Is it time to be optimistic?

op·ti·mism:  an inclination to put the most favourable construction upon actions and events or to anticipate the best possible outcome.

Do you want a chuckle? Well here it is.  I am actually a closet optimist, in spite of the fact that I like to complain about a whole plethora of issues.  But, when it comes to our economy, I describe myself as hopeful, encouraged and yes, optimistic.  This in spite of the fact that the most influential people closest to me are best described as pessimists.  My optimism is derived from my rosy view of the Canadian economy.

The Canadian economic climate has for the past 24 months, experienced the deepest decline since the recession of the 1980s.  Anyone living east of Saskatchewan have been in position of losing their homes, partly due to the real estate market corrections that dropped lower than equity loans and increased property taxes based on this inflated equity.  Further, pressures from the collapsing world markets led in-part by the failing US banking system have affected Canadian exports.  In the past, our Canadian economy was attached to the proverbial hip of our American counterparts.  When the US buying power was strangled by economic pressures, our markets declined in concert.

Here in Alberta, and especially along the Edmonton-Calgary corridor, we have experienced what many observers have described as a normal economy.  Yes, our boom did end, but what was left has affected a smaller segment of society and as a result consumer confidence in our region is high.  Even though this feels comforting, this rather narrow geographic region has experienced pressures from other parts of Canada, and yes influences from the US.  Further, Alberta has experienced a Real Estate correction and property sales are slow.  Although we still witness considerable housing starts, this construction is a residual affect from projects started before the recession, and by shovel-ready money provided by our government.  

With this now behind us what prediction can we glean?

We are now entering the final quarter of 2010, and as always it is the time of year that many financial wizards sharpen the pencil and come out with predictions of how strong or weak your buying power will be.  You will also note that most financial prophets are pessimists, so in this respect I stand alone wearing my rosy spectacles.  No, I am not calling myself a wizard, I am however a true optimist.


An optimist's viewpoint.

In past deep recessions, the Asian countries fell in concert with the mighty US economy.  Previously, countries like China, South Korea, Taiwan and India had collapsing economies, so any business Canada was conducting with those countries suffered.  As a result, trade between Canada and those markets declined leaving us with our largest trading partner, the US, with the most influence.

But when it comes to Canadians, we are rather quick to change our practices, and this is why as a nation many are looking to us as an emerging world economic leader.

Unlike the past, the recent collapse did not affect the Asian countries and those economies have weathered very well.  India especially has experienced a boom in providing out-sourcing, from dry goods to skilled workers, where products or services can be provided electronically, or through couriers.  On the flip-side, with many predicting that the US will experience the dreaded deepening “double-dip” recession in 2011, Canadians cannot count on the US economy to sustain any real growth here in Canada.

Having learned from the past, Canada is now turning to Asia as important trade partners.  These changes will help Canada's economic growth for 2011.  It is predicted that in 2011, the developing markets in Asia are expected to grow 7.3 per cent with the most growth experienced in China and India.  China is predicted to experience a 9.1 per cent growth with India following at 8.7 per cent.  During the American collapse, Canada has been turning away from the weak U.S. markets and have turned to these Asian countries.  As a result, with the growth expected from China and India, it is predicted that Canadians overall, will experience a moderate growth between two and three percent.

So, 2011 should be a good year for Canadians.  Yes, I am being a bit optimistic but I do have a concern that can make me lose my rosy spectacles.

Recent news that the next volley of globalization “globaloney” has been aimed at creating a one-world banking system.  This news should raise the hairs on the back of any Canadian.  Canada has what can be argued as the strongest and most secure centralized banking system in the world.  A system that has withstood many pressures from the collapse of the U.S. Banking systems and other financial institutions abroad.  If the likes of the United Nations and the United States pressure Canada to sign onto such a scheme it could be a blow to our economic future.

So to answer my opening question, “Is it time to be optimistic?”  At one time I truly thought so.