Will The Loonie Dip Below 70 cents in 2019? A Shrinking Private Sector Equates To a Lower Loonie – January 1, 2018,

Currently, Canada is having an Alberta problem that if it’s not remedied soon, will destroy the Loonie. When you include Provincial and Federal Crown Corporations into the Public Sector, Canada is getting extremely close to that 30% number. The 30% number is a number that means 30% of collected taxes of the government comes from Government-related entities, once Canada gets to this number, we’ll end up having the same currency problems that plague Argentina. In the U.K as an example where they have a large public sector, it’s remedied primarily because of the value of the British Pound, which allows the U.K to have superior purchasing power.

Canada on the other hand, we’ve used the lower loonie to be an attractive destination for capital that would otherwise be in America. There are a lot of businesses in Canada whose primary focus is to sell to U.S consumers, these companies love a lower loonie, the problem with a lower loonie is what it does to the domestic population. Canada’s created a culture that for the most part benefits big businesses and rewards small businesses who opt not to grow. Growing your businesses in Canada is a very risky endeavor especially in manufacturing as Governments in Canada will often go after Canadian manufacturing as a means to grow the size of government.

Making the problem unsustainable is that the size of government in Canada usually doesn’t shrink and the fact that current Prime minister Justin Trudeau doesn’t appear to comprehend how his social justice policies spook businesses. Justin Trudeau’s cabinet in 2018, made a lot of announcements of giving away money and or Federally backed loans. Well, the Canadian federal government is already pretty profitable, a crown corporation known as the CMHC has bragged on its website how the money it receives goes to the Federal government, of course, the CMHC is one of the parties at fault for housing inflation in Canada, which not only affects wannabe homeowners but also lower income renters, many of who aren’t in debt and don’t have access to debt.

These people are extremely valuable because if their income is derived from the private sector, they represent actual main street wealth, which is the most important money to an economy, because it’s not artificially created money, it’s money that came from productivity. So when the Federal government of Canada via Grants, loans or free money, picks winners and losers the lasting effect is less hard money is invested in Canada.

What’s happening in Alberta is a serious problem for the Petro-Loonie, I don’t think Canadians understand how important Alberta is to our standard of living. Ontario is losing its manufacturing base, Doug Ford (Ontario’s current Premier) has been trying to cut the size of government and cut regulations and he’s attacked for it daily. I don’t agree with some of his policies, but he’s proof of what the problem is, the problem in Canada is cutting the size of government has almost become an impossible task and I have to remind Canadians that we’re not in the same boat as America.

Countries all over the world will prop up the U.S dollar because the U.S military presence is extremely important for global trade and stability in most countries. Canada’s military is dwindling and unlike European nations like Norway and Switzerland where State Capitalism or direct democracy is flexible enough to allow change or alter socialistic programs that aren’t working as intended, in Canada, Canadians aren’t being told the truth and therefore our government or media is very stubborn and hard headed.

The only way a Canadian is going to know what’s really going on in the economy is if those people do their own independent research. This, of course, means that Liberal and NDP lies are able to permeate throughout Canadian culture UNCHALLENGED, which worries me a lot because when the economic crisis does happen I’m almost positive that most Canadians will opt for a big government answer.

It’s not like the Loonie hasn’t crashed before, it’s important Canadians realize this, the Loonie has gone down below 70 Cents before and what happens to Canadians is inflation, Canadians already have artificially created inflation from the Bank of Canada, which won’t allow the housing market to crash or correct itself. What Canadians aren’t understanding is what happens when there’s a financial crash, what happens is they’ll be less financial entities willing to lend us money. So in that situation, the Canadians in debt will have to actually work their ways out.

A lot of Canadians don’t understand that a mortgage could cost more than a house or a condo will or can sell for. This is what leads to people liquidating and once this happens sure the BoC can lower interest rates maybe into negative territory, but then the Loonie’s value will decrease and the cost for imports will rise and this is really where the problems occur. Because Canada’s losing its manufacturing, we’re becoming increasingly reliant on foreign imports, which puts a lot of pressure on keeping the Loonie respectable.

Self-sufficient countries like Switzerland, for example, base their economy around small businesses, Canada bases it’s economy around our big businesses and Canada has unfortunately made itself a country not friendly to manufacturing and this my dear reader could lead to a lower loonie and hyper-inflation if particular issues revolving around shrinking the size of Government aren’t addressed soon.

Interesting times ahead.