Justin Trudeau or Just Inflation?
The worst Prime Minister in Canadian history, edging out his father
Justin Trudeau’s leadership of Canada since 2015 has been a disaster at pretty well every level. His attack on our vital energy industry has contributed to a global energy shortage that pillages the poor in underdeveloped economies and threatens bankruptcy for United Kingdom and European utilities and consumers who now pay the equivalent of almost US$500 a barrel of oil equivalent for natural gas (82 pence per therm equals $82/Mcf or approximately US$500 per barrel on a BTU equivalence basis of 6.1 to 1). Canada’s national debt has skyrocketed to over $1 trillion from about half that when Trudeau was elected in 2015, and our country’s inflation rate is now over 6% at its seasonally adjusted annual rate, the highest in 40 years. The federal debt now amounts to over $24,000 for every Canadian.
The global energy crisis keeps deepening with U.S. President Biden begging third world dictators to pump more oil rather than expand U.S. production and Canada’s energy minister Jonathan Wilkinson promising Canada will assist Europe to deal with the shortage but forced to admit failure to build necessary infrastructure limits Canada’s ability to make any material contribution to Europe’s woes. Short sighted and destructive policies under the Trudeau Liberals have not only damaged the Canadian economy but are now adding to the energy carnage being inflicted on the citizens of our allies. The pretense that CO2 causes climate change is a central plank of the Liberal Party propaganda, and is utter nonsense. CO2 is harmless but the ill-conceived policies of the Liberals are dangerously short-sighted and will not benefit Canada’s now or in the future. For those Canadians enrapt with the crap coming out of Ottawa regarding climate but with even a basic understanding of physics, I have published an earlier article calculating how little “warming” could possibly result from a doubling of atmospheric CO2 levels - almost none.
Trudeau’s inane policies are not limited to climate change nonsense. His government enacted the Impact Assessment Act, a pernicious piece of legislation giving Minister Wilkinson personal and unfettered power to kill any major resource project in our Country on a whim or otherwise. Permit times for exploration remain uncertain according to data published by the Fraser Institute, with the uncertainty a factor in investment decisions by explorers. But exploration rarely leads to production with only about 1 in 6,000 exploration stage companies ever building a mine. Of those that do, the average time from discovery to production is now nearly 30 years.
Liberals tout electric vehicles (EV’s) as a factor in reducing CO2 emissions and have issued policy statements indicating how much government money will be spent to promote EV’s with a target to have half of new light duty vehicles sold in Canada comprise EV’s by 2030, a short 8 years from today. I have no doubt EV’s will be very popular, since they are quieter, faster and less complex to assemble than internal combustion engine (ICE) vehicles. But Trudeau and Wilkinson seem oblivious to the obvious - that EV’s will requrie massive increases in world output of copper, nickel, cobalt, and lithium, among other commodities essential in their production. A combination of complex Impact Assessment Act approval regulations and the long lead time to approve and build a new Canadian mine compels a conclusion that there will be a worldwide shortage of those metals and that Canada will be left behind as global miners ramp up to try to supply the shortage.
It seems inevitable that prices for nickel, copper and cobalt will keep rising, despite already touching record levels. The recent cessation of nickel trading by the London Metal Exchange when nickel prices more than doubled overnight is a canary in the coal mine for metal price volatily exacerbated by Canadian policies that make nonsense seem like brilliance by comparison. I am thankful Canada was stupid enough to elect the Liberals since it has created an extraordinary opportunity for investors to benefit from the artificial shortage of metals, oil & gas that Liberal policies in Canada and Democratic Party policies in United States have done their part in creating. While Canada Pension Plan, the Ontario Teachers Pension Plan and the Caisse de Depot et Placement in Quebec have all made statements to reduce investments in oil & gas companies, the best peforming investment fund in Canada was the Nine Point Partners energy fund managed by Eric Nuttall which showed a blistering gain of 156% in 2021 while those virtue signaling funds struggled to turn in double digit gains (CPP - 20.4%; OTPP - 11.1%; Caisse de Depot - 13.5% ) in markets where the average return for the S&P 500 was about 27%. Why we pay multi-million dollar compensation to the mopes that manage our pension assets when they are so inept is beyond comprehension.
Higher commodity prices, a global energy shortage and excess government debt pave the way for inflation to keep rising (barring a global recession which may well be in the cards). We elected Justin Trudeau but what we got was Justinflation.
We need to get this loser out of Ottawa at the first opportunity and before any more damage is done to our country.