Expensive Avoidable Canadian Government Wasteful Spending: CRA Opens Federal COVID-19 Snitch Hotline – June 6, 2020,
I have some sad news for Canadian regarding money printing, this may sound odd to many of you reading this, but Canada didn’t print as much money per capita as the United States, however, Canada could be faced with a dilemma as America burns via the police brutality situation in the United States.
Even if you’re a hard leftist who hates Donald Trump, with the exception of Donald Trump’s regulation cuts, Donald Trump has been one of the most Liberal Presidents in U.S History, I’ve stated time and time again on this blog that I’m not a populist, I don’t like populism and Conservative who have jumped aboard this populist movement will eventually pay for it.
As a person that focuses on economics, if Donald Trump doesn’t deliver on debt renegotiation for America during his second term, I’d personally consider his presidency a failure. Now, why what’s happening in America is Canada’s problem is because the United States is Canada’s largest trading partner and if the U.S goes into recession, Canada’s economy which has house-hold-debt-to-GDP approaching 200%
Canada could have twice as much household debt as we have economic output in Canada
If you watched the video above, it’s imperative to comprehend that CMHC doesn’t include the possibility of deflation of prices into its forecast, because CMHCand the BoC work in harmony, so as an example with the as many mortgages being in deferrals in Canada, the CMHC still doesn’t anticipate holders of mortgages going into default without a buyer to pick up the tab, because in most parts in Canada we have a Power of Sale process.
Furthermore, if you listen to the person at CMHC you’ll notice how transparent they are, Canadian banking as I’ve stated plenty of times is the envy of the world, primarily, because Canadians fully embraced Keynesian economics, Keynes, after all, was a British economist and even Keynes never imagined a sustainable economic system without a Gold backed currency.
Being that Canada and the world is on a fiat currency standard, I personally don’t pay attention to money printing, what I pay attention to Austerity Government policies because it’s government policies that create a cost of doing business problem.
Now, I bring up Donald Trump because Donald Trump has talked about infrastructure spending and devaluing the U.S dollar and if America goes into recession, Canada has a problem because the Canadian dollar could rise and a rising Canadian dollar with a down more competitive U.S economy could spell serious internal problems for the Canadian economy.
Canada pays its bills by artificially devaluing its currency next to the U.S dollar to pay it’s public sector bills. CMHC is Canada’s most profitable Crown Corporation and its profits at this point are on auto-pilot, I’ve stated repeatedly that CMHC, in my opinion, is the worst of the worst crown corporations in Canada and if you watch the interview above with Pierre Poilievre and Chief Executive Officer of the Canada Mortgage and Housing Corporation Evan Siddall you’ll notice how transparent Evan Siddall is.
Evan Siddall is transparent because you’d have to be able to see the world outside of the eyes of the Keynesian economist to comprehend the problem CMHC presents for the Canadian economy. In a part of the interview, Canadian Member of Parliament Pierre Poilievre asks Evan Siddall why doesn’t Canada do what they do in Europe and leave the housing market to the private sector, and Evan Siddall responded by saying that the CMHC has competitive rates to the private sector.
Now this begs the question if the CMHC has competitive rates to the private sectors in Europe, why do we need the CMHC, backing Canadian mortgages with Canadian taxpayer dollars? The reason I think CMHC gets away with this is that there aren’t too many Canadians who comprehend Austrian economics.
The devil is in the details and Keynesian economics is an accepted practice in Canada, the problem with Keynesian economics is consumption, Canada could be consuming 200% more than it produces very soon, which equates to real inflation because it will be a clear sign that Canada is incapable of paying its bills.
In America, because Keynesian economics is challenged by both the Republican and Libertarian political Parties, the Libertarian Party in America is I would say similar in influence to Canada’s NDP and Green Party, which means there are a lot of Americans who are against “central bank socialism” which is what Keynesian economic theory is!
I say this, because, in America, Evan Siddall couldn’t simply steamroll through questions the way he did with Pierre Poilievre without being challenged repeatedly over and over and over again!
In America, it’s not to say the Socialists don’t get their way every once in a while, but they’re ideas are often challenged, because Americans are very outspoken against big government and as seen with the George Floyd situation when Americans had enough they will start to get destructive, like it or not that’s a sign of a healthy democracy.
The government did something the people didn’t like and the people showed their displeasure, what this means, is that the Government can’t over-reach in America without consequence, I don’t see this reality in Canada and this is one of the reason why if there’s a recession, in Canada, the pain of it all is going to hit a lot of Canadians by surprise.
CMHC is effectively propping up housing prices and passing the higher costs and the liabilities of those higher-priced homes over to Canadian taxpayers. In Europe, if there’s a housing crash, the taxpayers pay nothing! The homeowners and investors get screwed b their taxpayers need not worry about ballooning government taxes to pay for the risk-takers in the European housing market.
In Canada, why I say it’s inevitable that the Canadian dollar will be devalued DOMESTICALLY, is that we have 2 crown corporations the CMHC and The Bank of Canada promising risk-takers that their investments into Canada will be protected and paid for by the Canadian taxpayer, so in the event, the US dollar goes on a decline, REAL inflation will hit Canada and lowering or raising interest rates are going to be very problematic, which equates to a very painful sluggish zombie-like Canadian economy!
And just so you know one of the many mistakes Justin Trudeau has made is adding on regulations to Canada’s private sector, which will equate to fewer income taxes and potential regressive taxes collected for all levels of government in Canada! So although Canada has per capita printed fewer dollars than the United States, you kind of see where all of this going in the future!
Prepare yourselves accordingly
Interesting times ahead!