End of the recession?

[afransen]

In effect, reduce debt, although something like the CPPIB would be an effective mechanism for giving a stream of income to help pay for social services in times when the tax base would be strained to cover it. I make the distinction because the CPPIB has managed an investment yield significantly higher than the federal government's cost of borrowing, in which case it might make more sense to invest (or even borrow to invest) than to repay debt, since Canada isn't particularly highly levered in terms of the federal balance sheet.

 

[jade_lee]

http://www.financialpost.com/story.html?id=2165351

Once again the BoC gets it wrong. The current ruling party continues to get it wrong.
Reality bites but sooner rather than later we all have to deal with it! To those who think
the Canadian economy somehow managed to soften the recession blow with our
so called marvelous banking regulation.....think again! When America sneezes it appears
that the rest of the world catches the flu!

 

[urbandreamer]

What comes after V?

Yep, as the $INDU/$TSX crashes this FAll/Winter, the economic outlook will follow....

Small town Ontario is being hit particularly hard. Drive west of K-W (including Kitchener and Cambridge) to see the real impact of high Canadian $+recession.

 

[kEiThZ]

Ahhh, the troll awakens....

 

[Therion]

Well then add me to the troll list. There's another downleg coming, and this time the gov't won't have the money to pull us out. All the bailouts and stimulus did was to delay the inevitable, which is several years of hardship until the U.S. housing market stabilizes (look up Option ARM mortgages and their reset dates), and the U.S. consumer pays off their massive debt loads. There is virtually no growth if you discount stimulus and tax incentives like Cash for Clunkers.

Here's how to make money off of the next swing down: buy US dollars. The CDN is heading back down. There might be a bit of an upswing here to correct for oversold short-term markets, but then we're going bye-bye.

 

[GraphicMatt]

Does the US dollar really have a bright future compared to other world currencies, particularly the Euro?

 

[Therion]

It is severely sold down right now. It may not move a whole lot against the euro, but it WILL move against the CDN, because we're basically a petro-currency. Recession = weak oil price = weak CDN.

 

[kEiThZ]

When a currency is a petro-dollar it is the global economy that deternines its strength not the local one. As oil demand picks up so will demand for the CAD regardless of whether there's a recession here or not. In fact the onset of the Dutch Disease associated with petro-currencies will ensure that we'll have a weak real economy for some time to come despite having high exports (with oil as a large portion)and a high CAD.

 

[kEiThZ]

ps. I wasn't referring to urbandreamer as a troll...

 

[cacruden]

http://www.financialpost.com/story.html?id=2165351

Once again the BoC gets it wrong. The current ruling party continues to get it wrong.
Reality bites but sooner rather than later we all have to deal with it! To those who think
the Canadian economy somehow managed to soften the recession blow with our
so called marvelous banking regulation.....think again! When America sneezes it appears
that the rest of the world catches the flu!

This might surprise Keith, but I actually partially agree with the troll

I think we avoided the worst of the first wave because our banking system was not over extended, but the US is creating a potential situation that is worse than it is now. The US - through trying to extend loans to people that should not have had loans - was in a bubble -- which by definition means the US is living beyond it's means. No politician actually wants to tell it's own population things are going to have to be rough (living within ones means) - so they are spending like crazy keeping everyone comfortable.... at the cost of the future. You cannot continue to run "understated" deficits (i.e. US accounting system is designed to lie to the "shareholders") of 9% of GDP for the next 10 years (actual deficit is much much much worse). Which means the current rebubbling that is occuring is only for a short time.

And yes, our country is the closest to the US. We should be forging more international agreements as quickly as we can to offset our ties to the US - and I would recommend we pursue the ASEAN region first - which is where I will be relocating my company to next year

 

[cacruden]

You know it is funny when it is "communist" (in name only) that is trying to bring the US to it's senses

 

[kEiThZ]

The troll was referring to the banking/economic situation in Canada not the US.

 

[afransen]

Trying to make money from currency speculation seems crazy to me. It's a mug's game.

 

[Therion]

ps. I wasn't referring to urbandreamer as a troll...

Sorry, I thought you were. My point was that since there won't be a recovery anytime soon, the Canadian dollar with lose value along with the commodities that are our main exports. Primarily oil, but also minerals, coal, nat gas, etc. It's my personal belief that oil is overvalued at $80 given the current economic climate, and so is the $CDN. Obviously if you think everything is peachy and we're on our way out of the hole, then oil will not lose much value. I'm not of this opinion.

The timeline is critical, because if the rest of the world starts to raise interest rates the $USD will keep dripping lower. It's a pretty complicated issue.

 

[cacruden]

Sorry, I thought you were. My point was that since there won't be a recovery anytime soon, the Canadian dollar with lose value along with the commodities that are our main exports. Primarily oil, but also minerals, coal, nat gas, etc. It's my personal belief that oil is overvalued at $80 given the current economic climate, and so is the $CDN. Obviously if you think everything is peachy and we're on our way out of the hole, then oil will not lose much value. I'm not of this opinion.

The timeline is critical, because if the rest of the world starts to raise interest rates the $USD will keep dripping lower. It's a pretty complicated issue.

It is hard to figure out what is going to happen, other than the USD will likely soften - where the CAD is in relation - I have not figured out. The US is issuing massive amounts of debt, Japan is not really in a good position to buy a lot of it, and China is beginning to get nervous - which means the US will probably end up "printing currency" - which could cause serious problems a year to three years in the future. All countries that have done that in the past has caused serious inflationary problems down the road. China is working on buying assets (resource based) with the cash instead of US debt now... I don't think anyone can be sure exactly where we will all be in 3 years.