Well, the reality is that Truckers haul goods from all distribution nodal points across the country, they are coming out in force to demand action in Ottawa. This is not about Trucker Vehicle safety as the Media would tend for you to believe but rather mandates that could destroy their businesses and the lives of hard-working people.  Brace yourself for much higher costs and inflation to continue to soar to astronomical levels.

Today, both the Bank of Canada and The Federal Reserve will present their economic assessments. With inflation, a reality for which they previously considered transitory in nature. It has quickly morphed into an unwanted reality. The cost of goods, housing and soon the cost of borrowing will add more pressures to households tethering on their massive personal debts.

Many living from paycheck to paycheck or dependent on Government assistance (for most it has ended), the moment of truth is about to be exposed. Too many households have leveraged their home equity to refinance their lifestyles. Living within ones means is unacceptable to most. As a result, the use of personal credit facilities has exploded.  Some would go to great lengths to paint a pretty picture of a false reality rather than succumb to the point of exposing their actual standard of living.

Therefore, what to expect from the Central Bankers upcoming, let’s start with the Federal Reserve.  Chairman Powell, who recently was awarded an additional term,  will probably look toward March as the time for starting to reduce the stimulus and increase rates. January brought the end of Quantitative easing and purchases of toxic assets to an end. The question remains, is the economy actually stable enough to take the proverbial training wheels off and let nature take its’ course? The equity markets have been in a corrective mode for the last few weeks, shedding almost 10% from recent all-time highs.  Will the increase in interest rates create more carnage or be a blessing? As optimistic as I would like to be, there will be suffering unless individuals make the necessary adjustments to live within their means.  Nothing positive can occur until changes in habits are incorporated. Therefore though the medicine will be tough to swallow, The Fed will start the increase in interest rates as one of the only tools left to fight the threat of rising hyper-inflation.

The Bank of Canada (BOC) also denied inflation to be a threat, claiming it to be transitory as well.  The BOC created this mess because they printed the money needed to support the funding of Government programs. Definitely, unsustainable but increasing the cost of borrowing whereby the Rich get richer and the Taxpayer is left on the hook. It’s like a Ponzi scheme until it was exposed and the BOC ended the charade. Now after creating the inflationary mess, to begin with, I believe the BOC will take a pre-emptive strike against inflation by raising raise before the Federal Reserve. It could happen today unless the activities above are not averted.

Though the markets may have absorbed this already, the act of raising interest rates would have a positive impact on the currency. Recently, we saw the Canadian Dollar surpass the 0.80 cent level.  Consequently, with the Equity markets spiralling and the drums of war beating,  Oil explodes above the $86/barrel level and the Canadian dollar is now back above the 0.79 cents level after recently faltering.

The USD Index remains firm above the 96.0 level keeping the currencies subdued against the USD. Precious Metals look like they are ignoring the USD strength as a fear factor of tumbling markets and military confrontation between Russia/Ukraine seems increasingly imminent. Could the hype of war be a distraction from failed policies at home? Let’s hope cooler heads prevail as people making these decisions don’t understand the pain, suffering and death which result from decisions made. They will have a real impact on real lives!