Do you ever wake up in the morning and say to yourself, Something just doesn’t feel right. I am not speaking about your health, but your surroundings, otherwise referred to as a vibe, vibration or frequency. 

Living in Toronto, what was once considered the crown jewel of Canada and a wonder of the world, the vibe has changed tremendously. 

Click below to get a reality check on what is going on in the City, let me know how you feel:

https://www.facebook.com/reel/1515795856057190/?

Speaking of vibes, the tension is mounting between the Federal Reserve and the Trump Administration. There are actual discussions about Trump wanting to fire the Fed Chairman, Powell, for his inaction with respect to lowering interest rates. Trump believes rates should be 3% lower than where they are now. He may be right, yet again. An action like this would probably see the USD plummet, a scenario welcomed to make USA goods cheaper abroad, especially when barriers are reduced or eliminated.

Today, the Producer Price Index (PPI) came in at 2.3% vs 2.5% in June and 2.6% in May. Annual Core PPI is at 2.6% in the same period, down from 3% in May. The other inflation barometer, the Consumer Price Index (CPI) data, matched their estimates. The rise to 2.7% vs the expected 2.4% in May gave the Federal Reserve its ammunition to be cautious. Yet, core inflation, ex volatile food & energy, came in at 2.9% vs the previous 2.8% but lower than the 3% expected. 

In Canada, the CPI Index increased from 1.7% to 1.9% MoM. On a YoY basis, excluding volatile food and energy, the result came in at 2.7% from the 2.5% in May. Even though we are within the parameters of acceptable inflation, the Bank of Canada (BOC) will, of course, take a cautious approach in lowering rates further, especially with a 35% tariff coming to Canada on August 1st. Today, Canada announced a 25% tariff on Chinese steel. This is part of the reason Trump is charging Canada 35% vs the 30% to be imposed on Europe and Mexico, as Canada is seen as bypassing Chinese products to come into America.  

They will cite pending tariffs as an excuse to avoid lowering rates. Those having to renew their mortgages and find debt relief will be in shock, seeing their payments rise or amortization extended beyond their life span. We are entering an era with the greatest wealth transfer in history, but people are still biting off more than they can chew. 

One has to ask themselves, Is it all by design? While the construction sector slows down, the investment in the rental market continues unabated. The government, through its real estate arm, the Canadian Mortgage and Housing Corporation (CMHC), is investing in rentals as the cost of living is becoming increasingly difficult. 

The explanation from a prominent builder, the CHMC, is providing incentives of 100-year mortgages @ 2%, to develop and complete rental housing units. It seems as though there is a systematic process to eventually get people out of owning and into renting for the rest of their lives. Sounds like the WEF has planted its agenda within Canada, whereby the majority will own nothing and be happy?

Meanwhile, the USD Index nearly hit the 99.0 level, renewed strength sees Precious Metals pull back with Gold in the USD$3340/oz range. Silver scales back below the USD$38/oz level after breaking a 14-year high. On the other hand, Oil, the inflation stabilizer, drops into the USD$65/B range, hopefully making the pending road trip a little cheaper, yet our CAD$ a little weaker in the 0.73 cents range. Lastly, Bitcoin hit a new record high in the USD 123k/coin range, and after some profit-taking, trades in the USD 119k/coin range gave hope that the $ 1 million/coin level might become a reality.