Ouch. As a long-standing critic of the bank, I partly agree with Ms. Payne. But I’m also experiencing an odd sensation – sympathy for the alleged devil of this drama. Mr. Macklem is doing the right thing inpreviously engaged in an actual class war.
It started after the 2008 Great Financial Crisis. During that frenzied time, as asset markets collapsed, the bank cut interest rates to near-zero and turned real rates negative. It justified the action by saying, first, it had to prevent a collapse of the financial system and, second, it wanted to spur an economic recovery. The ultimate effect was that it made the rich richer and the poor poorer.
Just why central banks should feel the need to underwrite asset values is itself an interesting question. Nevertheless, the justification of preventing collapse did at least make sense in the context of the crisis. The justification of spurring recovering, on the other hand, always looked flimsy. Yes, the economy averted a depression. But the rebound was anemic and relied heavily on rising property values. In theory, cheap credit was meant to spur investment, which would jump-start the. But the models on which that theory was based were developed in the 1930s, a time when most investment was carried out by productive businesses.
But the central bank largely waved them off. It said that whatever inflation there was, it wasn’t yet affecting consumer prices, the only inflation which mattered to it. Now think about that. If you’re a young graduate entering a job market where real wages are moribund because productivity growth is so poor, but your rent is rising by double-digits each year, someone telling you that inflation doesn’t matter might seem at best insensitive, at worst hostile.
The SMUG look on the BofC governor says it all. Let’s Jack up unemployment, stress the folks mortgage payments and give ourselves at pat on the back coupled with a year end bonus.
Article has it exactly backwards. Interest rates were lowered because of low demand for debt. Working w Govt, they locked the economy, & created $300Bn govt debt, (bonds) + untold corporate & household debt. That caused inflation & justified hiking rates. All to enrich idle $$$
Dependents on government's largesse class Vs those who would do much better without paying for others.
So how should we think globeandmail lol
Remember when Polievre questioned the Bank’s motives and independence and everyone lost it? I do.
The “class” of people they’re targeting are Canadian independent small businesses. The people least likely to be corralled by the vacuum of big government.
This right here.
No publication in Canada advances class war on behalf of the 1% as fiercely as the G&M.
Money itself undergoes bankruptcy.
The BoC should have raised interest rates for the fun of it 😂 It's like the author has never heard of competing economies and how Canada needs to, well, compete. Let's see you tackle and explain away this *real* evil Dr. JARapley 👇 Graph source:
The BoC didn’t just drop the ball, they ignored the referee altogether. They did this in concert with a government that has been mismanaging the government purse for 7 years. Shame On our so called leaders, and those who were supposed to report on such negligence (like the Globe)
How about people stop buying useless things; the malls are packed and you can buy any number of useless items online. Stop spending and start saving for that house just like the boomers did
Audit the BoC...and not by insiders.
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