US, world headed for 25 year depression: Jim Rickards

US, world headed for 25 year depression: Jim Rickards

“When I use the phrase 25 year depression, it sounds extreme but it’s not. We had a 30 year depression in the United States from about 1870 to 1900…The Great Depression lasted from about 1929 to 1940. The U.S. is in a depression today.” Well, it's been in the works for

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Canadian banking haven myth exposed

Canadian banking haven myth exposed

"One of the reasons that Canadians (and international commentators, other finance ministers and global financial institutions) buy this Canadian banking fairy tale is the way the government accounts for the money borrowed to support the banks." The sorry spectacle of Conservat

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Get rid of your mortgage, loans, because interest rates set to rise

Get rid of your mortgage, loans, because interest rates set to rise

Get rid of your loans, guys and gals, because we are going into a high interest rate period. Very high. It will be the equivalent of going into the double digit interest rates we had in the 80s where many people threw their house keys at the bank and we had record numbers of ba

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E-cigarettes save lives, money

E-cigarettes save lives, money

"We know that cigarettes have thousands of chemicals in them and we know that they are killing us. They have been for over a hundred years. So now, the e-cig industry comes along with only one or two chemicals in their mixture and people are freaking out over these as well. Whe

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US inches closer to big bank charges

US inches closer to big bank charges

Federal prosecutors are nearing criminal charges against some of the world’s biggest banks, according to lawyers briefed on the matter, a development that could produce the first guilty plea from a major bank in more than two decades. In doing so, prosecutors are confronting

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Canada’s home sales top predictions; why a real estate crash is inevitable

Canada’s home sales top predictions; why a real estate crash is inevitable

“The assurance of relatively low borrowing costs has likely given home buyers confidence while rising home values have kept new listings at a healthy level. Stable employment has provided some assurance to owners and buyers alike.” Our website is back after many months of

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Comparing today’s recession/depression to the 1980 recession

Comparing today's recession/depression to the 1980 recession

"Much like today, Americans were concerned not only with high unemployment but increasing budget deficits in the early 1980s. A September 1983 Gallup poll found that three-fourths of the public agreed that the federal government's budget deficit was a great threat (42%) or some

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Why savers are getting screwed

Why savers are getting screwed

"Without the intervention of economic policymakers, interest rates would be naturally higher. That would increase the cost of borrowing for businesses and consumers, but there would be some offsetting economic benefits. Savers are getting screwed by the current monetary policy

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Geithner admits USA bankrupt to US Senate

Geithner admits USA bankrupt to US Senate

"Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States. Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses

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World economies on verge of currency revaluations to deal with debt

World economies on verge of currency revaluations to deal with debt

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." -- Henry Ford Basically what the world central banks are doing is increasing their money by devaluin

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Is Obama the next Mugabe of Zimbabwe?

Is Obama the next Mugabe of Zimbabwe?

"America, Britain, Japan, Germany, France, Sweden, Holland, Norway, Canada and Australia make up the Fishmongers Group and their meeting on Tuesday will deliberate on the state of the inclusive government, debt relief, public finance administration and the controversial economi

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US raiding foreign countries with dollars, not soldiers

US raiding foreign countries with dollars, not soldiers

""The United States is going to China and saying: we want you to commit economic suicide, just like Japan did. We want you to follow the same thing: we want you to revalue your currency, we want you to squeeze your companies, we want you to go bankrupt,” says Michael Hudson,

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Content By: The Coming Depression Editorial Staff (dates cited below)
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handful of loonies

“We’ll start paying it down once we’re back in surplus,” Flaherty said.

There is a pool of money untapped by government: the practice of undeclared barter. When an individual says to you “That will cost so much if you pay by cheque but 20% less if you pay cash you know that the cash payment will never show up on any income statement, and no tax will be paid, and the people doing the work will be paid cash so they won’t pay individual income tax either. No only that; the individual will declare a loss on materials that just somehow disappeared and receive a tax rebate.

People who participate in undeclared barter by not paying taxes, or by their action allowing other to avoid taxes, are stealing from you and every other taxpaying citizen.

The combined debt of all levels of government is staggering. And there are only two ways out: Increase Taxes or Reduce Spending.

Canada need to do both. More taxes means that people will have less to spend. Reduced spending means fewer services paid by governments.

  • No more funding of new sports facilities
  • No more grants to arts organizations.
  • No more new libraries and fewer books for existing libraries.
  • Fewer Day-Cares.
  • No new public transportation programs (e.g. Ottawa’s light rail)
  • No more new bells and whistles on public transit.

If we want the debt to be reduced it will be painful for everyone. Well, not everyone — not executives of financial companies; not government employees; not consultants who get onto a program like Ontario’s e-Health. Each level of government needs to look at every one of their expenditures and ask “What can we do without? and what can we delay?

So Shall We Reap
Market Depth by Geoff Castle

An eerie calm fell over Canada’s financial markets one year ago. Battered by collapsing equity markets worldwide, and further hampered by falling commodity prices, the Canadian economy ground to a screeching halt. A decade of growth fueled by expanding debt was about to be unwound. Or so it seemed. However, into the breach stepped the Canadian government with a stimulus program of mammoth proportion. Though dormant in the spring, by the summer we saw a few green shoots emerge. And by the autumn of 2009 we began to harvest debt-fueled growth in this country once again.

This post does not quibble with the growth we see. It is there for all to observe. If we dare to ask a question it is only regarding the less studied subject of the durability of a rebound built on government largesse. Simply put, does the Canadian government have the borrowing capacity to keep on priming the pump?

I ask the question because the consensus opinion appears to be that government policies that add heavily to the long-term debt burden in Canada do not impact in the least our nation’s future borrowing ability. But will the bond market always be so accommodating in funding deficits?

To reach an answer, I believe it is important to get a full view of the facts. Of particular interest to me is the question of exactly how big is the consolidated debt burden that weighs upon the backs of Canadian taxpayers. If you go by the headline numbers, Canada’s $519 billion debt forecast for the end of the March 2010 fiscal year is relatively small by international standards, a mere 34% of GDP. That compares US debt-to-GDP of 74% and over 100% in Japan.

However, if we were a lender conducting an analysis on a corporate debt issuer, we would not be content with a number that accounts for only some of the total debt, we would want to know the fully consolidated number. And, in my view, the headline debt number in Canada is very far from being the whole picture.

You can read more by Geoff at his website.

Canada national Debt

Canada’s Debt
The Canoe Dossier

According to the Canadian Taxpayers Federation, Canada’s debt now stands at $5 billion. [Editor's note: it should read $500 billion for the Federal debt].

However, Sun Media reports that Finance Minister Jim Flaherty says there are no immediate plans for any spending cuts to reduce our national debt.

The CTF’s federal director says continued government spending will ‘actually create more problems for future taxpayers,’ but Flaherty feels it just isn’t the right time to reduce spending.

“We’ll start paying it down once we’re back in surplus,” Flaherty said. “We know how to balance budgets. We know how to run surpluses and we will. We have to get Canada through this recession and protect Canadians. We can’t pretend that Canada’s an island in the world because we’re not.”

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This entry was posted on Friday, November 27th, 2009 at 2:12 pm and is filed under North America. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1 Comment

  1. February 9, 2011 @ 3:37 pm


    How about stop printing money out of thin air and go back on the gold standard???

    Posted by Rick

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