June1st Episode
01:00:51 Share

Welcome to Money Talks. My name is Mike Campbell. Man, do we have a great show for you. We have the macro tourist himself, Kevin Muir. And I'll tell you, he's got some fascinating things to say. How about an 8% to 10% inflation rate?

What about a Canadian dollar that hits an all-time low? Oh, there's much more to come. So join us. He's going to be terrific. Also, we're going to be talking. Oh, I've got a shocking stat of the week. Of course, I've got a goofy award. You know, I've got Victor Adair though. And speaking of the Canadian dollar, he's going to tell us what the markets think about it today. Plus, of course, we've got an interest rate announcement coming up. What does the market say about that? Many more things to come. I got Ozzy with me. I got Rob Levy with me. Stay with us. But first,

In the last week, there's been shootings at two Jewish schools, shots fired at a Montreal synagogue while one in Vancouver was firebombed. Jewish students have been pulled from school due to anti-Semitism. I wonder what their parents say to those kids. What do they kids do wrong? We got university presidents admit there's rampant anti-Semitism on campus.

I don't think anyone should be surprised, though, at the escalation given the weak response by our political leaders since October 7th, you know, to blatant acts of hate that clearly contravene the criminal code. Since then, I've been asking people, why do you think this ends? I mean, where does this lead?

Well, the acts of violence are predictable, but I think there's much more to come. I mean, if you want a glimpse into our future, just look at what's happening at the current rate and what we're doing in France or the UK or Spain or Denmark or Sweden. Obviously, many Canadians don't care. It's not a priority for them. They don't even care that we've got anti-Semitics in our elected bodies, our legislature, our parliament. But personally, I do.

It's changing the very nature of our country. It's now absurd to say in response to the hate and increasing violence that this is not Canada. Well, of course it is, which brings me to an uncomfortable question. It's clear that Canada has imported this rampant anti-Semitism. So the question is, given so much of this was introduced through immigration, temporary visas or unenforced restrictions on visitor visas, was that actually the goal?

Obviously, for some in the Liberal and NDP caucus, it's not unwelcome. But was it on purpose? I suspect the vast majority of you say no. But I want you to think about this, because if that's the case, if it wasn't the goal, then it's the result of a badly flawed system of vetting who we allow into our country. Either the government didn't want to invite an element who are so blatantly anti-Canadian values, a racist, full of hate, or the system is badly flawed.

And my point is, before more damage is done to the social fabric of Canada, and make no mistake, damage has been done, we need a wholesale change in how we vet immigrants as well as those who are arriving on temporary visas. Those claiming asylum or those visiting must be done, especially given the government's plan to let in 5,000 immigrants from Gaza.

Because polls consistently show a majority of people in Gaza support the October 7th attack. For example, in March, the Palestine Center for Policy and Survey Research, well, their poll found 71% of Palestinians in Gaza and the West Bank supported October 7th massacres. In other words, it's a good bet that we would be letting thousands of new arrivals would be anti-Semitic. I mean, the government has clearly failed to protect Jewish Canadians. This would compound the problem.

All I'm saying is it should be incumbent on the government to convince Canadians that the system of vetting of who we allow in the country has been dramatically improved. And that includes this latest proposal under Bill C-71, under which Canadian expats who lived in the country for three years don't have to be here now, but could automatically pass their citizenship on to their children.

Now look, I want to be clear here. I am not debating immigration. Clearly, Canada needs it with an aging population and low birth rate. But I'm saying the government's performance has been wholly inadequate on that file, failing to plan for the increased pressure on housing, for example, or health care, traffic congestion. And it's been an abject failure, and I want to put that in capital letters, when it comes to protecting Jewish Canadians. This has to change. But there's no sign that it will.

As Europe is illustrating, the results will be disastrous. Hey, just a reminder, you can get the update to the World Outlook Conference right now. Man, it's good. You're featuring Greg Weldon, James Thorne. You've got Paul Beattie, Martin Straith. I mean, it is really good information. I was very pleased with it. I think you will be too. Specific recommendations, plus the big picture stuff from these top analysts.

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I always get excited when I get to talk to the macro tourist himself, Kevin Muir. He joins me now. Kevin, thanks so much for finding time. And man, I don't even know where to start right now. Maybe I'll come to Canada because I know you've, I mean, you're right about a variety of things, but yeah,

You know, you've just been writing about Canada and we just got the GDP numbers on Friday, you know, which, you know, a little bit below analyst assessments or GDP per capita is going to go down again. But you've been saying, hey, you're bearish on Canada. Oh, yeah. I think Canada is in a lot of trouble. And actually, although the GDP number was OK when you look at the first blush, if you go look at the revisions from last quarter, it was actually really bad. And.

And ultimately, I'm a bear on Canada because I think that we're kind of kidding ourselves in terms of what we expected will happen to our economy because we're looking at America and we're saying, oh, look at American economies doing so well. Everything's great there. We're going to be just like the same. And, you know, our central banker is sitting there and I actually think he's one of the worst central bankers out there because he's completely clueless to the differences between the Canadian and the American economy.

And let me explain to you what those are. First of all, we did way less fiscal stimulus than the Americans. The Americans did 24% of their GDP as fiscal stimulus. We did only 16%.

Even now, when you look at it, we're running a fiscal deficit that's way less than America. America, even though they're at low unemployment, they're still running a 6.5% deficit. And all those things are stimulative for the U.S. economy. So there's no doubt that they're doing better because of that. The next thing that's different about America versus Canada is the fact that our household debt

as a percentage of GDP is way, way higher. We're well over 100%. America is well under like 75%. And then finally, the other thing about it is that when you look at America, they have this wonderful thing called the 30-year mortgage. And the mortgage that everyone locked in, you know, in the post-COVID period was in like 1%, 2%. Just crazy stuff, Mike.

And in Canada, we don't have those. We are typically, we were either rolling them at the front end or we're 5% I mean, sorry, five-year mortgages. So when we raise rates, it's instantly felt much more. And when you combine that with the fact that we have a lot more debt, I think our economy is in a lot more trouble. I've been saying this for a while. I think the Canadian dollar eventually goes to all-time lows.

Which is frightening. I mean, I certainly clearly remember the 62 and a half cent dollar, you know, going back. And I think people still, or not everyone, of course, we've become a little more sophisticated generally. But I mean, the impact on our lives is dramatic. Not just, you know, something simplistic like I can't go to, you know,

you know, Palm Springs, or you can't go to Florida, if you know what I mean. Like it's those things. But, you know, when you consider how much we import in terms of our manufacturing for the components, you know, natural resources, of course, go through the roof, which hurts, again, huge parts of our economy. I just think that's a very serious situation. So I'll push back a little bit there, Mike, because actually I think from on some of our resources, it'll be actually a boom.

I look at things like the oil sands. These companies have long-dated reserve lives of oil. And imagine we get a situation where oil bumps its head up to $100, which is, I think, where it's headed, and the dollar is at all-time lows. These things are going to print money. It's going to be an absolute boom from that. But in terms of us as Canadians, in terms of buying stuff and how we feel, we will definitely feel poorer.

I love the distinction, though, because as an investor, you know, I'm with you. I mean, I've been very keen looking at the devaluation of the Canadian dollar, but the restricted in purchasing power, too. We're getting killed. You know, so I'm with you that that to me makes our natural resources, but especially copper, you know, but oil. I mean, energy. Yeah. And I'm sort of now, Kevin, just so you can laugh at me.

I've become much more interested in natural gas recently. I have not been in it at all. I'm not going to laugh. I think that's a great idea. Okay. So your distinction, though, is a very important one. So we're talking, obviously, to both consumers and investors at the same time. So investors, yeah, you may benefit, but consumers, as you say, we're going to also feel it. For sure. And I think that we're going to struggle in terms of our housing. There's going to be some problems there. I didn't talk about this, but

a lot of the issues that we've gotten in terms of like, why has our economy appeared so strong? Like what's happened that's kind of led us to this point where the Bank of Canada has been just as hawkish as the American one. And I think what we missed, a lot of people missed is the fact that it was our immigration policy.

Now, I'm all for immigrants. I think it's terrific. Canada was founded on immigrants. I'm welcoming of them all. But at the same time, if we allow so many immigrants to our country,

That it's straining our resources in terms of they have nowhere to stay, where, you know, it's causing too much, you know, busting at the seams when it comes to health care and things like this. We've kind of, we have this huge boom in our population, and it's made our economy appear stronger than it actually is.

And I follow very closely the work of Ben Rabideau, who's a, you know, a real estate guy. And he talked about, he was the one who put me onto this thing about the fact that we had this spike up in, you know, immigrants and the different kinds of the different cohorts and stuff like that. And the federal government has indicated that they're going to, you know, tamp that down. So we're going to go from, you know, in importing or bringing in 1.3 million people every year to only 300,000. And,

And it's going to be better in the long run for us all because hopefully the ones that we bring will be able to actually accommodate them and give them the resources and the expectations that they expect when they come to Canada. But at the same time, that's going to make our GDP and our economy weak in the coming years.

Yeah, I just, I started the show off with saying, I'm not putting words in your mouth at all on this, but man, if they don't, I'm appalled at the vetting. I'm absolutely appalled that we've imported anti-Semitism to this country and they now propose these. And so I, I,

I'm with you. I'm 100%. We need, how can you have a birth rate like Canada's, an aging population and not have immigration? Right. But it's no excuse not to have vetted people coming into the country. But we can leave that because that's a long, big time subject there. Yeah. Let me come to something else that you've been writing at the Macro Tourist

And that is interesting. And again, I'm not getting into Trump's conviction, I guess, on Thursday. You know, I'm with you and you've written this many times, but I'm with you as people just aren't rational. You want to talk Trump or Biden. It gets irrational very, very quickly. Right. And as analysts, I mean, you know, I'm not interested in that. But I will say that, you know, and I know you've written this.

that Trump played fast and loose with his businesses, and he's going to be very generous with the money supply or other policies. I shouldn't have said money supply because that's the central bank, but other policies. And that could really usher in another period of inflation that we should be warned about. A hundred percent. I think that the market is being extremely complacent about the possibility of a Trump victory.

And like, as you mentioned, I don't care what happens. I'm a Canadian. I, you know, I don't have any say in it. So ultimately it's their decision to do what they want. I'm only interested in trying to figure out where I go in terms of my portfolio.

And when I look at this Trump situation, I look at the things he's saying, the things his advisors are saying. I read the Time article where he was interviewed. And a lot of the folks in the market are expecting a Trump 2.0 to look exactly like Trump 1.0.

And I think that's where they're making the mistake. He looks at the, you know, when you read him and listen to what he says, he views his problem with his previous administration was that he listened to too many Wall Street insiders, Washington insiders, and he didn't do what he thought was right.

And so when I look at it, I see him saying they're not him directly, but his advisors talking about immediately firing Jay Powell and replacing the federal reserve and changing that policy. So although you say that they're, they're not in charge of the federal reserve, well,

He might be. He might be going in and changing that thing. And the other thing is, in terms of his foreign exchange policy, he's already indicated that he's going to go and demand that the Chinese and the Japanese revalue their currencies higher. And, you know, I'm not judging whether any of these policies are right or wrong. It doesn't matter if they're right or wrong. He's telling you he's going to do it.

And I think the market has been extremely complacent about it. And I do think that these are extremely inflationary, you know, policies and that will introduce a lot of volatility in terms of the economy and the markets. And we might come, you know, next November time and be shocked at the kind of things that are happening.

Well, and I think if you look historically, anytime there's been more political interference with a central bank, people ask me about hyperinflation. I said, hey, that's the formula there. That's the recipe. And, you know, Stanley Druckenmiller, who said, you know, he put the numbers out, 8% and 10% inflation. Yeah, and he said that you should be open to the possibility that that's what occurs. Mm-hmm.

And I think that when I wrote my piece, I quoted that Stanley Druckenmiller line, and I got so much pushback. And I kept just saying, listen, it's just –

be open to this. We're not saying it's going to happen for sure. You never know anything for sure in the markets or in life, but it's, you need to be open to it. And the fact that the kind of, that that pushback was so great leads me to believe that the market is not ready for that sort of outcome. Yeah. Interesting observation about that side of it. I mean, I would just look, I mean, how can we not see, I look at it as a declining purchasing power of the currencies. You know, we can call it another thing, but it's,

How can you deny the record of that? I mean, my goodness, there's only been one direction when it comes to paper currencies, whether we're loonies or dollars or whatever, have you? And that has been. So we're just debating the rate that depreciation of purchasing power comes. That's right. I'm surprised you get pushback like that because history is 100% on your side. Yeah.

You're absolutely right. But I get all sorts of pushback. And the reality is that we've had kind of 40 years of declining interest rates and declining inflation. And ever since COVID, I believe that the world has changed and we've become gone from an era of monetary dominance to fiscal dominance. And that's what brought around this inflation. But I still everyone just keeps looking for that return of that post GFC 2 percent, 1 percent inflation. And that's what they're expecting. Right.

And I'm always shocked. I'm like, you know, do you not read your history book to your point? Like, you know, you're going against history when you're assuming that they're going to take care of your currency.

Well, I'm going to come back and I'm not pushing back in any way on that. I think that's what we should be prepared for. I've made this statement for several years, which is I think the biggest challenge is to protect yourself against the purchasing power. And I mean, when you look at things like you take a dollar today, it buys 54 cents worth of goods in the year 2000. Right. You know, I was looking when they put the capital gains change in. I said, well, you know, if you buy

Bought a house for 400 grand in 1990 and you sold it for 825,000 today, you're at zero. You didn't.

because you're getting paid back into value dollars. So there was no gain on that. And of course, we don't adjust our capital gains for inflation. So yeah, well, good luck to them. I want the people, as you've been telling the macro tourists, and I want our people. And that's what I want to discuss is how do we protect ourselves in the kind of environment we're talking? I mean,

Even, and I appreciate what you're saying. We're certainly not going to return, well, I shouldn't say it so confidently, but I mean, the probability of returning to, you know, 2020 rates, 2021 rates, I put so low, I can't see it.

So I'm not keen on bonds, for example, and people can be, but I'm not keen at all. I think the risk reward isn't there whatsoever. You know, I'm not talking about traders for a sec, Kevin. I'm talking about, you know, investors. But so what do we do? Well, and to your point about bonds, I think it's like I think they're going to be go back to the certificates of confiscation, which is what they were called in the 70s.

And I'm just continually amazed that everyone's talking about how we have this problem with our bond market. And I'm saying the yield curve's inverted. What's known as a term premium, which is the amount extra that the government needs to pay to borrow long, is actually at zero. There is absolutely no problem with the bond market. In fact, the bond market, the problem is that people keep trying to bet that we're going to have lower rates in the future.

So I think the first thing you can do is just avoid that and don't be investing in bonds. Don't fall into the trap of what we've had for the last little while and, you know, go out. And if you are going to buy fixed income, you're probably better off going out and buying a corporate bond that's yielding six, seven, 8% and a lot less duration. Cause if you and I are correct and interest rates don't go back down to one or 2%, you know, in five years time, you're still going to be able to get that sort of rate.

In terms of other things that you can do to diversify and figure it out, obviously gold is one of the things that a lot of people will push to. And I am very...

you know, sympathetic to that argument. I actually think gold can go up for other reasons, even like forget about inflation, forget about our, our argument about what happens to the value of the dollar. I think that gold can go up just because of the fact that what happened when Russia invaded Ukraine and the government and the Western world responded by zeroing out the Russian central banks accounts in terms of their bond holdings.

And if I'm sitting there and I'm the Bank of China and I'm sitting there going, okay, I am the biggest holder of U.S. Treasuries out there, I got to diversify. And that just means I got to buy some gold. And I think that for those reasons, you're just going to see a continual bid under gold. And I think one of the things that...

maybe we've spoken about this before, Mike, but I can continue to tell people when those folks start telling you gold's going to go down because the U S dollar is going to go up or gold's going to go down because rates are going to go up. I keep saying that the world has changed. Gold is not trading on those things. If you look at it statistically, it hasn't traded on those, you know, inputs for a couple of years now. And it coincided with when the Ukraine got, when Russia took over Ukraine and,

And I think that that's going to continue. So I think that's a secular bull market that you can just own. Uh,

I love the miners, for example. I think that they're dirt cheap. Nobody owns them. And in terms of other things you can own, you've got to find real assets that you can own. Back to our idea about the energies and you can buy oils, you buy nat gases, and I think you can buy copper, I think is a great story. And then finally, the last thing I would say for people that they should be thinking about tips, which is the Treasury Inflation Protected Securities Act.

And that's basically a bond that pays you inflation. And here in Canada, we were at least smart enough to stop issuing these things because our government has realized that issue. Why would I ever want to issue inflation? That's a crazy thing. In America, they haven't figured it out, but I suspect that eventually they will and that these things will eventually trade at premiums. But in the meantime, back to our kind of argument about everyone keeps thinking that we're going to go back to 1% or 2%.

Given that they think that, they're not paying up for tips because they're thinking that we're going to go back to that, you know, disinflationary period. So tips to me are really cheap. And I think that they're a great alternative.

I come back to the oil for a second. Now, this is one where, you know, Canadian oil stocks would benefit, as you alluded to earlier on, from a lower dollar benefit right now, you know, 73 cent dollar. We're not talking robust here. Yeah. You know, so if it does, you know, continue the slide and I'm with you, I think.

you know, you look at economic performance, you look at capital investment per worker, you know, there's not a measure that you saw. Yeah, that Canada, it's doing great, you know, economically, economically. And I appreciate that's not a priority for, for some Canadians. Millions have other priorities like climate change or LGBTQ, whatever it is, but just, I can't find a quality economist who thinks we're in good shape that way. So I,

I'm sort of wondering in that sector and maybe some other resources that you alluded to,

Should I be focusing, though, on Canadian companies to take that advantage where you can be bearish on Canada as a whole, but would you look at the Canadian oil and gas or, for example, the U.S. because you need a safe jurisdiction for both? Yeah. No, I think you can buy Canada. I'm very hopeful about us in the long run. And to be fair, you're right. This government hasn't made –

business a priority, no doubt about it. But at the same time, some of the provinces have figured things out. Like you go look at Ontario, for example, we have one of the leading AI divisions around, like the top AI researcher was at the University of Toronto and he's attracts a huge amount of people. And then we, we put into policy this thing where we, we,

grab Americans on H-1B visas. And, you know, unfortunately that makes more immigration. But we've figured things out there. So it's not like we're doing everything wrong. So I don't want to be too negative on Canada. I just think, though, from a perspective of we've allowed all this immigration, we're

Our policy in terms of our interest rate is too high. We focus too much on speculating on real estate. We'll need to rebalance. That rebalance will come with a lower dollar, lower interest rates. And in doing that, I think that you'll set the kind of table for some great returns from our resource companies. So I have no problems with owning mostly Canadian resource companies.

Because as you say, I think that over the long run, we're going to do great. It's a great jurisdiction and stuff. And in fact, when you look at America, there's no guarantee that they're going to be any friendlier to the resource expansion than we are. Like Biden is being almost as bad as our guy has in terms of allowing for these things to happen.

So, you know, I'm bullish on Canada over the long run. I just think that the dollar is going to be the outlet that we're going to have to suffer with the lower loonie for a while. And just to add it to your positive, you know, I think the opportunity in uranium, I just saw this week where the Biden administration is going to be super keen on uranium. Well, that's where Canada has expertise, and you're talking about Ontario. Yeah. I think that...

It's really interesting. I'm not sure if the government wanted to sell that, you know what I mean? Like put it out publicly, I should have said. But it's a huge opportunity that I think we're going to cash in because it seems like every couple of days, because I've been keen on uranium for three years, but every couple of days I'll announce a new one. You know, somebody else is committing to nuclear. So I'm just adding to that positive theme so I don't get too negative for people. Because we did, you know, in terms of we went and we did this –

what was it? The Ford government here in Ontario, we just announced another plant. Like we're the first, you know, North American plant in ages.

Even things like the Trans Mountain, you know, is over budget. It's a pain in the ass. Sorry, pain in the butt. But the reality is that this is a long term benefit for us. And it's, you know, one of the few good things that Trudeau has probably done on in terms of the energy basis. But he can't say anything about it because his base will get mad at him.

Right. Like that's that's the frustrating part about it. I've been I've been if I was in charge of the government, I would be talking about all the fact that Canadian energy is the greatest energy out there. Like, Mike, it drives me wild. I'm going to go on a little bit of a rant here. But if you think about who we buy energy from as a world, like, let's stop and think of it. Saudi Arabia, Russia.

Neither one of those countries, when you look at a human rights basis, are anywhere closer to Canada. So why we don't go out as Canadians and say, listen, you know, don't be buying your energy from these countries. Buy them from us. We share the same values. We, you know, we're

Let women drive. We don't invade other countries. We should be championing our energy and you should be trying to sell Canadian energy as an alternative, a stable, reliable partner. And fine, if you want to go and take the money that we get from that and invest in green energy, I'm all for it.

But it drives me batty that we are not more proud of our energy policy, I mean, our energy industry.

And I think it's going to go down as one of the great opportunities of all time that we've missed along the way. So many cancellations, you know, Enbridge moves out, other people. But, I mean, I think you're absolutely spot on. You know, you're getting more and more reports like the International Energy Agency are saying, you know, our demand is going up. And that was a no-brainer. I mean, I lived in India for over a year. You know, you think they're not going to allow development, energy development.

and economic development and standard of living go hand in hand. So what have we had instead? Big coal jump, you know, China, India. But I think the world's now recognizing we're not, it's not going away. Any other time that we've had, we've never replaced an energy source. It's just, you know, others have gone up, but it didn't go down. And I mean, I can go on and on too, because I've got children, I've got grandchildren. And I think this is a tremendous, uh,

mistake to not take an advantage of our natural you know emphasize natural opportunities here well if you go look you you were mentioning that gas is an opportunity to invest in you go look at it like well what is it two-thirds of the power is still powered by coal the reality is that we should be going and we should be replacing all that coal with net gas

And we should be doing that across the board. And it just, it drives me a little nutty that we haven't been more willing to do that.

Let me finish with a couple of things here. One is the level of volatility. And again, Victor Adair and I are always making the claim, are you short-term thinking? Are you long-term? You know, what are your investments? Because, I mean, you can get, for example, a dip in the rates coming up, but that isn't maybe a long-term trend, you know, when you have to position, you know, correctly around that. I just...

Have you remembered? Is it just my recency bias that I'm looking and saying, has it ever been this sort of broadly based important to get in the right stuff because it's so dramatic when you're not? Spoken by a guy, Kevin, who doesn't own the video. Well, sadly, sadly. Interestingly enough, it's actually there's something called the dispersion trade that is is great.

grabbing the world by storm. And what that is, is it's a sophisticated option trade where you go and you buy volatility on individual stocks and you sell them on the index. And if you think about that in terms of when that trade would work, if you have a situation where Nvidia is up a lot, but oils are down a lot, you could get a situation where the volatility that you're long on those two stocks is

And then meanwhile, think about the index. The index is flat because one side is up, one side is down. So it's flat. And this trade is actually being extremely popular in the last year. And there's a real question about whether that trade is actually causing this dispersion or whether it's just the, they're taking advantage of it. Um,

But one of the things that I worry about is it's gotten so large that someday it's going to come unglued. And I think that there's a possibility that we get what's called, if you remember back in, what was it, 18? There was the Volmageddon event where everyone was long this thing called XIV. They were all shorting Vol.

It really feels to me like that there's a possibility that this occurs in this square as well. Every time I kind of go and dig into it, I get really smart folks telling me, oh, no, no, you know what? Those guys that do that, they're so they got PhDs, they got Nobel laureates, and they're too smart to blow up.

And it just reminds me so much of long-term capital. And it really does. And it's, I always say the thing about, um, the crisis is that you never see them coming. If you, if you, if people were predicting them, they would never become crisis because unfortunately people would already adapt to it. So it's always the thing that nobody expects them to kind of bite you that ends up biting you.

And anyway, so I actually think that this dampening of volatility on the index level and then the big move out in terms of the individual stocks is worrisome. And I'm not sure what to do about it, except that I'm nervous and I'm very worried about the way that this is setting up.

Now, look, that's another reason, by the way, to read The Macro Tourist because you're on top of these things. So tell us the best way to get info on The Macro Tourist. Oh, if you're interested, just send me an email, kevin at themacrotourist.com, and I'll set you up with a few samples.

And we'll do, by the way, we'll put all that up on our social media and everything. You don't have to memorize it. But Kevin, you do a fabulous job, period. Oh, thank you very much. You know, the global perspective and the broad perspective, digging down into what we should be doing, all of that. I find it extremely valuable. Kevin, thanks for taking the time with us. Oh, my pleasure. Always great chatting with you, Mike.

Time now for the quote of the week. You know, on Money Talks, if you're a regular listener, you know I've been talking about the encroaching censorship, gosh, for over a dozen years. I think it's now a core dividing issue in politics in Canada with the federal government favoring increased censorship, especially when it comes to social media. You know, Bill C-10, Bill C-11, Bill C-18, and now I think it's a disaster, Bill S-210.

But that's not all. I mean, there are many ways to restrict free speech, as we witnessed during COVID. I mean, experts told us about the fact that they felt that if they challenged the official line from the government, they might be risking their research grant or their job, even. The mainstream media fell right in line with it. I mean, what was clear during COVID is the goal of censorship, though, was never to inform the public, but rather to manage them.

And that brings me to, we're going to do an audio quote of the week this week by Babylon Bee CEO Seth Dillon. So what is it exactly that the lovers of censorship want from us? I think the answer is clear. They want acquiescence. They want submission. They want unquestioning conformity.

They want us to give up and stop fighting, stop telling jokes, stop telling the truth. They want to raise the cost of speaking freely so high that we'd rather just keep our mouths shut to avoid all the hassle and penalties. And that would be the easy thing, wouldn't it? Adjust our behavior, fall in line, do our best to play by the rules of wokeness that try to reshape reality itself. It'd certainly be easier than fighting back and risking everything. We'd have no more headaches, no more suspensions, no more disruptions to our revenue streams. And all it would cost us is our integrity.

All we'd have to trade for a little peace of mind and a platform is the truth itself and our right to speak it. All we have to do is trade freedom, a thing so profoundly valuable that men have laid down their lives to secure it, for captivity and capitulation. Are you willing to make that trade just to make things easier? You know, it's interesting, as I said, we're hearing an awful lot about disinformation, misinformation as the rationale for more censorship. And of course, with government bureaucrats being the ultimate judge of what can and can't be said.

And the question is, is that worse than the disease? I think so. I mean, it's been a question on some of the most celebrated thinkers in Western culture, from Einstein to Martin Luther King to Ayn Rand to Noam Chomsky to Ruth Bader Ginsburg to Thomas Jefferson. And they all come down firmly on the side against government censorship and in favor of free speech. Although, as I noted, our federal government doesn't agree.

of course all eyes on the bank of canada coming up i mean their interest rate announcement is this week but it's kind of interesting uh you know there's so much focus i'm not sure it's justified in this one way and i'm going to bring rob levy in to talk about it rob you know i mean what else have we been talking about for a couple of years is what the central bank's going to do so now finally we're at i guess a moment of truth you know the consensus is still we should get one in june if not we'll get one in july but

One of the things that's kind of interesting is what comes next after that? What do we think is going to happen if they do lower rates by, say, a quarter point? Exactly right, Mike. You know, a lot of people sitting earnestly, when is the Bank of Canada going to finally cut interest rates? And if it's going to be this coming Wednesday of this week, this June rate announcement that we've anticipated for so long, there's certainly signs of the economy are pointing for a reason to begin cutting interest rates. But

It's almost as rates were going higher and we were battling inflation. Everybody talked about the transmission mechanism of higher interest rates. And when would that begin to, you know, slow down inflation? And it's almost the opposite of that in this kind of environment is, yeah, they're going to cut interest rates. But when will be as a consumer, as a household businesses, when will we get a little bit of relief?

Yeah, and I mean, there's called the lag effect when we talk economics, you know, when you lower them, so what do we all rush out? Especially, I don't think anybody's looking at more than a quarter point at this point, you know, and they're not sitting there saying, hey, we're going to have a 1%. I mean, there's debates about how much once they start, how much those rates will come down over a year, year and a half. But it's got I just sort of smiled thinking a quarter point is going to do nothing. And even if it does, it takes months to work through into the economy.

Exactly. And that echoes comments from the chief risk officer, Scotiabank, who was in the headlines this week because Scotiabank, along with the other Canadian banks, were reporting earnings. But it's their perspective and his take that it could take half a year or three quarters of a year for actually interest rate cuts to begin to bear fruit for the bank's customers. So Scotiabank

you know, from the financial markets and the lenders and the big banks perspectives is, yes, we will start to see Bank of Canada begin to cut interest rates. But in terms of that benefit being felt, which I think a lot of us are looking for, you know, say we're on a variable rate mortgage or tied to some sort of, you know, prime lending instrument until we actually start to feel that little bit of relief in the comfort of lower interest rates, it certainly won't be immediate.

Speaking of the banks, though, there's one other aspect I want to throw at you, and that is, you know, we've got some of the bank earnings and, you know, they're worried about losses, loan loss provisions, it's called. And man, that's impacted some earnings across that sector. It absolutely has. It's been the weight, I think, over the Canadian banks these last couple of years as we've adjusted to this market of higher interest rates. And it was an interesting one this week because the financials, the big six, because there's so few of them, it sort of gives us that indication, I think, into the

health of the Canadian consumer in the economy. And it was a predominant theme with, I think, the exception of Royal Bank and CIBC, who reported earnings just Thursday of this week. But for many of them, it was the fact that they were having to set aside more capital for potential loan losses. And it kind of dampened some of their earnings results, particularly TD, Scotiabank and Bank of Montreal, who

who felt the weight of what they call their higher loan loss provisions, but that potential for the debt that they, they offer going bad. Yeah. And it certainly is seeping in different parts of the country have different levels of delinquency measured by, you know, 90 days or over and making your payments, you know, different levels, but interesting Quebec's way up there. It's leading the country. I think, you know, at a pretty big, you know, strong growth about 25%, 26% growth, but,

in that, but other parts of the country, you can go to BC, it's fractional compared to that. I think the national average is around 12.6%. BC is about 5.2 or something like that. You know, so, but as I say, it's impacted the bank earnings, impacts the stocks. And of course, people are just waiting. I mean, the other thing, sorry, Rob, going on and on here, but very quickly with the

What's so ironic is the high mortgage rates, which I think the last time we looked at the numbers were about 24% jump from one year to the next. Well, that's the inflation number. Shelter is a huge component of the inflation. So when they actually lower the rates, if mortgages come down, that'll help the inflation thing. There you go. I mean, to come full circle and it takes a little bit of pressure there, I think.

off the Bank of Canada might help, as you say, fuel some further rate action. But it's just that. I mean, it's the weakness, I think, of the Canadian consumer and the fact that rate cuts are not going to immediately deliver that quick relief we're looking for. And, you know, it was a stat that came out at the end of this week, and I think it might be one to throw in at the end, but it just highlights that.

the struggle on Canadian households. When we talked about retail sales last week, and I know, you know, you've been good on it on this show, talking about it in per capita terms, but retail sales, half a percent above 2018 levels. It just shows that that's Canadian consumer needs a little relief to get things firing again. But again,

A quarter point cut next Wednesday might not deliver the goods immediately. Yeah, maybe we're going to start seeing interest rate parties. You know, like, you know, we're all going to watch the Super Bowl of interest rates with the central bankers. Oh, my gosh. Rob, thanks for taking the time. Bordergold.com, by the way. Rob writes a weekly commentary on what's happening in the gold market. And obviously, there's been a lot happening in the gold market. But bordergold.com, Rob Levy, thanks very much for the time. Always a pleasure. Thank you, Mike.

Time now for the shocking stat of the week. Well, I think we'd all be forgiven for being shocked that the CBC managers, now this is the fiscal year that just ended, March 31st, well, they awarded themselves $14.9 million in bonuses. Now, I say we should be shocked given the CBC CEO, Catherine Tate,

who earns a base salary, by the way, of $497,000 per year. Well, she'd been claiming financial hardship and reportedly laying off 141 CBC employees, left 205 positions vacant, which is, by the way, the Liberal government's rationale for giving the CBC an additional $42 million of our tax dollars. That's on top of the $1.38 billion tax dollars that we already send to them.

Now, BlackRock's reporter dug up the truly shocking part of this, though. All 46 of the network executives, that's 100% of them, received bonuses worth about $3,020,000 or so. And 99% of the 1,140 managers on the payroll, 99% of them also received bonuses worth about $11,884,000.

Now, obviously, these are not performance bonuses because by every metric from shrinking audience to shrinking ad revenues, well, they've been abysmal. So it's difficult not to conclude that the actual bonuses were really salary but weren't recorded that way to avoid scrutiny.

But I love this. CEO Catherine Tate says, our focus on the CBC is simple. Keep Canadians informed, build trust in public institutions, strengthen democracy and protect and promote Canadian culture. Well, let's think about that build trust in public institutions. I mean, is she kidding? Because that's been an abject failure. The fact that Catherine Tate, though, still has a job, I think is a testament to the lack of performance standards, at least in the federal government.

You know, I've been thinking, again, cost of living is the thing. I'm proud we've been emphasizing that on Money Talks as opposed to inflation. You know, inflation, again, is the rate of change, but the cost of living is just what are you paying for stuff?

And we've been focusing on food. We've been focusing, I mean, affordable housing is important, but honestly, I don't think as important as rents. Now, parts of housing like, hey, my property tax just went up and man, we've been seeing a lot of that, you know, but again, that's more the cost of living. Can I make ends meet? And I think we've just been too insensitive to people who are having trouble, at least our governments have.

And maybe Chrystia Freeland gave me the best example going back when she said she had a family meeting and they knew what it was like because they had to cancel Disney Plus. And I think that was reflective. Ozzy Jurek joins me now. Ozzy, you know, that's why I wanted, if you don't mind, we're going to talk rents today because, again...

Obviously, that impacts millions of Canadians. But give me a quick overlay of, I mean, the rents have been so high in so many places, all after tax dollars. And I think that's a key component that regularly gets overlooked. So we're talking about someone earns X, pays their income tax. Now, what do they have left over, whether it's for food or rent, you name it. So what's your take right now on the rental markets?

Well, it's kind of surprising. I'm looking at a website called Live Rent, L-I-V-E-R-E-N-T. They have lots of rentals available, but they also have a great report out. And they're looking at, for instance, the Vancouver and Toronto market in general has stopped decreasing.

The increase in rent. Now, the problem is, Mike, that we were already very, very high. Our one-bedroom furnished in Vancouver is still $2,523. An unfurnished one, $2,367. If you go to Langley, hey, it's only $1,983. But a two-bedroom in West Van is $3,700. Talk about a whopping kind of amount of money that you have to pay for your living. Yeah.

Yeah, and you look across the country. I mean, Toronto's still up there. And I think something you've brought to our attention was the strength in that Calgary and Edmonton market when it came to sales, et cetera. It was the outlier to the rest of the country in terms of real estate. But I think that's the same thing when it comes to rents.

Yeah, and that's a great point, Mike, because a one-bedroom unit in Calgary is actually up 10%. Now, it went from 1,555 to 1,715 for Vancouver, right? That's still a good rate, but that's a substantial increase. And guess what, Mike? In Edmonton, it's up 15%. And there's some method to the madness. As listings increase in Toronto and Calgary, maybe there's many owners saying, you know what?

I can't sell, I haven't gotten an offer, maybe I will put it on the rental market and maybe that keeps sort of a ceiling on the increase. Whereas in Calgary and Edmonton, hey, we've talked about it over and over, the immigration that's gone into Alberta.

People go by job scope. Yeah, it is. That's an interesting thing, though, to think about the byproduct or the knock-on effect. You know, so I'm seeing, as you say, outside of Alberta, I've watched this huge growth in listings and more to come, I'm sure, when we get the latest data coming out for May, which you'll give us next week. You'll put on OzBuzz before that, though.

You know, I mean, it's important to see those listings, but maybe you're right. Some people, good news in a way for renters, because the more product out there, that's going to be the key. You know, government isn't lowering their costs. They're not pushing their property taxes down. I mean, I see so many examples of that. You know, the landlord's costs continue to go up, whether you're hiring someone to do a roof fix or whatever.

what have you, you know, that list is a long one, but more supply would be positive. So maybe that's your silver lining. You don't want to depress me today, but it's your silver lining saying, hey, if people can't sell and the market continues to slow down outside of Alberta, maybe that goes on the rental market. Yeah, and the important thing to realize is you work in your specific area, your suburb, look to your professionals as to what your rates are. For instance, when we look at sales, one point,

1% down this year over last year, the BC Real Estate Association, which has a great website, by the way, they show when you look at the numbers in the Okanagan, actually sales are down a whopping 9%. Whereas you go to Powell River, it's up 50%. You know, it depends area by area. So the average is, you know, you put one foot in hot water and one foot in cold water, on average, you're supposed to be lukewarm. Well, you're not. Yeah, exactly. Exactly.

Well, let me come to one other thing, not to throw a curveball at you, but talking about pre-sale inventory. Okay, so if there's a big pre-sale inventory and they can't get financing, I guess that's bad news in it reduces supply. You know, they may not go forward or may delay or et cetera. What are you seeing? I mean, you know, you can go anywhere you want, but I was thinking of, you know, huge expansion of the population out in, you know, suburb of Vancouver, his own city, of course, in Surrey.

Well, yeah, we have some 3,500 pre-sales looking for buyers. And I think the unintended consequences of governments put in NBC with our 20% flipping tax and the federal government with our 40% plus tax and GST and so on. You know, the investor maybe says, you know what, I'm getting 5.5% in my bank.

I don't have to worry about it. And maybe they are not as hot as they once were. You can see that in some of the incentives that are being offered. There are some incentives. Hey, you get a car. Some incentives are 5% down. Some incentives are we'll pay your interest on your deposit. And that is a reason why

The reason is that the developer, like people are not really that informed. They don't realize the developer doesn't have $80 million laying around. He has to get a loan and the bank says, hey, if you don't have 60 or 70% pre-sales, we don't give it to you and the building is not built.

And again, that's why we're watching that closely across the country because, of course, I think we now all agree there's a supply problem. You know, we still let in 411,000 new adults came into Canada in the first four months of this year. And any changes to the temporary visa program don't kick in until next year. So there's still going to be huge problems.

pressure on the real estate market, huge demand pressure, whether we're talking rents or actually buying houses, but I still think rents feel that the most. So yeah, I mean, those are important things.

And that is one of the actual probably most overlooked points, Mike, that you very aptly mentioned. Because if we take out a lot of new product, that means the existing product, the pressure on prices is going to reappear, right? I mean, particularly if the rates go down next week and we have a psychological lift, then there's less product. You know, if some of these developers that are in the pre-sale game now back off and say, you know what?

we're going to postpone the, we can't get the pre-sales. Well, that means the existing product has more pressure to go up.

As I say, this is a subject, I mean, the chance of the federal government getting anywhere in the ballpark of 3.9 million units by the end of 2030 is, I put it at zero. But, you know, so this is a subject when we look at supply is going to be with us for a long, long time. And that's why people should go to ozbuzz.ca. You can go to OzBuzz, you can get the weekly newsletter. It doesn't cost you, but you must put in your address. Otherwise, how do they know where to send it?

So there you go, ozbuzz.ca. Ozzy, go out and have a terrific week. Thanks, Mike. And remember that statistics is the only science where two recognized experts using the same set of data come to completely opposite conclusions. There you go, ozbuzz.ca.

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Let's go live to the trading desk now. Victor Adair joins me. Hey, Vic, earlier we were talking, of course, with Kevin Muir, and I'm sure it grabbed a few people's attention when he says he thinks the Canadian dollar is going to make some all-time lows here. And I think back, as I said to him, what, $0.62 dollar?

Well, you know, Kevin and I have been friends for a number of years, at least five or six years. I've read all of his reports over that period of time. I've got a lot of respect for Kevin. And when I read his report here about 10 days ago, he really took the boots to Canada and gave his reasons.

What I've noticed is he's not the only guy who thinks that way. In the futures markets where we trade the Canadian dollar, we have a record-sized speculative short position. And it's really built up over the last couple of months as other people out there are taking the view that Canada, the Canadian dollar relative to the U.S., okay, be clear, is likely to weaken.

And I know there's a lot of variables always involved, but one of them will be interest rates. So we meet, our Bank of Canada meets coming on Wednesday. And when you got the GDP number coming out Friday to being a little bit weaker, only 1.7% growth, but

You know, that was weaker than analysts think. So it sort of sets the stage for maybe a bump down in interest rates. Or is that what the markets are thinking? Yeah, right now, the forward interest rate markets in Canada are pricing in a 75% chance of a 25 basis point cut. And, you know, there'll be the usual language around why they do that.

By the way, the very next day on Thursday, the European Central Bank is meeting and they also the market's expecting them to cut rates by about 25 basis points. So, yeah, it's always about what's already in the market or what the market's expecting.

Well, speaking of that, I want to go back a week and you were sort of ringing a bit of an alarm bell about the kind of moves we'd seen in copper, for example, or, you know, the gold strength, etc. And you looked pretty good this week because we sure got a reversal.

Yeah, we had, I think the classic, and I don't remember if we talked about this on air last week or not, but NVIDIA came out and everybody and his dog had been waiting because this had the potential to be huge. And it was, you know, their share value climbed, I don't know, $250 billion on Thursday morning. So the NASDAQ and the S&P registered all-time highs on Thursday morning and then turned around and closed on the lows of the day, even though NVIDIA stayed up there.

I saw that and just as a short-term trading signal, I said, man, that's bearish. So I got short the market. And that's kind of continued here this week.

but the in behind that my thinking was that a lot of these risk assets that that's different stocks and certainly the metals had maybe raced a little too high, too fast and were due for some sort of a correction. And that's what's happened here. Uh, you know, in the last week to 10 days. Well, and again, you know, people can take profits, you know, they've had a nice, especially a quick and strong move like they've been experiencing in copper, for example, and I'm long-term bullish copper, you know, uh,

You know, or gold, long-term bullish on gold and silver too. But, you know, it's just the internals. When somebody's made a lot of money quickly and they're a trader, as you are, Vic, you're a trader. Well, you know, a lot of times they'll just say, hey, I think it's time to get some money off the table and I'll sit back and see. Yeah, my, you know, I think to be successful in this trading game, you have to be a bit cynical or maybe discontent.

You have to be a bit cynical to be successful in life. You just got to take things to the grain of salt. Yeah, I can understand the long-term bullish story on copper, especially, and gold and so on, and the stock market.

But, you know, like who hasn't heard the story? So when I think I always like to look for when a market gets ahead of itself or going up or down and I'm willing to take the other side.

That's just part of it. I think your point is an important one, though. I always looked at it like I'm in a lineup, and if everyone's already finished that line, who's left? You need buyers to push something higher. You need sellers. I know it's more complicated than that, but I meant, hey, when everybody's got the same vision, you've probably extended as far as you're going to go on that. It's not a guarantee, but I'm just saying I think the risk goes up.

as we get further and further into those situations. I'm just sharing because I think it's important to understand about how markets work. Well, if we can just take that idea back to what we said about the Canadian dollar, there is already a massive short position in Canada. So there's a lot of people who think Canada is in trouble. When I say Canada, I always mean the currency. But for them to take their profits, they have to buy Canada.

So, yeah, maybe the bad news is already out and all these guys have jumped on it. And again, that is on the short term, maybe on a longer term, whatever, a couple of years from now, the Canadian dollar will be at 50 cents. I don't know.

Well, we'll be here to chronicle it, I hope. That's the optimistic view. I invite people to go to victoradair.ca, victoradair.ca. He puts up his trading notes every week. Great stuff, great charts. Do that. Vic, thanks, and have a great week. Thanks, Mike.

Time now for this week's Goofy. You know what? Some bad ideas never go away. Specifically, I'm talking about the push by some politicians and NGOs to give 16-year-olds the right to vote. As I said, it's not a new idea. It gets resurrected every few years. I think this is a Hall of Fame bad idea that's born out of a huge disrespect for the complexity of government.

You know what? I mean, you can decide for yourself, but personally, I work too hard for my money to have 16 or 17 year old grade 10, grade 11 students who due to their age, no fault of their own, but they have limited real world experience. And we're going to have them make serious financial decisions with about half the money I earn, which gets taken in some form of tax. I mean, come on, virtually all of them have been living under their parents' roof, haven't made a mortgage payment. They've not raised a family and don't pay income tax.

I mean, we have to give special permission for a 16 or 17 year old to be tried in adult court because it's assumed they're not yet capable of making adult decisions. We don't let them buy marijuana because their brains are not fully developed. They can't buy alcohol or cigarettes. No bank or credit union would allow them to take out a mortgage or line of credit. I mean, actually, they can't enter into a legally binding agreement. But the research is conclusive. A 16 year old's brain is not fully developed.

The prefrontal cortex, responsible for executive functions like planning, decision-making, impulse control, is one of the last areas of the brain to mature and continues to develop well into the early to mid-20s.

Before I go on, let me salute the silliest argument I've heard in support of 16, 17-year-olds voting is that they should be allowed because government policy impacts them. Well, no kidding. But you can make the same argument for a 3-year-old, 10-year-old, 13-year-olds. You know, I'm willing to bet big time that the people pushing lowering the voting age don't let their children make financial, major financial decisions for the family. I doubt there's ever been a conversation like this when...

Sally or Johnny comes home from grade 11 history. Hi, honey, which mortgage do you think we should take? The 20-year amortization variable rate or the fixed five-year term with the 25-year amortization? I mean, do you really think it's the teenage kids who decide when to buy a new car or what car to get and then assess the financing options? I mean, come on, give me a break.

If you think 16 year olds should vote, let's let them practice on you. We'll pick a few random children to come to your home and make all your financial decisions. You know what? For over four decades, I had the joy and the privilege of volunteering with 16 and 17 year olds. I mean, lots of really bright, responsible kids.

But I never knew one with a sufficient level of understanding as to how the tax system works or the implications of block funding for hospitals or what an unfunded liability is or a basic idea as to how tariffs work or trade policy.

Now, I suspect, though, the real reason that the progressive left thinks lowering the voting age to 16 is a good idea is that they think they'd get the lion's share of the votes. Well, maybe that's just an extension of Winston Churchill's observation that if you're not a socialist at 20, you don't have a heart. But if you're still a socialist at 30, you don't have a brain. That's all the time we have this week. And by the way, I really do appreciate when you listen and you tell people about money talks or

you know, re-quote stuff we put on Money Talks tweets or tell people to go to Mike's Money Talks.ca or Michael Campbell's Money Talks on Facebook. And just a reminder, you can sign up for five minutes with Mike. We'd love you to do that. It's absolutely free. Just go to Mike's Money Talks.ca. Have a great week.