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Originally Posted by Lurch
Why? I'm about 99.9% sure Canada denominates all of its debt in Cdn$$, so the exchange rate does not matter.
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I don't know if thats true or not, remember I'm not a fancy pants economic major
However most debts are created on the international stage and yes Canada measures its debt in terms of Canadian dollars, however when Canada took out it loans the Canadian dollar was worth about 20% less then it is now according to measurements of its own currancy, and I haven't seen a downward adjustment published on our national debt due to the increase in currency, so based on that I'm assuming that Canada should have logically reduced its overall national debt by the increase in the value of Canadian currancy.
I also believe that the World bank measures debt based on the benchmark dollar and the Canadian dollar has become equal to the U.S. dollar so Canada's repayment would theoretically work based around the Canadian dollar +20% value give or take a few percentage points.
But I could be wrong.
Quote:
Originally Posted by Lurch
Debt per person means little - it is debt as a portion of the economy that is generally held as the most important variable. Same as with a person - if you make $125k per year and have $50k in debt its a lot different than if you make $30k per year and have that same debt.
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I centainly don't disagree on this, on a local scale the Canadian economy is certainly strong, in a international scale the desirability to invest in the Canadian economy has taken a bit of a hit because its now more expensive to invest and manufacture goods in Canada on an international scale.
Quote:
Originally Posted by Lurch
By most measures, Canada is now in a superior position to the US, although the US problem is not really all that bad. Our net debt is now running at about 25% of GDP while the US is starting to push towards 40%. See Chart A2 in this link - Canada has improved from about 71% in 1995 to 25% today. Note that the chart includes all levels of government.
http://www.budget.gc.ca/2007/bp/bpa2e.html |
Oh I don't disagree on that in terms of international purchasing power, our dollar is equivalent so we can buy on an equivalent basis to the U.S. dollar and invest on an international level at the same equivalency. However the strong dollar does make Canada slightly less desirable as our costs of export goods and our cost of manufacturing goods has significantly increased over the past 6 months, and when your competing with nations with significantly lower valued currency your at a marked disadvantage.
But I could be completely wrong here.
Go easy on me.