Quote:
Originally Posted by McG
i defer to your understanding of delinking from the us economy, however i am challenged by the concept that china or india will pick up the slack. if this were true, we would already be selling to these countries at the level required to pick up the slack. i don't doubt that it could happen, however the costs associated with transporting goods may have an impact. on the other hand, the japanese buy coal from canada and ship it back as high quality steel...so maybe transport isn't that big a deal.
you have actually created an area of interest in my head. i am going to check with my guys tomorrow and ask what they see happening with delinking.
at the end of the day, this is about risk. hmmm...this certainly isn't the topic i expected to be discussing on the mighty CP!
|
Remember though that India or China doesn't have to literally buy OUR barrel of oil. (Oil = any other finite resource)
If India or China (among others) out bids America for a barrel of oil from Saudi Arabia or Qatar, for example, that America WOULD have bought in prior years, America STILL needs a barrel of oil. Thus our barrels of oil have a higher intrinsic value.
America does get a discount if our oil is of lower quality (it usually is) and for being our primary market, but there is still underlying demand (and demand growth) from 'new' oil consumers around the world like never before.
Likewise, most O&G countries in the world (with a few notable exceptions) are actually having their exportable outputs decline year over year (both from increased domestic consumption and maturing reserves). Canada, being ourselves one of those notable exceptions, thus takes on a more and more critical role in picking up the slack. So Canadian dollar growth can be linked not just to energy resource revenue happening today, but to expected growth AND increasing American DEPENDENCE (dependence is a strong thing, far more so than USA discretionary consumer goods demand) in the future.
Claeren.