There’s an age old expression on the prairies .. “if you don’t like the weather, wait a few minutes, because it will probably change.” I never thought we would be saying that about the economy! The longer view on things like oil prices, the value of the loonie, and interest rates is quite astounding, but even a 12-month comparison is rather stunning.
Last June, oil was well over $100 U.S. per barrel. Today it’s heading for $40, or lower. The dollar was above 95 cents U.S. Now it’s struggling to stay above 80 cents. Interest rates have been at record lows since 2010. Now they have gone even lower, rather than higher, as all the ‘smart people’ had been predicting.
How can governments possibly make budgets in the face of all this? Joe Oliver, who is Minister of Finance in Ottawa, has thrown up his hands. He says there won’t be a budget until at least April. The NDP and the Liberals say that Stephen Harper and company are “making things up as they go along.” It sure looks that way, but what would they do in his place, given the ‘weirdness’ of the economy?
After the global meltdown that began in 2008, the folks in Ottawa sounded very smug about how well this country weathered the storm, compared to the U.S. and elsewhere. How things have changed, and might they change back at some point? To find that out you might as well throw darts at a map on the wall.
More than ever, economics is truly the ‘dismal science’. There does seem to be one constant though. The businesses that began long before the digital age, namely the banks and the railways are making more money than ever, because they always seem to figure it out. CP and CN have even managed to move grain to market, unlike 12 months ago when they blamed it on the weather.
I’m Roger Currie
Photo by Paul Bica