Things are getting better in Canada, compared to almost every place else.
According to Niall Ferguson, here's why:
That's Canada at the bottom, trending downward. Our debt is falling relative to GDP - unlike virtually everybody else! (Australia is also doing relatively well, but it's not on this chart.)Why?
1. We are a small country that leads the world in commodity production - mining, timber, agriculture. We have it all - including 60% of all the mining companies in the world.
2. Paul Martin (our former Liberal Prime Minister and Finance Minister) rationalized government expenditures and brought the country into surplus. He ran Canada like a business. (He was followed by an imprudent - and impudent - fellow named Stephen Harper who has gotten Canada into trouble by disenfranchising senior citizens and other savers/small investors. Fortunately, Mr. Harper has just lost his job!)
3. What Canada produces - raw materials - is in demand from the rapidly growing Asian economies. Commodities have been in a decade-long secular bull market, and that market appears set to continue into the present (upcoming) decade.
4. Both the Canadian government and Canadian banks are relatively conservative. We tend to avoid bubbles and manias. We keep speculators on a short leash.
5. We have affordable, publicly-funded health care and social insurance.
Canada is not perfect, but, compared to almost every place else, it might as well be. It doesn't get much better than this in the real world._
Good one Laurence!
ReplyDeleteMaintaining a huge export to growing Asian economies will be very important if we want to continue in this trend. Hopefully, we will be able to beat the competition here. Another question rises,for how long will we be able to avoid speculators creating bubbles ?
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