The tail risk

The first time I fired a machine gun, the damn thing jerked me forward, burying the muzzle in the earth. Bullets flying. Scared the crap out of me.

I was a kid. A Royal Canadian Army Cadet. The gun was a Bren light machine weapon, left over from WW2. It used gas from exploding munitions to eject a spent cartridge and load another – and to pull an unexpecting child soldier forward into the mud.

Lessons learned, in time I came to be a Cadet Lt-Col, commanding 400 in a school where military training was compulsory. Then into the Reserves, spending time as a summer pretend-commando defending the homeland from squirrels and raccoons with territorial ambitions.

Some memories came back as I heard Mark Carney say “an extreme tail risk” of Donald Trump’s aggression toward Canada was a military invasion. In fact, we know our Canadian Forces – modest as they may be – have modelled how to fight the most awesome military force the world has ever known. You know, like Iran is.

It’s unthinkable for most of us that America would attack. Especially now. Trump’s tanking in popularity. Far more Americans think kindly of Canada than they do of their own president. The midterm elections will probably spank the Republicans. Maybe the worst of the orange guy is over.

But, then… Why would Carney mention this ‘tail risk” to the NY Times gang when he was interviewed there yesterday? Every word he speaks is measured and distilled. He just signalled to us, and the world, that the White House is delusional enough to have thought of assaulting its northern neighbour. (Trump’s administration has attacked or invaded seven countries in the last two years.)

If I happened, would we be pooched?

Well, before Russia attacked Ukraine, it has a military force of 2.9 million active and reserve troops, hypersonic missiles and tactical nukes. The other side had a mere 200,00 soldiers and lousy equipment. And yet, the Ruskies have been held at bay since February of 2022. And they’re probably losing.

Ditto in Iran. Since that war began six months ago the US has bombed 13,000 targets, spent almost $40 billion and burned through a huge pile of gee-whiz munitions. The enemy has responded with glorified high-speed fishing boats, cheap drones and social media memes. America is clearly losing that war.

The point is that when big, dumb, strong powers attack small, nimble, adaptive ones, the outcome is far from certain. Might is not always right. Certainly not at a time when autonomous drones, asymmetrical warfare and digital weapons are employed.

So how would Canada fight America? And if it were to happen (which it won’t) what might you do to protect yourself and your assets?

Apparently we have a robust defence strategy. Unable to compete on an open battlefield with a superior force, we’d take a page from the playbook of the ingenious Ukrainians and the decentralized Islamists. Small, mobile, independent units would attack and harass invading forces. Our guys would be snipers, urban guerrillas and ambushers – not attempting direct confrontation. We would sabotage supply lines, attack command infrastructure, but be very careful not to hurt our new Gordie Howe Bridge.

Already Canada is taking measures to protect itself, as Carney revealed. That means dumping reliance on the Musk Star Link satellite network. Walking back from the F-35 purchase. Getting subs from Germany. Satellite communications from South Korea. Fighter jets from Sweden. And, of course, we’re working daily on new trade agreements, economic partnerships and global alliances to lessen dependence on an untrustworthy and unreliable America. Like the EU thing last week.

It’s unthinkable. But, alas, they’re thinking about it.

And what would happen to our dollar, the stock market, your RRSP, your house valuation, your income, your pension or the economy if the Americans invaded?

Don’t think about it. The risk of a complete loss of capital would be real. Moreover, an act of aggression by the US against its closest trading partner and a NATO member would cause global chaos – economic and political. In an extreme scenario, those who survive with their wealth intact would have gambled on moving it out of loonies, out of North America, and into physical assets, like precious metals, certain offshore equities or crypto – but all those could be equally compromised.

In short, there is no good outcome. That’s good. Because it’s never happening. Even, ah, if our prime minister just said it out load.

About the picture: “Second and sadly the last submission of Mojo who passed away at eleven earlier this year,” writes Mike, from the Kootenays. “We will miss him terribly and always remember the great joy he brought to us and everyone he met.  Such a good boy.”

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Source: https://www.greaterfool.ca/2026/09/24/the-tail-risk/