I finally squeezed in 10 hours of sleep yesterday and I did it by forcing myself to forget everything and just rest. This is no easy feat. Similar to how everyone is talking about the economy every chance they get, my mind is set on constant analytical mode by default.
So I had a chance to re-evaluate the situation this morning with a clearer mind. Many still think that the Canadian economy is strong and the recent government reactions are purely a response to the pessimism of those who suffered in stocks and real estate. Let me just point out that with lower interest rates (US expected to cut 0.5% in January to 0.5% and Canada to follow), the government is forcing people to spend. In a well regulated and moving cycle, the money that is drawn from savings in Banks will eventually flow back into the Bank. But this is not the case now.
What will people spend on? There is no way to know how deep in the hole public companies are, therefore stocks and financial instruments effectively lose their appeal. The safest bet is to go into real estate especially commercial which still has a 6-8% return and the risk of vacancy and non-recoverables. Now with banks unwilling to lend or more accurately with nothing to lend (no deposits), the only ones who can afford to buy real estates are those who can fully finance their own purchases. This easily leaves the majority of people at home with their money on their hands and not knowing what to do.
Maybe they are right - I should be more optimistic and less cynical. After all, Canada was voted to have the soundest banking system in the world by World Economic Forum. Then again..... There is no way to go back in time to when US has $1 of gold in the reserve for every $1 they issue. There is no way to eliminate all the greed or stupidity. There is no way for the poor and rich ratio to remain close, no way to solve world hunger, no way to not have crimes and wars…….. Should we just accept it, embrace it and by God pay our tribute to it, and hope by some self-fulfilling miracle, our lives will all be better?
Maybe they are right - I should be more optimistic and less cynical. After all, Canada was voted to have the soundest banking system in the world by World Economic Forum. Then again..... There is no way to go back in time to when US has $1 of gold in the reserve for every $1 they issue. There is no way to eliminate all the greed or stupidity. There is no way for the poor and rich ratio to remain close, no way to solve world hunger, no way to not have crimes and wars…….. Should we just accept it, embrace it and by God pay our tribute to it, and hope by some self-fulfilling miracle, our lives will all be better?
Optimism is like an ego-stroker, the more you milk it, the more deluded you become. Sorry, I've tried and failed, the poison of pessimism and cynicism is simply too deep in me. Just leave me to die.
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