August 3 Episode
59:30 Share

Welcome to Money Talks. I'm glad you're with us on this long weekend. I am really excited to have Peter Grandjic with me. He's been writing some great stuff, I think, on the challenges that both society and the economy face, but how to drill down into what we should do as individuals. I mean, I think many of us feel overwhelmed. We recognize some of the problems, like with escalating debt, for example, geopolitical concerns, but what should we do? I'll ask Peter about that.

I've also got Aussie Jerk with me. You heard about the new 30-year mortgage? Well, Aussie's going to tell us it's a nothing burger. Plus, we've got Victor with us. I got Michael Levy with us. And of course, we've got a Goofy Award. And it's a very important Goofy Award, maybe a little too serious for a Goofy. But I can't believe it's happened. Wait till you hear it. But first, I must say, I love watching the Olympics. I can't get enough of watching sports that I rarely see.

Like, for example, now I'm an official fan of Rugby Sevens. What a great game. Now, of course, it's easy to get excited by the incredible effort of the women's team when it can come from behind victories over France and number two ranked Australia before coming just a little short against number one ranked New Zealand. But talk about heart, toughness, never say die attitude.

But those are the characteristics we can apply to any of the 337 members of the Canadian Olympic team and the 130 members of Canada's Paralympic team. By the way, that gets underway August 28th. But I loved watching the reaction of my seven and eight-year-old granddaughters watching 17-year-old Summer McIntosh win the 400 IM. I mean, they wanted to go swimming immediately and they had the same reaction when she won the 200-meter butterfly.

But I have to admit that I also feel conflicted when I watch our athletes in pursuit of their personal excellence. I mean, all of them are phenomenal role models. They represent the essence of merit. But that's where it gets confusing in a country that has clearly rejected the concept of merit and pursuit of excellence in so many areas. I mean, as famed economist Thomas Sowell observes, there's now been created in a world in which success of others is a grievance rather than an example.

I mean, you don't have to look any further than the government's talking points around the increase in capital gains tax, where both the prime minister and the finance minister never once acknowledged that people become financially successful by exhibiting many of the same characteristics as our Olympic athletes. I mean, things like hard work, perseverance, dedication. Instead, they were vilified. I think more importantly, when it comes to Canadian values, the pursuit of excellence is never mentioned.

And that's reflected in our major public institutions. Have you ever heard excellence as a goal of public education or health care or the efficiency of the public sector? Nope. Instead, we get far greater emphasis on things like seniority or gender or ethnic bias, a balance rather. I mean, that attitude is well reflected in so many other areas of Canadian society. But I want to come to our health care system.

And I'm not talking about the people there. I'm talking about a system. For example, the Canadian system ranks near the bottom in most of the recent Commonwealth survey of 11 Western nations when it comes to getting care, even lower than the U.S. in some categories. I could give other examples, but let me instead ask you a question.

If you really had to put money on it, your money, would you bet we're more likely to achieve mediocrity or excellence in a given area that government operates? Mediocrity or excellence? As a country, we've not decided that excellence is something to aspire to. I mean, after all, the pursuit of excellence would mean accountability. It would mean change in some cases.

And think about this. In all the lectures by self-described progressives and so-called Canadian values, not once have I heard excellent mentioned as a Canadian value. Well, thank goodness our Olympic athletes set their own standards. But excellence comes at a cost, as our athletes' personal sacrifices amply demonstrate.

I see a big societal benefit from supporting and celebrating the excellence of our Olympic athletes. I mean, they are wonderful role models for our children, especially in a country where hard work, focus, and success are so often denigrated for political advantage.

Every time I think of Peter Grandage is going to be able to find time to join us. It puts a big smile on my face. He's the original Wall Street whiz kid. And by the way, if you go to his site, Peter Grandage dot com, you can get a free copy of the updated version. Incredible wisdom is Peter is very honest about the ups, the downs and the all arounds of the investment business.

as well as giving some very prescient advice. I'm so pleased to have him with me. Peter, thanks for taking time. Michael, I tell you this, there's no one I would hurry faster to speak to than Michael Campbell, so it's never an issue on my side. Tell my wife that, by the way, please. Okay. Peter, sincerely much appreciated here. I want to get right to some of the stuff you've been doing, and you can get it on Twitter, on X rather, Peter Grandage. You can also get it on PeterGrandage.com. But you've been talking lately about,

last several months, though, about the big worry you have, the big sort of storm you see brewing over Canada, the U.S., Europe to some degree, or even a worse degree, let's say. But explain that a little bit to us. Yeah, so back in March, I just came out and said after I was approaching my 40th year in the business, and I said,

This is the worst I've ever seen it. And I think we really have to build what I call the financial lock. And I gave five key reasons that there were others underneath them. But these were the five. The first is one we've been discussing for years, but it's become apparent now it's really acute. And that's our debt situation here in the U.S.,

It's hard for Michael because you and I go back the same time. I never imagined we'd talk about trillions anything, let alone 35 of them. But that's what the hard debt is now. We've got a congressional budget office saying we're going to 54.

So if we just get to $50 trillion in the less than 10 years that they say, and we have a 5% interest rate, we have a $2.5 trillion interest payment. The best this country's ever did was two years ago was $5,300,000,000,000 in revenue. So even if that gets boosted up some, we're going to see almost half of our money going just to pay interest. So the government that we know or what we expect to get services on is not going to be able to be the same government. So that's the first one.

The second one is a combination of retirement and an aging crisis. 65% of Americans are working paycheck to paycheck. They're never going to reach those beautiful commercials that they watch about how you can live the last part of your life happily ever after. And unfortunately, they're going to put more demands on government as they get older because it's just you and I both know it's not as easy to do things now than it was 30 or 40 years ago.

That and the switch from the boomers having much of the wealth peaking in numbers. And as that goes down, as that money shifts to a younger generation, that younger generation is not going to be as happy to support us old timers who may still be around and want lots of money spent for medical stuff and all when they can barely put food on the table. So I expect that to be a battle.

The third was the immigration. And I think Canada and the U.S. have faced it both for their own selves in a very difficult manner. It is a I just look at the mostly the economic part of it. Most of the people who've come with their shirts on the back and most of them, at least for quite a while, are going to need assistance. They're going to be more of a liability than an asset. And that adds already to the difficulties we're having before they showed up.

The fourth is the big one, Mike, and that is the one that I believe Wall Street has completely blown and will go back to be maybe their biggest blunder ever. And that is giving little or no regard to the formation of the BRIC nations.

especially now when it looks like almost 60 totally are going to unite and join and have already openly discussed how they will trade and how they will do it through a unit that will consist of currencies and gold, yada, yada, yada. And the United States is outside looking in. It's not any part of that. And Wall Street still pays almost no attention to that.

And then finally, the fifth one, and I think we both have this problem, both Canada and the U.S., we have political paralysis here. We have two parties that can't work together at all, could not go in a room now to do any real serious legislation. And they each have a splintering group that's moving away from their center. For the Democrats, moving more left, and for the Republicans, moving more right. And I like to say to my Canadian friends, if we both traded our leaders right now, we each think we got the short end of the stick.

So those are some of the issues. There are others, crime, things of that nature, pension fundings, all. But realistically, the biggest issue, Mike, is the one that scares me the most. Until these last couple of days as we speak, we have another big down day in the market. The complacency among investors and the professional community giving all these issues.

and paying almost no heat to them or any real concerns. And in fact, if he would just cut interest rates, the market will live happily ever after again. All these things make me feel that I think the time is to be a live chicken versus a dead duck.

Let me just add one more. And as you say, there's a myriad of issues. I can't believe the degree to which the geopolitical risk isn't, you know, isn't assimilated. It's not just talking Russia, Ukraine and some of the ramifications, but the Mideast is clearly escalating. And, you know, obviously that has energy implications. Well, what would be the implications if the energy went spiked because of more, again, an escalation in that area? I'm just saying it's not being considered. I don't read hardly any analysis of

You could if it was just oil, but when you're seeing the broad bend, you know, I don't see it. And the other thing I want to add is that you've got, obviously we're in the midst of an election season in the U S presidential election. And we don't need to get into that too much, but come on, neither candidate is, is one who's talking about getting that kind of deficit and debt. You're talking about under control. In fact, I think both would expand it. That's hardly a recipe for success. Absolutely. Michael. And,

And the most important thing about that is when this election is all said and done, assuming we definitely now have the two people that are going to be on the ballot come election day. Yeah. The bottom line is half of America is going to be totally disenchanted and dislike of whoever wins. And so to see harmony or at a time when more and more, as we just discussed, there are problems. I don't see any political victory. And I like to make a comment about your Middle East election.

It was one thing when we backed out of Afghanistan the way we did and we left a lot of our allies and they weren't happy about that. But what the United States has done to Israel, a staunch, staunch ally, realistically a peg that stayed there and really kept things in check and allowed us to draw our oil and live our ways and so forth and so on. This administration has all but thrown them under the bus now.

at a time when they are facing their biggest challenge ever. And who knows what will transpire out of this at all. So I think the whole picture of gammon, and you're right, the geopolitical, the political, the items, the crime, the acceptance now of, uh,

a woman can go in and get beaten up by a man in the Olympics. I mean, it's just, it's just, it's just unfortunate. And it seems to me can only get worse and be a long time before there's any hope for it to get better.

I've got a quote of the week coming up, by the way, that addresses that issue specifically. Like, how did we get here? Peter, I want to talk then about individuals. And I mean, look, a professional manages risk. And when you don't, you find out the hard way. I did a little bit earlier, I guess, this week and just saying the difference between all this political commentary. I hear the blah, blah, blah. When they're wrong and they get it wrong, they don't pay anything.

But in the investment markets, we learn because we actually pay a price. So you either start learning or you get out of that side of the market. And I've certainly got my list of lessons that I've learned. I've always smiled thinking, why did it take me that many times to learn that one? You know, the old line from Bernard Baruch, if you don't know who you are, the markets are an expensive place to find out. Well, I've proven that, by the way.

But, you know, so risk tolerance or risk management has got to be the key component. So let's talk about risk management within the context you just laid out.

And I mean, I think people hear that and they nod. And that's why Peter Grandage dot com is popular and you're popular. And people because people. Oh, yeah, that makes sense. I get that. Yeah. But the next question is, what should I do? Because I feel all of those events are outside of my control. Yeah. So I adopted almost 20 years ago and certainly in the last 15 years.

A less is more attitude. Get out of debt. Realize that as much as I could get a bigger car or a bigger house, it's not absolutely necessary and it puts too much financial mental strain. So a less is more attitude overall has been the motto of our planning group.

The second thing which changed along with building that ARC is I think you need to concentrate more now on capital preservation than capital appreciation, especially the older you are and the less time you would have to make up in case that capital depreciates.

I think it was easier at times and markets that existed that aren't as going to be that same way going forward. And so I think preserving that. And then I think the other thing that we have to recognize, and I have a real pet peeve in the market right now. And of course, I get a lot of nasty email and I'm just opening myself up for more, but

There's been a big push into a fairly new investment product that's only been around a couple dozen years. They call it Bitcoin. They call it cryptocurrencies. I have other names for it. But what troubles me most about that, Michael, and I'm very serious in this, is one particular person who would be considered, I guess, the godfather in that industry right now, a man named Michael Saylor.

And for years, he has gone on one after financial program telling people, sell your home, sell your cars, sell your stock, sell your borrow and borrow and not even put it across the cryptocurrency field. Just put it into one. And by the way, it just happens to be where I own and leverage to the hill on.

And no one says that that absolutely is the number one cardinal sin for any fiduciary financial response. If I said that about gold or any other one investment, you should throw me off the channel. You shouldn't ever do that. And so one of the things that's created now is it's created this mega of online.

almost in a sense, get rich quick kind of atmosphere in the investment community that really hadn't existed since they got rid of the penny stock phenomena in the 80s and 90s. When you used to get that call and, you know, there's a little 10 cent stock and it's going to the moon. And now we watch the Wolf of Wall Street to understand what they were doing back then. This type of attitude being widely accepted now, financial service firms running an exchange traded funds,

Chairman and CEOs, we just had the VanEck guy on telling everybody to put 30% of their money into Bitcoin. I mean, this is very troublesome for me, Michael. And this is something I think combined with everything else will be that when you look back at the story, when everything does implode, we go, ah, we should have known then.

And an interesting point, again, we're talking risk management actually here, you know, that, as you say, getting that enthusiastic over one class. And we've seen so many examples recently. I mean, look at the tech move, but in the 2020-21 period.

Look at those, I guess they're called meme stocks. You know, anytime you get that much enthusiasm, you've got to have your risk alert on. And as you say, it worries you when he gets that overblown or that wholeheartedly and says, you know, sell your house to do this. I mean, yeah, people should take that with a massive grain of salt. No question about it. And I just think it's part of this overall trend.

gambling, more aggressive that people have become. And I think it's part of society's calling up that this that Wall Street and Madison Avenue has convinced people that more money equals more happiness. And therefore and by the way, we can help you get there. And they chase and continue to do things. Listen, Mike, I'm still part of a planning group and we still see average families right up to

still a few athletes that walk through the door. And I'll tell you, still seven to eight out of 10 families are living at least one lifestyle above their finances. Everybody goes, how do they do that? Well, they borrow as the first thing. And it worked for a while because they kept refinancing as rates went lower. They have a few thousand dollars worth of car leases or car loans sitting in the driveway. They don't put away for retirement and other things because they're using that money to live now.

And that runs out. And unfortunately, here in the U.S., I don't follow the Canadian market enough to say, but that's typically America. Listen, 50% of the total income working force in America right now, so the bottom half, 4%.

40% of them, so 20% overall of our workforce, is using credit cards to simply pay for food, electricity, gas, the simplest of things. So, yeah, there's a small part up at the top that's done real well. But by and large, most people, and maybe like that in Canada, you know better than me, but most people have gone sideways to down.

And they're going to expect and want a government to do more who's fiscally not going to be in a position anymore to do that. We're not going to be able to just print $5, $10, $15 trillion again just because we want to.

There's so many things within that. First of all, I'd say it is the same in Canada. You know, you look at really consistently over the last two years polling and whether they ask them, have you had to change your lifestyle? Yes. Can you afford food prices? And the answer would be about 53% say no, you know, because our food prices are up 22% in three years.

You know, I can't believe to the degree to which we don't address that issue. The government hasn't addressed that issue. Maybe it's not so showing up in their voter, you know, registrations or whatever. But I mean, it's a huge issue.

I've never seen it so divided in Canada, you know, by the way, including our pandemic help up here in Canada, where the vast majority went to people who didn't need it. You know, we know that. I mean, I got a check at one point for $300 because I was old, you know, and by the way, I immediately donated that, you know, right back.

But yeah, I think that divide is being really underestimated, certainly not talked about. And I'm disappointed the media doesn't focus more on that. I certainly do on money talks because, you know, I celebrate people's success, but they don't need my help in anything. If you know what I mean, I'm not denigrating success. I'm just saying they don't need my attention and my help. And so very similar situations transpired in Canada.

The media in the U.S. has taken sides. That's the only way to describe it. There really, really is no true third party neutral type of group. We have one network that kind of dwells with a conservative type of hard Republicans would be.

And then the rest is spread among a couple of other networks that tend to be far more liberal and all. There are no more Walter Cronkites. There just aren't. And unfortunately, like I said earlier, no matter what happens in the election, and there may be a minor boost if Trump wins from the people that feel the country's been going in the wrong way, he's going to come in. And this is what I say to them. My wife is a Trumpster, Mike. I'm not a Trumpster.

I'm not a Democrat, but I'm not waving my flag every time Trump speaks. My wife does. And I always say to her, I says, honey, even if he wins, if you think what they went to get him not to win to the level they sought out of, do you think they're just going to go away today after election day? No, I think they're going to be 10 times worse. So I think after a short honeymoon period,

Trump will be right back battling, you know, in the same way he had to do during his first term. So I don't see any political salvation coming no matter who wins. And let me come back to meanwhile, the debt continues to go up. The interest payments continue to go up.

The huge amount of money that goes in the States are called pay-as-you-go entitlements, so they need tax revenue for that. You know, that list continues. And I think that's something that's overlooked by people who are so enamored with politics and the drama of politics. You know, meanwhile, the clock's ticking on the most important financial issues. And, I mean, I agree with you completely. There's not going to be change. And our prediction on money talks for ages has been, if you thought 220 was interesting and our prediction for it,

For 2016, we predicted Trump. 2020, we said the big feature will be the result will not be accepted. And 2024, we said if you think they didn't accept it in 2020,

whoever loses in 224, it's going to be exacerbated much to the challenge to the entire system here at a time when financially they can't afford it. So we'll see if that works out, but I'm willing to bet on that. So yeah, I'm very worried about those very issues that you're bringing forward. So let's come back to the individual.

And I think a lot of individuals say, I can't do anything about any of that stuff. You listed five things right at the outset and I added the war. I can't do anything about that. Yeah, but you can do something about your personal finance. I want to come back to what you said. Make sure your personal debt situation is under control. Make sure you reviewed your, you know, whether whatever investments you have for the risk tolerance. And then let me ask you about a couple of things within that, because I

Peter, you were the first person we had on Money Talks, and I'm going back to February 2020 at the World Outlook Conference, and I'll say that 2020, 2021, and I'll say we're thrilled that you're coming again this year, 2020. Can you believe it? I'm saying 2025, but 2025, and you said uranium.

You stood up there and said, I got one word for you, uranium. Well, that certainly worked out. Where are you at with that now? Yeah, so this past January, I got out, Mike, but I got out not because I thought the story had ended and was going to collapse, but more because, as you noted, we got in so early. I was buying uranium when it was under $20, and little companies like Cameco had $8,000.

So it did real well for us and we moved out. I think that market got too overexcited. And even though the supply and demand scenario is still bullish overall, there was always one challenge that at

that none of the other metals had. There were so few opportunities to play producers in that segment. There's a handful of them. You know, there aren't a handful of gold stocks. There's hundreds you can play. The same thing with silver and all that all around the world. And that's always been the product. So the rest of the thing that gets hyped when people talk about uranium, they run in them by little junior stocks. Well, first of all, the whole junior resource market was –

in a terminal state to most recently. It was my, that part of my portfolio was on, on, on oxygen, Mike. I mean, it really has been tough and it's not coming back roaring anytime soon. Same thing for those juniors and also now we had the inevitable, uh,

sell off in that market when people concluded now all the hope and hype is not living up to expectations. And then the trouble you have in that market, Mike, is as you get later in the year and it doesn't rebound, people invest in a calendar year, even though

The product you're looking for in the ground doesn't know the difference between whether it's December 31st or January 1st, but they'll invest that way. So those stocks, unless they do make a quick recovery, are probably going to face more pressure as the year goes on. But if they get low enough again and the price gets low enough again, I would look at that market again.

I'm looking also at copper having finally a retraction after, you know, a huge bull run. When you look at something like that, and let's say the copper story still is predicated on shortages, on difficulty increasing production or expense of that, and then adding in, you know, obviously if they're going to do the renewable thing, you've got to have copper for whether it's the grid or whether it's the engine or whether, you know, whatever it is. Right.

So I'm wondering, do you look at that and say, okay, finally, I'm getting a price that I'm more comfortable with? You know, as you say, you get out of uranium, not because you don't like the story, but you don't like the price necessarily or the enthusiasm around it. And look for another reentry point. So the bear argument for copper is, hey, yeah, it's great. Only a few years from now, it's going to be a great shortest. But right now, it looks like the U.S. is going into recession. China's economic woes are getting worse.

yada, yada, yada. And that's true. The difference is, and why I maintain my overall bullishness for copper is, there isn't this awesome supply that's always out there. So if we do turn into recession, the price just collapses. I don't think that's the case. I don't think we'll get anything lower than the last low, which was like 350 or 360, even if we have a hard recession here, and even if China really has slowed down or actually contracts at all.

Having said that, that news is actually bullish for the long-term bulls because that'll be another year that we didn't start to put some real serious money in to look for these deposits that take a long time to find. They take a long time to develop. And the grade that's being pulled out of copper mines now is,

has fallen by well over half of what it was just 10, 15 years ago. So whatever is out there, they got to pull more rock just to get the same amount of copper. So the copper story, if you're looking past 2024 and you're still, Mike, we're probably one of the last few people that invest in terms of years. You say years to some young people that look at you, are you crazy? But the bottom line is, I think if you're a long-term investor, copper has great opportunity to be involved in.

Let me finish with one last thing you mentioned about Bitcoin and percentage of our portfolio, etc. What would you recommend? And again, these are really broad questions and it's difficult to answer because are we talking to a 25 year old? Are we talking to a 65 year old? You know, but again, just the percentage of a portfolio that should have gold or silver or and.

So I've always told people since it was 1200 in our planning group, buy it and hope it doesn't go up. And Mike, almost all of them look at me in the same way like a dog. And then they go, Mr. Greenwich, they always turn their head for somebody. Well, Mr. Greenwich, why do you want me to buy something that is actually hoping you're not going to go up? And I would say, because chances are it goes up a lot. What you do own a lot, which most people have stocks and bonds, they don't have gold.

is going to go down. And therefore, it's an insurance policy. I always say the very minimum, even though the price is way up compared to where it was a few years ago, you buy it first as insurance. Me, I did something really aggressive three years ago at the end of 2021. I thought it would outperform stocks and bonds. So I got rid of stocks and bonds just to own gold. Now it happened to work out and I'm not telling people to do that now going forward. But I think you got to remember one thing this about gold that people are not

are forgetting and many because i don't think even financial advisors know this the the bureau the the bank of international settlements is really the central bank's banker okay and they basically front run and make the rules eventually how central banks are going to work and what they can and can't do a few years ago they made the unusual move of raising gold to a tier one investment

So stocks, bonds, and gold to them are the same equal. They're all three tier one investments. Yet if I went in Canada or the U.S. and went to any type of financial service firm and looked at any of their portfolios, most people have stocks. A lot of people have bonds. Very, very few people have gold in it. And yet the central bank's banker banker thinks it should be, you know,

Hire you the same weight. So I think there always should be ownership minimum as insurance. And then if you speculate a slash gambler, because that's the same thing, speculator and gambler, you can look at it to, you know, to try to make capital appreciation on it through mining shares or even the riskiest of risk junior resource stocks.

Great stuff, as usual, from Peter Grandage. Peter, thank you so much for finding time. And I want to remind people, go to PeterGrandage.com. Go to Peter Grandage on X Twitter. Lots of updates on that. I'd love to hear your interviews, too. Peter, thanks for doing this one with us. And let me just say, Mike, to my followers, I hope to see you in early February in Vancouver. My last conference ever. No place better to make that appearance than at your conference, Michael.

Great stuff. Thank you, Peter. Time now for the quote of the week. You know, as I said in the opening commentary, I love the Olympics, like to watch them. But you know what? At the same time, I was appalled at the opening ceremony depictions last mocking of the Last Supper. That's a profoundly significant event in Christianity. You know, the Olympics purports to promote peace and harmony.

What empty words in light of that demonstration. You know, there's an estimated 365 million Christians facing persecution throughout the world. And this is the Olympics response? I mean, why the organizers thought mocking such a profoundly significant event in Christianity or mocking any religion for that matter, thereby offending literally billions of people throughout the world,

You know, why did they think that was okay? Someone should be asking that question. You don't have to be Christian to find the spectacle disturbing. I mean, anyone who purports to respect our differences, even celebrates them, should be appalled. And sure enough, it did distract dramatically from the opening ceremonies and the Olympics themselves. But it was Christianity. Do you really think they dare mock some other religions?

It's not a stretch to link this mockery with the constant attack on Western values. And that brings me to the quote of the week. 1945, philosopher Karl Popper wrote in one of the earliest formulations of what's called the Paradox of Tolerance. He wrote it in The Open Society and Its Enemies. A proposition that today's open attacks on what's generally called Western values, like democracy and freedom, as well as open attacks on Western culture, makes it as relevant today as it was decades ago. And it's straightforward.

If a society's practice of tolerance is inclusive of the intolerant, intolerance will ultimately dominate, eliminating the tolerant and the practice of tolerance with them. I'm going to repeat that. If a society's practice of tolerance is inclusive of the intolerant, intolerance will ultimately dominate, eliminating the tolerant and the practice of tolerance with them. My suggestion is we better start paying attention before it's too late.

Well, as expected, the Bank of Canada lowered interest rates this past week. But big talk about the U.S. following suit in September. But also, will that leave the door open for Canada to reduce rates once again in September? I better get Michael Levy in here to talk about this. Mike, on Wednesday, you know, the lowering of the Bank of Canada rate didn't surprise anyone. That was widely anticipated today.

but I think a little bit of interest in the U S making it pretty darn clear. They're going to lower rates in September. Mike, in fact, a hundred percent of the market analysts think they're lowering rates in September. Not that they've been right all the time, but a hundred percent is pretty convincing. Well,

Well, I've got to tell you, Mike, that you take a look at what the U.S. Federal Reserve did, and they telegraphed that. And we talked about it is during the nomination season, they were not going to get themselves in the middle. And still, Trump

is yelling because they're going to do it in the fall and he doesn't think that's fair let's take the politics out of it the us is going to lower rates but i don't think at the same velocity that canada is going to lower rates up things in this country look mike real gdp growth of 1.2 percent this year that's roughly 100 basis points below the the economy's long-term potential

The projection of 2.1% in 2025, 2.4% in 2026, that implies that forecast rates are coming down. They're signaling every which way that's what they're going to do.

Let me just throw a reminder in there, Mike, that, again, I see a lot of people talking about the economy, GDP. That's easy to do. It's easy to get a strong economy when you're letting in the number of people we are. And I'll get to that, by the way, in a few minutes in the shocking stat. I think people are still shocked at how many newcomers are coming into this country. They're going to buy food, clothing, shelter. That's going to push GDP. That's why, instead, most economists look at GDP per person, per capita, per capita.

And on that scale, as you say, Mike, it's not very rosy. The other side is look at the household debt situation.

you know, to disposable income, you know, compared, you know, it's not as high as it has been, but it's still way up there and certainly much higher than the U.S. Well, it is, Mike. In Canada, you've got 163% of disposable income to household debt. It's 93% in the U.S., Mike. And, you know, when you look at our rates, you've got to know that they have

to be coming down because what we're talking about and the problems that are within our economy, within our country, are ones that are self-made. It's not happening by accident. And our rate right now, our bank rate, policy rate, should be around 2% instead of the current 4.5%. And even if the economy wasn't perfect

balance, we should be at two and three quarter percent right now. Where are we? At four and a half percent. Well, God, that's just knocking heads with what this hole we're trying to dig ourselves out of. Well, you know, the other thing, we get another set of numbers coming up. We get the inflation numbers for July. We get them August 20th. I think the bank meets September 4th. So they got one more set of numbers and it's still about inflation, you know, in Canada and the States. But I mean,

When I look at it, I mean, it's got to be helpful when the Federal Reserve did everything but drive us to a rate decline in September, as you were alluding to a moment ago. That's got to make it easier for the Bank of Canada because they don't have to worry about relative currency value, for example.

No, they don't. And that, as we were talking about, should protect the Canadian dollar somewhat, even though earlier this week it did come down and it's popped back up a little bit now because of the U.S. telegraphing that they're going to lower rates. But, Mike, until we get our GDP growth back on the

on a front burner when we get the politics or some of the politics out of the equation and do what we have to do. As you just said, sure, GDP is going to go up a little bit because we have so many more people coming into the country and they're buying things, but it's not a

healthy way to do it by adding to population. We've got to get investment back in this country. We have to have government to take a more focused look on how they are going to advance the economy in this country where everybody is participating in it instead of just quoting numbers, not saying that we brought in 500,000 refugees so GDP is up. They'll just stand there and say, GDP is up. Look, we're doing well.

Yeah, lots of work to do, and you look around. But again, it's this weird dichotomy. Weak economy equals lower interest rates, you know, and that's what we've been living. We'll be there to check on it, of course, Mike. You and I will in the meantime. I hope you have a good week. You too, Mike. Thank you. Thank you.

Time now for the shocking stat of the week. But first, I better give you some background. You know, Canada's population grew at the fastest pace in six decades last year. We added nearly 1.3 million people, brought our total population to about 40,750,000 on January 1st this year. That growth was the highest of any Western country and now rivals the records that were set in 1957 when our population grew by 3.3%.

Now, the federal government itself admits that dramatic increases put pressure on housing, pressure on rents, but we shouldn't stop there. I mean, simply put, Canada's social infrastructure couldn't keep up. It can't keep up. I mean, it's still astounding that the government did not anticipate and didn't plan for the housing needed to accommodate the increased immigration targets. Actually, maybe it's more astounding they have no idea how many temporary student and work visas have been issued until after the fact. So how do you plan for that?

You know, as Canada's leading expert on economic impact of immigration, it's Waterloo University's Mikkel Skrutrud stated on Money Talk just last month, when a visa expires, the government also doesn't know, doesn't have any way of knowing if the person actually left the country.

You know, Canada's immigration system used to be the envy of the world, but that's changed since 2019 when the entry requirements changed. And with it, it diminishes the economic argument and so many other things. I'd invite you to look into it. But I want to get to this week's shocking stat. Canada's population crossed 40 million people.

Last year, June 20th, 2023. Well, today, what are we, 14 months later in a week or something? It's grown by 1,527,000 people. 1,527,000 and increasing. It's simply not possible to do things like provide the housing, other social infrastructure. But we already knew that. I think the government's succeeding in undermining support for immigration.

Using the broad measures, think about this, of 50 new housing units for every 100 people that come in or increase in the population. Well, we should have built about 750,000 plus in the last 14 months. We're not even close, not even a third of that.

The announced reduction, though, in temporary visas, they're going to reduce it. They're going to drop it by about $150,000, bring the target to $200,000. Well, if that actually happens, it will help. The problem has been years in the making, though. And the photo op, new housing construction stuff is barely a drop in the bucket. In short, the politicians that created the problem with their short-sightedness are not going to be the ones who solve it, especially given their anti-business, anti-development attitudes today.

And it's evident in all three levels of government, along with, though, the continued increase in housing associated costs and levies.

You know, it doesn't take a genius to figure out that housing is a huge issue. In fact, I'll say that housing is still underestimated. The impact of lack of affordable rents, affordable housing, and the actual shortage, I think, is underappreciated still. I mean, we should be ringing the emergency bell on this, but we're not. But despite that, we've got governments scrambling to pretend that they're doing something. And note that I said pretend because it's not even close to what's needed, as I said in the shocking stat of the week.

But I want to bring Aussie Jurek in here because the latest foray into that is the government announcing as of, I guess it was on Thursday, August 1st, that you could do a 30-year mortgage. Now, we already had 25 years, by the way, but we're going to do a 30-year mortgage. I wanted to get Aussie in here to get some reaction. But, Aussie, let me start with this. We know that the U.S. has 30-year mortgages.

but our 30-year mortgage proposal is very different from what they're instituting or have instituted. Well, there's always a difference between the term of a mortgage and the amortization period of a mortgage. The amortization period just calculates the length of time it takes back the mortgage. The term for how long the interest rate is fixed. So in Canada, we've had a one, two, three, never more than a five-year term for the average person. There's a five-year term

And there was a 25-year amortization. In the United States, there's no such thing as a term. It's a 30-year amortization. That's why in the last few years when people had a 2% mortgage fixed in the United States, it was for 30 years. So that's why they're not moving. That makes eminent sense.

For us, the change, first of all, it is new buyers only, first-time buyers, on new build. It's not everything. In the United States, a three-year mortgage is everything on any house, old, used, new, any buyer, old, used, handicapped, doesn't matter.

It is available to everybody. So what they're trying to do is get more new places built and help new first-time buyers. The question is, is it going to work?

Well, the other thing, of course, is what we're facing right now is this tsunami of people who have to renew their mortgage. You know, they took it out in 2020 or 21 or whenever it was. They've got to renew. But I want to be clear here. We're not talking about, as you say, in the States, if I got my original mortgage, that mortgage rate is locked in. That's it. But in Canada, we're talking even if I've got a 30-year amortization, the payback period is extended, I'm still renewing the interest rate portion

you know, probably after five years, you could do it shorter, but let's say after five years, uh,

So you would have been caught in this just the same regardless of that extended amortization if it was available, for example, in 2019, 2020. You'd still be facing the increase in mortgage payments. Yeah, and that's the point. Now, is it necessarily a bad thing? I don't think it's a bad thing to have lower monthly payments during that five-year period. And it all depends on the gamble that we Canadians have to take on what the rent is going to be. You want to buy a house, but what you're really doing is you're gambling with your future.

But the key is this, that while it might help me during the five-year period,

It also lets me buy more house for my money. So there is a real argument to be made that, yeah, the payment is now lower, but the interest goes mostly now all to the bank. And it doesn't benefit me at paying off the mortgage. And secondly, I might say, okay, I can stretch a little bit more and buy a little bit more of a mortgage, which would be a negative. So it's something new. It's something to look at. For some people, it really helps, but it's not a game changer.

Well, that's what I want to come to. It's not a game changer because that's not what the problem is inside the housing market. You know, we could be talking supply stuff all the time, but we're talking demand more recently as we've seen a huge fall off on demand. Actually, another huge fall off on housing starts. But my point is the market wasn't sitting there waiting for a 30-year amortization. They weren't saying, oh, now that's available. I just think we should put it in perspective and

and just say, I don't think this, well, this is just me talking. I don't see how this has a big impact on the housing market because that's not the essential problem. Yes. And, you know, if you go to Ozbus, O-Z-B-U-Z-Z dot C-A, last week I put up a year's worth of sales statistics. I know I'm a numbers guy, but it's sort of clear if you looked at 2020, 21 for a whole year,

We sold some 15,000 plus houses this year from 2023 to 2024. Same period, same year. We sold 7,700. End of discussion. We have half the

the amount of properties sold in Vancouver than we did four or five years ago. That's a fact. So the buyer's not there. Psychologically, we're stressed out, whether it's interest rates or down payments or the economy. A lot of us getting laid off. We have huge troubles with DEI and EGS and all. Try to understand it. It's a crazy world. So the buyer's

where they were hopeful and psychologically positive last year are now not so hopeful and a lot less psychologically ready to buy.

Yeah, I mean, again, just to jumpstart that, I would say it's not the amortization period, and it's not even the two consecutive quarter point drops in interest rates. There's got to be a lot more to come before you get that sort of psychological shift, maybe another four interest rate drops. Some are saying as many as six.

But I think it's important that I don't want this oversold. It's not that big a deal, in my opinion, a 30-year mortgage. The problems are much deeper than that. And we could start talking supply in a moment. You know, all of that comes into play. And I just want to, you know, when people ask me about it during this last week, I just said, well, you know, yeah, it can help out if I get a lower payment. It's going to help out some people. But that is not the problem with the housing market.

No, but on the other hand, I'm a long-term bull on real estate, primarily because it is like Milton Friedman says, inflation is primarily a monetary phenomenon. We are in the mother of all monetary phenomena right now worldwide. And so I think value is eventually going to go up again, but not now. Timing is very important in real estate as well. That's why I wrote a book, Forget About Location. Timing is even more important. But the timing for the buyer perhaps...

starts now. You want to be in an area where you have a professional realtor that shows you options you can look at, you can make offers, you might run across a real deal. This is the time to do it. Not when everybody fights it, not in the living room with the seller, right? And then you pay a hundred thousand too much. No, it's not to be scared totally, but cautious, carefully evaluating your situation.

Yeah, it's a lot easier when you have time to consider, as you say, make more, not just informed, but as I say, not feel panicky in the market. But again, that's why people can go to OzBuzz. And I'll say right now, it is the website, ozbuzz.ca, with the most Zeds employed in the country right now. Oz, O-Zed, Buzz.

B-U-Z-Z dot C-A, and that's OzBuzz. And you can sign up there, by the way. Just sign up for the weekly OzBuzz report. Just put in your email so they know where to send it. And in the meantime, Ozzy, go out and enjoy the great long weekend. Thank you so much, Mike. And I've been wrestling with this quote. I'm trying to understand it, but Joseph Stilwell said, the higher a monkey climbs, the more you see of its behind. Ha ha.

And you know what? Everyone's thinking of their favorite politician. Ozzy, have a good week. You too, Mike. Thank you.

So much to talk about. I've got to go live to the trading desk right now. Victor Adair joins me. Vic, I'm going back to something we did a couple of weeks ago. I think it was the July 11th show when you made clear, and you made clear also on VictorAdair.ca, that you thought that was a turning point. And what you expected going forward was really some wild volatility out there. But I'll start with the turning point because that looks awful good right now.

Yeah, July 11 was what I call a key turn date. And what I mean by a key turn date is that a number of markets all reverse direction on or around the same date. And when that happens, that sends a signal to me, hey, something big is going on here.

On the 11th of July, the United States released their CPI data. And it was kind of bullish, you know, given what markets were hoping for. And it was that day that the NASDAQ made a new high and then turned down. It was that day that the Japanese yen made a new 35-year low and then turned up.

OK, and believe me, these things are related. I don't want to get down into the bushes here with you, Mike, but there was a number of markets that shifted gears that day. And the last couple of weeks on my blog, I've been writing about not only the key turn date, but what I call mean reversion.

We've had I mean, the yen has been going down for 12 years. The Nasdaq's been going up for 12 years, you know, and we got to a point where just you stretch the rubber band too far and you get what we call mean reverse where prices go the other way.

Well, another thing, and we've talked about this and you were alluding to it that time frame, was it's really interesting and people should take note. If something happens and then the response isn't what would be predicted, sorry, I'll make that clearer. So it's now a consensus that U.S. is going to lower their interest rates and with some significance, depending on who you're talking to. But they're not talking about just a quarter point. It's 100% in the markets predicting a rate cut in September as an example.

And then the market goes down. You know, no, wait, wait, wasn't it supposed to go up? And I think that's a key point to understand is that when the market doesn't react in a way that it sort of in quotes should have, that's something really to note. And I think we've been seeing that here. Yeah, I think it was two weeks ago on your show or three weeks ago, I said something to the effect of, you know, for the last year, I've been saying that the market is going to treat a cut by the Fed as a green light special to rally. Right.

And about a month ago, I said, you know, I don't think that's going to apply anymore. I think now when the market gets the idea, the Fed's going to cut because the economy is starting to look shaky. That's going to be, in other words, bad news for the economy is going to be bad news for the stock market. And that seems what we've got here. The market was kind of hanging on growth now. OK, we've had, you know, the big cap stocks have backed up a bit, but there's the economy is going to be strong.

And the Fed is, Mike, I got to tell you, the market is now pricing the Fed to cut rates. This is going to sound silly, but four to five times before the end of the year. You know, it seems like a couple of weeks ago they were there. Maybe they're not going to cut at all. You know, so we had this dramatic shift in that. And.

And, you know, where a year ago the market would have gone bananas to the upside if the Fed was going to cut rates. Now we've got this. I mean, the NASDAQ, I think, is down about 12% from the July 11 date.

Yeah, again, the market's already anticipated. It's factored it in and people just have to be aware that's how the market moves. As you were warning us about a couple of weeks ago, I want to go to gold for a second, you know, because we had had a night. We did have a nice rally in gold, you know, but the volatility in that market is also sort of eye opening. Yeah. Well, you know, we what we used to say by the rumor, sell the story or something like that, you know, by the by the story, sell the sell a fact. And

And what you were talking about just briefly there a moment ago was a what I call a news failure when you have what should be good news and the market goes the other way.

Gold nearly made a new all-time high this week. Of course, it got a spark from the unexpected geopolitical stress out of the Middle East, if I can wrap all of that up in a tiny little sentence like that. And then on Friday, following the employment data, the gold was up again.

And then like in an hour on Friday, the market reversed and came down 70 bucks. I think we had about $120 range on gold this week. Mike, I'm going to tell you this.

I was kind of taking a half-assed summer holiday this week. And in a way, I'm glad I was because I don't think I could have done anything but lose money. It was really wicked choppy out there. Did I mention volatility is back to 18-month highs on the S&P? It's just been – and it may be, as Gartman used to say –

It's the summertime. The adults are away on vacation and the kids are running the trading desk. Be careful. And they're in Parliament, too. Thanks for taking the time. And look, as I say, you've been on a really nice hot streak. Very, very good stuff. If people go to VictorAdair.ca, VictorAdair.ca. Don't miss it. He works every weekend. Doesn't matter. He doesn't care it's a long weekend. He's a market guy. Vic, thanks for finding time. Hey, thanks, Mike. Time now for this week's Goofy Award.

Governments have rationalized increasing censorship by saying they're trying to stop misinformation and disinformation. Well, the goofy part is they're arguably the biggest purveyors of misinformation and outright disinformation. And we're living through arguably the most egregious example in U.S. history that gives credence to every conspiracy theory about the deep state, a cabal of unelected power brokers really running the government.

I'm talking about the cover-up of the intellectual decline of President Joe Biden. It's on the shortlist for greatest deceptions by government in history. I mean, for how long is anyone's guess? But I'll tell you, a report started to surface in a convincing manner over two years ago. I mean, midterm polls in 2022 found 60 to 65 percent of the public thought Joe Biden shouldn't be the president. And yet we're told he was sharp as a tack.

Right up until the infamous debate last month, I mean, the White House, Vice President Kamala Harris, leading Democrats, members of the legacy media, continued to dismiss or denigrate, vilify anyone who suggested the president wasn't up to the job. Then came that June debate.

where even the most partisan couldn't ignore the stumbling and outright confusion of President Biden. Although they did try, you might remember, they said things like, oh, well, the president was jet lagged or too tired. Still, it's not, you know, he's still very sharp during the afternoon. Then after stating his intention to seek re-election every day up until July 21st, presto, all of a sudden he posts, or someone posted in his name on X, formerly Twitter, that he will not seek re-election.

There wasn't a news conference, didn't do a broadcast from the Oval Office. There's no resignation letter with an official letterhead with a signature. No. And he wasn't seen for days after. So who decided Joe Biden wouldn't seek re-election? Well, it clearly wasn't him. And it wasn't the result of a vote by Democratic Party members. They weren't consulted. Neither was the White House staff or federal cabinet members. They weren't consulted. So who decided? Just as importantly, who's been running the country?

Who's been involved in the most serious decisions? Keep in mind, 23 minutes after the announcement, President Biden endorsed Kamala Harris to replace him, the least popular Democratic Party candidate in the 2020 primaries. In fact, she didn't even make it to the primaries. She literally hadn't attracted a single delegate. And here she was, anointed by President Biden and within 24 hours, every major Democratic Party heavyweight.

along with the promise that she would control every cent that had been raised for President Biden's campaign re-election. And once again, Democratic Party members weren't consulted. And to think that wasn't by design, I think it's absurd. Sadly.

Right on cue, many make that most in the mainstream media in the U.S. Same people who shot down any suggestion that President Biden was in cognitive decline. Well, they tried to confer sainthood on Kamala Harris, suddenly getting amnesia on VP Harris's record, especially when it pertained to being in quotes, the border czar. And it's a good bet you're not going to hear about her record as California Attorney General in regards to the three strikes rule that put in prison so many African-Americans for what many consider misdemeanors.

I mean, the full court press by many in the mainstream, plus Google in turn. By the way, her polls found that she was the least popular VP in history. Well, they turned her into a savior. You know what? I think my prediction is on top of the phony Russiagate story, this is going to be the end of the mainstream media as we know it. But I'll do that another day.

And it's a good bet that the full-blown assault on democracy by backroom Democratic Party elites who deposed a sitting president, chose his replacement without any due process whatsoever, I don't think it's going to get the attention it deserves or the outrage.

The irony is that the Democrats are saying Trump's the one who threatens democracy. Maybe he does, but he's going to go a long way to challenge what the Democratic Party elites have just done. Now, I'm willing to bet for millions of Americans this doesn't sit well and further fuels the sort of cynicism they have regarding politics, the media, and certainly exhibiting that declining confidence.

One final thing, though. On Money Talks, the modeling we used predicted Trump's victory in 2016, then said the main feature of 2020 would be the result wouldn't be accepted by tens of millions of Americans. So what about now, 2024? Well, as I've been saying, I think the key takeaway is going to be that neither side will accept the election outcome if they lose. And what they've done recently has put us off to a very good start.

That's all the time we have this week, and I want to remind you to join us on Money Talks Tweets.

Michael Campbell's Money Talks on Facebook and Mike's Money Talks.ca. And I'll tell you why. There's not a day that goes by that I read some very important information pertinent to our financial system, pertinent to your standard of living, pertinent to our political system that I just simply don't see in the mainstream media. And I think it's important that you get it. So that's why I'm recommending you do that. And also while you're at Mike's Money Talks.ca, sign up for five minutes with Mike. It's absolutely free. Lots of great

Good tidbits in there for you. Take you less than five minutes to read it, but I hope you sign on and recommend us to your friends. So in the meantime, I hope you have a wonderful August long weekend.