Harper anxious about loonie's 'rapid' surge

[Leafless]

OTTAWA -- Prime Minister Stephen Harper for the first time voiced concern yesterday over the Canadian dollar's unprecedented ascent even as eroding confidence in its U.S. counterpart led to concerns about a global crisis.

"The appreciation we've seen is rapid by any standard, unprecedented in its rapidity by any standard, and I think it does require some reflection," Mr. Harper said in Vancouver.

In Washington, French President Nicolas Sarkozy warned of an "economic war" in global trade if Washington doesn't act to halt a continuing decline in the U.S. dollar, which sank further yesterday after China's government said it would diversify its massive currency holding away from the greenback.

http://www.theglobeandmail.com/servlet/sto...MAIN08/TPStory/

Can you possibly imagine an all out economic war.

What would be the consequences of this happening in relationship to the 'Great Depression' from 1929-39?

Edited November 8, 2007 by Leafless

[Leafless]

If China for instance decides to diversify its holdings, would result in a further collapse of the U.S. dollar thus creating economic disaster for Canada.

If China attempted to diversify its holdings, it could cause a collapse in the value of the dollar and higher inflation in the US.

http://news.bbc.co.uk/1/hi/business/6106280.stm

[old_bold&cold]

You must remember that China said it was diverifing some of its USD holdings, and yes this has caused tha snowball affect for some other countries. As long as China, Japan and Saudi Arabia do not take the position of dumping all its holdings things will be bad butnot a total collapse for the USD. It could easily lose another .10-.15 against the CDN and a corresponding amount against almost all other currencies. Washington can not do much to stop this and this is exactly what I said 8 months agao that would spell the death of the USD, if it goes to complete diversion of USD holdings. The USA would not be able to honour the call for much of the money it has out there, and if it goes to full diversion we will see a $1.75 CDN. The USA will be very hard to find any new lenders willing to accept debt payment in USD, and that will be very bad. I do not though think it will go this far, but the nervous markets will be quick to jump the gun as soon as things start moving, and that will affect Canada, but not as bad as the USA.

What may happen though is that instead of us here in Canada seing our prices drop to the USA pricing, is if this keeps up you will see the USA pricing climbing to meet the Canadian pricing, as it is the weakness of their currency that is going down more then our currency going up, even though we have been going up against all other currencies as well.

[shavluk]

Its because they were so stupid ,period!

No one forced a can of gas on the markets but them,,grandstanding obvious opportunists ,, a mini budget???? Give me a break

I disagree with Harper's tactics and choices but then I am beholden to no man.

[old_bold&cold]

Its because they were so stupid ,period!

Do you mean by this that the USA was stupid for not seeing that such huge foreign holdings could one day destroy their dollar, or are you saying Harper is stupid for making any comment about the swift rise in our dollar?

No one forced a can of gas on the markets but them,,grandstanding obvious opportunists ,, a mini budget???? Give me a break

Who do ypou mean by "them", and what can of gasoline are you talking about. Are you referring to the sub prime mortgages in the USA? And what doe any of this have to do with the mini budget, other then give Canadians a tax break.

I disagree with Harper's tactics and choices but then I am beholden to no man.

That we have already seen, but where are your reasons for disagreement. We already know you do not like the laws on drugs, but what else is in your craw?

[shavluk]

I said a long time ago we may all be driving Fung's over Ford's someday soon and working in China as serfs opening American food restaurants across the plains of china as we help built their bullet train tracks so I don't need the lecture of forced shrink-ages and strategic bullshit ,,please.

Harper's timing and wilful neglect over ignoring infrastructure , health and or any other investment in this country just to brow beat and bait Dion and stupefy voters ,,,well some of us have maybe smoked more than others and still can connect the dots.

Sadly some don't/wont/cant even or ever see the dots

I sadly have an opinion on everything.

[Canuck E Stan]

I said a long time ago we may all be driving Fung's over Ford's someday soon and working in China as serfs opening American food restaurants across the plains of china as we help built their bullet train tracks so I don't need the lecture of forced shrink-ages and strategic bullshit ,,please.

I sadly have an opinion on everything.

Is the Green Party aware of your views that "someday soon" Canadians will be forced into slave labour in China?

[margrace]

You know we are slow learners. What the old saying "Too soon old, too late smart" Well about 15 years ago it dawned on me that Ontario was too dependant on the Car company jobs, expecially when Honda and Toyota started to produce cars here and with no unions. All we see is what we can buy with our wages, we are constantly told that we should be good little workers in big industry, don't question the status quo.

Do you suspect as I do that the Canadian dollar is being manouvered for a purpose and that is control of all our assets?

[M.Dancer]

Do you suspect as I do that the Canadian dollar is being manouvered for a purpose and that is control of all our assets?

No but then again my hat is made of felt.

Edited November 9, 2007 by M.Dancer

[scribblet]

Do you suspect as I do that the Canadian dollar is being manouvered for a purpose and that is control of all our assets?

Errr no, my hat isn't a tinfoil one either.

"Patricia Croft, VP and chief economist for Phillips, Hager and North Investment Management Ltd., said the loonie's continued rise remains due to the increase in oil prices and the bottom falling out of the U.S. dollar.

"Those two factors are putting the Canadian dollar on fire," Croft told CTV Newsnet on Monday.

"Today we have record oil prices, so that's part of the story, but the other element is the weaker U.S. dollar."

[Topaz]

I said this on another forum and I say it here. I was listening to a program last night and this was the message. The International monetary system is collapsing and France is broke and Germany isn't far behind. The US dollar is dropping to the value of the Peso and it will cause America, Canada and Mexico to share the same currency, the Amero, which will be backed by silver. The price of silver will rise to $30.00 and gold will go to 1200.00 within a year. Some of the billionaires in the US have already started to buy up silver. Apparently, if this happens Canadians will be hurt the most because we will lose our health care system and we have too many reserves in US $$$'s. So, the question is would Canada be force to share the same currency with US or US/Mexico??? Is Harper ready for something like this to happen??

[old_bold&cold]

Ahh I think you will need a triple layered tin foil hat and maybe even some antena to actually believe that. The USA is in big trouble, that I will agree on, and if China and Japan were to diversify their USD holdings to Euros, then the USA would be very deeply in monetary pinch. Yes the USD may well go down to .25 CDN, but the CDN is doing well against all currencies even the euro. So it will continue to appreciate, as while we do trade mostly with the USA we have been also trading a lot more lately with Russia and European countries, as well as Asian countries.

If the USD tanks, the euro will go higher, but so will Canada's dollar which right now is more tied to oil comodity then it is on trade agreements. Yes will would feel the effects and it would really make us adjust to a more european standard of living, but yes we will do that. Just about all of the Euro group of nations have government sponsored health care, and they are not really worried about losing that.

I do not know where you get the noton that France and Germany are going bankrupt? They do have problems but with the new found strength of the Euro they will be in better shape then many others. The story you listened to, was probaly based on a worst case scenario, and it presupposed many things that are just not true. The Canadian dollar will not follw the USD circling the drain. We have totally different economies today then we had say 5 years ago. Canada has been reducing debt and due to alot of it being in USD, we will pay much more off this year then any year in the history of our debt. We will be in a very good position in a resource based economy because we have huge untapped natural resources and can easily take advantage of that to control our own fate. What you may start to see is a further population of people in our north where the resource sector will be a big driving force for many people. But again that will happen quicker if the USD tanks, and slower if it just say loses to say .60 CDN. They can and will again be back and they will again become a nation that will grow. You need to understand that the USA just because of the shear number of people they have, can face trouble and rebound many times faster then other nations. While they could suffer greatly in the coming times, they will not be defeated for long.

[Leafless]

Ahh I think you will need a triple layered tin foil hat and maybe even some antena to actually believe that. The USA is in big trouble, that I will agree on, and if China and Japan were to diversify their USD holdings to Euros, then the USA would be very deeply in monetary pinch. Yes the USD may well go down to .25 CDN, but the CDN is doing well against all currencies even the euro. So it will continue to appreciate, as while we do trade mostly with the USA we have been also trading a lot more lately with Russia and European countries, as well as Asian countries.

If the U.S.$ goes down to .25 CDN, what is the value of the CDN at that point, $1.80-2.00 or who knows for sure.

Then who will trade with Canada relating to the same resources we normally trade with the U.S., when you have to tack on shipping plus our high dollar.

Regardless most other world countries have their own preferred countries they do business with and Canada isn't one of them and won't be one of them.

Canadian manufacturer sector would crumble and our economy would be on the rocks.

I think you will see war before the above scenario becomes reality.

[Smallc]

If the U.S.$ goes down to .25 CDN, what is the value of the CDN at that point, $1.80-2.00 or who knows for sure.

Then who will trade with Canada relating to the same resources we normally trade with the U.S., when you have to tack on shipping plus our high dollar.

Regardless most other world countries have their own preferred countries they do business with and Canada isn't one of them and won't be one of them.

Canadian manufacturer sector would crumble and our economy would be on the rocks.

I think you will see war before the above scenario becomes reality.

Canada's economy is heavily based on commodities, not manufacturing. Where do you think those other countries are going to get gold, oil, and uranium from? There aren't many other choices.

[geoffrey]

You know we are slow learners. What the old saying "Too soon old, too late smart" Well about 15 years ago it dawned on me that Ontario was too dependant on the Car company jobs, expecially when Honda and Toyota started to produce cars here and with no unions. All we see is what we can buy with our wages, we are constantly told that we should be good little workers in big industry, don't question the status quo.

Do you suspect as I do that the Canadian dollar is being manouvered for a purpose and that is control of all our assets?

It's rare when I can read one of your posts and not shake my head, but this is one of them.

However, I need to address one of the factual problems here. Margrace, the dollar being higher discourages foreign takeovers of Canadian companies. In fact, this is a prime time for Canadian investors to eat up the US and other countries' companies. It's also essientially impossible to manouver a currency with any great accuracy... and no one would have predicted the 25%+ appreciation of the dollar over the greenback no matter how much you messed around with things.

Your right Canadians are slow learners. You still have your government in Ontario crying for a Federal bailout of the American car manufacturers. You shouldn't be ok with that. If Toyota can have non-union jobs, with more satisfied employees and produce superior product at higher value... that's good. For you, your province and the workers involved.

Canadians have to realise the times of big unions and big manufacturing are likely coming to an end, high dollar or not. We've seen most of the big market players now start up as very nimble organizations, and ones that stick around are the best at preserving that quality.

Market conditions and consumer habits change so quickly now that terrible bureaucratic companies like GM and Ford just simply can't keep up.

[Moxie]

geoffrey wrote: Canadians have to realise the times of big unions and big manufacturing are likely coming to an end, high dollar or not. We've seen most of the big market players now start up as very nimble organizations, and ones that stick around are the best at preserving that quality.

Market conditions and consumer habits change so quickly now that terrible bureaucratic companies like GM and Ford just simply can't keep up.

--------------------

Amen that in a nutshell is what's wrong in Canada, the same industries repeatedly breastfeeding off the Feds because Unions demand wages that exceed the skills of the workers. This has to stop, working on an assembly line is not skilled labour, it should pay 12 dollars an hour 30 something.

We could compete with China if we turned all our prison inmates into cheap labour. Why not have them doing telemarketing and painting cheap junk. The companies could build the structures beside the jails, pay them a dollar an hour for eight hours of work. They'd learn job skills, earn a few bucks and this might reform some of the lazy idle criminals. This is an entire untapped unskilled work force, I know it's radical but the burden on society to pay for 24 hours of idleness is absurb isn't it?

[Guest American Woman]

Yes the USD may well go down to .25 CDN...

My God. What planet do some of you people live on? The USD "may well go down to .25 CDN" because it's dropped to .94?

If it ever did, the world would be in trouble. Americans play a big role in the world economy, and if we no longer do that, you're all in trouble. Contrary to some posters' belief that Americans only care about themselves, Americans actually do a lot world wide, and our strong dollar has bought a lot more to help in the third world countries than a low dollar will. That's a hardship for them. Canada has seen a 25% increase over our dollar, so you are losing that in your exports to our country. And what percentage of your exports goes to America? You think you can suddenly find others to fill that market? Good luck with that.

Harper is concerned for a reason.

[msj]

If the U.S.$ goes down to .25 CDN, what is the value of the CDN at that point, $1.80-2.00 or who knows for sure.

Then who will trade with Canada relating to the same resources we normally trade with the U.S., when you have to tack on shipping plus our high dollar.

Regardless most other world countries have their own preferred countries they do business with and Canada isn't one of them and won't be one of them.

Canadian manufacturer sector would crumble and our economy would be on the rocks.

I think you will see war before the above scenario becomes reality.

If $1 USD = $0.25 CDN then that means that $1 CDN = $4 USD (the math is 1/.25=4).

You simply divide 1 by the appropriate number.

So, if the exchange is $1.20 CDN = $1 USD then this means that $0.83 US equals $1 CDN (1/1.20=.83) - by this I mean that $1 CDN will buy you $0.83 USD.

I used a higher than actual exchange rate for illustration purposes since when currencies hover within 10-15% of parity it looks more like some kind of mirror effect - for example $1.05 CDN = $1 USD or $0.95 USD = $1.00 CDN - it gives the appearance that one simply deducts the nickel off of one or adding it back to the other currency.

[old_bold&cold]

Why take a small sentence out of its context? I was saying in a worst case scneario that yes it is possible that the USD could go down to .25 CDN. For this to happen you would need China and Japan to divest all USD holding to go to the Euro. I never said that it was about to happen, but that it could.

Also actually the .94usd is not even the real value as we all here in Canada learned that when the exchange rate is .94 it really is about .08 more off of it as banks will charge that to do the exchange. You will be hard pressed to find anyone willing to exchange thing less then 4% even it you are doing large dollar exchanges.

The more level headed out look says that we will be at $1.11CDN by the new year, and that then in real exchange and it in large volume would mean .85 USD, but for the public at large it will mean .81USD. We here inCanada have lived through this already, and we are only pointing out what we learned the hard way. If the prediction of $1.20 CDN by June 2008, comes about then in most cases it will me a .72 USD. It really just gets quite slippery and twisted, but you will find then that your banks will soon start saying that the exchange costs will be in CDN and not USD so then that .08 will soon become .10 to .11 cents to be deducted. The banks always get their way and there really is not much you can do about it. I always found Visa to have the best exchange rate when converting foreign money, but many will disagree. The money exchange marts will be the next cheapest, in my eyes, but that is just giving you a head up.

In the thread where I said that the USD could go to .25, I was only using that as a qick figure and to show that the level with which it comes and goes is not in the control of the USA. There is nothing they can do. My comments about the trouble if the large USD holders should suddenly call for a different currency, was echoed 2 years ago by Greenspon, and he did say the USD could easily lose 50-75% if this happened and caused other countries to then do the same with their holdings. It was more of a warning that far too much USD was being held by foreign countries that might not have the best interests of the USA in mind, if things turned bad. Personally I do not think it will go that far, but if it ever does it will be when Bush is in power, as I do not think most of these countries would be so anxiuos to do this if there were another president. Right now I think they are seeing it as a chance to send a message back to Bush about things are not as in his control as he may think. But I could be wrong on that and it is only my opinion, and probably not held by many others.

[Drea]

Seven countries consider abandoning the US dollar.

Some of you might want to cover your eyes... and sing Kumaya...

Link

It’s no secret that the dollar is on a downward spiral. Its value is dropping, and the Fed isn’t doing a whole lot to change that. As a result, a number of countries are considering a shift away from the dollar to preserve their assets. These are seven of the countries currently considering a move from the dollar, and how they’ll have an effect on its value and the US economy

What does this all mean?

Countries are growing weary of losing money on the falling dollar. Many of them want to protect their financial interests, and a number of them want to end the US oversight that comes with using the dollar. Although it’s not clear how many of these countries will actually follow through on an abandonment of the dollar, it is clear that its status as a world currency is in trouble.

Obviously, an abandonment of the dollar is bad news for the currency. Simply put, as demand lessens, its value drops. Additionally, the revenue generated from the use of the dollar will be sorely missed if it’s lost. The dollar’s status as a cheaply-produced US export is a vital part of our economy. Losing this status could rock the financial lives of both Americans and the worldwide economy.

Edited November 10, 2007 by Drea

[msj]

Also actually the .94usd is not even the real value as we all here in Canada learned that when the exchange rate is .94 it really is about .08 more off of it as banks will charge that to do the exchange. You will be hard pressed to find anyone willing to exchange thing less then 4% even it you are doing large dollar exchanges.

The more level headed out look says that we will be at $1.11CDN by the new year, and that then in real exchange and it in large volume would mean .85 USD, but for the public at large it will mean .81USD. We here inCanada have lived through this already, and we are only pointing out what we learned the hard way. If the prediction of $1.20 CDN by June 2008, comes about then in most cases it will me a .72 USD. It really just gets quite slippery and twisted, but you will find then that your banks will soon start saying that the exchange costs will be in CDN and not USD so then that .08 will soon become .10 to .11 cents to be deducted. The banks always get their way and there really is not much you can do about it. I always found Visa to have the best exchange rate when converting foreign money, but many will disagree. The money exchange marts will be the next cheapest, in my eyes, but that is just giving you a head up.

I don't think it is necessary to further mess up this discussion by going into tacking on the fees that are charged.

Official rates have been used and any intelligent person knows that these must be adjusted by 2.5%-8% depending on how and where they do the exchange (my Visa gave me ~2.50% when I ordered something on-line last month).

Given that these fees are tacked on whether the exchange is $0.63 or if it is $1.06 demonstrates that all things are equal by using the official rates.

[msj]

In the thread where I said that the USD could go to .25, I was only using that as a qick figure and to show that the level with which it comes and goes is not in the control of the USA. There is nothing they can do. My comments about the trouble if the large USD holders should suddenly call for a different currency, was echoed 2 years ago by Greenspon, and he did say the USD could easily lose 50-75% if this happened and caused other countries to then do the same with their holdings. It was more of a warning that far too much USD was being held by foreign countries that might not have the best interests of the USA in mind, if things turned bad. Personally I do not think it will go that far, but if it ever does it will be when Bush is in power, as I do not think most of these countries would be so anxiuos to do this if there were another president. Right now I think they are seeing it as a chance to send a message back to Bush about things are not as in his control as he may think. But I could be wrong on that and it is only my opinion, and probably not held by many others.

The US does have options it's just that none of them are very appealing.

They could raise interest rates which would increase the likelihood and/or worsen the recession to come (or that they are already in depending on one's views about the integrity of US government statistical methods).

They could stop printing money at absurd rates while bringing back the published statements on M3 growth which would likely have the same effect as above (which, ironically, is one stat that the stat conspiracy theories in the previous statement do believe in).

The US could do what it has been doing for decades now - print lots of money, encourage "new and innovative" loans products with little to no regulation (hello "liar" loans) and play with interest rates to "eliminate" the business cycle which, imo, just creates a moral hazard whereby the relationship between risk and reward is warped by the Greenspan/Bernanke "put" (which is to say that anytime the market may actually clean up the excess, the Fed comes along to the "rescue" which creates an artificial floor in the economy thereby encouraging more risk taking which leads to a disparity between risk/reward which, in the end, will screw almost everyone).

Oh yeah, while they are at it, the government could also stop spending like drunken sailors in a brothel. (No offence to drunken sailors nor to "ladies of the night")

[old_bold&cold]

I don't think it is necessary to further mess up this discussion by going into tacking on the fees that are charged.

Official rates have been used and any intelligent person knows that these must be adjusted by 2.5%-8% depending on how and where they do the exchange (my Visa gave me ~2.50% when I ordered something on-line last month).

Given that these fees are tacked on whether the exchange is $0.63 or if it is $1.06 demonstrates that all things are equal by using the official rates.

You forget I also pointed out that there comesa time when the exchange rate becomes a percentage of the higher currency and yes it does matter to many and you may be able to keep this in mind, but mentioning it and doing so in a way that all should understand is not messing up the issue, as you put it. I find your take is very wrong as it does not take into affects these other charges, and fees. So if you want to know just what a dollar really buys, you need all things included. If as you say the .63 USD is exchanged but using 8% of the higher currency value is adds almost .11 cents off that figure, where if it was to stay to the lower figure it would be .045 cents. That is quite the difference, and it will be the banks who decide to do this, not the government of the posted dollar value. We have already seen this and know that it happens. So why not make sure of things are clear on the matter. Unless you want to hide the fact of life from people.

[no queenslave]

You forget I also pointed out that there comesa time when the exchange rate becomes a percentage of the higher currency and yes it does matter to many and you may be able to keep this in mind, but mentioning it and doing so in a way that all should understand is not messing up the issue, as you put it. I find your take is very wrong as it does not take into affects these other charges, and fees. So if you want to know just what a dollar really buys, you need all things included. If as you say the .63 USD is exchanged but using 8% of the higher currency value is adds almost .11 cents off that figure, where if it was to stay to the lower figure it would be .045 cents. That is quite the difference, and it will be the banks who decide to do this, not the government of the posted dollar value. We have already seen this and know that it happens. So why not make sure of things are clear on the matter. Unless you want to hide the fact of life from people.

Anyone paying 8% exchange is not financialy aware that their is a way to pay a lot less ; even no exchange fee.

" IT IS NOT A COURT CASE THAT DETERMINED YOU OWED MONEY" quote bk59

[no queenslave]

The trouble with old big companies is their union pension plans are costing them too much to fund, and it is not being solved..

Gimme gimme buss

" IT IS NOT A COURT CASE THAT DETERMINED YOU OWED MONEY" quote bk 59