Donald Trump suggests the U.S. is not talking NAFTA with Canada
It’s pretty obvious what Donald Trump’s plans were regarding NAFTA, the mistake Canada made, in my opinion, were the retaliatory tariffs, which in the business world were intended to make Donald Trump look weak. Will, it pan out in Canada’s favor? We’ll see. But based on my estimation, it’s not so much the immediate effects that Canada should worry about it’s the long-term effects.
Trudeau’s government is running a deficit, they’ve already spent more money than they planned to grow the public sector, and what’s interesting in the United States is the battle brewing between President Donald Trump and The Federal Reserve Chairperson: Jerome Powell who seems hell-bent on, dare I say? Doing his job correctly. So being that Trump is adding a new Tariff tax to Americans Jerome Powell is looking at the inflation numbers it’s causing ad pricing the optimism of the U.S economy into his interest rate hikes.
To add to the coming disaster heading Canada’s way is now very volatile Canadian dollar that from my standpoint appears to be propped up. One of the powers of Canada is our Banking system which is as Keynesian as it gets. The talk of the town in Canada is real estate prices but those aren’t really the loans Canada should concern itself with. The area Canadians should concern themselves with are the loans outside of the mortgage market, you don’t want the people who supply those loans to become bearish on the Canadian economy.
One of the major differences between Canadians and Americans is how both countries approach consumer debt. In America when the debt burden becomes too large for the citizens the market crashes, in Canada we get bailouts. Why Canada should be concerned about the nonmortgage loans or the loans being held by foreign investors is simple. If those sub-prime lenders disappear from the Canadian market that would result in a massive deflationary scenario. A lot of writers and speakers will tell you that a crash is coming what separates me from them is that I tell the nuts and bolts of what’s coming. I tell you how this collapse is going to happen and as I’ve said it’s a gradual collapse.
Canada has a lot of government involvement in the financial markets, our big banks are propped up and have more rights in Canada than other banks of the world. This allows the Canadian banks to control what they can control, and one of the areas I’ve been looking at is the forex markets. If you look at the numbers in Canada, our manufacturing sector is shrinking, our Oil market is in disarray, the government is growing and the unfunded liabilities that our dwindling manufacturing private sector is supposed to pay for is not going to be there to meet the demands of the entitlement sector.
Making matters worse is the cultural shift occurring in Canada, this cultural shift has little to do with race and more to do with work ethic. More and more jobs in Canada that require hard work are going vacant. These aren’t low skilled jobs either, these are high paying skilled trades jobs. Canada actually had this problem since the 1990’s but with technical advancements, in doing skilled trades jobs the problem has only worsened and it’s not being talked about that often and when these problems clash and Canada is already in debt and more reliant on trade than ever before, then we’ll start to see the economic collapse rapidly approaching.
This is why for someone like me I’d rather the economic collapse in Canada happens right now. Because when your currency is worthless and your skilled tradespeople are scarce, rebuilding is a whole lot harder and way more painful. Plus because Canadians have been raised with an entitled mentality and Leftist dogma, it’s going to be impossible to explain to them that there’s no easy way out of this mess.
As an example in Venezuela, it was a paradise but it was the entitlements of the people that caused the chaos they’re experiencing now. A lot of the youth in Venezuela didn’t work, why? Because their parents and possibly their grandparents didn’t work either, to the people that did work they got used to being dependent on the government, so when the government had nothing left to give the people that believed that socialism was moral were forced to sit on their hands and wait for their leader to come up with a solution.
This is the problem with Keynesian economics is that if applied in an effective manner, conservativism, Libratariansm the Political Right will sound like hate speech, as long as the Keyesnian economics is working. In short, my point is Canadians are assuming that NAFTA isn’t that big a deal because, for the most part, our lives are currently great. The money is flowing and we have the option to get into a lot of debt and worry about paying it back later.
It’s only when the debt gets scarce and prices start rising and the loonie begins its inevitable slide will Canadians realize the disaster they’re in. The last thing I have to remind people is that massive regulations only start to show their destruction when the easy money stops flowing. This is where America has a huge advantage over Canada. Trudeau hasn’t matched Trump on regulations and as interest rates rise and money that was taking huge risks seeks to find a comfortable shelter. Well all I will say is.
Interesting times ahead.