Juggling Dynamite

Danielle was a guest today on the Financial Survival Network with Kerry Lutz talking about recent events in the global economy and markets. You can listen to audio clip here.

What level of defense spending does the US want to continue? What level of entitlements does it intend to fund?
These are hotly debated questions on the right and left. But here is the final arbiter for individuals and governments: we can afford what we are able and prepared to fund. This big picture on US tax receipts over the past 65 years confirms that tax receipts are near historically low levels today. And this data is before the next drop in revenue that will occur once the incoming recession takes a fresh bite out of GDP. Math must be faced by all sides.

The Canadian economy “unexpectedly” shrank by 0.1 percent in August, pointing to slower growth in the third quarter than in the first half of the year and supporting a Bank of Canada message that interest rate hikes are not imminent– the Canadian dollar is deservedly skidding against its U.S. counterpart.

Source: Cory Venable, CMT, Venable Park Investment Counsel Inc.

We patiently await some reality repricing in the stock market. I find the top-down perspective of long-term charts helpful:

Source: Cory Venable, CMT, Venable Park Investment Counsel Inc.