Originally published at: https://peakprosperity.com/daily-digest/declining-trade-vw-woes-signal-economic-recession/
Economy
As the dust settles from the 2024 U.S. election, economic realities are coming into sharper focus. Analysts such as Matthew Piepenburg and Grant Williams are reportedly expressing concerns over a potential sovereign debt crisis, emphasizing what they see as the unsustainable nature of national debt and its implications for government bonds and currencies. This concern is reflected in the stock market, where the S&P 500’s market capitalization has reached high levels, which some suggest could indicate a bubble that might lead to a downturn. The rise of so-called zombie companies and insider stock selling is noted, prompting some investors to consider assets like gold and silver.
In Europe, Volkswagen is facing economic challenges as tens of thousands of employees protest proposed pay cuts. The German automaker’s situation highlights issues within the European automotive sector, reportedly exacerbated by climate change policies and competition from cheaper Chinese electric vehicles. These developments could impact Germany’s economy, which is heavily reliant on the automotive industry, and by extension, the broader European market.
Global trade is under scrutiny, with recent data showing a decline in U.S. imports and exports. This downturn is reminiscent of patterns seen during the Great Depression and raises concerns about the global economy’s health. Despite efforts to stimulate growth post-2008, trade volumes have not fully recovered, leading to discussions about more aggressive rate cuts. The incoming Trump administration faces the challenge of addressing these issues, with plans to boost oil production and reduce the debt-to-GDP ratio.
US Politics
Fifty-four Democratic lawmakers are urging President Biden to secure climate funds before the GOP takes charge. This push aims to lock in initiatives from the Inflation Reduction Act and Bipartisan Infrastructure Law, amidst concerns about future politicization. Meanwhile, revisions to U.S. economic data have revealed a less favorable picture than initially reported, with disappearing savings and rising credit card debt suggesting a challenging economic outlook.
In other news, Senator John Kennedy is challenging a VA policy that links financial aid requests to firearm restrictions for veterans. The policy, which automatically reports veterans seeking financial help to the FBI’s background check system, has sparked debate over due process and veterans’ rights. Kennedy’s proposed amendment seeks to prevent the automatic loss of firearms for veterans in need of financial assistance.
Geopolitics
Tensions between the U.S. and Russia continue. Russian officials, including Foreign Minister Sergei Lavrov during an interview with Tucker Carlson, have described the Ukraine conflict as a “hybrid war” and warned of escalating Cold War tensions. Lavrov’s remarks at an OSCE meeting highlighted the risks of a potential East-West conflict, criticizing Western military exercises and NATO’s expansion. Despite these tensions, there remains a possibility for diplomatic resolution, with President-elect Trump expressing a willingness to engage directly with President Putin.
Sources
Navigating the Debt Minefield: Post-Election Economic Realities Unveiled
Piepenburg argues that while the U.S. dollar remains stronger than other fiat currencies, its dominance is eroding.
Source | Submitted by rhollenb
US Stock Market: A Titanic Bubble on the Brink of a Modern Dark Age?
This is the informed people on the Titanic getting into the lifeboats, like, right now.
Source | Submitted by Rick
Volkswagen’s Pay Cut Protests: A Symptom of Germany’s EV Struggles and Economic Ripple Effects
Volkswagen is closing plants for the first time in its 87-year history.
Source | Submitted by rhollenb
Global Trade Woes: A Deep Dive into Declining Volumes and Economic Implications
Trade that is not growing is a sign of a whole bunch of negative things, including negative cyclical indications in the economy, but more than that, as we’ll get into here.
Source | Submitted by rhollenb
54 Democrats Push Biden to Secure Climate Funds Before GOP Takes Charge
Fifty-four Democratic members of Congress have signed onto a letter asking President Joe Biden to lock in future climate change initiatives by disbursing the promised funds before he leaves office.
Source | Submitted by bcoop
America’s Economic Mirage: Disappearing Savings and Revised Realities
In late November, $140 billion of American savings disappeared into thin air.
Source | Submitted by bcoop
Senator Kennedy Challenges VA Policy Linking Financial Aid Requests to Firearm Restrictions for Veterans
Under current VA policy, if a veteran who defended this country has to go to the VA and ask for help managing his or her financial affairs, the VA automatically reports that veteran to the FBI’s National Instant Criminal Background Check System, we call it NICS, and that veteran loses his firearm.
Source | Submitted by bcoop
Russian Minister Denies War with U.S., Labels Ukraine Conflict a “Hybrid War”
We officially are not at war, but what is going on in Ukraine, uh, is the—some people call it hybrid war.
Lavrov Sounds Alarm: Cold War Heats Up Amidst NATO-Russia Tensions
Lavrov Warns Europe The New Cold War Is Turning ‘Hot’