Dow jumps at open after Wall Street’s biggest rout since 2008, Canadian dollar losing value possibly because of Justin Trudeau’s economic policies – March 10, 2020,
The Canadian economy similarly to other economies outside of the United States doesn’t seem to have the same bounce as it once enjoyed under the Obama Administration. During the Obama global apology tour, there was a general acceptance of the market that China was going to be the next super-power.
The reason the world was more accepting of this premise under Obama, was because, Obama was able to do what no person thought possible, under Obama the deficit soared while the U.S Federal Reserve printed money and kept interest rates at near zero. I have to say this to be authentic, but had Obama been a white man, he probably would have been killed. America and the world didn’t want to return to the days of old and there was a concerted effort to protect Obama from the realities of economics.
If you ask most people who understand the disaster of keeping interest rates near zero for more than a decade, they’d tell you that, in time this will lead to financial ruin for any country, yet alone for a global economy. Obama was also one of the first U.S Presidents to openly promote Socialism in America without using the words. The reason why Bernie Sanders appeals to much of America’s youth is that Obama got away with pushing an unchallenged socialist agenda for 8 years.
Even after the video below surfaced, Barack Obama still endorsed Justin Trudeau.
Why I bring this up, is because you’ll frequently hear Bernie Sanders referring to Canada when he speaks about his Democratic Socialist agenda. What Americans don’t know about Montreal, which is nearby Vermont is that Montreal has an overcrowded probably at most if not all of their hospitals, it should also be noted that the Province of Quebec is not only considered Canada’s most unfriendly Province to businesses in Canada, but it’s one of the major reasons why the Canadian dollar is so artificially low.
The devalued Canadian dollar has the benefit of allowing Canada to pay for public services it otherwise couldn’t afford, is that the Canadian dollar is also viewed as a Petro-dollar, currency manipulation, is a tool the Bank of Canada can use to prevent political unrest. The problem current Prime Minister Justin Trudeau has is living up to his side of Paris Agreement, which is basically phasing out Canada’s Oilsands. This would sever the ties the Canadian dollar has with Oil.
Worst than this and I’ve brought this up several times is Canada’s current economic policies, which are closely aligned with Presidential hopeful Bernie Sanders, minus the infrastructure spending on Bernies Green New Deal. You see in Canada, Justin Trudeau has no plan for a green economy, Trudeau has a tax, his belief is that by punishing Canadian businesses with a tax, the private sector will be forced to come up with a solution.
What Trudeau and socialists who think like him don’t understand is that in order to get investment, investors have to believe there will be a return on investment. This is why if you look around the world, almost every country that’s embraced carbon taxes has seen the price of gold rising. a Central bank is actually a form of socialism, now, I often argue that if you know anything about money, you’d know that the rich or the financially educated don’t have to use it, they use money/currency because it’s convenient, they don’t use it because they have to.
Although a credit card as an example is currency, it’s not physical money, as long as governments don’t strip people of their property rights, there are thousands of ways not to be stuck in the currency markets. The hoarding of assets is typically the solution most knowledgable people use when the socialists attempt to socially engineer society. Even in Communist China, where property rights are a farce, for the most part, you’d be a fool to assume that all Chinese people hoard The renminbi as a storer of value.
Only morons raise taxes to pay for initiatives, smart people understand that if the market truly wants something, the market will finance it. Solar Panels have been purchased by people like myself who love the concept of renewable energy, but you see, when you buy a solar panel, some batteries and an inverter, you quickly get to see for yourself the limitations of renewable energy.
You can’t scale up renewable energies right now and expect to replace the burning of fossil fuels, however what can happen is if you’re a government you trick people into believing you can. Now, as an investor myself, when I see green initiatives I say to myself, show me first, there are tons of green energy projects set to come online, but the most efficient ones are Nuclear or oil replacements which still require a meter.
anyone with common sense would know a diverse energy economy is a way to go, but green communists, and those Green peace types that want to instill fear that the world is going to end, want the government to phase out fossil fuels. Many of these idiots have not only never ran a successful energy-based company in their life, but they’re also ignorant about energy storage. A feed-in tariff system doesn’t mean that the world can run off solar panels, also I doubt most people know how batteries are created and how long they can last.
A bring this up because Canada has a Prime Minister who believes the Canadian economy runs on autopilot, Canada is a rich country and there’s no way things can get bad, so let’s focus on social justice and saving mother earth. Well, fair enough, Canadians did vote for this clown twice, so I guess we’re going to have to let this thing play itself out!
If you’re a Canadian you’d be wise to watch the Canadian dollar vs. the Greenback, because if the Canadian dollar starts to slide too much, Canada’s reliance on imports might start to rear its ugly head. Artificial inflation is different from real inflation, real inflation historically means that interest rates have to rise, no I don’t know maybe things are different now, but typically inflation means that people are hoarding money and the central bank needs to offer something stimulative.
You can’t stimulate the Canadian dollar with lower interest rates when interest rates almost near zero, what will happen is the cost of living will rise, because unlike other nations, Canada has been losing it’s manufacturing at an alarming rate. When you make your own stuff you’re in a better bartering position, as an example Trump can’t push around China, he has to negotiate with China, why? Because China manufactures a lot of things America needs. Canadian manufacturing is dwindling and what’s worse is that Trump has made America more competitive. It’s not like Americans speak another language, being that Quebec isn’t business-friendly, most businesses opt not to be there, meaning that in English speaking Canada all of our companies are fair game.
So yea, hopefully, this lower loonie thing is only temporary because in the event the Bank of Canada is forced to reverse course and raise interest rates instead of lowering them, well, being that Canadians whether personal or in government are in so much debt, this would be the game changer!
Interesting times ahead!