Euro skeptics are mostly far-right (or left) extremists. They are often the same as the ant-emigration crowd. The losers today of automation and globalization. So this period from 2008 until 2017 has been a time where a lot of pain came to the surface. The public answer was the election of people such as Trump where the population demands a breather from never ending global chance. The world faced a lot of headwinds, including the ever-deeper intrusion from governments and big business into our personal finances and even into our living room. Many feel powerless against the current elites who incessantly crave for evermore bureaucracy, the power to impose their lifestyle on others and years of empty promises of more jobs at the expense of those in society who saved their money. Few persons in this world are truly rich. To have meaningful affluence a household should have a net worth of at least 10 million – i.e. the Decamillionaires. That is less than half of the ‘one percent’ and I think I am exaggerating even that. With 70 to 80% of Americans unable to handle a $1000 emergency expense without going even deeper into debt, who is truly rich?
We only read about the super rich: Bill Gates, Warren Buffett, etcetera in the news papers and yes they influence the world due to their economic leadership not because of their voting power. So really who are paying taxes and on who are imposed every increasing numbers of new rules and laws? Tax hikes on the superrich won’t do anything except driving them away into tax havens. The real taxes are paid by the middle and the lower portion of the ‘upper classes’. Why do you think that many of the so-called 1% are considering themselves ‘middle class’? People feel (and are) lied to by the political class who portray everything in black and white soundbites amplified by a media that is out of touch with their readership and form increasingly part of the ‘elites’. Don’t forget many of the bureaucrats, politicians, lobbyists and media members never worked in the real economy that is providing the funds for our welfare state but even more for all sycophants at the public trough. It is for real reasons that so many people are moving to libertarian ideas – because they want to lead their own life. It is not for nothing that the Alberta’s NDP stronghold is Edmonton! Bet that Ottawa votes overwhelmingly Liberal?
When teachers and other civil servants are millionaires because of their defined benefit pension plans as soon as they retire – often a lot earlier than most in the private sector do -, one must wonder who is serving who? Europe is a bit ahead in this because they practiced the ideas of a cradle to grave welfare state much earlier than here in North America. But over the last decade the bill has been presented and by now Europe is moving back to the solid right. Their financial dire straits are the direct result of their state socialist philosophies of the previous decades. Political correctness – green energy everything proves to be costly and eating into the wealth of Europe’s population. With a 19 trillion U.S. dollar economy, it is larger than the U.S. and NAFTA. It is the real juggernaut in the world. It is the U.S. own fault that they spend most on defense – but they also benefitted from that by being the worlds most powerful military nation and having the world’s largest defense industry contributing to its economy. Europe after two world wars is not so keen on world dominance as the U.S. is but now Trump demands they spend more on the military and guess who will sell them all those new weapons?
Many libertarians feel that they have no business being the world police. Many libertarians feel the government should stay not only out of their life but also out of the life of citizens in other countries. Strangely enough Obama was more into that than Trump. Don’t tell me that there is logic in politics! So, the British voted for Brexit at a low point in the evolution of the EU. After a difficult period, leave it to the Brits to run for the exit! Just like Quebec in Canada – they will end up being the big losers (history may proof different). There are lots of similarities between Quebec and Great Britain as it was called in the past. But the clearest lesson is that the process of separation seldom leads to more affluence and just contemplating going such a route is economically very expensive. Just consider what has happened to Montreal over the decades. London may not be far behind.
If Trump truly exits NAFTA then there is a big price to pay in our North American economy. Trump the negotiator may think that ‘he who is willing to let go is in the stronger bargaining position’ just like Quebec thought this for years but remember the state Canada was in during the 1990s – the height of Quebec separatism - and consider what would have happened to Canada if Quebec had succeeded! Trudeau Senior and now Junior are the true leaders of divisiveness in Canada because they are so Quebec centric that they have no idea how to consider the interests of the West. It seems right now ‘deja-vu all over again’. How come that under Harper Canada was united more then ever and as soon as one of the Trudeaus come in, the West feels like talking separatism again? But as said, separatism is not the solution but the indication of sickness or problematic times.
Western Europe knows full well how much unification has contributed to their peace and affluence. How great life without borders is and how convenient a single currency is. But there are also problems. Big problems! Just like in Canada, Europe is very diverse. In fact, it is even more diverse than Canada ever will be. How to take the interests of such diversity properly into account? Obviously creating a big bureaucracy (like Brussels) and drowning the population into exhaustive regulations doesn’t work. The election system is quite good in Europe – a system customized for each member state by history.
Canada is struggling with elective problems. How to take care of an uneven population? – where the majority in the East has elected the federal government before election booths have closed on the West Coast. How to take care of regional conflicts of interest and ensure that the city population doesn’t crush the rest of a province? Are Vancouverites with their urban experience really qualified to impose their views on a resource economy in the interior of BC? Yes, a vote in rural Alberta weighs heavier than that of a citizen in Calgary or Edmonton but if that wasn’t the case people would be driven off the land by urban ideologies that often do not reflect economic realities.
Yes, in many ways Europe is the true leader of the world not the U.S. as many self-deluded North Americans seem to think. Now that Europe starts to recover this may become much clearer over time. Do you want to know the impact of an aging population? Look at Japan and Europe! Do you want to know what the economy might evolve into when the world population stabilizes – the front leader is Europe. Even though the Euro monetary system has significant issues to work out, especially how to deal with their diverse economic conditions and lifestyles, they are now slowly turning the corner. Brexit was the low point; Dutch and French elections mark a potential turning point. Brexit will be a great learning experience for European unification and the bill may be paid by the British. The British people are very charismatic – who cannot empathize with the Welsh, the Scots and the Irish such a charming and colorful lot of rogues? But it is likely they have most to lose from Brexit. I sincerely hope that we don’t have to say: “You were a great nation and it was nice knowing you.”
From an investment point of view, Europe leads the real world. Asia is the up-and-coming kid but they have a very turbulent way ahead. If you think Europe has problems just think about where China, India and there ‘spheres of influence are going – South China Sea a powder keg. Not to mention the Middle East. Yes, North America is a powerhouse and we should invest in our own economy but things can go and will go wrong here as well. Emerging markets are obvious candidates for economic growth but they have considerable risk and it is highly questionable that investing in their stock market will be beneficial. I think Europe is a lot more promising than many believe. Russia is troublesome and Putin is a wildcard. What would happen in case of assassination or if the man becomes too audacious and triggers a war? Will Russia turn in another North Korea or will it become a respected member of the global community?Western Europe deserves a much larger part of our investment portfolio than many of us have. Think of it this way, with the reductions of freedom over the last decade here in North America and with Scandinavian countries often depicted as the new ideal states (Seen any uplifting Scandinavian movies lately? – I don’t believe they exist) Europe may enter a new era of prosperity and an era of lots of introspection and social leadership