If the US is headed for hyer-inflation, does that mean its major trading partners such as Canada are headed for deflation?

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Gill's picture
Gill
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Joined: Jul 27 2009
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If the US is headed for hyer-inflation, does that mean its major trading partners such as Canada are headed for deflation?

If the US is headed for hyer-inflation,US imported products and dollars will be cheaper, lowering our prices..... Canadian exports will have to become cheaper to compete in the US...

does that mean its major trading partners such as Canada are headed for deflation? 

Luc's picture
Luc
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Joined: Dec 3 2009
Posts: 58
If the US is headed for hyer-inflation, does that mean ...

Stagflation maybe !!!

10 year bond rates could have to increase in order to compete with other countries and at the same timde a strong (er) currency may increase the trade deficit. 

 

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guardia
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Joined: Jul 26 2009
Posts: 592
Re: If the US is headed for hyer-inflation, does that mean ...
Gill wrote:

If the US is headed for hyer-inflation,US imported products and dollars will be cheaper, lowering our prices..... Canadian exports will have to become cheaper to compete in the US...

does that mean its major trading partners such as Canada are headed for deflation? 

IMO, pigs will fly before a country dependent on its exports does not consider "quantitative easing" as a means to make its products cheaper... especially since it helps reduce the federal deficit at the same time. Just a couple of mouse clicks, and voilà: Federal debt = $0, inflation on the way, thank you, come again! :)

Samuel

Gill's picture
Gill
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Joined: Jul 27 2009
Posts: 3
Re: If the US is headed for hyer-inflation, does that mean ...

So Canada would follow the lead of the US, print more money to keep prices down thus inflation with high unemployment or stagflation...

Higher bond yields thus lower bond prices - so what are you investing in?  Dividends? GICs? Gold? Agriculture?

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