Remember those investment strategists from a couple of years ago who claimed that higher energy and gasoline prices would be deflationary? At the time, we thought that this was one of the most absurd investment conjectures that we had ever heard. Driving down any Canadian highway today at the posted speed limit of 100 kph, there is obvious evidence of the error of yesterday’s sage investment prophecy. Even with gas prices over $1 a litre, cars fly by at 140 kph with fuel economy being crunched under their drivers’ heavy accelerator feet. So much for higher gasoline prices emptying the pockets of drivers and hurting consumer spending!
Read the full newsletter at the link below.Canso April 2007 Market Observer