Double digit inflation is in your future

Buckle up kiddies, it will be a rough ride and Biden and Trudeau are not Roughriders

Canadian inflation was reported this morning at 6.8% while United Kingdom inflation was reported at 9%. Central bankers still live in the deluded state that mild interest rate rises can tame inflation despite a massive labor shortage, wage growth lagging inflation and a left wing created global energy shortage that will get a lot worse before it gets better. West Texas Intermediate oil this morning at US$114 a barrel, Henry Hub natural gas north of US$8 per gigajoule, and no supply response in sight.

Canadian inflation is fueled by nosebleed housing costs, a policy failure in a country boasting 2.5 billion acres of land with only about 1% of it developed, and a plethora of nonsensical policies by federal, provincial and municipal governments pretending they can solve the housing crisis with band aid solutions that keep husbanding services land to serve developers at the expense of consumers, and demand for housing growing with rising immigration. All I see is bluster coming from Queen’s Park and Ottawa yet little substance visible.

UK inflation is driven by energy prices where natural gas commands a price multiples higher than Canada owing to years of “climate alarm” policies persuading once sensible governments that CO2 was an “existential crisis” and diverting capital to unreliable wind and solar. The “existential crisis” caused by CO2 is not global warming but the overwhelming embrace of the flawed Anthropogenic Global Warming nonsense promoted by left wing radicals hoping to rally support for a “post-national” global government and extreme rhetoric from the United Nations and the World Economic Forum conflating science with nonsense.

In the United States, Biden blames Putin for inflation and high gas prices while refusing to free oil & gas producers to expand output to fill the supply gap and in Canada climate nutcases like Elizabeth May, Jonathan Wilkinson and Justin Trudeau keep spouting about the need for a “just transition” to “renewables”. There is not a hope in hell that “renewables” can provide enough energy to power global energy needs and this pipedream has dire consequences.

Ultimately, as inflation soars and workers scream for higher wages while oil & gas prices tick higher and diesel fuel inflation - exacerbated by inane carbon taxes - gets passed on in food costs, the rhetoric that “inflation is transitory” or that mild rate rises will “tame inflation” will pass into history replaced by draconian rate rises similar to the early 1980’s and possibly wage and price controls like those enacted by Pierre Trudeau whose son Justin seems to follow his Dad’s playbook on everything. A deep recession is more likely than not.

Buckle up kiddies. Western Democracies eventually get it right but typically not before they have exhausted all the wrong answers and the electorate’s love affair with Biden and Trudeau is demonstrably a wrong answer.