The government claims to be concerned about inflation, while implementing policies that make inflation worse.
The inflation rate rose to 4.4% in April, defying expectations of a decline.
Inflation was 4.3% in March, and most economists had expected the inflation rate to fall to 4.1%.
Instead, it rose.
Additionally, the three-month moving average of the ‘trim & median core’ inflation rates rose.
Pouring money into the economy to solve a problem largely caused by pouring money into the economy?
A portion of Canada’s inflation rate is due to global supply-chain issues. However, a significant portion of inflation in Canada has been caused by rampant money creation by the Bank of Canada, something that was spurred on by excessive federal government spending.
As a percentage of our total economy, can had some of the largest budget deficits among developed countries, and federal spending has continued to increase.
In effect, the government claims they are ‘solving’ inflation by doing the exact thing that pushed up inflation: Pouring borrowed money into the economy.
As I’ve noted in other articles, the Liberals seem to believe that consumption precedes production, despite reality being the opposite.
They don’t seem to care that if you ‘give’ people more money to buy things (money that was first taken from us through taxes) without an increase in the number of things available to buy, people will be worse off since prices will go up and life will become less affordable.
Canada’s environmental policies and the anti-business attitude of the Liberal-NDP neo-communists, along with their willingness to borrow and spend seemingly unlimited sums of money, can only ever result in weak production and high prices.
And that’s exactly what has happened.
Something essential to know about inflation
Something many people fail to understand about inflation is that when we are told inflation is ‘going down,’ it doesn’t mean prices are actually declining. It just means they aren’t increasing as quickly.
But since every increase in inflation is an increase in a price that was impacted by the previous month of inflation, it has a cumulative effect.
The months of 8% inflation are now built into the prices of everything in the economy, so a ‘smaller’ inflation rate can still mean a larger raw price increase.
And since wages haven’t kept up with inflation most months, it means people have been falling further and further behind.
This latest inflation increase is yet another sign of the disastrous impact of Liberal-NDP economic policies, and the immense error the Bank of Canada made by enabling those policies.
Spencer Fernando
