How North America’s stock markets hold up is hard to figure out when the news continues to be negative.  The three biggest threats are politics, consumer spending, and the potential for war in the Middle East.

Today, based on the average price-earnings ratio (P/E) dating back to 1954, all North American stock markets are in expensive territory. The Toronto stock market is the cheapest.  Based on its P/E, investors believe it will take roughly 3.7 years for profits to double, which is impossible under Trump's policies. Using the same metric, the DJIA is priced as if profits will double in 2.9 years, the S&P 500 in 2.7 years, and the NASDAQ in just two years.  This has never happened as far as we know.  The norm since 1954 has been roughly 4.8 years. Take this as a warning. 

The U.S. economy was already heading towards a recession under Biden.  Trump is now sealing the deal with his tariffs, like the ones on the EU beginning July 9^th.  He also told Apple, one of the most successful companies based out of the U.S., to make the iPhone at home to avoid a 25% tariff.  Depending on the model it could cost buyers up to $2000 extra to be built in America.  Trump does not understand consumers have a limited amount of discretionary income and paying any tariff will mean less spending elsewhere.   He must obviously forget that most consumers live cheque to cheque. 

Thanks to his policies, the U.S. is fast becoming a place to move your money out of.  We would not hold any U.S. dollars or invest in American stocks now. They are already over-valued  and the full effect of tariffs have not worked their way through the economy yet. The smart money is already starting to unload their U.S. dollars. This is evident with Asian stock markets doing well when the American’s are flat to down. Asia is not waiting for Trumps temper tantrums to subside and is arranging new trade treaties with dependable governments.  

PM Carney for now has luck on his side because Trump is creating so much trouble.  The world wants to invest in stable and safe countries.  If Carney plays his cards right and opens our energy sector and cuts the size of government, foreign capital flight from Canada will reverse itself. He will build confidence in Canada if he eliminates Bill-C69 which does not allow tankers off our West Coast.  Carney should also be signing up the six countries that want to buy our natural gas. We also need a federal budget today. Instead, we must wait until after the Liberals get  their much-needed summer holiday after working only half the year. 

We can see the Loonie rising to 75 cents U.S. by the new year.  If Trump continues with his stupidity, then we will see an 80 cent Loonie in over a year’s time. This will be good for Canada because a rising currency helps to kill inflation and keeps interest rates low: Both of which attract foreign investment and increase government tax revenue. Stay away from all American securities.  If you own lots of U.S. dollars convert them back into the Loonie.  If Carney does not turn net-zero we predict the Loonie will be worth 75 cents by year end. 

Unless Israel causes a larger war in the Middle East, we expect the world stock markets to be flat to slightly down during the summer months.  It is the fall months that we should be worried about because most of the useless tariffs will be in affect. Only large businesses with pricing power will navigate the storm while many small-to-medium businesses will be decimated.  

It takes years for an economy to unwind and it is better to get out early. To protect your savings, keep most of your funds in insured GICs, with a one-year term, depending on your age. If you are retired and do not have the money to speculate with, cash equivalents should be 60% of your investments, even if rates are low. It is important to remember that the largest gains occur when you wait for the market to come to you.  

We are not concerned about our holdings. Pipelines and oil companies will be volatile, but the good ones will continue to increase their dividend if oil remains the main ingredient in the 6500 goods the world cannot live without. If our recommendations get into financial trouble, it means the public has cut back on spending and all markets will be in trouble. However, companies that have the cash flow to support a dividend always has a floor under their share price.  Carney and the Bank of Canada can hopefully read the tea leaves and smooth out troubles that may occur.  If they do, Canada can become the winner.  

The world has avoided deflation for decades because of falling interest rates accommodate the increased lending needed to keep prices from falling. However, this debt hangover will lead to trouble.  While not a problem yet, banks are nervous about many of their used car loans being worth substantially less. The good news is that Canadian banks are probably safest in the world thanks to the Bank of Canada’s strict reserve requirements set three years ago. If the economy slows during the summer months an interest rate cut will occur in early fall.  Thereafter rates may begin a demand driven series of increases from governments, businesses, and consumers needing to borrow large sums of money to keep things going.  

There is too much speculation going on when Trump’s policies guarantee tough times are coming.  All markets eventually react to the real world and a correction is overdue.  We have no idea when, but they will, so prepare today for market turmoil.  We cannot stress enough, if you cannot afford to lose a big chunk of your savings then do not wait for the correction and begin protecting yourself today.  Like a bull market, bear markets also overshoot because people become scared and try to sell to protect what little is left of their savings. The chart says it all.  Stocks are overvalued and will correct further than people expect.

Chart: Shiller PE Ratio - Multpl

 “No matter if the science [of global warming] is all phony . . . climate change [provides] the greatest opportunity to bring about justice and equality in the world.” —Christine Stewart, Canadian Minister of the Environment, Calgary Herald, 1998 (Chretien was PM)

“I gave a talk recently (on fallacies of global warming) and three members of the Canadian government, the environmental cabinet, came up afterwards and said, ‘We agree with you, but it’s not worth our jobs to say anything.’ So, what’s being created is a huge industry with billions of dollars of government money and people’s jobs dependent on it.” – Dr. Tim Ball, Coast-to-Coast, 2007 (Harper was PM)

The negative effect of global warming is political. The policies enacted for the movement are intended to accommodate an industry estimated to be worth $40b.  Nothing will change with Carney. The new cabinet is filled with climate extremists who should welcome a warming planet.  The Earth’s climate has swung back and forth between a greehnouse gas phase and a glacial one since the planet came to exist.  Large-scale industrialization, and its ‘contaminant’ emissions, has come to be just in the last 150 or so years. If industry was such a large threat, why has the average lifespan of most living things grown exponentially during this period?   

As the earth warms more carbon dioxide is created naturally which in return allows vegetation to flourish. If this was not the case, why would greenhouses increase CO2 levels to over 1000ppm to increase the growth and quality of their products?  Today’s 440ppm of carbon in the atmosphere should be welcomed rather than feared since anything below 200ppm and the earth begins to fall apart.   The average ppm over the last half-billion years has been over 2000 and it was these periods that produced the largest forms of life. Clearly today too little CO2 is the issue, not more. 

Over the last four decades, the Earth has seen an increase in foliage around the planet. The greening represents an area two times the continental United States. Data from NASA satellites shows that China and India are leading the increase in greening on land. While the effect stems largely from ambitious tree planting programs (which the Liberals promised to do but never delivered on) and increased agriculture in both countries, this is only possible because of a warming planet. Farmers are producing  enough food to supply the whole world meaning starvation should no longer be an issue. In fact, most countries have an obesity problem. The fact is there is no excuse for anyone anywhere to go hungry, other than politics.

It becomes tiring listening to the Greens continuingly blaming environmental changes on fossil fuels. Once the supply chain is factored in, renewable energy produces just as many emissions as the natural gas plants they depend on for backup. With recent NG discoveries throughout Africa the world has roughly 300 years’ worth of reserves. The truth is that NG will be one of the cheapest forms of energy for at least the rest of this century. The price will most likely trade between $1.50 and $3.50 and means NG demand can only get bigger.  Furthermore, switching from fossil fuels will make no change to GHG levels.  Covid shutdowns proved this when ghg’s continued to increase while most of the industrialized economies were on lockdown.

Coal is the dirtiest form of energy. It supplies over forty percent of the world’s electricity, is used in 78 nations, and more countries are expected to join the list.   Coal can very easily be replaced by clean natural gas.  If the Climate Clan was legit, they would pressure coal lovers such as China, India, and the U.S. to clean up their act. But they won’t. They would prefer to create a state of emergency over a gas that is responsible for the creation of oxygen. They use fear as a way of raising money for themselves. If they really cared about the environment, they should be forcing the world’s dependence on coal out by pushing natural gas. But this will never happen because there is too much at stake. Just ask Carney.

Canada must hope the Liberals tone down their climate extremism.  We will be left in the dust unless we start to take advantage of  our fossil fuels.  While trying to destroy the market, Carney offers no cheap non-intermittent options.  If he succeeds in shutting down our fossil fuel industry Canada will quickly become a third world country because those African countries with their new NG finds are there trying their hardest to fill the demand. They know it will help bring them out of poverty. Meanwhile, we already have all the infrastructure in place to satisfy demand, but our government wants to destroy this opportunity at the expense of the middle class. It makes no sense.  Natural Gas is the avenue for future prosperity for all of Canada.  Ignoring this is a fast trip to the poor house.

The following is a quote from the ex-professional Greenpeace protester and former Minister of Climate Change who is still chirping about pipelines even though he is now the Minister of Canadian Culture.

“The Canadian energy regulator, as well as the International Energy Agency, are telling us that probably by 2028, 2029, demand for oil will peak globally and it will also peak in Canada,” 

…Steven Guilbeault, May 14. 2025 (Not surprising, Carney is PM)    

He believed peak oil was in the 1990’s. Today, Suncor continues to break production records.  I don’t know about you, but I do not a want a moron like this (or any current Liberal), to dictate, let alone represent, my identity as a Canadian. Sorry Canada! You get what you vote for.

Voters beware! Prior to becoming leader of the Liberals, Carney advised the party that orchestrated the decline of our prosperity to such a degree that was once unthinkable. Imagine thinking that a change of a figure head at the top of a party that stayed 87% the same is the right move for a country already struggling to remain competitive.  The following election is a choice between allowing Canada to become prosperous by investing in the resource sector or maintain the same polices that is crippling our social fabric.      

Who does Carney really represent? In a 2023 World Economic Forum panel discussion about the transition to a green economy, he identified himself as a European before talking about how the EU and US could transition to a net-zero economy. “As a European, I am a European actually. Yeah, an Irish citizen. Speaking as a European”, he said. The guy has also admitted to being a globalist and elitist in an interview before being voted in but added “that that is exactly what Canada needs”. The fact is we had this with Trudeau, and we need the opposite. We need a devoted Canadian leader that allows us to live up to our potential.

Don’t be fooled by Carney cancelling the Carbon tax. This is temporary. He is going to hide the tax by charging industry which makes no difference to prices of all goods because the tax will still be handed down to the consumer via pricing. Plus, it is much easier for him to raise a tax the consumer does not see. Even though it will make zero difference to GHG’s, Mark Carney will maintain an oil and gas emissions cap. He also wants a “carbon border adjustment system” that will impose tariffs on imported goods coming into Canada “if the government decides the countries of origin aren’t doing enough to fight climate change”. Is there even a metric for this to govern by? 

Carney has been advising Trudeau for over five years.  He is a devoted World Economic Forum member who swears by the organization’s Climate Change policies. The negative outcome of these is indisputable. In an interview with the National Post, Trevor Tombe, from the University of Calgary, stated that “if Canada had simply kept pace with the U.S. over the past two years our economy would be 8.5% larger”. He estimated that in 2024, the total gap in real GDP per capita between Canada and the U.S. was about $22,000, in 2015 dollars. Put another way, “real GDP per capita in the U.S. was 43% higher than in Canada in 2023. And in 2024, I estimate this gap will widen to nearly 50%. This means the U.S. is on track to produce nearly 50% more per person than Canada will.”  Destroying productivity is the Carney way. 

Even though countries are stepping back from aggressive climate policies, Carney is doubling down. Straight from MarkCarney.ca, “Canada is investing too little, both relative to the past and compared to the enormous opportunities ahead. For example, Canada must invest $2 trillion by 2050—about $80 billion per year—to become carbon competitive and achieve Net Zero. However, investments in decarbonisation currently run between $10–20 billion annually.” It begs to question how much Carney is potentially profiting from his own climate crusade. Ironically, he has never complained about China, the US, and India’s contribution of GHG. Yet, he is relentless in his attempts to destroy Canada over a 1.5% global contribution that is debatable once you remember Canada is a natural carbon sinkhole because of our forests.

Not only is his climate extremism a threat, but so is his stance on crime. Under the current Liberal platform, which he has made no indication he will change, murderers, thieves, money launderers, and drug dealers are released on bail almost overnight to commit the same crimes the next day. Carney has not mentioned a word about the fentanyl issue even though Trump has spelled it out for him. He has also made no mention of making Canada free from the foreign interference. Why is that? Because it is pretty obvious who the Liberal leaders like to cozy up to. 

Carney will worsen our housing issues.  He has added Mark Wiseman, the co-founder of a lobbying group that advocates for increasing the Canadian population to 100 million, to his council of advisors on Canada-U.S. relations. What will this do to housing?  Across Canada roughly 620,000 houses have been built while the population grew by over two million people. He and the provinces have created a shortage of around two-million units. The Liberals do not want to hear about the poor, nor care how they are to be housed.

Pierre Poilievre’s entire platform consists of stimulating business, allowing resource extraction, expediting projects that allow resources to go to markets other than the US (something the liberal have actively prevented from happening), bringing immigration down to reasonable levels and cutting bureaucracy to bring a sense of stability to our ballooning debt. Carney is now copying Poilievre’s platform, albeit remaining committed to his climate extremist agenda.  And he is getting all the love, according to the polls, although the rallies show a completely different story.

We are in a catch 22% situation. Trump is set to harm the US economy. While his intent is to better the American public, the likelihood that his current actions will fulfil the outcome is doubtful. The US relies heavily on internation finance, and as more countries and international consumers begin to turn their back on America, the likelihood of higher US interest rates and a lower Greenback increases. But Canada has its own conundrum. Specifically, if Carney gets in our dollar will also take a hit as foreign investment will flee our borders.

I believe Conservatives will win, but just in case keep your Canadian holdings to blue-chip dividend aristocrats like on page six of our publication.  We do recommend avoid U.S. securities and convert U.S. dollars into the Loonie because any medium-term returns in US investments can easily be eroded by a weakening dollar.  If Canadians vote smart, then the Loonie will move up to 80 cents U.S. within two years due to Trump and a new Conservative government in Canada.  If not, a 60-cent Loonie will occur before 2027.

Our standard of living has declined due to a decade of Liberal rule. Canada has the best potential in the world. If we do not get rid of the Liberals, Canada will slide even lower economically and socially. A strong new leader will push our dollar higher and it could be one of the most sought after. If we elect the Liberals again, a 50-cent dollar is coming by 2029. Vote wisely Canada.

Our ruling party is beyond hope. Not only was it unnecessary to prorogue Parliament for three months to choose a new party leader who will not stick around if he loses the election, all they talk about are tariffs when the main issue with our economy is our own doing. What Canadians refuse to recognize is that Trump did not create our problems, but rather he has exposed our weaknesses brought on by our own government that the world has turned a cold shoulder to.     

Even if it comes from a crazy billionaire who somehow became President of the U.S., why are we hating on someone for calling us out on our own failures?  It was Canadians who voted for a government that put us in this position in the first place. We accepted a government for close to a decade that refused to acknowledge we are a resource economy,  favoured a few provinces at the expense of the majority, and preferred to spend our tax dollars on issues that do not concern us rather than building up Canada. It was Canadians that sat silent while it all happened. 

We failed to take this to heart and as a result we have allowed our government to enact policies that resulted in poor productivity growth, less disposable income, increased crime, failure to correct our over-reliance on a single market (that has existed for decades), having vast amounts of wealth allocated to non-productive home equity, an inadequate military, and more important, our inability to recognize that Canada is still fundamentally a resource extracting economy.

Rather than change, Ottawa wants to enact tariffs in return. Copying your enemy is stupid and destructive.  Instead, we must get even over the long run. First, we do the easiest which would be remove all trade barriers across Canada.  This should help to keep prices down and it makes it easier to buy Canadian goods at a competitive price. Once this occurs, the priority should be to organize a free trade agreement between the countries facing US tariffs that leaves the US out of the deal.  This would hurt Trump and open new markets for Canadian businesses.

Trudeau could have very easily sold our natural gas to Europe and Asia. They did come begging for it after all, but he is too dense to see the “business case”. The fact they came to us proves these countries would prefer to deal with Canada rather than Trump and the Middle East. Why did Trudeau not take a quick visit to Greenland to offer support to develop their rare earth metals after Trump’s threats? It would create demand for many of our industrial goods and shipping. 

It must be a Laurentian thing, but what do people see in Mark Carney? Contrary to the argument that Pierre Poilievre has not had a “real job” outside of politics, Carney has spent more years than him in the political realm. If anything, Pierre should get more respect because he had to be voted in during his career unlike Carney who was always appointed. What do people see in this man?  I see a combination of Trudeau and our Environmental Extremist Minister in one. 

Carney and Co. will be terrible for Canada. He is a trusted board member of the World Economic Forum which is responsible for the modern-day Climate Change movement that has hurt every economy that jumped onboard.  He proudly coached these economic destroying policies to Trudeau. Like most of the Climate Clan, Carney is a hypocrite. He is against pipelines in Canada but encouraged them in Saudi Arabia and South America from his seat on the Board of Brookfield Renewable.  He is one of those phony Greens who will stop any progress using Climate Change as the excuse if it brings him wealth.

Carney wants to replace the current Carbon tax with one placed on industry only. This will make no difference because the cost will still be handed down to the consumer. He also wants a “carbon border adjustment system” that will impose tariffs on imported goods coming into Canada “if the government decides the countries of origin aren’t doing enough to fight climate change”. Is there even a metric for this to govern by? The guy has admitted to being a globalist and elitist in a recent interview but added “that that is exactly what Canada needs”. The fact is we need the opposite.

Any serious improvement in lowering GHG’s will be achieved by the private sector being allowed to evolve in a timely and affordable manner under reasonable environmental laws.  It is the profits from private industry that has made the largest strides in lowering a carbon footprint. Unfortunately, nothing will change until we replace the Liberals with a  real government.  We need to stop blaming Trump who exposed our weakness as a nation. We are our own worst enemies and must start working at correcting our mistakes. Step one is voting out the Liberals.  If we do Canada could easily be the number one country to invest in. If not, there will be severe voter regret before Christmas.  

 

So how does the global economy feel about Trump? Not surprising, the consensus appears to be uncertainty. While the stock markets don’t appear to be bothered by him, yet, the staples of a healthy global economy are showing fear. The Baltic Dry Index (the blue line) measures the demand for shipping capacity versus the supply of the goods being purchased for delivery.  If demand for goods was legit than the price of shipping would increase in tandem.  But that is not the case today.  

On February 14, 2025, the Baltic Dry Index was 51% lower than a year ago while the CRB Index, which measures a basket of nineteen commodities (the green line), increased 21% over the same time. This tells us that global economy is not stockpiling inventory, and either price inflation or speculation is making up a large chunk of the value of the commodities in the index.  If current commodity prices were a function of physical demand, then the Baltic Dry Index would be spiking as well because the commodities would be on the boats.  But it is not. The demand for shipping has declined.  According to the chart, we are in unchartered territory.  It should be noted that the chart shows it takes a minimum five-years before the Baltic Dry Index spikes again after it hits is lower trading range.

The stock markets have decoupled from reality. The average historical P/E Ratio for the major stock indices is roughly 17-times. As the chart below shows, today, markets are trading in very expensive territory.  There is no justification for today’s value other than speculation.  

P/Es & Yields on Major Indexes | Market Data Center | Barron's

To beat Trump we must steal his business. Contrary to what he says, L.A. will need our lumber for at least a decade and they will always need our energy, which was confirmed in the President's speech to the World Economic Forum when he stated they need to double their electricity supply for AI by 2030, which is impossible.  If not careful, the U.S. economy will be in trouble by year end due to Trump’s backward policies.

I do not believe he wants to impose 25% tariffs on us, or Mexico, but he recognizes how weak our leaders are and wants nothing to do with them. Who can blame him? Perhaps tariffs on his closest neighbours is a strategy to benefit all three countries by forcing an election in woke Canada and a cartel-friendly Mexico because a real leader knows that long-term commitments cannot be trusted when they are signed by those who are weak and corrupt.

Few leaders will ever trust Trump and will try to avoid him, just like they do Trudeau.  This could force the  U.S. dollar lower.  Hopefully by summer we will have a real government in Ottawa and foreign investors will be directing investment monies toward Canada again. Once this occurs,  our Loonie could be worth 75 cent U.S. within two years.  It must be remembered  Canada has more potential than any other country.  It is time we take advantage of this.

In the meantime, be patient in your investing and do not speculate.  Everything is lining up for a major correction.  Continue to favour capital preservation.