Tiff Macklem vs. Justin Trudeau – Why Lower Interest Rates Won’t Stop Consumer Price Inflation, and why Higher Rates Destroys Trudeau’s reckless spending and regulations – July 23, 2022,
I was presented with a question today, and I answer the question with this post. I was asked why Tiff Macklem should keep raising interest rates with PRIVATE debt levels where they are? I answered because Tiff Macklem did everything Justin Trudeau asked him to do during the pandemic, and now that the pandemic is over, there are SHORTAGES all over the Canadian economy.
But that doesn’t answer my question, the person said. Al the debts the Bank of Canada bought from Trudeau are supposed to yield some sort of PROFIT for the Canadian economy. Although I 100% disagree with the government taking care of the roads, Canadians send the government money to fix the roads and maintain INFRASTRUCTURE because it makes the private sector more PROFITABLE.
Yes, taxation is THEFT, but some people imagine that the government should monopolize particular industries to make life more PLEASANT for everyone. Sure I disagree with this dumb idea, but Canada has democratic elements, and people who think the way I think are currently UNPOPULAR, why because, as an example, CONSUMER price inflation had been tamed for YEARS!
Sure, in my world, asset price inflation is far more demonic than consumer price inflation, but the ZERO PERCENT INTEREST POLICY(ZIRP) has been employed in Canada for more than a decade. The Canadian housing market didn’t crash 2007-2008, but our central bankers lowered interest rates anyway. Now, to be fair to Tiff Macklem, to the best of my knowledge, he had NOTHING to do with ZIRP; Tiff Macklem inherited ZIRP. I don’t care who hired him. In my opinion, Stephen Poloz was the WORST bank of Canada governor in Canadian history.
I can’t stand the Liberal Party of Canada, but it doesn’t mean I won’t be fair to them. I rarely, if EVER, mention Mark Carney. Now, I don’t know what Mark Carney is doing in England but when he was the Bank of Canada governor I had nothing negative to say about him. The problem in the Canadian housing market became extremely problematic when Stephen Poloz became the Bank of Canada governor, meaning that both Tiff Macklem and the clueless Justin Trudeau, if they decide to blame Stephen Poloz, you will see me write a post defending them on that particular issue.
Now I 100% disagree with Justin Trudeau’s tyrannical response to the pandemic. However, it was considered a pandemic so I can understand why Tiff Macklem would buy up Trudeau’s debt with the ASSUMPTION Trudeau knew what he was doing when he was taxing and regulating. If the Bank of Canada’s mandate is to keep inflation at 2% will, then I defend Tiff Macklem’s right to raise rates until interest rates are back to 2%.
If Justin Trudeau’s war on fossil fuels has consumer price inflation running well above 2%? That’s not Tiff Macklem’s problem. If Tiff Macklem wants to get OPENLY political all of sudden, ofcourse I’m going to write about it, but to date, he’s responded to inflation the way he’s supposed to by aggressively raising rates.
What’s that, you say, the Central Banks are always behind the curve? I reply I’ll gladly abolish the Bank of Canada, write about the petition, and I’ll sign it. But in the meantime, in the real world I’m forced to exist in, central bankers HAVE to be behind the curve. Otherwise, they’ll feel the wrath of the mainstream media and Left-wing idiots who imagine money grows on trees or, better yet, comes from a photocopier.
I’d also like to remind the reader that I’m well aware that Central Banks don’t PRINT money. Tiff Macklem didn’t print money he put Trudeau’s debts on their balance sheet and Justin Trudeau printed the money. When Tiff Macklem put the debts on his balance sheet, I have to assume the expectation was that he’d be paid back; after all, a year ago, the economy was BOOMING, right? So what happened?
What’s with the slowdown? What’s with the consumer price inflation, and why should Tiff Macklem the banker care? The central banks are supposed to mirror the PRIVATE banks; that’s what all of us signed up for, so if I had a bad idea, let’s call it “RichInWriters Enterprises,” and at my business, we sell climate change and social justice, and for some strange abnormal reason, my business costs keep going up and my sales keep going down? Should a Private bank keep lending me money at rock bottom interest rates?
When you figure out the answer to that question, you then have to start talking about all the money Justin Trudeau borrowed but hasn’t spent yet? Loans are supposed to be reserved for people who can multiply the money they borrowed because there’s INTEREST when you borrow money, the fun part is spending it, but once you spend the money, debt servicing will start to eat away at the money you haven’t spent yet.
Making matters worse are the EXISTING servicing costs that will be eaten up by sales(taxes for the federal government). If I have debt and my debt servicing costs are being eaten by my sales/taxes, now I have to use the money I haven’t spent yet to service the loan debt. Now imagine if interest rates start to rise. What does that mean for RichInWriters Enterprises? It means I will have to CUT EXPENSES, CUT COSTS, change course, and abandon the dumb climate change and social justice idea I had.
But you see, the problem gets even worse from there, because oh gosh!? I’m a drama teacher, and I have ZERO business experience, so this is where things get really interesting. Anyway, this isn’t Tiff Macklem’s problem, this is Justin Trudeau’s problem. In this post, I want the reader to comprehend that I fully understand Pierre Poilievre’s argument, but this article is about Tiff Macklem and Justin Trudeau, or as some might call them, based on Trudeau’s new haircut, dumb and dumber.
Sure, Tiff Macklem should have NEVER bought all of Trudeau’s debt, but Keynesian economics is nothing new in Canada. The point of Keynesian economics was for periods like a pandemic to allow banks special powers to manipulate the money supply. But HYPERINFLATION of the currency is a sign of INCOMPETENCE, and oddly enough, could get Tiff Macklem FIRED, which by the way, likely explains the bonuses government people gave themselves because if they don’t see the writing on the wall right now, they’re going to comprehend it later.
The Bond market believes bankruptcies are abolished, but I don’t know, I have ZERO ideas of what’s going to happen moving forward; it’s the central bankers vs the idiot politicians? What’s happening in Canada is also happening in the United States, and already the Left Wing politicians who know that their Big spending days might be numbered are already going on the attack.
If you’re clueless as to why Tyranny has been growing WORLDWIDE, it’s because of ZIRP, which is basically the reward of bad ideas. Bad ideas have been spreading worldwide now for almost 20 years; in the past, market rates would BANKRUPT a bad idea, not anymore, in the modern era, all sorts of bad ideas ave been rewarded.
Corporate climate change should have been bankrupt years ago; it went bust several times already; why it’s still alive and kicking is because of ZIRP. I like Elon Musk and all but is Tesla Inc really worth what it’s selling for today? Can we have an honest discussion about Tesla Inc, please? Twitter, Twitter as an INVESTMENT, I’d argue Twitter is trash, but for some strange reason, the former president of the United States who LOVED ZIRP couldn’t get of Twitter?
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Do you not see what’s happening to us because of ZIRP? I see it, but hey, ignorance is bliss. In closing in case you’re not understanding my argument, the reason why I support Tiff Macklem raising interest rates is to stop Justin Trudeau and idiots like him from spreading their tyrannical agenda. If I’m Tiff Macklem, I’m forcing Justin Trudeau’s hand.
In Venezuela, a lot of people don’t know the BACKSTORY of their hyperinflation. People forget that Hugo Chávez changed the Venezuelan banking system. Canada is oil-rich, and Venezuela is oil rich.
Chavez threatens to nationalize Venezuelan banks | reuters.com
Venezuelan President Hugo Chavez said on Sunday he could nationalize private banks unless they comply with the law, adding he had “no problem with that because the banks don’t want to extend credit to the poor.”
When rates rise, what do Private Banks do? Tighten lending, right? Private Debt to GDP in Canada is at ridiculous levels, meaning that a large chunk of Canadians can’t spend without ever-expanding debt? But consumer price inflation equates to it costing more to buy less? How Venezuela dealt with this problem was they took the responsibility of money printing/money distribution AWAY from the private banks, which is what Nationalizing private banks is all about.
Let’s imagine you agree with Justin Trudeau’s Emergencies Act declaration; why the need to confiscate bank accounts without a court order? Now, Trudeau doesn’t have to operate in the VULGAR manner of Hugo Chavez but he could effectively do the exact same thing, using Tiff Macklem, but then Tiff Macklem would have to take the blame, for inflation.
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Do you see the dynamic unfolding already? because if you don’t, that’s why for me, I can’t make a call on what’s going to happen because going forward, in my opinion, it’s Tiff Macklem vs. Justin Trudeau. Tiff Macklem can stick to his mandate and force Trudeau to do something stupid, but I’m not in Tiff Macklem’s head, and his decisions will be based on what’s best for him and his PERSONAL career.
Interesting times ahead