Sunday, January 31, 2016

Negative Interest

Is Canada next in line to enter That Bizzaro World?


Wondering why the stock market has gone through the roof this past week? Here on the west coast of BC all we have to do is look across the ocean to Japan. Japan has just announced they will join The European Central Bank, The Swiss National Bank, along with the central banks in Denmark and Sweden in slashing bank interest rates into negative interest territory. An article in the Financial Post entitled (Canada is flirting with a bizzaro world of negative interest rates) John Shmuel warns us that Canada could be next in line to embrace this banking anomaly.  He writes: “Bank of Canada Governor Stephen Poloz discussed negative rates at a luncheon in Toronto last month, putting it on the radar here.”

Shmuel also cites Moshe A. Milevsky (Professor at the Schulich School of Business at York University). “What you might see happening is a negative interest rate masquerading as higher fees” Milevsky said.  “No bank in their right mind would tell a consumer, give us your hundred dollars and we’ll give you 95.  That will never happen”.  But whose idea was this, anyway, this negative interest rate business?

It seems to have come from European bankers, having indulged in many Quantitative Easings (QE’s) to no avail in quick-starting the entire Western economy (how could it, when printing presses run overtime to pour money into banks and the banks just sit on the money).  Something more needs to be done to get the larger banks to make more loans to businesses and customers.  So, the central banks will charge the other banks money for the privilege of parking their money instead of loaning it out.  In turn the regular banks that we know in our communities will pass on the fees to us, the consumers.  Instead of a miniscule amount of interest money being paid by the banks to people with banking accounts, we will be forced to pay the banks for keeping our deposits at all.  And that’s the big goal.  Then people will start spending their money instead of paying to have it stored in a bank and voila, the economy will bloom.  But will it?  More next time.

Monday, January 04, 2016

 Donald Trump and Canadian Fortunes

In the US, polls show that the main followers of Donald Trump are white, middle aged and under educated men. Working-class people. But I have enormous respect for working-class people.

Because it was working class people, both black and white, and immigrants from all over the world  who created the enormous capital wealth in the US and Canada. These men worked like beasts in the mines, in the forests, on railroads and fishing boats, on oil rigs and in the smokestacks.  And now a few generations later these men feel that while they and their ancestors built this wealth, the wealth holders have turned their backs on them. And they have.  The wealth holders, and most of their governments, are more concerned with keeping the wealth holders happy than the welfare of working people.

Donald Trump points his finger at Muslims, Hispanics and women.  And even the women in his 
audience applaud his disgusting sexist remarks.  It’s eerie.  But the women can be a threat, too, to their own men’s sense of identity, because the women are usually working, even if at some below poverty wage job.  But we have to try to understand the women’s fears. If their families are being threatened economically, or think they will be, and Trump promises to fix it, they don’t care about feminism.  What is political correctness to them if they see other foreign men who they think are taking (or will take) their husband’s and son’s jobs while they are trying to exist on their own measly below poverty wages?

I think Germany mainly turned to Hitler because he promised to put men to work and also convinced people that the Jews were stopping this.   If we will remember, Hitler rose to power when the country was desperately poverty stricken.  As the winners of World War One, the Allies demanded huge amounts of money from Germany in war reparations. There was hunger in Germany, and massive malnutrition.  Poverty, and fear of it, is always the main driver and breeder of racism. And if times get really tough now, many Canadians without jobs or worried about their jobs, may also sink into racism against any foreign group.  But I think Justin Trudeau, and the people with him, will do their very best to prevent this from happening.  Let’s give him our support.

Wednesday, November 18, 2015

To Justin Trudeau: “Hang in There, Hoss! Hang in There”

Listening to CBC radio and television lately I get a queasy feeling that there is a subtle message in the reporting and commentary that is seeking to influence Canadians, along with our Prime Minister, to agree to renege on Trudeau’s promise to get our fighter planes out of Syria.  I hope Trudeau doesn’t dither on his promise to do this.  After the Paris massacre our Prime Minister is facing lots of pressure internationally, subtle and otherwise, as well as some panicked Canadians to join a coalition of more war.  We should all encourage our Prime Minister to resist, at least those of us want peace, and to hold steady in his promises. And because my own political leanings were formed in Louisiana where I was raised, I usually find myself searching for connections In Canadian society.  Canada has a history of socialist thinking (mostly coming from the NDP and early labour unions) which the US doesn’t. But when it comes to encouraging politicians to stay on a chosen course, Louisiana political scenes of the fifties pop into my mind.

Louisiana politics at that time was crazy, and still is. But we had a governor then named Earl Long who was very progressive for his time; he was socialist and anti-racist in his thinking.  He was also well, colourful.  Earl Long drank too much and made no secret of his relationship with a stripper (Blaze Star) although he had an estranged wife who openly despised him, probably with good reason.  But Blaze followed Earl Long in his campaign for re-election (he wanted her there) almost always standing in the back of a pick-up truck ready to cheer on a man whom she obviously adored. Not that the crowd needed much prodding. Long’s constituents were mostly poor people. And “poor” described the state of Louisiana in those days.


 Long had already pushed through many reforms such as transportation, health, welfare, and new schools for both white and black kids (the state was still segregated then and many rural black kids had previously had no schools at all to speak of).  So Earl Long, and his brother before him, Huey Long (previous governor and state senator) who was assassinated, had already made the moneyed people of Louisiana (Standard Oil) who sucked the state dry by tax loop-holes, pay for them. In doing so, Earl Long had earned many powerful enemies. But Earl was re-elected in spite of his drinking and open love for Blaze Star.  However, the scenes that stick in my mind are these:

The huge crowds that swarmed to hear Earl Long speak in small towns and large cities didn’t seem to care that he drank too much and loved a stripper, what they cared about was that he was fighting for them.   African Americans also attended his rallies and stood around the back of the crowds.  They couldn’t vote, or even try to, without fear of being lynched but they knew Earl Long fought for them, too, and they wanted to see him.  If Long showed signs of fading a bit in his oratory during a firey speech Blaze Star would shout standing from the back of her pick-up truck: “Hang in there, Hoss!  Hang in there!” The crowd would roar with laughter and then echo Blaze’s call.  Renewed, Earl Long would go on for at least another half an hour while the people listened, mesmerized, full of hope.

Okay, so Canadian politics doesn’t have quite the same face as Louisiana politics of fifty years ago, but one thing is the same.  When a politician anywhere thinks he or she is doing the right thing politically and citizens agree, we should say so.  Politicians need these same kinds of validation from the people, these same kinds of encouragement, these shouts of understanding when the going gets tough.  Not just in elections.  And selected polls don’t cut it, either.  

Because there are those who are already saying “no, no, you can’t do this, Justin, you can’t bring the war planes home, we’ve got to go to war for political reasons.” But he can.  And some are saying, “no, Mr. Trudeau, you can’t bring all those refugees here, we don’t know who they are.”  But he can. And we can.  And we can, those of us who feel it, stand up and yell collectively some version of…”Hang in there, Hoss! Hang in there!”