Canadian Fiscal Policy

[whatnext]

Originally Posted by SteelTown

I use Newton.co, which is a Canadian crypto trading platform. You can trade your crypto assets via Interac e-transfer, which Canadians sure do love.

So, tell me more about this cryptocoin....

[Build.It]

Originally Posted by lio45

Truenorth is totally correct that the main appeal of Bitcoin is to evade taxes and sanctions, and finance crimes. The untraceability/anonymity is THE salient feature of crypto that makes it noteworthy and useful -- to criminals. Otherwise, as acottawa points out, they're just virtual Dutch tulip bulbs.

Also, I'm going to warn you to refrain from insulting him as he really did not say anything incorrect there; he's a knowledgeable forumer (and an engineer; not like he's clueless about tech) and pretty much never talks through his hat. (At least you did edit your post this morning, so, thanks for that.)

The criminal activity narrative has been proven to be false. The share of crypto transactions involved in illicit activities has been found to be less than that in the broader economy.
https://www.forbes.com/sites/haileyl...h=4f140e173432
https://en.wikipedia.org/wiki/Cryptocurrency_and_crime

Also, Bitcoin isn't anonymous. It is a public ledger that anyone can access at anytime. It doesn't list your name, but it does show IP addresses which can and do get traced regularly. Police traced bitcoin donations back to individuals during the trucker convoy for example. Police have also seized Bitcoin.

Another false statement that was made was that "Mt Gox is proof that the network can get hacked". This is also factually incorrect. Mt Gox was an exchange that got hacked (they basically stored bitcoin on others' behalf). The Bitcoin network itself did not get hacked as was claimed, just Mt Gox's various wallets got hacked due to poor password protection.
https://www.investopedia.com/terms/m/mt-gox.asp

To hack the bitcoin network would require you to rewrite transactions on the public ledger, of which separate duplicate copies are stored on computers all over the world. The network is designed so that 50% of the network must agree on all the transactions on the ledger. If one or a few of the ledgers don't align with the 50%, then they are immediately known to be false.

So the only way to hack to hack the bitcoin network would be to control more than 50% of the computing power used for mining. As of November, the network used as much electricity as the entire country of Ukraine. So to hack the network you must have as much electricity as half of Ukraine, and then direct all of it to making new ledgers with duplications of transactions, so that it outweighs all the legitimate ledgers.

This would be insanely expensive to do, and it would also immediately be noticed, which would result in either the crash of the network (resulting in the value of Bitcoin to drop to zero), or a separate ledger being created for the legitimate one. In either case there would be no return on that investment, which is why there is no incentive to hack the network.

When people say the network is the most secure in the world, this is what they mean. And the larger the network grows (and the more computer power gets added), the more difficult it gets to hack the network. I've heard that quantum computing might be the technology that makes the Bitcoin network hackable. We will see.

Crypto exchanges and wallets are a different story though. When you make a bitcoin transaction you get a private passkey, which is confidential, and should not be shared with anyone. It is the failure of passkey storage which results in people getting hacked.

For the record, I am also an engineer and have spent close to a thousand hours studying Bitcoin and Blockchain technology. I also have nothing to gain by speaking about Bitcoin as I don't own any myself (I don't make speculative investments, and view Bitcoin as a storehold of wealth, rather than a wealth creation device, so I'd rather invest money back into my business). The only purpose of my post was to correct false statements - my tone could have been more mature I'll admit.

The likely longterm use case for Bitcoin isn't as a currency, as it is likely to be too deflationary against technology. It is capped at 21M bitcoin, a sizeable chunk gets lost every year, and the world's population grows every year - so the bitcoin per person shrinks every year = currency deflation, which makes it impractical as a currency in the longrun, in my opinion. However it is an excellent storehold of wealth, and it can be transferred to anyone in the world with incredible ease, so it is still a good asset to own as part of a broader portfolio.

[acottawa]

Originally Posted by Build.It

Crypto exchanges and wallets are a different story though. When you make a bitcoin transaction you get a private passkey, which is confidential, and should not be shared with anyone. It is the failure of passkey storage which results in people getting hacked.

I don't disagree that the technology, in theory, is secure (and you obviously know way more about the technology than I do), but this is the problem. For retail investors (or savers) they need to deal with exchanges that allow them to convert their real money to bitcoin and vice versa. These exchanges are often poorly run, affiliated with organized crime, use insufficient cyber security, etc.

There is also a secondary problem that these exchanges don't have sufficient funds in real currency to cover withdrawals if there is a high demand for withdrawals, so many of them operate like Ponzi schemes which collapse when the price of bitcoin falls.

[Build.It]

Originally Posted by acottawa

I don't disagree that the technology, in theory, is secure (and you obviously know way more about the technology than I do), but this is the problem. For retail investors (or savers) they need to deal with exchanges that allow them to convert their real money to bitcoin and vice versa. These exchanges are often poorly run, affiliated with organized crime, use insufficient cyber security, etc.

There is also a secondary problem that these exchanges don't have sufficient funds in real currency to cover withdrawals if there is a high demand for withdrawals, so many of them operate like Ponzi schemes which collapse when the price of bitcoin falls.

The technology is still a while away from being usable by average joes. Storage of the keys is the biggest issue right now. Your option is to either save it on an exchange, or on your computer, or on a USB drive (a bitcoin cold storage wallet is effectively this), or write it down somewhere. None of these are appealing to me, which is the other reason why I don't personally own any Bitcoin. If we had properly insured banks who could securely store it for us, then that would solve this issue, but banks in Canada aren't touching Bitcoin until there is a regulation of the industry (reserve requirements, insurance requirements, storage requirements).

[Truenorth00]

Originally Posted by Build.It

The technology is still a while away from being usable by average joes.

Which is exactly why it's highly irresponsible for a politician to be shilling it.

The counterarguments you're putting forward are largely irrelevant to the general public. If my seventy something dad loses money in an exchange or a wallet, will it matter that it wasn't the Blockchain? I may not have been clear. But this was my point. I have zero issues with the tech. Blockchain can be revolutionary for certain applications. But as a safe investment to hedge against inflation? Very scammy. And Poilievre did it to appeal to cryptobros like you. Which is actually kinda bizarre, cause he can and should take votes like yours for granted.

[Build.It]

Which is exactly why it's highly irresponsible for a politician to be shilling it.

If he actually did make give investment advice, and/or did say Bitcoin is a safe investment, then I'd agree with you. However he did not.

One final time: Pierre Poilievre did not give any investment advice, and he never said it was a safe investment. (If I'm mistaken on this, please provide a source.)

There are plenty of CBC and CTV articles saying that's what he did, but conveniently none of the ones I saw use any direct quotes from Poilievre where he made the claims that they tell people he did.

If my seventy something dad loses money in an exchange or a wallet, will it matter that it wasn't the Blockchain?

I don't think anyone is claiming that it is safe. You have to know what you're doing. If your 70 year-old father can't keep his facebook or email account secure, then he definitely shouldn't be buying crypto. I doubt anyone would dispute this.

I have zero issues with the tech. Blockchain can be revolutionary for certain applications. But as a safe investment to hedge against inflation? Very scammy.

We need to separate "safe investment" from "hedge against inflation", as these are two separate things.

I already addressed the "safe investment" part above.

Regarding it being a "hedge against inflation", that is a different matter, and over the longhaul has proven to be true. Bitcoin has outperformed the dollar over the past 5 years. It's volatile as hell, but as long as you held on and didn't panic sell, you'd have beaten inflation. I look forward to seeing how a recession affects this - ie. if the stock market and the economy tank, will Bitcoin tank as well? We will see.

[Build.It]

On a separate matter, in 2024 the Federal Government is expected to spend 10.2% of its total revenues on interest payments.

https://www.fraserinstitute.org/site...dians-2024.pdf

[WarrenC12]

Originally Posted by Build.It

On a separate matter, in 2024 the Federal Government is expected to spend 10.2% of its total revenues on interest payments.

https://www.fraserinstitute.org/site...dians-2024.pdf

I'll trust the budget (coming in April) over the Fraser Institute any day of the week. Twice on Sundays.

[Changing City]

Originally Posted by Build.It

On a separate matter, in 2024 the Federal Government is expected to spend 10.2% of its total revenues on interest payments.

https://www.fraserinstitute.org/site...dians-2024.pdf

You know that's historically quite a low proportion?



[Scotiabank]

[acottawa]

Originally Posted by Changing City

You know that's historically quite a low proportion?



[Scotiabank]

That’s 46 billion dollars a year (half directly attributable to Trudeau). That’s 30 “National Plarmacare” plans we are pissing away every year.

[Changing City]

Originally Posted by acottawa

That’s 46 billion dollars a year (half directly attributable to Trudeau). That’s 30 “National Plarmacare” plans we are pissing away every year.

That's 46 billion dollars a year that the government are paying back. They spent a lot of money in 2020 and 2021 because there was a world-wide pandemic and an economic melt down. Canada didn't have unique immunity, and it responded like pretty much every other country. "Debt increases are particularly striking in advanced economies, where public debt rose from around 70 percent of GDP, in 2007, to 124 percent of GDP, in 2020." [IMF]. Canada's debt to GDP ratio rose too, from 53.9% to 73.7% in one year - so not as much as many countries. It's back down to 66.3% in 2023 [CEIC].

Assuming interest rates continue to fall, and the economy doesn't significantly falter, the government debt as both a % of revenue, and as a % of GDP, should be on a downward trend over the next year.

[1overcosc]

I find it ironic that it's libertarians that are pushing crypto when crypto has the potential to be one of the biggest privacy violations of all time. Complaining about government & corporations tracking us while pushing technology that would make every transaction easily trackable is... well it's something.

You really want a libertarian solution to money? Try cash.

[urbandreamer]

Everyone I've met into Crypto are drug dealers, criminals, realtors, fork lift drivers and generally untrustworthy people.

[WarrenC12]

Originally Posted by 1overcosc

I find it ironic that it's libertarians that are pushing crypto when crypto has the potential to be one of the biggest privacy violations of all time. Complaining about government & corporations tracking us while pushing technology that would make every transaction easily trackable is... well it's something.

You really want a libertarian solution to money? Try cash.

More specifically gold if you want that "inflation hedge". Notably the return on gold has been pretty shitty over the past few decades.

[J81]

Originally Posted by urbandreamer

Everyone I've met into Crypto are drug dealers, criminals, realtors, fork lift drivers and generally untrustworthy people.

Quite the group of friends you keep!

[Build.It]

Those damn forklift drivers I tells ya

[Build.It]

Originally Posted by Changing City

That's 46 billion dollars a year that the government are paying back. They spent a lot of money in 2020 and 2021 because there was a world-wide pandemic and an economic melt down. Canada didn't have unique immunity, and it responded like pretty much every other country. "Debt increases are particularly striking in advanced economies, where public debt rose from around 70 percent of GDP, in 2007, to 124 percent of GDP, in 2020." [IMF]. Canada's debt to GDP ratio rose too, from 53.9% to 73.7% in one year - so not as much as many countries. It's back down to 66.3% in 2023 [CEIC].

Assuming interest rates continue to fall, and the economy doesn't significantly falter, the government debt as both a % of revenue, and as a % of GDP, should be on a downward trend over the next year.

$46B is just the interest. The principal is much larger than this.

AFAIK the ~70% number for our debt to GDP only accounts for the federal debt and does not include provincial debt. If our provincial debt load is included that number would be roughly double. Other advanced countries tend to not have as much debt at the provincial levels so most of their debt is concentrated at the federal level, making their balance sheets appear worse than ours when in reality that is not necessarily the case.

Also looks like you missed the CEIC link, but I was able to find it.
https://www.ceicdata.com/en/indicato...of-nominal-gdp

EDIT: I was mistaken, it does account for provincial debt as well. However our net debt includes assets held by CPP and QPP. Gross debt removes these and by that measure Canada falls to 20th out of 29 countries.
https://www.fraserinstitute.org/arti...ttawa-tells-us

[ssiguy]

When I saw this thread title I was very shocked............I didn't know Canada had a fiscal policy.

[casper]

Originally Posted by ssiguy

When I saw this thread title I was very shocked............I didn't know Canada had a fiscal policy.

We have had a fairly successful fiscal policy.

The outcomes have been impressive. We emerged from COVID without being part of a global depression.

Lower inflation than the US, lower interest rates than the US. Similar standing relative to our peers.

While some would say we are in a recession, it is one with low unemployment rates and a growing population base. A real positive.

Canadian dollar is still far to heavily tied to the price of oil. Hopefully we are able to find ways of growing our economy in the non-oil sector.

[Build.It]

Originally Posted by casper

We emerged from COVID without being part of a global depression.

I'm gonna go on a limb and say these people would disagree with that statement: