YOUR MONEY

YOUR MONEY

Carney bows out -- smiling

Mark Carney, head of Canada’s central bank, has just pronounced how great he is in his most recent update on the economy.

Yes, interest rates will stay at 1% for the foreseeable future, inflation is under 2%, and the housing bubble is in check, and the overall economy is doing fine, thanks to his stewardship.

Sounds great and a fine last note for someone leaving to take over as head of the UK central bank.

We should all sing Carney’s praises and thank him for saving our ship from sinking.

BUT

The ongoing 1% prime rate is a disaster for pension funds and insurance companies and even banks!  And Mr. Carney has no real choice as it is U.S. Ben Bernanke’s policy as well, the EU’s and Japan’s.

The housing bubble, if it has really been deflated, is the doings of Federal Finance Minister Jim Flaherty and his imposition of all kinds of ‘restrictions’ on home financing over the last year or so.  He is the one cracking the whip on this issue, not Carney with his meaningless ‘speeches’ and ‘pleading for self-restraint’.

And even the value of the Canadian dollar, which has dropped in the last 2 weeks to 3 cents below the U.S. dollar – hopefully helping exports  (but hurting imports and adding to INFLATION) -- is not Carney’s doing though he has repeated spoken for years of the harm a high Canadian dollar does.

China’s slowing demand for raw materials and the drop in tar sands oil prices has done it – as the world of currency speculators – oh, I meant investors – have now bet against Canada’s future growth and improvement in 2013.  The drop in the Canadian dollar – against the U.S. Greenback and all major currencies - says other people think we are going to have a worse economy this year, even worse than those great debtors, the U.S. and Europe.

So thank you Mr. Carney for your economic leadership and single-handed successes.

Go to England, and may the Fates, U.K. Finance Minister and currency speculators make you look a genius for your pronouncements.