Category Archives: Economics

Items of interest

Aside from the French elections, there are a number of issues bubbling under which as a small time currency trader I find of particular interest. These are as follows; the French Presidential election and how that will impact on Sterling and the Euro, also a mini trade war between the USA and Canada over a particular type (‘Ultrafiltered’ milk used in cheese making) of Dairy produce which the Trudeau government have implemented. Which is odd, because by doing so the Canadian Government are dictating that Canadian cheese makers cannot import and use a product which no-one in Canada makes.

For the curious this article may explain matters. However, it is worth noting that to get into the supply management chain to access Canadian markets, a license to produce is required. The cost of which varies from Province to Province, but effectively means that Canadian Dairy farmers have to pay the Government to produce Dairy products. Which effectively keeps small producers out of the marketplace. Farmers can keep cows, but unless a farmer has a permit, they can’t sell the milk or any product made from that milk (As well as needing a processors licence). So only the big guys or large co-ops really get to be players.

This trade conflict’s issues balance on a two edged sword of supply management (Canada) vs subsidies (USA). Although from my perspective I don’t need to know all the ins and outs, just the effect they are likely to trigger. Canada will lose this fight as the USA is already complaining about those north of the 49th who haven’t been paying their share of their NATO commitment. Which is another bone of contention.

Now which do I think is more important? For me the answer is a no-brainer. It’s the low level trade war over Dairy produce and collapse of the North American Free Trade Agreement these issues look like triggering. Which means taking a short position on the Canadian Dollar looks to me like a good idea. Not that I’m not going to go short on the Euro, but if the French popular vote goes the way of Macron and not Le Pen, then the profit I stand to make over the shrinkage of the Euro will be much less. Macron is very much the establishment candidate and unless put under extreme pressure (And perhaps not even then) won’t give the French a referendum on membership of the EU or do anything on French border control. Although I did say that about Cameron and BREXIT. However Macron is being backed by such august personages as Jeremy Corbyn which is probably the kiss of death on anyone’s electoral campaign.

Interesting times

My, my. We do live in interesting times. Niall Ferguson argues in his “Five ingredients for a populist backlash” talk about why we are where we are using history, from 1873 onwards;

While he doesn’t give any definitive answers, he does give a broad brushstroke picture of what will result. Which for small time investors and currency speculators like me are useful straws in the wind. I like Niall, he’s not afraid to admit when he gets it wrong, especially over BREXIT. Unlike so many others in academia.

What I’m hearing about is political and economic forces similar to those which resulted in ‘la Belle Epoque’. There will be a few hiccups along the way, but as the EU collapses because that organisation is correctly observed to be little better than a hollow bureaucratic shell to fund lavish lifestyles for European ‘elites’. I foresee a new, more localist optimism driving economic growth, and the fading of many bugaboos like the anti-human notions of man made climate change and similarly pointless divisiveness of identity politics. A new liberalism of less government, greater individualism and wealth awaits over the next decade or two for those who are willing to embrace this nascent trend. Those that do not face obscurity and the scratching pens of scholars trying to work out how ‘progressive’ politics got it so badly wrong. The ‘elites’ amongst them. Word is leaking out that they’re beginning to lose big, and like Soros and his ilk, are doubling down on political interventionism while billions leak out of their back pockets.

There’s a lot going on out in the big wide financial world with talk of Marine Le Pen’s bid for the French Presidency and possible ‘FREXIT’ vote. Not to mention the possible Italian ‘Uscitalia’ (Thanks Peter) I’ll also be keeping a close eye on the proposed Catalonia referendum vote scheduled for late 2017. As well as the Chinese doing a possible deal with the US over Alaskan oil. Which will spell yet more pain for the politically hobbled Alberta oil sands. Which are some of the reasons why I’ll be going short on the Euro and Canadian Dollar but long on the US Dollar and Sterling.

Not doomed then…

There’s a lot of doom and gloom being talked at the moment, and what Julie Birchill calls ‘poncing around on twitter’. Seriously, she’s in good fooling with this article (Thank you Bishop Hill). If you take all the pessimistic views from the bought and paid for lamestream and all the ‘Remainder’ twats panicking on twitter, then everything in the UK is going tits up in a massive way. Which back in realityville, just isn’t happening. The market has taken a hit, that much is true. Sterling is down over ten cents against the Canadian and US Dollars, but it was far lower when Harper was Canadian Prime Minister.

Yesterdays rate is about the same as back in September 2014, (around CAD$1.72). If you go back to my 2013 screenshot, the exchange rate was even lower.Currency screenshot November 2013 So it’s not the ‘lowest in 31 years’, far from it. As for ‘dollar parity’, that’s just a wild guess invented to scare the peons. As someone who needs to move money between countries a few times a year, I’m not panicking, far from it.

Actually I have a more positive view. I’m actually quite sanguine about the whole ‘out of EU’ business. Which my instincts tell me will be good for UK businesses and their trading partners after this short-term glitch, thus good for those who need a job, long term. The Bank of England has good liquidity and is solid as a bank can be. The UK economy overall isn’t in that bad a shape. The European banks and EU, I’m not so sure. With their track record of ‘losing’ 6 Billion unspecified Euros in 2013, to cite but one example, and not getting their finances signed off by the European Court of Auditors up to 2007. Since then the accounts have been rubber stamped but with some ‘observations of wastage’. No matter what the Euro apologists say, I’m less than confident about the EU’s ability to remain fiscally stable. No matter the gripes and veiled threats of raised tariffs, the EU has way more to lose from a divorce than the UK, and all the globalist bedwetters certainly don’t have a clue.

Now before Brexit became a probability, I was going to pull my money out of Sterling, but have decided to leave it where it is so it can breed with all those other lovely UK connected currency units and raise far more babies. Which will turn into more readies for Mrs S and I, and probably pay off the college funds for the next generation when they arrive (Although, please God, not just yet). And if handled right will provide for another generation after that.

As for Europe and travel. Our next big trip for 2017 has just entered the planning stages and we will be taking in the UK, Denmark, Netherlands, Atlantic France, South of France, Italy and maybe further East. On a motorcycle. Specifically a 2017 Triumph Trophy SE 1215. We’re going to ship it over via Air Canada’s new motorcycle service and ride around some haunts old and new. The general overview is a week or two at each location, maybe more depending on whether we’ll be hitting the vineyards in a big way or just pootling around sightseeing. Mrs S and I are both dual nationality, so can use either passport to cross borders and thus get around some of the visa restrictions that might be put in place.

Languages? Our French is adequate for day to day conversation, my German and Italian pretty basic, but enough to get by on. When I say ‘pretty basic’ I mean being able to count to a hundred, order a beer or three, say ‘please’, ‘Good day’, ‘thank you’ and ‘I’m Canadian / English’, book a hotel room and ask people to speak more slowly. I’ve even picked up the odd word in Swahili from Eldest who is currently working in Africa and heading off to the fabled land of Oz later this year. Our legal eagle (Youngest) is coming over for Christmas, even if we end up paying her air fare, so we’re looking forward, not back.

Blame everyone

Well, we’re off.  As you read this we’ll have already passed through customs and be well on our way across the water into the US of A.  This is a timed post, written on Wednesday night. and I’ll report any misadventures and observations later, after a very large drink.

What I’d like to say is this; having seen the UK news over the last few days I just want to say I truly feel sorry for the poor buggers trying to earn a crust at Port Talbot Steel Plant, only to find their livelihoods are being snatched away.  The trouble is, when somewhere as big as Port Talbot goes tits up, everywhere else in the area suffers.  In fact, every trader involved in the supply area finds their cashflow developing a nasty stutter.  For some it will mean the breakup of everything they gave their lives to building.  Homes.  Families.  Social networks.  Through no fault of their own.

However, even if you’re unaffected, just remember this; if you are a UK voter and supported the Conservatives, Labour, Liberal Democrats, especially the Greens or any of the pro-EU political parties in any of the last four general elections, you voted for the very carbon taxes that just cost all those Welsh steelworkers and quite a few service employees their jobs.  As they say in the valleys; Proud of it are you?

Part of my genetic heritage comes from those parts, so I do feel a little sympathy for the people who will probably have to cancel their 2017 Christmases .  All because of a lie.  A veritable crime of the century.  The one perpetrated from the highest levels of the United Nations, whose name is carbon taxation and whose stated cause is ‘Wealth redistribution’.  That old fraudster ‘Man Made Global Warming’.  Whose wealth do these corrupt bastards want to redistribute?  Yours.  Mine.  Everyone’s.  Right into the pockets of the politicians and their financial sponsors.

Now repeat after me; “Carbon taxation is economic suicide.”  Got that?  Now don’t forget it.  Don’t vote for anyone who will support it.  Your job may depend upon it.

/rant

Comment of the day

“The more you help some people, the more they need to be helped.” These words drifted across the breakfast table, making me blink. Now there’s an intriguing thought was my unconscious response. Mrs S had been working online, talking about one of her clients. One of the needy ones. One of several she has to deal with in her day to day. Members of ‘the clueless’ who, no matter how many times they are shown, assisted, mailed the instructions and generally babied along, keep on asking the same questions about the same old subjects. It’s almost like their ability to remember has atrophied to the point of nothingness.

I remember thinking; ‘I must pass that one on to the Axiom testers down at the Bill Sticker Institute for word juggling and infinitive splitting.’ So I did.

One of our helpful customer service IgorsUpdate: The Axiom testers have come back with Proven. There are a lot of people in the world who fit this precise and pithy description. The lads down at the lab (See left) looked very pleased with themselves when they delivered this particular verdict. Well, I think they did. They’re mostly Igors, so it’s very hard to tell.

The good news is that these hapless members of the zombie apocalypse will probably be the first to starve to death if everything does go pear shaped. Not that it will of course. These are precisely the people that politicians buy the votes of with their endless promises of jam tomorrow and scare stories about the man-made (of course) heat death of the Universe. George Bernard Shaw called them ‘The undeserving poor‘. The rest of us, who can’t be bought or fooled so cheaply, will no doubt be the cash cows wrung out to dry so the pollies can keep their jobs.

Heavy sigh.

Reasons to like Uber

Taxis in the mating seasonThere’s a lot of fuss and palaver about the Uber SmartPhone Ap that lets people hail a private car with a willing driver in place of Taxi services. They have, like taxi companies, set rates, insurance, and even legal cover. What they don’t have are the local authority licences.

Over the past month or two I’ve sat in the back of enough taxis and listened to the Cab Driver’s grievances about the extra competition, lack of competence, risk factors and cost to get a feel for the nature of the dispute. I’ve also had enough grief from licensed Taxi drivers (Especially the Parisian ones) to make me think they are often no better than the Uber guys, and possibly much, much, worse.

So Parisian cab drivers are rioting and beating up anyone they suspect of being an Uber driver? Right. And this is going to aid their cause how? Will the Parisian authorities cave in and enforce their ban on Uber? My question is; how can that ban be enforced without huge investment in manpower and technology by the licensing authority? As for fines, Uber has been known to just pony up and pay their drivers fines and still they make money.

Local authorities don’t like Uber because there’s a nice little earner regulating and taxing the local cab companies and their drivers. Because Uber falls outside their licensing jurisdiction, all that easy money evaporates from their coffers. The cab drivers don’t like them because they cream off fares that the ‘normal’ cab companies think they should be doing. As for honesty; a mate of mine has been both a fully licensed Hansom Cab operator and Private Hire licensed driver in the UK, and we’ve had many interesting little chats about Taxis, and the tricks some drivers use to fleece the unwitting.

Anyway, here’s some of my personal reasons for favouring Uber over traditional taxi services;

First; Uber drivers can’t charge extortionate rates because you know up front what the price is going to be like. Not like at many places where some drivers wait inside the terminal at train stations and airports to fleece arriving tourists. One driver I came across at Gare Du Nord, Paris, was demanding 70 Euros for what turned out to be a twenty five Euro fare. Needless to say, I gave him the brush off. Uber drivers have a precalculated fare you get to see on your phone before they arrive at the pickup point, unlike some cab drivers, who set their meters running even before they even get to you.
Second; Uber cabs all take credit cards. In fact you can’t pay in cash. Which is useful if you have run out of notes late at night and don’t have to beg or search your pockets for loose change. I got stuck at the Hospital on the night Mrs S broke her arm, and had three licensed cabs on a taxi rank refuse my fare because taking a credit card for a thirty Euro fare “Wasn’t worth their while.” Fortunately the Paris Metro ticket machine accepted a battered two Euro coin I found in the gutter so I actually got back to my bed that night.
Third; You can pick what sort of service you get beforehand. A high end ‘Black cab’, affiliated Taxi service or even an SUV. Which you often can’t with ‘Normal’ cabs and private hire. You get what is sent and pay the meter rate.
Fourth; There’s no hanging around in the street trying to hail a cab. You know when your ride is coming, and when it’s due to arrive. Just be at the pickup point and it all seems to work fine.
Fifth; Getting a receipt is automatic because it goes straight onto your credit card and you can generate one to be printed out later. If you forget to ask for that receipt for expenses, it’s no big deal.

The downside? You need a data enabled SmartPhone where there’s a good signal. If you’re a dinosaur like me, who has a wi-fi enabled tablet but only an old ‘Dumb’ phone, you’ll need that phone with you to receive Ubers SMS messages. Which can be a bit of a fiddle. Then their prices can go up if the service is busy (Surge pricing), or it’s a holiday like Christmas or New Years Eve, but the standard Taxis will have gone to Tariff 2 (Evenings after 11pm in the UK) or 3 (Evening + Public Holiday) by that time anyway. As for trustworthiness, well, that varies from driver to driver. Some would say Ubers rating system (Which ‘traditional’ cab companies don’t have) keeps their drivers up to snuff anyway.

According to my friend it’s sometimes a tough life being a cab driver, what with the constant squeeze on rates, weather, erratic cashflow, regulations, late night drunks and some of the dodgier clientelle, but when the money is good, it’s not that bad. However, he said with an I’m-glad-I-don’t-do-it-any-more grin, maybe the old style taxi system is massively under competitive and needs kicking to the kerb.

Canada recognises Bitcoin

Bitcoin CanadaJust caught this off The Register. Bitcoin just got the endorsement of regulation in Canada. My, my. On the same footing as the Dollar no less. A little bit of a two edged sword this, as by putting Bitcoin on the official list of currencies, the various exchanges will have to register and comply with the financial regulations up north of the 49th parallel or get out of Canuckland. However, the upside is that by recognising Bitcoin, it gives the controversial crypto-currency a veneer of respectability, and encourage wider trading and convertibility. Which in a wider sense can be considered a good thing. Even if the main intent is to allow the taxman to get a piece of the action.

First the Enbridge pipeline gets approved, now this. Canada’s economic future is looking brighter all the time.

On politics and banking

The Politics of BankingI’m currently a very happy bunny and enjoying the relief that my new knee strap has brought. No crunching noises in my creaky old knee joint when I try to move quickly, or lift heavy objects. No detectable pain and I can now walk miles without a single twinge. Why aren’t these things compulsory for old knee injuries like mine? They’re worth all the painkillers and surgery in the world. None of the surgeries I’ve had have done anything to alleviate the discomfort since I first popped my knee playing Rugby. This fabric and gel pad thing has relieved all my symptoms inside forty eight hours. Although I’m taking it easy, just in case I screw up again.

Whilst enjoying this surcease, I visited Theo Sparks blog and saw the above. So I nicked it. Says a hell of a lot about the West’s current regime of casino banking. I think the world and his wife are aware that the current structure is unhealthily unbalanced, allowing those who control the flow of numbers to confiscate at will. Especially now the UK HMRC has the power to asset strip at will anyone it even suspects of not coughing up what the tax man says is a ‘fair’ share. Fair for whom? One might ask. In the US the tax man currently even ‘audits’ people for having the ‘wrong’ political views. Whoosh! Where did all those emails go and how many Server hard drives did they have to trash?

Both of which make me wonder about how open to abuse and corrupt the West’s financial system now is. The Russians are looking for a way out and the Chinese basically own all the USA’s markers. Even the fiscally cautious Mrs S has been asking me about Bitcoin and there’s even a Bitcoin ATM Downtown on Government Street. I’m tempted to try Bitcoin out on a small scale myself. Stick a few on a SDHC flash card (Not a USB stick DVD or CD – lifespan issues) in a shielded safe and Robert is one’s Father’s Brother n’est que-pas?. Unless someone crashes the entire Internet, in which case the West’s financial pooch is so screwed it’ll have had puppies.

Bitcoin as an alternative to the current mess of fiat currencies makes sense to a certain extent, but how vulnerable is it to external interventions? There was the market glitch back in December 2013. What happens if the US Government were to declare by presidential decree that Bitcoins were banned? Probably the same result. There was a big drop, a massive rebound, and Bitcoins that were trading around 4-580USD are now valued around 6-690USD (June 2014). Which left a lot of economic prophets of doom with serious egg on their faces.

That thought leads me to wonder about some of the recent political upheavals of the last fifty years. The Anti-Apartheid movement wasn’t making much headway until the Afrikaaners introduced the Krugerrand as legal tender. Then the politicians really got involved. At the time of the second Gulf War, it was rumoured that Iraq under Saddam Hussein was contemplating going back onto the gold standard, as was more recently Libya. Look what happened there. Iraq made large purchases of Gold in March this year, and lookee here, a bunch of foreign sponsored raiders are invading while the US drags its feet. At the risk of raiding the bacofoil, I’d say a certain pattern is emerging. Oil rich Country tries to go onto gold standard = Casus belli. Not so much blood for oil as blood for gold. Or in the Ukraine’s case, blood for gas.

Which further leads me to think that if the pattern of money and war, boom and bust is to be broken, maybe a more democratic currency (Out of the hands of politicians and bankers alone) is the way forward. Hmm.

That’s it for now. I’m off for a walk to test my recovering knee joint. The Galloping Goose trail calls.

Jail the parents!

So says a journalist in the Barclay Brothers Beano. Apparently two parents in East Anglia are to be hauled up before the beak for allowing their child to reach fifteen stone. It is worth noting that the original article in the Wail says that the boys father is twenty stone and out of work. Apple not falling very far from tree, methinks.

A more reasoned discussion has been carried out here on debatewise but the principle of state intervention to cut costs for the ‘wonderful’ NHS should be asking the greater question. Which National Health Service? Oh, you know, the ‘wonderful’ NHS where patients can be neglected by nursing staff whose focus is more on paperwork than actual care, and where the elderly can die a nice, lonely but tidy death in a hospital bed from dehydration and starvation in their own urine and faeces, that sort of thing. Don’t believe me? Start here.

The greater questions should be; how does the family benefit from being prosecuted and their child being put in ‘care’? How much money do these court and care processes take away from the UK’s ‘wonderful’ NHS? Let’s do some joined up thinking here. Police manpower, cost of lawyers and court time, costs of appeal, fines, jail time for being unable to pay fines. All on the public purse because the parents in question are not exactly high earners. Criminal records further damaging their prospects of employment, thus keeping parents out of the tax contributing workforce (If there were suitable work to be had). That’s even without factoring in the costs of God alone knows how many social workers. The cost of long term ‘care’ (Meals, facilities, security) with all the fees for a swath of behavioural interventionist consultants whose services are not exactly free.

What the screaming interventionists don’t seem to understand is that all of these things don’t come cheap. If your principal goal is to save the NHS money, even a fairly cursory analysis demonstrates that intervention of this kidney isn’t really the right way to go about it.

One is left with the thought that on balance it will probably prove more economic to treat the child for any conditions that crop up when they actually do, not trying to second guess what conditions will arise because it’s not unknown for the fat kid at fifteen to discover girls, or get so hacked off with being ill that he spends a couple of years getting into shape off his own bat, living to a ripe old age. Either that or the young man will die young, thus actually cutting the long term treatment bill. No prosecutions required.

Think of the savings to the ‘wonderful’ NHS.

Hi-ho. Lovely sunny day here in BC and the weekend beckons. Done with unpacking and am thoroughly enjoying being able to walk to the nearest pub. Now there’s a thought