Author: Richard

In part 1 of this post we focused on the need for exponential growth and the monetary system behind our need for this type of growth. We learned that the monetary system in it’s current form is a textbook definition of a Ponzi-scheme requiring ever growing production to meet ever

In part 1 of this post we focused on the need for exponential growth and the monetary system behind our need for this type of growth. We learned that the monetary system in it’s current form is a textbook definition of a Ponzi-scheme requiring ever growing production to meet ever growing debt at the top because at any given time there is always more total debt with interest than there is actual currency to pay for it and the only way to conjure up the currency needed to pay outstanding debt is to borrow even more currency resulting in a never ending cycle where the debt load and subsequent “growth” required are perfectly exponential.

In part 2 of this post we looked at the resource wars currently going on with a focus on it’s relation to peak oil and pipelines. The 14 year ‘war on terror’ has really been a resource war for the U.S. empire to position itself as the first and last global empire that is to be succeeded by corporations as we learned in Michael C. Ruppert’s presentation.

In this part we’re going to look at the T.P.P. and free trade and how the process of succession towards corporate governance has already begun under the auspices of ‘trade’. We will take a quick look at the party positions on trade and how those positions tie into assertions already made.

Just a note before we begin: I realize this is now part 3 and I’ve said very little about the election itself. What I am providing is the background information you require to understand why I believe what I do regarding the election and the parties involved so that when we finally arrive at my summary of my position on the various parties you’ll understand what it is I’m talking about.

T.P.P. and Free Trade

[…] many of America’s leaders actually accept that there is an unelected, unappointed, and unaccountable presence within the system that actually manages what is taking place behind the scenes. That would be the American deep state.

Philip Giraldi

Recently the New York Times (of all places) published an article about a paper written by former CIA officer Philip Giraldi about the American deep state. Of course readers of this post already know all about it as it is the very same deep state Michael C. Ruppert describes in his presentation. An interconnected deep state of revolving doors around Wall Street, Washington, intelligence, media and the military industrial complex. It is within this deep state that the continuity of government is possible and it exists here in Canada, too.

In the last post I linked to a tweet containing a video where the CBC discusses on air the “brutal reality” of the civilian casualties that will happen to fight ISIS and then goes on to talk about how we have to remove Assad (you know, for killing civilians in his true fight against ISIS which western media continues to call a “civil war” even though it’s clear it’s anything but). The “Assad is bad” narrative makes less and less sense every day yet our media sticks to it. This is the official narrative; this is war propaganda and the deep state at work.

It’s important to understand how deep the complicity of media goes within our own country to understand that this extends to discussions of free trade (or the lack there of). In the media these are referred simply to “trade deals” but they are really about far more than trade. They subvert national sovereignty and hand it over to unelected, unaccountable international panels that bend to corporate whim. Piece by piece each additional trade deal removes the ability for the people of a country to make democratic decisions about the type of business conducted in their country.

These deliberations are kept secret and rarely if ever reported on even though the result of them is almost always a democratic law being overturned or taxpayers paying fines to corporations for all sorts of reasons which the corporation claims impedes their business. On the flip side attempts by democracies to utilize the rules to hold these very same corporations accountable are in every case I’ve ever found thrown out.

‘Trade’ is the mechanism being used by corporations to subvert democratic governments in secret of willing participants of the U.S. empire because it hides the process from the citizenry. Trade is a weakness in our democratic process in that traditionally trade deals are allowed to be conducted in secret thus the details of which are not apparent to the citizens of the nations until the deal is already signed. Rather all we get are vague details from leaked drafts of the deal or statements from those who are involved.

What I say to the auto sector in particular, I’m not suggesting they will necessarily like everything that is in that, but what I am saying is we simply cannot afford as a country to have our auto sector shut out of global supply chains. That would be a disaster.
We’re going to make sure we get the best deal for that and all of our sectors, but we are committed as a government to making sure we do not fall behind in our access to a global trading economy which is so integrated. If we do that, that would be disastrous for this country.

Stephen Harper

Yes, it is “so integrated” largely due to the actions of those now making it more integrated. The secrecy surrounding these ‘trade’ deals ensures that no real discussion can ever really take place as any real concerns that come to light can easily be swept away with generic statements like “but what I am saying is we simply cannot afford as a country to have our auto sector shut out of global supply chains”. The secrecy and deliberate confusion that is sewn provides the framing of all those against ‘free trade’ as against the concept of ‘trade’ itself when the truth is that those of us against ‘free trade’ are against it for all of the reasons besides actual trade that come with these deals. Wrapping the subversion of democracy in the cloak of trade is what is really going on.

You’ll remember in part 1 of this series that we took a brief look at Justin Trudeau’s pro free trade op-ed in which he asked the “vexing question” where the next wave of growth will come from. Politicians complicit  in this agenda aren’t lying when they talk about the growth ‘free trade’ will bring, the part they’re not telling you however and as Trudeau pointed out is that the “middle class” will not be benefiting by the “growth created by trade”. This growth will go purely to the top end of the international corporations subverting the democratic process for profits and control and to keep the economic ponzi-scheme operating.

If the resource wars are how the U.S. empire’s deep state aims to maintain dominance in the world among non-voluntary state actors it is free trade, along with the central banking ponzi-scheme and credit markets, which is the mechanism of accomplishing the same thing among voluntary state actors. Their implications run far beyond simple trade and aim to incrementally move more and more control of the types of business and rules for business away from national and democratic control towards international technocratic control where the clear and only beneficiaries are international corporations that have no national home.

This web of secret trade regulation is tying the hands of governments and their ability to act in favour of their people while fear-mongering about jobs and “economic growth” is used to convince populations to accept these deals but the economic growth they will bring will be for international corporations and their top echelon at the expense of the world population’s standard of living. As we covered in part 1 hidden in Trudeau’s news speak was admittance that the “middle class” never benefited from trade (in which he means ‘free trade’) but what he fails to mention is this was by design. Trudeau mentions how ‘trade’ (meaning ‘free trade’) has brought immense wealth but never says who received this wealth, of course indirectly admitting it certainly wasn’t the middle class, or the lower class, so it must be the highest class. This is also by design.

This same design of stealing wealth and control is what is driving ‘free trade’ today and those parties who support it aim to fool you that being against ‘free trade’ is to be against ‘trade’. This is a deliberate, malicious, lie meant to confuse and convince Canadians that giving up national sovereignty and the ability to decide what business can and can not do on Canadians soil will somehow translate into immense wealth and economic growth. As Stephen Harper once said “there isn’t really a Canadian economy any more, it is a global economy” and “I know some people might not like it, it’s a loss of national sovereignty but it’s a simple reality that were in a global economy”.

Of course what those in power omit from telling you is that this “global economy” which results in a loss of national sovereignty was designed by those operating it to do exactly that and they also omit that those who are operating it are not elected, accountable, or democratic. It is nothing short of a global economic dictatorship being operated and asserted by the American Deep State.

In part 4 of this post we will look at governmental issues and how they tie into what has already been covered here and then I will provide my final summary of the political landscape.

In part 1 of this post we focused on the need for exponential growth and the monetary system behind our need for this type of growth. We learned that the monetary system in it’s current form is a textbook definition of a Ponzi-scheme requiring ever growing production to meet ever

In part 1 of this post we focused on the need for exponential growth and the monetary system behind our need for this type of growth. We learned that the monetary system in it’s current form is a textbook definition of a Ponzi-scheme requiring ever growing production to meet ever

In part 1 of this post we focused on the need for exponential growth and the monetary system behind our need for this type of growth. We learned that the monetary system in it’s current form is a textbook definition of a Ponzi-scheme requiring ever growing production to meet ever growing debt at the top because at any given time there is always more total debt with interest than there is actual currency to pay for it and the only way to conjure up the currency needed to pay outstanding debt is to borrow even more currency resulting in a never ending cycle where the debt load and subsequent “growth” required are perfectly exponential.

We identified 4 interconnected domestic issues and discussed how the need for exponential growth is the primary driver behind them and also the solutions that are framed for you by the major political parties to address them which can be summed up as “we need more growth”.

In this portion we will be looking at ‘the resource wars’ only as the topic is very very large and must be explained in full for you to really grasp what is happening here.

Before we get into these issues though I just wanted to amend the ‘First Nations’ portion from the last post as some additional material was provided by Justin Trudeau in last night’s debate, or rather, following it.

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–>(Update: it seems the G&M has removed the post-debate portion while i was writing the post from the video! I am trying to locate another. If anyone has a link to Trudeau’s Q&A post-debate please let me know in the comments.)

Now I’ve set the embedding of this video to start at 3h03s but if it doesn’t work for you skip forward to this time. Observe what Justin Trudeau’s answer is to the question:

“Near the end you mentioned First Nations hadn’t been a part of the debate at all why didn’t you bring it up earlier?”

And his response:

“Ah, you know, there was an awful lot of topics covered and  in a very short period of time. Uh, and I kept hoping that it would be brought up but I think it’s important to highlight uh that that fact is uh that First Nations have the largest proportion of young people in this country and the future of those communities are also about the future of our country; needing to get our resources to market, needing to develop our resources needs to happen in partnership on a nation to nation basis with First Nations and that’s exactly what the Liberal Party is committed to do and I was glad to be able to highlight that in the debate which talked of many aspects of our economy but didn’t speak enough about the opportunities and the challenges faced by indigenous Canadians.“

So apparently the only issue and challenge facing First Nations is that the government needs to get resources to market. Sounds a lot more like the issue the government is having with First Nations to me, not the issues and challenges that they are facing. Also note how he says ‘in partnership on a Nation to Nation basis’ but at the end slips up calling them ‘Canadians’. First Nations are not Canadians, they are Nations we have a treaty with. You can’t both partner with other Nations, and assimilate those Nations. I know it may seem like a minor language screw up, and perhaps it was, but when you review his answer where the clear focus has nothing to do with the issues actually facing First Nations (other than those created for them by the government itself, of course) it may be a Freudian slip.

Alright. Let’s resume the original post.

The Resource Wars (or for the uninformed: ‘The Syrian Refugee Crisis’)

Julian Assange revealed in an exclusive with RT that the overthrow of Assad was planned as early as 2006 during the Bush/Cheney years. Much like the continuity of our government despite parties, this is also the way it operates in the U.S. The direction and agenda set during the Bush years following 9/11 are still the driving force at work today. The war happening in Syria is a continuation of the war NATO has been engaging in for the last 14 years.

Beginning in 2008 a new narrative had been formed around al-Qaeda, that it’s “capacities had been greatly diminished”. The focus in the media moved away from al-Qaeda and towards the inevitable withdrawing of NATO troops that was to occur.

WSJ: Al Qaeda’s Diminished Role Stirs Afghan Troop Debate [2009]

In an interview with the Italian newspaper Il Sole 24 Ore, Mr al-Hasidi admitted that he had recruited “around 25” men from the Derna area in eastern Libya to fight against coalition troops in Iraq. Some of them, he said, are “today are on the front lines in Adjabiya”.

Mr al-Hasidi insisted his fighters “are patriots and good Muslims, not terrorists,” but added that the “members of al-Qaeda are also good Muslims and are fighting against the invader”.

His revelations came even as Idriss Deby Itno, Chad’s president, said al-Qaeda had managed to pillage military arsenals in the Libyan rebel zone and acquired arms, “including surface-to-air missiles, which were then smuggled into their sanctuaries”.

Mr al-Hasidi admitted he had earlier fought against “the foreign invasion” in Afghanistan, before being “captured in 2002 in Peshwar, inPakistan“. He was later handed over to the US, and then held in Libya before being released in 2008.

US and British government sources said Mr al-Hasidi was a member of the Libyan Islamic Fighting Group, or LIFG, which killed dozens of Libyan troops in guerrilla attacks around Derna and Benghazi in 1995 and 1996.

2011. This was also when the Syrian revolt began.

In 2012 I caught eye of an article put out by the Council on Foreign Relations which contains the following:

Al-Qaeda is not sacrificing its “martyrs” in Syria merely to overthrow Assad. Liberation of the Syrian people is a bonus, but the main aim is to create an Islamist state in all or part of the country. Failing that, they hope to at least establish a strategic base for the organization’s remnants across the border in Iraq, and create a regional headquarters where mujahideen can enjoy a safe haven. If al-Qaeda continues to play an increasingly important role in the rebellion, then a post-Assad government will be indebted to the tribes and regions allied to the Jabhat. Failing to honor the Jabhat’s future requests, assuming Assad falls, could see a continuation of conflict in Syria. 

Thus far, Washington seems reluctant to weigh heavily into this issue. In May 2012, U.S. Defense Secretary Leon Panetta publicly accepted al-Qaeda’s presence in Syria (Guardian). And in July, the State Department’s counterterrorism chief, Daniel Benjamin, rather incredulously suggested that the United States will simply ask the FSA to reject al-Qaeda. The unspoken political calculation among policymakers is to get rid of Assad first—weakening Iran’s position in the region—and then deal with al-Qaeda later.

Hmm. Starting to see a recurring pattern here? How did ISIS become so powerful, so quickly? Especially when “al-Qaeda” was practically defeated? I’ll let Joe Biden tell you:

2012.

In 2013 John Kerry tried to convince the world that to stop the suffering of the Syrian people from chemical weapons we had to bomb the Assad government but during the Q&A was caught off guard by a reporters question. Russia, who knows exactly what the U.S. is up to (which we will get to in a moment) instantly seized on this opportunity preventing NATO from bombing Syria and overthrowing Assad. Remember that when this was occurring there was never any talk of ISIS, despite the fact that it was clear the U.S. government knew that al-Qaeda intended to create an Islamic State for at least a full year and probably longer (’cause you know… they set the whole thing in motion) yet Kerry was insistent about Assad. Had NATO bombed Syria the entire region would be overrun with al-Qaeda. Kerry fucked up because that’s exactly what they wanted.

Following this the narrative of ISIS was born.

Have you ever played Roller Coaster Tycoon? Did you know when one of your roller coasters blows up rather than changing or repairing it you can simply rename it and the people in your park will literally think it’s a different roller coaster? It’s a really neat trick to get the money rolling in again without having to actually create something new. Slowly the narrative has shifted since 2013 away from al-Qaeda and towards ISIS to the point that many people actually believe they are two different things. They’re not. They need to be different in the public’s eye because the al-Qaeda narrative was killed. This is the next phase of the war Dick Cheney told us “would not end in our lifetime”.

Now would be a good time to show you another presentation I actually posted just recently as he provides much of the background you’re going to need to understand in the context of the geopolitical environment we now exist in. I know I’m providing a lot of material and that it literally takes hours to go through all of it, but these are complex topics and without the background much of what is going on today is not going to make a lot of sense.

In this next presentation Michael C. Ruppert discusses many topics all revolving around the things we’ve been talking about and describes the (then) coming wars.

Pay special note and listen for some of the current day topics and hot spots such as: Columbia, Venezuela, West Africa, and North Korea. Also note the endgame(s): Russia, and China. Particularly the maps showing how the U.S. is trying to keep Russia out of the region keeping in mind that for instance in response to Russia aiding their ally and the sovereign government of Syria’s Assad “in the fight against ISIS” they will be destabilizing the region. Here is this presentation.

I hope you’re starting now to see what is going on here. So what else has happened in this conflict? Canada’s bud Israel isn’t taking in a single refugee, not one. But we’re not hearing much about that are we? It might be because along with Dick Cheney’s Haliburton (remember them from the presentation?) they’ve been drilling for oil in the illegally occupied Golan which just prior to the Syrian civilian war they had been feuding over.

There are also competing gas pipelines and a multitude of other reasons why NATO wants Assad out. But as was revealed recently, it’s not really about Assad. Here is the telling paragraph:

“The weakest point is Ahtisaari’s claim that Churkin was speaking with Moscow’s authority. I think if he had told me what Churkin had said, I would have replied I wanted to hear it from [President Vladimir] Putin too before I could take it seriously. And even then I’d have wanted to be sure it wasn’t a Putin trick to draw us in to a process that ultimately preserved Assad’s state under a different leader but with the same outcome.”

That “ultimately preserved Assad’s state under a different leader but with the same outcome”. The “same outcome” of course being a government that isn’t a NATO puppet.

These refugees aren’t just “kind of” our fault. They are 100% our fault. Of course Assad has bombed some civilians, he has been claiming the entire time that his army has been fighting foreign terrorists and defending his country from them. It is our media, and our government, that lied to us and said he is mass murdering his “own people”. They weren’t his own people they were the terrorists that were to become ISIS. Terrorists we supported, trained, funded, aided, and let loose on the Syrian people. When it comes to the “refugees” Elizabeth May has been the only one that has been brave enough to at least try to touch on this fact. The other 3 leaders are lying to you. If you want to help the Syrian refugees then please listen to Syrian Girl’s story and pester our politicians on NATOs true involvement, this entire plan rests on us believing we’re “fighting ISIS” and not actually helping them overthrow the Syrian government.

Contrary to popular rhetoric NATO is not “helping Assad”. But we should be if we were actually honest and serious both about fighting ISIS and defending Syrian lives. We should only of course help the Syrian people at Assad’s request. It would protect Syrian lives because our support would of course be only on the condition he uses the same rules of war we do. But it is not about fighting ISIS and with this story of the resource wars I told you I ask you read this piece and contemplate how much you really know about what’s going on over there. I hope by now in this series you’re starting to pick up on language and key words and how they are being used to manipulate the public so pay attention and see if you can spot them.

This topic is a lot to digest so I will save the remaining topics for part 3.

The government is us; we are the government, you and I. Theodore Roosevelt This blog has always tried to shy away from partisan direct political speech and influence and I’ve been proud to try and provide a space for Canadians (and international visitors) free from partisan rhetoric and spin. The

The government is us; we are the government, you and I. Theodore Roosevelt This blog has always tried to shy away from partisan direct political speech and influence and I’ve been proud to try and provide a space for Canadians (and international visitors) free from partisan rhetoric and spin. The

The government is us; we are the government, you and I.

Theodore Roosevelt

This blog has always tried to shy away from partisan direct political speech and influence and I’ve been proud to try and provide a space for Canadians (and international visitors) free from partisan rhetoric and spin. The purpose of this blog has never been to influence you politically, but rather to influence you personally so that you can evaluate the information I present and make personal decisions in your immediate life. With each and every post my attempt is to provide a comprehensive view of what I think is really going on and let you come to your own conclusions about what should or shouldn’t be done. I don’t have any faith or skin invested in the political game I only am invested in my own personal game, my family’s game, of which the solutions do not reside with the talking heads on 24 Sussex.

There are a few exceptions such as the recent Alberta election wherein clearly my positions on issues are directly contradictory to the old Progressive Conservative Party that ruled Alberta for 44 years. After 44 years of rule under one political ideology and party it no longer becomes about the party: the party and the government are one and the same.

Astute readers may note that I rarely refer to the “government” in terms of the political party other than where I deem it appropriate and that is because when I criticize the government I am not criticizing an ideology, or a political party, I am criticizing actual actions by actual people that have power in this country and that is all I care about and in that same context readers may notice I do not jump on bandwagons like “Stop Harper”. “Stopping Harper” is not a solution to Canada’s major issues no more than “stop checking your email” is a solution to internet spam.

So why am I telling you all this and what is this post really about? You might be asking yourself as we now enter the 4th paragraph. I’m glad you asked. All of this preamble is building up to the fact that I am about to provide my personal, and I really want to stress personal, opinions of what I see as Canada’s major issues, where I see the 4 major running national party’s standing on these issues, and most importantly: whether or not I actually believe them and why. I’ve gotten a few questions regarding the election from readers and twitter followers and while I hope my ramblings here are not what you’re waiting for in regards to a final decision on who or what you will support there’s been enough interest that I may as well lay it all out rather than try to explain my position in 140 characters.

First before we get into the issues themselves I need to provide my primary position which is issue and party agnostic: vote local and vote with your heart.

We do not need “anything but conservative” campaigns, we do not need to treat our political race like a presidential one. It is most important to remember that you’re not really voting for an ideology but rather for a local representative. This is a person that can represent your riding and it’s needs; it is up to the members of the house to decide which coalition of MPs forms the government. There is absolutely nothing that says that a government must be made up of the winning party, or any party at all. It could in theory be made up of an MP from various parties and even without an official party coalition. It could be a private coalition among members who are all on the same page and can command the confidence of the house.

Now obviously many of the combinations I listed above are likely not going to happen especially with the divisive, hostile, and weary political environment we exist in today – an environment which is ripe for manipulation I might add. But it’s important to remember above all what it is you’re really voting for and I believe a house made up of honourable Canadians with the best intentions as opposed to party hacks and globalist insiders would be far superior to any easily co-opted ideology. If the best MP is a Conservative – one which answers your questions and takes your criticisms seriously and doesn’t pussyfoot around real issues – then please vote them in.

That being said our electoral system has been completely perverted into a faux presidential race and it is within this mindset most voters base their decision making and since I do not have the time, patience, energy or fucks to give about what each individual candidate represents for their constituents, nor do I have the experience to describe community level issues where I do not live, we will be looking at the highest level issues only from the perspective of the party leader/party ideology. Keep in mind your local candidate for the party may not entirely agree with the party position on every issue and it is therefore useful to find that out on an individual basis.

Try and avoid deliberate attempts to further divide the populace and learn how to spot these attempts. Here is an example:

Here is Bob Rae, an “honourable MP” and long term political insider, adding fuel to the divide and conquer fire. Much like WWE wrestling, or other pro-sports, rivalries are an act. In the wrestling ring opponents might “hate” each other but that’s only for the public eye and to keep the confidence in the WWE act of the fan base much like the divide and conquer act played out in politics is to keep the confidence of the electorate in the system. And much like hockey or other team sports the idea a politician believes so fundamentally in the party and it’s ideology is also an act. Political teams trade players all the time and as with Thomas Mulcair or Bill Blair we find that the end decision mostly depends on the contract they get with the team. Keep this in mind the next time you might mention how “lefties do this” or “rwnjs do that”, to the players of the games they’re all just “fans” (meaning fanatics) and it is with this knowledge of the psychology of fandom that the game of divide and conquer is played ultimately with the hope of getting the peasantry to point the fingers at each other rather than those at the top.

Wow. I didn’t realize I had so much to say on this election and we haven’t even gotten into the issues or parties yet! Seriously though, I do apologize for the long read. Ok. The issues…

This is by no means meant to be an exhaustive list and you’ll note political party corruption and issues with candidates are missing. We will not be talking about Duffy, the NDPs expenses, PeeGate, or anything of the sort as these things are largely irrelevant from the global agenda at play and simply serve to distract the people from the real issues. We will also be avoiding issues that have the direct intent to divide the people (what I call “people issues”) and which those at the top truly just don’t care an example being pro-life/pro-choice – while your position on that issue may be very important to you I can assure you regardless of ideology or political party that whether or not women should/can have abortions matters not to the people in the top echelon beyond the umbrella implications of population control or the future strength of the tax base. We will instead be looking at issues that effect everyone and the trends which will define the future of Canada. These are as follows:

Domestic Issues
– The economy
– The environment
– Civil liberties
– First Nation treaties and rights

Foreign Issues
– The resource wars (or for the uninformed: ‘The Syrian Refugee Crisis’)
– T.P.P. and Free Trade

Governmental Issues
– The senate
– The centralization of power

Each of these issues really demands an entire post unto itself but I will do my best to explore the most important aspects of each and tie it all together, each of these issues is related to each other.

The Economy

War is the continuation of politics by other means

Carl von Clausewitz

Politics is the continuation of economics by other means

Michael C. Ruppert

The economy is probably the most important of the issues listed above and not for the reasons Harper or the other leaders claim. It is the most important because everything else that is listed there takes place in an economic context and unless you understand that context and the implications of it you can easily be swept away in fancy statements with little or no meaning such as “growth that the middle class needs”, “sustainable growth”, or “a stable and strong economy”.  In fact it is only the Green party in this regard which identifies the primary problem Canada (and all western nations and indeed the entire planet) is facing.

We need to correct the perception that economic success is dependent on growth and build understanding of the benefits of a steady-state economy (non-boom/bust economy). Continued exponential growth is counter to the realities of a finite planet.

Notice that they explicitly state that what we engage in is “exponential growth” and that exponential growth is “counter to the realities of a finite planet”. To some of you this may seem like a load of hippie hogwash and “leftist drizzle” but its actually rooted in the same monetary theory many that would consider themselves “Libertarians” (typically considered a far-right ideology) subscribe to. I also subscribe to this monetary theory of which the anti-thesis is our current monetary system.

The growth that is demanded from our debt-based ponzi-conomy is exponential growth, which is why one of the big telling red-flags of those in the pockets of the bankers which aim to keep the unsustainable debt-based monetary system operating as long as possible is when a politician talks of the “need for growth”. Chris Martenson has an excellent presentation on the consequences of a finite planet and exponential growth monetary systems which I would say is required viewing for making an informed decision about Canada’s future:

His presentation doesn’t really get into how the monetary system works (though he has many other pieces that do) rather it focuses on the consequences so if this type of material is basically unheard of to you it may be useful for you to first understand the monetary system itself of which Mike Maloney has a great presentation which is easy to understand.

After watching those presentations you should now have a fairly good understanding as to why the NDP’s suggestion of “sustainable growth” is patently false. The two words are an oxymoron especially being that the type of growth demanded by the monetary system is infinite and exponential. Further you should realize that the need for growth is no longer to service populations but is now purely to maintain the banking system and the elites that benefit from it. I know that sounds great but what does that mean for you and in practical terms?

What it means is that we “need” temporary foreign workers because we can’t find Canadians to work the counters at all of the sprawling Tim Hortons’ that we likewise “need”. We “need” these numerous establishments so much and they receive so much business that they can not afford to engage in wage competition instead complaining that workers demand too much compensation and as such they are “lazy”. Canada’s “need” to artificially expand it’s labour pool is perhaps one of the most blatant proofs that the type of growth we engage in is no longer relevant, necessary, or sustainable.

“Sustainable growth” is a catchy saying but it runs counter to the very meaning and reasons we currently “need” growth. Understand that when we talk about growth it is in addition to all of the collective growth up until now. %1 growth this year, is larger than 1% growth last year because this year’s 1% is on top of the total of last year which already includes last year’s 1%, get it? This is the nature of the “exponential” in exponential growth and it is  for this reason that Mulcair’s “sustainable growth” is a lie.

Because growth is always on top of all previous growth, to return to something “sustainable” would represent in Canada a major initial contraction. This isn’t to say that Mulcair’s ideas in “sustainable growth” are bad ideas. We should be investing in a clean and modern future but this clean and modern future must come with a reform of how the economy and monetary creation now works.

Trudeau and Harper’s economic positions are much more militantly “pro-growth” than Mulcair’s though I wouldn’t say by that much. In truth all of them are really promoting ideas very close to the others and wrapping it in the appropriate spin for their bases. Mulcair ties “sustainable” and “growth” together hoping “far-left” progressives don’t know what the word sustainable means. Trudeau wraps his in the “middle class” claiming he has the answers to the “growth the middle class needs” which is even more meaningless than Mulcair’s catch-phrase.

I say it is more meaningless as Trudeau’s plan is really nothing more than the status-quo and he has even told you this before.

For much of our history, the only trading relationship that mattered was with the United States. From Laurier to Mulroney, it defined our politics in watershed elections that bookended the last century, and inflamed passionate debates about national identity throughout. As we grew more confident, Canadians arrived at the conclusion, supported by the evidence, that openness to trade is good for us. It expands our horizons, as well as our national wealth. 

That was the 20th century. The 21st century is different. Trade remains a paramount objective, but we can no longer rely on the U.S. alone to drive our growth.

I am not one of those who believe the U.S. is in serious decline. Our relationship with our southern neighbour remains our most important, but we cannot afford to miss vital opportunities elsewhere. By 2030, two-thirds of the planet’s middle class will be in Asia. How we define and manage our relationship with Asian economies to play a Canadian role in fuelling that growth will matter as much to the Canadian middle class in this century as our relationship with the U.S. did in the last. 

So how are we doing? Canada benefited from being the first western country to recognize the People’s Republic of China, but we have lost ground recently. The Conservatives kicked off their stewardship of the relationship with unhelpful sabre-rattling, followed by a stubborn silence. Recently, they have made attempts at courtship, but China’s leadership has a long memory. Influence and trust is built through consistent, constructive engagement. 

Further, the Conservatives have developed their approach to Asia, such as it is, behind closed doors. This is a mistake. Where is the leadership to explain to Canadians why this relationship is so important, to engage Canadians in the conversation, to make us aware of the opportunities?

Because we have failed to make the case for trade, Canadians are understandably anxious. Because we failed to ensure that the middle class participates in the growth created by trade, support for it has recently broken down.

This is from Trudeau’s article on CNOOC and free trade back in 2012 where in he within a few paragraphs completely contradicts himself and admits that “we failed to ensure that the middle class participates in the growth created by trade” yet talks about how free trade has increased our national wealth. Well if it’s not the middle class who received this wealth, and it’s not the poor who received this wealth who did? This type of doublespeak exists within all of Trudeau’s economic content to varying degrees but no contradiction shows where his real interests lie more than his CNOOC article. Don’t believe me?

Personal income for middle-class Canadians has stagnated for more than a generation. This deeply troubling development is masked by a rise in family income, due to the entry of a new generation of well-educated, hard-working women into the workforce. While this phenomenon is overwhelmingly positive, we must be clear-eyed in understanding that it is a one-time benefit.

Civil Liberties

It is in this area this election where the NDP really shines even though they took their time fully opposing bill C51 and essentially followed the Green Party’s lead. That said it is highly unlikely the Green Party will form a government and the NDP have a fair shot of doing so and the importance of C51 can not be understated. The pledge to repeal C51 has been a primary talking point of Mulcair’s and would be difficult for him to renegade on. There are a few caveats to the NDP position in this regard though:

• Nothing has been said about what if anything C51 would be replaced with. The assumption amongst NDP supporters is that it would be repealed and that is the end of it but the NDP hasn’t explicitly said that either. My biggest fear in supporting the NDP explicitly for this reason is that without addressing the larger encroaching surveillance state they do not go far enough in fingering the culprits and those who want it.
• In the same context as them leaving this topic open-ended beyond repealing bill C51 and championing the Charter of Rights (or what’s left of it) their position also leaves the existing intrusive unaccountable system intact which while not making the situation worse it doesn’t really solve anything either.

Moreover, as America becomes an increasingly multi-cultural society, it may find it more difficult to fashion a consensus on foreign policy issues, except in the circumstance of a truly massive and widely perceived direct external threat.

It is for this reason, and my suspicions of Mulcair’s true allegiances to the banking oligarchy that I find Mulcair’s C51 position slightly hallow and I’d ask Canadians to at least be wary of that fact.

Another general rule: all campaign promises should be taken with a grain of salt.

First Nation treaties and rights

First Nation issues are vast and encompassing and I would never try to speak for them. Frankly, not being First Nation, I am simply not qualified to do so. In fact I believe we have plenty to learn from them.

The First Nations, even if most Canadians don’t know it yet, are Canadas front line of defence against infinite exponential growth and the international corporate authoritarian system being implemented through covert means. While Canadians might be fooled or confused as to the intents of the system with no direct experience being on the receiving end the First Nation people are able to identify instantly what is being done. This makes them dangerous.

They’re even more dangerous because unlike the faux “sustainable growth” Canadians believe in the First Nation people have recollection and stories of actual sustainable living. Sustainable to them and sustainable to us mean very different things and as such fooling them into supporting “sustainable growth”, or any growth, won’t be easy.

It’s no coincidence that the greater focus on “consultation with First Nation people” has grown in focus following their militant blockades of pipelines and economic expansion. It is important to understand that “consultation” is really code for “pay offs”. The government is dumping significant resources into getting their permission for economic expansion, but comparatively other First Nation issues like the Missing and Murdered, or basic water access, are held back by endless red tape and a general lack of effort. The two in contrast are shocking.

Understand that “consulting” with First Nations is really just a discussion of which number is the right number. What number is big enough that the Chiefs and their bands can not say no? especially when they have been subject to rampant poverty and neglect? This is billed to the Canadian people as “working with” First Nations but in reality they are being given no choice. This type of negotiation is not much different than an economic hitman getting a sovereign nation to agree to a punitive trade deal; sure in the end it’s the “country” that agreed to the trade deal but the agreement is made under duress and so it is with energy companies, land rights, and First Nations.

First Nations are thirdly dangerous because they truly do have the legal right to do what they are doing and their systematic suppression is not by accident.

This brings us to the end of the ‘domestic issues’ portion. By now it should be clear how the central theme of infinite exponential growth and the survival of the banking system and status-quo is the top priority at work and permeates into every thread of Canadian life and policy.

That brings us to the end of part 1. In part 2 we will look at the remaining issues I’ve pointed to as the underlying trends in Canada, a summary of my position on each party, and a few more general statements.

On this anniversary of the tragic losses on 9/11, and the start of the now 14 year non stop resource war in the Middle East and Africa please take the time to listen to Mike Ruppert’s tale from *2002 of 9/11, the derivative bubble, CIA drug smuggling, and the war

On this anniversary of the tragic losses on 9/11, and the start of the now 14 year non stop resource war in the Middle East and Africa please take the time to listen to Mike Ruppert’s tale from *2002 of 9/11, the derivative bubble, CIA drug smuggling, …

On this anniversary of the tragic losses on 9/11, and the start of the now 14 year non stop resource war in the Middle East and Africa please take the time to listen to Mike Ruppert’s tale from *2002 of 9/11, the derivative bubble, CIA drug smuggling, and the war

Presented with no comment. CFR: The Syrian rebels would be immeasurably weaker today without al-Qaeda in their ranks Assange on ‘US Empire,’ “Washington had plans to overthrow Syria’s government long before the 2011 uprising began.”

Presented with no comment. CFR: The Syrian rebels would be immeasurably weaker today without al-Qaeda in their ranks Assange on ‘US Empire,’ “Washington had plans to overthrow Syria’s government long before the 2011 uprising began.”

Presented with no comment.

CFR: The Syrian rebels would be immeasurably weaker today without al-Qaeda in their ranks

Assange on ‘US Empire,’ “Washington had plans to overthrow Syria’s government long before the 2011 uprising began.”

It’s been my assertion all throughout Alberta’s good times that they would be quickly coming to an end. It may have seemed hard to believe that ‘oil’ was somehow not as profitable as people thought. The complexities of understanding the difference between currency and real wealth and the complications introduced by ever lower energy returns on energy investment are likewise harder concepts to grasp.

It is for this reason that to this day proponents of oilsands insist that this is a cyclical problem and that before we know it the “boom times” will be back, the reality unfortunately (or fortunately depending how you look at it) is that Alberta’s oil industry has now entered a permanent decline and while oil may continue to be produced it will not have the net-benefits Albertans have come to expect from them even though the bar on what would be considered acceptable net-benefits was already extremely low.

At the beginning of last year, when oil was still high and expected to go higher, I wrote a post titled “oilsands proponents have yet to describe the infinite growth endgame” in which I commented on a post by Michael Den Tandt about the trending Neil Young commentary at the time.

I of course don’t really care what populist celebrities have to say about oilsands development but I do take issue with so called journalists who paint a rosy picture of “growth and prosperity” for all through oilsands development when the truth couldn’t be farther from.

Now however, not even two years after Den Tandt’s article on how we should be throwing everything at the oilsands to support their growth Alberta Oil Magazine has come out with an article titled “Why the Oil Sands May Never See Another New Mining Project Built” in which they effectively admit the infinite growth endgame has arrived. It should be noted that the reasoning they use is the exact same reasoning I’ve been talking about for the last 4 years on my blogs (and longer in terms of my thoughts which drove me to start blogging in the first place). Such as:

CAPP confirmed that in its annual forecast in June, when it reduced estimated oil sands production for 2030 to four million barrels per day. That’s down from 4.8 million barrels per day in its 2014 forecast, and 5.2 million barrels per day in the 2013 version. And according to ARC Financial’s Peter Tertzakian, that revised and reduced forecast is still too optimistic. “I think the era of big megaprojects up there is really over,” he says. “Even before the price crash there was a trend in oil and gas investing – whether it was by large corporations or individual investors – away from long-payback projects with lots of above-ground risk that were also characterized by very high capital costs.” That trend, he says, is a reflection of the fact that energy investors have more to choose from today. “The oil sands has to compete for capital with all the other types of oil projects that are out there. It has to morph into something cleaner, smaller in size and less capital intensive. It’s definitely possible to do, but the old paradigm of 4,000-man camps and long construction periods is over.”

Of course if the old paradigm of 4000 man camps is over, so is the old paradigm of the oilsands being a major source of job creation and being that their royalties are so low and require so much government support just to remain operational the silver lining in their operation was the sheer number of jobs they required. At the end of the day oilsands proponents would always cite jobs as the main reason to keep them around, they may not have provided much net-benefits to the public in general especially with how their wages distorted Alberta’s economy for those who weren’t rolling in oil cash but at least they provided some personal benefit to the employees in terms of fairly large (but still a drop in the bucket of what these workers should have been making) returns.

By no net-benefit for the public in general what I of course mean is that the infrastructure requirements and the services needed to support the population influx generated by the oilsands was far too expensive and was not covered by the returns the oilsands provide and as I’ve described many times before the benefits they appeared to provide were more so a function of 1) Alberta significantly under-funding infrastructure expansion and services for the population and 2) a business model entirely based on the rapid rise of oil prior to 2008. It is the phantom of the oil market prior to 2008 which continues to provide the basis of the “coming oil boom” today.

However, even with this significantly reduced  expectations of the production and return of oilsands projects the outlook is still far too rosy and the real turmoil for extreme energy intensive oil and gas extraction has barely begun.

Financial Sector To Cut Credit Supply Lines For Oil And Gas Industry

Oil-Sands Producers Mimic Coal Cost Cuts as Prices Spiral Lower

Hydraulic fracturing, or fracking, is the process of pumping water, minerals and chemicals into shale rock beneath the Earth’s surface to break them up and release oil and gas. It has driven America’s booming production of shale oil throughout the last decade. But more recently, companies like Liberty and EOG Resources have advocated a fracking method that uses more water and minerals to break up shale at high pressure in multiple stages.

Yes, even more water, and even more minerals, for what was an already intensive process and for what? To continue oversupplying the world with oil that our economic deflationary vortex will never need? For so called “money”?

The biggest issue with projects like this isn’t that they’re not really that profitable, it’s not even that they’re not going to be profitable, The biggest issue with projects like this is the lengths those operating the current monetary paradigm are going to go to to make them seem profitable. Here are a couple examples:

Capping oil well blowouts within 24 hours too expensive, says Ottawa

The federal government says it is agreeing to an offshore drilling plan that would allow up to 21 days to bring in capping technology for a subsea well blowout, because requiring a shorter response time would be too expensive for Shell Canada Ltd.

Alberta Energy Regulator orders Nexen to suspend operations on 95 pipelines

It issued the order late Friday due to what it calls non-compliance surrounding pipeline maintenance and monitoring in its Long Lake oilsands project.
Alberta Energy Regulator spokesman Bob Curran said every oil and gas company is required to monitor, inspect and maintain records for all of their pipelines.
Nexen couldn’t demonstrate that those activities have occurred on those lines, which carry several products including crude oil, natural gas, salt water, fresh water and emulsion, Curran said.

Now this last link is very interesting as perhaps for the first time maybe ever the Alberta energy regulator is doing what it’s supposed to do rather than simply rubber stamp everything that comes it’s way. I attribute this largely to the new Notley government and while I applaud their efforts to finally bring some sort of accountability to oilsands projects this event also shows how far off the mark the Alberta and Canadian governments have been in regards to how “safe” these projects really are.

The reality is that because these projects are so capital intensive there is no room, or cash, for the type of tightly monitored and strict safety measures we claim to have which just might explain why shortly after the regulators actions Nexen shut down the entire site (no confirmation yet as to the true reason but it fits with the problematic environment).

Now I’ve known for a long time how fraudulent Albertas claims to profitability and high standards of safety have been not from news articles but because being Albertan it’s hard not to know someone inside the industry. I have never written about these personal stories I’ve been told over the years as without news articles to at least back up the situation it would probably be considered no more than hearsay at best. At this time though and with the previous links showing how our cost constraints impact our ambitious environmental and safety concerns I’d like to give an idea of some of the insider stories I’ve heard in regards to oilsands operations particularly in material coordination being I’m in Edmonton and most insiders I know are in this field.

What is particularly interesting about these stories is that in most cases it is employees taking shortcuts themselves in an effort to save their own ass. Perhaps one of the most repeated stories I’ve heard was about situations where materials for pipes would be ordered that were not of the correct thickness but due to upstream pressure and a desire for the employee to not personally take the fall for the fuckup they simply pass it on and rubber stamp the papers. In truth many of the executives sitting at the top of these companies really have no clue how chaotic the process is on the actual ground. These executives write up fancy manuals on safety and the proper handling of materials but the employees are so overworked and under such pressure to deliver they’re never followed.

My point with this story is that not only are companies “officially” cutting corners such as with the Nexen pipelines not being properly monitored but “unofficially” employees are taking it upon themselves to cut corners to meet demand and not take a personal hit. These stories are not just isolated to low-level employees but also mid-level managers who when these issues are brought to their attention instruct the employees to paper over and ignore the issue passing it upstream so as not to take the performance hit. Over the years I’ve heard these stories enough to come to the conclusion they’re more the rule, than the exception, and these were during the good times.

Whether you believe these stories or not (though I assure you they are true) at this point no longer matters as now with the worsening economic situation these holes are becoming ever more obvious along with the unprofitable nature of extreme oil production but I’m telling you them to provide a glimpse into the clusterfuck it really is and that for every story I have heard there are surely hundreds I haven’t.

The failing expectations on oil are bad, but could be contained, the larger issue which is really what I’ve been concerned about all of these years are the domino effect it’s going to have in everyone and everything that’s built up an expectation of hyper-inflated growth with no end.

Alberta’s new NDP government, which is largely following the path I forecast it would in regards to debt, infrastructure, and oil production is (I believe) in good faith and with well intentions trying to fill in the gaps and holes Alberta’s 40 year dynasty of oil insiders acting like politicians has left us in their efforts to fool the Albertan population into believing the oilsands were just as if not more profitable than conventional oil. However I also believe the NDP is doing this either in preparation for, or hope that, the mega growth Alberta has experienced in the past will one day return. Preparation because to properly service the population we’re anticipating we’ll have we need to prepare and invest ahead of time. Hope, because if this expected population does not materialize we will have greatly expanded our infrastructure for no one, and it’s probably likely that without the oil production this infrastructure was built for, and the returns we expect it’ll give us, it will be a great burden on the remaining population of Alberta to pay for especially with central banks near running the course on the temporary positive benefits continually lowering interest rates have provided. Simply: Alberta started these initiatives too late and it will likely be the NDP that takes the “blame” for such issues though Alberta’s path was largely set in stone years ago long before they ever came to power.

This domino effect could easily ripple through the province, such as in Edmonton where sky-cranes tower over the downtown core building new high rises and the new arena which all assume that at the end of the construction there will be an infusion of ever growing capital and ever richer people to pay the premium prices for tickets, office, and apartment space and keep the property bubble blowing. If Alberta Oil Magazine, and myself, are correct no new mega projects means the influx of population Alberta has experienced in the past is over and done with never to return, in fact Alberta’s population may greatly decrease as the Canadian economic propaganda about how strong our economy is has moved back to eastern and central Canada and the great predictions of exports and a U.S. recovery. This will of course leave the investors funding these developments holding the empty bag (or office tower as it were) creating further damage to Alberta’s already overheated and overpriced property market.

Conclusion

Alberta and it’s oil industry may be adjusting expectations but at too slow a rate to really grasp our current condition. We continue to underestimate the associated costs of extreme energy production and also continue to base our expectations of such production on market conditions that are nearly a decade in the past. The global deflationary event we are experiencing derives from how expensive energy has become in the post-peak oil environment and yes while the market price of these resources is currently low which reflects the oversupply and depressed demand this oversupply is far from proof the good days will be back again being most of it is being produced at a loss or at cost within the North American realm. The more oil we drill today the less there will be to drill tomorrow when we’re going to really need it and sooner or later with such a highly leveraged economy something has got to give. Whether good and/or bad, it’s an omen.

Update-1:

Great piece out of Zero Hedge: ‘Inside Ground Zero Of Canada’s Recession‘.

It’s been my assertion all throughout Alberta’s good times that they would be quickly coming to an end. It may have seemed hard to believe that ‘oil’ was somehow not as profitable as people thought. The complexities of understanding the difference between currency and real wealth and the complications introduced

It’s been my assertion all throughout Alberta’s good times that they would be quickly coming to an end. It may have seemed hard to believe that ‘oil’ was somehow not as profitable as people thought. The complexities of understanding the difference between currency and real wealth and the complications introduced

Well it’s official: another notch on the interest rate belt (Canada’s now really losing rate fast, the austerity diet must be working). The great deflation is definitely now underway. Before I really dive into some of Poloz’s comments today I want to take you back to January of this year

Well it’s official: another notch on the interest rate belt (Canada’s now really losing rate fast, the austerity diet must be working). The great deflation is definitely now underway. Before I really dive into some of Poloz’s comments today I want to take you back to January of this year

Before I really dive into some of Poloz’s comments today I want to take you back to January of this year where the Bank of Canada first cut rates (a rate cut which I will point out now obviously didn’t do anything). Flashback, January, 2015:

The Group of Seven’s biggest crude exporter is already feeling the effects of crude oil dropping below $50 a barrel, as companies such as Calgary-based Suncor Energy Inc. reduce staffing and investment. The central bank said today said the economic recovery will be delayed until the end of next year and the needed rotation from indebted consumers to growth fueled by business spending is less certain.

Suffice to say the needed rotation from indebted consumers to growth fueled by business spending didn’t happen and this has the BoC quite “puzzled” but despite being “puzzled” and despite the January rate cut not working they’re cutting rates again anyway even though they’ve stated when they originally cut rates (and again repeated this time) they do not expect to see the rebound until the second half of the year. Hmm – so if everything is still ultimately going to plan why cut rates?

But their outlook gets even better for their expected rebound is based on their predictions of U.S. growth! Like, did nobody catch the fact that they now are not only failing to predict our growth situation, but are trying to predict the U.S. growth situation too? Reporters and listeners swallowed this up without even blinking, that someone that was “puzzled” why their forecasts weren’t coming true in regards to their now infamous predictions of a lower dollar somehow boosting exports to the population in the U.S. which is equally indebted was now feeding them lines of predictions of not only this country but another as well and nobody bats an eye.

Frankly, Stephen Poloz, like Mark Carney, is full of shit.

Of course much of the talk of improvement in the U.S. is being driven by the Federal Reserve’s constant talk about raising rates even though time after time they delay it in hopes growth takes on some sort of momentum (spoiler: it won’t) much as a few years ago Carney was constantly talking about raising rates which as I accurately described back then was a bluff in a hope to sort of terrorize the population not into taking personal loans. News articles blanketed Canadian outlets on “what to do when rates rise”, etc, etc. It was all bullshit folks and so is the U.S. talk of raising rates.

To be honest I doubt the Fed will raise rates at all. If the U.S. does raise rates it will simply be so that they can then lower them again for the global recession the world has already entered (or more accurately never escaped), the Fed and the world’s central banks are out of tools.

Another way to understand the increasing reliance on central-planning extremes and their declining effectiveness is diminishing returns: more treasure, capital, time, energy and labor must be expended to keep the status quo from falling off a cliff. 

The Fatal Disease of the Status Quo: Diminishing Returns 

All of this extreme malinvestment requires more and more control of the national resources, so liberties must be curtailed and further extremes of centralized power and control must be imposed on the hapless citizenry. The resources of the many are increasingly stripmined to maintain the power and avarice of the few. 

I recently discussed these trends with Greg Hunter of USAwatchdog.com in a 23-minute video program, Policy Extremes Maintain Illusion of Stability. 

Let’s review the policy extremes that are yielding diminishing returns: 

1. Zero interest rate policy (ZIRP): central planners’ favorite tool for robbing savers and people who have socked away money for their retirement and handing the cash to banks. Now that central bankers have pegged interest rates at zero for 6+ years, there’s nothing left in ZIRP but to push rates into negative territory, i.e. it now costs you money to park your cash in a bank. 

There’s not much juice left in the zero-interest rate policy, and negative interest rates smack of central-planning desperation–which feeds the very fear and insecurity that trigger panics and crashes. 

2. Directly buying assets to prop up failing markets. The Chinese central planners are the latest authorities to reach for the last tool at the bottom of the central-planning toolbox:buying stocks and bonds directly to create the illusion of demand for increasingly shaky financial assets. 

There are two problems with creating bogus demand by using central bank money to buy stocks and bonds: one is this communicates desperation (see above), and the vast scale of bubblicious debt and equity markets have turned even trillion-dollar purchases by central planners into handfuls of sand thrown at a rising tide. 

Global equities now total $64 trillion and debt securities (bonds, etc.) total $95 trillion. Global real estate totals $180 trillion. Once the risk-on euphoric trust in central banks’ omnipotence fades and risk-off selling begins in earnest, how much would central banks have to buy of this $340 trillion to keep the bubble inflated? 

Is it plausible to believe that central planners buying less than 1% of this will stop a landslide of selling? Would even 2% ($7 trillion) make any difference? 

3. The grab-bag of desperate policy extremes: banning short-selling, bail-ins (the theft of depositors’ cash to bail out the bankers), partial closure of stock exchanges, currency devaluations, and so on. You can create a good catalog by just listing every action of Chinese central planners in the past month. 

As noted above, the problem with these policy extremes is that they are so painfully visibly acts of central-planning desperation. If things are as positive as we’re told, then why are central planners forced to impose such absurdly extreme policies to keep the status quo from imploding? 

If these policies worked, why are interest rates still pegged to zero after six years of “growth” and the inflation of monumental asset bubbles? 

If these policies don’t work (and they obviously don’t, otherwise the authorities could have normalized interest rates and ceased quantitative easing, stock purchases, plunge protection schemes, etc. many years ago) and central planners keep doing more of what has failed, then the only possible conclusions are: 

1. The policy extremes will never work 

2. The central planners’ continued expansion of policy extremes reveals their desperation 

3. When diminishing returns drop below the zero boundary, the system crashes.

 It’s now been a week and a half since I began writing this post as I just didn’t feel there was enough content here on it’s own but of course when it comes to the Bank of Canada all you need to do is leave for a few days and some other point inevitably will be brought up and this holds true today.

OTTAWA (Reuters) – The Bank of Canada has come under fire for its increased reliance on an inflation gauge that some economists say sows confusion in financial markets and could eventually lead to monetary policy errors. 

The central bank, which angered many forecasters in January with a surprise rate cut and eased again this month, has a mandate to control inflation, measured by the country’s consumer price index (CPI). It also uses a core-CPI measure that strips out some volatile items. 

Bank of Canada policymakers have put less onus in recent months on these public measures, pointing to the bank’s own calculation of an “underlying trend in inflation.” 

They say this measure, which excludes transitory factors like meat shortages and the effect of a weakening Canadian dollar, gives a clearer picture of slack in the economy. 

But some economists say its use effectively shifts the goal posts, making it harder to interpret how Governor Stephen Poloz will react to data and increasing the risk interest rates could stay low for too long. 

“If the economy was in better shape, and for whatever reason they didn’t want to raise rates, what’s to keep them from understating where they believe underlying inflation is?” asked Bank of Montreal senior economist Benjamin Reitzes. 

The Bank of Canada’s is supposed to keep inflation at the midpoint of a 1 percent to 3 percent target range. While annual inflation was at just 1.0 percent in June, core-CPI was 2.3 percent and has run above the 2 percent target since August. 

But the bank estimated underlying inflation was 1.5 percent to 1.7 percent when it cut rates on Wednesday, and said much of the difference with core-CPI is due to currency weakness, which boosts import prices. 

Combined with the bank’s decision to drop forward guidance, the use of an unpublished underlying trend means less transparency, said David Tulk, chief Canada macro strategist at TD Securities. 

“It is unorthodox to be using a measure that cannot be calculated by others,” Tulk said. “Since they model the currency pass-through and other one-time effects, their underlying measure cannot be easily replicated.” 

In response to the criticisms, the Bank of Canada said that while it targets total inflation, underlying inflation helps it understand “noise” from temporary factors. 

“Our use of multiple measures of inflation, which we clearly explain, helps us avoid making monetary policy errors – it doesn’t increase the risk of making them,” spokeswoman Louise Egan said. 

“This type of analysis is not new for the Bank. Our challenge has always been to look through the temporary effects and aim our policy at the movements in inflation that are persistent.” 

CIBC World Markets Chief Economist Avery Shenfeld sees some justification for looking through the depreciation effect, but takes issue with excluding other things like meat and phone costs. 

“That practice could down the road have the Bank of Canada ignoring an inflation trend that wasn’t as temporary,” he said.

TD’s Tulk said the fact core inflation was above 2 percent at the time added to the surprise of the January cut and noted that other central banks tend to focus on public inflation gauges.

 Yes, the “puzzled” Bank of Canada is so amazing at forecasting that they use a super-secret “inflation trend” metric which conveniently despite the fact core-cpi has been running at 2.3% hasn’t yet met their 2% inflation target. Of course for the people on the ground that 2.3% (likely understated as the two tier economy of the poor relies heavily on these volatile items) is very real. That’s real currency coming out of your monthly budget. Contrast this with the bank’s earlier statement: “rate cut will increase financial imbalances” and it seems full well they know what they’re doing, doesn’t it? The rate cuts are just not in your favour; they’re in the favour of the banking and credit oligarchs who need even more liquidity.

You’ll remember awhile ago on my post on the meaning of low-inflation in the risk adverse free market we briefly covered the fact that central bank rates are a guideline for private banks and that when banks don’t pass on the full savings it is essentially automatic profit.

Mortgage broker says banks aren’t giving Canadians the interest savings they deserve

“It’s tough to argue that it’s anything but [a money grab],” Ross tells As It Happens guest host Laura Lynch. “This does go directly to their profit margin. Being completely fair, the banks in Canada are not short of profit.” 

When the Bank of Canada last cut interest rates in January, it was by 0.25 per cent. The banks followed by cutting only 15 basis points. This week, the trend continues.Before the 2008 financial crisis, the banks usually matched cuts in interest rates by the Bank of Canada. Since then, it’s been less predictable. 

“There are some people who are saying they are building future loss provisions because, obviously, there is a lot of consumer debt in the economy,” Ross says. 

He doesn’t buy that argument. 

“There has not been an increase in defaults in Canada, so, while there is a lot of consumer debt that’s in the market place, Canadian consumers are wealthier now than they ever have been,” Ross says. “And with rising real estate values, the big banks have a lot of collateral.” 

He says that the rate cuts that banks have not passed on to consumers are beginning to add up. 

“It’s significant math. In the last few years, they’ve built in . . . more than one per cent and so for a $400,000 mortgage, you’re talking about $4,000 a year.”

I’m certainly not one to defend the banks but in this case I’d have to say Mr. Ross is wrong. The idea that the banks need more profit is silly as the most profit comes when people can service their loans. Saying the banks are simply engaging in a money grab is over-simplifying the situation when in reality with interest rates supposed to be a gauge for risk and the BoC attempting to artificially lower risk the banks are having to take risk calculations into their own hands with the added bonus of padding their margins. Of course the banks are probably aware this surplus is temporary as now the real situation is becoming clear:

Alberta insolvency rates rise as oilsands slump

“The rapidly emerging debate addresses the question of whether the Bank of Canada stands willing to step into the realm of unconventional policies, in case the evolution continues to stubbornly track the downside scenario and not the baseline,” said Jimmy Jean, senior economist at Desjardins Capital Markets. 

Recent economic indicators show a Canadian economy that continues to struggle in the wake of a collapse in oil prices that began last year. Statistics Canada said Monday that wholesale sales for the month of May declined one per cent, compared with economist expectations that sales would be flat. That follows a disappointing manufacturing read last week, which showed that factory sales edged up only 0.1 per cent in May, compared with expectations of a 0.4 per cent rise. 

Unconventional monetary policy has been deployed by the world’s major central banks to jump start their economies in the past few years, including quantitative easing programs by the European Central Bank, the Bank of Japan and the U.S. Federal Reserve — the latter of which deployed three separate QE programs, buying trillions of dollars worth of U.S. Treasuries to push down long-term yields. 

But while quantitative easing is the first thing that comes to mind when discussing unconventional policy, there are a variety of monetary tools the BoC can deploy if it is forced to use its last remaining lifeline and cut its rate to zero. 

For instance, the bank could bring back forward guidance, which was introduced by former governor Mark Carney in 2009 and soon after adopted by other banks worldwide. Forward guidance involves communicating clearly to markets the conditions the bank sees as necessary for future rate hikes, and even potentially hinting at the timing of such hikes. Poloz decided to end explicit guidance in 2014 when he took over from his predecessor, saying it should be reserved for use in a “zero lower bound” environment.

Actually what forward guidance really is, is a lie. Forward guidance is a bank *saying* they’re going to raise/lower rates hoping that the words and expectation itself is enough to move or contain markets. It’s what the Federal Reserve is engaging in now with their warnings of rate hikes yet each and every time they have an opportunity to do it, they don’t. Saying “forward guidance” is a tool of policy makers is akin to saying that “the boy who cried wolf” mobilized people effectively. Until the real crisis came, that is.