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-- Dollar Hits $1.07 US
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This bodes well for my vacation next week! I'm going to be extra irresponsible in Vegas... afterall, it's not real money!
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| Originally posted by Moral Hazard afterall, it's not real money! |
i just wish i had money to take advantage of this..
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| 7 Countries Considering Abandoning the US Dollar (and what it means) It�s no secret that the dollar is on a downward spiral. Its value is dropping, and the Fed isn�t doing a whole lot to change that. As a result, a number of countries are considering a shift away from the dollar to preserve their assets. These are seven of the countries currently considering a move from the dollar, and how they�ll have an effect on its value and the US economy. 1. Saudi Arabia: The Telegraph reports that for the first time, Saudi Arabia has refused to cut interest rates along with the US Federal Reserve. This is seen as a signal that a break from the dollar currency peg is imminent. The kingdom is taking �appropriate measures� to protect itself from letting the dollar cause problems for their own economy. They�re concerned about the threat of inflation and don�t want to deal with �recessionary conditions� in the US. Hans Redeker of BNP Paribas believes this creates a �very dangerous situation for the dollar,� as Saudi Arabia alone has management of $800 billion. Experts fear that a break from the dollar in Saudi Arabia could set off a �stampede� from the dollar in the Middle East, a region that manages $3,500 billion. 2. South Korea: In 2005, Korea announced its intention to shift its investments to currencies of countries other than the US. Although they�re simply making plans to diversify for the future, that doesn�t mean a large dollar drop isn�t in the works. There are whispers that the Bank of Korea is planning on selling $1 billion US bonds in the near future, after a $100 million sale this past August. 3. China: After already dropping the dollar peg in 2005, China has more trouble up its sleeve. Currently, China is threatening a �nuclear option� of huge dollar liquidation in response to possible trade sanctions intended to force a yuan revaluation. Although China �doesn�t want any undesirable phenomenon in the global financial order,� their large sum of US dollars does serve as a �bargaining chip.� As we�ve noted in the past, China has the power to take the wind out of the dollar. 4. Venezuela: Venezuela holds little loyalty to the dollar. In fact, they�ve shown overt disapproval, choosing to establish barter deals for oil. These barter deals, established under Hugo Chavez, allow Venezuela to trade oil with 12 Latin American countries and Cuba without using the dollar, shorting the US its usual subsidy. Chavez is not shy about this decision, and has publicly encouraged others to adopt similar arrangements. In 2000, Chavez recommended to OPEC that they �take advantage of high-tech electronic barter and bi-lateral exchanges of its oil with its developing country customers,� or in other words, stop using the dollar, or even the euro, for oil transactions. In September, Chavez instructed Venezuela�s state oil company Petroleos de Venezuela SA to change its dollar investments to euros and other currencies in order to mitigate risk. 5. Sudan: Sudan is, once again, planning to convert its dollar holdings to the euro and other currencies. Additionally, they�ve recommended to commercial banks, government departments, and private businesses to do the same. In 1997, the Central Bank of Sudan made a similar recommendation in reaction to US sactions from former President Clinton, but the implementation failed. This time around, 31 Sudanese companies have become subject to sanctions, preventing them from doing trade or financial transactions with the US. Officially, the sanctions are reported to have little effect, but there are indications that the economy is suffering due to these restrictions. A decision to move Sudan away from the dollar is intended to allow the country to work around these sanctions as well as any implemented in the future. However, a Khartoum committee recently concluded that proposals for a reduced dependence on the dollar are �not feasible.� Regardless, it is clear that Sudan�s intent is to attempt a break from the dollar in the future. 6. Iran: Iran is perhaps the most likely candidate for an imminent abandonment of the dollar. Recently, Iran requested that its shipments to Japan be traded for yen instead of dollars. Further, Iran has plans in the works to create an open commodity exchange called the Iran Oil Bourse. This exchange would make it possible to trade oil and gas in non-dollar currencies, the euro in particular. Athough the oil bourse has missed at least three of its announced opening dates, it serves to make clear Iran�s intentions for the dollar. As of October 2007, Iran receives non-dollar currencies for 85% of its oil exports, and has plans to move the remaining 15% to currencies like the United Arab Emirates dirham. 7. Russia: Iran is not alone in its desire to establish an alternative to trading oil and other commodities in dollars. In 2006, Russian President Vladmir Putin expressed interest in establishing a Russian stock exchange which would allow �oil, gas, and other goods to be paid for in Roubles.� Russia�s intentions are no secret�in the past, they�ve made it clear that they�re wary of holding too many dollar reserves. In 2004, Russian central bank First Deputy Chairmain Alexei Ulyukayev remarked, �Most of our reserves are in dollars, and that�s a cause for concern.� He went on to explain that, after considering the dollar�s rate against the euro, Russia is �discussing the possibility of changing the reserve structure.� Then in 2005, Russia put an end to its dollar peg, opting instead to move towards a euro alignment. They�ve discussed pricing oil in euros, a move that could provide a large shift away from the dollar and towards the euro, as Russia is the world�s second-largest oil exporter. What does this all mean? Countries are growing weary of losing money on the falling dollar. Many of them want to protect their financial interests, and a number of them want to end the US oversight that comes with using the dollar. Although it�s not clear how many of these countries will actually follow through on an abandonment of the dollar, it is clear that its status as a world currency is in trouble. Obviously, an abandonment of the dollar is bad news for the currency. Simply put, as demand lessens, its value drops. Additionally, the revenue generated from the use of the dollar will be sorely missed if it�s lost. The dollar�s status as a cheaply-produced US export is a vital part of our economy. Losing this status could rock the financial lives of both Americans and the worldwide economy. |
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| Originally posted by jennypie Don't tell the hookers that! |
WOW...
the dollar took a nose dive at the end of the day.
Started at $1.08...went past $1.10...and ended at $1.75
WTF lol
Talk about fluctuation!
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| Originally posted by exstasie ..and ended at $1.075 |
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| Originally posted by exstasie WOW... the dollar took a nose dive at the end of the day. Started at $1.08...went past $1.10...and ended at $1.75 WTF lol Talk about fluctuation! |
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| Originally posted by geroin then 2 of us will be winners! |
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| Originally posted by Skipper If you like short term gain for long term loss, yes |
Short term being immediate shopping benefits
Long term being overall prosperity and stability of the canadian economy
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| Originally posted by Skipper Short term being immediate shopping benefits Long term being overall prosperity and stability of the canadian economy |
If the high canadian dollar is going to drive out sectors other than those related to natural resources, then we are putting far too many eggs in one basket. Diversification is never a bad thing, particularly when it comes to finite resources.
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| Originally posted by Skipper If the high canadian dollar is going to drive out sectors other than those related to natural resources, then we are putting far too many eggs in one basket. Diversification is never a bad thing, particularly when it comes to finite resources. |
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| Originally posted by SuperJimbo Agreed. But who ever said the political/economic/business leaders (not to mention entrepreneurs) in this country will not respond intelligently to this shifting landscape? My bet is we will. |
I work in the US and live in Canada
With the dollar being so damn high it fuckin sucks!
It would be great if it went down to like $0.65 or so..lol...then I would be getting an automatic raise! 
EVERYTHING ELSE ASIDE.....
EBAY ROXORZ RIGHT NOW!!!! PAID 60% LESS THAN LOCAL RETAIL, ON AN ITEM I'VE WANTED FOR A LONG TIME!!!
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| Originally posted by slingshot I concur. Alot of these issues are already being addressed by the SPP(the likes of those you just mentioned). Also, since when were the economic prospects of a country with a strong dollar bleak? The Swiss seem to be doing just fine. |
If you go shopping to the United States for the day, how much are you allowed to bring back without being taxed... (Not counting all the stuff that i'll be wearing and have in my pockets lol)
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| Originally posted by Skipper The loonie's sudden rise is hugely destablizing for Canada's economy. The dollar's rapid gain is soon going to act as if a huge tariff wall was just erected against every good or service Canadians export. Maybe even more seriously, it will act as if an actual ban has been slapped on Canadian exports worldwide. Our export earnings - - and we are a trading nation - - are about to take a huge dive. The resulting loss of jobs and inability to earn dollars from selling abroad will rapidly cool our economy across the country, including even a modest slowdown in Alberta. It is the speed with which this has all happened that is quite frightening - - no one has time to adjust or plan if you are an exporter of any manufactured good, a forestry company, in the auto business or a retailer in a shopping mall in any city in the country. I for one am not comfortable seeing the dollar go up like a rocket when there are no fundamentals supporting it's rise above par with the US dollar. |
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| Originally posted by Skipper I don't know much about Swedish trade, but I know that the US is our biggest trading partner and when our products get this much more expensive, it is NOT good for the cdn economy! There is a good discussion on the globe and mail's website today attached to the article about the dollar hitting 1.07 and one reader sums things up perfectly -- The loonie's sudden rise is hugely destablizing for Canada's economy. The dollar's rapid gain is soon going to act as if a huge tariff wall was just erected against every good or service Canadians export. Maybe even more seriously, it will act as if an actual ban has been slapped on Canadian exports worldwide. Our export earnings - - and we are a trading nation - - are about to take a huge dive. The resulting loss of jobs and inability to earn dollars from selling abroad will rapidly cool our economy across the country, including even a modest slowdown in Alberta. It is the speed with which this has all happened that is quite frightening - - no one has time to adjust or plan if you are an exporter of any manufactured good, a forestry company, in the auto business or a retailer in a shopping mall in any city in the country. I for one am not comfortable seeing the dollar go up like a rocket when there are no fundamentals supporting it's rise above par with the US dollar. |
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| Originally posted by SuperJimbo Anyway, there are enough sound arguments on both sides to make your head spin. Personally, I am very skeptical when I read the newspaper or listen to people express their opinions about this topic, as almost everyone has a vested interest in one argument or the other, or really just aren't qualified to make a rationale assessment |
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| Originally posted by SuperJimbo In the examples above (automotive/manufacturing/forestry sectors) don't just think about the Canadian exporters. Consider how difficult it might be for (US) importers to unwind contracts with Canadian companies. Especially if they are multi-year, multi-million or billion dollar contracts. It's just not that simple. Depending on the industry, it could be very difficult to find replacement suppliers, let alone ones that have the skills or expertise reuired AND have excess capacity. These types of structural shifts in the economy and across industries will take years, not days. Anyway, there are enough sound arguments on both sides to make your head spin. Personally, I am very skeptical when I read the newspaper or listen to people express their opinions about this topic, as almost everyone has a vested interest in one argument or the other, or really just aren't qualified to make a rationale assessment -- present company (i.e. ME) included. |
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| High dollar hammers profits Magna, Manulie and AbitibiBowater lead list of companies blaming currency for reduced earnings GREG KEENAN , BERTRAND MAROTTE and TARA PERKINS With a file from reporter John Partridge November 7, 2007 From food and financial services to forest products and auto parts, the soaring dollar has created upheaval for Canadian businesses in the third quarter. Magna International Inc., Canada's biggest auto parts maker said yesterday it has closed some Canadian plants and shifted the work to Mexico, the country's largest life insurance company took a $56-million currency hit and losses deepened at a forest industry giant as the dollar neared parity in the three months ended Sept. 30. That was before it reached the magic level of equality with the U.S. dollar, let alone the eye-popping value of $1.0852 (U.S.) hit yesterday. Manulife Financial, AbitibiBowater Inc., dairy giant Saputo Inc. and CI Financial also blamed the soaring currency for diminished results in their latest reports. Magna said the currency's rise has already forced it to shut some operations in Canada and shift work to Mexico and the U.S. There may be more to come, Magna said. "Certainly some of our Canadian plants have come under pressure and the result so far has been unfortunately a shutdown of some facilities in Canada with a move into other jurisdictions including Mexico, the United States, as well as Asia," Magna's chief financial officer Vince Galifi said during a conference call. Mr. Galifi would not identify any plants closed, but news releases earlier this year announced the shutdown of a plant in Aurora, Ont., and another in London, Ont. "As a result of the continued increase in the value of the Canadian dollar relative to the U.S. dollar, our Canadian manufacturing facilities may have greater difficulty competing with facilities located outside Canada," the company said. Mr. Galifi's comments came as Magna issued a warning about the potential impact of the dollar's rise. The warning came even as Magna reported profit surged more than 65 per cent in the quarter from year-earlier levels. At Manulife, currency fluctuations lopped $56-million off its third-quarter bottom line, which still came in at $1.07-billion, up 10 per cent from a year ago. On a conference call, chief executive officer Dominic D'Alessandro said the firm will ask its shareholders again if they would prefer the company switch its reporting currency to the U.S. dollar. "It's something that could be easily accommodated," Mr. D'Alessandro said. "I'm sure you could program your little machine there, and just multiply all the numbers by 108 over 100 or vice versa, and get all the numbers in U.S. dollars if it's a fixation." Chief financial officer Peter Rubenovitch acknowledged the dollar is going to make it hard for the firm to meet targets if the strength keeps up. "I would say, obviously, the [Canadian] dollar-reported earnings can't rise at our target pace if you've got to carry 10- or 15-per-cent change in the exchange rate. But, that's not likely to be a sustainable burden." Mr. D'Alessandro said Manulife had been planning on the dollar being over par "but certainly not $1.08." The currency swings helped push losses at Abitibi-Consolidated Inc. to more than double those of a year earlier, before one-time items, in the firm's final quarter before it merged with Bowater Inc. to create AbitibiBowater. The combined entity will be North America's largest newsprint producer and a major player in pulp, lumber and commercial paper. "The results for the quarter are a reflection of the challenging market conditions and impact of the Canadian dollar," said John Weaver, president of the new firm, who added it is going to reassess its operations in a major overhaul and debt-slashing exercise that could include asset sales. James Rowland of Montreal-based Canadian Paper Analyst said the merged firm's Canadian mills are going to have a tough time in the corporate review given they no longer enjoy the competitive advantage of a low dollar. "A lot of them will be offside on the cost curve," Mr. Rowland said. Quebec-based operations will also be under the gun because of the difficult softwood fibre supply situation in the province, he added. "It's coming down to crunch time and there are going to be some closure announcements," he said. "It's going to be painful for the next year or two." Profit improved at dairy products maker Saputo Inc., but the strong dollar reduced revenue by $29-million. CI Financial Income Fund also reported improved results, but pointed out the loonie's climb reduced market returns measured in Canadian dollars. Although the S&P 500 index and the Dow Jones industrial average rose by 2 and 4.2 per cent, respectively, during the quarter, this translated to losses of 4.2 and 2.2 per cent, respectively, in Canadian dollar terms. Feeling the pain How the soaring loonie is having an impact on Canadian companies. Rona Inc. The home improvement retailer says the appreciation appears to be encouraging Canadian consumers to delay home renovation projects in favour of travelling abroad. Sears Canada Inc. It became the latest retailer to reduce some prices, saying it has cut some of its regular prices on a permanent basis because of the strong dollar. Calfrac Well Services Ltd. The company says the strong dollar - as well as uncertainty about Alberta's new royalty regime and low natural gas prices - "will continue to negatively impact drilling levels in the Western Canadian Sedimentary Basin throughout the remainder of the year and, potentially, into 2008." Noranda Inc. It reported weaker earnings amid lower zinc recovery, hedging losses, a lower volume of zinc metal sales - and a stronger Canadian dollar. |
The Amero will save us. LOL
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| Originally posted by harcourt The Amero will save us. LOL |
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