{"id":10135,"date":"2015-07-17T06:54:19","date_gmt":"2015-07-17T11:54:19","guid":{"rendered":"http:\/\/olduvai.ca\/?p=10135"},"modified":"2015-07-17T06:54:19","modified_gmt":"2015-07-17T11:54:19","slug":"stephen-polozs-zen-moment","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=10135","title":{"rendered":"Stephen Poloz\u2019s Zen Moment"},"content":{"rendered":"<p align=\"left\"><b><a href=\"https:\/\/mises.ca\/wp-content\/uploads\/2015\/07\/stephen-poloz4.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright size-medium wp-image-12128\" src=\"https:\/\/mises.ca\/wp-content\/uploads\/2015\/07\/stephen-poloz4-300x225.jpg\" alt=\"stephen-poloz4\" width=\"300\" height=\"225\" \/><\/a><\/b><\/p>\n<h3><span class=\"blue\"><a href=\"https:\/\/mises.ca\/posts\/blog\/stephen-poloz-zen\/\" target=\"_blank\">Stephen Poloz\u2019s Zen Moment<\/a><\/span><\/h3>\n<p align=\"left\">To cut or not to cut, that is the question. And fortunately for Bank of Canada Governor Stephen Poloz, it was a pretty easy question. A lagging US recovery, China\u2019s downturn, lower oil prices and \u201cbad weather\u201d all contributed to this interest rate cut. \u201cI wouldn\u2019t describe it as a close decision,\u201d<a href=\"http:\/\/www.bankofcanada.ca\/multimedia\/monetary-policy-report-press-conference-july-2015-video\/\">\u00a0he told the press,\u00a0<\/a>\u201cIt\u2019s a decision where we had a number of trade-offs on the table. It requires a lot of deliberation and a lot of inputs, not a mechanical decision. Not even close.\u201d But whereas Poloz admitted to feeling comfortable at the end of 2014, now there was a bunch of crap heading for the ceiling fan and that interest rate cut was Canada\u2019s only way of taking cover.<\/p>\n<p align=\"left\">Poloz is known for his metaphors but the above is mine. Poloz used the parable of the big oak tree to compare \u201canalysing vulnerability\u201d in the economy. The big oak tree is only a risk if there\u2019s a branch that could break off and fall into your neighbours house. In Poloz\u2019s mind, cutting interest rates must have been like sawing off that branch. He may have successfully migrated some future risk, but in doing so he didn\u2019t bother with any long-term consequences. He may have sawed off that branch so it wouldn\u2019t fall into the neighbours house, but by cutting without thinking ahead, the branch fell right into the neighbours house.<\/p>\n<p align=\"left\">I hope that\u2019s clear, because a lot of what the Bank of Canada says isn\u2019t. Poloz is a fan of<a class=\"western\" href=\"https:\/\/en.wikipedia.org\/wiki\/Fedspeak\">Greenspeak<\/a>\u00a0but sometimes we get moments of incoherent clarity such as: \u201cWhen other things are equal, a lower currency will be a stimulus to the economy.\u201d When asked if China\u2019s slow-down could affect Vancouver\u2019s housing market and potentially the broader economy, Poloz crept back to his Greenspeak with a definite \u201cI don\u2019t know\u201d and \u201cI won\u2019t speculate\u201d sprinkled on top.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stephen Poloz\u2019s Zen Moment To cut or not to cut, that is the question. And fortunately for Bank of Canada Governor Stephen Poloz, it was a pretty easy question. A lagging US recovery, China\u2019s downturn, lower oil prices and \u201cbad weather\u201d all contributed to this interest rate cut. \u201cI wouldn\u2019t describe it as a close [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[942,7340,103,122,305,430,1400,431,2127,7200,7341,7342,943],"class_list":["post-10135","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-canada","tag-boc","tag-canada","tag-central-bank","tag-federal-reserve","tag-interest-rate","tag-interest-rate-cut","tag-interest-rates","tag-interventionism","tag-mises-canada","tag-pei","tag-poloz","tag-stephen-poloz"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10135","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10135"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10135\/revisions"}],"predecessor-version":[{"id":10136,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10135\/revisions\/10136"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10135"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10135"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10135"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}