An Equal Exchange at Last!
I remember one of the first culture shocks I had after moving to Canada in the early 1980's from the United States – the money. It looked a little like play money. But I quickly began to appreciate how nice it was to be able to tell a $5 bill from a $10 bill at a glance. The other bigger shock was that it didn't go as far as my old U.S. greenback.
What a difference 30 years makes! Now for the second time in recent years, the Canadian dollar is on par, and on some days surpassing, its U.S. counterpart, and some experts are predicting that it may stay like this for a while.
How can'the regular consumer benefit from this, other than to go crazy shopping? Rob Carrick, in his column in the Globe and Mail on April 7, 2010 p. B15, gives us "Five things that you can do while the dollar is on par". It includes such things as:
- Open a US Dollar Account.
- Buy something expensive that is falling in price.
- If you're a snowbird, think about converting a chunk of your savings or investments to U.S. dollars for future use.
- If you're not a snowbird, become one by buying some U.S. real estate.
- Buy some U.S. stocks.
A History of the Canadian Dollar by James Powell tells us about the ups and downs of the dollar, and if history is a guide, it is only a matter of time before things go back the other way. That got me thinking – why couldn't we just have one currency for the two countries? Europe has done it. Developing countries have done it. It turns out that it was a topic that was discussed around the time of the free trade agreement.
The well respected CD Howe Institute back in 1999 published a report entitled: From Fixing to Monetary Union – Options for North American Currency Integration. This caused quite a stir among economists and the whole idea was eventually dropped. A summary of the discussion at the time is in the article Debate over Common US Canadian Dollar.
By the way, the CD Howe Institute recently was given a $1.725 million dollar donation to support monetary policy research by a number of Canada's top financial institutions.
But for now, let's enjoy the ride!
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