The chart above  shows that in January 2012 the spread between the Bank of Canada rate and the residential 5 year fixed mortgage rate remained unchanged as the banks kept their posted 5 year fixed mortgage rate at 5.29% and the BoC held its rate at 1.25% continuing to suppress the real cost of money and distorting market pricing. The December CPI print dropped 6 beeps to 2.3% well below the May 2011 high of 3.7% and produced the 26th straight month of negative real rates forcing otherwise 'conservative' Canadians to become either reckless investors chasing after yield or penny pinching martyrs watching their savings evaporate. The "real" rate for the long bond ticked up into a slightly positive yield (0.2%) with the CPI plunge and the uptick in the long bond. The failed Government policy of urging Canadians to borrow at low rates and spend at high cost (rather than learning and becoming productive) is "taxing" savers and is not helping to increase productivity or produce employment.