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The Three most important numbers to understand before investing: GDP, Inflation, and Interest Rates.

Statistics Canada reported a rise of 2.8% in GDP annualized over 2006. The latest report available indicates an increase in GDP of 0.3% in May, 2007 after remaining nearly unchanged through April. Strong increases in retail and wholesale trade were present while a drop in oil and gas exploration constrained overall growth. GDP Growth is expected to remain strong through 2007 at an estimated 2.6% and subsequent 2.7 % in 2008.

Higher interest rates combined with an ease in housing starts and slowing profit growth will slow economic growth; however, a number of external factors, mainly a resurgence of the US economy, will keep the overall growth in the Canadian economy near 2.6% in 2007.

As a result of the anticipated growth remaining strong but constrained, the Bank of Canada is likely to hold off on interest rate hikes in the near term. As interest rates remain stable so too will consumption of capital investments as no higher rates will force consumers out of the market and no lower rates will attract new consumers. This policy will continue unless inflation increases, which would result in an increase in interest rates from the Bank of Canada to decrease consumption, or inflation decreases, which would result in a decrease in interest rates to revitalize consumption.

Further, as a result of the continued moderate growth in GDP the yield curve has remained stable with a positive long term trend, the stock market although experiencing volatility has held gains through the year and the Canadian dollar has strengthened substantial against the green back and other major currencies throughout the year..

Inflation: Statistics Canada reported in July, 2007 a rise of 2.2% year over year in total CPI, which was identical to increases over the past 3 months. The Cost associated with owned accommodation was attributed for the fourth straight month to represent the most significant portion of the CPI rise. These price increases were offset by falling prices for gasoline, computer equipment and supplies, and natural gas.

Rising inflation due to a world wide economic expansion has caused many Nations to raise rates over the past few quarters in an attempt to ease inflation concerns. With the latest data placing inflation within the Bank of Canada's target rate of between 1% and 3%, the case for a pause in interest rate policy remains strong. However, caution should be taken as

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