Good for Canadians visiting the US. Bad for Canadian business that trades to the states, bad for people in the US who like to visit Canada.
While I understand why a lot of Canadians will cheer when they hear this news, it is not as good a thing as you might think. Its not the same as winning the IIHF worlds. LOL
If it stays like this for long, it will not be good for the Canadian economy. Like it or not, Canada NEEDS a strong US dollar.
Now if the morons in DC will just figure out that the answer is NOT just printing more money and dumping it into the economy. Economics 101. Lots of money and less things to spend it on equals inflation.
While I understand why a lot of Canadians will cheer when they hear this news, it is not as good a thing as you might think. Its not the same as winning the IIHF worlds. LOL
If it stays like this for long, it will not be good for the Canadian economy. Like it or not, Canada NEEDS a strong US dollar.
Now if the morons in DC will just figure out that the answer is NOT just printing more money and dumping it into the economy. Economics 101. Lots of money and less things to spend it on equals inflation.
I have class, and not an economics one....
So while I am gone, can someone explain how it all works? When I visit canada, I can trade my USD to a CD (or a Icelandic Krona for that matter) and get one CD or 62 Krona.
So where is the problem? I guess canadians don't make more money at the exchange rate that it was? [In Iceland, they did pay out more to the US scale, so 1 Krona as just treated like a penny...)
So while I am gone, can someone explain how it all works? When I visit canada, I can trade my USD to a CD (or a Icelandic Krona for that matter) and get one CD or 62 Krona.
So where is the problem? I guess canadians don't make more money at the exchange rate that it was? [In Iceland, they did pay out more to the US scale, so 1 Krona as just treated like a penny...)
That is the exactly WRONG attitude to take. Why do so many Canadians think that? Where does that smitten attitude come from?
Trust me... Our economies need each other. 80% of Canada's exports are sold to the states. If the Canadian dollar gets much more expensive, companies here will start looking elsewhere. Not good for either economy.
Or look at it this way... We travel to Canada at least twice a year. With the loonie now worth more than a US dollar, I will still go, but I will do WAY less. I mean a case of beer is $40!!! Gas is like $5-6 a gallon... Just about everything is more expensive in Canada, but it would even out wehen the US dollar was worth more. Now that it is worht LESS, that $40 case of beer just got MORE expensive.
So go ahead and beat your chest and what not... But this is NOT a good thing for either of us.
Trust me... Our economies need each other. 80% of Canada's exports are sold to the states. If the Canadian dollar gets much more expensive, companies here will start looking elsewhere. Not good for either economy.
Or look at it this way... We travel to Canada at least twice a year. With the loonie now worth more than a US dollar, I will still go, but I will do WAY less. I mean a case of beer is $40!!! Gas is like $5-6 a gallon... Just about everything is more expensive in Canada, but it would even out wehen the US dollar was worth more. Now that it is worht LESS, that $40 case of beer just got MORE expensive.
So go ahead and beat your chest and what not... But this is NOT a good thing for either of us.
S
I don't really want to get into the whole importing exporting thing, but Canada can fend for itself. We have everything we need right here. There are things that we have that America wants and needs.
The whole beef issue still really erks me. We are a farming/ranching community and when it came to Mad Cow, the states disgusted me. We live right near the border and my husband works in agriculture so we hear a lot.
The whole beef issue still really erks me. We are a farming/ranching community and when it came to Mad Cow, the states disgusted me. We live right near the border and my husband works in agriculture so we hear a lot.
It's not about being leader or follower. It's about the cost of trade.
I admit, I like parity much better than our all-time low of $0.62 US, However:
If it cost a US firm $85.00 US to buy $100.00 CDN of forestry product when the Loonie was at $0.85 US, their cost has now gone up 15-18% just based on the exchange rate. In other words, the US forest products become more competative and the CDN products become too expensive. The only way that would change is if the Canadian business reduced their cost by 15%, but they can't because no one else in Canada is going to drop their prices for goods/services or basic nessessities to reflect what's more in line with US costs now, based on the higher value of the Loonie.
Alternatively, if a Canadian company has been using steel from hamilton, it may curb it's use of that steel and buy from an American company because the American product is now 15% less than it was in January.
Add to that, the fact that a number of things already cost more in Canada than they do in the US and suddenly the tourism industry suffers.
Lastly, with the very attractive prices being found south of the border and the dollar now at parity, Canadian business will suffer a hit to some degree from Canadian consumers because they can order goods in the states at (in some cases) 40% less than the exact same product in Canada.
My personal example is a lens I'm looking at getting. In the US it costs $830. In Canada, the exact same lens costs between $1220 and $1300. With the dollar at parity, that US price is irresistable and the Canadian business looses out. When the Loonie was at $0.85 US, the American retailer wasn't quite as attractive. And $400.00 extra to support a Candian company is a bit more of a pill than I'm willing to swallow when I'm working a p/t job on top of my day job to save up for this lens.
In spite of the better value of our dollar, notice how the cost of things hasn't been reduced at all?
Parity is all well and good in theory, but there's some major drawbacks to it. Because our economies are tied so closely together and we've done nothing to change that over the course of the last 30 years, we end up suffering for their economic misery as well until they snap out of it or we find different trading partners to deal with who aren't so reliant on the green-back.
I admit, I like parity much better than our all-time low of $0.62 US, However:
If it cost a US firm $85.00 US to buy $100.00 CDN of forestry product when the Loonie was at $0.85 US, their cost has now gone up 15-18% just based on the exchange rate. In other words, the US forest products become more competative and the CDN products become too expensive. The only way that would change is if the Canadian business reduced their cost by 15%, but they can't because no one else in Canada is going to drop their prices for goods/services or basic nessessities to reflect what's more in line with US costs now, based on the higher value of the Loonie.
Alternatively, if a Canadian company has been using steel from hamilton, it may curb it's use of that steel and buy from an American company because the American product is now 15% less than it was in January.
Add to that, the fact that a number of things already cost more in Canada than they do in the US and suddenly the tourism industry suffers.
Lastly, with the very attractive prices being found south of the border and the dollar now at parity, Canadian business will suffer a hit to some degree from Canadian consumers because they can order goods in the states at (in some cases) 40% less than the exact same product in Canada.
My personal example is a lens I'm looking at getting. In the US it costs $830. In Canada, the exact same lens costs between $1220 and $1300. With the dollar at parity, that US price is irresistable and the Canadian business looses out. When the Loonie was at $0.85 US, the American retailer wasn't quite as attractive. And $400.00 extra to support a Candian company is a bit more of a pill than I'm willing to swallow when I'm working a p/t job on top of my day job to save up for this lens.
In spite of the better value of our dollar, notice how the cost of things hasn't been reduced at all?
Parity is all well and good in theory, but there's some major drawbacks to it. Because our economies are tied so closely together and we've done nothing to change that over the course of the last 30 years, we end up suffering for their economic misery as well until they snap out of it or we find different trading partners to deal with who aren't so reliant on the green-back.
Indeed you do. On both counts.
But think about how many Canadians work in industries that cater to the US market. Who do you think you sell all the oil and gas to? What would happen if that market got, say, 50% smaller due to the unequal currency?
What about all the auto workers in Ontario? Who do you think buys most of those cars? Or all the pharmecutical products I see here that are "made in Canada."
Its a global economy and like it or not, Canada's is a very small part of it. if it becomes too expensive for US companies to buy goods and services from Canada...
You are bent about ONE issue. Which I agree was manifestly absurd. But you got to look at things WAY bigger then just YOUR market.
But think about how many Canadians work in industries that cater to the US market. Who do you think you sell all the oil and gas to? What would happen if that market got, say, 50% smaller due to the unequal currency?
What about all the auto workers in Ontario? Who do you think buys most of those cars? Or all the pharmecutical products I see here that are "made in Canada."
Its a global economy and like it or not, Canada's is a very small part of it. if it becomes too expensive for US companies to buy goods and services from Canada...
You are bent about ONE issue. Which I agree was manifestly absurd. But you got to look at things WAY bigger then just YOUR market.
S
Maybe things don't cost more in Canada now, maybe it is just that the US was buying them for cheaper than they should have been. Maybe we were getting screwed LOL.
I agree for certain things it isn't good, but others it is. People will still travel. My parents said that they would not go to the states until the dollar was par but they did.....numerous times.
I agree for certain things it isn't good, but others it is. People will still travel. My parents said that they would not go to the states until the dollar was par but they did.....numerous times.
Actually Puck's statements go along with a bit of a debate we've had here(in my office 
)...
Our products are typically priced based on the US dollar being worth more.
Example a book that costs $5.99 US is $7.99 here.
Which is even wierder considered the book is probably printed on paper from Canadian trees but anyways...
So of course... now that the greenback and loonie are basically equal why does that same book still cost $7.99 instead of the price being lowered.
General consensus on that issue seems to be that somebody is getting rich.
At any rate, it's not likely to stay at parity to long... typical economist forcast is that it should be low to mid 90's. The booms have more to do with American economy falling on it's face and increased global interest in Canadian business which the market will eventually adjust for.
At any rate... the disadvantage is in export... however we now have more of an advantage on imports as any products we import.
Overall it's not a bad deal as other foriegn economies view the Canadian economy as stable and have started to invest more in interests here.
So while we'll likely see a slight decline in trade with the US... however if current econonomic growth in Canadian interests abroad continues we'll be able to make up that loss with other nations who previously didn't do as much business with Canada.
Overall... it's a double edged sword.
)...Our products are typically priced based on the US dollar being worth more.
Example a book that costs $5.99 US is $7.99 here.
Which is even wierder considered the book is probably printed on paper from Canadian trees but anyways...
So of course... now that the greenback and loonie are basically equal why does that same book still cost $7.99 instead of the price being lowered.
General consensus on that issue seems to be that somebody is getting rich.
At any rate, it's not likely to stay at parity to long... typical economist forcast is that it should be low to mid 90's. The booms have more to do with American economy falling on it's face and increased global interest in Canadian business which the market will eventually adjust for.
At any rate... the disadvantage is in export... however we now have more of an advantage on imports as any products we import.
Overall it's not a bad deal as other foriegn economies view the Canadian economy as stable and have started to invest more in interests here.
So while we'll likely see a slight decline in trade with the US... however if current econonomic growth in Canadian interests abroad continues we'll be able to make up that loss with other nations who previously didn't do as much business with Canada.
Overall... it's a double edged sword.
Andrew..... you aren't kidding about prices. I can definitely see how this will sting Canadian business'
You are right... they AREN'T going to lower prices one cent.
We got a stroller car seat combo here and it was $199.... just for giggles our last trip to Canada we checked the price of the SAME stroller car seat combo.... it was over $400. Now if your dollar were worth the same amount.... where would you buy it from? I am with you. I couldn't just overlook that $200+ difference just to support a Canadian business who in all reality is just ripping me off now.
You are right... they AREN'T going to lower prices one cent.
We got a stroller car seat combo here and it was $199.... just for giggles our last trip to Canada we checked the price of the SAME stroller car seat combo.... it was over $400. Now if your dollar were worth the same amount.... where would you buy it from? I am with you. I couldn't just overlook that $200+ difference just to support a Canadian business who in all reality is just ripping me off now.
Well I don't see it as an intentional rip off... however it would take time to adjust pricing etc to reflect the change in the dollar values... however by the time that change has taken place the dollar may not be close to parity anymore so people would then start loosing money until such times as pricing can be re-adjusted.
IMO we should adjust for a 0.90:1.00 market as it seems much more likely to stay around that range.
IMO we should adjust for a 0.90:1.00 market as it seems much more likely to stay around that range.
I am in Alaska and I'm fine with parity. Heck, we've used Canadian money at parity for YEARS. It's just silly not to.
Of course we wanted our better exchange rate when we went to Canada, heh. But around town here in Fairbanks a quarter is a quarter, whether it is Canadian or US, and the banks see it that way, too, and have for a long time.
Naturally we aren't talking WADS of Canadian cash rolling around my town, but people accept it in the low percentage that it naturally occurs.
This is just my "woman on the street" reaction. All the economic explaining aside, (and you all have some points), that's how I feel about it.
Of course we wanted our better exchange rate when we went to Canada, heh. But around town here in Fairbanks a quarter is a quarter, whether it is Canadian or US, and the banks see it that way, too, and have for a long time.
Naturally we aren't talking WADS of Canadian cash rolling around my town, but people accept it in the low percentage that it naturally occurs.
This is just my "woman on the street" reaction. All the economic explaining aside, (and you all have some points), that's how I feel about it.