Canada sells off most of its gold reserves, Canada has less than one tonne of Gold, Fort Knox and the potential decline of the Canadian dollar!

We all pretend sometimes, it’s fun to pretend, but when news breaks that your country is selling off its Gold Reserves, one would assume there would be protests in the streets, right? No, why would there be protests in the streets? It’s only gold, now, we use fiat money, that’s backed by the Government, the Governments ability to inflate and deflate the economy is a great thing, right? Keynesian economics is a fantastic idea, right? I mean it’s worked up to now. I’m writing this blog post, I’m online on the internet and life is fantastic. This expansion happened under Keynesian economics, so why would there be pushback against this?

Well, the pushback exists because these experiments have failed in the past, but the difference is that in past civilizations there wasn’t a Fort Knox, there was no electricity, and governments had to literally invade other nations and strip those nations of their treasures to stimulate the economy. When Empires historically stopped invading other nations what would often happen is the leaders of those nations would often have internal battles of what was the best way to the government a nation with limited resources.

If you’re a parent or you’re a parent with kids, you figure out real quick that children get bored, well people get bored also and when people get bored they opt for some sort of stimulant and in many ways this is why humans have always had a disdain for centralization. China, Russia, Cuba, these countries require a huge government to micro-manage the livelihoods of their citizens, you can’t say certain things in Russia, China or Cuba that speak negatively against their Government, now to those of us in free countries we tell ourselves that there’s no way this stuff could happen here, in Canada?

However, when the Marxist doctrine was first presented to people it was presented as a cure for exploitation, a cure for greed, a cure for corruption, a nation designed for the betterment of the people as a whole, right? Well, when you live in Canada and you’re 100% reliant on Government money, suppose one day the money system in Canada fails? then what? A lot of people think that if the Canadian dollar crashes that Canadians won’t find a way to survive. If you think this way you’re wrong, very wrong. Money, whether it’s fiat or Gold, is nothing more than a convenient form of trading.

What would actually affect Canadians the most would be understanding that there would be consequences for their financial actions, if there was a gold standard or we were using Gold as money, people’s behavior would be forced to change, the government could no longer make promises it failed to deliver on, because if government made the mistake of picking the wrong economic winner the effects on the citizens would be immediate. Because the Bank of Canada can print money based on the actions of the government, the pain is usually on felt years later and this financial pain usually comes in the form of small inflationary doses.

It’s not common in Canada for there to be hyper-inflation like what’s been seen in the Vancouver and Toronto real estate markets. However, in a real economy that’s backed by something tangible like Gold, there would be no way to inflate the housing market to the levels we see today where some Canadians spend 80% of their income on where they live, because the people lending the money on real estate would know that there’s a possibility that their borrowers might not be able to pay back the loan and would, therefore, charge a higher rate of interest rates, which of course would lead to lower real estate and rental prices.

However, government intervention by means of the CMHC who works alongside the Bank of Canada and the Federal Government all work in conjunction that almost guarantees investors that their money will be returned to them with interest. This is, of course, the Government picking winners and losers, so the loser in this instance are the buyers and renters who are forced to pay higher prices to protect the profits of the lenders.

The primary reason why people like me don’t think too much of our fiat monetary system is because as an individual, I can still purchase Gold with Fiat dollars. Now, if that relationship was ever severed, then I’d be worried, but for most people who think the way I do, I could care less what government money is backed by, it’s up to me to purchase things I believe will be cash flowing assets no matter what happens to our currency.

Even in Venezuela there are people surviving, now, of course, many of them have had their standard of life destroyed, but if you understand the concept of money as a form of barter as a form of trading, you could honestly care less what happens to the economy, actually people who understand money focus more on how they’d protect their families in the event of an economic collapse, there’s this myth that Canadians aren’t armed, well people can believe this myth all they want. What Canada has a lot of, are responsible gun owners. I bring this up because Canada’s sold off most of its Gold Reserves under Justin Trudeau’s watch.

Now, every true classical Liberal or true Conservative knows that selling off Canada’s gold is going to lead to a declining Loonie(Canadian Dollar). Why does the U.S spend some much Fiat dollars protecting Fort Knox? Because in the event of a currency crash which is inevitable that’s where America’s true wealth is. If you read the 2016 CBC article below:

Canada sells off most of its gold reserves – CBC

It gives a softer side of what’s in store for Canada’s currency, Canada has long been all in on Keynesian economics and quite frankly it’s why we’ve had such a stable banking culture, what’s actually made it unstable is Ottawa dismantled the barriers between the so-called four pillars-banks in 1992, barely anyone talks about this anymore. You’d have to understand the Glass Steagall Act to have any idea of what I’m talking about. However, you can read and learn about it by clicking the link below:

In short, the financial markets have become a casino, a lot of us, myself included are basically short-sellers, we short-sell the market because it’s become increasingly easy to see who the morons are. This doesn’t mean our investments are right everytime but one thing we all know, one thing we all see coming is the pension crisis that’s crashing all over the world. Now, people with defined benefit pension plans, think they’ll be excluded from this pension crisis, but once crashes happen typically it’s the currency that takes a hit and the market re-evaluates pricing, this of course, causes behaviors amongst people to change and also it tends free open the markets as everyone all of sudden remembers how wealth is created.

Government actions cause reactions, and Canada has positioned itself on the wrong side of history. Now, the big problem, of course, is in the United States, but you see here’s the thing, The U.S enables the world to trade freely, one of the reasons I can’t call myself a Libertarian is because I understand the Neo-Con argument. if you read anything about the dark ages, the root cause of the dark ages was trading routes being interrupted. Somali pirates, if you think that’s a problem now, well if the U.S got rid of its military bases, well there are no guarantees that World War 3 wouldn’t happen as more countries fight to secure trading routes. If as an example Canada needs Russia to trade with a nation, Russia can charge us a Tariff, Russia recently annexed a portion of Ukraine over debts owed. Marxists believe in price controls, Marxist believe that a centralized power should control the economy, well you remove U.S military bases and well I can say is let’s see how things play themselves out.

Now, my position regarding achieving economic peace on earth revolves around trading with nations who aren’t involved in nefarious acts, however, in countries like Canada and America via the Leftists there’s a deep-rooted entitlement culture that quite frankly wants something for nothing. China exists because Canadians, Americans and other western nations priced themselves out of a job, fiat money doesn’t exist because the government is evil, fiat money exists because we’re all corrupt. Most of us don’t want to admit it, but I hear it all the time, immigrants are pushing wages down? I want higher minimum wages, I want the government to implement more financial regulations, I want the government to increase welfare spending, I want job protections.

These Left and Right political Idea’s go relatively unchallenged and so the government grows and grows and grows. Now, when Executive Order 6102, known as FDR’s 1933 Gold Confiscation happened it didn’t cause much of an uproar, primarily because a lot of American’s saw it coming and what came from it was not only Fort Knox in 1936 but a great depression which extended until 1939 primarily because Franklin D. Roosevelt intervened in the economy. Now, I have to be honest I’ve never seen a Prime Minister spend money as recklessly as Justin Trudeau, quite frankly these Liberals have killed the need for an NDP party because in my opinion Trudeau has basically taken the NDP platform and sprinkled some Corporatist frosting on top of it. Canada is such a corporatist nation that a large segment of the Canadian population is simply not interested in joining Canada’s armed forces.

The reason why most people are anti-welfare state is the problem it creates if I work hard and you don’t why should we both enjoy the same quality of life, If we both work hard, but I work smarter, why should we both enjoy the same quality of life? If you and I work at the exact same job doing the exact same work, however, I invest my money smarter than you do, why should we both enjoy the same quality of life? If you and I work at the same job but you work fewer hours and are less reliable than I am, why should we both make the same annual salary? There are pros and cons to freedom, for every action, there’s a reaction, my personal belief is education about what made Canada become the nation it is today is very important to teach our children.

The history our children are taught in school gives them limited knowledge on what makes our country work, which is why the Canadian dollar is going to slide continuously. If something isn’t done to sway the minds of Canadians we’re going to learn the hard way, why Fort Knox exists in the United States, currencies crash all the time, it’s not uncommon for it to happen, the problem with a crashed currency is propping it up again, because once it crashes onlookers begin to look at your economy more closely. In Canada, for the most part, our currency is looked at as a Petro-Dollar, sure our housing market is inflated, but that’s become the norm all over the world.

When a currency crashes or it dips to a level that worries the Forex markets, that’s when people start looking into Government policies, because you have to understand that most investment firms quite frankly don’t have enough time or resources to look into the inner workings of the Canadian economy, however from the outside looking in, everything in Canada looks fantastic, especially when you put us next to underdeveloped countries, even next to most developed countries the Canadian economy looks great, what doesn’t look great, is the future of the Canadian economy, via regulations Canada is in a bad place, via regulations Canada has lost flexibility and quite frankly if Trudeau has his way with his Carbon Tax Implementation Canada is screwed.

Canada as a country has less than one tonne of Gold, Alberta is having economic challenges, a large portion of the Canadian population is in debt, UBER is now a huge part of the Canadian economy, fewer Canadians are joining the armed forces and Canada’s prime minister has talked about the implementation of a carbon tax. Do you see the potentiality of a declining Canadian dollar in 2019?

Andrew Scheer says Trudeau will hike carbon tax if Liberals win 2019 election – NationalPost.com

Interesting times ahead.