Author Topic: Government Day-to-Day  (Read 34411 times)

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Offline JMT

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Re: Government Day-to-Day
« Reply #345 on: May 12, 2020, 10:50:34 pm »
We will be very lucky if the combined federal and provincial debt to GDP is less than 100% by the end of the year.

So, we'll be more like Japan was pre COVID - oh well.

If I were a foreign investor looking to buy Canadian debt, the first thing I would think of is the future of the currency. If they are only going to pay 1% interest and I flgure the Canadian dollar will devalue by 5%, I will be 4% better off putting my money under my mattress.

We don't really want our debt being substantially foreign held.

What will more likely happen is the BoC will lend the money to the government and then buy back the debt, in other words print money. That is what the US has been doing since 2009. Problem is, we aren't the worlds reserve currency.

You keep looking for problems that don't exist. If Canada were taking on a trillion dollar liability, and no one else was, it would be a different matter.  Our package so far is small in comparison to a lot of other advanced countries.
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