Divergence

RYAN By Guest Blogger Ryan Lewenza

I’m a big music fan with one of my favourite bands being the UK punk band, The Clash. I was thinking of them and their great track, Should I Stay or Should I Go, when I was coming up with today’s blog topic on whether the Bank of Canada will follow the Fed and cut interest rates in the coming months (currently the market is pricing in a 100% chance of a Fed cut at its July meeting), or diverge from the Fed and hold rates steady. This week I’m talking monetary policy, so strap in, it’s about to get crazy in here!

With the slowing US/global economy and Trump’s ongoing trade war with China, central banks are reversing course faster than the Raptors’ 2020 season outlook following our disappointing loss of Kawhi Leonard to the Clippers.

In just 6 months the market went from pricing in three Fed hikes for 2019 to now pricing in three cuts for this year. I covered this in a recent blog post, and BNN interview, where I stated that the market is over-reacting to the slowdown in the economy and therefore the Fed is, at most, only going to cut once this year. Based on this outlook what does this portend for the BoC?

As seen below, the BoC and Fed historically have moved in lockstep (there’s a 90% correlation between the two) so the easy prediction is that whatever the Fed does with interest rates the BoC will just follow. I’m not 100% sure about this, at least initially.

BoC and Fed Move Lockstep Together

Source: Bloomberg, Turner Investments

Let’s first review some of the more recent Fed tightening cycles.

Over the last 25 years there have been four rate tightening cycles – 1995, 1998, 2001 and 2007. As seen in table below the 1995 and 1998 tightening cycles were quite different than the 2001 and 2007 periods.

For the 1995 and 1998 cycles the US economy was slowing so the Fed took out an insurance policy by cutting twice in 1995 and three times in 1998. This helped to provide the necessary stimulus to turn the US economy and stock market around. In both cases the S&P 500 rallied nicely following the rate cuts.

For the 2001 and 2007 cycles the US economy was on the precipice of devastating economic recessions and bear markets so the Fed had to cut much more aggressively with 550 bps of cuts in 2001 and 500 bps of cuts in 2007. We know what happened to the S&P 500 following these periods.

So investors are wondering, which period most resembles our current situation. I believe it’s the former (1995 and 1998 cycles), which is why I see few rate cuts this time (one this year and maybe more in 2020 depending on the US economy), and this is critical to what the BoC does in my opinion.

Past Fed and BoC Rate Tightening Cycles

Source: Bloomberg, Turner Investments

Because I believe the US economy is in better shape than the market currently is pricing in I believe we’re likely to see just one rate cut from the Fed this year versus the three that the market is currently pricing. Given this I believe the BoC will be more patient and very likely remain on hold for this year. Additional supports for this thesis include:

First, the Fed has already been jawboning about the outlook for rates when last week Fed Chairman Powell said “Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened”. In contrast, the BoC said in its July rate announcement that “the degree of accommodation being provided by the current policy interest rate remains appropriate”. To me this clearly signals the BoC is on hold for now.

Second, inflation is running hotter in Canada at 2.4% Y/Y versus the US at 1.8%. If this continues this may force the hand of the BoC to be less dovish, keeping rates unchanged.

Inflation is Picking Up in Canada

Source: Bloomberg, Turner Investments

What are the implications of all this?

I believe this could be bullish for the Canadian stock market and our dollar.

If the Fed does cut rates I believe this will be bearish for the US dollar. With commodities being priced in US dollars, generally a weaker US dollar translates into higher commodity prices. Gold is a good example of this, and it has started to perk up in part due to the recent weakness in the US dollar. With our economy and stock market being heavily represented by the resource sectors this could bode well for the TSX relative to other markets in the coming months.

Lastly, if the BoC were to remain on hold while the Fed cut rates this year I believe this would be bullish for our Canadian dollar. The CAD versus the USD has rallied from a low of 73 cents to start the year to 76.5 cents currently. If I’m right on the Fed cutting and the BoC keeping rates unchanged this year then we could see the CAD rally up to 78-80 cents.

So start planning some trips down south if this call pans out!

Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

 

57 comments ↓

#1 TRUMP on 07.20.19 at 3:24 pm

We got a PIG and his piglets running the sh*t show in Washington and your suggesting we go down south!!!

They care nothing more than getting the rich richer and don’t give a damn about the struggling poor, the environment, or about spreading their prosperity to the rest of the world …. which they gained by taking advantage of the rest of the world.

And just remember… hand guns are legal in the USA.

Good luck on that trip down south.

#2 Brian Ripley on 07.20.19 at 4:00 pm

If the Fed does cut rates I believe this will be bearish for the US dollar. Ryan Lewenza

On my chart of SF Detached house prices in USD and CAD, Canadian housing is currently cheaper by 25% if purchased in USD vs CAD (June data)
http://www.chpc.biz/canadian-housing-in-usd.html

That trend appears to be growing since 2017 when housing prices started to peak in Canada.

Notice the price of oil is a factor on the chart influencing the USD/CAD.

My chart of the Bank of Canada Commodities index in CAD
http://www.chpc.biz/tsx-indexes.html
is also in a downtrend since the July 2008 crude oil price peak. 10.3 years of NIRP and ZIRP have not yet significantly unleashed inflation.

The U.S. dollar is still the global reserve currency and after a 40-50 year historic credit boom, everyone is all in on the debt side of their balance sheet. As repayment terms come due across the globe, demand for USD grows.

Speaking of divergence:
http://www.chpc.biz/household-debt.html

The global credit boom and the unleashing of gangster governments and dark capital flowing through criminal hands across borders fueled by central banks stomping on rates has led also to Canadians preferring to search for yields outside of Canada to such an extent that our 20 year trend of negative FDI has in the last 3 years hit a new super wide divergence.

On the same chart you can also see that Net Trade in Canada has been negative as well for the last 9/10 monthly prints and the last 18 quarterly prints.

I have no plans to visit the U.S. this year.

According to StatsCan (March data)
https://www150.statcan.gc.ca/n1/daily-quotidien/190522/dq190522c-eng.htm

Canadians made 2.8% Y/Y fewer car trips to the United States
Americans made 2.1% Y/Y more car trips to Canada

#3 Smoking Man on 07.20.19 at 4:33 pm

Dead on Ryan. Except for THE CLASH.

REALLY?

#4 Yukon Elvis on 07.20.19 at 4:35 pm

#1 TRUMP
And just remember… hand guns are legal in the USA.
Good luck on that trip down south.
……………
They are legal in Canada too you clueless numb nuts. I have several. All legal, just like my legal “assault rifles”.

#5 Don Henderson on 07.20.19 at 4:42 pm

Fake Trump, you need a trip down south to Venezuela and see the misery first hand of what a progressive, liberal( really means socialist) does to a society and it’s economy and people. I have several Cuban friends and they would not touch your so called progressive, socialist utopia, environmental ideology with a ten foot pole.

People have to too good in Canada, U.S. and the western world. This is why the more and more younger someone is they more they are brainwashed by this entitlement mentality. Go earn it, pay taxes on it, try to keep it and grow it and take responsibility instead of always taking from others at their expense.,

#6 Shawn on 07.20.19 at 5:02 pm

This is the general consensus. But things rarely play out in practice the way they present themselves in theory.

For example 1995 marked the beginning of a decline in $CAD to its all time low of 62 cents.

No one is anticipating another leg down in the price of oil currently.

USD could simply move sideways from here before beginning a new leg higher.

#7 Spectacle on 07.20.19 at 5:07 pm

” So start planning some trips down south if this call pans out! “. Ryan L . Turner blog

Awesome Posting !

And yes, with a balanced / diversified mindset, I do plan a trip down south. Greater fool followers know the source & system of the market gains of last few years, despite politics or meme of the day.

The U.S is a very big place. ( as is the World )

“Live quietly among them..” to paraphrase GTurner.

Here’s to living, as my young nephews cancer enveloped lungs breath their last breath, his cancer engulfed heart beats bravely to try to survive, the body and organs fail one by one.

Live in Peace , among them…….but Live.

Thanks Ryan & Sir Turner.

#8 Shawn on 07.20.19 at 5:20 pm

Inflation devalues a currency. Deflation or disinflation strengthens a currency. Canada’s “bad” core inflation will likely have negative effects on the $CAD.

#9 Shawn on 07.20.19 at 5:25 pm

From a fundamental perspective, the S&P500 will its technology, consumer discretionary, healthcare and financial services sectors will continue to outperform the TSX with its old world oil & gas, basic materials and heavily leveraged to real estate Canadian banks.

#10 Turtle Lake on 07.20.19 at 5:29 pm

Ryan!

Great Analysis!

Does this mean you can finally convince Garth to add a gold ETF to his 17 ETF holdings?

#11 IHCTD9 on 07.20.19 at 5:41 pm

We’ll be heading down to upstate NY for some camping later this summer. In fact, my kids are down there for a week right now! I hope to do a little shopping for some handguns while I’m down there too. Great selection!

#12 Stan Brooks on 07.20.19 at 5:51 pm

Inflation picking up?

It has been up for quite some time.

https://ca.finance.yahoo.com/news/canadian-households-spent-an-average-of-101-per-month-on-mobile-bills-crtc-170859081.html


Mobile phone bills cost the average Canadian household $101 per month in 2017, according to a spending snapshot released by the Canadian Radio-television and Telecommunications Commission (CRTC). That’s a nearly 10 per cent increase from the previous year.

————————————–

An immigrant ‘success’ story:

https://ca.yahoo.com/news/homeless-immigrant-builds-magnificent-winnipeg-110000696.html

Living in a ‘magnificent’ shack under a bridge in Winnipeg, the bright future of the young here, courtesy of the incompetent clueless currency destroyers at teh central bank.

It does not matter what they short term interest policy is, the long term policy is down.

Of course retirees and savers will be destroyed.

Accepting the confused verbal diarrhea of the banking boss as a ‘policy guidance’ is a very bold proposition as it suggests actual intelligence.
Remember, this is the guy who said economy is great and that there is no inflation despite the 5 % + yearly cash in circulation and 7.22 % + yearly M2 increase:

https://ycharts.com/indicators/canada_m2_money_supply

#13 Linda Galiipeau on 07.20.19 at 6:10 pm

I am concerned about Liberal Trudeaunomics. I see that more deficits and national debt getting out of hand and if he wins, Liberals get back in power then the debt will balloon even more. I see at least a $900 billion debt by 2023-2024 and even possibly $1 trillion, yes trillion with a T for Canada’s national debt by 2025 or even earlier.

Former Liberal Canadian finance minister Paul Martin and Jean Chretien former Liberal Canadian Prime Minister is missing in action when when it comes to Canada’s national debt and public finances these days advising Justin Trudeau and Morneau. By the way, the big hype of them slaying the deficit and taming the national debt is overblown during the 1990’s. The only reason they could achieve a somewhat cut the the national debt and eliminate deficits back then because interest rates on Canada’s debt, bonds were in the 8% to 9% range and after a few years they were in the 5% to 6% range. Most of the tens of billions in savings were from dramatic falling interest rates and not their economic and fiscal genius.

#14 TRUMP on 07.20.19 at 6:59 pm

To #4 Yukon Elvis

Then put a loaded gun on your waist and go for a walk through Toronto’s roughest hood.

Let’s see how you make out.

#15 Yukon Elvis on 07.20.19 at 7:16 pm

#14 TRUMP on 07.20.19 at 6:59 pm
To #4 Yukon Elvis

Then put a loaded gun on your waist and go for a walk through Toronto’s roughest hood.

Let’s see how you make out.
………………………..

You could come with me. Bring your rape whistle. We can put the stink on ‘em.

#16 Nonplused on 07.20.19 at 8:04 pm

Take a bit more than a $0.78 loonie to get me to travel state side. For pleasure anyway.

It used to be commonly held that things were cheaper in the US, but I have spent a lot of time in the US in the last 5 years and have not found that to be true, with the exception of gasoline, booze, smokes, milk, and maybe cars. If you go to a restaurant or hotel or rent a limo (not an actual limo, the black SUV’s) the prices are the same only they are in US dollars. Same with ski hills, movies, rents, sporting equipment, clothing, etc. And the amount of taxes they put on things like hotels or sales taxes is just as oppressive as it is here. Plus everywhere you need to drive has 2 toll gates. You can try and take the train instead but that’ll cost you $18 US to get from Newark to Princeton (68 km) which is less than double the distance from Tuscany to Somerset (37 km) which you can do for $3.40 Canadian. There are not as many stops on the way from Newark to Princeton but other than that the trains don’t run any faster.

The US is not cheap. Just compare the trains. Calgary: $3.40 CAD to go 37 km. US Northeast: $18 USD to go 68 km. They do take visa though. You’re gonna need it.

#17 Randy on 07.20.19 at 8:26 pm

If we can get the Cdn $ to par I’ll buy a new Corvette C8

#18 Conspiratard on 07.20.19 at 8:33 pm

Fifty years ago today, a remote outdoor television studio in Area 51 was unusually active, bustling with Illuminati workers, invisible to the rest of the world.

On tv screens in living rooms everywhere, the suckers all bought it. And then came Building 7, 32 years and 54 days later.

Coincidence? I think not.

I think not.

#19 Sydneysider on 07.20.19 at 8:39 pm

One tweet from Trump could change everything. Not a good time for futurologists.

#20 Al on 07.20.19 at 9:25 pm

All this prediction of where rates are going is an exercise in futility. I guess it keeps the industry employed and eyeballs on bnn .

#21 Pfft on 07.20.19 at 9:52 pm

@#20 Al on 07.20.19 at 9:25 pm
All this prediction of where rates are going is an exercise in futility. I guess it keeps the industry employed and eyeballs on bnn .

__________________________

bingo

#22 Pfft on 07.20.19 at 9:54 pm

#14 TRUMP on 07.20.19 at 6:59 pm
To #4 Yukon Elvis

Then put a loaded gun on your waist and go for a walk through Toronto’s roughest hood.

Let’s see how you make out.
_____________________

regina has rougher hoods than toronto

#23 georgist on 07.20.19 at 9:57 pm

Ryan check this out, present UK band but bit of a throwback: https://www.youtube.com/watch?v=7Mz_K1b5rVk

#24 LMAO on 07.20.19 at 9:59 pm

@#4 Yukon Elvis on 07.20.19 at 4:35 pm
#1 TRUMP
And just remember… hand guns are legal in the USA.
Good luck on that trip down south.
……………
They are legal in Canada too you clueless numb nuts. I have several. All legal, just like my legal “assault rifles”.
____________________________

bwahaha, you’re the last person that should have an assault rifle. I feel for your fam and nieghbours. look forward to reading about you in the news.

#25 NDP Party on 07.20.19 at 10:01 pm

The Supreme Court refused to hear their case, and it appears the dancing man may have bankrupt the party.

#26 Yukon Elvis on 07.20.19 at 10:24 pm

#24 LMAO on 07.20.19 at 9:59 pm
@#4 Yukon Elvis on 07.20.19 at 4:35 pm
#1 TRUMP
And just remember… hand guns are legal in the USA.
Good luck on that trip down south.
……………
They are legal in Canada too you clueless numb nuts. I have several. All legal, just like my legal “assault rifles”.
____________________________

bwahaha, you’re the last person that should have an assault rifle. I feel for your fam and nieghbours. look forward to reading about you in the news.
………………..
They are all better armed than I am. When you approach our perimeter make sure u use the password “A La Snackbar”. Say it loud and wave your arms so we don’t shoot the wrong person by mistake.

#27 Oh Canada, I weep. on 07.20.19 at 11:41 pm

Hot money might like the dollar and that drains our economy. Resources are tricky. Canadas resource under the mine killing Trudeau government are locked up by American hate money.

Foreign investment has and will continue to flood out of Canada. Our biggest resource companies are investing elsewhere. A Trudeau government has invested in international bribery, not Canadian jobs.

IMHO, the only TSX companies that will see any gains are those with primary income from being in the USA.

Lastly, Canada needs someone to sell the few resources we’re able to mine in increasingly smaller amounts. There’s no hiring in mining, quite the opposite.

Although the past is easy to read in historic charts, we’ve never faced a demon like Trudeau intent on subjugating Canada to the virtue signals of a globalist ideology designed to crush instead if nurture. No other country has capitulated to these evil forces, but Canadians are weak and easily tripped up in the PC word game.

#28 Steerage steward on 07.21.19 at 12:58 am

Never trust a man with your money that wearing a suit that costs more then $1000.

#29 Ponzius Pilatus on 07.21.19 at 1:09 am

#11 IHCTD9 on 07.20.19 at 5:41 pm
We’ll be heading down to upstate NY for some camping later this summer. In fact, my kids are down there for a week right now! I hope to do a little shopping for some handguns while I’m down there too. Great selection!
————
Get some Glocks.
Austrian made. The best.
Most cops in the states carry them.
Also, endorsed by most Rappers.

#30 Ryan Lewenza on 07.21.19 at 2:38 am

Turtle Lake “Ryan! Great Analysis! Does this mean you can finally convince Garth to add a gold ETF to his 17 ETF holdings?”

Exposure to actual gold may be a hard sale but we do have exposure to some gold miners through our TSX ETF holdings. – Ryan L

#31 Smoking Man on 07.21.19 at 3:42 am

Ryan , you have issues.

https://youtu.be/bJ9r8LMU9bQ

#32 Smoking Man on 07.21.19 at 4:15 am

To my late mother. Mom for you. Love and miss you.

Clash sucks.

https://youtu.be/bJ9r8LMU9bQ

#33 Phylis on 07.21.19 at 7:09 am

Butts is back, let the advisement continue….

#34 Spectacle on 07.21.19 at 8:02 am

Now that was funny. Took me a minute to get it. But then again, been up most of the night little sleep.

Ps : interesting story about the Glock9. I understand that in his 70’s, Mr. flock decided to bet his life savings and investments, sell the house , and designed the Glock9. A single asset creation he believed in, in a way like Kalashnikov with the Ak47.
3D printing has potential to change much in this regard.

A little Peace my friends

————————-000——————-
#26 Yukon Elvis on 07.20.19 at 10:24 pm
#24 LMAO on 07.20.19 at 9:59 pm
@#4 Yukon Elvis on 07.20.19 at 4:35 pm
#1 TRUMP
And just remember… hand guns are legal in the USA.
Good luck on that trip down south.
……………
They are legal in Canada too you clueless numb nuts. I have several. All legal, just like my legal “assault rifles”.
____________________________

bwahaha, you’re the last person that should have an assault rifle. I feel for your fam and nieghbours. look forward to reading about you in the news.
………………..
They are all better armed than I am. When you approach our perimeter make sure u use the password “A La Snackbar”. Say it loud and wave your arms so we don’t shoot the wrong person by mistake.

#35 crowdedelevatorfartz on 07.21.19 at 9:44 am

@#29 Prattling Prognosticator

Get a Glock.

++++++
Never thought pistols were a great move for police.
Pistols are great for police until you have a misfire or it jams.
Then you have to manually clear it.
Not a great scenario when in a life threatening situation. (Which is when most police are trained to pull their firearm).

When Revolvers have a misfire you just keep pulling the trigger until the next round is ready.

Most North American police agencies used revolvers until the early 1980’s when the US military bought 10’s of thousands of Beretta pistols to replace Colt .45’s.
(Colts were a physically bigger pistol designed in the early 1900’s when most men worked manual labour and had larger hands. With the introduction of women in combat and fewer men working manually the size of the handguns became an issue. Berretta’s smaller caliber 9mm, and smaller size became the weapon of choice when it passed the US military testing trials. Colt pistols jammed after 5000 continuous shots. Berretta didnt jam after 20,000 continuous shots…)
Once the US army embraced Berretta and vets returned to civilian jobs(like police enforcement) the demand for pistols was cast.
Glock?
An ugly, utilitarian , easy to clean, light, plastic and aluminum firearm that has its uses. The .45 kicks like a mule.
Personally, not my fave.
Give me a heavy, steel colt .45 any day of the week for target practice. Hell even Superman ducks when an empty one is thrown at him.
As for a smooth, light, well designed, pistol.
Beretta…. all the way.

#36 crossbordershopper on 07.21.19 at 10:00 am

#16 kinda correct, yes the big difference is booze, smokes, gas for the consumer.
clothing, is like everywhere shop around, there are lots more vendors and more opportunity to save.
your missing the big things instead of talking $1.50 that i pay regularly in florida, with sunpass its like $.95 or somthing. its automatic and quick.
a lot cheaper than 407, why are you so worried about the north east toll costs, unless you live there and need to be on it regularly. my friend who lives in milton saids he pays 200 a month on the 407 with a transponder. and you are talking about change is a problem.
the issue is bigger than a toll costs, its about opportunity. not so much the price of gas, and since i dont smoke or drink those savings are irrelevent.
first is access to capital to expand and buy a business. with that money you make money and pay less tax, lot less tax, and then you buy not just one house, but two or three.
you can make much more money, in us dollars, keep more of it, live in a better quality home or two and live in better weather and retire with much more money. then waste your time with smaller amounts clipping dividends in canada where every day i overhear the guys at the clubhouse checking and talking stocks, at tim hortons i just hear old people in canada bitch about weather, their health, governement as i order my double double. 80 percent same, but those 20 percent difference are so huge they will change your life. my brother looking at a new house build in waterloo, 1.2 million for crap, you believe that, someone in canada construction industry is making tonnes.

#37 BillyBob on 07.21.19 at 10:20 am

#13 Linda Galiipeau on 07.20.19 at 6:10 pm
I am concerned about Liberal Trudeaunomics. I see that more deficits and national debt getting out of hand and if he wins, Liberals get back in power then the debt will balloon even more. I see at least a $900 billion debt by 2023-2024 and even possibly $1 trillion, yes trillion with a T for Canada’s national debt by 2025 or even earlier.

Former Liberal Canadian finance minister Paul Martin and Jean Chretien former Liberal Canadian Prime Minister is missing in action when when it comes to Canada’s national debt and public finances these days advising Justin Trudeau and Morneau. By the way, the big hype of them slaying the deficit and taming the national debt is overblown during the 1990’s. The only reason they could achieve a somewhat cut the the national debt and eliminate deficits back then because interest rates on Canada’s debt, bonds were in the 8% to 9% range and after a few years they were in the 5% to 6% range. Most of the tens of billions in savings were from dramatic falling interest rates and not their economic and fiscal genius.

==================================

Not to mention offloading massive costs onto the provinces which are their own ticking debt bomb.

Accounting sleight of hand is not genius, in most places its considered fraud. But Liberal fans applaud like trained seals anyway.

#38 LMAO on 07.21.19 at 10:22 am

@#26 Yukon Elvis on 07.20.19 at 10:24 pm
#24 LMAO on 07.20.19 at 9:59 pm
@#4 Yukon Elvis on 07.20.19 at 4:35 pm
#1 TRUMP
And just remember… hand guns are legal in the USA.
Good luck on that trip down south.
……………
They are legal in Canada too you clueless numb nuts. I have several. All legal, just like my legal “assault rifles”.
____________________________

bwahaha, you’re the last person that should have an assault rifle. I feel for your fam and nieghbours. look forward to reading about you in the news.
………………..
They are all better armed than I am. When you approach our perimeter make sure u use the password “A La Snackbar”. Say it loud and wave your arms so we don’t shoot the wrong person by mistake.
_______________________________

must be tough living your life in constant fear.

#39 Axehead on 07.21.19 at 10:30 am

What’s wrong with The Clash? – good for analogy. What IF we ever get a pipeline, and investor confidence, and a real economy producing ‘something’? Our dollar might ride a wave larger than what Ryan is predicting here. Maybe.

#40 NoName on 07.21.19 at 10:59 am

#29 Ponzius Pilatus on 07.21.19 at 1:09 am
#11 IHCTD9 on 07.20.19 at 5:41 pm
We’ll be heading down to upstate NY for some camping later this summer. In fact, my kids are down there for a week right now! I hope to do a little shopping for some handguns while I’m down there too. Great selection!
————
Get some Glocks.
Austrian made. The best.
Most cops in the states carry them.
Also, endorsed by most Rappers.

—-

Don’t get those! Get some made in checoslovakia, even those models that are made out of plastic have better ergonomic and grip angle and much more.

#41 NoName on 07.21.19 at 11:43 am

c’mon Mr.T

ponzy posts Glock, fartz post Colt and Beretta, i just posted honest opinion and pointed one advantage that Czechoslovakian made polymer gun have over most popular brand, and i dident even named a manufacturer. (may have use word plastic, what is misleading, but in my contekst demining).

#42 Tony on 07.21.19 at 11:55 am

Using the 1980’s definition of inflation in America inflation is currently running at ten percent a year. But of course Powell will tell you inflation is low. Truthfully is anything Powell says not a speech written by Donald Trump himself? Food inflation and residential rents will run rampant in America as the Fed Funds rate is cut to zero or goes into the negative by the end of 2021. A counter-trend will of course develop from May 2020 to September 2020 where everyone holding gold and silver goes broke as gold retraces back to the $1,200 level in a hurry. The time to buy gold and silver will be near the end of September 2020. The time to buy long term bonds will also be at the end of September 2020. The time to short gold and silver will be late in April 2020 then take huge profits in September 2020.

#43 Tony on 07.21.19 at 12:00 pm

The Bank of Canada will be a heavy seller of Canadian dollars and a heavy buyer of U.S. dollar when the Canadian dollar hits the 80 cent U.S. mark. From what I’ve watched on BNN Poloz does not want to cut the Bank of Canada rate. We could see a 75 basis point cut in the Fed funds rate before the Bank of Canada cuts the Bank of Canada rate.

#44 Ponzius Pilatus on 07.21.19 at 12:02 pm

#35 crowdedelevatorfartz on 07.21.19 at 9:44 am
@#29 Prattling Prognosticator

Get a Glock.

++++++
Never thought pistols were a great move for police.
Pistols are great for police until you have a misfire or it jams.
Then you have to manually clear it.
Not a great scenario when in a life threatening situation. (Which is when most police are trained to pull their firearm).

When Revolvers have a misfire you just keep pulling the trigger until the next round is ready.

Most North American police agencies used revolvers until the early 1980’s when the US military bought 10’s of thousands of Beretta pistols to replace Colt .45’s.
(Colts were a physically bigger pistol designed in the early 1900’s when most men worked manual labour and had larger hands. With the introduction of women in combat and fewer men working manually the size of the handguns became an issue. Berretta’s smaller caliber 9mm, and smaller size became the weapon of choice when it passed the US military testing trials. Colt pistols jammed after 5000 continuous shots. Berretta didnt jam after 20,000 continuous shots…)
Once the US army embraced Berretta and vets returned to civilian jobs(like police enforcement) the demand for pistols was cast.
Glock?
An ugly, utilitarian , easy to clean, light, plastic and aluminum firearm that has its uses. The .45 kicks like a mule.
Personally, not my fave.
Give me a heavy, steel colt .45 any day of the week for target practice. Hell even Superman ducks when an empty one is thrown at him.
As for a smooth, light, well designed, pistol.
Beretta…. all the way.
————–
Not a gun enthusiast or expert.
But I was watching the “weapon of choice” on Netflix.
Turns out reliability is the main attraction of the Glock.

#45 Tony on 07.21.19 at 12:11 pm

Re: #30 Ryan Lewenza on 07.21.19 at 2:38 am

For all the people that seemed to have forgotten… the U.S. election is November 2020. That means the odds are near 100 percent certain all the lies will come down the pipe starting around the start of May 2020 to the end of September 2020. You know the 3 percent GDP growth in the second quarter of 2020 followed by the 4 percent GDP growth in the third quarter of 2020. I’ll be playing the straight futures no future options for me. Gold and silver both will get pulverized as gold retraces all the way back down to $1,200 U.S. even. I have total 100 percent faith in Trump and growth magically returning to America before the 2020 election.

#46 Stan Brooks on 07.21.19 at 12:23 pm

Visiting relatives from GTA.

They just postponed retirement plans to 65 (from 60), still a decade and a half to go, can’t help elderly parents so pretend they don’t exist.
Complaining about high prices, bargain hunting for food all weekend.

Kid foot solder in major international corp, at least they pay for the meals when abroad, student debt with hope (but no plans) to pay in the next decade. Sharing condo with roommates, living like a student.

Retirement plan linked mostly to hope of winning from the lotto. Big words on retiring abroad but all the money goes to the mortgage.

No investments, except the house. Complaining about high property taxes so plan to downsize in a decade to a condo (!) ignoring high condo prices, property taxes and maintenance fees.

And all that communicated in confident, calm, brainwashed, delusional manner.

Homo ignorantus at it’s best. One giant mental institution with the personnel on strike and patients running amok.

Doing double shot at the moment with hope of returning to even partial sanity.

#47 Vampire studies (doctoral thesis) on 07.21.19 at 12:26 pm

This is not a gun blog. Or is it??

#48 IHCTD9 on 07.21.19 at 12:30 pm

#29 Ponzius Pilatus on 07.21.19 at 1:09 am
#11 IHCTD9 on 07.20.19 at 5:41 pm
We’ll be heading down to upstate NY for some camping later this summer. In fact, my kids are down there for a week right now! I hope to do a little shopping for some handguns while I’m down there too. Great selection!
————
Get some Glocks.
Austrian made. The best.
Most cops in the states carry them.
Also, endorsed by most Rappers
————

If I ever decide to get my restricted permit, a Glock would 100% be on the list, probably more than one. World renowned, and top quality!

#49 Stan Brooks on 07.21.19 at 12:34 pm

#37 BillyBob on 07.21.19 at 10:20 am
#13 Linda Galiipeau on 07.20.19 at 6:10 pm

That federal debt is a bogus meaningless number. Just another public lie/deception.

Total public debt is 90 % of GDP,

https://en.wikipedia.org/wiki/Canadian_public_debt

general government gross debt is high compared to its triple A-rated peers (in average 40%).

Canada’s general government gross debt is 89.7 percent of GDP

#50 crowdedelevatorfartz on 07.21.19 at 12:38 pm

Is Bandit melting in the humidex Garth?
I hear it may hit 38 today in Hfx…

All good. He’s on the tug. – Garth

#51 Frank Danjou on 07.21.19 at 12:45 pm

If the national. Canada debt is bogus number then the $20 to $30 billion annual deficits are also bogus. Stop using their GDP metric as a real measure of debt.

Just like a consumer buying a house for say $800,000 mortgage makes $200,000 a year it looks great on paper but once a job loss, illness or other rough patch happens, the $800,000 mortgage is still there and actually keeps growing with interest. You have to look at the total debt load and not just the economic growth to carry that huge debt load.

#52 Yukon Elvis on 07.21.19 at 1:03 pm

Glock17= always goes bang, 17+1 rounds 9mm, no external safeties just pull the trigger, polymer frame,light and easy to carry, not expensive to buy.
Colt 45acp =usually goes bang, 7+1 rounds 45acp, 2 external safeties to fumble with, heavy and bulky to carry, heavy recoil for most people.
Beretta M9 = usually goes bang, 15+1 rounds 9mm, one external safety, metal frame, heavier than Glock17.

End this discussion. – Garth

#53 IHCTD9 on 07.21.19 at 2:13 pm

Turns out reliability is the main attraction of the Glock.
——

Glocks are the Yamaha Grizzly 700 SE of guns. Not the fastest, not the flashiest, but always starts when you need it, and never have to worry about walking home.

#54 Sail Away on 07.21.19 at 2:28 pm

Wow, this blog has become THE source for financial, real estate and handgun advice! So diverse.

#55 Sold Out on 07.21.19 at 2:33 pm

And the true nature of the loons that Garth has allowed to populate the steerage section is now clear; a bunch of frightened little boys, brainwashed by the right wingnut US media. Sufferers can never see their own personality disorders, mores the pity.

#56 Jesse on 07.22.19 at 1:16 pm

Long term bonds heading lower should ring alarm bells. Fed rates are heading towards zero, what happens at ZIRP or NIRP? Are we a few years behind Europe and Japan? Looking at demographics, what are savers supposed to do? Long bonds at 0%? Is anyone else concerned about this?

#57 Jesse on 07.22.19 at 1:20 pm

#45 Tony on 07.21.19 at 12:11 pm
Re: #30 Ryan Lewenza on 07.21.19 at 2:38 am

For all the people that seemed to have forgotten… the U.S. election is November 2020. That means the odds are near 100 percent certain all the lies will come down the pipe starting around the start of May 2020 to the end of September 2020. You know the 3 percent GDP growth in the second quarter of 2020 followed by the 4 percent GDP growth in the third quarter of 2020. I’ll be playing the straight futures no future options for me. Gold and silver both will get pulverized as gold retraces all the way back down to $1,200 U.S. even. I have total 100 percent faith in Trump and growth magically returning to America before the 2020 election.

**************************************

Trump winning the election is already priced in. The Democrats have turned full communist, makes me wonder if they’re secretly working for Trump.