# Cdn $ = .79 US,... WTF!?!?



## Robert1950 (Jan 21, 2006)

If the US credit crisis is worse than ours, ... Why? I guess this thing is more emotional/psychological than logical. Loss of Confidence and so on. I guess I'm not buying anything for a while.


----------



## devnulljp (Mar 18, 2008)

Robert1950 said:


> If the US credit crisis is worse than ours, ... Why? I guess this thing is more emotional/psychological than logical. Loss of Confidence and so on. I guess I'm not buying anything for a while.


let's ask Stephen shall we? He's the economist. Steady hand at the helm and all that.
I have a few projects that involve getting paid from abroad...I just wish this currency dip could line up with when cheques are mailed so it converts into more $$$ at this end.


----------



## lyric girl (Sep 4, 2008)

I think my trip to guitar camp in California in January is likely off.


----------



## happydude (Oct 15, 2007)

Declining commodity prices = decline in Candian $$, but does not = a decline in the Canadian economy.


----------



## Archer (Aug 29, 2006)

/\

exactly


----------



## Robert1950 (Jan 21, 2006)

happydude said:


> Declining commodity prices = decline in Candian $$, but does not = a decline in the Canadian economy.


Please define commodity prices to a guy who never reads the business section, has never taken economics, ever in high school and flips the channel when the business report comes on TV - I'm guessing oil, lumber, copper, nickel, etc ??? What about interest rates ???


----------



## devnulljp (Mar 18, 2008)

happydude said:


> Declining commodity prices = decline in Candian $$, but does not = a decline in the Canadian economy.


Doesn't that come with a drop in confidence, which comes with a drop in $ value? 
I think the whole planet is going to suffer for the Bush years for a long time to come...


----------



## nitehawk55 (Sep 19, 2007)

Heard one fellow say it will probably strengthen again in a while . 

Good news is oil is down to about $67 per bl , now if only the gas stations would reflect that price it should be around .85-.90


----------



## shoretyus (Jan 6, 2007)

Time to look for stuff to sell on Evil bay


----------



## dwagar (Mar 6, 2006)

Robert1950 said:


> Please define commodity prices to a guy who never reads the business section, has never taken economics, ever in high school and flips the channel when the business report comes on TV - I'm guessing oil, lumber, copper, nickel, etc ??? What about interest rates ???


and potash from Sask.

As international demand dries up, our resource based economy takes a hit.

And I'm on the way to a trade show in Vegas in 2 weeks. Damn.


----------



## sneakypete (Feb 2, 2006)

well for folks like me, it`s good news and heres why, I plan on exchanging my Yen for Loons before heading home, over the past couple/3 years the Loonie has been very high so I`ve been waiting for it to drop, I used to buy my travelers checks in US$ then exchange them at home and get more money than if I`d bought CDN$, but now that the US dollar is so low and I won`t be going home this year not gonna do that but am thinking of taking advantage of the low CDN dollar. It`s all a bit hairy though and I hope things settle soon but nobody seems to know whats going to happen.


----------



## greco (Jul 15, 2007)

It also seems interesting that gold is dropping in price rapidly and people are pulling out of both mutual funds and money market funds....*there must be a lot of mattresses getting very lumpy.*

I bought some more stocks...now the wait begins. Hopefully, I'll survive the possible suicidal ideation, peptic ulcers and coronary infarct(s). 

I refuse to sell into loss and solidify my losses.

Cheers

Dave


----------



## NB-SK (Jul 28, 2007)

Robert1950 said:


> If the US credit crisis is worse than ours, ... Why? I guess this thing is more emotional/psychological than logical. Loss of Confidence and so on. I guess I'm not buying anything for a while.


Yes, psychology has a lot to do with it. 

I may be oversimplifying this, but I've noticed the same pattern during the Asian Economic Crisis. 

The markets will have some small gains one day (as people buy when it's low) and then drop again the next day or two (selling stock for profit making). As large investors sell, smaller investors panic, thus driving down the market furthermore...until large investors buy again. It will keep on doing this for 6 months. 

There's a lot of money to be made if you invest wisely.


----------



## NB-SK (Jul 28, 2007)

sneakypete said:


> well for folks like me, it`s good news and heres why, I plan on exchanging my Yen for Loons before heading home, over the past couple/3 years the Loonie has been very high so I`ve been waiting for it to drop, I used to buy my travelers checks in US$ then exchange them at home and get more money than if I`d bought CDN$, but now that the US dollar is so low and I won`t be going home this year not gonna do that but am thinking of taking advantage of the low CDN dollar. It`s all a bit hairy though and I hope things settle soon but nobody seems to know whats going to happen.


I don't have such luck. My investments are in the South Korean currency.


----------



## Milkman (Feb 2, 2006)

Mmmmmm weak CAD = happy happy joy joy in manufacturing. After two years of taking it in the nuts this comes as welcomed relief.


----------



## Geek (Jun 5, 2007)

Milkman said:


> Mmmmmm weak CAD = happy happy joy joy in manufacturing. After two yars of taking it in the nuts this comes as welcomed relief.


Only Ontarioites would see the low dollar as good kjdr


----------



## Milkman (Feb 2, 2006)

Geek said:


> Only Ontarioites would see the low dollar as good kjdr


Well, we all get our turn don't we?


----------



## happydude (Oct 15, 2007)

Robert1950 said:


> Please define commodity prices to a guy who never reads the business section, has never taken economics, ever in high school and flips the channel when the business report comes on TV - I'm guessing oil, lumber, copper, nickel, etc ??? What about interest rates ???


Exactly, as dwagar already posted our economy is largely based on resources, solid good exports like you mentioned, and especially oil. Particularly when international economies slow down, our exports are cut and our dollar goes down in value as compared to other hard currencies. Also affecting our dollar is the relative strength of the American economy. When Canadians complain that our economy is declining, it's usually when our Canadian dollar drops when compared to the US dollar. The American dollar has strengthened as of late, mostly when compared with other foreign currencies as opposed to an American economic resurgence, while the situation where our dollar was at par (American economy in the hole, foreign economies still strong, weak American dollar in international markets, high commodity prices) has changed. 

As Milkman posted this has significant advantages for our domestic manufacturing sector because suddenly Canadian made goods are cheaper and this also boosts tourism. People need to keep in mind that a drop in the Canadian dollar against the American dollar is not the end of the world. It'll probably make you think twice about shopping stateside, but that's a good thing for our economy anyway. The TSX, Toronto Stock Exchange, while down is still holding its own and isn't collapsing any time soon. Our financial system is rock solid and highly regulated and while our economy is in rough waters, it's not so much our fault and we'll weather it just fine.


----------



## allthumbs56 (Jul 24, 2006)

happydude said:


> As Milkman posted this has significant advantages for our domestic manufacturing sector because suddenly Canadian made goods are cheaper and this also boosts tourism. People need to keep in mind that a drop in the Canadian dollar against the American dollar is not the end of the world. It'll probably make you think twice about shopping stateside, but that's a good thing for our economy anyway. The TSX, Toronto Stock Exchange, while down is still holding its own and isn't collapsing any time soon. Our financial system is rock solid and highly regulated and while our economy is in rough waters, it's not so much our fault and we'll weather it just fine.


You are indeed our most "happydude" :food-smiley-004:


----------



## happydude (Oct 15, 2007)

allthumbs56 said:


> You are indeed our most "happydude" :food-smiley-004:


The glass is half full. :smile:

I suppose it's all relative but I'm optimistic. I remember a time not long ago when our dollar was in the .60s when compared to the greenback and we did just fine. Our manufacturing sector was stronger and our agriculture exports flourished. The down side is that we now have to pay more for goods imported from the US but frankly, the Canadian consumer saw minimal decrease in prices during the most recent dollar boom and I don't expect we'll see a sharp rise either. People have become complacent in the past year and enjoyed parity for personal consumer reasons. I too am guilty of ordering from the US because it was cheaper or easier to find specialty items. On the plus side, consumers are now going to think twice about buying goods in the US which boosts domestic sales. That Fender you wanted might be a few pennies more, but we'll adjust.

In the grand scheme of things, Canada is an export economy with its core in primary production (raw materials and resources) which is in many ways suitable with a lower dollar. The problem with an export economy is that when international demand drops our economy declines and so does our dollar, but a drop in the dollar also equals a increase in the attraction to Canadian product because it's cheaper. Once the US recovers our economy will strengthen not because our dollar will increase in value, but because the US dollar will increase in value and stimulate the greater world economy. This should drive up commodity prices and that will increase demand for Canadian products. So longs at the greenback is able to maintain strength, our dollar will be sufficiently below par so as to be attractive to foreign buyers while keeping imported goods at reasonable prices.

Our advantage right now is the strength in our financial systems. The most significant contributing factor to the US decline has the abundance of credit available to the consumer, ie sub-prime mortgages, whereas our lending regulations and patterns are more stable. You will not see Canadian financial institutions in the same situation. Our economy is fundamentally strong and our financial system is as secure as we can make it without resorting to protectionism.


----------



## Geek (Jun 5, 2007)

Paul said:


> Our economy does best when we have a trade surplus heavily weighted with manufactured goods.


That's got not as much to do with a low dollar as with having Liberal government :wink:




Paul said:


> What's good for Ontario is good for Canada.


That's flamebait if I ever heard it. But it's a Trudeau line, so I won't jump on you for it kjdr

The west is quite self sufficient, thank you. We have the port, the food, the oil, the gas, the trees, many minerals and we already buy manufactured stuff from China or the US since it's cheaper than from Ontario.


----------



## evenon (Nov 13, 2006)

Paul said:


> What's good for Ontario is good for Canada.


Except for if you don't live in Ontario, but live in Canada


----------



## allthumbs56 (Jul 24, 2006)

My SO is leaving for her annual Pennsylvania shopping trip this afternoon. She's nowhere near as stoked about it as she was when they planned it a month ago.


----------



## Jeff Flowerday (Jan 23, 2006)

Paul said:


> Ontario is more like a kidney or a liver. There is the option of dialysis or transplant, but remove the organ completely and the patient will die.


I was think cyst or boil myself. :2guns::smile:


----------



## torndownunit (May 14, 2006)

Paul said:


> Ontario is still considered a "have" province, as far as provincial transfer payments from the feds are concerned. The better Ontario does, the more money most of the other provinces will get from Ontario, as filtered through Ottawa.....
> 
> Ontario has about 38% of the population of Canada. (In an election that'd damn near get us a majority gov't.) When 38% of the body is sick, the whole body suffers.....


I was listening to a show about the first point on the CBC the other day. I really never knew much about this stuff. I am not the 'snobby' Ontario person, that the people in other provinces think we all are. But I do think people should be educated about what Paul mentions. Ontario gives way more money to other provinces than it gets. And as he mentions, it's a very important part of how Canada does as a whole.


----------



## Geek (Jun 5, 2007)

Paul said:


> Ontario is still considered a "have" province, as far as provincial transfer payments from the feds are concerned. The better Ontario does, the more money most of the other provinces will get from Ontario, as filtered through Ottawa.


Though it looks like Saskatchewan will be giving Ontario money this round - they are a "have" province for the first time in 3 decades!



> ...but a resource based economy is no better than a manufacturing based economy.


No unfortunately.

But a point a poster to the CBC forums made is a good one: "If the only way our exporters can compete is by having a dollar worth as much as a peso then they don't deserve to be in business."

As I had pointed out in another thread, we need to get out of the 19th century here - either we need a quality of life in the toilet (1 in 4 children and 1 in 6 adults are below the poverty line, so I think that's done) or get paid in noodle packets.

Fact - we cannot compete with China. We need to focus more on brains than braun. When we don't, look what happens.... not to mention a lot of our manufacturing is based on dinosaur industries, like manufacturing really, really badly designed autos.





> There is a difference between price and cost, and the cost of shipping our value adding jobs overseas is horrendous, and getting worse.


Exactly why we shouldn't even bother competing.




> The Niagara Escarpment, which is the largest tender fruit growing region in Canada, no longer has a fruit processing plant. It is cheaper to grow and process in China and sell in Ontario than it is to do all of the work in Ontario.


Oh, sometimes it's absolute stupidity on the part of the farmers association too.

Chilliwack is mostly farms and had the opportunity for a processing plant here. Currently most of the food is all sent to Washington state for processing/packaging. It would have saved the farmers a tonne of money and added jobs here not to mention national pride.

They near-unanimously turned it down. Reason: they'd have to part with 30 acres of farmland for the plant.

Instead, they didn't qualm at the expropriation of 200 acres for condos.

I can't stand downright stupidity I tell you *bangs head*




> There are two big problems with that...The Yuan is artificially undervalued. If the Yuan was traded at real market values, Chinese products wouldn't be quite so inexpensive, although I'm convinced they be just as cheap.


That'll blow up in their (and our) face one day :wink:




> The second problem we have is that North Americans still insist on minimum standards for workplace health and safety, and environmental protections. We just don't seem to be willing to pay for goods made in those conditions.


That again goes back to competing with third-world countries and up-and-commers.... dude, we can't.




> Going back to the original point....yes the west matters, but in the big picture, most provinces in Canada are like a spleen. You can die from a ruptured spleen, but medical intervention can remove the spleen, and save your life. You can live without a spleen.
> 
> Ontario is more like a kidney or a liver. There is the option of dialysis or transplant, but remove the organ completely and the patient will die.


We are more equal than you think. I think we were just raised different:

Ontario: "We are Canada" (countless politician's and pundits)
West: "Ontario is kinda America, ours only in that it has Ottawa"
(literally a quote from my Social Studies teacher)

Cheers mate! :wave:


----------



## ne1roc (Mar 4, 2006)

Geek said:


> we already buy manufactured stuff from China or the US since it's cheaper than from Ontario.


I think I'll call you Richard, which is much nicer than Dick. 
Are you Canadian?


----------



## Robert1950 (Jan 21, 2006)

Oh stop this West vs. Ontario Crap. Stupid People !!!!!


----------



## Geek (Jun 5, 2007)

ne1roc said:


> I think I'll call you Richard, which is much nicer than Dick.
> Are you Canadian?


You bet! But I won't sacrifice my business to be another statistic :wink:




> Oh stop this West vs. Ontario Crap. Stupid People !!!!!


Ahhh, I guess you're right. Some people can't take the jibes in stride 

Cheers!


----------



## Apostrophe (') (Dec 30, 2007)

Here's a good writeup on what's happening to the Loonie:
http://www.financialpost.com/most_popular/story.html?id=883015


----------



## Robert1950 (Jan 21, 2006)

Apostrophe (') said:


> Here's a good writeup on what's happening to the Loonie:
> http://www.financialpost.com/most_popular/story.html?id=883015


Yeah, emotions rule, brain cells be damned.


----------



## Starbuck (Jun 15, 2007)

*From the associated press.*

Loonie's plunge could help Canada weather slowdown 
The Canadian Press 
TORONTO - Experts say the plunging loonie, now at its lowest level in more than three years, could help Canada weather a global economic slowdown by making exports more competitive but things will be tough. 

Canada's manufacturing sector suffered as the dollar soared above parity with the U.S. greenback last year for the first time in decades. The strong dollar made Canadian-produced goods relatively more expensive and hurt export-based industries, particularly the auto and forestry sectors, which have lost thousands of jobs in the last year. 

One hope for Canadian exporters is that the loonie's drop may soften the impact of a worldwide recession. "It will help, but to the extent that the weak Canadian dollar is also a symptom of poor global economic growth, it's more of a cushioning of the recession rather than a cure for it," said Avery Shenfeld, a senior economist with CIBC World Markets. 

He said the Canadian economy is too tightly intertwined with its American counterpart - reeling from the continued financial meltdown - for the currency exchange rate to reverse its woes completely.





The Canadian dollar closed Wednesday in North America at 79.70 cents US, down 2.69 cents from the previous close. It dropped another third of a cent in overseas trading early Thursday. The loonie - which hit its all-time high of 110.31 cents US almost a year ago, last Nov. 7 - hasn't been below 80 cents since mid-2005. The Canadian dollar is considered a commodity currency, meaning the decline in the price of crude oil, metals and minerals due to shrinking global demand has been a major factor in the loonie's fall. 

December crude contracts fell $5.43 Wednesday to settle at US$66.75, the lowest close for a front-month futures contract since June 13, 2007, when crude settled at $66.26. TD Bank chief economist Don Drummond said his benchmark for the dollar is 85 cents US, because Canada's economy is approximately 85 per cent as productive as that of the United States. 

"We'll deviate from that depending on whether commodity prices are above or below their trend," Drummond said. But the relative strength of the U.S. dollar against other major currencies recently is also having a major impact, said Steve Malyon, a currency strategist with Scotia Capital. 

"It is a bit counterintuitive to have all this U.S. dollar strength, given that the subprime crisis started in the United States, but I think the key observation is that it started in the United States but it didn't stop there," Malyon said. 

"It's sort of an ugly contest in global currency markets. The U.S. dollar doesn't look terribly great, but neither do a lot of other places." 

In fact, Malyon said, the loonie has fared comparatively well next to some of its peers - losing about 18.5 per cent of its value against its U.S. counterpart from July 1, while the New Zealand and Australian dollars have lost 22 per cent and 30 per cent, respectively. 

The euro has seen a decline similar to that of the Canadian dollar. 

The U.S. dollar has also been given a boost by investors eager to buy the currency to pay back debt, Shenfeld said. 

"Investors that had borrowed in U.S. dollars and are now seeing losses on their investments are attempting to pay back their loans and are buying U.S. dollars in the process." Rising prices for everything from bananas to computers are another persistent worry when the dollar drops, as goods imported from the U.S. and other countries suddenly cost more. But this time, a global slowdown in demand combined with lower costs for raw materials is making consumer goods cheaper and should therefore insulate the Canadian economy from inflation, said Malyon. 

"The decline in commodities has been far greater than the decline in the Canadian dollar," he said. "When you net it all out, we have a fairly significant disinflationary pulse that's going to work its way through the economy." Drummond said this is exactly the way a floating exchange rate - or a currency whose value changes in relation to other currencies - should work. "We're freaked out when it goes up a lot and when it goes down a lot, but we have to step back and think, 'This is the way it's supposed to work,"' he said. 

"When commodity prices go up, your dollar should appreciate, and it mitigates some of the inflationary pressures coming from that, and when the dollar goes down it mitigates some of the disinflationary pressures, so it smooths out your economic activity. As hard as it is to watch that kind of volatility, it is doing the job it's supposed to do." Malyon added that this should allow the Bank of Canada to continue cutting interest rates to stimulate the economy, at least in the short term. 

The central bank lowered its overnight lending rate by a quarter point on Tuesday after a half-point cut on Oct. 8 in an attempt to stimulate the economy by encouraging borrowing. George Davis, a senior technical analyst at RBC Capital Markets, said he expects the loonie to continue its decline in the short-run. 

"Until we see credit markets stabilize, which would also imply some sort of stabilization in commodity and equity markets, I think that's going to imply weaker days for the Canadian dollar ahead," Davis said. But Shenfeld sounded a more optimistic tone. "In the near term, the continuing turmoil on financial markets is going to put some downward pressure on the Canadian dollar, but we likely have room for a substantial recovery when the global economy is back on its feet," he said. "I wouldn't expect this to last that long." 

Kristine Owram

Contact: The Canadian Press


----------



## Geek (Jun 5, 2007)

Asks a Manufacturer's Association in a news interview - "What good are competitive exports if no one is buying?".


----------



## Robert1950 (Jan 21, 2006)

Now it's 77.5.


----------



## Geek (Jun 5, 2007)

I wonder what it'll hit before the bailout-bubble bursts? $0.60?

Yeah, I'll put my money on it bottoming at $0.60-0.65.

Then I'll play a gamble, dump all my USD into CAD and hope the speculator's are right that the end of 2009 will see a $0.95 CAD again :rockon2:


----------



## devnulljp (Mar 18, 2008)

dwagar said:


> And I'm on the way to a trade show in Vegas in 2 weeks. Damn.


Well, the good news is your '01 Les Paul '59 Reissue (R9) is now worth 70 squajillon (Canadian) dollars 

I have to admit, it's good for me though. The JPYen is soaring and the CAD is tanking. The volatility just added somewhere in the region of 25--30% to my income (or knocked 25--30% off my mortgage payments, whichever way you want to look at it). Wonder how long it will last.


----------



## devnulljp (Mar 18, 2008)

Paul said:


> An oversimplified definition of a commodity is something that you cannot tell the supplier/manufacturer by looking at it. A pair of Nike shoes has a brand identity attached to it. A bushel of grain doesn't.












?


----------



## Robert1950 (Jan 21, 2006)

Well, it seems everybody really is into 'Branding' these days (see corp. buzzword thread)



devnulljp said:


> ?


----------



## NB-SK (Jul 28, 2007)

devnulljp said:


> ?


Right, weren't GM seeds supposed to make food more affordable?


----------

