February 15 Episode
01:01:50 Share

Welcome to Money Talks. My name is Mike Campbell. We're going to talk silver today. I've loved the look of silver, loved it on the charts. It's, you know, today and last October, it made these kind of highs that are 20-year highs. I'm going to talk to the silver guru, David Morgan, about that and the opportunity. Also, I've got much more with Aussie Jerk. I think it's shocking the amount of money that governments cost if you're going to buy a home, like the added...

It doesn't matter if it's a development cost or a tax on this or that. I think you're going to be blown away by it. I've also got a great shocking stat for you, a great goofy award. I've got Michael Levy. I've got Victor Adair. Obviously, a lot coming your way. But first, I find it absolutely fascinating to see Elon Musk and his team in the Department of Government Efficiency called DOGE

for taking very quickly a hatchet to numerous U.S. government departments, billions in spending cuts. And in a moment, I'll tell you the relevance to Canada. But first, it's no surprise that the government establishment led by the Democrats are fighting back. I mean, after all, come on, there's hundreds of billions of dollars, tens of thousands of government jobs at stake, with the exception of Argentina under Javier Malay. I don't think we've seen anything like this in a Western democracy.

I mean, there may be lots to debate, by the way, over the specifics and require a more nuanced examination of the cuts, but I'll leave that for now. And I'm sure some critics have valid concerns and criticisms.

But they fail to understand or acknowledge that the waste and ideologically driven spending of U.S. tax dollars that's been exposed with things like U.S. aid has gained widespread public support for any cut. For example, come on, 70,000 for the production of a diversity, equity and inclusion themed musical in Ireland?

$2.5 million for electric vehicles in Vietnam. $47,000 for transgender opera in Colombia. $32,000 for a transgender comic book in Peru. How about $3 million for a girls-centered climate action in Brazil? I mean, there's so much more. I mean, it really was a huge list, like $20 million to produce a new Sesame Street show in Iraq. $4.5 million to combat misinformation in Kazakhstan.

I mean, how about this one? 10 million for meals to an Al-Qaeda-linked terrorist group. I mean, and arguably the last straw for a lot of Americans was that the funding for the Wuhan virology lab, which now consensus has it, was the origin of COVID-19. I mean, and that list keeps growing. But I think it's important to look at it in the context of a bigger picture. It's fueling a further decline in confidence in government.

With tens of millions of Americans struggling financially, this gross misspending of tax dollars takes the decline in confidence and trust to a whole other level. And by the way, I have yet to read or hear a political commentator who understands that declining confidence is the big issue with serious financial, social, political repercussions.

I mean, come on, the credibility of Congress and the Senate to scrutinize government spending after authorizing it has taken another hit. Now, time's going to tell whether it's a fatal hit to the entire system of government as we know it. But you know what? My guess is yes.

One thing for sure is that there's more to come as they wade into the Department of Defense that hasn't passed an audit since department-wide audits were initiated in 2018. That's failing seven consecutive audits. Now, some Canadian commentators have chimed in with opposition to the U.S. aid shutdown. But without acknowledging the abuse of taxpayers gives license to any kind of cut. And I want to get the Canadian context here.

While we don't have Doge, we do have an Auditor General. We do have Auditor General's reports, which chronicles outrageous spending. For example, Auditor General Karen Hogan stated looking at the $60 million spent on ArriveCam, the widespread irregularities were in, quote, the worst she has ever seen, displaying in quotes, a glaring disregard for some of the most basic and fundamental policies and rules and controls.

There's a lot of other examples. The one I keep coming back to is the Green Slush Fund called the Sustainable Development Technology Canada. Well, the Privy Council had a look at that and estimated that taxpayers lost $150 million through outrageous misspending, rampant cronyism, and corruption. That was right by the findings of the Auditor General when she looked into the program. She cited 90 instances of conflict of interest for $76 million tax dollars gone.

Maybe the most outrageous example, though, is one from who was the chairperson of that program, the Sustainable Developmentology Canada, Annette Verschuren. You know what she did? She voted to approve a grant of $217,000 to her own company, a company where she was CEO and major shareholder.

and adding insult to injury, by the way, the executives and board members of the Sustainable Development Technology Canada got performance-based bonuses. Now, I'm wondering where the outrage is for that litany of examples, and I could give so many more, so many more exposed by the Auditor General, what I think would have most taxpayers wanting to call in the RCMP. But there is rarely any real accountability. It's never been a big issue in any election.

Never been a question in any of the leaders' debates. I think it should be an embarrassment to the moderators. But let me give you one more thing, at least give you something we could do about it as an example. You see, if our newspapers featured each one of these abominable examples on the front page, and television news had a special feature every week on the misspending, the incompetence, the conflict of interest, I think it would help create some accountability.

that would dramatically improve performance and reduce highly questionable behavior. So before we look across the border, or we can look across the border and be entertained, remember, we could be doing the same thing here, but there's no sign it will happen. Certainly nothing like what Elon Musk and the Doge teams are doing in the U.S., but there doesn't seem to be any appetite for it in Canada amongst our politicians. But I wonder about the rest of us.

Hey, just a reminder, coming up, I've got David Morgan talking about silver, and it's a great topic right now. I'll do that right after the break, but I'll also take a minute and tell you what the biggest message was at last week's World Outlook conference.

But first, let me just remind you, Ozzie and I and former Premier Gordon Campbell are doing the polar plunge again. Yes, that's right. The tears have stopped. The whimpering is going to begin. I give you that warning. But you know what? It would be fabulous if you could help support us. This is for Special Olympics. We're talking about young and old who are challenged with intellectual disabilities, whether it's fragile X, fetal alcohol syndrome, Down syndrome, you name it.

a huge help to their families and they really need it. And that's why I'm so pleased to at least do this. I hate cold water. There's anybody who knows me knows that, but it's worth it. And all I'm asking is two things. One is that you help and donate. I mean, if everyone listening put in like $25, you'd get a tax receipt, man, that would solve a big problem. And you just have to go to moneytalksplunge.com, moneytalksplunge.com.

Take a chance. Do it. We've had some members already doing it. I can just tell you it means the world to me if we do it. So MoneyTalksPlunge.com. And if you're willing to join us, Rob Levy is going to join us, for example. And Dustin, Dustin Noble, who's one of our producers here at Money Talks, he's going to join us. If you're willing to do this, just drop us a line at info at MoneyTalks.net. Info at, well, or you can do it at Mike's MoneyTalks.ca.

Mike's money talks.ca. Love to hear you. Love to have you join us. I'll be back. David Morgan. And what the biggest lesson I learned from the outlook conference. Hey, it was a great weekend last week at the world outlook conference, huge crowd. And I was incredibly impressed. It didn't seem like anybody left before the entire conference was over. Great credit to them. And there was a ton of really fine presentations with specific recommendations. And for me,

Personally, well, I really enjoy meeting so many people who listen to Money Talks. So I thought I'd sum up the biggest message I got from listening to all the speakers. And it's a little bit different. And it is, you can no longer sit back and be a passenger. Otherwise, as I've been saying for you, you'll be roadkill. And that's precisely what's been happening to I think about half of Canadians, as numerous surveys and polls indicate. All the drivers of the trends that have caused this distress for so many Canadians are

are still in play. From a global monetary crisis to excessive sovereign debt to the decline in the purchasing power of our loonie and its decline versus the US dollar and a litany of policies that are anti-economic growth. They're all still there and we're living the consequences already. But my big concern is for younger generations.

Maybe not a surprise, but I was sitting there thinking the whole time. This is terrific advertising for what people should do and why they should listen to money talks. You know, most Canadians have sat back and they've watched the deterioration in the overall economy, the government's financial position, and our own financial position for a heck of a lot of people.

Now, the track record speaks for itself. With last year's World Outlook small cap portfolio, which we do in conjunction with Keystone Financials, Ryan Irvine and Aaron Dunn, well, it was up 43%. And wait till you hear what they've recommended this year.

And we had more recommendations, all worth hearing, which is why, hey, if you weren't able to attend, you might want to consider getting access to every keynote speaker and buy access to the World Outlook video. It's very easy. If you're interested, just go to Mike's Money Talks.ca. I'll be back with David Morgan in just a moment.

I've been looking forward to this. I want to talk silver. It's right in our wheelhouse, one of our core positions. And I couldn't help but look forward to having a chat with David Morgan about that. I call him the silver guru. Why? Because he's got a level of expertise rarely matched when you talk to analysts about the silver medal. David, thanks for finding time for us. Much appreciated. Michael, it's been too long and thank you for having me.

Well, let's start. I know it's a broad question, but just I mean, I'm looking at silver on Friday, for example. You know, I guess we peaked at this number at about October last year. But before that, I think we're going back a lot of years since silver's been, you know, tickling these kind of numbers. And as a Canadian, remember, we get the devalued dollar side of it, too. So it's been it's been terrific.

Well, silver's finally caught a bid. I mean, gold's been making new nominal highs for quite some time, as you well know. Silver really, if it were making nominal new highs in U.S. dollar terms, it'd be about 50, and it's not. Gold and silver both went up about 30% last year. Silver's edging out gold so far this year, and we're about a month and a half in. I do think that silver will do what it's done in the past, which means it will accelerate as we get to the top of this secular bull market in the metals. And

And I think we really haven't got a lot longer to go, Michael. I think we're probably a couple, three years out. But, you know, as I've always said, the market knows more than anyone. So we'll have to wait and see. And looking at, of course, I was around and you were around when we had the Hunt brothers enjoying on this. But that was a fun time. What was that, about $55 US was the high at that point? Yeah, I don't know. I don't want to lie. I think the exact price was like $52.50 on the stock market. And the near futures was $55.

above 50. Well, that gives me a ceiling at this point. But as I say, you've had a lot of technical signals recently that are very positive for silver. Can you tell us what you think is moving it? Is it just a relationship with gold? Because of course, another new high this week in gold. Is it that relationship or amongst other things? It's a couple of things. One is it's gold. I think that's the primary mover. Gold's doing well and there's been...

unceasing central bank buying gold. Central banks have been buying gold since the financial crisis of 2008, pretty much from 2011 onward.

And this really accelerated the last few years. And it's very apparent in my thinking, at least for the reason, and that is simply that when the Ukraine war broke out, the United States made, I think, one of the biggest financial blunders in the last 50 year century, which means that they sterilized $300 billion of Russian assets, U.S. treasuries, took them, basically stole them and gave them to the enemy of Russia, the Ukrainians.

And once the rest of the world woke up and saw that, they said, hmm, what if I'm not politically correct? Will the United States do that to our bank account? Again, a huge blunder. And because of that fact, a lot of these countries that probably weren't thinking gold started to buy it. And countries that were buying it started to buy more because it is the money of last resort. It has no counterparty risk. And all central banks look at it as a tier one asset.

So having said that, silver usually moves with gold. It's about 85% correlation. And then if you want to get into the tariff thing and arbitrage between London and New York, while this metal's moving out of London into New York, we can discuss that as well.

Well, again, that central bank buying, and I think I love that people hear what you've said there in terms of, keep in mind, you're talking, you know, well, both to an American Canadian audience, but in the Canadian side, they saw the confiscation of bank accounts, you know, during the convoy, you know, people who had not committed any crime whatsoever were not accused of committing a crime and had no recourse.

And there was their money confiscated or frozen in the bank, I should call that. And as you said, Al, what was happening to Russian assets and not a surprise that people started to look for alternatives. You know, and you look at the central bank buying of gold and it's just consistent and huge. Yeah.

Yeah, there's no getting around it. I mean, what happened in Canada, I made kind of a big deal out of it. It was common sense, but a lot of people think, well, we're on a central bank digital currency. Then they have control over their money. No, they didn't need any CBDC to freeze those bank accounts from the truck you strike. Really, really hit a nerve with me. You know I'm American, but 40% of my business is Canadians, and I'm there a lot, as you well know, and it just really, really...

Hit me hard, Michael, but a lot of this stuff has in the last many years, you know.

Let me ask about, okay, so silver is there. I mean, the other kicker I've always liked for silver and why I was so comfortable, you know, I said, I recommend it to everyone, you know, have a core position. When it moves, it will be the old Ernest Hemingway thing. How did you go bankrupt slowly? And then, you know, then all of a sudden, and I see that that style of movement as different things get discovered, you know, all of a sudden in the marketplace, but

But one of the kickers I've always liked is the industrial use, especially with electrification going on around the world. You know, and there's huge swaths of people who even don't have any access to electric, you know, electricity. So, I mean, I see that big play, too, coming on board. Yeah, it's been huge, Michael. I'm trying to be succinct, but if you go back 25 years, 35% of the silver market was industrial use. Today, 60% or more is industrial use.

The other thing is in 25 years ago, the mining activity worldwide was 550 million ounces per year. Now we're at about 850 million ounces per year. So if you do the math, not only has it gone up from 35 to 60%, we've increased the mining activity by 300 million ounces.

So if you take that math and you just do some simple in your mind, 550 million ounces is about what the silver market uses right now on an annual basis. And that was the absolute total 100% silver market 25 years ago.

So if we go back 25 years and the mining was flat, it's not. I just said it went up 300 million ounces in 25 years. If it were flat, it would be 100% of the market was devoted to industrial use. So I just want to make that point very clear to people. Hope you understood the math. It's pretty simple. But this is the amount that's used in industrial. People say, well, industrial doesn't count. It does count.

But it's always the margin. And the margin is the volatility in silver due to investment demand, which is basically the risk on, risk off. Oh, dollar's good, dollar's bad. Stock market's going to save us. Real estate's the way to be. On and on it goes. And then when people get really scared, they go to safe havens, usually gold first and then the silvers.

Can I ask you to describe, let's say I have three choices. I can buy silver bullion, I can buy a silver ETF, exchange traded fund, or I can buy a silver stock. Can you review the ETF for me? I mean, I'm starting to read reports that, I mean, it's supposed to be, if I buy an ETF, they're supposed to have the silver backing it. You know, I can come and get it. But I've heard reports or some doubts about that to the degree to which they have it silver, actual silver bullion backing.

yeah it takes a pretty good forensic type of accounting to look into it pretty deeply if you study the prospectus like a lawyer would they use the word silver price they do not actually tell you does anything other than follow the derivatives price remember the silver market is a derivatives market when we talk silver market really talking about thousand ounce commercial bars that are represented by pieces of paper

The retail market that we're most familiar with is a subset of the silver market, but it's really a separate market. So going back to the ETFs, there's a couple of things that bother me about it. One is it falls at a silver price. Secondly, if you have the medallion, which is just the receipt for a contract, you could count that as if it's physical. Now, it should count. If you paid for...

one contract, roughly 5,000 ounce silver, and you own it, then obviously you have a receipt and a warehouse receipt, a claim on that silver. However, let's say that that silver is sitting in a warehouse in New York or a vault in New York, but you also put it on the books of your ETF. Now you're double counting. You're showing silver in your bank vault and you're also showing in your ETF. I think that goes on more than people like to think about.

Secondly, to extract silver out of the SLV or the PSLV or some of these other ETFs is extremely cumbersome and it's not available for anybody other than the bullion banks, really.

You have to be really well healed in order to have the privilege of taking physical metal out of the paper. So I would say bullion first, something you can touch. I would say mining stocks is a second because of the leverage and

And lastly, I would use ETFs. And I'm not opposed to any of those. People ask me all the time, well, do you recommend them? I say I recommend what works for the person, but I always recommend starting with physical metal first. After that's accomplished, if you want to move into other areas, certainly you could.

So here we have silver, Ella, what you're saying, you know, trading back to, as I say, the October high, but that's been the high for years. Have the silver stocks, and I know there's categories, there's seniors, there's mid and there's juniors. Let's say even have the silver seniors even kept pace in a way, reflected that nice strong move?

This was not rehearsed, folks. You know, a lot of my friends are dealers, and I know them quite well. I know many of the dealers in Canada and the United States, and even in Europe. The point is that almost all of them will tell you, and they'll tell you this, that you're much better off buying physical metal than buying the mining shares.

On aggregate, that's true. If you average the mining shares and take the total and divide it by the number of shares or companies, you're going to come out and get gold and silver, usually outperform. However, if you're subscribed to the Morgan Report, you'll find out you do far better if you're a stock picker. For example, if you bought silver wheat in 2011 at the top of the silver market in the US, roughly $50 an ounce, that stock price has doubled.

Silver would have to be $100 in U.S. prices in order to maintain the same gain that we had in the Morgan. If you look at Agnico Eagle, it's making new all-time highs as we speak, outperforming both metals in a substantive way. So if you looked at, and our top tier is geared that way. When I started the Morgan report, Michael, I was,

No offense to any Canadians. I love the junior markets. I know so many of you. But if you want to be safe and sound, you buy the blue chips. After you have a solid base in the blue chips, then you can move down the pyramid into the junior producers and the speculative sectors.

but you want blue chip stocks to build your portfolio. Had you done that with the Morgan Report, you would be far above buying the metal right now. Obviously, I advocate both, but if you can pick the stocks, you can definitely outperform.

And along those lines, and this is, sorry, I'm almost feeling like silly asking it in this way because it's too simplified. But, you know, what are you looking for even, you know, because you have a range of silver seniors that you could choose. How do you distinguish? Because the macro environment's the same, assuming they're not in a tough jurisdiction that might confiscate, but let's leave that for a side.

What's the distinction that we should look for? Yeah. Well, a few of those books back there, some pretty smart guys talking about how to analyze a gold stock. And I could probably take them all off my shelf and burn them. And the reason being is that we had a real shift in the precious metals industry across the board, but primarily in the precious metals industry. And that was with the adver of Samir Shulich and his compadre,

Pierre Lassonde. And when we went into the royalty slash streaming model, this beats everything by far. And that's what I focused on. I said, look, I'm in the business to make people money. And the commodity is pretty simple. If gold comes out of South Africa, Canada, or South America, I don't care. It's the end product. It's fungible. Once it's 999.5, it's all the same product.

So what I have to determine is who has the largest margin, who's got the least risk and what are the profits going forward? And if you analyze a royalty company versus, let's say, a general miner, you see there's a lot less risk on inflation hazards. If you have royalties in, let's say, five jurisdictions, you have a lot less geopolitical risk. And on it goes. So we favored

And we kind of do this annually, Michael. We go through the philosophy, you might say, of why we like the royalties of streamers. And then we pick the best of the best there. And yet, having said all that, had you bought Pan American when I did at $2.50 a share, my dividend's about 10% right now.

And that stock has performed quite well. It's had its ups and downs. And I've traded in that a couple of times. Agnico, a similar situation. So there are some miners that do almost as well as the royalty. So we have a few of those as well, but-

It's a shift. There's no book back there that talks about, you know, royalty companies right now because relatively new. I know, of course, we talked our age before the show started, but I have some seasoned professionalism in this business, as you all know.

And let's come to the other side, which you said, build your portfolio with quality, you know, with the seniors, more predictability, as you say. And if you add on having a look at the royalty stream, you've reduced your risk further, you know, from various factors. But saying that, you've also had a very good track record looking at juniors.

And people have an interest. And what you're warning is make sure you know your risk and how much you're putting in, et cetera. But within all of that mentioned, what do you think of the junior market? Or do you have a couple that you're keeping an eye on?

Well, I did have the hard hot hand. I've had it for almost a decade. Since then, I really haven't. But I do have a couple. We just put a new one in the report two months ago or January, maybe a month ago. It's in South America and it's really high grade. I really like grade. Grade is king. Yes, I know you can get disseminated and make a profit if you have enough of it. I know all the art. But nothing beats grade.

So this is one that we put in the list. Really, if you want leverage, you're not going to get a Bitcoin type of performance. But, you know, before Bitcoin, the way you got those type of results were in the junior mining sector. I mean, you know, that was the penny stocks, dollars. I mean, that was a potential big market. And now, of course, it still exists, but not to level. So right now, silver is undervalued relative to everything. Silver is undervalued relative to gold.

Silver stocks have been beat up, even the majors for the most part, a couple of exceptions. And the junior silvers are almost giveaway prices. So if you can pick stocks and you're willing to diversify, you can't just pick one. You might pick one and get lucky.

But we have one that we like. We have another we're investigating. There's one up your way. And maybe I'll give a big enough hint because I don't mind giving out. I don't like giving out my picks because I keep the list short. But in the Keno Hill property area, that's really a great, great project. It's near a bunch of majors. So most of you Canadians know a lot about mine.

If you just look at Keno Hill area and a couple of mines that are near some majors, two of them, in fact, that are silver companies, giving some pretty big hints here. There's one there I really like. Haven't finished all the due diligence on it, Michael, but I know the people. I know the track record. They spend money judiciously and they really know what the heck they're doing. And that's really great. So there's two I really like. And I have it. If you would ask me.

On your show two months ago, I'd be kind of flat-footed right now. But right now, I'm glad you asked me when you did, and I have a couple that I agree with. Oh, good. I finally got some timing. David, before I let you go, I want to ask you about a documentary. I mean, I know you've written books. Of course, you've got the Morgan Report. But tell me just quickly about the documentary and how we might get access to it.

Well, one of my, I guess, mentors said, you know, you're going to write another book. You haven't done anything. I mean, I don't sit on my butt. And I said, I'm tired of it. And so we started talking about making a documentary. So I've got it filmed and it goes to a lot of people that are not necessarily in the mining business, but in the hard mining camp.

I've got G. Edward Griffin, a creature from Junko Island, Foster Gamble that did Thrive 1 and Thrive 2, Edward Vieira, one of the scholars that wrote Pieces of Eight, Ron Paul, Ellen Brown that wrote Web of Debt, and many like that in the film. But I'll just read the synopsis really quickly, but

We look at money basically from a spiritual aspect. And the name of the movie is Silver Sunrise. It goes from, you know, looking at, you know, tribal trade to using gold and silver from paper and debt to central bank digital currencies. And Silver Sunrise sheds light on the manipulation of money by governments, banking cartels, hell-bent on exploiting civilization with endless debt, perpetual wars, and unjust enrichment.

By better understanding the monetary system and how corrupt it has become, Silver Sunrise, this documentary, enables one to postulate

a new brighter future one without overwhelming stress fear and control associated with money and having said that we do a lot of uh looks at energy because really the world runs on energy not on money you know the adage money makes the world go around it's partially true but it's really energy that makes the world go around and if we were able as a thought experiment to think that maybe tesla could have brought

free energy to the world, contemplate what the world might look like now if we didn't have to pay for energy. We had it in such abundance that we could desalinize water along the coastline anywhere there's an ocean and land that intersects.

the amount of food we'd be able to grow and the amount of production we'd be able to entail. So I'm not saying that Tesla was doing that, but there's postulation that he was or trying to. So there's a lot to this movie and I'm trying to get into a deeper look, Michael, because my life's work is really revolved around freedom and, and free money or honest money, sound money and freedom actually go hand in hand. And we're in a situation now where the technocrats are,

are gearing us down. And even all that you may or may not like politically, the beat goes on from my perspective, which is AI and this intelligence that had been put as an overlay on government. They're going to remove a lot of the people in the government and use artificial intelligence to mandate a lot of these functions that government performs now, which actually means more control now.

So Silver Sunrise? SilverSunrise.tv. And there's several trailers you can watch for free. And if you're inclined, you want to make a donation and get in the marquee as we scroll through the credits, you're welcome to do that. Looking forward to it. The Morgan Report. David Morgan, great to have a chance to visit. Thanks for taking the time. My pleasure, Michael. Thank you. Time now for the quote of the week.

We're releasing this Money Talks on Saturday, February 15th. Well, it's Flag Day in Canada, where everyone is encouraged to fly the Maple Leaf, which is the context for our quote of the week by Terry Glavin, who's on the shortlist of best investigative journalists in the country. I encourage you to subscribe to The Real Story on Substack. I do.

But in quotes, four years ago, Justin Trudeau ordered the flag lowered across the country for six months in a national shaming ritual. Trudeau premised his project on the discovery of a mass grave at an old Catholic residential school that was never discovered and remains undiscovered. The federally enforced national humiliation persisted long after the Mohawks made him raise the flag back up again.

Churches were put to the torch. Statues were pulled down. Even the old red ensign was defamed as the hate symbol of a racist colonial settler state. So yes, maybe I'll host the flag Saturday. But if I do, I'll remember what I wish I could not. End of quote.

But now in the search for political advantage, the same politicians who called Canada a genocidal state, systemically racist, now wrap themselves in the flag, drenched in maple syrup, coming to be claiming at least to be Captain Canada. Well, you got to forgive my cynicism, but there's no sale here. Well, may we live in interesting times as the old Chinese proverb. We certainly are. I got to bring in Michael Levy right now.

Mike, I mean, so much to talk about, whether we're talking interest rates, inflation, Canadian dollar differential with the U.S. I mean, the list is a long one.

Well, it is, Mike, and I'm taking a look at the inflation, and it was up in the U.S. by a scant, you know, one point from 2.9% to 3%. But before we get to that, I'm hearing some confusion, and people probably misusing the terms monetary policy and fiscal policy, and they're not the same. And maybe let's just give a little explanation, because I think when we open up our discussion, it's going to make a little more sense. Well,

Well, I think it is an important distinction. I mean, uh,

I'm not necessarily comfortable saying this, but we have a lot of people presenting Mark Carney should be the next prime minister because he was bank, you know, governor of the Bank of Canada, Bank of England. But let's be clear at least what that experience is. As governor of a central bank, you're responsible primarily for interest rate policy. Now, it may also morph into things like you're trying to keep interest rate down by buying government bonds or you're releasing that called quantitative easing and tightening. But the point is, that's what they deal with.

But fiscal policy is what governments do. Everything that impacts your life, whether it's taxes, what they're going to spend the money on. I mean, every government policy is fiscal policy. And I think it's important to note they're not the same thing whatsoever. I mean, I kind of look at it by if that's your rationale by preferring one candidate over another. Well, you know, it's kind of like saying I know an orthopedic surgeon and he's just jumping into dentistry.

Because it's not the same thing at all. The responsibilities have been different. You know, so bottom line, I think it's an important distinction to make.

So if somebody like Mark Carney, and I'm not saying Mark Carney because I could see David Dodge, I could say any of the governors of the Bank of Canada or Bank of England, what they're talking about is monetary policy that does not necessarily give you the bona fides to go in and run political policy in being head of a government. They are completely different. Yeah, and that's why I think it's just important. With the Liberal leadership, we're electing the next Prime Minister,

The day they win, they'll be prime minister. It's important to hear other, you know, what their policy perspectives are, whether it's any of those candidates. And I'm just saying, I think it's important, though, when we analyze any of them is to know that difference. And that's what we're talking about today. I mean, you know, the central banks will be looking at inflation.

You know, because if inflation's up, chances are they'll push interest rates up. When inflation goes down and along with economic growth as it's been in Canada, then the Bank of Canada will lower rates as they've done.

And we're looking at the U.S. I mean, they were only up to 3% from a year earlier in January, up from 2.9% in December. So it's a very, very small increase. But the fact is, there is no trending even sideways in the U.S. And when you exclude food and energy, 3.3% higher from a year earlier. And that just says in the U.S. And Mike, I'm just going to switch it right over to Canada while we're talking.

Prices are going to go up in both countries now, maybe in the U.S. because consumer prices are going up because of demand. But in Canada, our prices are going up because we're going to have tariffs on incoming goods, particularly from the U.S. Stuff is going to cost more and that's going to push on inflation.

Yeah, and we have to make a distinction, for example. We don't know all the extent of the Trump tariffs or the retaliatory tariffs from Canada, of course. But again, we represent our imports to the states. That's what they're going to make more expensive. That's only 10% of their economy. Much bigger percentage here. That's why the government is also taking a long look at what exactly the retaliation will be.

They don't want to hurt our economy unduly or more than they have to. And so far, that's why they've looked at consumer goods. But it'll mean that those consumer goods will go up. I mean, it's obviously, I think people listening today will know it's a complicated subject. But the worry, as you say, is it'll edge prices up to some degree. And does that force the Bank of Canada's hand if they're worried about inflation?

Well, there's just no doubt two things, Mike. Number one, the negotiators have stated unequivocally that Canada will raise tariffs on U.S. imports. If the U.S. does the same to Canada, that's going to hit consumers. And the other impact is a U.S. dollar, which is going to get stronger because inflation is up.

The US Federal Reserve is not going to bring rates down. So the differential between US and Canadian rates is going to widen and the Canadian dollar is going to be weaker, giving us less purchasing power. - Yeah, I think that's a great point. I mean, we have to worry. Certainly the pressure in Canada is for lower rates,

We'll see what manifests. And the pressure for the states is at the very least to stay even. And even people saying they'll actually push interest rates higher, we'll have to see. But that differential is what you're seeing. You know, the U.S. will look more attractive than

than Canada does for investment capital or just capital sitting there, especially you get a stronger US dollar. So the momentum will continue. And as you say, you know, the interest rate differential. So yeah, that's the one that worries me, Mike, because a lower Canadian dollar is certainly not a recipe for prosperity.

And maybe just leave with one final thought, and it's a pretty significant one. U.S. upward pressure on rates, and they can and maybe would raise their interest rates if, in fact, inflation carries on. Canada cannot raise rates ever, ever being the foreseeable and medium future.

Yeah. I mean, the economy isn't strong enough. We already have the threat of the tariffs. And again, that'll be, we sort of been in the emotional stage of the tariffs and the reaction as we see by booing Americans when they're really booing Trump, I think, but anyways, booing Americans, uh,

And again, we still need many more details. There's still a great deal of uncertainty. There's a camp that says it's just a negotiating tactic on the part of Trump. Others are saying he is dead serious about using trade to get, you know, especially on the security sense, not just Canada, but globally. I mean, there's a lot more to talk about, which we'll do. But in the meantime, Mike, thanks so much for taking the time. Enjoy the day. Have a good weekend, Mike.

Time now for the shocking stat of the week, although I have to admit you probably won't be shocked. But here's the question. How big an increase in your income would you need to stay even with the rise in the cost of living since, say, the beginning of the pandemic?

Answer? Well, if your income hasn't grown by over 17%, you're actually poorer than you were in January 2020, according to StatsCan. And keep in mind, StatsCan's Consumer Price Index measures over 700 goods and services. And of course, you don't buy even a fraction of that, which is why I continue to focus on the increase in the cost of food and shelter and gasoline, because all of us buy them in some form.

So how much would your income have to have risen just to stay even with the rise in those essentials since January 2020? Well, the answer, your income would have had to increase 23% on average. Of course, that varies by individual depending on how much gas you buy or how much food you eat and where you live. But it's a good indicator that anyone who hasn't seen a 23% increase in income since Jan 2020 is actually poorer.

You know what shocks me, though, is how oblivious so many elitist Canadians, including our politicians, are to the financial distress dealt by over half of our population, including 2 million who visit food banks monthly, or the 53% of Canadians that the recent RBC survey found were feeling financially paralyzed, or 48% feel there is no way to get ahead financially while they spend their entire paycheck on necessities.

And not only is that the plight of those people rarely mentioned, if ever by government, I think they actually go out of their way to ignore their situation. For example, in January, Prime Minister Trudeau was on CNN saying how great our economy was doing. A fiction he repeated to Stephen Colbert back in September. And the Liberal Party is still doing that. But then again, I'm not sure. Maybe the problem is that all of our elites and our politicians are doing just fine.

I want to bring Ozzy Jurek in here right now, the brave Ozzy Jurek, as he braces himself for the polar plunge in just two weeks' time. Ozzy, great speech, by the way, at the World Outlook Conference, super well received. And again, I've said this so many times, but it's a topic of du jour for so many people is what's going on with our housing. And I was kind of interested to see the pushback, for example, now to the stress test.

Yeah, it's interesting. RE/MAX came out with a new report. They call it the Nation of Renters, which sort of highlights all the factors currently shaping the country's housing landscape. And they argue that the stress test house has outlived its usefulness and it's unnecessarily inhibiting capable entry-level purchases in their view. And they also point out to all of the other things that are going on.

When you take a look at the government and everybody is wringing their hands, and you've said that for years, that there's a lot of talking going on, not much doing. Think about this one, the Toronto Metropolitan University

report says that in 1971, we built 45,000 federally assistable units. And then it took 25 years to build 45,000 again between 1995 and 2019. It's mind-boggling. It really is. And by the way, just to note, the CMHC came out with a little report saying, you know, all the government targets were absolute BS. That's my words. They certainly said they weren't happening. But I mean, you know...

I always wonder, Ozzy, when it becomes misinformation or disinformation, when a government says we're going to build 3.89 million units by 2030, everyone in the industry says there's no chance of that. And now, as I say, the CMHC says we're not meeting any of our targets that way. And as I say, what do you want to call that? Misinformation, disinformation, or lying? I don't know. We'll leave that. But the point that you've been making and I've been making over the years is the degree to which government

for all their talk about caring about affordability has been one of the main components of why prices have gone up. Yeah, well, this is the thing, you know, and you point that out very truly that they talk a lot, but they actually have done it. This is what surprised me so much. They actually did build 45,000 units in one year in the past. It was done. Yeah.

Why don't they do it now? Well, maybe the Canadian Home Builders Association Municipal Benchmarking Study, man, that's a mouthful. It says the cost per unit in Toronto for development charges $189,000, which is a 21% increase. Hamilton, second highest per unit at $61,400. That's up 49% over 2020. Vancouver, $61,000, up 29%. Ottawa, up 11%.

And even Halifax, which is only 9,000, but it's still 41% higher from 2020 when it was 6,800. So there's the answer to government's

joining us, helping building more units. Well, and you went really quickly over those numbers. I mean, people should really listen to that. You know, when you're talking about increases, as you say, well, Toronto's 21%, but as you said, it's nearly $190,000, for God's sakes. You know, Vancouver up 29%.

You know, Calgary is a little better at 15%, but it's still $42,800 getting shipped on the price. And that's why I've been, you know, gosh, I've been moaning about this for years is how government stands up and says, I care about affordable housing and then does this. And those numbers are mind boggling, you know. And again, no wonder we have this slowdown.

There's so many other reasons. I appreciate that. But I know you wrote this in AusBuzz and you can get AusBuzz, by the way, or see Aussie on YouTube. Just type in Aussie Jurek. But look at that Toronto condo crunch.

Yeah, I mean, we mentioned it once before that it's a 30-year low in pre-construction condo sales, but that doesn't really tell at all. It's 80% down from the previous year. So, and in addition to that, we now have an enormous amount of units. So, the Greater Toronto Area has an unprecedented backlog with almost 40,000 condo units.

in new developments, in assignments, in resales that are currently unsold. So that overhang and partly this of course we sold this unit at 1,400 or 1,500 a foot. Then they were all little boxes, 350 square feet to 400 square feet. Even at 400 square feet it was over 600,000. And now that they were sold in 21 and 22 and now they're coming due, people don't literally don't want to complete. Now I'm not saying this. Go to YouTube. Every listener just

Have a wonderful afternoon in Tyburn, Toronto, Condo Market. And your eyebrows will go right to the back of your head. I mean, huge challenges. And there is huge uncertainty, as I chatted with Michael Levy earlier. You know, huge uncertainty about the impact of the tariffs. I'm saying the positive side, particularly.

for real estate is it looks like interest rates will probably go down to adjust to that they were already sort of predicted and forecast to go down maybe a little bit more we're finally seeing a budge in the five-year rate so that may help unfortunately it may be offset by job layoffs you know unemployment numbers which of course are key but it's never never that easy but I'm trying to be a little more cheerful here so we might get lower interest rates

Well, and I salute you for saying that, because in the United States right now, the rates are going up. And there comes that point as to how far can we go. And I think at the Outlook conference, we had some people saying, hey, maybe it's a 63 cent dollar in the works because of that. I mean, I have gray hairs just thinking about it. It's not my age. It's just thinking about all the things that...

the fall on us. Well, I'll let you, I'll finish with this though, is, you know, one of the themes I've been saying, you can ignore economics and finance problem is they don't ignore you. I'm telling you at a period right now, Ozzy, where the rubber is hitting the road hard and it, you know, and if it hasn't got your attention yet with things like a dollar 45 for a dollar us, uh, with the constant battle with pressure, my shocking stat, as you heard was you needed a 24% wage increase or, you know, uh,

income increase since 2020 to break even on food, groceries and gas. Now, a heck of a lot of people, especially at the lower end, never saw 24% over that period of time. So it's all coming home to roost, as is bad economic policy, as is bad housing policy that added to the cost of those houses, as you just alluded to. I better take a blood pressure pill before I keep going here, Ozzy, but man, I'm worried.

I am worried. And people, I just say, you want to keep up with real estate, go to ozbuzz.ca or Ozzy's doing a ton on YouTube. You just have to type in Ozzy Jerk. There's lots of snippets or smaller pieces from experts on different aspects of the real estate market.

So in the meantime, Ozzy, go under a cold shower and get ready for the polar plunge. Thanks, Mike. Well, this is Valentine's weekend, a romantic weekend. And my wife says, well, I'm romantic. I'm romantic. I like to take long, romantic walks down every aisle at Holdren Fru. Oh, you can get in trouble with that. Ozzy Jurek, OzBuzz.ca.

Let's go live to the trading desk. I'm going to bring Victor Adair in. Vic, first of all, you did a fabulous job. Well done last week at the Outlook conference. And I'm sure, as you heard earlier in the show, what a pleasure it is to meet so many people who listen to the show, who've got questions, et cetera. But fabulous job. Well done. Well, thank you, Mike. I thought it was probably the best World Outlook conference we've ever had. And I did see a lot of people that have been there for years. And it was great to see everybody. I love doing it.

Let's talk about something you said last week, and I just want an update on it. You were saying that, you know, because you were traveling too, that you were happy to be away from the markets at that point. And one of the comments we hear from the governor of the Bank of Canada to everybody else is, you know, with President Trump, he's introduced a lot of uncertainty into the economy, into the markets, into trading relationships, and a lot of people anticipating there's a lot more to come. Okay, how do you feel now?

So here's actually what I've done. When I saw Trump win the election back in November, I just intuitively knew it was just going to change the playing field.

The market's going to continue to trade, but it's going to be different. I didn't know how it was going to be different. I thought, because I'm only trading my own money, I don't have to answer to anybody else. I could just not trade for a while or really cut back is what it did and try to learn. If you're a musician, you're trying to learn the new music so you can play along. I think that was the right thing to do.

I make money because I manage risks really well. I had zero faith that I could predict what Trump was going to do and how the markets would react.

You know, until I watched for a couple of months and kind of got the hang of it, as it were. So that's what I did. And I'm glad I did, because a lot of things that happened in the market were unexpected and the market reacted different and all that. And I kind of got back to work, as it were, this week. And fortunately, I had a really good, really good week.

Did you play off of the fact that, I mean, it looks like President Trump wants a weaker U.S. dollar. Again, that protects his manufacturing base and the people who supported him, you know, the blue-collar workers in that area seems convinced or seems very committed to that. So did you play that? I mean, you know, there's a couple of things coming into play that could spell the top of the U.S. dollar, at least on a shorter term, you know. Okay. As we've discussed here a few times in the past month or so, or two,

The U.S. dollar is at a two-year high. Well, actually, it's at a 23-year high because we were higher for a couple of weeks back in 2022.

The U.S. dollar has been incredibly strong. And as I've said to our listeners here who have probably been, you know, disappointed, I guess, that the Canadian dollar has gone down as much as it has. I'm saying the other currencies went down even more. It's not so much about Canada being weak, although there's lots of reasons why Canada is weak. It's the U.S. dollar was so strong. And

Mike, around the time Trump was elected, there was this expression in the financial markets. It was American exceptionalism. Like nobody else is even close to us. Why bother? You know, that kind of thing. And I think that was the peak of American exceptionalism. And one of the ways that showed up was a super strong dollar. You know, I talked about capital coming to America for safety and opportunity like there's just nowhere else to go, you know.

So, one of the things I saw is that last year, toward the end of last year, the American stock market was so outperforming all the other stock markets in the world. And of course, under the American exceptionalism idea, that was going to go on forever. Well, it turned. It turned.

Well, and I'm coming back to the, you know, a couple of things. Interesting. It was on Saturday that Martin Armstrong said you're going to start hearing about a meeting between Trump and Putin. I thought that was pretty impressive because about three, four days later, we start hearing about that. But some of the ammo for the U.S. dollar, I mean, that would be a peace dividend, as you've said earlier.

on numerous occasions, you know, money comes to the U.S. for that opportunity, but for safety. So you had money coming in from Europe too. So maybe that contributes to what we're saying here. But it's just fascinating that you got to keep an eye on the currencies. That's where you see the action. And maybe the U.S. dollar is poised. It had a pretty good rest this last week.

You know, you look at the market and we understand the expression that a market's trying to discount the future always. And sometimes when you look at the market and you're seeing it moving, you say, gee, that doesn't make any sense to me. I say, it doesn't make any sense to you because you don't have all the facts. There's stuff going on you don't know about. Now, the fact that the German stock market

has just soared here the last six weeks or so, while the mainstream media is writing Germany off as a basket case. They can't do anything right. Well, you look at the German stock market, they're clearly doing something right. So I'm going to say that the market knew

that there was going to be a resolution to the war in Ukraine. You might not like the terms, but, you know, that was going to happen. And the fallout from that would likely be a weaker U.S. dollar, more opportunities in Europe, probably cheaper energy costs. You know, any number of things would come from that.

I would just, as you know me, Vic, I'd say, but it's also a reminder that the economy is not the stock market. And you're so right. I mean, Germany's got so many economic stats that really spell trouble for them, but the market doesn't react at that moment. So I think that's also an extra thing. But I don't want to let you go without talking about gold. I mean, that's another new high this week for gold. Yeah, gold rallied from the...

Beginning of the year, I guess, seven consecutive weeks higher. We gained about $300. I think that's about 17%. It's just been a one-way express train. I have to say, Mike, I have not caught it. I mean, I was a little skeptical. I thought it was overdone, you know, three, four weeks ago. There has been a story around lately. Martin Myrnbiel, our gold analyst friend, sent me a great piece on this where the Treasury in the United States

is contemplating revaluing their gold holdings. Now they've got tons and tons of gold stuffed away in Fort Knox, and they're carrying it on their balance sheet at $42 an ounce. If they revalued it to current levels, that's about a half a trillion. I mean, you know, that's, what is that? That's about six months deficit in the States, right? But there's all these moves in the States to,

Let's say this. If the extremism and American exceptionalism had got too far, it's possible that this idea that America will never, ever get out of debt, that they're just going further and further and further down a back hole, maybe that idea got too far too, and markets will adjust. But I think it's also, we're going to have a lot of time to talk about this, but we were chatting during the conference that

I think, you know, I'm someone who's been talking about a monetary crisis, you know, and saying we'd start noticing it clearly by 22. How many times do I say we're in a period of historic change? And I think that should be obvious now. Here's my comment. We ain't seen nothing yet. And it's going to be driven by things like you've just alluded to. We have this monstrous sovereign debt problem.

Don't be surprised at the very creative ways they do to keep the system going. Things like you've just alluded to in the States, just revalue your gold holdings to make your balance sheet look a lot better. Well, as I said, I miss gold, but I did change.

And I've been saying this, I guess, that the Canadian dollar was way oversold. Now, we had the biggest monthly rally, and I'm taking February here as if the whole month has happened so far, in eight years. From the lows that we hit, 68 cents or thereabouts, when the initial 25% tariffs on Canada and Mexico came out.

The market here is just was way oversold. Everybody and his dog was short. It's rallied. It's now, you know, the best levels we've seen in two months or so. And what I've done there is I bought the Canadian dollar, not so much that I think Canada is going to the moon. It was just that the U.S. dollar had gone too far and was going to reverse.

A great example of what happens in the market, Vic. I'll invite people to go to victoradair.ca, victoradair.ca. Vic, you go out and have a terrific week. Stay well. Thanks, Mike.

Time now for this week's Goofy Award. You know, the opposition to the carbon tax seems to be a mystery to supporters, well, in the media, academia, political circles. I mean, simply put, people feel taxed to death and don't want to pay another cent for anything. I mean, the original carbon tax introduced in BC was a tax that was used to pay for the

was by legislation revenue neutral. Well, that meant every cent collected by the government had to be returned in the form of tax reductions. Now, I'm not going to go into it, but the BC and Alberta NDP governments, along with the federal government, rejected that idea and kept billions in taxes. Now, this week's goofy focus on the most egregious example. And true to form, the federal liberals just kept making it worse. But I better give you a little background.

When the federal Liberals introduced the carbon tax in 2019, it promised small business that it would rebate 10% of all carbon tax revenues taken from them. But somehow, after five years, $2.5 billion that were owed them, owed small business, well, they hadn't got a cent. I'm shocked, by the way, that carbon tax supporters can't figure out why that might spur opposition.

And after working with the Canadian Federation of Independent Business, the federal government did agree to a plan to rebate about 600,000 small businesses, 2.5 billion starting in the first week of December and told them, well, individual rebates aren't taxable. The federal government said, we won't tax those either. But you know what? They changed their mind or at least the Canadian Canada Revenue Agency did. They decided to tax those rebates to small business.

And not a surprise, that was controversial. And after pressure from the CFIB, the government stated that the rebates for small business would not be subject to tax. But that promise to make the legislative changes never happened.

Why? Because they prorogue Parliament. So the tax rebates to small business are going to be taxed. And making it more confusing, by the way, is the Department of Finance says the rebate is tax-free, but the CRA says, no, it's taxable. And it will tax those small business rebates unless Parliament's recalled and legislation is put in to remove the taxation.

CEO and President of the Canadian Federation of Independent Business, Dan Kelly sums it up by saying, the carbon tax has been one of the most ridiculous files in my 30-year career in public policy. Come on, is anyone really wondering why 83% of independent business owners oppose the tax? Okay, I guess they are confused, at least if you're in the media academia and you're a climate activist.

That's all the time we have today. And just a reminder, man, I was thrilled with what happened at the World Outlook Conference. So many great recommendations, great perspectives on what's going on in the world today. And a reminder, our World Outlook small cap portfolio last year made 43%. We've got several other recommendations that I found fascinating. I took notes through, but you can still get a hold of all that happened in the keynote speakers at the World Outlook Conference.

By simply going to mikesmoneytalks.ca, you can buy the video, get immediate access to it. As I say, I think you've got a good chance of making your money back several times over. I can't guarantee it, but look at the track record. It's been spectacular. In the meantime, hey, looking forward to that Polar Pledge in two weeks and look forward to having you support it. I hope you have a terrific week.