Socialist regulations, a lack of productivity, and historic government spending will lead to currency debasement for Canada – September 6, 2020,
Canada, namely old stock Canadians should never be confused with Americans. Most old-stock Canadians whether they admit it or not are Classical Liberals. Most Canadians parading around as Conservatives are Canadians who would rather identify as Liberals but can’t because they’ve come to the realization that Canada’s Liberal Party has gone too far Left for their liking.
When the staunch Liberals Party supporters are beginning to worry about the deficit, you know there’s something wrong. Most Canadians who have been alive since the 1970s know what an economic crash FEELS like. The average Canadian, namely the newly arrived Canadians don’t understand the difference between the private and public sectors. Furthermore, most Canadians don’t know what massive cuts to public spending means.
In this new era of cheap money via low-interest rates, there’s an assumption that cashflow or debt servicing will never be a problem, well debt servicing does become a problem when there’s a lack of productivity in the economy. Tax collection which is used to service debts is based on the anticipation of an amount of money coming to the Federal Government.
Just so you understand the magnitude of the Canadian debt servicing problem, Canada had to borrow money to service the debt pre-COVID. Now, the excuse Justin Trudeau gave Canadians is that his governments spending would lead to future job growth.
So we’re clear, the loonie lost value, based on what the failures of Trudeaus spending. Justin Trudeau didn’t only spend money Canadians didn’t have, he also added more regulations to Canada’s private sector, more regulations means that the private sector shrunk, while the Public Sector grew.
The public sector and all the people the public sector employs are reliant on taxes and money collected from the private sector and the Canadian government likes most is the INCOME TAX! If Canadians wonder why big PRIVATE companies get government perks it’s because without them governments wouldn’t get INCOME TAXES!.
Socialists often forget that employees can’t pay income taxes if they don’t have a job. Now, Canada as of September 2020 has this government welfare program named The Canada Emergency Response Benefit (CERB). Now, this program is used to replace the income a Canadian would receive had they been working a regular job.
From what I understand the people in this CERB program will have to pay income taxes, the problem is that these people aren’t being productive in the Canadian economy and any income taxes they’ll have to pay back will only be a fraction of the free money loaned to them.
So in actuality, this money is nothing more than a debasement of the Canadian dollar, because money without any value added to it, is a loss of purchasing power. Unfortunately, this loss of purchasing power doesn’t show up right away, because the debt owed by the Canadian Federal Government isn’t due yet.
It’s only when the massive shortfall is realized that problems will start to manifest themselves. Now, when it comes to currency debasement, nobody can predict the exact chain of events, government intervention can soften blow, but debasement of the currency targets people on fixed incomes and low wage earners.
CERB is also been like a pilot of Universal Basic Income, which based on my twitter research appears to be something Canadians are getting to used to. Unfortunately, UBI has been tried in most non-market socialist countries and it’s been an abysmal failure.
Because when people don’t have to work, they usually won’t, furthermore when there is little incentive for a low wage earner to be productive, they usually won’t be. Now, because of regulations on the Canadian economy, it’s very expensive to start a business, so this is not even a problem immigration can fix, furthermore I forgot to add that migrant workers also qualified for CERB, so immigration to Canada has turned into a net negative.
The signs are obvious and quite frankly I have better things to do with my time than write about doom and gloom. There is an opportunity in all of this because if you work smart, you can avoid economic crash heading Canada’s way. Now, that you know there’s a chance that the Canadian dollar will be debased, you can put yourself in a position to prosper.
I made a mini Currency Calculator which you can find by going here:
I suspect it will cost Canadians about $1.67 to buy 1 USD in the future, which means the Canadian dollar is overvalued right now, you may want to consider buying U.S dollars or maybe some Gold or Silver. The thing to remember with Gold and silver is your selling price, it’s not a guarantee that you will sell for the market price, so if you’re going to buy silver or Gold, make sure you position yourself to be able to sell it for a near market price.
Forex and precious metals aren’t the only opportunities here, I’m not so sure about real estate, because although the price of real estate might rise, as I’m seeing now with the excesses of units on the market, there might not be that many people who can afford to buy your property from you at an above or near market price, because real estate typically is financed via debt and if productivity is down, most people aren’t going to want to burden themselves with a mortgage.
But a person will want to put themselves in cash flow positive position, your imagination is the limit. Even in Argentina where their currency has been debased plenty of times, there are people thriving, so all is not lost, you just will have to be smarter when the welfare state inevitably collapses!
Interesting times ahead!