Canadian Economy Still Robust

http://www.cbc.ca/money/story/2008/07/17/bankcanada.html

I sure hope it holds true!!

shanaya wrote:http://www.cbc.ca/money/story/2008/07/17/bankcanada.html

I sure hope it holds true!!

I hope it does, too, Shawna.

I'd caution one thing...and it's very similar to what I face here in Mexico. The peso was at around 13:1 to the US dollar a few months ago. Now it's at around 10.25:1. That's over 20% improvement! But, (there's always a "but", right?) it's not because the peso is 20% stronger, it's because the dollar is WEAKER!

Remember a few months ago when the loony hit parity with the dollar, and then passed it up? Now, I'll grant you, the Canadian economy is MUCH healthier than the Mexican economy, but do you really believe that occurred simply because of improvement in the Canadian economy?

Happened around the same time, too. What a coinky-dink!

Now, jump forward a few weeks, or maybe a couple of months.....the dollar tanks! And when I say tanks, I mean it becomes so worthless, the only people you can GIVE it to are collectors! With the cross-border trade between the two countries, you KNOW that the loony will start to fall, and drastically, when that happens. It has to. It's no longer possible to compare it to the US dollar, it'll probably shift to the Euro or the Pound Sterling for exchange purposes. My semi-educated guess is that the loony will begin to stabilize at around 70-75% of its value today. So every hundred Canadian dollars today, will suddenly offer the buying power of 75 Canadian dollars. THAT'S gonna hurt a lot of people.

Sadly, I don't think we're talking about IF the US dollar tanks...

we're talking about WHEN.

Damn. It is true, though unfortunately. I guess there is no way or it is too late for the US to change things around? Can't they go back to the dollar vs. gold?

No way to do it! A good portion of the amount of gold it would take, to cover the paper currency we have printed, and in circulation today, is still in the ground, waiting to be found!