The March 25, 2020 – BILL C-13 the day Tax hikes were unavoidable in Canada, more than likely Inflation taxes – May 27, 2020,
So, it was pretty easy to know from an economic standpoint that BILL C-13 equated to deflation of the Candian dollar domestically. Now, on a global scale, I’m not entirely sure what BILL C-13 will do, because there are transactions and forces outside of Canada that are done in Canadian dollars, that could boost the value of the Canadian dollar in comparison to other fiat currencies, but that won’t be important to what happens domestically in Canada, because at this point there’s little to nothing the government can do to prevent deflation of the value of the Canadian dollar.
What can be a wee bit confusing to people is understanding how deflation of the Canadian dollar is going to lead to higher prices? Well the answer to the question lies in artificially low-interest rates, interest rates all over the world are artificially low and therefore at this moment, there are fiat dollars in the hands of people who didn’t earn them based on the value they provided to the market.
Therefore in order for a market correction, a lot of bankruptcies and insolvencies have to happen before any normality can return to the market place. When I say bankruptcies I mean bankruptcies from individuals, businesses, and Governments if you’re living beyond your means and you’ve been rewarded for it, you’re going to have to pay for it, because any money you have is actually distorting the market place.
This is part of the reason money is better served when it’s backed by a commodity, because as an example if there’s a short supply of something, it’s not a secret that there’s a short supply, but when central bankers can taper over marketplace problems, there are bubbles everywhere.
The Liberal Party of Canada and their political motives for an inflation tax
Sure the Liberal Party can raise taxes further, but if they do they’re obviously going to raise taxes on business people first, which is unlikely because the costs will get passed onto consumers almost immediately and although the NDP would assume raising taxes on businesses is a quick fix, similar to British Colombia, businesses will quc=ickly pass their new government costs onto consumers and the last thing any Left winger politician wants to do is start a war of words with small businesses, ignorance is bliss and letting sleeping dogs lie is the preference for most Leftist.
Because if most voters become aware of what’s happening, those swing votes will swing in the Conservative’s favor. What this means is that inflation will be the tax of choice, which is why if you’re hoarding Canadian dollars for the purposes of making purchases domestically, you might want to think twice about that!
I reminder that a lot of Canadians are ignoring is that the TSX has performed pretty well during COVID-19, there has been a lot of inactivity, which is a sign to me that prices are going to start rising once it becomes common knowledge how the Liberal Government is going to pay for all of this.
It’s unlikely that the average Canadian comprehend what’s coming, because a lot of Canadians trust their government, well, I consider the inflation tax the worst type of theft of the taxpayers’ dollar and that’s what I see happening, sure Liberals can raise taxes, they already created a carbon tax, but via Canadian regulations, there’s a barrier to entry that the current Canadian government is unwilling to address and a lack of austerity measures equates to inflation.
The only reason the world has embraced a fiat monetary system is to avoid austerity measures at all costs, now, eventually, countries run into problems faced by Argentina and Zimbabwe in which the Government is simply too expensive to pay for and therefore the loan servicing costs are unmanageable, but Canada isn’t quite there yet, what Canada has to be mindful of is another Democrat President of the United States.
In the event, the United States goes into a deflationary cycle with a democrat president, Canada will have a hard time finding a buyer for what it sells. I’ve said this before, Donald Trump has a lot of policies that are very close to being Democrat policies, tariffs is a Democrat thing, protecting the borders, that’s a Democrat thing, paying taxes via inflation, that’s a democrat thing, a lot of what Donald Trump does are Democrat policies, the main difference is that Donald Trump understands the importance of cutting regulations and if Trump were to lose, what would happen is the Democrats would put back regulations while spending more money and this would obviously trigger an economic downturn.
If you look at the TSX most of the stocks are only down because of Justin Trudeau’s policies. In America a lot of the socks are only up because of Donald Trump’s policies, it’s really that cut and dry right now and that should tell you everything you need to know about the volatility of the stock market.
Canada, in my opinion, unfortunately, is on the wrong side of history, we’re high on the hog and what should be obvious to everyone is barely noticed by anyone!
Interesting times ahead!