Fiscal Policy In Shambles, Cons Now Screw Up Monetary Policy
The Cons have prorogued their budget and will likely have to hold off on disclosing financial results until the spring.
In a desperate attempt to squeeze some life into Canada’s anemic economy – an ailing economy because of the reliance on Alberta oil revenue and neglect of our manufacturing industry – the Cons have turned to manipulating Canadian monetary policy.
In a breach of common sense, the Bank of Canada has reduced the key lending rate by a quarter of a percent yesterday.
Bond markets were stunned. The dollar took a hit.
This move will push the dollar further into a spiral, drive up the cost of doing business with American suppliers, and ultimately fuel economic activity in the heartland of industry – Ontario and Quebec.
However, in taking this drastic and ill-chosen action, the Cons will also stimulate inflationary pressure and push people into unmanageable debt loads.
But that doesn’t matter.
The Cons are desperate. They have failed miserably with their fiscal policy and now they’re about to fail miserably with their intervention with monetary policy.
The banks will likely stuff the extra cash into their pockets before lowering mortgage rates, shifting more money from working-class Canadians into the hands of the 1%.
In effect, this shift in monetary policy is a nice little cash grab for Canada’s elite, leaving regular Canadians with higher debt loads than ever, less after-tax dollars to spend and less faith in the economy.
The only thing the Cons will manage to do properly?
Blame the Liberals.