Inflation May 2022 | General financial discussion | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

No permission to create posts
sp_Feed Topic RSS sp_TopicIcon
Inflation May 2022
June 22, 2022
7:36 am
Vatox
Member
Members
Forum Posts: 1174
Member Since:
October 29, 2017
sp_UserOfflineSmall Offline

I don’t see that return to target range, lol. Near four decade high at 7.7%

https://www.statcan.gc.ca/en/subjects-start/prices_and_price_indexes/consumer_price_indexes

June 22, 2022
7:50 am
canadian.100
Member
Members
Forum Posts: 665
Member Since:
September 7, 2018
sp_UserOfflineSmall Offline

Vatox said
I don’t see that return to target range, lol. Near four decade high at 7.7%

https://www.statcan.gc.ca/en/subjects-start/prices_and_price_indexes/consumer_price_indexes  

Trust me, it’s only temporary….back to 2%-3% “shortly”…..

June 22, 2022
7:51 am
Vatox
Member
Members
Forum Posts: 1174
Member Since:
October 29, 2017
sp_UserOfflineSmall Offline

Could be heading for 3% for the policy rate. A most guaranteed hike of 0.75 in July, will take us to 2.25%.

https://www.marketwatch.com/story/canada-cpi-accelerates-in-may-to-near-four-decade-high-of-7-7-271655901021

June 22, 2022
9:19 am
agit
Member
Members
Forum Posts: 85
Member Since:
December 12, 2021
sp_UserOfflineSmall Offline

NOT temporary it is all over the world and the only way out is 2.0 version of Paul Volcker shockcpi-2.png

June 22, 2022
10:24 am
Dean
Valhalla Mountains, British Columbia
Member
Members
Forum Posts: 1179
Member Since:
January 12, 2019
sp_UserOfflineSmall Offline

agit said

NOT temporary it is all over the world and the only way out is 2.0 version of Paul Volcker shockcpi-2.png  

Agit is right ... Canada and the DSofA (Divided States of America) are not alone in this. Runaway Inflation is now a 'Global' Problem ❗

One of the many examples from across the pond

And before it gets better ... it's gunna get Worse. sf-confused

My Two Centavos,

    Dean

.
P.S.
A little history . . .

sf-cool " Live Long And Prosper " sf-cool

June 22, 2022
11:08 am
AllanB
Member
Banned
Forum Posts: 200
Member Since:
April 18, 2022
sp_UserOfflineSmall Offline

Did BoC raise its target inflation rate from 1-3% to 2-3?

June 22, 2022
11:28 am
mordko
Member
Members
Forum Posts: 155
Member Since:
April 27, 2017
sp_UserOfflineSmall Offline

While Central Banks and governments screwed up by increasing money supply while ignoring inflation, these policies are being reversed. And long term factors, mitigating inflation, such as demographics, are still at play. It was clear this would happen but no reason for inflation to stay high.

June 22, 2022
11:57 am
cgouimet
Member
Members
Forum Posts: 684
Member Since:
February 7, 2019
sp_UserOfflineSmall Offline

mordko said
While Central Banks and governments screwed up by increasing money supply while ignoring inflation, these policies are being reversed. And long term factors, mitigating inflation, such as demographics, are still at play. It was clear this would happen but no reason for inflation to stay high.  

While increased money supply is ONE factor for the current inflation, one could argue that without that money supply, the pandemic could very well have been accompanied by depression ...

CGO
June 22, 2022
12:09 pm
MattS
Member
Members
Forum Posts: 100
Member Since:
January 11, 2020
sp_UserOfflineSmall Offline

if the economy cant survive on a miniscule BOC rate of say 1% then taking it all the way down to almost ZERO to squeak out yrs if 2-3 % growth was only delaying the inevitible and healthly washout. If they let it happen on the natural schedule the pain could have been smaller and normal. I still cant believe they didnt follow the stupidity of alot of the rest of world and take our interest rates to the negative. The people in charge of these central banks have encouraged too much poor bahaviour from governments, corporations, and people. Always looking for a way to spend tomorrows paycheque today!!

June 22, 2022
12:22 pm
mordko
Member
Members
Forum Posts: 155
Member Since:
April 27, 2017
sp_UserOfflineSmall Offline

cgouimet said

While increased money supply is ONE factor for the current inflation, one could argue that without that money supply, the pandemic could very well have been accompanied by depression ...  

Yes, but in the US and Canada money was being dished out for longer and in bigger quantities than was necessary. And the “easing”/zero rates carried on for too long as well. CBs kept telling us that the inflation was just an artifact of comparing against a low baseline in March 2020. And they did it for months on end. That fallacy lost them credibility but at least they have now admitted the error and started doing something about it.

June 22, 2022
12:39 pm
cgouimet
Member
Members
Forum Posts: 684
Member Since:
February 7, 2019
sp_UserOfflineSmall Offline

mordko said

Yes, but in the US and Canada money was being dished out for longer and in bigger quantities than was necessary. And the “easing”/zero rates carried on for too long as well. CBs kept telling us that the inflation was just an artifact of comparing against a low baseline in March 2020. And they did it for months on end. That fallacy lost them credibility but at least they have now admitted the error and started doing something about it.  

So much easier to judge history than the future ...

CGO
June 22, 2022
12:39 pm
Norman1
Member
Members
Forum Posts: 5270
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

mordko said

… CBs kept telling us that the inflation was just an artifact of comparing against a low baseline in March 2020. And they did it for months on end. That fallacy lost them credibility but at least they have now admitted the error and started doing something about it.

The central banks were correct and CPI increases had dropped to around 3% per annum from August 2020 to December 2020. The CPI increases then shot upward in January 2021, coinciding with the jump in commodity prices that month as the result of events in the Ukraine.

June 22, 2022
12:45 pm
Norman1
Member
Members
Forum Posts: 5270
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

cgouimet said

So much easier to judge history than the future ...  

Especially for those who don't understand that money supply had nothing to do with it and can't even judge history correctly.

Bank of Canada has explained many times over the past few years that they were paying for those Government of Canada bonds with settlement balance credits and not currency. Settlement balance credits do not leave the banking system and cannot be used to purchase things like houses, food, or gas.

June 22, 2022
12:52 pm
cgouimet
Member
Members
Forum Posts: 684
Member Since:
February 7, 2019
sp_UserOfflineSmall Offline

Norman1 said

Especially for those who don't understand that money supply had nothing to do with it and can't even judge history correctly.

Bank of Canada has explained many times over the past few years that they were paying for those Government of Canada bonds with settlement balance credits and not currency. Settlement balance credits do not leave the banking system and cannot be used to purchase things like houses, food, or gas.  

Norman doesn't appear to be a subscriber to Poilievre propaganda ... 🙂

CGO
June 22, 2022
1:47 pm
mordko
Member
Members
Forum Posts: 155
Member Since:
April 27, 2017
sp_UserOfflineSmall Offline

Back in the real world Central Banks themselves acknowledged they were wrong on inflation.

https://financialpost.com/news/economy/tiff-macklem-acknowledges-misjudging-inflation-pledges-to-act-forcefully-to-bring-it-down

And reasonably knowledgeable Harvard Economists like Larry Summers correctly predicted the impact of the third stimulus package in the US (with similar expert statements for Canada).

https://www.washingtonpost.com/opinions/2021/02/04/larry-summers-biden-covid-stimulus/

Russian invasion clearly impacted Eastern Europe and Germany but I am not sure what was the impact on inflation in N America. Russia makes up about 3% of the world economy and Canada didn’t trade with it all that much. Russian oil is still being sold on the world markets. Clearly there is some impact of all the sanctions but it might not be huge here.

This bout of inflation in Canada is a combination of money supply and supply crunch (eg continued Covid issues in China). The idea that doubling money supply has nothing to do with inflation is interesting. Still, I’ll go with Milton Fridman https://www.wsj.com/articles/inflation-surge-earns-monetarism-another-look-11655906400

June 22, 2022
3:30 pm
rpotter28
Kingston, ON
Member
Members
Forum Posts: 24
Member Since:
March 8, 2022
sp_UserOfflineSmall Offline

Vatox said
I don’t see that return to target range, lol. Near four decade high at 7.7%

https://www.statcan.gc.ca/en/subjects-start/prices_and_price_indexes/consumer_price_indexes  

And then you have to believe that 7.7% figure...

In my small world of Real Estate that I am doing everyday, nothing is up only 7.7% from last year. And it's larger $stuff, not like your milk going up again 2%!

June 22, 2022
8:27 pm
Vatox
Member
Members
Forum Posts: 1174
Member Since:
October 29, 2017
sp_UserOfflineSmall Offline

rpotter28 said a
mpari to
And then you have to believe that 7.7% figure...

In my small world of Real Estate that I am doing everyday, nothing is up only 7.7% from last year. And it's larger $stuff, not like your milk going up again 2%!  

You do realize that it’s a basket of goods with different weighting’s, right. Some higher, others lower. It’s different across locations too. Trying to make your own spending habits and experiences as the average, doesn’t work very well.

June 23, 2022
5:26 am
savemoresaveoften
Member
Members
Forum Posts: 1508
Member Since:
March 30, 2017
sp_UserOfflineSmall Offline

Vatox said

You do realize that it’s a basket of goods with different weighting’s, right. Some higher, others lower. It’s different across locations too. Trying to make your own spending habits and experiences as the average, doesn’t work very well.  

I am with rpotter28. Whatever in Stats Can basket is not what I consume, and I am a typical consumer. In my consumption pattern, inflation is always higher than what they calculated, whether its 2% or 8%.

June 23, 2022
5:30 am
savemoresaveoften
Member
Members
Forum Posts: 1508
Member Since:
March 30, 2017
sp_UserOfflineSmall Offline

cgouimet said

So much easier to judge history than the future ...  

yup.
No one knows at the time when to turn off the cash tap is proper. The thinking at the time is better keep the lifeline a little longer than risk killing what they try to save in the first place.
Most think inflation is the worst enemy, as thats from media highlighting the word all the time. However the bigger evil is depression / disinflation which is what global CB were ringfencing the economy from.

June 23, 2022
8:09 am
Vatox
Member
Members
Forum Posts: 1174
Member Since:
October 29, 2017
sp_UserOfflineSmall Offline

savemoresaveoften said

I am with rpotter28. Whatever in Stats Can basket is not what I consume, and I am a typical consumer. In my consumption pattern, inflation is always higher than rwhat they calculated, whether its 2% or 8%.  

Then you had better call SatsCan and let them know they are doing it wrong. Or perhaps get a job there and do it your way. It’s what we get, whether you like it or not changes nothing.

No permission to create posts

Please write your comments in the forum.