Trudeau Breaks Campaign Promises: Plans to Spend, Spend, Spend! - Nathan McDonald

February 24, 2016

Justin Trudeau rode in on a white horse: a new champion for the people, making promises as so many politicians do, telling the electors that they can have their cake and eat it too! It is a grand concept and one that has been signed on to countless times in the past. Three such promises that he made to ease the minds of the uncertain were as follows:

1. Annual deficits of no more than C$10 billion.
2. Balancing the budget in four years.
3. Reducing the debt-to-GDP ratio every year.

Well, guess what? You can throw those promises in the trash, alongside just about every other promise politicians have made over the centuries. As is typical, now that Trudeau has been elected, he has decided to shrug aside those promises – promises that might be difficult to maintain and that might cause discomfort for the masses – an action that could result in him not getting reelected four years down the road.

Yet, not only is he completely and utterly saying he won't reach or even attempt to reach these promises, no – he has gone completely the opposite direction and revved up the printing presses to full speed ahead!

As we have written about extensively here on the Sprott Money Blog, the falling oil prices have hit Canada especially hard, resulting in mass layoffs and a tanking GDP.

This has given Trudeau the opportunity he was looking for, the opportunity to put those printing presses in overdrive and to borrow, borrow and borrow. Oh, and let's not forget the most important part: spend, spend, spend!

We are not talking about some drop in the bucket amount of spending, no; Canada's Finance Minister Bill Morneau has stated that Canada plans on running a deficit of roughly C$30 billion ($22 billion) in the fiscal year that begins on April 1st.

What is even sadder is that this announcement barely even caused the Canadian markets to budge, meaning that the effect of money printing simply doesn't have the allure it once had – something that we have pointed out recently and in the past.

You would think that Trudeau and his government officials would have learned from the ongoing money printing fiasco that is unfolding in the United States via the Federal Reserves – money printing that dwarfs what Canada has the ability to do and still has proven utterly useless!

At the end of the day, Canada will learn the same lesson that many Central Bankers are just now starting to realize, but have no choice but to continue on, given the fact that they have now fallen over the edge of the cliff. Canada will learn that a problem created by easy money policies and excess credit cannot be fixed by more easy money and more credit.

Keep digging that hole Trudeau, and I'll keep stacking gold and silver. Good luck.