Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Saturday, May 18, 2013

Gas Prices Tumble 6 Per Cent As Inflation Rate Falls

OTTAWA - Canada's inflation story is fast becoming one about disinflation.

Statistics Canada reported Friday that the annual rate fell an astonishing six-tenths of a point to 0.4 per cent last month, the lowest it's been since October 2009, as gas prices plunged by six per cent — also the biggest drop since October 2009 — and many other consumer goods registered outright declines.

The loonie fell more than a penny against the U.S. dollar in early trading as markets read the soft report as making interest rate hikes in Canada less likely and further off into the horizon.

The Canadian dollar finished the day down 0.95 of a cent at 97.17 cents US.

On a seasonally adjusted month-to-month basis, consumer prices fell by 0.4 per cent. Analysts had been looking for a decline of half that amount, according to a consensus estimate.

Even food, which many analysts had predicted would begin taking a bigger chunk out of family budgets at about this time in the aftermath of last summer's drought in the United States, continued to inch lower and were only 1.5 per cent higher than a year ago.

"These numbers are incredibly, incredibly mild," said Bank of Montreal chief economist Doug Porter.

"To me this is fully consistent with an economy that is struggling to show much growth and with the relatively soft economic backdrop we're also seeing very low pricing power."

Porter conceded that inflation is expected to pick up in the upcoming months, but added, "not by much."

The steep drop-off in inflation will likely bring to a halt any talk about the Bank of Canada needing to start raising interest rates, given that inflation is far from the bank's ideal of two per cent annual inflation and even below the low end of its one-to-three per cent target range.

Despite a report earlier this week from a former Bank of Canada adviser, Paul Masson, that interest rates need to rise to avert long-term distortions to the economy, particularly in the debt and house prices, TD Bank said the central bank is likely to stay on the sidelines until late next year at the earliest.

Capital Economics analyst David Madani went further, saying it was time for the bank to drop its nominal tightening bias, language designed to warn markets there is very little chance of further cuts to rates.

The central bank's core inflation index, an underlying price pressure gauge which excludes volatile items such as gasoline and fresh foods, edged closer to falling out of the desired range, dropping to 1.1 per cent in April from 1.3 per cent the previous month.

Two provinces — British Columbia and New Brunswick — did fall into negative inflation territory last month, registering overall price decreases of 0.8 per cent and 0.2 per cent respectively.

While prices have been moderating the past couple of months, the April report saw outright declines across a broad range of consumer goods and services.

Aside from gasoline, overall transportation costs fell 2.1 per cent, while mortgage interest costs dropped 4.3 per cent, video equipment 10.9 per cent, automobiles 0.7 per cent and travel tours 4.8 per cent. On a month-to-month basis, clothing, restaurant meals and furniture also fell.

Prices were not lower for all items, but in many cases the pace of increases moderated.

Food prices rose 1.3 per cent following a 1.8 per cent increase in March, while restaurant meals increased by 1.2 per cent following a 2.2 rise in March. Shelter costs did increase to 1.3 per cent annualized, from 1.1 in March, as electricity rose 4.2 per cent and rent advanced by 1.6 per cent. Also registering gains were property taxes, natural gas and homeowner replacement costs.

Regionally, aside from the negative inflation in British Columbia and New Brunswick, most provinces saw slowing price pressures. The exceptions were Prince Edward Island, which saw a 0.6 per cent increase to 1.8 per cent, and Alberta, where the inflation rate rose to 1.3 per cent.

Original Article
Source: huffingtonpost.ca
Author: Julian Beltrame

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