Canada is not quite alone in the world these days, even if it sometimes seems that way, but the international environment is increasingly unfriendly and even hostile. The ascendency of nationalism and populism around the globe, led by the Trump White House, has shaken the established order. Our all-important relationship with the U.S. has been badly frayed. After a brief sunny period under Barack Obama, Donald Trump’s shambling White House and his transactional approach have shaken the long-held conviction that, though disagreements will always arise, the two countries would remain allied with basically shared ideals. Yet even after the signing of Trump’s new NAFTA, the situation is shaky and unpredictable.
We’ve entered a dark…
The Bank of Canada held its overnight rate constant at 1.75 per cent this week. Markets had completely priced this in, but nevertheless, there are reasons to be surprised by this decision, and perhaps even consider it a missed opportunity.
Let’s start with the state of the Canadian economy. Economic growth is rebounding in the second quarter after a sluggish first quarter. Some of this is because of temporary factors such as increased oil production. However, other factors, including the labour market, appear quite strong.
Average hourly earnings have grown in five consecutive months, peaking at a growth rate of 3.8 per cent in June. May unemployment fell to 5.4 per cent, the lowest rate since Canada began tracking…
Facebook has teamed up with some heavyweights in the payments industry such as Visa and Mastercard and other online platforms to usher in a new era for payments services: an international, widely accepted digital currency called Libra.
This should not come as a surprise. Online trading – often cross-border – cries out for such a payment instrument. And online networks reach full functionality only if they provide a medium of exchange that can be used to trade or transfer value seamlessly on the network.
Privacy and regulatory concerns aside, Libra thus makes a lot of sense as a business model.
But its true value may arise from somewhere else: being a credible threat to the international monetary order. Central banks…
