Hilliard's Weekend Notebook - Tiff Macklem, Governor of the Bank of Canada, outlined the likely economic impact of new U.S. tariffs on Canadian exports announced by President Trump. These 25 percent tariffs on most Canadian goods are expected on March 4. Canadian energy and electricity would incur tariffs of 10 percent. How much economic degradation is coming? Is Trump […]

Hilliard's Weekend Notebook - Population collapse will be a very important issue in many parts of the world in the near future. Outside of sub-Saharan Africa, the number of births is not sufficient to maintain the world’s population at 8 billion people. The impact on the economy will be enormous and hard to imagine for those who grew up […]

Hilliard's Weekend Notebook - Higher inflation returned this week. The numbers for January CPI inflation came in hotter than expected. A significant upturn in Core CPI on a monthly and annual basis raised eyebrows, although the markets were not rattled for long. Is this the end of rate cuts? Will rate hikes be next? The U.S. CPI released on […]

Hilliard's Weekend Notebook - Elon Musk is wrong about how government deficits work. He is firmly in the camp that says that government budgets must be balanced because otherwise a government will go bankrupt. He compares the government deficit problem to a household spending crisis. Does Musk understand what he is getting into? Elon on X, formerly Twitter, has […]

Hilliard's Weekend Notebook - President Trump was inaugurated for the second time on last week. He is taking over the Presidency at an unusual time for the economy and financial markets. Trump has only a small chance of living up to the hype and expectations over his promise to Make American Great Again. Trump takes over when the U.S. […]

Hilliard's Weekend Notebook - As soon as February 1, the U.S. might impose a 25 percent tariff on all imports from Canada. Crude oil is one of the biggest Canadian exports to the U.S. One possibility for retaliation, termed the “nuclear option”, is to cut off all crude oil exports to the U.S. Currently Canada supplies about 2/3 of […]

Hilliard's Weekend Notebook - The Department of Government Efficiency, known as DOGE, is headed by Elon Musk and Vivek Ramaswamy. Elon Musk is well known as the world’s wealthiest entrepreneur, while Ramaswamy was a candidate for the Republican nomination in 2023. The goal of DOGE is to “cut the federal government down to size”. This could have a positive […]

Hilliard's Weekend Notebook - Hints of an imminent credit crunch in the U.S. and Canada are piling up. Too much debt in commercial real estate, residential real estate, credit card balances, personal loans, mortgages, builders’ construction loans and even governments could trigger a crisis of failure to repay debts. This chart shows U.S. private sector debt since 1834 and […]

Hilliard's Weekend Notebook - Among the several U.S. recession indicators warning of trouble to come, this might be the best one to watch. Yield curve inversion sounds a bit wonky, but it is straightforward. The yield curve on government bonds is derived from the different interest rates on the short, medium and long-term maturities plotted on a graph. The […]

Hilliard's Weekend Notebook - The U.S. Federal Reserve surprised markets this week with a small rate cut (expected), a forecast for fewer rate cuts next year and higher inflation (very unexpected). This was a more hawkish report than the market expected. The stock market reacted very negatively on Wednesday, with the S&P 500 losing 3 percent in just two […]

Hilliard's Weekend Notebook - Javier Milei is making huge changes in Argentina and U.S. leaders like Donald Trump and Elon Musk are planning to follow his radical moves. Will Argentina survive Milei? Will the U.S. copy his program?   Source: The Economist While Americans were electing Trump the far right and its billionaire backers were making plans to cut […]

Hilliard's Weekend Notebook - The U.S. stock market is extremely expensive, by all measures. Technology companies like Nvidia lead the way, but even the average stock is overvalued in relation to past cycles. When will there be a correction in the U.S. stock market? As we approach 2025 the markets continue to surge higher, perhaps not surprising as Wall […]

Hilliard's Weekend Notebook - President-elect Trump doubled down on his threat to impose tariffs on imports to the U.S.  This time he focused on two countries — Mexico and Canada — with a statement that he would put a 25 percent tariff on imports. How should Canada counter these threats? This week Trump posted: “On January 20th, as one […]

Hilliard's Weekend Notebook - President-elect Donald Trump believes in tariffs, and he plans to implement higher tariffs as soon as he takes office. Most economists think that is a really bad idea. Will Trump’s tariffs help or hurt the economy? Donald Trump has been a promoter of tariffs for a long time. He is on record in 1989 telling […]

Hilliard's Weekend Notebook - Elon Musk has been appointed by the incoming President of the U.S.  to head the Department of Government Efficiency, or DOGE, with a mandate to cut costs, reduce regulations, shrink the size of the bureaucracy and make government more efficient. In the announcement Trump called him the “Great Elon Musk”. Will the Great Elon Musk […]

Hilliard's Weekend Notebook - One of the hottest new technologies for production of heat and electricity is found deep underground. With ground-source heat pumps there is a year-round reservoir of constant temperature air just a few meters below the surface. This air is the same as the average temperature above ground. Heat pumps are useful for cooling in the […]

Hilliard's Weekend Notebook - Canadian policy makers are worried about potential weakness in the economy due to higher interest rates. One of the biggest challenges facing Canadians is the increase in monthly payments that comes with higher rates. Although there have been four Bank of Canada rate cuts this year, mortgage rates have not come down as much as […]

Hilliard's Weekend Notebook - The Bank of Canada made a jumbo rate cut, its fourth cut to the benchmark interest rate. The 50 basis points cut brought the policy rate to 3.75 percent. The justification for such a large cut is that CPI inflation has dropped below the target of 2 percent. The actual increase from a year ago […]

Hilliard's Weekend Notebook - The U.S. election on November 5 2024 is touted as a major event, as the policy and style differences between the two candidates are unusually large. Given how close the polls are — within the margin of error — there is a high degree of uncertainty and trepidation over this vote. Who will win? The […]

Hilliard's Weekend Notebook - Canadian physicist Geoffrey Hinton and three other scientists received Nobel Prizes this week for work related to advances in artificial intelligence. Their discoveries have the potential to revolutionize mankind’s ability to cure disease. But these advances in AI come with a warning from one of the recipients. Geoffrey Hinton, 76-year-old University of Toronto physicist and […]

Hilliard's Weekend Notebook - Canada is falling behind the U.S. in economic growth. Up until a few years ago, Canada and its huge neighbour to the south grew by about the same annual rate. But since 2022 Canada is falling behind by most measures. What happened? The Economist wrote an article on September 30, 2024 titled “Why is Canada’s economy falling […]

Hilliard's Weekend Notebook - China entered full panic mode, announcing stimulus measures to counteract the deflationary impact of weak property prices. But those policies may not be enough to lift the economy to the 5 percent growth target. This week China announced several measures to stimulate demand in a weak economy, a last-ditch effort to meet GDP growth goals […]

Hilliard's Weekend Notebook - On Wednesday September 18, 2024, the U.S. Federal Reserve cut 50 basis points off its benchmark rate, making the first move to lower rates in four years. History shows that economic cycles and stock market outcomes after the first cut are divided. Either this is the start of a deep recession and a stock market […]

Hilliard's Weekend Notebook - China continues to experience a significant collapse in its property sector, which is weighing heavily on Chinese families. Numerous attempts at stimulating the sector have failed. When will China’s property sector start to recover? There is a view suggesting that Beijing has lost control of the property market, which could be very damaging to the […]

Hilliard's Weekend Notebook - A weakening trend for the economy in the U.S. was confirmed on Friday. A recession is likely, although the official notification of recession will not come until 2025. The Federal Reserve will start to cut interest rates later in September after declaring victory in the battle against inflation. We seldom get definitive clues regarding the […]