Inflation, Chocolate Bars, Rate Charts, Hard Assets & Muscle Ups Galore!

Message from Tom & Nick

See how happy Nick is right there?

That's because he's in his happy place...the gym.

I'm convinced Nick gets a meditative experience from working out.

He absolutely loves it.

And his years of work are compounding.

Last week was week #1 of the 2023 CrossFit Open. This is where people all around the world compete in the same workouts over a 4-5 week period.

And after the first week, Nick is #7 for his age bracket in all of Canada.

Incredible, eh?

He had to do a 60 calorie row, 50 toes-to-bar, 40 wall balls, 30 cleans and 15 ring muscle ups for time.

He got through the row, the toes-to-bar, the wall balls, the cleans and XXXXXXX muscle ups. Pretty freaking amazing.

Don't get me wrong I'm the older brother so I'm definitely much stronger, faster and wiser than he is...but that's pretty darn good!

LOL, joking!!

Let's see what week #2 brings!

Challenging yourself like this throughout life somehow breeds self-confidence and spills over into other areas.

There's something magical about physically pushing yourself to your self perceived limit...and then pushing through that to a new high.

I'm forever grateful that Nick dragged me to the gym just before my 40th birthday. Ten years later I'm reaping the rewards.

Thank you little brother, very much appreciated.

Speaking of hard work...

Statistics Canada has been hard at work trying to figure out inflation in this country.

Here's a chart with the very latest numbers:

We came in at an official rate of 5.9%.

And for anyone watching their grocery bill lately in this country, that feels low.

I used to splurge on an organic dark chocolate bar that cost $4.99 last year. Which I know is already an incredible amount for one bar...but it was my guilty pleasure.

It's now at the same grocery store for $6.39.

A 28% increase in under a year. For a chocolate this pace it almost doubles in price two years from now.

Never mind the essentials like meat, butter, olive oil, and eggs.

I was at the butcher counter the other day and an old friend saw me and asked if the steaks I was buying came with a "loan officer consultation"!! He's got a point, feels like they should.

The good news is that according to Stats Canada, lettuce is down 5.8% over the last month. So it's not all lost, we can have our salad.

Even though Canada's job numbers over delivered recently there's still enough of an inflation slow down here for the Bank of Canada to "pause" for a while.

The U.S. on the other hand seems determined to make at least two more raises.

And many of the top analysts we like to follow believe this inevitably leads the U.S. into a mighty recession.

If that's the case, here's something to ponder.

Check out this chart courtesy of @Luke Gromen:

Look at the amount of stimulus required to fight off the last recession.

Now let me ask you this...

Based on the trend of this chart, how much are they going to require to fight off the next one?

And what will the inflation look like then?

Is anyone ready for that?

Can we handle a greater than 100% of GDP stimulus? When we print that many dollars what will the price of meat, butter, olive oil, and butter look like then?

Are you ready for that?

Is your family, your friends, your neighbours?

The current monetary policy is in the process of destroying the middle class in this country. It's unfortunate, but true.

This is like watching a crash in slow can't stop it but you see it happening (but there are ways to protect yourself, keep reading!).

The central banks are stuck.

They can either raise rates and protect their beloved bonds (and create a financial crisis in the process).

Or, they print and inflate like never before to avoid a scary financial crisis.

Rock and a hard place.

Here's one more chart for you:


When those two lines meet, all U.S. federal tax revenues would be eaten up by the interest on the debt.

And make no mistake, Canada is in a similar pickle.

When you understand what's going on you realize it's more important than ever to have some hard assets in your life.

It's why we are still big believers in: #1 having access to cash for daily life and emergencies (and protection against the deflation threat of a rising USD).

And #2, good quality income producing hard assets (aka, residential rental properties) in good areas. We all need cash flow.

And #3, some good quality hard, sound money.

For us that's Bitcoin. We're big believers (myself perhaps more so than Nick, but he's onboard too). For others this may be gold.

It's that combination that we feel will allow us to ride through the volatility ahead and allow us to continue to live life on our terms.

If you're new to these concepts, keep reading, keep studying, we all need you to.

If you're better off, then we're all better off.

That's it for this week, everyone.

Keep going.

Push yourself through your challenges, we all have them!

See you at the gym!!

I'm actually in Naples, Florida later this week...I'll be checking out a CrossFit gym down there along with doing a bit of a property research tour.

Good luck this week with the CrossFit Open, Nick!!

Tom & Nick

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