Home

bank of canadaSyndicate content

Columnists

The Bank of Canada blows it

By raising interest rates, the governor of the Bank of Canada has made a mistake. He got an easy question wrong. Is the economy expanding or contracting? He called it expansion, meaning output is growing, putting upward pressure on prices. The increase of 0.25 per cent in the overnight lending rate of the bank signals the beginning of a cycle of increases that will push all interest rates in Canada up over the next 18 months by as much as two percentage points.

World economic signs signal deflation meaning slower output, and faltering employment.

Inflation calls for interest rate increases, and government spending cuts. Deflation means no interest rate hikes, and government spending increases.

Tags:
Interest Rates inflation deflation bank of canada

Related items

related_item1

Monetary policy may seem dull, but what's at stake isn't

related_item1_desc

Linda McQuaig's column
Columnists

The oil price-loonie transmission mechanism

Photo: Canardo/Flickr

The most interesting comments from Bank of Canada Governor Mark Carney last week, in releasing the Bank's semi-annual Monetary Policy Report, dealt with the relationship between the price of oil and the Canadian currency. The Globe and Mail reported Carney as publicly questioning why currency traders automatically presume such a direct link between the loonie and the world oil price. After all, he accurately pointed out, Canada produces a lot more than just oil.

Tags:
currency oil commodities monetary policy economy bank of canada energy Canadian dollar

Related items

related_item1

Measuring the realities of Canada's economic performance

related_item1_desc

The Conservatives' drive for a majority is premised on positioning themselves as the best economic managers. But in reality, the claim that things are better here has never been statistically valid.

related_item2

Ten points in Canada's real economic update

related_item2_desc

When the minister of finance makes his Fall Economic Update we will want to hear what he has to say about government spending -- but we won't. Why? Because the real story is one of austerity.

related_item3

Canada and the next world financial crisis

related_item3_desc

The U.S. Fed's latest bubble looks set to grow in stocks and commodities. Commodities? You mean the natural resources that Canada's economy is so famous for? Yep. Here are some thoughts on a way out.
Columnists

Canada supports dark side of international finance

You can say one thing for the powers that be in the banking industry. They've got a lot of nerve.

This past week, our own finance minister, Jim Flaherty, along with Mark Carney, the Governor of the Bank of Canada, came out strongly in opposition to a modest proposal to regulate the U.S. banking system.

Their interventions followed a concerted effort by American bank lobbyists to spark international opposition to U.S. regulatory reforms.

Tags:
minister of finance financial regulation financial crisis corporate greed banks banking system banking lobby bankers bank of canada

Related items

related_item1

Of bailouts and liquidity shakedowns

related_item1_desc

The banks were absolutely stabilized, and possibly saved, by extraordinary government interventions. Whether you call that a bailout or a "liquidity injection" is all in the semantics.

related_item2

The Canadian 'good banks' myth

related_item2_desc

The sorry spectacle of Conservative cabinet ministers flying around the world defending banks is being largely justified by the perpetuation of the myth that Canada did not have to bail them out.

related_item3

Occupy bailout. Canadian banks got billions in help

related_item3_desc

A bank bailout that by any other name would still stink. Canadian banks were not nationalized, nor did they receive direct equity injections from the government. But that is far from the whole story.

Why not lock in low interest rates?

By Andrew Jackson
| December 31, 2011

The federal government has failed to take up an historic opportunity to lock in ultra-low interest rates on long-term Government of Canada bonds.

Read more

Modest inflation outstrips wages and Canada Social Transfer

By Erin Weir
| December 27, 2011

Statistics Canada reported recently that the annual inflation rate remained 2.9 per cent and the Bank of Canada's core rate remained 2.1 per cent in November.

The monthly increase in consumer prices slowed to 0.1 per cent in November from 0.3 per cent in October. The monthly increase in core prices slowed to 0.1 per cent in November from 0.2 per cent in October.

Inflation remains modest and should not deter the Bank of Canada from keeping interest rates low, and perhaps reducing them, to support our fragile economy and labour market.

Read more
Columnists

Inflation targeting and the financial crisis

Many long-held tenets of neoclassical orthodoxy have fallen by the wayside in the past three years, but perhaps one of the biggest dominoes that is at least teetering precariously (if not fully tipped over) is the consensus that inflation targeting should be the exclusive focus of monetary policy.

Tags:
monetary policy bank of canada inflation financial crisis recession economic policy unemployment economic growth

Related items

related_item1

'What do banks actually DO?': Teach-in with Occupy Toronto

related_item1_desc

What must be done with the banks? Tax them, control them and take them back. Those are the "take-aways" from a talk on the banking system that I gave at an Occupy Toronto rally last weekend.

related_item2

The inflation-control target

related_item2_desc

So, the 2 per cent inflation target has been renewed as it now stands. (Take that, House of Commons Finance Committee, which is holding hearings on the issue next week.)

related_item3

Monetary policy may seem dull, but what's at stake isn't

related_item3_desc

Monetary policy may seem dull, but what's at stake isn't. It deals with money -- how much will be in circulation and how much it will cost to borrow.

The inflation-control target

By Andrew Jackson
| November 10, 2011

So, the 2 per cent inflation target has been renewed as it now stands. (Take that, House of Commons Finance Committee, which is holding hearings on the issue next week.)

Read more

Wage deflation confirmed

By Andrew Jackson
| September 29, 2011

In an earlier post, I noted that falling real wages as indicated by July and August data from the Labour Force Survey which showed increases of just 1.4 per cent in nominal hourly wages over the past year signalled trouble ahead: "If this trend continues, it is likely to further undermine a weak recovery, negatively impacting upon consumer spending and perhaps serving as the tipping point to deflation of the housing bubble."

Read more

Outlook darkens as budget debate begins

By Andrew Jackson
| August 20, 2011

Allow me to indulge myself just this once. Almost exactly one month ago I wrote a post arguing that the Bank of Canada was being too optimistic about our economic prospects in the July Monetary Policy Report.

Yesterday, both the Governor (and Finance Minister Flaherty) conceded to the House of Commons Finance Committee that the outlook is indeed significantly less rosy than they had thought just one month ago.

Read more

Thoughts on 'Why not print money?'

By Marc Lee
| August 11, 2011

Richard Gilbert's article "Why not print money?" in the Globe's Economy Lab toys with more radical monetary intervention as a response to the crisis. Desperate times, they say, call for desperate measures. The title (which was perhaps not Gilbert's at all) is more provocative than the article itself, which is mostly about tolerating higher inflation that could have beneficial impacts for easing our way through the current crisis.

Read more
12next ›last »
Syndicate content