🚀 go-pugleaf

"abc" <abc@123.cl> wrote in message 
news:20090901-031610.922.0@abc.shawnews.vc.shawcable.net...
>
> Growth brought to you by: The government
>
>
> By Alia McMullen,August 31, 2009
>
>
> Canada's government and central bank have achieved what they set out to
> do: injected life back into the economy through stimulus, stoking
> growth in June after 10 consecutive months of decline.

Nothing like empowering the people who created the problem to fix it.  Sort 
of like hiring the devil as the baby sitter.

> Canada's government and central bank have achieved what they set out to
> do: injected life back into the economy through stimulus, stoking
> growth in June after 10 consecutive months of decline.
> Photograph by: National Post, National Post

And excuse for "Liberal" corruption spending out of control.  Government is 
pumping billions into money creation which is inflationary towards the real 
end of the recession.  The government can't borrow the shortfall, so it is 
in essense creating inflation which has several sinister advantages for the 
government but not the people.

> Canada's government and central bank have achieved what they set out to
> do: injected life back into the economy through stimulus, stoking
> growth in June after 10 consecutive months of decline. The return to
> growth may be a welcome change, but with the economy still heavily
> dependent on its stimulus addiction, activity in the coming year will
> remain shaky until the private sector can stand on its own two feet.

Actually not.  For the total cost of the increase in debt, we are seeing 
very little benefit.  Take $13 billion put on the taxpayers credit card for 
GM, it went straight south to Wall Street and never to be seen in Canada 
again.

But if $13 billion less was taken from Canadians, the money would have 
circulated in local economies from coast to coast employing Canadians.

> Economists, like Krishen Rangasamy from CIBC World Markets and
> S�bastien Lavoie from Laurentian Bank Securities, said unemployment and
> weak export demand would likely rattle the figures until the end of
> 2010 when the private sector will eventually begin to strengthen.

While some recovery might occur in 2010, it is commonly accepted that it 
will be weak at best.  While some parts of private sector will do OK, others 
will perish in that they can't get their cost structures to a point of 
profitability.

> "[It] will take approximately twice the time for the Canadian economy
> to fully recover from the contraction experienced between the fourth
> quarter of 2008 and the second quarter of 2009." Mr. Lavoie said.

Obviously an optimist.

> Real gross domestic product increased by 0.1% in June, the first
> monthly increase since July 2008, Statistics Canada figures showed
> Monday. The rise signalled the economy had begun to improve as it
> entered the third quarter, the period in which the Bank of Canada and
> most economists predict the recession to have ended.

Actually, it fell.  But government like to BS the numbers.  GDP growth has 
to be larger than real no-BS inflation or in fact the economy is in fact 
recessionary and shrinking.  Government likes to polish the turd on this, 
but the real numbers only suggest the economy isn't tanking at the same rate 
and slowing its decline.

> But the economy has a steep hole to climb out of. Real GDP contracted
> by a worse-than-expected annualized rate of 3.4% in the second quarter,
> while the decline in the first quarter was revised down to 6.1% from
> 5.4%, marking the worst quarterly performance on record.

And inflation, real inflation including all costs has increased for most 
people, lowering the standard of living and ability for people to spend. 
Which also means a quick recovery is very unlikely. And just like a hole in 
the ground, it only takes seconds to fall in but much more time to get out.

> Mr. Rangasamy said higher government spending and improved consumption
> and residential investment offset declines in exports and business
> investment in the month. All these sectors have benefited of late from
> accommodative fiscal and monetary policy; residential investment has
> picked up amid record low interest rates of 0.25%; consumption has been
> underpinned by employment insurance benefits and government spending
> has helped support sectors of the economy.

But the government spending is not sustainable.  Iceland tried this avenue 
and failed.  Other fiat currencies have tried in the past, all have failed 
this course.

> On a quarterly basis, government spending rose 5%, annualized, in the
> second quarter, while government investment in buildings and
> engineering projects increased 4.7% for an 11th consecutive quarter.

I am sure that number is government BS.  How can a government go from a 
balanced budget to $100B defict spending in elss than 2 years and say 5% ?? 
Is the bailout of banks and corporations like GM included?  Probably not as 
the real number is that the government is spending about 25% more and 
financing it on pur debt-money creation.

Because the fact is, governments can't borrow money right now.  Ontario, 
Quebec and BC have bonds floating out there that are unfilled.  Ottawa is 
printing/creating the shortfall saddling yet another generation in Turdeau 
style debt-taxation.

To add salt to the wound, government revenues are down big time.  Less wages 
and less profit in the economy means less revenue.  Creating a massive rift 
in spending versus revenue that is so huge it is guaranteed disaster. 
Government will fail on this as you can't spend your way out of debt.

> "Overall, efforts by the Bank of Canada and governments to mitigate the
> size of the contraction did pay off in 09 Q2," Mr. Lavoie said in a
> note.

Funny.  Wait until September numbers come out and see if this sh!t is worth 
listening too.

> Ryan Brecht, and economist at Action Economics said the government was
> responsible for 1.2% of total GDP in the quarter after adding 0.7% in
> the first quarter. On the other hand, business investment fell 9.7% in
> the period after a 28.1% plunge in the first three months of the year.

Some real numbers.28.1% reduction in business investment has a gloom and 
doom scenario for sure.

> The stimulus has helped the service sector race well ahead of goods-
> producing industries, which are still struggling heavily, noted Douglas
> Porter at BMO Capital Markets. "It's no news flash that goods
> industries are weaker during a downturn, as they are naturally much
> more cyclical," Mr. Porter said. "However, the divergence in 2009 is
> unheard of in the past 30 years."

You might say since the the great depression.

> Mr. Rangasamy said GDP would likely rise about 3% in the third quarter
> and remain firm in the fourth quarter because the economy would likely
> benefit from the need to rebuild inventories both domestically and in
> the United States. However, once these inventories were restocked, the
> pace of growth would likely ease in the first half of next year,
> especially with unemployment on the rise.

My formula is simple, GDP growth has to be more than inflation to say this 
is over.  The rest is hyperbole.  Even if we see 3%, if inflation is 10% 
then in fact there is a value contraction of 7%.

All coming right out of the hide of the shrinking middle class.

Government isn't the solution, big fat taxing governments for statism, 
banks, corporations and corruption is the problem.  If people accept our 
governments operating this way, taxation will be the modern day slavery as 
we on average see a lower standard of living to support it.