Quote:
Originally Posted by Mr.Coffee
I would think Canadian companies have some of the best technical expertise in order to exploit those reserves and furthermore we have world leading regulations in AB and BC that will optimize recovery and reduce environmental impacts.
The only thing I'm confused about here... is why Icelandic people using Canadian dollars in their grocery stores means they'll hire Canadian companies first (because really they won't, they'll probably hire the cheapest) and secondly, can somebody please explain to me what that dude means in the video posted by worth? He starts talking about exports and then says therefore because Canada exports lots of energy / agriculture we should use their dollar... like what is the connection there? Please tell me it isn't as simple as currency conversion dings by banks.. I legitimately don't get this.
|
That was two questions:
1) There would be an advantage for Canadian companies because there wouldn't be a currency conversion cost. It's small but an advantage nonetheless.
2) They would do better to use a currency that tracks international commodity values like the CAD because the fluctuations in the currency value would reflect the needs of their economy, which is also commodity-price dependant as they export fish, agricultural products, bauxite (Aluminum) etc..
It's good for the oil exporting part of the Canadian economy to have a high dollar when prices are high because then our dollar gets us more when we are buying equipment, it tempers inflation when we need it (the price at the pump is a lot less than it would be if we had a $0.65 dollar) and foreign investors pay more to make investments in our economy when they are driven to do so.
It's also good for our economy that when prices are low, the Canadian dollar is low because we make relatively more on our exports (more Canadian dollars per unit sold) which helps the internal economy. It tempers deflation and makes it more affordable for Canadians to invest/travel/do their buying in Canada when the economy needs it.
Because Iceland is similarly an exporting nation dependant on commodities, their currency needs mesh better with our dollar than the Euro or the USD, which are broader economies.