Canada Collapsing

Reading time: 5,000 words, 12 to 20 minutes excluding graphs

Global financial contagion has begun to infect Canada and it is becoming more evident in many different areas:

1) Increasing Unemployment
2) Bursting housing bubble
3) GDP falling
4) Debt bubble
5) Global disaster’s impact
6) Canadian bank bubble
7) Canadian pension problems
8) Labor unrest
9) Increasing anger

Although the focus of this post is Canada and its inevitable slide into another recession, it’s also of interest to Americans. Canada is still America’s largest trading partner. 20% of U.S. trade is with its northern neighbor and Canada’s resilience during the last recession put a floor on the U.S. recession. In other words, if the U.S. hadn’t been able to sustain its exports to Canada, the last U.S. recession would have been much worse. Not to put too fine a point on it but when Canada goes into a deeper and more prolonged recession, the impact on the U.S. economy will be much worse than during the last recession.


Before we look at Canada, there’s some late breaking global news. On January 24, I posted “Baltic Dry Index Crash Alert”.

I should have explained that the Baltic Index as a “leading economic indicator” means that it forecasts future economic conditions. Well, that forecast just became a lot worse. Keep in mind that, as an index, it is an average of various shipping rates: some high, some low. That’s important for what you are about to read.

Ocean freight rates have sunk so low that some of them are now negative. How is that possible? The Financial Times reported that a ship owner is paying a customer $2,000 a day to use one of its ships. Although not unheard of, it is extremely rare for this to happen. In fact, I’ve been involved in Logistics for more than 35 years and this is the first time I’ve seen this.

It is similar to a car rental company paying a driver to drive a rental car stranded in a remote location to a city where the demand for the car is higher. A car rental company would make such a deal in weak market conditions. In this case, the ship owner is paying to move the ship from Asia to the Atlantic rather than having the ship sitting idle and deteriorating.

In other words, the demand for freight in Asia has fallen off the proverbial cliff. The commodity boom has been driven largely by Chinese demand. China’s economy is slowing down. So much for Asia saving the world!

In other news, the demand for petroleum has also fallen off the cliff. Mike Shedlock of Global Economic Trend Analysis reports that global demand has fallen almost 4 million barrels a day from a peak if over 22 million barrels to less than 18 million. That’s a drop of over 18%. This also indicates that global economies are falling off a cliff. The chart below shows both petroleum and gasoline usage in barrels per day. You can see that usage is below the depths of the ’08 – ’09 recession. This also indicates we are entering another, deeper recession than the last one. This is just the way the recessions of the last Great Depression played out; one recession followed by a longer, deeper one.

Gas usage is back to 2001 levels and petroleum at 1997 levels.

Mike says “A mild winter can explain part of the drop in petroleum usage (heating oil), but it does not explain the declines in gasoline usage or the overall trends.”

Still in other news, the endless Greek sovereign debt circus seems to have sparked a drop in commodity prices and stock markets world-wide. On Friday, Feb. 10 GoldEditor reported, “Suncor Energy SU.TO was down 1.3 percent at C$34.15 and Canadian Natural Resources skidded 2.1 percent to C$37.50 as crude prices plunged on the renewed euro zone woes and as the International Energy Agency cut its oil demand forecast for a sixth consecutive month due to a weak global economy”. Let’s hope this is not the beginning of a long-term down trend because Canada’s export economy is largely resource-based. More on this later.

And, the news from Europe: Europe’s powerhouse economy, Germany is fast losing steam. German industrial production fell 2.9% in December from the month before prompting the government to cut its estimate for 2012 growth from 1.0% to 0.7%. Even that might be overly optimistic. Germany’s main industrial workers’ union says it will demand a 6.5% raise for its two million members in upcoming negotiations. Bad timing!

Oh, and let’s not forget Japan which, in spite of a flat-lined economy for more than 20 years still maintained an export surplus. No longer! Japan just posted its first trade deficit in 48 years.

Whither goeth the global economy, so goeth Canada. Here’s the sordid details on the outlook for Canada.


Although the western, resource-rich provinces are looking for workers, employment in the rest of Canada has slowed down. The Globe and Mail reports that the “country’s jobless rate hit a nine-month high of 7.6 per cent in January and job growth has stalled since last summer.”

Overall, “employment in the so-called FIRE category – the finance, insurance and real estate sector – has seen dramatic declines, tumbling for the fifth straight month.” The Globe goes on to say, “All told, 1.42 million Canadians were unemployed last month, up from 1.4 million in December.” Young people between the ages of 15 to 24 are especially hard hit. Their jobless rate increased for the fourth month in a row from 14.1% to 14.5%.

As the U.S. desperately tries to dig itself out of its economic hole (Hint: stop digging!) by devaluing its currency, the currencies of resource countries including Canada will rise. This will increase the price of commodities which will lower demand and further increase unemployment. The Canadian dollar hit a three month high last week further pressuring profit margins for exporters, most of whom are in Ontario and Quebec; two large provinces already hard hit by unemployment and weakening economies. Ontario’s jobless rate increased from 7.7% to 8.1% in December


The Bank of Canada, the International Monetary Fund (IMF) and many credible economists have been warning about Canada’s housing bubble. The trouble with bubbles is they burst and the frothiest part of the bubble bursts first. We are nearing the peak of Canada’s real estate bubble which is now 40% LARGER than the U.S was at its peak. according to Jesse Colombo of Others, such as National Post’s John Greenwood say Canadian real estate is at least on par with the U.S. at its peak. That’s small comfort.

The chart below should take your breath away.

In the chart above, the American house price bubble (blue line) peaked on 2005 and has been correcting (falling) since. The Canadian house price bubble (red line) has surpassed the U.S. and is still climbing.

The Wall Street Journal’s report “Housing Booms North of the Border” says, “As much of the U.S. housing market limps along, home prices north of the border are on a fresh tear, fired up in part by a borrowing binge that has sent Canadians’ debt to record levels—and now higher than their notoriously profligate U.S. neighbors—while income growth pokes along. All that has raised worry at the country’s central bank, which repeatedly has warned about rising debt levels, and among some economists, who say the market is ripe for a correction—maybe a steep one.”

“David Madani, Canada economist at Capital Economics, an independent research consultancy based in London, says Canadian housing prices could be in for a 25% drop in the next three years, a correction he says is warranted by the now-inflated ratio of house prices to income. House prices have risen to almost 5.5 times disposable income per worker, well above the long-term historical average of 3.5, he says.”

The frothiest part of Canada’s real estate bubble is, of course, Vancouver; affectionately known as “Hongcouver” for all the Asian money it attracts. The peak is in because listings have exploded 20% while sales are tanking; affectionately known as the number of houses being put up for sale is rapidly increasing while fewer houses are selling.

The next step in a bursting real estate bubble is declining prices. This sets the stage for an uncontrolled downward spiral. More homeowners try to bail out by selling. This increases supply and drives prices even lower. Worse, potential buyers will then wait for prices to drop lower. This reduces current demand and drives prices lower still.

Vancouver has a long way to drop. Garth Turner maintains that it’s “impossible to sustain a SFH [single family home] average of $1.1 million in a city where family income averages $83,130.” Vancouver house prices are more expensive than New York City and prices are from 9.5 to 13 times the median household income. Typically a comfortable rule of thumb is 2.5 to 3. In other words, Vancouver is over-priced by roughly 400%. Put another way, Vancouver real estate needs to drop about 70% in price before reaching sustainable levels. Like I said, Vancouver has a long way to drop.

Garth Turner says that in Abbotsford, BC there were 8,320 houses for sale in the Fraser Valley and just 799 sales last month. To put this in perspective, consider that in the Greater Toronto area (GTA), home to millions, there are 10,000 listings compared to the Fraser Valley’s 8,320 listings with a population of only 257,000. As well, he says, “in Vancouver, a third the size of the GTA, twice the number of properties on the market – over 19,000.”

You also know the peak is in, not just for Vancouver, but for all of Canada when the mortgage guys start running for cover. Turner reports that, “CMHC announced it’s running out of room to insure more high-ratio, high-risk loans – the stuff which has fueled Canada’s housing bubble.” And, Canada’s second largest mortgage lender CIBC’s FIRSTline, “is cutting off borrowers who can’t verify their incomes, including small-business owners, commission salespeople and immigrants. The company is also capping loans at $1 million, which is tough news in Vancouver.”

If you plan on selling your Canadian home within the next few years, the time to sell is NOW! Not tomorrow but today. Yesterday would be even better. If you plan on buying, the time is NOT YET because prices are about to get a lot cheaper. If you own a home, if you can afford the mortgage and if you plan on staying put for the long haul (that’s three IF’s), you should be ok as long as you have income to carry the mortgage payments.

However, this “ok” is on a sliding scale. The frothier the market you’re in, the farthest it has to fall and the longer it will take for prices to stabilize. In the frothiest (Vancouver), in 2nd place Calgary and 3rd place Toronoto prices might take decades to recover. If ever!

And, “ok” is also contingent on you maintaining your income and ability to make mortgage payments. But, “ok” gets real tired when the bond markets start demanding higher rates, driving up interest rates, now completely out of the government’s control. This, in turn, drives up mortgage interest rates. When is your mortgage due for renewal? You might be able to afford payments at today’s rates but, what happens when rates go higher?

British Columbia is turning into ground zero with the epicenter in Vancouver. This crunch will spread to the rest of Canada just as it did in the U.S., southern Europe and elsewhere. Remember when Seattle and Boston thought they were immune? They were; until they weren’t.

One of the greatest overlooked factors is DEMOGRAPHICS; the study of changing population characteristics. Few people talk about demographics, yet it affects us every day in every way. For instance we’ll have too many students with too few schools while a couple years later too many empty schools. Everyone is surprised when it happens. Who could have foreseen it? Answer: anyone with an understanding of demographics.

The Baby Boom demographic will kill Canada’s housing market. Our largest population segment, the Boomers, will be cashing out of their homes over the next ten years. Many of them are hoping to retire on the equity they’ve built in their homes, just as they did in the United States. It didn’t work there; it won’t work in Canada either.

The problem is they’re all going to be selling and too few buyers buying. There are several reasons:
1) The boomer population exceeds any other segment so the numbers work against them. Sellers will outnumber buyers.
2) High supply of houses + low demand = falling house prices.
3) Boomer incomes are higher than any other segment so few young people will afford the Boomer’s McMansions at today’s prices = falling house prices.

Another factor that will affect the other population segments are the unexpected consequences of falling house prices. It puts home owners into negative equity (“underwater”). Few people will buy another home if they have to sell their present home at a loss. So fewer sellers means fewer buyers and so the downward price spiral feeds on itself. It happened elsewhere. It’ll happen in Canada, too.

There are other unintended consequences. If you cannot sell your home, you become a debt slave and cannot move to where the better jobs are. This dampens income which also contributes to Canada’s economic decline.


Gross Domestic Product (GDP) is the value of all the goods and services produced within a country for a given period of time. Canada’s GDP fell in November following a flat October. Analysts had expected a 0.2% increase. Instead, GDP dropped 0.1%.

You might think this is small potatoes. But, here’s what you’re not being told. These numbers are NOT adjusted for inflation. With an official inflation rate of roughly 3% (unless you buy groceries or gas in which case it’s closer to 7%), Canada’s economy must grow from 3% to 7% just to keep pace with inflation. Anything less than that, a negative 0.1% indicates a collapsing economy. Small potatoes, indeed!

The Bank of Canada and Finance Minister Jim Flaherty and numerous credible economists have been warning Canadians that Canada is NOT immune to the next global downturn. Canada went into recession in ’09 along with the western world while China and the BRICs were growing and providing a counterbalance. Now with China and the rest of the world poised for another downturn, Canada will go into a deeper recession without China and the BRICs’ safety net.

Also, Alberta, affectionately known as “Oilberta” or “Saudi Alberta” will not save the day. Oil and gas output is declining and not because of supply constraints but because of reduced demand. In the U.S. shale gas “fracking” has increased U.S. supply by 1.3% in November. The mild winter has also contributed to reduced demand for heating fuel. The Globe and Mail reports that, “lower Canadian output was attributed to shutdowns for maintenance. But weaker markets will take a further toll in coming months. There is simply no shortage of the stuff.”

“The latest numbers show the economy is walking a tightrope without the net typically provided by a rebounding U.S. economy, and amid questions about Chinese demand for energy, base metals, lumber and other resources.”

“The main message here is that it really doesn’t take much to knock this economy off track,” said Doug Porter, deputy chief economist at BMO Nesbitt Burns in Toronto.

“It shows that there isn’t much underlying strength. It just takes weakness in one particular segment to pull the economy down.”

And, now the Greek financial crisis is teaching us a valuable lesson. AUSTERITY PROGRAMS DO NOT WORK. Cutting social programs and government jobs decreases incomes. Increasing taxes also decreases incomes. Decreased incomes lowers tax revenues which increases government debt which drives up the interest rates on government bonds which further increases government spending and which further increases debt. And round and round it goes in a downward debt death spiral.

So what does the Greek death spiral have to do with Canada? The Globe and Mail says, “we are looking at weaker than expected fourth-quarter growth and a downbeat first half this year, calling into question the wisdom of billions of dollars in spending cuts that the Conservatives are planning for the next federal budget.” Let us hope the Canadian government learns this painful lesson before they embark Canada on a Canadian death spiral.


David Beattie, a Moody’s analyst says, “Canadian household debt as a share of personal disposable income stood at a record 150.8% at the end of June this year. We are concerned that, while taking advantage of low interest rates, consumers are also taking on debt they may not be able to service when rates inevitably go up.”

As mentioned previously, rates will inevitably increase as bondholders rebel against low interest rates on increasingly risky government bonds and they will demand higher rates to offset increased risk. Greece is an extreme example where David Oakley, Capital Markets Correspondent for the Financial Post reports bond interest rates exceeding 50% and some 3 year bonds are trading at 172% interest.

A significant rise in unemployment will leave many Canadians unable to meet their financial obligations in spite of current low interest rates. What happens when Canadians are hit with a double whammy of both higher unemployment and rising interest rates remains to be seen. If the U.S. is any example, the result will be a downward debt death spiral.

And that’s only consumer debt. Canadian government debt is also increasing. When government debt increases it crowds out private investment. As anyone with a modicum of economic understanding knows, governments do NOT create real jobs. Only private investment and business create real, sustainable jobs.

Chris Horlacher, The Dollar Vigilante’s Toronto correspondent says, “capital flight into government debt is crowding out private investment. This is part of what is prolonging the depression. Instead of financing economic recovery through investment in new ventures, projects and economic reorganization, primary dealers are instead simply financing the growth of government. This only further dampens the private economy and forms the vicious cycle that is sure to keep the economy in a recession.”

Chris’ report continues below.


The Bank of Canada’s “December 2011 Financial System Review” identified five major global risk areas.

1) Global Sovereign Debt, as above, crowds out private investment. It’s very telling that the B of C even considers the U.S. dollar losing its reserve status. When that happens, unfavorable borrowing conditions will sky-rocket debt service levels in the U.S. and drag Canada down with it.

2) Downturn in Advanced Economies. “Global economic activity is slowing down markedly. Household and bank deleveraging is dragging the world economy deeper into recession. Further downturns in advanced economies would have a substantial impact on Canadian businesses, households and financial institutions transmitted through bank losses and deteriorating credit quality.” A slowdown will increase loan losses which will curtail bank credit which will “trigger an adverse feedback loop through which declines in economic activity and stress in the financial system would reinforce each other.” In other words, Canada is a debt death spiral just waiting to happen.

3) Global imbalances such as trade deficits and surpluses are a major risk by creating massive government debt in western economies and massive asset accumulation and bubbles in others such as China where “they have constructed entire cities that cannot be occupied at current prices. It appears that China, who has experienced year over year GDP growth in excess of 8% for many years, may be in for a correction very soon.” And two months later, the plunge in the Baltic Dry Index heralded the beginning of Chia’s downturn.

4) Low Interest Rates is where the Bank of Canada falls flat on its face as it advocates more of the same. It fails to recognize the risk of inflation caused by interest rates held too low too long. It also fails to recognize that low rates prevent imbalances and distortions from normalizing. This is not surprising since a real solution would cause the banksters to feel the pain for the problems they helped to create.

5) Canadian Household Debt is one of the biggest risks. Any adverse economic shock which is now practically inevitable will make debt payments difficult. Canadians are deeper in debt than the Americans or the British. Look at debt levels on the chart below.

The U.S. (blue) and the UK (purple) are reducing their debt levels. Canadian (red) debt is still increasing on the path to disaster.

Horlacher says, “The BoC expects that this ratio is going to continue to rise, further endangering the financial condition of Canadians and making them even more susceptible to financial shocks.

The Bank of Canada points out that Canadians are vulnerable to two inter-related events; falling house prices and a falling job market (just as happened elsewhere) that will create a negative feedback loop (just as happened elsewhere) by destroying household net worth and jeopardizing credit access (just as happened elsewhere).

Conclusion – as we’ve seen over the past 5 years of economic dislocation, government bureaucracies are notoriously near-sighted in underestimating adverse economic impact. Worse yet, we know when it hits the fan that the Bank of Canada will intervene, thus compounding the damage just as happened elsewhere. No, it’s not different this time.


Canadian banks have been such darlings compared to other nations’ banks. At least that’s what the ass media has been telling the world. But, are Canadian banks as solid and impervious to downturns as the crass media tell us?

Short answer: NO.

Long answer: keep reading.

Canadian banks are among the most leveraged banks in the world at more than 30 to 1. This means a 4% drop in asset value will bankrupt them. Since Canadian banks aren’t the oligarchic banksters that U.S. investment banks are, they are less likely to be bailed out by the taxpayers. Bank bond and stock holders will take the brunt of losses. That likely includes part of your pension funds which are heavily invested in Canadian darling banks.

Canadian banks hold substantial uninsured assets such as credit card debt. This makes them particularly vulnerable to a downturn. According to David Beattie, Moody’s analyst, “the Royal Bank of Canada is the most susceptible with 24% of its total managed assets made up of uninsured loans. Next is Bank of Nova Scotia at 21%, CIBC at 20%, Toronto-Dominion Bank and National Bank of Canada both at 18%, with Bank of Montreal the most protected at 14%.” See the chart below.


Beattie also reports that the largest single asset on Canadian bank’s balance sheet is residential mortgages. 30% of these are guaranteed by the Canadian Mortgage and Housing Corp. (CMHC) effectively putting Canadian taxpayers at risk during a downturn or a collapse in residential real estate values.

It is generally believed that Canada has a more solid banking system than the U.S. and that Canadian lending practices are a lot more stringent. However, it is becoming apparent that the soundness of Canadian banks is not a function of the banks themselves but a reflection of the soundness of the Canadian economy. That is, until now. Now, the Canadian consumer has the highest debt-to-earnings ratio (155% to 158%) in all 34 OECD countries.

The National Post’s Mike Brock in “The Hidden Canadian Housing Bubble” says, “In absolute terms — actual liquid capital — Canadians banks are less capitalized than many of their European and American counterparts. In fact, all big five Canadian banks, using the American and European method of capital ratio measurement, rank in the bottom ten of the biggest 50 banks in the world. Even the embattled French bank, Société Général, has a better absolute capital ratio than BMO, TD, CIBC, RBC and Scotiabank.”

Also, if Canadian lending practices are so stringent, why is Canadian mortgage debt to income ratio higher than it was at the peak in the U.S.? And, still climbing.

Canadians will be in for a rude awakening in the next downturn. Canadians will find that it’s not different this time. The Australians, the “other’ resource-based exporter are discovering that their housing bubble has already begun to burst. They thought it was different this time, too.


There are serious issues with both private and government pensions in Canada that will have a major impact on the Canadian economy. In short: private pensions are too low to live on and government pensions too high to be sustainable.

Macleans, Jan. 23 reported, “Last month the C.D. Howe Institute warned that the lucrative defined-benefit pensions of federal employees, now all but extinct in the private economy, represents a $146-billion unfunded liability even according to the numbers in the Public Accounts of Canada. Using ‘fair value’ accounting with realistic asset yields, the Institute said the figure is more like $227 billion. Factor in the total for defined benefit pensions of provincial public sector employees – teachers, nurses, civil servants – and you have a 12 digit promise that must be either broken by governments or covered by taxpayers.”

Adding to the burden, Macleans reports that, “the median retirement age in Canada is now 62 for the overall labour force but still just 59 for public sector workers.”

The experience of other countries during the last recession tells us that taxpayers will be unable to cover these lucrative public pensions because tax revenues fall significantly during a deep recession. And, governments realize that increasing taxes is not an option because that further weakens an already weak economy.

Being thus caught between a rock and a hard place, this leaves two unpalatable options: renege on these government pensions or Quantitive Ease (print increasingly worthless paper money) to infinity. The experience of Canada’s neighbor shows the unintended consequences of endless QE: the creation of more bursting bubbles and painful inflation that government desperately denies but everyone feels at the pump and check-out counter.

Whereas public pensions are too rich to sustain, private pensions are too poor for pensioners to survive. The Canadian government has already increased Canada Pension Plan payouts to maximize at age 67, trying to encourage people to work longer and delay retirement. The February 6 Macleans headline says it all, “Working until you’re 100” with a by-line that tells us that, “…delayed retirement has its advantages.” Oh, joy! Forget Freedom 85.

And it’s already happening. According to Macleans, 34% of Canadians 55 and older were working in 2010 compared to 22% in 1996. Now that I mention it, I realize I’m 4 years older than my father was when he retired nor do I have any plans to retire in the near future. I could have retired on a full company pension plan a year ago but I’m too fearful of the future to lock myself into a fixed income until I absolutely have to. As more Boomers do the same, we deny employment to the young and that too has unintended consequences.

1) It increases youth unemployment

2) It delays the recovery of full unemployment for the young even after the economy recovers.

3) It erodes work skills in the young, thus ensuring a whole generation
of “unemployables”.

4) The unemployed youth will further burden Social Security at a time when tax revenues are falling.

To make matters worse, many of us are still doing all the wrong things according to Macleans. Because interest rates are so low, “people are more inclined to take out home equity credit and borrow money. Rather than buy an affordable house they can pay off quickly, they are opting for bigger houses that become a financial burden down the road. A third of retirees are still saddled with debt, according to Statistics Canada.”

What to do

1) Pay off your debt
2) Stay out of debt
3) Save
4) Buy durables now that you’ll need in future when prices are higher. Click on STOCKPILING for more details.
5) Sell your McMansion now while prices are high, rent for a few years then buy a smaller home after prices have collapsed.


The Jan. 23 Macleans article forecasts increased public sector labor unrest for 2012. Almost half a million public sector employees will negotiate their contracts with cash strapped treasuries this year. The Conference Board of Canada in December warned, “that 2012 bears significant potential for ugliness.”

For the better part of a decade, public sector workers’ annual pay increases outpaced the private sector. This started to change when they fell behind in 2010 and 2011. Now that contracts are up for renewal, the unions are chomping at the bit to reclaim their lost increases at a time when austerity is the rule everywhere in Canada except Alberta. And, public sector unions have never been noted for their intelligent timing so one can again expect them to do the stupidest things at the worst times.

Adding fuel to this fire is increasing government intervention. For three decades, the Canadian federal government has rarely intervened in labor disputes. That began to change in 2011 when the federal government threatened back-to-work legislation for the customer service staff of Air Canada (motto: “We’re not happy until you’re not happy” ) and forcing binding arbitration on Canada Post (motto: “we’re even more miserable than Air Canada” ). Sorry for the sarcasm but have you ever met a happy government employee who liked their job?

And, it’s not just the federal government. Provincial governments too, have been intervening with “essential service” designations to pre-empt strikes.

Combining mindless public worker unions with stubborn cash-strapped governments is a recipe for labor strife this year. Strikes and labor disputes will have a deleterious effect on an already weak economy poised on the brink of another recession.


Last but not least is increasing anger. There is no anger index but if there was, my gut feeling is that the level of anger is increasing everywhere I look. This might be the year of short tempers as disputes become more rancorous on both a professional and personal level and in both public and private affairs. This could be a very long, hot and angry summer.

February 12, 2012

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About gerold

I have a bit of financial experience having invested in stocks in the 1960s & 70s, commodities in the 80s & commercial real estate in the 90s (I sold in 2005.) I'm back in stocks. I am appalled at our rapidly deteriorating global condition so I've written articles for family, friends & colleagues since 2007; warning them and doing my best to explain what's happening, what we can expect in the future and what you can do to prepare and mitigate the worst of the economic, social, political and nuclear fallout. As a public service in 2010 I decided to create a blog accessible to a larger number of people because I believe that knowledge not shared is wasted.
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5 Responses to Canada Collapsing

  1. Pingback: credit card debt falling statistics?

  2. Ken says:

    Gerold this is an amazing article well detailed and self explanatory. I appreciate the time effort and research you have placed into this article. Most individuals don,t seem to see what’s really going on they believe things can just keep moving forward which is economically impossible especially when you take a broader look at the Global situation.

    • gerold says:

      Thanks for your comment. I agree that most people don’t really see what’s happening. I’ve been thinking about this type of thinking and haven’t yet been able to understand it or get a handle on it. It’s a combination of denial, gradualism and incrementalism, and definitely deserves a write-up.

  3. Gravlore says:

    FANTASTIC article. It captures so much of what I already know. You put it into words that are easy to read and understand. Here in SK I said the fantasic Jansen mine would be put on hold because other nations would cut spending…..Yes even on the fertilizer that mankind could not do without.

    That is a massive shoe that is dropping in Saskatchewan. The natives will be restless.

    • gerold says:

      Thanks for your perceptive comment! I so hope you’re wrong but I know you’re right. Our delusions of “this time it’s different” will be our undoing. Our fertilizer and other resources are worth nothing if Canada’s customers are broke.

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