11-12 September 2014, Ottawa, Canada The Financial Markets Department of the Bank of Canada is organizing a two-day conference on collateral, liquidity, and central bank operations. It will take place at the Bank of Canada in Ottawa on September 11
Bank of Canada
Did the Government Pay for WW2 with Interest-Free Loans?
Did the government of Canada use the Bank of Canada to fund World War 2 with interest-free loans? It’s a claim that is often made by the Canadian Greenbackers (or Loonies, as I like to call them). The Loonies maintain
What Was “The Coyne Affair” ?
James Elliott Coyne would have been 104 years old this July, if he had lived past the ripe old age of 102. A lawyer by training, Coyne first joined the Bank of Canada in 1938 in the Research Department, but
What Causes Inflation?
When the Bank of Canada talks about inflation, what they really mean is price inflation. That is, the general rise in prices of goods and services. Indeed, justification for the central bank is in its perceived ability “to contribute to
Tiff Macklem & Deflation
Bank of Canada Deputy Governor John Murray isn’t the only BoC official to jump ship. After former Governor Mark Carney went off to England, it didn’t take long for Senior Deputy Governor Tiff Macklem to announce his resignation as well.
Canada’s Tidal Wave of Credit
Be mindful of what will happen when interest rates rise, but note that rising debt levels in Canada are no reason to panic, at least according to Stephen Harper. Canada’s Prime Minister is quick to note that his wife and
Gold for Cash!
Need to balance the books? Why not sell your gold? This is the route the federal government is taking. The Conservatives plan to sell and/or melt over 200,000 gold coins. A majority of these coins date from 1912 to 1914.
Ottawa Is In The Black
But we’re not out of the blue. Federal Finance Minister Jim Flaherty is predicting a balanced budget in the 2015-16 fiscal year. And it’s not just a balancing act. He expects more surpluses thereafter. Some analysts suggest that Ottawa may
Not too hot, not too cold?
Being a central banker must be difficult. First they had to cope with the deflation that accompanied the Great Depression. Then the problem became too-much inflation during the 1970s. Now we find out that even the present era of disinflation
Soaring High Without Big Data
Now that the U.S. government shutdown is behind us it is instructive to review what we went without for those weeks. Recently writing for the Financial Times, Robin Harding reported that experts feared that the U.S. government would be “flying blind”
Inequality and the Central Bank
Back in 2011, the Broadbent Institute was founded by Ed Broadbent, former leader of the New Democratic Party. The agency’s stated mission is to promote “democratic principles for the 21st century” along with “proposals for a more equal society.” Though
The Real Problem with Low Interest Rates
In a recent paper for the C. D. Howe Institute, economist Paul Masson argued that the Bank of Canada should commence allowing interest rates to rise to avoid greater real-estate bubbles and excessive debt. When Paul Masson argues that the Bank of
The IMF Needs to Cease and Desist
In many ways the current recession is as much political as it is economic. The International Monetary Fund (IMF) is largely responsible for this. It is fairly well known that bankers have made too many questionable loans over the past
BoC Deputy Governor: US Fed Tapering is Eh-Okay
Bank of Canada Deputy Governor John Murray is confident that Fed tapering won’t have any negative consequences for Canada. “The improving underlying strength of the U.S. economy should more than compensate for the drag from higher interest rates. Stronger external
Central Planning at the Bank of Canada
I don’t understand Stephen Poloz’s appointment as the successor to Mark Carney. Nor do I understand why Mark Carney was so popular to begin with. Are artificially low interest rates policies supposed to help Canadians? Before he took off for
The Use of Knowledge at the Bank of Canada
The Bank of Canada’s latest quarterly review suffers from the fatal conceit. Although technically the whole central banking system is a fatal conceit, one of the articles particularly highlights the complete ignorance and arrogance of Canada’s central bankers. Nii Ayi
How Safe is the Banque du Canada?
The Canadian dollar as it exists today came into existence in 1934. Prior, the Department of Finance issued currency in competition with chartered banks, which at the time were more numerous. Each bank would issue its own currency, sometimes backed
Poloz’s First BoC Interest Rate Statement
Bank of Canada Governor Stephen Poloz said that interest rates will remain low and the economy will grow due to “accommodative financial conditions.” His logic goes: The US economy is recovering ergo Canadian exports will grow therefore solid Canadian business
Econ 101 with Stephen Poloz
On June 19th, Stephen Poloz gave his first major speech as Governor of the Bank of Canada. Reading through it, it’s clear that Poloz – like his predecessor – has no real understanding of economics. So I’ve decided to pick
BoC Warns Against the Obvious
Last Thursday the Bank of Canada warned against the obvious: condos are overpriced and this poses a risk to the whole economy. The BoC singled out the Toronto market, noting that the country’s largest city also hosts the largest number
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