Yesterday's "Watershed" Central Bank Announcement Which Everybody Missed

In what may have been a watershed moment in monetary policy - which awkwardly was missed by almost everyone as a result of the concurrent launch of the latest North Korean ballistic missile which immediately drowned out all other newsflow - late on Thursday, the Bank of Canada held a conference on inflation targeting and monetary policy titled "Bank of Canada Workshop “Monetary Policy Framework Issues: Toward the 2021 Inflation-Target Renewal"  in which, in a stunning shift of monetary orthodoxy, BoC Senior Deputy Governor Carolyn A. Wilkins said that Canada was open to changes in the BoC mandate.


Or in other words, lowering or outright abolishing the central bank's inflation target, or explicitly targeting financial conditions and asset prices.

While still early in the process, the BOC may be setting a precedent, one which other DM central banks may have no choice but to follow: If the Bank of Canada is going to look at alternatives to their mandate (with an emphasis on inflation), it - as several trading desks have suggested - could become the first central bank to officially change its mandate to reflect financial conditions that are too loose in the context of the current low r-star lowflation environment.

In practical terms, this would mean that instead of seeking chronically easier conditions to hit legacy inflation targets around ~2.0% while inflating ever greater asset bubbles, one or more central banks could simply say that 1.5% (or less) is sufficient for CPI and call it a day, in the process soaking up record easy financial conditions and bursting countless asset bubbles. In the context of a "new supply paradigm" in retail (where even FOMC members now blame Amazon for lack of inflation) and energy (same but with OPEC) which appears to be gaining traction within central banks, as well as frustration with distortion in asset markets, It would make much sense for the Fed to lower the inflation target to 1.5%, declare victory, and normalize policy.

Why?  Because as several banks noted after the BoC conference, we know that central banks world-wide are concerned about the size of their balance sheets and associated dysfunctionality in government and other bond markets, and the ever-increasing risks from the ultimate unwind as the QE programs continue to grow in a war against inflation where the victory looks increasingly Pyrrhic. Furthermore, negative rates have caused money markets to become dysfunctional and less efficient, which could be a structural issue "if the temporary was allowed to become permanent."

What is shocking is that this revolutionary reversal comes just one year after mainstream monetarist dogma was that the solution to stagnant growth was to flood the world with virtually unlimited liquidity, unleashing NIRP across the entire world and even launching helicopter money, in order to protect "lowflation." One year later, central bankers appear to have made a remarkable, and still largely inexplicable U-turn. 

To be sure, it did not start with the Bank of Canada: last week NY Fed president Bill Dudley hinted the Fed could lower the inflation targetAs a result, we are now in a situation where many central banks are looking to declare victory and walk off the field, before the unintended consequences of monetary policy kick-in for financial stability.  This will lead to greater policy divergence between the likes of the BoC and BoE, Fed, ECB and the BoJ and RBA, but ultimately policies will once again reconverge as more central banks follow in the BOC's footsteps. .

Then there is the issue of pervasive market froth and countless asset bubbles, which G-6 central banks are well aware of: with a US real 5y rate at 3bps, credit spreads at very tight levels relative to historic cycles, and elevated equity markets, financial conditions are very loose at a time of full employment and cyclical acceleration. Just a few days ago, Fathom Consulting said that there is now a "bubble in everything except housing."

Following the BOC's trial balloon, expect similar arguments on revising central bank mandates and changing inflation targets to gather strength in coming months, and be espoused by increasingly more central bankers. It will mean the first fixed income markets will start to re-price accordingly, followed shortly by equities.  Ironically, of course, if central banks finally did decide to lower the inflation target at a time of global cyclical acceleration, and the new supply paradigm proved to be an illusion (i.e. a one-off adjustment rather than a permanent factor), the consequences for fixed income would be catastrophic, with the long end being under particular threat, while risk assets would crash.

Indeed, the threat of an equity crash is the only potential hurdle for central banks to go fully public with the new "mandate revision."

In any case, keep an eye on what central bankers say and do in the coming weeks. As Citi summarizes, "we've had a decade of twists and QEs and negative rates and the potential accommodation removal is quicker than asset market prices are currently reflecting. Assets will wait to see the whites of the central bank rates' eyes now. That's a real twist!"


nope-1004 Deathrips Fri, 09/15/2017 - 15:22 Permalink

Bankers are amazing.  Just the other day I went in with 3 dimes and they gave me a quarter and a nickel.  I mean, talk about service.Another time I went in with a dollar and needed change.  I said "3 quarters, 3 dimes and 2 nickels please."  Well, their computer systems picked up the error right away, corrected it, and sent me on my way.Geniouses, I tell ya.

In reply to by Deathrips

Theosebes Goodfellow CoCosAB Sat, 09/16/2017 - 13:55 Permalink

~"Furthermore, negative rates have caused money markets to become dysfunctional and less efficient, which could be a structural issue "if the temporary was allowed to become permanent.""~    Because of course, who doesn't want to lend sovereign nations money and then pay them interest on the loans you made them? "Less efficient"? What a brutal understatement. There is no greater argument for holding PMs than governmental negative interest rates, save currency debasement, (which is also a good reason to hold your wealth in PMs).

In reply to by CoCosAB

sagramore Deathrips Fri, 09/15/2017 - 17:01 Permalink

Elizabeth Alexandra Mary, Defender of the Faith is the "owner" through a personal possession of parts of Ontario, parts of the Atlantic provinces and Parts of BC.  Corporate City of London CANADA is the "owner" and HER MAJESTY THE QUEEN is the corporation sole.Meanwhile I'm French royalty and my cousin's men don't like me too much in Acadia.

In reply to by Deathrips

taketheredpill Fri, 09/15/2017 - 15:25 Permalink

Central Banks are painted into a corner by a debt overhang they have created.  Excessive debt has rendered (normal) Monetary Policy impotent with the only sustainable solution being the elimination of the debt.  Taking a break from fighting the problem (with even more debt) doesn't get rid of the problem.Like the expression "when you find yourself in a hole, stop digging", all this does it put down the shovel. 

east of eden taketheredpill Fri, 09/15/2017 - 16:43 Permalink

Well, it is interesting that this came out of the BOC. FIrst off, Canada did not do any QE, so from at least that persepctive, it is the Fed, BOJ, ECB and SNB that are the most at risk from falling asset prices, with Japan and Switzerland leading the way. Yes, the government did authroize CMHC to buy out 75 Billion CAD of mortgages from the private banks, but in the entire scheme of things that was a yawn.Personally, what I have noticed is that somehow, from somewhere, there has been a marked pickup in GDP growth, at least in Canada, possibly in Germany. The real economy is trying to emerge from under 100 feet of slime poured on it by the CB'ers.  

In reply to by taketheredpill

Reichstag Fire Dept. east of eden Fri, 09/15/2017 - 18:11 Permalink

@EoE...I gave you the +1 because you are not wrong. However, there is one point that you may be interested in...The BoC is NOT a privately owned Central Bank! They are a Public Bank, owned by Canada and controlled by Parliament. (and, yes, I'm aware of HRH The Queen of the Realms involvement).Why is this important? Because at anytime the BoC could go back to acting in the best interests of the Canadian people...they are just choosing to act like a private CB...since 1974.Is the BoC down stream of the Her Majesty co-opted? Yes, of course. Pierre Elliot Trudeau (our current PM's father) sold us out to the Bank for International Settlements in 1974...the Queen was less than amused. At that time, Canada, began to borrow directly from the BIS rather than issue our own debt to ourselves. Her Majesty's private business opportunity, owning the debt of a big piece of her Realm was ruined.I'm going to say it again: Former PM, PET, chose to go in debt to the BIS (and PAY intrest) rather than go in debt to ourselves (and collect interest) as we had been doing up until that time. The first Food Bank opened in Canada 6 months later...coincidence??Nevertheless, I'm not surprised the BoC made an announcement like this first. They are in a position to be a leader due to the aforementioned condition of ownership. The real question is why would they do it? Could it be that they are in a position to bail themselves out from the BIS? Buy out the Canadian National Debt from the BIS and make it internally owned again? Yes, it is a possibility! And why wouldn't you? With the opportunity to collect interest payments higher than zero and hold that control over your destiny yourselves??I'd say it's you best indicator that PET's son, PM Justin Trudeau, is not going to win a second term and that the BoC expects a break in the US$ hegemony currently plaguing planet Earth. The BoC is circling the wagons. Perhaps, in an economic collapse, they will attempt to snatch Canadian assets pledged as collateral to the BIS rather than lose them?I think, yes.I know my interest is piqued! 

In reply to by east of eden

Batman11 Fri, 09/15/2017 - 16:41 Permalink

Learn more in 15 mins about financial stability than any Central Banker. bankers just make it look hard. Send the FED the link and put them out of their misery, it's not hard. graph highlights unproductive lending in the US economy, 1929 and 2008 stick out like sore thumbs.The FED are making fools of themselves and they will be a laughing stock at the BIS.The BIS use the credit-to-GDP ratio for a reason, look how easy it is. 

U4 eee aaa Fri, 09/15/2017 - 15:51 Permalink

This is great. I'm glad they finally have the courage to call themselves incompetent

I guess since all the big suckers are getting out (the hedge funds) of the game and not just the little suckers, they are finally realizing the game is broken

In.Sip.ient Fri, 09/15/2017 - 16:12 Permalink

Central Bankers may be deservedly disreputable,but they do know they have competition now. The BoC is in a sensitive position there, in thatthe consequences of failing to compete would beobvious and pretty dramatic.  Other CBs are alsogetting the picture. In a fight for survival, do you really think the DOWor the 10 year will be that important to them??? 

Catullus Fri, 09/15/2017 - 16:56 Permalink

My bank account should be continually monitored to read $1,000,000,000. Adjustments should be made for temporal changes in my consumptive activity

bluskyes Fri, 09/15/2017 - 17:51 Permalink

Bank of Canada's charter remains unchanged. Provide interest free loans to government for infrastructure projects.They have been operating outside of scope since trudeau sr's interference in the 70s

pitz Fri, 09/15/2017 - 18:44 Permalink

The Bank of Canada is making excuses for the fact that they can't hit their inflation target of 2% without cutting interest rates to zero, and probably quite deeply into negative given that Canadian housing is crashing. They can try negotiating a deal with the government to lower the mandate to 1.5%, but its really not going to solve the deflation problem in Canada.

fulliautomatix Fri, 09/15/2017 - 21:05 Permalink

meh - give it a go...Accept that the mandate is not to control the market - doing the impossible or stupid is no legal order.Acknowledge that they are one part of a complex system - a simple solution requiring one part of a complex system to do all the work of fixing the problem(s) is unilikely to work. Again, the chioce between stupid and impossible is not one you want to make.What part of this complex system are they? What do they do? Well, their positioning is at the head of a national hierarchy of banks and the representative of the nation's or people's bank (commonwealth might be a better description), in a [global cabal].The positioning of a leader in a hierarchy is most often to do with information channels converging - the CB is in a position to know what is going on with all the banks, to a greater or lesser degree (I know all this varies with the Law in its different jurisdiction and I'll touch on that later). The mandate of the CB, therefore, is to determine where and when problems arise, what the nature of the problem is, in order to determine the cause and optimal solution. Data acquisition and inforrmation processing is their gig. The discipline of accurate reporting needs to be adhered to and the consequences of faulty analysis and synthesis understood and allowed for - risk management of solution implementation would form part of their duties. None of this requires that the CB be able to print money, nor borrow it from the people "for their benefit".So why have a bank do this stuff - couldn't this be done by a committee or .gov department (vomit)? Relationships matter - the job of a banker, largely, is to NOT give all your financial data that they are cognisant of to other parties: this is just part of the security protocol that people who store large amounts of gold follow, for blindinlgy obvious reasons. Asking bankers to fail in this primary attribute puts them in an immpossible position, it erodes the trust that is required between themselves and their customers. A CB is there to reassure both the customers and the banks that the information divulged and analysed is of import only at the structural level and cannot be used to further political or financial ambitions of parties quite willing to act outside the law - i.e. .gov. None of this works if the legislature is corrupt or the legislation impossible (and economically unviable legislation meets the definition of "impossible" here) to enact. Part of the greater system - the fix requires an awful lot of repealing of law, re-instatement of old law (e.g. Glass-Steagal), and the prosectution of people for crimes that are known to have taken place but have been deemed to politically sensitive to process. The law is another part of the system that has taken a beating in the credibility stakes, it just doesn't like to talk about it as a problem. You can see why it is usual to go to war - so much easier. The problem for the west now is that its populace knows about nukes and war and is unwilling to put its life on the line for the people who got them into this mess in the first place - crooks who are deemed etc. It might be that we have the skills in our leadership and resources in the population to effect a good solution (better good now than perfect never, too), or at least one that doesn't involve killing a very large number of people and the infliction of pain and grief on many more. Maybe not.

Radical Marijuana Sat, 09/16/2017 - 11:48 Permalink

Canada was never not under the control of the Bank of England, i.e., the Rothschilds. Moreover, since 1974 (see videos linked below for details), Canada agreed to the "Washington Consensus" to stop properly using the Bank of Canada, instead of doing whatever the international bankers, primarily through the Bank of International Settlements, told Canada to do. Canada was always a component of Globalized Neolithic Civilization, and always integrated into the overall systems of the Anglo-American (Zionist) Empire. The most important background fact regarding Canada is that still has a relatively large reserve of natural resources available to continue to be strip-mined, compared to its population. Therefore, Canada can sustain making more "money" out of nothing as debts in order to "pay" for strip-mining those resources, as the foundation of the Canadian economy. Hence, Canada, from every possible perspective, is relatively well-off, and relatively likely to remain so, compared to most other places in the world. However, Canada still necessarily participates in Globalized Neolithic Civilization, albeit in a "Canadian Way." Canadian Identity is primarily based upon the territory on the geography of planet Earth that is perceived by human beings as "Canada." However, that geographical territory existed long before the country called "Canada," and would probably exist long after there is no such country anymore. The secondary meaning of the Canadian Identity are the psychological and political characteristics of the people who are living in the physical territory they call "Canada." That secondary meaning of the Canadian Identity was the result of thousands of years of the history of Neolithic Civilization, which spread out its psychological and political characteristics from where it mostly originated in the Middle Eastern areas, such as Egypt and Mesopotamia, through the history of Europe, and then sailed to North America, to create colonies. The original Canadian Identity of the first immigrants, who had lived in North America for tens of thousands of years before the European invasions, was mostly wiped out, and the survivors of that assimilated into the Neolithic Civilization systems that were brought by the French and British, etc. ... There is barely any reality remaining to any original Canadian Identity of the survivors of those genocides and assimilations, due to the degree the survivors were almost totally forced to assimilate into the dominate psychological and political systems that the European invasions which established colonies made and maintained. (Similarly, the original Viking colonies in Canada were totally wiped out, and so, those no longer exist.) For a while, the new Canadian Identities of the French and British colonies were relatively coherent cultures, regarding which one could say that those were different Canadian Identities. However, those have subsequently been deluged by invasions of immigrants from all over the world, such that there is barely any significant meaning remaining to refer to as "the" Canadian Identity. About the only thing that "Canadians" still universally share is the Canadian monetary system. However, that system is almost totally integrated into a globalized system, such that referring to "Canadian money" is mostly another misleading symbol, asserted within the context of superficial analyses. The background to the developments of Canadian civilization were the ways that natural selection was internalized as human intelligence, and then that intelligence was applied to the most important selection pressures, which were other groups of people. That resulted in the history of warfare, which was organized crime on larger and larger scales, based upon backing up deceits with destructions. The surviving War Kings made the sovereign states, and those were the source of the original French and British colonies in North America. Those colonies were miniature versions of the social pyramid systems that originally developed in the Middle Eastern and European areas. Human beings and civilization operate as entropic pumps of environmental energy flows, which necessarily match the principles and methods of organized crime, because the death controls in general, and the murder systems in particular, are the central controls of everything else. However, the nature of those controls drive intense paradoxes, which manifest as sets of consistent contradictions, because the most socially successful murder systems are the most deceitful and treacherous, while around that success there accrete layers of controlled opposition groups, such as the publicly significant religions and ideologies, which agree to stay within the same frame of reference of false fundamental dichotomies and the related impossible ideals, originally developed to enable professional hypocrites to operate their systems of organized lies and robberies, in ways whereby the biggest and best organized gangs of criminals were able to deny that they are actually doing that. The long history of being able to back up lies with violence, becoming more sophisticated and integrated systems of legalized lies, backed by legalized violence, was the primary theme of the development of the Canadian Identity as psychological and political manifestations. The most important of those have become the ways that the public government of Canada enforces the frauds by private banks, which are ways that Canadian money participates in a globalized privatization of the public monetary and taxation systems. As information became more important than power, the sovereign states set up by the surviving War Kings were more and more controlled by the Fraud Kings, who were the international bankers, the best organized gangsters, the banksters, that control the biggest forms of organized crime, which are governments. Civilization developed as systems of more or less organized lies operating robberies, and those have become the symbolic robberies achieved through public governments enforcing frauds by private banks. Therefore, the primary psychological and political manifestations of the Canadian Identity are the public presentations of the best available professional liars and immaculate hypocrites, who have adapted to live inside of systems based upon enforcing frauds. From the psychological and political perspectives, there is almost nothing else but the central core of organized crime, the bankster dominated governments, surrounded by layers of controlled opposition groups, all of which stay within taking almost completely for granted the dualities of false fundamental dichotomies, and the related impossible ideals. Since Neolithic Civilization was based upon enforcing frauds, so too is the Canadian Identity the result of the European invasions of the geographical area called "Canada." Subsequently, the invasive immigrations from all over the world have mixed up the Canadian Identity to the point where there is no longer any coherent Canadian Identity. About the only thing that everyone continues to share is the Canadian money. However, that Canadian money is a system wherein money is measurement backed by murder (i.e., the debt controls depend upon the death controls), which combined money/murder system is operated by professional hypocrites, which do not admit and address the ways that public money supplies are created out of nothing as debts, while those frauds are enforced by the powers of the government, while that is integrated into globalized systems based upon overall similar ways that frauds are enforced. The original Canadian Identity was mostly colonialism, (now degenerating into neofeudalism.) The overall trends of globalized privatization have been making more and more of a mockery out of any residual Canadian Identity. Since Canada has a relative abundance of natural resources available to be strip-mined, compared to the size of the Canadian population, Canada is one of the few countries in the world left where Neolithic Civilization continues to appear to make some sense, at least in the short to medium terms. However, the bigger picture is that Neolithic Civilization has become runaway criminal insanities, based upon the excessive successfulness of controlling that civilization through integrated systems of legalized lies, backed by legalized violence. That excessive successfulness of controlling civilization through applications of the principles and methods of organized crime is more and more resulting in a criminally insane civilization. Since Neolithic Civilization was always based upon enforcing frauds, so too is the Canadian Identity. It is difficult to disentangle the ways that being able to successfully enforce frauds drives psychological and political systems to have inverted and perverted relationships to the laws of nature. While the physical territory of Canada exists according the the laws of nature, the psychological and political manifestations of the laws of nature through human beings and civilization results in those becoming triumphant organized crime, which is most triumphant by becoming the most dishonest it can possibly be. The only connections between the laws of nature and the laws of men are the abilities to back up lies with violence, through the development of integrated systems of legalized lies, backed by legalized violence, whereby governments became the biggest forms of organized crime, controlled by the best organized gangs of criminals. Those systems are based upon being able to enforce frauds, in ways that drive the vast majority of people, who have adapted to live inside those systems, for generation after generation, to develop attitudes based upon the maximum possible willful blindness towards the principle of the conservation of energy, along with the maximum possible absurdly backward misunderstanding of the concept of entropy. Since Neolithic Civilization, and then Canadian civilization, were based upon being able to back up lies with violence, the degree to which the Canadian Identity is promoted by professional hypocrites can barely be exaggerated: the central characteristic of Canadian Identity is professional hypocrisy. P.S. Supreme Court of Canada Dismisses Constitutional Bank of Canada Case, Claiming It Is a Political Matter May 31, 2017 – After nearly 5.5 years of contentious litigation between the Committee On Monetary and Economic Reform (COMER) and the Government of Canada involving three separate Federal Court and two additional Federal Court of Appeal hearings resulting in contrary decisions, on May 4, 2017, the Supreme Court of Canada dismissed COMER’s “leave” (permission to appeal) application from the second judgment of the Federal Court of Appeal. OF COURSE, THE CANADIAN MASS MEDIA CONTINUED TO DELIBERATELY IGNORE IT. Links to some of previous history of the case: Committee for Monetary and Economic Reform (’COMER’), et al. v. Her Majesty the Queen, et al. Le Peuple vs la Banque du Canada - The People vs. The Bank of Canada The Case Against The Bank Of Canada The Case to “Reinstate” the Bank of Canada Rocco Galati and the lawsuit against the Bank of Canada Mel Hurtig: The Truth About Canada OH CANADA, OUR BOUGHT AND SOLD OUT LAND THE CRIME OF THE CANADIAN BANKING SYSTEM - Bill Abram! Perpetual Debt: Bank of Canada & why we should use it Even a 12-Year Old Knows the Truth About Public Banking VICTORY FOR THE WORLD v2    P.P.S. Canadian "legalization" story, 2015 ... ???"Legalization"  is feeding a runaway fascist plutocracy,as well as also feeding an increased fascist police state.The 'War on Marijuana' is actually going to get WAY WORSEas far as the old core, Canadian cannabis community goes! THERE IS NO REASONABLE HOPE THAT THE STRIP-MINING"PAID" FOR BY MONEY MADE OUT OF NOTHING AS DEBTSIS GOING TO STOP, INSTEAD OF GET WAY, WAY WORSE!!! The article was supposed to be about "a watershed moment in monetary policy - which awkwardly was missed by almost everyone." However, the majority of Canadians are even more complacent political idiots than most of the other people in the world. The vast majority of Canadians are NOT interested in how the monetary and taxation systems actually work. One of the recent illustrations of that were what happened after the financial crises in 2008. The government of Canada, by various means, transferred about $125 billion to bail out big Canadian banks and mortgage companies. Those events barely made any news, and were NOT subsequent election issues, despite that the budget of the government of Canada had suddenly changed from supposed to be announcing a little surplus, to announcing about an increase to the Federal public debt of about $50 billion.Globalized Neolithic Civilization, of course including Canada, is too terminally sick and insane to recover from the degree to which that has become to. The overall trends are that the ruling classes are increasingly psychotic psychopaths, while those they rule over match that by becoming increasingly incompetent political idiots. It is NOT possible to break the vicious feedback spirals of the funding of the political processes. It is NOT possible to overcome the degree to which the majority of Canadian have been successfully brainwashed to believe in the banksters' bullshit by their schools and mass media.After spending the past 32 years working on the potential of the Canadian Political Contribution Tax Credit, which I continue to slightly do through Canadian Electoral District Associations, I have always found that the most consistent theme has been THE MORE I LEARNED, THE WORSE THAT GOT. While it is relatively easy to come up with some facile list of political miracles that could be "solutions" for the problems that Civilization is almost totally based on integrated systems of legalized lies, backed by legalized violence, there are NO practical ways to implement any such series of political miracles.The ONLY things that any changes in the mandate of the Bank of Canada would do would make it WORSE. All of the other theoretically better alternatives are NOT going to happen. By and large, almost all Canadians are happy to continue to participate in the strip-mining of Canadian natural resources. Similarly, most Canadians appear content to watch the Canadian population grow at about exponential rate, due to apparently endless immigration, which is promoted by the current Canadian Minister of Finance as something which should more than triple the Canadian population by 2100.Whereas the history of the USA was interesting due to the times when the international bankers were defeated, although that has not happened again more more than a Century, the history of Canada was always totally pathetic, due to the degree that the Rothschild dominated Bank of England originally controlled Canada, and to the degree that the Bank of Canada has obeyed the international bankers' orders, such as issued by the Bank of International Settlements, since 1974. For a while, the Bank of Canada did enable funding Canadian infrastructure projects, and Canadian social systems, doing so was killed by Prime Minister Trudeau I in 1974, and certainly shows no signs of ever being even partially revived under the current Prime Minister Trudeau II.Of course, as long as there are enough Canadian natural resources left to continue to strip-mine at an exponentially increasing rate, then the Canadian economy and population can continue to grow at a similar exponential rate. Meanwhile, pretty well nobody is interested in the issues regarding what happens after there are no longer enough natural resources left to continue to strip-mine at an exponentially increasing rate, while having previously done so enabled that exponential growth of the economy and population to spectacularly overshoot whatever might have been more "sustainable." Of course, "sustainable" appears to be quite relative to those who enjoy being able to strip-mine Canada's natural resources as fast as possible ... Certainly, it continues to be politically impossible to have any relatively rational public debates about the longer term consequences of promoting endless exponential growth of the economy and the population it supports. After all, it was always the short to medium term triumphs of being able to enforce frauds which actually determined what really happened, and still do ... Canada - Reflections On An Economic ExperimentAt the present time, and for the foreseeable future, Canadian economic experiments, as well as any innovations which the Bank of Canada may try, continue to be judged from the perspective of the richer, older, people who benefit the most from exponentially increased strip-mining, "paid" for by "money" made out of nothing as debts. Whatever that means for younger, poorer, people, does not matter much, while the fate of future generations that will be born into the situation when exponential growth has spectacularly overshot whatever might have otherwise been more "sustainable" does not matter. Rather, the entire political economy based on being able to enforce frauds, despite those becoming about exponentially more fraudulent, continues to be able to publicly present itself as being "productive," as if what it was doing was "good" rather than based on actually having maximized maliciousness.

fulliautomatix Radical Marijuana Sat, 09/16/2017 - 19:54 Permalink

RM, love the fact that you write here - you bring a perspective to light that is extremely rarely encountered, and valuable for the fact that the internal logic of the argument is both simple and easily observable. One issue I have with a [negativity] based perspective, aside from the obviously detrimental effects of using such, is that the evidence would tend to show that we, as a race, do not do other than build and grow. A single person cannot build a helicopter  - just too many years of production and development for a single person to accomplish in a lifetime - yet there are thousands of the bloody things, they're ubiquitous. Communications tech only dreamed of in my parents childhod, ubiquitous. Vehicular transport available globally, at a value of an order of magnitude greater than 100 years ago, in terms of efficiency (bang for buck), reliability, and time taken to complete - that's three orders of magnitude, or about a thousand times better (feel free to argue my numbers - i'm not great at maths). If it is the negative power plays that matter, where does the all the positive come from?

In reply to by Radical Marijuana

Radical Marijuana fulliautomatix Sat, 09/16/2017 - 22:06 Permalink

General integrative capacities, such as human intelligence, can BOTH be used to co-operate better, as well as to compete better. The underlying problems are due to the practical impossibilities of people agreeing upon the necessary death control systems. Rather, those have been driven to become as deceitful and treacherous as possible.Of course, there must be life first, before there can be death. Hence, the existence of life comes as a package deal. Clearly, the choices made during reproduction have a profound effect upon the longer term development of any species, including human beings. But nevertheless, there continues to be the flip sides of chronic political problems inherent in the nature of life, which are due to human beings living as reproducing gangs of robbers.Those paradoxes play through the various possible "units of survival." Consider how soldiers are often deliberately trained to develop strong "brothers-in-arms" attitudes. Clearly, within any military unit, cooperation makes that a unit which is more likely to be able to survive than one which can not cooperate as well. But nevertheless, as the oldest book on The Art Of Wars says, "success in war is based on deception," and so, "spies are the most important soldiers."In my opinion, the most serious political problems flow from the ways that people can NOT agree on some necessary death control systems, which then drives the actually existing murder systems to become as malicious as possible. Furthermore, that then is the basis for making and maintaining money systems based on those murder systems, such that being able to back up deceits with destruction transforms to become enforcing frauds, as the War Kings morphed into the Fraud Kings. Hence, the Bank of Canada is the Canadian King of Fraud.Since the dominate sociopolitical systems ARE based on enforcing frauds, those systems ARE operated by the best available professional hypocrites, and that includes the layers of controlled "opposition" groups just as much as the central core of banker dominated governments, such as the ways that the international bankers dominate the government of Canada. The degree to which the existing death control systems became murder systems that maximized maliciousness was also the related degree to which there are nothing but professional hypocrites to be found through the established systems, including throughout the layers of controlled "opposition" which surround the central core of the ways that the powers of public governments are primarily used to enforce frauds by private banks, and the big corporations that grew up around those big banks. Indeed, in the Canada the social facts with respect to those developments are even more extreme than in the USA, because the USA, once upon a time, a relatively long time ago, had some effective resistance against being dominated by the international bankers, while Canada never had any such effective resistance.What I often attempt to do is explain the ways in which the bogus "solutions" offered by the various controlled "opposition" groups are absurdly backwards. The intensifying paradoxes driven by the development of weapons of mass destruction are that those make it more and more theoretically imperative for people to develop ways to cooperate better with respect to the death control systems. However, due to thousands of years of the most socially successful murder systems becoming the most dishonest about themselves possible, there is almost NO genuine opposition which presents radical truths regarding the existing murder systems, and then follows that with recommendations for better murder systems.Doing so, in order that more people could genuinely cooperate better, is extremely problematic, because that would take series of intellectual scientific revolutions which enabled profound paradigm shifts in the public perception of the nature of the death control systems themselves. While it is absolutely impossible for the total human population to continue to enjoy endless exponential growth, there is barely the slightest public presence of any rational debates regarding how to cope with the inevitable end to such exponential growth.While it is obviously correct that there has been a tremendous increase in the abilities of some people to communicate, coordinate, and cooperate with each other. So far, it continues to be politically impossible for that to happen with respect to the imperatives that there must be some death control systems. Since the existing death controls back up the debt controls, the runaway debt insanities are set up to provoke runaway death insanities. The ONLY genuinely better resolutions of those problems would have to be based on profound paradigm shifts in the public perceptions of those death control systems, which then enabled more cooperation regarding the manifestation of those systems, including the related changes in the debt control systems.Of course, at the present time, such recommendations appear to be laughably ridiculous, while runaway death insanities seem far more probable than that enough people will sufficiently change the ways they think about the death control issues in order to change that outcome. Meanwhile, since Canada is one of the best off countries in the world, in terms of the ratio of natural resources available to be strip-mined at an exponential rate, compared to the size of the Canadian population, Canada is one of the countries which can still most indulge in the notions that exponential economic and overall population growth are still "productive" and "good" things to continue to do ...Canadians are relatively more able to continue to make "money" out of nothing as debts, in order to "pay" to strip-mine the natural resources of Canada, in order to enable the Canadian economy and population to continue to grow than most other people in most other places. In that context, Canadians are more able to be complacent political idiots regarding the problems driven by their government using its powers to enforce frauds by private banks, including that the Bank of Canada behaves in ways which are prima facie unconstitutional, while that situation is even more politically impossible to change in the Canadian context than in the context of other countries.It is more likely that there would be some series of political miracles to End the Fed in the USA than that the Bank of Canada would change in any ways which stopped it being dominated by the international bankers, such as through the Bank of International Settlements. Indeed, some of the reasons I tend to care just as much, or even more, about the American money/murder systems is that Canada usually follows slowly behind what the USA does.

In reply to by fulliautomatix

chickadee Fri, 09/15/2017 - 23:26 Permalink

The best mandate for a central bank of a nation with a large trade sector (like Canada) is to maintain a stable currency with respect to a trade-weighted basket of the currencies of its trading partners. This is what Singpore does, and it has served them well. Deliberately devaluing the currency through a near zero interest rate policy has only created an unsustainable bubble in certain asset prices such as Real Estate. Time will tell who will wear the blame for this when the Real Estate bubble explodes. In all fairness, it should be the central banker responsible for the policy.

pitz chickadee Fri, 09/15/2017 - 23:42 Permalink

Low interest rates tend to be associated with currency strengthening, not devaluation.  The market up-values a currency with a low interest rate to compensate for the low interest.  Its high interest rate currencies that tend to be in a state of devaluation.The US Fed could raise rates to 10%, and torrents of new USD$ would be required to pay the US Government's $20T debt. 

In reply to by chickadee