Stockman Scott's Political Debate Porch Message Board

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Politics : Stockman Scott's Political Debate Porch

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To: stockman_scott who wrote (9184)	11/13/2002 3:55:24 PM
From: Jim Willie CB	Read Replies (1) of 89467

clip from Daily Reckoning, Andrew Kashdan on inflation trade Canada is running a surplus, which keeps Can$ stronger Finally, any discussion of the inflation trade isn't complete without a look at the prospect of a weakening U.S. dollar. The threat of inflation only tightens the noose on a currency already suffering the effects of the mammoth U.S. current account deficit. One way to play the greenback's weakness is to go long the Canadian dollar, which also tends to move with commodity prices. The 'loonie' has rallied more than 2 & 1/2% since early October, a fairly significant move, particularly if you're using options as leverage. Our northern neighbor's currency also does well in an improving economy, but it might benefit additionally from a period of global risk aversion. The reason, quite simply, is that Canada is running a current account surplus of about $12 billion, compared to a U.S. deficit of more than $400 billion. Unlike the United States, Canada doesn't have to worry about attracting foreign capital to plug its financing gap. The euro's recent rally indicates that wariness about the greenback is growing, and buying the loonie allows us to take the same side of the bet without having to invest in a struggling European economy - or even worse, a still-sinking Japanese economy. good to see some data to hang a hat on a slower economy only hurts the Looney if European economies are more brisk it is all about funding the account deficit and federal deficit now I just need some quoted data on Canada's fed budget any numbers off the top of your head / jim p.s. I am all excited about my opportunity to interview Sir Alan GreenScheiss is his ownership of huge TBill holdings a conflict of interest? we will have to ask him

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