Political instability... to save the economy - Macleans.ca
 

Political instability… to save the economy


 

Canadian Press, August 26. The Bank of Canada is warning it is prepared to intervene to ensure Canada’s fragile economic recovery is not derailed by a resurgent loonie. With evidence mounting that the economy is emerging from a short but deep recession, deputy governor Timothy Lane cautioned Tuesday that the recovery is still uncertain and the loonie’s strength is worrying.

Globe and Mail, tonightPolitical uncertainty could drive the Canadian dollar lower overnight following Opposition Leader Michael Ignatieff’s comment that the federal Liberals will no longer prop up the minority Conservative government, a leading currency strategist said Tuesday. “I think the impact of the political news is important, and creates some uncertainty, which is always a Canadian dollar negative,” Camilla Sutton, a currency strategist with the Bank of Nova Scotia, said in an interview.


 

Political instability… to save the economy

  1. Thanks so much for pointing out this particular example of politicised econospeak. The loonie's descent started late last week and is correlated with the decline in energy and financial stocks in North America and the general September market downturn (factors that were acknowledged by the BNS' currency strategist as the principal contributors in the interview you quote from). Ironically, if the market and unemployment negative reports persist into the fall – as they are likely to do – Harper may actually find himself wishing for an early election so as to attempt to secure a continuing minority mandate before the reality of our pending double dip recession hits.

  2. Plummet, loonie, plummet!!

    • There's the other side of that, er, coin, Mitchell. Canadians' purchasing power plummets, too. The lazy years of Liberal "prosperity" came with a big dose of help from the tolerance of a very weak loonie, so our industries could be competitive without having to be, you know, competitive.

      • Which was great, no? But my point was selfish: my salary's in American dollars but I live in Canada, and a 10% pay raise would be nice.

        • No, not great at all. And yes, quite selfish.

          By the way, if you have noticed how loosey-goosey the backer of the US greenback has been in the last 12-18 months or so, you should seriously selfishly re-consider what form of legal tender you obtain in exchange for your valuable labour. (Hint: the Yanks are getting serious and obviously desperately needed economic advice from… Communist China!)

  3. One of your better juxtapositions Aaron
    So now we have Harper trying to save the Senate by destroying it (see Kady's post from a while back)
    and Iggy saving the economy by running it down.

    You think this politics is easy!

  4. Not only can Ignatieff move the value of the Canadian dollar with a single threat, but he can also move the American markets and the price of oil:

    New York markets were also sharply lower as the Dow Jones industrials tumbled 185.68 points to 9,310.6.

    And the Nasdaq composite index moved down 40.17 points to 1,968.89 and the S&P 500 index fell 22.58 points to 998.04.

    He also made crude oil prices go lower:

    the price of oil fell $1.22 to US$68.74 a barrel

    so I guess we can thank Ignatieff for this:

    Gas prices are expected to drop by 0.6 cents to 96 cents a litre

    I never knew he was so powerful.

  5. Not only can Ignatieff move the value of the Canadian dollar with a single threat, but he can also move the American markets and the price of oil:

    New York markets were also sharply lower as the Dow Jones industrials tumbled 185.68 points to 9,310.6.

    And the Nasdaq composite index moved down 40.17 points to 1,968.89 and the S&P 500 index fell 22.58 points to 998.04.

    He can also make crude oil prices go lower:

    the price of oil fell $1.22 to US$68.74 a barrel

    so I guess we can thank Ignatieff for this:

    Gas prices are expected to drop by 0.6 cents to 96 cents a litre

    I never knew he was so powerful.

  6. so, an election would bring the loonie down and create jobs – how awful.

  7. Is good news to Canadian exporters, no? Or not?

  8. Hopefully, those in charge of moving furniture out of 24 sussex and different furniture in will get called back to work soon.

  9. Very little to do with reality. The Emperor dollar has no clothes, but world financiers pretend it does because lotherwise it would become apparent they aren't wearing much underneath either.