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Capital inflow continues Part Deux

Over the past 12 months, total capital inflow into Canada exceeded 6% of GDP ($112 billion).  Big winners are Corporate bonds which saw the largest increase, followed by Federal Gov't bonds.  The lowest growth was experienced by the provincial bonds -- maybe an overflow of the perception of municipal bonds in the US following Meredith Whitney's comments on that market...

(Source: StatsCan)

Most Canadian economists are talking about the CAD trading around 105/0.95 range tot he USD, recent studies (and trade numbers) show that Canada's manufacturing sector remains very competitive with America's despite the strength of the Canadian dollar (that will further improve as Canadian CAPEX programs initiated in 2009 and 2010 begin to bear fruits).

In a world of massive bank stimulus, and easy money Canada's central bank stands apart (or at least on the side).  The growth of money supply in Canada has been somewhat more reasonable

(Source:  Statistcs Canada & Bank of Canada)

In fact, among the G7, G8, G20, OECD Canada is probably the only country which is supporting a stronger currency.  That makes Canada very interesting for foreign investors.


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