Bank of Canada keeps key interest rate target on hold at 1.75%, Bad Times Brewing For The Canadian Economy – April 24, 2019,
Well, the Bank of Canada left interest rates unchanged, however, what did change was the value of the Canadian dollar, which dipped a bit, I expect it to return however as investors start to zero in on the Canadian economy and start to notice our changing political landscape. With that said, the reality of the situation with Canada is that we’ve dug ourselves into a hole unnecessarily and oddly enough it was Stephen Poloz that helped to fuel this debt-fueled disaster.
Unfortunately for Canadians, it’s too little too late at this point, it would actually be in the countries best interests for the market to correct sooner than later. Being that the Canadian economy, for the most part, is booming because of price controls and not the actual free market, the numbers are looking very weird and unsustainable. I’m sure by now investors are seeing it and trying to make sense of it all, but the real problem in the Canadian economy is over-valuations. Prices all over Canada are way ahead of wage growth, in a real economy, part of the reason prices fluctuate revolves around profits and losses, liberal spending vs. conservative spending and the skilled investor’s ability to catch the wave on the way up.
Well unfortunately for Canada our waves up have all revolved around Government interventions, so much so that our real economy, the small and medium-sized businesses, for the most part, are having a difficult time creating sustainable value, because the institutions fighting for price controls have made operating a business so expensive, that in order to turn a profit in Canada, you’re basically better off partnering with large corporate entities.
If you’re of the belief that this is how things have always been you’re wrong, small and medium-sized businesses used to flourish in Canada, so much so that there are laws in place that prevent individuals from opening too many businesses. Freedom was never based on being a wage slave, wage slavery is a derivative of Marxism and collectivist ideologies, who instead of working with the industrialist, so maybe they two can be a job creator instead opt to allow the Government to Fix prices and restrict business development and innovations which in reality help the poor the most.
Canada’s ability to mass produce food equates to more Canadians in poverty have access to more food, countries who can’t or don’t produce their own food, countries like modern day Venezuela as an example have to have most of their food and other essential items imported, which is a major reason why their currency hyper-inflated when the price of Oil dropped in value. A countries ability to manufacture and sustain itself is what creates a strong currency and a higher standard of living.
Now, from the outside looking in, it’s strange looking at the Canadian economy, because we have the ability to more than sustaining ourselves, so what’s going on in Canada? Well, my friends, we’ve maximized our cost of living! Wages have actually gone up, and the cost of living in Canada has actually gone down, the root problem in Canada is that Government and employees of Crown Corporations have already given themselves pay increases with excellent pensions and other benefits, that aren’t available to the private sector. Now when I speak of price controls and Crown Corporations it’s important to realize that the pricing mechanisms in institutions aren’t based on any market fundamentals. Canada Post has NO competitor, its pricing is, for the most part, is based on making itself a profit, CMHC has no competitor, it’s picking of winners and losers to give mortgage insurance too is based on it’s own metrics, with little to no concern to the residential rental markets or the commercial leasing markets that its existence has negative effects on.
These government-enforced price controls are affecting prices all over Canada and it’s important to understand that I only pointed out 2 examples of Price controls in the Canadian economy. I know of 49 Crown Corporations off the top of my head but there could be more. It’s very important people understand that people who are employed by Crown Corporations aren’t thought of as Public Sector workers. In America, it’s a known fact that the United States Postal Office is a Public Service, the USPS is constantly in debt because of this, in Canada, Canada Post is not in debt, how could it be? It sets its own prices and if a Private enterprise dares to challenge it, that private enterprise could be a legislation away from being regulated out of existence. So, similar to CMHC, Canada Post sets its own prices and doesn’t consider the consequences it has on the Private Sector.
Currently, in Ontario, and many parts of Canada there’s a push, by the Crown Corporations that be, to make it appear that there’s a marijuana shortage? This is, of course, done to create a monopoly which is used to generate money to fuel their operation. Let me make something clear, this model has been working in Canada for a long time, my point in bringing this up during the Bank of Canada keeps key interest rate target on hold at 1.75% post is because this ideology is going to be challenged in the years to come, because unlike before when Canadians, for the most part, weren’t in much debt, now we’re in an era where most Canadians namely our middle class are RELIANT on debt! If Poloz or any future BoC Governor is put in a position where they’re forced to raise or lower rates, there are 2 scenarios of disasters waiting for them.
Lower rates, the Canadian dollar might sink, thus making imports into Canada more expensive (with a dwindling manufacturing sector imports are becoming increasingly important to Canadians) or raises rates and the credit bubble might pop. What price controls like the minimum wage and these supply management schemes do is they don’t allow wiggle room, prices can’t DEFLATE, which means in Canada’s case, that the longer this destructive debt economy lasts the worse the actual economic crash will be. Beware Canada and prepare yourselves accordingly.
Bank of Canada keeps key interest rate target on hold at 1.75% – TheCanadianPress
Interesting times ahead