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The Bank of Canada Governor Mark Carney announced today that the Bank’s main focus going forward is to closely monitor the inflation factors.
In a speech to the Hailfax Chamber of Commerce he stated the following main points:
1- monetary policy focus on the inflation and the financial crisis is key
2- inflation targeting of 2%
3-Our labour, product and capital markets are flexible and our bank system is sound
4-Canada has the clearest most powerful monetary policy framework in the world
5-Canada should accelerate to above-potential growth in 2010
The official Bank of Canada announcement is below:
HALIFAX, Jan. 27  – Canadians can be confident that monetary policy will maintain a “relentless” focus on controlling inflation, whether it rises above or drops below the official target range, Bank of Canada Governor Mark Carney said today.
Experience has shown that controlling inflation is the best contribution that monetary policy can make to Canadians’ economic and financial well-being, an issue that is particularly crucial during this period of extraordinary global financial turmoil, the Governor said in a speech to the Halifax Chamber of Commerce.
“In time, the global financial crisis will end, and the global economy will recover, although the speed with which this will happen is subject to a high degree of uncertainty,” the Governor said. “The relentless focus of monetary policy on inflation control is essential in this time of financial crisis and global recession, and remains the best contribution that monetary policy can make to the economic and financial welfare of Canada.”
Governor Carney noted that the Bank’s inflation-targeting framework, established jointly with the Government of Canada, takes a symmetrical approach to controlling inflation. This means that the Bank worries as much when inflation falls below the target of 2 per cent as when it rises above target, he said.
Although the severe global financial crisis has raised concerns about deflation in some countries, the possibility of such a sustained fall in prices is remote in the Canadian economy for several reasons, said Governor Carney. Canada’s labour, product, and capital markets are flexible; its banking system is one of the soundest in the world; and households, businesses, and the public sector have considerable financial flexibility. As well, Canada’s floating exchange rate allows for an independent monetary policy which ensures that “we are in control of our own monetary destiny,” he said.
Moreover, Canada has the clearest, most powerful monetary policy framework in the world. “The advantages of that framework have been demonstrated, with inflation brought down and kept low and stable since the early 1990s, and they are equally relevant in times of disinflationary pressures,” he said. The Governor reiterated the Bank’s economic projection as outlined in its Monetary Policy Report Update published on 22 January.
Although economic activity in Canada is projected to decline this year, it should accelerate to above-potential growth in 2010, supported by policy actions and the past depreciation of the Canadian dollar. On an annual average basis, real GDP is projected to decline by 1.2 per cent in 2009 and to rebound by 3.8 per cent in 2010.

The Bank of Canada has lowered the overnight lending rate to a new record low as the warns that the economy will shrink in 2009.

In an effort to boost the economy they have reduced the overnight rate by 0.5% to 1%.

By lowering the rate to 1.0%, this now becomes the new low point since the rate was 1.12% back in 1958

There is a great possibility that the Bank of Canada may not been done yet and there is a strong possiblity that in March the rate could be lowered by another half point.

The CBC has stated that “The Canadian economy is expected to contract by 1.2 per cent in 2009, but the bank sees a recovery in 2010, when the economy is projected to expand by 3.8 per cent.

Back in October, the bank projected growth of 0.6 per cent in 2009, and 3.4 per cent in 2010.”

The official Bank of Canada announcement is below.

OTTAWA – The Bank of Canada today announced that it is lowering its target for the overnight rate by one-half of a percentage point to 1 per cent. The operating band for the overnight rate is correspondingly lowered, and the Bank Rate is now 1 1/4 per cent.

The outlook for the global economy has deteriorated since the Bank’s December interest rate announcement, with the intensifying financial crisis spilling over into real economic activity. Heightened uncertainty is undermining business and household confidence worldwide and further eroding domestic demand. Major advanced economies, including Canada’s, are now in recession and emerging-market economies are increasingly affected. Energy prices have fallen as a result of substantially weaker global demand.

Stabilization of the global financial system is a precondition for economic recovery. To that end, governments and central banks are taking bold and concerted policy actions. There are signs that these extraordinary measures are starting to gain traction, although it will take some time for financial conditions to normalize. In addition, considerable monetary and fiscal policy stimulus is being provided worldwide.

Canadian exports are down sharply, and domestic demand is shrinking as a result of declines in real income, household wealth, and consumer and business confidence. Canada’s economy is projected to contract through mid-2009, with real GDP dropping by 1.2 per cent this year on an annual average basis. As policy actions begin to take hold in Canada and globally, and with support from the past depreciation of the Canadian dollar, real GDP is expected to rebound, growing by 3.8 per cent in 2010.

A wider output gap through 2009 and modest decreases in housing prices should cause core CPI inflation to ease, bottoming at 1.1 per cent in the fourth quarter. Total CPI inflation is expected to dip below zero for two quarters in 2009, reflecting year-on-year drops in energy prices. With inflation expectations well-anchored, total and core inflation should return to the 2 per cent target in the first half of 2011 as the economy returns to potential.

Against this background, the Bank today lowered its policy rate by 50 basis points, bringing the cumulative monetary policy easing to 350 basis points since December 2007. Guided by Canada’s inflation-targeting framework, the Bank will continue to monitor carefully economic and financial developments in judging to what extent further monetary stimulus will be required to achieve the 2 per cent target over the medium term. Low, stable, and predictable inflation is the best contribution monetary policy can make to long-term economic growth and financial stability.

Information note:

A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the Monetary Policy Report Update on 22 January 2009. The next scheduled date for announcing the overnight rate target is 3 March 2009.

The markets were surprised today when The Bank of Canada cut the key interest rate by three-quarters of a percentage point on Tuesday as it warned that Canada is entering a recession, the rate was cut by 75 basis points to 1.5% a 50 year low.
With the interest rate cut the bank of Canada matched the deep rate cut made on October 21, 2001, to deal from the September 11 terrorist attacks in New York and Washington.
The CBC news reports “Canada’s economy evolved largely as expected during the summer and early autumn, it is now entering a recession as a result of the weakness in global economic activity”.
As a result, the bank of canada has lowered the key lending rate by a combined 150 basis points in the span of two months.

When a purchase agreement is signed between a buyer and a seller, the buyer is asked for some amount of money to be paid up front. This amount will be placed in a trust account. This deposit is known as “earnest money.”

The buyer and seller can negotiate the actual amount of earnest money. The amount may differ among contracts. It could be as low as $500 or possibly as high as 10% of the purchase price.

Some factors that can influence earnest money amounts include:

*Seller psychology: an uncertain seller may request more earnest money

*Market conditions: a stronger market may result in more earnest money

*Buyer economics: first time buyers may be asked for less earnest money

This particular financial transaction is a confirmation made in “good faith” by the buyer to show that he intends to complete the agreement. How much or little is paid doesn’t matter.

If it should happen that, during the process, the buyer violates the terms of the purchase agreement or backs out of the deal, the earnest money can be kept by the seller. This does not occur much because, when the purchase agreement s are written , there are “escapes” for the buyer, called “contingencies” written into the original agreement.

A typical contingency is that the seller must provide a clean title policy to the buyer, or that the buyer must secure financing prior to given date, or that the home must pass a satisfactory inspection.

Earnest money will be returned to the buyer if any of the above contingencies cannot be met. Such failure with regard to the contingencies will void the contract.

When contingencies are met, however, earnest money becomes a deposit and is applied directly to the buyer’s bottom line at settlement. If the buyer is expected to have $50,0000 for the closing, for example, the true bottom line is $50,000 minus the earnest money deposit.

Earnest money customs vary from state to state, city to city, and even locale to locale. Be sure to ask your real estate agent and/or real estate attorney for professional counsel before signing purchase contracts. The earnest money you save may be your own.

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Author: Navneet MaheshwariIt

It is feasible to always take help from professional real estate agent to make a lucrative deal. Real estate brokers provide every kind of help to sellers as well as buyers. Without a nice real estate agent, you may never get an implausible deal. There are various ways to find the best real estate agent in your desired area. Real estate agent can be a person as well as a firm that helps you in selling/buying real estate. Checking the local bulletin boards might also provide you with various real estate agents. With the aim to sort out the best from such a huge list, you should ask your family or friends regarding their experience with the real estate agents.

Real estate broker tells you the current value of real estate. Lots of your friends or family might have gone through the exact situation and could recommend a preferred real estate agent to you. Nowadays broker performs all essential business activities. Real estate broker deals with industrial, residential as well as commercial real estate.

Always remember to short list several real estate agents before finalizing the one. Call two or more agents for interview and then ask some questions about the firms where they worked for some time, Once you have short listed few realtors, the next thing to do is to contact the real estate agents in person. Agent can provide help for any kind of real estate. Broker gives suggestions to sellers to increase the cost of assets and also about finest piece of land to the buyers. Without getting the proper information and nice price about your house or the property you want to buy, you may have no illusion where exactly to look. Dealing with which type of customers, how long they’re in sell/purchase business and also ask about active number of clients.

There are few real estate agents who will tell you the true price and might aim to fetch as much money as they can from you, thus look out for the real estate agent that offers you the best property at best price or best deal to sell your property.

This can only be achieved by meeting several agents and then comparing the deal offered by all. Generally real estate agents don’t work as lawyers for the parties but they provide the best services for the sellers as well as buyers. Also look at the number of resources real estate agent has and a large market plan, in order to make the best deal with the best customer. For buyers, real estate agent finds the better real estate as per buyers’ requirements.

Anand is a real estate professional for http://usa.b4uindia.com/realestate/