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Written by Réjean J. Boudreau, trustee

To achieve that goal, a program would be set up to entice private investors with low-cost loans provided by the Federal Deposit Insurance Corporation and the Federal Reserve. The US government itself would shoulder the bulk of the risk. In other words, the US is creating new debt to replace the old one. What is the risk for us, this side of the fence?

By increasing their national debt, the Americans are transferring a big chunk of it to the rest of the world. The means of transfer are various. A few examples: US treasury bonds, import taxes, etc. In Canada, we just have to think of the lumber problem. Even if the US lost in International Court, they continue to apply their taxes to our lumber. The entire industry was at risk for insolvency, and even bankruptcy. We even had to settle at a loss with them. For now, they are so busy jump-starting their economy that they will not bother with us. But in the near future, someone will have to pay those massive debts. And guess what, we will be the friendly neighbour again !!!

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