Articles & Blogs - Canadian Commentary

One of the great myths of the corrupted political system of the Western world is that “conservative” (or Conservative) political parties provide superior fiscal/financial management versus centrist or (so-called) left-wing political parties. The facts quickly dispel such a ludicrous fantasy.

The starting point in debunking this mythology is the Reagan administration of the United States. According to the propaganda of the Corporate media (and the assertions of all right-wing zealots) the Reagan years supposedly represented some sort of Golden Age for the United States, and (in particular) its economy.

In fact; it was the Reagan administration which torpedoed the financial solvency of the U.S. It was during the Reagan years that a new philosophy/dogma was introduced (and mimicked) by so-called “conservative” parties across the Western world: the mantra of “spend, but don’t tax”.

According to this idiotic drivel (which survives to this day); conservative regimes can spend all they want (on huge war machines and police states), and all they have to do to “pay for it” is to cut taxes. Given the absurd euphemism “supply-side economics” by the propagandists; according to the Reaganites (and now all right-wing zealots) “cutting taxes” is so beneficial to any economy that the more you cut, the ‘stronger’ the economy gets.

Presumably (according to this mythology) if all taxes were cut to zero, our economies would be “stronger than ever”, and drowning in large, budget surpluses. It all sounds wonderful, but the reality, of course, bears no resemblance at all to this ridiculous fantasy. What did the U.S. reap from eight years of “supply-side economics”? A tripling of the U.S. national debt, at which point (along with all its $trillions in “unfunded liabilities”) the United States descended into hopeless insolvency.

Proving that this economic catastrophe was a failure of policy (rather than merely the incompetent execution of that policy), even before the end of “the Reagan years” we then saw the rise of Canada’s (Conservative) Mulroney regime. As the original, Conservative “U.S. lap-dog”; Mulroney immediately sought to copy anything-and-everything being done south of the border – including copying the spend-but-don’t-tax fiscal insanity of the Reagan regime.

What was the result of Brian Mulroney copying this intellectually/economically bankrupt “supply-side economics”? You guessed it: eight (long) years, and a tripling of Canada’s national debt. The only difference between Canada and the U.S. was that Canada was not (yet) hopelessly insolvent, largely because we weren’t also trying to fund an enormous war machine.

Immediately after the economic catastrophe known as “Brian Mulroney”; Canada elected an honest and responsible (Liberal) government. In two years; it transformed the “record deficits” of the Mulroney years into a budget surplus.

A decade of Liberal rule led to a decade of budget surpluses…until (you guessed it, again) Canada elected another Conservative government: the ultra-corrupt, ultra-incompetent regime of Stephen Harper. In little more than two years; Stephen Harper transformed an economy which had recorded ten, consecutive years of budget surpluses back to (more) “record deficits”.

It’s much more difficult to compare the U.S. governments which followed Reagan, as even by the beginning of the Clinton regime; the U.S.’s national ‘accounting’ and economic ‘statistics’ had become so radically falsified that they bore (bear) absolutely no resemblance to reality. This is easily illustrated.

The U.S. Treasury Department used to be required (once a year) to do a real accounting of the U.S. government’s finances, i.e. crunching the numbers using “GAAP accounting principles” – the same principles of accounting which are legally required for all corporations. During the reign of George Bush Jr.; his supposed “budgets” (and deficits) were so utterly fraudulent that the supposed “official deficit” accounted for as little as 5% of the overall increase in indebtedness.

In Canada, where the economic destruction caused by conservatives is not as well concealed (under mountains of fraudulent accounting); bankrupting our economy is only one aspect of this gross economic mismanagement/incompetence. There is also the destruction of Canada’s currency, now aptly nicknamed “the Loonie”.

Once again; we see another Conservative see-saw. Under Brian Mulroney (and his infamous/notorious “free trade agreement” with the U.S.), the Canadian dollar went into free-fall versus the U.S. dollar, as “free trade” cost the Canadian economy well over half a million jobs. Here the monetary/economic damage was so severe that it took much longer than two years for the subsequent Liberal government to reverse that destruction.

The Liberals weren’t able to stop the slide of the Canadian dollar until 2002, when it reached its all-time low of 61.98 cents versus the USD. What happened after that (as the world took note of Canada’s stalwart fiscal management)? The CAD began rocketing higher. By 2006; the Loonie had appreciated by roughly 50%, all the way past 90 cents versus the USD – and then Canada elected Harper the Destroyer.

The first thing that Harper did was to appoint Goldman Sachs stooge, Mark Carney as the new head of the Bank of Canada. His mission: destroy the Loonie. It wasn’t easy. Ten consecutive years of budget surpluses (in a Western world drowning in red ink) produced a lot of upward momentum for the Loonie.

It wasn’t until 2007 that the Harper/Carney tag-team had managed to halt that upward momentum, by which time the CAD was now trading at a healthy premium: $1.10 versus the USD. Then Harper and Carney really went to work. Since that high in 2007; the Loonie fell all the way to 76 cents versus the USD by March 2009.

That represented a collapse in value of nearly 1/3rd, in little more than two years. The Loonie enjoyed a brief resurgence after the insane/fraudulent “bail-outs” which followed the Crash of ’08, but this was simply due to the (brief) perception at that time that Canada was less-bankrupt than other Western nations.

Since that short hiccup; the CAD has once again fallen to 82 cents versus the USD. That 28-cent decline versus the USD (from its peak) translates into a plunge of roughly 25% -- the “Conservative discount”, the penalty that Canadians are paying for being foolish enough to elect another Conservative government. That 25% discount means that Canadians pay 1/3rd more (for everything) than they would be paying if Canada had a non-Conservative government.

While “competitive devaluation” is the corrupt mantra of all the charlatan economists and all our traitor governments; destroying one’s own currency represents a cent-for-cent drop in our standard of living. Indeed, it was the devastation perpetrated against the Loonie by Harper & Carney (and the explosive “inflation”, which is the flip-side of devaluation) which resulted in the penny being removed from circulation – deemed officially “worthless” by these Loonie Assassins.

As Western economies stagger towards the Next Crash (almost certainly scheduled for later this year, or early next year); these nations are about to suffer further, irreparable economic/monetary disintegration. This assumes that these economies can even survive the economic rape (i.e. mass “bail-ins”) which the banksters have schemed so diligently to entrench in our wholly corrupted political system.

Assuming the Next Crash does not result in some mass, Western (global?) Debt Jubilee; at the very best, our currency (and most Western currencies) will suffer another huge drop in value, translating into another huge drop in our standard of living. Having already seen such an enormous drop in our standard of living from the current “Conservative discount”; Canadians literally cannot afford another term in office for this corrupt regime.

http://bullionbullscanada.com/canadian-commentary/26616-the-canadian-dollar-victim-of-the-conservative-discount

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...so what's the solution...vote the Liberals out of Ontario, and vote the Conservatives out Federally?...

That CND dollar discount seems to be the only thing these days that is allowing our Canadian Miners (in Canada) to be semi- profitable in this depressed metals prices climate. So I gues the miners profit, and perhaps Hollywood North Profits. But will miners looking to bring new mines into production benefit...(ie are their CAPEX costs mostly associated with goods/services made in Canada, or are CAPEX costs/budgets being inflated due to having to import from the US ?

Cheers,

Luker