While doing his best impression of Izzy Mandelbaum from Seinfeld during a recent Iowa campaign stop, former Vice President Joe Biden released a video that compiles clips of the world laughing at President Donald Trump. It featured highlights of leaders and members of the United Nations getting a chuckle out of the president. Considering that the rest of the world economy seems to be burning, should anyone really be laughing at President Trump or even the United States?
A Poutine Kerfuffle
The Canadian economy has had its moments over the last few years, but it has been anemic at best. What Prime Minister Justin Trudeau and his Liberal government are doing – soaring federal deficits, mishandling the energy file, and getting involved in numerous scandals – does not seem to be working.
The November jobs report came out and it was not pretty. In fact, it was the worst performance in the labor market since the financial crisis. According to Statistics Canada, the Canadian economy lost 71,200 jobs, down from the 1,800 job decline in October. The unemployment rate rose 0.4% to 5.9% and the labor force participation rate edged down to 65.6%
Over the last month, there has been plenty of data suggesting that the economy is stuck on a treadmill. September retail sales fell 0.1%, the third-quarter gross domestic product (GDP) advanced just 0.3%, and its current account deficit widened to $9.86 billion in the June-September period.
With the budget unlikely to be balanced anytime soon, the national debt only growing, the government bungling its biggest resource – oil – and brewing separatist talk, the Great White North may need its own Make Canada Great Again campaign.
And it looks like Conservative Party leader Andrew Scheer will not be the guy to do it.
The Organisation for Economic Cooperation and Development (OECD) published a new report that examined the tax to GDP ratio of member nations. Topping the list was France with 46.1%; Mexico was at the bottom with 16.1%. With such high tax rates, the French economy must be soaring, right?
Like Canada, the French economy is also quite stagnant. The unemployment rate is at around 9%, industrial production is seesawing between expansion and contraction, and the budget deficit ballooned to $119 billion. As the citizenry becomes even more fed up with President Emmanuel Macron and his left-leaning, globalist public policy agenda, it is doubtful that France will be able to crawl out of the hole it dug for itself.
The Wurst-Case Scenario
For the last several years, the European Central Bank (ECB) has maintained subzero interest for its benchmark rates. Up until now, financial institutions have been prevented from passing off these negative rates to most of their clients, but it was bound to happen sooner or later. Banks cannot survive on subzero rates for too long.
Volksbank Raiffeisenbank Fuerstenfeldbruck, a small regional lender based near Munich, instituted a 0.5% interest rate on all savings in new accounts starting with the first euro. Frankfurter Volksbank is another entity that is set to place a –0.55% rate on all deposits for new customers. In other words, if you have a deposit at either of these banks, then get ready to be penalized.
The rest of the German economy is beginning to slide. Partially affected by the lingering U.S.-China trade dispute, German factory orders fell 0.4% in October, industrial production cratered 1.7% (the worst in a decade), and overall economic sentiment is bearish.
China Focus on Growth
Speaking of China, the world’s second-largest economy continues to be crushed like a Dixie cup.
Here are some disappointing developments from the last couple of weeks. Beijing is set to make history with a record number of bond defaults in 2019. For the first time in seven years, an initial public offering (IPO) flopped. Vehicle sales slipped another 4.2% in October, industrial output is still falling short of expectations, and industrial profits contracted 2.9% in October.
The upside for China is that factory activity returned to growth for the first time since April. The National Bureau of Statistics’ (NBS) manufacturing purchasing managers’ index (PMI) hit 50.2 last month. Is this the new trend or a one-off?
As Liberty Nation has documented, China’s economy is only worsening, and even a trade deal might not save it from falling into the abyss. Right now, Beijing is desperately trying to cling onto a modicum of growth. Whether China succeeds or not remains to be seen.
The Wolf of Main Street
The U.S. has its own share of problems: a $23 trillion national debt, the return to $1 trillion budget deficits, $200 trillion in unfunded liabilities and expenditures, and a bubblemania getting bigger. The long-term trajectory of America is an unsustainable one that will eventually lead to anguish. That said, many Americans on Main Street and Wall Street can live the good life now.
The rest of the world is proceeding on a course to a disaster that could potentially reset the world order. Unfortunately, anytime there is a changing of the guard, government grows and our freedoms – civil and economic – diminish. China’s economy is collapsing, but the communist regime is clamping down on its citizens with social credit scores, intense interrogations, and labor camps. Who’s to say that won’t happen in the U.S., especially when today’s youth, who will control society in the next decade or two, has become the first generation to fight against its rights?
So, be grateful for the past, celebrate with a good smoke and a cup of coffee today, and accumulate your bullion for tomorrow. Who knows where all this is leading?
Read more from Andrew Moran.