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Economics Made Easy

Canada should mind its own beeswax

I’m not sure if you are up to date on what is going on in the Ukraine, but here’s a quick break down. Crimea, which is an autonomous republic in the southern region of the Ukraine, has elected a new government and has held a referendum which resulted in the people wanting to join the Russian federation. The US and Europe do not like this as they want to enslave the Ukraine into the Eurozone. As the lap dog of our US overlord, Canada has chimed in about this democratic election and refuses to acknowledge it. (Personally I think this is about as pointless as refusing to acknowledge gravity).  Furthermore our Foreign Affairs Minister John Baird announced that we Canadians will give $220 million of Canadian Tax Payers’ money to the Ukraine. Somehow this is supposed to show our support for the Ukraine and prop up their economy. (We’ve seen how well that works over the past few years as government balance sheets explode and the economy continues to shrink). Let’s get back to this $220 million that Baird is giving to the Ukraine. Did I miss the referendum on this? Did I sleep through the day that the Canadian federal government asked the people of Canada if they agreed to hand over their hard earned money to the Ukraine? Of course not. Because our Canadian politicians no longer answer to us, “They dictate to us!!” We have become the 51st state. We have taken a page out of the US doctrine on domestic and foreign policy. Our politicians ignore the citizens that they supposedly represent and they poke their political and military noses in places that they do not belong. The US has been doing this for 60 years and look what it has gotten them. Millions of US casualties, trillions of dollars of debt and an earned hatred around the world. Canada was once a nation of peace keepers. We are now the lap dog of the US and we kick the hornets’ nest whenever our US bosses tell us to.

We are starting to see a pattern here. About six months ago John Baird was shooting his mouth off about how we had to get involved in Syrian domestic politics. Now once again Mr. Baird is mouthing off about Crimea and telling the world that he speaks on behalf of all Canadians and that we must interfere with the sovereign domestic policy of the Ukraine (I know a neighbor to the south who does the same sort of thing). The US does not like Crimea joining the Russian federation because it weakens US influence in that area, it could threaten the US dollar and limit US access to the oil and gas rich reserves of the Black Sea which surrounds Crimea. Crimea provides Russia with its only warm water port year round and has a long political and economic relationship with Russia. Also 60% of Crimea’s population speaks Russian. Last week the new Crimean government conducted a referendum to ask the people of Crimea if they would rather ally with Russia or the European Union. (Maybe you should take note of this John. They actually asked their people what they wanted. Maybe Mr. Baird should give that a try sometime?) The truth of the matter is Baird is instructed to support the side that Obama tells him to support. Once again this is not about helping the people of the Ukraine: It’s about pursuing US Interest in a distant region. I would also like to know why it is that Mr. Baird feels it necessary to provide the Ukraine with a $220 million dollar loan that will never be repaid. Out of 193 nations around the world, the Ukraine has the 52nd strongest economy. The Ukraine has a stronger economy than that of New Zealand. I don’t see us sending money to New Zealand.

But at the end of the day, who really cares about what goes on in the Ukraine? It doesn’t actually affect you and me does it? Well $220 million dollars collected from Canadian tax payers like you and I will soon be leaving this country to promote “democracy” in the Ukraine. This is John Bairds’ exact wording. Now I’ve been a student of economics for 20 years and never once have I seen a correlation between possessing money and democracy. If these two entities were truly connected then Saudi Arabia should be the most democratic place on earth. Now the last time I checked there wasn’t an ounce of democracy to be found in Saudi Arabia. This is a country run and owned by a royal family. Maybe that’s the kind of democracy John Baird wants to bring to the Ukraine? Is it John?

What burns my muffins even more is as I drove to work last Friday I heard a report that an anonymous donation was made to KGH in the amount of 3 million dollars. This is wonderful and heart lifting news. Apparently KGH is conducting a funding drive to raise $12 million for new operating facilities. Now there’s a worthy expenditure of money. Just imagine how far $220 would go to providing improved health care at KGH. Once again I draw your attention to the manner in which our politicians piss away our savings and money to further personal relations and political gain.

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Government: the most organized crime

Two weeks ago I was drinking a morning coffee in Calgary whilst reading the Calgary Herald. I nearly choked when I read an article that stated Alberta Premier Alison Redford had spent $45,000 of the Alberta taxpayer’s money on a five day trip to South Africa to attend Nelson Mandela’s funeral. Now I think Nelson Mandela was a great man, but are you freaking kidding me with spending $45,000 of the people’s money on a personal trip?! Why does the Premiere of Alberta need to attend Nelson Mandela’s funeral? If she really wants to go, then buy all means pony up the cash yourself and hop a flight. Like most politicians she had to travel with an aide. Of course she did; how else would her shoes get tied and who would remind her to look both ways before crossing? This reckless spending comes from a Premiere who cut $120 million from the provincial education budget for 2013-2014. This is the same Premiere who has enacted a salary freeze for all doctors, nurses and every other person who works in the public sector.

However, Mrs. Redford is not alone in her thievery from the people she is supposed to represent. Our own Christy Clark dove into the public coffers to the tune of $500,000 to fund her second attempt to get elected last fall. (This is the official amount from Elections BC. I’m sure the actual amount is much higher).

Earlier in the month Michelle Obama purchased at $12,000 dress, with the people’s money, to wear to a dinner she was hosting for the French Prime Minister. As absurd as this is, it cuts even deeper when you realize that the median annual household income worldwide is $9,733. Of course this does not even address the total cost for hosting the dinner, which is likely in the hundreds of thousands of dollars once all is taken in to account. This isn’t even the tip of the iceberg if we look at the corrupt spending of politicians around the world.

However we constantly hear from politicians and governments that they must find new ways to tax us or else we won’t have roads and hospitals. The truth of the matter is we have plenty of money for roads, hospitals, schools and all of the other necessary expenses that the public deserves. Where we fall short is finding funding to pay for the trips and opulent lifestyles of our political oppressors. This blatant theft from our politicians upsets me greatly and it should upset you also. I was at a dinner party last weekend and a friend was telling me of how her daughter was raising funds for a girl who had been stricken with an illness. It was a wonderful story that illustrated the kindness and caring of the people that surround us in our community. I also read lately of how a significant donation was made to KGH from local efforts. These are heart lifting stories, but the money that is raised by these amazing individuals is a pittance compared to what is being wasted by governments. It’s time that we made our politicians and governments accountable. It is time that they were weighed and measured and I assure you, they would be found wanting.



The Emperor has no clothes

I have written about inflation vs deflation in a previous article (Deflation: Friend or Foe) , however I feel it warrants addressing again as our economically-challenged Bank of Canada Governor Stephen Poloz is once again arguing the merits of an economy that must sustain inflation. Bankers, politicians and many economists believe that inflation is an absolute necessity for a healthy economy. This is essentially the equivalent of saying that a certain amount of heroine must be consumed on a daily basis to keep the human body healthy. Inflation at any level is corrosive and highly destructive to the purchasing power of the citizens of any country. Inflation is simply an expansion of the money supply which precipitates rising prices in an economy. The result is that a dollar today will purchase less than it will at some point in the future. However it’s a Ponzi scheme to tax the citizens of a country and a necessity to keep the scam of fractional reserve banking afloat.

The opposite of inflation is deflation: A shrinking of the money supply and an increase in the purchase power of a currency for the citizens of a country. The argument presented by our central banker is that the problem with deflation is,  "Expectations become unanchored on the downside and people put off their purchases because they expect things to be less expensive later." Because of this insane theory, central bankers around the world fear deflation as much as politicians fear a public audit of their expense accounts.

As a student in university, I too was offered the same “Deflationary Kool-Aid” as that drank by central bankers. The difference is I refused to imbibe in their toxic concoction. It simply didn’t make sense. Now, with 20 years of economic and trade floor experience I still refuse to consume the cocktail. Central bankers believe that if we have deflation people will put of purchases until some point in the future. So nobody buys anything today, the economy goes to hell in a hand basket, zombies invade the planet and life as we know it will cease to exist. It’s a good script for a B-grade horror flick. So given the Kool-Aid alcoholics theory we won’t buy food today because it will be cheaper tomorrow. We won’t go to university today because it will be cheaper later. Even though you are cold today, you will hold off buying a sweater until it is cheaper.

All economic theories should be equally valid when inverted. Thus using the deflationist's theory, in an inflationary economy we will purchase everything today because we fear rising prices in the future. (Insert a healthy dose of sarcasm here.)  It makes sense to me. Every time I go to the grocery store I make sure to buy two months’ worth of groceries as I know prices will rise in the future. I often buy three tanks of gas when filling up my car because I don’t want to pay more in a few weeks. And of course I always buy my clothes in bulk as I fear future rising prices. I suppose this theory makes sense to the intoxicated central bankers, but to rational citizens we see the flaws in this theory.

The point of this article is to be able to refute the argument the next time you hear bankers or politicians tell you that deflation is something that we must prevent at all costs from entering our economy. With the inflation that has been inflicted upon the globe for the past 45 years, we need a good dose of deflation to shrink government, return the purchasing power to the people and increase the standard of living around the globe.



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War is over

I feel like Tom Cruise in Jerry Maguire when he writes his mission statement. I have one hundred things on my desk and about 15 minutes to write this article before the cutoff deadline. Here goes.

If I could only choose one thing from my Christmas Wish List it would be without a doubt to abolish governments around the world as they exist today. I would replace them with a significantly smaller version that bowed to and feared the people they represent as opposed to the opposite, which is what we presently have.

As I have stated in many past articles we have the concept all backwards. We’ve put the foxes in charge of the hen house. Governments steal from us in the form of taxation and inflation. They are the worst stewards of finances, yet they are in charge of the money. The term “Moral Hazard” was invented simply to describe the actions of government with our money. And it is important that I point out that this is our money: not their money. They stole it from us. Governments waste trillions of our dollars and yet they are never reprimanded in any fashion for their reckless spending. Here’s a fun fact. Did you know that the elected representatives of municipal governments of BC, our own city councilors included, have 1/3 of their wages from the city exempted from taxes? Why you ask? Well, the answer is simple: they are better than you and me. Look around the world, the most luxurious residents and buildings are those of “government” officials. Have you ever been to the legislative buildings in Victoria, Alberta, Manitoba? Have you seen parliament in England? Have you seen the ultra-luxurious accommodations of government in Russia, Cuba or China? Now there’s communism for you. All the people shall share for the common good….except the government officials, they shall live like kings.

But more importantly than all of this is the issue of war. War is never ever declared by the people, it is always declared by a handful, and sometimes just a single person, in government. And war over the past 50 years has never been about protecting the people. It is always about furthering the riches and power of the ruling class and their friends. The propaganda machines make us think that we are at risk, but we’re not. The ruling elite are at risk of losing power or money.

So this Christmas I wish for sanity to prevail around the world and for the people to wake up and take back their lives. I wish for peace and prosperity and for the biggest bully we’ve even know to start to decline in power and influence.

WAR IS OVER! (If You Want It) from Yoko Ono on Vimeo.



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