So this year in review is a little late but here it is.
Last year I didn’t make many predictions for 2015. First one was that I had assumed that we would see a small rise in the overnight rate. The BoC shocked everyone this year by dropping rates twice. The BoC is still trying to settle in on a solid policy. They are supposed to monitor and react to inflation but in their statements they have claimed they needed to take out “insurance” against low oil prices. Well we have low oil prices, which is bad for the Canadian dollar and we have a low interest rate, which is bad for the Canadian dollar. This would seem to indicate that the BoC does not care about the strength of the Canadian dollar. Which is fine because it is not supposed to.
Leading up to the rate announcement this month there were murmurs of negative interest rates and another rate cut, Half of all economists surveyed believed another rate cut was coming. Poloz said the BoC has certainly been watching the negative rates in Europe. The BoC kept their rates steady and then in their next statement said that a rate rise was possible because the rapid drop in the Canadian dollar could be leading to higher than expected inflation. As has been mentioned a few times on this site, the BoC needs to greatly increase its communication and clarity. Constantly surprising the market is a terrible way for a central bank to operate.
As for predictions. Inflation is creeping up again. At 1.6% CPI and 1.9% core we are still in the safe zone. I think with the Canadian dollar so weak there is some political pressure to raise the rates to try to get some strength back in the Loonie but that is not supposed to be the BoC’s job.
I know what you are thinking to yourself right now. Hey, where did the articles on Free Money go? To be perfectly honest I got bored holding long term stocks so I starting the equivalent of gambling with the money. Taking extremely high risk positions and lost of some the money. At that point the experiment was kind of ruined so I stopped doing it. If something should appear for a new experiment this year the Free Money posts will resume. If you have any suggestions, please send them in.
South of the border the American election is heating up. They don’t really ever take a break down there when it comes to the political hype cycle. Last year I thought Obama should spend his time going after huge problems on a regular basis so that the Republicans wouldn’t have time to generate their false outrage properly in each case. The immigration bill was a good example. I expect to see something big on gun control before November. I also fully expect it to be blocked by Republicans who get lots and lots of money from the gun lobby. Oh, they are going to cure cancer. In general.
As for the election. The circus that is the Republican party continues. Donald Trump seems be leading the polls which is interesting. Even if he wins the nomination I don’t think he has a real chance of winning a general election. Unfortunately that leaves Ted Cruz as the “reasonable” candidate. Last election he was considered one of the crazies. Also, he is pretty much just a liar.
So that means that Bush makes the most sense if you want someone less crazy than the rest of them. I am not sure what they are going to do. Americans love freedom and democracy and hate monarchies. How could they possibly justify electing three people from the same household as president? It’s funny to talk about how crazy everything is in US politics right now but it is actually more sad than anything.
On the Democratic side we have Clinton and Sanders. Clinton who is being investigated for using a personal email server while Secretary of State. A act that demonstrates a lack of good judgment because it wasn’t a gaffe at a speaking engagement or a poor decision made in the heat of the moment. It was ongoing and obviously wrong over a long period of time.
Sanders looks like a hardcore socialist because the rest of American politics has swung so far right. He believes healthcare could be cheaper with a single payer system and that people could all get the coverage they need. He believes education should not bankrupt you and that 1% should not own 99% of the wealth. COMMIE!
It would be interesting to see him in an election against Trump. As soon as Trump got the Republican nomination he could easily change his tactics to appear more moderate. This would sway some people away from what they see as the crazy old socialist Sanders. In a Trump vs. Sanders election, Trump could win. My vote for the Democrats would actually be John Kerry but that is not going to happen.
Canadian politics will be much less exciting this year as the Liberals are still in photo op mode. The Conservatives left Canada with a bigger budget deficit than had been previously reported which is a surprise only to the Conservative party who, in a demonstration of their total lack of self awareness, have criticized the Liberals for their deficit.
The Liberals are going to have to decide some pretty major things in the first year. TPP, bombing ISIS, new fighter jets, Syrian refugees.
The inquiry into the missing and murdered aboriginal women will likely start and, if it wants to have any credibility at all, will instantly expand to include aboriginal men. (They are far more likely to be victims of unsolved murder). Once it is all over (not this year) we can expect the conclusions to state that poverty was a major contributor to this problem.
The F-35 will be allowed into the bidding on the contract for new jets. The issue will not be resolved this year but I think the decision to let the F-35 into the running will be made.
Alberta stimulus. People in Alberta are going through a hard time because of slumping oil prices. They are the victims of a totally incompetent government that thought that instead of saving money during the boom they would hand out stimulus cash. Stimulus during a boom! Brilliant bit of governing there. Perhaps the Liberals can use some of their planned infrastructure spending as stimulus. A new set of spending will not go over well in the rest of Canada.
Pipelines. There will be much talk of pipelines. Many protests. Then some more talking.
As for this site. You should still see about a post per month. Requests are always welcome. There were no new videos in 2015 so maybe that can be a goal for 2016. Thanks for reading for another year.