Most of the appreciation is due to strength of the natural resources, all denominated in U.S. dollars. Although the natural resource sector is doing well, this is killing the Canadian manufacturing sector, for whom a weak dollar acts as a crutch for labor inflexibility and higher taxes.
Long term, the ecnonomic fundamentals for the Canadian dollar is downward, especially when you consider the demographic fiscal crunch of all the baby boomers retiring, using up even more government resources via an unsustainable health care system that is sucking up currently in excess of 40% of all provincial government spending.
The Aussie dollar is on its way up too - 88.8 US cents!
ReplyDelete>Canandians maybe should be looking to buy US assets with their newfound purchasing power.
ReplyDeleteGuess what?
http://biz.yahoo.com/rb/071002/tdbank_commerce.html?.v=14
Feels so damn good. :P
ReplyDeleteThanks Bush! :P
In actuality Canada should be thanking Alberta...for its oil...
But you will never hear Ontario thanking anyone but themselves.
-Brad
Most of the appreciation is due to strength of the natural resources, all denominated in U.S. dollars. Although the natural resource sector is doing well, this is killing the Canadian manufacturing sector, for whom a weak dollar acts as a crutch for labor inflexibility and higher taxes.
ReplyDeleteLong term, the ecnonomic fundamentals for the Canadian dollar is downward, especially when you consider the demographic fiscal crunch of all the baby boomers retiring, using up even more government resources via an unsustainable health care system that is sucking up currently in excess of 40% of all provincial government spending.