By Michael O’Neill

Metallica set the standard for metal bands with the release of Master of Puppets in March 1986. Its ferocious speed and complex arrangements earned it a place in the Library of Congress National Recording Registry, which honors works that are culturally, historically, or aesthetically significant.

Donald Trump embodies the concept of a “Master of Puppets.” He doesn’t just pull strings—he seizes the entire theater, sending marionettes spinning, kicking, and twirling in chaotic dances to the thumping beat of tariffs, tweets, and tit-for-tat diplomacy.

Trump’s distinctive brand of chaos leaves allies scrambling to keep pace. Consider the political turmoil this week in Canada: the tabling of the Fall Economic Statement and the Finance Minister’s resignation. Trump wasn’t even in Canada, yet his influence loomed large, pulling the strings from afar.

Freeland, Freebird

Former Finance Minister and Deputy Prime Minister Chrystia Freeland became the first casualty of the brewing US-Canada trade war—and Trump hasn’t even been inaugurated. Freeland resigned rather than face the fallout of delivering a shocking $60.1 billion deficit in the Fall Economic Statement. This was a far cry from her April pledge to “maintain the 2023-24 deficit at or below $40.1 billion.”

But that was her pledge and not Prime Minister Trudeau’s. According to an Angus Reid poll, 68% of Canadians disapprove of him, which is even worse than his father’s rating at the end of his term. Hence, the expansion of $10/day care, free dental care and prescription medications to seniors and children, and a housing infrastructure fund.

Ms. Freeland never met a dollar she didn’t want to spend in her role as Finance Minister from 2020. But she had an epiphany very recently. She recognized that Trump’s threat of a 25% tariff would be devastating to the Canadian economy and knew that “keeping our fiscal powder dry today, so we have the reserves we may need for a coming tariff war, was a prudent strategy.” The drama teacher didn’t agree, and the budget deficit surged.

As Canada’s Chief Trade Negotiator for the United States-Mexico-Canada Agreement (USMCA), Freeland earned a reputation for toughness. Unsurprisingly, Trump took to Truth Social to comment on her resignation: “Her behavior was totally toxic, and not at all conducive to making deals which are good for the very unhappy citizens of Canada. She will not be missed!!!”

Petrocurrency No More

Albertans have seen the devil, and he is dressed as Canada’s Environment Minister. Steven Guilbeault, a convicted eco-terrorist turned politician is driven by an uncompromising quest to lower Canadian CO2 emissions. While other major oil-producing nations expand production, Canada is shackling its oil industry with aggressive emissions caps, rising carbon taxes, and restrictive regulations. By pursuing this self-imposed economic sabotage, Canada is not only eroding its petrocurrency status but also forfeiting its role as a stable energy supplier in an increasingly energy-hungry world.

The Minister has forgotten, or just doesn’t care, that Canada’s massive resource industry has backstopped economic woes in the past due to its contribution to GDP, employment, and exports. The spike in oil prices in the early 2000s helped Canada avoid the worst effects of the 2001 U.S. recession. During the 2008–2009 financial crisis, strong demand for Canadian oil, natural gas, and minerals from emerging markets like China helped mitigate the impact on the broader economy.

Guilbeault’s obsession risks a Canada Depression.

FOMC Downgrades Rate Cut Projections

The Fed cut its benchmark rate by 25 bps as expected, but the lack of unanimity was not. Cleveland Fed President Beth Hammack wanted to leave rates unchanged. The kicker is that the dot-plot projections suggest just two rate cuts in 2025, which, of course, is “data-dependent.”

However, just as incoming President Donald Trump has roiled government policies worldwide, his actions will likely make a mockery of the FOMC projections. The March 22 FOMC and its new projections are more important, as Fed officials will have had two months to get a handle on the new administration.

Sell The Loonie

Donald Trump said that Freeland would not be missed, but global investors think otherwise. Canada enters this new Trump era led by a Prime Minister whom the American president mocks as a “Governor.” With massive budget deficits on the horizon, Canada’s policymakers may find themselves ill-equipped to handle the economic shocks of a potential 25% tariff.

USDCAD surged from 1.4210 to 1.4340 before breaking above 1.4400 after the Fed signaled a slower pace of rate cuts in 2025.

For Canadians, welcome to 2025, where the currency and the economy dance erratically and chaotically on strings manipulated by the Master of Puppets.