Because Canada holds the second largest oil reserves in the world, foreign capital inflows into and out of TSX energy companies are key drivers moving the Canadian Petro-dollar. Output from Alberta’s oil sands region, the largest crude reserves outside the Middle East, will rise to 3-million barrels per day (bpd) by 2018, more than double over the next nine years, from about 1.3-million bpd last year.

Canada has roughly 180-billion barrels of oil reserves, with all but six billion barrels locked in Alberta’s oil sands, a mixture of sand, water, clay and bitumen that’s too heavy to use without being heated. Oil must be priced at $65 a barrel for new oil sands projects to be viable, according to the Canadian Assoc of Petroleum Producers. Petro-Canada and Suncor Energy have joined forces to create Canada’s biggest oil company, a merger expected to save C$1-billion a year in capital costs and C$300 million annually in operating expenses.

But Canada also controls huge resources in iron ore, nickel, copper, zinc, gold, lead, silver, timber, fish, coal, petroleum, natural gas, and diamonds. Ironically, Canada’s minerals industry, including smelting and refining, only contributes about 4% to Canada’s GDP, yet lately, it’s the direction of base metals, especially copper, that’s increasingly influencing the direction of the Canadian dollar, subtlety dethroning crude oil, as the Loonie’s key lynchpin.

Canada is the third largest copper producer in the world, after Chile and the USA. It is also the world’s largest zinc and second largest nickel and lead producer. A small number of producers, including Noranda, Inco, Falconbridge, Teck Cominco, Boliden and Hudson Bay Mining, dominate base metal mining in Canada. Inco, owned by Brazil’s Vale, supplies a quarter of the world’s nickel, and also produces copper, gold and cobalt. Falconbridge and Noranda, owned by Xstrata Mining, mine nickel and copper at the world class deposits at Sudbury, Raglan and Kidds Creek.

Over the past decade, Canada has also emerged as one of the leading nations in the high-tech and computer industry, mostly located in Ontario and Quebec. There is also a large industrial base which includes companies that produce pharmaceuticals, aerospace products, and telecommunications equipment. About half of all Canadian manufactured goods are produced in Ontario, second only to Michigan, as the largest producer of automobiles and car parts in North America.

So while capital flows into base metal miners and oil company shares, lifted the Canadian dollar 20% higher, the larger population of Canadian exporters, the backbone of the economy, are hard hit by a stronger Loonie, since they receive most of their sales revenue in US-dollars. Canadian exports rebounded only slightly to C$29.3-billion in June, standing -36% lower than a year earlier. The Canadian central bank thinks the Loonie has run ahead of the trade weighted fundamentals.

…..read more HERE.

Gary Dorsch, editor of the Global Money Trends newsletter worked on the trading floor of the Chicago Mercantile Exchange for nine years as the chief Financial Futures Analyst for three clearing firms, Oppenheimer Rouse Futures Inc, GH Miller and Company, and a commodity fund at the LNS Financial Group, members of the CME and CBOT. Gathered news and information from trading pits and newswire sources on the Chicago Mercantile Exchange, and telexed daily and weekly analysis of foreign exchange, global interest rates, gold and other commodities to clients in Hong Kong, London, the Middle East, and dozens of commodity trading advisers across the United States. After the closing bell, Mr Dorsch broadcasted a half-hour talk show on the financial markets to 40 customer branch offices around the United States via live hook-up from the trading pits of the Chicago Merc.

Mr. Dorsch has been an active trader in foreign exchange, US high grade and corporate junk bonds, foreign government bonds, gold stocks, ADR’s, and a wide range of US equities and options over the past 25 years, and in Canadian oil trusts for the past 5 years. He holds a Bachelor of Science degree in Finance from Arizona State University, as a Sun-Devil from Tempe, Arizona. He is married to his wife Beth, (his infotech expert), both raising two children Rachel and Joshua. He left Charles Schwab and Company in September 2005, to work full-time for the SirChartsalot.com web site, to trade markets, and to write a book.

FOR THIS WEEK ONLY SPECIAL! Mark Leibovit has slashed prices 50% for his VR Trader Newsletter.  He wants you to get this information!

The weekly VR Gold Letter focuses on Gold and Gold shares. The letter is available to Platinum subscribers for only an additional $25 per month and to Silver subscribers for only $35 per month. Email Mark at mark.vrtrader@gmail.com, but do it this week!

Ed Note: Below is a small excerpt from Mark Leibovit’s tremendous 11 page VR Gold Letter. The VR Gold Letter is published WEEKLY. This excerpt from 9/06/09.

Needless to say, it was an exciting week for precious metals and shares. The big story this week is the advance in gold, silver, and the mining stocks. For the week, GLD was up 3.9%, SLV was up 10.14%, and GDX was up 12.05%. These advances were in the face of a range bound dollar, so it is becoming evident that precious metals are being accumulated for their tangible value as an inflation hedge. Spot Gold touched 998.70 breaking out to the upside of a previously reported ‘wedge pattern’ which, at minimum, points to 1060.00.  However, looking at the huge reverse ‘head-and-shoulders’ pattern that stretches back to March, 2008 we can generate huge upside targets.  The calculation is based on taking the low of the ‘head’ and measuring the amplitude to one more ‘shoulders’ and then adding that value to the top of the ‘shoulders’.  One such target is 1300 and another is 1410.  For the measurement to kick in we would have to see all previous tops broken out accompanied by heavy upside volume.

From SirChartsalot.com

“The same weapons that Beijing is utilizing in order to re-inflate the Shanghai stock  market, are also working to lift the local gold market, challenging 6,800-yuan per ounce. On April 24th, Hu Xiaolian, head of China’s Foreign Exchange said in an interview that the country’s gold reserves had risen to 1,054-tons from 600-tons since 2003, – but still has only about 1.5% of its total assets in gold. China and Russia – two key nations with relatively low proportions of gold in their reserves, might be clandestine buyers – even if only soaking up gold from their own domestic miners which otherwise be shipped for export or sold locally.

Russia too, with only 2% of its assets in gold, has been making purchases from domestic output – and with Prime Minister Putin stating publicly that the country should hold 10% of its reserve assets in gold. Another key factor is the fate of the IMF’s program to sell 400-tons over the next three years. If the IMF’s gold is sold directly to one or a few central banks – with China, Russia, India, Brazil, or the Arab oil kingdoms mentioned as buyers, it would be a huge boost for gold’s position as a global currency.”

The VR Gold Letter is available to Platinum subscribers for only an additional $20 per month, while for Silver subscribers the price is only an additional $70.00 per month. Prices are going up very shortl, so act now! Separately, the VR Gold Letter retails for $1500 a year! The VR Gold Letter is published WEEKLY. It is 10 to 16 pages jam-packed with commentary and charts. Please call or email us right away. Tel: 928-282-1275. Email: mark.vrtrader@gmail.com .

Marks VRTrader Silver Newletter covers Stock, TSE Stocks, Bonds, Gold, Base Metals, Uranium, Oil and the US Dollar.

More kudos – Mark Leibovit was named the #1 Intermediate Market Timer for the 10 year period ending in 2007; the #1 Intermediate Market Timer for the 3 year period ending in 2007; the #1 Intermediate Market Timer for the 8 year period ending in 2007; and the #8 Intermediate Market Timer for the 5 year period ending in 2007. NO OTHER ANALYST SURVEYED APPEARED IN ALL FOUR CATEGORIES FOR INTERMEDIATE MARKET TIMING AS PUBLISHED IN TIMER DIGEST JANUARY 28, 2008!
For a trial Subscription of The VR Silver Newsletter covering Stocks, Bonds, Gold, US Dollar, Oil CLICK HERE