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The exchange rate between the US and Canada is predictable with Trudeau.

December 3, 2015

National Post, Tuesday, December 1, 2015, Financial Post section (FP$):

Loonie not weak enough to effect change: Report by John Shmuel. Loonie dropped by 13% in 2015.

I, an American psychologist who retired to Canada is all smiles today with the money news. I retired as a college professor and moved from Los Angeles to Vancouver in 2000 and became an Exchange Junky, checking out the curve from WS every day, like many Americans living in Canada do. I gave a speech at Simon Frazer University on parapsychology and taught the nurses about a Near Death Experience (NDE) at Langara college and told my Canadian wife, “Vancouver is my place, honey, I love the people, the environment and the Exchange Rate.” That started my life long relationship with the US/CAN Exchange rate. Man, I was so “hot” then trying to master the trend. I went back 20 years checking the graph to find the business cycles of the 2 countries. There were times during Canadian boom that I got less loonies for my US checks and had to tighten  the belt while there were times during Canadian bust that I got more loonies for my US checks and started building a house.

Bonanza: In 2015 the loonie dropped by 13% as John Shmuel says in his article. I got $7,000.00 more for a $25,000.00 US check! Hurrah!  My appetite for loonies got wet, I love this country of “low energy” as Trump would say. “I expect the Canadian dollar to drop even more in 2016 untill the Canadian industry finds itself. More accurately, find its footing during the drop in oil prices and fracking (you may need Elon Mask the electric car immigrant to open a factory in Canada). There is no balance between exports and imports to the US, between low oil and high fracking. An expert economist named Hui expects the loonie to drop to 72.46 cents US. I will tell you why I think the loonie may drop even more. Can you imagine getting $40,000.00 CAN for $25,000.00 US next year?

The reasons are, 1) Trudeau was elected: Let’s face it, Canadians love their big government.  The new prime minister of Canada is a sweet cooperating liberal, the opposite of Trump, who is a mean, competitive conservative (the loonie will get weaker). Canadian liberals are like American democrats. They believe in saving money, not investing. They like mutual funds, not individual stocks (I see it as ‘misery loves company’). They relay on oil and big taxes for gov income, not capital gain and profits. They love government services. Poor industrial production and low oil prices will make the loonie unattractive to exchange for US dollars. You may have to spend $1.40 CAN to get one US buck for your business. 2016 is shaping up to be a great year for residents or vacationing Americans in Victoria, 2) Trump may be elected. I think he is noisy and too competitive, almost nationalistic for most nice Canadians. If Trump becomes president and the American dollar ears a higher interest rate as expected in 2016, US productivity will  zoom and you Canadians may have to part with $1.5 CAN to get one $1.00 US. (it happened in 2001). As I said in my last posting…life is good!

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