Greetings Friends,
We again find ourselves writing from sunny Mexico. Time away with family and friends is why we focus so hard on building our investments and taking control of our financial futures.
While we’re enjoying the sunshine, a ray of hope awaits us and all Ontarians, as an end to the nonsensical, divisive, oppressive mask + vaccine mandates are finally ending. I won’t be holding my breath for a deep investigative review of the effectiveness, or legality, of these and other overreaches. I will be happy to see all of your smiling faces again in public and at backyard bbqs.
At Ontario Assets, we have had a busy February working with buyers and sellers to navigate this strange market and plan for the spring.
After the silly photo below, I’ll outline the signals we are using for 2022 to help our partners and clients exceed expectations…
Now on to the Meat of the Matter: Our monthly highlights of the market and random opinions!
| “The Revolution will not be televised.” ― Gil Scott-Heron |
| Takeaways: Since May of 2020 we’ve written that inflation would be increased when government bureaucrats made the disastrous decisions by to close our economies, and combined with central bank monetary policy (ie. money printing.) More wildly, all this was cheered on by those who either have pensioned security or who were too busy scrolling. Even though any reasonably honest economist knows this currency devaluation is the real reason our purchasing power is cratering, we watch the parrots amongst us cackle the newest nonsense barfed out by legacy media and corporate/government hacks. Yes, the sanctions on Russia will now make it even worse, but our governments were solely to blame for the rampant inflation that already was. News flash, once created they couldn’t have control inflation anymore than they can control Putin. Nearly 30% of all currency in circulation was printed in the last 18 months. With that much new money, chasing the same number (or perhaps fewer) goods, this inflation was inevitable. The BoC dragged their feet on rate hikes for years, before this month’s 0.25% increase. As we’ve stated, we believe there will not be the 7-8 rate hikes as declared by the BoC; likely only 1-2 further 0.25% increases in 2022. This assumption is based on the simple mathematics we’ve harped on for the last 2 years: vis-à-vis the country’s inability to service it’s own ballooning debt if rates were to increase. Any more than 2-3 minuscule hikes nearly ensures a Great Depression 2.0, and it would also be the final nail in the coffin of the dollar as we know it. Perhaps that’s the plan though: Central Bank digital currency anyone? However, there are other regulatory options which may attempt to blow the froth off of the housing market at least. One option is increasing the down payment to 30%-35% when purchasing an investment property or second home. Or they may no longer allow your funds to be a gift or even borrowed against your own equity (eg. a HELOC.) These interventions might have a measurable impact on the runaway asset appreciation…but only for some buyers. However, it will not slow the march of REITS, large wealth funds, and the other major corporate players. These regulatory changes would only benefit the Bigs, just like most of the rules over the last 24 months. Conversely, they’ll negatively effect mom ‘n’ pop landlords and those on the first rungs of the wealth ladder (just like the stress test has done.) Incidentally, it will no doubt exacerbate our existing housing crisis by removing those of us actually creating rental units from the market. Regretfully, I do see these regulatory measures being more likely to occur than rate hikes. I sense the government sees inflation not as a “bug” in the system, but rather as a “feature”; it ensures their Federal Debt will be owed in dollars that are now worth less. Unfortunately it is at the expense of the middle class, via the destruction of our purchasing power and characterized by eroding the quality of life for regular working folks (+ all of our great, great grandkids too.) If you hadn’t heeded the previous calls to protect your future + wealth via safe havens, decentralize your holdings, and develop individual sovereignty, consider this an actual shot across your bow. When the government continually protects themselves and their corporate ally’s interests over ours, it is the death pangs of our social contract. Buy Hard Assets: Create Time + Money Freedom. What a wildly weird world. Randall Reashore Ontario Assets |