Canadian Pesos – Will a 62-Cent Loonie Be The Long Term Reality For Canadians? – March 19, 2019,
Socialism causes insecurity, collectivism causes mental health, because obviously, each human being is unique and if leaders create social based laws which go against the laws of nature, the consequences are obvious, the complication of what was once so simple creates confusion which leads to insecurity. This new global debt economy favors Main street not Wall or Bay Street in Canada. A labor shortage is something the world should take seriously, labor shortages equate to government regulations being undermined and prices for essential goods and services ballooning. Making matters worse in Canada is something that hasn’t kicked in yet which is the USMCA deal.
Trudeau would have been better off ignoring Donald Trump’s NAFTA trade talks, instead because of Justin Trudeau and Minister of Foreign Affairs of Canada Chrystia Freeland viewed Donald Trump the way people view tyrants, which in my view led to them underestimating Trumps high Business IQ. Trump’s problem with Canada stemmed from Canada’s manipulation of our currency, which is a tool Canada’s been using since Jean Chretien’s Liberals. In the 1990s the strategy was to keep the Loonie low and give the markets some breathing room to attract companies to Canada who sell into the U.S Market. This was a temporary fix to what is now a huge problem.
Even back in the early 2000s Canadian manufacturing jobs who sold into the Canadian market were disappearing, reason being is that currency manipulation created less incentive for Canadian businesses to sell into the Canadian market, so what many Canadian manufacturers did was they tested the labor in both Mexico and China and from there manufacturing jobs in Canada began disappearing while at the same time price control laws like the minimum wage started to rise. If you know anything about Europe prior to the creation of the Euro, you’d know that countries like Greece ad already had a big government prior to the inception of the European Union, the reason why Greece went bankrupt was that around 42% of its economy belonged to the government.
The government doesn’t make a profit, it consumes profits and sometimes a big government will sneak up on you. As an example, if the government grows and the private sector shrinks, what is often the case is the statistical numbers won’t reflect it right away, because remember, the self-employed often have more than one business and they might only hire a few people or have temporary contracts, what also separates business people from employees is their mobility. It’s not like one a government official makes a decree to raise wages that a business person simply has to stay put and accept the new reality, no, business people will leave and never come back and sure they might be replaced, but it doesn’t mean that they’ll be replaced by a competent business. Even Target had exited the Canadian market, because they, unfortunately, looked at the numbers and under-estimated the frugal demanding Canadian consumer.
Why I bring all this up is that if systematic changes aren’t made in Canada things are going to get brutal for us as a country. Low-interest rates aren’t going to matter soon. The reason why I said that Stephen Poloz is quite possibly the worst Bank of Canada governor in Canadian history is that he lowered interest rates when he didn’t have too, making matters worse is CMHC which is a state-owned Crown Corporation that serves as an insurance backed by Canadian taxpayers that assures Canadian banks large and small that they’ll to some degree assure them that the Canadian housing market doesn’t bottom out.
In simple to understand terms, in a real free market economy, there’s inflation and deflation, people will play the margins, however in a fully embraced Keynesian economic model which Canada has, the renters, the mortgage holders, the people on leases and loans are screwed, which is similar to Japans zombie economy, difference being in Canada is that we have no Honda Civic, no Toyota, no Sony PlayStation that makes the world say, ok we’ll invest in Canada, we’ll prop up their economy because at the very least we see potential there. What is Canada is known for? Albertan Oil which used to be a staple of Canada has been demonized, if the Political Left has its way the oil sands will be fazed out, which leaves Canada with what exactly? A bloated government, high taxes, social justice in the private sector? Does that sound like a place you want to invest in?
Being honest, I’m surprised the Loonie is as high as it is now, I think the perception that Canada will get together is still there, the markets are still optimistic about us, but if investors ever start to zero in on the Canadian economy and look at the fundamentals I think the Loonie is going to slide drastically, which will put a lot of pressure for the BoC to hike interest rates. The reason why the Canadian dollar can’t slide or be devalued too much revolves around our reliance on imports as well as our tariff system. In the 1990’s we had a smaller population and more local manufacturing at the very least in a downturn the government could subsidize manufacturers, now, many Canadian manufacturers have disappeared.
I’ll definitely be paying attention to the coming Canadian election because the results will tell me everything I need to know about the mentality of Canadians. I’ll be voting for the PPC, however, I don’t expect Maxime Bernier to win, what I want to see is who Canadians vote for Trudeau, Singh or Scheer, I can’t wait to see the results, because based on my research most Canadians can’t see the disaster coming. What I have to point out is that I don’t take the view being peddled by individuals who believe in low-interest rates, I think the opposite is going to happen, I think 10 – 15% interest rates are the only solution to this problem, the bad money has to be flushed out.
People forget that our current economy is Wall Street sham, it’s not like there’s actually trillions of dollars in CASH that’s been printed, most of the money is digital, it’s a loan, it’s a promissory note. Once you understand that, you see quickly that it’s the government deficits that are going to cause Canada the most pain. Government employees get paid and get paid with great benefits, the retirees who fell for all the nonsense about the government taking care of them for life, they’ll be hardest hit if they believed that crap. The people still working, Main Streeters, they’re the ones who are shrinking in size, that’s what people aren’t understanding. The people doing the actual physical labor in the private sector, they’ll only be screwed if they’re not smart enough to see the debt trap the government is trying to push them into. But in time even those people will be forced to declare bankruptcy or cut back on spending anyway.
REAL INFLATION is coming to Canada, Poloz lowered interest rates when e didn’t need too, did Poloz lowering of interest rates help Alberta? NOOOOO! Did it help to balloon consumer debt spending? YES! Now if the consumer has reached its peak, do you think even 100-year amortizations on the debt will help solve this problem? It can’t, the investment community is going to price this into the Canadian dollar and once this happens it’s not going to be an easy transition. Now that I’ve made my point consider reading the article below and come to your own conclusion.
Interesting times ahead
