I think things are going to get a bit ugly. I’m not sure how ugly for Canada but the global economy does not look good. And the situation in the United States is really quite grim.
Some data points for our friends in the United States (courtesy of Zero Hedge):
- The U.S. debt is 100% of GDP, or approximately $15 trillion
- The U.S. federal government is running a $1.3 trillion annual deficit
- Unfunded liabilities for Social Security, Medicare and prescription drug are a staggering $116 trillion and growing
- 47 million Americans are on food stamps
- The broad measure of unemployment is 25 million Americans
- New jobless claims have run around 400,000 each week for the entire year
- Household debt is $13.9 trillion
- Almost half of the population in America received some type of government benefit
In my view, there’s a significant probability, more than 50 per cent, that over the next 12 months there’s going to be another recession in most advanced economies.Â Whether you call it a double dip recession, a continuation of the first recession or a second recession doesn’t matter, it’s semantic.
The world is not in a happy place.