Canada: The Only Safe Place Left?

It would appear that Canada is doing alright. One of the few western nations to have weathered the credit collapse, Canada seems to be doing okay, for now.

The recent drop in the price of oil, however, has hurt and will continue to hurt. Bank of Canada Governor Stephen Poloz patted himself on the back yesterday by saying that it was a good thing that he lowered the rates when he did, rather than wait and see. The effect is to slightly weaken Canadian GDP in Q1, but reduce the long-term sting (assuming oil will rebound this year – a scenario which some consider unlikely.) This continues the storyline that Canada has been conservative in its financial planning and that ‘slow and steady’ wins the race.

Japan, on the other hand, faces many huge problems. An ageing population coupled with a low birth rate, little land for crops, radioactive food on what little land they do have (which will hurt the birth rate more than increase the death rate) and a money-printing strategy of which even the Fed is jealous.

Europe is printing money, Australia’s natural resources are crashing in value, China’s economy (the shadow side of it anyhow) is plummeting, and Russia… it could go either way. The only thing holding up the US economy now, besides hype and faith, is the value of the dollar. (What Saudi did to oil, America did to its currency; but Saudi is hurting, too.) The strong dollar is leaving all other currencies in its wake. Swiss de-pegged the Franc and said enough, we’re not playing this game anymore. (They should have gotten their gold back in that referendum last year, even it if was all in coin bars.)

Let’s not forget that the Canadian economy would be in tatters were it not for the American market. This is Canada’s greatest vulnerability; but Canada has been hedging of late with emphasis on the TPP and other trade deals abroad.

Nevertheless, other factors bring one to conclude that Canada is the place to be. Li Ka-Shing (richest man in Asia) just sold everything he had in Hong-Kong and got himself a Canadian passport. The Rothschilds’ head office is in Toronto (they may or may not still control the world, but they do know what they’re doing.) Things can’t be all bad, can they?

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