Bruce,
I don't want to offend our neighbors to the north, but economies based on commodity like materials are not likely to grow very much in the near future (perhaps rebound, but no real growth). Yes, Canada is largely a commodity based economy. I haven't been following the Canadian dollar lately, but I would guess that they are also weakening vs. the US dollar which has been declared "the safe haven". I doubt if you see a collapse in Canada ala the third world counties, but you could see erosion. Since Canada is our largest trading partner.... On the plus side, I hear that Vancouver is now a suburb of Hong Kong. That will eventually be a significant plus if Canada decides to use it.
The mitigating factor in all of this is the US is still a large consumer of foreign oil. If you take a figure of around $17/bbl last year at this time and compare it to perhaps the $14/bbl going forward (optimistic), American industry got almost a 20% discount on it's energy bill. It hasn't shown up directly in your electric bill, but some of it has shown up at the gas pump and it is one of the few reasons that companies large companies have been able to offset to some degree their inability to raise prices to offset increasing labor costs. It's not a huge positive number, but it is better than if we were caught in the other form of stagflation.
If you've read this far, you must be wondering how all of this mumbo jumbo impacts AIM. My guess is that for the first time since most of you started using the system, your cash levels are going to get tapped repeatedly and run down close to zero. Although I am just an rookie at trying to understand AIM and the implications, I would strongly suggest that AIM be concentrated in the companies that will survive an economic downturn and that you deploy your cash s-l-o-w-l-y.
BTW, I do own one Canadian company. PMCS. One of the best communications chip makers in the world based in Burnaby, British Columbia. I'm also considering NN. Management changes in June as well as sitting in the middle of a hot tech field should eventually pay off.
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Dave |
