printBill O’Reilly will not like this, but the Canadian economy, tied as it is at the hip to ours, is doing just fine. Their loony is not on life-support like our dollar. No banks have gone under there—not yet.
This may mystify American teletwits (and their viewers). That’s because they try to present the recession as a function of market failure unmoored from the political class’s pillaging. It’s the housing market, the morons exclaim. Or Barack Obama’s white grandma.
Canada’s banks, I believe, are less promiscuous about increasing the money supply. Because its central bank is not as lenient about allowing the commercial banks to pyramid checkbook money on top of their own reserves, it’s my understanding they’ll be doing much less feel-good lending than our whorish paper peddlers.
Correct me if I’m wrong about that. I’m not, however, wrong about the Canadian economy, which is, so far, humming along.
In my younger days, I went to a nude beach in Vancouver, B.C. and as I sat in the sand enjoying the er, scenery several people walked by selling stuff. Did I want a moosehead? Sure. For a twonie, a lovely Kanuck gave me a cold can of beer from her insulated fanny pack. Someone else was sellling joints. No, thanks. It occured to me that,on some levels, Canada had a more free market than the U.S.
The Canadian economy is at present in better shape than the U.S. economy. But feel-good pronouncements from a central banker are nothing to bet on, either. Usually, it’s an attempt to reassure investors, and that means a cover-up.
The article referred to did in fact mention that this central economic planner just lowered rates, and that means inflation. It didn’t mention how much risky mortgage paper their banks have on the books. It did mention sub-prime, ignoring the fact that sub-prime mortgages were only the tip of the iceberg in defaults, the canary in the mine, as it were.
The Canadian dollar hasn’t been defiled as quickly as ours, only about half as quickly. As ours falls faster, they face the specter of losing export sales, and exports to the U.S. are a huge part of their economy. So the central bankers have a choice — follow us with inflation, or follow us into recession. Or more likely, both.
Canada has inflated her currency, and will experience the pain of the collapse of her own housing bubble. Perhaps they will be wise and just let the recession unwind the bad investments, or perhaps they will follow Bernanke in trying to paper it over, a plan with dangerous risks.
If I were a Canadian, I would be just as nervous as I am here in the U.S. right now. If the U.S. dollar tanks, or the U.S. enters a depression, or U.S. banks start collapsing like dominoes (and Bear Stearns was the first one), then Canada is in for a very bad time. Recovery will be just as difficult in her socialist economy as in ours.
I have lately found myself absolutely ENRAGED when watching the mainstream cable news broadcasts, and every single economist they bring in there is just a complete shmuck. They all ignore the freaking elephant in the room: inflationism and the Federal Reserve!
It’s been years since I’ve paid much attention to Canadian economics but if memory serves they always follow us by a bit. Commodity wise they are in great shape, unlike the US, and this means they get a pass from price rises for a longer period of time. Eventually investment money becomes harder to get and that’s when things start to head south.
Canada’s economy will surely suffer from any US recession. Still, recovery will be faster, simply because of more fiscally responsible policies, a vast storehouse of natural resources, and the absence of a US-style housing bubble. America will simply wake up from this party with a salutary hangover. When everybody gets rich (or think they’re getting rich), it can only mean money is worth nothing !