Friday, January 23, 2009

Bank of Canada

Submitted by poppavox.

Just to put things in minor perspective.
The assumptions the BoC based its projections on are,,, baseless.
Garth reported Cdns are $1T in debt. The latest figure is $1.3T with housing slower and retail sales not as weak as the US consumer, credit card debt could easily have doubled in the last year from $100B to $150B. As bad as that sounds other countries are in worse shape as the BoC notes.
As we are all well too well aware our economy is export based so our biggest customer has to get turned around before demand for our commodities even start to address the massive government revenue shortfall from reduced commodity royalties and taxes.
Somehow all this is going to turn around in 6 months,,, all based on deficit spending by Cdn tax payers... I should add the GDP is directly affected by government spending so estimates of GDP growth is based on the possible size of deficit stimulus spending and not any increased production by Cdn companies involved in global trade or most small self employed small business and others.
It is only a `technical` increase in GDP but in fact it`s long term debt.
Further, deficit stimulus spending in a mild recession is only moderately successful when the needed results are understood and relative to conditions.
A moderate recession holds substantial risk by implementing deficit stimulus.
In a serious recession the odds of success are about as good as a hail mary after the gun.
The more stimulus with an increasing downturn increases the depth of the resulting disaster exponentially.
This `plan` so far doesn`t even meet the criteria of a mild recession compared to a global mild, moderate or worse downturn.
Conclusion, the government including all the tentacles in a desperate attempt to use deficit stimulus spending to cover the real deficit. Why else would they build such a ridiculous argument for creating a disaster unless it was their jobs the`re worrying about?
No deficit, cut government spending and balance the books. That`s the only good budget for Canada


  1. If that post had been up when I added the link to Paul Krugman in the last thread, I would have posted it here.

    There is only one addition I would make to Poppavox's last sentence: "... and the devil take the hindmost."

  2. Herb, you can repost if you wish. No harm in that.

  3. Herb

    Interesting article and thx for the link but I have to question the motive. Throwing labels around and blaming Bush seems a little bias when his plan was endorsed by the Dems and the media as the way to counter the economic attack of 9/11.
    In comparing Canada to the US I agree it does apply in a political sense. Following his direction on economic stimulus Krugman comes up short on the failure and result side of which hyper-inflation leading to WW3 increases with every deficit dollar spent is just one of the most serious aspects.

    Now for the trillion dollar question. Some estimates put total new national debt increases to exceed $100B. I`ve said all along it`ll be in the hundreds of billions.
    So the question is, how many billions are you willing to add to the national debt to support with deficit spending?

  4. C.O.,

    I have now posted the link on "Greater Fool". We'll see what the experts there make of it.


    the size of the new debt is "TBD" - to be determined, or as much as necessary. The whole point of credit, which is what deficit financing is, is to get money you need when you need it. We need whatever it takes to keep or to get people earning enough wages to get the economy moving again.

    The "no debt" approach throws too many people off and under the bus. What we have to decide is what kind of a country we want. Personally I would not live in an "everyone-for-himself" society. Mankind got out of the trees and has progressed so far by cooperation, not the competition that benefits the fittest. We are social animals.

    One of the key points Krugman makes is that "not enough" has not and will not work. He also zeroes in on wages as the place to insert the economic lever. Bailing out those who got us into this mess (like the $75B we are quietly slipping the banks) will do nothing for anyone else.

    One of the debates we should have some time is about a viable social contract.

  5. "... and the devil take the hindmost."

    I see you`re getting the message Herb.

    I`ve said all along deficit spending is a political gimmick. Our politician are quite willing to spend our childrens future to save their own jobs and `devil take the hindmost`.

    How many hundreds of billions are you willing to ok to save a broken system?

  6. There seems to be another side of the coin Herb.

    "The "no debt" approach throws too many people off and under the bus."
    That would be all the public service jobs created over the last 6 years will windfall resource revenue. Those funds are needed to support the people living in the bus lane, not to make government look like it has a handle on employment.
    "One of the key points Krugman makes is that "not enough" has not and will not work."

    Krugman blasts away at the Bush economic plan that the Dems endorsed on previous deficit spending by encouraging the Obama plan to spend the projected twice as much. It`s a nice spin for partisan politics but in fact Krugman endorses Obama running the Bush 2.0 program.

    "He also zeroes in on wages as the place to insert the economic lever."

    The US is 80% consumer based so there is some rational to supporting workers however Canada is not the US, we export 80% so Cdn taxpayers can`t support wages that are influenced by global demand. Same thing I said 6 months ago.
    The question of failure remains which keeps the question, how many billions are you willing to ok to support a broken system unanswered

  7. Poppavox, see my 12:57 above.

  8. It was long Herb.

    That guy is windier than me. Brain maybe??

    Going through it somewhat quickly with a duller than usual grasp due to being under the weather, I saw a lot of contemporary thinking, and references to what FDR did. That model is there and being followed somewhat, I guess to what degree was much of his point.

    The health care issue makes some sense, but is relative to the US first. His reference to taking an influential stake in the banks also makes sense. Or rather, Bush's approach not to, doesn't.

    The Freddie and Fannie thoughts I agree with and would actually address a significant aspect of the root cause and speed recovery. Money put into the hands of the most needy returning to the economy quickly is realistic, but how it is delivered and where it comes from are open for debate. The more that employment opportunities are utilized, the more effective it will be overall. Which supports the idea of leveraging the lenders to capitalize adequately. As well as the other considerations being batted around.

    As I said, much of his article is based on what is already being discussed, but the one area he neglected for the most part, is investment in Green technology and Green thinking, especially reducing dependence on Carbon based fuels. That plus changing and tweaking regulations to encourage more local production and less shipping. That being even more important here in Canada given our population and size of the country.

    It's good to build roads and bridges, and get Flaherty into the pot hole business, but overall ideas like Roberts maglift would be of more long term worth in my opinion. Not that it is the cure for all that ails us, but rather than just spend on conventional infrastructure, look down the road and deal with transportation, lessening the burden and costs of the traditionalinfrastructure, build toward Green and reducing oil/fuel consumption and begin setting the tone. The whole idea of developing and building facilities related to Green technologies will provide returns greater than many conventional projects I expect. Especially when oil starts it's upward trek again.

  9. Agreed on the premiss C1

    Forward looking green plans is a very good path but it won`t lessen the dangers of deficit stimulus spending with the excepting of some private expansions such as the BC run of the creel plans.

    As I`ve pointed out a global transportation makeover using maglev technology, it will not incur deficit spending, a point I`ve only blogged on minimally.
    The bottom line without distractions such as quantum level discussions on stimulus, if the government refuses to balance the books in this budget the people should go to the polls.

  10. "it won`t lessen the dangers of deficit stimulus spending "

    They are going to use deficit stimuli anyway. Why not spend it looking forward as opposed to seeing a great deal of it spent on projects that may be of dubious value? Plus conventional infrastructure building is rife with pork barreling.

  11. Greeting C1

    "Why not spend it looking forward as opposed to seeing a great deal of it spent on projects that may be of dubious value?"

    While I support spending for green teck advancement it won`t lessen the dangers of deficit stimulus spending such as hyper-inflation. As a matter of fact the increased cost of energy and subsequent products would increase the risk of hyper-inflation under current global economic conditions.
    I don`t feel comfortable increasing the odds of WW3 when other options are worth considering.

    As well we are already in deficit from creating massive numbers of public service jobs with commodity revenue to make the employment numbers over the last 6 years look good, that has to end with balancing the books.

    'They are going to use deficit stimuli anyway."

    Therein lies the problem, they fully intend on spending our childrens future on what makes them look good to support this broken system.

    Balance the books or election, seems reasonable for Cdns to expect what they voted for in 1993

  12. This discussion on deficit stimulus reminds me of a discussion that started 8 years ago with a warning to the feds not to ignore the report `For the Sake of the Children`.

    They ignored it and after instructions to the police to stop arresting our youth to bring the published crime rate down and even cooking the crime rate stats, BC has been hiding a justice report since November and they have no intention of releasing it till at least after the next provincial election.

    How many hundreds of billions of our childrens future are you willing to ok to support a broken system?

  13. Barb the proofreaderJanuary 23, 2009 at 3:30 PM

    Poppa, good item.
    “exponentially"... Exponential Growth is so obvious on the one hand, even kids understand it. But someone waves a wand and presto we forget the obviousness of where we’re going with growth.
    Short time ago, corporate deals jumped from tens of millions, to hundreds of millions, to billions, to..
    Now Pfizer wants to buy Wyeth for over $60 billion. They could buy Canada for that and drop the depression drugs (I think there’s a pun in there somewhere)
    And wouldn’t this practically make them, like, um, the ONLY big pharma company? Then they’d REALLY have those nose rings firmly in place to lead us all around.


    Reminds me, I forgot to reply to Dee:
    Dee said...
    “...the older version of The Shift. This one is the latest one:
    Now if you still don't 'get' what the Libs were trying to sell then I suggest you pray that your children, grandchildren and great grandchildren don't hold it against you for what is about to happen and what type of life or legacy you will be leaving behind for them. We are living in a day and age where speed of things 'happening' are hitting us so fast, so fast. The U.S. economy is a perfect example. And as time progresses it will get faster.
    Dion, a handful of Libs and the economists understood.
    This is the last time I will ever mention the Green Shift. But I hope it explains to those of you who never 'got it' why I supported the plan. Needed tweaking, I won't argue with you there. We needed to give ourselves and future generations the tools to keep up for what is to come.

    --JANUARY 16, 3:10

    Hi Dee,
    I couldn’t agree with you more. BTW I sent your video around, thanks for posting that.
    And with Herb’s “Krugman” article, the speed and need for good solutions becomes “exponentially” more apparent each day. Mr. Harper will have a hard sell no matter what he concocts Tues.
    I just listened to Ignatieff’s speech today and he came across very well.

    Big Pharma should wonder, are they throwing away $30 billion for nothing:
    Study: possibly a big reason that the costs of healthcare continue to outweigh the benefits we receive:

  14. Re: inflation etc. Now we enter the realm of dog chases tail. Many try, few catch it.

    Besides inflation, interest will rise substantially. Already is as pointed out in Herb's article. It's all been done before, and inflation is a key element of paying for deficits. The twofer buck. Inflation is also awfully hard on old folks obviously, but who cares about them.

    So, they finance overpriced houses with fiat money, inflate investment vehicles based on speculation then sell at huge profits. Step back, let everyone else take the fall. Wait for the collapse, and buy up the gems before the inflationary cycle hits. Then mortgage all the good stuff back to the peons at inflated prices and wait for another round of just deserts.

    Nice game if you are on the right side of it.

  15. "Then mortgage all the good stuff back to the peons at inflated prices and wait for another round of just deserts."

    No doubt the root cause of most global conflict is corruption. As I`ve previously noted the peons would be content if it was kept down to a dull roar. I initially ground out the basics for an alternative to this repetitive cycle, maglev. A substantive and sustainable global revenue generator as an alternative to jumping right in with a world governed by the rule of law.
    I still have my hopes high. Obama printed up a record amount of hope bucks, bamabucks.
    They are very inflation sensitive and will go quickly. The overall advantages the maglev system is the alternative to the same old cycle, but most importantly it will print up bamabucks in ever greater record amounts,,, globally.
    It would be hard to imagine Obama not champing an opportunity print hope faster than the depleting supply. The hope a global transportation makeover would supply in the form of sustainable revenue sources that could and should be cheaper to use than our current system is only one aspect. The other is global warming.

    I`m still hoping we can all be on the same side of the game.

  16. Poppavox,

    just to level the playing field, I outright reject your "premise" that we are going to spend 100s of Bs to fix or support "a broken system." That is not even a reductio ad absurdem, but simply a rhetorical exaggeration.

    We are either going to shut up and suck our thumbs, or we are going to have to spend your 100s of Bs to try to get the economy going again. There is such a thing as an economy, and there is such a thing as a federal government that happens to be the only organization in this country that can tackle this problem. You never answered my question of what this country would be like without the federal government that, to your mind, has been a waste of rations over the last 40 years.

    Maglev might work, but it won't save Canada for your $500M. Green is great, but we have got to do something to get there from here. There are hundreds of boffins at the National Research Council who might have great ideas just shy of implementation. But people have to have enough money in their hands to house, feed and take care of the children over the next couple of years, or you won't have to worry about them being able to pay our national debt in the future.

  17. Barb the proofreaderJanuary 23, 2009 at 4:31 PM

    '..old folks, but who cares about them.'

    And why bother with a listeriosis inquiry into a few dozen deaths

    "An independent report was to have been tendered by March 15" in a solemn pledge by the PM. Since then, there has been virtually no action taken."

    Big Corps don't want to worry about listeriosis, nor should they, after all, bacteria are very tiny. Did grandpa ever clean his cleaver?

    But wait a minute.. The PM did have time to research, interview and meticulously vet and annoint 18 senators. Hmm, maybe he coulda thunk about those listeriosis victims instead of dreaming of his new kingdom.

    Fifty days to your deadline Mr. Steve. Is that enough time to dedicate to a real report into 20 listeriosis deaths? Please remember, you have to ask scientists to write it, not your ad company.

  18. I think we as Canadians have to focus what will work here in Canada. We can look to the others as a guideline but not as a solution.

    What has saved our hiney is our health care system, OAS, and EI. I never understood why so many people bitched about how large the EI account is or was. It's the type of thing that was developed for economic conditions such as this.

    Health care costs in the U.S. have literally made people homeless. The reason why some people have been unable to pay their first and second mortgages is because of their health bills. A vicious circle for those who get sick in the U.S. Our system here in Canada may not be perfect but it sure it a lot better than what the U.S. has.

    I understand where you're coming from about running a deficit and the kiddies. But we have look after the parents so They can look after their kids Now. We need to get our savings rate up in this country.

    We need tax cuts, I was against it but now I think it might work given our economic pessimism as a population. People will pay down their debt and park the rest in the new fangled savings account or spend on badly needed household goods. It will give some a little breathing room. We have to change how we look at consumerism and how profit is made.

    I disagree with you about the hyperinflation, poppavox, with a stimulus. We have to worry about deflation which far worse than hyperinflation if we don't have stimulus. If we start cutting jobs anywhere there will be more unemployed drawing on EI and spending less on goods like food. Once the EI runs dry what next? Welfare? If there's a lot of people on welfare then that puts strain on the local municipalities and therefore property owners because property taxes will have to go up.

    Hope that made sense?

    Krugman is pretty good, for an economist.;)

  19. I think it fair to say Obama's first efforts have to address those in crisis or on the brink, then ramp up. Projects such as Green initiatives may be less imperative in the US due to an array of circumstances. Not the least of which will be the number of hats held out.

    Lincoln said it well. Too many pigs, not enough teats.

    Here in Canada I really think we should get serious about wind, water, solar and get the lead out on biofuels. Now that the mask is off regarding what was causing food shortages, I see little reason not to encourage this. Except fuel that people can make themselves might not be too popular with some corporations. And you drink it too!

    We had a warning of what is to come in the area of energy prices and it's effects, now we have a reprieve. If we don't act now, who do we blame?

  20. Glad you liked the musical posts Barb. Just something a little different and Stan Rogers is one of my favorites. I approved your comment, but don't which thread it went to.

    I was thinking about what is coming and that if this blog attracts some younger readers, it might to be nice to focus a bit on getting through bad times. I have had lot's of experience with that.

  21. poppavix

    While I agree with some of what you say I disagree with your conclusion.

    First there are three types of stimulus each with different effects on the economy. First increasing payments to those on government assistance and all others in the bottom 25% of incomes will result in the money flowing into the economy within a few days of them recieving it. Second is income tax cuts which will see less than 25% of the money flowing into the economy in a few months and direct spending on infrastructure which after government costs and profits see less than 50% of the money flowing into the economy in a year or more. Finally there are cuts to consumption taxes and business taxes which end up in company profts and less than 5% ever make it back into the economy at some point in time. If you base your opinion on success or failure of stimulus packages world wide up till now with this model in mind you are correct in saying they have been a waste of money! Instead of trying to prop up the old economy many countries including the states and Britain are finally looking at nationalizing banks and creating a one stop toxic loan centre which finally forces them to start looking at how they can deal individually with some of the underlying problems. Until governments start looking at helping those too poor to help themselves and those trapped in the web of corporate greed because they blindly followed what they were told and now face bankruptcy in some form or another, any money spent to try and revive the economy is a total waste.

    I have to run some errands so will continue this later.

  22. La-la-la.....I can't hear you....

    Would work if people had the outlay to upgrade. D'uh!

    I thought Britain was already in recession before today's announcement that they are in recession. Go figure.

    There was a really good post by someone on Liblogs about wind energy and the cons of it. I personally don't like wind. High maintenance costs and that whole creepy chaos theory.
    I would like so see our grids connected across the country instead of mishmash. I'd also like to see a solar panel on every building/home in this country along with net metering. The costs would be prohibitive not to mention the logistics. Probably still cheaper than building a couple of nuclear plants.

  23. Gday Dee

    Yes the questions make good sense.

    "I disagree with you about the hyperinflation, poppavox, with a stimulus. We have to worry about deflation which far worse than hyperinflation if we don't have stimulus."

    There is a very strong consensus by people that knows the intricacies of deficit spending far better than I, they rate the considered deficit stimulus spending causing hyper-inflation at very high.

    "If we start cutting jobs anywhere there will be more unemployed drawing on EI and spending less on goods like food. Once the EI runs dry what next? Welfare?"

    If you`ve come to that conclusion then you must have considered how many hundreds of billions you`re willing to ok to support a broken system. If you have yet to consider an amount consider the light at the end of the tunnel is a decade down the road, or hundreds of billions in deficit spending to keep government spending at the same rate that windfall commodity revenues allowed.

  24. wayupnorth said...
    Your list of stimulus is accurate and certainly protecting the vulnerable should always be a top priority.

    The current estimate of the $13B deficit is what is good for government such as the employment numbers by hiring hundreds of thousands of public service employees using windfall revenue. The majority of further deficit spending will continue to flow through government in spending to continue to make them look good.

    The only good budget for Canada is to balance the books, not deficit spending that will do nothing but support a broken system.

  25. Herb said...

    just to level the playing field, I outright reject your "premise" that we are going to spend 100s of Bs to fix or support "a broken system."

    Always nice to have your pov Herb. If you recall on Garths blog when deficit broke in on the conversation it was only a few billion. I said at the time that will soon escalate. when the coalition announced the need for $32B in deficit spending I said that was just seed money, it`ll go into the hundreds. A very credible report put the top end at $105B but tempered it will a global recovery within a short period of time.
    It`ll be in the hundreds of millions if government continues to spend at preapocalyptic commodity prices and that`s exactly what government intends to do.

    In all honesty Herb if the system isn`t broken why can none of us give one good example of what the government has done right over the last 40 years? Obviously it`s been one failure, scheme or scam after another, that is the veritable definition of broken.

  26. Herb, typos on the last, millions should be billions.


    Everytime deficit stimulus spending gets notice commodity stocks go up as a hedge against inflation and in preparation for hyper-inflation.

    Between the experts and the big money tickling inflationary hedge stocks I`d put the odds of hyper-inflation at very high and directly related to government stimulus spending.

    I mentioned this to you on GT blog and it`s still holding true.

  27. Herb said...

    "You never answered my question of what this country would be like without the federal government that, to your mind, has been a waste of rations over the last 40 years."

    Sry Herb but I`ve gone over notes and I can`t find your original question. The issue I`ve raised is what this country is like after 40 years of wasted rations. Corrupt political system, corrupt judicial system and the next generation facing the highest mountain to climb in Cdn history. Top that all off with deficit spending supporting this broken system.
    The fact we need change leaves me little time to speculate on where would we be if we changed 40 years ago.

    I could write a book but the summary question would still be, what has the federal government done right over the last 40 years?

  28. poppavox,

    I don't like it when governments come up with balanced budgets. Flaherty always had balanced budgets and then there was that nice surprise when he left.

    Households don't have balanced budgets. They either have negative or positive. In our household, Canada, we've been enjoying surpluses for a while.

    I don't agree with the conservative economists. To be fair I don't agree with too many economists in general. We'd have been better off seeking the advice of fortune tellers. Spend, spend, spend baby. Please.

    Reallocating the 13B and not adding to it?? Sure, I'm all for bringing our troops home tomorrow or getting rid of Harper. I think either would be ideal. 13B could be used to bump up the EI weeks and fill potholes.

    Let's see what the budget brings. Right now they're just throwing numbers around.

    I really hate hedge funds but I know they are a necessary evil. Greed at it's worst.

  29. Dee said;
    "I really hate hedge funds but I know they are a necessary evil. Greed at it's worst."

    From multinational corporations to the financial industry such as hedge funds they all have one thing in common, research on an ongoing basis. The overall trend is a tell on what the bulk of research is saying. Throw in a dash of momentum and a sprinkle of sentiment, a dollop of supply and demand, discount political rhetoric, weigh that against the trend and the real picture emerges.
    The global demand for commodities is still going down, the value is a hedge against inflation is driving prices not consumption.

  30. Dee said;
    "I really hate hedge funds but I know they are a necessary evil. Greed at it's worst."

    From multinational corporations to the financial industry such as hedge funds they all have one thing in common, research on an ongoing basis. The overall trend is a tell on what the bulk of research is saying. Throw in a dash of momentum and a sprinkle of sentiment, a dollop of supply and demand, discount political and special interest rhetoric, weigh that against the trend and the real picture emerges.

    The global demand for commodities is still going down, the value is a hedge against inflation is driving prices not consumption.

  31. Barb the proofreaderJanuary 23, 2009 at 8:49 PM

    The other day you had a good question... “Why would someone with Ignatieff's academic credentials, "public intellectual" standing, and long and successful out-of-county career suddenly descend into the cockpit/pigsty of Canadian partisan politics? ....... I wish C.B. Innes were here, since he/she knew more about political theory and economics than the rest of us.” ~ by Herb, JAN. 21, 2:43 PM

    I share those thoughts too. C.B. had a good (academic?) perspective on political ideologies. Sometimes I’d pose a question specifically expecting C.B.'s assessment.

    BTW a good way to get to know Ignatieff, he’s written extensively in the NYT's on the net, a series of articles.
    And here’s a Montreal lecture I found, you’ll probably be interested in it, hope you have PDF. You be the judge:
    “Canada in the World: The Challenges Ahead”
    A clip from it:
    “We need to remember simple things: why we need a country, why in all the loose talk about a globalized, borderless world, national identity matters so much. Because nations are what keep us free, what keep us safe, what give us purposes larger than ourselves. Individualism is not enough. The good life is not enough. We need the bigger frame, the larger meaning, the purpose that gives a sense to our lives. The name of that purpose, that bigger frame, that larger meaning is Canada, our beloved home.”

    Herb, just for old times sake, here’s one of C.B.’s answers, although I have several favourites:

    “..the central banking system failed not because of regulation but because those in charge begin to act on inaccurate assumptions: that greed was good; and that it would be controlled by the inherent integrity of businessmen. Traditional conservatives believed that people of all social and economic classes were not perfect and government was required to create standards of behaviour. Modern conservatives are idealists who believe that the those who achieve elite positions in the economic hierarchy are unlikely to be fallible and hence are entitled to much more freedom than other classes.”

  32. Poppavox,

    I don't know what you expect a federal government to do. What ours has done is kept us at relative peace with the world, kept us relatively honest and from each others throats internally, raised taxes and spent most of those on the common good (75% of revenues go to statutory requirements, leaving 25% for all discretionary purposes - did you know that?), made sure that the poorest provinces have enough money to keep education, health, etc. and two levels of government going maintained a social safety net (remember the time before meaningful pensions and universal health care, Robert?), and kept our reputation in the world second to none.

    I gave lived in three other countries in my working life (Germany 12 years, Austria 7 and Cyprus 1) and visited a slew of others, so I know how our federal system and government compares to a few others, as well as our place in the world. In the words of Old Bill, "If you know a better hole, go to it."

    No individual nor collective is perfect. Having been around this horn with you for nearly two years, I suspect that the only federal government you would be happy with is you governing yourself alone on a desert island.

    To refresh your memory, here is the copied entry from Garth's blog:


    I’ll play your game once more, but will give you a null hypothesis to play with:

    Imagine that there had been no federal government during the last 40 years. Would we be better off to-day?

    By Herb on 12.24.08 1:36 pm"

    I'd be quite happy to end this "feud" if you either stopped pushing the same view or provided some evidenc for it beyond studies on father-denied children.

  33. May Barb the Proofreader forgive the missing comma (between "going" and "maintained" in the first para) and two typos in my last, but I was getting testy.

  34. Herb said...

    I don`t consider this a feud Herb and the competency of the federal government to implement a plan even if they had one is very much on topic.
    I`m more than willing to discuss the issues of this thread or on one of another topic you might start.

    The first thing I noticed is your polar change of position.

    "What ours has done is kept us at relative peace with the world, kept us relatively honest and from each others throats internally, raised taxes and spent most of those on the common good"

    Sounds peachy Herb for about 40 years ago, today it`s but completely out of touch with reality.
    The current state of affairs is massive deficits, the highest number of parent denied children soon to be outnumbered by seniors, global warming and a host of major problems etc etc etc.
    Your respect for CB blaming our demise on corporate greed vanish? Have you changed your mind now that Chretein authorized government corruption? Federal policy Herb created the exodus of international investors so I have a hard time understand where you get the rosy picture of a failed system, denial perhaps?

    "No individual nor collective is perfect. Having been around this horn with you for nearly two years, I suspect that the only federal government you would be happy with is you governing yourself alone on a desert island."

    Does that personal attack in any way relate to the facts on the thread topic, the BoC hoax of a recovery supposedly only months away and reported many times by msm ?

    Here are the facts again. Any increase will be as a result of government deficit spending, not an economic recovery. Spend $30B and it adds about 2% to GDP, that`s not an economic recovery.

    As a further note you might want to consider I wouldn`t be against targeted stimulus if it tied into an overall plan that would lead to the future we should be leaving the next generation.

  35. Brutal. Sickening. Horrific. Terrifying. Frightening. Revolting. Mass Pandemonium in the streets. Yes indeed. I am referring to . . .

    #15 Harry S on 01.22.09 at 11:10 pm

    on Garth's blog. La hairymeister still lurks in the vicinity. Please ignore, and it will morph into a used garbage bag.
    Excellent link from -- "Where You Won't Shop In 2009" --
    I have seen a few articles on the pros and cons of windmill power, but this 30-second video shows what can happen when things do not go according to plan. --
    First, Iceland -- -- Now, Mexico's citizens are beginning to vent. Besides, they are in a pea-souper big time. --

    Talk of inflation rebounding -- -- but, as usual, talk of hyperinflation is barely mentioned. Look at Zimbabwe -- clear as mud.

    "The Gyroscope With A Broken Leg -- Look at Russia before the Bolshevik Revolution. Look at France before the French Revolution. Look at the United States today. Yeah …I could come up with a lot of illustrations but I’m counting on you to get my point. --

    If the pound continues tanking -- the UK is on the verge of a depression -- does that mean a return of inflation to boost the pound, then hyperinflation? --

    Very interesting. Para. follows. --

    "Back in 1971, the USA printed and spent far more paper money than they could cover by gold. When the French demanded redemption of their dollar holdings in gold, the USA discovered that they could not honour the debt, thus committing an act of bankruptcy. So the USA went to the Saudis to cut a deal -- we’ll keep you in power, no matter what you do, as long as OPEC denominate all sales of oil in US dollars (which was termed as Petrodollar). The deal was done."

  36. Herb said...

    "either stopped pushing the same view or provided some evidenc"

    I have been posting evidence, early August 2008, when the August numbers come out in late October we`ll have a definitive picture. October 08, cash is good. Late winter 09, our economy is on thin ice. Early July 09, the melt is on. With all these I`ve posted data the evidence. A great many read and understood so perhaps the problem lies with you.

    We have abundant raw resources at the back door of our factories with the worlds best customer at the front counter yet our manufacturing can`t compete even with American companies unless they have a currency advantage.
    This situation developed because of a lack of investment in Cdn companies. The loss is completely the response to decades of federal government policy.

    I can`t see how you call that result the function of a performing system, I call that broken.

  37. Sidetrip to Gaza -

    Gideon Levy examines the results of the Israeli invasion of Gaza in Haaretz:

    The conclusion is that Israel is a violent and dangerous country, devoid of all restraints and blatantly ignoring the resolutions of the United Nations Security Council, while not giving a hoot about international law.

  38. Herb, did you mean for the 9:14 am to go in the next thread?

  39. I did not see the next thread when I posted the 9:14 comment - time difference? Of course it would be more appropriate there.

  40. Back to the “feud”, for a last time –

    WHAT “polar change of position”, Poppavox? You keep on raising unproven-to- unfounded allegations as if they were established facts.

    Item: “… massive deficits, the highest number of parent denied children soon to be outnumbered by seniors, global warming and a host of major problems etc etc etc.” solely the fault of the federal government of Canada? Of course you have no problem proving it, because you have never tried.

    Item: “Your respect for CB blaming our demise on corporate greed vanish?” Where did you get that one, and what’s the point? I do not recall ever in my life lauding greed, personal or corporate, in any way or form. What are you talking about? Incidentally, assigning blame to corporate greed would be a lot closer to the mark than assigning it to the federal government.

    Item: “…now that Chretein [sic] authorized government corruption …“ Nice stretch of the imagination with a basis in fact limited to Adscam. A propos of what?

    Item: “Federal policy … created the exodus of international investors…” Once more, with feeling: investment is governed by the bottom line, which has nothing to do with justice, especially family law. Finally prove your “No justice, no investment” mantra, or stop reciting it. Noting that two things may have occurred concurrently does not establish a causal relationship between them

    I readily concede that the “personal attack” does not relate to the Bank of Canada “hoax” that was the subject of this thread, which you then expanded into your usual roundhouse attack on the federal government that you maintain screwed you and all of Canada. The personal attack relates only to your way of argumentation. Saying that a specific “stimulus” will not work is one thing, saying that the federal government won’t work is another.

    We have serious problems on our hands. Let’s try to deal with them with fact and logic and leave the personal conviction out of it.

  41. Herb said...
    Back to the “feud”, for a last time –

    Agreed, the last time.

    Normally after repeated demands for repeating the details I usually say prove me wrong. In this case the results all ready prove me right.

    Thanks for your participation on this topic.

    Great link on hyper-inflation Charles.

    It backs up what I`ve been saying for over a year.`If we don`t put (at that time) the $14T sitting idly in cash accounts it will turn to bullets and body bags as investment. It`s a big reason I`ve been promoting a global transportation makeover with maglev as the release for this pent up energy in the form of cash, avoiding WW3.

    This means big inflation is coming, it's already baked into the pipeline. Too distracted by deflationists who have no dictionaries and hence don't even know what the word "deflation" really means, Wall Street hasn't realized the real threat is inflation yet. But when it does, capital should rapidly flood into investments that thrive in inflationary times.

  42. Some thoughts on the article Big Inflation coming.

    No mention of effects of growing unemployment and shrinking money supply in the hands of consumers. No comments on the effects of shrinking cash in hand to those falling off of income supports such as EI and lowering of benefits for recipients of Social programs, which we all know is coming.

    As you have argued, the stimulus moneys will be inadequate to achieve righting the economies by themselves, so to argue they will be the basis of hyper inflation is arguing against one’s own point of view. At best, they could only contribute to an eventual turn around and marginally toward fueling of the inflationary cycle.

    What will fuel inflation eventually, is the flow of the now dormant cash back into the system as it swoops in to pick up the bargains and take advantage of a resurgence of economic activity. .

    He doesn’t define deflation, but then goes about using all the deflationary trends and causes for, in defense of his position that we will have inflation rather than deflation. An odd approach given the deflation we currently have. He seems to be saying an apple can only be an apple if it’s a red apple. Never mind if it tastes like an apple. It doesn’t matter a great deal how bub defines deflation, when prices for major assets, commodities and retail goods goes down significantly, and continues to do so for an extended period, that is deflation.

    The only inflation I see right now is for day to day / grocery items and year over year, oil and energy costs, and that relates mostly to charge what the market will bear, and adjusting prices upward to compensate for falling demand. Which has little relation to money supply as he refers to it, or government stimulus. As we go forward into this period, the false prices will adjust as many of those trying to prop themselves up thusly, will fall by the wayside and competition between survivors will grow.

    I can’t see a great deal of logic in that guys thought process for the interim. His views are only relevant later down the road, and we are a ways away from that right now.

  43. I peruse garth's site occasionally for funny stuff and to count the tail feathers. I saw this today.

    #14 nonplused on 01.24.09 at 12:21 am

    Thank you coalition!

    I guess if the majority wants a deficit, then the majority gets a deficit, even if the minority government doesn’t want one.

    Haa Ha! I wonder if there's a new election slogan brewing in there somewhere?

    Flip Wilson used to say, "The Devil made me do it".

  44. All good points comrade which perhaps explains why politicians won`t talk about the consequences of failure, the results are not yet crystal clear.

    As noted I`ve only gone so far as saying hyper-inflation is only a possible outcome even though the article is correct in saying big inflation is baked in.
    The points you bring up give good reason for not having high expectations of big inflation even though the possibility exists.

    My jets are someone cooled on big inflation after commodities peaked in June 08. Leading up to June big inflation had some legs but after it fizzled I kept my expectations moderate, but still a high enough risk to be concerned.

  45. What gets my juice going about deficit stimuli is why. How it came to pass. I guess most who pay attention now understand the housing bubble and markets tanking and maybe even changes in credit but those are only the illnesses that developed as a result of the root causes. That which should never have happened. Which were in the hands of governments, central banks and corporate sky pilots.

    Even someone such as myself who has a general understanding of things and considerable experience believed that these things couldn't happen. Simply because I had read that the crash of '29 could never happen again, that governments had instituted measures and created watch dogs that would prevent such things. Can you say derivatives? Ali Baba Madeoff with the goods. Regulators? What regulators?

    I guess I believed them because I couldn't see how another depression like crash could work to their advantage. Now I do.

    It's not always the big things that governments do, that shake the earth. It's what they slide under the radar. And they put Conrad Black in jail. What a farce.

  46. Good discussion and No fighting. I like.

    Poppavox makes a legitimate argument about inflation but it won't occur for a bit. People are too skittish right now. Greed is going to push up the price of commodities all at once. But you know what? There is excess supply out there. A lot of countries are and have been hoarding. So who is going to buy something they don't need? Yes, we're going to be spending money but on what? We don't know that yet except for the little blurbs the Cons choose to leak out.

    Someone mentioned food prices? The reason the cost of food is going up is because the cost of leveraging has gone up. Remember my post presenting various scenarios with probable outcome questions?

    When I was at the grocery store last night I noticed such things as flour, sugar etc.. were at the same prices, high. Items like fruit and veg? Higher. Also, I noticed that they reduced the weight of goods but not the prices. Can't buy 1kg cheese anymore it was reduced to 900g then 750g. I also noticed how cheap processed food was. North Americans are already fat and now are going to get fatter. They couldn't even leave chocolate bars alone, they had to put petro products in....Ice cream is another pet peeve but I'll save that rant for another day.;)

    There will be another war. Lots of stuff going on that is falling under the msm radar. But when presented with 5 second sound bites who bothers to connect the dots? Interesting times we're living in Comrades.

  47. Hey Dee

    Grocery is one of the items I was referring to as having gone up. The problem there is that no matter where you live in Canada there are only 2 or in some cases 3 players in the grocery game. Most areas it's only 2. There is the odd independent here and there but very few these days and they have to buy from the wholesale divisions of the big 2 or 3. This is one way the big chains forced the smaller ones out or were able to buy them. They do this by setting the wholesale prices high enough that independents can't make enough and still compete with the giants retail stores.

    So even if sales drop and demand for all the specialty goods declines greatly, the consumer is still going to have to pay sufficiently high prices to support the survival of these giants.

  48. Barb the proofreaderJanuary 24, 2009 at 6:34 PM

    Herb, you posts are so easy to read I never even noticed.
    Besides, I'm not a proofreader, I just used the name as a joke the first time I ever posted. My husband had recommended Garth's site. I'd never read blogs before.
    I noticed Mr. Garth had made an error so I emailed him. That guy had the error fixed, I swear, within a minute, and he even emailed me back to say thx.
    Shortly thereafter, I decided to post my first ever comment, and couldn't think of a name. So as a joke I just wrote "proofreader" with a winking smiley face I think. Anyway, stuck with it.

  49. Hi Barb,

    To expand a bit on what you said. I think we all owe some gratitude to Garth for his efforts. Sometimes I wondered about a fellow his age, similar to mine, managing to do all that he did.

    He brought together a cross section of people from various walks of life which represented a slice of Canadian society. In order to make that grow, he had to allow a great number of things to enter his blog world that detracted from the immediate goals, but augmented the long term goal.

    Such is why I have attempted to continue a portion of that. As someone with varied experiences, and insight I appreciate the strengths of the people who gathered together under that tent. Even those, I didn't always agree with. Some had a story to tell too.

    Unless we listen to the others story, we can't expand our perspectives and our wisdom.

    If the Revolution is ever to begin, it must have talent, and it must have people with profile. It must also have people who believe. Not blind faith, but people who truly believe.

    If only I could manage the talent that came to Garth's blog, void of the influences of the manipulators, we would move forward. An inch at a time.

  50. Garth was the victim of his own success. His digital forum was a stick in the eye of the Harper School of Politics, so he had to be destroyed in the old-fashioned way, by separating his constituents from him by lies and promises. The darn thing is that his constituents were dumb enough to let it work. Digital democracy is not yet ready for broad consumption. His forthcoming Sheeples book should be a humdinger.

    Poppavox wondered why Garth closed his forum when he did. My personal theory is that Garth has turned his back on politics, at least until he thinks politics is ready for his style. I noticed the Xurbia return address on my book order and asked him to confirm the personal political implication. He didn't reply at all, which is a sort of confirmation in itself. The address is a nice residential home in a riding about 100 km from Halton. That riding is held by a middle-aged local Liberal who just started out in 2006, so I don't think Garth intends to run there.

    With the federal political situation up in the air, Garth seems to be concentrating on his strengths - writing, lecturing and moderating on financial and economic matters, and running his new mail-order business. At this point, railing about politics would be wasted time and effort on his part. Consider the possibility that he is putting his money where his mouth is: politics will be insignificant “after the crash.” And I’d like nothing better than Garth to tell me that I’ve got it all wrong.

    I think that Garth the MP and Garth the Political Blogger are losses for democracy in Canada. It would be nice if his defeat were the last hurrah of old-style partisan politics, but I see no grounds for such a degree of optimism.

  51. To the Revolution Herb. An inch at a time, but that is what Revolutions are made of. People who see where it needs to go, and work toward finding a way.

    Democracy has to be the key to it all, and the necessary revisions are what we must strive toward.

    So much to learn, so little time. So many great thinkers, so few who remember.

    An eye for an eye will make the whole world blind.

  52. Comrade One said...
    An inch at a time, but that is what Revolutions are made of.


    Time well wasted as a single voice blogger.

    This thread centered on the BoC hoax of a recovery when in fact it`s based solely on deficit spending. Misleading terms like `recovery package` or `stimulus spending` or `rescue` are erroneous. In fact deficit spending is only a bandaid, the bigger the deficit the bigger the bandaid. The definition should meet the potential, and we have consensus here that certainly we can`t spend enough to stimulate our economy given current global conditions. Even the $100B`s I project won`t make it past the bandaid to tourniquets size.

    This spin of doing something is better than doing nothing.

    There is absolutely every reason to believe any deficit spending will only compound the damage the 40/0 mortgage is causing with our financial institutions. There is every reason to believe the larger the deficit the larger bandaid the larger the problems. Even if there was some small reason to believe deficits would have some small benefit to some small portion of society, the politicians would use ever dime of it on partisan politics. No reason to believe anything else, as Garth said, "that`s the way Parliament works".

    Without the spin we are left with a system broken beyond repair that intends on spending our childrens future to save itself.

    The spin `an inch at a time`, `incremental change`, `stimulus spending` or the system fixing itself all have the same chance of success, a snowfalls chance in hell.

  53. I, Charlesius said...

    -- and -- ". . . why politicians won`t talk about the consequences of failure, the results are not yet crystal clear."

    From my vantage point, the consequences will be a repeat of 1931 - '32 and on, thus leading to WW3.

    Charles it seems our view unless it agrees to some political entity is irrelevant. The political chess masters won`t release their view on failure unless they are crystal; clear and cannot be disputed.
    Even after crystal clear we then must go through distract, dismiss, deny.

    btw have you noticed how flamed the Liberals are over Harper conceding massive deficit spending to their demands. It really irks them to know Harper is going to use the scam Trudeau invented in creating programs and not funding them.
    The political game never changes, it just gets worse. A system broken by corruption will not fix itself and another 40 years won`t change that fact.

    Forget country before Party, it`s survival of government before survival of the people.

    From another site on the extent government survival takes precedent over people, specifically the next generation Ottawa plans on indenturing for life with massive deficit spending.

    British Columbia hides justice report

    As previously documented on Canada cooking the crime rate starting with instructions to the police to stop arresting our youth to misrepresenting the data, they have now taken to just plain hiding reports.
    The BC government has been in possession of a justice report since last November and has still no intention of releasing it or stating when it will.
    We told them what the results of ignoring the report `For the Sake of the Children` and caught them cooking the crime rate and now hiding reports because we were right.
    With mischief from the generation we warned about up 39% in Vancouver last year over year it`ll take more than hiding the reports to hide the results.