Is it just me?
I must be weird.
All over I’m seeing wringing of hands and gnashing of teeth over the fact that the Canadian dollar traded one for one with the U.S. dollar today, whereas, just a few years ago, about 75 U.S. cents would buy you a Canadian dollar.
So? If you had taken $10,000 U.S. and purchased Canadian, you’d have bought 13,333 dollars Canadian, which now would be worth $13,333 U.S.
Jesus. It’s like complaining that it takes $140 to buy a share in Apple, whereas it only cost $80 a year ago.
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I have a question:
Who on earth would have bought thirteen thousand Canadian dollars for ten grand, U.S.?
I'll bet you didn't do that.
See my point?
No, of course I didn't.
But governments, banks, financial institutions, hedgers, arbitragers and currency traders bought Canadian dollars, and since it gained value against the U.S. dollar and the U.S. dollar is still the international (reserve) currency, it's a certain bet that over the last few years there has been an imbalance favoring purchasing Canadian dollars with U.S. dollars over purchasing U.S. dollars with Canadian dollars.
Especially once smart money got keen to the fact that the Canadian was gaining against the dollar. Once they jump into the market it becomes a self-fulfilling prophesy up to the point where there's more sellers of Canadian dollars (to bank that hypothetical $3,333 profit, perhaps).
I have no idea your level of awareness, here, Billy, so this is intended generally. I find the currency markets to be the most overlooked thing in the financial world, and yet the daily volume of trading at nearly $2 TRILLION dwarfs the combined world's stock markets (100 times NYSE volume, for example).
Here's some decent info:
en.wikipedia.org/wiki/Forex
I guess my point is that I see no point in lamenting this stuff. The U.S. dollar lost value relative to the Canadian dollar because large banks preferred to hold Canadian dollars, for whatever reason (which is probably the real thing to be concerned about, if concern is warranted), and that's what happens in a market where the players are free to buy and sell according to their own wishes.
There is no essential difference from Ford stockholders en masse deciding that they want to hold GM instead. GM is going to gain value relative to Ford, up to the point where not many are seeing GM as a bargain and Ford starts looking like a real bargain.
It's not just you. You are not weird. Who's Haysoos (phonetic)?