The Hot Air Prime Minister

What would happen to a hot air balloon if you poked it with a sharp object? It would deflate and fall to the ground. Well that’s like anti-American Prime Minister (PM) Paul Martin. Paul Martin came into office vowing to improve Canadian/American relations that were strained by former PM Jean Chretien. Chretien was anti-American. Chretien would rather support America’s enemies then to stand with Canada’s long time friend.

Martin is the mini-Chretien. He hasn’t improved relations between the two countries. Martin has faced scandals in his own leadership and has come under investigation. So how does a Canadian politician try to regain support? The politician criticizes the U.S. and challenges her on every level. The Canadian public eats this up and then thinks you’re the Messiah.

This Canadian PM has has no backbone. He’s like a hot air balloon that is ready to deflate. Martin was a good finance minister but doesn’t have the leadership skills to lead Canada. Martin is more liberal on social policy then Senator Ed Kennedy.

It’s unfortunate that Canadians define their identity this way as being anti-American. What a wonderful way to identify yourself.
I’m able to comment about this because I’m Canadian. I grew up in a country that defined itself by the hatred it had for America.

Canadians view America as a murderous nation (their murder rate) with no family values or morals. I don’t know how Canada has come to be viewed as a country with moral values. Its rampant liberalism is almost unparalleled.

If you live in Canada and you are a conservative you are ridiculed and shamed. You are even called a Nazi. Yeah, a proud conservative Jew like me is really a Nazi. What has Paul Martin done to counter this behavior? He’s done nothing. Martin actually fuels this hatred.

Martin continually attacks America. He isn’t living up to his pledge to to improve Canadian/American relations. If he was serious, he would defend America from the bogus claims and assertions that many Canadians have about this great country.

So Paul Martin is full of hot air. He can’t be taken seriously. Instead of improving relations with America, he has attacked her to try and improve his popularity. If I were the President I wouldn’t trust Martin. I wouldn’t even deal with him

So why is Martin so upset with America? He claims that America is violating NAFTA by imposing tariffs on soft lumber. What’s he talking about? Canada does things to protect it’s culture from America and has implemented laws about how much Canadian content must be shown by Canadian media.

Canada has also attempted to implement laws prohibiting Canadian advertisers from buying advertising in Canadian editions of American publications. This was attempted in Bill C-55 in 1999. When it was first introduced, Clinton warned that it could spark a trade war. This was the latest of similar laws dating back to 1965 (Miami Herald).

After negotiation the Bill was amended slightly.

So now Paul Martin is crying foul. It was Martin’s Liberal government who was the sponsor of the bill. Now they must reap what they sewed. They had no vision and couldn’t see how their anti-American ways would have a negative impact.

For many years Americans admired Canadians and would even take their criticism. In recent years as Canada’s anti-American attitude has worsened, Americans are starting to resent their neighbor.
Many Americans now believe that Canadians hate America and would rather support her enemies.

Until Paul Martin leads Canada in a different direction, Canada/American relations will be strained. It’s up to Martin to live up to his words and start improving relations with America.

Canadian’s Personal Finances Fiscal Cliff: Are We There Yet?

Today we hear much talk about the USA’s economy approaching the so-called “fiscal cliff.” What about your personal financial affairs? Are you at the fiscal cliff as we inch toward 2013? Canadians are swamped in debt. Monthly, we read about the rising debt-to-disposable income ratio that stands now at around the precarious 164% level.

Although the world and many at home commend our government for its brilliant fiscal management, few warn about the unsustainable personal debt levels. Indeed, our central bank chief, Mark Carney, accepted an appointment to a similar role at the prestigious Bank of England. Will his legacy here be that of hero or villain? Will history show that he held interest rates low for too long, encouraging many folks to take on debt they cannot afford?

To his credit, he, our finance minister, and prime minister have been warning Canadians about these dangerously high personal debt levels. However, Carney could curtail the rise by raising interest rates. Sure, higher rates will dampen current slow economic growth. Even so, I think short-term pain is better than the likely personal finances’ crash that might happen if debt remains at present levels, or grows.

What can Canadians do to avoid their fiscal cliff? Let us examine three vital steps.

Accept you are dangerously leveraged.
Set a mechanism in place to live with declining debt
Develop a new vocabulary to guide your behavior

Accept You Are Dangerously Leveraged

You can’t solve a problem unless you recognize it. Do you think you are carrying too much debt? Your banker might tell you no; however, you alone can answer this. Take a helicopter view. What are you and your family’s emotional responses to your debt? Are you worried? Can’t sleep? If yes, you have too much debt. Certainly, look at ratios, but this is the key barometer.

The emotional cost of debt is the first and the most significant cost. If debt is 10% of income, and is causing problems for you or at least one in your family, it is too much. Still, you must accept reality and decide to live with it, take on no more, and start a debt free lifestyle.

If you are a Christian, give this emotional stress to Jesus (Matthew 11:28).

Set A Mechanism In Place To Live With Declining Debt

People are impatient. We live in a now society. Sadly, probably you got into debt over a long period, and it is likely you will get out over an extended time. Accept this fact and learn to live with it.

Develop a strategy to live in your debt. Look at how you got there; draft principles to prevent a recurrence; and then write a financial plan – alone or with help. The plan should show concisely how, by following your principles, you might be debt free in a specific time.

If you got into debt by impulsive spending, you might develop a principle never to buy without a list and a budget. As well, when you feel you need to spend, you might want to wait 24-48 hours during which time you would talk with your spouse or accountability partner.

You will have to find what might work for you, decide if you need help, and try to get it.

Prepare a debt-meter and place on your fridge. Monthly, as you repay debt, adjust the debt-meter.

Develop a new vocabulary to guide your behavior

This sounds easy, is simple, and when you get it, will be your most effective debt control “tool.” What you believe will decide how you behave. If you believe emergencies happen and cause you to spend erratically, you won’t change your behavior. However, if you believe that apart from the timing, most “budget emergencies” can be planned and should be planned by setting aside funds regularly to meet them, you will plan accordingly.

Your car will need repairs. It will need new tires. Your furnace will go, and so on. The issue here is timing. You don’t know when these potential budget busters will happen. Even so, you know they will occur, so create a capital fund, a rainy-day fund, emergency fund, or some other means to save for these predictable events. If you accept this fact about emergencies, and understand that to get there you must sacrifice today’s consumption, this is the start of your major victory over debt.

Another key vocabulary change is to accept that you can’t mange money, you can manage only your behavior – change from money management to lifestyle management.

Summary

As we enter 2013, look at your finances. You will know if you are at the fiscal cliff. Rest assured, you do not need more money to get you through, first, you need to accept where you are. Next, set a mechanism to live where you are as you work off your debt. Then examine your vocabulary, your beliefs, and adjust them to reality.

I pray you will turn away from easy seductive credit and start moving away from debt.

The DNA Household Finances Strategy

Today, Canadians continue to rack up debt at an alarming rate. Canadians are proud that we rode out the recession with minimal damage. We forget that it left us unscathed, mainly because we borrowed and spent our way through it. Most countries reduced household spending and increased savings.

Canada’s household debt at an astounding 153 percent of disposable income is headed for the tipping point of 160 percent that the United States personal disposable income hit before its crisis, over three years ago. Interestingly, these days, Bank of Canada Governor Mark Carney, and Finance Minister Jim Flaherty are hoisting red flags about household debt, signaling that it is a huge risk to the financial system. However, they are part of the problem, and so consumers are not listening to them. Why should they? It is Canada’s record low-interest rate policy that is driving consumers to spend recklessly.

Sixty percent of Canadians polled recently by RateSupermarket.ca indicate that they are uncomfortable with their current debt level. A majority of the 2,929 respondents cited everyday expenses for their debt. Canadians continue to deflect responsibility for their decisions to credit, financial institutions, everywhere.

Mortgage rates are low and fueling excessive spending on residential homes. Average housing prices at twelve-times disposable income concerns me. In the previous housing crisis in the late 1980s, it was ten-times. What’s more, at the end of 2011, residential housing investment as a percentage of GDP was 7%, the same level as in the 1980s crisis; the 50 year average is 5.8%. In the U.S., in the mid 2000s, this ratio peaked about 6 percent, and housing crashed shortly after. As well, Japan’s housing market collapsed just after that ratio peaked in the 1980s. Will things be different here? I do not think so.

Many households are at risk, but few are doing anything about it. Still, they buy homes and consumer items with cheap credit. I suggest households embrace this DNA Household Strategy as the first step in behavior adjustment, before Canada’s impending personal financial crisis wallops many individuals.

Individuals in each household needs to declare detente, withdraw to the neutral zone, and then start to attack their debts.

Detente

Detente is the easing of hostility or strained relations, especially between countries. How does this apply to households? With whom do they have hostilities or strained relations? Individuals in households confront personal lifestyle choices daily. Cheap credit, seductive finances, fancy grown-up toys, tempt us continually. How can we resist unless we recognize this, and plan to deal with it?

That’s why I suggest each person should stand in front of a mirror to declare detente with him, her…you! You the spendthrift, you the impulsive buyer, you who like grown-up toys decide to stop hostilities against your credit. Stop it now! Agree to end the pulling and tugging, which credit wins every time.

Formalize this decision by signing a covenant indicating that for at least one year, you will refrain from using credit cards, credit lines; all credit forms. As well, agree not to buy consumer items unless you need them to fulfill a legal, moral, ethical, or health reason. Get a trusted friend to witness this agreement, and to hold you accountable to stay with it. This is the start of detente.

Neutral Zone

After signing this covenant, withdraw to the neutral zone to develop a new approach to lifestyle choices. First, cut up all credit cards and decide to start working with a spending plan. Next, resolve to use cash or checks only, and then, exclusively for items in your budget. In the neutral zone, you do not go shopping, respond to sales, deals, or tempting financing. When the urge to spend impulsively comes, read your detente statement, which you should have with you always. Remain in the neutral zone until you repay all consumer debts, and lower your mortgage to a comfortable level.

Attack

The third plank of the DNA strategy is the attack phase: start attacking your debts. First, prepare a debt repayment schedule, next, a material worth statement, and then, a plan to use to talk with your creditors.

A debt repayment schedule, as the name implies, lists your debts and shows this information: Amounts owing, creditors, interest rates, monthly, twice weekly, or other payment period, and expected dates when at current repayment, you will repay each debt.

Your material worth statement, akin to a balance sheet, lists all items you own at values someone would pay for each (market value), less your debts, to yield your net equity. Review this statement to see whether you could sell items to lower debts. You might conclude that you should sell your house to lower your debts and ongoing expenses and rent until your circumstances improved. These are major decisions. Discuss them with a trusted independent advisor; pray about them. Remember, you got in debt over an extended period, and so it is likely that you will get out over a long stretch. That’s why you must forget the home run, be patient, and stay with the program.

After doing these statements and your budget, you will know your financial health and will be ready to talk with your creditors about relief. Be humble, polite, and realistic. Financial institutions prefer dealing with you instead of debt collection agencies. If you are sincere, truthful, and have a well-thought-out plan washed in prayer, they are likely to give some relief on interest rates or amounts outstanding; most likely, interest rates.