This is a theme I keep coming back to and, I believe, will be a top theme in 2012.
There is a battle ongoing in US political and intellectual circles about the path out of near-zero growth. Influential policymakers, like Larry Summers in this article, are increasingly talking about increasing government spending.
My feeling is that they will win out, because they always win out. The US public attitude is in favor of some austerity but the urgency to create jobs and grow the economy is far greater. At the same time, the bond market is giving the green light to more spending and stimulus like the proposed foreign holdings repatriation holiday.
If measures like this the initial reaction will be USD buying but in the coming weeks the money will flow into commodities and, especially, CAD due to its leverage to the US economy.