If anyone had mentioned last month that the United States would be nationalizing its economy they would have been laughed out of the room.
What a difference a few weeks make.
American taxpayers now own most their country’s mortgages, their biggest banks and one of the largest insurance companies in the world.
There is talk of spending about a trillion dollars of taxpayers’ money to keep the rest of the economic system afloat.
Castro should take notes on how to manage a centrally planned economy.
Because of the international implications there is a connection between what is happening on Wall Street in New York and Main Street here in Whitehorse.
It goes beyond one being wary of bears and the other terrified of bear markets.
The implications for the Yukon of the rewriting of the economic rules for Wall Street could be both very negative and, with a bit of luck, positive.
First the good news.
In times of economic insecurity gold is seen as a safe place to invest.
The key here is gold, not gold exploration.
Investors want to fondle their Maple Leaf coins and gold nuggets.
Thus existing gold operations will benefit because they are already producing something of value.
Placer miners with productive claims should do well as the price of gold will no doubt soar.
Other commodities, such as copper and tungsten, will probably also increase in value.
The mines producing these items are actually producing something tangible.
Investors will be looking to park funds in these items because they actually exist.
They will not be looking at esoteric financial instruments such as sub-prime mortgages.
Now the bad news if one is in to the whole resource extraction concept.
There will not be much speculative capital available for mining penny stocks and the like.
This means that the Yukon could see a downturn in mineral exploration.
It is anticipated that the North American economy is going to cool off over the next few years.
A less buoyant United States economy will mean less demand in North America for oil and natural gas.
Not only will there be less demand by American consumers, but the economic downtown on this continent will slow, somewhat, the economies of Asia.
Interest in the so-called frontier regions of oil and gas development, such as the northern Yukon, will wane.
This is actually good news from a land-use planning perspective.
While land-use planning is currently underway in the Peel Watershed region, it has to work around oil and gas dispositions and other mineral claims.
If there is a retraction of the capital available for these developments, land use planning might actually be able to be completed without oil dispositions and mining claims being forced upon the process.
Another possible casualty of the stock market shenanigans might be the northern mega-pipeline projects.
Not only will there be less demand for natural gas in North America, there is also the little fact of raising dollars to build the pipelines that move it.
The Alaska Highway Natural Gas Project needs about $30 billion to get built.
This sum might be small compared with what the US government is throwing about these days, but this amount is going to be difficult to raise in financing for the near future.
Forecasting the Yukon economy is always a wild guess.
But there is one similarity between the Yukon and the United States economies.
In spite of all the hype given to the wealth the resource extraction industry allegedly creates the Yukon is very dependent on Canadian federal transfer payments.
Now some of those Wall Street businesses and banks will be just as dependent on the American federal government payments.