The below posting is interesting to me, but probably not to most…

On the news it said that the tourism trade here in Canada has reached the low levels last recorded in 1972.  It also said that one in ten jobs in this country are tied to tourism.  Restaurants, shops, bed & breakfasts, hotels, museums, etc.  So, obviously this potentially represents a huge problem for Canadians.  Because if one tenth of all the jobs are shaky, that effects the rest of our industries because if there are huge job losses, people will have to cut back on other spending even more than we already do because of the huge surge in food and gas (which are not included in the core index inflation computations) as well as the rise in all the things that are.

However, what is so surprising to me about this whole thing, is that so many people didn’t see it coming. 

In February 2002, I was concerned about the US dollar and even though everyone said, “you have to keep 1/3 of your portfolio in US companies and/or dollars, I didn’t feel comfortable with that.  I looked at the situation in the States and decided to go against conventional wisdom and went for a mix of Australian, New Zealand, Euro, metals, and Canadian.  At that time you needed to pay $1.59 Canadian for $1 US.  When I bought the Euro (not many, should have taken a bigger position, and got out of it too soon) You could buy one Euro for 83 cents US!

I got very lucky.

But anyway, that is why tourism is grinding to a halt here in this country.  The prices on our menus, on our clothes, on our books, on our hotels, are still the same that they were when the US dollar was worth 50 percent more.  Now the US dollar is worth less than the Canadian dollar and actually, the US dollar has nose dived with regards to almost every currency in the world (minus currencies like Zimbabwe of course.)

The US, to the rest of the world is a bargain.  Who doesn’t like a bargain?  I read that the fun thing for the ladies-that-lunch to do is to take a charter flights from Europe to New York to shop.  I’ve read about bus-loads of Canadians going across the boarder to the States to load up on inexpensive goods. 

I understand why the policymakers in the US are allowing their dollar to slide.  As Richard Russell says, “INFLATE OR DIE!” The debt load the States has accumulated since Bush took office is MIND BOGGLING.  And they are having to BORROW money just to pay the interest on the massive debt.  So, of course, there is no choice.  The only way they can manage the debt is to devalue the money so that it is cheaper to pay off.  Not to mention it makes their exports more desirable.  And yes, exports from the US have picked up.

Hmmm...I was going to go on, but I just realized that for most of you, this is probably very boring.  I could go on-and-on-and-on, but I shall do the wise thing and sign off.  I’m supposed to be working on my manuscript anyway. 

Posted by Meg Tilly on Thursday, May 22, 2008 in Chewing the Fat

Page 1 of 1 pages