According to the Associated Press the U.S. Dollar and the Canadian Dollar have reached parity for the first time since 1976, although Google is currently claiming that the ratio is 1 Canadian dollar = 0.987069 U.S. dollars. Fun!
Congratulations, Canada. Please come and spend your valuable dollars in our many fine retail locations.
Canadian dollar equals U.S. dollar for first time since 1976 [AP]
(Photo:AP)
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“There was a time in the 19th century when the strength of sterling reflected Britain’s unparalleled prosperity and imperial power. But since the deregulation of currencies and financial markets in the 1980s and 1990s, currency strength has conveyed almost no information about the health of a national economy – and none at all about a country’s competitive position in global trade. For example, anyone who believes that the falling dollar reflects America’s huge trade deficit and foreign borrowing should consider that the one leading currency even weaker in the past three years than the dollar has been the yen; yet Japan has the world’s biggest trade surplus and is the greatest creditor nation the world has ever seen.” – [www.timesonline.co.uk]
by next year our dollar will equal the ethiopian dollar
@guymandude: Well aren’t you a rude hot-tempered little conspiracy theorist.
How is a dollar still not a dollar here in America? Granted I don’t go skipping around the globe anytime soon, why am I an idiot for being content with the way things are? This has not affected me at all, and that was my personal take on it, that’s all.
@guymandude:
What’s wrong with what he said? I think he’s more right than you know.
As of yesterday the U.S. dollar was worth just less than the Canadian one. An older article I found says the Canadian dollar has been rising because it’s tied to the cost per barrel of oil.
I care because once a month my husband has to pay loans in Canada. Guess who’s now screwed?
@timmus: IAWTC
@Jesse in Japan: It’ll get there. The dollar is dropping against the Yen too. I believe yesterday it was at 116. Today it’s at 115.
@dshjyd: Those little things – I think they’re called “treasury bills” – also slightly impact the currency balance. Slightly. I think – not too sure on this, since we had such a huge budget surplus when Clinton left office that it seems unlikely – that a (hypothetical) budget deficit might also affect trade. Hypothetically.
@mookiemookie: good copy/paste. Here’s another: Asian debt crisis.
@Yourhero88: Whoa, there’s just so much that’s uneducated about your line of argument. Give it up. Wiki “balance of trade” for starters.
@trai_dep:
I’m not sure what you’re trying to say. Are you confusing budget deficit with trade deficit?
And while we’re on the topic of budget surplus, do you think that it’s a good thing? Economically, a budget surplus indicates that the economy is ballooning too rapidly and the government is cutting back spending purposely to slow it down. Remember the dot-com bust?
@xredgambit: Lest we forget US LOST every war fought against Canada.
I wouldn’t read too much into this. As other commenters have mentioned, there are 2 sides to the coin. Higher dollar means cheaper imports, lower dollar means cheaper exports.
Next time you hear Bush or some other “Republican” stooge claim that “the economy’s doin’ real good”, remind them of this. Bush’s foreign policy and the idiots who have blindly supported him have so damaged our reputation in the international community that the world has lost confidence in the US. So, not only has Bush’s war killed more Americans than Bin Laden did, but it’s also done far more economic damage than 9/11 as well.
Also, the US dollar just reached an all time low against the Euro.
Write your representatives. Without holding Bush and his cronies accountable for their crimes and malfeasance we will be unable to restore our county’s reputation.
ebay, here i come!
@dshjyd: The strength of a currency is primarily dictated by a nation’s currency balance. Too much of your currency in the coffers of other nations is problematic. Trade deficits and budget deficits are the primary ingredients of a nation’s currency balance, which impact the exchange rate. In both cases, dollars sit outside our country that at some point, have to be swapped out.
You were looking at trade balances, which is good. But it’s only half the picture of how badly the Republicans have sodomized our economy.
Regards your mentioning surpluses, they’re very necessary if you anticipate large budget outflows. Such as Social Security payments paired with a shrinking workforce to pay for them. Or spending $600B to date – and anticipated costs of $3 TRILLION – to turn the Middle East into a Stygian hell-hole. THAT’S why it was such a big deal (and notable accomplishent) to get the surpluses built up when the Dems had a say in our economy. You know, when adults were in charge.
Lacking a surplus, the only way to pay for these big ticket items is to boost M2 (inflation) or to borrow (cash outflows in form of interest). Neither of which is rational or in our national interest.
For those curious about some of the terms/concepts that have come out in this thread, a good intro is a wiki on money supply: [en.wikipedia.org]
I care because the weak dollar makes it too darn expensive for me to visit my sister in Ireland.
Also it just seems so wrong for the Loonie to be worth the same as a greenback! Also Canadians are probably getting screwed on book prices since I bet they don’t equalize them.
american corporate to do list:
(1) stab anyone and everyone in the back to work your way through the ranks, to get that executive job.
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(2) form alliances with other greedy bastards in politics and business.
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(3) create “checks and balances” to make sure you can fuck anyone harder than they can fuck you (note: get lawyers, accountants, lots of ‘em).
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(4) work your way into top executive positions through contacts and get iron-clad contract(s), with insane bonuses.
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(5) kill company and move onto the next one for new and bigger bonuses.
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(6) get stinking rich and enjoy, because we all know “he who dies with the most toys wins”.
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(7) step and repeat, till there’s nothing left to rape.
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note: be prepared to have exit strategy, in case the mob rebels.
If only Americans could refine civilian Iraqi blood as fuel they’d be back on top baby!
Also, in the words of Nelson Munce:
“HA HA”
@Yourhero88: A dollar is not a dollar anymore since you can’t buy a 2 litre bottle of Coke for a dollar any more. A Quarter is not a Quarter anymore when it now cost 35 cents to buy a small pack of wrigleys big red or wintergreen. A dollar is not a dollar when it cannot buy the same amount of an item that it once use to buy, a.k.a. when it loses its purchasing power.
I’m curious, how many of you have really studied economics? Many of the comments I’m reading show that either logically you don’t understand the argument or you don’t understand what fiscal policy is.
First of all @cde:
He’s not saying there’s no inflation. What he means is that although the dollar is weaker, there are no significant lifestyle changes a majority of Americans IN THE USA have had to make as a result of it.
@trai_dep:
With the argument you’re making, I hope you understand and have studied fiscal policy. Wikipedia will not make you an expert. So let me start by saying government spending (budgets) is one of many tools of fiscal policy. So it is controlled. In an effort to expand our economy, we are currently experiencing expansionary fiscal policy, meaning the government is spending more money to increase cash flow into the economy. This includes going into debt, so that it can increase cash flow even further. Our economy grows and when it reaches a desired/optimal level, at which point we want growth to slow down, contractionary fiscal policy is enacted. In effect, spending (among many other elements of fiscal policy) is decreased and debt goes down.
And oh please, we need surpluses to fund Social Security? That’s the dumbest thing I ever heard. When we had a surplus, it was because Clinton or his economic adviser knew that the economy was growing to quickly and that it would lead to a recession. AGAIN ON THE TOPIC OF FISCAL POLICY, THEY (CLINTON) CUT BACK SPENDING TO SLOW DOWN ECONOMIC GROWTH, RESULTING IN A SURPLUS. THE SURPLUS IN FACT WAS AN INDICATOR OF TROUBLES TO COME. AGAIN THE DOT COM BUST. THIS IS THE SAME FISCAL POLICY THAT IS STILL IN ACTION.
“Too much of your currency in the coffers of other nations is problematic.” I’m not even sure what your argument is about this, but please tell me how it relates to a weakening dollar. If you’re so concerned about the value of our currency, it’s in fact a good thing to have more currency abroad because it shows people still have faith in our economy.
Please before I respond, make an effort to fully read and understand what I wrote, or else I’ll be going in circles. I think an intro to macro will debunk much of what you said.
Wiki isn’t perfect, but it’s not entirely practical to send anyone here interested in learning more my grad-level currency markets textbook, is it? But it IS a start.
Deficit spending only makes economic sense when a country is borrowing to improve their economy. Giving Paris Hilton a bigger tax cut or dropping trillions of unaccounted dollars from a plane flying over Baghdad doesn’t quite pass this test. If the Republicans were investing in infrastructure, education or efficient emerging sectors, one could make that argument. But you read newspapers, and you know it’s quite the opposite. They’ve sodomized these areas too.
However, what I’m talking about isn’t the US economy, since it’s off topic. I’m talking about why capital markets are selling USD and buying Euros or the Loonie. And for this, net in- and outflows of capital – whether due to trade balances or bonds – are the key drivers here. A tertiary one is the market’s expected value of the USD in the mid- to long-term future. Which, because of the above, also doesn’t help the USD.
3 for 3, Republicans have reversed significant gains made in the ’90s. Not because of some overarching strategy, consistent and well thought out. But because of bungling, ignorance, incompetence and cronysim. That’s what’s truly sad.
But they can’t help it. It’s their core philosophy, their nature. Expecting them to run a gov’t competently is like asking a scorpion not to use its stinger.
If you don’t understand that double-edged sword that foreign currency reserves represent – and why, I suggest you take a course beyond Econ 101. Capital markets are a strange beast. But I’m not here to school you. Suffice to say that the capital markets are generous to those that run their economy well and are rapacious to those that don’t. And they don’t rely on Fox News’ spin for their info. Guess from which, to which category we’ve moved to in the last six years?
“What he means is that although the dollar is weaker, there are no significant lifestyle changes a majority of Americans IN THE USA have had to make as a result of it.”
If you think that a collapsing dollar has no impact to the majority of US citizens, you really need to take some upper division econ courses. No offense. Simple truth.