Pierre Poilievre not fit to elect Bank of Canada governor

Pierre Poilievre fueled his successful campaign to lead the federal conservative party with an effective message that the high inflation is Justin Trudeau’s fault. Poilievre came up with the Twitter meme JustinFlation, which he used in 15 campaign news stories.

To his credit, Poilievre also suggested solutions. For example, Poilievre stated, “The Trudeau government is ruining… the Canadian dollar, so Canadians should have the freedom to use other money, such as bitcoin… Choice and competition can better give Canadians money and… let Canadians opt out for inflation with the option to sign up for crypto.”

When the Bank of Canada published survey results showing Canadian bitcoin owners “scored lower on questions testing financial literacy…than non-owners,” Poilievre — a bitcoin fund owner himself — referred to the bank as “financially illiterate.”

He then promised to “fire the governor of the central bank” [and] replace him with a new governor who would restore our low inflation mandate.” Annual inflation has been above the 1 to 3 percent target agreed by the bank and the Minister of Finance for eighteen months.

Poilievre’s first solution to fight inflation – unsubscribe with cryptocurrency – was a disaster. He made his proposal on March 28 at a restaurant where he bought a shawarma with bitcoin, the most widely used cryptocurrency.

April was the first full month that Poilievre’s fans could have followed his lead in opting out of bitcoin inflation. August was the most recent month reported by a Consumer Price Index (CPI) report. The number of Bitcoins needed to pay for shawarma and the other goods and services covered by the CPI rose 84 percent in the four months from April to August, while prices measured in Canadian dollars rose just 1.9 percent .

In just one month, from April to May, the cost of living, measured in Bitcoins, rose by 30.1 percent. June was even worse. Monthly inflation reached 31 percent for Canadian bitcoin users. Each of these monthly inflation rates in bitcoin terms exceeded Canada’s highest-ever annual inflation rate of 21.6 percent from June 1919 to June 1920.

The best that can be said about Poilievre’s crypto plan is that the price increase measured in Bitcoins fell short of the technical definition of hyperinflation – 50 percent monthly inflation. But consecutive monthly inflation rates of over 30 percent for bitcoin users were bad enough to warrant its own name. I nominate HighPierreInflation.

So far, choosing HighPierreInflation measured in bitcoin has proven to be 44 times worse than JustInflation in Canadian dollars. Poilievre’s bitcoin fiasco is significant because it shows how incapacitated he is to run the second leg of his inflation-fighting platform — replacing Bank of Canada governor Tiff Macklem if the conservatives are elected.

The prime minister cannot immediately fire the bank governor. But even if Macklem rejects a newly elected Conservative government’s demand for his resignation, Prime Minister Poilievre would appoint a new governor when Macklem’s term expires in 2027.

Electing a new governor of the Bank of Canada will be the most important decision Prime Minister Poilievre will ever make. The bank governor has more power over the Canadian economy than the finance minister.

Who would Poilièvre choose? He credited Prof. Saifedean Ammous and Robert Breedlove for teaching him about crypto economics. These proponents dream of a day when bitcoin and other cryptocurrencies will replace money controlled by central banks set up by governments.

If these crypto dreams are not realized by the time Poilievre is elected, he will have to pick a new Bank of Canada boss who knows how to manage inflation in a dollar-based economy. Poilievre’s crypto experts will not help, neither as potential replacements for Macklem, nor as advisors on who to choose.

A man who depends on obscure crypto visionaries for economic policy advice and has his followers choose a high inflation rate of 84 percent in just four months, cannot choose the next governor of the Bank of Canada and cannot be elected prime minister.

Adil Sayeed is a government policy advisor.

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