Advantage Canada . It now costs $1.03 to purchase a US $ . The fiat currency market is being tossed about on the waves violently . It could be that the markets are signalling to Canada that given the fact that your economy is doing better than holding on , that is , seeing real growth the interest rate should rise . They have a point , however the reasons for holding the line are just as convincing . Growth is regional and is barely begun . Inflation , compliments of the US Federal Reserve has arrived , so any rise in rates could theoretically put the economy back into recession . How likely ? That depends on where you live . If you live in parts of B.C. , Alberta , or Saskatchewan the chances are slim to none . Any other part of the country ,game on ! It could be said that the western part of Canada is busy inflating its own bubble . I will not question the decisions made by the Bank of Canada . Mark Carney has implemented a solid approach and has delivered us from potential chaos and/or ruin . Make no mistake though the risk has not gone away . WE have merely skirted around the risks yet again putting off the issues that need to be addressed . What issues would Canada have have ? Why , the same issues every other developed nation has , Inflation and the addiction to growth .
Growth is something that is self providing . If the population continues to increase and people have creativeness then growth happens . Perhaps not as smooth as economists would like to see or in the "right" locations , but it happens . Worst case you stand still just to survive . It is only when the govt. interferes with stimulus programs and ad hoc financing that the view of growth is distorted and after 30 + years it is no longer distinguishable so a new image is brought forward , more to liking of business and govt. . What needs to happen is there needs to be a one person think tank , figure out what the strengths are and build upon that . No country can be all things to its people .
Which takes me to foreign aid . Since its inception it has been done wrong . The Nations with capital have gone to places that need help and boldly said "this is what we did and we are providing the money , so do it our way" WRONG , people . People that need capital will always be there but the object is to not have repeat customers . Go to them money in hand and ask "what is it you want to do and where can I help ?" They may need to have a one person think tank before accepting the help but it assures a far higher success rate .
A look back over the history of the developed world shows that a lot of things were done wrong . With those lessons in hand perhaps it is best if the economies shrink back and the re building process can begin . Maybe we will even get it right.
What are the lesson that will be in hand ? Lesson 1 is nothing lasts forever .Economies are like plants . They germinate grow ,bloom ,mature , go to seed and die , letting a new plant take its place . Very few of our people in positions of influence want to recognize this fact . That , or there is the perpetual thought that we are in growth or bloom stage . My assessment is that Europe has gone to seed , America is dying , Canada and Australia are mature . I'm sure that sounds harsh and there will be thousands if not millions that disagree with me , I did say it was "my" assessment . All these countries are now behind the 8 ball when it comes to planning a new direction . Growth is out of the question the best all can hope for is a winding down and those individuals in a position to rebuild will see opportunity to do so.
What of the people that are in that position ? In America and to a lesser extent the rest of the developed world these people have been aided by govt. to increase their own personal wealth and that of the corp. they oversee . I do not object to them building wealth . My objection is that they built it on the backs of one country and transfer it to another with higher returns (emerging markets) . A vast majority of the population in these developed economies have no idea how much assistance they are providing to the corporations . These same corps. constantly hold the threat of leaving or closing up should the tax rate rise to ANY degree . Step 1 quietly close the openings that allow transfer of wealth to another country without the approval of the ruling govt. Step 2 set up a protocol for corporations that want to transfer or wind down . Offering a alternative such as restructuring . Hold firm to the rules .
What's done is done . We cannot go and claw back into the errors from the past , for what kind of confidence does that bring ? The best we can do is learn and start over . Let the "chips fall where they may" so to speak . There will be much anguish amongst the people and the banks , the losses will be astronomical , but mark my words failure to address the problem head on and write down a large portion will only cause the entire planet to implode from the greed and unwillingness to learn and bend .
The cynical or realistic thinking (which ever you choose) would say that we have a deep mistrust towards one another . We tend to eye each other with deep suspicion . I think it will only get worse as the gap widens between the "haves" and "have nots" . Protests , uprisings , and outright revolts certainly capture the attention of the political leaders and the media . What the end result usually is , is a few concessions given to those who objected and more given to those who were silent .
There are many external factors that will play out in time . The cost of transporting goods , will global trade continue at a higher cost or will trade be sharply reduced ? I tend to look back at the past 30-40 years and think what if trade had not accelerated at the pace it did ? Would everyone be worse off ? The lifestyle we have become accustomed to may not have happened . Maybe we would have a healthier life or the innovators would have looked for other opportunities .
We are about to find out what might have been the hard way ,as our economy contracts . The question you will have to answer for yourself is will you help your neighbor who is in the same situation as you despite your longing for what you used to have ? In some ways I am fearful of what is come and at the same time exited for a new beginning an era of people working together for the good of each other . A government that holds all its corporate citizens accountable and responsible thereby over time developing a whole new mind set .
It all sounds so pie in the sky but if the will is there from top to bottom we can rebuild with success and a good feeling in our hearts