As interest rates rise, so does the cost of mortgages and short-term loans for many purchases. These loans are mostly in the form of lines of credit. Many of the secured lines of credit use your home equity as collateral. Therefore, if one starts to sink into the valley of debt, the bank can force the individual to sell their family home so that they can recoup their money. Ultimately leaving the family or individual out on the street if they can’t find alternative accommodations.

It is time to differentiate between a necessity and a luxury item in order to bring expenses into line. Tighten the financial belt because the fat around the waist won’t be enough to keep your pants from falling. Many are ill-prepared for what is coming because many have never experienced hunger or any sort of struggle. Life has been a walk in the park for many born into entitlement. The fortunate have always had some type of support system ready to provide the missing link of needs and wants. Education doesn’t usually translate into intelligence. (Click Below)

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If we turn to Europe, specifically the conflict in Ukraine, the Europeans have had to sacrifice the most. They grew dependent on Russian Gas travelling through the pipeline known as North Stream 1.  This pipeline provides over 70% of Europe’s energy needs. As a result, these actions have threatened the manufacturing capacity of Germany the engine that keeps the EU united. Economic output could be severely altered potentially bringing the EU crumbling down. The IMF just lowered German growth expectations to 1.2% for 2022 and 0.8% for 2023. Keep in mind that the Germans and French support the massive debts of member nations. Now the European Central Bank (ECB) is set to raise rates by either 0.25 or 0.50 basis points to curb inflation.  Rates will move from a negative interest rate to a neutral positive level for the first time in years.

Decisions, to severe ties with Economic Sanctions against Russia, are imminent. The question is will NATO, basically run by the Americans, allow this to happen?  It is about either sacrificing the economic output of a Union or maintaining a policy that continues to economically harm the Europeans.

The potential demise of the economic union will have devastating consequences in equity markets as well as the supply chains. Farming is being systematically attacked across Europe as the use of nitrogen a key ingredient for farming is being scaled back in the name of Climate Change. Recently, in Sri Lanka, the government ceased the use of nitrogen to go organic. Now people are starving as a humanitarian crisis is unfolding and the government falls. You can only push people so far before rebellion takes place. The push to replace heads of state around the world that are carrying out the agenda of the World Economic Forum (WEF) is starting to crumble. 

On the home front, CPI data shows inflation eased to 8.1% from the expected 8.4%. The Bank of Canada core inflation still stands at 5.0% YoY, the target (2%). Nothing has really changed except the possibility of slowing down rate increases. But keep in mind for every 1% interest rate rise, the Government cost to support the massive debt increases as well. It is estimated the tune of $13 Billion in extra interest costs for the $1 Trillion deficit accumulated without accountability or transparency for Canada. Imagine the possibilities for our country if those funds were used in supporting actual citizens rather than squandered in a deliberate attempt to bankrupt our nation?

South of the border, the Americans see Existing Home Sales decline by 5.4%. The USD Index dropped like a rock below the 106.50 level from over 109.0 perch. Meanwhile, the price of Oil retested the $100/B level as Biden fails to secure a Middle East deal. The Saudis continue to buy Russian Oil and pay in Rubles clearly undermining the Americans and their agenda. The Cad$ seems to have become a benefactor rising above the 0.7750 cent level after recently dropping to 0.76 cent level.