www.insideHALTON.com · OAKVILLE BEAVER Thursday, November 15, 2012 · 22 he U.S. is dangerously close to driving its economy over a fiscal cliff where the economy would crash. Last week, Canada's Minister of Finance Jim Flaherty said that would cause an instant recession in the U.S., spreading to Canada soon thereafter. This is serious for the U.S. and Canada. Potentially, it could be serious for those of us here in Oakville. The fiscal cliff refers to the perfect economic storm that could hit within the next few months. It is the combination of two separate and mammoth T U.S. may go over a `fiscal cliff' and take Canada with it events that will rattle the fragile U.S. economy at the same time. There is an automatic tax increase coming as of Jan. 1, 2013, affecting many Americans. Current tax reductions, that in some cases were implemented several years ago by former President George W. Bush, will expire. Higher taxes will mean the American consumer will spend less. Consumer spending is one of the largest elements of the U.S. economy, so that one event will shrink the current amount of economic activity. Dollars & Sense By Peter Watson Better Hearing Day HEARING SCIENCES BRONTE Wednesday November 28 8:30-5pm Spaces are limited. 1 DAY ONLY Call for your complimentary hearing test! At the same time, there are significant government spending cuts that were negotiated last spring when the U.S. was on track to hit its debt ceiling. American law says Americans must politically negotiate the terms to extend the borrowing limit beyond specific levels. Those terms, from earlier this year, included spending cuts to as many as 1,000 government programs. A massive reduction of government spend- ing will also shrink economic activity. The perfect storm analogy reflects that both the consumer and the government will stop spending at the same time. It is expected this will reduce the total economic growth of the U.S. from its current level of plus two per cent to minus two per cent. Negative growth for two consecutive quarters is the definition of a recession. When the giant American economy slows down, it is just a matter of a brief amount of time that we will follow. About three quarters of Canadian exports go to the U.S., so Canadian businesses will be forced to reduce spending. The ripple effect will spread to all areas of the Canadian economy. Perhaps the American political system will resolve these problems and perhaps it will not. Either way, the American giant sharing our border has serious financial challenges. As stated above, this is serious. Our task is to anticipate how this will affect us individually. Specifically, how this will impact our financial objectives, such as planning for retirement, paying down personal debt and financing our children's post-secondary education. Consider this just one more eco- nomic speed bump. We seem to have had these coming at us non-stop since much of the world was pushed into a recession as a result of the 2008 sub-prime collapse of the American residential mortgage market. Our advice to individual investors is stick to the fundamentals of your financial plan. Yes, you might have to make financial adjustments depending on how this anticipated economic turmoil hits you, but stick to the basics. Hopefully, you will continue to save for retirement. Paying down debt remains an excellent idea. Manage your portfolio well and continue with your longterm investment strategy that likely includes owning both equities and bonds. Will there be stock market volatility? Yes, but that's normal and that is how stock markets work. While the markets are volatile, you are not. Your stability comes from continuing to do what you always have been doing. Keep working towards your important financial goals. -- Submitted by Peter Watson, MBA, CFP, R.F.P., CIM, FCSI. Agil is the revolutionary new hearing device that helps you understand more with less effort. Research studies have shown that people fit with Agil hearing instruments report an amazing 86% Overall Satisfaction Rating and a 93% rating for Speech Clarity! With Agil, you'll reconnect with the voices, music and sounds that enrich your world. Life will seem brighter and more fulfilling, because you're hearing better and understanding more. IF YOU HAVE NOT LISTENED TO THE NEW DIGITAL TECHNOLOGY RECENTLY, THIS IS AN OPPORTUNITY NOT TO BE MISSED! An Audiologist will be present at our Better Hearing Day to demonstrate the impressive Agil automatic processing digital instrument. It is available in several different styles and price ranges. Hear your phone conversations with ease even cell phones with the automatic phone feature. Come and listen to the actual hearing aids. This is the best technology available today. Listen and judge for yourself. CALL NOW 905-465-3277 (EARS) 2419 MARINE DRIVE OAKVILLE NEW OWNERSHIP