Short of updates, I figured I might post something to see if anyone reading might have some ideas on a curious situation I've heard of. Now, I don't normally blog much about work, and this isn't technically in my portfolio anyway, but I have heard that some gold mines have a dilemma right now. As I type, the price of gold is at 936.63 US. This should be good news for gold mining companies, but instead I hear that while they are digging it out of the ground, no one is buying at the price it's being sold at. As a commodity, this shouldn't be the case. The price should adjust to what people will pay.
Is the price being kept artificially high? Washington seems unable to print money fast enough to worm its way out of this catastrophe, and so, with the US dollar inevitably set to implode, is there a chance we could see a return to the gold standard? Most of this current Depression is happening because credit is drying up around the world but so much of our economy is already based on existing debt and credit. It's not a matter of being penniless. In a sense, we're even running out of pretend money. Could a move back to something "real" be in the works? Could chosen people have the ability keep the price high in anticipation?
One of the ways that the government reduces bad economic news, as we know, is to sweep a few of the problems under the statistical rug. Yesterday's job loss stats release showed a drop of 34,400 jobs in December. Most of those losses were in the construction sector and manufacturing jobs actually registered a slight increase. Headlines announcing the report have stated the loss was worse than economists predicted.
In fact, it's even more accurate to say that it's worse than economists report. With these reports, massive job loss of permanent, salaried positions, is tempered by balancing them against the increase in part time work. It's really apples and oranges but it makes the stats look better. What's really going to sink the ship will be next month when even part time jobs disappear from the figures, with many of the newly created ones included in December being Christmas seasonal.
Nonetheless, if economists are shocked at a loss of 34,400 jobs, perhaps we had better get new economists. The real figures would be presumably much worse if you actually counted everyone who was out of a job as unemployed. The suggestion that someone who has run out of their Employment Insurance stamps is no longer jobless is ridiculous and only serves to justify the government sending them to the bin that says they're no longer looking for work, so the beancounters and politicians can take them off the numbers.
The end result is that we have 6.6% unemployement in Canada which is a far cry from reporting the 20-25% levels that set in during the Great Depression.
Reading today, I came cross a story on Reuters that looks at this from the American perspective [HT:Piglipstick]. Perhaps we can assume the discrepancy in Canada would be similar. Their reported unemployment rate is very close to ours at 6.7% right now. According to the writer Pedro Nicolaci da Costa, on Reuters, the real unemployment rate if every worker out of a job was counted would be around 16.5% already in the States.
In other words, we're just about on the cusp of Depression now. What makes matters worse, however, is that in the '30s, four out of five people lived in rural areas where there was a better chance of at least producing some of their own food. Now we're all citified and at the mercy of complex logistics systems to bring us food from all around the world. Shut down things for a couple of days in a major city like Toronto and the shelves go bare in stores and we're rationing.
The other danger is crime rate. After a few years of the Dirty Thirties, the government went to great lengths to get young men out of the city and into relief camps to work. They were scared of crime, just as they were scared of a resurgence of Communist sympathies that could destabilize the nation politically. Well, this time we're not wasting a minute. The upcoming Federal budget should be sinking a tonne of money into infrastructure spending in exactly the same way.
So there you have it. Great Depression 2.0 on our doorstep and knocking to come in. I think now is a good time for everyone to have a look at Barry Broadfoot's book. "Ten Lost Years" which is a collection of Depression-era stories recorded from conversations with ordinary Canadians who lived through the times. It was published in 1973 and became common reading during the recession of the late seventies, and it's probably not a bad thing to pick up now again. I've been reading it since the holidays and it provides a lot to ponder in terms of how today's Canadians might fare.
What good is a blog if you can't stop in and post some doom and gloom speculation once in a while. Watching the Big Three automakers demanding handouts so they can keep making SUVs that people can no longer afford is one thing, but other things are going on around the world keeps some of my alarm bells jingling.
One thing I mentioned in September was China's factory slow downs and my worry that should their economic growth falter, the result could be social turmoil. A story recently pubished via the New Republic elaborates on that concern quite effectively. [HT: 1913 Intel]
Something else that showed up in today's news, however, was that a high-level defence official in Estonia has been operating as a Russian spy and leaking sensitive NATO information to Russia. To what extent, it's unknown, but since he was also responsible for issuing security clearances in that country, any number of Russian sleeper agents could now be lurking there and passing on even more secrets.
This is on top of the story during the war in Georgia, that Georgian special forces agents were captured by Russia with information including NATO's GPS codes on them. Russia, it would seem, is in possession of a lot of once-in-a-lifetime intelligence that would give them a tremendous edge were they to perhaps take advantage of the current economic situation to kick off a major attack on the West, the likes of which they've been hinting at a lot lately.
The situation is illuminating some strategic disadvantages in current NATO policy. Essentially you now have an organization that has been expanded to act as an alternative to United Nations forces (e.g. Afghanistan) but now includes, or is set to include, countries that have never dipped a foot in the Atlantic. Furthermore, these countries of which many are former soviet republics, may have been a great way to rub in the insult of Russia's diminished influence, by luring them to our side, but it's obvious from news like today's that Russia still has many loyal eyes and ears riddled throughout their former stomping grounds -- enough to be a significant security breach in light of their inclusion in NATO's inner circle. The West may have swallowed a slow-acting poison in bring them into our security arrangements so soon.
At the very least, with Russia reasserting itself, they're a new source for tension and the Bear is pushing back. That happened with Georgia and there's a lingering fear it could come to Ukraine, which is of even greater strategic importance to a reinvigourated Soviet spectrum. Poland is not escaping their sights either, over the issue of the US missile defence shield, and now will be facing Russian missiles newly deployed across their border. Russia is threatening to pull out of the Conventional Forces in Europe agreement over it and that's likely just a start.
Bush's preemptive strike doctrine is something else that they want to seize and claim as their own, to defend both themselves and their friends. The problem is that they are cozying up to new allies by signing arms deals with countries like Venezuela and Syria (as well as partaking in such congenial activities as naval visits to their ports), and investing heavily in Iran. It's only a matter of time before Russia seeks to station their own missiles in those countries. After the US made a strike inside Syria last month, I was surprised they didn't play that card then.
Perhaps there will be a grace period for the new US president but I wouldn't count on it. The fear is that a Depression is coming and conventional wisdom is that it takes a war to end a Depression. Maybe the automakers aren't getting an easy ride toward a handout in Congress but the Pentagon might be more cooperative. Instead of making SUVs, the Big Three could be in line for armoured tank and HUMVEE contracts soon.
It hardly seems like there's a need to label the push for a North American Union as a conspiracy theory anymore. On Saturday and again today on The Galloping Beaver, one of the blogs I have on my RSS reader, they've linked to stories in the Globe & Mail lauding that idea, or at least suggesting that Canadians are in some form of infatuation with it. They point to John Ibbitson's piece last Wednesday and a questionable poll cited in today's paper that suggests Canadians want to embrace an Obama presidency and then express our affection through closer political union.
While the Globe & Mail lists the source as the Canadian Defence and Foreign Affairs Institute which it describes as a "Calgary-based institute", Galloping Beaver goes one step further to point out that said institute is funded by the Canadian Council of Chief Executives and American arms manufacturer General Dynamics. Following the links on Nationmaster, the CCCE, in turn, was formerly known as the Business Council on National Issues and was a leading advocate for Free Trade during the Mulroney regime. Nationmaster also adds the following interesting note: "Statistics Canada shows that in 2001 just 4% of all Canadian businesses accounted for 82% of exports. The majority of those 4% are members of the CCCE."
[And of course, the Globe & Mail is owned by Bell just like CTV -- the station that gives "bluescreen technology" a whole different meaning in their coverage of the Tory party -- so you can imagine what I think of their impartiality on a good day. But to suggest that 62% of Canadians actually want us to hitch our cart completely to that apocalyptic economic wormhole south of us is beyond believable and they should be ashamed.]
I'm getting caught up on some reading over the weekend and made a comment on a friend of mine's blog, One-sided Argument. El Cid, the author, is bully on the Canadian banking system and despite my usual doom and gloom, I think he's probably right. The fact that Harper is not engaging in a bail out for the banks in Canada is a good sign that ours are stable. However, I'm still of the mind that this election call was rushed due to the knowledge that things are going to get pretty tight soon. Best try to get re-elected now.
One of the biggest hits to Canada may come when the U.S. dollar plunges, which is going to be inevitable now that Washington is absorbing the debt of Wall Street. However, according Reuters, we've been weening ourselves off reliance on the greenback in favour of Euros, while our exposure to Fannie May and Freddie Mac is limited to 6% of reserves.
On the upside, countries with greater exposure may lose big too, keeping things at least partly level. U.S. debt is everyone's debt these days. China has expressed concern over what amounts to the U.S. printing money to cover the losses (see a post on Piglipstick, for example.) If my meagre economic understanding is right, this would sink the dollar but theoretically home values would remain numerically constant. Your house would still be worth $250,000 U.S., but $250,000 U.S. would be worth a lot less.
There's a lot of fear that this situation would solidify China's dominance but I think they're going to have more problems when their major market implodes. More recalls of Chinese products isn't helping either. China needs to sustain a high rate of growth to keep its awakening citizens happy. On top of the prospect of decreased exports, they could be faced with an exodus of foreign firms soon. Not only is trade protectionism becoming an election issue in the U.S. but those Chinese who are demanding better lives for themselves will be buoyed when the government there forces the creation of labour unions in international corporations doing business in China. While their economy has been on fire for the past decade, this might start to starve the oxygen out of it.
And if the seriousness of things still hasn't sunk in, the Marmot's Hole had a few choice quotes on the matter from the American press.
UPDATE: Maybe it's just me being at home alone tonight, but it sure feels like somethings up. The moon was deep red over Toronto when it came up, and now the CBC is showing "The Grapes of Wrath" as their midnight movie. Real funny, guys. We're doomed.
Not long ago, the New Brunswick government launched a program to lure young herring chokers back to the Picture Province with the slogan: "Be Here Now", done up with periods separating the words to make it look like a hip and happening IP address, which apparently appeals to young people and blinds them to the fact this whole campaign is being done in lieu of actually creating jobs for them to return to, or helping young N.B. workers to attain a liveable wage.
Judging by a photo from the Torontoist's "Daily Photo", at least one displaced New Brunswicker must have gotten the message, though I'm not sure that person is planning to move back. (Click the link or the photo for the full caption.)
I admit that since I moved out of the province, I've been a bit lazy in following all the New Brunswick newspapers, but I still keep Dan Benoit's "Streetwise" column on my RSS reader and, often, Dan posts his column before it hits the Miramichi Leader section of CanadaEast anyway.
Now, as the two of us grow older at roughly the same pace, it's nice to see he shares such bitterness over the decline of society as I do, as shown in his recent column "Whatever Happened to Quality?" But one of the torpedoes he fires across the bow of the modernity, is this:
"The powers-that-be around the globe are pushing for biofuel every chance they get.
"But these politicians don’t seem to care that the millions of tons of corn used every year to make this biofuel could feed millions of people in the world’s poorest countries.
"Nor do they seem to care that it takes more energy to make biofuel than you actually get out of it.
"All they seem to care about is making people believe they’re doing great things, and since most of the world seems to think (wrongly) that biofuel will save the world, they’re pushing biofuel, come Hell or high water, two things I think we’re gonna see before we’re all said and done."
There's nothing new to touting Ethanol as a miracle product, just how it's packaged. In the twenties, Ethanol was viewed as a positive additive that would help moderate gasoline burning and create a smoother ride. I suppose, when considering cars in the twenties, a smoother ride was probably as important then as gas consumption and fossil-fuel conservation are becoming today. What killed ethanol, then, was public opinion as prohibitionists entered the scene and went after anything alcohol-based with an aim to drive it out. Something in the back of my mind makes me think that such lunacy is behind this tar and branding of ethanol today.
This ethanol that was supposed to be so good for your engine is now being questioned by consumers. There are the arguments that it reduces engine performance. There's even a lawsuit underway in California by a boater who learned that while 5.7% Ethanol may not harm his engine, it's killer on a fibreglass gas tank.
But the biggest scare is over food prices and availability, as Dan states. It's being argued that the move toward Ethanol-added gasoline is causing farmers to switch from selling their corn for food to selling it for biofuel production, despite the claim that biofuel ends up providing less energy than it takes to produce.
It's ironic, because the main reason we had so much corn to begin with was because of government policies to lower food prices. While corn-based biofuel is much more expensive to produce than gas, it's a lot cheaper to make high fructose corn syrup than it is to import white sugar. This is especially true when that white sugar comes from all those Caribbean and South American countries that the United States loves to place high tariffs on.
I remember hearing about this on the CBC a few years ago, and the source may have been a story in the New York Times by Michael Pollan, entitled, "The Way We Live Now: 10-12-03; The (Agri)Cultural Contradictions Of Obesity" in which he cites some statistics that show not only has sugar been replaced, but corn production has ramped up so much that new destinations for corn had to be found. This resulted in corn syrup showing up in more and more food since the 1970s and the result was an increase of more than 10% in our average calorie intake.
It's all politics. Corn is the most heavily subsidized crop in the United States, with over $51 billion in subsidies going to them since 1995. That means we're already up to our ears in ears of corn. On top of that, the domestic sugar subsidy in the U.S. keeps the price of regular sugar high, while cheaper foreign sugar, as I mentioned, is held in check by high tariffs.
According to the CATO institute, this has led some manufacturers to open up in Canada where they get cheaper sugar prices, so it's not all bad for us, here in the Great White Sugar North.
The pessimist in me has to suspect this flap over Ethanol production raising food prices is just some tentacle of the Bush government's War on the Environment. But maybe, there could be a nefarious silver lining. In the NYT piece, the author points out that "we have been here before."
"It turns out that we have been here before, sort of, though the last great American binge involved not food, but alcohol. It came during the first decades of the 19th century, when Americans suddenly began drinking more than they ever had before or have since, going on a collective bender that confronted the young republic with its first major public-health crisis -- the obesity epidemic of its day."
What if this is a plan to increase the price of food so that corn producers could remain as well off with fewer markets, say with the disappearance of so much business making high-fructose corn syrup? That's essentially what sugar subsidies do in that industry. Maybe it's because I am from the Atlantic coast of Canada, where we don't sell ethanol-laced gas, that I can't comprehend how ethanol gas can be impacting the economy so hugely. I'm not about to do the math or research, but I'd love to see a comparison between how much corn goes into the ethanol for and average family's weekly gas usage, compared with how much they swallow as high fructose corn syrup in pop and other foods.
Then again, it could all be smoke and mirrors. Maybe corn has nothing to do with. In Canada, we've not seen nearly the increase in food prices that the United States has. They say it's because our high dollar is protecting us, or because there's a grocery chain war ongoing, that's keeping prices low. However, I've asked around and my in laws in South Korea aren't reporting a huge increase in prices either.
Gas prices are causing this inflation in food prices and other costs, and it's not because of expensive ethanol additives. It's because of an ongoing war in Iraq that's set to spread as Israel gets ready to give itself a sixtieth birthday present by smashing Iran. It's because the economic polices of the U.S. have led to a terrible trade imbalance while a freefalling U.S. dollar makes their needed oil imports more unaffordable each day.
Notice that the recent scare over rice rationing didn't spread to Canada. Only U.S. stores made the decision to ration their rice. Of course, limiting your customers to 80 pounds a day isn't really rationing (unless the obesity epidemic is far, far worse south of the border than we've been led to suspect.) Still, it makes a good story and lends credence to the increase in prices elsewhere.
Suggesting that there is a shortage of rice worldwide is also a good first step in ratcheting up of public paranoia and fear over Chinese-related instabilities and concerns. We can't really justify going to war with them because we want their non-existent oil (No blood for coal?), but maybe if food is short then they'll attack us for our rice? Oooh. Shiver.
Looking back at the supermarket shelf, food prices are going up in the States because the economy is tanking, not because crops are being diverted. That's the reality. We will feel it in Canada as our food gets diverted, not to ethanol production, but to terrified stockpilers over-purchasing in the U.S. Nevertheless, expect Harper to toe the line. Spinning the news to make it look like biofuel is the culprit is just one more kick at the environmentalist lobby before the whole chicken coop comes crashing down - and he and Bush, as far as the environment go, are in the same hen house together.
Time of death... The housing boom is over, says Douglas Porter, chief economist at BMO Nesbitt Burns. It's certainly just part and parcel of all the other economic downturns surrounding us, but for someone who's been waiting until some sanity returns to the housing market before ponying up for a first-time mortgage, I couldn't be more pleased. Now the trick will be to get one after the prices fall, but before the banks up the interest rates to cover all the defaulters.
I was very interested to read a Canadian Press story today in the Toronto Star entitled, "Atlantic Region Ponders Uranium Comeback". With so many mill and mine closures over recent years, the prospect of starting up a new industry should be a godsend, especially one in which the commodity's price has risen to ten times its previous value over the last few short years. With the move to limit greenhouse gases, Nuclear power is back in vogue. Furthermore, with so many reactors in the states due for fuel replacement over the next few years and even New Brunswick toying with a second reactor of their own, the province must be on cloud nine with the possibilities.
Nope. This is New Brunswick.
"Still, he [Robert Krienke, president of Tripple Uranium Resources] admits that recent public meetings in New Brunswick have made it clear there is growing opposition to anything that hints at a revival of uranium prospecting.
"It's been geared towards a mob that wants to lynch you because you're in exploration," he says.
The mining industry has taken note, with some stock analysts warning there is a history of community opposition blocking even the brightest of prospects."
Maybe the New Brunswick government should consider marketing to change that image that people have of the province, instead of spending $200,000 to add a third colour to the province's logo.
New Brunswickers, more than most, know that you have to be willing and available to work in order to qualify for unemployment insurance, elsewise it's cut off. Perhaps the goverment should extend the policy to transfer payments when an entire province develops this culture averse to bettering itself. I know that's a huge generalization but it's more oft than not the case and it seems firms from away have already caught on to the fact that New Brunswick is not a province that is employer-friendly.
Keep holding out for tourists to come and spend their money, despite the shrinking U.S. economy and price of petrol making road trips less common. It matters not; New Brunswick is certainly a place that needs to be seen to be believed.
The new slogan to go with the freshly-painted logo is simply "Be" in New Brunswick. That's 100 grand per letter. I can come up with one better. Instead of just "Be"ing in New Brunswick, how about trying to "Do" something. It's the same number of letters so you lazy-asses in Fredericton won't get any worse a case of writer's cramp.
Just in case anyone was fooled when the TSX clawed back most of its Monday losses yesterday, it's skidding back down again. Hope you didn't reinvest yet.
Meanwhile, BMO is embracing obviousness and declaring the U.S. to be in recession: "The marked and widespread deterioration of business, consumer and investor sentiment since the start of 2008 has prompted us to revisit and revise our forecast." They're calling for 0.5% shrinkage in the economy this quarter and 1% in the next.
The Condo market has remained hot in Canada, despite the troubles south of the border. How long that holds is anyone's guess. Here in Halifax I get the impression that it's starting to cool, despite the statistics realtors email me regularly. My reasoning is that a number of the condominium projects here have quietly metamorphosed into "luxury apartments" as there are presumably fewer buyers now than when the first sods were turned. It's also been quiet wisdom that the resale potential doesn't approach the demand for new units.
Toronto, on the other hand, seems strongest. I get the impression that it's not as crippled by high prices as Vancouver is (for first-time buyers anyway) nor is there a shortage of housing to deal in, as there is in Albertan centres. The economy is stronger and on top of it all, the influx of baby boomers seeking more convenient urban homes in downtown towers is just beginning. For those desirous of starting a family in a traditional dwelling, that should result in a number of available houses being put up for sale in their wake.
Add to this the drop in lending rates now being floated to solve the world's economic woes and you may be able to sustain that growth a while longer. Banks now offer 40 year mortgages and the word on the street (prior to the sub prime terror) is that they'll reach 50 years before they're reigned in. That length of time seems ludicrous, but I think it's a veiled attempt to make your mortgage more like rent -- something you pay forever -- but not it will be to your bank, instead of a landlord.
However, the window is bound to close on low rates, too. You just can't keep lowering interest rates to stimulate the economy, since this is precisely what's caused the problems in the first place. It's like drinking alcohol to cure a hangover; it works for a while but eventually your liver fails and you sober up only to witness your own funeral. The money moguls had been trying to raise rates, but the economy doesn't want to take the strain.
Nonetheless, that pill will have to be swallowed someday. A time will come when they'll have to raise rates just so that the poor schmucks who actually pay their bills can overcompensate for all the stressed out borrowers who face financial ruin when their mortage rate jumps from 5.5% to 8%, or 21.46% as they did in 1980. (See a nice graph of historical mortgage rates at the Canadian Mortgage Trends blog.)
The picture still looks rosy for now, I am happy to say. I wouldn't be so sure about predicting the same situation a year from now. I'm hoping it lasts that long for personal reasons, but I need to be prepared if it doesn't. With ourselves, we've considered settling down here in the Maritimes, but are now leaning toward relocating to Toronto. Being cautious buyers, my wife and I will likely end up renting for a year while we scope out neighbourhoods and sink into new jobs. I've done as much research as I can online, checking house prices, maps, crime data, demographics... all in preparation for our first home.
We'd like a house, but aren't ruling condos out either, despite being at least a couple of decades away from being baby boomers. That's why I was happy to find a link to "Urban Toronto" while reading Spacing Toronto's post on urban construction, today. ("Spacing Toronto" is one of the newest additions to my RSS reader thanks to the Canadian Blog Awards.) Over at Urban Toronto, they have a "Development Index" which links to discussions, photos and urls for a vast number of ongoing Toronto construction projects. I will be busy furthering my pre-relocation research for a solid week, I'm sure.
"Settlers who left farms in the "dry belt" areas in southern Saskatchewan moving along No. 4 Highway north of Battleford into the Meadow Lake - Loon Lake districts"
While we're on the topic of dismal economic gloom, I found this interesting recording while browsing the CBC Radio archives.
It's from the program, "Assignment" with hosts Maria Barrett and Bill McNeil, and discusses some Depression-era reminiscences with folks from Saskatchewan who lived through it. (The link takes you to the CBC audio file directly but the source page can be viewed by clicking here.)
This broadcast is originally from September 10, 1958, apparently when similar forecasts were worrying Saskatchewan farmers. I guess it's important to remember that good times and bad times always come in cycles and with economic troubles plaguing the news again today, these too shall pass.
The Montreal Gazette seemed to sum up the Monday Blues at the Toronto Stock Exchange with the headline: "Market horror continues". The TSX dropped by the largest amount in seven years, and stocks fell a total of $90 Billion it seems (up from the $70 billion figure I heard earlier in the day.) No wonder the Welsh have determined January 21st to be the most depressing day of the year. (But honestly, how could they have known?)
So what does $90 billion equate to? In American terms, it's the same as, roughly, two-thirds of a percent of the total American GDP evaporating in 24 hours -- or enough to fund the Iraq War from about January to August. In Canadian terms, it's a bit more than 2700 bucks out of each of our pockets. Apply it to average Canadian income and it's approaching 10% of our yearly average pay, gone in a day.
So what are the predictions for Tuesday's wake up stock openings? Remember, the week is still young and on account of Martin Luther King Day, the U.S. has yet to leap into the fray.
Working in media, specifically print, I can't help but take notice of the massive story in today's press. Quebecor World Inc. is filing for bankruptcy. We'd been watching it over the last week but it looked like one of the domestic banks was going to give them a hand and that their parent company, Quebecor Inc. would bail them out. Now the mother corp is ordering them to stop dirtying the Quebecor name and go by something else -- and their stock is being delisted. They have managed to secure $1 billion in working capital from Credit Suisse and Morgan Stanley to cover wages and operating costs for the time-being, but that's not a cureall. (To put that in perspective however, it's only 1/70th the total amount lost on the TSX today.)
All in all, it throws the fate of 28,000 Quebecor workers in question. It also deepens the potential for an industry-wide carnage in combination with the last few years of cross-Canada mill closures in the pulp and paper industry.
How will affect Quebecor's media holdings? For now, they say it won't. Quebecor Media is an entirely separate business entity and it's through them that they hold publishing powerhouses like Sun Media. However, with their printing facilities hanging on the edge, it's bound to spell doom for those sister companies that rely on them for supplying all that ink and paper.
That's got to be worrying folks at the Toronto Sun, et al. Meanwhile, the Toronto Star seems to be getting its breath back. After voting 96% in favour of going on strike, it looks like a deal has been reached.
Nonetheless, this has all factored into me reconsidering how fast I want to switch from being an amateur webhead and professional print guy to become the opposite, by embracing New Media as my bread and butter, and finding some way to purge ten years of ink from my veins.
A lot of folks are trying to get people ready for 2008 being a rather drastic year for the world economy, but there was a pretty noteworthy indicator today. On the first business day of the new year, oil hit a record $100 bucks a barrel, today.
Folks might want to consider "driving less" as one of their New Year's resolutions.
Meanwhile, Canadians seeking to benefit from cross-border savings are complaining about being hit coming and going. American retailers who normally exchange currencies as a service to Canadian customers (who, for some reason, don't visit a bank to change their money over before leaving the country) are refusing to recognize the Canadian dollar at parity and in some cases cling feebly to the idea that a Canadian dollar is worth sometimes as little as 60 cents U.S.
Then, upon their return, they face long delays at the border due to the volume of traffic, and in some cases experience verbal abuse and affronts to their patriotism over their shopping habits.
Maybe the border guards should save it for Canadian retailers who were slow to adjust and are just now modifying their prices to the new economic reality. Or barring that, how about the Canadian manufacturers who charge different prices for products on either side of the border and then command their U.S. reps to blackball Canadian shoppers, forcing them to buy their products domestically at inflated prices.
Now, I've never been around enough money to consider myself much of an economist so someone should explain this to me: The price of oil is also leaping to record heights, achieving $98 dollars a barrel overnight, last night. However, if oil is sold in U.S. dollars, and the Canadian dollar is actually rising faster against the U.S. dollar than oil is increasing in price, wouldn't that actually mean that oil is staying the same or, maybe even getting cheaper?
Back when it was $60 dollars a barrel, the Canadian dollar was at about 60 cents to the U.S. dollar, so a hundred bucks CAD would get you a kegger. Now it's $98 bucks USD but that only costs us about $90 dollars Canadian now.
Should we really be panicking? What's the source of concern over oil? It seems to me that it's not increasing in price, so much as adjusting for being saddled with a weaker unit of commerce.
I think it won't be long before more than Chinese investments shed the U.S. dollar. Oil will also move to a Euro standard soon, I suspect. The greenback is just too volatile right now and most of the major oil-rpoducing nations are luke warm to the United States at best, or have found themselves in American bombsites.
I suspect this may just be a ploy by CanWest to raise up some anti-government hackles worthy of Guy Fawkes Day, today, but they've started a rumour that the government is reconsidering the release of a Five-Dollar coin. The story's now making the rounds on other media. I heard it on the local talk radio station this afternoon.
In documents obtained by CanWest News Service, the federal government has studied the introduction of a new $5 coin to replace the bill. The Bank of Canada prepared an "optimal denomination structure" report in 2005 and as part of it, used two different theoretical financial models to analyze our coin and bank note system. [CanWest]
The fact is, this story already broke back in 2005 when the studies were done. When telemarketers had conducted the survey for the mint, they were were received by an almost uniform wall of staunch, fiery opposition. Those people surveyed then tattled to the press about the fact that the government was considering yet another cursed denomination of coin. The Canadian Mint buried the subject as far as I can tell. Why CanWest wants to dig it up now is anyone's guess.
Remember, remember the Fifth of November, If Loonies and Toonies we must, I see no reason why five-dollar Fooneys, Should ever be discussed. (With apologies.)
The fact remains that with or without five-dollar coins, the Royal Canadian Mint is insanely too prolific as it is. Just browsing the current selection I count about four-dozen different quarters alone that would be presently in circulation, including the Vancouver 2010 series, the 125th Anniversary of Confederation series from 1992, unique coin sets for weddings, celebrations, babies, Millennium coins, Oh Canada! quarters, Canada Day quarters. Remembrance Day quarters... I stopped counting there because my head is spinning but there are more if you look hard enough.
After that there are the collector's edition dollar coins -- which even include ones done up for hockey teams in replica hockey pucks.
Is it too much to ask that they just take themselves seriously? They are the guardians of our national currency, not Carlton Cards for God's sake. Honestly, if counterfeiting coins held any profit, you could pretty stamp "25 Cents - Canada" on any piece of metal at this point and it would likely be accepted without question. ("That? Oh, it's my commemorative beaver hugging day quarter! And this other one celebrates the contributions of the people of Moosejaw to the Canadian tapestry.")
Seriously, if someone in Ottawa suggest weighing down my poor wallet anymore than it already is, with a five-dollar coin, I'm going to go up there and introduce them to the business end of a roll of collectors' quarters. It's literally a pain in the ass to have half of your butt sitting on such a huge lump of metal coins as we Canadians regularly are force to do now -- at least those of us who use wallets. One more coin and I'll have to retire my wallet altogether, or risk back problems later on in life from sitting so crooked on coinage all day.
A couple of stories showed up recently that really show how ignorant some people chose to be with the economy. Obviously, everyone in government would have you think that we're doing great since anything positive the tories can't claim to, the Liberals will take credit for having done before them. Few seem to admit to the widening income gap. It's only lately that you hear a lot more about stagnation of middle class wages but it's often in the context of "one more reason" to lower prices with the higher dollar. That's true, but it's reason enough on its own.
According to the latest statistics from the World Bank, the widening gap between rich and poor in Canada is now roughly on par with that of Indonesia. Indeed, in the matter of income equality, Canada trails not only the Scandinavian countries, but Egypt and Pakistan, as well. - [TorStar]
We just don't hear the negative often enough to wake up and take notice. The government hides this discrepency in wealth by focusing on "average" income in their statistics, while "median" income is close to 30% lower. That shows how great the differences between lower and upper class have become, never mind the rare and endangered middle class.
Meanwhile, the other iceberg we're steaming to is personal debt and a related lack of retirement preparation, to which many of us are apparently as woefully ignorant of as well, I guess. Eric Beauchesne of CanWest, writing about a recent report by a national association of accountants that was presented on Thursday, had a very startling statistic yesterday which almost defies reason.
...25 per cent of households did not think that an interest rate hike, lower housing prices, wages or reduced access to credit would negatively affect their financial well-being, a finding that the report called "disconcerting" considering that a one-point rate hike on an average sized mortgage could add more than $1,500 a year to the carrying costs of a typical sized mortgage. - [CanWest]
It all risks a great calamity. Right now, the rising dollar convinces ourselves that we me indeed be more stable than the United States below us, but the fact remains that many of the same mechanisms and trends are in place that could shut down our economy and make our perceived wealth vanish.
For one, if it's true that Canadians are choosing to look at their home equity as retirement savings instead of cash reserves (which I think we can safely assume to be a true situation) then a collapse in the housing market equals a collapse in retirement preparedness. Even in a best-case scenario where we have less damage caused by sub-prime defaults, we still have to prepare for a huge influx of houses to drop onto the market when baby boomers make their predicted move to condominiums.
Both of the above linked stories are worth checking out, if only to splash a bit of cold water on anyone who's let optimism infect themselves too much.
Such a voyage, in good conditions, can take as little as eight days, compared to as many as 15 for a conventional crossing of the Atlantic.
The downside is that this window is only open for four months of the year, but scientists predict that it could reach as long a period as 10 months of the year with global warming.
The cargo was 10,000 tonnes of Russian fertilizer, destined for thrifty Prairie farmers.
I found this and thought I'd put it up on the blog as a piece of Canadiana to indulge in. "Honest Ed" Mirvish, the famous Toronto salesman, theatre patron and restauranteur, passed away back in July but it was only in this past week that I have just finished Jack Batten's biography of him, "Honest Ed's Story: The Crazy Rags to Riches Story of Ed Mirvish" from 1972. For nostalgic purposes, I thought this commercial from 1988 was quite enjoyable.
It became official, if only shortly today. The Canadian loonie and the U.S. Greenback passed each other as the loon soared upwards and the American dollar continued on its freefall. Parity was reached before noon time today, with the Canadian dollar reaching a high of US 1.0008, later in the day, around 4:16 p.m. EST. A union of the currencies is no doubt on a lot more illuminati blackberries today.
But before throwing such a wet blanket on the parade, the Canadian Press has an interesting look back to November 25, 1976, the last day that our currencies traded at par.
National Geographic ran an article in its November 1976 edition on global climate change, reporting a scientific debate over whether Earth faced a rapidly cooling or warming trend. Some scientists in the article were positing that the oceans could freeze.
The American government signed a $10-billion arms deal with Iran in 1976 - the country it is now openly contemplating invading.
And China, the U.S.S.R., Iran, and Kuwait were finalizing long-term aid and development plans with the Afghan government, the prelude to 1979's Soviet army invasion. NATO invaded Afghanistan again in 2001, the prelude to the current long-term aid and development plan.
Up and up she goes. The Canadian dollar hit a three-decade high of 98.74 cents to the U.S. dollar in trading today, closing at 98.64 and set to climb higher tomorrow.
Already on a slow and steady rise, today's rate cut of 50 basis points by the U.S. Federal Reserve helped move the Dow Jones back up but also gave a solid push to the Canadian dollar which is now seen as an increasingly stable compared to the U.S. dollar.
Parity has been on the mouths of economists for over a year now, but there's a firm belief that it will be realized very soon, possibly even tomorrow.
So, this weekend, be prepared to celebrate with Coors, Budweiser and other "cheap imported beers." It could be party time.
A one-day panel at the Munk Centre for International Studies at the University of Toronto listened to presentations yesterday that put the protection of our fresh water resources under NAFTA in question.
"While there are many well-publicized statements and written documents indicating that Canada's water is not for sale, experts believe these have little or no legal force."
The Centre's Program on Water Issues heard from a freshly released paper entitled, "On the Table" where it is said that passages in agreements such as the Canada-U.S. Free Trade Agreement of 1989 and the North American Free Trade Agreement (NAFTA) of 1993, that were included to protect Canadian water supplies, remained unsigned.
"The subject of continental water sharing has surfaced as part of the integration agenda," the new research paper notes.
It claims that the future of our water is being discussed now, under frameworks such as the Security and Prosperity Partnership, at meetings such as the one held recently in Montebello, PQ. They accuse of people in power of having an agenda to sell off our freshwater resources while pursuing greater economic integration with the United States.
My first blog initially began as the Kyungnam
Journal in April of 2001, six months after I first landed in South Korea
to teach English. Upon moving to Seoul in January of 2002, it became the
Kyungnam to Kyunggi Journal (K2K) and upon returning to Canada and the
establishment of Latenight.ca, it's been archived here for posterity.
I hope
you enjoy the photos and anecdotes of my time working in hagwons as
an EFL instructor in the South Korean cities of Changwon and
Seoul. I especially hope that prospective English teachers
heading overseas can benefit from this journal.
A few updates may still materialize however,
as Korea retains its connection to me through memory, habit and, now,
matrimony.
My first Latenight blog was begun in March of
2004, when I repatriated to my hometown of Miramichi, NB.
Some of the posts are a bit sparse of concrete
personal information, compared to my other blogs. At the time, I'd
begun a small publishing company and most of my life was consumed by that,
while the competitive nature of my business situation demanded I keep my
work-related posts a bit vague.
Nonetheless, even after moving away (again),
it is still my hometown and I hope to continue to contribute posts from
time to time. Miramichi is a town in transition and deserves a blog
of its own, so while I am not presently residing in the city, perhaps I
can still cast my gaze back home periodically.
Halifax was my home for a time when I was a
child. It's the city of my alma mater, Dalhousie. It's also where
I've spent the bulk of my working life in the publishing industry.
I returned to Halifax, the City of Trees,
in September of 2005. By then a seasoned blogger, I set up the Latenight Halifax section of this site then
and retrofitted the other blogs to match.
This blog covers my life in Halifax through
writeups and photos, and also the steps leading up to myr marriage in June
of 2007.
We eventually decided not to settle here
though, despite the years I've enjoyed in Halifax, and as of June 2008, we
followed the ol' Maritime tradition and left to hang our hats in Toronto.
Short of updates, I figured I might post something to see if anyone reading might have some ideas on a curious situation I've heard of. Now, I don't normally blog much about work, and this isn't technically in my portfolio anyway, but I have heard that some gold mines have a dilemma right now. As I type, the price of gold is at 936.63 US. This should be good news for gold mining companies, but instead I hear that while they are digging it out of the ground, no one is buying at the price it's being sold at. As a commodity, this shouldn't be the case. The price should adjust to what people will pay. 
![The press room in The Manitoban printing office after a riot, during an election. (Winnipeg, 1872) -- [James Penrose / Library and Archives Canada / PA-165779 ]](http://www.latenight.ca/uploaded_images/a165779-793106.jpg)
