Canada suffers from Dutch Disease

[madmax]

No, in reality when the Canadian dollar started to rise because of the oil and gas, long before the U.S. greenback fell, the manufacturing sector of this country started exporting less to the U.S.

This would be three full years before...

That is correct

[madmax]

What slanderous comments? McGuinty's inept and incompetent fiscal management is one for the record books. He has managed the seemingly impossible by making Ontarions long for the sound fiscal management of Bob Rae! Ontario's debt is now bigger than California - which is three times the size and considered and economic basket case.

I couldn't agree more...

[CPCFTW]

You have no idea what you are talking about. It is scary what could happen if the resource sector crashes and we have nothing in the country to pick up the slack. This is one of those putting all your eggs in one basket things. The crazy part there is no reason for it. We can tackle Dutch Disease with out hurting our resource sector if you "Conservatives" would stop making a political game out of it. This isn't a Alberta vs. Ontario thing, it is a good governance vs. bad governance thing and you keep cheering on bad governance for no reason what so ever.

Stop trying to spin the loss of the Manufacturing sector as a good thing. It makes you look small minded.

BTW our dollar has had no effect on consumer prices. This is another time where your claims make you look stupid. When our dollar was low we paid 10-15% more on things then the US now our dollar is high and we still pay the same amount. Grab a book next time you are at the mall and look at the US price vs the Canadian one. Get a clue

More lefty pseudo-economics.. Exchange rates have no effect on consumer prices!

[punked]

More lefty pseudo-economics.. Exchange rates have no effect on consumer prices!

Facts aren't a left vs right issue. In fact most things aren't left vs right. That is just the way you see the world. You are the type who would have our country burned to the ground rather then say "your team" is wrong on an issue. Get a clue and start using facts instead of arguments that everyone can see are wrong plain as day.

[madmax]

The Canadian dollar has risen against other currency to. Maybe look at the whole picture not just America.

True enough , but most of our exports are to the US market which is one reason why other currencies are often overlooked.

It is also why with a high currency, we can get the most mileage from a resource based export economy vs a value added economy.

Its why China is lining up for some cheap subsidized Canadian Oil.

Its great while it lasts... and the tar sands will last a significant period of time.

China needs oil... and Alberta will deliver.

That said... the number of jobs created even though good paying, are about 10% created compared to the losses in a Province like Ontarios value added economy. British Columbia also suffers and would not likley have any overall net benefit from running a pipeline across their Province.

[madmax]

Who needs rig pigs making 50-100k when we could restore a laughable textiles industry with employees making 20k!?!?

Whatever jobs are lost in ON are more than made up for by oil industry (and spin-off) employee's tax dollars being funneled to have not provinces. Also much of the finance industry in Canada is built around financing oil companies, and the TSX-V is an exchange primarily built around resource industries.

Furthermore, a stronger dollar lowers consumer prices... An iPhone, or 40in hdtv would cost $800 in Canada with a weak dollar instead of $500. A new car would cost 30k instead of 20k.

But don't let facts get in the way of a good left-wing pseudo-economics circle jerk.

There is so much non factual opinion, after the sentence of Textile Industry wages, that it makes for great talking points, driven by fantasy beliefs rather then economic activity.

A stronger dollar......

When the British Pound is with worth $2 and the Canadian and US Dollar is at par with each other and a McDonald Cheeseburger is $1.00 here vs $2 or 1 pound in the UK its not cheaper.

A new car is not cheaper today then when our dollar was lower. A New car today is marketed the same as it always has been, and that is based on what the Consumer is willing to pay for a brand. If no consumers are willing to pay then the price will fall. Therefore with a high dollar and those with a decent income will continue to pay full pop for vehicles if they want/desire them.

What a High dollar does is allow consumers to spend money outside of the country and get a bigger bang for the buck.

Edited May 20, 2012 by madmax

[madmax]

More lefty pseudo-economics.. Exchange rates have no effect on consumer prices!

thats right and within 2 posts you have contradicted yourself.

[punked]

There is so much non factual opinion, after the sentence of Textile Industry wages, that it makes for great talking points, driven by fantasy beliefs rather then economic activity.

A stronger dollar......

When the British Pound is with worth $2 and the Canadian and US Dollar is at par with each other and a McDonald Cheeseburger is $1.00 here vs $2 or 1 pound in the UK its not cheaper.

A new car is not cheaper today then when our dollar was lower. A New car today is marketed the same as it always has been, and that is based on what the Consumer is willing to pay for a brand. If no consumers are willing to pay then the price will fall. Therefore with a high dollar and those with a decent income will continue to pay full pop for vehicles if they want/desire them.

What a High dollar does is allow consumers to spend money outside of the country and get a bigger bang for the buck.

Which only adds to killing our economy and making it a one trick pony. Most Canadians live 100 miles away form the US boarder so as the dollar goes up more Canadians take their money outside the country hurting the retail sector.

[punked]

thats right and within 2 posts you have contradicted yourself.

He clearly has no idea what he is talking about. Which is why his posts never have a fact in them.

[madmax]

Facts aren't a left vs right issue. In fact most things aren't left vs right. That is just the way you see the world. You are the type who would have our country burned to the ground rather then say "your team" is wrong on an issue. Get a clue and start using facts instead of arguments that everyone can see are wrong plain as day.

This is where political beliefs get in the way of facts.

I know that if roles were reversed and it was a Conservative using this economic analysis paper, the cheer leaders would be on board.

I know that Economic Forums are having a really good discussion on this topic because they are NOT letting politics or beliefs get in the way.

There is PLENTY of room to move regarding these reports.

If I were to give an example of logic ... I can follow Argus discussion clearly. It can be debated, and it is based on data.

That is what economists do.

And no I don't believe this is a right/left issue or a Dividing Canada issue.

It is an economic issue.

There is merit to the discussion.

What is interesting is that there is evidence to suggest there is a problem.

I have NOT seen a solution.

I have NOT seen a proposal from Mulcair, but I have seen alot of Fearmongering at the slightest whiff that unbridled unhindered, or questioning current oil development practices and its effects.. are going to split the country.

Perhaps my biggest laugh was from Ethical Oil. I never saw a lamer piece from them.

Its the first time I thought they went off their rocker. The sound like radicals. And it shouldn't be that way.

[madmax]

The jobs that are lost are replaced, in theory, and there is a net economic benefit that the government has to balance.

In fact, the benefits have not been balanced, and companies use profits to buy favorable legislation, but don't reinvest in the community. The effects of that strategy will soon be felt, as companies will not be able to buy influence over a N. Americans who don't work for them, and din't need the handful of jobs they offer. In fact, we will be their customers, which is a different power balance altogether.

Very clearly articulated..

[CPCFTW]

thats right and within 2 posts you have contradicted yourself.

I don't see how unless you don't understand sarcasm.

Yes exchange rates influence prices, that's been basically the BoC's main concern for the past 3 decades. Which rock have you lefty pseudo-economists been hiding under?

[punked]

I don't see how unless you don't understand sarcasm.

Yes exchange rates influence prices, that's been basically the BoC's main concern for the past 3 decades. Which rock have you lefty pseudo-economists been hiding under?

You have no idea what you are talking about.

[CPCFTW]

You have no idea what you are talking about.

Quite the argument!

Anyone who pays attention to forex markets knows that when interest rates are raised there is increased demand for the currency (ie. the currency strengthens). Anyone with even the most basic level of education on economics knows that the BoC raises interest rates to fight inflation. Therefore, strengthen currency = slow inflation.

You don't even have to understand the underlying economics which I already explained to understand that. You're making a fool of yourself.

I never denied that currency strengthened and manufacturing jobs were lost because of the oil industry. If exports are more expensive then it will be harder for manufacturers to compete. Yes that much is simple. But do deny the reciprocal that imports are therefore cheaper is beyond partisan. "Oil industry made our exports less competitive, but imports were unaffected, I swear!!"

Next time you buy something made in the usa, divide it by 0.7 to find out approximately what it would have costed if the CAD hadn't appreciated.

And while we're talking about China.. What's all this fuss the US has been making about China not floating their exchange rate?! Don't they know that exchange rates have no effect on prices!?!

If you want to talk about partisan responses then start with yourself. You talk all this nonsense about facts while shrugging off a fundamental economic fact.

Google "how does the bank of canada reduce inflation?". You will find that the answer is raising interest rates (ie. strengthening the currency). Get a clue man.

Anyway, I've had enough of teaching econ 101 to basement dwelling philosophy students with your pseudo-economics nonsense. I feel dumber everytime I read a dipper's post about "economics". That's the last you'll hear from me in this thread. Remember to click your heels three times when you're ready to come home from wonderland!

Edited May 21, 2012 by CPCFTW

[madmax]

I don't see how unless you don't understand sarcasm.

Yes exchange rates influence prices, that's been basically the BoC's main concern for the past 3 decades. Which rock have you lefty pseudo-economists been hiding under?

No you are backtracking again (thats alot of ground to recover). I reread your posts, there was no sarcasm in your argument. There were personal attacks and slurring but you contradicted yourself in your rush to attack.

Edited May 21, 2012 by madmax

[madmax]

Quite the argument!

Anyone who pays attention to forex markets knows that when interest rates are raised there is increased demand for the currency (ie. the currency strengthens). Anyone with even the most basic level of education on economics knows that the BoC raises interest rates to fight inflation. Therefore, strengthen currency = slow inflation.

I never denied that currency strengthened and manufacturing jobs were lost because of the oil industry. If exports are more expensive then it will be harder for manufacturers to compete. Yes that much is simple. But do deny the reciprocal that imports are therefore cheaper is beyond partisan. "Oil industry made our exports less competitive, but imports were unaffected, I swear!!"

Next time you buy something made in the usa, divide it by 0.7 to find out approximately what it would have costed if the CAD hadn't appreciated.

And while we're talking about China.. What's all this fuss the US has been making about China not floating their exchange rate?! Don't they know that exchange rates have no effect on prices!?!

If you want to talk about partisan responses then start with yourself. You talk all this nonsense about facts while shrugging off a fundamental economic fact.

Google "how does the bank of canada reduce inflation?". You will find that the answer is raising interest rates (ie. strengthening the currency). Get a clue man.

Anyway, I've had enough of teaching econ 101 to basement dwelling philosophy students with your pseudo-economics nonsense. I feel dumber everytime I read a dipper's post about "economics". That's the last you'll hear from me in this thread. Remember to click your heels three times when you're ready to come home from wonderland!

You have now done some research, backtracked even more, backed down from your original position, clarified your answers to make them more inline to the argument at hand, which puts you back to the position held by most in this thread.

Which makes me wonder, after editing your personal comments out...

Who on earth are you trying to disagree with cause you have modified your answer to accomodate all the flaws of your previous posts.

you are now left to hair splitting.

If that is the disagreement you have and call this a left/right split... its a pretty fine line if you ask me.

Bottom Line, yes Oil is currently affecting our exchange rate and manufacturing jobs.

Now what do you intend to do about it if anything.

That is all the discussion boils down to.

Edited May 21, 2012 by madmax

[punked]

Quite the argument!

Anyone who pays attention to forex markets knows that when interest rates are raised there is increased demand for the currency (ie. the currency strengthens). Anyone with even the most basic level of education on economics knows that the BoC raises interest rates to fight inflation. Therefore, strengthen currency = slow inflation.

Didn't even make it past this point. Know why? Because right now that statement is a false as all your other ones. Want to explain why with record low interest rates both the US and Japan have investors gobbling up their currency. Why they have low inflation? Again you don't know what you are talking about. It scares me you talk with such authority on a subject you have no clue on.

As for your argument that things would cost more if our dollar was less. Somethings yes but most products especially those MANUFACTURED products cost the some in ratio to the US as they always have no matter how high our dollar is. You are hurting our country by lying to me and yourself. Go do some research because your argument is wrong. Period end of story.

Edited May 21, 2012 by punked

[CPCFTW]

Didn't even make it past this point. Know why? Because right now that statement is a false as all your other ones. Want to explain why with record low interest rates both the US and Japan have investors gobbling up their currency. Why they have low inflation? Again you don't know what you are talking about. It scares me you talk with such authority on a subject you have no clue on.

Sure. First of all, investors aren't gobbling up the USD. It has depreciated significantly. Japan has maintained low interest rates for a long time as they are an export based economy. If they were to raise their interest rates, investors would "gobble up" more JPY and it would impact their exports.

You're clueless.

[punked]

Sure. First of all, investors aren't gobbling up the USD. It has depreciated significantly. Japan has maintained low interest rates for a long time as they are an export based economy. If they were to raise their interest rates, investors would "gobble up" more JPY and it would impact their exports.

You're clueless.

Care to address your claim low interest rates lead to high inflation? With record low interest rates and record low inflation? I see you side stepped the whole issue.

As for the USD investors are gobbling it up. It has depreciated because of Q1-Q3 has pumped huge amounts of dollars into the market to bring down their value. However when you actually look at the investment in US dollars over the last few years any idiot can see you are wrong. You aren't using real facts, and you aren't talking about what has actually been happing in the market. You are literally making stuff up now.

Edited May 21, 2012 by punked

[CPCFTW]

No you are backtracking again (thats alot of ground to recover). I reread your posts, there was no sarcasm in your argument. There were personal attacks and slurring but you contradicted yourself in your rush to attack.

I work in the industry.. I didn't do any more research. You really can't detect sarcasm when I responded to punked's post insisting that exchange rates don't affect prices with "more lefty pseudo-economics... exchange rates don't affect prices! :lol"? You must be dumber than I thought.

Edited May 21, 2012 by CPCFTW

[CPCFTW]

Care to address your claim low interest rates lead to high inflation? With record low interest rates and record low inflation? I see you side stepped the whole issue.

Sure. Go to ca.reuters.com. Read today's article about canada's inflation and the possibility of a rate hike. You see, this is so simple, so basic, that there are articles about it on almost a daily basis.

[punked]

Sure. Go to ca.reuters.com. Read today's article about canada's inflation and the possibility of a rate hike. You see, this is so simple, so basic, that there are articles about it on almost a daily basis.

Yah Reuters has been writing that same article for a year or 2 now. That doesn't make them right, which might be why our interest rate hasn't gone up even though the same article keeps being written. Don't let your lack of knowledge stop you though.

Just for fun here is an article from the right wing crazy's about inflation being right around the corner with those record low interest rates in the US.

http://www.nytimes.com/2011/02/10/business/economy/10fed.html?_r=2&gwh=69509BA102D4A5B4052B4DB2ACE841D2

By the end of that year inflation was still under the target set by the central bank. Now in normal times inflation and the interest rate are linked. We aren't in normal times which is why everything you are saying doesn't apply and you don't know what you are talking about.

Edited May 21, 2012 by punked

[Michael Hardner]

This is a lively discussion but please cut out the insults everyone.

[bleeding heart]

I disagree. I believe that he holds an opinion that is supported by many economists. On another note, the country isn't an one trick Oil Pony but highly diverse.

For 1/3 to be affected by a high dollar is significant and the report goes as high as 40& and that is across the country.

Therefore a healthy debate is not a bad thing. You don't have to agree with Mulcair, you can have your own opinion but you can't have your own facts.

What is interesting is that other politicians want to make this a "East/West affair... but its more likely an affair of whom is beholden to various interests. My guess is that BC won't be saying the word "goofy" for much longer... as that bunch of Free Enterprise LibraCons are getting tossed.

If the Industry is not paying its own freight and the government and public will be footing the bill when the damage is done, there is nothing wrong with considering the real costs of extracting oil from the tar sands.

Canada has always had these sands available, its not always optimum conditions to develop them since the 70s there have been many false starts. But now that we are gung ho on this.... its time for an analysis of what is being done and who is paying for it and who is benefiting and who is getting negatively affected.

That is standard fare...

Standard, it sure is. Not even controversial, or at least it shouldn't be.

Nicely said.

[wyly]

Time to grow up and put politics aside and fix one of the only problems in manufacturing that a government can. Regulate the resource industry, slow their growth a little through taxes, reinvest those taxes making our work force more productive, keep all our jobs instead of trading a job in Alberta for a job in Ontario because Canada loses when that happens.

just making the industry pay for the cleanup and restoration of the land should be enough to slow the development and it's absolutely a fair demand to make...various companies right across Canada are required to be environmentally responsible at their own expense there's no reason resource company's should get more lenient treatment...the NDP has got it right on this issue...