2025

I have two main problems with inflation. First, I view it as a form of theft, whereby the government is stealing from our earned savings. Second, I view it as an undermining of democratic principles as legislators no longer have to obtain the consent of the citizenry on budgetary matters through tax policy.

With respect to the former, holding money in your bank account is not a viable option as the value of that cash will decrease by the end of the year, and, therefore, inflation is said to be a tax that eats away at your savings. Obviously to get away from this effect, people withdraw their money and put it into properties or stocks, which drives their prices up, and when it comes time to sell, the CRA registers that as a taxable income/capital gains, even though the increase is purely as a result of inflation. What happens is that we, the citizens are trapped into paying for a government that cannot properly manage our money supply.

With respect to the latter, from 1867 to 1917, Canada raised funding principally using import duties. The 1917 War Income Tax Act was slowly rolled out as a means of taxing the ultra wealthy, and it was sold as being rather modest. This was also the case in the US when it was enacted the sixteenth amendment in 1913. Governments then turned around and mismanaged the economy, and tried to tax and regulate their way out of those mismanagements, as was the case during the Great Depression. When the US, and by extension Canada, went off the Gold Standard in 1971, governments, instead, resorted to inflating the money supply. This caused a secondary problem due to pension contributions which were pegged to inflation. This caused a spiral where governments had to further inflate the money supply. The accelerant on this fire was the interest payments on the borrowed money. The governments solution to all this mismanagement, then, is more government. And we see that even at a macro level, the citizens are trapped into paying for a government that cannot properly manage our money supply.

The reason Canadians are miserable, and the reason that we have no industry, and the reason we have such high property prices, is, in part, due to the fact that we have rampant inflation which is introducing uncertainty into our lives. We either need to peg the Canadian dollar to a stable commodity, like gold, silver, or perhaps BTC, or we need to get the government out of the business of currency altogether and let the market fulfil that need. Or better yet, both. We must not give those with the discretion to spend money, the power to print money.