We are coming off the lowest interest rates in Canadian history right now. Rates have to go up from here, there is no doubt in the financial experts minds. The only thing that would stall this rate increase would be some real financial hardships in the future, and that may even backfire and raise rates. This being said if you ever wanted to lock your mortgage in this would be the time to do it. Sooner the better in my opinion. As for the effect on the Real Estate Market the increase in rates will cause a few buyers to rethink their future purchase BUT it will be temporary as we are still below the average fixed and variable rates and as the shock of any significant rate increase passes people will realize that the rates are still not that bad. If the rates start approaching double digits THEN we will see a significant effect on the Real Estate market. I hope this info helps, if you or any reader would like to discuss this topic or another in more detail please don`t hesitate to give me a call anytime. Abraham Niyazi - Mortgage Agent - Lic# M08010640 - Centum One Financial Lic# 10758 - Cell: 416-993-4082 - Office: 1-866-RATE-708 x 115 http://www.centum.ca/abraham_niyazi/ I have access to Banks/Lenders across Canada and 11 years experience in the industry.

It`s hard for them to go any lower. I`d say yes. Economy is improving, so just watch for CPI data.

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Interest rates have nowhere to go but up buzz up! 191 print on sunday april 11, 2010, 1:00 pm edt even as prospects for the american economy brighten, consumers are about to face a new financial burden: a sustained period of rising interest rates. that, economists say, is the inevitable outcome of the nation’s ballooning debt and the renewed prospect of inflation as the economy recovers from the depths of the recent recession. the shift is sure to come as a shock to consumers whose spending habits were shaped by a historic 30-year decline in the cost of borrowing. “americans have assumed the roller coaster goes one way,” said bill gross, whose investment firm, pimco, has taken part in a broad sell-off of government debt, which has pushed up interest rates. “it’s been a great thrill as rates descended, but now we face an extended climb.” the impact of higher rates is likely to be felt first in the housing market, which has only recently begun to rebound from a deep slump. the rate for a 30-year fixed rate mortgage has risen half a point since december, hitting 5.31 last week, the highest level since last summer. along with the sell-off in bonds, the federal reserve has halted its emergency $1.25 trillion program to buy mortgage debt, placing even more upward pressure on rates. “mortgage rates are unlikely to go lower than they are now, and if they go higher, we’re likely to see a reversal of the gains in the housing market,” said christopher j. mayer, a professor of finance and economics at columbia business school. “it’s a really big risk.” each increase of 1 percentage point in rates adds as much as 19 percent to the total cost of a home, according to mr. mayer. the mortgage bankers association expects the rise to continue, with the 30-year mortgage rate going to 5.5 percent by late summer and as high as 6 percent by the end of the year. another area in which higher rates are likely to affect consumers is credit card use. and last week, the federal reserve reported that the average interest rate on credit cards reached 14.26 percent in february, the highest since 2001. that is up from 12.03 percent when rates bottomed in the fourth quarter of 2008 — a jump that amounts to about $200 a year in additional interest payments for the typical american household. with losses from credit card defaults rising and with capital to back credit cards harder to come by, issuers are likely to increase rates to 16 or 17 percent by the fall, according to dennis moroney, a research director at the towergroup, a financial research company. “the banks don’t have a lot of pricing options,” mr. moroney said. “they’re targeting people who carry a balance from month to month.” similarly, many car loans have already become significantly more expensive, with rates at auto finance companies rising to 4.72 percent in february from 3.26 percent in december, according to the federal reserve. washington, too, is expecting to have to pay more to borrow the money it needs for programs. the office of management and budget expects the rate on the benchmark 10-year united states treasury note to remain close to 3.9 percent for the rest of the year, but then rise to 4.5 percent in 2011 and 5 percent in 2012. the run-up in rates is quickening as investors steer more of their money away from bonds and as washington unplugs the economic life support programs that kept rates low through the financial crisis. mortgage rates and car loans are linked to the yield on long-term bonds. besides the inflation fears set off by the strengthening economy, mr. gross said he was also wary of treasury bonds because he feared the burgeoning supply of new debt issued to finance the government’s huge budget deficits would overwhelm demand, driving interest rates higher. nine months ago, united states government debt accounted for half of the assets in mr. gross’s flagship fund, pimco total return. that has shrunk to 30 percent now — the lowest ever in the fund’s 23-year history — as mr. gross has sold american bonds in favor of debt from europe, particularly germany, as well as from developing countries like brazil. last week, the yield on the benchmark 10-year treasury note briefly crossed the psychologically important threshold of 4 percent, as the treasury auctioned off $82 billion in new debt. that is nearly twice as much as the government paid in the fall of 2008, when investors sought out ultrasafe assets like treasury securities after the collapse of lehman brothers and the beginning of the credit crisis. though still very low by historical standards, the rise of bond yields since then is reversing a decline that began in 1981, when 10-year note yields reached nearly 16 percent. from that peak, steadily dropping interest rates have fed a three-decade lending boom, during which american consumers borrowed more and more but managed to hold down the portion of their income devoted to payin

We're seeing an exact carbon-copy repeat of the Carter years thanks to people who were either not alive yet then or are denying that it ever happened so that they can feel GOOD about electing Obama.

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Fact 1 – all housing benefit is paid to landlords, not the claimants. fact 2 – most housing benefit is paid to landlords of working people. fact 3 – if you lose your job, housing benefit is your right. fact 4 – if you lose your job, mortgage interest payments are your right. fact 5 – the housing benefit £400 ‘cap’ affects 5,000 people. fact 6 – the housing benefit £400 ‘cap’ affects 0.2% of unemployed claimants. fact 7 – the housing benefit £400 ‘cap’ saves only £65 million. fact 8 – housing benefit has risen by 50%, as rents have increased and there are more unemployed. fact 9 – cutting 10% of housing benefit after one year means that 82,000 households will be forced to move. fact 10 – those that cannot afford to move will be made homeless. fact 11 – housing 82,000 households in b&b accommodation will cost more than their present accommodation. fact 12 – housing benefit cuts total £2bn. fact 13 – uk bad debt liability bailouts / taxpayer money to banks = £1,000 billion + fact 14 – uk quantitative easing needed so far as result of banking incompetence = £275 billion fact 14 – estimated uk tax revenue lost from tax evasion by the rich = £200 billion fact 16 – housing benefit landlords pocket to house those below = £17.181 billion fact 17 – disability benefit for those unwanted by private employers = £16.218 billion fact 18 – income support for the low paid or part time employees = £8.687 billion fact 19 – council tax benefit for those in need = £4.23 billion fact 20 – job seekers allowance for those in need = £2.881 billion fact 21 – benefit and tax credit fraud = £1.5 billion fact 22 – cost of tracking down benefit and tax credit fraud = £ 1 billion fact 23 – employment support allowance = £0.769 billion fact 24 – total saved by tracking down benefit and tax credit fraud = £ 0.5 billion * according to george osbourne when questioned in detail by chukka umanna at the treasury select committee. govt public spending complete breakdown bubble chart link http://image.guardian.co.uk/sys-fil es/guardian/documents/2009/09/16/pu blic_spending_160909.pdf * facts 5, 6 and 7. the circus bearded lady - there may be some exceptional circumstances but labour changed the rules so that housing benefit is paid direct to landlords. if your landlord doesn’t get his housing benefit, you end up on the street. you’re not the smartest bearded lady at the circus, are you? been there - thanks, that one slipped by me. that's a dicey one with the rate so low, as i'm almost certain rates will rise far above that eventually. entropy - westminster and kensington councils have the highest council taxes, the highest speeding revenues, the highest traffic offence revenues, the highest parking fine revenues, the highest parking revenues, the highest revenues from the sale of council houses, the highest business revenues (shops etc, not banks, that would be the city of london), etc, etc in the country. they’re rolling in money. they can easily afford to pay the highest housing benefits in the country to a few of their tenants. see also facts 2, 5 and 6.

Nice one, It's 13 & 14 that are the real cause of our financial plight, 15 would cost to much to address and would upset the wealth creators, the self same responsible for 13 & 14. Political solution? Turn the pack on the weak and vulnerable. Result? Gain short term political advantage. Consequences? The country becomes less able to compete in the modern world due to the creation of a fractured society. De ja vue?

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Question 1 an example of government use of money to influence elections in the 20th century is increasing the size of the military in election years. increasing foreign aid in election years. increasing social security benefits in election years. reducing subsidies for mortgage insurance in election years. mobilizing troops in election years. question 2 the machinery for making economic policy decisions is complex and not under the president's full control. simple but not under the president's full control. complex but fully controlled by the president. simple and fully controlled by the president. complex but fully controlled by the president and party leaders. question 3 contributing to the success of loophole politics prior to passage of the 1986 tax bill was the strong support of policy entrepreneurs such as ralph nader. existence of low marginal rates to offset revenues lost through deductions. decentralized structure of congress. existence of tariff revenues to offset revenues lost through deductions. strong support of the conservative coalition and ralph nader. question 4 john kenneth galbraith urges, as a solution to inflation, that government cut taxes. the private sector be allowed to adjust itself. the money supply be held in check. government control prices and wages. government restrictions be lifted and taxes increased. question 5 when voting behavior and economic conditions correlate at the national but not at the individual level, it can be said that the voters are heliocentric or earth conscious. sociopathic or self-absorbed. homeopathic or group related. socialistic or ideology driven. sociotropic or other regarding. question 6 economic policies adopted by a president to reduce inflation are most likely to have the negative effect of raising taxes. lowering interest rates. raising unemployment. raising the budget deficit. decreasing wages. question 7 in general which of the following is true? projections of future budget deficits have been relatively accurate through the years. projections of future budget surpluses have been relatively accurate through the years. while projections of future budget deficits have been relatively accurate through the years, projections of future budget surpluses have not been accurate. while projections of future budget surpluses have been relatively accurate through the years, projections of future budget deficits have not been accurate. projections of both budget deficits and surpluses have not been accurate through the years. question 8 fiscal policy attempts to affect the economy through money and bank deposits. the price of money (interest rate). taxes. expenditures. c and d. question 9 entitlements such as social security or medicare payments, veterans' benefits, or food stamps constitute about ______ of the federal budget. one-sixteenth one-tenth one-fourth one-half two-thirds question 10 the executive agency that ensures that other agencies' legislative proposals are compatible with the president's program is the cea. treasury department. omb. fed. nsa. question 11 among president reagan's economic priorities in his first term were all of the following except reducing unemployment. reducing the size of the federal government. stimulating economic growth. increasing u.s. military strength. a and c. question 12 typically, the economic adviser with the closest link to the financial community is the chairperson of the cea. secretary of the treasury. director of the omb. chairperson of the fed. deputy director of the omb. question 13 from the inauguration of income tax up to the 1950s, tax rates tended to rise and fall with the cycles of public opinion. good and bad economic times. war and peace. democratic and republican administrations. critical or realigning elections. question 14 the budget enforcement act of 1990 imposed a cap on credits. entitlements. new taxes. sequesters. discretionary spending. question 15 the most obvious loophole in the congressional budget act of 1974 is that the projections on which spending is based are subjective. the president can increase spending ceilings by reallocating other funds. there is nothing in the process that requires congress to tighten the government's financial belt. its key section has been declared unconstitutional. its key section and numerous applications have been declared unconstitutional. question 16 the text suggests that, in theory and in practice, the fed is independent of the president. of congress. of both the president and congress. of the president, but not congress. of congress, but not the president. question 17 which of the following statements concerning the federal reserve board is incorrect? its members are confirmed by the senate. it has seven members. members serve

This is too many questions.

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Taken from http://www.economicshelp.org/2008/0 9/us-dollar-collapse.html, "reasons why dollar could collapse?" is very complex and difficult for me to understand.can you explain this in much more simpler way? 1. switching reserves away from the dollar. the us is currently the world's reserve currency. central banks currently hold upto 90% of their foreign reserves in the dollar. however, as the us economy and finance sector looks very weak, it makes sense for countries to diversify out of the dollar. if countries were to switch from holding reserves in dollars to holding reserves in yen, euros or others, it could spark a free fall in the dollar. * chinese banks told not to lend to american banks. * china threatens to sell dollars if china did sell its $1trillion dollar assets. it would cause a devaluation in the dollar and also higher bond yield rates. higher interest rates are the last thing the us economy need at the moment. there is also the danger of opec oil exporting countries shifting out of the dollar or at least not using their oil surpluses to buy us securities. (by the way, markets think this is more likely if obama wins election) 2. us debt increasing. us debt currently stand at $9 tn or 65% of gdp. however, it is forecast to increase substantially some argue national debt could soon pass 100%. this is because * financial bailout for subprime debt. if house prices continue to fall, if mortgage defaults continue to rise; the legacy of toxic debt could leave the us treasury facing unprecedented losses as it tries to bale out the system. * long term spending commitments on health care and pension will increase spending. although, this has gained less publicity, in the long term, it could be more expensive than the current financial bailout. the ageing population will increase the debt burden. the problem with the increasing levels of debt is that the growing concern that the us government may start to default on its debt. if this ever happened it would cause shockwaves throughout the global financial situation and people would sell dollars. at the moment, countries like japan and china have shown a willingness to lend the us money (buy us bonds) at relatively low interest rates. but, if this confidence falls, nobody would want to buy any more us debt. this would cause a fall in demand for dollars and the value would fall. (default by us government is no longer unthinkable at telegraph.) to finance the growing national debt, the government may also just increase the money supply because they can't sell any more bonds. this would increase the money supply and inflation and also cause a depreciation in the value of the dollar. 3. credit crisis - worst still to come the credit crisis and banking losses put downward pressure on the dollar because: * they are forcing the us government to borrow more. * lack of confidence in us financial markets which affects confidence in the dollar. 4. current account deficit. for several years, the us has been running a large current account deficit. this peaked at around 6.5% of gdp in 2006 (it has since fallen to 5% on the back of a weaker dollar.) upto now the current account deficit has been financed by capital flows from abroad (mainly asia and opec countries). if these capital flows were to dry up, as asian countries no longer wanted to hold dollar securities, the dollar would fall. 5. economic recession and low interest rates. us interest rates are already low - 2%. however, if the economy was pushed into a very deep recession (e.g. growth of -2%) then there may be pressure for further cuts in interest rates. this would make the us even less attractive as a place to save money. therefore demand for dollar would fall.

Easy: Printing too many dollars. http://www.youtube.com/watch?v=J2yLzISKKHA Milton Friedman discusses what causes inflation and how it cured. He leads the viewer through the monetary process so that, in the end, the situation is crystal clear.

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Here are all the facts regarding who tried to and did not try to regulate the economy. in end, i say the problem was all of us, would you agree? fact 1) deregulation of banks was passed under the gramm leach bliley act (glba) in 1999 (under clinton) - althought this allowed banks to expand beyond traditional regulatory controls, the affects have been both good and bad. it has allowed many of the larger banks to cross into different financial services making them more stable (the reason why citibank, jp morgan, and bank of america haven't gone under) fact 2) regulation of accounting practices by public corporations was passed under the sarbanes oxley act (sox) in 2002 (under bush). the affectiveness of the bill is still debated. many argue the bill has put into affect many costly practices which actually disadvantge domestic corporations. still, this was an attempt at financial regulation. fact 3) greenspan warned of trouble, nobody really listened about fannie mae and freddie mac: "the strong belief of investors in the implicit government backing of the gses (government-sponsored enterprises) does not by itself create problems of safety and soundness for the gses but it does create systemic risks for the u.s. financial system as the gses become very large," he said. additional facts) the truth of the matter, the current financial problems had a number of factors, check out the factcheck.org article, it notes the causes as: -the federal reserve, which slashed interest rates after the dot-com bubble burst, making credit cheap. -home buyers, who took advantage of easy credit to bid up the prices of homes excessively. -congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses. -real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes. -the clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families. -mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates. -former federal reserve chairman alan greenspan, who in 2004, near the peak of the housing bubble, encouraged americans to take out adjustable rate mortgages. -wall street firms, who paid too little attention to the quality of the risky loans that they bundled into mortgage backed securities (mbs), and issued bonds using those securities as collateral. -the bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market. -an obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic. -collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up. there is an old engineering saying, to have something break takes a single point of failure, and to have an entire system fall apart and become fubar takes multiple points of failure. sources: http://en.wikipedia.org/wiki/gramm- leach-bliley_act http://en.wikipedia.org/wiki/sarban es-oxley_act http://money.cnn.com/2005/05/19/new s/economy/greenspan_fannie/ http://www.factcheck.org/elections- 2008/who_caused_the_economic_crisis .html

As the factcheck.org article points out, if we want to assign blame for our current crisis, there is plenty of blame to go around. But the most important point is that, “…these sorts of partisan caricatures can only make the task [of resolving the crisis] more difficult.” I don’t give a damn who, or which party, created the crisis. I want to see it resolved. Let future historians write books about responsibility. But we need some fairly current historians to write, and soon, about how we resolved it and got back on track. This is a crisis that threatens the foundations of our economy and jeopardizes the financial security of our citizens. If someone sets fire to your house, you will call the Fire Department first to come put out the fire. Only then will you call the Police Department and the Arson Squad to determine who set the fire. That’s what we need to do here. We should learn a lot from this debacle. The most important thing is that Congress is not a good regulator because our elected officials do not understand many of the things they regulate. They don't know the difference between a mortgage and a mountain or between an oil well and a wishing well.