Friday, November 09, 2007

Loonie Lunacy

This is what you elected, Ontario (and Quebec) - Whiners. Not problem solvers. Not innovative thinkers.

As with every other problem, Ontario Premier Dalton McGuinty is showing 'action' on the devastating effects of the high dollar by complaining to Ottawa - Harper Urged to Slow Dollar (Post). He and his fellow all-talk-no-action Quebec counterpart want a First Ministers' summit to try to convince Harper to lower the interest rates in an effort to tame our strong loonie.

And here's the smack-down (Post):
"This notion that Canadian premiers, through a complaint, are going to change the course of the U.S. dollar is lunacy," said Finn Poschmann, director of research at the C.D. Howe Institute, a Toronto-based economic think-tank.
Interest rates are not set by the prime minister, but by the Bank of Canada, which operates independently of the government. And experts question whether the Bank of Canada could yield any influence on forces pushing up the dollar.

"There's nothing the Bank of Canada can do to stop a global trend, which is that the U.S. dollar is going to weaken," said David Watt, senior currency strategist at Royal Bank of Canada.

I said that days ago, and I'm no economist - just your average Jo. (What do you say now, LKO?)

Post Reporter Paul Vieira notes at the end of the article:

Openly complaining about the central bank and the high dollar does allow the premiers to say they are fighting for their local economies --even if they know they yield little power to alter the actual course of exchange markets.

Or maybe they just don't have a clue, Paul.

You blew it Lemmingland. Four more years of whining and inaction.

Four more years of passing the buck to Ottawa.

Get used to it.

* * * *
Late morning update: This should help the Premiers relax a bit - Loonie dips a little lower.


Anonymous said...

"you blew it Lemmingland" - yes Joanne we certainly did.

Here's the rub though. We find Dalton McGuinty again casting blame elsewhere when it should be laid solely at his feet.

Who made promises they couldn't keep?
Who made like Santa during the Christmas in July money toss?
Who over-estimated Ontario's economic picture?
Who changed the fairness in ed. funding issue to the language of "segregation"?
Who taxed Ontarians for healthcare and them used the money for other things?
Who took autistic parents to court after promising to help them?
Who hasn't delivered on child-care spaces even though money was handed down by the feds.? Where did THAT go?
Who made teacher union deals that school boards and the province can't afford?

And who just months ago took a photo-op and press conference opportunity to announce that Ontario was in surplus?

The lead lemming....that's who?

We are the lemming nation of Ontario!! Take a lemming to lunch today.

Jeff Davidson said...

please tell me, wise sage, what measures premier tory would have taken to save ontario manufacturing jobs had his party won the day?

rather than bitch for the next 4 years about how unfair it is that your guy lost, how about offering some sound economic advice to all us silly lemmings.

it seems to me that all you do is bitch and moan yourself.

Red Tory said...

Being less than forthright, Joanne neglected to point this out from the article:

Regardless, Ottawa does have some influence with the bank. Mr. Dodge and Mr. Flaherty meet regularly to discuss the state of the economy. Moreover, the Bank of Canada and the Department of Finance agree upon an inflation target -- currently 2% -- for the country, which the bank seeks to maintain through interest rate decisions. The last agreement was finalized a year ago and is in effect until 2011.

"The bank makes its decisions independently, but it does pay attention to foreign exchange markets and takes input from stakeholders," said Mr. Carmichael, who has calculated the dollar to be overvalued by 10% and, as a result, expects a rate cut when the bank renders its next decision on Dec. 4.

Yes, the Bank of Canada is independent, but obviously it doesn’t operate in a vacuum and there’s nothing wrong with provincial leaders whose economies depend heavily on the manufacturing sector to provide their “input” as stakeholders — that being the suggestion that the Bank move to cool off the loonie as it’s harming foreign exports.

Swift said...

The reason that the Tories lost the election can be put on the Conservative Party. They ran on a platform of Vote for us we're Liberals. Anybody who wanted to vote for the liberals could vote for the real thing. Anybody who wanted to vote for the Conservatives didn't have anybody to vote for. And for those who have lost faith in the process because "they're all the same," only had their opinions confirmed.

There was only one issue that separated the two parties, faith based funding. Politically the conservatives were on the wrong side because it was unpopular. But it was unpopular for a very good reason: the history of mixing politics with religion is filled with horror stories.

If the Conservatives had run on a platform of "this is how the Liberals have messed up, vote for us because this is how we're better," they probably would have won the election. They certainly would have won a lot more seats. If there are any lemmings in this story it's the ones who are responsible for the "I'm a Liberal too" party platform.

Anonymous said...

Canada can 'peg' the Loonie to the U.S. dollar. That way we'd at least be in the same boat as the Americans, our principle trading partner.

Personally, I'd like to see a North American currency union.

Caveat said...

The PCs tried to run on McGuinty's record, the media called that 'negative campaigning'. Well, it would have to be negative considering it's McGuinty. I can't think of one positive thing that the Fiberals accomplished during their tenure.

The tories had a lot of good ideas such as fairness in taxation, improving healthcare delivery, raising educational standards, housing initiatives which would help the poor and provide them with dignity, equality before the law - something McGuinty seems to abhore. There were many other fiscal and social policies which would have been a breath of fresh air for Ontario.

I really don't understand the panic over the rising dollar - it's only been a few weeks but consumers are wigging out and politicians are whining (not BC by the way which has a huge export-based economy).

The common factor in both the election issue and the current economic issue is media fear-mongering.

Sit tight things will normalize. Maybe the Chinese, the US's biggest creditor, will stop dumping US dollars or something. There's really very little that can be done until things stabilize.

Hold on to your hats, friends, my financial guy tells me the dollar is expected to go quite a bit higher.

Joanne, Lemmingland is so funny and perfect I think we should change the name of the province - or at least you should design a t-shirt or bumper sticker. Thanks for the laugh!

Joanne (True Blue) said...

Lemmingland is so funny and perfect I think we should change the name of the province - or at least you should design a t-shirt or bumper sticker.

I'm thinking of changing it to Lemminggrad.

Joanne (True Blue) said...

please tell me, wise sage, what measures premier tory would have taken to save ontario manufacturing jobs had his party won the day

Lemming-lite measures.

liberal supporter said...

Canada can 'peg' the Loonie to the U.S. dollar.

I still have a "Diefendollar" a relative gave me. It had a detachable part, and had 92.5 in its corners.

That way we'd at least be in the same boat as the Americans, our principle trading partner.

The US is growing tired of China pegging its currency to the US dollar. That's why everything from China is so low priced in dollars. It makes more sense for us, being joined at the hip, but if we remain a separate economy, they may not like a peg. Of course, that's what SPP is for.

Anonymous said...

McGuinty will destroy Ontario, no wonder everybody wants to get out except for all the immigrants coming in of course. (real conservative)