Financial Post- Bank of Canada hikes interest rate by 0.5% for first time in 22 years
Policy-makers said the war in Ukraine blew up their January forecasts. The conflict ignited new surges in prices for oil, natural gas and other commodities, while Western sanctions have disrupted supply chains, putting additional upward pressure on costs.
Armstrong Economics- Stop Blaming Putin For Inflation
The numbers do not lie. Inflation was on the rise well before Putin engaged with Ukraine. Government and central bank mismanagement have caused the current situation.
Ah, yes. The always accurate policy-makers said so. Who could doubt them?
Another day in Trudeauland…
Don’t ya just enjoy the constant shafting of it citizens?
So, I guess that I voted for this too?
Oh, secretly…
I get it now.
The budget will balance itself as we grow the economy from the heart out. I’m contemplating living out my retirement in poverty at the same time my kids and grandkids are contemplating nuclear war. In my 68 years I have never seen the world in such a God awful mess. Thank you politicians.
Arty…I’ll be right beside ya…creepin up on 70.
The last 7 Years with that Narcissistic Perverted Pedophilic POS in the PMO…+ Butts, Telford & their token Ukronazi klunt… It’s been beyond a bit much.
Seems to me and especially from the COMPLETE & seemingly wilfull SILENCE of the entire Canadian Body politic over the past 2 years…?? that we truly have only 1 POLITICAL PARTY IN this Country
The WEF.
As far as Interest rates go…thats what happens when you PRINT a FEW Trillion and piss it away on SFA. WEIMAR republic Redux…believe it.
I can’t think of a single world leader right now who has their head screwed on straight or their peoples best interests at heart. They’re all virtue signalling about meaningless problems or just plain nuts, or both.
That’s why I keep saying we should not support the legacy parties that got us in this mess.
My last bit of support for the notion of “Canada” is to support Max and the PPC. I really hope to see a massive uptick in support for them, otherwise I’m going to conclude there is no hope for “Canada”.
Western separation will be the only choice at that point.
Freedom 95!
Anyone who believes Putin is the origin of this SHIT economy are willfully ignorant. Printing funny money has devalued the entire West
Correction- Printing funny money and uncontrolled numbers of immigrants requiring a multitude of free services has devalued the entire West that does not even reference the enormous wastage related to covid and economic shutdowns enacted by our hysterical “politicians”
Re-correction. Inflation is always, everywhere and ONLY a monetary phenomenon. External shocks are only excuses for bad policy. If the M2 money supply tracks with output, stable prices result. Period, full stop, end of story. Prices for some things may go up, but others will come down in lockstep, it truly is a zero sum game.
Everything else is uninformed noise, or informed prevariacation.
Continue to live in your theoretical world Peter, the If in your comment voids your conclusion.
Money supply in canaduh and much of the western world has NOT tracked output, in fact much of canaduh GDP is created by house flipping and related poorly secured mortgages. Money has been created from thin air and pissed away on highly dubious schemes that have been wholly destructive to the economy.
The bank of canaduh is obviously a wholly owned subsidiary of the libranos , otherwise it would not have been buying up all the government bonds that have been rejected by private investors.
You are missing the point, the IF implies that it didn’t, thus inflation. IF it did, inflation is impossible, just sayin. Inflation is a result of bad monetary policy. That is true.
Rising consumer prices today are primarily the result of supply chain disruptions, the imposition of useless Green energy mandates and Covid whiplash. These problems will not be resolved by having central banks simply raise interest rates. Should they insist on that course of action, consumer prices will rise even faster as firms producing these goods go bankrupt.
It’s not the increase in the quantity of money that is the problem, but rather the vast increase in the supply of counterfeit credit to parties, such as governments, which have neither the intent nor the means to repay what they borrowed. This supply of counterfeit credit is facilitated by a descent to zero interest which has been going on for forty years. This destructive process will not stop until we get rid of fiat currency and begin using gold as money once again. Only then can the rate of interest be stabilized and the economy can grow.
Gold is a thing. Money is a thing. It’s only worth what we say it is worth. So why not a “diamond standard”? How about a “malachite standard”? Regardless of “the thing” … it’s only worth what we believe it’s worth. If gold is a limited resource, then how much will an ounce become worth? $150k/ounce? Will we pay for things in gold leaf? Tiny bits of gold leaf? Money is a concept. The value of gold (as money) is a concept. It’s nonsense to believe gold is necessary to end all our monetary problems.
Dennis, this “counterfeit credit” as you call it accurately has the sole effect of increasing the money supply. Supply chain disruptions, green energy BS and Covid whiplash, do not, and cannot increase prices in aggregate, they can only reallocate them. Increasing M2 faster than output is the only thing that can cause inflation. Bad monetary policy is what coward and weak politicians always engage in to delay bad economic things, which only makes them worse later. It is now later.
Dead right.
You are correct Peter it has always been this way. I used to track the money supply and inflation many years ago but stopped when I realized that the fools in government had no idea what the hell they were doing.
The stupid pricks were saying a year ago that inflation was transitory and everyone at SDA called bullshit.
How do the ignorant gain such power? Tim Macklem is a sorry sack of shit.
Inflation is transitory. Why, in a few years it might be back down to 2%.
We’ll be lucky if it’s 12%
You don’t think for a second just because they said it, they believe it????
The interest rate has been artificially low for more than a decade as a consequence of the insanity called quantitative easing. This has been a long, long time coming. Putin, Biden and Trudeau are simply the worthless fools who happened to be in charge when things fell apart.
Biden, Trudeau and Putin are not going to be affected by it.
In that first paragraph, the reasons enumerated for inflation are not going to be stopped by raising interest rates. Inflation has been created by two years of bad government policy and actions
Please see above. inflation was caused by creating money, that is all, that is it. Qualitative easing creates money.
I agree and that is all it can ever be. Sometimes excess credit can drive inflation for brief period but the the debt has to be paid. Inflation is always too much money chasing too few goods.
This is just the start of several interest rate hikes.
I guess I’m not retiring anytime soon.
I may have to come out of retirement.
“Inflation is always and everywhere a monetary phenomenon.” -Milton Friedman. Look in the mirror, “Policy-makers”.
They raise interest rates AND still print money. Morons.
“western sanctions” have disrupted supply chains. Do they mean sanctions on Alberta or are they not being honest?
Alberta, Russia, po-tay-to, po-tah-to, close enough for jazz, horseshoes, and nuclear war.
Not only do you have to raise interest rate to control inflation, but you also have to get governments (federal, provincial, and municipal) to control deficit spending. Good luck with that with the current leaders in power.
There are about 75 billionaires in Canada as per wikipedia. By 2030 I predict there will be 10,000, and anyone who owns a house will be a multi-millionaire.
Yeah querty, but by then a loaf of bread will cost $99+
I would suggest shares in wheelbarrow manufacturing might be a good investment! Of course, then they’ll force a switch to digital currency, so that we won’t need the wheelbarrows, just lots more ones and zeros!
The reality of course is that yes, we are totally screwed!
Interest rates have been absurdly low worldwide because of what Ben Bernanke called the “global savings glut.” China made vast profits from offshoring, which it then used to buy western government bonds, one way it bought influence over western governments.
Why is inflation now so high worldwide? Simple. That was always going to happen when the world ran out of cheap Chinese labour.
No, it happens when the money supply grows faster than output.
The central banks have two ways to go while pretending to be able to control the situation. They can keep rates down and let inflation run hot to eliminate debt through inflation which could turn into hyper-inflation or they can start cranking up interest rates and eventually cause a recession (large number of zombie corporations dependent on ZIRP or NIRP) which is inevitable anyway. The Spawn-Fuhrer, being one who does not or can not think of such things will likely get caught up in whichever way it goes within a couple of years.
There is no way for central banks to “control” the situation. Any attempt to centrally plan the money supply of an economy has no greater chance of success than attempts to centrally plan the production of shoes or cars.
that plus pretty boy’s new tax on pickup trucks and SUV’s should finally kill the economy, the sad part is die hard liberal voters will continue their own destruction
People have to believe that Putin caused inflation as they must believe that the unvaccinated lepers caused the multi-jabbed to repeated become ill.
Comforting lies.
Wow a .5% increase.
Remember 1980, one jump was a full 2%. That’s right 2 full percentage points.
Stand by. We’ll get there. But don’t forget, this 0.5% doubled the bank rate, and context matters.
It’s not a half percent increase. If the interest rate rose from 0.5 percent to 1 percent it went up 100 percent. When the interest rate went from 10 percent to 12 percent it was a 20 percent increase, so this increase is 5 times bigger than that increase was,
It’s no skin off my back. I don’t owe anyone anything.
Exactly. Most people do not understand the magnitude of the jump in interest rates when your starting point is this close to zero.
On the way down to zero arbitrage sees to it that profit margins are cut right along with interest rates. That process cannot seamlessly reverse itself.
Back in the 80’s, under Jussie Castro’s step-father interest rates were up to 20-21%. A number BlackFace is likely hoping to achieve.
US interest rates for mortgages are 4.99%. The issue is that people aren’t renewing right now. Wait a few years until these mortgages come up for renewal. 5% doesn’t sound bad to us old geezers but imagine signing at your maximum budget at 2.5% and renewing a few years later at twice the rate – or having a variable rate mortgage.
I’m old enough to remember the high interest rates of the 1980’s..
The current interest rates of the last decade or so, were lower than those of the past hundred years..
The idea with low interest rates would be to get into something bigger than you normally could, but to get out from under it as fast as possible. Get the bigger loan for the house you want, assuming you have a decent job to pay for it and then PAY FOR IT! Pay bi-weekly, lump sum and principal only payments to the limit of what you are allowed, etc. Get that loan payed off and move up again. Or, buy some good investment(s)/properties and get that ball rolling, with an eye of paying them off as quickly as possible as well. Get the most equity to debt ratio possible to protect yourself.
Instead, we saw people just gaining more and more debt, buying all the toys, instead of paying off the debt they already had, knowing that the low rates could not last forever!
Reminds me of the old bumper stickers: “Please let there be another oil boom, I promise not to piss it all away, this time!”
The other competing theory would be that we don’t really own anything, we are just the curators of the things we possess, for as long as we posses them, so to hell with legacy, damn the torpedos, full speed ahead and go for broke! Then realizing that the government can think and act in the same way!
In the end, it was probably best to have just been a Spartan. Possess little more than your sandals, sword, shield, and helmet and leave your legacy on the battlefield..