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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Kathleen capps who wrote (30931)	8/11/1998 5:22:00 PM
From: Knighty Tin	Respond to of 132070

Kathleen, First I've heard of it. Must be a virus in the back bacon. <G> I'll check it out. MB

To: Kathleen capps who wrote (30931)	8/11/1998 5:33:00 PM
From: bluejeans	Respond to of 132070

Part of the currency problem appears to be due to the low price of natural resource commodities and the non competitive interest rate in Canada .

To: Kathleen capps who wrote (30931)	8/11/1998 6:05:00 PM
From: cardcounter	Read Replies (3) \| Respond to of 132070

Take off, eh! Ok, hoser, I've watched "strange brew" enuff to allow me to field this question. Nice of Insane Ron to take notice of something that David Derosa was pointing out way back in the day (july). Firstoff, bluejean is totally correct in that the canadian bacon bucks are a well known commodities sensitive animal.... so I'll just add some tidbits (bacon bits). the asian crisis has had a deleterious effect on the demand for commodities... 2ndoff, bluejean again be me to the punchline by pointing out that canadian gov't yields are below the us treasury curve.... at start of yr, 3 month can rates were 140 bp below comparable us rates... spreadz have closed since then... A key to watching the can buck is g-span... and us rates. Back in july when g-span talked about fed rate increases, the first thing that happened was the can buck tanked. The problem is that if the fed were to tighten, it is very unlikely that the canadian bank will implement the necessary copycat rate hike. finally, not to give any credence to earlie's bearish outlook for US interest rates, dollar value, and treasury yields... the boj and jap banks had large canadian govt debt holdings which they dumped into the market... one other point... DeRosa ventures that the drop in the canadian currency might be some form of stealth devaluation... can PM Jean Chretien has helped bury his currency with comments to the effect that a weaker can dollar helps can exports and tourism...currency traders make you pay for those types of comments.. perhaps Chretien was trying to give his country a little export insurance... I don't see the bank of can busting their butts to defend the bacon buck... **quick scan of bloomberg shows that canadian rates on short notes jumped today, their 30 yr bond is 5.64% just like ours... the graph of the canadian dollar is a very clear uptrend technical in terms of the dollar (ie, its weakening) currently at 1.52... it almost hit 1.54 2-3 days ago, but the interest rate increases seem to have helped abit... otherwise, the decline has been since march of 98 when the exchange rate was 1.42..