2% CPI Is Destructive To A Currency
This morning Canada’s Central Bank lowered its policy rate as “inflation” has returned to 2%.
I do not understand the fascination that central bankers have with 2% CPI. If prices are increasing by 2% each and every year, the currency is devalued by 2% each and every year. In a productive, healthy economy, prices come down. 2% CPI may sound harmless, yet it is anything but harmless.
See the currency destruction in our chart below at 2% CPI. 2% annual CPI means 2% currency devaluation each and every year.
