dan j
11-07-2007, 10:45 PM
We all know about the rapid rise of the CDN Dollar vs. the US$ in the last few months. Most of you probably know this is due to the US economy being unstable due to a fallout in the housing market. The US Fed Reserve has reacted and kept on cutting interest rates which make investments into the US economy, including the US$, unfavourable. At the same time, they're trying to promote spending by a large group of people who have no money to spend but can borrow cheap.
Over the past year, Canada has slowly increased interest rates even though they are still modest. This, plus rising oil prices and strong commodity prices in Canada have boosted our dollar even against other foreign currencies.
That said, even professional economic forecasters could not predict $1.10 by the middle of November. They were thinking $1.05 or $1.06 by the end of the year! Since a lot of political power lies in Ontario their Premiere, and others, have put strong pressure on the Bank of Canada to reverse its trend of slowly bringing up interest rates and wants to cut them. Our economy is hot and does not need a cut in interest rates. We have a lot of investors, domestic and foreign, who are counting on decent returns here in Canada and to slap them in the face with lower interest rates is just lame. Domestic borrowers, like ourselves, can easily afford to borrow at the current rates and even at a bit higher rates so there is no reason to lower these rates. It's working as is!
The problem I see is each of us "little people" are looking in the short-term and are seeing the false savings of buying in the US because of our new found spending power. This, more than anything, will hurt the Canadian economy. Now, more than ever, we need to buy Canadian and support our manufacturers at home because they need our business. In the end, a strong domestic market will make us even more favourable for domestic and foreign investment and will make the economy even hotter than it is. Buying Canadian will keep us going in the long run. Those silly little savings on complete junk you see at Mardens will come back and hurt us all. So, while you're doing your shopping this holiday season, stay on our side of the border and check to see if the product you're buying says Made in Canada. Every time you do this, you'll be helping yourself and all of us.
Over the past year, Canada has slowly increased interest rates even though they are still modest. This, plus rising oil prices and strong commodity prices in Canada have boosted our dollar even against other foreign currencies.
That said, even professional economic forecasters could not predict $1.10 by the middle of November. They were thinking $1.05 or $1.06 by the end of the year! Since a lot of political power lies in Ontario their Premiere, and others, have put strong pressure on the Bank of Canada to reverse its trend of slowly bringing up interest rates and wants to cut them. Our economy is hot and does not need a cut in interest rates. We have a lot of investors, domestic and foreign, who are counting on decent returns here in Canada and to slap them in the face with lower interest rates is just lame. Domestic borrowers, like ourselves, can easily afford to borrow at the current rates and even at a bit higher rates so there is no reason to lower these rates. It's working as is!
The problem I see is each of us "little people" are looking in the short-term and are seeing the false savings of buying in the US because of our new found spending power. This, more than anything, will hurt the Canadian economy. Now, more than ever, we need to buy Canadian and support our manufacturers at home because they need our business. In the end, a strong domestic market will make us even more favourable for domestic and foreign investment and will make the economy even hotter than it is. Buying Canadian will keep us going in the long run. Those silly little savings on complete junk you see at Mardens will come back and hurt us all. So, while you're doing your shopping this holiday season, stay on our side of the border and check to see if the product you're buying says Made in Canada. Every time you do this, you'll be helping yourself and all of us.