US, world headed for 25 year depression: Jim Rickards

US, world headed for 25 year depression: Jim Rickards

“When I use the phrase 25 year depression, it sounds extreme but it’s not. We had a 30 year depression in the United States from about 1870 to 1900…The Great Depression lasted from about 1929 to 1940. The U.S. is in a depression today.” Well, it's been in the works for

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Canadian banking haven myth exposed

Canadian banking haven myth exposed

"One of the reasons that Canadians (and international commentators, other finance ministers and global financial institutions) buy this Canadian banking fairy tale is the way the government accounts for the money borrowed to support the banks." The sorry spectacle of Conservat

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Get rid of your mortgage, loans, because interest rates set to rise

Get rid of your mortgage, loans, because interest rates set to rise

Get rid of your loans, guys and gals, because we are going into a high interest rate period. Very high. It will be the equivalent of going into the double digit interest rates we had in the 80s where many people threw their house keys at the bank and we had record numbers of ba

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E-cigarettes save lives, money

E-cigarettes save lives, money

"We know that cigarettes have thousands of chemicals in them and we know that they are killing us. They have been for over a hundred years. So now, the e-cig industry comes along with only one or two chemicals in their mixture and people are freaking out over these as well. Whe

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US inches closer to big bank charges

US inches closer to big bank charges

Federal prosecutors are nearing criminal charges against some of the world’s biggest banks, according to lawyers briefed on the matter, a development that could produce the first guilty plea from a major bank in more than two decades. In doing so, prosecutors are confronting

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Canada’s home sales top predictions; why a real estate crash is inevitable

Canada’s home sales top predictions; why a real estate crash is inevitable

“The assurance of relatively low borrowing costs has likely given home buyers confidence while rising home values have kept new listings at a healthy level. Stable employment has provided some assurance to owners and buyers alike.” Our website is back after many months of

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Comparing today’s recession/depression to the 1980 recession

Comparing today's recession/depression to the 1980 recession

"Much like today, Americans were concerned not only with high unemployment but increasing budget deficits in the early 1980s. A September 1983 Gallup poll found that three-fourths of the public agreed that the federal government's budget deficit was a great threat (42%) or some

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Why savers are getting screwed

Why savers are getting screwed

"Without the intervention of economic policymakers, interest rates would be naturally higher. That would increase the cost of borrowing for businesses and consumers, but there would be some offsetting economic benefits. Savers are getting screwed by the current monetary policy

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Geithner admits USA bankrupt to US Senate

Geithner admits USA bankrupt to US Senate

"Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States. Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses

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World economies on verge of currency revaluations to deal with debt

World economies on verge of currency revaluations to deal with debt

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." -- Henry Ford Basically what the world central banks are doing is increasing their money by devaluin

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Is Obama the next Mugabe of Zimbabwe?

Is Obama the next Mugabe of Zimbabwe?

"America, Britain, Japan, Germany, France, Sweden, Holland, Norway, Canada and Australia make up the Fishmongers Group and their meeting on Tuesday will deliberate on the state of the inclusive government, debt relief, public finance administration and the controversial economi

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US raiding foreign countries with dollars, not soldiers

US raiding foreign countries with dollars, not soldiers

""The United States is going to China and saying: we want you to commit economic suicide, just like Japan did. We want you to follow the same thing: we want you to revalue your currency, we want you to squeeze your companies, we want you to go bankrupt,” says Michael Hudson,

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Content By: The Coming Depression Editorial Staff (dates cited below)
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loonie specs
Canada’s loonie hits parity with U.S. dollar
Greenback also reached a new record low against the euro
By the Associated Press

The dollar took another fall on currency markets Thursday, reaching one-to-one parity against the Canadian dollar for the first time in 30 years and falling to a new low against the 13-nation European currency.

The dramatic half-point cut in U.S. interest rates announced this week, while aimed at shoring up U.S. credit markets, also had the effect of further weakening the dollar versus other currencies by reducing the cash yield on dollars. A lower dollar can make travel more costly for U.S. residents and can also pose the risk of making imported goods more expensive over time.

But for Canadians, it could mean more shopping trips to the U.S. as their loonie reached parity with the U.S. dollar for the first time since November 1976. That means one U.S. dollar now buys one Canadian dollar. The loonie rose sharply against its U.S. counterpart this week after the Federal Reserve’s surprising rate cut. The spreading interest rates between U.S. and Canada, which kept its equivalent rates stable, could make America’s northern neighbor a more attractive place for German, Japanese, American and other foreign investors to put their money.

The euro breached the $1.40 barrier against the dollar on Thursday. That level had long been seen as a key benchmark in terms of solidifying the euro’s position on currency markets and giving it momentum toward becoming a reserve currency of choice — a position long held by the now-weakening dollar.

The 13-nation euro bought as much as $1.4064 in morning trading in Europe before falling back slightly to $1.4040, above its previous high Wednesday night of $1.3987, and more than the $1.3964 it bought in late New York trading.


It is about time for inflation to be calculated on real costs.Just to say the loonie buys more because of its current high value retail thus reducing cost is eroneous. In order for the loonie to reflect a saving for consumers, business has to pass on its savings on inventory. This they never do. To say the market prices reflect the prices at the retail level is a lie. There are all sorts of information available to show this theoretical reasoning cost reduction is not representative in the the retail pricing. For example we can show the yin and yang of pricing benchmarks for fuel in British Columbia. Retail regular gasoline in Abbotsford BC is 90 cents a liter, on Vancouver Island it s as high as $ 1.12 a liter. So which figure is utilized when calculating inflation and what it is benchmarked to. For those on fixed incomes there are other depletions that affect their welbeing.

Governments are the worst; they imposes care home rent increases of 10% for independent living costs, raise Medicare premiums 6%, and include previously non-taxable items as now subject to sales tax. On the average of $ 100 this assault on income is $ 28/100. So Because fuel was $ 1.55/liter a year ago and only $ 1.05 this year does not mean inflation has disappeared or gone down. Ideal inflation as per the BOC is 2.5%, Therefore incomes should escalate at 5% to manitain the values and allow families to grow at a minimum standard.


Factors Driving the 6-month Rise in the Canadian Dollar

BNN economist Linda Nazareth points out the four major reasons the loonie is going up and unlikely to encounter any significant obstacles in the near term.

1. US Dollar Weakness.
Both US currency and US economic fundamentals remain weak and show no signs of strengthening in the near term at all. The national debt and both deficits are rising, the money supply is growing, and the Fed will not be raising interest rates as long as unemployment remains low and the economy shows no signs of real growth.

2. Commodity Prices Rising.
Canada is a resource nation and the Canadian dollar is a commodity currency. Often the loonie is driven by energy prices, but recently it is gold and gold’s new highs (today breaking through $1070/oz.) that have the loonie spiking higher. You might want to take a look at the world’s largest gold stocks or Canada’s top 20 gold stocks.

3. Improving Canadian Fundamentals.
The Canadian economy is bouncing back. Especially following last Friday’s positive jobs report, investors and traders are coming back into the Canadian dollar as opposed to other currencies. Further, Australia’s recent rate hike suggests to some that the Bank of Canada might be following behind, if not soon, at least sooner than mid-2010. If you’re bullish on the Canadian economy in general, take a look at Canada’s income trusts for monthly yields often tied into the energy and real estate sectors.

4. Reserve Currency Diversification.
Many central banks around the world are diversifying the currencies they keep in reserve. Rather than hold a majority of their wealth in US dollars, they are opting for currencies that pay more in interest – such as Australia, and now perhaps Canada, too, for the reasons laid out above.

Related posts:

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