Remembering the bad old days of balanced budgets and a growing economy...

Attention spans aren't what they used to be, anything that happened 24 hours ago is already old news. You see it everywhere, people have trouble remembering a conversation from just ten minutes earlier. When I go to Tim Hortons and order an UNtoasted bagel, I pull away and check the bag to find that...yeppers...its been toasted.

Now all of a sudden Stephen Harper and the Conservatives are sound managers of the economy. Our economist PM, (who incidentally has never worked one day as an economist) bloats the size of government to its largest size ever, racks up the biggest debt in the nation's history, and can't provide a budget forecast that stands up to scrutiny for more than 5 minutes.

This is sound economic policy?

What are the solutions to a recession wreaking havoc with the economy and government coffers bleeding red ink? Red ink that at least partially resulted from increasing government spending while systematically reducing government revenues while times were still good.

Borrow, borrow...and then borrow some more people, just like your government.

Interest rates are set at historical lows, meaning consumers can load up on cheap debt to buy houses and finance expensive home renovation projects. Take your old car and get a new one with wads of government cash as an incentive to rack up even more debt.

Who cares that in the coming years many individuals debt servicing costs are going to climb higher and higher. Instead of having money for things like groceries or vacations, Canadians will be seeing more and more of their $$$ going toward paying off mortgages and loans as interest rates climb.

Just look at the recent news from Australia.

What's that future Canadian, leveraged to the hilt? Your mortgage is up for renewal and your carrying costs have doubled? Thank the Harper government of a few years back. What??? You don't remember Stephen Harper? I'm not surprised.

In a few years time the concept of discretionary spending may very well be joining 8-Track tapes on the trash heap of history.

Our dollar is again climbing sky high, meaning our manufacturing sector will continue to bleed jobs. More people in the labour market means more concessions from employees, and lower wage demands in an increasingly competitive job market.

And all this is happening as retirees worry if their pension funds will be able to sustain the mass exodus of baby boomers from the work force.

Oh yeah...Stephen Harper and his gang are doing a great job.

Hard to believe that just a few short years back we were paying down the accumulated debt, not adding to it in record numbers. Does anyone still remember when our Prime Minister was busy pursuing increased trade with emerging economies like China, instead of doing interviews for U.S. media outlets? Are there more than a dozen people out there who can recall our period of unprecedented economic growth, when unemployment was half of what it is now?

Thank goodness we came to our senses and switched direction.

If there is any justice in this world Stephen Harper will be manning the window at my local Tim Horton's in a few years time. And I just know he'll toast my bagel, the same way he's toasting Canada's quickly fading prosperity.

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U.S. facing a bigger threat than terrorism - Oil trade moving to other currencies

There can be little dispute that in the post WWII world, the United States has been the world's preeminent economic power. Its no coincidence her economic strength came in tandem with military might, empowered to ensure the protection of American business interests around the globe.

Living in the shadow of the world's only current superpower, (with China quickly gaining ground) our news often lacks a truly global perspective. Such is certainly the case with reports about Arab nations teaming secretly with China, Russia and France to move away from the US dollar for trading in oil. You can read about it HERE in the UK's Independent, I haven't seen anything on CNN, ABC/NBC/CBS or CBC/CTV.

Those who might be quick to dismiss such news don't fully grasp the significance of global money markets and the potential for a seismic shift in the world's balance of power should such a move come to fruition.

Because almost all of the world's buying and selling of oil is transacted in US dollars, the greenback's valuation has an almost iron clad backstop against catastrophic devaluation. Countries trading in oil must keep huge deposits of US dollars in reserve. Moving to other currencies, (the Euro, Ruble or Yuan) would mean nations divesting themselves of Benjamin Franklins on a massive scale...in the trillions of dollars.

What effect would this have on the US dollar?

The results would be devastating. Contrary to the knowledge of many, there is no gold or silver standard backing up the valuation of America's currency. There are no underground vaults with stores of precious metals, no concrete tangible commodity...nothing holding up the currency's valuation aside from the normal pressures of supply and demand. The U.S. dollar, and the Canadian dollar for that matter, are "fiat" currencies.

With just about all the world's oil trading being conducted in the greenback, this assures there is always plenty of demand for American money.

It should be noted that prior to the invasion of Iraq, Saddam Hussein had started demanding payment for Iraqi oil in Euros or Rubles, not US dollars. Iran as well has announced that it is moving its cash reserves from dollars to euros, this after opening their "Oil Bourse" for the trading of petroleum products based mostly in the European currency.

For those who believe that almost all conflicts between nations are borne out of economic considerations, this should provide extra food for thought with respect to both the Iraq war and the current sabre rattling in the direction of Tehran. It certainly lends credence to a view expressed very well by Eric Margolis, that the U.S. is being less than honest about the discovery of Iran's "secret" uranium enrichment plant near Qum, a plant that has been a known quantity for more than two years. (READ ERIC MARGOLIS' COLUMN HERE)

The economy of the United States is already under severe stress, a mass dumping of U.S. dollars on the world's currency markets could very well be seen as a fatal blow. With a massive trade deficit, all the products Americans currently import would very quickly succumb to hyper-inflation. Of course the products Americans sell abroad would dive in price, but therein lies the problem...the U.S. has not been a net exporter for ages.

This is definitely something to keep an eye on, but it requires looking beyond corporate American media. A quote from the above linked article by a Chinese bank official says all we need to know about the significance this move could bring:

"America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

The denials are already out, here's one from Bloomberg.


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Like it or not, Harper is on a roll....

Those who took great delight in the travails of Stephen Harper over the summer are likely none too pleased with more recent developments. The blogosphere tends to be extremely partisan in nature, and objectivity is often a scarce commodity.

But love him or loathe him, the fact is Harper is on something of a roll.

I'm not going to suggest that a run of good press and good optics is going to suddenly convert legions of detractors into fans....the news hasn't been that good. But for the majority of Canadians who are more interested in hockey and reality TV shows than politics, recent events likely have them feeling at least a little more warm and fuzzy about Canada's Prime Minister.

Back in July I wrote about Harper's Summer of Discontent, detailing the numerous blunders and scandals that were plaguing the Tories. Wafergate was hardly anything major, but it did cast the Conservative leader in a negative light. More damaging was the mess over the funding of GLBT -Gay, Lesbian, Bisexual and Transgender- events across the country. It harkened back to the days of the "scary" Reform/Alliance parties. Soon thereafter Harper was going all pitt-bull over a quote misatributed to Liberal leader Michael Ignatieff while on the world stage at the G8 conference in Italy.

Then, to top it all off, came news from Parliament's budgetary watch dog Dale Orr that Jim Flaherty's budget projections were totally out to lunch...again. Others like Kevin Page of Economic Insight, supported Mr. Orr's numbers, while dismissing the Conservative Finance Minister's forecasts.

Of course all that happened during the summer, when people are at the cottage or the trailer. I don't know that its yet been scientifically proven, but I strongly suspect that the smell of meat on a BBQ greatly diminishes the ability of the average citizen to digest any meaningful news.

So what has changed for Stephen Harper and the Conservatives in the past few weeks, as summer faded into fall?

Polling has shown support for the Tories to be very resilient, with their numbers hovering in and around 35% nationally. While that doesn't quite put them in majority territory, it does suggest that the electorate hasn't fallen in love with either Michael Ignatieff or Jack Layton. Given a summer of bad press, that had to be seen as a big positive for those on Canada's right.

I don't think its unreasonable to think those numbers might get a boost should news come out that Canada has been exempted from 'Buy American' measures as is widely speculated. The CBC, Globe and Mail and CanWest are all reporting that serious progress is being made in this regard. Its hard to see how developments in this area could have anything but positive results for Stephen Harper's Conservative government vis a vis their standing with Canadian voters.

And it would be folly to underestimate voter animosity toward Ruby Dhalla's private member's bill, proposing to shorten the amount of time immigrants need to be in Canada before qualifying for certain aspects of Old Age Security. On a personal level I have yet to encounter one individual who thinks positively about this proposed legislation, and that includes new-comers to Canada.

Finally, worst of all for those of us who would like nothing better than to see Stephen forced into a new career, comes the PM's touchy feely performance at the National Arts Centre.

Those who are quick to dismiss Harper's performance on stage, tickling the ivories while warbling not too shabily to the Beatles' "With a Little Help from My Friends" don't understand politics in this modern era of sound bytes and video clips.

Bill Clinton jammed on Johnny Carson with his saxophone, Obama danced with Ellen. While these antics have no inherent value...they do resonate with many voters. Harper's public personna has always been very stoney and contrived, and like it or not, his little turn on the piano will go a long way to softening that image.

Of course momentum in politics can be fleeting, governing during a time of increasing expenditures and declining revenues is not typically a time when sitting governments perform well with voters.

When the election writ is finally dropped, Harper is going to need all the help he can get.

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Note to the Liberals and NDP, give it a rest

Hypocrites calling hypocrites hypocrites, while the governing hypocrites sit back and smile. That, in a nutshell, is Ottawa these days.

Its all been said before, I'm just adding a little kindling to the fire.

The Liberals propped up Stephen Harper's for months, while the NDP chided them about forming a coalition with the governing Tories. Now the Liberals have withdrawn their support and are pointing fingers at the NDP for doing what they were doing for more than two years. Harper rails against alliances with socialists and separatists, conveniently forgetting his own wheeling and dealing with the same parties just a couple of years back.

Give it a rest guys, Canadians aren't stupid. We know this is all gamesmenship, so tone down the rhetoric and ease up on the hyperbole.

Here's a newsflash for Misters Ignatieff and Layton, polling still indicates that a majority of Canadians oppose the Harper government. With that being said, even with just 35% or so support of decided voters...that makes Stephen Harper king of the castle. All Mike and Jack are doing is pushing each other down the mountain, leaving the Conservatives relatively comfortable.

Jack and Mike don't have to work together, all they have to do is focus their attacks accross the aisle instead of on each other. We'll have an election when time and circumstance place the opposition parties on the same page, or when Stephen Harper decides to pull the plug himself...and not before.

Waiting things out a little longer may prove wise, given that cracks are already showing in our fragile economic recovery. A short lived spike borne of cheap interest rates, cash for clunkers and home rennovation tax credits is already losing steam. Take Harper and his cronies to task over their many failings, and leave each other alone.

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