Is the Canadian Situation Any Different?

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wfhyslop
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Is the Canadian Situation Any Different?

Many Canadians, including the Canadian government and media, keep saying that the financial/economic situation in Canada is much better than in the US. It appears the Canadian financial system and banks (Bay Street) are weathering the storm better than the US, but the "real" economy (King/Queen Street) may not be. The Canadian stock market (TSX) has fallen at about the same rate as in the US and commodity prices (oil in particular) have plunged. The Canadian dollar is dropping rapidly, GDP is declining, housing starts and prices and falling, and the Canadian government is thinking about bailing out the auto sector in Ontario.

I would be interested in view of others on the situation in Canada and their forecast for the Canadian economy (and dollar) in the short and long term.

Thanks,

Will

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Re: Is the Canadian Situation Any Different?

I am a Canadian who lives in the USA.  In the past month I have moved all my investments into Canadian dollars as trades on the Toronto Stock Exchange.  This is because I have no faith in the US dollar and the economy here will do much worst than Canada in the next 5 years.  The only real issue with Canada right now is that 40% of it's GDP is based on trade with the US.  As US imports slow this will hurt Canada's GDP.  As for Canada's weak dollar, this is because CDN dollar follows oil price and oil is now at $55us/brl (due to perceived weak oil demand and strong US dollar).  Compared to last summers high of $140/brl and the dollar being 1.2 USD, the CDN dollar has fallen 30% but oil has lost 60%.  Considering that, the CDN dollar has done quite well.

Why I like Canada:

1. Its banks maintained old-school policies where it didn't securitize and sell its debts like US and European banks did.  The banks therefore kept enough capital to cover the loans they made, making them stay solvent.  Their lending policies have been conservative and the Canadian banks are now reported as the strongest in the world, as reported by TD bank.

2. Canada has not experienced a housing bubble as in the US and Europe.  The bank of Canada has kept a modest interest rate and banks did not lend out risky loans to people that didn't have jobs.  People in Canada that buy houses can actually afford them.  Also, Canadians are liable for their mortgage debt.  In the US if you stop paying your mortgage the bank will give you a notice of default.  If they can't rework your loan they sell your house at current market price.  If they get a price less than your mortgage then you aren't liable for the debt difference.  Due to a bill passed by G.Bush last Dec you are forgiven on all that debt that wasn't paid back by the sale.  This promotes people under water on their houses to just stop paying.  In Canada you are not forgiven on any debt.  THerefore I don't think the housing market will crash.  THe market has softened though.  This is mainly in places like Edmonton where house prices were high due to Oil money in Fort McMurry.  Now with oil down 60% and new oil-sand projects/developments getting cancelled people in oil and oil related business are hurting.  As a result you will see house prices come down due to their inflated prices during the inflated oil economy.

3. Canada has a balanced fiscal budget.  When oil was at $100/brl they had a budget surplus.  They do have some debt but that debt has been reduced by payments on it.  With the current slump in oil prices the gov't may have a fiscal deficit in the next year, but that will change when oil goes back to $80-90/brl.  I expect higher oil prices next year.

4. Canada has a trade surplus.  This means it sells more than it imports.  This means the country makes money and is able to build a cash reserve for investment or stimulus packages.

5. Canada doesn't have a mountain of debt for its social security (aka Canada Pension Plan) or Medicare.  The US owes its citizens on the order of $45,000,000,000,000 for these entitlement programs.  Canada won't be defaulting on any of its debt as the US will be doing in the coming years.  When the US devalues its dollar I am hoping the CDN dollar is not simultaneously devalued.  Word is that all countries may devalue their currencies simultaneously in order to discount the world's debt burden.  I would still buy some gold if I were you.

The GDP in Canada right now appears they may avoid a recession.  I still think recession may occur, but it could be short lived and not deep.  In contrast, the US recession may become a depression and last several years.  When I say depression I mean people taking their earnings to pay down their debts rather than spend it on crap imported from China.  This will depress the economy here.  THis is what the US gov't is trying to avoid right now, by trying to push more credit on the over-debt-burdened consumers.  It's not going to work.

Because Canadian gov't does not rely on debt (selling gov't treasuries) for day-to-day and annual operations it doesn't have to worry about interest rates as much.  The US must sell ten's of billions in US t-bills to fund its operations.  China is now the biggest consumer of US debt.  Now that China has a 500 Billion bailout package on its table it, like all the other countries, now have stimulus packages to fund.  They will likely use their US cash reserves (accumulated due to trade imbalance with USA) to fund their stimulus packages.  That means fewer US dollars to recycle in buying US treasuries.  This will force the interest rates up on US t-bills.  This is more financial burden on US gov't.  To keep interest rates low the US gov't will print dollars to buy its own t-bills and this is like a snake eating it's tail.  This will destroy the US dollar.  If the gov't doesn't do this then the US will have to deal with high interest rates while trying to climb out of the worst recession/depression since the great depression.

For the above reasons, most of my savings are now in CDN dollars and due to future interest rate problems and potential for higher taxes in the US I have my investments in Canadian companies.

(Edit:)  It wouldn't be too worried about a weak CDN dollar.  This is very good for companies in Canada that need to export.  It makes the goods cheaper to other countries.  Conversely, a very strong US dollar is bad for the USA right now.  It makes American exports expensive for everyone else. 

Also, the US dollar is only strong now because everyone has to convert their assets to dollars to pay off their US denominated debts.  When all this deleveraging is over the US dollar will fall like a stone.

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Re: Is the Canadian Situation Any Different?

bearing01

In light of your take on Canada's economic situation, what would you recommend an average American, like myself, without vast sums to invest or shelter, do to either protect his asset value or invest in Canadian enterprises?

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Re: Is the Canadian Situation Any Different?

 

Right now the banks aren't paying enough interest to cover inflation.  There is a risk of the US loosing its high credit rating and the dollar becoming hyperinflated once this credit crunch is over.  Saudi-Arabia and Iran have recently purchased billions of dollars in gold.  I believe we could be on the eve of US dollar collapse.  Maybe... maybe not.  If you want to go the least-risk path then I suggest taking at least 1/3 of your savings and buying gold.  Not jewlery.  But physical gold bullion.  If you have a brokerage account and do stock trading I have bought some Canada Central Fund (ticker = CEF) which is ownership of a fund that is 90% gold and silver bullion that is stored in an underground vauld in the Canadian Imperial Bank of Commerce.  I like it because you can get it at around $9 per share and it is in canada.  It also qualifies as a mutual fund investment for tax purposes.  I also own some of SPDR Gold Trust (ticker = GLD) which is American.  Both of these are not as good as posessing physical bullion because these are someone else's liability to pay you. I have more faith in the Canadian one though.

My focus is to own valuable assets rather than hold US dollars.  My focus has been buying shares in Oil companies with low debt and a long history that are profitable with $50 oil.  I also own mining and agriculture stocks.  As prices tank I am buying more.  However, don't spend all your money yet.  Take small bites during the down days.

I recommend you read both books by Peter Schiff.  You can get them on Amazon with free shipping.

http://www.europac.net/

The "bull moves in a bear market" is  basically an update to the first one "Crash Proof"  If you want a quick read then get the bull moves one.  If you want more depth of today's economic problems then get both and read Crash Proof.  This will help inform you on what to do with your money.  Basically the message is get out of the US dollar and buy foreign stocks on foreign stock exchanges.  Low risk Conservative stocks that give good dividens.  That way you get paid to hold the stock (more than the 1% you get at the bank) while the stock market trades sideways for the next couple years.  For this reason I too like Canadian energy income trusts or Utility income trusts that pay a healthy 7% to 15% annual dividen. 

As for some good Canadian stocks traded on the NYSE you can investigate:

Suncore (SU)

Agrium (AGU)

Potash (POT)

Barrick Gold (ABX)

Silver Wheaton (SLW)

and for the energy trusts you'll have to go to the TSX for that.  Some of the ones I own that I would suggest you look at are:

SIF.UN (utility for nat-gas distribution to peoples houses. No one's turning off the heat anytime soon)

YLO.UN (yellow pages, not an energy trust.. but should be recession proof)

COS.UN

Another I plan on buying in the future are:

VET.UN    <this one is quite conservative and the dividen it pays out is a lower fraction of its overall cash flow.  Therefore I believe there isn't risk to the dividen being cut.

Ones I am investigating are:

ERF.UN

NAE.UN 

To get these income trusts (*.UN) you'll have to trade on the TSX.  You'll need a brokerage account that allows global trading / to convert US dollars to CDN and then trade on the TSX.

Husky Energy is also a good integrated oil company I own with many deposits across Canada. You'll have to go to the TSX for it.  It's HSE (or HSE.TO on yahoo.)

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Re: Is the Canadian Situation Any Different?

I am glad that the Canadian topic is generating some interest on the CM site, very hard to find this kind of info on Canada. I live in Calgary, Alberta and used to work (up until last year) in the oil & gas sector working on a variety of projects and have some views that from the inside that some may find helpful.

 I agree that bearing01 is correct in saying that Canada is better positioned than our neighbour (certainly in terms of our government debt and financial institutions) but I think there are still some serious concerns up here and I am personally bracing for some challenging times at least for the next couple years. Here are the following reasons I people still need to be choosy when looking to invest in Canada.

 First, as we do export mainly to the US, demand for the canadian products from the US are going to fall off a cliff, we of course will not be sheltered from the consequences. Ontario, our most populous province is going to receive for the first time ever, equalization payments from the federal government due to a crash in the manufacturing sector. I do expect that in due time, those raw materials and products will be sucked up by the rest of the world as we do live on a finite planet and the demand for resources will remain and grow but is going to hurt for a while.

 Next, we have had a housing boom in Canada, although maybe not as great in the US, but here in western Canada we have seen an explosion in housing volume and prices. Our house in Calgary doubled in value in less than 2 years, prices are coming back down substantially (about 10-15%) but I think they have much further to fall. Even in small towns in BC that have no connection to the oil market have seen there property values increase over 100% in 2 to 3 years. And we do have the same consumer mentality here where people have refinanced their homes many times sucking out all of their home equity to buy cars and vacations. Many people I know have more than one house, (some rent one out others have a vacation house or condo) because everyone wanted to cash in on the increase in property values, not so great now that property values are decreasing. The home builders have thousands of houses vacant and can't sell so we are hearing "no money down and pay less than your rent" all over the radio just to get people in the door. I don't think people can commit mortgage fraud easily but a lot of people will be hurting if the property prices drop much more.

 The biggest thing I see though is the oil and gas boom that has fueled our surpluses and prosperity. I worked on many of these project and I don't see how most of these new projects have positive net energy. The crash course demonstrated this beautifully, the quality of the resources are diminishing greatly and the oil and tar sands of Western Canada is the perfect picture of this. They have to remove 2 tonnes of oil sands in order to get 1 barrel of oil. They are pumping 2 to 5 barrels of water into the ground never to be recovered again in order to get 1 barrel of oil out of the ground. It doesn't stop there either, then they have to upgrade and refine the product numerous times before it can be used. People often quote old stats saying that the oil sands become profitable around $60-70 mark but I don't think the quality of the resources is getting better (we always go for the best and easiest first) and the costs to recover the resources are mounting. If we ever get real environmental controls (water, emissions, land reclamation) implemented these vast resources will be bust. The only hope I see is if they can find a real sustainable technology to get the oil out without destroying everything in its path...it is a complete mess up north and there is a major resistance to more development from locals and Aboriginals. I worked on a high pressure sour gas pipeline project that ran through some small towns and we did a lethality study on it and if there was a significant leak people 30kilometers on either side of the pipeline would need to evacuate and over 500 people would die...would you want that in your backyard? that is the kind of resource is being pulled out of the ground and what much of Canada's prosperity is built upon, something to think about.

 Well that is my take on things up here...I have a degree in risk management in finance, good to see it coming to use, albeit not in the way I thought it would.

 

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Re: Is the Canadian Situation Any Different?

There is another Cdn fund for those interested in bullion.  It's called the Millenium Bullion Group and offers a RSP eligible mutual fund that holds fully allocated (real) bullion (equal portions of gold, silver, platinum).  The bars are kept by the Scotiabank.  They also have a new program for bigger investors to buy whole bars and they store it.  If you want to "own" the actual metal, it's a good plan.

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Re: Is the Canadian Situation Any Different?

My wife is Canadian and we are currently living in California.  We've been talking about moving to Canada since we learned about PO, so this is something I've thought a lot about.  Thanks to bearing01 for the excellent summary of the differences between the US and Canadian economies.  That was more or less my "sense" of it but it is very helpful to have it laid out so clearly.

 

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Re: Is the Canadian Situation Any Different?

bearing01

Thanks for the info.  You've given me a lot to look into.  I was already looking into Schiff's books.

 

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Re: Is the Canadian Situation Any Different?

I'm Canadian, been in USA for 11 years, Wife is American, we have two young boys. I've always had a sentimental desire to return to Canada, before marrying an American I assumed I'd be down here five years, max.

Have the unfortunate double-whammy of hitting my midlife career crisis at the same time this other stuff is hitting the fan; weary of my 20 year career in software, but know I can't possibly change my career without cutting my (ridiculous) six-figure salary in half (at least). I see people doing "real, significant work" making a fraction of what I make and feel like crap.

Anyway, that's my personal albatross :-).

Anyway, I also wonder if getting my family to Canada would be a good move at this time. Closer to family, somewhat healthier economy, though ultimately still most of the same flaws and inexorably tied to the fate of the USA, I fear.

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Re: Is the Canadian Situation Any Different?

"There is another Cdn fund for those interested in bullion.  It's called
the Millenium Bullion Group and offers a RSP eligible mutual fund that
holds fully allocated (real) bullion (equal portions of gold, silver,
platinum).  The bars are kept by the Scotiabank.  They also have a new
program for bigger investors to buy whole bars and they store it.  If
you want to "own" the actual metal, it's a good plan."

 

I work for the above company Bullion Management Group. We are having a webinar December 10th with Chris Martenson as the speaker.

For the Americans on here you need to get money into physical bullion and have it stored outside the country. We can do this. Close to spot prices, stored and insured. The USD is going to collapse, if you have interest in 32 oz bars 100 oz, 400 oz bars respond and I can get in touch with you. The company is A-rated, out fund has been around 6 years. But the big bars are new and an excellent way for you to protect your wealth outside the country and outside the governments ability to confiscate the bullion.

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Re: Is the Canadian Situation Any Different?

 

bearing01

I agree with your detailed assessment of the Canadian situation as of Nov 19. Since then a couple of major banks have announced large writedowns and have had to raise capital. Commodities, especially oil, have continued to fall drastically. Also we now have our "coalition" talk and possible political instability for a while.

 Has your assessment changed due to recent developments in Canada?

Will

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Re: Is the Canadian Situation Any Different?

To make it easy for search, the official name is "BMG Bullion Fund".       http://www.bmsinc.ca/index.php

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Re: Is the Canadian Situation Any Different?

Great post!

I am an American but, likewise, married a lovely Canadian. We do have one child, and currently live in the United States. We own a somewhat small dry-farm (4,700 acres), but are thinking of selling it and moving north.

I also trade foreign currencies full-time and have been trading for many years now. I enjoy the lifestyle but know that currencies may see a dramatic shift sooner than later.

CAD (Canada dollar) is currently weakening, as those above have stated, because of the lower priced commodities. CAD is heavily linked to commodities but not entirely. It does have its own movements from time to time, and I do believe it will outperform the USD (US dollar) over the longer period.

The USD is eventually doomed. We can all see it, but for now . . . the USD will reign supreme. How long? Could be a few months or it could be a couple more years. As a swing trader, I am only in the currency market for a few days (if not hours) at a time. Therefore, to quickly liquefy holdings of USD would not be difficult. However, the CAD, in the long run, is a better choice.

I also suggest purchasing Canadian Maple Leaf gold bullion versus heavily invested into American Eagles seeing there are tax implications in owning Eagles versus Maple Leafs.

All in all, I think this is great post. I understand these comments are bit later than those above, but I do believe the northern government will outperform us southerners . . . although some difficulties in the south may bleed into the north just a bit.

Wasn't it during Christmas that Canada promised the auto-makers billions of dollars? Alberta's surplus was absolutely INCREDIBLE . . . until they started pulling funds to begin giving it to the auto-makers.

Canada or United States? Canada.

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Re: Is the Canadian Situation Any Different?

Yea,

GM has something like 17% in Canada and this was the percentage that the Canadian Gov't was pledging to bail out GM - to commensurate with the US gov't bailout.  Canada's Prime Minister (conservative party) is/was an economist.  He was against these bailouts (which he should be).  Right now the party in power is a minority party, meaning that the other parties are free to call an election anytime they want - or they can elect to overthrow the party in power with due cause.  Because the Prime Minister (Steven Harper) wasn't bailing anyone out (relying on sound economics to allow a proper correction to occur to allow the economy to rebuild on a sound footing) the other parties ganged up on him and tried to over throw him.  Harper managed to shut down Parliaments just in time.  Now Harper has to disgracefully bow to the other parties and print money / tax Canadians to keep a select few favoured unsustainable companies operating as zombies.  This is bad economics, but what politicians do when their position becomes threatened.

News out yesterday that Canadians now have as much personal debt as what Americans did in 2006.  Fortunately Canada doesn't have subprime loans or a securitized mortgage scheme that enabled a tremendus housing bubble like the US. There will be a housing correction but nothing like here.  I do forsee Canada coming out of this depression before the US.  They are producers, Have oil & other commodities and the Chinese are hungry.  News today is that they expect China to be the first to pull out of this recession/depression.

If you own a farm I would not sell it.  That would be the last asset I would sell if I owned anything.  Absolutely keep the farm.  Jim Rogers claims that the next boom will be in farming.  He claims that Wall Street bankers will be either driving cabs or should learn how to drive tractors.  The Farmers are the ones who will be driving Lamborghinis.

interesting:

http://www.digitaljournal.com/article/265899

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Re: Is the Canadian Situation Any Different?

Hello

I would like to disagree with the fact that Canada will fare much better than the States.  I think our own government uses fuzzy numbers, just like our neighbours, to lull us back to our T.V. shows and video games.

Our banks are more stable, yes but our economies are quite linked like others have posted, and there is no disconnect switch at the border. I believe that the US has more money invested in our Oil patch than Canada does by a long shot and they are all shutting down to some extent. Last year at this time the Carpenters hall in Edmonton had calls for hundreds of journeymen, not to mention apprentices.  Last I checked, there are calls for about a dozen combined JM and apprentices.  Boom and Bust is the way of life in Alberta, and if we only had to worry about one "E" in the equation then just wait it out.  I was working in Fort McMurray when they pulled a 2 mouthed fish from the river and of course it was down played as a normal mutation.  I won't even mention what plant I was working at where I met a person from their "enviromental" team.  His job (and his crew), was to get rid of the bodies before real enviromentalists, or Enviroment Canada found them.

Like Woodsie, I lived and worked in Alberta for the last 12 years, and have travelled there on and off before that to work.  During the last 12 years I owned a construction company in Edmonton for 7 of those years and shut it down when the housing market obviously began to flop.  After that I worked on a variety of oil projects including Suncor Voyager, Opti-Nexen's Longlake project, CNRL (that was scary), PetroCanada, Shell, Agrium, in Fort McMurray, Ft. Saskatchewan and Edmonton.

On my last job, Suncor Voyager had a lot of money invested in the secondary upgrading portion of the project, and just shut it down. Keep in mind, most of the projects were estimated and planned to make money at $45 a barrel. So something has got them scared.

If you take into account Peak Oil, climate change, and world economies sinking, I think that the only real safe investment is in a good practical education, having a garden that you can feed yourself, and have a trade or skill that others find of value.

 

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Re: Is the Canadian Situation Any Different?

This thread needs some resurrecting IMHO....

I second the notion that we are ANY better off than the USA...we are not...we are just delayed by 2-3 years...its standard.

 

I just saw a great graph on BNN (BUS NEWS NETWORK) that showed the deficit spending both above and below the border....the 2 countries are in complete lockstep......in many areas Canada is worse off

We have by FAR the biggest subprime housing bubble on the planet

We are an export based economy and right now the only game in town is oil and mining......but I do not believe any longer that oil prices will do what so many in the PO camp tend to think,....that is RISE.

If one does a bit of research on other "non-renewables" that have been exploited to commercial extinction (whale oil is a great example) one finds that following an initial price spike...prices flatline as the resource dissappears.

The world economy will NEVER tolerate oil prices above 100.00 per barrel for long enough to effect recovery....it is not possible now....

High cost deposits (Re: canadas Tar sands) will NEVER be the great economic driver that all had hoped for.....

thus I am very pessimisstic in the short to medium term for Canada....we will enter the abyss this summer with the rise in interest rates and the subseq collpas eof the housing bubble.....when this happens our "economic recovery" will be exposed for the sham that it is.......

 

 

 

 

 

 

 

 

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Re: Is the Canadian Situation Any Different?

Does anyone actually visit this site anymore? :)

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Re: Is the Canadian Situation Any Different?

I read this thread with great interest. I sold my house just as the market began to fall and now I'm sitting on the cash from it, hoping things will crash at such a rate that I can purchase some land with the money. It's not enough money to purchase land with house just yet, and barely enough to purchase a substantial (i.e. >2 acres, which is what I need to support myself and family on) chunk of property, if I could find it, which I can't in the area I want.

So I'm focused on the rest of it, honing skills, community outreach, etc. It's a waiting game.

In the meantime, I worry a lot about the cash just disappearing if some kind of bank failure or hyperinflation begins here in Canada. I'm hoping that I'll have some warning (a few weeks or months) by watching carefully what happens in the States. Meanwhile, I just worry and stay hypervigilant.

I wish the property/housing prices would crash faster here. I could just buy the land, plant the food forest, and get to work on community resilience projects like urban farming.

Can you recommend a good news source to pay attention to to be prepared for financial catastrophe in Canada?

thanks

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Re: Is the Canadian Situation Any Different?

I'm tuned in to this channel from Ottawa.Laughing

I've mentioned it a few other times on this site but a great Canadian perspective can be viewed at Garth Turner's blog (focused laregely on real-estate). Just a few days ago he posted one of his clearest forecasts. Plenty of good commentary there and links.

check it out at http://www.greaterfool.ca/2010/01/27/the-disappointment/

 

I've recently started following The Automatic Earth at http://theautomaticearth.blogspot.com/ which is authored by 2 canadians.

 

If anyone here is in the Ottawa area there are a number of groups to look into many of which you might be able to connect through Transition Ottawa. I also co-host a monthly discussion group where we talk about everything regarding peak oil, the economy, food security and permaculture. Send me a PM if you're interested.

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Re: Is the Canadian Situation Any Different?

I post a fair bit on the afterthecrash.ca site....some smart cookies over there but a lot of head in the sand types as well.

I am very interested in the Canadian situation as it relates to the USA and the world.  I think that the USA is heading for hyperinflationary depression...indeed they are in a depression right now and the "type" is masked by confusing signals.  The forces right now are deflationary....but there has been massive stimulus....and there will be much much more of the same.

The CDS market scare the cr.. out of me they are just so enormous that I have trepidation about the ability of even money printing to offset the effects of a failure of a market many times larger than the entire earths GDP....as the next wave of mortgage defaults hit the usa this summer we will see a concommitent failure of the underwritten CDS in that sector as well.....

Hostorically hyperinflation does not cross borders so theoretically Canada should go into a deflationary depression while the USA goes the opposite...but I cannot see the Canadian Govt sitting idly by watching our dollar appreciate say 10,000 % against the US dollar....so money printing seems to be logical....

 

the really wild thing is that it is now a worldwide phenomena......can one even have a worldwide hyperinflationary event???..it doesn't make sense???

I am hedging these days big time.  Homestead in Western Canada (in the process off trying to settle the deal), gold silver investments,  tangible assets......no debt.......trying to find like minded folks to partner up with (thats the hard part honestly)

 

 

 

 

 

 

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Re: Is the Canadian Situation Any Different?
knucklewalker wrote:

I post a fair bit on the afterthecrash.ca site....some smart cookies over there but a lot of head in the sand types as well.

Agreed. There seems to be a lot of people just there to figure out how to make/save a buck on RE and not much talk on limits to growth. I'll keep an eye out for your posts.

knucklewalker wrote:

the really wild thing is that it is now a worldwide phenomena......can one even have a worldwide hyperinflationary event???..it doesn't make sense???

It's hard to wrap one's head around that. I guess that's why I keep coming back to sites like this to try and keep a few steps ahead.

knucklewalker wrote:

I am hedging these days big time.  Homestead in Western Canada (in the process off trying to settle the deal), gold silver investments,  tangible assets......no debt.......trying to find like minded folks to partner up with (thats the hard part honestly)

Doing the same here. It's hard to find likeminded folks or to keep your existing friends who aren't interested in the red pill. You start talking about global energy depletion and the common response is always "canada will be fine with our wonderful tar sands".

cheers
r.

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It's been a while since

It's been a while since anyone's posted in this thread, but I'd like to add the discussion in the hopes that people might come back.

Lishui, I am in a very similar situation to you. In fact, I could have written your post word for word. I'm glad that I'm not the only one trying to prepare. I sold my house last year, paid off all my debts, and am now sitting on the cash from the sale in the (vain?) hope that I can cash in on a property when the property bubble bursts here. I check out canadabubble.com regularly for news on the Canadian housing bubble. It's a news aggregator, fyi.

Ruhh, I totally forgot about Garth Turner's blog; it really is a great read.

Knucklewalker, when I read news about the US, European and world economy, I assume that Canada will suffer the same sort of fate. We are far too entwined in the global economy to not be affected. Perhaps because Canada is a resource-rich nation, that its citizens may fair a little better than some places that rely solely on tertiary economies (Iceland with its financial industry, for example).

I'm trying to decide where I'll live in the near-to-short term. I imagine the days of settling down in one spot and working a nice, safe, settled job will soon be over. People will be far more willing to move where there's work. Being able to settle down in one place for a long time will be a luxury only a few can afford. Is the interest in homesteading the work around to that? Buy acreage, move the family onto it, and become self-sufficient?

Tim

cowtown2011's picture
cowtown2011
Status: Bronze Member (Offline)
Joined: Sep 12 2011
Posts: 48
Is the Canadian situation any different?

I've been concerned whether the U.S. situation will impact Canada and the research I've seems to indicate that Canada will not be able to escape the downtrend. Below is a link which describes the impact of the great depression on Canada and it's suffered just as much as the U.S.

http://en.wikipedia.org/wiki/Great_Depression_in_Canada

I've come accross the following website. It's goes into details on the Canadian housing bubble and how tied into construction the Canadian economy really is.

http://theeconomicanalyst.com/

It appears that Canada is in a housing bubble and it's only a matter of time before we encounter a pin (credit crunch, U.S. recession, European financial meltdown, etc.). I came accross a really good presentation by Steve Keen and Jeff Rubin the other day which detailed out the Canadian situation. Even with all the information I still find it hard to believe my home market (Calgary) wil experience a housing correction. I struggle with whether to sell our highly leveraged house or not.

I'm curious to know whether people feel that buying gold is a prudent strategy for Canadian given the current strenght of our currency and comparatively better financial position of our government.

Does anyone have any views on whether they feel Canada can truly sidestep the potential financial Tsunami that is coming.

Some of my views anyways. Thanks

peapow's picture
peapow
Status: Member (Offline)
Joined: Aug 18 2012
Posts: 1
GICs

Any Canadians out there with a knowledgeable analysis of the safety of GICs? My feeling is that if GICs go into default we're pretty well bust anyway. Having some gold makes sense but that can only be part of the picture. I'm really sick of getting whiplashed by the stockmarket and getting to the point in life where I'd be happy to hang on to what we've saved and feel secure. 

We've paid off our debt, live 16 km from a small town, grow much of what we eat, heat with wood, have clean water and are in the process of adding solar power to take care of freezers, pump, a few lights and battery chargers, already have solar/wood hot water. After the solar power is sorted out we'll think about an electric vehicle that we can charge with the solar system and it will be part of the storage array. We'll do this not just in case everything goes sideways but also as an environmental committment. The financial planning is where we feel the most vulnerable, it's been too hard to save to watch it evaporate.

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