The Loonie worth more than the Green Back..

[AlpineK]

The is worth more than anything else.

[Dechristo]

---from Christian Science Monitor 12/4/07

The United States gains geopolitical power and prestige from the dollar's position, as the British did when the pound sterling reigned. It means convenience for US exporters and travelers and more business for US banks. It also makes it easier — some might say too easy — for the US to run up huge debts with the rest of the world, denominated in its own currency at low interest rates.

 

Those debts would be the US trade deficit, which is currently running at a pace of $533 billion a year.

 

"The willingness of Asians and others to continue financing the US current account deficit in the future is certainly related to the dollar's continued role as premier international reserve currency," concludes a National Bureau of Economics Research paper by economists Menzie Chinn of the University of Wisconsin and Jeffrey Frankel of Harvard University.

 

Lately, however, the dollar hasn't been looking so luxe. It's been gradually declining in value against other strong currencies for some five years; in the past few weeks, that slide has threatened to become a plummet. Since August, the dollar has slid about 6.6 percent against the euro. It has declined some 4.7 percent against the yen....This drop is partly caused by international concern about the mortgage mess in the US and what it may mean for US and world economies. But the dollar's past success and the huge US trade deficit are also part of the problem.

 

There is a vast trove of dollars stored in vaults around the world. If, say, China tires of watching its dollars become less valuable by the day and decides to trade a large amount for euros, the flood of currency into the market could depress the dollar's value further. This might lead to more dollar dumping and price decline, leading to ... well, you get the idea.

 

...In the short run, the greenback's status is unlikely to be threatened. Too much of the financial world is accustomed to dealing in dollars. Too many computer systems are set to deal with dollar pricing. Too many professionals have invested their careers in following it.

 

"There is a tremendous amount of inertia when it comes to what we use as medium of exchange," says Mr. Silber.

 

In the medium term, if the US continues to run huge trade deficits by buying up OPEC oil and Chinese manufactured goods without increasing exports in return, world bankers may think seriously about their options. Enter the euro.

 

Sounds like the prologue to a play about the story of a common Western currency.

[ClimbingPanther]

my heart skips a beat every time I find a Canadian penny!

[tvashtarkatena]

Many places in Canuckia have dropped calculating the exchange rate when you pay in greenbacks, so you make, like, 1.5 cents on every dollar you spend. It's awesome. Got git some.

 

 

[G-spotter]

---from Christian Science Monitor 12/4/07

The United States gains geopolitical power and prestige from the dollar's position, as the British did when the pound sterling reigned. It means convenience for US exporters and travelers and more business for US banks. It also makes it easier — some might say too easy — for the US to run up huge debts with the rest of the world, denominated in its own currency at low interest rates.

 

Those debts would be the US trade deficit, which is currently running at a pace of $533 billion a year.

 

"The willingness of Asians and others to continue financing the US current account deficit in the future is certainly related to the dollar's continued role as premier international reserve currency," concludes a National Bureau of Economics Research paper by economists Menzie Chinn of the University of Wisconsin and Jeffrey Frankel of Harvard University.

 

Lately, however, the dollar hasn't been looking so luxe. It's been gradually declining in value against other strong currencies for some five years; in the past few weeks, that slide has threatened to become a plummet. Since August, the dollar has slid about 6.6 percent against the euro. It has declined some 4.7 percent against the yen....This drop is partly caused by international concern about the mortgage mess in the US and what it may mean for US and world economies. But the dollar's past success and the huge US trade deficit are also part of the problem.

 

There is a vast trove of dollars stored in vaults around the world. If, say, China tires of watching its dollars become less valuable by the day and decides to trade a large amount for euros, the flood of currency into the market could depress the dollar's value further. This might lead to more dollar dumping and price decline, leading to ... well, you get the idea.

 

...In the short run, the greenback's status is unlikely to be threatened. Too much of the financial world is accustomed to dealing in dollars. Too many computer systems are set to deal with dollar pricing. Too many professionals have invested their careers in following it.

 

"There is a tremendous amount of inertia when it comes to what we use as medium of exchange," says Mr. Silber.

 

In the medium term, if the US continues to run huge trade deficits by buying up OPEC oil and Chinese manufactured goods without increasing exports in return, world bankers may think seriously about their options. Enter the euro.

 

Sounds like the prologue to a play about the story of a common Western currency.

 

With the US dollar in freefall, a common Western currency would just amount to a more formal subsidation of the floundering US economy by the rest of the developed world. Good luck with that...

[archenemy]

Yeah, cuz these things are never cyclical.

[joblo7]

i'm in hz peru and here its 15% lower than 3 years ago..

[G-spotter]

Yeah, cuz these things are never cyclical.

 

Sunspots are cyclical; economies fluctuate in reponse to numerous signals, including government policies like running a huge debt to finance a vanity war

[sirwoofalot]

the loony is now at .9909.

 

[tvashtarkatena]

Spraying about the American economy tanking from Canada is like laughing at the Titanic sinking from a lifeboat chained to its hull. As we go, so shall thee, brother.

 

Good luck with that.

[JayB]

Well put. Rare point of agreement duly noted.

[prole]

From-- Telegraph 12/11/07

Note that Goldman Sachs, Morgan Stanley, and Lehman Brothers, have all begun to tear up the "decoupling" manual. - the pre-crunch script assuring us that the world could get along fine as the US buckled.

 

"What began as a U.S.-specific shock is morphing into a global shock," said Peter Berezin, a Goldman Sachs strategist.

 

"There is a clear risk that some of the hot housing markets in Europe and some emerging markets will cool dramatically," he said...

[Hugh Conway]

Come, come, as the rising loonie cripples Canadian exports the slow transformation of Canada from US vassal to petro state will be pleasurable to watch.

[tvashtarkatena]

See? This is what happens when you put a drunk frat boy in the driver's seat of the Armada. Everybody gets a piece of the action.

[sirwoofalot]

My dear boys and girls we need a little history less here.

this is not the first time nor will it be the last time the looney is stroger, or as it is today at par, with the USD.

I remember back in the 80's, well I think it was about then the dollar was tanking against all currencies. It was bellow 100 JPY. (today it is 110 and in the past few weeks as low as 107)

 

Then we had the Aisan flew. does anyone remember that? A complete melt down of almost all of the asian currencies. Thank you China for holding firm and not devalueing thier currency as well.

 

The green back grew in strength.

 

Now investors feel better about investing in emerging markets again so they are selling off their dollars betting on a bigger pay day out of these other markets.

 

Yeah the dollar is weak today. It will turn around and get stronger shortly. In the mean time sell raw materials over seas as you now have the competative advantage to do so. Soon enough the dollar will streangthen and it will be time to imporot again.

Edited December 12, 2007 by sirwoofalot

[hafilax]

I think a lot of the greenback's future rests on the next election and the perceived stability of the government.

[TREETOAD]

What goes up....

It is only a matter of time... it is bizzare to see what does affect the ups and downs of any currency.

[prole]

Yeah the dollar is weak today. It will turn around and get stronger shortly. In the mean time sell raw materials over seas as you now have the competative advantage to do so. Soon enough the dollar will streangthen and it will be time to imporot again.

 

Oh well.

October Trade Gap Widens, November Import Prices Jump

December 12, 2007

NEW YORK (Reuters) - The U.S. trade deficit widened slightly more than expected in October as a record price for imported oil outweighed the export-spurring benefits of a weaker dollar, a Commerce Department report showed on Wednesday...

The report was more proof that a weak dollar and stronger growth overseas are boosting U.S. exports of goods and services, which rose for an eighth consecutive month to a record $141.7 billion.

During October, the trade-weighted dollar dollar fell 1.54 percent.

Financial markets showed little reaction to the data.--from NYT 12/12/07

[Serenity]

I've already canceled two vacations that were tied into Canadian adventure travel (bummer for me). This is bad for Canadian tourism industry, of which British Columbia has a heavy stake in. So why are you gloating?

 

The value of the Euro dollar might look great on paper, but when you spend some time in western Europe, and see what high prices they pay for everything, it tends to make our devalued dollar spent back home look pretty sweet.

 

We're doing fine, and will continue to be fine for many years to come.

[jmace]

I've already canceled two vacations that were tied into Canadian adventure travel (bummer for me). This is bad for Canadian tourism industry, of which British Columbia has a heavy stake in. So why are you gloating?

 

Cause ive made 2 extra vacation plans..and you know how many more Euro's are coming here now..ever been to Whistler? dont think the tourism industry has too much to worry about

 

[Hugh Conway]

Cause ive made 2 extra vacation plans..and you know how many more Euro's are coming here now..ever been to Whistler? dont think the tourism industry has too much to worry about

 

Since the Canadian dollar is rising vs. the Euro as well me thinks you are a retard.

[tvashtarkatena]

Canada's got the goods alpine-wise, and right in our back yard. It's the greatest backcountry paradise in the world. The alternative for us northwesterners is to spring for a plane ticket; usually the much more expensive and complicated option.

 

Having just got back from the great north, we found that the tab for a lowball road trip to climb in Canada is still as cheap or cheaper than the same trip would be in the U.S.

 

 

[hafilax]

Although tourism and exports are suffering as well as the movie industry the strength of the dollar shows that the rest of the Canadian economy is doing well in spite of all that.

 

We have a centralized banking system that allows for greater control over the value of the dollar. The Bank of Canada can make a slight change in interest rates and the amount of currency in print which can easily drop the value of the dollar. They have shown no intentions of doing that soon even though it has been requested by all of the export industries.

 

I wouldn't say that the US is fine and will continue to be fine. There are some incredibly difficult times ahead with Iraq that will have lasting effects on the world. I think the only way the US will get out of it is if they're bailed out by the UN. I'm still hopeful though since we are inextricably tied to the States.

[JayB]

Value-wise, Crystal at $58 doleros and 2H closer beats Whistler at Loonie-Dolero parity.

[archenemy]

You Canucks are so greedy. All you think about is money.