USD at 1.27 today. The sky is falling

[mohammadali]

in canada were paying $0.50+ tax on every litter of gas we buy
if China release 10-20% Of their money out of china bank USD will be worthless

[intarsiabox]

Originally Posted by mohammadali

in canada were paying $0.50+ tax on every litter of gas we buy

Some places way out east are but this is not true for most of Canada. In Alberta we pay 10 cents federal flat tax, 9 cents provincial gas tax and 5% GST. BC has a higher provincial/carbon tax of about 21 cents. So about 23 cents and 35 cents per liter respectively.

[Aqua-Digital]

Best advice I can give anyone that buys regularly in USD and pays by bank transfer. Buy a futures contract on USD.

Drop me a line if you want to know how to do it.

Fyi - only worth it if the currency is ascending and or you need to fix your rates for price lists.

[Rice Reef]

Originally Posted by mohammadali

if China release 10-20% Of their money out of china bank USD will be worthless

China and the U.S. got each by each other's balls. One cannot do anything to upset the other. For China to flood the market with US dollars is just not smart and suicidal. China has real financial wealth and the U.S. has intellectual wealth.

Yes, there is still room to take advantage of the futures market

[Reef Supplies]

The cost of crude was pushed down to strangle Russia. Once the crude goes back up, the USD will drop once again. This is crap, the USD is NOT worth this much.

[Aqua-Digital]

Thats more conjecture really.

The short version of the story goes like this: For much of the past decade, oil prices have been high — bouncing around $100 per barrel since 2010 — because of soaring oil consumption in countries like China and conflicts in key oil nations like Iraq. Oil production in conventional fields couldn't keep up with demand, so prices spiked.

BY 2014, OIL SUPPLY WAS MUCH HIGHER THAN DEMAND

But beneath the surface, many of those dynamics were rapidly shifting. High prices spurred companies in the US and Canada to start drilling for new, hard-to-extract crude in North Dakota's shale formations and Alberta's oil sands. Then, over the last year, demand for oil in places like Europe, Asia, and the US began tapering off, thanks to weakening economies and new efficiency measures.

By late 2014, world oil supply was on track to rise much higher than actual demand. A lot of unused oil was simply being stockpiled away for later. So, in September, prices started falling sharply.

As prices slid, many observers waited to see whether OPEC, the world's largest oil cartel, would cut back on production to push prices back up. (Many OPEC states, like Saudi Arabia and Iran, need higher prices to balance their budgets.) But at its big meeting last November, OPEC did nothing. Saudi Arabia didn't want to give up market share and refused to cut production — in the hopes that lower prices would help throttle the US shale boom. That was a surprise. So oil went into free-fall.

The oil price crash is now upending the global economy, with ramifications for every country in the world. Low prices are excellent news for oil consumers in places like Japan or the US, where gasoline is the cheapest it's been in years. But it's a different story for nations reliant on oil sales. Russia's economy is facing a potential meltdown. Venezuela is facing unrest and may default on its debt. Even better-prepared countries like Saudi Arabia could face heavy pressure if oil prices stay low.

[mikellini]

Originally Posted by Reef Supplies

The cost of crude was pushed down to strangle Russia. Once the crude goes back up, the USD will drop once again. This is crap, the USD is NOT worth this much.

Russian oil is actually a small part of the global oil market. The biggest consumer of oil is the US, and Canadian oil has made (by far) the largest gains in that market, most of which was taken from Saudi oil. Plus, Canadian oil is now reaching world markets in Europe and Asia in significant numbers and was projected to take even more market share from the Saudi's. In contrast, Russia has seen a slow, predictable growth in oil exports.

Ideally, the Saudi's would like to decrease production of Canadian oil from oilsands and American shale. However, shale is a fast return project and can be started and stopped at any time, so oil prices won't have much of an effect on production over time. But low oil prices for about 3-4 years should have a significant effect on Canadian oilsands development, enough to allow the Saudi's to regain most of what they lost. They can afford to have oil as low as $15/barrel and still make significant profit... I don't see oil going back up any time soon

[Reef Pilot]

Well, there are quite a few reasons for our low loonie, as has been discussed. But the latest straw was when our central banker, Polaz, dropped our interest rates by a 1/4 percent, while the US fed reaffirmed their intentions to raise them in the 2nd qtr (don't think it will happen, though, personally).

In Canada we are under the false hope that with our lower loonie our manufacturing industries will once again flourish. I don't think that will happen, as our labor costs are too high (as compared to Alabama and Georgia, not to mention China) and many of our raw materials are based on USD. Last time we needed a 65 cent loonie, now we probably will need a 40 cent loonie to make it work. And then we are also up against the Buy America First program.

So, we are in for some tough times in Canada, not just in Alberta, but also Ontario and Quebec... Adapt or perish, as they say...

[Aqua-Digital]

Originally Posted by Reef Pilot

Adapt or perish, as they say...

Agreed, we are now looking more towards Europe for new product lines, the Euro/vs CAD is fairly stable in the mid range. Its still trading on interbank around the low 1.40's where we have structures in place to cater for anything up to 1.70 as seen only a few years ago.

[Reef Pilot]

Originally Posted by Aqua-Digital

Agreed, we are now looking more towards Europe for new product lines, the Euro/vs CAD is fairly stable in the mid range. Its still trading on interbank around the low 1.40's where we have structures in place to cater for anything up to 1.70 as seen only a few years ago.

And the Euro could drop a lot further, as they start up their QE (printing money) program, not to mention what will happen with Greece, and maybe Spain and Italy.