It is a relief that the U.S. Federal Reserve Board is not veering off into climate theology or other mission-irrelevant distractions. While recent comments of the Fed’s chair, Jerome Powell, were unequivocal, comments from the Bank of Canada have not been as definitive. Amelioration of real or perceived non-economic matters, such as largely social or cultural ones, should not have any share of these institutions’ attention.
Ensuring the soundness of Canada’s national currency, our beleaguered loonie, via shrewd and careful management of the supply of money should be the primary mission of our central bank. All too often since the Federal Reserve Board and the Bank of Canada were established, both have performed this function badly. Since the beginning of the 20th century, both the U.S. and Canadian dollar have lost over 95 percent of their initial values. Current stubborn inflation is but the latest episode….