We are behind schedule
I thought I`d share some musings about global economic conditions and the Cdn. connection.
It is a historic day. Not only did oil hit another all time high of $96/barrel but the Cdn dollar also recorded a record at $1.07 against the US dollar. I still don`t believe the global economy can function over $85, for one reason, consumer debt. Regardless of predatory sales in subprime mortgage that started the current global credit crunch the vast majority of consumers are over mortgaged, over spent with 0 savings. Add the run up in commodity prices over the last 5 years guaranteeing inflation and the wallets will stay closed.
The US could actually be cushioned by their falling dollar, imports get more expensive while exporters gain an advantage. Industry could plug along evening up the chances of a mild recession over a deep one. There is a caveat.
The old adage that when the US gets a cold we get the flu has already happened. Central Canada has been shedding jobs (flu) since 2002 with huge pressure on Ottawa to supply the chicken soup.
Here`s where it gets interesting, Canada has second in oil reserves to Saudi Arabia. As long as the global economy chugs along with enough credit and consumption Cdn commodities will continue to supply massive revenue to government. The windfall revenue created almost all the jobs created as reported in the last two statscan reports show they were public sector, not private. The Ontario Liberals campaigned on 30,000 added jobs just before the last election, they were all governmentr hires.
The current tug of war between the factions calling for subsidies, tax cuts and other assorted methods is much the current topic of discussion.
The US is the primary market of 80% of our exports so with the higher dollar what measure could possibly turn this sector around. During the tech boom Us companies reinvested while Cdn companies have done little retooling for decades. The sector is out dated, out moded and out preformed at all levels.
With oil at $96 a barrel the global economy just might make survival guidelines appropriate for the government printers.
How bad could it get, lets look ahead. Most best case has oil running out in 50 years, worse case predicts 20 years. At the rate we`re going I doubt if we`ll have consumer debt under control before oil shortages create more havoc than $100+ oil.
I don`t think my view could be considered negative except by the most overly optimistic. Even if the different sides and their recipe for chicken soup created some relief, even worse coming soon is a very real possibility.
Adding the following article on climate change to economic issues makes me stress again, it`s imperative that Ottawa invest $50m to kick start a global university design competition for a maglev indavidual vehicle transportation system.
posted by voxpopuli | 7:42 PM
4 Comments:
Internet discussion from over 3 years ago. Link on request
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Tue Jul 6, 2004 9:58 am
Starting a discussion on feasibility.
The West could build and profitably run an individual
high speed transportation system that would function
equally well globally. The need environmentally can`t
be argued. The need to convert to a better system is
also dictated by the global oil supply.
A massive global conflict is inevitable,,,unless
The following statistical information applies to most countries of the world, most notably. North America, Europe, the UK, South and Central America, even Asia to a worrisome extent.
Canada has now reached the negative saving rate the US reached in 2005. Cdn consumer debt has now reached $1 trillion while the US consumer debt with 10 times the population has reached $10 trillion.
The only solution, for that matter other than war the only suggestion has been presented to date.
A global individual vehicle magnetic lift, propulsion transportation system.
http://www.nemmar.com/asp-rel-articles-03/downloads/asp-d01/cwcda-012005.pdf
Debt Time Bomb?
January 20,2005
Canadian households are now 7%more indebted than they were last year,and 20%more than they were at the beginning of the decade.
http://www.cbc.ca/consumers/market/files/money/debt/index.html
January 15 and 22, 2006
In 2003 the average Canadian household owed more than its annual take-home pay. In fact, we’ve reached the point where the average Canadian family owes more than it earns. Personal bankruptcies are near record highs. Savings rates are at record lows.
In 1984, Canadians owed about $187 billion in personal debt. Today we owe more than $801 billion.
http://www.statcan.ca/english/freepub/75-001-XIE/comm/fact-11.htm
By 2005, for each dollar of disposable income, Canadians owed $1.16 and Americans $1.24.
Personal savings rates peaked at 20.2% in Canada in 1982 and at 7.5% in the U.S. in 1981. By the late 1990s, however, the two rates were converging, reaching 1.2% in Canada and -0.4% in the U.S. in 2005.
In 1974, US Federal Reserve data show consumer debt totaled $627 billion. By 1994, the total debt had risen to $4,206 billion, and by 2004, it reached $9,709 billion.
Well said.
Mandelina
When I first started writing about the potential of a global transportation makeover the global economy was expanding with strength and had not yet reached the peak. At the time I didn`t think the ambitiousness of the project compared to the potential should have been any kind of deterrent to at least generate a feasibility study. The current economic situation doesn`t minimize the ambitiousness but it should be maximizing the need for consideration on Nov. 15th.
Thanks for the consideration,
Robert
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