Send Some To Canada

It has been my contention since the beginning of this crisis that the individual investor's best protection from financial ruin is diversification. As the wisest man who ever lived said, "divide your investments among many places, for you do not know what risks might lie ahead." (Holy Bible, Ecclesiastes 11:2, New Living Translation)

In light of the above advice, I have been advocating that my clients move a portion of their investments to Canada, to diversify away from the risk of a US dollar/banking system default.

"But isn't there a risk that I could send my money to Canada and not be able to get it back," I am always asked.

Of course the answer to that questions is "yes," but the answer to that question about ANY investment (except for gold or silver) is "yes."

Is there risk of loss in an FDIC Insured bank account here in the US? ABSOLUTELY!

So the question to ask is not "is this risky?" The question to ask is "what has the least risk?" Because right now..... EVERYTHING is risky.

Back to Canada
Newsweek recently ran an article entitled Worthwhile Canadian Initiative, in which they stated that "Canadian banks are typically leveraged at 18 to 1, compared with U.S. banks at 26 to 1."

Bottom line? More leverage equals more risk. End of story.

The article continues "Guess which country,alone in the industrialized world, has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors. Yup, it's Canada. In 2008, the World Economic Forum ranked Canada's banking system the healthiest in the world. America's ranked 40th, Britain's 44th."

Chris Laird, editor of the Prudent Squirrel Newsletter was recently asked what currencies he feels are the safest to move into. He only mentioned one.... the Canadian dollar.

Conclusion
Can the Canadia dollar fail? Yes. Can Canadian banks fail? Yes.

But those are not the questions to be asking. The question to be asking is "where is the LEAST risky place to store some of my wealth?" For my money, it's Canada.