Liberals to spend $100B after posting record $381B deficit

[Austrian Economics]

We didn't borrow it from anybody.
The govmint printed the bonds and sold them to the Bank of Canada. They print the money to buy them.
Don't ask me how that works.
Maybe one of our fine agriville finance advisors can explain it?

That's basically how it works. The Bank of Canada purchases the bond and credits the Finance Department with the proceeds. Then they can start writing cheques. The central banks's asset is the Finance Department's liability.

I saw on BNN a couple of days ago that the B of C is now buying around 50% of all bonds. The commentators expect that this bond buying will now taper off, but that's laughable. The last thing our fiat currency needs is a boost in interest rates. The whole purpose of the bond exercise is to buy enough bonds to keep the rate of interest at an absurdly low level. If you taper it, interest rates rise and the overloaded debt machine will throw a piston.

This exercise in financial incest works as long as the mushrooming debt can still be serviced. That requires ever declining interest rates, eventually ones in negative territory. That creates many problems, however, such as populating the economy with money-losing, unproductive zombie companies. Pension funds that either rely on fixed income or are forced into purchasing it become unsustainable. I'm sure Freeland believes that the government can just borrow trillions more and plug all the financial holes as they pop up.

I think the end game is when the holes pop up faster than even a central bank can respond. If you're going to make it known that every bad investment decision will be bailed out, you will create an avalanche of people and institutions demanding bailouts. At that point, the central bank becomes insolvent and the currency implodes. Look to peripheral economies like Turkey, Venezuela and Zimbabwe for an idea of what happens at that point.

[fjlip]

Reminds me ROB Peter to pay Paul or cut one end off the rug and sew onto the other to make it longer.

As I wondered, did any of this devils take MATH? Afraid for future generations.

Hopefully the authors of our collective demise can get a just reward...use your imagination of what I am thinking.

[katoe]

So how much of this deficit is caused by farmers taking the 40,000 loan that only needs 30,000 paid back? Or the Money that goes into agri invest accts. Yes im guilty of getting agri invest.

[jazz]

AE has only half the equation correct. Eventually the BoC will want that debt off its balance sheet when this is over. Then they have to sell those bonds to investors. 8 Million people in the country were too broke to make it 3 months without income so dont count on our countrymen snapping it up.

That would mean foreign investors, hedge funds and institutions. Would you buy Canadas debt? With an economic retard like Trudeau running it? Because I sure the hell wouldnt, not at these interest rates. I would need a premium to hold that risk and so will outside investors. That why interest rates will not hold.

[bucket]

So how much of this deficit is caused by farmers taking the 40,000 loan that only needs 30,000 paid back? Or the Money that goes into agri invest accts. Yes im guilty of getting agri invest.

An irrigation farmer around Riverhurst , Outlook, or lucky Lake with 1000 acres of irrigation land is getting 40000 of direct payments every year for another 4 years...

food for thought....guaranteed crop.. 40 bucks an acre direct ...and agristability for dumping potatoes to the feedlots...

Thats where some of the deficit is coming from

[helmsdale]

[burnt]

Mallee should be the least unhappy on the list.

And the U.S., which has not disabled its massive natural resource economic engine, has somehow "only" worsened its position by half as much as our Sock Puppet and Bobblehead have done.

[Guest]

Wonder how True dope cheerleaders can justify this ?
I guess the other countries like the US never had COVID as bad ?
But wait now , CBC said ......,

[AlbertaFarmer5]

So how much of this deficit is caused by farmers taking the 40,000 loan that only needs 30,000 paid back? Or the Money that goes into agri invest accts. Yes im guilty of getting agri invest.

Assuming the entire amount of this and other bridge financing programs is fully included in the deficit, and that most will eventually be paid back, will improve the numbers slightly, someday.

[burnt]

5 years ago, Harper called it - "He has no idea what he is talking about".

Only it's exponentially worse than PMSH predicted.