Canada is headed for the latter path, a path which will lead to disaster and will rob Canadians of their hard-earned money.
Can we have everything we want, without paying for it?
Surely, that would be amazing.
Who wouldn’t want that?
Everything in the world, all for free!
At some point, humanity may get close.
We may one day advance so much that we enter a true ‘post-scarcity’ world akin to Star Trek, where they can materialize basically anything they want out of thin air.
But not today.
We aren’t even close to that.
However, we are led by people who increasingly seem to believe that a limited amount of resources is an issue that can be surmounted by the creation and distribution of an unlimited amount of fiat currency.
Put another way, the federal government is moving closer and closer to an embrace of Modern Monetary Theory (MMT).
MMT is the idea that countries like Canada with their own centrally-controlled fiat currencies can never run out of money, and that the Bank of Canada (or other central banks in different nations), should finance whatever amount of spending a government choses.
MMT is wildly popular among statists, since it ‘justifies’ a never-ending expansion of government by ostensibly eliminating the “how are we going to pay for this” critique that arises when new government programs are promoted.
With MMT, the response to that critique becomes “we will pay for it with more printed money!”
MMT also makes it seem that there is no real consequence to all that spending.
“How can we run into debt problems when we just pay off all the debt with more printed money!”
Of course, MMT is simply wishful thinking covered up with what seems to be a logical and academic foundation.
Yet, in reality, it’s nothing more than another way for people to retreat into a comforting denial of reality, putting off the day of reckoning.
MMT isn’t anything new
It seems that old ideas never really die away, they just put on new clothes.
And MMT is new clothing on the same historical attempts by desperate governments to print their way out of deeper financial issues.
It’s been seen over and over again, with the most famous examples being the hyperinflations seen in the Weimar Republic, Zimbabwe, and most recently, in Venezuela.
In all instances, governments there fell into the trap of imagining that worthless pieces of paper with numbers on them could somehow generate real wealth.
Obviously, it doesn’t work.
If you’re on an isolated island with 3 people, and you have 10 pounds of food and two seashells (assuming everyone has agreed to use seashells as a store of value) to trade with someone else who has two planks, finding more seashells won’t increase the number of planks or food on the island.
More seashells wouldn’t generate any wealth or any new resources. If anything, all that would happen would be for people to demand more seashells in any trade.
I use this example because, though it may seem absurd, that isolated island is a microcosm of our entire planet, or a country. You can create all the new ‘money’ you want, but that can’t generate any real wealth. Instead, you simply have more ‘money’ chasing the same amount of goods.
‘Inflation’ can be a misnomer
People are used to talking about inflation in terms of ‘rising prices.’
And certainly, that’s what it feels like.
But in reality, what’s happening is your money is getting robbed of value.
And while that value is itself arbitrary – really only existing because we all agree on it – that ‘arbitrary value’ can be weakened, and ultimately destroyed when people start to feel that their ‘money’ is worthless.
That’s what MMT will cause.
The monetary system is supposed to be disconnected & protected from the short-term whims of politicians.
This can be accomplished in one of two ways:
Either a government embraces ‘sound money,’ meaning money linked to something that is scarce and has value that cannot be directly manipulated, or citizens of a country embrace alternatives to fiat currency – such as cryptocurrencies like bitcoin – to such an extent that governments lose much of their power.
This of course is why statists fear cryptocurrency, as they empower individuals rather than the state.
Thus, in many ways, the renewed interest in Modern Monetary Theory represents the attempt by statists to push back against the expansion of financial freedom that cryptocurrency offers.
With MMT, they can exert an immense amount of influence, keeping people desperate and dependent on the state by expanding the role of the state while making it more and more difficult for people to achieve financial independence.
The elitist narrative
It’s no surprise that the elitist narrative is coalescing around MMT at this moment, as it serves as the perfect vehicle to expand government power and induce inflation.
Note how governments are trying to get us to accept a lower standard of living (they claim it’s to save the planet), but want us to be unable to really grasp what is happening.
With MMT, they can flood the country with fiat currency, making people think they have more actual purchasing power, even as that money doesn’t go as far is it once did.
It works for a while, until it doesn’t, and then disaster hits.
Return to sound money
Many individual Canadians, and people around the world, are returning to sound money in the form of cryptocurrencies. This represents people trading in their fiat currency for something that has scarcity, and can’t be controlled by politicians.
Sadly, the destruction of faith in the regular money supply that MMT will cause will still hurt many Canadians.
That is why the best scenario is (as more and more Canadians embrace cryptocurrencies), for our nation to also return to sound money.
Whether through linking our currency to something that is scarce, or whether through imposing strict limits on the yearly expansion of the money supply, it is essential that we make sound money the top priority in Canadian monetary policy.
The longer we go without sound money, the more the savings and hard-earned wages of Canadians will be stolen away from them by manipulative and power hungry politicians.