For all those North Americans seeking the Europeanization of the New World, be warned that the "mighty" European Union is not nearly as strong as some of you might once have predicted. The collapsing economies of Greece, Portugal, Italy, and Iceland pose an incredible risk to the otherwise strong economies who now share a common currency. The collapse of the weak may drag the strong into the abyss, whether they like it or not. If the strongest economy of them all, Germany is sufficiently frightened to ditch the Euro and go back to the Mark, then the collapse of the common currency is virtually inevitable. Then suddenly those in Britain who resisted the Euro will look wise indeed.
What we need to brace ourselves for in Canada is the possibility that this fear over the Euro might drag down international markets including Canada. Markets have been steadily rising for a year, and eventually prudence dictates that there will be another retraction, followed by another period of strong growth. We are fortunate that our banking system is incredibly stronger than our European counterparts, but a collapse abroad will have a measurable effect on Canada, regardless of the quality of our Government's economic stewardship.
Will the Germans who paid for unification, pay for a bailout of Greece and the other socialist countries?
ReplyDeleteHow much is too much? I embed a video from IMF today.
California, Quebec has same debt problems.
Why do you think the Europeans pushed for a global carbon exchange prior to Copenhagen or their recent call for a worldwide bank tax to be administered by who?
ReplyDeleteCBC, CTV, Global etc, etc are reporting Canada's deficit will be $10 billion less than Flattery estimated, approximately $20 billion less than the Parliamentary budget officer estimated. Hmmm...Hows that going for ya Iggy?
ReplyDeleteReminds me of something....hmmmm, oh right equalization in Canada. The strong provinces support the weak, Alberta pays for Quebec. This has not worked, the have not provinces have no incentive to become productive.
ReplyDeleteIt's like Greece unions protesting. They do not realize the bank is broke and their account is overdrawn.
The National Post is reporting that the deficit that the deficit will be 13 billion dollars that Flaherty's prediction. They didn't mention Page.
ReplyDelete"The Oracle of Page"
I'm working on that as one of my next few posts.
Okay BlueDog, I looked for Page's forecast, and I found this from the National Post on November 3rd.
ReplyDeleteMr. Page actually forecasts that the total federal deficit will be smaller this year and next than the Conservatives have projected.
The government expects the deficit to reach $55.9-billion this year and $45.3-billion next year, but Mr. Page predicts it will be $54.2-billion this year and $43.1-billion next year.
However, Mr. Page's longer-term forecasts are worse than the government's. In 2013-14, he is predicting a deficit of $19-billion, compared with the projection of $11.2-billion by the Department of Finance.
Read more: http://www.nationalpost.com/story.html?id=2174942#ixzz0mdw5BYi8
What is confusing is that these predictions change several times per year.
Thing is, though, having working in the fed govt., accurate forecasting is almost impossible. The Feds, unlike companies, control few levers, so one can only forecast costs (fairly well) but not revenues. On a small scale, I was s'posed to charge departments for services and my net returns varied very wildly from year to year, so even the past was not a good estimator. My problem: I never knew what the demand level from departments would be, so how to forecast annual revenues? Our small scale estimates always went into the overall predictions, so introduced huge error, which you can appreciate, given your stats background. Some years we were told what we SHOULD make, and my unspoken response was, "ok, whatever, just pick any number you like, as it won't matter - I will make what I can make, based on the cost of services requested and delivered".
ReplyDeleteIt is pretty hard to predict what revenues will be, as taxes and inputs depend on individual and private sector success, which are all subject to international market ebbs and flows. The margin of error is enormous, and yes, changes a lot by quarter. My revenue estimates for the fiscal year were accurate by January, but never in April.
In my view, it would be smarter to not just have "General Revenue" - we know this from managing home and business budgets. I think the estimates are more accurate by the 3rd quarter - before that, the error is huge.
Page's long term forecast is higher because he expects a Liberal Gov. in the near future.
ReplyDeleteThe deficit will fall with a conservative majority.