16 March 2007
There is not much I have to say today. Stephen Roach has said it better than I could possibly have done.
In his current essay, Roach summarizes our present economic predicament in only a few short paragraphs.
His essay is entitled “The Great Unravelling.” Read it here.
Friday, March 16, 2007
Wednesday, March 14, 2007
Market Tumbles, Bernanke Panics, Gold Soars
13 March 2007
OK. This is not today’s headline. But how long do we wait before the above sequence of events becomes the news of the day?
I am now thinking that the wait will not be long.
US investment markets have been running on the notion that the Federal Reserve will maintain a moderate-to-aggressive stance based on a strong economy.
The strong economy notion is now unwinding – along with the carry trade In the Japanese Yen.
The collapse of the US subprime lending industry is bringing with it the realization of the obvious – that the other sectors of the economy are not far behind. That is – deflating home values make subprime loans unrecoverable. That returns something like 2 million homes to the faltering US real estate market. That in turn places downward pressure on mid-range home prices, and so on. You can figure it out. Anyone can.
(As one example, and this is today’s news, General Motors announced that it will be flowing $1 billion to its formerly profitable GMAC finance arm to cover losses on subprime loans. GM has not made money selling cars for years, and is selling the GMAC unit to prop up its moribund auto manufacturing business. Unfortunately, GM is now losing more money due to its careless speculation in the subprime and no-documentation mortgage market – think Ditech. It does not take a sophisticated analyst to see that this is merely the tip of the iceberg.)
US workers have had no substantial income gains to support their feverish spending habits, so if they cannot generate cash by advancing loans against the (now declining) equity in their homes, the consumer market must slow. The US economy is based 70% on consumerism – a consumerism so powerful that it has undergirded much of the expansion in the global marketplace over the past two to three decades.
The coming “whoosh” downwards in US equity markets will rapidly confirm that the capacity of the ever-spending, ever-borrowing US consumer to continue to fuel global economic growth is finally drawing to an end.
Is this a panic scenario for Ben Bernanke and the US Federal Reserve?
I think so.
What will Mr. Bernanke do?
The only thing he knows how to do.
You can forget about inflation targeting. That is talk. Mr. Bernanke is afraid of deflation – read “economic collapse” if you prefer.
Mr. Bernanke doesn't want another 1929 on his watch.
Mr. Bernanke will inflate the US money supply, and lower interest rates.
No more Mr. Tough Guy. When the going gets tough, Mr. Bernanke will be Mr. Nice Guy.
Is dropping interest rates and inflating the money supply really a nice thing for a “nice guy” to do?
We've discussed this before. It is a policy of short-term gain for long-term pain. More inflation by the US Federal Reserve will mean yet more capital misallocation and more inflation (though Mr. Bernanke talks against it).
What will preserve value when this occurs?
Precious metal investments (gold and silver).
Here is the sequence.
1. Market plummets.
2. Bernanke panics.
3. Gold and silver soar in value (relative to the ever-devaluing US currency).
It has often been noted that every new Federal Reserve Chairman gets his crisis.
Mr. Bernanke's crisis is coming. In fact, it is now here.
Mr. Bernanke will panic – and be loved for doing so.
It is a very bad response, but a very predictable one.
Gold and silver investors will benefit.
It now looks as though this will be occurring sooner rather than later.
OK. This is not today’s headline. But how long do we wait before the above sequence of events becomes the news of the day?
I am now thinking that the wait will not be long.
US investment markets have been running on the notion that the Federal Reserve will maintain a moderate-to-aggressive stance based on a strong economy.
The strong economy notion is now unwinding – along with the carry trade In the Japanese Yen.
The collapse of the US subprime lending industry is bringing with it the realization of the obvious – that the other sectors of the economy are not far behind. That is – deflating home values make subprime loans unrecoverable. That returns something like 2 million homes to the faltering US real estate market. That in turn places downward pressure on mid-range home prices, and so on. You can figure it out. Anyone can.
(As one example, and this is today’s news, General Motors announced that it will be flowing $1 billion to its formerly profitable GMAC finance arm to cover losses on subprime loans. GM has not made money selling cars for years, and is selling the GMAC unit to prop up its moribund auto manufacturing business. Unfortunately, GM is now losing more money due to its careless speculation in the subprime and no-documentation mortgage market – think Ditech. It does not take a sophisticated analyst to see that this is merely the tip of the iceberg.)
US workers have had no substantial income gains to support their feverish spending habits, so if they cannot generate cash by advancing loans against the (now declining) equity in their homes, the consumer market must slow. The US economy is based 70% on consumerism – a consumerism so powerful that it has undergirded much of the expansion in the global marketplace over the past two to three decades.
The coming “whoosh” downwards in US equity markets will rapidly confirm that the capacity of the ever-spending, ever-borrowing US consumer to continue to fuel global economic growth is finally drawing to an end.
Is this a panic scenario for Ben Bernanke and the US Federal Reserve?
I think so.
What will Mr. Bernanke do?
The only thing he knows how to do.
You can forget about inflation targeting. That is talk. Mr. Bernanke is afraid of deflation – read “economic collapse” if you prefer.
Mr. Bernanke doesn't want another 1929 on his watch.
Mr. Bernanke will inflate the US money supply, and lower interest rates.
No more Mr. Tough Guy. When the going gets tough, Mr. Bernanke will be Mr. Nice Guy.
Is dropping interest rates and inflating the money supply really a nice thing for a “nice guy” to do?
We've discussed this before. It is a policy of short-term gain for long-term pain. More inflation by the US Federal Reserve will mean yet more capital misallocation and more inflation (though Mr. Bernanke talks against it).
What will preserve value when this occurs?
Precious metal investments (gold and silver).
Here is the sequence.
1. Market plummets.
2. Bernanke panics.
3. Gold and silver soar in value (relative to the ever-devaluing US currency).
It has often been noted that every new Federal Reserve Chairman gets his crisis.
Mr. Bernanke's crisis is coming. In fact, it is now here.
Mr. Bernanke will panic – and be loved for doing so.
It is a very bad response, but a very predictable one.
Gold and silver investors will benefit.
It now looks as though this will be occurring sooner rather than later.
Monday, March 05, 2007
A Simple-Minded Commentary on the Recent Reversal in Precious Metals
March 6, 2007
Many observers have commented that gold and silver stocks, as well as many commodity stocks, have retreated more than general stocks in the recent sharp market reversal.
I concur that this is the case, and our portfolio has declined 15% in the last 5 trading days, or 3% a day. This is double the decline in gold and in the Dow Industrials.
Further, Adam Hamilton and Scott Wright have noted that the present advance of gold stocks in parallel with gold is the most lackluster since the onset of the present precious metals bull market in 2001. As of today, precious metal stocks have demonstrated no leverage at all to the precious metals on the current upleg – in fact, they are now lagging.
Is the bull market trend petering out for precious metal miners?
How could it be?
When gold and silver advance dramatically in value, this inevitably benefits the miners (though mining is a difficult, arduous and often thankless business). 2006 Profits have been stellar for many of the miners, and this positive trend remains in its infancy.
Why then are precious metal stocks going down more than general stocks?
It is certainly possible that precious metal miners are now facing a reversal of fortune, but I am skeptical of this all-too-bearish explanation.
Let me offer a simpler answer.
The precious metal mining stocks go down more because they go up more. I think it is really as simple as that.
The gains have been dramatic since 2001, and a breather is not uncalled for. Technically, there are many forces of resistance to deal with at this juncture, most dramatically, the 3-1/2 decade downtrend in the value of gold mining stocks relative to gold.
Resistances are formidable technical hurdles in the world of investments – they are really a psychological barrier – and they typically require repeated advances and retreats in order finally to be vanquished.
The present reversal in precious metal mining stocks may not yet be done its course, though I suspect that most (perhaps 80-90%) of the reversal is now in. And the struggle may not yet be done. That is, the miners may advance once more and be turned back yet again.
But my gut sense is that the bull market is not over for the miners – rather, that this is only just the beginning of a multi-decade journey.
This would mean that the present ugly environment is a "wall of worry." That would make sense, as this phenomenon characterizes all bull markets, guarding them against unsustainable extremes in positive sentiment.
In my view, sentiment on the miners is already more negative than positive – and this means that there are many uncommitted investors out there who have yet to join us.
If this is a bull market for the miners as well as for the precious metals themselves, then I continue to foresee a bright future for the precious metal mining stocks – despite the all-too-obvious negatives that have dragged them down 15% or so in the past five days alone.
Gold and silver are worth much more than they were in 2001 and 2003 respectively, and this means that the gold and silver in the ground – in the miners' possession as proven, probable and inferred reserves – is also steadily climbing in value.
In my view, this simple fact will continue to translate into progressively advancing market value – that is, into continued rises in share prices.
If I am right, then the gold and silver mining stocks are a very good buy – right here, right now.
If you haven't committed to acquiring precious metal mining shares, then today – that is, Tuesday, March 6, 2007 – might just be a perfectly fine day to buy more of them.
Many observers have commented that gold and silver stocks, as well as many commodity stocks, have retreated more than general stocks in the recent sharp market reversal.
I concur that this is the case, and our portfolio has declined 15% in the last 5 trading days, or 3% a day. This is double the decline in gold and in the Dow Industrials.
Further, Adam Hamilton and Scott Wright have noted that the present advance of gold stocks in parallel with gold is the most lackluster since the onset of the present precious metals bull market in 2001. As of today, precious metal stocks have demonstrated no leverage at all to the precious metals on the current upleg – in fact, they are now lagging.
Is the bull market trend petering out for precious metal miners?
How could it be?
When gold and silver advance dramatically in value, this inevitably benefits the miners (though mining is a difficult, arduous and often thankless business). 2006 Profits have been stellar for many of the miners, and this positive trend remains in its infancy.
Why then are precious metal stocks going down more than general stocks?
It is certainly possible that precious metal miners are now facing a reversal of fortune, but I am skeptical of this all-too-bearish explanation.
Let me offer a simpler answer.
The precious metal mining stocks go down more because they go up more. I think it is really as simple as that.
The gains have been dramatic since 2001, and a breather is not uncalled for. Technically, there are many forces of resistance to deal with at this juncture, most dramatically, the 3-1/2 decade downtrend in the value of gold mining stocks relative to gold.
Resistances are formidable technical hurdles in the world of investments – they are really a psychological barrier – and they typically require repeated advances and retreats in order finally to be vanquished.
The present reversal in precious metal mining stocks may not yet be done its course, though I suspect that most (perhaps 80-90%) of the reversal is now in. And the struggle may not yet be done. That is, the miners may advance once more and be turned back yet again.
But my gut sense is that the bull market is not over for the miners – rather, that this is only just the beginning of a multi-decade journey.
This would mean that the present ugly environment is a "wall of worry." That would make sense, as this phenomenon characterizes all bull markets, guarding them against unsustainable extremes in positive sentiment.
In my view, sentiment on the miners is already more negative than positive – and this means that there are many uncommitted investors out there who have yet to join us.
If this is a bull market for the miners as well as for the precious metals themselves, then I continue to foresee a bright future for the precious metal mining stocks – despite the all-too-obvious negatives that have dragged them down 15% or so in the past five days alone.
Gold and silver are worth much more than they were in 2001 and 2003 respectively, and this means that the gold and silver in the ground – in the miners' possession as proven, probable and inferred reserves – is also steadily climbing in value.
In my view, this simple fact will continue to translate into progressively advancing market value – that is, into continued rises in share prices.
If I am right, then the gold and silver mining stocks are a very good buy – right here, right now.
If you haven't committed to acquiring precious metal mining shares, then today – that is, Tuesday, March 6, 2007 – might just be a perfectly fine day to buy more of them.
Saturday, March 03, 2007
A Safe Haven in a Global Storm
3 March 2007
The broad market sell-off this week actually hit precious metals and precious metal stocks harder than the general market.
We may not be done with this reversal yet, although those who have a big stake in market stability will be pulling out the stops to restore confidence to the global marketplace.
What is going on?
Well, we've discussed excess liquidity before. By definition, excess liquidity (too much money being created as opposed to the value of all goods and services being created) creates the conditions for capital misallocation. In short, all this extra money will get invested in locations that are not fundamentally productive.
Why is that?
If economic growth were attributable to rising productivity, then capital would be invested in productive assets. But our recent period of economic growth is not about productivity, it is about liquidity.
Government creation of excess money supply makes people feel richer – for a while. But a vastly increased sum of money chasing only marginally increased quantities of goods and services simply drives up the cost of goods and services, through the operation of the law of supply and demand.
Essentially, every major government in the world is doing this right now, so what we are presently witnessing is the creation of a breeding ground for a liquidity crisis of global proportions. (Click here to see how the US Federal Reserve Bank rationalizes its commitment to excess liquidity.)
While governments can increase the amount of money in circulation – and they have been doing so at a stunning pace – the quantity of US Dollars in circulation alone is now increasing on the order of one trillion dollars per year – democratic governments have only limited means of controlling where the money flows once it is in others’ pockets.
This is capital misallocation.
Basically, well-positioned international investors are redirecting these excess funds for quick gains, and only rarely for increased (and rationally considered) long-term productivity.
Some of the more obvious manifestations are: (1) burgeoning Asian and Middle Eastern economic growth and infrastructure spending (this is potentially productive, but is excessive and unbalanced, driven by transient market forces – such imbalances are presently driving a global glut of memory capacity in the information technology field, for example, and this is rapidly driving down prices and undermining the value of the infrastructure investment in memory technology); (2) an until recently rapidly inflating – and now rapidly deflating – US real estate market; (3) the now well-discussed Yen carry trade – which involves borrowing Japanese Yen at low interest rates and investing these cheaply obtained funds in any asset that is appreciating in value more rapidly than the interest due on the Yen loans; and (4) what will soon be extensively discussed – the proclivity of global hedge funds (usually private funds which use leverage of up to 10-20 times to invest long and short in a wide variety of usually short-term speculative investments).to move opportunistically in and out of various investments on a very short-term basis.
What is driving the liquidity?
Virtually every government in the world is guilty of printing money at an excessive clip.
But one government is in big trouble, and that is our neighbour to the south.
The United States is now running deficits in global trade and federal government spending on the order of one trillion dollars per year, and that deficit closely matches the one trillion dollar per year rate of growth of the United States money supply.
That is, the United States is not utilizing an increase in productive assets to meet its global and domestic debt obligations, but is simply creating the money out of thin air to make these payments. The newly created dollars are then sold in the international bond market, and this is the point where their ownership rapidly passes out of US hands.
The global investors who are acquiring US Dollars have a spectrum of interests, some but not all of which are aligned with the interests of the United States. For the most part, international investors who are in receipt of US Dollars through the massive US current account and trade deficit – particularly the Chinese, the Japanese and the Middle Eastern oil producers – have been buying back United States assets. While this is comforting to the powers that be in Washington, D.C., it does indicate that ownership of US assets is rapidly slipping out of US hands.
In brief, to use an analogy, the homeowner is selling the kitchen sink and the living room carpet to pay the mortgage – and the equity interest in the home is declining against ever-rising debt claims.
Countering this trend, however, has been a gradual and so far gentle shift of global investment positions out of US assets and into alternative assets, including Asian and Middle Eastern infrastructure and business development, commodities generally, alternative currencies – particularly the Euro, and precious metals.
This accounts for the 30% decline in the international exchange value of the US Dollar over the past 5 years, and plays a role in the topping out of the US stock market (which has been declining relative to gold since 1999).
The point I wish to emphasize today is that the excess money supply has clearly been misallocated. At the most basic level, monetary inflation is a tax on citizens that punishes those with stable incomes and rewards those who can exploit liquidity flows to leverage their gains.
Thus, salaried wage earners are seeing their purchasing power slip while CEOs and hedge fund investors (not to mention precious metal investors – and this can be anyone, including you or me) are able to multiply their assets in this ebullient and highly liquid, but precariously unbalanced, global economic environment.
Precious metals, as I have discussed previously, are a hedge against global monetary insanity, and this is why they are a superior investment vehicle now.
Mainstream investors, perhaps unaware of the global imbalances which are destabilizing the global economy, continue to invest in assets that are perceived to be stable and productive – most often real estate, government and corporate bonds and general stocks.
Unfortunately, while this would be a wise choice in “normal” economic times, we are no longer in normal times, and all of the above-noted mainstream investment vehicles have actually become risky due to the game of international monetary manipulation, which is now nearing a century-long crescendo.
That is, the real estate market has become a bubble, and severe declines are probable in the hottest markets, with stagnation most probable for mainstream markets (in which most Canadian real estate investments are included).
The bond market has become imbalanced by the so far almost imperceptible drift of global interest away from US assets, and this is pushing up long-term interest rates – and undercutting the value of bonds. Bonds, therefore, are unlikely to be a remunerative long-term investment.
The current global economic boom, due to its being driven by massive debt accumulation, particularly in the United States, will not be able to sustain corporate profits, and this accounts for the already-cited 7-year decline of general equities against gold.
Last, and unfortunately least, cash is literally being “trashed” by the central banks of virtually every major global power. Thus, holding cash has become a certain prescription for future poverty.
I began today’s entry by noting that precious metals have declined more than global equities in this past week’s sell-off. This would seem to contradict my assertion that precious metals are in fact the most secure and rational defensive investment against the global debt and liquidity boom.
Not at all. Closer examination shows that precious metals are being sold off because they have been an effective store of value to hedge risky investments in highly leveraged short-term speculations in such areas as the Yen carry trade, currency swaps, booming Asian and previously booming Middle Eastern markets, etc. Leveraged investors need to sell their productive assets in order to cover their losses when their speculations fail. This appears to account for gold and silver’s decline this past week.
That is, the present sell-off in gold is clearly a transient phenomenon, though it may take some further weeks to unwind, while the destabilization of international markets is a growing and dangerous trend which in the very near future will drive global investors back to gold as a safe haven against gold’s much riskier alternatives. (Every alternative class of investments is riskier than precious metals in the present global marketplace.)
A look at sentiment indicators indicates that gold market sentiment is nowhere near as bullish (70%) as it was near its most recent May 2006 peak (90%). That is, there are investors presently outside the gold market who will soon be moving in, some of them for the first time, due to global financial instability, and this is a stronger long-term trend than the recent short-term move out of gold by speculators who are covering their losses in high-risk and unsound investments.
As I have stated previously, the gold bull market offers a vigorous and jolting ride, with many sharp pullbacks as well as powerful surges. It is not by any means a comfortable ride, nor is it for the faint-hearted. But the global financial marketplace itself is anything but a safe and comfortable environment at present.
That is, there is no place of peace and security anywhere in the global investment world at this time. Even the safest of seats – and that is in gold’s section for certain – will inevitably be buffeted by the crosscurrents of excess liquidity, capital misallocation and global rebalancing.
A worldwide storm is coming, and it is time to make proper preparations. The hour is drawing near. In fact, it is already with us.
What would you prefer? To be bucked about by the gold bull (hang on, don't let go) – or to be boiled slowly with the lobsters in the pot of the global cash, equity and bond markets?
While many commodities will also prove to be outstanding long-term investments in the present environment – and some may fare better than gold and silver – if you are seeking a safe haven against the coming storm, gold and silver remain the place to be. Come on in – there will be good and more company in the house of gold before this multi-decade bull market has run its course.
The broad market sell-off this week actually hit precious metals and precious metal stocks harder than the general market.
We may not be done with this reversal yet, although those who have a big stake in market stability will be pulling out the stops to restore confidence to the global marketplace.
What is going on?
Well, we've discussed excess liquidity before. By definition, excess liquidity (too much money being created as opposed to the value of all goods and services being created) creates the conditions for capital misallocation. In short, all this extra money will get invested in locations that are not fundamentally productive.
Why is that?
If economic growth were attributable to rising productivity, then capital would be invested in productive assets. But our recent period of economic growth is not about productivity, it is about liquidity.
Government creation of excess money supply makes people feel richer – for a while. But a vastly increased sum of money chasing only marginally increased quantities of goods and services simply drives up the cost of goods and services, through the operation of the law of supply and demand.
Essentially, every major government in the world is doing this right now, so what we are presently witnessing is the creation of a breeding ground for a liquidity crisis of global proportions. (Click here to see how the US Federal Reserve Bank rationalizes its commitment to excess liquidity.)
While governments can increase the amount of money in circulation – and they have been doing so at a stunning pace – the quantity of US Dollars in circulation alone is now increasing on the order of one trillion dollars per year – democratic governments have only limited means of controlling where the money flows once it is in others’ pockets.
This is capital misallocation.
Basically, well-positioned international investors are redirecting these excess funds for quick gains, and only rarely for increased (and rationally considered) long-term productivity.
Some of the more obvious manifestations are: (1) burgeoning Asian and Middle Eastern economic growth and infrastructure spending (this is potentially productive, but is excessive and unbalanced, driven by transient market forces – such imbalances are presently driving a global glut of memory capacity in the information technology field, for example, and this is rapidly driving down prices and undermining the value of the infrastructure investment in memory technology); (2) an until recently rapidly inflating – and now rapidly deflating – US real estate market; (3) the now well-discussed Yen carry trade – which involves borrowing Japanese Yen at low interest rates and investing these cheaply obtained funds in any asset that is appreciating in value more rapidly than the interest due on the Yen loans; and (4) what will soon be extensively discussed – the proclivity of global hedge funds (usually private funds which use leverage of up to 10-20 times to invest long and short in a wide variety of usually short-term speculative investments).to move opportunistically in and out of various investments on a very short-term basis.
What is driving the liquidity?
Virtually every government in the world is guilty of printing money at an excessive clip.
But one government is in big trouble, and that is our neighbour to the south.
The United States is now running deficits in global trade and federal government spending on the order of one trillion dollars per year, and that deficit closely matches the one trillion dollar per year rate of growth of the United States money supply.
That is, the United States is not utilizing an increase in productive assets to meet its global and domestic debt obligations, but is simply creating the money out of thin air to make these payments. The newly created dollars are then sold in the international bond market, and this is the point where their ownership rapidly passes out of US hands.
The global investors who are acquiring US Dollars have a spectrum of interests, some but not all of which are aligned with the interests of the United States. For the most part, international investors who are in receipt of US Dollars through the massive US current account and trade deficit – particularly the Chinese, the Japanese and the Middle Eastern oil producers – have been buying back United States assets. While this is comforting to the powers that be in Washington, D.C., it does indicate that ownership of US assets is rapidly slipping out of US hands.
In brief, to use an analogy, the homeowner is selling the kitchen sink and the living room carpet to pay the mortgage – and the equity interest in the home is declining against ever-rising debt claims.
Countering this trend, however, has been a gradual and so far gentle shift of global investment positions out of US assets and into alternative assets, including Asian and Middle Eastern infrastructure and business development, commodities generally, alternative currencies – particularly the Euro, and precious metals.
This accounts for the 30% decline in the international exchange value of the US Dollar over the past 5 years, and plays a role in the topping out of the US stock market (which has been declining relative to gold since 1999).
The point I wish to emphasize today is that the excess money supply has clearly been misallocated. At the most basic level, monetary inflation is a tax on citizens that punishes those with stable incomes and rewards those who can exploit liquidity flows to leverage their gains.
Thus, salaried wage earners are seeing their purchasing power slip while CEOs and hedge fund investors (not to mention precious metal investors – and this can be anyone, including you or me) are able to multiply their assets in this ebullient and highly liquid, but precariously unbalanced, global economic environment.
Precious metals, as I have discussed previously, are a hedge against global monetary insanity, and this is why they are a superior investment vehicle now.
Mainstream investors, perhaps unaware of the global imbalances which are destabilizing the global economy, continue to invest in assets that are perceived to be stable and productive – most often real estate, government and corporate bonds and general stocks.
Unfortunately, while this would be a wise choice in “normal” economic times, we are no longer in normal times, and all of the above-noted mainstream investment vehicles have actually become risky due to the game of international monetary manipulation, which is now nearing a century-long crescendo.
That is, the real estate market has become a bubble, and severe declines are probable in the hottest markets, with stagnation most probable for mainstream markets (in which most Canadian real estate investments are included).
The bond market has become imbalanced by the so far almost imperceptible drift of global interest away from US assets, and this is pushing up long-term interest rates – and undercutting the value of bonds. Bonds, therefore, are unlikely to be a remunerative long-term investment.
The current global economic boom, due to its being driven by massive debt accumulation, particularly in the United States, will not be able to sustain corporate profits, and this accounts for the already-cited 7-year decline of general equities against gold.
Last, and unfortunately least, cash is literally being “trashed” by the central banks of virtually every major global power. Thus, holding cash has become a certain prescription for future poverty.
I began today’s entry by noting that precious metals have declined more than global equities in this past week’s sell-off. This would seem to contradict my assertion that precious metals are in fact the most secure and rational defensive investment against the global debt and liquidity boom.
Not at all. Closer examination shows that precious metals are being sold off because they have been an effective store of value to hedge risky investments in highly leveraged short-term speculations in such areas as the Yen carry trade, currency swaps, booming Asian and previously booming Middle Eastern markets, etc. Leveraged investors need to sell their productive assets in order to cover their losses when their speculations fail. This appears to account for gold and silver’s decline this past week.
That is, the present sell-off in gold is clearly a transient phenomenon, though it may take some further weeks to unwind, while the destabilization of international markets is a growing and dangerous trend which in the very near future will drive global investors back to gold as a safe haven against gold’s much riskier alternatives. (Every alternative class of investments is riskier than precious metals in the present global marketplace.)
A look at sentiment indicators indicates that gold market sentiment is nowhere near as bullish (70%) as it was near its most recent May 2006 peak (90%). That is, there are investors presently outside the gold market who will soon be moving in, some of them for the first time, due to global financial instability, and this is a stronger long-term trend than the recent short-term move out of gold by speculators who are covering their losses in high-risk and unsound investments.
As I have stated previously, the gold bull market offers a vigorous and jolting ride, with many sharp pullbacks as well as powerful surges. It is not by any means a comfortable ride, nor is it for the faint-hearted. But the global financial marketplace itself is anything but a safe and comfortable environment at present.
That is, there is no place of peace and security anywhere in the global investment world at this time. Even the safest of seats – and that is in gold’s section for certain – will inevitably be buffeted by the crosscurrents of excess liquidity, capital misallocation and global rebalancing.
A worldwide storm is coming, and it is time to make proper preparations. The hour is drawing near. In fact, it is already with us.
What would you prefer? To be bucked about by the gold bull (hang on, don't let go) – or to be boiled slowly with the lobsters in the pot of the global cash, equity and bond markets?
While many commodities will also prove to be outstanding long-term investments in the present environment – and some may fare better than gold and silver – if you are seeking a safe haven against the coming storm, gold and silver remain the place to be. Come on in – there will be good and more company in the house of gold before this multi-decade bull market has run its course.
Monday, February 26, 2007
McEwen Returns to Red Lake
26 February 2007
While this event may not be big news for all readers of this blog, Rob McEwen’s return to Red Lake, Ontario (announced today) is very big news for the Northwest Ontario region where I live.
Who is Rob McEwen? He is the developer of the Goldcorp Red Lake mine, one of the world’s richest and most profitable gold mines, if not the richest of them all. He had the combined wisdom and good fortune to guide the company to persevere by engaging in deeper exploration when the existing strike at the Red Lake mine seemed to be playing out.
This serendipitous decision led to the discovery of one of the richest veins of gold in mining history. Following his success in this venture, Mr. McEwen withdrew a substantial portion of his holdings in the company several years ago, and reinvested in the Cortez Trend gold mining region of Nevada.
What has Mr. McEwen done today? Well, you can read all the details here.
Essentially, this is what has occurred, quoting the press release, “McEwen would acquire a major stake in Rubicon through a minimum investment of $10 million. Through wholly-owned Evanachan Limited, McEwen has also agreed to vend-in to Rubicon a 513,000 acre land package in the area of the world-class Pogo gold mine in Alaska in exchange for shares. Rubicon will also acquire a 225,000 acre land position in prospective northeast Nevada, currently held by Lexam Explorations Inc a company in which McEwen is the major shareholder in exchange for shares. McEwen will serve as a strategic advisor to the management of Rubicon for a minimum period of two years.”
I have had my eye on Rubicon Minerals Corp. for the past four years, and had recently tripled our position in mid-February, based on my belief in the company’s strong fundamentals. In response to the news today, I have tripled our position again.
What are Rubicon’s fundamental strengths?
Let me borrow again from the press release:
“Rubicon Minerals currently controls 180,000 acres of prime exploration ground in the heart of the prolific Red Lake gold camp of Ontario, home of Goldcorp's Red Lake Mine which is one of the richest gold mines in the world. During (Mr. McEwen's) tenure at the helm of Goldcorp, that company realized spectacular growth from a market capitalization of $50 million to over $7.0 billion following discovery of the High Grade Zone. Goldcorp has reported that this zone currently has a Proven and Probable reserve of 1.63 million tonnes grading 83.4 g/t gold or 4.37 million ounces of gold as of December 31, 2005 from a total reserve base of 8.34 million tonnes grading 23.75 g/t gold or 6.37 million ounces of gold.
“McEwen said: ‘I am excited to be back in Red Lake and to be involved in the creation of a new Rubicon which will have a great combination of properties in the low-risk North American gold districts of Red Lake, Alaska and Nevada. It will also have a strong cash position that will be used to carry out aggressive exploration programs. The new Rubicon represents a personal investment in one of North America's premier exploration companies.’
“The land package being acquired by the new Rubicon includes significant land holdings in Alaska consisting of approximately 513,000 acres around the Pogo Mine of Teck-Cominco/Sumitomo, which is entering commercial production and is expected to produce between 350,000 and 500,000 ounces of gold annually over a 10 year mine life. With this acquisition, the new Rubicon will become the largest land holder in the Pogo district and one of the largest land holders in Alaska. Rubicon has also agreed to acquire from Lexam Explorations Inc. approximately 225,000 acres of its highly prospective gold exploration properties in Elko County, northeastern Nevada.
“David Adamson, President and CEO of Rubicon said: ‘We are excited to welcome Rob back to Red Lake and look forward to working with him to create what we think will be the "go-to" North American exploration company. With the Alaska and Nevada assets added to our Red Lake portfolio and through our financial strength, the new Rubicon is aimed at attracting investors looking for exposure to high quality exploration in district-scale, politically stable environments.’”
I recognize that you could read the press release for yourself, and also that the above is intended to be promotional literature.
But let’s read between the lines here.
Northwest Ontario has been an economically depressed region since the long-faded 1960’s boom in forestry and mining. We have entirely missed out on the dramatic period of North American growth from 1980 through the present. Northwest Ontario is a sleepy little corner of the world.
For the duration of this decade, our primary news in Northwest Ontario has been of the declining forestry industry, as massive new mills have been established in Asia to pursue expanding markets there, and North American mills have been dismantled. Paper mill and saw mill closures and production cuts and reports of the resultant economic damage have been the primary theme of news coverage in this region throughout the new millennium.
The return of Mr. McEwen to Red Lake is a signal that the fortunes of Northwest Ontario are now turning.
Of course, one swallow doesn't make a summer, but Mr. McEwen's return is a signal event with respect to the focus of national and international interest in mining development in the Red Lake region. (In Kenora, we are about 3 hours southwest of Red Lake.)
What are the implications?
Expect increased investment in other mining projects in Red Lake and Northwest Ontario. Along with that, expect a gradual migration of capital investment, and with it, new job opportunities, to our region.
If I am correct that we are at the mere dawning of a new multi-decade bull market in precious metal mining, then expect that the seemingly moribund and long-forgotten Northwest Ontario region might again become a national and international hotspot for capital investment and economic activity generally.
Like it or dislike it (it will bring new problems for sure), think of Northwest Ontario as a soon-to-be booming international destination for the precious metal mining sector.
By the way, here’s another consideration.
Due to global instability, which I personally attribute in large part to the accumulating adverse influence of excess monetary liquidity, many regions of our globe are becoming unsafe for investment. In all likelihood, that will not be the case in Northwest Ontario, and that is another advantage for our region.
And a note for the young people: You had better start studying geology, engineering, administration and mechanics, because you will be in demand to fill the new jobs which will be emerging in the Northwest Ontario precious metal mining sector.
A closing thought: In the long run, the value of Rubicon Minerals will hinge on how much gold can be discovered and mined. We don't yet know how much gold that will be. In the field of mining exploration, the odds are almost always against the explorer.
But in mining, as in life, you only discover what you search for. Mr. McEwen’s interest will no doubt lead to an acceleration in the pace of exploration in Red Lake. And for the Northwest Ontario economy, that is a good thing.
For now, let’s just speculate that accelerated exploration does lead to accelerated gold mining along the Red Lake-Musselwhite trend. In that case, I'll plan to meet you in black tie and tails at the McEwen Centre for the Performing Arts in Red Lake on February 26, 2030 (I'll be a sprightly 81 as of that date!). See you there!
While this event may not be big news for all readers of this blog, Rob McEwen’s return to Red Lake, Ontario (announced today) is very big news for the Northwest Ontario region where I live.
Who is Rob McEwen? He is the developer of the Goldcorp Red Lake mine, one of the world’s richest and most profitable gold mines, if not the richest of them all. He had the combined wisdom and good fortune to guide the company to persevere by engaging in deeper exploration when the existing strike at the Red Lake mine seemed to be playing out.
This serendipitous decision led to the discovery of one of the richest veins of gold in mining history. Following his success in this venture, Mr. McEwen withdrew a substantial portion of his holdings in the company several years ago, and reinvested in the Cortez Trend gold mining region of Nevada.
What has Mr. McEwen done today? Well, you can read all the details here.
Essentially, this is what has occurred, quoting the press release, “McEwen would acquire a major stake in Rubicon through a minimum investment of $10 million. Through wholly-owned Evanachan Limited, McEwen has also agreed to vend-in to Rubicon a 513,000 acre land package in the area of the world-class Pogo gold mine in Alaska in exchange for shares. Rubicon will also acquire a 225,000 acre land position in prospective northeast Nevada, currently held by Lexam Explorations Inc a company in which McEwen is the major shareholder in exchange for shares. McEwen will serve as a strategic advisor to the management of Rubicon for a minimum period of two years.”
I have had my eye on Rubicon Minerals Corp. for the past four years, and had recently tripled our position in mid-February, based on my belief in the company’s strong fundamentals. In response to the news today, I have tripled our position again.
What are Rubicon’s fundamental strengths?
Let me borrow again from the press release:
“Rubicon Minerals currently controls 180,000 acres of prime exploration ground in the heart of the prolific Red Lake gold camp of Ontario, home of Goldcorp's Red Lake Mine which is one of the richest gold mines in the world. During (Mr. McEwen's) tenure at the helm of Goldcorp, that company realized spectacular growth from a market capitalization of $50 million to over $7.0 billion following discovery of the High Grade Zone. Goldcorp has reported that this zone currently has a Proven and Probable reserve of 1.63 million tonnes grading 83.4 g/t gold or 4.37 million ounces of gold as of December 31, 2005 from a total reserve base of 8.34 million tonnes grading 23.75 g/t gold or 6.37 million ounces of gold.
“McEwen said: ‘I am excited to be back in Red Lake and to be involved in the creation of a new Rubicon which will have a great combination of properties in the low-risk North American gold districts of Red Lake, Alaska and Nevada. It will also have a strong cash position that will be used to carry out aggressive exploration programs. The new Rubicon represents a personal investment in one of North America's premier exploration companies.’
“The land package being acquired by the new Rubicon includes significant land holdings in Alaska consisting of approximately 513,000 acres around the Pogo Mine of Teck-Cominco/Sumitomo, which is entering commercial production and is expected to produce between 350,000 and 500,000 ounces of gold annually over a 10 year mine life. With this acquisition, the new Rubicon will become the largest land holder in the Pogo district and one of the largest land holders in Alaska. Rubicon has also agreed to acquire from Lexam Explorations Inc. approximately 225,000 acres of its highly prospective gold exploration properties in Elko County, northeastern Nevada.
“David Adamson, President and CEO of Rubicon said: ‘We are excited to welcome Rob back to Red Lake and look forward to working with him to create what we think will be the "go-to" North American exploration company. With the Alaska and Nevada assets added to our Red Lake portfolio and through our financial strength, the new Rubicon is aimed at attracting investors looking for exposure to high quality exploration in district-scale, politically stable environments.’”
I recognize that you could read the press release for yourself, and also that the above is intended to be promotional literature.
But let’s read between the lines here.
Northwest Ontario has been an economically depressed region since the long-faded 1960’s boom in forestry and mining. We have entirely missed out on the dramatic period of North American growth from 1980 through the present. Northwest Ontario is a sleepy little corner of the world.
For the duration of this decade, our primary news in Northwest Ontario has been of the declining forestry industry, as massive new mills have been established in Asia to pursue expanding markets there, and North American mills have been dismantled. Paper mill and saw mill closures and production cuts and reports of the resultant economic damage have been the primary theme of news coverage in this region throughout the new millennium.
The return of Mr. McEwen to Red Lake is a signal that the fortunes of Northwest Ontario are now turning.
Of course, one swallow doesn't make a summer, but Mr. McEwen's return is a signal event with respect to the focus of national and international interest in mining development in the Red Lake region. (In Kenora, we are about 3 hours southwest of Red Lake.)
What are the implications?
Expect increased investment in other mining projects in Red Lake and Northwest Ontario. Along with that, expect a gradual migration of capital investment, and with it, new job opportunities, to our region.
If I am correct that we are at the mere dawning of a new multi-decade bull market in precious metal mining, then expect that the seemingly moribund and long-forgotten Northwest Ontario region might again become a national and international hotspot for capital investment and economic activity generally.
Like it or dislike it (it will bring new problems for sure), think of Northwest Ontario as a soon-to-be booming international destination for the precious metal mining sector.
By the way, here’s another consideration.
Due to global instability, which I personally attribute in large part to the accumulating adverse influence of excess monetary liquidity, many regions of our globe are becoming unsafe for investment. In all likelihood, that will not be the case in Northwest Ontario, and that is another advantage for our region.
And a note for the young people: You had better start studying geology, engineering, administration and mechanics, because you will be in demand to fill the new jobs which will be emerging in the Northwest Ontario precious metal mining sector.
A closing thought: In the long run, the value of Rubicon Minerals will hinge on how much gold can be discovered and mined. We don't yet know how much gold that will be. In the field of mining exploration, the odds are almost always against the explorer.
But in mining, as in life, you only discover what you search for. Mr. McEwen’s interest will no doubt lead to an acceleration in the pace of exploration in Red Lake. And for the Northwest Ontario economy, that is a good thing.
For now, let’s just speculate that accelerated exploration does lead to accelerated gold mining along the Red Lake-Musselwhite trend. In that case, I'll plan to meet you in black tie and tails at the McEwen Centre for the Performing Arts in Red Lake on February 26, 2030 (I'll be a sprightly 81 as of that date!). See you there!
Sunday, February 25, 2007
Why?
25 February 2007
Why does the world become a messy, confusing and dangerous place?
Why can’t we all just get along?
What makes people capable of acting with patent disregard for the dignity, autonomy and sanctity of life of their neighbours?
Conversely, what makes it possible for humans to act in a generous, empathetic and self-sacrificing manner?
As I am sure you are well aware, there are no simple answers to these fundamental questions.
However, let me put forward a few simple ideas to spark your own activity with respect to addressing and resolving questions of this kind.
The fundamental constraint of life is that we are limited and mortal. If we exert effort to accomplish some things, we must forgo effort to accomplish other things. Though our efforts may then prove more or less productive, we are unlikely to accomplish aims towards which we do not direct our actions.
The ultimate result of all of our effort, at the personal level, is that we will die and others will carry on after we are gone. What will remain will be our impact on others.
Due to our biological – and some would say spiritual – nature, humans are capable of bonding. That is, we act in ways which affect our fellow humans, and they respond to those actions. The progress of these interactions over time creates strong or weak psychological connections with others.
We act socially, and we are interested in the social consequences of our actions, which are highly salient to us. We are constructed this way.
Governing all of our behaviours are the emotional systems of our human brains. Emotions range from intense to minimal, and from pleasant/desirable/euphoric to aversive/unmanageable/overwhelming.
Our personal/private and social/interpersonal effectiveness broadly governs our lives, and shapes the quality of our emotional experiences.
Both positive and negative emotions can lead to prosocial or antisocial behaviours.
Our social experiences will powerfully influence our emotional state, and the social consequences of our actions will shape the direction of evolution of our personal emotional experience. But ultimately, we will engage in more or less of a particular type of behaviour based on its personal emotional consequences for us.
Now this matter is somewhat complicated as well, because we do not seek emotional states which are pleasurable so much as emotional states which are meaningful.
For example, if I have been raised by a violent father, and if I have daily witnessed him exercising violence to bring other family members into submission, and if I observe him responding with pleasure to his capacity to exercise power and control over the members of my family, then my own increasing exercise of such powerful behaviours will also begin to generate emotions which are meaningful to me, some of them pleasant and some of them not, but all of them desirable.
(By the way, the above is an example. I was raised by a man who was incredibly tolerant, peaceful and nonviolent.)
Similarly, if I have been raised by a mother who is highly attentive to my own emotional states, who treats me and my emotions as important, and who demonstrates caring and empathetic behaviour towards others, then I am more likely to find meaning in relatedness and mutual aid.
(In this latter case, I am describing my own experience. My mother was a person with a seemingly infinite reserve of empathy and emotional availability.)
Therefore, when we observe behaviours in ourselves or in others, the question we must ask is, “What are the emotions associated with that behavioural pattern, what is their meaning, how was the meaning acquired, and how can the meaning be changed?”
In short, engagement in the process of asking and answering this simple series of questions is how we can get along.
Why does the world become a messy, confusing and dangerous place?
Why can’t we all just get along?
What makes people capable of acting with patent disregard for the dignity, autonomy and sanctity of life of their neighbours?
Conversely, what makes it possible for humans to act in a generous, empathetic and self-sacrificing manner?
As I am sure you are well aware, there are no simple answers to these fundamental questions.
However, let me put forward a few simple ideas to spark your own activity with respect to addressing and resolving questions of this kind.
The fundamental constraint of life is that we are limited and mortal. If we exert effort to accomplish some things, we must forgo effort to accomplish other things. Though our efforts may then prove more or less productive, we are unlikely to accomplish aims towards which we do not direct our actions.
The ultimate result of all of our effort, at the personal level, is that we will die and others will carry on after we are gone. What will remain will be our impact on others.
Due to our biological – and some would say spiritual – nature, humans are capable of bonding. That is, we act in ways which affect our fellow humans, and they respond to those actions. The progress of these interactions over time creates strong or weak psychological connections with others.
We act socially, and we are interested in the social consequences of our actions, which are highly salient to us. We are constructed this way.
Governing all of our behaviours are the emotional systems of our human brains. Emotions range from intense to minimal, and from pleasant/desirable/euphoric to aversive/unmanageable/overwhelming.
Our personal/private and social/interpersonal effectiveness broadly governs our lives, and shapes the quality of our emotional experiences.
Both positive and negative emotions can lead to prosocial or antisocial behaviours.
Our social experiences will powerfully influence our emotional state, and the social consequences of our actions will shape the direction of evolution of our personal emotional experience. But ultimately, we will engage in more or less of a particular type of behaviour based on its personal emotional consequences for us.
Now this matter is somewhat complicated as well, because we do not seek emotional states which are pleasurable so much as emotional states which are meaningful.
For example, if I have been raised by a violent father, and if I have daily witnessed him exercising violence to bring other family members into submission, and if I observe him responding with pleasure to his capacity to exercise power and control over the members of my family, then my own increasing exercise of such powerful behaviours will also begin to generate emotions which are meaningful to me, some of them pleasant and some of them not, but all of them desirable.
(By the way, the above is an example. I was raised by a man who was incredibly tolerant, peaceful and nonviolent.)
Similarly, if I have been raised by a mother who is highly attentive to my own emotional states, who treats me and my emotions as important, and who demonstrates caring and empathetic behaviour towards others, then I am more likely to find meaning in relatedness and mutual aid.
(In this latter case, I am describing my own experience. My mother was a person with a seemingly infinite reserve of empathy and emotional availability.)
Therefore, when we observe behaviours in ourselves or in others, the question we must ask is, “What are the emotions associated with that behavioural pattern, what is their meaning, how was the meaning acquired, and how can the meaning be changed?”
In short, engagement in the process of asking and answering this simple series of questions is how we can get along.
A Libertarian Analysis of the Left-Right Debate
25 February 2007
While I am not a card-carrying libertarian, I share with this group a fundamental optimism about the power of free markets to unleash personal and social creativity and to advance individual and collective liberty.
Murray Rothbard, formerly a professor at the University of Nevada, and a fellow of the Mises Institute, was quite perceptive about some of the less obvious dynamics in the left-right debate.
Let me offer an excerpt from his article analyzing “Left and Right: The Prospects for Liberty:”
“We are now in a position to apply our analysis to the American scene. Here we encounter a contrasting myth about recent American history which has been propagated by current conservatives and adopted by most American libertarians. The myth goes approximately as follows: America was, more or less, a haven of laissez-faire until the New Deal; then Roosevelt, influenced by Felix Frankfurter, the Intercollegiate Socialist Society, and other "Fabian" and Communist "conspirators," engineered a revolution which set America on the path to Socialism, and, further on, beyond the horizon, to Communism. The present-day libertarian who adopts this or a similar view of the American experience, tends to think of himself as an "extreme right-winger"; slightly to the left of him, then, lies the Conservative, to the left of that the middle-of-the road, and then leftward to Socialism and Communism. Hence, the enormous temptation for some libertarians to red-bait; for, since they see America as drifting inexorably leftward to Socialism and therefore to Communism, the great temptation is for them to overlook the intermediary stages and tar all of their opposition with the hated Red brush….
“Thus, the New Deal was not a qualitative break from the American past; on the contrary, it was merely a quantitative extension of the web of State privilege that had been proposed and acted upon before: in Hoover's Administration, in the war collectivism of World War I, and in the Progressive Era. The most thorough exposition of the origins of State monopoly capitalism, or what he calls "political capitalism," in the U.S. is found in the brilliant work of Dr. Gabriel Kolko. In his Triumph of Conservatism, Kolko traces the origins of political capitalism in the "reforms" of the Progressive Era. Orthodox historians have always treated the Progressive period (roughly 1900-1916) as a time when free-market capitalism was becoming increasingly "monopolistic"; in reaction to this reign of monopoly and big business, so the story runs, altruistic intellectuals and far-seeing politicians turned to intervention by the government to reform and regulate these evils. Kolko's great work demonstrates that the reality was almost precisely the opposite of this myth. Despite the wave of mergers and trusts formed around the turn of the century, Kolko reveals, the forces of competition on the free market rapidly vitiated and dissolved these attempts at stabilizing and perpetuating the economic power of big business interests. It was precisely in reaction to their impending defeat at the hands of the competitive storms of the market that business turned, increasingly after the 1900's, to the federal government for aid and protection. In short, the intervention by the federal government was designed, not to curb big business monopoly for the sake of the public weal, but to create monopolies that big business (as well as trade associations and smaller business) had not been able to establish amidst the competitive gales of the free market. Both Left and Right have been persistently misled by the notion that intervention by the government is ipso facto leftist and anti-business. Hence the mythology of the New-Fair Deal-as-Red that is endemic on the Right. Both the big businessmen, led by the Morgan interests, and Professor Kolko almost uniquely in the academic world, have realized that monopoly privilege can only be created by the State and not as a result of free market operations."
If this interests you, click on the link, and read more.
While I am not a card-carrying libertarian, I share with this group a fundamental optimism about the power of free markets to unleash personal and social creativity and to advance individual and collective liberty.
Murray Rothbard, formerly a professor at the University of Nevada, and a fellow of the Mises Institute, was quite perceptive about some of the less obvious dynamics in the left-right debate.
Let me offer an excerpt from his article analyzing “Left and Right: The Prospects for Liberty:”
“We are now in a position to apply our analysis to the American scene. Here we encounter a contrasting myth about recent American history which has been propagated by current conservatives and adopted by most American libertarians. The myth goes approximately as follows: America was, more or less, a haven of laissez-faire until the New Deal; then Roosevelt, influenced by Felix Frankfurter, the Intercollegiate Socialist Society, and other "Fabian" and Communist "conspirators," engineered a revolution which set America on the path to Socialism, and, further on, beyond the horizon, to Communism. The present-day libertarian who adopts this or a similar view of the American experience, tends to think of himself as an "extreme right-winger"; slightly to the left of him, then, lies the Conservative, to the left of that the middle-of-the road, and then leftward to Socialism and Communism. Hence, the enormous temptation for some libertarians to red-bait; for, since they see America as drifting inexorably leftward to Socialism and therefore to Communism, the great temptation is for them to overlook the intermediary stages and tar all of their opposition with the hated Red brush….
“Thus, the New Deal was not a qualitative break from the American past; on the contrary, it was merely a quantitative extension of the web of State privilege that had been proposed and acted upon before: in Hoover's Administration, in the war collectivism of World War I, and in the Progressive Era. The most thorough exposition of the origins of State monopoly capitalism, or what he calls "political capitalism," in the U.S. is found in the brilliant work of Dr. Gabriel Kolko. In his Triumph of Conservatism, Kolko traces the origins of political capitalism in the "reforms" of the Progressive Era. Orthodox historians have always treated the Progressive period (roughly 1900-1916) as a time when free-market capitalism was becoming increasingly "monopolistic"; in reaction to this reign of monopoly and big business, so the story runs, altruistic intellectuals and far-seeing politicians turned to intervention by the government to reform and regulate these evils. Kolko's great work demonstrates that the reality was almost precisely the opposite of this myth. Despite the wave of mergers and trusts formed around the turn of the century, Kolko reveals, the forces of competition on the free market rapidly vitiated and dissolved these attempts at stabilizing and perpetuating the economic power of big business interests. It was precisely in reaction to their impending defeat at the hands of the competitive storms of the market that business turned, increasingly after the 1900's, to the federal government for aid and protection. In short, the intervention by the federal government was designed, not to curb big business monopoly for the sake of the public weal, but to create monopolies that big business (as well as trade associations and smaller business) had not been able to establish amidst the competitive gales of the free market. Both Left and Right have been persistently misled by the notion that intervention by the government is ipso facto leftist and anti-business. Hence the mythology of the New-Fair Deal-as-Red that is endemic on the Right. Both the big businessmen, led by the Morgan interests, and Professor Kolko almost uniquely in the academic world, have realized that monopoly privilege can only be created by the State and not as a result of free market operations."
If this interests you, click on the link, and read more.
Airport Security
25 February 2007
I have a personal problem with the new security procedures at American Airports.
In response to the emerging threat of Islamic extremism, revised airport security measures have been adopted which include detailed inspection of randomly selected passengers.
Because our social affairs are governed by political correctness, we cannot systematically inspect those who are at highest risk of engaging in terrorist activities. The process must be random to demonstrate that our society is a fair one.
As my wife is white, blond and female, she has been stopped routinely for these more thorough searches. Perhaps it is a random occurrence that she has been targeted for this particular procedure, but I think not.
What is going on? In our effort to be “fair,” we must inspect individuals who bear no resemblance at all to the young Islamic males who are most likely to be engaged in terrorist activity.
If the matter were not so serious, our systemic response would seem laughable, and perhaps I would be best off to accept it in this way.
I confess that I can barely contain my rage when my wife is targeted for such inspections while much more likely suspects walk on by, and I recognize this as a fault on my part. It is a certainty that I am over-reacting on this particular issue – I recognize that my emotional responses are out of proportion to the actual circumstances.
It is in fact very easy to step on others’ toes, and it is equally easy to misinterpret such transgressions as acts of racial or ethnic prejudice (that is, as “racial profiling”).
If we were to inspect only young Islamic males at our airports, this would reflect a bias on our part which terrorists would certainly be determined to thwart and also to exploit by recruiting unlikely suspects to carry out their missions.
Fair enough.
In fact, there are converts from all racial and ethnic groups to Islam, and most of us will recall that John Walker Lindh, an American from California, fought alongside the Taliban – and against the United States and Canada – in the original Afghan Conflict. The singer Cat Stevens (Yusuf Islam) is now a prominent British Muslim. Several of the recently arrested southern Ontario suspects were Hindus who converted to Islam.
So it is not an impossible stretch of the imagination that my wife could be an Islamic extremist, sympathizer or other variety of evildoer. When one thinks of it logically, if we are to do airport searches, such truly random procedures actually do make strategic sense, initially incomprehensible though they may seem.
I have some confidence and encouragement due to our recent success in capturing the large-scale southern Ontario terrorist ring in 2006. If our surveillance systems are in fact as effective as they now appear, I would hope that in most cases terrorist suspects will be apprehended well before their arrival at a Canadian airport to carry out a terrorist mission.
I cannot fight and win every battle, and this is one I will concede.
Let the airport security inspectors search me or my blonde, fair-skinned wife, or any of us at all for that matter – on the off chance that persons who might not initially appear to be so could in fact be Islamic terrorists or sympathizers with their cause.
The more we “profile” passengers in conducting such searches, the more likely it is that our enemies will recruit sympathizers who do not match our profiles in any case.
Let us just hope and pray, however, that our covert surveillance activities are less politically correct than our practices at the airport. If I were to learn that our covert surveillance teams were giving equal opportunity to white blonde female terrorist suspects, it is at this point that I would become genuinely fearful.
I have a personal problem with the new security procedures at American Airports.
In response to the emerging threat of Islamic extremism, revised airport security measures have been adopted which include detailed inspection of randomly selected passengers.
Because our social affairs are governed by political correctness, we cannot systematically inspect those who are at highest risk of engaging in terrorist activities. The process must be random to demonstrate that our society is a fair one.
As my wife is white, blond and female, she has been stopped routinely for these more thorough searches. Perhaps it is a random occurrence that she has been targeted for this particular procedure, but I think not.
What is going on? In our effort to be “fair,” we must inspect individuals who bear no resemblance at all to the young Islamic males who are most likely to be engaged in terrorist activity.
If the matter were not so serious, our systemic response would seem laughable, and perhaps I would be best off to accept it in this way.
I confess that I can barely contain my rage when my wife is targeted for such inspections while much more likely suspects walk on by, and I recognize this as a fault on my part. It is a certainty that I am over-reacting on this particular issue – I recognize that my emotional responses are out of proportion to the actual circumstances.
It is in fact very easy to step on others’ toes, and it is equally easy to misinterpret such transgressions as acts of racial or ethnic prejudice (that is, as “racial profiling”).
If we were to inspect only young Islamic males at our airports, this would reflect a bias on our part which terrorists would certainly be determined to thwart and also to exploit by recruiting unlikely suspects to carry out their missions.
Fair enough.
In fact, there are converts from all racial and ethnic groups to Islam, and most of us will recall that John Walker Lindh, an American from California, fought alongside the Taliban – and against the United States and Canada – in the original Afghan Conflict. The singer Cat Stevens (Yusuf Islam) is now a prominent British Muslim. Several of the recently arrested southern Ontario suspects were Hindus who converted to Islam.
So it is not an impossible stretch of the imagination that my wife could be an Islamic extremist, sympathizer or other variety of evildoer. When one thinks of it logically, if we are to do airport searches, such truly random procedures actually do make strategic sense, initially incomprehensible though they may seem.
I have some confidence and encouragement due to our recent success in capturing the large-scale southern Ontario terrorist ring in 2006. If our surveillance systems are in fact as effective as they now appear, I would hope that in most cases terrorist suspects will be apprehended well before their arrival at a Canadian airport to carry out a terrorist mission.
I cannot fight and win every battle, and this is one I will concede.
Let the airport security inspectors search me or my blonde, fair-skinned wife, or any of us at all for that matter – on the off chance that persons who might not initially appear to be so could in fact be Islamic terrorists or sympathizers with their cause.
The more we “profile” passengers in conducting such searches, the more likely it is that our enemies will recruit sympathizers who do not match our profiles in any case.
Let us just hope and pray, however, that our covert surveillance activities are less politically correct than our practices at the airport. If I were to learn that our covert surveillance teams were giving equal opportunity to white blonde female terrorist suspects, it is at this point that I would become genuinely fearful.
Friday, February 23, 2007
Security Certificates
23 February 2007
OK. Let’s say it now. All together. There is an elephant in the living room.
Canada's security services have demonstrated one of the most enviable records in the western world in the protection of our citizenry from terrorist activity, with the recent arrest of 17 terrorist suspects in the Toronto area. Yet, in a manner that could perhaps unfold only in Canada, the citizens of our country are now preoccupied with the process by which we safeguard the rights of suspected terrorists, and there is much recrimination directed towards our national government and security services. We seem unable to discuss the fact that a terrorist plot has been narrowly averted which would have brought grief to hundreds of Canadian families.
Let me for one offer a voice of gratitude to our security services for their recent accomplishment.
And what again was that accomplishment? More than 400 police officers conducted a series of raids in southern Ontario on June 2-3, 2006, arresting 17 terrorist suspects. Evidence was brought forward that the plans of these evildoers were far-reaching, with targets including the Parliament Buildings in Ottawa, the CBC Broadcast Centre and the CSIS office in Toronto, and an unspecified military installation. The amount of explosives being accumulated exceeded by several times the quantity used to accomplish the Oklahoma City bombing.
Our police officers and security personnel have just saved the lives of hundreds and averted the injury and permanent disability of perhaps thousands of Canadians. Though it has hardly been discussed, and no honour seems to have been brought forward for those who have accomplished this feat, let me say, more power to them. Job well done!.
Let me now turn to today's topic of security certificates.
The Supreme Court ruled today that Canada’s system of security certificates is unconstitutional. Let us not forget that they also agreed that some system must exist for the assurance of national security and for the preservation of the confidentiality of intelligence-based information.
Are the men presently detained under security certificates guilty of terrorist conspiracy, actions and/or crimes? I have no idea. I haven't seen the evidence either.
But here is what I do know:
1. Canada’s system of civil and criminal law is predicated on the notion that citizens desire to participate in and at least cooperate with, if not contribute to, civil society.
2. Our system does not work particularly well for individuals who have no commitment to the health and wellbeing of our society, including those who wish to subvert or destroy it.
3. There are individuals – in fact, many of them – whose heart’s desire is to cripple and ultimately demolish Western society, and the means to that end includes the formulation and execution of detailed plans to kill and maim citizens of Canada by the hundreds or thousands. We now know that the implementation of the plan which was averted in June 2006 was well-advanced, as I have discussed above. Most of us have probably given scant thought to Ahmed Ressam, the Canadian-based criminal, terrorist trainee and Millennium bomber, who was halted when importing massive amounts of explosives into the United States with the intention of blowing up Los Angeles International Airport shortly prior to the onset of the new millennium. We also forget that Ressam warned of Osama bin Laden's plot to attack the United States, and that President Bush was briefed on this matter on August 6, 2001.
4. Would that this were a paranoid fantasy, but it is in fact a daily news item, in Canada, as around the world. Thanks to the alertness of Canadian security personnel, the most recent known terrorist plot in Canada appears to have been averted. But one need only follow the daily news to appreciate that terrorism is a rising global phenomenon, and that terrorists are operating in Canada as well as in many other regions of the world.
5. If we did not have a system for the surveillance of terrorist activities and the apprehension of terrorists, the balance of probabilities in my view is that hundreds of Canadians would already have been killed, and probably thousands more permanently injured and disabled – in ways that are horrific to contemplate – based on what we already know about terrorist activity in Canada.
6. Granted, the so-called “war on terror” appears now to be making the problem worse by spurring the conscription of new recruits to terrorism by the dozens or hundreds daily in the Islamic world, including among Islamic populations in Canada and other western nations. The west is without a strategy in its encounters with Islamic extremism, and we are undoubtedly our own worst enemy. We cannot forget this fact as we move forward to combat terrorism.
We do not know if the particular individuals detained are or are not terrorists. There are probably some sound reasons why the authorities charged with our protection chose to confine these particular persons, though the possibility of error is not without precedent, as seems already to have been the case with Meher Arar. The presumption of innocence is a cornerstone of the criminal justice system in a civil society.
The Supreme Court has determined that a process must be developed by which the evidence against these particular individuals can be reviewed. However, the Supreme Court has not ruled that we should abandon efforts to protect society from the depredations of those who plot and conspire to cause mayhem and terror amongst our people.
So, what do we all know?
1. Terrorists are different than the great majority of Canadians in one fundamental respect. They reject pluralism. There is no wish nor desire that we “all” get along. From the standpoint of the terrorist worldview, virtually all of us deserve to be crushed and to die, and it is their chosen duty and desire to carry out the crushing and the killing.
2. Terrorists globally exist by the hundreds of thousands, and they operate within Canada as well as abroad. They have already killed and maimed tens of thousands, and plan to murder and injure many more. Their cause is growing, they are feeling strong, and they are actively and aggressively acquiring new recruits by a variety of methods, none of which is conscionable within the pluralistic values and laws of Canadian society.
3. Terrorists are trained to lie and deceive. A terrorist who is apprehended is unlikely to confess to his or her actual allegiances and intentions, and the primary reason for this is quite elementary. To acknowledge his or her role in a terrorist organization, a member would be forced into compromising the identities and plans of his/her compatriots. Let us recall that it is to his and her colleagues that the terrorist is loyal – and certainly not to our collective vision of a pluralistic, tolerant, fair and civil society.
4. The individuals presently detained may or may not be terrorists. The Supreme Court has determined that an improved process will be required to answer this question.
5. The development of such a process is a matter of critical – life or death – importance for Canadians.
6. A new (generalized) process will now be required to make the determination as to the terrorist status of suspicious individuals going forward.
One boundary defining this process is familiar, even reflexive, to our habitual way of thinking as Canadians. It would be very costly at the individual level to err in finding these particular persons guilty if they are innocent.
However, the contrary boundary in this dilemma is new in Canadian experience. In the instance of detecting and preventing terrorism, it would be unimaginably costly to allow even one Islamic extremist to go free, given that the plans of Islamic terrorists have been writ large in world headlines since the original bombing of the World Trade Centre in the early 1990s. These people have made no secret of what they are about. Driven by a new cult of hate, they choose to despise us and thus desire our unalloyed harm. Whether they can or cannot overthrow our society or subvert our way of life, even one terrorist can kill or injure hundreds or thousands.
To the democratic conscience, therefore, the risks are extraordinarily high on both sides of the security certificate debate.
The logic of terrorism is a bizarre and unbalanced calculus with which we have little relevant historic experience (in Canada) to guide us.
Historically, Canadians as individuals or in small groups have not engaged in plans to kill and maim their neighbours en masse and indiscriminately, targeting citizens randomly precisely because of their collective innocence.
There is something distinctly disturbing and foreign to our manner of thinking about the operation of the terrorist mind. We have so little experience with this malignant and alien mindset that we literally lack the words and language required even to discuss it, let alone to formulate a coherent response to it.
(Canadians in the recent past feared that Japanese Canadians would engage in terrorist activities during the Second World War. However, this paranoid fantasy was just that, and the over-reaction of internment of Japanese Canadians at the time was out of all proportion to the evidence at hand. Our current dilemma is quite the opposite of that encountered during the second Great War. We now know all too well that terrorists are operating malevolently in our midst, yet we can no longer abide the fear-driven response of the containment of an ethnic population – and rightly so.)
The familiar democratic adage is that it is better that one hundred guilty men go free than that one innocent man be condemned. In this instance, that principle will be our undoing. To permit one hundred terrorists to go free to assure the protection of the one falsely accused innocent man is a risk our society truly cannot abide.
A new principle, or set of principles is thus required, principles that still balance individual against collective rights, and which certainly do not bow to racism, but which recognize that a new level of collective threat is now being encountered in Islamic extremism – and let us call it what it is.
Our present difficulty is that we are able to converse only in terms of the threat to individual rights, and we have no acceptable language for the rights of the Canadian collective.
I would like to suggest that in our search for the development of new mental tools to address this dilemma, it is perhaps now time for us to look eastwards to our oriental neighbours, who have many millennia of experience in the development of collective values, principles and manners of thinking and speaking in the arena of human rights and responsibilities.
I am confident that the west well leads the east in its articulation of individual human rights, but I now fear that we greatly lag the east in our articulation of human responsibilities to the collective, and thus of collective rights.
We simply do not know how to talk about accountability, rights and responsibilities within this new framework.
We have been “forced to fit” into a strange and unknown world of new possibilities and consequences by the rise of Islamic terrorism. At this time, we are without a framework. The framework of laws and values which we carry from our past will certainly endanger us if we cannot free our minds of it – though paradoxically we must still adhere to the validity of its most fundamental principles.
A new process is being born, and it is agonizing to us to participate in its birth.
Our first response will be to recoil from the agony of the painful decisions we face, but the cost of retreat at this point will be our certain undoing. So we must somehow go forward into this unwelcome, undesired and unchosen venture.
Once again, I cannot at this time even imagine the precise answers to the dilemma that I have framed, but my instinct is that we have much to learn, and that for the sake of our survival as a society, we had better go about learning it expeditiously.
But let me conclude with this idea. The resolution of the problem of security certificates will fail if it becomes lodged at the level of a discussion of individual human rights – or mired in a misleading debate about the possibilities of a new racism.
We must somehow discover a means by which issues of individual rights and responsibilities can be framed against a background of collective accountability.
What do I mean?
I mean that we must develop a language to enable us to discuss our present accountability to the not-yet inured, maimed and killed who are slated to suffer and die through the Canadian expression of the global terror agenda.
If this new dialogue framed in a new language cannot take place, I fear that it is then a certainty that hundreds if not thousands of Canadians will needlessly suffer and die at the hands of the terrorist insurgency which is already known to be at work in Canada.
The particular individuals concerned in the present security certificate debate have important rights under Canadian law, and therefore require juridical protection.
Their innocence is possible, and it is thus a presumption.
However innocent or guilty these particular individuals are eventually found to be, I am certain of one thing, and that is, at this historic juncture, the people of Canada are more innocent still.
I am convinced that we have not yet grasped what is arrayed against us. We do not see what is coming, and we will have difficulty comprehending it, even when it arrives in all its heartless force and brutal disregard of every principle that we as Canadians hold dear.
Let us then not shrink from the duty of parsing the responsibility for the assurance of justice in the matter of security certificates in such a way that sheer disaster will not be unleashed upon our land as a foreordained consequence of our inability to hold terrorists – whoever they may eventually be discovered to be – collectively accountable to the people of Canada as a whole.
And above all, let us be ever mindful of our own accountability as citizens and collective decision-makers to the not-yet-harmed as we muddle through the security certificate debate.
OK. Let’s say it now. All together. There is an elephant in the living room.
Canada's security services have demonstrated one of the most enviable records in the western world in the protection of our citizenry from terrorist activity, with the recent arrest of 17 terrorist suspects in the Toronto area. Yet, in a manner that could perhaps unfold only in Canada, the citizens of our country are now preoccupied with the process by which we safeguard the rights of suspected terrorists, and there is much recrimination directed towards our national government and security services. We seem unable to discuss the fact that a terrorist plot has been narrowly averted which would have brought grief to hundreds of Canadian families.
Let me for one offer a voice of gratitude to our security services for their recent accomplishment.
And what again was that accomplishment? More than 400 police officers conducted a series of raids in southern Ontario on June 2-3, 2006, arresting 17 terrorist suspects. Evidence was brought forward that the plans of these evildoers were far-reaching, with targets including the Parliament Buildings in Ottawa, the CBC Broadcast Centre and the CSIS office in Toronto, and an unspecified military installation. The amount of explosives being accumulated exceeded by several times the quantity used to accomplish the Oklahoma City bombing.
Our police officers and security personnel have just saved the lives of hundreds and averted the injury and permanent disability of perhaps thousands of Canadians. Though it has hardly been discussed, and no honour seems to have been brought forward for those who have accomplished this feat, let me say, more power to them. Job well done!.
Let me now turn to today's topic of security certificates.
The Supreme Court ruled today that Canada’s system of security certificates is unconstitutional. Let us not forget that they also agreed that some system must exist for the assurance of national security and for the preservation of the confidentiality of intelligence-based information.
Are the men presently detained under security certificates guilty of terrorist conspiracy, actions and/or crimes? I have no idea. I haven't seen the evidence either.
But here is what I do know:
1. Canada’s system of civil and criminal law is predicated on the notion that citizens desire to participate in and at least cooperate with, if not contribute to, civil society.
2. Our system does not work particularly well for individuals who have no commitment to the health and wellbeing of our society, including those who wish to subvert or destroy it.
3. There are individuals – in fact, many of them – whose heart’s desire is to cripple and ultimately demolish Western society, and the means to that end includes the formulation and execution of detailed plans to kill and maim citizens of Canada by the hundreds or thousands. We now know that the implementation of the plan which was averted in June 2006 was well-advanced, as I have discussed above. Most of us have probably given scant thought to Ahmed Ressam, the Canadian-based criminal, terrorist trainee and Millennium bomber, who was halted when importing massive amounts of explosives into the United States with the intention of blowing up Los Angeles International Airport shortly prior to the onset of the new millennium. We also forget that Ressam warned of Osama bin Laden's plot to attack the United States, and that President Bush was briefed on this matter on August 6, 2001.
4. Would that this were a paranoid fantasy, but it is in fact a daily news item, in Canada, as around the world. Thanks to the alertness of Canadian security personnel, the most recent known terrorist plot in Canada appears to have been averted. But one need only follow the daily news to appreciate that terrorism is a rising global phenomenon, and that terrorists are operating in Canada as well as in many other regions of the world.
5. If we did not have a system for the surveillance of terrorist activities and the apprehension of terrorists, the balance of probabilities in my view is that hundreds of Canadians would already have been killed, and probably thousands more permanently injured and disabled – in ways that are horrific to contemplate – based on what we already know about terrorist activity in Canada.
6. Granted, the so-called “war on terror” appears now to be making the problem worse by spurring the conscription of new recruits to terrorism by the dozens or hundreds daily in the Islamic world, including among Islamic populations in Canada and other western nations. The west is without a strategy in its encounters with Islamic extremism, and we are undoubtedly our own worst enemy. We cannot forget this fact as we move forward to combat terrorism.
We do not know if the particular individuals detained are or are not terrorists. There are probably some sound reasons why the authorities charged with our protection chose to confine these particular persons, though the possibility of error is not without precedent, as seems already to have been the case with Meher Arar. The presumption of innocence is a cornerstone of the criminal justice system in a civil society.
The Supreme Court has determined that a process must be developed by which the evidence against these particular individuals can be reviewed. However, the Supreme Court has not ruled that we should abandon efforts to protect society from the depredations of those who plot and conspire to cause mayhem and terror amongst our people.
So, what do we all know?
1. Terrorists are different than the great majority of Canadians in one fundamental respect. They reject pluralism. There is no wish nor desire that we “all” get along. From the standpoint of the terrorist worldview, virtually all of us deserve to be crushed and to die, and it is their chosen duty and desire to carry out the crushing and the killing.
2. Terrorists globally exist by the hundreds of thousands, and they operate within Canada as well as abroad. They have already killed and maimed tens of thousands, and plan to murder and injure many more. Their cause is growing, they are feeling strong, and they are actively and aggressively acquiring new recruits by a variety of methods, none of which is conscionable within the pluralistic values and laws of Canadian society.
3. Terrorists are trained to lie and deceive. A terrorist who is apprehended is unlikely to confess to his or her actual allegiances and intentions, and the primary reason for this is quite elementary. To acknowledge his or her role in a terrorist organization, a member would be forced into compromising the identities and plans of his/her compatriots. Let us recall that it is to his and her colleagues that the terrorist is loyal – and certainly not to our collective vision of a pluralistic, tolerant, fair and civil society.
4. The individuals presently detained may or may not be terrorists. The Supreme Court has determined that an improved process will be required to answer this question.
5. The development of such a process is a matter of critical – life or death – importance for Canadians.
6. A new (generalized) process will now be required to make the determination as to the terrorist status of suspicious individuals going forward.
One boundary defining this process is familiar, even reflexive, to our habitual way of thinking as Canadians. It would be very costly at the individual level to err in finding these particular persons guilty if they are innocent.
However, the contrary boundary in this dilemma is new in Canadian experience. In the instance of detecting and preventing terrorism, it would be unimaginably costly to allow even one Islamic extremist to go free, given that the plans of Islamic terrorists have been writ large in world headlines since the original bombing of the World Trade Centre in the early 1990s. These people have made no secret of what they are about. Driven by a new cult of hate, they choose to despise us and thus desire our unalloyed harm. Whether they can or cannot overthrow our society or subvert our way of life, even one terrorist can kill or injure hundreds or thousands.
To the democratic conscience, therefore, the risks are extraordinarily high on both sides of the security certificate debate.
The logic of terrorism is a bizarre and unbalanced calculus with which we have little relevant historic experience (in Canada) to guide us.
Historically, Canadians as individuals or in small groups have not engaged in plans to kill and maim their neighbours en masse and indiscriminately, targeting citizens randomly precisely because of their collective innocence.
There is something distinctly disturbing and foreign to our manner of thinking about the operation of the terrorist mind. We have so little experience with this malignant and alien mindset that we literally lack the words and language required even to discuss it, let alone to formulate a coherent response to it.
(Canadians in the recent past feared that Japanese Canadians would engage in terrorist activities during the Second World War. However, this paranoid fantasy was just that, and the over-reaction of internment of Japanese Canadians at the time was out of all proportion to the evidence at hand. Our current dilemma is quite the opposite of that encountered during the second Great War. We now know all too well that terrorists are operating malevolently in our midst, yet we can no longer abide the fear-driven response of the containment of an ethnic population – and rightly so.)
The familiar democratic adage is that it is better that one hundred guilty men go free than that one innocent man be condemned. In this instance, that principle will be our undoing. To permit one hundred terrorists to go free to assure the protection of the one falsely accused innocent man is a risk our society truly cannot abide.
A new principle, or set of principles is thus required, principles that still balance individual against collective rights, and which certainly do not bow to racism, but which recognize that a new level of collective threat is now being encountered in Islamic extremism – and let us call it what it is.
Our present difficulty is that we are able to converse only in terms of the threat to individual rights, and we have no acceptable language for the rights of the Canadian collective.
I would like to suggest that in our search for the development of new mental tools to address this dilemma, it is perhaps now time for us to look eastwards to our oriental neighbours, who have many millennia of experience in the development of collective values, principles and manners of thinking and speaking in the arena of human rights and responsibilities.
I am confident that the west well leads the east in its articulation of individual human rights, but I now fear that we greatly lag the east in our articulation of human responsibilities to the collective, and thus of collective rights.
We simply do not know how to talk about accountability, rights and responsibilities within this new framework.
We have been “forced to fit” into a strange and unknown world of new possibilities and consequences by the rise of Islamic terrorism. At this time, we are without a framework. The framework of laws and values which we carry from our past will certainly endanger us if we cannot free our minds of it – though paradoxically we must still adhere to the validity of its most fundamental principles.
A new process is being born, and it is agonizing to us to participate in its birth.
Our first response will be to recoil from the agony of the painful decisions we face, but the cost of retreat at this point will be our certain undoing. So we must somehow go forward into this unwelcome, undesired and unchosen venture.
Once again, I cannot at this time even imagine the precise answers to the dilemma that I have framed, but my instinct is that we have much to learn, and that for the sake of our survival as a society, we had better go about learning it expeditiously.
But let me conclude with this idea. The resolution of the problem of security certificates will fail if it becomes lodged at the level of a discussion of individual human rights – or mired in a misleading debate about the possibilities of a new racism.
We must somehow discover a means by which issues of individual rights and responsibilities can be framed against a background of collective accountability.
What do I mean?
I mean that we must develop a language to enable us to discuss our present accountability to the not-yet inured, maimed and killed who are slated to suffer and die through the Canadian expression of the global terror agenda.
If this new dialogue framed in a new language cannot take place, I fear that it is then a certainty that hundreds if not thousands of Canadians will needlessly suffer and die at the hands of the terrorist insurgency which is already known to be at work in Canada.
The particular individuals concerned in the present security certificate debate have important rights under Canadian law, and therefore require juridical protection.
Their innocence is possible, and it is thus a presumption.
However innocent or guilty these particular individuals are eventually found to be, I am certain of one thing, and that is, at this historic juncture, the people of Canada are more innocent still.
I am convinced that we have not yet grasped what is arrayed against us. We do not see what is coming, and we will have difficulty comprehending it, even when it arrives in all its heartless force and brutal disregard of every principle that we as Canadians hold dear.
Let us then not shrink from the duty of parsing the responsibility for the assurance of justice in the matter of security certificates in such a way that sheer disaster will not be unleashed upon our land as a foreordained consequence of our inability to hold terrorists – whoever they may eventually be discovered to be – collectively accountable to the people of Canada as a whole.
And above all, let us be ever mindful of our own accountability as citizens and collective decision-makers to the not-yet-harmed as we muddle through the security certificate debate.
Tuesday, February 20, 2007
New Motto
20 February 2007
The Utopian Party of Canada now has an offical motto:
"The Utopian Party of Canada: Serving you better to serve yourself."
I hope that all readers will find this new motto clarifying and enlightening.
After all... every party needs a few sound bites!!!
_
The Utopian Party of Canada now has an offical motto:
"The Utopian Party of Canada: Serving you better to serve yourself."
I hope that all readers will find this new motto clarifying and enlightening.
After all... every party needs a few sound bites!!!
_
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