Canada’s Central Bank are using their price control mechanism to help out their struggling Prime Minister, who has been cashflow NEGATIVE since taking office in 2015, leading to rampant inflation.
Central Banks cuts, benefit BULK BUYERS, so mortgages will be cheaper, which may fuel another housing “boom” as well as increase “rental prices.” Because of the structure of Canada’s TAX CODE, under Justin Trudeau there’s no benefit for individuals who use DEBT, to generate revenue, as Canada’s regressive taxation system, along with the Carbon Tax, which is a tax on top of existing taxes, will fuel economic DEFLATION.
To me, this move appears entirely political, but unlike Donald Trump, who openly calls out the Federal Reserve when it raises interest rates, not a peep from Justin Trudeau, meaning that nobody can claim, with evidence, that Trudeau pressured Canada’s central bank to lower interest rates.
With that said, we will be monitoring the Forex Markets, because the only benefit anyone in the PRIVATE SECTOR can see from a drop in interest rates, is the fuel it will give to Canada’s already over-priced housing market?
The tax code, as structured by Justin Trudeau, revolves around the confiscation of PRODUCTIVE-PROFITABILITY; I’m not shy when I say that FISCAL POLICY matters far more than central bank interest rates. If interest rates are ZERO or even in the NEGATIVE, is the PROPERTY subject to additional taxation? What good is lower interest rates?
If Justin Trudeau’s cabinet were a Private entity, no private bank would LOWER interest rates for him based on the DWINDLING cash flow of all of his “investments.” Trudeau’s revenue is up, but so are his operating costs.
Canada’s national debt is “$1,356.0 billion” which is actually $1.3 TRILLON, you’ll notice the government using $1,356.0 billion because most people don’t know that a Trillion is 1000 billions. This is the silliness, those of us who monitor the numbers have to put up with.
With that said, Canada’s debt-to-GDP ratio should mirror Australia’s, as our structures of government, as well as our land masses, are similar; however, Canada’s debt-to-GDP mirrors the United States, and this should frighten you. Canada doesn’t have military spending comparable to that of the U.S.
In regards to the structure of Canada’s government and how it differs from the United States. For example, Canada has CROWN CORPORATIONS in segments of the economy, which are TAX PAYER funded in the United States.
I like to use the example of the Canada Post; in the United States, the U.S. Postal Service is taxpayer-financed; in Canada, Canada Post is a government monopoly that doesn’t show up on the government balance sheet.
However, it has dire effects on the Canadian economy, as nobody monitors what the Canada Post monopoly does to Canada’s PRIVATE sector, whereas, in the United States, Americans are allowed to complain and make a POLITICAL ISSUE out of the USPS during their federal election cycles, which forces the USPS to at least meet the demands of the U.S consumers.
The CMHC is another CROWN CORPORATION that has a monopoly on MORTGAGE INSURANCE; this PRICE CONTROL mechanism doesn’t monitor the damaging effects it has on housing and rental PRICES in Canada.
When you look at Australia and New Zealand’s Debt-To-GDP, that’s where you’d expect Canada’s ratio to be, in fact Canada’s should be better, because we border with one of the largest economies on the planet. Anyway, you’d be wise to monitor the Forex markets. hopefully, this doesn’t hurt the Canadian dollar because the Canadian dollar can’t control the cost of IMPORTS.
