A new start!

[TOM4CWB]

Charlie;

With the new gov. elected, how long till the CDN$ hits 90, then 95... August 1 2006?

[charliep]

Early reaction (at least in the overnight markets) is less sure (down a half a cent). Would suspect that the overall trend in the economy and a continuation of Canadian economy growth will drive the loonie. Until there is more certainty around how this minority government, I would look at this as fact that will keep the loonie in the current trading range.

The other factor that is not so apparent is the value of the US dollar relative to other world currencies. There are fiscal problems south of us that need to be dealt with.

[charliep]

I also note the quarter percent increase in the prime rate this morning. This will also be a factor. The quote from the CBC is below. Full story at: http://www.cbc.ca/story/business/national/2006/01/24/markets-060124.html

Central bank raises rate one-quarter point
Last Updated Tue, 24 Jan 2006 09:38:55 EST
CBC News
The Bank of Canada raised its key interest rate by one-quarter of a percentage point Tuesday morning, as widely expected.

But the central bank also warned that it may raise rates several times more as it tries to keep inflation in check.

[cowman]

Charlie: You bring up a very good point. It is not the fact that our government has been doing such a good job in relation to the dollar but the fact the USA is in a basic freefall? You can't spend the kind of money they are in a foolish war without paying the piper?
Who knows where the Canadian dollar is going in relation to the American buck?
Tough on exports but good for imports...and we really don't produce anything here anyway, so maybe it will be okay?
If you think of the US dollar as real money and ours as monopoly money then it works for us when our dollar goes up? This whole monetary thing can be confusing?

[caseman]

" we don't really produce anything here
anyway's ,so it may be okay."

wheat,barley,canola,etc,etc,

the high dollar is killing us farmers
for the commodities we produce.

give your head a shake!!!

[cowman]

Well sorry! I meant in relation to any manufacturing goods? Yep we produce losts of "Commodities" but do we produce very many actual manufactured goods? Any dip stick country can grow wheat or canola...how about anything that anyone might want?
Drawers of water hewrers of wood...it that our lot in life?

[clancey]

If the last Conservative government is an example, we will actually see more government spending, debt and deficits.
On the other hand, I would argue the government can hurt the economy -- but it cannot build the economy. The most politicians can do is implement tax and regulatory policies which do not discourage and/or hurt the business community and investors.
The economy prices in all anticipated government action, with the result only surprises change things, and most surprises from government are negative.

[ALLFARMER]

The last Conservative Gov't can not be compared to the new conservative Gov't. It's like comparing a John Deere D to a 9520 Same name, whole new animal.