It's not just this event, but accumulating events. The fire in Slave Lake, and even the flood in Fort McMurray just weeks ago which also was extremely damaging. There's new reports of oil spills every other week, and this time the flood has also prevented timely cleanup of such a leak. Every event unto itself deserves attention, and is something we really hope never happens (again). They all deserve articles on the front page of the paper and dedication to constant reporting of the status of these events. But there are few updates on Fort McMurray, oil spills? Meh who cares. This week's topic is Calgary. This is not to say we belittle these other events, it is more rooted in the fact that we as humans can only think about so much at the same time. Considering everything at all times is difficult, overwhelming, and confusing.
We look at Calgary, being Alberta is a province already significantly in debt mostly due to spending on frivolous adventures and declare 'we will rebuild!'. Well, let's remember that Fort McMurray also is devastated. Slave Lake is still recovering. etc, etc. Still though, it can be done right? Well at the same time as all of this we also have to consider the liability and cost to maintain all infrastructure is going up. We have to consider on top of that that the reasons we haven't prepared nor invested in the future at the best of our economic times were mostly cost. Not that we couldn't afford it mind you, but rather we just didn't want to spend it on that. We had bumper stickers about pissing away oil booms.
Now, I'm not saying we could have prevented the flood, I want to be clear here, what I am saying is that on top of the flood damage we have a lot of other damage and this is on top of our infrastructure costs which are already going up as our infrastructure falls behind generally while demand on it increases exponentially. Our situation was already quite bad, now it's a lot worse.
On my Twitter I said that Alberta will likely never fully recover from this event. In response I got a reply that 'sure we can' and after further discussion some other examples of significant events to backup the claim. Primarily Post World War II Germany, Post World War II London, and modern day Japan after Fukushima.
First of all before I address this point I want to look at the definition of "recovery" because it's important to understand the context which I'm talking about in my tweet. The world has been trying to "recover" from the economic collapse of 2008 ever since. It still hasn't happened despite the temporary illusion provided by "stimulus". In this context "recovery" refers to some sort of pre-2008 growth, pretty much everything has become secondary to "restoring growth". When I say Alberta will never recover from this it is because I know what Alberta's idea of recovery is going to be, an attempt to return everything to what was despite what was already being too expensive before any of these events happened. This here is a turning point and what Alberta decides to do now is going to determine whether or not we "recover". Albertans need to start taking our economic situation seriously because now is when a new direction is really needed and resources are only going to get tighter.
Second, the second part of my tweet is very important, the end of easy money. This is because central banks are no longer able to keep interest rates low as we discussed recently. You are going to be told that the age of easy credit is coming to an end because things are better but the real reason is there is just nowhere else to go. Times up, it didn't work. Rates are going up despite the central banks, not because of them. Gotta love this:
We’re in a strange position today where interest rates are working against both borrowers and savers.Greece and Britain are selling off public infrastructure in their effort to "balance the budget" and pay off their creditors. In short, what we are facing today and the world we live in today are very different from the post World War II era. London (Britain) which recovered from being completely bombed out has not been able to evade the ultimate demise of the debt money trap combined with expansive aging modern day infrastructure, this is where our liability really lies.
Mortgage rates are rising, but there’s no corresponding benefit to savers and conservative investors. The explanation for this frustrating turn of events begins with the rise in the interest rate on government bonds in the past eight weeks or so. A five-year bond issued by the federal government now yields about 1.84 per cent, compared with 1.15 per cent on May 1. As measured in T-shirt sizes, that move is a definite XXL.
For example, Japan. Japan has not "fully recovered" from Fukushima though they could be considered "recovering". But their oil imports shot up through the roof and now they are finding it increasingly difficult to balance their massive debt load. Fukushima is going to continue to take incredible amounts of resources to clean up and contain for many years.
Japan, another nation which recovered from perhaps the worst of post World War II era destruction, is falling to debt and infrastructure. I have been trying to emphasize this point that the real costs of maintaining our society haven't hit us yet. We are acting absolutely stupid with our assets and wealth, the LRT in Edmonton is delayed due to a $500 million funding gap after we gave the money to Katz for a privatized arena. We were hoping for money from the province, hmm.
Our society is expensive to maintain and it becomes more and more expensive every day in our peak oil, climate changing world. Throughout the last 30 years of "growth" populations everywhere deferred much of the reinvestment into their infrastructure and future. Alberta needs to sit down and consider what a "recovery" really looks like and what priorities such a recovery sets because the affordability of what was is very questionable. I've been talking about this for awhile, the flood is just making our situation that much worse.
This all comes back to the argument of human ingenuity. That despite all of these problems we will prevail because we are humans. That we will cleverly invent a way out of it. Except when we don't right? Many civilizations have fallen in history, and they will continue to fall. They all fall. Humans prevail, civilizations don't. Societies build up, peak, lose cohesion, and fall apart.
There is a reason why Alberta was rated with an 84% chance of default on it's debt by 2040. Highest amongst all provinces. If current trends persist our future looks very much like the current present in Greece. Canada as a whole isn't doing too hot. I'm not saying this to be a downer, I'm saying this because now is seriously the time that we need to drop all of the bullshit pretence about how rich we are as a province. Our bills and debts have already started to come due and our low energy ratio energy industry is not the cash cow we've been lead to believe. Our infrastructure requirements already outweigh our ability to service them.
Alberta is inviting all sort of disaster, will we heed this warning and change our ways, paying the upfront cost? Or will we chase the carrot down the debt rabbit hole leaving ourselves a scarred landscape we can't afford to fix? Will our recovery focus on long-term prosperity, or short term gain? As it stands currently, it doesn't look good.
Update-1
Raw sewage may flow into Calgary's Bow River for days
Calgary bridge with derailed train 'continues to drop'
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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 CenturyLink
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.
