PRICE OF US MONEY!
10-26-2008, 10:43 AM
#31
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Originally Posted by iDomN8U,Oct 23 2008, 07:46 AM
Only if you can see the future... it's a gamble.
I'm still not sure why the dollar is where it is now, with the economic condition of the U.S, the dollar should be weaker then ever.
I'm still not sure why the dollar is where it is now, with the economic condition of the U.S, the dollar should be weaker then ever.
As the U.S. crisis continues investment will weaken south of the boarder and move elsewhere, some of it back into Canada boosting our dollar, but it will be 6 - 12 months before we see parity again, most likely closer to 12 months.
10-26-2008, 05:57 PM
#32
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Originally Posted by MOTU,Oct 26 2008, 10:37 AM
That's unfortunate. Given the U.S. market is going to take longer to recover than ours, and our dollar is going to move up compared to the green back in the next 6 - 12 months. I would look at every pop in the market as an opportunity to sell your U.S. positions. Unless your holding very blue chip companies with a 3 - 5 year time horizon.
10-26-2008, 09:02 PM
#33
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MOTU, that's not quite how it works.
S2K Type R pretty much nailed it. The strong dollar (CDN) was a result of the bubble in oil, gold and just about every other commodity out there. It's a product of demand for Canadian exports, paid for in CDN$ which causes a serge in demand for the loonie. That isn't going to recover any time soon and is likely to fall into the mid-high $0.60US range by the middle of next year as the price of our exports continue to fall on lower demand world-wide.
We are 1-2 years behind the US economic cycle. If the US bottoms this year (doubtful) then we aren't going to bottom in Canada until the end of 2009 at the earliest, most likely the end of 2010.
The window of opportunity to load up on US$ is closed now and it makes no sense to pursue it. The time for that was at $1+US. I'm not a currency trader so I have no idea what's good now but I know that the best opportunities come from finding imbalance (bubbles and troughs) in markets.
Those with US$ assets are best to hold them for at least another 2 years. We aren't going to see the dollar anywhere near par for at least a decade or two. The whole growth picture has to be completely reset and started over. Things aren't going to go back to what they were a year ago after a pause.
S2K Type R pretty much nailed it. The strong dollar (CDN) was a result of the bubble in oil, gold and just about every other commodity out there. It's a product of demand for Canadian exports, paid for in CDN$ which causes a serge in demand for the loonie. That isn't going to recover any time soon and is likely to fall into the mid-high $0.60US range by the middle of next year as the price of our exports continue to fall on lower demand world-wide.
We are 1-2 years behind the US economic cycle. If the US bottoms this year (doubtful) then we aren't going to bottom in Canada until the end of 2009 at the earliest, most likely the end of 2010.
The window of opportunity to load up on US$ is closed now and it makes no sense to pursue it. The time for that was at $1+US. I'm not a currency trader so I have no idea what's good now but I know that the best opportunities come from finding imbalance (bubbles and troughs) in markets.
Those with US$ assets are best to hold them for at least another 2 years. We aren't going to see the dollar anywhere near par for at least a decade or two. The whole growth picture has to be completely reset and started over. Things aren't going to go back to what they were a year ago after a pause.
10-27-2008, 04:21 AM
#34
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Originally Posted by cthree,Oct 25 2008, 11:33 PM
You don't buy currency in cash, you do it in debt. Cash is a depreciating asset. A US t-bill on the other hand pays a yield and is guaranteed, just like cash.
10-27-2008, 11:50 AM
#36
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Originally Posted by iDomN8U,Oct 27 2008, 08:21 AM
Would that mean you had a captial gain and reflect on your income? Buying straight $$ wouldn't have a tax effect.
It gets a little tricky.
10-27-2008, 11:59 AM
#37
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There is no tax on gains on FX.
There is a new tax free account being launched.
Max contribution: $5,000 per annum
Capital Gains: No tax ( not even on 50%)
Withdrawals: No tax either
Kind of like a RRSP but better imo. Would be awesome for the 100%+ gains we were used to on venutre in the good ol days.
Now only if them penny stocks make a comeback, I can finally put a deposit on the R8
There is a new tax free account being launched.
Max contribution: $5,000 per annum
Capital Gains: No tax ( not even on 50%)
Withdrawals: No tax either
Kind of like a RRSP but better imo. Would be awesome for the 100%+ gains we were used to on venutre in the good ol days.
Now only if them penny stocks make a comeback, I can finally put a deposit on the R8
10-27-2008, 12:02 PM
#38
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Originally Posted by cthree,Oct 25 2008, 10:33 PM
You don't buy currency in cash, you do it in debt. Cash is a depreciating asset. A US t-bill on the other hand pays a yield and is guaranteed, just like cash.
A non-depreciating asset in a true sense would be TIPS (inflation adjusted t-bills)
10-31-2008, 12:24 PM
#39
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Originally Posted by cthree,Oct 27 2008, 12:02 AM
The strong dollar (CDN) was a result of the bubble in oil, gold and just about every other commodity out there. It's a product of demand for Canadian exports, paid for in CDN$ which causes a serge in demand for the loonie. That isn't going to recover any time soon and is likely to fall into the mid-high $0.60US range by the middle of next year as the price of our exports continue to fall on lower demand world-wide.
We are 1-2 years behind the US economic cycle. If the US bottoms this year (doubtful) then we aren't going to bottom in Canada until the end of 2009 at the earliest, most likely the end of 2010.
The window of opportunity to load up on US$ is closed now and it makes no sense to pursue it. The time for that was at $1+US. I'm not a currency trader so I have no idea what's good now but I know that the best opportunities come from finding imbalance (bubbles and troughs) in markets.
Those with US$ assets are best to hold them for at least another 2 years. We aren't going to see the dollar anywhere near par for at least a decade or two. The whole growth picture has to be completely reset and started over. Things aren't going to go back to what they were a year ago after a pause.
With China's demand for commodities set to explode; 50,000 new sky scrapers by 2025, 200+ new cities with one million plus people by 2025, our commodities will be in demand like never before. Of course that does not speak to my comment of our dollar improving in 6 - 12 months. The U.S. is set to embark on a near zero fed rate, much like Japan did. With U.S. Treasuries at all time lows, money is going to seek out better returns in other countries, Canada will be one of those.
I agree that the time to buy U.S. dollars has passed, for now. But parity 10 + years out?? Nope, can't agree there.
The beauty of these discussions is the U.S. just has to start another war and the whole picture changes again.
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