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Politics and its Discontents: The Mighty (Pol)Oz Speaks

But his message is not being well-received. No, not at all. Recommend this Post

Cowichan Conversations: Oil and Gas Investors Get Warning–Pension Funds at Risk

Blaise Salmon

Thanks to Mark Carney, former governor of the Bank of Canada and current governor of the Bank of England, for his warning that the “vast majority” of the world’s oil and coal reserves will never be used due to advancing climate change.

The value of these reserves is factored into the share prices of the world’s fossil fuel companies, so this represents a significant risk to pension funds and other investors. Yet most investors seem unaware of the risk. The parallels with the subprime mortgage meltdown of 2008 are striking.

Central bank governors are very careful (Read more…)

The Progressive Economics Forum: Bank of Canada, Exports, and LMI

Much has been made about Stephen Poloz’s decision to abandon ‘forward guidance’ in Bank of Canada rate setting announcements for the time being. Critics bemoan the loss of direction from the Bank. But Poloz’s comments yesterday were chock full of guidance on how the Bank sees Canada’s economic situation.

Having been disappointed by the failure of Canada’s export sector to resume investment or show any signs of life, researchers at the Bank investigated the performance of 2,000 product categories, and found that about 500 of those had very nearly been wiped out following the 2008 – 2009 recession. Further investigation (Read more…)

The Progressive Economics Forum: The Odd Conversion of Mainstream Economists to the Virtues of Depreciation

The long-overdue depreciation of Canada’s currency is gathering steam. The dollar lost 8 cents against its U.S. counterpart, in fits and starts, over 2013. It’s lost another 2 cents since the start of 2014, and negative sentiment about the currency is accumulating among financial analysts and traders.

Indeed, once the expectation that the loonie will fall becomes entrenched among enough of the red-suspendered trading set, that belief quickly becomes self-fulfilling. Speculators who think the loonie will fall, sell or short the asset to take advantage of that fall, and this only accelerates the decline. So we can expect the (Read more…)

Political Eh-conomy: Myths of central banking

The Bank of Canada has been in the news lately – or, more precisely, the news has been full of other well-placed people telling our central bankers what to do. In an interview on CTV this past weekend, Jim Flaherty made comments (later retracted) that Canada’s central bank will be pressured to raise interest rates sooner rather than later. On Tuesday, the influential, pro-business Conference Board of Canada also came out with some advice. A Globe and Mail editorial written its chief economist suggested, somewhat surprisingly, that the Bank should target a higher level of inflation, up to 4% from (Read more…)

The Progressive Economics Forum: A Trillion Dollar Coin for Canada?

Arun here…breaking radio silence to share with you a thought-provoking piece by Larry Kazdan, a graduate of York University in sociology and history, and currently a Council Member with the World Federalist Movement-Canada, an organization that monitors developments at the United Nations and advocates for more effective global governance.

Our friend and fellow blogger Keith Newman recently wrote some words that set up Larry’s piece nicely so rather than trying to reinvent the wheel, I will let Keith introduce Larry’s work and then urge readers to read the piece in full.

****************************** The trillion dollar coin solution for the US (Read more…)

The Progressive Economics Forum: Rebutting Raganomics

Today, I had the following commentary posted on The Globe and Mail’s Economy Lab:

The loonie is overvalued and the Bank of Canada has room to act

On Tuesday, Christopher Ragan characterized the notion of an overvalued Canadian dollar as a “seductive myth” that the Bank of Canada should not act to address. I have made the case that we should broaden our central bank’s mandate to include managing the exchange rate and welcome the opportunity to advance this important policy debate.

Significantly, Ragan agrees that currency “depreciation would spur Canadian exports and provide a much-needed stimulus to (Read more…)

The Progressive Economics Forum: Statistics Canada Resuscitates Dead Money

Interestingly, the day after the new Bank of Canada Governor gave a speech distancing himself from his predecessor’s “dead money” comments, Statistics Canada released a significant downward revision to the usual measure of corporate cash accumulation.

The cash holdings of private non-financial corporations reached $594 billion in the fourth quarter of 2012, so I was curious to see if they would crack $600 billion in the first quarter of this year. To my surprise, today’s National Balance Sheet Accounts indicate a corporate cash hoard of “only” $535 billion in the fourth quarter and $544 billion in the first quarter.

I (Read more…)

The Canadian Progressive: When a satirical $90,000 Sen. Duffy bill enraged the Bank of Canada

By: Obert Madondo

Satirical Duffy $90,000 Bill

Veteran B.C. newspaper satirist Dan Murphy engaged in a little good old-fashioned Canadian political satire when he created a fake $90,000 bill starring scandal-plagued Sen. Mike Duffy. The Bank of Canada wants us to believe a serious crime has been committed here, according to Times Colonist.

The video below explains the satirical bill’s key ingredients: fake high-tech security features, bacon scent, a singing and burping Duffy and a winking hologram of Nigel Wright, PM Stephen Harper’s former chief of staff.

How does the Bank of Canada respond? It dispatched a threatening email to (Read more…)

Politics and Entertainment: why focus on inflation when there is little evidence of a inflationary trend while there are abundant statistics revealing just how bad things are for both the unemployed and the underemployed.

One of the official goals of central bank monetary policy is supposed to be low employment fostered through what is known as an expansionary policy by lowering interest rates with the hope that low credit rates will encourage businesses to expand their operations by way of capital investment in hard assets or capital expenditures of some sort and new hirings. We’ve had this policy in place for quite some time now, and yet employment really hasn’t improved one iota. If anything it’s merely gotten worse along with – because of the incentive of low interest rates –  an astounding increase in personal debt to the unseemly tune (Read more…)

The Progressive Economics Forum: Polozogistics: Nine Thoughts About the Choice of the New Bank of Canada Governor


1. He’s Number Two: Stephen Poloz was widely acknowledged in economic and political circles as the second-best choice for the top job at the Bank of Canada. So the surprise was not that he was chosen. The surprise was, Why Not Tiff Macklem? Will someone please find out and tell the rest of us?

2. Doctrinaire [or not?] on Inflation Targeting: He thinks it’s “sacrosanct.” Having studied with monetary policy guru David Laidler at the University of Western Ontario, and been part of the Bank of Canada team that brought inflation targeting to a neighbourhood near (Read more…)

The Progressive Economics Forum: A Weak Week for Canada’s Economy

On Tuesday, Statistics Canada reported that job vacancies have fallen to the lowest level recorded since it began collecting these figures two years ago.

On Wednesday, the Bank of Canada projected growth of just 1.5% for this year.

On Thursday, Statistics Canada reported that the number of Canadians receiving Employment Insurance (EI) benefits edged down in February. Meanwhile, the Labour Force Survey indicates that unemployment edged up in February and grew much worse in March.

The combination of rising unemployment and falling EI receipts reduced the proportion of unemployed Canadians receiving benefits to 39.7 per cent in February (Read more…).e. 528,940 beneficiaries out of 1,332,600 unemployed workers). This reduction in EI coverage comes on the heels of new EI restrictions that make it harder for jobless Canadians to access benefits.

This morning, Statistics Canada reported flat wholesale trade and low inflation, providing further evidence of a subdued Canadian economy. Federal . . . → Read More: The Progressive Economics Forum: A Weak Week for Canada’s Economy

The Ranting Canadian: Wife of Bank of England governor turns herself into a guillotine-magnet

Wife of Bank of England governor turns herself into a guillotine-magnet:

Diana Carney – wife of the new Bank of England governor (and former Bank of Canada head) – had a Mary Antoinette moment on March 25, 2013 when she whined on Twitter that she and her husband were having trouble finding suitable housing in London.

British taxpayers are giving her husband Mark Carney an annual salary of £624,000 (more than $959,000 CAD) plus an annual housing allowance of £250,000 (more than $384,000 CAD). No doubt he is also getting a bunch of other benefits and privileges. This is

. . . → Read More: The Ranting Canadian: Wife of Bank of England governor turns herself into a guillotine-magnet

The Progressive Economics Forum: Breaking The Taboo on Monetizing Deficits

In a very long and fascinating speech which has been amplified by Martin Wolf in the FT, Lord Adair Turner seeks to break the taboo on discussion of the potential ability of central banks to monetize fiscal deficits. His argument boils down to a political economic one … Some monetization might be useful in certain circumstances such as in Japan over the recent past, but there is a clear danger of going too far and stoking inflation if the central bank becomes too subject to political pressures.

He makes the interesting point that QE in the US and the UK

. . . → Read More: The Progressive Economics Forum: Breaking The Taboo on Monetizing Deficits

The Canadian Progressive: Black hockey players, aboriginals, gays nixed from Canada’s new bills

“The Bank of Canada considered celebrating gay marriages, black hockey players, and turban-wearing RCMP officers on its new plastic bank notes” By Obert Madondo | The Canadian Progressive, Feb. 11, 2013: And so the Harper Conservative-inspired whitewashing of Canada continues. Last summer, we learned that the Bank of Canada had nixed the image of an Asian-looking female scientist from READ MORE

The Canadian Progressive: Canadian Labour Congress says corporations hoarding cash, paying fat compensation to CEOs

CLC report: Corporate Tax Freedom Day is January 30 – Big businesses hoard cash from tax giveaways, not investing in jobs by Canadian Labour Congress | Jan. 29, 2013 OTTAWA – A research study by the Canadian Labour Congress shows that CEOs in Canada could be dancing in their suites to celebrate Corporate Tax Freedom Day on READ MORE

The Progressive Economics Forum: Labour Market still weak: Bank of Canada

The Bank of Canada released their January 2013 Monetary Policy Report. Of note, the Bank downgraded its growth expectation for 2013 to 2.0% from 2.3%, and expects the Canadian economy will not reach full potential until late 2014.

Several key points in the January MPR reinforce what progressive economists have been saying about the Canadian labour market.

Since 2010, more than 27% of part-time workers have been “involuntary part-timers”. That means that they are underemployed, working part-time but wanting full-time employment. This graph shows that there has been very little improvement on that front.

Wage increases have been

. . . → Read More: The Progressive Economics Forum: Labour Market still weak: Bank of Canada

THE FIFTH COLUMN: If a Tree Falls in the Forest is it not Canadian if it Originated in Norway

I remember way back when when I was in school, not back in the days of the one room schoolhouse but back in the days of the eight classroom schoolhouse with one class for each grade when everyone walked to school, learning about maple trees and maple leaves. We learned about the Norway Maple, and that it’s name came from it’s origins in Norway but I do not recall learning that it was an evil

The Progressive Economics Forum: What Does the Bank of Canada Do?

The Board of Directors of the Bank of Canada have retained Odgers Berndtson to seek a new Governor, and have placed an ad in the Globe and Mail, the Economist and La Presse.

The wording of the advertisement is questionable.

First, it states that “the Bank of Canada is the pre-eminent macro-economic institution in Canada.”


The Bank of Canada is undeniably important, but it has absolutely no role to play in fiscal policy which is entirely the responsibility of the Minister and Department of Finance.

Moreover, the inflation target which anchors monetary policy is set jointly by the

. . . → Read More: The Progressive Economics Forum: What Does the Bank of Canada Do?

Accidental Deliberations: Deep thought

Much as I generally promote open access to information, I’m starting to come around to the idea that the Cons should feel free to apply a “national security” exemption to pretty much any information about their decision-making. After all, if anybody around the globe knew exactly what they’re dealing with in the Cons, Canada would all too likely be a second-rate protectorate of Burundi within a week.

Accidental Deliberations: On transferable skills

Stephen Gordon is at least moderately panicked about the less-than-surprising news that some Lib operatives tried to recruit Mark Carney to serve as the party’s national leader – and there may be worse to come. But I’ll argue that there’s far less to be concerned about than Gordon, Mike Moffatt and others are suggesting.

At the outset, I presume it’s fairly uncontroversial that we have numerous important positions of influence intended to be filled by experts motivated by the public good.

Gordon and Moffatt seem to place the Bank of Canada on a particularly high pedestal, which may be how

. . . → Read More: Accidental Deliberations: On transferable skills

Politics and Entertainment: This will be the Regime’s Primary Alibi followed by the EU crisis when the Canadian Economy Sinks into Recession

Canada faces near-recession if U.S. plunges over ‘cliff,’ Carney warns  “Carney warns of risk from U.S. Bank of Canada Governor Mark Carney has warned that a failure by U.S. politicians to reach a new budget agreement before time runs out would push Canada close to another recession… the bank warned that Canadi ans are still borrowing at a faster pace than their disposable income, making them more vulnerable if they lose their jobs or home prices tumble. The ratio of household debt to gross domestic product now stands at a record high 163 per cent, up from (Read more…) . . . → Read More: Politics and Entertainment: This will be the Regime’s Primary Alibi followed by the EU crisis when the Canadian Economy Sinks into Recession

Politics and Entertainment: Politics and Entertainment 2012-12-02 10:10:00

I support the lawsuit against the Bank Of Canada|Strikes meaningfully at the core of… #cdnpoli #cdnecon — Barry Cameron (@AppalledBC) December 2, 2012 . . . → Read More: Politics and Entertainment: Politics and Entertainment 2012-12-02 10:10:00

The Progressive Economics Forum: Mark Carney’s tenure and the state of monetary policy

Mark Carney’s tenure as Governor of the Bank of Canada overlaps some challenging economy history. Appointed in early 2008 just as the US housing bubble was popping, Carney took the helm in time for a financial crisis that brought the global economy to its knees. We are still living that history in terms of a [...] . . . → Read More: The Progressive Economics Forum: Mark Carney’s tenure and the state of monetary policy

The Progressive Economics Forum: Guest Blog: Selective Amnesia at Bank of Canada

The following is a guest blog from Marc Lavoie and Mario Seccareccia at the University of Ottawa:

In a speech delivered on October 4th to the Winnipeg Chamber of Commerce (see:, the senior deputy governor of the Bank of Canada, Tiff Macklen, has offered some self-congratulatory remarks, by arguing that the near-zero inflation policy pursued by the Bank under the leadership of John Crow had given rise to a healthy and more efficient labour market, with low unemployment rates. Senior deputy Governor Macklem has only one regret: labour productivity growth in Canada has been dismal

. . . → Read More: The Progressive Economics Forum: Guest Blog: Selective Amnesia at Bank of Canada