Economic Collapse Has Been Bery, Bery Good To Me (So Far)
As I’ve joked/whined about previously, I spend a lot of time fretting about the relative positions of the American and Canadian dollar. Since 2003, as the USD has dropped severely against the CAD, I’ve been suffering a localized recession. As have all exporters of goods or services from Canada. This has put me in the odd position of being short on the Canadian economy. If, to pick an example out of a hat, our Conservative government were to tank the economy with irresponsible tax cuts, I would experience some relief on this front. The Harper government has failed to deliver in this area so far, but it’s been in a minority position. Should it capture a majority in the October 14th election*, it will then be unfettered to do all the crazy stuff that will measurably impact my wallet. Rooting for peace, order and bad government puts you in a weird headspace.
One big contributing factor to the upshift in the CAD is our status as an oil producer. (Not that we get the benefit of that in the manufacturing heartland, but there you go.) When oil goes up, so does the loonie. There’s a weird double feedback thing happening; oil is priced in USD, so when the greenback drops, oil has to increase to stay the same real price, thereby sending the CAD up, too. So those of us who live in Canada and get paid in US dollars get clipped coming and going.
Since the financial meltdown started, the USD has been shooting up. As of this writing, it's gained 12 cents against the loonie over that period. The prospect of an international recession depresses demand for oil. Also, since European banks are also unpredictably wobbly, the dollar is starting to look, bizarrely enough, like a reliable port in a storm. (A change in administration might help boost the USD, too. Go work on that, America.)
So it turns out that, in cheering for Canadian fiscal catastrophe, I wasn’t aiming high enough. Like it or not, I am effectively short on the world economy. Silly me. All this time I should have been rooting for global collapse!
*The Conservatives have slipped in the polls since the turmoil began; voters in Ontario seem more comfortable with an interventionist party during tough economic times.