Central Bank Asset Growth

[jazz]

So why are posters only concerned about Trudeau's debt increase and deficit financing for stimulus and not Trump's? Why the double standard because they both could put us in peril down the road?

Some news for you chuck, our trade based economies are interconnected, our currencies, bond markets and debt are not.

They will be insulated due to reserve currency status. A 1% rise in their GDP will not offset the stupidity exhibited by our current govt.

A conservatives govt would be down there strengthen our links to that economy and getting people out of their basement and back to work. 6 more months of lockdown and CERB will finish small businesses in this country.

And no money for solar panels.

[chuckChuck]

Some news for you chuck, our trade based economies are interconnected, our currencies, bond markets and debt are not.

They will be insulated due to reserve currency status. A 1% rise in their GDP will not offset the stupidity exhibited by our current govt.

A conservatives govt would be down there strengthen our links to that economy and getting people out of their basement and back to work. 6 more months of lockdown and CERB will finish small businesses in this country.

And no money for solar panels.

So what happens to the US Currency, bond market and debt has no impact in Canada? I think most people would disagree.

Some sectors of the Canadian economy are back some are not. An unmitigated Covid out break will also shut dow the economy and result in a lot of pain and deaths. I don’t know any government in Canada that says we should do nothing and let it run it’s course. Ontario and Quebec are struggling to contain the damage.

[furrowtickler]

What would a Conservative government done differently?

Not relevant really , they not in power .
Like asking what would have the NDP do different .... does not really matter .

Will also leave this discussion here to those brining value to it .
You and I don’t need to ruin this thread .
Some very astute posts here to read

[ajl]

Hyper inflation is not a given either. Look at Japan. It is the king of printing its currency in the hopes of igniting inflation, and yet is has not materialized. One reason given is that Japan's elderly population saves more money every time the government is on a printing binge because they fear inflation and figure they need extra resources to combat it slowing down velocity and muting any inflation. Another factor is that snowballing debt loads creates a demand for currency in order to repay debt. Every loan will have to be renegotiated in the entire world and the new loan is larger than the old as there is no demand for production and everybody is going to have to refinance.

[Austrian Economics]

Agree it's not a huge deal but how do you store wealth in a negative rate environment? You sure don't want "dollars" that the bank strips a percentage of, monthly.

You can store wealth with negative interest, but as a creditor your store of wealth leaks a bit every month. An alternative like gold gets rid of counterparty risk, but right now gold does not circulate in the credit system. Everyone wants to buy gold, but almost no one is willing to trade it for another good or commodity. That has to change to get us out of this mess.

Regarding a couple of others points, default is always painful.

If you think farmland prices are high now, just wait. Once we get to negative rates, those values will go near-vertical. Equity and real estate prices function as the inverse of interest rates.

[macdon02]

The thing about gold for me is the Roosevelt factor where owning physical was banned. If the wheels absolutely fall off society as we know it, food, as a store of wealth takes a bigger priority. I suspect bitcoin will be banned as well in this hunt for an equitable restart. Who knows where we are headed but 1 thing is forsure, the academics intentions will not occur. This is gonna get wild. First to crash = first to recover that's the refuge we need to watch for.

[macdon02]

So what happens to the US Currency, bond market and debt has no impact in Canada? I think most people would disagree.

Some sectors of the Canadian economy are back some are not. An unmitigated Covid out break will also shut dow the economy and result in a lot of pain and deaths. I don’t know any government in Canada that says we should do nothing and let it run it’s course. Ontario and Quebec are struggling to contain the damage.

The US currency will rip every govts face off around the world. They've issued their debt in USD. They are focused on keeping rates low, domestically, they can't control the USD. Until we see a G5 event which will be a reaction to higher USD ala 1985 they will not react. Lower USD makes paying debt easier for the world to repay but no govt has intentions of austerity. NOBODY has paid off principal since 2008. The real bubble is govt debt. And those ads by Govt of Canada on the radio about redeeming mature bonds needs to be taken. CB's do not wish harm on anyone, they have our best intentions at heart but are being forced into corners by politicians as the Guardians of the Galaxy. Listen to their guidance on rates, they always forewarn. Not all is evil. They do exactly as they say.

[jazz]

Hyper inflation is not a given either. Look at Japan.

Japan isnt a great example. Their main assets were/are an industrious work force backed by technology. Inflation has no effect on those. In fact they are deflationary.

Canada is a different animal, we are all hard assets with a lazy work force. Inflation will take root here and its effect will be felt. Some who own assets will make out ok. Most dont though and they will be flattened by the cost of living.

[Austrian Economics]

It's important to distinguish between retail / commodity price inflation and asset in inflation. A falling interest rate environment leads to retail / commodity price deflation and asset (equities and real estate) inflation.

Prices of commodities and retail goods can also go up due to non-monetary factors, such as supply shocks, taxes and regulatory compliance costs. A measure like the consumer price index doesn't distinguish between monetary and non-monetary influences on prices.

I'm not suggesting that we won't see some upswings in ag commodities in the near future, but the overall price trend is down.

[Austrian Economics]

If our economy does experience hyperinflation in commodity prices, that will be a clear sign that industrial infrastructure is collapsing beyond repair. This problem won't be solved by adjustments to the quantity of money. There will be no "angle" that someone can play to escape the consequences. It's much more fundamental than that. Basically, the economy has consumed its capital resulting in scant production of fewer and fewer goods and a return to a barter system. Whatever goods that can be produced will naturally command exorbitant prices.