Modeling Journey

Within a few weeks our MPs from the three opposition parties will be given the opportunity to vote out the Harper government and to install a new Liberal-NDP coalition government, which will govern according to the principles set out in the Accord. The occasion will be the confidence vote in the Harper government. A vote against the Harper government will lead to the Governor General obeying convention and asking the leader of the official opposition, Michael Ignatieff, whether he can form an alternative government. The Accord clearly means that there is an alternative coalition government in the wings, and Ignatieff could become Prime Minister in February.

This will be to the advantage of Canadians.

Why?

Because the Harper government is still lagging it its appreciation of the severity of the recession (depression?) facing Canada. It is out of step with the problems, and its solutions will also be out of step.

Just how severe is the recession facing us? Here is one man’s take on it (he happened to call the meltdown in 2008 correctly:

“But one man who did get it right in 2008 was Robert Prechter. The Georgia-based strategist forecast a massive unwinding of the credit bubble, and even bank failures, foreshadowing accurately what was to come. In fact, he did it in this very column almost exactly 12 months ago.
Hold the optimism, counsels Mr. Prechter. We're nowhere near the end of this horror story, reckons the publisher of The Elliott Wave Theorist, an influential newsletter based on technical analysis.

"While there should be a violent rally or two in 2009, and several times a general conviction that the bottom has passed, over all, the debt implosion should accelerate," he argues. "We have yet to enter the strongest portion of the declining wave pattern in the stock market."

Much of the optimism as we enter 2009 is founded on a belief that the world's central banks and leaders, first among them U.S. president-elect Barack Obama, will find a way out of the crisis through a combination of rock-bottom interest rates, government bailouts and massive spending programs.

Yet again, Mr. Prechter isn't buying it. "The erasure of bad debts can't be stopped," he argues.

"The only question is who will pay. The Fed and the government are hell-bent on making sure it is not those who were foolish, irresponsible or crooked but those who were prudent."

Dubbed a "permabear" for his stance over recent decades, Mr. Prechter's belief is that for all the talk of that we're now in the worst financial meltdown since the Great Depression, things are actually much more dire than in 1929.

"This time, the engines of debt are far bigger; the debt balloon is far larger; the pool of speculators among society is far larger; overvaluations among investments went far higher; U.S. banks on average are flat broke; the manufacturing sector in the U.S. has become aged; government is far more stifling. I can't think of a single aspect of the situation that is less bearish than in 1929."”

http://www.globeinvestor.com/servlet/story/GAM.20090103.RTAKINGSTOCK03/GIStory/

If this assessment of what is coming is correct, then Canadians would be better served by having a coalition government in place, which governs according to the principles of the Accord.