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The Canadian dollar rose as high as 99.87 cents (U.S.) Thursday, a new 30-year high, with some strategists saying parity could happen today.

The currency has now gained 16 per cent against the U.S. dollar this year, the strongest performance of any G-10 country. The last time it was worth $1 American was on Nov. 25, 1976.

The loonie jumped more than a cent as investors continued to shun the American dollar, which sank to a record low against the euro.

“We expect more U.S. dollar weakness is looming,” Bank of Nova Scotia said in a report. “The timing of parity is difficult to pinpoint, however we wouldn't be surprised to see it today.”

It's been a stunning rise for the currency, one that's had exporters scrambling and travellers celebrating. The currency's 60-per-cent surge since its low of 61.80 five years ago “represents its most rapid climb on record,” said CIBC chief economist Jeff Rubin in a note.

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[ 20 September 2007: Message edited by: Michelle ]

FRANKFURT, Sept. 20 — Investors around the world sold dollars today, pushing it to an all-time low of $1.40 against the euro and to parity with the Canadian dollar for the first time in three decades as currency traders digested the full implications of the Federal Reserve’s new course for interest rates.

[ 20 September 2007: Message edited by: Geneva ]

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Originally posted by josh:
A lower currency is always good for exporters. The downside tends to be a risk of an increase in inflation.

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The media in this country will not report that our neighbour to the south is a basket case. The headlines should read American dollar plummets against world currencies not Canadian dollar at par. Reading this article helps explain why the story is being spun the way it is. An informed public would never concider hitching its money supply to a failing Amerikan system but if they don't talk about it only us rabid anti-american will care.

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A global crash and a totally devalued dollar that can barely rival the peso spells disaster for all Americans who wish to maintain their standard of living and not find themselves barefoot on the street in a bread queue.

But fear not, because the very predatory globalism that caused all this calamity in the first place has yet another answer to our prayers! It's the Amero, the North American currency that will unify the States, Mexico and Canada and its latest cheerleader is influential London investment firm VP Steve Previs.

The Amero would offer a nice umbrella under which to force through the Free Trade Area of the Americas and a North American Union, an eternal dream of the Rockefeller elite clique that is seeking to erect a one world government system by first aping the European Union in creating a single currency and trading bloc, again to the devastation of middle class America but to the delight of transnational corporations who can exploit cheap labor while putting millions of Americans out of a job.

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Edited to add: Boy we all cross posted at the same time about what the real story is. LOL it is why I like this board it has people who think beyond the spin.

[ 20 September 2007: Message edited by: kropotkin1951 ]

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The Canadian currency last closed above par on Nov. 25, 1976, the day before the Sex Pistols punk band released their first single, "Anarchy in the U.K."

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Originally posted by josh:
Yes, that's true. A lower currency is always good for exporters. The downside tends to be a risk of an increase in inflation.

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It also lowers the value of exports in general. For gold and oil this isn't serious as the rise in value of these more than accounts for the currency loss. Other commodities are less lucky. With the collapse of the US housing market, lumber is facing a double whammy of lower demand and the currency loss.

Manufacturing for export also faces a currency loss, but as 1/3 of the production inputs are imported this is mitigated by currency savings. Higher dollars also provide opportunities for companies to invest in capital purchases of technology and machinery.

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The Canadian dollar is actually not moving much in relation to all the other major currencies

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Given our close relationship to the US, the US/Canadian exchange rate is the most important to our economy. It is good that Canada is doing okay on a world scale, but not as critical to our short term prospects.

[ 20 September 2007: Message edited by: Pogo ]

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I am tired of the Canadian media spin on this story. The Canadian dollar is actually not moving much in relation to all the other major currencies. It is the US greenback that is falling against all the major currencies and the Loonie.

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Not true. The loonie has appreciated 8% against the Euro. The real reason for the strength of the loonie is that our economy is fundamentally strong,our federal government posts consistent surplusses and commodity prices are rising.

As of 5-10 minutes ago. Woot.

1 USD == 0.9999 CAD

As of 8:47 PM Pacific time. Woooooooooooooooooooooot!

[ 20 September 2007: Message edited by: DrConway ]

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Originally posted by West Coast Greeny:
Largely its the commodity thing. Lost in all of this loonie hooplah was the fact that oil has hit $82!

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$82 oil and $732 gold are reinforcing the loonie. The only threat to the loonie is Canada's dependence on exports to the US.

The best thing for Canada is parity. For 30 years,Canada has coasted on its devalued currency rather than make the investments in education,technology and infrastructure and also change the regulatory regime necessary to compete in the 21st century.

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Originally posted by jester:
Parity will force Canada off the dime.Its not about Basil the Insignificant's bleatings about rescuing 20th century manufacturing,its about harnessing Canada's potential by easing regulatory hurdles,including intra-provincial trade and allowing immigrants access to their professions to expand the pie rather than fighting over a diminishing pie.

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Originally posted by jester:
The best thing for Canada is parity. For 30 years,Canada has coasted on its devalued currency rather than make the investments in education,technology and infrastructure and also change the regulatory regime necessary to compete in the 21st century.

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You can say that again. The U.S. has also defunded a lot of federal programs over the years, but public spending on basic research and development in the U.S. and several other(about 25 or 30 ) developed countries makes Canada look sad. Increased foreign-ownership of our stuff hasn't translated to increased investment in r&d here. Our productivity gains in everything other than car manufacturing is really lousy. AutoPact was a good example for managed trade from the 1960's that has worked out well for Canada.

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Parity will force Canada off the dime.Its not about Basil the Insignificant's bleatings about rescuing 20th century manufacturing,its about harnessing Canada's potential by easing regulatory hurdles,including intra-provincial trade and allowing immigrants access to their professions to expand the pie rather than fighting over a diminishing pie.

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More good points, but don't be too-too hard on Basil. He's not the one designing North American cars. And he's not the one ruining the U.S. economy overall.

[ 20 September 2007: Message edited by: Fidel ]

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Higher dollars also provide opportunities for companies to invest in capital purchases of technology and machinery.

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Except that there is no cash for capital expenditures. Couple that with the fact that the dollar, as pointed out above, hasn't changed against European currencies ( where much manufacturing equipment comes from ) and any advantage are slim or non existent.

What this represents is a shift of economic focus away from exporting finished goods to exporting non renewable resources.

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Maybe I don't know enough about economics but it seems like as the US$ gets lower in value relative to the CAN$, more US products will be purchased by Canadians.

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Originally posted by Tommy_Paine:
This is our new role in the world. Hewers of wood, and drawers of water.

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Hewers of wood

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The National Energy Board on Thursday gave its long-awaited
approval to TransCanada Corp.'s multibillion dollar Keystone pipeline,
unleashing a storm of protest from workers over the potential loss of
nearly 20,000 oil-related jobs.

After it comes into service in 2010, the pipeline will ship almost
600,000 barrels a day (bpd) of bitumen -- about half of Canada's current
oilsands output -- from Alberta to Illinois and eventually on to the
Gulf of Mexico.

In its ruling, the board said the 1,845-kilometre project is "in the
public interest" and needed for "the present and future public
convenience and necessity."

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The public interest? What public? Necessity? Whose necessity? C'mon, Canada, bend over. America is in a hurry.

Canada's Regulators: Draining Canada of Jobs and Resources Since 1867

[ 21 September 2007: Message edited by: Frustrated Mess ]

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Originally posted by Gir Draxon:

So what you're saying is, parity = bigger economic pies?

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No. What I'm saying is that parity will force Canada to confront the barriers to productivity that inhibit the country from embracing a high tech 21st century economy.

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Originally posted by Tommy_Paine:

Except that there is no cash for capital expenditures. Couple that with the fact that the dollar, as pointed out above, hasn't changed against European currencies ( where much manufacturing equipment comes from ) and any advantage are slim or non existent.

What this represents is a shift of economic focus away from exporting finished goods to exporting non renewable resources.

This is our new role in the world. Hewers of wood, and drawers of water.

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Wrong. I've pointed out that the loonie has risen 8% against the loonie and the fundamental reason why the Euro has no legs.

Our new role in the world is based on commodities. The difference is that Canada is in the driver's seat and is raking in billions upon billions of loonies selling commodities. My point is that Canada should use its new wealth to invest in dramatic change to embrace the new high tech nature of the 21st century rather than wasting resources on supporting a dying one.

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Originally posted by Frustrated Mess:

The public interest? What public? Necessity? Whose necessity? C'mon, Canada, bend over. America is in a hurry.

[ 21 September 2007: Message edited by: Frustrated Mess ]

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Canada should use its new wealth to invest in dramatic change to embrace the new high tech nature of the 21st century rather than wasting resources on supporting a dying one.

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Can you be more specific ?

How should be invest in high tech ? More education ? Better infrastructure ?

I'm a high tech worker who has been displaced by high tech outsourcing, much in the same way manufacturing works have been so I don't see the wisdom in investing in another sector that we can't compete in, internationally.

It seems to me that our natural advantage is in resources, and the other areas we can do well in are industries that have regulatory or cultural barriers preventing global competition, such as media or the pharmaceutical industry.

[ 21 September 2007: Message edited by: Michael Hardner ]

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Originally posted by Michael Hardner:
Jester:

Can you be more specific ?

How should be invest in high tech ? More education ? Better infrastructure ?

I'm a high tech worker who has been displaced by high tech outsourcing, much in the same way manufacturing works have been so I don't see the wisdom in investing in another sector that we can't compete in, internationally.

It seems to me that our natural advantage is in resources, and the other areas we can do well in are industries that have regulatory or cultural barriers preventing global competition, such as media or the pharmaceutical industry.

[ 21 September 2007: Message edited by: Michael Hardner ]

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Eliminate the barriers,both official and unofficial,that prevent immigrants from practicing their professions.

Make education accessible so that students can achieve post graduate degrees without a huge debt burden.

Change the archaic legislative and regulatory framework that inhibits intra-provincial trade.

Create the fiscal regime required to both attract international research and development to Canada and nurture domestic efforts.

Canada is near the bottom (60th?) in world productivity. Dependence on cheap and abundant natural resources, a low dollar for the last 30 years and a steady immigration stream of European tradesmen after WWII allowed Canada to become complacent.

Now,immigrants are either unskilled or hindered by professional associations from practicing their skills. An older workforce is retiring without either the immigrant trades skills or a domestic program to replace them.A currency parity that strips all the fat out of the economy (Parity is placing a burden on the economy similar to a 4.5% hike in the prime rate).

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Eliminate the barriers,both official and unofficial,that prevent immigrants from practicing their professions.

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I thought we were talking about high tech. There are relatively few barriers preventing immigrants from participating in the technology industry.

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Alberta doesn't have the capacity to build more upgraders and is exploring upgrader construction in other provinces but the fact is that Canada does not have the educated labour force necessary to expand refinery capacity.

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We've been exporting raw resources since we first discovered Beaver pelts. How long does it take to build a pipeline? How long does it take to build a refinery? In that time how many people can be trained?

And there is the simple fact that Canada is a land of immigrants. Import the skills if they don't exist.

I mean, we are destroying our eco-system so Americans can waste oil in giant SUVs and McMansions. We might as well at least get something out of being screwed.

[ 21 September 2007: Message edited by: Frustrated Mess ]

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Originally posted by Michael Hardner:
Jester:

I thought we were talking about high tech. There are relatively few barriers preventing immigrants from participating in the technology industry.

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I think I agree with you as far as the telecom industry goes here in Canada. We were doing pretty well during the tech boom. Canada and U.S. have had degreed Chinese, Indian, Iraqi, a few Russians, Turks and other nationals come here and find work in Canada's Silicon North. Telecom did recover somewhat after the bubble burst, but not the torrid pace that there was leading up to 9-11-01 or so. The internet is still at the foothills of development. Telco's will need to upgrade switching equipment as new technology is developed, and the speed of doing business will have to keep pace with processor technologies, software improvements etc.

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My point is that Canada should use its new wealth to invest in dramatic change to embrace the new high tech nature of the 21st century rather than wasting resources on supporting a dying one.

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The problem is is that manufacturing is the largest consumer of "high tech". Without a manufacturing base, there is little need for robot manufacturers and soft ware engineers. At least not in this country.

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Canada is near the bottom (60th?) in world productivity. Dependence on cheap and abundant natural resources, a low dollar for the last 30 years and a steady immigration stream of European tradesmen after WWII allowed Canada to become complacent.

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And this lack of productivity comes in spite of the fact that wages-- even union wages-- have not kept up to inflation and in spite of constant job reductions, and reductions in work forces due to automation.

It all points to a massive failing in the management sector. Capital investments have been ill targeted. There has been no conservation response to rising energy costs. Above all, there has been an abandonment of empiricism that has shown Canadian, and North American managers in industry to not know their ass from a hole in the ground.

Capital investments are not going to happen in Canadian plants. Canadian owned plants don't have the cash. And American owned branch plants have a hard time arguing for capital investments when they are trying to economically justify their existence.

And when all the I.T. and technical support that exists due to a large manufacturing customer base finds itself in trouble due to the loss of that base, other fields, like the medical R&D, for example, might find no answer when they phone a software contractor for help. And how long will they put up with that before leaving?

Meanwhile, the massive job loss will mean no money coming into the country via the exports. So all the investment in education and other sectors of the economy will have to compete for money from, at first, a fixed sized pie, and then later, a shrinking one.

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Originally posted by Frustrated Mess:

Bullshit.

We've been exporting raw resources since we first discovered Beaver pelts. How long does it take to build a pipeline? How long does it take to build a refinery? In that time how many people can be trained?

And there is the simple fact that Canada is a land of immigrants. Import the skills if they don't exist.

I mean, we are destroying our eco-system so Americans can waste oil in giant SUVs and McMansions. We might as well at least get something out of being screwed.

[ 21 September 2007: Message edited by: Frustrated Mess ]

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You might inform yourself on the upgrader and refinery issue before waxing poetic.

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Originally posted by Catchall:
The parity thing is hilarious. It's always spoken of in terms of the Canadian dollar rising - which it has been, kinda. However, the larger part of this equation is the fall of the American dollar. In reality the Canadian dollar hasen't risen to parity with the American dollar; rather the American dollar has fallen to parity with the Canadian dollar. It dosn't sound so heroic that way, but it is closer to the truth, I think. And what's with the frikken books. $39.99 in Canada & 22.49 in the USA. I thought we were at par. I'm never going to buy a book again. I'm just gonna reread and reread my collection of Creepy, Eerie and Conan.

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Blame Bretton Woods but the fact that many of our commodities such as oil and gold are delineated in US dollars make those commodities prices in Candos act inversely to the US dollar,strengthening the Cando.

If anyone wants something scary (and free) to read, check out this article about the financial future as the derivatives fiasco unwinds. Its only the beginning.

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Originally posted by Tommy_Paine:

It all points to a massive failing in the management sector. Capital investments have been ill targeted. There has been no conservation response to rising energy costs. Above all, there has been an abandonment of empiricism that has shown Canadian, and North American managers in industry to not know their ass from a hole in the ground......

....Good luck with that.

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Tommy,when I refer to investing in productivity,I'm painting with a wide brush. Canada's lack of productivity is not a mere "management" failure,its a societal failure to address the causes of poor productivity,rather than a piecemeal approach to the symptoms.

By investing in productivity, I refer also to resolving First Nations claims. Claims resolution will return many times the investment in capacity building. Same thing with national daycare,affordable housing, improved transit.

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Tommy,when I refer to investing in productivity,I'm painting with a wide brush.

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By capacity,I refer not only to the financial and human resources but also the environmental sustainability of locating so much oil infrastructure in an area of limited resources such as water.

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So, which part of the US, Illinois or the Gulf of Mexico, has greater environmental sustainability with regard to "so much infrastructure" and greater limited resources, "such as water", than Manitoba, Ontario, or Quebec?

I think you're talking through your ass. They want to export a raw resource and locate the refinery closer to market -- the US market.

The productivity mantra is brought to us by the same ideological interests that promote free trade, investor rights, the gutting of social programs, continued environmental degradation, patents on food, the privatization and commodification of water, globalism for corporations and ghettos for people.

It is the new buzzword of the MBA class.

[ 21 September 2007: Message edited by: Frustrated Mess ]

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Originally posted by jester:
In a global economic environment,a parochial approach to manufacturing and production are no longer valid and Canada should build on its educated workforce to pursue areas where we can compete-aerospace for example- rather than areas where we can't.

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And we do compete in aerospace. We've been losing ground in areas where we once dominated, like telecom.

There are now 36 important sectors of our economy which are majority foreign-owned and controlled, including oil and gas. No other developed world economy is defined by as much foreign control. Canada is a laboratory experiment in neoLiberal ideology similar to the way Chile was from 1973 to 1985.

If we had leadership and bargained a little harder with behemoth oil companies for processing of the tar sands, we would create all kinds of jobs here in Canada in that sector alone. They'll pump and truck a lot of it to the U.S. for refining instead.