September 25, 2007
The Rise of the Loonie
In no way is this due to any incompetence on the part of the American government. It is instead a testament to the strong Canadian government, led by that guy who defeated that other guy last year or maybe the year before. The Canadians also have a fine Chancellor of the Exchequer, or is that England? Never mind.
Nevertheless, many Americans, at least those who can locate Canada on a map, are certainly worried. Just think of the ramifications this could have for the entire United States economy, not to mention the American League East, where the Blue Jays suddenly may have a lot more money to spend next year. With the favorable exchange rate, a Canadian hockey team might even be able to win the Stanley Cup, rather than one of those teams from balmy places where fans think ice is just something you put in a drink.
Meanwhile, the White House was not nearly as worried. President Bush expressed confidence in the U.S. economy during a press conference on Thursday. “The fundamentals of our nation’s economy are strong,” he announced, though his confidence may have stemmed mostly from his mistaken belief that the Canadian dollar had achieved parody instead. Considering the Canadian dollar goes by the name of the loonie, this was probably an honest mistake.
Still, it's a big news story north of the border. I'm sure all the Canadians you know are talking smack about this, although in a polite, non-threatening way, of course. Frankly, Bill Shatner was insufferable when I saw him over the weekend. It was just an old episode of Star Trek and he wasn't really talking about the Canadian dollar, but he was still insufferable.
A strong Canadian dollar could also mean an influx of Canadians crossing the border, looking for a bargain in the United States. Let's just say that Fargo, North Dakota is going to be one hopping hotbed of Canadian bargain hunters. This is probably a good thing for the U.S. Think about it. On one side, you'll have young, vibrant Canadians coming to America to shop. On the other, you'll have elderly Americans crossing into Canada for cheap prescription drugs and free health care. You tell me which side the party will be at.
As much as Canadians like to think that this is all about them -- as if there is no other country in the freakin' world -- many experts on both sides of the border feel that this change has more to do with the United States than Canada. The U.S. dollar is down across the board, due to the Federal Reserve's decision to lower interest rates last week, the continuing U.S. housing crunch, and several other important factors that I don't understand either.
While Canadians may be happy at the newfound respect for the loonie, the weak U.S. dollar will apparently have some adverse effect on Americans. As The New York Times pointed out on Friday, "Americans will have to pay more while on vacation in Paris or when buying snowmobiles made in Quebec." Luckily, I wasn't planning to buy a snowmobile made in Quebec, and I already couldn't afford a vacation in Paris, so it looks like I dodged a bullet on this one.
Still, you may not be so lucky. Your lifelong dream of motoring a Bombardier down the Champs-Elysees may have to wait. There's always next year.
©2007 Joe Lavin