Wednesday Night #1637

Written by  //  July 17, 2013  //  Wednesday Nights  //  No comments

Quotes of the evening
Investment policies are in the east, not westward-looking.
There are two important political things in government, namely, the importance of money and the importance of intelligence.
The U.S. government is not governing.

The world is in flux, geopolitically, geoeconomically and in terms of geophysical change. Changes in the environment trigger different things in different places. The relative stability, previously taken for granted, can no longer be counted upon. The planet is currently experiencing such factors as geographical change in addition to climate change.

The rise of China as a world power is changing the geopolitical map. There is a projection of a circle of power around China not previously perceived, mainly centred on petroleum and the presence of great oil reserves in the South China Sea.
China is perceived as expansionist, mainly in the search for acquisition of resources including water. That country`s expanding naval power goes well beyond the protection of trade. It is a naval power, but at least at present, neither that country nor any other is prepared to pull the trigger. Culturally, the Chinese plan very long term and historically, they have good reason to feel paranoid about other nations nibbling away at them, but they now possess the power to do something about it. Part of the equation is the unknown effect of the increasing closeness between China and India on possible exacerbation of problems with Pakistan.

Monetary policy has been the major driver of the market`s rise and will ultimately be a driver of its decline. It is uncharted territory and difficult to navigate; bond yields spiked suddenly in June, then suddenly declined. The energy market has been dropping. It is predicted that U.S. growth will improve next year.
In Canada, the future of labour is bleak. A foreshadowing of the future is indicated by the fact that more than one in eight employees here is employed in the retail sector. The government is increasing liquidity in the hope that people will start spending money to quick-start the economy, but the individual debt load is already considered high. As for the frequent response of the government spending money on infrastructure, it would be necessary for government to borrow it in order to spend more. With the declining deficit, Public-Private partnerships could possibly be entered into more frequently.

P R O L O G U E
Jim Mylonas has returned from holidays and BCA promptly published the July 2013 Geopolitical Strategy report which focuses on Emerging Markets (their decade is over); the influence of geopolitics on inflation (‘inflation is a red herring’); political risk in Europe and equity investment opportunities (yes to both); quick takes on the situation in Egypt and the possible effects of Edward Snowden’s revelations on EU-US trade talks; and concludes with a look at the forthcoming German elections. Jim will join us and looks forward to discussing any/all of these topics.

Cleo Paskal’s latest piece bears the subtitle of Why the “3 Geos” [the geoeconomic, geopolitical and geophysical] create new global paradigms – recommended reading for all.

Canada

The Cabinet Shuffle is top of the news-cycle – at least for the next 24 hours. Most commentators have noted that the Front Bench continues to be filled by white males, with a number remaining in their previous ministeries (Flaherty, Baird, Fast, Oliver, etc.). While many pundits had not yet sharpened their knives or pencils, Monday night’s special At Issue  was called in to analyse the shuffle and offers some interesting interpretations, especially of the elevation of [super obnoxious] Pierre Poilievre to Minister of State (Democratic Reform); hint, it all has to do with the fight with Elections Canada.

The Foreign Policy Research Institute has published a long piece by David Jones, Canada’s Midterm Blues: The Harper Government Hits Rocks about their June fact-finding trip.It is always good to know how others perceive one.

Of our gleanings of the week, one of the most important is George F. Will’s: The conservative case for the long-form census His conservative credentials are impeccable and even though he directs his argument to the U.S. audience, he makes a very strong case for the usefulness of Canada’s long-form census. It’s probably useless to flog this poor horse, as we cannot envision the Harper government reversing its decision, but still worth mentioning over and over again.

Alberta has announced new flood-proofing rules  which sound eminently sensible. We could only hope that similar ones might be implemented across the country and are prepared to make the case for a national policy, given the costs that are borne by the federal government and Canadian taxpayer in the wake of such disasters. There will surely be more details, but meantime The Calgary Sun gives a quick round-up of the essentials:

  • If you live in a floodway, where the flooding is the worst and your home is totalled, you can take the government money and relocate.
  • The floodway affected by last month’s southern Albertan floods, is said to be as low as 100 homes, mostly in High River.
  • Or you can take the money and rebuild in the floodway but won’t get a taxpayer dime when you’re hit in the next flood.
  • If you’re in a floodway with a house needing repairs and you choose to use taxpayer funds to fix your digs it’s on your tab in the next flood.
  • If you’re in the flood fringe, still a hazard but outside the floodway and with more homes than in the actual floodway, you will get extra dollars for approved flood proofing to the standard of protection against a flood with a 1% chance of happening in any given year.
  • If you do the flood proofing or are protected to the same standard by community measures, then you’re covered against the big flood next time around.

Response to the Lac-Mégantic tragedy continues to be heart-warming and characterized by a singular degree of cooperation between different levels of government, with the notable exception of the appearance of MM&A  chairman, Edward Burkhardt whose behaviour was  a text-book study in crisis management how-not-to and prompted Forbes  (How Edward Burkhardt Is Making The Lac Megantic Accident Even Worse) to comment, “he is clueless as well as careless, not to mention disrespectful, in handling a crisis of this magnitude.”

Meanwhile, the debate about the safety of rail versus pipeline transport of oil continues.

The U.S.
Despite all the rumblings about political dysfunction in Washington, the focus has been on the George Zimmerman acquittal and public reaction. Was it a racist decision on the part of the jury? One of the most reasoned pieces we have read is What You May Not Know About the Zimmerman Verdict: The Evolution of a Jury Instruction – it explains a lot. Meanwhile, one of the most poignant statements we have seen is “

The rest of the world, including Egypt, continues to exist in various degrees of turmoil which we may not address this week unless (as is highly likely) there is a new development that begs for attention.

Water
Peak oil has often been a WN topic, however, the recent article in The Guardian by Lester Brown of the Earth Institute, points to a far more serious threat to the world’s food security.   ‘The real threat to our future is peak water’
As population rises, overpumping means some nations have reached peak water, which threatens food supply, says Lester Brown
We drink on average four litres of water per day, in one form or another, but the food we eat each day requires 2,000 litres of water to produce, or 500 times as much. Getting enough water to drink is relatively easy, but finding enough to produce the ever-growing quantities of grain the world consumes is another matter.

Speaking of food, a good news story about a different approach to ensuring well nourished children (both physically and emotionally) that we would endorse everywhere. Wonderful initiative by former Sauvé Scholar Ed Vainker, now headteacher at the Reach academy in Feltham, west London
School dinners: pupils given a taste of quality
Chips, over-boiled vegetables and packed lunches are banned from the Reach Academy free school, where the head eats with the pupils
(The Guardian) In their place are Moroccan lamb tagines and roasted vegetables, Thai curries and salade niçoise, with strawberry trifle or watermelon for dessert. And all for £2 a day.

Oddities for your entertainment

Canadian professor created Kryptonian language for Man of Steel
After years teaching a course that examines constructed languages such as Star Trek’s Klingon and Avatar’s Na’vi, Christine Schreyer got the unique opportunity of creating a new language herself. In 2011, the assistant professor of linguistic anthropology at the University of British Columbia’s Okanagan campus was invited by the producers of the Hollywood movie Man of Steel to develop Kryptonian, the language spoken in Superman’s home planet.

Parrot removed from Montreal Biodome after learning too much English
The Montreal Biodome’s Scarlet macaw will be deported to the Toronto Zoo next Friday after she only spoke English during a government inspection.  … Polly’s trainer, Jacques Delorme tried to take matters into his own hands by creating a French immersion course in a bid to stave off her deportation. “Every night, we made Bouton listen to ‘Star Académie’ and audiobooks about Lucien Bouchard,” Delorme explained. “However, these efforts were in vain.”
Despite some pretty obvious clues that this was a send-up of all the recent OQLF stories, some 650 people signed a (bogus) petition to keep Bouton at work in Montreal. We also heard from a couple of Francophones who believed this was more Quebec bashing – sigh!

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