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How To Destroy An Economy Using Inflation – Forbes

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In late January, President Alberto Fernández participated in this year’s virtual gathering hosted by the World Economic Forum, normally held in Davos, Switzerland. From his cozy office at the Olivos presidential residence, the Peronist leader boasted about his administration’s response to the one-two punch of a global pandemic and Argentina’s chronic economic decrepitude, worsened by Covid-19’s global impact. The president highlighted how his Peronist brand of social-democracy managed to focus on “the discarded, those most vulnerable,” claiming it is high time to “leave behind this brand of hapless capitalism.” There seemed to be a certain disconnection with reality when Alberto touted the rapid recovery of the Argentine economy, which had seen some five months of sustained and robust economic growth, according to the president.

With one of the world’s highest inflation rates — which is currently on the rise — and almost out of foreign exchange reserves, Argentina’s government is looking at an array of price controls in order to keep a lid on the economy at least until October’s midterm elections. Lay-offs are prohibited by law. To a certain extent it feels as if they are once again covering the sun with their hand, so to speak, repeating failed experiences of the past and only kicking the can down the road. At one point in the president’s speech, he asked global leaders to push an “avant garde agenda, consistent with 21st century [goals],” which seems contradictory with certain pieces of legislation his administration has passed including a “home office law” and a new tax regime for the “knowledge economy” that only penalizes the private sector.

Whatever his intentions may be, it doesn’t feel as if Alberto is pushing a 21st-century agenda. Traversed by a global pandemic, and already two years into a recessionary cycle of stagflation, the government relied on printing copious amounts of pesos to finance emergency payments to individuals and corporations, while freezing public utility bills and using regulation to cap price increases in rentals, food and beverage, and telecommunications, to name a few. Yet, inflation jumped more than 36 percent over the past 12 months — marking a steep decline from 2019’s 54 percent with which Mauricio Macri left office — substantially outpacing wages. They didn’t seem to have a choice but spend being locked out of international debt markets.

While Economy Minister Martín Guzmán has signalled his intention to gradually close the fiscal deficit reducing subsidies in order to normalize energy costs, his government has already backtracked on increases, as it did with retirement and pension payments, putting further stress on the state coffers. Interestingly, these moves were attributed to Vice-President Cristina Fernández de Kirchner, a 21st-century character stuck in the ideological struggles of the 1970s. It was during CFK’s second presidency when the macroeconomic variables got out of whack, as she relied on increasingly stricter capital controls to keep the subsidies flowing, heating up the inflationary forces to the point where she intervened the official statistics bureau, INDEC, in order to try and tame expectations.

In order to imagine an avant garde agenda worthy of the 21st century, Argentina needs to fix its 20th-century problems. According to Federico Sturzenegger, head of the Central Bank

CPF
during the first half of the Macri administration, inflation is a revenue tool used by the government. In a column in Perfil, the use of the “inflation tax” will help the Fernández-Fernández administration rake in 1.1 trillion pesos, which, together with myriad taxes, dollar-denominated bond selling, and the one-time wealth tax, will allow it to cover its financing needs in 2021. “It helps that our society is much more concerned over the costs of lowering inflation than the costs of inflation,” Sturzenegger added. Using inflation to “dilute” or “licuar” costs and savings is the oldest trick in the book, and it hurts those in the bottom of the socio-economic ladder the most, as the former Central Banker points out. “Avoiding an immediate macroeconomic crisis doesn’t avert a credibility crisis that will sink investment rates to their lowest level in years, making growth impossible and pushing many Argentines to leave the country, taking with them their businesses and human capital.”

It must be noted that Alberto’s pan-Peronist Frente de Todos front inherited an imploded economy from Macri and his Cambiemos coalition. Macri promised it would rain dollars in the form of foreign investment and that inflation and poverty would tend to zero. While he received a ticking-time bomb from Cristina, he initially seemed to have disarmed it, only to see the economy blow up in his face at the first instance of financial tension in 2018. It was all downhill from there. And after that we had a global pandemic.

A recent report suggested Alberto is pushing a global statesman agenda, trying to align himself with Germany’s Angela Merkel and France’s Emmanuel Macron, along with Pope Francis. And while that sounds noble, Merkel and Macron defend multilateralism while their European Union is considering banning vaccine exports in the face of shortages and delays. If Alberto’s administration was able to put Argentina on a sustainable path to economic growth with inflation trending downward, he would leave his mark on history. It seems unlikely, though, when their response to inflation is price controls and pointing the finger at “speculators.”

This piece was originally published in the Buenos Aires Times, Argentina’s only English-language newspaper.

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Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

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VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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N.B. election: Parties’ answers on treaty rights, taxes, Indigenous participation

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FREDERICTON – The six chiefs of the Wolastoqey Nation in New Brunswick distributed a survey on Indigenous issues to political parties ahead of the provincial election, which is scheduled to kick off Thursday. Here are some of the answers from the Progressive Conservative, Liberal and Green parties.

Q: How does your party plan to demonstrate a renewed commitment to recognizing our joint treaty responsibilities and acknowledging that the lands and waters of this territory remain unceded?

Progressive Conservative: The party respectfully disagrees with the assertion that land title has been unceded. This is a legal question that has not been determined by the courts.

Liberal: When we form government, the first conversations the premier-designate will have is with First Nations leaders. We will publicly and explicitly acknowledge your treaty rights, and our joint responsibility as treaty people.

Green: The Green Party acknowledges that New Brunswick is situated on the unceded and unsurrendered territories of the Wolastoqiyik, Mi’kmaq and Peskotomuhkati peoples, covered by the Treaties of Peace and Friendship. Our party is committed to establishing true nation-to-nation relationships with First Nations, grounded in mutual respect and co-operation as the treaties intended.

Q: How does your party propose to approach the issue of provincial tax agreements with First Nations?

Progressive Conservative: The government of New Brunswick operates in a balanced and fair manner with all organizations, institutions and local governments that represent the citizens of this province, including First Nations. Therefore, we cannot offer tax agreements that do not demonstrate a benefit to all citizens.

Liberal: Recent discussions with First Nations chiefs shed light on the gaps that existed in the previous provincial tax agreements with First Nations. Our party is committed to negotiating and establishing new tax agreements with First Nations that address the local needs and priorities and ensure all parties have a fair deal.

Green: The Green Party is committed to fostering a respectful relationship with First Nations in New Brunswick and strongly opposes Premier Blaine Higgs’s decision to end tax-sharing agreements. We believe reinstating these agreements is crucial for supporting the economic development and job creation in First Nation communities.

Q: How will your party ensure more meaningful participation of Indigenous communities in provincial land use and resource management decision-making?

Progressive Conservative: The government of New Brunswick has invested significant resources in developing a robust duty to consult and engagement process. We are interested in fully involving First Nations in the development of natural resources, including natural gas development. We believe that the development of natural gas is better for the environment — because it allows for the shutdown of coal-fired power plants all over the globe — and it allows for a meaningful step along the path to reconciliation.

Liberal: Our party is focused on building strong relations with First Nations and their representatives based on mutual respect and a nation-to-nation relationship, with a shared understanding of treaty obligations and a recognition of your rights. This includes having First Nations at the table and engaged on all files, including land-use and resource management.

Green: We will develop a new Crown lands management framework with First Nations, focusing on shared management that respects the Peace and Friendship Treaties. We will enhance consultation by developing parameters for meaningful consultation with First Nations that will include a dispute resolution mechanism, so the courts become the last resort, not the default in the face of disagreements.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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Canadian Coast Guard crew member lost at sea off Newfoundland

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ST. JOHN’S, N.L. – A crew member of a Canadian Coast Guard ship has been lost at sea off southern Newfoundland.

The agency said in a release Wednesday that an extensive search and rescue effort for the man was ended Tuesday evening.

He was reported missing on Monday morning when the CCGS Vincent Massey arrived in St. John’s, N.L.

The coast guard says there was an “immediate” search on the vessel for the crew member and when he wasn’t located the sea and air search began.

Wednesday’s announcement said the agency was “devastated to confirm” the crew member had been lost at sea, adding that decisions to end searches are “never taken lightly.”

The coast guard says the employee was last seen on board Sunday evening as the vessel sailed along the northeast coast of Newfoundland.

Spokeswoman Kariane Charron says no other details are being provided at this time and that the RCMP will be investigating the matter as a missing person case.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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