Justin Trudeau and the Liberal Party of Canada says ‘This is not the time for austerity,’ extend wage subsidy until 2021 – September 23, 2020,
One of my favorite countries to pay close attention too is Argentina, the reason I like Argentina is because of the many currency crises they’ve had throughout their countries history. Argentina has a rich European history, a high IQ population but it has one serious problem.
In Argentina, they’re addicted to big government, they’re obsessed with not letting in a market economy, the greedy isn’t at the top, the greed is in the proletariat, no matter how bad things get economically, austerity measures are off the table.
I personally label the Argentine economy ‘Late Stage Socialism’. Karl Marx writes about late-stage capitalism being a period in time in which the Marxists take over the ever deflating capitalist economy, well socialism has the opposite effect of deflation, socialism is infaltionary, the problem with socialism in the modern era is technology.
Technology has deflated the cost of production, metal has been replaced with plastic, and the global economy because of technologically advancements in drilling is deflating the cost to produce oil. The globalists whose wealth is dependent on liquidity, are trying to get people on board with this ‘climate change’ agenda.
I actually think their idea is rather genius because a lot of people in the world don’t want to acknowledge the legitimacy of sound economics. The problem is economics has less to do with the money and more to do with incentives.
Climate change lacks incentives because everyone who gets involved with Green energies immediately comes to the realization that it’s not even feasible, in fact, a investing in Green energies is extremely deflationary, because even in the short term from a market perspective it’s yeilding nothing, in fact, it’s negative, from a market perspective green energies are only kept alive via the government.
Now, the worst part of climate change is that it’s going to bankrupt a lot of governments, faster than it would have, had COVID-19 never been a thing. Most projections for subsidizing climate change anticipated global productivity to increase, not decrease.
What’s coming is forced austerity and what Trudeau and a lot of Progressive do not seem to understand, is that the Government doesn’t work for free! Government employees are paid via productivity, well CERB or wage subsidies aren’t productive they’re loans that need to be serviced.
When Trudeau pays people not to work and takes a portion back in income taxes at a later date, that entire transaction was based on borrowed money. Typically the private sector finances the government with productivity it profited from some other country, the beauty of trade is that it’s ongoing and although the economy needs servicing every once in a while it’s a minor blip on the grand scheme of things.
COVID-19 is not a minor blip, it’s turning out to be potentially a year of borrowing and unproductivity in the private sector. This is indeed debasement of the currency, when debasement of currency occurs, it means the government is too big, debasement shouldn’t be confused with inflation. The forex markets might reward the Canadian dollar while it’s being debased domestically.
1.8 cents Canadian will buy you $1 Argentine Peso, so the Canadian dollar has a long way to go to reach Argentina, but because we have a higher standard of living in Canada, the people who Trudeau claims to care about the most will be the people most affected by Canadian dollar debasement.
In a debasement scenario, the Canadian dollar similar to the U.S dollar will have more value outside of the country. This should be bad news for the Canadian government, but I doubt they’ll notice anything until Canada has a cashflow problem.
Maybe a cash flow problem is the wrong choice of words, I should say Canada is going to have a debt servicing problem. We’ve pushed liquidity to its max, and yes ofcourse the Bank of Canada can go negative, but a reminder about most of the countries like Germany, Japan and Switerland who went negative, these countries have a robust economy that’s not dependent on Oil and Real estate prices.
Sony, Toyota, Honda, Mercedes Benz, DHL, BMW, german engineering, Rolex Watches, Swiss Cheese, Swiss Chococalte the Swiss Franc. Ask yourself where does Canada fit into that? I also like to remind Canadians of the U.S military, the U.S government has utility around the world, there is a global demand for the U.S military which is why the U.S often gets away with reckless spending.
Canadian oil is under attack, Canadian lumber is under attack, Canadian natural resources, in general, are under attack. Real Estate in Canada is heavily protected, but it’s actually bad news for cash flows in Canada in the event of an economic downturn.
Trudeau’s throne speech was interesting, but in my opinion, Canadians are clueless as to the economic diaster that awaits us. It’s honestly not that big a deal, it’s forced austerity measures and if we as a country react in the wrong way when it arrives we’ll pay the consequences.
Arentina is still beautiful and all the things the unions and the government does to keep Argentina beautiful works, the problem is the Argentinian government is really really expensive to manage and therefore investment in that country is scarce.
Late Stage Socialism is a gradual decline in your standard of living, some people in your society will eventually assume that it’s inevitable, government corruption will be normal as the morale and the morality in the society goes down.
Trudeau’s throne speech sounded like something a socialist would say, let the government handle it Trudeau says, I have my sources who tell me there’s another Trudeau scandal brewing and Trudeau will step down and be replaced with Chrystia Freeland.
I told my source I think it’s a conspricay theory, but they were adamant that it’s going to happen. With that said Chrystia Freeland in my opinion is clearly a socialist, and she has this ‘Kim Campbell-ness’ about her. Based on my observations I believe Canada is going into a into a situation of forced austerity measures.
We do have a lot of unearned-welfare programs in this country, which is something Argentinians don’t have. a drop in our standard of living because of a debased Loonie is a serious problem, because of the fear of every country is for people to make more money not working than they would make if they did work.
Although Canada is already there, it’s not an overt problem, you’d have to do the math to know that welfare is more beneficial than working at a low skilled job, what Canada doesn’t want to happen is for people via the CERB and potentially a UBI knowing that they’re being punished via taxes for being productive or punished for holding a job.
In most third world countries that’s often the dilemma they have with their debased currencies, their impoverished population wants no part in their country’s worthless currency and therefore will not work hard for it, or the people will simply educate themselves in hopes they can immigrate to a better country, with a stronger currency.
If the debasement of the Canadian dollar is the new normal, well let’s just say nobody can predict what could happen in the future. I’ll give you an idea of what a debase currency feels like, in a lot of third world countries you can rent a 1500 square foot apartment for $400 Canadian dollars a month!
That’s fantastic you say? No it’s not fantastic, because the cost to run the Canadian government wouldn’t allow deflation like that occur in our housing market. In order for the housing market to deflate in Canada, the size of government and government regulations would have to shrink and be cut!
If what I wrote isn’t making any sense to you now, don’t worry, eventually it will!
“This is not the time for austerity,” the speech says.
“Canadians should not have to choose between health and their job, just like Canadians should not have to take on debt that their government can better shoulder.”
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Interesting times ahead!