It's Just Money

People voted for a snowboard instructor who said that budgets balance themselves (yes, he said it. Look it up.).

People vote for people like themselves.

To wit:

A question for you, dear viewer: How much would you pay for this VHS cassette of Jerry McGuire? $20? $10? Nothing, because literally every thrift shop in the English-speaking world will gladly hand you a basket of Jerry McGuire tapes for 10 cents?

When there is a lot of something around, it magically loses value, be that Jerry McGuire tapes, K-cars, Pete Rose autographs or even cold, hard cash. That’s right: The very currency in your pocket can hemorrhage value if there’s too much of it around. And I have some bad news: We are entering an economic climate where that exact thing is poised to happen.

I’m talking about inflation: The process by which everything gets more expensive because money starts to lose value. In developed Western democracies there’s always a little inflation around, usually around two per cent, but we could be on track for inflation to hit up to 5 per cent, meaning that for every 12 months that goes by, your loonie (or greenback) loses five cents. ...

The U.S. just passed a $2 trillion stimulus package. In Canada, we’ve run up a deficit in the last 10 months that could have singularly paid for our entire contribution to the Second World War. These are utterly insane amounts of money and it looks like they weren’t altogether necessary.

In Canada, the savings rate has skyrocketed under COVID, meaning that a lot of people (particularly high-income earners and those in unaffected occupations) are getting their stimulus cash and just sticking it in the bank. The same thing is happening in the U.S., where millions of people are either sitting on their stimulus cheques or spending it on fun stuff like guns.

These are not the actions of a population desperate for financial relief, so what you’re seeing is that in the U.S. and Canada, governments are helicopter-dropping crates of cash onto people who don’t need it. Mix mountains of cash with people who don’t need it, and you get inflation. ...

So we’ve got these twin-avalanches of Boomer and government money smashing into the economy. Too bad we’ve also just seen one of the largest mass-closures of businesses ever. Thousands of restaurants, hotels, travel agencies and strip clubs across North America have been wiped out by the pandemic.

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So right at the moment we’re about to see this utterly unhinged amount of consumer spending, there’s never been fewer places for it to go. So all that cash is going to get funnelled towards whatever is left, and bid up the price.

In fact, a version of this is already happening in Canadian and U.S. real estate, which if you hadn’t noticed is undergoing a bit of a price spike. Right now, you can’t spend money on vacations, restaurants meals, concerts or mistresses, so bushels of cash are being spent on the one thing we can buy: Houses and condos. So get ready for that to happen more, but with everything … except Jerry McGuire tapes, of course.

Pay attention, soon-to-be-bankrupt Canadians, because this concerns you. 

The government you wanted (because others BAD BAD BAD) is awfully good at wasting money and never accounting for it.

Going broke good and hard:

The Liberal government should abandon most of its $100-billion stimulus plans and increase GST as a way to recoup massive COVID-19 spending levels, according to a new report that says Canada is in need of a considerable fiscal reset.

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A federal guaranteed basic income program would cost billions but lower poverty rates, the Parliamentary Budget Office said yesterday. Analysts said a guaranteed income would be a disincentive to work: “The overall cost of a guaranteed basic income would rise from $85 billion in 2021 to $93 billion in 2025.”

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The Canadian Parliamentary Press Gallery yesterday rejected mandatory disclosure of all federal grants and subsidies sought by member organizations. Media instead adopted an ethics code requiring only new applicants for membership to reveal financial conflicts of interest: “That’s cleared up.”

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Economic Development Minister Mélanie Joly has signed a pledge she will avoid all discussion of future federal contracts with her boyfriend’s company. The undertaking to the Ethics Commissioner follows Blacklock’s disclosure the boyfriend received more than $42,000 in federal funds: “She has never played any role in the awarding of government funds to this company.”

Do you feel confident in your government still?