Canadian dollar approaching parity with U.S. dollar

[Praxius]

CTV News | Canadian dollar approaching parity with U.S. dollar

The Canadian dollar is creeping closer to parity with the American greenback, trading at 96.97 cents US, up 1.22 cents, as of 11 a.m. Tuesday. The dollar had slipped to 96.9 before the North American trading market's opening bell but it was expected to keep gaining strength as the value of the American dollar continued to plummet against other world currencies. The weakness of the greenback drove the value of the loonie up from about 95.75 cents on Friday. Michael Kane, a business reporter with BNN, told CTV News Channel that the weak U.S. dollar may give Canadians more purchasing power but that it will cause serious financial struggles for the manufacturing industry. Kane said the international market might look elsewhere for cheaper deals on commodities and other Canadian exports. The markets indicate that the Loonie will likely soar in value to match the greenback and will likely stay that way for a while, he said. "When it does hit parity, and maybe goes beyond a little bit, we'll see it stuck there for what is being called 'an extended period of time,'" he said. "If the normal value of the Canadian dollar is at par, then the manufacturing industry in Canada which sells into an international market will have to take it very, very seriously because what it means is that other countries can supply manufacturing goods perhaps at a cheaper rate.".......

Nothing new, as last year our dollar was well above the value of the greenback.

So if this is going to be on or above par for an extended period of time.... what does that mean in the long run for the US dollar and it's use as a standard, since so many other nations and organizations are talking of changing it from being standard?

And I see more benefits then draw backs for our money being equal or more then the US..... as I doubt exports would be hurt that much..... except perhaps to the US, which only means we'll have to seek out other nations to trade with, which I figured we should have been doing decades ago.

The only reason why it'd hurt our exports is because of our government continually putting all our eggs in one basket, ie: the US being our main trader..... their currency being lower then ours tends to remove the concept for Americans that there's value in trading with us, because it's simply cheaper..... now it won't be...... again.

[Praxius]

The other part of the report:

......The Loonie has soared mainly because of a heightened demand for commodities in the global market. The Canadian currency is strongly viewed by global traders as being linked to commodities. The demand for commodities has gone up because the U.S. dollar took a nosedive, Kane said. "It has a slingshot affect because commodities are priced in U.S. dollars," he said. "So when the U.S. dollar goes down against other currencies, it makes gold and oil, platinum and copper relatively more attractive to non-U.S. investors, so that has the effect of people coming in and buying up gold and having the effect of driving prices of gold higher." "That's a positive for the Canadian currency because our economy is tied into the price (of commodities) so its like a doubling of the influence when the U.S. dollar gets weaker and that's what we're seeing here today," he added.

Makes sense.

[walleee]

I might be an American, but i can see what you meant when you said you should export somewhere else. The united states is going down hill in everything from Wall Street to the banking systems. The United States used tax money to bail out important businesses to the nation. Which is only making the value of the US dollar worth less, because it is just putting the US farther in debt. This is the land i was raised in and this country is getting worse everyday.

Now im not sourcing anything because i didn't get this from anywhere this reply is my own opinion without any proven facts.

[Praxius]

Quote by: walleee I might be an American, but i can see what you meant when you said you should export somewhere else. The united states is going down hill in everything from Wall Street to the banking systems. The United States used tax money to bail out important businesses to the nation. Which is only making the value of the US dollar worth less, because it is just putting the US farther in debt. This is the land i was raised in and this country is getting worse everyday. Now im not sourcing anything because i didn't get this from anywhere this reply is my own opinion without any proven facts.

Well fair enough and I of course wasn't meaning to bash the US in regards to the exports comment.... as it could be any country a nation decides to rely almost totally on exports.

If you export to many nations rather then just one, you don't get affected as badly when one of those nations has problems..... but if you rely mainly on just one nation based on convenience, if and when they have problems, you have a big problem. (thus my eggs in one basket example)

[thebuescherman]

Quote by: Praxius Well fair enough and I of course wasn't meaning to bash the US in regards to the exports comment.... as it could be any country a nation decides to rely almost totally on exports. If you export to many nations rather then just one, you don't get affected as badly when one of those nations has problems..... but if you rely mainly on just one nation based on convenience, if and when they have problems, you have a big problem. (thus my eggs in one basket example)

Diversification. First lesson in finance class. People have forgotten the simple things.

[Diogenes]

Canadian money is as fickle as my children

We had a really bad spell from the late 70's till the middle 90's...but it recovered, then fell again...back in the early-middle 70's I remember going to the five-finger lakes upper NY State area for the 76' US Bicentennial and our money at that time was 10 cents more than American currency...

[TheColdTruth]

Give Obama another term and the Canadian dollar will seem positively heroic in comparison to the greenback.

[grandpa]

Quote by: TheColdTruth Give Obama another term and the Canadian dollar will seem* positively heroic in comparison to the greenback.*

Which, from a purely principled standpoint, is no worse than a "heroic" attraction to
the greenback.

Grandpa h.

[TheColdTruth]

Quote by: grandpa Which, from a purely principled standpoint, is no worse than a "heroic" attraction to the greenback. Grandpa h.

Don't get what you're trying to say here.

Elaborate?

[Night]

Obama is doing everything in his power to help the US economy recover and it's working.

He has been doing an excellent job and many economists are praising the Obama administration for it's excellent work.

I do see the US bouncing back from this low point and being stronger than ever. What the US does when it reaches that point will decide it's ultimate fate, whether the US will be a superpower for only 20 more years versus even longer.

[Angry Citizen]

Quote by: TheColdTruth Give Obama another term and the Canadian dollar will seem positively heroic in comparison to the greenback.

How ludicrous. Two things:

First, the death-spiral of the Dollar began during the Bush administration's insane spending spree. We paid for things we couldn't afford.

Secondly, all we really need to do is cut defense spending, say, in half in order to pay for all manner of things... We nearly outspend the entire rest of the world in defense spending. That is crazy and unnecessary in a world where Europe is both united and an incredible ally.

[TheColdTruth]

Quote by: Night Obama is doing everything in his power to help the US economy recover and it's working. He has been doing an excellent job and many economists are praising the Obama administration for it's excellent work. I do see the US bouncing back from this low point and being stronger than ever. What the US does when it reaches that point will decide it's ultimate fate, whether the US will be a superpower for only 20 more years versus even longer.

I'd like to see what kind of economists are praising his tactic of plunging the nation into unheard of levels of debt. So much debt in fact that it's an outrage EVEN THOUGH our trend is to plunge ourselves further and further and further into debt with each new president.

The only decent thing Obama has done so far is deciding to stay in Afghanistan and Iraq to secure our oil supplies and thus keep our superpower status a greater likelihood.

Everything else? Garbage, pure garbage.

Quote by: Angry Citizen How ludicrous. Two things: First, the death-spiral of the Dollar began during the Bush administration's insane spending spree. We paid for things we couldn't afford. Secondly, all we really need to do is cut defense spending, say, in half in order to pay for all manner of things... We nearly outspend the entire rest of the world in defense spending. That is crazy and unnecessary in a world where Europe is both united and an incredible ally.

Cut our defense budget when our chokehold of military might the world over is the only thing that's keeping us as THE superpower (which won't last even if we keep bases everywhere we currently are)? Sounds brilliant.

The fact of the matter is noone wants to go from a first world country to a second world country, which is exactly what will happen if we lose our super power status.

[Century 25]

I'd like to see what kind of economists are praising his tactic of plunging the nation into unheard of levels of debt. So much debt in fact that it's an outrage EVEN THOUGH our trend is to plunge ourselves further and further and further into debt with each new president.

I'll bet there are millions of people that would 'like to see' the Fed bankers, along with many of the bankers (local yokels) from the.. 'leading institutions' that opened the flood gates of the long green.. in order to keep the US 'economy' floating (on air) until it collapsed, ..in some dark alleys.. for a little talk.. around midnight.

Obama is merely (or mostly) the 'fall guy' that is left holding the bag. Look to the dick head that masqueraded as an American 'president' for the preceding 8 years.. 'BO' (before Obama) - he who appointed the last Fed prez.. The 'Fed' being privately operated.. syndicate.

[Night]

Quote by: TheColdTruth I'd like to see what kind of economists are praising his tactic of plunging the nation into unheard of levels of debt.

Obviously you aren't up to date with history.

We were in much more debt in WW2. There is definitely precedent. And we were already in debt. If the government DIDN'T bail out the banks, we'd be in a serious depression. The government would have had to spend money anyways, the FDIC would have had to spend a ton of money, and people with accounts over $250,000 would have been wiped out. Yet idiot conservatards don't care about that, they have to do what FOX tells them to do and whine about the evil things Obama is doing!

Quote by: TheColdTruth So much debt in fact that it's an outrage EVEN THOUGH our trend is to plunge ourselves further and further and further into debt with each new president.

Actually, the US government ran a budget surplus in the Clinton years. Yet then Bushy came along. I never once heard the conservatives bitching about debt then!

Quote by: TheColdTruth The only decent thing Obama has done so far is deciding to stay in Afghanistan and Iraq to secure our oil supplies and thus keep our superpower status a greater likelihood.

And saved the entire economy via bank bailouts. Read up on Keynesian economics. It works. It has been working. The DJIA recently reached 10,000 pts for the first time in over a year since this crisis, but no one will congratulate the Obama administration for restoring as much confidence as he possibly can in this economic system...

[TheColdTruth]

Quote by: Night Obviously you aren't up to date with history. We were in much more debt in WW2. There is definitely precedent. And we were already in debt. If the government DIDN'T bail out the banks, we'd be in a serious depression. The government would have had to spend money anyways, the FDIC would have had to spend a ton of money, and people with accounts over $250,000 would have been wiped out. Yet idiot conservatards don't care about that, they have to do what FOX tells them to do and whine about the evil things Obama is doing! Actually, the US government ran a budget surplus in the Clinton years. Yet then Bushy came along. I never once heard the conservatives bitching about debt then! And saved the entire economy via bank bailouts. Read up on Keynesian economics. It works. It has been working. The DJIA recently reached 10,000 pts for the first time in over a year since this crisis, but no one will congratulate the Obama administration for restoring as much confidence as he possibly can in this economic system...

I actually am inclined to believe you on the WW2 thing, but do you have a link citing figures?

Sure, but I don't think it's very easy to run a surplus while at war in a couple countries at once, right or wrong.

Keynesian economics < Austrian Economics.

[Vee]

Austrian Economics - ROFLMAO

Check out the Chartalists.

[grandpa]

Quote by: TheColdTruth Don't get what you're trying to say here.

Simply that, from a principled standpoint, their money being on top would be no worse than ours being on top.

Grandpa h.

[TheColdTruth]

Quote by: grandpa Simply that, from a principled standpoint, their money being on top would be no worse than ours being on top. Grandpa h.

Oh, well sure. It's just bad ju-ju for our economy that our dollar keeps dropping in value.

[SmirkingMan]

Based on the forex rates since 1970:


Source: PACIFIC Exchange Rate Service

The extrapolation suggests that the USD will be worthless:
- against JPY in 2018
- against CHF in 2020
- against EUR in 2042 (DEM in graph, fixed rate 1.95583 since 31/12/1998)

As the graph also suggests, the GBP, which more or less matches the USD, will become worthless in the mid 2020's.

Of course, past performance doesn't predict anything in the future, but it is nonetheless a very consistent trend.

[grandpa]

Quote by: TheColdTruth Oh, well sure. It's just bad ju-ju for our economy that our dollar keeps dropping in value.

That's one way to put it. Another way is to say that it's being pounded.

Grandpa h.