Over decades this superiority gives citizens within the superpower the idea that they can get away with not producing. That somehow there country and citizens are innately priveleged to a higher purpose. They feel as though they can feed off other countries.

Internal production shrinks and is replaced with speculative markets, which are merely just a back and forth movements of money that can no longer find a productive owner. It is important to note that speculation is completely pointless and has no productive qualities. The country becomes one big bubble.

At the same time its foreign obligations continue to grow. In order to meet the obligations the country takes on debt. The debt keeps rising until one day, it can no longer fund that debt with shrinking production. At that moment in time, the country without knowing it hands over the power to the next superpower.

Today and over the next twenty years we will watch America fall and China rise. It won’t be pretty and it won’t be fast. These transitions never are. Britain’s wasn’t fun, nor was Rome’s. The fact that the US has a massive trade and government debt entering into this transitionary period promises harsh times ahead. Current trade and federal deficits are growing exponentially by the month and are ballooning into trillions of dollars, each. The US transition from superpower status will be long and punishing.

In this time watch China rise in the exact same manner as the US or Britain or Rome once did. Production.

China’s currency will soon become a standard. It’s importance in foreign affairs will be unmatched. One day far in the future, its people too will stop trying, stop producing, feeling special and within their own bubble, they will merely speculate. Their debt will grow. Then reality hits and the bubble pops.

It’s like watching history happen well into the future. I guess that is how Garth felt when writing the Greater Fool. Moral of the story? Don’t lock in to real estate and debt in a time of great uncertainty. For a country that is entirely dependent on the US, we are most at risk as they fall off of their own pedestal.

and asked…. Which bank would that be?

My guess would be CIBC, they have the riskiest mortgage business out there..

Failure of any Canadian bank is a remote possibility. Merger is more probable. — Garth

Food prices are affected by many factors: cost of energy, weather, consumption/demand, population, etc.

The soaring cost of oil and inflationary pressures have increased the cost of food worldwide. If we are moving to a deflationary period, there theoretically there should be some easing off on prices in the future.

In the meantime, I think it’s safe to say, the food banks could probably use our support this Christmas, for those that are in a position to share :)