The Dollar Dilemma

U.S.$ Index 73.06
Cdn$ 1.008 U.S.

For some time now I have suggested that Canadians should consider the possibility of a two-dollar dollar. i.e.: What if Canuks could pick up two U.S. dollars for a Loonie? (a Loonie is one Canadian dollar.)

I spoke about it, but I could hardly have believed that it was possible. Then I watched the U.S. Dollar Index drop below long term downtrending support (at 74.85). My math-based forecasts indicated that a U.S. Dollar Index breakdown was coming.

I immediately went looking for a new downside target for the U.S. Dollar Index, and I came up with the fifty-cent U.S. Dollar. Now it all fits – a fifty-cent U.S. Dollar, and a two-dollar Canadian Dollar.

I’m almost afraid to say this out loud, because should it come to pass, there will be gnashing of teeth for the many who fail to grasp the investment implications of the new currency paradigm.

Foreign investments were a panacea for Canadians while we were hewing wood and drawing water. It’s ironic to realize that those same foreign investments have the potential to wipe out our savings – and all because we are on our way to becoming one of the wealthiest oil producing countries in the world.

Hang onto your hats – I might just be right about this.