It’s Now Trudeau’s ‘Crummy Economy’

Reading Time: 1,770 words, 5 pages, 4 to 7 minutes.

The Canadian federal election is over, the Liberals won and Justin Trudeau is the new Prime Minister because the reigning Conservatives under Stephen Harper threw the election. Yes, you heard that right and you heard it here first. The Conservatives deliberately lost the election.

And, no, that’s not sour grapes (some people think I’m a Conservative). I’m not. I Am an Anarchist  which makes me a political atheist. This enables me to make fun of assholes along the entire political spectrum; from extreme left to extreme right and everyone in between. If they’re jerks, I’ll expose them and have a ton of fun in the process.

HOW Did Harper’s Conservatives Deliberately Lose?

How do I know the Conservatives threw the election? I’m glad you asked. There are several reasons.

a) Harper’s Conservative campaign was low energy,   lackluster, dull and uninspiring. This was no accident. Even their mudslinging only served to enhance their opponents and turn the electorate against them.

b) the Conservatives knew that they, and especially the control-freak Stephen Harper, were detested by many voters, yet they did little to endear or explain themselves to Canadians.

c) Canada emerged from the last recession relatively unscathed (compared to most Western nations) largely as a result of the commodity boom which is now turning into a bust with which the Liberals will now have to contend. Yet, the Conservatives hardly touched on this achievement except some general remarks about being fiscally conservative (no pun intended). The Liberals and the NDP castigated the Conservatives for adding $150 billion to the national debt.

EverBank’s Chuck Butler wrote, “after running emergency budget deficits in the wake of the 2008 financial crises, the Canadian government was in spitting distance from returning to a budget surplus in 2015.”  See the chart below.

150 billion

Source: EverBank Research Team

Harper’s Conservatives could have made political hay out of Canada’s performance in the last recession after running emergency budget deficits, but they deliberately didn’t.

d) Harper threw the election by straying from a simple tried-and-true message all Canadians could understand, “that all Canadians — rich or poor — deserve to keep more money in their wallets was drowned out by talk of niqabs” according to the Calgary Sun

Instead of selling unlimited opportunity — the kind where the shackles of taxation don’t tighten with every success — we talked about terror hotlines.

“Arguing that lower corporate taxes create jobs and continuous deficits cripple the future, was eclipsed by talk of stripping citizenships.”

This is deliberate self-sabotage from a party that knew how to stay in power for almost ten years.

e) Commodity industries like oil and mining have been decimated by falling commodity prices. According to Casey Research “Canada is the world’s sixth-largest oil producer. Oil makes up 25% of its exports. So it’s no surprise that crashing oil prices have sent Canada’s economy into a recession. On top of that, the value of the Canadian dollar recently hit an 11-year low against the U.S. dollar.”

Conclusion: the Conservatives know that this will turn into a major recession far worse than the last one and they don’t want to be at the helm when the shit hits the fan.

WHY Did Harper’s Conservatives Deliberately Lose?

Why did the Conservatives throw the election? I’m glad you asked that, too. As I mention in item d) above, they deliberately lost so that the Liberals would be in power when this long-overdue recession deepens. In fact, the next recession has already begun with Canada’s GDP contracting for the first six months of 2015 as shown in the chart below and it will only get worse in 2016.

GDP 2015

Source: EverBank Research Team

The Liberals in power will eventually get blamed for this next recession although initially the Liberals will blame Harper and his Conservatives just as President Obama blamed former President Bush for everything. However, that excuse eventually wore thin so the Democrats had to stretch and blame the weather.

Governments, all major Western governments are now out of ammunition to fight this next recession for several reasons outlined below.

a) They’ve borrowed massively and went deep into debt so additional borrowing is more difficult and unlikely to make much difference since they’ve hit the limits of diminishing returns.

b) Interest rates are zero-bound longer than ever before in history so all that’s left is a Negative Interest Rate Policy (NIRP) which will also have limited effect. Zero-bound interest has already driven liquidity into equities and bonds. This leaves little gunpowder from the big money and the small money is finding a new home under mattresses.

c) The U.S. as the largest single economy in the world is politically paralyzed and unable to mount effective fiscal policy initiatives other than increase the debt limit and most of that is interest on the interest on the interest, etc. Monetary policy alone is no longer sufficient to have a positive effect.

d) The U.S. is Canada’s number one export customer. The middle class, especially in Amerika, is dying and it’s the middle class that drives the consumer economy.

e) GDP is shrinking in Western countries regardless what illusionary, manipulated statistics government propaganda infects the ass media.

f) Macleans’ The young and the heavily indebted shows how difficult it is for young Canadians in the early and middle stages of their earning years to take on more debt or enter the over-priced  real estate market.

g) Both Moody’s and The Economist warn of high Canadian debt, housing prices. “High consumer debt because of overpriced housing [are] a bad combination with a slowing economy.”

h) Harper, being from Western Canada is all too familiar with the economic importance of Alberta’s oil patch to the country. Falling oil prices are killing Alberta’s economy and lowering Canada’s GDP. The greenie wienies in B.C. refuse to allow pipeline construction to the Pacific coast. And, now, Obama has officially rejected the Keystone Pipeline to the Gulf coast. This leaves only a long and costly pipeline to the East coast for land-locked Alberta to market its oil and gas.

i) Investors have been abandoning Canada. Bloomberg reports that “money is flooding out of Canada at the fastest pace in the developed world as the nation’s decade-long oil boom comes to an end and little else looks ready to take the industry’s place as an economic driver.”

money outflow

As one Zero Hedge reader commented, you know Canada is in trouble “when its own predatory banking sector has to travel abroad to find new victims to enslave… killing the value of their currency in the process.”

j) As I outlined in greater detail in Demography + Debt = Doom, a ‘Perfect Storm’ of demography and debt will economically and financially doom almost every country on earth. Zero Hedge featured it as a guest post. Although I wrote it more than a year ago, it’s truer now than ever.

Ass Media Propaganda

The ass media will do its utmost to convince the sheeple not to panic with articles like Yes, we’re in a recession. Here’s why you shouldn’t panic about it with the by-line, “Most everyone agrees Canada is in a downturn right now. But we shouldn’t worry ourselves silly about it.”  They then use manipulated government statistics to try to assuage our concerns.

a) “Canada created 96,000 jobs during the first half of the year, and the unemployment rate remains unchanged at 6.8%.”  I wish I had a dime every time I exposed these rigged employment statistics. As well, there’s no mention how many of these so-called jobs are cushy government jobs or low-wage McJobs in the service industry.

b) “Retail sales increased a modest 1.4% during the first four months of the year…” completely overlooks the difference between governments’ bullshit CPI statistics and the real rate of inflation. In other words, sales are down about 4%.

c) They cite another, “reason not to panic is that economists are banking on a stronger back half of the year.” I almost snorted coffee through my nose when I read that! Do they mean the same pseudo-economists who failed to forecast the last Great Recession and have been telling us for seven years now that interest rates will soon rise? That’s funny!

d) “The U.S. is showing signs of the recovery that was anticipated at the start of 2015.” Regular readers know how many times I’ve exposed that so-called U.S. recovery bullshit as a bunch of ‘hopium’ and fudged statistics.

e) And, then they tell us, “Perhaps the most important thing to remember is that panicking will only make the situation worse.” Listen people; when they tell us not to panic, then it’s time to friggin’ PANIC!

Conclusion: don’t believe the ass media’s propaganda.

Poisonous Bipartisanship

During the 2015 Canadian federal election campaign, poisonous, Amerikan-style bipartisanship and hatred has infected Canadian politics to a degree I’ve never seen before. And, I’m trained as a political scientist who has observed elections for more than the forty years that I’ve been able to vote. One sign read, “I’m more afraid of Stephen Harper than terrorists.”

It’s become known as Harper Derangement Syndrome (HDS), “whereby people are so blindly incensed by the mere fact Stephen Harper is prime minister that they can’t think straight…   For some incredible examples of HDS, don’t bother with the obviously biased article, but see the reader’s comments on How the deficit gambit stunned Conservatives into silence. Talk about extreme hatred! That’s unusual coming from normally polite Canadians.

End note – The Canadian media, being of leftish bent, is in love with Justin Trudeau and they won’t hold him any more accountable than they did the former PM Chretien who talked and acted stupid. The media loved him too, despite the $200 million that disappeared in the infamous Quebec “sponsorship scandal” which the ass media long since conveniently forgot.

Unfortunately, people get the government they deserve. Do you really believe they won’t raise taxes? Wait and see.

Hang on, Canada! It’ll be a wild ride to the bottom and if you aren’t prepared, it’ll be very painful. Oh, and it’ll all be Harper’s fault.

Don’t forget the mantra:

We cannot borrow our way out of debt.

We cannot spend our way to prosperity.

We cannot pretend our way out of trouble.

However, Justin Trudeau’s Liberals are going to try … Good luck with that!


November 8, 2015

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About gerold

I have a bit of financial experience having invested in stocks in the 1960s & 70s, commodities in the 80s & commercial real estate in the 90s (I sold in 2005.) I'm back in stocks. I am appalled at our rapidly deteriorating global condition so I've written articles for family, friends & colleagues since 2007; warning them and doing my best to explain what's happening, what we can expect in the future and what you can do to prepare and mitigate the worst of the economic, social, political and nuclear fallout. As a public service in 2010 I decided to create a blog accessible to a larger number of people because I believe that knowledge not shared is wasted.
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