Artis Real Estate Investment Pref Shs Series E T.AX.PR.E

RE:RE:Absolutely insane

[babybunny]

Macklen is in a bind, but he brought it on himself by assuring Canadians that interest rates would remain near zero for the foreseeable future, one of the most irresponsible statements in Canadian history.    Justin Trudeau took that as gospel and spent like a drunken sailor, leaving us with a huge federal debt.  And he keeps digging the hole deeper ... $30B about to be wasted on battery plant subsidies, $40B in reconciliation payments, loan guarantees about to be provided for tens of billions in infrastructure, hordes of public servants hired for no obvious purpose, and the list goes on.  None of these expenditures bolsters the tax base, but they do bloat the debt ... and so investors are increasingly wary of holding Canadian dollars or Canadian dollar debt. 

I don't think Macklen can fully counter this profligacy with the one hammer in his toolbox, interest rate hikes without creating a new financial crisis (a Macklin Moment?).  He would be much better off being a little modest and admitting this, keeping interest rates where they are or a bit lower, and letting the chips fall where they may rather than obsessing over the arbitrary 2% inflation target which was just a number picked out of the air by the New Zealand central bank quite recently, in 1990.  Inflation seems unpleasant, but it is not a problem per se, only insofar as it anchors expectations of future inflation.  Inflation in the 3% - 4% range for a few years is certainly not as terrible as the central banks make it out to be;  in fact it would be beneficial for the country as a whole as the government debt would be inflated away at a decent clip.