Uncertainty ——

If there is one thing that investors hate it is uncertainty.

And we are heading in that direction as a Country.

Note 1

Canada’s major Banks have all been downgraded by Moody Investor Services. Why? The Rating firm is becoming concerned about the money Banks have loaned to consumers. Why? Because consumer debt continues to increase. The latest is that consumer debt is 167% of disposal income. Now that is high. So not only do we have a debt problem with Goevernments like The Federal Government and our largest Province, Ontario, and also with the other Provinces, but we have a consumer problem in that Canadian consumers are carrying too much debt. Here is apsrt of what Moodys said:

“Today’s downgrade of the Canadian banks reflects our ongoing concerns that expanding levels of private-sector debt could weaken asset quality in the future. Continued growth in Canadian consumer debt and elevated housing prices leaves consumers, and Canadian banks, more vulnerable to downside risks facing the Canadian economy than in the past.” said David Beattie, a Moody’s Senior Vice President.

Note 2

The BC election points to a very divided electorate , with a significant number of people supporting political parties whose program includes opposition to pipelines and support for increasing carbon taxes and other expensive alternate forms of energy . One has only to look at the debt levels in California and Ontario ,and their electricity costs to get a look at a future that parties in BC want to emulate.

Already the results of BC election are causing responsible people and organizations to express concern.

Premier Wall of Saskatchewan is quoted by Canadian Press as saying:’ –it would be bad for BC if a government were to say no to major projects like pipelines.’ He goes on to say: ‘ BC is a port province . Its economy , certainly the ports, depend on exports from other provinces. ‘

Canadian Press also quotes Desjardins Capital Markets analysts who say that : ‘ a minority Government in BC could present significant challenges for the Canadian Enery sector.’

Now add to that negotiations on NAFTA and we have a gathering disturbance, one could say.

Where is our dollar? Let’s just say that in such circumstances ( with low productivity and increased regulatory oversight to add) it is south of seventy five cents US with significant improvement unlikely. And if rises at all it will be because of that dastardly fossil fuel called oil that two political parties ( that could form the Govt) in BC love to hate.

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