I spoke with Andy Bell at BNNBloomberg yesterday about the state of global markets and the cyclical slowdown in a wide-ranging interview. I also got to discuss the disruption from AI and why central bankers are wrong about inflation.
Some highlights:
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Canadian Dollar and Interest Rates:
- “Canada is a country that's really built on housing and immigration, and those two legs of Canada's growth are in deep trouble right now.”
- To that point, TREB today revealed that home sales in Toronto last month were the lowest for any June since 2000.
- “If the Bank of Canada has the wisdom to see a cyclical slowdown in Canada and the rest of the world right now, they will start cutting rates aggressively.”
- “It's a matter of taking your medicine now and accepting the weakness of the currency, and then hoping for economic strength later in the decade.”
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Challenges for the Canadian economy:
- “There's not a lot going on in the Canadian economy right now. We've seen enough numbers now that we can recognize that inflation won't be an issue for much longer.”
- “This is not a good time to invest in Canada or be a Canadian company.”
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Japanese yen intervention:
- “Their currency chief came out and spent about $60 billion to inflate the currency. The market basically deflated it and went to a 30-year low.”
- “The market will continue to buy a dip in the dollar yen or sell the yen on any kind of rally until we see a reversal in global trade.”
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British Pound and UK Elections:
- “The next trade-off on Britain is that it's somewhat of an island of stability. Yes, we're going to make a big change to Labour…but they're not going to make any promises in the way of corporate tax rises or any business. have been.” Unfriendly.”
- “There may be some upside, but the problem is that it's not a very dynamic economy.”
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European Political and Economic Challenges:
- “There's going to be election after election in Europe right now because the winds of change are blowing. It's really hard to see how that plays out in a way that's really coherent.”
- “We have continued to fight, no coherent energy strategy, no coherent growth strategy, or regulation strategy. It just makes the euro very difficult to buy.”
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AI and Deflation:
- “AI will be a major inflationary force. The next thing AI is coming to is heavy industry… It's hyperinflation because workers are pushed out of the workforce.”
- “We're headed for something like 20 percent unemployment. The idea that we're in some new era of inflation because we have a little less globalization is, I think, just wrong.”