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Calgary & Alberta Economy

I want to be a little optimistic here... Seeing Rubio's media tour on Sunday, I think they (as in the people in the government/administration outside of Trump's direct influence) give him and his people little wins and things to talk about on social media but if push came to shove would not blindly do something catastrophic. They know their career is longer than his term and that this too shall pass.

Follow the money, and today markets were up. So, I'm going with an optimistic approach at this point.
 
CBBarnett said:
The expression that comes to mind here is "the market can stay irrational longer than you can stay solvent."

Only in this case, the US government is the "market" - chaotic, inconsistent and self-harming policies, grabbing heads-of-state by helicopter, flip-flopping on trade and tariffs. These are all concepts of a plan, not a much of a plan in itself, at least not a coherent one that will improve the lives and wealth of people on this continent. The lack of stability can cause tremendous harm and uncertainty in itself, even if 99% of the real harmful stuff never is realized. Whether or not they get the oil or it's even cost-competitive to Canadian oil once all the transportation and infrastructure is required is kind of a secondary, long-term risk (like decarbonization, electric vehicles slowing overall demand globally in the next couple decades).

More immediate risks this Venezuela caper has reminded us is that US bluster, unpredictability and threats of interference in the politics, sovereignty and economies of everyone nearby should taken as a reality and the real problem to mitigate. Eventually economics and rationality might balance things out and calm things down, but we should continue to be planning for a world where irrationality is paramount.
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We don't really have a choice. We can try to export more resources to Asia/Europe but that's about it. We've benefited greatly by our geographic proximity to the US. But we really don't have the technological or industrial edge in any non-resource sectors that can compete and displace competitors in their home market.
 
Mountain Man said:
Trump is the biggest idiot, after the failures in Iraq and Afghanistan, he thinks that he can just assume control of another country and fix all their problems? Venezuela will be an absolute shit show for the next decade, and another decade on top of that if he decides to do something with Columbia. If they get sorted out in a manner that's favourable to the US, they would then need another 20 years to update their infrastructure to effectively export oil to the US. If anything this will raise the price of our oil that I hope we then sell to China. Trump is the biggest POS ever, he's basically as trustworthy as Maduro was!
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I don't like him either but I actually thought the move was pretty smart lol. It increases his leverage against Canada, opens potential control on gold and silver mines in Venezuela and removes Chinese-Russian influence in the Americas. There wasn't much to lose.

I'm not sure what is the plan of the future and if Trump even has one. But they will want to avoid Iraq 2.0 for sure. So probably limit the options at the next elections and make sure the country is safe enough so that the US oil companies can do their work.
 
boreal96 said:
So probably limit the options at the next elections and make sure the country is safe enough so that the US oil companies can do their work.
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If history tells me anything, now is the time when the CIA does their work. I assume any influence will be less overt and more covert. People are talking Iraq; I'm thinking more Afghanistan when they were fighting the Russians.
 
My biggest concern with Venezuela is that Trump seems to have no plan for what the US is actually doing. If Maduro was so bad, why let his successor take over? Is Delcy Rodriguez to Maduro what Maduro was to Chavez? There just doesn't seem to be a plan other than taking 50M barrels of Oil.

As for the risk to Canada, the infrastructure in Venezuela is in terrible shape apparently and will take a long time to rebuild. Hopefully we can significantly diversify away from the US while that happens as it is only logical for the Gulf Coast refineries to use their oil instead of ours.

​

 
Chowda7 said:
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Follow the money, and if the institutional investors are noticing a change. I'm optimistic. Mr. Central Banker might not be so bad.

Mountain Man said:
My biggest concern with Venezuela is that Trump seems to have no plan for what the US is actually doing. If Maduro was so bad, why let his successor take over? Is Delcy Rodriguez to Maduro what Maduro was to Chavez? There just doesn't seem to be a plan other than taking 50M barrels of Oil.

As for the risk to Canada, the infrastructure in Venezuela is in terrible shape apparently and will take a long time to rebuild. Hopefully we can significantly diversify away from the US while that happens as it is only logical for the Gulf Coast refineries to use their oil instead of ours.

​

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I remind myself, three years can feel like a long time but it isn't really that long. As we're finding out, and in reference to the above article, it is hard to turn our big ship around. Venezuela is a long way from a stable asset. Paramilitary groups were on the streets over the last few days making sure everyone is in line, anything outside of a US military operation will keep US investment down. What I suspect the US will do is take the oil Venezuela does export and refine it at the Gulf ports.
 
darwink said:
which cuts off cuba from gasoline. which might be the point?
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Its definitely a big part of it. Controlling the asset is more important to them than immediate use of the asset.

Looking back, I didn't really see the implications of their name change to gulf of America, but given some of the chatter about Cuba and Colombia I think I now understand what the US has in mind..

1737751662002151.jpg
 
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Mountain Man said:
My biggest concern with Venezuela is that Trump seems to have no plan for what the US is actually doing. If Maduro was so bad, why let his successor take over? Is Delcy Rodriguez to Maduro what Maduro was to Chavez? There just doesn't seem to be a plan other than taking 50M barrels of Oil.

As for the risk to Canada, the infrastructure in Venezuela is in terrible shape apparently and will take a long time to rebuild. Hopefully we can significantly diversify away from the US while that happens as it is only logical for the Gulf Coast refineries to use their oil instead of ours.

​

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For now the plan seems to be coerced compliance from existing governments to US interests. If the new president isn't more cooperative the implied threat of an even easier followup raid is there.

Risk of all this to Canada may not be immediate, but mitigating that risk isn't going to be instant either.

I've got a feeling the US will be actively working on VZ fixes before northern gateway 2 gets started, could be a tough race for Canada to win.
 
CalgaryTiger said:
On queue, Carney is off to China next week... We are walking on hot coals no matter what we do here. Getting closer to China is risky all-around but in the short term the Trump admin is impossible to work with.
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One can get close to China without becoming 'integrated'. Purchase agreements, debt financing can enable projects without full-on control. Plus any sales benefit from optionality - everything needs to go on the ocean.

They felt quite burned by Northern Gateway, the gap between rhetroic and the ability to get things done. The scrutiny investments had like the purchase of Nexen.

It is also an opporunity to reset and try for the 'you can integrate freely into the world economy and security system as a rising power, we welcome you, you don't need to do what you might be planning, there is plenty of room for growth'. China is heading for a demographic catastrophe and they only have a small window to apply power in their view, which is very dangerous. If they came around to a view that the option will always be there, they can stop before they make a huge mistake. (right now the situation they're in, it is almost like Germany with the opening of the Kiel Canal - it was viewed at the time as improving Germany's strategic position to such a degree that it made conflict inevitable).
 
darwink said:
China is heading for a demographic catastrophe and they only have a small window to apply power in their view, which is very dangerous. If they came around to a view that the option will always be there, they can stop before they make a huge mistake. (right now the situation they're in, it is almost like Germany with the opening of the Kiel Canal - it was viewed at the time as improving Germany's strategic position to such a degree that it made conflict inevitable).
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Demographic 'crisis' is hugely overblown IMO.

Fewer people, consuming fewer resources, and creating lass pollution isn't a bad thing.

Unless you're an infinite growth indoctrinated economist of course..

In the automation and AI era, the quality of the people becomes a lot more important than the quantity.
 
InfrastructureEnthusiast said:
Demographic 'crisis' is hugely overblown IMO.

Fewer people, consuming fewer resources, and creating lass pollution isn't a bad thing.

Unless you're an infinite growth indoctrinated economist of course..

In the automation and AI era, the quality of the people becomes a lot more important than the quantity.
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The demographics issue isn't about pure numbers but the distribution. When you stop adding young people, the older people don't suddenly all disappear, but the dependence becomes higher and higher. Less people earning income to support an aging population. It won't happen overnight and it's a reality for Japan already, and South Korea, Taiwan, Singapore, etc. in the next century. They will become less influential, like Japan over the 80s to present, but they will still be the largest economy outside of the US.

CalgaryTiger said:
On queue, Carney is off to China next week... We are walking on hot coals no matter what we do here. Getting closer to China is risky all-around but in the short term the Trump admin is impossible to work with.
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I think we have to. More and more with the backwards looking nature of the US, they're invading a country for oil, while China is speeding ahead with domestic AI chips, solar, renewables, etc. It's becoming more unclear who would actually lead the technology race in the next few decades that we should probably diversify our exposure.
 
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