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CAD Dollar

Started by cabber24, January 13, 2016, 03:44:00 PM

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cabber24

OMG... I'm in the Canadian distribution business and buy everything is USD and sell to Canadians only! It's killing me. The FX forecasters are clowns. None of the banks were projecting this. Even current bank projections always assume were at the bottom yet we keep heading down. The only guy that projected below 0.70 is now saying a 0.59 bottom. All we can do is raise prices but will people buy?
Upon the wicked He will rain Jerseys; blue and white and burning waffles will be the portion of their cup.

Rick Couchman

Ouch.  I'm the same way with this friggin web server.  I get ad dollars in Cdn and pay the web hosting company in US.

Bender

I'm not sure anyone could initially forecast 60 cents, but I work at a financial firm and the 70 cent dollar was talked about for quite a while, especially with oil being hit as hard as it has.
"They say you can judge a man by the company he keeps. So here is the professor's oldest friend, a grotesque, stinking lobster." - Bender

hockeyfan1

Fruits and vegetable prices have already risen, and slated to rise more.  Recently, a head of cauliflower was priced at $8.99!!  It didn't stay at that price, but still it's ridiculous.  Tomatoes (Hothouse) at $4.99/lb.  That's three for $10. 

Read recently that someone at Marquarie Capital predicted the CAD will be $0.59 at end of this year.  These were the same people who predicted the CAD was going to be at $0.69 at beginning of this year.

Depressing news.

Highlander

When I returned to Canada from abroad in 02 I think I was getting 67 cent on every US dollar at that time. Looks like we are getting back there again and the gas price is lower than when I returned. It was 85C a litre then.
Not much we can do with the Arabs flooding the oil market. Was talking to a freind in the oil business here in AZ and he said they are attempting to kill the Fracking industry in the US, looks like they will take the Tar sands with it.
"In the beginners mind there are many possibilities, but in the expert's there are few"
                                           Sunryn Suzuki

bustaheims

Quote from: Highlander on January 18, 2016, 06:32:27 PM
Not much we can do with the Arabs flooding the oil market. Was talking to a freind in the oil business here in AZ and he said they are attempting to kill the Fracking industry in the US, looks like they will take the Tar sands with it.

Casual racism aside, that's not the real reason the oil market has collapsed. There's been an excess of oil for a long time now. The issue is that the economy in China went into the tank, and they're basically the biggest buyer of . . . well, everything. The demand for oil dropped dramatically, and that's why the market is now flooded.
"Everyone is entitled to his own opinion, but not his own facts." - Daniel Patrick Moynihan

Nik

Quote from: bustaheims on January 18, 2016, 07:28:49 PM
Quote from: Highlander on January 18, 2016, 06:32:27 PM
Not much we can do with the Arabs flooding the oil market. Was talking to a freind in the oil business here in AZ and he said they are attempting to kill the Fracking industry in the US, looks like they will take the Tar sands with it.

Casual racism aside, that's not the real reason the oil market has collapsed. There's been an excess of oil for a long time now. The issue is that the economy in China went into the tank, and they're basically the biggest buyer of . . . well, everything. The demand for oil dropped dramatically, and that's why the market is now flooded.

And to that end, it's just the umpteenth example of why you should never have an economy without the sort of diversification and regulation that allows for dealing with the unexpected. Just like it was crazy for Wall St. to create an environmental where there'd be a collapse of the global economy if the housing market ever went down, it doesn't make sense to have an economy that will tank if the price of a single commodity drops because, well, that's what commodities do from time to time. There used to be whole towns in New England where the economies were based on the harvesting of ice. Giant blocks that could be shipped to New York to be put in people's ice boxes and keep drinks cold. Then they invented the refridgerator.

The drop of the price of oil isn't unexpected and, as busta says, isn't about "flooding the market". It's that the market is disappearing. In the coming years we're almost certainly going to see a massive difference in the ways Fossil Fuels are consumed. Canada's economy needs the flexibility and resiliency to deal with that.
I wish to hell I'd never said "Winning isn't everything it's the only thing". What I believe is, if you go out on a football field, or any endeavour in life, and you leave every fibre of what you have on the field, then you've won.
- Vince Lombardi

L K

Quote from: Nik the Trik on January 18, 2016, 09:34:30 PM
Quote from: bustaheims on January 18, 2016, 07:28:49 PM
Quote from: Highlander on January 18, 2016, 06:32:27 PM
Not much we can do with the Arabs flooding the oil market. Was talking to a freind in the oil business here in AZ and he said they are attempting to kill the Fracking industry in the US, looks like they will take the Tar sands with it.

Casual racism aside, that's not the real reason the oil market has collapsed. There's been an excess of oil for a long time now. The issue is that the economy in China went into the tank, and they're basically the biggest buyer of . . . well, everything. The demand for oil dropped dramatically, and that's why the market is now flooded.

And to that end, it's just the umpteenth example of why you should never have an economy without the sort of diversification and regulation that allows for dealing with the unexpected. Just like it was crazy for Wall St. to create an environmental where there'd be a collapse of the global economy if the housing market ever went down, it doesn't make sense to have an economy that will tank if the price of a single commodity drops because, well, that's what commodities do from time to time. There used to be whole towns in New England where the economies were based on the harvesting of ice. Giant blocks that could be shipped to New York to be put in people's ice boxes and keep drinks cold. Then they invented the refridgerator.

The drop of the price of oil isn't unexpected and, as busta says, isn't about "flooding the market". It's that the market is disappearing. In the coming years we're almost certainly going to see a massive difference in the ways Fossil Fuels are consumed. Canada's economy needs the flexibility and resiliency to deal with that.

The only thing that has "flooded the market" is that OPEC/The House of Saud are refusing to restrict production to the point of creating an oil shortage to boost the cost of oil.  There certainly is a motive to squeeze out more expensive forms of oil production (fracking, oil sands, etc.) but it really was the collapse of a grossly inflated Yuan that has now resulted in instability in the Chinese economy.

bustaheims

Quote from: L K on January 18, 2016, 09:42:30 PM
The only thing that has "flooded the market" is that OPEC/The House of Saud are refusing to restrict production to the point of creating an oil shortage to boost the cost of oil.  There certainly is a motive to squeeze out more expensive forms of oil production (fracking, oil sands, etc.) but it really was the collapse of a grossly inflated Yuan that has now resulted in instability in the Chinese economy.

Yeah. There's no denying there are problems within the oil industry, but, if the Chinese market doesn't collapse like it has, the impact of those issues would have been minor, and we wouldn't be staring down the barrel of 0.59 dollar. We'd probably be in a much more comfortable 0.75-0.80 range.
"Everyone is entitled to his own opinion, but not his own facts." - Daniel Patrick Moynihan

Significantly Insignificant

The flip side is that all those companies that get paid in US dollars, but pay out in Canadian dollars are probably okay.
"We can't change what's done, we can only move on." - Arthur Morgan

hockeyfan1

Depending on one's natural resources, in this case, oil, is not always a good thing.  Putting all of your eggs in one basket, so to speak is risky.  Should they all break, what do you have for an encore?

We've always been a country dependant on our natural resources -- wood, steel, oil, mining, etc., -- but truthfully, a slight change in economic diversity would do well.  The environment, as an example, presents us with challenges and ideas that can transcend into reality, in the areas of ways of dealing with a new economic path.

Technology, innovation, application, flexibility, creativity, and diversity are integrated, and can be, into our economy much more than ever, if our levels of governments, industry, and other sectors  can showcase more of a willingness and inclination to go that route.

I can imagine a Canada with 60 million people, living and working all over the country, yes, even in the North, with a transportation hub second to none in the world, and an economy so diversified that she would be the envy of the world.  A Canada where Mother Nature is embraced, where resources are renewable, where some of the greatest achievements in transportation have been made ("from sea unto sea"), where the words 'branch plant economy' is not too prevalent, where the economy is vibrant and robust, and so much more.   Ah, nice dream, eh?

Highlander

The area used to be called Arabia, the people that live there and sell us oil are Arabic people so don't understand the remark by Busta about "casual racism".  Just calling the people by their name is not racist.

People who call Canadians Canuks are not racist either!

Don't forget that Iran with the removal of sanctions also intend to flood the market further and compete with their good friends, the Saudi's.  Iran is bankrupt so will need every oil dollar to turn things around (that high grade plutonium is real expensive stuff to create).
"In the beginners mind there are many possibilities, but in the expert's there are few"
                                           Sunryn Suzuki

bustaheims

#12
Quote from: Highlander on January 19, 2016, 05:23:54 PM
The area used to be called Arabia, the people that live there and sell us oil are Arabic people so don't understand the remark by Busta about "casual racism".  Just calling the people by their name is not racist.

Because it's not "the Arabs" that are doing anything. It's the oil companies in the Middle East. There's a massive difference between the two. Blaming the Arab people - intentionally or not - for the actions of a group of businessmen is the beginning of a slippery slope into full-blown bigotry. It's like blaming the Jews for the actions of the Israeli government, or Muslims for the actions of extremist radicalized terrorists. You're naming a massive population and laying the blame there for the actions of a small group of people. A large portion of the Arab world aren't involved in the oil industry at all. It's really only a handful of countries that are.
"Everyone is entitled to his own opinion, but not his own facts." - Daniel Patrick Moynihan

Nik

Quote from: Highlander on January 19, 2016, 05:23:54 PM
The area used to be called Arabia, the people that live there and sell us oil are Arabic people so don't understand the remark by Busta about "casual racism".  Just calling the people by their name is not racist.

Actually, Arabic people are a specific ethnic group. Chiefly, it's people who speak the Arabic language. So Saudi's, for instance, are Arabs but Iranians, who are majority ethnically Persian, are not despite living in "the area".  In fact, there are a great many people who live on the Arabian peninsula who aren't Arabs.

And, typically, when people in polite society refer to what a nation-state or even a international organization like OPEC does they don't use a single ethnic signifier. In addition to Iran, Nigeria, Venezuela, Ecuador, Indonesia, Angola are all OPEC members, none of them being Arabic nations. OPEC isn't "The Arabs" just like NATO isn't "The Whites". Canuck is a nickname, not an ethnicity(Canadian isn't an ethnicity either). Saudi or Saudi Arabian is a nationality.

Seriously, this shouldn't need explaining.
I wish to hell I'd never said "Winning isn't everything it's the only thing". What I believe is, if you go out on a football field, or any endeavour in life, and you leave every fibre of what you have on the field, then you've won.
- Vince Lombardi

Nik


Also, in terms of "who sells us oil" as this chart shows Canada imports most of its crude oil these days from the USA and oil from Africa and the North Sea has tended to exceed any imported from the Middle East.

But even that is a relatively minor concern as, being a big oil producing nation, our imports are decreasing:

https://www.neb-one.gc.ca/nrg/ntgrtd/mrkt/snpsht/2014/11-01lmprt-eng.html
I wish to hell I'd never said "Winning isn't everything it's the only thing". What I believe is, if you go out on a football field, or any endeavour in life, and you leave every fibre of what you have on the field, then you've won.
- Vince Lombardi