Trudeau Is Going To Bury Us In Debt

Twin_Moose

Hall of Fame Member
Apr 17, 2017
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Government spending is becoming a problem and printing money is a dangerous solution

People around the globe are rightly concerned about the health risks from the second wave of COVID-19, but there is a growing economic risk that we believe many are choosing to ignore — in large part for political reasons.

Government spending is ballooning in many countries, and while some of that has to do with combatting the pandemic, in other cases political agendas are coming into play as well, hijacking the relief process.

That appears to be the case here in Canada, where the Liberal minority government — backstopped by the NDP — is looking to implement massive, costly programs including a national daycare system, pharmacare, affordable housing and green initiatives.

Unfortunately, we have few details of the ultimate costs of these programs, as the Canadian Federal government has now gone 316 days without an actual budget, setting a new all-time record.

Nevertheless, it is clear that spending has skyrocketed. When the provinces are factored in, Canadian budget deficits are expected to end the year at about 20 per cent of GDP, which will be the fourth-highest level in the world, according to a recent IMF report cited by Bloomberg.

While the NDP has been lobbying for a wealth tax, so far there have been few indications of tax hikes from the Liberal government.

For those wondering how these fiscal spending plans will be paid for, one has to look no further than the Bank of Canada, which has been printing record-setting amounts of money to purchase government debt.

In total, so far this year our central bank has expanded its balance sheet at 2.5 times the pace of the Federal Reserve.

It is expected that the Bank of Canada will end up controlling more than 56 per cent of our total government bond market by end of 2021, up from 29 per cent today, according to estimates from Ian Pollick , head of fixed income, currency and commodity research at Canadian Imperial Bank of Commerce, as cited by Bloomberg. If you think about that, it sounds an awful lot like Modern Monetary Theory (MMT) is now being tested in this country.

The problem looking forward is twofold — our economy is now a net importer and we are not the world’s reserve currency.

The National Post’s Jesse Snyder wrote an excellent piece recently about how the Canadian economy has been transformed in the past decade moving from a healthy three to five per cent trade surplus to an annual average deficit of negative two to three per cent. Over the same period, Canadian investments in assets abroad surpassed foreign direct investments by $804 billion.

This is when it’s important to remember that our country’s GDP is less than two per cent of the world’s output, compared to the American economy at 24.4 per cent. Given our much smaller status, one has to ponder the risk to our currency and our economy should we continue down the path we’re going.

Even Trudeau’s former top adviser, Gerald Butts, appears to have his doubts about MMT, recently posted the following on twitter: “I read The Deficit Myth this week. I dunno guys. I see why you want to believe in MMT, but it feels like snake oil to me. Things that sound too good to be true almost always are.”

For Canadian investors, the current situation is definitely worth keeping a very close eye on and in our opinion represents a significant long-term risk. The good news is one can implement some hedging by ensuring you have foreign holdings in their respective currencies as part of your portfolio.

Now is not the time to be experimenting with snake oil, either in the economy or in one’s investment accounts.

Pretty good article
 

bob the dog

Electoral Member
Aug 14, 2020
242
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The good news is one can implement some hedging by ensuring you have foreign holdings in their respective currencies as part of your portfolio.

I agree that it's time we realized the credit cards are maxed out. See Venezuela.

The sad part is it is very difficult to hedge with foreign holdings because the banks do not encourage it and charge exorbitant rates if they do offer the service. Strangely USA is not considered a foreign holding to Canadian banks.
 

Decapoda

Council Member
Mar 4, 2016
1,343
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The good news is one can implement some hedging by ensuring you have foreign holdings in their respective currencies as part of your portfolio.

I agree that it's time we realized the credit cards are maxed out. See Venezuela.

The sad part is it is very difficult to hedge with foreign holdings because the banks do not encourage it and charge exorbitant rates if they do offer the service. Strangely USA is not considered a foreign holding to Canadian banks.


Premiums are still pretty decent on physical gold.
 

Mowich

Hall of Fame Member
Dec 25, 2005
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Some of them are and some of them aren't! A smart person would identify three or four thousand jobs in each province that need doing & put them on a list according to need and other criteria. Then you put the word that there are jobs paying $500/week for those who want them and interview willing participants for qualifications. You make it clear if they quit or get fired they are exempt from future programs. Where there is sufficient number of jobs for all the unemployed you then cancel the welfare programs, except for the disabled and elderly.
Agreed, JLM. There are far too many of the unemployed who are quite happy to sit on the government dole when businesses are desperately in need of employees. There appears to be no oversight whatsoever into who does and who does not, or should not qualify for government funding.
 

Hoid

Hall of Fame Member
Oct 15, 2017
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The NDP want to know when the government will help students.

The government has committed over $9 billion in student support.


The conservatives want to know when the government will help the poor suffering airline industry.

The government has already spend $1.1 billion in wage subsidy for the airline industry.

The Bloc wants to know when the government will help out the aerospace industry - which i believe is french for "bombardier""

I'm not even going to give a figure on that one.

And here in our tiny corner of the web everyone wants to know when Trudeau is going to stop running up the debt.
 

Decapoda

Council Member
Mar 4, 2016
1,343
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And here in our tiny corner of the web everyone wants to know when Trudeau is going to stop running up the debt.


Those of us who look outside of our "tiny corner of the web" know that you don't actually have a clue beyond you're own hyperbole.

And it's a legitimate question...since it's now been conclusively determined by all with a functioning brain that the budget is not actually going to balance itself, and "debt to GDP" was an obvious shell game intended to justify abhorrent Liberal spending.
 

Hoid

Hall of Fame Member
Oct 15, 2017
20,408
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Therefore every opposition party demanding more spending doesn't count.

It's still all about Trudeau.
 

bob the dog

Electoral Member
Aug 14, 2020
242
25
18
$173 M for research into greenhouse gas emission reduction is another waste. They already know what to do but just haven't bothered to do it. Money is like water to JT.
 

Ron in Regina

"Voice of the West" Party
Apr 9, 2008
15,217
126
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Regina, Saskatchewan
Now interest rates... as long as they continue to cooperate with historic lows and no change.... her stance might work.... and how many decades of historic low interest rates will we need before we end up behind the eight ball debt-wise???
 

bob the dog

Electoral Member
Aug 14, 2020
242
25
18
Now interest rates... as long as they continue to cooperate with historic lows and no change.... her stance might work.... and how many decades of historic low interest rates will we need before we end up behind the eight ball debt-wise???

We're not already hooked on the black? Like lemmings running toward a cliff.
 

bob the dog

Electoral Member
Aug 14, 2020
242
25
18
The CEWS program is currently supporting nearly two million workers across the country covering 75 percent of wages for employees in hard-hit businesses. Prime Minister Justin Trudeau has extended the wage subsidy until the summer through June 2021.
 

Ron in Regina

"Voice of the West" Party
Apr 9, 2008
15,217
126
63
Regina, Saskatchewan
The NDP want to know when the government will help students.
The government has committed over $9 billion in student support.
The conservatives want to know when the government will help the poor suffering airline industry.
The government has already spend $1.1 billion in wage subsidy for the airline industry.
The Bloc wants to know when the government will help out the aerospace industry - which i believe is french for "bombardier""
I'm not even going to give a figure on that one.
And here in our tiny corner of the web everyone wants to know when Trudeau is going to stop running up the debt.
I’m still waiting on somebody to justify the first four years of Trudeau liberal spending...Before this pandemic that is saving Trudeau’s bacon..... and it’s so convenient that nothing gets mentioned pre-pandemic with respect to spending at this point. Memories like goldfish.
 

pgs

Hall of Fame Member
Nov 29, 2008
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I’m still waiting on somebody to justify the first four years of Trudeau liberal spending...Before this pandemic that is saving Trudeau’s bacon..... and it’s so convenient that nothing gets mentioned pre-pandemic with respect to spending at this point. Memories like goldfish.
If the media fails to report it , did it happen ? What’s a few billion between friends .
 

Ron in Regina

"Voice of the West" Party
Apr 9, 2008
15,217
126
63
Regina, Saskatchewan
The CEWS program is currently supporting nearly two million workers across the country covering 75 percent of wages for employees in hard-hit businesses. Prime Minister Justin Trudeau has extended the wage subsidy until the summer through June 2021.
The young guy across the street (about 28yrs old) who worked maybe 3 months this year in two different stints with two different companies (one moving company for about 6wks & one masonry company for about 6wks, but he has an issue showing up regularly for work) and collected the full CERB allotment for his four months has stated about a month back that he's already guaranteed $2000 from some other Gov't Program (EI?) until Oct. 2021 now (his girlfriend is on Welfare so the rent & bills are paid already) so he's buying an Xbox toy and will figure things out next October. They'll probably need a new sofa by then anyway unless she rotates him around the living-room without getting between him & the TV. So rent & utilities paid for plus $2000/month net disposable income plus what she makes off her side-gig under the table from home. Not much incentive to get off the couch until next Fall.....crazy times....

Some quick conservative reverse engineering math to factor in their rent and bills for smartphones and other utilities to the plates for their vehicles assuming they both had to get out'a bed and go to regular 40hr/week jobs (about 168hrs/mo each) they'd have to be employed full-time at about $20/hr gross each (or one of them making $40/hr, etc...) to just match what their getting now through Gov't$$$ with their money for nothing & their chicks for free.
 

petros

Hall of Fame Member
Nov 21, 2008
94,902
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Moccasin Flats
We've been doing it all wrong Ron. We f-cked ourselves. We dont need to take care of ourselves, let's let the immigrants skipping dishes do the hard grind of life for us.

Hooray for multiculturalism.
 

Ron in Regina

"Voice of the West" Party
Apr 9, 2008
15,217
126
63
Regina, Saskatchewan
.....what their getting now through Gov't$$$ with their money for nothing & their chicks for free.
We've been doing it all wrong Ron. We f-cked ourselves. We dont need to take care of ourselves, let's let the immigrants skipping dishes do the hard grind of life for us.

Hooray for multiculturalism.
I'm assuming what I've described above isn't a completely isolated case. I've missed one day of work so far in 2020 due to a back issue (bulged a disc a few years back), and between the two of these folks across the road, they've worked less days together than I've had weekend days between January & May or June (where I work less hours on the weekends, but still work) in 2020.

Being Saturday & my day off, I've met one driver at my office to load four tires (255/70R22.5's) onto his truck for installation Monday AM, set up the border crossings for three others, arranged the rescue of another off the freeway in Madison WI (Hub Bearing went out taking the belt with it but the fan is still intact) & got him into a hotel, and troubleshot an electrical issue over the phone with a trailer in Indiana (Ground issue in the trailer plug), and the day's is still only 1/2 over.....& it's a lite day 'cuz the weather is still warm-ish so no shit American diesel or freeze up issues yet.

This couple across the road on a mix of welfare & CRB between them, if they stay off the booze & drugs, with their rent & bills covered, and her under the table side-gig from home...should be able to bank $20,000 from the CRB alone (they won't, but they could) for not having to be self sufficient until at lest next October with the Trudeau Bucks & zero accountability. From the banked $20,000 they could pay the $2,400 in income tax on the CRB & still have enough saved in one year to take several vacations to exotic destinations once COVID restrictions let up, etc....or just stay high for a portion of that time around 'paydays'....life is about choices.
 

pgs

Hall of Fame Member
Nov 29, 2008
19,790
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B.C.
I'm assuming what I've described above isn't a completely isolated case. I've missed one day of work so far in 2020 due to a back issue (bulged a disc a few years back), and between the two of these folks across the road, they've worked less days together than I've had weekend days between January & May or June (where I work less hours on the weekends, but still work) in 2020.

Being Saturday & my day off, I've met one driver at my office to load four tires (255/70R22.5's) onto his truck for installation Monday AM, set up the border crossings for three others, arranged the rescue of another off the freeway in Madison WI (Hub Bearing went out taking the belt with it but the fan is still intact) & got him into a hotel, and troubleshot an electrical issue over the phone with a trailer in Indiana (Ground issue in the trailer plug), and the day's is still only 1/2 over.....& it's a lite day 'cuz the weather is still warm-ish so no shit American diesel or freeze up issues yet.

This couple across the road on a mix of welfare & CRB between them, if they stay off the booze & drugs, with their rent & bills covered, and her under the table side-gig from home...should be able to bank $20,000 from the CRB alone (they won't, but they could) for not having to be self sufficient until at lest next October with the Trudeau Bucks & zero accountability. From the banked $20,000 they could pay the $2,400 in income tax on the CRB & still have enough saved in one year to take several vacations to exotic destinations once COVID restrictions let up, etc....or just stay high for a portion of that time around 'paydays'....life is about choices.
Welcome to Canadu , and her little brother Ottawant .