The measure of all economies is the relationship between the economy and the political. While separate in academia research and news media reportage, in real life they are undeniably linked.
While greeted with cheers by national ideologists and the international traveler, the rise of the Canadian dollar to parity value with that of the American currency describes the advent of economic troubles. The economic health of Canada is inextricably linked to the performance of the US economy.
Worse still it is a one way link. A healthy United States economy can swoon the Canadian economy despite poor political management. A healthy Canadian economy cannot improve the performance of the United States economy.
A rise in the value of the Canadian dollar against the American is the whistling wind of an approaching economic tornado. The value of the Canadian dollar was strongest before the 1974 recession. In 1988, the value of the Canadian dollar had risen. The rise in the value of the Canadian dollar versus the American precedes a downturn.
1 comment:
Most of what you posit is undeniably true but this time, the storm might not be as bad up here as it has been in the past.
Since Brian Baloney and Free Trade pretty well destroyed our manufacturing base - and it was lack of sales of manufactured goods to our great trading partner to the south, causing a lot of our economic problems during previous U.S. economic difficulties - the damage caused by Free Trade might ameliorate our collateral damage during this economic storm.
This time we have oil, gas, grain, diamonds, gold, wood etcetera and we can sell them to anyone. If the U.S. can't afford those things, it may not be a bad thing to expand our trade base.
China, anyone? They'll buy anything but unfortunately, they have zillions of U.S. dollars neither we nor they neither want nor need.
Post a Comment