Supply chain vs Demand

INFLATION & INTEREST RATES
How aggressive will the Bank of Canada be in curbing inflation?
Farm land preforms well in this high inflation environment.
But….will rising interest rates curb this trend?

ENERGY & FOOD PRICES
Energy prices have been trending higher before the Russian/Ukraine conflict…now they are exploding.
Can alternative energy keep up with Mother Nature?
Food prices…they have just started to explode.
The best cure for high prices is high prices.

GOVERNMENT DEFICIT
Government’s reaction, or lack of it, to global conflicts impacts us all, emotionally and financially.
What makes this challenging is that outcomes can be distorted and it takes time to measure or quantify the impacts of deficit spending.
I’m not an economist; however, I believe the real enemy is the supply chain that has been impacted by COVID and CONSUMER DEMANDS. When the supply chain cannot service demand you will have higher prices….inflation…and rising interest rates. As logistics improve, supply and demand should start to balance out.

 
Will the Bank of Canada understand this or will quick rising interest rates cause an economic recession?

I look forward to next week when I'll be talking about Farm Ownership Models Are Changing...

Fred Mertz
Fred@thevoiceofagriculture.ca