Just heard on the news that the Canadian currency will equal that of the US by sometime this year ending. The last time the canadian dollar was equal to the US was in 1976.

Do you have an online source for this story? I'm a member on a predominantly american based forum, and while Americans give me tons of ammunition to sling their way, all they ever come up with are jokes about our currency. I plan to rid them of of that too. Good news for us! The day the dollar is matched I'm going car audio shopping in Detroit

Well, to be honest I read today something similar. It stated that our currancy is the highest that it's been in 30 years but WILL NOT reach parity with th US dollar this year. The projection for the future is for our dollar to increase to $0.95 US by the end of '08, and to reach parity by the end of '09. There is no way that the Canadian dollar will reach parity with the US this year, $0.07 is a lot of ground to cover in 7 months.

I heard it this morning on the news before I went to work.

They're projections..not fact. I wouldn't use it in any jokes until it happens, Rahim.

Of course not, never. Their government is giving me plenty of stuff to sling their way.

You don't really want it to be on par. If that becomes the norm, you can say goodbye to a lot of CDN businesses as their US backers leave them high and dry for being too expensive...

Well get used to it. David Dodge dropped another bomb this morning... we are in talks about having a combined North American currency like the Euro.

Is this a result of the American economy tanking or the Canadian economy kicking ass and taking names?

Also will you guys please link your sources.

CBC Report
CTV Brief Article
Star Article

Basically, it's split to two ideas.

First, that we're up because both our commodities (oil, minerals), and our goods are selling well in the market. More people are buying Canadian stuff, so we're actually keeping ourselves employed (which usually doesn't happen when your dollar is expensive for other people to buy). Everyone believes that.

Secondly, that the American dollar is having issues does help us (in comparison to them). Not sure if everyone feels that, but their debt has lept 3+ TRILLION over the past 7 years. And they're actually at a trade deficit (they buy more stuff from other countries, than other countries buy from them). Especially with China. Thus, they look bad.

But, while we get the bragging rights at the moment, and it's good for my vacation to Disney in 2 weeks, truth is if the American economy tanks, we'll be affected. We might not tank as badly, but there's no escaping the effect of their economy on ours.

I have no back ground in this but I will take a stab at it.

The Canadian dollar goes up vs. the US dollar when more people invest in the Canadian dollar then the US dollar. The most important factor in this are the interest rates of each Country. People are currently banking on the Canadian interest going up before the US interest rates.

Of course many things effect interest rates but the two most important are the health of the economy and inflation. When inflation is in check and the economy sucks the Fed will lower interest rates to stoke the economic fire. Once the fire starts burning well rates will stop increasing. If you raise them too much you will suffocate the economic fire. But then you have inflation and the only way to fight it is to raise interest rates. But what do you do when your economy is slowing but your inflation is going up? You can't lower the rates or you send inflation up... you can't raise the rates or you choke the economy. Welcome to 2007, this is exaclty the situation the new Fed in the States is dealing with. It's too early to tell yet, best bet is the economy won't slow too much and inflation will only raise a little. But Greenspan (the old Fed) says there is about a 1/3 chance of the US going into a recession at the end of the year. It sure doesn't look good for investing in the US dollar. If inflation goes way up the interest rate might go up to fight it but the economy is just barely getting enough air as it is, if rate go up the economy will get creamed. This of course will result in the need for lower interest rates.

So since the rates can't really go up in the near future in the US and significant amount no one is investing in the US dollar and it continues it's plumemt.

Chabang.

The American economie has been artificialy held (interest rates) for a few years. Merican are still buying way more than they make as per 2005 numbers.

We as canadian can borrow up to 35/40% of a dept to equity ratio. Merican can go over 100%...

The Canadian economie will drop down when the us cra$h but will not be in as much in the $#it as we will not be as much in dept.

Now we must as well not compare our economie as par with the us as they are 10 x (grosso modo) more by population and buy way more that we do for the same wadge (hence the over inflation).

Long story short now is the time to stabilise your financial so you hvae some capital to buy cheap property after the us/Canadian economy takes a plunge.

Hee haa!!!

Ghislain.

Technically, a single currency would make sense. However,

A) You KNOW the Americans would insist on the 'American' Dollar being the defacto standard. Too bad it's not as pretty as ours. Even Americans love our multi-coloured currency.

B) You couldn't then have their dollar drop as our dollar rises. One currency, and they'd drag us down with them.

C) The CRTC crows about our losing national identity because of US TV. What is the effect of losing our own currency, do you think?

D) Look at the grand plan they had for the Euro in Europe. It SHOULD have replaced everything and became the defacto standard. Instead, the seperate countries insist on keeping their pounds, francs, deutchemarks, kronen, turtle shells, etc...etc... Net benefit for the expense? Near zero. Sort of like our gun registry.

And don't be so pleased about the US' collapse. You know that when things get REALLY desperate for them, they'll start invading north and south for new lands to pillage.

I do not think that a North American currency would be the way to go. It has some success in Europe but the context is slightly different over there. The Euro is used by numerous country, a few with large economie and a bunch of smaller country. Some are benefitting others don't. The idea of a Euro Union has also to do with political stability.

The American economie is 10 x larger than ours. Each country's (Canada, US and Mexico) is driven by it's own economie and somewhat follows the largest economie's trends. That is where we could be dragged into high interest rates when our economie does not support it. In other words we could end up paying high interest rates when we can not afford to and would not have as much of a say.

Keeping the Canadian currency allows us to manage it as well as adjusting our interest rates. That is one of the things a sovereint (sp???) country does; manages it's own economie the best that it can.

Troy, do not take this the bad way but thinking that the US will one day invade us is a little coco... Have you ever asked yourself what would the rest of the world (think EU here!!!) say if they would do so???

Ghislain.

A common NA common currency is a pipe dream with the way today's USA is. The reason countries will go with a common currency is to form a union with other countries. In Europe they have formed a union. A union is formed to eliminate trade barriers between the countries. The economic theory is that the countries will fair better economically without any trade barriers. A common currency is just one component of eliminating trade barriers. The union also has to establish common trade agreements with countries outside of the union. The borders between the countries also become open. Countries outside of the countries within the union will still have borders separating them, but the unionized countries must have the same security measures. The European Union has taken these measures. Does anyone think that the US population would agree to terms such as these? I think our cultures are to different for negotiations of a NA union to come to an agreement at this time.

You never know Ghis, don't rule it out. We have a great deal of resources that will be of immense value in the future namely oil, natural gas and fresh water. Who knows what state the world political powers will be in when one or some of these run out.

I don't see it as likely but I'd never dismiss it outright.

The US will never invade Canada for our resources. They already own the largest share without resorting to force.

I do not dismiss it although I think that it is unlikely but some in here watch way too more tv...

Ghislain.

Not TV, Ghis... And I wasn't referring to anytime in the near future, either. But with their policies, selfishness and greed... They may have the largest share of resources, but they're also the largest consumer as well. I'm not thinking so much for oil, but more for things like water.

When a need that basic hits hard, and Canada has enough of a backbone not to just give away what we have, I can see things changing. And the EU won't really have much to say about it beyond shaking their fingers, I think. At that stage, the US won't care, and will be too strong for them to openly oppose over a country as 'minor' as Canada.

No doubt. We have been giving away our resources and upholding treaties with the US, while they break their deals with us everyday. It's much much cheaper just to rip us off then invade.

Alot of people are very afraid of the dollar reaching parity, as that might cause many US owned corps. to bail out due to increased costs. Come over to the western part of this country, and see that we aren't as nearly tied to the USA as the east. That's because the US has been screwing us on water/oil, farm subsidy and softwood lumber. Go to Vancouver and see the port, and look at the massive grain terminals from Sask. and Alberta. We're already shipping over sea's.

The answer for this country seems to be in diversity. We need to be selling more and more to China and Eu. Why should we tank when the US does?

I can just see Quebec and even the west start up another seperation campaign when talk like a common currency gets going =p



/rant off

Resource is defenately something that our neighbour to the south are interested. Their foreignt policy and their way to deal with trade disputes is one of the things that affect us the most. Resource were defenately affected and were mostly driven by american manufacture lobbying.

On one side they are buying and getting their resource from outside source and on the other side some are lobbying to ony get us products and resource.

Any country can not survive by themself, trading with one and an other allow both to prosper. That is basic trade 101.

Some of the Canadian mistake is that we sell our raw product not only at a cheap price but we do not transform these products before we sell them. We are also limited by our geographical location. Our only "near by trade partner" is also very hungry for our resource. We sell them raw material and buy finsihed goods made from these resource. Kind of ironic if we look at our skillsets.

Best we can do is to support our local/canadian economie, not get as much in dept, sell our goods (raw and/or transformed) at a fair international market value and to deversify our trade partners.

Now if we could start our own automobile manufacturer...

Ghislain.

If there comes a time when the US is more desperate than they already are for water I don't think they should have to buy it from us...Personally, I don't think anyone should 'own' water or have to pay for it at all. It's something everyone and everything needs...It belongs to all of us.

It sickens me that other people in the world have limited amounts and have to beg for it.

We're not civilized yet.

Interesting on the water thing, my boss's neice's husband works for some big computer programming company and they designed a program for the us government that locates all freshwater in the world via satellite and catalogs it.

Pretty crazy if you ask me.

Only the american would need such a thing.

Anyone with a little comon sence could figure it out without satelite and fancy software...

I hear banjo music in the background.

Ghislain.