The Canadian dollar fell below 25 Baht today. That has quite an impact on planning for me. For example, I was considering buying a plot of land for 300,000 baht and/or a motorcycle for 177,000 baht. The exchange rate makes a huge difference for me as my income ($5,000 CDN/month) is in Canadian dollars. Historically, the loonie fluctuates between buying 30 to 25 baht, and usually hovers at the high end, but today is below 25 baht. The impact on my purchase would be:
The land at today's rate will cost me $2,000 more and the motorcycle would be $1,180 more. I will obviously put off these purchases until the Canadian dollar appreciates or the Thai baht depreciates. Unfortunately, rent is fixed until the end of April when moving to the village to live rent free for a while is looking more appealing. Food is relatively inexpensive in Thailand so the price of food is not really an issue.
Those of you who live in Canada will soon experience the effects of the falling loonie. At this moment, the consumer goods you are buying were in the supply chain while the loonie was worth more. Most of what you purchase is made in the US, Japan, South Korea, or Taiwan. Outside of Canada's short growing season, most of the produce you consume comes from the US whose currency is worth much, much more. Snow birds are already feeling the pinch as they are already south of the border.
The Canadian electorate fell in love with a charismatic ex teacher who has been globe trotting in his first two months (much like his papa did) while the loonie has been tanking. It is time for Justin to tend to things at home and take Canada from a nation of 'hewers of wood and drawers of water' and increase its capacity in the knowledge economy and encourage our brightest minds to stay home and innovate in Canada.
https://www.cardus.ca/policy/archives/3771/
is a great read and talks about Canada's aging infrastructure which is in need or replacing. The construction jobs created will help to bring Canada out of the recession it appears to be falling into. The only question is who will pay .. and the answer is always .. you the tax payer .. or perhaps Justin will follow in his papa's footsteps and simply borrow from future generation .. your children, and their children.
BTW, how are your investments doing today?
I am not an economist but I think Canadians are going to have a hard time adjusting to competing with Thais, Cambodians, and Vietnamese who are willing to work 12 hours a day for $10. The Chinese are beginning to understand that as well, as factories start to move to where labour is cheaper. Canada needs to find its niche in the world economy and exploit that niche.
We do live in interesting times :-)
TTYL
In 1984, the interest rate in Canada went to 16% and even higher; people I knew lost their houses when they couldn't manage the new rate when they had to renew their mortgages. Other people, such as seniors, however, loved the returns they were making on their investments and complained when the interest went down under PM Mulroney. With low Canadian dollar, manufacturing exporters benefit, but domestic consumers pay higher goods for imported produce. Did you know that cauliflower (from US) was priced at $6.99 and above around Christmas (function of Cdn dollar and supposed crop failures in US, which personally I believe is suspicious reasoning). So, point being is that for every fluctuation, there are losers and winners and one should try to aim your motorcycle down the centre line to come out ahead. So, Canadians should be smart enough to adjust their consumption behaviour (duh, buy root vegetables harvested locally in the fall for example instead of imported fruit and veggies). And stop ranting about individual indicators and be strategic. It's not rocket science. Sorry for the rant, but the 'old way' of doing things ain't going to work in a low growth economy.
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