Not your average recession . . . .

[sumdumguy]

My accountant informed me that Trudeau government has decided to tax the heck outta corps. Newly implemented 45% tax on passive income even if the income is spent on expenses. In other words, if the bank pays your corp $50,000 of interest income, that amount will be taxed in the corp at 45% rate unless you pass it off to shareholders as dividends. In the past you could use passive income on farm expenses, wages, inputs. ($50,000 income - $50,000 expense would equal Zero tax, not anymore the tax will be $22,500.) thanks Freeland, you putz.

[errolanderson]

The stock market has done nothing but scream higher since the Moody’s credit downgrade last Friday. U.S. data shows inflation drifting into the rear-view mirror today. No more U.S. Fed rate hikes including Bank of Canada.

Watch for possible panicked central bank rate declines in 2024. Mortgage rates stateside now breaking. Debt crash will be a doozy and inflation worries quickly forgotten as the real crisis implodes (IMO).

Gong-show continues . . . .

[sumdumguy]

Monetary policy (tax induced deflation) has as big an effect on the multiplier and GDP as interest rates. You see media questioning the difference between US and Canada and why Canada is sinking into depression while US with very similar economies is trudging along nicely despite ‘high’ interest rates. No one would dare mention the fact that Trudeau is taxing us to death - double-edge sword carbon taxes applied and reapplied (GST added) put a damper on economy while at same time the carbon taxes’ induce inflationary prices. Taxes kill the Canadian economy but the dictators are happy.

[errolanderson]

Just in, apparently . . . .

After today’s ho-hum U.S. inflation reading, some analysts now suggest possible four (4) Fed rate cuts in 2024.Panic about to set in and central bank policy at-its-worst. Bank of Canada may be the 1st to cut rates. Good grief . . . Just no plan, no foresight.

Good news, global urea export prices appear dropping steadily.

[furrowtickler]

Phos just jumped 10% locally

[biglentil]

CIBC terms and conditions state they can freeze your account if "We choose to".

[TOM4CWB]

Security errors…???

[TOM4CWB]

From the Frontier Center:

[errolanderson]

OPEC TROUBLE: After modest bounce, energies appear resuming downtrend. An opinion; WTI oil has 1st support @ $75, 2nd support @ $73.50, then $70 per barrel. Major support now seen approaching $63.50 per barrel. Gasoline and diesel futures off 8 and 9% respectively over past month.

Geo-political factors can derail oil downtrend temporarily (IMO).

[errolanderson]

CONSUMER SPENDING ALERT: Consumer debt crisis now imploding. This is no test. And retail and banker panic about to set in. Interest rates will drop, just a matter of when. Central bank policy disgusting to me.

The recent stock market rally can’t be more fake as economies slide IMO. This is classic herd mentality. Just wait till this herd disperses . . . .

Black Friday sales may be the real test. Errol’s Commodity Wire, Calgary.

[ajl]

Question Errol: if central banks were eliminated right now, would interest rates rise or fall? With the demand for debt mainly for refinancing activity right now rates would rise in a free market. Money is still being printed by central banks to hold rates down to current levels. To have a healthy free market economy over the long run, the giant asset price balloon has to be deflated and malinvestment (mostly real estate speculation) punished. Still not seeing much in the way of forced sales of over priced land yet so obviously most farmers are coping well with the higher rates. Our big problem now, as in the late 70's was rates below market prices which drove the speculation in the first place. I think central banking should be eliminated and the free market be allowed to set interest rates based on supply and demand.

[Rareearth]

Seems there is a shortage of housing - everywhere. This is not a housing bubble, yes they are more money now. Time will fix this and the perception of inflation or “it’s expensive” thinking. How many years has it been now since the end of covid?
think of all this as a soft landing.

the bigger issue or risk is currency wars and religious wars.

inflation actually reduces the debt ( federal and personal)

[errolanderson]

Question Errol: if central banks were eliminated right now, would interest rates rise or fall? With the demand for debt mainly for refinancing activity right now rates would rise in a free market. Money is still being printed by central banks to hold rates down to current levels. To have a healthy free market economy over the long run, the giant asset price balloon has to be deflated and malinvestment (mostly real estate speculation) punished. Still not seeing much in the way of forced sales of over priced land yet so obviously most farmers are coping well with the higher rates. Our big problem now, as in the late 70's was rates below market prices which drove the speculation in the first place. I think central banking should be eliminated and the free market be allowed to set interest rates based on supply and demand.

The U.S. Federal Reserve is in-place to protect Wall Street. The Great Financial crisis from the 2008 has never been fixed, rather swept under the rug via central free money policy. QE just bought some time, but money printing response gradually diminished. Now money supply is actually shrinking (full circle).

Central bankers are totally painted into a corner. The QE magic pill just made a bad situation worse. There is no can-kicking solution left. Investors now rushing into the stock market like buffalo racing toward a jump. Herd mentality. Shrinking money supply is a huge deflationary warning.

Not sure where rates would be without central bankers. But the debt crisis we are all entering would not be near as bad as today. Central bank policy just made situation worse. Recession / depression (call it what you want) may take years to turn around. To me, it may be 2026 before recovery. But fallout of the debt crisis could last until 2030. It depends how hard and quickly the mighty will fall. (My opinion, likely not shared by many).

[Austrian Economics]

In a free market, gold would be money and interest rates would be low but stable. Probably around where they are right now, going by historical standards. The key to stabilizing interest rates is to give savers the power to withdraw their gold if rates get too low or a bank engages in too much risky lending. Holding gold means that you do not wish to be a creditor. This puts a floor under the rate of interest at the discretion of savers, something that cannot be done today. Of course, no one would be willing to lend to governments on the scale that we do today, and rightfully so. Spending would have to be cut and debt repaid in full.

The precise mechanism for putting a floor under the rate of interest is to make any and all banknotes legally redeemable for gold on demand. This is something that an individual could do prior to the 1930s but not since. When the banknote is exchanged for gold, the note must be removed from circulation.

If a bank wants to attract gold from savers, it must convince them that the risk is worth the reward.

[errolanderson]

The ‘too late party’ has arrived . . . .

Debt is now feeding on debt. U.S. debt now @ $33.7 trillion, up 45% since beginning of COVID in 2020. Now debt payments, larger than U.S. military spending (over 1 trillion per year). This is ripping at political and social fabric of a country.

The crash is here. Stock market rally now no more than flow of money that has nowhere else to go. Massive bubble, without value. Commodities and shredding asset values telling the truth.

This will be a very long recession . . .