'Loonie' tunes and Obama's path to US membership in the Third World
Many in Canada fret that the Canadian dollar (called the "loonie") will become too strong and subsequently hurt the Canadian manufacturing sector. Ken Boessenkool in Canada's Globe and Mail has warned the Bank of Canada about artificial devaluing the loonie. The following shows that some in Canada understand what Obama brings to the table:
[P]erceptions of future investment returns on a country-to-country basis are often affected by large shifts in fiscal policy. Bad fiscal policy - in the form of unsustainable deficits and debts - will cause investors to expect increases in future taxes and lower rates of return. In that case, the relative attractiveness of that country as a place to work and invest will fall, driving down economic growth. In response to poor fiscal policy, a falling currency can provide the automatic stabilizer to lower growth rates resulting from rising deficits and unsustainable debts.
And this is exactly the picture we are seeing south of the border. Barack Obama has put the United States on a debt and deficit path that is far worse than Canada experienced in the early 1990s, when The Wall Street Journal called Canada an "honorary member of the Third World" and our dollar was flirting with historic lows.
Peter W. Dunn is a reader of the American Thinker, biblical scholar, blogger and investor. His reflections on investing may be read at palabre.wordpress.com.