Canada May face a Recession the USA Not!

[SASKFARMER3]

[malleefarmer]

Aussie dollar briefly falls below 68 US cents, its lowest in 10 years How much will your Aussie dollars be worth, and your mortgage cost, later this year?
The Australian dollar will fall to 60 US cents this year and remain there next year, according to an updated forecast from a major economics research house.

Key points:
Capital Economics is tipping a 16 per cent fall in the Australian dollar this year
The forecaster predicts it will remain at 60 US cents through 2020
The lower dollar is expected to sustain the recent boom in tourism and education
That would be a 16 per cent fall from the current exchange rate and take the local currency to its lowest level since it briefly hit 60 US cents in October 2008, at the height of market panic during the global financial crisis.

At that time, the currency quickly rebounded to 90 US cents a year later and a peak of $US1.10 in July 2011, as Australia's economy rapidly rebounded from the financial crisis and interest rates went up here, while the US endured a severe recession, near-zero rates and a quantitative easing program that saw the Federal Reserve injecting trillions of dollars into the banking system.

However, this time around, Simona Gambarini from Capital Economics does not foresee a quick rebound from any fall as it is the Australian economy's turn to face severe challenges.

"We have changed our view of the future direction of interest rates there as we now think that the ongoing downturn in the housing market will deepen, causing GDP growth to fall below potential," she wrote in a note.

"In light of this, we think that interest rates are more likely to fall than to rise in 2019 and 2020."

Capital Economics is tipping that the Reserve Bank's official cash rate target will be 1 per cent by early next year, down from 1.5 per cent currently, as it battles to arrest the nation's worst housing downturn in decades and a slowing economy.


This housing downturn is different
Australia has had housing downturns before, but they usually happen when interest rates are high or rising, not at record lows.
While Ms Gambarini also expects US interest rates to fall half a percentage point, from current levels of 2.25-2.5 per cent to 1.75-2 per cent, by the end of 2020, she does not think that will provide a significant boost to the Australian dollar.

She is predicting the Aussie will still be worth 60 US cents in 2020, down from a previous forecast of 70 US cents.

Other than a declining housing market and Australian rate cuts, Ms Gambarini said falling commodity prices would weigh on the local currency.

"We think that they will generally decline this year as China's economy, which is a major trading partner of Australia, slows further," the economist wrote.

"We expect especially large falls in the prices of iron ore and coal, which together account for 30 per cent of Australia's exports."

The other factor that will drag the currency lower is a general aversion to risky investments at the moment.

"We expect the US stock market to come under pressure again in 2019," Ms Gambarini forecast.

"On past form, when that has happened the Australian dollar has tended to fall."

[farming101]

Look for machine dealers and parts sellers to front run this news with another hefty hike in prices for equipment and parts

[farming101]

Hahahahah. IN the USA

The federal deficit soared last year to $779 billion and is projected to approach $1 trillion in 2019.

Interest on U.S. debt is projected to total $7 trillion over the next decade and, by 2026, will become the third largest category of the federal budget, according to the Peter G. Peterson Foundation, a nonpartisan organization dedicated to addressing the country’s long-term fiscal challenges.

To pay for years of deficits, the federal government must borrow money. Roughly half of the U.S. debt is held by foreign countries, such as China, Japan and Saudi Arabia. China alone holds more than $1 trillion in U.S. debt.

At the end of FY 2019 the total government debt in the United States, including federal, state, and local, is expected to be $25.86 trillion.

Interested in your view of what would be the right amount of debt for the US. It seems you think it is too high now.
There is roughly 15.589 trillion of debt in marketable securities (bills, notes, bonds) held by the public as of Dec 2018.
Should those be cleared first? And what would that mean for the world's economy if they were?

[MBgrower]

No Chuck, sheer wont make Canada great again. That ship has sailed for good with this stupid socialists experiment. We wont be able to out the monster back in the bottle now. Its all about just limiting the damage so the smart money can reposition itself out of here. If Trudeau gets in again, Canada will failed or it will fracture. There is no scenario where he comes out on top. If he wins power he loses the country and he can be Prime Minster of Ontario and Quebec. That's basically all he is now anyway.

The prairie provinces would be much richer if we form an economic partnership with the US.

Correction, he will be PM of metro Vancouver, Montreal, and Toronto. that is really what this country is.