May 19, 2021
Investor's Insight are my comments about each of the headlines in the weekly Market RoundUp videos, available in real time to clients of Harasymiw Investments of ACPI only. These excerpts are released for general viewing four months after initial private release. To learn more about partnering with Harasymiw Investments of ACPI to help guide your investment portfolio, get started here.
Is it any surprise that I again foist another inflation story upon you? I know it may seem like overkill and I’ll be the first to admit my errors if such a time comes. But I think the mainstream “experts” are leading many people’s financial thinking down the wrong path. That’s why I continue my assault on that narrative.
In April, with consumer prices rising 3.4% since the previous year, we’re again reminded by the likes of Bank of Canada Governor, Tiff Macklem, that inflation is “transitory” and only this high due to “base effect”. To which I respond, yet again, OK, I cede you the base effect argument but then why not change your base year of comparison? Why not compare to April 2019 instead?
I’ll also remind you that central banks are regularly targeting an annual inflation of 2%. So, do you not think it’s in their own best interest to come up with excuses as to why this year’s price increase is almost 75% higher than their target? Remember, you need to ignore that loud hum of the printing press in the background. It’s just background noise, right?
However, the article shrewdly points out that “If inflation proves more durable (in other words, not transitory),…that could force the central bank to bring forward interest rate increases that investors aren’t anticipating until later next year.”
Voila! There’s one of the many problems with buying the central bank’s face value excuses, potentially to the detriment of your own financial well-being.