Canadian Dollar

[Kapitän Rotbart]

Howdy y'all!

I've been wondering whether the Canadian dollar will be getting better soon, because I've got a wad of cash, and I am wondering when is the best time to trade from $CAD to €.

I've checked two sources with opposite forcasts:

http://www.marketvector.com/exchange-rate/cdollar.htm says it's likely to go up, so I should wait;

http://neatideas.com/cdollar.htm says the opposite, so I should trade now.

What do y'all say? Any reason for believing one or the other?

[Charles Anthony]

I have a few questions for you.

1) Are you expecting to make profit by exchanging one currency for an other currency?

2) What do you plan to do with your money?

3) What do you mean by better?

[Topaz]

I have a few questions for you.

1) Are you expecting to make profit by exchanging one currency for an other currency?

2) What do you plan to do with your money?

3) What do you mean by better?

This is what I've heard. The C$ will be replace by the US $. in the near future. The Euro is worth more than the US $ I hear silver is were to put your money.

[geoffrey]

Here's my personal take, guarnteed to make you fortunes...

Don't go to an internet forum for investing advice.

[Kapitän Rotbart]

I'm not planning on making money on an exchange rate. I don't see any huge changes coming, so that's not the intention.

I'm living abroad and I still have a wad of $CAD. I'm just wondering when I should exchange it all for €... now or later.

I plan on using this money to pay living expenses for a while (rent and food).

By better I mean an increase in the value of the Canadian currency.

It's nothing about investments (I wouldn't post on a forum for financial advice), but it makes the difference of a couple weeks' living expenses.

[geoffrey]

Currency speculation is such a risky game, you best to just sit on the cash until you need to convert it, sparing some massive decline in the Euro. Few in the world could really model a currency's projective value accurately over a few months, not within a reasonable margin. I'm going to argue that no one in the world can model a comparitive value between two currencies accurately at all.

Check your credit cards, some offer reasonable transaction rates for foreign purchases. Buying on the cards also gives you some extra warrenties and insurance at times, sometimes valuable overseas.

[Charles Anthony]

How much money are you talking about?

[Kapitän Rotbart]

Between two and three k CAD, I'm in Germany and no one accepts credit cards here except for high end shops, the train service (only at major stations) and a few other places. Grocery shops don't even accept credit cards! I'd be using it if I could.

Yeah, I'm converting currency as I go, but it would be convenient to know if I could rely on a prediction, with at least 80% accuracy.

[dpwozney]

Has any government in Canada ever defined the value of the Canadian dollar?

Bank of Canada notes state: "This note is legal tender". This Bank of Canada webpage provides the following answer for the question, "What is 'legal tender'?":

"A 'tender' is an offer of payment of a debt. In Canada, legal tender consists of coins issued by the Royal Canadian Mint and bank notes issued by the Bank of Canada.

This does not mean that a merchant is obliged to accept bank notes. The method of payment can be whatever is mutually acceptable to both parties - cash, credit card, cheque, etc. Thus, a merchant may refuse to accept bank notes in payment for goods or services, without contravening the law."

Bank of Canada notes are not backed by anything of intrinsic value, unlike secured debt notes which are backed by some form of collateral.

[geoffrey]

Bank of Canada notes are not backed by anything of intrinsic value, unlike secured debt notes which are backed by some form of collateral.

Whoop-de-do. Corporations issue unsecured debt issues all the time. People eat them up, they are nearly always secure and offer higher returns than secured bonds or commerical paper.

It's ridiculous to think we should store enough gold to backup each note. Our system works fine as is.

[Kapitän Rotbart]

Actually, since the EU adopted the €, many more places around the world, who would otherwise be accepting multiple currencies now replaced by one, are accepting the Canadian Dollar.

I'm not complaining that many places around the world are accepting it, but I would like to see its value go up.

[madmax]

Actually, since the EU adopted the €, many more places around the world, who would otherwise be accepting multiple currencies now replaced by one, are accepting the Canadian Dollar.

I'm not complaining that many places around the world are accepting it, but I would like to see its value go up.

On a personel note, you would like the dollar to continue to rise. It has been in the 90s. However it has been a heck of a lot lower the past decade, when it was in the 60 cent range. That is quite an increase. Being an export Nation, a high dollar isn't that advantageous. Travelling around the Globe, a high dollar is quite helpful.

It is interesting to see how many places are accepting Canadian Currency. This is a relatively new phenomena.

[dpwozney]

Bank of Canada notes are not backed by anything of intrinsic value, unlike secured debt notes which are backed by some form of collateral.

Whoop-de-do. Corporations issue unsecured debt issues all the time. People eat them up, they are nearly always secure and offer higher returns than secured bonds or commerical paper.

What rate of return do Bank of Canada notes in your possession offer?

It's ridiculous to think we should store enough gold to backup each note.

Who is thinking we should store enough gold to back up each note?

Our system works fine as is.

Do you consider a system, with a per-capita debt for Canadians of $28,390 in 2005, to be working fine as is?

[geoffrey]

What rate of return do Bank of Canada notes in your possession offer?

I actually don't have any cash on me right, but usually 0%.

Do you consider a system, with a per-capita debt for Canadians of $28,390 in 2005, to be working fine as is?

That's personal choice, not an inherent flaw in the system. If people borrow too much, then they should learn not to? Why is that the fault of 'the system'? $28,390 (though this number is uncited I note), actually doesn't seem that bad. Have a few thousand on the credit cards, a few thousands on the student line of credit... then you go to buy a house and now your at like $350,000 in debt. Not too shabby Canada, not too shabby.

[Charles Anthony]

Yeah, I'm converting currency as I go, but it would be convenient to know if I could rely on a prediction, with at least 80% accuracy.

What exactly do you want to predict?

It sounds like you want to know on what day you should convert all of your Canadian dollars into Euros with the hope that on that predicted day, the exchange rate will yield you the greatest amount of Euros -- corrected for the effect of interest and inflation leading up to that day. Is that correct?

If that is correct, you are asking for an impossible prediction.

[dpwozney]

Our system works fine as is.

Do you consider a system, with a federal government debt at the end of 2005-06 of $481.5 billion, to be working fine as is? This system involves high taxes partially due to interest payments on debt. I have been told that this federal debt number does not include deferred maintenance debt for the federal infrastructure assets. This federal debt is not my personal choice.

[Kapitän Rotbart]

What exactly do you want to predict?

It sounds like you want to know on what day you should convert all of your Canadian dollars into Euros with the hope that on that predicted day, the exchange rate will yield you the greatest amount of Euros -- corrected for the effect of interest and inflation leading up to that day. Is that correct?

If that is correct, you are asking for an impossible prediction.

I'm not too worried about inflation, for the time I'm abroad.

I know that is impossible... I want an 80+% certain prediction that the Canadian dollar will either go up or down significantly or stay about the same in the next four months.

[Charles Anthony]

I want an 80+% certain prediction that the Canadian dollar will either go up or down significantly or stay about the same in the next four months.

In that case it probably does not matter. Trade them now or trade them later.

The Canadian dollar vis-a-vis the Euro has stayed steady within 5% in the last 8 months. Past performance is the best predictor. One year ago, the Canadian dollar was worth more but only by about 10% so it is still within your stated margin of risk.

EUR to CAD (Euro to Canadian Dollar) Exchange Rates: Charts and historical data

As an aside, the charts to which you referred in your Opening Post quote and compare the C$/U$A exchange rates.

[dpwozney]

Has any government in Canada ever defined the value of the Canadian dollar?

Bank of Canada notes state: “This note is legal tender”.

All current Bank of Canada notes and RCM coins do not claim to be dollars or cents. They just instead have the word “DOLLAR”, “DOLLARS”, “CENT” or “CENTS” printed on them.

Bank of Canada notes used to be promissory notes. Before 1969, they contained the phrase “WILL PAY TO THE BEARER ON DEMAND” and then some number (“ONE”, “TWO”, “FIVE”, “TEN”, “TWENTY”, “FIFTY”, or “ONE HUNDRED”) and then the word “DOLLAR” or “DOLLARS”. The dollar always used to refer to something real. For example, the dollar in North America used to refer to the Spanish dollar, a coin made mainly of silver.

What, then, is one Canadian dollar, physically and quantitatively? Does the Canadian dollar even exist?

Without knowing what a Canadian dollar is, or will be in the future, how can one confidently make long-term investments, decisions or commitments based on the stated value of the Canadian dollar?

[dpwozney]

Bank of Canada notes are not backed by anything of intrinsic value, unlike secured debt notes which are backed by some form of collateral.

Money should be a store of value. Bank of Canada notes and most RCM coins are not really an instrinsic or legally-backed store of value, creating risk and uncertainty over time.

Converting Bank of Canada notes and most RCM coins to an instrinsic store of value, or paper legally backed by a real physical store of value, involves costs, commissions or fees. So does converting back the other way. This unnecessarily increases the cost of saving or storing wealth.

[dpwozney]

It's ridiculous to think we should store enough gold to backup each note.

One disadvantage of gold as a standard is that it is too high-value for small-change circulation coin, unless low-percentage-gold alloys are used.

Some people prefer purity, and pure gold is too soft for coins that circulate. Pure nickel is hard enough for circulating coins.

Whether nickel, gold, silver, or some other metal is used as a monetary standard, the value amount of the money supply could be both:

(1) higher than the value amount of the metal (the “standard metal”) used as the standard for the money supply; and,

(2) completely backed by real physical assets.

Such a monetary system would involve paper notes backed by any real physical asset of market-equivalent-value of a specified mass of the standard metal.

No type of physical asset, that does the backing, would need to be specified; the requirement would be that the physical assets could be marketed and sold for a specified mass of the standard metal. Any metal, real estate, stock, bond, or other physical item, that could be exchanged for a specified mass of the standard metal, would be sufficient. Whatever physical assets, that are doing the backing, however, may be required to be reported to interested parties.

The paper notes would be required to be contractually backed by any physical asset, or combination of physical assets, that could be exchanged any time, or within an indicated reasonable amount of time, for a specified mass of the standard metal. Any such time period should be indicated on the paper notes. In the case of on-demand availability, of the standard metal, any time during business hours, something like “on demand” should be indicated on the paper notes.

For the sake of convenience, the physical asset, or combination of physical assets, could be exchanged for a convenient intermediate item, such as bank notes, which would then in turn be exchanged for the specified mass of of the standard metal.

[M.Dancer]

All current Bank of Canada notes and RCM coins do not claim to be dollars or cents. They just instead have the word “DOLLAR”, “DOLLARS”, “CENT” or “CENTS” printed on them.

I'm not sure what confuses you about something that clearly says what it is, legal tender and the amount...but then again freemen thinking is a little confused at best.

[dpwozney]

I'm not sure what confuses you about something that clearly says what it is, legal tender and the amount...

All current Bank of Canada notes and RCM coins are referred to as legal tender. Legal tender is not the same as dollars and cents.

[dpwozney]

All current Bank of Canada notes and RCM coins are referred to as legal tender. Legal tender is not the same as dollars and cents.

Financial transactions, that do not involve any legal tender, are said to be conducted in dollars and cents.

[Vancouver King]

The Canadian dollar will be $1.25 by Xmas. You read it here first.