Seems to be a lot of confusion out there about why exactly Canada's economy isn't entirely under water like the rest of the world. Is it Conservative policy, was it Liberal policy? No one seems to really know, and both parties claim it was their doing.
Reality Check: The people make the economy and not the politicians. So in this article I will explain to you why our economy is currently percieved as being stable (which in reality it is not anymore stable than the currencies we depend on).
Canadians have all heard the stories about how "stable" our banking system is. The reality couldn't be further from the truth and a little known fact is our banks were bailed out by the U.S. Federal Reserve. This was an under the table deal which was only revealed this year and it was on top of the Canadian stimulus package put forth by the Harper Government and the Liberals. It coincidently didn't make Canadian news, and I'm sure most people reading this never heard about it. You were never meant to hear about it as it would fly directly in the face of the 'deep integration' plans currently underway.
Now I know my detractors will point at the "AAA" rating of our banks in the article and simply say they were just looking for more profit, so let me remind you the banks that failed in the U.S. all had "AAA" ratings. Rating agencies are run by the ratees. This should be obvious given that the S&P is only just now warning about U.S. debt even though U.S. debt has been a problem for awhile. The S&P is only now saying something because their credibility is being seriously questioned by those who bought into the USD koolaid.
So what's so great about the Canadian economy? Well we export resources, and this isn't because of political policy in the last few years. We are one of the few energy exporting countries left, in fact just recently Russia announced it would be cutting off petroleum exports in the month of May. This is just one more sign that the dawn of the post-petroleum age has begun due to peak oil.
What is bad about our economy? Well, about 60% of our economy relies on trade with the U.S. We give them valuable resources, and they give us USD. Unfortunately the USD continues to push towards record lows due to the QE programs while gold continues to push for new record highs. So what exactly is Canada getting for it's valuable resources? Not much. We are trading resources that are only increasing in value, for worthless digital paper that is not worth the paper it's not printed on, and is also decreasing in value. Sound like a good deal to you? Well it gets better.
What does Canada use to import pretty well everything? USD. Unfortunately for us, China has begun dumping the USD meaning that as our politicians push for more integrated trade between the U.S. and Canada, the rest of the world is trying to figure out how to dump the U.S. and not get stuck holding the empty bag. Canada will be the empty bag holder, as none of our politicians have the political will to say no to the United States. In other words, all 4 politicians telling us the economy will be fine are completely full of shit. We have no control over the economy, we are an exporting nation. This means as long as there are buyers, we can be sellers -- but if no one is buying, we won't be selling. We experienced this briefly in 2008 before the U.S. initiated the TARP programs.
So Canada, we have a big decision ahead of us. Do we decouple the CAD from the USD, effectively cutting off trade with them, but returning our dollar to a reasonable value? Or do we keep the trade going by devaluing our own currency and thrusting 8% or more inflation on Canadian citizens. I'll be honest, neither option is without it's downfalls. We will not escape this crisis pain-free.
* Updated | 11/09/2011:The decision is now ahead of us. As I predicted when I wrote this article on April 30th (posted just after midnight on May 1st), Canada is faced with a decision on whether to break the peg to the USD. Raising interest rates would prevent the inflation I mentioned (for a time) at the cost of our exports to the United States. However, as I mentioned in 'Miss Canada' our political "leaders" have no political will and this probably won't happen. This includes the NDP which voted alongside the Liberals and Conservatives to continue our illegal war against Lybia, in which we are actually backing Al-Qaeda. They are all puppets.
* Updated | 18/09/2011: Surprise, surprise, the truth about Canadian banks is coming out. Like I said, our banks are only as stable as the currencies we depend on. Look around the world... all of them are failing.
Canada is a country in economic denial.
Canadian banks were & are more healthy than some US banks. Did you even read the article you linked to!?
ReplyDelete"Mr Clark chief of TD, said the authorities [the US fed] were encouraging healthy banks to use schemes such as the Taf so as not to stigmatize their weaker counterparts. In January 2008, Ben Bernanke, the Fed chairman, said the Taf appeared to be succeeding because “there appears to have been little if any stigma”.
Yes. Chairman Bernanke is also wrong most of the time. This is why i confirm my story with multiple other links from multiple sources. It is called reading between the lines.
ReplyDeleteHere' a question you should ask yourself. If it wasn't such a big deal, why did no Canadians hear about it? Why did the federal reserve keep it secret? Because the U.S. economy relies on other exporting nations to be stable. This is why "non-US" banks were bailed out. Call it whatever you want, it is still a bailout.
Also, I guess you never finished my article: "Now I know my detractors will point at the "AAA" rating of our banks in the article and simply say they were just looking for more profit, so let me remind you the banks that failed in the U.S. all had "AAA" ratings. "
ReplyDeleteSo, it just means that we need to sell our resources to countries like Japan, Korea, Germany, France, Brazil, etc. Which won't be all that difficult. As the United States turns inwards, they will need our resources.
ReplyDeleteCanada is an incredibly rich country. What we need to do is to tax the export of those resources, to build a fund for the future.
And plan for a time when Canada annexes the United States, one region at a time, as that once great country disintegrates.
Wayne
http://madhatter.ca
Wayne, yes.. this would be inline with the option of returning our currency to a reasonable value and severing ties with U.S. trade.
ReplyDeleteI'm with you on this Richard. There was also an article in The Chronicle Herald on June 19, 2010 - ‘Not a bailout’: the great Canadian bank caper -by
ReplyDeleteRALPH SURETTE
Brenda