Economic Action Dud: Canada loses 46,000 jobs, unemployment rate climbs to 7.2%

BornRuff

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That uneven exchange rate also increased the cost of living too.

There are always winners and losers in any situation. I have not been arguing that a low dollar is something that I think is great, just talking about the effect of the change.

You bet it has, and in part, it also impacts the decision(s) to relocate facilities.

Include in that analysis the effects of taxes (prov/state and muni) into the equation. There is big competition among jurisdictions to secure large employers. Decisions to move aren't based exclusively on par/dollar values

I never claimed it was the only thing they cared about, but it is a major consideration. The kind of things that governments can offer as an incentive to companies to move or stay is really just a drop in the bucket compared to the built in savings of a 70. cent dollar.

Sure it is, and in this global community in which we live, in addition to politics, the complexity of the relativity increases geometrically

Back then, there was no where near the amount of international trade and the trade balance(s) were significantly different

Individually speaking, you are absolutely correct, however in perspective of the macro view, it plays only a small part

Well, not really. Our dollar's value is set like any other commodity. Higher demand pushes prices up.
 

captain morgan

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There are always winners and losers in any situation. I have not been arguing that a low dollar is something that I think is great, just talking about the effect of the change.

In this case, the mfg sector was the winner and everyone else in Canada that wasn't employed by them were the losers... Seem like a smart decision for gvt to keep the costs down then?

I never claimed it was the only thing they cared about, but it is a major consideration. The kind of things that governments can offer as an incentive to companies to move or stay is really just a drop in the bucket compared to the built in savings of a 70. cent dollar.

Cost of doing business and taxes are among the larger factors. That is the single biggest reason that CPR decided to choose Calgary as the H.O. when they made the decision to relocate from Que when the separation referendum hit
 

petros

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Cost of doing business and taxes are among the larger factors. That is the single biggest reason that CPR decided to choose Calgary as the H.O. when they made the decision to relocate from Que when the separation referendum hit

Pretty much the same reason the insurance and finance moved to Regina fro ON.
 

BornRuff

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In this case, the mfg sector was the winner and everyone else in Canada that wasn't employed by them were the losers... Seem like a smart decision for gvt to keep the costs down then?

The government doesn't manage our exchange rate.

When the dollar was cheap, it wasn't just manufacturers who benefited. Any company in any way related to exporting, which is a pretty big part of our economy, did well.

Cost of doing business and taxes are among the larger factors. That is the single biggest reason that CPR decided to choose Calgary as the H.O. when they made the decision to relocate from Que when the separation referendum hit

For foreign investors, the exchange rate is a huge factor in determining what cost of doing business is.

Obviously, when choosing a location within a country, exchange rate is no longer a concern.
 

captain morgan

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The government doesn't manage our exchange rate.

When the dollar was cheap, it wasn't just manufacturers who benefited. Any company in any way related to exporting, which is a pretty big part of our economy, did well.

The fact remains that the relative cost of living went higher because of this, so if you weren't in an industry that was involved in an export-style industry, then you were one of the 'losers' that you had mentioned.

Further, if you're talking about export being a large part of our economy, one might argue that the resource sector (export based) is even larger than mfg, so why bitch about oilsands impacting the dollar?


For foreign investors, the exchange rate is a huge factor in determining what cost of doing business is.

Obviously, when choosing a location within a country, exchange rate is no longer a concern.

Correct, and things like taxation policy, political stability, access to resources, shipping and an educated work force are also factors.

Quite frankly, the exchange rate is not as big of a factor (on average) as you think. Many/most investment funds maintain cash holdings in a variety of currencies to act as a hedge against fluctuations in any one currency or economy
 

BornRuff

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The fact remains that the relative cost of living went higher because of this, so if you weren't in an industry that was involved in an export-style industry, then you were one of the 'losers' that you had mentioned.

Further, if you're talking about export being a large part of our economy, one might argue that the resource sector (export based) is even larger than mfg, so why bitch about oilsands impacting the dollar?

You gotta take the emotion out of it. I have never said it was bad that we have developed the oil sands or that the dollar has increased in value. I have simple discussed the impacts of that.

As I have said many times, there are always winners and losers. We are never going to avoid that. What we are really interested in is what makes us better off overall, but we can't ignore the people who do lose out.

What I did complain about is people who support aggressive investment in the oil sands and then turn around and jeer at other parts of the economy that are now struggling based on the changes that the oil sands development contributed to. If oil is the way to go, lets do it, but instead of chastising sectors that are trying to adjust to a new reality, we should invest some of the money from the oil sands stuff into helping the other areas of the economy adapt.

Correct, and things like taxation policy, political stability, access to resources, shipping and an educated work force are also factors.

Quite frankly, the exchange rate is not as big of a factor (on average) as you think. Many/most investment funds maintain cash holdings in a variety of currencies to act as a hedge against fluctuations in any one currency or economy

As you say, hedging just prevents against fluctuations. It doesn't change the overall cost difference.

Whatever the exchange rate is is still a huge consideration, since it determines what your actual costs and revenues are going to be.
 

petros

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What makes investments in the CDN dollars attractive and sets the value against other currencies? Interest rates? You really do have no clue about economics.
 

BornRuff

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What makes investments in the CDN dollars attractive and sets the value against other currencies? Interest rates? You really do have no clue about economics.

I am very eager to hear your views on this. Please explain more.
 

captain morgan

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You gotta take the emotion out of it. I have never said it was bad that we have developed the oil sands or that the dollar has increased in value. I have simple discussed the impacts of that.

Too funny. You 'never said is was bad to develop the oilsands', yet in the same post, you go on about not liking 'aggressive' investment into the oilsands.

What a laugh

As I have said many times, there are always winners and losers. We are never going to avoid that. What we are really interested in is what makes us better off overall, but we can't ignore the people who do lose out.

Sure... You bemoan the fact that the mfg industry will hurt because of a high dollar, but have no problem when the rest of the nation has their cost of living go through the roof to support mfg.

So, which is it? Drive the dollar really low to help the mfg sector or drive up the CPI for the entire nation?

What I did complain about is people who support aggressive investment in the oil sands and then turn around and jeer at other parts of the economy that are now struggling based on the changes that the oil sands development contributed to. If oil is the way to go, lets do it, but instead of chastising sectors that are trying to adjust to a new reality, we should invest some of the money from the oil sands stuff into helping the other areas of the economy adapt.

So, I guess that your opinion is that the country would be better-off financially and economically if the hundreds of billions of dollars invested in the oilsands never existed in the first place.

You're an economist, take a look at the total contribution that the oilsands companies make up of the TSE, national GDP and total tax contributions at the Fed level and get back to me on that, m'kay.

As you say, hedging just prevents against fluctuations. It doesn't change the overall cost difference.

Whatever the exchange rate is is still a huge consideration, since it determines what your actual costs and revenues are going to be.

If it's a zero-sum game like you are insinuating, then why do it at all?

Why do major companies, gvts, investment funds, etc do it at all if there is no benefit?

You have got a lot to learn BR
 

DaSleeper

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Soo many staw men in this thread......gonna run out off......


 

BornRuff

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Too funny. You 'never said is was bad to develop the oilsands', yet in the same post, you go on about not liking 'aggressive' investment into the oilsands.

What a laugh

If you are not going to read my whole post, at least read to the end of the sentences that you choose to respond to.

"What I did complain about is people who support aggressive investment in the oil sands and then turn around and jeer at other parts of the economy that are now struggling based on the changes that the oil sands development contributed to. If oil is the way to go, lets do it, but instead of chastising sectors that are trying to adjust to a new reality, we should invest some of the money from the oil sands stuff into helping the other areas of the economy adapt."

How does this sound like I am bemoaning oil?

Sure... You bemoan the fact that the mfg industry will hurt because of a high dollar, but have no problem when the rest of the nation has their cost of living go through the roof to support mfg.

Again, please show me the quote where I "bemoan" this. All I have done is discuss what is going on. It is a lot easier to discuss this stuff if you stop getting emotional about it.

The basic facts simply don't support what you are saying.

Look here: Consumer Price Index, historical summary (1993 to 2012)

CPI chugged along steadily with increases between 0-3% every year as the value of the dollar swung from near 60 cents to well over 1 dollar US.

If you travel or do cross boarder shopping, then you notice it more then, but that simply isn't that big a part of what most people spend their money on.

So, which is it? Drive the dollar really low to help the mfg sector or drive up the CPI for the entire nation?

Who here has ever suggested that the government should manage our exchange rate?

So, I guess that your opinion is that the country would be better-off financially and economically if the hundreds of billions of dollars invested in the oilsands never existed in the first place.

You're an economist, take a look at the total contribution that the oilsands companies make up of the TSE, national GDP and total tax contributions at the Fed level and get back to me on that, m'kay.

Honestly, you really need to read what I write. How does me saying "If oil is the way to go, lets do it" make you think I am against it?

If it's a zero-sum game like you are insinuating, then why do it at all?

Why do major companies, gvts, investment funds, etc do it at all if there is no benefit?

You have got a lot to learn BR

Nobody has used the term "zero sum" other than you.

I have simply described the basic fact that there are winners and losers in anything like this. There are certainly options that are better than others, but even the best plan still creates a certain amount of pain for some people.

The point isn't to never do anything that would ever create losers. That is an inevitable outcome of any plan, even planning to do nothing. The point is that we need to recognize not only the benefits, but the costs of the actions we take. By actually understanding what is going on, you can react with a full understanding of the situation.
 

captain morgan

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If you are not going to read my whole post, at least read to the end of the sentences that you choose to respond to.

"What I did complain about is people who support aggressive investment in the oil sands and then turn around and jeer at other parts of the economy that are now struggling based on the changes that the oil sands development contributed to. If oil is the way to go, lets do it, but instead of chastising sectors that are trying to adjust to a new reality, we should invest some of the money from the oil sands stuff into helping the other areas of the economy adapt."

You wrote the contradiction, not me... Don't like the interpretation, then articulate more clearly

How does this sound like I am bemoaning oil?

Well, you're not extrapolating to forestry, financial services or fisheries

Again, please show me the quote where I "bemoan" this. All I have done is discuss what is going on. It is a lot easier to discuss this stuff if you stop getting emotional about it.

That's what you are doing... Just cause you didn't incorporate the individual word in your diatribe does not mean you aren't moaning

The basic facts simply don't support what you are saying.

Look here: Consumer Price Index, historical summary (1993 to 2012)

They do, you just don't wish to acknowledge that the cost of living goes up in an economy that relies on importation of finished products.



If you travel or do cross boarder shopping, then you notice it more then, but that simply isn't that big a part of what most people spend their money on.

Why just cross border?.. Was your television or clothing mfgd in Canada?

Any thoughts on what happens to the cost of those clothes or goods when you decrease your purchasing power?

Who here has ever suggested that the government should manage our exchange rate?


How about the fact that they do.


Honestly, you really need to read what I write. How does me saying "If oil is the way to go, lets do it" make you think I am against it?

That's right, you're just against the 'investment' into developing the resource, not actually against the resource

Nobody has used the term "zero sum" other than you.

Well, considering that you believe it has no effect, zero-sum is appropriate

I have simply described the basic fact that there are winners and losers in anything like this. There are certainly options that are better than others, but even the best plan still creates a certain amount of pain for some people.

And what you're doing is choosing the winners and losers arbitrarily rather than letting the market decide.

The point isn't to never do anything that would ever create losers. That is an inevitable outcome of any plan, even planning to do nothing. The point is that we need to recognize not only the benefits, but the costs of the actions we take. By actually understanding what is going on, you can react with a full understanding of the situation.

Your 'plan' predetermines the outcome.. So much for market forces having any kind of role in your world
 

BornRuff

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You wrote the contradiction, not me... Don't like the interpretation, then articulate more clearly

You can see it now, can you not?

Well, you're not extrapolating to forestry, financial services or fisheries

I have never claimed to try to explain the entire economy. I am talking about the effects of a specific thing.

The oil sands are an interesting topic to look into because it has driven a TON of new money and investment into our country.


They do, you just don't wish to acknowledge that the cost of living goes up in an economy that relies on importation of finished products.

Why just cross border?.. Was your television or clothing mfgd in Canada?

Any thoughts on what happens to the cost of those clothes or goods when you decrease your purchasing power?

The stats are right there for you to see. I will post it again for you.

Consumer Price Index, historical summary (1993 to 2012)

There was no spike in the cost of living when the dollar was at 60 cents and the cost of living didn't fall as the dollar grew towards, and passed, parity.

We can bicker all you want, but the numbers tell the story pretty clearly.

How about the fact that they do.

That is not correct. The Bank of Canada focuses on keeping inflation between 1% and 3%.

They really only have one main tool, which is buying and selling government bonds to control the money supply. This pushes interest rates up or down.

They could use this to control their exchange rate, but then they wouldn't be able to use it to control inflation.

That's right, you're just against the 'investment' into developing the resource, not actually against the resource

?

Well, considering that you believe it has no effect, zero-sum is appropriate

Can you point exactly to where I said anything like this?

And what you're doing is choosing the winners and losers arbitrarily rather than letting the market decide.

Your 'plan' predetermines the outcome.. So much for market forces having any kind of role in your world

No, the market is deciding(for the most part, the government does interfere quite a bit), we are simply studying what the effects are.