There are those in Europe who disagree. For example,
“Europe’s competitiveness is increasingly suffering from overregulation, slow and bureaucratic permitting processes, and in particular, high costs for most production input factors,” said Martin Brudermüller, the BASF chief executive. [1]
Mario Draghi put out a report last year on EU competitiveness, making the case that growth and competitiveness are fading in Europe.
For example, he writes “there is no EU company with a market capitalisation over EUR 100 billion that has been set up from scratch in the last fifty years, while all six US companies with a valuation above EUR 1 trillion have been created in this period.”
So, what is to be done? According to Draghi, nothing less than a fundamental rethink in how Brussels approaches investment, trade policy and business regulation will dig Europe out of its hole…If, as Draghi believes, the choice facing Europe is radical change or ‘slow agony’, then slow agony is what Europe will get.
I’m very leary of holding too many Treasuries, as the current GIC has a habit of defaulting on loans, and has openly peddled the idea of doing to US debt as well. Consequences be d@amned.
What has worked for me this year, meaning a yearly gain nearly identical to the S&P 500, has been a near balanced portfolio that included a lot of international. At times 40% worth. I’ve also had as much as 10% in precious metals through much of the year.
$VGK $VXUS $BNDX
$IDVO is very interesting, in that it is an international dividend stock ETF with a 5% yield, so it is nearly an equity holding and a fixed income holding rolled into one.
I’ve also held $GLD and $SLV. These are the only realistic way for me to hold precious metals in my IRA.
I won’t touch Bitcoin. Don’t fool yourself anyone, Crypto is a risk-asset, not a safe haven.
One thing that worries me is a municipal bond portfolio I have in my taxable account. I have a good relationship with my broker handling these but I am going to keep my eye out on those. I have it for the tax-free interest, given it is a taxable account and I have no state income tax as well.
Europe demonstrates that exorbitant taxation without spending restraint crushes economic vitality and thus speeds how fast the cliff arrives.
On the spending-cut front, only entitlement reform would make a meaningful difference, since programs such as Social Security and Medicare account for a majority of government outlays. No one countenances cutting benefits for current or near retirees. But Social Security and Medicare benefits for future retirees should be [means-tested](https://www.nytimes.com/2013/02/20/opinion/old-and-rich-less-help-for-you.html) — need-based, that is to say — and the starting age for entitlement payments should be linked to American life expectancy.
And on the tax front, it’s time for rich people like me to pay more.
I long opposed increasing the income level on which FICA employment taxes are applied (this year, the cap is $176,100). No longer; the consequences of the cliff have changed my mind.
Mitt also wants to close the cavern of the capital gains tax treatment at death for those with enormous estates. Because under the tax code, capital gains are not taxed at death.
and Sealing the real estate caverns would also raise more revenue: 1031 exchanges allow a real estate developer to defer and possibly avoid paying the capital gains tax on the profitable sale of a building. Depreciating the purchase price of a building, including the debt, shields income from taxes. As with the previous example, hugely profitable real estate properties held at death are not subject to the capital gains tax.
Yes, an American can open a brokerage account overseas, but it’s complex due to U.S. tax rules (FATCA, FBAR) and broker restrictions, requiring specialized firms like Charles Schwab International or Interactive Brokers, or working through advisors, focusing on U.S.-listed ETFs/stocks for simplicity, and needing careful compliance and potential local tax implications
After years of relative stability, trust in the national government has dropped 13 percentage points to 29% in 2025, while confidence in the honesty of elections has fallen by the same margin to 51%. Confidence in the judicial system has slipped nine points to 50%, and trust in financial institutions has fallen eight points to 42%…
Amid the turbulence at home, greater numbers of people would like to leave France. This year, 27% of French adults say they would like to move abroad permanently if they had the opportunity, more than double the percentage from last year (11%). While final data from the Gallup World Poll are not yet available for all countries in 2025, this 16-point increase is an annual jump relatively unmatched worldwide since Gallup started asking this question globally in 2007.
I think what I wrote above may have been misunderstood [by you]. I am not claiming that they (we) can’t create inflation, we clearly can. My comment was mostly on the word “away” from the “inflate it away” statement. We can inflate, but I don’t think we can easily eliminate the debt that way.
I suppose we can create $15T of 50-year bonds at a fixed low rate and have the Fed buy all of them. Then we can inflate them away. But the way things stand today? Not so easily done due to the constant refinancing.
Recent changes started with Yellen, and were, after appropriate criticism, enthusiastically embraced by the new administration.
So this may drive half-wit…, errm, well-considered ideas like coercing foreign nations to swap their T-Bills against century zero-coupon bonds (Mar-a-Lago accord).
Um, somebody should probably tell the past (recently on leave) Chair of the Council of Economic Advisors - Steven Miran. The dude has advocated for devaluing the dollar. Looks like his master plan is working -
That’s a long-running debate going back many decades. As you know, a weaker dollar makes US goods more attractive to foreign buyers, boosting exports and improving our balance of trade.
True, although higher costs for imported goods should not be exaggerated. Since imports are only 14% of US GDP, a 10% fall in the dollar would reduce real incomes by no more than about 1.5%. And this overstates the adverse effect of the weaker dollar on real incomes since some imports are either priced in dollars (like oil) or experience adjustments in the foreign currency price as foreign exporters adjust prices to offset the adverse effect of the weaker dollar on their exports.
