quite high.

China is taking drastic measures to curb the spread of this illness, and if similar measures have to be taken here, in coming weeks/months, you can bet our economy will tank...Big Time.
 
Packerjohn said:
I have just read that the interest rates in the USA & Canada have fallen 1/2% lower. They say they want to stimulate the economy because fear of Cornovirus is hurting the economy. People are traveling less & buying less. I was surprised to read this because apparently the sale of toilet paper is sky-rocketing! If the bank rates go down, then the interest you get in general savings also goes down. If this continues, you will almost get nothing for keeping your money in the bank. Oh well, guess I will have to spend less to counter the smaller interest. Don't want to travel anymore. Sitting in airports & in planes with huge crowds with masks on their faces has lost it's sex appeal to me. No place like home anyway! Maybe I'll cut down going to restaurants some too. What do you think about the smaller interest rates? Pretty soon the banks will be giving away the money at zero rates, as some have predicted.
Click to expand...

Great time to buy a rental house and find some little known and under-rated stocks to invest in. I‘m learning about the options market presently.

There are always ways to profit when conventional ways don’t.
 
I am Muslim and we are not supposed to collect, pay or charge interest (riba). More modern scholars state that up to 5% of our net worth is reasonable being it's hard to live in this world without interest entering into one's life. It is recommended to purge of interest by donating the proceeds to non-Islamic charities or people. The banks already pay a pittance, so 1/2% of nothing is nothing anyway.
 
Low rates not good for the contents of many mutual funds especially the bond or hybrid funds with bonds in them. Companies can borrow cheaper. There's still a lot of long term debt higher interst rate bonds out there but some companies going forward get to borrow cheap. Means less dividend income if a fund loses interest on debt.
 
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