Quote:
Originally Posted by Lurch
I think Lanny trotted this out a while back - it is ridiculous really, but economic forces may end up moving the market in this direction to some extent. However, given that both the US and China will likely want to trade oil in US$ for the forseeable future, I think it will be a peripheral drag on the currency, not a catclysmic event.
I think the insider sales simply reflect a common view that we are at the end of a bull run and stock prices are high right now.
The big problem the US has IMO is that the currency float they have with the world implies a huge call on their productive capacity and standard of living. If you think about it, US$ outside the US simply indicate that the US owes the world hard goods that their economy will have a hard time producing without huge inflation. The US$ will need to fall when these notes start coming home, US imports will dry up (huring Canada) and US exports will shoot through the roof (also hurting Canada in areas where we compete).
This is the area that Harper has absolutely driven me nuts of late. He has to be smart enough to see the problem, but he has been busy putting our business relationship with China in the toilet and putting more eggs in the sinking ship, to badly mix metaphors.
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Some points.
US imports drop and it hurts a whole LOT of countries including and very, very much so China. If the USA economy had some sort of huge crunch methinks the devastation would be worldwide.
China is a difficult market as well as many companies have discovered.
Plus I would expect that if the US dollar came tumbling down the Canadian dollar would likely drop as well.
A lot of factors with globalization and the dependency of countries on each other is scary.