Posted by Tim Stobbs on December 17, 2008
I’m watching the news last night after dealing with a LONG day of meetings, so I’m tired, but even I did a double take when they announced that the US Fed’s target rate is now 0 to 0.25%.
Sniff, can you smell that desperation is in the air? Basically having money at just about free and expecting that rate to stay there for a while gives me the creeps. It’s not so much that fixed income rates suck or the massive job losses that are creeping me out, but rather that feeling of history repeating itself. Correct if me if I’m wrong, but didn’t really cheap interest rates for a long time in the US help start the last bubble? Could we just end up repeating what happened all over again unless some people are very careful in the US?
Perhaps something else I’ve noticed recently is the shift on the ground here. I’m starting to see cracks in the little steam engine that is Saskatchewan’s economy, which was supposed to lead the country in 2009. My former workplace now has rumors that there will be a wage freeze in 2009. A guy that is building his house now suddenly has trade’s people, that were ignoring him for months, calling everyone looking for some work. The provincial government was drowning in cash last quarter points out they may need to borrow some cash out their income stabilization fund next year to balance the books.
The gravy train that was the great boom for Saskatchewan is starting to slow down and I’m not sure what that is going to mean in the short term.
So what’s happening in your neck of the woods? Are you personally worried? Please share your thoughts.