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March 28, 2025 | Trump Tariff War Risks Causing a Recession
President Donald J. Trump surprised the world again Wednesday with new tariffs on automobiles and auto parts. This appears to be in addition to tariffs announced previously and shocked automakers like GM and Ford who make a significant number of vehicles in Mexico and Canada. Is Trump determined to push the U.S. into a recession? […]
March 21, 2025 | Chinese Automaker BYD is Taking Over Tesla
Chinese automaker BYD is flooding the world outside of North America with new, inexpensive models both hybrid and all-electric. And the latest announcement from BYD of an all-electric vehicle that can add 400 kilometers of range in five minutes is sending shock waves throughout the automotive world. Will these new models allow BYD to take […]
March 14, 2025 | Interest Rate Cuts Won’t Be Enough To Save The Canadian Economy
Canadian central bankers cut their official rate by ¼ of a percent on Wednesday this week. But that won’t be enough to boost the economy in the face of higher tariffs and repeated threats from the U.S. President. How bad will the downturn get? Tiff Macklem and his colleagues at the Bank of Canada did […]
March 7, 2025 | President Trump is Demanding More Defense Spending from NATO Countries
President Trump mused recently that NATO members should be spending 5 percent of their GDP on defense. This new goal is a large increase from the current target of 2 percent of GDP. Trump has also claimed that NATO member countries have failed to pay their dues to NATO. But countries do not “pay money […]
February 28, 2025 | Trump is Wrong To Impose Tariffs on Canada
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 […]
February 21, 2025 | Population Collapse is a Serious Threat
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 […]
February 14, 2025 | Higher Inflation Could End Rate Cuts For This Year
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 […]
February 7, 2025 | Elon Musk Will Not Meet His Deficit Cutting Targets
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 […]
January 31, 2025 | Trump 2.0 is Destined to Fail
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. […]
January 24, 2025 | Canada Should Use The Nuclear Option Against Trump
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 […]
January 17, 2025 | Musk Will Take a Chainsaw To Government Spending
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 […]
January 10, 2025 | A Credit Crunch Coming Soon
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 […]
January 3, 2025 | A Very Reliable Recession Indicator is Flashing Red
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 […]
December 20, 2024 | The Fed Shocks The Market Triggering an Abrupt Selloff
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 […]
December 13, 2024 | Anarcho-Capitalist Javier Milei Disrupts Argentina and has U.S. Admirers
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 […]
December 6, 2024 | Stock Prices Reach Bubble Levels in US
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 […]
November 29, 2024 | Trump Threats of Tariffs Worry Canadians
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 […]
November 22, 2024 | President-Elect Trump’s Tariffs will Hurt More Than They Help
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 […]
November 15, 2024 | Elon Musk has a Mandate to Impose Radical Cuts on Government Spending
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 […]
November 8, 2024 | Superhot Rock Energy Provides Unlimited Power
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 […]
November 1, 2024 | The Great Mortgage Reset in Canada will Hit Hard
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 […]
October 25, 2024 | A Jumbo Rate Cut and Worries About Deflation
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 […]
October 18, 2024 | The U.S. Election is Too Close To Call
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 […]
October 11, 2024 | Scientists Receive Nobel Prizes Amid Controversy Over AI Research
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 […]
October 4, 2024 | Canada is Falling Behind The U.S.
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 […]