Will Bank of Canada Governor Tiff Macklem NORMALIZE interest rates? Of course Not: Canada’s inflation rate rises to 3.6%, the highest level in a decade!
There is only one type of inflation that’s a good inflation, and that’s inflation derived from innovation.direct deposit replaced checks being sent in the mail, that’s an inflationary innovation that would benefit shareholders who invested in that innovative direct deposit entity.
People who remember Canada Post used to burn workers’ cheques when they went on strike, which gave them leverage with the government and the public when their union was negotiating a pay increase for them. Well, that leverage and the costs associated with that leverage disappeared once the direct deposit was introduced, the inflation the private sector found itself with, allowed it to invest more money into other things which helped to grow or inflate the Canadian economy because when the private sector has more money, the private sector creates more jobs.
Any inflation not derived from innovation is a government and central bank-created inflation, which is usually derived from government-derived money. So in Canadian fiat government dollar terms, according to Canadian government statistics, inflation is ONLY at 3.6%?
Now those of us who actually work for a living know inflation is far higher than 3.6% because as an example what most private businesses in the food industries do is they make things smaller so VISUALLY prices do not go up for consumers. It’s just that those Lays potatoes chips as an example instead of being 450g are now 235g, same price different sizes.
Give it a few months and the old size will make a come back with a new name such as a max value size for twice the price. That’s how the food industry in the private sector hides inflation because the truth of the matter is that when prices rise, politicians blame the private sector.
I always like to point out that people on Welfare don’t care about inflation. The only time people on welfare or fixed incomes care about inflation is whenever their fixed income doesn’t get a pay raise to match the new government pricing model.
Now, for me, I don’t believe that people who consume more than they produce should be allowed to vote in ANY ELECTION! Because if you need government assistance to survive, you will be willing to give up freedoms and liberties for a government handout or perceived government security.
The Welfare State has a history of leading towards Totalitarianism and despite what most people think, most totalitarian regimes started off as socialist democracies. Democracy is mob rule or majority rule, so if the majority is on welfare, chances are the majority will vote to preserve the welfare state at any cost.
Leftists love democracies because all they need to do is get people on the government dole and viola they have loyal supporters. Currently, Steven Guilbeault is coming after Canadians freedom of speech and a lot of Leftists are silent on the matter, why? Because they want free government money and protection of their unearned benefits.
Some people think this is something new in history, it’s not, every person who knows about socialism knows that this is usually the turning point for a society, this is when society begins to decline. The European Union couldn’t save Greece, and it’s looking more and more that Italy is going bankrupt again.
Similar to Italy who used to have the Lira, Canada has the Canadian dollar and we have a very accommodative central bank. No matter how dumb the idea, Tiff Macklem buys Trudeau’s debt. Now, in the past, this would obviously lead to IMMEDIATE hyper-inflation, but in the modern era, via the Euro-dollar system, there has been a delay of debasement for the Loonie.
Because the forex markets are decentralized, values of fiat dollars internationally are often given a different value than they’re given domestically. Gone are the days in which people would run back to gold during a crisis, instead what’s happening is a race to the bottom, meaning that fiat currencies are slowly losing their LEGITIMACY!
What this means is that eventually, this fiat system is going to fall to the floor, you can already see fiat currencies decoupling from the markets. But what’s also happening is that the markets are waiting to see which central bank with currency reserve status will raise interest rates first?
Now, as we know raising interest rates could mean anything, the real question is when will interest rates be NORMALIZED! Now if interest rates are normalized, in this environment that would equate to austerity measures all over the world.
Austerity Measures? Highly Unlikely!
The working classes of society aren’t going to pay for all of this government with taxation, so the likely outcome, if interest rates are NORMALIZED, is that there will bankruptcies by individuals and by governments, which would be deflationary.
Now, in this era, if unnecessary financial regulations like the minimum wage and social securities were taken off the government liability columns, there would be a GLOBAL BOOM within a few years, but there is no way in hell that’s going to happen.
Canadians as an example love them some protectionism, even so-called Conservatives like protectionism, so what I suspect could happen at best is a slight rise in interest rates, followed by NEGATIVE INTEREST RATES! It wouldn’t surprise me however if Tiff Macklem did nothing until the next financial crisis, in which time he turned to negative interest rates.
I don’t think people understand that there’s no getting out of this without shrinking the role of government. Western civilization was built on FREEDOMS and LIBERTIES, people with fewer freedoms produce and often CONSUME less. When fewer people are free the market gets tightened because certain thoughts or actions might be illegal which means that an entire market won’t exist.
As an example in the province of Ontario, we have a Provincial Government Liquor Cartel, known as the LCBO, so there exists no real liquor market in Ontario and therefore the people and the Ontario government miss out on a massive revenue stream that would not only lower prices for consumers but would also in this tax environment give more revenue to the Province.
But because the government of Ontario has a monopoly on Liquor innovative ideas related to selling and distributing liquor aren’t even imagined, which is DEFLATIONARY on the economy and leads to the Ontario government having to BORROW money.
With every action, there’s a reaction and because the Bank of Canada is buying up any government idea it can get its hands on, the Canadian economy is headed for an economic collapse that will hit us all by surprise. Because what most people don’t understand about economic collapses is that they’re DEFLATIONARY! Just because the central bank prints money to hide deflation doesn’t make the crash an inflationary crash. There’s no such thing as an INFLATIONARY crash. an Inflationary crash means that people are rejecting the government’s money
A minimum wage as an example is an artificial government-created barrier to entry that causes all sorts of price distortions in the market. Now, some people think that debasing currencies causes China to have an economic advantage, but the truth is, that the minimum wage and social securities cause most companies to leave Canada and go overseas.
If the Chinese debase their currency but Canada has no minimum wage or government extortion taxes that the private sector has to pay, no employer would care about China’s manipulation of their currency. What gives other countries leverage to take jobs from Canada is the barrier to entry, created by our government.
Now, this is something that a central bank can stop from occurring, but Tiff Macklem has no interest in challenging Justin Trudeau, Tiff Macklem buys up all of Trudeau’s debt, if he didn’t Justin Trudeau would have to find someone else to finance his spending sprees.
In prior times, when people were more keenly aware of the inflation tax because fewer people were on Welfare, Justin Trudeau would have to come to the Canadian public and say I will be raising your taxes to give to this person, that company, or such and such charity.
But because Tiff Macklem is so dovish and willing to buy up all of Trudeau’s debt and give Canadian taxpayers an inflation tax bill, it’s unlikely in my view that Tiff Macklem will normalize interest rates. Now, he might raise interest rates, in order to have an excuse to lower them or go negative in the future, but unless it’s forced, I don’t see Tiff Macklem normalizing interest rates, which means, that Canadians better get used to EVER rising consumer prices for the foreseeable future.
Interesting times ahead!