Canada's Currency Devaluation Reasons

The Canadian Dollar is sinking, the US Dollar is rising, but this is not because Canada is a crappy market to invest in.

You have to ask: "Where all the investment dollars have come from in the past?"

Mostly the U.S. and Europe, with a healthy side from Asia/China.

The world wide stock markets have collapsed an average of over 50% now. Something like 37 Trillion dollars has vaporized from the world economies in just over 2 weeks.

Many larger investors use one of 2 practices that is extremely risky:

• Hedging - This is betting a stock or currency will go up or down। If they bet wrong, they have 2 choices. Lose the investment completely, or come up with the cash to buy it out completely.
• Leveraged Stock Buying - In the past many were buying as much as 100 stocks for the price of one. This was fine if they bet right, because they can sell for a profit. However if they go wrong, again they have 2 choices. lose the investment, or buy the other 99 shares and sit on them until the market turns around.

This way, with the market melt down, and banks not lending any more money than they have to, these investors need all the cash they can get. Fast. That is why you are seeing absolutely everything being sold. Most countries foreign currencies, Oil, Gas, Gold, Silver, everything worth any money is being sold to cover bad bets.

The impact is a worldwide meltdown we are seeing.

How much farther it goes? Who knows. Warren Buffet is buying stocks, and he didn't get to be the planet's richest man by being stupid... So hopefully this will normalize soon.

As to the lower dollar, most analysts had forecast a dollar leveling in the 85-88 cent range for a period before a slow increase because of Canada's strong fiscal practices. This lower spike is definitely oversold. It will come back, and I think sooner than later.

As to our Canadian lost "increased buying power" ...some things dropped well, like electronics But Cars were a joke. You could still save $8,000 on a $40,000 vehicle from the U.S. just a month ago. The Canadian car companies fed us nice ads and lip service, but dropped the overall price an average of around only 5% not anywhere near the 20% that they were overcharging us.

High end vehicles in the 80k range you could still buy in the US for nearly 30,000 cheaper. Books and magazines - they fixed their prices by taking off the U.S. price. They didn't reduce their prices, not even 10 cents! So I stopped buying them in Canada.