Huh? a recession with higher consumer prices? Why we could see a Recession with Consumer Price Inflation(SHORTAGES) – March 25, 2022,

When I write about economic deflation, I’m referring to it costing more fiat money to purchase fewer goods and services. When I write about economic deflation, I’m referring to Mainstreet, not Wallstreet. In Canada where I live, recently the Premier/Governor of Quebec announced that he will send a $500 cheque to Quebecers who make under $100,000 to help offset the rising cost of energy.

Okay, so I have two cars, one that’s an SUV, because I only use premium gas (which is a choice, I opt for because premium gas saves me a lot of money on maintenance costs) it’s about $145CAD right now to fill up my tank? Because the cost of regular gas used to be what I paid for premium gas, I know that it would cost me about $110 to fill up my tank about a year ago. I bring this up because if a Canadian is working and driving to go to work, they’re likely burning through $500 a month in gas costs alone.

I also use natural gas to power parts of my home, there’s a clearly marked carbon tax attached to my gas bill every month, my home gas bill is about $150 per month, this doesn’t include my electricity bill, I bring this up because in one month I’m easily burning through $500 on energy costs. Now in Quebec, a large chunk of the people are AGAINST pipelines, so these higher consumer price inflation numbers for the foreseeable future are here to stay, what does this mean exactly?

It means economic deflation, it means Canadians will have less disposable income to spend in the economy. Canadians have pretty good credit individually, but I like to point out that a lot of the real estate investors in Canada, see their real estate as an investment and not necessarily a home. I’m curious to see what happens to many of these investors when consumer price inflation ravages through their cash flow?

My principal residence is different from a real estate property investment. I already know of people who had to walk away from their rental properties. Now, this hasn’t become a widespread problem yet, but as consumer price inflation rages on and it costs the government more money to stimulate growth, doesn’t that sound like a recession to you?

There are some who imagine that the solution for this debt-based economy is to remove debt from the equation, well, sorry to burst people’s bubbles, but that’s how hyperinflation occurs. You see what makes government regulate the economy is that on their end, it appears that regulations on private citizens and private businesses are actually bringing them more revenue for social spending, when in fact what’s actually happening is fewer goods and services are being produced and their currency is being debased.

 

What often clouds people’s minds when they think about world reserve currencies is how they trade on the Forex markets. One fiat dollar pinned against another. Well, what happens if the cost of living starts rising everywhere? Who holds all the cards in that scenario? Answer-The countries with the most control over the means of production. Japan with all of its financial madness, still managed to control means of production, Canada and the U.S presently have almost turned into commodity countries and commodities are what the Progressive governments have decided to declare war on?

One a monetary system void of debt won’t work is if I get rewarded in the same way for working hard and not working at all, many will opt NOT TO WORK! Sure there will be many who still work, but many will take the government up on its offer to work only when one feels like it or when one is forced to work. The debt is supposed to compel people to work, to pay off the debt, but if there’s no debt to pay off and you’re rewarded simply by complying with government edicts, not only do labor shortages occur, but the productive members of society change their behavior.

I bring this up because there’s no easy way out of this mess, and what I suspect is likely to happen EVENTUALLY will be austerity measures, but this might decades! In Canada, Austerity measures should have been implemented soon after Pierre Trudeau left office in the early 1980s, but Austerity measures didn’t happen until the Jean Chretien Liberals took office in the 1990s.

During that long stretch, politicians tried to make the numbers work, until the Chretien said enough is enough and ran on shrinking government. I suspect that’s what’s going to happen and you’d be wise to prepare for it! Rampant consumer price inflation leading to economic deflation! Most likely you’ll see all sorts of stimulant cheques and free offers from the government, but the government deficit increasing will be a clear sign they’ve lost control, this doesn’t mean you have to lose control, just prepare yourself accordingly and make wise investments, even during the Great Depression, people were getting rich!

Interesting times ahead