Who remembers when you went book shopping and the book was always four dollars more if you were going to pay in United States dollars? Well, that could be flipped soon. Due to the recent rise of the Canadian Loonie, and the fall of the U.S. dollar the Canadian loonie has overtaken the dollar that we love so much. By an astonishing $.03 the Canadian dollar is worth more.

In 2002 the Canadian dollar hit an all time low, being worth only $0.62 compared to the American dollar. Due to a large number of various factors, the price has risen by 60% in only six years, but why? We have to look at the falling American dollar first.

 Well, with the American economy having trouble the mints have to run more and more money to pay for all of the goods we are buying from other countries. With more and more American money being printed, and nothing to back the new money that is being printed, the international market is being flooded by the U.S. dollar and it is becoming les and less desirable. Also a large part is that we are buying too many imports, and not selling enough exports to cover what we sell to foreign countries. So again, the market gets flooded with our money, and it drives the value down on an international level. These are just some of the complicated factors involved with the falling of the greenbacks.

Why does the falling greenback affect the Canadian dollar so much? Well, obviously the falling U.S. dollar is going to make the Canadian dollar appear more valuable, especially when compared to the mighty U.S. dollar. It is deeper than that though. The Canadian unemployed rate has gone down quite a bit and was at an all time low in 2006. More work drives the dollar; it has value because people are working for it.

Canada has been exporting a lot of things and the things that they export, namely oil and copper, have been rising in value, hence putting more value behind their dollar. Our demand of it is starting to surpass the supply. Too much demand, it becomes harder to get and prices go up. Canada reaps a lot of the money in and their economy booms. We have to suffer the prices, we drop.

So, it would seem that the way to try to balance this back out is to go green. We can help our problem by finding solutions that would drive down how much oil we use. With all the advances in alternate power, this should be easy. But if we don’t want to do that and stick with oil, we need to find a way to get it domestically, so we are not as dependent on foreign oil. So as long as it stays this way, we are no competition against the other currencies, and we will continue to suffer.

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