Op-Eds

The world got its first digital currency, DigiCash, in 1989. Nine years later it filed for bankruptcy. Since then the world has been waiting for digital currency to take over from cash – as it seems bound at some stage to do. Is 2022 the year it finally happens?

Bitcoin (est’d. 2009) is the best-known crypto currency. Bitcoin does not have any value in its own right yet it has a market value near US$ 1 trillion, almost 40 per cent of the total crypto currency market valuation. Bitcoin aspires to be used widely as a currency and has been accepted as legal tender in some developing countries, most notably El Salvador. But its price in U.S. dollars — its exchange rate, if you like — is very volatile, making it too unstable for…

On Monday the Bank of Canada and Government of Canada finally announced the renewal of their agreement concerning the country’s monetary policy framework. The announcement reconfirmed their joint commitment to the two per cent inflation target within a band of one to three per cent. With the current agreement expiring at the end of the month, the down-to-the-wire announcement had led some pundits to expect a major surprise, and even in the follow-up coverage there are hints some believe this is what happened. We do not see it that way – which is good. The Bank’s mandate remains essentially unchanged from the last renewal, and from renewals all the way back to 1995 when the two per cent inflation target was first implemented. Extending…

Inflation has risen to almost five per cent and the year-end deadline for the federal government and the Bank of Canada to announce a new monetary policy framework is barely three weeks away. Should we be nervous?

Since 1991, the framework has been an inflation-control target, and since the end of 1995 that target has been two per cent. That system has been a striking success. The CPI’s average increase over the 25 years from 1995 until the onset of the pandemic was 1.9 per cent annually. Previous five-year renewals of the inflation-control agreement were quiet affairs with only minor tweaks.

Not so this time. COVID’s hit to productive capacity has combined with massive monetary and fiscal stimulus to push inflation well…

Que fait votre argent pour sauver la planète alors que s’ouvre la COP26, la conférence de la dernière chance pour limiter le réchauffement climatique?

Une bonne partie de votre épargne, celle qui assure(ra) votre chèque du Régime de rentes du Québec, est gérée par la Caisse de dépôt et placement, qui a récemment décidé de vendre ses dernières actions dans le pétrole, mais de conserver celles dans le gaz naturel et les pipelines.

La Caisse est l’une des 295 institutions financières de 40 pays qui, collectivement, gèrent des actifs supérieurs à 90 000 milliards de dollars américains, et qui se sont engagées à atteindre la carboneutralité de leur portefeuille d’ici 2050, à se fixer une cible intérimaire pour 2030, à établir…

On Wednesday, the Bank of Canada left its target for the overnight interest rate at 25 basis points and ended its quantitative easing (QE) program, which, through purchases of government bonds, had more than quadrupled its balance sheet. This was the right call given what now seems to be persistent underlying inflation.

From now on, the Bank will only purchase government bonds to replace ones that mature. Its balance sheet will stay high compared to its pre-pandemic level but, in theory, won’t grow further. Tightening monetary policy to deal with inflation above target can now come in only one of two forms: shrinking the balance sheet by selling or not replacing maturing government bonds or, more likely, hiking the overnight…