Canada goose

There’s one good reason 20% of your portfolio should be in USD. His name is Steve, and he works for the government. Blame him.

On Wednesday Steve said in a world where interest rates have started going up, ours may yet go down. And because the guy controls Canadian monetary policy (he prints all the cash and sets the price of it), the value of the dollar flattened. Roadkill on the highway to Making America Great Again.

This came a day or two after some giants of the financial world, including Vanguard, Moody’s and Deutsche Bank issued reports saying the Bank of Canada (Steve runs it) would be raising its rate later in 2017, lest our currency be skewered, and because the economy’s not half bad. But in a few words – “a cut remains on the table” – Stevo squished that thought. Within a short time the loonie has plunged more than a full cent, suddenly increasing the price of essentials like cauliflower and Harleys.

Besides murdering the currency, Steve signalled the Canadian economy is vulnerable and the T2 gang is quivering at the prospect of what a Trump White House might bring. Nothing good, apparently. Yeah, the US economy will likely swell which is normally a plus for us. But for the first time in decades, the border will harden to trade.

Ouch. One-third of our entire economy is made up of exports, and 75% of those go to one place. So if Trump lives up to his bombastic anti-free-trade rhetoric, we’re screwed. In the past few months he called NAFTA a “disaster” and his new commerce secretary says rewriting the trade deal, to be more pro-America, will be “an early, early priority.”

And don’t forget the BAT. The Border Adjustment Tax – being promoted by Republicans in Congress (especially Speaker Paul Ryan) – could be a game changer. It would disallow US businesses from deducting the cost of Canadian inputs from their revenues when calculating taxable profits. But if they get it from the States, bingo, it’s a valid input cost. The net effect is a 25% tax on stuff coming from the north.

Well, we don’t know what Trump will do, of course. We only know what he says. And for a guy who brags he can grab women by the genitals (because he’s famous), then says he didn’t really mean it, that may not count for much. But Steve’s obviously rattled. So I guess he’s buying into the devil-Trump meme racing across Parliament Hill these days. Either that, or he’s trying to talk the dollar down. And he’s very good at it.

So here’s the deal. If our central bank does freak out and cut its rate by a quarter point, it will drop to just 0.25%. That means one more hike or two by the Fed (perhaps in March, then June) will put the US bank rate a dramatic four times higher than ours – ensuring our dollar plops further as money flows to where it earns a better return. If the Bank of Canada hangs tough, and doesn’t respond to the BAT, a gutted NAFTA, a big American business tax cut or Trump’s 35% border tax on cars, then the dollar’s whacked anyway.

Hard to see an upside here for the money that your entire life is valued in. And that’s exactly why a balanced, globally-diversified portfolio should also be one that constantly hedges against the dollar. As this blog has suggested for years, best to maintain about a fifth in US-denominated securities. That would include, for example, about a 7% portfolio weighting in an ETF holding the S&P 500, plus another 8% in exchange-traded funds which own US mid-cap and small-cap companies, then a few points in US-valued funds giving exposure to emerging market companies, large and small.

A word of caution: don’t ever, ever try to make money trading forex. Stevie’s loose talk on Wednesday should prove that to you – it’s impossible to know when markets will move, on what information, or how sharply. Forex trading is gambling, not investing. Most people who try it end up as somebody else’s lunch. Also, converting CAD to USD or vice versa because you’re a genius is another bad move. The only people guaranteed to profit from that trade are the converters in the middle. And you know what Jesus said about those dudes.

So build this portfolio with a permanent US-dollar component. The stupidity has just begun.

188 comments ↓

#1 For those about to flop... on 01.18.17 at 5:59 pm

As we approach the $100m mark in listed price reductions in Greater Vancouver for the month of January,here’s a few things I have noticed.

The highest reduction I can remember is over 5 million and the lowest $800.

Also ,have seen a lot of listings removing the 888 in their price ,as if to say…

‘ We are no longer holding out for any foreigners buying our house with a crazy bid and are now open to accepting crazy bids from the rest of you lot’…

M42BC

#2 MF on 01.18.17 at 6:07 pm

Just when i was getting closer to being able to sell my CPD away forever the idiot does this.

Lol these guys are clueless. I was in Ottawa a couple months ago and I remember walking by the bank of Canada building and thinking a whole bunch of idiots are working there.
MF

#3 Mike on 01.18.17 at 6:09 pm

Canadians have high incomes and/or salaries.

Whatever happens, they can afford expensive homes. Look, nothing has happened in Edmonton Calgary even though high unemployment.

#4 Oakville Sucks on 01.18.17 at 6:17 pm

So this is my take on how things will be turning out in the next little while…
Inflation – going through the roof because America will be great again and our dollar is going to see new lows. I believe NAFTA renegotiations aren’t going to make much of a difference to our Canadian economy with the Trumpster in power.
Even with a low dollar our exports are screwed. Carbon taxing, taxes and regulations is putting Canada at a competitive disadvantage…Industry will be moving to the US. Buhhhh bye….it won’t be NAFTA renegotiations…Trump is too smart to make any changes to Canada’s agreement. He knows we’ve shot ourselves in the foot already.
Rates in the U.S. will be way higher than ours strengthening their dollar while screwing ours.
Oil – Is going to drop. Further devaluing our buying power (more inflation). Trump is going full force on this. Western Canada is going to get punished even more. We should see it stabilize at $40 US (Brent Crude). Canadian crude goes for much cheaper since it’s low quality.
Mortgage rates – going up as the 10 year bonds are on the rise (even though they’ve been on a steady decrease since 1987 at least)
Unemployment…shooting higher as a result of all I have described. This is where it’s going to get interesting with housing.
BOC rates cannot go down any further. They are already at record lows. Dropping them down to 0% will have negligible affects. With inflation and the dollar being punished by that point Poloz will be in a bind with nothing left in his arsenal.
Housing market will decline right across the country including Toronto as our economy tanks and unemployment increases. This will have a domino effect right across the Country. Every government in the country will be increasing taxes one way or another to make up for deficits and loss of revenues.
Trudeau’s Act 5 Scene 5 – will conclude the show as the worst PM in history. No plan and NO action. Spending will be out of control and having blown through BILLIONS resulting in very little effect to the economy. He will take a great selfie of himself.

It won’t be the end of the world but we are heading into a long recession from Coast to Coast. Tough times ahead fellow Canadians.

#5 For those about to flop... on 01.18.17 at 6:19 pm

#2 MF on 01.18.17 at 6:07 pm
Just when i was getting closer to being able to sell my CPD away forever the idiot does this.

Lol these guys are clueless. I was in Ottawa a couple months ago and I remember walking by the bank of Canada building and thinking a whole bunch of idiots are working there.
MF

////////////////////////

Hey MF, you should try walking by Vancouver City Hall one of these days…

M42BC

#6 bill on 01.18.17 at 6:21 pm

Hi Garth,
does it make a difference whether my TD direct investing is in Canadian or American funds?
any advantage either way?
the etf is PFF.

#7 Canadian Moose on 01.18.17 at 6:22 pm

Leaving for the tropics soon to heat up my big rack. Thanks Steve for being SO useful with your comments. Suggest next time you choose your words more carefully, as markets listen to their every WORD and respond accordingly.

My disposable holiday money just got more expensive at the exchange. Roinks

#8 Jetfixer on 01.18.17 at 6:25 pm

If you have the mobility and the capability to work down south, and make USD, that should be a no brainer now.

#9 Bastion on 01.18.17 at 6:25 pm

Was Baba Vanga right? That the end times are upon us?

#10 mike from mtl on 01.18.17 at 6:25 pm

“But in a few words – “a cut remains on the table” – Stevo squished that thought. Within a short time the loonie has plunged more than a full cent”

Told you, got to keep that Poloz peso target, man up to 76c, crap can’t have that. Without using foul language to describe this unelected guy, can’t believe I’m writing this but hopefully Trump will finally call out all these ‘currency manipulators’ for what they are.

#11 C-Unit on 01.18.17 at 6:27 pm

Vancouver homes are dropped 4%, aka a buttload.

https://betterdwelling.com/city/vancouver/vancouver-real-estate-sees-detached-benchmark-drop-27k/

#12 JRH on 01.18.17 at 6:38 pm

I bought some ZPR again today. Time will tell ?

#13 rainclouds on 01.18.17 at 6:42 pm

3 more years left in his tenured position. Much damage to be done yet.

Had to appoint one of the few bean counters whose main talent appears to be making dumbass pronouncements ? Wild Bill must be pleased to hear this nugget. No doubt the West coast shyster Christy is………….

Thanks Tubby.

#14 Rexx Rock on 01.18.17 at 6:43 pm

Just a few days ago the cad was 76.8,up from 73 in less than a few weeks.To me it looks like its getting stronger with all the good economic news coming out!!They say Alberta is turning around and still booming in B.C. and Ontario.Maybe T2 will take all the credit?

#15 For those about to flop... on 01.18.17 at 6:44 pm

Canadian geese got blamed for the plane crash on the Hudson.

This is a load of crap.

Stephen Poloz saw that the plane was about to rise up and reach a comfortable height and convinced Captain Sullenberger that the best thing to do was to dunk it in the Hudson…

M42BC

#16 Kevin Li on 01.18.17 at 6:45 pm

I wrote about this here before (including yesterday).

Loonie will drop and Canadian real estate will look even cheaper to those coming from countries with stable currencies (or who have their money in stable currencies).

Hate to break it to many, but to a lot of people around the world Canada is a nice place to visit, but people don’t want to live here full time in most of it.

So cheap real estate is on the way due to Loonie drop, it’s fire-sale!

….but wealthy newcomers only want to move to certain areas

…where there are things like shopping, schools, convenient, safe, pretty, modern, restaurants.

Which is why the GTA north – Highway 7 and north (even stretching to Barrie) is going to boom even more.

You’ll see. Real estate still works, but it’s becoming very “area specific.” If you aren’t in a prime time city/town you are making a mistake.

#17 Cici on 01.18.17 at 6:46 pm

Ouch! He’s definitely trying to talk the dollar down, and wants Trump to know that he’s willing to let it go into the ditch if he has to in order to keep Canadian exports moving in the wake of Trumponomic policies.

Will be interesting (and quite possibly VERY painful) to see how this all pans out.

#18 conan on 01.18.17 at 6:46 pm

Canada will reciprocate, they have no choice.
More then a feeling that Trump could cause an exodus of talented Americans to leave the USA and move to Canada. Maybe California will want to come?

https://www.youtube.com/watch?v=oR4uKcvQbGQ

#19 Suede on 01.18.17 at 6:55 pm

on my third FOREX practice account now.

Went belly up on the first two in 3 days.

There are risk takers…

There are mountain climbers…

There are even people that fight bears…

But the craziest risk takers trade FOREX for a living.

#20 George on 01.18.17 at 6:59 pm

Hi Garth,

Please explain why you wouldn’t convert CAD to USD once and keep some USD in your account to buy ETFs in USD? (Assuming no further conversion fees every time you sell). Are there tax implications (US Withholding tax exposure in none registered accounts?)

As a general rule of thumb, US ETFs have a lower MER to their CA equivalent.

#21 AJ on 01.18.17 at 7:02 pm

Can the world just go back to normal now? This jokes not funny anymore

#22 mark on 01.18.17 at 7:02 pm

I’m confused why vanguard comes out the day before making predictions on rates and making themselves look like buffoons. I didn’t think they made predictions?

#23 Boots on the Ground on 01.18.17 at 7:05 pm

Ok Ok Canada is the dead parrot I meant.

#24 Entrepreneur on 01.18.17 at 7:06 pm

“We only know what he (Trump) says,” GT. We will know more of the truth when in but T2 said things but never came true and even flip flopped.

Recently T2 talked to a group of youths about the transition from fossil fuel to green energy. Sounds simple, so dedicated to climate change. Who would not agree. Transition means from one stage to another, simple.

But, a big but here, transition (in this case) from fossil fuel means to refrain/reduce the use not increase pipelines, ships, ports and to increase productivity in clean energy.

World Class Fossil Fuel Liberals.

Let Climate Change be the barometer.

#25 RentYVR on 01.18.17 at 7:08 pm

Actually Garth, some of us on here (ahem) have been telling you for months that the BoC was going to cut rates long before they ever contemplate raising them. They want our dollar to be on par with the peso because they think (wrongly) that cheap exports are the only way to growth. Why don’t you listen to them?

#26 Henry Smith on 01.18.17 at 7:08 pm

The Bank of Canada and Poloz sucks!

#27 InvestorsFriend on 01.18.17 at 7:13 pm

How Money is Printed

Yes, Poloz can print paper money and also by setting interest rates affects how much money the banks create.

The best definition of money is that it is “transferable credit”

You work and you get a paid by a credit to your bank account. Most of us spend that almost entirely via electronic transfers. Think about what percentage of your GROSS (or even net) wage gets converted to paper cash.

Paper cash can be thought of as a credit that can be used to pay taxes and anything else owed to the government. We all accept it because the government accepts it in payment and because well we all accept it. Sort of like why you all speak English in Ontario.

The banks create more transferable credit every time that they together with their customers create a loan and a deposit. Which are always created as equal pairs. This does not create any new wealth since it creates an asset and a liability of equal size. Nothing nefarious about it. It just is. The banks and their customers create the vast majority of the money supply in this manner. Paper cash could be eliminated and we would still be rolling in money. Money actually gets destroyed when loans get paid off.

Poloz is in charge of setting an interest rate that keeps the value of money relatively stable. The targeted 2% inflation rate. That is his main and just about only job. He has no mandate to create employment for example. His mandate is a to maintain about 2% inflation. He has no real mandate either to target the Canadian dollar level as far as I know although the central bank does try to smooth the fluctuations there.

And guess what? The core inflation rate has in fact been right about 2% for a long time. Job well done.

#28 common sense on 01.18.17 at 7:15 pm

Now we have confirmation Mr. T is on a first name basis with his bromance pal “Steve”

Knew it. ;)

#29 TheUnhealthy on 01.18.17 at 7:23 pm

Can anybody please explain why there is such a difference in performance between zpr and cpd?

https://www.google.ca/finance?q=TSE%3ACPD&ei=cQWAWPngJpXg2Aazh654

#30 zee on 01.18.17 at 7:26 pm

Like I said yesterday, they need any reason to not hike rates.

I don’t think they will ever raise rates in Canada.

#31 Seattlelight on 01.18.17 at 7:27 pm

Currently working in the USA and have RRSPs sitting in cash at home. Due to bank screw-ups, the money only arrived in the account on the day we left Canada. As a non-resident and due to US laws, the bank tells me my only option is to convert the RRSP to USD and then buy US-listed funds or ETFs. This would make our current portfolio 100% USD. Do you have any other suggestions?

#32 Rick Fast on 01.18.17 at 7:31 pm

There is a way to convert CAD to USD without incurring massive fees. Buy DLR on TSE and call broker, transfer to DLR.U and sell it in american. You lock in at todays rate and no fees other than 2 trades. Most efficient way of converting large sums of currency.

CAD will go down to 65 cents

GTA housing will go down by 30%

Bring it on

#33 Trump twitter feed on 01.18.17 at 7:33 pm

DELETED

#34 Ogopogo on 01.18.17 at 7:35 pm

At this rate I’ll never be flaccid again (thank the gods for loose boxers). My Vanguard holdings in VTI (USD) and VUN (CAD) have both enjoyed double digits growth.

The staggering incompetence, cowardice and just plain confusion from Poloz the Putz simply can’t stop Ogo from doing the Pogo dance of profits.

Oh, did I mention I love renting and investing the ever-lovin’ growing difference? Bonus points for laughing at negative cash-flow “landlords” (though bless my own philanthropist-cum-lanlord for subsidizing me in downtown K-town).

#35 Alberta Ed on 01.18.17 at 7:40 pm

What could possibly go wrong with a silver-spoon socialist for prime minister?

#36 USDCAD on 01.18.17 at 7:42 pm

Converting currency with a broker is more attractive than what the banks will offer. USD accounts are mostly free from any fees. Many Canucks go shopping or vacationing in the US of A or somewhere on the planet were a bag of US cash will always open doors and pay for a meal.

The US Dollar is the most widely recognized currency on the planet. In the Caribbean, in Central- or South America the people are holding USD as a hedge against inflation. Canadians are just new to this experience but will learn with time.

Who cares if RE valuations go up 5% annually if our currency depreciates 5% to the USD and inflation adds another 5%? There are many better ways to invest or hedge than owning several houses or condos.

Unless you’re an institution with deep deep pockets and a long time horizon, it makes absolutely no sense to purchase any real estate in any of the allegedly hot markets in Canada. There are no deals, no easy and quick flips. Just allot of long term pain and a world of hurt out there.

RE valuations have to come down at least 50% to find real buying interest and have a real market. Not this bullshit scraping of the barrel by dumb suckers.

#37 InvestorsFriend on 01.18.17 at 7:42 pm

No central bank can serve two masters. The central bank may try to help the economy but only after the main job of 2% inflation is on track. That is the master he must serve.

I heard this confirmed by a deputy governor in a speech a few years ago.

The FED actually has a dual mandate employment and the targeted inflation but they struggle with trying to serve two masters. Bank of Canada has no dual manadate

#38 Entrepreneur on 01.18.17 at 7:45 pm

#4 Oakville Suck…”Trudeau’s Act 5 Scene 5, and, No plan and no action. Worst PM in history” So true but did laugh at the Act 5 Scene 5 bit.

Wonder if T2’s father had this fly-in vacation on that island? And involvement on Free International Trade. The plot thickens!

Kevin O’Leary has jumped in and good for him. As for not speaking French, fine with me, political correction can only go so far. O’Leary is saying words that I nod to and might even vote for him but have to hear more to confirm. I think he just might get in as we are so tired of the same, same. Does this sound similar?

Watched O’Leary on Power and Politics. This is what he has to deal with, omg, the repeat questions. I would like to know if P & P are more in favour of political corrections or the people of Canada?

#39 Trump twitter feed on 01.18.17 at 7:48 pm

Oh come on it wasn’t any worse than what you did. And it was funnier. Oh well it’s your blog.

#40 pete on 01.18.17 at 7:50 pm

4 Oakville Sucks
—————————–
Canada is being set-up to be taken over by the US. It’s all part of the North American Union project that’s been in the works for many years now. The 1995 Quebec referendum was supposed to be the spark to ignite it. Read the book by Shelley-Ann Clark “The Sale of a Country”. That plan failed, but this time around Canada will be strapped with a housing collapse, a devalued dollar, highly limited exports, low oil prices, carbon taxes, etc. Combine this with the upcoming worldwide financial disaster and a majority of Canadians will be begging to be merged with the great US empire for some relief. Remember this when the chattering classes start trying to sway public opinion in favour of joining the US.
Watch the movie H2O. It’s the only film about Trudeau Jr. assuming the role of Prime Minister. It’s a harbinger of things to come, but I think that the means to that end has changed somewhat in the last 10 years.

#41 Doug t on 01.18.17 at 7:56 pm

Reap what you sow Canada – this country has always just relied on natural resources. Hope everyone is ready for the new reality – at least 10 years of hurt ahead. Hope everyone put something aside for such an event – I did :)

RATM

#42 Joke on 01.18.17 at 8:07 pm

He can talk cuz that’s the only thing he can do. Soon he, T2 & clan will be dancing to the music Trump/US will play. Boy do we ever need our own “Trump”.

#43 WUL on 01.18.17 at 8:08 pm

My opinion is that much of that which Trump says does not actually flesh out his policies. The utterances are opening salvos or initial negotiating positions. The policies will be more moderate. How does he square what he has been saying of late with his promised approval of Keystone XL was “job one – day one” and that promise was made to some powerful interests.

As for Poloz, “Loose lips sink Loonies.”

#44 Shawn on 01.18.17 at 8:11 pm

The S&P500 will end 2017 at 2700. The TSX will end the year at 15450. So let it be written…

#45 ANON on 01.18.17 at 8:14 pm

I pity Steve one one hand, for getting the blame, but on another hand, any man in that position should have been smart enough to figure out the Catch 22. Hmmm, on second thought, maybe they all did, and ran away before being caught in the headlights.

But, on average, here’s to Steve *raises double shot*! Now, (head)lights, action!

#46 Nonplused on 01.18.17 at 8:18 pm

#40 pete

US corporations already have substantial interests in Canada, as Canadian corporations also have substantial interests in the US. In fact the lie of the land looks not too different than if there were no real border other than for tax purposes. This is why I am not too concerned if Trump re-opens NAFTA. The “boarder tax” would affect a lot of US interested parties.

Trump’s statements are designed to stir up the masses, but would a 25% tax on Canadian built cars really work? Why wouldn’t we slap a 25% tax on US built cars in that case? NAFTA regarding cars hasn’t really varied that far from the “auto-pact” it replaced, Canada hasn’t been the real threat to US manufacturing Mexico is because the cost of building cars in Canada isn’t that much less than in the US. Hence, why the manufacturing moved south to Mexico not north to Canada other than what the auto-pact had already done. Anyway my point is that all Canadian car manufacturing is foreign owned already. Most of Canada is US owned already. Same as we proportionally own US assets.

I don’t know if your idea that Quebec Separatists were a US plot to divide Canada up, but even if it was they found a corporate way to do it that was just as effective, and probably not as destructive. Why not welcome US capital, especially if they are willing to pay more than Canadian capital will? Having a strong US interest in say the Alberta oil industry is a good policy move to persuade America that Alberta oil is ok, build the pipelines.

The US problem is that they don’t like cheap Mexican labor, unless it is their house being built or their maid. They don’t have to worry about Canada, we don’t have any cheap labor, we have welfare.

#47 Wrk.dover on 01.18.17 at 8:20 pm

Mean while this guy points out that the fakecovery still hasn’t taken hold, even with Goldman Sachs running the show Stateside.

http://ponziworld.blogspot.ca/

#48 Entrepreneur on 01.18.17 at 8:20 pm

#40 Pete on “Canada is being set to be taken the U.S.” Canada is rich in Resources and where told at a young age and to protect it. He didn’t tell us to protect the resources from our leaders, sad.

I think T1 tried to keep Canada as Canada by introducing the dual, two languages, French and English (Louis Riel) and switch us to the metric system. I think that will back fire. Can only push people so far and with the unsurmountable taxes.

Different topic: Kelly Ellard at 16 killed another young girl about 16 years ago but is still in a jail for that crime. I hear that she has anger issues. Her day parole was denied because they thought she was not sincere enough. I think she needs help.

#49 bigtowne on 01.18.17 at 8:22 pm

Tonite’s reward is the transparent eyeopener from Mr. G…we are an ex-British colony and we were cut off from our foremost export market: America ….for a good long spell way past 1812. Hence dear fellow patriots it it not time to cringe and hide from our true nature and our true inevitable embrace with our American sweetheart.

Notwithstanding bum and junk grabbers…we are all one.

We must embrace the greenback and not be shy turning our backs on the redcoats etc.

#50 mark on 01.18.17 at 8:25 pm

Even though XUU which is I shares total market for the USA, it trades in canadian dollars but is there Not exposure to the greenback?

#51 april on 01.18.17 at 8:26 pm

#11 – Read Ross Kay, HoweStreet.com. Read the archives as well. This is no “seasonal adjustment.” Houses in Vancouver have already dropped 19.6% since the summer of 2016.

#52 common sense on 01.18.17 at 8:26 pm

bump

#53 InvestorsFriend on 01.18.17 at 8:31 pm

Everyone’s personal inflation rate is different. So is their exposure to dollar fluctuations.

If you spend more a typical portion of your annual spending on vacation outside Canada, your personal inflation rate is likely to be far different than the 2% core rate. Your personal inflation rate varies a lot with the dollar level.

Some people don’t buy any gasoline. Others have two large vehicles and drive hours each day. Different inflation.

Those in a paid for house that choose not to spend on renovations face a different inflation rate than a new home buyer or a renter.

Some people spend loads on cigarettes and booze, others nada.

Personal inflation rates clearly vary.

For some people the change in the currency value has very little impact, for others the impact is huge.

If you plan on annual vacations in the U.S. and eventually winters there then I would say 40% in U.S. dollar currency and assets would not be too much.

#54 Tom on 01.18.17 at 8:32 pm

Kevin Li

WOW you realtors are real shysters who will say anything. The fact is many of realtors are make no money. Many of you are starving for money and many of you realtors will go bankrupt and be broke. Realtors are useless like travel agents.

#55 AJ on 01.18.17 at 8:34 pm

#16 kevin li the realtor
###############
YOU HAVE BEEN SPEWING THE SAME BS FOR WEEKS NOW. WE ALL KNOW YOU ARE A REALTOR TRYING
TO PUT A NEW SPIN ON A REAL ESTATE MARKET THAT NO LONGER IS FEASIBLE.

DON’T YOU HAVE AN OPEN HOUSE TO GO TO.

#56 45north on 01.18.17 at 8:35 pm

Besides murdering the currency, Steve signalled the Canadian economy is vulnerable and the T2 gang is quivering at the prospect of what a Trump White House might bring.

what about leading us through hard times? who’s going to do that? It’s dawning on Poloz and Trudeau that they are.

#57 Tom on 01.18.17 at 8:38 pm

zee on 01.18.17 at 7:26 pm
Like I said yesterday, they need any reason to not hike rates.

I don’t think they will ever raise rates in Canada.)
____________________________________________

The bond market will raise rate regardless what the BoC does. The Government could shut down CMHC and housing prices in Canada would crash so hard and so fast that 50%+ would vanish overnight. Every realtor, mortgage broker and all the other verted interest know this to be 100% true. They all hate the free markets since the free markets would crash the biggest housing Ponzi bubble in the whole world.

#58 Smoking Man on 01.18.17 at 8:46 pm

WHO is all in with Kevin Oleary.

Next week at south side Johneeys I prepose a Deplorable meet up. To plot and stratagy his leadership bid. Let’s get active with this. Get involved and save canada and our kids future.

We must un grip this country for clutches of communism.

RSVP, here. thinking Thurs night.

#59 Vancouver in the Rearview on 01.18.17 at 8:49 pm

Hey Garth,

As a change of pace, would you write a column on vehicle purchasing versus leasing? Next to houses, cars are usually the largest purchase people make. Interested in your perspective on how to assess the rent versus lease decision.

#60 I don't know on 01.18.17 at 8:51 pm

Lower rates mean higher domestic demand and thus higher house prices. Lower rates also mean lower Cdn dollar, which in turn, also means more foreign demand and higher house prices.

It is laughable that some have been predicting higher rates and lower house prices for years. Isn’t going to happen. Ever.

#61 JSS on 01.18.17 at 9:01 pm

I have a variable rate mortgage. Any chance a reduction in the BOC rate will give me a lower mortgage? I’m currently with a mortgage at Prime – 0.4

#62 pete on 01.18.17 at 9:01 pm

NONPLUSED: I don’t know if your idea that Quebec Separatists were a US plot to divide Canada up
—————————————————
Just to be clear I didn’t mean to imply that Quebec Separatists were trying to establish a situation which would force the rest of Canada into joining the US (this was certainly not the case); rather that they were being used by the powers-that-be to try to achieve that ends.

#63 KoolAid on 01.18.17 at 9:05 pm

From globalization to centralization, the strongest economies in the world will now focus to a greater degree internally.

The ripple effects from these sharp policy changes will be financially destabilizing for many Canadians.

A 25% effective tariff on exported goods here will be the catalyst for what will be the greatest down run on commercial assets & paper in decades.

A week dollar is not the remedy. Canada will be forced to raise rates, all advanced economies will.

Get prepared for 10% unemployment in the next 30 months.

Btw, our banks will be a mess with residential and commercial property and businesses getting pounded simultaneously in an era of record debt, well, diversification will help you survive, though no one will thrive, not with what’s coming. I’m seriously concerned about Canada’s future in the near term.

Batten down the hatches.

#64 leinad on 01.18.17 at 9:09 pm

Within a short time the loonie has plunged gold rockets…..

Yah a house with rental income is a bad idea look at this monster….whose gonna pay for that

https://www.realtor.ca/Residential/Single-Family/17705541/213-BERING-Avenue-Toronto-Ontario-M8Z3A4-Islington-City-Centre-West

#65 Ronaldo on 01.18.17 at 9:12 pm

The One Minute Portfolio by Larry MacDonald

http://www.canadianbusiness.com/investing/the-one-minute-portfolio-annual-report-larry-macdonald/

#66 NoName on 01.18.17 at 9:16 pm

#2 MF on 01.18.17 at 6:07 pm

why you are whining on a cpd every chance, if i remember correct, you started building portfolio back in 2015, at the worst you are probably down 8-10%, assuming you took all your positions in jan.
Why you didn’t double down last jan. when yield was slightly over 5%?
Your mentor is failing you, just let it ride.

4269

#67 yorkville renter on 01.18.17 at 9:23 pm

If I wasnt so busy with locals I would be digging for Yankee clients…
They have the scale to spend $$$ and I love that exchange rate!!!

#68 Ronaldo on 01.18.17 at 9:26 pm

Keeping it simple with a few ETF’s

http://www.theglobeandmail.com/globe-investor/advisers-view/investors-resist-it-but-simplicity-is-better/article33266009/

#69 Fish on 01.18.17 at 9:26 pm

Things don’t look good, I wish I was Shirley valentine, right about now

#70 HAM R Us on 01.18.17 at 9:29 pm

But the Canadian bond market does not even care anymore. The yields did not budge at all.

#71 Fubared on 01.18.17 at 9:29 pm

Like the others have said Garth as much as I love your perspective. Why can’t you admit we might devalue our currency to keep the illusion of inflation alive? We all know that the majority of markets are saturated and we can’t get enough growth anymore. Are we really going to reduce access to debt in a debt dependant economy? We didn’t in the world RE crash do you really think we will do it now?

#72 Piano_Man87 on 01.18.17 at 9:30 pm

Garth, could you perhaps one of these days touch on the pros and cons of holding American stuff in a Canadian ETF, vs. simply holding American stuff in USD?

When I began my portfolio a few years ago I figured the taxes would be simpler if all assets I hold directly were Canadian, but I’m not sure I’m seeing the same gains others are when the USD/CAD increases.

#73 yorkville renter on 01.18.17 at 9:31 pm

not sure why people are gloating about rate cuts when no cut was made… you’re patting yourself on the back for being wrong

#74 Trumpocalypse2017 on 01.18.17 at 9:34 pm

2 Days to Irreversible Global Chaos

Cherish these final moments of relative stability.

#75 Cyrilix on 01.18.17 at 9:51 pm

Garth, what do you think about selling some equities listed on the TSX that are American companies (or basically track the USD because their earnings are mainly in USD) if the Canadian dollar goes down to 0.65? Canadian equities would be no more expensive (I assume), but you’d have a 15% gain if the Canadian dollar drops significantly from selling those US equities. There is no currency exchange cost whatsoever. You could then simply reinvest that into buying more shares of a Canadian company and wait for Canadian money to rebound.

Obviously, you wouldn’t want to significantly destroy a good asset allocation by doing this, but if you were currently a bit overweight in US equities and underweight Canadian equities, would this not prove to be a potential upside?

#76 crazed and a little confused on 01.18.17 at 9:54 pm

Hi garth and blog guys,

what are some good characteristics for good preferred shares

for example
CU-T
RBF-T.

I usually buy bond ETFs for high yield. my lowest is 2.89 %- 8 .3%

now I know bond prices have gone down but bond etfs hold short term as well as corporate bonds right now Im down
1. 5 % on one and down 3 % on the other.
but this all part of a balanced portfolio.
I know I can’t buy preferred online as a trade I have to call them. any advice?

thanks

#77 traderJim on 01.18.17 at 9:55 pm

“Forex trading is gambling, not investing. Most people who try it end up as somebody else’s lunch. Also, converting CAD to USD or vice versa because you’re a genius is another bad move.”

Hey, I resemble that remark!

#78 AB Boxster on 01.18.17 at 9:57 pm

So is it sufficient to own ETF’s that are based upon US equity (such as S& P 500) or should the actual ETF be denominated in US dollars?

Therefore it should be better to own XUS (which has no currency hedging) than to own XSP which is the same ETF without the currency hedging?

Or should one actually own ETF’s that are denominated in US dollars, which would mean that you would buy ETF’s that are sold in US, which in the case of S&P 500 would mean IVV.

So Options are
All based on S&P 500 index from Blackrock as an example:

XSP – canadian dollar, underlying securities are US – hedged to usd
XUS – canadian dollar, underlying securities are US – not hedged
IVV – US denominated, underlying securities are US

Any comments?

#79 DON on 01.18.17 at 10:00 pm

#2 MF on 01.18.17 at 6:07 pm

Just when i was getting closer to being able to sell my CPD away forever the idiot does this.

Lol these guys are clueless. I was in Ottawa a couple months ago and I remember walking by the bank of Canada building and thinking a whole bunch of idiots are working there.
MF
*****************************
Sorry MF but…we here in BC take pole position over graft and incompetence and most likely the greaterfool hat. Nothing like developers have friends in their pockets.

“British Columbia: The ‘Wild West’ of Canadian Political Cash”

https://www.nytimes.com/2017/01/13/world/canada/british-columbia-christy-clark.html?_r=0

#80 Tesla's ghost on 01.18.17 at 10:04 pm

Smoking Man on 01.18.17 at 8:46 pm
WHO is all in with Kevin Oleary.

Next week at south side Johneeys I prepose a Deplorable meet up. To plot and stratagy his leadership bid. Let’s get active with this. Get involved and save canada and our kids future.

We must un grip this country for clutches of communism.

RSVP, here. thinking Thurs night.

..
I thought you moved to a walled island with all your forex billions

#81 Smoking Man on 01.18.17 at 10:04 pm

DELETED

#82 Smoking Man on 01.18.17 at 10:06 pm

Deleted Already? you read that fast. Holly shit

Wow

#83 traderJim on 01.18.17 at 10:09 pm

Betting against the mighty buck, (or the mighty swissy for that matter), is about as smart a long term move as betting against the big 5 banks.

Only talking compared to other currencies, not compared to real (preferably income producing) assets you gold bugs and Buffet boys. I like both those too.

#84 Smoking Man on 01.18.17 at 10:13 pm

#80 Tesla’s ghost on 01.18.17 at 10:04 pm
Smoking Man on 01.18.17 at 8:46 pm
WHO is all in with Kevin Oleary.

Next week at south side Johneeys I prepose a Deplorable meet up. To plot and stratagy his leadership bid. Let’s get active with this. Get involved and save canada and our kids future.

We must un grip this country for clutches of communism.

RSVP, here. thinking Thurs night.

..
I thought you moved to a walled island with all your forex billions
…….

That’s for retirement, not ready yet, right now the fun is just beginning in Canada. Oleary will win, and Toronto star fake news typists will have nervous breakdowns after I’m done with them

#85 ERP on 01.18.17 at 10:14 pm

Never mind hydrocarbons. As the planet heats up, fresh water will be an increasingly valuable commodity. Guess who has loads of it. Maybe we’re not so bad off after all.

#86 Spaccone on 01.18.17 at 10:15 pm

#32 Rick Fast on 01.18.17 at 7:31 pm

>>>>There is a way to convert CAD to USD without incurring massive fees. Buy ::DLR on TSE and call broker, transfer to DLR.U and sell it in american. You ::lock in at todays rate and no fees other than 2 trades. Most efficient way ::of converting large sums of currency.<<<<

I've done this with RBC except I didn't deal with anyone. I bought DLR via my CAD account, then immediately sold DLR.U via my USD account. After a few days RBC journaled the shares to flatten the positions (as it was long DLR and short DLR.U) without any input from me.

#87 soost on 01.18.17 at 10:16 pm

Why was Trudeau out taking selfies instead of influencing Poloz to keep his mouth shut?

Really bad idea to poke the bear (Trump) this early. We will be called currency manipulators and be made an example of

#88 Smoking Man on 01.18.17 at 10:19 pm

#77 traderJim on 01.18.17 at 9:55 pm
“Forex trading is gambling, not investing. Most people who try it end up as somebody else’s lunch. Also, converting CAD to USD or vice versa because you’re a genius is another bad move.”

Hey, I resemble that remark!
…..

Serious gambling. Only meant for people with low boredom tolerance from other planets.

It’s like a drug addiction. Chasing the high of highs. that 5 cent run.

I’ve had a bad year. But last year spectacular, I can have 10 more bad years and still be up huge.

#89 Stock Picker on 01.18.17 at 10:29 pm

Loony Tune Poloz is a Marxist goon…along with Trudeau and his handler Gerald Butts. Keep people poor and they are more malleable is the Liberal credo. Trump is going to dump all over Trudeau and Butts wants to organize a protest against Trump to highlight Justin’s vulnerability…and if the last election proves anything it shows that Canadians are a sucker for the organizational talent of a union strategy and the propaganda of the CBC.

Garth I agree that in retrospect it would be better to have 100% of ones assets in USD….but….investing is a long term strategy…..Trudeaus time at the helm is limited…..the rally on the dollar after the liberal rout will be spectacular. Outsiders recognize the strategy of Poloz is Marxist and not based on fundamentals.

#90 Smoking Man on 01.18.17 at 10:32 pm

Writing a speech for my son’s wedding.

Hello everyone, first off, I would like to thank everyone for taken the time to drive out to a Bavarian country to share this very warm January day with Son2 and Socket 2. When you look at those two, warmness resonates, so It doesn’t surprise me that mother nature loves them as much as all of us do and held back a snow storm. She can be a real bitch.

Socket 2, what’s with the cut eye, I’m not talking about woman god damn it. I was talking about Mother Nature. So, she’s having a mid-life hot flash, doesn’t mean it’s permanent, doesn’t mean a man caused it.

That’s as far as I’ve got so far.

#91 AB Boxster on 01.18.17 at 10:40 pm

Interesting article on ETF denomination currency and underlying asset currency-
http://canadiancouchpotato.com/2014/01/13/how-a-falling-loonie-affects-us-equity-etfs/

#92 Kevin Li on 01.18.17 at 10:42 pm

#55 AJ on 01.18.17 at 8:34 pm

#16 kevin li the realtor
###############
YOU HAVE BEEN SPEWING THE SAME BS FOR WEEKS NOW. WE ALL KNOW YOU ARE A REALTOR TRYING
TO PUT A NEW SPIN ON A REAL ESTATE MARKET THAT NO LONGER IS FEASIBLE.

DON’T YOU HAVE AN OPEN HOUSE TO GO TO.
————————
Not a realtor and happy to have made hundreds of thousands of dollars in appreciation over the past, oh, 9 months!

Keep renting and keep angry.

#93 Smoking Man on 01.18.17 at 10:44 pm

Today’s pic? what’s in the dudes right hand is what I’m trying to figure out? A missed placed mouse trap is the first thing to come to mind. Anyone?

#94 ANON on 01.18.17 at 10:45 pm

#40 pete on 01.18.17 at 7:50 pm

Combine this with the upcoming worldwide financial disaster and a majority of Canadians will be begging to be merged with the great US empire for some relief.

Sorry, Pete, we have already been merged with the US for some relief.
There’s no setup, no evil men at work (they want what we all want: more, except they are above us, so they can, and they will extract more promises as long as they are given more promises by those below). The expansion, when narrated (extrapolated) into the future, would have led to the “North American Union project”, as all expansions do, by their very definition (hint: EU). If there’s enough to benefit from the expansion, any separatism has ended (while it lasts, of course, nothing is forever).
No one ever has had control over these waves of expansion and contraction, , because the narratives are collective. However, they always credit the dummy-in-chief for the abundance, or damn him for all time, when the inevitable crash happens. A small percentage see the crash coming and blame the dummy-in chief for setting everybody up, true that :)

There may be a lot of Canadian begging in the future, but the US ears will be deaf from the sound of their own internal cries and prayers.
Between 3 and 4, that’s where we/they are, and not a darn thing could have been done, at any level, to either stop the expansion, or prevent the crash. The world simply works this way.

#95 Keith on 01.18.17 at 10:47 pm

The real Kevin O’Leary:

https://www.youtube.com/watch?v=EtWX7ZYl-pQ

#96 sharktank on 01.18.17 at 10:48 pm

58 Smoking Man on 01.18.17 at 8:46 pm

WHO is all in with Kevin Oleary.

—-

I donno.

Watching him on Sharktank everything should be outsourced to China.

Quite out of sync with Trump.

#97 Smoking Man on 01.18.17 at 10:48 pm

The definition of delusion.

http://www.zerohedge.com/news/2017-01-18/cnn-president-says-networks-credibility-higher-ever

#98 Smoking Man on 01.18.17 at 10:59 pm

#95 sharktank on 01.18.17 at 10:48 pm
58 Smoking Man on 01.18.17 at 8:46 pm

WHO is all in with Kevin Oleary.

—-

I donno.

Watching him on Sharktank everything should be outsourced to China.

Quite out of sync with Trump.
…..

Humans have short memories

#99 Smoking Man on 01.18.17 at 11:02 pm

In an epic final speech, Joe Biden warns that the progressive democratic world order is at risk of collapse.

http://www.cnbc.com/2017/01/18/joe-bidens-final-speech-at-davos.html

About time, progressive are full blown mental cases, a religion that has gone Soros.

#100 Foreign Capital in Victoria on 01.18.17 at 11:03 pm

As I told you VREU many months ago, your foreign buyer stats are so dated. You cite 2015 stats showing the constitute 0.68% of transactions, but the latest data shows they now constitute over 4% of transactions since the foreign buyers tax went into effect. That is a 7 fold increase.

And what did prices do? Hmmmm…..right, they went up 20% for 2016 after the market had been comatose for many many years.

Did they go up because of a massive economic boon? Did they go up because people finally woke up to the benefit of low interest rates? Did they go up because the new mortgage rules have no effect? Did they go up because of Vancouver refugees flooding the city from the domino effect of foreign capital buying Vancouver homes? Did they go up because average incomes went up 20%?

Why the increase? Nobody cares about declining sales if there are no commensurate decline in prices. And sales declined because there is ZERO inventory – not because we are on the cliff of a downturn.

Victoria is calling for the foreign buyers tax to be extended to the city (its only in Metro right now). At least the city is smart enough not to take a ‘wait and see’ approach for half a decade like Vancouver.

http://www.cknw.com/2017/01/18/264039/?sc_ref=twitter

Sorry, VREU – you have been priced out and will be for years now….

#101 Smoking Man on 01.18.17 at 11:03 pm

SHIT!!!!! out of JD and wine.

#102 No Chance for O'leary on 01.18.17 at 11:08 pm

“WHO is all in with Kevin Oleary.”

(links below are from the CNBC archive)

Smoking Man,

You were absolutely right about Donald Trump, but O’Leary is not in Trump’s league.

He will be easy to tear apart. “Mr. Jobs” O’leary constantly argues to take the whacking stick to companies to extract value. He constantly advocates sending jobs to China. He also like to identify as a American I like the “We have laws” in that clip. That is easy to rip apart.

A strong jobs agenda could be the CPCs magic bullet, to pull in millennials and win elections. Won’t happen with O’leary.

#103 Braj on 01.18.17 at 11:12 pm

https://g.redditmedia.com/Ss4iZPnlWfzbNV6c9Y38NHCwwP_jp6WStatg4US2HFI.gif?fm=mp4&mp4-fragmented=false&s=4e7fdf8f921cb34436f9071011850fc0

Critiques?

#104 Smoking Man on 01.18.17 at 11:13 pm

#101 No Chance for O’leary on 01.18.17 at 11:08 pm
“WHO is all in with Kevin Oleary.”

(links below are from the CNBC archive)

Smoking Man,

You were absolutely right about Donald Trump, but O’Leary is not in Trump’s league.

He will be easy to tear apart. “Mr. Jobs” O’leary constantly argues to take the whacking stick to companies to extract value. He constantly advocates sending jobs to China. He also like to identify as a American I like the “We have laws” in that clip. That is easy to rip apart.

A strong jobs agenda could be the CPCs magic bullet, to pull in millennials and win elections. Won’t happen with O’leary.
….

Do you really want to bet against a Nictonite?

#105 acdel on 01.18.17 at 11:16 pm

I agree, interest rates will not rise in Canada for some time; we can no longer compete.

Hey, the Trumps, Brexit, Lepin, Fillon, O’ leary, bring them on; it is time to re-calibrate, the existing system is clearly broken; if this keeps up in the current way we are all doomed within a decade..

It is just time for things to change to a new direction, not the snowflake way but a new way. It is up to us.. :)

#106 Smoking Man on 01.18.17 at 11:16 pm

DELETED

#107 Prairieboy43 on 01.18.17 at 11:27 pm

Trade war dispute, penalizes motorcyclists. Between EU vs usa. http://www.cyclenews.com/2017/01/article/insane-tariff-levied-motorcycles-buried-euro-u-s-beef-hormone-trade-dispute/

#108 NoName on 01.18.17 at 11:31 pm

#9 Bastion on 01.18.17 at 6:25 pm

БaБa Ванга knew what is Apophenia.

#109 acdel on 01.18.17 at 11:37 pm

Man, this new delay post really is terrible, for whatever it’s worth, I do not remember at what time I made my original post was, probably will not see it until tomorrow or the day after, whatever!
I meant to say that Canadian interest rates will not rise due to us not being able to compete. Carbon Tax for a country that absorbs more then it contributes, ha!

#110 Ret on 01.18.17 at 11:43 pm

If I can’t speak fluent French, am I to believe that I am unworthy to be the Prime Minister according to our Canadian main stream media?

My MP, a well trained JT puppet, can’t speak French. How do they have a clue on what is happening, the substantive issues debated, or which way to vote?

How does JT meet with all those leaders in foreign countries when he doesn’t speak their language?

Yeah, I am a little sick of this MSM political crapola that only those who speak French can make a contribution for, or to lead the country. Linguistic racism?

Technology has overcome this language “problem” thirty years ago. Let’s move on and not make language a barrier to political office.

#111 Braj on 01.18.17 at 11:44 pm

#92 Kevin Li on 01.18.17 at 10:42 pm
#55 AJ on 01.18.17 at 8:34 pm

#16 kevin li the realtor
###############
YOU HAVE BEEN SPEWING THE SAME BS FOR WEEKS NOW. WE ALL KNOW YOU ARE A REALTOR TRYING
TO PUT A NEW SPIN ON A REAL ESTATE MARKET THAT NO LONGER IS FEASIBLE.

DON’T YOU HAVE AN OPEN HOUSE TO GO TO.
————————
Not a realtor and happy to have made hundreds of thousands of dollars in appreciation over the past, oh, 9 months!

Keep renting and keep angry.

You only make money if you actually sell.

#112 Ex-Van on 01.18.17 at 11:51 pm

Or just buy VUN (Vanguard U.S. Total Market Index), an ETF which charges just a 0.16% expense ratio.

#113 Socket Rockets on 01.18.17 at 11:59 pm

#90 Smoking Man on 01.18.17 at 10:32 pm

Writing a speech for my son’s wedding.

Hello everyone, first off, I would like to thank everyone for taken the time to drive out to a Bavarian country to share this very warm January day with Son2 and Socket 2. When you look at those two, warmness resonates, so It doesn’t surprise me that mother nature loves them as much as all of us do and held back a snow storm. She can be a real bitch.

Socket 2, what’s with the cut eye, I’m not talking about woman god damn it. I was talking about Mother Nature. So, she’s having a mid-life hot flash, doesn’t mean it’s permanent, doesn’t mean a man caused it.

That’s as far as I’ve got so far.

Hasn’t son1 already been divorced by socket1..!!!

#114 WUL on 01.19.17 at 12:09 am

Edmonton’s mood just got a boost. Ederle scored. 18 game scoring drought ends. But, it is still Edmonton. The East Berlin of Canada.

#115 WUL on 01.19.17 at 12:10 am

Sp. Eberle.

#116 DR WHO? on 01.19.17 at 12:13 am

Kevin O’leary is a goof, period.
Id vote for rat before i’d vote for him.
At least, rat is a rat and they don’t deny it.

#117 daytrader on 01.19.17 at 12:14 am

Are we talking about buying stocks today? Anyone here use Questrade? Are they better than the established ones such as RBC DI & TD Waterhouse, iTrade etc ?

#118 paulo on 01.19.17 at 1:20 am

seriously doubt steve made that comment without the advance knowledge of T2 do i detect a subtle shot across the tumpinators bow?

#119 Dan on 01.19.17 at 1:54 am

Thank you!

#120 Polls R Phake on 01.19.17 at 4:40 am

#101 No Chance for O’leary on 01.18.17 at 11:08 pm
“WHO is all in with Kevin Oleary.”

(links below are from the CNBC archive)

Smoking Man,

You were absolutely right about Donald Trump, but O’Leary is not in Trump’s league.

He will be easy to tear apart. “Mr. Jobs” O’leary constantly argues to take the whacking stick to companies to extract value. He constantly advocates sending jobs to China. He also like to identify as a American I like the “We have laws” in that clip. That is easy to rip apart.

A strong jobs agenda could be the CPCs magic bullet, to pull in millennials and win elections. Won’t happen with O’leary.
__________________________________________

O’Leary has also ALWAYS talked about slashing the size of giant wasteful fat inefficient govt. Course you will never hear that here because most of this blog is read during business hours by – people who work for govt. Or at least pretend to be working

GO KEVIN GO !!

#121 Stock Picker on 01.19.17 at 6:09 am

Poloz and Justin have run out of greater fools in Canada but know there’s millions of rich foreigners who make money tax free in the third world and will keep the real estate snowball rolling by keeping the dollar lower than all developed country values. Trudeau calls the rush to Canada good, but in fact we invite hot money which artificially inflates our real estate for locals….while making it cheap for foreigners. Bottom line we give money launderers sanctuary and screw Canadians out of ever owning a home. Low dollar plus lowering rates is a Canada milling strategy …. but exactly what Trudeau and Gerald Butts want is poverty.
..

#122 sylvester on 01.19.17 at 6:26 am

Stevie boy is playing a dangerous game. He may now be considered a currency manipulator by the trump squad.

Also, you better hope the trump squad doesnt hike the foriegn withholding tax on your etfs.

#123 jess on 01.19.17 at 6:39 am

The sterling ‘flash event’ of 7 October 2016
January 2017
factors
https://www.bis.org/publ/mktc09.htm

currency code of conduct
https://www.bis.org/about/factmktc/fxwg.htm

“race to the top”
financial stability board
http://www.fsb.org/what-we-do/

#124 dosouth on 01.19.17 at 6:49 am

I believe you had stated more than once over the past year that we would never see a drop again in our life time…..?

Rates did not drop. — Garth

#125 Victor V on 01.19.17 at 7:18 am

In a sign that Toronto’s real estate market is off to a hot start this year, a home on Palmerston Ave. north of Bloor St. near Bathurst St., went for $1.375 million. In December 2014, it sold for a mere $851,750 — $523,250 less.

https://www.thestar.com/business/2017/01/18/downtown-toronto-home-appreciates-62-in-two-years.html

#126 Tony on 01.19.17 at 7:27 am

We all know the real reason and it nothing to do with Trump. The real reason is the Bramponites will all end up losing their homes if Poloz has to raise interest rates. So welcome a 50 cent dollar and interest rate cut.

As well I see the exact same thing this guy sees for oil and add commodities to that and I’ve doubled my short position on Teck Corporation. Commodities are in a long term bear market just like oil is.

http://www.marketwatch.com/story/fund-manager-who-correctly-predicted-2014-drop-in-oil-now-sees-prices-in-the-30s-2017-01-19

#127 Tony on 01.19.17 at 7:41 am

Re: #3 Mike on 01.18.17 at 6:09 pm

Really huh?
Calgary home prices are down 20 to 25 percent since the October 2014 peak. Condos, apartments and townhouses are presently in a free-fall and have fallen on average about 30 percent as the vacancy rate goes skyward. The EI payments are running out and that means the residents of Calgary will sell real estate at any price so they can leave the province in search of work. They can’t rent out properties as all the renters are vacating the province in search of work.

#128 Wrk.dover on 01.19.17 at 7:52 am

#59 Vancouver in the Rearview on 01.18.17 at 8:49 pm
Hey Garth,

As a change of pace, would you write a column on vehicle purchasing versus leasing? Next to houses, cars are usually the largest purchase people make. Interested in your perspective on how to assess the rent versus lease decision.

—————————-

A GM dealer told me he LOVES leases. He cherry picks the resale cars and sends the dogs to auction. Aaaand he gets to serenade you when you turn it in, unlike if you bought it and take it elsewhere to trade.

Garth wants you to rent a house, so you can pick up and leave it at will, I bet he wants you to lease a car, so you have the same freedom at end of lease, and have not tied up cash or credit in the meantime.

I myself figure what is the point in being rich if you can’t buy a car outright and keep it as long as it is viable to trust as dependable.

Our only bought new car an 02 has never been back to the dealer except for the key recall, and until now has cost $123./month. I just spent $350 replacing the struts though, and had to do the intake gaskets many years ago for $100 in parts as well as front hubs and brakes sometimes.

The average age of my seven is 33 years and the average length of ownership is 21 years. The last time I had someone else touch one of my cars was in 1976.

Cars cost many people more than housing. Very overlooked expense that should be paid more attention to.

The poorest people on the planet dive Toyota, you don’t want to live like them, so why would you want to drive like them? BMW and Audi are the best of the best, until the warantee is up and so are they.

I spend time on mechanic chat rooms, where they discuss the stupidity of the designs of the cars they repair…..buy GM.

#129 pBrasseur on 01.19.17 at 7:54 am

WHO is all in with Kevin Oleary.

I have nothing against him personally, although I prefer Maxime Bernier for the moment.

I use to watch him regularly on the Lang & O’Leary exchange where he got to comment on a wide range of issues and thought he was right most of the time. He seem like a man of action, not afraid to take initiative and like to provoke a little bit.

I think he may be a bit too polarizing to win an election in Canada, there is not Fox news to balance things up.

Big problem in Quebec though were the guy is unknown and the media is leftist and anti-conservative to begin with, they’re already comparing him to Trump (which is bull) and are all over him for not speaking French, many will never get past that fact.

#130 Wrk.dover on 01.19.17 at 8:04 am

And oh yeah, just buy three or four steps above the entry level junk, if you go high end you lose…repairs are insanely complex.

#131 Trumpocalypse2017 on 01.19.17 at 8:10 am

1 Day to Trumpocalypse.

America bombing Libya.

The Bush family under a stealth attack.

Terrorists licking their chops.

Trump appointees desperate to hide how horrifically unqualified they are to hold office.

Wall Street swamp dwellers invading the White House, ready to crush Joe Average once and for all.

The Deplorables will only have themselves to blame.

Horror lies around the corner.

#132 jess on 01.19.17 at 8:39 am

humbling the most admired? 1989- 2013 rolls royce

https://www.ft.com/content/5c85eab6-dcd5-11e6-86ac-f253db7791c6

http://ec.europa.eu/internal_market/consultations/2014/foreign-exchange/docs/contributions/individuals-and-others/rollsroyce_en.pdf

https://www.treasurers.org/node/330473
…”In particular, the IBA and OECD were concerned by reports of last year’s Panama Papers leak, which showed that, in the course of assisting complex, offshore transactions, lawyers can either knowingly or unwittingly enable asset concealment or money laundering. Previous efforts to set global anti-corruption standards – such as the 2012 recommendations of the Financial Action Task Force (FATF) – have provided lawyers with a general framework for conducting due diligence on their clients and for identifying beneficial ownership.”

=

what’s in a name?
“Lobbyist” name change to “senior strategic adviser”
http://library.cqpress.com/cqresearcher/document.php?id=cqresrre2014060600

“Yet the industry continues to fight an image problem: In a 2013 poll, lobbying scored lowest among 22 professions on honesty and ethics
===========
https://www.nytimes.com/2014/03/10/business/staking-1-billion-that-herbalife-will-fail-then-ackman-lobbying-to-bring-it-down.html?_r=0

#133 Poloz the bird on 01.19.17 at 8:55 am

Poloz, probably knows he’s utterly powerless to affect the bond market and interest rates. that’s why the 5 year GOC interest rate didn’t collapse yesterday, and is up today.

it really doesn’t matter what he says or does. he lowers rates? big deal, loonie collapses further, and inflation will SPIKE .. the Bank of Canada has an inflation target of 1-3%. what’s he going to do if CPI prints at 5%? keep rates at 0.25%? sorry.

his hands are tied. he can talk all he wants. nobody is listening.

#134 };-) aka Devil's Advocate on 01.19.17 at 9:04 am

While not so on point with today’s topic generally in keeping with the theme of this blog…

Why rents are so high and supply is dwindling

Not to mention with today’s high property values it just makes sense to sell and crystalize your equity gains.

But real estate is a bad investment. Ya right.

#135 The Technical Analyst, CSTA, CPD on 01.19.17 at 9:07 am

FOREX:

Well, Garth. I guess that puts myself in the tiny 1% camp then, as I do, and am successful at, FOREX trading. In fact, it’s my most traded item. If you go back to Jan/Feb last year on THIS blog, you’ll see my calls to trade posted here. As well as my call when it hit 1.449 as well and my trade that day.

I think you have to be very, very good at reading technical to trade FOREX.

I can give you some of my FOREX mentors to follow on Twitter if you like to learn.

#136 Dups on 01.19.17 at 9:14 am

We need J Renaud to create a song/message to the Gov about the low mortgage interest rates just as he did for the Hydro bill.

Check it out here:

https://www.youtube.com/watch?v=ijDmVfUhOxQ

#137 maxx on 01.19.17 at 9:57 am

#35 Alberta Ed on 01.18.17 at 7:40 pm

“What could possibly go wrong with a silver-spoon socialist for prime minister?”

Being caught in the Trumped Trudeau pincer.

#138 Yanniel on 01.19.17 at 9:58 am

A word a wisdom Garth, please. (seriously, a word, please)

Let’s say I put 20% of my portfolio in a non-hedged S&P 500 ETF (valued in CAD), example VFV. Is this equivalent to have 20% of my portfolio in USD funds?

I mean, in this case, if the USD strengthen, then my non-hedged ETF position would swell, because the underplaying securities are valued in USD, but the ETF itself is valued in CAD. This difference should result in a positive gain for the ETF holder.

I ask this, because for meagre and poor DIY investors like me, the burden of exchanging CADs to USDs is significant. So, I though that using the approach above would save me the currency exchange while hedging me against the raising USD.

Thank you and God bless your Dog.

Yanniel.

#139 };-) aka Devil's Advocate on 01.19.17 at 10:00 am

#127 Wrk.dover on 01.19.17 at 7:52 am

Lease or Buy a car?! Really won’t be such an issue soon as electric driverless cars become the norm. You won’t own one. There will be Shuttle Services you call up on an app on your phone. It’ll pick you up and deliver you to where ever you’re going and then on to the next customer. Car insurance will be practically non existent as traffic accidents practically unheard of.

As for lease or buy. I use my car for work and can write off a portion. Leasing and buying are 6 of one a half dozen of the other in my experience. I drive a 10 year old upscale import which I dispose of before 200,000 K. They are as reliable as any and as far as maintenance, the overall cost is significantly less than brand new – lease or buy.

Bottom line is if there is ANY poor investment it is the automobile. What a stupid, iconic sense of self worth we place on that pathetic waste of money. The Google electric driverless car can’t arrive in my driveway soon enough.

#140 mike from mtl on 01.19.17 at 10:04 am

#111 Ex-Van on 01.18.17 at 11:51 pm
Or just buy VUN (Vanguard U.S. Total Market Index), an ETF which charges just a 0.16% expense ratio.
***********************************************

Exactly. VUN is a derivative swap of VTI. Just as VFV is VOO. I don’t see the wisdom of losing big on forex to and from US listed tickers.

Journaling listed currency ETFs is not that simple, there’s gotcas and minimums. plus certain tax sheltered accounts like RRSP cannot contain large amounts of cash other than CAD. Unless you have your broker ‘wash’ the sale.

That or get a totally separate USD only non-reg trading account. Again, what are you trying to gain or avoid?

Unless as an investor you’re planning on using those funds for living in the US or travelling often, it’s very inefficient for accounts less than seven figures.

#141 };-) aka Devil's Advocate on 01.19.17 at 10:10 am

Based on the direction North American society is headed, O’Leary is a shoe in.

Hey, I’m not sayin’ I like the guy just sayin’ North American society (U.S. of A. and Canada) is headed down the toilet. Who we elect is a reflection of what we’ve become.

#142 fancy_pants on 01.19.17 at 10:26 am

put the rates to zero and pull the GMO snow banana tree recipe out of the lab. Let’s do third world in style!

#143 fancy_pants on 01.19.17 at 10:47 am

overtaxing the rich: a cautionary tale

http://www.theglobeandmail.com/globe-investor/personal-finance/taxes/how-splitting-the-dinner-bill-relates-to-tax-cuts/article24441644/

#144 Braj on 01.19.17 at 10:48 am

#127 Wrk.dover on 01.19.17 at 7:52 am
#59 Vancouver in the Rearview on 01.18.17 at 8:49 pm
Hey Garth,

As a change of pace, would you write a column on vehicle purchasing versus leasing? Next to houses, cars are usually the largest purchase people make. Interested in your perspective on how to assess the rent versus lease decision.

—————————-

A GM dealer told me he LOVES leases. He cherry picks the resale cars and sends the dogs to auction. Aaaand he gets to serenade you when you turn it in, unlike if you bought it and take it elsewhere to trade.

Garth wants you to rent a house, so you can pick up and leave it at will, I bet he wants you to lease a car, so you have the same freedom at end of lease, and have not tied up cash or credit in the meantime.

I myself figure what is the point in being rich if you can’t buy a car outright and keep it as long as it is viable to trust as dependable.

Our only bought new car an 02 has never been back to the dealer except for the key recall, and until now has cost $123./month. I just spent $350 replacing the struts though, and had to do the intake gaskets many years ago for $100 in parts as well as front hubs and brakes sometimes.

The average age of my seven is 33 years and the average length of ownership is 21 years. The last time I had someone else touch one of my cars was in 1976.

Cars cost many people more than housing. Very overlooked expense that should be paid more attention to.

The poorest people on the planet dive Toyota, you don’t want to live like them, so why would you want to drive like them? BMW and Audi are the best of the best, until the warantee is up and so are they.

I spend time on mechanic chat rooms, where they discuss the stupidity of the designs of the cars they repair…..buy GM.

Looking for a car around $10k maybe a bit more, a few years old. Fuel efficient, not a bore to drive etc. Live in Toronto.

Any recommendations?

#145 traderJim on 01.19.17 at 11:02 am

#130 Trumpocalypse

You could save a lot of typing, just write:

“The end is near! The end is near!”

That would be easier to fit on your sign that you hold up on the street corner too

#146 traderJim on 01.19.17 at 11:06 am

Friend of mine bought a 5 year old very high end BMW, absolutely gorgeous car, perfect condition, carbon fiber everywhere.

Price new: about $135k
Price after 5 years in perfect condition: $40k

The only problem is trying to pay for any maintenance/repairs, you need a mortgage for those.

#147 Vanrentor on 01.19.17 at 11:21 am

“As a change of pace, would you write a column on vehicle purchasing versus leasing? Next to houses, cars are usually the largest purchase people make. Interested in your perspective on how to assess the rent versus lease decision.”

My personal opinion on the lease versus buy debate is if a car is expensive, say over $60K you lease it and if it is less expensive buy it. I have bought and paid for a few expensive vehicles over the years and between tying up my cash and the massive depreciation I would have been better off leasing. All the A7 jokes on here and i actually just bought a 2012 A7 and love it. No I am not a realtor :)

#148 Ronaldo on 01.19.17 at 11:37 am

#93 Smoking Man on 01.18.17 at 10:44 pm

Today’s pic? what’s in the dudes right hand is what I’m trying to figure out? A missed placed mouse trap is the first thing to come to mind. Anyone?
———————————————————
His right hand is on her right shoulder. Look closely.

#149 Waiting at the Border... on 01.19.17 at 12:06 pm

The BoC is going to be stuck between a rock and a hard place if Trump instigates Paul Ryan’s legislation for “border tax”
Dump the loonie to make Canadian exports competitive with American companies? Or fight inflation?

Cheers

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/fp-comment/ripping-up-nafta-should-actually-worry-canadians-less-than-this-horrific-republican-border-tax&pubdate=2017-01-19

#150 paulo on 01.19.17 at 12:07 pm

#127 to lease or buy the vehicle?
As a rule of thumb leases make sense if you can “write of” all or a portion of the cost i/e you use the car to make taxable income, or you like changing out your ride every 3-4 years.
if its a personal vehicle-no business use,purchasing is likely the best option,take advantage of discounted financing rates
cars are a constantly depreciating asset leased or purchased so do the math on both options

#151 Mel Eager on 01.19.17 at 12:12 pm

Oakville, Burl, Milton remains smoking red hot !!!
http://www.insidehalton.com/news-story/7070926-buyer-beware-average-price-for-a-home-in-halton-region-tops-800k-in-2016/
A realtor re-iterated what Garth has said in the past posts about homeowners not listing because they cannot afford
the next house, essentially trapped in their house. Inventory stays low, prices stay high, rinse , repeat.

#152 For those about to flop... on 01.19.17 at 12:36 pm

I believe Kevin Li ,when he says he’s not a realtor.

But I’m pretty sure he dresses up as one each Halloween…

M42BC

#153 Damifino on 01.19.17 at 12:38 pm

#138 };-) aka Devil’s Advocate

Lease or Buy a car?! Really won’t be such an issue soon as electric driverless cars become the norm.
—————————————-

I look forward to the day I can 3D print my own bedroom suite. It’ll be game over for The Brick.

#154 Andreas Marouchos on 01.19.17 at 1:00 pm

Hello Garth. I know you often speak of Gold as a non yielding asset, but as a long (very long) time Gold Investor I would like to ask you whether a position in Gold, no more than 5℅ of one’s portfolio is a good way to preserve your purchasing power.

Obviously not. — Garth

#155 Tan on 01.19.17 at 1:08 pm

#134 The Technical Analyst, CSTA, CPD on 01.19.17 at 9:07 am
FOREX:

Well, Garth. I guess that puts myself in the tiny 1% camp then, as I do, and am successful at, FOREX trading. In fact, it’s my most traded item. If you go back to Jan/Feb last year on THIS blog, you’ll see my calls to trade posted here. As well as my call when it hit 1.449 as well and my trade that day.

I think you have to be very, very good at reading technical to trade FOREX.

I can give you some of my FOREX mentors to follow on Twitter if you like to learn.
————————————-

I have been trying to learn for a while now, without much success. Could you share?

#156 Philski on 01.19.17 at 1:19 pm

#58 Smoking Man on 01.18.17 at 8:46 pm.
2 yrs ago I said to the wife Ill take Oleary. Ive got 2 companies running and we are so buried Gov Bull shit you can hardly move. These guys are absolute tax pigs.

#157 For those about to flop... on 01.19.17 at 1:23 pm

All I can say to you guys in the GTA is that in May of last year the average sold price for a house in Vancouver was 1.466m and in the blink of an eye it is now 1.129m or a 23% reduction.

Last years epic early year market was nightly news.

This year the weather is the big topic…

M42BC

#158 blobby on 01.19.17 at 1:39 pm

ALL my money comes from American companies.

I’m boned.

#159 Boots on the Ground in Ptld on 01.19.17 at 1:39 pm

#31 Seattle light
#32 Rick Fast
————————————————————–
Can either of you -or anyone- recommend a resource or financial advisor versed in dual citizen tax implications when it comes to investing either side of this insidious border? Garth is way out of my league, unfortunately.

#160 For those about to flop... on 01.19.17 at 1:45 pm

I forgot to mention that realtors can’t use lack of inventory as an excuse as to what’s happening in Vancouver.

It is higher than the same time last year when the rush to the summit was on ,and only a few hundred units less than the peak in March.

One thing that did crack me up last year was the fact that I sometimes work for small to midsize developers and builders ,and the same guys that seemed to have no problem paying 4/4.5 million for a knockdown in the tonier part of town ,suddenly thought that 6 million was a bit crazy.

Are you guys serious? It took the price of a block of land to pass 5 million before you worked out there was a problem?

As people used to say in Australia where I grew up..

Fair suck of the sauce bottle…

M42BC

#161 barneybenders on 01.19.17 at 1:57 pm

http://www.cbc.ca/news/politics/taxes-cra-facebook-big-data-1.3941416

Garth looks like the Feds are monitoring important social media …linkedin etc for tax info. The good news is that they did not specifically mention your site!

#162 Eks dee Sipal on 01.19.17 at 2:04 pm

#127 Wrk.dover

Interesting comments, but I disagreed with every point. First of all, you believed anything a car dealer told you, and a GM one at that. Second, you own 6 used cars and one ‘new’ car from 2002, but that means you have 7 used cars, that are about 20 years old. And you are complaining that cars are a bigger expense than houses for many people? I assume you needed a different one for every day of the week? Thirdly, judging someone’s wealth from the car they drive is pure $#@^&-ness. Fourthly, how many old used GM cars do you see on the road? I see plenty of Toyotas, though. I wonder how you got to be so rich…

#163 Eks dee Sipal on 01.19.17 at 2:12 pm

Okay, so the situation is getting pretty dire in the GTA. Most families mistakenly think they are OK, paying the mortgage so far, falling behind a little on the property taxes, though. And putting the rest of the monthly expenses on the Line of Credit, and God forbid, on multiple credit cards, flipping from one the other based on the current promotion of Balance Transfer. Half of all mortgages in Canada are backed by the Taxpayer via CMHC, but in many areas of the GTA, that statistic is probably around 95%. There is only one outcome to all of this, don’t kid yourselves.

#164 rjrt81 on 01.19.17 at 2:17 pm

Just going to leave these here. As most people in the comment section don’t know the difference between the two.

https://en.wikipedia.org/wiki/Democratic_socialism

https://en.wikipedia.org/wiki/Neoliberalism

#165 Eks dee Sipal on 01.19.17 at 2:21 pm

Do you remember what I told you about Kevin O’Leary? It’s a family business, politics. You can’t be famous unless you’re family. Remember that.

#166 Ponzius Pilatus on 01.19.17 at 2:22 pm

Showdown Trump vs. Merkel.
Me thinks she’ll have him licking his Schweinskoteletten.
Never bet against Mutti.

#167 Ole Doberman on 01.19.17 at 2:24 pm

Sounds like Der Trumpenfuhr has arrived in Washington.

I bet no protests this time as his biker buddies riding in on Fat Boys might have something to say about it.

Let the show begin!

#168 Euro observer on 01.19.17 at 2:41 pm

Stevie is an incompetent bureaucrat.
He still think he runs Canada export agency.
Central banker with no banking experience whatsoever.

CAD will be whacked. And with most of the fruits/veggies imported with USD I can’t imagine the pane of the people on fixed income at the grocery stores.

But Stevie’s belly will be full, why would he care about the retirees and the people on fixed income.

As I said holding CAD whose vales is determined by idiots is idiocy. It is that simple.

#169 Doug in London on 01.19.17 at 2:41 pm

About a month ago I read an article by former Bank of Canada governor David Dodge titled: Higher rates could help global economy. I won’t copy the whole article, but read a few quotes. He said boosting borrowing costs would help promote price and financial stability under current conditions, which include low interest rates and stagnant growth. A few other things he said include: The capacity of policy to deal with a major shock going forward is extremely limited. Also, low rates are widening inequality of income and wealth within many advanced economies, he added.

Obviously Steve-o doesn’t understand these ideas. To further drop interest rates would just further inflate bubbles, so the consequences will be delayed and more severe when inevitably rates start going up again. Further lowering of rates now is like treating hypothermia by jumping, butt ass naked, into ice water.

#170 jess on 01.19.17 at 3:02 pm

fake persona vs WYSIWYG

Mr. O’leary says his tv persona is FAKE tv to boost eyeballs (ratings)
however,
http://www.cbc.ca/news/opinion/kevin-o-leary-conservative-run-arlene-dickinson-opinion-1.3942349
===============================
doors close others open
http://www.therecord.com/news-story/7073370-companies-increasing-energy-storage-developments-as-renewables-grow/

#171 InvestorsFriend on 01.19.17 at 3:03 pm

Are the Rich Over Taxed? Or under-taxed?

#142 fancy_pants on 01.19.17 at 10:47 am said:

overtaxing the rich: a cautionary tale

*************************************
We have a progressive tax system and so the top 1% of and top 10% of taxable income earners certainly pay far more than 1% of the income taxes or 10% respectively. The rich pay MORE than their share on that basis.

But there are different ways to calculate things.

Imagine if you calculated your gross income as wages, interest, and dividends plus all capital gains (whether realized gains or not, so include that $100k rise in your house price even).

NOW, on that basis of “income” tell me the percentage tax that is paid by various people?

Example, last year I had a couple hundred thousand gain in my investment portfolios. Extremely little of that is currently taxable. Just some dividends and some realized capital gains are currently taxable, and then at a reduced rate versus wages.

The point is that you can be worth $20 million, have that grow to $24 million in a year and if it is all in unrealized capital gains there is zero tax due currently on that. ZERO!

It is fair to question whether that is fair.

There might just be room for a populist politician to come out and point out some of these things.

It may be that the middle class is getting hosed as those at the bottom clearly pay no taxes and those at the top can compound millions in wealth with no tax. And they pay advisors to find ways to get money out to spend tax free as well.

#172 conan on 01.19.17 at 3:09 pm

Obama was 84% in the polls when he first became POTUS. Trump is sitting at 42%.

WTF does this mean? Free sprinkles?

He lost the popular vote to a hated woman. — Garth

#173 InvestorsFriend on 01.19.17 at 3:10 pm

We Tax Unrealized Interest But not Unrealized Capital Gains

If you buy a zero coupon bond in a taxable account you have to accrue and pay tax on interest that you are NOT even receiving (if I am not mistaken).

If you have an unrealized capital gain on a stock, no tax is due.

Is this fair and consistent?

#174 Polls R Phake on 01.19.17 at 3:37 pm

DELETED

#175 TurnerNation on 01.19.17 at 3:46 pm

The Gold gods gave opportunity today. Dip the buys.
Short Shorty ever where else.

#176 Doug in London on 01.19.17 at 3:53 pm

Yes, I’m glad part of my portfolio is in US dollars, or as my economics instructor (many years ago) said, REAL dollars.

#177 InvestorsFriend on 01.19.17 at 4:17 pm

Encouraging Oil Production in Alberta

Imagine that oil prices are low and that Alberta is not the lowest cost producer region in North America.

How could Alberta attract more oil production for export to the U.S. (assume transportation is available)

1. Work to lower industry costs (work to lower wages lower all input costs)

2. lower royalties and taxes of all kinds.

Are there any other ways? If Alberta wants oil activity and jobs then I see lower oil royalties as the fastest way to do it. But does that also run afoul of trade laws. Trump would not like it.

Frankly if Alberta is a high cost oil production region, versus the U.S. why SHOULD such production be encouraged?

#178 Wrk.dover on 01.19.17 at 4:22 pm

Braj, the lowest kilometer Chev Malibu you can find for 7 grand. The rest will cover taxes, new front brakes, tires, and surprises.

I buy minimum 15 year old never seen wet cars in Arizona for grand and rebuild them myself for the fun of it.

Parts for obsolete GM cars are crazy cheap on line. I just built an engine and transmission for a grand, including all of the sensors for the electronic fuel injection.

I was raised on Fords, married a GM driver and saw the light under the hood. Simplicity.

Eks dee Sipal: you missed the point

#179 Wrk.dover on 01.19.17 at 4:52 pm

Hey Devilish Advocate, I hope those driverless cars smell better than the TTC inside….

#180 westcdn on 01.19.17 at 5:11 pm

O’Leary? My vote depends who he is running against – likely T2. Let’s get real; O’Leary is all talk and no walk. I can be wrong but my instincts say not. I agree that elites are pampered and public employees are overcompensated.

I want to see a smaller government take of the economy. I think consumption taxes (gst) are the best among a terrible lot. Trust me it seems shallow this days.

My charisma is zero so running for politics is a death sentence for me – I just can‘t lie full time. I won’t die on the vine.

#181 yycnotretired on 01.19.17 at 5:24 pm

@#170 –

What you’re missing is that my money ALREADY got taxed. I SAVED what was left, invested it, and when I take it out or it pays me dividends I get taxed on that”new money”.

You sounds like you are advocating for a tax on wealth – If 2 people start with the same after tax money, and one spends it and one saves, why should I have to pay a tax because I’m a saver?

#182 Alice on 01.19.17 at 5:45 pm

#169 jess on 01.19.17 at 3:02 pm

Exactly who should lead the CPC, someone who’s not real in public.

#183 DR WHO on 01.19.17 at 6:11 pm

That goose in the photo looks like a real skank.
Yikes

#184 Tony on 01.19.17 at 6:35 pm

Re: #162 Eks dee Sipal on 01.19.17 at 2:12 pm

Just saw the first ten percent reduction in the asking price in Markham. The entire housing market is all based on the Chinese paying more. Markham is 100 percent Chinese when it comes to someone buying a house. Haven’t checked Richmond Hill where housing prices have gone 40 (forty) fold in the past 32 years from 30 grand to 1.2 million for the exact same house. Roadkill in the making probably twice as bad as anything America saw in their market crash. Will keep informed. One of my relatives told me I think it was one street over from Sir Lancelot in Markham. 1,188,000 down to 1,050,000. Those new rules out of China enacted January 03 this year may be having the desired result.

#185 USD account ? on 01.19.17 at 6:42 pm

No need

Buy unhedged etfs

#186 bill on 01.19.17 at 10:06 pm

Thanks for the input on the usd blogdogs.

#187 Tony on 01.20.17 at 2:57 am

Re: #174 TurnerNation on 01.19.17 at 3:46 pm

If I’m reading the gold and silver market correctly the “monkey hammer” will come down this Tuesday (January 24, 2017). Remember like I said before the stock market always rallies big then they money hammer gold and silver usually the very next business day or sometimes the same day there’s a big market rally. The closer it gets towards the end of the month the easier it is for the FED and bankers to money hammer gold and silver as people sell their long positions usually around the last Friday in the month to lock in profits.

#188 It's Canada's turn on 01.20.17 at 2:59 pm

Vote O’Leary

Our only hope

This is not a political forum, and will not turn into one. O’Leary has the dough to buy his own exposure. So stop it. — Garth