Family trips are the best.
I live for them.
Hanging out with the family is my favourite thing to do in the world.
And we’re lucky we’ve been able to travel a lot.
Earlier this week, we were in Manhattan, NYC…that’s me in Times Square after an epic steak dinner.
We saw the Rockettes at Radio City Music Hall, skated at Rockefeller, saw the famous Christmas tree, did some shopping, took a carriage ride through Central Park, had some amazing pastries, and made some new memories.
Today, we’re back and there’s some serious stuff to discuss:
These things are connected, let us explain…
The central bankers of the world control the economy.
We all work for our money. The bankers don’t.
We trade our time and labour in exchange for money.
They print it.
We work for it, they print it. That’s the way it works.
It’s not fair, but hey, that’s the reality of the situation.
Yesterday, the most powerful central banker in the world, the head of the Federal Reserve, Jerome Powell, scared the crap out of markets by cutting rates 0.25%, but then also saying that they may not be cutting rates further, quite as easily and quickly.
Here’s what we have to say to that:
LOL. LOL. LOL.
Yeah right, Jerome. Nice try.
There are two worlds right now.
Group A: The mainstream markets and professionals who actually believe what central bankers say.
Group B: Those of us who actually look at the data.
Here’s what we mean, check out this chart and pay special attention to the red line.
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That red line is telling us that there is roughly $3 of global debt to every dollar of economic activity (GDP).
Now if interest rates stay relatively high, as they have been, things get crazy, fast.
If interest rates on debt right now average about 4%, then $3 of debt becomes $3.12 after a year.
Now how much would that $1 of economic activity have to grow (inflate) to match that?
Any guesses?
That answer? 12%.
If rates on global debt stay at roughly 4% then the economy has to inflate 12% to keep up.
I’d like to repeat that.
This global debt-based, insane, silly, manipulated economy MUST “grow” at 12% just to keep pace with debt growth.
12% inflation is MANDATORY; it’s not optional.
Canada and the U.S. currently report low levels of inflation but we can all feel that prices of food, rent, everything, is much higher than just a few years ago.
This is required. The central bankers need it for the system to survive.
Without 12% nominal inflated growth in the economy there are not enough dollars in system to pay for the debt.
Read that again.
Are you ready for this world? Because it doesn’t get easier going forward.
Check out this next chart.
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October and November are the first two months of the U.S. fiscal year.
This chart is showing the first two months of this fiscal year compared to the first two months of previous fiscal years.
See how much money they’re spending down there?
The debt is growing LARGER.
And don’t think Canada is any exception.
Heck, our Federal finance minister quit before she could release the Fall economic update.
Word on the street is that Canada was expecting a $40 Billion deficit but it’s clocking in at closer to $60 Billion.
That’s a ridiculous 50% higher.
As a result, few people want Canada’s debt and Canada’s dollar.
Why would you when they keep printing more of it to fund out-of-control spending?
It’s getting debased. You work for it, they print it.
So the Canadian dollar loses value and each $100 I spent in NYC this week cost me closer to $145, every time. Insane.
And this data is also why we feel very comfortable saying that Jerome, the chief central banker, is full of himself if he thinks he’s going to stop cutting rates.
I mean it is possible but he would have to drop billions of dollars of newly printed money into the economy instead (also known as helicopter money).
Even with Musk and DOGE coming in to “reduce government spending” they’re going to have to cut rates and/or print more money fast or the debt collapses the entire financial system.
So your move, Jerome.
We know what we want to own in this situation.
Hard assets.
Income-producing real estate where the rent covers the expenses. Cash flowing properties.
Bitcoin. Energy bound money that cannot be debased by any banker.
That’s our approach, it may not be yours and you don’t have to agree with us, of course.
But whatever you do, don’t listen to what central bankers say, watch the data.
You work for your money.
They print it.
But, we believe you can front-run these people with smartly chosen hard assets.
So the bad news is that the governments of the world are out of control with their spending.
The good news is that you can steer around all of this and even increase your family’s purchasing power if you choose wisely.
You can live life on your terms.
Think critically, look at the data, and don’t listen to what bankers say, watch what they’re doing.
The world is your oyster. 2025 is going to rock our worlds, fun times ahead!!
Merry Christmas, everyone!!!
Enjoy the Holidays with your family and friends!!
Tom & Nick
p.s. The Bills are winning the Super Bowl in 2025 and the Leafs are winning the Stanley Cup. Hard to believe I know, but hey it’s happening.
