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JimmyCracksCorn
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Macedonia - Sovereign country north of Greece.
Dec 2002
time: 05:18
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quote:
Originally posted by Wezil
?
Higher dollar, lower unemployment. I could use some more of that pain.
My sources were Bank of Canada and Stats Can. |
quote:
Trade surplus falls as soaring loonie hurts exports
Last Updated Wed, 10 Nov 2004 11:03:59 EST
OTTAWA - A soaring Canadian dollar helped drive down Canada's trade surplus in September, as exports declined sharply and imports edged up.
Statistics Canada said the merchandise trade surplus dropped by $1.4 billion to $5.1 billion in September. Exports fell 3.4 per cent from August to $36.1 billion. |
http://www.cbc.ca/story/business/na...ade_041110.html
Canada is still doing well because the higher dollar hasn't had time to have a real effect yet. But if this trend (above) continues, and there's no reason to believe it won't, there's going to be real trouble in Canada.
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DanS
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Kickball Capital of the World
Jan 1970
time: 00:18
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Looks like everybody is piling on. I have a lot more faith in the market to set the dollar value than the head of the IMF. I would not be averse to governments making sure the drop doesn't happen precipitously, of course. Here's something from the BBC. A little too breathless for my tastes.
quote:
IMF chief calls for dollar action
IMF managing director Rodrigo Rato
Rodrigo Rato says waiting for the markets could prove costly
The US needs to do more to reduce its deficits, the main engine driving the dollar to record lows, the head of the International Monetary Fund has said.
In an interview with the IMF's in-house magazine, Rodrigo Rato said the US could not rely on market forces alone to avoid a "traumatic situation".
The dollar has weakened sharply against most major currencies in recent weeks.
US Treasury Secretary John Snow backs a "strong dollar", but has said it is up to the markets to set its level.
In comments made in the UK earlier this week, Mr Snow made it clear that he saw slow European growth as a big part of the problem, driving up deficits by making the US the importer of last resort.
Bridging the gap
Mr Rato's interview appeared on the eve of the G20 meeting of major countries' finance ministers in Frankfurt, at which the weakness of the dollar and the spiralling US deficits are likely to take centre stage.
The finance ministers of Argentina, France, Japan, Russia and South Korea will not be present at the meeting because of domestic engagements, it emerged on Friday afternoon.
The markets are asking for a change of policy
Rodrigo Rato, IMF managing director
Mr Rato acknowledged that the reduction of the current account deficit - the gap between money coming in and going out of the US - was everybody's business.
And he agreed that Europe - and Japan - were failing to pull their weight.
But imbalances like that could not be fixed solely by the market, he insisted. That "could be much more costly and risky".
The US needed to take action itself, not least because there was a limit to how much other countries could continue to fill their coffers with dollars - the mechanism which allows both the current account deficit and the massive public budget deficit.
"The question is whether the build-up is sustainable, and there's growing evidence that (it) is very big and the markets are asking for a change of policy," Mr Rato said.
"I don't think it's a traumatic situation, but I do think a change in policy is needed to avoid getting into a traumatic situation."
US Federal Reserve chairman Alan Greenspan voiced his agreement on Friday.
"Current account deficits, even large ones, have been defused without significant consequences, but we cannot become complacent," he wrote in the text of a speech due to be delivered to the G20 conference on Friday evening.
US Treasury Secretary John Snow
Mr Snow says the dollar's slide is Europe's problem too
The budget deficit needed urgently to be reduced, he said.
"We hope this will be reflected in the new administration's policies as soon as possible."
Bigger bills
On Thursday evening, the US Congress passed a bill to keep funding the US's massive public debt.
The bill, which added $800bn to take the total debt allowable to $8.2 trillion.
The deficit currently stands at more than $400bn for 2004.
Republicans in Congress blamed the red ink on Democrat-backed spending, and said they were trying to protect benefits for older citizens.
Democrats, however, point to a 15% increase in discretionary spending over the life of the last Republican-controlled Congress, coupled with massive tax cuts.
Republicans, they said, were effectively passing on the responsibility for their spending to future generations.
"I want someone to explain to me how it can be moral for a father to stick his kids with his bills," said Representative Gene Taylor from Mississippi. |
Last edited by DanS on 20-11-2004 at 01:03
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JimmyCracksCorn
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Macedonia - Sovereign country north of Greece.
Dec 2002
time: 05:18
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quote:
Originally posted by Wezil
You are still missing my point. High dollar low unemployment happened before the tax/spend decades.
Yes, a dollar on par with the US with our current fiscal situation and economic policy would not be at all good (in fact it is extremely unlikely in any event...).
Government (the feds in particular) need to tax less and stop trying to be all things to all people. The womb to tomb nanny state costs us and it is disingenious to say it doesn't. I for one would like to pay the government less to wipe my ass at every turn.
If the federal Liberals stopping the yearly excessive taxation they deliberately engage in we could have some immediate tax relief. |
I'm afraid I'm still missing your point. What does taxation have to do with the fact that currently 80% of all Canadian exports go to the US?
A high loonie is making it so Americans aren't buying their 80% share, which means products aren't being sold, which means manufacturers are going to cut back on costs, which means less jobs for Canadians. There simply aren't enough Canadians to prop up the Canadian manufacturing sector in its current state. And non-American purchasers aren't going to come all the way to Canada to buy our excess goods when they could get them from China at a fraction of the cost.
All I'm saying is that a weak loonie coupled with the fact that the US is right at our border and willing to buy our stuff can only be a good thing for Canada. I'm not saying Canada can't adapt to a strong loonie, I'm just making the point that there will be alot of painful adjusting in the meanwhile.
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JimmyCracksCorn
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Macedonia - Sovereign country north of Greece.
Dec 2002
time: 05:18
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quote:
Originally posted by Ben Kenobi
True, which is why we need to improve our productivity in order to be able to retain our competitive advantages of location, and relationship. |
Americans will buy domestic (or from China at 1/10th the price) before the pay the same price, or even close to it, to get it from Canada.
Plus, Canada has a sales tax around 3x higher than in the US. With a high loonie, Canadian goods will never be a bargain.
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Tingkai
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To find the Northwest Passage
Aug 2001
time: 13:18
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quote:
Originally posted by Wezil
You are still missing my point. High dollar low unemployment happened before the tax/spend decades.
Yes, a dollar on par with the US with our current fiscal situation and economic policy would not be at all good (in fact it is extremely unlikely in any event...).
Government (the feds in particular) need to tax less and stop trying to be all things to all people. The womb to tomb nanny state costs us and it is disingenious to say it doesn't. I for one would like to pay the government less to wipe my ass at every turn.
If the federal Liberals stopping the yearly excessive taxation they deliberately engage in we could have some immediate tax relief. |
You need to look at the big picture.
Health care costs are lower in Canada than in the States.
Because of universal healthcare, Canadians are healthier which means less time lost to sick days.
Our social security system contributes to a lower crime rate which means less money lost to crime and less money needs to be spent on security.
The big question for you is what benefit would Canadians receive from having the Canadian dollar on par with the American dollar?
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19-11-2004 23:47
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