[damian13ster]

The problem is - the one who is most overextended is the government. And they keep spending into oblivion like higher interest rates will never happen

 

[damian13ster]

They don't decide interest rate of their debt

 

[damian13ster]

If you want to persuade people, it is better you are being polite.



Technically, if the economy improve, the tax revenue will also increase.
What concern me is not one time spending, it is structural deficit that I mention previously. After all, unlike you and me, the government will not die, so it will always able to service its debt. Consequentially, it never needs to repay its debt. In case of a change in regime, a new government that control the land will also need to take over the debt, unless it wants to never borrow money in the future. (You can't inherit a house without inherit the mortgage). However, if the market caught wind of the fact that the government is running a Ponzi scheme (welfare state when we have aging population), the market will not be this kind.

'if the economy improve' - we are at historically low investment, and historically low R&D spending. On what basis would one think economy is going to improve? Only thing Canada has going for it us climate change. Warmer temperatures will unlock value in vast mass of land. Studies show Canadian economy would be best at +4 warming. Ironic, isn't it?

Exactly, you are looking at major devaluation of a dollar unless trend reverses quickly, and that means stagflation

 

[damian13ster]

Housing was never supposed to be retirement savings vehicle. Making it so is one of the root causes of economical problems in Canada

 

[damian13ster]

All they care about is next elections.
Long term consequences be damned

 

[damian13ster]

Loonie goes up because oil goes up.
Compare where loonie was at 80$/bbl in 2010-2013 to where it is at 80$/bbl now.
Then you wouldn't talk nonsense about loonie going up.
CAD is still a petrodollar. It is just weaker than it was pre-2014.

 

[damian13ster]

Index for tax deduction is a joke. Like inflation doesn't exist

 

[damian13ster]

Inflation is a tax on the poor.
It is crazy how Bank of Canada and government doesn't react. I guess they only care about the rich.
When it comes to the market - there is really no other place to put your money right now.
You can't put it in bonds, a lot of people are priced out of real estate. Some companies have pricing power to thrive in this environment so they are only plausible investment at this point.

 

[damian13ster]

Even federal banks no longer pretend inflation is transitory.
It is policy induced inflation.

 

[damian13ster]

The "tab" has to be serviced but will never be paid in full.......nor does it need to be. Governments use debt to build things for a better future.

As per Nanos for November 2021
Only 11% of Canadians believe future generations will have higher standard of living
63% responded the standard of living will be lower.

Government is used historically high debt in a way that destroys Canadians' hopes

 

[damian13ster]

The limited supply of nothing doesn't create value.
Cryptocurrency is not a cash alternative, it is much more volatile, and much more manipulated.
The entire idea imho is pretty bad. It is also not a hedge since it falls every single time markets do.
It is simply high-risk gambling play with potential huge reward or huge drop in value.

 

[damian13ster]

I got no idea what the fed trying to stimulate here.

They basically got themselves into a corner. Too much money printing and now there is really no way to slow down inflation without crashing the economy.

 

[damian13ster]

I don't think they are worried about average Joe. Public pensions though? Stability of financial institutions?

 

[damian13ster]

That's the thing. They don't want to rip off the band-aid. Same with Canadian real estate. All policies introduced serve to jack up the prices even more. Just so it lasts until next election.

It is a massive game of musical chairs, and no one wants to stop the music, because they don't want to be the ones blamed for repercussions.

 

[damian13ster]

Hmm, I am pretty sure if CEO of McDonalds worked for free and gave all his earnings to workers, they would get less than 8$/YEAR extra.

CEO pay doesn't look right, but it is not a solution to worker salaries

 

[damian13ster]

Oh, government being idiotic and destroying the economy, hurting middle class is one thing.
CEO pay not being a culprit for employee wages being what they are is another

 

[damian13ster]

No argument there at all.
The problem is when the 'message', 'virtue signaling' is distracting from pursuing actual solutions to actual problems. Let alone when 'solutions' introduced to perceived problems is detrimental and making actual problems worse

 

[damian13ster]

I feel like CPI is borderline propaganda at this point.

Gas prices up nearly 40 cents/litre from this time a year ago (edit: my bad, using Dec 31st numbers it's "only" up about 20 cents... lol). Let's not even talk about housing.

Can someone explain why the US inflation numbers are so much higher? Is their measurement method better, or is there some other reason?

Baskets are different. For example, used cars are included in US but not in Canada

 

[damian13ster]

Yep, privatizing the profit and socializing risk - that's Canadian housing in a nutshell.
That's why it is extremely important to phase out CMHC. Such concoction should not exist in over-inflated market

 

[damian13ster]

Sabrina Maddeaux: When does the Bank of Canada's lack of action become reckless?

Who, exactly, does the Bank of Canada serve? The answer is ostensibly straightforward: the economic and financial welfare of Canada. However, the answer has…

nationalpost.com