Pen Meets Paper August 17, 2009

Opinion by Helge Nome
I think the time has come to take another look at what has been dubbed "The Great Recession".
We are now officially 20 months into it and many forecasters are predicting that it is over and that the good times will be back shortly. This is entirely in line with what happened after the stock market crash in 1929 during the subsequent recession that became The Great Depression. People did not want to believe that things could get as bad as they did.
There are some other troubling paralells between the 1920ies and what has happened in the world of finance in the last 10+ years: The rules for how you play with money were progressively removed creating a free-for-all casino like environment where all kinds of tricks were used to create money out of nothing. And the outcomes were entirely predictable with the whole house of make-believe coming down around the ears of its inhabitants.
This is exactly what is happening today and there is no end in sight, contrary to popular opinion.
The main receiver of Canada's exports, the United States, in addition to being in a severe recession, is now beginning to restrict imports from the rest of the world, including Canada. The idea, which makes sense from a local American perspective, is to encourage American industries to take up the slack and so preserve American jobs, which in turn maintains the government's tax base.
China, whose leaders are very shrewd, have for some time encouraged its own consumers to buy Chinese products in order to pick up the slack in sales in the U.S. generated by the U.S. recession.
China also owns vast quantities of U.S. Treasury bonds that have been purchased with U.S.dollars from the sale of Chinese consumer products in the U.S., which has resulted in U.S.dollars being recycled back into the U.S. economy.
All this has resulted in Americans being able to live "high on the hog" for a long time and just print some bonds for the Chinese when they needed a new stash of cash. Besides, following WWII, the U.S. Dollar became the world's reserve currency that everybody wanted. In the process, American industry lost its hitherto considerable edge over industries elsewhere, notably in Asia, because Americans were too busy being consumers, rather than producers.
Now they have been locked out in the cold, and we in Canada are riding on their shirt tails, hoping too be tucked in under the coat with them as the weather turns increasingly cold and ugly.
Don't hold your breath. They would just as soon shake us off into the mud while looking after their own interests. And the sooner we get weaned off the U.S. economy, the better.
Who are our next colonial masters going to be? China gobbling up our natural resources and then spitting us out when she has no more use for us?
Or are we going to grow up and become a Real Nation?