Sept. 14, 2012

WHAT’S NEW IN QE3?

  • The Federal Reserve’s number one focus is unemployment.
  • Monthly spending: new purchasing of $40 billion in Mortgage Backed Securities ‘for as long as required’ and continued Operation Twist purchases of $45 billion = $85Billion per month.
  • Extending the period for exceptionally low rates to mid-2015 from late 2014.

QE3 Impacts: Creating a Weak $US (August 30 – September 14)

  • Canadian Dollar from 1.0105 to 1.0309
  • Euro from 1.2529 to 1.3134
  • Oil from 95.30 to 99.33
  • Gold from 1.658.70 to 1,776.20

BOOMING CLIMATE IN ALBERTA

  • Provincial real GDP is on pace to grow 3.8% this year
  • Farm cash receipts rose 28.3% in Q1
  • Population is expected to grow by 2.1% this year
  • 40% of Edmonton area employers plan to hire in Q4 (Manpower Survey)
  • 17% of Calgary area employers plan to hire in Q4 (Manpower Survey)

TIDBITS

  • According to RE/Max, Western Canada farmland values have soared, up 20 – 25% in Alberta YoY and 20% in Saskatchewan YoY.
  • EU is recruiting ECB as the lead National Bank Regulator as a condition of allowing euro-area banks direct access to the zone’s firewall fund. Germany has raised objections.
  • The Netherlands banking industry measures about 4.8X their gross GDP, making it one of the largest in the world.
  • Larry Jeddeloh has stated that competition for water will increase between the coal and agriculture industries. Over the next 20 years, China and India are building $720 billion of coal-burning power plants; more than 50% of these new plants are planned in agricultural areas that are water sensitive.
  • CAW proposal for new employees includes lower wages for their first 10 years (currently 6 years) and benefits to avoid strikes.