A great article in today’s Financial Post explains how Canada’s really the most fiscally conservative G20 member right now.  Ironic, eh?  Flaherty and Harper don’t want any more government intervention in the markets right now.

Canada has the world’s best and most safe banking system currently.  Corporations here aren’t going bankrupt and can still issue medium-term bonds.

But today Harper and Flaherty suggested they’d consider following in the US footsteps by bailing out part of the auto industry.  The only reason apparently is that with the huge US bailout of the auto industry, if Canada doesn’t do the same thing Canada’s industry would be so much less competitive.  How unfair!

You know, the reason it needs to be bailed out anyway is all about excess.  People don’t need new cars every three years!  And people are sick of buying gas guzzlers!  And we need hybrids and cleaner energy cars anyway!  I say let GM fail… that’s what capitalism is supposed to be about.  GM should have an obligation to its pensioners, of course - but otherwise people need to find work elsewhere.  It’s the way things work.  Maybe I wouldn’t be so harsh if it were an industry like health care, which actually helps people.  But frigging air-polluting, sickness-inducing fat-making machines - let it go.  Cars have hindered society as much as they have helped.  Let a new structure and new, cleaner method of transportation rise up in its place.  Down with GM!

I won’t like it if I see Obama bailing the car industry out.  There’s gotta be a better way.  Maybe bail them out only if they only produce hybrid and fuel-cell…. now *that* would make sense.

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%.

Well, the good news is… that I’m in your situation too (very reassuring, I know)!  So please do come back here for updates (subscribe to my feed, if you like) on what I’m doing and suggesting.  Feel free to get in touch with me on email as well.

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?  This is the first time since the whole “credit crisis” that I’m finally reigning in my own spending as well… that must be a good thing, but it’s not like I have a choice.

If you’re a U.S. citizen and you’ve been wanting to get into the Canadian markets but things were too expensive a year ago, or maybe you just don’t know enough about what’s available, I’ve got good news for you!  This is a list of five income trusts that trade on the NYSE and which are currently paying high double-digit yields!!

Add to yields of 20% or more your 25% stronger dollar and you’ve got a return of almost 45%!

This is an opportunity you don’t want to miss, especially since experts agree the greenback will fall again when all the chips are in and the markets improve.  So here’s the list.  I’ve owned all of these at one time or another.  Four oil and gas trusts, and one waste-management trust (a pretty good defensive play, since we always need waste management).

Arc Energy Trust (AET.UN) - currently paying about 15.60%!
Freehold Royalty Trust (FRU.UN) - currently paying about 19.5%!
Harvest Energy Trust (HTE.UN) - currently paying about 30.6%!! (Yes, a thirty percent yield!)
New Alta Income Fund (NAL.UN) - currently paying about 22.2%!
Pengrowth Energy (PGF.UN) - currently paying about 19.6%!

Not only are some of these names at a serious discount right now, but some, like Arc Energy, are extremely well-managed companies.  Pengrowth was the first oil trust in Canada.  These aren’t fly-by-nights.  Do check them out more on your own.  But these are my recommendations.  Harvest Energy, for example, just announced they’re going to buy back some shares, so you’ll want to time your purchase accordingly.