How long will Canadian Buying Power Last?
Jun 5th, 2008 by Kevin
Last week I wrote about the current buying power of the Canadian dollar, and how this is an idea time for Canadian investors to take advantage of investments such as offshore real estate which have little to no correlation other US investments but are typically still priced in US dollars. The dollar has stayed strong but with 85% of Canada’s trade being with the US is is unlikely to last even with the rich natural resources. Since I wrote the post I have seen two indicators of how the current US economic problems will eventually impact my birth-land to the north.
The first is a blog post by Eric Ames at InvestorCentric Blog. The second is an article by Eric Roseman who is the investment director for the Sovereign Society.
Both of these talk about the contraction that happened in the Canadian Economy in the first quarter. (Remember a recession is technically defined as two consecutive quarters of negative growth). Further they both desribe the close ties between the countries. For example the Canadian auto market is suffering right now due to both high currently rates and reduced demand from american car buyers. This second article goes into much more depth about the banking situation in Canada and how that will impact their economy similar to what is already happening on a much larger scale in the US.
Bottom line is that there are major shifts happening around the world and its important to take advantage of opportunities when the window exists. I checked this morning and the Canadian dollar was again above the US dollar. For my friends and readers to the north don’t miss this investment window!
