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THE SCENE WAS ABSURD: four activists, each with a bundle of 75 black and gold helium-filled balloons, riding an escalator. As we reached the top, we clipped our banner to the bundles and let go, watching our work rise slowly toward the hundred-foot ceiling of the lobby of a downtown Toronto office tower. Suddenly there were security guards rushing toward us. One of them jumped to make a grab for the bottom edge of the banner. We held our breath. He missed by mere inches and groaned. And then for just a moment, everyone in the lobby was standing still, staring up, as our huge painted banner rose until the balloons bumped and jostled against the ceiling. The bold red letters made our message clear: “HUDBAY MINERALS, CORPORATE CRIMINALS.”
The banner announcing “Hudbay Minerals, Corporate Criminals” stayed up in the lobby of the building where Hudbay’s shareholders were meeting for two hours until the company was able to remove it.
Outside on King Street, we joined the group of protesters who had already been standing in the pouring rain for more than two hours. A banner just like the one we had raised inside was stretched out, soaked, between two elders from the Mathias Colomb Cree Nation. They had traveled from northern Manitoba to confront Hudbay at this shareholder meeting where important decisions were being made by people who may have a financial stake but whose lives will never be directly impacted by the actual workings of any of the company’s mines.
Hudbay Minerals is one of several Canadian-owned mining companies censured by environmental activists, human rights organizations and more recently by mainstream media for carrying out violent forced evictions, murdering a community leader who resisted one of their mines, robbing Indigenous peoples of their lands, supporting brutal police and security operations and criminalizing anyone who has tried to resist their mining projects around the world and here in Canada. Hudbay has gained increasing attention recently because they are the first Canadian company to be tried in Canadian courts for crimes committed at mines overseas.
I [Rachel] have been directly involved in supporting communities resisting Hudbay’s mines since 2010, when I traveled to Guatemala as part of a human rights delegation and had the chance to meet people in a Mayan Q’eqchi’ community impacted by a mine formerly operated by the company. One of those people was Angelica Choc, who is now at the centre of Choc vs. Hudbay, the groundbreaking lawsuit currently being heard by Canadian courts. Angelica’s journey through the Canadian justice system began with the murder of her husband in 2009. Her community’s struggle against Canadian-owned mining companies goes back decades and is interwoven with armed conflict, genocide, government corruption, and Canada’s international development policy.
The history of the Fenix nickel mine, on the shores of Lake Izabal in western Guatemala, began in the 1960s when it was started by Inco, a Canadian company with a deep involvement in the Guatemalan government’s efforts to wipe out opposition. The Canadian government provided significant financial support to Inco’s Guatemalan subsidiary while people who protested or organized against the mine were killed, kidnapped, threatened, and whole communities were forcibly evicted from lands that had been their traditional territory for generations. Inco shut down mining operations in the 1980s, and the Fenix mine site was purchased by two Canadian companies – first Skye Resources in 2004 and then Hudbay in 2008. Shortly after the announcement of a lawsuit against Hudbay for negligence concerning violent acts committed by its employees and subsidiaries, Hudbay sold the Fenix mine to Russian company Solway Group at a $290 million loss.
The banner lift I organized in Toronto in the spring of 2013 was staged for the annual Hudbay shareholder meeting. It was an opportunity for organizations like the Mining Injustice Solidarity Network to counter the company’s media spin and to make evident – if only for the few hours that the crowds assembled outside and the banner floated near the 100 foot high lobby ceiling – that there was a bigger story at play than the record growth investment and corporate social responsibility initiatives that Hudbay was announcing inside. It was one small part of a series of actions and events that tied together Angelica’s quest for justice and that of the Mathias Colomb Cree Nation (MCCN) in Manitoba.
Leahjane Robinson with 300 balloons, moments before packing them into a uhaul to drive downtown to Hudbay’s shareholder meeting. Photo by Ashling Ligate.
MCCN has never been consulted by Hudbay or the province of Manitoba regarding the company’s mining operations on their territory. In an effort to assert their claim to the land and prevent Hudbay from carrying out their operations without permission, Chief Arlen Dumas formally issued stop work orders against the company in January and March of 2013, and band members organized peaceful gatherings at the mine site where they held drumming and singing ceremonies.
Hudbay responded by obtaining injunctions against the community and by launching a multi-million dollar lawsuit against Chief Dumas. The result of the company’s retaliatory actions is that MCCN people, who live off the land, have been instantly criminalized and held in contempt of court for trying to maintain their livelihood. Because of a mining operation they don’t want and never agreed to, they can no longer legally hunt and fish on their own land. MCCN has since delivered formal eviction notices to Hudbay and the Province of Manitoba.
Clayton Thomas-Muller, a member of the Pukatawagan Cree Nation and campaigner with Idle No More & Defenders of the Land, also came into town to stand with protesters outside Hudbay’s Toronto meeting. He addressed the crowd: “Investing in disputed Indigenous Lands, not respecting our nations’ right to Free, Prior and Informed Consent, trying to use the courts to suppress our Cree Nations’ sovereign right to protect our lands and water, are all signalers that the board and CEO of Hudbay are negligent, uninformed and morally bankrupt.” The community of Pukatawagan is located less than a hundred kilometres from the mine site.
Hudbay’s actions against MCCN, first ignoring the community’s right to determine what happens on their land, and later responding to resistance with significant legal threats, is heavy-handed and repressive, but less overtly violent than the threats faced by Angelica Choc’s community and those nearby. In 2007, Mayan farmers near the Fenix mine site were forced from their lands by hundreds of armed men from police, military, and private security forces who then burned down their homes.
In a village called Lote Ocho, eleven women were gang raped by the police, army, and security forces hired by Hudbay during an attempted eviction. The Canadian Ambassador to Guatemala attempted to discredit documentary film evidence of these violent evictions, claiming that the scenes were staged, or were filmed during the country’s armed conflict decades earlier. A Canadian court later found him guilty of slander, and ordered both the Ambassador and the Canadian Government to pay almost $10,000 in damages and costs to the filmmaker.
Angelica Choc addresses the supporters gathered outside of the courthouse where the trial began to hold Canadian company Hudbay accountable for the death of her husband. Also pictured: Grahame Russell fromRights Action. Photo by Veronica Díaz.
Two years later, in the face of another round of possible evictions, Angelica Choc’s husband Adolfo Ich Chamán, a community leader and outspoken critic of the mining company’s operations, was shot and killed by security forces. On the same day, German Chub was shot and permanently injured. These incidents, along with the brutal gang-rapes in Lote Ocho, are part ofthe case against Hudbay currently being heard in the Superior Court of Ontario. There are currently three lawsuits against the company, all for negligence resulting in death or significant harm.
Angelica’s message to Hudbay, which she shared with those who came to support her during a Toronto court appearance, is unflinching. “You made a mistake with me because I did not remain silent with my arms crossed…I demand justice.” She is a powerful speakerher words and her emotions impacted the crowd deeply as they heard about the brutality her community, like many others, has experienced in their efforts to resist violations of land and human rights.
“They need to pay for all the damage caused to my family and our communities. What Hudbay has done is deplorable. Even now they hide behind walls, refusing to accept the damages caused in Guatemala. I call upon everyone, and even more so, my Indigenous peoples, who are here [gathered in Toronto] right now, to remember who we are, where we come from and where we are going. I know this is not only the case in Guatemala, and I am not working, I am not fighting, only for Guatemala. This struggle is for the whole world, to defend the earth.”
On the day of her court appearance, in solidarity with Angelica and the other claimants, local Idle No More organizers led a round dance outside the courtroom. Members of the Mining Injustice Solidarity Network hung up t-shirts and sweaters on a clothesline as a way of “airing Hudbay’s dirty laundry”. Each piece of clothing had been painted by someone in Canada with messages about Hudbay’s activities, including a shirt painted by Angelica the night before. Photographs of this clothesline have since appeared in numerous media stories about the court case and the status of Hudbay’s corporate reputation.
A few of the pieces created to express solidarity with the plaintiffs and to air Hudbay’s dirty laundry. Photo by Leahjane Robinson.
Although the progress of the Choc vs. Hudbay case through the Canadian courts is a legal victory for the claimants and the lawyers representing them, back in the communities surrounding the Fenix mine repressive threats have intensified. Communities and families have been deliberately divided by offers of money and by campaigns of misinformation spread by mine officials and the government.
As disturbing as it is that these claimants are experiencing threats, it comes as little surprise to those of us who have worked on mining resistance. Unfortunately, Canadian mining companies regularly act illegally and with impunity in repressing resistance. This is especially easy to do in Guatemala, a country with one of the highest rates of impunity in the world. It is also a country where human rights activists and those organizing around the defense of land are routinely targets of violent attacks and murders.
Angelica Choc holds up the shirt she created for the laundry line. Photo by Monica Gutierrez.
Angelica knows that it will take the voices and commitment of many Canadians to make a change in the actions of Canadian-owned companies operating in her country. Surprisingly few Canadians realize that the majority of mines around the world are owned by companies based here, or the magnitude of the impact these mines are having.
To many Mayan peoples in Guatemala, the abuses carried out by Canadian companies on their land, across Central America, and globally are understood to be simply one part of a long and violent history of colonization, which they have been fighting against for hundreds of years.
Increasingly, settlers (non-Native people) in Canada are realizing what Indigenous peoples have been saying for a long time – these aren’t accidents, or the story of a few bad apples. If we’re going to change the way these companies act, we’ll need to challenge complex systems with a multitude of players that serve to concentrate power and resources in the hands of a few, often at the expense of Indigenous peoples.
And we need to acknowledge that, knowingly or not, we are all complicit in these harms, whether through the investments of our pension plans, the actions of our elected officials, the jewelry or electronics we buy, or by our tacit acceptance of systematic racism, colonialism and other oppressive, violent forces. It will be a long struggle to reverse these patterns.
The last time Angelica was in Toronto, she and I ate an early breakfast of pupusas in my kitchen before she left for the airport. We didn’t speak about much, but there was a weight to our conversation. We both knew just how dangerous it had been for her to come to Canada, and the risks she faced as she headed back to her community. We both knew that there is a very real threat of more evictions now that the mine has new owners. There was little I could say except to feebly send her off with a hug and a “please take care”.
Rachel and Joanne are spending February and March visiting with mining-impacted communities in Guatemala. For more info on mining in Guatemala, and for writing from their trip, see Under-Mining Guate. Visit the Mining Injustice Solidarity Network for updates on related issues, campaigns and actions. You can also read more about Canadian mining injustices abroad in A\J‘s Resource Wars issue.
By Laurence Kotlikoff
In his parting act, Federal Reserve Chairman Ben Bernanke has decided to continue printing some $85 billion per month (6 percent of GDP per year) and spend those dollars on government bonds and, in the process, keep interest rates low, stimulate investment, and reduce unemployment.
Trouble is, interest rates have generally been rising, investment remains very low, and unemployment remains very high.
Bernanke’s dangerous policy hasn’t worked and should be ended. Since 2007 the Fed has increased the economy’s basic supply of money (the monetary base) by a factor of four! That’s enough to sustain, over a relatively short period of time, a four-fold increase in prices. Having prices rise that much over even three years would spell hyperinflation.
The Treasury dance
And while Bernanke says this is all to keep down interest rates, there is a darker subtext here. When the Treasury prints bonds and sells them to the public for cash and the Fed prints cash and uses it to buy the newly printed bonds back from the public, the Treasury ends up with the extra cash, the public ends up with the same cash it had initially, and the Fed ends up with the new bonds.
Yes, the Treasury pays interest and principal to the Fed on the bonds, but the Fed hands that interest and principal back to the Treasury as profits earned by a government corporation, namely the Fed. So, the outcome of this shell game is no different from having the Treasury simply print money and spend it as it likes.
The fact that the Fed and Treasury dance this financial pas de deux shows how much they want to keep the public in the dark about what they are doing. And what they are doing, these days, is printing, out of thin air, 29 cents of every $1 being spent by the federal government.
QE an unsustainable practice
I have heard one financial guru after another discuss Quantitative Easing and its impact on interest rates and the stock market, but I’ve heard no one make clear that close to 30 percent of federal spending is now being financed via the printing press.
That’s an unsustainable practice. It will come to an end once Wall Street starts to understand exactly how much money is being printed and that it’s not being printed simply to stimulate the economy, but rather to pay for the spending of a government that is completely broke — with long-term expenditures obligations that exceed its long-term tax revenues by $205 trillion!
This present value fiscal gap is based on the Congressional Budget Office’s just-released long-term Alternative Fiscal Scenario projection. Closing this fiscal gap would require a 57 percent immediate and permanent hike in all federal taxes — starting today!
Prices will rise
When Wall Street wises up to our true fiscal condition (and some, like Bill Gross, already have), it will dump long-term bonds like hot potatoes. This will lead interest rates to jump and make people and banks very reluctant to hold money earning no return. In trying to swap their money for goods and services, the public will drive up prices.
As prices start to rise and fingers start pointing at the Fed for fueling the inflation, QE will be brought to an abrupt halt. At that point, Congress will have to come up with an extra 6 percent of GDP on a permanent basis either via huge tax hikes or huge spending cuts. Another option is simply to borrow the 6 percent. But this would raise the deficit, defined as the increase in Treasury bonds held by the public, from 4 to 10 percent of annual GDP if we take 2013 as the example. A 10 percent of GDP deficit would raise even more eyebrows on Wall Street and put further upward pressure on interest rates.
What are we waiting for?
But why haven’t prices started rising already if there is so much money floating around? This year’s inflation rate is running at just 1.5 percent. There are three answers.
First, three quarters of the newly created money hasn’t made its way into the blood stream of the economy – into M1 – the money supply held by the public. Instead, the Fed is paying the banks interest not to lend out the money, but to hold it within the Fed in what are called excess reserves.
Since 2007, the Monetary Base – the amount of money the Fed’s printed – has risen by $2.7 trillion and excess reserves have risen by $2.1 trillion. Normally excess reserves would be close to zero. Hence, the banks are sitting on $2.1 trillion they can lend to the private sector at a moment’s notice. I.e., we’re looking at a gi-normous reservoir filling up with trillions of dollars whose dam can break at any time. Once interest rates rise, these excess reserves will be lent out.
The fed says they can keep the excess reserves from getting lose by paying higher interest on reserves. But this entails poring yet more money into the reservoir. And if interest rates go sufficiently high, the Fed will call this practice quits.
As excess reserves are released to the economic wild, we’ll see M1, which was $1.4 trillion in 2007, rise from its current value of $2.6 trillion to $5.7 trillion. Since prices, other things being equal, are supposed to be proportional to M1, having M1 rise by 219 percent means that prices will rise by 219 percent.
But, and this is point two, other things aren’t equal. As interest rates and prices take off, money will become a hot potato. I.e., its velocity will rise. Having money move more rapidly through the economy – having faster money – is like having more money. Today, money has the slows; its velocity – the ratio GDP to M1 — is 6.6. Everybody’s happy to hold it because they aren’t losing much or any interest. But back in 2007, M1 was a warm potato with a velocity of 10.4.
If banks fully lend out their reserves and the velocity of money returns to 10.4, we’ll have enough M1, measured in effective units (adjusted for speed of circulation), to support a nominal GDP that’s 3.5 times larger than is now the case. I.e., we’ll have the wherewithal for almost a quadrupling of prices. But were prices to start moving rapidly higher, M1 would switch from being a warm to a hot potato. I.e., velocity would rise above 10.4, leading to yet faster money and higher inflation.
No easy exit
I hope you’re getting the point. Having addicted Congress and the Administration to the printing press, there is no easy exit strategy. Continuing on the current QE path spells even great risk of hyperinflation. But calling it quits requires much higher taxes, much lower spending, or much more net borrowing (with requisite future repayment) from the public. Yet weaning Uncle Sam from the printing press now is critical before his real need for a fix – paying for the Baby Boomers’ retirement benefits – kicks in.
The one caveat to this doom and gloom scenario is point three – increased domestic and global demand for dollars. The Great Recession put the fear of God into savers worldwide. And the fact that U.S. price level has risen since 2007 by only 15 percent whereas M1 has risen by 88 percent reflects a massive expansion of domestic and foreign demand for “safe” dollars. This is evidenced by the velocity of money falling from 10.4 to 6.6. People are now much more eager to hold and hold onto dollars than they were six years ago.
If this increased demand for dollars persists, let alone grows, inflation may remain low for quite a while. But our ability to get Americans and foreigners to hand over real goods and services in exchange for very few green pieces of paper is hardly guaranteed once everyone starts to understand the incredible rate at which Uncle Sam is printing and spending this paper. Once everyone gets it into their heads that prices are taking off, individual beliefs will become collective reality. This brings me to my bottom line: The more money the Fed prints, the more it risks everyone starting to expect and, consequently produce, hyperinflation.
Laurence Kotlikoff is Professor of Economics at Boston University and co-author of The Clash of Generation and author of Jimmy Stewart Is Dead.