Inflation Rate Tumbles to 0.4% in April; Lowest in 15 Years

[Ally]

OTTAWA - Canada`s annual inflation rate fell to the lowest level in almost 15 years last month as the impact of last year`s sharp spike in gasoline prices continue to push overall consumer prices toward negative territory.

Statistics Canada said prices overall fell in April by 0.1 per cent on a month-to-month basis - 0.3 per cent on a seasonally adjusted basis - pushing the inflation rate to 0.4 per cent.

This is the lowest rate on inflation since December 1994 and represents a sharp drop from the 1.2 per cent rate recorded in March.

The steep drop was slightly more than economists predicted, but likely had little impact on the Canadian dollar, which moved up one cent to above 87 cents US on Wednesday morning on the strength of oil prices.

"It appears all but certain that Canadian headline inflation will dip into negative terrain on a year-over-year basis in the next report, matching what we have seen recently in the U.S., Japan and China," said Douglas Porter, deputy chief economist with BMO Capital Markets.

Read the full article here.

 

[GarthChapman]

Beware reading too much into this statistic as gasoline prices were at a peak last year. Take gasoline out of the equation and we still have a small (and healthy) underlying inflation rate.

 

[EdRenkema]

QUOTE (GarthChapman @ May 20 2009, 09:22 AM) Beware reading too much into this statistic as gasoline prices were at a peak last year. Take gasoline out of the equation and we still have a small (and healthy) underlying inflation rate.

And soon becoming larger and unhealthy....or healthy depending on your perspective.

 

[GarthChapman]

Indeed... All the money being printed, particularly in the USA, ought to create high inflation, which in the longer run will be beneficial to investment property owners.

 

[RedlineBrett]

QUOTE (GarthChapman @ May 20 2009, 02:03 PM) Indeed... All the money being printed, particularly in the USA, ought to create high inflation, which in the longer run will be beneficial to investment property owners.

Garth if you don`t mind my asking - what are your thoughts regarding the value of the US dollar going ahead say 12 months?

Anyone else care to toss out their theories?

 

[GarthChapman]

QUOTE (RedlineBrett @ May 20 2009, 01:41 PM) Garth if you don`t mind my asking - what are your thoughts regarding the value of the US dollar going ahead say 12 months?

Anyone else care to toss out their theories?
Given what the experts are saying and how much money they are printing, and the tax and spend habits of the Democrats - it seems to me the USD has to drop significantly sometime over the next 1-2 yerrs. The pundits have been calling for that for a long while, but it has yet to happen. I think many investors around the world still see the USD as a safe haven (and other liken it to tying your life-boat to the Titanic).

The other question in my mind is `how closely will our dollar remain linked during a USD tumble`? We are so connected in trade that our dollar may also fall relative to other major currencies along with the USD, although not as much. My uneducated belief is that we will perhaps get into the low-mid 90 cent range even as our buck drops vs those other major currencies.

Notice the upswing in the Canadian dollar over the last 2 months, and the big dis-connect many major stock markets indicies have made from the Dow Jones Industrials index. For example, a couple of months ago the TSX was running 500-600 points ahead of the Dow, and that lead has been steadily widening to the point that May 20 the TSX closed at just over 1,800 points ahead of the Dow. And this with most commodities still way off their highs, and oil only just having cleared $60 US. I think this may be the beginning of what is to come.

But what do I know...

I am looking forward to the REIN Economic Summit in Edmonton June 26-28. This topic will be a great one for the experts coming. Book your seats - I think this one will bring some real heavy-weight economic pundits to REIN members ears.

 

[REINteam]

Hi Everyone,Garth has the right idea...the Economic Summit is a must attend event - REIN members attend FREE. To give you a better idea of what is lined up so far, with a few surprises for sure, just download or view the brochure below.And a quick note - this event is attracting a lot of attention, many members who haven`t been out for some time are already registered. So, due to the nature of this event ALL MEMBERS MUST PRE-REGISTER - you should have a link in your last meeting reminder to sign up OR you can simply email [email protected] and let us know you would like to go.

Alternatively, you can sign up for the whole weekend as well, Here is the schedule of events:

Friday Night, June 26th - Economic Summit 7pm -10pm
Saturday, June 27th - Day 1 of the REIN™ Get A.L.I.F.E Program (Advanced Landlording and Investment Fundamentals Expo) - 8:30am-5:00pm
Sunday, June 28th - Day 2 of Get A.L.I.F.E - 8:30am-5:00pm

If you email to register Please let us know if you want to attend only Friday OR the Whole Weekend.

See you there,

Ray Reuter

REIN™2009 Economic Summit Brochure

 

[Dan_Eisenhauer]

It has been said, but using other words... in spite of the doom and gloom reports in the media, Canada`s economy is still growing. That is cause for celebration.

 

[RedlineBrett]

Thanks Garth!

Will definitely be attending the summit!