by Doug Casey, Casey Research:
We have something special to share with you today. Instead of our usual commentary, we have a brand-new essay from Casey Research founder Doug Casey. In it, Doug explains why Canada is headed for a self-inflicted disaster. This coming crisis could do serious damage to Canada’s economy. But it will be a “sideshow” compared to what’s about to hit the U.S.
Fair warning: this essay will offend some readers.
At least on first glance, you’d think things couldn’t get much worse in Canada in general, and Alberta in particular. Commodity prices are all down—some near historic lows in real terms—and Canada is all about commodities.
Then, last year, Canadians elected Justin Trudeau as Prime Minister, who can be counted on to promote absolutely every politically correct Big Government notion that crosses his mind and make the wrong decision at every opportunity. “Bold new programs” are always fun at the beginning. And since the Canadian government is in better shape than that of the U.S., it will be fun squandering whatever is in the piggy bank.
Not to be outdone, the Albertans elected the NDP for their provincial government; Canada’s NDP is best compared to the Bernie Sanders wing of the U.S. Democrats. They’re doing their best to bedevil oil, agriculture, and business in general, even trying to unionize family farms.
Before last year’s election, Alberta had, by far, Canada’s lowest taxes. It was the only province without a sales tax, which averages 7% in the other provinces. It had a flat 10% income tax; in other provinces, it averages 15% and up to 25% in Quebec. Alberta’s per-capita GDP was higher than that of the U.S., and typically 20% higher than the rest of Canada. It had the freest economy, and no provincial debt.
Now, they’re about to get a 7% sales tax, the income tax is graduated up to 15%, the province is taking on debt, and the legislature is active with lots of new regulations. And my read is that their real estate market is about to crash. Way too many people own multiple dwellings suffering negative cash flow.
Still, I suspect the average Canadian, or Albertan, is about a standard deviation better educated than his counterpart south of the border. Of course, that’s not saying much, especially when it comes to politics, which, in any event, is mainly an indicator of psychological aberration. Churchill was right when he said that the best argument against democracy was a five-minute conversation with the average voter.
Why did the poor fools vote in Trudeau nationally, and the NDP provincially? The best answers I could get were things like “It seemed like a good idea at the time…” or “I guess it was time for a change.”
Maybe it’s understandable; the ruling party they evicted is called—believe it or not—the Progressive Conservatives. A name like that, which is a contradiction in terms, is proof of how degraded political discussion has become. The Progressive Conservatives should adopt this for a motto: “We’re very confused about what, if anything, we stand for.”
Anyway, I’ll wager the Albertans kick out the NDP in 2019 because the economy will be very bad. But you can be assured the new taxes and regulations will stay in place.
But whatever happens in Canada is a sideshow compared to the main event in the U.S. As you know, I’ve been on record for a year saying that Trump will win. I still think so, despite the fact that every pundit in existence rails against him daily, spewing visceral hate. They call him a racist, which is actually a lie. Racism has become such a hot “no-go” topic that no one even dares discuss what it is—forget about its pros and cons. It will be the subject of a future End Note. They call Trump a sexist, which is another lie. I’ll cover sexism in the same essay. That will also provide an opportunity to discuss immigration (perhaps more accurately called migration) policy today.
The average middle-class, middle-aged American doesn’t give a damn about racism or sexism, however, because they basically only exist in the imaginations of the Politically Correct. But it doesn’t really matter any more what the average white male American thinks; he’s become the laughing stock of the rest of the world. He’s gone from being the King of the World to a bumbling, overweight, uneducated, bigoted, near-bankrupt parody of himself. What we once thought of as the “average guy” in the 40s, 50s, 60s, 70s, and even the 80s is on his way out. The PCs and the migrants have pretty well transformed the U.S.
Trump is the desperate “last hurrah” of the old order. An FYI: I don’t support Trump per se, even though, given the alternative, I hope he wins. It’s clear he has all kinds of dangerous authoritarian tendencies. And has all kinds of really silly economic notions. But the good news is that he may—to at least a degree—upset the Deep State’s apple cart, at least until he’s co-opted into the Deep State. No matter who wins, this election is going to be ugly. So try not to take it very seriously. Put the Stone’s “Street Fighting Man” on continuous loop instead of your TV’s regular audio, and enjoy. Before you rush to cancel your subscription, I hasten to add that, like any right-thinking person, I actively despise Hillary.
So what’s going to happen? The Deep State will do everything it can to keep things looking rosy for the next three months. The worse things get, the more likely the capite censi are to vote for Trump; the better things look, the better things are for Hillary. That may make Trumpistas closet Leninists. Lenin said, “The worse things get, the better they get.”
What more can the Deep State do? I used to think it was metaphysically impossible to have sub-zero interest rates, especially after creating trillions of new dollars. But it seems anything is possible in Bizzarro World.
I guess they’ll create trillions more dollars and use them to buy bonds, mortgages, and even stocks. So, despite stocks, bonds, and real estate being way overpriced, the smart money has to bet on things holding together until November. On the other hand, the average guy not just in the U.S., but around the world—as shown by Brexit in the U.K. and the surprise victory of Macri in Argentina—is mad as hell. We’re looking at a worldwide upset, not just one in the U.S.
And there are things out there, like the total and complete bankruptcy of the Italian banking system, where the Deep State is truly between a rock and a hard place. If they don’t bail it out, it could easily set off a deflationary collapse. If they do bail it out, then they’ll need to create hundreds of billions of new currency units just for Italy. Plus, more for banks in Germany, France, Spain, Portugal, and who knows where else.
Here’s the bottom line. We’re going into the trailing edge of the gigantic economic storm that broke in 2007. The Greater Depression is going to be nasty and long lasting even as technology moves us toward The Singularity. It makes sense to increase your physical holdings of gold and silver coins.
And hang on to your hat.
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