Article content continued

Call the outlook “rosy” if you want, but those are the conditions that typically put upward pressure on inflation, which the central bank is mandated to contain. That’s why Poloz and his lieutenants raised the benchmark rate last month. And it’s why they signaled they will continue doing so; borrowing costs still are delivering lots of stimulus to an economy that doesn’t appear to need it.

“If Poloz believes Canada is ‘at capacity,’ and it looks like the U.S. is there too, then this is the stuff of inflation scares,” Jeff Weniger, a strategist at WisdomTree Asset Management Canada, wrote in a blog post on Oct. 29. “Of the forecasting outliers (those pencilling in 2 per cent or 2.75 per cent for year-end 2019), we think the latter camp has a better chance of being proven correct.”

The Rosenberg view deserves attention for a couple of reasons. One is that he’s been right before: the former Wall Street economist who now works in Toronto for Gluskin Sheff + Associates Inc. is among the relative few who can claim they saw something bad happening ahead of the Financial Crisis.

Rosenberg also has a large audience. His writings show up in both the Financial Post and the Report on Business, and he is often quoted by Bloomberg News and others in the financial press. The man has a megaphone, and late last month he was using it to condemn the Bank of Canada as a collection of idiots.

“How can anyone in their right mind declare that the outlook is anything close to constructive when the Chinese stock market is down nearly 30 per cent from its highs, the ex-U.S. global MSCI is off nearly 20 per cent from its 2018 peak, the entire world equity index is down 11 per cent and the TSX is down seven per cent?” Rosenberg wrote in a commentary for the Post on Oct. 25.