Wednesday, December 8, 2010
Heeere's The Recession!
Remember that recession we had two years ago? It's coming back!
Ah, economic downturns. In our current fiat debt-based economic system recessions are the necessary cure to artificial booms, brought about by an increase in the money supply. Yet, in our crazy-Orwellian-crazy world, increases in money are also helpful for a sluggish economy!
But only for a short while. See the graph up there on the left? The one labeled Canadian Quarterly GDP Growth? Look how bad things got in '08 and '09. Yikes!
Fortunately our wise overlords fixed the problem by taking on a shitload of debt. They encouraged us to do the same, and with interest rates so low, we figured why the hell not!? It seemed to work for a while, after all, look how big the 2010 Q1 is!
I wonder what the cooked figures will look like for 2011. Around where I live (Southern Ontario) things are looking bad for Santa. The unemployed stay unemployed, it's like the summer of 2008 all over again.
According to the CBC, mining and the public sector were the big winners in the latter half of this year. Who are the losers? Take a guess. Low interest rates, personal debt at record levels, the Canadian government loaning $500 billion to risky borrowers.
That's right! It's housing!
The number of residential permits are down and the Canadian Real Estate Association are predicting slower home sales for 2011. They predict annual change of -0.7% for Ontario and -1.3% for all of Canada. I predict these figures are arbitrary. Canadian consumers mirror their American neighbors tenfold. The largest mall on the continent resides in Canada. Canadians are in debt and when interest rates rise things could go bat-shit crazy.
Canada's unemployment rate is at a two-year low, currently sitting at 7.6%. Expect that number to go higher soon. Unless of course, the public sector starts hiring. Then we can all go Communist and have 0% unemployment and a 100% propaganda literacy rate!
So what's BoC Governor Mark Carney going to do? Cut interest rates? Raise interest rates? Make interest rates go sideways? (Bernanke, start taking notes).
Nope. Neither. Carney's going to keep things the same until he can, presumably, get a better feel for how bad this shit show is going to get.
Are a majority of economists finally admitting that Canada is in serious trouble?
Absolutely not! You didn't expect them to, did you? Nearly everybody is blaming the sluggish economy on a stronger loonie. I maintain that it's not the loonie that's so strong, it's the dollar that's so weak. And while a stronger loonie abroad is bad for our exports, most professional economists are ignoring the housing bubble, instead blaming the Americans for our all woes.
When will Canada learn?
Probably in 2011. Unfortunately the Canadian apathetic and misinformed will find gold and silver prices much higher than they were in 2008, when this thing first went down.
Without gold or guns and with the 33rd Section of the Canadian Charter of Rights and Freedoms, New Hampshire is looking better everyday.