The Canadian Dollar is Heading For Negative Interest Rates: Foreigners Are Still Buying Up Canadian Debt in Above Normal Numbers – March 19, 2021,
A few days ago current Globalist United States Secretary of the Treasury Janet Yellen made a statement that “she wants to overhaul corporate taxes for the whole world”. This basically gives you the indication of the progressive path America is heading down.
Now, in Canada, our government isn’t as aggressive as America when it comes to collecting taxes, in America, their government will find you all over the world and demand you give them a cut of your profits, for holding U.S citizenship. In Canada, even with Progressive Prime Minister Black Face as the face of our country, he’s not that stupid, not yet anyway.
For that reason, whenever a Democrat becomes President of the United States, Canadian Liberals appear far more friendlier to investors. So, via the current stupidity of the Biden Administration, money is flooding into Canada and what I believe is going to happen is the Bank of Canada is going to cut rates and then cut them again, until, for the first time in Canadian history, we have negative interest rates.
Now, just being honest, in the short term this could provide some stimulus as the Canadian dollar would decline and we wouldn’t see an IMMEDIATE spike in consumer prices, however, the problem will come via Canada’s productivity, so far Justin Trudeau who may call a snap election is buying votes via CERB and shutting down the Canada Revenue Agency.
As many of us know shutting down the Canada Revenue Agency is very smart from a political standpoint because a lot of Canadians owe a lot of money and politically this doesn’t reflect well on the free-spending Justin Trudeau, the problem, however, are rising costs on the Working class Canadians as the cost of living rises, with a higher valued Loonie, which shouldn’t make any sense to Canadians, because a higher valued Loonie should signal stronger buying power for consumers.
But no, Canada has been manipulating its currency for years, and REAL economic downturns have serious consequences whenever you start playing games with the Canadian dollar. The consequences unless the Bank of Canada(BoC) goes full-blown Argentina mode is that Canadian dollars will have more value outside f Canada in productive countries than it has inside Canada.
Because as an example someone who doesn’t reside in Canada, buys a house in Canada, now the price in Canadian dollars for that house will rise for that person living outside of Canada, while people living in Canada will feel the wrath of Canadian inflation created by the Bank of Canada.
However for the person living outside of Canada, they feel nothing, in fact, they benefit from this Canadian dollar price inflation greatly, because the Canadian dollar is rising next to the U.S dollar. However, for Canadians, who have to pay for all of this government, they lose their standard of living.
The real remedy is of course, for Canada’s central bank to raise interest rates, but that would trigger an ASSET crash, the easy answer is to lower interest rates, which will lower the Loonie in U.S dollar terms. Now long term this is disastrous, but politicians and central bankers don’t care about the long term. So as I’ve been saying for months now, get prepared for Negative Interest rates coming to Canada.
Interesting times ahead!