Hunka, Trudeau, and Shirking Responsibility

 

Living in Canada, one should learn not to be surprised by a new scandal associated with the Prime Minister’s Office. Unfortunately, the current PM, who campaigned in 2015 with a promise to have the most transparent federal government Canada had ever seen, has the most opaque that I recall. By hiding information, the ground is made fertile for rumors to explain the unknown. Yesterday, I saw that a news source I sometimes watch suggested that the grounding of the PM’s jet in India was connected with a cocaine raid. I greet that with a question mark, but who knows?

And speaking of India, the accusation by the PM that India had been behind the assassination of a Sikh leader in Surrey, BC, is still being greeted coolly by foreign governments. The problem is that Trudeau has offered no proof, not even a clue. When I first saw a video of him making his startling accusation to the House of Commons, my first thought was that there he was trying to divert attention from his most recent gaff. He has a habit of trying to change the channel. But, as I considered the situation, I thought he couldn’t be that stupid --- he wouldn’t make such a charge without solid evidence that could be interpreted no other way. If he that’s what he did, then he will most likely go into history as a little, little coward. No, he didn’t do that….did he? 

A representative of India has said that the Indian government wants to get to the bottom of it and deal with the guilty parties, but that Trudeau has provided zero information. Trudeau, as per usual, attributes the paucity of proof to national security interests. “You’ll just have to take my word for it.” Why do I keep thinking he’s like a little kid?

The most recent scandal is the recognition offered by the then Speaker of the House to a 98 year old Ukrainian-Canadian WWII veteran who has since been reported to have been an SS member. Critics say that worse than that is that it happened on a day when a foreign head of state was addressing the Commons --- how could security and diplomatic planning be so lax as to not regulate who entered the Commons gallery that day? The claim is that the PMO is responsible for vetting attendees at such events. Trudeau, who went into hiding for two or three days, came out to offer an apology on behalf of Canada’s parliament. How do you apologize for someone else? The other members of parliament basically didn’t do anything that would warrant an apology.

Trudeau’s “apology” is congruent with the erroneous belief that groups have responsibilities. It’s individuals that have responsibility. Whether you determine such things via the Bible, which is internally consistent among its 66 books written over a span of over 2,000 years, that responsibility is the function of individuals, or by common sense, it is clear that some other MP is not responsible for the PM’s failure. His philosophy allows people to hide from their duties and to evade the blame that might lead to improved behavior.

Further, Trudeau seems to be blaming “Russian propaganda” for his loss of face. Trudeau has lost the respect of the international community and his own country. He needs to start admitting his errors. He would be no less of a man if he did so, and he would probably start earning some respect.

I tender an hypothesis. It seems to me that nobody gets a standing ovation in parliament unless somebody knows who they are. I wonder if the PMO knew who Yaroslav Hunka was, and only back-pedaled when the Jewish community caught on and complained, with Speaker Rota consequently being asked to take the fall.

It is not surprising that there should be a former SS member in the West. After World War II, many German scientists ended up in the West. So did many German intelligence officers. I see no reason why other branches of German service would not similarly be represented. Also, keep in mind the historical setting. The Germans invaded Ukrainia, or The Ukraine, as it was variously called, after the Russian led Soviet Union, of which Ukraine was a part, systematically starved several million Ukrainians to death. Many in the Ukraine greeted the Germans as liberators. It is no surprise that they would join German forces, although one might look askance at choosing to join the SS. Within the Ukrainian nazi resistance against Russia was Stepan Bandera, who is known to have killed 110,000 Polish women, children and old men in  western Ukraine, and whose political movement morphed over the years into the nationalist political forces that, so far as I can tell, run Ukraine today.

I suspect there is more to Hunka’s relationship to Ukraine than meets the eye, and maybe he was a Ukrainian war hero fighting Russian tyranny. I don’t know. I do know that things are not always what our propagandists, including the PM, tell us.

What Does an Inverted Yield Curve Mean to You?

 

You may have been hearing something about the inverted yield curve in interest rate markets. The term refers to a condition characterized by short-term interest rates being higher than long-term rates. The inversion can occur for manifold reasons. Whether it is one of the reasons, I don’t know, but one can observe that an inverted yield curve often occurs when debtors are struggling with their long-term debt and do not have the creditworthiness to restructure it. So they start borrowing short-term to make their payments. While doing so creates demand for short-term money that would drive up its price (i.e.: interest rate), I can’t say that it’s a significant cause of the inversion. More likely, it is a result of the factors that have caused the relatively high short-term rates in the first place.

When big money sniffs recession coming and sells stocks to invest the proceeds in treasury bonds, the effect is to drive up bond prices, which is the same as lowering long-term interest rates, or at least keeping them from rising as fast as short-term rates. I suspect there is a lot of that happening these days.

Short-term rates being high is indicative of illiquidity. People are struggling financially and looking for credit. This lifts short-term rates.

There is a correlation between inverted yield curves and recessions. In the past 60 years, I do not think there has been a recession in the USA and Canada that was not preceded by an interest rate inversion, and only one time in that period did an inversion fail to be followed by a recession. The recession normally begins soon after the inversion is righted, that is, once long-term rates have risen to exceed short-term rates, or short-term rates have fallen to below long-term rates. The current inverted yield curve is the canary in the coalmine, signalling and approaching recession.

The recession is already in Europe. It is also in China. Real estate is a very significant part of the Chinese economy, and housing prices fell 9% in July --- not 9% year over year, but 9% June to July. Chinese imports and exports are also down sharply. A recession is in China, and China in in a recession. The notion that China will be the engine that pulls our wrecked economy into the repair shop is folly. China is stumbling. In any case, we no longer like each other and do not play nice.

It’s a good time to do what you have to do to get ready for a recession.

A bit about Poland, but first, Freeland says Canadians are Relieved by High Interest Rates

 

I was going to write about Poland this morning, but before I got to it, the Google news feed drew my attention to a speech Chrystia Freeland gave at what appears to be a childcare centre (center for you Americans). In yet another liberal wtf moment, she celebrated that the Bank of Canada’s decision this week to maintain the current overnight interest rate is “welcome relief for Canadians”. Do you feel like celebrating that interest rates will stay high?  She seemed to be saying that if you are Canadian, you are relieved that interest rates will stay up in the clouds. Does she think everyone has the money she has? Maybe not, but you could if you follow her advice: cancel your Disney Plus subscription and stop driving a car. What did you say? Oh….well yeah…I agree that if the government also provided you with a chauffeur and a car, you could do that. Good point. Glad you raised it.

Enough of the nonsense from the most amateur and incompetent federal government Canada has had maybe ever. Let’s say something about Poland. It’s been on my mind for a few years that Poland is becoming positioned to be the prime regional sovereign power in eastern Europe. The notion has been informed by Peter Zeihan and George Friedman. Their arguments make sense. A few days ago, I ran across a youtube video that explains the advances Poland has made in the past 30 years and that explores the trends. It’s worth watching and is at https://www.youtube.com/watch?v=-taT9JfSFAk. Russia has the position of being the regional power there now, but is demographically challenged: Russians are aging and not replacing themselves as quickly as needed. But the Polish birthrate is substantially worse. (1.38 vs. 1.5 children per woman). Poland has gotten a population boost from Ukraine, but that won’t happen every decade, so the thesis of Poland’s rising star might see a challenge on the basis of aging population.

We can look at the population pyramids. First, Poland.              

 

 

 

                

Now Russia.

 

 

     

They are fairly similar, but notice the higher percentage of gen-Z in Russia. Those are the folks entering the labor force in the next 20 years. Nonetheless, the current status of Poland shows what innovative thinking, a relatively free market, hard work and a culture of morality can achieve.