They need people to be unable to link the surging cost-of-living to excessive government spending and money printing.
Canada’s political class is circling the wagons when it comes to inflation.
Speaking on the fiscal update, former Bank of Canada Governor Stephen Poloz – after praising policies he said prevented another ‘Great Depression’ and saying nobody could be blamed for inflation politically – talked about inflation being linked to ‘temporary’ circumstances, and mused about hiking the sales tax:
“Poloz mentioned that he, along with other Canadians, will be looking to see where the deficit in the debt plan fits in, if there will be new taxes that could hamper economic growth and what will happen to internal trade barriers between provinces. He added that one temporary increase he would look to that would not slow growth, but rather support the Canadian economy, is an increase in sales tax.”
Further, “Poloz said that inflation is often a slow-moving process over several years, but the sharp rise in costs is an indicator that it is likely coming from “temporary factors.””
Give that some thought for a moment.
After a period in which the Bank of Canada increased the money supply by a staggering amount, and with Canadians being slammed by higher prices resulting from their money losing purchasing power, Poloz talks about raising the sales tax.
That would make everything even more expensive, adding to the cost-of-living crisis.
Canadians would be losing purchasing power on both ends, with their money being robbed of value, and the price of products being artificially inflated through higher taxes.
And for Poloz to use the term ‘temporary,’ similar to the ‘transitory’ messaging that had been used up until the Bank of Canada realized it wasn’t going away anytime soon, certainly seems mistaken.
Amazingly, despite all of that, Poloz is still more connected to reality than Chrystia Freeland and Justin Trudeau. At least Poloz showed a modicum of interest in the deficit, compared to Freeland and Trudeau who continue to increase government spending at a rapid pace.
Politicizing the Bank of Canada
A recent development in regards to the Bank of Canada’s mandate should be of deep concern to Canadians who are watching their cost-of-living surge.
In their joint statement upon the federal government renewing the Bank of Canada’s five-year-mandate, Chrystia Freeland and Tiff Macklem pushed a new emphasis on ‘maximum employment’ and ‘flexibility’ in relation to the inflation target:
The Government and the Bank further note that:
Given that there is uncertainty about the maximum level of employment that is consistent with price stability, the Bank will continue to use the flexibility of the 1 to 3 percent control range to actively seek the maximum sustainable level of employment when conditions warrant.
The Bank will consider a broad range of labour market indicators and will systematically report to Canadians on how labour market outcomes have factored into its monetary policy decisions.
The Bank will also continue to leverage the flexibility of the 1 to 3 percent range to help address the challenges of structurally low interest rates by using a broad set of tools, including sometimes holding its policy interest rate at a low level for longer than usual.
The Bank will utilize the flexibility of the 1 to 3 percent range only to an extent that is consistent with keeping medium-term inflation expectations well anchored at 2 percent.
The Bank will explain when it is using the flexibility in the framework.
There was also this:
“Additionally, while monetary policy cannot directly tackle the threats posed by climate change, the Bank will develop the modelling tools needed to take into account the important implications of climate change on the Canadian economy and financial system.”
This is concerning for a few reasons.
First, it represents the further politicization of the Bank of Canada.
Second, it demonstrates a drift towards accepting higher long-term inflation.
Third, it seeks to use the Bank of Canada as a tool to generate ‘maximum employment,’ which generally means flooding the economy with money and keeping interest rates low to enable massive government deficits and long-term overspending.
Higher inflation continues
All of this is happening as higher levels of inflation continue to slam the pocketbooks of Canadians:
“Canadian consumer price inflation held at the highest level in nearly two decades in November, maintaining pressure on the Bank of Canada to quickly start raising interest rates.
Annual inflation was 4.7 per cent last month, Statistics Canada reported Wednesday in Ottawa. Inflation has only reached this level twice over the past three decades — the last time in 2003 — and has never gone higher.
Using two decimal points, the inflation rate is 4.72 per cent, which is the highest since 1991 — when the Bank of Canada adopted an explicit inflation fighting mandate.”
Isn’t it an interesting ‘coincidence’ that Freeland is pushing for more ‘flexibility’ on inflation just as it hits these high levels?
Unsurprisingly, inflation of fixed assets is surging, with average home prices hitting record levels:
“Canada’s hot housing market became even more heated in November as the average price hit an all-time high at $720,850, according to data from The Canadian Real Estate Association (CREA) released Wednesday.
This seasonally unadjusted figure beat out the previous record of $716,828 set in March, as the disconnect between housing supply and demand continues to push prices higher, said Cliff Stevenson, chair of CREA, in a release. “Even at what is traditionally the slow time of year for housing, conditions and price trends are at the same record levels we saw this spring. Things may calm down a bit through the balance of December and January, but next year’s spring market will no doubt be an interesting one.””
A “disconnect between housing supply and demand.”
What could cause the prices of fixed assets to increase so dramatically in such a short time?
Surely a massive surge in money printing has absolutely nothing to do with it…
— Pierre Poilievre (@PierrePoilievre) December 15, 2021
As @AlphaFortuna10 noted on Twitter, the reality is that houses aren’t really increasing in value, rather our money is being stripped of value:
“Because the value did not increase, only the price did, in a currency that is being inflated/debased. Note the difference.”
Because the value did not increase, only the price did, in a currency that is being inflated/debased. Note the difference.
— Frankie (@alphafortuna10) December 15, 2021
Depending on ignorance
This where we can clearly see that the political class, whether it’s the Liberal government or the Bank of Canada, are completely dependent on fostering ignorance among the public.
Just look at doesn’t get mentioned when inflation is discussed.
Nearly anything and everything is blamed, except for the massive increase in the money supply.
The one thing that most directly causes inflation is avoided.
This isn’t just an oversight.
It’s because those in power know that if the public woke up to the true damage caused by overspending and rampant money printing, there would be a demand for a return to limited government and sound money.
That’s the last thing that those obsessed with control and expanding the power of the state want to see happen, so they try to keep everyone ignorant about what is truly taking place.
Photo – YouTube