I am sure that many of you have heard about the huge tension and perhaps it can be dubbed an all out war between George Soros and Glenn Beck, over whether or not the U.S. is headed for disaster and a financial collapse. As Canadians we have largely ignored this development or don't realize the importance of it. Yet, on Monday January 23, 2012, with the comments made by Bank of Canada Governor Mark Carney, this fight has been officially recognized by our Canadian government.

More After the Break

In a recent interview with CTV's Question Period the Bank of Canada Governor (BofC Gov.) stated, "the nature of the U.S recovery , it's going to take a number of years before they get back to the U.S. that we used to know. In fact, they are not in our opinion ultimately going get back fully to the U.S. we used to know."
Comments that were echoed on Monday by billionaire George Soros. Who is listed as an economic terrorist in many parts of the world, and is considered a hero for such economic terrorism by such anti-western and terrorist groups, as the Chinese Peoples Liberation Army.

Here is what he said when asked about the future outlook of the U.S. economy on Monday: "I am not here to cheer you up. The situation is about as serious and difficult as I've experienced in my career... we are facing an extremely difficult time, comparable in many ways to the 1930s and the great depression. We are now facing a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation - or worse the best case scenario is a deflationary environment, the worst-case scenario is a collapse of the financial system."

Comments that were already made by Glenn Beck, back in 2008, when he stated on April 9, 2008, "nobodies telling you the truth on the economy and I told you that we had a very delicate financial system and that nobody really knew the extent of the problem because everything has changed. The rules have changed [referring to Tarp and the bailouts]. And I said if we have any significant downward pressure on this, this whole thing could collapse. Well, I think you can see how delicate our financial system is and how close we came to collapse, and you know, collapse may still happen. It may not. We may be past it. I don't think we are." To which he added on October 8, 2008, "I understand what we are facing, and what we are facing is a very possible great depression. We're building the framework for an extraordinary long and deep depression."


So why should this matter to Canadians?

It is very simple, as the BofC Gov. pointed out , Canadian businesses in order to survive will need to identify and enter into other emerging markets, such as in Latin America. This is because of the fact that the Canadian economy is an open economy. Meaning that most of its domestic jobs depend on the ability of the nation's businesses to export their manufactured goods to the world and foreign markets. So if the United States is to remain mired in an 18% unofficial unemployment rate this is bad news for Canada, for 73% of Canada's exports are sent to the United States. Making up $1.7 billion in trade per day between us and our southern neighbours, roughly 620 billion a year. Which according to the International Monetary Fund, makes up 47% of Canada's GDP, which is listed at 1,334,143,000,000.

This means that if a financial collapse occurs, resulting in conditions in the U.S. economy that mirror the 1930's, Canada will be hit and hit hard. In fact, as BofC Gov. Mark Carney pointed out on Monday, the Canadian economy has already lost 0.6% of GDP (roughly 10billion dollars) because of the current economic crisis in Europe. Yet, exports to Europe in both merchandise and services only equal around $102.7 billion dollars, 1/6th of the value of trade between Canada and the United States. Although it should be noted that Europe is most likely in even worse shape than the United States is, at this point.

However, these comments by the BofC Gov. should alarm Canadians. Especially, because not only have our own officials now foreshadowed the possibility of a collapse, but both ends of the political spectrum inside the United States are now calling for a collapse. Moreover, if such a collapse did occur, not only would our economy see a much sharper decline than 0.6%, due to the sheer volume of trade between our two nations, but it would mean that nearly all other places around the world would enter into either recessions or depressions. Since, the world uses the U.S. currency as the standard of trade and measurement of value around the world. Meaning that even if Canada wanted to open up new markets to save jobs here, there wouldn't be any markets, even combined, sufficient enough to make up for the loss of the American market.

Meaning the 1930's all over again, not just for the U.S. and most of the world, but also for Canada.

- Corey S.
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