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 is (in 2021).
Stats Canada thinks:
Prices rose year over year in every major component in September, with transportation prices (+9.1%) contributing the most to the all-items increase. Higher shelter (+4.8%) and food prices (+3.9%) also contributed to the growth in the all-items CPI for September.From Consumer Price Index, September 2021
This is the highest rate since before I started commenting in 2005? Sounds like this is no longer a bump in the road, it might be a more elongated period of price increases. The Bank of Canada thinks this is going to last more than just a couple of months. Their statement about Interest rates is they may be going up sooner than expected. Interest rates are their only tool to slow inflation (aside from not printing too much money).
In reaction, the Bank of Canada announced the end of their Quantitative Easing program too.
… With the economy once again growing robustly, Governing Council judged that QE is no longer needed. This means we will stop growing our holdings of Government of Canada bonds….Tiff Macklem – Governor Ottawa, Ontario October 27, 2021
Their commentary about inflation is more telling.
In Canada, inflation is currently running at about 4½ percent. We now expect it will rise to close to 5 percent by the end of this year, before coming back down to around the 2 percent target by the end of next year.Tiff Macklem – Governor Ottawa, Ontario October 27, 2021
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
- Looks like COVID leads to Inflation in August 2021 ?
- 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.