REAL 10 YEAR INTEREST RATE Bank of Canada 10 year Bond less CPI; also the TSX Real Estate, Energy and Gold Indexes
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The chart above shows that in December 2018 the "Real" Bank of Canada 10 Year Treasury Yield (the rate less CPI - blue dotted plot) popped back up above the negative Nirp-O-Nomic rate zone even though the nominal 10yr dropped 35 bps because the CPI plunged 70 beeps to 1.7% well below the BoC target... and this after 9.8 years of ZIRP & NIRP. Is deflation in the wind? It looks so on the Yield Curve chart.
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Gold has put in a five year base and is attempting another breakout above the midpoint in that 5 year plot.
Global currency turmoil as well as trade and war unknowns are coloring both sides of the debate on the ultimate direction of gold and interest rates. The TSX real estate cash index has severley turned down and is now carving out a new downtrend heading towards the last major peak in 2Q 2007 which subsequently crashed. |
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The 10 year bond yield is a bench mark for real estate mortgage rates. I have used it in my Vancouver Condo Case Study to measure risk against the buy and hold argument. |
Compare 2006-2008 to 2015-2017
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