Canada’s Rising Dependence on IMPORTS Bank of Canada warns on prolonged inflation, ends bond-buying program – October 27, 2021,
Price controls and other silly government financial schemes work a lot better when a country isn’t almost entirely reliant on imports. As an Ontarian, I’ve seen manufacturing in this province shrink, primarily because of PRIOR government regulations, corporatist-climate-change which is the brand of climate change currently being enforced in Canada in which private companies are going to be incentivized into investing into some sort of carbon offset is a regulation on business, in addition to all of the evergrowing social justice regulations that are being enforced.
Whether you’re for or against current and even more regulations on the Canadian economy means nothing, pre-pandemic the Canadian economy was overly-regulated, regulations have only accelerated since. Canadians also voted overwhelmingly for Progressive politicians making promises to spend more money and well when you’re reliant on imports and the people sending you stuff now have to meet your ambitious climate and social justice targets, the price of imported goods will be forced upwards.
The price the forex markets give the Canadian dollar at this point doesn’t matter as much as the current regulations on the Canadian economy and that’s where in my view the Bank of Canada, sees prolonged inflation because government regulations are fixtures on the economy If there’s a minimum wage as an example, it’s illegal to pay anyone less than that minimum wage, if there’s a price on carbon, your business as a potential emitter of carbon has to make offsetting that carbon cost a PRIORITY, even if it means raising costs on your customers.
The climate corporate welfare scheme currently in force allows emitters of carbon to buy carbon credits from government-approved corporate entities. This new form of corporate welfare by all accounts will be a permanent fixture on Canadian business for the years to come. Whenever I hear people say why do companies break their necks to be in Communist China? Well, Communists aren’t Champagne Socialists, Communists believe in hard work and the communist will wait for Western nations to find a suitable reliable alternative to fossil fuels before they change their behavior.
Being that climate alarmists don’t like Nuclear, this price inflation could last for years unless… the thinking behind interest rates changes The entity currently receiving the most government welfare is the housing market. From what I understand CMHC has been putting caps on the properties it invests in, being that CMHC can pick and choose who qualifies for what and under what circumstances, the Bank of Canada could change policy when it deems fit and claim ignorance when people not covered by the CMHC find themselves underwater?
I have zero control over what Bank of Canada governor Tiff Macklem does, raising rates might be half of a percentage or because of Canada’s reliance on imports interest rates might spike to a number people think impossible? No Liberal voter can accuse Justin Trudeau of not doing everything in his power to support Canadians during COVID-19, so if his “good graces” result in some inflation that forces the BoC to raise the interest rates, I’d say Justin did well by his voters.
They can’t complain Trudeau got them a 2-year vacation. With that said I don’t know what raising rates look like in Canada in this type of environment. There are financial bubbles everywhere, it’s not just mortgage bubbles, there are credit bubbles throughout the Canadian economy and if bankruptcies become normalized well it’s the price Canada paid for CRB and debt deferrals.
Steven Guilbeault again appears to be put in a position in which he will be the fall guy, is this intentional by Justin Trudeau? I’m not sure, but because Steven Guilbeault hasn’t really grown up, he’s more of a radical and I don’t think he comprehends that there are economic consequences for his radical ideas. Now, that a beloved radical Trudeau has wisely taken a hands-off approach, all eyes will be on Steven Guilbeault the new Minister of Environment and Climate Change.
If Steven Guilbeault creates more regulations on Canadian energy, the media isn’t going to blame Justin Trudeau, the media will likely blame Steven Guilbeault when prices for energy start to rise. This potential political theatre that similarly forced Bill Morneau to resign appears inevitable, but not guaranteed.
Everyone that understands basic economics, sees the trapped the Canadian economy is in, but until the crash actually happens, everything is pure speculation.
Bank of Canada warns on prolonged inflation, ends bond-buying program | ctvnews.ca
Interesting times ahead