When the U.S. economy tanks.

[canuckforpeace]

There seems to be a consensus that the U.S. economy is heading for "economic armegeddon". Will this spill over to our economy? Obviously trade will be effected but can we diversify our markets? Will our interest rates go up? Are we doomed as well or will a strong dollar cushion the blow?

[The Doctor.]

1. Excellent question!

That's been a petite project of mine for a bit now.

It deals more with reserve currency issues, but there's way more - I'll go get something for you.

{On Edit} - Here you go;

"The Canadian currency rose 1.4 percent this week, reaching 85.32 U.S. cents yesterday. It closed at 84.93 cents in Toronto, from 83.75 U.S. cents last week. One U.S. dollar buys C$1.1775. Canada's dollar has gained in 13 of the past 17 weeks and may end the year at C$1.14 against the U.S. dollar, or 87.72 cents, Laidi said."

http://www.bloomberg.com/apps/news?pid=10000082&sid=aONsLRnDoW2g&refer=canada

What this tells me is that the Canadian Dollar is inextricably tied to the European market righ now.

That's important.

Canadians would be able to enjoy a strong dollar in the US if the US had ever made an attempt to make Canadian Tourism to the US attractive.

Eventually this will help to balance the trade deficit anyway.

If the Canadian Dollar is indeed linked to European commerce (I'm not an authrity on that), then you'll see a viscious currency war unfurl.

If the US can invade enough countries to set monetary standards with regard to reserve currency - then the US dollar will cease it's freefall.

[justinsb]

2. It may be far worse than you think.

http://peace-action.inbyron.com/boycott.html
http://www.motherearth.org/USboycott/
http://www.stopusa.org/boycottnews.htm

There is serious discussion of a US Boycott modled on South Africa - and not just about Iraq. There is an international conference on it apparently happening in January.

[gater]

3. In a nutshell...

If we tank, the world tanks, if only due to the U.S debt load, but there is sooo much more that makes up the planet's economic web that would collapse. How well can you barter?

[The Doctor.]

6. No - I thought so too a while ago...

The US dollar can sink just fine.

The Euro will take it's place.

Countries will start to trade for and in Euros, it will become the new reserve currency. Western Europe will become a new economic superpower because the Euro will be set to world markets.

It's like an 'Automatic safety net'.

America will be in poverty, but it will be the regenesis of manufacturing.

I Speak French and a modicum of German - my family is ready to emmigrate. LOL


The problem is worse however.

We are about to have an energy crisis too.

He who scores Fusion first... wins.

[canuckforpeace]

8. I am lousy at bartering.

I guess someone else will be profiting at my expense.

[GOPFighter]

4. I assume the Canadian government has already studied this...

...and is developing some strategies to combat it? What I would worry most about is that when our economy tanks, lots of Americans are going to lash out at the rest of the world. Everyone who doesn't support the President and the war in Iraq will be deemed to be our enemy. Canada will be an easier target than France ad the rest of Europe.

I know. This sounds alarmist, but the extreme RW kooks seem to have been energized by this election.

[canuckforpeace]

9. Now you're scarin me! n/t

[The Crazy Canadian]

5. If US economy tanks, we'll feel it.

Our export oriented economy will suffer, i bet it's already hurting because of the appreciation of the CDN dollar vs. the US dollar. Interest rates should go down because i think the Central Bank wants downward pressure on the CDN dollar.

[justinsb]

7. Right Now

Canada is running a trade surplus with the US of 6-8 billion a month. We'll feel it to an extent but alot of what we sell they will buy even with a really bad economy; oil, natural gas, and other resource based products make up most of that 6-8 billion. It's not as if we're selling them TV Sets and Cars. Also, alot of that trade, were the US to stop, would be snatched up by China.

[canuckforpeace]

10. This is what I've been thinking too.

China has been very active behing the scenes building alliances with other countries and their industries. Although I don't relish the idea of China and India meeting our level of consumerism for environmental reasos, it seems that natural resources will continue to be in demand.

[justinsb]

11. What is shocking to me

Is that it's taken this long. The US has been spending, especially the last 4 years, like there is no tomorrow, the biggest generation in the history of man is retiring and these two things in combination would jar any economy - but if you look at the US economy: It's almost like when Wile E. Coyote is running with nothing but a 100 foot canyon beneath him and you point down and he finally looks and falls. The US lead the world in Manufacturing from say 1880-1980 - and always lead in manufacturing whatever the hot commodity was at the time: Textiles, Cars, Electronics etc, but when the rest of the world started to catch up the US offshored all of that to compete and went toward the information age - the US lead in that through most of the 90s but the rest of the world caught up faster on that one because there wasn't nearly as much infrastructre required and it didn't gobble resources like manufacturing. Now, with most of it's resources gobbled up by industrialization, manufacturing all but gone, and information technology moving as fast as it can get packed, what exactly is the US economy standing on and if the answer is facilitating trade; buying resources from country A -> turning them into finished products in country B and then selling them in Country C; if that's all the US economy is currently standing on, why on earth would any US 'leader' run around the world and see how many people he can piss off in 4 years?

[Spazito]

12. There will be an impact, no doubt, but given that our key exports...

to the US are oil, gas and electricity which they will need regardless of any other reduction of imports to the US due to a recession or depression, Canada will weather it fairly well. Canada has been developing key export relationships with Asia for years now and that is starting to pay off. The continuous 8 year budget surplus while the US is going ever deeper in debt is evidence of this, imo.