Canada’s Lower Inflation Rate(4.3%) in March is Likely Due To Lower Retail Sales – April 21, 2023,
April 18, 2023, an article came to my attention stating that Inflation fell to it’s lowest level since August 2021 in MARCH, which sounded absolutely ridiculous, however, the data might not have been that far off if you comprehend that consumer price inflation leads to economic DEFLATION.
People’s behavior changes when they notice prices constantly going up; they’ll buy less, they’ll buy smarter, and they’ll stop buying certain things. Now, if I stop buying things that I used to buy because their prices are higher, this data will show up as DEFLATIONARY in pricing.
The government when checking inflation numbers, is checking the PRICES of every single store in Canada; they’re monitoring if consumers are SPENDING more money month over month. Not to veer too far off course but this is why people who think that a Central Bank Digital Currency(CBDC) will fix things tend to forget that humans change their behavior based on what EDICTS of the people in charge.
In China as an example, their government has capital controls, and people living in China are FORCED to use the Renimbi, so what you get a lot of in China are Chinese citizens often in secret saving money in other fiat currencies, like U.S or Canadian dollars, Euros, etc.
When the government is trying to achieve an objective, it’s not a guarantee that things will go as planned, and a CBDC, which similar to the Chinese Renminbi revolves around control, will lead to unpredictable behavior by people.
GOVERNMENT Trying to Achieve the WEALTH EFFECT
The concept of trying to CONVINCE consumers that inflation is declining is the attempt to get consumers to start spending, meaning that the government doesn’t think the consumer is poorer, the government imagines that the consumer is merely saving money because it fears what the future holds.
This coincides with the Far Left imagining that their opposition is flush with cash and is being mean-spirited about their far-left agenda for the future. This is why no matter how bad the economy gets, you’ll always see Left Wingers on a mission to blame the rich for problems left-wing governments and lt wing voters voted for.
This, by the way, is the reason why Left Wing voters often become the victims of the policies they advocate. Late Stage Capitalism is a period in which some individuals believe capitalism is on its last legs and the Marxists should take over.
Late Stage Socialism is a period in which I believe Austerity Measures are inevitable. Even now, as you can see the government is incapable of correctly identifying the problem in the economy, because ofcourse, the government IS THE PROBLEM in the economy.
Justin Trudeau and The Far Left in Canada Declare War on Fossil Fuels and Ignore The Consequences – Let’s Talk Petrodollar
A lot of people think the petrodollar is a myth, although I do believe there was a concerted effort by the U.S. government to FORCE everyone to buy oil in U.S. FIAT dollars; the truth is the MARKET had already decided to use U.S. dollars, making the U.S. the worlds reserve currency LONG BEFORE Nixon closed the gold window.
Most countries in the WORLD want to have some sort of capital controls of their currency, the U.S. on the flipside took a different approach, allowing the U.S. dollar to have almost INDEPENDENT markets outside of the U.S.
One of the reasons that there was a DEMAND for Nixon to close the gold window was that it was too easy for countries globally to cash in their U.S. dollars for Gold, imagine countries already on a FIAT monetary system, selling their fiat dollars to buy U.S. dollars and then cashing out those U.S. dollars for Gold directly from the U.S. treasury?
This would obviously be a political problem, especially as the American government began spending more for things like wars. So, the U.S. ends the gold window and certain people in government want to make sure that FIAT money is tied to something, that something being Oil; why? Because without oil there is no economy, and without fossil fuel, none of us in the west enjoy the standard of living we enjoy today.
So when the Canadian Prime Minister and the Left Wingers in Canada think declaring war on fossil fuels and transitioning to wind, solar and lithium batteries will be easy, they completely ignore that the COST of doing things is 100% reliant on CHEAP fossil-fueled derived energy.
Ignorance is bliss, and these Green activists are within their right to be as ignorant as they want to be for as long as they want, but the reality is that costs will continue to go up until a viable CHEAP ALL GREEN alternative can 100% replace CHEAP fossil fuels and there’s nothing a central bank or government data can do about that.
With that said, while prices go up, what will happen is the STANDARD of living for Canadians will go down, so for this transition to happen, Canadians will have to make due with less, and maybe that’s a good thing, but it will DEFINITELY be a bad thing for tax collection and people who want cradle to grave welfare.
There is an ever-growing demand for GOVERNMENT WELFARE, and if retail sales are falling, it equates to FEWER taxes being collected, which sounds like job cuts that shrink the pool of private sector INCOME TAX payers.
As I like to point out Public Sector income taxpayers aren’t really paying income taxes, as the money they get is either via money the government BORROWED, or money they got from the PRIVATE SECTOR’s income or retail taxpayers, that finance their entire public sector job.
Luckily the Forex markets are mostly looking for stability, so at least as far as trade is concerned, HOPEFULLY, the Canadian dollar can maintain its INTERNATIONAL purchasing power.
In closing, these retail sale numbers appear to show a DEFLATING economy, and I’m not sure wealth effect news will be good enough to get Canadians to spend more.
Interesting times ahead!