For the first time since American revolutionary war traitors fled to Canada to escape the wrath of General Knox, Washington and others, they’ve become a dignified creditor to the United States.
Canada’s net asset position with the U.S. was C$82.2 billion ($61.6 billion) in the fourth quarter, the first ever positive figure for the country. Canada had a net liability position of C$39.9 billion in the third quarter. The average since 1990 has been a net liability of C$248 billion.
There’s a sundry of reasons why this is the case, mostly to do with a lot of petrol dollars not having investable options at home. Ever since the Blackberry collapse and subsequent melt down of a once promising tech industry in Canada, investors have had very few places to invest, domestically. So, like all smart people around the world, they come here to invest in the future.
This just about sums it up.
On the other hand, the data also suggest a reluctance to acquire Canadian assets, even with a weaker Canadian dollar. Direct investments from the U.S. into Canada have fallen over the past year, while portfolio investments have been little changed.
Nortel.
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Canada has no companies to invest in, except perhaps their banks—which are becoming irrelevant.
As a Canuck, years ago I converted all my capital from Loonies to Greenbacks. I await the day when the Loonie falls over dead and sinks to the bottom of the lake. Sometime soon methinks.
It already did that through January. What makes you think it’s going back down?
I’ve always invested mostly in the US despite being in Canada. Way more high quality options to chose from. Only world class plays left in Canada are the banks and one or two resource companies. OTOH, the TSE has been a bear market for some time. If oil recovers, it could make a decent move higher. Also, the USDCAD has been imploding recently, following a big run up.