By Michael O’Neill
‘Tis the season to be jolly, and no one is jollier than the Federal government which wants all Canadians to deck the halls with boughs of holly. To help with that holiday cheer, they are giving everyone whose annual income was less than $150,000 a $250 cheque (it’s in the mail, ETA Spring 2025) and a temporary reprieve from GST on some items.
Vibe-rations
Call it Retail Therapy for the masses. According to Finance Minister Chrystia Freeland, the dopamine rush from shopping could trigger a temporary feeling of happiness—and that, she says, will help boost the Canadian economy. “Happy shoppers spend money and create jobs.
Ms Freeland believes that Canada is suffering from a vibe-session. It’s a term invented by a US based financial blogger to describe a period where economic indicators appear stable or positive, yet public sentiment remains pessimistic. Ms Freeland claims that there is a disconnect between the positive economic news and how Canadians are feeling. While the Canadian economy seems poised for a soft landing—a genuinely good outcome—many Canadians aren’t experiencing that optimism. This gap in perception is influencing economic behavior in ways that aren’t beneficial for the economy.”
She is also out to lunch. Canadians fond of feeding themselves and their families are painfully aware that food inflation has spiked 21.9% since 2021. Sure, inflation is slowing, but prices keep climbing, and unless you landed a 21.9% pay raise, your grocery cart isn’t as full as it used to be.”
Ms Freeland suggests that the economy is heading for a soft landing. True, but Q3 growth at 1.0% y/y is still below what the Bank of Canada expected. The results would have been far worse if government spending due to the rapid increase in the Federal workforce hadn’t propped up the numbers. The Fraser Institute estimates the number of full-time federal government workers rose by 26.% between 2016 and 2023.
The GST holiday on some items, including restaurant meals, beer and alcohol is a nice reprieve at this time of year but it reeks of desperation by the Liberal party which is on track to lose close to 100 seats if an election were called today.
Vibe-levy
Speaking of vibes, the Canadian dollar, along with the rest of the major G-10 currencies are suffering from “Vibe-levy.” That’s the term to describe Donald Trump’s threat to impose a 10% across the board import duty with special (higher rates) for China, Mexico and Canada and the FX response to the news. Nothing has happened, yet the US dollar index (DXY) has rallied nearly 3.0% since the election.
Vibe-anarchy
Vibe-anarchy describes the pervasive sense that the world is spiraling into disarray, driven by fragmented alliances, populist movements, and the erosion of institutional trust. While the actual level of global disorder may not justify the sentiment, the “vibes” make it feel as though every nation is one misstep away from collapse.
It’s hard not to feel that way when China and Russia have teamed up to destabilize the world order. Besties, Putin and Jinping are sabotaging infrastructure, plan to trigger explosions on cargo flights, and have cut undersea communications cables in the Black Sea. And China’s sabotage efforts are in addition to its weekly intimidation of Taiwan and bullying of Philippines ships in the South China Sea while Putin likes to flex his nuclear muscles. China’s fingerprints were all over the failed declaration of martial law in South Korea. It’s hard not to believe that there isn’t some truth to President Yoon Suk Yeol’s claims of Chinese interference in domestic politics.
Vibe-donny
Vibe-donny describes the illusion of total control through chaos. It is the phenomenon where chaos and unpredictability are wielded as tools to project strength, disrupt norms, and maintain dominance. It reflects a perception of calculated anarchy, where the appearance of disorder creates an aura of control, leaving allies and opponents perpetually off-balance.
It’s working. Canada’s Prime Minster raced for an audience with Mr Trump just four day’s after Trump tweeted about levying a 25% tariff on Canadian imports. The visit is a prime example of Vibe-donny at work.
As the year winds down, traders worldwide are holding out hope for a little Christmas magic from Santa. Of course that would be “Vibe-Claus.
