Inflation and the central bank... again

Let's continue this exercise to prove a point, and because I find it interesting.

How Sticky is inflation

Here is the price increases/decreases for certain goods. Let's see how much well the the Bank of Canada has achieved price stability.

UP
Cereal products (excluding infant food): +5.1 per cent
-Cereal is produces in Canada, so the BOC failed to achieve price stability here.

Preserved fruit and fruit preparations: +5.6 per cent
-Most from Western countries, failed here as well.

Canned vegetables and other vegetable preparations: +12.6 per cent
-Same here

Sugar and confectionery: +8.6 per cent
-Wow, big increase here, and quite difficult to import confectionery goods, so failed here.

Telephone services: +5 per cent
-All Canadian companies here.

Pet food: +8.5 per cent
-I don't think we import much pet food from China anymore. failed.

Car insurance premiums: + 7.9 per cent
-Big failure here.

Rail, highway bus and other intercity transportation: + 9.3 per cent
-This is a made in Canada problem. Failed

Health care services: + 4.5 per cent
-Although I believe this to be the BoC's responsibility, this could be because government run systems will always get more expensive and inefficient. I will give them the benefit of the doubt here.

Tuition fees: + 4.1 per cent
-Here I will not give them the benefit of the doubt. Tuitions are increasing in large part because students are able to take on more debt.

I hope you notice the pattern, all services that cannot be outsourced are up quite significantly.

DOWN
Ham and bacon: -2.1 per cent
-Not too sure why this is. Let's give them the benefit of the doubt again, they achieved price stability here.

Pasta: -5 per cent
-Likely due to the appreciation of the dollar vs the Euro due to problems in the Euro zone. Not much influence here.

Potatoes: -21.7 per cent
-This is a pullback from the huge increase a year or so ago.

Mortgage interest cost: -5.8 per cent
-This is all BOC. Well done. Of course, this is a ridiculous inclusion. It's like including the interest rate on your car, and not the actual price of the car. The price of the car can double, but as long as the interest rate doesn't change, no impact on inflation. Just ridiculous.

Natural gas: -22.8 per cent
-BOC has little to no impact on Commodities.

Furniture: -4.25
-Thank our friends in CHINA

Women's clothing: -8.7 per cent
-China again.

Air transportation: -9.5 per cent
-I haven't notices a decrease, but let's give them the benefit of the doubt again.

Home entertainment equipment, parts and services: -8.0 per cent
-Thank you China.

Car rentals: -4.5 per cent
-Thank you US Government, keep on pumping out more cars to keep your union buddies working.

In conclusion, the Bank of Canada has a failed to achieve price stability. All products that have increased in price with the (possible but unlikely) exception of Health Care are due to the BoC's low interest rates, They only achieved price stability (giving them the benefit of the doubt) for Pork, mortgage interest, and Air Transportation.

I hope everyone can see that the BoC has had little impact on the low CPI numbers we have had in recent years. What should be clear to everyone is that if the money supply increases by 5%, our GDP doesn't change, and our CPI is 2%, that extra money goes somewhere. By ignoring this extra money, you risk creating huge bubbles and malinvestment.