{"id":16656,"date":"2016-01-19T14:45:13","date_gmt":"2016-01-19T19:45:13","guid":{"rendered":"http:\/\/olduvai.ca\/?p=16656"},"modified":"2016-01-19T14:45:13","modified_gmt":"2016-01-19T19:45:13","slug":"canada-set-to-unleash-negative-rates-as-oil-patch-dies-depression-deepens","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=16656","title":{"rendered":"Canada Set To Unleash Negative Rates As Oil Patch Dies, Depression Deepens"},"content":{"rendered":"

Canada Set To Unleash Negative Rates As Oil Patch Dies, Depression Deepens<\/a><\/h3>\n
This Wednesday, the Bank of Canada has a decision to make.<\/div>\n
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Canada\u2019s oil \u201cdream\u201d is dying thanks to the inexorable slide in crude prices and as the\u00a0IEA made clear<\/a>\u00a0earlier today, the pain is set to persist for the foreseeable future as the world \u201cdrowns in oversupply.\u201d<\/p>\n

\u201cLower for longer\u201d has hit the country\u2019s oil patch hard. We\u2019ve spent quite a bit of time\u00a0documenting the plight of Alberta<\/a>, where job cuts tied to crude\u2019s slide have led directly to rising suicide rates, soaring property crime, and increased food bank usage (not to mention booming business for repo men).<\/p>\n

\"\"<\/p>\n

Adding insult to injury for Canadians is the plunging loonie. Because the country imports most of its fresh fruits and vegetables, the weak currency has triggered a sharp increase in the price of many items in the grocery aisle as documented in a\u00a0hilarious series of tweets<\/a>\u00a0by incredulous Canadian shoppers.<\/p>\n

The question for the Bank of Canada is this:\u00a0is the risk of an even weaker loonie worth taking if a rate cut has the potential to head off the myriad risks facing the economy?<\/strong><\/p>\n

We\u2019ll find out what the BOC thinks tomorrow, but in the meantime, analysts have weighed in. JP Morgan\u2019s Daniel Hui says CAD needs to fall further lest producers should simply close up shop. “[W]ith West Canada Select (WCS) now sitting just a dollar above the average per-barrel operational cost of $20 (Canadian),\u00a0the risk is that any further decline will cause a whole new host of spillovers<\/strong>\u00a0including potential shutdown and retrenchment of energy extraction and exports (with its attendant growth and balance of payment effects) or the potential of highly leveraged companies running operational losses, and the more contagious financial impact that might have in Canada, with broader spillovers.”<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Canada Set To Unleash Negative Rates As Oil Patch Dies, Depression Deepens This Wednesday, the Bank of Canada has a decision to make. Canada\u2019s oil \u201cdream\u201d is dying thanks to the inexorable slide in crude prices and as the\u00a0IEA made clear\u00a0earlier today, the pain is set to persist for the foreseeable future as the world […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[6036,1838,103,1861,124,4333,184,534,1264,775,4318],"class_list":["post-16656","post","type-post","status-publish","format-standard","hentry","category-economics","tag-b","tag-barclays","tag-canada","tag-canadian-dollar","tag-central-banks","tag-crude","tag-crude-oil","tag-monetary-policy","tag-recession","tag-switzerland","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16656","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16656"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16656\/revisions"}],"predecessor-version":[{"id":16657,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16656\/revisions\/16657"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16656"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16656"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16656"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}