Hello
With it being back to school week, I thought we should have a more comprehensive top ten as we all have to do a bit more reading.
We start with 3 panelists on BNN talking about the Bank of Canada who kept the rates the same. Jim Thorne disagreed on many fronts as he sees GDI as a leading indicator. The BNN link (below) and Jim’s commentary (attached) are included.
Steve Saretsky is like many who cannot believe that our government was a million people off with respect to non-permanent residents. This has many ramifications to regions who try to plan for housing, transportation, and health care. I agree that what we have is not only a housing crisis but soon it will be a humanitarian crisis.
When I spent time with William Chin in May, he explained that when sending their children to Canada, a large percentage of parents from China do not have education as the top priority. The number one reason is for a family member to set up a base in Canada so that assets can move here and buy real estate. Universities need these international tuitions to try to balance their books and a Globe & Mail piece explains the student growth in Ontario and the read throughs for housing.
All I know, this cannot continue with many damaging consequences.
More and more foreign media outlets are reporting about the issues in Canada and this week, the Financial Times explains our inability to get our economy going.
I was shocked to hear when our Premier said that we don’t need any more rate increases. We all know that government spending is the biggest part of the inflation story, and the Fraser Institute produced a timely piece on how our province looks versus others, especially Alberta.
There are many front-page stories on how China is in trouble economically , so an interview with Louis Gave is very helpful. Louis knows China better than most and he gives a different opinion than the Wall Street Journal and others. China stays ahead on many fronts, and they have a different attitude with respect to government employees using their phones at work. The Wall Street Journal article is attached.
There is also chatter that the US Dollar is on the way down and Brent Johnson disagrees while he was a guest on Macro Voices.
One of my long-time clients shared a couple links to remind people how oil is part of so many items we use every day. I remember a leading CEO presented about this to the MBA business students at Haskayne and many of them did not have a clue. He said, “if these students don’t have a clue we are in big trouble.”
David and Amy
PS….for a bonus piece I was told years ago by my geopolitical expert friend that in the energy sector, “All roads lead to Saudi Arabia” The new piece by Doomberg emphasizes that with recent events. That special report is attached.
Number 2 - Jim Thorne
Talking Points Memo: GDI the signal the BoC and Bay St. missed. GDI has been negative since 3Q 2022…GDI is a coincident indicator GDP is a lagging indicator.
- This is foundational in the weed’s economic theory. GDI leads GDP, and GDI is negative in Canada. Now do you see why I’ve been the Lone Wolf up here in the Great White North to say hard landing and sell Canada.
- Its basic economics the Bay ST and the BoC have missed.
- GDI has been negative in Canada since 3Q 2022.
- GDI leads GDP at turning points.
- GDI is a coincident indicator.
- GDP and Labour are lagging indicators.
- In 2008 GDI started to decline before GDP.
- GDI is measure of total income of all sectors in economy.
- GDP measures total output.
- Reason why I’ve been saying hard landing in Canada is GDI has been negative.
- When will BoC wake up.
As for our competition, watch them change their power point presentations.
Number 3 – Forecasting - Steve Saretsky
It turns out, according to one of Canada’s most esteemed economists, we have been grossly undercounting non permanent residents. CIBC’s chief econmist, Benjamin Tal, notes the government estimate of the number of non-permanent residents in the country in 2021 was around one million. But his analysis found there were closer to two million non-permanent residents. A ONE MILLION person rounding error.
Number 5 - Why isn’t Canada an economic giant? - FT
Canada’s attractiveness as a place to live and its openness to immigration means there is scope to turn its demographic problems around. Last year, it achieved its highest annual population growth rate in more than 60 years, in part due to government efforts to recruit migrants. The climate transition is already raising demand for its vast copper and nickel resources as well. The melting of the Arctic ice shelf will open new trading opportunities for northern Canada.
Rising up the GDP tables is not the be-all and end-all for any nation. And clearly the Canadian lifestyle is coveted around the world — and not just in developing nations. Yet, as long as current trends in productivity continue, living standards will drop and Canada’s enormous economic potential will remain latent. That would be a great shame for the thousands moving there seeking a better life, and for the global economy.
Number 6 - Fraser Institute
Nationally, the number of government-sector jobs increased 11.8%, while the number of private sector jobs increased only 3.3%. Of the four largest provinces, BC had the fastest rate of government sector job growth at 22.6% and the slowest rate of private sector job growth at 0.3%.
Number 7 - Louis Gave with Mauldin’s Ed D’Agostino
Ed D’Agostino did one of his best podcast interviews with Louis this week, partly on why most media (like the WSJ) get China wrong. You can read the transcript, watch the video, or listen to the audio podcast. It is a wide-ranging and eye-opening interview I highly recommend.
What the WSJ Gets Wrong About China with Louis Gave
Mauldin Economics COO Ed D’Agostino talks to Louis Gave, CEO of Gavekal Research, about China’s so-called economic crisis, the Fed’s unspoken third mandate, and “the real story of the summer.” You’ll also hear about Louis Gave’s top investment themes, the future of reshoring, and what the United States’ $30+ trillion debt train means for the US dollar.
https://www.youtube.com/watch?si=dmjWpO9OPG63WslG&v=RX9Nc8KX27Q&feature=youtu.be
Number 9 - Macro Voices - Brent Johnson - The Dollar is not Done
https://www.macrovoices.com/1233-macrovoices-391-brent-johnson-the-dollar-is-not-done
Erik Townsend and Patrick Ceresna welcome Brent Johnson to MacroVoices. Erik and Brent discuss:
- Geopolitics and its impacts on the US dollar
- BRICS currency initiative
- Possible sanctions US may invoke
- Threats to US dollar’s hegemony and the Eurodollar market
- Where is US dollar headed from here?
- Outlook on European markets
- Russia/Ukraine conflict & energy markets
- Breakdown/weakening of the Yen
- Fiat currency, gold & soft commodities
Download the podcast transcript: [Click Here]
Number 10 - List of 365 Products Made from Oil / Petroleum | Bad Ass Work Gear
https://badassworkgear.com/list-of-products-made-from-oil-petroleum/
From a long-time client:
“I suspect most people thinking about banning oil and petroleum products don’t think about what is made from these resources that we are dependent on and that we use every day in our lives. Attached is an interesting site that shows some of the products.. .
Try to make all these products without drilling for oil. Our batteries for electric cars, as well as solar panels, wind generators all depend on having some of these products.
I’m not sure how we people to think about the impacts of some of our federal policies trying to drive the oil and gas industry into oblivion. The mainstream news and media don’t seem to focus on this at all. Another more condensed view..
We hope you found the Top Ten interesting this week, and are looking forward to another selection of articles, stories, and commentary next week. If you know of anyone else who would be interested in receiving our weekly note, please let me know.
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