With deficits ballooning and the gall of Canadians on the rise spending, day trading, betting their CERB payments on the rise, what does all this mean for the future?
The party is on for now but there is a huge hangover coming when Canada wakes up one morning.
"...It’s not just the debt, either, but the denominator, which is national income, which threatens to take the ratio of liabilities to GDP further into the stratosphere. Yes, interest rates are close to 0 per cent, but they won’t be there forever and there is this other not-so-little thing called the principal that still has to get repaid. It will be interesting to see how a central bank that does not govern over the world’s reserve currency and a country with a massive balance-of-payments deficit will be able to have all of this largesse find its way onto the BoC balance sheet — and the rampant money supply growth this will engender — without jeopardizing global investor confidence in the relative value of the Canadian dollar, which I believe will not end up bottoming until it hits 60 cents (U.S.). And as bold as that sounds, it may end up proving to be a conservative forecast..."
https://business.financialpost.com/investing/investing-pro/david-rosenberg-why-i-saw-a-credit-downgrade-in-canadas-future-months-ago
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