Canadian dollar below 80 cents until end of 2017 – Predictions
The Canadian economy is in a very weird place right now. As of November 2015 most of my predictions came through, the only prediction that hasn’t come through is I predicted it would cost $0.69 U.S cents to buy 1 Canadian dollar. My prediction at that time was based on the U.S Federal reserve raising their interest rates which they should have done but haven’t.
Well now we have a Liberal majority government who will run a deficit to stimulate the economy,,, down the road. Has this strategy ever worked? Of-course not and it won’t work now however; we’re in a different age and an interesting thing happens when governments run deficits… What’s that you ask??? Well usually interest rates go up… If Prime Minister Justin Trudeau runs a deficit and interest rates don’t go up I would have to conclude that we’ve definitely entered into bizarro world.
Canadian governments often forget their place in the world because they have America for neighbours. The Usd dollar has the world’s reserve currency status while the Canadian dollar does not. So while the Americans can run deficits into infinity Canada has to do things differently. If the Canadian dollar doesn’t rise or hold steady at around $1.33 Canadian for 1USD (which is high if you ask me)
Canada is going to have a lot of domestic inflation problems going forward.
In years past like the 90’s for example inflation wasn’t that big a deal because Canadians weren’t carrying around $20,000+ worth of debt EXCLUDING auto loans and mortgages.
That’s a lot of money and again what makes Canada different from America is that we can’t hide it. America can hide their debt because the world constantly bails out American retailers by propping up the USD, which drives prices down in America and forces prices to go up in other countries.
Canada is a developed country with Human rights and Unionized workers, this is why going forward things are going to get real interesting. In a third world nation when hyperinflation happens the people rise up topple the government and then the U.S or some other world power “might” step in and “stabilize” things.
When a developed country experiences hyper-inflation leaders make speeches and blame someone while the middle class watches their wealth disappear.
The time to start a business is NOW!
Hate to tell me fellow fellow Canadians this but unless you work for the government or have a very secure job like a plumber, lawyer, accountant, doctor etc. you’d better either learn how to invest or get yourself a business of some kind. Because what inflation really means is your CANADIAN DOLLARS will buy less and less and if your paycheck doesn’t keep pace with inflation and you’re already indebt it’s going to be a whole lot harder to get out.
Think a higher minimum wage will fix the problem think again…
People forget that running a deficit is EXPENSIVE especially when you’re running a deficit in the BILLIONS. Maybe Trudeau and his staff have some tricks up their sleeves but again we’re living in historic times. Canada has never been in this type of world before, running a deficit and raising interest rates wasn’t a problem in the 90’s or even before the U.S housing market crashed.
But there are serious consequences to pay for stimulating the Canadian economy with cheap money when you have so many Canadians in debt.
Conspiracy theorists complain all the time about the gravy train coming to end in the United States the fact still remains that the US Dollar is used all over the world. When you go on vacation as a Canadian if you’re planning to walk with currency it’s recommended that you walk with U.S currency, if the stock market crashes investors usually cash out in U.S dollars. When nations like Zimbabwe have a currency crash the people prefer U.S dollars.
Everytime someone buys US dollars, the U.S dollar strengthens.
If Trudeau does what he says he will do the value of your Canadian dollar will be devalued. Logically when this devaluation occurs, Canadian employees might see a wage increase which will give the illusion of prosperity and help the Liberals to collect more taxes on “high income earners”.
Things are getting better they’ll tell Canadians, see you’re making more money they’ll say but what they’ll ignore because it’s typical Liberal practice is the COST OF LIVING INCREASES that won’t allow most Canadians to get out of debt.
If I were you I would start a business or get really good at investing
Under liberal leadership on thing is guaranteed COST OF LIVING will go up. The years to come are going to be horrible for you if you’re drowning in debt. If you can consolidate your debts if I were you I would do it now before interest rates in Canada start going up.
My number one complaint with Harper wasn’t the environment, it was his finance minister, the conservative running the Bank of Canada Stephen Poloz. Who in my opinion lowered interest rates when he didn’t need too. The Canadian economy was doing fine and would have been fine if Poloz had interest rates at 2%.
I had been saying for years(2009 – 2015) don’t allow Canadians to get into cheap debt now, because that was a strategy we could use later on if things got progressively worse. The Canadian housing market never crashed, the fundamentals of Canada’s housing market have always been strong but it’s those other debts, those sub-prime loan shark lenders, those entities are going to put Liberals policies to the test.
Already the 905 section of the Greater Toronto area are facing huge tax hikes which could help bring down the value of their homes. Oddly enough this is the section that secured Prime Minister Trudeau’s victory. Although Downtown Toronto or the 416 area saw huge property value increases the 905 region wasn’t as lucky. Why does this matter you ask???
It matter because there really isn’t a mortgage or housing meltdown going on in Toronto or Vancouver, but there’s a lot of bad debt floating around Canada, bad debt that most Canadians won’t be able to consolidate .
This bad could slow consumer spending, this bad debt could make people declare bankruptcy this bad debt will create unforeseen problems that will make Trudeau’s plan to run a 3 year deficit extend way beyond that.
I disagreed with Harper promising to balance the budget, because in my opinion that’s why Poloz lowered interest rates, which lowered the Loonie and created artificial inflation. I found that Harper was playing politics with people’s money which left the door wide open for Trudeau to say “hey let’s purposely run a deficit”. Because if rates remained at 2% in this global economic climate Trudeau wouldn’t have room to run a deficit, plus with lower oil prices the loonie would have been around 1.20CAD for 1USD anyway which would have been respectable.
But Harper playing politics with the economy gave the Young handsome Prime minister Trudeau the green light to sell Canadians on a similar ideal that Harper was selling. Because most Canadians don’t understand or care about the economy, all Trudeau had to do was give Canadians the illusion that he would hand out free money. It worked!
If you’re a conservative ACT LIKE A CONSERVATIVE Harper’s government started to look Liberal and Canadians thought to themselves well why go with a half wit Liberal when we can have the real thing.
In closing…. My advice to you is this…
If the Canadian dollar remains below 80 cents until the end of 2017, Canada is going to have a lot of inflation problems.
If you’re a saver with no debts this liberal government might actually be of service to you. Liberals are good for main street in this way. It’s easy to know where to put your money when Liberals are in power. If you’re a conservative minded person not in debt this is actually the best time to flex your muscles and show socialist why socialism doesn’t work.
If you’re a conservative my advice to you if you’re not in debt is pay attention to where the liberals are going to spend money. Liberals love to make speeches and inspire people with illusion of unearned wealth, The rich in America are so much richer now because of Obama. It’s so easy to know where to SAFELY put your money when Liberals take power.
So take notes whenever the handsome Trudeau speaks ask yourself what will the Liberal government spend their money next? Maybe a renewable energies project, a save the whales trip, a climate change carbon tax pipe thingy that sucks polluted toxic air and then spits it into outer space? Whatever it is be ready and prepared to profit from it, position yourself I don’t through all your money into one project. Trudeau aims to please so let him… Just make sure you put yourself in a LIQUID financial position to profit.
When Liberals take power pay close attention to where they’re going to spend money. Most liberal plans are proliferated by the private sector so if the liberals are investing in solar panels for example pay attention to the companies they’ll be using and find a way to profit from that transaction.
If you have US dollars my advice… don’t sell them, whether this deficit spending works or not one thing is for sure cost of living will be way higher in Canada than it will be in the U.S in 2017 regardless of the loonie appreciating or declining.
If you’re in debt now would be a good time to get yourself out. Most people that are in debt under Liberal leadership remain in debt when the Liberals lose power. People always scream for higher pay, but the real problem is cost of living increases and Liberals are great at increasing the cost of living. So if you’re in debt try to get out as soon as possible or consolidate before the Trudeau deficit spending begins.
Deficit spending when Canadians are in historic debt levels this is going to be an interesting 4 years.
I wonder 4 years from now when Canada is still running a deficit if people will remember Trudeau’s 3 year deficit plan. Probably not! That’s the beauty of politics people have a short memory and want to believe money can grow on trees.
Well that’s all folks!