Brink of Economic Collapse, Gold Opportunity, TSXV Juniors,
Millennium Index
Brink of Economic Collapse for Canada
Yesterday I was very very bleak on my outlook for Canada on it's present course. I am sure many thought I was too pessimistic and/or don't believe it is possible. I said probably no more election update but this is really an economic one, right from the PM's office.
I have just learned the Privy Council, a special group that informs the Canadian Prime Minister's Office has made the same warning I have. Perhaps that is why PM Carney has announced a huge spending spree. In Liberal government minds, they think they are always best to fix the problem with their spending programs. This is the warning and I highlight a page of the report.
The report warns that Canada could be in such dire straits 15 years from now that property ownership will be generational, post-secondary education will no longer play a role in success, and impoverished Canadians will resort to illegal hunting for sustenance. I believe it will take less time.
The majority of Canadians will “find themselves stuck in the socioeconomic conditions of their birth and many face the very real possibility of downward social mobility,” says the report,
Wealth and status will no longer be earned but passed down through generations.
“Family background—especially owning property—divides the haves from the have-nots,”
Some will opt for intergenerational mortgages in which multiple generations of family members live together.
Post-secondary education will be beyond the reach of everyone except the wealthy and it will be seen as a club for the “elite” rather than “a path to a successful career.”
Elitist attitudes will extend beyond the education sector with people rarely mixing with those of different socio-economic status.
And PM Carney has described himself as an 'elitist' and in the next breath says he believes that is exactly what Canada needs right now.
Yesterday, Conservative Leader Pierre Poilievre commented on the report. “What they are anticipating on the current trajectory is a total meltdown, a societal breakdown in Canada if we stay on the current track,” Poilievre said. “Why this isn’t blazing the front pages of every news outlet in the country right now is beyond me .... We have to unleash a plan for change.”
Sorry Pierre, it is not the right narrative for main stream media.
The Report came out in January 2025 so Trudeau knows it and hence Carney.
This was kept under wrap until yesterday and it is easy to see why.
“If people give up on attaining higher standards of living, apathy could spread to other areas of their lives,” the authors say. “Policymakers may no longer be able to take for granted that people will be motivated to better their lot.”
I bet this is why PM Carney has gone with such a huge deficit spending plan. That said, government is never the solution and this is the same government that brought on this problem. Actually this social decay just might be what Carney and the Liberals want to implement WEF agendas. The only solution is to lower taxes and revitalize the private sector. As I said, there is a sliver of hope with Poilievre's plan.
China Trade War
I think Trump made a mistake going after China so hard. China was prepared. Chinese culture also sees Trump's actions as an insult in the way it was done so got their backs up more. Trump will have to back off some how. I was thinking of possible action against China listed companies in the U.S. This is looking less likely.
And at a swearing-in ceremony for new Securities and Exchange Commission Chair Paul Atkins on Tuesday, Trump said that his administration will “be very good to China” and he will not “play hardball” with Chinese leader Xi Jinping.
A new deal, he says, will not have tariffs “anywhere near” as high as 145 percent. The current tariff rate “will come down substantially, but it won’t be zero,” the president stated.
“They are going to do very well, and I think they’re going to be happy, and I think we’re going to live together very happily and, ideally, work together,” Trump told reporters at the Oval Office on April 22.
Here we go again with typical Trump 'lets make a deal'. He makes big threats, accusations and over the top policy and then retreats back to negotiate something. He just did the same thing with threats to remove Fed Chair Powell, than backed down saying he would never do that.
Perhaps he just wants to keep the cannon fodder headed into the media. The best thing the media could do is ignore him, but their hatred is too deep to do that. The easing back in rhetoric has given gold an excuse to correct.
Gold Correction
This is a buying opportunity, saying many times, the price can't go straight up. We saw a steep $500 rise in a couple weeks so could have a top in short term. I expect consolidation in the range shown.
Central Banks will keep buying gold and selling US$, Trump's rhetoric does not matter much in the longer term.
Yesterday, JP Morgan jumped on list of institutions forecasting a dramatic repricing in gold. According to the bank’s latest note, gold is set to cross the $4,000 per ounce threshold by the second quarter of 2026. Their base case sees a rise to an average of $3,675/oz by Q4 2025.
I have commented that the Bullion Banks were jumping on board and they would bring along their Institution clients and hedge funds. A huge one came on board yesterday.
News hit the wire yesterday that Barrick is selling its stake in the Donlin gold project in Alaska to U.S. activist Paulson Advisers LLC and Novagold Resources for $1-billion Paulson is paying $800-million and will partly backstop the $200-million that Novagold is contributing. Interesting that Paulson is buying into an advanced junior, the sector I expect will start to move up next. Paulson already had a stake in Novagold and is one of the more bullish funds.
After the transaction closes, Paulson will hold a 40% share in Donlin and Novagold's share will rise to 60% from 50%. Donlin is one of the largest gold projects in the world, but its extremely remote location, lack of basic infrastructure and has sat undeveloped for decades. Donlin is very large and contains a gold reserve of 34 million ounces, which could power a mine for 25 years. The project is located 450 kilometres west of Anchorage with no road or rail access.
It would be very expensive to build, but amazing what $4,000 gold can do, that gives it a gross value of US$136 billion. Once these advance juniors move up, the explorers will be next. On the TSX Venture index volume has been increasing and we are still close to my break out target. The steep sell off in the market correction did not show much volume increase, indicating few sellers left.
I have updated the Millennium Index to see how it has done in this brutal market. It has held up to my goal, doing well in even very poor markets. As of today, the index is up +4.7% on the year plus the +4.1% dividend yield.
Millennium Index Selection List - Paid subscribers only
Our energy stocks have been hit hard, but the 3 gold stocks have picked up the slack. I only see Devon Energy as a buy right now. I think it is over sold with the oil price correction because Devon has a lot of natural gas production that had strong prices in Q1 2025 and is holding up a lot better than oil. Devon will announce Q1 2025 earnings on May 7th and I expect they will beat estimates.
All forecasts and recommendations are based on opinion. Markets change direction with consensus beliefs, which may change at any time and without notice. The author/publisher of this publication has taken every precaution to provide the most accurate information possible. The information & data were obtained from sources believed to be reliable, but because the information & data source are beyond the author's control, no representation or guarantee is made that it is complete or accurate. The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action. Because of the ever-changing nature of information & statistics the author/publisher strongly encourages the reader to communicate directly with the company and/or with their personal investment adviser to obtain up to date information. Past results are not necessarily indicative of future results. Any statements non-factual in nature constitute only current opinions, which are subject to change. The author/publisher may or may not have a position in the securities and/or options relating thereto, & may make purchases and/or sales of these securities relating thereto from time to time in the open market or otherwise. Neither the information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein. The author/publisher of this letter is not a qualified financial adviser & is not acting as such in this publication.