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"100 Year Vision": FINANCIAL CAPITAL DEVELOPMENT
REPLACE DEBT-CAPITALISM?
Canadian Economic Transition:
As Canada shrugs off the economic and internal financial shocks of the global Covid Pandemic, it would appear we have unlimited opportunities to rebuild our economic infrastructure in a NEW manner, which will enable far greater new capital formation and accumulation within our middle and lower- income wealth classes.
The following is a"Canadian Economic Capitalism Strategic Overview" and analyses designed to transform our Canadian Economy from "Debt Capitalism" to "Productivity Capitalism".
When our currency cash flow is based upon borrowing and spending on consumables (Debt Capitalism), we are not creating any new capital for our families. Once we can work and get paid enough (and taxed low enough) to be able to invest in money earning imvestments, we will create additional new Family Capital Wealth (Family Productivity Capitalism ).
This Capital, which we earn to invest, becomes our family's and country's Financial Resources. Our economic infrastructure creates and manages this National Financial Resource.
Economic Stagnation:
It appears Canada's currency value, vs. American Currency value, remains a constricting knot in the supply and cost of debt-investment-capital to Canadians. This indicates Canadians are condered less productive than Americans in the productivity of our output, as per our 20-30% discounts to the 'almighty" $USA. Thus, it appears that somehow Canadians have come to believe, "We are worth less than our American brothers and sisters in the foreign exchange markets". Since before WWII, Canadians have lived with foreign ownership of over 60% of Canada's businesses. This means we do not generate much domestic capital and must borrow capital. It is certainly an excellent time to develop our own families and community businesses and services to create and accumulate our own capital.
Throughout the past 50 years, Canada's Central Bank has had little success at establishing "Canadian Currency" as an "International Trade Currency". Clearly, Canadians will be better off by reducing our borrowing by remodelling our economy to upgrade the value of ourselves and our Balance Sheets.
In 1992, American Monetarists cancelled the "Gold Standard" as a form of $USA equity wealth by Central Banks. The alternative monetary theory adaptation is "Fiat Capital" (digitized-currency inside computer networks), as the security for these banks. Since then, Debt Capitalism (Quantitative Easing) has been the source of investment capital for most countries. However, Canada has still remained tied to our store of $USA, and the mood of Wall Street's giant speculative funds, for the daily fluctuating trading value of our $CDN. "Why must American goods cost us so much and ours are cheap to them?" "Why are our resources, especially our non-renewable physical resources, being sold at low values of the $CDN?"
Why are Canada's GNP annual growth rates (less than 5%) so low, in spite of significant immigration, which has likely attributed to nominal GDP productivity increases within our industries and public infrastructure? Imports and exports appear to be fairly static, which also limits our overall GNP expansion.
During the past 50 years, Canada has mostly made domestic rich families much wealthier and increased their share of our national wealth. Canada needs a significantly broader sharing and distribution of our national income.
Going forward, we need to produce more for ourselves and other Canadians each year. We need to become a self-sufficent country,and less dependant upon becoming "recurring revenue" to global computer-dependant corporate oligopoly and cartel networks. These anonymous organizations have been given the power to sue our country! Canadians can't sue Canada and neither should they.
Canadians need to ensure internal investment growth in this century comes from Canadians. We should want to prosper each other by earning and saving our own capital to re-invest in Canada.
Arguements can be truthfully made that our form of capitalism, Debt-Capitalism, has improved the aggregate wealth of our middle classes, but much of this has been due to actual currency inflation and growth in our labour force. It has not improved local market competition and has weakend small enterprises.
In fact, our additional investment capital distribution is still primarily controlled within our tight banking sector, which maintains close to 80% of the mortgage market in by far our largest industry- real estate.
The expansion and valuation of our real estate industry depends upon debt-capital invested in mortgage loans and price-inflation created by local market demand, plus the commerciallization of land by housing, industry, farming and other forms of land development. The purchase and sale of real estate is Canada's most competitive and democratic industry, yet it has been put under investigation by Canada's Competition Bureau. Canada's economy has always been driven by our real estate, but as long as our families' earnings are so heavily taxed, the banks will own more of our real estate (and its' intrinsic-value asset-leverage capacity) than the public.
Our middle class home equity grows with price appreciation. This is created by strong demand for more and better housing. As our home values rise, our home equity percentage rises in real terms.
Note:
(In about 2012, The Economist business magazine published a survey of global property markets and concluded Canadian homes were dangerously inflated. After digging and analyzing their study, it became obvious they were comparing apples to oranges. Our homes and neighbourhoods were compared to other areas of the world without winters and basements, high-end community infrastructure and no rent controls. In fact, Canadian homes were of far greater value, than the other global markets. The Economist has stuck to their irresponsible research methadology, yet our home values have consistently appreciated for the past 10 years!)
During this era of massive global migrations, where Canada has become a top destination, our middle class homeowners accrue more equity from price appreciation. But, this capital wealth is frozen in the land and house we live in. The banks' mortgage loan security appreciates and enables the bank to lower their own debt ratios and thus leverage our properties for capital investments elsewhere. Our accumulating family equity is being used by the banks. not home-owners. We don't even receive discounts on our interest rates on our houesehold debts.
If we want to release this equity, to start or buy a business, we must go into debt, thus we reduce our home equity through our line-of-credit to raise the cash for a start-up with a risky downside.
Consequently, our middle classes have costly, risky or no chance, at starting a new enterprise without jeopardizing their home investment and risk foreclosure by the banks. Canada consistently loses 300,000 businesses a year, destroying many thousands of family operations. In this day and age, we should be able to learn how to manage new businesses more successfully.
Although our real estate market is becoming less competitive, market-domineering competition has destroyed thousands of our other markets' opportunities throughout Canada. The majority of Canadians believe mature and essential products and services markets should be well protected from profiteering. Our financial overseers need to consider profit margins in all our industries and establish financial transparency in oligopolistic markets.
In order to enable widespread investment capital savings in Canada, the middle class needs to be able to afford home ownership costs, plus accumulate significant capital savings. 70% of senior citizen Balance Sheets on retirement lead to zero liquidity within a decade or less. Millions of seniors' only income is government funds. Impoverished seniors is not the image of Canada we want to replicate.
Our very slow-growth economy may sustain existing wealth pools, but it also inhibits a more equitable expansion and distribution of wealth.
Canadian GNP Capital Expansion Productivity:
To design a more equitable "balanced-capital-distribution" economic model, Canada needs to develop wide ranging family and industry productivity growth-sharing values. A greedy "maximize wealth for shareholders and executives" form of capitalism has exploited our families, eliminated competition and slowed Canada's economic growth and prosperity. As we continue to seek ever increasing education for our citizens, we should also open as many doors of opportunity for new enterprises and creative expression as possible.
According to numerous criteria, we are all slaves with masters. Canadians are all responsible to love, respect and treat each other equally under God's eyes. It should be important to Canadians to be generous to each other. This should mean sharing an organization's new wealth in a more equitable and balanced manner.
Of course, there are many ways to achieve this capacity to accumulate capital through self-discipline in Canadian families and individuals. Saving 10% of our income throughout our lives should become a habit for all Canadians. When we learn how to live off 80-90% of our income, our capital savings begin to work for our family.
It will take a generation to educate people on cash flow management, reconstruct taxation throughout our economy, improve family income productivity and adjust industry competitive growth guidelines. Oligopolized markets and industries' require new business models, especially as they become more automated.
In conjunction with economic monetary cash flow restructuring, Canadians will need to develop strategic plans. The purposes, goals and strategies we set for each industry need to be revised. Canada also needs to re-purpose new roles and guidelines for our civil services infrastructures towards more productive allocation of our National Strategic Resources.
The CFP website includes many high level macro-goals and strategies for bringing about these gradual transitions in the deployment of our five National Strategic Resources mix (Human, Physical, Informational, Technological and Financial resources) across Canada. (In reality, our families also manage these same five resources for our lifestyles and livelihoods.)
The CFP's "100 Year Vision for Canada" includes outlines of how we could manage our five National Resources to produce grater productivity across Canada. This material has been freely available to all existing official political parties since 2010. The changes we need can be adopted by any organizations, from a family to our country, but our political parties will have to re-write their disfunctional mandates, if we ever expect to change how Canada's new capital creation is developed through our expanding middle classes.
Canadian Democratic Election Cycles:
Being a "Virtual" political entity, the CFP is free to create very long-term visions and plans for Canadians to think about. This is impossible for our traditional political parties, which must try to get re-elected every 4 years. These short-term planning cycles are certainly a weak point in our democracy. But once we begin to establish long-term goals and strategies, which are supported by the majority of Canadians, the electorate will truly be able to make our politicians accountable for our progress.
This changeover from media-centric, minority-groups agendas elections, to more democratic long-term popular agendas, will certainly unite Canadians, instead of just create more opposing factions within our nation of nations.
Canadians are not strangers to hard work, persistence and patience from our past generations of Debt Capitalism. Regretably, our old paradigm has delivered a level of productivity barely above economic survival for the large majority of Canadians. Presently, personal and family debt burdens are the highest in 160 years. Canadians certainly deserve a better vision of our future.
Canadian Future Plans:
The Global Covid Pandemic has forced most Canadians to focus on others, as well as focus on their past lifestyles. Most agree our past infrastructures are unsuitable for our future. Canadians want to change and work in a more productive local and national economy, where they can be more self-sufficient and free to persue their interests and ambitions.
The CFP has always understood these unfulfilled desires by the majority of citizens. Hopefully, Canadians will make more time to plan our future. Without a plan we will go nowhere except round and round the old mountains. The political powerlessness of individual Canadians is real. It will remain so as long as we totally focus on the demands and plans of many small minorities, which often divide us. Canadians have far more common goals, which need to be understood before we will come together. Then we will begin to treasure our votes and our freedoms to persue our goals and ambitions.
The CFP is a flexible template for managing our country throughout this century. The cost to make our plan is only the time we invest in reading these CFP essays in areas you are interested to study. The CFP seeks no publicity, but it would certainly be appreciated if you felt this perspective of Canada is worth sharing with your friends.
Thank you for reading this Commentary on a revised Capitalism for Canada.
Canada can change, but it will always only begin within each of us, one-at-a-time.
May God bless our nation and its peoples.
Luv ya!
Jim Reid
Founder: CFP- Canadian Federalist Party (Virtual)