本文发表在 rolia.net 枫下论坛I agree with you that US dollar has been very strong against almost all of the major currencies. And it is overvalued.
When we talk about export/import, we have to take into account the capital account. US has been running big trade deficit for a long time. If a country or a person spends more than they make, eventually they will go bankrupt. Argentina is an example. The reason that it hasn’t happened to US yet is because its capital account offsets its current account that includes trade.
US’s financial market has been attracting tons of money. As long as more people want to invest in US, US dollar is in high demand and it will maintain strong position.
US currency adopts floating system, which means the rule of demand and supply applies, though the government can intervene by changing money supply. It is a perplexing issue to economists and policy makers. There are lots of discussions of devaluating dollar due to pressure from trade deficit. But it may not achieve what they want; instead it might depress the economy.
US is the biggest trade partner to Canada, which accounts for 87% of Canadian export. If a country has that large export/import percentage to a single partner (87%/76%), you can understand how significant effect the currency issue will have on Canadian economy.
From 1991 to 2000, Canadian wealth has been taken away 20% and keeps sliding.
It is a complex issue. I don’t have a full handle on that. If I were able to predict the exchange rate, I would make a fortune.
Weak currency reflects weak economy. The wealth of a nation depends on its competitiveness. I just read a working paper by Roger Martin, Dean of business school of University of Toronto. It is well written and co-authored by Michael Porter from Harvard. If you are interested, you can take a look.
If Canada doesn’t change its thinking and policies, I would not hold my money all in Canadian dollar, would you? Whether Canada should adopt US dollar or not is still to be determined, we will see.
I hope you don’t mind I exchange my thoughts with you. :-))更多精彩文章及讨论，请光临枫下论坛 rolia.net
When we talk about export/import, we have to take into account the capital account. US has been running big trade deficit for a long time. If a country or a person spends more than they make, eventually they will go bankrupt. Argentina is an example. The reason that it hasn’t happened to US yet is because its capital account offsets its current account that includes trade.
US’s financial market has been attracting tons of money. As long as more people want to invest in US, US dollar is in high demand and it will maintain strong position.
US currency adopts floating system, which means the rule of demand and supply applies, though the government can intervene by changing money supply. It is a perplexing issue to economists and policy makers. There are lots of discussions of devaluating dollar due to pressure from trade deficit. But it may not achieve what they want; instead it might depress the economy.
US is the biggest trade partner to Canada, which accounts for 87% of Canadian export. If a country has that large export/import percentage to a single partner (87%/76%), you can understand how significant effect the currency issue will have on Canadian economy.
From 1991 to 2000, Canadian wealth has been taken away 20% and keeps sliding.
It is a complex issue. I don’t have a full handle on that. If I were able to predict the exchange rate, I would make a fortune.
Weak currency reflects weak economy. The wealth of a nation depends on its competitiveness. I just read a working paper by Roger Martin, Dean of business school of University of Toronto. It is well written and co-authored by Michael Porter from Harvard. If you are interested, you can take a look.
If Canada doesn’t change its thinking and policies, I would not hold my money all in Canadian dollar, would you? Whether Canada should adopt US dollar or not is still to be determined, we will see.
I hope you don’t mind I exchange my thoughts with you. :-))更多精彩文章及讨论，请光临枫下论坛 rolia.net