The Dollar’s Cracking And Canada’s on the Hook

The bond market is screaming, oil is falling, and Canada's bracing for impact 04/11/2025

It’s Friday Night, and Here’s What’s Happening

Prime Minister Mark Carney held a cabinet meeting today after pressing pause on his campaign. Some critics have dismissed it as political theatre, a staged move to show leadership. But I think something much more serious is going on.

All signs point to one thing: the U.S. bond market is in trouble, and that spells real danger for Canada.

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💸 Canada Holds $300 Billion in U.S. Debt

Canada holds around $300 billion in U.S. Treasury bonds essentially, we’ve loaned the U.S. money and we earn interest in return. It’s the kind of investment central banks and pension funds love because it’s supposed to be ultra-safe.

But not anymore.

In the last 48 hours, the bond market has started to panic. There’s been a major selloff and it’s not because of some random market mood swing. It’s deeper than that.

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📉 Why the Bond Market Is Freaking Out

1. Low yields on old bonds
Investors are ditching their low-interest bonds because, frankly, they want more return especially when the U.S. is looking riskier by the day. If you’re loaning money to Washington, you now expect to be paid more for that risk.

2. Chaos in U.S. politics
The U.S. is heading straight into another debt ceiling crisis, and Congress can’t agree on a solution. If the debt ceiling isn’t raised, the U.S. literally might not be able to pay the interest on its existing debt including what it owes to Canada and its pensioners.

3. Trump’s tariff war
Trump’s new tariffs have sent shockwaves through global markets. Some are even speculating that China which holds about $800 billion in U.S. bonds — could be quietly selling off debt in retaliation. Probably not, but even the rumor is enough to shake investor confidence.

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💥 And What Happens When Confidence Cracks?

The U.S. dollar weakens. And when that happens, the Canadian dollar rises not because our economy is booming, but because investors are losing faith in the U.S.

But that’s bad news for Canadian exporters. A stronger loonie makes our goods more expensive for American buyers. From cars and tech to wheat and timber suddenly, Canadian exports look overpriced.

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🛢️ Meanwhile in Alberta, Trouble Is Brewing

Oil prices are falling. Fast. And with the U.S. dollar sliding too, Alberta is getting hit from both sides: lower revenue for each barrel sold, and fewer buyers able to afford them.

Don’t expect any new pipelines to get built in this climate no investor is going to fund a long-term energy project with prices this volatile and political risk this high.

And if things don’t stabilize soon, mass layoffs could slam Alberta’s oil and gas industry, just as families are already feeling the pinch.

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🧨 This Couldn’t Come at a Worse Time

All of this the bond selloff, the weak U.S. dollar, trade disruptions, and the threat to pensions is unfolding right now, in real time.

This might be the worst possible moment for anyone to be Prime Minister.

And yet, it might also be the most important time to have the right one.