C4 CASTLEGAR NEWS, August 19, 1981 Economy is sliding downhill CP BUSINESS EDITOR Some current jokes about the Canadian economy are even feebler than the dollar. One, for example, compares Prime Minister Trudeau with a man who having fallen from a 26th storey window, mutters to himself as he passes the 12th floor: “Everything's still OK, so far at least.” But the state of the Cana- dian economy is no joke. It's not as bad as many people paint it, but most observers are at least uneasy about the way things are going. Items: -Interest rates are at record levels, hurting families and businesses; -Inflation, described by Finance Minister Allan Mac- Eachen as still Canada’s No. 1 as high as many economists had predicted at the beginning of the year; -Labor shows signs of be- coming truculent as anger grows about the economic problems of its members; -And, while it can’t be measured precisely, surveys report an increasing public malaise. HARD TO BELIEVE It’s hard to believe, but a year ago the chartered bands’ trend-setting prime rate stood at 12.26 per cent. Today, it’s 22.75 per cent and most economists predict it will move even higher the next few weeks, At the same time, banks have raised the interest they pay on savings accounts to as much as 19 per cent. With the prime at 22.75 per cent, mortgages are in the 21.75 per-cent range, and enemy, to increase; -The Canadian dollar has fallen close to its lowest level ever in terms of U.S. currency - 80.60 cents Friday, compared with 80.08 cents nearly 50 years ago during the Depression; Unemployment remains stubbornly high, though not loans cost up to 24 per cent, depending on the bank and the customer's credit rating. Consider that a $5,000 bank loan, paid back over four years at at 24-per-cent rate, costs $1,222.08 more than a similar loan at 13.5 per cent, Mortgages? A year ago, $50,000 over 25 years at 13.5 per cent would have cost $569.09 a month. Today, at 22 per cent, the same mortgage would cost $882.06. And that's $313.04 a month more, or $3,766.48 a year. If nothing changed over the 25-year life of the mort- gage, you would fork over a shocking $98,912 more at today's rates than you would have a year ago. And what about sinall businessman, the so-called backbone of the Canadian economy? Assuming he pays one percentage over prime for a $75,000 ‘line of credit, he's paying almost $18,000 a year in interest. COMBATS INFLATION One reason interest rates are so high is that the federal government and the Bank of Canada feel they are essen- tial to fight inflation, gallop- ing along last month at an annual rate of 12.8 per cent. High interest rates are supposed ot combat inflation by making many things too costly to buy. When that happens, in theory, people buy less and prices come down in the face of slakening demand. Foreign affairs and defense However, there. are few signs that. this theory is working, so far. For one thing, economists are suggesting that busin- esses, especially big corpor- ations, no longer respond to weakining demand by cutting prices - they simply cut pro- duction, laying off workers in the process, and maintain high prices. For another, a lot of the higher prices have come in areas where it’s tough to cut back, such as food and fuel. With the price of food and fuel certain to increase further, economists agree that hopes for a significant drop in inflation are unreal- istic, barring an unforeseen and dramatic change in one of more of the many factors that make up the economy. WEAKNESS SYMPTO TIC One of those factors is the Canadian dollar. Its value has dropped sharply the last three weeks, although the federal gover- nment spent $1.4 billion in July to try to prop it up. On July 15, its value in terms of the U.S. dollar dropped below 83 cents and last week it closed at 80.60 Japan's role isexpanding TOKYO (CP) — If you think Canada has constitu- tional problems, pity Japan — the whole army may be unconstitutional and no one dares press the courts to de- cide one way or the other. The problem stems from Japan’s constitution, written under U.S. pressure after the Second World War, which prohibits Japan from main- taining any ‘‘land, sea and air forces, as well as other war potential.” So far the government has manoeuvred around the dil- emma by interpreting it to mean that limited forces for self defence are still allowed. But that and the understand- able Japanese concern about nuclear weapons can lead to some pretty bizarre situa- tions. Prime Minister Zenko Suz- uki, for example, still claims with a stright face that Japan adheres to non-nuclear prin- ciples banning the mainten- Robbers car keys stolen WINNIPEG (CP) - Police have been issuing warnings for years about the risky. business of leaving keys in the ignition of an automobile and two Winnipeg bank robbers are likely ‘wishing they had paid more attention. The men left the keys in the ignition of their getaway car parked outside a Royal Bank branch. The keys were pocketed by an alert by- stander who had watched the masked and armed men enter the bank. The robbers fled on foot with an undisclosed sum of money. One man was arrested later. Results from Joy Keillor Bridge Club Eight and a half tables took part in play Aug. 10 at the Joy Keillor Bridge Club, with the following results. North-South Average score was 84. Jean Fischer and Agnes Charlton finished in first place with a score of 102; Etuka Cameron and Pearl Palmer finished in second place with 96%* AND Hu- bert Hunchak and Heather Pottle finished in third place with 91 East-West Average score was 94'/:. DAve and Margaret Thi- el's score of 123 earned them a first place finish; second place went to Jim and Bev Swain, with a score of 109'/; and Norm and Les Gallie came third, with 103. ance, production or intro- duction of nucelar weapons in Japan. But it is widely known that U.S. Navy ships carry nuclear weapons in Japanese waters and sometimes evne store the bombs in Japan. A foreign ministry spokes- man, struggling to conceal a smile, explained the contrad- iction this way: UME NO WEAPONS ‘According to the security treaty (with the United States) and related arrange- ments, the United States must have Japan’s permis- sion to introduce nuclear weapons into Japan. They have not, so we assume they ae not.”” One of the reasons for the mental gymnastics is that Japan places a high priority on political consensus and the government doesn’t want to upset the delicate year, defence will get almost one-third. Considering that the mili- tary has been getting only five per cent of Japan’s bud- get, the official said, ‘‘that’s really something.”’ HAS SMALL ARMY Still, the forces are eal- atively small. Japan, with about five times the popu- lation of Canada, ha sonly 240,000 men in its military, about three times the number in the Canadian Armed For- ces. The government's step-by- step pace seems to be work- ing. Tens of thousands of people demonstrated in May when the nuclear controversy broke into the open and some leftists even set fire to the transportation and communi- cations ministry. But there have been no disturbances for several weeks. it sees emerging in favor of a greater Japanese role in for- eign affairs and defence. The desire for consensus is also why the government has rejected steadily increasing U.S. pressure to spend con- siderably more on defence. “It’s like a little bud,” the foreign ministry official said. “Pour water on it little by little. But if you try a bucket of water you may kill the bud.” The official noted that Jap- an is-already stepping up . Spending on the military — known as the Self Defence Forces — rather rapidly. Of the $3 billion (U.S.) set aside to cover increases for all government departments this are beginning a assume more of the influence one would expect of such an econ- omic giant — second only to the United States in the non- Communist world in terms of gross national proudct. The foreign ministry offi- cial, who as a student 20 years ago was demonstrating against the U.S. military presence in Japan and in favor of pacifism, says many Japanese — himself included — ‘have come to realize that you can’t live in this world Gust) ttusting other People’ 's justice or sincerity.”” One reason for the change of mood is the Soviet invasion of Afghanistan, its military build up north of Japan and When your hair needs help, don’t try to do it yourself. Let us examine your hair (we suggest a hair analysis), then con- dition It professional- ly with the Redken product we believe will do your hair the most good. When you need help with your hair, you need someone whose profession is hair care. Make an appointment fora professional Redken conditioning treat- ment today. HAIRLINES Different types of hair need different types of care. THUR- DAVE ond FRIDAYS. HAIRLINES is your Redken family Hair Care Centre where we not only like to give you a great cut, but also Iso help you t you to have hair and feels greot Bacio i's In great pe. For an appointment call Beth th, Kays or Laurel today REDKEN’ 620 Columbia Ave. Castlegar, 365-6700 — as the govern- cents, That means if you go toa bank to buy U.S. dollars for a trip south of the border, you'll be putting out about $1.23 or more to get $1 U.S. Stan Roberts, president of the Canadian Chamber of Commerce and an economist himself, says falling dollar is a sympton of problems in the Canadian economy and a reflection of a lack of inter- national confidence in the way affairs are being handled. At home, the dollar's weak- ness fuels inflation. Keith Dixon, president of the Can- adian Importers’ Association, estimated last week that the lower Canadian dollar will add five per cent to family food bills soon because such things as Florida oranges, among other U.S. imports, will cost more. RIGHT SPOT But there is a bright spot. Canadian exports to the U.S. earn more, and that's impor- tant in such areas as forest and mineral products. Canada’s unemployment rate in July was reported last week at 7.2 per cent, down from 7.3 per cent a month earlier and 7.5 per cent a year ago. That's good news, The bad news is that economists generally agree unemploy- ment should be no more than five per cent - a decade ago they talked of three per cent -' and forecasts for the rest of this year and 1982 sco lottls change. Labor'gets a lot of blame, mostly from big business, for causing higher prices. But “ labor leaders point out that all statistics agree real age increases the last three years haven't kept up with incre- eases in the cost of living. Now labor is demanding that workers make up that lost ground. It’s not likely that productivity will gain enough to cover the cost of | major wage settlements," so higher prices in many fields appear likely down the road. Elk thriving amid war manoeuvers BRANDON (CP) — A herd of 700 elk is thriving in Spruce Woods provincial park in Manitoba despite a constant series of niilitary war games that involve the use of tanks and artillery. Biologist 2 Tom Strong, who ment regularly reminds peo- ple — its continued occu- pation of northern gov- Staion caponsered study last year, said the elk have islands taken at the end of the Second World War. Another reason for the new tealism is economic neces- sity. The country remains heavily dependent on foreign supplies of energy and on foreign markets for its prod- ucts. PEACEIS VITAL World peace and stability are more than laudable objec- tives for Japan’s foreign pol- icy — they are absolutely vital for economic survival and expansion. to the ear-shattering blast of cannon. The herd has been in the area since the 1800's. “T've seen and elk with a newhorn within one kilom- etre from a_tank-training area,” he said. “I feel the elk have adapted to the noise because over a period of time they know it won't hurt them.” Strong said one cow elk was sleeping so soundly he was able to walk up to it and touch it. Strong said ‘the herd, about 35 kilometres west of Brandon, has increa- sed from 125 in 1969 to 700 this summer. The 600,000-hectar area includes provincial forest and federal land used for North Atlantic treaty Organization * Strong, a biologist with the provincial wildlife branch, said most of the elk roam the military reserve where the firing of artillery shakes the « ground. Dr. Marlin Shoesmith, head of biological services for’ the Manitoba _ wildlife, said the increase in the herd is a good example of the animal's ability to adapt. “Man has the power to exterminate wildlife in the fight for use,” he said. “There's a great satisfaction in knowing t they're there and increasing.” As part of an ongoing monitoring program, wildlife officials are tracking 16 elk which have been tagged with solar-powered radio trans- mitters. ““HOMEGOODS__. FURNITURE. ‘WAREHOUSE | Tues.- Sat. 9:30-5:30 © China Creek “Drive a Little to Save a Lot” ‘Borderline Transmission | AU TOM APACE ye 4 < mln 5 EREE ie within a 100-mile radius with major _tepairs. zs We have é: Automat! eer asion shift Kits in stock. 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