Decoupling

[Dinner]

Originally posted by DanS


Your rebuttal fails.

1) Natural gas has fallen by 55% over the last 3 months. Copper 56%. Soybean 44%. Lumber 28%. Corn 52%.

2) Has no bearing on what you said.

3) No, you said that commodities "can't fall as far and as fast as was the case when the US dominated the world economy to a greater extent." Still patently ridiculous. It's falling just about as far and as fast as possible.

You're being a bit dishonest. Even though the prices have fallen most commodities are still sitting pretty well.

[Kidlicious]

Originally posted by DanS
Off the top of my head, the answer would probably lie in interest rates. Admittedly, this is something of a cop-out, because interest rates are where all of the strands in the economy are tied together.

But the BoC has had higher rates.

[Kidlicious]

The fed has been dropping rates since last summer07, and I don't think the BoC has as much.

[Dinner]

Originally posted by Kidicious


But the BoC has had higher rates.

Honestly it can afford to since they're budgets are balanced and their exports have been doing well (all that oil, lumber, metals, and what not are mostly being exported).

[Kidlicious]

Originally posted by Oerdin


Honestly it can afford to since they're budgets are balanced and their exports have been doing well (all that oil, lumber, metals, and what not are mostly being exported).

Right, but if the difference is because of interest rates and the fed has been lowering them more than the BoC then why is the US in recession and Canada not?

[KrazyHorse]

You are both talking nonsense.

[Dinner]

Notice how increased global trade has led to Canada being more and more decoupled with the US economy? It's because Canada now has more places to sell its goods besides just the US like normally occurred in the 1970's. When US demand slackens other costumers can now be found maybe not as many but it still helps to decouple the Canadian economy from the US economy.

Oh, and the higher interest rates in Canada do bring in foreign investment and one of the reasons Canada can charge higher interest rates is because the budget is balanced and exports are growing. Not to mention their banking system is in better shape so their not facing as bad a credit crunch so their economy is in better shape.

[Kidlicious]

Originally posted by KrazyHorse
You are both talking nonsense.

If the economies are coupled than similar interest changes will do similar things to the economies.

[KrazyHorse]

Originally posted by Oerdin
Notice how increased global trade has led to Canada being more and more decoupled with the US economy? It's because Canada now has more places to sell its goods besides just the US like normally occurred in the 1970's. When US demand slackens other costumers can now be found maybe not as many but it still helps to decouple the Canadian economy from the US economy.

[KrazyHorse]

Originally posted by Kidicious


If the economies are coupled than similar interest changes will do similar things to the economies.

[Dinner]

Like I said Canadian exports to countries other then the US are growing. Sure, the US is still the biggest consumer but it sure helps a mine or factory when someone else can be found to buy even when the US isn't. We both know Canada continues to export to the US above all else but, yes, exports to other places are growing and that helps decoupling.

[KrazyHorse]

Originally posted by Oerdin
Like I said Canadian exports to countries other then the US are growing.

Did you look at the chart? The economic integration with the US reached a high in 00/01 then dropped to ~1995 levels.

At any rate, the integration has been higher over last two cycles than over two before that.

[Dinner]

It's obvious that one issue isn't doing it all by itself but rather a whole host of issues. 1) growing exports to countries besides the US 2) higher interest rates attracting foreign investment 3) healthier banks not squeezing access to credit 4) that mines and wells take a lot to develop & have long life spans so they're not as effected by short term economic fluctuations, etc...

[KrazyHorse]

2) higher interest rates attracting foreign investment

???

[Kidlicious]

Originally posted by KrazyHorse

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