Bank-rate increase is wrong strategy

Re: “Banks follow suit as Poloz raises interest rate,” July 12. Bank of Canada governor Stephen Poloz has yet again raised the centralbank rate another quarter point in hopes of slaying an imaginary dragon. In continuing to do so, the bank is in imminent danger of destroying that which it is charged to protect.

Inflation, the rise in price of goods that people actually buy every month or so, is in the 10 per cent range, not the one to two per cent that the government says it is (and for this you can ask anyone who actually does the shopping and bill-paying). Yet Poloz is raising the interest rates that make all these things more expensive.

Industry in Canada has withered, with little in the way of new production facilities created, yet Poloz is making it even harder to create them.

Major construction projects are being stalled due to rising costs of imported materials, yet the carrying costs (line-of-credit interest rates) are going up, not down.

Consumer goods, imported from everywhere around the world, will be getting far more expensive due to tariff troubles, reducing the pace of consumer spending. Yet Poloz still sees the need to punish spenders and borrowers for past behaviour, pushing huge numbers of Canadians further and further toward financial Armageddon, with no imaginable positive side-effect.

Poloz should get down with people who work for a living at anywhere near the average income in this country and walk a mile in their shoes.

I’m willing to bet his feet will hurt badly. M.D. Hansen Victoria