Is Canada a safe place to invest in the light of the coming dollar collapse?

If the dollar really does collapse, will Canada come out a winner or will the significantly loss of US purchasing ability have a adverse affect? Does Canada have sufficient non-US customers to maintain its current growth and econimic surpluses?

Think about your basic premise. Why would the dollar collapse? The US economy is strong, we are exporting products to the rest of the World and the rest of the World is shipping products to the US. To whose advantage would it be for the dollar to collapse -- No ones except for some perverse weirdos.

Yes the dollar has dropped relative to other currencies because US citizens are buying large amounts of imports from overseas relative to the exports and because of our interest rates. But so far no one has refused accepting dollars. With cheap dollars, US good are cheaper to other countries, so US products will see an increase in sales. This will causes and increase in the demand for dollars thus driving up the value of the dollar relative to other currencies.

Now to your question without the misunderstanding. The Canadian economy is also strong; however the largest customer for its products is the US. The question should be, can you find good investments in Canada. The answer is yes. But if you are buying them with dollars, they will be expensive because of the cheap US dollars buying higher valued Canadian dollars.

No offense to the USD holders but what is the national debt of the USA (almost 9 trillion dollars) and the overall trade deficit is greater than all of the other countries with trade deficits combined and multiplied by two and why does the US government not bother to print M3 data anymore? Because it is in the process of inflating our debt by printing unaccountable money and is the reason why our markets have been strong-. money is being poured into the system at a very fast rate as the market is ignoring traditional interest rate indicators to determine market valuations. Inflation indicators on the other hand are being manipulated by nonessential goods like computers and electronic equipment some of which have always depreciated at a rate of 80% a year which keeps the inflation hawks at bay hence the market is strong.

There are lots of questions to answer how can Russia get away with increasing their money supply by 50% over the last year and their currency had a slight gain over they year vs the dollar.

I feel this is a very legitimate question with this increased money supply.

Canada being rich in natural resources a net export country with a fiscal house in better order should have a currency that will fare better against the USD going forward unless Canada wants to defend its manufacturing sectors which would suffer in such event.

If left unchecked this phenomenon is going too snowball eventually and I think the Amero idea is on the table to prevent such disaster. Question is will Canada be obligated to switch to the currency under NAFTA/CAFTA agreements when it will clearly hurt them?

I like Biobrain's answer the best. To that I would add oil companies especially mid sized producing companies. There are quite a few in Canada.

Until China becomes FAR more stable than it is today, there is nowhere you could put assets to protect them if the US dollar "collapsed"; the good news about that, though, is that it means the US dollar is almost insured AGAINST any kind of significant collapse.

US purchase declines like you mention will have an adverse affect on the entire world and certainly Canada.

But most of Canada's future growth and value of the dollar is due to its vast natural resources, which the rest of the world still has a demand for. A collapse of a currency could send people to invest in other currencies and in natural resources. Not all wealth would be lost, it could be be just switched to a different currency (amero anyone?) which I think would be the most likely outcome of any USD 'collapse' or extreme weakness that could occur... they would just change over to an Amero or other currency that would be backed by silver or gold. If the USD collapsed, we still have ways to value our assets besides listing them in USD... so the value of the paper holdings would be hurting... but I think a lot of Americans owe more USD than they own... lol... and the rich don't keep too many of thier assets in paper currency, they invest them in other real assets, and thus the value of the USD isn't the end of it all.... an apple is still worth whatever someone will pay, regardless of the currency... supply and demand put value on that apple, and the dollar was only the unit of measurement we use currently... but we can measure it in euros, in silver, ... you can value an object in many ways... wow, i hope i'm making some sense.

Certainly, with all the resources, Canada is as good a place as any to invest though. Finite resources...billions of people with wants and needs... a large portion of the worlds resources located in one big country...

As for the dollar collapsing, we all hope that doesn't occur, but how long can the M3 go unpublished and the US continue to print record amounts of money? China is hinting that it won't be buying as many new US dollars and that is part of the reason for the current USD weakness. Canadian loonie is up over 10% so far. It's almost on par! ~$0.95!!

If you don't see the US government getting really stern with China on topics like IP and currency undervaluation (yen), it could be because China can collapse the USD by flooding the market with more than $1.2 tril in USD reserves... but they don't want to lose thier money/assets and greed should ultimately save the day... to collapse the US currency would hurt them and their wealth (especialyl since they own so many of those USD!). I don't think the USD will collapse... it may continue to be weak and lose value... but that might help give some life to the manufacturing sector? Ahh, probably not, but still, I think the US has plans to eventually get into an Amero (euro style) currency with Canada and Mex, and thus it knows it can abuse its power as the world currency for now... So I wouldn't be surprised to see it appear to be a slow race to the bottom of the barrel, and then out of the blue a North American Union with a new currency will come and save the day.... lol.

Of course, most of this could all be completely wrong and off the wall... I hope so... lol... I think a North American Union could lead us on a dangerous path of losing our core rights just like what has occured in the European Union... so, I hope all this is completely wrong and off the wall and never occurs and that the US gets its act together and stops printing so many USD... and perhaps raises the interest rate slowly to convince some people that refinancing thier homes every year isn't the best idea... // end rant and crazy talk.

A diversified portfolio is the safest way to invest. If you want protection from a weak US dollar, invest in multi-national US companies, GE for example. Also consider investing in developed and emerging foreign funds.

I don't think anyone is expecting a massive collapse, but the US dollar has declined quite a bit relative to most other major currencies. I don't think anyone can really predict these things very well.

While everyone knows that the dollar has declined relative to the Euro, I was recently surprise to see how much it has declined relative to the Canadian dollar.

About 6 months ago I bought some stock in Canetic Resources a Canadian energy trust (CNE) for about $13.65 US/share and its div. yield at the time was about 13.5%. Now the stock is up at $16.45 US/share and the yield is about 12.8%.

At first I couldn't understand how the yield could be so high after the share price had increased so much. The answer is that the div. pays in Canadian dollars which have appreciated 12.5% in value (relative to the US$) in the last 6 months.

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