Will our soaring dollar end up being a curse for Canada?
personally I think it's a bad thing but i'm not an economist. how long will it take before it really hurts our economy or will it help us.
Look at it like this, for every item that occupies your retail shelf space in Canada that comes from America, the exchange rate between the US and Canadian dollar will impact. As the dollar gains strength, it takes more Canadian dollars to match it to buy the same item. That represents inflation in your society though it may not get you a raise in pay on the short term. Of course sheer demand on a global basis for any item will create the same effect...look at crude oil. The result is inflationary pricing at the pump. Eventually, we all feel the pinch in some area of our life when our money buys less. WB
I'm not sure who's dollar you mean, American or Canadian. There is a temporary blip for the American dollar right now, but don't expect it to last. Canada, being a major world producer of oil, will fair better than the US in the long run.
Don’t get too worried about temporary market fluctuations. In the long term (and maybe short term) the dollar is going to go way down. Here’s a snippet from about.com This is a good article:
“No matter how you measure it, the dollar is losing value over the long-term. Here's why:
1. The U.S. debt is over $14 trillion. Foreign holders of this debt are concerned that the U.S. will let the dollar value decline so the relative value of its debt is less.
2. The large debt could force the U.S. to raise taxes to pay it off, which would slow economic growth.
3. As more countries join or trade with the European Union, demand for the euro increases.
4. Foreign investors are diversifying their portfolios with more non-dollar denominated assets.
5. As the dollar loses value, investors are less likely to hold assets in dollars as they wait for the decline to stop.”
You can read the entire article at:
http://useconomy.about.com/od/tradepoli … _Value.htm
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