Fucking hell, it's articles like this that prove that the MSM is full of idiots:
to put things into perspective, technically, this is correct. it's also the most simple form of economics. Weak economy = weaken your currency make your exports more attractive.
unfortunately, Canada's manufacturing base has eroded significantly since 2008, so any rebound will be muted compared to what could have been.
also, seriously, "people selling property to overseas buyers" - ARE YOU FUCKING KIDDING ME, selling real estate is a one time transaction, it is not a wealth generator, it is not a way to grow an economy... but to vancouverites and the MSM, it's the only industry there is!
i feel sorry for the average idiot on the street that reads this and thinks all is well. you shouldn't put a positive spin on everything, the loonie is weak b/c rates have been cut to try to stimulate a shrinking economy. a recession is just around the corner... there is little positive here.
also, note a HUGE downside here - input costs are going up, all goods will be more expensive, gasoline (as oil is priced in USD) will be way higher in Canada vs. US now... no, there is little good news right now in canada.
See the below at how Canada turned from a net exporter to importer... no silver lining (couldn't quickly find more up to date figures, but shows the post 2008 story)
http://cdn.tradingeconomics.com/char...1507310000&z=2
Lower loonie could turn into good news, say experts
Lower loonie could turn into good news, say experts
Economists point to exporters, tourist industry, people selling property to overseas buyers
The Canadian dollar dropped to its lowest point in more than a decade Wednesday, hitting 76.7 cents US. But some experts say a weak loonie can make for strong investment opportunities.
The loonie has been on a downward slide since last summer, with the weakening price of oil, and analysts say the pace of decline has been accelerated by the Bank of Canada’s decision last week to lower its benchmark interest rate.
Paul Beaudry, a professor of economics at UBC’s Vancouver School of Economics, said some Canadian businesses traditionally thrive when the loonie is in a weak position against the U.S. dollar, such as those in exporting and tourism. The U.S. is both the largest trade partner and top source of tourists for Canada.
“Exporters that can actually take advantage of this low loonie, that’s an aspect where small investors can take advantage by investing in those companies,” Beaudry said.
Prices are down for commodities such as oil and gold, but Beaudry said there could be investment opportunities in Canadian manufacturing and high-tech firms, especially ones that sell to the U.S. For such a play to really pay off, he said, the investor would be betting on an extended period of a low Canadian dollar, which he predicts is likely the case “for a quite a long haul.”
Beaudry’s colleague, Geoffrey Newman, also a professor of economics, agreed that the dollar could remain low for a period of time, and that it could yield opportunities.
Newman expects the loonie could remain low for “a year or more,” and said it could decline further.
“The dollar may jump occasionally,” Newman said, “but any increase strikes me as temporary, and I’d say the trend is downward.”
One thing that could cause the dollar to rise, Newman said, would be a surge in the price of oil.
“Oil is so dominant in this economy, that’s the problem,” he said.
If the weak loonie provides an opportunity for a shift away from Canada’s reliance on commodities and toward developing other sectors, such as high-tech, manufacturing, or food, Newman said, that could be good for “the broader export potential of Canada in the longer run.”
However, Werner Antweiler, professor of economics from UBC’s Sauder School of Business, declined to provide a forecast for the loonie.
“I’m like the weatherman. If I say it’s going to rain tomorrow, the sun is going to shine, and vice versa,” Antweiler said. “And I consider myself an expert on exchange rates, but I would not even tell you what my prediction is.”
Because exchange rates are influenced by a range of factors and are difficult to predict accurately, Antweiler said he advises “extreme caution” for smaller investors who might try to profit from the fluctuating value of the dollar.
“For small-time investors to take advantage of a falling or rising exchange rate is virtually impossible. Even sophisticated investors would not want to go there. It’s a very volatile environment,” he said. “People burn their fingers with this very quickly ... It’s very close to gambling.”
One group that could benefit from the declining loonie includes property owners who might be looking to sell, said Thomas Davidoff, associate professor of economics at the Sauder School.
“I would say those who have invested in real estate for which there is significant foreign demand should see benefits from the weak loonie,” Davidoff said, explaining that a low Canadian dollar can make property appear more appealing to a prospective overseas buyer,