Monday, February 25, 2013

Deflating the pillars of Canadian economic mythology

Canadians are jumping out of one lie and into bed with another. Buzz words like "bitumen bubble" pop up out of nowhere and are dominating Canadian news. The news which of course all "saw this coming" even though if you look at their headlines from a year ago they were all talking about economic engines leading Canadian economic growth, stable banking systems and consumer spending, etc.

The "bitumen bubble" is just a new lie to keep dangling carrot of prosperity seemingly within reach. All we need are a few tweaks here, and a few pipelines there and it's all fixed! Just keep supporting these brain dead plans and one day, some day, every thing is going to be just peachy.

For those not trapped by one bullshit term, they are trapped by another: dutch disease. The idea that somehow our shitty unviable oil industry is pushing the Canadian dollar up having all sorts of effects on manufacturing, etc, though with recent global economic reports our currency has for the moment depressed some.

Two bullshit terms designed to appeal to two different segments of an already divided population.

I'm not even going to bother linking the absolutely numerous articles filling the web even as we speak calling out the financial viability of the oilsands but for all the wrong reasons. Not properly understanding the reasons for what's happening to the Canadian economy, in entirety, allows for the easy manipulation of public opinion and policy purely on the promises these new directions will "fix the problem". You know, that whole "problem-reaction-solution" thing.

Isn't it convenient that the solution is to basically bend over backwards to get industry what they "need"? "Business trip", after "business trip", after "business trip" to act as, what, exactly? The public relations big oil can't afford? Why is the onus on the Alberta government anyway to prove that a private industry is viable, environmental, or ethical? Especially when Alberta's own roller coaster economy seems to scream that: "it isn't, they're not, ask China". It's getting harder and harder to figure out where the industry ends and government begins. These people have been lying for years now, it's become fully apparent there was never a long term plan, that what they are in fact doing is gambling on an extremely bad bet.

Almost two years ago I setup my Hellberta blog, and the reason I setup that blog was not to harp on Alberta's environmental record or to simply bitch, but to attempt to expose and warn about the economic troubles the oilsands will cause. What we're seeing now is just the beginning and it's not being caused by dutch disease or some nondescript bitumen bubble. Our leaders have been deliberately detracting people from the true effect the U.S. financial circus is going to have and how it is actually affecting our currency.

With the quickly changing landscape and the Federal Government's amazing ability to propagandize the fire-sale of it's assets as a "good thing" while somehow convincing everyone to forget everything it said about everything even 6 months ago; I currently see 3 'pillars' of fantasy economic garbage being shoved on Canadians carefully designed to keep you oblivious to the reasons of the crisis.

1) That there is a "bitumen bubble".
2) That our currency is "strong".
3) That the oilsands, fundamentally, are viable.

I believe most of the population believes at least 1 or more of these items is true, which aids the illusions we're being fed about our financial situation.

What "bitumen bubble"?

OMFG, LOOK OUT!! It's the.. bitumen bubble!!! Coming to destroy economic forecasts far and wide (across Canada anyway). I'm still a little fuzzy though on which part of our situation is the "bubble" aspect of the bitumen bubble.

I've realized now, thinking back, that Alberta didn't just gamble once, but they actually gambled twice, or gambled on the price of the wrong asset depending on your point of view. During the recent Alberta election notice that "oil price" was the topic of choice, and not "bitumen price", two separate assets. Alberta not only gambled the future on an unsustainable exponentially rising oil price, but Alberta also bet the future on an assumed relationship between the oil and bitumen assets. Forecasting the oil price was in other words "as good as" forecasting the price of bitumen.

So where is the "bubble"? Which asset is over-priced? oil? or was it bitumen that was over-priced all along? I've pointed this out before: if there ever was a bitumen bubble Alberta's problem now is that it's popping.

Have you ever wondered why Alberta over the years constantly referred to the "billions" in total reserves rather than production targets? Alberta always refers to it's reserves and then as a side note talks about it's rate of production. Targets like 3 Million barrels / day by 2030 of which we've been told by the elaborate ethical oil propaganda campaign that we could somehow replace the world's top "unethical" oil producers. Alberta refers to it's total reserves because out of context they seemingly support the fantasy prosperous future they've so carefully painted for you. Of course with world oil demand forecasts as they are currently our piddly 3 million barrels isn't going to be providing even a dent in the world energy demand bucket let alone providing anyone anywhere with "energy Independence".

These "leaders" will tell you literally anything so long as you keep chasing that dangling carrot at the end of fairytale rainbow. Whatever it takes, and when it comes to propaganda used to manipulate the public opinion money is never an object, is it?

How many public relations guys do you think it took to come up with the propaganda phrase "bitumen bubble" anyway? Oh, it's just a cute widdle bubbly wubbly!

The weakest link

OMFG, LOOK OUT!! It's the.. dutch disease!!! Making our currency all strong and stuff. I just did a massive post on hyperinflation in the U.S. which also describes why our currency is so "strong". In short, ours isn't strong, the U.S.'s is just a lot weaker. Everything is relative! If our oil is the reason for our strong currency then why is it that we only achieved parity with the U.S. directly before and ever since the crisis of 2008? Why not back in 2006 or 2005, during the height of our "bitumen bubble" (or at least what I believe was the real bitumen bubble)? Because it has nothing to do with it, it has to do with the interest rates and global currency devaluation war currently going on.

I don't really feel I need to expand any more here, our currency isn't strong it's just relatively stronger than the USD, period. Any questions? comment.

Oilsands prosperity is a lie

This is our grand lie, isn't it? Canada's whole economic dream revolves around the flawed idea that somehow with enough "R&D" we can overcome the 3:1 EROEI ratio of the oilsands and until then we're just not going to talk about it. We can't. It's not just the government budgets...

Low gas prices scuttle Synfuels carbon capture deal with Alberta government
Nexen reports loss ahead of CNOOC takeover
Talisman layoffs could be harbinger of pain ahead for other Canadian gas producers
Cenovus posts Q4 lossGrowth in fourth quarter may be softer than previously expected: Carney
GDP numbers expected to paint gloomy picture of a slowing economy

It's not the government or taxes; it is the very fundamental unviable nature of oilsands development and other extreme energy itself, and when it comes to Canada's economic crisis: this is just the beginning, up until now we've only been feeling the effects of other countries' financial disturbances. Now it's our turn.

A summer of fun

Expect protests. Lots of protests. EI protests, student protests, idle no more, occupy, all of it. Canada is now well into it's own decline and severe civil unrest is never far behind. These will likely cause Canada's GDP-Consumer Spending-Housing feedback loop to deteriorate even faster than it is now.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Tuesday, February 19, 2013

Update-2: The why and how of U.S. hyperinflation

(Unlike my usual updates, Update-1 and subsequent updates for this post will not be noted as I will be making several revisions to this post as a whole as I sort my thoughts out better)

Oh charts. Charts are really great at showing you an established pattern, and are a reasonable way to forecast future events if it can be expected that the pattern displayed by the chart proves to be true. It is faith in these patterns, based on patterns, based on other patterns, which probably originate by some accountant's cooked books which might explain the widely expansive forecasts of the modern day. The pattern continues until it doesn't, a circumstance or condition changes and all previous models based on established patterns begin to fail such as world growth models are now.

Just recently I have been having a lot of conversations on Twitter about U.S. hyperinflation, or rather the likely-hood of that happening. I personally see hyperinflation as inevitable in the U.S. however the 'why' and 'how' are not going to be what people expect. The U.S. economy is unlike any economy prior to it, it's importance in the current economic ecosystem is unparalleled to anything we have ever witnessed in human history. The closest thing might be Rome, but even then our reliance on the modern economy and industrial supply chain to take care of our most basic needs such as food makes even that comparison moot.

It's easy to lose sight of where the real productive economy ends and the monstrosity we call "financial services" begins. This is not to say that as a society we don't need "financial services" - we do - but the moment we forget that these entities unto themselves do not produce anything tangible at all and start, say, using their GDP figures which dwarf the figures from any other industry as evidence of "recovery" we risk getting lost in the patterns and charts instead of simply looking around at what's going on.

You'll know you're reading someone who is lost in the patterns when what you're reading about the economy oddly resembles the weather. In particular, when it comes to human responsibility in regards to the economy, we act as though banking collapses and such are hurricanes or tornados; unavoidable catastrophic events which always inevitably signal a new round of austerity or "belt tightening" for the productive segments of the populace. "We didn't see it coming". This is despite the fact that the economy is a human invention, can be modified at any time at our will, and perhaps more importantly is simply supposed to facilitate the supply and demand of goods and services. The economy responds to human activities, and is supposed to be in service to those very humans.

Today a few hours after my conversation on hyperinflation, someone replied: "Trillions will never 'come home to roost' it's suicide for any holder of US bonds & the Fed knows it. The Fed would walk away from every bond written.".

Unfortunately the conclusions I've made from my research lead me to believe that we are past the point where the Fed's actions even matter. Let me try to visualize for you where we are in the current scheme. Picture the economy is a boat heading towards a giant water fall (for entertainment value we'll call it the fiscal cliff), the Fed is basically the guy driving our good ship Economica and pretty well only has two options of what he can do: Full speed ahead, or full stop. Full stop isn't actually full stop as the momentum already built up is more than enough to push the boat over the edge, and making matters worse the closer to the edge you get the faster and rougher the waters become making it more and more difficult to address the situation in any form. Doing everything and doing nothing will both result in the same thing, the 'what' is already known and we're heading towards it however the 'when' is dependant on how much effort is put into trying to push it off into the future. Sooner or later though, you're going over that edge. The Federal Reserve has complete control over the throttle of the engine room, they do not however have any control over the direction of the boat.

U.S. hyperinflation can not, by nature of the U.S. and global economies, simply occur due to currency devaluation. Currency devaluation on it's own isn't enough, at the end of the day you have to look at what families buy, and what might affect those commodities to increase in price. What's key to understanding where this hyperinflation will actually come from is the understanding that externalization of cost has been happening for a long time, this phenomenon has been building, compounding the effects back onto itself and the further we push it off into the future the worse it's going to be, not just for the U.S. but for pretty well every country in the world dependant on the U.S. currency.
source

For the purposes of this post we're going to use Canada as the role of the 'supplier' (since I know it well and in comparison to countris like China is a lot less involved in the manipulation of currencies), and with the U.S. as the 'consumer' to better illustrate the cause and effect relationships between the U.S. and it's suppliers. In reality China will likely be the primary source of hyperinflation for the U.S. however Canada provides a better example and will have an effect albeit to a lesser extent, especially considering how close China and Canada are getting.

The relationship between the CAD and USD leading up to the crisis and ever since has been something quite new in Canadian history and for Canada it has been quite a challenge to adjust business models which were based upon a roughly 4:5 ratio ($0.80 CAD per $1.00 USD). The reason why provides the context for the global currency war: with a 4:5 ratio the Canadian and U.S. relationship was balanced, we were selling and more importantly they were buying because it was affordable. However, with the exception of the blip in valuation in 2009 which could easily be explained by global mass confusion (or a new president, whatever, a lot of significant events happened in 2009) as well as anything else as we have remained more or less at parity with the USD with fairly minor deviations ever since. This parity with the U.S. is part of the reason Canadian exports are depressed and also partially why things are more expensive in the U.S. coming from Canada.

Canada is more expensive to import from now which has been the real motivation behind keeping low interest rates in Canada. Our need for low interest rates does not stem from a need for more lending but rather a need to at least keep up with U.S. currency devaluation and we're not the only ones either. Canada as an economy is too small to push any real weight with currency printing, so the best we've been able to come up with is to "hold the line" so to speak on currency valuation. Attempt to keep within the range of par with the U.S. so that trade between our two countries does not become so unbalanced that it becomes unstable. There is a symbiosis there, Canada needs the U.S. and the U.S. needs Canada and what's more, we both need our economies to be balanced with one another. If Canada were to raise interest rates now you would begin to see a spread between the valuation of the CAD and the USD and the U.S. would no longer be able to afford imports from Canada as readily as they do now.

The CADUSD currently represents a possible floodgate of sudden cost for the U.S. while serving as a time bomb for Canada's own economy. Canada can't keep up this balancing act forever, low interest rates are having serious effects on the Canadian economy and creating several mega-bubbles of our own, such as housing. With depressed exports, expensive energy, and a number 1 trading partner with credit issues Canada's future situation looks bleak even though it is favourable in comparison to those countries who are the subject of this post, however for more on Canada's situation please look at the rest of this blog.

That's all dandy, but what's this have to do with hyperinflation?

Glad you asked. The economic symbiosis between the U.S. and Canada exists to an even greater extent between the U.S. and China (not just China though, "emerging markets", but for the purposes of this post we'll focus on China as they are by far the most integral). This relationship is not as easy to understand nor as clear cut as the cause and effect between Canada and the U.S. however it's operating on similar principals.

The currency "war" really is less of a "war" than it is a series of predictable reactions. Assuming every country is autonomous in regards to it's own needs, and the needs of the country outweigh the needs of the world then it can be assumed that every country will act in it's own best interest (say as Canada is with it's own interest rates). The currency war is not proactive, it's reactive, the result of central banks essentially trying to compensate for ever growing imbalances in global trade and valuations. This is the momentum in the river we're sailing on; it's like every country has a gun pointed at each others head and now that all the guns are out no one can figure out how to make a move which would lead to putting them away rather than firing one off and having a chain reaction kill everything.

As the tweeter earlier said "it's suicide for any holder of US bonds & the Fed knows it", they might know it but they are not the Gods at the table anymore. Their actions now will simply be reactions to the reactions forced by previous actions. Get it? The Fed has got the biggest gun at the table (or at least, they did), so it's unlikely they will be lowering theirs first.

The pressures between the currencies can not continue indefinitely, there will be a breaking point when one country or another feels confident and positioned enough to reverse course. Right now any reversing of course between the U.S. and China would be a mutual suicide for both countries, but that doesn't mean they don't want to and sooner or later will have to as the two countries are heading for a straight on collision when it comes to energy.

China rejects status as world's biggest trader
China plays by its own rules while going global
The Real Reason the Economy Is Broken (and Will Stay That Way)
Alarm about radioactive leak at most contaminated site in U.S. — “We’ve got a problem, this is big” (VIDEO)

Posted above are 4 articles, 2 about China and it's global position, and two about the U.S. and it's energy economic issues. Just recently the U.S. regulator had to finally grant access for the sale of Nexen to CNOOC and if you look at this situation from the right angle you can see that China is already beginning to use the cards they hold against the U.S. in beneficial ways which for the moment keep the U.S. in working order but for China creates long term assets while for the U.S. takes away those assets. China has been moving into the Gulf, into Canada, into Iraq, they're securing energy assets all over the world. China is carefully positioning itself for the day the symbiosis between the U.S. and Chinese economies collapses and due to the U.S.'s economic position and reliance on China as a supplier there is really nothing that can be done outside of trying to delay the process. On the world stage, especially in dealings with China, the U.S.'s once definitive voice is beginning to sound hollow.

There is one, and only one, reason currently why the Federal Reserve money printing does not translate directly to hyperinflationary devaluation and that is that globally oil is traded in USD which keeps the rules related to world trade in favour to the U.S. and also keeps the concentration of currency diluted across the globe. Historically, examples of hyperinflation have occurred in relatively isolated environments and not within currencies held as reserves around the world.

Monopoly money only has value within the context and rules of the game 'Monopoly', it does not represent any sort of real value or productive capacity just as fiat currency does not. A simple way at looking at U.S. hyperinflation is that the USD is Monopoly money, valueless out of the context of the rules of the game but invincible and impervious - almost God-like - within those rules.

A phrase I used which a few Tweeters have latched on to or have been questioning is that "the trillions worldwide will come home to roost". What this means is that because the USD is the U.S.'s primary export, which they can essentially produce at will and directly buy goods for (currently) with little or no productive input costs, there is plenty more currency in circulation around the world than there is solely in the U.S. economy alone. This currency circles the globe because it is valuable, and it's valuable because no matter who or where you are you need it (or at least can use it) to buy oil. Should the world move away from the USD as the primary currency to buy oil this effectively changes the rule of the game being played. One day in the future the U.S. may have to exchange USD for another currency to buy energy and without some sort of productive economic capacity the exchange rate won't be favouring the U.S.. Right now the U.S. has a trade deficit and the Federal Reserve has to print and monetize debt to stop the government from shutting down; just imagine what this trade deficit might look like with the added cost of acquiring the currency needed for trade itself.

Right now the Federal Reserve is inflating the currency for the purpose of effectively paying off debts at a cheaper rate than when it is issued and of course based on these metrics alone the U.S. can never enter hyperinflation, it needs another trigger. This trigger comes when the U.S. has to start actually paying the input costs for their output instead of just recording it as a deficit and forgetting about it while getting their imports anyway.

Energy and GDP are closely tied together, an increase in real productive GDP also should equal an increase in energy consumption. What happens to the U.S. trade deficit when simply printing more USD isn't enough? What happens when other countries start asking for something tangible in return? What happens when the motivation to hold the U.S. currency is gone? The Fed already has to print exponentially just to make a somewhat logical case the U.S. doesn't have a debt problem and that is with countries accepting the USD straight-across for commodities. If a loss of confidence does occur the USD being held all around the world, being traded for commodities, will become valuable in only one place almost over-night: the U.S., and the USD worldwide will be returned to the U.S. in short order as a result.

In some ways this is already happening, for instance: China is grabbing incredible amounts of energy assets all around the world and they're using their stores of USD to do it and in the process they are exchanging the USD for tangible assets (Many of these assets being bought directly out of the U.S.'s hands).

Conclusion

The latest talk in Canada has been of a need to expand our markets beyond the U.S. which for readers of my blog is nothing new, but for Americans this is an indicator of events to come. The inflationary price increases are already here, they're already waiting to flood the market, it is purely due to the U.S.'s unique and important position within the global economy which has kept this at bay but time and tools are running out and pressures are building.

The countries that the U.S. depends on for supplies are working to position themselves to withstand the inevitable collapse of the U.S. economy and once they feel suitably positioned there will be nothing for them to hold on to in regards to continuing to use the USD as a reserve. In other words, the rules and context of the game will change and the USD will become just another currency (or people may just start literally exchanging it for energy by burning it to keep warm, who knows).

The global position of the USD is a product of the revolutionary industrial superpower we call the U.S., the U.S. that at one time was the world's largest energy exporter and has now turned into the world's largest energy importer. A U.S. whose final card was military might to enforce trade for oil in USD which is now over-extended and falling behind.

Update-2

Coincidentally after writing this post I watched this, very relevant.


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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Sunday, February 17, 2013

Alberta's looming water crisis

Every time I sit down to review the news before a post I always end up logging on at the exact moment that Alberta's bullshit is exposed. As a result I must put off my post about global trends and instead focus on Canada's "economic engine", as most trends for Alberta have subsequent effects for Canada as a whole.

Today we find more "memos" informing our government officials what is actually happening so that they can turn around and lie to us while calling those concerned "terrorists".

Now, let me ask you: What do you call an economy which is heavily reliant upon fresh, clean, water sources to run an industry which pollutes those very water sources? I'd call it "doomed to implode", and once you factor in the incredible "investment" made on behalf of Albertans by the Albertan and Federal governments under fabricated pretence there is really nothing else to call it other than "utter and complete stupidity".

Here's some photos I took of "surfactant" leaking from oilsands developments in Fork Lake in 2010. At the time I took these I emailed them to the Alberta legislature, every single MLA. I only got a reply from the Liberals who described what was in my pictures as 'surfactant'. Fork Lake is one of the fresh water lakes being diverted to feed oilsands developments (the local wildlife really enjoyed playing in this toxic shit):

 
(The writing in the sand says 'Dirty Alberta')
 




Alberta: Freedom to exploit, spirit to deceive, and enough stupidity to fuck everything up for generations to come. It's all lies, all the time, because otherwise they'd have to admit they have no plan for the future and that their current actions are destroying our future. The gravy train only runs between a quarter to bullshit and half-assed o'clock.

Click here to recommend this post on progressivebloggers.ca and help other people find this information.

Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Thursday, February 14, 2013

Rule of acquisition #109: Dignity and an empty sack is worth the sack.

Chris Martenson has written an excellent summation of 'The Real Reason The Economy Is Broken (and Will Stay That Way)'. Albertan's, Alberta's industries, and the Alberta Government itself should read it carefully.

Economic Sinkholes

This leads us back to Gail Tverberg's piece on economic sinkholes.  Her main point in that piece was that in times past, higher investment led to higher output.  That is, spending led to economic growth, especially investment spending.

Carefully buried within higher oil prices are higher prices for every single economic activity that uses them.  Along with diminishing ore yields come incrementally higher costs to simply, extract, and refine those ores, let alone fashion them into something useful.

Gail writes:
All types of mineral extraction, but particularly oil, eventually reach the situation where it takes an increasing amount of investment (money, energy products, and often water) to extract a given amount of resource. This situation arises because companies extract the cheapest to extract resources first, and move on to the more expensive to extract resources later.

As consumers, we recognize the situation through rising commodity prices. There is generally a real issue behind the rising prices -- not enough resource available in readily accessible locations -- so we need to dig deeper, or apply more “high tech” solutions. These high tech solutions indirectly require more investment and more energy, as well.

While we don’t stop to think about what is happening, the reality is that increasingly less oil (or other product such as natural gas, coal, gold, or copper) is being produced, for the same investment dollar. As long as the price of the product keeps rising sufficiently to cover the higher cost of extraction, the investor is happy, even if the cost of the resource is becoming unbearably high for consumers.
(Source)
The summary here is that it takes more and more to achieve less and less.  The old form of economic growth is no longer with us, but the Fed still doesn't get it.  It still has its eyes firmly trained on economic indicators and equations, having not yet raised its gaze into the real world where limits are being reached.

As Gail nicely encapsulates, many of those limits are carefully hidden from view as a slightly but steadily reducing net energy for oil seeps into every nook and cranny of our complex economy.
Alberta's whole economy is one giant economic sink hole, and by extension Canada which is putting all of it's eggs into Alberta's basket (or at least energy price tends to be the federal budget excuse too) is getting sucked into it as well.

Cenovus posts Q4 loss
CALGARY - Cenovus Energy Inc. (TSX:CVE) posted net and operating losses in the fourth quarter as well as an 18 per cent drop in cash flow compared with the year-earlier period.

The Calgary-based oil producer had a net loss of $118 million or 16 cents per share, a big turnaround from the year-earlier profit of $266 million or 35 cents per share.

It also had an operating loss of $189 million or 25 cents per share, compared with the profit of $332 million or 44 cents per share in the fourth quarter of 2011.
In Alberta we have a high amount of regard and dignity in our oil sands. Oil is pretty much a part of Alberta's identity. However, as the Ferengi say: "dignity and an empty sack is worth the sack".

Click here to recommend this post on progressivebloggers.ca and help other people find this information.

Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Tuesday, February 12, 2013

Update-1: The political sportscast: meet the new plan, same as the old plan

I've been overly stressed lately. For the past week or so I had once again written off bothering to follow the news, write about the news, comment on the news, or do anything with the news. The stupidity of the path we're on is apparent and all you have to do to see it is look around. The news postings I point to used to be in the backs of papers, unnoticed by those who weren't looking for them but now it's on the front page everywhere, everyday.

It's absolutely astonishing how today it seems almost every Canadian and their dog is saying "oh we saw this coming", "we told you so" etc, while putting their faith into more failed adventures proving the true cause of our predicament still goes unnoticed, or at the very least misunderstood. I remember when I first began my blogs much of the resentment that was thrown my way for making such "dire" forecasts. I was called paranoid, a conspiracy theorist. I was repeatedly told that "the policies of the conservatives ensured our banks were stable", and variations on the same propaganda, repeated by repeaters who can't see the difference between political analysis and rhetoric. Today many of these same people are saying things similar to what I'm saying, however still based on rhetoric, still based on repeating what they heard on the TV or talk radio.

Turn off your TV, folks.

Do you ever notice how sports "analysis" and political "analysis" mirrors each other? While watching sports your entertainment experience is often interrupted so that you can listen to 2-5 guys in nice suits discuss "the game" in the same fashion a political panel might discuss current events. In fact they are modelled on the same premise and subconsciously you are not supposed to distinguish between them. These two divisive panels are meant to be interchangeable, the sports commentators act like "the game" is news and the political panelists act like issues and positions are sports. 'Debate' is often considered a sport itself.

I find the structure of this  "analysis" lends itself perfectly to promoting the repetitive nature of political rhetoric primarily because people get so caught up in the argument and cheering for their "team" that all critical thinking goes out the window. Everyone seems to be looking for that next 'zinger' and few seem to be critically analyzing the situation nor entertaining ideas outside of the box or beyond the institution. Alberta (yep, yet another post mentioning good 'ol Alberta) provides a prime example:
The province’s first economic summit on Saturday reinforced the pressing the need to get oilsands products to international markets, and Hughes said his department is working on an aggressive new plan to upgrade Alberta’s resources in Canada and get them to coastal ports for export “however we can.”
I've already focused on how Alberta's "pressing need" dictates their priority and pointed out how Redford simply admitted to you all that it's "job #1" for her government (you know, as opposed to running a province and providing for the citizens of that province) so this time lets first focus on Alberta getting it's oil to 'coastal ports' for export 'however we can'.
“It is a paradigm shift,” Hughes said. “We’ve taken a very deliberate, strategic approach to this. When you step back, what is Alberta’s interest? Alberta’s interest is to get the best possible price for every barrel of oil that is sold from this province.
“We’re at the stage where all ideas are good ideas,” Hughes said. “As a result, we’re fully prepared to look at all of the options, options that even two years ago would have seemed completely speculative and would have never had a hope of being considered seriously.” 
These right here are some pretty telling statements that when combined with some other aspects really shows how desperate Alberta's situation is becoming. "We're at the stage where all ideas are good ideas", except any ideas which include diversification away from oil sands developments right? They're entertaining all ideas all right, every half-assed brainless idea they can come up with "since April" to protect "job #1" for this government (and by extension the province) and that's all.

Alberta will get it's oil to 'coastal ports' for export 'however they can'. However they can likely includes lying to you to support a West->East pipeline under the false pretense that it will address energy security in Canada. The truth is it will be used to export from other coasts, all of the talk of "value-added" in Canada is simply P.R. to get you all to go along with it.

"options that even two years ago would have seemed completely speculative and would have never had a hope of being considered seriously" - Here Alberta admits for you that it never had a long term plan and has completely altered it's strategy quite recently. Of course their new plan, like their old plan, is focused on private profits at the public expense and as always Alberta is overestimating the capacity of their future trading partners, ignoring their true economic condition (as we ignored the U.S.),  and also underestimating it's own infrastructure costs which as discussed many times before on this blog will always continue to outweigh the diminishing revenues we receive. The driving force behind these expansions is obvious, and it's not the "public good".
(Reuters) - TransCanada Corp (TRP.TO: Quote), which is seeking U.S. approval for the Keystone XL pipeline, reported a 19 percent fall in fourth-quarter profit due to lower earnings from its power business and reduced contributions from some natural gas pipelines.
Alberta power rates among highest in country; deregulated market blamed for price spikes

I've pointed out before how Alberta's power consumption is also the highest in Canada and the challenges that presents. What should also be noted is how Alberta's deregulated market aids the two tiered electricity industry as we witnessed during Alberta's rolling blackouts when despite the fact that the majority of our power consumption comes from industry it was the populations who experienced the blackouts while the province ensured full power was delivered to industry. Here they are blaming the deregulated market for the power spikes and cite "market volatility" as the core reason, of course market volatility is not unto itself a reason for anything.

Market volatility is a symptom of the reason and that reason is the demand on our power grid continues to increase. Volatility when dealing with real demand and supply comes from fluctuations in demand due to the uncertainty of supply. Consumers are being forced to compete with the oil sands' industries electricity demand and more and more are fighting over a tighter supply. The deregulated market in a two tiered system such as this one simply ensures that an industry run electricity industry always wins.


Northeast Alberta growth creating calls for highway improvements

Our demands for growth wait for no one but our infrastructure requirements sure do:
As growth continues in the area so too does traffic on highway 881. There was $1 billion in development in Lac La Biche county in 2012 compared to $100 million the previous year. Both police and drivers note many drivers are impatient with the traffic and make horrible decisions.
While the issue of safety is the primary concern, Albertans should keep in mind these highways which were designed for the small communities within Northern Alberta were never designed for the types and quantities of industrial traffic utilizing them. These improvements are needed solely because of Alberta's industrial choices. More cost, more borrowing, all on the backs of the taxpayers rather than the industry they are being developed for.

Overall it should now be quite obvious that the conditions required for Alberta's long fall into the industrialized economic abyss are readily available.

The domestic terror threat

Coincidently timed to match with Canada's growing unrest CSIS is refocusing on "domestic terrorism". The corporate takeover of our own country (like that of the U.S. and European nations) is now in full swing and guess what? They know you're not going to like the results. The focus on terrorism over the last 12 years has always, ultimately, been about the "domestic" threat which as time goes on will encompass more and more activities the government (read: corporations) doesn't like. One day in the near future there will be no law and order as it will have been replaced with corporate policy and terrorism. Every day that goes by now brings us one day closer to that point.

The picture of the future is becoming clear, and those getting the shit end of the stick are quickly figuring it out.

Update-1: This is what prosperity looks like

It appears Fort McMurray (you know, the city at the center of Alberta's "prosperity") is entertaining a 4 day school week to help offset their $4.4 Million dollar budget deficit. Keep in mind this isn't Alberta's deficit, but the city's deficit. There's really more deficit in Alberta than you can shake a stick at and still our infrastructure is in shambles compared to where it should be to support the level of development we want to have here.

Would you say that, when the city that primarily gets it's benefits from oilsands developments/workers/etc is wondering whether or not they can even afford a 5-day school week, is a sign of prosperity? How much longer will Albertans continue lying to themselves about all "their riches" while their children get drowned out in debt? Hmm? How much longer and do any of you have the balls to stop it? Are any of you willing to sacrifice the temporary and insignificant immediate benefits to protect the future generation? Oil sands prosperity is a lie, and the sooner we figure this out the better off we'll be.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.