Comment 81279

By A Smith (anonymous) | Posted September 26, 2012 at 18:05:51 in reply to Comment 81277

This is a chart of Canada's industrial production (not including construction)....

As you can see, in periods of time when gold shoots up (1973-81, 2005-2012)...

... industrial production is slowing down. The price of gold is telling us that the underlying productive capacity of the economy is being lost.

In fact, from Oct 1990, to July 1995, when Bob Rae was "killing" Ontario's economy, Canada's industrial production grew by about 15.9%, an average of 3.16%/yr. In that time period, gold went from about $420CDN/ounce, to $510CDN/ounce and GDP grew by 22.1%. Measured in ounces of gold, Canada's economy still grew by 0.55% in that recession period.

In the six years from Sept 2005, to Oct 2011, industrial production fell an average of 1.39%/yr. Moreover, as measured in ounces of gold, Canada's GDP has fallen by an average of 14.8%/yr. In other words, our productive capacity has slowed considerably.

Even with corporate tax cuts and welfare cuts, our production of real goods and services has slowed considerably. While unemployment has been fairly low, the true goal of an economy is production, NOT hours worked.

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