Excess demand or Price Controls What’s fueling Consumer Price Inflation: Bank of Canada holds key interest rate steady at 5% – December 6, 2023
This post wasn’t made to make the claim that excess demand doesn’t exist; however, profit-driven private banks are INCENTIVIZED not to spend money they don’t have. Banks make most of their money via fees and loans; in many respects, private banks are responsible for DEFLATION in the economy because if they don’t lend money to a person or entity the government WILL lend to, well then by default, the private banking sector is putting RESTRAINTS on spending.
Tiff Macklem Vs. Justin Trudeau
So, when I hear central bankers talking about EXCESS DEMAND, they must be referring to GOVERNMENT SPENDING. Because, especially with the modern forex markets, central bankers don’t have as much control over the VALUE of the money supply as they’d like you to imagine.
In economics, a shortage or excess demand is a situation in which the demand for a product or service exceeds its supply in a market. It is the opposite of an excess supply.
DOMESTICALLY, Justin Trudeau’s SPENDING, which also includes REGULATIONS on the private sector, which is DEFLATIONARY, contributes to this fake “DEMAND.” Money/resources, employment, and capital have been flowing TOWARDS the Canadian Federal government, and the money being redistributed by the Federal government is not RETURNING excess capital to the Federal Government.
Instead, prices are rising, and tax collection is DWINDLING, which leads to more dependence on the Bank of Canada to lend money to what otherwise would be a BANKRUPT Federal government.
If we were on a Gold Standard, this would be basic math, but because we’re on a fiat monetary system, which also includes a foreign exchange market in which the globe can value currencies, the Federal Government comes up as a beneficiary as it relates to how the world values the Canadian dollar.
Now, for some people, they say to themselves, well, doesn’t that mean we’ve struck it rich? Shouldn’t the government buy as many things as it can, while the Canadian dollar is popular globally?
What is FISCAL policy?
In economics and political science, fiscal policy is the use of government revenue collection and expenditure to influence a country’s economy.
That’s how a BUSINESS minded person would think; a business-minded person would accumulate cash-producing ASSETS while the value of their property is at an all-time high, but politicians see the world differently; politicians, namely Western politicians, do the OPPOSITE of what the Chinese Communist party, for example, is doing.
Below is the Trudeau popularity tracker by Angus Reid; if the data does not show up below, you can click the link provided or search for “Trudeau popularity in Google”.
The Canadian government has declared WAR on fossil fuels, which in modern times generates positive cash flow, the government has declared war on genders, war on ideologies it doesn’t like, war on information in general. The Canadian government even declared war on Gold, selling off its Gold reserves, and it’s for this reason that the government attempts to REDEFINE an asset, and in this attempt, you get people, including central bankers, REDEFINING what they’re actually doing.
Tiff Macklem is not a stupid man; he’s not going to openly call Justin Trudeau’s economy a disaster, but when he’s talking about excess demand, if you have any basic concept of the modern monetary system, you’d know excess demand, is in my view a call for SHRINKING the size of the government or at the very least telling the Federal Government to change it’s FISCAL policies.
Price controls are things like minimum wages, and rent controls, supply management, these price controls equate to PRICES in certain industries LEGALLY not being allowed to decline beyond a certain PRICE.
Example if minimum wages are $15 an hour, it’s ILLEGAL to pay any wage earner less than $15 per hour, meaning that prices or any price related to that wage price can not decline lower than the wage-price otherwise that PRIVATE business that doesn’t have unlimited access to capital will be forced to go bankrupt.
Now, on the flipside to that minimum wage are PUBLIC SECTOR employees who do not have a profit or INCENTIVE motive to be innovative or economical, these PUBLIC SERVANTS are often not only very expensive to hire and manage, but they’re also very expensive to FIRE, so Trudeau has hired I think it’s 100,000 Public servants since taking power in 2015 and these newly hired employees contribute to the EXCESS DEMAND, as Trudeau has imagined a Canadian economy that will require more public servants because he anticipated a much larger Canadian economy.
But economic and financial numbers are showing the opposite, meaning that the economy is shrinking. Still, CONSUMER PRICES are going up to pay for all of these new government workers and government regulations. Without saying it directly, Tiff Macklem insinuates to Justin Trudeau that there’s excess demand and therefore he may be forced to raise rates until fiscal policies are fixed.
Interesting times ahead!