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Experts say inflation concerns looming

Macdonald Laurier Institute Senior Fellow Philip Cross warned the higher money supply could lead to higher inflation, followed by higher interest and mortgage rates.

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Economic experts warn the early warnings of rising inflation have appeared, threatening a greater burden on indebted Canadians and federal and provincial governments.

Thanks to new debts from the provinces and federal government, the Bank of Canada tripled its assets in 2020. This led to a 30 per cent increase in the money supply, which is much higher than the typical 7 per cent annual increase.

In an interview with the Western Standard, Macdonald Laurier Institute Senior Fellow Philip Cross warned the higher money supply could lead to higher inflation, followed by higher interest and mortgage rates.

“We Canadians are holding a tremendous amount of debt, especially government, but household debt is very high, too, with all this housing we’re buying. So if interest rates start rising, that’s going to be burdensome for a lot of people who are taking on a lot of debt during this crisis.”

The deficit spending of the 2008 financial crisis did not result in inflation, partly because the Bank of Canada wound down its holdings as quickly as it could. This past year, the Bank of Canada has bought at least $4 billion of federal debt every week and there’s no end in sight.

Some early signs of inflation are already evident. The price of gasoline has risen 30 cents per litre since December, and the price of lumber and some commodities have also spiked. The main reason inflation has not manifested more broadly is that pandemic restrictions have prevented spending.

“We’re conducting a huge experiment now. What’s going to happen? I mean, Canadians are sitting on literally hundreds of billions of dollars of savings. What are they going to do with that? I don’t know. Nobody knows. We’ve never been here before. We’ve never been in a pandemic,” Cross said.

 “It’s almost guaranteed that inflation is going to go up to at least 3 per cent, probably a little more, probably four, four and a half, just for technical reasons.”

Steve Ambler, with C.D. Howe Institute as holder of the David Dodge Chair in monetary policy as well as a retired professor, told the Western Standard, he also sees early signs of inflation.

“Real estate prices are one area that’s really, really picking up very quickly. In Montreal now you have all this evidence. There was a house not too far from where we’re living that went on the market, and had about 12 offers on it within 24 hours and sold a day later at $100,000 over asking price,” Ambler said.

“I think we should be prepared to see inflation a bit above 2 per cent for a while,” Ambler said.

“If I had to predict, it’s going to happen probably before 2023 – not before the end of 2021, but maybe sometime in 2022.”

Ambler believes when inflation takes hold, the Bank of Canada will face “a tough balancing act” deciding how much to let interest rates climb.

“They’re going to receive some implicit pressure – probably not explicit, but you never know – from the federal government to keep rates down to bear the costs of servicing payments on the federal government debt don’t explode.”

Inflation in the post-pandemic economy won’t be evenly spread, Ambler said.

“Certain sectors that are going to be looking at capacity constraints and excess demand move very quickly. And it’s not gonna be sort of inflation in the classic sense of an increase in prices across the board. But I think some sectors are going to see spikes in prices,” he said.

William Robson, president and C.E.O. of the C.D. Howe Institute, told the Western Standard he might pay closer attention to the Bank of Canada’s monetary aggregates than the bank itself.

“When there was a very odd thing happening with the growth rates, I asked one of the members of governing council [at the Bank of Canada] what he thought might be behind it, and he was surprised to hear of it at all. So they’ve got it in the shop window but it’s not something that they’re paying a whole lot of attention to,” Robson said.

Certain figures have caught Robson’s eye.

“The spread between ordinary and real return bonds are an indicator of inflation expectations,” Robson said.

“A year ago, it was about 0.8. Now it’s about 1.6.”

A comprehensive measure of the money supply, M2, is rising rapidly.

“Even M2 is growing very, very fast, by any standard, like double digit growth rates,” Robson said.

Robson just hopes the federal government will maintain a 2 per cent inflation target as it renews its five-year agreement with the Bank of Canada later this year.

“I’m nervous as is. If I start to hear anybody on the elected side talking about the advantages of having a more flexible or higher inflation target, then my nervousness escalates to sleepless nights,” Robson said.

Lee Harding is a Western Standard contributor based in Saskatchewan

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MAKICHUK: Rory, Napoleon and the Equalization reckoning

My friends, a reckoning is coming and it all begins on Monday when you enter the municipal voting booth.

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“Few men are willing to brave the disapproval of their peers, the censure of their colleagues, the wrath of their society. Moral courage is a rarer commodity than bravery in battle or great intelligence. Yet it is the one essential, vital quality for those who seek to change a world that yields most painfully to change.”
― Robert F. Kennedy

Rory went camping with his wife in lovely BC about seven months ago.

That’s not his real name but it will suffice for now.

The names have been changed to protect the innocent, like in that detective television show Dragnet.

My entire life is a lengthy list of bad TV shows but that’s another story.

They parked the trailer, set up the picnic table and did what most campers do including letting out their cat, Napoleon.

Again, the name was changed to protect the cat’s innocence.

Everything was fine until it was time to go home. No Napoleon.

They searched and searched, nowhere to be found. No Napoleon.

Time eventually runs out on these matters and while it’s a heart-breaking decision, you have to move on. 

But Rory would use social media to search for his faithful cat.

Seven months later … yes, seven months, he would get a message, short and simple, with a photo.

It read “Is this your cat?”

Rory raced back, with trailer in tow — ready to spend days there if he had to.

This time he was not coming back without his furry pal.

Strangely enough, as he was parking the trailer, he looked in the mirror … a cat stood by, stoically watching.

It was skinny, in rough shape but there was no mistake — it was Napoleon.

Seven months, still alive!

He called and he came. But when he tried to pat him he pulled back. Frightened.

I better not screw this up, Rory thought, so he turned on the gentle charm. 

It worked. In minutes, Napoleon was curled up on the passenger seat headed back to Cowtown and an appointment with the vet.

According to FAQ Cats online, “a domesticated cat is unlikely to survive in the wild on its own for a considerable amount of time. Cats that have not spent time outside do not have the necessary skill set to survive in the wild by themselves.”

So tell me, how did Napoleon survive seven months on his own? It’s a mystery wrapped in an enigma, like … who killed JFK?

But let me take a guess — I think he survived on his smarts.

Napoleon probably ate camp food remnants or begged from campers. Maybe he killed birds or small rodents. 

Ate spiders, bugs or anything that moved. Drank stream or rainwater.

Maybe he found a local benefactor. Who the hell knows.

All I know, is that Napoleon toughed it out. His desire to live, to survive, kept him going.

Seven months. 

Think about that for a moment. How long would you last out there?

And then there are the predators. Things that want to eat you.

This ranges from hawks, raccoons, foxes, or even bigger animals like bears, bobcats and cougars, says FAQ Cats.

Little food to be found and death all around you.

Even outdoor survival guru Bear Grylls would have a hard time with this one.

So what is my point with Napoleon’s dramatic tale of survival?

Where there’s a will, there’s a way. And oh my, there is a will … and every day it grows stronger.

I’ve said it once, and I’ll say it again … and I’ll keep saying it until the day I die. It’s time Alberta goes its own way.

Either we get a new deal under confederation or we walk. 

We can do this, I know we can. Albertans … true Albertans … are a strong, resilient, hard-working people.

We want our children and grandchildren to have a future. To have good jobs, the opportunity to grow and prosper and to make our province a better place.

That does not seem likely under the Trudeau regime in Ottawa. In fact, a road of economic despair awaits us.

My friends, a reckoning is coming and it all begins on Monday when you enter the municipal voting booth.

It’s time to let those Eastern Laurentian elites know that you have had enough.

The question you will face goes like this:

Should section 36(2) of the Constitution Act, 1982, Parliament and the government of Canada’s commitment to the principle of making Equalization payments, be removed from the Constitution?

I’m voting yes, with extreme prejudice, and I hope you will do the same.

Let’s give Justin The Younger a nice kick in the squares.

Personally, I think it’s the purr-fect option.

Dave Makichuk is a Western Standard contributor
He has worked in the media for decades, including as an editor for the Calgary Herald. He is also the military editor for the Asia Times.
makichukd@gmail.com

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WS Exclusive Poll: Support for Kenney ‘grim’ as calls to resign grow

Mainstreet President and CEO Quito Maggi described the figures for Kenney as “historically low.”

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Things aren’t getting any better for Premier Jason Kenney with a clear majority of Albertans saying he’s not doing a good job and should resign.

The poll, conducted by Mainstreet Research, shows 69% of Albertans don’t approve of the job Kenney has done. 

Only 28% of those polls think he has done a good job.

Mainstreet Research

Asked: “Do you approve or disapprove of the job Jason Kenney is doing as Premier of Alberta?” a whopping 55% said they strongly disagreed with the statement.

Another 14% said they somewhat disapproved.

The poll found only 10% of Albertans strongly approved of the work Kenney has done, with another 18% saying they somewhat approved.

Pollsters found 3% who didn’t know.

Kenney does appear to have some support from people who say they are going to vote for the UCP next election. A total of 77% either strongly or somewhat approved of his leadership. With 22% saying he’s not doing a good job.

There’s also anger in the rural areas with 61% of people in the north of the province disapproving of Kenney, in the south disapproval is at 65%.

Courtesy Mainstreet Research

Amongst NDP voters, not unsurprisingly, 90% disapproved of the job he is doing. A total of 75% of Wildrose Independence Party supporters said they weren’t happy with Kenney.

When pollsters asked if “do you think Jason Kenney should resign as premier?” a total of 58% said yes, 29% said no and 13% weren’t sure.

A total of 73% of UCP voters said Kenney should stay and ride out the storm.

Courtesy Mainstreet Research

Mainstreet President and CEO Quito Maggi described the figures for Kenney as “historically low.”

“It’s pretty grim, very dire. It’s shocking to me,” said Maggi.

Maggi said Kenney is sitting at a negative 41 — the difference between supporters and opponents. He said only embattled former Ontario premier Kathleen Wynne has similar numbers before her election wipeout in 2018.

“That’s a historically high number in Canada,” said Maggi.

“The only way back now for the UCP is through new leadership.”

Maggi said Kenney is paying the price for his perceived bungling of the COVID-19 crisis.

“Most people are just looking for another option before the next election.”

The analysis in this report is based on the results of a survey conducted on October 12-13 2021 among a sample of 935 adults, 18 years of age or older, living in Alberta. The survey was conducted using automated telephone interviews (Smart IVR). Respondents were interviewed on landlines and cellular phones. The survey is intended to represent the voting population in Alberta. 

The margin of error for the poll is +/- 3.2% at the 95% confidence level. Margins of error are higher in each subsample. Totals may not add up 100% due to rounding. 

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NDP support holding strong across Alberta

That’s enough of a lead to form a majority government, say pollsters.

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The UCP would be gutted and Rachel Notley back as premier if an election were held today, an exclusive new poll done for the Western Standard shows.

The Mainstreet Research poll shows Notley’s NDP currently has the support of 41% of Albertans with Jason Kenney’s UCP well back at 25%

That’s enough of a lead to form a majority government, say pollsters.

Courtesy Mainstreet Research

The upstart Wildrose Independence Party collect 11% support in the new poll, with 5% siding with the Alberta Party, with the Liberals and Greens at 1% each. A total of 14% of voters were undecided.

Wildrose leader Paul Hinman polls best among people who are refusing to get vaccinated. When they were asked, 34% chose Wildrose, 29% for the UCP and only 2% for the NDP.

If the undecided are removed from the poll, the NDP checks in with 45%, the UCP with 29%, the WIP with 13% and the AP with 6%

In that poll, the NDP is also leading in Alberta’s two major cities. In Edmonton, the NDP has 62% support with the UCP at 21% In Calgary, the NDP leads with 48% support and the UCP at 31%.

Rural areas seem split. Northern rural areas favour Kenney 34% to 29% for Notley. Southern rural areas like Notley at 32% with Kenney at 29%.

Courtesy Mainstreet Research

“Things are looking pretty grim for Kenney,” said Mainstreet CEO and President Quito Maggi.

“It’s 18 months until the next election, and that can be an eternity, but numbers in this realm for the better part of a year, with no positive movement, shows the trouble he is in.”

Maggi said he was a little surprised by the lead of Notley in Calgary, normally a Conservative bastion.

“It speaks of the personal unpopularity of Jason Kenney himself. The policies of the NDP probably aren’t supported in Calgary but they are willing to vote for the candidate that will defeat Kenney,” he said.

Maggi noted Kenney is now getting it from both sides of the political spectrum and the WIP is taking enough to leave Notley with a majority victory. He predicted an NDP victory would only be by one or two seats.

The analysis in this report is based on the results of a survey conducted on October 12-13 2021 among a sample of 935 adults, 18 years of age or older, living in Alberta. The survey was conducted using automated telephone interviews (Smart IVR). Respondents were interviewed on landlines and cellular phones. The survey is intended to represent the voting population in Alberta. 

The margin of error for the poll is +/- 3.2% at the 95% confidence level. Mar- gins of error are higher in each subsample. 

Totals may not add up 100% due to rounding. 

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