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June 10, 2022 | The Internal Combustion Engine Vehicle has Begun its Journey into Obsolescence

The dominance of the internal combustion engine (ICE) vehicle is coming to an end as battery electric vehicle (BEV) adoption accelerates worldwide. While the demise of the ICE vehicle will take a decade or two, the impact is already being felt. The popularity of ICE-powered vehicles began in the early 1900s when the use of […]

June 3, 2022 | Canadian Banks Declare Premature Victory Over COVID

Canadian banks declared victory, prematurely, over the COVID-19 crisis by reporting increased profits, in most cases, and raising their dividends. The looming interest rate increases powered by the central banks and the markets did not deter the banks in their optimism. Are Canadian banks adequately prepared for higher interest rates and a recession? A closer […]

May 27, 2022 | Central Bankers Take on the Housing Bubble

Central bankers are in a tough spot. They would like to curb inflation, but they know that raising interest rates quickly could trigger a recession. In the 1970s central bankers lost the battle with inflation for many years, and eventually they were forced to raise interest rates as high as 20 percent. Can central bankers […]

May 20, 2022 | The Crypto World is Shaken to its Core

Luna and TerraUSD are the crypto currency tokens which collapsed earlier in May. About $3 billion of reserves are gone and questions about what happened to the stablecoins are piling up. Touted as a safe haven for holders of cryptocurrency, the Luna/TerraUSD system failed spectacularly, going from a peak value of $18 billion in early […]

May 13, 2022 | A Worldwide Food Crisis is Happening

The world is in a food crisis that will affect everyone. The inflation in crop prices is threatening to trigger widespread starvation in some poor countries. Grain producers will benefit from strong prices and increased demand for their exports. Russia, United States, Ukraine, France and Canada are main exporters of wheat in the world. Input […]

April 29, 2022 | Battery Costs for Electric Vehicles are Soaring

Worldwide demand for battery electric vehicles is soaring. The cost of materials needed for vehicle batteries is rising even faster. Will the cost of batteries bring the electric vehicle revolution to a sudden halt? In some countries, such as Norway, the conversion to battery-electric vehicles (BEVs) is very advanced. With punitive taxes on internal combustion […]

April 22, 2022 | Battery Costs For Electric Vehicles Are Soaring

Worldwide demand for battery electric vehicles is soaring. The cost of materials needed for vehicle batteries is rising even faster. Will the cost of batteries bring the electric vehicle revolution to a sudden halt? In some countries, such as Norway, the conversion to battery-electric vehicles (BEVs) is very advanced. With punitive taxes on internal combustion […]

April 8, 2022 | Is Canada’s New Climate Plan Ambitious or Absurd?

  On March 29th the Canadian government announced a plan to reduce carbon emissions across all sectors of the economy, targeting a 40-45% reduction below 2005 levels (see plan here). The government is committing to $9.1 billion in new investment towards carbon capture technology, zero-emission vehicles, and cleaner electrical generation. Many stakeholders are still digesting the plan, so […]

April 1, 2022 | How To Get Inflation and The Housing Bubble Under Control Again

The current inflation surge in Canada and around the world demands answers from government. Will inflation be brought under control? How? I was invited along, with others, to present on March 28, 2022, to the Standing Committee on Finance for the House of Commons on a Zoom call. The topic is inflation, and the housing […]

March 25, 2022 | China Evergrande Hit the News Again

China Evergrande hit the news again, with a surprising announcement that a creditor had seized US$2 billion of funds from a subsidiary of the company. Creditors are upset that one lender received preferential treatment from the restructuring process, which is now being run by the government of China. Will foreign creditors decide to withdraw all […]

March 18, 2022 | Russia Threatens To Use Nuclear Weapons

Russia is threatening to use nuclear weapons in the current conflict with Ukraine if western countries intervene. Is there a significant possibility of a nuclear war? V. Putin issued a vague threat, but everybody thinks they know what he was talking about. In his warning to Europeans and North Americans who might be thinking about […]

March 11, 2022 | Cost of Crude Oil Could Start a Recession

A doubling in the price of crude oil in a short period of time (a year or less) has been a reliable predictor of recession. In fact, every time in the post-WWII period when oil has doubled, there has been a recession. Will there be a recession after the current jump in oil prices? The […]

February 25, 2022 | Rising Inflation Could Signal The End of this Bull Market

Persistent increases in inflation signal the end of this bull market. The increase in inflation will push interest rates higher and stock market valuations will come down. The Markets Live segment of Bloomberg published a chart a few days ago that caught my eye. The chart shows the relationship between Manufacturing Business Prices Paid and […]

February 18, 2022 | An Invasion by Russia into Ukraine Could Rattle Stock Markets

The potential military conflict between Russia and Ukraine continues to escalate. Military conflicts usually cause markets to get more volatile for a time. But would an invasion of Ukraine by Russia precipitate a market crash?   Members of Ukrainian forces in an urban combat training exercise on Friday February 11, 2022. Source: Bloomberg Finance LP […]

February 11, 2022 | Inflation Expectations are Still Too Low

Economists are underestimating inflation. The consensus is for inflation to drop to 2.9 percent by the end of 2022. But that consensus should be viewed with suspicion. How should investors act if we get higher inflation instead? The consensus of economists has inflation dropping from 7 percent to sub-3 percent by the end of 2022. […]

February 4, 2022 | Grantham Makes a Bold and Scary Prediction

The end of this bull market has arrived. Recently Jeremy Grantham described how this extreme valuation in the stock market, bond market and some housing markets is a very rare event. And he claims that it is over. Grantham first came to my attention at a conference in 2003. He was a keynote speaker and […]

January 28, 2022 | The End of Easy Money is Near

The Federal Reserve has been promoting asset bubbles for years. This easy money policy has created a series of booms, widened income and wealth inequality and added massive debt to the system. This week the Fed signaled it is ready to end this misguided policy. Will the Fed have the backbone to stop promoting asset […]

January 21, 2022 | The End of the Property Bubble in China

The end of the property bubble in China has arrived. The likely next stage is liquidation, with the government deciding who writes off the bad debts that have been created. China’s property bubble is second to none. The size of total debt, the scale of investment in property and the participation of households are all […]

January 14, 2022 | Concentrated Markets are Irrational

The U.S. stock market is at record highs. But only a few stocks are responsible for driving the majority of the recent gains. Is a concentrated stock market a healthy market? Most people are aware that the U.S. stock market has been gaining strength for several years. The valuation of the main index, the S&P […]

January 7, 2022 | Tesla Will Face Major Competition Soon

Tesla, the world’s leading electric automobile manufacturer, announced a sales record for the quarter ending December 31. The share price of Tesla is up about 10-fold since March 2020. Is competition from Volkswagen and Toyota about to derail Tesla’s dominance? The stock market valuation for Tesla hit $1 trillion, around the same time Apple’s total […]

December 17, 2021 | Shelter Costs are about to Hit the CPI, Finally

The Canadian housing mania is two decades old. During that period various house prices are up to three to four times in most cities while the largest CPI component — shelter — is up only marginally. How is such a flawed method of calculating housing costs used in the CPI? The largest component of the […]

December 10, 2021 | The U.K. Stock Market is for Contrarians Only

The stock markets in Europe are much cheaper than the U.S. In fact, based on price-earnings (P/E) ratios, some European indices like the U.K. FTSE 100 are at the cheapest level ever in relation to the U.S. benchmark, the S&P 500. Is this a buying opportunity, or a value trap? Source: Bloomberg The U.K. index, […]

December 3, 2021 | A Major Policy Mistake

  Policy makers in the U.S., and elsewhere, are in the middle of making a dangerous policy mistake, according to Martin Barnes, a prominent economist. The Federal Reserve is “caught in a trap of its own making”. Martin Barnes, formerly chief economist of BCA Research, is now retired. But he still writes occasional reports, and […]

November 26, 2021 | The Bank of Canada is Ignoring the Risks

Recently the Deputy Governor of the Bank of Canada, Paul Beaudry, made a speech about the resilience of the Canadian financial system. He discussed several serious vulnerabilities threatening the system but claims that financial institutions will be fine, even if those risks trigger a financial crisis. Is the Bank of Canada ignoring the risks? The speech was […]

November 19, 2021 | Gold Could be a Hedge Against a Fed-Induced Financial Crisis

Gold bullion and gold mining shares are about as depressed as they ever get in relation to bonds and stocks. Gold and gold mining equities used to be considered a hedge against inflation and the debasement of paper money. With the Fed reluctant to take strong measures to fight inflation will gold finally have its […]

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