Economists can be Wrong


I was told by an economist the other day that the current high value of the Canadian dollar was a temporary flash in the pan.

 I tend to divert to authorities on issues like this, but this time I wasn’t so sure. I think that the war on terror and the US involvement in Iraq have had a negative influence on the American dollar, so I checked the Bank of Canada exchange rate for the last five years.

 I discovered sometimes so called authorities can be wrong – See the attached chart.

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This demonstrates the rise in value of the Canadian dollar against the American dollar. I suspect it has more to do with the value of the American dollar than the strength of ours, given there is a similar patern in the value of the Yen against the American dollar and a number of other currencies.

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