News roundup, 24 July 2025

- All remaining personnel in Leaf Rapids, Manitoba, including firefighters, have withdrawn from the community as a wildfire entered the industrial area of the town. 

- Sales of American alcohol in Canada are down 66% nationwide; for wine, imports are down a whopping 94%. Given that most provinces aren't stocking the stuff at all, though, one has to wonder why it's not down more; perhaps the deplorables in Alberta and Saskatchewan are buying a lot to show their allegiance to the orange monster.

-  Time is announcing what they call a "surprising" reason for the increase in grocery prices, namely the large number of extreme weather events of late. And yes, it's pretty apparent that climate change is probably responsible for how many such events there have been recently. This does not come as a surprise, though, to anyone who's been paying the slightest bit of attention.

- Many Canadians who are trying to boycott American products are finding that grocery chains are using misleading signage on imported food displays in their stores. This is of course illegal, but I have yet to hear of one of them getting fined for it. Best to read the fine print on the labels, I guess.

- French president Emmanuel Macron and his wife Brigitte are suing far-right podcaster Candace Owens for defamation after Owens alleged that Brigitte is trans, that the two are blood relations, and that the CIA used mind control to get the French people to vote for Emmanuel.

- Parks Canada has cancelled the permit for MAGA rocker Sean Feucht to perform at the York Redoubt National Historic Site in Nova Scotia, citing "evolving safety and security considerations" and recommendations from the police. Several municipalities, including Charlottetown, Moncton, and Quebec City have followed suit, as has the National Capital Commission in the case of a planned show in Gatineau. The York Redoubt performance has relocated to the hamlet of Shubenacadie, population 411, in East Hants; shows are also still scheduled to go on in Toronto and Ottawa if you're really keen to see him.

- Waterloo Regional Police arrested a man spotted riding a stolen bicycle on the University of Waterloo campus and found him to be in possession of something that appeared to be a grenade. Fortunately it was an inert one, intended to be used for training purposes.

News roundup, 17 July 2025

- The possibility of Donald Trump firing Federal Reserve chair Jerome Powell is still looming. Powell has refused to cut interest rates as Trump wants; he needs some sort of a pretext to do this, though, and the alleged mismanagement of the renovations on two Federal Reserve buildings just might be it. Trump has already been polling Republican legislators on the issue. He's denying, however, that he actually plans to do so, perhaps leery of what such an unprecedented move might do to the markets. Interfering with their central banks didn't do Hungary and Turkey any favours, after all.

- The Trump regime is doing its utmost to stop the expansion of renewable energy, even as China races ahead. China already has five times the amount of renewable energy in its grid as the US - and they have greatly expanded electricity supply without increasing their fossil fuel consumption as a result. Their crackdown on offshore wind now has Massachusetts and New York looking to buy power from an offshore project in Nova Scotia.

- The matter of the Epstein files continues to cause problems for Donald Trump. Some think that this could be thing that finally makes the MAGA crowd question their previously unquestioning loyalty to the orange monster. Then again, it might just as easily make them question their previously unquestioned belief that sexual abuse of minors is a bad thing.

- A plastic surgeon in Utah who allegedly destroyed more than $28,000 worth of government provided COVID-19 vaccines and gave kids saline shots so they would answer yes when asked if they had been vaccinated has had all charges against him dropped by the Department of Justice under Pam Bondi. Dr. Michael Kirk Moore Jr. had allegedly accepted cash bribes to distribute fraudulent vaccination cards as well.

- Two people have been arrested after allegedly using a tow truck to steal several vehicles in Transcona.  

News roundup, 12 Dec 2024

- As expected, the new draft budget for the City of Winnipeg includes a 5.95% property tax increase. The budget includes money for 36 more police officers and 15 community safety officers, but none for the Community Connections facility in the Millennium Library lobby; it also initiates a pilot study to defer residential snow clearing until a 15 cm snowfall instead of the current 10. Even with the tax increase the city will still have some of the lowest property taxes in the country, but that may be a hard sell with a lot of residents. There seems to be little alternative, though.

- Cycling activists in Toronto have launched a court challenge against the Ford government's anti-bike lane legislation, citing the rights to life and security of the person in the Charter of Rights and Freedoms. Not sure what the chances of success are, but one thing they have in their favour - the fact that the government saw the need to specifically exclude lawsuits for deaths or injuries resulting from the law does suggest that it is not a good thing for the aforementioned rights.

- Doug Ford has responded to Trump's proposed tariffs by threatening to stop supplying electricity to the US. Whether he has the nerve to actually follow through on this threat is another question, though.

- A poll has found that just over a third of Canadians think the response of governments to COVID-19 was excessive. This happens to be in the same ballpark as the baseline level of support for the Conservatives, which shouldn't be surprising.

- FBI director Christopher Wray will be stepping down at the end of Biden's term in January, despite having more than two years left in his own appointment. Trump has expressed the intention to appoint former national security aide Kash Patel; RFK Jr., though, thinks his daughter-in-law Amaryllis Fox Kennedy would be a better choice. Trump is apparently open to the idea.

- One of the more disconcerting things about the climate crisis is that as it proceeds, it causes inflation, not least because it impacts food production and thus increases prices. And because measures to contain and mitigate climate change are expensive, inflation dampens the political will to proceed with such measures, even as they're needed more than ever; instead the sheeple are driven to vote for rightwing populists who tell them what they want to hear. This has the potential to create what some call a "doom loop" where climate change and far-right politics feed on each other.

- Teachers at the London District Catholic School Board have apparently been ordered not to teach certain books by black authors because they contain the N-word. Among them is The Book of Negroes, by Canadian writer Lawrence Hill, who had this to say about the matter. A teacher who spoke to Hill about the matter was subsequently reprimanded.

- A Houston judge has rejected an attempt by The Onion to buy Alex Jones' media empire. Judge Christopher Lopez cited what he considered a "lack of transparency" in the process, as well as an alleged failure to maximize value towards Jones' creditors. It's worth noting that bankruptcy courts are federal courts, and that Lopez was appointed to the court in 2019, so it's just possible that he's not as impartial as judges are theoretically supposed to be.

- Researchers at MIT have found that people are more likely to eat vegan food if it isn't labeled as vegan. I guess some of them are worried that if they eat it they might become annoying or something.

- Tokyo University's website for graduate student applications apparently had a hidden keyword, not visible by looking at the page normally, that made reference to the Tiananmen Square massacre, thus preventing the page from being displayed in mainland China and preventing Chinese students from applying. The university says that they have since removed the offending word.

- The College of Registered Nurses of Manitoba has suspended the license of a man who was found not criminally responsible for killing his parents and attacking a former coworker. Seems like a reasonable decision to me...

Bank of Canada approaches its day of reckoning

Canada's central bank has announced that it will not be raising rates yet. However, sooner or later this will change. The thing is, setting the rates is a tricky balancing act. If they don't raise them eventually, inflation will become excessive; on the other hand, if they raise them too soon or too much, they will choke off the recovery. After all, high rates mean more of people's previously disposable income will be going towards paying their mortgages and credit cards, and businesses that might want to expand will face higher borrowing costs. And this is likely coming within the next couple of months, whether we like it or not.

Unfortunately, rising oil prices are likely to complicate matters further. The thing is, expensive oil is both inflationary and anti-growth, so we could see a burst of stagflation within the next few years. Hang on; it's going to be quite a ride.

Some more Roundup for those green shoots

The powers that be have been claiming recovery for some time, of course. Certainly things aren't as bad as some were predicting; the TSX is doing very well, and other North American and European exchanges have generally closed up as well, as of this moment. But many economists, such as Jim Stanford, are wary:

Now Statistics Canada’s GDP report for the third quarter adds to the consensus that the recession is over. Led by public sector stimulus, a surge in auto production (tied to the U.S. “cash-for-clunkers” program, now finished), and a steady expansion of the financial industry, real GDP eked out an increase of just under 0.1% (rounded up) for the quarter. “Annualized” (that is, raised to the 4th power), that means growth at an annual pace of 0.4% (again, rounded up).

Qualitatively, this is within the statistical error of margin of zero growth. So again, while it is more evidence that the free-fall in economic activity which occurred from last autumn through this spring has been (thankfully) arrested, this report does not remotely indicate that anything approximating a “recovery” is underway. So don’t pop the champagne just yet.

Here are a few cationary nuggets buried within the StatsCan report:

• Without public sector stimulus, GDP would still be contracting. Private sector GDP shrank marginally during the third quarter.
• Of course, the finance industry is the brightest light in the private sector — partying like the good old days since the markets turned around in March. GDP in the FIRE sector grew a full percentage point in the third quarter. By contrast, private non-financial GDP (what I call the private “real economy”) was shrinking at an annualized rate of 1.4 percent.
• A $1 billion boost in auto sector output (as Chrysler’s Canadian assembly plants came back on stream, and all auto exports were boosted by the U.S. incentives) accounts for 150% of the total expansion in Canada’s national GDP in the third quarter. So much for the Fraser Instutute’s claim that the rescue of GM and Chrysler was a gigantic waste of money. Never mind that it may not actually cost taxpayers a cent; without the auto turnaround, Canada’s GDP would have kept declining. I doubt that performance will be repeated in the months ahead.

Of course, whether the GDP is growing or not is hardly the ultimate arbiter of whether the economy is healthy, for all the reasons we know so well. But it is important. Yet even by this narrowest of criteria, we cannot say that the recovery has arrived. Without public sectior stimulus (both here and in America), and without the current rebound in financial exuberance (that is quite likely simply the onset of the next pointless boom-and-bust cycle), real GDP would still be falling.

The awkward thing is, if they don't keep up the stimulus, things could get dangerously out of control. On the other hand, if they keep it up for too long, they'll run into other problems -- inflation, deficits that can't be readily managed, and all that stuff. The thesis of the iTulip folks is something called "Ka-Poom theory" (I kid you not). What it is, basically, is that the current crisis will play itself out first with deflation or disinflation (the "ka") in which people sit on much of the stimulus money rather than spending it, followed by major inflation when the economy does recover and people start spending the cash they've been hoarding. I'm not so sure it will play itself out like that myself, though; most of the hoarding is being done by investors, so it will likely just go into long term investments rather than circulating freely through the economy. The situation has to be handled carefully, though.

It's worth noting that the current run the TSX is on is partly explicable by a flight from US dollars. The TSX is quite gold-heavy, and even setting that aside the Canadian dollar is seen by many investors as a potential safe haven, making Canadian-denominated stocks a good investment anyway. And the American dollar is making a lot of folks nervous:

During a recent visit to Tokyo, Timothy Geithner, the secretary of the US treasury, said that a strong dollar is "very important" to Washington, even as the American currency continued its noticeable depreciation.

This is a very curious statement as it seems to indicate that the US treasury is going to defend the dollar from any further slide in the near future. But this is highly unlikely as the US treasury does not have a history of intervening in foreign exchange markets.

It is true that the treasury's Exchange Stabilisation Fund (ESF) can be used to prop up the dollar, but it has never really been used for that purpose. The ESF, which right now has about $50bn, was originally created by the Roosevelt administration in the early 1930s to deal with currency upheavals as the Gold Standard was being dismantled.

The ESF was used only once in international financial markets and that was to defend the Mexican peso in 1994.

Therefore, the treasury's use of the ESF to defend the dollar can be ruled out.

In any case, it would take a lot more than $50bn to stabilise the greenback if there were to be a speculative attack on the dollar, like there was against the British pound in 1992.

Source. I wish the article went into more detail about why the Treasury won't use the ESF; the author implies that there's more factors at work than the fact that the fund isn't big enough to stave off the worst case scenario. Indeed, if it's no good for that, the sensible thing for the US to do would seem to be to use the fund now, to shore up the dollar before there's a big speculative attack.

The country that holds most of the cards, of course, is China. Thing is, they can't just dump their dollars all at once, or those dollars will depreciate before they can get rid of them all. So it's hard to say how this will play out.

If the US dollar does collapse in a big way, the effects on the world economy will be dramatic. Since they import so much energy, they'd be forced to buy that energy with depreciated dollars, which would limit their ability to buy cheap stuff made in China (or Canada, for that matter). But for that reason, a lot of people both in the US and elsewhere will pull out all the stops to avoid such an outcome. We'll have to see how things go...

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.

Since when did the right like to nationalize corporations?

When they realized there was no choice, it seems:

American International Group will get an $85 billion bridge loan from the federal government in exchange for an 80 percent stake in itself, sources have told CNBC.

Sources said the loan, which will allow AIG to avoid bankruptcy, will be secured and include incentives for quick asset-sales by AIG.

Government warrants for most of AIG’s equity will severely dilute existing shareholders.

AIG has been racing the clock to avoid a bankruptcy filing on Wednesday, making efforts to work out a deal with the Federal Reserve to shore up its finances.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke met with Senate and House leadership Tuesday night to discuss how to assist AIG, sources said.

The Fed's financial aid to the troubled insurer marks a reversal of its decision on Monday to refuse a bridge loan to AIG.

The Fed met with the company's advisers throughout the day and came to a better understanding of what is needed to help the company through its current crisis, people familiar with the negotiations told CNBC.

From here, via The Outback Oracle at iTulip. Don't get me wrong; there may not have been any alternative. It's funny, though, how laissez-faire capitalists are suddenly willing to socialize losses. Of course, if and when AIG returns to profitability, the US government will probably sell it off rather than keep it as a source of revenue. After all, it wouldn't do to have an example of how continued public ownership could be good. Instead, the American taxpayers, having absorbed the enormous losses, will be spared the indignity of actually turning a profit later.

In any case, one does have to ask one thing. How long can they continue doing this? If they keep bailing out every company that's too big to fail, they'll have to do one of three things -- raise extra revenue through taxation, cut back on spending on other things (such as their military adventures overseas) or run the printing presses like crazy. The first two would be the best policy of course, but somehow I suspect the third will be the way they actually do it. Of course, such a policy is insanely inflationary, but they may be hoping that other countries will devalue their own currencies so the Yanks can keep buying what they're selling. Unfortunately for them, this won't continue indefinitely.

And, in spite of everything, the prices of gold, silver, and other traditional hedges against inflation remain fairly reasonable. If you can afford to, consider buying them while you can; things might get exciting quite soon. Like, any time after the 4th of November.

A way of dealing with the food crisis...

Not a very appetizing one, though:

Rat meat has become such a popular alternative to other dearer meats in Cambodia that its price has increased fourfold.

As inflation pushes the price of beef beyond the reach of the poor, increased demand for rat meat has pushed up rodent prices. A kilogram of rat meat now costs 5,000 riel (69p) compared with 1,200 riel last year. Spicy field rat dishes with garlic are increasingly on the menu as beef costs 20,000 riel a kilo.

Officials said rats were fleeing to higher ground from flooded areas of the lower Mekong Delta, making it easier for villagers to catch them.

"Many children are happy making some money from selling the animals to the markets, but they keep some for their family," said Ly Marong, an agriculture official. "Not only are our poor eating it, but there is also demand from Vietnamese living on the border with us."

He estimated that Cambodia supplied more than a tonne of live rats a day to Vietnam.

From here.

The peg precipice

You know all those countries (especially oil producers) who have their currencies "pegged" to the US dollar? Well, this is starting to be a problem for them:

Pegged exchanged rates prevent those countries from raising interest rates to keep inflation under control. Instead, to maintain the exchange rate, they have to match U.S. monetary policy. Interest rates in the United States are highly stimulative, however, designed for an American economy struggling to avoid a recession - not a Gulf country whose coffers overflow with oil money.

So emerging market demand continues unabated, even encouraged, further exacerbating the inflation problem that governments around the world are scrambling to contain. Qatar's inflation is running at about 14 per cent. Egypt is at 19 per cent.

The average for the region just two years ago was a mere 2 per cent.

From here. Furthermore, Saudi Arabia is experiencing serious inflation; depending on who you believe it is anywhere from 3.4 to 10.5%. I'm more inclined to believe the latter, myself. The thing is, if this starts really hurting the citizens of these countries, they might unpeg their currencies, in which case things could get very exciting indeed:

"If several dollar-pegged currencies were revalued, we could expect to see some panic selling in the U.S. dollar, further destabilizing the global economy," she said.

Such speculation has prompted politicians in the United States and the Gulf to frequently deny this would occur.

So what happens then? Well, I suspect that America's ability to buy oil would be severely compromised. It's not hard to guess what that would mean. It would get pretty awkward for us as well, given our dependence on the US market. Just how it would play out is anyone's guess (plenty of speculation happening here if that's your thing.

Inflation in Venezuela

You may or may not know that Venezuela has a very high inflation rate (31.4% according to this site). Predictably, many people (such as those charmers at Small Dead Animals) blame Hugo Chavez and socialism for this state of affairs; on the other hand when I first heard about this I immediately found myself wondering if the CIA was printing up counterfeit Venezuelan banknotes and dumping them into the local economy to destabilize things. However, the truth is actually much more mundane than either the right wing fucks or my own tinfoil-capped head had thought, as this New York Times story from 1989 illustrates:

Inflation in Venezuela will rise by 65 percent to 70 percent this year, almost double last year's increase in the cost of living, the Planning Minister, Miguel Rodriguez, said today. The rate for 1989 so far, 52.7 percent, may slow down in the second half of the year as the Government's austerity program takes effect, Mr. Rodriguez added. Venezuela, which had one of Latin America's lowest inflation rates for many years, saw its cost of living rise by 35.5 percent last year after increasing 40.3 percent in 1987.

Thanks to Robert at My Blahg for the link. So really, the Chavez administration is actually doing a better job of managing inflation than the old regime. Not that the right wingers are going to acknowledge this, of course.