Will Economic Policy Impact Your Investments?

July 18, 2024

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In E284B, I dive into the latest trends in the Consumer Price Index (CPI) for both Canada and the US, offering critical insights on inflation, economic policy, and the likelihood of upcoming interest rate cuts. For the second month in a row, the CPI has remained below 3%, with June’s report showing a 2.7% year-over-year growth, aligning with Canada’s long-term goal of maintaining inflation between 1% and 3%. I critique the reliance on interest rates as the primary tool for economic control, suggesting that this approach is flawed and discussing its impacts on the housing market.

The episode uncovers how the CPI decrease is influenced by factors such as lower oil prices, a general economic slowdown, and the impact of interest rates on housing costs. It’s ironic that while interest rates aim to combat inflation, they also contribute to it, especially in the housing sector. I highlight signs of economic slowdown in Canada, including declining GDP per capita despite high immigration rates that artificially inflate GDP figures.

When it comes to the housing market, I present a balanced perspective. Some experts predict a significant rise in housing prices due to high demand from immigration, while others, including myself, foresee potential stagnation due to rising living costs and construction expenses. It’s crucial to focus on positive outcomes and take responsibility for our investment decisions. On a personal note, I discuss my strategic investments in the US market, particularly in glamping and hospitality businesses in Tobermory, Ontario.

I also provide details about an equity raise for my glamping facility and promote the REI Hot Seat deal analysis show, now available on Spotify. I’m always eager to hear feedback and suggestions for future episodes, and I love hearing success stories from listeners. In closing, I encourage everyone to focus on wins and positive developments. Feel free to reach out for more information on investment opportunities and join me on the REI Hot Seat show for in-depth deal analysis and investment strategies.