Right, and the US believes in a strong dollar and china is a communist country. Factually true, but all the evidence points otherwise.

Why Putin Will Still Run Russia
http://www.time.com/time/world/article/0,8599,1718775,00.html
“In mid-December, Vladimir Putin settled Russia’s succession question by declaring his support for Dmitri Medvedev, a deputy prime minister and former Putin chief of staff… Medvedev’s rise means the presidency is now in the hands of a Putin loyalist…”
“The transition, in other words, is fooling no one… But now that Putin is moving office, it seems safe to assume that real power will reside with the Prime Minister. In case there are any doubts, Putin himself recently said as much: ‘The Cabinet, headed by the Prime Minister, is the highest executive authority in the country.’”
……….

Norm, “…or, roll the dice baby with a cheap variable rate mortgage. What do you think will happen?” I’d say your odds are better in Vegas betting on black.

“As for interest rates, I have no concerns. I locked my rate in with a discount- cha ching!”

Pheeew. I’m delighted that I don’t have to worry about you.

Jason,

…or, roll the dice baby with a cheap variable rate mortgage. What do you think will happen?

Thanks for backing me up with your comment “who’s running the show (Putin).” You come across as being well informed and I don’t mean to flame you in anyway, but Putin is not the President anymore. Dmitry Medvedev has been in power since March 2008 and has a wife (Svetlana) educated in economics!
With that being said, I wonder how many people in SK are being ignorant and under-estimating Russia. (ain’t calling Jason ignorant).

Norm,
As for interest rates, I have no concerns. I locked my rate in with a discount- cha ching! You can see my Sept17th Tweet about it.

I’m kind of surprised that nobody has jumped on the increases in mortgage rates. Royal moved first on Friday and the other major banks followed today with increases in the fixed rate products of as much as .35%. A five-year mortgage can still be had for 3.79%, according to TMG’s rate chart but that small increase moves the carrying cost of an average Saskatoon house by $55 a month on a 25-year amm.

Yes, they certainly may. I do believe that when a recovery takes hold (if it has not already, and yes, it is difficult to tell for the very reason such massive walls of money have been thrown at the problem), that these regions will play a much larger role in leading the way out.

Peter, excellent points about emerging markets. Many of the jobs that used to be based in North America were absorbed by these countries some time ago- particularly in the manufacturing and IT/telecom sector. They are also currently playing a much larger role in health care training and research. This adds to the reasons why the N. American consumer likely won’t respond quickly in this recovery- too many formerly “middle-class” jobs have been transferred offshore.

http://www.finance.gov.sk.ca/paccts/paccts03/03state2.htm
http://www.finance.gov.sk.ca/paccts/paccts04/04state2.htm

Jen, “Globally, however, production appears to be picking up in many Eastern markets (specifically China and India).” Might these be the lingering effects of stimuluses in these regions and not necessarily a true sign of recovery?

Steven, “Therefore I reason, Russia is more motivated than Canada on getting deals made.” I would tend to agree, especially with who’s running the show (Putin).

Rick, “Give the NDP some credit as they were leading government for some of those years although I don’t know how many.” About 16 too many… (Sorry, couldn’t resist… )
“I would suggest that since they have the cash they hold the hammer not Canpotex.” Indeed, the Golden Rule: “He who hath the gold, makes the rules.”

“The majority of there exports you can purchase at the $1 store”

Do you purchase your electronics, power tools, appliances at the $1 store? You are living in a different decade buddy. The standard of living may be low but China is much higher up the production value chain than you realize. They are also getting into auto manufacturing, software development, medical devices, drug research, you name it. This is actually one of the main reasons I think Sask is a relative safe haven. I have no idea how more service or manufacturing oriented areas of the country can compete against China in the long-run. Sask at least has an abundance of natural resources relative to our population to backstop us.

We can talk all we want about resources but the plain truth is that resources fluctuate and are never constant. Yes, oil is at 70.00 but if any of you know retail business owners in Weyburn, Lloyminster, etc., ask them how business has been the last 6 months. I do business with some of those business owners in those locations and they have told me that business has nosedived.
Same goes with Potash. There is no choice but to sell at 550 a tonne. Guess what happens when the average price stabilizes at 550? Yes, you guessed it. The Russians will drop thier price even more because they need to sell it.

Real Estate hasn’t dropped because society isn’t ready to accept that the global boom is over. It’s human nature to not let go of something that’s good….even if its just a perception. Besides, money is still cheap…for now. Rates have now gone up in Australia. The state of Caliornia just issued bonds with a 5% yield and the Alberta Gov’t has just done the same although I don’t believe the yield is as strong. I could be wrong about the rate. Regardless, mortgage rates are based on the Bond Market and those bond rates are creeping up around the world. I’m sorry but it has to happen.

As far potash, from what I have read Russia doesn’t even come close to having the capacity to meet the entire world’s demand. Their only impact is to set a lower price precedent. I guess you could say that because there hasn’t been much domestic product movement this year there will never be any again but to me that isn’t realistic. It’s like everybody selling their stocks in February because the financial system seemed like it was going to collapse. The cycle turned as it always done and the stock market has rebounded strongly. I am of the opinion that potash is the same. It may take a bit of faith and can’t be proved mathematically but ultimately people need potash.

Ultimately from year to year things are a bit of a crap shoot with commodity prices, I won’t deny that. However, the original point which started all this was that Saskatchewan was about to lose people to Alberta, BC and Ontraio as soon as the recession turned. I still see no evidence of this.

To me you are kinda seeing “unrealized gains”. Profits are obtained when you actually have a signed deal, and are moving product. Russia has a signed deal with India. Canada does not. Canada is sitting on its inventory with dollars in its eyes and not in the bank. Russia may not be able to supply the demand, however whatever demand exists right now is going to Russia. Under-estimating the russian’s capacity may be a mistake when they are motivated to sign a deal. Maybe a deal with China to increase production could happen. -10% GDP says they are motivated to me. At what price should Canada be motivated to show the russian’s that Canadians have the capacity to operate profitably and ship commodities to China? Potash workers have been laid off, and oil sand projects have been cancelled. Is that showing we have capacity to operate profitably or greedily?

Russia cannot produce all of the world’s oil, potash, and agricultural commodities. They can influence prices by undercutting but to date these commodities are all still being sold at profitable levels. Oil is around $70 a barrel, in 2004 $50 was considered very high. Potash at $550 / tonne is still a very high level compared to a few years ago. Wheat is down to around $5.25 / bushel (depending on the market and delivery date) which is not fantastic but still much better than $3/bushel range it was at a few years ago. Wheat prices are lower than they have been due to two consecutive years of bumper harvests.

“And I wouldn’t say Saskatchewan was doing well as a whole before the global financial crisis; up until recently we were still producing annual budget deficits. ”

I appreciate your input but you may want to check your facts on the history of the provincial government’s budget.

As of 2006 the provincial government posted 13 consecutive balanced budgets. Please see the following link for my reference.

http://www.gov.sk.ca/news?newsId=57b5240c-dc62-45d4-88cd-5e24d39c69e3

Thank you.

Canada selling commodities to the east is only gonna help drive down prices. On the global scale Canadians have to consider Russia’s economy of -10.9% GDP growth. They are worse off than the US (-3.8%) and Canada (-3.2%). Therefore I reason, Russia is more motivated than Canada on getting deals made. Potash prices are falling because the russian’s signed a deal to supply India for $550 tonne. Is Canpotex gonna put its head in the sand over that? I think a lot of people in SK are! As of late, Canpotex is being seen by the rest of the world as a price fixing “OPEC” of potash.

If that were actually happening, you would have a great point, Rick.

Yes, the US economy is producing far less, and yes, it has had a considerable impact on commodities prices. Less liquidity will mean less investment, and that will probably continue to be the case for some time. Globally, however, production appears to be picking up in many Eastern markets (specifically China and India), and Canada has shown admirable willingness to diversify its markets beyond US ones in the last year. I personally think that if some sort of recovery is taking hold (rather than this being a reaction to a massive global liquidity injection- it’s hard to tell) , commodities will show strength before many other sectors. If this is the case, SK should actually do better than many other provinces in the near term.

And I wouldn’t say Saskatchewan was doing well as a whole before the global financial crisis; up until recently we were still producing annual budget deficits. It wasn’t until 2006-2007 that oil, potash (etc.) royalties and revenues really allowed this province to take-off and start paying down our deficit.

That being said, I do believe Saskatchewan is better situated to weather the storm than Alberta, BC and certainly Ontario – provided we apply some of the lessons learned with respect to public spending: deficit first, followed by tax reductions.

The factors you speak of apply to Canada as a whole. Please explain why they will cause Saskatchewan specifically to suffer so much more than say Alberta? You throw out these vague arguments that amount to little more than “we’re screwed” and then jump to very specific forecasts. Don’t even bother responding to my question as I know your type doesn’t like to get nailed down to any specifics.

I doubt it. Saskatchewan was doing well before the global financial crisis, continued during and I don’t foresee that changing as things pick up. The factors behind our success remain intact. Oil prices are high with peak oil still on people’s mind. Agriculture prices are strong. Potash prices are down but still very profitable. I can see your point on Alberta stealing our people but Ontario? Domestic manufacturing is dead, I don’t see that story turning around anytime soon.

Jen, “Wow, Jason! You broke far earlier than I thought you would. Just kidding!!” Haha, touche. “Seriously though, it sounds as if you were very sensible and thorough with the purchase, which isn’t surprising to me at all.” Thanks – I’d like to think I was somewhat thorough in my homework! (this site was a great help!) Time will ultimately tell…

Norm, “Glad to hear that things worked out so well for you.” Always appreciated, thanks! Yes, Fall or Winter’10 was the tentative plan, and while this happened a bit sooner than we’d anticipated, we’re very happy with how everything worked out.