Canadians are now richer than Americans

[BigPapaVol]

if the dollar is weaker then the canadian dollar it's inevitable

help me understand.

 

[WA_Vol]

help me understand.

Buying power:

Say a Canadian and an American both get paid 50k.
If the Canadian exchange rate was 1.10 vs the U.S. dollar.
You both go to buy goods from China.
Who ends up with the most goods?

 

[BigPapaVol]

Buying power:

Say a Canadian and an American both get paid 50k.
If the Canadian exchange rate was 1.10 vs the U.S. dollar.
You both go to buy goods from China.
Who ends up with the most goods?

Seriously?

 

[n_huffhines]

Buying power:

Say a Canadian and an American both get paid 50k.
If the Canadian exchange rate was 1.10 vs the U.S. dollar.
You both go to buy goods from China.
Who ends up with the most goods?

But if average Canadian is paid $15/hr and the average American is paid $18/hr (or whatever) then the purchasing power doesn't make a difference.

 

[WA_Vol]

But if average Canadian is paid $15/hr and the average American is paid $18/hr (or whatever) then the purchasing power doesn't make a difference.

Here's another way of looking at it.
I traveled to Montreal in the late 90's.
Exchange rate was 1 dollar .67 Canadian.
It was quite inexpensive to go to restaurant, hotel, etc.
The exchange rate was very favorable.

Now I think it is around 1.00 dollar US vs 1.03 Can.
It's much more expensive to visit.
Same as true if you travel to Europe.

You've lost buying power.

 

[n_huffhines]

But that still doesn't make a difference if the restaurants charge higher prices. If $10 American is worth 15 Canadian, you're still at square one if a Canadian Big Mac costs 50% more than an American Big Mac.

 

[Velo Vol]

help me understand.

Exchange all you $USD for loonies.

 

[Velo Vol]

Buying power:

Say a Canadian and an American both get paid 50k.
If the Canadian exchange rate was 1.10 vs the U.S. dollar.
You both go to buy goods from China.
Who ends up with the most goods?

1 CAD = 0.9928 USD

You get slightly more paying in USD.

 

[WA_Vol]

But that still doesn't make a difference if the restaurants charge higher prices. If $10 American is worth 15 Canadian, you're still at square one if a Canadian Big Mac costs 50% more than an American Big Mac.

There's some inflation like you are describing but the dollar lost buying power vs the Can dollar.

It's much more expensive to travel to Europe and Canada, then it was 15 years ago. It's not due completely to inflation. The dollar lost buying power vs the Can dollar and the Euro.

Same reason you can go to Mexico, Panama, Guatamala when you retire and live cheaper then you can here. But if you went to Europe it would cost more.

 

[WA_Vol]

1 CAD = 0.9928 USD

You get slightly more paying in USD.

In 1999 it was 1 Can dollar equal .67 U.S.

 

[n_huffhines]

There's some inflation like you are describing but the dollar lost buying power vs the Can dollar.

It's much more expensive to travel to Europe and Canada, then it was 15 years ago. It's not due completely to inflation. The dollar lost buying power vs the Can dollar and the Euro.

Same reason you can go to Mexico, Panama, Guatamala when you retire and live cheaper then you can here. But if you went to Europe it would cost more.

No it's not. It's because the standard of living is lower there. You can probably pay someone $5.00 a month to be your housekeeper in Guatemala. It's because people are poor, not because the Quetzal is weak compared to the dollar.

 

[Velo Vol]

There's some inflation like you are describing but the dollar lost buying power vs the Can dollar.

I would think that whoever wrote that article adjusted for currency exchange. But right now, the two dollars are so close that it really doesn't matter.

Now if you want to compare standards of living (what the average person in each country can buy) that's a different matter.

 

[BigPapaVol]

I would think that whoever wrote that article adjusted for currency exchange. But right now, the two dollars are so close that it really doesn't matter.

Now if you want to compare standards of living (what the average person in each country can buy) that's a different matter.

If the wealth measure isn't normalized, the author is an idiot.

 

[Velo Vol]

It's because the standard of living is lower there. You can probably pay someone $5.00 a month to be your housekeeper in Guatemala. It's because people are poor, not because the Quetzal is weak compared to the dollar.

Yes. So a more meaningful article would compare how long the average American has to work to pay for a gallon of gasoline versus how long in Canada. And so forth.

 

[WA_Vol]

I would think that whoever wrote that article adjusted for currency exchange. But right now, the two dollars are so close that it really doesn't matter.

Now if you want to compare standards of living (what the average person in each country can buy) that's a different matter.

How much you make and what you can buy is generally what the standards are based on.

 

[BigPapaVol]

How much you make and what you can buy is generally what the standards are based on.

But it's about what you can buy at home and not what you can buy internationally.

 

[WA_Vol]

No it's not. It's because the standard of living is lower there. You can probably pay someone $5.00 a month to be your housekeeper in Guatemala. It's because people are poor, not because the Quetzal is weak compared to the dollar.

Take the Chinese, when the Chinese eventually decides to stop devalueing their currency it's not going to make a difference? Everyone still going to be "poor" there?

When the U.S. keeps running up debt, and the U.S. keeps getting weaker vs the Euro, Yen, etc, we are not going to lose any buying power? Everything is just going to normalize?

 

[WA_Vol]

But it's about what you can buy at home and not what you can buy internationally.

Is most of the stuff you buy made here or somewhere else?

 

[n_huffhines]

You're out of your element, Donnie

 

[Velo Vol]

If the wealth measure isn't normalized, the author is an idiot.

Really, the main thing to take from that article (as I posted above) is simply that US housing has declined in value quite a bit more in the past five years than it has in Canada.

 

[Velo Vol]

Is most of the stuff you buy made here or somewhere else?

For purposes of this thread, only relevant if it's made in Canada.

 

[WA_Vol]

I would think that whoever wrote that article adjusted for currency exchange. But right now, the two dollars are so close that it really doesn't matter.

Now if you want to compare standards of living (what the average person in each country can buy) that's a different matter.

What a person can buy, is the main contributor to your standard of living.

I can tell you from being there in the 90's and being there now.
That the cost to go a restaurant, a movie, etc is considerably more then it was.
And not enough to be attributed to inflation.
The U.S. dollar lost buying vs the Canadian dollar.
You can ask anybody who's traveled between the 2 countries over the last 15 years.

 

[Velo Vol]

What a person can buy, is the main contributor to your standard of living.

Correct. And the people who live in Canada are being paid in Canadian dollars. They don't get paid USD and then exchange it for CAD.

 

[n_huffhines]

What we're all saying is that prices will adjust in reaction to changes in the purchasing power of whatever the domestic currency is.

 

[PKT_VOL]

Here's another way of looking at it.
I traveled to Montreal in the late 90's.
Exchange rate was 1 dollar .67 Canadian.
It was quite inexpensive to go to restaurant, hotel, etc.
The exchange rate was very favorable.

Now I think it is around 1.00 dollar US vs 1.03 Can.
It's much more expensive to visit.
Same as true if you travel to Europe.

You've lost buying power.

Your numbers have to be wrong because that makes no sense. No way an exchange rate of 1 USD to .67 Candian Dollars made your trip inexpensive. It would be quite the opposite.