This isn't anything to panic about? This is the threshold of a potential economic disaster. It is great that Feeland seems to be using an enigma machine to speak to business leaders in the country, but her change of tone might be too little too late. A shift to short term bonds to cover our immediate debt obligations is going to put more upward pressure on interest rates which already have upward pressure without even considering bond sales. Most of my associates do not want to touch bonds right now because of the low interest rates and the potential for inflation. It is only going to get worse as time goes on and we do not have the innovation or foreign investment levels in our economy to deal with the slow down of debt creation. If by "isn't anything to panic about" you mean I shouldn't be setting my hair on fire just yet, well I should never be in a position to feel compelled to do that. The time to panic was months and months ago, I think this is all too little too late now.
I ran across an interesting column by Freeland back in 2011, talking about the damage being done by the slow and grinding recovery in the US from the 2008 financial crash - as well as the need for a credible fiscal plan, but with the date deferred until after full recovery. Given the very similar situation we're in today, where the question is when to start fiscal tightening, it makes for interesting reading. https://www.nytimes.com/2011/08/12/us/12iht-letter12.html
On long-term economic damage, and the importance of getting back to full employment rapidly:
"The sort of metaphors we tend to reach for, to borrow one from the White House, are of the car that was driven into the ditch. It is unpleasant to be stuck in the mud, and pushing it out is hard work, but once we are back on the road it will be full speed ahead.
"The better, but grimmer, comparison is to infant malnutrition. Even if that child grows into a well-fed adult, her early experience of deprivation will do lasting damage.
"That ugly image is particularly apt because the hardest hit will probably be young people. Mr. Peck spoke to Lisa Kahn, a Yale economist, who found that getting your first job during a deep recession meant a starting salary 25 percent lower than during a boom, and an income 10 percent less 17 years later. Even mid-career, the recession generation not only takes home a thinner paycheck, it is lower down the corporate hierarchy and more professionally timorous."
On having a credible fiscal plan:
"Like Mr. Peck, Mr. Rubin believes that an agreed plan to close the deficit in the medium term would actually make a job-creating stimulus program in the short term both more feasible and more effective.
"'You can put in place a serious fiscal program, which would generate job-creating confidence, but defer the implementation date,' he said. 'In that context you could do a fiscal stimulus, and at much less risk of it being materially offset by an adverse effect on confidence.'
"We need to create jobs today — and commit to tightening our belts when the economy starts to recover. It is a simple plan that makes sense to a lot of us. But in the scared, beggar-thy-neighbor world Mr. Peck describes, the public-spirited middle ground this approach embodies may no longer exist."
With every government in the world borrowing at record rates, it was entirely predictable that lenders would start to demand more for their money. It's good to see that at least some of the Liberals are taking notice, although I'm hoping to see some confirmation in the throne speech and budget. Prime Minister Trudeau doesn't always seem to listen to his ministers, and doesn't like taking no for an answer. I'd also hope this will draw attention to the flawed premise of MMT, which posits that it's possible to spend large amounts of money through borrowing without triggering hyperinflation or repelling lenders. Probably not, though.
and as i read this article, tiff macklem is on the screen next to me articulating the end of QE (aka, central bank purchasing of secondary market debt) and signalling higher interest rates (aka, bond yields) early next year...clearly, the BOC has gotten the memo too
and if it was anything like macklems prepared remarks or answers in the press conference it probably sounded something like "inflation is here, its not transitory, our only job is to deal with inflation, and we have to deal with inflation now, act accordingly"
Canada can't afford not to spend on defence. We already are considered users and deadbeats. With the way the world is going this can't be avoided. I guess cradle to grave benefits might actually have to be means tested now
Canada is great at spending on Defence, much less so at spending on defence. The Feds treat Defence as yet another social engineering tool, directing procurement to allegedly struggling companies in regions where votes are cheap to buy.
The entitled are entitled to their entitlements. The shipyard situation and now with the CF-18 replacement program and Boeing is just the latest manifestation of that.
Pacifism isn't the flex that you think it is. The world is moving towards a more conflicting future, and Canada is a bit player on the world stage that can do nothing about it. If Canada, being as underproductive and overindebted as we are, can't at the minimum fulfill our treaty obligations and maintain control of our territory, which arguably we can't, we will be run over.
Do you want Canada to be a glorified colony of the major powers or an independent nation controlling its own destiny?
I guess one needs to think of what you'd group under "national defense" considerations. Never mind buying new planes/subs (we need to move on from the star-crossed Victoria/Upholder class)....the last 19 months have shown that from a strictly personnel point of view, our forces are woefully understaffed and stretched to the limit. Part of DND's mandate is "Aid to Civil Power". While the CF personnel dispatched for public-health reasons performed well, there's absolutely no way they could have coped with a more virulent or deadly virus (say, something with a 10% mortality rate, rather than 0.05%).
With China asserting itself more in the Pacific theatre (Taiwan, the Spratly's and other islands in the South China Sea), the US is looking to its allies to up their game. Until we concretely demonstrate that we're serious about this, Canada will become more dependent on the US and other allies for security...not a desirable position if we wish to assert our sovereignty.
My gosh man, don't you remember the lessons from WW2? Nobody likes blowing billions on war machines (well, except the people who build them). The democracies were caught with their pants down by Hitler, even when they could see what was coming, because nobody wanted to get caught up in being militaristic. Nobody wanted another Great War. When you've got one side being highly militaristic and threatening (like China) you have to match strength with strength. Otherwise you get flattened. Chamberlain tried to appease Hitler by handing over the Sudetenland, in effect all of Czechoslovakia. All it did was increase his appetite. China now is seriously threatening to invade Taiwan. Are you willing to hand Taiwan, another democratic country, to Xi on a platter so you can feel superior about not being militaristic?
If you recall, it was M.A.D. (mutually assured destruction) that prevented the Soviet Union from trying to grab all of Europe and anywhere else in the world it could. Yes, as horrendous and terrifying as MAD was, it gave our generation in Canada a lifetime of peace and security. If we want to maintain peace, Russia and China need to know that our power matches theirs, and they will pay heavily for starting a war. That unfortunately, is the way to prevent war when you are dealing with powerful dictatorships that have no respect for democracy and want to extinguish it. Were they to free their own countries and create true functional democracies that recognize neighboring countries right to independently exist, then the threat is gone and the world can get serious about mutually reducing armaments on a major scale. Sad but true, and I see no hope of that happening in what's left of my lifetime.
What I recall, is that when the Soviet Union fell, and we got access to a lot of archives, including KGB and military archives, when generals wrote memoirs - there was in fact no plan to do a Tom Clancy novel of any kind. Soviet military preparations were nearly all defensive. The gazillion tanks ('their conventional forces are three times as large as ours') were WW2 relics sitting rusting.
Of course they will pay heavily for starting a war. You write as if MAD were in the past, but it's still hanging over our heads - and theirs - every single day.
The Soviet model was the same as the one they would have used against the Nazi's. Throw cannon fodder at the enemy and then attack to utterly destroy them. What they were missing in technology would have more than been replaced with bodies.
Oh yes, MAD still is in play. It did (sort of) take a hiatus when the Soviet Union collapsed, but its still in play. Our hopes of Russia adopting democracy with open arms was quickly crushed once Pukin took control. I don't buy the premise that they had no aspirations to expand their control or zone of influence with armies (remember Afganistan?). And yes they likely did have WW2 rust buckets in quantity, but they also had oodles of modern equipment too. Their ability to maintain equipment nose dived as the economy did the same and collapse was in the cards.
This isn't anything to panic about? This is the threshold of a potential economic disaster. It is great that Feeland seems to be using an enigma machine to speak to business leaders in the country, but her change of tone might be too little too late. A shift to short term bonds to cover our immediate debt obligations is going to put more upward pressure on interest rates which already have upward pressure without even considering bond sales. Most of my associates do not want to touch bonds right now because of the low interest rates and the potential for inflation. It is only going to get worse as time goes on and we do not have the innovation or foreign investment levels in our economy to deal with the slow down of debt creation. If by "isn't anything to panic about" you mean I shouldn't be setting my hair on fire just yet, well I should never be in a position to feel compelled to do that. The time to panic was months and months ago, I think this is all too little too late now.
I ran across an interesting column by Freeland back in 2011, talking about the damage being done by the slow and grinding recovery in the US from the 2008 financial crash - as well as the need for a credible fiscal plan, but with the date deferred until after full recovery. Given the very similar situation we're in today, where the question is when to start fiscal tightening, it makes for interesting reading. https://www.nytimes.com/2011/08/12/us/12iht-letter12.html
On long-term economic damage, and the importance of getting back to full employment rapidly:
"The sort of metaphors we tend to reach for, to borrow one from the White House, are of the car that was driven into the ditch. It is unpleasant to be stuck in the mud, and pushing it out is hard work, but once we are back on the road it will be full speed ahead.
"The better, but grimmer, comparison is to infant malnutrition. Even if that child grows into a well-fed adult, her early experience of deprivation will do lasting damage.
"That ugly image is particularly apt because the hardest hit will probably be young people. Mr. Peck spoke to Lisa Kahn, a Yale economist, who found that getting your first job during a deep recession meant a starting salary 25 percent lower than during a boom, and an income 10 percent less 17 years later. Even mid-career, the recession generation not only takes home a thinner paycheck, it is lower down the corporate hierarchy and more professionally timorous."
On having a credible fiscal plan:
"Like Mr. Peck, Mr. Rubin believes that an agreed plan to close the deficit in the medium term would actually make a job-creating stimulus program in the short term both more feasible and more effective.
"'You can put in place a serious fiscal program, which would generate job-creating confidence, but defer the implementation date,' he said. 'In that context you could do a fiscal stimulus, and at much less risk of it being materially offset by an adverse effect on confidence.'
"We need to create jobs today — and commit to tightening our belts when the economy starts to recover. It is a simple plan that makes sense to a lot of us. But in the scared, beggar-thy-neighbor world Mr. Peck describes, the public-spirited middle ground this approach embodies may no longer exist."
With every government in the world borrowing at record rates, it was entirely predictable that lenders would start to demand more for their money. It's good to see that at least some of the Liberals are taking notice, although I'm hoping to see some confirmation in the throne speech and budget. Prime Minister Trudeau doesn't always seem to listen to his ministers, and doesn't like taking no for an answer. I'd also hope this will draw attention to the flawed premise of MMT, which posits that it's possible to spend large amounts of money through borrowing without triggering hyperinflation or repelling lenders. Probably not, though.
Very interesting. Maybe Freeland, if nobody else in that disgusting party, actually remembers Paul Martin. Who wudda thunk it?
I find that people (at least here in SK) consistently underestimate Chrystia Freeland.
Confirmation of my point.
Maybe we should ask her to blink twice and glance to the right every 10 seconds if she’s been taken hostage?
and as i read this article, tiff macklem is on the screen next to me articulating the end of QE (aka, central bank purchasing of secondary market debt) and signalling higher interest rates (aka, bond yields) early next year...clearly, the BOC has gotten the memo too
I suspect they wrote the memo.
and if it was anything like macklems prepared remarks or answers in the press conference it probably sounded something like "inflation is here, its not transitory, our only job is to deal with inflation, and we have to deal with inflation now, act accordingly"
Good call!
Canada can't afford not to spend on defence. We already are considered users and deadbeats. With the way the world is going this can't be avoided. I guess cradle to grave benefits might actually have to be means tested now
Canada is great at spending on Defence, much less so at spending on defence. The Feds treat Defence as yet another social engineering tool, directing procurement to allegedly struggling companies in regions where votes are cheap to buy.
The entitled are entitled to their entitlements. The shipyard situation and now with the CF-18 replacement program and Boeing is just the latest manifestation of that.
Pacifism isn't the flex that you think it is. The world is moving towards a more conflicting future, and Canada is a bit player on the world stage that can do nothing about it. If Canada, being as underproductive and overindebted as we are, can't at the minimum fulfill our treaty obligations and maintain control of our territory, which arguably we can't, we will be run over.
Do you want Canada to be a glorified colony of the major powers or an independent nation controlling its own destiny?
I guess one needs to think of what you'd group under "national defense" considerations. Never mind buying new planes/subs (we need to move on from the star-crossed Victoria/Upholder class)....the last 19 months have shown that from a strictly personnel point of view, our forces are woefully understaffed and stretched to the limit. Part of DND's mandate is "Aid to Civil Power". While the CF personnel dispatched for public-health reasons performed well, there's absolutely no way they could have coped with a more virulent or deadly virus (say, something with a 10% mortality rate, rather than 0.05%).
With China asserting itself more in the Pacific theatre (Taiwan, the Spratly's and other islands in the South China Sea), the US is looking to its allies to up their game. Until we concretely demonstrate that we're serious about this, Canada will become more dependent on the US and other allies for security...not a desirable position if we wish to assert our sovereignty.
My gosh man, don't you remember the lessons from WW2? Nobody likes blowing billions on war machines (well, except the people who build them). The democracies were caught with their pants down by Hitler, even when they could see what was coming, because nobody wanted to get caught up in being militaristic. Nobody wanted another Great War. When you've got one side being highly militaristic and threatening (like China) you have to match strength with strength. Otherwise you get flattened. Chamberlain tried to appease Hitler by handing over the Sudetenland, in effect all of Czechoslovakia. All it did was increase his appetite. China now is seriously threatening to invade Taiwan. Are you willing to hand Taiwan, another democratic country, to Xi on a platter so you can feel superior about not being militaristic?
If you recall, it was M.A.D. (mutually assured destruction) that prevented the Soviet Union from trying to grab all of Europe and anywhere else in the world it could. Yes, as horrendous and terrifying as MAD was, it gave our generation in Canada a lifetime of peace and security. If we want to maintain peace, Russia and China need to know that our power matches theirs, and they will pay heavily for starting a war. That unfortunately, is the way to prevent war when you are dealing with powerful dictatorships that have no respect for democracy and want to extinguish it. Were they to free their own countries and create true functional democracies that recognize neighboring countries right to independently exist, then the threat is gone and the world can get serious about mutually reducing armaments on a major scale. Sad but true, and I see no hope of that happening in what's left of my lifetime.
What I recall, is that when the Soviet Union fell, and we got access to a lot of archives, including KGB and military archives, when generals wrote memoirs - there was in fact no plan to do a Tom Clancy novel of any kind. Soviet military preparations were nearly all defensive. The gazillion tanks ('their conventional forces are three times as large as ours') were WW2 relics sitting rusting.
Of course they will pay heavily for starting a war. You write as if MAD were in the past, but it's still hanging over our heads - and theirs - every single day.
The Soviet model was the same as the one they would have used against the Nazi's. Throw cannon fodder at the enemy and then attack to utterly destroy them. What they were missing in technology would have more than been replaced with bodies.
Oh yes, MAD still is in play. It did (sort of) take a hiatus when the Soviet Union collapsed, but its still in play. Our hopes of Russia adopting democracy with open arms was quickly crushed once Pukin took control. I don't buy the premise that they had no aspirations to expand their control or zone of influence with armies (remember Afganistan?). And yes they likely did have WW2 rust buckets in quantity, but they also had oodles of modern equipment too. Their ability to maintain equipment nose dived as the economy did the same and collapse was in the cards.