So does anyone understand and have an explanation as to why there is a Recession at the fall of a high dollar? From what I’ve been told we are on the verge of a huge recession.
I can think of some reasons why this makes sense, but I’m looking for someone with knowledge of the effect.
When the dollar is high, companies lay people off and we lose a bunch of jobs as an economy. Then we fall into a recession and try to create jobs, but since the states is f****ed and the states buys resources from Canada were not guna get their money so… were f’ed.
And thus it goes on and on.
BTW theres other things to worry about such as the enviornment… David suzuki (yeah im a nerd) said that were in the 59th minute of earths 1 hour life. <-- this was last week when he said that at a lecture at u of t, so were all guna get owned. I figure im just going to track my car until then.
well i cant explain it very well but here’s what i understand iirc. All i know is that Canada has all these back up safety plans for stuff like this to happen. For instance one is The Bank of Canada. If say we start heading into a regression they can lower interest rates to accommodate it so we don’t have this economic depression. With the bank of Canada doing this it will force other banks to do so also. Where as the US this would never happen. I don’t know all the the other backup reasons (discussing this in class) but Canada wont go into a Recession. Hope that helped a little lol.
Canada will never suffer from an extreme regression. The reason our economy will survive is because it has a history of stability due to the fact that our country is more conservative. If you study the American Economy vs. the Canadian Economy you’ll find that American’s are generally much more compulsive spenders and will invest in excitement. That is why the american economy will rise suddenly and then suffer great drops.
We are never not going to get money from america. Despite the fact that our dollar is increasing greatly, it is still cheaper to trade with Canada than reaching over the seas to another country. However, due to the high dollar, companies will begin laying off workers. However, we as Canada are pretty safe considering because Canada is a job machine. If you look at our annual year end, you’ll see that between Dec 06 - Dec 07 our employment has risen 2.2% meaning we are creating new jobs as our population grows. Entrepreneurs are also growing in number as approx. 20,000 jobs have been created in the last year.
Recession will hit Canada because the stock markets are dropping due to sub prime losses. Our dollar is too high, america’s is dropping to quickly as well as they’re unemployment is rising which means that Canadians investing in American stocks are losing out.
Another problem is that Harper is elminating the GST. Despite what many think, the GST is one of the best things to happen to this country. when it replaced the MST back several decades ago, the government began to produce surplus and has for the past several years. By eliminating 2% from the GST and soon elminating the GST all together, the country will drop its surplus. meaning that the government doesnt have enough revenue to fund all its current assets and services. The Government is de-valuing our dollar because whenthe government is in deficit, it borrows money from the taxpayers/population, not from the banks.
Scary stuff but i know when it comes to crissis will iether all perish, or all go into emergency mode and be ok. I personally dont mind paying more tax but they have to do something good with it thats all instead of wasting it constantly.
Steve
No matter what, Canada will be fine after this regression. Out of al G7 nations, it has been shown that Canada adapts best to economic turbulence. Its due to the fact that our population is less excitable, our canadian banks are more responsible with loans, and that canadians have less need to borrow than americans.
Another strong part of Canada that will not allow us to suffer from recession is the fact that our small business sector is constantly growing. We have endless supply of jobs and entrepreneurs creating jobs.
^+1 with calsoy…
He must be edjumakated…
However I don’t agree with the GST. I could go on, and on… but I wont bother opening this bag of worms.
cal is a smart cookie, he makes Hawking look like a moron
Interesting to know about this. Maybe I’ll start another thread on this topic. Actually, it’s kind of in other threads right now.
) I have reason to believe that we shouldn’t be as concerned as the Media makes it.I really don’t want to turn this into a political and tax discussion, even though they are somewhat connected.
Isn’t it mainly because the dollar is too high, no one will want to buy goods from us because it costs too much. US is our #1 buyer which constitutes 75% of all our goods. They are leading into a recession now and on top of that, our dollar doesn’t seem attractive to purchase things from us now.
Also, we have to take into consideration that Canadians now go over the boarder more frequently and take more trips now since our dollar is so powerful. That is millions of dollars spent in another country that could have been spent here.
^^^ +1
Very good point i forgot to mention. Everytime our dollar rises and their’s drops, dont you always find yourself saying, “oh snap, gotta go to buffalo this weekend.” Every dollar we spend there is 1 (more or less) for Canadian businesses
does anyone here remember the fall of canada after the advent of the gst in the midst of a recession.
all the #'s said we were at 98% of a depression …
but we came back…
just remember we are
“the kids on the sled, being pulled by the hillbilly pickuptruck”
the pickuptruck is the US economy…so yes we do recover and are on a “mean average” more stable than the us…our economy is pivoted on theirs and we are the “ass happy drifter” of the G7…
our economy best survives on a $0.80 dollar and 7% unemployment rate and 7% interest…this is our “sweet spot”…typically
this just means to me that its gonna suck buying stuff from ebay for the next 6 months lol
well on a large scale retailers are trying to sell off as much stock as possible to get the “cheaper stuff” in.
unfortunately people seem to thing a 25% increase in the dollar can come out of a retailers pockets…unfortunately not.
I have been in sales for over 10 years from retail through to high tech repping.
The southern ontarion market is waaay too tight for this to happen…on many items…
their are micro neiches that allow for larger markups like dollar stores and “bramptons famously price matched car audio”
but those are the Islands in the sun…
most items in the Toronot market go at about a 30% markup to cover profit and hydro bills…and wages and insurace etc
so I buy “shiznit” for $100 and try to sell it for $130.00
in 6 months the dollar skyrockets 25%
and… (people expecting the $100 items to be $75.00…right!!!..)
lets do the math now for my “shiznit”
$130.00 - 25% = $97.50…
this is less than I payed!!!
AND my warehouse is probably 30% full of 6 month old product!!!
so you want me to lose money for 6 months??..I still only have a certain percentage of the business going on in the area…
sales VOLUMES on everything in existance didn’t go up 25% to match the dollar…
and you run to the US the minute you hear the dollar hits par?
and then wonder why BOB’S ELECTRONICS down the street is going out of business in a good economy?, or not reducing his prices to less than $110?
the strait answer is this.
the canadian public (like all other pulic groups) is snappy and fickle.
so here’s the wak through
shipping in Canada is a serious SCAM, a set of rims costs $150 to ship from LA to NY,
the same distance and service in canada costs $800
Duties and Teriffs of 6.5%+, Brokerage fee’s for an electronic process done by the shipper!!! etc etc etc…these quickly add up to arround 5-10% OF A RETAIL PRICE BY THE TIME IT REACHES THE DISPLAY SHELF.
then ALL electronic items, sold in Ontario MUST BE CSA or ULC approved.
this is an additional fee of upwards of
$ 2 5 P E R I T E M / s e r i a l #…
I have been Charged $250 for 1 piece of a specific electronic tool, that is only manufactured UL approved…why???
cause we are the MUTHAFUKIN TINY PIMPLE ON THE ASS OF THE PLANETS ECONOMY…we are like 30th on the population list, behind MANY MANY european countries 1/100th our physical size (and therefore shipping costs too)…
we want US COUNTRY prices with the buying power less than the CITY of new york…yes the CITY…not the state…
now that said
we were raped on vehicle prices, and are being raped on many products still…why?
typically they are a US made product, sold in canada to THEIR OWN DISTRIBUTORS…for more than “exchange + shipping” also known as fair pricing…
so it goes like this…GM sell their new “crapola” to the US dealers for $6,000
exchange is par, shipping is $800 (great US rates eh?)
in the US they add 25% markup (just say…i know its waay more)
in Canada we are charged $7,000 + shipping ($1200)= $9200
why more for the car when at par…cause they can…no other reason…
-If you go to the US they still make the same amount as if you lived there.
-If Canada loses the sale its a pico litre in the drop…not the drop in the bucket…so they really dont care.
now lets try it on a product I can guarantee you the pricing on
Labels
U.S. Retail price is $65 free shipping, (30% dicount means)cost to distributor is $45.50
Canadian retail price is $75.00, cost (-30% discount) + Shipping cost
so $56.25 + 6.5% +$20 brokerage = $75.91 at the door to the retailer…
now the Canadian retailer STILL has to add markup…but he’s already over list price!!!..yep…
cause you orderd 1 box of labels…not 12 like the American, who knows he will use 1/month JUST LIKE YOU DO…
so your goona call the US Distributor and buy from him but order 12 because
“that canadian price is so high”…
well, did you know that if you asked for 12 to begin with…I could have beaten the US price???..yes…because the US Manufacturer wont give dealers a discount till 250 pcs…but in canada we get them at 10 pcs…
this is another reason why you must know your business and usage and be able to forecast… Because keeping it secret or lieing to a salesman…
only costs you money…but not me…just my time.
and eventually you would have learned that I am not a sleazy car salesman…I plan on doing right by you so you BUY AGAIN…
only long funnel sales guys can get away with sleazyness…
cars
homes
mortgages
loans…
not the place you get your computer parts from, or pop, or smokes or production supplies, raw materials, etc anything else that you see the products life end in a short time (typically less than 2 years or 2 months )…cause then they will only get 1 sale…and you need to buy again in a few weeks/months…
so no, salesmen arent liars…but boy oh boy do buyers try