What is the QE3 ? Last thursday on September the 13th, the world was hit with news of the QE3 or what many described as the "Bernanke's Bazooka." Ben Bernanke the current chairman of the Federal Reserve (Central Bank of the USA), announced that they will be expanding its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month. Fed funds rates would also be maintained near zero (0-0.25%) until economic conditions within the US improved.   Below is an info graphic explaining how Quantitative easing works to improve the economy.     Implications for the Canadian Economy The Federal Reserve's plan to print millions of dollars into the economy will essentially devalue the US dollar and in turn, benefit the Canadian currency. As a result, Canadian's will experience an increase in purchasing power as long as the plan is in place. Just last week the Loonie touched a one-year high versus its U.S. counterpart and outperformed 14 of its 16 major counterparts.   Foreign investment within the country is also looking to increase. This is because as the US Federal Reserve purchases more mortgage securities and treasuries in the economy, the yield for these safer investments ...

Alberta’s economy is significantly outperforming the national average, as rising oil production fuels growth. Alberta posted the fastest pace of real GDP growth at 5.2% in 2011, and should remain atop the leaderboard this year. Barring a significant downturn in oil prices, Alberta will lead provincial economic growth over the medium term, and Calgary and Edmonton both stand to benefit. Energy sector fuels growth… The energy sector continues to power growth in the province, with oil production up 15% y/y in the first quarter of 2012. Crude bitumen production led the advance, and the Province is expecting growth of more than 10% annualized in the next three years. The spillover effects of rising oil production extend across various sectors in Edmonton and Calgary, including manufacturing of products involved in the exploration and extraction of oil as well as transportation & warehousing. But some risks remain, and the two cities are no stranger to boom-bust cycles. Political wrangling over new pipeline capacity (Keystone XL and Northern Gateway) continues, and in the meantime, refinery outages in the U.S. Midwest and more Bakken production filling pipeline capacity have widened the discount received by Canadian producers relative to WTI. Labour Market… Employment was hit hard during the recession in both Calgary and Edmonton, as falling oil prices and tight credit conditions ...