A plunging Stock Market Strengthens The U.S Dollar, Countries like Canada with a Federal Deficit Spending Problem Face Challenges – March 6, 2020,
Writing this post as a Canadian, it appears the Liberal Party of Canada, as well as the Bank of Canada, is forgetting the history of economic crashes and what eventually starts to happen to currencies when there’s an economic downturn. I’ll give an example that people tend to forget, Switzerland, The Swiss franc is in such high demand that the central bank is imposing charges on stockpilers. Swiss savers are being made to pay for global demand for the Swiss franc because Switzerland has the world’s most stable democracy and is known as the landlocked country who knows how to keep its house in order.
Negative interest rates remain absolutely necessary for Switzerland, to keep people from hoarding the currency, well because people aren’t hoarding the Swiss Franc as they used too, at least in digital terms, even more people are flocking to the U.S dollar during times of economic crisis. At present this Coronavirus is injecting fear into the marketplace, people are traveling less, people are of course spending, but they’re not spending leisurely, people are spending so they won’t die!
Now, although Canadians would like to imagine they’re global importance is equal to America’s, they’d better be wary of what happened to the Canadian dollar the last time the U.S dollar began its accession. Canada could also be losing its status as petro-dollar, consider reading the article below:
Warren Buffett, one of the world’s most influential investors, has pulled out of a proposed $9 billion liquefied natural gas project in Quebec
Buffett’s exit from $9 billion Quebec LNG project after rail blockades ‘a signal’ to investors | financialpost.com
‘We’re not going to find $4 billion tomorrow morning, and we sure aren’t going to find it in the region,’ says Saguenay deputy mayor
So, via current policy, it might prove a challenge for Canada to return to creating artificial inflation the way it tending to do in the past. Under the leadership of Justin Trudeau and the Liberal Party of Canada, Trudeau appears to be hell-bent on creating real inflation, also known as a public sector financed not by production of the Private Sector, but a Public Sector financed purely by printing money. It’s very easy for a public sector to become 50% of a countries economy if there’s an economic downturn and I’m not sure if the Liberal Party of Canada is comprehending this
North American stock markets plunge at the start of trading again | ctvnews.ca
There is only an upside to deficit spending if the investments made by the government into the Canadian economy bring the government back more money than what the government spent. One of the major beneficiaries of Trudeau’s Deficit spending was the media, there are a lot of “yes men” in Canadian media today, the only mainstream media companies in Canada able to tell the truth is the financial media. The only reason the financial media in Canada is able to tell the truth is that most Canadians have not a clue what is being written in Financial Post as an example.
The Finacial Post has been ringing the alarms about Trudeau’s wreckless deficit spending for years now, but it’s unlikely most Canadians can comprehend what’s happening. Canada is a recession away from this getting very bad. Let’s hope the U.S doesn’t fall into recession, because in a recessionary scenario, based on all the regulation cuts Trump has made to the U.S economy, as long as Joe Biden or Bernie Sanders doesn’t win, Trump’s America is going to be 100% in the driver’s seat.
The price of Gold is skyrocketing in every currency except for the U.S dollar, why? Because Gold usually doesn’t pay a dividend, Gold is a hedge against inflation, sure the U.S might get hit with inflation, but it’s still the largest consumer for most of the world’s good and services, which means the return on investment in U.S dollar terms would be better than return on investment in let’s say Canadian dollar terms.
In a time of fear and panic, outside of Canada, nobody is going to want to hoard Canadian dollars, people would rather hold U.S dollars, I’ve often said why Canada has opted to devalue its currency is beyond me, but eventually, your wish is the markets demand, the devaluing of the Canadian dollar has been used to finance Canada’s public sector and during times of economic downturns there reaches a point in which the cost to service the public sector far exceeds the revenue the government is bringing in, this could happen while inflation is destroying Canadians purchasing power.
The coronavirus has proved that Canadians value their health, but I’d like to remind people that the Carbon tax is bout to kick in and Russia and Saudia Arabia are currently arguing about cutting oil production. America is energy-independent but a lot of the world is currently energy DEPENDENT!
I’ve been saying that I know who is behind the rail blockades in Canada, some people think it’s Americans, I actually know better, sure the people behind the rail blockades might be located in America, but the financiers appear to come from a country that Justin Trudeau may have inadvertently pissed off a few years ago during his virtue signaling world tour!
Canadians get ready, don’t be surprised if it costs you more Canadian dollars to purchase fewer U.S dollars!
Interesting times ahead!