MB Premier Response to Skippys Idiocy

[jazz]

Think about the mentality of people. They hate taxes and bills but love making payments. People will make payments on anything, couches, tvs, put clothes and food on credit cards.

Just use interest rate arbitrage as a defacto tax, blend it all in with amortization and people barely notice.

Just like they did for hydro bills in Ontario.

Bank lends at 0.5% to the govt and buys treasurys at the same time, drives down bond yeilds, free money lent out for the govt. Party on for a yr. Then govt stops buying bonds, starts selling them to outside lenders, rates rise and now call for repayment from the plebs. Make 3% return on 400B over 25 yrs.

Throw in a punishing carbon tax and theres your govt revenue for the next generation.

[Austrian Economics]

Think about the mentality of people. They hate taxes and bills but love making payments. People will make payments on anything, couches, tvs, put clothes and food on credit cards.

Just use interest rate arbitrage as a defacto tax, blend it all in with amortization and people barely notice.

Just like they did for hydro bills in Ontario.

Bank lends at 0.5% to the govt and buys treasurys at the same time, drives down bond yeilds, free money lent out for the govt. Party on for a yr. Then govt stops buying bonds, starts selling them to outside lenders, rates rise and now call for repayment from the plebs. Make 3% return on 400B over 25 yrs.

Throw in a punishing carbon tax and theres your govt revenue for the next generation.

Make interest rates low enough, and people will learn to love being indebted. It's treadmill that they won't want to get off. Kind of like heroin. They will be mesmerized by the rise in the value of their house and the ballooning of their equity accounts. It doesn't occur to most that interest rates this low are a sign of a sick, debilitated economy, not a healthy one.

I doubt that central banks will ever try to reverse their bond buying spree. The Fed tried it up until last year and quickly reversed course when the financial system threatened to implode. I suspect that any government that tried to maintain that course would be turfed out at the polls. If they pointed out the dangers of impending bankruptcy, most voters would not care to believe them.

Just look at the response to Covid. The vast majority of the population now firmly believes that the federal government is Santa Claus and that there are no existential limits as to what they can borrow in order to hand out seed corn to be destroyed. Zero percent interest rates are the key to facilitating all this borrowing.

[furrowtickler]

Lots of people have no intention or ability to repay Covid cash.

Exactly what is going to happen

[sumdumguy]

Pierre Poliver is right on the money, so why is he not the leader of the Consevatives? Prolly the old Harper guard would frown on his intellect.

[jazz]

Ratings agencies are screaming at the govt to halt the insanity or wind up with a destroyed dollar. We dont have a euro here.

https://www.fitchratings.com/research/sovereigns/canadas-spending-pledges-to-push-federal-deficit-higher-still-25-09-2020 Canada’s Spending Pledges to Push Federal Deficit Higher Still

[jazz]

Todays spending announcements;

$440M for vaccines for people in countries outside Canada
$320M for NL oil and gas industry
$50M for film makers.

[macdon02]

Ratings agencies are screaming at the govt to halt the insanity or wind up with a destroyed dollar. We dont have a euro here.

https://www.fitchratings.com/research/sovereigns/canadas-spending-pledges-to-push-federal-deficit-higher-still-25-09-2020 Canada’s Spending Pledges to Push Federal Deficit Higher Still

The number is another $180 billion of govt spending, bare minimum. If this is going where it's pointing in certain corners of the world, and you have 1 shred of morality, you'll get absolutely financially ruined. "If it feels good, do it" is going to be the means of survival until this blows. Macro indicators showing we could be in for 3-4 years of current status.

[Misterjade9]

Make interest rates low enough, and people will learn to love being indebted. It's treadmill that they won't want to get off. Kind of like heroin. They will be mesmerized by the rise in the value of their house and the ballooning of their equity accounts. It doesn't occur to most that interest rates this low are a sign of a sick, debilitated economy, not a healthy one.

I doubt that central banks will ever try to reverse their bond buying spree. The Fed tried it up until last year and quickly reversed course when the financial system threatened to implode. I suspect that any government that tried to maintain that course would be turfed out at the polls. If they pointed out the dangers of impending bankruptcy, most voters would not care to believe them.

Just look at the response to Covid. The vast majority of the population now firmly believes that the federal government is Santa Claus and that there are no existential limits as to what they can borrow in order to hand out seed corn to be destroyed. Zero percent interest rates are the key to facilitating all this borrowing.

"Party on Wayne" "Party on Garth"