Fakeconomics . . . .

[errolanderson]

Strap-in . . . 2021 may be the year of corporate bankruptcies.

In the meantime . . . the NASDAQ hit an all-time high this week as the fatherland Federal Reserve is now providing total support to U.S. equity markets.

But the grain sector may be the least impacted. There are solid positives especially in the pulse sector with the reappearance of India and steady demand from China. Canola will remain a cashflow king. Wheat is having an ongoing struggle . . . corn lows may yet to be seen.

The cattle board would be impacted should the Fed shield be penetrated and reality strike equities. Feeders may want to consider price protection.

The loonie may climb further as the USD reserve status may be threatened. Gold is a wildcard with sharp gains and losses ahead.

But mom and pop shops are going to be hurt, may jobs will never come back, corporate mergers may be ablaze over the next five (5) years. The S& P index may be unrecognizable within the next five (5) years.

[AlbertaFarmer5]

I agree, it's hard to see a path for the US dollar to get stronger with all that is going on there right now.

But What do you see as a viable alternative?

[jazz]

No country can challenge the reserve currency. If its replaced, it will be bcause the US chooses to replace it with something else.

Canada is headed for a BBB soverign debt status and with our oil patch decimated, that will eventually take the loon to 60 some cents.

The just in time model is dead and that might have an impact on food demand.

[Austrian Economics]

The inverse of falling interest rates is rising equity prices. Not every stock, by a long shot, but enough that the broad market indices will continue to rise. Many stocks such as airlines and brick and mortar retail, for instance, will not be joining the party.

If grain prices remain at least stable, expect farmland prices to continue their rise, thus squeezing the margins of operators even further.

The reason is simple: markets will eventually figure out a way to broadcast signals that indicate the scale of the wanton destruction of capital that we are seeing today. In a normal market, that signal would be interest rates rising to the stratosphere. Since central banks now actively seek to mute that signal, the natural response is for the destruction of capital to be signaled by rapidly rising asset and real estate prices, a rise which is all out of proportion to the value they generate.

The U.S. dollar, being the world's reserve currency, could very well rise to new highs. Its collapse is not imminent. The main factor in its favor it that it exists in sufficient quantities to be used to execute transactions in the billions and trillions of dollars as are increasingly common today. The Euro is a distant second when it comes to quantity. Everything else is way down on the scale.

[FarmJunkie]

There will be bombs and bullets flying before the US gives up the currency hold

[jazz]

As I predicted, Canada hasnt even done a fully accounting of the covid spending and fall out and our credit rating has already been cut.

I wouldnt bet a red cent on trudeau.

https://www.msn.com/en-ca/news/canada/one-of-u-s-s-big-3-credit-agencies-downgrades-canada-s-credit-rating/ar-BB15VkM3?ocid=spartan-ntp-feeds One of U.S.'s big 3 credit agencies downgrades Canada's credit rating

[bucket]

The sad part is the liberals chose to not to support farmers that can be a real economic boost to the country...

1 in 8 jobs you know depend on agriculture....more like 1 in 5 right now...

And our products are wealth creators and make it to all parts of the world...

Supporting agriculture is a key part of almost any other country in the world economic plan ...

[malleefarmer]

Ain’t got time to look at reasons but sea of red this morning thurs 5.30 am grain metals currency and livestock

[AlbertaFarmer5]

Thanks Jazz and Austrian, Whenever I hear a dollar bear prognosticating about the demise of the USD always have to ask. I've yet to have anyone show a well reasoned path to any other form of wealth replacing the USD.

[jazz]

David Rosenberg is kind of a doomer but he makes a couple valid points in these articles.
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It may be true that the federal government went into this mess with a seemingly well contained debt-to-GDP ratio of 31 per cent, but for the entire economy, at all public and private sector levels, that ratio is an unprecedented 350 per cent. Canada in aggregate doesn’t have a AAA-rated balance sheet to begin with and now Ottawa has to somehow shoulder a good chunk of these liabilities.

Italy’s debt ratio is 360 per cent and its credit rating is BBB. Greece is 340 per cent and it is rated BB-. Spain’s debt ratio is 360 per cent and it has a BBB ranking. And China is at 290 per cent and has an A+ rating by S&P. So Canada, even as it stands, deserves a AAA sovereign rating based exactly on what criteria?

“It will be interesting to see how a central bank which does not govern the world reserve currency and a country with a massive balance of payments deficit can ensure that all these generosity are reflected in the balance sheet of the BoC” without compromising the trusted by global investors, he said.
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The Canadian dollar will fall and this time it will stay there. Our debt, low productivity and demographics make us very similar to some of the PIIGS in Europe. Had we grabbed the bull by the horns and went after our resources and supported bedrock sectors this could have been avoided.

[errolanderson]

David Rosenberg is kind of a doomer but he makes a couple valid points in these articles.
-----
It may be true that the federal government went into this mess with a seemingly well contained debt-to-GDP ratio of 31 per cent, but for the entire economy, at all public and private sector levels, that ratio is an unprecedented 350 per cent. Canada in aggregate doesn’t have a AAA-rated balance sheet to begin with and now Ottawa has to somehow shoulder a good chunk of these liabilities.

Italy’s debt ratio is 360 per cent and its credit rating is BBB. Greece is 340 per cent and it is rated BB-. Spain’s debt ratio is 360 per cent and it has a BBB ranking. And China is at 290 per cent and has an A+ rating by S&P. So Canada, even as it stands, deserves a AAA sovereign rating based exactly on what criteria?

“It will be interesting to see how a central bank which does not govern the world reserve currency and a country with a massive balance of payments deficit can ensure that all these generosity are reflected in the balance sheet of the BoC” without compromising the trusted by global investors, he said.
----
The Canadian dollar will fall and this time it will stay there. Our debt, low productivity and demographics make us very similar to some of the PIIGS in Europe. Had we grabbed the bull by the horns and went after our resources and supported bedrock sectors this could have been avoided.

Unless the U.S. can get control of COVID, the American economy is at serious risk heading into 2021 . . . including further fallout in the USD. Alternate currencies could gain further strength (IMO). Our projected range for the spot loonie heading into the fall market is a range of 73 cents to 76 cents U.S.

[errolanderson]

Fed buying junk bonds, now rumblings on Wall Street . . . Fed may start buying stocks. Fed actively buying companies with horrible balance sheets. President metric is focused on just one number . . . stock market index, no matter how falsified.

Meanwhile in reality land . . . .

[TASFarms]

Fed buying junk bonds, now rumblings on Wall Street . . . Fed may start buying stocks. Fed actively buying companies with horrible balance sheets. President metric is focused on just one number . . . stock market index, no matter how falsified.

Meanwhile in reality land . . . .

If the fed starts buying these over inflated stocks. It will be a blood bath. What has Tesla done to get where it is from March?

[Austrian Economics]

The Quebec government pension plan is actively seeking to buy stock in bankrupt companies like Aldo and others. I always thought pension plans should strive to get value for retirees instead of destroying their capital. But I guess this is the new normal. Sigh.

[bucket]

The Quebec government pension plan is actively seeking to buy stock in bankrupt companies like Aldo and others. I always thought pension plans should strive to get value for retirees instead of destroying their capital. But I guess this is the new normal. Sigh.

Look at Sears...investor groups raided them instead of making them more competitive against Amazon ....then the retirees got shit on....and recently they sold some logistics to Costco for a billion ,,,,doubt they are funding the retirees.