{"id":28930,"date":"2017-12-16T17:24:27","date_gmt":"2017-12-16T22:24:27","guid":{"rendered":"http:\/\/olduvai.ca\/?p=28930"},"modified":"2017-12-16T17:24:27","modified_gmt":"2017-12-16T22:24:27","slug":"stephen-poloz-right-to-be-worried","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=28930","title":{"rendered":"Stephen Poloz Right To Be Worried"},"content":{"rendered":"
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Stephen Poloz Right To Be Worried<\/a><\/h3>\n<\/div>\n
\"Stephen<\/div>\n
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Bank of Canada governor Stephen Poloz cited numerous worries plaguing the economy during his speech to Toronto\u2019s financial elites yesterday at the prestigious Canadian Club. <\/span><\/p>\n

However, the title of Poloz\u2019s presentation, \u201cThree things keeping me awake at night\u201d seemed odd, given positive recent Canadian employment, GDP and other data. <\/span><\/p>\n

Poloz highlighted high personal debts, housing prices, cryptocurrencies and other causes for concern, along with actions that the BoC is taking to alleviate them. His implicit message was (as always) \u201cWe have things under control.\u201d <\/span><\/p>\n

But if that\u2019s all true, then Canada\u2019s central bank governor should be sleeping like a baby. So, what is really keeping Mr. Poloz up at night? Three possibilities come to mind.<\/span><\/p>\n

The Poloz Bubble<\/span><\/b><\/p>\n

Firstly, far from just a housing bubble, Canada\u2019s economy shows signs of being in the midst of an \u201ceverything bubble.\u201d Bitcoin, for example, <\/span>hovered near CDN $23,000 <\/a><\/span>this week. Stock and bond valuations are not far behind in their relative loftiness.<\/span><\/p>\n

Worse for Poloz, who took office four years ago, his fingerprints are all over those bubble-like levels. <\/span><\/p>\n

Canadian stock, bond and house prices were already at dizzying heights when <\/span>Stephen Harper hired Poloz<\/a><\/span>with the implicit expectation that he would juice up the economy, in preparation for what Canada\u2019s then-Prime Minister knew would be a tough upcoming election. <\/span><\/p>\n

Poloz didn\u2019t disappoint, promptly delivering a nice Benjamin Strong-styled \u201ccoup de whiskey\u201d to asset prices in the form of two interest rate cuts, which brought the BoC\u2019s policy rate down to just 0.50% during the ensuing months. <\/span><\/p>\n

Although Harper lost the election, loose BoC policy continues to provide the Canadian government with free money to borrow and spend as it wishes. <\/span><\/p>\n

More broadly, the Poloz BoC\u2019s current policy, like that of the US Federal Reserve, is to boost asset prices even higher in the hope that the resulting wealth effect will trickle down to spur economic activity among ordinary Canadians.<\/span><\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Stephen Poloz Right To Be Worried Bank of Canada governor Stephen Poloz cited numerous worries plaguing the economy during his speech to Toronto\u2019s financial elites yesterday at the prestigious Canadian Club. However, the title of Poloz\u2019s presentation, \u201cThree things keeping me awake at night\u201d seemed odd, given positive recent Canadian employment, GDP and other data. […]<\/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":[942,5185,1806,6315,2340,13228,6355,943,1138],"class_list":["post-28930","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-canada","tag-bond-market","tag-bubble","tag-canadian-economy","tag-housing-market","tag-peter-diekmeyer","tag-sprott-money","tag-stephen-poloz","tag-stock-market"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28930","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=28930"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28930\/revisions"}],"predecessor-version":[{"id":28931,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28930\/revisions\/28931"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=28930"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=28930"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=28930"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}