The idea, resonated with my neighbour and yesterday after ordering from Frey’s Hatchery in St. Jacobs’ we drove out there to pick up the new chicks. He felt like a new father looking forward to the pain before the pleasure of serving eggs. All we did was discuss different recipes, We got hungry and stopped at an A&W. I ordered 2 meal combos and $34 later I suggested we inject them with hormones so they grow faster! I was shocked, to say the least. Honestly, it pays to pay the price for organic eggs, knowing full well what it takes to produce them. It was an awakening to witness how much the cost of eating out has increased. You only know what’s in the food when you make it yourself. 

Speaking of production last Friday we got a disappointing Jobs report in which the Canadian economy gained only 15.3k jobs versus the (55k) expected. In the USA Non-Farm Payrolls came in at 428k vs expected (391k) justifying the Interest rate increase of (0.50%).

Meanwhile, the Cad$ has lost roughly 4 full figures (cents) in less than 2 weeks. In retrospect, I may have gained them as my pant size stretched by almost as much. For buyers of USD,  the result is devastating to the cost of production, eating into the profit margin. As always, stress the need to hedge your FX exposure and protect your profit! The Cost of Production always needs to be incorporated into the business model, otherwise, you end up working for free. Don’t be victimized by being complacent and taking your good fortune for granted. Measure your deals one at a time. There will always be a competitor lurking in the shadows wanting to pay nickels and dimes for a bankrupt business.

On the other hand, Sellers received a sweet reward. An opportunity to enhance their profitability and improve their bottom line. Understanding the cash flows and using hedging techniques to manage exposure is important. Keep in mind what usually goes up, eventually comes down. Markets have and will always be cyclical in nature unless Communism and Government Controls dictate how things have to be. Is that what we want in a Capitalistic and supposedly democratic society?

The catalyst continues to be a strong USD measured by the Index that hovers above the 103.50 level.  Strength has been brought on by fear of a spiralling economy, as the Dow shed nearly 1000 more points in consecutive days. Inflation coupled with uncertainty continues to enhance USD strength.  Increasing rates and supply chain issues dominate the narrative while food plants across North America are being destroyed by suspect fires. Food supplies are being threatened and it will be only a matter of time before reality hits like issues affecting Chinese cities. The images and facts are real as I received confirmation from a teacher with elderly parents in China. It is horrific what is taking place there under the guise of the Zero Covid protocol, especially in Shanghai.

The Consumer Price Index (CPI) is the index that measures inflation. Today the result shows it was down to 8.3% from the previous (8.5%) expected (8.1%). What does this mean? The Administration in the USA wants us to believe inflation has peaked while the ECB takes these results as a cue to do what they do best, talk and do nothing! Traditionally, rising interest rates have been the method to slow down an overly active economy. Consequently, by taking these types of measures in a fragile recovery when consumer debt has exploded the ramifications could cause even more devastation by actually killing jobs. The Biden Administration’s solution, reverse the Trump Tariffs to bring in cheaper manufactured goods from China? Enrich the competitor and destroy the manufacturing base at home by improving profits for larger corporations, a brilliant idea?

Rather it is an absolute travesty taking place under all our noses. Personally, I believe, the aim around the world is a deliberate attempt to bankrupt as many as possible. In Canada, the Federal Government deficit is approaching $500B from the $31B just a few years ago. As interest rates rise so will the payments on the deficit. It isn’t rocket science! People will fail, not meet their financial obligations and become dependent on handouts. I assume a person will also need to give up their personal autonomy, making the statement “You will own nothing and be happy”, a reality by 2030?