How high can they go?
I gotta admit, seeing the price of gas this high is a little shocking.
I mean I remember the days of 0.39¢ litre of gas! Yes, I'm that old!
I swear I can recall 0.29 cents even but maybe I'm dreaming, who knows.
Is our Bank of Canada really going to tell us that inflation is 5.1% in this country? It's starting to feel more like 51%, LOL!
Maybe they just missed a decimal point.
2022 is absolutely nutty.
Look what's unfolded so far...
We've had the Government of Canada enact emergency measures to freeze some bank accounts of its own citizens, there's a war going on with Russia and Ukraine, the U.S. is freezing sovereign monetary assets of Russia, the London Metal Exchange halted trading because nickel went over $100K a tonne...cancelling and reversing some trades in the process.
This is unheard of stuff.
A couple weeks ago we shared a video we did about the book, The Fourth Turning, that outlines cycles of economic history and how they repeat every 80 years or so.
We're in the final 5 years of the latest 80 year cycle...and it's when everything gets thrown upside down.
So it's not entirely surprising to see what's going on but it can still be a shock to the system.
Think about this...
Just a few months ago, the Bank of Nova Scotia was calling for 8 interest rate increases by the end of 2023.
We called "b.s." on that immediately with some basic math...
If there's $300 trillion of global debt in the world,
And rates go up 3%...that's $9 trillion in new interest payments required, per year!!
Where does the $9 trillion come from to make those new payments? If that's not a liquidity crisis in the making we don't know what is.
That's approximately the size of Germany, France and India's GDP...combined!
And now with a global recession in the cards because of the war, does anyone think interest rates are going up much further...if at all?
To achieve the Bank of Nova Scotia's 8 rate increase forecast, they'll have to increase the rate by 0.0005% each time to not melt the entire economy.
So are we stuck with high inflation and high gas prices for a lot longer than many people think?
Yeah, we think so.
In fact we think the volatility of housing, gas, food, and overall inflation is going to be brutal for quite some time.
Inflation will spike up, calm down, spike up again, calm down, and at the end of the decade prices will be much higher than today (in dollar terms).
And the majority of the population will totally be caught off guard.
This week, Nick and I sat down to record a podcast on all of this stuff.
You can click right here to access it or scroll down and you'll find it there as well.
We would encourage you to take the time to listen to this one.
We talk about interest rates, Canada's recent actions, Russia, Ukraine, China, the Petrodollar system and more.
And on the real estate front...
If you have questions on the real estate front and are trying to figure out if now is the right time to get into investing in a property or not, you can learn what we're up to at Rock Star by attending our next introductory class.
We share all the strategies we're using right now in the Greater Toronto and Southern Ontario areas and stick around to do a live question and answer period as well.
You can find all the details and register for it by clicking right here.
That's it for this week!
Both of our families and my sister and brother-in-law are off to the Dominican for some fun in the sun.
We'll likely skip next week's email but we'll be back soon!!
Remember, how you feel about your future is your choice.
The possibilities for you are endless.
Decide to be happy. Decide to live life on your terms. Start today.
Tom & Nick