The C$ is a free floating currency, but not a free sinking one. Long before the dollar reached 55 cents, the BOC would intervene and buy C$. Also, the USA would intervene to protect their significant foreign investments in Canada . If the tar sands become obsolete which would be an armageddon scenario for Canada, then with the flight of foreign capital would cause the dollar to go well below 55 cents. This particular analyst might be going out on a limb, perhaps stating the extreme to get some notoriety. A 55 cent dollar would result in an influx of sex tourists from America getting an extra bang for their buck.
R.I.P. Loonie
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Whether the Lonnie gets to 60 cents or under is pure speculation at this juncture.
Meanwhile, let's see whether it can hold above 75 cents. If it goes below and heading towards 70 cents there will be panic.
It doesn't matter what you and I think. it is dynamic, fundamentally driven plus some speculation around it. Always.
When the traders, shortists and hedge funds smell blood their combined bets are in trillions including leverage.
Meanwhile, let's see whether it can hold above 75 cents. If it goes below and heading towards 70 cents there will be panic.
It doesn't matter what you and I think. it is dynamic, fundamentally driven plus some speculation around it. Always.
When the traders, shortists and hedge funds smell blood their combined bets are in trillions including leverage.
This would be before Canada was a country, so presumably before there was a Canadian dollar to be valued at US$2.78.July 11, 1864 all time high of 2.78US
Canada has nothing the world wants except natural resources. And if you factor in the new Iran deal, that's more oil coming onto the world market when the Treaty is ratified. Who would want Canadian heavy oil vs light middle eastern crude?If the tar sands become obsolete which would be an armageddon scenario for Canada, then with the flight of foreign capital would cause the dollar to go well below 55 cents.
I'm shitting myself because all my RRSP in CAD is worthless now. I need to find a US job and with low taxes and lower cost of living, I could have the same amount saved up in 3-4 years.
Canadian economy is zero growth, increasing cost of living, rising taxes......the policy makers here are FUCKED!
At this point Harper will null bill c36 and will start taxing sex worker to collect taxes ?A 55 cent dollar would result in an influx of sex tourists from America getting an extra bang for their buck.
I'm not sure it's having that effect.....Some people think about how much more expensive their holiday is going to be, or how much more money their cross-border shopping tour is going to cost. Others think about how much more they will export because of the cheaper value of our currency, making us more competitive on the world markets, resulting in more production, more profits and more jobs created.
http://www.statcan.gc.ca/daily-quotidien/150715/dq150715a-eng.htm
Yes, I noticed that too. I got this info from one of the newspapers that cited Bank of Canada as their source. 1864 was when the U.S. was embroiled in a horrendous civil war and had temporarily abandoned the gold standard. By 1880 the CAD fell back to slightly below the USD.This would be before Canada was a country, so presumably before there was a Canadian dollar to be valued at US$2.78.
When I first came to Canada in 2004, the CAD was in a worse shape compared to today. Back then, manufacturing and low cost services like call centers proliferated in Ontario.I'm not sure it's having that effect.....
http://www.statcan.gc.ca/daily-quotidien/150715/dq150715a-eng.htm
11 years later, the world has significantly changed. The US needs a lot more Spanish speakers to man call centers so that's Canada's loss. Maybe similarly, it doesn't need Canadian manufactured goods because supply chains from Asia provide cheaper goods of same quality.
My point is: during the time when Canada was fucking around not diversifying the economy from oil, the world changed. And the old assumptions of low CAD advantage might not hold true and that's why you're not seeing the numbers go up. That's my theory.
When I travel to NYC I noticed many signs are in English and Spanish or only in Spanish. (Where the fcuk is French?) Apparently, California is now majority Hispanic, maybe Florida and Texas as well.The US needs a lot more Spanish speakers to man call centers so that's Canada's loss.
Canada did nothing to help RIM and Nortel. Shame! Also, the Harper Tories are doing their best to destroy Canadian owned and managed companies like Rogers, Bell and Telus. Nice, eh.during the time when Canada was fucking around not diversifying the economy from oil, the world changed.
Hispanics will be the largest ethnic group in the US in a few years. At that point, companies do not need Canadians who are willing to work for CAD 35,000 in a call center in Niagara Falls.When I travel to NYC I noticed many signs are in English and Spanish or only in Spanish. (Where the fcuk is French?) Apparently, California is now majority Hispanic, maybe Florida and Texas as well.
I do not wish to make this political but policy makers cannot be mentally lazy and assume the US (or any other major customer) will always need their services or goods. But to assume oil will stay high forever is as foolish as to assume real estate can only go up.
I digress, let's discuss the loonie.
We opened a branch office in Buffalo a few years ago and were surprised that American salaries were so low compared to Canadian salaries (taxes and cost of living also lower). Of course, the comparison may no longer be valid now that we have a 76cent CAD but then a large chunk of our revenue is also in USD.companies do not need Canadians who are willing to work for CAD 35,000 in a call center in Niagara Falls.
P.S. I'm not an expert but there are some tax free zones in New York state to attract new businesses. Of course, the liberal lefties will call these companies corporate welfare bums and ignore the jobs they created.
Buffalo is one of the three poorest cities in the U.S., your sample might be skewed.We opened a branch office in Buffalo a few years ago and were surprised that American salaries were so low compared to Canadian salaries (taxes and cost of living also lower). Of course, the comparison may no longer be valid now that we have a 76cent CAD but then a large chunk of our revenue is also in USD.
P.S. I'm not an expert but there are some tax free zones in New York state to attract new businesses. Of course, the liberal lefties will call these companies corporate welfare bums and ignore the jobs they created.
Quebec produces airplanes and video games, the west produces Oil, other than banks and a housing bubble what does Ontario make?
I'm always shocked by the lack of any Canadian brands.... There is more value there than being a parts/raw materials supplier to the U.S.
The low Loonie is a blessing for your oil business, it has blunted the local currency effect of $48 WTI less the $14 WCS discount......
You are absolutely right, the Bank of Canada agrees with you as well and has given a vote of non confidence to the Canadian economy in the near future by cutting interest rates. Canada may become more of a welfare nanny state soon and who better to be the chaperone than an NDP government which will be anti business pro union and pro welfare. Will Canadians follow Alberta and have a dance with an NDP government federally?Canada has nothing the world wants except natural resources. And if you factor in the new Iran deal, that's more oil coming onto the world market when the Treaty is ratified. Who would want Canadian heavy oil vs light middle eastern crude?
I'm shitting myself because all my RRSP in CAD is worthless now. I need to find a US job and with low taxes and lower cost of living, I could have the same amount saved up in 3-4 years.
Canadian economy is zero growth, increasing cost of living, rising taxes......the policy makers here are FUCKED!
With all due respect, I wouldn't make this Liberal vs Conservative vs NDP - 10 years of Conservatives, 10+ Liberals in Ontario and neither is this Province nor is the country doing well.You are absolutely right, the Bank of Canada agrees with you as well and has given a vote of non confidence to the Canadian economy in the near future by cutting interest rates. Canada may become more of a welfare nanny state soon and who better to be the chaperone than an NDP government which will be anti business pro union and pro welfare. Will Canadians follow Alberta and have a dance with an NDP government federally?
The passiveness of the people and the sad situation where politicians in Canada do NOT care for the long term benefit of this country is apparent to me. It doesn't matter what they label themselves - that's why I said, let's discuss the loonie and the policies it might take to resuscitate the economy for good.
The Tories implemented massive subsidies of the oil industry which resulted in huge overbuilding, turning Canada into a one trick pony.
Everyone spoke about the dangers at the time, a volatile currency is destructive to manufacturing and results in an economy that is entirely dependent on oil.
People think the low dollar now will benefit manufacturing, but it won't. Manufacturing is capital intensive, you have to invest millions in machinery that then takes years to pay off and become profitable.
In that context investors take a long term view, and with a highly volatile currency it is too risky. While existing facilities benefit from the low dollar no one will build new manufacturing capabilities in an economy where the petro dollar makes it impossible to predict future profitability.
Everyone spoke about the dangers at the time, a volatile currency is destructive to manufacturing and results in an economy that is entirely dependent on oil.
People think the low dollar now will benefit manufacturing, but it won't. Manufacturing is capital intensive, you have to invest millions in machinery that then takes years to pay off and become profitable.
In that context investors take a long term view, and with a highly volatile currency it is too risky. While existing facilities benefit from the low dollar no one will build new manufacturing capabilities in an economy where the petro dollar makes it impossible to predict future profitability.
You have made a valid point, however policies which might resuscitate the economy for good cannot be discussed without including politics. Each political party is beholden to the specific interests of their base. This leads to regional disparities, with the Alberta slump now causing a federal concern with the ailing loonie.With all due respect, I wouldn't make this Liberal vs Conservative vs NDP - 10 years of Conservatives, 10+ Liberals in Ontario and neither is this Province nor is the country doing well.
The passiveness of the people and the sad situation where politicians in Canada do NOT care for the long term benefit of this country is apparent to me. It doesn't matter what they label themselves - that's why I said, let's discuss the loonie and the policies it might take to resuscitate the economy for good.
