As a currency, the Pound has always dominated over the American dollar. Since its birth the Euro too has been more valuable than our greenbacks. At least those other currencies sound sophisticated. However, now we can add another name to the list: the Looney! Yes, it is true, over the past month it has become official. Canada’s currency, affectionately named the Looney, is more valuable than the American dollar.
So much for all that talk about our economy improving. Perhaps unemployment rates have fallen, and consumer spending has increased to a normal level, but it doesn’t matter. Our economy sucks! I’m so sick of hearing politicians, President Bush in particular, tell us the economy is recovering. The economy is not getting stronger. When we can’t even beat out our neighbors to the North, there is something seriously wrong with our economic and business practices.
Though hearing that our currency had officially been passed up by the Looney was still shocking news, this occurrence has been a long time coming. The last several years have shown a steady decline in the worth of our dollar. Anyone who has traveled abroad recently could attest to the much less favorable exchange rates. Last year in Switzerland I was appalled to find that the Swiss Franc was worth 82 cents, not the 65 cents my recently published travel guide book had told me to expect.
Around the world, many currencies have been gaining on the U.S. dollar. However, hearing that Canada passed us is more upsetting. Maybe because it is geographically so close that it feels threatening? Or because we have always had a friendly — yet, we-think-we’re-better-than-you — attitude toward Canada, it is hard to accept this new backseat position. With all our people, extremely advance technology and world class cities, how is America no longer able to maintain our superior economic strength? More importantly, what is Canada doing to keep gaining on us? They have vastly less people, spread out over large rural areas and are not a dominant player on the international scene than the U.S.A. In fact, the United States is the world’s Superpower, but we have been economically usurped — by Canada!
I started to notice the shrinking gap between the currencies about this time last year. I was booking lift tickets in British Columbia, Canada. The package I was looking to purchase was quoted at 290 Canadian dollars. I expected this to convert to less than $220 American. But it didn’t. In fact, the rate Visa used was about 91 cents on a dollar. I vividly remember trips over the border when I was a child, which was only about a decade ago. My parents would complain about the “rip-off” exchange rate you would get at stores: 125 cents to one American dollar. As I get ready to plan another Canadian vacation, I’d kill to have that exchange rate again. What shocks me is how quickly these values have switched places. In less than ten years the Looney appreciated close to 20 cents. But in the last year alone, it has raised another ten.
Maybe this sounds meaningless, but I am quite frustrated about the new balance of economic power. It’s not just because certain things will become more expensive for us now, [Canadian bacon, anyone?]. The general idea that our dollar is deflating; our nation will lose some of its economic influence throughout the world is a frightening thought. Certainly it would take a collapse of epic proportions to really bring economic hardship to the U.S., but the weaker our dollar gets, the more difficult some trade will become. We will no longer be able to borrow from countries on credit. Perhaps certain nations will be less willing to trade with us.
All of this is a long shot at ever happening to the American economy. It will likely bounce back in the near future (and hopefully overcome the Looney again!). Letting Canada have the more valuable currency will only hurt our pride. Nevertheless, the recent blow to our dollar’s dominance should be a warning that we need to start seriously focusing on building up our economy. I wish it were as simple as just blaming Canada, but this situation is the result of economic choices that may seem easy and cheap, but are hurting the nation as a whole, such as outsourcing, and the massive trade deficit the U.S. runs each year. We don’t make anything in this country. No wonder everything we buy is made in China! America should spend more time and money investing in its own economy, eh?