You don’t have to be a financial expert to understand what’s going on here.
When banks in the United States fail, investors start to get nervous. They don’t want to put their money in a sinking ship, so they start looking for safer places to park their cash. And where do they turn to? You guessed it, Canada!
Investors know that Canada is a stable and reliable country, so they start buying Canadian government bonds. When there is more demand for these bonds, their prices go up, and their yields go down. Fixed interest rates in Canada are priced on the bond yield so this, in turn, leads to lower interest rates in Canada.
But wait, there’s more! As interest rates go down in Canada, it becomes cheaper for Canadian businesses and individuals to borrow money. The lower cost of borrowing is a welcome sigh of relief as fixed interest rates have been rising rapidly over the past 6 months. Although the interest rate decrease was small it’s better than an increase.
So, while the bank failures in the US may seem like a bad thing, they do have a silver lining in Canada. It’s like that saying, “when life gives you lemons, make lemonade.” In this case, when the US banks fail, Canada gets lower interest rates and a boost to its economy.
On a personal note – we were supposed to visit the country of Vanuatu (known for epic scuba diving) in March but the week prior to us arriving they were hit with multiple natural disasters (category 4 cyclone and earthquake). We decided it was best to abort Vanuatu, and instead head back to Bali (we were in Bali in August) and explore more of Indonesia. We love Bali so much. The Balinese people are seriously the happiest people on the planet, and it’s been awesome to learn more about their culture and religion.
March 22 was Nyepi and is a Balinese “Day of Silence” – this means no electricity, no internet, no leaving your home/hotel for 24 hours. SILENCE. We opted to head for the Gili Islands which honor Nyepi but less strict. The island was closed until noon and then you could continue with activities.
After Gili we headed for Sumbawa which is a small fishing village where there are whale sharks that are attracted to the shrimping/krill boats. We were super fortunate to be able to scuba dive with 2 whale sharks for over an hour! It was an EPIC moment in my life. We then headed for Komodo National Park and hopped on a live-a-board dive boat for 5 days. We stopped in the National Park and were fortunate to see six almost extinct Komodo Dragons.
Our time in Indonesia is coming to and end and early April we move onto Fiji for the next 6 weeks.