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Author Topic: Inflation News
DrConway
rabble-rouser
Babbler # 490

posted 26 March 2003 12:56 AM      Profile for DrConway     Send New Private Message      Edit/Delete Post  Reply With Quote 
StatsCan's Latest Data shows that the year-to-year increase from Feb 2002 to Feb 2003 is the highest it's been since... sheesh, I dunno. But it's 4.6% which is just amazing by recent historical standards.

I can remember in the 1990s prices barely budged for anything, except books, which did a slow climb upward. It's only gotten worse now as books which used to cost $6.99 a couple years back now run for $8.50 or $9.00, and these are paperbacks.

What's even more impressive about these figures is the degree to which they overshoot the Bank of Canada's stated targets. Now, it is to be realized that techncially the Bank of Canada's targets have been refocussed to only tackle "core" inflation, but even that has been flirting with the top end of the band, and according to StatsCan,

quote:
The prices of goods and services included in the All-items index excluding the eight most volatile components as defined by the Bank of Canada increased 3.1% from February 2002 to February 2003.

[ 26 March 2003: Message edited by: DrConway ]


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
radiorahim
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Babbler # 2777

posted 28 March 2003 12:49 AM      Profile for radiorahim     Send New Private Message      Edit/Delete Post  Reply With Quote 
So I guess they'll use the old tried and true...spike interest rates so more folks are thrown out of work and those remaining will be too scared of losing their jobs to ask for raises to keep up with inflation.
From: a Micro$oft-free computer | Registered: Jun 2002  |  IP: Logged
DrConway
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Babbler # 490

posted 28 March 2003 01:59 AM      Profile for DrConway     Send New Private Message      Edit/Delete Post  Reply With Quote 
The BoC is already hinting at a rate increase, but David Dodge is hamstrung (if one wants to think of it that way) by a less doctrinaire stance on inflation than John Crow, and thus a realization that the drivers of inflation in Canada are high energy prices and cigarette taxes, neither of which have anything to do with high aggregate demand.

He is also going to be wary of creating an environment where interest rates get so out of whack with the United States' that an unsustainable capital inflow occurs, since ours are higher than theirs (Alan Greenspan continues to note that the US economy remains "soft", and the Federal Reserve has not, as far as I know, raised rates), and this would drive the Canadian currency value upward, harming exporters and, paradoxically, creating the recession which we, technically, have avoided so far, as well as throwing our securities markets out of whack as well.

Unfortunately this sort of policy paralysis where you can do six of one and half a dozen of the other but not all at once means that the next inflationary blast will make a mockery of the Bank of Canada's much-vaunted "credibility" on monetary policy. Teehee.


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
R. J. Dunnill
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Babbler # 1148

posted 26 April 2003 04:31 PM      Profile for R. J. Dunnill   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
I actually don't think there's much real inflation in Canada, because incomes have been so stagnant. IMO the sources of inflation in Canada are more due to unstable oil prices, increased consumption taxes, and certain oligopolies, like the auto insurance industry, that can raise prices without fear of revenue loss.

With an unemployment/underemployment rate that's probably over 15%, how can anyone seriously state that the economy is at maximum capacity?

RD


From: Surrey, B.C. | Registered: Aug 2001  |  IP: Logged

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