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作者: jkmax |
i doubt that bro......canada still got some hidden upcoming potential economic crisis and financial crisis....too bad not many canadians realize those....i mean..ppl just don't care.....well....at least BC ppl don't need to worry until after 2010 because the Olympic will boom the local economy instantly....
but i would love to see the day of $1 CDN = $1 USD coming though....kicking the US ass.. :good: :biglaugh:
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like i said, i didn't say that. i read that on financial post at campus today. here is the full article.
Economist sees loonie hitting par with US$1
Analyst says 30% devaluation of greenback coming
Jacqueline ThorpeFinancial Post
October 14, 2004
Forget US80 cents or even US85 cents -- one leading economist predicted yesterday the Canadian dollar could hit an even US$1 in the next 18 months, territory not seen since the mid-1970s.
Donald Coxe, global portfolio strategist at BMO Financial Group, said it is only a matter of time before the U.S. dollar succumbs to a second major down leg. "I believe we're going to see a significant devaluation in the American dollar," he told a luncheon for BMO Harris' private banking clients.
"At the recent IMF meetings in Washington, the figures being bandied about by officials there was that there is a further 30% [devaluation on a trade-weighted basis] coming, no matter who gets elected president," he said. "What that means, and I'm comfortable with it, is that we see par on the Canadian dollar some time in the next 18 months and we see the euro going to US$1.60."
The loonie has not been at par since late November, 1976, when the Parti Quebecois was first elected -- an event that frightened away international investors and many economists mark as the beginning of the loonie's long 30-year decline.
A rise to par would be a remarkable feat for a currency that has already risen 28% since hitting a record low of US61.79 cents in January, 2002. The dollar closed yesterday at US79.55 cents, down US0.03 cents.
It would also surpass even the most optimistic forecasts of other economists on Bay Street, which do not run not much higher than reaching US85 cents at the end of next year. BMO Nesbitt Burns' official forecast is for the loonie to reach US82.50 cents in 2005.
But Mr. Coxe said a major devaluation of the greenback is the only way the U.S. economy can hope to become competitive again and reduce its monster trade deficits, especially with China.
The U.S. current account -- the broadest measure of trade in goods, services and investment income -- is on track to end the year close to US$600-billion, or a record 5.4% of gross domestic product. The trade deficit with China alone is running at nearly US$15-billion on a three-month average basis.
"That's the one thing that is simultaneously taking away American jobs and preventing an increase in the salary of Americans," Mr. Coxe said.
Not only are U.S. economies fighting fierce competition from China but they are also burdened by high employee health care benefits, most of which they shoulder and which are rising at 13% or 14% a year.
Rising health care costs makes U.S. business particularly uncompetitive against Canadian companies, where the health care is taxpayer funded, Mr. Coxe said.
"When you're talking to people in the upper mid-West [the heart of U.S. manufacturing], it's Ontario and China they're focusing on," Mr. Coxe said. "So the only hope they have is a devaluation [of the U.S. dollar]. You can't give a pay increase in the upper mid-West when you've got to fight competition from China."
Another slump in the U.S. dollar is not the only thing that will be driving the Canadian dollar higher, Mr. Coxe said.
Soaring commodity prices, thanks to China, will also play a part.
While commodity prices have wobbled in recent days on speculation the Chinese economy is cooling, Sherry Cooper, chief economist and global economic strategist at BMO Financial, said the country is not about to bust.
Ms. Cooper forecasts a drop in growth to around 8.5% from recent peaks around 9.%.
"This is truly the sweet spot for Canada," Ms. Cooper said, forecasting further investment by Chinese companies in the Canadian economy.
"That's the one thing that is simultaneously taking away American jobs and preventing an increase in the salary of Americans," Mr. Coxe said.
Not only are U.S. economies fighting fierce competition from China but they are also burdened by high employee health care benefits, most of which they shoulder and which are rising at 13% or 14% a year.
Rising health care costs makes U.S. business particularly uncompetitive against Canadian companies, where the health care is taxpayer funded, Mr. Coxe said.
Another slump in the U.S. dollar is not the only thing that will be driving the Canadian dollar higher, he said. Soaring commodity prices, thanks to China, will also play a part.
While commodity prices have wobbled in recent days on speculation the Chinese economy is cooling, Sherry Cooper, chief economist and global economic strategist at BMO Financial, said the country is not about to bust.
Ms. Cooper forecasts a drop in growth to around 8.5% from recent peaks around 9.%.
© National Post 2004 
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CanWest Global Communications Corp. All rights reserved.
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