When the Canadian Dollar reached over $0.90US last year, I bought lots of US dollars convinced that our loonie was overpriced and could never sustain this high. Then of course, that oily loonie soared to $1.10US at one point and I groaned at my stupidity. Today, our poor buck dropped below $0.80US and I am feeling rich again (well, not really, but I am not feeling stupid any more).
Despite my euphoria at having a bit of unexpected cash on hand to plug my recent stock market losses, I am saddened that the Canadian Dollar is now classified as a petro•dollar, subject to the vagaries of the global price of oil. While traditional petro•dollar economies are breathing sighs of relief, as their currencies are pegged to the ascending US dollar and their imports (most basics in those countries are imported) are getting cheaper, we seem to have gone the other way.
I am not an economist, but it seems to me that we have drifted away from being a diversified first•world economy to becoming more of a hewer of wood and drawer of water (make that oil). Globalization has resulted in us defaulting deeper towards our core strengths and abundance – natural resources. Whereas the emerging Asian economies, which had no formidable industrial bases to compete globally a generation ago, have now taken over for us, even replacing aging infrastructure left on the moon by those intrepid Apollo pioneers.
Alas, the Canadian Dollar does not reflect our cultural diversity, quality of life, the beauty of Canadian nature, its skilled human resources and attractiveness as a place to live for new immigrants. For now, the loonie is just a measure of our global purchasing power. But the very lowering of the Canadian Dollar, if not followed by a boost in exports and a renaissance in manufacturing, will lead to the very erosion of these softer measures that (still) make Canada a highly prized country. But wait a second…renaissance in manufacturing…did you say manufacturing? Isn’t all that happening in India or China now?
