Your Survival Guy is in France, amid the country’s most recent bout of discontent. This time, the protesters are students demanding more school funding by burning down their schools. But France doesn’t have the money to meet the students’ ransom demands because its debt is high, it has no control over its currency, its economic growth is limited, and there’s little appetite for reform.
You can see in the chart below that France’s projected budget deficit as a percentage of its GDP barely improves out to 2031.
Wide deficits mean more debt, and funding that debt is becoming increasingly difficult for the French as the yields on French government bonds (OATs) rise.
There will be hard decisions to make for the French, or they will be made for them. Either way, the heart of Paris will be the crown jewel, especially in the areas recommended by Your Survival Guy. I’m in Paris now, and despite the discontent percolating on the periphery of the city, my favorite arrondissements are alive with activity.
High debt and rising interest rates are no real shock to Americans who are suffering from similar challenges. What the United States has going for it that France lacks is a path for growth. Look at some of what’s happening in America right now.
Manufacturers have been giving increasing hours to their employees, with the average weekly total rising to 41.9. These are levels unseen since before Covid.
Railroad traffic is being driven higher thanks to strong demand for metal ores to make steel for AI data centers and the movement of petroleum products by rail.
New orders for non-defense capital goods (excluding aircraft) have been climbing for months, though growth has flattened a bit in the last few months.
Perhaps the most encouraging sign of growth is the spike in construction contracts. AI data centers are driving a lot of that increase, but contracts for new hospitals, prisons, and roads are also rising. 
The wild card in every conversation about growth today is oil prices. WTI crude has fallen back below $100 a barrel, but remains high at $98.30/barrel. Until a sustained peace is found in the Persian Gulf, oil prices will remain unpredictable at best.
Americans are unsettled but enjoying growth in certain areas of the economy. My RAGE Gauge is stable for this month, but with an election on the horizon, risk exists.
Action Line: With risk in the air, you may need to make some hard decisions too. When you want help making the decisions for your retirement portfolio, email me at ejsmith@yoursurvivalguy.com. And click here to subscribe to my free monthly Survive & Thrive letter.
