the Canadian dollar achieved parity with the U.S. dollar, meaning that one Canadian dollar buys exactly one U.S. dollar. The last time this occurred was over 30 years ago in the 1970’s. On top of this, oil hit a new record high, surging above $83 a barrel, without any significant event or reason causing it. The Fed’s relaxation of interest rates by 1/2 percent (50 basis points) created a short-term rally in the stock market, but by the end of the week, the U.S. markets are already negative – demonstrating that the Fed’s efforts will likely be a small band-aid over a major hole in the dam. We are in the middle of absolutely incredible economic realities right now, and the contrast between the U.S. and Canada continues to grow. While Canada’s economy is on fire, the U.S. is sliding towards recession, and it will take further interest rate cuts to prop up the U.S. economy. In the housing market, it’s clear that the woes are mostly ahead, and not behind. While optimists have tried to suggest that the U.S. housing problems are mostly done with, I believe the worst is still to come — over $500 Billion dollars of adjustable mortgages are set to jump up in the first part of 2008. Before that happens, the Fed will likely drop rates further to help mitigate some of the massive increases that homeowners will be hit with, but that won’t be enough to stop the train. I expect the Canadian dollar to gain a little further on the U.S. dollar, and my advice for all U.S. based investors is to get some of your money out of U.S. assets if possible. The erosion of the U.S. dollar, and the U.S. economy is NOT over, and you are in for continued losses if you keep everything in U.S. dollar denominated assets!]]>