Inflation rate holds at 2.2% in May despite soaring gasoline prices – June 22, 2018
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A few things Canadians should be concerned with regarding inflation in Canada, the first thing is the inflation Canadians received are derived from Justin Trudeau’s Liberals running a deficit as well as increasing the size of the government, the contributing factor was the Bank of Canada keeps interest rates low. I’ve been on record for saying that I have no idea why the Loonie is even as high as it is now. The loonie is currently trading at 74.96 cents US.
When I look at the numbers I see 59 cents US, the Bank of Canada is running out of options with every passing day and because the Canadian manufacturing sector hasn’t exactly been growing the way I’d like it too, negative interest rates in Canada could prove to be disastrous. That said if the Bank of Canada raises interest rates at a time like this, where the Liberal government actually raised regulations on the mortgage and credit markets, this, well this Canadian economy could be headed for a world of problems.
Furthermore, to make matters worse, Trudeau is going to add Tariffs to the U.S made goods that his team of advisors feels won’t hurt Canadian consumers that much, but that’s subjective because when some U.S goods reach customs who knows what might happen once this trade war hits July 1, 2018. More times than not duties and customs becomes a judgment call because there is a lot of trade coming back and forth with Canada and the United States. What may end up happening is every U.S product gets slapped with a tariff and it’s up to the recipient to fight back.
Let’s say Canadians weren’t in truckloads of debt, I wouldn’t be so worried, but there hasn’t been much wage growth and Canadians are in historical levels of debt and we’re not just talking about the middle-class mortgage debt here we’re talking about unsecured credit lines, credit cards, auto loans, personal loans, furniture loans and other subprime type loans. With the government growing at the same time, Canada is slowly inching towards Argentina territory where the only way to get out of their mess is to shrink government.
One of the best moves Trudeau made recently was leaving marijuana-related issues to the provinces, this could prove to be an economic stimulus.
Interesting times ahead.