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Loading ...Ah, the US Peso. One of my favourite things to watch and comment on as most of us do here above the 49th in the Land of the True North. Watched as much as it is to ensure that the retailers here are aware that we’re aware of the relative value of our goods and less than willing lately to pretend that it’s 2000 and the dollar is something like 68 cents.
However, all this meteoric rise (I hope that you paid attention all last spring and summer when I was talking about how well FXC was and would do) has brought out the jawboners starting first from the manufacturing groups and making it’s away all the way to Prime Minister Harper’s mouth.
A Change in the Wind
But, this blogger, though light in the way of posts recently, has noted a chnage in the tenor of the discussion with the meme being brought more and more to the front that “it’s time for Canada to move on and find new business” as in this morning’s Star article which had a text of “wean yourself now” with an example of the absolute correct bit of action to take:
From 2002 to 2007, as the loonie soared above 60 cents (U.S.) to beyond $1.00, the company cut staff and expenses and bought more materials in U.S. dollars. It even coaxed global customers to use Canadian dollars to buy its specialty wheels and casters, found everywhere from automotive shop floors to sets for Cirque du soleil.
But that’s not All:
A new consensus is beginning to take place amongst the Canadian MSM and it’s pretty much summed up with this idea, this is a golden opportunity for Canada to take it’s proper place as one of the firmest economies in the G7 and in the world.
“What’s wrong with the dollar weakening?” said Sophia Drossos, a currency strategist at Morgan Stanley in New York and a former economist at the U.S. Federal Reserve
. “There needs to be a rebalancing. I think it’s moving in the right direction.”
….
The Australian move triggered expectations other countries will eventually follow suit, including Canada. Though the Bank of Canada has said it expects rates to remain at rock-bottom levels until next summer, there is upward pressure on some rates. Just Tuesday several major Canadian banks hiked five-year mortgage rates by 0.35 percentage points to 5.84 per cent.
….
“This is what you would expect with a transition like this from one region to another,” said Daniel Bain, president and chief investment officer at Thornmark Asset Management Inc. in Toronto. “When currencies move, they move in broad trends. I don’t see anything that is going to shift away from current trends.”
….
That Is Reality
Canadian banks aren’t even waiting on Mr. Carney to increase rates – they’re doing it themselves, essentially propelling the Canadian economy into the same process of recovery that has led Oz to become point man for the global recovery from what I like to call the ‘American Winter’.
While you will have Karl ‘Doom Doom’ Denninger talking about ‘this is the end of everything – if America goes down you all go down” interspliced with his shifting timeline for a ‘major crash’ (note it’s moved from “soon very soon” to “perhaps in the next cycle” aka next 4-20 years) or Mish prattling on about how we’re in a “Deflationary Age”, the fact is that the momentum of money is moving outside the US and the centre, is finally shifting as I predicted a year or so ago it would.
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