In 2001 Sherry Cooper predicted the dollar would hit $0.50 and called for adopting the U.S. currency.

Here's a good piece to laugh at:

http://www.cbc.ca/money/story/2001/1...lar091101.html

If any one person should shoulder the balme for the devaluation of the U.S. currency it is the Maestro himself, Alan Greenspan. He panicked in his reaction to the bursting of the tech bubble by reducing the fed funds rate to 1%. This led to too much money sloshing around the U.S. chasing too many bad investment ideas in the name of increased return. The biggest distortion created by the excess amount of cheap money was in the excessive building of residential real estate. Too much credit was extended to people who probably were not financially ready to purchase a home and take on a mortgage. Free market economies are good at correcting the excesses created by irrational choices, but these corrections come at a price. The U.S. housing correction is real, it is severe and it is going to last a long time. Bernake is going to have a heck of a time trying to minimize the effects of this housing correction, and that is why (in my opinion) he panicked with the 50 basis point fed funds cut and the 50 basis point discount rate cut. The recent rapid decrease in the value of the U.S. dollar is a natural consequence of the sudden drop in U.S. interest rates.

If there is a problem with the U.S. economy is that everyone whorships at the alter of home ownership (i.e. the "American Dream"). Not only is there tax dedcutibility of home mortage interest in the U.S. but there is also tax deductability of property taxes, and also an exemption of up to $500,000 (per couple) in capital gains taxes for the sale of a primary residence. These tax incentives skew the investment landscape in a way in which too much is spent on homebuilding and not enough is spent on other capital formation related activities. An underappreciated fact is the strength of the real estate lobby in Washington. Fannie Mae, Freddie Mac, the National Association of Realtors and the National Association of Homebuilders combine their lobbying forces effectively so that together they are a force as powerful as the NRA or the AARP.

The reason why the decline in the U.S. currency is not as predominant an issue as it would be in other countries is that the U.S. economy is less reliant on trade with other countries (on a percent of GDP basis) than Canada, or any developed country in Europe, Asia or Latin America. The size and diversity of the U.S. economy allows for a greater degree of self-sufficiency compared to its peers. Of course, the U.S. dependence on foreign trade is increasing as the forces of free trade, reduced costs in communication and transmission of capital flows and other trends which encourage the growth of globalization become more prevalent.

If someone wants to criticize President Bush, he or she certainly has plenty of ammunition. But I think it is unfair to criticize him for the weakness in the value of the U.S. dollar.

Just my two (Canadian) cents. Thanks.

A couple of things...

First, with regards to the cars, many of the manufacturers are preventing CDN's from going south to purchase by nullifying their warranties (i.e. Ford, Subaru, Jaguar, etc.) if the car crosses the border. The automakers want to make sure that they can continue to bleed the CDN customer for every cent. Their attitude is if you want a car with a warranty, well then you will pay the unreasonable difference.

Second, any savings you enjoy buying from the states would be quickly eliminated by customs and their ridiculous and often unjustifiable duties and taxes, especially on big ticket items such as cars. OT - anyone understand where they come up with the duty amounts? I just had to pay $17.43 in duties on $45.00 worth of gifts sent to us from the US...

They're charging what the market will bear. Same thing goes on in the U.K. where cars have long been priced much higher than anywhere else within the E.U. It's up to us as consumers to vote with our feet and wallets.

Check again. Duties on cars are probably minimal. None on cars manufactured in Canada/U.S./Meixco. It's the GST/PST/HST that you have to pay that will add up to more than 12% except for those in Alberta.

Look at your invoice. It's probably the brokerage and customs processing fees charged by the carrier. UPS charges $39.

>First, with regards to the cars, many of the manufacturers are preventing >CDN's from going south to purchase by nullifying their warranties

My wife and I are looking for a 'new' car and we'll likely buy in the USA. We'll just get around all this dealer bafflegab by buying one that's a couple of years old. Once it's a 'used' car all the issues go away.

Buying a car that needs a warranty. Better to buy a reliable brand!
 

I bought a New Civic last year. They tried to push me for the extended warranty. I told him that I'm buying it because it shouldn't need the warranty. That's why they charge more for the Honda.

On the slight chance that you need the warranty, shouldn't the original paperwork be enough. It's not like you have to register the car with the manufacturer when you import. The government, that you register with doesn't care.


The problem is purchasing the new car from the dealer. The manufacturers are threatening the dealers if caught selling to Canadians for export. But it's no problem to buy a new car for use in America. This means registering in the US (cheaper where they don't charge sales tax Oregon, Montana, Delaware, etc) and exporting to Canada afterwards. Dealers I've been in contact with have told me they won't charge sales tax if I pay to have the car trucked to the border. Or having a friend/relative in the US putting it in thier name and then selling to you is also a viable tactic.

On the new vs used debate, the savings on a new car is HUGE, because of the recent appreciation of our buck. Because of this, the savings on a new car is so much more than a used one.

Check the difference on the Porsche Boxter if you want to see a price difference, or the BMW Z4 for that matter. If I can save $30,000+ on a car, it's worth jumping through a few hoops, don't you think?

I know for a fact that a new Subaru bought in the USA has warranty coverage in Canada. For more details, call Subaru USA or check out the Red Flag Deals website/forum.

For a car made in the USA, you just need to pay GST/PST (just like in Canada) and a small import fee (under $300). You need to pay 6% duty for cars made in Japan. Importing items from the states is quite simple thanks to free trade. It's the local dealers who try to scare you with lies about duties.