Loonie rant

[cyclestart]

Sent $102USD payment via palpal yesterday. Cost $137CDN. OUCH! The added insult will be Canada Post (maybe) relaying the taxes at the USD value.

What gives? We're told the banks are solvent. Ottawa has been slowly chipping away at the national debt. The provinces have been fiscally responsible for the most part. We even recently elected a conservative (by Canadian standards) government. These are the kinds of things that are supposed to make the money markets happy in theory (?).

The usual explanation is the loonie reflects the price of oil and other commodities. Are we truly and simply just the world's natural resource warehouse? Sad if it's true.

Anyone happy about the sinking loonie? Maybe you, or your employer,
landed a nice export contract? Would be nice to hear someone's benefiting from the situation.

/end of rant

[Geof]

Originally Posted by cyclestart ....Anyone happy about the sinking loonie? Maybe you, or your employer, landed a nice export contract? Would be nice to hear someone's benefiting from the situation. /end of rant

You are damn right I am happy. I sell over 95% of my production into the US and overseas and during the past five years have taken an enormous hit to my bottom line; now maybe I can start getting some of it back.

The loonie 'falling' does not have much connection to what is happening in Canada and is only partly connected to the oil and resources situation. Investors are dumping a lot of currencies in order to put their money into US Govt T-bills because these are seen as a safe place to have money when there is the chance of a recession or depression.

[JustSomeGuy]

Originally Posted by Geof You are damn right I am happy. I sell over 95% of my production into the US and overseas and during the past five years have taken an enormous hit to my bottom line; now maybe I can start getting some of it back. The loonie 'falling' does not have much connection to what is happening in Canada and is only partly connected to the oil and resources situation. Investors are dumping a lot of currencies in order to put their money into US Govt T-bills because these are seen as a safe place to have money when there is the chance of a recession or depression.

Good example of how one thing hurts in one area and helps in another.

Geof sells more down south and maybe has to hire another person... One more person off social assist and spending more in that local economy.

Big picture, a loonie at .85US would be a good thing for our economy.

I think the question is why are there not more retailers in Canada that can supply these things locally at a fair price. All things being equal, I always buy Canadian. The problem I see is that most of the few domestic sources, price so much higher (even beyond the currency difference).

Just my .02 (0.016USD) worth...

[Geof]

Originally Posted by JustSomeGuy ....Geof sells more down south and maybe has to hire another person... One more person off social assist and spending more in that local economy....

What makes you think I would hire someone off social assist.

I have to admit I did it twice; what a disaster both times.

[JustSomeGuy]

Originally Posted by Geof What makes you think I would hire someone off social assist. I have to admit I did it twice; what a disaster both times.

Perhaps badly worded.
If you hire someone, that is one person not on UI.

[Geof]

Originally Posted by JustSomeGuy Perhaps badly worded. If you hire someone, that is one person not on UI.

That is better.

One of my most reliable guys was hired from a UI (EI these days I think) training program.

[cyclestart]

Maybe the loonie isn't directly tied to oil but there is a definite trend. Today oil climbed a little and so did the dollar.

Hmm, if an 80 cent dollar is partly a reflection of lower energy costs I could learn to like this idea. No need to guess I don't live in an oil producing province

[dertsap]

the low dollar is good for some sectors of business ,it is bad for others
Geof's exporting gets room to breath , i import from manufacturers in the US and elsewhere , watching the power of my dollar drop a penny a day has been brutal ,and in order to be competetive i didn t leave any kind of huge buffer , so it will be interesting to see how long i can ride the bumps before i have to do some tweaks

[Edwardo]

lower loony is a double edge sword to me, i live in Canada but work in foreign countries in the mining industry, when the loony drops it generally means oil and gold has dropped in price also, lower gold prices mean less job opertunities ... regardless, we are kicking off our cnc plasma business next spring, been 1.5 years in the making, renovating, buying equipment, learning how to use it, coming up with a marketing plan and so on, no guarentee it'll be successful, but you never know unless you try, and it would be nice to just stay home for a change.

EDD

[grahamshere]

With the lower dollar you would think it would help in a lot of businesses that export but with a rescission there I do not see a lot of spending going on .I,m not sure how much product we buy from the states, most of every thing is from china I would say so either way I don't see much difference what our dollar does. I think we should be looking for more trading partners more than any thing right now. Graham

[DareBee]

We have to look at the big(ger) picture.
Lower loonie means more contracts and exports to the states (Canada's biggest trading partner).
I do not do anything for the states, so what do I care?
WRONG
I build, repair and modify the machines and assembly lines for the companies that make sub-products. They sell the sub-products to a Canadian manufacturer who makes the main product. Then 90% of that product is sold to the USA.
If I am repairing a farmers combine, it is because he can make money harvesting a crop that is driven by commodity prices and exports to the states.
Everything is tightly interwoven.
The less us buys the less work I have (even though I do nothing "for" the states). The less money I spend at the local butchers....etc, etc.
With our high wages (dictated by our COLA), we need a weak loonie to compete with manufacturing out of the southern US (and Mexico).

[JustSomeGuy]

Originally Posted by DareBee We have to look at the big(ger) picture. Lower loonie means more contracts and exports to the states (Canada's biggest trading partner). I do not do anything for the states, so what do I care? WRONG I build, repair and modify the machines and assembly lines for the companies that make sub-products. They sell the sub-products to a Canadian manufacturer who makes the main product. Then 90% of that product is sold to the USA. If I am repairing a farmers combine, it is because he can make money harvesting a crop that is driven by commodity prices and exports to the states. Everything is tightly interwoven. The less us buys the less work I have (even though I do nothing "for" the states). The less money I spend at the local butchers....etc, etc. With our high wages (dictated by our COLA), we need a weak loonie to compete with manufacturing out of the southern US (and Mexico).

Very well stated...

Living in Ontario, I think I have seen the effects of the high Canadian dollar in the way jobs have been lost this past year or so.
It certainly is nice to see our buying power increase but, like all things, there is a price elsewhere.