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ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION

July 11, 2018 | D-day

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

Yes, I know rates just went up, the White House is escalating the momma of all trade wars and Trump is drowning those decadent Europeans in a spray of testo, but let’s also remember it’s July. Chill. Live the moment. And remember what this blog is really about.

“After many years of following your greater fool blog, which of course subtly disguises itself as a financial management site,” says Jeff, “I thought maybe you should do an annual  D-day event – a day to remember our best friends, which is what this blog is all about after all  🙂

“How about once a year you do a D-day post and only allow posts about our best friends.  Links to videos and picture allowed maybe even embedded.  That would be sweet.”

It would. I’m good with that. A dog day. We could use one.

So, over to you, the steerage section, blog macroeconomists, house-humpers, perplexed moisters, closet bank readers, cynics, stock cowboys, moldy basement dwellers, wild-eyed BC Dippers, Trumpaholics, renegade realtors and deplorables. Let’s celebrate what binds us. Canines. The universal symbol of goodness and loyalty in a world gone mad with division and hate.

So, yes Jeff, you can post a reason why your pooch is the best, plus a link to some cute thing (s)he’s up to. Everyone else, too.

Here’s my contribution. Bandit holding court in the lobby of the King Edward Hotel in DT Toronto. On his way to the lounge for brandy & a Montecristo, he paused for this selfie.

  

Now, about those rates. A quarter-point increase ain’t much, but every time the central bank raises (this is #4) it make a lie of what you’ve been told so often on this pathetic blog by others – that rates cannot increase. Of course they can. They are. They will again.

Still low by every historic measure, the cost of money has lots of room to increase. The Plozzer and his minions laid out the reasons succinctly in Wednesday’s statement. (a) The global economy is growing again, bigly. Well over 3% this year. (b) The US is hot, so there are more rate hikes coming there, and a stronger American dollar. We must keep up. (c) Oil is gaining ground. (d) Our dollar is weak and needs propping. (e) The maple economy is strong enough to withstand higher interest costs. (f) Rate increases are a good thing because they’re dampening household spending and stabilizing real estate. (g) Our exports are strong thanks to the global and US economies. (h) Business investment is robust and corporations are making a pile. (i) Inflation will be 2.5% which is near the top of the central bank’s permitted range.

So, up she goes. And there’s more to come. “Governing Council expects that higher interest rates will be warranted to keep inflation near target and will continue to take a gradual approach, guided by incoming data.”

  

So what about the trade wars? The Dow gave up 200 points Wednesday after the White House said another $200 billion in anti-Chinese tariffs could be around the corner. Meanwhile that 25% tax on Canadian-made vehicles is still very much on the minds of investors and economists. Apparently Donald Trump thinks the US economy is so strong, robust and invincible that America can withstand the lost jobs and pissed-off allies that a trade war inevitably brings.

Maybe it can. But people have long memories. Exporting pain never ends well.

As for Canada, our central banks are shrugging this off. Commenting on the war, and the effect of the recent steel and aluminum tariffs as well as the T2 government’s response, here’s the word: “Although there will be difficult adjustments for some industries and their workers, the effect of these measures on Canadian growth and inflation is expected to be modest.”

In other words, the guys in charge see no disaster. No recession. No reason to panic, move into your mom’s basement, buy gold coins or hoard Cottonelle. It’s all good. Except if you have a LOC or a VRM. Then, life might become a bitch. So why not share it with a furry one?

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July 11th, 2018

Posted In: The Greater Fool

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