The U.S Federal Reserve is a major central bank in the world that has been over the past 100 years devaluing the U.S dollar downward by 97%. So you see, we are getting pretty close to 100%…how long will this take though? Maybe 5 years, maybe 10 years.
If the America economy and U.S dollar collapse, here are reasons why the Canadian dollar will not survive as well:
The Canadian economy is extremely linked to the US economy.
-38 billion in exports a year to U.S
-Less than 5 billion to the rest of the world
You see the majority of our trade is with the U.S, so if they go down, Canada goes down. Canada as a nation has not diversified our trading partners.
The Canadian Government wants to devalue the Canadian dollar to keep it competitive to the US dollar.
-The Canadian central bank does not let the Canadian dollar rise too far above par to U.S dollar too often.
The Bank of Canada has very little physical gold backing the Canadian dollar.
-Only about 3.4 Tons of gold, about the size of a kitchen table (that is worrisome)
The Canadian dollar is backed by US dollar and other fiat currencies, held in Canada Central Bank Reserves.
-This is quite scary, because what is happening in the world as of late, is pointing to the death of fiat currencies that are not backed by something. A lot of countries are in heavy debt, and eventually this will destroy a lot of currencies out there.
The Canadian dollar is not used globally. Of course Canadian dollar is only good in Canada, not a world or base currency.
- You cannot go to Mexico and buy a burrito with Canadian money, nor could you go to China and buy anything with Canadian dollar.
StumbleUpon | Digg | Del.icio.us | Dzone | Newsvine | Spurl | Simpy | Furl | Reddit | Yahoo! MyWeb
