High US dollar is not god for Canada on the long run is going to Hurt to Canadian economy.It will hurt the manufacturing industry big time. What is more scary is a weak US dollar could be signs of US recesion. Don't get excited , if the Canadian dollar it's strong is only due to economic hardships in the US devaluing their currency (and not the Canadian dollar gaining value on it's own merit), just think what would happen when those hardships get us.....
-- Edited by God at 13:06, 2007-11-08
they had an article about this this morning on the paper.....they are going to do something to help all the companies here in canada, i hope they do it soon.
~X
The conservatives did it already but is not enough...the dropped Taxes to boost the economy ..but is not enough. Since we are in a FREE market there is not regulation on the market prices.
the paper said they where going to get together soon so maybe is something else, and that was todays news paper.
High US dollar is not god for Canada on the long run is going to Hurt to Canadian economy.It will hurt the manufacturing industry big time. What is more scary is a weak US dollar could be signs of US recesion. Don't get excited , if the Canadian dollar it's strong is only due to economic hardships in the US devaluing their currency (and not the Canadian dollar gaining value on it's own merit), just think what would happen when those hardships get us.....
-- Edited by God at 13:06, 2007-11-08
they had an article about this this morning on the paper.....they are going to do something to help all the companies here in canada, i hope they do it soon.
~X
The conservatives did it already but is not enough...the dropped Taxes to boost the economy ..but is not enough. Since we are in a FREE market there is not regulation on the market prices.
High US dollar is not god for Canada on the long run is going to Hurt to Canadian economy.It will hurt the manufacturing industry big time. What is more scary is a weak US dollar could be signs of US recesion. Don't get excited , if the Canadian dollar it's strong is only due to economic hardships in the US devaluing their currency (and not the Canadian dollar gaining value on it's own merit), just think what would happen when those hardships get us.....
-- Edited by God at 13:06, 2007-11-08
they had an article about this this morning on the paper.....they are going to do something to help all the companies here in canada, i hope they do it soon.
High US dollar is not god for Canada on the long run is going to Hurt to Canadian economy.It will hurt the manufacturing industry big time. What is more scary is a weak US dollar could be signs of US recesion. Don't get excited , if the Canadian dollar it's strong is only due to economic hardships in the US devaluing their currency (and not the Canadian dollar gaining value on it's own merit), just think what would happen when those hardships get us.....
The loonie had a bumpy ride yesterday, rising above $1.10 US at one point only to plunge later in the day to close below $1.08 when official trading ended in Toronto.
The loonies spectacular ascent in the morning was fuelled in part by a report that China may want to diversify its foreign currency stockpiles away from the U.S. greenback, triggering a selloff of the American dollar.
But the loonie, which has been bolstered all year by global demand for Canadas resources and its resource companies, appeared to be running out of gas later. It ended the trading day in Toronto at 107.75 cents US, which was still well above a record high that was broken less than a week ago.
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Not everything I post or say on foro are necesarily true facts. <- THAT is a fact! :blankstare:
Loonie hovers just under US$1.08 By THE CANADIAN PRESS
OTTAWA - There was little action for the Canadian dollar Thursday morning after the loonie made some wild moves on Wednesday.
The dollar was down 0.04 of a cent to 107.71 cents US at mid-morning.
On Wednesday, a selloff in the U.S. dollar initially sent the loonie surging across the 110-cent US level before settling down a bit over three quarters of a cent.
On Thursday, the U.S. dollar was mixed against other currencies after the European Central Bank and the Bank of England left interest rates unchanged.
But analysts warn the greenback is still highly volatile.
The slight dip in the Canadian dollar came amidst higher oil and gold prices.
The December crude contract on the New York Mercantile Exchange up 91 cents to US$97.28 a barrel.
The December bullion contract on the Nymex gained $5.60 to US$839.10 an ounce.
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Not everything I post or say on foro are necesarily true facts. <- THAT is a fact! :blankstare:
so this means that this should be hitting negatively the amount of tourists we get from the states, as well as american companies leaving canada for a more affordable economy as it will get more expensive to manufacture things here, such as movies, cars, etc etc etc.... this will be interesting, I am not an economist but everytime the dollar rises we go into a recession...what do you guys think?
CREDIT: Mikael Kjellstrom, CanWest News Service File PhotoFrank Mersch, chairman of Front Street Capital, says growing demand for resources from India and particularly China should push our dollar higher, but food-price inflation is a concern.
The loonie should hit US$1.05 within a few weeks, says Frank Mersch and could pass US$1.10 if the price of oil breaks US$100. Canada will continue to benefit from China's voracious appetite for resources but the celebrated hedge fund manager also warns of inflation, particularly of food prices.
Mersch, chairman and vice president of Front Street Capital, made a rare public appearance on Tuesday night at the Granite Club in Toronto. Unlike during his heyday at Altamira Investment Services Inc.,Mersch rarely speaks to the press these days.
Former Altamira colleague Francis D'Andrade persuaded Mersch to give a talk to clients of DOT Integrated Financial. Mersch spoke off the cuff for an hour. As the edited transcript of an interview that ran at www.financialpost.com yesterday made clear, Mersch believes Canada is still in the sweet spot of the commodity cycle. "China is a driver. Canada is a beneficiary" of rising demand for commodities like fertilizer and potash.
By contrast, "the U.S. is not the driver of this cycle," he told the audience. "The key driver for this cycle is the industrialization of China and subsequently India." He described this phenomenon as being "ten times" as large as the Marshall Plan to reconstruct Europe and Japan after World War II.
Four years ago, China was the world's seventh-largest economy. Today's it's third and will be second in three or four years, Mersch predicts.
"As China continues to expand and provide further growth to the global economy it is using up all the resources of the world."
Mersch warned the first signs of food price inflation are already beginning to show up; raw food prices are up 25% the last year, he said. In China, the price of pork has risen 30% in three months. "We are creating inflation pressures that could come home to roost."
Cheap Chinese goods have been deflationary but those prices can't continue to fall much longer. The world is approaching an "inflexion point" where the price of Chinese goods will rise along with the price of materials like steel or feed. Nor will China's cheap labour continue indefinitely. "We're already seeing wage inflation in China. They're using Viet Nam and other Asian areas to procure cheap labour."
Front Street believes commodity and food prices will go higher. When wheat is at $9/bushel someone has to pass those costs along, Mersh said. He expects corn to hit $12/bushel and "probably" $16. "We are taxing the world's resources and water will be one of the biggest issues."
The U.S. federal reserve may claim to be concerned about cyclical or secular inflation but Mersch said the Fed "buckled" on Tuesday when it lowered interest rates and more significantly the open window rate by 50 basis points. "They bailed out rich Wall Street guys."
Mersch is surprised by the complacency of a market that was up even after a run on two British banks. He describes the U.S. energy policy as "a joke." While the Bush administration frets about Iran's attempt to build a nuclear facility ostensibly for energy purposes, "China is building 33 nuclear reactors and no one says a word, and they have a billion people in their military."
He predicts that in our lifetimes, the U.S. dollar will "no longer be the reserve currency of the world." Investors should be thinking baskets of Euros and Singapore, Canadian and Australian dollars instead of putting all their investments in the U.S.
The forestry industry has been hurt by the rising loonie but Mersch predicts there will be a "wonderful lumber cycle in two or three years."
Asked in a question-and-answer session where the TSX will be at year-end, Mersch replied "I have no idea. I was hoping it would be negative this year. It's been pretty good for five years and I think something will come out of left field: a black swan raising its wings." Key drivers will be oil reaching US$90 or nickel at $15 or $17/pound.
Canadians can participate in the China boom by staying right here in Canada. Mersch said there are four or five medium-to-small-cap Chinese companies listing on the TSX.
"They're using our markets to raise money but they are 100% Chinese companies. You get your China play with Canadian regulations and Canadian accounting and some Canadian directors. You don't have to worry about country risk or accounting risk."
Asked when Front Street would start to diversify outside Canada, Mersch said he's never had much foreign content or bonds in his portfolios the last 25 years. However, "there will be a time when we have to exit Canada; maybe when the loonie reaches US$1.10 or US$1.15."
Don't get excited , if the Canadian dollar it's strong is only due to economic hardships in the US devaluing their currency (and not the Canadian dollar gaining value on it's own merit), just think what would happen when those hardships get us.....
