• 151 days Could Crypto Overtake Traditional Investment?
  • 156 days Americans Still Quitting Jobs At Record Pace
  • 158 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 161 days Is The Dollar Too Strong?
  • 161 days Big Tech Disappoints Investors on Earnings Calls
  • 162 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 164 days China Is Quietly Trying To Distance Itself From Russia
  • 164 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 168 days Crypto Investors Won Big In 2021
  • 168 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 169 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 171 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 172 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 175 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 176 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 176 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 178 days Are NFTs About To Take Over Gaming?
  • 179 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 182 days What’s Causing Inflation In The United States?
  • 183 days Intel Joins Russian Exodus as Chip Shortage Digs In
  1. Home
  2. Markets
  3. Other

Are We That Certain Canada is Different?

The Zero Interest Rate Policies ("ZIRP") being pursued by the Bank of Canada are just as likely to have the same dramatic results for the Canadian FIRE sectors (Finance, Insurance and Real Estate) as they did for the US. Does anyone truly believe that real estate operates on different principles in Canada?

US versus Canadian Houses


Will We Add 70 MOBD Production in Next 20 years?

Can we find 40 million barrels per day of new conventional oil in the next 20 years and add another 30 million barrels per day from other sources - ie the equivalent of almost the entire current production base?

IEA 2030 Oil Production
IEA 2030 Global Oil Production Forecast


Baby Boomer Equity Market Head-wind

Simple issue. Baby boomers have a high percentage of their net worth in stocks. As people get older they sell stocks, reducing their holdings (Chart 25). The developed world is getting older (Chart 26). Net result is more sellers than buyers for public equities leading to lower price multiples in the developed world?

Boomer Equity Headwind


ZIRP, Pension Plans and Unintended Consequences

Apparently the Bank of Canada ("BOC") is concerned that low interest rates are bad for pension funds. Isn't the BOC in charge of interest rate policy? The chart below was produced by the BOC and in its words "aggregate solvency of defined-benefit pension funds in Canada is close to an all-time low". Perhaps they should reconsider their ZIRP policy?

BAC Zirp and Pension Plans

The BOC is not the only entity sounding the alarm about ZIRP and pension fund liabilities. According to a recent C.D. Howe Institute if public-sector pension plans were forced to determine their liabilities using current yields in their return assumptions, the unfunded liability would be $227 billion - "Ottawa's calculations do not reflect investment returns available in the real world" in fact the return assumptions used by the federal government "are well above anything currently available on any asset that matches the plan's obligations," Of course under-estimating unfunded pension liabilities serves a political purpose - it allows the Federal government to claim a better fiscal position than is reality. For example, according to the report the deficit in 2010-2011 would have been $47 billion if the unfunded pension liabilities had been included, and not the $31 billion reported - 50% worse. When practiced by the private sector, accounting practices like this are charitably described as dubious and misleading.

Regards,

 


Agcapita Farmland Fund III

If you are a resident of BC, Alberta, Saskatchewan, Manitoba or Ontario and would like information about investing in Agcapita Farmland Fund III (including via your RRSP) please Click Here to be contacted.

 

Back to homepage

Leave a comment

Leave a comment