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Impact of US dollar collapse on Canada
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TOPIC: Impact of US dollar collapse on Canada
Impact of US dollar collapse on Canada 3 Years, 9 Months ago Karma: 11
Hi everybody,

I want folks to chime in here about what they think the outcome of a US dollar collapse will have on us Canadians.

My train of thought goes something like:

The Canadian dollar will initially strengthen significantly against the US dollar as it begins to collapse, and safe-haven conversion of US dollars into CDN dollars by Americans will exacerbate this.

As in the US, Canada's service-based economy depends largely on debt and consumption, though also to a large extent on exports of raw materials to the United States. In a US dollar collapse scenario, exports to the US would collapse in Canada and export-oriented manufacturing jobs would begin to contract, even as the loonie's purchasing power increases.

At this point, Mark Carney would have to make a key decision:

(1) allow the Loonie to continue to appreciate against the US, while manufacturers retool and rebuild trade relationships with Europe and Asia to replace greatly diminished US demand. Our exports to the US would begin to be curtailed, while imports from the US would also increase dramatically.
(2) start printing CDN dollars in the name of 'stimulus' and 'job creation' to ensure the decline of the CDN dollar's purchasing power in concert with the US dollar.

In the latter case, we would be preserving our current trade relationship with the US (how does this help us again?), continuing to provide more than 50% of our natural gas production, much of our oil, as well as raw materials (lumber, minerals, etc) and other finished products to the US while massively increasing the cost of foreign imports to Canadians for things like consumer goods, few of which are made in Canada (as in the US, few companies in Canada makes clothing, shoes, household goods etc in Canada anymore, they are all imported from China). Given Mark Carney's Goldman Sachs pedigree, I presume the latter scenario of 'sell out all Canadians for US corporate interests' is the one that will be pursued, in the name of 'full employment' or some such nonsense.

In large part, Canada has similar financial and economic problems as the US. We are a debt-ridden society at all levels (personal, business, government), have little savings (short-term or retirement), a huge national housing bubble, etc. Our CDN currency is now also completely unbacked by gold (Canada's central bank sold off our large gold stockfile over the past few decades, only a few thousand ounces remain from the TONS we used to have). The only real difference between Canada and the US is that we have more resources to sell on the world market, and are experiencing their problems on about a 5-7 year lag.

So...what will happen to the value of the Canadian dollar in the event the event of a US dollar collapse? What should Canadians do by way of preparation?

By the way, Lindsay Williams was on Alex Jones yesterday and has apparently been told by his elite connection that the US dollar will collapse towards the end of 2012. Most of his 'predictions' (ie. plans of the elite) have already come true over the past 4 years. He was calling for 150$ oil when oil was under 50$ in 2007, and calling for 40$ oil when oil was 147$ and everyone thought it was going to $200. Now he has been told that oil is going back to 150$ on it's way to 200$ within the next 12 months, as the situation in the middle east spreads to other countries in the area. The ultimate goal is to destabilize the middle east, send oil prices skyrocketing, and then destroying the US dollar to bring America to third world status, before bringing in a world currency and a global central bank.

For a Maritimer like me, the outcome of the CDN dollar is a concern because here in Nova Scotia (indeed, all of the Atlantic provinces), we import about 90% of our oil by ship from countries like Venezuela, Algeria, etc. Although Canada may appear on the surface to be a 'world energy superpower', the fact is that conventional oil production has peaked in Canada, the rate of Canadian oil production will be increasing only marginally because dirty oilsands are slow and expensive to develop, and will never produce more than a few million bpd), and ultimately there is no east-west pipeline in Canada to bring Alberta oil past Ontario anyways. So, the 2.3 million Maritimers are SCREWED in the event of either extreme oil prices or supply security issues.
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Re: Impact of US dollar collapse on Canada 3 Years, 9 Months ago Karma: 266
Some_math_guy, this is another challenging "assignment" from our readers.

First, in laying out the parameters of Canada's economy in relation to the U.S. I would add one more parameter: Canada still has an obsolete "rump" of Canadian exporters to the U.S. (currently sending empty trucks down to the U.S. day after day).

When I refer to these businesses as "obsolete", I am meaning no disrespect to the WORKERS in those sectors. The fact is, our governments have a) destroyed the purchasing power of Americans (YOUR customers); and b) they have opened-up our markets to low-wage products from Asia AND even HELPED them build the plants to take away YOUR jobs.

While we can all agree this is nothing less than an evil betrayal, it is a "fait accompli", and there is very little possibility of this betrayal ever being reversed.

Thus, when the U.S. collapses, in addition to the CAD strengthening versus the USD due to Americans FLEEING the USD and Canada having commodities wealth to (somewhat) "back" the Canadian dollar, we would have the OPPOSITE dynamic: the CAD collapsing, as what's left of the obsolete manufacturing jobs is finally eliminated.

Then there is the Goldman Sachs Stooge, Bank of Canada Governor Mark Carney, or (as I like to call him) "The Loonie Assassin". His marching orders, direct from Goldman Sachs are to do anything/everything necessary to make sure the CAD never rises so far above the USD that Americans will engage in the mass exodus Some_Math_Guy refers to.

We know this from his past actions: doing something NO ONE (not even Bernanke) would ever do. First he took Canada's interest rates down to 1% (he wasn't ALLOWED to go to ZERO, since Wall Street must have their "advantage"), then he announced that no matter what happened, he would leave interest rates there for at least 18 months.

No central banker has EVER engaged in such obvious rhetoric to CRIPPLE the value of our currency (AND the standard of living of Canadians).

Thus what Canadians should expect is that our currency will be MUCH WEAKER than what the (clueless) "experts" are claiming - since we will not be ALLOWED to do any differently (as long as Harper is in Ottawa and Carney runs the BoC).

As for Lindsay Williams, by coincidence Chad just showed me this material.

Lindsay Williams is the CLASSIC "disinformation artist"
, so let me describe the "prototype":

Lots and lots and lots and lots of half-truths. They come in many forms:

1) Events which they have NO CONTROL OVER, but claim to be "planning" (lol), with the "collapse of the USD" being the big joke in this latest collection of B.S. Does anyone here believe the USD needs "help" to get to ZERO?

2) Events which they HAVE orchestrated, but the REAL reasons are closely hidden, and only a ridiculous "cover story" is released. Thus, it is VERY likely that the U.S. is behind the destabilization of all these regimes, but NOT because the U.S. is about to "reveal" some "massive, secret, stockpile" of its own oil.

#2 is what these disinformation artists spend the vast majority of their time and effort in propagating. The reason is obvious.

The "evil conspiracies" certainly DO exist. But the BEST way to keep the sheep confused, off-balance, and generally SKEPTICAL about all "conspiracies" is to FILL the internet with these idiotic "theories". Thus when the "idiotic" part never occurs (which the FOLLOWERS of these deceivers NEVER remember), the sheep ALSO dismiss all of the VALID aspects to the theory.

In engaging in this VERY simple tactic of ALWAYS coupling REAL "conspiracies" with totally absurd "cover stories", anyone trying to expose what is REALLY going on (like we do here on this site) is simply drowned-out by places like Alex Jones - which (conveniently for the U.S. government) has one of THE largest audiences on the internet (a hundred times larger than our own).

The bottom-line to your queries, Some_math_guy is to put ALL of your trust in silver and gold, and little to no trust in our (sabotaged) paper currency.
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Last Edit: 2011/02/23 12:04 By Jeff Nielson.
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