Mad money

The Canadian dollar just keeps going and going and going...

With the looney hovering at just over 90 cents US (as noted by Roland Tanglao at at Urban Vancouver and Jeffery Simpson over at Metroblogging Vancouver) a lot of my fellow nationals are likely blushing with pride as our well-oiled (thanks, Alberta) economy gets within striking range of par with the greenback.

But before we start planning our coming out party as the globe's next economic superpower (watch out China, the northern tiger is on the loose!), let's remember that the looney's new purchasing power is only relative to our southern neighbor.

The US is spending itself into a black hole while paying for one and a half wars abroad, while China (its only potentially hostile strategic competitor in the foreseeable future) has been helping American citizens dig themselves deeper into debt by buying US bonds.

Under these conditions, the surprising thing would be if the dollar wasn't recovering its value against the greenback. But the looney's stubborn refusal to rise against even the debt-plagued, gentrifying economies of Germany and Japan makes me wonder just how well our economy is really doing.

If we can't make gains on those guys when we're running on all cylinders, how are we going to do when the US economy inevitably buckles and our biggest export market goes down the toilet? (Other negative potential fallout is explored further in an article by Gordon Powers here).

Just something to think about on the drive from Vancouver down to Point Roberts to save a few dollars as you fill up your tank.

tags: looney, Canadian dollar, economy, greenback, currency, debt, dollars, Canada