Interest Rate Status Quo?

So another announcement was made today that the Canadian prime interest rate will stay at 0.5% Very good news for those who have variable mortgages.  To those with fixed mortgages better hope your re-amortization period is coming up soon.  Why the sudden freeze prime interest rate was due to the weakening financial strength from Europe and Japan.  I can't really wrap my head around how and why it is affecting our prime interest rate unless it has something to do with imports, exports, stock market, and foreign investments.

If it was really the case of imports and exports and foreign investments, this would mean, in economic terms, the decrease in Canadian exports thus less money profited by Canadian companies which means Canadians have less money to pay for mortgages and less money all around to stimulate the economy.  Don't quote me on this one.

How does the stock market come into play for stock markets you say?  If you were someone that uses the Smith's Maneuver or are using some sort of equity to pay off your mortgage then you would be devastated by this news because the worst has yet to come.  I'm sure many of you out there have stock portfolio that are already in shambles from the recession and now the Euro crisis & Nippon crisis.

Despite all this bad news, this could mean more foreclosures on the rise soon due to people not able to pay off their mortgages due to lay offs.  The price of crude oil has really tanked as of late and many oil companies are unable to invest in any mega projects so watch out for Alberta and Saskatchewan to have an increase in pre-foreclosures and foreclosures very soon.

G.