Whenever I click an editorial on line and am prompted for a news subscription trial I come away thinking, “fat chance you’re going to get me to pay for this second rate opinion”. I harbour no ill will toward editorials in lock down and news outlets needing to fund their reason for being. I’ve just taken the opinion that since the internet company is taking a material payment from me monthly and I expose myself to the deluge of advertisements, I simply will not subscribe to one news outlet. Have you ever been frustrated by having cancelled a memberships with precise administrative protocol but then see the charge show up the following month? Exactly.
At the same time, it’s important to underscore the contribution which journalists make to society. Journalists ask questions which you don’t have time for because you are at work and tending to kids. Journalists serve you in that they isolate problems with government decision making which impact you. Journalists also expose injustices of humanity which would go otherwise unnoticed by those who can intervene.
There has been a new phrase coined recently – “fake news”. While there are degrees in quality of journalism largely because of the profit motive and stakeholder’s potential for bias, standards in journalism still exist and are being executed. To subjectively paint all journalists as compromised is simply irresponsible.
In fact, there has never been a larger role for journalists during this time in history when democracies are being administered more like “elected dictatorships” with ultra party partisanship and fear of voting ones’ conscience in elected houses as the new norm. Under these conditions in particular, the diligent reporter’s industrious efforts should be emboldened. In this light, I suggest to the journalism industry to lift your lock down of editorials for those of us suspicious of monthly credit card auto charges and appeal to us differently for your funding.
It’s a talking point I trumpet often with my clients. Your
money is yours and you must know what you are doing with it and where it comes
from. Somebody apparently forgot to share the message with Brett Favre. He will now return 1.1 million dollars to the
U.S. welfare system for money received for speeches that he did not give.
Investment advisors have been wrong often. Bankers are not
investment professionals and typically don’t deploy investment analytics as
they should in recommending investments. Nor, do they necessarily have a feel
for the economic pulse. Yes, they did
not anticipate a “Black Swan” event in the context of a risky political
environment. Portfolios have lost money and investors are assuaged with the
mantra that they are in for the long term.
It may be unfathomable to you that somebody can receive 1.1
million dollars and not know that it hit their account. I can actually believe
it when the numbers get big and individuals don’t have the right financial
professionals in place to question financial transactions. In fact, the
accounting profession had lost its way ten years ago in the context of
derivative books getting out of control while off balance sheet obligations
went unscrutinized. When internal controls get loose during times such as
these, temptations of the morally weak are incited. The environment right now
is really interesting and I’m paying special attention. Governments are
spending money like drunken sailors. The U.S. federal government just fired a
watch dog responsible for overseeing disbursements from the federal treasury in
the context of pandemic relief. There’s never been a more acute time in your
living history to be educated in finance.
While Canadians turn to twitter and laude the public
relations campaign by Alberta’s Chief Medical Officer, Deena Hinshaw, let me
remind fellow Canadian regarding the disparity of pay between her, and care
aides tending to the elderly.
You see, The Canadian Medical Association for decades has
ensured that Canadian doctors hit the gravy train right out of school with
automatic jobs because of ridiculously tight spots in medical schools. Entrance
standards at medical school have been set artificially high in order to serve a
market demand favouring doctors. Having
come to grips with the problem, the importation of doctors from abroad became
The Edmonton Journal reports that Canadian doctors earn
$349,655 per year. Many care workers tending to the elderly have been earning
minimum wage. Do you see a problem here? Okay. Who do you think has the bigger
voice when negotiating pay? You guessed it. Doctors. Mostly, front line care
aides don’t actually have representation.
The health care budget in Alberta is near the 45 per cent range. Think about that for a minute. You as the taxpayer are so interested in your public health care system that you are willing to spend $0.45 of your provincial tax dollar to fund public medicare – yet today your Prime Minister has announced that the salaries of these aides for the elderly are going to be need to be topped up and you guessed it….there will be not mention of where this new money will come from.
Is Vancouver teetering on the edge of bankruptcy? Are you old enough to remember the federal immigration policy instituted by Brian Mulroney which encouraged capital investment from abroad via the immigration system? Come to Canada and invest a sum while guaranteeing to employee a few. This was the start of the of the real estate growth wave in Vancouver. The program was only loosely monitored and became the conduit for infusing money into the lower mainland thereby ousting those native born without ancestral ties access to the market.
The demographic of Vancouver changed dramatically in a short
time frame and there was a definite cultural shift amidst a policy of “multiculturalism”.
This was new vocabulary established partly to challenge the xenophobe while
complementing robust immigration policy. When we look around at the cultural
mosaic today in lieu of the government message, we see some success but greater
failure. The greater failures were middle aged and older Asians not really
making the strong effort to immerse along with a white contingent who was not overly
welcoming. So, there was a contrast between the government’s ideal and the
urban reality. When we look around today, we can give strong marks to the
immigrants of millennial and younger generations for gravitating toward their
own Canadian destiny.
The capital infusion into B.C.’s lower mainland didn’t stop
with the economic immigrant. Banking regulation in Canada has been lax.
Imported capital has not been scrutinized. Dirty money has been making its way
into Canada for decades and politicians have turned a blind eye. Bankers liked
it. Bank shareholders have liked it. It’s only been as recent as four years ago
that money laundering activity at casinos in Vancouver became targeted by
These two sources of capital have been substantial in the
real estate market in Vancouver. As of this writing during the COVID-19
pandemic, the City of Vancouver has suggested bankruptcy as an option in the
context of 65 per cent of Vancouverites missing their April 1, 2020 property
tax payment. Fifty-five per cent are projected to miss their May 1st
2020 payment. What’s the correlation between a hypothesized artificial rise in
real estate valuation and the failure of the city to collect taxes amidst the
COVID crisis? I suggest that the city’s budget and historic spending grew in
tandem within the context of a property tax system built on a weak structure of
property valuation and hence the house of cards is now teetering amidst a black
Canada is facing a large increase to the money supply in the context of new social programs associated with COVID-19. Your government in conjunction with financial news outlets do not want to use language like “increase the money supply” because it may be deemed alarming or inflationary. Instead, it refers to the monetary system in bankers code.
In essence, government securities are floated for
distribution to commercial banks via the country’s “central bank”. The creation
of this “security” (example would be a treasury bill or bond) in effect
provides the directive for printing press operators to flip the switch. However;
in advance of the creation of the new security, the central bank will check its
“reserves” to ensure that the “vaults” are sufficiently equipped with an “asset”
to merit the production of a new “security”. This is where things get
It used to be the case that gold characterized the reserve
asset. However; gold lost its lustre as a reserve asset when President Nixon
took the U.S. off the “Gold Standard” in 1971. President Roosevelt Roosevelt in
fact ordered Americans to return gold for dollars as a mechanism to cope with
The Great Depression.
So now, we have the creation of new money without a tangible
assets being served as its foundation for existence. Furthermore, we are
presented with ever increasing national debts represented by the apparent financing
of governments by holders of such securities which will stretch way beyond ledgers
of domestic commercial banks. We also have the vast majority of economists
supporting such a system and special interest groups professionally organized
to acquire government funding.
What can happen when a Black Swan event such as COVID-19
compels governments to inject new money in the hands of consumers in the
context of a monetary system which has no tangible asset at its root? Inflation
or deflation of course. This is the great debate. Logic dictates that prices
should rise with a larger monetary base. However; when social conditions
deteriorate, a hoarding impulse may compel folks to store their cash thereby
producing deflation. Every economist will tell you that the worst economic
scenario is one of “deflation”.
any exposure to “Austrian Economic Theory” will naturally defer to “Keynesian”
(flooding market with currency during demand drop) doctrine of mainstream
economic thought. Will next generations be contented with paying interest on
seemingly unsustainable national debts or will there be a consolidation at some
point? Author Jim Rickard has referenced the “Special Depository Right” as a
new unit of currency established by the International Monetary Fund.
You’ll notice that your governments are speaking in code
much of the time when it comes to addressing the financial impact, consequences
to your household, and detail pertaining to your access to credit facilities in
the context of COVID-19. Your Prime Minister is once again scheduled to address
the nation at 11:30am EST. We’ll see if he get his “head of his a@s” and starts
speaking in terms of your household cheque book.
While the Bank of Canada rate has been reduced over the past
decade, margins between the “overnight rate”, “prim rate” and “retail lending”
has widened. That’s right…the banking system has done very well because you
my fellow Canadian has been too happy to pay interest in the wide margins.
This crisis has hit while you are highly leveraged meaning
that many more of you will now be faced with bankruptcy unless your government
starts REGULATING THE BANKING SECTOR in terms that assist you in managing your
debt. The board of directors of your chartered banks won’t be too warm to that
idea especially in lieu of their confounding argument that masses of Canadians
hold chartered bank stock in their registered investments.
From what I can see so far, your government is going to be
floating more “paper” in order to free up credit. The term “paper” refers to
securities which may take the form of derivative contracts. Oh ya…you
remember those – the ones that produced the financial crisis of ’08 / ’09 (mortgage
backed securities). Of course your government will also be referring to the “purchase
of bonds” which is code for creating new money out of thin air with a charge to
your grandchildren’s future.
stand point of the stock market, this is a lesson that so many folks needed to
learn. Your investment advisors are simply people with vulnerabilities like the
rest of us. The buy and hold mantra has cost you money. You must put attention
on your own investments and you must actively manage your portfolio with input
from financial people who know more than you. You must be the torch bearer of
your own financial destiny. You must be in a mode of “continuous learning”. What
about locked in accounts and government pensions you ask. Well, you are at the
mercy of portfolio managers but you still have access to your accounts with a
right to know what you own.
do I find the time to manage my own investments? You fit it in. You stop
succumbing to the bosses request for overtime. You put boundaries around your
schedule. You stop being a pushover when it comes to your calendar. This might
mean helping your spouse understand that that second vacation within a calendar
year goes bye bye. Boo hoo! What would
you rather have – an earlier with
compounded accelerated rate of return and an earlier retirement or that second
vacation just because your kids get a spring break?
Now that I’m
on a roll ‘cause I put this together having just returned from an empty gym ‘cause
of the psychology behind avoiding sweat boxes now that we’re dealing with this
corona virus, I expound further. Have
you seen the chart on the Dow 30? The thing has been going straight up for
years. Did you not think that it was overdue for a major correction in response
to some kind of Black Swan event? Hell….I simply took a look at the
incompetence of governments in running budgets given deficits and debts and on
that basis alone considered the market over heated. Have you not perceived the
weakness currently in our North American political leaders?? There’s another factor right there in and of
itself worthy of shorting the market or running for the hills.
If you feel like you’re being hosed. You are. We’re in an era of non-confidence and nobody wants to own it because the exclamation lacks personal power. You hate ceding your power and I don’t blame you. Ideally, you pick your choice worthy battles. You fight them thereby appeasing your conscience while incidentally assuming that bigger fights with more moving parts will be handled effectively by those in higher power structures. Here’s the thing…..the credibility of those higher power structures has been eroded. The affect is a not necessarily apparent on the surface but once you get behind the doors of a broke household or board room…..the scene may look more vivid.
Whether it be a deceitful president of the United States, a
government authority overstepping its jurisdiction, a tepid minded Prime
Minister, protesters impeding commercial activity, a police department being
indifferent, a legal system operating atrociously slow, a tax system
redistributing wealth, or an electoral system exercising regional disparity,
people in my opinion are feeling more powerless now than in the past. This is
my sense. What are the implications of this? Not much happens in the beginning.
Fringe movements rise up and energies fade. It’s not until groups in large
numbers feeling similarly aggrieved amass that any traction takes hold.
Insular leaders living in a vacuum clueless of what’s being
discussed at the supper table is a phenomenon of the day. The election of
Donald Trump should not have been a surprise for elitist liberals but indeed
this pompous bunch had their worst nightmare come true. The wide swath of
political blue painted across the map of the Canadian prairies in 2019 should
not have come as a surprise. Elitists again were caught off guard.
People expect competent leadership with commercial interest
playing a vital part in decision making. People expect merit based pay. People
expect entrepreneurial risk to be rewarded. People expect their tax dollars to
be spent wisely. People expect the responsible development of resources within
environmental guidelines along with the permitting process to be reasonable.
These are not difficult concepts but the intransigence at every turn by figures
of authority mixed with a political landscape of deceit and unreasonable
demands by First Nations people are more than just getting on the nerves of
Look out Fernie / Sparwood / Blairmore…you’re next. Kootenays take economic hit. Teck laying off 500….and it’s yet to be reported exactly where the blue chip miner is going to apply its cuts. Their steel producing coal isn’t quite as appealing to the markets. Could it be time to start promoting golf courses and casinos with the forestry industry also in the doldrums? The sleepy towns of Cranbrook and Kimberley get by (barely) with the closing of Cominco years ago. This corner of B.C. is still holding on to some semblance of conservative values in the face of a rising industrial backlash but it could all be about tourism once the next movie star catches a glimpse of the Teck open pits fuelling rhetoric for light weight politicians.