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May 22, 2021
5:18 am
savemoresaveoften
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I dont believe inflation will come down to the 1% level we have seen.
Every business hike prices to try to make up the "lost revenue" from the pandemic.
Those that does well doing the pandemic hike prices too just to "keep up" and not "lose out".
Price will go up 3% every year instead of 1%, esp once people "accept the pandemic inflation"
Restaurant prices are up 10% each year as real estate skyrocket. Even if real estate prices collapse, you wont see those prices come down either.
History tells us whether its economy boom or recession, price still goes up....

Whats up stays up 🙂

May 22, 2021
6:33 am
Alexandre
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... prices for tomatoes fell 29.8%

I guess I don't know right places to shop for tomatoes.

Prices for telephone services, which include cellular services, fell 13.0% year over year in April 2021 and have been declining since September 2019.

I imagine people at Virgin Mobile headquarters, my cellular services provider, laugh hysterically when they read this.

May 22, 2021
8:04 am
AltaRed
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Vatox said

It sure is meaningful! I’ll be sure to let the CRA know that you don’t feel it’s meaningful and to leave out of your next year indexation increase. It’s going to be in mine though!  

Monthly numbers are not all that meaningful on a calendar year basis. 5-6 months of 'high' YOY numbers will be offset with months of YOY monthly numbers trending down later this year. We all know 2020 was a suppressed year for inflation for good reason. 2021 is making up for the slack in the economy in 2020 as it should and as we should want it too. The quicker we get an economic surge back to 'normal', the better off we will be.

By 2022, you will likely be able to 'average' the combined 2020 plus 2021 into perhaps 2% per year over the 2 years. IOW, the trend line from pre-2020 will continue with 2020 a pothole in the road and 2021 a speed bump....with smooth pavement returning in 2022.

Added: By way of example: 0.7% for 2020 plus 3.3% for 2021 would be rolling average of 2% for both 2020 and 2021.

May 22, 2021
1:34 pm
cristunity
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Bill said I liked "relax dude", an expression of caring for a stranger's well-being.  

Yup, I deliberately tried to say something nice to calm this guy down. If I wanted to be "uncivil" as someone else suggested, I certainly have that capacity.

The tantrums that some people are throwing in here about this thread are, to me, the very worst thing about this particularly site and why I find it hard to participate. There's a minority of highly cantankerous, gatekeeping, self-appointed (and wholly powerless) moderators who've taken it upon themselves to maintain proper forum hygiene. Then they cry and run to Peter to make the boo boo all better. I'd friggin hate to be Peter and have to babysit all the time.

What these people don't realize -- and I suspect they don't realize it in their offline life as well, and never have -- is that this is a conversation. Not a debate. It is organic, and that's what makes it so great. Kidd is right -- this thread would have died after the initial (boring) post.

So...how about those Leafs, huh? sf-laugh

May 23, 2021
11:35 am
Saver-Mom
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Ya, the Leaves did great once the refs started playing for them!

Measly increases in OAS and 300$ token are nothing in the scheme of what the govt has given away this year, and spent.

Real estate is now unaffordable for young Canadians.

We are entering a period with high risk of hyperinflation and our savings being devalued. Hard to know what to do besides distract ourselves with Taranna-centric hockey

May 23, 2021
11:59 am
Saver-Mom
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Watch Poilievre for a concise explanation of inflation and govt overspending

May 23, 2021
12:42 pm
Norman1
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Saver-Mom said

{ YouTube video }

Watch Poilievre for a concise explanation of inflation and govt overspending

The video and the explanation are garbage. Inflation and money supply don't work that way.

Countries in Europe and Japan have tried for years deliberately to inflate their economies by printing money and quantitative easing. It hasn't worked.

Printing money and giving it to people so that they can pay the rent they were paying and buy the food that they were buying simply sustains the current demand for goods. As long as the supply for those goods is not disrupted, there will be not be serious inflation.

May 2011 Forbes article Money Growth Does Not Cause Inflation! has a more detailed explanation about the common misinterpretation of the relationship between money supply and inflation.

May 23, 2021
12:51 pm
Saver-Mom
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I agree printing and giving away money is not the solution, and so does Poilievre. This is the Liberal plan.

Supplies are already disrupted. As he says, lumber is scarce and has doubled to tripled in cost. Gas prices are increasing, food too. Housing prices have grown 30%. To me, this sounds like inflation.

May 23, 2021
2:05 pm
Norman1
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Printing and giving away money is the solution. It was the solution too when the Conservatives were the government during the 2008 crises.

It is not the solution only when people are not the government.

Those supply disruptions have nothing to do with the money being printed.

Lumber is scarce because the lumber mills have been shutdown by the previous drop in demand. Even when they are reopened, the mills are still not allowed to have as many workers as before in them because of COVID distancing, not because the workers have been lured away to a different career.

Ditto with the meat packing plants and farms.

Those COVID distancing restrictions will eventually be gone.

Some of those housing prices increases may not stick either. Once employers start demanding some of their employees come into the office regularly, those employees will start thinking of moving back closer to work.

May 23, 2021
3:11 pm
Saver-Mom
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The lumber mill that we have been waiting on since last summer for siding said they cannot get their employees to come back to work, they would rather stay home on CERB than work for the same amount. This, they told us, is the reason for the delay...

May 23, 2021
4:02 pm
Loonie
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CERB ended 8 months ago; it only paid 2000/month and was taxable. Anyone who could would likely take a better paying job. The mill work may be seasonal. .
For a balanced view, one would have to talk to some of their employees.
The problem isn't just one mill or a group of "lazy" employees. It's industry-wide.

May 23, 2021
4:45 pm
Alexandre
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Norman1 said

May 2011 Forbes article Money Growth Does Not Cause Inflation! has a more detailed explanation about the common misinterpretation of the relationship between money supply and inflation.  

It is good reading, but I am afraid the author makes different oversimplification. By starting with somewhat reasonable assumption that additional money injected by the government will not create an equivalent inflation that can be calculated through MV = Py assuming "V" and "y" are constant, he jumps to conclusion that no inflation will be caused by that new money.

Which is illogical.

Printing money and giving it to people so that they can pay the rent they were paying and buy the food that they were buying simply sustains the current demand for goods.

Norman1, you just made very convincing argument in favor of Universal Basic Income.

May 23, 2021
6:12 pm
Bill
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CERB is still around, it morphed into Canada Recovery Benefit. Lots of folks choosing to take it, ask business owners & you'll hear.

Yeah, cool, sounds like printing whatever money we need for whatever we want is the answer then. Good thing after all these thousands of years our current governments finally figured it out - just print and distribute.

May 23, 2021
7:30 pm
Loonie
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CRB is not same as CERB. It has different criteria. I know people who got CERB who can't get CRB.

May 23, 2021
10:29 pm
Bud
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Norm, Harper spent what was it 50billion in 08. Trud is up to 400billion.

Bill much of the money printed was to bailout common shareholders and real estate speculators

May 23, 2021
11:11 pm
Norman1
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We are going to okay if it has been only $400 billion of new debt so far and maybe another $400 billion for another year.

My calculations earlier were for $2 trillion of new debt that would require an 8.4% tax hike.

$800 billion of debt instead would need a $800/$2,000 x 8.4% = 3.4% tax hike.

May 24, 2021
9:31 am
Norman1
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Alexandre said

It is good reading, but I am afraid the author makes different oversimplification. By starting with somewhat reasonable assumption that additional money injected by the government will not create an equivalent inflation that can be calculated through MV = Py assuming "V" and "y" are constant, he jumps to conclusion that no inflation will be caused by that new money.

Which is illogical.

Not at all. Increasing money M won't cause an increase in price P when the quantity of goods y increases as well. That the quantity or supply of goods y won't increase when money supply M increases is the error the article points out.

Furthermore, that increased money supply would even go into that equation and increase M is not always true. The increased money could be banked into savings accounts. The bank would then park the money into government treasury bills. That effectively returns the extra money to the government, creating no new demand for goods y in the equation, and no upward pressure on price P. That's likely what happens in countries like Japan where there are lots of super savers in the population.

Money doesn't chase goods. It is people who chase goods. If people don't chase goods with their money, then it doesn't matter how much money is handed out to them.

Printing money and giving it to people so that they can pay the rent they were paying and buy the food that they were buying simply sustains the current demand for goods.

Norman1, you just made very convincing argument in favor of Universal Basic Income.

It isn't. There is a big difference between (a) a one-time bridging of a short term loss in income and (b) giving lifelong income to those who had no such income before.

May 24, 2021
9:58 am
Bill
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It's true, CERB was an emergency general relief program whereas CRB (which needs to be viewed in conjunction with concurrent expanded EI provisions to which many unemployed CERB recipients transitioned) is aimed for a longer period. With CRB you can actually earn more and still receive it, so it's true that if you were on CERB but are not interested in looking for work (one of the criteria for CRB) then you don't get CRB. CRB is aimed at those who want to work but have suffered a total or at least a 50% income reduction due to the virus. Also, there is now the Canada Recovery Sickness Benefit (CRSB) and the Canada Recovery Caregiving Benefit (CRCB) for those who can't work due to virus-related reasons, so again these need to be considered. The end result is that these benefits are all aimed at people who want to but can't work for various virus-related reasons so, yes, if you've no intention of working, looking for work, wanting to work, etc, then CERB was better.

May 24, 2021
10:07 am
Bill
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I agree, when someone says "Printing and giving away money is the solution" that sounds like a compelling argument for guaranteed income. And I don't see the difference between giving away hundreds of billions in a short period of time vs lesser amounts over a longer period of time, if the solution is money printing who cares? And advocates of guaranteed income say it won't cost much more anyway, once we shut down all the other forms of handouts.

Anyway analysis using federal debt number is kind of funny, totally ignores huge provincial debts, and municipal too. There's only one taxpayer for all levels of debt.

Bud, I've no idea what you're talking about, i.e. CERB etc went to everyone, not just common shareholders and real estate speculators.

May 24, 2021
10:39 am
HermanH
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Bill said And advocates of guaranteed income say it won't cost much more anyway, once we shut down all the other forms of handouts.

Advocates of schemes like this ALWAYS make the same claim. In the end, it always ends up costing much, much more.

The same advocates for giving free housing to the homeless as a way to cut down on other costs like medical care are similarly foolish. Free anything for those folks just mean they have more money freed to spend on their various addictions. Net savings to the public are non-existent. Only additional costs are levied on taxpayers.

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