Canadian Dollar at Parity with the US Dollar

[bush_cheney2004]

Get ready to buy Canadian stocks when they get cheap.

Yup....more Hydrogenics please!

[bush_cheney2004]

The sad part is very few see the American dollar tanking while they look at the Canadian dollar.

22% gain to the Canadian dollar is a smoke screen and its really an American meltdown when looking at oil or gold.

Like Coot said,,,,,,,

It's not a meltdown at all....it is a purposeful weak dollar policy...US trade deficit is down:

http://news.bbc.co.uk/2/hi/business/7039758.stm

[Wilber]

Methinks the mountain of mortgage related bad debt that US financial institutions are sitting on is a bigger worry at the moment. A hangover from too much lending to anyone who had a pulse.

[bush_cheney2004]

Methinks the mountain of mortgage related bad debt that US financial institutions are sitting on is a bigger worry at the moment. A hangover from too much lending to anyone who had a pulse.

Correct...and this is a healthy shakeout. Weak hands must fold to make way for the strong. Some of these folk don't recall the $150 billion savings and loan debacle and subsequent recession.

This too will pass.

[August1991]

It's not a meltdown at all....it is a purposeful weak dollar policy...US trade deficit is down:

Meltdown?

I ahve to agree with b/c.

Interest rate differentials are now driving the currency markets. The Fed is kiling two birds with one stone. It's taking care of the sub-prime fallout and it's solving what it thinks is a trade deficit problem.

The market is now anticipating another cut by the Fed this week and if the US economy stays strong (and oil prices rise) then I think it's a fair bet that the Cdn dollar will go above 1.06 and break the record set in 1957 when it rose to the highest ever.

I'm usually a contrarian, but this is a no brainer. I'm moving significant money into USD interest bearing accounts...

I can see the logic in that position but you should know that timing is a game for the young and foolish. Edited October 30, 2007 by August1991

[ScottSA]

I can see the logic in that position but you should know that timing is a game for the young and foolish.

I'm not trying to time the market...I'm just securing assets. The same way I buy a few ounces of silver every month, and an ounce or two of gold if it's a good month. Nothing more secure than good old precious metals in their physical form. I also play the other end of the spectrum, with mutuals, stocks, and the odd daytrade, although I recently got myself bogged into a hurricane stock position that looks like its for the long term...at least till April or so...grrr

[shavluk]

hahha

Well I made more on lead than you did silver or gold in the last year.

I wouldn't buy either gold or silver today.

Actually never silver.

What ever works for you.

As an ex-real-estate broker and a bank manager , I know that when the firemen are building houses on spec or labourers buying gold its probably time to sell mine,,hahhaha.

Have a nice day!

[jdobbin]

Dollar closes in $1.06.

http://www.cbc.ca/money/story/2007/10/31/dollarjump.html

The Canadian dollar surged to a 50-year high against the U.S. greenback Wednesday after the U.S. Federal Reserve cut interest rates again, oil prices surged and the Canadian economy showed steady growth.

At the close of trading, the loonie was up 0.93 of a cent to $1.0585 US and traded as high as $1.0593 US.

The Canadian dollar has not been that high since Aug. 21, 1957, according to Bank of Canada data.

That's the same day the loonie reached its post-war high of $1.0614 US.

The loonie reached parity with the U.S. dollar on Sept. 20 and has just kept climbing in the six weeks since.

It's risen by 23 per cent against the U.S. dollar since the start of the year.

[Michael Bluth]

As an ex-real-estate broker and a bank manager , I know that when the firemen are building houses on spec or labourers buying gold its probably time to sell mine,,hahhaha.

As the old story goes - when cab drivers are giving you stock hints it's time to get out of the market.

[shavluk]

So is that you saying then that you agree with me?

Thanks

Edited October 31, 2007 by shavluk

[jdobbin]

Harper says that the tax cuts are how he plans to deal with manufacturers crisis.

http://ca.today.reuters.com/news/newsArtic...-HARPER-COL.XML

anada's manufacturing sector, hit by the soaring currency, is in crisis but the government is addressing the issue, Prime Minister Stephen Harper said on Wednesday.

Answering a question in Parliament about manufacturers, Harper said: "This sector is in crisis. It's the reason we addressed it in the Speech from the Throne (the government's policy agenda)."

Harper referred to tax cuts on corporate and personal income and on sales.

He's have to do a whole lot more than that if the dollar soars past $1.06.

[Michael Bluth]

So is that you saying then that you agree with me?

Thanks

You are welcome.

I definitely think the housing market is inflated here. Maybe it's just wishful thinking as I'm trying to get into the market, but I definitley don't see double-digit percentage increases in the price of housing here in Alberta again.

Anecdotal I know, but I have a friend whose house almost doubled in a little over three years. He is moving for a better job but having a very difficult time selling his place. He could sell it if he would be happy with the value of the house going up 85% in three years. Eventually the market will go down a little bit when people like my friend get a little more realistic in their selling prices...

[shavluk]

My older son and my daughter both own in Calgary and are not helped by their homes being worth so much more unless they do leave town , which we are seeing in Saskatoon and else where.

I just cringe when I see Canada AM talking about Saskatoon leading the country in house price increases because I used to own quite a large chunk there before I was framed , jailed and bankrupted by Saskatoon's police.

[jdobbin]

The dollar reached $1.07 on new jobs report.

http://www.ctv.ca/servlet/ArticleNews/stor...?hub=TopStories

The dollar jumped to above 107 cents over yesterday's close of 105.12 cents US after Statistics Canada reported Friday a decline in unemployment rate. Friday's close breaks a previous high set in 1957.

The jobless rate fell from 5.9 in September to 5.8 per cent in October.

"These are spectacular job growth numbers," said Avery Shenfeld, a CIBC world markets economist.

"We'd like to see a bit more coming from the private sector. But it's hard to argue with a multi-decade low in the unemployment rate and lots of jobs coming that are going to pay incomes."

The soaring loonie smashed a 50-year record on Wednesday after it topped the high of 106.14 U.S. cents, which was reached a half-century ago on Aug. 21, 1957.

The loonie also benefited Friday from an increase in oil prices -- up 92 cents at US$94.41 per barrel. Oil had broken $96 per barrel earlier in the week.

The danger is that the private sector is not responsible for for many of the jobs. It is the public sector where many people are being hired.

The service sector continued to elevate the nation's employment level with the highest gains in health care, social assistance and public administration. In October, service sector jobs increased by 66,000, representing a growth of 3.2 per cent in 2007.

There is a lot of danger in the dollar rising as fast it has been. The manufacturing sector is going to have quite a lot more pain as the dollar closes in $1.10.

Edited November 3, 2007 by jdobbin

[August1991]

The dollar reached $1.07 on new jobs report.

The jobs report implies that the Bank will not cut interest rates any time soon. Hence, the rise in our dollar.

I happen to think our dollar is over-valued (sticking my wet finger in the air) but what is truly remarkable is the speed of its rise. People haven't had time to adjust properly.

As an aside, free markets are good because they can make these changes quickly and clearly. Imagine if a government committee were responsible for setting our exchange rate. The debates and arguments would be endless and in the end, the committee would get it wrong. Think of the GST for example.

It is sad that Leftists don't have a better appreciation and understanding of how markets work.

[jdobbin]

As an aside, free markets are good because they can make these changes quickly and clearly. Imagine if a government committee were responsible for setting our exchange rate. The debates and arguments would be endless and in the end, the committee would get it wrong. Think of the GST for example.

It is sad that Leftists don't have a better appreciation and understanding of how markets work.

I don't recall mentioning anything about setting exchange rates.

It is too bad rightists are making statements about things never mentioned.

Flaherty is the one who shrugged his shoulders when business asked for even deeper corporate tax cuts to help them compete with a 7% rise in the dollar is the last weeks.

[Guest coot]

It is sad that Leftists don't have a better appreciation and understanding of how markets work.

It is sad that Rightists don't have a better appreciation and understanding of how markets fail.

[geoffrey]

It is sad that Rightists don't have a better appreciation and understanding of how markets fail.

Where has their been market failure regarding this? What are you talking about?

All the business fleeing the stone aged Canadian producers and retailers and buying online from the States is evidence that the market is alive and well. This might weed out those terrible companies that have bogged down Canada so long with their inflexible, slow minded management.

I'm doing all my Christmas shopping on Amazon this year. That is the market working.

[August1991]

I don't recall mentioning anything about setting exchange rates.

It is too bad rightists are making statements about things never mentioned.

I know that you didn't make such a comment Dobbin. I put mine in as an aside.

It is sad that Rightists don't have a better appreciation and understanding of how markets fail.

On the contrary, perhaps because the right typically has a deep appreciation of how markets work, they have an understanding of when and why markets fail.

Market prices, when they work, are the best way to get relevant information out to billions of people so that they can make wise decisions. No government committee could ever duplicate that. Canada's exchange rate is one simple example that we are all now observing.

People on the Left such as Tony Blair, Bill Clinton and Bob Rae have an understanding of markets and free trade. Unfortunately, too many on the Left still don't get it. I think that's sad and that was the point of my comment.

Edited November 3, 2007 by August1991

[Michael Bluth]

People on the Left such as Tony Blair, Bill Clinton and Bob Rae have an understanding of markets and free trade. Unfortunately, too many on the Left still don't get it. I think that's sad and that was the point of my comment.

Blair and Clinton unquestionably do.

Bob Rae?

Raise taxes on the rich Bob Rae?

Strongly opposed to NAFTA Bob Rae?

A $9.1 Billion dollar provincial deficit in 1991 dollars Bob Rae?

This man does not understand markets and/or free trade.

[Guest coot]

Where has their been market failure regarding this? What are you talking about?

I'm talking about the idea that the market always performs for our interests and that it never fails. We've lived in a wonderful time of prosperity and growth for a very long time, which might give someone in their 20s the idea that markets are foolproof. They aren't. They inevitably fail, and when they do, it's often a very harsh landing.

[Guest American Woman]

I can't believe how fast our dollar has plummeted. Besides sucking compared to the

CND $ it's at .69 euros right now. We don't feel it at home, but it's sure not a good time to be traveling outside the U.S. I wonder how much further it can deteriorate/how long this can last.

Edited November 4, 2007 by American Woman

[Michael Bluth]

I can't believe how fast our dollar has plummeted. Besides sucking compared to the CND $ it's at .69 euros right now. We don't feel it at home, but it's sure not a good time to be traveling outside the U.S. I wonder how much further it can deteriorate/how long this can last.

It can last for a long, long time.

The Euro is increasingly becoming the world's currency. Which is a good thing for pretty much everybody except the US.

Much better to have monetary policy set by a board with a number of national representatives than just one country.

[geoffrey]

I'm talking about the idea that the market always performs for our interests and that it never fails. We've lived in a wonderful time of prosperity and growth for a very long time, which might give someone in their 20s the idea that markets are foolproof. They aren't. They inevitably fail, and when they do, it's often a very harsh landing.

Nonsense. Most market failures have occured due to poor government policy (the NEP for example). Markets are the only way to set prices, and the "price" of a dollar is just one example.

[bush_cheney2004]

I can't believe how fast our dollar has plummeted. Besides sucking compared to the

CND $ it's at .69 euros right now. We don't feel it at home, but it's sure not a good time to be traveling outside the U.S. I wonder how much further it can deteriorate/how long this can last.

Yes we do "feel it" at home, as in the cost of imports and rising American exports. There is also a purposeful strategy for weak dollar policy with respect to servicing debt. Canada has already revised 2008 export growth projections way down (85% goes to the USA).

It can last as long as we wish it to last.