Natural gas prices climb
Demand for natural gas is pushing the price to $13 per million BTUs (British Thermal Units). It’s at its priciest since 2004.
China is using more to produce electricity. Hot weather in western Canada and the United States is driving demand in for air conditioning. Natural gas is often used to produce peak power, when demand soars.
Brazil is suffering a drought, so water levels are low and natural gas is being used to supplement electricity production.
Canada has lots of natural gas, but government restrictions—no pipelines or Liquefied Natural Gas ports—mean it can’t export the stuff.
Inflation
Don’t worry said the New York Times columnist a couple of months ago. Inflation is not a problem. This week American inflation came in at 5.4%. Cars are big drivers of inflation: prices are up because car and truck production is down.
Blame a shortage of computer chips. Democrats say inflation isTrump’s fault. “Basically, international supply chains don’t work very well when the policies of one of the world’s key economies are governed by the whims of a leader who gets his ideas from cable TV,” wrote economist Paul Krugman in the New York Times. Republicans don’t agree. The fault is free money.
“It’s not going to end. They are continuing to flood the economy with more cash,” said Republican congressman Tom Emmer in the Wall Street Journal.
Used car prices
Another driver of US inflation. “Used cars and trucks were 45.2% more expensive in June than they were a year earlier, while new cars were 5.3% pricier,” reports the Wall Street Journal.
People are also taking out long loans to pay for both used and new cars, almost six year terms. Lucky if the used car lasts that long.
An odd economic indicator
The morning train from Toronto to Montreal stops at Brockville, Ontario, where a few cars split off for Ottawa. I always look for how many giant aluminum ingots are sitting on the siding. I have never seen so many as there were on Friday.
Those giant aluminum ingots weigh 35,000 pounds or about 16,000 kilograms.
Someone ordered all that aluminum with plans to make it into everything from cars and planes to aluminum pie plates. It means lots of work.
Canada: the world’s most expensive cell phone plans
PC Magazine produced this European study of how many gigabits you get from your cell phone plan. All you have to do is look at the chart to see Canada is an outlier. Canadian providers make more money per gigabit than any other country surveyed. Anyone who has travelled to Europe knows this. Buy a 30 Euro Sim card and you can talk—including calling Canada and the United States—text and cruise the web for a month or more.
Canadian politicians promise lower cell phone charges at election time. Nothing ever happens. There is a revolving door where top executives from the phone companies get jobs at the telecom regulator and ex-regulator staff move to the phone companies.
Facebook and G-mail are not really free
Not that easy a chart to read, but what it says is that tech biggies are flogging your information and getting paid for it.
“Facebook, Instagram and Messenger - all owned by the same company- each collects all 32 segments of data that Apple’s App Store Flags.” PC Magazine.
Don’t be evil. Who said that again?
Canada’s Wealth Tax: Lawyers and Accountants rejoice
The Liberal government is musing about a one-time 1% wealth tax on people with a net worth of $10-million or more. It would collect $60-billion according to a study by the Parliamentary Budget Office (PBO).
“Billionaires, after a one-time wealth tax like this are still going to have enough money to go to space,” Liberal MP Nathaniel Erskine-Smith told the Globe and Mail. He was the MP who asked the PBO to do the study. (Erskine-Smith is the Vice-Chair of the Access to Information, Privacy, & Ethics Committee. See above.)
Billionaire bashing is great politics ahead of an expected federal election but there are only 47 Canadian billionaires. The bulk of the $60-billion would come from people who don’t make the billionaire list.
Figuring out who is worth $10-million and more is pretty complex. Is it a family or an individual? Can a married woman worth $15-million cut that in two by giving her husband half? Who values the art, houses and car? Will be there be a wealth police? Will overseas property count? Canadian tax spies might have to make trips to Greece or Barbados on fact finding missions. Easier in the winter.
There will be an army of tax lawyers and accountants to fight every ruling.
The Canadian Taxpayers Association told the Globe and Mail that many countries such as France and Sweden have dumped the wealth tax because it’s too complicated to collect.
Alas, I don’t have to worry about the prospect of a wealth tax. I wish I did.
The E-Type Jaguar: Then and Now
Around 1972 I bought a used 1963 Jaguar E-type for C$900, about C$5,600 in today’s money, according to the Bank of Canada inflation calculator.
For car nuts, it was a Series 1, with a 3.6-liter engine putting out 265 horsepower. It was so fast it was dangerous. Zero to sixty miles an hour in seven seconds; a top speed of 150 mph, or 240 kmh.
The E-type is one of the most beautiful cars ever made. Not the most reliable. The gearbox was not synchronous into first gear and could get stuck. It was impossible to get it out of first and into reverse. If it was parked nose against the wall, my girlfriend had to push it while I engaged the clutch. Once you got going forward, you could shift. Changing the clutch cost me $800. Mechanics had to drop the engine to change the clutch.
It didn’t like moisture. Odd for a car from rainy England. I covered the distributor cap with a plastic baggy to keep it dry. Sometimes it wouldn’t start, so I carried a rubber hammer and banged the starter motor to coax the straight six engine into life. I once cut my chin on the window guide getting into the car. My chin took four stitches.
The car drank engine oil. On a trip from Montreal to Toronto it would need at least four quarts of oil. A mechanic named Don McDonald worked almost full time on my car and two other Jaguars, one a newer E-type 4.2, the other a 3.8 saloon.
However, I loved my E-type. A new sensible girlfriend convinced me to sell it for C$2,000 about $12,000 in today’s money. A model like that today, one in poor shape, would go for US$65,000 or C$80,000.
Now a company called E-type UK is refurbishing later model E-type Jaguars. According to a magazine called the Robb Report it will go for US$470,000. There it is below.
And before they even think about it you have to bring them a E-Type and then they will start working on it. The job takes 4,000 hours. The car has to be a Series 3 with a V-12 engine. As an E-type snob I would never be caught dead in one. But if the wealth tax people come by you could always say it was an older E-type and only worth $100,000.
Read more about it here.
Fred Langan is a business journalist who for many years was the host of CBC's nightly business newscast. Among other things, he was the business reporter for The National and The Journal. He wrote and hosted hour-long documentaries for CBC Current Affairs, and produced and hosted documentaries for Christian Science Monitor Television. He was the Canadian business and finance correspondent for The Economist for eight years, writing 250 articles for the publication. He wrote for the New York Times, the International Herald Tribune and was the Canadian writer for the Christian Science Monitor for 20 years and The Daily Telegraph (London) for 12 years. Langan writes long-form obituaries for the Globe and Mail. He was editor and publisher (volunteer) of Tempo Lac-Brome for several years and still contributes to the bilingual local monthly. Langan has published two novels and 12 biographies.