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Is Canada Next in Line to Join the FX Intervention Club?
From Derailedcapitalism.com:
The Bank of Canada Governor Mark Carney has made it quite clear that the “persistent strength in the Canadian dollar has the potential to seriously influence Canadian economic growth.” Further tensions in the global currency markets through intervention are forcing the Bank of Canada to consider exercising policy to manage the exchange rate. He goes on to say, “There are heightened tensions in currency markets. Together, we — the Bank of Canada, the government of Canada — maintain considerable options to control the situation if that is necessary.” While he did not suggest that such action was imminent, a strong Canadian dollar is currently on his radar. The CAD has had a difficult time remaining at parity against the USD, any strength in the CAD may prove to be an opportune time to close out positions. Here’s a look at a couple of other notable nations who decided to intervene this year:
BoJ intervention - USD.JPY:
SNB Intervention - EUR.CHF:
Anybody see a trend?
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Carney is a wierd one.......Goldman Sacs alumni and cannot get a bead on it in the sense of BOC/Carney statements veer from the above to the economy expanding at a faster pace than expected to the economy expected to slow to rates expected to rise to rate outlook uncertain.
Carney in a word.........flaky.
Canadian home buyers have drunk the koolaid and now they need to be saved from certain financial death. I rent and I'm going to pay.
As a Canadian, I have to admit there is nothing magical about the CDN$.
-per capita debt levels are on par with the US and Europe
-we have all the same demographic and structural problems with our economy
-we have a track record going back decades of supressing our currency to compensate for lagging productivity and protect our exporters
-most of our reserves are in USD; they might as well be Charmin
-but the biggest reason, Canada's gold reserves are a miniscule 3 (yes three!) tons - I think even Bangladesh has more gold than we do
We sold 5 billion$ of gold to the EU last year. That's a steady income.
It's a steady income until it's all gone.
Great timing too, sell before gold starts on it's parabolic rise, how much would we be up now had we held onto the gold, a $billion or so? We could have hosted another G20 summit for that!
I totally agree. By "steady income" I was being facetious, sarcastic. I can't live on 150 bucks a year.
Carney eh ?
Marc Carney-........and was heavily involved in Goldman Sachs's work with the 1998 Russian financial crisis.[5]
Goldman Sachs' role in the Russian crisis was criticized at the time because while the company was advising Russia it was simultaneously betting against the country's ability to repay its debt.[7] Goldman's activities in Russia have been the subject of renewed discussion in the context of 2010 investigations of the company's bets against its clients' interests during the financial crisis of 2007–2010.
There is no picture on his wiki profile because apparently there is "no free image"http://en.wikipedia.org/wiki/Mark_Carney
Take Goldman at its word on any calls on CAD/USD(which means doing the opposite of course)
Sorta like I've been wondering why the US has all the BS about terrrr-rists and Canada to our north has no terrorists attacks.
Sorta like I've been wondering why the US has all the BS about terrrr-rists and Canada to our north has no terrorists attacks.
Morons. The US will continue to buy resources (perhaps not manufactured products) from Canada no matter the exchange rate. If your margins are stress, simply charge more toilet paper for them. Also, find more trading partners than your psychopathic money printing neighbors to the South.
good luck. they don't call it "the oil curse" for nothing. fact of the matter is the more mfg'ing in an economy the better. "never enough" to quote Keith Richards. This "chimerica" thing is the greatest rip off for Planet Earth in history. Needless to say "there's nothing chimerical about it." Devalue or die if you're a commodity based economy. Simple as that.
Canada and Mexico could take a different approach by openly talking about joining OPEC, oil would jump and the Fed may have to back down. Oil is more powerful then fiat or even gold.
Canada is in the midst of a free trade agreement with the EU while exploring other options abroad. We feel that the likihood of intervention is quite unlikely. As bad as it sounds, we even question the BoC's ability to carry out FX intervention efforts.