A humiliating example of Canadian political bungling for the past 25 years has been the yearly decline in the value of the Canadian dollar. The Canadian dollar has lost one or two cents each year compared to the US dollar. These days (March 27th, 2001) $100 Canadian = $63 US. Thirty years ago when Canadians were all proud, $100 C was = $110 US. Therefore the Canadian dollar has dropped about half its value in that time. Because the slide has been gradual -- one or two cents a year -- there has been zero political backlash. This has signaled the tax-and-spend Liberals that they should increase their taxing and spending. They have disregarded the constant decline of the Canadian dollar, the $600 billion national debt, the brain drain to the US, HRDC and CIDA giveaways of billions of taxpayers dollars to friends and socialist causes. The Liberals are totally committed to their international socialist politically correct agendas.
During a hot week in July 1998 when the usual plunging Canadian dollar slid to US $ .6698 US, the Liberals reacted by announcing they would spend $46.8 million to hunt Nazi war criminals -- all old guys in their 80s and 90s from a war that few Canadians remember. This is a government that will jump through hoops to direct public attention away from the value of the $C.
A third of all Canadian taxes go to pay the interest on the $600 billion national debt -- not a penny off the principal. Canadians are the most overtaxed citizens in the industrialized world. They are not tax-free until August every year. In the socialized tax-and-spend world of the Liberals, this is normal. The Americans are tax free in the middle of May each year. Canada's productivity, competitiveness, extraordinary high taxes and the value of $C is the last thing on their minds as CIDA searches the world for more refugees and more international socialist programs. They feel that they have an obligation to the poor and destitute of the world and the Liberals should be judged by their good intentions at the UN, not the value of $C, not the extremely high taxes that Canadians have to endure or the brain drain to the U.S.
They would rather let the $C depreciate. It means nothing when compared to their international socialist commitments. The Canadian dollar is 100% Canadian. It is the Americans who should be blamed for allowing the US dollar to go so high. Blame the Americans. They should tax and spend more and their $US would slide like the $C. And the sad part of this already sad story is the Liberals have goten away with it and just been reelected so they can do no wrong.
Eleven European countries adapted a common currency called the euro on advice from (Canadian) Robert Mundell. Currency speculators cannot now play the French frank against the German mark or any of the other 11 European currencies. The currency speculators have avoided the euro since it was adapted. Robert Mundell got the Noble Prize for his assistance and advice. Ottawa refused this advice.
The educated economists have a hundred reasons, buzzwords, statistics and charts to explain how everything is interlocked and why the Canadian dollar is in constant decline while the currency speculators, like vultures, await the outcome. It doesn't take an expert to figure this out. The tax-and-spend politicians in Ottawa just do what they love to do.
As the Canadian dollar declines and the Mexican peso increases in value, there is a date in the future when they will pass each other, like two elevators, the Canadian dollar going down and the Mexican peso going up. There will be a special door prize for the person who can guess that date.
According to Canadian Prof. Robert Mundell, 1999 Nobel prize winner in economics, special advisor on the euro, developer of open economic theories, (Who is shunned by Ottawa politicians) Canadians should have the same currency as the US or the Canadian dollar should be fixed to the US dollar and we should have a genuine free trade area. He also believes that tax reductions spur economic growth.
These economic theories that worked so well when Prof. Mundell advised Ronald Regan and the Europeans are anathema in Ottawa. (But George W Bush was listening) This type of sound economic advice might curtail the Liberals spendthrift and socialist policies in Ottawa. God help Canada because the Liberals will help themselves.
Another Canadian web site that mentions the piss poor Canadian dollar
The slow tortuous decent of the Canadian dollar towards 50-cents US has been going on for 25 years. It hasnt reached 50 cents US yet but seems bound and determined to get there and the slow tortuous decent is mind numbing. The timetable of this descent has been as predictable as the phases of the moon. It shackled Canadians to a sinking ship as it sunk one or two cents a year. The pain and humiliation increased as the decent got deeper and was all the more distressful to Canadians who remembered when the $C was worth $1.10 US. The brain drain to the US increased, as the gap got wider. The propaganda of our socialist politicians in Ottawa has always been predictable.
"Its holding its own," they said. Or "Everything is in order."
It remains to be seen how far down the $C will descend before Canadians will finally react. Will they still have confidence in Canadian currency as the Canadian dollar descends below 50-cent US and is still sinking?
The bureaucrats try to point out the comparison between the loonie and other currencies in an effort to divert public attention away from the widening gap between the $Canadian and the $US dollar.
Canadians compare the $C to the $US because they live next-door to the Americans along a 2,000-mile border. Canadians do not compare the Canadian dollar with other currencies because they are usually in other continents and far away.
Our current politicians in Ottawa are out of touch with reality and locked into their own socialist-communist world where social programs, equalization payments, pre-election handouts, HRDC handouts, and CIDA giveaways are more important than the $600 billion national debt. They love the collective -- programs and money for every identifiable group, club, culture and deviate organization in Canada. Individual Canadians mean nothing. And Canadians themselves delude themselves when they think that the value of their property has increased when in reality it has decreased because of the sinking Canadian dollar.
It remains to be seen at what point Canadians will loose confidence in the ever-sinking loonie -- 63 cents US recently -- the lowest value since the Canadian dollar was established. You might think that this would spur the Canadian Government into showing some pride and doing something about the ever dropping dollar. But international socialists as they are, have other interests.
When will the Canadian Government peg the Canadian dollar to the US dollar or adapt the US dollar. Dollarization is the name of the new economic reality. Countries have to adapt to this reality of the ever-expanding global economy. Socialist politicians locked to their socialist dream worlds will have to realize that they just cannot spend spend spend on endless socialist programs in Canada, the UN and the world. Argentina and Ecuador have already adapted dollarization.
Is it possible that the Liberals think that there will never be a public reaction as the $C slips down past 50 cents US on its way to nowhere and no value. Is it possible that the socialist-party-disciplined dunderheads in Ottawa are completely blind to economic reality? It is indeed possible.
The Canadian government does not appear to know what to do about the value of the Canadian dollar = 63-65 cents US. There was a time, not so long ago, when Canadians were proud and the Canadian dollar was worth $1.10 US. The Canadian dollar has dropped by half its value since then. Government propaganda keeps telling us that the weak Canadian dollar is good. Its a boost to the Canadian economy they say.
"Its good for tourists," Chretien said last year.
Therefore as it gets weaker it will be even better. Working on that assumption, it will be fantastic when its value drops to 10 cents US.
I would like to know what happens when the value of the Canadian dollar hits zero?