The Canadian Dollar will be debased and the Canadian Government is adding fumes to the fire: Canadian tariffs on U.S. aluminum products coming soon – September 12, 2020,
Disclaimer: This blog post should be read for entertainment purposes only. I do not give financial advice! Seek out financial advice from your own trusted government representatives!
There are talks all around the world about U.S dollar debasement, because Canada’s role in the global economy is a fraction of the size of the U.S what’s going ignored is the massive size of the Canadian government and our hollowing out of entrepreneurship in this country.
In America, the various levels of government have to do all sorts of measures to suppress entrepreneurship in the U.S, because left alone Americans are go-getters, in fact, part of the reason Canada has so many tariffs on U.S products now is because of the fear Canada will lose its cultural identity.
Why I bring this up is because America is better suited to handle deflation than Canada can. Now in real terms, the global economy has been deflating for years, in America’s business classes, they imagine the U.S dollar being the world’s reserve currency as a burden to global progress.
The rest of the world, on the other hand, wants to keep the U.S dollar as the worlds reserve currency because, as an example, if the value of the Canadian dollar was pinned to where it was supposed to be, the Canadian dollar might be valued higher than the Greenback when it’s all said and done.
So what’s wrong with a higher Canadian dollar you ask? The answer is the cost to finance the Canadian government. How would Canada charge tariffs as an example if the Canadian dollar was on parity with the U.S dollar? In Ontario, even with the devalued loonie, Canada has to charge high tariffs to prevent Ontarians from buying Liquor from New York State.
In Ontario, we have a State-Owned Enterprise in the form of a Crown Corporation called the LCBO, it’s entire existence is reliant on a devalued Loonie. The prices Ontarians pay for liquor at the LCBO are artificially high and are PRICE CONTROLLED! Ontarians have been trained never to expect a fire sale/rock bottom prices at the LCBO!
I bring this up because as the Canadian dollar is being debased the Canadian government is engaging in a trade war with the United States. Canadian taxpayers pay for trade wars, the government doesn’t pay for a trade war. How a tariffs work is the store owner pays for the tariff and the store owner can choose whether to pass the costs onto consumers.
In Canada, one of the reasons prices are so high is because we don’t manufacture as much as we used to in Canada anymore, we’ve dissolved in many ways into a service sector economy. Canada has a hard time making masks for COVID-19, we were dependent at one point on the Chinese Communist Party to make masks for us.
Now, we could have asked America to make masks for us, but I challenge any Canadian to buy an expansive made in America shirt from an American store or even a Shopify store in which the tariff prices are streamlined to the Canadian government once the item is shipped.
All of these tariffs that already exist in Canada, has been a killer for Canadian entrepreneurs. Donald Trump is actually the first U.S President to be aware of what Canada does, primarily because Donald Trump was involved in real estate development and if you’re building anything, your company will be bombarded with tariff charges and trust me from someone who knows, nothing stays in your memory longer than being charged a tariff.
Despite what some are trained to believe the business owners pay the tariffs, and not all business owners pass the tariff charges onto consumers. Why some business owners don’t pass tariff charges onto consumers is because consumers will complain to the government and most government people are unaware of how tariffs cut into the profit margins of a business.
Me personally, whenever I purchase a foreign-made product to sell in Canada, I include all the costs before I post my price to consumers. Furthermore don’t forget as a business owner that I also have to pay the government a sales tax and income tax. All of these taxes go to government people who for the most part are unproductive in the Canadian economy.
a lack of productivity leads to currency debasement and this debasement if the U.S is no longer the world’s reserve currency, is extremely problematic for countries like Canada which have very big governments. The U.S world reserve status hasn’t been challenged to date, because the only other alternative is a gold standard and in actuality, a Gold Standard is more cutthroat than U.S dollar standard could ever be.
Canada by the way sold off all of its gold reserves, so chances are if there were a gold standard Canada would have to nationalize a few Gold mines in Canada. Canada has a strong union culture, so this would also be an expensive endeavor, but I digress.
In regards to a digital currency, Bitcoin is even more cutthroat than a Gold Standard could ever be. Bitcoin will stop producing bitcoins at a certain point in the future and that will be that hoards of bitcoin will have to split bitcoins the way a stock splits its stock, this pyramid scheme effect in a big government economy, will not work without austerity measures.
If the government comes up with its own digital currency, it will need its own rules, which could be rejected by other countries. This is why I’ve been saying for years, that what I see in the future is FORCED AUSTERITY measures. Because a lot of people are living in their own bubble, only the financially educated are going to recognize forced austerity measures for what it is.
In many Nordic countries, they’ve already begun shrinking the size of the governments. Technology has been deflationary for the economy, a lot of people haven’t got the memo. It used to cost $5000 for a 40-inch television, it’s now as low $300 Canadian for a 40-inch television. Unless you’re a top-level brand people aren’t paying top dollar for your technology.
The only time people are paying top dollar for anything is when the government is involved. People are still paying top dollar for government services. This is for the most part the only sector of the economy not experiencing deflation. The government is the problem and eventually, more and more people are going to stop blaming central banks and start recognizing that the problem is the size and structure of government.
This is why I’ve been writing that Canada appears to be on the wrong side of history at the moment. Of course most Canadians don’t see the problem now, but as a servant of God, I feel obligated to at least give the warning. There will be a time when I stop writing these posts. But you’ve all been warned! Prepare yourselves accordingly.
Disclaimer: This blog post should be read for entertainment purposes only. I do not give financial advice! Seek out financial advice from your own trusted government representatives!
Interesting times ahead!