Bank of Canada cuts key policy rate by 50 basis points to 0.25%, COVID-19, Debt and Carbon Taxes – March 27, 2020,
So, I’ve listened to as many Justin Trudeau interviews as I possibly can and I haven’t found any so far in which Justin Trudeau as said anything about at least pausing the Carbon Tax. I’ve listened to the Liberal Party of Canada talk in length about spending money they don’t have, but to date I’ve heard little to nothing about the carbon tax which is going to hike by 50% April 1st, 2020.
Fill up your gas tanks now, Ontario, because prices are going up | GlobalNews.ca
Furthermore, as I’ve stated, Canada has import problem, meaning that we’re reliant on imports, we’re reliant on importing Gas and simple laws of supply and demand are about to hit home during a period in which Canadians are losing their jobs and the Canadian dollar is losing its value. Now, COVID-19 is not only talking jobs away it’s also decreasing productivity, which is also a driver of pushing prices up.
No there are temporary levers the Canadian government can use, but if this COVID-19 emergence ever subsides, the harsh reality is going to start settling in. Canadians re in debt during a deflationary period, which means that their domestic assets may start to lose value while the bank of Canada keeps interest rates are kept at historically low levels.
If people can’t qualify for a house during a period in which interest rates are almost 0% because these people have no job security? Well, let’s just say things will become quite the challenge.
Bank of Canada slashes key interest rate to 0.25% | GlobalNews.ca
Luckily for Justin Trudeau, when this economy crashes he’ll have a lot of excuses, the problem, however, is that Canadians are going to assume this is an easy fix because Trudeau supporters won’t believe the Canadian economy will have anything to do with Trudeau’s deficit spending during the good times or the carbon taxes during the bad times, nor will they think that Trudeau’s economic policies prior to the COVID-19 outbreak were causing businesses to leave Canada.
The assumption by the average Canadian will be that Justin Trudeau simply had some bad luck, and had it not been for COVID-19 everything would have been fine. Already Canada’s mainstream media is protecting their Guy and this my dear reader is going to extremely problematic, when or if Canadians finally realize that our coming economic problems will only be solved via Austerity measures or a major change in economic policy. Consider reading the post below for an example of how Canada’s mainstream media will protect Justin Trudeau when this economy crashes!
With a lack of productivity because of COVID-19, the world economy is heading into a deflationary cycle, during a deflationary cycle what the private sector needs is flexibility if the private sector has no flexibility, and the belief is that we must fight deflation with artificially created inflation via the central banks and the Canadian Government, well, the Canadian government will be forced to print money which has the effect of devaluing or even hyper-inflating the Canadian dollar.
Because most Canadians don’t understand or believe in Austrian economics, things could get very challenging in the very near future! I’ve noticed that Trudeau’s Liberals think that throwing money at the problem is going to fix it, however, what I don’t think they’re realizing is the value of money is tied to productivity, cashflows to the productive and if money instead of being funneled to productive people are being funneled to pay down debts? Well, you have a huge problem waiting for you there as that equates to money basically evaporating!
Default on debts you say? Yes, people and nations can ruin their credit by defaulting on debt, but you see after a bankruptcy, interest rates go up and if you have bad policies when interest rates shoot up, similar to a bankrupt individual the government will have the problem Argentina has, which is HYPER-INFLATION!
The reason Argentina has hyper-inflation problems is that their governments can’t shrink the size of their government, Austerity measures is a curse word in Argentina, the Argentine government consumes more than it produces, in Canada, this isn’t the case yet, but with debt levels where they are and being that COVID-19 is basically a private-sector job killer, what Canada is approaching is a situation in which our government, our nation will consume more than it is able to produce and again this is why you don’t run a deficit and raise taxes during the good times, because when the bad times come correcting things is way more difficult!
Interesting Times ahead!