For those that have not followed me since 2005, allow me to say, I told them so. Back in 2009, I warned Inflation was coming with all this stimulation, and here it comes (in 2021).
Stats Canada thinks:
The Consumer Price Index (CPI) rose 4.1% on a year-over-year basis in August, the fastest pace since March 2003, up from a 3.7% gain in July. The increase in prices mainly stems from an accumulation of recent price pressures and from lower price levels in 2020. Excluding gasoline, the CPI rose 3.2% year over year.From Stats Canada Consumer Price Index, August 2021
This is the highest rate since before I started commenting in 2005? Something to note folks. Governments can’t keep printing money with impunity.
Gasoline is a major driver right now as can be seen when it is taken out of the calculations. Prices are rising, and you have Governments pumping money into the situation. What happens when that money stops? The other issue is you have a reticent workforce, who doesn’t really want to go back to their crappy jobs. Not a recipe for economic greatness.
What does the Bank of Canada think about this? Actually using their calculations we are only a little bit above their goals?
|lternative measures||May 2021||June 2021||July 2021||August 2021|
|Measure of core inflation based on a factor model, CPI-common (year-over-year percent change)2, 3, 4, 5||1.8||1.7||1.7||1.8|
|Measure of core inflation based on a weighted median approach, CPI-median (year-over-year percent change)2, 3, 6, 7||2.3||2.3||2.5||2.6|
|Measure of core inflation based on a trimmed mean approach, CPI-trim (year-over-year percent change)2, 3, 6, 8||2.7||2.7||3.1||3.3|
Additional Reads From Stats Canada
- The Consumer Price Index and COVID-19: A One-Year Retrospective a useful read to get some perspective on the possible whiplash inflation that may come from all the stimulation forced into the economy.
Previous Rants About Inflation
- I talked about this in April of 2021, didn’t think it was going to get this bad, this fast.
- Inflation at 2011 levels ? OK, so I have even written this title before? Yes, I need more imagination.
- Bank in 2017 Inflation Still Under 2 Pct (for now) so things were OK back then too.
- Previously I have written a lot about inflation, here is a small taste. Note the snappy titles.
- The year was 2016
- Shocking Electricity Price in August (CPI Canada)
- Electricity Prices Continue to Sizzle in July
- Zap! Electricity Prices Pushes Inflation in June
- Expensive Food and Shelter in April in Canada
- Good Food Still Is Not Cheap in Canada (Inflation for March)
- Food Prices Continue to Rise for February
- Veggies up 18.2 pct in Canada
- Now for 2015
- The year was 2016
And that is just scratching the surface.