Sunday, September 23, 2007

Canadian Dollar Parity...oh my!

Well folks, the Canadian Dollar is worth the exact same as the US dollar. Is this scary or what? For all of us Michiganders, we used to make fun of our neighbors to the north for having such a laughingly cheap dollar. When I was in high school, you could routinely get $1.50 Cn for $1 US. So this idea that it is all the same is quite strange.

The reported reasons for this vary from the recent interest rate cut here, to the value of Canada's oil and gas reserves. I am going to go out on a limb and say that it is because they maintain a crack team of Canadian Mounties ready to invade the Us unless we make our currency weaker. See the picture below for verification of this theory.

Scary...Huh.


On the serious side of this debate is the current global climate tand the way in which the US and our currency plays a role. Needless to say, we could be on the brink of a serious recession, if China and Japan stop investing in Billions of dollars as a hard reserve and instead go to Euros. If our currency continues to fall, we could see a run away form the dollar and the chaos would ensue. Now, none of this would be a problem if we could just contain out federal spending to what we bring in. Something that me and you have to do every month (unless you live off credit cards and follow our governments example. So shame on us, maybe this is something that we deserve. I guess I could always move to Windsor.

JD