Canada goes the way of the Dodo bird, I mean Savings Bond - by ABE

Canada is handing out free money like hotcakes. Meanwhile, its GDP is dropping faster than Bill Clinton's pants. Taxes are going up while its tax revenue is plummeting (this is because the ever-increasing number of unemployed do not pay taxes, nor do bankrupt businesses). Let's be serious, Canada is on life support and it's rapidly approaching economic rigour mortis.

Dodo bird
Given this mismanagement of our funds and economy, and the ad-hock simpleton approach of nonchalantly printing more money to pay for whatever tickles their political fancy, I figured it might be prudent to safeguard some of my funds in light of this ticking time bomb.

You see, in order for Canada to pay its bills, it has to collect money from taxes. But there isn't enough tax revenue to cover our political overlord's frivolous spending; it's not even close. So we're forced to borrow vast amounts of money to pay our bills. It’s like using a credit card that you never pay off. Instead, you just keep borrowing more and more money and paying more and more interest on what you owe. As you can imagine, this level of spending incompetence will quickly bite you in the arse. Luckily, a country is a lot larger than an individual, so it takes a lot longer for the day of reckoning to arrive.

Given this dynamic and Canadas growing need for funding, I figured I might as well make some money off this gong show. Traditionally, when Canada needed to borrow money, they would offer Canadian Savings Bonds. These bonds would be bought up nationally and internationally, promising an interest rate to its purchasers, and guaranteeing it with a stamp of National clout.

In the '80s, these bonds could net you ~ 20%  a year (3). In the late '90s, I bought one that was giving me just under 6%. Years later, I bought one that gave me 3.5%. Eventually, they were giving less than a percentage point and I wandered elsewhere to different investment horizons. Note how easy it was in the '80s to accumulate wealth as compared to today. You could make a lot of money on secure investments and taxes were comparatively non-existent. Back then my parents bought an acreage for $60,000: which today would be worth a million. This is a testament to Canadas failed progressive politics and a symptom of its decay.

Now bringing this back-home, I figured, given the near-complete economic collapse of Canada, with oil being cheaper than Pepsi and corona-virus prompting draconian punitive economic measures … it seemed to me that Canada might need to attract some investors: you know, so we could pay the bills. I mean, even Trudeau must know you can’t just keep printing money indefinitely?? (Pause ... for a long sarcastic laugh). So I suspected that that once noble investment tool, the Canadian savings bond, which I had abandoned decades ago, might be offering some sort of monetary incentive to potential investors. I was subconsciously speculating that the rate could be in the 3% area again (given how desperately we need the money?). So in this way at least, I could dismally profit from this economic downturn. I use the term "profit" loosely, given that that measly 3% I was hoping for was going to be used to offset the 100% loss of income I had suffered, coupled with the additional burden of a new ~5.72% Carbon tax which was hungrily eying my empty wallet (4). Yet even a percentage point appears to have been too much to hope for, illustrating why we should never put any faith in government.

I ventured to the Canadian Saving's Bond site to see what the current rate offering was, and this is what I found:


Important announcement about the Canada Savings Bonds Program


March 22, 2017

In the latest federal budget released on 22 March 2017, the Government of Canada announced it will discontinue the sale of Canada Savings Bonds (CSBs) and Canada Premium Bonds (CPBs) as of November 2017.

Given the overall decline in sales, the access to alternative investments vehicles for consumers and the administration and management costs of the program, the Canada Savings Bonds Program is no longer a main component of the federal debt management strategy. The Government of Canada is able to source funding at a more cost effective rate by issuing wholesale debt. (2)

So Trudeau killed the Canadian savings bond (1)? I didn’t know that. What I do know is that I'm skeptical of the economic prudence a past part-time drama teacher has in structuring a new means to fund pubic debt. Whatever the case, it was definitely another move by the Trudeau liberals that hurt the economic standing of everyday Canadian citizens such as myself. Citizens who wanted a safe and easy investment at a guaranteed rate.

What I find intriguing is that the "HOW" in which they will now fund Canada’s debt is conveniently omitted in their government posting. It does say they will “source fund” our debt … by “issuing wholesale debt”.  So what are we now, the Costco of debt offerings?

A wholesale debt offering implies the selling of very large swags of debt to very large players. I’m thinking that this means that Canada's debt is being bought up by China and the Middle East. making us literally indebted to them. I would be curious to know what interest rates we are charging them? Or perhaps whether or not favors are being bought in nefarious backroom deals, such as 5G network approvals, or penance for holding Huawei's Meng Wanzhou (6)?

When I see this sort of thing, I suspect dirty political manoeuvring to line personal pockets. Bitcoin wallets are filling, and the Trudeau Foundation is open for business, the business of selling off Canada: or so I suspect. But who am I to speculate on these things? I didn't even know our savings bond was axed.

What I do know is that Alberta needs to leave this sinking ship called Canada. Hey Saskatchewan, wanna come?

written by ABE (5).

(1) Yes, I am inept in that I missed the death of the Savings Bond in 2017. Deal with it. 
(3)  https://ca.finance.yahoo.com/news/3-sensible-replacements-canada-savings-174313508.html
(4)  or whatever it turns out to be - https://www.sherwoodparknews.com/news/local-news/new-year-new-carbon-tax
(5) Alberta Beef Eater 
(6) and yes, I do know Huawei is 2019, these are called metaphoric examples to illustrate a point. But how can Canada deny China's 5G when they own our debt. When you owe someone enough money, they dictate the terms.

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