{"id":16654,"date":"2016-01-19T14:42:55","date_gmt":"2016-01-19T19:42:55","guid":{"rendered":"http:\/\/olduvai.ca\/?p=16654"},"modified":"2016-01-19T14:42:55","modified_gmt":"2016-01-19T19:42:55","slug":"canada-rebels-against-the-destruction-of-the-loonie","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=16654","title":{"rendered":"Canada Rebels against the Destruction of the Loonie"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2016\/01\/19\/canada-rebels-against-destruction-of-canadian-dollar\/\" target=\"_blank\">Canada Rebels against the Destruction of the Loonie<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>The fear of \u201ccurrency instability.\u201d<\/strong><\/p>\n<p>\u201cWithout precedent\u201d \u2014 that\u2019s what National Bank of Canada\u2019s chief economist St\u00e9fane Marion called the wholesale destruction of the\u00a0loonie.<\/p>\n<blockquote><p>The Canadian dollar is in a tailspin. Rarely has it tumbled so far so fast, and against so many currencies. The steepness of the CAD\u2019s depreciation against the USD is without precedent, -33%, or 3.5 standard deviations, in 24 months.<\/p><\/blockquote>\n<p>In the two weeks so far this year, the loonie\u00a0has dropped 5.8% against the euro, 5.3% against the greenback, and 8.6% against the yen. \u201cEven the likes of Norway (+5.4% against the CAD) and Sweden (+3.9%) are mocking the once-mighty Canadian dollar,\u201d Marion\u00a0<a href=\"https:\/\/www.nbc.ca\/en\/rates-and-analysis\/economic-analysis.html\">wrote in the note<\/a>. \u201cAustralia and New Zealand? Not to worry, they are also gaining ground against the CAD.\u201d<\/p>\n<p>The Canadian dollar\u00a0plunged to a fresh 13-year low last week and hasn\u2019t recovered since, hovering at US$0.688, below $0.70 for the first time since spring 2003.<\/p>\n<p>People are getting alarmed. A lot of consumer goods are imported, including 81% of fruits and vegetables. The plunging loonie makes them more expensive for Canadians: meat prices rose 5% last year, fruits 9%, vegetables 10%. The average household ended up spending C$325 more for food in 2015 than in 2014, according to the\u00a0<a href=\"https:\/\/www.uoguelph.ca\/foodinstitute\/system\/files\/Food%20Price%20Report%202016%20English.pdf\">Food Price Report<\/a>. And it\u2019s likely to get worse.<\/p>\n<p>When Stephen Poloz became governor of the Bank of Canada in 2013, he set out to hammer down the Canadian dollar. In 2015, he redoubled his efforts. He relied on ceaseless jawboning. He even invoked the absurdity of negative interest rates. And he cut the overnight rate twice, the infamous surprise cut in January and the telegraphed cut in July, at a time when the Fed was flip-flopping about\u00a0<em>raising<\/em>\u00a0rates.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Canada Rebels against the Destruction of the Loonie The fear of \u201ccurrency instability.\u201d \u201cWithout precedent\u201d \u2014 that\u2019s what National Bank of Canada\u2019s chief economist St\u00e9fane Marion called the wholesale destruction of the\u00a0loonie. The Canadian dollar is in a tailspin. Rarely has it tumbled so far so fast, and against so many currencies. The steepness of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[942,103,1861,4333,1099,11805,1784,319,322,2520,2446,588,943,4254,4255],"class_list":["post-16654","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-canada","tag-canada","tag-canadian-dollar","tag-crude","tag-currency-devaluation","tag-dollar-depreciation","tag-exports","tag-food","tag-food-prices","tag-imports","tag-loonie","tag-oil","tag-stephen-poloz","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16654","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16654"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16654\/revisions"}],"predecessor-version":[{"id":16655,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16654\/revisions\/16655"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16654"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16654"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16654"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}