Suffer the Little Children

The sorrow that has lately been stirred from the embers of receding memories in the matter of indigenous children, who in past generations disappeared into the misty operations of residential homes that were funded by the Canadian government and run by the Catholic Church, has aroused a variety of responses. Some seem to think that there was something sinister --- perhaps a depopulation plot --- going on. Others think that it is much ado about nothing. A balanced perspective probably leads to something in between.

Relying on what we hear in the News is unlikely to provide the take that one might have from listening to First Nations survivors of both residential schools and day schools operated by the Catholic Church. I well recall sitting in a conference of the Federation of Sovereign Indigenous Nations held in wintry Yorkton, Saskatchewan a couple of years ago, and listening the first-hand recollections being shared with the audience. What most sticks with me is the account of one man who told about being a young boy and witnessing a priest from the school show up at his family’s home and requiring to see the boy’s older sister. The children’s father had the priest in, and the priest commenced beating the girl on account of some minor school infraction, while the parents stood by. The impression I received was that the parents thought this was their duty or at least that they felt powerless.  This was both a wow and a weeping moment for me. I am a father. I have a daughter. And if something like that had happened in front of me in regards to my daughter, it may have been the last thing that priest would ever have done…..at least in this life. It is amazing to me that parents would be of a mind where they thought they had to allow the bully priest into their home to abuse their daughter. I suspect it was the result of decades of conditioning.

But how does a priest come to be like that? The Catholic Church has been responsible for many remarkable and commendable good works. At the same time, it has bred and countenanced some of the vilest of behaviors. Perhaps its very size dictates the probability of there being a very wide range of behaviors extant within its domain. It is huge. Jesus, of course, does not seem to have contemplated that his church would operate on such a scale. He referred to his church as a “little flock” (Luke 12:32). Perhaps quality control is harder to maintain within a large organization. I say “perhaps” because I can think of arguments against my statement.

I suspect that the celibacy practices have been psychologically damaging to many priests. It is an unnatural way to live. There are some adults for whom the single and celibate life is a good fit, but I suspect they are a small minority. I can see a priest seething inside with unresolved frustrations arising from celibacy, and manifesting the anger through abuse of defenseless children.

I do not believe that the mass graves at residential schools indicates some deliberate destructive action. The schools ran during times of great epidemics, and children would have died. What I don’t get is why the families were not notified. Why are there so many indigenous people today who do not know what happened to certain family members after they were sent to a residential school?

The current scandal reminds me of another mostly forgotten similar scar on Canadian history --- the forced removal of Dukhobor children from their families. And to think that the criminals behind such a practice were allowed to retire and draw their government pensions. It’s disgusting.

What To Do; What To Do?

 

I have been expecting the value of money to change substantially in the medium term, and my expectation has been for price inflation. A lot of it. Anyone trying to construct a building has seen it happen. But we see it in food too, and fuel. It isn’t just a matter of there being so much more available spending money, but supply chains have been disrupted as was easily predictable. When blue collar people are staying home from work, of course production of goods will suffer. In Canada, we are reporting an inflation rate of 3.4%, but if you are shopping for pretty much anything, you probably don’t believe it. It’s hard to see how price inflation can do anything but get worse. Not only is the government running huge deficits, but people have very high savings from which to fund their spending.

We have an M2 in Canada of about 2.2 trillion dollars. When the government infuses several hundred billion new dollars into the works, the action greatly raises people’s ability to bid up the prices of goods and services. So, we expect prices to continue rising. But read on.

Prices are a function of what people are willing to pay. Their willingness to pay depends on how rich they feel. Cash is only part of the feeling. What they perceive as the value of their other assets has a lot to do with the spend-versus-save decision. Other assets include stocks, bonds, real estate, and derivatives, among other assets. The real estate market is twice the M2 money supply --- in excess of 4 trillion dollars. The stock market value is over 3 trillion. It’s hard finding data to establish the size of the Canadian bond market, but my guess is 25 trillion. My estimate on the derivatives market in this country is about 100 trillion. Further, many Canadians are exposed to the markets of other countries. My point is that even though the expanding money supply combined with shortages of goods makes a good argument for aggressive price inflation, even a small contraction in other markets could make people suddenly feel quite poor. And such contractions have a way of snowballing, especially in an economy that contains so many investment bubbles. Deflation is a very real risk. Cash may be trash now, but we may see cash becoming king again, so it is important to hold cash and assets that are liquid --- easily convertible into cash. It’s a difficult road to navigate. Cash is losing value at the rate of at least 5% per year (I think it is probably more like 15%), and it doesn’t take long for half the value to be gone, and yet cash may be what is needed at some soon time of trouble.

My advice: take charge of your investing. Study. Read widely. If you are a believer, pray for wisdom. Be nimble and ready to turn on a dime, but don’t be fickle.

 

The Fading of Canada

 

I haven’t posted anything here for a long time. Life gets busy, and there seems to be many other ways to make a positive difference in people’s lives…..and that is what I really like to do.

I am concerned about a trend I see in Canada. Maybe it is elsewhere, but I have not been traveling during the Plague, so I cannot offer firsthand testimony. What I see here is the widening difference between being Have-Nots and what that very astute MP Pierre Poilievre refers to as Have-Yachts. 25 years ago it seemed to me that there was a veritable slave class developing, and that maybe the best way out of it for most people was education. I have long encouraged people, both young and old, to get more education. Aside from the process being good for maintenance and development of mental faculties, knowledge is power.

I see Canada’s GDP per person rapidly declining. We are now #18 according to a list I recently saw (https://statisticstimes.com/economy/countries-by-projected-gdp-capita.php). $42k GDP per person. And when you consider that GDP is about production, and not usability of the production, that makes matters worse. For example, if production is wasted or destroyed, it is still part of GDP. GDP can be very high in a war economy even though huge amounts of resources are being blown up and do not increase wealth at all.

Our per capita income is reported as higher than the 42k. No wonder, with all the cash being freely given to people, ostensibly as “stimulus.” It’s sad that our financial policy makers are so economically illiterate that they think cash injected into an economy whose debt is several multiples of GDP will actually stimulate the production of goods and services. So far as I know, there is no empirical evidence to support such nonsense. Instead, what we have is an increasing amount of cash chasing a decreasing amount of goods and services. The economy is choking, and our governments are stuffing more cash down its throat.

I am not against distributing cash, but it must be accompanied by measures to increase the production of goods and services if our standard of living is to be maintained.  We do not eat cash, cover ourselves with it, nor drive it. If 100 people show up at an auction with $10,000 each, prices to which the items are bid will be a lot lower than if someone suddenly gives each attendee another $5,000. Our economy is like the auction. We are driving prices up at quite the rate. Far beyond the annual 2% rate that the Bank of Canada claims as a target. We left 2% over the rear horizon quite a while back. Yet the Bank of Canada keeps on with the story that sounds like it was written by a Liberal speech writer.  It looks to me like we have entered into an inflationary depression. Admittedly, there are deflationary pressures such as low consumer demand and the possibility of a credit collapse, but I think the Bank of Canada, with its fake excuses, will keep pumping cash into the federal buckets.

In the short-term, the deficit between growth of money and decline of production has been closed by imports, but that is not a sustainable solution. The value of our money is only what our creditors assign to it, and the more Canadian money there is versus our own production, the lower the value of the money because essentially a nation’s money is a claim on its production. Ultimately, the lower our production, the lower our standard of living.

Come to think of it, in some ways the standard of living has been dropping since I was a boy. We used to have physicians making house calls and milk delivered to the door (from a horse drawn wagon even!). We used to sit in the car while the gas was pumped for us and the windshield washed and the oil checked. We used to be able to phone businesses and not reach a computer giving us a string of layered messages, adverts and monotonous music. We used to be able to drop in at a CRA (at various times CCRA and Revenue Canada) office and talk to a real person face to face. We had wood furniture. We had stay at home moms because families could live on one income. We didn’t have our public parks (such as Beacon Hill here in Victoria) turned into squatter camps. We had grade schools with classes of under 20 students.

No, this country is in a slide, mostly under the stupefied watch of its “natural ruling party” --- the Liberal Party, which long ago divorced itself from liberal values so far as I can tell.