The Great Economic Reset

[Fox3WheresMyBanana]

More local political signs.
A trustee has just been appointed to run a Rural Municipality.
The media are reporting that this is because four councillors resigned, so business could not be conducted as meetings would not be quorate.

A little digging reveals that the total number of councillors is...four. Yep, they all resigned; mayor, CAO, and the other two. But the media and the government don't want us to know that.

The Provincial government has just requested we all write to our MPs asking for the Climate Change fuel charges (roughly 10% increase, due 2 days ago) be delayed.
In other words, the Provincial Premiers of the region failed to convince the PM to delay it (they met last week).
Our inflation is running at double the national average at present. Being more rural, fuel is a higher proportion of living expenses here, and our summer tourism is dependent on visitors driving here and driving around here.

I think the two are connected.
Central government is panicking.
Things are visibly bad and they think they have to do big things fast to fix that.
What this means is two things.
Firstly, they will ram through insufficiently thought-out initiatives with little or no ability to incorporate regional differences, e.g. (for UK) heat pumps.
Secondly, they will accelerate their pet projects before they get kicked out of office.
But local and soon regional government are dumping on this. They won't do central government's dirty work.
Crucial to many of the new regulations are enough inspectors to carry them out. They are very short of them, and the situation is getting worse.
A chap I know recently completed his house, and a shed out back. The Inspector was round for under 15 minutes, approved.
Miraculously, the 'shed' has now connected itself to the house and is a lounge. And a 2 car garage has appeared.
The Inspector will never be back. He's too busy.
And the list of people who have unapproved improvements is now up to a noticeable percentage of the population, as this went on throughout the pandemic.
So, I don't think the government dare try enforcing the rules after the fact, they'll lose too many votes. They'll just turn a blind eye.
For road regulations, they need police to enforce them, but the same shortages exist. We are about to get a rollout of cameras all over the place to compensate for the lack of police.
I wonder how long the cameras will last?
New ATV regulations, new boating regulations, they all need enforcing. But everyone knows the police can't chase ATVs with squad cars.
So the police have been bought ATVs, and Jetskis. And they trailer them to fairs and shows and park them next to big signs about the new regulations.
And to use them, the police have to go on training courses and safety courses and diversity courses and enforcement courses.
But there aren't enough police to enforce the existing regulations.
So all the new vehicles sit in the garage, or in one case the new garage they had to build to house them, and they never move.
And one does wonder if the politicians who ordered the vehicles have a clue that this is the case.
I guess not, or they wouldn't have bought the jetskis 2 years after the ATVs.
Economically, never mind politically, this approach is a disaster.

p.s. Bud Light sales continue to crater. Two bottling plants have just closed, 650 unemployed, as a result.
Bud is currently owned by InBev, headquartered in Belgium. The bottling plants were owned by an international consortium....headquartered in Belgium.

[Fox3WheresMyBanana]

deficit spending shifted away from productive investments, which create jobs (infrastructure and development), to primarily social welfare and debt service. Money used in this manner has a negative rate of return.

Spending on non-productive stuff exceeds profits from productive stuff. Therefore the world economy is doomed without major policy change to reduce the non-productive stuff.
This is basic system dynamics.
However, GDP measures ALL government spending as productive, as implied by the name.
So, until governments redefine GDP by removing non-productive elements, there will be no effective policy changes.
Obviously, no one in the non-productive elements wants to hear this, and they all vote.
Given that governments are doubling down by trying to pretend that all the woke cr@p is productive, the only remaining question is the timescale for economic collapse.

https://realinvestmentadvice.com/defici ... n-matters/

note: not all government social welfare is non-productive. For example, mental health and probation services may be productive if they help non-productive people back into productive work.
It's also quite hard to calculate some welfare productivity. For example, spending on veterans' affairs probably helps recruitment which probably helps avoid wars and their subsequent costs. Try working out that calculation.
However, the vast majority of government spending doesn't bother to try to justify itself economically.

[Fox3WheresMyBanana]

Who says comedy is dead?!

The Bank of England will be leaning on the expertise of Ben “subprime is contained” Bernanke to lead a review into the Bank’s (absolutely sh!te) forecasting performance, e.g. inflation is contained.

Wonder who else they've hired - Neil Ferguson? Mystic Meg?

[barkingmad]

And now for a party political broadcast, from our very own cuddly Ernst Stavro Blofeld, whose glowing pride in achieving a pass at secondary skule level biology is much in evidence in his oration;



Klaus Schwab, the founder and chairman of the WEF, succinctly conveyed the organisation’s ambitions for the metaverse during a speech in February 2023 at the appropriately titled World Government Summit*. In his address, Schwab proclaimed that those who gain mastery over new technologies, including the metaverse, will wield a significant degree of influence over the world’s affairs.

“We are at the beginning, when you look at it, at technology transformation, it usually takes place in the terms of an S-curve. And we are just now where we move into the exponential phase. And I agree, artificial intelligence, but not only artificial intelligence, but also the metaverse, new space technologies, and I could go on and on, synthetic biology. Our life in 10 years from now will be completely different, very much affected, and who masters those technologies, in some way, will be the master of the world.”—Klaus Schwab.

*I must confess my ignorance as I hadn't realised we peasants had a World Guvvment, but maybe I wasn't paying attention at that history lesson...

[barkingmad]

Meanwhile back in the dusty halls of academe, this morning’s French lesson is delivered by our old professor, ‘Santa’ Klaus Von KnobSchwab, so here is a chance to brush up on your oral delivery of that beautiful language;

https://wide-awake-media.com/klaus-schw ... privacy-2/

Though the idea of him peering through my venetian blinds causes a chill to run up my spine...

[barkingmad]

I hope the videos of ‘Santa’ Klaus are not too upsetting, so here to compensate is a vision of loveliness in the form of Eva Vlaardingerbroek talking about the latest wheeze from the World Eejit Forum;

https://wide-awake-media.com/eva-vlaard ... igital-id/

Does this mean they’ll be after the carbon fibre front fork on my new bike...

[Fox3WheresMyBanana]

A rising wave of property defaults threatens hundreds of US banks

https://www.telegraph.co.uk/business/20 ... -us-banks/

“It’s a trainwreck in slow motion,” said Professor Stijn Van Nieuwerburgh, a property and finance expert at Columbia University.

“The return to the office isn’t happening. Data from turnstile swipes shows that occupancy levels are still just 49pc of where they used to be. It has been stable for a year and a half,”

His team calculates that America’s office stock has lost 40pc to 45pc of its pre-Covid value, or will have once market discovery exposes the damage already in the pipeline from two parallel shocks: shrinking rents and the most aggressive monetary tightening of modern times.

“We are starting to see distressed sales every day. Offices are selling for 50pc, 60pc or 70pc discounts. At these values the equity holders are wiped out, and lenders take a 30pc loss,” he said.

US commercial real estate has $5.5 trillion (£4.5 trillion) of debts. The worst trouble is in office buildings, though prime assets in hot spots have avoided the broader bloodbath. Projects that made sense in the QE world of free money are no longer viable in the new world of 5pc bond yields.

[Fox3WheresMyBanana]

Trudy has just withdrawn the Canadian climate change tax on home heating oil, for three years. This is the worst kind of fuel from the Climate Change cult's perspective.
Needless to say, three years means he can slap it straight back on again just after the next Federal Election.

It's not being done because heaps of poor people will freeze to death this winter otherwise, well not directly.
It's because his polling numbers have cratered in Eastern Canada and the opposition is holding Cut The Tax rallies.

The incentives for heat pumps have been increased further. The pumps are actually quite popular and not hard to install here.
However, provincial governments have hidden an opportunity to up people's property tax in the small print to any grants.
Also, the grant usually requires removal of the oil system to justify the Climate Change malarky, but heat pumps need a back-up system in the coldest conditions.
So, there's very little uptake for further government grants.

Meanwhile, I have yet to see a single electric car plugged in to any of the free charging points anywhere in my Province.

[Dushan]

Trudy is going to be relegated to dust fields of history after the next election.
He may hang on to a few seats in the east because of this, but he may lose more in the Centre of the Universe (AKA Toronto) and out West. The sooner we see the back of him the better. Let UN or some other appropriately corrupt international organization take care of him going forward.

The real question is will Pierre Poilievre give us our guns back first or build condos on Front street where CBC once was. Probably neither, but one can hope. In the very least I think he will abolish all this carbon tax nonsense and allow pipelines and more oil and gas production.

[Fox3WheresMyBanana]

Trudy has just upped his blatant propaganda bribery Canadian Journalism Tax Credit from 25% of an up-to-$55,000 salary of a journalist to 35% of $85,000.
That's every "approved", i.e. MSM, journalist. Nothing for independent reporters, of course. They keep getting investigated for "misinformation".
Total cost about $25 million a year...backdated to the start of this year.

Now you know how accurate and comprehensive economic reporting will be.

Meanwhile, the Canadian Government has cut its own growth prediction (from 6 months ago) for next year from 1.5% to 0.4%
Almost all the fiscal stimulus just announced for housing comes via loans and mortgages from government backed agencies. This officially keeps it off the government's books, but the government is liable for all losses.
This is much like the Private Finance Initiatives in the UK, where vast government costs and inefficiencies can be hidden from headline figures.

See what your government is currently up to in this area.

..and in the meantime, the services deteriorate and the debt increases. Debt will rise from $35T to $38.4T next year, and the year after, debt service payments will be greater than Federal health payments to the provinces.

Just to remind you that, officially, no Government or central bank has any valid predictions for next year. And in huge efforts of circumlocution, and mostly at private gatherings of bankers and economists, they have admitted that their economic models don't work. They have been consistently wrong for 4 years now.

https://www.bloomberg.com/news/newslett ... ave-a-clue

“When the Fed says we're data dependent, they mean, we're not sure.”

This is to be expected. This is a strange US economy that has defied all forecasts, one that has been roiled by a pandemic, a war in Ukraine and a global reordering of trade partners.

“We all have forecasts. And most likely, they’re all wrong. But that’s OK because we are not expected to predict the future. The key is whether or not we can adjust,” said Jim Bianco of Bianco Research. “Now the Federal Reserve in the last couple of years has not had a good track record on that.”

That was a charitable way of bringing up the Fed’s onetime insistence that the inflation surge was merely “transitory.”

“What I’m afraid of with this Goldilocks forecast is when the situation comes in, that it is not panning out, they’re going to dig in their heels and continue to say it will,” Bianco said. “And they might wind up making another transitory-type of mistake in 2024.”

The ECB is likewise "Data-dependent", i.e. Clueless.
https://www.ecb.europa.eu/press/key/dat ... 1c.en.html

The elevated level of uncertainty reinforces the importance of a data-dependant (sic) approach to our policy rate decisions, which will be determined by our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission.

= We're making it up as we go along.


..and, as can be seen from the UK Budget just announced, governments are not only not prepared to cut spending, but are increasing it by doling more out in "initiatives".
And either taxes go up, or deficits increase, or usually both.
..and public sector productivity not only continues to decrease, but is dragging down private sector with it due to the increasing burdens of regulation.

[Dushan]

The way I see the “builders’ incentives” it will be similar to the business loans they were giving to companies during COVID. “Loan” them half a million, then expect 400k in 5 years. In the meantime the company disappears along with cash, or is around and whines that it is too soon to pay money back asking for extensions.

As for $55k salary, I don’t think that a janitor makes that little at CBC.

[Fox3WheresMyBanana]

Given the amount of BS a janitor at the CBC would have to clear up every day, I would hope not

Locally, several builders have recently given back the grants for "affordable" housing, as the paperwork was a total PITA and the amount wasn't worth it compared to commercial rates they can now charge.
Building starts are the lowest for years, despite the Provincial government saying they are throwing money at developers.
It's the same in every sphere of life.
Daycares can't provide more places because 85% of private daycares told the government where to shove their paperwork needed for the payments. Existing ones can't expand because the Government formula doesn't pay for the needed extra support staff.
Hospitals are over-capacity. That's today, right now, officially. Nobody's died in the waiting room yet, but they have in the other Maritime Provinces. New nurses aren't getting their promised sign-on bonuses - you can guess what that does to further recruitment.
No one wants 'free' heat pumps - see my earlier bit about the 'Devil in the detail'.

Etc.
Bunfights, bakeries.

This is the death of society.
People in charge who have no leadership qualities at all, backed by an administration who have less initiative than a stick, will doublethink to keep their jobs, put up with any amount of abuse from their bosses, and take it out on the only people they have power over, who are you and me.

[Dushan]

The solution is to bring in million immigrants every year.

[Fox3WheresMyBanana]

"We'll make it up on volume"

[Dushan]

Unfortunately Ray Kroc's been dead for a long time and even his "volume" approach no longer holds. $15 for a Big Mac, fries and a drink is out of line cost wise and takes for ever to deliver. They completely lost the concept of "fast food".

[Fox3WheresMyBanana]

Bribe politicians, shut out most competitors, charge what you like.
Only thing that matters is being perceived as slightly less worse than the competition,
or making it too much hassle to switch.
Tell bigger lies, louder, and more often.

p.s. previous comment is a sales joke, in case you weren't aware. A roundabout way of saying that every immigrant is a net loss.

[Boac]

Oh dear! BM would be rolling around his kennel laughing................

[Fox3WheresMyBanana]

Chinese CSI 1000 Index just dropped 6% today.

Watch this space.

[Fox3WheresMyBanana]

Thank you for watching.

Looks like the drop was stemmed by mass buying of shares by pension funds, insurers, and other State-controlled funds.
The PBOC has just announced a 0.5% lowering of the Required Reserve Ratio, the amount that banks need to keep as funds relative to their lendings.
The Chinese banks are now on a par with western banks, at about 10%. This injects about 1 billion Yuan into the system. Chinese banks were on double this percentage RRR 12 years ago, and have been dropping it steadily since.
The lowering was not preceded by official hints it was coming, which is normal Chinese practice.

None of this, of course, fixes the problems that caused the stock market drop in the first place. Chinese real estate continues to drag down the rest of the economy.
So does western commercial real estate drag down western economies, but that's a much lower proportion of overall business compared to China.

Markets appear stabilised at the moment, but this is a short turn, and expensive, sticking plaster for a chronic illness. Expect the plaster to come off around mid-April.

[Fox3WheresMyBanana]

The current situation with central banks worldwide is that they are 'data-dependent'.
As I explained before, this is a PR spin way of saying that their economic models don't work, and they are making it up as they go along.
The obvious consequence is that they cannot make forecasts. Not credible ones, anyway. They've been wrong for over two years and everyone knows it.
And the inability to do so means business can't make long, or even medium, term plans.
Which means with rates currently high and no idea when they will drop, Britain is being pushed into recession.
This is stagflation.
https://www.telegraph.co.uk/business/20 ... ion-niesr/

A further consequence is that behaviour becomes dependent on those around one, since there is no central plan.
And now it becomes clear why China's current crisis will massively affect the USA, and thence the World, albeit with a likely 3-4 month delay.

Data dependent also means the central banks, and of course governments, have lost control.
They do not know what effect just the usual selection of random events will cause, nor whether any measures they do take will restore stability.
They are on the back seat of the reality bus, pretending they are still in the driving seat.