Throwing money at problems no longer works during Inflationary cycles: Why The Bank of Canada’s minuscule Interest Rate Hikes Will NOT stop inflation – March 4, 2022,
When Justin Trudeau called an early election, I assumed natural laws would be on his side, allowing him to lose during a period in which Joe Biden replaced Donald Trump. Donald Trump’s America made Justin Trudeau’s bad ideas look very good. Luckily for Justin Trudeau, Donald Trump didn’t believe in this climate change scam, Donald Trump’s economic policies revolved around cutting rules, regulations, and investing in American workers as opposed to Joe Biden who believes in more rules, regulations, any and all vote-buying schemes Biden’s administration can think of
Fewer rules and regulations on the economy, allow productive people to be more productive, more rules and regulations, make the cost of being productive way more expensive. Justin Trudeau’s weakness has always been economics, he’s clueless, and Canada’s finance minister Chrystia Freeland is just as clueless as Trudeau and this is why Justin Trudeau continues to imagine that throwing money at problems solves them.
Unfortunately for Justin Trudeau, he’s about to get a rude awakening, although there is already a constant effort by the mainstream media, to blame the Russian-Ukraine war on inflation, the truth is, that the root cause of this inflation are the regulatory policies and the longer these stupid regulations remain enforced the worse things will get and the more difficult it will be to fix the problem.
What I see happening in the not so distant future is a wave of bankruptcies and a lot of economic deflation, making matters worse is that raising interest rates during an inflationary cycle is going to lead to all sorts of economic chaos and I don’t know if the Bank of Canada can stomach it, because the easy answer will be to either do nothing or lower interest rates even going negative to stop the Canadian market from crashing(lol).
I like to remind readers that central banks as constructed now, do not PRINT money. typically retail banks, financial institutions as well as governments are responsible for most of the money in circulation and most of this money exists only because of the ability of these entities to borrow money. What this means ultimately is that the economy is DEFLATING not inflating.
Economic deflation is often hidden by inflating the money supply somehow, and why there are periods in which inflation doesn’t appear to be running rampant, has to do with regulatory policies. Both Joe Biden and Justin Trudeau waged a war on domestic fossil fuel production, Justin Trudeau having more powers over the people he governs than Joe Biden, has also weaponized covid-19, and added more regulations to the Canadian economy.
Now, when lawmakers regulate the economy, because they themselves don’t have to be productive under the laws they create, it’s easy for them to imagine that there’s a quick fix. Nothing could be further from the truth. Higher costs of living can’t be stopped by throwing money at the problem, in fact throwing money at a problem created by regulations will accelerate the problem, because you have to remember that when Trudeau throws money at economic problems, he’s actually borrowing the money and hoping that the private sector will be able to bring him back a return on investment, but what he forgets is that regulations equate to higher costs which means, more money during an inflationary cycle will purchase fewer goods and services.
I believe Trudeau claimed he will spend 4 Billion dollars over the next 4 years to help small businesses? Well, this borrowed money is more expensive for all partys involved when inflation is running rampant. Debt servicing is harder when the costs and prices of everything around you are going up. If you ask me now is the time to avoid getting into debt, because at least domestically the Canadian dollar might have less purchasing power.
Interesting times ahead!