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Thursday, September 20, 2007

Keep the Canadian pennies -- throw away the U.S. ones

A while back I got into it a little with a Bush supporter who was prattling on in our comments about how swell the economy was doing compared to that of all the other Western industrial nations. I've heard a lot of bullpuckey from apologists for the Chimp over the years, but even I was a little taken aback that anyone would be so foolish as to suggest such a thing.

Today another reader, far more alert, pointed out to me a deeply disturbing fact. Are you ready for this? Brace yourself:

The U.S. dollar is now worth the same as the Canadian dollar.

The Canadian dollar! You know, the one we've spent our whole lives making fun of?

Eat, drink, and be merry, friends. We are doomed.

Comments (28)

So does this mean the U.S. price we find on books will go up, or the Canadian price will come down?

So far the Canadian prices have not come down. Good for U.S. retailers up near the border, but not for anyone else.

The Canadian economy is based largely on the commodity trade. As the prices of oil, gas, precious metals etc. have increased over the last decade or so, the canadian dollar has increased in value. So you could argue that it is the appetite of developing nations for commodities that has caused the rise in the loonie in as much as terrible fiscal policies (which there are plenty) of the American government.

Same thing happened in the early 60s. I'm trying to remember who was president.

Same thing happened in the early 60s. I'm trying to remember who was president.

You must be thinking of 1976. The stock market was at an all-time high. So was oil. And we were just a few years out of a major Mid-East war. The president's name was Ford.

1976 was the last time they were at parity. It looks like the loonie was at premium during the 50s-60s until it was fixed at 0.92USD in 1962.

Just remember the Chinese yuan is tied to our currency (for now.) However, unlike the Canadians they are keeping their dollars to dump them at an opportune time (like if we want to raise import duties on them or help Taiwan.)

In 1962 I was just 10 years old and living at Bonners Ferry,Idaho and remember mom and pop taking me shopping across the border in Creston BC as most grocery items were cheaper and they had a great bakery at the time.
And Yes in late '62 into early '63 the Canadian dollar was worth more! As I remember Dad say.......A Hundred dollars is only worth $90.00 up there, but how we loved those trips.
Also kids used to bring the their .22 caliber rifles to school for recess to target practice.
Ah those were the days Jack!

Man oh man the ignorance in here is as thick as well... all of your skulls... First, THE CHINESE YUAN IS NOT PEGGED TO THE DOLLAR ANYMORE, SINCE 2005... Second of all, explain to me why a falling dollar is indicative of a poor economy and then by extension as you so stupidly imply that it has to do directly with Bush and his policies? (This is where you try to explain your ridiculous assumption and where I show you that a falling dollar is simply good or bad depending on whom you ask)
Maybe if you qualified your statements instead of just throwing them out there people with any sense would pay attention to you... For example you could say, "the dollar is falling and as a result foreign high end import goods such as French wine and German cars will be more expensive for American consumers"... Or you could say that "the dollar is falling and so foreign investors will be hesitant to invest in our markets." See those are some of the reasons a falling dollar is bad. I won't even get into how stupid your logic is about how the dollar is now low because it is equal to the Canadian dollar. Anyone with any experience in rhetoric could pick that one apart in a second, like how about, oh well has the Canadian dollar risen? Since they are equal with us now that means we are doing bad? Pretty gosh awful leaps in logic if you ask me or well ANYONE WITH A BRAIN! and yes that means I have a brain and you do not.
Second if you were a real journalist or reporter you would mention some of THE EXTREMELY ADVANTAGEOUS REASONS for a weak dollar... LIKE LOWER UNEMPLOYMENT!!! INCREASED DEMAND FOR AMERICAN GOODS AND EXPORTS, WHICH CAN INCREASE WAGES FOR THE WORKING CLASS!!! Here is the qualifier, as the dollar goes down obviously American goods become relatively cheaper for foreign buyers as their currency now has more buying power... Or how because foreign currency has more leg in our markets international corporations are more likely to buy land and capital and employee Americans…. Yes that is the reverse of our currency having more power in foreign markets and American companies deciding to invest overseas and (wait be warned here comes a leftist talking point word) OUTSOURCE.. But it doesn’t matter what anyone says or proves to you. You will choose to ignore these things and take contradictory stances like Bush likes to give tax breaks to the rich, thereby favoring them, and yet he has a weak dollar policy which helps the middle class... or how you want a strong dollar but yet oppose outsourcing and trade... you figure out why those are contradictory, it will be a little homework exercise for you, maybe your brain will grow.
Keep trying to find anything wrong with the economy that you can so you can continue to fuel your hatred of your President and perpetuate partisan politics... Reality check, given the obstacles we have faced and expensive and perhaps foolish foreign policy it is an absolute miracle that the economy is DOING WELL!!! Bag on war all you want but you are just a dishonest person if you try to stick to leftist talking points about the economy...

So does this mean that in the near future we might be able to go North and jam their vending machines with our coins.

Yes, a relatively weak dollar should indeed help stimulate exports.

The problem is, with the emigration of capital overseas (thanks to our "globalist" economic policies), there is precious little of value that we can offer up.

Make more guns, eh?

Back to your oar stations, drones!



While I agree blaming Bush for the decline that has been going on for 10 years is not entirely accurate, having a cheap dollar is a problem.

First, no one wants to buy dollar-denominated assets if they are likely to be worth less in local currency in a week.

Second, the one big import, oil, tied to the dollar just makes it cheaper for the rest of the world to buy.

Third, yes, our exports are cheaper, but the issue is we are manufacturing less to export.


would you please explain why you believe that we have emigrated our capital overseas to an extent that we will not add any value? Since you actually believe what you said maybe you should check your numbers in terms of how much manufacturing occurs in the united states relative to other economies; specifically high skilled labor goods. Go to BEA.gov , Have you forgottent that we have the largest economy in the world; both in terms of foreign direct investment into AND out of the United States. One recent year china had more fdi into their country than ours and that was a first and I don't believe the trend continued and a weak dollar will only keep more and bring more here...

Closely tied? You mean because we trade so extensively with each other? I guess I don't know what in the world you are taking about when you say closely tied? If it is not pegged then it floats like every other currency... The whole reason why the white house put pressure on Beijing to take the dollar peg off was because it artificially suppressed the price of chinese goods relative SPECIFICALLY to American goods and helped encourage a trade surplus on their behalf,,, Taking the peg off raises the Yuan because having it fixed against the dollar did not allow it to rise to its true market level... So while white collar investors may get hurt by the weak dollar (in reference to its relationship with the Yuan) it helps the export market and the manufacturing sector on all counts no matter what you say..

In regards to your two reasoned rationale behind why a weak dollar is bad... why don't you see above and notice that I addressed your first one specifically in saying a reason why it is bad... In terms of the oil being tied to the dollar so it makes it cheaper for the rest of the world to buy you mean oil is traded in dollars... big difference.... My overall point is that there is no right answer to this question... As in all economic principles there are winners and losers...

A sizeable portion of US capital has migrated overseas in pursuit of cheap labor.

The Rust Belt is the Rust Belt because capital owners moved their capital south to take advantage of sucko labor laws. Now, the South is in the process of inheriting the same as US investment goes overseas. Can you say "Nike"? How about "Intel"? Where are the greater portions of worldwide investment in new industries occurring?

Having the largest economy in the world rings a bit hollow when it's "finance" capitalism inflated by shiploads of debt refinancing by government, corporate and individuals.

What we have to trade in the international markets is of declining value compared to the goods being imported. The US economy's performance is being bouyed by a debt bubble...which will burst sooner or later. It's starting to slack now, and can only sag further once petrodollars become petroeuros instead. Then holders of dollars will dump them on the open markets and the debt calls will come in....sending the dollar spiralling down even further.

Go ahead, keep your rose-colored glasses on. Ignore what we've done to keep a quick buck in what is essentially a shell game. Refinance your personal debt...again.

Alex, you are not half as smart as you think you are.

uh does anybody remember the rhetoric of the mid and late 90's?? that the dollar was so high it was going to plunge the US into turmoil worse then the Great Depression? There is way to much hyperbole in the financial media. The price of the dollar, like all currencies is priced simply by supply and demand, its traded like any other security. Rising dollars, falling dollars, expansion and recession-all NORMAL economic cycles.

At least now if someone tries to pass us Canadian coins when making change, we're not being cheated.

Nice dissertation on economics, Alex, but I still prefer science.

The end is near.

With the country's financial future in peril, God knows what'll happen.

And a certain Asian country is going to want the money it loaned to us back.

Coming soon, a foreign army in a city near you!

But all will be well when the profits from the convention center, with hotel, start gushing in. It will save the whole county.


Just wait until the Asian country, who is loaning the Bush run Government the billions and billions of dollars to wage the illegal war wishes to be repaid. One should register now for a crash Chinese language course at you local institute of higher education.

Its interesting in the sci-fi series Firefly, English was a second Language and Chinese was the first.

I am sure the Romans thought their economy was to big to fail as well. The country hasn't been the same since Corporations were granted "human rights" in the same bill the freed the slaves in the mid 1880's and began becoming global in the 1890's and early 20th century.

Thank God we bought the aerial tram when we did! Otherwise it might have been expensive.

And...when one adds on the gst and provencial taxes everything really costs 20% more!
Tourism and other sectors of the economy are not doing well either.

So now our Canadian friends cannot refer to their dollar as the Canadian Peso-eh?

Recession? How About Collapse of The Capitalist Model of Society As We Know It?, by Pablo Ouziel, September 21, 2007

The same group of people who lied to the world about the war in Iraq are
doing the same about the state of the global economy, and again the public
is sleepwalking
listening to their lullabies. We could be witnessing the
collapse of capitalist model
of society as we know it. According to
President Bush, however, we are seeing a "thriving" U.S. economy.

The lesson we should all learn from Iraq is that this group of 'Elites', the
ones Bush refers to as his 'base', have no respect for human life, all they
care about is financial profitability and personal power. They will lie to
all of us and use any excuse to justify their objectives, but ...

Then ther is this:
In Italy, Luca Cordero di Montezemolo, head of Italy's largest business group, Confindustria, Thursday called on the ECB "to do something" about the strong euro, saying he would put pressure on the Italian government to lobby the central bank to bring the value of the currency down.

French plane maker Airbus is seen as one of the more vulnerable of Europe's industrial giants.

"Obviously, we're very vigilant, and we don't want the euro to strengthen," said senior Airbus Chief Operating Officer Fabrice Bregier said Friday.

The euros negative impact on European business "is starting to be realized at the political level, and that's very important," he said in a French radio interview.

Bregier said the company's EUR2 billion annual savings plan was based on a euro-dollar rate of $1.35. At current levels, savings would have to be sought elsewhere and the plane-maker would have to switch to dollar-based suppliers.


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