Bill’s Blog | September 26, 2023
Firstly, Canada and many developed nations have experienced disinflation from a year ago (but we still have high inflation on everything that matters). Last year, we were at 8% inflation, and now at 4%, so overall, everything is 12% higher in cost. Government statistics are underreported due to creative statistics! The average rents across Canada are now $2100 per month, a 12% increase from a year ago. You can believe Jerome Powel now when he says, “Higher and longer for interest rates.” Until something breaks, rates will not go down. If history repeats from the last two big inflation cycles of the 1940s and 1970s, there were three waves of inflation, and the last wave was the worst. One down and possibly two to go, and only time will tell.
As I have stated in past blogs, central banks cannot fully control inflation, especially when politicians run enormous deficits and have policies that create inflation, as we have in Canada. Canada is in serious trouble economically with the current class of politicians, as they are the source of most of our nation’s severe problems and crises. Central banks cannot reduce rents, housing prices, food, or energy costs. The bond markets validate this as long-term rates continue to rise.
All major central banks’ rapid interest rate rises over the last 18 months profoundly impact highly indebted individuals, businesses and governments. We continue to see significant defaults in many sectors and slowing growth. For example, BC will have a meagre economic growth forecast for the next two years or longer due to the growing debt/deficits, over-regulation, increased taxation/fees and extreme real estate/rental prices in much of our Province. Please read the recent and brief Financial Post article: https://financialpost.com/news/b-c-quebec-seen-struggling-lowest-growth-canada
Over the weekend, I listened to an excellent interview hosted by Jay Martin with brilliant guest Louis Gave of Gavekal Research. Louis has decades of experience as a high-net-worth portfolio manager/analyst in the USA and provides reports to large financial institutions. Louis pointed out that the rapid interest rate hikes are having severe consequences for the global economy (growing interest costs on massive national debts and the slowing economic activity) and, second, oil prices, pushing to the $100 a barrel price range (possibly to the $150 a barrel if we have another economic/geopolitical shock.)
Louis explained that 3/4 of the world’s population does not care about the C02 agenda of the West (as I have mentioned many times, scientifically unproven). India, China, and Asia countries are happy to purchase Russian oil and gas at 50% discounts. Leaders and countries that want to improve their citizen’s standard of living require affordable energy. Canada, please take note! The Saudis have broken ranks with the USA for many reasons, Biden’s policies being a key reason. The Saudis are now BRICS members, and they have made a pact with Russia to decrease the oil supply for the foreseeable future, which has caused oil to spike by 35% in the last quarter. Expect higher energy prices to continue.
Remember, the West’s prosperity for the last 100-plus years has been 100% tied to vast supplies of low-cost energy they controlled and technological advancements. Do you blame developing countries for wanting the same higher standard of living? So, with rising energy prices in the West due to unrealistic policies/agendas and lower costs in the East, who do you think will win this battle? The West will struggle deeply with inflation, declining living standards, devalued currencies and rising energy costs for years unless we change our politicians and policies. Again, I am all for environmentally cleaner energies and realistic planning, but not empty politics with no real plan. The USA has spent 4 trillion dollars on wind and solar, proving a failed and costly strategy. There has been only a 2% decline in fossil fuel usage in the last 20 years in the US, and wind and solar are incredibly costly and unstable energy sources for the power grid. But, let’s keep doing the same thing cause it is only taxpayer’s money. How sad!
My friends, I encourage you to keep educating yourself as we are in turbulent times. Please join me, James Longstreet of Fivefold Wealth Management (Calgary) and his guests in our upcoming webinar with Florion Grummes of Midas Touch-Consulting from Germany. Here is what you will learn:
Economic Forecast and Major Trends 2023 & 2024 with Florian Grummes
Join us for this 45-minute webinar and Q&A to follow (15 minutes)—special guest from Germany, Florian Grummes of Midas Touch-Consulting. Florian is a sought-after speaker at financial/commodity/cryptocurrency conferences in the EU and the Middle East. Florian is also a regular guest on Kitco News, the David Lin Show, and other online financial platforms. Florian will share his insights and charts on what he foresees for the remainder of 2023 and projections for 2024. You won’t want to miss this webinar. Please register and invite family and friends to join us for this special event. Finally, please bring your questions, and we will do our best to have Florian answer them. Please use the registration link below.
You are invited to a Zoom webinar.
When: October 7, 2023, 10:00 AM Pacific Time (US and Canada)
Topic: Economic Forecast and Major Trends 2023 & 2024 with Florian Grummes
Register in advance for this webinar:
https://us06web.zoom.us/webinar/register/WN_zrjeRBBMS7unYa0Ky6G5Qg
After registering, you will receive a confirmation email containing information about joining the webinar.
Thank you, and I hope you join us on October 7.
PS For a sneak preview of Florian, please watch a recent interview he did on Wallstreet Silver (18 minutes) called:
Gold & Silver Ready To BREAKOUT? Precious Metals Update https://www.youtube.com/watch?v=3aAv1eHTBck
Bill Westmacott, Financial educator and Wealth Solution provider in BC and beyond