Brexit!!! The Beginning of the End for the European Union

On June 23, 2016, the people of Great Britain shocked the world – contrary to all polls, they voted to leave the European Union. They were only the first of many countries to talk about leaving the EU, the first to do a referendum on the issue, but many more are already stating – mere hours after the results of the referendum were known – that they will follow in Britain’s footsteps.

Among the first was France, with Marine Le Pen, leader of the French National Front (Front National), saying that now it is France’s turn. She talked about the four fundamental freedoms that have been usurped by the European Union, that France needs to restore – monetary and budgetary souvereignty; economic, territorial and legislative souvereignty. Marine Le Pen stated that the UK had started a movement that will not stop. She was joined by many other political leaders from other European countries, including Hollamd, Denmark, Germany, Hungary and Italy, among others.

The effect on the stock markets around the world was swift – Japan’s Nikkei plunged by 7.9%, South Korea’s stock market fell by 4%, markets all around Europe moved to the downside – from France (down 273 points, or 6.24%), through Germany (-699 points, 6.82%), to Switzerland (down 2.6%). In fact, the British stock market’s loss was lower (3.15%) than the French stock market. Among the reasons for this: the fall of the British pound (the biggest one-day fall in more than 30 years), which is beneficial for British manufacturing; and the concerns of French manufacturers exporting to Britain (many of the French car manufacturers, such as Renault, for example, sell as mich as 20% of their vehichles in Great Britain – a trade that will now have to be renegotiated).

The North American stock markets were not spared as well – Dow Jones lost more than 610 points (3.39%), NASDAQ fell by 202 points, the Canadian stock market, the TSX, shed 239 points (-1.69%), and Canadian bond yields had their biggest fall in history.

The total losses on the world stock markets today, in one day only, were worth more than $2.08 trillion. That’s trillion with a “T”.

It is dificult to foresee the long-term consequences of the Brexit for both the European Union and the world stock markets. From what we have seen so far, however, there is little hope for improvement.

Will Your Job be Taken by a Robot?

Only a decade ago, most of us never thought we would see this in our lifetime, but here it is: According to a new study out last week, 42% of Canadian jobs will be automated in the next 10 to 20 years (42% of Canadian jobs at high risk of being affected by automation, new study suggests). We are facing the next “industrial” revolution – or maybe we should call “the rise of the machines”?

In an economy with more than 10 million “discouraged workers”, the last thing we needed is happening all around us. Companies – from Apple, which is working on automation in order to have its cell phones produced by robots, all the way to McDonald’s, planning on replacing workers with robots, – are all looking into this, or even already doing it! After all, robots do not demand minimum wages, or better working conditions. They do not need days off, vacations, sick days, benefits, insurance or pensions. Heck, if machines are manufacturing something, they do not even need to have the lights on – I have personally heard witness testimonies of entire factories with machines working in the dark, to save on electricity!

Automation also provides a way for companies to decrease their expenditures and deal with rising food prices and inflation.

According to the most recent study by the Brookfield Institute for Innovation + Entrepreneurship at Toronto’s Ryerson University, the following jobs are at giher risk of being automated in the near future: retail salesperson, administrative assistant, food counter attendant (think about the McDonald’s example above), cashier (consider the self checkout machines available in most large grocery and department stores), transport truck driver. Now, entire automated convenience stores are starting to appear all over the world!

So what are we to do in this case? What if in an already difficult economic situation, finding a job – just any job, in order to make ends meet, – is becoming nearly impossible?

Many would suggest that we all get a better education, and live the “life of the mind”. Some would say more engineers, programmers and robotics specialist will be needed. While that may be the case, it is a matter of fact that, first, not each and every person is cut out to be an engineer, or even to go to college; and, second, even if that was the case – there would only be so many jobs for people inventing, building, programming and fixing the machines and robots that will replace some of the most basic jobs that anyone – even people without a high school diploma – can do! When we even have machines building and producing other machines (Robot ‘mother’ builds babies that can evolve on their own), then what are all the rest of humanity to do?

This is one of many reasons why I tend to always repeat, how important it is to have as little debt as possible, and be as independant of the system as you can be! As I write in my book, every little thing that makes you more self-sustainable will help! Always evaluate your situation and check, what is best for yourself and your family!

List of Chains Closing Stores in Canada

The following is a lost if store closures in Canada during the last two years or so (2014 – 2016):

1. Le Chateau – to close another 40 stores during the next few years, already closed 11 stores in 2015, 14 stores in 2016.

2. Laura’s Shoppe – 15 stores closed in 2015, 7 had lease expire at the end of 2015, renegotiated leases on other stores.

3. Danier Leather – closed all its 76 stores, bankruptcy.

4. The Gap – closes 175 stores accross North America.

5. Smart Set – 107 stores.

6. Jacob – all 92 stores, bankruptcy.

7. Sears – about 50 stores during 2016, after a disappointing holiday season in 2015 and following previous store closures last year.

8. Future Shop – closed 66 stores last year.

9. MEXX – 95 stores in Canada, bankruptcy.

10. SONY – all 14 stores in Canada, 2015.

11. Staples – 50 stores to close this year, after previously closing 242 stores accross North America.

12. Zellers – in 2011 sold all 200 stores to Target, many of these stores were closed, others were transformed into Target stores.

13. Target – closed all its stores in Canada in 2015.

14. Holt Renfrew – closed its stores in Ottawa and Quebec City.

15. GUESS – closed 50 stores across North America in 2014, 19 stores in 2013.

16. Parasuco – closed all their stores in 2015.

17. Chapters/ Indigo – closed at least 5 stores during the last two years.

18. Grand & Toy – closed all their stores in 2014.

19. Costa Blanca – closed all their stores in 2014.

20. Black’s Photography – closed all their stores in 2015.

21. Comark Inc. – closed numerous Cleo, Ricky’s and Bootlegger stores.

22. Dawgs Inc. – based in Saskatoon, Saskatchewan, have been closing stores in 2015.

23. Le Naturiste – a Quebec chain of stores selling natural vitamins and health supplements, have been closing stores in 2016.

Walmart Will No Longer Accept VISA Cards

In a surprising move, a few days ago Walmart Canda announced that it will no longer accept VISA credit carda in its Canadian stores. According to Walmart’s website, this move will help the company save more than $100 million per year, savings they could use istead to help them keep their low everyday prices. (Walmart Canada to stop accepting Visa cards due to ‘unacceptably high’ fees

For many years, and especially throughout the recent retail apocalypse, many thought that the Walmart chain will be the last one standing. This year, we started to see this change. In January 2016, Walmart announced that it will close 269 stores worldwide, more than half of them – in the US. No Canadian Walmart stores were closed, but this new move shows that Walmart Canada might be under pressure. Pressure to keep prices low, trying to cut corners and save money, wherever they can. Trying to cut corners in order to keep prices low.

Another Canadian chain did something similar, though not quite the same. In the spirit of saving money in order to keep prices low, in April of this year, IGA (owned by Sobey’s) announced that they will no longer offer free products with a purchase of $70 or more. Instead of giving free products to an average of 450,000 customers per week, they would lower prices in the province of Quebec in an attempt to attract more customers. (Sobeys Quebec drops prices on over 8,500 products). A few weeks after this new business plan was implemented, customers started complaining that either prices were not lower than before, or only a few products per week actually cost less than usual. In addition, IGA increased the prices of a couple thousand products! (La Presse, IGA a aussi augmenté le prix de 2000 produits) In the end, it all seemed like a marketing strategy, intended to mislead customers and make them believe all these changes were made for their benefit, when, in fact, they were a cost-cutting mesure.

It seems that all those trying to survive the retail apocalypse that we have been witnessing during the last two years, are constantly looking for ways to decrease their expenses, making sure they can stay competitive in an environment of increasing inflation. It is one more of the stages of inflation that I write about, confirming the continuing trend we can all see happening around us.

Employment Numbers for May, 2016

A couple of day ago we got the employment numbers for the month of May 2016. The Canadian economy added 14,000 new jobs, putting the jobless rate at its lowest since July 2015 (Canada adds a surprise 14,000 jobs in May).

At first glance, this sounds like good news. When we look beyond the numbers, however, we see that there is more to them than meets the eye. For example, right now, Statistics Canada are doing their census of the Canadian population. For this reason, they have hired 35,000 people to do the job (Statistics Canada Hiring 35,000 For 2016 Census). If you look at the ads posted by Statistics Canada, most jobs start during the months of April or May (thus included in the employment numbers for those two months), and the employment period for those hired would continue through the end of July. So while we are talking about good, well-payed jobs, they are temporary. Which means we should look beyond the numbers before we rejoice at the news of some 14,000 new jobs across Canada. We must rather wait for the August job numbers, after the contracts of all those 35,000 temporary workers end.

It might surprise you that, according to Statistics Canada’s Labour Force Classification, the labour force consists not of two, but three groups of people – employed, unemployed and not in the labour force. Now this third group, the people “not in the labour force”, are very important, and here’s why: it is thanks to this group that the unemployment rate currently stands at 6.9 % . If we were to add the “not in the labour force” group to the unemployed, we unemployment rate would be significantly higher.

So who is included in this third group? According to Statistics Canada, “not in the labour force” means “persons who were neither employed nor unemployed”. Now, I believe that one can either be employed or unemployed. What other possibilities could there be? Well, you see, these are “persons who were without work and who had neither actively looked for work in the past four weeks nor had a job to start within four weeks”. (Classification of Labour Force Status) So, if you are unemployed, but have not had an interview during the last four weeks, even if you still want to find a job and start to work again – well, unfortunately, you’re no longer considered unemployed. If you had looked for a job within the past 4 weeks, but you are a full-time student looking for a full-time job – then you’re “not in the labour force” as well, even though you actually are looking for a job! Also, if you hadn’t worked within the last year, hadn’t looked for work during the past 4 weeks, and will not be starting a job within the next 4 weeks – then you’re also “not in the labour force”. So if you have been unemployed for a longer period of time, or have given up as you have no hopes of finding a job – well, you’re not unemployed. You are what they call a “discouraged worker”. And there are many others like you in Canada – a whole 10 million of “discouraged workers”! (Labour force, employment and unemployment, levels and rates, by province).

OK, now let’s exclude, for example, those between the ages of 15 and 19, as most of them (though not all) are still in school or getting a professional or college degree. According to Stats Canada, there are 2,099.4 thousands of them (which is about 2,099,400) (Statistics Canada, Population by sex and age group). So let us subtract these almost 2,100,000 people from the 10,000,000 “not in the labour force” (assuming that all of them are unemployed and have not been to an interview in four weeks, which is probably not the case – just giving them some leniency here). We’re still left with more than 7,900,000 people who are discouraged workers!

And, even if we do account for people who could be disabled, or caregivers, or stay-at-home moms, for example, we still have a whole lot of “discouraged workers” – almost 8 million of them! For a population (aged 15 and over) of 29,279,800 people, having about (with leniency) 8 million people “not in the labour force” seems quite a lot! (Out of those, 19,278,000 are considered the actual “labour force”, 17,946,000 of them are “employed”, a bit more than a million (1,331,400) – “unemployed”, and the difference is made up of those 10,001,800 “not in the labour force”.)

So, no matter how much the mainstream medias try to convince you that “everything is great”, always look beyond the numbers, and do your own research! Things usually aren’t as good as they seem.

Inflation of Food Prices

Today we got some more bad news, this time about the inflation of food prices. It seems that, almost every day now, we’re getting more and more negative news on the state of the Canadian economy.

According to a research done by Ontario’s Guelph University and Nova Scotia’s Dalhousie University, prices of fresh produce have been increasing, with inflation going into the double digits. In April 2016, average fruit prices were 11.7% higher than in April 2015, and vegetable prices were 14% higher. The highest increases were in the prices of cauliflower (which, at one point earlier this year, sold on average for a price of $8 Canadian for a head of cauliflower, and apples, which have an increase of almost 24% year-over-year. (TVA Nouvelles, CBC News, May 6, 2016)

According to the researchers, this double-digit inflation is the reason why more than 2/3 of Canadians surveyed said they refrained from buying certain fruits and vegetables during the last 12 months, with almost half of Canadians substituting fresh produce with frozen one, and about 17% buying fruin and vegetable juice instead of fresh fruits and vegetables.

And, yet again, this is a part of an ongoing trend, with prices rising month after month. In January, for example, the price of lettuce was 18% higher than in January 2015, with average vegetable prices rising by 18% that month on a year-over-year basis. The biggest increase last January was in the price of tomatoes, which rose by a whopping 30% in one month alone!!! (Statistics by Consumer Price Index)

Here, yet again, are some of the”symptoms” that I write about in my book. It is enough to look around and see what is going on, check the “vitals” of the economy for ourselves. Doesn’t this make you worried about where things are going?

“Symptoms” of Trouble Ahead

About a week ago, I was driving through the area, and, for the first time ever, I saw three houses, repossessed by the bank, on the same street. I can only ever remember seeing a few houses repossessed by a bank during the last decade. Now, all of a sudden, there were three, on one street only!

That same afternoon, I met some new neighbors, who had just bought another house in the same area, also a house that had been repossessed by the bank.

Then this week, the statistics on final notices and repossessed homes for the province of Quebec came out, and guess what: The number of homeowners (mortgage borrowers) who received a final notice (sent after they have been in delinquency on their mortgages for a period of time) jumped by 18% year over year during the month of May 2016 (“TVA Nouvelles”, June 2, 2016).

What is even more troubling is that this is not an isolated event, but a part of a trend that, unfortunately, seems to be growing. A similar increase was noticed during the month of April as well, and last February the rate of final notices issued jumped by 11%, compared to February 2015.

During the same month, May 2016, the rate of repossessed homes jumped by 21%. Then last February, for example, the rate of repossessions had skyrocketed by 47.8% year over year (according to “Journal de Montreal”)! In January of this year, the rate was 28% higher than in January 2015.

How many of you had actually heard or read about this ominous trend recently in the mainstream news? Let me guess… Most of us, especially those who have no time to make research on that topic, probably would never even know about this!

One of the things I mention in my book is looking for what I call “symptoms” all around you. Have you seen repossessed houses in your area? Do you know people who have lost their jobs? Did you notice an increase in food prices in your area? Shrinking products maybe? These are the things we should be paying attention to. Those are the real indicators showing the true state of the economy.

No One is Warning Us… Really?!?

In my last post I talked about the alternative media. Are they the only ones sounding the alarm and warning of an impending financial disaster? No, not really! Below you can see a list of people from the elite, and what they had to say about the upcoming economic crash:

Just last week, the Prime Minister of Japan, Shinzo Abe, warned of the re-emergence of a Lehman Brothers-scale crisis.

Last January, during a meeting with our Canadian Prime Minister Justin Trudeau, the billionaire George Soros warned Mr Trudeau that he was being too optimistic about the global economy. In fact, Mr Soros has been quite vocal with his warnings, even stating that it is 2008 all over again.

William White, Swiss-based chairman of the Organization for Economic Co-operation and Development (OECD), talked about the global financial system facing a wave of debt defaults. According to him, the situation is worse than it was in 2007. Mr White was one of the few who issued similar warnings between 2005 and 2008, right before the Great Recession.

Professor Robert Shiller, Sterling Professor of Economics at Yale University and laureate of the Nobel Prize in Economics, has been talking about the bubbles that exist currently across numerous asset classes. He speaks about a bubble in the bond market and in the stock market. Professor Shiller warned about the 2008 housing crisis years before it happened, as well as about Brazil’s housing bubble. He also correctly predicted the dot-com bubble in his bestselling book, “Irrational Exuberance”, more than a year before the crisis started.

Others have issued warnings as well. Among them are Carl Icahn (an American businessman and investor), Peter Schiff (CEO of Euro Pacific Capital, who correctly predicted the 2008 housing crash), Alan Greenspan (former chairman of the US Federal Reserve, warning about numerous issues throughout the Western world) and many others.

So do not say that no one is warning us. In fact, today there are many more well respected economists and businessmen forecasting a dire future and a global recession, probably going into a global depression, tan there ever were before the 2008 economic crisis. Which is why it is ever more important to be prepared, and as independent of the system as possible!

Naive no more

I keep seeing and hearing how alternative media tries to warn people about the upcoming economic depression. More and more start to wake up to the harsh reality coming ahead. Those who believe that the catastrophe to come, is just a fiction, are getting fewer and fewer.

But then, for those who have already opened their eyes to the truth, there is no clear answer on what to do. How do you live through and survive economic collapse? That is the pounding question!

Some have tried to create an algorithm on how to prepeare, others even train for it, but, as someone who has already lived through economic collapse, I believe that there isn’t only one, concreate answer.

Anyone who wants to survive through what is coming our way, will have to use his own head and learn to adapt and react to harsh and fast-changing conditions. Using a combination of assets and skills will be the key.

It will be way more helpful to ask your grandparents, or to read about the way people lived during the Great Depression, or the Great War, than to watch entire seasons of prepper shows!

Let us not waste our time and resources! The harsh times are already here, it will not be getting any better in the near future!