Looking ahead, we wonder how long this reliance on easy money can continue, especially if inflation takes root, because of both out-of-control government spending and undercapitalized supply channels that remain disrupted and, therefore, are unable to meet recovering demand in a post-COVID-19 world.Article content
We are already starting to see this type of scenario playing out in emerging markets such as Brazil. In the 12 months to July,, forcing its central bank to raise its benchmark interest rate to 5.25 per cent from an all-time low of two per cent. This would not be ideal for the many heavily borrowed Canadian homeowners or our current federal government, which may be forced to raise taxes to offset a large increase in its debt-servicing costs, given that the astounding level of deficit spending may soon prove unsustainable.
Intrest rates go up so do my dividends