Write That Check in Canadian Money Please!

So in the aftermath of the 0.5% rate cut by the Federal Reserve, the dollar has plunged to it's lowest levels in decades against a host of world currencies. The Canadian dollar, which hasn't been at parity with the U.S. dollar since 1976 is now worth US$1.0004--many are predicting it will go even higher in the coming weeks. The Euro also closed above US$1.40 for the first time ever, with predictions of US$1.45 by the end of the year.

Now I'm not an economist or a currency expert, but I do know that a tanking dollar is not a good thing when even the weakness has not dampened the trade deficit now at $700 billion, despite the fact that a weak currency supposedly stimulates exports. Never in my lifetime have I seen the US dollar this weak, and only four or five years ago the Canadian dollar was a US$0.62, the British pound at US$1.50 and the Euro well below US$0.90.

To compound this mess, a barrel of oil is now above $83 despite the fact that we have normally seen declines in the price of oil as summer comes to a close, the housing bubble burst shows no signs of reversing and the national debt is above $9 trillion from about $5 trillion just 6 years ago.

Our economy is in serious trouble. To think that as Bush took office in 2001, we had a trillion and a half dollars in surpluses and a humming economy and a dollar that was actually worth something is really like the twilight zone. The rapid pace of decline is nothing short of alarming. If the dollar is dumped as a world reserve currency, it's going to be an enormous blow to the US psychology, not to mention the economy. Every day that the dollar hits an all time low, is a day closer to that event.

I don't know how long or if we will ever recover from this mess we have been living on for the last few years and is just now becoming increasingly apparent, but all I know if that if a new president doesn't fundamentally c change things in this country, I will be asking my boss to pay me in Canadian money instead.

•  Tips...

  (in Euros or Canadian dollars only)

  by michael1104 on Thu Sep 20, 2007 at 03:37:17 PM PDT

  •  How About Confederate Dollars?

    They might surpass the U.S. dollar soon.

    by johnnygunn on Thu Sep 20, 2007 at 03:39:17 PM PDT

    •  Well, seeing as the CSA won

      the Civil War after all, its currency ought to have more value than our ugly stuff with the comic-book-style busts on the front.

      by corvo on Thu Sep 20, 2007 at 04:03:29 PM PDT

•  I tried to buy a book from a

  company in Germany.  The price of the book was either 80 Euros or $150.00 in American money.

  This was a few weeks ago and before this latest rate cut.

  We're in deep trouble.

  by nupstateny on Thu Sep 20, 2007 at 03:43:04 PM PDT

•  Financing the War -

  The Bush administration is financing its military adventurism by devaluing the currency.  It is an underhanded way to hide costs that is, ultimately, far more expensive for the average American than raising taxes.

  by johnnygunn on Thu Sep 20, 2007 at 03:43:11 PM PDT

  •  And they

    cut and ran from the fiscal liability for their mismanagement. Left a war and huge debt to show for eight years of power. What a legacy. C&R governance.

    by eastvan on Thu Sep 20, 2007 at 03:50:25 PM PDT

•  When I apply for a job

  I'm gonna demand to be paid in Euros.

  by Progressive Moderate on Thu Sep 20, 2007 at 04:13:01 PM PDT

•  if I were an exporter.

  I'd welcome this news.
  I however am not.

  by devtrash on Thu Sep 20, 2007 at 04:13:17 PM PDT

  •  Who in America IS an exporter anymore?

    Other than maybe some farmers?

    by bee tzu on Thu Sep 20, 2007 at 05:14:44 PM PDT

    •  There are some.

      Apple.
      Microsoft.
      Sun.

      by devtrash on Fri Sep 21, 2007 at 02:28:43 PM PDT

•  Canadian investment

  I've suggested for a while that investors should be in Canadian markets. Here's a graph of 5-year trends that makes it all crystal clear.

  Canadian market (green line): Up 120%
  Canadian dollar (blue line): Up 60%
  US market (red line): Up 80%

  Long term, US markets have largely been following the devaluating dollar. In recent months, there's been a disparity, which is now being corrected. (Split the difference in coming months? Dollar devalues another 10% and markets shed 10%?)

  Obviously, it makes no sense for anyone with a strong currency to invest in US markets. Except that central banks, with massive dollar reserves due to the trade deficit, have nowhere else to put them.

  A Canadian converting to US$ and investing in the U.S. would have earned 20% in the past 5 years, versus 120% at home. An American converting to CD$ and investing in Canada would have earned 268% in the same time period.

  by cadejo4 on Thu Sep 20, 2007 at 04:14:02 PM PDT

•  Forgot the link

  http://finance.yahoo.com/...

  by cadejo4 on Thu Sep 20, 2007 at 04:14:30 PM PDT