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.