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Housing

The government has debased our currency and so Canadians are using housing as a form of inflation resistent money. Immigration, regulations, and taxation, then, is simply the fuel thrown on that fire.

There are many minor reasons why housing is more expensive than it should be, such as increased immigration, inflation, regulations, speculation and foreign money. However, if we take into consideration that the housing prices in Canada really started to become dethatched from reality in 2001, and we observe that the only main thing that changed in 2001 is an increase in the money supply, then the conclusion we are forced to draw is that housing prices are astronomically high because of the debasing of our currency, a practice more commonly referred to as inflation.


What has happened is that we have debased our currency to the point where people have no faith in it anymore as a store of value. By, instead, parking their money in the housing market, they are essentially treating land as a form of inflation resistant money. The problem, in other words, is that money in Canada is currently spread across two items, for the purposes of a unit of account and a medium of exchange, Canadians use the dollar. For the purposes of a store of value, on the other hand, people use land.


The problem is actually deceptively simple. All Canada would have to do is introduce a second currency, which would be accepted as legal tender for the purposes of taxation, and to peg this currency to a physical commodity, like gold, silver, or bitcoin. With faith restored in a national currency, the people would move away from using land as a hedge against inflation. A more long term strategy would be to move away from fractional reserve banking to create national currency. Banks should be free to create ledger money if they like, which is what crypto currencies are, but they, and not the nation, must assume the moral hazard of inflating their bank currency.

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