The Globe and Mail reports in its Saturday, July 15, edition that thanks in large part to seven
years of rock-bottom interest
rates, many investments around
the world are shockingly expensive.
The Globe's Ian McGugan writes that from Canadian homes to
U.S. stocks to European bonds,
asset prices teeter at historic
highs.
Mr. McGugan says most of
the world's major central bankers
-- including the Bank of Canada
-- have delivered unusually
uniform messages in recent
weeks, pointing to higher rates
ahead.
Everything else being equal, a
global move to higher rates is
likely to start pressing down on
asset prices over the coming
year, in much the same way as
lower rates after the financial
crisis provided a powerful push
upward.
It is easy to sketch a nightmare
scenario in which central bankers
jerk on the rate lever too
fast, toppling housing markets
and stock prices into the ditch
and bringing about a new crisis.
More likely, though, is for
rates to inch higher in a slow,
cautious crawl. Our monetary
overlords will want to avoid setting
off a new emergency even
as they attempt to bring rates
back to more normal levels
nearly a decade after first
slashing them.
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