Interest Rate Swap Explained

An animated explanation of how an Interest Rate Swap works. Go to www.xponodigital.com to find out how you could get your financial products visualised.
Video Rating: 4 / 5

Low interest rate debt that is easily accessible encourages and enables the masses to engage in obtaining excessive amounts of consumer debt.

It creates affordable financing and then subsequently causes unfordable home prices. Ultimately adding to an already over inflated market place (fuel to the fire essentially).

I do not believe the Bank of Canada will increase interest rates however one thing is certain over the long run interest rates are a measure of risk and these rates are artificially engineered to be low and have created one of the greatest credit bubbles we have ever seen.

IMF cuts outlook for Canada
http://www.ctvnews.ca/canada/imf-cuts-canada-s-economic-outlook-amid-global-uncertainty-1.988385

Moody’s Downgrades Canadas Banks
http://www.cbc.ca/news/business/story/2013/01/28/business-moodys-downgrades-banks.html

44% Drop in Canada’s Real Estate Prices
http://www.financialpost.com/m/wp/personal-finance/mortgages-real-estate/blog.html?b=business.financialpost.com/2013/03/11/canadian-house-prices-could-fall-44-with-severe-economic-shock-moodys

Real Wealth by Bruce Joseph is an real estate blog dedicated to providing unbiased financial awareness. The goal is to prepare, position and prosper during the most adverse economic times in Canadian history. With the later and the right attitude a crisis becomes an opportunity. Don’t let a good recession go to waste!

Disclaimer: When dealing in financial matters, you are urged to consult a financial advisor for legal, tax or investment advice. Every effort has been made to present information in a clear, exacting manner. However neither the publisher nor the authors can be held responsible for any losses incurred due to the actions of any individual as the result of these videos or any omissions or errors contained herein.

18 comments

  1. Randy Wen says:

    This is what’s bankrupting a lot of local municipalities and institutions
    as they’re getting screwed due to rate manipulation by the global banking
    cartel headed by the Vatican; billions of dollars are lost annually to the
    banksters on just this “instrument” alone. As an example, these interest
    rate swaps and other derivative products add up to supposedly $100
    Trillion+ *gross* on JP Morgan’s books and other banks around the world are
    doing the same thing; although the banking system in the West are the
    primary culprits. This system forces the cartel to have no choice but to
    continue the bond and interest rate manipulation on the downside or else
    the whole system will self-destruct as the dominoes effect triggers and
    their house of cards will fall. If you don’t understand this then re-watch
    this video until you do because this is one of the reasons we never
    recovered from 2008 and headed towards another collapse of EPIC proportion.

  2. kie7077 says:

    So if interest rates go too high then the lender of the swaps either goes
    bankrupt or gets a bailout from the gov’t.

    But that’s extremely unlikely, so there’s no point in buying swaps because
    the only way it can work is that the bank wins and you pay them money.

    Why pretend that you can beat the bank?

  3. chris77777777ify says:

    the issue is there is so much currency in existence, creating more is not
    necessary

    governments must let the people do what they do. & stop printing more money
    to retain an ego of politics. 

  4. david g says:

    Hey i love your videos. I’m from Vancouver b.c and i’m holding off buying a
    house. Instead i’m prompting to rent. Just waiting till the bubble burst
    and vancouver realestate goes down. Do you have any predictions when this
    might be?

  5. Bruce Joseph says:

    Hey Kelly, based on fundamentals and rationality the market should be
    cooling. The belief we may see a brief spring increase in price and the key
    word is may is due to the desperation of mortgage lenders slitting their
    throats on margins and dropping rates to a point of almost no profit. Many
    banks and realtors have ramped up their spring market advertising on the
    new found low rate financing band wagon.

  6. Vasi H says:

    Thank you Bruce for doin what you do! I have, over the past 2 years, senn
    this particular asset bubble inflating and have tried to warneople and
    almost no one believes this to be true because the news says Canada is
    different and our banks are fiscally responsible etc. etc. now I point
    people to your channel (among others) so at least I reserve the right to at
    least have said “don’t believe me, look it up for yourselves.”

  7. Bruce Joseph says:

    Ironically people (not all but many) actually BRAG about the amount of low
    interest debt they have accumulated. Comparing costs of debt in such a way
    that’s competitive. Assuming they are clever in the manner they switch
    their credit cards back and forth to take advantage of teaser rates. It’s
    cultural and quite dangerous.

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