USD at 1.27 today. The sky is falling

[Rice Reef]

Originally Posted by 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...

Agree. When we drop rates it is another way of printing money. When this was announced the Feds had also signalled that they were raising rates which is a way of slowing down spending and is also a way of strengthening currency.

[Reef Pilot]

Originally Posted by Rice Reef

which is a way of slowing down spending

Private sector spending that is... Yeah, it's a vicious circle. Means even less market for our goods down there.

Only good news is that our lumber industry in BC will get a much needed big boost (Quebec, too). Certainly can't count on anything happening with our LNG hopes, at least not anytime soon...