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Hell Just Froze Over… France Just Rejected SocialismBy
Tuesday, November 22, 2016
Don't these campaign promises sound like the words of a candidate destined to lose?
A candidate with these promises would never get elected in America. But I have some shocking news for you... Chances are GREAT the new leader of France will come into power based on these promises.
France, of all places!
France is known for embracing socialism... But it appears the French have figured out that working less than anywhere else – and getting more from your government than just about anywhere else – simply doesn't work out over the long run.
It sure looks nice on paper...
Sounds like a great life in France, right? The problem is, it doesn't work... To help pay for all these benefits, France instituted a 75% "supertax" on incomes of more than 1 million euros. As a result, rich people fled France – and businesses fled, too. (France dropped the supertax two years ago.)
Today, the unemployment rate in France is in the double-digits, versus 5% for the U.S. The youth unemployment rate is even worse... about 24%.
It appears the people of France are finally tired of it...
François Fillon just became the new front-runner in France's 2017 presidential election – campaigning on promises to do away with many of France's socialist policies. When he took office as premier in 2007, he called France "a bankrupt state." As Bloomberg reported...
Fillon's shocking win reminds me of two things...
These three events are probably not isolated... It's the voice of the people rising up and taking back power from the political elites. In some cases, it should be good. In other cases, well, it's not so good...
For example, more economic freedom and less government intervention is almost always a good thing... It creates economic growth.
On the flip side, restricting international trade and immigration is typically a bad thing. New restrictions on international trade arguably kicked off the Great Depression in the 1930s.
Trump's victory in the U.S. was surprising... but France rejecting socialism? I think Hell just froze over...
Good investing,
Steve
Further Reading:
The results of the U.S. presidential election were shocking. But earlier this month, Steve explained why it could be a good thing for the stock market. "The message from history is this: Don't worry so much about it," he writes. Get the full story here: Stocks Soar When Republicans Control It All.
Two weeks ago, Doc Eifrig told DailyWealth readers to ignore the noise. "Too often, investors get caught up in macroeconomic trends and the drama of interest rates," he writes. See what he says you should focus on instead right here.
Market NotesA NEW HIGH FOR 'THE WORLD'S GREATEST BUSINESS' The world's greatest business is continuing its incredible march higher...
Longtime DailyWealth readers know we're big fans of the insurance industry. Insurance companies collect premiums from their customers. If they're good at what they do, the premiums exceed what they pay out in claims. In the meantime, they get to invest all that money (the "float"). That's why we call insurance "the world's greatest business."
A good way to check the industry's pulse is through the iShares Insurance Fund (IAK). Its holdings include industry titans AIG, MetLife, and Prudential Financial. It's an easy "one click" way to invest in these types of stocks.
As you can see in the chart below, IAK is in the midst of a steady, long-term uptrend. The fund just hit its highest level since the financial crisis of 2008/2009. It's no wonder insurance companies are the only investment Porter hopes his kids ever make...
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