Sunset Sketches of a Little Country

...Yet depreciation may be the only remaining hope ...

2012-01-16T11:05:00.001-05:00

Title a bit misleading ...

Caballero, Giavazzi: Parity May Be Euro’s Last Chance
from Bloomberg Jan 15/12
By Ricardo Caballero and Francesco Giavazzi Jan 15, 2012 7:01 PM ET

The euro has dropped about 13 percent against the dollar since the sovereign-debt crisis hit Italy seven months ago. To a large extent, the decline reflects the increased likelihood of an Italian default, which would destroy the single currency.
Yet depreciation may be the only remaining hope for the euro’s survival, as long as it is carried out through swift and coherent policy support.
Since last summer, Italy has implemented the largest fiscal consolidation of the past 15 years, entailing an increase in the primary budget surplus of more than 6 percent of gross domestic product over three years. But because such a large fiscal contraction will happen mostly through higher taxes, investors rightly worry that the country is about to enter a deep recession. If that were to happen, the consolidation would fail.
A weaker euro could help avoid that outcome and make fiscal consolidation a success. For the euro area as a whole, a currency depreciation wouldn’t have a large direct impact, since most trade is within the area. However, that isn’t the case with Italy: 55 percent of Italian exports are to countries outside the euro area, particularly Switzerland, the U.S., Russia and emerging economies.
A 15 percent depreciation of the euro -- bringing it close to parity with the dollar -- would give a big boost to Italian exports, which would compensate for the contraction of domestic demand.
Restoring Growth
In 1992, when Italy suspended its participation in the European Exchange Rate Mechanism, the country implemented a similar fiscal contraction. This was accompanied by a 20 percent devaluation of the lira, limiting the damage to the economy. In the following three years, growth averaged 1.4 percent per year.
Of course, Italy has much more to do to make its economy competitive and to reduce its debt burden. But any reforms -- labor-and-product market liberalizations, a working judiciary, a better bureaucracy -- would take a long time to show their effects, even if adopted immediately. That would be too late to avoid a recession that has already started and that in all likelihood will be much more severe than official predictions.
This isn’t the first time that concerns about a possible sovereign insolvency inside the euro area have weakened the single currency. A similar event occurred at the peak of the Greek crisis: In just a few months (November 2009 to May 2010), the euro fell about 22 percent against the dollar. As we noted at the time, a weaker euro was needed to complement Greece’s fiscal consolidation to avoid a deep recession. This would have been beneficial because, as is the case with Italy, more than 50 percent of Greece’s exports are sold outside the euro area.
Yet the pressure on the euro eased because markets rapidly concluded that Greece wasn’t big enough to bring down the monetary union. They understood that if the euro were to regain lost value, Greece might collapse, but the euro would survive. In less than a year, the euro regained all it had lost.
The same calculus doesn’t apply to Italy. Markets understand that a failure of fiscal consolidation by the government in Rome is likely to mean the end of the euro. It’s less clear that they understand that a weak currency will make the consolidation a success, and save the euro.
A swift depreciation would have the added benefit for investors of increasing the expected return of euro debt, making it easier to roll over the large stock of borrowing that will soon come due: about 200 billion euros ($253 billion) of European bank bonds in the first quarter of the year, in addition to the large rollovers of sovereign obligations.
Market Push
Markets have ways to push policy makers, though they don’t always do so in the least disruptive manner. They are even less effective when they panic, as they are doing now.
It is up to policy makers to help markets understand that an orderly decline in the euro’s value would be in everyone’s interest. That means European leaders should encourage the depreciation of the euro instead of trying to prevent it. During the second half of 2010 and though July 2011, the euro appreciated 25 percent against the dollar. The increase was largely due to the European Central Bank’s decision to raise interest rates twice.
The ECB today should make clear that a weak euro is the condition for its survival. It should cut interest rates to zero and pledge to keep them there for quite a while. This must be done, not as a replacement for the drastic fiscal adjustments that must occur in Italy and other countries, but to make sure those measures are effective.
(Ricardo Caballero is professor of economics at the Massachusetts Institute of Technology and an adviser to QFR Capital Management LP in New York. Francesco Giavazzi is a professor of economics at Bocconi University in Milan and a visiting professor at MIT. The opinions expressed are their own.)
Read more opinion online from Bloomberg View.
To contact the writers of this article: Francesco Giavazzi at francesco.giavazzi@unibocconi.it; Ricardo Caballero at caball@mit.edu

Tsunami ... shmo-nami -- what about dollar devaluation

2011-03-16T13:43:00.004-04:00

Deflation nope, the opposite.

The Fed & EuroCentBank are manufacturing dollars electronically (see Grant below) thereby greating "bad dollars/euros" that for a time are deemed "as good as always", but then "drive good money out" Gresham's Law

A) Jim Grant of Grant's Interest Rate Oberver
on BNN March 16/11
see/click Headline : Howard Green : 1:00 pm
part 2
part 3

B) Inflation-proofing your Portfolio
March 16/11 Aubrey Hearn -Sentry Securities

C) Future of Gold
March 16/11

Inflation Fears Lead Investors to Bet on Rate Rises

2011-02-15T11:43:00.002-05:00

Dave Rosenberg -BREAKFAST With DAVE Feb 15/2011

WHAT IS IN THE MARKET AND WHAT ISN’T

Yesterday’s FT provided a classic case in point:

Inflation Fears Lead Investors to Bet on Rate Rises

Inflation is on everyone’s brain. Everybody is braced for it. Everyone expects it.
It’s already priced in. So by definition, this is not where the surprise will be and it
is surprises that move markets. This is very good news for the bond market from
a contrarian stand point.

Also have a read of Higher Prices Are Looming, Companies Say on the front
page of today’s NYT. When anything makes it to the cover, you know it’s priced
in.

is he right?

New thoughts on Manipulating expectations to avoid Deflation

2010-12-06T06:02:00.003-05:00

"Excerpt"

Price Expectations
Second, and most relevant, is the idea that targeting the price level will help central banks deal with deflation. If consumers and companies expect the CPI will go from 100 today to 110.4 in five years, they will be less likely to delay purchases in the hope that costs will drop, potentially breaking the deflationary spiral of falling demand and prices.

“By providing households and businesses with greater certainty about the price level well into the future,” such targeting “might reduce the risks associated with entering into long-term financial obligations,” the Bank of Canada said in the 2006 paper.

More confidence about price movements would “absolutely” help the economy, said Larry O’Brien, founder of Ottawa-based technology staffing company Calian Technologies Ltd. and a former mayor of the Canadian capital.

Workers would be discouraged from seeking “inflationary agreements” in labor talks, and people would have more guidance when they “don’t know if we’re getting inflation or deflation,” O’Brien said.

BLOOMBERG
Fed Avoiding Deflation May Depend on Canadian CPI Experiments
By Greg Quinn

Read whole thing -http://noir.bloomberg.com/apps/news?pid=20601087&sid=awmnIhmkEy2I&pos=7

Dec. 6 (Bloomberg) -- Montreal undergraduates may help reshape the Bank of Canada’s monetary policy and give Federal Reserve Chairman Ben S. Bernanke and Bank of Japan Governor Masaaki Shirakawa clues about how to ward off deflation.
......
snip

The experiments will help Canada decide if it should switch from inflation targeting to price-level targeting in 2012 and may help the bank better communicate its policies to the public, Boivin said. The test results also might benefit Fed policy makers, who discussed price-level targets on Oct. 15 and voted Nov. 3 to inject another $600 billion of reserves into the banking system to avoid deflation -- a widespread drop in prices that has plagued Japan for more than a decade.

.....

Broader Agenda
“Central banks need to know more about how expectations are formed, and so we see that as part of a much broader agenda,” Boivin said in an interview at the Bank of Canada’s Ottawa headquarters in the room where he, Governor Mark Carney and four other policy makers decide on interest rates, including a decision tomorrow that’s scheduled for 9 a.m. New York time.

.....

Canada led the Group of Seven by adopting an inflation target in 1991, a policy about two dozen central banks now use, including the Bank of England and the European Central Bank. Canada may again be at the forefront if it switches next year to targeting the consumer price-index level after the expiration of its five-year agreement with the government to target a 2 percent inflation rate.

The main difference between the two systems is how officials take past inflation into account when making decisions about interest rates. With inflation targeting, “bygones are bygones,” the Bank of Canada said in a 2006 paper it published the last time the agreement was renewed. Policy makers who target 2 percent inflation, like Canada’s, will always adjust interest rates aiming to bring about 2 percent inflation, no matter how badly they missed the target in the past.

Offset Misses
By contrast, targeting specific CPI levels obliges the bank to adjust the pace of price changes, setting interest rates to engineer quicker or slower inflation to offset past misses.

As long as inflation behaves as the central bank wants, there’s no practical difference between the two policies. Officials who successfully target 2 percent annual inflation for five years will make the same decisions as those who want the CPI to go from 100 to 110.4 in the same period. It’s when inflation is persistently off course, as has been the case in Japan, that the implications of the difference become clearer.

First, the magnitude of interest-rate moves may differ. When inflation is persistently slower than a price-level targeting central bank wants, it may bring CPI back to the desired path by leaving interest rates lower for a longer period of time than it would if it targeted inflation.

Price Expectations
Second, and most relevant, is the idea that targeting the price level will help central banks deal with deflation. If consumers and companies expect the CPI will go from 100 today to 110.4 in five years, they will be less likely to delay purchases in the hope that costs will drop, potentially breaking the deflationary spiral of falling demand and prices.

“By providing households and businesses with greater certainty about the price level well into the future,” such targeting “might reduce the risks associated with entering into long-term financial obligations,” the Bank of Canada said in the 2006 paper.

More confidence about price movements would “absolutely” help the economy, said Larry O’Brien, founder of Ottawa-based technology staffing company Calian Technologies Ltd. and a former mayor of the Canadian capital.

Workers would be discouraged from seeking “inflationary agreements” in labor talks, and people would have more guidance when they “don’t know if we’re getting inflation or deflation,” O’Brien said.

Ireland, USA, whole mess - backgrounder from Bloomberg

2010-11-21T07:55:00.003-05:00

Highlights
1) "Europe’s leaders have told themselves and their voters that most of the world’s problems are due to the meltdown of the U.S. housing market and the way in which America’s megabanks went mad. "

2) "As an alternative, Europe could place a call to Beijing to find out if China would like to commit some of its $2.6 trillion in reserves to keep European creditors whole. This would be an enormous opportunity for China to vault to a leading global role. Perhaps it was a good idea to place Min Zhu, a top Bank of China official, in a senior position at the IMF.

If China offered to recapitalize the IMF, become the largest shareholder, and move the organization to Beijing (according to the Articles of Agreement, the IMF’s headquarters should be in the capital of the largest shareholder), wouldn’t that make for an interesting chess game?"

Ireland Crisis Might Give China Break It Seeks: Simon Johnson

Commentary by Simon Johnson

Nov. 19 (Bloomberg) -- There will be many twists and turns as the Ireland debt crisis unfolds and there’s a chance a resolution might just lead to Asia.

Here’s how I see it playing out. Ireland will accept a modest package of support from the European Union, presumably with International Monetary Fund involvement. At the same time, investors are coming to realize that Ireland’s future debt path is, beyond a reasonable doubt, unsustainable.

But a modest package will make very little difference. Ireland and its EU partners will have to resolve the underlying issues, including a restructuring of banking and sovereign debt.

We’ll get to that point because, absent a global growth miracle, the numbers are stacked too high against Ireland. But there won’t be any quick jump to a solution; it will be slow, painful-to-watch chess match in Dublin, Brussels and around the IMF headquarters in Washington, with obvious and costly spillovers to Portugal, Spain and perhaps other countries.

Why does it have to be this way? Delay and prevarication at this stage have nothing to do with any of the key players being taken by surprise. The writing has been on the euro-zone wall for at least two years.

In late October 2008, Peter Boone, James Kwak and I suggested that some European countries had given taxpayer-backed pledges to banks that had liabilities that were larger than their own gross domestic products. We also proposed the creation of a European Stability Fund with at least 2 trillion euros ($2.7 trillion) of credit lines guaranteed by all EU member nations as well as Switzerland, Sweden and the U.K. to buy time for dealing with the underlying issues of solvency in Ireland and elsewhere.

Abdicating Responsibility
The euro zone belatedly acted on that piece of advice, but the politicians in charge, both at the core and on the periphery of Europe, have refused to take responsibility for what they allowed to happen in the run-up to 2008. Europe’s leaders have told themselves and their voters that most of the world’s problems are due to the meltdown of the U.S. housing market and the way in which America’s megabanks went mad.

There is, of course, an element of truth to this. But it also misses the bigger European picture and what is blocking progress even today. The main proponents of unconstrained financial globalization may have been U.S. Treasury officials in recent decades, but it was European banks that really became too large relative to their economies. Along the way, they captured their regulators and engaged in incredibly irresponsible behavior.

read whole thing
http://noir.bloomberg.com/apps/news?pid=20601010&sid=a.yP80Naad1w

"'When certainty overwhelms uncertainty -- the herd tends to be wrong"-Barry Ritholtz

2010-11-10T09:43:00.002-05:00

Contrarian, you say?
or
another example of "everything's opposite" to the commonly-held view?

Kiss Your Assets Goodbye When Certainty Reigns: Barry Ritholtz

Nov. 10 (Bloomberg) -- “The markets hate uncertainty.”
If you wandered anywhere near a television in advance of the midterm elections, the Federal Open Market Committee meeting or October’s employment report, that cliche was unavoidable. It was the pundits’ preferred proverb.

Wall Street has a sweet tooth for such investing maxims. They infect the trading community like influenza in December. Repeat mindless dictums ad nauseum, and they soon become the accepted wisdom.

The problem with these supposed truisms is they are no more accurate than the flip of a coin. A closer look at this uncertainty meme reveals it to be a false-ism -- one of those emotionally appealing phrases that ping around trading desks. The lack of evidence supporting their premise seems to matter very little.

To recognize how meaningless these statements are, consider the opposite: Could markets function without uncertainty? It takes only a little thought to realize that markets actually thrive on doubt, imperfect information and a lack of consensus.

Uncertainty drives the market’s price-discovery mechanism. Investing requires there to be differences of opinion. When there is broad agreement as to an asset’s fair value, trading volume falls. Without any uncertainty, who would take the opposite side of your trade?

History teaches that whenever the opposite occurs -- when certainty overwhelms uncertainty -- the herd tends to be wrong. In rare instances, when there is a near-total lack of uncertainty in the market, the outcome is usually a spectacular disaster.

When Certainty Rules
Recall the dot-com era, when everyone knew that profits no longer mattered. Uncertainty seemed to be banished. An epic crash followed.

After the Internet implosion, the opposite extreme was operational: Profitable, debt-free tech companies were being traded for less than book value. In a few rare instances, they were being sold for less than cash on hand. Investors had become certain that a dollar was worth only 75 cents.

There was little uncertainty heading into the March 2009 stock-market lows. Almost everyone was sure the world was falling into the abyss. In that massive and indiscriminate selling, it seemed almost certain that no one was ever going to buy another house or car, or send their kids to school, or for that matter, clothe or feed them. How did the consensus work out in that instance?

Read the whole thing

Globe Editorial -"Quantitative easing is devaluation by another name"

2010-11-06T07:25:00.002-04:00

Oh My, ......
but ...what's the best thing to do if money's no good anymore as a store of wealth?

Quantitative easing is devaluation by another name

From Saturday's Globe and Mail
Published Friday, Nov. 05, 2010 7:30PM EDT
Last updated Friday, Nov. 05, 2010 10:06PM EDT

The U.S. Federal Reserve’s quantitative easing program, announced on Wednesday, has the effect of being a devaluation of the American dollar, which makes it the latest episode in the so-called currency wars. Even metaphorically named wars are a chaotic and risky way to solve problems.

That is all the more reason why the G20 summit next week in Seoul should try hard to reach an agreement on how to diminish international economic imbalances, limiting trade surpluses and trade deficits and large accumulations of foreign-exchange reserves.

READ the whole article on web page see charts etc

quote "Bernanke ‘Doesn’t Understand Economics"

2010-11-05T09:38:00.000-04:00

Oh My ....

Bernanke ‘Doesn’t Understand’ Economics, Rogers Says

By Simon Clark and Stephen Morris

Nov. 5 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke’s decision to pump a further $600 billion into the economy shows his grasp of economics is weak, said investor Jim Rogers, chairman of Rogers Holdings.

“Dr. Bernanke unfortunately does not understand economics, he does not understand currencies, he does not understand finance,” Rogers, 68, said in a lecture at Oxford University’s Balliol College yesterday. “All he understands is printing money.”

“His whole intellectual career has been based on the study of printing money,” said Rogers, who predicted the start of the global commodities rally in 1999. “Give the guy a printing press, he’s going to run it as fast as he can.”

The Fed said on Nov. 3 it will buy an additional $600 billion of Treasuries through June, in a bid to reduce unemployment and avert deflation. While Bernanke’s near-zero rates and $1.7 trillion in asset purchases helped end the recession, the Fed said progress has been “disappointingly slow” in bringing down joblessness that is close to a 26-year high.
“Debasing your currency has never worked,” Rogers said.

David W. Skidmore, a spokesman for the central bank in Washington, didn’t respond to a message seeking comment.

Read the rest
http://noir.bloomberg.com/apps/news?pid=20601087&sid=aUPs3Om4hLvM&pos=7

Bernanke May Ignore Risk of Inflation, Growth Acceleration Similar to 2004

2010-11-03T04:58:00.001-04:00

Oh,

Bernanke Bond Buying May Risk Rise in Prices Similar to 2004

By Steve Matthews and Scott Lanman

Nov. 3 (Bloomberg) -- The Federal Reserve may be underestimating the inflation outlook for the second time in less than a decade as it prepares to pump more money into the U.S. economy.
The Fed today will probably restart purchases of bonds to spur the economy even as growth is likely to accelerate at a 2.6 percent annual pace in the second quarter of next year from 2 percent last quarter, according Bloomberg News surveys of economists. The Fed will likely pledge to buy $500 billion or more in securities, according to 29 of 56 economists surveyed.

By expanding Fed assets, Chairman Ben S. Bernanke may go down the same policy path taken in 2003-04, when he and other central bankers kept rates near a record low as inflation rose faster than initially measured. Bernanke may risk increasing expectations for higher inflation by too much, causing a shake- up in currency and bond markets, said James D. Hamilton, a University of California, San Diego economist.

“That perception alone would bring about a series of immediate challenges, such as a rapid flight from the dollar, commodity speculation and possible under-subscription to Treasury auctions,” said Hamilton, a former visiting scholar at the Fed board and the New York and Atlanta district banks. “So the Fed has a careful tightrope act here.”

By 2012, the unprecedented stimulus would probably cause inflation excluding food and energy to exceed 2 percent, beyond the Fed’s preferred range, according to seven economists surveyed, including Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut.
‘Maximum’ Panic
“The parallels are very close to 2003, when the Fed had a maximum degree of panic about deflation when inflation had already bottomed out and was about to pick up,” said Stanley, a former Richmond Fed researcher who expects 2.8 percent inflation in 2012 on a rise in the prices for commodities and housing. “Their inflation forecasts are going to be too low, and as a result policy is going to be very easy.”

The Fed would probably not be alone in underestimating inflation. From 1996 until 2009, the Bureau of Economic Analysis revised up its initial reports on core inflation by an average of 0.21 percentage point, according to James Stock, a Harvard University economist.

Policy makers are scheduled to release a statement at around 2:15 p.m. in which they’ll likely reiterate the view from their September release that “inflation is likely to remain subdued for some time,” said former Fed governor Lyle Gramley, now senior adviser at Potomac Research Group in Washington.

The Treasury market is pricing in lower inflation expectations than it should, said Michael Pond of Barclays Plc.
Too-Low Inflation
“The market is looking for too-low inflation even though we won’t get a ton,” Pond, co-head of interest-rate strategy at Barclays in New York, said yesterday in a radio interview on “Bloomberg Surveillance” with Tom Keene.

The difference between yields on 10-year notes and Treasury Inflation Protected Securities, a gauge of trader expectations for the annual increase in consumer prices over the life of the maturity, increased yesterday to 2.21 percentage points, the widest level since May 18.

Bernanke as a central bank governor in 2003 urged colleagues to avert a drop in prices amid sluggish job growth, according to transcripts of a May 2003 meeting released last year. The central bank kept its target rate at 1 percent for a year beginning in June 2003 to counter deflation.

Meanwhile, inflation excluding food and energy rose from an initially reported 1.2 percent in May 2003 to above the Fed’s 2 percent goal a year later. An initial reading of 1.6 percent for May 2004 is now 2.1 percent in the history books.
Stimulate Growth
Since December 2008, the Fed has kept interest rates near zero and used asset purchases to try to stimulate growth following the worst recession since the 1930s. New asset purchases would follow Fed acquisitions of $1.7 trillion in Treasuries and mortgage debt that ended in March.
Even with unprecedented stimulus, the economic recovery and inflation have slowed. The Fed’s preferred price measure, which excludes food and fuel, rose 1.2 percent in September from a year earlier, the smallest gain since September 2001. Most Fed officials’ long-term preferred range for the inflation rate is about 1.7 percent to 2 percent.

Passing on higher costs isn’t feasible for some companies. Domino’s Pizza Inc. will keep its promotion of two medium pizzas for $5.99 each, Chief Executive Officer Patrick Doyle said on an investor call last month. “We’ve got to provide the price that’s going to get consumers to buy,” he said.
Signs of Inflation
Still, signs of inflation are emerging. Oil prices have risen 18 percent since May, and food staples including corn and cattle are up more than 20 percent this year.

Wal-Mart Stores Inc.’s U.S. stores chief Bill Simon, during an investor meeting last month in Bentonville, Arkansas, predicted “a slightly inflationary environment in our food business.”
While apartment rents, a component of core inflation, rose less than 1 percent in the third quarter, the market is tightening as vacancies dropped for the first time in three years, Reis Inc. said Oct. 6.

“The housing situation is something that could turn around pretty quickly if we actually had any kind of job growth,” said Chuck Lieberman, chief investment officer at Advisors Capital Management LLC in Hasbrouck Heights, New Jersey.

Some investors have bet prices will rise. The U.S. Treasury Department Oct. 25 sold $10 billion of five-year Treasury Inflation Protected Securities at a negative yield for the first time at a U.S. debt auction. The securities drew a yield of negative 0.55 percent.

“The real ugly question is, will this ultimately end up being inflationary?” said Scott Minerd, the Santa Monica, California-based chief investment officer at Guggenheim Partners LLC, who helps oversee $76 billion. “In the long run, five to 10 years from now or in the next decade, this is going to be a massive problem.”

To contact the reporters on this story: Steve Matthews in Atlanta at smatthews@bloomberg.net Scott Lanman in Washington at slanman@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net Last Updated: November 3, 2010 00:00 EDT

Corcoran: Stoking the Great Reflation

2010-10-19T10:22:00.003-04:00

Terence Corcoran: Stoking the Great Reflation
Fin/Nat Post

Terence Corcoran October 18, 2010 – 8:43 pm
Will the Bank of Canada resist the Fed’s push for inflation?Read more: http://opinion.financialpost.com/2010/10/18/terence-corcoran-stoking-the-great-reflation/#ixzz12oZRyBKs

The Great Recession, as some call it, is shaping up to soon become the Great Reflation — the idea being that a little inflation is good for growth and employment. If that’s the case, the place to go shopping for inflation is your local central bank, where monetary policy — the one and only source of inflation — can pretty much deliver rising prices at will. Whether more inflation can also deliver growth and employment is another question.

In Canada, the answer to that question has in the past been nicely summarized and the proposition handily dismissed. A decade ago, the idea that central banks could pull their money-supply levers so as to release a burst of growth was quietly buried by Gordon Thiessen, then governor of the Bank of Canada. “Over the longer term,” Mr. Thiessen said, “monetary policy has its effects only on the rate of inflation.”

A lot of political policymakers don’t much care for that idea. Back in 1999, Kevin Lynch, then deputy minister of finance under Paul Martin, wrote a memo — later released under access to information — suggesting the bank could risk a little more inflation to squeeze a little more growth out of the economy. Whether Mr. Martin ever used the memo as the basis for a meeting with Mr. Thiessen and bank officials isn’t known. Maybe he said nothing.

What we do know is that Mr. Lynch is one of legions of political and economic advisors who to this day believe inflation at some level higher than the current level (1%? 2%? 3%? 3.5%? 4%?) is a desirable form of economic stimulus.

Today, in fact, the inflationists seem to be running some central banks, especially the U.S. Federal Reserve, where Fed chairman Ben Bernanke appears to be spending a lot of time rummaging through economic history and current economic literature in search of presentable reasons for greater monetary stimulus that will actually deliver more growth and employment.

In some ways, he is forced into this messy policy corner by law. As he reiterated a couple of times during a speech last Friday, the Fed is required by law to pursue two separate and unrelated mandates. “The Federal Reserve has a statutory mandate to foster maximum employment and price stability,” he said. As a student of — indeed, an expert in — monetary policy, Mr. Bernanke also knows that he cannot ignore the iron law of central banking that Mr. Thiessen noted a decade ago. In Mr. Bernanke’s version, the limits of monetary policy look even more explicit:
Although attaining the long-run sustainable rate of unemployment and achieving the mandate-consistent rate of inflation are both key objectives of monetary policy, the two objectives are somewhat different in nature. Most importantly, whereas monetary policymakers clearly have the ability to determine the inflation rate in the long run, they have little or no control over the longer-run sustainable unemployment rate, which is primarily determined by demographic and structural factors, not by monetary policy. Thus, while central bankers can choose the value of inflation they wish to target, the sustainable unemployment rate can only be estimated, and is subject to substantial uncertainty. Moreover, the sustainable rate of unemployment typically evolves over time as its fundamental determinants change, whereas keeping inflation expectations firmly anchored generally implies that the inflation objective should remain constant, unless there are compelling technical reasons for changing it, such as changes in the methods used to measure inflation.

Mr. Bernanke is clear: Monetary policy has “little or no control” over unemployment rates, because levels of employment are “determined by demographic and structural factors.” He could have said the same of growth. Unemployment, he added, is driven by its “fundamental determinants” — in other words, not by monetary policy.

The implication is also clear: Whatever Mr. Bernanke and his colleagues at the Fed decide in terms of monetary policy and inflation, the impact on unemployment and growth will be little or none.

If unemployment and slow growth are a function of what Mr. Bernanke somewhat coyly refers to as “contingent economic conditions,” then the only result of a deliberate attempt to increase inflation will be higher inflation.

Put differently, if the causes of slow growth and joblessness are excessive government, bad regulation, chronic overspending, massive intervention, nationalized industries, rising taxes and colossal mismanagement of government programs — then there is nothing that central bank policy can do.

Still, Mr. Bernanke indicated in his speech that deliberate stoking of inflation — via a new round of quantitative easing through the purchase of government securities — may be necessary.
None of this makes the Bank of Canada’s job any easier, as the Canadian dollar rises in anticipation of U.S. inflation and in the face of Canadian discipline. So far as we know, avoidance of inflation is still Job One in Canada and Mr. Thiessen’s words are still mounted on a wall somewhere within the bank.

We will learn today, when the bank issues its interest rate statement, and tomorrow, when it releases its monetary policy review, on whether Canada’s firm anti-inflation stance is still in place and whether the bank will steadfastly resist participating in the Great Reflation.

BANK of CANADA -- Oct 19th
FOR IMMEDIATE RELEASE
19 October 2010
CONTACT: Jeremy Harrison613 782-8782

Bank of Canada maintains overnight rate target at 1 per cent

OTTAWA – The Bank of Canada today announced that it is maintaining its target for theovernight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rateis 3/4 per cent.

A full update of the Bank’s outlook for the economy and inflation, including risks to theprojection, will be published in the MPR on 20 October 2010. The next scheduled date forannouncing the overnight rate target is 7 December 2010.

This press release is now available on the Bank of Canada’s website at:http://www.bankofcanada.ca/en/fixed-dates/2010/rate_191010.html

Brazil: World in a currency war - BNN Video

2010-09-28T10:51:00.002-04:00

Video and Whole Story

Opinion of Trader has comments about CAD breaking parity towards end

Brazil: World in a currency war

on BNN

Reuters3:49 PM, E.T. September 27, 2010

The world is in an "international currency war" as governments manipulate their currencies to improve their export competitiveness, Brazilian Finance Minister Guido Mantega said Monday.

Mantega's speech to Brazilian industrial leaders included some of the strongest comments to date by any senior government official on the recent bout of currency intervention by countries, including Japan and China.

Brazil's currency, the real, is now the world's most overvalued major currency, according to Goldman Sachs. Near a 10-month high against the dollar, the real continued to rise after Mantega's comment as traders bet the government may be waiting for the outcome of Sunday's presidential election before taking action.

US Fed’s Open Market Committee said it was “prepared to provide... support the recovery and boost inflation...

2010-09-22T12:17:00.002-04:00

Oh My ...

Sinai Says Fed’s Sept. 21 Statement Means ‘Gotta Buy Gold’

By Joshua Zumbrun and Tom Keene

Bloomberg
Sept 22/10
-- The Federal Reserve’s statement yesterday that inflation is below levels consistent with the central bank’s mandate for price stability means it’s time to buy gold, said Allen Sinai, chief global economist at Decision Economics Inc. in New York. ( ed. --AND TANGIBLE INCOME-PRODUCING ASSETS)

“That’s code for we don’t want to go the way of Japan so we’re going to print money,” Sinai said in a radio interview today on “Bloomberg Surveillance” with Tom Keene. “You gotta buy gold when those two central banks are doing what they’re doing.”

Gold for December delivery was 1.6 percent higher at $1,294.2 an ounce at 8:11 a.m. on the Comex in New York, after touching an all-time high $1,296.50. Bullion for immediate- delivery rose 0.4 percent to $1,292.60 an ounce in London, after earlier today rising to a record $1,295.

The Fed’s Open Market Committee said yesterday it was “prepared to provide additional accommodation if needed” to support the recovery and boost inflation. Gold, which often moves counter to the dollar, has advanced 17 percent this year and is heading for its tenth consecutive annual gain.

Sinai said he forecasts a $1,500 price for gold. “Inflation adjusted it’s still cheap as odd as it sounds,” he said.

To contact the reporters on this story: Joshua Zumbrun in Washington at jzumbrun@bloomberg.net; Tom Keene in New York at tkeene@bloomberg.net

Rosenberg on Gold (as a Currency) Breaking Out

2010-09-20T11:25:00.001-04:00

David Rosenbergh
Sept 20/2010
https://ems.gluskinsheff.net/Articles/Breakfast_with_Dave_092010.pdf
GOLD BREAKS OUT ... AGAIN
What is amazing is that there are just about as many naysayers about gold out there as there are bond bears. Until the investment elite catches on, the odds of these two asset classes continuing as relative outperformers are quite high because no bull market ends until the masses fall in love with the asset or security in question.

What makes the gold story so interesting is that bullion has so many different correlations — with inflation, with the dollar, with interest rates, with political uncertainty — and it also has different faces. This year, for example, gold has shifted from being a commodity towards being a currency — the classic role as a monetary metal that is no government’s liability. This year, there are three events have catapulted gold into currency status, and they all involve attempts by governments around the globe to devalue their own currencies or at least jeopardize the sanctity of the central bank balance sheet:

-The ECB’s decision to allow non-investment grade bonds as collateral on its balance sheet.
-The Fed’s decision not to allow, as was planned, an unwinding of its pregnant balance sheet with obvious implications for the growth rate in the monetary base.
-The decision by the Japanese government to unilaterally intervene in the foreign exchange to reverse the yen’s strength.

Nobody wants a strong currency, and nobody, outside of a few small countries, wants higher interest rates, and now, we have rising U.S.-Chinese trade tensions. Greek bond yields remain at punitive levels and are currently pricing some probability of default. In addition, Ireland seems to be experiencing intense financial difficulties that have compelled the ECB to step in for support. The Mideast peace talks don’t seem to be going anywhere. The U.S. political backdrop is one of intense uncertainty and the most likely scenario post-November 2nd is one of gridlock.

How can gold not thrive in this environment?
The other day, we were asked what would turn us bullish? The assumption of course is that we aren’t bullish on anything. Well, go back and look at my track record and you will find that we have been gold bulls now with near consistency for the better part of the past decade.

Japan intervenes to Devalue Currency (sneaky-like)

2010-09-17T08:00:00.002-04:00

Bank of Japan Keeps Yen in System After Intervention (Update2)
By Saburo Funabiki and Mayumi Otsuma

Sept. 17 (Bloomberg) -- The Bank of Japan refrained from removing funds in the financial system, leaving deposits held by institutions at the bank at the highest level this month after the nation’s first currency intervention since 2004.

Deposits climbed by 2 trillion yen ($23.4 billion) to 17.1 trillion yen, the central bank said today. Figures suggest that the government sold up to 1.8 trillion yen on Sept. 15 to weaken the yen from a 15-year high against the dollar, according to Junko Nishioka, chief at RBS Securities Japan Ltd. in Tokyo. Central banks conduct bill auctions to drain excess currency stemming from foreign purchases, a process called sterilization.

“The BOJ pretty much left the full amount of intervention in markets, a sort of effective unsterilization,” Nishioka said. “The chance for additional policy easing is increasing after the government finally intervened in the currency market.”

Japan sold yen this week after it touched 82.88 per dollar, the strongest level since May 1995. Concerns that the nation will intervene again helped weaken the yen to 85.93 yesterday, the lowest since Aug. 16. BOJ board member Tadao Noda this week said the BOJ will use intervention funds to provide liquidity.

Stronger Easing

The funds injected by Japan’s yen sales are settled today. Following the intervention, BOJ Governor Masaaki Shirakawa said the bank will continue a “strong monetary easing” by providing ample liquidity to financial markets.

Deposits at the central bank’s current account climbed to the highest since Aug. 31, from yesterday’s 15.09 trillion yen, according to the BOJ.

“While I do feel that there’s too much being made of the current-account level, it looks like the central bank’s stance is to go unsterilized,” said Takafumi Yamawaki, chief rates strategist at JPMorgan Chase & Co. in Tokyo.

The BOJ’s policy of paying 0.1 percent interest on excess reserves is setting the floor for money market rates, making it easier for the bank to provide funds without worrying about a rapid decline in the benchmark rate. The interbank overnight loan rate was traded at about 0.08 percent this morning, according to Tokyo Tanshi Co., a Japanese money market brokerage.

The previous time Japan intervened in the currency markets was March 16, 2004, when the yen was around 109 per dollar. The Bank of Japan sold 14.8 trillion yen in the first three months of 2004, after record sales of 20.4 trillion yen in 2003. Japan last bought the currency in 1998, purchasing 3.05 trillion yen as the exchange rate weakened to 147.66.

BOJ policy makers will hold regular board meetings on Oct. 4-5 and Oct. 28. The bank may consider further monetary easing measures as early as next month, said RBS’s Nishioka.
The central bank will probably consider expanding a 30 trillion yen credit program for lenders as the first choice, Nishioka said.

“But I won’t be surprised if the bank goes beyond that and move to increase monthly government bond purchases” from 1.8 trillion yen, she said.

Shirakawa yesterday said the central bank will take policy actions in a timely manner if judged necessary. He last week told parliament the bank will act should downside risks to growth materialize and the economy worsens more than the bank’s outlook. Policy makers are examining “various” policy options, he said.

READ ORIGINAL -http://noir.bloomberg.com/apps/news?pid=20601087&sid=aaRG2thsVitM&pos=5#

To contact the reporter on this story: Saburo Funabiki in Tokyo at sfunabiki@bloomberg.net. Mayumi Otsuma in Tokyo at motsuma@bloomberg.net Last Updated: September 17, 2010 01:08 EDT

Reaction to sneaky devaluation by Japan

2010-09-16T08:09:00.002-04:00

Bernanke Shadow of Easing Limits BOJ Success With Yen (Update1)
(ed.Headline doesn't make any sense to me .... must be purposely editted into vagueness)

Sept. 17 (Bloomberg) -- Bank of Japan Governor Masaaki Shirakawa’s success in weakening the yen may hinge on Ben S. Bernanke.

Japan said two days ago it sold yen for the first time since 2004 because the currency’s surge to a 15-year high versus the dollar imperiled the nation’s export-led recovery. Meantime, pressure is growing on U.S. Federal Reserve Chairman Bernanke to print more dollars to bolster America’s flagging economy, a policy that contributed to a weaker greenback in 2009.

“Because of speculation of further monetary easing by the Fed, it may be impossible for Japan alone to turn around the yen-appreciation trend” through unilateral currency intervention, said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. The firm is a unit of Japan’s third-largest banking group.

Governments around the world are counting on relatively weak currencies to help bolster exports and keep their own economic recoveries afloat. Recent developments indicate global growth “has slowed somewhat,” John Lipsky, the second-highest ranking official of the International Monetary Fund, said in a Sept. 15 speech in New York.

Japan’s move, which sent it down 3.3 percent against the dollar and 3.4 percent versus the euro, drew a rebuke from Luxembourg Prime Minister Jean-Claude Juncker, who chairs meetings of euro-region finance ministers.

‘Step Back’
Juncker said in an interview in Brussels yesterday that the group was “insisting” Japanese authorities “step back from unilateral interventions.” His comments came the same day the European Union’s statistics office said the region’s exports fell in July for the first time in three months.

“Very few countries right now want a strong currency,” Ray Farris, the London-based head of foreign-exchange strategy at Credit Suisse Group AG, said in an interview in Tokyo. “The U.S. might talk about having strong currency policy, but reality is that the U.S. government, President Obama in particular, has made it clear that he sees export growth as part of the adjustment process in the United States.”

Barack Obama’s administration formed the Export Council in March with the goal of doubling U.S. exports to about $3.1 trillion by 2015, supporting 2 million additional jobs.

“The more American companies export, the more they produce,” Obama said yesterday after meeting with the group at the White House. “And the more they produce, the more people they hire and that means more jobs -- good jobs that often pay as much as 15 percent more than average.”

Japan’s Noda
Japanese Finance Minister Yoshihiko Noda defended his decision to intervene in currency markets after the move spurred criticism from policy makers in the U.S. and Europe.

“I’m aware of the various comments, but with deflation, our economy is in a severe situation and it’s undesirable that the strong yen be prolonged,” Noda said today. “I think it’s important to explain that persistently to other nations.”

Growth in Japan’s economy slowed to a 1.5 percent annual pace last quarter, from 5 percent in the first three months of the year. Consumer confidence reached a four-month low in August, and the government this week revised its July industrial output figures to show that production fell rather than gained.

Trade accounted for more than half of Japan’s expansion in the second quarter, highlighting the threat of a stronger yen. Japanese exporters said they can remain profitable as long as the yen trades at 92.90 per dollar or weaker, according to a Cabinet Office report released in February.

Currency Strength
The currency strengthened to 82.88 to the dollar, the strongest since May 1995, before the BOJ stepped into the foreign-exchange market by purchasing and selling currencies to influence prices. A day earlier, Prime Minister Naoto Kan won re-election as head of the ruling party, beating a challenger who had insisted intervention was necessary. (ed. Shades of TRUDEAU and Wage & Price Controls)The yen traded at 85.79 at 11:54 a.m. in Tokyo today.

“I’m guessing the Bank of Japan is being defensive, rather than offensive,” said Derek Halpenny, the European head of global currency research at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “Japan is in dire straits in terms of trying to get sustainable growth going again and getting rid of deflation, and having a stronger currency in nominal terms is deflationary. That’s the policy incentive to what they’ve done.”

The Fed is also trying to avoid deflation. U.S. consumer prices, excluding food and energy, rose 0.9 percent in July from a year earlier, the smallest increase in four decades.

‘Downward Pressure’
New York-based Goldman Sachs Group Inc., the most profitable securities firm, and Newport Beach, California-based Pacific Investment Management Co., manager of the world’s biggest bond fund, both predict the Fed will drive down borrowing costs by purchasing more fixed-income securities. The move, known as quantitative easing, pumps cash into the economy.

“While the intervention has been effective in the near term, the direction of dollar-yen is ultimately dependent on U.S. yields, which remain under downward pressure and are continuing to weigh on the greenback,” said David Forrester, a currency economist at Barclays Plc in Singapore.

The Fed bought more than $1.7 trillion in housing debt and Treasury securities last year, contributing to a 10.2 percent drop in the dollar, according to Bloomberg Correlation-Weighted Currency Indexes. The central bank said last month it would reinvest the proceeds from its holdings of mortgage-backed securities into Treasuries.

Loose Policies
“Should further action prove necessary, policy options are available to provide additional stimulus,” Bernanke said at a gathering of central bank officials and economists in Jackson Hole, Wyoming, on Aug. 27.

Further Fed purchases won’t be a key determinant of the exchange rate between Japan and the U.S., according to economists Carl Weinberg of High Frequency Economics and Barry Eichengreen at the University of California at Berkeley.

“I have to say that loose monetary policies are not what’s driving the currency any place in the world,” Weinberg, who is based in Valhalla, New York, said.

The economies of both Japan and the U.S. would benefit from another round of quantitative easing, said Eichengreen.

“People are viewing this as a conflict between the U.S. and Japan, but if our policy would otherwise push up the yen a little bit and thereby cause more deflation there, they can offset that by printing a few more yen, which again costs them nothing, has no negative side effects,” Eichengreen said. “I don’t see any incompatibility between the two policies.”

Last Intervention
The Bank of Japan is scheduled to meet on monetary policy Oct. 4-5. They made an emergency decision on Aug. 30 to add 10 trillion yen ($116 billion) to a credit program, bringing it to 30 trillion yen. The bank kept the benchmark overnight lending rate at 0.1 percent and its monthly target for government bond purchases at 1.8 trillion yen.

Japan hadn’t intervened in the currency market since March 2004, when the yen traded at about 109 per dollar. The Bank of Japan, acting on behest of the Ministry of Finance, sold 14.8 trillion yen in the first three months of 2004 following record sales of 20.4 trillion yen in 2003.
The action failed to keep the currency from rising to 102.63 to the dollar by the end of that year.
Unilateral intervention by the Swiss National Bank couldn’t prevent the franc from appreciating to a record high against the euro this year and reaching parity with the dollar.

Biggest Winners
The Swiss franc strengthened to a record level of 1.2766 per euro on Sept. 9 after the Swiss National Bank abandoned attempts to weaken the currency. The franc and the yen tend to strengthen during periods of financial stress because their export-reliant economies don’t need foreign capital to balance current accounts -- the broadest measure of trade.

Exports accounted for more than half Switzerland’s gross domestic product last quarter, compared with 13 percent in the U.S., according to data compiled by Bloomberg.

The yen and franc appreciated the most on a relative basis after Fed efforts from December 2007 to March 2009 to jumpstart the economy expanded the central bank’s balance sheet by as much as $1.15 trillion, a Barclays analysis of 17 exchange-rate pairs shows.

The study examined currency responses to Fed decisions as a means of assessing the likely reaction to (ed. future) quantitative easing. They found the yen and franc tended to outperform before and after the decisions. Emerging-market currencies did worse.

The yen rallied as much as 14 percent against the dollar in the nine months following the Fed’s announcement of quantitative easing on March 18, 2009. The biggest loser was the greenback.

The Dollar Index, a gauge of the currency against the euro, yen, pound, franc, Swedish krona and Canadian dollar, weakened as much as 15 percent.
Japan, China

Japan runs the risk of being ostracized by other governments if it continues to intervene, similar to the criticism China has drawn for not allowing its currency to strengthen at a faster pace, according to Mitsuru Saito, the chief economist at Tokai Tokyo Securities Co.

“It may bear the brunt of international criticism and risks being named a currency manipulator, just as China has been labeled,” Saito said. “Japan’s solo intervention isn’t a quick-fix for the economy, and its effect on the market can easily be wiped out by additional easing from the Fed, which seems to be preparing for it.”

READ ORIGINAL http://noir.bloomberg.com/apps/news?pid=20601010&sid=a.xkYNu4b6vI#

To contact the reporters on this story: Ron Harui in Singapore at rharui@bloomberg.net; Joshua Zumbrun in Washington at jzumbrun@bloomberg.net Last Updated: September 16, 2010 23:00 EDT

Playing Both Sides against the Middle (Inflation vs Deflation)

2010-09-16T07:47:00.001-04:00

Pimco Makes $8.1 Billion Bet Against ‘Lost Decade’ of Deflation
Sept. 15 (Bloomberg)
By Miles Weiss

read whole thing

Excerpts

Devalue Dollar

As recently as April, Pimco’s Worah wrote that inflation, not deflation, was the primary long-term concern in the U.S., given that the federal government could choose to address widening budget deficits by devaluing the dollar. Scott Mather, Pimco’s head of global portfolio management, wrote in August that the odds had increased of the U.S. suffering a Japanese- style “lost decade.”

“If you have inflation going down toward zero, you enter a new regime where expectations can become a self-fulfilling prophecy,” Mather said in an interview. “That is what we saw in Japan as well,” he said, referring to an era of declining real estate and equity prices that began in the early 1990s.

While the derivative contracts suggest that deflation fears have increased, the risk of deflation in the U.S. is lower than it was in Japan because the two countries have different currency policies, said Donald Ratajczak, an economic consultant and former director of the Economic Forecasting Center at Georgia State University.

‘Bad Bet’

Japanese deflation stems from government policies to maintain the value of the yen that depleted the money supply there, said Ratajczak, who won acclaim from the Boston Federal Reserve Bank for his inflation forecast in the 1990s.

“We don’t care as much about our dollar,” said Ratajczak. “People who are betting on ten years of deflation are making a bad bet.”

Wall Street dealers write derivative contracts for clients that want to bet on or protect their holdings from changes in interest rates, commodities, stock prices and other financial markets. The dealers can then keep the contracts, sell some of them to other Wall Street firms through the inter-dealer market, or find counterparties such as Pimco that will take the other side of the trade.

snip

Buffett’s Model

Fairfax, based in Toronto, sells insurance and invests the premiums it receives in out-of-favor securities, similar to Buffett’s investment model. Equities are more at risk from deflation than fixed income securities such as the Treasury bonds Pimco holds in its funds, and which gain in value as interest rates decline.

Given the size of the inflation floors bought by Fairfax Financial, Pimco may have taken the other side on some of them, said Greenwood.

Paul Rivett, Fairfax Financial’s chief legal officer, declined to comment on the counterparties to the contracts.

“We are very concerned about deflation and have put this trade on to hedge some of what we see as a not insignificant risk,” Rivett said in an e-mail. “Unfortunately, we have not publicly disclosed the inner mechanics of the trade.”

China on ‘Treadmill to Hell’ Amid Bubble

2010-04-08T07:16:00.000-04:00

China on ‘Treadmill to Hell’ Amid Bubble, Chanos Says (Update1)

April 8 (Bloomberg) -- China’s property market is a bubble that may burst by as early as this year, according to hedge fund manager James Chanos.

The world’s third-biggest economy may need to keep up the pace of property investment because up to 60 percent of its gross domestic product relies on construction, said Chanos. The bubble may begin to “run its course” in late-2010 or 2011, he said in an interview on “The Charlie Rose Show” that will air on PBS and Bloomberg TV.

China is “on a treadmill to hell,” said Chanos, who said in January the nation is Dubai times a thousand. “They can’t afford to get off this heroin of property development. It is the only thing keeping the economic growth numbers growing.”

Property prices in China rose at the fastest pace in almost two years in February even after officials this year re-imposed a tax on homes sold within five years of their purchase to curb speculation and ordered banks to set aside more funds as reserves to cool lending. The boom in China’s real estate has fueled concern that China may face a collapse seen in Dubai that has hurt the ability of some of its companies to repay debt.

Since his January prediction, Chanos, the founder of Kynikos Associates Ltd, has been joined by Gloom, Doom & Boom publisher Marc Faber and Harvard University professor Kenneth Rogoff in warning of a potential crash in China’s property market.

Chinese state and local governments are among the most leveraged to property-related borrowings and the nation will “ultimately” have to nationalize a lot of the bad loans that will arise from the end of the bubble, Chanos said.

China’s Reserves
China’s foreign currency reserves will be “one asset” that can be used to fund a cleanup of the banking system, he said. The country has accumulated a record $2.4 trillion of reserves, and $889 billion of U.S. government debt, partly a consequence of its exchange-rate policy.

Chanos was one of the first investors to foresee the 2001 collapse of Houston-based energy company Enron Corp. The investor said he is short-selling Chinese developers as well as companies supplying building-related materials to the country, without identifying any stocks.

In a short sale, investors bet on declines in securities by borrowing stock to sell on the expectation it can be purchased at a lower price before handing it back.

To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net

4% Solution -Part 2 -Inflation Eroding China Deposits Feeds Asset Pressure

2010-03-12T07:48:00.002-05:00

Inflation Eroding China Deposits Feeds Asset Pressure

snippet...

March 12 (Bloomberg) -- China’s accelerating inflation has started to erode household savings, threatening to spur purchases of property and stocks and fuel asset-price pressures.

Consumer prices rose a more-than-forecast 2.7 percent in February, the most in 16 months, the statistics bureau said in Beijing yesterday. The increase means the rate exceeds the one- year deposit rate of 2.25 percent.

So-called negative real rates skew incentives to spending just as China’s economy is already accelerating -- reports this week showed exports rose, industrial production accelerated and new loans exceeded forecasts. The central bank may raise interest rates within the next three weeks, Standard Chartered Bank Plc, Nomura Holdings Inc. and Royal Bank of Canada said.
“A growing number of households will now realize that their deposits in the banking system are losing purchasing power,” said Ma Jun, chief China economist at Deutsche Bank AG in Hong Kong. The jump in the inflation rate last month “will increase the social and political pressure for a rate hike in the near term.”

February’s reading was likely influenced by seasonal factors stemming from the Lunar New Year holiday and winter storms that pushed up prices, analysts said. At the same time, the rate may rise further, with the median forecast in a Bloomberg News survey last week for a peak of 4.4 percent during the year.

‘Fear of Inflation’
Since October, the government has highlighted the importance of managing inflation expectations as the nation rebounds from the global financial crisis and commodity costs rise. Eleven of 15 economists surveyed yesterday said that interest rates may rise in March or April.
Barclays Capital yesterday increased its projection for China’s inflation rate this year to 3.5 percent from a previous estimate of 3 percent.

“Fear of inflation” will help to drive property purchases in China because people want “hard assets,” Zhang Xin, the chief executive of Soho China Ltd., the biggest developer in Beijing’s central business district, said in an interview on Bloomberg Television today.

snip....

whole thing

The 4% Solution - the IMF's Rethinking on Inflation

2010-03-10T06:12:00.003-05:00

Who's discussing devaluing the world's Currencies to re-pay the debt Mountain with devalued dollars? (on a case-by-case basis, by the individual sovereign countries of course)

Many/some/a few ordinary people wonder what the heck is going on with "the money".

How can the gov't's and central banks keep "creating money" without an "announced plan" on how it will be paid off?

Does some Finance Minister, Bank Mogul, President of a Central Bank (or financial speculator-with-a-political-agenda) or anybody have a Grand Design on how to unwind this borrow-to-bail-out/too-big-to-fail debt mountain (at the national, provincial/state and municipal levels-oh my! what a field-day for financiers) that virtually all G20 countries have built as a method to stall/cure the credit bubble-burst crisis?

The International Monetary Fund IS proposing one .... and since it's so painless for the G20 governments to follow (IF everybody else does it) then please await the gradual introduction of a widely recognized new "acceptable level" for state-sanctioned inflation ..... 4% annually. see Rule of 72 for implications on "the money"

I was introduced to the IMF report yesterday through two purposely side-by-side articles in the Financial Post on pg FP15 - good ol' Terence Corcoran, the author and section editor

Macroimprudential monetary policy
Terence Corcoran,
Financial Post Tuesday, March 09, 2010

The IMF Inflation Illusion
Axel A Weber & Philipp Hidebrand
Fin Post & Elsewhere on Canwest Mar 9/10

Oh my - it's already 'hoist up the flagpole' - Mr Corcoran was fighting a rearguard action ...

Higher inflation may not be bad
Edward Hadas,
Breakingviews.com Published: Monday, March 08,

OH Oh MY!! It's OLD news

IMF paper suggests higher 4% inflation targets
Reuters Published: Friday, February 12, 2010

USA Pres. Policies - a recipe for ...stagflation and currency devaluation.

2010-01-22T16:52:00.002-05:00

Conrad Black: Incompetent Obama teeters on the edge
Posted: January 22, 2010, 11:00 AM by National Post Editor

from www.Bourque.com Jan 22/10

snip...
Current economic projections call for massive debt increases of $1 trillion a year for a decade, with huge money supply increases that will make history not only by their size but, according to forecasts, by their non-inflationary nature, accompanied by tax increases that will, also miraculously, not retard recovery from the recession. No audible sane person believes this arithmetical fairy tale, including, one dares to hope, the president himself. It is a recipe for guaranteed stagflation and currency devaluation.

...snip

Read more: http://network.nationalpost.com/np/blogs/fullcomment/archive/2010/01/22/conrad-black-the-lessons-of-massachusetts.aspx#ixzz0dNdwbcr0 The National Post is now on Facebook. Join our fan community today.

... Bernanke Isn’t Whipping Inflation Concerns

2009-10-13T11:11:00.002-04:00

TIPS Show Bernanke Isn’t Whipping Inflation Concerns

By Daniel Kruger
Oct. 13 2009(Bloomberg) --

Treasury Inflation Protected Securities are the bonds money managers can’t afford not to own.
BlackRock Inc., Pacific Investment Management Co. and Vanguard Group Inc., which together manage $3.45 trillion, say investors are pouring money into inflation-linked debt even as consumer prices post the longest series of contractions since Dwight D. Eisenhower was president in 1955.
....

read whole thing
http://www.bloomberg.com/apps/news?pid=20601109&sid=agCcWr9sbO58

Printing Money Must Stop - How to be RIGHT & simultaneously WRONG

2009-10-10T12:07:00.003-04:00

Cameron Debt Fix Called ‘Bizarre’ by Ex-BOE Officials (Update1)
Bloomberg Oct 09 09

By Gonzalo Vina and Brian Swint

Conservative leader David Cameron’s suggestion that the Bank of England end its asset purchases soon was criticized by two former central bank officials, a setback to the opposition’s effort to build credibility on the economy.

David Blanchflower, who left the bank’s Monetary Policy Committee in May, said Cameron’s speech yesterday was “bizarre” and if put into practice may tip the U.K. into a “depression.” Shamik Dhar, a former Bank of England economist, said “at best this is wrong and at worst downright dangerous.”

Without mentioning the central bank, Cameron told his party’s conference in Manchester that he opposed creating money, saying “sometime soon that will have to stop, because in the end, printing money leads to inflation.

.......snip

Cameron’s remarks about the central bank are unlikely to register with voters, though attacks on his economic credibility might, said Andrew Hawkins from ComRes Ltd., a polling company.
‘Weakest Flank’

“I don’t think people have understood Cameron’s economics and it is his weakest flank,” Hawkins said.

An example of How to be simultaneous RIGHT .... but if nobody cares/ comprehends /appreciates .... also be WRONG.

Could Canada be headed for sky-high inflation?

2009-09-19T08:25:00.005-04:00

Could Canada be headed for sky-high inflation?
Updated Sat. Sep. 19 2009 7:11 AM ET
By Angela Mulholland, CTV.ca News Staff
CTV.ca presents the last in a six-part series on Canada's economy: the damage done, the recovery that lies ahead -- and whether we might climb out of the financial crisis even stronger.

GOOD QUESTION, Ms Mulholland!
Her piece offers incomplete, light-weight analysis, but a key and vital point IS raised:

"So are deficits in and of themselves wrong? Not at all. As the old adage goes: sometimes you gotta spend money to make money. This is not the first time governments have tried to spend themselves out of a recession. The problem lies in how that spending is financed."

But although the point is raised .. no answer is offered - how ARE these Billions financed?

Let's try ...

NB they did NOT raise the money backed by an equal amount of Bonds. The Bank Of Canada just "created the money" out of nothing (as IS their mandate) with the understanding that a the sovereign government of the country (see why sovereignty is important) would be responsible for withdrawing the money from the economy as seamlessly and effortlessly as they created it.

We loaned it to ourselves -at no interest- and will pay ourselves back .... or that's the theory.

We secured the loan with .... the assets of the country which are ACTUALLY the assets of the Crown ... which is .... actually not too clear in Canada.

All the mucking around in 1982 really never address who/what IS or IS NOT the Crown.

Is 'the Crown' that nice lady currently holding the Office of Monarch over 'home?

Does Sovereignty reside in the OFFICE of Monarch?

In the OFFICE of Governor General? Prime Minister? Speaker? .... well where then does Sovereignty lie?

If the best answer is "in the Office of Monarch" .... then WHO/WHAT is the top "steward" of that power, those assets (and liabilities) and treasury ?

The BNA/Constitution says one thing (i.e. de jure the top steward is the GovGen with assistance of His/Her appointed, permanent , above-the-political-fray EXECUTIVE advisors ... the Privy Council)

and -sadly for those who prefer to follow the laws of the land- in reality, the de facto top steward of the Crown's power, assets and treasury is the transitory, oft-in-minority, all-political, favour-granting, LEGISLATIVE, Prime Minister's Office (having usurped the power of the Privy Council in 1940 with Order in Council PC 1940-1121 as preventive-revenge for the rightful exercise of GG power in the King/Byng thing of 1926)

So whether you think having a Crown is important or not ... don't you think it's important to have checks and balances on the "top steward" of the Power/Assets/Treasury?

Should one, elected-by fooling-37.5% to 44% of-the-people, by-design-transitory, oft-in-minority , preferring-to-REMAIN-PM-rather-than-not, INDIVIDUAL hold control over all that power? with NO oversight? with no countermand?

SURELY, this is not the system that was devised in 1867?

NO it's not.

If you don't belive me - read just the first 16 sections (add 17 to s.57 if you're bold) of the as-written Document! (my plain language version if you prefer) and start thinking about the simplest way to reinstate the as-written provisions of the highest law in the land!

OR ... do you prefer someone with unlimited power being allowed to NOT FOLLOW the BNA/Constitution indefinately ...

"Walk a KB or 2 in my Mocassins" blog is about this thought-process.

There are 2 answers
1) Elect the Governor General - at large, every other General election, for a term that starts 365 days after the return of the writs and lasts for 2 General Elections

or

2) Institute a convention that no bill will be given Royal Assent by the Governor General unless it passes the House with 2/3rds majority AND the Senate with 2/3rds majority.

No one person or party will ever control 2/3 of both Houses, thereby making EVERY M.P. & EVERY Senator's vote vital.

Understanding The Inflation In The Pipeline

2009-09-10T07:15:00.001-04:00

Understanding The Inflation In The Pipeline

By WALTER E. WILLIAMS Posted Wednesday, September 09, 2009 4:20 PM PT
With the massive increases in federal spending, inflation is one of the risks that await us. To protect us from the political demagoguery that will accompany that inflation, let's now decide what is and what is not inflation.
One price or several prices rising is not inflation. Increases in money supply are what constitute inflation, and a general rise in prices is the symptom.

READ the whole editorial

Pimco Says (US) Dollar to Weaken as Reserve Status Erodes

2009-08-19T14:43:00.002-04:00

Pimco Says Dollar to Weaken as Reserve Status Erodes (Update4)
By Garfield Reynolds and Wes Goodman

Aug. 19 (Bloomberg) -- Pacific Investment Management Co., the world’s biggest manager of bond funds, said the dollar will weaken as the U.S. pumps “massive” amounts of money into the economy.
The dollar will drop the most against emerging-market counterparts, Curtis A. Mewbourne, a Pimco portfolio manager, wrote in a report on the company’s Web site. The greenback is losing its status as the world’s reserve currency, he said.

“Investors should consider whether it makes sense to take advantage of any periods of U.S. dollar strength to diversify their currency exposure,” Mewbourne wrote in his August Emerging Markets Watch report. “The massive amounts of U.S. dollar liquidity produced in response to the crisis” have helped reduce demand for the currency, he wrote.

....snipped

read whole thing

Funding of Healthcare ...government views all wealth as government property, to be doled out ...

2009-08-15T08:59:00.002-04:00

When You're Worth More Dead Than Alive
By ERIC SINGER Posted Friday, August 14, 2009 4:20 PM PT
IBD Editorial

excerpt

"The fundamental problem here is that government views all wealth as government property, to be doled out against cost-benefit analysis. But the government doesn't create the wealth; it just seizes it by taxation.
Having relentlessly thwarted a truly free market in health care, the government treats each patient as a liability to be managed. Once the government has a number in mind for the value of your life, your days will be numbered — and not by God, but by the government. "

read the whole thing .... pls

SAME PUBLICATION DAY

Prevention As Cost Cure-All Is Just A Myth
By CHARLES KRAUTHAMMER Posted Friday, August 14, 2009

excerpt

"The fallacy here is confusing the individual with society. For the individual, catching something early generally reduces later spending for that condition. But, explains Elmendorf, we don't know in advance which patients are going to develop costly illnesses.
To avert one case, "it is usually necessary to provide preventive care to many patients, most of whom would not have suffered that illness anyway." This costs society money that would not have been spent otherwise."

... snip ...

Prevention is a wondrous good, but in the aggregate it costs society money. Nothing wrong with that. That's the whole premise of medicine. Treating a heart attack or setting a broken leg also costs society. But we do it because it alleviates human suffering. Preventing a heart attack with statins or breast cancer with mammograms is costly. But we do it because it reduces human suffering.

.... snip

READ it all, pls

Quantitative Easing - unsheathing the magic of Inflation (the enemy of my enemy)

2009-04-14T05:23:00.008-04:00

Dear Edward,

I'm really intrigued by the Bank of Canada's new monetary tool - known, in the best central circles, as Quantitative Easing (henceforth “QE”).

The sad aspect is no one is plainly explaining what that means ... i.e. control over the Quantity of What is being Eased? And what can be expected when that Easing takes effect?

Definition of QE - "printing money to buy bonds which frees up that money to do other things"

Aug 4/09

Flaherty may take steps to keep Loonie low

June 26 Bloomberg Video
Inflation may 'Crop Up' in Six Months

Why Carney's caution is warranted
Derek DeCloet
Globe and Mail Update, Saturday, Jun. 20, 2009 -from 3rd last paragraph
"A government can raises taxes or invent new ones (goods and services tax, anyone?) – or, as a last resort, let the printing press run harder and longer, and allow inflation to work its painful magic."

Real Yields at 5% Show Inflation Fears Overdone: Chart of Day
June18 - Bloomberg
3rd para "“It seems that while participants have the right idea about the long-term inflationary impact of current monetary policy they have their timing off by several quarters,”

Bloomberg June 15/2009
Carney may ...

The New Normal of Irresponsible Central Banking & Anti-Deflation Fighting
Bloomberg July 15/09

Inflation Will Accelerate Next Decade, Economists Say

Bloomberg Aug 31

"The Federal Reserve will be unable to prevent the trillions of dollars in government stimulus pumped into the U.S. economy from stoking inflation over the next decade, a survey of business economists showed. The price gauge tracked by the central bank will rise 3 percent a year on average from 2014 through 2018," snip

Oh, that's not surprising .... is it?

It seems at certain times within the economic cycle, "new money" can be created by the Central powers that is backed by 1) the Sovereign Assets of the Canadian Crown and 2) the CDN Crown's unlimited Authority to tax the Assets, Goods, Services, Wealth, Gains and Incomes of its Subject/Citizens, but ... this QE "money"(huge gobs of it) is un-encumbered by the annual interest costs associated with money created the old-fashioned "20th Century way" - by issuing interest-bearing bonds as "security/collateral".

The no-interest aspect of this new money-creation process is wonderful because of the huge gobs “quantity” being created. Oh yes, just imagine the extra tax burden that would have been imposed upon us Subject/Citizens if we'd have been obligated to pay interest (even at these low rates) on that amount of additional money “as debt”.

So this brings me to the intriguing part:

a) on the balance sheet of which government agency/ department/ crown corporation is the sum total of the "quantity of this easing" to be recorded, reported and accounted?

b) when the time comes to prudently remove some/all of the excess "quantity of money" from our monetary system and if these huge sums of QE "money" pay no interest (and earn no interest- we borrowed it from ourselves) ... will we pay off/retire/remove the QE "money" first ..... or shall we pay it off AFTER we retire some of the "20th Century money" that does bear interest?

c) if the Stewards of the Canadian Fisc were able to borrow-without-interest-from-ourselves just now, in the midst of a world-wide monetary and economic crisis - why didn't they do it before, when just Canada was experiencing fiscal/economic hardship?

d) if they had done so, would that not have saved Canadians the $20-40 Billion annual public debt service charges that have been ruining government budgets and driving up taxes over the last 30 years?

Ask around for me won't you? Perhaps that Dalton fellow or his Dwight hand man (ha, ha) – I daresay that Circus?Carnival (sp?) chap at the Bank of Canada and that short fellow from Whitby cannot be expected to provide a straight and/or simple answer.

Regards, your chum,

S(dot)

The Emperor's New Clothes on Display on Sussex Drive

2008-12-05T21:08:00.002-05:00

The Emperor's New Clothes on Display on Sussex Drive

published on the Ensign Dec 5/08

My dear Citizen-Subject of the Canadian Crown,

Before my first death in 1944, the Governor General was a "somebody".

... click the link for the rest, my sweet

Who Advises the Gov Gen? - In your opinion, does She have a popular mandate to decide?

2008-12-03T16:53:00.004-05:00

In your opinion does the charming and lovely individual currently occupying the Office of Governor General possess the Mandate and consumer confidence to make a "proper" decision on the Coalition/Minority Government mess?

I maintain that Her decision in September 08 was a mis-interpretation of the King-Byng precedent, please take a moment to consider:
a) If it's proper, legal, and good that She entertain the Opposition Leaders of the House, to ascertain if a gov't-in-waiting exists at this time, why did She not do the same thing in September? (when Mr Harper admitted that he no longer had the patience, ability and/or fortitude to proceed in minority, despite the provisions of his own fixed election date legislation)
and
b) In 1926 the Official Opposition actually held MORE SEATS than the Minority PM Mr King?

Who (so poorly) advised Her in September? and who is advising Her now?

If the decision is a poor one (only time will tell) what remedies would Canadians have available to ensure it doesn't happen thrice?

ELECT the Next Governor General!!

2008-12-03T07:40:00.002-05:00

Every cloud has a silver lining

ELECT THE NEXT GOVERNOR GENERAL - Give Him/Her a REAL Mandate

May we hope that the silver lining of this Minority vs Coalition debacle will be that public attention can be focussed on the method of selecting the next person to be recommended to the Queen as holder of Canada's greatest office, our TRUE Executive Head & National Leader - the Governor General.

If the GovGen was atop the Canadian power totem, all this wrangling in the lowest order of gov't would be minor details in the running of the country - barely needing the attention of the press and/or our Constitutionally empowered Executive.The partisan 'leadership' of the biggest bunch of charlatans in the elected assembly WAS NEVER intended to run Canada.

My preference is for that person to be found by a popular election held simultaneous with every-other General Election, with the term of Office to start 365 days after the House returns (Since any Citizen could run, a single-transferable ballot system -asking voters for their 1st, 2nd, 3rd, 4th etc choices all at once - would be the only way to get even a 50% result).

IMHO only by electing the GG can we hope to have an Officeholder with the mandate to return our bastardized-by MacKenzie-King/too-much-PMO/PCO-power government system to the supremely-suitable and wonderfully-crafted, as-written format described in 1867. Perhaps you'd like to read the Plain Language Version of it

GovGen misinterpreted King-Byng precedent --who's advising Her NOW!

2008-12-01T12:31:00.001-05:00

Executive Summary

-The current Minority/Coalition crisis will end up on the Governor General's desk.

-Ms Jean must Stand Up to the self-serving individuals proffering advice to Her (particularly the elected ones) or in my opinion, She must Stand Down - acknowledging that She is unequal to the challenges of the full, as-written, authority of the Highest Office in the land.

-Ms Jean must tell Mr Harper to form an All-the-Talents Cabinet with members called from all the parties represented in the Lower House and to stipulate that this form of ministry will govern for the term set out in Mr Harper's Fixed Elections Date legislation, irrespective of who holds the office of Prime Minister and further stipulate that the Office of Clerk of the Privy Council will be returned to the control of the Governor General (simply by rescinding Order in Council P.C. 1040-1121 -see link below).

I respectfully ask the Canadian people to endorse this proposed solution.

Your Excellency, Rt Hon. Mr Harper, Editors, M. Belanger,

In my opinion, Ms Jean and her advisors mis-read the precedent established in the King-Byng affair when she granted Mr Harper a dissolution in September (never mind his fixed elections legislation).

Please consider:

King-Byng was much different - in this much-cited-but-never-fully-recounted example, the opposition Conservatives held more seats than Mr King, the Liberal PM, who had, legally-retained/stubbornly-refused-to-relinquish, power after "a defeat" in the popular election.

excerpt from Claude Bélanger,Department of History,Marianopolis College:"Mackenzie King's Liberals had come to office in December of 1921 (party standings: Liberals 117, Progressives 65, Conservatives 50, Labor 2, and Independent 1) but had been unable to achieve a majority because the Western provinces had supported a third party which promised reforms demanded in the West.Despite its minority position, the King government stayed in power until 1925 particularly because the Progressives continuously supported them. An election was called by King for October 29, 1925, under the pretext that the government lacked "a clear majority" and could not dispatch certain important business. The voters responded poorly to the appeal of the government. The results were: Conservatives 116, Liberals 101, Progressives 24, Labor 2, Independents 2."

A carefully reading of the whole backgrounder by M Belanger (or any), will lead the observer to conclude that based on this historic example (verified by our recent 2008 results), the Governor General should NOT have granted Mr Harper a dissolution in Sept 2008, but instead should have considered THEN what is being bounced around NOW regarding the existence of another Member of the Commons who might enjoy the "confidence of the House" and be able to continue conducting the business of a Parliament that Mr Harper had declared to be beyond his patience and/or ability.

Please excuse my impertinence, bordering on hubris.
I am trying not to be disrespectful to anyone or towards any political Officeholder.

I am a fiercely loyal Canadian, 55yrs old and a self-taught student of Canadian history, law and politics.
I am a strict BNA/Constitutionalist.
I see a gargantuan procedural mess unfolding - I am compelled to do something to stop it.

The ONLY Office in Canada with the power to contain this me-first, damn-the-consequences for Canada & Parliament schmozzle is the Governor General.
The GG has been delegated the powers of the Queen (Queen in Council expired with 1982) in the Letters Patent 1947.
The GG heads the Executive (ss.9-16) and needs not follow anyone's advice since this is not a s.13 (GG in Council) circumstance.

By no fault of Her own, Ms M Jean holds an Office that has been stripped of its independent advisors (the Privy Council) by Order in Council P.C. 1940-1121 .
Thereby, since 1940, control over the Privy Council (intended to supervise and contain the Legislative Order) has fallen into the hands of the Prime Minister.

Further, and again with all due respect, and by no fault of Her/their own, Ms Jean and most of Her predecessors since 1950 have been unfit for their Office, they were purposely chosen as recommendations to the Queen, by the then Prime Ministers knowing that they would be subservient to the office of Prime Minister.

This is the opposite of the intention of the British Crown-in-Council and the 1864-7 BNA Act framers.

I make these statements not to hurt Ms Jean personally or professionally and politically but to re-establish the as-written provisions of the BNA/Constitution 1867.

The current Minority/Coalition crisis will end up on the Governor General's desk.

Ms Jean must Stand Up to the self-serving individuals proffering advice to Her (particularly the elected ones) or, in my opinion, She must Stand Down - acknowledging that She is unequal to the challenges of the full, as-written, authority of the Highest Office in the land.

Ms Jean must tell Mr Harper to form an All-the-Talents Cabinet with members called from all the parties represented in the Lower House and to stipulate that this form of ministry will govern for the term set out in Mr Harper's Fixed Elections Date legislation, irrespective of who holds the office of Prime Minister and further stipulate that the Office of Clerk of the Privy Council will be returned to the control of the Governor General (simply by rescinding Order in Council P.C. 1040-1121).

I respectfully ask the Canadian people to endorse this proposed solution.

Every cloud has a silver lining

ELECT THE NEXT GOVERNOR GENERAL - Give Him/Her a REAL Mandate

May we hope that the silver lining of this Minority vs Coalition debacle will be that public attention can be focussed on the method of selecting the next person to be recommended to the Queen as holder of Canada's greatest office, our TRUE Executive Head & National Leader - the Governor General.

If the GovGen was atop the Canadian power totem, all this wrangling in the lowest order of gov't would be minor details in the running of the country - barely needing the attention of the press and/or our Constitutionally empowered Executive.The partisan 'leadership' of the biggest bunch of charlatans in the elected assembly WAS NEVER intended to run Canada.

My preference is for that person to be found by a popular election held simultaneous with every-other General Election, with the term of Office to start 365 days after the House returns (Since any Citizen could run, a single-transferable ballot system -asking voters for their 1st, 2nd, 3rd, 4th etc choices all at once - would be the only way to get even a 50% result).

IMHO only by electing the GG can we hope to have an Officeholder with the mandate to return our bastardized-by MacKenzie-King/too-much-PMO/PCO-power government system to the supremely-suitable and wonderfully-crafted, as-written format described in 1867. Perhaps you'd like to read the Plain Language Version of it

Parents without children, Children with 3 parents - Canada without a Constitution

2007-01-03T09:33:00.000-05:00

Ain't the DD's compilation of news and comment just about the best there is?

Niagara Joe has his pets, peeves and projects like the rest of us, but he often is ahead of the crowd and many times Socratic-ly engages us with questions-for-comment.

In this case, 'our Joe', (just after including Mr. Bob Taubman's excerpt from , "Dixie and the Dominion, Canada, the Confederacy, and the War for the Union", by Adam Mayers. "For Brown [of the Globe and Mail], this states' rights was "a great evil" and so the Canadians should ensure that any "implied" (ed. we call it residual) power rested with the federal government. The Civil War had proved this all too well. In the Canadian model there could never be a civil war, because there would be no basis to secede: the federal government would control the whole nation. ..." ) posed

"Two questions at this point:
(1) what do you believe was the "original deal" (struck in the British North American Act);
(2) what competencies/powers/jurisdictions ought to be transferred to the provincial governments and limitations placed on the federal?"

Word for consideration:
su·ze·rain
1.a sovereign or a state exercising political control over a dependent state.
2.History/Historical. a feudal overlord. –adjective
3.characteristic of or being a suzerain.

su·ze·rain·ty
1.the position or authority of a suzerain.
2.the domain or area subject to a suzerain.

IMHO, much discussion on the 'original 1867 intentions', (muddled and muddied by several, subsequent UK Privy Council decisions) can be avoided if the student of today starts with an examination of the Distribution of EXECUTIVE Powers in Canada i.e. in contrast to the written (and amended) BNA1867, Part VI, ss.91-95, Distribution on LEGISLATIVE Powers - NB make sure your reference copy has s.93A.)

This same student will see that there never was written and never has been any distribution of Executive Powers.

The only changes to the Executive Powers in Canada since 1867 are the Letters Patent 1947, re-stating the BNA1867, s.12 powers of the Governor General to Act on behalf of the Monarch-in-Council (also adding the role as Commander-in-Chief to reflect the independent foreign policy granted by the Statute of Westminster in 1931) and the Canada Act 1982,(U.K.) 1982, c.11 that excised the power of the UK Lords & Commons over Canada.

In other words, notwithstanding any prevarications, mis-information or dis-information that was widely circulated regarding "patriation" in 1982, TODAY, the Monarch still holds all the ultimate power and the Executive is just as superior to the Legislative as in 1867.

The Monarch (as an individual) holds suzerainty over Canada, albeit with most of those powers delegated to the Governor General (as an individual)

The General/Dominion government, through the Governor General IN COUNCIL holds suzerainty over the provinces.

Don't feel badly if this seems awkward or wrong ... with same-day news about Parents without children and Children with 3 parents - it's truly no wonder 21st Century Canadians cannot figure out what the 'Fathers' of Confederation intended.

Also, IMHO, until Canadians get a handle on how NOT-equal-to-the Dominion gov't the provinces are, (never mind the blatant inequality of their sizes, strengths, histories and futures)there is no point talking about transferring legislative powers.

S(dot)Leacock

Specifically,

-The Monarch is the Sovereign and the source of all Authority(s.9)
-The Monarch is the 'highest' office within our triune "One Parliament" s.17
-The Gov General holds all the Monarch's powers (save s.56's Imperial 2 yr Disallowance and the s.26 'GST senator' appointment-on-the-GG's-recommendation power) (s.12, Letters Patent)
-The Gov Gen chooses, appoints, removes members of the Executive's Privy Council s.11
-The Gov Gen assents to all of the General/Central/Federal Government's Bills and Orders
-The Gov Gen may withhold assent or reserve any Bill (s.55) "as an individual"(s.12)
-The Gov Gen appoints the Senators
-The Gov Gen must recommend any "Money" Bill before the Commons can adopt or pass such a measure (s.54)
-The Gov Gen IN COUNCIL (i.e. "by & with" the advice of the Privy Council for Canada s.13) appoints the Lieutenant Governors
-The Gov Gen IN COUNCIL may disallow any provincial Bill within 1 yr. (s.90)
-The Lt Governors assent to all provincial Bills & Orders and may withhold assent or reserve any Bill (s.90) "as an individual"(s.65)

Nowhere in the BNA/Constitution sections concerning the Executive is there one reference to Prime Minister, since that office is a creation of the House of Commons and the only source of that Office's power.

20-20 Hindsight on the Calgary Congress

2006-10-09T11:25:00.001-04:00

Being just one of almost 400 delegates, I waited til the Chairman of the Calgary Congress pronounced the meeting adjourned to make my move.

So as everyone was packing up their resolution kits and information packages, I worked my way to the stage and with a wink to Carol & Jean, the CPAC camera and sound persons (the friendship we built over double-doubles at a chance midnight meeting at a Tim's round-the-corner was ever so providential) I called out to the assembly "Ladies and Gentlemen, indulge me a moment ... invest a few minutes to consider a few of the burning questions that did not reach the agenda or the floor!"

"Who are you and what do you want?, someone bellowed.

"I've got a spouse and 2 kids expecting me home after 3 days away and besides my colleague, has a plane to catch?" someone else added.

I welled up my courage and let it rip, "With God as my witness, I beg you to give me the chance to speak to your minds about a few vital aspects of the Constitution and address your hearts with a new concept of Canada. Give me your ears for 15 minutes and I'll show you a way to finish the "patriation" job Trudeau's First Minister's started in 1982, ... show you how to solve your property rights issues once and for all and .... show you as well, with perhaps just a few minutes more, how to put to an end your concerns about a too-powerful, elected-dictator Prime Minister's Office ... and ... how to recovery our Supreme Court judges as protectors and arbitrators of the written law and de-throne them from their new role as un-elected legislation drafters.

After a short buzz of whispers, Link Byfield the Congress co-chair approached me and said "Friend, the meeting's over ... the hotel needs to tear down the room and I promised half the folks who attended that we'd be out of here before three-thirty ".

"But ... " as he turned towards the sea of faces and slipped the mike from my hand, "if you can cover all that territory, in that short a time ... it might be worth a go"

Link gave me a nod and with a forefinger tapping his wristwatch asked the crowd, "This chap's initiative has taken me by surprise, but something about his introduction has captured my imagination, something about what he said spoke to me and I'll give him the quarter hour ... any one else want a piece of that action?"

A short man in suspenders, with his hat in his hand piped up, "Link, on your say-so, I'll give him 10 minutes and maybe a bit more, but the moment he gets off those topics, .... I'm leavin!"

"Hear, Hear",

"I'm tired and I'm goin'",

"Fred, Daisey's waiting",

"What a dreamer, I'll meet you at the pub",

"Don't bother, let's go dear, I'm paying a 'sitter" and various other private and localized conversations erupted, but after a few seconds, about a third, maybe more of the room settled back in their seats, poured themselves a half-glass of now-tepid water and cracked open the plastic-wrap on just-one-more Westin Hotel mint, while the others went on their merry way.

What a grand, grace-of-God moment, I thought, now don't blow it.

A deep breath and I was off, "My dear western friends - and I include myself as a westerner, ... a resident of western Markham - you've spent quite some time these last few days talking about the elements of the Constitution and the other great rules, regulations and traditions of Legislative governance in Canada, but we did not include any official Congress time, nor did we propose any resolutions, regarding the Executive Powers and the Sovereignty of Canada.

"Time and patience are short at the end of a long day, so I'll get to the point and leave explanation of the details to questions later, from those among you interested to walk a further 1.6 kilometres in my hush puppies."

"Ladies and Gentlemen, if this meeting had been a Town Hall gathering to select issues to present at the Quebec or Charlottetown pre-Confederation meetings or if this was a gathering of town elders in Upper or Lower Canada preparing to meet with Lord Durham in 1839, there would have been discussion on the Crown, on the Governor's powers vis a vis the Assembly, on problems and grievances regarding land grants and title to land, on troubles within and about the Legislative Councils and Executive Councils ... in short, most of the same issues discussed here. "

"But if this meeting had truly been in the spirit of the Continental Congress of 1776, as it was softly inferred by one of the moderators, it would have been consumed with the concept of Liberty ... and Good Government. ... The processes and models necessary to implement Good Government, would have been relegated to a natural second place as the logical outflowings of the primary objective - Liberty."

"Can you imagine how quickly history would have forgotten that Congress' noble recital of Intolerable Acts and grievances if it had not included the "declaration of independence" resolution?"

The difference of course, is we are not in colonial times and are not an oppressed people and a 'world or two' of time and experience - that those Canadian and American Framers set in motion - has passed."

"Nevertheless, we can catch up their 'torch, and hold it high', we can take up their pen - the sword is not necessary, thanks to them- and we can set our sights on particularizing our very attainable goals - Sovereign-Canadian, Self-Government"

"We can do these things because, do to the thoughts and actions of these historic icons and the documents they created, ... we already enjoy tremendous Freedoms of thought, action, assembly, dissent, ... we already enjoy an almost-taken-for granted Liberty to live and worship, work and play, ... we already enjoy Security of our persons and property to a degree that is the envy of the most of the world ... and ... the only tyrants we face are those created by our Own Acts of Omission, ... Apathy, ... Non-vigilance, ... Blind Trust, ... Acquiescence to Authority, or ... in Mr Mulroney's excruciatingly accurate, choice of phrase ... our own Intolerable Acts of "Benign Neglect".

"Friends, the suggestions offered today on representation and responsibility in the Senate, the consolidation of 'who does what' and 'who taxes to do it' in Dominion-Provincial fiscal relations and for reining in a run-away Court system that 'reads in' what it deems more appropriate that what the legislators drafted, are all commendable precis of the wishes and intentions of the attendees of this Congress."

"But I daresay ... they leave untouched the true Sovereignty of Canada - the Queen, the Governor General, the Privy Council, ... they leave undiscussed the Executive Power and the Sovereign Authority to govern ourselves ... the work of this weekend is 'half-full' ... if we do not consider these components of the Constitution/BNA Act ... these aspects that are indeed ... the Essence of the Dominion."

"This meeting could start the process that 'finishes the job' started by the 1982 patriation exercise. (Telling word, patriation - a Canadianization of repatriation - created of necessity when it became common knowledge that the 1982 changes were not returning a constitution, or any powers to Canada, since no constitution or sovereign powers EVER existed here, ...but more on that in the Q & A)"

"We've heard these past few days about 'OR ELSE' -this congress finally saying aloud the second part of Mr Manning's Reform movement's slogan, 'The West wants In' ... or Else!"

"I submit to you, irrespective of the changes you or I agreed to propose regarding the Legislative Powers and Distribution of those Legislative Powers between and amongst the 1 Plus 10 Plus 3 governments in Canada, that 'UNLESS' .... we re-form, the Executive Power, ... make claim to the Sovereign Authority over Canada and re-Confederate the country with these bold new powers in our own hands .... we will not get anywhere."

"I will suggest 12 resolutions and will leave the background explanations of same to questions that may arise on any of the issues raised and solutions proposed that do not seem 'self-evident' to any and all here assembled:

BE IT RESOLVED:

1) That Canada belongs to the Citizens of Canada. We are the owners of its lands, its natural wealth, its assets, its liabilities and its Treasury;

2) That the governments of Canada are responsible to and accountable to the Citizens of Canada;

3) That the Citizens of Canada cast off subjecthood to the Crown-Governors and take up collective Ownership of the Crown in Canada, take up collectively the Sovereign Authority to constitute governments, courts, legislation, regulation, laws and bylaws to govern ourselves;

4) That the Citizens of Canada hereby convey, IN TRUST, our collective Crown Ownership & Sovereignty Authority over Canada, to the Office of Queen of Canada, as presently constituted. This Trust is not permanent 'And We do hereby reserve to Ourselves, Our heirs and successors, full power and authority from time to time to revoke, alter, or amend the terms of this trust as to Us or them shall seem fit'. (borrowed from Clause XV, Letters Patent GovGen 1947) ;

5) That the Citizens of Canada hereby continue the BNA Act precedent to entrust, to the Office of Governor General of Canada, all the Executive Powers and Authorities of the Crown, as written in the 1867 text and in the Letters Patent of 1947;

6) That the appointment of the next Governor General (NextGovGen) be announced with a public proclamation of the Powers and Authorities of the Office as described in the BNA Act 1867 and the Letters Patent of 1947.

7) That the Governor General next following the Officeholder described in resolution #6 (NextGovGen) be appointed only after having been elected, in a general cross-Canada election to be held simultaneous with the General Parliamentary Election.

8) That the election of Governor General be held simultaneously with every second General Parliamentary Election and that the term of Office of Governor General commence 365 days after the date of that election. This time delay will permit the GovGen-elect to familiarize her/himself with his/her role's responsibilities, the issues and opportunities of-the-day and to summon a new Privy Council.

9) That Order-in-Council PC 1940-1121 be revoked and the responsibility and control of the Privy Council be restored to the Office of the Governor General. The Prime Minister and not more than four (4) of the Prime Minister's Cabinet shall be ex officio members of the Privy Council, but none shall Chair a committee and no committee shall be comprised of a majority from the Prime Minister's Cabinet.

10) That the Four Thousand Dollar ($4,000.00) amounts, cited in BNA Act s.23 and s.31 concerning qualifications and dis-qualifications to hold office as Senator, shall be adjusted for inflation to January 1 2006 and applied with no exceptions, effective January 1, 2008 in accordance with the Acts provisions and in accordance with the Declaration of Qualifications in the Fifth Schedule .

11) That to fully inform Canadians (as Owners of Canada, its wealth, its Treasury and all its assets, liabilities) of the current state of fiscal affairs, of the future implications of current government policies and future fiscal decisions, all Federal & Provincial Budgets, Budget Programs, Foundations and Non-Budgetary Programs shall be presented annually and on, at minimum, a 25-year projection basis.

12) That as to fully inform Canadians, in their collective capacity as Owners of the Lands and Assets of Canada, a Statement of Accounts be prepared outlining i) the size and location of all parcels of Crown Land and Real Property (with improvements), ii) the current use, revenue, expenditure and encumbrances (if any) on each parcel, iii) the current valuation-at-cost of each parcel and the current market value, iv) the outstanding claims (if any) and contingent liabilities (if any) that affect each parcel, v) an accounting of all other financial and/or non-financial, tangible and/or non-tangible Assets of Canada, and that this Statement and Accounting shall be the basis for future Canadian decisions on the disposition, development or other use of these Assets and further to aid in determining the prudent rate of return, (from fees, taxation, royalties and any other revenue) to be expected and exacted from these Assets, ."

"Gentlemen & Ladies, I welcome your reactions, your questions and will remain available for further discussion until the last one of you is satisfied"

Link, took the first question, from a perky 'blonde lady' from Edmonton "I thought we already became a sovereign, independent country in 1931 and in 1982?"

And on it went ... incredulity, shock, dismay ... mis-information, dis-formation, no-information was transformed into knowledge and into power to Act .... a revelation of truth about what lay right beneath our noses.

We Canadians had known for some time that something was wrong ... but until now had just never been able to put our finger on exactly what was wrong.

Canada, reborn ...in its own image. Canada Re-Confederated and Re-constituted for the 21st Century without amending a single paragraph or not even changing one piece of letterhead (except for the $4000 part).

Oh my, ... what a difference there might have been ..... if Ihad just envisioned this scenario and written this text two weeks prior to the Congress.

Taking Toronto to 'the next level' - Provincehood

2006-07-23T13:05:00.000-04:00

Dear TorStar Editors,

I have just read through "A Chance to end this city's mediocrity" by Paul Bedford in the Sunday July 23rd Star, wherein he summarizes readers suggestions, and ideas in response to a recent TorStar series about Toronto's potential futures.

Mr Bedford identifies:
-that we are at a "tipping point",
-that there is a "lot of restless energy" looking for solutions,
-that "we can wait for others to solve our problems or spell out a clear plan ... together",
-that "We have all the ingredients to assume control of our own future if we are willing to think, act and plan differently.

In summary, "We are a great city that is full of potential and ambition looking to rise to the next level."

Exactly!

The "next level", the "new model" is for Toronto to become a province.

A province equal to all the others, encompassing at minimum, the Ontario 'Greenbelt Plan' boundaries and maybe using the recent 'Greater Golden Horseshoe' boundaries.

Carved out of Upper Canada/Canada West/ Ontario just as Manitoba, Saskatchewan and Alberta were carved out of the North-West Territories, created to suit the developing governance needs of the times-at-hand.

This move solves the revenue problem. Solves the "senior level of government participation" problem. Frees small-town Ontario from laws that are designed for great-big-city problems (rent controls, gun control, gang/mob control etc).

In short is what MUST happen - for the future of greater-Toronto, all our greater-Cities and the country.

Your humble scribe

Canada's Ptolemaic Equalization System

2006-06-09T08:41:00.000-04:00

Dear London Free Press Editors,

I've read your June 9/06 Editorial on Simpler, Fairer Equalization - the phrases "convoluted equalization formula, disentangle, tax-point transfers" all leading up to your concluding "cumbersome, complex and out of date" summary.

It reminds me of Claudius Ptolemy's earth-centred 'explanation' of the solar system - every time a planet's observed motion disagreed with the theory's model, he created a new 'epicycle' that 'explained-away' the observed fact and pertetuated the correctness of his thinking.

May I suggest that, just like with Ptolemaic theory, the premise of Canada's equalization is not-the-best, given the knowledge we possess in 2006.

In my view, the theory that Canadian life 'flows through and is best served by the 10+3 Provincial/Territorial Treasuries' must be placed in the 'proven-false' bin along with the geo-centric models of the solar system.

If Canada intends to be ONE country (vs 10+3 mini-kingdoms) then National Programs, ie programs of equal need/interest/benefit to all citizens regardless of place of residence, must be administered National. Similarly programs, issues, topics, matters of a strictly "local and private matter" should have the Principle of Subsidiarity applied.

The Equalization discussions should not be about how to "equalize" the revenues of the (blatantly UNequal) provinces through some central subsidy system (with fiscal 'epicycles' for each and all), but to create a Canada where 1) the provinces are much more equal, and much more able to provide for the "local and private" needs of their constituents and 2) 'the big stuff' is administered around the greatest pool of contributors and beneficiaries.

The question for the Little Kings at the upcoming Premiers Pow-Wow (alliteration not discriminatory) what would you accept in "trade" if Ottawa assumed full responsibility for Healthcare Funding?

Civil Service $$ Waste and new paint on an old barn

2006-05-29T17:19:00.000-04:00

Maclean's magazine has an article on wasteful gov't spending this week.

It's Ok as far as it goes, but the problem AND it's symptoms goes far beyond the scope the writers were allowed.

It quotes dear ol' Reg Alcock, Mr Dithers' President of the Treasury Board, who "studied these shortcomings (in reliable reporting data on civil service travel etc expenditures)closely during his two-year tenure. He discovered that they date back to at least the 1980s, when the government attempted to apply private sector management theory to its operations, spreading authority further and further down the food chain. "The new mantra was let the managers manage," he explains. "The idea was to move operating decisions as close to the point of contact with the customer as you can.""

Sorry Reggie, sorry Charlie Gillis and Michael Friscolanti (the Macleans' writers) but "Let the managers manage" came out of the 1962 Royal Commission on Government Organization headed by J. Grant Glassco (see their work as "milestone #9"s on the Treasury Board Website) .

In the 60's Canada was enjoying a time of plenty, there was tons of tax money flowing in, no debt and the government was contemplating taking on tasks that were huge (at the time).

During the Depression and in WWII the government intervened tremendously in private life (and business) for the greater common good. In the 50's the same bunch in gov't (Wm L M King and his extremely capable, right-hand man C.D. Howe) decided THEY could run the economy in peacetime prosperity just as well as they had in times of war and hardship.

So they did. They ran Canada as if they owned it. But unfortunately the Executive Council ( Cabinet) of the House of Commons has no statutory or Constitutional power to do anything like that on their own. The actions of the Legislative Order are vetted and approved by the Executive Order .... at least that's how it's written down.

But no one challenged them (apart from Dief and resulting the Pipeline Fiasco that caused a 5 year break in the Liberal Party's 'transformation of Canada').

The Cabinet just continued to use the powers of the Privy Council committees (Treasury Board et al) that they'd scooped up in 1940 (Order-in-Council P.C. 1940-1121) to supervise their own work and approve their own decisions.

Odd how so many are approved, eh?

Anyway, now you know why the government is a mess - the Privy Council WAS NEVER INTENDED TO BE CONTROLLED BY THE PRIME MINISTER.

The Privy Council was to be another double-checking level, populated with really wise & truly trusted associates of the GOVERNOR GENERAL, who is entrusted with all the powers to decide or deny (BNA Act ss. 55-57) everything done in Canada, on behalf of the Crown (another day for defining that one).

So, do-gooders, investigative reporters-with-spreadsheets and new-broom-Prime Ministers, before doing anything else on accountability, re-sever the Privy Council Office from the Prime Minister's Office (just repeal the Order-in-Council, no legislation required) and re-institute a double-check, by independent, officers-that-you-did-not-choose of your own minority-House decisions.

Without that, all is just new paint on an old barn.

Mullahcracy & the PMO-PCO's Power Combo-Platter

2006-05-22T11:17:00.000-04:00

Happy Victoria Day!

My goodness the observation of the Old Queen's birthday has certainly undergone some changes. Now there's nothing much done formally outside the members of the Royal Society of St George - except firecrackers and bottom of the driveway fireworks displays.

Hmmm, the Dominion of Canada (or should we say the Canada of Canada since even July 1st has been renamed) has put its British roots asunder. Pity. Pity indeed.

One good thing though, the Toronto Star delivered a 'complimentary' copy of its Holiday edition to my friend Edward's home and we all lounged outside on the patio and indulged ourselves on the 'extra time' that the Victoria Day Holiday had provided us.

This issue of the Star had an article on the "Mullahcracy" operating within today's Iran.

The author, Reza Aslan, characterizes the regime: " In truth, the Islamic Republic is neither Islamic nor a republic. It can be described neither as a theocracy nor as a democracy. Iran is something else entirely. It is a "mullahcracy," a bizarre hybrid of religious and third world fascism that, like the fascisms of the past century, has turned into an embarrassing example of populism gone awry."

The piece finishes with a question posed to the author's cousin's (Afshin) brother, Saleh, "Is this the Islamic Republic you had dreamed of? Is this what you fought for?"

Saleh shoots a quick glance at (his cousin) before stretching his gentle, bearded face into a gloomy half smile.

"No." He shakes his head. "This is something else entirely. I can't even remember what happened to that dream."

The article outlined a quick history of the post-Shah constitutional history:
"Too often, Iran's baffling, bipolar government is dismissed as a "theocracy." But Iran is actually not a theocracy. A theocracy suggests rule by God, and as any Iranian will tell you, God is noticeably absent in Iran.

In a theocracy, particularly an Islamic theocracy like Saudi Arabia or Afghanistan under the Taliban, the Qur'an is the only constitution. Yet the Islamic Republic is constructed upon a remarkably modern and surprisingly enlightened constitutional framework in which are enshrined fundamental freedoms of speech, religion, education, and peaceful assembly. (bold emphasis added, ed.)

Iran's constitution calls for equality under the law with regard to race, ethnicity, language, and even gender. It provides for a comprehensive amendment process as well as the opportunity to launch national referendums to decide the course of the country.

Most importantly, Iran's constitution stipulates that all domestic affairs must be administered "on the basis of public opinion expressed by means of elections," thus establishing an empowered legislature and a strong, independent executive.

All of this exists under the moral guidance of a single clerical authority - the faqih - who is appointed by an "assembly of experts" based in Qom, which, in turn, is directly elected by the people (if no single religious authority is qualified for the post, then the assembly chooses a "Supreme Court" of three to five clerics).

In theory, the faqih was intended to be a papal figure who would ensure the "Islamic character" of the state. However, in the chaotic aftermath of the revolution, the parameters of the office were dramatically altered as Iran's powerful clerical establishment - helmed by the overwhelming charisma of Iran's first faqih, the Ayatollah Ruhollah Khomeini (who invented the post) - put into effect a series of constitutional amendments and judicial rulings that spectacularly extended the scope of their power.

They relied on their command of personal militias and extensive numbers of Orwellian subcommittees to wrest control of the provisional government from the hands of the capable, if rather dour, technocrats who had been appointed to lead Iran after the fall of the shah.

By the time Saddam Hussein invaded in 1980, the time for debate and dissent over the nature of the republic was over. What had begun as a vibrant experiment in Islamic democracy quickly deteriorated into an authoritarian quagmire - a state ruled by an inept clerical oligarchy with absolute religious and political power."

It goes on to talk about the revolution's supporters and their disenchantments:
"These days, there is a tendency, both in the West and in Iran, to view the revolution of 1979 as an Islamic revolution instigated at the behest of the Ayatollah Khomeini. This is a historical fiction that emerged out of two and a half decades of post-revolutionary propaganda.

The truth is, there were dozens of voices raised against the shah; Khomeini's was merely the loudest. In fact, a full 10 per cent of Iran's population actively took part in the overthrow of the shah, thus making it the largest popular revolution in modern history.

Feminists, communists, socialists, Marxists, secular democrats, Westernized intellectuals, traditional bazaari merchants, die-hard nationalists, religious fundamentalists, Muslims, Christians, Jews, men, women, and children: nearly every sector of Iranian society was represented in the revolution. Khomeini's genius was his intuition that, in a country steeped in the faith and culture of Shiism, only the symbols and metaphors of Shiite Islam could provide a collective language with which to mobilize a disparate coalition that had little in common save its virulent hatred of the shah.

By the time the shah was ousted and the Islamic Republic was born, both Afshin and Saleh had been lured away from their Marxist roots by Khomeini's mystifying Shiite populism.

In the 1980s, Saleh entered the Feyziyeh spurred by the dream of establishing a new kind of nation - one both democratic and Islamic, both quintessentially Muslim and uniquely Iranian - while Afshin fought on the front lines of the battle against Saddam Hussein to ensure that dream would survive.

In the 1990s, Afshin and Saleh were brought together again, this time as leaders in the energizing reform movement that gripped Tehran in the wake of the stunning 1997 presidential election of Muhammad Khatami, whose goal was to unearth the democratic principles of the constitution that had been blithely ignored for more than a decade.

But Khatami proved unable (some say unwilling) to propel the reform movement to its fruition. He withdrew his support, allowing the movement to disintegrate under mass arrests, torture, and murder. The reform movement fractured, and Afshin and Saleh went their separate ways. Saleh returned to the Feyziyeh to fight for democracy from within the system; Afshin now claims that the system itself is the problem and must be abandoned.

Just before the aforementioned closing paragraphs the author recounts the "theory behind clerical rule":
"There are many ways to get from Tehran to Qom," he says. "We could take a car, a bus, a plane, or we could walk. But the cleric is the one who has spent a lifetime studying the map. He has taken the trip many times. He knows with certainty which is the best way. And if he declares `by plane,' then everyone follows him."

"But if I choose to walk, won't I still get to Qom?" I ask.

"Of course. However, the path will be longer and more arduous."

"And if two clerics differ on the best path, which one is right?"

"Technically the senior-most cleric - the one who has taken the trip most often. But really, they are both right. It is up to you and me to decide which one to follow."

And therein lies the central paradox of the Islamic Republic. Shiism is a religion founded upon open debate and rational discourse. In its nearly 1,400 years of history, no Shiite cleric has ever enjoyed unconditional authority over another Shiite cleric of equal learning.

Nor has any cleric ever held sole interpretive powers over the meaning of the faith. The Shia have always been free to follow the cleric of their choice, which is in part why Shiism has blossomed into such a wonderfully eclectic faith.

It is also why the majority of Shia both inside and outside Iran no longer view the Islamic Republic as the paradigm of the Shiite state, but rather as its corruption."

So, with flagging patience, my friend's wife hesitantly asks, "What's that got to do with Victoria Day or the darn "Canada of Canada", as you've just started calling it? (The hesitancy was in case the query brought on a long discourse about abstract concepts and long-forgotten aspects of special interest to me - the usual format and subject matter of almost ALL my pontifications)

"Well, the same thing, albeit side-ways, has happened to the superbly-crafted governance system here!", I exclaimed, "Just look at the 'analysis' piece by Susan Delacourt, in the first section of our complimentary Holiday issue!"

In "PM needs to show respect on the job" we learn of the tough time the Rt. Hon. 'respect me, if you cannot like me' S. Harper had last week.

It seems Ms D and her pals in the press corps (who already were upset about the new rules he had in mind for scrums, press conferences and casual chats with his Cabinet & caucus members), thought Mr Harper was 'angrily pre-emptive' on Afghanistan, high-handed on withdrawing the whole concept of an Appointments Officer (til he had more guns in the House) and dictatorial for announcing both the windup of a registry for long-guns and withdrawal from the (third-world's cash-for-emission-credits) Kyoto protocol, without bothering to bring the later two issues up in the Commons.

Ms D. has taken such umbrage with the new guy's lack of respect for "those they see as mere obstacles to getting their way" that she trots out, the 'hidden agenda' card as the reason for Mr Harper's "obsessiveness about control" right after accusing him of "blatant mimicry" of dear, ol', Mr. 14%-in-the-polls, Myron Baloney's "style" towards the press.

Does the press corp forget the arbitrary, Cabinet decisions of past administrations? Have they forgotten how many Orders-in-Council have affected the lives of Canadians without a breath in the Green Chamber?

The only thing audacious about the current minority-PM is his willingness to assert himself and the obviousness of his agenda of event and legislation management geared to proving his administration worthy of a 50%+1 mandate.

If you were that close to being in virtually-unchecked power over a whole country, would you do anything differently?

Our friend and PM, Stephen (Alberta Wants In -or else!) Harper is within 18 months of BEING the Pierre Trudeau of Alberta, the Wm L.M.King of Calgary, the M. Baloney of Fort McMurray and he is NOT going to blow the opportunity.

The way convention-has-modified-constitution in Canada, being majority Prime Minister means YOU ARE the King - but more powerful than any king of England has been since 1688's "Glorious Revolution".

It may be disrespectful of me to bring up the past on Victoria Day, but since Mackenzie King decided he was wise enough to start 'managing the whole economy' (Economic Depression, WWII and, why not, thereafter), every Prime Minister has had far too much power.

More power than was ever decided to be allocated to the Leader of the biggest bunch of the 'lowest rung on the ladder' of Canada's triune "One Parliament" (BNA Act s.17) hierarchy.

Mackenzie King usurped the Governor General's Advisors, their supervisory role over his Cabinet and then undermined the independence and freedom-to-veto of the Governor General's Office itself - masterful done, but his revenge on Lord Byng resulted in too much power being concentrated in the Office of the PM for any one man.

Could Trudeau, Mulroney, Chretien have done what they did in any other country?

Most recently, if time (and trials) convince the Canadian public to strongly suspect that the PMO/PCO combo-power package was vitally involved in controlling the flow of (excess) funds created in exchange for not-much-work by contractors under the Sponsorship Program, surely ( some say shurely) the call will go out to rein in the power and double-check the powers of the King/PM.

I can see the pickets' slogan-boards now "Reverse Order-in-Council P.C. 1940-1121" and "Give the GG back Her Prerogative Powers" plus "There's no Shame in Withholding Assent on a bad Bill"

My lands, could it possibly happen here?

May the day be lovely
and the BBQ be heavy laden,
Enjoy the day that celebrates your country's British roots!

QPP/CPP -present expenses-future benefits & the Debt?

2006-05-13T18:02:00.000-04:00

Dear Financial Post & Jon Kesselman,

re: "Rebalance public pensions", FinPost, May 12/06

If we are mandatorily removing 9.9% of an employee's pay in addition to each taxpayer's contribution of 15% of every tax-dollar (let's call that 30% of every personal income-tax-dollar) why don't we stop fiddling with 'generational equity' issues in CPP/QPP contributions vs benefits and just focus on paying off the $600B Gross (~$500B net) national debt?

Less debt = less interest charges = less revenue necessary to service debt = lower taxes = more affordable life = more money leftover to save for retirement.

Ontario's Loss of Clout is whose gain?

2006-05-13T17:33:00.001-04:00

Dear Windsor Star Editors & Barbara Yaffe,

Ms Yaffe's article "Ontario's loss of clout" Fri May 12/06 was well-written in a nice easy readable style.

In my view, it accurately represents the current conventional-wisdom feeling towards the pretty-darn-good-so-far Conservative minority government.

But this is a chess game. Phase I may look like it's favouring Quebec and is motivated by seat-pandering in the next election as Ms Yaffe suggests, but there's more to come.

It's decided already.

Phase II (the big Fed-Prov conference on equalization and fiscal imbalance etc) may look like it's favouring ALL the provinces at the expense of the (former) bloated central gov'ts bureaucracy and expensive 'big' programs idea of how Canada is administered.

But Phase III (and the real agenda) will favour the oil-and-gas-fired stewards of the Alberta economy.

Mr Harper thinks he's managing things (and the media) quite well - and indeed he is (as anyone with a plan and some savvy could with the arsenal of weapons inherent in the office of 'Friendly Dictator' of Canada)

But the question-of-the day remains: Would Mr Harper (or anyone) be taking the steps he's planning if oil was $15/barrel?

Ontario's Loss of Clout is whose gain?

2006-05-13T17:33:00.000-04:00

How to fix Cdn Judges, Ministers, Gov't - out of control?

2006-05-10T07:45:00.000-04:00

I'm ever so glad to have "missed" the years 1944 through 2005 - some say I was dead, some regretted my passing, others never missed me.

The unique perspective that comes from being 'away' from a topic or place, allows you the opportunity to see with your own "fresh eyes" what you, yourself already knew/know/ think you know.

Since my revival late last year, I've studied the comings, goings, sayings and commentary of Canadian politics and found myself so devastatingly out-of-touch with current 'public' behaviour and 'public' procedure that I had to go right back to my old textbooks and encyclopedia to establish whether I was crazy or if 'everybody else' was.

I'm prompted to try to outline the symptoms plaguing the Canadian politico-socio-economic psyche, summarize them as a 'root problem' and then make a recommendation or two to address the root problem.

Instead, I'll say but this:
Canada has lost its Crown.

Every single Judge, Minister, Prime Minister, Senator, Privy Counsellor, Deputy-Minister, Asst-Deputy Minister, Parliamentary Assistant, Premier, MP, MPP, MLA, MNA (every public official) is accountable to ONLY one entity - The Crown ( and of course, their own conscience).

Read the Oaths of Office.

If the Government and all it's officials are accountable ONLY to the Crown, the question then is, Who/What is the Crown?

1) A solitary person headquartered in London England?

2) The Office that individual holds?

3) The Office of the individual who holds the title of Governor General in Ottawa/ Lt Governor in each province?

4) The individual who holds the title Prime Minister?

5) The tripartite 'One Parliament' outlined in s.17 of the BNA Act 1867 ?

6) The Chief Justice of the Supreme Court?

7) The people of Canada, collectively?

8) No one and no thing?

It must be one of these.

But which one.

And the most fascinating part of this exercise is that, Canada, Canadians, all the experts, all the pundits KNOW the answer.

But no one seems to be 'connecting-the-dots' to see the implications on Canada and Canadians.

IF our Stewards of the Crown's assets, liabilities and treasury are ONLY accountable (constitutionally) to the Crown, then why isn't 'the Crown' supervising and managing their activities and behaviour with a stronger hand?

IF these same Stewards are NOT accountable to the people (except to influence their vote at election time), WHY does everyone seem to think we have a 'democratic' system?

Or does democratic now mean "the right of each and every individual to be personally beguiled/bribed with their own share of the public purse"?

So if you can see this as 'a problem' (i.e. no one caring who/what is the source of all Canadian Sovereignty), can you see that some of the Stewards might be taking advantage of the situation?

If this "cats away... mice will play" scenario seems likely to you .... what might be the solution?

My friend Ed(ward) E. Trober tried to address this from the Monarch's perspective when he wrote a re-vision of the Quebec Act of 1774, as a modern-day Royal Proclamation.

Perhaps his idea of a 'deemed disposition' of Crown sovereignty might resonate with you.

Harper's Budget stalling? saviour-in-waiting? SoCred in PC clothing?

2006-05-08T16:30:00.000-04:00

Dear Editors & Mr Radwanski,

Thank you for drawing my attention to "Restoring Fiscal Balance in Canada - Focusing on Priorities" in your excellent piece on May 5/06, "Harper's just getting started"

I agree with your 'stalling-tactic in a minority' analysis, and therefore the point we all must consider is where will Harper try to lead, once he has a majority?

I'm a little more skeptical than you on any cabinet-gov't's ability to do things in a hurry and while I DO think this current bunch have a MISSION and a PLAN, I'm less concerned about Harper-in-gov't than I was when the Liberals were in power, particularly after reading "Restoring ..." as you suggested.

The Liberals mission was to get re-elected, the plan: do anything to achieve it. These Reformed SoCreds in PC clothing have a mission: emancipate the provinces (i.e. the oil-and-gas businesses in Alberta, and if Quebec or somebody else gets emancipated too - all the better) and a plan to accomplish the emancipation by un-bundling taxes/ services/ programs/ responsibilities/ jurisdictions once in majority.

But may I suggest that rather than letting Canadians worry about 'what's up the sleeve' of this cabinet or the next one, AND rather than letting this, or any subsequent administration spend too much time worrying about 'getting tossed out before they can condition the voting public to accept implementation of their bare minimum objectives', that instead, we as voters and taxpayers participate fully in the (piles of) consultations suggested in the Budget 2006 document.

Our one plea, our one demand, our one 'must-have' item at these "all-stakeholder" conflabs - 25 year budgeting.

For if we can see the 'plan' for a generation ahead (along with supporting stats, premises for projections etc), then we will be able to ascertain the direction of the cabinet and be able to discern variations from 'the plan', ask intelligent questions and vote accordingly.

The price of freedom is eternal vigilance, the springboard for installing a poor/bad/'hidden agenda' government is complacency and the vital (now-missing) component in accountability to the public is access to full and comprehensive data.

If we as voters/citizens move up the sovereignty ladder from 'trusting stakeholder/passive taxpayer' and start acting more as 'informed shareholders', DEMANDING accountability from the stewards of OUR assets, OUR liabilities, OUR collective treasury perhaps we'll get the government we deserve.

Stephen(dot)Leacock

If an economist falls in the Forest, does it make a sound?

2006-01-28T06:50:00.000-05:00

My, my, my Canada is sure enough at a crossroads.

A dilemma perhaps, but surely a point of decision and opportunity.

During the 'Phoney War' phase of WWII, Canada's central government used its extraordinary powers under the War Measures Act, the Income Tax Act, its budget 'spending power' and its sovereignty/suzerainty over the Bank of Canada to transform Canada's industrial focus from comfy self-satisfying complacency into a war-production mega-corporation.

Wm L M King's government saw Canada was the last hope for Great Britain's survival and mobilized everything towards solving the Mother country's problem. The government took over the economy - industry by industry, factory by factory, commodity by commodity and person by person. It was a roaringly successful 'planned' achievement.

Canada, after acquitting itself admirably with personnel in WWI, came into its own as an industrial nation through this grand socio-economic-political-industrial 'plan', proving that indeed necessity IS the mother of invention.

After the war two things happened. 1)The conceivers and executors of this grand undertaking needed 'another project', and 2) a new government philosophy 'central government planning' became desirable in the minds of 'people who stood to gain from it' - the central planners and the citizens who thought they'd personally benefit from the government 'looking after them'.

Farmers, Unionists, the poor, the educators, 'communist-socialist' thinkers as well as the 'we can do more FOR our people' governors all saw the Canadian war effort (and both the enemy National Socialists and allied Russian communist economies) as proof that central management of the entire economy was do-able, a public GoodThing and a political GoodThing.

The government i.e the House of Commons Cabinet decided to 'run' the economy in peacetime too.

It's not too much to imagine - after all, these fellas had been hobnobbing with Churchill, Roosevelt and Stalin (who were planning to re-construct and 'run' the world. Surely the Canadians could 'run' Canada.

They had reams of Statistics (and statistic gathering departments) to monitor performance, they were in tight with (if not in control of) the manufacturers, the banks, the markets and resource producers, they had absolute control over the Crown's sovereign assets - the land, the mines, the forests, the waters- and they had the confidence of the people who were acclimatized by the war-effort to having the government tell them what to do and what not to do.

The Office of Governor General was 'patriated' and the decision made to place a well-respected malleable sort of 'local' in that job (the GG's constitutionally-entrenched set of independent advisors, the Privy Council, had already been absorbed into the Office of the Secretary to the Cabinet by Order in Council P.C. 1121, 25 March 1940).

Hooray!! the 2nd half of the 20th Century would (at least might) belong to Canada!

Industry was stimulated, investment was sought (& found), highways and seaways and pipelines and homes (like crazy) were built. Consumers bought cars and appliances and homes. Newcomers poured in. Virtually everybody had a job AND THREE KIDS. - Marvellous.

Then the 'we can do more FOR the citizens' crowd took over.

In addition to baby bonuses, old age pensions and unemployment insurance, the decision was made to provide government coverage of "major Medical" expenses - anything that required Hospitalization (the little stuff was covered by private insurance, savings or charity). The upshot being that zillions of hospitals were built.

AND WHY NOT!! all the babies, all the immigration, all the employment, the opportunities still untouched - the all-around prosperity prompted the feeling that Canada was on a never-ending 'up' cycle and the government COULD do more and BE a vital force in Canadian everyday life.

How grand. So grand that the decision was made to cover all medical expenses (especially if the minority-in-the House Cabinet wanted the support of the CCF/UnionDP to keep it in office)

And it would have grand ... if the baby boom had continued unabated.

But as soon as the 'statistic' showed that the birth rate was levelling and then falling away all that ended. New 'plans' needed formulation. New projections needed analysis.

But no new plan was enacted. No new course of action -from the new data- was followed.

As revenues slipped relative to expenses, a decision had to be made. Cut services, raise taxes or borrow the shortfall.

So thought went into deciding to borrow. After all Keynes had said that governments could borrow in (typically short-term) 'bad times' as long as they paid off the debt in the (bound to be) ensuing 'good times'.

Tommy Douglas didn't believe in that - he only introduced medical coverage because he had the revenue to cover it (and because he was a Big Government is Good, central planning kind of guy).

Hmmmm. The Minority in the House Cabinet took the easy way out.

Pity. Only in Canada, you say?

No it was done all over the world - governments borrowing the money to pay for the programs that they'd promised to deliver instead of raising the "premiums" to cover the proven and predictable increased costs.

Insurance. Health Insurance, Unemployment Insurance - were they devised and run on 'insurance' principles?

Baby Bonus, Old Age Pension, Canada Pension. Were these programs paid for by 'magic money' that flowed from the natural resource wealth of the country and flowed as dedicated revenue streams to the programs?

Nope, they were funded by pay-as-you-go plans. The current earning public paid each year for the benefits each year. As soon as the 'statistics' showed that the Baby Boom was over, these plans were dead-in-the-water.

When did we know the Baby Boom was over? 1965? 1968? 1972? 1974? 1979?

Was it discussed it the general election of that year? the next one?

Hmmmm was somebody pulling the wool over somebody's eyes? or did we all just keep our eyes shut?

With all that borrowed money out at interest and more money being borrowed every year to PAY the interest (and this is happening in many other countries too) - what happens if interests rates go through the roof?

We all know what happens.

Joe Clark & John Crosby tried to tell us. But we didn't want to hear.

Trudeau was busy on legacy matters (after all you cannot expect a legend to admit he was wrong and that he and Pearson had screwed up the fisc for the next two generations just to maintain minority Cabinets).

Brian, Mike & Maz expounded on the concepts of 'operating' deficits, budget deficits and debt reduction, but interest rates and inflation ran against them.

Finally a world-wide bank-recession with high interest rates brought everything to a halt, a realization of errors and a determination that "if another boom came, we wouldn't flit it all way"

Except we were flitting it all away - and only the interest cuts of post-9.11.2001 have kept the federal budget in surplus (albeit at the expense of the greedy provinces, now forgetting that they agreed to accept lower federal transfers IF those transfers came without strings-attached)

So here we are. A country accustomed to central planning, accustomed to government telling us what's good for us, accustomed to being misled by half-true information, accustomed to having our butts saved by the 'next boom' and accustomed to not really paying that close attention to the charts and graphs that show the 'economic plan for the next 25 years'.

But wait, we don't get to see 25 year projections.

We got 5 year ones (but always too optimistic under Maz et al), 2 year ones under pre-Dithers Martin and now 5 year projections again(this time always too pessimistic).

Only the Ontario Government (Toward 2025) & the Clear-eyed Vision committee in Quebec are making assessments of the least likely,best possible and most likely scenarios for the next generation.

And they say it cannot go on this way!

The Canadian attitude of entitlement-to-our-entitlements is un-sustainable.

There will not be enough people and money to pay for all the stuff the 'caring and sharing' crowd promised based on perpetual Baby Boom projections.

Why do you think immigration policy has gone nuts? the central planners are trying to save their butts by bringing in MORE people.

Sadly the 'trade Guild' attitude (and regulations) and our ridiculous taxes are keeping the entrepreneurs and professionals out and we're just getting reunification of family grandparents etc, ne-er do wells/ spongers from around the world that think that free medical and a free education for their kids is a bargain (the smart ones keep dual citizenship and play in both countries).

Enough of the complaining.

I started out saying that Canada is poised at a crossroads.

We are perfectly equipped to be one of two extra ordinary nations.
1) The dream centrally planned 'true-socialist' country. Where everybody OWNS everything, but OWNS nothing. Everybody contributes to the general good and is given what they need. No one goes hungry, no one has extravagant wealth.

Why socialist heaven? because they are no property rights in Canada - everything here is a Crown grant. The Crown owns everything (save trademarks and copyrights) and the government has usurped control over the powers of the Crown.
Plus we're overloaded with people 'making a living' or just scrapping by who have no idea how their going to live next year, nevermind how they'll retire.
A Government that promised (and could prove) that they'd take care of all those worries would be elected immediately (just check the Family Income Averages on Statscan)

2) The Dream Mixed-Economy. Where everybody shares a piece of the natural wealth revenue, contributes a fixed and predictable portion of their income to the provision of government programs that are NOT insurance-based and everyone contributes to INSURANCE based programs based on the risk they present TO those programs.

Take the biggest INSURANCE-based program, healthcare funding, OFF the budget.

Take that $80-100 billion in taxation off too.NB that is a sum just about equal to total fed +prov personal income taxes !! Take it off the budget, dedicate it to healthcare!! Let there BE a single payer and let that payer be accountable for what they collect and how they spend it!
Nationalize the program, enlarge the pool of contributors and unify the coverage. Go back to1950's basic philosophy, totally cover the big stuff and let citizens cover the first oh, $2500/yr themselves through, private insurance or savings.

With the provincial budgets cut in half and much less need for equalization and criss-cross govt-to-gov't subsidization look at Section 94 and consider unifying all the laws in the non-civil-code provinces (Quebec can participate too if they so choose).

With the laws all similar across the country, look real hard at the boundaries.
Does Longitude matter?(latitude does sortof represent climate)

Since the governors of the country have officially given up on God (and are indoctrinating the public in the Secular Humanist me-first, me now State Religion), why preserve boundaries based Protestant & Catholic sentiments?

Further since we know longer 'discriminate' based on ethnic or national origins, why keep boundaries based on those historic settlement zones?

Then maybe we'll look at creating 10-30 city-provinces that can finance they're own everything-but-healthcare provincial mandates and the balance, the Great Non-urban, East-North &-West can provide for itself from stewardship and husbandry of the natural resources.

Toronto can sustain itself, so can Montreal, Vancouver and Calgary and Edmonton BUT they cannot not when the natural resources are sold off as raw materials, the short-term jobs are in the hinterlands (benefiting the provinces) and these same cities are forced to pay through Ottawa for the under-developed areas of Canada where the resources are being stripped to be sent out of the country as raw materials (and that's where I started)

Canada you choose.

Tell your governors you what 25 yr plans.

See if they can fool you again

The (Forgotten) True Purpose of the Upper House, styled the Senate

2006-01-18T09:15:00.000-05:00

Dear Edmonton Sun Editors,

Ms Romanowska does an excellent job on Jan 16th/06, of outlining the implications and pitfalls for half-measure-reform of the Upper House.

The true purpose of the Senate (in addition to giving the 2, less-populated "regions" representation equal to the 2, more-populated ones) is to represent the propertied class of Canadians - why else is this office the only position in Canadian governance and public service to have a property ownership standard and a net-worth qualification (s. 23.3, 23.4. 23.5, 31.3, 31.5)?

Unfortunately in my view, this is the only number/statistic/paylevel/etc in all of Canadian history, politics or economics that has NEVER been "seasonally-adjusted".

True Senate reform will come from first applying an adjustment-for-inflation to the $4,000 ownership & net-worth qualifications thereby restoring public appreciation of the Senate's superior constitutional place in the triune hierarchy of our "One Parliament" (s.17).

Reckless Revisitation of A Bad Law

2006-01-17T22:09:00.000-05:00

Dear Globe & Mail Editors,

The write up the other day by that well-groomed feller with the nice clothes, Andre Picard, only covers half the story and in my view, was crafted with a wee 'slant' on some of the facts.

The article seems to indicate that it is somehow improper for a duly-elected government to repeal a law.

Further the inference is that the law in question has already been vetted and totally approved by the Supreme Court when in fact this is untrue.

The Civil Marriages Act resulted from 7 provinces following the lead of the Appeals Court of Ontario that decided in the Halpern case to disregard the 3 other provincial courts decision to stay the application of their "redefinition" of marriage until the Parliament of Canada had had the opportunity to consider and legislate on the fact that no express definition of marriage existed in Canadian or British legislation.

No definition in statute law that is except s.1.1 of the Modernization of Obligations and Benefits Act of 2000 that stated "For greater certainty, the amendments made by this Act do not affect the meaning of the word "marriage", that is, the lawful union of one man and one woman to the exclusion of all others " that the Ontario court simply chose to dance out of their orb of consideration.

In other words, 3 of 4 courts found even though they felt that in light of the Charter (with the read-in analogous ground of sexual orientation) the denial of marriage licences and registrations to SameSex couples was wrong, they still felt obligated to defer to the Federal Parliament (that holds constitutional jurisdiction over Marriage).

The Civil Marriages Act is based on the one Court that bulled ahead and "made new law" based on a common law definition from an off-point, bigamy case from 1866, while simultaneously disregarding the 'for greater certainty' section of a 2000 Canadian statute that expressly dealt with SameSex benefits and obligations.

In addition, the Reference to the Supreme Court was completely inconclusive -they refused to answer question #4 (Is the opposite‑sex requirement for marriage for civil purposes, as established by the common law and set out for Quebec in section 5 of the Federal Law-Civil Law Harmonization Act, No. 1, consistent with the Canadian Charter of Rights and Freedoms? If not, in what particular or particulars and to what extent?)

They refused because they had no authority to answer YES - there was no case on appeal before them.

They could not legally overturn the Halpern case because it was not before them - Ontario and the Federal Justice Dept had purposely NOT appealed it.

The Court was legally powerless to say Yes and unwilling to say NO when that was the only choice left.

Further, the article's panel of 'constitutional experts' have forgotten the Disallowance power (s.56 BNA Act 1867).

Mr Harper can simply get a majority vote in the House and with that and his position as Prime Minister simply ask the Queen personally (i.e.no longer "in-Council" since Canada Act UK) to disallow the Civil Marriges Act any time before July 20, 2007.

Perhaps in future you'll cover all the story, not just the parts you prefer to support.

Backgrounder & References

http://robertede.blogspot.com/2005/12/homosex-marriage-act-saves-canada-or.html

A party, good ale and a leak - what's unusual?

2006-01-05T11:36:00.000-05:00

Simplicity out of Complicity - the Income Trust Mish-Mash

Well, a certain pall has dropped over the Finance Department, the Prime Minister's Own Office, the Liberal party and all the fellers and gals who work therein.

Poor ol' Ralph Goodale has been asked to 'fall on his sword' for the good of the Liberal party and so far he seems reluctant to do so.

Nothing strange here really - seems to me every time there is a party, with good ale, there WILL be a leak sooner or later. (A little 'boys night out' pun, excuse me. )

At any rate, sometimes good can come from bad and every cloud has etc etc.

If we look at this Income Trust idea we see it as a new, wider application on Flow-Through shares used in the mining and oil exploration worlds. In this scheme, Designated Companies don't pay taxes on revenue in the 'normal way', they just flow-the-revenue-through to the shareholder.

It sort of eliminates one layer of taxation on the revenue.

The Toronto Star says the recent hub-bub is all about the Hon Mr Goodale making an announcement to not-cool-off (as he'd intimated earlier) on allowing regular companies to convert themselves into this type of "special tax treatment" entity.

At the same time Min. Goodale announced some other "special tax treatments" to dividend-paying companies to minimize the difference, to investors, between owning one or the other type of company.

Imagine you have two pet dogs, you tickle one, you must tickle the other, if one just happens to be new, young and cute, it is tempting to tickle it more, but the old faithful dog actually deserves the attention more.

It's like that.

Except when you hold yorself out to be Manager of the Canadian Economy and Head Administrator of the Simple, Fair, Efficient & Neutral Taxation system rather than just the owner of two pups, things get complicated.

Reminds me of the Ptolemaic system of demonstrating the planetary system with all sorts of reverse-spinning adjustments and back-flowing, counter-clockwise fiddly-diddles built into it to explain all the observable idiosyncrasies that didn't fit the accepted theory.

So, in the interests of both man and science why don't they make every company an Income Trust? or every firm just pay some simple straight percentage off the top or a bit bigger one of the bottom?

Then everyone would know how to figure the 'tax cost' into their investment decisions and we could put all those high-powered brains in accounting, tax planning and tax collection to work actually doing something.

Ah, my lunch is ready!

United Canadian Loyalists - are you one yet?

2006-01-03T08:24:00.000-05:00

My, my, I can see why this televisioning squawk-box IS all the rage - so much entertainment -right in your living room (parlour is an out-dated term, I've been informed).

Each night, well-groomed men & women explain all sorts of bad news in every place you can imagine. If there's no bad news locally, they'll bring you some from America or the Phillipines or Antarctica if they have to.

Edward says it's always been that way.

I suppose it's the same philosophy as with the newspapers- tell people how 'bad' some other feller has it and you'll make the one's reading feel better about their own state of affairs.

"Whew!, I'm glad that didn't happen to me!" they'll say inside (but not out loud, or perhaps the other folks in the same room'll think the speaker is self-centred and uncaring, all the while the 'other folks' are thinking the exact same thing)

Anyway, as I get more familiar with the way Canadians carry on in these modern super-technological days, I get to see some of the things, the comforting things, that seem to have been lost in the shuffle.

After the Great War, Canadians felt special and felt they WERE something special - no matter where they lived.

BEING a Canadian was a way of thinking and doing, not just a place to live.

Pride, I guess you'd call it. Pride IN the place and pride in being PART of it, MAKING IT WHAT IT WAS.

The people WERE Canada and the only time they thought of government was when they went to the post office or when the Prime Minister spoke on the radio.

Nowadays -perhaps the election's got something to do with it- everyone's got a complaint -a local complaint or a personal copmplaint, some wrong that needs righting that they want fixed up BY the Canadian government.

When did the government get so rich? get so all-involved in people's everyday lives?

Must have been in those 1960's everyone seems to remember so fondly - everything then got challenge & changed or challenged and ignored from then on.

Which brings me 'round to my thought - whatever happened to the U.E.L. designation? Ordinary folks with a family history of loyalty to the British Crown could jot those three letters after their names, United Empire Loyalist, and everyone knew that they picked where they were living ON PURPOSE and were happy there and happy to let everyone know it.

The British Empire seems to have faded now and the only Imperialists left are at Esso stations and MENTIONED in anti-American press releases.

So why not renew an old thing in a new way - United Canadian Loyalist - U.C.L.

Institute a "Title" for just plain folks from Canada. A 'club' that's open to all who feel just fine about BEING a Canadian, warts and all.

No matter where you (or your people) came from, or no matter what provinces or region or town you live in and no matter your race or colour or religion or sex or age or mental/physical state.

The only qualification being that you are pretty darn happy with Canada and happy to let everyone know about it.

I think having a goodly number of members in that kind of a self-identified 'club' would be good for all of us and probably affect people's thinking about their country a great deal more than citizenship.

Think on it.

Stephen.Leacock U.C.L.

1982 Canada is founded on principles that recognize the supremacy of God and the rule of law:

2005-12-29T08:21:00.000-05:00

What a lovely time of year - snow covered trees and lawns even in the busiest city. All the truck and trouble covered for a moment by a shimmering white cloak.

My dear friend Edward provided me with a second reference book to help me fill the gaps between my departure in 1944 and the present.

He explained that the existing British legislation outlining the authorities and limitations of Canadian governments was altered in 1982 and all the old British North America Acts were renamed Constitution Acts of the original year.

Splendid, I thought. Canada will move forward to take its proper place in the world and have a new set of operating rules - rules designed for the 20th Century.

Two things struck me as I reviewed this documentation - the new importance of the Supreme Court and the fact that none of the pre-1867 British Acts were changed at all.

It all starts with a Charter of Rights and Freedoms that states as its introductory premise "Whereas Canada is founded upon principles that recognize the supremacy of God and the rule of law:" and then flows on to outline some limits on the (thereby) conditional freedoms and rights it thereafter describes.

I am brought to this observation by the recent Judgments of the Supreme Court on Indecency, (R. v. Labaye,2005 SCC 80 and R. v. Kouri, 2005 SCC 81 ).

This split-decision's reasons defy everything but gravity!

The 'winning side's' discussions seem to be taking place in a blissful paradise where the residents are assumed to deem tolerance (of what these same residents surely find distasteful, nay disgusting and degenerate) as the greatest of virtues.

After reading the Court's artistically devised sophistry, my attention was returned to the Charter's introductory phrase and my thoughts crystallized on one concept - the libertine Court is taking the Charter out of context.

The Canadian people are getting doctored-truths and back-drafted judgments crafted to justify the predispositions and biases of the Court's members while they protest (too much) that their wordy machinations are intended to produce the opposite result.

It seems some one of the Justices had this "reasoning" prepared and ready for a HomoSexualist 'Bathhouse' case to be brought and pulled it out for use on this convenient HeteroSex situation.
Why else in Labaye (at 46 ) would they refer to "targeted groups" (or have fornicators and adulterers also been "read in" as analogous groups?)

This is preposterous! How can this Court so deftly ignore the foundational principle of the document that empowered their emboldenment?

How can this be? Does no one read the Judgments? the Constitution?

Time for a walk with my dear little dogs.

Another day.

The Root of the Problem with Government in Canada.

2005-12-27T13:07:00.000-05:00

It really is a Horror to be 'Out of Time", particularly when The World you thought you knew and now must be a part of has gone mad in the meantime.

That's maybe not the quite correct term these days, but to a man who has jumped ahead over 60 years in one giant leap, the magnitude of the changes that have been wrought, makes me uneasy all over and sometimes shudder to the bone.

Socially, the world has gone truly upside-down and inside-out! This IS still Canada, but there scant resemblance to the politely reserved, British-style society. Everyone is everywhere and in such a rush. There seems now to be no need for pleasantries and no time for respect, just dogged determination to take care of one's own best and immediate interests.

Ah well, more on that later, for today's edition I've found a more fundamental point to discuss.

Edward's first catching-up selection for me-the perfect thing actually - was a short history of Canada since the Second Great War. From this slim, Queen's Printer published volume I have gleaned the essence of what has changed in the time I 'was away'.

You "Crazy Canucks" (another wee joke) have turned your perfectly suitable government system on its head - the top is at the bottom and the least is considered most.

Let me illustrate and explain by a comparison with large corporate business.

Corporate Model --Canada as Designed--- Canada 2005

The Owner -----The Queen-in-Council -------Prime Minister

Chief Exec Officer ----Governor General ---------Prime Minister

Bd of Directors ----Privy Council---PrivyC. comprised of Inner Cab.

Vice Presidents -----Cabinet Gov't -------Enormous Cabinet

Line Managers -----Senate -----Gov't Dominated Committees

Union Reps -----Members of Commons ----Members of Commons

Employees -----The Voting Public --------------The Voting Public

The whole delicately balanced system to "divide the power" and create double-checks on any one person or party getting carried away with power has been step-by-step undermined.

The Queen is thought of as an anachronism and of no purpose.

The Governor General (even with full re-establishment of all its office's powers in 1947) is considered as much a frill as the Monarch.

The Senate place as Executive Councillors and its 'propertied class' purpose has been lost to inflation (the $4,000 net worth & property qualifications, just are not what they were in 1867).

The House of Commons is as riotously infantile as when C. D. Howe termed Question Period "the Children's Hour",

BUT now,

the lowly Commons is seen as the only legitimate legislative House.

The Prime Minister, having usurped the Governor General's Independent Advisors and subsumed the Vice Regal's power, is possessed of nearly un-checked Executive Power.

Exactly what the original design was expected to forestall.

And now its Election time!

May we add to the organizational chart the Registered Political Parties?

They are nothing but 'piece-work scalawags from competing unions' trying any old trick to fool just enough folks into signing up with their crew and thereby wriggling themselves into the management mix -with not a penny of capital invested.

The Worst of this scandalous set of circumstances is that they now wriggle themselves directly into the Boss' chair - and no dear sole holds a place, post or position to countermand the rascals once they've taking over.

Can no one see? Has no one been watching?

Has the Emperor No Clothes?

Ah, dinner's ready, I'll see you next time.

My Most Astounding Discovery!

2005-12-15T07:37:00.000-05:00

Hmpf.

I've recovered my bearings a little now.

It seems a happenstance occurred to me, and with me, that normally only happens in fiction.

I sort of Rip Van Winkled away the time from 1944 until 2005.

My first thought on regaining awareness was of Scrooge - within one night seeing the past, future and then returning to the present with renewed insight and appreciation.

But I didn't snooze the time away, I actually expired (it's reliably documented) and have re-materialized in every way except my ailments and maladies are gone.

It's more like the Looking Backwards from 2000 to 1887, by Ralph Bellamy written from the prespective of an old codger who awakes 113 years later to find himself living in an American transformed into Utopia (I won't digress into the socialistic aspects just now).

I am alive, possessing all the facts, theories and notions I knew in my 'real' life but I've flown ahead in time. I am seeing this radically new world with the same 'old' eyes and brain and it is quite a shock to the system of a man who thought he knew a thing or two about life.

I have found a good companion, quite fortunately I daresay and we've had a good chat since I first touched that button on my new writing machine. Word Processing it's termed - everyone treats the device like personal literary sausage manufactory.

My new chum and guide, Ed(ward) E.Trebor, has planned some visits to my relatives over the upcoming Christmas holiday time and he has promised to bring some up to date books on Political Economy and the Sciences from the library for my consumption as we travel.

Simply amazing

2005-12-14T17:43:00.000-05:00

The freedom .... a new lease on life

a new identity

I feel like a new man.

Irascible and discombobulated

2005-12-14T17:30:00.000-05:00

That's how I feel.

Like I've been nappin' for 60-odd years.

Yep, it's great to be alive.

Oh my what's this .... my reliable old typewriter's been replaced.

What's this button doooooo.