Uppa

Is your life any more affordable?

No, not a trick question. Rents are down 10% in a year. House prices have shed between 20% and a third, depending on location, in three years. Electronics are cheaper. And better.

But we see inflation daily. Food prices seem crazy (and much more to come). The war made gas soar. Insurance premiums are ridiculous. Restaurant meals are a luxury. And have you priced a cleaning lady lately? Sheesh. They must all drive an E-class.

The latest inflation stat comes on Monday. The current rate of 2.8% (which used to be 2.4%) is expected to top 3%. In the States the cost of living increase has soared to 4.2%, driven up principally by the energy shock. Economists are now telling us to expect what happened there to happen here – even though Trump says the war is over.

It’s interesting that when the US central bank governors met to review rates this past week half of them indicated support for a hike. That was a big blow to the White House since the president has openly campaigned for a drastic cut and put his own guy in as chair.

Mr. Market is now giving majority odds for at least one rate increase in 2026. Just months ago we were expecting two cuts.

So wazzit mean for us?

Expect the cost of living to rise, for sure, but it’s a stretch to think interest rates in Canada will follow. Not this year. The economy is still flatlining and the trade deal we’ve had with the US is in deep jeopardy. So more tariff pain is likely. The Bank of Canada won’t tempt fate with a rate increase that could tip us into a real recession. Only Pierre Poilievre would enjoy that.

Mortgages stay about where they are. At the moment you can get five-year fixed money for slightly more than 4%. Variable-rate loans are kicking around at closer to 3.5%.

This is cheap. After all, if the inflation rate’s 3% and you can borrow money for less than 1% more, it’s a deal. No wonder that with a 20% haircut on prices and low, stable financing available real estate sales have been reviving somewhat. As we reported a couple of days ago, the house price destruction may be over.

How about savers?

Sucks. The best bank rate on a fiver is 3.6%, with most of the big guys offering 3% or less. You have to sign up with a dodgy online outfit that may funnel your money into a blood-sucking reverse mortgage for Grannie to squeeze out a 4% return. Even then – unless in a registered account – there are taxes to pay on interest you may not even receive annually. In short, millions of Canadians have billions ‘invested’ in GICs which are now paying them nothing. Less than zip, actually.

Meanwhile, there is little certainly about the big events that have shaped the last few months.

The Iran deal is weak, fragile and nebulous. If it holds, the renegade theocratic regime will win and America lose. Iran stands to see oil revenues flow, sanctions lifted, tens of billions paid to it and hundreds of billions more coming in reparations. Trump blew it. The war was pointless, expensive, ineffectual and accomplished nothing.

Moreover, Israel used Trump then went rogue, Netanyahu is out to scuttle the MOU and may succeed. The US is running out of friends and allies and again this week alienated Europe. In the end, there was absolutely no point in the bombs, missiles and drones flying. Just a more uncertain world.

The conclusion by leading Bay Street economist Derek Holt is withering. “The regime remains in place,” he says. “There remain ballistic missiles (unmentioned in the MOU) and drones aplenty. They hate the West and especially America and Israel even more. They will rebuild their armed forces with help from low places and the spoils of victory.

“There is no agreement on enriched uranium stockpiles other than a vague pledge to negotiate for 60 days or longer. Relations between countries in the Middle East are in tatters. The region is left more unstable than it was before the war. America’s reputation suffered a blow in what is a clear defeat and with truce offering favourable terms to Iran. What, pray tell, was the point of it all?

“But the stock market is up. Like the Dow was in the aftermath of the signing of the Treaty of Versailles. America is conducting its foreign diplomacy through the stock market as ultimate arbiter of future success.”

Yes, the market gained ground through the war, despite oil prices and conflict. Now it’s over to SpaceX, Anthropic, OpenAI, the tech titans and all the electricians and HVAC dudes in Wichita and Fort Worth building acres of data centres.

In war, you save. In peace, invest. This is no longer war.

About the picture: “Here is a photo of our boy, Riley, on his “look-a-like” mat,” writes Terry. “Thank you, Garth, for your daily blog. It’s educational and interesting. We really enjoy reading it.”

To be in touch or to send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/06/19/uppa-2/