Canadians are suffering from decades of poor decisions made by both parties that have formed governments, writes Peter Watson.
Financially, we are suffering from decades of poor decisions made by both parties that have formed a government. We continue to spend far more than the federal government collects every year.
Overspending was framed as the government “investing” in Canadians. In a business reality, overspending means a company goes broke and then disappears.
Our government leaders have avoided difficult decisions. So, should we suddenly believe that fiscally prudent decisions will now be made? Who could possibly keep Canada Post operating when many reports say it loses $10 million per day? Most Canadians now fully understand our postal delivery business model is obsolete.
How could we imagine “putting all our eggs in one basket” by concentrating our trade with one country that happened to share our border was a good idea?
A basic principle of investing is diversification.
Our main risk is not from the U.S.; it is from our creditors. They lent us the many billions of dollars that we need to support our failing economy. When creditors rethink the risk, they might not lend us money, or they will dramatically increase the interest rate.
I believe strongly in Canada and predict better times ahead. But I am certain the transition to better times will be only after a financial meltdown and a restructuring of how we are governed.
Peter Watson, of Watson Investments MBA, CFP®, R.F.P., CIM®, FCSI offers a weekly financial planning column, Dollars & Sense. He can be contacted through www.watsoninvestments.com.
