"Where is USD going?"
The question should be "Where is the Cdn$ going?"
Since I expect a more severe worldwide recession than most, one lasting several years that will NOT bottom in 2009 as many are predicting, it would make sense to forecast a lower Canadian dollar in relation to its US counterpart for years to come.
Currently, the Cdn$ trades at US$0.83 (or inversely US$1.00 = Cdn$1.23).
I would expect we will see the Cdn$ lower towards US$0.75 (or inversely US$1.00 = Cdn$1.33) later this year or early next, then hitting the US$0.68-$0.70 range (inversely US$1.00 = Cdn$1.43/1.47) by late 2010.
In my view, the recession in the USA (and the rest of the world by extension) will continue until the housing market recovers in the USA. That will NOT happen for years as real estate prices will keep dropping until the inventory is in balance with long term demand. There are still millions (yes millions) of houses/condos that will be forced into foreclosure when mortgages have to be renegotiated/renewed at much higher rates in 2010 and 2011 (that is when the bubble will really burst). And, to make matter worse, those mortgages are higher than the resale value of the homes - resulting in liquidations and more supply on the market.
Until the liquidation is completed, demand for new houses, associated construction materials, etc... will be weak, dragging the rest of the world economy with it.
Eventually, US real estate prices and inventory will have dropped to the point where it makes economical sense to buy again. Then we will see the light at the end of the tunnel (hopefully, it is not another train coming in!).
"Seems Harper's policy of doing...."
In my book, on the long term, the value of the Cdn$ has little to do with what the Canadian government does or does not do. It is largely determined by supply and demand based on the overall demand for our "stuff" and that demand is conditional on healthy US and world economies. .
The question should be "Where is the Cdn$ going?"
Since I expect a more severe worldwide recession than most, one lasting several years that will NOT bottom in 2009 as many are predicting, it would make sense to forecast a lower Canadian dollar in relation to its US counterpart for years to come.
Currently, the Cdn$ trades at US$0.83 (or inversely US$1.00 = Cdn$1.23).
I would expect we will see the Cdn$ lower towards US$0.75 (or inversely US$1.00 = Cdn$1.33) later this year or early next, then hitting the US$0.68-$0.70 range (inversely US$1.00 = Cdn$1.43/1.47) by late 2010.
In my view, the recession in the USA (and the rest of the world by extension) will continue until the housing market recovers in the USA. That will NOT happen for years as real estate prices will keep dropping until the inventory is in balance with long term demand. There are still millions (yes millions) of houses/condos that will be forced into foreclosure when mortgages have to be renegotiated/renewed at much higher rates in 2010 and 2011 (that is when the bubble will really burst). And, to make matter worse, those mortgages are higher than the resale value of the homes - resulting in liquidations and more supply on the market.
Until the liquidation is completed, demand for new houses, associated construction materials, etc... will be weak, dragging the rest of the world economy with it.
Eventually, US real estate prices and inventory will have dropped to the point where it makes economical sense to buy again. Then we will see the light at the end of the tunnel (hopefully, it is not another train coming in!).
"Seems Harper's policy of doing...."
In my book, on the long term, the value of the Cdn$ has little to do with what the Canadian government does or does not do. It is largely determined by supply and demand based on the overall demand for our "stuff" and that demand is conditional on healthy US and world economies. .
"but I did not detect significant drop in real estate in my area "
???
Take a look at:
http://www.canadian-housing-price-charts.235.ca/
While my earlier comments are clearly based on the real estate market in the USA, where housing was grossly overpriced, we are now experiencing and will continue to experience price weakness in Canadian real estate, including GST and Burlington.
While prices in Canada did not balloon as they did in the USA, real estate prices do not go up when folks have lost their job or are concerned about losing their job. The Canadian economy still depends on the American economy (they are our largest customer) and will not recover until after the US economy has recovered. The trend for the Canadian dollar will follow the economy. .
???
Take a look at:
http://www.canadian-housing-price-charts.235.ca/
While my earlier comments are clearly based on the real estate market in the USA, where housing was grossly overpriced, we are now experiencing and will continue to experience price weakness in Canadian real estate, including GST and Burlington.
While prices in Canada did not balloon as they did in the USA, real estate prices do not go up when folks have lost their job or are concerned about losing their job. The Canadian economy still depends on the American economy (they are our largest customer) and will not recover until after the US economy has recovered. The trend for the Canadian dollar will follow the economy. .
"Canada should look for other trading partners"
One needs to define "who" Canada is! When you look at Canadian exporters looking for trading partners, it is important to look at the ownership of these Canadian companies.
Unquestionable, the bulk of them are American controlled. When Imperial Oil (for example) makes decisions where to sell its stuff, they first ask their American controlling shareholders what to do for all important decisions.
Even Canadian companies like Research in Motion (great Canadian success story based in Waterloo, Ontario) sell their Blackburry worldwide BUT the bulk of the market is in the USA. That is the reality of the marketplace and it will not change anytime soon.
Our large exporters such as the steel industry or lumber industry can often compete on many products against most American producers. However, little can be exported overseas at competitive prices. .
One needs to define "who" Canada is! When you look at Canadian exporters looking for trading partners, it is important to look at the ownership of these Canadian companies.
Unquestionable, the bulk of them are American controlled. When Imperial Oil (for example) makes decisions where to sell its stuff, they first ask their American controlling shareholders what to do for all important decisions.
Even Canadian companies like Research in Motion (great Canadian success story based in Waterloo, Ontario) sell their Blackburry worldwide BUT the bulk of the market is in the USA. That is the reality of the marketplace and it will not change anytime soon.
Our large exporters such as the steel industry or lumber industry can often compete on many products against most American producers. However, little can be exported overseas at competitive prices. .
The currency used for bookkeeping does not matter. For tax purposes you still need to convert everything in Canadian dollars.
My books are kept in both currency, depending on the currency of transaction (mostly US$).
All items on my website are priced in US$. Most listings (99%) on eBay are priced in US$ and are listed on eBay.com (not .ca). My eBay store is located on eBay.com and eBay bills me monthly in US$ (paid with my US dollar denominated credit card). .
My books are kept in both currency, depending on the currency of transaction (mostly US$).
All items on my website are priced in US$. Most listings (99%) on eBay are priced in US$ and are listed on eBay.com (not .ca). My eBay store is located on eBay.com and eBay bills me monthly in US$ (paid with my US dollar denominated credit card). .
Hi craftycatsattic .
I only convert all US$ amounts into Cdn$ at year end based on the annual average given by the Bank of Canada (US$1.00 = Cdn$ 1.0660 in 2008; US$ 1.00 = Cdn$ 1.0747 in 2007). No adjustments are made to actual amounts received or paid. That is the advantage of consistently using annual averages. .
I only convert all US$ amounts into Cdn$ at year end based on the annual average given by the Bank of Canada (US$1.00 = Cdn$ 1.0660 in 2008; US$ 1.00 = Cdn$ 1.0747 in 2007). No adjustments are made to actual amounts received or paid. That is the advantage of consistently using annual averages. .
" the game has changed dramatically. The US interest rate is now ZERO %, so all those renewals are no longer an issue"
?????
May I respectfully suggest you study this issue a bit more carefully.
Hundreds of articles have been written in the financial press on the subject and a good start would be here:
http://www.mortgageloan.com/second-wave-of-mortgage-crisis-to-begin-2790
"Subprimes have cost the economy about a trillion dollars, and Alt-A loans may contribute another trillion in losses before 2010. Many will continue to reset into 2010, which means that the pain of foreclosures will be time-released and prolonged into the foreseeable future."
Mortgage interest rates in the USA are not down to ZERO. The problem is not only the rate of interest charged on the mortgage but the fact mortgages (in the USA) due to be renewed next year and in 2011 are valued at more than the house. That is the real problem. .
?????
May I respectfully suggest you study this issue a bit more carefully.
Hundreds of articles have been written in the financial press on the subject and a good start would be here:
http://www.mortgageloan.com/second-wave-of-mortgage-crisis-to-begin-2790
"Subprimes have cost the economy about a trillion dollars, and Alt-A loans may contribute another trillion in losses before 2010. Many will continue to reset into 2010, which means that the pain of foreclosures will be time-released and prolonged into the foreseeable future."
Mortgage interest rates in the USA are not down to ZERO. The problem is not only the rate of interest charged on the mortgage but the fact mortgages (in the USA) due to be renewed next year and in 2011 are valued at more than the house. That is the real problem. .
"Is there any difference, any at all when listing on eBay.com in CAD vs in USD while all other listing parameters are the same (Worldwide availability, etc). "
According to eBay.ca:
"Listings in US$ will attract more interest from US buyers and on average are 15% more likely to sell." .
According to eBay.ca:
"Listings in US$ will attract more interest from US buyers and on average are 15% more likely to sell." .
"no reason to beleive that the Canadian dollar with fall below 80 cents "
Here is the five year chart showing the value of the Canadian dollar relative to the US$:
The current downtrend (from above par) started over a year ago and there is no reason to believe it will stop anytime soon. .
Here is the five year chart showing the value of the Canadian dollar relative to the US$:
The current downtrend (from above par) started over a year ago and there is no reason to believe it will stop anytime soon. .
On the subject of the mortgage crisis in the USA:
http://yourmortgageoryourlife.wordpress.com/2008/10/20/alt-a-the-risk-abatement-disaster-is-coming/
and this video from a CBS "60 minutes" report a few weeks ago:
http://www.veoh.com/videos/v16927913K8RX9pxs .
http://yourmortgageoryourlife.wordpress.com/2008/10/20/alt-a-the-risk-abatement-disaster-is-coming/
and this video from a CBS "60 minutes" report a few weeks ago:
http://www.veoh.com/videos/v16927913K8RX9pxs .
I would give up Pierre, credible people do not always agree with Keynes but at least they know how to spell his name.
