Why omit 2002/2003 in your examples? 2002 was the weakest for the CAD which led to the highest inflation rate in Canada over the last 20 years outside of currently.
2011 was still higher. And we had 1% inflation in 1998 and 1.7% in 1999, even though the dollar was sub $0.70.
The point is, there's very little correlation between the exchange rate and the inflation rate. Sometimes inflation is high when the dollar is high and sometimes it's high when it's low, and vice versa. It has an effect, but not a dramatic one. The 5 years in the last 30 with the lowest CAD value:
The fact is, other macroeconomic factors (economy strength, money supply, interest rates, etc.) have a far bigger net impact on inflation than exchange rates do. And of course, you can't just unilaterally strengthen the Canadian dollar; you normally have to raise interest rates to achieve that, which is also inflationary. The net difference between the inflationary effect of a lower Canadian dollar and the inflationary effect of higher interest rates isn't particularly large (if it exists at all).
Peak inflation in 2003 was 4.7% while 2011 was 3.7%.
I was just using yearly rates, rather than rolling 12 month ones, but sure.
It still doesn't change the overall point. Inflation during the period of a declining Canadian dollar in the '90s and early '00s was quite low; 1.6% annualized from the peak to trough of the CAD (1991-2002) and about 2.3% in the 5-year period of a sub $0.70 CAD (mid 1998 - mid 2003). If a falling dollar drove high inflation, you wouldn't expect that to have happened, but it did.
On the other hand, in the CAD's strongest period of growth (from mid-2003 to mid-2008), the annualized inflation rate was 2.4%. Again, relatively modest inflation, but the Canadian dollar increased its value by over 50% in that period; if a high Canadian dollar was significantly deflationary, then you would probably expect that number to come in lower.
It really comes down to the fact that many of the things that drive a high Canadian dollar (high oil prices, strong economy, high interest rates for consumers, etc.) tend to raise prices. So you would never expect an inverse relationship between the Canadian dollar and the inflation rate, even if some consumer goods sourced from the US get more expensive with a lower dollar.
LOL, the guy busting out shadowstats.com CPI numbers tells you all you need to know about his credibility.
That's the beauty of compound numbers; lying about inflation in the long term is impossible because we can all see the past prices and even 1-2 percentage points discrepancy turns into massive variances over a period of decades. The idea that inflation has actually been 5-10 percentage points higher than reported for 40 years is so ridiculous, I question the basic arithmetic abilities (and the sanity) of anyone who beleives that.
Last edited by opendoor; 03-06-2023 at 10:03 PM.
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LOL, the guy busting out shadowstats.com CPI numbers tells you all you need to know about his credibility.
That's the beauty of compound numbers; lying about inflation in the long term is impossible because we can all see the past prices and even 1-2 percentage points discrepancy turns into massive variances over a period of decades. The idea that inflation has actually been 5-10 percentage points higher than reported for 40 years is so ridiculous, I question the basic arithmetic abilities (and the sanity) of anyone who beleives that.
The guy works in finance, I absolutely think numbers are being under reported.
Hard to argue the currency devaluation which was the purpose of the video.
The guy works in finance, I absolutely think numbers are being under reported.
Hard to argue the currency devaluation which was the purpose of the video.
Big deal. I work in finance and people get things wrong in this sector all the time. I also think that "working in finance" doesn't make you an expert on everything relate to money. I'm excellent in my areas of expertise and not so much in areas that I don't deal with. I don't think that's much different than any other sector.
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Big deal. I work in finance and people get things wrong in this sector all the time. I also think that "working in finance" doesn't make you an expert on everything relate to money. I'm excellent in my areas of expertise and not so much in areas that I don't deal with. I don't think that's much different than any other sector.
Yeah, like literally every other sector some people are great, most are OK at what they do, and a few are absolutely terrible.
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Big deal. I work in finance and people get things wrong in this sector all the time. I also think that "working in finance" doesn't make you an expert on everything relate to money. I'm excellent in my areas of expertise and not so much in areas that I don't deal with. I don't think that's much different than any other sector.
People in finance are motivated to finance things and convince others to do so. They get paid to do so. That's going to attract people who are motivated by their own self interest, consciously or not. I wouldn't ask a car salesman to be in charge of advising people on when it's a bad time to buy a car.
Big deal. I work in finance and people get things wrong in this sector all the time. I also think that "working in finance" doesn't make you an expert on everything relate to money. I'm excellent in my areas of expertise and not so much in areas that I don't deal with. I don't think that's much different than any other sector.
