Juggling Dynamite

All the cheap Made in China goods we’ve been buying on credit have come with many costs.

This is China’s most spectacular extravaganza. A hundred years in the making, costing $25 billion, one of the biggest engineering feats the world has ever seen. And, according to its critics, an environmental disaster on a monumental scale. The Three Gorges Dam is certainly a sight to behold, a massive wall of concrete spanning the mighty Yangtze River. The Chinese say it’s all about flood control and clean hydroelectric power. The environmentalists say true, it is about power. Power and national pride and the arrogance of man trying to tame forces of nature.  Here is a direct video link.

In August, I pointed out that the US dollar index (DXY) was looking oversold and that a bounce in the 92 range could signal the next retest for risk assets on the other end of the dollar teeter-totter.  Here was my partner Cory Venable’s big picture chart of the dollar index from 1995 to August 7.

Bouncing around in the $92 range to the end of August, the dollar held and traded through 93.50 this morning as other risk assets, commodities and currencies have sold off. We are watching to see whether dollar support has legs through a weekly close.  When it does, liquidation selling in other risk assets is likely to continue.

The COVID pandemic has terrified the world into a 250 to 300% increase in single-use plastic use, according to estimates from the International Solid Waste Association.

Meanwhile, studies show that COVID lives three times longer on plastic surfaces (including disposable bags and food wrappers) than paper.

An article this week in Corporate Knights reminds us that plastics are the other pandemic threatening our health.  See Curing the plastics pollution pandemic for an excellent update.   A few keys points:

• • Plastics is Canada’s fastest-growing manufacturing sector with much of the $10 billion worth annually focused on making virgin plastic, according to a study commissioned by Environment and Climate Change Canada.
  • Cheaper oil prices have made virgin plastics more profitable and plastics are set to become the largest driver of oil demand.  On this path, the sector’s emissions will reach 1.34 gigatons per year by 2030 –equivalent to the addition of more than 295 new 500-megawatt coal-fired power plants, according to the Center for International Environmental Law.
  • With China stopping its acceptance of international plastics waste in January 2018, the naive and wilfully blind belief that we are recycling our plastic waste was revealed:  eighty-seven percent of Canada’s used plastic is sent to landfill every year. Now, The Associated Press reports that Big Oil is pressuring Africa to accept our plastic waste.
  • The Great Lakes are flooded with an estimated 10,000 tonnes of plastic annually and according to research published last month in Nature, more than 10 times as much plastic debris is hidden beneath the surface of the Atlantic Ocean than we previously thought, including about 200 million tonnes of microplastic particles swirling around.
  • Nanoplastics are turning up in every human organ and tissue sample, as well as those of sea creatures, and are linked to a surge in mental health problems as well as many other illnesses.

Consumers, taxpayers and voters must insist that we use this moment of crisis as an opportunity to rebuild Canada for a sustainable future economically and in health terms.  This requires legislative and regulatory attention on waste bans, pollution penalties and taxes, increased producer responsibility and investment in new systems and technologies.

We are spending a fortune today and adding debt at every level, we might as well get some lasting benefits for the money.