It’s official the Canadian Dollar now worth more than US Dollar. This may seem trivial to some of you out there but let me remind you that just 5 years ago you could take 1 us dollar and exchange it for 1.20 Canadian dollars.
BuyUSA.gov states the following “The relationship between the United States and Canada is the closest and most extensive in the world. It is reflected in the staggering volume of bilateral trade–the equivalent of $1.5 billion a day in goods–as well as in people-to-people contact. About 300,000 people cross the shared border every day.”
So when our dollar looses this much ground we are paying around 20% more for items exchanged with Canada. It’s not so much that Canada is doing that much better than they were 5 years ago. It’s more that the United States is printing to much money, and some countries like China are who owns Trillions of us dollars as a “reserve currency” is selling them or trading them in for Gold.
China “pegs” it’s currency to the dollar however, this keeps the Chinese yen artificially low and this makes their imports cheaper. (China is effectively draining the US Dry) This combined with our huge National Debt, and Trillions of dollars in unfunded liabilities (Social Security & now National Health Care) has left the US looking less attractive to would be dollar investors.
So what does this mean to people that have money in the bank? Well this means that the $1000 you had in savings will now buy significantly less. How much less? Not sure, but less. How and why you ask? Well it’s a bit complex, but put simply the Federal Reserve prints money out of thin air, the US Government borrows Trillions from China, and in return your money is worth less. So the Government has taxed you say 10% without you even knowing it. Kinda crazy isn’t it?
American Silver Eagle vs. Canadian Silver Maple