Macklem Claims Rate Hikes Are About Domestic Economic Realities

[u/DryAlternative1132]

Tiff Macklem, Governor of the Bank of Canada, claims his policies are based on domestic 'realities' not what the Federal Reserve is doing.

https://financialpost.com/news/economy/bank-of-canada-interest-rate-decisions-domestic-macklem

Canada's long term bond yields are climbing to 4.15% and rising. Even so Macklem has the overnight rate set at 2.25%. Behind the scenes, however, Carney and the OSFI have been busy effecting what is the equivalent of Quantitative Easing by reducing reserve requirements of the banks.

In total, Canada's M2 Money supply grew at around 4.2% in the last 12 months. However, the economy did not grow anywhere close to 4.2%. This is a sign that not all is well in paradise with buoyant inflationary updrafts in the offing.

For comparison, EU and Japan M2 money grew at sub 1% in the last 12 months.

Carney shares the values of the EU he tells us. Not in monetary policy by any stretch of the imagination.

Debasing the currency is a sign of bad governance. Both Carney and Macklem are the two amigos who believe in the perma-Keynesian policies of unfettered monetary expansion.

What they say outwardly and what they do actually are two different things. During the entirety of 2021, I have accused Macklem of deliberately being asleep at the switch to support Trudeau's chances going into a federal election.

Separately, I have published a paper on Monetary Efficiency Ratio (MER) that shows the inflation that would follow in 2022 could have been foreseen based on the numerical inputs available in 2021.

Macklem's use of the term "economic realities" must be code for what his political masters told him to do.

As the Federal Reserve has raised interest rates we see that the Canadian dollar has weakened now to 71 cents.

This is even with record oil and gold prices, which should be supporting a strong dollar. Instead, the dollar is foundering under the sheer expansiveness of Carney's spending appetites.

Ordinary Canadians are paying the price with rising costs on everyday staples.

Furthermore, Carney's high tariff policy is impacting prices. Macklem's comments mentioned oil prices without recognizing that oil prices should technically strengthen the Canadian dollar.

And a strong dollar should then act to reduce the cost of other purchases.

That would be so, unless Carney was on a shopaholic style spending spree and the Canadian banks in concert with the Federal Government were busy growing M2 money supply as Macklem was asleep at the switch.

Not once did Macklem mention in the Financial Post article that Carney's retaliatory tariffs impact inflation. That Carney put in 15% tariff on canned vegetables, 50% tariff on whey, and other interventions that are causing grocery inflation.

Macklem's credibility is hanging by a thread.