“Election Results Could Have A Dramatic Impact on Interest Rates”

For the most part I try to keep my comments to strictly financial and financing topics and I will today, sort of, although I plan to go on a bit of tangent.

Even thought the dollar is 5 points above parity today, it should actually be higher right now as the U.S. currency continues to depreciate against all other major currencies at a faster rate.

Why should the Loonie be even higher?

Because the potential outcome of the May 2, 2011 federal election is making the rest of the world nervous, present company included.

Anything less than a conservative majority will likely have some negative impact on the dollar and will also increase the bank of Canada’s intervention with monetary policy to offset the expected increase in fiscal spending if any type of alliance forms among the NDP, Liberals, and Bloc.

Here’s some additional information on the topic as well http://business.financialpost.com/2011/04/28/ndp-gains-might-sink-loonie-or-not/

When we are talking about monetary policy, the only real lever the bank of Canada has is interest rates, and they will be pulling it much harder if required to maintain the status of the currency.

The result will be higher than expected business financing rates.

Any scenario where the NDP would come into power would as the article I’ve linked to states …”could cause the dollar to Wobble”.

The NDP had some well documented disasters trying to run the provincial governments of B.C. and Ontario, and to think they have the expertise available to manage the fiscal policies of the entire country is laughable.

I understand that everyone may not like how the conservatives go about their business and I don’t agree with all the things they do or say either.

But this is the only party capable right now of keeping us going in the right direction.

Hopefully people can see through all the pie in the sky promises that political parties make to try and get into power.

If not, and we get a Conservative minority, or heaven forbid, a NDP minority government, then we are turning the ship into the financial abyss that most of the rest of the world is in right now.

Selecting governance should not be a popularity contest where the unqualified get to be contestants.

Canada is currently held up as one of the strongest economies in the world, period.

Let’s not do anything next week that is going to jeopardize that status, regardless of what you think about Mr. Harper and some of his soldiers.

I’m all for change … if there is a better option.  But there’s not.

We can continue to stay ahead of the financial cloud of dust darkening most countries these days, or we can fall back into it like everyone else.

It is a choice and now is the time to pick the party that has the best chance to keep the country on a solid economic track.

Vote Conservative.

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