![]() Reduced consumption, lower future purchasing power, and devalued existing capital. The result can be wages rising substantially, but not enough to cover the cost of living. Not only are you not getting more purchasing power, but inflation is underreported. Higher wages might sound great, but if they’re higher due to the cost of living, the benefits are negative. We don’t roll back wages, and they can’t roll back prices once wages adjust. If high inflation drives wages higher, the inflation is now priced in. The executive warned wage increases aren’t transitory. “This is permanent, sustained inflation that has to be dealt with through monetary policy, and therefore we need rapid action this spring as a series of rate increases to address it,” said RBC CEO David McKay to Bloomberg News this week (Jan 11). RBC: Inflation Isn’t Transitory, Multiple Rate Hikes Needed SoonĬanada’s largest bank is the latest to urge the BoC to raise interest rates, and they did so with its top brass. ![]() It appears the banking system now sees the BoC as reckless, and has begun to distance themselves. The BoC should be supporting the banking system as one of its primary goals. However, they’ve warned consumers of the risk of buying a home at this particular time. Four of the “Big Six” banks have recently urged the Bank of Canada (BoC) to raise the overnight rate. The kings of Bay Street aren’t happy with Canada’s central bank, and they’re no longer holding back criticism. ![]()
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