Meet Stephen Poloz – The Canadian Patsy

stephen-poloz1Stephen Poloz is the new Bank of Canada Governor. Before this he headed Export Development Canada, a federal Crown Corporation. Mainstream critics argue that Poloz doesn’t have the “macroeconomic” experience and that he lacks the connections to the world’s central banks that Tiff Macklem has. These objections may be true but they miss the point. He’s supposed to be a dim-witted inexperienced bureaucrat chosen by PMO influence. Poloz has been set-up to take the fall for Carney’s actions. That’s the point.

As far as central bankers go, Mark Carney is a rock star. His cult of personality in the mainstream media influence how people see him. Very few actually look what he specifically did during the 2008 financial crisis. Most journalists focus on him as if he was a public relations issue and skim over these facts: In the wake of the ’08 crisis, Carney’s BoC cut interest rates, supplied the banks with credit and – along with the federal government – facilitated an increase of the CMHC’s balance sheet. These actions ensured that Canada would one day face the same credit crisis and economic depression as the rest of the Western World.

This is where Stephen Poloz comes in. Mark Carney is too much of a celebrity to waste his time in Canada. He’ll head the Bank of England before (probably) moving on to global central bank issuing a global fiat currency. In the meantime when the Canadian credit bubble bursts the media zeitgeist will probably be along the lines of: “oh why, oh why, did we let Mark Carney go? We should have begged him to stay!”

But let’s not forget the Harper Government. Poloz was chosen by Finance Minister Jim Flaherty. Export Development Canada is a crony-capitalist organization that worked closely with the PMO in the auto bailouts. Critics of Harper will jump on this bandwagon pronto, but without realizing that Macklem wouldn’t have been the better choice.

Tiff Macklem was Carney’s right-hand man, a sturdy reliable fella that would steer Canada’s economy through the next crisis. So obviously he wasn’t going to get the job. The establishment need a boob and Poloz is their guy. Now perhaps I’ve arranged the argument to produce the results I expect. The mainstream media never attacked Carney and it’s possible they’ll never criticize Poloz. Poloz is the “partisan choice” as chosen by the Harper Government. So the bursting of the housing bubble will be Harper’s fault. And if Poloz is no Mark Carney, then this is also Harper’s fault. The mainstream media will never scrutinize the BoC until Canadians demand it.

And if Canadians demand it – Poloz will likely take the fall. It remains to be seen whether Poloz sees high commodity prices as detrimental to the Canadian economy and if a “strong” loonie is something that should be offset by “cheap” loonie. He’s expressed this view in the past, but given the government that appointed him, it’s uncertain how he’ll rule. Whatever his past or present views, it’s likely to result in more “monetary stimulus” and lower rates of interest. In other words, economic chaos.

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3 Responses to “Meet Stephen Poloz – The Canadian Patsy”

  1. Margo Talbot says:

    While I don't know enough to comment on your blog post, I will say that you are one of the very few Canadians who even inquires into what the BoC is doing. AND you live in Canmore! Happy to have stumbled upon your blog…

  2. RPLong says:

    Stephen Poloz is an excellent economist. Whatever his differences from the Austrian School, I have read many of his publications and heard him speak a number of times, and his reasoning is always extremely sound. I am largely unfamiliar with his technical work, but what he has published for public consumption has always been both more accurate than many of his peers, and well-reasoned from a cross-disciplinary point of view.

    I heard him speak about the US housing crisis back in 2007, and he suggested that we weren't going to "get back to normal" for 5 years, but probably more like 10 years. He's the only one I heard making that prediction at the time, and his reasoning on the subject has proven to be spot-on. Let's keep our fingers skeptically crossed. :)

  3. Ohhh Henry says:

    It's interesting that you believe the new guy is a patsy for the big dive that is coming. That's exactly what someone told me they think Carney is. With a country full of world-class economists (well, non-Austrian) and many of the world's top bankers, why would the UK go for a relatively unknown Canadian? Because everyone who matters in the UK knows that a crash is coming, and why would anyone in the know want to be standing at the helm when the ship goes down?

    I never heard the "Carney is a superstar" meme until he was touted as the new Bank of England head, and I'm pretty sure that no one in the UK ever considered him to be some kind of godlike, rock star of the banking world either. They had to invent that bilge in order to keep the public from scratching their heads and asking, "Why do we need to import an anonymous Canadian nobody to run one of the centers of world banking, whose only previous experience was bailing out globally insignificant Canadian banks and helping to dismantle the USSR?"

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