Economic Deflation vs. Price Deflation: The Bank of Canada has successfully avoided deflation – July 12, 2021,

This blog post is for the most part about an article on the financial post titled Postmortem: Time for the BoC to taper in which the following words were written:

the Bank of Canada has successfully avoided deflation, which was its primary concern a year ago. A similar number of firms reported that they expected their prime rates of interest would increase over the next two years.
Postmortem: Time for the BoC to taper |

For someone like me, who invests based on government and central bank policies, it’s important that I understand when I’m looking at a company’s balance sheets, what type of deflation I’m reviewing. Is a company restructuring to make more money and become leaner in the future or is the company merely getting obese?

With most Western governments what I’m seeing now is obesity, which is often the case in many third-world socialist countries. It’s always funny to me to be n a poor country and observe obese poor people. Some people claim that obese poor people only exist in America, this is simply not true, obese poor people exist in almost every country in the world, because most humans if they don’t have to work, won’t work.

Some people the immigrate to Canada from third world countries are often shocked o learn how hard some Canadians work EVERY SINGLE DAY! In order to maintain the beauty we enjoy in this great country, we have to work to MAINTAIN it. So for me, I take the words DEFLATION very seriously.

Currently, the world is using a fiat money standard, which is basically political money backed by nothing but a countries ability to service its own debts. Now in theory this fiat money system can be just as good as a Gold Standard if the central banks allow the markets to function naturally.

Of course, the markets in Canadian can’t function naturally because Canada has a bloated government. Technology for the most part has ended economic DEFLATION, but what technology has done is it’s created a lot of price deflation in which the government has to intervene and inflate prices.

As an example, a lot of Canadians don’t see much value in Canada Post anymore, why? Because some genius came up with the idea of Direct Deposit even the Federal government of Canada encourages people looking to collect their income tax cheques sign up for direct deposit. This is DEFLATIONARY in prices, because if let’s say Canada Post didn’t have a Parcel Service, in theory, it would have had to restructure its business model.

However, because Canada Post is a Federal Crown Corporation that absolves it from free-market competition, the prices it charges consumers isn’t based on any COMPETITIVE market fundamentals, which allows Canada Post to base its pricing on whatever it feels is right for its bottom line.

Because a law exists prohibiting Canada Post from going bankrupt, and the wages and benefits it pays its employees come out of thin air, helps to distort wages and prices in the entire courier industry in Canada. Canada Post is a prime example of artificial Price Inflation, which sets a floor that doesn’t allow price or wage deflation to occur in the Canadian economy.

Canada Post by the way isn’t the only Canadian government entity that does this, there are all sorts of government entities preventing PRICE DEFLATION for Canadian consumers. I bring this up because economic deflation in this modern world can only come from the government because guaranteed price inflation is built into the system.

The modern Conservative Party in most Western Countries from an economic standpoint in most instances spends just as much if not more fiat money than their Liberal counterparts, the difference being Conservatives typically won’t raise taxes and attack personal Liberties to the degree the modern-day Liberal Partys attack them, why? Because the markets will accept these slow inflation schemes as long as the government leaves room for profitability.

As I always like to point out, void of fiat money, profitability or inflation typically comes via INNOVATION. If the government weren’t intervening the economy would be fighting deflation and how private enterprise would counter this deflation would be via innovation, which via technology is ABUNDANT!

Now, by abundant, I don’t mean that innovation in the private sector would help the government to grow, no, it’s the exact opposite, innovation is helping to make the government smaller. The government fights this reality by claiming the economy can’t grow or function without it.

The end result is as the government grows, prices for things become more expensive, but Government is inefficient, so higher government derived prices, don’t equate to inflation, higher government prices actually accelerate ECONOMIC DEFLATION

How the government fights economic deflation is the government borrows more fiat money, whenever the government does this it serves as a TEMPORARY stimulant to the economy. But you see as the government borrows more money, prices get higher, as prices get higher, Canadian fiat dollars purchase fewer goods and services, which again creates more DEFLATION.

So for myself, the bank of Canada is merely helping to facilitate bad ideas, which is fine if that’s what the Canadian people want, but at the very least I wish the media would explain what’s happening in plain language so that Canadians who care to know, know what’s going on so that when the economic collapse occurs, Canadians know how to fix it.

For most of us who understand what’s going on, all we ask is for financial education in our school systems. Capitalism was created to IMPROVE the human condition, it wasn’t created to enrich the political elites at the expense of the working classes. It’s criminal what’s happening in the western world and all I’m asking for is the ability for the average Canadian t know what they’re signing up for.

Interesting times ahead!