Canadian consumers filed the largest number of insolvencies in almost a decade, 35,155 in the final three months – February 15, 2020,
A central bank for the record is Communistic, in a free market there exists no central money authority dictating what the price to borrow money should be. A central dictator over the economy is authoritarian, it’s a big government program. With said, for the record, a Central Bank, is something I’m NOT against, why because economically a large number of humans are idiots and for me, a central bank only affects your life if you’re uneducated as to what it is and what it represents.
Furthermore, fiat money is also something I’m not against, every time a Gold Standard monetary system has existed, it’s been proven historically that the vast numbers of people will demand the money supply be more flexible, it’s not to say that Gold shouldn’t have any value, it’s just that the people appear to want the commonly used money system not to be fixed any one asset. Therefore in the modern world, almost every country has its own currency.
Now, that I have this established, allow explaining the major driver in the modern world to personal bankruptcies. Bankruptcies on a personal level revolve around financial education, something the author of Rich Dad Poor Dad, Robert T Kiyosaki made famous. Now, not having a financial education, first and foremost will change your voting patterns. If you lack financial education, you will inevitably believe that the government has the ability to create prosperity by redistributing money and regulating the cashflows of the rich minority.
When you lack financial education, you’ll also assume price and wage controls are a good thing. I’ve even listened to so-called Libertarians who believe in price and wage controls while at the same time calling for a smaller government. Money is nothing more than a convenient form of bartering, 10 chickens in exchange for a cow. A used Apple iPhone in exchange for 30 inch Samsung television. That’s all money is, it’s a convenient form of bartering and bartering has a lot to do with your ability to sell, meaning your ability to communicate with other humans.
With that said, once the government creates a Nanny State, most people won’t develop certain life skills. Now, a lack of financial education would make perfect sense if Canadian society didn’t have a public school system, but Canada does have a public school system yet year after year, more and more Canadians deem it wise to not only get into student loan debts but to drown themselves in consumer debts.
With a fiat monetary system, a person savings could in actuality serve them in retirement, however, because Canada has such a large entitlement sector and a vast majority of Canadians don’t understand money, there is now an increasing demand for more debt. Although Alberta is viewed as this land of Conservatism, Alberta is one of the nation’s leaders in personal debt. A large segment of Albertans as an example wants the CMHC to intervene more in their housing market. I’ve read countless articles from people who partially sound like Conservatives who don’t want less government, what they want is for the government to cater to their own personal, “conservative” needs.
I must remind the reader, that solvencies in Canada are on the rise while we have near-zero interest rates. People, keep asking why the rich keep on getting richer? Well, it’s because idiots keep voting for more Government intervention. All the government can do in the market place is to raise the barrier to entry, now if a person had financial education they’d know this intuitively. Now, when the government raises the barrier to entry, there are fewer participants able to participate, this leads to fewer options and ultimately higher consumer prices. Now, if you’re in a debt and prices for everything are going up, day after day, month after month and you as a consumer have fewer options, eventually, you’re going to sink, eventually, unless you’re diligent with your spending you’re going to go bankrupt.
I’ve been saying for years, the Canadian economy isn’t going to crash in the manner everybody expects it too. We’re going to have a debt servicing problem in the future. Justin Trudeau, oddly enough became prime minister at he worst possible time, because he and his cabinet are spending money and raising the barrier to entry at a pace that is going to have disastrous consequences if the United States goes into recession.
What’s worse is that financial education is a topic that typically takes a few years to comprehend, so when the Canadian economy goes into recession, the voting public in Canada will assume there’s an easy fix, there’s isn’t one, the easy fix is to raise prices, now, I assume that when inflation in consumer prices occurs, there will be more calls to raise the minimum wage, well, you see this becomes the death trap because raising the barrier to entry during a recession, will cause fewer people to want to invest in the Canadian economy.
Now, the easy fix for the Canadian economy will be a market crash, but I don’t see that happening, there are too many levers in place in the Canadian economy to allow the market to crash, a market crash in Canada, would have devastating effects on Lib-Con-NDP political monopoly. So regardless of what political party is in power, they’re going to intervene somehow and this intervention especially if it comes from the Liberals or the NDP will make the problem even worse. With that said, a Conservative government instead of fixing the problem will instead remedy it and this will eventually lead to ore Leftist politics down the road.
The point I’m trying to make is the best to happen to Canada’s economy in the future is a ‘hard crash’. If the economic consciousness of Canadians isn’t awakened, Canada is headed for a future of economic progression downwards. I want to again remind the reader of the words “stagnation”, it’s going to be a serious problem in Canada once we reach peak debt. Again I remind the reader, bankruptcies in Canada are happening with near zero-percent Bank of Canda interest rates. Even if the government finds a way to make the amount a person pays to service their debt less, this regulations will be met with more inflation on Canadian consumers.
Consumer Insolvencies Approach Record in Debt-Weary Canada | bnnbloomberg.ca
Interesting times ahead!