I attended a formal investment dinner last night given by one of my investment adviser colleague’s.
Basically there were 20 people or so invited to a 5 course dinner (which was amazing by the way) and while we ate a very knowledgeable investment analyse spoke about the state of the Canadian economy, Direction of the United Sates economy, Europe, interest rates, current investments and so on. We were all each allowed to ask one question which the presenter answered or discussed. My question was on the direction of interest rates in Canada and effect on Real Estate. From what I gathered as long as the US interest rates remain low Canada will have to follow suit. This of course cannot go on forever (US expects rates to stay flat until at least 2014) but it is a guide for Canadian rates now and for the near future. Because Canada is so intertwined with the US (largest trading partner) for trade etc we cannot afford to move our rates higher as the effect will be a higher loonie which in turn would damages our manufacturing companies and other industries that trade with the US. So in a nut shell keeping a eye on the direction of US interest rates will be a good indicator on where Canadian interest rates are headed for the short term at least