4 Responses to “May 30, 2022”

1. ratchetrick says:

   May 31, 2022 at 9:21 am

   “For one, most countries are dealing with sizzling price growth. Many economists — as well as Macklem — blame Canada’s surging inflation on global supply chain bottlenecks and, more recently, the consequences of Russia’s war on Ukraine.”

   If this quote, widely published recently, has any merit . . . and it’s pretty clear that it does . . . then how does super hiking borrowing rates in Canada have any effect on these two “causes of inflation”? They won’t. Pure & simple . . . they will only exacerbate the inflation situation here by causing sharp price hikes as local producers struggle to offset increasing financing costs.

   If only someone would recognize the folly of the Bank of Canada, and maybe even do something about it.

   Wait . . . Pierre Poilievre, who I have no particular bias for or against, said this, “I will fire the governor of the central bank to get inflation under control.” At least someone out there “gets it”, although it’s starting to look like the damage has been done. All of that said, is having the bank rate moving from .25% to 3% a bad thing? Probably not; in the overall scheme of things, a 3% bank rate is still on the low side of economic reality. If someone can’t afford the resulting 5 or 6% mortgage, based on the current down payment requirements, they shouldn’t be looking to purchase real estate in the first place imo. Somewhere along the way, “homeownership” started to be perceived as a “right”, as opposed to a “privelege”. Not sure how that fantasy was created.

   So, Tiff . . . do it already . . . but stop pretending that this is the magic cure for inflation. It is not. Inflation will subside once the “supply chain” situation subsides, and once Russian oil gets back on the open market (if that will ever happen!) . . . and then the central banks can take full credit for solving the issue they had no control over in the first place!

2. baffled says:

   May 31, 2022 at 9:38 am

   ratchetrick , you comment ..”. then how does super hiking borrowing rates in Canada have any effect on these two “causes of inflation”? ” , the cent. banks are trying to destroy demand , with their rate hikes . thinking less demand prices will drop . with the rate hikes and the price of energy raising the price of everything , demand will drop because people will have no money for anything except food , power ,heat . a deep recession is coming

3. ratchetrick says:

   May 31, 2022 at 10:38 am

   baffled . . . you are absolutely bang on . . . 100%

4. June 1, 2022 « PrefBlog says:

   June 1, 2022 at 8:31 pm

   […] think they just cribbed that from a recent comment by Assiduous Reader […]