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Which Foreign Central Bank Had the Nerve to Suggest a ‘Withdrawal of Monetary Policy Stimulus’?

Oct. 23, 2012 9:47pm Becket Adams

The practice of addressing national deficits with stimulus has, it seems, become a popular trend in almost every major country, leading noted investors such as Marc Faber to warn that unsustainable debts coupled with increased printing will lead to a “colossal mess” within the next five to 10 years.

And people like Faber may not be alone. In fact, the Bank of Canada, the country’s central bank and “lender of last resort,” has, in the words of Zero Hedge, “just fired a shot across the bow,” suggesting that maybe it’s time to ease off the, uh, easing.

“Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. Over time, some modest withdrawal of monetary policy stimulus will likely be required [emphasis added],” the bank said in a recently released policy statement.

“The timing and degree of any such withdrawal will be weighed carefully against global and domestic developments, including the evolution of imbalances in the household sector,” the statement adds.

Wow. Well, that’s certainly a change of pace as far as central banks go.

“Surely they must be punished for this blasphemy in the holy church of Saint John Maynard and the apostles of collapsing fiat,” Zero Hedge jokingly writes.

Here’s a side-by-side comparison of BOC’s September and October statements [via the Hedge]:

110877924-Bank-of-Canada

Now whether Canada’s government will actually dial back on monetary policy stimulus is uncertain. What we can say, however, is that the Canadian “loonie” seemed buoyed by the news:

Don’t understand what this chart means? It’s simple: When the USD (U.S. dollar)/CAD (Canadian dollar) currency pair rises, it means the the U.S. dollar is getting stronger against the Canadian “loonie.” When the USD/CAD currency pair falls, it means the “loonie” is getting stronger against the dollar.

As the above chart clearly indicates, there was a massive dip, meaning a strengthening in the “loonie” against the dollar, the same day Bank of Canada suggested the country revisit its monetary stimulus policies.

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Comments (23)

OzLinc
Posted on October 25, 2012 at 9:32am
* U.S. Tax revenue: $2,170,000,000,000
* Fed budget: $3,820,000,000,000
* New debt: $1,650,000,000,000
* National debt: $14,271,000,000,000 * Recent budget cuts: $38,500,000,000

Let’s now remove 8 zeros and pretend it’s a household budget:
Annual family income: $21,700
* Money the family spent: $38,200
* New debt on the credit card: $16,500
* Outstanding balance on the credit card: $142,710
* Total budget cuts: $385

Got It ????? The worlds ecomomy is at stake here…….but thats the plan isnt it

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michael from Ga.
Posted on October 24, 2012 at 12:13pm
Amen, to end the Unfederal Reserves.

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Individualism
Posted on October 23, 2012 at 10:24pm
I really hope the liberty movement can win during the revolution times and take over after the monetary collapse cause i might have to move if histories alternatives take over. i really don’t want to move back to Canada. I suppose its not too bad in Alberta though.

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- The-Monk
  Posted on October 23, 2012 at 10:35pm
  Indi says, ” i really don’t want to move back to Canada.”
  
  It’s all making sense now…..
  
  Report this comment
- JRook
  Posted on October 24, 2012 at 10:46am
  Actually the one year graph show a different trend but doesn’t of course suggest the superficial conclusion presented here. Canada is reacting to a weakening of its currency primarily due to the economic problems in Europe. Canadian companies do not benefit from a strengthening against the US dollar or other currencies. And a more important chart is one which shows the level of exports from Canada to the US. This level is now where it was before NAFTA and is headed in the wrong direction for Canadian companies. The key to monetary policy is to maintain the relative value of your currency to the key 6 or 7 major currencies. Dramatic moves up or down are never good for consistent and stable trade.
  
  Report this comment
The-Monk
Posted on October 23, 2012 at 10:14pm
So….. the Canadian loonie is doing better than our WH loonie?

No surprise here……

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- CatB
  Posted on October 23, 2012 at 10:35pm
  Yes .. the only “dollars” that have done well under our looney is the Canadian money I had left over from my last vacation up in Canada.
  
  Report this comment
- soybomb315_II
  Posted on October 23, 2012 at 10:35pm
  you think Romney has the guts to allow federal reserve to raise interest rates and likely slow the economy?
  
  Heck no. When it comes to central banking, Romney and Obama are the same
  
  Report this comment
- The_Jerk
  Posted on October 23, 2012 at 10:40pm
  America’s only hope is to end the Fed.
  
  Report this comment
- The-Monk
  Posted on October 23, 2012 at 10:48pm
  Hi CatB,
  
  The Costa Rica money I had left over severed my “Military Mom” (not mine) who cuts my hair very well also on her vacation to Costa Rica. I donated a laptop to her after Glenn asked us to help a Military family. She had no way to contact her son in Afghanistan via e-mail or Skype so I just gave her a laptop with a camera. I get free haircuts now and she and her Son are in touch.
  
  I didn’t want free hair cuts but she refuses to take any money from me. I did convince her to take the Costa Rica money….. is was about $100 USD. Can’t wait to hear how her vacation went. : )
  
  Report this comment
- The-Monk
  Posted on October 23, 2012 at 10:50pm
  Hi Soybom315,
  “you think Romney has the guts to allow federal reserve to raise interest rates and likely slow the economy? ”
  
  What is your suggestion to solve that issue?
  
  Report this comment
- soybomb315_II
  Posted on October 24, 2012 at 5:18am
  Gary Johnson
  
  Report this comment
- AuraStream
  Posted on October 24, 2012 at 2:26pm
  Only thing that is loonie is our current administration, end of story.
  
  Report this comment
NobleDar
Posted on October 23, 2012 at 10:09pm
The stealth tax of Obama, some call it quantitive easing, is the biggest ripoff of the countries existance. We were 30% above the Canadian Loony value back 5 years. Our dollar is only worth 70 cents today, we were taxed 30% on every purchase and every pension in the nation Priced a new car lately? Yes, 30% more expensive under Obama. The media in the business world do not explain or stress the importance of the dollars value, they just play the market either direction. Our dollar needs to strengthen 100% above its present value to bring the working stiffs wages up and increase his buying power(more 4 less $).
Yes, the market will contract to a conservative value level around 10000, but as I just showed you the value increases and you buy more for less. Don’t buy into that global markets trade crap, it is not the priority problem of main street; move the businesses back home. It is infuriating, the lack of reporting on this number 1 priority.

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- The_Jerk
  Posted on October 23, 2012 at 10:21pm
  Stop blaming the politicians. They do not control the Fed, or any privately owned central bank. The Shylock mob controls the nations monies. Rothschild Brothers of London, 1863. “Give me control of a nation’s money and I care not who makes it’s laws”
  
  When you misdiagnose the disease you can not cure.
  
  Report this comment
commonsenseguy
Posted on October 23, 2012 at 10:03pm
even a blind squirrel finds a nut every now and then, the central bank has either figured out that they are about to be in a lot of trouble for helping screw not only their own country but the world and just maybe on the verge of collapse and or prison for treason,or they know that if they keep going down this road,they along with the rest of world will be left in control of one or more communist countries or at the least under a ” new world order ” that will be controlled by george soros and the democommies.either way we are all screwed.

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- drs1969
  Posted on October 23, 2012 at 10:54pm
  The Central Banks are empowering the Communists, for Pete’s sake. They are purchasing around 75% of Treasuries. If they weren’t buying, high interest rates would stop government borrowing, and it’s growth, in it’s tracks.
  End the FED. It’s our only hope.
  
  Report this comment
Gary_K
Posted on October 23, 2012 at 9:56pm
Wow, it seems the canadians are recovering from their brain freeze….must be all that global warming owlgore rants about.

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- commonsenseguy
  Posted on October 23, 2012 at 10:09pm
  you mean the same al gore that lives in a 13 room sea side mansion and who fly’s every where and has a carbon foot print that is larger than 99% of the world,the same idiot who wants to make billions off the backs of Americans while the rest of the world get by on a free pass because we are a nation of haters,fatty’s and where even our poor are rich compared to the rest of the world, the same idiot who also thought he could be president of the USA.
  
  Report this comment
- Gary_K
  Posted on October 23, 2012 at 10:20pm
  Yup, thats the guy…
  
  Report this comment
- drs1969
  Posted on October 23, 2012 at 10:57pm
  Not really. Look up the average interest rate at the Bank of England for the last 400 years and you will see that this article is blowing smoke.
  
  Report this comment
- revelation2012
  Posted on October 24, 2012 at 5:13pm
  http://patdollard.com/2012/10/disturbing-cbs-news-affiliate-accidentally-runs-khyron-dated-november-6-declaring-obama-winner-of-2012-election-4340-40237966-votes-to-38116216/
  
  Report this comment
Prosecute_Constitutional_Treason_In_Washington
Posted on October 23, 2012 at 9:56pm
Is your vote worthless trumped by this videos use on election day?
Your vote may already be worthless.
CBS affiliate posts false results days in advance of Presidential elections. Affiliate gives no reply.

MUCH MUCH BIGGER NEWS THAN TRUMPS. IS THIS ELECTION FRAUD THAT FALLS UNDER
RICO? Please everyone watch this and decide for yourself. If this is real people need to know the truth. The video is less than one minute.

http://www.youtube.com/watch?v=Q2zYi2xn1jo

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