When I was in grade school, I was the only one named Philip. I questioned my parents as to why they would give me such a name. With all the Anthony’s Josephs and Vince’s, I felt like an oddity amongst the crowd. Even worse, my middle name was Jan, the only Jan I knew was the middle female child on the TV series, “The Brady Bunch”. It was embarrassing, to say the least as a kid, having to look at my birth certificate and think, why did my parents give me such a name?

The reality of the situation, I was the firstborn male in the family and at that time, it was respectful to name your child after the Grandfather. His name was Filippo. So the mystery starts here, I asked my Dad, who named me? He responded I don’t know. 

The other part of the story was that my parents were married on November 23, 1963. The day before their wedding, JFK was assassinated. He was a President who was revered amongst the people. Therefore, I was told I was named John after him, as they hoped that one day I could be just as great. I am working on it, looks aren’t everything! But seeing Philip Jan, as my official name made me wince in shame.   

Over the years, I kept asking my Father, Pa, did you fill out the papers when you applied for my birth certificate? Again, he replied, “I don’t know”. I can only assume, that he couldn’t spell and write the name as it sounded or that the person that filled out the papers was of Scandinavian descent. That made the most sense because John is Jan (pronounced Yawn) in the Scandinavian countries. It brought me a little comfort.

Nonetheless, today is St. Joseph’s Day from where my father received his name. There was no imagination involved we just celebrated with the deep-fried Zeppolis or the cream-puffed pastries and hoped for divine intervention.

Speaking of divine intervention, April 2nd is quickly approaching and tariffs are the focus of attention. Plus the Federal Reserve’s next move and direction of monetary policy.

The logic behind the imposition of tariffs is that companies will come build factories in America, to avoid these costs. Tax incentives will also be available but the logic is flawed because to begin, the cost of everything will rise exponentially. especially on the cost of steel and aluminum.

If the cost of production increases, the costs are ultimately passed on to the consumer. Inflation has always been a hidden tax, eroding the value of the currency and consumers’ buying power. Further, the profits generated will leave the country to these Foreign entities, making American-made goods more costly abroad. 

As retaliatory measures come into effect and political posturing occurs, it will come down to who will blink first. Meanwhile, while the cost of everything rises, the availability of products will decline globally. The concentration of investment should be geared toward domestic manufacturing and local supply chains.

Consequently, the globalization of supply chains radically eroded the manufacturing bases within industrialized countries. Sadly, the costs to reestablish such an undertaking may not be feasible and businesses will just shut down.

In Canada, we need to brace ourselves for the tempest of a recession that could be even more severe if common sense is not part of the negotiations. Here is a small taste of what’s to come as the Consumer Price Index (CPI) was up considerably to 2.6% in February vs expected (2.1%). The weaker loonie, including taxation burdens on necessities, has made the cost of living difficult for many families. In the short run, rates will have to fall but then they could easily skyrocket again.

Consequently, Consumer Confidence has eroded. When fear consumes people, they don’t want to spend, especially big-ticket items like Cars and Houses. (Look below at the chart as Canada’s Leadership has destroyed growth in this country over the last 10 years!). We have an overall negative GDP! For a country rich in resources this should not be the case! No one should need to visit a FoodBank!

South of the border U.S. Industrial Production rose 0.7% in February versus (0.2%) expected. The shift in manufacturing activity is in full gear as incentives are being implemented as stipulated previously. 

The CAD$ remains below the 0.70 cent range, while Oil remains in the USD$67/B range. The USD Index stands in the 103.80  vicinity as the focus is on the Federal Reserve. All countries affected by tariffs will most likely be entering a period of stagnant growth and higher inflation. 

The result, inflation, has traditionally seen Gold as a hedge. Gold continues to shine making new highs daily, as it hit the USD$3045/oz level. Silver tested the USD$34/oz and could be Gold on steroids moving forward. Basically, with rising inflation, rates would need to rise, and with slowing growth rates need to fall. Therefore with the combination of both, especially in Canada Central bankers are in a dammed if we do, dammed if we don’t, scenario. It won’t be pretty! 

Another variable that could see the Federal Reserve cut rates is the dip in Retail Sales which came in at 0.2% vs estimated (0.7%), previous was <-1.2%>. Further, the USA Consumer Price Index (CPI), a measurement of inflation, dropped by 1/10th of a percent. The significance is that it happened for both the monthly and Core Inflation data. CPI came in at 2.8% versus (2.9%) expecting (3%), in February. It was up 0.2% vs expected (0.3%) and previous (0.5%)in January.

We started the month with the famous Shakespearean quotation, “Beware the Ides of March” and in retrospect, we couldn’t imagine a more volatile period with more to come. 

Click below to get an articulate explanation of the pending tariffs and their impact: