Canada Hits the Wall in 2016 – Part 4: Tourism, Unemployment, US Dollar & Forecast

Reading time: 2,758 words, 8 pages, 7 to 11 minutes & only 2 ugly charts.

Synopsis – covered in this final post – Part 4 of 4
Tourism
Unemployment
US Dollar
Forecast Canada
Conclusion

Synopsis – covered in Part 1
Baltic Dry Index
China’s Slowdown
Commodities
Debt, Debt and More Debt

 Synopsis – covered in Part 2
Economy
Governments and Voter Stupidity

Synopsis – covered in Part 3
Inflation
Oil Price Plunge
Real Estate Bubble
.

Tourism

The sinking Canadian dollar (called the “loonie” for its picture of a loon) was supposed to be a boon to Canada’s tourist industry as tourists took advantage of the stronger U.S. dollar. Although Toronto’s share of tourism increased, the same is not happening elsewhere in Canada. Once again, we overlook the impact of demographics.

Global News reports that “Canada’s reputation as a land of natural beauty and spectacular scenery tends to resonate more among older visitors and less among millennials…”   To put this into perspective, U.S. visitors in Canada in 2016 are expected to spend $9.6 billion compared to Canadian snowbirds that are expected to spend $20 billion, more than twice as much, in the U.S.

.

Unemployment

Alberta is presently suffering the greatest Canadian job losses, but the pain spreads to the rest of Canada as many oil patch workers either moved there and sent money home or commuted from other points in Canada. The Globe and Mail headlines “Alberta endures most annual job losses since early 1980s recession.”

employ Alberta

 

The Calgary Herald expects “oilsands construction workforce to plunge 84% by 2020 and has [already] wiped out 100,000 direct and indirect jobs according to one industry estimate  Meanwhile, the number of people receiving jobless benefits in Alberta jumped more than 100% in December.”

 It’s not just lost jobs that impact the economy. Many people are having work hours reduced so the loss of income extends beyond the unemployment numbers.

Zero Hedge reports, “Suicide rates jumped by 30% and in Calgary commercial break-ins almost doubled from a year earlier, while bank robberies were up 65% and home invasions increased 52%.”

Crony capitalism is not limited to the U.S. After receiving a $1 billion bailout  from Canadian taxpayers last October, Bombardier recently announced  the firing of 7,000 employees. Bombardier is based in the corrupt 3rd world country province of Quebec. Considering the Liberal’s propensity for scandals, do you think it’s coincidence that Bombardier didn’t ask for a bail-out until Trudeau’s Liberals were elected?

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U.S. Dollar

Anyone looking to explain the rising U.S. dollar as a conspiracy had best keep looking. I covered the basis of conspiracy theories in a longer article. As Robert Heinlein said, “You have attributed conditions to villainy that simply result from stupidity.”  In other words, the correct explanation is incompetence. In this case it’s the incompetence of our leaders and central banksters to manage free market economies. The strengthening U.S. dollar is simply a matter of supply and demand.

On the demand side is the need to raise Amerikan cash for defaults, hedge fund redemptions, margin calls, etc. On the supply side, U.S. dollars are created by debt and then vanish when debts are paid off resulting in a shortage of U.S. dollars which may seem counter-intuitive until you realize global debt is north of $600 trillion U.S. dollars.

Nobody wins with a strong U.S. dollar. A reduction in the supply of dollars is deflationary and central banks are horrified by deflation because there’s even less money to pay debts, As well, they fear that consumers will delay consumption in anticipation of lower prices in the future and this is contractionary to the economy.

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Forecast Canada

The Globe and Mail reports that “Since the Great Recession, Canada has relied on two key elements to keep its economy humming: oil and real estate.”  As Canada’s economy sputters, can other industries pick up the slack?

Spoiler alert: the short answer is NO.

a) Consumers – The same Globe and Mail article cites household debt greater than experienced by Amerikan consumers before the last Great Recession so, “the years of high spending and rising debt have drained the capacity for growth from the consumer side.”

The article goes on to say that “Canadians are now spending 14 per cent of their disposable income on debt payments, a near record. Last month, the Bank of Canada warned that the number of Canadians whose debts make them vulnerable to an economic shock had doubled from 4 per cent to 8 per cent, since before the global financial crisis.”

In other words, don’t expect Canadian consumers to come to the rescue. Retail sales fell in December in all Canadian provinces and territories except tiny Prince Edward Island. An Ipsos Reid poll  “suggests nearly half of Canadians surveyed last month are within $200 per month of being unable to pay for their bills and make their debt payments …[and]  that 31 per cent of respondents said any increase in interest rates could move them towards bankruptcy.”

 b) Lower gas prices – by spending less on gas, it was thought Canadian consumers would have more disposable income. However, the falling Canadian dollar increases the price of imported goods much of which is not discretionary. Canada imports as much as 80% of its fresh fruit and vegetables  and the CBC reported that   produce prices rose about 10% in 2015 and “and may double inflation in 2016.”  The Globe and Mail estimates that “Consumers will pay as much as $5-billion extra this year in food costs … That will more than eat up the savings from lower gas prices and the federal government’s new middle-class tax cut.”  In other words, neither lower gas prices nor the Liberal government’s proposed tax cuts are large enough to offset the increase in import prices.

c) Exports with the Canadian dollar having lost 25% of its value against the U.S. dollar, it was thought that this would decrease prices and increase Canadian exports. Alas, such optimism depends on a real U.S. recovery. As I recently wrote in the global article article Hitting the Wall in 2016, the American so-called recovery is a myth. Canadian exports rely primarily on U.S. and secondarily on global demand and, in case you haven’t noticed, both the American and global economy are slowing once again. As well, the Globe and Mail reports that “the evolution of Canadian exports, which have increasingly become intermediate supply-chain goods, providing parts and materials for U.S. manufactured products that face their own export dynamics, rather than consumer goods that feel a more immediate impact from currency moves.”  And so, neither the consumer nor Canada’s supply-chain partners are coming to the rescue.

d) Infrastructure Spending – the newly elected Liberal government announced they will save the day with increased infrastructure spending. Done properly, this stimulus might be beneficial, but we’ll have to see how this plays out. After all, Canada’s new dynastic Boy Bungler, Justin Trudeau’s (aka ‘T2’) lightweight chops have already been on display with such air-head pronouncements as “budgets balance themselves.” As well, this Federal stimulus will be largely offset by reduced spending by provincial governments. In addition, the Globe reports that, “Business investment is expected to actually subtract from GDP for the second successive year as the income-starved resource sectors cut spending again.” In other words, infrastructure spending is ‘pushing on a rope’.

e) Mergers & Acquisitions – Equity investors will need to be nimble. Mining Weekly reports “With the downturn in the commodity cycle, advisory firm EY expected merger and acquisition (M&A) activity to pick up in 2016 … It’s likely there will be material ownership changes across the sector in 2016, with new players taking on positions, larger players downsizing portfolios and some businesses not surviving.”  As well, according to Global News   the “low loonie means Canadian companies are ripe for the pickings.” International companies paying in U.S. dollars are buying Canadian companies at a discount because of the currency exchange rate difference. For instance, Lowe’s announced they are acquiring Rona. In fairness, Canadian companies acquired American targets when the loonie sold at a premium such as TD Bank and Royal Bank buying South Financial Group and City National.

g) Canadian Dollar Crash – the ‘safe haven’ status of the U.S. dollar makes the greenback the least ugly horse at the glue factory and, by comparison, the Canadian dollar has been dropping in value accordingly. David Doyle of Macquarie Capital Markets Canada Ltd. in February of LAST year predicted  “the loonie would hit 69 cents US at some point in the next 12 months.”

10yr dollar

It did just that on January 12, 2016. NOW, he’s predicting a 59 cent dollar. Converting the other way, one U.S. dollar would be $1.71 Canadian (and I thought my forecast of 1.55 to 1.60 was nuts!) The price of the imported 80% of Canada’s fruit and vegetables is about to skyrocket and lots of other bad shit we haven’t even contemplated.

“In the past, a cheap dollar was a mixed blessing for the Canadian economy: a boon for exporters, but bad news for importers and Canadians who need to travel or spend money outside the country.

“But the gains to be had from a cheap dollar often take a while to show up. The pain, on the other hand, is almost immediate.” 

“Consumers benefit, a tad, from the drop in energy prices, but are no doubt hurt by the dollar’s slide. And, the blaring headlines about a sub-70 cent dollar are likely to [hit] confidence further.”

f) NHL Woes – seven of the thirty National Hockey League teams are in Canada.  Sports Illustrated wrote that “They take in Canadian dollars but pay out their biggest expenses—salary and travel—in American currency. They have protected themselves to some degree by stockpiling U.S. funds purchased at more favorable rates, but those reserves can only last so long. The next time they load up on American dollars, they’ll feel it.” 

If Macquarie’s loonie prediction (no pun intended) turns out to be correct, expect NHL salary caps and other constraints. Some players packed up and left during previous lockouts so we shouldn’t be surprised if some will seek greener pastures. With the Canadian dollar getting hammered, teams might be happy to see some of them go. However, Canadians love their hockey, so the game will go on.

g) Skills ShortageIt’s difficult to believe, but the Calgary Herald  predicts a continuing skills shortage resulting from job losses oil-patch job losses.“… the mass job cuts could haunt the industry in the long-term, as the industry continues to face a shortage in many skillsets and a sizeable chunk of the workforce is expected to retire over the next decade.

“We are expecting a large skills shortage, because we won’t have the right people at our disposal,” said Emma Monaghan, project manager at PetroLMI. “And the longer term the downturn, the less attractive it will be for people to come back.”

h) Western Separatism – during the depths of recession in the late 80’s and early 90’s there was much talk of western Canadian separation. Given the obvious neglect from Trudeau’s new Liberal government and numerous obstructionist provinces, don’t be surprised if we hear this again.

i) Cheaper Gas; More Driving – Good news: gas prices will continue to decline with the price of oil. As mentioned above, the extra cash in motorists’ pockets does not translate into increased spending, but we are taking advantage of lower gas prices by driving more. I don’t have the numbers for Canada, but the U.S. Department of Transportation confirms it for the U.S.

The bad news is more driving translates into more wear and tear on the roads and, without a commensurate increase in infrastructure spending by cash-strapped governments, our streets, highways and bridges will continue to deteriorate.

Also, this will be exacerbated by volatile weather where wilder temperature swings cause increased freezing and thawing resulting in more potholes. With the wild winter temperature extremes we’ve had, we can expect a bumper crop of potholes this spring.

j) More Electric Cars – the increase in the number of electric cars in the future will put a cap on higher oil prices (sorry Alberta!) Bloomberg reports that “Even amid low gasoline prices last year, electric car sales jumped 60 percent worldwide.” 

k) 2016 Economic Downturnthe OECD slashed  its Canadian and global outlook. “The downgrade in the global outlook since the previous economic outlook in November 2015 is broadly based, spread across both advanced and major emerging economies, with the largest impacts expected in the United States, the euro area and economies reliant on commodity exports, like Brazil and Canada.”

.

In other words, we are overdue for another recession. The next one will be much worse, longer and deeper than the last one. No one knows what’s on the other side, but judging by trajectory alone, it won’t be pretty.

Central banks are out of ammunition.

out of ammo

Credit: the Economist

The fact they’re pondering negative interest rates shows that they’ve lost control.

Both governments and households are over-indebted and in no shape to weather a severe downturn. Here’s how Gary North describes it and what he recommends.

“Joseph told Pharaoh to use income during seven fat years to prepare for seven
lean years. That was good advice.

‘The last recession officially ended seven years ago.

‘Is there going to be a recession soon? Count on it.

‘Will it squeeze your budget? Count on it.

“Before you panic when it hits, cut five items. You would be wise to cut them
now. They are here:  http://www.thesimpledollar.com/monthly-bills-you-could-live-without/

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Conclusion

Anyone who can’t see the world of trouble we’re facing isn’t paying attention. The whole world is in financial and economic difficulty and it’s going to get a lot worse. That so many people continue to ignore what’s right in front of them is a testament to the power of our dangerous Normalcy Bias

Standards of living will decline so now is the time to start living beneath our means while we can still do so voluntarily before circumstances force it on us. Start cutting non-essential expenses now as outlined  by Gary North above. The sooner you start, the sooner you get used to it and the more progress you make.

As mentioned before, it’s time to stop spending money you don’t have to buy shit you don’t need to impress people you don’t like. Economists will say this is bad advice. If everyone stopped spending, economies would grind to a halt. My reply is that economies will grind to a halt regardless and neither you nor I can save them so get yourself out of disaster’s path. My motto is, “if something is about to fall anyway, give it a good push and be done with it.”

Every major global economic zone is hurting. China and Japan, the second and third largest economies in the world have debt-to-GDP ratio close to 300%. Unfunded liabilities push the world’s largest economy, the U.S.A. into uncharted territory. It’s a race to see whether the Euro or the Eurozone falls apart first. The Middle East becomes increasingly unstable. China is not only raising hell in the South China Sea, but they’ve created $1 trillion in new debt in just the first two months of 2016.

Furthermore, central banks are out of ammunition and pushing on a rope. Major countries now have bail-in legislation and banks are preparing for negative interest rates. Other than Russia’s Vladimir Putin, we have no effective leadership. The U.S Congress is worse than useless. President Obama is a lame duck. Canada’s new Prime Minister has the sterling leadership qualities of an elementary school teacher and a snowboard instructor **. No sooner did Canada’s new Finance Minister revise the promised $10 billion budget deficit to $18.4 billion then the Marc Pinsonneault, the National Bank’s chief economist claimed that “Taking into account the weakening economy and a promised stimulus, the report predicts a cumulative deficit of $90 billion over the four-year life of the government.”  I know you’re as surprised as I am that a thieving bankster would advocate more debt-slavery lending borrowing.

With all the conditions outlined above, what could possibly go wrong?

I’m sorry I don’t have better news. The only bright spot; we know the license plate of the truck that’s about to run over us. A fat lot of good that’ll do although, it might make a nice epitaph.

Mixing metaphors; sometimes, those that live in the forest are the last to see the fire until it is about to engulf them. At the very least, you now know there’s a fire. How are you preparing for it?

Remember the mantra:

We cannot borrow our way out of debt.

We cannot spend our way to prosperity.

We cannot pretend our way out of trouble.

Gerold

February 24, 2016

** Not that I have anything against snowboarders (being one myself), but it’s hardly qualification for national leadership.

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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 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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10 Responses to Canada Hits the Wall in 2016 – Part 4: Tourism, Unemployment, US Dollar & Forecast

  1. dc.sunsets says:

    P.S. Before this largest-in-history credit bubble the supply of US-dollar-based wealth was somewhat rational.

    Now that a Bond Ocean has filled with tens or hundreds of trillions of dollars worth of IOU’S it is solely responsible for floating the dollar value of all assets higher while simultaneously representing enormous wealth directly.

    The Bond Ocean’s value rests on nothing but collective confidence in the underlying issuers. Any reduction in that confidence reduces value and raises yields. When the ocean was a small sea, only a little value evaporated per unit rise in rates.

    Now that the Bond Ocean is unimaginably vast and deep, even small changes in yield mean huge losses in capital value.

    There is nowhere for rates to go but up, and for confidence to go but down.

    • gerold says:

      You’re right, dc. The bond/debt/credit bubble is the most gargantuan in history. On one hand, I’m surprised it hasn’t blown up yet. On the other hand, when it does, it’ll be a terrible sight to behold.

      My biggest fear is what our owners will do when it lets go and how much damage they’ll do to us before with ZIRP, NIRP, elimination of cash, bail-ins, pension confiscation and things we haven’t even thought about.

      The whole house of cards is based on CONfidence and no CON game can go on forever especially when it’s all based on the full faith and credit of our so-called elected officials (a thought so scary even Stephen King can’t touch it).

      I hope I’ve died of old age before it hits the fan, but I’m not holding my breath.

      – Gerold

    • Roy says:

      The bond market is ten times the size of the stock market and rests on confidence in the worlds greatest CON game. Confidence is much more important than truth which is why Snowden, Manning and Assange are persecuted and Rubin, Paulson, Greenspan and many others are walking free. Plan B is to crash the Equities markets to try and save the Bond Market. The payout hierarchy in bankruptcy is Lawyers first, various Bond holders second and Equity holders last.

      Obviously the present course is not sustainable and the top X% are not stupid and realizes the end approaches with the depletion of natural resources. Legal Tender Laws allow private Corporations to determine what constitutes “money” and use Governments monopoly on the use of force for enforcement. This explains why 40% of Wall Streets profits are from Financial Service’s which produce nothing. It facilitates what I call trickle up economics.

      Trickle up economics is the transfer of wealth from the bottom to the top. Although not an Economic Theory it is the only one that works. Think of an inverted pyramid with the top X% at the inverted base with wealth flowing up.

      • gerold says:

        Good observations, Roy. Economies can survive equity market crashes, but if the bond market implodes, it’s game over.

        “Trickle-up economics” make a lot more sense than the neo-Keynesian clap-trap they’ve been preaching.

        We’re coming off a 40 year credit binge that massively distorted economies, earnings, wealth, assets, etc. and the resulting hang-over will be painful. I’ve heard (unsubstantiated) that every 100 years or so, wealth returns to its rightful owners. That may be a tautological statement, but it won’t alleviate the pain.

        We cannot stop the inevitable. Best we can do is position ourselves to avoid the worst of it, admittedly easier said than done.

        – Gerold

  2. dc.sunsets says:

    Gerold, beyond Nock’s discussion of the masses vs the Remnant is another consideration.

    I believe there is ample evidence that humans have two distinct pathways of cognition, the rational path (where we differ in IQ) and the impulsive path (where IQ seems immaterial.)

    The impulsive path exists alongside emotions, the sense of self and is where biases, beliefs and premises exist. In neurobiology it’s known that this track has neurons that fire faster and with greater amplitude than those in the seat of analytical reason, the neo-cortex.

    As I see it, most people (regardless of intelligence) make most of their decisions impulsively and then simply engage their higher intellect to rationalize them. This explains why some of the most stupid, contrary to common sense notions are believed by often the smartest people in the room. They have the most aptitude for rationalization, overpowering whatever common sense or experience that falsifies the belief.

    The seat of emotion does not learn. It is the most primitive part of our mind, so whether the rationalization yields indulgence in alcohol or drug abuse, gambling addiction or advocacy for repeatedly destructive public policies, no matter how much personal pain or collective catastrophe follows, the person rationalizes the same biases & beliefs time after time.

    I argue that in ourselves there is no way to be certain our reason, logic and rational mind is steering vs when our impulsive mind has reached over and is directing our actions. We can only infer when impulse is running things by experiencing repeated failure & pain.

    Few, very few people seem capable of seeing this dichotomy & taking steps to be vigilant and slap the impulsive mind’s hand away from the wheel.

    This is why no one learns. This is why our modern mind-control advertising effectively bypasses our reason and directly manipulates people at their impulsive mind. This is why people clearly herd.

    It is why I believe the future is already cast, come what may. A few people may be able to ignore some of the input from their impulsive mind and steer a relatively safer course in life, but the masses are doomed to be pinballs in the arcade game of life.

    • gerold says:

      Excellent observations, dc! I especially love your line, “the masses are doomed to be pinballs in the arcade game of life.”

      Yes, we are governed by the emotional reptilian brain and, yes most of us put our brains into gear only to rationalize actions initiated by our emotions (one gender likely more than others, but that’s another discussion).

      For countless millennia, deluded naturalists and philosophers offered numerous attributes that supposedly demonstrated mankind’s superiority over the rest of the animal kingdom. One by one, characteristics such as opposable thumbs, tool use, complex societies, cooperation, language, etc. have all been found in the animal kingdom. There is only one attribute that separates us from other animals and few are willing to admit it; self-delusion. A monkey might try to fool another monkey, but no monkey will fool itself. Only humans do that.

      I wasn’t aware that emotional “neurons that fire faster and with greater amplitude than those in the seat of analytical reason, the neo-cortex.” But, it stands to reason that given their location (and survival value) they have shorter distances to travel.

      Fortunately, there are glimmers of hope.

      1) Knowing this, we can be on guard when dealing with our own decisions and other people.
      2) Self-awareness is a powerful albeit humbling tool. I’ve known people who completely lack self-awareness. They’re toxic.
      3) Intuition is rarely wrong unless we ignore it when it’s quietly screaming in the background.

      Then again, I might be self-deluded … 🙂

      – Gerold

      • Roy says:

        The Laws of Nature are immutable and cannot be repealed, amended, interpreted, selectively enforced, ignored or violated. The Laws of Nature applicable to all life are 1. survival 2. propagation. Survival among humans has been distorted by Religion mainly by the concept of an afterlife. The Ontological claim people commit suicide because life is so unbearable suicide is the easier way out. Belief in an afterlife is the reason for combat, suicide bombers etc. because they believe in a better afterlife.

        The requirements for survival are water, food and protection from the elements and predators. Protection from the elements varies by location. The most difficult protection is from the greatest predator, Government. The only necessities are sustainable water, food and shelter, all else are luxuries.

        The depletion of natural resources will prove Darwin and Malthus right. There will be a breakdown of society along tribal or kinship lines. I see three possible end results.
        1. Feudalism with the top X% running Planation like operations.
        2. Small communities such as the Mennonites/Amish or early colonies. We shall return to the “Those who don’t work don’t eat”
        3. Extinction due to radiation

        • gerold says:

          Careful, Roy! Don’t get me started on religion. If you haven’t, you might want to read what I wrote about “Our Insane Judeo-Christian Slave Morality” https://geroldblog.com/2014/06/07/our-insane-judeo-christian-slave-morality/
          as it explains much.

          As to the afterlife, if there is such a thing, we may be in it already and not know it. See “The Perfect Hell” https://geroldblog.com/2011/08/15/the-perfect-hell/

          Don’t get me started on government either. Yes, it is the epitome of evil which is why “I Am an Anarchist” https://geroldblog.com/2011/10/10/1601/

          Dammit, after writing over 280 articles, I’m becoming self-referential. I wonder if that’s listed in the Psychiatric Diagnostic Manual? On the other hand, if the world is insane, can I be?

          As to your three possible end results I’m not sure #1 and #2 are mutually exclusive. As for #3, Fukushima probably won’t kill us by itself although it will continue contaminating the Pacific forever. Of greater concern is a major solar flare like the Carrington Event of 1859 that would disable the cooling systems of 100’s of nuclear power plants world-wide. THAT would be an extinction event.

          I think I’ll crack that bottle of scotch I’ve been saving …

          – Gerold

  3. Roy says:

    A Medical Doctor looks his patients in the eye and says “You are going to die.” Truer words have never been spoken but how many patients will get another MD? This is an extreme example of people not wanting to hear the truth if it conflicts with their preconceived conceptions.

    In the early 1960’s I was working R&D on Electronic Warfare and Electronic Counter-Counter Measures. We had a test site with different RADAR’s spared out over several acres. Computers were in their infancy. At a FUB (Facilities Utilization Board) two items were presented, one was to provide air-conditioning for the computers which passed without comment. The other item was to provide toilets and water coolers at the various RADARs. Everyone on the Board had comments since they all knew much more about shithouses and water coolers than computers.

    The above is an example of Parkinson’s “Law of Triviality” which states, “The time spent on any item of the agenda will be in inverse proportion to the sum involved.” I would define sum as including knowledge.

    The reason you get so few comments is because you are casting pearls before swine. If you want comments you have to post Facebook type things that don’t require numeracy, logic or critical thinking only opinion such as who are your favorite drug addicts seeing how much noise they can make and calling it music, your favorite recopies for preparing road kill or how will the Stanly Cup playoffs transpire. I have noticed an infestation of selfies and pedantic posters. People love to talk about themselves while ignoring uncomfortable reality.

    Get your self a big glass of Crown Royal and read http://www.remnantnewspaper.com/isaiah_prt.htm

    • gerold says:

      Thank you very much, Roy for your eye-opening comments.

      You say, “The reason you get so few comments is because you are casting pearls before swine. If you want comments you have to post Facebook type things that don’t require numeracy, logic or critical thinking…” How right you are!

      As you noticed, I’m not interested in lots of comments or Google ranking. Apparently, there are Search Engine Optimization (SEO) techniques to manipulate a higher Google rank. A few years ago I was approached by Google for a pilot project. I assume they wanted a cut of the proceeds for their assistance, but we never got down to that level of detail. When I realized I had to “dumb down” to reach a mass audience, I backed away from it. I don’t do dumb.

      Thanks for the very interesting link to the article on the “Remnant”. It gives me strength and hope. I also looked up ‘The Foundation For Economic Education’ that carried that article and added FEE it to my reading list.

      The Remnant is similar to the Pareto Principle (the 80/20 rule). I’d guess it’s probably more like 99/1, but then Isaiah underestimated the number so it’s likely (hopefully?) I do too.

      One of the things I learned researching my article on “How to Identify Incompetent People” https://geroldblog.com/2014/10/12/how-to-identify-incompetent-people/ is that incompetence is not the same as stupidity, but there are some similarities. Stupid people don’t realize they’re stupid because, well you guessed it; they’re stupid. They don’t recognize intelligence. They only recognize stupidity greater than their own. When a stupid person hears two intelligent people talking, it sounds like magic (at best) or insanity (at worst), but it’s certainly not intelligible to them.

      Albert J. Nock writes “The Remnant are those who by force of intellect are able to apprehend these principles, and by force of character are able, at least measurably, to cleave to them.” Absolutely true! It takes more than intelligence. Character which is often painfully acquired is also necessary.

      One of the things I’ve learned is to say (or write) my piece and leave it at that. People will argue or resist, but if I say any more it only hardens their resistance. I’m always amazed when, sometime later, that person tells me what I told them and it’s all I can do to avoid saying, “I told you that”. Instead, I thank them for sharing that knowledge.

      Another interesting things I learned in studying mental biases is we remember the message but not the messenger. We remember how to tie our shoe laces, but we likely don’t remember who taught us to do so.

      I’m ok with that. I’m not in it for the glory. I’m quite content to infect people’s minds with useful knowledge. Nor am I in it for the money that a mass audience would provide with advertising revenue. In fact, I pay my blog host (WordPress) $100 a year NOT to advertise on my blog. I hate ads and find them distracting. I once used an ever-changing screen saver on my computer monitor at the office, but I found that even intelligent people who met with me were constantly distracted by it.

      Part of the reason I see what I do is throwing away my TV in 1988 and getting a life. It didn’t take long to feel like a stranger in a strange land. I learned that there are two kinds of people; those who do and those who watch. People learn nothing by watching other people doing. It’s only by doing, falling down, scraping shins, dirt under fingernails … that we truly learn. And, oh the things I’ve learned!

      There’s another two kinds of people; the givers and the takers. I’m still trying to figure out how that fits into the scheme of things.

      – Gerold

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