News roundup, 14 Oct 2025

- The price of gold has topped $US4,000/oz t last week for the first time in history, as investors price in uncertainties about the US economy. Actual inflation hasn't been all that high, but the Federal Reserve has signalled that interest rates will likely decrease again later this year. Not mentioned in the article are concerns about the future independence of the Federal Reserve itself; presumably CBS' new owners don't want us thinking about that.

- A Bell 222SP helicopter went out of control and crashed while participating in a "Cars 'N' Copters" event in Huntington Beach, California on Saturday. The aircraft is shown from multiple video angles going into a spin, and the entire tail rotor gearbox was ejected from the tail before impact. The two people on board survived but with significant injuries; three people on the ground were injured as well. Juan Browne (blancolirio) has some preliminary analysis here.

- The Carney government has announced that they will be moving forward with plans for income taxes for some lower income Canadians to be filed automatically starting in 2027 and expanding over the next couple of years. This sort of thing has been the norm in many countries for a long time; no doubt the tax software companies are vehemently opposed, though. Politically, it's a smart move because when people have to do their own taxes they're reminded of the fact that they're paying taxes, making it easier to whip up populist anger about them. The government is also expanding a national school meals program.

- China is now outright offering to remove the punishing tariffs on Canadian canola if Canada is willing to remove the equally punishing tariffs on Chinese electric vehicles. Prairie premiers, including both Wab Kinew and Scott Moe, have been calling for this for some time, while Doug Ford is vehemently opposed. If this does happen I will be pleasantly surprised; while the Canadian auto sector is probably doomed anyway, I doubt that Carney will be willing to be seen to be admitting that, since the ridings with a lot of auto plants are mostly competitive, while the rural folks in the prairies who would benefit from opening up the canola market aren't going to vote Liberal no matter what (because Jesus, Trudeau, and freedumb).

- The Canadian Union of Postal Workers is backing away from their across-the-board strike, moving to rotating strikes instead. I guess that the union's leadership knows deep down that regardless of the merits of their position they're not going to win in the court of public opinion if people can't get their Amazon orders.

- BC Conservatives leader John Rusdad has ordered the cellphones of all his MLAs to be searched after it was leaked to the media that there had been a push for his leadership to be reviewed. Rustad denies being paranoid and claims that it was actually caucus members who pushed for this. Notably, the search extended not only to phones issued by the legislature but MLAs' private phones as well (at least the ones Rustad knows about). 

- The head of Oregon's National Guard told a Senate subcommittee that if his troops are deployed, they will consider protecting the public from ICE to be part of their mandate. Of course, this just means that the regime will use NG troops from a more pliant state, but it will be interesting if this protection extends to the actions of out-of-state troops. Things could get very interesting if, say, the governor decides to deploy the Oregon NG to protect the state's people from them (or from out-of-state NG troops). It's worth noting that ICE has already accidentally teargassed cops in Chicago.

A few more unsettling stories about the economy

First, how about the fact that the reserve fund that guarantees Ontario pension plans is vulnerable?

Ontario's unique pension-plan safety net, which makes payments when companies go bankrupt, is close to being wiped out and could fold if a large corporation were to go under soon, experts warn.

The provincial government is accepting comments on a report it commissioned in 2006 — the first review of pension laws in 20 years — and lead author Harry Arthurs concluded that the Pension Benefits Guarantee Fund, the only program of its kind in Canada, could soon become history.

"I think one sufficiently large company or several large companies (going bankrupt) would cause the plan to go broke," Arthurs said in an interview, adding that the Ontario government isn't required to save the pension-insurance program.

"They certainly have no legal obligation to bail it out ... and I think it's an interesting question: If there isn't enough money, what happens next?"

Since 1980, the Pension Benefits Guarantee Fund has provided pensioners with up to $1,000 a month in the case that a pension plan fails to provide its full benefit, or any at all.

The program is funded by corporate payments and has been run successfully for decades.

But the report notes it's increasingly common that companies are reporting high levels of unfunded pension liabilities — shortfalls in funds needed to pay pension requirements — and the provincial fund is threatened by a possible "shipwreck scenario."

That could occur if a bankrupted company with many employees flooded the fund with claims and the government found the shortfall too expensive to make up.

From the CBC. Secondly, the smart money is looking for safe havens:

Barrick Gold Corp. Chairman Peter Munk said an “unpleasant and frightening” trend of investors buying gold as protection against uncertainty in world markets may help push the metal over $1,000 an ounce.

Munk, founder of Toronto-based Barrick, the world’s largest gold producer, said he has received an increasing number of calls from wealthy investors looking for ways to buy bullion. While that is positive for the metal market, it is a “sad part of a civilized society,” Munk said.

“That’s not where you want to be, it’s alarming,” he said today in an interview from Davos, Switzerland, where he is attending the World Economic Forum. “Do I personally believe gold will break through $1,000? It’s not a question of if, it’s a question of how soon.”

The strong demand is being mirrored among professional investors whose funds are buying gold and shares of the companies that produce it. That helped the metal to its eighth straight annual gain last year and has driven a rally in gold stocks in recent months. Gold miners including Newmont Mining Corp. and Yamana Gold Inc. are taking advantage of the trend to raise cash, with new equity worth more than $2 billion sold since November.

From Bloomberg. What's interesting here is not simply that they're looking for safe havens, it's the choice of safe haven. Lately we've been hearing about deflation as a major risk (and it may well be) but the best hedge against deflation would be things like cash or bonds. Gold doesn't do as well in deflationary times (its price tends to fall along with everything else). But if you see serious inflation as a possibility, then gold starts looking good. So maybe the inflationists are right. On a similar note, consider this:

For the first time since 2007, Treasury investors are betting that inflation will accelerate.

The yield on 10-year notes exceeds the consumer price index by 2.72 percentage points, the most since December 2006. The gap between two- and 10-year rates widened at the fastest pace in a year last month as traders demanded more compensation for longer-term debt. Treasury Inflation Protected Securities that signaled falling prices as recently as Nov. 20 show they will increase in the U.S. this year.

Deflation was the growing concern for investors in 2008 as government bond yields fell to historic lows in December, the Reuters/Jefferies CRB Index of commodities tumbled 53 percent since July and home prices plunged 18 percent amid a deepening recession. Now, the bond market is saying Federal Reserve interest rates at zero percent, President Barack Obama’s $819 billion planned stimulus package and $8.5 trillion of U.S. initiatives to revive credit markets will reignite inflation.

Bloomberg once again. And let's not forget that America's biggest state is caught up in a budget crisis and is having trouble paying its bills:

Running short of cash, California has started delaying $3.5 billion in payments to taxpayers, contractors, counties and social service agencies.

With the governor and state lawmakers locking horns on resolving California's budget crunch, the controller Monday halted checks covering these obligations so the state could continue funding its school system and making its debt payments.

The delay will inflict more pain on the already sorry condition of the Golden State, which is facing a $40 billion budget gap. People won't have tax refund money to spend, businesses won't get paid for their services and agencies won't have funds to help the needy until the budget situation is addressed.

Nearly $2 billion in personal state income tax refunds are being held up, according to state estimates. Last year, some two million Californians received refunds in February.

From CNN. Of course, part of the problem arises from the fact that California not only uses a presidential/congressional system (hence no provision for early elections in the event of loss of supply) but the fact that they require a two-thirds majority to pass a budget. Not a good thing.

Yeah, this situation

Bullion dealers running out of stock

As most of us know, gold has a reputation for being the investment of last resort. There's a good reason for that, of course; although its value is as dependent on people's perception of value as is fiat currency, there has never been a time in recorded history when gold has not been seen as valuable. So in times like this, people tend to go for gold. Well, it seems a lot of dealers are caught unprepared:

FEARS of the unknown long-term effects from the global financial crisis have sparked a new gold rush.

With retail and wholesale clients around the world stocking up on the precious metal, the Perth Mint has been forced to suspend orders.

As the World Gold Council reported that the dollar demand for gold reached a quarterly record of $US32 billion ($50.73 billion) in the third quarter, industry insiders said the race to secure physical gold had reached an intensity that had never been witnessed before.

Perth Mint sales and marketing director Ron Currie said the unprecedented demand had forced the Mint to cease orders until January, with staff working seven days a week, 24-hour days, over three shifts to meet orders.

He said Europe was leading the demand, with Russia, Ukraine, Middle East and US all buying -- making up 80 per cent of its sales. One European client purchased 30,000 ounces for $33 million.

"We have never seen this before and are working right at capacity. And we are seeing it from clients in the shop buying one ounce, right up to 30,000 ounces from overseas clients," Mr Currie said.

Robert Jaggard, manager of bullion and rare coins dealer Jaggards, said business had picked up strongly and he expected it to increase further.

"All around the world there has been a heavy run on physical gold and there is a shortage of supply," he said.

Via audrey_girl in this iTulip thread. Some might wonder if gold really is such a good investment right now, since although gold does well when inflation is high, many of the pundits are now talking about deflation. And under deflation, the price of everything tends to drop - including gold. However, the party line at iTulip is what they call "Ka-Poom theory" (I shit you not). The basic thesis is that the present economic crisis will unfold with, first a deflation, and then a spectacular inflation. If their theory is true, buying precious metals is a great idea, because the "ka" gives you the opportunity to buy them cheaply, and when the "poom" comes you'll be sitting pretty. Whether their thesis is more plausible than the pundits who fear a deflationary spiral, I can't say.

Of course, the tinfoil hat crowd are saying that prices are being delibrately manipulated by the Illuminati, the Elders of Zion, or some such organization (and I'm not exaggerating; try googling site:kitcomm.com "elders of zion" some time and see how many of the folks at that site take the Protocols seriously). Apparently the wicked conspirators first pushed the price of gold down by shorting gold-backed securities, then bought all the gold in bulk so there's none left for the rest of us. Or something like that. I tend to figure on something much more mundane - like, the bullion wholesalers were taken by surprise as much as anyone was by the direction the economy has taken, and as a result they didn't have enough supply built up to take advantage of the opportunities. The sociological corollary to Ockham's Razor - never invoke conspiracy to explain that which can be adequately explained by stupidity.

This is unfortunate...

Fear is mounting at the Museum of Anthropology at the University of British Columbia in Vancouver that the stolen gold artwork by late Haida native artist Bill Reid may be melted down because of their gold value.

"That will be a disaster if those pieces are melted down," Moya Waters, the museum's associate director, said Sunday.

Twelve of Reid's works displayed in glass-enclosed, stone showcases were stolen overnight on Friday. They include bracelets, brooches and cufflinks. Three golden-coloured Mexican art objects also vanished.

From here. I guess the fact that gold is running close to $1000 an ounce makes stuff like this more likely. On the radio they said that the museum is offering a $50,000 reward; the value of the gold in the works is apparently only around $15,000, so maybe the thieves will jump at the chance. Here's hoping, anyhow.