Congratulations! You’ve won a SSHRC or other scholarship from some Canadian entity in order to pursue your education in the U.S… the only problem now is…. your money is worth up to 30% less than its Canadian face value. Nice! You didn’t see that coming last year when we were able to solidly out-buy the greenback by 10%.
One obvious thing to keep in mind at this point is to stick to buying essentials: the things you need to stay comfortable, healthy and focused on your work. I know, that’s very difficult. Canadians are wont to overconsume as well. It wasn’t that long ago that the economy basically felt like it was still rolling along… in fact… even in August we were still able to feel that way. While the US had already begun a recession, things didn’t get seriously bad globally until the Lehman Brothers fiasco in mid-September.
Also, remember that even this situation will be temporary. When the US domestic market is done dumping its foreign holdings in order to sit back in cash again, that pressure on the loonie will dissipate.
And as soon as the markets start floating upwards again, the loonie will go with it. The so-called “commodity currencies” always do better when markets are moving upwards, because funds and individuals (so the theory goes) are more willing to take on the (perceived) risks associated with commodities and resources.
Investing? I’m starting to think that money markets are your best bet until we see more market stabilization. Income trusts always look good because they’re high-yielding, but some corporations may decide to buy back some units – as Harvest Energy is doing – in order to save money. This isn’t good for your income.
And of course, fundamentals. The world has passed peak oil. Canada has lots of it. Canada still has most of the world’s potash. Even if the US manages to become foreign-oil free in ten years as Obama has promised, there’s still a ton of items that need oil to be manufactured. We could be an electric car society and we’d still be running out of oil. Not that I’m advocating oil use, but face it, this is a major factor in the Canadian economy. Soon hyperinflation should finally register on the US balance sheets. This can’t be good for the greenback.
Why don’t you send me some of your suggestions or complaints?:) How are you getting around the awful exchange rate? When do you expect it to turn around, or at least come back up to 95 cents?
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Well tuff year,,,our son acheived his dream of obtaining a soccer scholarship and playing university soccer in the USA..thats the good news..the bad news is its soccer not football,,,,NOT a full scholarship.We scaped and saved to pay for his first year,this 2nd semester was painful withn the decline of the dollar.