Winnipeg Free Press

Winnipeg Free Press (Newspaper) - January 18, 1995, Winnipeg, Manitoba Winnipeg free press d q january Ken free press the fed Wiches Are in More of a bind after interest rate some others Calm As rates Rise salespeople take opposite View of jump by Gerald flood and Bruce Owen staff reporters when interest rates jumped so did Dawn and Gerald the who Are expecting their first Are in the Market for their first Home that will now Cost them More it puts us in More of a but we need to find a Home so Well just have to Deal with i dont see what else we can its not the time for Young people to look for a that for a 23yearold was More the liberals Are Back in and look whats he and everyone called Mulroney a a month relax real estate agent Verna Parfenick didst even blink when she heard the Bank of Canada rate jumped a full Point i know i say in not in a but i remember when rates were 19 per even 21 per she even then we were Selling six houses a she calculated the on Point increase would add a month to the Cost of carrying a its to disqualify a marginal firs time but not enough to dissuade most people seeking to buy a the r ill just have to dig up a larger Down payment or look for a smaller Gerald sure i feel but i got to go with what they the Bank of Canada rate climbed to per cent yesterday from per the biggest single Day increase in two setting off a round of interest rate hikes by Banks and other Parfenick said she will advise most new buyers to take a Short term mortgage and renegotiate when rates come Down of she people who Are going to buy a House Are going to buy a up the Street at Jim Gauthier business manager Greg Flom relaxed behind his desk in Manitoba largest car unlike he had been on top of the interest rate change since 11 when news of the effect it would have on financing charges bad been faxed to his but like he was its so i dont think too much about he he said the change will add about y Flom its routine a month to the Cost of financing a the biggest thing in sales int interest monthly he Flom said its a but the Economy booms when rates Are not it seems when rates Are High and people Are earning More on they Are More prepared to take on greater debt he when you look Back to 8586 when rates were 15 to per business was he the Economy is never Good when rates Are he said he expects rising rates just when people Are making decisions about resp will give people a lift and encourage trading in currencies As for the falling he said giant corporations like general motors Are constantly buying and Selling currencies to hedge against despite the sliding Canadian he Doest expect sticker prices on new cars to at Robins Winnipeg transit supervisors George Lawson and Tom Wickett sipped Coffee and confessed they had no idea what had happened to interest All i can say god ill have my House paid off in two he said no one gets very excited about changes in rates any weve been Lucky for a few i remember when i was paying 13 per cent for a mortgage and now in paying if its going that Wickett let me put it this Way people know they cant do a god Damn thing about son charged despite wounded dads Story burning nets charge a Man whose 13yearold son is accused of shooting him in the stomach allowed police to think hed accidentally shot Stonewall ramp Bert Clarke said the who is now Home from the was reluctant to implicate his son in the but the boy has now been charged with attempted murder and Dis charge of a firearm with a teenager from the Sandy Bay Reserve will be tried on an at tempted murder charge this sum Mer after his younger brother was doused with gasoline and set afire last ramp charged the 17yearold after his 11yearold brother was rushed to Hospital with Burns to 40 per cent of his inside Story governor blamed for Thiessen Buck experts Finger Bank of Canada chief for dollars slide by John Douglas business reporter in the International Money mar its being called the Thies sen and those who buy Canadas Bonds have decided its Worth Only about 70 cents when the Dollar begins to people Point to Canadas staggering its budget constitutional problems and even the eco nomic debacle in All have played a part in the markets determination of the currency but if you ask traders Why the Dollar is approaching a 20year they Point to the Bank of Canada and its Gordon 100 per cent Thiessen this is not not the deficit and not said Mario Angas of mrs a financial Market information service based in its 100 per cent Thiessen and his willingness to de fend the International Money markets have been sour on the Canadian cur Rency since when Thiessen failed to come to the dollars de Fence in the Wake of higher interest rates in the United if nothing the International Community always had Faith in the Canadian currency under Thies Sens predecessor former governor John Crow because he understood the need to fight inflation and main Tain the attractiveness of the cur Rency by maintaining its said Jeff chief economist at the Wood Gundy what we Are seeing right now is that International investors do not have Faith in Thiessen to defend the the most recent run at the Dollar is indirectly related to Mexico plummeting peso simply because it International Money markets have been dumping the Canadian Dollar in recent sending it spiralling in this the free press looks at what that Means for local governments and professional sports part1 today interest rates Shore up tomorrow retailers pay the Friday droopy Dollar boosts Export saturday currency woes drive up govern ment second blow for a1 highlights the woes faced by coun tries with huge debt be sides Mexico and International Money traders took runs at the swedish the Spanish be the italian the thai the indonesian rupiah and the Bel Gian the Money markets Are infect Rubin when they see problems in one they look for weaker economies to apply the same and in Canada they see a country where foreigners hold 40 per cent of the National in the Canadian Dollar began Crow Quick to defend Buck its steady decline nearly two years before Thiessen became gov under the Bank re acted to runs at the Dollar by jacking up interest rates but with the Economy mired deep in recession and inflation All but the Bank of Canada adopted a deliberate policy aimed at keeping interest rates even if that meant devaluing the that was in and since interest rates have fallen to 20year lows and rebounded while the Dollar has lost nearly 18 cents against its american this combination resulted in an economic recovery led by Canadian exports flooding across the Border into the United states and record Levels of foreign investment in can Adas resources and Industrial pro the min Boom created nearly new jobs a by the time the liberals came to Power in Ottawa and Crow was re placed last the Dollar was Trad ing in the 76cent while on the surface Thiessen appeared to be maintaining an existing Nesbitt Burns economist Sherry Cooper said the new Gover nor embarked on a monetary policy based on Domestic economic considerations and ignoring International trends towards higher Short term interest capital takes flight any country like ours that needs to continue to attract foreign investors capital must maximize their re turns and minimize she this Means we have to pay relatively High interest rates and defend our currency from devaluation de spite the ramifications for our Domestic if we dont and recently we have capital takes Thiessen has also adopted a Radi Cally different policy when it comes to the spread Between american and Canadian Short term interest Cooper the perception is that the Bank of Canada is prepared to let rates Rise through Canadian Cooper both Crow and his Gerald used the overnight loan rate to Send the Market signals they would not tolerate a run at the for every cent the Dollar de both increased the rate at which Banks lend Money to each other for a 24hour period by 90 basis until last Thiessen had increased it an average 29 basis it is Only in the last week that he has moved to protect the Dollar by hiking the rate 150 basis Points in three Thiessen has reacted to the for eign Exchange markets Only Belat when massive intervention failed and crisis Cooper we have a crisis on our if we want to maintain our Appeal to the global the Bank of Canada must prevent further cur Rency now open new location Pembina Village shopping Centre 2085 Pembine 2698113 moved from Southwood mall x shoppers drug Mart everything you want in a ;