The markets focus on economic data and statistics that produce numbers by actions people engage in. Many in society work a number of hours per week to earn money to pay off accumulated debts. The amount of debt a family or individual maintains usually determines the standard of living achieved. Some are considered well-to-do, while others may not be as affluent but remain productive,  building what is known as equity.

Presently, people maintaining a certain standard of living might become compromised. With many having accumulated enormous debts, while interest rates were low, the exponential increase over a short period of time is going to cause havoc at renewal. Especially for those who don’t have the income to sustain themselves or friends or family to assist.  Mortgage renewals are quickly approaching the balance of this year, as well as the end of 2024. The economic hardship will be significant in the Canadian markets, as mentioned last week when I pointed out that the shorter-term mortgages in Canada vs the USA will make the pain more acute in Canada. A reality check is coming for many and it won’t be pretty.

After disappointing employment numbers, the USD Index dove below the 105.0 level sending currencies higher. Inflation rages on, while the government in Canada is out to lunch applying  Carbon Taxes, advocating baloney science on Climate Change concerns.  The cost of living gets even more difficult for families despite supplemental income provided by the government. Soon people will be actually walking away from homes purchased or selling property at discounted pricing because they can’t afford it. It was recently reported that some new homeowners left upwards of $300k in deposit on the table, to walk away from closing. Meanwhile, the Bankers are trying to ease the pain by offering products at renewal with negative amortization. Consequently, the ombudsman is investigating this and if it is found to be illegal, then the person holding the mortgage will have to come up with the lump sum to bring the mortgage into line. Can you hear the saying, “You will own nothing and be happy”?

Regardless of a widening Trade Deficit of <$61.5B> from  <$58.7B> the USD gains strength. The focus is on the bond market as yields fall sharply in both USA and Canada. We are in recession and despite cuts in Oil Production in both Russia and Iran, the price of oil is sliding toward the $75/B level. To reiterate, inflation is subdued when the largest variable is manipulated. What we are told isn’t truly a function of reality. It is a means to justify the Central Bankers Policies. The little guy gets crushed while those with cash become kings or queens from other people’s blood sweat and tears.

As the Bank of Canada (BOC) deliberates about the inflation they themselves have created, don’t expect interest rates to come down anytime soon. Even though Canada is in a recession the BOC will be dammed if they do and dammed if they don’t. I reiterate the only way to stop inflation is to reduce erroneous government spending. Keep in mind, it cost almost $500M to redesign the Canadian passport and eliminate Canadian History yet no taxpayer can question this decision because voices have been censored. On the American front, Jobless Claims came in at 217k vs expected (218k) but in the bigger scheme of things does it make a difference as the world seems to be going to the poopoo house?

The USD Index gained some momentum heading toward the 106.0 mark once again. Precious Metals rise marginally with Gold in the $1960/oz vicinity and Silver below the $23/oz level.. Presently, the Canadian Dollar remains below the 0.73 cent level, remaining a function of USD strength or weakness.