Currencies

What to make of all the uncertainty in the world

What to make of all the uncertainty in the world…

Verico hosted an event this weekend and one of the key speakers was Michael Campbell.  Michael is an economic consultant and host of the radio show Moneytalks.  I’ve had the pleasure of meeting him on several occasions and hearing him speak at various Verico events.  The interesting thing is that his predictions are pretty much bang on all the time.  These are some of the highlights of what he said:

23 stock markets crashed this year, the U.S had 0 manufacturing jobs created in 2015, US has 25 trillion in national debt, $500 billion left China in the first half of the year, major changes are changing economies and there are many sources of manipulation. What does this all mean and how to put it all together?

The answer is that is all about the United States.  The one country that benefits from international crisis is the US.  When problems occur around the world, confidence in government decreases and people start to pull their money out of those markets and into safe markets with good returns which is why high quality US stock is the way to go.  He anticipates the US dollar to be the strongest in the world.  He also believes the EUR and CAN dollar will drop to .80 and .55 cents US.  The Canadian market is an insignificant player on the world stage.

What does all this mean for the Canadian housing market?

Loonie

Due to the fact that big money is going around the world looking for safety, not only will they invest in US stock but the high end Canadian housing  market will also benefit, especially in Vancouver and Toronto.  Affordability concerns will only affect the mid to low range purchases. There is no housing bubble since we do not and will not lend like the US and there are no numbers there to indicate a bubble.  With our loonie dropping, high end real estate transactions will increase and low interest rates are here to stay for a long time.

For business owners and individuals, the key to being successful in this market is to accept change and embrace it.  You need to understand that with change, there is opportunity.  You have to reinforce what you do and produce a plan.  Set goals and execute.  Knowledge is trust and you must do the right things long enough consistently in order to get ahead and stay on top.

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