BoC Governor's greatest hits

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Governor of the Bank of Canada, Stephen Poloz sure is a colourful fellow; his word acrobatics often incite any number of reactions ranging from giggles, incredulity and – at their best – better understanding. Macleans Magazine recently assembled a list of Poloz’s best metaphors.

Here are some of the highlights from the list.

Poloz on returning to natural economic growth:

I sometimes use a spaghetti-sauce model to help explain this. When the bubble burst in 2008, we were left with a crater, which is where we now find ourselves. If you look carefully at a pot of simmering spaghetti sauce, under every bubble there is a crater that’s equal in size. So, a 7-year bubble, a 7-year crater. Central banks have been filling that crater with liquidity, so we can row our boats across it. We need to make sure we’re getting to shore and not just hitting a rock. But when we get to the other side, when we get home and can climb out of the crater, central banks can gradually reduce the rate at which they add liquidity.

Poloz on exchange rates:

It’s like walking a dog on one of those leashes that stretch out and snap back. You might hope he’ll stick by your side, but in reality the dog is always off in all directions. By the end, your respective tracks zigzag all over the place, much like an economist’s chart. But when you leave the park, you’re still together. That’s how the relationship between the terms of trade and the dollar looks: it’s loose, but dependable.

On the positive outlook for Canada’s manufacturing sector:

With Canada’s stronger terms of trade, with our healthy business environment, with our ability to innovate, the future of Canada’s manufacturing sector is bright. Just as your favourite maple tree looks different every spring, the sector will evolve, at least on the surface.
Read the rest here.
 

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