Canadian dollar

[Devo]

I do quite a bit of traveling to the USA. As you know the Canadian dollar is now approaching parity with the US dollar. I am considering converting 5-10 thousand Canadian to US. I would appreciate some input in terms of risks-benefits before I make the transaction.

Thanks in advance

 

[TheGuy]

If you're spending the US dollars over the next year anyway I don't see how you could lose. It can't go much higher but should drop at least 10% over the course of the next 12months.

 

[bcneil]

Last time we hit parity I bought some american money.
I have just used it as spending money whenever I am in the states.
In all likelyhood, the Canadian dollar should bounce between 80-90 cents.
Sure it might go below or above for short times.

That being said, you hear all these gold bulls talking about $2000 gold.
If thats the case, I imagine the dollar will still have some room yet.
I have heard some analysts who think our dollar could hit 1.30
if gold makes a big move. This is when I will buy my new car.

But for 5000-10000 its not a bad idea to convert now.
Maybe half now and half later.

 

[xxxbrian]

I was also thinking the same thing. I would like to convert $10,000.00 CAD (or more) to USD and then wait until the CAD drops to a ridiculously low level again before I convert my USD back to CAD.

Do I do go to a Currency Exchange place to convert my CAD to USD or do I do that at a bank?

OK, if you do it at a bank the bank goes 2.5cents each way when you buy or sell. So, on $10,000 you will lose $250 each way if you do it at a teller. So, that can be $500 lost on just the conversion with the spread. Banks must do this because the dollar fluctuates so much, been crazy the past two years.

Our rates as of Oct 15, 2009
Client Buys (Pays CDN): 1.0598
Client Sells (Receives CDN): 1.0108


Now, doing it online nets you almost 1% less or 1% extra each way so that is about 1.5% from the current daily figure.

Now, you need to open a USD chequing account to be able to transfer online. But you can save that way. BUT, a USD chq account can cost some people $60 USD a year but there are some banks and plans that waive this cost if you have a large min balance monthly.

You can make money and not even sure if doing this is taxable, think it might be tax free but not sure.

So, if you can find a way to get a free USD chequing and convert online at a closer spread and the dollar drops to the USD in the future, you could make money. Now, how much closer will it get. I was told 2-3 months ago the dollar should be about .96-.98 in the near future and my broker was right.

I knew a guy who did this when it was at 1.07 and he converted back near par and then 2-4 months later the dollar crashed but he missed out. he said he was tired of waiting.

B

 

[Fletch]

Exchange

I have a US account with the TD. If you do internet banking you get a better rate than doing in in person. I also have a US account with Chase in Phoenix. For some reason I get a better rate when converting there. The bad thing is that when converting in the US it may take over a month for the cheque to clear.

It is usually easier to buy larger amounts via bank draft. The two TD branches that I use tend to have only $1,000 or less of US cash at any one time.

 

[87112]

The stronger the dollar gets the longer the border lineups are on the weekends. Let the shopping in the USA begin!

 

[xxxbrian]

The devaluation of the USD will mean really good conversion rates for Canadian shoppers. I'm confident that the Canadian dollar will average in the $1.03- $1.10 range in 2010 and much higher after that.


Topper

If it does that then new cars should be cheaper / on par here then what they sell for in the US. See if the dealers adjust to the new levels now in 2010.

B

 

[anonanon]

The stimuli from the Olympics is already starting to fizzle. Look at new construction. Dropping like a stone.

The recession will last longer in the US as they were more affected by it than we certainly were but we can't kid ourselves, we will get hit with it too. In BC we've been riding the Olympic wave but this wave has hit shore and is recessing rapidly...

 

[chilli]

The stimuli from the Olympics is already starting to fizzle. Look at new construction. Dropping like a stone.

The recession will last longer in the US as they were more affected by it than we certainly were but we can't kid ourselves, we will get hit with it too. In BC we've been riding the Olympic wave but this wave has hit shore and is recessing rapidly...

This is my buiggest concern, and with the HST just around the corner - its going to be like a double whammy.

 

[Maxwell]

Buy high and sell low. That what works for me and I have the stocks, mutual funds, property and cars all worth less than I paid to prove it!

 

[anonanon]

Ahh....Ain't it great to be a Canadian?

 

[Big Dog Striker]

Vancouver Bullion

Best place to buy foreign currencies in the city would be Vancouver Bullion, their main branch is located along West Pender and Howe. They have a good inventory of most foreign currencies and their rates are much better than the banks. Actually the major banks do refer their clients to Bullion. If you're going to Cape Town or Cancun, it might take the banks weeks to actually get the South African Rand or Mexican Pesos so to save their time and energy, they'll just refer their clients to this company. Plus, you can negotiate for a wholesale rate with their trader if you're transacting $ 5,000 or more. Companies can actually save thousands here for their wire transactions than with the major banks coz with the latter you'll have to depend on them and their correspondence bank for the exchange rate.

 

[Big Dog Striker]

Greenback

Thumbs down for the US Currency in terms of the future direction of its exchange rate as compared to other currencies but it does have a reason why the Feds are allowing it to happen. Currency devaluation can also be a weapon for the ruling Democratic Party and the Feds. Great for near term election campaigns, but as bad as the bailouts for the long term health of the country. As the exports of the US improves then they would need more people to produce those goods. A quick fix for rising unemployment south of the border. However, if you look at the upcoming plans of the Obama administration you can foresee more currency devaluation ahead with their Green Stimulus and Health Care reform as both of this major developments will increase the cost of employment which will result in more unemployment and another quick fix = currency devaluation. That's why commodities like gold and silver have been setting new highs as of late.

I believe that the short term direction of the greenback is downwards with these developments and investing in it right now has more risks. The recent short play on the greenback about 2.5 weeks ago was quite funny using the plans for a new Global Trading Currency for oil as an excuse to bring down the price of the greenback and support it near the 1.02 level and now its back to 1.06/1.07 range. China has a reserve of US$ 2 Trillion and no country in the solar system will be big enough to absorb it. If they dumped their US holdings, their economies will crash. So all this talk by China and the other oil producing countries about having a new global currency is about 30 years from reality.

The US Dollar index has been down 16% since March, more devaluations to come as Obama needs to maintain his popularity.

 

[visiting]

I agree with Big Dog, expect the USD to drop another 20% minimun... maybe 30%...

 

[exuberanttoki]

When Dow goes up, dollar drops. When Dow goes down, dollar rises. Crap!

 

[Big Dog Striker]

When Dow goes up, dollar drops. When Dow goes down, dollar rises. Crap!

Best way to protect yourself and capitalize on the present situation is to invest in stocks whose revenues are generated from outside the United States as Asia, Latin America, and Europe will recover way faster than Uncle Sam.

 

[Big Dog Striker]

Japanese Yen

People always talk about the greenback when it's going down but that's just really Obama's secret job creation plan and short term popularity strategy. The real concern is Japan's present finances and its almost near state of bankruptcy. The world's second largest economy could be like Iceland soon. It's debt is almost 200% of its GDP. Well, I think the US won't let this happen to one of their main allies. If the Feds saved AIG because of its catastroshpic worldwide effect, Japan hitting a brick wall could bring the world economy down. However, AIG was also saved because Goldman Sachs had a $ 10 Billion stake there and the American economy is run by who else. I wouldn't recommend investing on the Yen against the dollar for the next few years.

 

[cruiser]

If you're interested only in capital preservation then buy gold. If you want to preserve your capital and make sickly gains, then buy Silver. I recently sold off all my gold and transferred it into physical silver.

The raging bull in the silver market will be an unprecedented one among any financial investment ever. Well, almost..... But don't buy "silver" bank certificates. They're not backed by anything. Purchase the physical silver bullion or for smaller investments, go with coins and other more affordable units.


Topper

I'm looking for where I can buy actual "gold" or "silver". I deal with the TD and am into various mutuals, etc, but haven't taken the step of actually purchasing the actual physical product (gold or silver). Do I buy this through TD or do I have to go someplace else? What are the service charges for such a transaction?

Any advice of how to do it (I live in Edmonton).

 

[threepeat]

I'm looking for where I can buy actual "gold" or "silver". I deal with the TD and am into various mutuals, etc, but haven't taken the step of actually purchasing the actual physical product (gold or silver). Do I buy this through TD or do I have to go someplace else? What are the service charges for such a transaction?

Any advice of how to do it (I live in Edmonton).

Hi Cruiser, I live in Edmonton too. The most convenient way to buy physical gold and silver in town is to go to one of the local coin shops and buy some silver bullion coins. I have bought one ounce a U.S. silver eagle, Canadian one ounce silver maple leaf, Australian one ounce silver kookaburra, and a five-ounce Mexican silver libertad from there. Last time I dealt with them I paid $25 for a one ounce silver maple leaf coin, so I paid about $5 over the spot price of silver. For small transactions like less than say five ounces of silver, that is actually pretty good. Note that all coin shops require cash payment for bullion sales. Other than that, it's easy. Just walk up and buy it.

For larger quantities, the cheapest way -- but a bit more of a hassle -- is to buy from Scotiabank's precious metal bank, called ScotiaMocatta. It is actually the world's oldest and largest precious metals bank, which was acquired several years ago by Scotiabank.

http://www.scotiamocatta.com/products/investment.htm. TD may have similar procedures, but ScotiaMocatta claims to be the precious metals experts in Canada. Even with Scotiabank, unless you go to the main branch they may not know what you are talking about. I wanted to buy some Silver Maple Leaf coins from Scotia on Whyte Avenue and they literally didn't even know what they were(!).

I tested the process a few months ago, and here's how: go to the downtown main Scotiabank branch in Edmonton during daytime hours before 1:30 PM to purchase or sell precious metals -- the ScotiaMocatta division is located downstairs. You will need to bring two pieces of government-approved picture ID, so a driver's license and passport will work fine, as well as cash to pay for your purchase. Some of these restrictions are waived if you are a Scotiabank customer, as presumably they have already verified your identity and credit worthiness.

Tell them what metals you want buy and in what quantities. If you just want Canadian Maple Leaf coins, they should have what you want on hand. Despite what their web site says about selling US Silver Eagle, and European Silver Philharmonic coins, I just got a blank stare when I asked about them.

They will then give you the coins in exchange for your cash, as well as write up a bill of sale. You should keep this bill of sale as long as you own the bullion because it allows you to sell the metal back to Scotiabank in the future at spot price (less commission charges) with little hassle. If you do not have the bill and try to sell your silver, wherever you sell to may charge an assaying fee (to verify that your silver is actually silver and not silver-painted lead or something). I have no idea how much assaying fees are btw.

The transaction fee is only 1/4% over the current spot price of silver, in addition to a service charge of I believe $10 per transaction. So you need to buy at least a few ounces of silver for ScotiaMocatta to be cheaper than the local coin shop, but it is definitely the way to go for large quantities.

Hope that helps!

P.S. Buying government-minted bullion coins (eg., Canadian Maple Leaf, US Silver Eagle, Mexican Silver Libertad) are the most liquid form of physical silver you can buy. However, some people prefer to pay a lower premium and just get as much of the metal as possible, in which case I would also recommend the online store at First Majestic Silver. First Majestic is a Canadian silver mining company who took the innovative step to sell silver themselves rather than having to deal with the crooks at the Comex (but that is a different topic): http://www.firstmajestic.com/s/OrderForm.asp

 

[Big Dog Striker]

Gold

Good move to invest in gold whether in the actual form or in gold stocks. Gold stocks are still pretty much undervalued though as compared to the actual one which is already up by about 30%. With the Indian Central Bank recently purchasing a big chunk at the high, China planning to buy more of it domestically, and Warren Buffet investing $ 34 Billion in a major rail company last week, a second bull phase for GOLD might not be far behind.

Warren Buffet's recent huge investment in RAIL was suppose to be an investment in America's future and a clear foresight in reasonable transporation/travel. However, its just a simple play on commodities and in controlling it. Buffet now controls all supply infrastructure for most commodities, routes, ports, warehouses, depots, land, and etc. It won't be long before he'll just open his mouth about the great future of GOLD and the price of the latter skyrockets upward. The guru won't put $ 34 Billion into something he won't make money on.

Recent developments in the market involves the US Congress passing the healthcare bill by a narrow margin, US unemployment for October 2009 was at its lowest since 1983, and the IMF believes that the US Dollar is still not undervalued. All this means the Greenback has more declines coming in. Just short the US Dollar and buy gold and sleep and don't look at it till 2010 and you'll be smilin' afterwards.