Canada to Join the European Union?

You say it here and it comes out there. It’s like magic!

Earlier this month at the International Living Go Overseas Bootcamp in Tampa, I was chatting with some attendees at a cocktail reception for VIPs. In one of my presentations, I’d spoken about my idea that the US will emerge in a better place at some point in the 2030s, but that the path from here to there is a minefield of financial and economic pain for American wallets.

More than one person asked me what that might mean for Canada.

My comment: “It will be very bad for the Canadian dollar because of how strongly tied Canada is to the US. But you know what would really help Canada? If the country decided to join the European Union in some fashion and become the North American outpost of the EU. I’m not saying that’s going to happen, but that would change Canada’s trajectory very positively.”

And then I’m back home in Portugal days later, scrolling the usual suspects of news sites on my phone, and I come upon this headline from CTV News: Carney pushes idea of making Canada ‘associate member’ of EU.

Lo and behold—yesterday Canada was invited by the EU Commission President to become the bloc’s first associate member.

Now, to be clear, today’s dispatch isn’t really about Canada, per se. Canada is just the supporting actress threatening to upstage the Queen Bee who goes by the stage name “Lady Liberty.”

Canada and the current White House administration are in a tussle for all kinds of political reasons I won’t get into.

I will only say that when a country as joined-at-the-hip as Canada starts publicly shopping for a “unique alliance” with Brussels, we’ve jumped the shark from diplomatic spat into a complete rewiring of the US/Canada relationship.

Canada is just today’s headline, however.

This same pattern—countries beginning to build around the US and the US dollar—is repeating everywhere.

I’ve noted this in other dispatches: Central banks are gobbling up gold like the Cookie Monster gobbles up Oreos. The second quarter alone saw central bankers grab a record 289 tonnes of gold, up 62% year-over-year.

Countries are also actively and quickly building financial plumbing that allows them to trade with one another and move currency globally in a way that bypasses the dollar system entirely.

The easy sentence to write here is, “This is not good.”

But actually, it is kinda good, albeit in a roundabout way.

I’ve been warning for several years that a crisis is coming to America, and I’ve begun writing that America not only needs this crisis but it actually wants this crisis. It’s the path that allows the dollar to relinquish world reserve status, which is the painful but necessary first step in the US regaining the manufacturing base it lost over the last several decades.

My bet is that Canada does become an EU outpost, that Canada/EU trade becomes a much fatter pipeline, and that the Canadian dollar becomes much more deeply tied to the euro. Trade will flow between the two bodies in local currencies rather than the dollar, and Canada’s central bank would naturally see its USD reserves draw down as euro reserves increase.

And just like that, Canada becomes the template for a global reordering.

If the country most tightly bound to America can walk into a formal, alternative economic bloc without collapsing, that gives Mexico permission to think about a deeper Pacific framework that moves it away from its overbearing northern neighbor.

It gives Japan and Korea permission to build out Asian arrangements that don’t route trade, money, and political decisions through Washington.

It gives the Gulf states permission to keep multi-currency-ing their oil settlements (rather than keeping oil priced solely in dollars) without worry.

And just like that, the world you and I have known for 80 years has tilted in a different direction.

Canada is showing the world that the show can go on without Lady Liberty in the lead.

There are big implications to that.

More to come soon…