Sliding toward Deflation

Think of the world as an engine designed and built to run in a certain way, and at a certain speed. The fuel of the engine is growth.  The chemistry of the fuel is debt. Then imagine one half of the world (the developed countries) running at full speed for 60 years, while the other half of the world (Asia, Africa, and South America) idling. Because our half of the world has been running full speed, we have used the most debt to power our engines, and the world economy has built itself around that fact. Now imagine that so much debt has been used to fuel the engine that it is almost depleted. Meanwhile the other half of the world is just warming up its engine and has plenty of potential debt to consume. What is the logical consequence? One falls while the other soars.

Now superimpose the unfolding China/Russia/BRIC economic order that is forming to reflect that reality. Let's call it the "New Club". Roughly designed to resemble the Soviet days of trading between countries to the exclusion of others, the New Club is rapidly building a new engine. One that attempts to capitalize on each countries strengths and satisfying each countries needs. If that sounds familiar consider Karl Marx's famous borrowed slogan " From each according to his ability, to each according to his need". Essentially, this is the new slogan of the New Club. China has the currency and the manpower. Russia has the natural resources, technology, and the know how. India has the population and science. South America has specific resources. Africa has population and need.

Together, these countries are forming a new world order. They have combined resources to create a new IMF that will compete with the old western IMF to loan money to areas like Africa and South America. They will control the debt that fires those engines. Russia, China and India (almost 50% of the world population) have entered into formal agreements to use their own currencies to pay for resources from each other. They are excluding the US dollar from their market place as an economic foundation. Making it obsolete. They are reaching deeply into Africa in fierce competition with the US to develop that continent as a place to do business. They are quickly becoming the savior for many South American countries who have tapped out their debt in the Old Club and need a rescue line.

Of course, when one grows the other dies, and the other would be the western world, or the "Old Club". Our ability to consume and pay debt has over reached its maximum. That is reflected in the over valued prices we pay for everything compared to what would be paid for the same object in the Club. In some European countries that has led to such things as inter-generational mortgages on homes. In the US it led to the "housing bubble" in 2008. The price we pay for fuel, compared to the actual price per barrel on the international market, is a good indicator of how skewed the economic reality is. While world oil prices plummet, prices at the pump don't. They stay artificially high. The same can be said for the stock markets. They are valued at more than their 2008 pre-crash worth, despite the indebtedness/under-performance of the corporations listed on them. In other words, there is a space between where they should be at in pure economic terms, and where they exist today. An artificial bubble. An artificial economy. Prices inflated to try and maintain our way of life, our government coffers, and our debt.

While there was only one game in town, that game of artificial economy could be maintained to one degree or another. There would be cyclical recessions to try and balance debt vs income vs prices from time to time, but the system could carry on. But, more dollars printed to maintain that growth created inflation in prices.Our system continued to grow fed on inflation rather than real economic wealth. We created a society based on the artificial. Now we are facing a New Club that, for the most part, will not. As the two realities start to compete the Old Club will lose market share for its products, and a glut will create deflation. 

As sales slide, and corporations within the Old Club try to adjust their production downward, each country's GDP begins to shrink - in other words deflate. That leads to serious consequences for an economic order built on growth fueled by debt. A good current example of this is Germany's recent slide. Germany is the economic engine of Europe, and as its GDP continues to fall so do the hopes of the rest of the continent. Another good example is long term bond costs. Muskrat Falls financing was secured for 50 years at less then 3% interest. Indicative that the banks understand what is coming. What else can explain that length of commitment for such a small return on investment. Perhaps one of the most clear examples of things to come is the Brazilian company Rio Tinto. While North American iron ore mines close, scale back or simply don't develop, Rio Tinto is increasing production by 25%. All these corporations compete on the international market, yet they have two starkly different approaches. Perhaps the key to understanding  this is one corporation is in a BRIC country, and a strong m,ember of the new club, while the others are stuck in the old. 

There are signs all around us if we choose to really see them. The world is changing - for the better for some, and the opposite for others. Reality, or deflation as a measure of it, is coming sooner rather than later. There is really no way for governments to prepare for it financially. Instead, and perhaps a very real indication of intent, police forces through out the western world have been armed like military organizations. Like the banks, our governments see the inevitable deflation of our economies, and understand the social chaos that must follow. At that point order will take precedence over rights. It will be a new world for the Old Club.   

 

Lest We Forget

Lest we forget. That is the motto of the last two world wars. The question could be : "Lest we forget what?" Is it the men and women who died, were wounded and forever scarred by war that we are meant not to forget? Not likely, in the sense that we never knew them. Some of us had loved ones in the war, in my case a father, but I would never forget him in any case. Is it the mass destruction, the slaughter of civilians, the absolute firepower that these armies unleashed that we are meant to forget? I would argue it's all of these things, summed up in one word - sacrifice.

But, what was that sacrifice for? In different countries there were as many different reasons. For the Russians it was the "Great Patriotic War". For the British Empire it was "Empire War", and for the Americans it was the "Mess with us and die War". In the sixty odd years since the last world war we commonly see that struggle as the "War for Freedom". Freedom meaning our society would never become a police state as was the case with Nazi Germany. Personal freedom, democracy, and the rule of law would guide our nation. We prided ourselves on this, and the average person on the streets never questions it should be any other way.

Then, in a murderous, chaotic moment at the National War Monument, and then Parliament Hill, all that came into question. Or did it? As a young Corporal lay dying near the tomb of the Unknown Soldier, and as the young attacker who caused his death died in a hail of bullets in the Hall of Honour, national media were already saying "This changes Canada forever". If that sounds familiar it's likely your mind wondering back to the events of "911" and the rhetoric that came afterward from the politicians: the world is changed; America has changed; the Patriot Act; Guantanamo; wars in Iraq and Afghanistan; making the world safe for democracy; you are with us or against us. Yes, the ghosts of 911 immediately sprang to life in the Canadian national media.

But, is that really true? Perhaps I missed it? At what point did the Canadian people agree to abandon their freedom for "security"? Did we agree to forfeit our freedom that was guaranteed by the deaths of over 100,000 Canadians in two world wars over the deaths of two soldiers at the hands of two now dead ISIS sympathizers? Is our freedom, our way of life really that weak? Are we that insecure? Are we prepared to capitulate and surrender the gift of freedom, earned by the blood of our ancestors on foreign battle fields, so that we may know what it is to not live in a police state?

After the attack in Ottawa by a lone gunman the military was ordered not to wear their uniforms anywhere in the country while off base. Then, a day later, the decision was overturned. It was an immediate surrender of pride, freedom, and honour by politicians in a panic. An over reaction. What the might of Nazi Germany could not do, one lone gunman achieved - if only briefly. The national media, particularly the state-owned CBC, immediately began the call for restricting our freedom to our Parliament and greater state intrusions into our personal lives. All in the name of security. All in the name of the "greater good". Just like 911. Hopefully, that will face the same fate as the order not to wear uniforms.

The bigger lesson in all of this is just how ready "the powers to be" are to sacrifice our rights in the name of security. It was almost like they were looking for an excuse to do that, and once presented, they quickly grasped it. However, they ignore one very crucial thing. The blood of 100,000 dead earned us the right to keep that freedom. The hundreds of thousands of men and women wounded and altered by their war experience for life earned us that right. Rights that are guaranteed by our Constitution now. Freedom that is not subject to political whims or expediency. Freedom that is eternal as the flame that burns on Parliament Hill. It is paid for in full. It makes us who we are. Without it we are nothing.

The lesson for people like ISIS is that Canada can be rocked by the death of two soldiers at home. That the collective Canadian psyche is so weak that a lone gunman can bring it down by one moment of madness. Far from deterring another attack by the likes of ISIS, Canada's response must be mightily encouraging to them. Therein lies the danger. We are showing weakness. After all, ISIS doesn't care about our societal values. It cares about our personal values. It cares that we insist on freedom and equality for women, as an example. There are many others. The point is, they want to change us more than change our government. If we allow this attack to in any way alter us then they have won. When we should be giving a Churchill-like "some chicken, some neck", we instead give a Chamberlain-like "peace in our time".

Appeasing, even rewarding people like ISIS with the degradation of our freedom speaks more about us than them. It says we are weak, scared, and without courage of conviction. It says we do not find strength in the fields of Canadian crosses oversees, but rather we scurry to whatever system that will allow us to freely shop at Walmart. It says our society, and our belief system, is based on convenience rather than principle. Perhaps people like ISIS already suspect this about us. Perhaps it's even true. But, it doesn't have to be. We don't have to stand on a cold highway, and awkwardly (even bizarrely)  sing O Canada and clap as if we were at a hockey game as a lone hearse carries a dead soldier to a funeral home. Perhaps we could stand in steely silence, honour the man's sacrifice, and swear to ourselves and him that we won't trade off the freedom given by the men and women whose monument he had guarded. That would be the ultimate statement. The strength of our character and values was tested in two world wars. We prevailed. That mantle was given to us. Lest we forget.

Newfoundland and Labrador's Revolution

This piece is my opinion, but may be shared by many.

It's been four and a half years since I returned to my ancestral home in Newfoundland and Labrador. A stranger in a strange land to be sure. The haunting, almost pre-historic beauty of the land and sea spoke directly to my soul: "this is where you're meant to be-this is home". However, as I was to find out, not all was well in Newfoundland and Labrador.

Awash in oil revenue, the likes of which it had never seen, and led by a "messiah"-like figure in Danny Williams, the Province was in  full blown party mode. Drunk on promises of never ending fortune and neo-nationalist calls by Williams to be "Masters in our own House" people were unwilling or unable to see, or didn't want to hear, that Williams was leading them into financial ruin. For those that don't know, this place has always looked to a "strong man" for leadership - likely dating to its Irish roots. Williams fit the bill. Local son done well, with gold in his pocket and a silver tongue firmly placed in cheek. "Danny" could do no wrong.

Williams cherished the role. Known for having an ego a mile wide and a mile long, Williams stoked the people's passion for a better place. A place where they were in absolute control of their destiny. The oil revenues that never existed before 2003 became 33% of a provincial budget suddenly and massively expanded. The economy roared to life and Newfoundlanders and Labradorians jumped on for the ride. New homes sprang up like grass in the spring. Every imaginable man-toy you can imagine popped up in every yard and driveway through the land. Businesses became enriched by government and personal debt-driven spending, and as long as that money kept coming from the provincial government the party would go on.

Unfortunately, Newfoundland and Labrador had never experienced a boom, and therefore never experienced a bust. It's the inevitable result of a resource dependent economy that exports to far away lands. Like any business, the far away lands are the customers, and when things go bad for the customers things also go bad for the suppliers - us. That was already happening back in 2010 when I first came home. China and Russia were pushing for a new world currency at the Davos International Forum on economy. They were already engaged in a financial, low-grade economic war with the US. Along with them were the BRIC countries - most notably India, Iran and Brazil. Also back in 2010 the US was massively expanding fracking to release natural gas and oil reserves which would put them in a position of energy independence. All these major, and very obvious foreign forces were already at play then, the result of which is starting to be seriously felt now. Yet, nobody in the government of Newfoundland and Labrador twigged on?

Despite all the external factors, Williams continued to sell people that somehow this Province could be "Masters of our own House". He knew better. In the world of global economies, no country is a master of itself. Not the United States, not Europe, not Asia - nobody. Williams knew this all too well being a businessman with international holdings. Yet, like the Pied Piper of Newfoundland, he led the people in a trance down a very murky road. One that was to his liking and his benefit.

He bragged of the investments in healthcare, but chose to have his heart-saving surgery done in the US. He railed against giveaways of provincial resources, but happily bought Crown Land (enough to build a small city) at a well under man-dated price of just over $300 an acre. He sold his offshore oil service companies to Quebec firm SNC Lavalin while they did work for the government on the Lower Churchill development - despite chastising the previous Liberal government for conflicts of interest. He appointed his former employees, supporters and friends to places throughout the hierarchy of the government, despite lambasting the Liberals for doing the same. In short, Williams behaved as Premier as if the rules of modern politics and economy did not apply to him. Unfortunately, it was ours, not his, money and destiny at stake. That was apparently lost on him.

And if you dared to stand up against him, well, there was a special place in hell for you. The best way I can describe this treatment for dissenters of Williams' will are the words now Finance Minister Ross Wiseman's Executive Assistant, Chick Cholock, leveled at me, in my home, and in front of my wife, with the kids playing upstairs. I had announced that I was considering running for the leadership of the Party, suddenly available after Williams' quick exit. The words were this:

" If you try and run for the leadership we will destroy you. We will destroy you financially. We will destroy you personally. We will destroy your name."

Then, just as he left my home, he turned at the door, and said:

" I am with the backroom, and we hope you make the right decision."

It's a personal story for me, but it's useful. In the Williams' era to dissent or deviate from the "backroom" was to invite ruin upon yourself any your family. Newfoundlanders of course already knew this. The idea that opposing meant losing everything did not appeal to many. In the nut shell, this was how Williams enforced his will. Reward is great, but so is punishment.

Four years later things have changed. The people are changing. Their expectations are changing. They are seeking answers to the questions that are now becoming obvious to them. Why are the roads still so bad after $16 billion in oil revenue has come into the coffers? Why are people still leaving? Why are the much vaulted iron ore projects in Labrador evaporating? Why are civil service jobs being cut? Is Muskrat Falls really the project we've been sold? What will happen to us as oil prices continue to fall? Why can't I sell my home?

Williams and, most recently new premier Paul Davis, continue to try and suppress dissent by filing lawsuits like confetti at dissenters. A desperate bid to keep control in a place spinning out of their control. Dissent is now loud. Dissent is unstoppable. Not just for the government in place now, but for the one to come next year. The political culture in Newfoundland and Labrador has under gone a massive and sudden change brought about by a sense of betrayal. A realization that somehow the all knowing Williams has lead them afar. Reality is crushing fantasy, and people are beginning to realize the cost to them personally may well be enormous. A moment in history, of a place 500 years old, has been squandered. That one of their own, a man they trusted and revered, may have betrayed them. Danny Williams often referred to people who refused to see the value of his actions as "traitors". Now, the same words may well be used against him. Such is the Newfoundland and Labrador revolution well under way.  

The Ukraine Rope a Dope

The situation is turning from bad to worse in Ukraine for that country's government. Its policy of flashy pincer movements to try and capture high profile objectives for media consumption has come to its natural conclusion - utter failure. As I wrote one month ago - The Mouse Trap - NAF forces were sucking the Ukraine army east to lure them into battle within the strategically convenient, and plausibly deniable, Russian guns. Since that time Ukraine has lost most of its operational air force to missiles, and has seen entire brigades of men wiped out along salients located near the Russian border.

Rather than recognize what should have been the obvious, the Ukraine government continued with the policy of "not giving one inch" and remained in place, trying all the time to crush the will to defend by massive artillery strikes on cities. However, just like Hitler did to his Generals, notably the 6th in Stalingrad, the Ukraine government refused to give ground to a more favorable position. The result of that somewhat reckless decision is now the same result Hitler found - encircled forces. At the time of this post there are 9 encircled formations of Ukraine troops with an estimated total strength of 20,000. For an army the size of Ukraine's, this number represents a decisive loss. What makes matters worse is the knowledge that the units now trapped, and the ones trapped prior to this and already eliminated, represent the entire core of Ukraine's professional army.

The situation in north and central Luhansk is essentially a standoff, with neither side making any bold moves at this point. It has become a static front. The same applies to the west of Donetsk city. Ukraine continues to try and make fruitless attempts to cut off Gorlovka, north of Donetsk, from the rear. The result has been mixed, and has resulted in high casualties with no tangible reward. It is to the south of both Donetsk and Luhansk oblasts (provinces), lined by the Russian border, where Ukraine has suffered the most dramatic and catastrophic losses - in men and position. It began with several Ukraine brigades being trapped in the "South Pocket" along the Russian border, and ended with approximately 1500 soldiers being released back to Ukraine with 10,000 missing. It also resulted in the capture of large amounts of Ukraine tanks, and more importantly artillery. With the essential destruction of the Ukraine air force, artillery on both sides has become the tool for battlefield dominance.

That brings us to today, and tomorrow. Having tied up a large percentage of Ukraine troops at the north and central fronts, and with Ukraine thus far refusing to withdraw to positions more defensible with fewer troops, the NAF has moved in the South. Essentially, the move came from near the Russian border two days ago, including an amphibious landing just east of Mariupol on Ukraine's south coast. Simultaneously, NAF units in Donetsk city counterattacked toward the South. The resulting squeeze caused a large Ukraine retreat, but not before two more large pockets of trapped troops were created. At the time of this post Mariupol is surrounded on two sides, with the western resupply/escape route being rapidly closed. NAF units are fanning along the north of Mariupol in an attempt to block Ukraine units from moving south to intercept advancing NAF forces. The goal appears to be the City of Melitopol. From there the NAF have quick access to the Crimean border (Russia) and the Dnieper River cities to the north.

I call this the "Left Hook". Basically a very large flanking maneuver. Having sustained all the blows the Ukraine army could throw at it, the NAF is now countering an exhausted foe - hence the title "Rope a Dope". With Ukraine's entire rear exposed, including all the way to the capital Kiev, it will have no choice but to rapidly withdraw West, and re-position forces to its southern rear. That opens the door for the NAF to easily move West, and that is where the next move comes - the "right uppercut" if you will. The NAF will then be in position to move on Kharkiv city, and the oblast in general - in the North. It will be free to advance in the centre and bypass (if still heavily defended) or capture Slavyansk and area moving directly to the City of Dnepropetrovsk on the Dnieper River - which is to become the new westerly border of a new Novorossyia (New Russia).

The last front to be explained is the Kherson/Odessa areas. Once the NAF capture and secure Melitopol, the Ukraine defences along the Crimea border are exposed from the rear. At that time the separatist region of Moldova, Transnistria, which houses Russian and "Transnistria Self-Defence Forces", is likely to strike southward toward Odessa.

All these moves combined mean a few things. Firstly, it appears that although there are peace or cease fire talks ongoing, they are likely for show at best. Secondly it means that Ukraine will cease to function as a country. Its already desperate financial position will be crippled by the loss of one half of the country - the most resource rich part. Thirdly it means that Ukraine will become landlocked and essentially a new "pocket - like" area. If NATO were to move into this area, they would be surrounded on three sides by Russia, Novorossyia, and Belarus. It would be indefensible. Therefore, Ukraine, or what's left of it, turns into an economically barren no mans land between East and West.

In any case, the "Mouse Trap" is done, the "Rope a Dope" is done, and now it's time for the "Left-Right" combination punches. I understand Putin is a judo champ, and he may have a judo analogy for this, but for now this is mine.

The Ukrainian Genocide.

This woman's eyes have haunted me since 4:00 p.m. Ukraine time, June 2, 2014. Her name was Inna Kukuruza. She was a wife, a mother, and a citizen of Luhansk city. On that day, June 2, 2014, she made a fatal mistake walking past the City's Administration building after work. She, and many others, had her life ended in a hail of unguided rockets fired by a lone Ukraine air force jet. However, unlike the rest of those dead around her, she did not die immediately. She lay there for seconds, all filmed by the ever present phone cameras, and asked to speak with her daughter. Then she died. What the picture above doesn't show is her mangled legs, or her missing foot. She bled to death. My heart broke for her at that moment.

It was just the beginning of a campaign by the Ukraine military, and its paramilitary forces known as "National Guards", of killing civilians throughout the Ukraine provinces (known as Oblasts) of Donetsk and Luhansk. A slaughter that Europe has not seen since the civil war in the former Yugoslavia. Yet, through all the fog of war, a clear pattern has emerged. The Ukraine army approaches a "rebel" (NAF) area, normally a community. They establish fire bases around it, with varying types of artillery, and then they start shelling. It was the same in Slavyansk, Kramatorsk, Gorlovka, Donetsk, Luhansk, and every other community in the two break away provinces.

First the infrastructure is targeted. Specifically, the electrical power stations. Once these facilities are knocked out, and no power flows: sewage systems shut down; water systems shut down;  hospitals can't operate well; commerce can't function; and on and on it goes. The clear and obvious strategy is to place the citizens of the community in misery. To turn them against the NAF in a psychological warfare conducted with artillery. Of course, the artillery and its ferocity, terrifies the people all on its own.

Second, health and transportation are targeted. Bus stations and train stations are hit. Hospitals of all types are hit. Even schools are hit. The pattern repeats itself in every community the Ukraine army assaults. There is no mistake. At this point the citizens are not just terrified, but also trapped. They can't leave the chaos. They are corralled in a hell no civilian should have to suffer.

Then, the civilians themselves are targeted. Specifically, their homes, apartments, shops, and city centres. The victims have ranged from the very elderly, and in some cases mental patients, to the youngest children and everyone in between. The shells and rockets don't have a conscience - the people that fire them are meant to.

Slavyansk became the model for all Ukraine army operations since. Surround the community. Do not allow escape. And fire. Small caliber mortar fire was the start. There were many reports of it on social media, but the "main stream media" refused to report it, or its damage. As if encouraged by that, the Ukraine army brought in larger mortars, then field artillery. They got away with all that too, despite pictures of the destruction and the civilian victims flooding social media. There was no outrage, or reporting in the main media. The NAF refused to budge, so the Ukraine army brought in even bigger guns - self-propelled 152mm guns. Monsters of artillery, these weapons created massive, indiscriminate damage and casualties. Not completely satisfied with this level of destruction, the Ukraine army started using air burst white phosphorous shells at communities on the outskirts of Slavyansk, and then Slavyansk itself. The Russian government drew the line there and raised concerns about it at the UN. It was dismissed, and the  Ukraine army carried on.

Then came the battles around Donetsk city, Gorloka and Luhansk city. A whole new form of artillery was deployed - Multiple Launch Rocket Systems (MLRS). At the low end of these systems is the GRAD, and on the high end the "Tornado", "Hurricane, and "Smerch". They can fire up to 40 high explosive rockets at a time. They were designed by the Soviets to break up tank formation and create chaos. They are lethal and can level entire complete grid squares when deployed enmasse. They are also unguided. The use of MLRS took the ferocity of the conflict to an all new level, and with it a rapidly increasing civilian death and wounded toll. Pictures of grandmothers , fathers, children, and even priests - with their bodies torn to pieces - began flooding the social media. So grotesque were the results that You Tube began taking films of the victims off their site.

As if this wasn't a great enough outrage, the Ukraine army upped the ante one more time. On July 29, 2014 the Ukraine army fired four, of a reported five available, SS-21 ballistic missiles at the NAF held community of  Snezhnoe. The missiles are massive, and carry a warhead of up to 1000 lbs. They can be used to deliver nuclear weapons. In this case they carried high explosive warheads. These were designed as, and remain, weapons of mass destruction. Even the US government admitted the missiles were fired - yet they did not cause any damage. The reason? Russian S-300, S-400 anti-missile/air units on the Russian border shot them down before they impacted Snezhnoe. If the Russians had not intervened, the loss of life would have been in the thousands. It is here that apparently the US and West were prepared to draw the line on the Ukraine army. There was no condemnation by the West, but there was also no condemnation of Russia for shooting them down.

The death toll so far in the Ukraine war against the Donbass Region (Luhansk and Donetsk) was estimated to be around 10,000. The wounded many more times that. Over 250,000 refugees have fled - mostly to temporary camps lining the Russian side of the border. Those that remain are suffering constant shelling. Constant terror. But, that's the point of it - right? The Ukraine government always refers to the NAF as "terrorists", yet the only side terrorizing its citizenship seems to be the Ukraine government itself. The Geneva Convention is supposed to protect civilians and civilian institutions at a time of war, however the lawyers in the crowd claim this isn't a war. It's war-light. It's an internal insurrection. Although the Ukraine government itself has accused Russia of invading it at the UN Security Council. It would seem, therefore, that the Ukraine government considers itself in a state of war. In that case, the rules of war as outlined in the Geneva Convention should apply to them.

If, for whatever reason, the lawyers succeed and the Ukraine government is not restrained by the Geneva Convention, then there is always the International Court of the Hague. It clearly details that attacks made against civilian populations, or terrorizing civilian populations, or forcefully moving populations is a crime against humanity. There can be no doubt in any right thinking person's mind that what Ukraine has committed against the Donbass is a crime against humanity. Inna Kukuruza was a member of humanity. She did not deserve to die in that blood soaked street in Luhansk city. There was no need. She did no wrong. Her only crime was to be a citizen of a break away region of Ukraine. As far as I'm concerned, Ukraine will never be able to whipe that spot of her blood off their hands. Her final appeal to speak to her daughter, her eyes betraying her terror, the helplessness, will never leave me.

The World at Undeclared War

"Between the idea And the reality Between the motion And the Fact falls the shadow." 
Eliot 'The Hollow Men'

Such is the world we live in today. To even the casual observer, our world is torn by strife, hatred and malice. Wars are erupting in every corner of the globe as if some great match had lit the place on fire. Seemingly disconnected, seemingly indirect, they are erupting everywhere around us. But, is it happenstance,  or is an undeclared world war?

The one thing most people will agree on is "money turns the world". It always has and it always will. The chase for resources. The right to consume them above others. Also known as greed - one of the deadly sins. In a previous posting, I detailed the economic transformation happening to the world as this is written - The Great Uncoupling . Essentially, it described the economic uncoupling of the current "New World Order" into a bipolar economic world: North America and Western Europe vs Russia, China and the BRICs. Since that time it is coming together:

The economic realignment isn't a coincidence, but rather the culmination of decades of work by Russia and China to defeat the West economically. Apparently, they feel satisfied enough at this time to proceed formally, and they are. They have even gone so far as creating  their own IMF. India has just torpedoed a $1 trillion dollar treaty with the IMF. Argentina has just defaulted on its debt. And this was just this week. What all this amounts to is a revolution of sorts. The revolution being a complete undermining of the Western dominated financial system to a system based on Eurasian control. Included in this push, of course, is excluding the US dollar as a currency to purchase Eurasian or even BRICs supply contracts or orders. 

The next step, in such a financial war would be China exiting from its close relationship with US debt and dollars. It seems logical that once the new Eurasian financial system is on solid footing, that China would drop its US debt holdings and its massive reserve of US dollars. A final coup de gras (death blow) if you will. US economists already call the possibility of China selling off its massive holdings in US debt as the "Chinese Nuke". The consequences of such actions by the Eurasians would be catastrophic for economies in the Western world, and will lead to massive unrest. 

Some say that China would never do this, because it would be devastating for their economy as well. However, therein lies the lessons of history that people seem not to learn - even very recent ones. After the 2008 financial collapse China sent about 250 million people back to their villages around the time of the Chinese New Year - and left them there. They were instantly unemployed. There was no revolution. No chaos. Nothing. If a similar thing were to happen in the Western world, unrest would be a mild way to put it. It's all about expectations - the Chinese have few - the West has many.

That brings me back to the world in conflict today. The US and the West now knows it is in a financial war it cannot win. It risks losing the world dominance its dollar gives it, and its military defends. With the financial war gone, and unless it is willing to accept a "Brand New World Order", the only choice it has is to use its military strength - and that appears to be happening. The only problem with using direct military power is the Russians and Chinese have it to, and that would be "mutually assured destruction".  Instead, the West appears to have adopted a shadow war approach aimed at destabilizing both Russia and China. 

With China there are tensions with Japan, and some other Asian countries over the South China Sea. The US has shifted its military forces world-wide to the Asian theater . However, based on current events, it seems the West is targeting Russia first. The Western backed over throw of Ukraine's President resulted in a direct provocation to Russia - as t knew it would. Rather than react formally with an overt invasion, Putin has chosen to fight a shadow war back. He has in fact lured the primary forces of Ukraine into the east and south east of Ukraine, which allows him to: quickly resupply rebels; provide air superiority when and if necessary; provide artillery interdiction when necessary; and essentially corral the Ukraine army into an area that, if he chose, he could destroy quickly from Russia and take all of Ukraine within a week. I detailed it here The Mouse Trap. Action. Reaction.

This week tensions grew on Russia's southern border between Armenia (where Russia has a base) and Azerbaijan, resulting in open battle . Not to be out done, this week a relatively unknown group popped its head up wanting Siberian independence . Then of course there is the conflict in Transnistria. Transnistria is a separatist region of Moldova that essentially is almost an independent (albeit tiny) state now. It also has a Russian base, and strategic ammunition facility there. Among Russian commentators, most expect this area to be the next flame fanned by Western powers. In broad strokes, these conflicts around all of Russia's borders have one thing in common - they are flames being fanned by Western resources to destabilize Russia -that's my take on it. 

Then, of course, there is the "imperial" interest score card. Iraq has become essentially another proxy battleground mixing strange bed fellows with religion. The ISIS (Sunni) forces have fanned out from Northern Syria (an ally of Russia) into Iraq (a Shia ally of both Iran and Russia). Iran (an ally of Russia) has intervened to keep the Shia-dominated government of Iraq in control of the country. Saudi Arabia (a US ally) has funded the ISIS forces to first overthrow Syria and now Iraq. In fact, Saudi Arabia has even moved 30,000 troops to Iraq's border. The US could have ended this crisis quickly by providing air support to Iraq, but it refused. ISIS was then able to make large gains in Iraq. In case you weren't aware, prior to taking out Hussien, the US propped up mostly Sunni minorities to rule over Shias in the past. However, whenever "the enemy of my enemy is my friend" phase loses its place, "interests" take back over. This week the ISIS forces attacked the Kurds (also a US ally) in northern Iraq. The Kurds were quite happy with what ISIS did at first, because it allowed them to seize Mosul and other lands for a future "Kurdistan". Not so much now. 

In any case, the point is that, as is the standard operating procedure for the US and other powers, piecing together groups here and there to achieve short term goals can blow up in your face. It appears the "coalition of the willing" this time around can't be expected to last too long before the bigger powers get involved. For instance, if Iran gets more involved in Iraq, and the ISIS forces are getting defeated, it would not be surprising at all to see Saudi Arabia move those 30,000 troops into Iraq. That sets up a direct confrontation between the two on Iraqi soil - to begin with. That is a very real possibility. The US has a number of bases in Saudi and directly supplies it militarily. That could draw the US in as well. If Saudi Arabia were to begin to lose a war with Iran, US intervention is guaranteed. So as you can see, a simple invasion by a group of fanatical types (ISIS) can quite easily develop quickly into a region wide conflict of biblical proportions. 

For every action there is a reaction. So it is in science and so it is in life - which includes politics and warfare - unfortunately. The truth is that the world is already at war, but nobody seems to recognize it. Nor, does it seem, do they see the underlying causes. There is this and that about the usual "You're a nazi, we are democracy, yada yada", but in the end as in the beginning, it's simple rhetoric. The truth is far more serious. It's a war, a hot war, happening on multiple fronts before our eyes. Sure much of it lies in the shadows, not yet ready to be overt, but it's there nonetheless. People are dying, cities are being destroyed, countries and families are being ripped apart. Interests are acting. Daring each other to go to the next level. Seeing who will blink first. Seeing if anyone will blink. It appears that the days of blinking maybe over, and the ante will only rise. Until that unfortunate day happens, we will still be at world-wide war. It just remains undeclared.

The Mouse Trap-Battle of Ukraine

It might seem like a strange headline, but the war in Ukraine really is over already. Some wars have their ending written the moment they are started - the fighting and dying being the interlude between the two. Take for example World War II. Hitler was warned by his Generals not to start the war in 1939, because Germany's rearmament was not ready and the prospect of over extension was obvious. Hitler didn't listen, and the moment German tanks crossed the Polish border the war was lost - for Germany. The case is remarkably the same here.

What started as a very obvious western coup of the then Russia friendly government of Ukraine turned into a civil war. Although it is denied, by both sides, the West and Russia have fed and lead the opposing forces in the Ukraine from the get go. However, unlike almost all other proxy wars the two have waged against each other since WWII, this time the collision between the two has become almost inevitable. It almost happened earlier in Syria when Chinese and Russian war ships steamed into the waters off its coast to challenge an immanent American-led assault. The US blinked, and the rest is history. Now the battlefield is Ukraine.

The Novorossyia forces (NAF), also known as separatists to the Ukrainians, led by Igor Stelkov (former Russia army Colonel), created what can best be described as an "elastic defence". What that means is they spread themselves out thinly around towns, villages and cities throughout the Ukraine provinces of Luhansk and Donetsk that they claim as their own. Rather than negotiate with the NAF, the newly self-appointed government of Ukraine immediately responded with military force. First with weak incursions by a handful of armored personnel carriers (APCs), which were chased by residents out of communities, and then more radical "Right Sector" (neo-nazis) and "National Guard" units.

The Ukrainians gradually took each little community or town one by one. The NAF gradually withdrew to the areas directly surrounding their two cities of Luhansk and Donetsk. On the face of it, the Ukraine army appears on the verge of victory, but things aren't always what they seem. Firstly, as the NAF slowly withdrew from their elastic defence, they took a very serious toll on the Ukraine army's equipment and troops. Estimates are in the tens of thousands of deaths and wounded. The Government of Ukraine vigorously denies it, but the decree of mandatory service last week strongly suggest the numbers are true, and Ukraine needs replacements. The NAF, of course, are also taking serious casualties, but they are in reinforced defensive positions giving them a strong advantage. The traditional figure, if the attackers do not have air superiority, which in this case Ukraine does not, is about 10-1. Given each city is rumored to have at least 10,000 fighters, the Ukrainians would need about 150-200 thousand troops to take them. They are nowhere near that.

How then does Ukraine propose to overcome this tactical problem? It seems they intend to rely on massive artillery. In particular, the use of Grad and Smerch rocket artillery. Both these weapons systems were designed to tear apart NATO tank formations by the Soviets. They fire multiple rockets in each salvo, and flatten the ground grid by grid. Ukraine has been using these rocket systems already in smaller locals, but these are large cities - 500,000 to 1,000,000 people. Herein comes the part where you lose the war once you start it.

To fight a war in a cities of this size is a massive effort. The casualties are huge. The destruction wide spread. The civilian casualties unconscionable. Take the battles in Syria's cities for example. Or Stalingrad, Leningrad, Berlin, etc. The Ukraine army is slowly, methodically being drawn into a trap of its own making. For starters, it has transferred a massive amount of its men and equipment from the West of Ukraine to the front in the East. Those forces are focused around the provinces of Donetsk and Luhansk, and being warn down. These are its best units. However, the biggest danger for Ukraine is that the vast majority of its army is now within range of Russian artillery/rocket forces without those same forces having to leave Russia. Furthermore, the Ukraine forces are effectively without any air support.

I call it the "Mouse Trap". Russian forces, having lured the Ukraine army east, with the NAF being the cheese, can now trap those forces behind the Dnieper River - unable to defend the western part of Ukraine - including Kiev. That would be the metal part of the bar coming down on the neck. A good example of this is the Donetsk pocket that formed between the Russian border and southern Donetsk province. Ukrainian forces, following ambitious orders of the new President of Ukraine Poroshenko, sent 3 of the best and largest battalions they had to close all the border points between Russia and Ukraine. These forces swept north of Maripol and continued along the Russian/Donetsk border capturing crossing after crossing - until they came up against fortified emplacements waiting for them around Torez area. Then, suddenly, way back where they started the swing, the NAF captured a relatively small position that cut the entire force off from any resupply. Without air support or resupply, units like the 79th and 72nd airmobile brigades were systematically destroyed where they were trapped. Many have died. Many have surrendered to Russia at the border. Most of their equipment is destroyed. That battle continues. Point is, they were lured in and then destroyed, helplessly.

On a much bigger scale, this is what I believe Russia is doing to Ukraine, and in a sense its western allies. The calculation is: will the West go to war with Russia over Ukraine? The obvious answer is no. Being that the answer is no, Russia has a free hand to really act at any time it chooses in Ukraine. It may allow Ukraine to wither away in a battle of bloody attrition in the cities of Donetsk and Luhansk, and then move in when its citizens can no longer stand the scenes of civilian casualties and destruction. It may choose to move sooner to save the inhabitants, and bring its people along board. One thing it certainly will not allow is a NATO presence of any kind in eastern Ukraine, and western Ukraine is also questionable. Putin still sits back, with many cards up his sleeve, with the cat like smile that has become famous. Europe entertains the thought of already deflating economies, and what a Russian withdrawl from their economies would mean - instant depression. The US has too many balls in play around the world to react, and even if they could, what can they do to the Russians that the Russians can't do back to them? Not much.

It's a game of chess. A friend once called it Wizards Chess (after the famous Harry Potter scene). I call this particular strategy the "Mouse Trap", and Ukraine is the mouse.























     

All the King's Men - Part 6 - Paul Davis and the RNCA

Paul Davis is running for the PC leadership race - the new one. The last one went off the rails like a train derailing at high speed. It was ugly, messy and well ... that about covers it. Davis was elected in the district of Topsail as a result of a by-election in 2010. A dashing, and well-spoken MHA (as opposed to any of the rest of the PC MHAs), Davis quickly made it through the ranks to the Cabinet table. He has held a number of cabinet positions in a very short period of time, mostly as a result of the political carnage at the top of the PCs over the last four years: Minster of  Transportation; Minister of Service NL; Minister of Child and Youth Services; and Minister of Health and Community Services. However, this post deals with the time just before Davis entered the provincial scene as an MHA.

Davis became best known in the province as the public voice for the Royal Newfoundland Constabulary (RNC). He joined the force in 1985 and retired in 2010 - just as he entered elected political life at the provincial level. As part of his service i the RNC, Davis served on the Executive of the Royal Newfoundland Constabulary Association (RNCA) - from 2005-2010. It is this period that casts a shadow over Davis's judgement and leadership qualities.

The RNCA is essentially the "union" for officers of the RNC. The RNCA lists, as its first objective as: "The goals and objectives of the RNCA are to improve benefits and working conditions for police officers." Nothing inherently wrong with that. Every union, or in this case "professional association" does the same thing. However, unlike other trades, or professions, the RNCA are restricted in how they can "improve benefits and working conditions." The primary restriction on that practice is a ban on political activity by RNC officers - ie: those that make up the RNCA:

From the Royal Newfoundland Constabulary Regulations:

"Officer's Conduct:

       7. (1) (A) A police officer shall not:

           (d) wear the emblem, mark or insignia of a political party or in another way manifest political                               partisanship.

      (3)  A POLICE OFFICER WHO FAILS TO COMPLY WITH OR OTHERWISE CONTRAVENES A PROVISION OF THESE REGULATIONS IS GUILTY OF AN OFFENCE.

Seems straight forward enough. While officers have the right to advance their positions through the RNCA, the law of the Province requires they do so without "manifesting political partisanship". However, that is not what's been happening - and Davis had a hand in that.

The RNCA's entry into official political partisan activities first appears in 1999 with a $200.00 election contribution to PC candidate John Ottenheimer - yes the same John Ottenheimer that is now also running for the PC leadership (much more on him in another post). It made no other donations to any political party. In that same year, "Coppers" (the RNCA Mess) donated $200.00 to the PC Party. That's where the long relationship between the RNCA and the PC Party started. Also, in that same year, RNC officers were banned from staging protests by the provincial Liberal government - which caused fury in the ranks of the RNC. Whether or not the entry into political donations is tied to the dissatisfaction of a ruling against them is uncertain - although it pops up again in 2007.

In 2007, while Davis was an RNC officer, and a member of the Executive of the RNCA, the force became entangled with the then PC government in contract issues. Specifically, the PC government refused to grant the RNC the wage increases they were demanding, and the matter had to be settled by arbitration http://www.gov.nl.ca/lra/arbitration_awards/pdf/20070531_Provincial_Government_Public%20Services%20Secretariat_Executive_Council_and_RNCA_Arbitrator_Fagan_Christine.pdf 

It was the only year the RNCA refused to contribute to the PC Party, and instead made a donation of $500.00 to the opposition Liberals:

1999 - John Ottenheimer    - $  200.00 (election)

1999 - PC Party                - $  200.00

2001 - PC Party                 -$ 1250.00

2002 - PC Party                 -$ 1250.00

2003 - PC Party                 -$ 1000.00 (election)

2003 - PC Party                 -$ 1750.00

2004 - PC Party                 -$ 3000.00

2005 - PC Party                 -$ 1800.00

2007 - Liberal Party            -$  500.00

2008 - PC Party                 -$ 2000.00

2009 - PC Party                 -$ 2000.00

2010 - PC Party                 -$ 2000.00

2010 - Paul Davis               -$ 1000.00 (by-election)

2011 - PC Party                 -$ 2000.00

           Liberal Party            -$ 1200.00

2011 - Paul Davis               -$ 1000.00 (election)

2012 - PC Party                 -$ 2000.00

           Liberal Party            -$ 1650.00 

When the story was cast under light by the Telegram in Dec, 2011, they received this response from Tim Buckle - RNCA President:

"The RNC Association supports the political process... Fundraising by political parties is an aspect of politics, and we have supported both (the Tories and Liberals)"

Buckle admits that "fundraising" is "an aspect of politics". In other words, Buckle admits that the Association has broken the law by violating the prohibition on partisan politics incorporated in the "Regulations". 

Now, the stated goal of the Association is to "improve benefits and working conditions for police officers". In other words, get better pay, benefits, etc for its members - who are all RNC police officers. That is its primary role. Therefore, it can be easily argued the RNCA is making financial contributions to the governing party to influence its ability to get those increases and benefits. The problem with that is it violates the Criminal Code of Canada:

"(2) Every one commits an offence who, in order to obtain or retain a contract with the government, or as a term of any such contract, whether express or implied, directly or indirectly subscribes or gives, or agrees to subscribe or give, to any person any valuable consideration

         (a) for the purpose of promoting the election of a candidate or a class of party of candidates to                          Parliament or the legislature of a province; or

         (b) with intent to influence or affect in any way the result of an election conducted for the purpose of                  electing persons to serve in Parliament or the legislature of a province."

It seems clear that the RNCA, including by his participation Davis, withdrew financial support of the PC Party when contract negotiations were forced to arbitration in 2007. It also seems clear that the RNCA started contributing to the PC Party (and parties in general) after a conflict with the then Liberal government in 1999. The "implied" message being quite obviously that political donations will be held back if contracts are not negotiated to the RNCA's satisfaction. That would violate the Criminal Code, and its corruption provisions. It is also quite obvious that the RNCA intended to influence the result of an election, because it donated to Davis and the PC Party directly in election and by-election contributions. 

I personally had a similar type situation indirectly with Davis in 2010. He, along with Terry French, were presenting on election readiness to the PC Party convention. While sharing the stage with Davis, French advocated that delegates should approach paving contractors for donations - reminding them where their contracts came from. When that issue hit the press French did not deny he had said it. More importantly, for the purposes of his leadership integrity, Davis did not come forward and admit the comments were made. Coincidentally, French is now Davis's co-campaign manager for the leadership. 

The bottom line is that Davis was involved with making political donations from the RNCA to the PC Party from at least 2005-2010. He accepted personal political donations from the RNCA for his election to office. All of which appear to violate a number of laws. That raises the question in my mind: Is Paul Davis fit to be premier of this Province? The answer: He looks the part, but his actions say different.

The Great Uncoupling

The war in Ukraine is about a number of things: language and culture; nationalism; buffer zones; resources; and even bees. It has become the playground for a hybrid proxy war between the "East" and the "West". Like the Lend Lease program of World War II between the US and Britain, Russia now appears to be supplying arms to rebels in East Ukraine while trying to remain officially neutral. On the flip side of the coin, the US and allies have openly supplied the Ukraine government with money, arms, and reportedly soldiers - or private military  contractors. To be clear, there are no innocent parties here. There is also no right or wrong side. This is about one thing - interests.

It is also extremely naive to look at the Ukrainian civil war as a one-off. An isolated conflict on the bridge between Europe and Asia. It is far more than that. In fact, the Ukraine conflict is the final tremor in the "Great Uncoupling". To understand what's happening to the world one needs to go back to the early 1990's and the "fall" of the Soviet Union. The question is: Did the Soviet Union lose the Cold War, or did it simply change tactics and create the "Gold War". In other words, did the Soviets, and as importantly the Chinese, decide a military standoff was a flawed strategy, and the better strategy was to beat the West at its own game - namely financially.

When the Berlin wall fell, Russia and China became "quasi-capitalist" societies. By which I mean, fundamental governing structures remained in place, but production of goods and services changed somewhat. Western countries, and particularly Western corporations, began to rely on cheap Chinese goods to drive their economies, and endless supplies of Russian natural resources to feed their production. Over time, the West accumulated huge trade deficits with the East, and more importantly huge debts to cover it. The debts were financed by the East. Now China is on the verge of becoming the largest economy in the world. Similarly, Russia is the great energy warehouse for Europe. Both have highly developed space programs, defence programs, and technology in general.

Fast forward to 2010, and the World Economic Conference in Davos, Switzerland. At the conference both Russia and China insisted on a new "world reserve currency". They argued that, especially after the collapse of the US economy in 2008, that the US currency was no longer strong enough to fit that roll. They were turned away. However, it didn't end there. Now enter the Ukraine crisis.

The United States reaction to the Ukraine crisis has been to financially act against Russia. However, that has suited Russia's purpose. It's given Russia the reason it needed to secure itself from financial instability. It also gave Russia the excuse it needed to take the next major step in the "Gold War" - namely, isolate the indebted countries of the West from the demographic market places of the East. Russia and China immediately started this process by creating, in a sense, a sheltered monetary union between themselves. Firstly, the massive gas deal between them was to be paid in their national currencies - not US dollars. That is the blue print that each country wants, not just for each other, but also the non-aligned BRIC countries like India, Iran, Brazil and the like. By way of example, India's most recent purchase of a Russian aircraft carrier. Another important development was Russia's moves on "card transactions". Russia took steps for credit card companies that essentially make Western cards useless in that market, and even created its own chip technology for cards.

The lesson to learn from these actions is quite simple: Now that Russia and China have the West in an indebted position they aim to starve Western production of markets. For example, Russia and China are creating their own "IMF". They will lend, etc to the developing world in competition with the already existing IMF (which they see as Western dominated). The currency involved with their IMF will be the Chinese Yuan - not the US dollar. Their primary market will be the BRIC countries - which also have the largest demographic markets for consumption of goods. The West will be faced with a limited market for its goods - a market dominated by heavily indebted countries, whose debt is primarily owed to the East, and whose populations are the fastest aging in the world.

In other words, the "Great Uncoupling". The splitting of the world into two camps: North America and Europe vs the rest of the World. The old Soviet Bloc, China, and BRIC versus the rest. The end of the "New" World Order, and the beginning of another. It's a financial war that the West cannot win. On every level, strategically or tactically, the West can not win in a financial war. Largely, a position it placed itself in by losing the discipline that gave it rise in the first place, and the inability to recognize the nature of the financial war since the 1990's. Living far beyond its means, and being helped along the way by those that were only too happy to help it along the way.

So, in many ways Ukraine will be the litmus test of each sides power. Will the West challenge Russia's counter moves in Ukraine with military force? It's abundantly clear that Russia is prepared to do so. It's far less clear that the West has the appetite, or even the means, financially or otherwise, to do so. Will the West simply recognize the apparent inevitability of its financial outflanking, or will it fight til the last man? In a world of mutually assured destruction a nuclear war seems out of the question. Will the West see a large scale conventional war as their one and only last hope? Not likely. The Russians and Chinese, not to mention countries like India or Iran, would be at least their equals. The great irony is that, frankly, the West is no longer in a financial position to fight a large scale war, while the East's debt is minuscule in comparison. yes, we live in a world of ironies at the moment. We also live in a world on the edge - on the edge of divide. At the end of a pseudo World Order, and on the verge of a quite different World Order. But for now, we are on the cusp of the "Great Uncoupling".











 

The Decline of Danny Williams

There was a time when Danny Williams' controlled the collective mind of Newfoundland and Labrador - those days are over. While premier he wrapped himself tightly in the provincial flag, while disgracing the Canadian flag. He put gas on the fire of Newfoundland nationalism. I say Newfoundland nationalism, because Labrador nationalism is a kettle of fish he doesn't see as fitting into the picture. For those that don't know, Labrador nationalism is to get the hell out of the province of "Newfoundland and Labrador".

He fanned the flames of already well entrenched anti-Quebec feelings in the province. Blaming Quebec for holding the province down - everything from the Upper Churchill to the Labrador border to transmission rights. Yes the province got screwed on the Upper Churchill, but was it Hydro-Quebec that did it, or a collection of European business men (Brinco) and a then premier who bought 100,000 shares in Brinco hoping to become rich (Smallwood)? Perhaps it was all the above, but Quebec saw his vitriol. Transmission rights were treated in a similar vein. Quebec approved transmission rights for the province, but insisted Newfoundland and Labrador pay for the cost to increase the lines capacities,etc. Williams wanted it for free. He turned them into the bogyman, while in reality it was simply him being too cheap to pay the additional costs. And on it goes. He was the fan of hate. The provocateur. The identifier and the answer all in one.

People generally, and widely bought into that vision. Fueled by sudden oil wealth, britches were extra large. No one ever stopped to tell the people that, despite the oil wealth, the province still only made up 1.5% of Canada's GDP. No, according to Williams and company this was Canada's newest and coolest province that was at the top of the country. In truth, Newfoundland is the oldest settlement in North America (500 years old), and despite joining Canada only 65 years ago, many of its ways follow those time lines. Sure it is cool and has a grove, but so do other places in the country as well. Simply put, Williams exaggerated to the maximum the province's good things, and trivialized the negatives. It created a false impression, and people bought into it.

Things have changed now. 11 years since the start of Williams' reign as premier, and about the same for the oil boom, people are becoming jaded - not without reason. $18 billion dollars in oil income has essentially evaporated. The civil service was increased by 25% (locally known as the "buddy boom") while the gross provincial debt actually grew a billion or so from where it was in 2003. Now the province sees massive cuts in that same civil service. Programs are being trimmed or cut everywhere. There still remains about 300 water boil alerts in rural municipalities across the province. The public roads are literally worse than most third world countries that have pavement. Taxes and prices have skyrocketed as local inflationary pressures from spending like a drunken sailor smashed against the economy. In other words, many people have felt the costs of the "oil boom", but not the benefits.

Essentially, Williams set the economy on fire by dumping billions of taxpayers dollars on building-type infrastructure. The biggest and most gruesome being Muskrat Falls. The PCs had to rein in all that "good times" spending on schools and the like to save up for the 35% down payment the feds required to grant a loan guarantee to build the dam. Now, suddenly, there were layoffs, cancelled programs, healthcare problems, education problems, road problems...the list goes on. Next will be the billion needed for the Hebron partnership that Williams insisted on. But, before that, will come the public pensions.

Williams, during the great spending spree, never took care of the non-sexy stuff like funding the pensions. The only real money he put into the pensions was the $2 billion Paul Martin advanced on the Atlantic Accord, and that was only because it was written into the deal that the money had to be used to reduce the province's debt. Now, as is the case in all our lives, the ignored bill has become the pressing bill. This year Standard and Poors threatened the province with a down grading of its credit rating, because the pension debt had grown into a monster. In fact, since Williams came into office, it has tripled. That $18 billion is all but gone, and the pension bill now approaches half that figure. The cold reality, or the "party is over" hangover, has gripped the province. People are looking around themselves at their grossly over valued housing that is not selling quite like it used to; at that property tax bill that has tripled for that over valued house; at the programs they once took for granted being scaled back; and at that pension they always knew they would need being threatened. Now they are mad. Betrayed. Disillusioned.

That is where the fall of Danny Williams comes in. Like many before him, the grand savior is now being seen in a different light. No longer is his word gospel. No longer is his position without reproach. Many still fondly remember him with the good old days, but a growing number are also associating him with the province's "missed opportunity". Why? Because he didn't do the non-sexy things. He didn't bother with the fundamental responsibility of government, to look after the welfare of its people, but rather he took care of business's business. The cloak of secrecy that he brought in to shield Nalcor, and other government operations is now under intense scrutiny. The bond of trust he had with the people is shattered.

Williams' once untouchable reputation as premier is now only too human. Two very clear examples should make this crystal clear to any casual observer. The recent by-election in which he campaigned for a week straight for his friend Danny Breen in Virginia Waters was one. This district fell to the Liberals despite being former premier Dunderdale's seat, and despite Williams' own personal week long crusade. In the recent past, Williams would only have to show up for a quickie hand shake photo op, and the candidate was guaranteed to win - sprinkled as he or she was with Danny dust. Didn't work for Breen. He lost. Williams claimed he was called in because Breen was sitting at twenty something percent, and that his involvement brought the race to within 40 votes of winning. The truth, as just stated, is Williams mere presence was not enough to save the PC seat or his friend.

Then there was Frank Coleman. The first premier-elect in Canada to be investigated by an Auditor General and resign before he was even officially sworn in. Another friend of Williams. Another friend down. Many believe, as do I, that Williams orchestrated Coleman's run for the leadership. Yet, it failed spectacularly. The entire spectacle played out on provincial and national TV. The embarrassment for the province unprecedented. Williams claimed he had nothing to do with Coleman's "coronation" as leader and "was-to-be-premiership", but almost nobody believes it anymore. The golden touch has turned into the poisoned chalice.

Then, just yesterday, Williams and Brian Tobin presented together at the NOIA conference in St. John's. Afterwards, the media interviewed them both together. The questions were put to Williams. The general theme of the questions: "Are you still going to be involved in politics and the new leadership race for the PCs?" He was quite firm in his reply: "No". He was going to just be quiet now and stay out of politics, much to the apparent relief of Tobin beside him. However, that was short lived. During the same interview he publicly attacked anyone who "publicly shit on Nalcor" - the most political of all bodies in the province.  

"There is a group out there that every day just keeps pounding away...they've all got the same background, they all come from the same origination, for want of a better term, even though it's 30 or 40 years ago. And they're out there just pounding away at us just for the sake of pounding..."

Now, apart from sounding a wee bit paranoid and disturbed, the quote illustrates a few things. It shows that Williams still would rather attack the messengers than contemplate the message. It shows that Williams is still unable to understand the basic tenants of democracy - like the freedom of speech. It shows that Williams is all about getting his own way. In other words, he hasn't learned a thing. Maybe it's hard to teach an old dog new tricks? Either way, the mesmerized audience that once followed closely and unquestioningly at his feet has woken to the reality of the betrayed.




 

Ukraine - the Bee War

Lately, as some of you may know, I've been closely following the events happening in Ukraine. There are a number of reasons for that. Firstly, it is a conflict that has significant geopolitical ramifications that can potentially affect all of humanity - including us of course here on the Rock. Secondly, it involves military tactics which, as a retired infantry officer, I find personally interesting. Finally, I believe there is a need to cast a light on conflict from time to time in order to avoid atrocities against civilians.

The conflict itself has been portrayed by both sides as a sort of "clash of belief systems". On the Ukraine side the separatists in East Ukraine are simply puppets of the Russian government, and in many cases Russian forces pretending to be locals. On the Russian side the Ukraine forces are "neo-nazis", who took power from an elected government, and who are intent on persecuting the Russian populations of East Ukraine. That pretty much sums it up. However, as the saying goes: Truth is the first casualty of war.

In fact, the war in Ukraine has its origins in, believe it or not, the honey bee. The little insect that carries a massively important role - feeding us. The bee pollinates crops, and without bees we starve. That sums it up. Bees are so important in fact that Russia had to export bees to the US, because the US bee population was in radical decline. Russia blamed the decline of the bees on genetically modified crops (GMO). Specifically, Russia accused Monsanto of killing off the bees by use of a neuro-toxin, derived from nicotine, in its crops. The issue boiled over when, last year, US President Obama passed a bill that has been nicknamed the "Monsanto Protection Act". Essentially, a bill protecting Monsanto from civil suits in the US over it's use of GMOs. Putin was so infuriated with Obama he made John Kerry wait for three hours for a scheduled diplomatic meeting. Putin also indicated that the issue could lead to world war.

Ukraine fits into this picture as the "bread basket" of Europe. It's massive fields and rich soil have made it a market for Monsanto, Cargill, and Dow. Until now, companies like Cargill produced seed in Ukraine, but not GMO seed. That is banned by Ukrainian law. The prominence of GMOs therefore stopped at the Polish border - some distance from Russia. The European Union itself had banned GMOs, but that has since changed - and that is key.

With the overthrow of the previous President, based primarily on not agreeing to sign an EU association agreement, the new authorities in Kiev have been pushing toward signing the agreement. That agreement will require Ukraine to allow practices like GMOs. That places GMOs right on Russia's border, and directly affects the purity of its crops and, more importantly, the famous Russian honey bee. Yet it seems like such a small thing to bring the world to the brink of war over. However, look at the ramifications of it.

If the Russians are correct, and certainly all scientific research supports the view that bees are dangerously declining in population, then crops will fail due to lack of pollination. If crops fail then people starve. The big question would be: Have companies like Monsanto developed GMOs that don't require pollination? If that were true, it would leave the ability to feed the population in the hands of very few. In this case, US multinationals. Naturally, one would assume, the Russians and Chinese in particular, and perhaps many others, would consider this a threat to their national interests.

It is noteworthy that, until recently, the Chinese had negotiated an agreement with the Ukraine government to lease 10% of the country's farmland for a period of fifty years. Part of that deal included building a massive bridge from mainland Russia to Crimea. The area of Ukraine that was to see this Chinese lease? The Ukraine province of Donetsk. The Chinese also ban GMOs from their country and food chain. The deal fell through, and just a month ago the Chinese announced they were cancelling their commitment to build that new massive land link from Russia to Crimea. On the flip side, Monsanto, Cargill, etc are going full force in Ukraine. Monsanto has promised a new $150 million facility to produce non-GMO corn there. Where are Cargill, Monsanto's etc plants and prospective plants located? You guessed it  - the Ukrainian province of Donetsk.

Now many observers have looked at the Ukraine situation and asked themselves why is Putin so invested in Ukraine? Why has he sent Russian special forces into Luhansk and Donetsk to organize and train locals, and to actually fight the Ukraine army? Why do these rebel forces keep receiving supplies of equipment and volunteers from Russia? Why does Russia allow its border to be used? The reason it seems is quite clear. The Donetsk province, with Slavyansk as its strong point, is strategic for a reason. Not because Russia wants to rebuild its empire. Not because it wants to protect the Russian language or Russians living there. It is strategic, because without the province of Donetsk the Ukraine government, Monsanto, etc cannot implement a GMO strategy in the country. That is the chess game unfolding between Russia and the West.

Putin has apparently stepped back from an outright invasion of east Ukraine to an alternative strategy. That is, "make all the moves you want with the EU, the US and GMOs Ukraine, but I will hold the one piece of ground that you need to implement that strategy. Without Donetsk, all your agreements and efforts are for nothing." Putin has adopted a strategy of irregular forces, for now, that suits his purpose. He will make sure they get whatever they need to defeat the Ukraine forces in Donetsk, and to a lesser extent in Luhansk. The casualties among civilians will be high under such a strategy, and that is unfolding now in Donetsk in general, and in Slavyansk  particularly. It is in effect an asymmetrical war strategy designed to hold the province of Donetsk.

Meanwhile, the Ukraine government is faced with deciding whether or not an asymmetrical war with Russia in Donetsk and Luhansk is worth it. On the one hand it may lose that war, and both provinces, and also its GMO backer's interests. On the other hand, if it manages to defeat the "rebels" and pacify Donetsk and Luhansk it almost certainly means a Russian invasion. That is the chess match under way. In a strange twist of coincidence, Ukraine's newly elected President Petro Poroshenko owns a massive chocolate corporation named "Roshen", that is apparently in a relationship with Monsanto to develop a "frost resistant" cocoa been crop to grow in Ukraine
 http://wwwghanapolitics.blogspot.ca/2014/03/ukrainian-chocolate-king-to-collaborate.html

  

Whatever your perspective on this conflict is, the role of the lowly honey bee is one worth considering. Is Ukraine really about all the silly twists and turns, or is it a very dangerous game of business?

Frank Coleman and Lies of Omission

What to say on the Frank Coleman/Humber Valley paving story? It's a story of greed, politics and deal making. A tale that one might expect to read from yesteryear, but not in today's "transparent" world of politics. An agreement founded in such arrogance, and so contemptuous of the people of the Province, that you couldn't be blamed for having a hard time believing it could happen today - even given the murky waters of Newfoundland politics. Yet, here it is.

It starts with a sudden coup in the Premier's Office as Kathy Dunderdale is forced from office by a caucus revolt - that was January 22, 2014. The, on February 11, former premier Danny Williams stepped out of the shadows and smeared the position of PC leadership candidate Bill Barry:

"Bill Barry would definitely not have my support. Absolutely not... He indicates that he's interested in privatizing energy..Nalcor, Hydro, he has an interest in privatizing health care, and he has an interest in privatizing education. Well, he doesn't stand for anything that I support, so Bill Barry is off my list. That's probably the clearest thing I can tell you."

Barry's response was direct, but diplomatic:

"Unfortunately, he (Williams) talked about a letter I sent to caucus which, in my view, he totally mischarasterized (sic). I certainly didn't say Nalcor would be privatized and health and education would be privatized. That's not what I said at all."

Barry's response was tame, because he should have called Williams' comments outright lies, with the somewhat obvious purpose, given the context of the rest of his commentary, to destroy Barry as a PC leadership candidate. These were the first shots so to speak.

By sheer coincidence no doubt, two days later Frank Coleman is interviewed by the Telegram on "rumors" he may be running for the leadership. It's actually a most interesting and foreshadowing interview as it turns out. Coleman's comments then:

" It (running for leadership) depends on me having a fairly robust discussion with my partners in the businesses that I am involved in about if I do make a run at this.."

" I am heavily involved (in the business) and there is a bunch of things we are in the middle of, and we are trying to work our way through."

" There is a bunch of things I'm working through...if they transpire the way I hope they do, great. If they don't, it will be somebody else's mantle, not mine."

Cryptic, very cryptic words given the time and what was about to transpire. Coleman admits several things here: 1. That his running for leadership depends on "working things through" with his businesses; 2. That the conversation involves his business partners; and 3. That he is personally working these things through. A man very deeply involved. Now consider, at this very moment in time, his business Humber Valley Paving (HVP) is in trouble with its largest contract - the $19 million paving contract for the Trans Labrador highway. He is losing money, had to get a year extension to complete it, and had personally guaranteed the performance bonds to finish it. In other words, Coleman was a man in a serious bind. Can it possibly be that the words he says above do not refer to such a bind? A reasonable person would conclude they refer to the exact situation Coleman was facing with his government contract, the bonds and HVP.

Then, the very next day no less, Coleman contends he resigned as President and CEO of HVP. That's odd for a number of reasons, the least of which being: Why would the President and CEO of a company, that had just admitted he was "working things through" suddenly resign the next day? Is it reasonable to think that a man with his name on a $19 million bond, and with that company apparently unable to finish the job, would simply walk away from control of that situation on blind faith that something might come down the road to save him? Not only is that unreasonable, it simply defies imagination. The only logical conclusion is that he knew the issue would be resolved in his favour.

Then, on March 10, Coleman contends he resigned as a "director and shareholder". His words. To my knowledge, there is no way to resign as a shareholder. The only logical interpretation of that statement is he sold his shares in HVP. Considering his controlling interest in HVP, that can only mean he sold the company. That begs this question: Who would sell their control of a company if that company's performance of its work on a contract (in this case the Labrador highway) could mean being personally accountable for up to $19 million of your personal wealth? Not just that. Who would buy a controlling interest in a company that was about to default (possibly) on a $19 million contract? Then there are the issues that accompany any sale of a business like: negotiations; due diligence; legal work; and closing, etc. All of this would require much more than the month timeline that Coleman has put out there officially. Again, that defies any reasonable logic.

The obvious conclusion, of a reasonable person, would be that Coleman had full knowledge that his name would be removed from those bonds before he sold his shares - which would mean before March 10. In his words: "..if they transpire the way I hope they do." Apparently they did. Three days later, Coleman's son, apparently representing the new ownership, contacted Minister McGrath to have the contract cancelled, and thus remove the need for the bonds. Seven days later the contract was dissolved and Frank Coleman was released from his $19 million bonds.

Perhaps there is a hint of the truth when, during an interview with Fred Hutton at VOCM on May 9, 2014, Coleman made the following statement:

" I've been in this race for 6 months.."

Six months. That's an interesting statement considering at the time of the interview that would put Coleman's involvement at about the beginning of December, 2013 - or just before Dunderdale was forced to resign by her caucus. For Coleman, that means he would have had to been involved in the ouster of Dunderdale in some way. After all, how could he be involved in a leadership race that didn't exist at the time? There is only one answer for that - it was a backroom plot to dump Dunderdale, and that plot had to have involved Coleman in some way. His words, not mine - "I've been in this race for six months".

The CBC uncovered all this and broke the story. At first it was reported as a $9.5 million bond. Then it was discovered to be two $9.5 million bonds, equaling a total commitment of $19 million. Then it was discovered that Coleman had to sign for the bonds personally. All of this had to be dug up by the media. Coleman never proactively disclosed any of it, even when he knew the exposure was more than was being reported, and even though he new he had personally endorsed them.

Then, as the walls started to close in on him and McGrath, the stories started to trip themselves up. Coleman refused to be forthcoming with who the new owners were of HVP. He even refused to tell the media who he sold his own shares to. He began to trip himself up in his own lies. One such example:

" I don't believe that representatives of the company dealt directly with the Minister...My son, and other members of our company would have spoken directly to the officials. This would have been a decision by officials within the department to make the decision, and they would have made recommendations to the Minister."

As it happened, that wasn't true, and Coleman's media representative got back to the reporter:

"... (Coleman) did not intend to deny that his son, Gene, spoke to Minister McGrath."

Well, it wasn't just an intention to deny the meeting, it was a statement that there wasn't one. In fact, Coleman's son did the negotiating, and was still a director, if not a shareholder as well, of HVP.

Then, on April 30, McGrath made the following statement:

"We don't want to put a company out of business, because if you take their bonds away they would easily be put out of business for future work."

That was original excuse for dissolving the contract - to save the company and its employees. McGrath added that in order to have the job done on time and budget that it was necessary to cancel the contract as going after the bonds was unreliable. That lasted until the national association responsible for bonding agencies accused the Minister of misleading the public by giving false information regarding how bonds work. Yet McGrath still had his whole save the company and the jobs argument floating. Coleman remained silent on the issue of saving the company and the jobs. He never once said the company was in trouble. In fact, he called it "a great company". He bristled at the accusations that this "great company's" bonds were traded off for his agreement to run for leadership - May 6:

" No, I did not benefit personally from this whatsoever. It is incomprehensible to me that somebody would infer that I benefited personally from this."

That was until the media disclosed Coleman personally signed for the bonds, and would have been responsible for their having to be enforced. Then, despite not having mentioned one word of this before publicly, Coleman came out and said this:

" The option that the company would have had its bond pulled is not necessarily the right conclusion to reach. The company would have had other options, either to complete the work or to sell the work."

As usual in this saga, Coleman attempts to cover one lie with another twist. His problem though is his cover story only adds significantly to the drama. Consider his words. There was no urgency to cancel the bonds. The work could be finished or sold. Take him at his word on this for a moment. If those things are all true, then why did the Minister dissolve the contract and release Coleman from the bonds? That would only benefit one person, Frank Coleman. Not the employees. Not the company. Coleman's own defence to personally benefiting was there was no need to release him - so why did Coleman's son request it and why did McGrath do it? See, that's the problem with lies. We even tell our children this as they grow up. Lies only beget more lies, and eventually they all fall. I will leave you with this last Coleman quote, which I believe is the biggest lie of all:

"I can absolutely tell you there is nothing untoward here."