Canadian Perspective

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QUESTION: Hello Marty. I so appreciate your blog and Socrates, which is helping me steer through these crazy markets. I’m a Canadian taking care of all my family’s investment accounts, and knowing what’s coming down the road, I’m very concerned I’m going to take a misstep, especially with my children’s accounts. I haven’t been doing this long enough to have experienced a monetary crisis anywhere. What I can’t get my head wrapped around is what to do longer term from the Canadian perspective. We all have both USD and CAD funds in our accounts. I plan to increase the USD portion while the CAD is down. I’m also buying US investments in CAD (unhedged) to catch the rise in currency. But when the USD peaks and the crash and burn begins, my assumption is Canada has a boom in metals commodities while oil crashes due to lack of demand and we also go into recession due to lack of exports to the US and so lower employment. So what is a Canadian’s smart move when the USD peaks……cash out our USD investments and turn back to CAD and invest in commodities, etc. or would I be better off staying in the USD and buying inverse etfs and commodity stocks/etf’s that aren’t available on the TSX? Just trying to get a handle on what ultimately happens to Canada in all this. Thanks so much for any insight you may have on this topic.

ANSWER: We are in the staging process right now and that means we must push everything to the limit. In the case of the C$, that major point remains well above the market at 8840 level. It will require a monthly closing above that level to reverse the trend creating a bull market for the C$.
In order to create these big moves, we absolutely must push everything in a counter-trend move to its extreme in order to trap everyone and that provides the fuel for the next great wave. Everyone gets so convinced about any trend with just a brief rally like euro, pound, C$, gold or oil.  This is how markets suck people in to lose money. Trends are defined not by a single market, but by a group of markets that all are interlaced and confirm one another. This is the entire purpose of allowing access to our Global Market Watch so you can visually see the global trend unfolding together.
We are approaching the point-of-no-return when people wake up and begin to lose confidence in government. Until that happens, we remains treading water. The Dow has not broken out until the Phase transition begins. This is also why the metals rally but fail to really make impressive new gains.