David Doyle, head of economics at Macquarie Group, joins BNN Bloomberg to talk about his reaction to Canadian CPI for December. Doyle suggests that the concern for inflation is justified; however we shouldn’t be so concerned about the potential for runaway inflation or a wage price spiral.
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BREAKING: Recession News
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Title: Buckle Up Canada: A Relatively ‘Severe’ Recession Looms in 2023
Introduction:
As we stride into 2023, an ominous shadow encroaches upon Canada’s economic landscape, signaling a potentially ‘severe’ recession. Analysts and experts are warning citizens to brace themselves for the harsh impact of this impending economic downturn, representing considerable challenges for both individuals and the nation as a whole. In this article, we will delve into the factors leading to this prediction and explore potential implications.
Factors Leading to the Recession:
1. Internal Structural Factors:
Canada’s heavily debt-laden economy, combined with soaring housing prices and a struggling job market, has established a fragile foundation. While the post-pandemic recovery in 2021 and 2022 experienced rapid growth, underlying issues such as income inequality and a lack of diversification still pose significant risks. Consequently, any external or internal shock has the potential to trigger a chain reaction, pushing the economy into a recession.
2. The Pandemic Hangover:
Despite successful vaccination efforts, the COVID-19 pandemic continues to haunt economies worldwide. Canada, heavily reliant on sectors like tourism, hospitality, and traditional retail, has not recuperated fully from the impacts of the crisis. A potential resurgence in virus variants or setbacks in global recovery could hobble these sectors once more, undermining any growth achieved in recent years.
3. Diverging Global Economic Conditions:
The world economy is far from synchronized, with different countries experiencing varying levels of recovery. Canada’s lack of diversification amplifies the vulnerability to economic fluctuations in trading partners such as the United States, Europe, and China. Any significant downturn in these larger economies would severely impact Canadian exports, further dampening domestic economic activity.
Implications of the ‘Severe’ Recession:
1. Unemployment and Crippling Debt:
A recession of this magnitude will inevitably result in a surge in unemployment, as businesses struggle to stay afloat amidst shrinking consumer spending. Layoffs, reduced hours, and even business closures will become commonplace. Such widespread job losses will exacerbate Canadians’ already existing high levels of personal debt, making it challenging for individuals and families to cope with financial hardships.
2. Housing Market Turmoil:
Canada’s overheated housing market, long overdue for a correction, will experience a sharp decline during the predicted recession. This correction will contribute to a further erosion of household wealth as property values stagnate or plummet, leaving homeowners and investors in precarious positions. This impending housing market turmoil could exacerbate the overall economic downturn if not managed prudently.
3. Government Fiscal Constraints:
Declining tax revenues due to economic contraction will lead to a diminished capacity for government spending. This will restrict the ability to implement robust stimulus measures, thereby prolonging the recovery process. Austerity measures and budget cuts may become necessary, impacting social programs, infrastructure development, and healthcare, further compounding the societal impact of the recession.
Conclusion:
As the storm clouds gather and the countdown to 2023 begins, Canadians need to prepare for the uncertainty and challenges that lie ahead. The projected ‘severe’ recession will test the resilience of individuals, families, and the nation at large. By acknowledging the structural vulnerabilities and mitigating risk factors, Canada can work towards rebuilding a more resilient economy that can withstand future shocks. It is crucial for policymakers, businesses, and citizens to come together, adapt, and develop strategies to minimize the repercussions of this impending economic tsunami.
We keep hearing that Inflation is going down but we actually don't see any changes of relief in our daily lives.
Food prices are not coming down.
Taxes are not coming down.
Gas prices are not coming down.
Rents are not coming down.
Home prices are not coming down.
Prices of goods and services are not coming down.
Nothing is coming down, in fact, everything is going up and up.
These inflation numbers released by BoC are just the numbers for the rich, in fact, they do not reflect the lives of working-class Canadians at all.
The middle class in Canada is getting wiped out by BoC's mismanagement of the monetary policies for the past 2 decades. (Destroying the value of the Canadian dollar, cutting the rates to record low and insanely printing money in 100s of billions).
Instead of releasing these numbers, people want to see the results & improvement in their lives, not just talk and talk by policymakers at BoC.
How did we get "too ramped up"? Why are we satisfied if inflation is 3%. Interest rates are still far too low and could never be described as high. Zero or negative real interest rates are what should be described in negative terms. That should not be the normal. This BoC has been pathetically week on inflation. They should never have allowed this situation to develop in the first place.
but how can you bring inflation back if the gov keeps spending and printing money…i mean the damn payout they are gonna give us is just printed money!!!
A lot of folks have been going on about a March rally and said stocks that would be experiencing significant growth this new year season, any idea which stocks this may be? I just sold my home in the Boca Grande area and I’m looking to remunerate a lump sum into the stock market before stocks rebound, is this a good time to buy or no?
One thing people fail to do (especially millennials) is INVEST. I made my first million from blue chips and top etfs using a broker so i invested and re-invested my profits. I also acquired large amount of high-quality dividend-paying stocks too that gives me a solid base of passive income. ever grateful to Olivia Maria Lucas handling my portfolio, two years now and she still surprises me, she's actually the only person i know that's richer than me haha
*depression
Major indexes booked their worst yearly performance since 2008 thanks to drivers like the recession, war, hiked interest rate and inflation which so far doesn't seem to be easing off, so l'm left wondering what 2023 has in store for us investors, l've been sitting on over $745K equity from a home sale and I'm not sure where to go from here, is it a good time to buy or do I wait?
Economy is still being propped up by dreamy investors who are in denial. House cards to collapse soon
All these highly paid experts and this is the best they can do?
My spouse and I are adding a variety of stocks/ETF to my present holdings for the long term, We've set aside $250k to start following inflation-indexed bonds and stocks of companies with solid cash flows, I believe it is a good time to capitalize on the market for long-term gains, but it wouldn't hurt to know means of actualizing short term profit.
Severe????
Success is just another shit away
Some Canadians have seized on the headline that Japan's inflation is the worst in over 40 years to try and deflect from the Canada's own failings. But context is everything! Since 2010….
— Japanese inflation: 8.8%.
— Canada inflation: 41.7%
(Japan's current inflation rate? 3.7%)
My primary concern is how to maximize my savings/retirement fund of about CAD300k which has been sitting duck since forever with zero to no gains.
Absolutely nothing has decreased in price except real estate sales.
you mean a depression?
Bad, mild, not at all. We hear many takes.
Biggest lesson i learnt in 2022 in the stock market is that nobody knows what is going to happen next, so practice some humility and follow a strategy with a long term edge.
I just hope it crushes the housing market to a pulp… no way we can move forward with these home and rental prices while older generations 50+ cash out millions
If you wanna be successful, you most take responsibility for your emotions, not place the blame on others. In addition to make you feel more guilty about your faults, pointing the finger at others will only serve to increase your sense of personal accountability. There's always a risk in every investment, yet people still invest and succeed. You must look outward if you wanna be successful in life.
Talk down the inflation data is not going to help 6.3 is not a real life number look at the gas bill, hydro, water.. property tax they all went up at least 10 to 20% grocery at least 30 to 50%! Crazy
So….LESS MONEY FOR SPENDING
U S A will enter into severe recession will it be amplified in Canada. Bad news is a good news for the policy interest rate.
Justine phaggettē dildeau
Same guy who thought the Canadian loonie would hit 59 cents back in 2018. I'll take this interview with a grain of salt.
The central banks screwed up. They panicked. It's obvious. Now we're getting a recession. Thanks a lot guys.
amazing how no one saying anything about garbage macklem and Powell who held rates artificially low at the most damaging time
Are you serious. Have you gone to buy groceries recently. Inflation is 3.5% more like well over 10 %. The numbers are skewed!
After government spending now in the billions more than any other time in history Bank of Canada will never get the inflation down to 2% Canadians are being lied to. The real question is when will that realization set in.
The most interesting part of that clip was the last 30seconds
Thank WEF Trudeau for inflation in Canada. This bonehead has doubled Canada's national debt in 8 long years of his criminal incompetence. Trudeau is a WEF'er and a Quebec Separatist bent on destroying Canada, the only thing he has been successful at. Trudeau is a traitor and a criminal.
Common guys. Let’s just tell us all to saddle up for serious lumps. We’re all going to take a serious haircut. Now is the time for great Canadian leadership and our brightest fiscal minds to work together if there ever was one
for what its worth, i enjoyed watching this interview… great to get a different viewpoint than the sugar coating thats done by the politicans
How about the elite taking control of your bank accounts? Cause that's all they want!
My fee went up 4.8 last year which was not enough, it will be going up 7% this year to compensate.
I don't believe this "peak inflation" talk.
Bringing inflation back to 2% by destroying the economy for the next foreseeable decade ? Wow.
So we're going to see a severe recession but without inflation coming down, since the root causes of inflation has not much to do with what's happening inside Canada. This is the most idiotic and self destructive monetary policy in the world that Canada has signed up for. Good luck for the next decade.
Purchased 2 large chocolate bars today. A 2 litre carton of lactose free milk and a 12 pack of ginger ale…. $29. Nothing to see here folks. Dont judge it was movie night with ths wife. Nomnomnom…. prepandemic was 29$ to actually go to the movies.
Ps some idiot was wearing a face sheild at the grocery store. I always thought those people were anti masks… apparently some people think a face shield does the trick.
Im pretty lost. Am I in an episode of black mirror? Can you all like my comment and maybe I can convert your likes into some sort of social credit score.
Even with this current situation of the nations economy, the market has been pretty bad until today it decided to surge. Everybody was Practically Crying then. It kept dipping. That's what you get when you feel you can navigate the process on your own. Big thank to Hilder Ferguson. I'm not bothered with how bad the Market is because my assests are insured due to her advice and I still receive my profit
Passive income does have a way of liberating people, remain eternally grateful to Ms Elaine Rittenhouse and her company for their efforts that got me to this point, finally payed off my mortgage and some crazy debts, what more could I've asked for
Meanwhile Filipino is cheating Canada immigration to get Student VISA, by submitting false Bank statements then after they get student VISA they will withdraw the money from their bank, they borrowed the money to get Bank statement. They're fooling the Canadian Gov
No way, the liberals say everything is fine.
The damage is done. Look around do you think anything is going to get better. Prices are not going to come down and yet a huge population of Canadians are on a fixed budget. What has happened is a unrecoverable catastrophe for many many Canadians
HOW? I would appreciate if you show me how to do that, I'm interested?
Despite the economic downturn,I'm so happy☺️. I have been earning $ 60,200 returns from my $7,000 investment every 13days.
2020: "No recession"
2021: "Transitory recession"
2022: "Minor recession"
2023: "Relatively severe recession"
Starvation and freezing