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EC250 (34)
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October 22.docx

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October 22, 2013 2013-54 On currency investors In today's Financial Post there is an article about currency investing.Basically, some people are worried that the US dollar will fall because of political problems in the US. These people buy the Chinese yuan or baskets of currencies that are resource- linked: the Australian, Canadian and New Zealand dollar as well as the South African Rand. The total amount of such investments is, however, relatively small. The article mentions something we have been studying: investing in foreign currencies because of high return. One bank is offering 5.75% on the Brazilian real. But remember that for the investment to be profitable, the real cannot depreciate too much. Posted by JK at 04:02 No comments: Email ThisBlogThis!Share to TwitterShare to Facebook Sunday, 20 October 2013 2013-53 On inflation and inflation statistics Because of the weakness of the Canadian economy, inflation has been low In an interesting article that you should read, the author discusses whether Statistics Canada inflation numbers can be believed. I will summarize his main points: 1. People he knows complain that, in their opinion, inflation is higher than the 1-2% reported by Statistics Canada 2. Indeed, he says, several items increase in price at a higher rate: food, transportation, child care and, regrettably for you, tuition fees (21% increase in the last 5 years); 3. Inflation is not the same for everyone. It is higher for necessities (food) than for more expensive items (electronics, cars). This exacerbates concerns about income inequality. 4. The best approach is to keep Statistics Canada independent; otherwise people will not believe its statistics. Note point 3. The first part is trivial, of course. If you are a student with child care needs, you are facing big increases in the cost of living; if you are buy a lot of women's clothing and electronic equipment, you are enjoying deflation. But the second part raises an important issue. Productivity growth is faster for
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