Could This be the Bush Legacy ?
"The (US) dollar clearly remains vulnerable to a sudden loss of private sector confidence?"
This past week the Canadian dollar rose in value above $0.96 US. Only four years ago it was worth about $0.63. The major reason for this increased value in the Canadian dollar is largely due to the decreased value of the US dollar to which our currency is linked.
Over the last four years the US debt has risen a trillion dollars a year as the war in Iraq is funded on borrowed money. while the rich got tax breaks. People with more knowledge than I on monetary policy have been trying to raise the alarm. My opening text is from a report by the highly respected Bank of International Settlement. This is seen as one of the economic problems which may trigger a world wide Depression. BIS warns of Great Depression dangers from credit spree - Telegraph
Currency has no intrinsic value (not since we went off the gold standard) so confidence in a nation's currency is critical in its evaluation. (Ron Paul, the radical conservative candidate for the Republican candidate for President, has for years argued the US should go back on the gold standard) The End of Dollar Hegemony)
Canada's stable society and its economy that has achieved 12 years in a row of balanced budgets, which includes a legislated plan to pay down the debt, should be good reason for confidence in Canadian currency but this is less important in affecting the value of the Canadian dollar than the increasing loss of confidence in the US economy and currency. We are not alone. The falling value of the US dollar can be seen in the rising value in other currencies such as the Euro and the currencies of Australia and New Zealand among others.
American dollars are highly prized by governments as they are used for the trade in oil around the world. It is an interesting coincidence that Saddam Hussein was moving to stop using US dollars for oil, instead using Euros, just prior to the war. (No doubt a factor in the Invasion of Iraq) Venezuala which has also considered switching to Euros is continually vilified by the US in a verbal war not to mention supporting the attempted coup in 2002. (I think the US would have invaded Venezuela by now if it was not so busy in the Middle East. The loss of US influence in Latin American is another Bush legacy.) If the oil industry switched away from US currency it would cause a dramatic fall in the value of the US dollar. This would be devastating to the US economy and unfortunately would affect Canada's currency and economy as well.
This problem is worrisome as well as fascinating reading matter
Federal Budget Spending and the National Debt
Debt and the dollar: The United States damages future living standards by borr
United Stated National Debt
Is The U.S. Already Bankrupt?
Perhaps, it is time to buy gold and bury it in the back yard!!!!