Canada’s stock market delivered a 31.7% return in 2025—the best performance globally. The United States ranked eighth out of the top ten largest stock markets by market capitalization, posting just 14-16%.
Here’s what financial professionals track that headlines miss: when adjusted for currency depreciation, the actual American stock market return effectively hit zero. The Canadian return exceeded 34% when currency appreciation is included.
I’m El of House of El on YouTube. I have a PhD in Computer Science, and I use data analysis to spot patterns in geopolitics and economics.
The mechanism reveals systematic American economic vulnerability masked by propaganda. When the Attorney General deflects congressional questions about the Epstein investigation by shouting “the Dow hit 50,000,” and the Dow immediately drops below 50,000, the disconnect between political rhetoric and economic reality becomes measurable.
The First Rule of International Investing: Currency Matters
When you work in finance, you learn the first rule of international investing: nominal returns mean nothing without currency adjustment. According to Trading Economics, the Canadian TSX climbed from approximately 25,000 to over 33,000—representing gains of 29-32% depending on measurement period.
The S&P 500 rose approximately 14-16% in 2025. Simultaneously, the US dollar index declined approximately 11% against a basket of world currencies.
The mathematics are straightforward: an 11-16% stock gain minus 11% currency loss equals near-zero real return when measured in global purchasing power. Investors holding US stocks made minimal actual profit in international terms.
Cross-referencing Canadian stock market data with currency movements reveals the opposite pattern. Canada’s TSX climbed 29-32% in 2025. The Canadian dollar strengthened from approximately 69 cents USD to 73.5 cents USD—roughly 7% appreciation.
Combined effect: approximately 34-36% real return in global currency terms. This represents more than double the American nominal gain and infinitely more than the American currency-adjusted reality of near-zero.
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Canada #1 Globally: The Rankings That Matter
Anyone trained in quantitative analysis can see the correlation. Stock market rises driven by currency debasement indicate economic weakness, not strength. Stock market rises accompanied by currency strength indicate genuine capital formation and investor confidence.
According to MSCI’s methodology, the 10 largest equity markets by capitalization in 2025 were: U.S., China, Japan, India, U.K., France, Canada, Germany, Switzerland, and Saudi Arabia. Among these top markets, Canada led the way with a 36.5% total return, narrowly ahead of Germany (36.3%), the UK (35.1%), and China (31.2%).
The United States ranked eighth among major global markets.
The composition of these returns reveals the underlying mechanisms. According to Morningstar analysis, Canada’s performance was broad-based across financials (up 31%), energy, and materials (up 88%). These represent real economic activity: extracting resources, financing nation-building projects, providing capital to productive enterprises.
American stock gains concentrated overwhelmingly in technology and artificial intelligence stocks. The trading multiples on AI-related companies reached speculative bubble territory. Concentration in tech stocks creates wealth for corporate CEOs and major shareholders while providing minimal benefit to average workers.
Real Economic Activity vs. Speculative Bubbles
We’ve covered how the EU won the tariff war and forced Trump to remove tariffs on autos and aluminum—demonstrating American institutional weakness. The stock market pattern reinforces this: American apparent strength dissolves under analytical scrutiny while competitors show genuine economic fundamentals.
From a systems perspective, the divergence is predictable. Canada announced massive nation-building infrastructure projects. Energy sector investment surged. Mining operations expanded. Financial institutions positioned for lending into real economic activity. Investors bought these stocks anticipating productive future returns.
The Globe and Mail reports that Canada’s TSX had its biggest annual gain in over 15 years, marking three straight years of gains and outpacing the S&P 500. The Canadian benchmark closed the year up 29%, compared to the S&P 500’s 16.4%.
American tech sector growth, by contrast, represents electrons sold globally. An American AI company may have headquarters in the United States, but revenues come from worldwide markets. Domestic economic benefit is minimal compared to stock price appreciation captured by wealthy shareholders.
If you know what to look for, the wealth concentration indicators are clear. When stock market gains benefit primarily corporate executives and major shareholders rather than average workers, the economy is experiencing inequality expansion, not broad prosperity.
The Political Theater: Propaganda Meets Reality
The political theater surrounding these numbers demonstrates institutional credibility collapse. Attorney General Pam Bondi appeared before Congress to answer questions about the Department of Justice’s handling of the Epstein investigation. When asked how many co-conspirators she had indicted, she deflected by shouting about stock market performance.
Her exact words: “The Dow is over $50,000 right now. The S&P at almost $7,000 and the NASDAQ smashing records. Americans’ 401ks and retirement savings are booming. That’s what we should be talking about.”
The Dow subsequently dropped below 50,000. The talking point collapsed immediately. Congressional testimony now includes verifiably false economic propaganda deployed to avoid accountability questions. The mechanism at work demonstrates systematic institutional decay.
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Currency Depreciation: The Hidden Story
Meanwhile, the currency depreciation underlying American stock gains reveals the actual story. Dollar weakness of 11% over twelve months represents loss of global purchasing power. Americans holding dollar-denominated assets became 11% poorer in international terms regardless of stock price increases.
The bond market is already rejecting the USA’s unsustainable debt trajectory, as interest rates climb despite stock market propaganda. When currency depreciates while stocks rise nominally, the market is pricing future inflation and debt monetization.
Historical precedent shows us this pattern consistently ends in crisis. Countries running massive deficits while debasing currency experience apparent stock market booms that collapse when currency crisis accelerates. The correlation between deficit spending, currency weakness, and speculative asset bubbles is textbook economics.
Consider the second-order effects. Canadian investors who bought TSX stocks at the beginning of 2025 gained 29-32% in stock value plus 7% in currency appreciation. Total return approximately 34-36% in USD terms. American investors who bought S&P 500 stocks gained 14-16% in stock value minus 11% in currency depreciation. Total return approximately 3-5% in global currency terms—or near zero depending on exact measurement.
The Cascade Effect: Capital Follows Real Returns
This creates a cascade effect in capital flows. International investors recognize currency-adjusted returns drive actual wealth. Capital flows toward markets offering real returns rather than nominal illusions. Canada, with the #1 performing stock market globally plus currency appreciation, attracts capital. The United States, with currency depreciation negating stock gains, experiences capital flight masked by domestic speculation.
Fortune magazine reports that Canada’s S&P/TSX Composite Index soared more than 40% from an April 8 low, ending the year with a 29% advance—the biggest year since 2009. The index notched a record 63 new closing highs along the way.
The feedback loop between currency weakness and asset price inflation accelerates. Domestic investors buy stocks as inflation hedges, driving nominal prices higher. Currency continues depreciating due to massive deficits and debt monetization. Stock prices rise further in nominal terms while real purchasing power declines. The cycle reinforces until currency crisis breaks it.
The Professional Analysis: What Experts Actually Say
We’ve shown how the Buy European initiative is working and hurting America through systematic procurement redirection. Stock market data reveals the same pattern: European and Canadian markets demonstrate genuine economic strength while American apparent strength dissolves under currency-adjusted analysis.
Here’s the part analysts pay attention to: when a country’s stock market rises but its currency falls proportionally, professional investors recognize currency debasement, not wealth creation. The numbers tell a story most analysts miss in headlines celebrating 50,000 on the Dow.
My prediction: by mid-2026, the currency-adjusted stock market divergence will widen further. American dollar depreciation will accelerate as deficit spending continues. Canada’s commodity-based economy and strong currency will deliver 20%+ returns while American currency-adjusted returns remain near zero or turn negative.
By year-end, international capital allocation will shift measurably toward Canadian and European markets offering real returns. American markets will experience continued domestic speculation driven by inflation hedging, creating further nominal gains with zero real purchasing power increase.
The correlation between political propaganda and economic reality will continue inverting. Officials will shout louder about stock records as currency weakness accelerates. The pattern is mathematically predictable: countries losing currency stability compensate with increasingly disconnected political rhetoric.
The mechanism is clear: examine currency-adjusted returns, not nominal stock prices. Follow capital flows toward real economic fundamentals, not speculative bubbles. Track wealth concentration versus broad economic benefit. These indicators reveal American vulnerability masked by headline numbers.