Inflation Rate Increasing..go figure. :)

[JBen]

How much?
How fast?

It was (remained) one of problems post McGuinty. Hoping, or inviting solid growth/jobs (which results in tax revenue) to offset debt/expenses and deficits. Or debt/gdp.

Triggers inflationary pressures. Be careful what you wish for.

and we are already, ticking 4 of 5. Meaning, it’s just more upward pressure……

and don’t sweat it.
That article is a good read. Talks about both and how with expected stimulus spending……

buried below the wall of cash ( which will further pressure) are 3 words…

[JBen]

Decided to add this. In part because throughout 2020 shadowy groups operating behind the scenes are all the rage.

Three words. And like short selling is vastly misunderstood (thanks MSM, and exaggerating, sensationalism….

How large, how and why, by whom. This just scratches the surface
https://www.investopedia.com/article...wap-market.asp After 20+ years, I still don’t know how to “explain” to average lay person…

Nor how/why they are both good, nor how/why they can be very bad. But can say/ask what happens when an artery gets clogged and blood ( cash or collateral) can’t flow from A to B, from B to C, from C to D, from D, back to B, and over to F…and then to M, and then back to C, .

well, like during the 90s, when LTC threatened to collapse the entire system, and 14 dominoes…


https://www.investopedia.com/article...wap-market.asp

an excerpt1) Plain Vanilla Swaps

[COLOR=#111111]Plain vanilla interest rate swaps are the most common swap instrument. They are widely used by governments, corporations, institutional investors, hedge funds, and numerous other financial entities
———————-
it is possible to “hedge” any and all interest rate exposure. Meaning, it’s possible A could be 100% insulated from rates exploding. They could quadruple over the next 5 years..and it wouldn’t cost A a penny per se. but it could also be a house cards…


another excerpt
Plain Vanilla Interest rate swaps, but there are many more types.

[COLOR=#111111]According to the Bank for International Settlements, the notional amount outstanding in over-the-counter interest rate swaps was more than $341 trillion in 2019.[COLOR=#0000EE]1

[JBen]

Another article out today.
One cause of inflation? Expectation of inflation.

“the Bank of Canada will be forced to raise interest rates extremely carefully because low borrowing costs are the only reason housing is affordable, St-Arnaud said.”
https://ottawacitizen.com/news/econo...box=1624285484


Worded differently, too many people defaulting, as with 2008, could set off a chain reaction. And given “things” a bunch of things…”who knows how big/bad the nuke will or could be.

If C wobbles, and can’t meet its obligations to B, who then can’t meet obligations to D and F, who have swaps with M, A S and T and back to wobbling C,

But rest assured, they know all that. Many already have swaps, farming out short or long term exposures, fixed for floating, or vice versa and more.