If Joe Bidens Economy turns out to be as bad as it sounds, Canada’s Central Bank Will Be forced into Negative Interest Rates – January 30, 2021,
So from an economic standpoint Joe Biden is by far the dumbest U.S President in history, thank God America is off the Gold Standard, otherwise Joe Bidens’ economic vision for America would be one of hyper-inflation. Since Joe Biden has become President Gas Prices have continued to rise, now, in my opinion, this only the beginning of inflation running red-hot under Joe Biden.
Joe Biden also has every intention of bailing out the bankrupt Democrat Run States, which is very unfortunate because you have to remember that these bankrupt Democrat states have already artificially raised their cost of living to pay for their public sector waste.
All of this bailout money b the Joe Biden administration won’t be going into anything PRODUCTIVE. The only portion of Joe Bidens’ spending that has potential is “The Green New Deal”. The Green New deal although wasteful might stimulate some Temporary because the Private Sector will be involved in this process, unfortunately, Joe Biden’s new regulations will also make the green new deal more expensive, so all of this sounds like a deflationary U.S economy propped up with cheap money.
This is disastrous for Canada as this sounds like the U.S dollar will be depreciating to pay for all of this government waste. What this means also that Canada as a destination to park your money, seems more appealing, we have lower corporate taxes, ur standard of living overall is better, and the welfare state in Canada has a proven track record.
When investors realize U.S dollars will be better served outside of the United States, one can only imagine what MIGHT happen to the U.S dollar as more and more people cashout Greenbacks for other currencies. The problem with people dumping U.S dollars is that countries like Canada are dependent on U.S consumers.
Canadian consumers similar to consumers in Europe and Australia are PUNISHED via their governments for consumption.
Canadian who travel to the United States and shop during normal times know about tariffs when they attempt to bring those U.S goods back to Canada.
Canadian are dumb enough to think that tariffs are a good thing, unfortunately, tariffs only fatten the pockets of Canada’s various public sectors who then waste said money on growing the size of government. This of course creates a wealth effect as more public sector workers are created, but the reality of the situation is that this also leads to inefficient productivity, because government entities or private companies dependent on the government don’t exactly create the best job creators.
All of this malinvestment lends itself to perpetual deflation which constantly fights with more Canadian dollars being thrown at it. In order to avoid deflation, the Canadian government as well as Canada’s central bank will need to get more people and businesses into debt.
Because you see people parking their wealth in Canadian dollars from a Canadian government’s perspective is a BAD THING, because most of the productive private sector companies in Canada are reliant on the United States, which buy from Canadian private TAX-PAYING companies because of our DEVALUED LOONIE!
People often forget that it’s Canada’s private sector that pays all of the taxes, public sector workers don’t pay income taxes, public sector workers in Canada are the beneficiaries of taxes generated from the private sector. Once the private sector pays its taxes, the government then uses those taxes to not only pay itself but to also grow the size of itself.
Now had the Canadian dollar been tied to something tangible like Gold, this scheme would have failed a long time ago, but the perception of solvency still remains in Canada and this confidence game has worked well for us. With that said Justin Trudeau’s dedication to climate change is killing Canada’s energy sector, which oddly enough pays most of the public sector’s bills, so I hope you can see the problem Canada is facing.
Even if interest rates go negative in Canada, businesses of productive value might be reluctant to invest here. Parking money in Canada differs from building and hiring Canadians, this to me is why Canada going into Negative interest rates should be concerning to all Canadians.
Opinion: Should the Bank of Canada’s interest rates go any lower? | financialpost.com
Interesting times ahead!