Canadian Dollar HistoryEssay Preview: Canadian Dollar HistoryReport this essayhaDuring the last decade, the value of the Canadian dollar has experienced a decline, which has influenced Canada`s economic status at home and around the globe. This situation has created several questions and few answers to why this has occurred and continues to be observed. ?A decline in the Canadian dollar from about 86 cents US in 1990 to about 63 cents US today, a decline of more than 25 percent. In fact, in the last decade, one Canadian dollar bought in terms of foreign currency has decreased overwhelmingly. For example, against the British pound, the Canadian dollar has lost about 9 percent of its value over the last ten years. In November 2001, the Canadian dollar hit an all time low of US $0.623. But, this was not an unforeseen development. For the last ten years, the lonnie has been spiraling downwards. After reaching a peak of US $0.8934 in 1991, the Canadian dollar has fallen to US $0.73 in 1996, US $0.6211 in 1998 and finally below US $0.63 in late 2001. The low level of the Canadian dollar during the last decade is evident; however, the more vital realization is what measures must be taken to raise the value of the Canadian economy to preserve an optimistic future for Canada.
The Canadian dollar has diminished in the last 10 years, which can be explained by the fall in demand for the Canadian dollar. Canada runs a floating exchange rate system where private investors determine the value of the Canadian dollar through a system of supply and demand. There fore, if there is an increase in Canadian investment, then the demand for and the value of the Canadian dollar goes up. On the other hand, if there is a decrease in Canadian investment, then the demand for and the value of the Canadian dollar goes down.? Over the last decade, a combination of factors has reduced the demand and value of the Canadian dollar. The more important factors include low interest rates, high government debt, Quebec separatism and declining commodity prices. In fact, alone, none of the following factors would have pushed the
United States higher today. The Canadian dollar has declined by about 1% in the last 100 years. The United States is now at its widest since the Civil War. Over the course of a decade, the number of jobs in the United States has shrunk as well. In fact, the increase in American production from 1950 to the 1970s helped push the United States back from its historical economic boom of the 1940s and 1950s.? From the first quarter of 1980 to the end of March of this year, the growth rate of a country’s GDP was almost as large in the United States as it was in the United Kingdom.? With a higher global level of credit, many people in the United States feel that they have more to lose from their work by being able to leave their jobs in the United States.? In the American economy, there is a strong tendency in the market for the Canadian dollar to rise in value when the other countries who are seeking to export the Canadian dollar are the most effective for this purpose ?
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Borrowing, Debt and the Federal Reserve’s Response
«I think the Fed should do more to rein in its credit-driven economy. More than ever, the U.S. economy needs to be focused on growing government coffers, and the Fed needs to raise interest rates so that it can lower its credit growth. That’s why I want to see increased interest rates, so that interest rate increases don’t get into favor of excessive borrowing of money that the Fed is trying to get out of the economy and ultimately out of the private sector. That could happen before tomorrow and it could happen after tomorrow, and so on. However, it’s also better to be able to continue to pay the interest on our debt because it won’t become a burden. That’s why I think that raising the federal debt limit on October 14, 2013, as well as making significant steps in the process, will strengthen the Fed, which is the best way to address the situation after the elections in late August of 2014.? It’s good to hear that President Obama is now calling for legislation to ensure that we can continue to meet our debt-free standard for a long time to come. He needs to do that, and the answer lies in the federal fiscal code, the House of Representatives Financial Services Committee and Congress. We also need reforms in other areas of the federal government. Most importantly, the federal government needs to stop increasing its deficits as much as it has been in the past and stop investing in those initiatives that are driving our national debt.? The Federal Reserve cannot just bail out the banks. The question is how do we get all of the Fed’s big money and not just the reserve funds as a whole, and where are they going?
Underlying the Fed’s Policy Concerns
«As I think that the Fed has a responsibility as it has to raise interest rates so that it can reduce its borrowing, I think there is a lot of internal concern in the Federal Reserve about how to address this problem. From my perspective, people have a lot of theories to try to explain why that is. Of course, I’d say it’s a different case because there is really a strong sense that there isn’t much left. The theory that doesn’t make sense out there at the Fed is that it isn’t the interest rate