On November 21, 2023, Canada’s Deputy Prime Minister and Minister of Finance, the Honourable Chrystia Freeland, delivered the 2023 Fall Economic Statement (FES 2023), a mid-fiscal year update that was narrower in focus than previous economic statements.
In the investment world, volatility and uncertainty often reign, evoking a sense of unease. Remembering the call for 3000 on the S&P 500 Index in late 2022, the recent correction at 4600 might seem unnerving. Yet, like the hopeful message in Steely Dan’s song Any Major Dude Will Tell You, we should maintain our resilience, knowing that things will eventually fall together again.
In the grand theatre of Canadian economic governance, a clandestine struggle is waging, echoing the dramatic narratives of Shakespeare’s Hamlet. Prime Minister Justin Trudeau, once dismissive of monetary policy, now finds himself locked in a power struggle with the enigmatic Bank of Canada. Amidst dwindling popularity at the polls and persistently high interest rates, the stage is set for a secretive battle for control, with both parties striving to shape the nation’s future.
Chances are “you might live longer than you think.” This was the longevity message of a Wall Street Journal article earlier this year. Indeed, we are living longer and healthier lives — half of those born today are expected to live to the centenarian age of 100. And, though the average Canadian’s life expectancy is around 82, if you reach the age of 75, you’re likely to live until age 87. Our life expectancy increases as we get older.
The adage, “Discretion is the better part of valour,” has never been more pertinent as the U.S. Federal Reserve cautiously navigates between the perils of inflation and deflation. In the world of economic policy, the Federal Reserve finds itself delicately engaged in a balancing act akin to a tightrope walker traversing a starlit sky obscured by clouds. The elusive concept of the “neutral interest rate” remains shrouded in uncertainty, and one could plausibly argue that rate hikes possess an inflationary nature. With continued reliance on outdated economic theories and models, the present quandary should come as no surprise.
In early 2021, I presented a thesis regarding the latest inflation episode and its potential economic implications. At that time, I shared a perspective that differed from the prevailing narrative. Allow me to recapitulate my viewpoint.
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