U.S. economic turmoil could affect Canadian consumers
Posted Aug 8, 2011 04:15:25 PM.
This article is more than 5 years old.
The Dow Jones in New York closed down more than 600 points Monday, while the TSX was off 491.
Commodities closed mostly lower, but gold set another fresh record at $1,720 an ounce. That’s up $68.50.
With gold stocks up in Toronto, everything else is lower and the selling continues with no sign of it letting up.
So what does all this mean for us?
The effects might not be immediate, but they will be felt eventually.
Ian Lee, a professor at Carleton University’s Sprott School of Business says Canadians won’t necessarily see interest rates or the cost of borrowing soar, but consumers will feel the pinch.
“The burden, or what is going to be imposed on Canadians is being caused by the fact that their economy is so weak in the United States that demand for everything is way down, including the demand for Canadian exports, and Canadian exports are Canadian jobs,” he says.
He says Canadian exports will taper off until businesses begin looking for new customers and markets outside of the United States and Europe.
“That means looking for customers in Brazil, China, India, Indonesia, Russia, Latin America or the Middle East,” he says. “We can no longer depend on the United States and Europe, both who are going to be downsizing and de-leveraging and paying down debts and growing very slowly for at least the next 10 years.”
He suggests business owners look into new markets as quickly as possible, to break Canada’s export dependence on the United States.
