The best inflation policy for Canada


View Poll Results: Which do you think would be the best option presented in the OP?
1 0 0%
2 0 0%
3 3 60.00%
4 1 20.00%
5 1 20.00%
Voters: 5. You may not vote on this poll

Machjo
#1
Which do you think would be the best policy for the Canadian government to adopt:

1. Maintain constant low inflation.

2. Pin the currency, making it illegal to trade it at any other value.

3. Aim the currency towards a particular target value, inflating or deflating it as needs be to bring it towards that value at all times, yet still allowing people to trade it at market value.

4. Maintian constant deflation.

5. Other option.
 
Machjo
#2
One option I did not include is a gold standard. I'd personally support going back to a gold standard, but though that would be more of a long-term plan. The plans presented in the OP could theoretically be implemented within a government's mandate.

Well, a gold standard too, but only through some kind of shock and awe tactic.

But among the options above, I'll be voting option 3, as it has an impact similar to a gold standard in that it eliminates long-term currency fluctuation while still allowing the currency to float at a market rate thus avoiding a black market in as could occur with option 2.
 
JLM
No Party Affiliation
#3
Personally I'd like to see everything, prices, wages divided by 10 to bring things back to some semblance of normal. It's bullsh*t needing a wheel barrow to pack enough money to the grocery store for a couple of bags of groceries. When I was growing up a millionaire was a somebody, now that will simply buy you a high priced over inflated house. It's past the point of insanity.
 
Machjo
#4
Someone voted 4. Interesting While it could certainly have the advantage of encouraging savings, could it not also risk excessive savings in the id to see prices drop further, the very deflationary spiral that can lead to more severe recession?

That said, I must admit that if it were a choice between 1 and 4, I'd choose 4 as long as we had no price controls such as minimum wages since that way prices and salaries would be free to drop side by side, thus possibly mitigating the risk of any kind of severe recession while still encouraging people to save, thus leading to a more stable economy in the long run. And besides, constant deflation could not be any worse than constant inflation just with opposite symptoms, though those of constant deflation being less harmful overall.
 
Machjo
#5
Quote: Originally Posted by JLM View Post

Personally I'd like to see everything, prices, wages divided by 10 to bring things back to some semblance of normal.

That's not deflation though. Technically, that's currency exchange. The Weimar republic had done that when they'd replaced the old currency with the new one, with the new one being worth x times the old one, and of course with a different design on the note so that they could be distinguished from one another.

That would not necessarily be a bad thing though, and is necessary from time to time in an ever inflating environment since sooner or later, as you say, we end up needing to carry just way too much cash on us all the time.
 
Machjo
#6
I would say however that I would not be in favour of going through the trouble of adopting a new currency until we finally put an end to constant inflation otherwise we'd end up having to repeat the whole process again sooner or later with the new currency too. If we could put an end to permanent inflation first and then switch to the new currency, then we could be sure not to have ot repeat he whole process again.
 
JLM
No Party Affiliation
#7
Quote: Originally Posted by Machjo View Post

I would say however that I would not be in favour of going through the trouble of adopting a new currency until we finally put an end to constant inflation otherwise we'd end up having to repeat the whole process again sooner or later with the new currency too. If we could put an end to permanent inflation first and then switch to the new currency, then we could be sure not to have ot repeat he whole process again.

I doubt if we'll see any drastic changes either way until the human animal manages to overcome one of its main traits...........................GREED.
 
Machjo
#8
As for the gold standard, there is an interesting privately led gold standard in place already in Indonesia:

Islamic gold dinar - Wikipedia, the free encyclopedia

This proves that the gold standard is feasible at lest on a small scale, though of course it's less certain that it would be on a large scale, but I think it would be worth exploring. You sure would not need to carry much money on you with such a standard in place. Even one dinar could buy you a heck of a lot, and it would not take much space in your wallet. Add to that that even if you stuffed it under your pillow for years, you know no one and no government could do much to devalue it.
 
theconqueror
#9
What about hedging? Forgot the most popular choice...
 
Machjo
#10
Quote: Originally Posted by theconqueror View Post

What about hedging? Forgot the most popular choice...

I don;t quite follow how that impacts on inflation though. Is this something the person does or the government? And what's it's long-term impact on inflation?

From what I understand, it merely stabilizes inter-currency exchanges but not necessarily inflation domestically. Am I missing something here?
 
Avro
No Party Affiliation
#11
Economists are the most boring and heartless people.....they only see numbers.
 
Machjo
#12
Quote: Originally Posted by Avro View Post

Economists are the most boring and heartless people.....they only see numbers.

... that affect our money.
 
Avro
No Party Affiliation
#13
Quote: Originally Posted by Machjo View Post

... that affect our money.

Still boring....and most times have no idea what they are doing....all theory.

Accountants are the same.
 
Machjo
#14
Some of the theory is logical enough though. Do I need to prove to you, for example, that printing large sums of money and putting it into the economy will increase the risk of inflation?

Or will you be more motivated to save money you know will keep its value in the long term, or money that's always inflating? If it's always inflating, you're likely to hedge it, no?
Do we need scientific proof of that?
 
theconqueror
#15
Quote: Originally Posted by Machjo View Post

I don;t quite follow how that impacts on inflation though. Is this something the person does or the government? And what's it's long-term impact on inflation?

From what I understand, it merely stabilizes inter-currency exchanges but not necessarily inflation domestically. Am I missing something here?


Here read some...




As parity beckons, firms rush to hedge:
As parity beckons, firms rush to hedge - The Globe and Mail


More Canadians may end up hedging more:
Parity?s no picnic
 
JLM
No Party Affiliation
#16
Quote: Originally Posted by Machjo View Post

Some of the theory is logical enough though. Do I need to prove to you, for example, that printing large sums of money and putting it into the economy will increase the risk of inflation?

Or will you be more motivated to save money you know will keep its value in the long term, or money that's always inflating? If it's always inflating, you're likely to hedge it, no?
Do we need scientific proof of that?

I never did really understand the term hedging and hedge funds. Isn't that what we are doing when we diversify our investments, like equities, bonds and fix income accounts? Or do some people just have to complicate things through fancy jargon?
 
Tonington
#17
Is there something wrong with the current target of two per cent? If it isn't broke...
 
Machjo
#18
That's what I thought, it's more individual action. The government cannot do much with regards to the CAD's USD exchange rate. Let us hedge.

What I'm thinking more about here is what actually is within the government's power, at least to a degree, and that is in preserving the value of the CAD domestically.

Again, while I think it wise for the private sector to hedge here, I honestly don't see what the government can do about that. Or did I miss anything again? The article does seem to be dealing with individual action, not governmental action.
 
Machjo
#19
Quote: Originally Posted by JLM View Post

I never did really understand the term hedging and hedge funds. Isn't that what we are doing when we diversify our investments, like equities, bonds and fix income accounts? Or do some people just have to complicate things through fancy jargon?

Yes, hedging is all about diversifying risk or parking your money on something secure during a storm so as to protect it.
 
Avro
No Party Affiliation
#20
Quote: Originally Posted by Machjo View Post

Some of the theory is logical enough though. Do I need to prove to you, for example, that printing large sums of money and putting it into the economy will increase the risk of inflation?

Or will you be more motivated to save money you know will keep its value in the long term, or money that's always inflating? If it's always inflating, you're likely to hedge it, no?
Do we need scientific proof of that?

Some?.....perhaps, but I managed to create a net worth of over a million on just a grade 10.

On top of that I have alot of fun.
 
theconqueror
#21
Quote: Originally Posted by Avro View Post

Some?.....perhaps, but I managed to create a net worth of over a million on just a grade 10.

On top of that I have alot of fun.


Bravo! Just a tad over a million with owning three... I've been paying attention.
 
Avro
No Party Affiliation
#22
Quote: Originally Posted by theconqueror View Post

Bravo! Just a tad over a million with owning three... I've been paying attention.

It's broader than that, I own 4 businesses 3 of which are restaurants and I am venturing in a fifth with home automation and solar power.

I'm also involved in real estate and renting.
 
theconqueror
#23
Quote: Originally Posted by Avro View Post

It's broader than that, I own 4 businesses 3 of which are restaurants and I am venturing in a fifth with home automation and solar power.

I'm also involved in real estate and renting.


Was going to mention www.zillow.com as a great aide but unfortunately is not available in Canada.
 
theconqueror
#24
For example: The White House

1600 Pennsylvania Avenue NW Washington, DC 20500


Owner Facts:
  • 16 beds
  • 35.0 bath
  • 55,000 sqft
  • Lot 784,080 sqft
  • Built in 1792
Home Description:

Built in 1792, this magnificent 132-room mansion is the rarest of homes in the U.S. since it is not only the residence of the U.S. president and his family, but it also has two wings with offices for the president, the First Lady, top staff and aides. Designed by Irish architect James Hoban, it was built during the Federalist period (late 1780-1830), but is considered Georgian in the Palladian style with neoclassical influences. After the cornerstone was laid on October 13, 1792, it was built by slaves, free African-American laborers, immigrants, and salaried Europeans. Second President John Adams and his wife, Abigail, took occupancy on November 1, 1800. Made from sandstone, brick and wood, the White House was composed only of the "Residence" and was completed for a cost of $232,371.83. There are three parts to the White House: The Residence (where the First Family resides), the West Wing (Oval Office and top executive offices) and the East Wing (First Lady and offices for her staff). The Residence contains 6 levels: the sub-basement (storage, laundry); basement (Diplomatic Reception room, Map Room, kitchen, curator's office, dentist's office, one-lane bowling alley); first floor (the "State Floor" contains the Red Room, Blue Room, Green Room, East Room, State Dining Room, and Family Dining Room); second floor (the "Family Residence" contains the master bedroom, Lincoln Bedroom, Queens' Bedroom, Yellow Oval Room, Truman Balcony), and the third floor (rec, music, and sun rooms). The West Wing contains the president's office, the Oval Office and the Situation Room. There are three levels: the basement (Situation Room, Secret Service Offices, Press Corps Offices); the first floor (Oval Office, Vice President's Office, Chief of Staff Office, Roosevelt Room, Press Briefing Room), and the second floor (offices of the president's staff). The East Wing houses the First Lady's office and those of her staff. It is also where the underground bunker is located.

Zestimate: $283,065,000
30-day change: $358,000
Value Range: $133,040,568 - $376,476,440
Last updated: 04/07/2010




With Birds eye view of the property and a lot more background information about the home with an estimate of value which you can compare with the neighbours value and those which have allready been sold to get the upper edge on the market.
 

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