The Canadian Investor - Why the U.S. Bought Yen and What Canada’s GDP Puzzle Means

Episode Date: August 8, 2026

In this live episode of The Canadian Macro Investor Podcast, Simon and Dan break down the recent intervention in the Japanese yen and why it matters for global bond markets, U.S. Treasury yields, mortgage rates and the yen carry trade. They discuss why Japan and the U.S. may have stepped in, how the intervention worked, and why the yen remains under pressure despite the move. They also look at Canada’s latest GDP data, why the numbers have been so volatile, and whether Canada is heading for a shallow grind or avoiding a deeper downturn through fiscal spending and major resource projects. From there, they discuss the growing AI capex boom, the massive spending commitments from big tech, and what it could mean for energy, infrastructure and bond markets. They also touch on oil prices, Canadian energy stocks, gold’s recent move higher, and why changes to Canada’s population data could alter key economic metrics like GDP per capita and unemployment.   Watch the full video on Our New Youtube Channel! Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

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A stock is not just a ticker. At the end of the day, you have to remember that it's a business. Just my reminder to people who own cyclicals, don't be surprised when there's a cycle. If there's uncertainty in the markets, there's going to be some great opportunities for investors. This has to be one of the biggest quarters I've seen from this company in quite some time. All right. Welcome back to the Canadian Macro Investor Podcast, which we run once weekly on the Canadian Investor Podcast stream.

My name is Daniel Foch. I'm host of the real estate show on the TCI Network, Canadian Real Estate Investor Podcast with my good friend, Nick Hill. And obviously joined as well. I am not, Nick Hill. You're not. No, no. Far better looking than Nick Hill. the wonderful Simone Belanger, who is stock and macro extraordinary, and I'm always excited to have these conversations with you to figure out what's going on in different places around the world. You were going to talk to a little bit about the yen today. I've been trying to get an understanding for the yen, but I feel like I just don't really have like a,

I feel like it's just like not a credible. I kind of like laugh whenever people post about it. It's like, oh, is the carry trade unwinding again, right? So yeah. Like I mean, it's pretty complex. Like I feel like I know a decent amount, but I will give people resources if they want to listen to a podcast that goes into much deeper dive. There's a lot of moving parts whenever you, when you get done to the plumbing of our financial system gets pretty complicated. Yeah.

Yeah, 100%. No, I'm, and what else are we going to go through? And then before you jump into that. Yeah, so we'll go over that. Maybe touch a little bit on the SpaceX IPO. We did talk about it on the most recent episode that was released today for the Canadian investor podcast. But touch a little bit of that. We'll talk a little bit about AI, CAPEX in general.

I think some worries that the commitments have hit over $2 trillion in terms of not only CAPEX span future commitments, but also leases. So that's a number that's been thrown around. Talk about Canadian GDP, which I haven't had the chance to look for me, but I feel like you have. Yeah, there was something like that. I'll differ to you on that. Well, yeah, and it's funny because, I mean, I always just try and tell the truth, right? But, you know, like if I post something negative, I get a bunch of people who are pro-government, you know, saying that I'm biased. And then I post something positive and I get a bunch of people who are anti-government saying that I'm, you know, a shill or whatever.

So, I mean, you know you're doing it right when you piss off people from both sides. Exactly. Yeah, yeah. And so that's what I like. it makes me very happy that I get accused of being wrong or whatever by both, by both sides of, you know, I don't really identify with either political extreme. I think even like people who I would, I'm like obviously more conservative, but I think even people who are conservative in the like more public and like kind of branded sense have lost to like the true meaning of conservatism

in in Canada a little bit, like personal accountability and, you know, they want more regulation and they get upset when taxes are being reduced on certain things. I'm like just confused by politics in this country right now. But even on a personal basis, right? Like I learned, I think I was in my early 20s or late teens and I can't remember who told me, but they said, if everyone likes you, you're doing something wrong. If everyone hates you, you're doing something wrong. If you have like about 50-50, it means you're doing something right. So you either are people-pleaser, you're an asshole, or you're balanced. Well, yeah, and I think the politics side is kind of funny too, because you have like,

you have like these groups yelling on either side. And it feels like that's like the whole population, like that we're incredibly polarized and whatever. But the reality is like the vast majority of people are somewhere in the middle of those two groups and don't spend their time yelling about it on social media. So I think you would probably actually. be more aligned with most people. It's just nobody's like going to take the time to, you know, to tell you that you're sort of part of the lowest common denominator.

So I've always found that kind of piece, funny. It's just like a big yelling match, type it in apps and whatever. Social media is just really, really brought out the worst in us. On a side note, I came back from Syracuse last weekend. I have family over there and Syracuse, New York, upstate New York, very different than New York City. I'll just say that. I would say, yeah, I haven't been Midwest a whole lot, but I think it has violence.

Libes a little bit more than the Midwest. And it's interesting just hearing people, seeing the views. You know, it's when you start talking to people, it's not all that much different than over here. They, you know, people just want to get ahead in life. You know, they want to be able to afford food, afford things, live a good life. People are struggling economically in the U.S. for sure. Yeah.

Oh, yeah. It's more disparate, I think, financially than Canada, right? Like, it's easy for us to say that things are really bad here. And they are, and it's visible in, in most, economic data. But I think the idea that the U.S. is going to have some sort of exceptionalism. Like, yeah, they'll probably scrape by a recession, but it's all just a concentration of capital and wealth moving up. So that's not really appropriate. Eventually that ends poorly. I mean, history would tell us that it almost always ends in revolution. And I mean, the U.S. is the most

armed citizens in the world. So the likelihood of that actually being an outcome would be higher there than other places too. I always joke if I lived in the US I would have a gun. I don't have a gun but if I lived in the US I would definitely have one but let's move on from probably societal and philosophical

topics here. You want to start with the Japanese yen? It's been the toad. Did you see that note whether it was planted or not on Scott Besson's desk? You know, buy 5 to 10 billion of Japanese yen just a little casual 5 to 10 billion

buy right there. So I guess Japan had been kind of like intervening in their currency markets or was it their bond markets? In their currency markets. So I mean they do yield curve control. So let's be honest, they do both. I think the Bank of Japan is the largest holder of Japanese bonds. But yes, this was the currency for those that are not on watching right now or watching the replay. I'm just looking at the past month just to give a visual here of the U.S. dollar Japanese. these yen and of course you can see the big drop off you can see when the operations happen you just see the yen trading around 163 64 and then dropping off like a cliff seems like there was probably a couple of operations here just the way it was actually done and the way the chart looks but yeah

the u.s. intervene i believe from what i read it was the first time since 1998 if i remember correctly something like that so yeah the u.s it's the first time they actually intervened. There was another time in the mid-2010s, but it was actually the other way around. They wanted to weaken the yen. I think it was 2010, 2011, and there were several countries that did that. But essentially the Ministry of Finance, because they're the ones that will do these operations, obviously being supportive by the Bank of Japan. They will sell U.S. dollars and buy Japanese yen. Therefore, you create more demand for the Japanese yen and then strengthening the Japanese yen. So the estimate that I've seen suggests that Japan spent between 36 and 59 billion.

It's hard to know exact figures. And the U.S. treasuries, again, we don't have the exact figure would be 5 to 10 billion if we go with the note that we saw on Scott Besson's desk. If people are not sure, just Google it. You'll see. I think it was taken at Camp David. Again, whether it was planted there just as a way it probably was if we're being truthful. And the, you'll see, The yen initially definitely strengthened from 164 to about 155, but now it's around 158. So we're already seeing it weaken again. Again, if it goes up here, it's just a USD2 Japanese yen. So you're essentially getting more yen for US dollar.

That's typically how people will look at it. So that's the gist of it of what happened. Why would the U.S. intervene? There is a lot of different aspects to this. first of all, the Japan, as I did some reading on this, they will have U.S. reserves and actual U.S. dollars. But for the most part, when they do large interventions like this, they have to sell U.S. treasuries. And then I feel like you know where I'm going with this. If they sell U.S. treasuries, it puts more treasuries on the market and puts upwards pressure on U.S.

treasury yields. And that was likely one of the big motivating factor for the U.S. to actually help here the Bank of Japan, although most, or sorry, the Ministry of Finance, although most of the work was still done with Japan. And what's really interesting here is they actually did not use US dollars to buy Japanese yen. Did you see that? They actually used a euro. So they used euro reserves to make the transaction. Not that the amount that they did would have moved the needle a whole lot. Maybe it was just Scott Besson trying to living his previous life. Have an excuse to get rid of some euro. Yeah, it could be that or just kind of playing games because he used to be a foreign exchange

for-exhaired. Forks trader. So whether the reason or not, that's it. But I think the biggest story there is probably them trying to avoid Japan selling U.S. treasuries into weakness. Because U.S. treasury yields, you know as well as I do, have been rising quite a bit. And if you have one of the biggest holders in the world starting to sell that off to protect their currency, then you can get into some potential issues. So that's essentially generally what happened in terms of the yen carry trade. The yen carry trade, the way it works is pretty simple. You typically just want to borrow in yen and you want the yen to stay stable or weaken with the goal of investing that money typically in the U.S., but it could be elsewhere. but typically in the U.S., you'll collect a higher yield on it because the yield curve is much higher in the U.S. compared to Japan.

So you'll make money as long as Japan does in, the yen doesn't strain. If it started to strain, then you can get into trouble. It sounds like they gave market participants a heads up that this would be happening to avoid anything too major. Like we saw, I think, I don't know if it was last summer in 2024 where we saw the, the Yen-Carrie trade kind of have a mini blow up over there. Yeah, I guess it would be worth like kind of moving this over to how does this impact, you know, like when we talk about bond markets and why are we concerned about this in, in Canada and in the U.S. There's a chart from Hedgeye yesterday. Let me just see if I can share it here. So U.S. mortgage rates hit their highest rate in a year. Yeah. On a 30-year fixed mortgage.

and your refi applications index obviously down pretty significantly. So, I mean, the bond market moves into the credit market pretty reliably. And I think, you know, it's very worth paying attention to in my industry because, you know, in Canada, we have Canada five year. We have CMB, Canada mortgage bonds, which are sort of like a derivative of Canada five year because government's the biggest buyer of CMB. So they almost yield curve control on that. It's like the five year plus 50 bips. I don't know if you knew that, by the way. like they buy 50% of Cmb.

No, I didn't know that. They call it a spread capture. So basically they're like, we'll buy 50% of the CMBs and we'll make the 50-bit spread, right? Because they seem, but which is like fine. It's actually been a decent revenue generating exercise, but I would say like that can't be their sole motivation for buying half of the mortgage bonds in a country. But anyway, so like, you know, your bond yields in the US being impacted by a lot of the

volatility. Canada, I think we're seeing a little bit as well. But is this like, is this a, the, every time somebody, I see somebody, I stop by like even watching the stuff about the, the carry trade on, on Twitter, because I'm always just like, well, like every five days, I feel like some bears posting it unwinding. Is this, is this a credible risk to what's happening right now? Or is it like, is this the one that's going to do it? Or is this them admitting that it's a risk factor?

Or is it like a nothing bird? or like some of the others. Well, I think this chart here, I don't know if you've ever seen this one. Like, it's actually quite a nice graphic from investing.com. So it looks at the yield curve. So you can actually go from six months all the way to 30 years. And they just show it current one month ago, one year ago. And you can tell why the U.S. government is probably a bit nervous about this

because the 10-year yield, because that's a driver for the mortgages in the U.S. So it's up 10 basis point over a month ago and what 30, 40 basis points over a year ago. So that's pretty major. And it's the same thing in Canada, probably not as pronounced here. So yeah, so not as pronounced if you look at the five year. But it's still, you know, pretty significant difference. So you're looking at a year ago about 30 basis point roughly less than it is today and a month ago about 13 basis points. So that's what we've been talking about.

But really cool tool because you can really see the interest differential. And then if you start looking at the Japanese one, this one is pretty interesting, especially if you start comparing it, especially a year ago, there's not much difference from a month ago. The Bank of Japan has been very slow at raising rates as well. But if you start thinking, okay, you're looking at 10-year yields around 2.8 and the U.S. is looking at what, 4.66 right now. So that spread, that interest differential between Japan and the U.S. It is another issue as to why the Japanese yen, like in that traditional sense, is weaker because why would you old Japanese government bonds when you can go and park your money in the U.S. for what 180 basis points more on the same kind of bonds and you're dealing with the reserve currency of the world? Like, why would you want Japanese yen? So that comes down, I think, to a bit of the root cause.

Whether they'll continue to increase, we'll have to see. And a lot of people are asking, like, why aren't they increasing faster? But then you can get into the trouble where the interest on the debt gets pretty high pretty quickly. Right. And then so how does this end for Japan? Like, do they just have to inevitably buy? Because like, why would anybody also pile into like their future of their economy when it's a contracting population? they're not growing their economy through immigration, et cetera.

And I mean, and I think this is an important question because there are several other places on earth that are about to repeat the same path. I mean, I think South Korea has the lowest birth rate in the world. They're also a similar thing. I don't know if a lot of these countries even could grow their population through mass immigration. Like the Anglosphere, I could be wrong and I'm not trying to be like it's not a statement about people's willingness to move to those countries. but it just does seem that like, you know, when people want to go to immigrate somewhere, they're thinking Canada, U.S., Australia, etc. How do all of these places actually, like, how does this whole thing end?

I'm not sure. I've never been to Japan, have you? Like, I've been to Taiwan and it's very eugenious. My daughter always said she wants to go to Japan, so. Yeah, I mean, it's, I just remember, like, I was talking to a friend not too long ago, and I just had this anecdote with I was there like for four or five months in Taipei when I was 21, 22 and I was living in a suburb with this Taiwanese family then there was like it was all Asian people and I remember seeing a black guy and we actually like stopped in the middle of

the street introduced each other because we were like we couldn't believe it like that's how homogenous it is over there just to your point I don't think there's a whole lot of immigration Of course, if you go in Taipei more in the financial district, you'll see more diversity, like you'll see more foreigners and stuff like that. But that's just, it was 20 years roughly ago. So that's an anecdote. It might have changed. But that really surprised me, especially living in Canada where you see all different kinds of culture.

You're kind of used to it. I remember that interaction. Like, we both stopped. And that's how like we just couldn't believe it. Like, that's how homogenous it was. So that's a good point. over there, the other thing with the weakening currencies from the U.S. perspective, they probably, they say they want a strong U.S. dollar, but a weaker U.S. dollar does help exports, right?

And everything going on with the trade war, it could be an attempt as well from the U.S. to try and making sure that those currency are strengthening so that their export are still a bit more competitive. If the U.S. dollar rises, obviously, it's going to make it less competitive for other countries to buy U.S. good. And I don't know if you're old enough to remember that, but John Kittsian when he was in power, people would ask him about the weak Canadian dollar. And he would always say it's good for exports.

Yeah. Yeah, yeah. Yeah, I guess we'll see you right now. We don't really have an export-based economy right now. So it might be a little bit more challenging. Yeah, I think the Japan piece before you, before we move on from that, I find it interesting because, you move it over to the real estate side of things. They have nine million vacant houses in Japan.

And you see this phenomenon happening in other places around the world. You know, you should go to Canada? Yeah, I know. It's funny, right? Like, you know, there's literally houses you can get for $0 in, like, Japan, Italy, many of these countries that are aging at this rate. So I've always thought that was like just kind of funny way for, you know, a lot of people just think about housing.

It's an easy way to think about, you know, a country's economy. And that's sort of like what's on the other side of this great deflation, perhaps that you're seeing. And their stock market also like round tripped from like, what was it, the 90s? Like it just hit its 90s peak. Was it the 90s? Yeah, it had been, yeah, it took decades for it to get back to the peak.

Yeah. On that note, because you were talking a little bit about Canada, exports, et cetera. Should we jump to GDP or is there anything else in Canada that's worth? No, no, I think that's good. I would just, for people interested in learning a bit more on what's going on and the U.S. intervention there, odd lots had a really good podcast on it with someone that was formally at the Fed. So I'd encourage people to listen to that one.

There's also, they'll go into more detail about the FEMA repo facility, which allows countries to actually pledge treasuries and get U.S. dollars in return without actually selling them. So they talk a bit more about that and also the number, the sheer volume of assets that Japan owns in U.S. assets, which probably played a big factor into that. Having cash on hand is essential for any business. Traditional business accounts hit you with high fees while paying little. to no interest on the cash you need for day-to-day operations. That was our experience, too, until we switched to the new EQBank business account. Now, every dollar earns high interest with no monthly fees and no minimum balance. You also get free everyday transactions like EFTs, bill payments, mobile check deposits,

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Your home might be worth more than you think. Find out. how much at Airbnb.ca slash host. So I think that's enough for that because we are on the, we have a hard stop in about 30 minutes. So let's move on to GDP. So is Canada in a new recession or what then? Yeah, so the GDP, I mean, it's only one month worth of data, but I think it was it May.

May GDP was red for Q, like gave us an annualized pace for Q1 or sorry, Q2 of like 3.4% if you annualized it. So, you know, I mean, this would be sure. strong. I don't necessarily think that, like, I think that it's probably an outlier. And, and GDP's tough in Canada right now, because it's like, it's really, you know, to go back to the trade side of things, it's really impacted up and down, like very volatile based on imports being pulled forward, uh, inventories being held and then exports. And so like trade war really does game the GDP curve up and down quite a bit. I thought the other one that was interesting that I'll

pull up a report on was that did you see the stack hand is going to start rolling the population revision through with the non-perment residents, like exit counting. So we can talk a little bit about that. But anything stand out to you on GDP? I mean, it was basically, like, mostly, this is really our push into natural resources, oil and gas, the ring of fire. Like a lot of it is, you know, like mining projects, et cetera, finally paying off.

And hopefully, you know, the government, I mean, Carney's been pretty good at getting it like smooth, even like with his base who obviously wasn't into that. that stuff or maybe maybe more the Trudeau base, but like a lot of the people pulled from the NDP, etc. You know, I'm not people that you would historically say are going to be voting for oil and gas and mining and all of these things. But I mean, you give them a real, you give them real economic crisis in their life. They might just take whatever, whatever they can get if it's going to produce results and it seems to be doing it. So yeah, yeah. I mean, so far like it's hard to disagree

with it. I think, you know, I think a lot of the decisions that he's taking. the government is doing the actions they're taking their kind of lining with what they said and also what the conservatives were saying so you know whether people like it or not depending on what brand it is i guess that's uh that's their prerogative but so far i think it'll be just interesting in terms of what the quarter will look like as a whole because we'll have we'll need june which will probably come out what in like three weeks or a month this one was just july 31st but it's been isn't like correct me if i'm wrong hasn't been like a whipsy saw a little bit on the GDP front so far this year. It's kind of hard to just save one month.

Yeah, exactly. And just try to figure out if it's going in a positive trend or not. Well, even like, even on a quarterly basis, like last year you had up down, up, up, and then down, or down, right? So the last, because we were technical recession. But a lot of like, again, if you're, if you have tariffs on, tariffs off, oil prices up, oil prices down, like, there's so many factors that are going to weigh on on these numbers and just make them, super volatile. I think my greater concern is like if we end up with, you know, not enough of an economic emergency that the central banks are incentivized to do something about it on the interest rate side and you end up with like this long, drawn out like sideways grind like the

1990s, whereas like a shallow recession, but like a really long one. I, you know, my concern, like I don't really care personally and I'm not trying to say that that's my bare case or like to try and be, you know, too much of a. doomer about it, but I think that the, you know, Canadians can't weather a long-term storm that well. Like, we're levered up. We have 180% debt to household income. You know, we're all resetting our mortgages at higher interest rates. If unemployment kind of like, you know, if we don't get to a like a recovery, like the faster, I think in an economy that is this indebted, a deep fast recession is probably the preference for most people, just rip the band-aid off. I think. I don't know what your

thoughts are there. You think they'll allow that? I think they'll just start fiscal spending like crazy. Well, you're already seeing fiscal dominance in both. But it's going to just ramp up, right? They're technically spending like drunken sailors and the economy is like not bad. And the aggregate, you know, it's not probably not great either. It's just, you know, I would say just going on neutral for the time being. What if like it really starts declining? Like, do we really think governments will stay idle. They'll just start fiscal spending and then the central banks will have to monetize it and we'll get into more fiscal dominance. I think to me, they're already seeing it. Yeah, exactly. We're already, I think we're already in a fiscally dominant position where

central banks really can't do that much. Like, look at what the bond market is behaving in, in part the way that it is because governments like are, it's clear that they're going to spend an insane amount of money over the next little bit. And so if I'm a bond investor, I'm like, well, there's lots of bonds coming. Why would I, you know, why would I pay more and accept a lower yield when I know that they're going to need more money to fund a war in the U.S. or fund the AI CAPEX or in Canada fund all of these nation building projects? I mean, I would say that both Canada and the US are very much behaving like, you know, your recession era make work like spending that you would see and like, and maybe they can scrape by by outspending a recession.

just comes with probably with long-term consequences on what we're seeing on the yield curve and then on, you know, on their long-term debt obligations, which are, I mean, I think, I think like the recent figures came out, like Trump has spent 26 or like almost 30% of all money that's ever been spent by by presidents in the U.S. So, I mean, like we're, it's very uncharted territories, right? Like the amount of money, the amount of money supply. And, you know, if you take the MMT, like, look at it, it's like this. But to be fair, the next president, will surpass Trump. Maybe, yeah, maybe.

But, like, very much because of inflation. But I think, well, Trump obviously also had the first bout of the pandemic, right? Like, 2020, that was a tough. Like, that's not easy to, like, I don't know what my response would have been, you know? No. Like, I don't know if it would have been let it burn. And in most cases, I'm a let it burn kind of guy. But I think a penit, like that economic event was a little bit different.

I think most economists are critical, not about the spending that happened. and the stimulus that happened like at the onset, I think most will say, okay, in the moment, I guess, sure. But it's really when the economy started picking back up,

that spending just continued. They didn't really rain it back. And I think that's where governments really plays themselves in the corner. It's one thing to spend it, but they also didn't rain it in when the economy was doing well. And then at some point, you're going to get a downturn. So if you're not going to rain it in when it does well,

what are you going to do when there's a downturn? and you just you put it on overdrive. Yeah. Yeah. Yeah. And I think like Carney obviously has the confidence of being a former former central banker. Like I think he is comfortable trying to play a little bit of central banker role here

on the fiscal don side and feeling like he can maybe land the plane safely and take. Because McClems kind of trapped in what he can do anyways, I think. Like if they, they mentioned it in the monetary policy report. If we cut too much, we're at risk of imported inflation. And the Canadian dollars already devalued pretty significantly. not just against USD, but also against other currencies around the world. And we don't have a big enough export base to really benefit from a much weaker Canadian dollar. But then if we leave rates where they are, or if we hike, which, you know, it sounds like that's pretty much off the table here.

And, you know, Canadian USD or like dollar cat exchange would indicate that the market believes that, that Canada can't follow the U.S. into hiking. you know, we're going to blow out your consumer who is levered to the gills here. Like, you know, and Ben Tau mentions this a couple of times, you know, how he felt that in some of the discussions he'd had with central bankers that like for every rate hike, it constricts credit twice as much in Canada, or sorry, it constricts the economy twice as much or Canadians feel it twice as hard as Americans because we have almost twice as much debt, right? Like the, well, not, well, yeah, I guess it wouldn't be that. far off. I think US is like at almost it's like a hundred percent debt to household income. We probably have more variable debt too. Right. So that's the biggest thing. Even our fixed debt is variable. It's five year variable or three or whatever. Yeah. What a mess.

Yeah. So I think that they're they're limited in what they can do. And I think the fiscal side is just going to keep spending to try and stimulate the economy and hopefully it results in something positive. I like, you know, I much prefer seeing billions of dollars go to pipelines rather. than like whatever, you know, you see this stuff like, you know, gender neutral rice in Malaysia or whatever. Like, you know, I think spending money and good stuff at home is probably not a bad idea. Yeah. Yeah, I mean, I think, especially what we've seen, I think, in the Middle East, if there's any positive thing from that, and obviously I don't want to make light of what's going on there because you don't want to see war going on and people getting killed. But if there's

a positive aspect for it domestically is I think it's waking up a whole lot of, decision makers that we need some more infrastructure for energy and we need to be more strategic, not just energy-wise. I think we've seen it with a Canada strong front and I think the critical mineral, I think I can't remember, but there's different programs they have in place. I think it's really the last, since the war started, but even before that, I think it's highlighted ever since Trump came back into power that we need to be more independent in terms of certain resources and just exporting market as well, more independent and less dependent on the

US. I don't think the dependents will go away anytime soon, but at least building that infrastructure, I think it's a right, it's a path in the right direction to say the least. So anything you wanted to add, did you want to talk about gold though? If you want to jump over to gold, but the one thing I'll mention while we're still on kind of like you mentioned the war in the Middle East and stuff is, you know, I mean, oil prices dropped like pretty significantly. between our last call and this one. But then I think they've jumped back up a little bit, like to 78. I mean, but like to see them at 75 with like a active like war with no end in sight in the Middle East,

I mean, you like we know the U.S. is spending or flooding the market with the strategic petroleum reserves, but they have to buy to fill that back up soon. China has the same thing coming. And then Trump, I think, was quoted saying we may have to send oil prices higher in in the last couple of days. I think that tweets from yesterday. And then the other one that I found that was interesting. Is it a tweet or the truth? It was, no, it was like, I think it was from an interview, but that's like the language that you use.

A tweet, okay. Yeah, but the, where am I? This is an interesting chart that came out from the Cobessie letter on X, which is that, because, you know, you hear oil prices are coming down, but gas prices aren't, right? Like, when we're paying, I mean, fuel inflation was one of the biggest parts. So the, so the, the actual, you know, big oil industry is just basically saying, well, there's a war on. So nobody's really going to, we're going to blink if we just crank a price up for fuel. And if we're paying, you know, lower for it on the input side with the strategic petroleum reserve pricing, basically, flooding the market, they're on track to hit what the third highest on record for profits.

in the second quarter this year. So I thought that was just kind of funny. Because again, you hear about all of these things. And it's like, well, if oil prices are low, why am I paying record high is at the pump right now? Yeah, I know. Well, it's also there's like the spreads that you'll see between, yeah, oil prices, refining.

Like there's more than just. For sure. Yeah, it's a pretty complex supply chain. Yeah, it's exactly. Like we're not experts in that. but I wanted to bring even Suncor came out. I'm just having trouble pulling the data here. And they had like I looked at Imperial Oil.

So if you listen to the podcast today with Dan Cantenai, we talked about Imperial Oil just because we are curious to see how they're doing. And Suncor, I'm just having looked at the quarter here. I'll just show what their profits, but also free cash flow looks like. This is quarterly. So you can see the free cash flow and green profits. in blue. It's essentially the best quarter since 2022. Crazy. Yeah. So these are the two. And this is, it's really important. Like it's,

it's worth noticing because this is the first quarter since the war has been like on for the full quarter because we had Q1, which was just a month's worth. And obviously, I think the market was still getting to use to everything what's going on. But yeah, Suncor, I expect, I haven't looked at Canadian natural resources. They reported, I think, earlier today. I assume they just crushed it on an earnings basis. But yeah, they're, I mean, I own some of these noemes. I think I own Suncor, Sinovis and Canadian natural resources. But yeah, they will be just printing money even at 7580, 80 plus. And with the Western Canadian select being a discount to WTI, they're still printing a lot of money. So it just goes to show that, yeah, there are some,

definitely some windfalls for Canadian companies from this conflict. Yeah. Like, I think that it's, It's plausible if they play their cards right to assume that Canada could avoid, you know, I mean, like, again, I guess we saw the technical recession. But if we, if we're allocating money to the right places in Canada's economy, especially in this sector, like, the war is not going to end anytime soon. I don't think, right? Like, this is, it baffles me at this point. Yeah, how the markets, like, are still seeing these massive swings on news. Like, you're seeing stogs go up because. for the most part, they're just up because oil prices are down. You get news that a deal might be in. And then you start reading on the actual deal. I mean, US and Israel, I think on the 31st, we're looking to like launch strikes. And then Trump decided to cancel it, but he said he wanted a quick deal on Hormuz. Now, apparently, Iran and Oman, that's on the other side of the straight.

They're working out on a deal that would impose probably five to seven percent fees on cargo value. and I guess Oman is pushing for slightly lower, but the issue with that is it would not allow ships to go through because the U.S. sanctioned the authority of Iran, the straight authority. So ships are not allowed to go through and pay those fees. So if they decided to go through, they would actually void their insurance. So you have all this stuff coming out and basically we're still in the spot where it's not looking good. They're trying to work out a deal, but now I saw earlier today.

I'll just, so Iran is warning the U.S. that if they attack them again, they'll start targeting again Gulf nations. Right. And this is earlier today. So that's from Reuters. So it came out earlier today. And it just, I don't know. I don't understand why markets are moving still after what, like the 17th time at this point. Well, I feel like it's just a liquidity thing.

Like liquidity drives the market. Like there's nothing other than that, I think. For algorithms that, yeah, that go based on headlines. But at the same time, you do wonder at some point that like will investors and traders just learned their lesson? Well, there will be a catalyst at some point that I like that I think, I mean, like none of the things that we're talking about are properly priced in. Right. Like oil going to where it should be for an active war in one of the largest oil producing countries. on earth and the, you know, and, you know, active destabilization in the Middle East of all of the

other places that would also contribute to that. I mean, like, this doesn't end with oil prices staying at $75 a barrel. I don't think. I could be wrong, but I don't think there's a precedent for... The counter argument is demand destruction, right? So there's going to be enough demand destruction. And I guess the other one that we've talked about is China being a force kind of raining in its exports for the or its imports for the time being of oil allowing neighboring nations to import a bit more as there's less supply in the market. But how long can that last? Will the demand destruction be strong enough to make up for that supply disruption? There's a whole lot of things. That's the other side of the argument that, yeah, you might have counterbalancing forces

that will push the price of oil. So when we talk about demand destruction, like I think about it as just the consumer. So like what would be what would what would be necessary to make consumers stop buying? But I guess it doesn't really matter if like the biggest you can't have governments right. Yeah. Biggest. Yeah. Like we saw in the US. Yeah. Didn't we see India at some point in the last couple of months impose you know some restrictions on people traveling to work? Yeah, exactly. I think there's a lot of yeah. Yeah, you could have governments doing things as simple as like your license plate ends with like an odd number. You're not allowed to drive on this. day, even number you are and vice versa for the next day. Like there's ways for governments to

start imposing that. So that would be a forced kind of demand destruction. Yeah. Yeah. And then I guess the other thing like it was it was actually fertilizer. It wasn't fuel. But in India, I think they rash they were rationing or like saying that they could they. I think it was maybe in the Philippines or something. There was an Asian country for sure that did that. Yeah. Yeah. That's crazy stuff man. Crazy crazy stuff going on makes you like honestly like pretty grateful to just be in a country like Canada when you hear about stuff like that. Yeah, we're lucky to be, you know, I wouldn't say, I think, yeah, we're a net exporter, but at the same time, we need some infrastructure to get oil from west to east,

because a lot of the east actually gets its oil from the U.S. A lot of people don't realize that, but it's actually, yeah, that's where we stand on that. Having cash on hand is essential for any business. Traditional business accounts hit you with high fees while paying little to no interest on the cash you need for day-to-day operations. That was our experience too, until we switch to the new EQBank business account. Now, every dollar earns high interest with no monthly fees and no minimum balance. You also get free everyday transactions like EFTs, bill payments, mobile check

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Canadian summer getaway, walks along the waterfront, taking our daughter to the public gardens, finding a few good local spots to eat and maybe making our way out to Peggy's Cove for one of those classic East Coast days. And while we're away doing that, our home in Ottawa would just be sitting empty. Summer is a great time for people to visit the city. Ottawa gets a reputation for being a little boring, but between the hot air balloon festival, patios in neighborhoods like the Glebe or Westboro, family-friendly museums, and the nature to explore just across a river in Gatno Park, there's a lot more going on than people might think. Listing our home on Airbnb could let another family experience our beautiful city while we're away and bring in some extra income to put

towards our own trip. Your home might be worth more than you think. Find out how much at Airbnb.ca slash host. What do you want to move on to here? Do you want to move on to population or do you mentioned gold? Yeah, I can touch quickly on gold just because it kind of segues nicely with oil. So it was up 4% yesterday. So was silver.

The price is probably up on a combination of thing. First of all, gold has been hit pretty hard since the start of the war. Iran. A lot of people are just mentioning that it's because you had countries that essentially had to sell their gold to get U.S. dollars to secure some oil. So it puts some downward pressure on the price of gold. Obviously, when you have something that ran up as much as gold did towards the end of last year and early this year, I think that's going to play a big part of it, too, that there's just a regression a little bit. You also have the fact that there is lower probabilities now that the Fed will hike rates. So that would be definitely a bit on the bullish side,

especially if you start factoring in that inflation expectation seems to be rising overall, especially in the U.S., so you have that combination. It's usually not a bad combination for gold because gold is seen quite a bit as an alternative to U.S. Treasury. So if rates stay a bit lower, at least on the short end, so if the Fed doesn't hike rate, so if you're someone that once that's debating between gold and U.S. treasuries or U.S. Treasury bills more specifically, if the U.S. is not hiking rates, then gold may seem a bit more attractive. Obviously, I'm aware that the longhand has been increasing, but that could be another tailwind for a gold there.

And obviously, the U.S. dollar has been weaker. So the fact that's it weaker, gold is denominated in U.S. dollars. So that's a bit of a tailwind for the price of gold, too. Yeah. Yeah, like it is funny when you mentioned like countries maybe having to sell some of their oil to fund the oils or sorry gold to fund oil. It's like this or like all these things like, I don't know, none of this stuff sounds like it gives me the warm and fuzzies for the global. Like maybe you don't end up with a, you know, a made in America recession, but you know, the global economy just gets blown out by this oil trade. And then you have, you know, you have that eventually trickles in.

I mean, this is a long term thing. But I feel like eventually something has to give with what's happening, right? Yeah. Yeah. And the last factor here that's pretty important to you is you're starting to see inflows again from ETFs. So last quarter was pretty big outflows. And then you're starting to see inflows altogether. So but yeah, I mean, countries, the world trades in U.S. dollar, right?

I think that's Brent Johnson's dollar milkshake theory where he thinks the U.S. dollar will remain strong against other current. for a long period of time. I think he gets misquoted all the time because people say like, oh, they assume the US dollar will stay strong against other assets like gold. That's not what he's saying. What he's saying is it will stay strong against other currencies

because, you know, if Dan is in South Africa and I'm in Canada, we're probably not trading our respective currencies. We're going to be trading in US dollars and then converting those to our respective currency you're keeping in U.S. dollars and buying U.S. assets with it. So that creates some structural demand for the U.S. dollars.

So coming back to the goal aspect is if you have countries that just have, you know, they'll have you either U.S. treasuries as reserves typically or gold, while they're going to sell whichever one they can get U.S. dollars for. If they have more gold than U.S. treasuries, then they'll sell their gold if they need U.S. dollars to buy that oil. Right. Yeah. Yeah, I guess then for Canada, like the, would a weak currency for our oil end up being beneficial? I guess we're not exporting enough to really make it a massive.

Like, it's not it. Yeah, I think we're mostly exporting to the U.S., right? Yeah, fair enough. Okay, should I jump into this population thing? I thought it was kind of funny. And I think it's an interesting. Yeah, go for it. This could completely change a lot of key metrics.

I mean, it would explain why GDP's been so strong. There are, like, there, you know, I mean, we've seen emigrant. numbers, right? Like, you know, Canadians are leaving at, I think, the highest level that we've ever seen. Non-permit residents are leaving, you know, the ones who are actually showing up as data points, like leaving and choosing to do so on paper. Like, so they, you know, Stacken actually has the right data point to measure that, are leaving at high numbers as well. But there's this X factor, which is that we haven't been properly tracking exits of temporary or expired visas for since like the new non-prement resident system existed.

And the immigration minister, I think this was like a couple years ago. Actually, this was January when they mentioned kind of the newest like attempt to do this. So this headline here says immigration minister wants department to track exits of temporary residents. And so they've finally gotten around actually doing this, which, you know, you would think like, I mean, in a first world economy with, you know, all of our institutions, we would have had this one figured out a long time ago. but Ben Tau has been talking about this, like this phenomenon of overstayers.

I'm not sure if you're familiar with it. But like, yeah. So I'll see if I can find the original report. But since like, I think it was 2013 when he put his first, first report out. And it actually resulted in Statistics Canada saying in 20, this is 20, 3, that they were going to change the way that they estimated the number of non-permanent residents. And the report link doesn't work here. but yeah but the but basically c ibc had a report out before that where he mentioned that i think he had estimated like several hundred thousand or no one well he had mentioned one point five

million that we were not counting the population properly then and then they added this i'll pull it up on cibc economics but basically that he had added this updated analysis of and i'll stack and did a release on their page mentioning how this like they were going to start doing this and they they expect that this will bias, obviously, your unemployment numbers the most. By adding to the denominator, he has 160,000 in 2025, 100, or 210,000, 26, 27, and 110,000 in 2028. So your unemployment, I mean, I think better dwelling calculated this as unemployment reading should actually be closer to 7.5 rather than whatever it is right now, 6.4, 6.5. Yeah. So your unemployment rate goes up significantly.

And, and, you know, it's like whatever if it's just numbers, but it's not really because when LFS gets released, even though it's reasonably, frequently revised and whatever. Labor Force survey for those not sure. Yeah. Yeah. The labor force, like your unemployment data gets released. It, you know, your bond market reacts pretty, like it does, right? I think it prices in like what the Bank of Canada is going to.

Same thing with inflation. Same thing with GDP drops. So the integrity of the data matters. Happy data. So it gets revised six months later and they don't really react on the massive revision. Yeah, I know it is crazy. So Stadcan has a thing about this.

I got to find the labor force or the population revision. Is this it here for 20? That's not it. But they mention how, oh yeah, it is right here. So they mentioned basically like how there's differences and then they're going to be adding the numbers back, but they use a 12-month rolling average. So we won't actually have real numbers on any of these metrics. So GDP per capita, as an example, could get skewed down if we actually have more people in

Canada than we thought. Your GDP growth could make a little bit more sense if we had, you know, 150 or 250,000 more of Canadians in the country than we thought. So I guess using the rolling average is the reasoning that there's still a big portion of these people that will be leaving. So, well, I think they've just always done it because probably there is like there's significant enough volatility in like certain months. I don't know. Like when international students were like in the, you know, hundreds of thousands, I think there was like at one point like 800,000 international students.

You know, if they all just come in in September and then leave or whatever, you know, just hypothetically. Like, you know, there's going to. It's moving. Yeah. That might be the rationale. I don't know. I mean, it could just because it can politically convenient for the day. data to be spread out over a one year period because it, you know, we, we don't, we aren't

going to see the actual results of this data and how bad it could be. I mean, it might not even be bad. Like, you go back to the 1990s and I'll pull up a population growth curve in a sec while you're chatting, but go back to the 1990s, like, I think Tao, Tows numbers might be correct, but, you know, I think a lot more people just left willingly than people might imagine because, you know, if you're, look, like, take your prototypical. non-permanent resident, right? I'm from India, which was the biggest feeder country during that period of time.

Most non-permanent residents are from that area. They maybe are not, they're working in the gig economy or they were an international student on some crap degree that they got sold by a college recruiter that told them they were going to get a job in permanent residence and they didn't. I mean, why

would you stay, like if the economic prospects aren't really that good? If you're Like, if you're going to have a, you came here for better quality of life. If you're not achieving it, you might want to go back and be closer to your family, maybe have some better weather, you know, intensive community. So it wouldn't surprise me if there were just organic people leaving. It also wouldn't surprise me if a lot of people just stayed and have overstayed their visas and the, you know, the exit data confirms that.

So I'm very interested to see when the numbers come out, what it actually ends up looking like. Yeah, no, it'll be interesting to follow. I think we'll have to wrap it up here. I have to head out for a doctor's appointment. And I'm sure I'll be waiting 15 minutes in the waiting room, but just in case. Got to do it. Yeah. Okay. Sounds good, man. Well, pleasure as always. And yeah, we'll see you all again. Thanks for everybody who tuned in. And we'll see you all again next. I think we're going to keep doing Thursdays. I think we'll, yeah, we'll keep doing Thursdays. There seems to be more people that like that time. And especially with the summer, maybe we'll revisit in September. Yeah. Sounds good.

Okay. Okay. Thank you. I'm a good one, man. The Canadian investor podcast should not be construed as investment or financial advice. The host and guest featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.