Friday, January 31, 2014

CSEC airport snooping 'trial run' for NSA, Five Eyes

Well, as if we needed any more evidence that the NSA, CSEC and the Five Fascist Eyes alliance really are trying to "eliminate privacy worldwide", CBC put this out today.

CSEC used airport Wi-Fi to track Canadian travellers: Edward Snowden documents: Electronic snooping was part of a trial run for U.S. NSA and other foreign services

CSEC's response? Deny Deny Deny

One more nail in the coffin of public trust.

Edward Snowden Tells German TV That US Gov Officials “Want To Kill Me”, Full English Version.

"When they say that they can't spy on their own citizens they don't mean they can't gather information on them, they mean they can't target them" -- Edward Snowden on the Five Eyes

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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.

Thursday, January 30, 2014

The magic of minimum wage and inflation hocus pocus

Amazing. After 6 years of non-recovery recovery the answer on how to "save the economy" has been stumbled upon by a senior business journalist: raise the minimum wage. How did nobody think of that?!

Of course, I'm being sarcastic. Raising the minimum wage isn't going to save the economy at all - but wait, hear me out before you close this post -  however the article does provide an excellent example on everything that's wrong with modern economics, economists and financial journalists but even more so with the paradigm we all find ourselves in.

Michael C. Ruppert says that "a paradigm is what you think about something before you think about it" and I must ask that you all think about the paradigm you find yourselves in and maybe, just maybe, save yourselves from the "economy" as a result. We simply can not fix a broken system using the logic of that broken system especially when the system's ultimate goal is a mathematical impossibility.

This article I linked on saving the economy with the minimum wage is an awful patchwork of logic and views that at the end seem to rule each other out. The author both advocates for "the poor" and shits all over them at the same time. It's really amazing. I had to read it 3 times (including two pieces on "inflation" he links to within) before I could begin to untangle his web of circular logic of which I am going to share the results with you now.

However, before we begin, I'm just going to state explicitly my position on minimum wage now before you think that is what I'm objecting to, it's not. It is his claims that it will "save the economy" as he then goes on to describe how broken and fucked it really is (but with a very bad understanding of what it is exactly he is describing to you).

First, as always, you must watch Mike Maloney's videos on the history of money and how modern currency works or you're going to be really lost in what I'm talking about here. In all honesty so should the author of the article in question. It is the information in those videos which adds context to everything the author is talking about (as we'll get to). As you'll see he treats inflation and deflation as forces of nature with no explanation behind them. Actually, it's more like religious forces of nature; at one point he even calls deflation "evil". No joke.

Six paragraphs and we haven't even gotten into his content yet but I tell you I'm fired up and we have a lot of content to cover. I'm going to cover his main article, and also his two articles on inflation as he relies heavily on his belief system of inflation to justify his current article and it is this inflation belief system he's developed which seems to be the root cause of the bad analysis. In short, if you want to know why mainstream economists just can't seem to forecast anything accurately this article provides one of the best examples of the psychology behind it that I've ever seen.

Final thing. Just for the record I am not an economist. Modern economics is a lot closer to a religion then it is a science. I am a programmer that historically has analyzed patterns and so consider my analysis of economics a port of said religion to a strictly logical system of thought (you'll notice my more analytical posts often follow an if-then-else like format) through the process of which we weed out logical fallacies.

Let's go. We'll be addressing his 3 posts in the order he wrote them. This first one was written just after the dust had settled from the financial collapse of 2008 in November.

A plague of falling prices: deflation and how to stop it [2008]
Deflation psychology has arrived in Canada. I saw it in my own home and only realized it later.

I might not have realized it at all but for a U.S. Labor Department announcement that only a few months ago would have sounded like good news. No inflation. For a change, the price of a hypothetical basket of normal household goods, called the consumer price index (CPI), was not getting more and more expensive.
In normal times, prices rise nearly every month. And generally that's nothing to worry about, so long as prices don't rise too much. High inflation is admittedly painful for people on fixed incomes. And hyperinflation like Zimbabwe's destroys an economy. But for most people, low inflation — of two to five per cent, say —  doesn't hurt at all. That's because wages and prices tend to go up together. When prices go up about three per cent, your paycheque goes up about three per cent. Even investors are OK if they have the right investments. Stocks, property and Canada Pension Plan benefits also tend to rise with inflation.
Alright, these paragraphs are extremely important because they basically debunk everything he says following and in all of the other articles too. First of all notice that he doesn't explain why prices "rise every month" they just do apparently. It may seem a trivial detail but without keeping it in mind it's easy to lose touch with reality. Mike Maloney explains why in his video but I will summarize it here for completion's sake: prices rise every month because the currency system expands. There are supply and demand constraints too, but the price fluctuations he's referring to are inflationary pressures and those come from currency expansion.

However, it isn't so much that the value of the products themselves is rising from inflationary pressure it is that the value of the currency is decreasing. This is a very important distinction as many equate an increased price with an increase in value which is not usually the case at all. It is not just recently that our currency has been losing value, it has been losing value constantly since we went off a gold standard but since we compare it's price against the price of the USD which is itself constantly losing value we don't notice and in some cases even believe our currency got "stronger". In reality, even when it's price is "stronger" it's overall value is weaker.

Jesus, this single paragraph contains so many errors I could write a whole post just on that simplistic statement. Anyway, we now hit one of the major deficiencies of the Ponzi-conomy: fixed incomes. The author says they are "admittedly painful for people on fixed incomes". Well, here's my question for the author: If our system is designed to be healthy when prices are rising "every month" then why would we have designed "fixed incomes" in the first place? Should these not be "indexed incomes"? Why would a type of income be created that is destined to leave a person poorer and poorer over time purely through the "normal" operation of the system that governs it as a supposed support system?

I won't get into hyperinflation outside of saying it is an extension not of inflation but actually deflation. Hyper-inflationary episodes always derive from periods of deflation where the credit system collapses and new base currency needs to be added to cover debts.

Oh boy, now we've gotten to my favorite sentences in this entire paragraph: "But for most people, low inflation — of two to five per cent, say — doesn't hurt at all. That's because wages and prices tend to go up together. When prices go up about three per cent, your paycheque goes up about three per cent".

Now, that seems somewhat ironic to be saying when based on this same logic you write an article saying that "raising the minimum wage could save the economy", don't you think? I thought wages rise with inflation? If that was the case then shouldn't all of those minimum wage makers no longer be making minimum wage since it's been frozen for 4 years in Ontario and while we've had "low inflation" we haven't had "no inflation"? But his statement also implicitly says two other things: 1) That a raise is not really a raise, thus there is no social mobility purely due to time served but you instead must get a promotion that comes with a raise above the rate of inflation. 2) If you fail to get a raise that year you're making less money through no fault of your own. I don't think I really need to say anymore on his logic there especially at a time where "pay freezes", "cost cutting", "austerity", "temporary foreign workers", etc are standard topics of the day.

Now we get to his point on stocks, property, and the CPP. He's right, these things do go up with inflation. Yet his recent article is on how minimum wage increases can save the economy by pushing up inflation (we'll get to it). But wait! Stocks continue to hit almost new daily highs. Housing in Canada is extremely overvalued. Pensions are just a sub-Ponzi of the grand econo-Ponzi so we won't touch those. So I have to ask the author, if inflation is so low that minimum wage can push it up then why are stocks and housing so high?

His logic is not wrong on this one, housing and stocks are high because price inflation is actually very high as well. More on this later.
But when the U.S. government released its figures for October, everything changed. Not only did prices fail to rise in the month of October — prices actually fell one per cent.

Falling prices sound good. If you're in the market to buy something, and if you have money in your bank account, deflation is good for you. Gas is cheaper at the pumps. Finally you have the prospect that your money will go further.
Notice what he says there: "if you have money in your bank account" (also notice he says money, not currency, which should be a store of value). Shouldn't that be the majority of people in a healthy wealthy economy? Shouldn't the majority of people benefit from deflation? "If you're in the market to buy something" again describes something most people fall under. Pretty well everyone needs to buy something all the time that's why we like to call ourselves "consumers".
But the news struck terror into the hearts of economists and sent markets into another sharp decline.

The reason economists worry about deflation is, like many issues in economics, rooted in human psychology.

When prices are rising, the best time to buy something you need is now. If you buy it next year, it will be more expensive.

But if you are convinced that prices are falling, the psychology changes. In that case, delaying a purchase only makes it cheaper.

As Bank of Montreal economist Michael Gregory pointed out in an interview on Wednesday with the CBC's Fred Langan, deflationary psychology had already hit the U.S. market in a big way. Prices for houses, the biggest thing most people are likely to buy in a lifetime, are falling. If prices are falling, Gregory says, "I'm not going to buy it now."
Maybe "psychology" is what "economists" have been trained to think the fear is but it's not really the "why" of why deflation is such a bad thing. He basically chops up the why as "people will wait to buy items". But why is that bad?

Again, referring back to Mike Maloney's videos which demonstrate this so well (I knew how this system works before I saw those videos I just think there is no better presentation of what is ultimately very complex information) deflation has a very real physical effect, it is not purely "psychological". Being that all currency is debt and that there is always more debt in the system then there is currency to pay it if interest is included deflation represents the evaporation of the currency supply as whether prices are rising, or falling, the debts must be paid and every dollar of currency has interest attached to it.

That is why bankers and the owners of the system fear deflation. That is why it's a bad thing if you're waiting to buy a house because you are not going out to take a loan and add new currency to the system to pay off someone else's old debt and thus overall the volume of new loans goes down. Being that we use fractional reserve banking once the defaults get rolling it cascades throughout the system as all of your borrowed money is someone else's debt. When a corporation pays you for your work that too is borrowed currency, either by them or paid to them by someone else who borrowed it, and so on. Exactly the events that lead to the 2008 collapse and deflation in which the author is responding to.
And here comes the confession.

In Toronto, where I now live, there has been a shortage of people to do house renovations. Condos shooting up all over the city have had a lock on many of the best carpenters, plumbers and plasterers. Those few who were left were hard to get. Other homeowners, many of them using loans borrowed against their rising property values, had bid up the price of contractors.

In my household we've been saving up, with a plan to insulate and maybe put a second bathroom in our drafty concrete basement. But even before hearing the inflation news from the United States, we decided to put off calling a contractor.

This was our logic: as construction projects slowed, we reasoned, some of the heat would come out of the renovation market. Contractors might be more inclined to return our calls. They would be less inclined to laugh when we told them how small the job was. And maybe, in a buyer's market, prices would be lower.

As I listened to BMO's Gregory talk about how deflationary psychology had arrived in the United States, I realized it had arrived in Canada, too. It had arrived in my home.

One of the reasons deflation is considered so poisonous is that it's a case where one of the cornerstones of the market economy turns on its head. Capitalist theory tells us that individuals acting for their own benefit are supposed to make things collectively better. But in deflation, individuals and businesses working for their individual benefit make things worse.
Again, he states it without quantifying it. Why is saving and storing currency worse? Because credit collapses, which he alludes to in a second.
The other damaging thing about deflationary psychology is that it acts on people who are otherwise relatively untouched by a recession and who could thereby help to curb it. In a downturn, unemployed people and failing businesses will obviously have less money to contribute to the economy. But deflationary psychology affects people and businesses who do have money to spend; it makes them not want to spend it.

And even for those of us who understand the harmful effects of our collective actions, it is very difficult to go against our individual interests. That especially applies if you need to borrow money to make a purchase or investment.
Deflation hurts

Here's an example: the latest data show that Canadian house prices are falling. There is no expectation that Canadian housing values are going to crash like they did in the U.S. following the subprime disaster, but nonetheless, do you want to be the person who takes out a mortgage on a home that will be worth less in six months?

Mortgages in a falling market are an example of the danger of leverage during deflation. Leverage is the advantage you get by borrowing to buy an investment that's gaining in value. Initially during a home mortgage, you may only own 10 per cent of your house, but if the price rises by $50,000, you pocket all the benefit. But in a falling market, everything reverses. When the price falls $50,000, the whole loss comes out of your 10 per cent. And that may be all of it.
I wasn't aware houses shat out production, were you? When housing prices magically start rising that is clear indication of a bubble, usually caused by low interest rates. Your house isn't worth any more than the materials it's built out of plus the value of the land. He is basically saying that deflation is bad because bubbles pop and that will be bad for you if you buy at the top of a bubble. However, it is inflationary monetary policy which creates these bubbles. If you're going to pump the price of a house far above it's value then yea it's going to come back down. There is something fundamentally wrong with our system if $50,000 in value can simply evaporate without any meaningful changes in land value, etc. Of course the evaporating value wasn't there in the first place.
Perhaps the most damaging thing to an economy is that businesses start to think the same way. Why borrow to grow a business that will be worth less in the future? Unlike during inflationary times, the business will have to pay the interest on the loan and swallow the entire loss.
Uhh, that has nothing to do with psychology bud. That's just a function of simple economics. If I don't have the money, I don't have the money, whether I think or want to have it. But I do have the debt, regardless. This goes back to what I was talking about above which he failed to explain in his why. Credit deflation, currency is used to pay debt and no new currency is created to replace the obliterated currency.
Deflation may not have arrived yet, even in the U.S. And it may not be coming at all. Deflationary psychology isn't the same as full-fledged deflation. True and poisonous deflation is a general decline in prices over months or years, where every spending decision is best delayed.

Prices are always changing in a dynamic marketplace. It was not deflationary to put off buying a Beanie Baby on eBay during the height of the craze.

But if deflation does come, and prices do start creeping ever downward, I'd like to offer the government a solution. Unlike the U.S. government, which handed out stimulus cheques that have now been spent or used to pay down debt, Canada should not just hand out money. Instead, it should use a tactic from retail to get the people who have money spending it: the time-limited discount offer. Twenty per cent off, but spend it now, before it's too late.
So you got that folks? It is not deflationary to put off buying a beanie baby during the beanie baby bubble or "height of the craze" but apparently this logic does not extend to housing bubbles. Also: Canada should not just hand out money. Which clearly raising the minimum wage isn't, err, right?

Wow, fun right? Two more to go and then I will summarize my position.

Inflation's benefits, despite Sarah Palin [2010]
The centre ring event at this week's G20 circus in South Korea will be tag-team beating of U.S. central bank chairman Ben Bernanke. It has already started.

"With all due respect, U.S. policy is clueless," Germany's finance minister is widely quoted as saying, though some dispute the translation.

China's Xinhua News Agency, a voice for the Chinese government, spoke for many countries when it said Mr. Bernanke is "not able to carry out responsible currency policies."

Russia, that bastion of economic stability, has ordered that Moscow must be consulted before the U.S. central bank does it again.

And these are only the things people said in public.

What they are all talking about, of course, is last week's announcement that Mr. Bernanke's central bank, the U.S. Federal Reserve, will create and inject $600 billion into the U.S. currency pool, hoping it will push the economy up and the dollar down.
Of course this has had a direct effect on Canada and emerging markets where the U.S. exports it's inflation to and the results of which are just beginning to play out now.
As the world's top economists and financial thinkers weigh in, one of America's big thinkers has stepped into the ring too. Sarah Palin.

While Ben Bernanke is on the floor being kicked, Sarah Palin has piled on.

"We shouldn't be playing around with inflation," she said. I didn't actually hear her say it, I
read it in the Wall Street Journal. But in my mind's ear there is no G on "playing."
Inflation is good

I agree that Ben Bernanke may not know what he's got himself into. I agree that dumping half a trillion dollars into the world economy may cause more problems than it solves. I even agree with the new Brazilian president-elect who said previous competitive devaluations have led to war.

But when Sarah Palin starts dissing inflation, someone's got to stand up and speak for the other side. Because inflation is good.
For the record, I don't care what Sarah Palin says.  My views on this are not in line with hers.
Inflation is not absolutely good, of course, and certainly it has a bad reputation. I mean, you don't have to go back to prewar Germany, as Sarah Palin did, to see the damage it can do.

In the early 1980s, North American inflation was running above 13 per cent. If you were an elderly person living on a fixed income, that really hurt. A case of cat food that cost $100 in 1970 would cost you more than $300 in 1985, according to the Bank of Canada's
inflation calculator. But certainly, when compared with deflation, its evil twin, inflation is a wonderful thing. And it is especially good at a time like this.
Again, a reference to the pain those on fixed incomes feel.
What inflation does is lubricate an economy. And to explain that, I have to introduce a highly sophisticated piece of economic vocabulary. "Sticky."

Sticky, strangely, refers to prices that don't want to move. They stick.

Two very well-known examples are house prices and wages, both of which tend to be "sticky downward." Which, translated from sophisticated economic vocabulary to normal Canadian English, means "they don't like to go down, eh." (For a correct translation, non-Canadians should remove the "eh.")
Wages get stuck

No one ever wants to accept a cut in wages. But in a complex economy, wages must constantly adjust in comparison with other wages and in comparison with other prices. Without inflation, wages stick. With inflation, no one takes a cut. Some just get a little more than others.
Well when you consider that "with inflation" a "raise" isn't really "a raise" at all, is that not the same as "sticking"? Your wage isn't going up anyway, so if prices weren't going up either then who cares?
Same thing with house prices. Say you live in a Vancouver shack that you just bought for $600,000. When everyone begins to realize that the shack market is overpriced, you might think the price of your shack would fall gradually to $500,000. But without inflation, that's not what happens.
The reason is that, rather than sell out at the current market price, homeowners say, "I own a lovely $600,000 home. I'd rather not sell it at all than sell it for less than its value. And it is not a shack."

So without inflation, generally the first sign that house prices are falling is a decline in sales, because only people who really have to unload are willing to accept sharp declines in the perceived value of their houses.
But once again, inflation would come to the rescue. With an inflation rate of five per cent, it takes only four years for something that used to be worth $500,000 to become something priced at $607,000. Do the calculation yourself. That way the homeowner gets his price, and the market adjusts to the new reality.

If you are a homeowner or a wage earner, it may seem that inflation is just a way of tricking you to take a financial hit. And that may be true. But it also allows markets to adjust, rather than grinding to a halt.
Notice how he now uses the term perceived value? So what does he advocate? Inflation, of course! So that the homeowner perceives that they got their fair value when in reality all that happened was their purchasing power diminished. They're still selling the house for $500,000 but so they can feel good about their perceived profit the author advocates devaluing everyone's dollars. Great for "homeowners" not so good for "homebuyers" as we're seeing now with first-time homebuyer affordability at all time lows even as record low interest rates dilute their purchasing power further. Inflation sure does "lubricate" all right, right before the banks shove their dick in your ass.
Inflation's lubricating effect does not just hurt the little guy. Another big advantage of inflation is less loved by banks and rich folks. That's because people laden with debt — Canadians and Americans for example, not to mention the U.S. government — get to pay off their loans with inflated money. In effect, their loans shrink. It is especially nice if the interest rate they are paying is locked in for a long time, like many American home loans (but not lines of credit).
Ahh, right, you got that folks? The banks which literally create their loans out of thin air apparently don't like inflating that debt away for the people. Even though all of the currency which dilutes the value is created by them, and all of that currency has debt and interest attached as well. That's believable eh?
The final advantage of inflation is that it gets capital moving. Right now we know that companies are sitting on mounds of cash. When inflation is happening, the best thing a company can do is get rid of that cash and spend it on something. In other words, rather than holding the cash because you know it will become worth more (as happens in evil deflation), your best course of action is to invest it before it inflates away, because every minute you hold cash it is worth less when inflation exerts itself.
Yes, you work hard so that you can have your currency that you earn "inflate away" if you don't spend it. That's a "good thing".  Not for you of course, but rather the economic Gods fighting off that evil menace "deflation". It helps them out incredibly.
That's not to say inflation is a cure-all. As the Germans found out, and as Canadians discovered during the 1980s, inflation can get worse and worse if you let it. At some point, it has to be stopped with higher interest rates.

But for people who are retired or saving for retirement, higher interest rates aren't all that bad. In fact, in many ways, they're good.

But I don't have to defend higher interest rates from Sarah Palin. At least not yet.
Fuck, do I even need to comment on his closing statement?

Alright, now on to our feature presentation, the very reason I'm writing this post. His post on minimum wage.

Raising minimum wage could rescue the economy: Don Pittis [2014]
U.S. President Barack Obama, Ontario Premier Kathleen Wynne and Bank of Canada Governor Stephen Poloz are all on the same page. They just don't know it yet.

This week, Obama and Wynne talked about raising the minimum wage, with Ontario announcing on Thursday that the rate
would rise to $11 an hour starting June 1. Last week, Poloz warned about disinflation.
I've covered the "disinflation" here.
It's a marriage made in economics heaven. Let me explain.
Left-of-centre politicians want to raise the wages of the very poorest. From a humanitarian point of view, it seems an easy choice. Just listen to some of the recent interviews on CBC’s The Current with people trying to raise kids while making minimum wage. Half of minimum wage earners in Ontario work for large corporations. The idea of corporate executives, members of the One Per Cent, getting richer and richer while their workers can't feed their kids properly is not an appealing thought to many Canadians.
The difficulty for politicians who, for moral or electoral reasons, would like to raise the minimum wage is that they face stiff headwinds.
Again, if wages and inflation rise together why would there be any headwinds at all? In fact, why would there even be an argument over it, should it not just inherently occur?
A loud voice of opposition

We should note here that a huge majority of businesses pay most of their employees more than the minimum, and there are good reasons for doing it. According to a
recent Statistics Canada report, "in 2009, some 817,000 people were working at or below the provincial minimum wage. This represents 5.8% of all employees in Canada, a slight increase compared with the 5.2% recorded the previous year."
And I would just like to add that minimum wage even in Ontario where minimum wage has just been risen, is below the poverty line. Just because a business pays more than minimum wage doesn't mean they are paying enough and keeping up with rates of inflation. More importantly as we've been covering on here recently inflation is not evenly distributed. The poorer you are in our lopsided easy currency Ponzi-conomy the more inflation you have. Energy, housing, food, but sure if you can balance that out with buying a new TV or boat you're going to see some savings in other sectors. But for those below the poverty line inflation is already running high.
But those businesses that don't want to pay higher wages to their minimum wage employees represent a loud voice of opposition.

They are supported by a very traditional market argument that says raising minimum wage results in fewer jobs and is thus bad for the wider economy. Of course, the extension of this argument is that no minimum wage at all would be even better for the economy. If you think that, it is time for you to emigrate. There are many countries with no minimum wage.

The trouble (if you think it is trouble) is that in rich countries such as Canada, we have a minimum standard that we declare socially acceptable. And this throws a monkey wrench into the economic argument. It reminds me of something I noticed while living in England back in the 1990s.

Railway workers had just negotiated a salary rise, and it happened to be just as my wife and I were looking for a cheap apartment to rent. The new railway salary was exactly the same as the lowest possible market rent. So how, I asked, could railway workers live on that salary? I quickly learned that it was quite normal for low wage workers in Britain to live in government subsidized housing.
This again destroys his primary argument for why inflation is good and doesn't hurt as supposedly wages rise with inflation. In an economy where inflation is "healthy" a minimum wage that is indexed to rises in the cost of living is completely necessary. To say one isn't necessary or having one results in fewer jobs is indirect admittance that the very core economic design is broken. Rising wages are rising wages, regardless if mandated or not and if wages are not rising then people are working more and more for less and less on an ongoing basis (gee, sort of what it feels like right?).

However, a rising minimum wage as a requirement is really just a patch for a system that at it's core is broken, and impossible. It's an attempt to address the problem, without fixing the problem. It's understandable that businesses want to resist paying employees more which is another indicator that it is the system that is broken and is not operating "normally". If your currency is devaluing, so is your employers'. Everyone, people and companies, are producing more and making less as inflation eats away unseen at the wealth being generated.
Subsidizing employers?

It struck me then, as it strikes me now, that in a society that sets a minimum standard for what people need to live in terms of health care, housing, social support and other things provided by taxpayer funded services, allowing employers to pay less than that standard is in effect a taxpayer subsidy to the employers. In this scenario, those hiring low wage workers are not paying the full cost of doing business, and neither are their customers.

By this way of thinking, the kind of jobs that Canada needs, to build the kind of economy Canadians want, are not minimum wage jobs. The jobs we need are those that pay a wage sufficient to live an acceptable Canadian lifestyle. And that is what most Canadian employers do.

But these kinds of arguments do not mollify those who oppose a rise in the minimum wage. Perhaps they need a colder, more economic argument.

And here is where Stephen Poloz comes riding to the rescue with his latest warning about disinflation. Poloz's job as Bank of Canada governor is to keep Canadian inflation at two per cent.

The importance of keeping inflation high enough is a traditional economic argument at least as old and as strong as that against raising minimum wage. I have explained
the argument here and here, so I won’t repeat it.
And as I've demonstrated above his "old and strong" argument is really a bunch of hocus pocus resting on a weak foundation. The author hasn't the faintest clue why it's important for the system to keep inflation high, he just thinks he does.
The important point is that disinflation can lead to deflation, which causes economies to seize up and begin to shrink.
Not economies! The banking and credit system as what is happening in emerging markets right now as their massive 'empty cities worth' of Fed funded economic bubbles begin to pop. People will still trade regardless with gold, silver, and now possibly bitcoin. People who see what's truly happening have plenty of opportunity to protect themselves from the seizing up of a banking system and why does it seize up? Because it is fundamentally a Ponzi-scheme that needs new loans at the bottom to feed interest to the top.
A great opportunity

The conventional way to drive off disinflation and boost inflation is to cut interest rates. But the central bank and the government are both wary of that, for fear it spurs a new round of borrowing in a population that has already borrowed too much and pushes up house prices to unsustainable levels.
They are not "wary" of it, it's exactly what they are doing, it just hasn't worked. And for fucks sake, housing prices are unsustainable.
And here is the great opportunity. By gradually raising minimum wage, some small fraction of the six per cent of minimum wage jobs may or may not disappear. But the payoff will be huge, as the whole economy will be saved from disinflation. Poor people spend their money; they don't use it to bid up assets. But they can bid up prices, starting the slow cycle that leads to increased inflation.
Again, the author appears to be unaware at how disproportionate inflation is right now and that the poor people (which includes all of those at or below the poverty line not just those on minimum wage) are already spending all of their money. A $0.75 raise isn't going to all of a sudden give them all that discretionary spending needed to purchase items. However, raising the minimum wage will definitely help pick up inflation, but for a different reason. Where does currency come from? It's loaned into existence! So if we're going to start paying people more, we're going to have to start borrowing more and thus diluting the value of the currency even more. At the end of the day like the person who perceives their house is now worth $605,000 are you really making more at all? No, you're not.
Not only that, but employers that are forced to pay higher wages will also raise their prices slightly to cover the added costs. If customers won't pay a few cents more for their burgers and dollar-store items, then that is an economic signal Canada, as a country with minimum social standards, cannot afford those products and services.
He's right, it is an indicator we're living beyond our means. We are borrowing from the future to pay for the present and the needed growth to service that debt is not materializing. Any additional currency will simply dilute your purchasing power.
Up till now, governments and central banks have cut interest rates and printed money. They admitted that pumping money into the economy had the effect of bidding up the stocks and property owned by the rich, making the rich richer. When some objected, they said sacrifices had to be made; it was the only way to save the economy.
Remember what he said about inflation 'being good'? Stocks and property?
Now, we must save the economy from disinflation and evil deflation. While some may object to the poor becoming richer, sacrifices must be made. So far, the rich have taken all the flak for benefiting from the government's economic rescue strategy. Now it is the turn of the poor to get a little richer to benefit us all.
The poor won't be becoming richer at all, the rich will be becoming richer because they are at the source of inflation. It is those at the source of inflation and currency creation that benefit from the old value of the currency before the new currency is circulated.

Alright I will now reiterate my position on this, after all that I don't have much more to say.
If we're going to continue pretending there is actually a solution to this in our Ponzi-conomy then perhaps the best thing to do would be to index minimum wage to the average of the incomes of the creators and benefactors of inflation, the banker CEOs. I'm betting that would end their "low inflation" woes in a jiffy.
Of course I'm being sarcastic, my solution like any raise to minimum wage is an attempt to patch a fundamentally broken system from within the logic of a broken system. It's fucking broken, folks. It benefits the few at the expense of the many. It operates on a set of fantasy rules that are simply changed when reality becomes inconvenient and ultimately complicates a very simple and unsustainable concept: infinite exponential growth.

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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.

Wednesday, January 29, 2014

UPDATE-1: Rate reversal hell: Canada may be left in the cold

Shit. I was asleep, got up for a smoke, and what do I see? "Turkey raises rates aggressively". Well that's interesting, I say to myself and because I simply can't wait for tomorrow when something like this peaks my interest I continue to probe. Turns out India, and Brazil, have done the same thing (though not as sharply). India's is very interesting.
India's central bank has unexpectedly raised interest rates in an attempt to rein in stubbornly high consumer prices in a crucial election year.

The Reserve Bank of India (RBI) raised the benchmark repo rate - the amount at which it charges to lend to commercial banks - to 8% from 7.75%.

Economists had expected no change after its meeting in Mumbai on Tuesday.

The RBI said that another near-term hike was unlikely if inflation eased to a more comfortable level.

India's main gauge of inflation, the wholesale price index (WPI), rose 6.16% in December, from a year earlier. While that was a slight fall on from the previous month, the rate continues to remain an issue with the central bank.
There may be no turning back now. You'll remember at the end of November and beginning of December (okay in all honesty unless you're really closely paying attention you probably won't remember) that the Chinese were going to be allowing their currency to rise and would be diversifying away from U.S. dollars. As I talked about yesterday they are still stockpiling gold like crazy.

In regards to the rising rates of emerging markets I've found an excellent analysis on it which I must recommend you all read, though I do want to clear up one point. In this analysis the author describes it as the monetary power of both the U.S. and China, and I believe that's incorrect. The U.S. taper is a response to China raising their rates. The U.S. has been strong armed into it and now the rest of the world is along for the ride.

Emerging markets forced to tighten by US and Chinese monetary superpowers
“We have all these countries in trouble like Argentina, Ukraine and Thailand that are each local cases, but behind the whole emerging market story is Fed tapering and worries about slowing Chinese growth,” said Lars Christensen from Danske Bank. “China is now a global monetary superpower, co-leader with the US. When China tightens, that hits trade and commodities across the world.”

Most analysts expect the Fed to continue tapering on Wednesday with a cut in bond purchases by another $10bn to $65bn a month, but there could be a surprise. Mr Jen said it is 50:50 whether the bank will retreat again after the global ructions that followed the previous decision to cut QE. “This meeting is a big test of the Fed’s courage. Anything can happen,” he said.

Turkey is in the latest country in the eye of the storm, no longer able to draw in enough foreign capital to cover a current account deficit of 7.5pc of GDP. Reserves have fallen to wafer-thin level of six weeks’ import cover. The ruling Islamic movement of Recep Tayyip Erdogan is deeply split, while the country faces mounting Sunni-Shia tensions due to a spillover from Syria.
I don't think the Fed has a choice, I now firmly believe they don't want to be tapering at all. If this is the case my original analysis this condition will be temporary is incorrect. Canada may now be terminally trapped with it's inflationary monetary policy needed to service more debt ever more cheaply without causing a serious economic collapse.

Our markets were never allowed to correct the same way other's in the "G7" did. This is why we perceive our condition as healthy when in fact we're just late to the party. If the rest of the world rapidly switches direction on interest rates I don't think Canada will be in a position to afford doing the same without seriously risking popping the numerous bubbles propping up our Ponzi-conomy.

If this is the case, we're in serious trouble. There is no bottom on how far our currency can now fall against the U.S. dollar and Chinese Yuan. If we don't raise rates rapid inflation is sure to follow.

Nigeria Central Bank to Shift Reserves Into Yuan From Dollars

The game is afoot, it's go time.


Great video on the situation. Notice the chart at 2:32 includes Canada.

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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.

Tuesday, January 28, 2014

Eroding the public trust one act at a time

The government is allowed to operate because of an unspoken social license. A default "benefit of the doubt" should exist in which crimes and conspiracies must be proved before they can become valid thinking or mainstream. However, destroy that public trust and the default assumption is that crime and conspiracy is the name of the game and all government efforts otherwise are purely attempts to cover up what's really going on.

My public trust in the government and it's corporate and arms-length agencies is long gone. By default now I assume they're lying in some capacity or omitting facts, or simply taking advantage of people's short attention spans and redirecting their attention to something superficial so you don't notice something they don't want you to see.

We allow the government to engage in secret activities, have secret funds, because of the social license built on trust. If the government persists with the secrecy and rampant abuses even after that trust has been lost they now are in the territory of tyranny. Ultimately the government is supposed to work for the people and if the people can not trust the government to say, collect metadata on everyone everywhere despite the people saying 'no', yet it persists in doing so anyway it has now become a tyrannical government in which "continuity of government' (and by extension the banking system) becomes the main focus. Not serving the people.

How this tyranny manifests will be different in every case, but when it occurs if the people push hard enough it will always eventually and inevitably turn into violence. We like to think we're "free and democratic" but the reality is if you're doing something the government doesn't want your freedom to do it doesn't matter at all and the 'political suppression squads' come out. I call them political suppression squads because they are used far more often for "protests" than they are for actual riots.
MONTREAL - Riot police swiftly snuffed out a demonstration Thursday in Montreal after a few dozen marchers had barely hit the streets to protest a controversial plan to pipe oilsands crude eastward.
No "riot", just a demonstration.

Meanwhile in Quebec...
MONTREAL — In an unprecedented move, Quebec's provincial police force has formally charged its own former director and two other ex-bosses with fraud, theft and breach of trust.

Steven Chabot, Alfred Tremblay and former top cop Richard Deschesnes are accused of siphoning money from a secret police fund to pay a bonus and illegal consulting fees.

The case has given the public a rare look into the internal workings of the police force, known as the SQ.

Deschesnes ran the SQ from June 2008 until October 2012, when the Parti Quebecois reassigned him shortly after it took power.

His co-accused, Chabot, now retired, was the SQ's assistant director in charge of criminal investigations.

Tremblay, the third man charged this week, was once a chief inspector at the SQ.

All three men were charged by summons and were to be fingerprinted and photographed Wednesday at a Montreal police precinct.

The former officers are scheduled to appear at the Montreal courthouse on Feb. 13.

In December 2012, shortly after the PQ removed Deschesnes, Public Security Minister Stephane Bergeron held a news conference to announce an investigation into what he called "extremely disturbing" findings.

He said a secret SQ expense fund had been used for a severance payment and to hire a consultant who was ineligible to work for the government because of back taxes.

The off-the-books fund is earmarked for operations such as drug transactions by undercover officers or to pay informants.
Now despite the fact that they have finally been charged there is a long-term effect from findings like this, the erosion of public trust. The police of course will insist this private fund is completely necessary for their job. Undercover drug ops, and what not. But do they have enough trust in them by the people to have earned such a privilege? When crime like this goes all the way to the top such as the "assistant director in charge of criminal investigations" I would have to say that it's a resounding no. Sorry cops, figure out how to do your job transparently and legally. If you really needed these secret funds earmarked and it was really important then you wouldn't have fucked it up for yourselves.

This finding simply leads me to believe the entire purpose of such secret funds is to carry out criminal operations and have secret payoffs. Considering the operation of such funds are secret there is no form of oversight that itself can't be bought off or corrupted. This is the daisy chain of what the erosion of public trust creates. No trust in anything, or anyone. This trust is simply further destroyed by using the police against the people for purely political purposes.

The same goes for Harper's comments on Chuck Strahl.
OTTAWA - Prime Minister Stephen Harper delivered a rousing defence Friday of former Conservative MP Chuck Strahl, the latest chairman of Canada's spy watchdog to step down under a cloud of allegations.

Strahl was not forced to resign, and indeed had been fully cleared by the federal ethics commissioner of claims involving an alleged conflict of interest, Harper told the House of Commons.

"Chuck Strahl is one of the most honourable and decent people I have ever worked with in the Parliament of Canada," the prime minister said as the Conservative benches erupted with applause.
I guess honorable is a relative term. I don't believe that anyone who believes in lobbying is honorable at all. Yes, I realize lobbying is legal, but legality doesn't really matter when the criminals run the show. Laws can be changed and often are once crime is discovered to simply make the crime legal. What I object to is the very notion democracy and your democratic voice can and should be purchasable. Anyone who believes in the principal of 1 dollar, 1 voice, which lobbying inherently represents, is not honorable at all. They are circumventing the democratic process for a preferred voice.

But more so than that is Harper's assertion there is no conflict of interest. The very fact CSIS is spying on and monitoring on Canadians with environmental concerns is a conflict of interest unto itself. You can see this conflict right on this post, "riot" police stop a demonstration against a pipeline before it had barely begun. Where do you think they got their intelligence from? Then you have Chuck Strahl who believes so strongly in these pipelines he would subvert democracy to have them and we're all to trust Harper that he's really just a stand-up great guy.

It's very hard to give Harper and Chuck Strahl the benefit of the doubt when CSEC, CSIS, and the government has been lying and denying non-stop about the extent that they violate Canadians privacy. Nevermind all the additional lies, and scandals, election fraud, etc, occurring at the same time. Each and every one of these events has an accumulative corrosive effect on the public trust and social license.

The government and police say they need these easily abused powers for national security, but there can be no national security if the government continually demonstrates that it feels that secrecy and control are entitlements it should receive regardless.

When people say "well there must be some spying" that's always making the assumption that the "national security" they portray is the reason they're spying and that "corporate security" is not the primary purpose. These Snowden NSA/CSEC/Five Eyes revelations show that governments have taken the social license and ran with it. No "reform" can restore that trust, the social license must be retracted entirely and re-earned. Government's must do their intelligence gathering in the open and prove their intentions if they ever expect to retain the benefit of the doubt they've been operating within when there is such a strong reason now to believe their intentions are not as they say. The same thing goes with secret police funds, and any other secret operations the government and it's agencies engages in.

Of course, I don't expect that will happen. We're no longer in anything even resembling a democracy and the government isn't going to wiling give up it's advantage over the population. That's tyranny in a nutshell. But if it doesn't happen then I do expect that the public trust, even here in Canada, will decline into dangerous levels and once it's gone it's nearly impossible to get back again.

I keep seeing people on Twitter that say things like "does the Harper government really care?". This is the benefit of the doubt I'm talking about. We continue going in circles, wondering why the government isn't doing their job as we see their job as being, but never ask if maybe they're doing exactly the job they've set out to do. No, Harper doesn't care, and neither does Trudeau or Muclair. If they did then you would see the "opposition" actually "oppose" the extreme illegality and abuses that's going on. In the Ukraine the opposition leaders are out with the people, protesting. Here they continue to play the game of parliament no matter how rigged or corrupt that game ends up being.

This is not to say however I want to see the destruction of our parliamentary democracy, but rather simply that my observations tell me it is already destroyed. The parliamentary democracy we see is a powerless facsimile that is much more interested in political grandstanding and talking points than it is in serving the people. The real power lies behind the scenes, in the hands of those who have preferred access to the corporatized global spy-net, and are actively using it in their interests against the population. They won't be giving up this power by choice and that inevitably only has one ending. It's only a matter of time.

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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.

Monday, January 27, 2014

It's pretty much like comparing apples and assholes

Oh boy, Ontario peasants, have I got some great news for you. The minimum wage is going up $0.75! That's like, some change, for your pocket! If you're lucky and can find an old "low inflation" vending machine you'll only have to work 2 hours for a free can of cola. Good deal.

Ironic, though, isn't it? That it's raised on the same day that Dean Del Maestro criticized the government over the devaluing of the dollar. Of course by devalue he means against the USD, not in general as it is always devaluing as I try to cover ad-nausea on here as it's really the key to understanding the problem with everything else. As Mike Ruppert famously says: "until you change the way money works you change nothing".

I just recently explained where we are with the Canadian dollar and why it's devaluing. Recap: it's the taper. Dean Del Maestro is basically criticizing the Bank of Canada for doing exactly the same thing they've been doing for years. Devaluing the dollar. It's just that during this time the Americans were devaluing it at light speed too. Remember? The taper talk has temporarily muted that. But whatever, this is besides the point. Dean Del Maestro is right for the wrong reasons but his overall rightness is still rightness when you compare a dollar that has visibly just lost 10% of it's purchasing power against the USD (nevermind gold, bitcoin) with a meagre $0.75 raise in the minimum wage.

Meanwhile, China continues to stockpile gold and divest from U.S. dollars. Bitcoin, "legal tender" or not, is beginning to make serious inroads and confidence in it is growing. It should be no surprise that the U.S. was so quick to "bust" two of the exchanges for drugs, apparently. The U.S. runs the drugs folks, they are essential to the U.S. "economy".

Banks Launder Billions of Illegal Cartel Money While Snubbing Legal Marijuana Businesses
Stratfor Sources: U.S. Troops in Mexico as Feds Aid Cartels

Everyone is talking about how to help the poor and get them off minimum wage. But your wages are all devaluing too. The world is in a race to the bottom with the USD and don't think for a moment the fiscal cliff is over and done with. That was just round 1.

Raising the minimum wage isn't going to solve anything, all it's going to do is dilute the currency base and devalue your currency even more. It's gotten so bad there are basically two inflation rates as articulated in this article on Alberta's inflation.
Todd Hirsch, chief economist with ATB Financial, said consumers in Alberta saw much higher prices for fresh vegetables (15.7 per cent), natural gas (9.4 per cent), homeowner’s insurance (8.1 per cent) and gasoline (4.8 per cent). Year over year, prices fell for meat (2.0 per cent), electricity (1.3 per cent) and personal health care items (0.5 per cent).

“The trend that has developed, both within Alberta and Canada, is noticeable price inflation on many non-discretionary items — things like fresh food, natural gas, gasoline, rent, and intra-city transportation,” he said. “On the other hand, discretionary items such as personal care services, furniture, home electronics and certain clothing items are seeing very low inflation or even deflation.

“Because non-discretionary items account for a larger portion of the monthly budget for low-income households, it is these Albertans who are feeling the full effects of price increases. They can perhaps be forgiven if they don’t believe inflation is running at a mere 2.1 per cent.”
Yes, they can be forgiven because for them it's not a mere 2.1 per cent! It's "low inflation" for the have's and incredible cost increases for everyone else.

Andrew Coyne linked a story which supposedly busts the "myth" of a rising student debt burden. It uses 3 charts to accomplish it, supposedly. Average graduate debt at graduation, average graduate income 24 months after graduation, and average after-tax income to support the loan. All from 1986. But what is perhaps the most astonishing is the second chart, average graduate incomes 24 months after graduating.

In 1986? $46,321
And by 2012? $45,894

And somehow this is supposed to prove there is less of a burden? Sure it's weighted but its weighted to the wage growth, not the additional burden a near doubling of the student loan debt, and how about food, housing? How much are those eating into student's pockets?

Sure, you can point at any individual thing (except housing, food) and say "See! The price increases aren't that bad!". But start throwing the cost increases on everything in there and quickly a person's low-income disappears.

If we're going to continue pretending there is actually a solution to this in our Ponzi-conomy then perhaps the best thing to do would be to index minimum wage to the average of the incomes of the creators and benefactors of inflation, the banker CEOs. I'm betting that would end their "low inflation" woes in a jiffy.

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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.

Sunday, January 26, 2014

Every minister is an 'oilsands minister'

The response to Brian Jean's resignation and request for the oilsands to slow down has been dismissed by the Alberta and Federal "environment" ministers. Not sure how this one slipped past me, but it did.

Environment ministers dismiss talk of slowing oilsands expansion
Provincial and federal environment ministers agreed Thursday there are no plans to slow down expansion of the oilsands, even as a former Fort McMurray MP says explosive growth needs to cool off to allow the area’s infrastructure to catch up.

Former Conservative MP Brian Jean, who resigned his Fort McMurray-Athabasca seat last week, said in interviews this week the pace of oilsands expansion has negatively affected the region’s quality of life as companies try to get “every bit” of oil out of the ground immediately.

Alberta Environment Minister Robin Campbell said the Progressive Conservative government isn’t rethinking the rapid growth of the oilsands, with companies expected to ramp up production to 3.2 million barrels per day by 2020 from 1.8 million barrels in 2012.

“Mr. Jean is entitled to his opinion. It’s unfortunate that he would step down and then make those comments,” Campbell said after a federal-provincial announcement in Calgary.

“I never heard those comments from him when he was the MP.”
Ha, "environment ministers". More like the "oilsands ministry on the environment". Seems like every minister is just an oilsands minister who will rationalize and dismiss all concerns regarding their supposed department.

I'm sure if comments such as those were ever seriously considered by the party line and not dismissed as they have been time and time again he probably wouldn't have felt the need to step down from Harper's pro-oilsands tightly controlled party-line before saying them. What does that say of our "parliamentary democracy" that an MP actually feels the need to resign before he can represent his constituents?

But here really is the crux of how far down the rabbit hole we really are. This is a Conservative MP, one of Harper's boys, who is saying his constituents - the residents of the capital of oilsands-ville Fort McMurray - are complaining about a "suffering quality of life" and the government basically says: "so what"?

Don't you see Canadians, especially Albertans? You have been bamboozled! The biggest pro-oilsands argument of them all "improving quality of life" is a big fat fucking lie!
Campbell acknowledged there are infrastructure challenges in the Regional Municipality of Wood Buffalo, but said the province is committed to working with the community, aboriginal groups and others to deal with the issues.

He said the oilsands create jobs and wealth that help finance needed government programs and drive the national economy.

“It’s not as simple as just saying, ‘We’re going to slow down production.’ I mean, a lot of people across Canada depend on the oilsands to make their living and we accept that responsibility,” added the MLA for West Yellowhead.

Asked about Jean’s comments, federal Environment Minister Leona Aglukkaq said “everyone is entitled to their opinion,” but stressed Ottawa is simply dealing with the demand from industry.

“We go forward based on the applications that are made through the regimes that are in place for Canada,” she told reporters.
Yea, just like the government was working in the past on infrastructure challenges right? 50 years of oilsands development, the big supposed cash cow, and what does Alberta have to show for it? After 50 years of what's billed as an industry that "creates jobs and wealth that help finance needed government programs" I would think there would be a whole lot more wealth, don't you? I definitely would think that the sustainability fund would have billions upon billions of stored revenue. I definitely would think that a couple billion dollars for infrastructure upgrades would be pocket change for a wealthy oil producer like Alberta. So where is it?

If the oilsands are providing all this wealth for "needed government programs" why is Canada and Alberta slashing "needed government programs" left, right, and center? If they're financing "needed government programs" why are public sector workers told again and again that they need to take pay-hike freezes and "tighten their belts"?

Alberta literally has 30 years worth of "development" to catch up with and literally no cash left to do it with, convenient isn't it that these infrastructure upgrades funded on taxes and debt are coming after the government blew it's wad on what we can now see is literally nothing. Yet, despite how incredibly obvious the lie of oilsands prosperity is, they would have you believe that you're not going to be paying the way for the needed infrastructure to catch up, and then even beyond that the needed infrastructure to keep up with their expansion plans.

The government says it's willing to "accept the responsibility" of people making their living working for the oilsands but they apparently are not willing to take responsibility for their documented lack of planning, or quality of life for those Canadians who find that the "demand from industry" always takes precedence. They are not willing to take responsibility for the incredibly lopsided cost of living where if you're working in Alberta in any industry but the oilsands you'll find life extremely expensive.

When you consider how dismissive they are of the constituents and ex-Conservative MP's concerns regarding development and how it affects quality of life and old Conservative Peter Lougheed then what sort of confidence does that give you regarding the government's relations with First Nations? Ezra and pals would love to have you believe that oilsands benefit the First Nation people but in reality they are not being given much of a choice and there is zero-respect for their culture.

The government and it's oilsands ministers keep pointing to wealth, jobs, and the financing of needed government service to excuse the environmental destruction. They say it's a "social benefit". The wealth is paid to us in devaluing USD which the Federal Reserve is producing in excess at a rate of $75billion per month. They are literally giving us nothing for something and when the USD crashes (as all Fiat currency does) we'll be left holding an empty bag.

The jobs are being replaced with temporary foreign workers, part time workers, or workers who receive very little in the way of benefits, pensions, etc. Yes it pays well, but it is not secure work or career focused. Its about getting in, making as much currency as possible, and getting out. Finally, when it comes to "needed government service" and as we've covered recently it's basically non-existent. Much of the service needed by Alberta wouldn't be needed if the oilsands weren't here in the first place and when the government finally realizes that so many people are dying that it adds further harm to "their image" and finally do decide to fund "needed government service" they borrow to do it and have the population pay private banks interest out of their pockets to afford them while creating bullshit public relations budgets like "capital spending" and "infrastructure spending" to hide their extreme mismanagement.

How can anyone at this point believe the oilsands are "sustainable" when Alberta can't even afford to have a "sustainability fund"? I don't know, but I bet an oilsands minister can redirect me to a non-answer.

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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.

Saturday, January 25, 2014

Bieber's arrest appears to have been overhyped, but why?

I can't believe I'm about to write on this blog about Justin Bieber, but I am.

Details are starting to emerge that point to Justin Bieber's arrest being extremely overhyped.
Justin Bieber was driving under the speed limit when he was arrested.

The 'Heartbreaker' hitmaker, who was charged with drink driving, resisting arrest and drag racing in Miami, Florida in the early hours of Thursday morning (23.01.14), was reportedly only driving at 27 MPH in the middle of his ''drag race.''

A source told gossip website that the 19-year-old star, who was accused of driving between 55 and 60 MPH in a yellow Lamborghini alongside his friend Khalil in a Ferrari for 15 blocks, had a GPS device installed in the rental cars that tracks speed and it proves both cars were only going 27 MPH at the 3500 block of Pine Tree Drive in the middle of their alleged ''drag race.''

Only one of the cars broke 50 MPH once during the short rental period and it was after the singer and his entourage left a nightclub a few hours earlier.

Police officers also claimed Justin, who is more than a year under the legal drinking age in the US, reeked of alcohol at the scene but his blood alcohol level was barely measurable at .014.
Now, this is interesting because what was plastered on every front page everywhere? "Justin Bieber arrest on drag racing and DUI". As someone on Twitter pointed out the Globe and Mail put out an astonishing 15 stories and videos on Justin Bieber that day. Big news, apparently.

I've seen a few people alluding to this being a cover about the Ukraine riots, but that doesn't make sense. Those will be making the news regardless, it's ongoing, you can't hide those with a single story and I haven't seen any indication they want to. But something else was happening that day, Edward Snowden's first online Q&A and indirect response to Obama's useless whitewash and bullshit NSA "reforms".

His first communication with the public is a pretty big deal, I think, don't you? Seems like a big story, but go ahead and Google that and it's almost like it never happened and most of those who did notice were in Europe. But when Obama was giving his "reforms speech" every news media was listening.

CBC covered that Snowden sees "no chance of a fair trial in the U.S." but at least they give a link to the Q&A session but don't bother to cover any of the actually important content there.

Media, police, and Hollywood. U.S. intelligence has been heavily involved with all 3. As I pointed out yesterday the Five Eyes alliance has a goal of "eliminating privacy worldwide" but they want you to think it's all about "terrorism" even while they fund select terrorists for their own political gain. al-Qaeda are important enough to violate your privacy and freedom but not important enough to drive out of Syria.

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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.

Friday, January 24, 2014

Five Eyes, More Lies

Ottawa defends spy agency, says collection of Canadians' data 'incidental'
The federal government is defending its secretive eavesdropping agency in a lawsuit filed by a B.C. civil rights group, insisting any collection of Canadians' communication is unintentional.
The B.C. Civil Liberties Association filed a lawsuit last fall, alleging Canadians' communications were being illegally swept up by the Communications Security Establishment Canada, or CSEC.

The group's lawsuit targeted the spy agency's monitoring of foreign communications, as well as the collection of metadata, which reveals technical information but not the content of electronic communication.

But Ottawa has filed a statement of defence that says CSEC follows strict rules that prevent the agency from specifically targeting Canadians and its activities are monitored by an independent commissioner.

The government says it's impossible to know whether a foreign target may be communicating with someone in Canada, which means a "small" number of communications from Canadians has be collected.

As for the collection of metadata, the statement of defence says it plays a vital role in identifying and thwarting cyber threats.
Threats, threats, threats. It's all about threats, apparently. Except that Glenn Greenwald in December testified to an EU parliamentary committee that the NSA and the Five Eyes alliance (meaning CSEC) have a goal of the "elimination of privacy worldwide".

From the video:
"...the reason that I know that's what they're attempting to achieve is because this is what they say over and over and over again. On occasion they say it publicly, and repeatedly they say it in their private documents which were written when they thought nobody was able to hear what it was that they were saying."
Please watch his whole testimony.

Who do you believe?

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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.

Wednesday, January 22, 2014

Forward thinking: The dollar, gold, silver, and bitcoin

Oh boy, the tizzy that is being caused by the "weaker" Canadian dollar is quite entertaining. Few seem to have the first fucking clue what's happening and so in my less than graceful way I will attempt to explain.

First of all though before even trying to understand you must watch Mike Maloney's "hidden secrets of money" because there is a bunch of basic hocus pocus within our monetary system that you must understand to have the first idea what's going on (I'll be reworking the Key concepts soon and including his videos as I'm not currently happy with the way their information is organized). Go on, watch it, this post will still be here when you get back.

Alright, all caught up? Good.

So what's happening with the Canadian dollar? Why all of a sudden is it tanking against the U.S. dollar? If you were to believe typical Canadian economists you might think this is because of the actions (or inactions and announcements) of the Bank of Canada (and it is, sort of). However, as per usual, they're behind the curve and being this blog is about foreword looking trends and forecasts I'm sorry to have to inform them they are basically describing 2012 and last year. The trend has now changed, at least in appearance, though overall the trend is the same it's simply that certain circumstances have temporarily changed.

There is one reason, and only one reason that the CAD has dropped significantly against the USD in the last month (as opposed to before where both the USD and the CAD were free-falling). The Federal Reserve's supposed attempt at a "taper".

It is not that our dollar is "getting weaker", it's that the USD has slowed it's decent while the CAD policies have kept us in the race to the bottom. However, as Jim Rickards accurately describes, this taper, like all previous tapers (they weren't called tapers then) isn't going to last very long.

So you might be wondering then why Canada is still maintaining policies to keep us in a race that is taking a temporary break? Canada is now stuck in a liquidity trap of it's own making. I declared the beginning of this the "Canadian Housing Conundrum" (which is still probably one of the posts I've had the most fun putting together to this day I might add).

Vancouver's housing 2nd least affordable in world
Canada while originally chasing the U.S. dollar's devaluation to maintain a minimum level of exports with them has put itself in a position where we now need this cheap liquidity. When the central bank talks about "low inflation" (or disinflation, stagnation), as we've discussed recently, they are really talking about credit deflation or put simply a lack of new loans. This is why despite a clear housing super-bubble banks are again quietly lowering their own mortgage rates. Banks are also predictably putting extra fear on the gold concept in tandem because you know that these fuckers want you to sell so they can buy before the FED inevitably ends up having to pump QE up again, which will of course drive up gold as even though it is being supressed and manipulated by the banks in the same manor as LIBOR and oil it is still not sufficient to stop it from at least partially accounting for the huge expansions of currency that have been going into the system and the elite's will be profit taking it up the ass the whole way.

Metals, Currency Rigging Is Worse Than Libor, Bafin Says

Alright, that's where we're at currently in terms of the CADUSD, any questions?

Moving on. I haven't covered bitcoin very much on here. I don't really cover any particular commodity or currency, this blog isn't about making money tomorrow, it's about preparing for the years ahead. I've had several conversations on bitcoin on Twitter and whatnot where I've said I have reservations about it but have never really had the time to expand on what those reservations are so I'm going to state my positions on gold and silver and bitcoin now. However, these are simply my positions on them, this is in no way financial advice. This is simply my own long term outlooks.

First we'll go into bitcoin and a quick overview of how I see bitcoin. Whether Canada or Finland want to declare bitcoin real money or not doesn't matter. The irony of course being that both countries' "legal tender" is currency, not money. Finland explicitly stated that it is because there is no central authority that it fails the "money test" (A central authority is not part of the money test, btw - again, refer to Mike Maloney's videos) yet their own currency fails a real monetary test: store of value.

Now for those not familiar with the bitcoin mining process you might be wondering why I believe bitcoin has a store of value and why it is not fiat or debt based in nature even though it is virtual. Bitcoin and cryptocurrency in general is in fact backed by a hard asset: electricity. Literal energy, where as gold is stored energy in a physical form bitcoin represents literal real time energy which was paid for out of the miner's pocket and stored in a virtual representation we call a bitcoin.

The cryptography of the mining process ensures this coin can not be duplicated. There can not be more bitcoins in existence then there is electricity to create them. From this stand point they are more secure than gold as financial instruments like gold or silver ETFs can be counterfeited and you never really know if you own the resource you claim to unless you actually go and try to pick it up.

Bitcoin has also taken a sizable chunk out of gold. If the flight to bitcoin had not happened this year do you believe that currency wouldn't have tried to find another safe haven? Bitcoin in just one year approached gold's levels and then tapered off, that's not a coincidence. Much of gold's growth went into bitcoin instead.

Growth really is incorrect though, these are hedges against dollar devaluation, the value of the resource is not really growing, the value of the currency is shrinking.

Bitcoin has a major downfall though which for me has ruled it out as a long term store of value. Bitcoin's strength is also it's weakness, it's direct reliance and correlation with electricity. For you to trade bitcoin you need electricity, there is no physical representation and even if there were to verify it's authenticity it would need to be validated against the bitcoin blockchain anyway.

Why is this a problem for me? Well as I said, this blog is about the long term and it's about you making it through the coming turmoil, it is not about making money. It's a problem because the approaching turmoil, both natural and man-made, doesn't come with an "electricity included" guarantee.

For long term storage I want something that is going to be tradable even during prolonged periods of blackout and also something that retains value despite political turmoil, changes in government, and economic collapse. For me, the only contenders are gold and silver, you can be reasonably sure that in the best and worst of times you'll be able to either trade it directly and/or trade it in for something that can be traded or "legal tender".

I see bitcoin playing an important role as a sound money replacement for modern electronic transfers. It is more secure without a central authority than any central authorities so called protections. The problems, and hacks, of bitcoin have had to do with the exchanges trading bitcoin, not the bitcoin blockchain. This distinction is important, the difference is the same difference as though you were trading on the NYSE and your account on the NYSE got hacked. Is it the currencies fault? No, it's the exchange. Bitcoin, the money, has not been hacked or counterfeited. What central authority can claim the same?

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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.

MP Brian Jean resigns to “concentrate on the things my constituents have told me are important to them”

I've already added this article as an update to my post from a couple days ago but I figured it's so important, and so uplifting, that it really needs it's own post.

From the Calgary Herald...
Now there’s a surprising voice for some of these issues — Brian Jean, the former Conservative MP for Fort McMurray, who has just resigned from the Harper government.
Redford won’t want him as a tour guide.

Freed from the caucus discipline, Jean says he can now “concentrate on the things my constituents have told me are important to them.”

And what concerns them, he says, is deteriorating quality of life because of rapid development.

“It seems like we are trying to get every bit (of oil) out of the ground right away, but the oil isn’t going anywhere,” he told the Edmonton Journal.

“Do we need to do it at the cost of people’s lives?”

Jean said what everybody up there knows; the community is jammed, with services for far fewer residents than the current population of 77,000.

It’s time, finally, to follow the late Lougheed’s advice.

There should be a pause on approval of new projects until the province can catch up with problems stemming from development and rising emissions.

Another sure way to cut emissions quickly, according to the Canadian Association of Physicians for the Environment, is to phase out coal.

The group says Alberta burns more coal than all other provinces combined, and this produces emissions roughly equal to all those from the oilsands.

These physicians say coal emissions contribute to more than 100 deaths annually, as well as many asthma attacks and emergency visits.

Phasing out coal would be costly and could drive up power prices; the companies would deserve compensation. But the benefits to Alberta’s environmental performance would be huge.
I think this just goes to show all of the so-called "left-wing", that not all conservatives share Harper's globalist agenda. The left vs right smokescreen is severely flawed, and a tool of division. There are good and bad MPs on both sides. The sports like "team aspect" of politics is frankly embarrassing.

Any real "fiscal conservative" should be able to instantly identify that the oilsands are an economic sinkhole. Blind support of industry at the expense of the people isn't "conservatism", it is globalism and it is fascism as we recently covered here.

So I applaud Mr. Jean for doing what he's paid to do even in the face of clearly unrelenting forces. This is extremely significant.

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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.