Oh Canada - Reflections On An Economic Experiment

Tyler Durden's picture

Authored by Kevin Muir via The Macro Tourist blog,

It seems like the only time Canada makes the news is when America elects some right wing President the Hollywood elite don’t like, and they all threaten to move to Canada.

We are usually too polite to say something, as it is often clear the Americans are in the midst of quite the family squabble, but what makes these Hollywood shmoes think we want them? Leah Dunham? Alec Baldwin? Whoopi Goldberg? It’s not like we have an open door policy for Hollywood complainers. But while we are on the subject, we would like Seth Rogen back (tell him our pot laws are about to loosen up, that should get him), and my daughters have asked to put in word for the two Canadian Ryan’s to return home (Gosling and Reynolds). America, you can keep Justin Bieber, Howie Mandel and William Shatner.

http://themacrotourist.com/images/2017/09/SethSep1217.png

But that’s often the most news coverage that Canada receives. And in terms of economic news, Canada has trouble making the B segment on even the most boring day of financial network TV.

That’s a real shame because there are some interesting economic experiments happening in Canada.

There are two major differences occurring with Canadian economic policy, and many experts are watching with great interest how they play out.

The first is on the fiscal side. Canada was at the forefront of electing a leader who promised more infrastructure spending. Before Justin Trudeau, most politicians were running on platforms of promising to balance the budget and cut spending. But Trudeau’s win ushered in a new worldwide wave of politicians advocating the opposite.

 

The second interesting development is Canada’s monetary policy. Bank of Canada Governor Poloz has taken a much different approach than most Central Bankers. Whereas it has been typical for Central Bankers to guide markets and remove short term policy uncertainty, Poloz believes this unproductive, and has instead recently surprised the market with a rate hike that was not telegraphed in advance.

Are Canadian politicians and Central Bankers on the cusp of new trends that will sweep financial markets? Or will this be like maple syrup on bacon - purely a Canadian thing? Easier fiscal policy with less reliance on monetary stimulus is the opposite of policy trends of the past decade. Canada’s success or failure might set the tone for the rest of the developed world for years to come.

Recapping Canada’s recent economic past

Much to the surprise of the legions of Canada bears (yes, hedgies, I am talking about you), the Great White North has been the best performing G7 economy over the past year.

http://themacrotourist.com/images/2017/09/CanadaGDPSep1217.png

This growth occurred despite warnings about the unsustainability of the Canadian housing bubble and the prediction of doom from the energy market’s collapse. By most measures, Canada should have been nowhere near the top of the G7 growth list. Usually, Canada’s performance follows its main trading partner, the United States, with a little bit of a commodity kicker/drag. But US GDP is not as robust, with GDP growth declining, and is now, in fact, sitting below Canada’s.

So what’s going on in the land of frozen ponds and hockey sticks?

For the next part, I am going to rely on the terrific work of Bloomberg reporter Luke Kawa for a bunch of charts, starting with this one. Justin Trudeau was elected on a platform of increasing infrastructure spending. It took a little time for Trudeau to get the fiscal stimulus flowing, but since mid-2016, infrastructure spending has spiked higher.

http://themacrotourist.com/images/2017/09/CanadaInfraSep1217.png

Many of my free-market / libertarian readers will view this sort of government spending as wasteful, inefficient and ultimately counter productive for the economy. To which I reply, that is your prerogative and you should pull out a stack of pink tickets because there is even more infrastructure spending scheduled. This infrastructure spending pulse is not about to roll over, but instead, accelerate from here.

I am a huge fan of Richard Koo’s work. Koo coined the term “Balance Sheet Recession” and believes monetary policy is ineffective after the bursting of a credit bubble. Here is his explanation from a 2015 Maclean’s article:

A balance sheet recession typically happens after the bursting of a debt-financed bubble. In the bubble days, people leverage themselves up, and once the bubble bursts, liabilities remain, asset prices collapse and people realize their balance sheets are underwater. When that happens, people start repairing balance sheets by paying down debt or increasing savings, which is basically the same thing. That’s the right thing to do at the micro level: everyone in that situation has to get their financial house in order. But when everybody does it all at the same time, then we enter a massive fallacy of composition problem [in other words, while individuals are correct to save and pay down debt, if everyone does this at the same time it hurts the economy by lowering consumption]. If someone is saving or paying down debt, you’ve got to have someone on the other side borrowing and spending money. But when a debt-financed asset bubble collapses, everybody could be paying down debt and no one is borrowing money, even at zero per cent interest rates. In that case, all the savings that are generated and all the debt that’s repaid comes into the financial sector but won’t be able to leave the financial sector. That becomes the leakage to the income stream. And this can happen even with zero interest rates.

Koo believes that governments need to step up and take over the spending so that the economy doesn’t enter into a deflationary self-reinforcing loop (ala Japan in the 1990’s.) I can already hear the guffaws from all my hard money readers. The last thing the government needs to do is spend more money is what they will say. We need to save more, spend less, and tighten our belts. Well, that has been tried. Germany gave that prescription to Greece and it nearly took down the European Union. You cannot save your way out of a balance sheet recession. There are only two ways out. You either have a vicious 1929 style depression, or you inflate your way out. And say what you want about the morality of inflation, but it doesn’t appear the public has the stomach for an Austrian style reset. So, regardless of what you think correct or moral, it seems clear that that the eventual end game is inflation.

You can have governments spending money on non-productive stuff like giving away lavish benefits to government employees, or even worse, wars. Or you can have governments spending money on infrastructure that will improve society’s productivity. I choose the latter.

Canada’s experiment with infrastructure spending seems to be working, at least so far. Now maybe this is a disaster in the making. Maybe this will end in tears. If you are in that camp, then grab some sell tickets and hit the bid. But I think it is actually one of the reasons for Canada’s economic outperformance. And unlike the short term stimulus from a war, or a tax cut for the rich, I suspect this spending will pay dividends many decades in the future.

How much spending is too much spending is the real question. I don’t think this works at extremes. Yet when the bond market is begging someone to spend, it certainly makes sense for governments to step up. When evidence government spending is crowding out productive private investment comes to the fore, then I will be sympathetic to the idea that government is spending too much. But if anything, we have the exact opposite situation. Private corporations have nothing to invest in, so they buy back their equity in a stupid levering up of the corporate sector balance sheet.

In April of 2014, Canada sold 50-year paper at a yield slightly under 3%. If the government can’t invest that money in infrastructure to earn a return better than 3%, then they are a lot more incompetent than even my most extreme libertarian friends believe.

I am not sure if the hard money advocates in America and Germany will allow these two economic zones to loosen the purse strings and invest in their countries. But I want to point something out. Have a look at the US budget over the half century.

http://themacrotourist.com/images/2017/09/USBudgetSep1217.png

After the 2008 Great Financial Crisis discretionary spending has not increased, and in fact, declined and then leveled out. This was the Tea Party’s influence with the sequestration mumbo jumbo. And in Europe it looks similar due to German’s insistence on austerity.

So how did cutting discretionary spending work out over the past decade? Did it fix the debt problem? Nope. In fact, overall debt is much worse because the economy is growing so slowly. By creating a pro-cyclical fiscal drag, it forced monetary policy to do all the heavy lifting. Now you may blame the Central Banks for the stupidly stimulative policies, but it’s easy to forget how close we were to the whole economic system imploding in 2008. I will concede that the Central Bankers should have tossed the ball back into the government’s court and told them, “we have done all that we can do, the rest is up to you.” But don’t forget that Bernanke tried that, and the Tea Party just demanded more budget cuts.

To some extent, this is a philosophical debate. Either you believe Richard Koo, or you are an advocate for the Libertarian Austrian style reset. You can disagree with my analysis all you want, but if Canada’s recipe proves successful, then I suspect governments throughout the world will follow that model. As I often say - it doesn’t matter what should be done, as traders, all that matters is what will be done. So for my hard money friends who are insulted with this government response, put away your outrage and watch closely for signs of success or failure. Would you rather be right, or make money?

Monetary policy divergences

Talk, talk, talk. It seems that’s all the Federal Reserve does. Speech after speech. Dot plot after dot plot. Opinion after opinion. FOMC board members express their views on monetary policy, and in the process, attempt to mold markets to their views.

I have long believed that all this communication counterproductive. It often confuses markets as one moment markets will hear an argument for raising rates at the next meeting, and then hours later, a different FOMC board member will make the case for no rate hikes for a considerable time.

But the real problem is with the Fed’s unwillingness to surprise markets. They are convinced that moves should be telegraphed well in advance. In fact, in modern times, the the Fed has never changed policy without markets pricing in at least a 65% chance for a move.

http://themacrotourist.com/images/2017/09/HikeSep1317.png

This unwillingness to go against markets means that to some extent, the Fed is a slave to market expectations.

Bernanke and the other academics believe this makes for better monetary policy. I know they have all their fancy papers saying why this is the case, but in my gut, I have never felt this wise.

Well, Bank of Canada Governor Poloz is willing to take the other side of this view. Arguing that in normal times, there is no need for such guidance;

“Offering instead full transparency on the risks that the central bank is weighing causes the market to assess new information more or less as the central bank does; and because every data point can give rise to a debate between economists, the market remains two-way and less vulnerable to unusual leveraging and volatile shifts in sentiment,”

Bingo! Knowing monetary policy in advance encourages excessive leveraging. The system needs risk, and Poloz understands this.

Bloomberg reporter Luke Kawa wrote a terrific article that summarized the debate surrounding Poloz recent surprise rate hike. Instead of just repeating his arguments, I am including it in this post:

The Bank of Canada has gone back to the future.

 

For the past decade, traders have been conditioned to expect central banks to both telegraph policy tweaks ahead of time and offer a thorough rationalization of those shifts at the time of implementation.

 

Canada’s central bank provided neither when hiking its benchmark rate to 1 percent on Sept. 6. Monetary policy makers hadn’t spoken publicly since July 12, when they delivered their first increase in almost seven years, nor was the latest decision followed by a press conference.

 

The data – which showed the Canadian economy expanded at a torrid pace of 4.5 percent in the second quarter, with core inflation measures beginning to edge higher – spoke loudly enough.

 

It’s a throwback to the way central bankers used to operate in the 1980s and 1990s, when policy shifts could be made on any business day, without warning. The Bank of Canada didn’t adopt fixed announcement dates until the new millennium.

 

“It’s bringing monetary policy back to what it was 20 years ago – no bells and whistles, just a decision and a statement,” said Christopher Ragan, associate professor of economics at McGill University and former special adviser at the bank.

 

Nicholas Rowe, associate professor of economics at Carleton University, agrees. “If it weren’t for the fact that interest rates are quite a bit lower than they were 15 years ago, everything about this does look quite normal,” said Rowe, who’s also a member of the C.D. Howe Monetary Policy Shadow Council.

 

Even as central bankers across advanced economies tiptoe toward tightening policy, only Governor Stephen Poloz, who joined the Bank of Canada in 1981 before moving to the private sector 14 years later, seems to be willing to let the data speak for itself. By way of contrast, ahead of its Thursday meeting, the European Central Bank chose to pre-announce a decision not to clarify plans for the future path of its quantitative easing program until its following decision in October.

 

“This is a reminder that Stephen Poloz is not Mark Carney, and this is not the financial crisis,” said Brian DePratto, senior economist at Toronto-Dominion Bank, referring to Poloz’s predecessor and now Bank of England governor. “It’s safe to say that the absence of a forward guidance, hand-holding type of approach stands out relative to its peers in other advanced economies.”

 

During the last Canadian tightening cycle in 2010, a combination of communications and data prompted the majority of economists to anticipate each of the three rate hikes delivered that year by the Carney-led central bank. By contrast, only six of 29 economists surveyed by Bloomberg expected Wednesday’s move.

 

Poloz’s preference to avoid steering market participants to predetermined outcomes ahead of meetings has been evident throughout his tenure atop the central bank.

 

“He genuinely prefers central banks to not provide forward guidance and for markets not to expect moves only at Monetary Policy Reports,” said Frances Donald, senior economist at Manulife Asset Management Ltd.

 

In a 2014 discussion paper announcing the end of formal forward guidance by the Bank, Poloz outlined the benefits of moving away from such an approach “in normal times,” echoing a 2010 argument advanced by former Deputy Governor David Longworth.

 

“Offering instead full transparency on the risks that the central bank is weighing causes the market to assess new information more or less as the central bank does; and because every data point can give rise to a debate between economists, the market remains two-way and less vulnerable to unusual leveraging and volatile shifts in sentiment,” he wrote.

 

The jury’s still out on whether the era of enhanced transparency and increased communication on the part of central bankers since the financial crisis has sufficiently improved economic outcomes or reduced uncertainty.

 

“I’m not sure that telegraphing everything to the nth degree is appropriate when the data’s changing all the time,” said James Price, director of capital markets products at Richardson GMP Ltd., who recalls cutting his teeth in the industry during the late 1990s when the Bank of Canada delivered a surprise 100 basis point hike amid the Russian financial crisis.

 

In stark contrast to Canadian monetary officials – who speak with one voice – members of the Federal Reserve Open Market Committee often chart courses that do more to confound than inform market-watchers.

 

“In one day, Bill Dudley and Esther George are telling us they’re happy to raise rates again, then Lael Brainard’s out the next saying no – and you’re telling me that the Fed communication strategy should be a model for everyone else?” said David Rosenberg, chief economist and strategist at Gluskin Sheff + Associates. “Give me a break!”

 

In any case, too much certainty about the future of monetary policy may sow the seeds for financial instability. Tobias Adrian and Hyun Song Shin, in a paper presented at the 2008 Jackson Hole Symposium, made the case forward guidance could prove counterproductive for a central bank that’s looking to smooth the business cycle.

 

“If central bank communication compresses the uncertainty around the path of future short rates, the risk of taking on long-lived assets financed by short-term debt is compressed,” they wrote, warning that this could potentially increase the odds of a “disorderly unwinding” at the end of the cycle.

 

To be sure, Poloz’s team simply doesn’t have as much to talk about as their counterparts in the U.S. or Europe, who made extensive use of asset purchases as well as rate cuts to provide monetary stimulus in the wake of the financial and sovereign debt crises. And in this case, the complete lack of communication between hikes may have been a product of the fact that the central bank was in a blackout period when the blockbuster growth numbers landed.

 

“All central bankers would like to get back to a time when monetary policy was normal,” said Ragan. “And monetary policy is normal when it’s boring.”

The recent Bank of Canada rate hike was nowhere near priced into the market. Have a look at the chart of the Canadian short term interest rate future for December 2017, along with the USDCAD rate.

http://themacrotourist.com/images/2017/09/BAZ7Sep1317.png

In the US, on Fed rate move days, futures barely budge because it is all priced in. The recent Bank of Canada rate rise caught the market completely off-guard. BA futures and the USDCAD rate got absolutely smushed.

Having a Central Banker that is willing to surprise the market completely changes the game. All of a sudden there is some uncertainty. And what is one of the consequences of this unpredictability? A steeper yield curve.

In this day and age of global flattening yield curves, countries might well have a look at Canada’s monetary policy and realize this policy makes more sense than telegraphing each and every move.

Canada - the exact opposite remedy than the rest of the world

So whereas the rest of the world is trying to cut fiscal stimulus (in order to keep budgets balanced) and reducing monetary policy uncertainty through forward guidance, Canada is doing the exact opposite.

This will be one of the great economic experiments of the 21st century. Will it prove a disaster? Will it blow up in our faces? The good news is that there is no need to argue about it. There are plenty of deep liquid markets for you to place your bets.

Although I am short term bearish on Canada’s economic prospects (to me, it was a little too much, too quickly), I am actually a believer that the rest of the world will adopt Canada’s policies. Global government spending is headed higher and monetary policy will be less one-sided. This will result in higher long rates and steeper yield curves. I realize this flies in the face of all deflationistas who are advocating buying long bonds up the yazoo. Yup, sold to them.

So far Canada’s greatest exports have been comedians and hockey players, but this might be one time where we branch out to include economic policies. And for all my US hard money pals who shudder at that idea, don’t worry, it won’t include universal healthcare.

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NoDebt's picture

Keep your stick on the ice.  Or, as my favorite Canadian YouTuber says, keep your dick in a vice.

 

JohnnyFbomb's picture

better put on your safety McGlarsses.

skbull44's picture

Spend, spend, spend. Grow, grow, grow. What could possibly go wrong wth infinite growth on a finite planet?

And, BTW, all that 'infrastructure' spending is just crony capitalism and pork barrelling at work...

mpnut's picture

All fine spending during bad times, just make sure you saved also during the good times and not the other way around.  Home economics is as simple as it gets.. You save for rainy days, but you dont use credit during those rainy days.  I think for Canada, it was a little too late..  Spending for infrastructure cost money, and raising interest rates to help pay for those is asinine..  Bringing in Refugees who are limited in language, and skill does not help, and requires extended funding now.  Meanwhile its citizens who are on the brink and cant put food on the table are left on the outside looking in.  Can Canada bounce back? Sure, but it will take a lot of carefully choreographed moves.

Never One Roach's picture

As long as they keep their borders open to foreign Looters who want to hide their money from home gubmints and their peeples, Canada will be a fine. Billions in Loot will keep pouring in from Nigeria, China, Dubai, Pakisatn, India, etc

Bigly's picture

I miss that nasty, funny old queen on match game....

Brett looked like she booze up before airtime.

Luc X. Ifer's picture

Bullshit*Bullshit*Bullshit for the ears of the 3rd world wanna be Cacanadians This is Cacanada's reality

Census: Children make up one quarter of 4.8M Canadians living in poverty http://www.ctvnews.ca/canada/census-children-make-up-one-quarter-of-4-8m...

1.2 million Canadian children living in poverty: census
http://globalnews.ca/news/3739960/canadian-census-children-poverty/

Fiat Currency's picture

Remember - GDP includes .gov spending. This is about the only trait 2.0 inherited from Trudeau Sr. Keep your hand on your wallet Canadians - more taxes & more spending to come for the next 3 years.

toady's picture

I didn't know you're a Canadian....

NoDebt's picture

I liked CBs better when their decisions just popped out of a black box, unannounced.  Not sure it worked any better or worse than telegraphing their moves (the timeline for reacting was just moved forward to how fast the insiders could get their information ahead of the next decision) but I really just want to hear LESS from CBs.  Dead silence would be perfectly OK.

 

LePereMersenne's picture

How do you say 'Muh GDP' in Arabic, Chinese, Hindi, Somali?

taketheredpill's picture

 

 

Believe it or not TRUDEAU was elected on the same wave that brought us TRUMP and BREXIT, a backlash against Neoliberal economic policies that were gutting the Middle Class.

The previous party had a simple mantra for any/all Canadian ills..."Cut Corporate Taxes!!!", and this was paid for by cutting services (need to do this because of Globalization, level playing field blah blah etc. etc.)

 

 

 

quesnay's picture

I choose not to believe that since it's obvious bullshit. Trudeau was about as much a 'rebellion' as Google hiring a black handicapped lesbian transvestite is about skillz.

Albertarocks's picture

You are absolutely correct.  Despite the goofy comment below mine, the election of Trudeau was indeed a form of revolt.  Canadians were so sick and f**king tired of the arrogant Harper government that he simply needed to be booted out to the mid Atlantic... Harper, the asshole who sold us down the river when in the 2013 budget he sneaked in a law legalizing bail-ins in the event our largest banks happen to do something stupid like exposing themselves to risk.  And some of them are doing just that, although audits still show that they are pretty sound.

It didn't take long for Turdeau to show his true colors and I dare say he's hated as much in the west part of the country already as his father was.  You bet, the election of Trudeau was a form of a revolution.  The problem in Canada though is the same as in the USA... no viable candidates to choose from.  We got rid of Harper and ended up with a juvenile embarrassment in Turdeau.  We throw out the Conservative party in Alberta and end up with an NDP Party that is 4 times as bad.  Nevertheless, the party that we threw out got the message... "shape up or we ship you out".  They didn't shape up, so we shipped them out.  The new gov't in Alberta has f**ked up so bad that they're getting shipped out next election too... 100% guaranteed.

I suspect you got those downvotes from people who don't know where Canada is.

pitz's picture

Harper lied about having a balanced budget or surplus in his last year in office.  And he ran deficits averaging approximately $30B in each year in office, in inflation-adjusted dollars.  Yet had the audacity to criticize Trudeau for acknowledging that he would do the same. 

oddjob's picture

Harper and Baird constantly sucking up to israel was a fucking disgusting spectacle to watch.

abgary1's picture

Why is an overpaid incompetent socialist federal civil servant like yourself posting on this site?

taketheredpill's picture

"You cannot save your way out of a balance sheet recession. There are only two ways out. You either have a vicious 1929 style depression, or you inflate your way out"

 

I "member when" Japan had it's collapse and all the western economists said they needed to "let the banks fail".  It wasn't politically feasible then and it wasn't in 2008.

 

So eventually it will be inflation when ALL the CBs go ALL-IN.


mmanvil74's picture

Print money, lend it to government, gov hires workers to dig a hole (or build a road, or a bridge, or a war plane, or a ??), pay to refill the hole (tear down old bridge, etc), repeat. Economy "fixed".

Illusionary economics can work for a long time, until they don't.

grasha87's picture

I have created a free market currency that helps alleviate unemployment and recessions that the Fed creates, and it's based on Say's law: https://bunky1787.wordpress.com/2017/09/06/the-wallark-neo-scrip/

Jacobra's picture

I'm not sure why they are saying this wasn't telegraphed in advance of teh rate hike. Everyone was expecting it, even the completely lay-to-finance folks I know knew it was going up. Worst kept secret I  guess.

quesnay's picture

Everyone's a genius on the way up. Canada is in the real-estate positive-feedback-loop bubble. 12% of the GDP is tied to housing (I don't remember the exact number, but it's WAY above average is the point). So right now a monkey could lead Canada and look smart (and one is). When the bubble ends, and it will eventually, the reversal will be epic in magnitude.

Bay of Pigs's picture

The RE bubble has already popped.

Most Canadians just don't know it yet.

grasha87's picture

I have created a free market currency that helps alleviate unemployment and recessions that the Fed creates, and it's based on Say's law: https://bunky1787.wordpress.com/2017/09/06/the-wallark-neo-scrip/

Soph's picture

It is an either/or scenario. On the one hand you have the "spend your way out" model which China employed, and Canada has recently adopted. Will it work? Perhaps. It's Keynesian to the core, so its success depends entirely on governments responsibly paying down that debt binge when the time comes. If they don't, then no, this absolutely will not work.

The other, traditional neo-conservative option of letting the system clean itself does work, and has been shown to work historically. The problem is, you have to go a long way back (1922 and prior) to find an example where politicians actually had the balls to let the system clean itself. If the system isn't allowed to clean itself, and is instead bailed out like we have seen over and over again in recent decades past, you're left with an indefinite muddle for growth.

That's the rub. For either model pain must come eventually. My money is on neither working because we are dependant upon people understanding that the piper has to be paid, and then forcing their political leaders to enact policies that take the pain. Not a snowflakes' chance in hell that will happen.

Verniercaliper's picture

Soph

the system can't clean itself because it has morphed into a crony-capitalist, regulatory capture model.....as QE has shown, that debt need never be repaid, nor should we try.

abgary1's picture

A rise in the GDP because of a gutted dollar and government spending doesn't seem that impressive to me.

A rise in interest rates should end that.

At some point in time the government and the people will no longer be able to borrow.

The socialist nature of the federal government will eventually bring the economy to it's knees.

Canada is still a Socialist Republic.

cherry picker's picture

In debt to your eyeballs in credit cards and good paying jobs are scarce.

What do you do?

Take out a huge loan, double the size of your home and buy new furniture aka infastructure.

Life is great, then interest goes up and you have to cut your grocery money to make ends meet.

That is what Canada is doing.

Herdee's picture

The federal government in Canada is bust and running the same scams as the government in the United States. What better way is there to pay the bills than to start new industries that were outlawed by greaseballs and white supremasists and corrupted Washington politicians in America?

http://www.cannabisculture.com/

The power to grow:

https://www.spectrumkingled.com/

Free Grow lessons:

http://www.growpotcheaply.com/

Fuck Jeff Sessions

LewisDodgson's picture

Trudope borrows tens of trillions of dollars from the future and spends it into the economy.
GDP goes up.
How is this shocking?

SweetDoug's picture

'

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Hopefully, the last gasp of the Keynesians.

 

Canadians were never too bright economically, and have basically rode the economic waves from the US as they crashed on her shores.

 

OJO

V-V

Bull Bear Otter's picture

See, if you'd stick to your 12-point maintinence program, eh, then we wouldn't have to jump-start you like this. Oh, no, you had to do it your way... you think you know everything, eh.  -Bob McKenzie, Strange Brew

pitz's picture

Poloz is seemingly on a path to create deflation in Canada that the Bank of Canada won't be able to control. 

VZ58's picture

What a retard this author is. Another Keynsian apologist of the elites. This is not novel - it's what Canada has done for decades: waste taxpayer monies going on full retard Keynsian government spending sprees that only benefit the special interests of their buddies. Can you say huge cost overrruns imminent and tons of wealth generated for a select few who pull the politicians' strings, like always? Can you say huge tax hikes for the average guy and small businesses? Can you say massive government waste and voter dependency? Can you say bankrupting their children's future with their socialist spendthrift ways? Meanwhile, they punish the productive class and destroy the energy industries that generated the last boom based on fake climate science. The only way the average guy gets rich in Canada now is by selling their 1980s piece of shit house to some Chinese laundering money in Vancouver or Toronto.  Don't kid yourself people, these jerks can't hide from the fact that Canadians don't produce anything competitively anymore. The whole country is swimming in credit debt. Who is going to pay for all this when they can't even afford their groceries? The whole country is becoming soley dependent on the government. That is the plan and the future for anyone who follows this "novel" economic model.

Dickguzinya's picture

After building the wall on the mexishit border, build a fence on the canadian border.  They've been complicit in allowing illegals, of all varieties, including muslimes, into the US.  Rip up that US economy choking piece of shit NAFTA deal.  Sovereignty over new world order bullshit.

gerryscat's picture

"a tax cut for the rich... will pay dividends many decades in the future"

If you think enabling the rich to buy another sports car for their 12 car garage is going to "pay dividends in the future" then you truly are retarded.

snowlywhite's picture

"And unlike the short term stimulus from a war, or a tax cut for the rich..." - that's the definition of taking out of context, eh?

Stormtrooper's picture

Go for it Canucks.  Janet will loan you a few printing presses so that you can catch up to the rest of us on the race to the bottom.

harblthecat's picture

Canada is a basketcase and Ottawa is playing a very dangerous game with the debt it's amassing for "economic stimulus."

The improved Canadian economy is NOT universally felt.  My province, Alberta, is still in the toilet, as we are so dependent upon oil prices.  That said, the size of the last oil boom was so big, even after being in the worst recession in our history as a Canadian province, we are still paying into the federal equalization program that keeps Quebec separatism under wraps.

In Canada, secession is 100% legal.  The Quebecois made it legal during the 1994 referendum.

To keep Quebec from leaving, Ottawa and Ontario struck up an open ended deal where Ontario would pay Quebec to be Canadian, and Quebec separatism has died off ever since.

Ontario, however, has become a decrepit, feminst, old folks home and can't keep the payments up and so the tab has been passed on to Alberta.

Now Alberta is paying Quebec to be Canadian, and Albertans don't even like Quebec all that much.

The interest payments on the Trudeau debt will be a dead weight around Ottawa's neck that Alberta will be on the hook to pay one way or another, but if we separated and either convinced the Western provinces to separate with us or joined the US - we would become a regional economic power house.

If we joined the US, our population would double within a decade and we'd have about as much political influence as Virginia, New Jersey, or North Carolina.  Not only so, but Albertans have, unknowingly, campaigned politically for an American Electoral College style system for decades (that being an Equal, Effective, and Elected Senate) - it has actually been the core reform Albertans have pressed for Federally, and never been able to achieve.

Most of the grievnces Alberta has revolve around the fact that the Canadian Federal Government is not like the American Federal Government, and those grievnces may well result in Alberta separating from Canada at somepoint in the near future.

Direct Democracy's picture

I don't see any benefit to joining the USSA. Just separate and call your own shots.

SuperChicken1138's picture

Bob and Doug Mckenzie shall always be welcome in the States my friend from up North.   https://www.youtube.com/watch?v=ssCZWBtwUTI

logicalman's picture

The American Federal Government is a wonderful example of how not to do almost anything.

Luciferrigno's picture

Canada never makes the news. Ever. It's so drab and droll around these parts that we Canucks are left with no alternative but to glance admiringly southward, mouths agape, and minds absolutely blown asunder by yet another incoherent and internally inconsistent and blathering diatribe by the Golden Boy. He gets all of the headlines. The closest that we have ever had to such grandiosity and grandiloquence was Rob Ford. But that gongshow was shortlived. And so we pine. And look longingly to the south.

venturen's picture

if I had a billion...the last place I would go is Canada....

GunnyG's picture

"There's not much you can say about those Windy City hosers but at least they're not from Canada." Bob Uecker.

grasha87's picture

I have created a free market currency that helps alleviate unemployment and recessions that the Fed creates, and it's based on Say's law: https://bunky1787.wordpress.com/2017/09/06/the-wallark-neo-scrip/

Radical Marijuana's picture

Canada was never not under the control of the Bank of England, i.e., the Rothschilds. Moreover, since 1974 (see videos linked below for details), Canada agreed to the "Washington Consensus" to stop properly using the Bank of Canada, instead of doing whatever the international bankers, primarily through the Bank of International Settlements, told Canada to do. Canada was always a component of Globalized Neolithic Civilization, and always integrated into the overall systems of the Anglo-American (Zionist) Empire.

The most important background fact regarding Canada is that still has a relatively large reserve of natural resources available to continue to be strip-mined, compared to its population. Therefore, Canada can sustain making more "money" out of nothing as debts in order to "pay" for strip-mining those resources, as the foundation of the Canadian economy. Hence, Canada, from every possible perspective, is relatively well-off, and relatively likely to remain so, compared to most other places in the world. However, Canada still necessarily participates in the "economic experiment" of Globalized Neolithic Civilization, albeit in a "Canadian Way."

Canadian Identity is primarily based upon the territory on the geography of planet Earth that is perceived by human beings as "Canada." However, that geographical territory existed long before the country called "Canada," and would probably exist long after there is no such country anymore. The secondary meaning of the Canadian Identity are the psychological and political characteristics of the people who are living in the physical territory they call "Canada." That secondary meaning of the Canadian Identity was the result of thousands of years of the history of Neolithic Civilization, which spread out its psychological and political characteristics from where it mostly originated in the Middle Eastern areas, such as Egypt and Mesopotamia, through the history of Europe, and then sailed to North America, to create colonies.

The original Canadian Identity of the first immigrants, who had lived in North America for tens of thousands of years before the European invasions, was mostly wiped out, and the survivors of that assimilated into the Neolithic Civilization systems that were brought by the French and British, etc. ... There is barely any reality remaining to any original Canadian Identity of the survivors of those genocides and assimilations, due to the degree the survivors were almost totally forced to assimilate into the dominate psychological and political systems that the European invasions which established colonies made and maintained. (Similarly, the original Viking colonies in Canada were totally wiped out, and so, those no longer exist.)

For a while, the new Canadian Identities of the French and British colonies were relatively coherent cultures, regarding which one could say that those were different Canadian Identities. However, those have subsequently been deluged by invasions of immigrants from all over the world, such that there is barely any significant meaning remaining to refer to as "the" Canadian Identity. About the only thing that "Canadians" still universally share is the Canadian monetary system. However, that system is almost totally integrated into a globalized system, such that referring to "Canadian money" is mostly another misleading symbol, asserted within the context of superficial analyses.

The background to the developments of Canadian civilization were the ways that natural selection was internalized as human intelligence, and then that intelligence was applied to the most important selection pressures, which were other groups of people. That resulted in the history of warfare, which was organized crime on larger and larger scales, based upon backing up deceits with destructions. The surviving War Kings made the sovereign states, and those were the source of the original French and British colonies in North America. Those colonies were miniature versions of the social pyramid systems that originally developed in the Middle Eastern and European areas.

Human beings and civilization operate as entropic pumps of environmental energy flows, which necessarily match the principles and methods of organized crime, because the death controls in general, and the murder systems in particular, are the central controls of everything else. However, the nature of those controls drive intense paradoxes, which manifest as sets of consistent contradictions, because the most socially successful murder systems are the most deceitful and treacherous, while around that success there accrete layers of controlled opposition groups, such as the publicly significant religions and ideologies, which agree to stay within the same frame of reference of false fundamental dichotomies and the related impossible ideals, originally developed to enable professional hypocrites to operate their systems of organized lies and robberies, in ways whereby the biggest and best organized gangs of criminals were able to deny that they are actually doing that.

The long history of being able to back up lies with violence, becoming more sophisticated and integrated systems of legalized lies, backed by legalized violence, was the primary theme of the development of the Canadian Identity as psychological and political manifestations. The most important of those have become the ways that the public government of Canada enforces the frauds by private banks, which are ways that Canadian money participates in a globalized privatization of the public monetary and taxation systems. As information became more important than power, the sovereign states set up by the surviving War Kings were more and more controlled by the Fraud Kings, who were the international bankers, the best organized gangsters, the banksters, that control the biggest forms of organized crime, which are governments. Civilization developed as systems of more or less organized lies operating robberies, and those have become the symbolic robberies achieved through public governments enforcing frauds by private banks. Therefore, the primary psychological and political manifestations of the Canadian Identity are the public presentations of the best available professional liars and immaculate hypocrites, who have adapted to live inside of systems based upon enforcing frauds.

From the psychological and political perspectives, there is almost nothing else but the central core of organized crime, the bankster dominated governments, surrounded by layers of controlled opposition groups, all of which stay within taking almost completely for granted the dualities of false fundamental dichotomies, and the related impossible ideals. Since Neolithic Civilization was based upon enforcing frauds, so too is the Canadian Identity the result of the European invasions of the geographical area called "Canada." Subsequently, the invasive immigrations from all over the world have mixed up the Canadian Identity to the point where there is no longer any coherent Canadian Identity. About the only thing that everyone continues to share is the Canadian money. However, that Canadian money is a system wherein money is measurement backed by murder (i.e., the debt controls depend upon the death controls), which combined money/murder system is operated by professional hypocrites, which do not admit and address the ways that public money supplies are created out of nothing as debts, while those frauds are enforced by the powers of the government, while that is integrated into globalized systems based upon overall similar ways that frauds are enforced.

The original Canadian Identity was mostly colonialism, (now degenerating into neofeudalism.) The overall trends of globalized privatization have been making more and more of a mockery out of any residual Canadian Identity. Since Canada has a relative abundance of natural resources available to be strip-mined, compared to the size of the Canadian population, Canada is one of the few countries in the world left where Neolithic Civilization continues to appear to make sense, at least in the short to medium terms. However, the bigger picture is that Neolithic Civilization has become runaway criminal insanities, based upon the excessive successfulness of controlling that civilization through integrated systems of legalized lies, backed by legalized violence. That excessive successfulness of controlling civilization through applications of the principles and methods of organized crime is more and more resulting in a criminally insane civilization.

Since Neolithic Civilization was always based upon enforcing frauds, so too is the Canadian Identity. It is difficult to disentangle the ways that being able to successfully enforce frauds drives psychological and political systems to have inverted and perverted relationships to the laws of nature. While the physical territory of Canada exists according the the laws of nature, the psychological and political manifestations of the laws of nature through human beings and civilization results in those becoming triumphant organized crime, which is most triumphant by becoming the most dishonest it can possibly be. The only connections between the laws of nature and the laws of men are the abilities to back up lies with violence, through the development of integrated systems of legalized lies, backed by legalized violence, whereby governments became the biggest forms of organized crime, controlled by the best organized gangs of criminals. Those systems are based upon being able to enforce frauds, in ways that drive the vast majority of people, who have adapted to live inside those systems, for generation after generation, to develop attitudes based upon the maximum possible willful blindness towards the principle of the conservation of energy, along with the maximum possible absurdly backward misunderstanding of the concept of entropy.

Since Neolithic Civilization, and then Canadian civilization, were based upon being able to back up lies with violence, the degree to which the Canadian Identity is promoted by professional hypocrites can barely be exaggerated: the central characteristic of Canadian Identity is professional hypocrisy.

 

P.S.

http://www.comer.org/

http://www.comer.org/content/SupremeCourtDecision_4May17.htm

Supreme Court of Canada Dismisses Constitutional Bank of Canada Case, Claiming It Is a Political Matter

May 31, 2017 – After nearly 5.5 years of contentious litigation between the Committee On Monetary and Economic Reform (COMER) and the Government of Canada involving three separate Federal Court and two additional Federal Court of Appeal hearings resulting in contrary decisions, on May 4, 2017, the Supreme Court of Canada dismissed COMER’s “leave” (permission to appeal) application from the second judgment of the Federal Court of Appeal.

OF COURSE, THE CANADIAN MASS MEDIA
CONTINUED TO DELIBERATELY IGNORE IT.

Links to some of previous history of the case:

Committee for Monetary and Economic Reform (’COMER’), et al. v. Her Majesty the Queen, et al.

http://www.youtube.com/watch?v=XSHMgb327aU

Le Peuple vs la Banque du Canada - The People vs. The Bank of Canada

http://www.youtube.com/watch?v=TN2USVC6QYQ

The Case Against The Bank Of Canada

http://www.globalresearch.ca/the-case-to-reinstate-the-bank-of-canada/5430132

The Case to “Reinstate” the Bank of Canada

http://www.youtube.com/watch?v=4ZuIKXXtQN0

Rocco Galati and the lawsuit against the Bank of Canada

 

http://www.youtube.com/watch?v=dbrKTe6lvJw

Mel Hurtig: The Truth About Canada

 

 

http://www.ohcanadamovie.com

OH CANADA, OUR BOUGHT AND SOLD OUT LAND


http://www.youtube.com/watch?v=q7HMt5MgsDg

THE CRIME OF THE CANADIAN BANKING SYSTEM - Bill Abram

http://www.youtube.com/watch?&v=mUjBLLzYPGg#!

Perpetual Debt: Bank of Canada & why we should use it

http://www.washingtonsblog.com/2012/05/even-a-12-year-old-knows-the-truth-about-public-banking.html

Even a 12-Year Old Knows the Truth About Public Banking

http://www.youtube.com/watch?v=wEOU0Kc3T1Q#t=156

VICTORY FOR THE WORLD v2 

 

P.P.S.

Regarding the facetious remarks about pot:

Canadian "legalization" story, 2015 ... ???