Saturday, November 3, 2007

Canada's Finanace Minister play nationalism card

Here is a clip from Saturday's Financial Times:

TORONTO -- Slowing demand from the United States is to blame for troubles in Canada's auto and forestry sectors, rather than the strong loonie, Finance Minister Jim Flaherty said on Friday.

"In the auto sector, there is weakness. In the forestry sector, certainly there is weakness," he said. "That has a lot to do with the reduction in demand in the U.S. economy. Most of the vehicles built in Canada are exported to the United States."

Similarly, he added, the American housing market is in decline, dragging down Canada's forestry industry.

I am aware that he is only talking about two sectors in the economy, and that demand is dropping in these sectors however...the uber high loonie defiantly isn't helping the situation in the forestry and automotive sectors, but rather throwing salt in the wounds. Also, the loonie would be FALLING if Canadian economic woes were due to falling US demand, and lastly people the government is betting that people won't be able to make these distinctions and that it can slide off all the fallout from the high loonie on the United States...a strategy that has proved very effective for Canadian governments.

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