Liberty while it will not be ever, it could be a while before rates go up.
Think about this -
1) unless commodities bounce back - just had a 15 year run
2) housing continues booming - has been booming for 15 years
3) manufacturing comes back - it will take time before manufcturing starts coming back.
Where do blue collared workers who lose jobs in the resource field get jobs that pay as much.
At the sametime, we have the highest debt loads in recorded history. The only way they can counter it is by having the loonie at a low level v USD. Beggar thy neighbor.
At this point I don't know how to think about it because if the loonie drops too much that could lead to inflation and thus, higher interest rates.
The authorities have chosen to be risk averse and take the easier route in the last 20 odd years, so I expect them to choose lower rates rather than have the population deal with the pain of defaults and higher interest rates.
While I say this, I realize these things are impossible to predict.
EDIT:
I was reading an article about those big yellow trucks at mining sites. The drivers are paid $200,000 a year. And a lot of companies are in the process of buying self driving trucks over the next 5 odd years. No one is going to pay a truck driver $200,000 anywhere else.
But the CAD has already fallen 20-25% from its recent plateau, and even more from its recent peak. At a certain point, imports just cost too much, and we're importing
a lot of stuff, while many of our exports are priced in USD anyway (oil, metals, etc). If the fed increases rates 2-3 times and the BoC keeps them where they are each time, the CAD will get slaughtered.
I'm no expert on this stuff, but the way I think about it, there's a range within which the CAD is fairly neutral on housing. It's basically kicking the can down the road, not solving anyone's problems but not making them worse. And then out of this range higher or lower, it's bad for housing.
If the CAD goes back up too high, this hurts manufacturing and means fewer foreign investments into natural resources and such, which is bad for housing when people lose their jobs and big projects don't get built.
If the CAD goes too low, then imports start costing a lot, the cost of what people buy in stores goes up, and that hurts housing directly since people have so little money to spare thanks to their bloated housing costs, they're already tapped out. In other words, if the CAD goes to 0.50 USD, suddenly everybody's food, vehicles and gasoline, electronics, consumer products, etc goes up a lot, and that'll squeeze a lot of people out of their houses that are already twice as expensive as the equivalent US house...
