With the Loonie nearing parity with the USD, and with a strong housing market due to artifically low interest rates... a commodity based economy... a relatively strong banking sector... You'd think the outlook would be all positive for the Canadian economy... But with Canada' s proximity to the US, and with US becoming poorer and poorer, and with the US as our largest trading partner... and with the housing market appearing bubbly in some parts of Canada... A massive service sector plus a large Debt/GDP.. There are some bearish factors too... Anyone have a bullish/bearish forecast for our neighbours to the North??
Look into what Sprott has said about the Canadian Banking System... It received a $300 billion bailout, that no one talks about at all. The Real Estate Market in Canada has been called a bubble by David Rosenberg (top economist whom warned about the credit crisis) and Stephen Jarislowsky, a billionaire owner of Jarislowsky - Fraser has said the same thing. I saw a 2000 sq ft home in the Toronto Star today with a 30' X 120' lot that sold for $900,000 (it was listed for $600K). Seems kind high, considering it was probably 40+ years old and looked as such. The stimulus bubble in infrastructure is keeping it all from blowing apart in the short term, but an overbought CAD and low rates destined to go up provide a justification for risk aversion.
This recent article gives some dry numbers on the inflow of capital into Canada. The Russian government is one who is pumping money into Canada in an attempt to diversify its massive USD and EUR reserves. Eventual goal to let Russian ruble free float might be one of the reasons. Also close correlation of the value of CAD with OIL makes it safe for Russia to buy Canada (Russia is direct beneficiary of the high oil prices). I am (cautiously) getting ready to short Canada.
There is a reason nobody talks about this "bailout"... I doubt the Canadian government even has $300 billion to bail out banks with. Check out the debt numbers. Sprott's $300 billion bailout claim doesn't make sense.
What Great Recession? Article on Bloomberg today talking about the Canadian economy. http://www.bloomberg.com/apps/news?pid=20601082&sid=aWM72PSQjP1o