Rob Carrick from the Globe and Mail is at it again with a well written piece on inflation rising. He is like a dog on a bone. With this latest article he at least this time gives solid advice on what to do about it to hedge against it in your portfolio.
That is where the relevance to interest rates and mortgages come in. You see if inflation goes up, particularly when they go up as fast as he along with CIBC World markets suggest, then the central bank will raise interest rates to combat this. This is where it will hit variable rate mortgage customers who are not watching or don’t have their mortgage planners watching for them. As for your investment portfolio according to the article you should stay out of long term bonds and go to Oil and Gold which are real commodities that will hold their value as prices rise.
Interesting sidebar was when they said what the current inflation rates were in other countries in the World, I had no idea and it is real scary as these developed countries have inflation like this then why is it so preposterous for Canada to go to 4% as Jeffrey Rubin from CIBC World market predicted earlier this week?
Europe: 3%
Russia: 12%
China: 8%
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