I took these notes at the North American Consulting School in Calgary. I found Todd’s comment to be straight forward and understandable (for an economist) … Rob  – We at Agri-Trend recognized the impact the world and the dollar has on our agricultural customers.

Todd Hirsch – ATB Financial Senior Economist

EU Economy – Greece and Portugal are trouble…EU is a world of hurt due to sovereign debt loads much of this debt is held by banks.
There is a concern about the high level of country debt. This is creating investor uncertainty. There is somewhat of a credit crisis in EU because lending has tightened.

There are some actions but the Greece or Portuguese debt has not gone away. There are going to be ripples of uncertainty in the next few months.

China is not indebt…and the economy is growing. They are worried about the Chinese overheating…they are worried about asset bubble. The official statistics say the Chinese economy is growing 10-12% in real GDP.

The recession of 08-09 has been lead by China and maybe India

The US economy is rebounding. Last Qtr 09 and 1st Qtr 10 had pretty good growth…but they were propped up by govt spending and company inventory adjustments. Housing market, worst may be over…new housing starts are increasing. The two big problems are 10% unemployment and under employment (the job market is not bouncing back as quickly as we need). Unemployed or UNDER employed is 18%…these numbers need to come down.

The second issue is US Sovereign debt and fed debt to GDP is approaching 70% Canada’s debt to GDP is around 30%…we are in a very strong position.

Looks like several years of sluggish growth from the US. There high debt levels will force the US government to either raise taxes, cut government spending or tolerate a higher level of inflation. The US is still deflationary….there is still a ways to go before we see US inflation.

Canada has a golden glow on the international scene. We are outperforming all of the G7 neighbours. We have been running deficits but not at bad as other G7′s. Our banking is the envy of the world. We are hosting the G20. This “glow” is being reflected in the strength of the Canadian dollar. We had some “hit” based on global investor confidence….their is nervousness. Look for more strength in the Canadian Dollar in the near future.

High Canadian dollar may be a bit tough on exporters but they may be proving more flexible and resilient than economists first thought. With a dollar close to par, we are leading the G7. It has not been easy but most are finding a way. As the dollar goes up Canadians generally get richer….although it hurts exporters…like ag.

Interest rates are looking a moving. They were going to hold at 2.5%…they were saying this was a long term hold. June we saw an 25 basis point increase and the Bank has stop signalling the future. They are now “monitoring”. Look to raise another 25 basis points on July 20th. But he is not sure if this will continue through the entire fall. A year from now interest rates could be 200 basis points higher than today.

Western Canada underperformed the rest of the country in 2009. Newfoundland was hit the hardest – 10%. Alberta -6% and Saskatchewan -5%. Manitoba had only a mild contraction but they never really swing wildly. Alberta was hit the worst with job loss moving to 7% from 3.1%. We have been slower to get these back but a lot of workers were sub-qualified. Alberta companies are OK…they are doing fine without hiring back the sub-prime workers.

BC, AB, SK has a western agreement with the goal to provide labour mobility for the 9 million in these three provinces. More intercompany and interprovincial competition. This is a new group that should result in some positive impact.

E.G. … P.Ag’s are now recognized across Canada. If you work across more than one Province you should have membership in both all associations, especially in the area of remediation where provincial companies only recognize Province P.Ag. Stamps.

Turbulence ahead…fasten the seat belt….this is OK…if the oxygen masks fall there is trouble. Fasten Seat belts means that there is nothing fundamentally wrong with the economy. Canada is fine. Western Canada will again lead growth in the economy.

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