March 13, 2006

Oh Canada!

Canada is the place if you believe in Oil, Gas and Metals. If you believe, as Richard Rainwater does,in $100 plus oil and $800 gold, why not use Canadian dollars to buy those stocks. Or, just buy some Canadian bonds. It is a leveraged way to buy those investments, much better than playing the futures markets for leverage.

The Canadian dollar has been a huge winner the last 3 years, running from 62 cents to near 90 on the US dollar. Canadians can't believe it, they don't believe it! I like that. That means they have been buying UNHEDGED all kinds of assets in the US - forever - condos, homes, stocks, bonds. They are like deers in the headlights as their US dollar investments have declined 40-50 percent, just on the CONVERSION. That is real money.

Until US monetary policy changes, the Canadian dollar is headed - HIGHER - likely past par. Canadians will bring their money home again - at the wrong time which means not anytime soon.

Yes, the strong Canadian dollar hurst the Canadian travel industry as Americans don't get the great deal they once did, but Canadians never wanted us there in the first place and we could care less about travel, we are interested in bonds, real estate and other hard assets. E-mail me if you want the name of brokers. If you are interested in diversifying, Canada is a rather simple way to do it.

Another interesting plus may be the new US Foriegn minister Michael Wilson. as Bill Cara notes today:

"Michael Wilson, Canada's new Ambassador to the United States, was received by the President today. I have met Michael Wilson privately, and I think the world of him. He's going to do a fine job because he understands politics and negotiating political/economic agreements, and is an expert at capital markets. He is friendly to America, and will be the best ally since former Prime Minister Brian Mulroney, who Michael Wilson once served as Minister of Finance, perhaps Canada's best ever."

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