It may be a response to reduced job growth numbers in the US. In spite of what we like to think we are completely tied to the American economy.

The fluctuation doesn't seem to be of any great concern. With the current state of the markets being what they are. WE've sen it jump this much too in the past with no great cause. Its just "the market being the market" 🙂

We should be around the 85 cents on the american dollar anyways. So heres hoping for a gradual drop over the next couple of years to a more realistic rate. Of course...if the US can pick itself up out of that slump....

There has been the same fluctuation with the price of gold and the price of crude oil.

Somebody is fiddling with the markets, to suit their desires????

I don't want to start a pissing contest or war, but there is no way I will be convinced it is in our best interest to have an 85 cent dollar. Sorry, I don't buy it. Export based economy or not. Artificially suppressing the value of the dollar to keep the manufacturing industries happy........hmmmm. I wonder if that is best. With China manufacturing everything for Walmart and many others these days, the heyday of Canadian manufactures may have past. Not because the products are inferior, quite the opposite. Nobody wants to buy quality. The Americans included. So, until there is a paradigm shift from cheap to good, Canadian manufactures - no matter the value of our dollar, will be playing second fiddle to China for items sold in the USA. Not to mention that China can lower the value of its currency because it is a communist country that has absolute control. When the world currency crunch happens the US dollar will plummet, and if some idiot in Ottawa was to fix our dollar to be some many points less in value than the Greenback, it will be national suicide.

I will be quite frank, I have enjoyed the dollar at par, I have enjoyed ordering in gear from US suppliers that I cannot get here in Canuckland.

But my question remains the same, why or whom is screwing with our dollar all of a sudden??

Mountainman.

Hey gcmountainman. Good topic. In my opinion there are two or three factors at play here. The first confirms what you are saying. The Chinese are awash in cash and have been using some of it to buy American bonds as a way of keeping their Yuan low and the US dollar high. They hold 1 trillion dollars in US bonds, and all they would have to do is start dumping these bonds and the American economy would crash (a great weapon to hold over the head of the US if China wants to move against Taiwan).

On a second level China has stockpiled vast reserves of copper, and other commodities which in good times props up our dollar as we export these in quantity. Our dollar rose as copper, gold and oil prices rose. But now with the recession in Europe, and the slowdown recently reported in China and India these commodities have dropped dramatically in price and our dollar has fallen in lock step. Oil alone is down 15 dollars a barrel.

Then there is Flaherty's low interest policy. This has created a dangerous housing bubble and consumer credit card indebtedness unlike anything we have ever seen. Interest rates should be higher and the dollar would rise with the interest rates, but when this happens we will be plunged into recession. What a mess!!!

Not an expert in economics, but Australia is tied to China in the same way as Canada (exports), our dollar is up at the moment:-
http://au.finance.yahoo.com/q?s=AUDUSD=X (bouncing a bit)
yet businesses are retrenching workers and/or going belly up here. Food prices have jumped again. Even when the price per barrel of oil goes down our fuel prices don't change. Add to that the upcoming "carbon tax" to be implemented by the Aus Government come 1 July this year and thing's are not looking too good here either, yet our Government in it's wisdom also decided to put their hands into our pockets to prop up the Euro ($7 billion worth from memory)....why???
I hate commerce/economics.

Somebody is fiddling with the markets, to suit their desires????

I don't want to start a pissing contest or war, but there is no way I will be convinced it is in our best interest to have an 85 cent dollar. Sorry, I don't buy it. Export based economy or not. Artificially suppressing the value of the dollar to keep the manufacturing industries happy........hmmmm. I wonder if that is best. With China manufacturing everything for Walmart and many others these days, the heyday of Canadian manufactures may have past. Not because the products are inferior, quite the opposite. Nobody wants to buy quality. The Americans included. So, until there is a paradigm shift from cheap to good, Canadian manufactures - no matter the value of our dollar, will be playing second fiddle to China for items sold in the USA. Not to mention that China can lower the value of its currency because it is a communist country that has absolute control. When the world currency crunch happens the US dollar will plummet, and if some idiot in Ottawa was to fix our dollar to be some many points less in value than the Greenback, it will be national suicide.

I will be quite frank, I have enjoyed the dollar at par, I have enjoyed ordering in gear from US suppliers that I cannot get here in Canuckland.

But my question remains the same, why or whom is screwing with our dollar all of a sudden??

Mountainman.

I think we are talking the same thing. I don't believe we should be at 85 cents to prop up manufacturing. I believe our dollar is artificially high because of the weak american market right now. If you compare both our economies under "normal" (and I use that term very lightly...) we are simply not as big, as rich, or as productive as the american economic machine. That is all I meant. When the economic turmoil passes by (as it always does, it's been worse than this before and will happen again.) our dollar will return to a more realistic rate compared to the US. And this is around the 85 cent mark.

As for artificially inflating or deflating the dollar, I agree with you totally. Canada's dollar should be what it truly is. The Chinese have kept there currency artificially low to benefit from manufacturing, which is what developing countries do. It bounces them up significantly. They will not be able to keep this up indefinitely as there economy will simply be the largest in the world by 2020. (I think it's 2020 or 2030.)

Manufacturing in Canada, specifically Ontario is going the way of the dinosaur. It has to. The same thing happend in the UK 20 years ago under Thatcher. It was a difficult transition but they made it. We can't continue to pay people $40/hour to screw nuts onto bolts. There will always be some manufacturing, but it can no longer be a large part of the economy as countries like India, China, and the entire pacific rim simply can do it cheaper. Those people who have no applicable skills and little/no education that held these jobs may still find something in mining or resources, but the days of large auto plants, assembly lines are largely over. As legislation has largely favoured organized labour and unions in the last 50 years there numbers are still decreasing in the private sector simply because the economy doesn't lie or take sides. It is what it is.

Then there is Flaherty's low interest policy. This has created a dangerous housing bubble and consumer credit card indebtedness unlike anything we have ever seen. Interest rates should be higher and the dollar would rise with the interest rates, but when this happens we will be plunged into recession. What a mess!!!

This doesn't make any sense at all.....its like we are taking the recent recession and its results and trying to blame it on the gov't of the last 3 years?

The housing bubble is largely centred in Canada's three biggest cities. And there is a lot of talk that the bubble simply won't happen/doesn't exist. The two real estata agents I deal with say they've been hearing the sky is falling for about 11 years now....since the last recession....they see Toronto, Vancouver and Mtl. will have a market readjustment but there will be no huge collapse. But of course...that doesn't make for good headlines int he newspapers to sell em... 🙂

Credit card indebtedness is more a personal responsibility and not tied to the current lending rate by the Bank of Canada. I think a lot of spoiled North Americans are now getting a dose of reality and hopefully learn a tough lesson about credit cards, interest, etc.

Make no doubt about it...when we truly recover from this recession, interest rates will rise. And wow...watch out. The gov't will be looking to recoup there money from all the spending during the recession......to raise them now would be silly, but everyone knows they are gonna jump when the economy is richer and more stable...

I hate economics too. The false economy I hate the most. For example, if I were to bet at the dog races and win, my winnings a I would be happy. But, because I bet at the dog races does not effect the prices to buy a dog. So, how can the stock trade or worse the commodity speculators affect the real economy?? This such BS. If I think the price of sugar beets will be higher in the Autumn than in the spring and I wager $1M to put my money where my mouth is, and in the Autumn I am wrong guess what I lose my money. So sad, too bad. So, how does some idiot in a suit, who speculates on the prices of commodities have any power over the real economy?? They should not. The false economy should be able to make their bets and either win or lose, separate from the real world. We in the real world should not be dragged around by our hair because the price of soya beans went down 1 point not up 3. Most folks would be able to accept rising prices for things if and only if the price was devised by: cost of materials + cost of labour + modest profit margin = price. Folks get really cranky when the price is devised by: cost of materials (+ mark-up) + cost of labour (+ kick backs) + Heavy Profit Margin + Whatever the Markets are doing this day/week/month = Price Increase.

As for indebtedness, if the government encourages the banks to go easy the handing out of money and the banks extend more credit than an individual can ever repay and the individual uses their credit because they have a good job so they can make their payments, all is well, right?? Yes, lack of discipline on the part of the individual is bad. But easy money from the government or the banks; is a method of enslaving the masses with debt. It is about controlling large numbers of people. Enslaved people go to work and pay their bills and do not have time to protest or cause problems. Good sheeple.

Someday, the time of reckoning will arrive and the balance sheets will be inspected. Those who have taken advantages of the masses for their own personal gain will be held accountable and removed from their office. We can only hope that day of enlightenment arrives sooner than later.

Just to confirm my position, I hate economics - the falsehoods, the lies, the back rooms deals.

Mountainman.

Spain is to get up to 100bn euros ($125bn; £80bn) in loans from eurozone funds What will that do to our $?

ICRCC,

The Euro-scene is getting unpleasant for sure. I can only hope the IMF is a casualty in this one. Those bloodsuckers deserve a public linching. The International Monetary Fund (IMF) serves no one but themselves. They are greedy beyond measure. They work at financial enslavement of the world. They have no morals or ethics. May the IMF fall!!

Did I mention how I hated economics??

Mountainman.

Mountainman, you must be familiar with Zeitgeist Addendam (focusing on the monetary system's manipulation) and the entire 'Zeitgeist series' http://www.zeitgeistmovie.com/ - you can watch it online. Everyone should - you won't feel the same afterwards.....

Howdy PrepHer,

Yes I have watched 3 of the Zeitgeist shows. I liked the information presented on what causes our problems, but I am not so convinced on the solution they offer. I am not sure I am ready for that.

Yes, every person capable of independent thought should watch the Zeitgeist movies. Each person should decide for themselves what is "true".

Mountainman.

We are set up for phase 2 of the collaspe. A US real estate agent tells me the following.

The Agencys are getting ready to go after the next set of homes the 600k and up homes. This will start soon and already has, there are thousands of home sitting empty?., and people are living on the streets why?. what's the plan. Canada is a an ass for the states and we have been used many times. Our $ revolves around the us $ why. It's our own fault our politicians are a joke,. our $ IS WHAT THE US WANTS IT TO BE .