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THE HERALD Wednnday July I Page 11 US interest rates are lower than ours Your Business Vm a Diane Matey Htm Service Shortterm interest rales on the wholesale money market are more than four percentage points higher in Canada than they are in the United States Administered rates also are historically high relative to com parable US rates American banks for example have cut their prime business lending rate twice in the past five weeks Canadian bankers have not budged The US prime stands at per cent at many banks compared with per cent in Canada All that is holding Canadian in terest rates up at this point is John Crow governor of the Bank of Canada One would not have thought it possible for the central bank to sway the money market to such a degree At last we have an interestrate policy that is made in Canada It is hard to understand why rates are so high In the past a three- or fourpoint spread was us ed briefly to prop up a faltering ex change rate Today the Canadian dollar is doing fine Policymakers also have used high rates to curb growth Yet economists agree that growth In Canada has slowed even more than it has in the United States So strong growth could not account for Mr Crows stubborn stance FIGHTING A PHANTOM Mr Crow is keeping rates high to curb inflation now running at about five per cent a year Curious ly the governor himself has admit ted that most of the price gains over the next few months will come from higher taxes hardly an infla tionary phenomenon Tax increases have the same slowing effect on the economy as high interest rates Once the tax increases have worked their way through the pric ing structure it is hard to see where cost pressures might come from Indeed Mr Crow may achieve his target of zero inflation much sooner than he thinks The spectre of no Inflation con jures up a scary image deflation By keeping interest rates unreasonably high Mr Crow could be flirting with tumbling prices and economic disaster evocative of the 1930s Once demand collapses he may not be able to revive it by cutting interest rates To be fair Mr Crow has been right in the past In Central Canada at least the economy has been far stronger than anyone predicted a year ago THINGS HAVE CHANGED But things have changed and monetary policy must change too Although a onepoint drop in Cana dian interest rates is more than justified market watchers doubt that it Is imminent If a drop does not come soon it will look like something strange is going on as if the federal govern ment were trying to fix the ex change rate at the expense of the domestic economy Good service good coverage good price- Thats State Farm insurance Central Ontario unemployment rate plunged to 47 per cent From the Ottawa Bureau of Thomson News Service Central Ontarios unemployment rate plunged from 72 per cent to per cent between 1985 and to make it the countrys third hot test job market according to a Statistics Canada report The federal agency excluded the census metropolitan areas of Toronto Oshawa and Kitchener- Waterloo from the Central Ontario job market analysis and reviewed those areas separately Toronto placed first among the areas examined in the review of the postrecession employment market Unemployment in the countrys largest urban centre dropped sharply from per- cent to 37 per cent in the fouryear period The KitchenerWaterloo area was fifth the country after unemployment dropped from 72 to 51 per cent while Oshawa was just behind it in sixth spot with a rate that dipped from 72 to 52 per cent In the tightest labor markets were all in or bordering on Ontario the Statistics Canada figures show By contrast nine of the worst areas with unemployment rang ing from 11 per cent to more than 19 per cent were all in the Quebec and Atlantic regions The job markets over the four- year period Improved in all areas however and the national unemployment rate dropped steadily from 105 per cent to percent Statistics Canada intends to review the job market every quarter year Optimist Club winners The Optimist Club of Georgetown is pleased to an nounce the following winners for the Trip of the Month raffle for the month of July Trip prize is a travel voucher for valid for any travel facilities available through TWG Travel Inc Georgetown It was won by ticket No Millie McNiven Georgetown Consolation prize of cash was won by ticket No Pedersen The club thanks all ticket pur chasers for their support All pro ceeds are returned to the com munity through our many pro jects The next draw will be on Aug 8 For further information- con tact Alan Fanner at 8770109 I Simon CHARTERED ACCOUNTANT Services Provided Accounting Financial Planning Auditing Business Valuation Tax Consulting Computer Consulting Estate Planning Processing Training Management Services Phone 416 8770109 132 Main Street South Georgetown Ontario o CO o CO I o CO 8770109 8770109 SUMMER HOOftS MondFriday Saturday am530 CLOSED Thermal 489M Wnumul UK Thermal Please Specify Machine LIST SPEC RL rl 1HM 1110 DEANS PAYROLL BOOKS PAYROLL BOOK IhEMPLOYEE PAYROLL BOOK PAYROLL BOOK PAYROLL BOOK MOEMPLOYEE PAYROLL BOOK EMPLOYEE PAYROLL STATEMENTS IV0C1 SPEC EA 865 EA EA EA 2400 EA 340 OFFICE SECT i4JmjFJJi441