Paul Martin's Business Update - January 27th

Paul Martin's Business Update - January 27th

One of the interesting statistics that turned up last week was inflation. Basically, it was a year-end review for 2013 and what it shows is something that many in the boomer generation are scratching their heads over.

For the most part, they grew up in an era of high inflation. Not hyper-inflation like we’ve seen in some parts of the world, but high inflation…10, 12 or 15 per cent. Prices rose steadily and it shaped buying patterns. Buy today because tomorrow it would be more expensive.

The way to kill inflation is high interest rates. We saw rates hit the mid-twenty per cent range at one point and we even had an election with promises of mortgages being restrained to 13.25 per cent. That is a far cry from today’s world where mortgage rates have been single digit for years and inflation really doesn’t exist.

The latest numbers are a stark reminder of how much has changed. Saskatchewan’s consumer price index rose by 1.5 per cent last year. And the national increase was half that much… an annual figure that used to be a month.

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