4 ms·
Canada's consumer price index hasn't exceeded 4% since 1990 and has averaged 1.74% since then. So investors who are buying those bonds could reasonably see thin
by scarhill 9y ago
Canada's consumer price index hasn't exceeded 4% since 1990 and has averaged 1.74% since then. So investors who are buying those bonds could reasonably see things differently than you do.
- ericd 9y agoI don't get how that could possibly be true, given that the CAD has depreciated something like 30% in the past few years vs USD?
- umanwizard 9y agoNot everything bought in Canada is traded internationally and denominated in USD.
- ericd 9y agoSure, but some significant set of goods must come from abroad. The vast majority of clothing and electronics, for example.
- sdm 9y agoThe USD isn't some gold standard of truth. Like any currency it also appreciates and depreciates over time. You can't just look at the exchange rate between two currencies and make any meaningfully claims. Definitely, you can't make any claims about Canadian inflation by just looking at the exchange rate. When we went up to 1.10 it didn't cause deflation and when we went down to the low .70s we didn't see inflation.
- ericd 9y agoI don't mean it as some expression of hegemony or to demean Canada, it's just that USD is one of the major global reserve currencies, and a large percentage of international trade is conducted in USD. If it's your opinion that it has depreciated less against the other currencies that are commonly used in trade, I'm happy to hear about that. Given a depreciation against the trade currencies, I'd expect a large number of imports to get more expensive nominally, including many necessities like clothing. Maybe this isn't the case, and if it's not, I'd be very interested to hear why.