JPF Home Page Forums General Messages General Message Forum Canada facing financial trouble

The US may have a 18 trillion dollar debt but your dollar is worth a dollar while our dollar is worth about 70 cents. We have hit the perfect storm. Canada depends mostly on our natural resources like oil, minerals, timber, etc. Less on manufacturing. Right now oil is low in price, minerals and timber products are low because of lack of demand, therefore our dollar is plummeting which drives up imports, especially food because we must import most of that from countries with a warmer climate. The low dollar would help our manufacturing industries if we had any, oh we have some but not enough to compensate for other losses. It should help our tourist industry but not so much in the dead of winter, except for skiing and winter sports. Our newly elected government is planning on running a ten billion dollar deficit for the next three years to boost the economy by repairing infrastructure, like roads and bridges, that have been neglected over the years, but that may now run double that deficit because revenue from natural resources is way down. Add to that, a lot of well paying jobs are now gone so less income tax will be coming in. The low dollar may discourage cross the border shopping but they also have less dollars to spend at home, so sales tax will be down. The world economy is in a tailspin, even China, which usually grows at six or seven percent a year, is slowing. The stock markets are plummeting too, so the rich are not getting richer at the same pace, my oh my, what is gonna happen next. Even though crude oil price is at a ten year low, we are still not benefitting as we should at the pumps. Oil refineries are said to be taking advantage and making an exorbitant profit.

You would think the low Canadian dollar would slow down the snowbirds from moving south each winter. I guess not.

I've been getting royalty checks from Canada. My bank charges me quite a bit extra to cash it ($65). I did find a bank to cash it for $15, but there was a hold on it for 2-3 weeks. Probably has something to do with the different dollar values.

John

Well I don't know what to tell you Everett,
The Stock Market(s) are way down in the first week of the new year. A lot of Political Pundits thought and tried to make everything better. Even with all the evidence to the contrary our liberal friends are trying it again. Things are so screwed up here the Texas Governor is calling for a Constitutional Convention. The liberals want to tax the hell out of the rich people and the rich people are moving off shore. I think Re-Arranging the Deck Chairs on the Titanic is their only answer.

Hi Everett:

Financial trouble seems to be a contagious disease between countries around the globe. Our National Debt keeps mounting at an astronomical rate so I can sure sympathize with you.

I was amused at John's reply about the extra expense involved in cashing checks coming from Canada. The only thing worse is having no checks coming in from Canada... LOL!

Hang in there guys and gals... as an optimist, I have to believe things are going to eventually get better. Vote like your grandchildren's future finances depend on it

Sorry for the late reply John, but to charge even $15.00 to cash a cheque is ridiculous, I get US cheques cashed up here for nothing. If you are talking about the difference in converting Canadian money to US money, yes there will be up to 40%, I gained 36% on converting a US cheque to Canadian the other day. Your banking system is much different than ours, that could be half your problem. Banks in the US can charge pretty much what they like, in Canada there are guidelines they must follow. It would be better if you received your money through PayPal, they only charge a conversion charge of about 2% above the actual exchange rate.

Dave, we ain't seen nothing yet. The low price of oil is throwing a monkey wrench into a lot of economies. What gets me is when oil was going up, it was an excuse to raise prices on just about everything, because of the extra transportation cost. Now that oil is going down, shouldn't that bring prices down? Not likely, prices are rising due mainly the low cost of oil and the affects it is having on currencies and royalties that countries are not getting. The fact that so many big companies are taking over smaller companies, by what ever means, is not helping the consumers, less competition in the market place means they can raise their prices without fear of losing customers, where else are you going to get what you need, they might be the only game in town.

I just finished writing a book and that is what it is about. Big companies getting bigger, not by fair competition, but through squeezing, freezing and buying out their competitors. I see it on the news all the time. The small squeeze outs never get mentioned, only the big ones. Suncore oil is now trying for a hostile take over of another large oil company in Alberta, low oil prices are enabling them to do it, they have a large money supply, the other company does not. The bible says the time is coming when it will take a day's pay to buy a day's supply of food, but don't touch the oil and the wine. That is fast coming.

Hi Everett:

One of the benefits of the "depressed oil patch" economy here in the "states"... we are seeing gasoline (petrol) prices very near the point of affordability. On a retirees budget, this is almost as good as getting a raise. I fully realize it is probably short lived and the "robber barons" will be back in the saddle again, soon. In the next town north of Glen Rose (a place called Granbury) gasoline prices were $1.62 per gallon and my daughter who lives near Austin, TX told me on the phone today they are seeing $1.54 per gallon prices. Woo hoo!

Eventually, all this economy stuff will get sorted out. You are right, the big fish do tend to swallow the little fish. I guess it has always been that way... and I sure don't have the power to change human nature.

All the best to you, my friend. ----Dave

Dave, I know your US gallon is a bit smaller than the imperial gallon which we use in Canada, actually we now use the liter, which is about a third of your gallon, where I live we are paying about $1.05 a liter, which would put a US gallon over $3.00. We get hit with about four or five taxes on gas, that is what drives it so high. I wrote a song years ago called taxpayers blues which pokes fun at some of the taxes we pay in Canada, I guess the same would apply in the US, different names and different amounts, but tax just the same. Tax is a necessary evil to pay for all the services we require in a "civilized" society.

Our regular gas down the road is $2.09 a gallon. On top of that we get a discount for shopping at the Giant. I believe 10 cents off a gallon for every $100 spent.

John

Hey Everett,

Don't think that Canada is the only example.

When the world starts printing money to cover up gross financial mismanagement, oh man we're really in for it.

The global markets are propped up by the Emperor whose clothes are well and truly gone.

I got out of the stock market a year ago and reduced the debt levels way down. Cash, not credit, is now king.

Watch out for a very bumpy ride this year.

cheers, niteshift

Eh, Well,
The important message here is follow the Boy's Scout Message: Be Prepared. Do not, repeat Do Not put anybody else in charge of your Finances! Our Liberal's, Progressives, Democrats, and Communists all think you are too dumb to take care of yourself so they will do it for you! They take their message right out of Vaudville, WITH YOUR MONEY AND MY BRAINS WE WILL GO PLACES. Or in other words, Beware of Greeks bearing gifts!

This coming year could be a turning or breaking point for a lot of countries and individuals. For some reason countries like to see a 2% inflation rate, they hate deflation. I wonder why. What would they do with a 10% inflation or deflation rate. There has to be an adjustment some where.

So,
News Flash in today's News. Wal-Mart to close 154 Stores affecting 10,000 or so workers in the U.S. Where the adjustment will happen (Overall) is the National Debt will go up, more people will look for government handouts until that horse is ridden right into the ground. Meantime our esteemed "Leaders" will continue to Fiddle while "Rome" burns. Fiscal Problems are all over the U.S. and probably will be so for at least the next 100 years. It's still up in the air of who will make it to the door first, me or the wolf.

Newsflash

Walmart is closing 102 Walmart Express "test stores" set up in 2011 to see if a smaller format store might work, and 52 other stores, all within 10 miles of other Walmarts.

So yes, 154 stores closing

But at the same time it announced it is OPENING 50 to 60 supercenters, 85 to 95 Neighborhood Markets and 7 to 10 Sam's Clubs in the U.S. during the fiscal year that begins Feb. 1.

So 142 to 165 NEW, larger\better stores are opening.

Outside the U.S., Wal-Mart plans to open 200 to 240 stores.

So how is this BAD news exactly?

Humm,
The closing of 154 Wal-Mart Stores isn't exactly good news for the workers, said to be around 16 thousand who work there. That isn't exactly all the distressing news as the Markets have lost around 3000 points here recently and is down around 4 to 5 hundred points today.

So, is Canada's money problems real or imagined? There was a U.S. Senator R-Illinois who used to say, A billion a billion there, pretty soon we're talking real money. Maybe Greece is the only country having money problems. Oh sorry Purto Rico is also unable to pay it's debts. Just down the road, Jacksonville, Fl. has a huge pension problem. Many business' have moved off shore just to stay solvent. But listen, things are going to get better tomorrow. I'm sure of it!

The world will be in turmoil and man's heart will be failing him for fear, nation against nation, kingdom against kingdom.

And what about it:
you put your 100 bucks on a bank deposit then after 10 years you get 99 bucks...
could you be happy of a such investment?

Interesting thing: above I wrote a statement, that sounds absurd, right?
My post has more than 100 views...and nobody cares?

Then I should recognise, people don't know that we all are facing a
NEW "ECONOMY" now...

PS. To be continued...

I hear talk about negative financing, what is that all about? Will we have to pay banks to keep our money on deposit? Is that to encourage us to spend every cent we get? Good for the economy but bad for people when they need a nest egg.

Negative interest rates do not affect consumers.

It is the central bank rate and it is meant to ensure banks lend moneys by penalizing them if they do not.

A central bank is like the banker to the banks. It issues treasury notes as part of its control over the country's overall money supply. By manipulating treasury note and deposit requirements, they affect bank behaviour, interest rates, the amount of money in circulation etc.

So if banks are not lending, they have to buy treasury notes at a negative interest rate. Given that dilemma, they would rather lend out funds.

And Everett, it is too bad that Newfoundland has been hit by falling demand and prices for minerals and oil, but that does not apply to all of Canada. You and Alberta definitely. But manufacturing is buzzing because of our low dollar, saskatchewan and Manitoba are doing well with agriculture, BC, Ontario, Quebec, Nova Scotia and PEI are not as badly off...not sure about New Brunswick.

So yes, Canada has been hurt by falling resource prices, but overall things are not as bleak as you infer.

but the matter isn't about central bank(s) only:



http://www.bloomberg.com/news/artic...r-10-years-as-yields-below-zero-il8451ti

yes, that is exactly what I was saying...it issues treasury notes...this is government debt.

We just get to a point when we can hold our heads high and not be a have not province, and this happens. A perfect storm of low oil and mineral prices and a low dollar. It hits provinces that are high in natural resources but low in manufacturing the hardest. It is strange that the money markets and the dollar seems only to follow the price of oil. As you say, Canada is more than oil and minerals. Manufacturing could be better but only seems to benefit from a low dollar. With these free trade agreements, the main benefactors are the manufactures, they can now move to places like Mexico where labour cost and other cost are a lot lower than in Canada and even the USA. Still they have access to our markets and make more profits. How does this benefit us?

Well,
I seem to remember when you could buy a pack of cigarettes for about 20 cents. Now what do they cost? Over 2 dollars I guess. A dollar is still worth a dollar? I don't think so. You could buy a pretty good car for less than 4 thousand dollars. Today closer to 20 thousand. It's called progress, I think.

Is that good?
Some consider this as:

Anatomy of a Failing State: Japan’s Budgetary Nightmare



http://davidstockmanscontracorner.com/anatomy-of-a-failing-state-japans-budgetary-nightmare/

Back when I got out of the Air Force, cigarettes were $1.20 a carton in the PX--now they're over $40 a carton--My used '55 Chevy cost $30 a month, then gas was 15 cents a gallon!

The national debt was very low, back then--look at what all the free stuff cost now!

I wanna go back!

Mackie

Hi Mackie! Baseball cards were a nickel a pack (including bubble gum)in the 1950's.

Here are costs of things through the years: http://www.thepeoplehistory.com/70yearsofpricechange.html

Of course prices for one decade have to be compared with wages for the same decade. If my math is correct, I've determined that prices rose approximately 4 times faster than wages. Bummer.

John

I've never understood how countries can be in debt. All they have to do is print more money.

And that's a bigger problem Jim - Inflation!

John

I starting smoking when I was 13 ( I quit 22 years later ) and in 1964 I recall forging my mother's signature ( my handwriting was very mature for a boy of 13 ) and in those days a minor could purchase cigarettes with a note from a parent, so I remember purchasing cigarettes for 36 cents. I imagine it would have been cheaper in other states, so 20 cents sounds about right, say in Mississippi, Tennessee, etc. When I got my first car in 1970 I recall paying 35 cents per gallon, and my used '61 Chevy Biscayne ( in terrible condition ) set me back $175. I remember that after taxes, my net paycheck working at a liquor store was $66 per week. Though nationally minimum wage was $1.85, in Calif all the low skilled jobs got two bucks. I rented a single apartment and it was $60 per month. Today, a person on minimum wage could not afford a single apartment, he or she would have to have roommates. So, from that, I can only surmise the economy was better in the 60s than today. ( Sure, there were other problems then not existing today, but just talkin' the economy.) Also, I remember our family lived in a two bedroom apartment in '62 and it was $100 per month and my dad earned $5.65 per hour, which in those days, was pretty good.

I miss those days, but I guess most kids' childhood are fond memories, as mine were, living in Santa Barbara in the 60s. And let's not get started on music