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Canada’s crazy Libertarians want to legalize lemonade stands, baby-walkers and Bitcoin

Canada’s crazy Libertarians want to legalize lemonade stands, baby-walkers and Bitcoin

Maxime Bernier’s near-win of the Conservative Party leadership suggests that Canadians increasingly are tempted by smaller government. But maybe Bernier is in the wrong party. So says Tim Moen, the dynamic leader of the Libertarian Party of Canada, whose upcoming convention, will take place between July 5thand 7th, 2018 at The Westin Ottawa. Following is an edited version of Moen’s comments.

What will be the key themes of the upcoming convention?

In a word: “energy.” Libertarians have long been a small niche in Canadian politics, which is dominated by special interests. But recent events have energized our base. Maxime Bernier’s near win of the Conservative Party leadership and his subsequent repudiation by the party’s establishment provided Canadians with a key message: those who want liberty, free markets and smaller government will be more at home in the Libertarian Party.

Your recently provided Bernier a chance to run for the Libertarian Party’s leadership by offering to step aside. What makes you think he would do a better job than you?

Maxime has a national profile, well-established credentials and excellent knowledge of the threats posed by the Bank of Canada’s disastrous monetary policies. Libertarians are a party of ideas not of personalities. We work with anyone who is willing to build a better country. If that means stepping aside to take on new talent, I’d do so in a second.

We are seeing increasing signs that Canadians agree. For example the Ontario Libertarians ran a near-full slate in the last election. There is also considerable interest in our Ottawa event. Journalist Brian Lilley is scheduled to appear as is Matt Bufton of the Institute for Liberal Studies. We also reached out to the Canadian Taxpayer Federation, the Canadian Federation of Independent Business, the Blockchain Association of Canada. Even to the local Bitcoin community!

…click on the above link to read the rest of the article…

Neoliberalism, Pipelines, and Canadian Political Economy

Neoliberalism, Pipelines, and Canadian Political Economy

Photo by Luke Jones | CC BY 2.0

The national debate about how to get diluted bitumen to trans-oceanic markets by means of a twinning of the existing Kinder Morgan pipeline route between Alberta and British Columbia – known as the Trans Mountain Pipeline Expansion Project – illustrates the sad state of economic planning, diversification and vision in Canada.

The current policy of dependence on the sale of carbon-based energy resources, coupled with reliance on residential real estate construction and sale, is a short-sighted environmental and industrial strategy for a nation such as Canada. The country’s forecast continued dependence on the extraction of oil and gas, the burning of which our planet can no longer sustain, along with our primary devotion to the FIRE (Finance, Insurance and Real Estate) model of wealth creation does not serve the well-being of all Canadians nor preserve our natural environment. Instead, we should be considering alternative economic approaches that affirm Canadian economic sovereignty through the creation of jobs and socially re-invested dividends linked to a sustainable future.

It is time we organize our economy along different lines, putting people, communities and the environment ahead of pipeline revenues, quarterly profits, and energy stock prices. That this may pose challenges is not a matter of dispute. Nevertheless, our reluctance to revise or discard established ways of doing things has been an impediment to change in the past.  This was noted fifty years ago by the distinguished Canadian economic historian Harold Innis, who, in discussing our political culture, noted our “infinite capacity for self-congratulation.”  This complacency is perhaps not surprising when one considers our rich abundance of resources, land, and water; our good fortune to be situated next to the world’s economic behemoth which possessed an apparently insatiable appetite for our raw materials and commodities; and, finally, our small population occupying an immense landmass according each individual an almost blessed sense of space, ease and, for a time, opportunity.

…click on the above link to read the rest of the article…

A Made In Canada Recession Story!

A Made In Canada Recession Story!

The Canadian economy lost 7,500 jobs last month (May), and unemployment was still at 5.8%. This, despite analyst forecasts that the country would likely add roughly 22,000 jobs to the economy. Rewind to the previous monthly jobs report (April). Analysts had predicted that we would add approximately 20,000 jobs to the economy, yet we ended the month losing 1,100 of them instead. Could this be a precursor to what recessions are made up of – gradually snowballing unemployment?

Telling Stats

While pundits watching these statistics through rose coloured glasses tell us not to worry because unemployment is still just at 8.5%, other predictions paint a different picture. Current Canadian unemployment forecasts for the immediate future indicate that things are likely to get bad, before they get worse. Unemployment is expected to tick up to 6% in Q3-2018, and balloon up to 6.7% in 2020.

What Canadian’s should be more concerned about is the Labour Participation Rate – a number that tells us what percentage of individuals continue to actively participate in the workforce. After maintaining a steady pace of 65.5% in Jan, Feb and March 2018, the participation rate has seen a steady decline to 65.4% and 65.3% in April and May.

What’s even more telling is the fact that there was a decline in steady, stable full-time employment. It was part-time workers that filled the void and brought our unemployment rate to where it is today. Those part-time positions are “precarious” at best, and that could evaporate at any time. And that would add to the already stressful state of our economy.

Taking Stock

Stock markets of any country are considered bellwethers of the economy. A booming stock market indicates prosperity, while a slump in the stock market usually spells trouble.  Most recessions in the past have been heralded via massive declines in stock indices. So far, Canada’s premier stock market index – the S&P/TSX Composite Index – is up by 5.85% on a Quarter-to-Date (QTD) basis. So, this bodes well for Canada, doesn’t it?

…click on the above link to read the rest of the article…

Why a US-Style Housing Bust & Mortgage Crisis Can Happen in Canada, Australia, and Other Bubble Markets

Why a US-Style Housing Bust & Mortgage Crisis Can Happen in Canada, Australia, and Other Bubble Markets

Despite persistent and false memes to the contrary.

When a housing downturn gets big enough, there will be a mortgage crisis, and it will hit banks, shadow banks, and mortgage insurers no matter what the mortgage laws are: that’s what the US mortgage crisis has demonstrated. Yet many industry organs and media outlets in Canada, Australia, and other places with acute housing bubbles are trying to hide behind a false meme about US mortgage laws. What happened there cannot happen here, they say.

So we’re going to debunk this meme.

“Jingle mail” was a phenomenon during the US mortgage crisis when homeowners and small-scale investors, unable or unwilling to make mortgage payments, abandoned the place, figuratively mailing the keys to the bank. This phenomenon took various forms, such as homeowners who stopped making payments but continued to live in the home, sometimes for years, because the foreclosure process was hopelessly bogged down.

All this became a problem only after home prices dropped substantially below the amount people owed on their mortgages, which made it impossible for them to sell the home and pay off the mortgage.

This is rarely a problem in a rising housing market. Default rates are minuscule because it’s easy to sell the home and pay off the mortgage. And during these times, lenders hide behind these low default rates. But these default rates are only low because home prices are rising.

But when home prices drop sharply, after years of low-down-payment requirements and thus little equity cushion, suddenly soaring defaults are a problem that “came out of nowhere.”

…click on the above link to read the rest of the article…

Trump, Tariffs and Trade Deficits

Trump, Tariffs and Trade Deficits

“The Chinese are raping us” and “Canada is killing our farmers”! Such melodramatic claims from Trump resonate with many Americans, because the effects of globalization have been devastating for half the population. To his credit, Trump has been harping on trade deficit for thirty years – he was complaining about the Japanese in the 1980s. However, he’s vastly oversimplifying the issue and the solutions. This is an important topic that requires serious thought.

What is Trade Deficit?

Simply put, trade balance is the difference between our exports and imports. If we export more than we import, we have a trade surplus; but if we import more than we export, alas, we have a trade deficit!

Why Trade Deficit is Bad

Trade deficit is transfer of wealth.

Since our Federal Reserve Bank creates fiat money out of thin air, it’s hard to see the adverse effects of trade deficits. However, imagine for a moment that all trade happened with gold. Every year that we have a trade deficit, our gold reserves will shrink, and we can then clearly see that perpetual trade deficit is unsustainable.

Another facet of trade deficit is its impact on the money supply. Say you spend $1000 on jewelry at a local store. That’s not a one-time transaction. The jeweler may spend that money on a furniture store, whose owner uses that money to pay his employee, who uses that to pay his rent, which the landlord uses to buy groceries, and so on. Thus the economic effect of $1000 is multiple times its value.

Now imagine the catalytic effect of $9 trillion! That’s the tremendous economic stimulus we have lost in the last two decades alone due to trade deficit.

Symptom of Jobs Lost

A corollary of trade deficit is that Americans are not producing the goods that we import. Of course, no country is 100% self-reliant, but everything we import potentially represents a lost American job.

…click on the above link to read the rest of the article…

Canada Becomes Second Country To Legalize Weed

Canada is on track to become the first G-7 nation to legalize marijuana, and the second country in the world (after Uruguay), after its Senate approved legislation in a 52-29 vote, paving the way for recreational cannabis to be legally bought and sold within the next few months.

The vote clears the way for the government in Ottawa to take the final step: The ceremonial approval of by the governor-general that would make Bill C-45 law. Still, not all of the details have been ironed out. For example, the date for when the law would take effect remains unclear. And lawmakers have said it will take a few months for producers and retail stores to stock up and get ready for legal sales to begin, according to Bloomberg.

Canada

Possession of Cannabis became a crime in Canada way back in 1923, but it has been legal for medicinal purposes since 2001. Yet despite the culture’s longstanding permissiveness when it comes to marijuana, some groups objected to the law, including conservative politicians and indigenous groups who felt they hadn’t been consulted about the bill. But their resistance wasn’t enough to scuttle the law, and by mid-September, Canadians will be able to buy cannabis and certain cannabis products at retail shops – though cannabis edibles will not be available for purchase for another year because the government says it needs time to decide on appropriate regulations. Meanwhile, adults will be allowed to possess one ounce of the stuff in public, according to the BBC.

Even after the law takes effect, it will still be illegal to possess over 30 grams of cannabis, grow more than four plants per household and to buy it from an unlicensed dealer. Marijuana is legal for medicinal purposes in 14 European countries, Israel, Argentina, Puerto Rico, Panama, Mexico, Turkey, Zambia and Zimbabwe. In the US, medicinal marijuana is allowed in 29 states, and the District of Columbia.

…click on the above link to read the rest of the article…

Chrystia Freeland Fails to See the Emerging Multipolar World

Chrystia Freeland Fails to See the Emerging Multipolar World

In a strange case of reversed roles Canadian Minister of Foreign Affairs, Chrystia Freeland, tried to convince US president Donald Trump to return to his lost path of globalization and international trade agreements in an impassionate speech she gave at the Foreign Policy Forum last June 13 in Washington D.C.

Ms. Freeland seems to have a good reputation in some circles in Washington. At least enough to get her centre stage and a nomination as “diplomat of the year.” Though she should know that the recognition she received was not meant to acknowledge necessarily her achievements but rather to use her as an “international voice” on behalf of some US sectors that dissent with Donald Trump’s foreign policy – more specifically, those aspects of US foreign policy that are perceived to hurt business such as international trade and tariffs. Ms. Freeland obliged and that was precisely the focus of her speech.

We don’t know the impact that Ms. Freeland’s speech has had on Donald Trump. But her message would have been fitting had she been on the same stage with the likes of Ronald Reagan whom she did praise once.

What we do know is that her speech – probably meant to be inspirational – was full of liberal, capitalist and imperial rhetoric, and showed little understanding of the geopolitical realities of today. Her tenacious defense of the virtues of capitalism lacked vision and placed her right back at the time of the old Cold War with the only exception of authoritarianism being the nemesis instead of communism. She pointed her accusatory finger at Venezuela, Russia and China as examples of current unruly countries that do not follow her image of international order.

…click on the above link to read the rest of the article…

Former Bank of Canada Head: Pipeline Protesters May Be Killed. So Be It.

Former Bank of Canada Head: Pipeline Protesters May Be Killed. So Be It.

“North American governments have shown the ‘fortitude’ necessary to kill indigenous people often enough that this is no idle threat,” warns Bill McKibben.

Protesters at a rally in Vancouver to show opposition to the Trans Mountain pipeline on September 9th, 2017. (Photo: William Chen/flickr/cc)

Protesters at a rally in Vancouver to show opposition to the Trans Mountain pipeline on September 9th, 2017. (Photo: William Chen/flickr/cc)

As Canada’s controversial Trans Mountain pipeline expansion project faces ongoingopposition, the former governor of the Bank of Canada said that protesters may die but that the government should push the project through anyway.

Speaking at an event Wednesday, David Dodge said, “We’re going to have some very unpleasant circumstances,” the Edmonton Journal reported. “There are some people that are going to die in protesting construction of this pipeline. We have to understand that.”

“Nevertheless, we have to be willing to enforce the law once it’s there,” Dodge said. “It’s going to take some fortitude to stand up.”

In an interview with the Journal, he elaborated by saying, “We have seen it other places, that equivalent of religious zeal leading to flouting of the law in a way that could lead to death.”

Dodge’s comments prompted outrage from climate activists.

Author and 350-org co-founder Bill McKibben warned, “North American governments have shown the ‘fortitude’ necessary to kill indigenous people often enough that this is no idle threat,” while Canandian author Naomi Klein called the threat a “disgrace.” She added, “If the worst happens, we now know they went into this with their eyes wide open.”

…click on the above link to read the rest of the article…

Canada Has A Subprime Real Estate Problem, You Just Don’t Know It

Canada Has A Subprime Real Estate Problem, You Just Don’t Know It

A few weeks ago, a real estate agent told me about his client. Relatively wealthy older dude, closed on not one but two townhouses he plans on flipping. After some questions regarding who financed such a deal, he explains it was a private lender. Right before adding, “don’t worry, it’s not like in the US. This guy has good credit, he just couldn’t get enough money from his bank.”

I realized that people aren’t lying when they say Canadian real estate is nothing like the US in 2006. Canadians just don’t understand what happened during the US subprime crisis. They also don’t really understand subprime lending is alive and well in Canada, we just use different names.

Subprime Borrowers Vs. Subprime Loans

First, a quick lesson on subprime. The S-word is a dirty word in Canada, so there’s little discussion about what it means. Most people think “broke ass borrower” when they hear the term, but that’s not always the case. There’s subprime borrowers and subprime loans.

Subprime loans are any loans that are below prime, as in the typical lending criteria isn’t met. The part that’s poorly understood is a borrower, a loan, or any combination of those can be subprime. A borrower with excellent credit, might want a subprime loan. This happens more often than you think, and is usually because a bank won’t lend as much money as needed. No one thinks of a family in a nice neighborhood with a private loan to buy their fourth or fifth condo as subprime, but they are.

Don’t worry, it’s not just average people that don’t understand this. There’s still a lot of confusion about the issue in the finance community around the US subprime crisis. Most people knew subprime lenders blew up, and naturally blamed poor people and immigrants with low credit scores, as is the way.

…click on the above link to read the rest of the article…

What Else Canadians Should Be Sorry For — Besides Burning the White House

What Else Canadians Should Be Sorry For — Besides Burning the White House

Six-years after the British landing at Jamestown, with the settlers struggling to survive and hardly managing to get their own local genocide underway, these new Virginians hired mercenaries to attack Acadia and (fail to) drive the French out of what they considered their continent.

The colonies that would become the United States decided to take over Canada in 1690 (and failed, again).

They got the British to help them in 1711 (and failed, yet again).

General Braddock and Colonel Washington tried again in 1755 (and still failed, except in the ethnic cleansing perpetrated and the driving out of the Acadians and the Native Americans).

The British and U.S. attacked in 1758 and took away a Canadian fort, renamed it Pittsburgh, and eventually built a giant stadium across the river dedicated to the glorification of ketchup.

George Washington sent troops led by Benedict Arnold to attack Canada yet again in 1775.

An early draft of the U.S. Constitution provided for the inclusion of Canada, despite Canada’s lack of interest in being included.

Benjamin Franklin asked the British to hand Canada over during negotiations for the Treaty of Paris in 1783. Just imagine what that might have done for Canadian healthcare and gun laws! Or don’t imagine it. Britain did hand over Michigan, Wisconsin, Illinois, Ohio, and Indiana. (At least they know they’re free!)

In 1812 the U.S. proposed to march into Canada and be welcomed as liberators. They weren’t. But the Canadians didn’t burn the White House. That was done by British troops that included men recently escaped from U.S. slavery. Killing some of those escapees is celebrated in the U.S. National Anthem, as is the fact that during a battle in which people died, a flag survived.

…click on the above link to read the rest of the article…

My Views on US-Canada Trade, Steel’s Impact on National Security, NAFTA, and the Dollar

My Views on US-Canada Trade, Steel’s Impact on National Security, NAFTA, and the Dollar

Wolf Richter with Jim Goddard on This Week in Money:

Trade agreements are designed to benefit companies, not people – which is part of the problem. We also get into whether gold and silver will remain stuck in the current trading range, and whether there will be a recession under Trump.

 

Canada Bets On Trans Mountain Expansion To Sell Oil In Asia

Canada Bets On Trans Mountain Expansion To Sell Oil In Asia

Pipeline pieces

Canada may be the fourth largest producer and third largest exporter of oil in the world, but it has one sole customer of its oil—the United States.

At the end of last month, Canada took a step toward ensuring that its oil would have an export outlet to the world’s fastest-growing energy market, Asia.

Analysts believe that the federal government stepping in to save the Trans Mountain expansion project has boosted the chances that the pipeline will be built and give Canada an export outlet from the Pacific Coast to the Asian markets. The industry is cautiously optimistic, but some companies say that Canada must do more to level the playing field for its oil.

Last year, Canada’s crude oil exports increased by 6.5 percent annually to 3.3 million bpd. Of those, exports to destinations other than the U.S. accounted for just 0.8 percent of all, according to data by the National Energy Board (NEB).

Due to congested takeaway capacity and lack of enough pipelines to either the Pacific or the Atlantic Coasts, Canada’s oil is currently priced at a huge discount to the U.S. benchmark. The discount at which Western Canadian Select (WCS)—the benchmark price of oil from Canada’s oil sands delivered at Hardisty, Alberta—trades relative to West Texas Intermediate (WTI) has been US$20, and at times US$30 a barrel this year.

Fierce opposition in British Columbia has forced Kinder Morgan to reconsider its commitment to expand the Trans Mountain pipeline that would increase the daily capacity of the pipeline to 890,000 bpd from 300,000 bpd. So the Government of Canada reached an agreement with Kinder Morgan last month to buy the Trans Mountain Expansion Project and related pipeline and terminal assets for US$3.5 billion (C$4.5 billion).

…click on the above link to read the rest of the article…

Trump Skipping G7 Meeting on Climate, Clean Energy, Oceans

Trump Skipping G7 Meeting on Climate, Clean Energy, Oceans

Justin Trudeau greets Donald Trump at the G7 meeting

President Donald Trump headed for the Group of Seven (G7) summit in Canada on Friday but will be leaving before Saturday’s meeting on climate changeclean energy and oceans. The White House said an aide will take Trump’s place, CNN reported.

The announcement of his early departure comes amid a brewing war on tariffs. French President Emmanuel Macron and Canadian Prime Minister Justin Trudeau said at a joint press conference on Thursday they intended to challenge Trump’s tariffs on steel and aluminum imports at the G7 summit, according to the Associated Press.

Trump will depart for Singapore on Saturday for his meeting with North Korean leader Kim Jong Un.

“I am heading for Canada and the G-7 for talks that will mostly center on the long time unfair trade practiced against the United States,” the president tweeted today. “From there I go to Singapore and talks with North Korea on Denuclearization. Won’t be talking about the Russian Witch Hunt Hoax for a while!”


I am heading for Canada and the G-7 for talks that will mostly center on the long time unfair trade practiced against the United States. From there I go to Singapore and talks with North Korea on Denuclearization. Won’t be talking about the Russian Witch Hunt Hoax for a while!


Frankly, it’s not surprising that Trump wants to skip the climate meeting with the leaders of Canada, France, Germany, Italy, Japan and the UK. The president doesn’t believe in climate science, he wants to dramatically expand offshore oil drilling along the nation’s coasts, and his intention to withdraw the U.S. from the Paris agreement has created a significant rift between the U.S. and its G7 allies.

In fact, U.S. Environmental Protection Agency chief Scott Pruitt also ducked out of a G7 meeting of environment ministers in Italy last June.

…click on the above link to read the rest of the article…

City Officials Struggle To Fend Off “Unstoppable Juggernaut” Of Chinese Homebuyers

As we’ve pointed out time and time again, foreign – mainly Chinese – buyers seeking to park their ill-gotten gains beyond the reach of the Communist Party have – in addition to global capitals like New York City and London – favored a handful of cities in the Pacific Northwest, as well as Australia and New Zealand. Many of these cities – for example, Vancouver – have seen property values rise to levels that are unaffordable for local buyers.

While the influx of capital helped fuel an economic recovery in the aftermath of the crisis, home values soon reached crisis levels that demanded action by local officials. Some places have tried to use taxes to deter foreign buyers. In some instances, the taxes worked – at least temporarily.

But with the flow of buyers refusing to slow despite efforts by the Chinese government to stop money moving offshore, many of these cities are getting desperate. And after years of occasional headlines, it appears the crisis has finally become dire enough for the mainstream press to start paying attention.

Vancouver

To wit, government officials in Canada and Australia who spoke with the Wall Street Journal for a story about how Chinese homebuyers expressed concern that widespread foreign ownership has created bubbles in local real-estate markets. Even as Australia and New Zealand and some Canadian cities have raised taxes on foreign buyers, many are worried that home values will continue to climb, foiling policy makers best efforts to control them. Since it passed an 8% foreign buyers tax last summer, Sydney says foreign buying hasn’t let up.

Jon Ellis, chief executive of Investorist, an online portal for cross-border property transactions, said Chinese property buyers are an “unstoppable juggernaut”. In some markets with large Mandarin-speaking populations, locals can spot real-estate ads in Mandarin at bus stations and benches in the surrounding area.

…click on the above link to read the rest of the article…

How Chinese Investors Inflate Housing Markets in the US, Canada, and Australia, as Governments Try to Stem the Tide

How Chinese Investors Inflate Housing Markets in the US, Canada, and Australia, as Governments Try to Stem the Tide

The “waterbed effect” of money flows.

Top residential real estate brokerages in the US have been promoting US homes to investors in China for years. Brokerage firms in Canada, Australia, New Zealand, and other countries have done the same. Commissions are at stake! They have set up units in China and are partnering with Chinese real estate portals, such as Juwai.com.

Warren Buffett’s Berkshire Hathaway HomeServices, a subsidiary of HomeServices – the second largest residential brokerage in the US – entered the fray belatedly a year ago with a marketing agreement with Juwai.com “to syndicate all of its franchisees’ residential listings.”

And not just in the trophy cities on the coasts, but all of Berkshire’s listings, anywhere.

One of the properties it offers on Juwai.com today is this mansion on 8387 Ford Road, Superior Township, Michigan:

Scrolling down the page of any of these listings reveals four red buttons that lead to the crux of these deals for Chinese investors (so-so translations below):

  • Top left: Guide on how to buy a house in the US.
  • Top right: Guide with maps of school districts and housing around the “top 100” universities.
  • Bottom left: Guide for obtaining a US investor immigrant visa EB-5
  • Bottom right: Guide on how to apply for study abroad.

And these brokerage firms in the US, Canada, Australia, New Zealand, and other countries are doing expos and conferences in China to lure investors to make the leap. This massive marketing effort in China by these firms has worked like a charm.

Juwai.com predicts, according to the Wall Street Journal, that Chinese investors will plow $1.5 trillion into assets abroad over the next decade, with about half of that going into foreign property.

…click on the above link to read the rest of the article…

Olduvai II: Exodus
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Olduvai
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Olduvai II: Exodus
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Olduvai III: Cataclysm
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