Bank of Canada says economy ‘finally positive’, rates to rise Around July 2018

• You can read this articles in full for yourself by going here:
  https://www.reuters.com/article/us-canada-cenbank/bank-of-canada-says-economy-finally-positive-rates-to-rise-idUSKBN1HW2WG
• http://www.cbc.ca/news/business/poloz-senate-bank-economy-1.4635747

Well, in previous posts I’ve said over and over, Canada has 2 choices hyperinflation or deflation and the BoC apparently has made the decision I prefer which is deflation. As rates rise prices come down, however prices coming down, meaning a strengthening Canadian dollar is bad of people in debt, because it means it will cost them more money to pay back their loans.

Based on my estimations what this leads to is a crash, which in my opinion is a lot better than a collapse. what a crash will look like is, defaults a more bankruptcies than Canadians are used too, but hopefully and I do mean hopefully subprime lenders won’t leave the Canadian market. Because if anything triggers them to leave it really is game over.

Now I have to add that what is really happening in Canada is kicking the can down the road, I’m sorry Canada, there is no way out of this disaster except for an economic collapse. In a country with a population of about 36 million people has nearly 4 million public sector related jobs. Public sector jobs are high paying jobs and tend to have great pensions. Canada Post is a prime example, Canada post despite what people keep saying is profitable, because it has monopolies on delivery, but what’s not profitable is their pension plan, it’s bankrupt, there’s no saving it and the only way it will stay afloat is with Government protections, regulations and entitlements.

The sad part of this are the people that think that Canada Post is the only company benefiting from the private sector, no, there are hundreds, more regulated, subsidized and Government protected industries in Canada that aren’t going anywhere and will continue to suck dry the private sector that is slowly but surely leaving Canada with every passing Liberal policy created. This is why the Canadian dollar can’t go to high but can’t be too low. Because if growth is happening and private sector is not profitable… Well that’s when the collapse will happen. Again the only really profitable private sector in Canada today are schedule 2 and 3 financial institutions.

Yes, folks those foreign banks, if they leave it’s a collapse and if they stay it’s a collapse, however the BoC can play with the numbers and ofcourse blame America or some other country if they crash. It’s basically a waiting game and because of that the hope for the Bank of Canada is that something like 2008 will happen so they can shift the blame to an external entity once this financial collapse happens. Because of the excessive regulations and because, the private sector in Canada still has some wiggle room, via Paul Martin’s economy, it can be business as usual for Canada.

But I warn you Canadians beware of these new age Liberals, they’re not smart and it’s clear to me especially when I listen to Morneau, Justin Trudeau and Kathleen Wynne that they’re not aware of the future disasters they’re causing. Yes, I hear some of you readers saying, that these new age Liberals know exactly what they’re doing. I say no they don’t. It’s a rare thing to find a Paul Martin, a Liberal who gets it, a Liberal that gets that economics is based on trade offs and not picking winners and losers. Trudeau has been chanting that “Rich should pay more” nonsense since he was a candidate, Morneau wanted to alter the tax code, removing loopholes as if Tax wasn’t a form of theft. A tax system without loopholes is Venezuela, it’s Russia, it’s Cuba.

If the government has the ability to remove tax holes they become emperors, Gods of the economy and if there exists nations that do allow loopholes that’s where capital will flow. You can’t even start a war without incentive, and no business person in his or her right mind will give up their own power to give it to a politician. It’s simple statements like that, that I know for a fact Trudeau, Morneau and Wynne would have a hard time wrapping their heads around.

This tells me that if Canada re-elects these Liberals we’re in trouble, because there’s really only so much the BoC can do. You all know I’ve been critical of the Bank of Canada, that hasn’t changed, what has changed however are jobs. The government has hired about 30,000+ new government workers in 2018. If your livelihood is dependent on the government remaining big who are you going to vote for? who are you going to encourage your kids to vote for?

The BoC maybe, instinctively sees the disaster coming and the truth is we have to see how long they can hold on. How economies end up like western Europe is jobs leave incrementally, and the population also forgets how to perform certain skills, only the people with the highest IQ’s rise to the top as manufacturing jobs leave the country, in order to solve unemployment the government seeks to hire more people, but then realises that it needs the private sector to feed the government, so it tries to raise taxes on the private sector calling them tax cheats, so more private sector jobs leave taking their money with them and that’s how society begins to rot.

Now in Canada we’re becoming more and more like Venezuela except instead of oil, banking and the financial sector are our profit centers. The BoC’s job is to watch the numbers, so as they see these numbers, in order to keep the financial sector propped up the BoC must raise interest rates to at least be competitive, globally. Canadians forget we’re in a global economy now, it’s not like before, with technologies other countries can compete with us and take businesses away from our country. Most Canadians think of the big companies leaving, but it’s not really about the big companies, it’s those small manufacturing companies you need to pay attention too.

I know there are people saying negative interest rates are working in some countries, yes negative interest rates are working in countries with a profitable, robust private sector, countries where their private sectors aren’t reliant on schedule 2 and 3 lenders, private sectors that have safe profitable public and private stocks, countries that manufacture quality items that can be bought at the retail sector. Maple syrup s. Swiss cheese, Canadian electronics(i couldn’t even think of a company) vs. a swiss watch. A Japanese Honda Civic vs. a Canadian…(No Canadian owned car manufacturers), Canadians oil is dug up from the ground and shipped out of the country. American’s do all types of things with their oil.

In closing… Smart move by the BoC if they raise rates, because if they don’t hyperinflation would be inevitable.