Inflation has started. It was announced on Tuesday that Canada's inflation rate for the last twelve months was 2.4%, the highest it has been in two years. Because the rising prices are on the unavoidables, housing, taxes, fuel, and food, it will impact everyone. Your earnings on Term Deposits and Savings are now behind the inflation rate so you are getting behind the eight ball as every minute ticks by. Of course, this is a successful attempt, by the US Fed., to create a situation where our money is devalued so the Government debt is not as costly, and so we consumers will spend our money before it is worthless. It happens when the treasury prints money. Anything declines in value when there is an overabundance of it. It is a wrong headed attempt to stimulate the economy. We spend because our money is getting worthless and demand increases. Increased demand raises prices and there is growth in the economy. Trouble is, we, as consumers, will run out of money. Oh, I forgot. We can borrow against our houses. Oh, I forgot, that is what got us into the credit bubble pickle in the first place.
So, enjoy your dollar now. You will soon need a magnifying glass to see it, and you will need a lot of them to buy your daily supply of food. Thank Mr. Bernanke when it all falls apart.
(PS Despite the steady world price of oil. I see in my own home town that in one day, this week, gasoline jumped 8%! In order to stay competitive in a slow economy, I have not raised my prices in three years. Who pays for this added fuel cost? Me. Welcome to inflation in a depressed economy)
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