Imagine the outrage if the government announced a 3.4% tax hike on everything. Well, that’s the equivalent impact of how inflation is devaluing your money and reducing your buying power.
For some time, the Bank of Canada and the Liberal government have been claiming inflation was ‘low.’
They wanted to pretend that they could print a gargantuan amount of money and run massive deficits, all without the value of our money being degraded.
And yet, that fiction – like all fictions – could only be sustained for so long before reality intruded.
What is the reality?
A big surge in inflation.
Here’s what Stats Canada said about it – and note how they try to downplay it:
“The Consumer Price Index (CPI) rose 3.4% on a year-over-year basis in April, up from a 2.2% gain in March. A significant proportion of this increase was attributable to a steep decline in prices in April 2020, as the monthly CPI rose 0.5% in April 2021. On a seasonally adjusted monthly basis, the CPI rose 0.6% in April. Excluding energy, the CPI was up 1.6% year over year in April, following a 1.1% increase in March.
In April 2020, the headline CPI fell 0.2% year over year—the first CPI decline in over a decade. As a result of the broad decrease in prices in 2020, base-year effects continued to have an upward impact on consumer inflation, contributing to the strong acceleration in April 2021.”
Take a look at the wording and the spin:
Stats Canada says there was a “steep decline in prices in April 2020.”
What was that decline?
A 0.2% decline in prices is not ‘steep,’ and it would have been shocking if prices didn’t decline in the month following the initial 2020 lockdowns.
Yet, as Pierre Poilievre notes in the video below, Stats Canada’s own spin is erased by the fact that inflation rose 0.6% on a month to month adjusted basis from March of 2021 to April of 2021. As he notes, if that level of monthly inflation took place over a full 12 months, inflation would be up 7.2%:
“Don’t buy government spin on today’s inflation numbers.
The price hikes are not “transitory”, but lasting, real and accelerating.”
Poilievre is correct, and it’s shocking that he’s one of the few politicians openly willing to address the danger of the inflation tax.
While Stats Canada and the government try to downplay this surge in inflation, they can’t avoid the fact that this is the highest annual inflation rate increase since May of 2011.
As basic common-sense dictates, if you print a bunch of money without an equivalent increase in the number of goods, you simply end up with more money chasing the same number of goods. Inevitably, prices will rise.
Remember as well that much of Canada is still in lockdown, with economy activity strictly reduced. Inflation is still surging.
Also, as Poilievre notes in the video, the actual inflation rate is almost certainly much higher than what the government says.
To claim that shelter costs are only up just a bit over 3% is absurd, as the insane housing market makes clear.
Gas prices surge
On a year-over-year basis, gas prices are up 62.5%.
That’s the largest recorded increase in Canadian history.
Again, Stats Canada tried to downplay this:
“The price of gasoline rose 62.5% on a year-over-year basis in April, the largest year-over-year increase on record. The gain in gasoline prices was mainly driven by steep price declines in April 2020, when gasoline fell 15.2% month over month as a result of limited travel, temporary business closures, and lower levels of international trade, which created an oversupply of gasoline in the market.
In addition, the rise in gasoline prices was partially attributable to the maintenance of production cuts by OPEC+ countries (countries from the Organization of Petroleum Exporting Countries Plus), amid increased demand.”
They act as if we are stupid.
They act as if we can’t see that the gap between the massive 62.5% increase in gas prices compared to the 15.2% decline in gas prices in April of 2020 isn’t still a massive 47.3%.
We once again find ourselves in a situation of weak productivity growth, and rising inflation, with an economically illiterate Trudeau at the helm.
Unfortunately, while fiscal responsibility was still seen as a positive trait in the past, it has increasingly been abandoned across the political spectrum.
Even the Conservatives under Erin O’Toole have said they won’t balance the budget for another decade, meaning they are also counting on the central bank to enable rampant government debt and deficits.
And ‘enablers’ is indeed the right way to describe the Bank of Canada as of late, as they have abandoned their role as protectors of the integrity of Canada’s currency.
The Bank of Canada has become increasingly political, and is financing the immense deficits of ‘progressive’ governments, while also distorting the economy in a way that hurts those who are working to improve their situation.
In fact, the Bank of Canada itself was forced to admit this, as reported by the Financial Post:
“The Bank of Canada said on Thursday that some of the monetary policy tools it is using to address the COVID-19 pandemic, such as quantitative easing (QE), could widen wealth inequality and that it was looking closely at the issue.
Governor Tiff Macklem, speaking to university students in Atlantic Canada by videoconference, said that while the QE program stimulated demand and helped create jobs, it was also boosting wealth by inflating the value of assets.
“But of course, these assets aren’t distributed evenly across society. As a result, QE can widen wealth inequality,” he said. “We will look closely at the outcomes of QE here and elsewhere and will work to more fully understand its impact on both income and wealth inequality.””
Again, this is the most obvious thing in the world, so the fact that the Bank of Canada has to ‘look into it’ is absurd.
You print a whole bunch of money.
The supply of things like houses stays basically the same.
The price of houses goes up dramatically.
It’s almost like a law of physics at this point.
The fact is, the Bank of Canada isn’t ‘surprised.’
Rather, they are trying to prop up a completely distorted and unstable economy, an economy that is now dependent on debt and an inflated housing market, rather than real growth.
And rather than acknowledge that what Canada needs is a return to sound money, fiscal responsibility, spending cuts, and a removal of government restrictions on growth, they continue to double-down on the same failing system.
The inflation tax
If the government announced a tax hike of 3.4% on everything, let alone a 62.5% hike in gas prices, there would be mass outrage.
Around the world, we’ve seen protests and the destabilization of governments for far less.
But with inflation, it’s a hidden tax.
People feel it, but don’t quite see it.
As a result, the federal government and the Bank of Canada are seeking to avoid accountability for their dangerous policies, and instead punishing millions of Canadians by robbing us of our purchasing power and further distorting our economy.
And with so many Canadians sadly illiterate about how our economy and monetary system works, the government and central bank will get away with it, unless we work hard to educate and inform as many people as we possibly can about the Inflation Tax being imposed on our country.
Photo – YouTube
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