Canada should take heed of warning signs from US stock market fluctuations during a decade of declining competitiveness, says Conrad Black.
Commentary
The prevailing belief in the U.S. is that this significant stock market decline is linked to the upcoming presidential election. With less than three months to go, there is growing worry about escalating debt levels in the U.S., both in the public and private sectors. A downturn in the U.S. economy would have negative repercussions for Canada, as nearly half of our GDP depends on our American neighbors. However, Canada’s own economic management has fallen short.
Capitalism is widely regarded as the best economic system because it aligns with the universal human desire for growth and security, usually manifested as increased wealth. For the past nine decades, the response to economic downturns has been to increase the money supply to provide financial relief, which ultimately devalues the currency. However, this devaluation is somewhat obscured by the fact that currencies are valued relative to each other, so if they all depreciate simultaneously, the overall relationships remain stable.
Related Stories
Many in Canada recognize the need for capital in our economy, and the outflow of capital is a critical measure of our global standing and prosperity. China and India, with nearly a third of the world’s population, have rapidly grown their economies, positioning themselves as major global players. However, Canada has struggled to capitalize on this trend due to a disproportionate focus on climate concerns and unwarranted attacks on our key industry, oil and gas.
The recent wavering in U.S. stock markets reflects concerns about America’s vulnerability due to record-high debt levels and uncertainty about future fiscal policies. Canada, on the other hand, faces even greater vulnerability and has been in decline for the past decade. The fluctuations in the U.S. markets should serve as a stark reminder of Canada’s economic fragility, exacerbated by ongoing capital flight.
The implications from the U.S. stock market are more pronounced for Canada than for the U.S. itself.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
