Apparently, currency traders are engaged in a "cocky" exercise of selling off loonies gambling that the gov't won't rasie interest rates.
In the same article, by James McCarten of The Canadian Press, Federal Finance Minister Paul Martin is reported as claiming Canada has beat its economic problems including the defecit and the debt. This is apparenytly his reason for not interfering on behalf of the Cdn dollar.
Several Provincial politicians are quoted in the article as well. Ontario Premier Mike Harris, a notoriously right-wing, one might almost say fascist, Tory Premier, says he "favours tax cuts." It's not clear how he thinks this will help the dollar.
Nowhere in the article is it mentioned that Canada beat its debt and defecit problems by cutting social programs including education, health, social assistance and unemployment insurance - which could only be attributed 3% of the defecit in the first place. But then the article was about the dollar, not the "social dividend" as governments have been referring to the current surplus position.
Jess
Doug Henwood wrote:
>
> lk wrote:
>
> >I've been reading Linda McQuaig's "Shooting the Hippo", about Canada's
> >"deficit scare" of the early 1990's. There was a Canadian equivalent of
> >Stossell at the time, Eric Malling, whose show "W5" had a program about a
> >short-term currency crisis in New Zealand, presented as a deficit crisis
> >with implications for Canada. McQuaig writes: "To illustrate the concept of
> >the debt wall in Canadian terms, Malling presents us with an image of
> >Canada's deputy finance minister walking in to a cabinet meeting and
> >declaring that Canada's credit has run out. Malling only tells us that this
> >is what 'economists are predicting.' Over lunch, however, Malling
> >volunteers that the image in fact came from Howe president Tom Kierans..."
> >She describes the C.D. Howe Institute as a "prominent Toronto think tank
> >funded by Bay Street."
> >
> >So the question is - Does Stossell get fed ideas from right-wing think
> >tanks in the US, and would it be easier to dismiss him if he did?
> >
> >There is also a new book by McQuaig, published earlier this year, called
> >"The Cult of Impotence: Selling the Myth of Powerlessness in the Global
> >Economy."
>
> I've run into this argument many times. Canada's gross government debt in
> 1997 was 94% of GDP, the second-highest in the G7 (after Italy) and
> exceeded only by Belgium and Greece in the broader OECD. Canada's net
> international investment position was -US$243 billion in 1996, or over 40%
> of GDP. Doesn't this sound like a debt problem? I don't think Canada's red
> ink is just the invention of right-wing think tanks. Of course, they use
> the debt to push a reactionary agenda, but you just can't deny the reality
> of Canada's being in hock. That's one of the reasons the C$ hit an all-time
> low against the US$ yesterday, no?
>
> Doug
>
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