I tend to think that I know a little bit about investing, why currencies fluctuate, and how to spot value in the stock market. Even given this confidence in my modest investing acumen, I am obviously no match for the superior thinkers that are employed in the mergers and acqusitions departments at large institiutions like the Toronto Dominion Bank (TD), Canadian National Railway (CNR), or the Royal Bank of Canada (RY). It seems to me that those involved in making these high level decisions at these large companies have decided that now seems like as good a time as any to be buying U.S. assets. Recently these three companies and others in Canada have all been involved in takeovers of U.S. companies using our strong Canadian Dollar to buy up Uncle Sam's own.
I've often thought that a great metaphor for one's household expense system might be a corporation's. We all have cash flow as earnings, capital expenditures, debts, and investments that we want to grow or product income, just like corporations do. If Ed Clark from TD Bank thinks now is a good opportunity to buy a 8 Billion dollar U.S. bank, and the high Canadian dollar is at least one of the reasons for doing so, should I be taking a bias to buying U.S. assets as well, to try to grow my capital? To be fair, part of the reason that TD decided to buy Commerce Bancorp (CBH) was probably because of the weakness of the U.S. banking sector currently as a result of the ongoing credit crunch, but it is hard to imagine that the tremendous strength of the Canadian Dollar doesn't have anything to do with this trend. A trend that we may see continue, if you believe a certain MSNBC loudmouth with rolled up sleeves.