Quote:
Originally Posted by Bagor
So ... if I'm right in interpreting the answers to this thread, they're basically doing the same as the Zim government and are essentially diluting the economy. Should we expect the $US to drop in the next while? (not suggesting it's anywhere as bad as the $Zim)
http://forum.calgarypuck.com/showthr...ght=economists
Questions:
Anyone speculate as to how much?
Will it drag the loonie down with it?
If it doesn't does it make sense to buy a chunk of $US at the drop? |
It's impossible to have a guess as to what it will do, either way. As you point out, history would suggest that it will drop, but the US seems to have ways of avoiding currency collapses.
If it does drop, Canada will begin to look for other trading partners. It's already being done with China (huge new port being opened in BC) and other developing Asian countries. Our dollar is coupled to commodities, obviously, so as long as there's a thirst for oil, pot-ash, and mining deposits Canada will be alright. Not saying it wont fluctuate.
Don't touch US currency with a 10 foot pole, IMO. Anyone out there saying it's a good time to buy anything do with with the US, be it real estate, currency or stocks is being overly optimistic. A lot of what you'd read from sites like Seeking Alpha, Bloomberg and even the Economist are way to narrow minded to be trusted in a situation like this. It's become evident they still see stocks as entities detached from other US economic problems.
Keep in mind this bailout (errr rescue plan) isn't fixing the problem, it's putting a band-aid over it.